FINANCIAL STATEMENTS MARCH 2019 WHAT ARE FINANCIAL STATEMENTS - PowerPoint PPT Presentation

ANNUAL FINANCIAL STATEMENTS MARCH 2019

WHAT ARE FINANCIAL STATEMENTS  Financial statements are written records that convey the business activities and financial performance of a company.  NJMPF financial statements are audited by Auditor General.

OBJECTIVE AND IMPORTANCE OF AFS  Shows the profitability of a business.  Shows the solvency of a business.  Presentation of the financial strength of the business.  Communicating with different stakeholders.

BALANCE SHEET (STATEMENT OF NET ASSETS & FUNDS)  The balance sheet provides an overview of a company’s assets, liabilities, accumulated funds and reserves as a snapshot in time.  The date on the balance sheet shows when the snapshot was taken, which is generally the end of the financial year.  This gives stakeholders an idea as to what the company owns and owes as well as the amount invested by company.

INCOME STATEMENT (STATEMENT OF CHANGES IN NET ASSETS & FUNDS)  Income statement provides an overview of revenues, expenses and net income.  Financial performance is assessed by giving a summary of how the company incurs its revenues and expenses through both operating and non- operating activities of the business.  It also shows net profit or loss incurred over a specific accounting period.

INVESTMENT PERFORMANCE  The long-term investment objective of the funds as approved by the Board of Trustees are CPI plus 5% net of investment fees over a rolling five-year period.  Asset Managers are expected to add returns of 2% a year more than that achieved from passive benchmark portfolio, measured over a rolling 5- year period.  The combined investment assets of the three Funds increased by 6.21% over the previous year from R 19.9 billion to R 21.1 billion as at 31 March 2019.

INVESTMENT PERFORMANCE AVERAGE 5 YEARS RETURN 12 10 8 6 4 2 0 CPI + 5% SF RF PF

INVESTMENT PERFORMANCE AVERAGE 5 YEARS RETURN 8,6 8,5 8,4 8,3 8,2 8,1 AVERAGE 5 YEARS 8 RETURN 7,9

INVESTMENT PERFORMANCE  According to investment reports, 2018 was the worst year in a decade for South African stocks  The JSE All Share Index (Alsi) was down 11% in Rand terms last year as a result the’ investment returns were low in 2018  2019 has seen improved performance in the markets and the results of the recovery will come through in portfolio returns  For Superannuation and Retirement Fund members, investment performance has no direct effect on the value of their benefits because it is calculated using pensionable salary and years of service.  The diversity of allocations in the Provident Fund portfolio as well as smoothing of returns has allowed for the positive performance overall

INVESTMENT PERFORMANCE (PROVIDENT FUND)  The Fund slight underperformed the investment manager benchmark over the 5 years to 31 March 2019.  The Provident Fund remains ranked in the TOP QUARTILE over the long term , in the ALEXANDER FORBES GLOBAL LARGE MANAGER SURVEY

INVESTMENT PERFORMANCE (RETIREMENT FUND)  The Fund has for the first time not achieved its long-term investment objective. This is due to South African equities, which form a large part of the portfolio, have only marginally outperformed CPI over the last 5 years.  The Fund has performed in line with the investment manager benchmark over the 5 years to 31 March 2019.

INVESTMENT PERFORMANCE (SUPERANNUATION FUND)  The Fund slightly underperformed the investment manager benchmark over the 5 years to 31 March 2019.

ASSET ALLOCATION (SUPERANNUATION FUND) ASSET CASH 4% COMMODITIES 1% BONDS 26% PROPERTIES 3% EQUITIES 64%

ASSET ALLOCATION (RETIREMENT FUND) ASSET CASH 4% COMMODITIES 1% BONDS 26% PROPERTIES 3% EQUITIES 65% CIS 2%

ASSET ALLOCATION (PROVIDENT FUND) ASSET CASH 4% COMMODITIES 1% BONDS 22% PROPERTIES 4% EQUITIES 67%

FINANCIAL HIGHLIGHTS (PROVIDENT FUND)  Investments assets of the Provident Fund increased by 16.35% from R 4,116 billion to R 4.789 billion as at 31 March 2019.  The total assets of the Fund at market value increased by 17.41% from R4.263 billion to R 5.005 billion as at 31 March 2019  The Fund return on investment has increased by 8.59% over the year to 31 March 2019.

FINANCIAL HIGHLIGHTS (RETIREMENT FUND)  Investments assets of the Retirement Fund increased by 2.94% from R 4.077 billion to R 4.198 billion as at 31 March 2019.  The total assets of the Fund at market value increased by 2.76% from R4.125 billion to R 4.239 billion as at 31 March 2019 .  The Fund return on investment has decreased by 13.58% over the year to 31 March 2019.

FINANCIAL HIGHLIGHTS (SUPERANNUATION FUND)  Investments assets of the Superannuation Fund increased by 9.67% from R 11.705 billion to R 12.146 billion as at 31 March 2019.  The total assets of the Fund at market value increased by 3.83% from R11.800 billion to R 12.252 billion as at 31 March 2019.  The Fund return on investment has decreased by 11.90% over the year to 31 March 2019.