JSE - JSE Limited - Reviewed condensed consolidated interim results for the

August 18, 2009 at 12:40 PM EDT
JSE                                                                             
JSE - JSE Limited - Reviewed condensed consolidated interim results for the     
six months ended 30 June 2009                                                   
JSE Limited                                                                     
Registration number 2005/022939/06                                              
Share code: JSE                                                                 
ISIN No.: ZAE000079711                                                          
Reviewed condensed consolidated interim results for the six months ended 30     
June 2009                                                                       
Revenue from operations up 7%                                                   
Acquired BESA 22 June 2009                                                      
Basic earnings per share 6% rise                                                
Launched Africa Board February 2009                                             
Commentary                                                                      
Introduction                                                                    
Unless otherwise indicated, all comparatives refer to the six months ended 30   
June 2008.                                                                      
The uncertainty that prevailed on world markets during much of 2008 has been    
felt also in H1 2009, though as the interim period progressed, sentiment about  
the stability of world financial systems started to improve, drawing investors  
back to exchanges. The JSE Limited's (JSE) risk management and operational      
systems have weathered the turbulence of the period.                            
JSE  revenues are largely dependent on the volumes of equities trades on the    
exchange. The volatile conditions in the first half of 2009, combined with      
increased foreign investment in South African equities, boosted trading         
volumes and therefore revenues. However, there was a significant fall in        
volumes of derivatives contracts traded (off a high base). Group revenue        
climbed 7% to R544,5m (June 2008: R508,8m) during the period. This increase in  
revenue, combined with  tightly controlled fixed costs, led to a 9% increase    
in profit before net financing income to R206,1m (June 2008: R188,8m).          
Review of operations                                                            
In the six months to end-June 2009, the JSE focused on product and target       
market development (including the launch of new derivative products and the     
conclusion of the acquisition of the Bond Exchange of South Africa Limited      
(BESA)); client service delivery (information technology development and        
upgrades; liaison with market participants and issuers); fine-tuning of strong  
risk management systems; and maintaining control of costs. During the period,   
the JSE:                                                                        
- Grew the number of trades in spot equities by 31% to 9,96m (2008: 7,62m);     
- Kept costs low despite the continuous increase in product numbers and         
sophistication - see Financial review;                                          
- Focused on growing the retail market through educational initiatives and the  
development of services and instruments specifically for this market;           
- In response to client demand for rand-denominated exposure to well-known      
companies listed offshore, launched an innovative series of derivatives on      
large foreign companies;                                                        
- Encouraged institutions to reduce risks by bringing exposure to derivatives   
on-exchange, using Can-Do instruments;                                          
- Launched the cash-settled Chicago Corn futures contract under licence from    
the Chicago Board of Trade (CBOT) Group on 27 January 2009;                     
- Bedded down the new derivatives trading and clearing systems implemented      
late last year;                                                                 
- Almost doubled the number of currency derivatives contracts traded (on the    
previous period);                                                               
- Launched the Africa Board and listed Trustco Ltd from the Namibian Stock      
Exchange as its first counter, as part of the JSE's strategy to promote the     
growth of African capital markets;                                              
- Met first half technology targets following the bolstering of the JSE's       
inhouse IT team during 2008.                                                    
Impact of BESA acquisition                                                      
The highlight of the period was the JSE's acquisition of BESA through a Scheme  
of Arrangement which was finalised in June 2009. As a consequence, on 22 June   
2009 the JSE acquired 100% of the shares and voting interests in BESA.          
BESA's market operations have been merged with the JSE's existing Yield-X       
division to form a new interest rate division, which is focused on: running     
the JSE's now combined interest rate products and developing a fresh interest   
rate strategy for the South African fixed-income market. The strategy will be   
finalised in consultation with market participants in due course. BESA's        
operating activities and personnel have also been integrated into the JSE.      
The JSE anticipates that the transaction - and the combined expertise of the    
BESA and JSE staff - will yield real benefits for market participants. These    
are expected to include economies of scale due to increased use of              
infrastructure, an increased range of spot and derivative interest rate         
products, enhanced liquidity and market volumes and improved, common risk       
management processes.                                                           
Accounting treatment of BESA acquisition                                        
For the period 1 January 2009 to 21 June 2009, BESA operated as an independent  
entity and reported a loss of R3.3m.                                            
For the period 22 to 30 June 2009, the BESA Group results were consolidated     
into JSE Group results and contributed revenue and other income of R1,3m and a  
net loss of R0,7m. The JSE incurred acquisition-related costs of R4,2m (2008:   
R2,1m) relating to external legal and consultation fees. These costs have been  
included in other expenses in the Group's consolidated statement of             
comprehensive income. The revenue attributable to the BESA Group for this       
period is contained in the "interest rate market" line in the JSE Group's       
consolidated statement of comprehensive income.                                 
If the acquisition had occurred on 1 January 2009, management estimates that    
BESA would have contributed R30,3 million to the JSE's consolidated revenue     
and its contribution to profit for the period would have been a loss of R4      
million. In determining these amounts, management has assumed that the fair     
value adjustments, determined provisionally, that rose on the date of           
acquisition would have been the same if the acquisition had occurred on 1       
January 2009. With effect from 1 July 2009, the core BESA business (and the     
exchange licence granted by the FSB)  has been transferred out of BESA Limited  
into the JSE. The assets and liabilities, and associated revenues and           
expenditures, in respect of BESA Limited's core business have been allocated    
to the appropriate business units within the JSE.                               
The accounting treatment of the transaction is laid out more fully in note 4    
to the interim financial statements.                                            
Changes to the Board of directors                                               
As a result of the JSE acquisition of BESA, BESA chairman                       
Nonkululeko Nyembezi-Heita joined the JSE Board with Jonathan Berman, also a    
former non-executive BESA director, as her alternate with effect from 24 June   
2009. We are delighted to have them as part of the JSE Board of directors. The  
JSE wishes to thank all outgoing BESA Board members for their long standing     
commitment to BESA and their engagement with the JSE during the transaction.    
Financial review                                                                
Revenue increased by 7% to R544,5m during the six months to end-June (2008:     
R508,8m), mainly as a consequence of volatile market conditions and renewed     
foreign interest in our cash equities market, compensating for the decreases    
in revenues of 20.9% and 18.7% from equities and commodities derivatives trade  
respectively.                                                                   
During H1 2009, personnel expenses rose by 28% mainly due to the IT function    
being bought inhouse, resulting in a 27% increase in headcount. This process    
has progressed satisfactorily.                                                  
Other expenses decreased by 6% due mainly to saving outsource expense           
(previously reflected in computer costs) as well as    the charges relating to  
the broad-based BEE scheme having been finally expensed in H1 2008. By          
combining the two expense items of Personnel and Other Expenses, it will be     
seen that total expenses increased by only 5%.                                  
The effective tax rate fell to 34% (2008: 36%) during the period to June 2009,  
due to the conclusion of the charges relating to the broad-based BEE scheme in  
the previous equivalent period.                                                 
The improved revenue and controlled spending raised profit by 6%.               
In the period from 1 January 2009 to 30 June 2009, the JSE has invested R17,7m  
in property and equipment and R155,7m in intangible assets.                     
Goodwill/intangible assets from the BESA acquisition, with a combined value of  
R119,0m, have been provisionally analysed and allocated. This valuation is      
underway and we are aiming to finalise it before year-end.                      
Trade and other receivables are well controlled, despite growth in revenue.     
Net asset value is up 16% compared with the equivalent period last year.        
Capital structure and dividend policy                                           
After paying out R240,6m to the shareholders of BESA for their shares in the    
business and the acquisition of the BESA Guarantee Fund Trust, as well as       
payment of R163,5m in dividends to our shareholders, the JSE Group has long-    
term borrowings of R10 million (arising from the consolidation of the BESA's    
pre acquisition obligations) and R841,8m in cash reserves (2008:                
R836,6m). The Board is satisfied that we have sufficient cash reserves based    
on our current strategy of setting aside sufficient cash to fund four months    
of operations, guarantee all on-market equities trades and fund investment      
requirements.                                                                   
The JSE's dividend policy is to maintain an earnings-based dividend cover of    
between 1,5 and 2,5 times. The Board has not declared an interim dividend as    
it is our policy to only declare one annual dividend at the end of the          
financial year.                                                                 
Prospects                                                                       
As a significant portion of revenue is dependent on the level of trades on the  
Exchange, the JSE is not able to predict future profits. There is no guarantee  
that first half trading volumes will be sustained throughout 2009.              
The JSE will continue to focus on increasing liquidity and improving market     
competitiveness. In the equity derivatives market, the exchange will work with  
clients who previously traded off-exchange but who now want to trade on-        
exchange to manage risk. Moreover, new products planned for the second half in  
cash and derivatives markets should provide trading volume in the medium term.  
In September, rand-denominated contracts in platinum, gold and oil will be      
launched under licence from CBOT.                                               
The transaction with BESA having been concluded, the JSE will also focus on     
making real progress with growing the combined interest rate markets and        
delivering the intended benefits of the merger. We are also continually         
striving to grow the exchange's other markets and revenue streams.              
The JSE remains committed to delivering value to issuers and investors. Our     
focus is on consistent work to build a sustainable business model, with depth   
and breadth. The Board is optimistic that this should be achieved through the   
strategic objectives discussed above, combined with the strength of JSE         
regulation and the quality of our service.                                      
For and on behalf of the Board                                                  
HJ Borkum                           RM Loubser                                  
Chairman                            Chief Executive Officer                     
18 August 2009                                                                  
Sandton                                                                         
Condensed consolidated interim statement of comprehensive income for the six    
months ended 30 June 2009                                                       
                             JSE Group                                          
                                     Six months ended    Year ended             
                                 30 June      30 June   31 December             
                                    2009         2008          2008             
                              (reviewed)   (reviewed)     (audited)             
                                   R'000        R'000         R'000             
                                                                                
                                                                                
                                                                                
Revenue                           544 515      508 812     1 071 570            
Other income                        8 583       10 811        39 805            
Personnel expenses              (129 272)    (100 615)     (238 565)            
Other expenses                  (217 720)    (230 227)     (484 281)            
Profit/(loss) before net                                                        
financing income                  206 106      188 781       388 529            
Interest received                 736 322    1 087 791     2 202 351            
Interest paid                   (677 789)  (1 023 863)   (2 067 408)            
Net financing income               58 533       63 928       134 943            
Share of profit of equity                                                       
accounted investees (net of                                                     
income tax)                        13 223       16 615        31 017            
Profit/(loss) before income                                                     
tax                               277 862      269 324       554 489            
Income tax expense               (94 321)     (96 690)     (180 132)            
Profit/(loss) for the period      183 541      172 634       374 357            
Other comprehensive income                                                      
Net change in fair value of                                                     
available-for-sale financial                                                    
assets                              1 474      (1 979)      (33 721)            
Net change in fair value of                                                     
available-for-sale financial                                                    
assets transferred to profit                                                    
or loss                           (1 221)      (3 176)       (3 388)            
Other comprehensive                                                             
income/(loss) for the period,                                                   
net of income tax                     253      (5 155)      (37 109)            
Total comprehensive                                                             
income/(loss) for the period      183 794      167 479       337 248            
Profit/(loss) attributable                                                      
to:                                                                             
Owners of the Company             183 539      172 634       374 357            
Non-controlling interest                2            -             -            
Profit/(loss) for the period      183 541      172 634       374 357            
Total comprehensive                                                             
income/(loss) attributable                                                      
to:                                                                             
Owners of the Company             183 792      167 479       337 248            
Non-controlling interest                2            -             -            
Total comprehensive                                                             
income/(loss) for the period      183 794      167 479       337 248            
Earnings per share                                                              
Basic earnings/(loss) per                                                       
share (cents)                       215,6        202,8         439,7            
Diluted earnings/(loss) per                                                     
share (cents)                       212,5        200,5         434,0            
                             Investor Protection Funds*                         
                                     Six months ended    Year ended             
                                 30 June      30 June   31 December             
                                    2009         2008          2008             
                              (reviewed)   (reviewed)     (audited)             
                                   R'000        R'000         R'000             
                                                                                
                                                                                
                                                                                
Revenue                                55            -             -            
Other income                        4 110        5 064         9 074            
Personnel expenses                      -            -             -            
Other expenses                    (6 453)      (5 626)      (20 588)            
Profit/(loss) before net                                                        
financing income                  (2 288)        (562)      (11 514)            
Interest received                   2 400        2 890         5 926            
Interest paid                           -            -             -            
Net financing income                2 400        2 890         5 926            
Share of profit of equity                                                       
accounted investees (net of                                                     
income tax)                             -            -             -            
Profit/(loss) before income                                                     
tax                                   112        2 328       (5 588)            
Income tax expense                      -            -             -            
Profit/(loss) for the period          112        2 328       (5 588)            
Other comprehensive income                                                      
Net change in fair value of                                                     
available-for-sale financial                                                    
assets                              1 474      (1 979)      (33 721)            
Net change in fair value of                                                     
available-for-sale financial                                                    
assets transferred to profit                                                    
or loss                           (1 221)      (3 176)       (3 388)            
Other comprehensive                                                             
income/(loss) for the period,                                                   
net of income tax                     253      (5 155)      (37 109)            
Total comprehensive                                                             
income/(loss) for the period          365      (2 827)      (42 697)            
Profit/(loss) attributable                                                      
to:                                                                             
Owners of the Company                 112        2 328       (5 588)            
Non-controlling interest                -            -             -            
Profit/(loss) for the period          112        2 328       (5 588)            
Total comprehensive                                                             
income/(loss) attributable                                                      
to:                                                                             
Owners of the Company                 365      (2 827)      (42 697)            
Non-controlling interest                -            -             -            
Total comprehensive                                                             
income/(loss) for the period          365      (2 827)      (42 697)            
Earnings per share                                                              
Basic earnings/(loss) per                                                       
share (cents)                         0,1          2,7         (6,6)            
Diluted earnings/(loss) per                                                     
share (cents)                         0,7          2,7         (6,5)            
*Investor Protection Funds comprises the JSE Guarantee Fund Trust, JSE          
Derivatives Fidelity Fund Trust and BESA Guarantee Fund Trust (the "Trusts").   
The JSE maintains these Trusts for investor protection purposes as required     
under the Securities Services Act 36, of 2004. The JSE is required to           
consolidate the Trusts into the results of the Group in terms of International  
Financial Reporting Standards (IFRS). However, as these Trusts are legally      
separate from the JSE, neither the JSE nor its shareholders have any right to   
the net assets of these Trusts. For enhanced understanding, the Trusts have     
been shown separately (before intercompany adjustments), although, for          
compliance with IFRS, the results form part of the Group financial statements.  
Condensed consolidated interim statement of financial position                  
as at 30 June 2009                                                              
                             JSE Group                                          
                             As at                      As at                   
                                 30 June       30 June  31 December             
                                    2009          2008         2008             
                              (reviewed)    (reviewed)    (audited)             
                                   R'000         R'000        R'000             
                                                                                
                                                                                
                                                                                
Assets                                                                          
Non-current assets                802 548       641 280      656 823            
Property and equipment             90 672        77 476       84 115            
Intangible assets                 378 138       210 796      232 763            
Investments in equity                                                           
accounted investees                78 163        68 244       82 647            
Other investments                 191 677       217 555      194 025            
Derivative financial                                                            
instruments                         3 069        14 625        5 619            
Deferred taxation                  60 829        52 584       57 654            
Current assets                 14 987 542    20 459 456   15 993 536            
Trade and other receivables       162 377       232 950      204 104            
Income tax receivable              27 972             -       15 978            
Margin and collateral                                                           
deposits                       13 955 414    19 389 881   14 827 113            
Cash and cash equivalents         841 779       836 625      946 341            
Total assets                   15 790 090    21 100 736   16 650 359            
Equity and liabilities                                                          
Total equity                    1 395 436     1 203 723    1 373 492            
Total equity attributable to                                                    
equity holders of the Company   1 393 815     1 203 723    1 373 492            
Non-controlling interest            1 621             -            -            
Non-current liabilities           216 008       177 133      188 619            
Finance lease                       1 459           801        2 402            
Employee benefits                  57 046        45 156       51 336            
Deferred taxation                  25 252        10 650       11 972            
Operating lease liability          73 455        77 887       75 767            
Investor Protection Levy           47 811        41 750       46 200            
Loans and borrowings               10 000             -            -            
Due to SAFEX members                  985           889          942            
Current liabilities            14 178 646    19 719 880   15 088 248            
Trade and other payables          178 312       286 572      208 031            
Employee benefits                  40 076        38 762       50 071            
Income tax payable                      -         3 384            -            
Operating lease liability           4 844         1 281        3 033            
Margin and collateral                                                           
deposits                       13 955 414    19 389 881   14 827 113            
Total equity and liabilities   15 790 090    21 100 736   16 650 359            
                             Investor Protection Funds                          
                             As at                      As at                   
                                 30 June       30 June  31 December             
                                    2009          2008         2008             
                              (reviewed)    (reviewed)    (audited)             
                                   R'000         R'000        R'000             
                                                                                
                                                                                
                                                                                
Assets                                                                          
Non-current assets                191 674       217 551      194 021            
Property and equipment                  -             -            -            
Intangible assets                       -             -            -            
Investments in equity                                                           
accounted investees                     -             -            -            
Other investments                 191 674       217 551      194 021            
Derivative financial                                                            
instruments                             -             -            -            
Deferred taxation                       -             -            -            
Current assets                    132 909        50 141       34 109            
                                                                                
Trade and other receivables           449           402        3 443            
Income tax receivable                   -             -            -            
Margin and collateral                                                           
deposits                                -             -            -            
Cash and cash equivalents         132 460        49 739       30 666            
Total assets                      324 583       267 692      228 130            
Equity and liabilities                                                          
Total equity                      323 367       267 367      227 497            
Total equity attributable to                                                    
equity holders of the Company     323 367       267 367      227 497            
Non-controlling interest                -             -            -            
Non-current liabilities                 -             -            -            
Finance lease                           -             -            -            
Employee benefits                       -             -            -            
Deferred taxation                       -             -            -            
Operating lease liability               -             -            -            
Investor Protection Levy                -             -            -            
Loans and borrowings                    -             -            -            
Due to SAFEX members                    -             -            -            
Current liabilities                 1 216           325          633            
Trade and other payables            1 216           325          633            
Employee benefits                       -             -            -            
Income tax payable                      -             -            -            
Operating lease liability               -             -            -            
Margin and collateral                                                           
deposits                                -             -            -            
Total equity and liabilities      324 583       267 692      228 130            
Condensed consolidated interim statement of cash flows                          
for the six months ended 30 June 2009                                           
                                 JSE Group                                      
                                 Six months ended          Year ended           
                                     30 June      30 June  31 December          
                                        2009         2008         2008          
                                  (reviewed)   (reviewed)    (audited)          
                                       R'000        R'000        R'000          
                                                                                
                                                                                
                                                                                
Net cash inflow from operating                                                  
activities                            185 965      300 213      489 244         
Net cash (outflow)/inflow from                                                  
investing activities                (127 041)     (84 465)    (163 783)         
Net cash outflow from financing                                                 
activities                          (163 486)    (143 668)    (143 665)         
Net (decrease)/increase in cash                                                 
and cash equivalents                (104 562)       72 080      181 796         
Cash and cash equivalents at                                                    
beginning of period                   946 341      764 545      764 545         
Cash and cash equivalents at end                                                
of period                             841 779      836 625      946 341         
                                 Investor Protection Funds                      
                                 Six months ended          Year ended           
                                     30 June      30 June  31 December          
                                        2009         2008         2008          
                                  (reviewed)   (reviewed)    (audited)          
                                       R'000        R'000        R'000          
                                                                                
                                                                                
                                                                                
Net cash inflow from operating                                                  
activities                              3 727        5 271        4 220         
Net cash (outflow)/inflow from                                                  
investing activities                   98 067        4 114     (13 908)         
Net cash outflow from financing                                                 
activities                                  -            -            -         
Net (decrease)/increase in cash                                                 
and cash equivalents                  101 794        9 385      (9 688)         
Cash and cash equivalents at                                                    
beginning of period                    30 666       40 354       40 354         
Cash and cash equivalents at end                                                
of period                             132 460       49 739       30 666         
Condensed consolidated interim statement of changes in equity                   
for the six months ended 30 June 2009                                           
                                 Attributable to equity holders                 
                                 of the Company                                 
                                                                  Non-          
                                      Share       Share  distributable          
                                    capital     premium        reserve          
Group                                  R'000       R'000          R'000         
Balance at 31 December 2007                                                     
(audited)                              8 514     162 779         10 058         
Total comprehensive income for                                                  
the period                                 -           -              -         
Transactions with owners,                                                       
recorded directly in equity                -           -              -         
Balance at 30 June 2008                                                         
(reviewed)                             8 514     162 779         10 058         
Balance at 31 December 2007                                                     
(audited)                              8 514     162 779         10 058         
Total comprehensive income for                                                  
the period                                 -           -              -         
Transactions with owners,                                                       
recorded directly in equity                -           -              -         
Balance at 31 December 2008                                                     
(audited)                              8 514     162 779         10 058         
Total comprehensive income for                                                  
the period                                 -           -              -         
Transactions with owners,                                                       
recorded directly in equity                                                     
Contributions by and                                                            
distributions to owners                    -           -              -         
Non-controlling interest in BESA                                                
Group                                      -           -              -         
Transfer to the BESA Guarantee                                                  
Fund Trust*                                -           -              -         
Total transactions with owners             -           -              -         
Balance at 30 June 2009                                                         
(reviewed)                             8 514     162 779         10 058         
                                 Attributable to equity holders of the          
                                 Company                                        
                                                                  Non-          
                                      BBBEE     Retained   controlling          
                                    reserve     earnings      interest          
Group                                  R'000        R'000         R'000         
Balance at 31 December 2007                                                     
(audited)                            127 371      529 762             -         
Total comprehensive income for                                                  
the period                                 -      170 306             -         
Transactions with owners,                                                       
recorded directly in equity           38 132      110 566             -         
Balance at 30 June 2008                                                         
(reviewed)                           165 503      589 502             -         
Balance at 31 December 2007                                                     
(audited)                            127 371      529 762             -         
Total comprehensive income for                                                  
the period                                 -      379 945             -         
Transactions with owners,                                                       
recorded directly in equity           38 132    (110 566)             -         
Balance at 31 December 2008                                                     
(audited)                            165 503      799 141             -         
Total comprehensive income for                                                  
the period                                 -      183 427             2         
Transactions with owners,                                                       
recorded directly in equity                                                     
Contributions by and                                                            
distributions to owners              (4 469)    (159 000)             -         
Non-controlling interest in BESA           -            -                       
Group                                                             1 619         
Transfer to the BESA Guarantee             -     (95 505)                       
Fund Trust*                                                           -         
Total transactions with owners       (4 469)    (254 505)         1 619         
Balance at 30 June 2009                                                         
(reviewed)                           161 034      728 063         1 621         
                               Attributable to equity holders of the            
                               Company                                          
                                      Total     Investor                        
                               Exchange and   Protection   Total Group          
                               subsidiaries        Funds        equity          
                                      R'000        R'000         R'000          
Group                                                                           
Balance at 31 December 2007                                                     
(audited)                            838 484      270 194     1 108 678         
Total comprehensive income for                                                  
the period                           170 306      (2 827)       167 479         
Transactions with owners,                                                       
recorded directly in equity         (72 434)            -      (72 434)         
Balance at 30 June 2008                                                         
(reviewed)                           936 356      267 367     1 203 723         
Balance at 31 December 2007                                                     
(audited)                            838 484      270 194     1 108 678         
Total comprehensive income for                                                  
the period                           379 945     (42 697)       337 248         
Transactions with owners,                                                       
recorded directly in equity         (72 434)            -      (72 434)         
Balance at 31 December 2008                                                     
(audited)                          1 145 995      227 497     1 373 492         
Total comprehensive income for                                                  
the period                           183 429          365       183 794         
Transactions with owners,                                                       
recorded directly in equity                                                     
Contributions by and                                                            
distributions to owners            (163 469)            -     (163 469)         
Non-controlling interest in                                                     
BESA Group                             1 619            -         1 619         
Transfer to the BESA Guarantee                                                  
Fund Trust*                         (95 505)       95 505             -         
Total transactions with owners     (257 355)       95 505     (161 850)         
Balance at 30 June 2009                                                         
(reviewed)                         1 072 069      323 367     1 395 436         
*The transfer represents the isolation in the BESA Guarantee Fund Trust of the  
value on acquisition by the JSE of that fund.                                   
Notes to the condensed consolidated interim financial statements                
for the six months ended 30 June 2009                                           
1.  Basis of preparation and accounting policies#                               
JSE Limited (the "Company") is a company domiciled in the Republic of South     
Africa. The consolidated interim financial statements of the Company as at and  
for the six months ended 30 June 2009 comprise the Company and its              
subsidiaries (together referred to as "the Group") and the Group's interests    
in associates and jointly controlled entities.                                  
Except for the adoption of new and revised accounting standards, the JSE        
Limited's principal accounting policies applied by the Group in its condensed   
consolidated interim financial statements for the six months ended 30 June      
2009 are the same as those applied by the Group in its consolidated financial   
statements as at and for the year ended 31 December 2008.                       
The JSE Limited's condensed consolidated interim financial statements as at     
and for the six months ended 30 June 2009, have been prepared in terms of the   
recognition and measurement requirements of International Financial Reporting   
Standards and the presentation and disclosure requirements of IAS 34, Interim   
Financial Reporting.                                                            
Accounting for business combinations                                            
The Group has early adopted IFRS 3 Business Combinations (2008) and IAS 27      
Consolidated and Separate Financial Statements (2008) for business              
combinations occurring in the financial year starting                           
1 January 2009. All business combinations occurring on or after                 
1 January 2009 are accounted for by applying the acquisition method. The        
change in accounting policy was applied prospectively.                          
The Group measures goodwill as the fair value of the consideration transferred  
including the recognised amount of any non-controlling interest in the          
acquiree, less the net recognised amount (generally fair value) of the          
identifiable assets acquired and liabilities assumed, all measured as of the    
acquisition date.                                                               
Transaction costs that the Group incurs in connection with a business           
combination, such as finder's fees, legal fees, due diligence fees, and other   
professional and consulting fees are expensed as incurred.                      
A contingent liability of the acquiree is assumed in a business combination     
only if such a liability represents a present obligation and arises from a      
past event, and its fair value can be measured reliably.                        
Determination and presentation of operating segments                            
As of 1 January 2009 the Group determines and presents operating segments       
based on the information that internally is provided to the Executive           
Committee ("Exco"), which represents the Group's chief operating decision       
maker. This change in accounting policy is due to the adoption of IFRS 8        
Operating Segments. In addition the Group has early adopted the 2009            
improvement project. As the services provided by the JSE are not subject to     
materially different operational risks, they were previously regarded as a      
single business and geographical segment for annual financial statement         
reporting purposes and therefore segment information was not disclosed. The     
new accounting policy in respect of segment operating disclosures is presented  
as follows.                                                                     
Comparative segment information has been presented in conformity with the       
transitional requirements of IFRS 8. Since the change in accounting policy      
only impacts presentation and disclosure aspects, there is no impact on         
earnings per share.                                                             
An operating segment is a component of the Group that engages in business       
activities from which it may earn revenues and incur expenses, including        
revenues and expenses that relate to transactions with any of the Group's       
other components. An operating segment's operating results are reviewed         
regularly by Exco to make decisions about resources to be allocated to the      
segment and assess its performance, and discrete financial information is       
available for an operating segment. Segment results that are reported to Exco   
include items directly attributable to a segment as well as those that can be   
allocated on a reasonable basis. Unallocated items comprise mainly information  
technology expenses and corporate overheads.                                    
Presentation of financial statements                                            
The Group has applied the revised IAS 1 Presentation of Financial Statements    
(2007), which became effective as of 1 January 2009. As a result, the Group     
presents in the consolidated statement of changes in equity all owner changes   
in equity, whereas all non-owner changes in equity are presented in the         
consolidated statement of comprehensive income. This presentation has been      
applied in these condensed consolidated interim financial statements as at and  
for the six month period ended on 30 June 2009.                                 
Comparative information has been re-presented so that it also is in conformity  
with the revised standard. Since the change in accounting policy only impacts   
presentation aspects, there is no impact on earnings per share.                 
2.  Comparative figures#                                                        
Where necessary, comparative figures have been reclassified to conform to       
changes in presentation as reported in the consolidated financial statements    
as at and for the year ended 31 December 2008.                                  
3.  Operating segments#                                                         
The Group has 5 reportable segments, as reflected below. The business units     
offer different products and services, and are managed seperately because they  
require different technology and marketing strategies. Management has           
determined the operating segments based on the monthly reports reviewed by the  
Exco. Exco reviews the revenue streams as set out in note 5. Financial and      
personnel resources are allocated according to the needs of the various         
divisions in order to apply the strategy and operating plans agreed to during   
the budgeting process. Costs in the JSE are managed holistically across the     
Exchange and variances against budget are closely monitored. Information        
technology and other corporate overheads are generally not allocated to a       
particular segment and are reflected in "Group and Other" below.                
Reportable segments                                                             
                                  Equities       Equity    Commodity            
                                 division*  derivatives  derivatives            
                                     R'000        R'000        R'000            
                                                                                
                                                                                
For the six months ended                                                        
30 June 2009                                                                    
External revenues                   342 805       53 732       17 756           
Reportable segment profit                                                       
before income tax                   298 782       45 254       13 787           
For the six months ended                                                        
30 June 2008                                                                    
External revenues                   303 519       67 845       21 806           
Reportable segment profit                                                       
before income tax                   280 066       61 915       18 728           
For the year ended                                                              
31 December 2008                                                                
External revenues                   648 040      131 591       46 893           
Reportable segment profit                                                       
before income tax                   569 143      115 362       39 383           
                         Interest                                               
                             rate Information   Group and                       
                         division       sales       other      Total            
                            R'000       R'000       R'000      R'000            
                                                                                
                                                                                
For the period ended                                                            
30 June 2009                                                                    
External revenues            6 154      55 133      68 935    544 515           
Reportable segment                                                              
profit before income tax     2 447      53 979   (136 387)    277 862           
For the period ended                                                            
30 June 2008                                                                    
External revenues            2 678      46 192      66 772    508 812           
Reportable segment                                                              
profit before income tax       936      43 300   (135 621)    269 324           
For the period ended                                                            
31 December 2008                                                                
External revenues            9 625      96 563     138 858  1 071 570           
Reportable segment                                                              
profit before income tax     4 106      89 617   (263 122)    554 489           
* Comprises equities trading fees, membership fees, listing fees, broker deal   
accounting services and risk management, clearing and settlement fees           
4.  Acquisition of BESA#                                                        
Business combination                                                            
The Scheme of Arrangement, proposed by BESA and the JSE in December 2008 in     
respect of the proposed acquisition of BESA, was successfully finalised in      
June 2009, with all necessary regulatory and competition authority approvals    
having been received.  As a consequence, on                                     
22 June 2009 the Group acquired 100 percent of the shares and voting interests  
in BESA, a licensed exchange responsible for operating and regulating the       
fixed-income and interest-rate derivatives markets in South Africa.             
As a consequence of this acquisition, the Group anticipates being able to       
increase utilisation of infrastructure to achieve economies of scale and to     
leverage the combined expertise of the BESA and JSE staff. This is expected to  
translate into real benefits for market participants, particularly with         
respect to an increased range of spot and derivative products, enhanced         
liquidity and market volumes, and improved, common risk-management processes.   
In the period 22 June 2009 to 30 June 2009, BESA Group contributed revenue and  
other income of R1,3m and a loss of R0,7m. If the acquisition had occurred on   
1 January 2009, management estimates that the BESA Group's consolidated         
revenue would have been R30,3m, and the BESA Group's consolidated loss for the  
period would have been R4,0m. In determining these amounts, management has      
assumed that the fair value adjustments, determined provisionally, that arose   
on the date of acquisition would have been the same if the acquisition had      
occurred on 1 January 2009.                                                     
The following summarises the major classes of consideration transferred, and    
the recognised amounts of assets acquired and liabilities assumed at the        
acquisition date:                                                               
Consideration transferred                                                       
                                                              R'000             
Cash consideration paid                                      240 582            
Identifiable assets acquired and liabilities assumed                            
Property and equipment                                         5 585            
Intangible assets                                             72 347            
Trade and other receivables                                   13 064            
Cash and cash equivalents                                    145 494            
Employee benefits                                            (1 502)            
Deferred lease liability                                       (534)            
Deferred taxation                                           (14 137)            
Loan from OMX Technology AB                                 (10 000)            
Trade and other payables                                    (14 776)            
Total net identifiable assets                                195 541            
The fair values of the net identifiable assets (excluding trade and other       
receivables and cash and cash equivalents) have been determined provisionally   
pending completion of an independent valuation. Intangible assets comprise      
BESA's trade name, customer relationships, computer software and regulatory     
and operational relationships.                                                  
The trade and other receivables include gross contractual amounts due of        
R13,1m of which Rnil was expected to be uncollectible at the acquisition date.  
The non-controlling interest was based on the proportionate share of fair       
value of identifiable net assets.                                               
The loan from OMX Technology AB has been advanced to BondClear Limited, a       
subsidiary of the Group, in accordance with the shareholders' agreement         
between BondClear Limited ("BondClear"), BESA Investments (Pty) Limited and     
OMX AB (PUBL) concluded during September 2008.  This is an interest-free,       
subordinated loan with no fixed terms of repayment.                             
Goodwill                                                                        
Goodwill on the acquisition has been provisionally recognised as follows:       
                                                              R'000             
Total consideration transferred                              240 582            
Add: non-controlling interests                                 1 619            
                                                            242 201             
Less: value of net identifiable assets                       195 541            
Goodwill                                                      46 660            
The goodwill recognised is not expected to be deductible for income tax         
purposes.                                                                       
Transactions recognised separately from the acquisition                         
The JSE incurred acquisition-related costs of R4,2m (2008: R2,1m) relating to   
external legal and consulting fees.  These costs have been included in other    
expenses in the Group's consolidated statement of comprehensive income for the  
six months ended 30 June 2009.                                                  
5.  Revenue#                                                                    
                             Six months ended         Year ended                
                             30 June                  31 December               
                                    2009         2008          2008             
                              (reviewed)   (reviewed)     (audited)             
                                   R'000        R'000         R'000             
                                                                                
                                                                                
Equity derivatives fees            53 732       67 845       131 591            
Commodity derivatives fees         17 756       21 806        46 893            
Equities trading fees             145 267      121 234       266 739            
Interest rate market                6 154        2 678         9 625            
Risk management, clearing and                                                   
settlement fees                    76 187       72 811       157 744            
Information sales                  55 133       46 192        96 563            
Membership fees                     4 151        3 433         6 895            
Listing fees                       39 011       38 034        69 134            
Broker deal accounting                                                          
services                           78 189       68 007       147 528            
Funds management                   25 568       23 534        47 491            
Total revenue before Strate                                                     
ad valorem fees                   501 147      465 574       980 203            
Strate ad valorem fees             43 368       43 238        91 367            
Total revenue                     544 515      508 812     1 071 570            
6.  Headline earnings per share#                                                
                             Six months ended         Year ended                
                             30 June                  31 December               
                                    2009         2008          2008             
                              (reviewed)   (reviewed)     (audited)             
                                   R'000        R'000         R'000             
                                                                                
                                                                                
Reconciliation of headline                                                      
earnings:                                                                       
Profit for the period             183 541      172 634       374 357            
Adjustments are made to the                                                     
following:                                                                      
Loss on sale of property and                                                    
equipment                               -            -             2            
Impairment of intangible                                                        
assets                                  -            -         8 700            
Impairment of available-for-                                                    
sale securities                     2 113            -         9 811            
Profit on realisation of                                                        
available-for-sale                                                              
instruments                       (1 655)      (3 176)       (3 883)            
Headline earnings                 183 999      169 458       388 987            
Headline earnings per share                                                     
(cents)                             216,1        199,0         456,9            
Diluted headline earnings per                                                   
share (cents)                       213,0        196,8         450,9            
7.  Contingent liabilities and commitments#                                     
Except as noted below, there were no changes to the contingent liabilities and  
commitments reported in the consolidated financial statements as at and for     
the year ended 31 December 2008.                                                
7.1 Contingent liabilities                                                      
(i)  A subsidiary company of the Group, BondClear Limited, entered into a       
clearing services agreement with OMX Technology AB ("OMX"). This agreement      
includes a contractual commitment for BondClear to pay fixed operating costs    
of R33,3m to OMX over the initial five year operating period of the contract.   
The effective date of the contract and the incurrence of this commitment is     
contingent upon the condition precedent that BondClear obtains a clearing       
licence from the Financial Services Board, for which BondClear has applied.     
Should the condition precedent be satisfied, the entire commitment would        
become payable immediately in the event of an early termination of the          
contract.                                                                       
(ii)  BESA Investments, a subsidiary company of the Group, has undertaken to    
provide funding to MarketTech as may be required from time to time on the       
terms and conditions contemplated in the Shareholders Agreement to enable       
MarketTech to pay any claims and all its operating expenses to the extent that  
this is necessary so as to place MarketTech in the financial position where     
its liabilities (excluding subordinated loans and all other loans advanced by   
shareholder) do not exceed its assets, and it will be able to pay its debts or  
settle its liabilities (excluding subordinated loans and all other loans        
advanced by MarketTech's shareholders if any) as they arise in the ordinary     
course of the business.                                                         
7.2 Commitments                                                                 
The BESA Group leases a building at Melrose Arch and accounts for the lease as  
an operating lease. The lease was renewed for a further five year period        
during 2007 and terminates on 30 June 2012. The lease payments escalate at 10%  
per annum.                                                                      
                                                               As at            
                                                             30 June            
                                                                2009            
                                                          (reviewed)            
                                                               R'000            
                                                                                
                                                                                
Total future minimum payments:                                                  
Not later than one year                                         1 998           
Between one and five years                                      4 615           
                                                               6 613            
Review conclusion                                                               
KPMG Inc., the Company's independent auditor, has reviewed the condensed        
consolidated interim financial statements contained in this interim report and  
has expressed an unmodified conclusion on the condensed consolidated interim    
financial statements.  Their review report is available for inspection at the   
company's registered office.                                                    
The condensed consolidated financial results include the consolidated           
statement of financial position at 30 June 2009, and the consolidated           
statement of comprehensive income, consolidated statement of changes in equity  
and the consolidated statement of changes in cash flows for the six months      
then ended and selected explanatory notes. Selected explanatory notes are       
marked with a #.                                                                
A full version of these results can be found on our website:                    
www.jse.co.za                                                                   
Registered office One Exchange Square, 2 Gwen Lane, Sandown,                    
Sandton, 2196                                                                   
Postal address Private Bag X991174, Sandton, 2146                               
Telephone                                                                       
011 520 7000                                                                    
Web www.jse.co.za                                                               
Email ir@jse.co.za                                                              
Sponsor                                                                         
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Date: 18/08/2009 12:39:01 Produced by the JSE SENS Department.