PREFTX 201903290085A
Preliminary results for Coreshares Index Tracker collective investment scheme
("Coreshares preference share exchang
CORESHARES INDEX TRACKER COLLECTIVE INVESTMENT SCHEME
INSTRUMENT: CORESHARES PREFTRAX
ABBREVIATED NAME: PREFTRAX
SHARE CODE: PREFTX
ISIN CODE: ZAE000185658
PRELIMINARY RESULTS FOR CORESHARES INDEX TRACKER COLLECTIVE INVESTMENT SCHEME
("CORESHARES PREFERENCE SHARE EXCHANGE TRADED FUND")
AS AT 31 DECEMBER 2018
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
2018 2017
R R
ASSETS
Listed investments held at fair value through 249 765 075 327 780 852
profit or loss
Distributions receivable 9 521 21 855
Cash and cash equivalents 3 208 794 6 144 422
TOTAL ASSETS 252 983 390 333 947 129
LIABILITIES
Net assets attributable to investors 252 821 533 333 776 931
Trade and other payables 161 857 170 198
TOTAL LIABILITIES 252 983 390 333 947 129
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE 12 MONTHS ENDED 31 DECEMBER 2018
Represented
12 months 15 months
2018 2017
R R
Distribution income 27 401 230 46 421 140
Interest income 256 350 402 097
Total revenue 27 657 580 46 823 237
Management and administration expenses (1 490 277) (2 720 203)
Income before taxation 26 167 303 44 103 034
Taxation - -
Income before distributions 26 167 303 44 103 034
Distributions paid (28 602 544) (49 946 520)
Loss after distributions (2 435 241) (5 843 486)
Net fair value gains/(losses) on financial 12 502 314 (48 171 004)
instruments at fair value through profit or loss
Income/(loss) after net fair value gains/(losses) 10 067 073 (54 014 490)
Other comprehensive income - -
Increase/(decrease) in net assets attributable to 10 067 073 (54 014 490)
investors
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS
FOR THE 12 MONTHS ENDED 31 DECEMBER 2018
Accumulated
Capital Profit Total
R R R
Balance at 30 September 2016 305 001 858 10 273 710 315 275 568
Creation of 340 000 units on 04 3 115 677 3 115 677
October 2016
Creation of 530 000 units on 26 4 877 129 4 877 129
October 2016
Creation of 250 000 units on 31 2 305 102 2 305 102
October 2016
Creation of 200 000 units on 02 1 847 015 1 847 015
November 2016
Creation of 700 000 units on 10 6 436 573 6 436 573
November 2016
Creation of 600 000 units on 15 5 553 127 5 553 127
November 2016
Creation of 700 000 units on 16 6 486 916 6 486 916
November 2016
Creation of 1 180 000 units on 21 10 918 171 10 918 171
November 2016
Creation of 500 000 units on 24 4 620 873 4 620 873
November 2016
Creation of 400 000 units on 29 3 708 531 3 708 531
November 2016
Creation of 250 000 units on 06 2 288 527 2 288 527
December 2016
Creation of 200 000 units on 13 1 818 103 1 818 103
December 2016
Creation of 500 000 units on 13 4 576 889 4 576 889
December 2016
Creation of 800 000 units on 14 7 308 828 7 308 828
December 2016
Creation of 800 000 units on 20 7 363 398 7 363 398
December 2016
Creation of 300 000 units on 21 2 758 967 2 758 967
December 2016
Creation of 300 000 units on 22 2 769 770 2 769 770
December 2016
Creation of 200 000 units on 17 1 882 142 1 882 142
January 2017
Creation of 875 000 units on 19 8 245 547 8 245 547
January 2017
Creation of 900 000 units on 26 8 397 961 8 397 961
January 2017
Creation of 150 000 units on 30 1 385 770 1 385 770
January 2017
Creation of 150 000 units on 07 1 384 679 1 384 679
February 2017
Creation of 200 000 units on 13 1 858 597 1 858 597
February 2017
Creation of 150 000 units on 22 1 391 042 1 391 042
February 2017
Creation of 600 000 units on 17 5 548 621 5 548 621
March 2017
Creation of 150 000 units on 30 1 383 890 1 383 890
March 2017
Creation of 150 000 units on 05 April 1 369 385 1 369 385
2017
Creation of 500 000 units on 18 May 4 549 238 4 549 238
2017
Creation of 500 000 units on 30 May 4 578 190 4 578 190
2017
Creation of 500 000 units on 01 June 4 543 197 4 543 197
2017
Creation of 325 000 units on 02 June 2 949 492 2 949 492
2017
Creation of 200 000 units on 27 June 1 809 872 1 809 872
2017
Creation of 40 000 units on 17 July 359 796 359 796
2017
Liquidation of 350 000 units on 06 (3 030 115) (3 030 115)
September 2017
Liquidation of 650 000 units on 11 (5 584 184) (5 584 184)
October 2017
Liquidation of 800 000 units on 12 (6 838 297) (6 838 297)
October 2017
Liquidation of 650 000 units on 18 (5 565 107) (5 565 107)
October 2017
Liquidation of 300 000 units on 09 (2 511 791) (2 511 791)
November 2017
Liquidation of 600 000 units on 14 (5 032 502) (5 032 502)
November 2017
Liquidation of 600 000 units on 15 (5 017 792) (5 017 792)
November 2017
Liquidation of 600 000 units on 16 (5 010 146) (5 010 146)
November 2017
Liquidation of 600 000 units on 17 (5 000 977) (5 000 977)
November 2017
Liquidation of 711 971 units on 20 (5 929 762) (5 929 762)
November 2017
Liquidation of 700 000 units on 22 (5 849 905) (5 849 905)
November 2017
Liquidation of 300 000 units on 27 (2 504 583) (2 504 583)
November 2017
Change in net assets attributable to (48 171 004) (5 843 486) (54 014 490)
investors
Balance at 31 December 2017 329 346 707 4 430 224 333 776 931
Creation of 400 000 units on 17 3 368 314 3 368 314
October 2018
Creation of 150 000 units on 10 1 277 217 1 277 217
December 2018
Creation of 100 000 units on 21 850 789 850 789
December 2018
Liquidation of 600 000 units on 11 (4 780 397) (4 780 397)
January 2018
Liquidation of 600 000 units on 12 (4 768 723) (4 768 723)
January 2018
Liquidation of 600 000 units on 16 (4 770 383) (4 770 383)
January 2018
Liquidation of 600 000 units on 17 (4 765 288) (4 765 288)
January 2018
Liquidation of 600 000 units on 21 (4 756 744) (4 756 744)
January 2018
Liquidation of 600 000 units on 23 (4 788 157) (4 788 157)
January 2018
Liquidation of 600 000 units on 24 (4 762 606) (4 762 606)
January 2018
Liquidation of 600 000 units on 26 (4 830 976) (4 830 976)
January 2018
Liquidation of 400 000 units on 31 (3 187 872) (3 187 872)
January 2018
Liquidation of 500 000 units on 06 (3 921 431) (3 921 431)
February 2018
Liquidation of 500 000 units on 07 (3 920 924) (3 920 924)
February 2018
Liquidation of 500 000 units on 12 (3 920 522) (3 920 522)
February 2018
Liquidation of 540 250 units on 03 (4 178 811) (4 178 811)
April 2018
Liquidation of 540 250 units on 05 (4 150 684) (4 150 684)
April 2018
Liquidation of 500 000 units on 08 (3 917 524) (3 917 524)
May 2018
Liquidation of 500 000 units on 11 (3 905 745) (3 905 745)
May 2018
Liquidation of 500 000 units on 15 (3 917 555) (3 917 555)
May 2018
Liquidation of 500 000 units on 24 (3 973 511) (3 973 511)
May 2018
Liquidation of 400 000 units on 31 (3 162 596) (3 162 596)
May 2018
Liquidation of 400 000 units on 24 (3 237 635) (3 237 635)
July 2018
Liquidation of 1 178 000 units on 13 (9 690 425) (9 690 425)
August 2018
Liquidation of 400 000 units on 15 (3 210 282) (3 210 282)
August 2018
Change in net assets attributable to 12 502 314 (2 435 241) 10 067 073
investors
Balance at 31 December 2018 250 826 550 1 994 983 252 821 533
STATEMENT OF CASH FLOWS
FOR THE 12 MONTHS ENDED 31 DECEMBER 2018
12 months 15 months
2018 2017
R R
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 25 150 044 43 879 911
Distributions paid (28 602 544) (49 946 520)
Net cash outflow from operating activities (3 452 500) (6 066 609)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (22 459 429) (151 620 605)
Proceeds from sale of investments 114 819 954 79 128 529
Net cash inflow/(outflow) from investing activities 92 360 525 (72 492 076)
CASH FLOWS FROM FINANCING ACTIVITIES
Contributions received for new units created 5 586 139 131 224 973
Contributions repaid for units liquidated (97 429 792) (58 289 808)
Net cash (outflow)/inflow from financing activities (91 843 653) 72 935 165
NET DECREASE IN CASH AND CASH (2 935 628) (5 623 520)
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING 6 144 422 11 767 942
OF THE YEAR
CASH AND CASH EQUIVALENTS AT END OF THE 3 208 794 6 144 422
YEAR
ACCOUNTING POLICIES
FOR THE 12 MONTHS ENDED 31 DECEMBER 2018
The financial statements have been prepared consistently based on the following principal accounting policies
which are consistent with those applied in the previous period, except for IFRS 9:
Basis of Preparation
The financial statements are prepared on a historic cost basis, except for certain financial instruments, which are
accounted for at fair value.
The financial statements are prepared in accordance with and contain the information required by International
Financial Reporting Standards ("IFRS''), its interpretations adopted by the International Accounting Standards
Board ("IASB"), the South African Institute of Chartered Accountants Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council, the JSE Listings Requirements, the requirements of the Coreshares Index Tracker Collective
Investment Scheme Deed and the Collective Investment Schemes Control Act, 45 of 2002 ("the Act").
At the date of approval of the annual financial statements, the following new standards and amendments that
apply to the Scheme were in issue but not yet effective:
New standards and amendments to standards and interpretations not yet adopted
IFRS16 – Leases - Applicable to annual reporting periods beginning on or after 1 January 2019.
IFRS17 – Insurance contracts - Applicable to annual reporting periods beginning on or after 1 January 2021.
IFRIC 23 Uncertainty over Income Tax Treatments. Effective for annual periods beginning on or after 1 January
2019.
Prepayment Features with Negative Compensation (Amendments to IFRS 9). Effective for annual periods
beginning on or after 1 January 2019.
Annual Improvements to IFRS Standards 2015–2017 Cycle. Effective for annual periods beginning on or after 1
January 2019.
Amendments to References to the Conceptual Framework in IFRS Standards - Annual periods beginning on or
after 1 January 2020.
Definition of Material (Amendments to IAS 1 and IAS 8) - Annual reporting periods beginning on or after 1
January 2020.
The entity plans to adopt these standards when they become effective.
The Manager anticipates that the adoption of applicable standards and interpretations in future periods will have
the following impact on the financial statements of the Scheme.
IFRS16 – Leases - is not applicable to the Scheme as no items are leased.
IFRS17 – Insurance contracts - is not applicable to the Manager and the Scheme as there are no insurance
contracts.
IFRIC 23 - Uncertainty over Income Tax Treatments - is not applicable as the Scheme is not taxed.
The Manager anticipates that the adoption of amendments to existing standards in future periods will have no
material impact on the financial statements of the Scheme.
Amendments to existing standards that became effective during the period
Annual Improvements to IFRS Standards 2014–2016 Cycle. The amendments to IFRS 1 and IAS 28 are effective
for annual periods beginning on or after 1 January 2018.
The Manager has concluded that the standards and amendments adopted in the current period have had no
material impact on the financial statements of the Scheme.
The following new standards were adopted by the Scheme for the 2018 financial year:
IFRS 9 Financial Instruments (refer to 1.1 below)
IFRS 15 Revenue from Contracts with Customers (refer to 1.2 below)
Basis of Preparation (continued)
IFRS 9 Financial Instruments
"IFRS 9 replaces IAS 39 – ‘Financial Instruments' ("IAS 39") and introduces new requirements for recognition,
classification, measurement and derecognition of financial assets and financial liabilities, and the impairment of
financial assets.
The Scheme elected not to early adopt any of the provisions of IFRS 9 in previous financial reporting periods.
The classification and measurement requirements of IFRS 9 have been adopted prospectively as at the date of
initial application on 1 January 2018. The following table shows the original measurement categories in
accordance with IAS 39 and the new categories in accordance with IFRS 9:"
IAS 39 classification IFRS 9
classification Measurement changes
Financial Assets
Receivables Financial asset at
amortised cost Financial asset at amortised cost
None
Investments Designated at
FVTPL FVTPL None
Cash and cash equivalents Financial asset at
amortised cost Financial asset at amortised cost
None
Financial Liabilities
Payables Financial liability at
amortised cost Financial liability at amortised cost
None
Net assets attributable to investors
FVTPL FVTPL
None
Revenue from Contracts with Customers
The Scheme has adopted IFRS 15: ‘Revenue from Contracts with Customers' ("IFRS 15") from 1 January 2018.
The adoption of the new standard did not result in any changes to accounting policies relating to revenue
recognition.
Functional and reporting currency
The annual financial statements are presented in South African Rands which is the functional currency of the
Scheme.
Use of estimates and judgements
The preparation of financial statements in conformity with IFRS requires the use of certain critical estimates,
judgements and assumptions that affect the reported amounts. It also requires management to exercise its
judgement in the Scheme's process of applying the accounting policies. Actual results may vary from these
estimates. There are no areas involving a higher degree of judgement complexities or areas where assumptions
or estimates are significant.
Financial Instruments
Financial assets and financial liabilities are recognised in the Scheme's balance sheet when the Scheme
becomes party to the contractual provisions of the instrument. Financial assets and financial liabilities are
measured at fair value on initial recognition.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value through profit and loss ("FVTPL")) are added to or
deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are
recognised immediately in profit or loss.
Financial assets
All financial assets are recognised on the trade date, and are initially measured at fair value, plus transaction
costs, except for those financial assets classified as at FVTPL.
Financial assets at amortised cost
"Financial assets are classified and measured at amortised cost if:
• these assets are held to collect contractual cash flows; and
• the asset's contractual cash flows represent solely payments of principal and interest (""SPPI").
Financial assets included within this category are initially recognized at fair value and are subsequently measured
at amortised cost using the effective interest method."
Financial assets at FVTPL
"Financial assets classified and measured at FVTPL are:
• assets with contractual cash flows that are not SPPI; or
• assets that are held in a business model other than to collect contractual cash flows or to collect and sell.
The financial assets have been classified into the following categories:"
Investments
"Listed investments are held at FVTPL. Fair value is determined with reference to quoted market prices at the
reporting date, as published in the financial press at the reporting date. The investments are measured at fair
value, with any gains/losses arising on subsequent measurement recognised in profit or loss.
Distribution income earned on these instruments are recorded separately in the statement of profit or loss and
other comprehensive income."
Receivables
Receivables comprise of contributions receivable and distributions receivable. The receivable balance recognised
represents the fair value at initial recognition. The objective of the Scheme is to "hold to collect" contractual cash
flows, and these receivables are subsequently measured at amortised cost using the effective interest method.
Cash and cash equivalents
The objective of the Scheme is to "hold to collect" contractual cash flows. The principal amount represents the
fair value of the cash balance at initial recognition. Cash and cash equivalents are subsequently measured at
amortised cost, using the effective interest method.
Impairment of financial assets
"The Scheme holds short term receivables with no financing component, which have maturities of less than 3
months at amortised cost. The Scheme has adopted a simplified approach for expected credit losses (ECL)
under IFRS 9.
The Scheme uses the provision matrix as a practical expedient to measuring ECLs on receivables, based on
days past due for receivables with similar loss patterns. The provision matrix is based on historical observed loss
rates over the expected life of the receivables and is adjusted for forward-looking estimates."
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at FVTPL' or ‘other financial liabilities'.
Financial liabilities at FVTPL
"Financial liabilities are classified as at FVTPL when the financial liability is designated as such at initial
recognition.
Financial liabilities arising from securities issued by the Scheme are carried at fair value, representing the
investor's right to a residual interest in the Scheme's net assets, i.e. the net asset value of the Scheme. Changes
in the fair value are included in profit or loss in the period in which the change arises. "
Other financial liabilities
Other financial liabilities, including trade payables, distributions payable and securities purchases payable by the
Scheme, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method.
Revenue
Revenue comprises distribution income and interest income.
Distribution income
Distribution income in the form of cash is recognised when the right to receive payment is established.
Interest income
Interest income is recognised in profit or loss, using the effective interest method taking into account the
expected timing and amount of cash flows.
Income tax
Under the current system of taxation in South Africa, the Scheme is exempt from paying tax on income if
distributed within twelve months and exempt from paying tax on capital gains. Both income and capital gains are
taxed in the hands of investors.
Management and administration expenses
Expenses are recognised in profit or loss on the accrual basis.
Distributions
"Distributions payable on redeemable securities are recognised in profit or loss as distributions.
In accordance with the CoreShares Index Tracker Collective Investment Scheme Deed, the Scheme distributes
its distributable income and any other amounts determined by the Manager, to security investors in cash. The
distributions are payable shortly after the end of each quarter and recognised in profit or loss as distributions."
Creations and redemptions
"Investors can acquire the Scheme's securities by trading on the JSE. These purchases will be made at the
current market price of the securities plus a brokerage fee that is negotiable with the broker and any additional
transaction costs applicable to such a trade.
Investors can also acquire the Scheme's securities by subscribing for them directly from the Scheme. The cash
subscription price and number of the Scheme's securities to be issued to an investor for cash will be determined
by the amount which the investor invests (net of transaction costs) and will be a function of the pro rata cost to
the portfolio of acquiring the underlying basket of securities.
Investors subscribing for the Scheme's securities, by the delivery of one or more full baskets of constituent
securities, are obliged to deliver securities with a perfect match to the index.
Investors may sell securities by trading on the JSE, at the current market price quoted on the JSE. Investors may
also redeem securities directly with the Scheme.
Securities prices are determined by reference to the net assets of the Scheme divided by the number of
securities in issue. For unit pricing purposes, net assets are determined using the last reported trade price for
securities. These prices may differ from the market price quoted on the JSE."
Redeemable securities
All redeemable securities issued by the Scheme provide investors with the right to require redemption for cash or
in specie at the value proportionate to the investors' share. Such instruments give rise to a financial liability for
the net asset value of the redemption amount in the Scheme's net assets at redemption date. In accordance with
the CoreShares Index Tracker Collective Investment Scheme Deed and the Act, the Scheme is contractually
obliged to redeem securities at the net asset value. A redemption fee, depending on the size of the recall, would
be payable by the investor making the redemption.
Net assets attributable to security investors
Securities are redeemable at the security investor's option and are therefore classified as financial liabilities. The
securities may be sold back to the Scheme at anytime. The fair value of redeemable securities is measured at
the redemption amount that is payable (in cash and securities representing each investor's equal, undivided and
vested interest in the assets as a whole, subject to liabilities, as defined by the CoreShares Index Tracker
Collective Investment Scheme Deed) at the reporting date if security investors exercise their right to put the
securities back to the Scheme.
Increase/decrease in net assets attributable to security investors
Income not distributed is included in net assets attributable to security investors.
This preliminary report is extracted from audited information, but is not itself audited.
The Directors take full responsibility for the preparation of the preliminary report and that the financial information
has been correctly extracted from the underlying annual financial statements.
29 March 2019
Sponsor: Grindrod Bank Limited
Date: 29/03/2019 03:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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