CSEW40 201903290098A
Preliminary results for coreshares index tracker collective investment scheme ("CSEW40") as at 31 December 2018
CORESHARES INDEX TRACKER COLLECTIVE INVESTMENT SCHEME
INSTRUMENT: CORESHARES EQUAL WEIGHTED TOP 40 EXCHANGE TRADED FUND
ABBREVIATED NAME: CSEW40
SHARE CODE: CSEW40
ISIN CODE: ZAE000217139
PRELIMINARY RESULTS FOR CORESHARES INDEX TRACKER COLLECTIVE INVESTMENT
SCHEME
("CORESHARES EQUAL WEIGHTED TOP 40 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 110 083 053 162 555 753
through profit or loss
Distributions receivable 58 302 54 541
Cash and cash equivalents 1 997 494 2 247 871
TOTAL ASSETS 112 138 849 164 858 165
LIABILITIES
Net assets attributable to investors 111 067 048 163 980 032
Trade and other payables 1 071 801 878 133
TOTAL LIABILITIES 112 138 849 164 858 165
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 5 375 284 8 351 001
Interest income 62 515 406 311
Total revenue 5 437 799 8 757 312
Management and administration expenses (583 620) (1 037 425)
Income before taxation 4 854 179 7 719 887
Taxation - -
Income before distributions 4 854 179 7 719 887
Distributions paid (5 379 161) (9 168 176)
Loss after distributions (524 982) (1 448 289)
Net fair value losses on financial instruments (23 265 340) (1 089 274)
at fair value through profit or loss
Loss after net fair value losses (23 790 322) (2 537 563)
Other comprehensive income - -
Decrease in net assets attributable to (23 790 322) (2 537 563)
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 322 225 901 3 968 951 326 194 852
Creation of 31 548 units on 07 1 573 354 1 573 354
October 2016
Creation of 30 000 units on 14 1 460 000 1 460 000
October 2016
Creation of 40 000 units on 25 1 982 444 1 982 444
October 2016
Creation of 245 000 units on 15 11 575 828 11 575 828
November 2016
Creation of 40 000 units on 22 1 932 653 1 932 653
November 2016
Creation of 40 000 units on 05 1 946 775 1 946 775
January 2017
Creation of 40 000 units on 07 1 970 148 1 970 148
February 2017
Creation of 50 000 units on 15 2 500 410 2 500 410
February 2017
Creation of 35 000 units on 28 1 704 169 1 704 169
February 2017
Creation of 40 000 units on 06 1 959 733 1 959 733
March 2017
Creation of 40 000 units on 05 1 941 275 1 941 275
April 2017
Creation of 30 000 units on 25 1 476 271 1 476 271
April 2017
Creation of 50 000 units on 02 2 425 375 2 425 375
June 2017
Creation of 100 000 units on 26 4 728 286 4 728 286
June 2017
Liquidation of 60 000 units on 28 (2 872 229) (2 872 229)
November 2016
Liquidation of 150 000 units on (6 980 255) (6 980 255)
06 December 2016
Liquidation of 100 000 units on (4 666 772) (4 666 772)
08 December 2016
Liquidation of 770 000 units on (37 684 402) (37 684 402)
24 February 2017
Liquidation of 2 325 780 units on (113 423 896) (113 423 896)
28 March 2017
Liquidation of 368 722 units on (17 506 520) (17 506 520)
09 June 2017
Liquidation of 11 000 units on 15 (512 748) (512 748)
June 2017
Liquidation of 100 000 units on (4 986 714) (4 986 714)
15 August 2017
Liquidation of 100 000 units on (5 062 632) (5 062 632)
29 August 2017
Liquidation of 100 000 units on (5 157 813) (5 157 813)
01 December 2017
Change in net assets (1 089 274) (1 448 289) (2 537 563)
attributable to investors
Balance at 31 December 2017 161 459 370 2 520 662 163 980 032
Creation of 100 000 units on 04 5 177 048 5 177 048
January 2018
Creation of 35 000 units on 12 1 734 391 1 734 391
February 2018
Creation of 100 000 units on 19 5 111 468 5 111 468
February 2018
Creation of 50 000 units on 06 2 553 825 2 553 825
March 2018
Creation of 30 000 units on 04 1 418 928 1 418 928
April 2018
Creation of 50 000 units on 30 2 530 942 2 530 942
April 2018
Creation of 35 000 units on 06 1 687 106 1 687 106
June 2018
Creation of 85 000 units on 05 3 763 960 3 763 960
October 2018
Creation of 40 000 units on 08 1 757 300 1 757 300
October 2018
Creation of 45 000 units on 29 1 938 308 1 938 308
October 2018
Creation of 50 000 units on 21 2 181 561 2 181 561
December 2018
Liquidation of 157 500 units on (7 514 639) (7 514 639)
28 March 2018
Liquidation of 50 000 units on 16 (2 311 651) (2 311 651)
August 2018
Liquidation of 726 860 units on (34 091 899) (34 091 899)
22 August 2018
Liquidation of 50 000 units on 28 (2 456 505) (2 456 505)
August 2018
Liquidation of 100 000 units on (4 343 335) (4 343 335)
21 November 2018
Liquidation of 190 000 units on (8 259 471) (8 259 471)
21 November 2018
Change in net assets (23 265 340) (524 982) (23 790 322)
attributable to investors
Balance at 31 December 2018 109 071 368 1 995 680 111 067 048
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 5 044 086 8 410 020
Distributions paid (5 379 161) (9 168 176)
Net cash outflow from operating activities (335 075) (758 156)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (106 071 718) (130 301 619)
Proceeds from sale of investments 135 170 507 294 894 147
Net cash inflow from investing activities 29 098 789 164 592 528
CASH FLOWS FROM FINANCING ACTIVITIES
Contributions received for new units created 30 135 295 39 281 355
Contributions repaid for units liquidated (59 149 386) (200 077 747)
Net cash outflow from financing activities (29 014 091) (160 796 392)
NET (DECREASE)/INCREASE IN CASH AND (250 377) 3 037 980
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT 2 247 871 (790 109)
BEGINNING OF THE YEAR
CASH AND CASH EQUIVALENTS AT END OF 1 997 494 2 247 871
THE 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 IFRS 9 Measurement
classification classification changes
Financial Assets
Receivables Financial asset Financial asset None
at amortised at amortised
cost cost
Investments Designated at FVTPL None
FVTPL
Cash and cash equivalents Financial asset Financial asset None
at amortised at amortised
cost cost
Financial Liabilities
Payables Financial Financial liability None
liability at at amortised
amortised cost cost
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 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 04:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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