INTERIM RESULTS
for the six months ended 31 March 2024
Assets under management
R631 billion
Fund management earnings per share
185.8 cents
Interim dividend per share
185.0 cents
Level 1
contributor to B-BBEE
CORONATION FUND MANAGERS' INTERIM RESULTS 2024
Last year, we celebrated the noteworthy milestone of our 30th birthday, a testament to the resilience of our client-focused operating model and owner-managed culture. Our mission remains unchanged from when we first opened our doors in 1993: to deliver long-term investment outperformance for our clients. As of 31 March 2024, Coronation's Global Houseview Strategy (a Regulation 28-compliant balanced fund) has delivered a since-inception return of 15% per annum. This means that if you had invested R100 000 in October 1993, you would now have R7.2 million, compared to the R5.0 million returned by the benchmark. This is an uplift of almost 50%1 and evidence of the effective application of our single, valuation-driven investment philosophy over time.
Coronation is a focused and independent active asset manager operating in a tough global environment that has seen many firms consolidate or close their doors. Our business has grown organically from a start-up investment boutique to the custodian of R631 billion of assets that we manage on behalf of millions of South Africans and a range of high-quality international institutional investors.
Our large, stable investment team is fully integrated across global markets, and we are one of a small group of local firms that can offer clients access to a well-established offshore capability that spans developed and emerging markets across the major asset classes.
The complexities and uncertainties at play in the global operating environment continue to deepen, while in South Africa, we face a unique set of economic challenges. In the six months under review, global equity markets delivered strong returns, while SA equity market returns remained relatively anaemic. Despite these considerable headwinds, Coronation has delivered exceptional multi-decade outperformance across our fund range, with close to 95% of our portfolios2 delivering since-inception alpha to investors, while short-term performance is also highly encouraging.
For the six months under review, total assets under management (AUM) have increased by 5% to R631 billion (30 September 2023: R602 billion) and average AUM was flat at R619 billion when compared to R618 billion as at 31 March 2023.
Net outflows for the period were in line with our expectations at 4% of average AUM. This is largely due to the weak SA savings industry, to which Coronation is significantly exposed. It also reflects the experience of the broader industry, as active asset managers around the world experience persistent net outflows. We expect that the domestic savings industry will continue to contract, as South Africa struggles to kickstart economic growth, formal employment remains stagnant, and households remain under pressure, exacerbated by the ongoing externalisation of both retirement and discretionary savings. We also expect a near-term uptick in industry-wide outflows once the new two-pot retirement system comes into play. However, we believe that this reform is positive for South African savers and the local savings industry over the long term.
Total operating expenses, excluding the impact of the tax matter, are up by 5% year on year. While we manage costs meticulously, we also need to look to the future and will continue to invest in our businesses to ensure that we use our scale and expertise to amplify our ability to compete globally. Areas of consistent investment include client service systems, resources to strengthen both our local and global investment capabilities, optimising information and technology systems and data management, and ensuring high standards of compliance in a demanding global regulatory environment.
We are pleased to note that fund management earnings per share (FMEPS) were 185.8 cents as at 31 March 2024 (194.7 cents excluding the impact of the tax matter3) on the back of improved revenues and our enduring focus on expense management. The tax matter3 was heard by the Constitutional Court on 13 February 2024 and we await its judgment.
TRANSFORMATION AND DIVERSITY
Our stakeholders and clients will know that the transformation of our own business and the broader industry has been a key driver of our business from the start. We are proud of the significant contribution we have made to the transformation of our industry over the past three decades.
We have maintained our Level 1 contributor status to B-BBEE4 since 2021, and we are 31% black- owned4, with R263 billion (42% of total AUM) managed by black investment professionals. Of our SA-based employees, 64% are black and 50% are women. Key leadership positions are held by black leaders, including our CEO, CFO, COO, Global Head of Institutional Business, Head of Fixed Interest, Head of Core Equity and Head of Absolute Return.
- Since inception, Coronation Balanced Plus, the unit trust equivalent of the strategy, launched in 1996, has delivered 2.4% above CPI+5% and 1.5% above its peer group average; this is 83% and 46% more capital, respectively.
- Company-wide,asset-weighted,since-inception for funds with ≥10-year track record.
- Refer to Note 7 of the appended condensed consolidated financial statements.
- FSC scorecard.
1TRUST IS EARNED™
At Coronation, fostering a diverse and inclusive culture underpinned by excellence is not negotiable. We dedicate considerable resources to ensure that we recruit, develop and retain professionals who will help us achieve the best outcomes for our clients and stakeholders. In an industry where skills are scarce and competition is intense, a sharp focus on talent management and maintaining our strong culture of ownership (currently 29% employee-owned) is key to our continued success.
One of Coronation's considerable strengths is the stability of our team, with many of our top investment and senior operational roles occupied by long-tenured colleagues. However, we also look to the long term and the value that young minds bring to the table, which is why we pay particular attention to development and succession planning.
We do this through various in-house training and development programmes, as well as funding further education, such as CFA qualifications. This year, all the graduates in our internship programme are black and 60% are women. Over time, we have placed 52 of our interns in permanent positions at Coronation.
Extending beyond our business, we have made significant inroads in transforming the South African financial services industry. Aside from nurturing talent internally, we also award full bursaries to students from disadvantaged backgrounds who are pursuing careers in finance. Over the years we have established four black-owned financial services companies; provided financial and training support to black brokerages, independent financial advisers and analysts via partnerships with industry bodies; and supported black-owned businesses through our Preferential Procurement Policy.
As a demonstration of our commitment to gender equality in our industry, we are a signatory to the UN-supported Women's Empowerment Principles and a global corporate member of 100 Women in Finance (100WF), an organisation dedicated to advancing gender equity in the financial services industry. Our dedication to transformation and diversity initiatives has seen us place first in several prestigious local and international awards. Most recently, we won the 100WF's EMEA Diversity & Inclusion Award, which recognises organisations that are driving change and shaping the future of women in the financial services industry. As the drive to accelerate the transformation of the asset management arena gains momentum globally, we will identify ways in which we can improve representation across both race and gender.
STEWARDSHIP
We have been active stewards of our clients' capital for more than 30 years, with the goal of delivering long-term outperformance to the benefit of all of our stakeholders. While ESG and sustainability requirements have grown more complex over the last decade, we have always considered these factors and related externalities in our investment and business processes. Our ESG research and stewardship activities help us to identify and mitigate risks, ensure good governance and understand the drivers of sustainable value. Our sixth annual Stewardship Report, due to be published by June this year, will detail our active ownership activities for the calendar year 2023. It will also set out how our stewardship approach allows us to gain a holistic understanding of the underlying issues facing investee companies, how they are responding to these issues, and how we can advocate for change proactively and responsibly.
From a social impact perspective, entrepreneurship as well as primary school literacy and numeracy initiatives remain at the heart of our CSI programmes, along with a focus on providing hunger relief to schools and vulnerable communities in need.
INTERIM DIVIDEND
As per our policy, we endeavour to distribute a minimum of 75% of after-tax cash profit. After fully assessing any projected future cash requirements, an interim gross dividend of 185.0 cents per share has been declared for the six months ended 31 March 2024 from income reserves, resulting in a net dividend of 148.0 cents per share for shareholders subject to Dividends Tax.
In compliance with the Listings Requirements of the JSE Ltd, the following dates are applicable:
Declaration date: | Tuesday, 21 May 2024 |
Last day to trade cum dividend: | Tuesday, 11 June 2024 |
Trading ex-dividend commences: | Wednesday, 12 June 2024 |
Record date: | Friday, 14 June 2024 |
Payment date: | Tuesday, 18 June 2024 |
Share certificates may not be dematerialised or rematerialised between 12 June 2024 and 14 June 2024, both dates inclusive. In terms of Dividends Tax, the following additional information is disclosed: the local Dividends Tax rate is 20%. The number of ordinary shares in issue at the date of this declaration is 349 592 298. Coronation's tax reference number is 9 675 107 719.
INTERIM RESULTS 2024 | 2 |
PROSPECTS
We expect the difficult operating environment to extend into the foreseeable future. Coronation is a Top 100 JSE-listed company, a leading South African asset management firm, and a household name, positions we have worked hard to earn.
We have operated successfully through numerous cycles and remain a resilient, well-capitalised and sustainable business. We will continue to invest in our business and remain committed to the delivery of superior long-term investment returns while fulfilling our role as an active and responsible investor, employer and corporate citizen.
EXTERNAL AUDIT REVIEW
The external auditors, KPMG Inc., reviewed the condensed consolidated statement of financial position of Coronation Fund Managers Ltd as at 31 March 2024, and the related condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows, earnings per share and condensed consolidated segment report for the period then ended and the notes to the condensed consolidated interim financial statements. The review has been conducted in accordance with the International Standard on Review Engagements 2410 (ISRE 2410). The unmodified review report of KPMG Inc. is included as Annexure A of these condensed consolidated interim financial statements and is available on the JSE cloudlink as well as the Coronation website.
The auditor's review report does not necessarily report on all of the information contained in this interim results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement, they should obtain a copy of the auditor's review report together with the accompanying financial information. Any forward-looking information contained in this interim results has not been reviewed or reported on by the Company's external auditors.
Alexandra Watson | Anton Pillay | Mary-Anne Musekiwa |
Chairperson | Chief Executive Officer | Chief Financial Officer |
Cape Town | ||
21 May 2024 |
3TRUST IS EARNED™
CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
SIX MONTHS | SIX MONTHS | FULL YEAR | ||
REVIEWED | REVIEWED | AUDITED | ||
31 MARCH | 31 MARCH | 30 SEPT | ||
2024 | 2023 | % | 2023 | |
R MILLION | R MILLION | CHANGE | R MILLION | |
Fund management activities | ||||
Revenue (note 2) | 1 893 | 1 815 | 4% | 3 647 |
Other income | 22 | 29 | 76 | |
Total operating expenses | (1 076) | (1 153) | (7%) | (2 154) |
Results from operating activities | 839 | 691 | 21% | 1 569 |
Finance and dividend income | 35 | 18 | 50 | |
Finance expense | (17) | (26) | (58) | |
Profit from fund management | 857 | 683 | 26% | 1 561 |
Share of profit of equity-accounted investee | 2 | 2 | 5 | |
Sundry gains | 91 | 120 | 110 | |
Income attributable to policyholder linked assets and | ||||
investment partnerships | 9 | 11 | 13 | |
Net fair value gains on policyholder and investment | ||||
partnership financial instruments | 18 | 59 | 118 | |
Administration expenses borne by policyholders | ||||
and investors in investment partnerships | (9) | (48) | (105) | |
Profit before income tax | 959 | 816 | 18% | 1 689 |
Income tax expense | (258) | (794) | (1 049) | |
Taxation on shareholder profits (note 8) | (249) | (783) | (1 036) | |
Taxation on policyholder investment contracts | (9) | (11) | (13) | |
Profit for the period
Other comprehensive gains/(losses)
Foreign currency translation differences for foreign operations
Total comprehensive income for the period
Profits attributable to:
-
equity holders of the company
Profit for the period
Total comprehensive income attributable to:
- equity holders of the company
Total comprehensive income for the period
Earnings per share (cents)
- basic
- diluted
Headline earnings per share (cents)
- basic
- diluted
701 | 22 | 3 086% | 640 |
2 | (10) | (6) | |
2 | (10) | (6) | |
703 | 12 | 634 | |
701 | 22 | 3 086% | 640 |
701 | 22 | 640 | |
703 | 12 | 5 758% | 634 |
703 | 12 | 634 | |
200.5 | 6.2 | 3 134% | 182.9 |
200.5 | 6.2 | 3 134% | 182.9 |
200.5 | 6.2 | 3 134% | 182.9 |
200.5 | 6.2 | 3 134% | 182.9 |
INTERIM RESULTS 2024 | 4 |
CONDENSED CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
REVIEWED | REVIEWED | AUDITED |
31 MARCH | 31 MARCH | 30 SEPT |
2024 | 2023 | 2023 |
R MILLION | R MILLION | R MILLION |
Assets Intangible assets Equipment Right-of-use assets
Investment in equity-accounted investees Deferred tax assets
Investments backing policyholder funds and investments held through investment partnerships
Investment securities Taxation receivable Trade and other receivables Cash and cash equivalents
Total assets
Liabilities
Long-term borrowings (note 4) Long-term other payables Lease liabilities
Deferred tax liabilities
Policyholder investment contract liabilities and liabilities to holders of interests in investment partnerships
External investors in consolidated funds (note 6) Tax payable (note 7)
Trade and other payables
Total liabilities
Net assets
Equity
Share capital and premium
Retained earnings
Reserves
Total equity
1 088 | 1 088 | 1 088 |
19 | 26 | 26 |
53 | 71 | 58 |
38 | 38 | 41 |
92 | 70 | 175 |
64 315 | 60 359 | 61 483 |
959 | 754 | 639 |
- | 4 | - |
657 | 690 | 686 |
876 | 320 | 1 141 |
68 097 | 63 420 | 65 337 |
533 | 478 | 535 |
57 | 40 | 29 |
77 | 107 | 88 |
- | - | 41 |
64 294 | 60 346 | 61 469 |
218 | - | - |
156 | 351 | 433 |
561 | 649 | 669 |
65 896 | 61 971 | 63 264 |
2 201 | 1 449 | 2 073 |
256 | 256 | 256 |
1 792 | 1 050 | 1 668 |
153 | 143 | 149 |
2 201 | 1 449 | 2 073 |
5TRUST IS EARNED™
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
SHARE | FOREIGN | SHARE- | |||
CAPITAL | CURRENCY | BASED | |||
AND | TRANSLATION | RETAINED | PAYMENT | TOTAL | |
PREMIUM | RESERVE | EARNINGS | RESERVE | EQUITY | |
R MILLION | R MILLION | R MILLION | R MILLION | R MILLION | |
Balance at 30 September 2022 (audited) | 256 | 141 | 1 630 | 12 | 2 039 |
Total comprehensive income for the period | |||||
Profit for the period | 22 | 22 | |||
Other comprehensive losses | |||||
Currency translation differences | (10) | (10) | |||
Total comprehensive income for the period | (10) | 22 | 12 | ||
Transactions with owners recorded directly to equity | |||||
Share-based payments | |||||
Dividends paid | (602) | (602) | |||
Total transactions with owners | (602) | (602) | |||
Balance as at 31 March 2023 (reviewed) | 256 | 131 | 1 050 | 12 | 1 449 |
Total comprehensive income for the period | |||||
Profit for the period | 618 | 618 | |||
Other comprehensive income | |||||
Currency translation differences | 4 | 4 | |||
Total comprehensive income for the period | 4 | 618 | 622 | ||
Transactions with owners recorded directly to equity | |||||
Share-based payments | 2 | 2 | |||
Dividends paid | |||||
Total transactions with owners | 2 | 2 | |||
Balance at 30 September 2023 (audited) | 256 | 135 | 1 668 | 14 | 2 073 |
Total comprehensive income for the period | |||||
Profit for the period | 701 | 701 | |||
Other comprehensive income | |||||
Currency translation differences | 3 | 3 | |||
Total comprehensive income for the period | 3 | 701 | 704 | ||
Transactions with owners recorded directly to equity | |||||
Share-based payments | 1 | 1 | |||
Dividends paid | (577) | (577) | |||
Total transactions with owners | (577) | 1 | (576) | ||
Balance at 31 March 2024 (reviewed) | 256 | 138 | 1 792 | 15 | 2 201 |
INTERIM RESULTS 2024 | 6 |
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS
SIX MONTHS | SIX MONTHS | FULL YEAR | |
REVIEWED | REVIEWED | AUDITED | |
31 MARCH | 31 MARCH | 30 SEPT | |
2024 | 2023 | 2023 | |
R MILLION | R MILLION | R MILLION | |
Cash flows from operating activities | |||
Profit from fund management | 857 | 683 | 1 561 |
Non-cash and other adjustments | 6 | 200 | 2 |
Operating profit before changes in working capital | 863 | 883 | 1 563 |
Working capital changes | (52) | (365) | (175) |
Decrease/(increase) in trade and other receivables | 28 | (4) | (10) |
Decrease in trade and other payables | (80) | (361) | (165) |
Cash flows generated from/(utilised in) policyholders and investment | |||
partnership activities* | 1 139 | 704 | (21) |
Cash generated from operations | 1 950 | 1 222 | 1 367 |
Interest on lease liabilities paid | (3) | (4) | (7) |
Interest paid | (17) | (20) | (36) |
Tax paid | (497) | (283) | (512) |
Net cash generated from operating activities | 1 433 | 915 | 812 |
Cash flows from investing activities | |||
Finance and dividend income | 32 | 18 | 43 |
Acquisition of equipment | - | (18) | (25) |
Net (purchase)/disposal of investment securities | (3) | 72 | 210 |
Net cash from investing activities | 29 | 72 | 228 |
Cash flows from financing activities | |||
Dividends paid | (577) | (602) | (602) |
Proceeds from long term borrowings | - | - | 46 |
Lease liabilities paid | (11) | (7) | (14) |
Repayment of long term liabilities | (2) | - | - |
Net cash utilised in financing activities | (590) | (609) | (570) |
Increase in cash and cash equivalents | 872 | 378 | 470 |
Net (decrease)/ increase in cash and cash equivalents - shareholders | (267) | (326) | 491 |
Net increase/(decrease) in cash and cash equivalents - policyholders and | |||
investment partnerships* | 1 139 | 704 | (21) |
Cash and cash equivalents at beginning of period | 6 924 | 6 460 | 6 460 |
Cash and cash equivalents at beginning of period - shareholders | 1 141 | 656 | 656 |
Cash and cash equivalents at beginning of period - policyholders | |||
and investment partnerships* | 5 783 | 5 804 | 5 804 |
Effect of exchange rate fluctuations on cash held | 2 | (10) | (6) |
Cash and cash equivalents at end of period | 7 798 | 6 828 | 6 924 |
Cash and cash equivalents at end of period - shareholders | 876 | 320 | 1 141 |
Cash and cash equivalents at end of period - policyholders | |||
and investment partnerships* | 6 922 | 6 508 | 5 783 |
- The above cash flows include the policyholder and investment partnership activities. These cash flows represent net contributions and withdrawals by policyholders and investment partnerships and the related investing activities. Cash and cash equivalents of policyholders and investment partnerships are not available for use by the shareholders of the Group.
7TRUST IS EARNED™
EARNINGS PER SHARE
SIX MONTHS | SIX MONTHS | FULL YEAR | |
REVIEWED | REVIEWED | AUDITED | |
31 MARCH | 31 MARCH | 30 SEPT | |
2024 | 2023 | 2023 | |
R MILLION | R MILLION | R MILLION | |
Earnings attributable to shareholders | 701 | 22 | 640 |
Headline earnings attributable to shareholders | 701 | 22 | 640 |
Earnings per share (cents) | 182.9 | ||
- basic | 200.5 | 6.2 | |
- diluted | 200.5 | 6.2 | 182.9 |
Headline earnings per share (cents) | 182.9 | ||
- basic | 200.5 | 6.2 | |
- diluted | 200.5 | 6.2 | 182.9 |
Dividend per share (cents) | |||
- interim | 185.0 | - | - |
- final | 165.0 |
CONDENSED CONSOLIDATED SEGMENT REPORT
AFRICA | ||
SIX MONTHS | SIX MONTHS | FULL YEAR |
REVIEWED | REVIEWED | AUDITED |
31 MARCH | 31 MARCH | 30 SEPT |
2024 | 2023 | 2023 |
R MILLION | R MILLION | R MILLION |
INTERNATIONAL | ||
SIX MONTHS | SIX MONTHS | FULL YEAR |
REVIEWED | REVIEWED | AUDITED |
31 MARCH | 31 MARCH | 30 SEPT |
2024 | 2023 | 2023 |
R MILLION | R MILLION | R MILLION |
GROUP | ||
SIX MONTHS | SIX MONTHS | FULL YEAR |
REVIEWED | REVIEWED | AUDITED |
31 MARCH | 31 MARCH | 30 SEPT |
2024 | 2023 | 2023 |
R MILLION | R MILLION | R MILLION |
Segment external | ||||||||||
revenue | 1 328 | 1 308 | 2 568 | 565 | 507 | 1 079 | 1 893 | 1 815 | 3 647 | |
Segment operating | ||||||||||
expenses | (787) | (823) | (1 559) | (289) | (330) | (595) | (1 076) | (1 153) | (2 154) | |
Segment profit | 541 | 485 | 1 009 | 276 | 177 | 484 | 817 | 662 | 1 493 | |
Net finance and other | ||||||||||
income/(expenses) | 39 | (57) | 127 | 1 | 78 | (59) | 40 | 21 | 68 | |
Profit from fund | ||||||||||
management | 580 | 428 | 1 136 | 277 | 255 | 425 | 857 | 683 | 1 561 | |
Share of income of | ||||||||||
equity-accounted | ||||||||||
investee | 2 | 2 | 5 | - | - | - | 2 | 2 | 5 | |
Sundry gains | 91 | 120 | 110 | |||||||
Income attributable | ||||||||||
to policyholder linked | ||||||||||
assets and investment | ||||||||||
partnerships | 9 | 11 | 13 | |||||||
Profit before | ||||||||||
income tax | 959 | 816 | 1 689 | |||||||
Segment assets | 1 577 | 1 038 | 1 426 | 987 | 823 | 1 124 | 2 564 | 1 861 | 2 550 | |
Investments and | ||||||||||
other assets* | 65 533 | 61 559 | 62 787 | |||||||
Total assets | 68 097 | 63 420 | 65 337 | |||||||
Segment liabilities | 1 049 | 826 | 984 | 553 | 799 | 770 | 1 602 | 1 625 | 1 754 | |
Investor liabilities** | 64 294 | 60 346 | 61 510 | |||||||
Total liabilities | 65 896 | 61 971 | 63 264 |
Total tax on shareholder profits amounts to R249 million (31 March 2023: R783 million; 30 September 2023: R1 036 million). Tax on policyholder investment
contracts amounts to R9 million (31 March 2023: R11 million; 30 September 2023: R13 million).
-
Investments are attributable to investments backing policyholder funds and investments held through investment partnerships (31 March 2024: R64 315 million;
31 March 2023: R60 359 million and 30 September 2023: R61 483 million), consolidated funds and other assets. - Investor liabilities include policyholder investment contract liabilities and liabilities to holders of interest in investment partnerships and external investors in consolidated funds.
INTERIM RESULTS 2024 | 8 |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated interim financial statements have been prepared in accordance with the International Accounting Standard 34 Interim Financial Reporting (IAS 34); the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council (the Listings Requirements of the JSE Ltd); as well as the South African Companies Act, No. 71 of 2008 (as amended). The condensed consolidated interim financial statements do not include all of the information required for a complete set of IFRS® Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards) annual financial statements.
These condensed consolidated interim financial statements have been prepared in accordance with the historical cost basis except for certain financial instruments which are stated at fair value. The condensed consolidated interim financial statements are presented in South African Rand (R), rounded to the nearest million.
The preparation of the condensed consolidated interim financial statements, in conformity with IAS 34, requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key areas in which judgement and estimation uncertainty is applied include:
The valuation of unlisted investments is a notable area of judgement applied in the preparation of these condensed consolidated interim financial statements. It is the opinion of the directors that fair value approximates carrying amount;
Valuation of the share-based payment expense where inputs are based on observable market inputs, adjusted for factors that specifically apply to the transaction and recognise market volatility;
Assessing whether the Group controls an investee by assessing the power over the investee, exposure or rights, to variable returns from its involvement with its investee and the ability to use its power over the investee to affect the amount of the Group's returns; and
assessing the impact of the Supreme Court of Appeal (SCA) judgment in favour of SARS, in relation to SARS vs Coronation Investment Management SA (Pty) Ltd (CIMSA) tax matter, management has determined that the SCA judgment is an obligating event. The related taxation payable recognised is management's best estimate of the obligation as at 31 March 2024. IFRS Accounting Standards do not specifically address the accounting treatment for interest and penalties related to income taxes. The International Financial Reporting Standards Interpretations Committee (IFRIC) discussed the accounting for interest and penalties and concluded that a reporting entity should apply and disclose its judgement in assessing whether interest or penalties are themselves income tax. An entity must assess the facts of the particular matter to determine whether the entity has made a financing decision (intentional or due to an oversight) or whether a significant tax uncertainty exists and as such the total obligation is as a result of the tax uncertainty. Where the entity has a dispute with the tax authorities and there is significant uncertainty regarding the amount of income tax to be paid, further consideration is required. There was a significant uncertainty regarding CIMSA taxes due as a result of this dispute, due to a difference of opinion on tax treatment (interpretation of the provisions of s9D) between CIMSA and SARS. There was no delay in the payment of any taxes due (as calculated in terms of guidance provided by expert advice and CIMSA's interpretation of the law) as a result of a conscious decision to delay payment nor any administrative oversight. As a result, any interest charged due to this significant uncertainty in tax treatment should be accounted for as an operating expense. In addition, should the Group be liable for any penalties these will be accounted for as an operating expense as well.
The accounting policies applied in the presentation of the condensed consolidated financial statements are consistent with those presented in the 2023 annual financial statements. These reviewed results have been prepared under the supervision of N Salie CA(SA).
2 REVENUE FROM CONTRACTS WITH CUSTOMERS
SIX MONTHS | SIX MONTHS | ||
REVIEWED | REVIEWED | AUDITED | |
31 MARCH | 31 MARCH | 30 SEPT | |
2024 | 2023 | 2023 | |
R MILLION | R MILLION | R MILLION | |
Management fees | 1 678 | 1 660 | 3 353 |
Performance fees | 215 | 155 | 294 |
1 893 | 1 815 | 3 647 |
Revenue from contracts with customers comprises fees earned in respect of fund management activities.
Refer to the condensed consolidated segment report for disaggregation of revenue based on the geographical split of revenue earned.
All revenue from contracts with customers is earned over time.
9TRUST IS EARNED™
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Coronation Fund Managers Limited published this content on 21 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 May 2024 05:34:07 UTC.