CORONATION FUND MANAGERS LIMITED - Interim Results for the six months ended 31 March 2018

Release Date: 22/05/2018 07:05
Code(s): CML
 
Wrap Text
Interim Results for the six months ended 31 March 2018

CORONATION FUND MANAGERS
(Incorporated in the Republic of South Africa)
Registration number: 1973/009318/06
JSE share code: CML
ISIN: ZAE000047353
("Coronation" or "the company")

INTERIM RESULTS
for the six months ended 31 March 2018

- ASSETS UNDER MANAGEMENT (AUM) OF R588 BILLION

- DILUTED HEADLINE EARNINGS PER SHARE OF 223.4 CENTS

- INTERIM DIVIDEND PER SHARE OF 223.0 CENTS

As we mark our 25th year of providing investment excellence to clients, Coronation has delivered results in line with management expectations.

For the six months ended March 2018, local equity markets were flat. The FTSE/JSE All Share Index produced 1.0%, while the MSCI All Country World Index declined 8.6%
(both in rand terms). However, local fixed interest markets continued to perform exceptionally well, with the All Bond Index delivering 10.5%. The local currency
strengthened by 14.6% against the US dollar over the period to close at R11.82.

Against this backdrop, our fixed interest mandates continued to deliver excellent performance over all time periods, while the near-term returns of our equity and
multi-asset class portfolios have been average. We believe that current market conditions present compelling opportunity for stock pickers like ourselves, and we have
looked to take advantage of this in our specialist equity and multi-asset class products. We expect our positioning to have a positive impact on the long-term performance
generated by these portfolios.

RESULTS

While our total AUM declined by 4.2% to R588 billion at the end of March 2018 (September 2017: R614 billion), our average AUM increased by 6.0% for the six months in
relation to average AUM in the prior comparable period. Together with improved investment performance during 2017, this contributed to an increase in revenue of 7.4%
to R2.1 billion (March 2017: R1.9 billion). Total operating expenses increased by 6.8%, excluding unrealised losses for investments held as seed capital. While our fixed
costs have increased as a result of the implementation of key initiatives, variable costs declined in line with the variable cost model. The combined effect of these
factors was an increase of 1.2% in diluted and basic headline earnings per share for the period to 223.4 cents (March 2017: 220.7 cents).

BUSINESS UPDATE

We are an independent active manager with a valuation-driven investment philosophy. The key driver of our success is our ability to create long-term value on behalf of
our clients. Since our inception in 1993, we have built a track record of producing significant market-beating returns over meaningful time periods - an achievement
very few fund managers can lay claim to. Of the institutional and retail assets that have been invested with us for at least 10 years, 99%* have outperformed their
respective benchmarks since inception.

We continue to make substantial investments in our business through various initiatives aimed at entrenching world-class service delivery to our local and growing 
offshore business. These initiatives include launching a new fund administration model that consolidates our service across local and offshore portfolios as well as
insourcing retail client reporting and communication. In addition, we are moving our unit trust transfer agency administration to a newly-created, 
100% black-owned business - once again demonstrating our commitment to making a real contribution to empowering black South Africans. These initiatives are on track 
for completion before the end of this year. 

* Asset-weighted portfolios

INSTITUTIONAL BUSINESS

Our institutional business manages R355 billion (September 2017: R376 billion) on behalf of South African and a growing number of global clients.

South African clients

We continue to manage a meaningful share of assets in the local pension funds industry, representing total AUM of R295 billion (September 2017: R305 billion).
Our local institutional portfolios recorded net outflows of R11.1 billion over the six months, compared to R43.7 billion recorded for the year ended September 2017.
While we are encouraged by the sharp slowdown in net outflows, the local pension funds industry continues to see structural net outflows, given anaemic employment
numbers and retrenchments in the formal employment sector. We therefore expect small levels of net outflows from this area of our business to be an ongoing feature in
the years ahead.

Our decision to reopen our top performing South African equity and multi-asset portfolios to new investors has been very well received by the market. While it is too
soon to see meaningful flows following the reopening of these strategies a year ago, we are cautiously optimistic about the engagements taking place.

Within our South African specialist equity strategies:

- Coronation Houseview Equity has produced a return of 17.1% p.a. since its inception in October 1993, thereby delivering an active return (alpha) of 2.5% p.a.

Within our market-leading multi-asset strategies:

- Coronation Global Houseview has delivered 16.1% p.a. since its launch in October 1993, thereby representing a real return of  10.0% p.a., while Coronation Managed has
  produced 16.4% p.a. since its launch in May 1996, representing a real return of 10.5% p.a.

Within our South African specialist fixed income strategies:

- Coronation Strategic Bond has produced a return of 10.7% p.a. since its inception in January 2008, thereby outperforming the All Bond Index by 1.5% p.a., while
  Coronation Active Bond has produced a return of 11.9% p.a. since its launch in July 2000, representing alpha of 1.0% p.a.

Global clients

We manage a combined total of R60 billion (September 2017: R71 billion) in our global strategies on behalf of several leading international retirement funds,
endowments and family offices. The strength of the local currency over the six months has had a significant negative impact on the AUM in rand terms. In dollar terms,
AUM has remained flat relative to end-September 2017. We continue to focus on building relationships with global asset allocators to ensure that potential investors
have access to our comprehensive range of products.

While an increase in volatility and geopolitical risk weighed on global market returns over the six months, we remain confident about the long-term outlook for our
global strategies. Our track record in active management and asset allocation is best illustrated in the long-term value created for clients by our specialist equity
and multi-asset strategies:

- Coronation Global Emerging Markets Equity has produced a return of 8.1% p.a. (in US dollars) since its inception in  July 2008, delivering alpha of 4.2% p.a.,
  which places it in the top quartile of its peer group globally.

- Coronation Africa Frontiers has delivered an absolute return of 11.2% p.a. (in US dollars) since its launch in October 2008, placing it in the top quartile of
  its peer group globally.

- Coronation Global Managed has delivered a return of 8.6% p.a. (in US dollars) since its inception in November 2009, representing a real return of 6.9% p.a.

All institutional performance returns are stated gross of fees.

RETAIL BUSINESS

We remain one of the country's foremost managers of long-term assets in the collective investment schemes industry, with retail assets totalling R233 billion
(September 2017: R238 billion). Savings levels continued to be impacted by weak economic conditions over the period, contributing to subdued net inflows at an industry
level. Against this backdrop, we experienced net outflows of R1.4 billion for the six months compared to R6.9 billion for the 12 months ended September 2017.

Performance highlights across our domestic and international fund range are detailed below, reflecting consistent first-quartile rankings in their corresponding
Morningstar categories since their respective inception dates:

- Coronation Top 20, a top performing general equity fund, has outperformed its benchmark by 4.1% p.a. since its inception in  October 2000, and by 3.5% p.a. over the
  past 10 years.

- Coronation Balanced Plus, the no. 1 balanced fund in South Africa since its launch in April 1996, has outperformed its average competitor by 2.4% p.a. and inflation by
  8.4% p.a. over this same period.

- Coronation Capital Plus, the no. 1 multi-asset medium equity fund since its inception in July 2001, has delivered a real return of  6.3% p.a. over this same period.

- Coronation Balanced Defensive, a top performing conservative fund, has produced a real return of 3.5% p.a. since its launch in February 2007.

- Coronation Strategic Income, the no. 1 multi-asset income fund since its launch in July 2001, has outperformed cash by, on average, 2.6% p.a. over this same period.

- Coronation Global Opportunities Equity [ZAR] Feeder, a top performing global equity general fund since its launch  in August 1997, has outperformed the global equity
  market by 1.0% p.a. over its more than 20-year history.

- Coronation Global Managed [ZAR] Feeder, the no. 1 global multi-asset high-equity fund in South Africa since its launch in  October 2009, has outperformed its average
  competitor by 1.1% p.a. over this same period.

All performance returns are stated net of fees for the respective retail classes.

CORPORATE CITIZENSHIP

As a proudly South African company, we are determined to ensure that our actions deliver sustainable and meaningful results. For the past quarter of a century, we
have been active participants in advancing economic transformation in our industry as well as the communities in which we operate.

We continue to focus on substantively transforming our business to reflect our country's diversity. Our focus has delivered tangible results in that 56% of our
employees are black, of which almost 60% are black females. In addition, 43% of senior portfolio managers within the South African-focused investment team are black,
while three out of the four key investment leadership roles are held by black employees.

Since our inception, we have continually demonstrated our desire to support the establishment of new businesses and specifically black-owned businesses.
We continue to commit a minimum of 10% of our annual South African brokerage to emerging black stockbrokers, a programme launched 11 years ago. In 2017, we supported
the establishment of an independent, 100% black-owned investment administrator.

We continue to empower the young people of South Africa with opportunities to access education and participate in the economy. We fund several full higher education
bursaries for study at any South African university. Students are supported by trained tutors, mentored by Coronation employees and have access to work experience
opportunities at our head office. Our successful workplace experience internship programme will be supplemented by our participation in the CEO Initiative's Youth
Employment Services programme.

INTERIM CASH DIVIDEND

We continue to reward shareholders through regular and significant distributions of free cash flow generated. We endeavour to distribute at least 75% of after-tax cash
profit. After assessing any projected future cash requirements, a gross dividend of 223.0 cents per share has been declared for the interim period ended 31 March 2018,
resulting in a net dividend of 178.4 cents per share for shareholders subject to Dividends Tax (DT).

In compliance with the Listings Requirements of the JSE Ltd, the following dates are applicable:

Last day to trade                                                           Tuesday, 5 June 2018
Shares trade ex dividend                                                  Wednesday, 6 June 2018
Record date                                                                  Friday, 8 June 2018
Payment date                                                                Monday, 11 June 2018

Share certificates may not be dematerialised or rematerialised between Wednesday, 6 June 2018 and Friday, 8 June 2018, both  dates inclusive.

In terms of DT, the following additional information is disclosed:

- The local DT rate is 20%.

- The number of ordinary shares in issue at the date of this declaration is 349 799 102.

- Coronation's tax reference number is 9 675 107 719.

PROSPECTS

We are optimistic about the outlook for the South African economy following meaningful changes in the political leadership and certain key institutions. While we
expect economic growth to improve, we remain mindful that this may take time. Addressing the country's long-term challenges will require hard work and patience.

As long-term valuation-driven investors, we are presented with significant opportunities in local and global markets and we expect our current positioning to have a
positive impact on the long-term performance of our various strategies.

In pursuing our goal of providing world-class service to our clients, we continue to strengthen our business by investing in infrastructure, technology and people,
thereby ensuring the delivery of sustainable long-term value for all stakeholders.

EXTERNAL AUDIT REVIEW

The external auditors, EY, reviewed the condensed consolidated statement of financial position of Coronation Fund Managers Ltd Group as at 31 March 2018, and the
related condensed consolidated statement of comprehensive income, changes in equity and cash flows for the period then ended, and other explanatory notes. The review
has been conducted in accordance with the International Standard on Review Engagements 2410. Copies of the unqualified report of EY are available for inspection at the
registered office of the company. Any forward-looking information contained in this announcement has not been reviewed or reported on by the company's external
auditors.

Shams Pather    Anton Pillay                  John Snalam
Chairman        Chief executive officer       Chief financial officer

Cape Town
22 May 2018

CONDENSED CONSOLIDATED STATEMENT  OF COMPREHENSIVE INCOME
                                                                                                                    SIX MONTHS  SIX MONTHS       %  FULL YEAR
                                                                                                                      REVIEWED    REVIEWED            AUDITED
                                                                                                                      31 MARCH    31 MARCH            30 SEPT
                                                                                                                          2018        2017               2017
                                                                                                                     R MILLION   R MILLION   CHANGE R MILLION
Fund management activities
Revenue                                                                                                                  2 079       1 936      7%      3 919

Other income                                                                                                                 1           1                  6

Total operating expenses*                                                                                               (1 055)       (933)            (1 934)

Other expenses*                                                                                                            (68)         (9)                (6)
Operating expenses*                                                                                                       (987)       (924)     7%     (1 928)

Results from operating activities                                                                                        1 025       1 004      2%      1 991
Finance and dividend income                                                                                                 17          16                 37
Finance expense                                                                                                            (13)        (13)               (23)

Share of profit of equity-accounted investee                                                                                 5           5                  8
Profit from fund management                                                                                              1 034       1 012      2%      2 013

Income attributable to policyholder linked assets and investment partnerships                                                -           3                  2

Net fair value gains on policyholder and investment  partnership financial instruments                                      13          17                 45
Administration expenses borne by policyholders and investors in investment partnerships                                    (13)        (14)               (43)

Profit before income tax                                                                                                 1 034       1 015      2%      2 015

Income tax expense                                                                                                        (252)       (252)              (492)

Taxation on shareholder profits                                                                                           (252)       (249)              (490)
Taxation on policyholder investment contracts                                                                                -          (3)                (2)

Profit for the period                                                                                                      782         763      2%      1 523

Other comprehensive income (to be reclassified to profit and loss in future periods)

Foreign currency translation differences for foreign operations                                                            (19)        (20)               (24)
Net change in fair value of available-for-sale financial assets                                                              4          36                 91
            
Other comprehensive income for the period                                                                                  (15)         16                 67
Total comprehensive income for the period                                                                                  767         779              1 590

Profit attributable to:
- equity holders of the company                                                                                            782         763      2%      1 523
Profit for the period                                                                                                      782         763              1 523

Total comprehensive income attributable to:
- equity holders of the company                                                                                            767         779     (2%)     1 590
Total comprehensive income for the period                                                                                  767         779              1 590

Earnings per share (cents)
- basic                                                                                                                  223.4       218.5      2%      435.4
- diluted                                                                                                                223.4       218.5      2%      435.4

Note to the statement of comprehensive income
Headline earnings per share (cents)
- basic                                                                                                                  223.4       220.7      1%      437.5
- diluted                                                                                                                223.4       220.7      1%      437.5

Dividend per share (cents)
- interim                                                                                                                223.0       220.0      1%      220.0
- final                                                                                                                                                 217.0

* The following changes have been made to the presentation of operating expenses in order to more appropriately describe the nature of such expenses. Other
  expenses now includes foreign exchange losses as well as share based payment expenses. Previously the share based payment expense was separately disclosed as Shared
  based payment expense. Foreign exchange losses, which were previously disclosed under Operating expenses, have been transferred to Other expenses in the current
  period. Comparatives have accordingly been re-presented, resulting in the transfer of a R6million foreign exchange loss from Operating expenses to Other expenses for
  the 6 month period ended 31 March 2017 (30 September 2017: nil).

CONDENSED CONSOLIDATED STATEMENT  OF FINANCIAL POSITION
                                                                                                                              REVIEWED    REVIEWED    AUDITED
                                                                                                                              31 MARCH    31 MARCH    30 SEPT
                                                                                                                                  2018        2017       2017
                                                                                                                            R MILLION   R MILLION   R MILLION
Assets
Intangible assets                                                                                                                1 088       1 088      1 088
Equipment                                                                                                                           17          22         21
Investment in equity-accounted investees                                                                                            38          36         39
Deferred tax asset                                                                                                                 122         144        171
Investments backing policyholder funds and investments held through investment partnerships                                     54 504      59 848     55 721
Investment securities                                                                                                              862         834        934
Trade and other receivables                                                                                                        466         530        558
Cash and cash equivalents                                                                                                          553         524        564
Total assets                                                                                                                    57 650      63 026     59 096

Liabilities
Long-term borrowings (note 3)                                                                                                      300         300        150
Deferred tax liabilities                                                                                                            10          23         24
Policyholder investment contract liabilities and liabilities to holders of interests in investment partnerships                 54 503      59 832     55 718
Short-term portion of long-term borrowings (note 3)                                                                                  -           -        150
Taxation payable                                                                                                                     9          82         35
Trade and other payables                                                                                                           560         587        747
Total liabilities                                                                                                               55 382      60 824     56 824

Net assets                                                                                                                       2 268       2 202      2 272

Equity
Share capital and premium                                                                                                          256         256        256
Retained earnings                                                                                                                1 630       1 587      1 607
Reserves                                                                                                                           229         219        243
Total equity attributable to equity holders of the company                                                                       2 115       2 062      2 106
Non-controlling interest in consolidated funds                                                                                     153         140        166
Total equity                                                                                                                     2 268       2 202      2 272

CONDENSED CONSOLIDATED STATEMENT  OF CASH FLOWS
                                                                                                                            SIX MONTHS  SIX MONTHS  FULL YEAR
                                                                                                                              REVIEWED    REVIEWED    AUDITED
                                                                                                                              31 MARCH    31 MARCH    30 SEPT
                                                                                                                                  2018        2017       2017
                                                                                                                             R MILLION   R MILLION  R MILLION
Cash flows from operating activities
Profit from fund management                                                                                                      1 034       1 012      2 013
Non-cash and other adjustments                                                                                                      74          27         15

Operating cash flows before changes in working capital                                                                           1 108       1 039      2 028
Working capital changes                                                                                                           (162)       (145)        (5)
Cash flows from policyholders and investment partnership activities                                                               (993)       (391)      (977)

Cash (utilised by)/generated from operations                                                                                       (47)        503      1 046
Interest paid                                                                                                                      (13)        (13)       (23)
Income taxes paid                                                                                                                 (240)       (152)      (454)
Net cash from operating activities                                                                                                (300)        338        569

Cash flows from investing activities
Finance and dividend income                                                                                                         17          16         37
Acquisition of equipment                                                                                                            (4)         (2)       (10)
Net sales of investment securities                                                                                                  61          25          9
Net cash from investing activities                                                                                                  74          39         36

Cash flows from financing activities
Dividends paid                                                                                                                    (759)       (762)    (1 532)
Net cash from financing activities                                                                                                (759)       (762)    (1 532)

Decrease in cash and cash equivalents                                                                                             (985)       (385)      (927)
Net increase in cash and cash equivalents - shareholders                                                                             8           6         50
Net decrease in cash and cash equivalents - policyholders  and investment partnerships                                            (993)       (391)      (977)

Cash and cash equivalents at beginning of period                                                                                 8 259       9 210      9 210
Cash and cash equivalents at beginning of period - shareholders                                                                    564         538        538
Cash and cash equivalents at beginning of period - policyholders  and investment partnerships                                    7 695       8 672      8 672

Effect of exchange rate fluctuations on cash held                                                                                  (19)        (20)       (24)

Cash and cash equivalents at end of period                                                                                       7 255       8 805      8 259
Cash and cash equivalents at end of period - shareholders                                                                          553         524        564
Cash and cash equivalents at end of period - policyholders and investment partnerships                                           6 702       8 281      7 695

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.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                                                               ISSUED
                                                                                                                          CAPITAL AND
                                                                                                                             RESERVES
                                                                                                                         ATRRIBUTABLE
                                                                SHARE      FOREIGN                  SHARE-                  TO EQUITY                                 
                                                              CAPITAL     CURRENCY                   BASED                    HOLDERS         NON-
                                                                  AND  TRANSLATION     RETAINED    PAYMENT  REVALUATION        OF THE  CONTROLLING      TOTAL
                                                              PREMIUM      RESERVE     EARNINGS    RESERVE      RESERVE       COMPANY     INTEREST     EQUITY 
                                                            R MILLION    R MILLION    R MILLION  R MILLION    R MILLION     R MILLION    R MILLION  R MILLION
Balance at 30 September 2016 (audited)                            256          155        1 586         29           16         2 042          136      2 178

Total comprehensive income for the period
Profit for the period                                                                       763                                   763                     763
Other comprehensive income
Currency translation differences                                               (20)                                               (20)                    (20)
Revaluation of available-for-sale financial assets                                                                   36            36                      36
Total other comprehensive income                                               (20)                                  36            16                      16
Total comprehensive income for the period                                      (20)         763                      36           779                     779

Transactions with owners recorded directly to equity
Share-based payments                                                                                     3                          3                       3
Dividends paid                                                                             (762)                                 (762)                   (762)
Change in non-controlling interest in consolidated funds                                                                                         4          4
Total transactions with owners                                                             (762)         3                       (759)           4       (755)
Balance at 31 March 2017 (reviewed)                               256          135        1 587         32           52         2 062          140      2 202
Total comprehensive income for the period
Profit for the period                                                                       760                                   760                     760
Other comprehensive income
Currency translation differences                                                (4)                                                (4)                     (4)
Revaluation of available-for-sale financial assets                                                                   55            55                      55
Total other comprehensive income                                                (4)                                  55            51                      51
Total comprehensive income for the period                                       (4)         760                      55           811                     811

Transactions with owners recorded directly to equity
Share-based payments                                                                                     3                          3                       3
Transfer to retained earnings                                                                30        (30)
Dividends paid                                                                             (770)                                 (770)                   (770)
Change in non-controlling interest in consolidated funds                                                                                        26         26
Total transactions with owners                                                             (740)       (27)                      (767)          26       (741)
Balance at 30 September 2017 (audited)                            256          131        1 607          5          107         2 106          166      2 272

Total comprehensive income for the period
Profit for the period                                                                       782                                   782                     782
Other comprehensive income
Currency translation differences                                               (19)                                               (19)                    (19)
Revaluation of available-for-sale financial assets                                                                    4             4                       4
Total other comprehensive income                                               (19)                                   4           (15)                    (15)
Total comprehensive income for the period                                      (19)         782                       4           767                     767

Transactions with owners recorded directly to equity
Share-based payments                                                                                     1                          1                       1
Dividends paid                                                                             (759)                                 (759)                   (759)
Change in non-controlling interest in consolidated funds                                                                                       (13)       (13)
Total transactions with owners                                                             (759)         1                       (758)         (13)      (771)
Balance at 31 March 2018 (reviewed)                               256          112        1 630          6          111         2 115          153      2 268

EARNINGS PER SHARE
                                                                                                                           SIX MONTHS   SIX MONTHS  FULL YEAR
                                                                                                                             REVIEWED     REVIEWED    AUDITED
                                                                                                                             31 MARCH     31 MARCH    30 SEPT
                                                                                                                                 2018         2017       2017
                                                                                                                            R MILLION    R MILLION  R MILLION
Earnings attributable to shareholders                                                                                             782          763      1 523
Non-controlling interest                                                                                                            -            -          -
Earnings attributable to ordinary shareholders                                                                                    782          763      1 523
Loss on disposal of financial assets available for sale                                                                             -            8          7
Headline earnings attributable to ordinary shareholders                                                                           782          771      1 530

CONDENSED CONSOLIDATED SEGMENT REPORT
                                                                AFRICA                              INTERNATIONAL                           GROUP
                                                       SIX         SIX      FULL YEAR          SIX        SIX  FULL YEAR           SIX        SIX        
                                                    MONTHS      MONTHS        AUDITED       MONTHS     MONTHS    AUDITED        MONTHS     MONTHS  FULL YEAR 
                                                  REVIEWED    REVIEWED        30 SEPT     REVIEWED   REVIEWED    30 SEPT      REVIEWED   REVIEWED    AUDITED
                                                  31 MARCH    31 MARCH           2017     31 MARCH   31 MARCH       2017      31 MARCH   31 MARCH    30 SEPT  
                                                      2018        2017     **RESTATED         2018       2017 **RESTATED          2018       2017       2017
                                                 R MILLION   R MILLION      R MILLION    R MILLION  R MILLION  R MILLION     R MILLION  R MILLION  R MILLION
Segment external revenue                             1 315       1 276          2 525          764        660       1 394        2 079      1 936      3 919

Segment operating expenses                            (787)       (710)        (1 461)        (268)      (223)       (473)      (1 055)      (933)    (1 934)

Segment profit                                         528         566          1 064          496        437         921        1 024      1 003      1 985
Share of income of equity-accounted investee             5           5              8            -          -           -            5          5          8
Net finance and other income/(expenses)                 62          11             17          (57)        (7)          3            5          4         20

Profit from fund management                            595         582          1 089          439        430         924        1 034      1 012      2 013
Income*                                                                                                                              -          3          2

Profit before income tax                                                                                                         1 034      1 015      2 015
Segment assets                                       1 070       1 126          1 121          828        784         956        1 898      1 910      2 077
Investments*                                                                                                                    55 752     61 116     57 019
Total assets                                                                                                                    57 650     63 026     59 096

*  Income and investments are attributable to and backing policyholder funds and investments held through investment partnerships, consolidated funds and other assets.
** Segmental assets to the value of R505 million previously categorised as Africa assets have been restated as International assets.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1  BASIS OF PREPARATION AND ACCOUNTING POLICIES

   The financial information has been prepared in accordance with and containing the information required by the International Financial Reporting Standards (IFRS); 
   the International Accounting Standard 34 Interim Financial Reporting; the Listings Requirements of the JSE Ltd; the SAICA Financial Reporting Guides as issued by 
   the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, as well as the South African Companies Act, 
   No 71 of 2008. The condensed consolidated financial statements do not include all of the information required for a complete set of IFRS annual financial statements.

   These condensed consolidated 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 financial statements are presented in rand, rounded to the nearest million. The accounting policies applied in the
   presentation of the condensed consolidated financial statements are in terms of IFRS and are consistent with those presented in the previous annual financial
   statements.

   These reviewed results have been prepared under the supervision of H Rawoot CA(SA).

2  RELATED PARTY TRANSACTIONS

   Related party transactions for the current period are similar to those disclosed in the group's annual financial statements for the year ended 30 September 2017. 
   No new significant related party transactions arose during the current period.

3  LONG-TERM AND SHORT-TERM BORROWINGS

   Cumulative redeemable preference shares with dividends linked to prime are payable on a quarterly basis, with R150 million capital repayments due on 1 April 2020 and
   1 April 2021. The latter was previously due on 31 March 2018, with the terms now renegotiated.

4  FAIR VALUE DISCLOSURE

   The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

   Level 1   Quoted prices (unadjusted) in active markets for identical assets or liabilities.

   Level 2   Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as closing prices) or
             indirectly (i.e. derived from closing prices). The majority of Level 2 investments are deposits held with financial institutions. The fair values of 
             these deposits are determined using a discounted cash flow valuation methodology based on market rates, reflecting the time value of money and counter 
             party credit risk. The fair value of policyholder and investment partnership liabilities that are included in Level 2 of the hierarchy are measured 
             with reference to the quoted prices in an active market of the investments underlying the liabilities. Cash and cash equivalent balances along with 
             their related liabilities of R1 989 million (R2 253 million: 30 September 2017 and R2 294 million: 31 March 2017) have been excluded from the fair value 
             table on page 11 in current and prior years respectively.

   Level 3   Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

                                                                                                               LEVEL 1      LEVEL 2      LEVEL 3        TOTAL
                                                                                                             R MILLION    R MILLION    R MILLION    R MILLION
   March 2018 (Reviewed)
   Investments backing policyholder funds and investments held through investment partnerships                  46 171        6 344            -       52 515
   Investment securities                                                                                           861            -            1          862
                                                                                                                47 032        6 344            1       53 377
   Policyholder and investment partnership liabilities                                                               -       52 514            -       52 514

   March 2017 (Reviewed)
   Investments backing policyholder funds and investments held through investment partnerships                  50 656        6 898            -       57 554
   Investment securities                                                                                           834            -            -          834
                                                                                                                51 490        6 898            -       58 388
   Policyholder and investment partnership liabilities                                                               -       57 538            -       57 538

   September 2017 (Audited)
   Investments backing policyholder funds and investments held through investment partnerships                  46 960        6 508            -       53 468
   Investment securities                                                                                           933            -            1          934
                                                                                                                47 893        6 508            1       54 402
   Policyholder and investment partnership liabilities                                                               -       53 465            -       53 465


   Fair value for all other financial assets and liabilities have not been presented because they are not carried at fair value and their carrying amounts approximate
   fair value.

   During the current reporting period a net amount of R495 million in debentures were transferred from Level 1 to Level 2 as these are no longer considered to be held
   in active market.

5  NON-CONTROLLING INTEREST AND EXTERNAL INVESTORS IN CONSOLIDATED FUNDS

   The non-controlling interest in consolidated funds arises as a result of the continued consolidation of the Coronation Global Frontiers Fund.

6  CONTINGENT LIABILITIES: SOUTH AFRICAN REVENUE SERVICE (SARS) MATTERS

   From time to time, in common with other organisations, companies in the group are subject to review by SARS. One of our companies has been the subject of a review on
   a matter of principle relating to international operations, and assessed for the 2012, 2013 and 2014 financial periods, to which management strongly disagrees and has
   objected. Management is confident, supported by external advisors, of the company's position and an outflow is not considered probable should the matter be interpreted
   by a court of law, the ultimate tax authority on these matters. Any amounts involved are currently not considered capable of reliable estimation.


Directors: S Pather (Chairman)*, A C Pillay (CEO), J A Snalam (CFO), A Watson*, H Nelson*, J D McKenzie*, L Boyce* (* Independent non-executive)

Registered office: 7th Floor, MontClare Place, Cnr Campground and Main Roads, Claremont 7708, Cape Town

Postal address: PO Box 44684, Claremont 7735, Cape Town

Registration number: 1973/009318/06

Transfer secretaries: Computershare Investor Services (Pty) Ltd, Rosebank Towers, 15 Biermann Avenue, Rosebank 2196

JSE share code: CML

ISIN: ZAE000047353

Website: www.coronation.com

Sponsor: Deutsche Securities (SA) (Pty) Ltd

Date: 22/05/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story