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FNBWGB - Abridged Audited Results for the Year Ended 30 June 2024
FNB WORLD GOVERNMENT BOND EXCHANGE TRADED FUND
(the "Portfolio")
A portfolio in the FNB Funds Collective Investment Scheme in Securities Exchange Traded Funds registered in
terms of the Collective Investment Schemes Control Act, 45 of 2002 ("CISCA")
(Incorporated in the Republic of South Africa)
Share Code: FNBWGB
ISIN: ZAE000303137
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2024
The FNB Funds Collective Investment Scheme in Securities Exchange Traded Funds (the "Scheme") was
established in accordance with the provisions of CISCA with effect from 12 April 2008. The Portfolio was
established as a portfolio of the Scheme in accordance with paragraph A of the Deed of the Scheme on 13
December 2017.
The Portfolio is a passively managed investment fund with the aim of providing compounded annual returns which
tracks the economic performance of the FTSE World Government Bond Index (the "Index").
The Portfolio was initially listed on the JSE Limited ("JSE") on 13 March 2018.
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024
Rand 2024 2023
ASSETS
Investments designated at fair value through profit or loss 488 481 566 319 478 532
Trade and other receivables - 17 741 533
Cash and cash equivalents 3 701 416 3 269 202
Total assets 492 182 982 340 489 267
LIABILITIES
Trade and other payables 654 651 18 102 098
Total liabilities excluding net assets attributable to participatory interest 654 651 18 102 098
holders
Net assets attributable to participatory interest holders 491 528 331 322 387 169
Total liabilities including net assets attributable to participatory interest
holders 492 182 982 340 489 267
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE
2024
Rand 2024 2023
Restated
Interest income 32 502 31 312
Fair value gain (18 500 924) 27 670 082
Investment income (18 468 422) 27 701 394
Other operating expenses (2 101 107) (1 251 529)
Interest expense - (15 771)
(Loss) / Profit before tax (20 569 529) 26 434 094
Taxation - -
(Loss)/Profit before amounts attributable to participatory interest holders (20 569 529) 26 434 094
Distributions paid (6 472 370) (2 837 351)
(Loss)/Profit before amounts attributable to participatory interest holders (27 041 899) 23 596 743
Decrease / (Increase) in net assets attributable to participatory interest holders 27 041 899 (23 596 743)
Total comprehensive income for the year - -
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2024
Rand 2024 2023
Cash flows from operating activities
Cash utilised by operations (1 241 169) (1 008 687)
Dividends received 7 303 879 2 872 610
Interest paid - (15 771)
Sale of investments at fair value through profit or loss 90 491 900 47 936 366
Purchase of investments at fair value through profit or loss (285 287 575) (222 237 177)
Net cash outflow from operating activities (188 732 965) (172 452 659)
Cash flows from financing activities
Creation of portfolio participatory interests 196 183 061 176 698 686
Distributions paid to participatory interest holders (6 472 370) (2 837 351)
Net cash inflow from financing activities 189 710 691 173 861 335
Net increase in cash and cash equivalents 977 726 1 408 676
Cash and cash equivalents at the beginning of the year 3 284 973 1 876 297
Effect of foreign exchange rate changes on cash and cash equivalents (565 852) -
Cash and cash equivalents at the end of the year 3 696 847 3 284 973
SUMMARISED ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2024
Basis of presentation
The financial statements have been prepared in accordance with IFRS issued by the International Accounting
Standards Board ("IASB"), including interpretations issued by the IFRS Interpretations Committee, the Financial
Reporting Pronouncements as issued by the Financial Reporting Standards Council, the South African Institute of
Chartered Accountants ("SAICA") Financial Reporting Guides as issued by the Accounting Practices Committee
and the provisions of CISCA, the JSE Listings Requirements and the Companies Act No. 71 of 2008.
Standards, interpretations and amendments effective 1 July 2023
There were no new or amended IFRS standards which became effective for the year ended 30 June 2024 that
impacted the Portfolio's reported earnings, financial position or reserves, or the accounting policies.
Financial instruments: Classification
The Portfolio has classified all its investments as financial assets or financial liabilities at amortised cost or at fair
value through profit or loss ("FVPL").
Financial assets at amortised cost include trade and other receivables and cash and cash equivalents.
Financial assets at FVPL
All financial assets not measured at amortised cost are subsequently measured at FVPL.
Financial liabilities at amortised cost
Financial liabilities that are not held-for-trading or designated as at FVPL are measured at amortised cost. This
category includes trade and other payables.
Financial instruments: Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of
changes in value. All balances, except for physical cash which is held at call, included in cash and cash equivalents
have a maturity date of less than three months from the acquisition date and are measured at amortised cost.
Participatory interest
The Portfolio issues one class of participatory interests which is redeemable at the holder's option. Participatory
interests can be put back to the Portfolio at any dealing date for cash equal to a proportionate share of the Portfolio's
net asset value attributable to the participatory interest class.
The participatory interests are measured at the redemption amount that is payable at the reporting date if the holder
exercises the right to put the participatory interests back to the Portfolio.
The participatory interests are issued and redeemed at the holder's option at prices based on the Portfolio's net
asset value per participatory interest at the time of issue or redemption. The Portfolio's net asset value per
participatory interest is calculated by dividing the net assets attributable to the holders of the participatory interest
by the total number of outstanding participatory interests, in accordance with the provisions of the Portfolio's
supplemental trust deed.
Net assets attributable to participatory interest holders, evidence a residual interest in the assets of the Portfolio
after deducting all of its liabilities.
The value of the net assets attributable to participatory interest holders will vary with the changes in the underlying
value of the investments, net of receivables and payables. The total movement in the statement of comprehensive
income is transferred to the net assets attributable to participatory interest holders.
Creations and redemptions are recorded on trade date using the previous day's closing price.
In accordance with the Portfolio's supplemental trust deed, the Portfolio distributes its distributable income and any
other amounts determined by FNB CIS Manco (RF) Proprietary Limited (the "Manager") of the Portfolio to
participatory interest holders. The Portfolio does not have an unconditional right to avoid delivering cash or another
financial asset to settle the contractual obligation should a holder exercise the right to put the participatory interests
back to the Portfolio. For this reason, the participatory interest does not meet the requirements to be classified as
equity in terms of IAS 32 and is thus classified as a liability. Distributions are automatically reinvested in additional
participatory interests, other than distributions that are paid in cash.
Net income adjustment on creation and redemption of units
An adjustment to income arises on the creation and cancellation of units since the price of a unit includes accrued
income and expenses. The income adjustment on creation or cancellation of units is recognised as part of the
creation or redemption of unitholder interests and disclosed within the note of net assets attributable to participatory
interest holders, when units on which it arises are either purchased or sold as these form part of the cash flow on
unit transactions.
Investment income
Fair value gains and losses
Gains and losses arising from a change in the fair value of investments, interest income on interest-bearing
investments and dividend income, are included in the statement of comprehensive income under fair value gains
/ losses in the year in which the changes arise.
Interest income
Interest income on cash and cash equivalents is recognised in the statement of comprehensive income as part of
interest income on the effective interest method.
Taxation
The Portfolio has no current or deferred tax liability as all realised gains and losses are considered to be of a capital
nature and disregarded in the tax calculation of this Collective Investment Scheme portfolio in accordance with
paragraph 61 of the Eighth schedule to the Income Tax Act No 58 of 1962. All investment income is distributed
within the time frames specified by section 25BA of the Income Tax Act and is therefore taxed in the hands of the
participatory interest holders.
Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions.
Monetary items are translated using the closing exchange rates prevailing at the reporting date. The realised and
unrealized differences on translation are recognised in the statement of comprehensive income in the period in
which they arise.
Critical accounting estimates and judgements in applying accounting policies
No significant accounting estimates and judgements have been applied in the annual financial statements of the
Portfolio.
All investments at FVPL are measured at fair value based on quoted prices in active markets and do not require
the use of judgement or estimates.
SUMMARISED NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2024
Net assets attributable to participatory interest holders
Rand 2024 2023
Restated
Balance at the beginning of the year 322 387 169 122 091 740
Participatory interests created during the year 196 183 061 176 698 686
(Decrease)/increase in net assets attributable to participatory interest holders (27 041 899) 23 596 743
Balance at the end of the year 491 528 331 322 387 169
Distributions
Number of Number of
participatory Distribution participatory Distribution
Rand interests interests
2024 2024 2023 2023
Declared 23 August 2023 and paid 28 August 2023
(2023: Declared 21 August 2022 and paid 26 August
2022)
Class A: 3.30 cents per participatory interest
(2023: 2.80 cents per participatory interest) 52 134 683 1 967 074 18 134 683 508 344
Declared 22 November 2023 and paid 27 November 2023
(2023: Declared 20 November 2022 and paid 25
November 2022)
Class A: 2.15 cents per participatory interest
(2023: 2.37 cents per participatory interest) 64 134 683 1 381 743 29 134 683 689 096
Declared 21 February 2024 and paid 26 February 2024
(2023: Declared 19 February 2023 and paid 24 February
2023)
Class A: 2.00 cents per participatory interest
(2023: 2.27 cents per participatory interest) 64 134 683 1 284 791 31 134 683 705 932
Declared 22 May 2024 and paid 27 May 2024
(2023: Declared 13 May 2023 and paid 18 May 2023)
Class A: 2.62 cents per participatory interest
(2023: 2.52 cents per participatory interest) 70 134 683 1 838 762 37 134 683 933 979
6 472 370 2 837 351
The Portfolio effects quarterly distributions out of income received by the Portfolio.
Prior year disclosure misstatement
Distribution paid to participatory interest holders was incorrectly classified under the net assets attributable to
participatory interest holders note in the financial statements as a deduction from net assets attributable to
participatory interest holders. Participatory interest does not meet the requirements to be classified as equity in
terms of IAS32 and is thus classified as a liability. Interest, distributions, losses and gains relating to a financial
instrument classified as a liability should be recognized as income or expense in the statement of comprehensive
income. The error has been corrected by restating each of the affected financial statement lines items for the prior
periods. This error did not result in a change to profit before tax, net assets attributable to participatory interest
holders in the statement of financial position, statement of cash flow, related notes and tax as previously reported
in the prior year. The following table summarises the impact on the financial statements:
For the year ended 30 June 2023 Impact of correction of error
As previously
Rand reported Adjustments As restated
Distribution paid - (2 837 351) (2,837,351)
(Loss) / profit before amounts attributable to participatory
interest holders 26,434,094 (2,837,351) 23,596,743
Decrease / (increase) in net assets attributable to participatory
interest holders (26,434,094) 2,837,351 (23,596,743)
Total comprehensive income for the year - - -
These summarised annual financial statements have not been audited by the independent auditors, but the full
sets, available at the website mentioned below, have been audited by the independent auditors, KPMG
Incorporated, and their unqualified audit opinion is available through a secure electronic manner at the election of
the person requesting inspection.
A full copy of the audited annual financial statements, including the audit report issued thereon, is available on the
FNB website: https://www.fnb.co.za/share-investing/exchange-traded-funds.html through the route "ETFs available
to you from FNB - Available ETFs – FNB World Government Bond ETF – ETF documents – Annual Financial
Statements".
10 October 2024
Debt Sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited)
Trustee
Standard Chartered Bank, Johannesburg Branch
Manager
FNB CIS Manco (RF) Proprietary Limited
Auditors
KPMG Incorporated
Date: 10-10-2024 08:00:00
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