Affin Hwang
Select Income Fund
Annual Report
29 February 2016
MANAGER
Affin Hwang Asset Management Berhad (429786-T)
TRUSTEE
HSBC (Malaysia) Trustee Berhad (1281-T)
AFFIN HWANG SELECT INCOME FUND
Annual Report and Audited Financial Statements
For the Financial Period From 1 January 2015 to 29 February 2016
Contents
Page
MANAGER’S REPORT ............................................................................................................... 2
FUND PERFORMANCE DATA ................................................................................................... 8
TRUSTEE’S REPORT ................................................................................................................9
STATEMENT OF COMPREHENSIVE INCOME ....................................................................... 10
STATEMENT OF FINANCIAL POSITION................................................................................. 11
STATEMENT OF CHANGES IN EQUITY ................................................................................. 12
STATEMENT OF CASH FLOWS.............................................................................................. 13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ........................................................ 14
NOTES TO THE FINANCIAL STATEMENTS ........................................................................... 22
STATEMENT BY THE MANAGER ........................................................................................... 68
AUDITORS’ REPORT............................................................................................................... 69
DIRECTORY OF SALES OFFICE ............................................................................................ 71
1
MANAGER’S REPORT
(1)
MANAGER’S VIEW ON PORTFOLIO AND MARKET
Fund Type, Category, Objective and Distribution Policy
Affin Hwang Select Income Fund (the “Fund”) is an income and growth fund, categorized as fixed income
fund that seeks to provide investors with a steady and regular income stream in the form of distributions over
the medium to longer term.
The Fund endeavours to distribute income, if any, on a quarterly basis. However, the amount of income
available for distribution may fluctuate from year to year.
Benchmark
The benchmark used by the Manager will be a combination of 12-month fixed deposit rate, weighting at 70%
for the fixed income investments and Dow Jones/Asia Pacific Select Dividend 30 Index, weighing at 30% for
the equities investment.*
(* The risk profile of this Fund is different from the risk profile of the benchmark)
Performance of the Fund (1 January 2015 – 29 February 2016)
For the period under review 1 January 2015 to 29 February 2016 the fund registered a return of 6.30%,
outperforming the benchmark return of 5.24% by 1.06%. The Net Asset Value (NAV) per unit of the fund on
29 February 2016 was RM0.6935 while as at 31 December 2014 it was RM0.6759. The fund declared a
gross income distribution of RM0.025 per unit for the period. (See Table 1 for performance of the fund and
Figure 1 for movement of the fund versus the Benchmark respectively).
Since commencement, the fund has registered a return of 125.83%. Compare to the benchmark that gained
76.08%, the fund outperformed the benchmark by 49.75%. The fund has declared a total gross income
distribution of RM0.2656 per unit to-date. As such, the objective of providing investors with a steady income
stream in the form of distributions has been met.
Table 1: Performance of the Fund
For the Period
(1/1/15 29/2/16)
3 Years
(1/3/13 29/2/16)
5 Years
(1/3/11 29/2/16)
Since
Commencement
(27/1/05 - 29/2/16)
Fund
6.30%
14.92%
40.67%
125.83%
Benchmark
Outperformance /
(Underperformance)
5.24%
25.26%
34.40%
76.08%
1.06%
(10.34%)
6.27%
49.75%
1 Year
(1/1/15 29/2/16)
3 Years
(1/3/13 29/2/16)
5 Years
(1/3/11 29/2/16)
Since
Commencement
(27/1/05 - 29/2/16)
Fund
5.39%
4.74%
7.05%
7.62%
Benchmark
Outperformance /
(Underperformance)
4.49%
7.79%
6.08%
5.23%
0.90%
(3.05%)
0.97%
2.39%
Source of Benchmark: Bursa Malaysia Berhad & Maybank
Table 2: Average Total Return
Source of Benchmark: Bursa Malaysia Berhad & Maybank
2
Table 3: Annual Total Return
FYE 2016
(01/1/15 29/2/16)
FYE 2014
(01/1/14 31/12/14)
FYE 2013
(01/1/13 31/12/13)
FYE 2012
(01/1/12 31/12/12)
FYE 2011
(01/1/11 31/12/11)
Fund
6.30%
6.91%
2.88%
15.13%
5.58%
Benchmark
Outperformance /
(Underperformance)
5.24%
10.89%
7.19%
4.45%
2.93%
1.06%
(3.98%)
(4.31%)
10.68%
2.65%
Source of Benchmark: Bursa Malaysia Berhad & Maybank
Figure 1: Movement of the Fund versus the Benchmark
“This information is prepared by Affin Hwang Asset Management Berhad for information purposes only. Past earnings or the Fund’s
distribution record is not a guarantee or reflection of the Fund’s future earnings/future distributions. Investors are advised that unit
prices, distributions payable and investment returns may go down as well as up. Source of Benchmark is from Bloomberg.”
Benchmark: 12-month fixed deposit rate, weighting at 70% for the fixed income investments and Dow Jones/Asia Pacific Select
Dividend 30 Index, weighing at 30% for the equities investment
Strategies Employed
The Fund continues to adopt a bottom up stock-picking strategy combined with country selection and asset
allocation strategies. Over the period under review, the Fund held a geographical tilt towards ASEAN markets
on the back of more imminent catalysts.
The Manager had remained cautious on the markets given the uncertainties that have continued to mount
against the global financial markets. The Manager maintained a heavier exposure in fixed income
instruments, and a moderate cash level in view of the mounting uncertainties surrounding global financial
markets.
3
Asset Allocation
As at 29 February 2016, the asset allocation of the Fund stood at 71.30% in fixed income instruments
19.40% in equities and balance in cash. For a snapshot of the Fund’s asset and equity sector, please refer to
Figure 2 below.
Figure 2: Summary of Asset Allocation as at 29 February 2016.
Asset Allocation
Equities - local
Consumer Products
Finance
Industrial Products
Properties
REITs
Trading & Services
Health Care
Utilities
Plantations
Equities - foreign
Insurance
Pharmaceutical
Consumer Products
Construction
Telecommunications
Appliances
Food Processing
Retail
REITs
Agriculture
Development
Banks
Airport Services
Healthcare
Finance
Properties & Construction
Utilities
Services
Mining
Manufacturing
Resources
Technology
Energy
Industrials
Equity
Fixed Income Securities
Cash
Total
29 Feb 2016
(%)
31 Dec 2014
(%)
31 Dec 2013
(%)
0.64
0.99
0.37
0.58
1.86
-
3.86
1.45
0.44
1.05
0.58
4.01
0.64
0.47
0.30
3.58
0.74
5.78
0.94
0.44
0.73
4.89
1.16
1.02
19.40
71.30
9.30
100.00
1.27
1.23
0.43
0.67
1.32
0.67
0.68
0.85
0.94
1.47
1.18
0.51
0.62
0.76
19.40
73.20
7.40
100.00
0.60
0.91
2.17
1.57
3.79
0.12
1.96
4.05
0.69
0.40
0.35
1.19
28.12
67.09
4.79
100.00
The Manager had maintained a relatively lower equity exposure for the Fund given the more volatile market
conditions. Fixed income exposure for the Fund had also been slightly reduced while the Manager waits out
for markets to stabilise.
Market Review
nd
Markets which started the year on steady footing continued its uptrend until the 2 half of the year when a
surprise devaluation of the Reniminbi by the People’s Bank of China (PBoC) left investors scrambling. Fresh
from a heavy sell-down, global markets remained relatively fragile over the course of September, before
bouncing back in October. Market strength was largely supported by the anticipated monetary policy easing
measures expected to be taken by the European Central Bank (ECB), additional easing measures taken by
the People’s Bank of China in an attempt to address its easing growth concerns.
4
The US Federal Reserve finally raised its interest rates with a 0.25% hike in December after a lengthy
anticipation process. While the policy move had removed some market uncertainty, financial markets failed to
lift off in a big way. This was largely due to the concerns surrounding the sustainability of China’s economic
growth, coupled with the prolonged low oil price environment.
With 2015 over, investors’ expectations for an encouraging start to 2016 was crushed after January 2016 was
dubbed to be one of the worst starts for equity markets. The Shanghai Composite Index tumbled 7% in a
single trading day, leading to the trigger of the circuit breaker. The circuit breaker was triggered twice in a
span of 1 week, and soon led to the PBoC scrapping the initiative after it was seen to be triggering a panic in
the market as opposed to maintaining stability. Sentiment in the market did not improve over the period under
review - the Shanghai Composite Index tumbled 22.0% in local currency terms in the 3 months ending 29
February 2016.
The elaborate sell-down from the start of the year had left most global equity markets in negative territory
over the period under review. The MSCI Asia ex Japan Index slid 9.2% lower, while the MSCI World Index
performed marginally better by recording a dip of 8.7% over the same period. Within the region, the Jakarta
Composite Index stood out as one of the most resilient markets, having recorded a 7.3% gain when most of
its regional peers were swimming in the red. Optimism that President Jokowi would be able to put in place
policy reforms and reaffirmation of an increased infrastructure spending catapulted Indonesia into the
limelight as one of the region’s favourites. (All performance numbers are quoted in local currency terms)
Oil prices saw little reprieve and had remained suppressed after the oil producers’ reluctance to consider
reducing production, contributing further to the supply glut in the market. Over the period under review, oil
prices slid 19.0% lower alongside most equity markets. Despite the negative interest rate policy introduced by
the Bank of Japan in January, the Yen continued its upward trend as investors turned towards safer haven
assets - putting a strain on corporate margins. Gold prices had also continued on its steady climb - recording
a 16.3% gain in the 3 months ending 29 February 2016.
Divergence in central banks’ policies had continued to be a focal point over the course of the period under
review. The US Feds had kept markets on their toes as to the timeframe of its second rate hike after firstly
raising rates in December 2015. The Bank of Japan then surprised markets by taking on a negative interest
rate policy, joining its counterparts in Sweden, Denmark, and Switzerland. Within the period under review, the
European Central Bank (ECB) had also extended the tenure of its quantitative easing program by a further 6
months – maintaining its monthly bond purchase at EUR 60 billion. Despite the easing measures taken by
central banks globally, the incremental benefits from the easing measures implemented was dampened by
the heightened level of market volatility which nudged investors into safer haven assets, and thus pushed
down yields.
Yields on key government bonds had steadily trended lower as strong demand supported prices of income
yielding assets as investors’ sentiment remained fragile on the back of the heightened market volatility. The
general divergence in central bank strategies, and economic performance provided demand support for US
Treasuries. Yields on the benchmark 10-year US Treasury notes dipped to the 1.5% levels, its lowest since
August 2012. The offer of higher returns as a comparison to European sovereign bonds kept US Treasuries
attractive. Weaker data flowing out of global economies had only put a further dampener on investors’
sentiment. Expectations of the ECB to take on further stimulus measures to address its sluggish economy
pushed yields down lower. The 10-year German bonds fell to its lowest level in 10-months in February.
Banking stocks did take a hit towards the end of the period under review after news broke that Deutsche
Bank may be faced with difficulty of meeting its coupon payments in one of its Contingent Convertibles
(CoCos), which the Bank was quite to refute and address. Volatility soared prior to the Bank’s statement,
which caused global equity prices and credit spreads to spike within the high yield corporate bond market
before stabilising soon after.
Investment Outlook
We expect central banks globally to maintain an accommodative monetary policy given the current economic
landscape - thus providing some support for the financial markets. Nevertheless, we will be going into the
year with a caution given the lack of strong fundamental drivers. We do however believe that there are still
pockets of opportunities within the regional market.
5
The Manager will be taking a more optimistic outlook on Indonesia given its support from increased
infrastructure spending, which will likely be a driver for the construction sector within the market. The heavy
sell-down on China based companies have opened a window of opportunity to move back into the market at
more palatable prices. The Manager maintains his view on long term growth outlook for the technology, and
environmental sector in HK/China. The Manager will also be looking out for opportunities within the
Philippines, and Thailand equity market on the back of optimism on ASEAN.
We are, however, lowering our expectations on growth returns from investments given the current slow
growth, and low interest rate environment, which we believe may persist in the medium term. In the interim,
the Manager will be tilting the Fund's position towards income yielding assets to ride through the volatile
market conditions as we wait for market to stabilise.
On the fixed income front, the Manager maintains preference on high quality issuances, while maintaining a
currency hedge for its foreign fixed income exposure to mitigate foreign currency risks given the swings in the
currency market. We believe that the direction of Asian bonds would largely depend on the Fed’s decision in
the meeting in March - a bullish tone may potentially lead to investors shifting their assets back into the US.
Whereby, a more cautious tone could provide further support for the regional bonds.
(2)
SOFT COMMISSIONS RECEIVED FROM BROKERS
As per the requirements of the Securities Commission’s Guidelines on Unit Trust Funds and Guidelines on
Compliance Function for Fund Management Companies., soft commissions received from brokers/dealers
may be retained by the management company only if the –
(i) goods and services provided are of demonstrable benefit to Unit holders of the Fund; and
(ii) goods and services are in the form of research and advisory services that assists in the decisionmaking process.
During the financial period under review, the management company had received on behalf of the Fund, soft
commissions in the form of research materials, data and quotation services, investment-related publications,
market data feed and industry benchmarking agencies which are of demonstrable benefit to Unitholders of
the Fund.
(3)
BREAKDOWN OF UNITHOLDERS BY SIZE AS AT 29 FEBRUARY 2016
Size of holdings
(Units)
No. of Unitholders
No. of Units held *
(‘000)
5,000 and below
235
521
5,001 to 10,000
159
1,142
10,001 to 50,000
355
8,742
50,001 to 500,000
346
53,723
500,001 and above
127
1,870,273
1,222
1,934,401
Total
* Note : Excluding Manager’s Stock
There is neither any significant change to the state affairs of the Fund nor any circumstances that materially
affect any interests of the unit holders during the period under review.
6
INCOME DISTRIBUTION
Affin Hwang Asset Management Bhd has distributed a total of gross distribution of RM0.025 per Unit for
investors of the Affin Hwang Select Income Fund over the period under review.
The NAV per Unit prior and subsequent to the distributions are as follow:
Distribution
Date
21 Jun 2010
17 Dec 2010
21 Jun 2011
16 Dec 2011
13 Mar 2012
20 June 2012
21 Sept 2012
7 Dec 2012
25 March 2013
10 June 2013
23 Sept 2013
9 Dec 2013
17 Mar 2014
11 June 2014
12 Sept 2014
8 Dec 2014
23 Mar 2015
8 June 2015
7 Sept 2015
14 Dec 2015
Ex-Date
22 Jun 2010
20 Dec 2010
22 Jun 2011
19 Dec 2011
14 Mar 2012
21 June 2012
24 Sept 2012
10 Dec 2012
26 March 2013
11 June 2013
24 Sept 2013
10 Dec 2013
18 Mar 2014
12 June 2014
15 Sept 2014
9 Dec 2014
24 Mar 2015
9 June 2015
8 Sept 2015
15 Dec 2015
CumDistribution
0.5696
0.6063
0.6212
0.6092
0.6200
0.6329
0.6534
0.6629
0.6760
0.6707
0.6598
0.6633
0.6621
0.6710
0.6762
0.6865
0.7039
0.7138
0.7075
0.7148
Distribution per
Unit (RM)
0.0050
0.0200
0.0051
0.0202
0.0051
0.0051
0.0051
0.0050
0.0050
0.0050
0.0050
0.0100
0.0050
0.0050
0.0050
0.0100
0.0050
0.0050
0.0050
0.0100
7
Ex-distribution
0.5662
0.5870
0.6165
0.5898
0.6166
0.6282
0.6483
0.6594
0.6713
0.6605
0.6544
0.6529
0.6561
0.6655
0.6720
0.6751
0.6963
0.7057
0.7048
0.7040
FUND PERFORMANCE DATA
Source: HSBC Trustee
Total NAV (RM’million)
NAV per Unit (RM)
Units in Circulation (million)
Highest NAV
Lowest NAV
iii
Return of the Fund (%)
i
- Capital Growth (%)
ii
- Total Income Return (%)
Gross Distribution per Unit (sen)
Net Distribution per Unit (sen)
1
Management Expense Ratio (%)
2
Portfolio Turnover Ratio (times)
As at
29 Feb 2016
1,341.502
0.6935
1,934.404
0.7217
0.6829
As at
31 Dec 2014
1,076.057
0.6759
1,592,062
0.6866
0.6523
As at
31 Dec 2013
1,628.816
0.6527
2,495.353
0.6836
0.6436
6.30
2.60
3.602
2.50
2.50
1.69
1.32
7.48
3.55
3.79
2.50
2.50
1.32
1.19
2.33
-1.464
3.85
2.50
2.50
1.37
1.12
Basis of calculation and assumption made in calculating the returns:The performance figures are a comparison of the growth/decline in NAV for the stipulated period taking into
account all the distribution payable (if any) during the stipulated period.
An illustration of the above would be as follow:Capital return
Income return
Total return
= NAV per Unit end / NAV per Unit begin – 1
= Income distribution per Unit / NAV per Unit ex-date
= (1+Capital return) x (1+Income return) - 1
i
Capital Growth
= {NAV per Unit @ 29/02/16 ÷ NAV per Unit @ 31/12/14* - 1} x 100
= {0.6935 ÷ 0.6759 – 1} x 100
= 2.60%
Income Return @
ex-date
= {Income Distribution per unit ÷ NAV per unit on ex-date} + 1
= {0.0050 ÷ 0.6963 @ 24/03/15} + 1 = 1.007181
= {0.0050 ÷ 0.7057 @ 09/06/15} + 1 = 1.007085
= {0.0050 ÷ 0.7048 @ 08/09/15} + 1 = 1.007094
= {0.0100 ÷ 0.7040 @ 09/12/15} + 1 = 1.014205
ii
Total Income
Return
= {Income Return @ex-date x Income Return @ex-date} -1x100
= {1.007181 x 1.007085 x 1.007094 x 1.014205} -1 x 100
= 3.602%
iii
= [{(1 + Capital Growth) x (1 + Total Income Return)} – 1] x 100
= [{(1 + 2.60%) x (1 + 3.602%)} – 1] x 100
= 6.30%
Return of the
Fund
* Source – HSBC Trustee
Past performance is not necessarily indicative of future performance and that unit prices and
investment returns may go down, as well as up.
1
2
The MER had increased slightly over the period under review due to higher expenses incurred by the Fund.
The PTR increased over the period under review as the Fund’s transaction levels increased while the Fund size dipped slightly.
8
TRUSTEE’S REPORT TO THE UNITHOLDERS OF
AFFIN HWANG SELECT INCOME FUND
We have acted as Trustee of Affin Hwang Select Income Fund (“the Fund”) for the financial year ended 29
February 2016. To the best of our knowledge, Affin Hwang Asset Management Berhad (“the Management
Company”), has operated and managed the Fund in accordance with the following:a)
limitations imposed on the investment powers of the Management Company and the Trustee under the
Deeds, the Securities Commission’s Guidelines on Unit Trust Funds, the Capital Markets and Services
Act 2007 and other applicable laws;
b)
valuation/pricing is carried out in accordance with the Deeds and any regulatory requirements; and
c)
creation and cancellation of units are carried out in accordance with the Deeds and any regulatory
requirements.
During this financial year, a total distribution of 2.50 sen per unit (gross) has been distributed to the unitholders of
the Fund. We are of the view that the distribution is not inconsistent with the objective of the Fund.
For HSBC (Malaysia) Trustee Berhad
Tan Bee Nie
Head, Trustee Operations
Kuala Lumpur
Date: 21 April 2016
9
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
Note
Financial
period from
1.1.2015
to 29.2.2016
RM
2014
RM
INVESTMENT INCOME
Dividend income
Interest income
Net foreign currency exchange loss
Net loss on forward foreign currency
contracts at fair value through profit or loss
Net (loss)/ gain on interest rate swaps
at fair value through profit or loss
Net gain on financial assets at fair value
through profit or loss
4
5,571,538
51,291,827
(10,550,940)
6,476,594
43,095,473
(2,593,495)
(48,747,423)
(10,199,301)
(8,834,518)
9
101,874,406
──────────
90,604,890
──────────
78,602,538
──────────
115,905,357
──────────
5
6
(17,550,560)
(957,585)
(10,926)
(16,722)
(4,573,824)
(1,575,959)
──────────
(24,685,576)
──────────
(15,446,531)
(901,048)
(7,000)
(4,030)
(4,768,660)
(687,952)
──────────
(21,815,221)
──────────
EXPENSES
Management fee
Trustee fee
Auditors' remuneration
Tax agent's fee
Transaction costs
Other expenses
65,919,314
NET PROFIT BEFORE TAXATION
8
TAXATION
NET PROFIT AFTER TAXATION
AND TOTAL COMPREHENSIVE INCOME
FOR THE FINANCIAL PERIOD/ YEAR
523,548
94,090,136
(1,060,032)
──────────
(1,160,475)
──────────
64,859,282
══════════
92,929,661
══════════
48,064,618
16,794,664
──────────
64,859,282
══════════
81,958,727
10,970,934
──────────
92,929,661
══════════
Net profit after taxation is made up of the following:
Realised amount
Unrealised amount
The accompanying summary of significant accounting policies and notes to the financial statements form an
integral part of these financial statements.
10
STATEMENT OF FINANCIAL POSITION
AS AT 29 FEBRUARY 2016
Note
29.2.2016
RM
31.12.2014
RM
9
10
1,237,218,834
95,201,887
215,842
1,006,810,014
66,717,878
72,498
3,379,382
8,809,170
1,253,530
12,678,263
12
13,950,154
──────────
1,358,775,269
──────────
56,771
──────────
1,087,588,954
──────────
12
-
9,518,717
11
5,042,195
174,819
1,560,421
73,576
10,432,082
8,151
4,134
152,677
──────────
17,273,236
──────────
1,100,820
643,568
64,214
7,000
3,550
19,000
──────────
11,531,688
──────────
1,341,502,033
══════════
1,076,057,266
══════════
1,167,259,708
174,242,325
──────────
924,986,683
151,070,583
──────────
1,341,502,033
══════════
1,076,057,266
══════════
1,934,404,000
══════════
1,592,062,000
══════════
0.6935
══════════
0.6759
══════════
ASSETS
Financial assets at fair value
through profit or loss
Cash and cash equivalents
Dividend receivable
Amount due from Manager
- creation of units
Amount due from brokers
Forward foreign currency contracts
at fair value through profit or loss
Tax recoverable
TOTAL ASSETS
LIABILITIES
Forward foreign currency contracts
at fair value through profit or loss
Interest rate swaps at fair value
through profit or loss
Amount due to Manager
- management fee
- cancellation of units
Amount due to Trustee
Amount due to brokers
Auditors’ remuneration
Tax agent’s fee
Other payables and accruals
TOTAL LIABILITIES
NET ASSET VALUE OF THE FUND
EQUITY
Unitholders’ capital
Retained earnings
NET ASSETS ATTRIBUTABLE
TO UNITHOLDERS
13
NUMBER OF UNITS IN CIRCULATION
NET ASSET VALUE PER UNIT (RM)
The accompanying summary of significant accounting policies and notes to the financial statements form an
integral part of these financial statements.
11
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
Unitholders’
capital
RM
Retained
earnings
RM
Total
RM
924,986,683
151,070,583
1,076,057,266
Total comprehensive income for the
financial period
-
64,859,282
64,859,282
Distributions (Note 7)
-
(41,687,540)
(41,687,540)
Balance as at 1 January 2015
Movement in unitholders’ capital:
Creation of units arising from applications
338,492,001
-
338,492,001
Creation of units arising from distribution
40,445,231
-
40,445,231
Cancellation of units
Balance as at 29 February 2016
(136,664,207)
──────────
1,167,259,708
══════════
──────────
174,242,325
══════════
(136,664,207)
──────────
1,341,502,033
══════════
Balance as at 1 January 2014
1,525,649,422
103,167,172
1,628,816,594
Total comprehensive income for the
financial year
-
92,929,661
92,929,661
Distributions (Note 7)
-
(45,026,250)
(45,026,250)
Movement in unitholders’ capital:
Creation of units arising from applications
11,839,185
-
11,839,185
Creation of units arising from distribution
44,253,340
-
44,253,340
Cancellation of units
Balance as at 31 December 2014
(656,755,264)
──────────
924,986,683
══════════
──────────
151,070,583
══════════
(656,755,264)
──────────
1,076,057,266
══════════
The accompanying summary of significant accounting policies and notes to the financial statements form an
integral part of these financial statements.
12
STATEMENT OF CASH FLOWS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
Note
Financial
period from
1.1.2015
to 29.2.2016
RM
2014
RM
CASH FLOWS FROM OPERATING ACTIVITIES
Proceeds from sale of investments
Purchase of investments
Dividends received
Interest received
Management fee paid
Trustee fee paid
Payment for other fees and expenses
Realised loss on forward foreign
currency contracts
Realised (loss)/ gain on interest rate swaps
Net realised foreign exchange gains
Net cash (used in)/ generated from operating activities
1,443,461,003
(1,652,701,782)
5,001,142
45,459,663
(17,090,959)
(948,223)
(1,468,195)
1,808,985,197
(1,233,070,117)
5,504,624
51,586,478
(16,030,425)
(935,109)
(684,566)
(72,216,294)
(3,967,142)
93,113,032
──────────
(161,357,755)
──────────
(11,806,805)
1,965,233
29,636,078
──────────
635,150,588
──────────
336,366,149
(137,307,775)
(1,242,309)
──────────
197,816,065
──────────
10,585,655
(659,326,096)
(772,910)
──────────
(649,513,351)
──────────
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from creation of units
Payments for cancellation of units
Payment for distributions
Net cash generated from/ (used in) financing activities
NET INCREASE / (DECREASE)/ IN CASH AND
CASH EQUIVALENTS
36,458,310
(14,362,763)
EFFECTS OF FOREIGN CURRENCY EXCHANGE
(7,974,301)
(2,577,723)
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE FINANCIAL PERIOD/ YEAR
CASH AND CASH EQUIVALENTS AT THE
END OF THE FINANCIAL PERIOD/ YEAR
10
66,717,878
──────────
83,658,364
──────────
95,201,887
══════════
66,717,878
══════════
The accompanying summary of significant accounting policies and notes to the financial statements form an
integral part of these financial statements.
13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
The following accounting policies have been used in dealing with items which are considered material in
relation to the financial statements.
A
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost convention in accordance with the
provisions of the Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting
Standards (“IFRS”), as modified by financial assets and liabilities (including derivatives) at fair value through
profit or loss.
The preparation of financial statements in conformity with MFRS requires the use of certain critical
accounting estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenue and expenses during the reported financial period. It also requires the Manager to
exercise their judgment in the process of applying the Fund’s accounting policies. Although these estimates
and judgment are based on the Manager’s best knowledge of current events and actions, actual results may
differ.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed in Note N.
(a)
Standards, amendments to published standards and interpretations that are effective
The Fund has applied the following amendments for the first time for the financial year beginning on 1
January 2015:
•
•
Annual Improvements to MFRSs 2010 – 2012 Cycle
Annual Improvements to MFRSs 2011 – 2013 Cycle
The adoption of these amendments did not have any impact on the current or any prior year and are
not likely to affect future periods.
(b)
The new standards and amendments to published standards that are applicable to the
Fund but not yet effective and have not been early adopted are as follows:
(i)
Financial year beginning on/after 1 March 2018
•
MFRS 15 “Revenue from Contracts with Customers” (effective from 1 January 2018)
replaces MFRS 118 “Revenue” and MFRS 111 “Construction contracts” and related
interpretations. The standard deals with revenue recognition and establishes principles
for reporting useful information to users of financial statements about the nature,
amount, timing and uncertainty of revenue and cash flows arising from an entity’s
contracts with customers.
Revenue is recognised when a customer obtains control of a good or service and thus
has the ability to direct the use and obtain the benefits from the good or service. The
core principle in MFRS 15 is that an entity recognises revenue to depict the transfer of
promised goods or services to the customer in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services.
14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
A
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED)
(b)
The new standards and amendments to published standards that are applicable to the Fund but not
yet effective and have not been early adopted are as follows: (continued)
(i)
Financial year beginning on/after 1 March 2018 (continued)
•
MFRS 9 “Financial Instruments” (effective from 1 January 2018) will replace MFRS
139 “Financial Instruments: Recognition and Measurement”.
MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and
establishes three primary measurement categories for financial assets: amortised
cost, fair value through profit or loss and fair value through other comprehensive
income (“OCI”). The basis of classification depends on the entity’s business model
and the cash flow characteristics of the financial asset. Investments in equity
instruments are always measured at fair value through profit or loss with an
irrevocable option at inception to present changes in fair value in OCI (provided the
instrument is not held for trading).
A debt instrument is measured at amortised cost only if the entity is holding it to collect
contractual cash flows and the cash flows represent principal and interest.
For liabilities, the standard retains most of the MFRS 139 requirements. These include
amortised cost accounting for most financial liabilities, with bifurcation of embedded
derivatives. The main change is that, in cases where the fair value option is taken for
financial liabilities, the part of a fair value change due to an entity’s own credit risk is
recorded in other comprehensive income rather than the income statement, unless this
creates an accounting mismatch.
MFRS 9 introduces an expected credit loss model on impairment that replaces the
incurred loss impairment model used in MFRS 139. The expected credit loss model is
forward-looking and eliminates the need for a trigger event to have occurred before
credit losses are recognised.
The Fund will apply the standards when effective. The standards are not expected to have a
significant impact on the Fund’s financial statements.
15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
B
INCOME RECOGNITION
Dividend income is recognised on the ex-dividend date, when the right to receive the dividend has been
established.
Interest income from short term deposits with licensed financial institutions, unquoted fixed income securities
and unquoted credit linked investment contracts are recognised based on effective interest rate method on
an accrual basis.
For quoted equities, realised gains and losses on sale of investments are accounted for as the difference
between the net disposal proceeds and the carrying amount of investments, determined on a weighted
average cost basis.
For unquoted fixed income securities and unquoted negotiable instruments of deposits, realised gains and
losses on sale of investments are accounted for as the difference between the net disposal proceeds and the
carrying amount of investments, determined on cost adjusted for accretion of discount or amortisation of
premium on investments.
For unquoted credit linked investment contracts, realised gains and losses on sale of investments are
accounted for as the difference between the net disposal proceeds and the carrying amount of investments,
determined on cost.
For collective investment schemes (“CIS”), realised gains and losses on sale of investments are accounted
for as the difference between the net disposal proceeds and the carrying amount of the investments,
determined on a weighted average cost basis.
C
DIVIDEND DISTRIBUTION
A distribution to the Fund’s unitholders is accounted for as a deduction from realised reserve. A proposed
distribution is recognised as a liability in the period in which it is approved by the Trustee of the Fund.
D
TRANSACTION COSTS
Transaction costs are costs incurred to acquire financial assets or liabilities at fair value through profit or loss.
They include the bid-ask spread, fees and commissions paid to agents, advisors, brokers and dealers.
Transaction costs, when incurred, are immediately recognised in the statement of comprehensive income as
expenses.
E
TAXATION
Current tax expense is determined according to the Malaysian tax laws at the current rate based upon the
taxable profits earned during the financial year.
Tax on investment income from foreign investments is based on the tax regime of the respective countries
that the Fund invests in.
16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
F
FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the financial statements of the Fund are measured using the currency of the primary
economic environment in which the Fund operates (the “functional currency”). The financial statements are
presented in Ringgit Malaysia, which is the Fund’s functional and presentation currency.
G
FOREIGN CURRENCY TRANSLATION
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and
losses resulting from the settlement of such transactions and from the translation at period-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognised in statement of
comprehensive income, except when deferred in other comprehensive income as qualifying cash flow
hedges.
H
FINANCIAL ASSETS AND FINANCIAL LIABILITES
(i)
Classification
The Fund designates its investment in quoted equities, unquoted fixed income securities, unquoted
credit linked investment contracts and collective investment schemes as financial assets at fair value
through profit or loss at inception.
Financial assets are designated at fair value through profit or loss when they are managed and their
performance evaluated on a fair value basis.
Derivatives are financial assets/ liabilities at fair value through profit or loss categorised as held for
trading unless they are designated hedges (Note M).
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and have been included in current assets. The Fund’s loans and
receivables comprise cash and cash equivalents, dividend receivables, amount due from Manager
and amount due from brokers.
Financial liabilities are classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability.
The Fund classifies amount due to Manager, amount due to Trustee, amount due to brokers,
auditors’ remuneration, tax agent’s fee and other payables and accruals as other financial liabilities.
17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
H
FINANCIAL ASSETS AND FINANCIAL LIABILITES (CONTINUED)
(ii)
Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade-date – the date on
which the Fund commits to purchase or sell the asset. Investments are initially recognised at fair
value. Transaction costs are expensed in the statement of comprehensive income.
Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial
position when, and only when, the Fund becomes a party to the contractual provisions of the financial
instrument.
Financial assets are derecognised when the rights to receive cash flows from the investments have
expired or have been transferred and the Fund has transferred substantially all risks and rewards of
ownership.
Financial liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the
contract is discharged or cancelled or expired.
Gain or losses arising from changes in the fair value of the ‘financial assets at fair value through profit
or loss’ category including the effects of currency transaction are presented in the statement of
comprehensive income within ‘net gain/(loss) on financial assets at fair value through profit or loss’ in
the financial period which they arise.
Dividend income from financial assets at fair value through profit or loss is recognised in the
statement of comprehensive income as part of gross dividend income when the Fund’s right to
receive payments is established.
If a valuation based on the market price does not represent the fair value of the securities, for
example during abnormal market conditions or when no market price is available, including in the
event of a suspension in the quotation of the securities for a period exceeding 14 days, or such
shorter period as agreed by the Trustee, then the securities are valued as determined in good faith by
the Manager, based on the methods or basis approved by the Trustee after appropriate technical
consultation.
Unquoted fixed income securities denominated in Ringgit Malaysia are revalued on a daily basis
based on fair value prices quoted by a bond pricing agency (“BPA”) registered with the SC as per the
SC Guidelines on Unit Trust Funds. Where such quotation are not available or where the Manager is
of the view that the price quoted by the BPA for a specific unquoted fixed income securities differs
from the market price by more than 20 basis points, the Manager may use the market price, provided
that the Manager:
(i)
(ii)
(iii)
records its basis for using non-BPA price;
obtains necessary internal approvals to use the non-BPA price; and
keeps an audit trail of all decisions and basis for adopting the market yield.
Unquoted fixed income securities denominated in foreign currencies are revalued at least twice a
week by reference to the mid-price quoted in Bloomberg. We use the Composite Bloomberg Bond
Trader (CBBT) which is a weighted average bid and ask of price contributions submitted by
Bloomberg Dealers. However if such quotations are not available, the fair value shall be determined
by reference to the bid and offer prices quoted by independent and reputable financial institutions.
18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
H
FINANCIAL ASSETS AND FINANCIAL LIABILITES (CONTINUED)
(ii)
Recognition and measurement (continued)
Valuation of the investment in unquoted credit linked investment contracts is based on amount as
stated in the contract between issuers and the Manager. Valuation provided by issuers is then
compared against the Manager’s valuation determined by using a valuation model, which is based on
independently sourced observable or implied market data, mainly interest rate yield curves, recent
market transactions, foreign exchange rates and market volatility.
Investment in collective investment schemes is valued at the last published net asset value (“NAV”)
per unit at the date of the statement of financial position.
Deposits with licensed financial institutions are stated at cost plus accrued interest calculated on the
effective interest method over the period from the date of placement to the date of maturity of the
deposits.
Loans and receivables and other financial liabilities are subsequently carried at amortised cost using
the effective interest method.
For assets carried at amortised cost, the Fund assesses at the end of the reporting period whether
there is objective evidence that a financial asset or group of financial assets is impaired. A financial
asset or a group of financial assets is impaired and impairment losses are incurred only if there is
objective evidence of impairment as a result of one or more events that occurred after the initial
recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or group of financial assets that can be reliably
estimated.
The amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been
incurred) discounted at the financial asset’s original effective interest rate. The asset’s carrying
amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If ‘loans and
receivables’ or a ‘held-to-maturity investment’ has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective interest rate determined under the contract.
As a practical expedient, the Fund may measure impairment on the basis of an instrument’s fair
value using an observable market price.
If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised (such as an
improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss
is recognised in statement of comprehensive income.
When an asset is uncollectible, it is written off against the related allowance account. Such assets
are written off after all the necessary procedures have been completed and the amount of the loss
has been determined.
19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
I
CASH AND CASH EQUIVALENTS
For the purpose of statement of cash flows, cash and cash equivalents comprise cash and bank balances
and deposits held in highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of change in value.
J
AMOUNTS DUE FROM/ (TO) BROKERS
Amounts due from and to brokers represent receivables for securities sold and payables for securities
purchased that have been contracted for but not yet settled or delivered on the statement of financial position
date respectively.
These amounts are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment for amounts due from brokers. A provision for
impairment of amount due from brokers is established when there is objective evidence that the Fund will not
be able to collect all amounts due from the relevant broker.
Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from brokers is
impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an
impairment loss, interest income is recognised using the rate of interest used to discount the future cash
flows for the purpose of measuring the impairment loss.
The effective interest method is a method of calculating the amortised cost of a financial asset or financial
liability and of allocating the interest income or loans expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life
of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount of the financial
asset or financial liability. When calculating the effective interest rate, the Fund estimates cash flows
considering all contractual terms of the financial instrument but does not consider future credit losses. The
calculation includes all fees and points paid or received between parties to the contract that are an integral
part of the effective interest rate, transaction costs and all other premiums or discounts.
K
UNIT HOLDERS’ CAPITAL
The unit holders’ contributions to the Fund meet the criteria to be classified as equity instruments under
MFRS 132 “Financial Instruments: Presentation”. Those criteria include:
•
the units entitle the holder to a proportionate share of the Fund’s net assets value;
•
the units are the most subordinated class and class features are identical;
•
there is no contractual obligations to deliver cash or another financial asset other than the obligation
on the Fund to repurchase; and
•
the total expected cash flows from the units over its life are based substantially on the profit or loss of
the Fund.
The outstanding units are carried at the redemption amount that is payable at each financial year if unit holder
exercises the right to put the unit back to the Fund.
Units are created and cancelled at prices based on the Fund’s net asset value per unit at the time of creation
or cancellation. The Fund’s net asset value per unit is calculated by dividing the net assets attributable to unit
holders with the total number of outstanding units.
20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
L
SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting used by the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the strategic asset allocation
committee of the Manager that makes strategic decisions.
M
DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument is any contract that gives rise to both a financial asset of one enterprise and
a financial liability or equity instrument of another enterprise.
A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from
another enterprise, a contractual right to exchange financial instruments with another enterprise under
conditions that are potentially favourable, or an equity instrument of another enterprise.
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to
another enterprise, or to exchange financial instruments with another enterprise under conditions that are
potentially unfavourable.
The Fund’s derivative financial instruments comprise forward currency contracts. Derivatives are initially
recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at
their fair value.
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the date
of statements of financial position with the resulting value discounted back to present value.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a
hedging instrument, and the nature of the item being hedged. Derivatives that do not qualify for hedge
accounting are classified as held for trading and accounted for in accordance with the accounting policy set
out in Note H.
N
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
The preparation of financial statements in conformity with the Malaysian Financial Reporting Standards
requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities as at
the date of the financial statements and the reported amounts of revenues and expenses during the financial
period. Although these estimates are based on the Manager’s best knowledge of current events and actions,
actual results could differ from those estimates.
The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, rarely equal the related actual results. To enhance the information contents on the estimates,
certain key variables that are anticipated to have material impacts to the Fund’s results and financial position
are tested for sensitivity to changes in the underlying parameters.
Estimates and judgements are continually evaluated by the Manager and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
21
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
1
INFORMATION ON THE FUND
The Unit Trust Fund was constituted under the name Hwang Select Income Fund (the “Fund”) pursuant to
the execution of a Deed dated 9 December 2004. The Fund has changed its name from First Supplemental
Deed dated 16 November 2005, Second Supplemental Deed dated 18 June 2007, Third Supplemental Deed
dated 15 October 2008 and Fourth Supplemental Deed dated 18 January 2012 and from Hwang Select
Income Fund to Affin Hwang Select Income Fund as amended by Fifth Supplemental Deed dated 27 June
2014 (the “Deeds”) entered into between Affin Hwang Asset Management Berhad (the “Manager”) and HSBC
(Malaysia) Trustee Berhad (the “Trustee”).
The Fund was launched on 6 January 2005 and will continue its operations until being terminated by the
Trustee as provided under Clause 3.1 of the Deed.
The Fund may invest in securities traded on Bursa Malaysia Securities Berhad and other market considered
as eligible market, collective investment schemes, unlisted securities, futures contracts and any other
investments approved by the SC from time to time.
All investments will be subjected to the SC Guidelines on UTF, the Deeds and the objective of the Fund.
The main objective of the Fund is to seek steady and regular income stream in the form of distributions over
the medium to long term through investment primarily in equity and fixed income instruments.
The Manager is a company incorporated in Malaysia. The principal activities of the Manager are
establishment and management of unit trust funds and private retirement schemes as well as providing fund
management services to private clients.
The financial statements were authorised for issue by the Manager on 21 April 2016.
22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES
Financial instruments are as follows:
Note
29.2.2016
Quoted equities
Unquoted fixed income securities
Collective investment schemes
Cash and cash equivalents
Dividend receivables
Amount due from Manager
- creation of units
Amount due from brokers
Interest rate swaps
Forward foreign currency contracts
9
9
9
10
11
12
Total
Loans and
receivables
RM
Financial
assets/
(liabilities)
at fair
value through
profit or loss
RM
Total
RM
95,201,887
215,842
260,202,607
956,449,637
20,566,590
-
260,202,607
956,449,637
20,566,590
95,201,887
215,842
(5,042,195)
13,950,154
──────────
1,246,126,793
══════════
3,379,382
8,809,170
(5,042,195)
13,950,154
──────────
1,353,733,074
══════════
215,710,038
787,602,886
3,497,090
-
215,710,038
787,602,886
3,497,090
66,717,878
72,498
(174,819)
(9,518,717)
──────────
997,116,478
══════════
1,253,530
12,678,263
(174,819)
(9,518,717)
──────────
1,077,838,647
══════════
3,379,382
8,809,170
──────────
107,606,281
══════════
31.12.2014
Quoted equities
Unquoted fixed income securities
Unquoted credit linked investment
Cash and cash equivalents
Dividend receivables
Amount due from Manager
- creation of units
Amount due from brokers
Interest rate swaps
Forward foreign currency contracts
Total
9
9
9
10
11
12
66,717,878
72,498
1,253,530
12,678,263
──────────
80,722,169
══════════
All current liabilities, except forward foreign currency contracts and interest rate swaps, are financial liabilities
which are carried at amortised cost.
The Fund is exposed to a variety of risks which include market risk (including price risk, interest rate risk,
currency risk), credit risk, liquidity risk and capital risk.
Financial risk management is carried out through internal control processes adopted by the Manager and
adherence to the investment restrictions as stipulated by the SC’s Guidelines on Unit Trust Funds.
23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Market risk
(a) Price risk
Price risk arises mainly from the uncertainty about future prices of investments. It represents the
potential loss the Fund might suffer through holding market positions in the face of price movements.
The Manager manages the risk of unfavourable changes in prices by continuous monitoring of the
performance and risk profile of the investment portfolio.
The Fund’s overall exposure to price risk was as follows:
29.2.2016
RM
31.12.2014
RM
Quoted investment
Quoted equities designated at fair
value through profit or loss
260,202,607 215,710,038
══════════ ══════════
Unquoted investments *
Unquoted fixed income securities designated
at fair value through profit or loss
Unquoted credit linked investment contract
designated at fair value through profit or loss
956,449,637
787,602,886
3,497,090
────────── ──────────
956,449,637 791,099,976
══════════ ══════════
Collective investment schemes
Collective investment schemes designated at fair
at fair value through profit or loss
*
20,566,590
══════════ ══════════
Include interest receivable RM14,227,620 (31.12.2014: RM7,861,622)
24
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Market risk (continued)
(a)
Price risk (continued)
The following table summarises the sensitivity of the Fund’s profit after taxation and net asset value
to price risk movement. The analysis is based on the assumptions that the market price increased by
5% and decreased by 5% with all other variables held constant. This represents management’s best
estimate of a reasonable possible shift in the quoted securities having regard to the historical volatility
of the prices.
% Change in price
Market value
RM
Impact on
profit after
tax/NAV
RM
1,161,841,653
1,222,991,214
1,284,140,775
══════════
(61,149,561)
61,149,561
══════════
949,000,972
998,948,392
1,048,895,812
══════════
(49,947,420)
49,947,420
══════════
29.2.2016
-5%
0%
+5%
31.12.2014
-5%
0%
+5%
(b)
Interest rate risk
In general, when interest rates rise, unquoted fixed income securities prices will tend to fall and vice
versa. Therefore, the NAV of the Fund may also tend to fall when interest rates rise or are expected
to rise. However, investors should be aware that should the Fund hold an unquoted fixed income
securities until maturity, such price fluctuations would dissipate as it approaches maturity, and thus
the growth of the NAV shall not be affected at maturity. In order to mitigate interest rates exposure of
the Fund, the Manager will manage the duration of the portfolio via shorter or longer tenured assets
depending on the view of the future interest rate trend of the Manager, which is based on its
continuous fundamental research and analysis.
This risk is crucial in an unquoted fixed income securities fund since unquoted fixed income
securities portfolio management depends on forecasting interest rate movements. Prices of
unquoted fixed income securities move inversely to interest rate movements, therefore as interest
rates rise, the prices of unquoted fixed income securities decrease and vice versa. Furthermore,
unquoted fixed income securities with longer maturity and lower yield coupon rates are more
susceptible to interest rate movements.
25
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Market risk (continued)
(b)
Interest rate risk (continued)
Investors should note that unquoted fixed income securities, unquoted credit linked investment
contracts and money market instruments are subject to interest rate fluctuations. Such investments
may be subject to unanticipated rise in interest rates which may impair the ability of the issuers to
make payments of interest income and principal, especially if the issuers are highly leveraged. An
increase in interest rates may therefore increase the potential for default by an issuer.
The table below summarises the sensitivity of the Fund’s profit after taxation and NAV to movements
in prices of unquoted fixed income securities held by the Fund as a result of movement in interest
rate. The analysis is based on the assumptions that the interest rate increased and decreased by 1%
(100 basis points) with all other variables held constant.
Impact on profit after tax/ NAV
29.2.2016
31.12.2014
RM
RM
% Change in interest rate
+ 1%
- 1%
(1,906,371)
1,930,544
══════════
(2,833,603)
2,858,549
══════════
The Fund’s exposure to interest rate risk associated with deposits with licensed financial institutions
is not material as the carrying value of the deposits is held on a short term basis.
(c)
Currency risk
Currency risk is associated with investments denominated in foreign currencies. When the foreign
currencies fluctuate in an unfavourable movement against Ringgit Malaysia, the investments will face
currency losses in addition to the capital gain/ (loss). The Manager will evaluate the likely directions
of the foreign currency versus Ringgit Malaysia based on considerations of economic fundamentals
such as interest rate differentials, balance of payments position, debt levels and technical chart
considerations.
26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
(c)
Currency risk (continued)
The following table sets out the foreign currency risk concentrations and counterparties of the Fund:
Quoted
equities
RM
Unquoted
fixed
income
securities
RM
Forward
foreign
currency
contracts
RM
Interest
rate swaps
RM
Cash
and cash
equivalents
RM
Other
assets*/
(liabilities)**
RM
Total
RM
29.2.2016
Australian Dollar
Chinese Yuan
Euro
Hong Kong Dollar
Indonesian Rupiah
Korean Won
Philippine Peso
Singapore Dollar
Thailand Baht
United States Dollar
11,867,196
(179,741)
9,310,596
(6,869,313) 14,128,738
15,427,917
39,632
15,467,549
2,346,113
73,152
325
2,419,590
93,012,167
19,689,302
60,477 112,761,946
34,024,898
41,183,762
75,208,660
12,241,452
107,239
12,348,691
10,139,014
10,139,014
22,742,997 103,024,096
2,578,610
3,389,149
(2,787,395) 128,947,457
16,500,747
16,500,747
12,017,526 612,229,218
11,478,133
(5,042,195) 14,425,039
557,100 645,664,821
────────── ────────── ────────── ────────── ────────── ────────── ──────────
200,678,801 786,078,302
13,950,154
(5,042,195) 46,854,043
(8,931,892)1,033,587,213
══════════ ══════════ ══════════ ══════════ ══════════ ══════════ ══════════
*
Other assets consist of dividend receivables and amount due from brokers.
**
Other liabilities consist of amount due to brokers.
27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
(c)
Currency risk (continued)
The following table sets out the foreign currency risk concentrations and counterparties of the Fund
(continued):
Quoted
equities
RM
Unquoted
fixed
income
securities
RM
Forward
foreign
currency
contracts
RM
Interest
rate swaps
RM
Cash
and cash
equivalents
RM
Other
assets*
RM
Total
RM
31.12.2014
Australian Dollar
Hong Kong Dollar
Indonesian Rupiah
Korean Won
Philippine Peso
Singapore Dollar
Thailand Baht
United States Dollar
*
49,965,085
633,068
193,270
50,791,423
26,948,643
17,110,809
44,059,452
18,912,894
33,248,678
35
52,161,607
23,714,466
23,714,466
18,115,655
18,115,655
25,913,321 103,863,630
(957,311)
- 128,819,640
13,759,160
72,498
13,831,658
8,173,089 465,402,427
(9,194,474)
(174,819) 39,317,374
- 503,523,597
────────── ────────── ────────── ────────── ────────── ────────── ──────────
135,537,228 652,479,820
(9,518,717)
(174,819) 56,621,488
72,498 835,017,498
══════════ ══════════ ══════════ ══════════ ══════════ ══════════ ══════════
Other assets consist of dividend receivables and amount due from brokers.
28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Market risk (continued)
(c)
Currency risk (continued)
The table below summarises the sensitivity of the Fund's profit after tax and net asset value to
changes in foreign exchange movements. The analysis is based on the assumption that the foreign
exchange rate changes by 5%, with all other variables remain constants. This represents
management's best estimate of a reasonable possible shift in the foreign exchange rate, having
regard to historical volatility of this rate. Any increase/(decrease) in foreign exchange rate will result in
a corresponding (decrease)/increase in the net assets attributable to unitholders by approximately
5%. Disclosures below are shown in absolute terms, changes and impacts could be positive or
negative.
29.2.2016
Australian Dollar
Chinese Yuan
Euro
Hong Kong Dollar
Indonesian Rupiah
Korean Won
Philippine Peso
Singapore Dollar
Thailand Baht
United States Dollar
Change
in price
%
Impact on
profit after
tax/NAV
RM
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 706,437
+/- 773,377
+/- 120,980
+/- 5,638,097
+/- 3,760,433
+/- 617,435
+/- 506,951
+/- 6,447,373
+/- 825,037
+/- 32,283,241
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 5
+/- 2,539,571
+/- 2,202,973
+/- 2,608,080
+/- 1,185,723
+/- 905,783
+/- 6,440,982
+/- 691,583
+/- 25,176,180
31.12.2014
Australian Dollar
Hong Kong Dollar
Indonesian Rupiah
Korean Won
Philippine Peso
Singapore Dollar
Thailand Baht
United States Dollar
29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Credit risk
Credit risk refers to the ability of an issuer or counterparty to make timely payments of interest, principals and
proceeds from realisation of investment. The Manager manages the credit risk by undertaking credit
evaluation to minimise such risk.
The settlement terms of amount due from brokers are governed by the relevant rules and regulations as
prescribed by the respective stock exchanges.
Credit risk arising from placements of deposits in licensed financial institutions is managed by ensuring that
the Fund will only place deposits in reputable licensed financial institutions.
For unquoted fixed income securities, the manager regularly reviews the rating assigned to the issuer so that
necessary steps can be taken if the rating falls below those described by the Deeds and Securities
Commission’s Guidelines on Unit Trust Funds.
The settlement terms of the proceeds from the creation of unit’s receivable from the Manager are governed
by the Securities Commission’s Guidelines on Unit Trust Funds.
The following table sets out the credit risk concentrations and counterparties of the Fund:
Unquoted
fixed
income
securities
RM
Forward
foreign
currency
contracts
RM
Interest
rate swaps
RM
Cash
and cash
equivalents
RM
Other
assets*
RM
Total
RM
4,218,831
10,162,900
17,707,885
10,084,547
19,756,399
11,356,085
67,895,456
25,595,641
-
-
-
167,716
4,218,831
10,162,900
17,707,885
10,084,547
19,756,399
11,356,085
67,895,456
25,763,357
4,814,337
7,052,859
3,231,707
73,857,113
18,432,882
21,539,890
25,181,969
22,235,515
10,815,595
9,991,453
17,345,951
35,837,216
23,579,126
12,892,267
13,480,471
54,531,157
902,475
1,501,436
1,388,716
7,076,075
-
95,201,887
-
-
4,814,337
7,052,859
3,231,707
73,857,113
19,335,357
23,041,326
26,570,685
119,471,282
10,815,595
9,991,453
17,345,951
35,837,216
23,579,126
12,892,267
13,480,471
54,531,157
29.2.2016
Consumer
products
- A1
- AA1
- AA2
- AAA
- B2
- Ba3
- Baa3
- NA
Financials
-A
- A- A1
- A3
- AA1
- AA2
- AA3
- AAA
- B+
- B1
- Ba1
- Ba2
- Ba3
- Baa1
- Baa2
- Baa3
(5,042,195)
-
30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Credit risk (continued)
The following table sets out the credit risk concentrations and counterparties of the Fund (continued):
Unquoted
fixed
income
securities
RM
Forward
foreign
currency
contracts
RM
Interest
rate swaps
RM
Cash
and cash
equivalents
RM
Other
assets*
RM
Total
RM
Financials (continued)
- BB+
4,476,891
- BBB+
33,583,234
- NA
110,923,030
Industrials
3,081,452
-
-
-
4,476,891
33,583,234
114,004,482
-
-
-
-
11,369,448
10,084,945
2,346,113
18,818,098
128,461,349
-
-
-
-
27,830,969
26,783,713
8,551,996
-
-
-
291,557
291,557
-
-
-
557,908
557,908
-
-
-
-
3,204,044
12,883,795
16,485,269
3,002,388
16,047,103
────────── ────────── ──────────
13,950,154
(5,042,195)
95,201,887
══════════ ══════════ ══════════
11,387,213
──────────
12,404,394
══════════
11,387,213
──────────
1,072,963,877
══════════
29.2.2016 (continued)
- A3
11,369,448
- AA10,084,945
- Baa2
2,346,113
- Baa3
18,818,098
- NA
128,461,349
Oil & Gas
- AA3
27,830,969
- Baa3
26,783,713
- NA
8,551,996
- A3
REITs
- NA
Telecommunications
- NA
Utilities
- A1
3,204,044
- A3
12,883,795
- AA16,485,269
- AA1
3,002,388
- Baa3
16,047,103
Others
- NA
──────────
956,449,637
══════════
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Credit risk (continued)
The following table sets out the credit risk concentrations and counterparties of the Fund (continued):
Unquoted
fixed
income
securities
RM
Unquoted
credit linked
investment
contracts
RM
Forward
foreign
currency
contracts
RM
24,215,348
5,061,899
9,831,556
14,645,705
38,870,815
4,310,006
119,252,524
3,497,090
-
4,570,469
13,691,464
5,670,118
45,485,355
31,658,126
36,723,271
25,244,390
23,863,201
10,125,513
8,949,956
24,842,440
21,085,002
13,650,443
13,876,477
25,787,737
21,303,603
59,118,094
-
6,469,932
10,368,238
-
-
-
24,711,416
12,637,044
7,410,945
20,289,579
5,026,966
47,211,015
-
-
13,889,608
3,488,169
7,694,431
-
-
Cash
Interest
and cash
rate swaps equivalents
RM
RM
Other
assets*
RM
Total
RM
-
9,422,107
24,215,348
5,061,899
9,831,556
14,645,705
38,870,815
4,310,006
132,171,721
5,008,219
(174,819) 61,709,659
-
3,256,156
4,570,469
13,691,464
5,670,118
45,485,355
31,658,126
34,303,691
25,244,390
28,871,420
65,885,104
8,949,956
24,842,440
21,085,002
13,650,443
13,876,477
25,787,737
21,303,603
61,050,362
-
-
6,469,932
10,368,238
-
-
72,498
24,711,416
12,637,044
7,410,945
20,289,579
5,026,966
47,283,513
-
-
-
13,889,608
3,488,169
7,694,431
31.12.2014
Consumer
products
- A1
- AA2
- AAA
- Ba2
- Baa3
- BB- NA
Financials
-A
- A- A1
- A2
- A3
- AA1
- AA2
- AA3
- AAA
- B+
- Ba1
- Ba3
- Baa1
- Baa2
- Baa3
- BBB+
- NA
Government
- Baa2
- Baa3
Industrials
- A3
- AA- AA+
- AA2
- AAA
- NA
Oil & Gas
- AA3
- Baa3
- NA
(2,419,580)
(5,775,249)
(1,323,888)
32
-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Credit risk (continued)
The following table sets out the credit risk concentration of the Fund (continued):
Unquoted
fixed
income
securities
RM
Unquoted
credit linked
investment
contracts
RM
Forward
foreign
currency
contracts
RM
-
-
Cash
Interest
and cash
rate swaps equivalents
RM
RM
Other
assets*
RM
Total
RM
-
14,180,825
12,391,206
31.12.2014 (continued)
Utilities
- A3
- AA3
Others
- NA
14,180,825
12,391,206
──────────
787,602,886
══════════
-
-
1,253,530
1,253,530
────────── ──────── ───────── ───────── ───────── ──────────
3,497,090
(9,518,717)
(174,819) 66,717,878 14,004,291 862,128,609
══════════ ════════ ═════════ ═════════ ═════════ ══════════
* Other assets consist of dividend receivables, amount due from Manager and amount due from brokers.
The financial assets of the Fund are neither past due nor impaired.
33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Liquidity risk
Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial obligations. The Manager
manages this risk by maintaining sufficient level of liquid assets to meet anticipated payments and
cancellation of units by unitholders. Liquid assets comprise cash, deposits with licensed financial institutions
and other instruments, which are capable of being converted into cash within 7 days.
The table below analyses the Fund’s financial liabilities into relevant maturity groupings based on the
remaining period at the statement of financial position date to the contractual maturity date.
The amounts in the table below are the contractual undiscounted cash flows.
29.2.2016
Amount due to Manager
- management fee
Amount due to Trustee
Amount due to brokers
Auditors’ remuneration
Tax agent’s fee
Other payables and accruals
Interest rate swap at fair value
through profit or loss
Within
one month
RM
Between
one month
to one year
RM
Total
RM
1,560,421
73,576
10,432,082
107,689
8,151
4,134
44,988
1,560,421
73,576
10,432,082
8,151
4,134
152,677
──────────
12,173,768
══════════
5,042,195
──────────
5,099,468
══════════
5,042,195
──────────
17,273,236
══════════
1,100,820
643,568
64,214
-
7,000
3,550
19,000
1,100,820
643,568
64,214
7,000
3,550
19,000
2,838,653
6,680,064
9,518,717
──────────
4,647,255
══════════
174,819
──────────
6,884,433
══════════
174,819
──────────
11,531,688
══════════
31.12.2014
Amount due to Manager
- management fee
- cancellation of units
Amount due to Trustee
Auditors’ remuneration
Tax agent’s fee
Other payables and accruals
Forward foreign currency contracts
at fair value through profit or loss
Interest rate swap at fair value
through profit or loss
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Capital risk
The capital of the Fund is represented by equity consisting of unitholders’ capital and retained earnings. The
amount of equity can change significantly on a daily basis as the Fund is subject to daily subscriptions and
redemptions at the discretion of unitholders. The Fund’s objective when managing capital is to safeguard the
Fund’s ability to continue as a going concern in order to provide returns for unitholders and benefits for other
stakeholders and to maintain a strong capital base to support the development of the investment activities of
the Fund.
3
FAIR VALUE ESTIMATION
Financial instruments comprise financial assets and financial liabilities. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date.
The fair value of financial assets traded in active markets (such as trading securities) is based on quoted
market prices at the close of trading on the year end date. The Fund utilises the current bid price for financial
assets which falls within the bid-ask spread.
An active market is a market in which transactions for the asset take place with sufficient frequency and
volume to provide pricing information on an ongoing basis.
The fair value of financial assets that are not traded in an active market is determined by using valuation
techniques.
(i)
Fair value hierarchy
The table below analyses financial instruments carried at fair value. The different levels have been
defined as follows:
•
•
•
Quoted prices (unadjusted) in active market for identical assets or liabilities (Level 1)
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2)
Inputs for the asset and liability that are not based on observable market data (that is, unobservable
inputs) (Level 3)
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is
determined on the basis of the lowest level input that is significant to the fair value measurement in its
entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its
entirety. If a fair value measurement uses observable inputs that require significant adjustment based on
unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular
input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset
or liability.
The determination of what constitutes ‘observable’ requires significant judgment by the Fund. The Fund
considers observable data to be that market data that is readily available, regularly distributed or updated,
reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the
relevant market.
35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
3
FAIR VALUE ESTIMATION (CONTINUED)
(i)
Fair value hierarchy (continued)
The following table analyses within the fair value hierarchy the Fund’s financial assets (by class)
measured at fair value:
29.2.2016
Financial assets at fair value
through profit or loss
- quoted equities
- unquoted fixed income
securities
- collective investment schemes
- forward foreign currency
contracts
Financial liabilities at fair value
through profit or loss
- interest rate swaps
Level 1
RM
Level 2
RM
Level 3
RM
Total
RM
260,202,607
-
-
260,202,607
20,566,590
956,449,637
-
-
956,449,637
20,566,590
──────────
280,769,197
══════════
13,950,154
──────────
970,399,791
══════════
══════════
(5,042,195)
══════════ ══════════
13,950,154
────────── ──────────
- 1,251,168,988
══════════ ══════════
(5,042,195)
══════════
31.12.2014
Financial assets at fair value
through profit or loss
- quoted securities
- unquoted fixed income
securities
- unquoted credit linked
investment contracts
Financial liabilities at fair value
through profit or loss
- forward foreign currency
contracts
- interest rate swaps
215,710,038
-
-
215,710,038
-
787,602,886
-
787,602,886
──────────
215,710,038
══════════
──────────
787,602,886
══════════
──────────
══════════
(9,518,717)
(174,819)
────────── ──────────
(9,693,536)
══════════ ══════════
36
3,497,090
3,497,090
────────── ──────────
3,497,090 1,006,810,014
══════════ ══════════
(9,518,717)
(174,819)
──────────
(9,693,536)
══════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
3
FAIR VALUE ESTIMATION (CONTINUED)
(i)
Fair value hierarchy (continued)
Financial instruments that trade in markets that are considered to be active but are valued based on
quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs
are classified within Level 2. These include unquoted fixed income securities, forward foreign currency
contracts and interest rate swaps. As Level 2 instruments include positions that are not traded in active
markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or
non-transferability, which are generally based on available market information.
Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently.
Level 3 instruments include credit linked investment contracts. As observable prices are not available
for these securities, the Fund has used valuation techniques to derive the fair value.
There are two methods the issuers use to determine valuations for unquoted credit linked investments
that the fund invests in. Issuers who originate unquoted credit linked investments directly by
themselves, would utilise risk management models based on probability testing. Such models utilise
market observable input factors such as interest rate levels, remaining time to maturity and underlying
credit spread or Credit Default Swap spread against benchmark treasury yields, historical volatility; and
combine them with the issuer’s own assumptions such as expected future level of correlation between
the price movements of the various underlying factors. These market observable quantitative inputs
and in-house assumptions are then typically put through a random process and simulated multiple
times to create a sufficiently large sample size whereby the issuer is able to arrive at a meaningful
average level which is used as the mark to market valuation for the unquoted credit linked investments.
Such risk management models are audited by the respective issuer's internal and audits and are
approved by their respective risk committees. The models themselves are maintained by a separate
team from the issuer’s structures and traders of the unquoted credit-linked investment contracts in
order to ensure fairness and accuracy in valuations.
The Fund also invests in unquoted credit linked investments that are issued by issuers who do not
originate them directly but repackage the underlying investments and reissue out. For such issuers,
valuation of unquoted credit linked investments are determined by attempting to obtain bid quotes from
issuers that originate such investments directly themselves. These quotes will be based on similar
terms as the contract in regards to the underlying reference entity, notional amounts, credit event
characteristics, coupon frequency, coupon amounts and maturity dates. Once the Issuer has received
these quotes, it will determine a notional price on the basis of weighted average of such quotes.
As a counter-check to either method of valuations, the Manager monitors the movement of the market
observable quantitative factors generally used. By this, the Manager is able to better determine the
degree of change in any particular factor (some which are likely to affect the mark to market valuation
of the unquoted credit linked investment contracts more than other factors, such as the change in
underlying credit spread or Credit Default Swap spread against benchmark treasury) and extrapolate it
against the mark to market valuations provided by the issuer to determine fairness.
37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
3
FAIR VALUE ESTIMATION (CONTINUED)
(i)
Fair value hierarchy (continued)
The sensitivity of fair value valuations for unquoted credit linked investments to non-market observable
factors are not static and can vary substantially depending on the issuers assumptions. As such, the
relative change in valuations of such unquoted credit linked investments can vary substantially higher
or lower as compared to relative movements of market observable factors. In order to better estimate
and monitor factors that are non-market observable, the Manager uses proxy factors, that are market
observable, to determine rates of change in values. For example, in terms of implied future correlation
level of underlying foreign exchange exposures, a proxy factor such as historical correlation levels
would be used to give a closer indication of changes in those assumptions used by the issuer.
The following table presents the movements in Level 3 instruments for the financial year ended 29
February 2016:
RM
Opening balance
Sales/reduction
Gain recognised in statement of comprehensive income
(ii)
4
3,497,090
(3,500,000)
2,910
──────────
══════════
The carrying values of cash and cash equivalents, dividend receivables, amount due from Manager,
amount due from brokers and all current liabilities except for forward foreign currency contracts and
interest rate swap are a reasonable approximation of the fair values due to their short term nature.
INTEREST INCOME
Interest income from:
- short term deposits
- unquoted fixed income securities
38
Financial
period from
1.1.2015
to 29.2.2016
RM
2014
RM
2,738,540
48,553,287
──────────
51,291,827
══════════
236,051
42,859,422
──────────
43,095,473
══════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
5
MANAGEMENT FEE
In accordance with the Deed, the Manager is entitled to a management fee at a rate not exceeding 3.00% per
annum on the NAV of the Fund calculated on a daily basis.
For the financial period ended 29 February 2016, the management fee is recognised at a rate of 1.50%
(2014: 1.20%) per annum on the NAV of the Fund calculated on a daily basis.
There will be no further liability to the Manager in respect of management fee other than the amounts
recognised above.
6
TRUSTEE FEE
In accordance with the Deed, the Trustee is entitled to an annual fee, inclusive of custodian fee, at a rate not
exceeding 0.30% per annum on the NAV of the Fund, subject to a minimum fee of RM18,000 per annum.
For the financial period ended 29 February 2016, the Trustee fee is recognised at a rate of 0.07% (2014:
0.07%) per annum on the net NAV of the Fund, inclusive of local custodian fee but exclusive of foreign subcustodian fee calculated on a daily basis.
There will be no further liability to the Trustee in respect of Trustee fee other than the amounts recognised
above.
39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
7
DISTRIBUTIONS
Financial
period from
1.1.2015
to 29.2.2016
RM
2014
RM
48,240,428
──────────
48,240,428
(6,552,888)
──────────
41,687,540
══════════
1,169,195
4,189,776
49,088,867
──────────
54,447,838
(9,421,588)
──────────
45,026,250
══════════
Gross/net distribution per unit (sen)
2.50
══════════
2.50
══════════
Ex date
24.03.2015
09.06.2015
08.09.2015
15.12.2015
══════════
18.03.2014
12.06.2014
15.09.2014
09.12.2014
══════════
Distributions to unitholders are from the following sources:
Gross dividend income
Interest income
Previous years’ realised income
Gross realised income
Less: Expenses
Net distribution amount
Gross distribution per unit is derived from gross realised income less expense divided by the number of units
in circulation, while net distribution per unit is derived from gross realised income less expenses and taxation
divided by the number of units in circulation.
Included in distribution for the financial year is an amount of RM48,240,428 (2014: RM49,088,867) made
from previous financial year’s realised income.
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
8
TAXATION
Current taxation:
- local
- foreign
Under accrual in prior financial years
Financial
period from
1.1.2015
to 29.2.2016
RM
2014
RM
25,985
1,034,047
──────────
1,060,032
══════════
879,623
280,852
──────────
1,160,475
══════════
The numerical reconciliation between net profit before taxation multiplied by the Malaysian statutory tax rate
and tax expense of the Fund is as follows:
Note
Net profit before taxation
Tax at Malaysian statutory tax rate of 24% (2014: 25%)
Tax effects of:
Investment income not subject to tax
Expenses not deductible for tax purposes
Restrictions on tax deductible expenses for unit trust funds
Foreign income subject to foreign tax rate
Income subject to different tax rate
Under accrual in prior financial years
Tax expense
9
Financial
period from
1.1.2015
to 29.2.2016
RM
2014
RM
65,919,314
──────────
94,090,136
──────────
15,820,635
23,522,534
(21,745,174)
1,700,840
4,223,699
1,034,047
25,985
──────────
1,060,032
══════════
(29,053,874)
1,578,261
3,875,544
879,623
77,535
280,852
──────────
1,160,475
══════════
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Designated at fair value through profit or loss at inception
- quoted equities – local
- quoted equities – foreign
- unquoted fixed income securities – local
- unquoted fixed income securities – foreign
- unquoted credit linked investment contracts – local
- collective investment schemes - local
41
29.2.2016
RM
31.12.2014
RM
59,523,806
200,678,801
170,371,335
786,078,302
20,566,590
──────────
1,237,218,834
══════════
80,172,810
135,537,228
135,123,066
652,479,820
3,497,090
──────────
1,006,810,014
══════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
Net gain on financial assets at fair value through profit or loss
- realised gain on sale of investments
- unrealised gain
(a)
29.2.2016
RM
31.12.2014
RM
96,942,423
4,931,983
──────────
101,874,406
══════════
60,528,643
18,073,895
──────────
78,602,538
══════════
Quoted equities – local
(i)
Quoted equities – local as at 29 February 2016 are as follows:
CONSUMER PRODUCTS
Esthetics International Group Berhad
Boustead Holdings Berhad
FINANCIALS
Allianz Malaysia Berhad
HEALTH CARE
Pharmaniaga Berhad
REITS
Sunway REIT
UTILITIES
Tenaga Nasional Berhad
Total quoted equities – local
Accumulated unrealised gain on
quoted equities – local
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
3,000,000
1,502,500
──────────
4,502,500
──────────
2,850,000
5,986,853
──────────
8,836,853
──────────
2,535,000
6,040,050
──────────
8,575,050
──────────
0.19
0.45
──────────
0.64
──────────
1,331,575
──────────
5,218,311
──────────
13,315,750
──────────
0.99
──────────
1,300,000
──────────
8,047,000
──────────
7,709,000
──────────
0.58
──────────
3,142,100
──────────
4,011,470
──────────
4,964,518
──────────
0.37
──────────
1,902,400
──────────
25,064,988
──────────
24,959,488
──────────
1.86
──────────
12,178,575
══════════
51,178,622
59,523,806
══════════
4.44
══════════
8,345,184
──────────
59,523,806
══════════
Total quoted equities – local
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(a)
Quoted equities - local (continued)
(ii)
Quoted equities – local as at 31 December 2014 are as follows:
FINANCIALS
Allianz Malaysia Berhad
Affin Holdings Berhad
Hong Leong Financial Group Berhad
IJM Land Berhad
INDUSTRIAL PRODUCTS
Westports Holdings Berhad
PLANTATIONS
IJM Plantations Berhad
TRADING & SERVICES
Boustead Holdings Berhad
REITS
Sunway REIT
Total quoted equities – local
Accumulated unrealised gain on
quoted equities – local
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
1,331,575
1,066,500
1,060,200
1,721,000
──────────
5,179,275
──────────
5,218,311
3,124,845
13,286,209
5,558,040
──────────
27,187,405
──────────
15,179,955
3,082,185
17,514,504
5,713,720
──────────
41,490,364
──────────
1.41
0.29
1.63
0.53
──────────
3.86
──────────
4,662,400
──────────
12,594,942
──────────
15,619,040
──────────
1.45
──────────
3,144,900
──────────
10,158,027
──────────
11,321,640
──────────
1.05
──────────
1,476,600
──────────
7,013,850
──────────
7,028,616
──────────
0.65
──────────
3,142,100
──────────
4,011,469
──────────
4,713,150
──────────
0.44
──────────
17,605,275
══════════
60,965,693
80,172,810
══════════
7.45
══════════
19,207,117
──────────
80,172,810
══════════
Total quoted equities – local
43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign
(i)
Quoted equities – foreign as at 29 February 2016 are as follows:
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
827,500
408,500
466,500
──────────
1,705,500
──────────
2,282,411
7,763,079
7,963,387
──────────
18,008,877
──────────
2,324,911
7,923,581
7,460,678
──────────
17,709,170
──────────
0.17
0.59
0.56
──────────
1.32
──────────
1,709,800
629,200
──────────
2,339,000
──────────
40,445,682
5,213,632
──────────
45,659,314
──────────
36,536,485
4,378,643
──────────
40,915,128
──────────
2.72
0.33
──────────
3.05
──────────
3,026,000
──────────
10,722,410
──────────
9,809,687
──────────
0.73
──────────
820,000
4,546,000
──────────
5,366,000
──────────
4,962,080
6,009,619
──────────
10,971,699
──────────
3,641,838
5,329,962
──────────
8,971,800
──────────
0.27
0.40
──────────
0.67
──────────
203,700
──────────
16,086,351
──────────
15,606,382
──────────
1.16
──────────
4,321,700
──────────
8,186,296
──────────
9,193,769
──────────
0.69
──────────
4,108,900
──────────
11,762,605
──────────
12,192,339
──────────
0.91
──────────
12,384,900
──────────
10,381,315
──────────
12,638,790
──────────
0.94
──────────
HONG KONG
CONSUMER PRODUCTS
Asiaray Media Group Ltd
MTR Corp Ltd
Techtronic Industries Co Ltd
FINANCIALS
AIA Group Ltd
Dah Sing Banking Group Ltd
HEALTH CARE
Harmonicare Medical Holdings Ltd
INDUSTRIALS
China Everbright International Ltd
CT Environment Group Ltd
TECHNOLOGY
Tencent Holdings Ltd
INDONESIA
CONSUMER PRODUCTS
PT Astra International Tbk
FINANCIALS
PT Bank Mandiri Persero Tbk
TELECOMMUNICATIONS
Telekomunikasi Indonesia TBK
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(i)
Quoted equities – foreign as at 29 February 2016 are as follows (continued):
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
55,571
1,523
──────────
57,094
──────────
8,269,784
5,326,536
──────────
13,596,320
──────────
7,786,956
4,454,496
──────────
12,241,452
──────────
0.58
0.33
──────────
0.91
──────────
1,027,610
──────────
5,274,180
──────────
5,426,130
──────────
0.41
──────────
15,034,800
──────────
6,339,212
──────────
4,712,884
──────────
0.35
──────────
3,452,000
223,400
──────────
3,675,400
──────────
9,387,938
1,293,905
──────────
10,681,843
──────────
7,742,146
1,272,645
──────────
9,014,791
──────────
0.58
0.09
──────────
0.67
──────────
192,800
──────────
7,899,472
──────────
7,823,771
──────────
0.58
──────────
1,390,467
──────────
4,696,752
──────────
5,904,435
──────────
0.44
──────────
2,313,400
──────────
12,018,332
──────────
11,786,426
──────────
0.88
──────────
100,300
──────────
2,292,426
──────────
4,714,321
──────────
0.35
──────────
KOREA
CONSUMER PRODUCTS
Kangwon Land Incorporation
LG Household & Health Care Ltd
PHILIPPINES
CONSUMER PRODUCTS
Robinsons Retail Holdings
Incorporation
FINANCIALS
Megaworld Corporation
SINGAPORE
CONSUMER PRODUCTS
Bumitama Agri Ltd
First Resources Ltd
FINANCIALS
DBS Group Holdings Ltd
REITS
CapitaLand Retail China Trust
THAILAND
CONSUMER PRODUCTS
CP ALL PCL
INDUSTRIALS
Airports of Thailand PCL
45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(i)
Quoted equities – foreign as at 29 February 2016 are as follows (continued):
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
41,568
──────────
12,576,737
──────────
12,017,526
──────────
0.90
──────────
57,286,139
──────────
207,154,141
200,678,801
──────────
14.96
──────────
UNITED STATED
CONSUMER PRODUCTS
Alibaba Group Holding Ltd
Total quoted investments – foreign
Accumulated unrealised loss on
quoted equities – foreign
(6,475,340)
──────────
200,678,801
──────────
Total quoted equities – foreign
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(ii)
Quoted equities – foreign as at 31 December 2014 are as follows:
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
706,000
──────────
10,053,515
──────────
13,685,386
──────────
1.27
──────────
5,658,000
──────────
11,987,102
──────────
13,263,257
──────────
1.23
──────────
20,615,900
──────────
9,586,393
──────────
4,592,810
──────────
0.43
──────────
1,026,100
──────────
6,693,881
──────────
7,205,069
──────────
0.67
──────────
8,821,870
──────────
6,497,191
──────────
7,115,015
──────────
0.66
──────────
38,004
9,109
26,810
──────────
73,923
──────────
7,548,721
7,602,523
6,854,268
──────────
22,005,512
──────────
9,145,282
7,345,498
7,223,686
──────────
23,714,466
──────────
0.85
0.68
0.67
──────────
2.20
──────────
9,776,647
3,152,639
──────────
12,929,286
──────────
9,423,379
3,178,136
──────────
12,601,515
──────────
0.88
0.30
──────────
1.18
──────────
5,311,057
──────────
5,514,140
──────────
0.51
──────────
HONG KONG
FINANCIALS
AIA Group Ltd
HEALTH CARE
Sihuan Pharmaceutical Holdings
Group Ltd
INDONESIA
CONSUMER PRODUCTS
PT Mitra Pinasthika Mustika
INDUSTRIALS
Indocement Tunggal Prakarsa
TELECOMMUNICATIONS
Telekomunikasi Indonesia TBK
KOREA
CONSUMER PRODUCTS
BGF Retail Co Ltd
Nongshim Co Ltd
Woongjin Coway Co Ltd
PHILIPPINES
DEVELOPMENT
Metro Pacific Investments Corporation 26,253,500
Megaworld Corporation
8,684,000
──────────
34,937,500
──────────
BANKS
Metropolitan Bank and Trust
850,070
──────────
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(ii)
Quoted equities – foreign as at 31 December 2014 are as follows (continued):
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
3,452,000
1,276,000
──────────
4,728,000
──────────
9,387,938
6,758,599
──────────
16,146,537
──────────
9,452,610
6,296,078
──────────
15,748,688
──────────
0.88
0.59
──────────
1.47
──────────
2,393,735
──────────
8,737,829
──────────
10,164,633
──────────
0.94
──────────
223,300
──────────
5,103,676
──────────
6,681,181
──────────
0.62
──────────
691,300
──────────
7,502,623
──────────
7,077,979
──────────
0.66
──────────
155,856
──────────
9,875,421
──────────
8,173,089
──────────
0.76
──────────
80,881,554
══════════
132,430,023
135,537,228
══════════
12.60
══════════
SINGAPORE
CONSUMER PRODUCTS
Bumitama Agri Ltd
First Resources Ltd
REITS
Capitaretail China Trust REIT
THAILAND
INDUSTRIALS
Airports of Thailand PCL
TELECOMMUICATIONS
Total Access Communication NVDR
UNITED STATES
HEALTHCARE
Ikang Healthcare Group
Total quoted investments – foreign
Accumulated unrealised gain on
quoted equities – foreign
3,107,205
──────────
135,537,228
══════════
Total quoted equities – foreign
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(c)
Unquoted fixed income securities – local
(i)
Unquoted fixed income securities – local as at 29 February 2016 are as follows:
Name of issuer
Nominal
value
RM
Adjusted
cost
RM
1,700,000
1,686,355
Fair
value
RM
Percentage
of NAV
%
COMMERCIAL PAPER
0.00% RGB International
Berhad 14.3.2016 (NA)
1,695,983
0.13
BONDS
4.35% Al-'Aqar Capital Sdn
Bhd 6.5.2020 (AAA)
2,000,000
4.50% Axis REIT Sukuk Berhad
Call: 13.7.2022 (AAA)
5,000,000
5.90% BGSM Management Sdn
Bhd 28.12.2016 (AA3)
597,148
4.24% F&N Capital Sdn Bhd
5.10.2018 (AA1)
10,000,000
4.86% Genting Capital Berhad
8.6.2027 (AAA)
10,000,000
4.20% Inverfin Sdn Bhd
28.2.2018 (AAA)
10,000,000
6.20% Jimah East Power Sdn
Bhd 4.12.2031 (AA-)
15,000,000
6.80% Mah Sing Group
Berhad Call: 31.3.2020 (NA) 15,000,000
4.25% Malayan Banking
Berhad Call: 10.5.2019 (AA1) 5,000,000
4.68% Malaysia Airports Capital
Berhad 16.12.2022 (AAA)
15,000,000
6.00% Malton Berhad
30.6.2018 (NA)
156,000
5.05% Prominic Berhad
Call: 5.5.2016 (AA3)
10,000,000
4.28% Public Bank Berhad
Call: 3.8.2017 (AA1)
7,500,000
5.10% Public Bank Berhad
Call: 22.12.2016 (AA2)
5,000,0000
7.50% Public Finance Berhad
Call: 5.6.2019 (AA2)
15,000,000
4.40% RHB Investment Bank
Berhad Call: 11.12.2017 (AA3) 10,000,000
4.55% Sabah Development
Bank Berhad 8.8.2022 (AA1) 6,000,000
4.75% Silver Sparrow Berhad
7.12.2016 (AAA)
5,000,000
49
2,011,700
2,011,779
0.15
5,070,623
5,027,139
0.38
600,731
611,585
0.05
10,154,967
10,162,900
0.76
10,111,847
10,084,547
0.75
9,959,970
9,983,951
0.74
16,320,855
16,485,269
1.23
15,426,410
15,485,612
1.15
5,064,623
5,013,923
0.37
15,394,977
15,306,847
1.14
143,389
157,539
0.01
10,175,785
10,178,477
0.76
7,532,443
7,536,420
0.56
5,084,538
5,084,804
0.38
16,477,713
16,455,086
1.23
10,143,139
10,070,349
0.75
6,014,959
5,882,539
0.44
5,054,657
5,055,107
0.38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(c)
Unquoted fixed income securities – local (continued)
(i)
Unquoted fixed income securities – local as at 29 February 2016 are as follows (continued):
Name of issuer
BONDS (CONTINUED)
Nominal
value
RM
4.70% Tan Chong Motor
Holdings Berhad
24.11.2021 (AA2)
5,000,000
4.40% WCT Holdings Berhad
9.4.2020 (AA-)
5,000,000
4.95% WCT Holdings Berhad
22.10.2021 (AA-)
5,000,000
4.35% YTL Power International
Berhad 24.8.2018 (AA1)
3,000,000
──────────
Total unquoted fixed income
securities – local
165,953,148
══════════
Accumulated unrealised loss
on unquoted fixed income
securities – local
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
5,073,718
4,994,146
0.37
5,009,097
4,998,794
0.37
5,088,419
5,086,151
0.38
3,001,227
──────────
3,002,388
──────────
0.22
──────────
170,602,142
170,371,335
══════════
12.70
══════════
(230,807)
──────────
Total unquoted fixed income
securities – local
170,371,335
══════════
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(c)
Unquoted fixed income securities – local (continued)
(ii)
Unquoted fixed income securities – local as at 31 December 2014 are as follows:
Name of issuer
BONDS
Nominal
value
RM
4.50% Axis REIT Sukuk
12.7.2024 (AAA)
5,000,000
5.90% BGSM Management
Sdn Bhd 28.12.2016 (AA3)
597,148
6.10% BGSM Management
Sdn Bhd 28.12.2017(AA3)
50,364
4.86% Genting Capital Berhad
08.06.2027 (AAAs)
10,000,000
4.85% Hong Leong Bank
Berhad 10.8.2020 (AA2)
5,000,000
4.75% Konsortium Lebuhraya
Utara-Timur KL Sdn Bhd
2.12.2027 (AA-is)
7,000,000
4.75% Konsortium Lebuhraya
Utara-Timur KL Sdn Bhd
2.12.2025 (AA-is)
6,000,000
4.1% Korea Development
Bank 24.2.2017 (AAA)
5,000,000
4.25% Malayan Banking Berhad
10.5.2024 (AA1)
5,000,000
4.68% Malaysia Airports
Capital Berhad 16.12.2022
(AAA)
5,000,000
6% Malton Berhad 30.06.2018
(NA)
187,200
7.5% Public Finance Berhad
5.6.2059 (AA2)
10,000,000
4.28% Public Bank Berhad
3.8.2022 (AA1)
7,500,000
8.00% RHB Bank Berhad
31.03.2039 (A1)
5,000,000
4.40% RHB Investment
Bank Berhad 9.12.2022
(AA3)
10,000,000
4.55% Sabah Development
Bank Berhad
8.8.2022 (AA1)
10,000,000
4.45% Sabah Development
Bank Berhad
10.02.2016 (AA1)
14,000,000
5.90% Tanjung Bin Energy
Issuer 16.3.2029 (AA3)
5,000,000
51
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
5,153,001
5,050,311
0.47
591,569
615,598
0.06
49,466
52,735
0.00
10,031,956
9,831,556
0.91
5,119,604
5,113,257
0.48
6,689,309
6,757,619
0.63
5,844,113
5,879,425
0.55
5,088,802
5,075,202
0.47
5,030,274
4,961,074
0.46
5,253,935
5,026,966
0.47
173,051
191,903
0.02
11,188,111
11,223,179
1.04
7,647,431
7,636,418
0.71
5,785,386
5,670,118
0.53
10,118,729
10,000,421
0.93
10,182,000
9,880,300
0.92
14,314,363
14,245,479
1.32
5,507,664
5,313,771
0.49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(c)
Unquoted fixed income securities – local (continued)
(ii)
Unquoted fixed income securities – local as at 31 December 2014 are as follows (continued):
Name of issuer
Nominal
value
RM
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
5,000,000
5,016,001
5,061,899
0.47
10,000,000
10,032,481
10,124,890
0.94
7,000,000
──────────
7,677,187
──────────
7,410,945
──────────
0.69
──────────
132,334,712
══════════
136,494,433
135,123,066
══════════
12.56
══════════
BONDS (CONTINUED)
5.73% Unitapah Sdn Bhd
2.6.2026 (AA2)
5.82% Unitapah Sdn Bhd
11.6.2027 (AA2)
5.38% Westports Malaysia
Sdn Bhd 30.4.2026
(AA+is)
Total unquoted fixed income
securities – local
Accumulated unrealised loss
on unquoted fixed income
securities – local
(1,371,367)
──────────
Total unquoted fixed income
securities – local
135,123,066
══════════
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(d)
Unquoted fixed income securities – foreign
(i)
Unquoted fixed income securities – foreign as at 29 February 2016 are as follows:
Name of issuer
BONDS
Nominal
value
RM
3.50% Adani Ports&Spec Eco
Zone Ltd 29.7.2020 (Baa3)
18,906,750
4.50% Alibaba Group Holding
Ltd Call: 28.5.2034 (A1)
4,201,500
7.00% Bank OCBC Misp Tbk
PT 18.4.2016 (NA)
20,410,000
3.25% Bank of China Ltd
17.4.2016 (A1)
3,205,300
5.50% Bank of East Asia Ltd/The
Call: 31.12.2020 (Ba2)
12,604,500
8.50% Bank Rakyat Indonesia
Persero 8.2.2017 (NA)
20.06.2022 (A2)
15,700,000
3.50%CCCI Treasury Ltd
Call: 21.04.2020 (A3)
11,344,050
4.00% China Life Insurance
Co. Ltd 3.7.2075 (A3)
21,007,500
3.95% China Overseas Finance
15.11.2022 (Baa1)
12,604,500
12.25% CIFI Holdings Group
Co Ltd Call: 15.4.2016 (B1)
4,201,500
11.40% Ciputra Residence PT
2.4.2017 (NA)
4,710,000
7.875% Citic Pacific Limited
Call: 15.4.2016 (NA)
14,705,250
8.625% Citic Pacific Limited
Call: 22.11.2018 (NA)
8,403,000
4.25% CLP Power HK
Financing Ltd
Call: 7.11.2019 (A3)
12,604,500
5.50% Cnooc Finance Ltd
21.5.2033 (Aa3)
6,302,250
3.50% Cnooc Finance Ltd
5.5.2025 (Aa3)
14,705,250
3.50% Cnooc Finance Ltd
5.5.2025 (Aa3)
6,302,250
4.05% Dianjian Haixing Ltd
Call: 21.10.2019 (A3)
13,864,950
5.00% FCL Treasury Pte
Ltd Call: 9.3.2020 (NA)
5,980,800
5.00% FCL Treasury Pte
Ltd Call: 9.3.2020 (NA)
4,485,600
53
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
17,048,866
18,818,098
1.40
3,629,115
4,218,831
0.31
20,453,518
20,546,520
1.53
3,283,498
3,231,707
0.24
12,920,667
11,710,806
0.87
15,130,070
15,780,070
1.18
10,521,689
11,369,448
0.85
19,243,165
20,726,933
1.55
9,298,995
12,892,267
0.96
4,769,097
4,694,663
0.35
4,415,899
4,857,172
0.36
11,600,398
15,223,610
1.13
7,489,434
9,580,418
0.71
9,930,550
12,883,795
0.96
6,388,413
7,063,421
0.53
13,022,472
14,537,284
1.08
5,471,483
6,230,264
0.46
13,576,215
14,290,951
1.07
3,994,889
6,012,711
0.45
4,523,941
4,509,533
0.34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(d)
Unquoted fixed income securities – foreign (continued)
(i)
Unquoted fixed income securities – foreign as at 29 February 2016 are as follows
(continued):
Name of issuer
BONDS (CONTINUED)
Nominal
value
RM
7.00% Fita International Ltd
10.2.2020 (NA)
8,403,000
4.50% FPC Treasury Ltd
16.4.2023 (NA)
17,646,300
5.375% Franshion Brilliant Ltd
17.10.2018 (Baa3)
4,201,500
5.75% Franshion Brilliant Ltd
19.3.2019 (Baa3)
14,705,250
5.125% Genting Singapore PLC
Call: 12.9.2017 (Baa3)
24,670,800
5.125% Genting Singapore PLC
Call: 12.09.2017 (Baa3)
23,773,680
5.00% GPT Wholesale Shopping
Centre 13.11.2017 (A-)
6,749,325
8.50% Greentown China Holdings
Ltd Call: 4.2.2016 (B1)
5,041,800
1.40% HKCG Finance Ltd
11.4.2016 (A1)
3,205,300
4.45% HLP Finance Ltd
16.4.2021 (NA)
10,503,750
6.375% HSBC Holdings PLC
Call: 30.3.2025 (Baa3)
16,806,000
5.625% HSBC Holdings PLC
Call: 17.1.2020 (Baa3)
16,806,000
3.75% Hutchison Whampoa
Europe Fin. Call: 10.2.2018
(Baa2)
2,294,200
4.50% Indust & Comm Bank
of China 10.10.2023 (BBB+)
7,562,700
4.00% ICICI Bank Ltd/Dubai
25.6.2016 (Baa3)
2,564,240
2.50% Korean Air Lines Co Ltd
Call: 25.11.2018 (Aa2)
12,604,500
5.20% Krung Thai Bank PLC
Call: 26.12.2019 (B+)
10,503,750
6.75% Longfor Properties Co
Ltd 28.5.2018 (Ba2)
3,205,300
6.75% Longfor Properties Co
Ltd Call: 29.1.2018 (Ba2)
16,385,850
4.25% LS Finance Ltd
16.10.2022 (Baa3)
19,326,900
7.125% Majid Al Futtaim
Holding LLC
Call: 29.10.2018 (BB+)
4,201,500
54
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
8,069,536
9,415,421
0.70
13,543,123
17,954,669
1.34
4,212,189
4,436,393
0.33
11,830,216
15,866,597
1.18
22,145,294
24,508,227
1.83
20,746,750
23,617,018
1.76
7,263,069
7,052,859
0.53
5,160,385
5,296,790
0.39
3,330,492
3,204,044
0.24
8,193,459
11,127,541
0.83
15,673,208
15,910,905
1.19
15,688,964
15,753,524
1.17
2,398,555
2,346,113
0.17
7,436,119
7,869,179
0.59
2,667,348
2,563,738
0.19
13,101,991
12,713,739
0.95
8,139,669
10,815,595
0.81
3,277,393
3,193,067
0.24
17,902,236
16,795,496
1.25
14,844,101
19,770,211
1.47
4,466,678
4,476,891
0.33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(d)
Unquoted fixed income securities – foreign (continued)
(i)
Unquoted fixed income securities – foreign as at 29 February 2016 are as follows
(continued):
Name of issuer
BONDS (CONTINUED)
7.75% Majapahit Holding BV
20.01.2020 (Baa3)
3.25% Malayan Banking
Berhad Call: 20.9.2017
(BBB+)
5.125% Mapletree Treasury
Services Call: 25.7.2017
(NA)
5.00% MCE Finance Ltd
Call: 15.2.2016 (Ba3)
4.40% Neptune Orient Lines
Ltd Call: 8.11.2017 (NA)
4.70% Nippon Life Insurance
Co Call: 20.1.2026 (A3)
4.375% NWD MTN Ltd
30.11.2022 (NA)
3.80% Oversea-Chinese
Banking Corp
Call: 25.8.2020 (A3)
3.15% Oversea-Chinese
Banking Corp
Call: 11.3.2018 (Aa3)
4.30% Pacific Radiance
Ltd 29.8.2018 (NA)
4.50% Parkson Retail
Group Ltd 3.5.2018 (B2)
5.125% Perusahaan Gas
Negara PT 16.5.2024
(Baa3)
2.875% Ping An Insurance
Group Co China 19.1.2021
(A3)
4.875% PTT Exploration
& Production
Call: 18.6.2019 (Baa3)
6.50% NWS Holdings
Limited 9.2.2017 (NA)
5.50% Royal Capital B.V.
Call: 5.5.2021 (NA)
6.25% Royal Capital B.V.
Call: 5.5.2019 (NA)
5.325% Sompo Japan
Insurance Incorporation
Call: 28.3.2023 (A3)
Nominal
value
RM
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
8,403,000
9,388,819
9,639,303
0.72
25,209,000
19,052,781
25,714,055
1.92
5,980,800
5,135,632
6,119,284
0.46
12,184,350
11,849,446
11,356,085
0.85
20,932,800
17,756,147
17,802,142
1.33
10,503,750
10,526,077
10,680,767
0.80
16,806,000
17,218,027
17,069,166
1.27
5,980,800
5,811,313
5,958,196
0.44
4,201,500
3,113,964
4,321,558
0.32
11,214,000
9,711,138
8,551,996
0.64
23,108,250
18,000,453
19,756,399
1.47
6,302,250
6,339,599
6,407,800
0.48
6,302,250
6,594,396
6,376,958
0.48
29,410,500
25,735,054
26,783,713
2.00
4,201,500
3,806,896
4,369,023
0.33
12,604,500
12,826,060
12,273,282
0.92
14,705,250
13,451,025
14,945,517
1.11
14,705,250
11,560,215
15,823,308
1.18
55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(d)
Unquoted fixed income securities – foreign (continued)
(i)
Unquoted fixed income securities – foreign as at 29 February 2016 are as follows
(continued):
Name of issuer
BONDS (CONTINUED)
6.50% Standard Chartered
PLC Call: 2.4.2020 (Ba1)
6.50% Standard Chartered
PLC Call: 2.4.2020
6.125% Theta Capital Pte
Ltd Call: 14.11.2016 (Ba3)
7.98% Wells Fargo &
Company Call: 15.3.2018
(Baa2)
5.00% Westfield Retail
Trust Call: 25.7.2019 (A)
4.25% Wing Tai Properties
Fin Ltd 29.11.2022 (NA)
5.00% Woori Bank Co Ltd
Call: 10.6.2020 (Ba2)
5.375% Yanlord Land
HK Co Ltd 23.5.2016 (Ba3)
7.00% Yinson TMC Sdn
Bhd
Call: 25.9.2020 (NA)
Total unquoted fixed income
securities – foreign
Accumulated unrealised gain
on unquoted fixed income
securities – foreign
Nominal
value
RM
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
4,201,500
4,341,698
3,469,190
0.26
16,806,000
15,280,782
13,876,761
1.03
21,007,500
17,339,837
20,343,765
1.52
12,604,500
12,166,414
13,480,471
1.00
4,499,550
4,764,898
4,814,337
0.36
5,980,800
5,064,272
5,944,989
0.44
4,201,500
3,731,767
4,137,847
0.31
3,205,300
3,337,170
3,235,361
0.24
37,813,500
──────────
38,897,510
──────────
38,960,510
──────────
2.90
──────────
790,486,995
══════════
719,604,539
786,078,302
══════════
58.60
══════════
66,473,763
──────────
Total unquoted fixed income
securities – foreign
786,078,302
══════════
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(d)
Unquoted fixed income securities – foreign (continued)
(ii)
Unquoted fixed income securities – foreign as at 31 December 2014 are as follows:
Name of issuer
BONDS
Nominal
value
RM
5% GPT Wholesale Shopping
Centre 13.11.2017 (A-)
6,444,450
4.25% Hongkong &
Shanghai Banking Corporation
Ltd 16.11.2017 (Aa2)
8,592,600
4.945% National Australia
Bank Ltd 28.11.2022 (A2)
8,592,600
5% National Bank of Abu
Dhabi 07.03.2018 (Aa3)
5,728,400
5% Scentre Group Trust
23.10.2019 (A)
4,296,300
5.528% Australia & New
Zealand Banking Group
20.06.2022 (A2)
14,321,000
7% Bank OCBC NISP TBK
18.04.2016 (NA)
18,330,000
11.4% Ciputra Residence PT
02.04.2017 (NA)
4,230,000
7.875% Indonesia
Government 15.04.2019
(Baa3)
10,152,000
5.125% Genting Singapore
29/03/2049 (NA)
36,907,515
5.125% Mapletree Treasury
Services 25.07.2049 (NA)
5,291,400
4.4% Neptune Orient Lines
Ltd 08.11.2019 (NA)
18,519,900
4.3% Pacific Radiance Ltd
29.08.2018 (NA)
7,937,100
3.145% Singapore Airlines
Ltd 08.04.2021 (NA)
7,937,100
3.5% Wilmar International
Ltd 25.01.2017 (NA)
18,519,900
4.25% Wing Tai Properties
Finance Ltd 29.11.2022 (NA) 7,937,100
2.50% Alibaba Group Holding
Ltd 28.11.2019 (A1)
17,480,000
3.125% Alibaba Group
Holding Ltd 28.11.2021 (A1)
6,992,000
3.45% Australia & New
Zealand Banking Group
08.08.2022 (A2)
17,480,000
57
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
7,207,162
6,718,133
0.62
9,593,359
8,907,954
0.83
9,594,440
8,875,351
0.82
6,474,487
6,065,928
0.56
4,719,595
4,570,469
0.43
16,237,938
14,827,250
1.38
20,469,277
18,538,147
1.72
4,440,873
4,342,293
0.40
10,256,426
10,368,238
0.96
35,024,919
36,796,260
3.42
5,254,130
5,563,198
0.52
17,589,036
18,792,320
1.75
7,720,453
7,694,431
0.72
7,863,499
8,102,382
0.75
17,675,567
19,048,503
1.77
7,528,956
7,866,536
0.73
16,774,352
17,278,833
1.61
6,709,576
6,936,515
0.64
15,946,829
18,177,525
1.69
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(d)
Unquoted fixed income securities – foreign (continued)
(ii)
Unquoted fixed income securities – foreign as at 31 December 2014 are as follows
(continued):
Name of issuer
BONDS (CONTINUED)
3.25% Axis Bank Ltd
21.05.2020 (Baa2)
2.625% Federal Republic of
Brazil 05.01.2023 (Baa2)
4.076% Capitaland
Treasury Ltd 20.09.2022
(NA)
3.95% China Overseas
Finance 15.11.2022 (Baa1)
7.875% Citic Ltd 15.04.2049
(NA)
8.625% Citic Ltd 29.05.2049
(NA)
6.625% Citic Ltd 15.04.2021
(A3)
6.8% Citic Ltd 17.01.2023
(A3)
4.25% CLP Power Hk
Financing 29.05.2049 (A3)
1.95% CNPC General
Capital Ltd 25.11.2017 (Aa3)
3.625% Double Rosy Ltd
18.11.2019 (A-)
6% FPC Finance Ltd
28.06.2019 (NA)
4.5% FPC Treasury
Ltd 16.04.2023 (NA)
5.375% Franshion Brilliant
Ltd 17.10.2018 (Baa3)
5.75% Franshion Brilliant
Ltd 19.03.2019 (Baa3)
4.625% Golden Eagle Retail
Group 21.05.2023 (Baa3)
4.45% HLP Finance Ltd
16.04.2021 (NA)
6.00% Hutchison Whampoa
International Ltd 29.12.2049
(Aa2)
2.625% Korea Western
Power Co Ltd 22.09.2019
(Aa3)
5.20% Krung Thai Bank PCL
26.12.2024 (B+)
Nominal
value
RM
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
13,984,000
13,389,017
13,876,477
1.29
6,992,000
6,012,223
6,469,932
0.60
19,228,000
17,174,549
19,742,069
1.84
13,984,000
12,265,742
13,650,443
1.27
12,236,000
11,910,696
12,985,151
1.21
6,992,000
7,365,061
7,982,372
0.74
6,992,000
7,291,706
8,080,556
0.75
13,984,000
15,168,344
16,630,860
1.55
13,984,000
13,132,344
14,180,825
1.32
13,984,000
13,392,481
13,889,608
1.29
6,992,000
6,677,094
6,973,331
0.65
17,480,000
16,241,297
18,745,552
1.74
12,236,000
10,754,205
11,981,187
1.11
6,992,000
6,650,615
7,309,776
0.68
17,480,000
16,672,456
18,477,961
1.72
19,228,000
16,400,124
17,917,399
1.67
10,488,000
9,698,839
10,932,387
1.02
9,788,800
9,218,437
10,164,689
0.94
6,992,000
6,431,641
7,077,435
0.66
8,740,000
8,057,669
8,949,956
0.83
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(d)
Unquoted fixed income securities – foreign (continued)
(ii)
Unquoted fixed income securities – foreign as at 31 December 2014 are as follows
(continued):
Name of issuer
Nominal
value
RM
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
18,324,745
20,953,416
1.95
18,933,295
21,303,603
1.98
15,263,548
16,712,104
1.55
3,300,809
3,605,229
0.34
6,227,445
7,128,519
0.66
13,759,114
14,645,705
1.36
3,219,190
3,488,169
0.32
4,602,874
4,310,006
0.40
21,956,187
24,842,440
2.31
27,837,447
31,658,126
2.94
19,042,959
21,085,002
1.96
6,580,306
──────────
7,259,269
──────────
0.67
──────────
610,033,333
652,479,820
══════════
60.64
══════════
BONDS (CONTINUED)
4.25% LS Finance Ltd
16.10.2022 (Baa3)
20,626,400
3.25% Malayan Banking
Berhad 20.9.2022 (BBB+)
20,976,000
6.75% Olam International
Ltd 29.1.2018 (NA)
15,732,000
4.00% Oversea-Chinese
Banking 15.10.2024 (A2)
3,496,000
3.15% Oversea-Chinese
Banking 11.03.2023 (Aa3)
6,992,000
4.50% Parkson Retail Group
Ltd 3.5.2018 (Ba2)
15,732,000
4.875% PTT Explore &
Production
29.12.2049 (Baa3)
3,496,000
10.75% Rolta LLC 16.05.2018
(BB-)
4,544,800
6.62% SBB Capital Corporation
29.11.2049 (Ba1)
24,122,400
5.325% Sompo Japan
Insurance 28.03.2073 (A3)
29,716,000
6.125% Theta Capital Pte Ltd
14.11.2020 (Ba3)
20,976,000
5.75% TML Holdings Pte Ltd
7.5.2021 (NA)
6,992,000
──────────
Total unquoted fixed income
securities – foreign
637,867,765
══════════
Accumulated unrealised gain
on unquoted fixed income
securities – foreign
42,466,487
──────────
Total unquoted fixed income
securities – foreign
652,479,820
══════════
59
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
9
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(e)
Unquoted credit linked investment contract
(i)
There is no investment in unquoted credit linked investment contract - local as at 29
February 2016.
(ii)
Unquoted credit linked investment contract as at 31 December 2014 is as follows:
Name of issuer
6.10% Deutsche Bank
23.8.2015 (NA)
Accumulated unrealised loss
on unquoted credit linked
investment contract
Nominal
value
RM
Adjusted
cost
RM
Fair
value
RM
Percentage
of NAV
%
3,500,000
══════════
3,502,340
3,497,090
══════════
0.32
══════════
(5,250)
──────────
Total unquoted credit linked
investment contract
(f)
3,497,090
══════════
Collective investment schemes – local
(i)
Collective investment schemes – local as at 29 February 2016 are as follows:
Affin Hwang Bond Fund
Affin Hwang Aiiman Income
Plus Fund
Total collective investment
schemes – local
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
16,195,473
9,103,189
9,294,582
0.69
20,056,953
11,260,026
11,272,008
0.84
───────── ───────── ───────── ─────────
36,252,426
═════════
Accumulated unrealised gain
on collective investment
schemes – local
Total collective investment
schemes – local
(ii)
20,363,215
20,566,590
1.53
══════════ ═════════
203,375
─────────
20,566,590
═════════
There is no investment in unquoted credit linked investment contract - local as at 31
December 2014.
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
10
CASH AND CASH EQUIVALENTS
29.2.2016
RM
Cash and bank balances
Deposits with licensed financial institutions
47,079,312
48,122,575
──────────
95,201,887
══════════
31.12.2014
RM
56,684,119
10,033,759
──────────
66,717,878
══════════
Weighted average effective interest rates per annum and weighted average maturity of deposits with licensed
financial institutions are as follows:
Deposits with licensed financial institutions
29.2.2016
%
31.12.2014
%
3.59
══════════
3.75
══════════
The deposits have an average maturity of 6 days (31.12.2014: 2 days).
11
INTEREST RATE SWAPS
As at the date of statement of financial position, there are four (2014: four) interest rate swaps outstanding.
The notional principal amount of the outstanding interest rate swaps amounted to USD60,000,000
(31.12.2014: USD60,000,000). As the Fund has not adopted hedge accounting during the financial year, the
change in the fair value of the interest rate swap is recognised immediately in the statement of
comprehensive income.
12
FORWARD FOREIGN CURRENCY CONTRACTS
As at the date of statement of financial position, there are forty two (31.12.2014: fourteen) forward currency
contracts outstanding. The notional principal amount of the outstanding forward currency contracts amounted
to RM603,730,183 (31.12.2014: RM404,720,840). The forward currency contracts entered into during the
financial year were for hedging against the currency exposure arising from the investment in the foreign
unquoted fixed income securities denominated in Australian Dollar, Euro, Singapore Dollar and United States
Dollar. As the Fund has not adopted hedge accounting during the financial period/ year, the change in the fair
value of the forward currency contract is recognised immediately in the statement of comprehensive income.
61
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
13
NUMBER OF UNITS IN CIRCULATION
29.2.2016
No. of units
31.12.2014
No. of units
1,592,062,000
2,495,353,000
Creation of units arising from applications
during the financial period/ year
479,616,712
39,741,756
Creation of units arising from distribution
during the financial period/ year
57,368,044
44,253,340
At the beginning of the financial period/ year
Cancellation of units during the financial period/ year
(194,642,756)
──────────
1,934,404,000
══════════
At the end of the financial period/ year
62
(987,286,096)
──────────
1,592,062,000
══════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
14
TRANSACTIONS WITH BROKERS AND DEALERS
(i)
Details of transactions with the top 10 brokers and dealers for the financial period ended 29 February
2016 are as follows:
Name of brokers/dealers
Public Bank Berhad
CIMB Group*
Affin Group*#
BNP Paribas
Nomura Singapore Limited#
CCB International Securities Ltd
Citi Group*
Morgan Stanley & Co
International Ltd
HSBC
Merrill Lynch International
London
Others#
(ii)
Value of trade
RM
Percentage
of
total trade
%
Brokerage
fees
RM
Percentage
of total
brokerage
%
796,490,000
272,629,034
242,335,702
199,557,492
173,520,709
161,697,992
160,496,671
19.63
6.72
5.97
4.92
4.28
3.98
3.95
65,408
284,789
136,803
32,348
422,770
-
2.01
8.75
4.20
1.00
12.99
-
145,697,951
137,955,376
3.59
3.40
192,369
-
5.91
-
130,919,460
1,636,830,247
──────────
4,058,130,634
══════════
3.23
40.33
──────────
100.00
══════════
48,019
1.48
2,071,766
63.66
────────── ──────────
3,254,272
100.00
══════════ ══════════
Details of transactions with the top 10 brokers and dealers for the financial year ended 31 December
2014 are as follows:
Name of brokers/dealers
Value of trade
RM
Percentage
of
total trade
%
Merrill Lynch Group*
Affin Group*#
RHB Group*#
Barclays Group*
CIMB Group*
Public Bank Berhad
Nomura Group*#
Citi Group*
HSBC Group*
DBS Group*
Others#
318,661,527
254,631,556
200,915,125
197,902,265
174,277,910
148,630,000
143,961,953
139,718,736
129,262,123
122,180,301
1,369,162,098
──────────
3,199,303,594
══════════
9.96
7.96
6.28
6.19
5.45
4.65
4.50
4.37
4.04
3.82
42.78
──────────
100.00
══════════
Note: * Group wide
Brokerage
fees
RM
Percentage
of total
brokerage
%
119,001
3.76
293,714
9.29
363,855
11.51
38,146
1.21
47,953
1.52
288,655
9.13
2,009,764
63.58
────────── ──────────
3,161,088
100.00
══════════ ══════════
Included in the transactions with brokers and dealers are trades in the stockbroking industry with Affin Group
a company related to the Manager amounting to RM242,335,702 (31.12.2014: RM254,631,556). The
Manager is of the opinion that all transactions with the related companies have been entered into agreed
terms between the related parties.
63
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
14
TRANSACTIONS WITH BROKERS AND DEALERS (CONTINUED)
iii)
Included in the transactions with brokers and dealers are cross trades conducted between the Fund and
other funds; and private mandates managed by the Manager amounting to:
Brokers and dealers
RHB Group*
Nomura Group*
Hong Leong Bank Berhad
Kenanga Investment Bank Berhad
Affin Group*
Bank Muamalat Berhad
29.2.2016
RM
31.12.2014
RM
36,155,425
39,820,280
2,956,500
16,465,600
──────────
95,397,805
══════════
148,112,222
112,389,224
8,816,000
4,922,000
4,880,000
──────────
279,119,446
══════════
The cross trades are conducted between the Funds and other funds; and private mandates managed by the
Manager as follows:
Affin Hwang Asia Bond Fund
Affin Hwang Select Balanced Fund
Affin Hwang Flexi Fund III
Affin Hwang Fixed Maturity Income Fund V
Affin Hwang Fixed Maturity Income Fund VI
Affin Hwang Fixed Maturity Income Fund VIII
Affin Hwang Fixed Maturity Income Fund IX
Affin Hwang Fixed Maturity Income Fund X
Affin Hwang Fixed Maturity Income Fund XI
Affin Hwang Fixed Maturity Income Fund XII
Affin Hwang Fixed Maturity Income Fund XIII
Affin Hwang Fixed Maturity Income Fund IV
Affin Hwang Flexible Maturity Income Fund I
Affin Hwang Select Asia (ex Japan) Balance Fund
Affin Hwang Tactical Fund
Private mandates managed by the Manager
64
29.2.2016
RM
31.12.2014
RM
894,760
22,308,725
4,919,300
6,478,251
7,644,614
3,154,125
4,284,500
1,161,058
2,005,800
42,546,672
──────────
95,397,805
══════════
41,671,645
4,733,656
13,505,292
81,247,417
25,399,376
6,588,089
17,608,625
88,365,646
──────────
279,119,446
══════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
15
UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER
The related parties of and their relationship with the Fund are as follows:
Related parties
Relationships
Affin Hwang Asset Management Berhad
The Manager
Affin Hwang Investment Bank Berhad
Holdings company of the Manager
Affin Holdings Berhad (“AHB”)
Ultimate holding company of the Manager
Subsidiaries and associates of AHB as
disclosed in its financial statements
Subsidiary and associated companies
of the ultimate holding company of
the Manager
Director of Affin Hwang Asset Management
Berhad
Director of the Manager
Non-Executive Chairman of AHB
Non-Executive Chairman of the
ultimate holding company of the
Manager
The Manager:
Affin Hwang Asset
Management Berhad
No. of units
29.2.2016
RM
No. of units
31.12.2014
RM
2,921
═════════
2,026
═════════
3,099
═════════
2,095
═════════
65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
16
MANAGEMENT EXPENSE RATIO (“MER”)
MER
29.2.2016
%
31.12.2014
%
1.69
══════════
1.32
══════════
MER is derived from the following calculation:
MER
=
(A + B + C + D + E) x 100
F
A
B
C
D
E
F
=
=
=
=
=
=
Management fee
Trustee fee
Auditors’ remuneration
Tax agent’s fee
Other expenses, excluding goods and services tax on transaction costs
Average net asset value of Fund calculated on a daily basis
The average net asset value of the Fund for the financial period/ year calculated on a daily basis is
RM1,174,374,455 (31.12.2014: RM1,287,883,966).
17
PORTFOLIO TURNOVER RATIO (“PTR”)
PTR (times)
29.2.2016
31.12.2014
1.32
══════════
1.19
══════════
PTR is derived from the following calculation:
(Total acquisition for the financial period/ year + total disposal for the financial period/ year) ÷ 2
Average net asset value of the Fund for the financial period/ year calculated on a daily basis
where:
total acquisition for the financial period/year = RM1,663,133,864 (31.12.2014: RM1,230,396,228)
total disposal for the financial period/ year = RM1,438,339,158 (31.12.2014: RM1,821,409,372)
66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2015 TO 29 FEBRUARY 2016
(CONTINUED)
18
SEGMENT INFORMATION
The strategic asset allocation committee of the Investment Manager makes the strategic resource allocations
on behalf of the Fund. The Fund has determined the operating segments based on the reports reviewed by
this committee that are used to make strategic decisions.
The committee considers the business as two sub-portfolios, which are managed by separate specialist
teams at the Investment Manager. These sub-portfolios consist of an equity portfolio, which focuses on equity
securities; the second sub-portfolio consisting of debt and cash instruments.
The reportable operating segments derive their income by seeking investments to achieve targeted returns
consummate with an acceptable level of risk within each portfolio. These returns consist of interest, dividends
and gains on the appreciation in the value of investments and are derived from quoted equity, unquoted fixed
income securities and collective investment schemes in Australia, Hong Kong, Indonesia, Malaysia, Korea,
Philippine, Singapore, Thailand and United States.
There were no changes in the reportable segments during the financial period/ year.
The internal reporting provided to the committee for the Fund’s assets, liabilities and performance is prepared
on a consistent basis with the measurement and recognition principles of MFRS.
19
CHANGE FINANCIAL YEAR END OF THE FUND
The Fund has changed its financial year end from 31 December 2015 to 29 February 2016.
67
AFFIN HWANG SELECT INCOME FUND
STATEMENT BY THE MANAGER
I, Teng Chee Wai, as the Director of Affin Hwang Asset Management Berhad, do hereby state that in my
opinion as the Manager, the financial statements set out on pages 10 to 67 are drawn up in accordance with
the provisions of the Deeds and give a true and fair view of the financial position of the Fund as at 29
February 2016 and of its financial performance, changes in net equity and cash flows for the financial period
ended 29 February 2016 in accordance with Malaysian Financial Reporting Standards in Malaysia and
International Financial Reporting Standards.
For and on behalf of the Manager,
AFFIN HWANG ASSET MANAGEMENT BERHAD
TENG CHEE WAI
EXECUTIVE DIRECTOR
Kuala Lumpur
21 April 2016
68
INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF
AFFIN HWANG SELECT INCOME FUND
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Affin Hwang Select Income Fund on pages 10 to 67 which
comprise the statement of financial position as at 29 February 2016 of the Fund, and the statement of
comprehensive income, statement of changes in equity and statement of cash flows of the Fund for the
financial year then ended, and a summary of significant accounting policies and other explanatory notes, as
set out on Notes 1 to 19.
Manager’s Responsibility for the Financial Statements
The Manager of the Fund is responsible for the preparation of financial statements so as to give a true and
fair view in accordance with Malaysian Financial Reporting Standards and International Financial Reporting
Standards. The Manager is also responsible for such internal control as the Manager determines is
necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgment, including the assessment of risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, we consider internal control relevant to the Fund’s preparation of financial statements that give
a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the Manager’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the Manager, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
69
INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF
AFFIN HWANG SELECT INCOME FUND (CONTINUED)
REPORT ON THE FINANCIAL STATEMENTS (CONTINUED)
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Fund as of 29
February 2016 and of its financial performance and cash flows for the financial year then ended in
accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards.
OTHER MATTERS
This report is made solely to the unit holders of the Fund and for no other purpose. We do not assume
responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS
(No. AF: 1146)
Chartered Accountants
Kuala Lumpur
21 April 2016
70
DIRECTORY OF SALES OFFICE
HEAD OFFICE
Affin Hwang Asset Management Berhad
th
Suite 11-01, 11 Floor
Menara Keck Seng
203, Jalan Bukit Bintang
55100 Kuala Lumpur
Tel : 03 – 2116 6000
Fax : 03 – 2116 6100
Toll free no : 1-800-88-7080
Email:[email protected]
SELANGOR
Affin Hwang Asset Management Berhad
A-7-G Jaya One
No. 72A, Jalan Universiti
46200 Petaling Jaya
Selangor
Tel: 03-7620 1290
Fax: 03-7620 1298
PENANG
Affin Hwang Asset Management Berhad
No. 10-C-24 Precinct 10
Jalan Tanjung Tokong
10470 Penang
Tel : 04 – 899 8022
Fax : 04 – 899 1916
PERAK
Affin Hwang Asset Management Berhad
13A Persiaran Greentown 7
Greentown Business Centre
30450 Ipoh Perak
Tel : 05 – 241 0668
Fax : 05 – 255 9696
MELAKA
Affin Hwang Asset Management Berhad
Ground Floor, No. 584, Jalan Merdeka
Taman Melaka Raya
75000 Melaka
Tel : 06 – 281 2890 / 3269
Fax : 06 – 281 2937
JOHOR
Affin Hwang Asset Management Berhad
st
1 Floor, Lot 93
Jalan Molek 1/29, Taman Molek
81100 Johor Bahru
Johor
Tel : 07 – 351 5977
Fax : 07 – 351 5377
SABAH
Affin Hwang Asset Management Berhad
nd
Lot No. B-2-09, 2 Floor
Block B, Warisan Square
Jalan Tun Fuad Stephens
88000 Kota Kinabalu
Sabah
Tel : 088 – 252 881
Fax : 088 – 288 803
71
DIRECTORY OF SALES OFFICE (Continued)
SARAWAK
Affin Hwang Asset Management Berhad
Ground Floor, No. 69
Block 10, Jalan Laksamana Cheng Ho
93200 Kuching
Sarawak
Tel : 082 – 233 320
Fax : 082 – 233 663
Affin Hwang Asset Management Berhad
st
1 Floor, Lot 1291
Jalan Melayu, MCLD
98000 Miri
Sarawak
Tel : 085 – 418 403
Fax : 085 – 418 372
72
www.affinhwangam.com
Affin Hwang Asset Management Berhad (429786-T)
Suite 11-01, 11th Floor, Menara Keck Seng, 203 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia