Aberdeen Standard Islamic World Equity Fund

Aberdeen Standard Islamic World Equity Fund

Annual Report30 June 2019

(formerly known as Aberdeen Islamic World Equity Fund)

1

ANNUAL REPORT ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND

TABLE OF CONTENTS FUND INFORMATION 2 FUND PERFORMANCE DATA 5 MANAGER’S REPORT 6 - 9 STATEMENT OF COMPREHENSIVE INCOME 10 STATEMENT OF FINANCIAL POSITION 11 - 12 STATEMENT OF CHANGES IN NET ASSET ATTRIBUTABLE TO UNITHOLDERS 13 STATEMENT OF CASH FLOWS 14 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 15 - 21 NOTES TO THE FINANCIAL STATEMENTS 22 - 47 STATEMENT BY THE MANAGER 48 TRUSTEE’S REPORT 49 SHARIAH ADVISER’S REPORT 50 AUDITORS’ REPORT

51 – 53

DISTRIBUTORS 54 – 55

3 -

2


FUND INFORMATION Name of Fund

Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund)

Fund Category / Type

Equity (Islamic) / Growth

Fund Objective

The Fund seeks to achieve capital appreciation in the long term through investments in Shariah-compliant equities and equity-related securities.

Fund Benchmark

MSCI ACWI Islamic (Shariah) Index

Fund Income Distribution Policy

As the investment objective of the Fund is to provide capital appreciation, distribution of income, if any, is incidental.

Breakdown of Unit holdings by Size

As at 30 June 2019, the size of the Fund stood at 124.759 million units.

BREAKDOWN OF UNITHOLDINGS BY SIZE – CLASS A- MYR

Size of holdings (Units) No. of

Unitholders No. of Units held ('000)

5,000 and below

3

11 5,001 to 10,000

1

10

10,001 to 50,000

1

25 50,001 to 500,000

2

735

500,001 and above

11

123,978

Total 18 124,759

3


FUND PERFORMANCE DATA FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Sector Allocation

30.06.2019 %

30.06.2018 %

30.06.2017 %

Shariah-Compliant Equities Consumer Discretionary 9.6 4.7 1.4 Consumer Staples 16.8 22.5 24.5 Energy 12.3 11.1 11.0 Healthcare 24.8 23.4 22.9 Industrials 12.6 12.0 10.6 Information Technology 12.4 9.5 6.0 Materials 6.9 12.2 9.9 Communication Services 1.0 1.8 2.9 Utilities 0.0 0.0 3.6 Islamic Real Estate 1.1 1.4 1.8 Cash 2.5 1.4 5.4

Total 100.0 100.0 100.0

Country Allocation

30.06.2019 %

30.06.2018 %

30.06.2017 %

Australia 4.4 2.3 0.0 Brazil 2.2 1.2 0.0 Canada 2.2 1.6 1.4 Denmark 0.0 1.1 0.0 France 8.7 6.3 7.6 Germany 2.8 11.6 11.4 Hong Kong 5.2 6.3 4.9 Indonesia 0.0 2.2 0.0 India 0.0 1.3 0.0 Italy 2.4 1.0 2.0 Japan 6.6 11.6 13.1 Netherlands 0.0 1.9 0.0 Singapore 1.2 2.1 2.0 South Africa 0.0 0.6 0.9 Sweden 2.1 4.1 5.4 Switzerland 11.9 9.2 10.2 Turkey 0.0 1.2 1.5 United Kingdom 6.7 12.0 13.7 United States 41.1 21.2 20.5 Cash 2.5 1.4 5.4

Total 100.0 100.0 100.0


TABLE OF CONTENTS FUND INFORMATION 2 FUND PERFORMANCE DATA 5 MANAGER’S REPORT 6 - 9 STATEMENT OF COMPREHENSIVE INCOME 10 STATEMENT OF FINANCIAL POSITION 11 - 12 STATEMENT OF CHANGES IN NET ASSET ATTRIBUTABLE TO UNITHOLDERS 13 STATEMENT OF CASH FLOWS 14 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 15 - 21 NOTES TO THE FINANCIAL STATEMENTS 22 - 47 STATEMENT BY THE MANAGER 48 TRUSTEE’S REPORT 49 SHARIAH ADVISER’S REPORT 50 AUDITORS’ REPORT

51 – 53

DISTRIBUTORS 54 – 55

4


FUND INFORMATION Name of Fund

Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund)

Fund Category / Type

Equity (Islamic) / Growth

Fund Objective

The Fund seeks to achieve capital appreciation in the long term through investments in Shariah-compliant equities and equity-related securities.

Fund Benchmark

MSCI ACWI Islamic (Shariah) Index

Fund Income Distribution Policy

As the investment objective of the Fund is to provide capital appreciation, distribution of income, if any, is incidental.

Breakdown of Unit holdings by Size

As at 30 June 2019, the size of the Fund stood at 124.759 million units.

BREAKDOWN OF UNITHOLDINGS BY SIZE – CLASS A- MYR

Size of holdings (Units) No. of

Unitholders No. of Units held ('000)

5,000 and below

3

11 5,001 to 10,000

1

10

10,001 to 50,000

1

25 50,001 to 500,000

2

735

500,001 and above

11

123,978

Total 18 124,759


FUND PERFORMANCE DATA (CONTINUED) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

2019 2018 2017

Class A-

MYR Class A-

MYR Class A-

MYR

Total NAV (RM million) 204.319 257.0940 197.47300 NAV per Unit (RM) 1.6379 1.5593 1.5460 Units in Circulation (million) 124.76 164.8850 127.7280 Highest NAV per Unit (RM) 1.6402 1.6245 1.5699 Lowest NAV per Unit (RM) 1.4017 1.4689 1.3500 Return of the Fund (%) 5.0407 0.8473 14.17

Capital Return (%) 5.0407 0.8473 14.17 Income Return (%) Nil Nil Nil

Gross Distribution per Unit (sen) Nil Nil Nil Net Distribution per Unit (sen) Nil Nil Nil Management Expense Ratio (MER) (%) 1.94 2.05 2.01 Portfolio Turnover Ratio (PTR) (times) 0.51 0.32 0.40

Source: Deutsche Bank (Malaysia) Berhad

Class A- MYR

Average Total Return

1 year 30.06.2018

to 30.06.2019

(%)

3 years 30.06.2016

to 30.06.2019

(%)

5 years

30.06.2014 to

30.06.2019 (%)

Fund 5.04 20.96

29.73

Source: Lipper for Investment Management as at 30 June 2019

Annual Total Return

1 year 30.06.2018

to 30.06.2019

(%)

1 year 30.06.2017

to 30.06.2018

(%)

1 year 30.06.2016

to 30.06.2017

(%)

1 year 30.06.2015

to 30.06.2016

(%)

1 year 30.06.2014

to 30.06.2015

(%)

Fund

5.04

0.86

14.17

0.79

6.42


5



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 distributions payable (if any) during the stipulated period. An illustration of the above would be as follows: Capital Return = NAV per Unit End / NAV per Unit Beginning – 1 Income Return = Income Distribution per Unit / NAV per Unit Ex-Distribution Total Return = Capital Return x Income Return – 1 Class A- MYR Capital Return = {NAV per Unit @ 30.6.2019 ÷ NAV per Unit @ 30.06.2018 – 1} x 100 = {1.6379 ÷ 1.5593 – 1} x 100 = 5.0407% Income Return = {Income Distribution per Unit ÷ NAV per Unit Ex-Distribution} x 100 = Nil Total Return = [{(1+Capital Return) x (1+Income Return)} – 1] x 100 = [{(1 + 5.0407%) x (1 + 0%)} – 1] x 100 = 5.0407% Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up.


FUND PERFORMANCE DATA FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Sector Allocation

30.06.2019 %

30.06.2018 %

30.06.2017 %

Shariah-Compliant Equities Consumer Discretionary 9.6 4.7 1.4 Consumer Staples 16.8 22.5 24.5 Energy 12.3 11.1 11.0 Healthcare 24.8 23.4 22.9 Industrials 12.6 12.0 10.6 Information Technology 12.4 9.5 6.0 Materials 6.9 12.2 9.9 Communication Services 1.0 1.8 2.9 Utilities 0.0 0.0 3.6 Islamic Real Estate 1.1 1.4 1.8 Cash 2.5 1.4 5.4

Total 100.0 100.0 100.0

Country Allocation

30.06.2019 %

30.06.2018 %

30.06.2017 %

Australia 4.4 2.3 0.0 Brazil 2.2 1.2 0.0 Canada 2.2 1.6 1.4 Denmark 0.0 1.1 0.0 France 8.7 6.3 7.6 Germany 2.8 11.6 11.4 Hong Kong 5.2 6.3 4.9 Indonesia 0.0 2.2 0.0 India 0.0 1.3 0.0 Italy 2.4 1.0 2.0 Japan 6.6 11.6 13.1 Netherlands 0.0 1.9 0.0 Singapore 1.2 2.1 2.0 South Africa 0.0 0.6 0.9 Sweden 2.1 4.1 5.4 Switzerland 11.9 9.2 10.2 Turkey 0.0 1.2 1.5 United Kingdom 6.7 12.0 13.7 United States 41.1 21.2 20.5 Cash 2.5 1.4 5.4

Total 100.0 100.0 100.0


MANAGER’S REPORT Fund Performance

The Aberdeen Islamic Standard World Equity Fund rose by 7.52% in ringgit terms over the period, outperforming the benchmark, the MSCI AC World Islamic Index, which gained 6.29%. Given the performance during the period under review, we believe the Fund’s objective is being met to provide investors with capital appreciation through long term investments in Shariah-compliant equities. Class A- MYR

Income Return

%

Capital Return

%

Total Return of Fund %

Total Return of Benchmark

%

0.00 5.04 5.04 6.19

Fund Performance (Continued)

FUND RETURN (SINCE INCEPTION) VS BENCHMARK

Benchmark: MSCI ACWI Islamic (Shariah) Index Source: Lipper for Investment Management as at 30 June 2019 Note: This information is prepared by Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd for information purposes only. Past performance of the Fund is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up.

6



2019 2018 2017

Class A-

MYR Class A-

MYR Class A-

MYR

Total NAV (RM million) 204.319 257.0940 197.47300 NAV per Unit (RM) 1.6379 1.5593 1.5460 Units in Circulation (million) 124.76 164.8850 127.7280 Highest NAV per Unit (RM) 1.6402 1.6245 1.5699 Lowest NAV per Unit (RM) 1.4017 1.4689 1.3500 Return of the Fund (%) 5.0407 0.8473 14.17

Capital Return (%) 5.0407 0.8473 14.17 Income Return (%) Nil Nil Nil

Gross Distribution per Unit (sen) Nil Nil Nil Net Distribution per Unit (sen) Nil Nil Nil Management Expense Ratio (MER) (%) 1.94 2.05 2.01 Portfolio Turnover Ratio (PTR) (times) 0.51 0.32 0.40

Source: Deutsche Bank (Malaysia) Berhad

Class A- MYR

Average Total Return

1 year 30.06.2018

to 30.06.2019

(%)

3 years 30.06.2016

to 30.06.2019

(%)

5 years

30.06.2014 to

30.06.2019 (%)

Fund 5.04 20.96

29.73


Annual Total Return

1 year 30.06.2018

to 30.06.2019

(%)

1 year 30.06.2017

to 30.06.2018

(%)

1 year 30.06.2016

to 30.06.2017

(%)

1 year 30.06.2015

to 30.06.2016

(%)

1 year 30.06.2014

to 30.06.2015

(%)

Fund

5.04

0.86

14.17

0.79

6.42



MANAGER’S REPORT (CONTINUED) Analysis of Fund Performance

The portfolio’s overweight to Switzerland, as well as stock picks there, contributed the most to the relative outperformance during the review period. Drugmakers Novartis and Roche rose on healthy earnings amid a wider market advance. Fragrance and flavour maker Givaudan, consumer goods firm Nestle, as well as cocoa and chocolate producer Barry Callebaut similarly climbed on good operational performance. Our choice of stocks in Indonesia also boosted returns. Ace Hardware reported solid same-store-sales growth and exceeded its forecast of new stores opened this year. Shares in cement firm Indocement were lifted by robust sales. Other stock-level contributors included Japan’s Chugai Pharmaceutical, which rallied following good quarterly results and after positive trial data for its haemophilia drug, Hemlibra, suggests that the treatment can be used on a much larger pool of patients. Conversely, the exposure to Germany detracted from performance. In particular, chemical and consumer goods firm Henkel slid on the back of disappointing earnings caused by rising material prices and currency movements; we have exited the stock. Fresenius Medical Care slipped after it lowered its earnings target on slower-than-expected growth in dialysis services in its largest market of North America, partly due to a delay in new clinics being opened. We divested the medical supply firm following a string of profit warnings that hurt the management’s credibility. Chipmaker Infineon Technologies fell in tandem with the broader tech sector in May, under the pressure of escalating US-China tensions. Other detractors included Sysmex, a Japanese medical equipment supplier which reported sluggish sales due to slowing fundamentals and one-off issues. We believe the quality of its business remains intact, and growing healthcare needs will result in rising demand for medical diagnostics.

Market Review

Global equities rose over the period which was marked by the push-and-pull of US-China trade relations and a sharp pivot in the US Federal Reserve’s monetary policy. Stocks initially rallied on the back of positive macroeconomic data in major economies, good earnings growth and a strengthening US dollar, propelling the US S&P500 index to its longest bull run in history. Subsequently, a spike in US Treasury yields compelled investors to re-assess global stock valuations. At the end of 2018, as the US Federal Reserve withstood political pressure to raise rates for a fourth time in the year, the S&P 500 index slipped into bear-market territory, dragging global markets along. Stocks, however, rebounded quickly as the year turned, with investors cheering progress in US-China trade negotiations and the US Federal Reserve’s decision to stand pat on further rate hikes. The rally ended abruptly when the trade talks broke down and tensions escalated. At the end of the review period, however, optimism returned amid hopes of a fresh breakthrough ahead of the G20 summit. Faced with deteriorating macroeconomic data and reduced global growth forecasts, major central banks including the Federal Reserve and European Central Bank signalled their readiness to loosen monetary policy. By sector, consumer staples, healthcare and financials were the biggest gainers in the period. On the other hand, energy stocks fell the most, as oil prices were dampened by expanding US shale output and fears of slowing demand growth.

Market Outlook

Global stocks have been buoyed to new heights by expectations of central bank easing and the pronounced drop in government bond yields. This, however, could prove difficult to sustain without a corresponding expansion in profits which now appears increasingly difficult. The global growth outlook is becoming murkier, and business and consumer sentiment alike are being hit by the trade war. The direction of the market hinges on the eventual result of US-China trade talks. Other risks also remain, in the form of geopolitical skirmishes in the Middle East and a disruptive Brexit. On the other hand, monetary policy easing across most parts of the world should provide some support. Amid such market conditions, we take comfort from our bottom-up approach that identifies winners in a fast-changing world. Our holdings also have the requisite cash flows and robust balance sheets that buffer them against the uncertainty. While valuations have increased following the decent rally year-to-date, we still see pockets of value, and will take advantage of volatility to add to our favoured holdings.

MSCI AC World Islamic Index Aberdeen Islamic World Equity A Fund

Perc

enta

ge G

row

th (%

)

0

20

40

60

80

120

100

Feb 13 Jul 13 Dec 13 May 14 Oct 14 Mar 15 Aug 15 Jan 16 Jun 16 Nov 16 Apr 17 Sep 17 Feb 18 Jul 18 Dec 18 May 19

7



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 distributions payable (if any) during the stipulated period. An illustration of the above would be as follows: Capital Return = NAV per Unit End / NAV per Unit Beginning – 1 Income Return = Income Distribution per Unit / NAV per Unit Ex-Distribution Total Return = Capital Return x Income Return – 1 Class A- MYR Capital Return = {NAV per Unit @ 30.6.2019 ÷ NAV per Unit @ 30.06.2018 – 1} x 100 = {1.6379 ÷ 1.5593 – 1} x 100 = 5.0407% Income Return = {Income Distribution per Unit ÷ NAV per Unit Ex-Distribution} x 100 = Nil Total Return = [{(1+Capital Return) x (1+Income Return)} – 1] x 100 = [{(1 + 5.0407%) x (1 + 0%)} – 1] x 100 = 5.0407% Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up.




Market Review


Market Outlook


8




Market Review


Market Outlook



MANAGER’S REPORT (CONTINUED)

Investment Strategy

As bottom-up stock pickers, our asset allocation is a default and the sum of the individual companies, rather than being driven by top-down allocation. We are looking to manage portfolios that are concentrated, yet sufficiently diversified in terms of our holdings’ underlying businesses. As such, the top-down views from a geographical and sector perspective do not provide a true visibility of the diversification of the portfolio. About our country exposures, we have a substantial overweight to Switzerland due to our significant positions in pharmaceutical company Novartis and Roche, as well as food company Nestle, cocoa producer Barry Callebaut and high-quality vacuum valve maker VAT Group. Against this, we are underweight to the US as we continue to find more attractive opportunities in companies listed elsewhere. Having said that, we hold several US stocks, including beauty and skincare giant Estee Lauder and discount retailer TJX. By sector, we like companies in the consumer staples segment, such as L’Oreal, Nestle and Procter & Gamble, partly because of their exposure to domestic demand growth in emerging markets. Conversely, we have a lower exposure to the energy sector, due to our wariness about the cyclical nature of earnings that typifies the industry. The portfolio does, however, hold a few good-quality stocks, including oil producer EOG Resources and oilfield services provider Schlumberger.

Analysis of fund Performance

Share Class A - MYR

30.06.2019 %

30.06.2018

%

Change

% NAV (RM Million) 204.3 257.1 -20.54 NAV/Unit (RM) 1.6377 1.5592 5.03

The fund’s NAV drop by 20.54% to 204.3 million as at 30 Jun 2019. Likewise, the NAV per unit rose by 5.03% during the period.

Asset Allocation

As at 30.06.2019

% As at 30.06.2018

% As at 30.06.2017

%

Shariah-Compliant Equities 97.5 98.6 94.6 Cash 2.5 1.4 5.4

Total 100.0 100.0 100.0

Distribution/ Unit Split

No distribution or unit split was declared for the financial period ended 30 June 2019.




Market Review


Market Outlook


9




Market Review


Market Outlook




State of Affairs of the Fund

There has been no significant change to the state of affairs of the Fund, nor any circumstances that materially affected any interests of the unitholders during the period under review.

Soft Commissions

Soft commissions received from brokers or dealers are retained by the management company only if the goods and services provided are of demonstrable benefit to unitholders of the Fund as per requirements of Clause 11.33 and 11.34 of the Guidelines on Unit Trust Funds. During the period under review, the Manager and its delegates (if any) did not receive any soft commissions from stockbrokers or dealers.




Market Review


Market Outlook


10



Investment Strategy

As bottom-up stock pickers, our asset allocation is a default and the sum of the individual companies, rather than being driven by top-down allocation. We are looking to manage portfolios that are concentrated, yet sufficiently diversified in terms of our holdings’ underlying businesses. As such, the top-down views from a geographical and sector perspective do not provide a true visibility of the diversification of the portfolio. About our country exposures, we have a substantial overweight to Switzerland due to our significant positions in pharmaceutical company Novartis and Roche, as well as food company Nestle, cocoa producer Barry Callebaut and high-quality vacuum valve maker VAT Group. Against this, we are underweight to the US as we continue to find more attractive opportunities in companies listed elsewhere. Having said that, we hold several US stocks, including beauty and skincare giant Estee Lauder and discount retailer TJX. By sector, we like companies in the consumer staples segment, such as L’Oreal, Nestle and Procter & Gamble, partly because of their exposure to domestic demand growth in emerging markets. Conversely, we have a lower exposure to the energy sector, due to our wariness about the cyclical nature of earnings that typifies the industry. The portfolio does, however, hold a few good-quality stocks, including oil producer EOG Resources and oilfield services provider Schlumberger.

Analysis of fund Performance

Share Class A - MYR

30.06.2019 %

30.06.2018

%

Change

% NAV (RM Million) 204.3 257.1 -20.54 NAV/Unit (RM) 1.6377 1.5592 5.03

The fund’s NAV drop by 20.54% to 204.3 million as at 30 Jun 2019. Likewise, the NAV per unit rose by 5.03% during the period.

Asset Allocation

As at 30.06.2019

% As at 30.06.2018

% As at 30.06.2017

%

Shariah-Compliant Equities 97.5 98.6 94.6 Cash 2.5 1.4 5.4

Total 100.0 100.0 100.0

Distribution/ Unit Split

No distribution or unit split was declared for the financial period ended 30 June 2019.


STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Note 2019 2018

RM

RM

SHARIAH-COMPLIANT NET INVESTMENT INCOME

Dividend income

Net gain on financial assets at fair value 5,053,013 5,965,678

through profit or loss (Shariah-compliant) 6 11,303,730 2,242,866

Net foreign currency exchange loss

(496,941)

(510,059)

15,859,802

7,698,485

EXPENSES

Management fee 3 4,009,965 4,219,684

Trustee’s and custodian fees 4 261,826 273,378

Audit fee

8,504

6,600

Tax agent’s fee

15,000

15,000

Transaction costs 135,764 98,071

Payment to charitable bodies 115,038 141,245

Other expenses

956,461

1,435,118

5,502,558 6,189,096

PROFIT BEFORE TAXATION 10,357,244

1,509,389

Taxation 5 - -

INCREASE IN NET ASSETS ATTRIBUTABLE 10,357,244 1,509,389

TO UNITHOLDERS

Increase in net assets attributable to unitholders

comprises the following:

Realised amount

9,132,769

(2,297,155)

Unrealised amount 1,224,475 3,806,544

10,357,244

1,509,389

The accompanying summary of significant accounting policies and notes to the financial statements form an integral part of these financial statements.





Market Review


Market Outlook


11



State of Affairs of the Fund

There has been no significant change to the state of affairs of the Fund, nor any circumstances that materially affected any interests of the unitholders during the period under review.

Soft Commissions

Soft commissions received from brokers or dealers are retained by the management company only if the goods and services provided are of demonstrable benefit to unitholders of the Fund as per requirements of Clause 11.33 and 11.34 of the Guidelines on Unit Trust Funds. During the period under review, the Manager and its delegates (if any) did not receive any soft commissions from stockbrokers or dealers.


STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

Note 2019 2018

RM RM

CURRENT ASSETS

Cash and cash equivalents

7

10,298,813

5,750,634

Financial assets at fair value through profit or

loss (Shariah-compliant) 6 199,971,737 254,407,921

Amount due from Manager - Creation of units

353,426

39,530

Dividends receivable

277,139

276,117

Amount due from stockbrokers 390,535 1,142,531

TOTAL ASSETS 211,291,650 261,616,733

CURRENT LIABILITIES

Amount due to stockbrokers 1,655,615 3,387,341

Amount due to Manager

- Management fee

613,795

783,372

- Cancellation of units 4,554,274 306,431

Amount due to Trustee 13,737 16,986

Other payables and accruals

135,589

29,040

TOTAL LIABILITIES (EXCLUDING NET ASSETS ATTRIBUTABLE 6,973,010 4,523,170 TO UNITHOLDERS)

NET ASSET VALUE OF THE FUND

204,318,640

257,093,563

NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

204,318,640

257,093,563

REPRESENTED BY:

FAIR VALUE OF OUTSTANDING UNITS – CLASS A - MYR

204,318,640

257,093,563

– CLASS A - USD - -

– CLASS A - SGD - -

– CLASS A - AUD -

-

– CLASS I - MYR -

-

204,318,640 257,093,563






Market Review


Market Outlook


12


STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019 (CONTINUED)

Note 2019 2018

RM RM

NUMBER OF UNITS IN CIRCULATION 9

– CLASS A - MYR

124,759,626

164,885,376



– CLASS A - AUD -

-

– CLASS I - MYR -

-

NAV PER UNIT (RM) – CLASS A - MYR

1.6377

1.5592



– CLASS A - AUD -

-

– CLASS I - MYR -

-

Note 2019 2018

RM RM

NAV PER UNIT (IN RESPECTIVE CURRENCIES) – CLASS A - MYR

MYR 1.6377

MYR 1.5592



– CLASS A - AUD -

-

– CLASS I - MYR -

-



STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

2019 2018

RM RM


AT THE BEGINNING OF THE FINANCIAL YEAR 257,093,563

197,501,837

Movement due to units created and cancelled during the financial year: - Creation of units arising from applications 38,108,489 84,194,924

- Cancellation of units (101,240,656) (26,112,587)

193,961,396

255,584,174


during the financial year

10,357,244

1,509,389

NET ASSETS ATTRIBUTABLE TO

UNITHOLDERS AT THE END OF THE FINANCIAL YEAR 204,318,640

257,093,563


13

14


STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 Note 2019 2018

RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Proceeds from sale of quoted Shariah-compliant securities 149,446,007 44,394,908

Purchase of quoted Shariah-compliant securities

(84,752,005)

(107,846,506)

Dividend income received

5,049,755

5,989,982

Management fee paid (4,179,542) (3,714,279)

Trustee's fee paid (186,562) (188,624)

Tax paid

-

-

Payment of other fees and expenses

(1,202,733)

(1,783,798)

Net realised foreign exchange loss (507,601)

(504,400)

Proceeds from capital repayment 78,678

-

Net cash generated from/(used in) operating activities 63,745,997

(63,652,717)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from creation of units 37,794,593 87,260,506

Payments for cancellation of units (96,992,813) (25,806,157)

Net cash (used in)/generated from financing activities

(59,198,220)

61,454,349

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

4,547,777

(2,198,368)

Effect of foreign exchange differences 402 (1)

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE FINANCIAL YEAR 5,750,634 7,949,003

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR

7

10,298,813

5,750,634

Cash and cash equivalent comprise of:

Bank balances 7 10,298,813 5,750,634



STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019 (CONTINUED)

Note 2019 2018

RM RM

NUMBER OF UNITS IN CIRCULATION 9

– CLASS A - MYR

124,759,626

164,885,376



– CLASS A - AUD -

-

– CLASS I - MYR -

-

NAV PER UNIT (RM) – CLASS A - MYR

1.6377

1.5592



– CLASS A - AUD -

-

– CLASS I - MYR -

-

Note 2019 2018

RM RM

NAV PER UNIT (IN RESPECTIVE CURRENCIES) – CLASS A - MYR

MYR 1.6377

MYR 1.5592



– CLASS A - AUD -

-

– CLASS I - MYR -

-


15


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”).

The financial statements have been prepared under the historical cost conventions as modified by the financial assets and financial liabilities at fair value through profit or loss (“FVTPL”).

The preparation of financial statements in conformity with MFRS and IFRS 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. The Manager believes that the underlying assumptions are appropriate and the Fund’s financial statements therefore present the financial position results fairly. 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 M.

(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 July 2018: • MFRS 9 ‘Financial Instruments’ became effective for annual periods beginning on or after 1 January 2018. It addresses the classification, measurement and recognition of financial assets and liabilities and replaces the multiple classification and measurement models in MFRS 139. Classification and measurement of debt assets is driven by the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. A debt instrument is measured at amortised cost if the objective of the business model is to hold the financial asset for the collection of the contractual cash flows and the contractual cash flows under the instrument solely represent payments of principal and interest* (SPPI). A debt instrument^ is measured at fair value through other comprehensive income if the objective of the business model is to hold the financial asset both to collect contractual cash flows from SPPI and to sell. All other debt instruments must be recognised at fair value through profit or loss. An entity may however, at initial recognition, irrevocably designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency. Derivative and equity instruments** are measured at fair value through profit or loss unless, for equity instruments not held for trading, an irrevocable option is taken to measure at fair value through other comprehensive income. IFRS 9 also introduces a new expected credit loss (ECL) impairment model. MFRS 9 has been applied retrospectively by the Fund and did not result in a change to the classification or measurement of financial instruments as outlined in Note F.

The Fund’s investment portfolio continues to be classified as fair value through profit or loss and other financial assets which are held for collection continue to be measured at amortised cost. There was no material impact on adoption from the application of the new impairment model.

There are no other standards, amendments to standards or interpretations that are effective for annual periods beginning on 1 July 2018 that have a material effect on the financial statements of the Fund.

^ For the purpose of this Fund, debt instrument refers to Shariah-compliant instruments * For the purpose of this Fund, interest refers to profit earned from Shariah-compliant investments. ** For the purposes of the investments made by the Fund, equity instruments and derivatives refer to Shariah-compliant equity instruments and Islamic derivatives.


STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

2019 2018

RM RM


AT THE BEGINNING OF THE FINANCIAL YEAR 257,093,563

197,501,837

Movement due to units created and cancelled during the financial year: - Creation of units arising from applications 38,108,489 84,194,924

- Cancellation of units (101,240,656) (26,112,587)

193,961,396

255,584,174


during the financial year

10,357,244

1,509,389

NET ASSETS ATTRIBUTABLE TO

UNITHOLDERS AT THE END OF THE FINANCIAL YEAR 204,318,640

257,093,563


16


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED) (b) The new standards and amendments to the published standards that are applicable to the Fund but not

yet effective and have not been adopted: ● Amendment to MFRS 112 ‘Income Taxes’ (effective from 1 January 2019) clarify that where income tax consequences of dividends on financial instruments classified as equity is recognised (either in profit or loss, other comprehensive income or equity) depends on where the past transactions that generated distributable profits were recognised. Accordingly, the tax consequences are recognised in profit or loss when an entity determines payments on such instruments are distribution of profits (that is, dividends). Tax on dividend should not be recognised in equity merely on the basis that it is related to distribution to owners. The Fund will apply this amendment when effective. This amendments are not expected to have a significant impact on the Fund’s statements.

B. INCOME RECOGNITION Profit income from Islamic deposits with licensed financial institutions is recognised based on effective profit method on an accrual and time proportional basis. Up till 30 June 2018, profit income is calculated by applying the effective profit rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective profit rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance). From 1 July 2018, when a receivable is impaired, the Fund reduce the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective profit rate of the instrument, and continue unwinding the discount as profit income. Profit income on impaired receivables are recognised using the original effective profit rate.

Dividend income is recognised on the ex-dividend date, when the right to receive the dividend has been established.

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.

Realised gains and losses on sale of Shariah-compliant investments are accounted for as the difference between the net disposal proceeds and the carrying amount of Shariah-compliant investments, determined on a weighted average cost basis.

Shariah non-compliant investments will be disposed off the soonest practical. In the event the investment resulted in gain (through capital gain and/or dividend), the gain is to be channelled to baitulmal or any other charitable bodies as advised by the Shariah Adviser and approved by the Trustee. If the disposal of the investment resulted in losses to the Funds, the losses are to be borne by the Manager. The amount is recognised as an expense in the statement of comprehensive income.

C. TRANSACTION COSTS

Transaction costs are costs incurred to acquire or dispose financial assets or liabilities at fair value through profit or loss. They the bid-ask spreads, include 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.


STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 Note 2019 2018

RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Proceeds from sale of quoted Shariah-compliant securities 149,446,007 44,394,908

Purchase of quoted Shariah-compliant securities

(84,752,005)

(107,846,506)

Dividend income received

5,049,755

5,989,982

Management fee paid (4,179,542) (3,714,279)

Trustee's fee paid (186,562) (188,624)

Tax paid

-

-

Payment of other fees and expenses

(1,202,733)

(1,783,798)

Net realised foreign exchange loss (507,601)

(504,400)

Proceeds from capital repayment 78,678

-

Net cash generated from/(used in) operating activities 63,745,997

(63,652,717)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from creation of units 37,794,593 87,260,506

Payments for cancellation of units (96,992,813) (25,806,157)

Net cash (used in)/generated from financing activities

(59,198,220)

61,454,349

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

4,547,777

(2,198,368)

Effect of foreign exchange differences 402 (1)

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE FINANCIAL YEAR 5,750,634 7,949,003

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR

7

10,298,813

5,750,634

Cash and cash equivalent comprise of:

Bank balances 7 10,298,813 5,750,634


17


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”).

The financial statements have been prepared under the historical cost conventions as modified by the financial assets and financial liabilities at fair value through profit or loss (“FVTPL”).

The preparation of financial statements in conformity with MFRS and IFRS 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. The Manager believes that the underlying assumptions are appropriate and the Fund’s financial statements therefore present the financial position results fairly. 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 M.

(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 July 2018: • MFRS 9 ‘Financial Instruments’ became effective for annual periods beginning on or after 1 January 2018. It addresses the classification, measurement and recognition of financial assets and liabilities and replaces the multiple classification and measurement models in MFRS 139. Classification and measurement of debt assets is driven by the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. A debt instrument is measured at amortised cost if the objective of the business model is to hold the financial asset for the collection of the contractual cash flows and the contractual cash flows under the instrument solely represent payments of principal and interest* (SPPI). A debt instrument^ is measured at fair value through other comprehensive income if the objective of the business model is to hold the financial asset both to collect contractual cash flows from SPPI and to sell. All other debt instruments must be recognised at fair value through profit or loss. An entity may however, at initial recognition, irrevocably designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency. Derivative and equity instruments** are measured at fair value through profit or loss unless, for equity instruments not held for trading, an irrevocable option is taken to measure at fair value through other comprehensive income. IFRS 9 also introduces a new expected credit loss (ECL) impairment model. MFRS 9 has been applied retrospectively by the Fund and did not result in a change to the classification or measurement of financial instruments as outlined in Note F.

The Fund’s investment portfolio continues to be classified as fair value through profit or loss and other financial assets which are held for collection continue to be measured at amortised cost. There was no material impact on adoption from the application of the new impairment model.

There are no other standards, amendments to standards or interpretations that are effective for annual periods beginning on 1 July 2018 that have a material effect on the financial statements of the Fund.

^ For the purpose of this Fund, debt instrument refers to Shariah-compliant instruments * For the purpose of this Fund, interest refers to profit earned from Shariah-compliant investments. ** For the purposes of the investments made by the Fund, equity instruments and derivatives refer to Shariah-compliant equity instruments and Islamic derivatives.


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) D. TAXATION

Current tax expense is determined according to the Malaysian tax laws at the current rate based on the taxable profit earned during the financial year. Withholding taxes on dividend income from foreign investments are based on tax regime of the respective countries that the Fund invests in. Such withholding taxes are not "income tax" in nature and are recognised and measured based on the requirements of MFRS 137 "Provisions, Contingent Liabilities and Contingent Assets". They are presented within other expenses line in the statement of comprehensive income.

E. FOREIGN CURRENCY

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 (“RM”), which is the Fund’s functional and presentation currency. Due to mixed factors in determining the functional currency of the Fund, the Manager has used its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and have determined the functional currency to be in RM primarily due to the following factors:

• Part of the Fund's cash is denominated in RM for the purpose of making settlement of the creation and cancellation.

• The Fund's units are denominated in RM.

• The Fund's significant expenses are denominated in RM.

Transactions and balances 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 year-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.

F. FINANCIAL ASSETS AND FINANCIAL LIABILITES (i) Classification

Up to 30 June 2018, the Fund designates its investments in quoted Shariah-compliant equity securities 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. 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 receivables comprise cash and cash equivalents, amount due from Manager, amount due from stockbroker and dividends receivable. 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 stockbrokers, amount due to Trustee, other payables and accruals as other financial liabilities. From 1 July 2018, the Fund classify its financial assets in the following measurement categories: • those to be measured subsequently at fair value (either through other comprehensive income

(‘OCI’) or through profit or loss), and • those to be measured at amortised cost

18


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED) (b) The new standards and amendments to the published standards that are applicable to the Fund but not

yet effective and have not been adopted: ● Amendment to MFRS 112 ‘Income Taxes’ (effective from 1 January 2019) clarify that where income tax consequences of dividends on financial instruments classified as equity is recognised (either in profit or loss, other comprehensive income or equity) depends on where the past transactions that generated distributable profits were recognised. Accordingly, the tax consequences are recognised in profit or loss when an entity determines payments on such instruments are distribution of profits (that is, dividends). Tax on dividend should not be recognised in equity merely on the basis that it is related to distribution to owners. The Fund will apply this amendment when effective. This amendments are not expected to have a significant impact on the Fund’s statements.

B. INCOME RECOGNITION Profit income from Islamic deposits with licensed financial institutions is recognised based on effective profit method on an accrual and time proportional basis. Up till 30 June 2018, profit income is calculated by applying the effective profit rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective profit rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance). From 1 July 2018, when a receivable is impaired, the Fund reduce the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective profit rate of the instrument, and continue unwinding the discount as profit income. Profit income on impaired receivables are recognised using the original effective profit rate.

Dividend income is recognised on the ex-dividend date, when the right to receive the dividend has been established.

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.

Realised gains and losses on sale of Shariah-compliant investments are accounted for as the difference between the net disposal proceeds and the carrying amount of Shariah-compliant investments, determined on a weighted average cost basis.

Shariah non-compliant investments will be disposed off the soonest practical. In the event the investment resulted in gain (through capital gain and/or dividend), the gain is to be channelled to baitulmal or any other charitable bodies as advised by the Shariah Adviser and approved by the Trustee. If the disposal of the investment resulted in losses to the Funds, the losses are to be borne by the Manager. The amount is recognised as an expense in the statement of comprehensive income.

C. TRANSACTION COSTS

Transaction costs are costs incurred to acquire or dispose financial assets or liabilities at fair value through profit or loss. They the bid-ask spreads, include 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.


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) F. FINANCIAL ASSETS AND FINANCIAL LIABILITES (CONTINUED)

(i) Classification (continued)

The Fund classifies its investments based on both the Fund’s business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The Fund is primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The Fund has not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. The contractual cash flows of the Fund’s debt securities are solely principal and interest*, however, these securities are neither held for the purpose of collecting contractual cash flows nor held both for collecting contractual cash flows and for sale. The collection of contractual cash flows is only incidental to achieving the Fund’s business model’s objective. Consequently, all investments are measured at fair value through profit or loss. The Fund classifies cash and cash equivalents, amount due from Manager and dividend receivables at amortised cost as these financial assets are held to collect contractual cash flows consisting of the amount outstanding. The Fund classifies amount due to Manager, amount due to stockbrokers, amount due to Trustee and other payables and accruals as financial liabilities.

(ii) Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-dates, the date on which the Fund commits to purchase or sell the asset. Shariah-compliant investments are initially recognised at fair value. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with gain and loss are recognised in the statement of comprehensive income. Transaction costs are expensed in the statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the Shariah-compliant investments have expired or have been transferred and the Fund has transferred substantially all risks and rewards of ownership. Financial liabilities, within the scope of MFRS 139 up to 30 June 2018 and MFRS 9 from 1 July 2018, 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 liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expired. Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are presented in the statement of comprehensive income within net gain or loss on financial assets at fair value through profit and loss in the 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. Prior to 1 July 2013, foreign quoted Shariah-compliant investments are valued at the bid prices quoted on the respective foreign stock exchanges at the close of the business day of the respective foreign stock exchanges. The Fund adopted MFRS 13 “Fair Value Measurement” from 1 July 2013 and changed its fair valuation inputs to utilise the last traded market price quoted on the respective foreign stock exchanges at the close of the business day of the respective foreign stock exchanges for foreign quoted investments. * For the purpose of this Fund, interest refers to profit earned from Shariah-compliant investments.

19


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) D. TAXATION

Current tax expense is determined according to the Malaysian tax laws at the current rate based on the taxable profit earned during the financial year. Withholding taxes on dividend income from foreign investments are based on tax regime of the respective countries that the Fund invests in. Such withholding taxes are not "income tax" in nature and are recognised and measured based on the requirements of MFRS 137 "Provisions, Contingent Liabilities and Contingent Assets". They are presented within other expenses line in the statement of comprehensive income.

E. FOREIGN CURRENCY

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 (“RM”), which is the Fund’s functional and presentation currency. Due to mixed factors in determining the functional currency of the Fund, the Manager has used its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and have determined the functional currency to be in RM primarily due to the following factors:

• Part of the Fund's cash is denominated in RM for the purpose of making settlement of the creation and cancellation.

• The Fund's units are denominated in RM.

• The Fund's significant expenses are denominated in RM.

Transactions and balances 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 year-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.

F. FINANCIAL ASSETS AND FINANCIAL LIABILITES (i) Classification

Up to 30 June 2018, the Fund designates its investments in quoted Shariah-compliant equity securities 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. 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 receivables comprise cash and cash equivalents, amount due from Manager, amount due from stockbroker and dividends receivable. 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 stockbrokers, amount due to Trustee, other payables and accruals as other financial liabilities. From 1 July 2018, the Fund classify its financial assets in the following measurement categories: • those to be measured subsequently at fair value (either through other comprehensive income

(‘OCI’) or through profit or loss), and • those to be measured at amortised cost


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) F. FINANCIAL ASSETS AND FINANCIAL LIABILITES (CONTINUED) (ii) Recognition and measurement (Continued)

If a valuation based on the market price does not represent the fair value of the Quoted Shariah-compliant 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 Quoted Shariah-compliant 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.

Islamic deposits with licensed Islamic financial institutions are stated at cost plus accrued profit calculated on the effective profit method over the year from the date of placement to the date of maturity of the respective Islamic deposits.

Receivables and other liabilities are subsequently carried at amortised cost using the effective profit method.

(iii) Impairment

Until 30 June 2018, 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 profit rate. The asset’s carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If ‘receivables’ has a variable interest rate, the discount rate for measuring any impairment loss is the current effective profit 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 financial 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 the 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. From 1 July 2018 onwards, the Fund measures credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward looking information in determining any expected credit loss. Management consider the probability of default to be close to zero as these instruments have a low risk of default and the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised based on 12 month expected credit losses as any such impairment would be wholly insignificant to the Fund.

20



(i) Classification (continued)

The Fund classifies its investments based on both the Fund’s business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The Fund is primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The Fund has not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. The contractual cash flows of the Fund’s debt securities are solely principal and interest*, however, these securities are neither held for the purpose of collecting contractual cash flows nor held both for collecting contractual cash flows and for sale. The collection of contractual cash flows is only incidental to achieving the Fund’s business model’s objective. Consequently, all investments are measured at fair value through profit or loss. The Fund classifies cash and cash equivalents, amount due from Manager and dividend receivables at amortised cost as these financial assets are held to collect contractual cash flows consisting of the amount outstanding. The Fund classifies amount due to Manager, amount due to stockbrokers, amount due to Trustee and other payables and accruals as financial liabilities.

(ii) Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-dates, the date on which the Fund commits to purchase or sell the asset. Shariah-compliant investments are initially recognised at fair value. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with gain and loss are recognised in the statement of comprehensive income. Transaction costs are expensed in the statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the Shariah-compliant investments have expired or have been transferred and the Fund has transferred substantially all risks and rewards of ownership. Financial liabilities, within the scope of MFRS 139 up to 30 June 2018 and MFRS 9 from 1 July 2018, 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 liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expired. Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are presented in the statement of comprehensive income within net gain or loss on financial assets at fair value through profit and loss in the 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. Prior to 1 July 2013, foreign quoted Shariah-compliant investments are valued at the bid prices quoted on the respective foreign stock exchanges at the close of the business day of the respective foreign stock exchanges. The Fund adopted MFRS 13 “Fair Value Measurement” from 1 July 2013 and changed its fair valuation inputs to utilise the last traded market price quoted on the respective foreign stock exchanges at the close of the business day of the respective foreign stock exchanges for foreign quoted investments. * For the purpose of this Fund, interest refers to profit earned from Shariah-compliant investments.



(iii) Impairment (Continued) Significant increase in credit risk A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days past due. Definition of default and credit-impaired financial assets Any contractual payment which is more than 90 days past due is considered credit impaired. Write-off The Fund write off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and has concluded there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay the amount. The Fund may write-off financial assets that are still subject to enforcement activity. Subsequent recoveries of amounts previously written off will result in impairment gains. There are no write-offs/recoveries during the financial year.

G. AMOUNT DUE FROM/TO STOCKBROKERS

Amount due from and amount due to stockbrokers represent receivables for Shariah-compliant securities sold and payables for Shariah-compliant 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 profit method, less provision for impairment for amounts due from stockbrokers. A provision for impairment of amounts due from stockbrokers is established when there is objective evidence that the Fund will not be able to collect all amounts due from the relevant stockbroker. Significant financial difficulties of the stockbroker, probability that the stockbroker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from stockbrokers is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, profit income is recognised using the rate of profit used to discount the future cash flows for the purpose of measuring the impairment loss.

The effective profit method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the profit income or financing expense over the relevant period. The effective profit 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 profit 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 profit rate, transaction costs and all other premiums or discounts.

H. CASH AND CASH EQUIVALENTS

For the purpose of the statement of cash flows, cash and cash equivalents comprise cash and bank balances that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED)

I. CREATION AND CANCELLATION OF UNITS

In the previous financial year, the Fund classified its puttable instruments as equity in accordance with MFRS 132 (Amendment) “Financial Instruments: Presentation”. The Fund issues cancellable units, in two classes of units, known respectively as Class A, targeted at retail investors and Class I, targeted at institutional investors, which are cancelled at the unit holder’s option and do not have identical features. In accordance with MFRS 132 (Amendment) “Financial Instruments: Presentation”, such units, by virtue of not having identical features, are classified as financial liabilities. Cancellable units can be put back to the Fund at any time for cash equal to a proportionate share of the Fund’s net asset value (“NAV”) of respective classes. The outstanding units are carried at the redemption amount that is payable at the statement of financial position if the unitholder exercises the right to put back the unit to the Fund. Each class of units is also offered in different currency denominations, i.e. Ringgit Malaysia, US Dollars, Singapore Dollars and Australian Dollars. The US Dollars, Singapore Dollars and Australian Dollars denominated classes are not offered for sale for the financial year ended 30 June 2019. Units are created and cancelled at the unitholder’s option at prices based on the Fund’s NAV per unit of respective classes at the close of business on the relevant dealing day. The Fund’s NAV per unit of respective classes is calculated by dividing the net assets attributable to unitholders of respective classes with the total number of outstanding units of respective classes.

J. INCREASE/DECREASE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

Profit not distributed is included in net assets attributable to unitholders.

K. SEGMENT INFORMATION 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 Investment Committee of the Fund’s Manager that undertakes strategic decisions for the Fund.

L. FAIR VALUE OF FINANCIAL INSTRUMENTS Financial instruments comprise financial assets and financial liabilities. Fair value is the amount at which a financial asset could be exchanged or a financial liability settled, between knowledgeable and willing parties in an arm’s length transaction. The information presented herein represents the estimates of fair values as at the statement of financial position.

M. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES

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 content of the estimates, certain key variables that are anticipated to have material impact to the Fund’s results and financial position are tested for sensitivity to changes in the underlying parameters. Estimates and judgments 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. In undertaking any of the Fund’s investment, the Manager will ensure that all assets of the Fund under management will be valued appropriately, that is at fair value and in compliance with the Securities Commission Guidelines on Unit Trust Funds.

However, the Manager is of the opinion that there are no accounting policies which require significant judgement to be exercised.

21


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) F. FINANCIAL ASSETS AND FINANCIAL LIABILITES (CONTINUED) (ii) Recognition and measurement (Continued)

If a valuation based on the market price does not represent the fair value of the Quoted Shariah-compliant 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 Quoted Shariah-compliant 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.

Islamic deposits with licensed Islamic financial institutions are stated at cost plus accrued profit calculated on the effective profit method over the year from the date of placement to the date of maturity of the respective Islamic deposits.

Receivables and other liabilities are subsequently carried at amortised cost using the effective profit method.

(iii) Impairment

Until 30 June 2018, 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 profit rate. The asset’s carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If ‘receivables’ has a variable interest rate, the discount rate for measuring any impairment loss is the current effective profit 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 financial 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 the 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. From 1 July 2018 onwards, the Fund measures credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward looking information in determining any expected credit loss. Management consider the probability of default to be close to zero as these instruments have a low risk of default and the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised based on 12 month expected credit losses as any such impairment would be wholly insignificant to the Fund.

22



(iii) Impairment (Continued) Significant increase in credit risk A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days past due. Definition of default and credit-impaired financial assets Any contractual payment which is more than 90 days past due is considered credit impaired. Write-off The Fund write off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and has concluded there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay the amount. The Fund may write-off financial assets that are still subject to enforcement activity. Subsequent recoveries of amounts previously written off will result in impairment gains. There are no write-offs/recoveries during the financial year.

G. AMOUNT DUE FROM/TO STOCKBROKERS

Amount due from and amount due to stockbrokers represent receivables for Shariah-compliant securities sold and payables for Shariah-compliant 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 profit method, less provision for impairment for amounts due from stockbrokers. A provision for impairment of amounts due from stockbrokers is established when there is objective evidence that the Fund will not be able to collect all amounts due from the relevant stockbroker. Significant financial difficulties of the stockbroker, probability that the stockbroker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from stockbrokers is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, profit income is recognised using the rate of profit used to discount the future cash flows for the purpose of measuring the impairment loss.

The effective profit method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the profit income or financing expense over the relevant period. The effective profit 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 profit 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 profit rate, transaction costs and all other premiums or discounts.

H. CASH AND CASH EQUIVALENTS

For the purpose of the statement of cash flows, cash and cash equivalents comprise cash and bank balances that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 1. INFORMATION ON THE FUND

The Fund was constituted under the name of Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund) (the “Fund”) pursuant to the execution of a Deed dated 10 September 2012 as amended by the Supplemental Deed dated 11 March 2013, Second Supplemental Deed dated 27 March 2015, Third Supplemental Deed dated 16 October 2015 and Fourth Supplemental Deed dated 13 November 2018 (collectively referred to as the “Deeds”) between Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd (formerly known as Aberdeen Islamic Asset Management Sdn Bhd) (the “Manager”) and Deutsche Trustees Malaysia Berhad (the “Trustee”). The Fund seeks to achieve capital appreciation in the long term through investments in Shariah-compliant equities and equity related securities. The Fund is a multi-class Fund which offers only class A. The US Dollars, Singapore Dollars, Australian Dollars, Euro and Sterlings denominated classes are not offered for sale for the financial period ended 30 June 2019. All investments will be subjected to the Securities Commission (“SC”)’s Guidelines on Unit Trust Funds, SC’s requirements, the Deeds approved and the objective of the Fund, except where exemptions or variations have been approved by SC, internal policies and procedures and the Fund’s objective.

The Manager is a company incorporated in Malaysia. The principal activities of the Manager are establishment and management of Unit Trust Funds.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks which include market risk (including price risk and currency risk), credit risk, liquidity risk, non-compliance risk, reclassification of Shariah status 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 prospectus and the SC’s Guidelines on Unit Trust Funds.

Financial instruments of the Fund are as follows:

Financial assets

Financial assets at fair value

at amortised

through profit Note cost or loss Total

As at 30 June 2019 RM RM RM


7

10,298,813

-

10,298,813

Quoted Shariah-compliant

securities

6

-

199,971,737

199,971,737

Amount due from Manager

353,426

-

353,426


277,139

-

277,139

Amount due from stockbrokers

390,535

-

390,535

Total 11,319,913 199,971,737 211,291,650


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED)

I. CREATION AND CANCELLATION OF UNITS

In the previous financial year, the Fund classified its puttable instruments as equity in accordance with MFRS 132 (Amendment) “Financial Instruments: Presentation”. The Fund issues cancellable units, in two classes of units, known respectively as Class A, targeted at retail investors and Class I, targeted at institutional investors, which are cancelled at the unit holder’s option and do not have identical features. In accordance with MFRS 132 (Amendment) “Financial Instruments: Presentation”, such units, by virtue of not having identical features, are classified as financial liabilities. Cancellable units can be put back to the Fund at any time for cash equal to a proportionate share of the Fund’s net asset value (“NAV”) of respective classes. The outstanding units are carried at the redemption amount that is payable at the statement of financial position if the unitholder exercises the right to put back the unit to the Fund. Each class of units is also offered in different currency denominations, i.e. Ringgit Malaysia, US Dollars, Singapore Dollars and Australian Dollars. The US Dollars, Singapore Dollars and Australian Dollars denominated classes are not offered for sale for the financial year ended 30 June 2019. Units are created and cancelled at the unitholder’s option at prices based on the Fund’s NAV per unit of respective classes at the close of business on the relevant dealing day. The Fund’s NAV per unit of respective classes is calculated by dividing the net assets attributable to unitholders of respective classes with the total number of outstanding units of respective classes.

J. INCREASE/DECREASE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

Profit not distributed is included in net assets attributable to unitholders.

K. SEGMENT INFORMATION 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 Investment Committee of the Fund’s Manager that undertakes strategic decisions for the Fund.

L. FAIR VALUE OF FINANCIAL INSTRUMENTS Financial instruments comprise financial assets and financial liabilities. Fair value is the amount at which a financial asset could be exchanged or a financial liability settled, between knowledgeable and willing parties in an arm’s length transaction. The information presented herein represents the estimates of fair values as at the statement of financial position.

M. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES

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 content of the estimates, certain key variables that are anticipated to have material impact to the Fund’s results and financial position are tested for sensitivity to changes in the underlying parameters. Estimates and judgments 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. In undertaking any of the Fund’s investment, the Manager will ensure that all assets of the Fund under management will be valued appropriately, that is at fair value and in compliance with the Securities Commission Guidelines on Unit Trust Funds.

However, the Manager is of the opinion that there are no accounting policies which require significant judgement to be exercised.

23


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED)

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

Financial instruments of the Fund are as follows (continued):

Financial assets

at fair value

through profit

Note Receivables or loss Total

As at 30 June 2018 RM RM RM


7

5,750,634

-

5,750,634

Quoted Shariah-compliant

securities

6

-

254,407,921

254,407,921

Amount due from Manager

39,530

-

39,530


276,117

-

276,117


1,142,531

-

1,142,531

Total 7,208,812 254,407,921 261,616,733

All current liabilities are financial liabilities which are carried at amortised cost.

Market risk

(i) Price risk

Price risk arises mainly due to uncertainty on the future prices of Shariah-compliant 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 table below shows the financial instruments of the Fund which are exposed to price risk.

2019 2018 RM RM

Quoted Shariah-compliant securities designated at fair value through profit or loss 199,971,737 254,407,921

The following table summarises the sensitivity of the Fund’s net asset value (NAV) and profit after taxation to movements in prices of investments at the end of the reporting period. The analysis is based on the assumptions that the market price of investments fluctuates by 5% with all other variables held constant. This represents the Manager’s best estimate of a reasonable possible shift in investments, having regard to the historical volatility of the prices.




Market risk (Continued)

(i) Price risk (continued)

Impact on

% change in price of quoted Shariah-compliant profit after

securities Market value taxation/NAV

As at 30 June 2019 RM

RM

-5% 189,973,150 (9,998,587)

0% 199,971,737 -

+5% 209,970,324 9,998,587

Impact on profit after

taxation/NAV

% change in price of quoted Shariah-compliant

securities Market value

As at 30 June 2018 RM RM

-5% 241,687,525 (12,720,396)

0% 254,407,921 -

+5% 267,128,317 12,720,396

(ii) 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 a foreign currency versus Ringgit Malaysia based on considerations of economic fundamentals such as profit rate differentials, balance of payments position, debt levels, and technical chart considerations.

Cash

Quoted shariah-

Amount due

and cash

compliant

from

Dividends

equivalents securities

Stockbrokers Receivable Total


RM

RM

RM

RM

AUD - 9,103,812

- - 9,103,812

BRL - 4,590,596

- 18,322 4,608,918

CAD - 4,573,835

- 27,663 4,601,498

CHF - 24,497,398

- - 24,497,398

EUR - 32,333,823

- - 32,333,823

HKD - 6,740,873

- 70,629 6,811,502

IDR - -

390,535 - 390,535

GBP -

9,372,445

-

-

9,372,445

JPY - 13,625,684

- 53,287 13,678,971

SEK - 4,324,675

- - 4,324,675

SGD - 2,339,998

- 45,000 2,384,998

USD 5,458,541 88,468,598

- 62,238 93,989,377

5,458,541 199,971,737

390,535

277,139

206,097,952

24


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

Market risk (continued)

(ii) Currency risk (continued)

Cash

Quoted Shariah-

Amount due

and cash

compliant

from

Dividends




RM

RM

RM

RM

AUD -

5,984,956

-

-

5,984,956

BRL -

3,017,151

-

11,453

3,028,604

CAD -

4,030,057

-

16,887

4,046,944

CHF -

23,686,435

-

-

23,686,435

DKK -

2,764,998

-

-

2,764,998

EUR -

50,727,357

-

36,826

50,764,183

HKD 699,342

12,671,787

-

65,651

13,436,780

IDR -

5,567,250

-

-

5,567,250

INR -

3,280,318

-

-

3,280,318

GBP -

18,914,881

-

-

18,914,881

JPY -

29,894,152

1,142,531

73,891

31,110,574

KRW -

4,929,589

-

-

4,929,589

SEK -

10,689,251

-

-

10,689,251

SGD -

5,446,680

-

38,196

5,484,876

TRY -

3,157,664

-

-

3,157,664

USD -

68,193,700

-

33,213

68,226,913

ZAR -

1,451,695

-

-

1,451,695

699,342

254,407,921

1,142,531

276,117

256,525,911

The table below summarises the sensitivity of the Fund's investments fair 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 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.

25



Credit risk

Credit risk refers to the risk that an issuer or counterparty will default on its contractual obligation to make timely payments of profit, principals and proceeds resulting in financial loss to the Fund. The Manager manages the credit risk by undertaking credit evaluation to minimise such risk.

Credit risk arising from cash and cash equivalents is managed by ensuring that the Fund will only place Islamic deposits in reputable licensed financial institutions.

The settlement terms of the proceeds from the creation of units receivable from the Manager and redemption of units payable to the Manager are governed by the SC’s Guidelines on Unit Trust Funds.

For amount due from stockbrokers, the settlement terms are governed by the relevant rules and regulations as prescribed by respective stock exchange. The credit risk is minimal as all transactions in Shariah-compliant investments are settled/paid upon delivery using approved stockbrokers.

The following table sets out the credit risk concentration of the Fund:

Cash and

Amount due

cash

Amount due

Dividends

from

equivalents

from Managers receivable Stockbroker Total

As at 30 June 2019

RM

RM

RM

RM RM

Consumer Staples

- NR

-

-

18,322 - 18,322

Finance - AA1

10,298,813

- - - 10,298,813

- NR

-

- - 390,535 390,535

Energy

- NR

-

- 46,545 - 46,545

Healthcare

- NR

-

- 91,812 - 91,812

Industrial Products

- NR

-

- 22,167 - 22,167

Materials

- NR

-

- 27,663 - 27,663

Real Estate

- NR

-

- 70,630 - 70,630

Others

- NR

-

353,426 - - 353,426

10,298,813

353,426

277,139

390,535 11,319,913

26




Market risk (Continued)

(i) Price risk (continued)

Impact on

% change in price of quoted Shariah-compliant profit after

securities Market value taxation/NAV


RM

-5% 189,973,150 (9,998,587)

0% 199,971,737 -

+5% 209,970,324 9,998,587

Impact on profit after

taxation/NAV

% change in price of quoted Shariah-compliant

securities Market value

As at 30 June 2018 RM RM

-5% 241,687,525 (12,720,396)

0% 254,407,921 -

+5% 267,128,317 12,720,396

(ii) 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 a foreign currency versus Ringgit Malaysia based on considerations of economic fundamentals such as profit rate differentials, balance of payments position, debt levels, and technical chart considerations.

Cash

Quoted shariah-

Amount due

and cash

compliant

from

Dividends




RM

RM

RM

RM

AUD - 9,103,812

- - 9,103,812

BRL - 4,590,596

- 18,322 4,608,918

CAD - 4,573,835

- 27,663 4,601,498

CHF - 24,497,398

- - 24,497,398

EUR - 32,333,823

- - 32,333,823

HKD - 6,740,873

- 70,629 6,811,502

IDR - -

390,535 - 390,535

GBP -

9,372,445

-

-

9,372,445

JPY - 13,625,684

- 53,287 13,678,971

SEK - 4,324,675

- - 4,324,675

SGD - 2,339,998

- 45,000 2,384,998

USD 5,458,541 88,468,598

- 62,238 93,989,377

5,458,541 199,971,737

390,535

277,139

206,097,952





Impact on

profit after

Change in price taxation/NAV

As at 30 June 2019 %

RM

AUD 5 455,191

BRL

5

230,446 CAD

5

230,075

CHF

5

1,224,870

EUR

5

1,616,691

HKD

5

340,575

IDR

5

19,527

GBP

5

468,622

JPY

5

683,949

SEK

5

216,234

SGD

5

119,250

USD

5

4,699,469

Impact on

profit after


As at 30 June 2018

%

RM

AUD

5

299,248

BRL

5

151,430

CAD

5

202,347

CHF

5

1,184,322

DKK

5

138,250

EUR

5

2,538,209

HKD

5

671,839

IDR

5

278,363

INR

5

164,016

GBP

5

945,744

JPY

5

1,555,529

KRW

5

246,479

SEK

5

534,463

SGD

5

274,244

TRY

5

157,883

USD

5

3,411,346

ZAR

5

72,585



Credit risk






Cash and

Amount due

cash

Amount due

Dividends

from

equivalents


As at 30 June 2019

RM

RM

RM

RM RM

Consumer Staples

- NR

-

-

18,322 - 18,322

Finance - AA1

10,298,813

- - - 10,298,813

- NR

-

- - 390,535 390,535

Energy

- NR

-

- 46,545 - 46,545

Healthcare

- NR

-

- 91,812 - 91,812

Industrial Products

- NR

-

- 22,167 - 22,167

Materials

- NR

-

- 27,663 - 27,663

Real Estate

- NR

-

- 70,630 - 70,630

Others

- NR

-

353,426 - - 353,426

10,298,813

353,426

277,139

390,535 11,319,913

27





Cash

Quoted Shariah-

Amount due

and cash

compliant

from

Dividends




RM

RM

RM

RM

AUD -

5,984,956

-

-

5,984,956

BRL -

3,017,151

-

11,453

3,028,604

CAD -

4,030,057

-

16,887

4,046,944

CHF -

23,686,435

-

-

23,686,435

DKK -

2,764,998

-

-

2,764,998

EUR -

50,727,357

-

36,826

50,764,183

HKD 699,342

12,671,787

-

65,651

13,436,780

IDR -

5,567,250

-

-

5,567,250

INR -

3,280,318

-

-

3,280,318

GBP -

18,914,881

-

-

18,914,881

JPY -

29,894,152

1,142,531

73,891

31,110,574

KRW -

4,929,589

-

-

4,929,589

SEK -

10,689,251

-

-

10,689,251

SGD -

5,446,680

-

38,196

5,484,876

TRY -

3,157,664

-

-

3,157,664

USD -

68,193,700

-

33,213

68,226,913

ZAR -

1,451,695

-

-

1,451,695

699,342

254,407,921

1,142,531

276,117

256,525,911

The table below summarises the sensitivity of the Fund's investments fair 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 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.



Credit risk






Cash and

Amount due

cash

Amount due

Dividends

from

equivalents


As at 30 June 2019

RM

RM

RM

RM RM

Consumer Staples

- NR

-

-

18,322 - 18,322

Finance - AA1

10,298,813

- - - 10,298,813

- NR

-

- - 390,535 390,535

Energy

- NR

-

- 46,545 - 46,545

Healthcare

- NR

-

- 91,812 - 91,812

Industrial Products

- NR

-

- 22,167 - 22,167

Materials

- NR

-

- 27,663 - 27,663

Real Estate

- NR

-

- 70,630 - 70,630

Others

- NR

-

353,426 - - 353,426

10,298,813

353,426

277,139

390,535 11,319,913

28





Impact on

profit after


As at 30 June 2019 %

RM

AUD 5 455,191

BRL

5

230,446 CAD

5

230,075

CHF

5

1,224,870

EUR

5

1,616,691

HKD

5

340,575

IDR

5

19,527

GBP

5

468,622

JPY

5

683,949

SEK

5

216,234

SGD

5

119,250

USD

5

4,699,469

Impact on

profit after


As at 30 June 2018

%

RM

AUD

5

299,248

BRL

5

151,430

CAD

5

202,347

CHF

5

1,184,322

DKK

5

138,250

EUR

5

2,538,209

HKD

5

671,839

IDR

5

278,363

INR

5

164,016

GBP

5

945,744

JPY

5

1,555,529

KRW

5

246,479

SEK

5

534,463

SGD

5

274,244

TRY

5

157,883

USD

5

3,411,346

ZAR

5

72,585




Credit risk (continued)


Cash and

Amount due

cash

Amount due

Dividends

from

equivalents from Managers receivable Stockbroker Total


RM

RM

RM RM

Consumer Staples - NR - - 11,453 - 11,453

Finance - AA1 5,750,634 - - - 5,750,634

- A+ - - - 1,142,531 1,142,531

Energy - NR - - 70,039 - 70,039

Healthcare - NR - - 80,179 - 80,179

Industrial Products - NR - - 97,559 - 97,559

Materials

- NR

-

- 16,887 - 16,887

Others - NR - 39,530 - - 39,530

5,750,634 39,530 276,117 1,142,531 7,208,812

All financial assets of the Fund as at the end of each financial year are neither past due nor impaired.



Credit risk






Cash and

Amount due

cash

Amount due

Dividends

from

equivalents


As at 30 June 2019

RM

RM

RM

RM RM

Consumer Staples

- NR

-

-

18,322 - 18,322

Finance - AA1

10,298,813

- - - 10,298,813

- NR

-

- - 390,535 390,535

Energy

- NR

-

- 46,545 - 46,545

Healthcare

- NR

-

- 91,812 - 91,812

Industrial Products

- NR

-

- 22,167 - 22,167

Materials

- NR

-

- 27,663 - 27,663

Real Estate

- NR

-

- 70,630 - 70,630

Others

- NR

-

353,426 - - 353,426

10,298,813

353,426

277,139

390,535 11,319,913

29




Liquidity risk

Liquidity risk is the risk that investments cannot be readily sold at or near its actual value without taking a significant discount. This will result in lower NAV and profit after tax of the Fund. The Manager manages this risk by maintaining sufficient level of Islamic liquid assets to meet anticipated payment and cancellations of units by unitholders. Islamic liquid assets comprise cash, Islamic 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.

Between

Less than

1 month to

1 month 1 year Total


RM

RM

Amount due to stockbroker 1,655,615 - 1,655,615

Amount due to the Manager - Management fee 613,795 - 613,795

- Cancellation of units 4,554,274 - 4,554,274

Amount due to Trustee 13,737 - 13,737

Other payables and accruals - 135,589 135,589

Contractual undiscounted cash flows 6,837,421 135,589 6,973,010

Between

Less than

1 month to



RM

RM

Amount due to stockbroker

3,387,341

-

3,387,341


- Cancellation of units 306,431 - 306,431




30




Credit risk (continued)


Cash and

Amount due

cash

Amount due

Dividends

from

equivalents from Managers receivable Stockbroker Total


RM

RM

RM RM

Consumer Staples - NR - - 11,453 - 11,453

Finance - AA1 5,750,634 - - - 5,750,634

- A+ - - - 1,142,531 1,142,531

Energy - NR - - 70,039 - 70,039

Healthcare - NR - - 80,179 - 80,179

Industrial Products - NR - - 97,559 - 97,559

Materials

- NR

-

- 16,887 - 16,887

Others - NR - 39,530 - - 39,530

5,750,634 39,530 276,117 1,142,531 7,208,812

All financial assets of the Fund as at the end of each financial year are neither past due nor impaired.




Non-compliance risk Non-compliance risk arises when the Manager and others associated with the Fund are not in compliance with the rules set out in the Fund’s constitution or the law that governs the Fund, applicable internal control procedures, or act fraudulently or dishonestly. It also includes the risk of the Manager not complying with internal control procedures. The non-compliance may expose the Fund to higher risks which may result in a fall in the value of the Fund which in turn may affect its investment goals. However, the risk can be mitigated by the internal controls and compliance monitoring undertaken by the Manager.

Reclassification of Shariah status risk This risk refers to the risk that the currently held Shariah-compliant securities in the portfolio of Shariah-compliant funds may be reclassified to be Shariah non-compliant in the periodic review of the securities by the Shariah Adviser or the Shariah Boards of the relevant Islamic indices. If this occurs, the Manager will take the necessary steps to dispose of such securities. There may be opportunity loss to the Fund due to the Fund not being allowed to retain the excess capital gains derived from the disposal of the Shariah non-compliant equities. The value of the Fund may also be adversely affected in the event of a disposal of Shariah non-compliant equities at a price lower than the investment cost.

Capital risk management

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. Fair value estimation Fair value is defined as 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 (i.e. an exit price). The fair value of financial assets traded in active markets (such as trading Shariah-compliant securities) are based on quoted market prices at the close of trading on the financial year end date. The Fund utilises the last traded market price for financial assets where the last traded price falls within the bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread that is most representative of the fair value. An active market is a market in which transactions for the asset or liability 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. Fair value hierarchy

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

• Level 1 : Quoted prices (unadjusted) in active market for identical assets or liabilities. • Level 2 : 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 3 : Inputs for the asset and liability that are not based on observable market data (that is,

unobservable inputs).

31




Liquidity risk

Liquidity risk is the risk that investments cannot be readily sold at or near its actual value without taking a significant discount. This will result in lower NAV and profit after tax of the Fund. The Manager manages this risk by maintaining sufficient level of Islamic liquid assets to meet anticipated payment and cancellations of units by unitholders. Islamic liquid assets comprise cash, Islamic 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.

Between

Less than

1 month to



RM

RM

Amount due to stockbroker 1,655,615 - 1,655,615


- Cancellation of units 4,554,274 - 4,554,274




Between

Less than

1 month to



RM

RM

Amount due to stockbroker

3,387,341

-

3,387,341


- Cancellation of units 306,431 - 306,431





NOTES TO THE FINANCIAL STATEMENTS • FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED)


Fair value hierarchy (continued) 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.

Level 1 Level 2 Level 3 Total As at 30 June 2019 RM RM RM RM

Financial assets at fair value through profit or loss - quoted Shariah-compliant securities 199,971,737 - - 199,971,737

As at 30 June 2018


Shariah-compliant investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed Shariah-compliant equities. The Fund does not adjust the quoted prices for these instruments. The Fund’s policies on valuation of these financial assets are stated in Note F. (ii) The carrying values of cash and cash equivalents, amount due from Manager, dividends receivable and

all current liabilities are a reasonable approximation of their fair values due to their short term nature. 3. MANAGEMENT FEE

In accordance with Clause 13.1.3 of the Deeds, the maximum rate of the annual management fee shall be 2.00% per annum of the net asset value of the Fund.

For the financial year ended 30 June 2019 and 30 June 2018, the management fee for the respective unit classes are as follows:

Class A Class I 1.75% per annum 1.00% per annum

There will be no further liability to the Manager in respect of management fee other than the amount recognised above.

32




Non-compliance risk Non-compliance risk arises when the Manager and others associated with the Fund are not in compliance with the rules set out in the Fund’s constitution or the law that governs the Fund, applicable internal control procedures, or act fraudulently or dishonestly. It also includes the risk of the Manager not complying with internal control procedures. The non-compliance may expose the Fund to higher risks which may result in a fall in the value of the Fund which in turn may affect its investment goals. However, the risk can be mitigated by the internal controls and compliance monitoring undertaken by the Manager.

Reclassification of Shariah status risk This risk refers to the risk that the currently held Shariah-compliant securities in the portfolio of Shariah-compliant funds may be reclassified to be Shariah non-compliant in the periodic review of the securities by the Shariah Adviser or the Shariah Boards of the relevant Islamic indices. If this occurs, the Manager will take the necessary steps to dispose of such securities. There may be opportunity loss to the Fund due to the Fund not being allowed to retain the excess capital gains derived from the disposal of the Shariah non-compliant equities. The value of the Fund may also be adversely affected in the event of a disposal of Shariah non-compliant equities at a price lower than the investment cost.

Capital risk management

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. Fair value estimation Fair value is defined as 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 (i.e. an exit price). The fair value of financial assets traded in active markets (such as trading Shariah-compliant securities) are based on quoted market prices at the close of trading on the financial year end date. The Fund utilises the last traded market price for financial assets where the last traded price falls within the bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread that is most representative of the fair value. An active market is a market in which transactions for the asset or liability 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. Fair value hierarchy

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

• Level 1 : Quoted prices (unadjusted) in active market for identical assets or liabilities. • Level 2 : 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 3 : Inputs for the asset and liability that are not based on observable market data (that is,

unobservable inputs).


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 4. TRUSTEE’S AND CUSTODIAN FEES

In accordance with Clause 13.2.2 of the Deeds, the maximum rate of annual Trustee’s fee shall be up to 0.08% (2018: 0.08% per annum) per annum for each unit class, calculated daily based on the net asset value of the Fund, subject to a minimum fee of RM18,000 per annum (excluding foreign custodian fees and charges).

For the financial year ended 30 June 2019, the Trustee's fee is recognised at a rate of 0.08% (2018: 0.08%) per annum for each unit class.

There will be no further liability to the Trustee in respect of trustee’s fee other than the amount recognised above.

5. TAXATION 2019 2018

RM

RM

Tax charged for the financial year: - Current taxation

- -

The numerical reconciliation between profit before taxation multiplied by the Malaysian statutory tax rate and tax expense of the Fund is as follows:

Net profit before taxation 10,357,244 1,509,389

Tax at Malaysian statutory rate of 24% (2018: 24%) 2,485,739 362,253

Tax effects of: - Investment income not subject to tax (3,806,353) (1,847,637)

- Investment income subject to different tax rates - -

- Expenses not deductible for tax purposes 452,625 572,507

- Restriction on tax deductible expenses for unit trust funds 867,989 912,877

Taxation - -

33


NOTES TO THE FINANCIAL STATEMENTS • FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED)


Fair value hierarchy (continued) 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.

Level 1 Level 2 Level 3 Total As at 30 June 2019 RM RM RM RM


As at 30 June 2018


Shariah-compliant investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed Shariah-compliant equities. The Fund does not adjust the quoted prices for these instruments. The Fund’s policies on valuation of these financial assets are stated in Note F. (ii) The carrying values of cash and cash equivalents, amount due from Manager, dividends receivable and

all current liabilities are a reasonable approximation of their fair values due to their short term nature. 3. MANAGEMENT FEE

In accordance with Clause 13.1.3 of the Deeds, the maximum rate of the annual management fee shall be 2.00% per annum of the net asset value of the Fund.

For the financial year ended 30 June 2019 and 30 June 2018, the management fee for the respective unit classes are as follows:

Class A Class I 1.75% per annum 1.00% per annum

There will be no further liability to the Manager in respect of management fee other than the amount recognised above.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2019 2018

RM

RM

Financial asset at fair value through profit or loss

- quoted Shariah-compliant securities (Note (a))

199,971,737

254,407,921

Net gain/(loss) on financial assets at fair value through profit or loss

- Realised (loss)/gain on disposals

10,089,915

(1,569,337)

- Unrealised fair value gain/loss 1,213,815 3,812,203

11,303,730 2,242,866

(a) Quoted Shariah-compliant securities

Aggregate

Fair value as

Percentage

Name of counter Quantity cost at 30.06.2019 of NAV

Units

RM

RM

%

AUSTRALIA

Consumer Products

ARB Corporation Limited 36,700

1,980,378

1,935,690

0.95

Health Care

Cochlear Limited

6,700

3,609,473

4,016,130

1.97

Industrials

Auckland International Airport Limited

116,700

2,375,996

3,151,992

1.54

BRAZIL

Consumer Staples Raia Drogasil S/A

56,000

4,713,513

4,590,596

2.25

CANADA

Materials Nutrien Ltd.

20,660

4,952,042

4,573,835

2.24

FRANCE

Consumer Products

Essilor International (Compagnie

Generale D'Optique) S.A.

8,800

3,694,077

4,748,887

2.32

Kering S.A.

1,400

2,978,320

3,424,297

1.68

L’Oreal SA

5,600

3,764,840

6,597,088

3.23

15,800

10,437,237

14,770,272

7.23

34


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)

(a) Quoted Shariah-compliant securities (Continued)

Aggregate

Fair value as

Percentage


Units

RM

RM

%

GERMANY

Energy

Total Sa

13,400

2,681,830

3,105,188

1.52

Information Technology

Infineon Technologies Ag

35,200

3,616,618

2,574,125

1.26

Sap Se

5,700

2,308,698

3,237,088

1.58

40,900

5,925,316

5,811,213

2.84

Materials

Linde Public Limited Company

6,702

3,054,583

5,564,532

2.72

HONG KONG

Industrials

Kerry Logistics Network Limited

612,200

3,729,080

4,555,937

2.23

Real Estate

China Resources Land Limited

120,000

2,068,090

2,184,936

1.07

ITALY

Consumer Products

Brunello Cucinelli S.P.A.

22,100

3,285,264

3,082,620

1.51

JAPAN

Healthcare

Chugai Pharmaceutical Co., Ltd.

19,900

2,025,185

5,369,740

2.63

Sysmex Corporation

22,600

4,569,092

6,087,036

2.98

42,500

6,594,277

11,456,776

5.61

Industrials Products

Nabtesco Corp

18,900

1,840,103

2,168,908

1.06


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 4. TRUSTEE’S AND CUSTODIAN FEES

In accordance with Clause 13.2.2 of the Deeds, the maximum rate of annual Trustee’s fee shall be up to 0.08% (2018: 0.08% per annum) per annum for each unit class, calculated daily based on the net asset value of the Fund, subject to a minimum fee of RM18,000 per annum (excluding foreign custodian fees and charges).

For the financial year ended 30 June 2019, the Trustee's fee is recognised at a rate of 0.08% (2018: 0.08%) per annum for each unit class.

There will be no further liability to the Trustee in respect of trustee’s fee other than the amount recognised above.

5. TAXATION 2019 2018

RM

RM

Tax charged for the financial year: - Current taxation

- -

The numerical reconciliation between profit before taxation multiplied by the Malaysian statutory tax rate and tax expense of the Fund is as follows:

Net profit before taxation 10,357,244 1,509,389

Tax at Malaysian statutory rate of 24% (2018: 24%) 2,485,739 362,253

Tax effects of: - Investment income not subject to tax (3,806,353) (1,847,637)

- Investment income subject to different tax rates - -

- Expenses not deductible for tax purposes 452,625 572,507

- Restriction on tax deductible expenses for unit trust funds 867,989 912,877

Taxation - -


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2019 2018

RM

RM

Financial asset at fair value through profit or loss

- quoted Shariah-compliant securities (Note (a))

199,971,737

254,407,921

Net gain/(loss) on financial assets at fair value through profit or loss

- Realised (loss)/gain on disposals

10,089,915

(1,569,337)

- Unrealised fair value gain/loss 1,213,815 3,812,203

11,303,730 2,242,866

(a) Quoted Shariah-compliant securities

Aggregate

Fair value as

Percentage


Units

RM

RM

%

AUSTRALIA

Consumer Products


1,980,378

1,935,690

0.95

Health Care

Cochlear Limited

6,700

3,609,473

4,016,130

1.97

Industrials

Auckland International Airport Limited

116,700

2,375,996

3,151,992

1.54

BRAZIL

Consumer Staples Raia Drogasil S/A

56,000

4,713,513

4,590,596

2.25

CANADA

Materials Nutrien Ltd.

20,660

4,952,042

4,573,835

2.24

FRANCE

Consumer Products

Essilor International (Compagnie

Generale D'Optique) S.A.

8,800

3,694,077

4,748,887

2.32

Kering S.A.

1,400

2,978,320

3,424,297

1.68

L’Oreal SA

5,600

3,764,840

6,597,088

3.23

15,800

10,437,237

14,770,272

7.23

35



(a) Quoted Shariah-compliant securities (continued)

Aggregate

Fair value as

Percentage


Units

RM

RM

%

SINGAPORE

Health Care Raffles Medical Group Ltd

737,100

2,471,972

2,339,998

1.15


Jardine Matheson Holdings Limited

14,500

3,957,036

3,773,953

1.85

SWEDEN


Assa Abloy Ab

46,300

3,296,831

4,324,675

2.12

SWITZERLAND

Consumer Products

Barry Callebaut Ltd

350

2,394,541

2,901,971

1.42

Nestle Ltd.

10,100

2,867,406

4,322,282

2.12

10,450

5,261,947

7,224,253

3.54

Health Care

Novartis Inc.

16,700

4,825,104

6,308,030

3.09

Roche Holding Ltd

5,400

5,919,269

6,280,378

3.07

22,100

10,744,373

12,588,408

6.16

Industrials

Vat Group Ltd

9,200

4,384,295

4,684,738

2.29

UNITED KINGDOM

Energy

Royal Dutch Shell Plc

38,900

4,737,777

5,276,067

2.58


Samsung Electronics Co,.Ltd

1,240

2,661,517

4,260,838

2.09

Materials

Croda International Public Limited

Company

15,225

3,614,063

4,096,378

2.00

36



6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)


Aggregate

Fair value as

Percentage


Units

RM

RM

%

UNITED STATES Consumer Products Fomento Economico Mexicano SAB

7,700

3,012,866

3,076,747

1.51

The Estee Lauder Companies Inc.

10,100

6,661,854

7,638,067

3.74

Procter & Gamble Co

11,600

3,579,760

5,253,112

2.57

TJX Companies, Inc.

29,600

4,332,029

6,464,474

3.16

59,000

17,586,509

22,432,400

10.98

Energy Chevron Corp

6,700

2,657,460

3,443,379

1.69

EOG Resources Inc

16,800

5,972,267

6,463,813

3.16

Schlumberger Ltd

32,200

8,606,683

5,284,863

2.59

Tenaris SA 16,300

1,956,186

1,771,163

0.87

72,000 19,192,596 16,963,218 8.31

Healthcare Baxter International Inc.

13,300

4,060,027

4,498,685

2.20 Cerner Corporation

13,900

3,754,891

4,207,933

2.06

Johnson & Johnson Pte Ltd

11,100

4,196,194

6,385,013

3.13 Resmed Inc.

10,500

4,574,269

5,291,831

2.59

48,800

16,585,381

20,383,462

9.98

Industrials Norfolk Southern Corporation

3,800

3,062,379

3,128,285

1.53

Information Technology Adobe Systems Incorporated

1,800

2,139,414

2,190,428

1.07

Intel Corporation

18,300

3,535,055

3,617,967

1.77

Salesforce.Com, Inc.

6,700

4,354,290

4,198,521

2.05

Texas Instruments Incorporated

11,300

4,925,158

5,355,734

2.62

38,100

14,953,917

15,362,650

7.51

Telecommunication Services Activision Blizzard, Inc.

11,100

2,099,920

2,163,789

1.06

Total quoted Shariah-compliant

securities 2,257,077 171,857,695 199,971,737 97.89

Accumulated unrealised gain on

financial assets at fair value

through profit or loss 28,114,042 Total financial assets at fair value through profit or loss 199,971,737




Aggregate

Fair value as

Percentage


Units

RM

RM

%

AUSTRALIA

Consumer Discretionary


2,519,990

3,179,399

1.24

Health Care

Cochlear Limited 4,700

2,596,045

2,805,557

1.09

BRAZIL Consumer Staples Raia Drogasil S/A

43,300

3,857,081

3,017,151

1.17

CANADA Materials Nutrien Ltd.

18,360

4,478,025

4,030,057

1.57

DENMARK

Materials

Novozymes A/S

13,500

2,536,530

2,764,998

1.08

FRANCE

Consumer Products

L’Oreal SA

6,600

4,437,133

6,580,273

2.56

GERMANY

Consumer Products

Henkel Ag & Co. KgaA

14,100

6,903,300

7,248,270

2.82

Energy

Total Sa

16,800

3,362,294

4,134,781

1.61

Health Care

Bayer Aktiengesellschaft

11,304

5,870,277

5,016,443

1.95

Industrials

Brenntag Ag

14,300

3,628,771

3,216,815

1.25



23,600

2,464,022

2,425,259

0.94

Sap Se

11,800 4,779,409 5,511,345 2.14

35,400

7,243,431

7,936,604

3.08

Materials

Linde Aktiengesellschaft

6,600

4,256,233

6,359,375

2.47

HONG KONG


Kerry Logistics Network Ltd

674,700

3,956,613

3,802,008

1.48

MTR Corporation Ltd

115,000

2,315,107

2,570,825

1.00

789,700

6,271,720

6,372,833

2.48


Tencent Holdings Limited

12,800

2,529,406

2,596,394

1.01

Real Estate

Swire Pacific Limited

86,500

3,917,751

3,702,560

1.44

37


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 13. PORTFOLIO TURNOVER RATIO (“PTR”)

2019 2018

PTR (times) 0.51 0.32

PTR is derived from the following calculation:

(Total acquisition for the financial year + total disposal for the financial year) ÷ 2

Average NAV of the Fund for the financial year calculated on a daily basis

Where: Total acquisition for the financial year = RM83,088,883 (2018: RM110,363,720)

Total disposal for the financial year = RM148,597,372 (2018: RM45,521,127)

14. SEGMENT INFORMATION

The internal reporting provided to the chief operating decision maker for the Fund’s assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of MFRS and IFRS. The chief operating decision maker is responsible for the performance of the Fund and considers the business to have a single operating segment. The reportable operating segment derives its income by seeking investments to achieve targeted returns consummate with an acceptable level of risk within each portfolio. These returns consist of profit, dividend and gains on the appreciation in the value of investments.

There were no changes in the reportable operating segment during the financial year.

15 MFRS 9 FINANCIAL INSTRUMENTS

As disclosed in Note A, the Fund have adopted MFRS 9, which resulted in changes in accounting policies and adjustments to the financial position. The main changes are as follows. (a) Classification and measurement of financial assets Until 30 June 2018, financial assets were classified in the following categories: financial assets at fair value through profit or loss (‘FVTPL’) and receivables. Note F set out the details of accounting policies for classification and measurement of financial instruments under MFRS 139.

From 1 July 2018, the Fund apply the following MFRS 9’s classification approach to all types of financial assets, including those that contain embedded derivative features: • Investments in debt instruments: There are 3 subsequent measurement categories: amortised cost, fair value with changes either recognised through other comprehensive income (‘FVOCI’) or through profit or loss (‘FVTPL’). • Investments in equity instruments: These instruments are always measured at fair value with changes in fair value presented in profit or loss unless the Fund has made an irrevocable choice to present changes in fair value in other comprehensive income (‘OCI’) for investments that are not held for trading.



6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)


Aggregate

Fair value as

Percentage


Units

RM

RM

%

UNITED STATES Consumer Products Fomento Economico Mexicano SAB

7,700

3,012,866

3,076,747

1.51

The Estee Lauder Companies Inc.

10,100

6,661,854

7,638,067

3.74

Procter & Gamble Co

11,600

3,579,760

5,253,112

2.57

TJX Companies, Inc.

29,600

4,332,029

6,464,474

3.16

59,000

17,586,509

22,432,400

10.98

Energy Chevron Corp

6,700

2,657,460

3,443,379

1.69

EOG Resources Inc

16,800

5,972,267

6,463,813

3.16

Schlumberger Ltd

32,200

8,606,683

5,284,863

2.59

Tenaris SA 16,300

1,956,186

1,771,163

0.87

72,000 19,192,596 16,963,218 8.31

Healthcare Baxter International Inc.

13,300

4,060,027

4,498,685

2.20 Cerner Corporation

13,900

3,754,891

4,207,933

2.06

Johnson & Johnson Pte Ltd

11,100

4,196,194

6,385,013

3.13 Resmed Inc.

10,500

4,574,269

5,291,831

2.59

48,800

16,585,381

20,383,462

9.98

Industrials Norfolk Southern Corporation

3,800

3,062,379

3,128,285

1.53

Information Technology Adobe Systems Incorporated

1,800

2,139,414

2,190,428

1.07

Intel Corporation

18,300

3,535,055

3,617,967

1.77

Salesforce.Com, Inc.

6,700

4,354,290

4,198,521

2.05


11,300

4,925,158

5,355,734

2.62

38,100

14,953,917

15,362,650

7.51

Telecommunication Services Activision Blizzard, Inc.

11,100

2,099,920

2,163,789

1.06

Total quoted Shariah-compliant

securities 2,257,077 171,857,695 199,971,737 97.89



through profit or loss 28,114,042 Total financial assets at fair value through profit or loss 199,971,737




Aggregate

Fair value as

Percentage


Units

RM

RM

%

INDIA

Consumer Staples

Jyothy Laboratories Limited

237,200

2,547,287

3,280,318

1.28

INDONESIA

Materials

PT Indocement Tunggal Prakarsa Tbk

824,100

4,413,008

3,168,833

1.23


Pt Ace Hardware Indonesia Tbk

6,704,000

2,492,541

2,398,416

0.93

JAPAN

Consumer Products

Calbee Inc

33,900

4,906,918

5,147,915

2.00

Healthcare

Sysmex Corporation

22,600

4,569,092

8,520,119

3.31

Chugai Pharmaceutical Co., Ltd.

41,300

4,203,022

8,748,686

3.40

Shionogi & Co., Ltd.

18,900

4,065,761

3,921,634

1.53

82,800

12,837,875

21,190,439

8.24


Nabtesco Corp

28,600

2,607,701

3,555,798

1.38

NETHERLANDS

Consumer Staples

Unilever N.V.

21,400

4,978,420

4,820,532

1.88

SINGAPORE

Health Care

Raffles Medical Group Ltd

737,100

2,471,972

2,204,453

0.86

Industrials

Jardine Matheson Holdings Limited

14,500

3,957,036

3,694,568

1.44

Telecommunication

Singapore Telecommunications Ltd

355,500

3,984,831

3,242,227

1.26

SOUTH AFRICA

Consumer Staples Amorepacific Group 11,000

5,228,436

4,929,589

1.92

SOUTH KOREA Telecommunication

MTN Group Ltd (Note 8(i))

45,700

2,542,593

1,451,695

0.56

SWEDEN


Assa Abloy AB

59,100

4,208,267

5,091,652

1.98

Atlas Copco AB

36,891

3,400,631

4,342,035

1.69

95,991

7,608,898

9,433,687

3.67

38




Aggregate

Fair value as

Percentage


Units

RM

RM

%

AUSTRALIA



2,519,990

3,179,399

1.24

Health Care

Cochlear Limited 4,700

2,596,045

2,805,557

1.09

BRAZIL Consumer Staples Raia Drogasil S/A

43,300

3,857,081

3,017,151

1.17

CANADA Materials Nutrien Ltd.

18,360

4,478,025

4,030,057

1.57

DENMARK

Materials

Novozymes A/S

13,500

2,536,530

2,764,998

1.08

FRANCE

Consumer Products

L’Oreal SA

6,600

4,437,133

6,580,273

2.56

GERMANY

Consumer Products

Henkel Ag & Co. KgaA

14,100

6,903,300

7,248,270

2.82

Energy

Total Sa

16,800

3,362,294

4,134,781

1.61

Health Care

Bayer Aktiengesellschaft

11,304

5,870,277

5,016,443

1.95

Industrials

Brenntag Ag

14,300

3,628,771

3,216,815

1.25



23,600

2,464,022

2,425,259

0.94

Sap Se

11,800 4,779,409 5,511,345 2.14

35,400

7,243,431

7,936,604

3.08

Materials

Linde Aktiengesellschaft

6,600

4,256,233

6,359,375

2.47

HONG KONG


Kerry Logistics Network Ltd

674,700

3,956,613

3,802,008

1.48

MTR Corporation Ltd

115,000

2,315,107

2,570,825

1.00

789,700

6,271,720

6,372,833

2.48


Tencent Holdings Limited

12,800

2,529,406

2,596,394

1.01

Real Estate

Swire Pacific Limited

86,500

3,917,751

3,702,560

1.44




Aggregate

Fair value as

Percentage


Units

RM

RM

%

SWITZERLAND

Consumer Products

Nestle Ltd

22,600

6,416,175

7,068,028

2.75

Healthcare

Novartis Inc

22,300

7,325,127

6,827,284

2.66

Roche Holding Ltd

5,300

5,802,763

4,753,860

1.85

27,600

13,127,890

11,581,144

4.51

Materials

Givaudan Ltd

550

3,578,962

5,037,262

1.96

TURKEY

Consumer Products

Bim Birlesik Magazalar AS

53,400

3,716,251

3,157,664

1.23

UNITED KINGDOM Energy

Royal Dutch Shell PLC

36,500

4,368,196

5,279,969

2.05

Health Care

Essilor International

(Compagnie Generale D'Optique) S.A.

9,500

3,987,924

5,414,265

2.11


Weir Group PLC

32,900

3,358,972

3,507,798

1.36

Information Technology Samsung Electronics Co,.Ltd

2,140

4,593,264

7,267,350

2.83

Materials

BHP Billiton PLC

24,700

1,960,669

2,246,387

0.87

Croda International PLC

15,300

3,465,656

3,916,718

1.52

Rio Tinto PLC

17,700

2,917,604

3,964,009

1.54

57,700

8,343,929

10,127,114

3.93 UNITED STATES

Consumer Products Costco Wholesale Corp

5,200

3,744,757

4,388,078

1.71

Fomento Economico Mexicano SAB

9,800

3,834,557

3,474,061

1.35

Procter & Gamble Co

15,600

4,814,159

4,917,218

1.91

TJX Companies, Inc.

16,800

4,669,041

6,456,859

2.51

47,400

17,062,514

19,236,216

7.48

Energy Chevron Corp

6,700

2,657,460

3,420,513

1.33

EOG Resources Inc

13,900

4,799,721

6,984,032

2.72

Schlumberger Ltd

23,500

6,910,057

6,360,678

2.47

Tenaris SA 17,100

2,052,195

2,512,722 0.98

61,200 16,419,433 19,277,945 7.50

39




Aggregate Fair value as

Percentag

e Name of counter Quantity cost at 30.06.2018 of NAV

Units

RM

RM

%

UNITED STATES (CONTINUED) Healthcare

Cerner Corporation

8,700

2,421,015

2,100,460

0.82 Johnson & Johnson Pte Ltd

14,600

5,519,318

7,153,575

2.78

Resmed Inc.

6,700

2,572,809

2,802,315

1.09

30,000

10,513,142

12,056,350

4.69

Information Technology Intel Corporation

20,100

3,882,767

4,034,654

1.58


5,900

2,398,494

2,626,618

1.02

26,000

6,281,261

6,661,272

2.60

Others Epiroc Aktiebolag

29,600

754,278

1,255,564

0.49

Total quoted Shariah-compliant securities

10,749,545

227,507,694

254,407,921 98.96



through profit or loss

26,900,227 Total financial assets at fair value


254,407,921

40


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 7. CASH AND CASH EQUIVALENTS

2019 2018

RM

RM

Bank balances

10,298,813

5,750,634

8. SHARIAH INFORMATION OF THE FUND

The Shariah Adviser confirmed that the investment portfolio of the Fund is Shariah-compliant, and comprises the following:

(i) Equity securities in foreign markets which have been classified as Shariah-compliant either by the Shariah Supervisory Board of Morgan Stanley Capital International All County World Islamic (Shariah) Index ("MSCI ACWI Islamic (Shariah) Index”) and duly verified by the Shariah Adviser and/or those securities which have been reviewed and classified as Shariah-compliant by the Shariah Adviser (As at 30 June 2018, there were three securities namely MTN Group Ltd, Brenntag AG and Unilever N.V. excluded from MSCI ACWI Islamic (Shariah) Index on 1 June 2017, 1 March 2018 and 1 June 2018 respectively. These securities will be disposed of soonest practical once the total amount of dividends received and the market value of the securities held equal the original investment costs); and

(ii) Liquid assets in local market, which are placed in Shariah-compliant investments and/or

instruments.

9. NUMBER OF UNITS IN CIRCULATION

Number of units in circulation is represented by:

Note 2019 2018

No. of units

No. of units

Class A - MYR (a) 124,759,626 164,885,376

Class A - USD (b) - -

Class A - SGD (c) - -

Class A - AUD (d) - -

Class I - MYR (e) - -

124,759,626 164,885,376

(a) Class A - MYR

2019 2018

No. of units

No. of units

At the beginning of the financial year

164,885,376

127,728,034

Add: Creation of units arising from applications during the

financial year

24,522,289

53,994,057

Less: Cancellation of units during the financial year

(64,648,039)

(16,836,715)

At the end of the financial year

124,759,626

164,885,376

41




Aggregate

Fair value as

Percentag

e Name of counter Quantity cost at 30.06.2018 of NAV

Units

RM

RM

%

UNITED STATES (CONTINUED) Healthcare

Cerner Corporation

8,700

2,421,015

2,100,460

0.82 Johnson & Johnson Pte Ltd

14,600

5,519,318

7,153,575

2.78

Resmed Inc.

6,700

2,572,809

2,802,315

1.09

30,000

10,513,142

12,056,350

4.69

Information Technology Intel Corporation

20,100

3,882,767

4,034,654

1.58


5,900

2,398,494

2,626,618

1.02

26,000

6,281,261

6,661,272

2.60

Others Epiroc Aktiebolag

29,600

754,278

1,255,564

0.49

Total quoted Shariah-compliant securities

10,749,545

227,507,694

254,407,921 98.96




26,900,227 Total financial assets at fair value


254,407,921


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 9. NUMBER OF UNITS IN CIRCULATION (CONTINUED)

(b) Class A - USD

2019 2018

No. of units

No. of units

At the beginning of the financial year - 1,000

Less: Cancellation of units during the financial year - (1,000)

At the end of the financial year - -

(c) Class A - SGD

2019 2018

No. of units

No. of units




(d) Class A - AUD

2019 2018

No. of units

No. of units


-

1,000


-

(1,000)


-

-

(e) Class I - MYR

2019 2018

No. of units

No. of units


-

10,000

Less: Cancellation of units during the year

-

(10,000)


-

-

42



10. TRANSACTIONS WITH BROKERS/DEALERS Details of transactions with the top 10 brokers/dealers for the financial year ended 30 June 2019 are as follows:

Percentage

Brokerage

fees

of total

Value

Percentage

brokerage

Name of broker/dealer of trades of total trades fees

RM

%

RM

%

Instinet Europe Limited 27,245,010 11.76 15,677 10.26

Direct

26,586,426

11.47

-

-

Ubs Ag London Branch 17,094,935 7.38 4,378 2.87

Societe Generale London Branch 16,267,834 7.02 15,480 10.13

Liquidnet Europe Limited 14,708,129 6.34 4,418 2.89

Credit Suisse (Hong Kong) Limited 9,376,883 4.05 6,349 4.16

Pershing Llc Bank 8,850,655 3.82 4,426 2.90

Merrill Lynch International Limited 8,804,034 3.80 10,534 6.90

Clsa Singapore Pte Ltd. 8,605,525 3.71 5,163 3.38

Credit Suisse Securities (Europe) London 8,409,908 3.63 3,484 2.28

Others 85,779,832 37.02 82,839 54.23

231,729,171 100.00 152,748 100.00

For the financial year ended 30 June 2019, there were no transactions with related parties. Details of transactions with the top 10 brokers/dealers for the financial year ended 30 June 2018 are as follows: Percentage of total Value Percentage brokerage Name of broker/dealer of trades of total trades Brokerage

fees fees

RM % RM % Credit Suisse Securities (Europe) London 20,637,812 13.25 17,050 15.41 Instinet Europe Limited 15,931,857 10.23 22,255 20.12 Societe Generale Paris Branch 14,914,485 9.57 5,151 4.65 Instinet Clearing Services Jersey City 12,746,364 8.18 3,383 3.06 UBS Securities 12,502,993 8.03 4,478 4.05 Merrill Lynch International Limited 10,248,917 6.58 5,900 5.33 Merrill Lynch, Pierce, Fenner And Smith Incorporated 6,938,502 4.45 1,851 1.67 ITG Australia Limited Melbourne 5,707,336 3.66 3,924 3.55 Liquidnet 4,740,674 3.04 1,519 1.37 Macquarie Bank Limited (Hong Kong) 4,163,688 2.67 3,169 2.86 Others 47,273,966 30.34 41,944 37.93 155,806,594 100.00 110,624 100.00 For the financial year ended 30 June 2018, there were no transactions with related parties.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 7. CASH AND CASH EQUIVALENTS

2019 2018

RM

RM

Bank balances

10,298,813

5,750,634

8. SHARIAH INFORMATION OF THE FUND

The Shariah Adviser confirmed that the investment portfolio of the Fund is Shariah-compliant, and comprises the following:

(i) Equity securities in foreign markets which have been classified as Shariah-compliant either by the Shariah Supervisory Board of Morgan Stanley Capital International All County World Islamic (Shariah) Index ("MSCI ACWI Islamic (Shariah) Index”) and duly verified by the Shariah Adviser and/or those securities which have been reviewed and classified as Shariah-compliant by the Shariah Adviser (As at 30 June 2018, there were three securities namely MTN Group Ltd, Brenntag AG and Unilever N.V. excluded from MSCI ACWI Islamic (Shariah) Index on 1 June 2017, 1 March 2018 and 1 June 2018 respectively. These securities will be disposed of soonest practical once the total amount of dividends received and the market value of the securities held equal the original investment costs); and

(ii) Liquid assets in local market, which are placed in Shariah-compliant investments and/or

instruments.

9. NUMBER OF UNITS IN CIRCULATION

Number of units in circulation is represented by:

Note 2019 2018

No. of units

No. of units

Class A - MYR (a) 124,759,626 164,885,376

Class A - USD (b) - -

Class A - SGD (c) - -

Class A - AUD (d) - -

Class I - MYR (e) - -

124,759,626 164,885,376

(a) Class A - MYR

2019 2018

No. of units

No. of units


164,885,376

127,728,034

Add: Creation of units arising from applications during the

financial year

24,522,289

53,994,057


(64,648,039)

(16,836,715)


124,759,626

164,885,376




Percentage

Brokerage

fees

of total

Value

Percentage

brokerage


RM

%

RM

%


Direct

26,586,426

11.47

-

-









Others 85,779,832 37.02 82,839 54.23

231,729,171 100.00 152,748 100.00


fees fees


43


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 9. NUMBER OF UNITS IN CIRCULATION (CONTINUED)

(b) Class A - USD

2019 2018

No. of units

No. of units




(c) Class A - SGD

2019 2018

No. of units

No. of units




(d) Class A - AUD

2019 2018

No. of units

No. of units


-

1,000


-

(1,000)


-

-

(e) Class I - MYR

2019 2018

No. of units

No. of units


-

10,000

Less: Cancellation of units during the year

-

(10,000)


-

-




Percentage

Brokerage

fees

of total

Value

Percentage

brokerage


RM

%

RM

%


Direct

26,586,426

11.47

-

-









Others 85,779,832 37.02 82,839 54.23

231,729,171 100.00 152,748 100.00


fees fees




11. 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

Relationship

Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd (formerly known as Aberdeen Islamic Asset Managemet Sdn Bhd)

The Manager

Aberdeen Standard Investments (Malaysia) Sdn Bhd (formerly known as Aberdeen Asset Management Sdn Bhd)

Immediate holding company of the Manager

Aberdeen Asset Management Plc. (“Aberdeen”)

Ultimate holding company of the Manager

Subsidiaries and associates of Aberdeen

Subsidiary and associated companies

Group as disclosed in its financial statements

of the ultimate holding company of

the Manager

Units held by the Manager and parties related to the Manager There were no units held by the Manager and parties related to the Manager as at the end of the financial year.

Significant related party transactions and balances

In addition to related party disclosure mentioned elsewhere in the financial statements, there were no other significant related party transactions and balances.

12. MANAGEMENT EXPENSE RATIO (“MER”)

2019 2018

MER (%) 1.94 2.05

MER is derived from the following calculation:

MER = (A + B + C + D + E) x 100

F

A = Management fee

B = Trustee’s fees

C = Auditor’s remuneration

D = Tax agent’s fee

E = Other expenses

F = Average NAV of the Fund calculated on a daily basis

The average NAV of the Fund for the financial year calculated on a daily basis is RM229,222,050 (2018: RM241,101,232).

44



2019 2018

PTR (times) 0.51 0.32















Percentage

Brokerage

fees

of total

Value

Percentage

brokerage


RM

%

RM

%


Direct

26,586,426

11.47

-

-









Others 85,779,832 37.02 82,839 54.23

231,729,171 100.00 152,748 100.00


fees fees




2019 2018

PTR (times) 0.51 0.32












45



11. 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

Relationship

Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd (formerly known as Aberdeen Islamic Asset Managemet Sdn Bhd)

The Manager

Aberdeen Standard Investments (Malaysia) Sdn Bhd (formerly known as Aberdeen Asset Management Sdn Bhd)

Immediate holding company of the Manager

Aberdeen Asset Management Plc. (“Aberdeen”)

Ultimate holding company of the Manager

Subsidiaries and associates of Aberdeen

Subsidiary and associated companies

Group as disclosed in its financial statements

of the ultimate holding company of

the Manager

Units held by the Manager and parties related to the Manager There were no units held by the Manager and parties related to the Manager as at the end of the financial year.

Significant related party transactions and balances

In addition to related party disclosure mentioned elsewhere in the financial statements, there were no other significant related party transactions and balances.

12. MANAGEMENT EXPENSE RATIO (“MER”)

2019 2018

MER (%) 1.94 2.05

MER is derived from the following calculation:

MER = (A + B + C + D + E) x 100

F

A = Management fee

B = Trustee’s fees

C = Auditor’s remuneration

D = Tax agent’s fee

E = Other expenses

F = Average NAV of the Fund calculated on a daily basis

The average NAV of the Fund for the financial year calculated on a daily basis is RM229,222,050 (2018: RM241,101,232).


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (CONTINUED) 15 MFRS 9 FINANCIAL INSTRUMENTS (CONTINUED)

(b) Impairment From 1 July 2018 onwards, the Fund measures credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward looking information in determining any expected credit loss. Management consider the probability of default to be close to zero as these instruments have a low risk of default and the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised based on 12 month expected credit losses as any such impairment would be wholly insignificant to the Fund. Significant increase in credit risk A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days past due. Definition of default and credit-impaired financial assets Any contractual payment which is more than 90 days past due is considered credit impaired.

As disclosed above, the adoption of MFRS 9 in 2018 resulted in reclassification and change in measurement of certain financial assets and financial liabilities. The measurement category and the carrying amount of financial assets and financial liabilities in accordance with MFRS 139 and MFRS 9 at 1 January 2018 are compared as follows:

Measurement category Carrying amount

Original (MFRS 139)

New (MFRS 9)

Original (MFRS 139)

Reclassifications/ Remeasurements

New (MFRS 9)

RM RM RM

Assets

Cash and cash equivalents Receivables

Amortised cost 5,570,634 - 5,750,634

Financial assets at fair value through profit or loss (Shariah-compliant)

FVTPL FVTPL 254,407,921 - 254,407,921

Amount due from manager – Creation of units

Receivables

Amortised cost

39,530 - 39,530

Dividend receivables Receivables Amortised

cost 276,117 - 276,117


Receivables Amortised

cost 1,142,531 - 1,142,531

46



2019 2018

PTR (times) 0.51 0.32














2019 2018

PTR (times) 0.51 0.32














15 MFRS 9 FINANCIAL INSTRUMENTS (CONTINUED) (b) Impairment (Continued)

Measurement category Carrying amount

Original (MFRS

139) New

(MFRS 9) Original (MFRS

139) Reclassifications/ Remeasurements

New (MFRS 9)

RM RM RM

Liabilities

Amount due to

manager – Management fee

Amortised cost

Amortised cost 783,372 - 783,372

Amount due to manager – Cancellation of units

Amortised cost


Amount due to Trustee

Amortised cost


Amount due to stockbrokers

Amortised cost

Amortised cost 3,387,341 - 3,387,341

Other payables and accruals

Amortised cost


16. APPROVAL OF FINANCIAL STATEMENTS

The financial statements have been approved for issue by the Manager on 30 August 2019.

47


STATEMENT BY THE MANAGER TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (formerly known as Aberdeen Islamic World Equity Fund) We, Gerald Michael Ambrose @ Johari Ali Bin Abdullah and Hugh Young, being the Directors of Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd (formerly Known as Aberdeen Islamic Asset Management Sdn Bhd), do hereby state that, in our opinion as the Manager, the financial statements set out on pages 10 to 47 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 30 June 2019 and of its financial performance, changes in net assets attributable to unitholders and cash flows for the financial period ended 30 June 2019 in accordance with Malaysian Financial Reporting Standards in Malaysia and International Financial Reporting Standards.

For and on behalf of the Manager, ABERDEEN STANDARD ISLAMIC INVESTMENTS (MALAYSIA) SDN BHD (formerly known as Aberdeen Islamic Asset Management Sdn Bhd)

GERALD MICHAEL AMBROSE @ JOHARI ALI BIN ABDULLAH Chief Executive Officer HUGH YOUNG Director

Kuala Lumpur 30 August 2019 48


TRUSTEE’S REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (formerly known as Aberdeen Islamic World Equity Fund) We have acted as Trustee for Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund)("the Fund") for the financial year ended 30 June 2019. To the best of our knowledge, for the financial year under review, Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd (formerly known as Aberdeen Islamic Asset Management Sdn Bhd) ("the Manager") has operated and managed the Fund in accordance with the following: (a) limitations imposed on the investment powers of the Manager and the Trustee under the Deed, the Securities

Commission’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 and other applicable laws;

(b) the valuation/pricing for the Fund is carried out in accordance with the Deed of the Fund and any regulatory

requirements; and

(c) creation and cancellation of units for the Fund have been carried out in accordance with the Deed of the Fund and

any regulatory requirements.

For Deutsche Trustees Malaysia Berhad

Ng Hon Leong Richard Lim Hock Seng Head, Trustee Operations Chief Executive Officer

Kuala Lumpur 30 August 2019

49




Market Review


Market Outlook



STATEMENT BY THE MANAGER TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (formerly known as Aberdeen Islamic World Equity Fund) We, Gerald Michael Ambrose @ Johari Ali Bin Abdullah and Hugh Young, being the Directors of Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd (formerly Known as Aberdeen Islamic Asset Management Sdn Bhd), do hereby state that, in our opinion as the Manager, the financial statements set out on pages 10 to 47 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 30 June 2019 and of its financial performance, changes in net assets attributable to unitholders and cash flows for the financial period ended 30 June 2019 in accordance with Malaysian Financial Reporting Standards in Malaysia and International Financial Reporting Standards.

For and on behalf of the Manager, ABERDEEN STANDARD ISLAMIC INVESTMENTS (MALAYSIA) SDN BHD (formerly known as Aberdeen Islamic Asset Management Sdn Bhd)

GERALD MICHAEL AMBROSE @ JOHARI ALI BIN ABDULLAH Chief Executive Officer HUGH YOUNG Director



SHARIAH ADVISER’S REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (formerly known as Aberdeen Islamic World Equity Fund)

We have acted as the Shariah Adviser of Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund). Our responsibility is to ensure that the procedures and processes employed by Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd(formerly known as Aberdeen Islamic Asset Management Sdn Bhd) ("the Manager") are in accordance with Shariah principles.

In our opinion, Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd(formerly known as Aberdeen Islamic Asset Management Sdn Bhd) ("the Manager") has managed and administered Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund) in accordance with Shariah principles and complied with applicable guidelines, rulings and decisions issued by the Securities Commission pertaining to Shariah matters for the financial year ended 30 June 2019.

In addition, we also confirm that the investment portfolio of Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund) comprises securities which have been classified as Shariah-compliant by the Shariah Supervisory Board of MSCI ACWI Islamic (Shariah) Index. As for the securities which are not certified by the Shariah Supervisory Board of MSCI ACWI Islamic (Shariah) Index, we have reviewed the said securities and opine that these securities are designated as Shariah-compliant. For and on behalf of the Shariah Adviser of the Fund AMANIE ADVISORS SDN BHD DATUK DR. MOHD DAUD BAKAR Executive Chairman


50


INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (FORMERLY KNOWN AS ABERDEEN ISLAMIC WORLD EQUITY FUND) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Our opinion In our opinion, the financial statements of Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund) (“the Fund”) give a true and fair view of the financial position of the Fund as at 30 June 2019, and of its financial performance and its cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards. What we have audited We have audited the financial statements of the Fund, which comprise the statement of financial position as at 30 June 2019, and the statement of comprehensive income, statement of changes in net assets attributable to unitholders and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 10 to 47. Basis for opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial statements” section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and other ethical responsibilities We are independent of the Fund in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Information other than the financial statements and auditors’ report thereon The Manager of the Fund is responsible for the other information. The other information comprises Manager’s report but does not include the financial statements of the Fund and our auditors’ report thereon. Our opinion on the financial statements of the Fund does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Fund, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Fund or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

51




Market Review


Market Outlook



SHARIAH ADVISER’S REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (formerly known as Aberdeen Islamic World Equity Fund)

We have acted as the Shariah Adviser of Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund). Our responsibility is to ensure that the procedures and processes employed by Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd(formerly known as Aberdeen Islamic Asset Management Sdn Bhd) ("the Manager") are in accordance with Shariah principles.

In our opinion, Aberdeen Standard Islamic Investments (Malaysia) Sdn Bhd(formerly known as Aberdeen Islamic Asset Management Sdn Bhd) ("the Manager") has managed and administered Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund) in accordance with Shariah principles and complied with applicable guidelines, rulings and decisions issued by the Securities Commission pertaining to Shariah matters for the financial year ended 30 June 2019.

In addition, we also confirm that the investment portfolio of Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund) comprises securities which have been classified as Shariah-compliant by the Shariah Supervisory Board of MSCI ACWI Islamic (Shariah) Index. As for the securities which are not certified by the Shariah Supervisory Board of MSCI ACWI Islamic (Shariah) Index, we have reviewed the said securities and opine that these securities are designated as Shariah-compliant. For and on behalf of the Shariah Adviser of the Fund AMANIE ADVISORS SDN BHD DATUK DR. MOHD DAUD BAKAR Executive Chairman



INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (FORMERLY KNOWN AS ABERDEEN ISLAMIC WORLD EQUITY FUND) (CONTINUED) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Responsibilities of the Manager for the financial statements The Manager of the Fund is responsible for the preparation of the financial statements of the Fund that 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 determine is necessary to enable the preparation of financial statements of the Fund that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Fund, the Manager is responsible for assessing the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager either intends to liquidate the Fund or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Fund as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (a) Identify and assess the risks of material misstatement of the financial statements of the Fund,

whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(b) Obtain an understanding of internal control relevant to the audit 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 Fund’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Manager.

52


INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (FORMERLY KNOWN AS ABERDEEN ISLAMIC WORLD EQUITY FUND) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Our opinion In our opinion, the financial statements of Aberdeen Standard Islamic World Equity Fund (formerly known as Aberdeen Islamic World Equity Fund) (“the Fund”) give a true and fair view of the financial position of the Fund as at 30 June 2019, and of its financial performance and its cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards. What we have audited We have audited the financial statements of the Fund, which comprise the statement of financial position as at 30 June 2019, and the statement of comprehensive income, statement of changes in net assets attributable to unitholders and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 10 to 47. Basis for opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial statements” section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and other ethical responsibilities We are independent of the Fund in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Information other than the financial statements and auditors’ report thereon The Manager of the Fund is responsible for the other information. The other information comprises Manager’s report but does not include the financial statements of the Fund and our auditors’ report thereon. Our opinion on the financial statements of the Fund does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Fund, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Fund or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.


INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (FORMERLY KNOWN AS ABERDEEN ISLAMIC WORLD EQUITY FUND) (CONTINUED)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Auditors’ responsibilities for the audit of the financial statements (continued)

(d) Conclude on the appropriateness of the Manager’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Fund or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Fund to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements of the Fund, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. OTHER MATTERS This report is made solely to the unitholders of the Fund and for no other purpose. We do not assume responsibility to any other person for the content of this report. PRICEWATERHOUSECOOPERS PLT LLP0014401-LCA & AF 1146 Chartered Accountants Kuala Lumpur 30 August 2019

53


INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (FORMERLY KNOWN AS ABERDEEN ISLAMIC WORLD EQUITY FUND) (CONTINUED) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Responsibilities of the Manager for the financial statements The Manager of the Fund is responsible for the preparation of the financial statements of the Fund that 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 determine is necessary to enable the preparation of financial statements of the Fund that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Fund, the Manager is responsible for assessing the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager either intends to liquidate the Fund or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Fund as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (a) Identify and assess the risks of material misstatement of the financial statements of the Fund,

whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(b) Obtain an understanding of internal control relevant to the audit 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 Fund’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Manager.


DISTRIBUTORS CIMB BANK BERHAD ADDRESS : Menara Bumiputra Commerce,

No.11, Jalan Raja Laut, 50350, Kuala Lumpur.

HOTLINE NO. : 1 300 880 900 WEBSITE : www.cimbbank.com.my FUNDSUPERMART.COM ADDRESS : Level 29, Menara Standard Chartered, No. 30, Jalan Sultan Ismail, 50250, Kuala Lumpur. HOTLINE NO. : (603) 2149 0567 WEBSITE : www.fundsupermart.com.my HSBC BANK MALAYSIA ADDRESS : HSBC Bank Malaysia Berhad,

No. 2 Leboh Ampang, 50100 Kuala Lumpur. HOTLINE NO. : 1300-88-1388 WEBSITE : https://www.hsbc.com.my iFAST CAPITAL SDN BHD ADDRESS : Level 28, Menara Standard Chartered, No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : (603) 2149 0660 FAX NO. : (603) 2143 1218 WEBSITE : www.ifastcapital.com.my OCBC BANK (MALAYSIA) BERHAD ADDRESS : 19th Floor, Menara OCBC, 18 Jalan Tun Perak, 50050, Kuala Lumpur. HOTLINE NO. : 1300 88 7000 WEBSITE : https://ocbc.com.my/

54

www.fundsupermart.com.my

www.cimbbank.com.my

www.ifastcapital.com.my

https://ocbc.com.my/

https://www.hsbc.com.my


INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF ABERDEEN STANDARD ISLAMIC WORLD EQUITY FUND (FORMERLY KNOWN AS ABERDEEN ISLAMIC WORLD EQUITY FUND) (CONTINUED)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Auditors’ responsibilities for the audit of the financial statements (continued)

(d) Conclude on the appropriateness of the Manager’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Fund or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Fund to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements of the Fund, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. OTHER MATTERS This report is made solely to the unitholders of the Fund and for no other purpose. We do not assume responsibility to any other person for the content of this report. PRICEWATERHOUSECOOPERS PLT LLP0014401-LCA & AF 1146 Chartered Accountants Kuala Lumpur 30 August 2019


1

DISTRIBUTORS (CONTINUED) PHILLIP MUTUAL BERHAD ADDRESS : B-2-7 Block B Level 2 Megan Avenue II No. 12 Jalan Yap Kwan Seng 50450 Kuala Lumpur HOTLINE NO. : (603) 2783 0300 FAX NO. : (603) 2166 6417 WEBSITE : www.phillipmutual.com STANDARD CHARTERED SAADIQ BERHAD ADDRESS : Menara Standard Chartered No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : 1300 888 888 / (603) 7711 8888 WEBSITE : https://www.sc.com/my/ KENWEALTH BY KENANGA ADDRESS : Kenanga Wealth Management Level 13 Kenanga Tower 237 Jalan Tun Razak, 50400 Kuala Lumpur. HOTLINE NO. : (603) 2332 8810 (ext. 8189) WEBSITE : http://www.kenwealth.com/ AMBANK (M) Berhad ADDRESS : AmBank (M) Berhad Level 30 Menara AmBank No.8 Jalan Yap Kwang Seng, 50450 Kuala Lumpur. HOTLINE NO. : (603) 2167 3000 WEBSITE : For the latest list of our distributors, please refer to our website at www.aberdeenstandard.com.my/islamic

55

www.phillipmutual.com

https://www.sc.com/my/

http://www.kenwealth.com/

www.aberdeenstandard.com.my/islamic


DISTRIBUTORS CIMB BANK BERHAD ADDRESS : Menara Bumiputra Commerce,

No.11, Jalan Raja Laut, 50350, Kuala Lumpur.

HOTLINE NO. : 1 300 880 900 WEBSITE : www.cimbbank.com.my FUNDSUPERMART.COM ADDRESS : Level 29, Menara Standard Chartered, No. 30, Jalan Sultan Ismail, 50250, Kuala Lumpur. HOTLINE NO. : (603) 2149 0567 WEBSITE : www.fundsupermart.com.my HSBC BANK MALAYSIA ADDRESS : HSBC Bank Malaysia Berhad,

No. 2 Leboh Ampang, 50100 Kuala Lumpur. HOTLINE NO. : 1300-88-1388 WEBSITE : https://www.hsbc.com.my iFAST CAPITAL SDN BHD ADDRESS : Level 28, Menara Standard Chartered, No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : (603) 2149 0660 FAX NO. : (603) 2143 1218 WEBSITE : www.ifastcapital.com.my OCBC BANK (MALAYSIA) BERHAD ADDRESS : 19th Floor, Menara OCBC, 18 Jalan Tun Perak, 50050, Kuala Lumpur. HOTLINE NO. : 1300 88 7000 WEBSITE : https://ocbc.com.my/


2

DISCLAIMER The contents of this report is strictly for information purposes only and should not be considered an offer, or solicitation, to deal in any of the mentioned funds. Aberdeen Standard Islamic Investments (Malaysia) Sdn. Bhd. (formerly known as Aberdeen Islamic Asset Management Sdn. Bhd.)(the “Manager”) does not warrant the accuracy, adequacy or completeness of the information provided and expressly disclaims liability for any errors or omissions. Any projections or other forward-looking statement regarding future events or performance of countries, markets or companies are not necessary indicative of, and may differ from, actual events or results. No regard to the investment objectives, financial situation or particular needs of any specific investor has been taken into account in the preparation of the information provided. Investors should read and understand the master prospectus dated 20 February 2019 in respect of Aberdeen Standard Islamic World Eqity Fund (formerly known as Aberdeen Islamic World Eqity Fund) (“AIWEF”) and Aberdeen Standard Islamic Asia Pacific Ex Japan Equity Fund (formerly known as Aberdeen Islamic Asia Pacific Ex Japan Equity Fund)(“AIAPxJEF”) ( “Master Prospectus””) as well as the Product Highlights Sheet in respect of AIWEF and AIAPxJEF which can be obtained at our office or from any of our approved distributors, or seek relevant professional investment advice, before making any investment decision. A copy of the Master Prospectus has been registered with the Securities Commission of Malaysia. Investors should consider the fees and charges involved before investing. Investments in the unit trusts are not deposits in, obligations of, or guaranteed or insured by Aberdeen Standard Islamic Investments (Malaysia) Sdn. Bhd. (formerly known as Aberdeen Islamic Asset Management Sdn. Bhd.)(the “Manager”), and are subject to investment risks, including the possible loss of the principal amount invested. Unit values and income therefrom may fall or rise. Past performance is not indicative of future performance. Units will only be issued on receipt of the application form referred to in and accompanying the Master Prospectus, subject to the terms and conditions therein. Investors are advised to read and understand the contents of the unit trust loan financing risk statement before deciding to borrow/seek financing facility to purchase units. The information herein shall not be disclosed, used or disseminated, in whole or part, and shall not be reproduced, copied or made available to others. The Manager reserves the right to make changes and corrections to the information, including any opinions or forecasts expressed herein at any time, without notice. Aberdeen Standard Islamic Investments (Malaysia) Sdn. Bhd. (827342-W) (formerly known as Aberdeen Islamic Asset Management Sdn. Bhd.)

56

Documents

Aberdeen Standard Islamic World Equity Fund