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AmAustraliaAnnual Report for
31 July 2017
AmAustralia
TRUST DIRECTORY
Manager
AmFunds Management Berhad
9th
& 10th
Floor, Bangunan AmBank Group
55 Jalan Raja Chulan
50200 Kuala Lumpur
Board of Directors
Raja Teh Maimunah Raja Abdul Aziz
Mustafa Mohd Nor
Tai Terk Lin
Goh Wee Peng
Sum Leng Kuang
Investment Committee
Sum Leng Kuang
Tai Terk Lin
Mustafa Mohd Nor
Zainal Abidin Mohd Kassim
Trustee
Deutsche Trustees Malaysia Berhad
Auditors and Reporting Accountants
Ernst & Young
Taxation Adviser
Deloitte Tax Services Sdn Bhd
AmAustralia
CONTENTS
1 Manager’s Report
7 Independent Auditor’s Report to the Unitholders
10 Statement of Financial Position
11 Statement of Comprehensive Income
13 Statement of Changes in Equity
14 Statement of Cash Flows
15 Notes to the Financial Statements
35 Statement by the Manager
36 Trustee’s Report
37 Directory
1
MANAGER’S REPORT
Dear Unitholders,
We are pleased to present you the Manager’s report and the audited accounts of AmAustralia (“Fund”)
for the financial year ended 31 July 2017.
We wish to inform that, for the financial period under review, the AUD Class had not garnered sales.
Salient Information of the Fund
Name AmAustralia (“Fund”)
Category/
Type
Mixed Asset / Income & Capital Growth
Objective The Fund seeks to provide income* and Long-Term** capital growth by investing
in Australian equities and Australian dollar fixed income securities.
Note: The Fund’s main focus is on income and to a lesser extent, capital growth.
*The income could be in the form of units or cash.
**Long Term refer to an investment horizon between five (5) to ten (10) years.
Duration The Fund was established on 15 March 2011 and shall exist for as long as it appears
to the Manager and the Trustee that it is in the interests of the unitholders for it to
continue. In some circumstances, the unitholders can resolve at a meeting to
terminate the Fund.
Performance
Benchmark 75% S&P/ASX 200 Accumulation Index
25% Citi Australian Broad Investment-Grade Bond Index
(obtainable via www.aminvest.com)
This amendment to the performance benchmark of AmAustralia is made to enable
the Investment Manager to better match the investment universe and performance of
the Fund.
Income
Distribution
Policy
MYR Class
The Manager intends to distribute all or part of the income earned as income
distribution. The income distribution (if any) is paid once a year and will be paid in
the form of cash or units.
AUD Class
The Manager intends to distribute all or part of the income earned as income
distribution. The income distribution (if any) is paid once a year and will be
reinvested into additional units of the Class.
Note: Income distribution amount (if any) for each of the Classes would be different
subject to sole discretion of the Manager.
2
Breakdown
of Unit
Holdings by
Size
For the financial year under review, the size of the Fund for MYR class stood at
3,579,722 units.
Size of holding As at 31 July 2017 As at 31 July 2016
No of units
held
Number of
unitholders
No of units
held
Number of
unitholders
5,000 and below - - 60,018 19
5,001-10,000 - - 93,918 11
10,001-50,000 43,551 2 677,928 30
50,001-500,000 - - 686,572 6
500,001 and above 3,536,171 2 1,911,811 2
Fund Performance Data
Portfolio
Composition
Details of portfolio composition of the Fund for the financial years as at 31 July
are as follows:
FY
2017
%
FY
2016
%
FY
2015
%
Consumer discretionary - 4.84 6.90
Consumer staples - 3.82 2.25
Communications - 7.15 7.45
Energy - - 3.36
Financial - 21.21 33.63
Healthcare - 6.00 8.86
Industrial - 3.12 5.32
Materials - 20.25 14.21
Real estate/Properties - 2.63 1.92
REITs - 10.94 2.82
Cash and others 100.00 20.04 13.28
Total 100.00 100.00 100.00
Note: The abovementioned percentages are calculated based on total net asset
value.
Performance
Details
Performance details of the Fund for the financial years ended 31 July are as
follows:
FY
2017
FY
2016
FY
2015
Net asset value (RM) 2,026,671 1,957,443* 3,007,941
Units in circulation 3,579,722 3,430,247* 5,321,135
Net asset value per unit (RM) 0.5662 0.5706* 0.5653
Highest net asset value per unit
(RM) 0.6083 0.5915* 0.6119
Lowest net asset value per unit
(RM) 0.5410 0.5071* 0.5193
Benchmark performance (%) 17.39 14.14 -0.53
(Forward)
3
FY
2017
FY
2016
FY
2015
Total return (%)(1)
-0.77 9.24 -1.33
- Capital growth (%) -0.77 1.28 -1.33
- Income distribution (%) - 7.96 -
Gross distribution (sen per unit) - 4.50 -
Net distribution (sen per unit) - 4.50 -
Management expense ratio
(%)(2)
4.64 3.93
2.84
Portfolio turnover ratio
(times)(3)
1.64 1.34
1.00
* Above prices and net asset value per unit are shown as ex-distribution.
Note:
(1) Total return is the actual return of the Fund for the respective financial years
computed based on the net asset value per unit and net of all fees.
(2) Management expense ratio (“MER”) is calculated based on the total fees and
expenses incurred by the Fund divided by the average fund size calculated on a
daily basis. The MER increased by 0.71% as compared to 3.93% per annum
for the financial year ended 31 July 2016 mainly due to increase in expenses.
(3) Portfolio turnover ratio (“PTR”) is calculated based on the average of the
total acquisitions and total disposals of investment securities of the Fund
divided by the average fund size calculated on a daily basis. The PTR
increased by 0.30 times (22.4%) as compared to 1.34 times for the financial
year ended 31 July 2016 mainly due to increase in investing activities.
(4) There were no units in circulation for AUD class since the launching of the
class on 10 September 2014.
Average Total Return (as at 31 July 2017)
MYR class
AmAustralia(a)
%
ASA51 Index and
ACMPALL Index/
CABIGB Index(b)
%
One year -0.77 17.39
Three years 2.27 9.81
Five years 4.53 10.19
Since launch (15 March 2011) 3.54 9.90
Annual Total Return
Financial Years Ended
(31 July)
MYR class
AmAustralia(a)
%
ASA51 Index and
ACMPALL Index/
CABIGB Index(b)
%
2017 -0.77 17.39
2016 9.24 14.14
2015 -1.33 -0.53
2014 15.78 16.60
2013 0.75 5.49
(Forward)
4
(a) Source: Novagni Analytics and Advisory Sdn Bhd.
(b) Until 1 December 2014 –
75% S&P/ASX 200 Accumulation Index (“ASA51 Index”) and 25% UBS
Australian Composite Bond Index (“ACMPALL Index”)
Effective from 2 December 2014 onwards –
–25% Citi Australian Broad Investment-Grade Bond Index Australian
Composite Bond Index (“CABIGB Index”) (Obtainable via:
www.aminvest.com). CABIGB Index has replaced ACMPALL Index
(c) There was no return for AUD class since the launching of the class on 10
September 2014.
The Fund’s performance is calculated based on net asset value per unit of the
Fund. Average total returns of the Fund and its benchmark for a period are
computed based on the absolute return for that period annualised over one year.
Note: 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
MYR class
For the financial year under review, the Fund registered a negative return of 0.77%
which was entirely capital in nature.
Thus, the Fund’s negative return of 0.77% has underperformed the benchmark’s
return of 17.39% by 18.16%.
As compared with the financial year ended 31 July 2016, the net asset value
(“NAV”) per unit of the Fund decreased by 0.77% from RM0.5706 to RM0.5662,
while units in circulation increased by 4.36% from 3,430,247 units to 3,579,722
units.
AUD class
For the financial period under review, there was no return for the AUD class.
The line chart below shows comparison between the annual performances of
AmAustralia (MYR class) and its benchmark, 75% S&P/ASX 200 Accumulation
Index (“ASA51 Index”) and 25% City Australian Broad Index-Grade Bond Index
(“CABIGB Index”), for the financial years ended 31 July.
(Forward)
5
Note: Past performance is not necessarily indicative of future performance
and that unit prices and investment returns may go down, as well as up.
Has the Fund
achieved its
objective?
The Fund achieved its objective through capital growth by investing in Australian
equities and Australian dollar fixed income securities.
Strategies
and Policies
Employed
For the financial year under review, the Fund may invest in a mix of Australian
equities and Australian dollar fixed income securities. The Fund generally
maintains equity exposure within a range of 50% to 100% of the Fund’s NAV. If
the Fund’s NAV is not fully invested in equities, the balance of the Fund’s NAV
may be invested in Australian dollar fixed income securities and liquid assets. The
Fund derives its income primarily through investments in relatively higher paying
dividend stocks. It may also invest in growth stocks to participate in an actual or
anticipated stock market rally.
The Manager is responsible for managing the Australian equities and Australian
dollar fixed income securities of the Fund, and will be responsible for managing
the liquidity of the Fund.
Portfolio
Structure
This table below is the asset allocation of the Fund for MYR class for the financial
years under review.
As at
31-7-2017
%
As at
31-7-2016
%
Changes
%
Consumer discretionary - 4.84 -4.84
Consumer staples - 3.82 -3.82
Communications - 7.15 -7.15
Financial - 21.21 -21.21
Healthcare - 6.00 -6.00
Industrial - 3.12 -3.12
Materials - 20.25 -20.25
(Forward)
6
As at
31-7-2017
%
As at
31-7-2016
%
Changes
%
Real estate/Properties - 2.63 -2.63
REITs - 10.94 -10.94
Cash and others 100.00 20.04 79.96
Total 100.00 100.00
For the financial year under review, the allocation in cash as at 31 July 2016 was
100% following liquidation of investment holdings at end-June 2017. The cash is
being placed in overnight money markets until closing of the fund by calendar
year-end 2017.
Distribution/
Unit splits
There was no income distribution and unit split declared for the financial year
under review.
State of
Affairs
Board approval was obtained in order to close the Fund by year-end. As such, the
necessary steps are being taken to prepare for this, including obtaining
unitholders’ approval via an Extraordinary General Meeting.
Rebates
and Soft
Commission
It is our policy to pay all rebates to the Fund. Soft commissions received from
brokers/dealers are retained by the Manager only if the goods and services
provided are of demonstrable benefit to unitholders of the Fund.
During the financial year under review, the Manager had received on behalf of the
Fund, soft commissions in the form of fundamental database, financial wire
services, technical analysis software and stock quotation system incidental to
investment management of the Fund. These soft commissions received by the
Manager are deemed to be beneficial to the unitholders of the Fund.
Market
Review
The ASX lagged world indices in July for the fourth consecutive month due to the
deterioration in earnings expectations for Banks (underwhelming results), Retail
and Mining (drop in bulk and base prices). Materials were the best performing
sector in July (+3.6%).
Market
Outlook
Mining is back in focus despite peaking commodity prices as investors focus on
free cash flows of mining companies. Consumer and retail-related stocks are likely
to be impacted by the imminent arrival of Amazon and the long term implications
on businesses as well as valuations. Corporates are facing cost pressures from
higher input costs (energy and electricity). Benign inflation, high energy costs,
household debt and the strengthening of the Australia Dollar (which would be
damaging to the economy) are factors likely holding back the Reserve Bank of
Australia from raising rates sooner rather than later.
Kuala Lumpur, Malaysia
AmFunds Management Berhad
7 September 2017
Independent auditors’ report to the unitholders of
AmAustralia
Report on the audit of the financial statements
Opinion
Basis for opinion
Independence and other ethical responsibilities
Information other than the financial statements and auditors’ report thereon
We have audited the financial statements of AmAustralia (“the Fund”), which comprise the
statement of financial position as at 31 July 2017, and the statement of comprehensive income,
statement of changes in equity 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 34.
In our opinion, the accompanying financial statements give a true and fair view of the financial
position of the Fund as at 31 July 2017, 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.
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 Auditor’s 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.
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.
The Manager is responsible for the other information. The other information comprises information
in the Annual 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.
7
Independent auditors’ report to the unitholders of
AmAustralia (cont’d.)
Responsibilities of the Manager and the Trustees for the financial statements
Auditor’s responsibilities for the audit of the financial statements
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 to cease operations, or has no realistic alternative to do so.
The Trustee is responsible for ensuring that the Manager maintains proper accounting and other
records as are necessary to enable true and fair presentation of these 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 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 the approved standards on auditing in Malaysia and
International Standards on Auditing, we exercise professional judgment and maintain professional
skepticism throughout the planning and performance of the audit. We also:
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.
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.
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.
The Manager 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 determines is necessary to enable the preparation of financial statements of the Fund that
are free from material misstatement, whether due to fraud or error.
8
Independent auditors’ report to the unitholders of
AmAustralia (cont’d.)
Other matters
Ernst & Young Wan Daneena Liza Bt Wan Abdul Rahman
AF: 0039 No. 2978/03/18(J)
Chartered Accountants Chartered Accountant
Kuala Lumpur, Malaysia
7 September 2017
This report is made solely to the unitholders of the Fund, as a body, and for no other purpose. We do
not assume responsibility to any other person for the content of this report.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Manager.
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 Fund’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
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.
Evaluate the overall presentation, structure and content of the financial statements of the
Fund, including the disclosures, and whether the financial statements of the Fund 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.
9
AmAustralia
STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2017
2017 2016
Note RM RM
ASSETS
Investments 4 - 1,565,232
Deposits with financial institutions 5 2,040,372 -
Amount due from Manager 6 - 1,876
Dividends receivable - 2,278
Sundry receivables 7 - 87,638
Cash at banks 4,394 350,007
TOTAL ASSETS 2,044,766 2,007,031
LIABILITIES
Amount due to Manager 6 4,647 -
Amount due to Trustee 8 849 792
Distributions payable - 355
Sundry payables and accrued expenses 7 12,599 48,441
TOTAL LIABILITIES 18,095 49,588
EQUITY
Unitholders’ capital 11(a) 522,350 604,554
Retained earnings 11(b)(c) 1,504,321 1,352,889
TOTAL EQUITY 11 2,026,671 1,957,443
TOTAL EQUITY AND LIABILITIES 2,044,766 2,007,031
UNITS IN CIRCULATION 11(a) 3,579,722 3,430,247
NET ASSET VALUE PER UNIT
– EX DISTRIBUTION 56.62 sen 57.06 sen
The accompanying notes form an integral part of the financial statements.
10
AmAustralia
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 JULY 2017
2017 2016
Note RM RM
INVESTMENT INCOME
Gross dividend income 77,010 96,544
Interest income 48,181 1,752
Net gain from investments:
− Financial assets at fair value through profit or
loss (“FVTPL”) 9 207,921 184,367
Other unrealised foreign exchange (loss)/gain (67) 225
Gross Income 333,045 282,888
EXPENDITURE
Manager’s fee 6 (69,417) (42,509)
Trustee’s fee 8 (10,055) (9,945)
Auditors’ remuneration (7,500) (7,000)
Tax agent’s fee – current financial year (4,100) (2,000)
Tax agent’s fee – under provision in prior financial year (2,000) -
Custodian’s fee (71,078) (23,175)
Other expenses 10 (14,634) (8,074)
Total Expenditure (178,784) (92,703)
NET INCOME BEFORE TAX 154,261 190,185
LESS: INCOME TAX 13 (2,829) (1,255)
NET INCOME AFTER TAX 151,432 188,930
OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR THE
FINANCIAL YEAR 151,432 188,930
Total comprehensive income comprises the following:
Realised income 421,609 58,551
Unrealised (loss)/gain (270,177) 130,379
151,432 188,930
(Forward)
11
AmAustralia
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 JULY 2017 (CONTʼD.)
2017 2016
Note RM RM
Distributions for the financial year:
Net distributions 14 - 175,487
Gross/net distributions per unit (sen) 14 - 4.50
The accompanying notes form an integral part of the financial statements.
12
AmAustralia
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 JULY 2017
Unitholders’ Retained Total
capital earnings equity
Note RM RM RM
At 1 August 2015 1,668,495 1,339,446 3,007,941
Total comprehensive income for
the financial year - 188,930 188,930
Creation of units 11(a) 532,940 - 532,940
Reinvestments of distributions 11(a),14 174,848 - 174,848
Cancellation of units 11(a) (1,771,729) - (1,771,729)
Distributions 14 - (175,487) (175,487)
Balance at 31 July 2016 604,554 1,352,889 1,957,443
At 1 August 2016 604,554 1,352,889 1,957,443
Total comprehensive income for
the financial year - 151,432 151,432
Creation of units 11(a) 17,986,543 - 17,986,543
Cancellation of units 11(a) (18,068,747) - (18,068,747)
Balance at 31 July 2017 522,350 1,504,321 2,026,671
The accompanying notes form an integral part of the financial statements.
13
AmAustralia
STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 JULY 2017
2017 2016
Note RM RM
CASH FLOWS FROM OPERATING AND
INVESTING ACTIVITIES
Proceeds from sale of investments 7,242,517 3,802,111
Dividends received 76,392 99,113
Interest received 48,181 1,752
Manager’s fee paid (67,454) (44,433)
Trustee’s fee paid (9,998) (10,002)
Tax agent’s fee paid (4,000) (4,000)
Custodian’s fee paid (71,078) (23,175)
Payments for other expenses (20,863) (15,640)
Purchase of investments (5,420,939) (2,575,770)
Net cash generated from operating and
investing activities 1,772,758 1,229,956
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from creation of units 17,991,103 528,380
Payments for cancellation of units (18,068,747) (1,779,747)
Distributions paid (355) (284)
Net cash used in financing activities (77,999) (1,251,651)
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS 1,694,759 (21,695)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF FINANCIAL YEAR 350,007 371,702
CASH AND CASH EQUIVALENTS AT
END OF FINANCIAL YEAR 2,044,766 350,007
Cash and cash equivalents comprise:
Deposits with financial institutions 5 2,040,372 -
Cash at banks 4,394 350,007
2,044,766 350,007
The accompanying notes form an integral part of the financial statements.
14
AmAustralia
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
Standards effective during the financial year
Standards issued but not yet effective
Effective for
financial periods
beginning on or after
MFRS 9: Financial Instruments
MFRS 15: Revenue From Contracts With Customers 1 January 2018
The financial statements of the Fund have been prepared in accordance with Malaysian Financial
Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board
(“MASB”) and are in compliance with International Financial Reporting Standards.
The adoption of MFRS which have been effective during the financial year did not have any
material financial impact to the financial statements.
The Fund was set up with the objective to provide income and long-term capital growth by
investing in Australian equities and Australian dollar fixed income securities. As provided in the
Deed, the “accrual period” or financial year shall end on 31 July and the units in the Fund for MYR
Class and AUD Class were first offered for sale on 15 March 2011 and 10 September 2014
respectively. There were no units in circulation for the AUD Class since its offer date.
AmAustralia (“the Fund”) was established pursuant to a Deed dated 23 July 2010 as amended by
Deeds Supplemental thereto (“the Deed”), between AmFunds Management Berhad as the
Manager, Deutsche Trustees Malaysia Berhad as the Trustee and all unitholders.
As at the date of authorisation of these financial statements, the following Standards, which are
relevant to the Fund, have been issued by MASB but are not yet effective and have not been
adopted by the Fund.
The Fund plans to adopt the above pronouncements when they become effective in the respective
financial periods. These pronouncements are expected to have no significant impact to the financial
statements of the Fund upon their initial application except as described below:
1 January 2018
The financial statements of the Fund have been prepared under the historical cost convention,
unless otherwise stated in the accounting policies.
15
MFRS 9 Financial Instruments
3. SIGNIFICANT ACCOUNTING POLICIES
Income recognition
Income tax
Functional and presentation currency
Foreign currency transactions
Statement of cash flows
The Fund adopts the direct method in the preparation of the statement of cash flows.
MFRS 9 reflects International Accounting Standards Board’s (“IASB”) work on the replacement of
MFRS 139 Financial Instruments: Recognition and Measurement (“MFRS 139”). MFRS 9 will be
effective for financial year beginning on or after 1 January 2018. The Fund is in the process of
quantifying the impact of the first adoption of MFRS 9.
Income is recognised to the extent that it is probable that the economic benefits will flow to the
Fund and the income can be reliably measured. Income is measured at the fair value of
consideration received or receivable.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the tax authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted at the reporting date.
Functional currency is the currency of the primary economic environment in which the Fund
operates that most faithfully represents the economic effects of the underlying transactions. The
functional currency of the Fund is Ringgit Malaysia which reflects the currency in which the Fund
competes for funds, issues and redeems units. The Fund has also adopted Ringgit Malaysia as its
presentation currency.
Transactions in currencies other than the Fund’s functional currency (foreign currencies) are
recorded in the functional currency using exchange rates prevailing at the transaction dates. At each
reporting date, foreign currency monetary items are translated into Ringgit Malaysia at exchange
rates ruling at the reporting date. All exchange gains or losses are recognised in profit or loss.
Cash equivalents are short-term, highly liquid investments that are readily convertible to cash with
insignificant risk of changes in value.
Dividend income is recognised when the Fund’s right to receive payment is established. Interest
income on short-term deposits is recognised on an accrual basis using the effective interest method.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive income or directly in equity.
16
Distribution
Unitholders’ capital
Financial assets
(i) Financial assets at FVTPL
On disposal of investments, the net realised gain or loss on disposal is measured as the
difference between the net disposal proceeds and the carrying amount of the investments. The
net realised gain or loss is recognised in profit or loss.
Financial assets 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.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of
financial assets not at fair value through profit or loss, directly attributable transaction costs.
Distributions are at the discretion of the Fund. A distribution to the Fund’s unitholders is accounted
for as a deduction from realised reserve. A proposed distribution is recognised as a liability in the
period in which it is approved.
Subsequent to initial recognition, financial assets at FVTPL are measured at fair value.
Changes in the fair value of those financial instruments are recorded in ‘Net gain or loss on
financial assets at fair value through profit or loss’. Dividend revenue and interest earned
elements of such instruments are recorded separately in ‘Gross dividend income’ and ‘Interest
income’ respectively. Exchange differences, if any, on financial assets at FVTPL are not
recognised separately in profit or loss but are included in net gains or net losses on changes in
fair value of financial assets at FVTPL.
The unitholders’ capital of the Fund meets the definition of puttable instruments and is classified as
equity instruments under MFRS 132 Financial Instruments: Presentation (“MFRS 132”).
The Fund determines the classification of its financial assets at initial recognition, and the
categories applicable to the Fund include financial assets at fair value through profit or loss
(“FVTPL”) and loans and receivables.
Financial assets are classified as financial assets at FVTPL if they are held for trading or are
designated as such upon initial recognition. Financial assets held for trading by the Fund
include equity securities acquired principally for the purpose of selling in the near term.
For investments in foreign listed securities, which are quoted in the respective stock
exchanges, market value will be determined based on the published market price quoted by the
respective stock exchanges at the end of each business day. Unrealised gains or losses
recognised in profit or loss are not distributable in nature.
17
(ii) Loans and receivables
Impairment of financial assets
(i) Loans and receivables carried at amortised cost
Financial liabilities
A financial liability is derecognised when the obligation under the liability is extinguished. Gains
and losses are recognised in profit or loss when the liabilities are derecognised, and through the
amortisation process.
Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial
position when, and only when, the Fund becomes a party to the contractual provisions of the
financial instrument.
Financial assets with fixed or determinable payments that are not quoted in an active market
are classified as loans and receivables.
The Fund assesses at each reporting date whether there is any objective evidence that a financial
asset is impaired.
To determine whether there is objective evidence that an impairment loss on financial assets
has been incurred, the Fund considers factors such as the probability of insolvency or
significant financial difficulties of the debtor and default or significant delay in payments.
The carrying amount of the financial asset is reduced through the use of an allowance account.
When loans and receivables become uncollectible, they are written off against the allowance
account.
If any such evidence exists, the amount of impairment loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the financial asset’s original effective interest rate. The impairment loss is
recognised in profit or loss.
The Fund’s financial liabilities are recognised initially at fair value plus directly attributable
transaction costs and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are classified according to the substance of the contractual arrangements
entered into and the definitions of a financial liability.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed to the extent that the carrying amount of the asset does
not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit
or loss.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using
the effective interest method. Gains and losses are recognised in profit or loss when the loans
and receivables are derecognised or impaired, and through the amortisation process.
18
Classification of realised and unrealised gains and losses
Significant accounting estimates and judgments
4. INVESTMENT
2017 2016
RM RM
Financial assets at FVTPL
Quoted equity securities in Australia - 1,565,232
5. DEPOSITS WITH FINANCIAL INSTITUTIONS
2017 2016
RM RM
At nominal value:
Short-term deposits with licensed banks 1,432,200 -
Short-term deposits with licensed Islamic banks 608,000 -
2,040,200 -
(Forward)
Realised gains and losses on disposals of financial instruments classified at fair value through
profit or loss are calculated using the weighted average method. They represent the difference
between an instrument’s initial carrying amount and disposal amount.
No major judgments have been made by the Manager in applying the Fund’s accounting policies.
There are no key assumptions concerning the future and other key sources of estimation uncertainty
at the reporting date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
Unrealised gains and losses comprise changes in the fair value of financial instruments for the
period and from reversal of prior period’s unrealised gains and losses for financial instruments
which were realised (i.e. sold, redeemed or matured) during the reporting period.
The preparation of the Fund’s financial statements requires the Manager to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty
about these assumptions and estimates could result in outcomes that could require a material
adjustment to the carrying amount of the asset or liability in the future.
The Fund classifies its investments as financial assets at FVTPL as the Fund may sell its
investments in the short-term for profit-taking or to meet unitholders’ cancellation of units.
19
2017 2016
RM RM
At carrying value:
Short-term deposits with licensed banks 1,432,321 -
Short-term deposits with licensed Islamic banks 608,051 -
2,040,372 -
Details of deposits with financial institutions as at 31 July 2017 are as follows:
Carrying
value as a
percentage
Nominal Carrying Purchase of net asset
value value cost value
RM RM RM %
Short-term deposits with licensed banks
01.08.2017 CIMB Bank
Berhad 304,000 304,025 304,000 15.00
01.08.2017 Hong Leong
304,000 304,025 304,000 15.00
01.08.2017
Banking
Berhad 304,000 304,027 304,000 15.00
01.08.2017
Berhad 304,000 304,027 304,000 15.00
01.08.2017
Bank
(Malaysia)
Bhd. 216,200 216,217 216,200 10.67
1,432,200 1,432,321 1,432,200 70.67
Short-term deposits with licensed Islamic banks
01.08.2017 CIMB Islamic
304,000 304,025 304,000 15.00
01.08.2017
Berhad 304,000 304,026 304,000 15.00
608,000 608,051 608,000 30.00
Total 2,040,200 2,040,372 2,040,200 100.67
Maturity
date Bank
Bank Berhad
Malayan
Public Bank
United Overseas
Bank Berhad
Maybank Islamic
20
2017 2016 2017 2016
% % Day Day
Short-term deposits with:
- Licensed banks 3.09 - 1 -
- Licensed Islamic banks 3.03 - 1 -
6. AMOUNT DUE (TO)/FROM MANAGER
2017 2016
RM RM
Creation of units* - 4,560
Manager’s fee payable (4,647) (2,684)
(4,647) 1,876
*
7.
2017 2016
RM RM
Amounts owing from brokers - 87,638
Amounts owing to brokers - (39,214)
The normal trade credit period is three business days.
The amount represents amount receivable from the Manager for units created.
Remaining
maturityinterest rate
Included in sundry receivables/payables and accrued expenses were amounts owing from/to
brokers for outstanding contracts where settlement were not due as follows:
The normal credit period in the previous and current financial years for Manager’s fee payable is
one month.
SUNDRY RECEIVABLES/PAYABLES AND ACCRUED EXPENSES
Manager’s fee is at a rate of 1.80% (2016: 1.80%) per annum on the net asset value of the Fund,
calculated on a daily basis.
The weighted average effective interest rate and average remaining maturity of short-term deposits
are as follows:
Weighted average effective
The normal credit period in the previous and current financial years for creation and redemption of
units is three business days.
21
8. AMOUNT DUE TO TRUSTEE
9. NET GAIN FROM INVESTMENTS
2017 2016
RM RM
Net gain on financial assets at FVTPL comprised:
− Net realised gain on sale of investments 299,161 1,287
− Net realised gain on foreign currency exchange 178,870 52,926
− Net unrealised loss on changes in fair values of investments (247,181) (78,709)
− Net unrealised (loss)/gain on foreign currency fluctuation of
investments denominated in foreign currency (22,929) 208,863
207,921 184,367
10. OTHER EXPENSES
11. TOTAL EQUITY
Total equity is represented by:
2017 2016
Note RM RM
Unitholders’ capital (a) 522,350 604,554
Retained earnings
− Realised income (b) 1,504,321 1,082,712
− Unrealised gain (c) - 270,177
2,026,671 1,957,443
Included in other expenses is Goods and Services Tax incurred by the Fund during the financial
year amounting to RM10,466 (2016: RM5,343).
Trustee’s fee is at a rate of 0.06% (2016: 0.06%) per annum on the net asset value of the Fund,
calculated on a daily basis, subject to a minimum fee of RM10,000 per annum.
The normal credit period in the previous and current financial years for Trustee’s fee payable is one
month.
22
(a) UNITHOLDERS’ CAPITAL/UNITS IN CIRCULATION
2016
Number of Number of
units RM units RM
At beginning of the
financial year 3,430,247 604,554 5,321,135 1,668,495
Creation during the
financial year 31,561,410 17,986,543 939,427 532,940
Distributions reinvested
(Note 14) - - 313,565 174,848
Cancellation during the
financial year (31,411,935) (18,068,747) (3,143,880) (1,771,729)
At end of the financial
year 3,579,722 522,350 3,430,247 604,554
(b) REALISED – DISTRIBUTABLE
2017 2016
RM RM
At beginning of the financial year 1,082,712 1,199,648
Total comprehensive income for the financial year 151,432 188,930
Net unrealised gain attributable to investments held
and others transferred to unrealised reserve [Note 11(c)] - (130,379)
Net unrealised gain transferred from unrealised reserve
upon disposal of investments [Note 11(c)] 270,177 -
Distributions out of realised reserve (Note 14) - (175,487)
Net increase/(decrease) in realised reserve for the
financial year 421,609 (116,936)
At end of the financial year 1,504,321 1,082,712
(c) UNREALISED – NON-DISTRIBUTABLE
2017 2016
RM RM
At beginning of the financial year 270,177 139,798
Net unrealised gain attributable to investments held
and others transferred from realised reserve [Note 11(b)] - 130,379
Net unrealised gain transferred to realised reserve
upon disposal of investments [Note 11(b)] (270,177) -
At end of the financial year - 270,177
2017
23
12. UNITS HELD BY RELATED PARTIES
13. INCOME TAX
2017 2016
RM RM
Current financial year – foreign tax 2,829 1,255
2017 2016
RM RM
Net income before tax 154,261 190,185
Taxation at Malaysian statutory rate of 24% 37,023 45,644
Tax effects of:
Income not subject to tax (139,334) (83,609)
Effect of different tax rate in other countries (2,610) (1,919)
Loss not deductible for tax purposes 64,842 18,890
Restriction on tax deductible expenses for unit trust fund 16,845 10,930
Non-permitted expenses for tax purposes 24,192 10,105
Permitted expenses not used and not available for future
financial years 1,871 1,214
Tax expense for the financial year 2,829 1,255
14. DISTRIBUTION
2017 2016
RM RM
Undistributed net income brought forward - 116,936
(Forward)
A reconciliation of income tax expense applicable to net income before tax at the statutory income
tax rate to income tax expense at the effective income tax rate of the Fund is as follows:
The Manager and parties related to the Manager did not hold any units in the Fund as at 31 July
2017 and 31 July 2016.
Income tax payable is calculated on investments income less deduction for permitted expenses as
provided for under Section 63B of the Income Tax Act, 1967.
Pursuant to Schedule 6 of the Income Tax Act, 1967, local interest income derived by the Fund is
exempted from tax.
Distribution to unitholders declared on 18 September 2015 and 26 July 2016 are from the
following sources:
24
2017 2016
RM RM
Gross dividend income - 96,544
Interest income - 1,752
Net realised gain on sale of investments - 1,287
Net realised gain on foreign currency exchange - 52,926
- 269,445
Less: Expenses - (92,703)
Tax - (1,255)
Total amount of distributions - 175,487
Gross/net distributions per unit (sen) - 4.50
Distributions made out of:
– Realised reserve [Note 11(b)] - 175,487
Comprising:
Distributions reinvested [Note 11(a)] - 174,848
Distributions payable - 355
Cash distributions - 284
- 175,487
15. MANAGEMENT EXPENSE RATIO (“MER”)
The Fund’s MER is as follows:
2017 2016
% p.a. % p.a.
Manager’s fee 1.80 1.80
Trustee’s fee 0.26 0.42
Fund’s other expenses 2.58 1.71
Total MER 4.64 3.93
16. PORTFOLIO TURNOVER RATIO (“PTR”)
The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by the Fund
to the average net asset value of the Fund calculated on a daily basis.
The PTR of the Fund, which is the ratio of average total acquisitions and disposals of investments
to the average net asset value of the Fund calculated on a daily basis, is 1.64 times (2016: 1.34
times).
Included in the distributions for the financial year ended 31 July 2016 was RM116,936 distributed
from previous financial years’ realised income.
25
17. SEGMENTAL REPORTING
– A portfolio of equity instruments; and
– A portfolio of fixed income instruments, including deposits with financial institutions.
Fixed Fixed
Equity income Equity income
portfolio portfolio Total portfolio portfolio Total
RM RM RM RM RM RM
Gross
dividend
income 77,010 - 77,010 96,544 - 96,544
Interest income - 48,181 48,181 - 1,752 1,752
Net gain from
investments:
– Financial
assets at
FVTPL 207,921 - 207,921 184,367 - 184,367
Other
unrealised
foreign
exchange
(loss)/gain (67) - (67) 225 - 225
Total segment
investments
income for the
financial
year 284,864 48,181 333,045 281,136 1,752 282,888
Financial
assets
at FVTPL - - - 1,565,232 - 1,565,232
Deposits with
financial
institutions - 2,040,372 2,040,372 - - -
(Forward)
The Manager and Investment Committee of the Fund are responsible for allocating resources
available to the Fund in accordance with the overall investment strategies as set out in the
Investment Guidelines of the Fund. The Fund is managed by two segments:
The investment objective of each segment is to achieve consistent returns from the investments in
each segment while safeguarding capital by investing in diversified portfolios. There have been
no changes in reportable segments in the current financial period. The segment information
provided is presented to the Manager and Investment Committee of the Fund.
2017 2016
26
Fixed Fixed
Equity income Equity income
portfolio portfolio Total portfolio portfolio Total
RM RM RM RM RM RM
Dividends
receivable - - - 2,278 - 2,278
Amount owing
from brokers - - - 87,638 - 87,638
Total segment
assets - 2,040,372 2,040,372 1,655,148 - 1,655,148
Amount
owing
to brokers - - - 39,214 - 39,214
Total
segment
liabilites - - - 39,214 - 39,214
2017 2016
RM RM
Net reportable segment investment income 333,045 282,888
Less: Expenses (178,784) (92,703)
Net income before tax 154,261 190,185
Less: Income tax (2,829) (1,255)
Net income after tax 151,432 188,930
Expenses of the Fund are not considered part of the performance of any investment segment. The
following table provides reconciliation between the net reportable segment income and net
income after tax:
In addition, certain assets and liabilities are not considered to be part of the net assets or liabilities
of an individual segment. The following table provides reconciliation between the net reportable
segment assets and liabilities and total assets and liabilities of the Fund.
2017 2016
27
2017 2016
RM RM
Total segment assets 2,040,372 1,655,148
Amount due from Manager - 1,876
Cash at banks 4,394 350,007
Total assets of the Fund 2,044,766 2,007,031
Total segment liabilities - 39,214
Amount due to Manager 4,647 -
Amount due to Trustee 849 792
Distributions payable - 355
Sundry payables and accrued expenses 12,599 9,227
Total liabilities of the Fund 18,095 49,588
18. TRANSACTIONS WITH BROKERS AND FINANCIAL INSTITUTIONS
Brokers/Financial institutions
RM % RM %
CIMB Securities Limited 6,129,291 48.83 16,243 48.78
Macquarie Bank Limited 2,579,414 20.55 8,207 24.64
CLSA Australia Pty Ltd 1,494,807 11.91 3,167 9.51
Instinet Australia Pty Limited 1,218,510 9.71 3,237 9.72
J.P. Morgan Australia Limited 1,046,359 8.34 2,222 6.67
CIMB Securities (Australia) Limited 72,668 0.58 192 0.58
Macquarie Limited Capital Securities
(Australia) Limited 10,017 0.08 32 0.10
Total 12,551,066 100.00 33,300 100.00
stamp duty and
Brokerage fee,
Details of transactions with brokers and financial institutions for the financial year ended 31 July
2017 are as follows:
Transaction value
The above transactions were in respect of listed securities.
clearing fee
There was no transaction with financial institutions related to the Manager, during the financial
year.
28
19. FINANCIAL INSTRUMENTS
(a) Classification of financial instruments
Loans and Financial
Financial receivables liabilities at
assets at amortised amortised
at FVTPL cost cost Total
RM RM RM RM
Assets
Deposits with financial institutions - 2,040,372 - 2,040,372
Cash at banks - 4,394 - 4,394
Total financial assets - 2,044,766 - 2,044,766
Liabilities
Amount due to Manager - - 4,647 4,647
Amount due to Trustee - - 849 849
Sundry payables and accrued
expenses - - 12,599 12,599
Total financial liabilities - - 18,095 18,095
Assets
Investments 1,565,232 - - 1,565,232
Amount due from Manager - 1,876 - 1,876
Dividends receivable - 2,278 - 2,278
Sundry receivables - 87,638 - 87,638
Cash at banks - 350,007 - 350,007
Total financial assets 1,565,232 441,799 - 2,007,031
Liabilities
Amount due to Trustee - - 792 792
Distributions payable - - 355 355
Sundry payables and accrued
expenses - - 48,441 48,441
Total financial liabilities - - 49,588 49,588
2016
2017
The significant accounting policies in Note 3 describe how the classes of financial
instruments are measured, and how income and expenses, including fair value gains and
losses, are recognised. The following table analyses the financial assets and liabilities of the
Fund in the statement of financial position by the class of financial instrument to which they
are assigned, and therefore by the measurement basis.
29
Income, expense, gains
and losses
2017 2016
RM RM
Net gain from financial assets at FVTPL 207,921 184,367
Income, of which derived from:
− Gross dividend income from financial assets at FVTPL 77,010 96,544
− Interest income from loan and receivables 48,181 1,752
− Other unrealised foreign exchange (loss)/gain (67) 225
(b) Financial instruments that are carried at fair value
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2:
Level 3:
Level 1 Level 2 Level 3 Total
RM RM RM RM
1,565,232 - - 1,565,232
(c)
Deposits with financial institutions
Amount due from/to Manager
Dividends receivable
Sundry receivables
Cash at banks
Amount due to Trustee
Distributions payable
Sundry payables and accrued expenses
The following are classes of financial instruments that are not carried at fair value and
whose carrying amounts are reasonable approximation of fair value due to their short period
to maturity or short credit period:
The following table shows an analysis of financial instruments recorded at fair value by the
level of the fair value hierarchy:
The Fund uses the following hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:
techniques which use inputs which have a significant effect on the recorded fair
value that are not based on observable market data.
The Fund’s financial assets and liabilities at FVTPL are carried at fair value.
2016
Financial assets at FVTPL
Financial instruments that are not carried at fair value and whose carrying amounts
are reasonable approximation of fair value
other techniques for which all inputs which have a significant effect on the
recorded fair values are observable; either directly or indirectly; or
30
20. RISK MANAGEMENT POLICIES
Market risk
(i) Price risk
Percentage movements in
price by: 2017 2016
RM RM
-5.00% - (78,262)
+5.00% - 78,262
(ii) Interest rate risk
Market risk, in general, is the risk that the value of a portfolio would decrease due to changes in
market risk factors such as equity prices, interest rates, foreign exchange rates, and commodity
prices.
Risk management is carried out by closely monitoring, measuring and mitigating the above said
risks, careful selection of investments coupled with stringent compliance to investment
restrictions as stipulated by the Capital Market and Services Act 2007, Securities Commission’s
Guidelines on Unit Trust Funds and the Deed as the backbone of risk management of the Fund.
There are no financial instruments which are not carried at fair values and whose carrying
amounts are not reasonable approximation of their respective fair values.
Price risk refers to the uncertainty of an investment’s future prices. In the event of adverse
price movements, the Fund might endure potential loss on its quoted investments. In
managing price risk, the Manager actively monitors the performance and risk profile of the
investment portfolio.
The result below summarised the price risk sensitivity of the Fund’s NAV due to
movements of price by -5.00% and +5.00% respectively.
Sensitivity of the Fund’s NAV
The result below summarised the interest rate sensitivity of the Fund’s NAV, or theoretical
value (applicable to money market deposit) due to the parallel movement assumption of the
yield curve by +100bps and -100bps respectively:
Interest rate risk will affect the value of the Fund’s investments, given the interest rate
movements, which are influenced by regional and local economic developments as well as
political developments.
Domestic interest rates on deposits and placements with licensed financial institutions are
determined based on prevailing market rates.
The Fund is exposed to a variety of risks that include market risk, credit risk, liquidity risk, single
issuer risk, regulatory risk, country risk, management risk and non-compliance risk.
31
Parallel shift in yield
curve by: 2017 2016
RM RM
+100bps (54) -
-100bps 55 -
(iii) Currency risk
Percentage movements in
currencies other than the 2017 2016
Fund’s functional currency: RM RM
-5.00% (88) (95,897)
+5.00% 88 95,897
2017
Assets/(liabilities) denominated RM % of net RM % of net
in Australian Dollar equivalent asset value equivalent asset value
Investments - - 1,565,232 79.96
Dividends receivable - - 2,278 0.11
Sundry receivables - - 87,638 4.48
Cash at banks 1,754 0.09 302,012 15.43
Sundry payables - - (39,214) (2.00)
1,754 0.09 1,917,946 97.98
Credit risk
Currency risk is associated with the Fund’s assets and liabilities that are denominated in
currencies other than the Fund’s functional currency. Currency risk refers to the potential
loss the Fund might face due to unfavorable fluctuations of currencies other than the Fund’s
functional currency against the Fund’s functional currency.
The result below summarised the currency risk sensitivity of the Fund’s NAV due to
appreciation/depreciation of the Fund’s functional currency against currencies other than the
Fund’s functional currency.
The net unhedged financial assets and financial liabilities of the Fund that are not
denominated in Fundʼs functional currency are as follows:
Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss to
the Fund by failing to discharge an obligation. Credit risk applies to short-term deposits and
dividends receivable. The issuer of such instruments may not be able to fulfill the required
interest payments or repay the principal invested or amount owing. These risks may cause the
Fund’s investments to fluctuate in value.
Sensitivity of the Fund’s NAV, or theoretical value
Sensitivity of the Fund’s NAV
2016
32
Liquidity risk
Single issuer risk
Regulatory risk
Country risk
Management risk
Non-compliance risk
Liquidity risk is defined as the risk of being unable to raise funds or borrowings to meet payment
obligations as they fall due. This is also the risk of the Fund experiencing large redemptions,
when the Investment Manager could be forced to sell large volumes of its holdings at
unfavourable prices to meet redemption requirements.
Internal policy restricts the Fund from investing in securities issued by any issuer of not more
than a certain percentage of its net asset value. Under such restriction, the risk exposure to the
securities of any single issuer is diversified and managed based on internal/external ratings.
The risk of price fluctuation in foreign securities may arise due to political, financial and
economic events in foreign countries. If this occurs, there is a possibility that the net asset value
of the Fund may be adversely affected.
Poor management of the Fund may cause considerable losses to the Fund that in turn may affect
the net asset value of the Fund.
This is the risk of the Manager, the Trustee or the Fund not complying with internal policies, the
Deed of the Fund, securities law or guidelines issued by the regulators. Non-compliance risk may
adversely affect the investments of the Fund when the Fund is forced to rectify the non-
compliance.
Any changes in national policies and regulations may have effects on the capital market and the
net asset value of the Fund.
The Fund maintains sufficient level of liquid assets, after consultation with the Trustee, to meet
anticipated payments and cancellations of units by unitholders. Liquid assets comprise of deposits
with licensed financial institutions and other instruments, which are capable of being converted
into cash within 5 to 7 days. The Fund’s policy is to always maintain a prudent level of liquid
assets so as to reduce liquidity risk.
For deposits with financial institutions, the Fund makes placements with financial institutions
with sound rating of P1/MARC-1 and above. Cash at banks are held for liquidity purposes and
are not exposed to significant credit risk.
33
21. CAPITAL MANAGEMENT
No changes were made in the objective, policies or processes during the financial years ended 31
July 2017 and 31 July 2016.
The Fund manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Fund may issue new or
bonus units, make distribution payment, or return capital to unitholders by way of redemption of
units.
The primary objective of the Fund’s capital management is to ensure that it maximises
unitholders’ value by expanding its fund size to benefit from economies of scale and achieving
growth in net asset value from the performance of its investments.
34
AmAustralia
STATEMENT BY THE MANAGER
Kuala Lumpur, Malaysia
7 September 2017
GOH WEE PENG
For and on behalf of the Manager
AmFunds Management Berhad
I, GOH WEE PENG, for and on behalf of the Manager, AmFunds Management Berhad, for
AmAustralia do hereby state that in the opinion of the Manager, the accompanying statement of
financial position, statement of comprehensive income, statement of changes in equity, statement of
cash flows and the accompanying notes are drawn up in accordance with Malaysian Financial
Reporting Standards and International Financial Reporting Standards so as to give a true and fair
view of the financial position of the Fund as at 31 July 2017 and the comprehensive income, the
changes in equity and cash flows of the Fund for the financial year then ended.
35
36
TRUSTEE’S REPORT
37
DIRECTORY
Head Office 9th
Floor, Bangunan Ambank Group
55, Jalan Raja Chulan, 50200 Kuala Lumpur
Tel: (03) 2032 2888 Facsimile: (03) 2031 5210
Email: [email protected]
Postal Address AmFunds Management Berhad
P.O Box 13611, 50816 Kuala Lumpur
Related Institutional Unit Trust Agent
AmBank (M) Berhad Head Office
Company No. 8515-D 31st Floor, Menara AmBank
No. 8 Jalan Yap Kwan Seng, 50450 Kuala Lumpur
AmInvestment Bank Berhad Head Office
Company No. 23742-V 22nd
Floor, Bangunan AmBank Group
55 Jalan Raja Chulan, 50200 Kuala Lumpur
For more details on the list of IUTAs, please contact the Manager.
For enquiries about this or any of the other Funds offered by AmFunds Management Berhad
Please call 2032 2888 between 8.45 a.m. to 5.45 p.m. (Monday to Thursday),
Friday (8.45 a.m. to 5.00 p.m.)
Semi-Annual Report28 February 2015
03 2132 2888 | aminvest.com | [email protected]
AmFunds Management Berhad (155432-A)