INTERIM REPORT MARCH 2014 - · PDF fileINTERIM REPORT MARCH 2014 ... and redemption of units by the Management Company ... the full year growth rate to 4.7% in 2013 compared to 5.6%

I NTERIM REPORT MA RCH 2014

Areca growthTRUST Fund

Contents

CORPORATE DIRECTORY 2

MANAGER’S REPORT

Fund Information, Performance & Review 3

Market Review & Outlook 8

TRUSTEE’S REPORT 10

STATEMENT BY THE MANAGER 10

UNAUDITED FINANCIAL STATEMENTS FOR

Areca growthTRUST Fund 11

INTERIM REPORT MARCH 2014


2

C O R P O R A T E D I R E C T O R Y

MANAGER

Areca Capital Sdn Bhd (740840-D)

107, Blok B, Pusat Dagangan Phileo Damansara 1

No. 9, Jalan 16/11, Off Jalan Damansara

46350 Petaling Jaya, Selangor

Tel: 603-7956 3111, Fax: 603-7955 4111

website: www.arecacapital.com

e-mail: [email protected]

BOARD OF DIRECTORS

Dato’ Wee Hoe Soon @ Gooi Hoe Soon

(Independent, Chairman)

Wong Teck Meng (Executive)

Raja Datuk Zaharaton Bt Raja Dato’ Zainal Abidin

(Non-Executive Non-Independent)

Tam Chiew Lin (Non-Executive Non-Independent) Dr. Junid Saham (Independent)

INVESTMENT COMMITTEE MEMBERS


(Independent, Chairman)

Raja Datuk Zaharaton Bt Raja Dato’ Zainal Abidin

(Non-Independent)

Teoh Boon Kiaw (Non-Independent)

Dr. Junid Saham (Independent)

AUDIT COMMITTEE MEMBERS


Wong Teck Meng

Dr. Junid Saham

TRUSTEE

Deutsche Trustees Malaysia Berhad

(763590-H)

Level 20, Menara IMC

8, Jalan Sultan Ismail

50250 Kuala Lumpur

Tel: 03-2053 7522 Fax: 03-2053 7526

AUDITOR

PricewaterhouseCoopers (AF1146)

Level 10, 1 Sentral, Jalan Travers Kuala Lumpur Sentral, P O Box 10192

50706 Kuala Lumpur

Tel: 03-2173 1188, Fax: 03-2173 1288

TAX ADVISER

PricewaterhouseCoopers Taxation Services

Sdn Bhd (464731-M) Level 10, 1 Sentral, Jalan Travers

Kuala Lumpur Sentral, P O Box 10192

50706 Kuala Lumpur

Tel: 03-2173 1188, Fax: 03-2173 1288

M A N A G E R ’ S O F F I C E A N D B R A N C H E S

HEAD OFFICE

107, Blok B, Pusat Dagangan Phileo Damansara 1, No. 9, Jalan 16/11, Off Jalan Damansara,

46350 Petaling Jaya, Selangor

Tel: 603-7956 3111, Fax: 603-7955 4111

website: www.arecacapital.com

e-mail: [email protected]

PENANG – PULAU TIKUS

368-2-02 Belissa Row

Jalan Burma, Georgetown

10350 Pulau Pinang

Tel : 604-210 2011 Fax: 604-210 2013

PERAK – IPOH

11A, (First Floor)

Persiaran Greentown 5

Greentown Business Centre

30450 Ipoh, Perak Tel : 605-249 6697/6698

Fax: 605-249 6696

MALACCA

95A, Jalan Melaka Raya 24

Taman Melaka Raya

75000 Melaka

Tel : 606-282 9111

Fax: 606-283 9112

mailto:[email protected]

mailto:[email protected]



3

F U N D I N F O R M A T I O N

Name of the Fund Areca growthTRUST Fund

Fund Category/

Type

Equity / Growth

Objective of the

Fund

To provide investors with an opportunity for capital growth.

Benchmark MSCI AC Asia Ex Japan Index (obtainable from Bloomberg)

Distribution Policy

of the Fund

Incidental. In the absence of instruction to the contrary from a Unit Holder,

the Manager is entitled to reinvest the income distributed from the Fund in

additional Units of that Fund at the NAV per Unit at the end of the

distribution day with no entry fee.

Profile of Unit

Holdings

* excluding units held

by the Manager

As at 31 March 2014

Size of Holding

(Units)

No. of

accounts %

No. of

units held

‘million

%

Up to 5,000 1 3.57 0.01 0.05

5,001 to 10,000 - - - -

10,001 to 50,000 10 35.71 0.35 7.25

50,001 to 500,000 13 46.43 1.60 32.98

500,001 and above 4 14.29 2.89 59.72

Total* 28 100.00 4.85 100.00

Rebates & Soft

Commissions

The Management Company retains soft commissions received from

stockbrokers, provided these are of demonstrable benefit to the Unit

Holders. The soft commissions may take the form of goods and services

provided such as data and quotation services, computer software and

investment related publications incidental to the management of the Fund.

Cash rebates, if any, are directed to the account of the Fund. During the

period under review, the Manager had not received any soft commissions.

Inception Date 12 March 2010

Commencement

Date

12 April 2010

Initial Offer Price RM0.5000 per unit during the initial offer period of 21 days ended 1 April

2010

Pricing Policy

Single Pricing – Selling and repurchase of units by Manager are at Net Asset

Value per unit

Financial year end 30 September



4

F U N D P E R F O R M A N C E

2014 2013 2012

NET ASSET VALUE (“NAV”) as at 31 March

Total Net Asset Value (RM million) 2.51 4.44 3.70

Units in circulation (million units) 4.85 8.29 7.93

NAV per unit (RM) 0.5173 0.5354 0.4667

2014 2013 2012

HIGHEST & LOWEST NAV PER UNIT for the period ended 31 March Please refer to Note 1 for further information on NAV and pricing policy

Highest NAV per unit (RM) 0.5322 0.5555 0.4852

Lowest NAV per unit (RM) 0.4887 0.4266 0.4408

2014 2013 2012

ASSET ALLOCATION % of NAV as at 31 March

Quoted equities & equity-related securities (Local)

Main Market

Construction 2.53 - -

Consumer Products 1.60 - -

Finance 2.05 - -

Industrial Products 12.62 - -

Properties 2.25 - -

Trading / Services 13.30 - 4.60

Quoted equities & equity-related securities (Foreign)

Agriculture 7.14 12.11 -

Conglomerates 7.97 - -

Consumer Goods 18.03 7.45 9.92

Consumer Services 16.79 - -

Finance 3.28 3.16 9.50

Industrial Goods/ Products 6.93 - 11.43

Infrastructure, Utilities And Transportation - 15.66 -

Information Technology - - 5.15

Oil & Gas - - 5.06

Plantations - - 4.41

Property, Real Estate And Building Construction - 14.17 22.18

Trade , Services & Investment - 24.95 4.36

Cash & cash equivalent including placements & repo 5.51 22.50 23.39

DISTRIBUTION & UNIT SPLITS

There was no unit split exercise for the financial period under review.

2014

2013

2012

EXPENSE/ TURNOVER for the period ended 31 March

Management expense ratio (MER) (%) 1.29 1.69 1.06

Please refer to Note 2 for further information

Portfolio turnover ratio (PTR) (times) 0.93 1.44 1.87




5

F U N D P E R F O R M A N C E

2014 2013 2012

TOTAL RETURN for the period ended 31 March


Total Return (%) 5.90 22.43 4.97

- Capital Return (%) 5.90 22.43 4.97

- Income Return (%) - - -

2014 2013 2012 2011

Annual Total Return (%) 5.90 22.43 4.97 3.84

MSCI AC Asia Ex Japan Index (%) 2.35 6.13 12.19 5.44

1-yr 3-yrs 5-yrs

Average Total Return (%) -3.38 -0.48 -

NOTES:

Note 1: Selling of units by the Management Company (i.e. when you purchase units and invests in

the Fund) and redemption of units by the Management Company (i.e. when you redeem your units

and liquidate your investments) will be carried out at NAV per unit (the actual value of a unit). The

entry/ exit fee (if any) would be computed separately based on your net investment/ liquidation

amount.

Note 2: MER is calculated based on the total fees and expenses incurred by the Fund, divided by

the average net asset value calculated on a daily basis.

Note 3: PTR is computed based on the average of the total acquisitions and total disposals of the

investment securities of the Fund, divided by the average net asset value calculated on a daily

basis.

Note 4: Fund performance figures are calculated based on NAV to NAV and assume reinvestment

of distributions (if any) at NAV. The total return and the benchmark data are sourced from Lipper.

Past performance is not necessarily indicative of future performance. Unit prices and

investment returns may go down, as well as up.



6

F U N D R E V I E W

During the period from October 2013 to March 2014, the Fund’s NAV per unit increased by 5.9%

compared to benchmark return (MSCI Asia Ex-Japan) of 2.3%.

The Fund achieved its objective of providing investors with an opportunity for capital growth for the

period under review. The Fund out-performed its benchmark mainly due to stocks selection. In

particular, the Fund benefited from the performance of selected Malaysian small cap stocks.

The Fund’s top performing holdings were Brahim’s Holdings Berhad, Melco International

Development and Uzma Bhd while the under-performers were Beijing Capital International Airport,

Emperor Watch & Jewellery Limited and Shun Tak Holdings Ltd.

Investment Policy and Strategy

The Fund invests in domestic and Asian equities and equity-related securities with capital growth

potential, including collective investment schemes with similar objective as the Fund.

Depending on the market conditions and outlook, the Manager may choose to hold on to the cash

invested by the investors in deposits, fixed income securities or collective investment schemes for

such time and invest into the equities only when the opportunities arise i.e. the Manager will make

its best effort in timing the market entry to achieve the Fund’s objective. The Manager will employ

an aggressive investment strategy tactically in achieving the objective.

NAV per unit as at 31 March 2014 RM0.5173

Asset Allocation/ Portfolio Composition as at 31 March 2014 2013 2012

Equities and equity related

Securities - local 34.35% - 4.60%

- foreign 60.14% 77.50% 72.01%

Cash & cash equivalents 5.51% 22.50% 23.39%

5.51%

34.35% 60.14%



7

F U N D R E V I E W

Performance of Areca growthTRUST Fund

for the financial period since inception to 31 March 2014



8

MARKET REVIEW & OUTLOOK

ECONOMIC REVIEW & OUTLOOK

Malaysia’s real GDP expanded at a better-than-expected 5.1% y-o-y in 4Q13 from 5.0% y-o-y in

3Q13, supported by domestic demand and improvement in exports. Private consumption growth

remained high at 7.3% y-o-y in 4Q13, although the pace of expansion moderated from 8.2% y-o-y

in 3Q13. Meanwhile, growth in private investment improved to 16.5% y-o-y in 4Q13 from 15.2% y-

o-y in 3Q13 amid higher capital spending in the service and manufacturing sectors. This brought

the full year growth rate to 4.7% in 2013 compared to 5.6% in 2012. Headline inflation inched

higher to 3.5% y-o-y in February 2014, the highest rate since November 2011. The surge was

primarily due to administered price adjustments from subsidy rationalisation.

Meanwhile, the current account surplus widened to RM16.2 billion in 4Q13 from RM9.8 billion in

3Q13. The federal government’s fiscal deficit declined to 3.9% of GDP in 2013 from 4.5% of GDP in

2012. Going forward, Malaysia is expected to continue to record a current account surplus in 2014

amid a recovery in export and gain in terms of trade from rising commodity prices. The

Government is also expected to meet its fiscal deficit target of 3.5% of GDP in 2015, aided by the

rollout of GST and implementation of more subsidy rationalisation measures.

In its last Monetary Policy Statement, Bank Negara Malaysia commented that the global economy

has continued to recover at a moderate pace, particularly in the major advanced economies.

However, the international financial markets are still vulnerable to shifts in global liquidity and

increased volatility. Going forward, the growth momentum is expected to be driven by an

improvement in the external sector while domestic demand could see some moderation due to the

impact from cost-push inflation pressure. The central bank is forecasting a GDP growth rate of

4.5%-5.5% in 2014 and expects inflation to trend higher due to domestic cost factors.

Regionally, the economic data of China seemed to suggest that its growth momentum has slowed.

The HSBC Flash PMI slid to 48.1 in March 2014, the lowest since July 2013. China’s industrial

production for January and February 2014 also grew weaker than market expectations. The

macroeconomic fundamentals in Indonesia however showed signs of improvement. Its inflation has

moderated to 7.3% in March 2014 while trade balance swung into surplus in February 2014 as

imports declined more than exports.

EQUITY MARKET REVIEW

During the period under review, the MSCI AC Asia Ex-Japan (MXASJ) index gained 2.3% (in Ringgit

terms) whilst the FBM KLCI gained 4.6%. Vietnam, India and Indonesia led the gainers while China,

Hong Kong and Korea were the laggards.

After surprising the market by not tapering its quantitative easing (QE) measures in its September

2013 meeting, the US Federal Reserve (US Fed) did eventually announced QE tapering in December

2013. The impact on market was a bit more muted with investors taking the announcement in

stride, possibly because the markets have been adjusting since mid 2013.

At the start of 2014, emerging markets, with the exception of Indonesia, continued to see foreign

funds outflows due to affects of QE tapering, weakening macro conditions in countries like

Argentina and Turkey and the potential slowdown in China’s economic growth.

The Malaysian market continued its ascent towards the year end as investors were positive on fiscal

consolidation measures announced in the budget which included subsidy rationalisation and the

implementation of Goods and Services Tax (GST) in 2015. While these measures would result in

slower consumption growth in the short term, fiscal consolidation is needed for Malaysia to avoid a

sovereign rating downgrade.

EQUITY MARKET OUTLOOK & STRATEGY

The US Fed has announced the commencement of QE tapering in 2014. This is expected to trigger

some outflows from emerging markets to developed markets and cause some weaknesses to Asian

markets. However, we believe that the impact would be less compared to mid 2013 when QE



9

tapering fears first cropped up as investors have already been adjusting their portfolios since then.

We would be looking for opportunities to accumulate on dips.

Beyond the short term impact from QE tapering, we believe that the improving outlook in the US

and Eurozone economies would eventually be positive for the growth prospects of Asian markets,

including Malaysia.

One of the concerns about Malaysia is the country’s fiscal position but recent announcements by the

Government on implementation of GST and the rollback of subsidies for fuel and sugar would help

to soothe some of these concerns. While this would have a negative impact on consumption in the

short term, we think that it would be a case of short term pain to achieve fiscal consolidation in the

medium to long term.

Overall, we remain constructive on the local bourse due to favourable liquidity conditions, positive

momentum from Economic Transformation Programme (ETP) and better outlook for Crude Palm Oil

prices. We would continue to be well invested in equities and continue to concentrate on

opportunities in selected investment themes like ETP, pricing power and capital management.

For the region, we favour countries such as Hong Kong, China, Korea and Singapore as these

countries are seen to benefit from the economic recovery in the developed markets. We are also

looking to build up positions in selected high quality stocks in the Asean markets.



10

T R U S T E E ’ S R E P O R T

For The Period Ended 31 March 2014

To the Unit holders of Areca growthTRUST Fund

We have acted as Trustee of Areca growthTRUST Fund (the “Fund”) for the financial period ended

31 March 2014. To the best of our knowledge, for the period under review, Areca Capital 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 Trustee under the Deed,

the Securities Commission Malaysia’s Guidelines on Unit Trust Funds, the Capital Markets

and Services Act 2007 and other applicable laws;

(b) the valuation/pricing for the Fund has been carried out in accordance with the Deed of the

Fund and applicable 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 applicable regulatory requirements.

For Deutsche Trustees Malaysia Berhad

(Company No: 763590-H)

SOON LAI CHING

MANAGER, TRUSTEE OPERATIONS

WONG MUN LOONG

MANAGER, TRUSTEE OPERATIONS

Kuala Lumpur

15 May 2014

S T A T E M E N T B Y T H E M A N A G E R

To the Unit holders of Areca growthTRUST Fund

We, Wong Teck Meng and Dato’ Wee Hoe Soon @ Gooi Hoe Soon, being two of the Directors of

Areca Capital Sdn Bhd, do hereby state that in our opinion as the Manager, the unaudited financial

statements are drawn up in accordance with the provisions of the Deed and give a true and fair

view of the financial position of the Fund as at 31 March 2014 and of its financial performance,

changes in equity and cash flows of the financial period ended 31 March 2014 in accordance with

the Malaysian Financial Reporting Standards and International Financing Reporting Standards.

For and on behalf of the Manager

ARECA CAPITAL SDN BHD

WONG TECK MENG DATO’ WEE HOE SOON @ GOOI HOE SOON

EXECUTIVE DIRECTOR INDEPENDENT DIRECTOR

Kuala Lumpur Kuala Lumpur

15 May 2014 15 May 2014



11

UNAUDITED STATEMENT OF FINANCIAL POSITION

As At 31 March 2014

Note

31.03.2014

31.03.2013

01.04.2012

RM RM RM

ASSETS

CURRENT ASSETS

Financial assets at fair value through profit or loss

6

2,368,107

3,438,657

2,834,220

Cash and cash equivalents 7 199,415 526,440 1,372,075

Amount due from Manager - 484,196 -

Amount due from a stockbroker - - 526,996

Dividend receivable 1,921 5,473 -

Tax recoverable 4,944 - -

TOTAL ASSETS 2,574,387 4,454,766 4,733,291

LIABILITIES

CURRENT LIABILITIES

Amount due to Manager 1,987 - -

Accrued management fee 3,544 5,039 5,023

Accrued Trustee’s fee 177 252 251

Other payables and accruals 62,276 12,904 1,028,491

Total Liabilities 67,984 18,195 1,033,765

Net Assets Value of the Fund 8 2,506,403 4,436,571 3,699,526

EQUITY

Unit holder’s capital 2,581,841 4,351,407 4,062,949

Accumulated (losses)/ income (75,438) 85,164 (363,423)

Total Net Assets Attributable to Unit

Holders 8 2,506,403 4,436,571 3,699,526

Number of Units in Circulation 8 4,845,630 8,286,777 7,927,523

Net Asset Value Per Unit 0.5173 0.5354 0.4667

The accompanying notes form an integral part of these financial statements.



12

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME

For 6-month Period ended 31 March 2014

Note

01.10.2013

to

31.03.2014

RM

01.10.2012

to

31.03.2013

RM

INVESTMENT INCOME

Gross dividend income 16,017 17,059

Interest income from deposits with licensed

financial institutions 1,626 4,059

Net gain on financial assets at fair value

through profit or loss

6 232,048 747,581

249,691 768,699

EXPENSES

Management fee 3 24,263 25,790

Trustee’s fee 4 1,213 1,290

Transaction cost 22,364 39,990

Administrative expenses 13,675 27,683

61,515 94,753

Net Income Before Taxation 188,176 673,946

Taxation 5 (1,419) (3,637)

Net Income After Taxation Representing

Total Comprehensive Income For The

Financial period

186,757 670,309

Net Income After Taxation Is Made Up Of The

Following:

Realised amount (29,533) 255,562

Unrealised amount 216,290 414,747

186,757 670,309




13

UNAUDITED STATEMENT OF CHANGES IN EQUITY


Note

Unit holders’

capital

Accumulated

(losses)/

income

Total

RM RM RM

Balance as at 1 October 2013 3,820,057 (262,195) 3,557,862

Movement in unit holders’ capital:

Creation of units from applications 8 17,004 - 17,004

Cancellation of units 8 (1,255,220) - (1,255,220)

Total comprehensive income for the financial period

- 186,757 186,757

Balance as at 31 March 2014 2,581,841 (75,438) 2,506,403

Balance as at 1 October 2012 3,561,707 (585,145) 2,976,562

Movement in unit holders’ capital:

Creation of units from applications 8 892,948 - 892,948

Cancellation of units 8 (103,248) - (103,248)

Total comprehensive income for the

financial period

- 670,309 670,309

Balance as at 31 March 2013 4,351,407 85,164 4,436,571


UNAUDITED STATEMENT OF CASH FLOWS



14


Note

01.10.2013

to

31.03.2014

01.10.2012

to

31.03.2013

RM RM

Cash Flows From Operating Activities

Proceeds from sale of investments 3,568,135 4,994,609

Purchase of investments (2,221,252) (4,995,725)

Subscription for initial public offering (48,391) -

Dividend income received 19,051 9,995

Interest received from deposits with licensed

financial institutions 1,626 4,059

Management fee paid (25,441) (24,726)

Trustee’s fee paid (16,399) (16,162)

Payment for other fees and expenses (15,037) (26,813)

Net Cash Generated From/ (Used In) Operating

Activities 1,262,292 (54,763)

Cash Flows From Financing Activities

Cash proceeds from units created 17,004 408,752

Payment for cancellation of units (1,254,221) (103,248)

Net Cash (Used In)/ Generated From Financing

Activities (1,237,217) 305,504

Net Increase In Cash And Cash Equivalents 25,075 250,741

Cash And Cash Equivalents At The

Beginning of The Financial Period

174,340

275,699

Cash And Cash Equivalents At The End Of

The Financial Period 7 199,415 526,440




15

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FOR THE FINANCIAL PERIOD ENDED 31 MARCH 2014

The following accounting policies have been used consistently in dealing with items which are

considered material in relation to the financial statements.

A BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention in accordance

with Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting

Standards (“IFRS”).

The financial statements for the financial year ended 30 September 2013 are the first set of

financial statements prepared in accordance with the MFRS, including MFRS 1 ‘First-time adoption

of MFRS’. The Fund have consistently applied the same accounting policies in its opening MFRS

statement of financial position at 1 October 2011 (transition date) and throughout all years

presented, as if these policies had always been in effect. Note 14 discloses the impact of the

transition to MFRS on the Fund's reported financial position, financial performance and cash flows.

The preparation of financial statements in conformity with the MFRS requires the use of certain

critical accounting estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosure of contingent assets and liabilities at the date of the financial statements,

and the reported amounts of revenues and expenses during the reported financial year. It also

requires the Manager to exercise their judgment in the process of applying the Fund’s accounting

policies. Although these estimates and judgment are based on the Manager’s best knowledge of

current events and actions, actual results may differ.

The areas involving a higher degree of judgment or complexity, or areas where assumptions and

estimates are significant to the financial statements are disclosed in Note M.

(i) The new standards and amendments to published standards which are relevant to the Fund

but not yet effective and have not been early adopted are as follows:

(a) Financial year beginning on/after 1 October 2013

• Amendment to MFRS 7 “Financial instruments: Disclosures” (effective from 1

January 2013) requires more extensive disclosures focusing on quantitative

information about recognised financial instruments that are offset in the statement

of financial position and those that are subject to master netting or similar

arrangements irrespective of whether they are offset. This amendment does not

have any impact on the classification and valuation of the Fund’s financial

statements.

• MFRS 13 “Fair value measurement” (effective from 1 January 2013) aims to

improve consistency and reduce complexity by providing a precise definition of fair

value and a single source of fair value measurement and disclosure requirements

for use across MFRSs. The requirements do not extend the use of fair value

accounting but provide guidance on how it should be applied where its use is

already required or permitted by other standards. The enhanced disclosure

requirements are similar to those in MFRS 7 “Financial instruments: Disclosures”,

but apply to all assets and liabilities measured at fair value, not just financial ones.

The Fund will apply this standard when effective. This standard is not expected to

have a significant impact on the Fund’s financial statements.

(b) Financial year beginning on/after 1 October 2014

• Amendment to MFRS 132 “Financial instruments: Presentation” (effective from 1

January 2014) does not change the current offsetting model in MFRS 132. It

clarifies the meaning of ‘currently has a legally enforceable right of set-off’ that the

right of set-off must be available today (not contingent on a future event) and

legally enforceable for all counterparties in the normal course of business. It

clarifies that some gross settlement mechanisms with features that are effectively



16

equivalent to net settlement will satisfy the MFRS 132 offsetting criteria. This

amendment does not have any impact on the classification and valuation of the

Fund’s financial statements.

(c) Financial year beginning on/after 1 October 2015

• MFRS 9 “Financial instruments - classification and measurement of financial assets

and financial liabilities” (effective from 1 January 2015) replaces the multiple

classification and measurement models in MFRS 139 with a single model that has

only two classification categories: amortised cost and fair value. The basis of

classification depends on the entity’s business model for managing the financial

assets and the contractual cash flow characteristics of the financial asset.

The accounting and presentation for financial liabilities and for de-recognising

financial instruments has been relocated from MFRS 139, without change, except

for financial liabilities that are designated at fair value through profit or loss

(“FVTPL”). Entities with financial liabilities designated at FVTPL recognise changes in

the fair value due to changes in the liability’s credit risk directly in other

comprehensive income (“OCI”). There is no subsequent recycling of the amounts in

OCI to profit or loss, but accumulated gains or losses may be transferred within

equity.

The guidance in MFRS 139 on impairment of financial assets and hedge accounting

continues to apply. MFRS 7 requires disclosures on transition from MFRS 139 to

MFRS 9. The Fund will apply this standard when effective. This standard is not

expected to have a significant impact on the Fund’s financial statements.

B INCOME RECOGNITION

Interest income from short term deposits is recognised on an accrual basis using the effective

interest method.

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

been established.

Realised gain or loss on sale of investments are accounted for as the difference between the net

disposal proceeds and the carrying amount of the investments, determined on a weighted average

cost basis.

C TAXATION

Current tax expense is determined according to the Malaysian tax laws at the current based upon

the taxable profits earned during the financial year.

Tax on dividend income from foreign quoted investments is based on the tax regime of the

respective countries that the Fund invests in.

D PRESENTATION AND FUNCTIONAL CURRENCY

Items included in the financial statements of the Fund are measured using the currency of the

primary economic environment in which the Fund operates (the “functional currency”). The financial

statements are presented in Ringgit Malaysia, which is the Fund’s presentation and functional

currency.

E FOREIGN CURRENCY TRANSLATION

Foreign currency transactions in the Fund are translated into the functional currency using the

exchange rates prevailing at the transaction dates. 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 the statement of

comprehensive income, expect when deferred in other comprehensive incomes as qualifying cash

flow hedges.



17

F FINANCIAL ASSETS AND LIABILITIES

(i) Classification

The Fund designates its investment in quoted investments 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.

Financing and receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market and have been included in current

assets. The Fund’s financing and receivables comprise cash and cash equivalents, amount

due from Manager and dividends receivable which are all due within 12 months.

Financial liabilities are classified according to the substance of the contractual arrangements

entered into and the definitions of a financial liability.

The Fund’s financial liabilities which include amount due to Manager, accrued management

fee, accrued Trustee’s fee and other payables and accruals are recognised initially at fair

value plus directly attributable transaction cost and subsequently measured at amortised

cost using the effective interest method.

(ii) Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date, the date

on which the Fund commits to purchase or sell the asset. Quoted 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 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 quoted

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, 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 liability is derecognised when the obligation under the liability is extinguished.

Gain and losses are recognised in the statement of comprehensive income when the

liabilities are derecognised, and through the amortisation process.

Unrealised 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/(loss) on financial assets at fair value through profit and loss ’ in

the period in which they arise. Any unrealised gains however are not distributable.

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.

Quoted investments outside Malaysia are valued at the market bid prices quoted of the

respective foreign stock exchanges as at the date of the statement of financial position.

If a valuation based on the market price does not represent the fair value of the securities,

for example during abnormal market conditions or no market price is available, including in

the event of a suspension in the quotation of the securities for a period exceeding 14 days,

or such shorter period as agreed by the Trustee, then the securities are valued as

determined in good faith by the Manager, based on the methods or bases approved by the

Trustee after appropriate technical consultation.



18

Deposits with licensed financial institutions are stated at cost plus accrued interest

calculated on the effective interest method over the period from the date of placement to

the date of maturity of the respective financial institutions deposits.

Financing and receivables and other financial liabilities are subsequently carried at

amortised cost using the effective interest method.

For assets carried at amortised cost, the Fund assesses at the end of the reporting period

whether there is objective evidence that a financial asset or group of financial assets is

impaired. A financial asset or a group of financial assets is impaired and impairment losses

are incurred only if there is objective evidence of impairment as a result of one or more

events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss

event (or events) has an impact on the estimated future cash flows of the financial asset or

group of financial assets that can be reliably estimated.

The amount of the loss is measured as the difference between the asset’s carrying amount

and the present value of estimated future cash flows (excluding future credit losses that

have not been incurred) discounted at the financial asset’s original effective interest rate.

The asset’s carrying amount of the asset is reduced and the amount of the loss is

recognised in statement of comprehensive income. If ‘financing and receivables’ or a ‘held-

to-maturity investment’ has a variable interest rate, the discount rate for measuring any

impairment loss is the current effective interest rate determined under the contract.

As a practical expedient, the Fund may measure impairment on the basis of an instrument’s

fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease

can be related objectively to an event occurring after the impairment was recognised (such

as an improvement in the debtor’s credit rating), the reversal of the previously recognised

impairment loss is recognised in statement of comprehensive income.

When an asset is uncollectible, it is written off against the related allowance account. Such

assets are written off after all the necessary procedures have been completed and the

amount of the loss has been determined.

G AMOUNT DUE FROM/(TO) STOCKBROKERS

Amounts due from and to stockbrokers represent receivables for securities sold and payables for

securities purchased that have been contracted for but not yet settled or delivered on the

statement of financial position date respectively.

These amounts are recognised initially at fair value and subsequently measured at amortised cost

using the effective interest method, less provision for impairment for amounts due from brokers. A

provision for impairment of 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, interest income is recognised using

the rate of interest used to discount the future cash flows for the purpose of measuring the

impairment loss.

The effective interest method is a method of calculating the amortised cost of a financial asset or

financial liability and of allocating the interest income or interest expense over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash payments or

receipts throughout the expected life of the financial instrument, or, when appropriate, a shorter

period, to the net carrying amount of the financial asset or financial liability. When calculating the

effective interest rate, the Fund estimates cash flows considering all contractual terms of the

financial instrument but does not consider future credit losses. The calculation includes all fees and

points paid or received between parties to the contract that are an integral part of the effective

interest rate, transaction costs and all other premiums or discounts.



19

H CASH AND CASH EQUIVALENTS

For the purpose of statement of cash flows, cash and cash equivalents comprise deposits with a

licensed financial institution and bank balance with a licensed bank that are readily convertible to

known amounts of cash and which are subject to an insignificant risk of changes in value.

I CREATION AND CANCELLATION OF UNITS

The Fund issues cancellable units, which are cancelled at the unit holder’s option and are classified

as equity. Cancellable units can be returned to the Fund at any time for cash equal to a

proportionate share of the Fund’s net asset value (“NAV”). The outstanding units are carried at the

redemption amount that is payable at the statement of financial position date if the unit holder

exercises the right to return the unit to the Fund.

Units are created and cancelled at the unit holder’s option at prices based on the Fund’s NAV per

unit at the time of creation or cancellation. The Fund’s NAV per unit is calculated by dividing the net

assets attributable to unit holders with the total number of outstanding units.

J UNIT HOLDER’S CAPITAL

The unit holders’ contributions to the Fund meet the definition of puttable instruments classified as

equity instruments under the revised MFRS 132 “Financial Instruments: Presentation”.

The units in the Fund are puttable instruments which entitle the unit holders to a pro-rata share of

the net asset value of the Fund. The units are subordinated and have identical features. There is no

contractual obligation to deliver cash or another financial asset other than the obligation on the

Fund to repurchase the units. The total expected cash flows from the units in the Fund over the life

of the units are based on the change in the net asset value of the Fund.

K SEGMENTAL INFORMATION

A business segment is a group of assets and operations engaged in providing products or services

that are subject to risks and returns that are different from those of other business segments. A

geographic segment is engaged in providing products or services within a particular economic

environment that are subject to risks and returns that are different from those of segments

operating in other economic environments.

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 on the statement of financial position date.

Note

Financing and

receivables

Financial

assets at fair value through

profit or loss

Total

31 March 2014 RM RM RM

Financial assets at fair value through

profit or loss

6 - 2,368,107 2,368,107

Dividends receivable 1,9211 - 1,921

Cash and cash equivalents 7 199,4155 - 199,415

201,336 2,368,107 2,569,443



20

Note

Financing

and

receivables

Financial

assets at fair

value through

profit or loss

Total



profit or loss

6

-

3,438,657

3,438,657

Amount due from Manager 484,196 - 484,196 Dividends receivable 5,473 - 5,473

Cash and cash equivalents 7 526,440 - 526,440

1,016,109 3,438,657 4,454,766

1 April 2012


profit or loss

6

-

2,834,220

2,834,220

Amount due from a stockbroker 526,996 - 526,996

Cash and cash equivalents 7 1,372,075 - 1,372,075

1,899,071 2,834,220 4,733,291

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

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 the Trustee and are based

on historical experience and other factors, including expectations of future events that are believed

to be reasonable under the circumstances.



21

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2014

1 INFORMATION ON THE FUND

Areca Recovery Growth Fund, now known as Areca growthTRUST Fund (“the Fund”) was

established pursuant to a Trust Deed dated 12 November 2009 as modified by the First

Supplemental Deed dated 17 December 2012 (“the Deed”) between Areca Capital Sdn Bhd as

the Manager, Deutsche Trustees Malaysia Berhad as the Trustee and all the registered unit

holders of the Fund. The First Supplemental Deed was executed to reflect the change to the

Fund’s name, to remove the Fund’s maturity date, to change its objective and other

consequential amendments of the Fund.

The principal activity of the Fund is to invest in investments as defined under Schedule 6 of

the Deed, which include stocks and shares of companies quoted on any recognised stock

exchange(s) in Malaysia and permitted foreign stock exchanges, and deposits with financial

institutions. The Fund commenced operations on 12 March 2010 and will continue its

operations until terminated in accordance with Part 12 of the Deed.

The objective of the Fund is to provide investors with an opportunity for capital growth.

The Manager of the Fund is Areca Capital Sdn Bhd, a company incorporated in Malaysia. Its

principal activities are managing private and unit trust funds.

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks which include market risk (inclusive of price risk,

exposure to interest rate risk and currency risk), business risk, capital risk, credit risk and

liquidity risk.

Financial risk management is carried out through internal control processes adopted by the

Manager and adherence to the investment restrictions as stipulated in the Securities

Commission Malaysia’s Guidelines on Unit Trust Funds.

(a) Market risk

(i) Price risk

The risk refers to changes and developments in regulations, politics and economy of

the country. The very nature of a unit trust fund, however, helps mitigate this risk

because a fund would generally hold a well-diversified portfolio of securities from

different market sectors that the collapse of any security or any one market sector

would not impact too greatly on the value of the Fund.

The table below show assets of the Fund as at 31 March which are exposed to price

risk:

31.03.2014

31.03.2013

01.04.2012 RM RM RM

Quoted securities designated at fair

value through profit or loss

2,368,107 3,438,657 2,834,220

The following table summarises the sensitivity of the Fund’s net asset value and

profit/(loss) after tax to movements in prices of quoted securities at the end of the

reporting year. The analysis is based on the assumptions that the price of the quoted

securities increased by 5% and decreased by 5% with all other variables held

constant. This represents management’s best estimate of a reasonable possible shift

in the quoted securities, having regard to the historical volatility of the prices.



22

Change in price of

financial assets at fair

value through profit or loss

Market value

Increase/(decrease)

in profit /(loss) after

taxation and

net asset value

% RM RM

31.03.2014

+5% 2,486,512 118,405 -5% (2,249,702) (118,405)

31.03.2013

+5% 3,610,590 171,933

-5% 3,266,724 (171,933)

01.04.2012

+5% 2,975,931 141,711

-5% 2,692,509 (141,711)

(ii) Exposure to interest rate risk

The Fund is exposed to interest rate risk. Changes in interest rates will affect the

value of the investments and its returns. To manage the risk, investments will be

concentrated in investment grade issues by financial institutions and companies

determined by the Manager.

The above interest rate is a general economic indicator that will have an impact on

the management of the fund regardless whether it is a unit trust fund or otherwise. It

does not in any way suggest that the fund will invest in conventional financial

instruments. All the investments carried out for the fund are in accordance with the

unit trust requirements.

As at the date of the statement of financial position, all the financial assets and

financial liabilities have no exposure to interest rate movement except for deposit

with a licensed financial institution of RM190,056 (31.03.2013: RM521,024;

01.04.2012: RM1,363,985) which have maturities of less than one year.

The Fund’s investments in deposits with licensed financial institutions are short term

in nature. Therefore, exposure to interest rate fluctuations is minimal.

(iii) Currency risk

As the Fund may invest its assets in securities denominated in a wide range of

currencies other than Ringgit Malaysia, the net asset value of the fund expressed in

Ringgit Malaysia may be affected favourably or unfavourably by exchange control

regulations or changes in the exchange rates between Ringgit Malaysia and such

other currencies. The risk is minimised through investing in a wide range of foreign

currencies denominated assets and thus, diversifying the risk of single currency

exposure.

In the normal course of investment, the Fund Manager will usually not hedge foreign

currency exposure. The Fund Manager may however depending on prevailing market

circumstances at a particular point in time, choose to use forward or option contracts

for hedging and risk reduction purposes.

The following table sets out the foreign exchange/currency risk concentrations and

counterparties of the Fund:



23

Financial

assets at fair

value through

profit or loss

Dividends

receivable

Total


HKD 1,072,355 1,921 1,074,276

IDR 82,111 - 82,111

PHP 173,741 - 173,741

SGD 179,028 - 179,028

1,507,235 1,921 1,509,156

31 March 2013

HKD 324,296 - 324,296

IDR 2,163,773 3,613 2,167,386

SGD 537,272 - 537,272

THB 413,316 1,860 415,176

3,438,657 5,473 3,444,130

The table summarises the sensitivity of the Fund’s financial assets fair value to changes

in foreign exchange movements at the end of the reporting year. The analysis is based on

the assumption that the foreign exchange rate changes by 5% with all 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. An

increase/(decrease) in foreign exchange rate will result in a corresponding

(decrease)/increase in net assets attributable to unit holders by approximately 5%.

Change

in price

Impact on

profit/(loss)

after taxation

Impact on

net asset

value

31 March 2014 % RM RM

HKD 5 53,714 53,714

IDR 5 4,106 4,106

PHP 5 8,687 8,687

SGD 5 8,951 8,951

At 31 March 2013

HKD 5 16,215 16,215

IDR 5 108,370 108,370

SGD 5 26,864 26,864

THB 5 20,759 20,759

Business risk

Business risk of emerging companies with a short track record that tends to be higher

than matured and well-established companies. The Fund gives preference to invest in

companies with a reasonable track record compared to a new company.

The Manager can manage the market cycles and short-term fluctuations by virtue of its

experience, the analytical process adopted by its Fund Manager and by constructing a

diversified investment portfolio.



24

Redemption and subscription of units are important in the day-to-day management of the

Fund. Liquidity is monitored everyday to ensure the Fund is not affected especially by

unexpected redemption.

The compliance unit is in place to ensure no breaches in investment limits. If there is any

breach, the compliance unit can quickly notify the Fund Manager to take corrective

action.

In managing the Fund, the Manager has established policies and procedures outlining the

internal control mechanism, reporting responsibilities and internal audit and compliance

function.

The performance and investment activities of the Fund are regularly reviewed by the

Investment Committee and the Board of Directors of the Manager.

Capital risk

The capital of the Fund is represented by equity consisting of unit holders’ 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 unit holders.

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 unit holders and benefits for other

stakeholders and to maintain a strong capital base to support the development of the

investment activities of the Fund.

Credit risk

Credit risk refers to the ability of an issuer or a counter party to make timely payments of

interest, principals and proceeds from realisation of investments.

The credit risk arising from placements of deposits in licensed financial institutions is

managed by ensuring that the Fund will only place deposits in reputable licensed financial

institutions. 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

Securities Commission Malaysia’s Guidelines on Unit Trust Funds.

The credit risk is minimal as all transactions in quoted securities are settled/paid upon

delivery using approved brokers.

Liquidity risk

The Fund maintains sufficient level of liquid assets, after consultation with the Trustee, to

meet anticipated payments and cancellations of units by unit holders. Liquid assets

comprise bank balance with a licensed bank, deposit with a licensed financial institution

and other instruments which are capable of being converted into cash within 7 days.

The table below summarises the Fund’s financial liabilities into relevant maturity

groupings based on the remaining period as at the statement of financial position date to

the contractual maturity date. The amounts in the table are the contractual undiscounted

cash flows.

Less than

1 month

More than

1 month

Total 31 March 2014 RM RM RM

Amount due to Manager 1,987 - 1,987

Accrued management fee 3,544 - 3,544

Accrued trustee fee 177 - 177

Others payables and accruals 51,911 10,365 62,276

Contractual cash out flows 57,619 10,365 67,984



25

Less than

1 month

More than

1 month

Total




Other payables and accruals - 12,904 12,904

Contractual cash out flows 5,291 12,904 18,195

1 April 2012



Other payables and accruals 1,021,491 7,000 1,028,491

Contractual cash out flows 1,026,765 7,000 1,033,765

Fair value estimation

The fair value of financial assets and liabilities traded in active market (such as publicly

traded derivatives and trading quoted securities) are based on quoted market prices at

the close of trading on the year end date. The quoted market price used for financial

assets by the Fund is the current bid price; the appropriate quoted market price for

financial liabilities is the current asking price.

A financial instrument is regarded as quoted in an active market if quoted prices are

readily and regularly available from an exchange, dealer, broker, industry group, pricing

service, or regulatory agency, and those prices represent actual and regularly occurring

market transactions on an arm’s length basis.

The fair value of financial assets and liabilities that are not traded in an active market is

determined by using valuation techniques. The Fund uses a variety of methods and

makes assumptions that are based on market conditions existing at each year end date.

Valuation techniques used for non-standardised financial instruments such as options,

currency swaps and other over-the-counter derivatives, include the use of comparable

recent arm’s length transactions, reference to other instruments that are substantially the

same, discounted cash flow analysis, option pricing models and other valuation

techniques commonly used by market participants making the maximum use of market

inputs and relying as little as possible on entity-specific inputs.

For instruments for which there is no active market, the Fund may use internally

developed models, which are usually based on valuation methods and techniques

generally recognised as standard within the industry. Valuation models are used primarily

to value unlisted quoted securities which market were or have been inactive during the

financial year. Some of the inputs to these models may not be market observable and are

therefore estimated based on assumptions.

The output of a model is always an estimate or approximation of a value that cannot be

determined with certainty, and valuation techniques employed may not fully reflect all

factors relevant to the positions the Fund holds.

The fair value are based on the following methodology and assumptions:

(i) Bank balance with a licensed bank and deposits with licensed financial institutions

with maturities less than 1 year, the carrying value is a reasonable estimate of fair

value.

(ii) The carrying value less impairment provision of receivables and payables are

assumed to approximate their fair values. The carrying value of the financial assets

and financial liabilities approximate their fair value due to their short term nature.



26

Valuations are therefore adjusted, where appropriate, to allow for additional factors

including model risk, liquidity risk and counterparty risk.

MFRS 7 “Financial Instruments: Disclosures” requires the Fund to classify fair value

measurements using a fair value hierarchy that reflects the significance of the inputs

used in making the measurements. The fair value hierarchy has the following levels:

• 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)

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 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. 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.

The following table analyses within the fair value hierarchy the Fund’s financial assets (by

class) measured at fair value:

Level 1

RM

Level 2

RM

Level 3

RM

Total

RM

31 March 2014

Financial assets at fair value

through profit or loss:

- Quoted securities 2,368,107 - - 2,368,107

31 March 2013



- Quoted securities 3,438,657 - - 3,438,657

1 April 2012



- Quoted securities 2,834,220 - 2,834,220

Investments whose values are based on quoted market prices in active markets, and are

therefore classified within Level 1, include active quoted securities. 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.

3 MANAGEMENT FEE

The Schedule 7 of the Deed provides that the Manager is entitled to an annual management

fee at a rate not exceeding 2.50% per annum computed daily on the net asset value of the

Fund before the deduction of the management fee and Trustee’s fee for the relevant day.



27

The management fee provided for in the financial statements amounted to 1.60% (2013:

1.60%) per annum for the financial period.

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

amounts recognised above.

4 TRUSTEE’S FEE

The Schedule 8 of the Deed provides that the Trustee is entitled to an annual Trustee’s fee at

a rate not exceeding 0.50% per annum computed daily on the net asset value of the Fund

before the deduction of the management fee and Trustee’s fee for the relevant day, subject to

a minimum of RM18,000 per annum (excluding foreign custodian fees and charges).

The Trustee’s fee provided for in the financial statements amounted to RM1,213 (2013:

RM1,290) for the financial period.

There will be no further liability to the Trustee in respect of trustee fee other than the amounts

recognised above.

5 TAXATION

(a) Tax charge for the period

2014 2013

RM RM

Current taxation 1,419 3,637

(b) Numerical reconciliation of income tax expense

The numerical reconciliation between the net loss before taxation multiplied by the

Malaysian statutory tax rate and the tax expense of the Fund is as follows:

2014 2013

RM RM

Net income before taxation 188,176 673,946

Tax calculated at a tax rate of 25% 47,044 168,487

Tax effects of:

- Income not subject to tax (61,004) (190,583)

- Restriction on tax deductible expenses for unit trust fund 6,301 12,861

- Expenses not deductible for tax expenses 9,078 12,872

Tax expense 1,419 3,637

6 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

31.04.2014 31.03.2013 01.04.2012

RM RM RM

Designated at fair value through profit or loss:-

- Quoted securities 2,368,107 3,438,657 2,834,220

Net gain on financial assets at fair value


- Realised gain on disposal 31,578 363,890 163,490

- Change in unrealised fair value gain 216,273 414,747 105,967

Net losses on foreign currency exchange (15,803) (31,056) (17,825)

232,048 747,581 251,632



28

Name of counter

Nominal

Value

Aggregate

cost

Fair value as at

31.03.2014

Units

RM

RM

% of value of

the fund

Quoted shares in Malaysia

Construction

Muhibbah Engineering (M) Bhd 22,000 56,599 63,580 2.53

Consumer Products

Padini Holdings Bhd 21,000 40,815 40,110 1.60

Finance Allianz Malaysia Bhd 5,000 57,980 51,300 2.05

Industrial Products

Cahya Mata Sarawak Bhd 13,000 81,978 127,400 5.08

Coastal Contracts Bhd 19,000 65,016 95,950 3.83

KNM Group Bhd 51,000 40,545 39,525 1.58

Favelle Favco Bhd 14,000 51,740 53,340 2.13

97,000

239,279

316,215

12.62

Properties

Titijaya Land Berhad 30,000 54,453 56,400 2.25

Trading/Services

Pestech International Berhad 23,300 65,443 97,627 3.90

Uzma Bhd 20,400 74,866 131,580 5.25

Brahim’s Holdings Berhad 43,000 44,062 104,060 4.15

86,700

184,371

333,267

13.30

Total quoted investments in

Malaysia

261,700

633,497

860,872

34.35

Quoted shares in Hong Kong

Conglomerates Shun Tak Holdings Ltd 119,000 220,636 199,752 7.97

Consumer Goods

China Modern Dairy Holdings

Ltd

159,000 221,237 222,748 8.89

Tenwow International Holdings

Ltd

156,000 233,447 229,046 9.14

315,000

454,684

451,794

18.03

Consumer Services

Intime Retail (Group) Co. Ltd 38,000 140,856 133,488 5.33

Melco International

Development Ltd

14,400 128,435 157,510 6.28

Beijing Capital International Airport Co. Ltd

58,000 140,334 129,811 5.18

110,400

409,625

420,809

16.79


Hong Kong

544,400 1,084,943 1,072,355 42.79



29

Name of counter

Nominal

Value

Aggregate

cost

Fair value as

at 31.03.2014

Units RM RM % of value of

the fund

Quoted shares in Indonesia

Finance

Panin Financial Tbk 1,100,000 72,849 82,111 3.28


Indonesia

1,100,000

72,849

82,111

3.28

Quoted shares in Philippine

Industrial

Del Monte Pacific Limited

52,800

113,422

92,252

3.68

RFM Corporation 192,000 78,875 81,489 3.25


Philippine

244,800

192,297

173,741

6.93

Quoted shares in Singapore

Agriculture Bumitama Agri Ltd

26,000

70,787

69,996

2.79

First Resources Limited 18,000 103,580 109,032 4.35

44,000

174,367

179,028

7.14


Singapore

44,000

174,367

179,028

7.14

TOTAL QUOTED INVESTMENTS

2,194,900

2,157,953

2,368,107

94.49

UNREALISED GAIN ON

FINANCIAL ASSETS AT FAIR

VALUE THROUGH PROFIT OR

LOSS

210,154

FAIR VALUE OF FINANCIAL

ASSETS AT FAIR VALUE

THROUGH PROFIT OR LOSS

2,368,107



30

Name of counter

Nominal

Value

Aggregate

cost

Fair value as at

31.03.2013

Units

RM

RM

% of value of

the fund

Shares quoted in Hong Kong

Consumer Goods

Emperor Watch & Jewellery Ltd 530,000 165,760 166,768 3.77

Services

Beijing Capital International

Airport Co. Ltd

70,000

163,595

157,528

3.55

Total quoted investments in Hong Kong

329,355

324,296

7.32

Shares quoted in Indonesia

Consumer Goods

Gudang Garam Tbk

10,500

164,628

163,238

3.68

Finance Bank Rakyat Indonesia (Persero)

Tbk

50,500

138,784

140,340

3.16

Infrastructure, Utilities And

Transportation

Perusahaan Gas Negara

(Persero) Tbk

106,000

182,099

200,310

4.51

Cardig Aero Services Tbk 741,500 209,450 176,625 3.98

Petrosea Tbk 530,000 205,958 318,140 7.17

Total

597,507

695,075

15.66

Property, Real Estate And

Building Construction

Jaya Real Property Tbk 140,500 180,336 215,305 4.85

Trade, Services & Investment

Matahari Department Store Tbk 100,000 345,356 349,360 7.87

Ramayana Lestari Sentosa Tbk 540,000 200,337 238,391 5.37

Multipolar Tbk 2,000,000 176,369 362,064 8.16

Total

722,062

949,815

21.40


Indonesia

1,803,317

2,163,773

48.75

Shares quoted in Singapore

Agriculture

Kencana Agri Limited

278,000

229,993

225,360

5.08

Bumitama Agri Ltd 122,000 332,155 311,912 7.03


Singapore

562,148

537,272

12.11



31

Name of counter

Nominal

Value

Aggregate

cost

Fair value as

at 31.03.2013

Units RM RM % of value of

the fund

Shares quoted in Thailand

Property & Construction

Ananda Development Public

Company Limited

469,000

201,175

227,390

5.13

The Siam Cement Public Company

Limited

3,600

171,354

185,926

4.19

Total quoted investments in Thailand

372,529

413,316

9.32

Total quoted investments

3,067,349

3,438,657

77.50

Net unrealised gain on change in

value of investments

371,308

Fair value of total financial assets

at fair value through profit or

loss

3,438,657

Name of counter

Nominal

Value

Aggregate

cost

Fair value as

at 01.04.2012

Units

RM

RM

% of value of

the fund

Shares quoted in Malaysia Main Market

Trading/Services

MBM Resources Bhd 37,000 170,933 170,200 4.60


Malaysia

170,933

170,200

4.60

Shares quoted in Hong Kong

Consumer Goods -

Automobiles

Zhongsheng Group Holdings

Ltd

33,000

193,526

200,587

5.42

Information Technology –

Software & Services

REXlot Holdings Ltd 700,000 186,193 190,640 5.15

Total quoted investment in Hong Kong

379,719

391,227

10.57


Finance

PT Astra International Inc 6,500 159,118 160,930 4.35

Finance-Banks

Bank Mandiri TBK PT 83,000 186,812 190,351 5.15

Industrial Products

Tiga Pilar Sejahtera Food Tbk 1,147,375 208,992 195,912 5.30

Plantations

J A Wattie TBK PT 1,147,500 167,389 163,278 4.41



32

Name of counter

Nominal

Value

Aggregate

cost

Fair value as

at 01.04.2012

Units

RM

RM

% of value of

the fund


Properties

Bumi Serpong Damai TBK 746,500 228,767 322,407 8.71


Indonesia

951,078

1,032,878

27.92

Shares quoted in Singapore

Consumer Goods - Automobiles

QAF Limited 91,000 166,441 166,230 4.50

Industrial Products

Wilmar International Limited 19,000 233,539 226,754 6.13

Oil & Gas

Ezion Holdings Ltd 78,000 186,089 187,127 5.06

Properties

CapitaLand Limited 43,000 301,601 326,760 8.83

Overseas Union Enterprise Ltd 30,000 178,358 171,710 4.64

Total

479,959

498,470

13.47

Trading/Services

Noble Group Ltd 48,000 160,495 161,334 4.36


Singapore

1,226,523

1,239,915

33.52

Total quoted investments –

local

2,728,253

2,834,220

76.61

Net unrealised loss on change

in value of investments

105,967

Fair value of total financial

assets at fair value through

profit or loss

2,834,220

7 CASH AND CASH EQUIVALENTS

31.03.2014 31.03.2013 01.04.2012 RM RM RM

Bank balance with a licensed bank 9,359 5,416 8,090

Deposits with licensed financial institutions 190,056 521,024 1,363,985

199,415 526,440 1,372,075

The effective average rate of deposit placement with a licensed financial institution per annum

as the date of the statement of financial position are as follows:

31.03.2014 31.03.2013 01.04.2012

% % %

Deposits with a licensed financial institution 2.95 1.69 1.06



33

Deposit has an average maturity of 2 days (31.03.2013: 2 days, 01.04.2012: 5 days).

8 UNIT HOLDERS’ CAPITAL

Net Asset Value attributable to unit holders is represented by:

2014 2013

Note RM RM

Unit holders’ capital (a) 2,581,841 4,351,407

Accumulated (losses)/ gain (75,438) 85,164

2,506,403 4,436,571

(a) Number of units in circulation and net assets attributable to unit holders

--------- 2014 --------- --------- 2013 ---------

Units RM Units RM

As at the beginning of the

financial period

7,283,582

3,820,057

6,802,823

3,561,707

Creation arising from application 33,840 17,004 1,669,819 892,948

Release of units (2,471,792) (1,255,220) (185,865) (103,248)

As at the end of the financial

period

4,845,630

2,581,841

8,286,777

4,351,407

Approved size of the Fund 500,000,000 500,000,000

In accordance with the Deed, the Manager may increase the size of the Fund from time to time

with the approval of the Securities Commission Malaysia. The maximum number of units that

can be issued out for circulation is 500,000,000 (2013: 500,000,000; 2012: 500,000,000

units). As at 31 March 2014, the number of unit issued by the Funds is 495,154,370 (2013:

491,713,223; 2012: 492,072,477 units).

9 TRANSACTIONS WITH BROKERS/DEALERS

Details of transactions with the top 10 brokers are as follows:

Name of brokers/dealers

Value of

trades

% of total

trades

Brokerage

Fees

% of total brokerage

fees

RM % RM %

31 March 2014

CIMB Bank Berhad 3,160,000 36.01 - -

CIMB Investment Bank Berhad 2,000,875 22.80 7,241 33.14

J.P. Morgan Securities (Asia

Pacific) Limited

915,926

10.44

3,325

15.22

AmInvestment Bank Berhad 868,384 9.90 2,910 13.32

CLSA Limited 695,206 7.92 3,608 16.51

Credit Suisse (Hong Kong)

Limited 576,282 6.57 2,229 10.20

Macquarie Capital Securities

Limited 558,528 6.36 2,538 11.61

8,775,201 100.00 21,851 100.00

31 March 2013

CIMB Investment Bank Berhad 3,647,910 24.52 17,362 43.42

CIMB Bank Berhad 3,430,000 23.05 - -

J.P. Morgan Securities (Asia

Pacific) Limited 2,747,250 18.46 12,615 31.54



34

Name of brokers/dealers

Value of

trades

% of

total

trades

Brokerage

Fees

% of total

brokerage

fees

Macquarie Capital Securities

Limited

1,321,555

8.88

4,328

10.82

OSK Investment Bank Berhad 1,090,000 7.33 - -

KAF Investment Bank Berhad 1,080,000 7.26 - -

CLSA Limited 765,562 5.14 3,054 7.64

AmInvestment Bank Berhad 423,982 2.85 1,373 3.43

JP Morgan Securities (Malaysia)

Sdn Bhd

373,874

2.51

1,258

3.15

14,880,133 100.00 39,990 100.00

All brokers and dealers highlighted above are not related to the Manager.

10 UNITS HELD BY THE MANAGER

The units are held beneficially by the Manager for bookings purpose, also called the Manager’s

stocks.

There were no units held by the Manager, Directors or parties related to the Manager as of the

date of the unaudited statement of financial position.

11 MANAGEMENT EXPENSE RATIO (“MER”)

2014 2013

% %

MER 1.29 1.69

Management expense ratio includes management fee, Trustee’s fee, and other administrative

expenses which is calculated as follows:

MER = (A + B + C ) x 100

D

A = Management fee

B = Trustee’s fee

C = Administrative expenses

D = Average net asset value of the Fund, calculated on a daily basis

The average net asset value of the Fund for the financial period calculated on a daily basis is

RM3,041,042 (2013: RM3,232,517).

12 PORTFOLIO TURNOVER

2014 2013

The portfolio turnover for the period (times) 0.93 1.44

The portfolio turnover is derived from the following calculation:

(Total acquisition for the period + total disposal for the period) 2

Average net asset value of the Fund for the period calculated on a daily basis

where:

total acquisition for the period = RM2,314,482 (2013: RM4,860,758)

total disposal for the period = RM3,348,630 (2013: RM4,419,375)

13 SEGMENTAL INFROMATION

The external Fund Manager makes the strategic resource allocations on behalf of the Fund.

The Fund has determined the operating segments based on the reports reviewed by the

external Fund Manager that are used to make strategic decisions.



35

The Investment Committee is responsible for the Fund’s entire portfolio and considers the

business to have a single operating segment. The committee’s asset allocation decisions are

based on a single, integrated investment strategy and the Fund’s performance is evaluated on

an overall basis.

The Fund trades in a diversified portfolio of equity securities with the objective of providing

investors with an opportunity for capital growth. The Fund is domiciled in Malaysia. All of the

Fund’s income is from investments in entities incorporated in Malaysia and outside Malaysia.

There are 4 unit holders who held more than 10% of the Fund’s net asset value.

The internal reporting provided to the Chief Executive Officer (CEO) 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 CEO is responsible for the performance of the

Fund and considers the business to have a single operating segment.

The reportable operating segments derive their income by seeking investments to achieve

targeted returns consummate with an acceptable level of risk within each portfolio. These

returns consist of interest income, dividend income, foreign exchange gains/losses and gains

on the appreciation in the value of investments.

There were no changes in the reportable segments during the financial period.

14 SEGMENTAL INFROMATION

Effective from 1 October 2012, the Fund adopted MFRS 1 ‘First-time adoption of MFRS’

(effective 1 January, 2012) for the financial year ended 30 September 2013. The financial

statement of the Fund for the financial year ended 30 September 2013 are the first set of

financial statements prepared in accordance with the MFRS, including MFRS 1 ‘First-time

adoption of MFRS’. The Fund has consistently applied the same accounting policies in its

opening MFRS statement of financial position at 1 October 2011 (transition date) and

throughout all years presented, as if these policies had always been in effect.

(a) MFRS 1 mandatory exceptions

Estimates

MFRS estimates as at transition date is consistent with the estimates as at the same date

made in conformity with FRS.

(b) Explanation of transition from FRS to MFRS

Transition from FRS to MFRS does not have any significant impact on the financial

statements of the Fund.

15 INTERIM ACCOUNTS

The interim accounts for the 6-month period ended 31 March 2014 have not been audited.

Documents

INTERIM REPORT MARCH 2014 - · PDF fileINTERIM REPORT MARCH 2014 ... and redemption of units by the Management Company ... the full year growth rate to 4.7% in 2013 compared to 5.6%