KenAnGA syAriAh GrOwth fund - kenangainvestors.com.my · KenAnGA syAriAh GrOwth fund Contents Page Corporate directory ii - iii Directory of Manager’s Offices iv fund information

interim rePOrt

For the Financial Period from 1 June 2017 to 30 November 2017

KenAnGA syAriAh GrOwth fund

KenAnGA syAriAh GrOwth fund

Contents Page

Corporate directory ii - iiiDirectory of Manager’s Offices ivfund information 1manager’s report 2 - 4fund Performance 5 - 7trustee’s report 8shariah Adviser’s report 9statement by the manager 10financial statements 11 - 42

ii Kenanga Syariah Growth Fund Interim Report

COrPOrAte direCtOrymanager: Kenanga investors Berhad (Company No. 353563-P)

Registered OfficeLevel 17, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 2888 Fax: 03-2172 2999

Business OfficeLevel 14, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3000 Fax: 03-2172 3080E-mail:[email protected]: www.KenangaInvestors.com.my

Board Of directorsDatuk Syed Ahmad Alwee Alsree (Chairman)Syed Zafilen Syed Alwee (independent

director)Peter John Rayner (independent director)Imran Devindran bin Abdullah (independent

director)Dato’ Bruce Kho Yaw HuatIsmitz Matthew De Alwis

investment Committee Dato’ Bruce Kho Yaw Huat (Chairman) Syed Zafilen Syed Alwee (independent

member)Peter John Rayner (independent member)Imran Devindran bin Abdullah (independent

member)Ismitz Matthew De Alwis

Company secretary: norliza Abd samad (MAICSA 7011089)

Level 17, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia

external fund manager: Kenanga islamic investors Berhad (Company No. 451957-D)

Registered Office Kenanga Islamic Investors Berhad (KIIB)17th Floor, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3000 Fax: 03-2161 4990

Business Office 13th Floor, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3000 Fax: 03-2161 8805

trustee: CimB islamic trustee Berhad (Company No. 167913-M)

Registered Office Level 13, Menara CIMBJalan Stesen Sentral 2Kuala Lumpur Sentral50490 Kuala Lumpur.Tel: 03-2261 8888Fax: 03-2261 0099Website:www.cimb.com

Business Office Level 21, Menara CIMBJalan Stesen Sentral 2Kuala Lumpur Sentral50490 Kuala Lumpur.Tel: 03-2261 8888Fax: 03-2261 9889

shariah Adviser: iBfim (Company No. 763075-W)

Registered Office No. 149A, 149B, 151BPersiaran Raja Muda Musa42000 Port KlangSelangor Darul Ehsan, Malaysia

Business Office 3rd Floor, Menara Takaful MalaysiaJalan Sultan Sulaiman50000 Kuala Lumpur, Malaysia.Tel: 03-2031 1010 Fax: 03-2078 5250

Kenanga Syariah Growth Fund Interim Report iii

Auditor: ernst & young (AF: 0039)

Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

tax Adviser: ernst & young tax Consultants sdn Bhd (Company No. 179793-K)

Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

membership: federation Of investment managers malaysia (fimm)19-06-1, 6th Floor, Wisma Tune, 19, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia.Tel: 03-2093 2600 Fax: 03-2093 2700 Website: www.fimm.com.my

iv Kenanga Syariah Growth Fund Interim Report

direCtOry Of mAnAGer’s OffiCesRegional Branch Offices :

Kuala LumpurLevel 13, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3123 Fax: 03-2172 3133

Johor BahruLot 11.03, 11th Floor, Menara MSC CyberportNo. 5, Jalan Bukit Meldrum80300 Johor Bahru , JohorTel: 07-223 7505 / 4798 Fax: 07-223 4802

melakaNo. 25-1, Jalan Kota Laksamana 2/17Taman Kota Laksamana, Seksyen 275200 MelakaTel: 06-281 8913 / 06-282 0518Fax: 06-281 4286

Kuching1st Floor, No 71Lot 10900, Jalan Tun Jugah93350 Kuching, SarawakTel: 082-572 228 Fax: 082-572 229

KlangNo. 12, Jalan Batai Laut 3, Taman Intan41300 Klang, Selangor Darul EhsanTel: 03-3341 8818 / 03-3348 7889 Fax: 03-3341 8816

KuantanNo. B8, Ground Floor, Jalan Tun Ismail 125000 Kuantan Pahang.Tel : 09-514 3688Fax : 09-514 3838

Penang5.04, 5th Floor, Menara Boustead Penang No. 39, Jalan Sultan Ahmad Shah 10050 Penang. Tel : 04-210 6628Fax : 04-210 6644

ipohSuite 1, 2nd Floor,No. 63, Persiaran Greenhill,30450 Ipoh, Perak, MalaysiaTel: 05-254 7573 / 7570 / 7575Fax: 05-254 7606

miri 2nd Floor, Lot 1264, Centre Point Commercial Centre, Jalan Melayu, 98000 Miri, Sarawak Tel: 085-416 866 Fax: 085-322 340

Kota KinabaluA-03-11, 3rd FloorBlock A, Warisan SquareJalan Tun Fuad Stephens88000 Kota Kinabalu, SabahTel: 088-447 089 / 088-448 106 Fax: 088-447 039

seremban 2nd Floor, No. 1D-2, Jalan Tuanku Munawir 70000 Seremban, Negeri Sembilan Tel: 06-761 5678 Fax: 06-761 2242

Petaling Jaya44B, Jalan SS21/35Damansara Utama47400 Petaling Jaya, SelangorTel: 03-7710 8828Fax: 03-7710 8830

iv Kenanga Syariah Growth Fund Interim Report Kenanga Syariah Growth Fund Interim Report 1

1. fund infOrmAtiOn

1.1 fund name

Kenanga syariah Growth fund (KsGf or the fund)

1.2 fund Category / type

Equity (Islamic) / Growth

1.3 investment Objective

The Fund aims to provide unit holders with long term capital growth by investing principally in equities that comply with Shariah requirements.

1.4 investment strategy

The Fund will invest principally in a diversified portfolio of Malaysian Shariah-compliant equity and equity related securities of companies with sustainable business model and trading at a discount to its intrinsic value.

1.5 duration

The Fund was launched on 29 January 2002 and shall exist as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue.

1.6 Performance Benchmark

FTSE-Bursa Malaysia Emas Shariah Index (FBMS).

1.7 distribution Policy

Income distribution is incidental, if any.

1.8 external fund manager

Kenanga Islamic Investors Berhad

1.9 Breakdown of unit holdings of KsGf as at 30 november 2017

size of holdingsno. of

unitholdersno. of units

held5,000 and below 4,268 11,130,8995,001 - 10,000 2,947 21,953,82110,001-50,000 5,505 124,178,57950,001-500,000 1,367 143,503,229500,001 and above 28 61,145,098total 14,115 361,911,626

2 Kenanga Syariah Growth Fund Interim Report

2. mAnAGer’s rePOrt

2.1 explanation on whether the fund has achieved its investment objective.

The Fund achieved its investment objective of achieving consistent capital appreciation over the long term by primarily investing in Shariah-compliant securities with good growth prospects.

2.2 Comparison between the fund’s performance and performance of the benchmark

Performance Chart since Launch (29/01/2002 – 30/11/2017)Kenanga syariah Growth fund vs ftse-Bursa malaysia emas shariah index

Source: Lipper

2.3 Investment strategies and policies employed during the financial period under review

For the financial year under review, the Fund continued with its strategy of investing in Shariah compliant securities of companies with sustainable business models and competent management, whilst trading at a discount to their intrinsic / fair value. The Fund focused on companies whose top line / revenue should prove to be relatively more resilient to a global economic slowdown and have the ability to maintain their profit margins.

We maintained a defensive portfolio strategy and preferred companies driven by resilient earnings with exposure to selective themes like USD beneficiaries (exporters), beneficiaries of rising foreign direct investment, GLC reform/restructuring plays, domestic consumption and infrastructure.

2.4 the fund’s asset allocation as at 30 november 2017 and comparison with the previous financial period

Asset 30 nov 2017 30 nov 2016Listed Shariah-compliant equity securities 86.0% 75.8%Short term Islamic deposits and cash 14.0% 24.2%

reason for the differences in asset allocation

The fund invested level increased to 86.0% due to the fund manager taking advantage of market weaknesses.

Kenanga Syariah Growth Fund Interim Report 3

2.5 fund performance analysis based on nAV per unit (adjusted for income distribution; if any) since last review period

Period under review

Kenanga syariah Growth fund 4.06%ftse-Bursa malaysia emas shariah index (fBms) 0.91%

Source: Lipper

For the financial year under review, the fund outperformed the FBMS benchmark by 3.15% mainly due to Shariah compliant stock selection.

2.6 review of the market

market review

Asian markets performed well in June with key indices reaching all-time high. As a widely expected move, US Fed raised interest rates for the second time in 2017 by 25bps after upgrading GDP growth forecast to 2.2% and unemployment rate to 4.3% for 2017. Sector wise, Technology suffered a minor sell down in June as investors rotate into financial and energy stocks for value.

The International Monetary Fund (IMF) remained confident that the global economic recovery is on a firmer footing this year on expectations of accelerating growth in the Euro-zone, Japan and China. In the July 2017 update of its World Economic Outlook (WEO), the IMF kept its global GDP forecast at 3.5% for 2017 and 3.6% for 2018 – unchanged from its April 2017 outlook.

Major European and Asian Indexes fell early August with concerns over North Korea, Hurricane Harvey, Spain terror attacks and the US political environment. Stronger economic data and positive corporate earnings propped up August numbers. The Jackson Hole Economic Policy Symposium accentuates the challenges faced by central bankers to spur wage inflation despite falling global unemployment, as speeches from Janet Yellen and Mario Draghi avoided monetary policy, focusing on regulatory reforms and market risks. The third round of negotiations between UK and EU has begun, with a multi-year transitional agreement likely to arrive after March 2019.

The regional markets were jittery in September as sabre rattling by North Korea sent investors into selling mode while heightened expectations of another US interest rate hike and balance sheet contraction this year following comments from Federal Reserve officials also added to the downbeat sentiment. Meanwhile, the Asian Development Bank came out a report and remained confident that the global economic recovery is on a firmer footing this year as controlled growth moderation in China is balanced by expected healthy growth elsewhere.

Regional markets fared better in October compared to previous month driven by a recovery in tech stocks and easing geopolitical tension between China and Korea following the year-long standoff over deployment of anti-missile systems. Following this, both economies agreed to a currency swap agreement, which was key rerating catalyst for China-centric Korean equities.

The month of November started off with the Bank of England raising UK interest rates for first time since 2007. The Bank of England raised rates by 25bps but the Pound still fell as gloomy forecasts for growth appeared to rule out the prospect of steep increases in the cost of credit before 2020. As largely expected, President Donald Trump has named Jerome Powell as the next Federal Reserve Chairman.


2.6 review of the market (contd.)

market Outlook

Economic growth in Malaysia is forecasted to run at a decent pace of about 5.3%, albeit lower than the 5.8% expected for 2017. Drivers of growth should broaden into domestic demand, as strong exports, higher commodity prices and stronger Ringgit feed into the other sectors of the economy. Besides, the undemanding valuations of the Malaysian market against regional peers are likely to sustain foreign interest on top of stronger MYR and crude oil prices.

The ongoing economic momentum, coupled with positive seasonality (January effect and pre-CNY rally) will likely result in a strong start in 2018. Expectations of GE14 should spur additional trading interest. We are positive and hence will maintain a relative high investment levels in the 1Q, but tactically scale back upon dissolution of parliament.

strategy

We remain constructively positive on the market and maintain that Shariah-compliant stock picking is key for outperformance. We favour construction, exporters which provide more value added or are naturally hedged by having USD raw material cost, consumer staples like F&B, and utilities. We remain selective on oil & gas and property.

2.7 income distribution

For the financial period under review, the Fund did not declare any income distribution

2.8 details of any unit split exercise

The Fund did not carry out any unit split exercise during the financial period under review.

2.9 Significant changes in the state of affair of the Fund during the financial period

There were no significant changes in the state of affair of the Fund during the financial period and up until the date of the manager’s report, not otherwise disclosed in the financial statements.

2.10 Circumstances that materially affect any interests of the unit holders

During the financial period under review, there were no circumstances that materially affected any interests of the unit holders.

2.11 rebates & soft commissions

Any rebates received are channelled back to the Fund. On the other hand, soft commissions received from the stockbrokers for goods and services such as technical analysis software, fundamental database, financial wire services, stock quotation system and portfolio management software incidental to investment management of the Fund shall be retained by the Manager. For the financial period under review, the Manager has received soft commissions from stockbrokers.


3. fund PerfOrmAnCe

3.1 Details of portfolio composition of the Fund for the financial period as at 30 November 2017 against last 3 financial years as at 31 May are as follows:

a. distribution among industry sectors and category of shariah-compliant investments:

As at fy fy fy30.11.2017 2017 2016 2015

% % % %

Trading/Services 23.3 20.5 23.8 29.5Constructions 14.3 13.7 8.0 6.1Industrial products 14.3 12.7 12.4 7.5Consumer

products 9.2 4.9 4.1 5.8Properties 8.5 8.7 5.7 7.5Plantations 5.9 2.6 5.3 7.0Finance 4.4 4.1 4.1 4.9Technology 4.4 3.5 2.1 3.9Infrastructure - 1.6 4.2 3.1Islamic Real Estate

Investments Trusts 1.6 3.8 4.6 4.7

Shariah-compliant warrants 0.1 - 0.1 0.1

Short term Islamic deposits and cash 14.0 23.9 25.6 19.9

100.0 100.0 100.0 100.0

Note: The above mentioned percentages are based on total Shariah-compliant investments market value plus cash.

b. distribution among markets

The Fund invests in local Shariah-compliant investment securities and cash instruments only.


3.2 Performance details of the Fund for the financial period ended 30 November 2017 against last 3 financial years ended 31 May are as follows:

Period from1.6.2016 to30.11.2017

fy2017

fy2016

fy2015

Net asset value (“NAV”) (RM Million) 399.88* 361.64 241.24 156.32

Units in circulation (Million) 361.91 340.58 243.01 142.14

NAV per unit (RM) 1.1049* 1.0618 0.9927 1.0998Highest NAV per unit

(RM) 1.1095 1.0802 1.1285 1.2569Lowest NAV per unit (RM) 1.0517 0.9868 0.9851 1.0511Total return (%) 4.06 6.95 -0.47 -1.30- Capital growth (%) 4.06 6.95 -9.74 -9.84- Income growth (%) - - 9.27 8.54Gross distribution per unit

(sen) - - 10.11 10.50Net distribution per unit

(sen) - - 10.11 10.50Management expense

ratio (“MER”) (%) 1 1.63 1.69 1.70 1.62Portfolio turnover ratio

(“PTR”) (times) 2 0.52 0.48 0.39 0.68

Note: Total return is the actual return of the Fund for the respective financial period/years, computed based on NAV per unit and net of all fees.

MER is computed based on the total fees and expenses incurred by the Fund divided by the average fund size calculated on a daily basis. PTR is computed based on the average of the total acquisitions and total disposals of Shariah-compliant investment securities of the Fund divided by the average fund size calculated on a daily basis.

1 MER is lower against previous financial year mainly due to lower recovered expenses incurred during the financial period under review.

2 PTR for the financial period under review is higher due to increased trading activities by the fund manager.

* Based on bid price fair valuation method on all investments held by the Fund as at 30 November 2017, the NAV and NAV per unit would be RM397.68 million and RM1.0988 respectively.

(As disclosed under Note 12 of the financial statements)


3.3 Average total return of the fund

1 year30 nov 16 – 30 nov 17

3 years30 nov 14 – 30 nov 17

5 years30 nov 12 – 30 nov 17

Kenanga syariah Growth fund 11.58% 4.53% 7.68%ftse-Bursa malaysia emas shariah index (fBms) 8.56% 0.08% 3.68%

Source: Lipper

3.4 Annual total return of the fund

Period under review31 may

17 - 30 nov

17

1 year31 may

16 - 31 nov

17

1 year 31 may

15 - 31 may

16

1 year31 may

14 - 31 may

15

1 year31 dec

12 - 31 may

14

1 year31 dec

12 - 31 dec

13Kenanga syariah Growth fund 4.06% 6.95% -0.47% -1.30% 28.72% 20.51%ftse-Bursa malaysia emas shariah index (fBms) 0.91% 7.39% -5.20% -4.26% 14.02% 13.29%

Source: Lipper

Investors are reminded that past performance is not necessarily indicative of future performance. Unit prices and investment returns may fluctuate.


4 trustee’s rePOrt tO the unit hOLders Of KenAnGA syAriAh GrOwth fund

We, CimB islamic trustee Berhad being the Trustee of Kenanga syariah Growth fund (“the Fund”) are of the opinion that Kenanga investors Berhad (“the Manager”), acting in the capacity as Manager of the Fund, has fulfilled its duties in the following manner for the financial period from 1 June 2017 to 30 November 2017.

a) The Fund has been managed in accordance with the limitations imposed on the

investment powers of the Manager under the Deed, the Securities Commission Malaysia’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 (as amended from time to time) and other applicable laws;

b) Valuation and pricing for the Fund has been carried out in accordance with the Deed and relevant regulatory requirements; and

c) Creation and cancellation of units have been carried out in accordance with the Deed and relevant regulatory requirements.

For and on behalf of CimB islamic trustee Berhad Lee Kooi yoke Chief Operating Officer Kuala Lumpur, Malaysia

26 January 2018


5. shAriAh AdViser’s rePOrt tO the unit hOLders Of KenAnGA syAriAh GrOwth fund

We have acted as the Shariah Adviser of Kenanga Syariah Growth Fund. Our responsibility is to ensure that the procedures and processes employed by Kenanga Investors Berhad are in accordance with Shariah principles.

In our opinion, Kenanga Investors Berhad has managed and administered Kenanga Syariah Growth Fund in accordance with Shariah principles and complied with applicable guidelines, rulings and decisions issued by the Securities Commission Malaysia pertaining to Shariah matters for the financial period form 1 June 2017 to 30 November 2017.

In addition, we also confirm that the investment portfolio of Kenanga Syariah Growth Fund comprises securities which have been classified as Shariah-compliant by the Shariah Advisory Council of the Securities Commission Malaysia. As for the securities which are not certified by the Shariah Advisory Council of the Securities Commission Malaysia, we have reviewed the said securities and opine that these securities are designated as Shariah-compliant.

For and on behalf of the Shariah AdviserIBFIM

Muhammad Khairulnizam Bin AliasConsultant (Shariah)/Designated Person Responsible for Shariah Advisory

Kuala Lumpur, Malaysia

26 January 2018


6. stAtement By the mAnAGer

I, ismitz matthew de Alwis, being a director of Kenanga investors Berhad, do hereby state that, in the opinion of the Manager, the accompanying statement of financial position as at 30 November 2017 and the related statement of comprehensive income, statement of changes in net asset value and statement of cash flows for the financial period from 1 June 2017 to 30 November 2017 together with notes thereto, 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 Kenanga syariah Growth fund as at 30 November 2017 and of its financial performance and cash flows for the financial period from 1 June 2017 to 30 November 2017 and comply with the requirements of the Deed.

For and on behalf of the Manager KenAnGA inVestOrs BerhAd

ismitz mAtthew de ALwisExecutive Director/Chief Executive Officer

Kuala Lumpur, Malaysia

26 January 2018


7. finAnCiAL stAtements

7.1 stAtement Of COmPrehensiVe inCOme fOr the finAnCiAL PeriOd frOm 1 June 2017 tO 30 nOVemBer 2017 (unaudited)

note1.6.2017 to 30.11.2017

1.6.2016 to 30.11.2016

rm rm

inVestment inCOme

Dividend income 4,319,892 2,691,410 Profit income 829,353 999,330 Net gain/(loss) from Shariah-compliant

investments:- Financial assets at fair value through profit or

loss (“FVTPL”) 4 14,319,983 (1,922,208) 19,469,228 1,768,532

eXPenses

Manager’s fee 5 2,810,427 1,941,524 Trustee’s fee 6 93,681 64,718 Auditors’ remuneration 6,710 5,014 Tax agent’s fee 2,005 2,005 Administration expenses 275,773 165,026 Brokerage and other transaction costs 1,645,525 787,312

4,834,121 2,965,599

net inCOme/(LOss) BefOre tAX 14,635,107 (1,197,067)

Income tax 7 - -

net inCOme/(LOss) After tAX, rePresentinG tOtAL COmPrehensiVe inCOme/(LOss) fOr the finAnCiAL PeriOd 14,635,107 (1,197,067)

Net income/(loss) after tax is made up as follows:Realised gain/(loss) 418,712 (300,386)Unrealised gain/(loss) 4 14,216,395 (896,681)

14,635,107 (1,197,067)

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


7.2 stAtement Of finAnCiAL POsitiOn As At 30 nOVemBer 2017 (unaudited)

note 30.11.2017 30.11.2016rm rm

Assets

inVestments

Financial assets at FVTPL 4 344,612,971 203,868,359Short term Islamic deposits 8 53,535,513 65,005,917

398,148,484 268,874,276

Other Assets

Amount due from Manager - 614,871Other receivables 9 5,169,974 910,590Tax recoverable 9,092 9,092Cash at bank 2,551,786 147,629

7,730,852 1,682,182

tOtAL Assets 405,879,336 270,556,458

LiABiLities

Amount due to Manager 258,734 -Amount due to Trustee 16,284 11,001Other payables 10 7,919,833 2,356,046tOtAL LiABiLities 8,194,851 2,367,047

eQuity

Unit holders’ contribution 364,464,024 269,675,948Retained earning/Accumulated loss 33,220,461 (1,486,537)net Asset VALue (“nAV”) AttriButABLe

tO unit hOLders 11 397,684,485 268,189,411

tOtAL LiABiLities And eQuity 405,879,336 270,556,458

numBer Of units in CirCuLAtiOn 11(a) 361,911,626 271,702,336

net Asset VALue Per unit (rm) 12 1.0988 0.9871



7.3 stAtement Of ChAnGes in net Asset VALue fOr the finAnCiAL PeriOd frOm 1 June 2017 tO 30 nOVemBer 2017 (unaudited)

noteunit holders’ contribution

retained earning/

(Accumulated loss) total nAV

rm rm rm

1.6.2017 to 30.11.2017At beginning of the financial

period 341,577,232 18,585,354 360,162,586 Total comprehensive

income - 14,635,107 14,635,107 Creation of units 11(a) 47,181,797 - 47,181,797 Cancellation of units 11(a) (24,346,083) - (24,346,083)Distribution equalisation 11(a) 51,078 - 51,078 At end of the financial

period 364,464,024 33,220,461 397,684,485

1.6.2016 to 30.11.2016At beginning of the financial

period 240,725,559 (289,470) 240,436,089 Total comprehensive loss - (1,197,067) (1,197,067)Creation of units 11(a) 41,439,087 - 41,439,087 Cancellation of units 11(a) (12,558,397) - (12,558,397)Distribution equalisation 11(a) 69,699 - 69,699 At end of the financial

period 269,675,948 (1,486,537) 268,189,411



7.4 stAtement Of CAsh fLOws fOr the finAnCiAL PeriOd frOm 1 June 2017 tO 30 nOVemBer 2017 (unaudited)

1.6.2017 to 30.11.2017

1.6.2016 to 30.11.2016

rm rm

CAsh fLOws frOm OPerAtinG And inVestinG ACtiVities

Proceeds from sale of financial assets at FVTPL 171,676,844 49,509,540 Dividends received 4,508,067 2,850,357 Profit received from Islamic deposits 869,999 992,900 Auditors’ remuneration paid (12,000) (10,900)Trustee’s fee paid (92,249) (63,805)Payments for other fees and expenses (225,991) (150,084)Manager’s fee paid (2,767,458) (1,904,994)Purchase of financial assets at FVTPL (230,310,886) (77,320,891)Net cash used in operating and investing activities (56,353,674) (26,097,877)

CAsh fLOws frOm finAnCinG ACtiVitiesCash received from units created 47,689,261 42,693,991 Cash paid on units cancelled (24,309,269) (12,576,211)Net cash generated from financing activities 23,379,992 30,117,780

net (deCreAse)/inCreAse in CAsh And CAsh eQuiVALents (32,973,682) 4,019,903

CAsh And CAsh eQuiVALents At BeGinninG Of the finAnCiAL PeriOd 89,060,981 61,133,643

CAsh And CAsh eQuiVALents At end Of the finAnCiAL PeriOd 56,087,299 65,153,546

Cash and cash equivalents comprise:Cash at bank 2,551,786 147,629 Short term Islamic deposits 53,535,513 65,005,917

56,087,299 65,153,546



7.5 nOtes tO the finAnCiAL stAtements fOr the finAnCiAL PeriOd frOm 1 June 2017 tO 30 nOVemBer 2017 (unaudited)

1. the fund, the mAnAGer And their PrinCiPAL ACtiVities

Kenanga Syariah Growth Fund (“the Fund”) was constituted pursuant to the executed Master Deed dated 8 January 2002 (collectively, together with deeds supplemental thereto, referred to as “the Deed”) between the Manager, Kenanga Investors Berhad, and HSBC (Malaysia) Trustee Berhad (“the Trustee” prior to 3 December 2013). The Fund has changed its trustee to CIMB Islamic Trustee Berhad (“the Trustee” with effect from 3 December 2013). The aforesaid change was effected on 3 December 2013 via a Second Master Supplemental Deed dated 19 November 2013. The Fund commenced operations on 29 January 2002 and will continue to be in operation until terminated by the Trustee, as provided under Part 12 of the Deed.

Kenanga Investors Berhad is a wholly-owned subsidiary of Kenanga Investment Bank Berhad. Prior to 1 November 2016, Kenanga Investment Bank Berhad was a wholly-owned subsidiary of K & N Kenanga Holdings Berhad that was listed on the Main Market of Bursa Malaysia Securities Berhad. Pursuant to an internal reorganisation exercise completed on 1 November 2016, Kenanga Investment Bank Berhad has become the holding company of K & N Kenanga Holdings Berhad. On 2 November 2016, Kenanga Investment Bank Berhad has assumed the listing status of K & N Kenanga Holdings Berhad. All of these companies are incorporated in Malaysia.

The principal place of business of the Manager is Level 14, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur.

The Fund seeks to provide unit holders with long term capital growth by investing principally in equities that comply with Shariah requirements.

2. finAnCiAL risK mAnAGement OBJeCtiVes And POLiCies

The Fund is exposed to a variety of risks including market risk (which includes interest rate risk and price risk), credit risk, liquidity risk and reclassification of Shariah status risk. Whilst these are the most important types of financial risks inherent in each type of financial instruments, the Manager and the Trustee would like to highlight that this list does not purport to constitute an exhaustive list of all the risks inherent in a Shariah-compliant investment in the Fund.

The Fund has an approved set of investment guidelines and policies as well as internal controls which sets out its overall business strategies to manage these risks to optimise returns and preserve capital for the unit holders, consistent with the long term objectives of the Fund.

a. market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk includes interest rate risk and price risk.


2. finAnCiAL risK mAnAGement OBJeCtiVes And POLiCies (COntd.)

a. market risk (contd.)

Market risk arises when the value of the Shariah-compliant investments fluctuates in response to the activities of individual companies, general market or economic conditions. It stems from the fact that there are economy-wide perils, which threaten all businesses. Hence, investors are exposed to market uncertainties. Fluctuation in the Shariah-compliant investments’ prices caused by uncertainties in the economic, political and social environment will affect the NAV of the Fund.

The Manager manages the risk of unfavourable changes in prices by cautious review of the Shariah-compliant investments and continuous monitoring of their performance and risk profiles.

i. interest rate risk

Interest rate risk refers to how the changes in the interest rate environment would affect the valuation of Shariah-compliant instruments. In the event of a rising interest rate environment, the performance of Shariah-compliant instruments may decrease, and vice versa. Interest rate, such as the Overnight Policy Rate set by Bank Negara Malaysia, will have an impact on the investment decisions of the Fund regardless of whether it is a Shariah-compliant fund or otherwise. It does not in any way suggest that the Fund will invest in conventional financial instruments.

The Fund is not exposed to significant interest rate risk as its Islamic deposits are short term in nature and have fixed profit rates.

interest rate risk exposure

The following table analyses the Fund’s interest rate risk exposure. The Fund’s financial assets and financial liabilities are disclosed at fair value and categorised by the earlier of contractual re-pricing or maturity dates.

up to 1 year

non-exposure to interest rate

movement total

weighted average

effective rate of return*

rm rm rm %

30.11.2017AssetsFinancial

assets at FVTPL - 344,612,971 344,612,971

Short term Islamic deposits 53,535,513 - 53,535,513 3.1

Other assets - 7,721,760 7,721,760 53,535,513 352,334,731 405,870,244




i. interest rate risk (contd.)

interest rate risk exposure (contd.)

up to 1 year

non-exposure

to interest rate

movement total

weighted average effective

rate of return*

rm rm rm %

30.11.2017 (contd.)

LiabilitiesOther liabilities - 8,121,101 8,121,101

total interest rate sensitivity gap 53,535,513 344,213,630 397,749,143

30.11.2016AssetsFinancial assets at

FVTPL - 203,868,359 203,868,359Short term Islamic

deposits 65,005,917 - 65,005,917 3.0Other assets - 1,673,090 1,673,090

65,005,917 205,541,449 270,547,366

LiabilitiesOther liabilities - 2,300,327 2,300,327

total interest rate sensitivity gap 65,005,917 203,241,122 268,247,039

* Computed based on Shariah-compliant assets with exposure to interest rate movement only.




ii. Price risk

Price risk is the risk of unfavorable changes in the fair values of listed Shariah-compliant equity securities, listed Shariah-compliant collective investment schemes, listed Shariah-compliant warrants and unlisted Shariah-compliant equity securities. The Fund invests in of listed Shariah-compliant equity securities, listed Shariah-compliant collective investment schemes, listed Shariah-compliant warrants and unlisted Shariah-compliant equity securities which are exposed to price fluctuations. This may then affect the NAV of the Fund.

Price risk sensitivity

The Manager’s best estimate of the effect on the profit for the financial period due to a reasonably possible change in investments in listed Shariah-compliant equity securities, listed Shariah-compliant collective investment schemes, listed Shariah-compliant warrants and unlisted Shariah-compliant collective investment schemes, with all other variables held constant is indicated in the table below:

Changes in price

increase/(decrease)

Basis points

Effects on profit for the financial

periodincrease/

(decrease)rm

30.11.2017Financial assets at FVTPL 5/(5) 172,306/(172,306)

30.11.2016Financial assets at FVTPL 5/(5) 101,934/(101,934)

In practice, the actual trading results may differ from the sensitivity analysis above and the difference could be material.

Price risk concentration

The following table sets out the Fund’s exposure and concentration to price risk based on its portfolio of Shariah-compliant financial instruments as at the reporting date.




ii. Price risk (contd.)

Price risk concentration (contd.)

fair value Percentage of nAV30.11.2017 30.11.2016 30.11.2017 30.11.2016

rm rm % %

Financial assets at FVTPL 344,612,971 203,868,359 86.6 76.0

The Fund’s concentration of Shariah-compliant investment security price risk from the Fund’s listed Shariah-compliant equity securities, listed Shariah-compliant collective investment schemes, listed Shariah-compliant warrants and unlisted Shariah-compliant equity securities analysed by sector is as follows:

fair value Percentage of nAV30.11.2017 30.11.2016 30.11.2017 30.11.2016

rm rm % %

Trading/Services 93,488,741 61,456,561 23.5 22.9Constructions 57,424,540 31,328,031 14.4 11.7Industrial products 57,184,982 35,536,316 14.4 13.3Consumer products 36,912,659 16,431,442 9.3 6.1Properties 34,221,899 17,021,385 8.6 6.4Plantations 23,661,690 10,000,885 5.9 3.7Finance 17,623,484 8,879,097 4.4 3.3Technology 17,400,144 6,116,598 4.4 2.3Infrastructure - 6,826,228 - 2.5Islamic Real Estate

Investments Trusts 6,156,465 10,143,680 1.6 3.8

Shariah-compliant warrants 538,367 128,136 0.1 -

344,612,971 203,868,359 86.6 76.0



b. Credit risk 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. The Manager manages the credit risk by undertaking credit evaluation to minimise such risk.

i. Credit risk exposure

As at the reporting date, the Fund’s maximum exposure to credit risk is represented by the carrying amount of each class of financial asset recognised in the statement of financial position.

ii. financial assets that are either past due or impaired

As at the reporting date, there are no financial assets that are either past due or impaired.

iii. Credit quality of financial assets The Fund invests in Islamic deposits with financial institutions licensed under the

Islamic Financial Services Act 2013. The following table analyses the licensed financial institutions by rating category:

short term islamic deposits

Percentage of total short term islamic deposits Percentage of nAV30.11.2017 30.11.2016 30.11.2017 30.11.2016

% % % %

ratingWR 100.0 32.4 13.5 7.8P1 - 67.6 - 16.4

100.0 100.0 13.5 24.2

c. Liquidity risk

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities that are to be settled by delivering cash or another financial asset. Exposure to liquidity risk arises because of the possibility that the Fund could be required to pay its liabilities or cancel its units earlier than expected. The Fund is exposed to cancellation of its units on a regular basis. Units sold to unit holders by the Manager are cancellable at the unit holders’ option based on the Fund’s NAV per unit at the time of cancellation calculated in accordance with the Deed.

The Islamic liquid assets comprise cash, short-term Islamic deposits with licensed financial institutions and other Shariah-compliant instruments, which are capable of being converted into cash within 7 days.



c. Liquidity risk (contd.)

The following table analyses the maturity profile of the Fund’s financial assets and financial liabilities in order to provide a complete view of the Fund’s contractual commitments and liquidity.

up to 1 yearnote 30.11.2017 30.11.2016

rm rm

AssetsFinancial assets at FVTPL 344,612,971 203,868,359 Short term Islamic deposits 53,535,513 65,005,917 Other assets 7,721,760 1,673,090

i. 405,870,244 270,547,366

LiabilitiesOther liabilities ii. 8,121,101 2,300,327

Equity iii. 397,684,485 268,189,411

Liquidity gap 64,658 57,628

i. financial assets

Analysis of financial assets at FVTPL into maturity groupings is based on the expected date on which these assets will be realised. The Fund’s investments in of listed Shariah-compliant equity securities, listed Shariah-compliant collective investment schemes, listed Shariah-compliant warrants and unlisted Shariah-compliant equity securities have been included in the “up to 1 year” category on the assumption that these are highly liquid Shariah-compliant investments which can be realised should all of the Fund’s unit holders’ equity be required to be redeemed. For other assets, the analysis into maturity groupings is based on the remaining period from the end of the reporting period to the contractual maturity date or if earlier, the expected date on which the assets will be realised.

ii. financial liabilities

The maturity grouping is based on the remaining period from the end of the reporting period to the contractual maturity date or if earlier, the date on which liabilities will be settled. When the counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which the Fund can be required to pay.

iii. equity

As the unit holders can request for redemption of their units, they have been categorised as having a maturity of “up to 1 year”.



d. Reclassification of Shariah status risk

The risk that the currently held Shariah-compliant securities in the portfolio of Shariah-compliant fund may be reclassified to be Shariah non-compliant upon review of the securities by the Shariah Advisory Council of the Securities Commission Malaysia (“SACSC”) performed twice yearly. If this occurs, the Manager will take the necessary steps to dispose of such securities.

There may be opportunity loss to the Fund due to the Fund not being allowed to retain the excess capital gains derived from the disposal of the Shariah non-compliant equities. The value of the Fund may also be adversely affected in the event of a disposal of Shariah non-compliant equities at a price lower than the investment cost.

e. regulatory reportings

It is the Manager’s responsibility to ensure full compliance of all requirements under the Guidelines on Unit Trust Funds issued by Securities Commission Malaysia. Any breach of any such requirement will be reported in the mandatory reporting to Securities Commission Malaysia on a monthly basis.

3. summAry Of siGnifiCAnt ACCOuntinG POLiCies

a. Basis of accounting

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 International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The accounting policies adopted are consistent with those of the previous financial period except for the adoption of the new and amended MFRS which became effective for the Fund on 1 June 2017. The adoption of the new and amended MFRS did not have any significant impact on the financial position or performance of the Fund.

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

b. standards, amendments and interpretation issued but not yet effective

As at the reporting date, the following Standards, Amendments and Interpretation Committee’s (“IC”) Interpretation that have been issued by MASB will be effective for the Fund in future periods. The Fund intends to adopt the relevant standards when they become effective.

description

effective for financial period beginning on or

after

Amendments to MFRS contained in the documents entitled “Annual improvements to MFRS Standards 2014 - 2016 Cycle” 1 January 2017

Amendments to MFRS 107: Disclosure Initiative 1 January 2017



b. standards, amendments and interpretation issued but not yet effective (contd.)

description

Effective for financial period beginning on

or after

Amendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017

Amendments to MFRS contained in the documents entitled “Annual improvements to MFRS Standards 2014 - 2016 Cycle” 1 January 2018

MFRS 9: Financial Instruments 1 January 2018MFRS 15: Revenue from Contracts with Customers 1 January 2018Clarifications to MFRS 15: Revenue from Contracts with

Customers 1 January 2018Amendments to MFRS 1: First-time Adoption of Malaysian

Financial Reporting Standards contained in the documents entitled “Annual Improvements to MFRS Standards 2014-2016 Cycle” 1 January 2018

Amendments to MFRS 2: Classification and Measurement of Shared-based Payment Transactions 1 January 2018

Amendments to MFRS 128: Investment in Associates and Joint Ventures contained in the documents entitled “Annual improvements to MFRS Standards 2014 - 2016 Cycle” 1 January 2018

Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts

Temporary exemption from MFRS 9 subject

to certain criteria being met for annual periods

beginning on or after 1 January 2018

Amendment to MFRS 140: Transfer of Property 1 January 2018Amendments to MFRS 140: Transfers of Investment

Property 1 January 2018IC Interpretation 22: Foreign Currency Transactions and

Advance Consideration 1 January 2018Amendments to MFRS contained in the documents

entitled “Annual improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019

Amendments to MFRS 3: Business Combinations contained in the documents entitled “Annual improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019

Amendments to MFRS 11: Joint Arrangements contained in the documents entitled “Annual improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019

Amendments to MFRS 112: Income Tax Consequences of Payments on Financial Instruments Classified as Equity contained in the documents entitled “Annual improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019



b. standards, amendments and interpretation issued but not yet effective (contd.)

description

effective for financial period beginning on or

after

Amendments to MFRS 123: Borrowing Costs Eligible for Capitalisation contained in the documents entitled “Annual improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019

MFRS 16: Leases 1 January 2019Amendments to MFRS 9: Prepayment Features with

Negative Compensation 1 January 2019Amendment to MFRS 128: Long-term interests in

Associates and Joint Ventures 1 January 2019IC Interpretation 23: Uncertainty Over Income Tax

Treatments 1 January 2019MFRS 17: Insurance Contracts 1 January 2021Amendments to MFRS 10 and MFRS 128: Sale or

Contribution of Assets between an Investor and its Associate or Joint Venture

To be announcedby MASB

The Fund will adopt the above pronouncements when they become effective in the respective financial periods. These pronouncements are not expected to have any significant impact to the financial statements of the Fund upon their initial application, other than MFRS 9.

MFRS 9 replaces MFRS 139 on the following requirements: classification and measurement of financial assets and financial liabilities as defined in MFRS 139, impairment methodology and hedge accounting. The Fund is in the process of making an assessment of the impact of this Standard.

c. financial assets

Shariah-compliant 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 instruments.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at FVTPL, directly attributable transaction costs.

The Fund determines the classification of its financial assets at initial recognition.


3. summAry Of siGnifiCAnt ACCOuntinG POLiCies (COntd.)

c. financial assets (contd.)

i. financial assets at fVtPL

Shariah-compliant financial assets are classified as financial assets at FVTPL if they are held for trading or are designated as such upon initial recognition.

Shariah-compliant financial assets held for trading of listed Shariah-compliant equity securities, listed Shariah-compliant collective investment schemes, listed Shariah-compliant warrants and unlisted Shariah-compliant equity securities acquired principally for the purpose of selling in the near term.

Shariah-compliant financial assets held for trading of listed Shariah-compliant equity securities, listed Shariah-compliant collective investment schemes, listed Shariah-compliant warrants and unlisted Shariah-compliant equity securities acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Changes in the fair value of those Shariah-compliant financial instruments are recorded in profit or loss.

Profit earned and dividend revenue elements of such instruments are recorded separately in “profit income” and “dividend income”, respectively.

ii. receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as receivables.

Subsequent to initial recognition, receivables are measured at amortised cost using the effective yield method. Gain or loss is recognised in profit or loss when the receivable is derecognised or impaired, and through the amortisation process.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received is recognised in profit or loss.

d. Impairment of financial assets

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.

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 rate of return. The impairment loss is recognised in profit or loss.



d. Impairment of financial assets (contd.)

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets, with the exception of receivables, where the carrying amount is reduced through the use of an allowance account. When a receivable becomes uncollectible, it is written off against the allowance account.

If, in a subsequent financial 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 assets does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

e. income

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.

Profit income is recognised using the effective yield method.

Dividend income is recognised on declared basis, when the right to receive the dividend is established.

The realised gain or loss on sale of Shariah-compliant investments is measured as the difference between the net disposal proceeds and the carrying amount of the Shariah-compliant investment.

f. Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include cash at bank and short term Islamic deposits with licensed financial institutions with insignificant risk of changes in value.

g. income tax

Income tax on the profit or loss for the financial period comprises current tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial period.

As no temporary differences have been identified, no deferred tax has been recognised.

h. unrealised reserves

Unrealised reserves represent the net gain or loss arising from carrying Shariah-compliant investments at their fair values at reporting date. This reserve is not distributable.



i. financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities 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. The Fund’s financial liabilities are classified as other financial liabilities. The Fund’s financial liabilities are recognised initially at fair value and subsequently measured at amortised cost using the effective yield method.

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.

j. unit holders’ contribution – nAV attributable to unit holders

The unit holders’ contribution to the Fund is classified as equity instruments.

Distribution equalisation represents the average amount of undistributed net income included in the creation or cancellation price of units. This amount is either refunded to unit holders by way of distribution and/or adjusted accordingly when units are released back to the Trustee.

k. functional and presentation currency

The financial statements of the Fund are measured using the currency of the primary economic environment in which the Fund operates (“the functional currency”). The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Fund’s functional currency.

l. distribution

Distributions are at the discretion of the Manager. A distribution to the Fund’s unit holders is accounted for as a deduction from retained earnings.

m. Significant accounting judgments and estimates

The preparation of financial statements requires the use of certain accounting estimates and exercise of judgment. Estimates and judgments are continually evaluated and are based on past experience, reasonable expectations of future events and other factors.

i. Critical judgments made in applying accounting policies

There are no major judgments made by the Manager in applying the Fund’s accounting policies.

ii. Key sources of estimation uncertainty

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 period.


4. finAnCiAL Assets At fVtPL

30.11.2017rm

30.11.2016rm

Financial assets held for trading, at FVTPL:Listed Shariah-compliant equity securities 337,781,347 193,596,543 Listed Shariah-compliant collective investment schemes 6,156,465 10,143,680 Listed Shariah-compliant warrants 538,367 128,136 Unlisted Shariah-compliant equity securities 136,792 -

344,612,971 203,868,359

1.6.2017 to30.11.2017

rm

1.6.2016 to30.11.2016

rm

Net gain/(loss) on financial assets at FVTPL comprised:Realised gain/(loss) on disposals 103,588 (1,025,527)Unrealised changes in fair values 14,216,395 (896,681)

14,319,983 (1,922,208)

Details of financial assets at FVTPL as at 30 November 2017:

QuantityAggregate

cost fair valuePercentage

of nAVrm rm %

Listed shariah-compliant equity securities

trading/servicesAWC Berhad 3,063,300 3,506,428 3,002,034 0.8Axiata Group Berhad 2,249,728 11,714,642 11,991,050 3.0Century Logistics

Holdings Berhad 1,007,500 1,334,902 1,027,650 0.3Chin Hin Group Berhad 2,519,500 3,295,985 2,922,620 0.7Dialog Group Berhad 4,267,276 7,168,781 10,284,135 2.6PESTECH International

Berhad 3,339,264 3,058,089 5,609,964 1.4Sime Darby Berhad 4,653,800 10,173,455 10,889,892 2.7Sunway Berhad 4,900,092 7,563,374 7,938,149 2.0Telekom Malaysia Berhad 924,750 6,064,932 5,576,243 1.4Tenaga Nasional Berhad 1,062,100 14,902,650 16,398,824 4.1TIME dotCom Berhad 980,600 7,846,338 8,756,758 2.2Yinson Holdings Berhad 2,386,200 8,653,020 9,091,422 2.3

85,282,596 93,488,741 23.5


4. finAnCiAL Assets At fVtPL (COntd.)

Details of financial assets at FVTPL as at 30 November 2017: (contd.)

QuantityAggregate


of nAVrm rm %

Listed shariah-compliant equity securities (contd.)

ConstructionsAhmad Zaki Resources

Berhad 3,551,000 3,706,645 3,586,510 0.9Econpile Holdings Berhad 812,600 1,041,128 2,551,564 0.6Gabungan AQRS Berhad 5,284,600 8,778,190 10,463,508 2.6Gamuda Berhad 324,100 1,613,705 1,575,126 0.4IJM Corporation Berhad 1,963,800 6,610,671 6,048,504 1.5Kerjaya Prospek Group

Berhad 1,281,200 3,155,959 5,150,424 1.3Malaysian Resources

Corporation Berhad 4,005,800 4,449,504 4,246,148 1.1ML Global Berhad 5,752,800 6,773,876 9,894,816 2.5Muhibbah Engineering

(M) Berhad 1,565,700 3,617,040 4,321,332 1.1Sunway Construction

Group Berhad 831,700 1,905,592 1,996,080 0.5TRC Synergy Berhad 7,300,200 5,960,284 4,672,128 1.2WCT Holdings Berhad 1,920,000 3,709,923 2,918,400 0.7

51,322,517 57,424,540 14.4

industrial productsGe-Shen Corporation

Berhad 2,019,600 4,350,108 3,534,300 0.9 Hartalega Holdings

Berhad 789,300 5,415,990 7,545,708 1.9 Pecca Group Berhad 2,267,800 3,582,841 3,288,310 0.8 P.I.E Industrial Berhad 2,335,200 5,441,869 4,787,160 1.2 Press Metal Aluminium

Holdings Berhad (formerly known as Press Metal Berhad) 1,689,100 6,001,636 8,766,429 2.2

SCGM Berhad 1,035,833 2,203,907 2,776,032 0.7 Scientex Berhad 283,600 2,212,080 2,427,616 0.6 SKP Resources Bhd 3,893,900 5,146,491 7,904,617 2.0 SLP Resources Berhad 2,444,880 3,902,038 4,400,784 1.1 Thong Guan Industries

Berhad 993,900 4,265,789 4,174,380 1.1 V. S. Industry Berhad 2,413,900 4,969,646 7,579,646 1.9

47,492,395 57,184,982 14.4




QuantityAggregate


of nAVrm rm %

Listed shariah-compliant equity securities (contd.)

Consumer productsAjinomoto (Malaysia)

Berhad 79,700 1,810,391 1,498,360 0.4CCK Consolidated

Holdings Berhad 6,794,400 6,615,817 8,017,392 2.0Fraser & Neave Holdings

Bhd 59,700 1,530,303 1,531,902 0.4Lay Hong Berhad 5,648,000 5,252,560 5,619,760 1.4Nestlé (M) Berhad 110,600 7,816,692 10,657,416 2.7Power Root Berhad 769,000 1,971,461 1,507,240 0.4QL Resources Berhad 1,019,525 3,058,030 4,200,443 1.0Salutica Berhad 2,811,700 4,160,397 3,880,146 1.0

32,215,651 36,912,659 9.3

PropertiesAmverton Berhad

(formerly known as A & M Realty Berhad) 1,609,300 2,784,089 2,253,020 0.6

LBS Bina Group Berhad - ordinary shares 4,500,200 8,780,706 10,080,448 2.5

LBS Bina Group Berhad - preference shares 817,580 899,338 899,338 0.2

Malton Berhad 2,126,900 2,903,479 2,031,190 0.5Matrix Concepts Holdings

Berhad 423,228 807,130 922,637 0.2MCT Berhad 490,000 624,393 384,650 0.1Paramount Corporation

Berhad 3,819,700 6,996,104 6,684,475 1.7S P Setia Berhad 1,221,365 4,354,927 4,213,709 1.1Sentoria Group Berhad 2,136,300 1,559,499 1,463,365 0.4Sime Darby Property

Berhad 2,040,300 3,159,923 2,427,957 0.6Tambun Indah Land

Berhad 2,670,900 4,567,289 2,724,318 0.737,436,877 34,085,107 8.6




QuantityAggregate


of nAVrm rm %

Listed shariah-compliant equity securities

PlantationsBatu Kawan Berhad 235,600 4,310,327 4,655,456 1.2Genting Plantations

Berhad 287,900 3,054,006 3,017,192 0.7IOI Corporation Berhad 891,300 3,986,114 3,975,198 1.0Sarawak Oil Palms

Berhad 588,942 2,640,716 2,461,778 0.6Sime Darby Plantation

Berhad 1,906,600 10,985,321 9,552,066 2.424,976,484 23,661,690 5.9

financeBIMB Holdings Berhad 2,410,700 10,353,108 10,004,405 2.5Syarikat Takaful Malaysia

Berhad 2,195,700 5,845,943 7,619,079 1.916,199,051 17,623,484 4.4

technologyGlobetronics Technology

Bhd. 1,295,700 7,618,512 8,098,125 2.0Inari Amertron Berhad 2,062,400 3,355,534 6,558,432 1.7Notion VTec Berhad 1,312,500 1,530,553 643,125 0.2ViTrox Corporation

Berhad 384,700 606,374 2,100,462 0.513,110,973 17,400,144 4.4

total listed shariah-compliant equity securities 308,036,544 337,781,347 84.9

Listed shariah-compliant collective investment schemes

Axis Real Estate Investment Trust 4,216,757 6,634,299 6,156,465 1.6

total listed shariah-compliant collective investment schemes 6,634,299 6,156,465 1.6




QuantityAggregate


of nAVrm rm %

Listed shariah-compliant warrants

Malaysian Resources Corporation Berhad-WB 400,581 - 136,198 -

Matrix Concepts Holdings Berhad 225,853 - 75,661 -

SCGM Berhad 91,133 - 29,618 -Sunway Berhad 511,880 - 296,890 0.1total listed shariah-

compliant warrants - 538,367 0.1

unlisted shariah-compliant equity securities

PropertiesS P Setia Berhad -

ordinary shares (rights) 162,848 - 136,792 -S P Setia Berhad -

preference shares (rights) 488,546 - - -

total unlisted shariah-compliant equity securities - 136,792 -

Total financial assets at fVtPL 314,670,843 344,612,971 86.6

unrealised gain on financial assets at fVtPL 29,942,128


5. mAnAGer’s fee

The Manager’s fee is calculated on a daily basis at a rate not exceeding 1.50% per annum of the NAV of the Fund as provided under Clause 13.1 of the Deed.

The Manager is currently charging Manager’s fee of 1.50% per annum of the NAV of the Fund (financial period from 1 June 2016 to 30 November 2016: 1.50% per annum).

6. trustee’s fee

Pursuant to the Third Master Supplemental Deed dated 25 July 2014, the Trustee’s fee is calculated at a rate not exceeding 0.05% per annum of the NAV of the Fund effective from 1 August 2014.

The Trustee’s fee is currently calculated at 0.05% per annum (financial period from 1 June 2016 to 30 November 2016: 0.05% per annum) of the NAV of the Fund.

7. inCOme tAX

Income tax is calculated at the Malaysian statutory tax rate of 24% of the estimated assessable income for the current and previous financial periods.

Income tax is calculated on investment income less partial deduction for permitted expenses as provided for under Section 63B of the Income Tax Act, 1967.

A reconciliation of income tax expense applicable to net income/(loss) before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Fund is as follows:

1.6.2017 to 30.11.2017

1.6.2016 to 30.11.2016

rm rm

Net income/(loss) before tax 14,635,107 (1,197,067)

Tax at Malaysian statutory tax rate of 24% (financial period from 1 June 2016 to 30 November 2016: 24%) 3,512,426 (287,296)

Tax effect of:Income not subject to tax (4,672,615) (885,778)Loss not deductible for tax purposes - 461,330Expenses not deductible for tax purposes 473,728 239,160Restriction on tax deductible expenses for unit trust

fund 686,461 472,584Income tax for the financial period - -

8. shOrt term isLAmiC dePOsits

Short term Islamic deposits are held with licensed financial institutions in Malaysia at the prevailing profit rates.


9. Other reCeiVABLes

30.11.2017 30.11.2016rm rm

Amount due from licensed financial institutions 4,754,306 634,323 Dividend receivable 403,877 239,142 Profit receivable from short term Islamic deposits 11,791 37,125

5,169,974 910,590

10. Other PAyABLes

30.11.2017 30.11.2016rm rm

Amount due to licensed financial institutions 7,846,083 2,289,326 Accrual for auditors’ remuneration 4,710 4,114 Accrual for tax agent’s fees 6,005 9,505 Provision for printing and other expenses 63,035 53,101

7,919,833 2,356,046

11. net Asset VALue AttriButABLe tO unit hOLders

NAV attributed to unit holders is represented by:

note 30.11.2017 30.11.2016rm rm

Unit holders’ contribution (a) 364,464,024 269,675,948 Retained earning/(Accumulated loss):

Realised reserves 3,278,333 (300,386)Unrealised reserves 29,942,128 (1,186,151)

33,220,461 (1,486,537)

397,684,485 268,189,411

(a) unit holders’ contribution

1.6.2017 to 30.11.2017 1.6.2016 to 30.11.2016no. of units rm no. of units rm

At beginning of the financial period 340,583,836 341,577,232 243,014,965 240,725,559

Add: Creation of units 43,963,952 47,181,797 41,223,794 41,439,087

Less: Cancellation of units (22,636,162) (24,346,083) (12,536,423) (12,558,397)

Distribution equalisation - 51,078 - 69,699

At end of the financial period 361,911,626 364,464,024 271,702,336 269,675,948


11. net Asset VALue AttriButABLe tO unit hOLders (COntd.)

(a) unit holders’ contribution (contd.)

The number of units legally or beneficially held by the Manager, Kenanga Investors Berhad and parties related to the Manager as at 30 November 2017 were nil (30 November 2016: nil).

12. net Asset VALue Per unit

In line with the adoption of MFRS 139, financial assets at FVTPL have been valued at the bid prices at the close of business. In accordance with the Deed, the calculation of NAV attributable to unit holders per unit for the creation and cancellation of units is computed based on financial assets at FVTPL valued at the last done market price.

A reconciliation of NAV attributable to unit holders for creation/cancellation of units and the NAV attributable to unit holders per the financial statements is as follows:

30.11.2017 30.11.2016rm rm/unit rm rm/unit

NAV attributable to unit holders for creation/cancellation of units 399,882,813 1.1049 269,031,723 0.9902

Effects of adopting bid prices as fair value (2,198,328) (0.0061) (842,312) (0.0031)

NAV attributable to unit holders per statement of financial position 397,684,485 1.0988 268,189,411 0.9871

13. shAriAh infOrmAtiOn Of the fund

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

a. Equity securities listed on Bursa Malaysia Securities Berhad which have been classified as Shariah-compliant by the SACSC for the financial period under review;

b. Investment in collective investment schemes listed on Bursa Malaysia Securities Berhad which was verified as Shariah-compliant by the Shariah Adviser; and

c. Liquid assets in the local market, which have been placed in Shariah-compliant investments and/or instruments.

14. POrtfOLiO turnOVer rAtiO (“Ptr”)

PTR for the financial period from 1 June 2017 to 30 November 2017 is 0.52 times (financial period from 1 June 2016 to 30 November 2016: 0.25 times).

PTR is the ratio of average sum of acquisitions and disposals of Shariah-compliant investments of the Fund for the financial period to the average NAV of the Fund, calculated on a daily basis.


15. mAnAGement eXPense rAtiO (“mer”)

MER for the financial period from 1 June 2017 to 30 November 2017 is 1.63% (financial period from 1 June 2016 to 30 November 2016: 1.62%).

MER is the ratio of total fees and recovered expenses of the Fund expressed as a percentage of the Fund’s average NAV, calculated on a daily basis.

16. trAnsACtiOns with LiCensed finAnCiAL institutiOns

transaction value

Percentage of total

Brokerage, stamp duty

and clearing fee

Percentage of total

rm % rm %

Kenanga Investment Bank Berhad* 90,861,064 23.2 218,326 21.4

Affin Hwang Investment Bank Berhad 68,822,181 17.6 182,907 18.0

UOB Kay Hian Securities (M) Sdn Bhd 65,132,867 16.6 163,726 16.1

KAF-Seagroatt & Campbell Securities Sdn Bhd 38,091,641 9.7 98,777 9.7

Maybank Investment Bank Berhad 33,514,526 8.6 86,877 8.5

Public Investment Bank Berhad 24,442,356 6.2 64,576 6.3

CIMB Investment Bank Berhad 23,076,548 5.9 79,117 7.8

RHB Investment Bank Berhad 15,284,821 3.9 43,811 4.3

Alliance Investment Bank Berhad 14,426,677 3.7 39,497 3.9

Hong Leong Investment Bank Berhad 12,343,254 3.1 31,721 3.1

Others 5,930,433 1.5 8,854 0.9 391,926,368 100.0 1,018,189 100.0

* Kenanga Investment Bank Berhad is a related party of Kenanga Investors Berhad.

The above transaction values are in respect of listed Shariah-compliant equity securities, listed Shariah-compliant collective investment schemes and listed Shariah-compliant warrants.

The directors of the Manager are of the opinion that the transactions with the related party have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties. The Manager is of the opinion that the above dealings have been transacted on an arm’s length basis.


17. seGmentAL rePOrtinG

a. Business segments

In accordance with the objective of the Fund, the Fund can invest 75% to 95% in listed Shariah-compliant investment securities. The following table provides an analysis of the Fund’s revenue, results, assets and liabilities by business segments:

Listed shariah-

compliant investment

securities

unlisted shariah-


securities

Other shariah-

compliant investments total

rm rm rm rm

1.6.2017 to 30.11.2017

revenueSegment income 18,639,875 - 829,353Segment expenses (1,645,525) - -Net segment

income representing segment results 16,994,350 - 829,353 17,823,703

Unallocated expenditure (3,188,596)

Income before tax 14,635,107Income tax -Net income after

tax 14,635,107


FVTPL 344,476,179 136,792 -Short term Islamic

deposits - - 53,535,513Other segment

assets 5,158,183 - 11,791Total segment

assets 349,634,362 136,792 53,547,304 403,318,458Unallocated assets 2,560,878

405,879,336

LiabilitiesSegment liabilities 7,846,083 - - 7,846,083Unallocated

liabilities 348,7688,194,851


17. seGmentAL rePOrtinG (COntd.)

a. Business segments (contd.)

Listed shariah-


securities

unlisted shariah-


securities

Other shariah-

compliant investments total

rm rm rm rm

1.6.2016 to 30.11.2016

revenueSegment income 769,202 - 999,330Segment expenses (787,312) - -Net segment

income representing segment results (18,110) - 999,330 981,220

Unallocated expenditure (2,178,287)

Income before tax (1,197,067)Income tax -Net income after

tax (1,197,067)


FVTPL 203,868,359 - -Short term Islamic

deposits - - 65,005,917Other segment

assets 873,465 - 37,125Total segment

assets 204,741,824 - 65,043,042 269,784,866Unallocated assets 771,592

270,556,458

LiabilitiesSegment liabilities 2,289,326 - - 2,289,326Unallocated

liabilities 77,7212,367,047

b. Geographical segments

As all of the Fund’s investments are located in Malaysia, disclosure by geographical segments is not relevant.


18. finAnCiAL instruments

a. Classification of financial instruments

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at either fair value or at amortised cost based on their respective classification. 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 financial liabilities of the Fund in the statement of financial position by the class of financial instruments to which they are assigned and therefore by the measurement basis.

financial assets at

fVtPL receivablesfinancial liabilities total

rm rm rm rm

30.11.2017AssetsListed Shariah-

compliant equity securities 337,781,347 - - 337,781,347

Listed Shariah-compliant collective investment scheme 6,156,465 - - 6,156,465

Listed Shariah-compliant warrants 538,367 - - 538,367

Unlisted Shariah-compliant equity securities 136,792 136,792

Short term Islamic deposits - 53,535,513 - 53,535,513

Other receivables - 5,169,974 - 5,169,974Cash at bank - 2,551,786 - 2,551,786

344,612,971 61,257,273 - 405,870,244

LiabilitiesAmount due to

Manager - - 258,734 258,734Amount due to

Trustee - - 16,284 16,284Other payables - - 7,846,083 7,846,083

- - 8,121,101 8,121,101


18. finAnCiAL instruments (COntd.)

a. Classification of financial instruments (contd.)

financial assets at

fVtPL receivablesfinancial liabilities total

rm rm rm rm

30.11.2016AssetsListed Shariah-




Short term Islamic deposits - 65,005,917 - 65,005,917

Amount due from Manager - 614,871 - 614,871

Other receivables - 910,590 - 910,590Cash at bank - 147,629 - 147,629

203,868,359 66,679,007 - 270,547,366

LiabilitiesAmount due to

Trustee - - 11,001 11,001Other payables - - 2,289,326 2,289,326

- - 2,300,327 2,300,327

b. financial instruments that are carried at fair value

The Fund’s financial assets at FVTPL are carried at fair value. The fair values of these financial assets were determined using prices in active markets.

The following table shows the fair value measurements by level of the fair value measurement hierarchy:


18. finAnCiAL instruments (COntd.)

b. financial instruments that are carried at fair value (contd.)

Level 1 Level 2 Level 3 totalrm rm rm rm

investments:30.11.2017Listed Shariah-




Unlisted Shariah-compliant equity securities - 136,792 - 136,792

30.11.2016Listed Shariah-


Listed Shariah-compliant collective investment schemes 10,143,680 - - 10,143,680


Level 1: Listed prices in active marketLevel 2: Model with all significant inputs which are observable market dataLevel 3: Model with inputs not based on observable market data

The fair values of listed Shariah-compliant equity securities, listed Shariah-compliant

collective investment schemes and listed Shariah-compliant warrants are determined by reference to Bursa Malaysia Securities Berhad’s bid prices at reporting date. The fair values of unlisted Shariah-compliant equity securities is based on its reference price minus subscription price at reporting date.

c. financial instruments not carried at fair value and which their carrying amounts are reasonable approximations of fair value

The carrying amounts of the Fund’s other financial assets and financial liabilities are not carried at fair value but approximate fair values due to the relatively short term maturity of these financial instruments.


19. CAPitAL mAnAGement

The capital of the Fund can vary depending on the demand for creation and cancellation of units to the Fund.

The Fund’s objectives for managing capital are:

a. To invest in Shariah-compliant investments meeting the description, risk exposure and expected return indicated in its prospectus;

b. To maintain sufficient liquidity to meet the expenses of the Fund, and to meet cancellation requests as they arise; and

c. To maintain sufficient fund size to make the operations of the Fund cost-efficient.

No changes were made to the capital management objectives, policies or processes during the current and previous financial periods.

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investor services CenterToll Free Line: 1 800 88 3737Fax: +603 2172 3133Email: [email protected]

Head Office, Kuala LumpurLevel 14, Kenanga Tower, 237 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3000 Fax: 03-2172 3080

Documents

KenAnGA syAriAh GrOwth fund - kenangainvestors.com.my · KenAnGA syAriAh GrOwth fund Contents Page Corporate directory ii - iii Directory of Manager’s Offices iv fund information