KenAnGA SyArIAh GrOwth fund · 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

InterIm rePOrt

For the Financial Period From 1 June 2018 to 30 November 2018

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 - 45

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 2888Fax: 03-2172 2999

Business OfficeLevel 14, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3000Fax: 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)Ismitz Matthew De Alwis

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

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

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 Suite 13.03, 13th FloorMenara Tan & Tan 207 Jalan Tun Razak 50400 Kuala Lumpur.

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

KuantanGround Floor ShopNo. B8, 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 KinabaluLevel 8, Wisma Great EasternNo. 68, Jalan Gaya, 88000 Kota Kinabalu, SabahTel: 088-203 063 Fax: 088-203 062

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

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 Shariah-compliant 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 unit holders 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 2018

Size of holdingsno. of

unit holdersno. of

units held5,000 and below 4,908 12,917,0675,001 - 10,000 3,611 26,874,54110,001 - 50,000 6,872 156,660,80250,001 - 500,000 1,873 199,303,830500,001 and above 35 70,275,403total 17,299 466,031,643

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 boasts a return of 329.56% since inception; hence it has 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 (29/1/2002 - 30/11/2018)Kenanga Syariah Growth fund vs ftSe-Bursa malaysia emas Shariah Index

Source: Novagni Analytics & Advisory

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

For the financial period 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.

2.4 the fund’s asset allocation as at 30 november 2018 and comparison with the previous financial period

Asset 30 nov 2018 30 nov 2017Listed Shariah-compliant investment securities 83.0% 86.0%Listed Shariah non-compliant equity security (Note 14(a)) 0.2% -Unlisted Shariah-compliant investment securities - -Short term Islamic deposits and cash 16.8% 14.0%

reason for the differences in asset allocation

The fund invested level declined to 83.2% due to the fund manager taking a slightly more defensive stance.

Benchmark

Fund Category/Type

Equity (Islamic) / Growth

Launch Date

FUND OBJECTIVE

External Investment Manager / Designated Fund Manager

Syarifah Hidayatul Akmal

HISTORICAL FUND PRICE *

Annual Management Fee

1.50% p.a.

Annual Trustee Fee

0.05% p.a.

Redemption Charge

2.35

-4.17

13.29

Aims to provide unit holders with long-term capital growth by

investing principally in equities that comply with Shariah

requirements.

CUMULATIVE FUND PERFORMANCE (%) #

6 months

CALENDAR YEAR FUND PERFORMANCE (%) #

Period

1 month

Fund

-1.34 -1.18

Period

10.722017

Fund

12.96

Benchmark

1 year

3 years -6.98

-8.64

-9.68

-0.91

7.24

329.56

-4.46

-9.96

2016

2015

-2.29

9.49

NAV PER UNIT *

FUND PERFORMANCE (%)

Kenanga Syariah Growth FundDecember 2018

2018 The Edge | Thomson Reuters Lipper Fund Awards

Equity Malaysia - Malaysia Islamic, 10 years

124.54

2014

2013

Sales Charge

Max 5.50% -6.14

-1.20

20.51

FUND SIZE *

#Source : Lipper, 30 November 2018

5 years

Since Launch

-2.66

29 January 2002

Trustee

CIMB Islamic Trustee Berhad

Benchmark

FTSE Bursa Malaysia EMAS Shariah Index

Lipper Analytics15 Nov 2018

3-yearFund Volatility

Moderate

-50

0

50

100

150

200

250

300

350

400

450

Jan

02

Jun

02

De

c 0

2

Jun

03

De

c 0

3

Jun

04

De

c 0

4

Jun

05

De

c 0

5

Jun

06

De

c 0

6

Jun

07

De

c 0

7

Jun

08

De

c 0

8

Jun

09

De

c 0

9

Jun

10

De

c 1

0

Jun

11

De

c 1

1

Jun

12

De

c 1

2

Jun

13

De

c 1

3

Jun

14

De

c 1

4

Jun

15

De

c 1

5

Jun

16

De

c 1

6

Jun

17

De

c 1

7

Jun

18

No

v 1

8

% Cumulative Return, Launch to 30/11/2018

Kenanga Syariah Growth : 329.56 FTSE Bursa Malaysia Emas Shariah Index : 124.54

Source: Novagni Analytics and Advisory

1

2

3

4

5

TENAGA NASIONAL BHD

PETRONAS CHEMICALS GROUP BHD

AXIATA GROUP BHD

TOP GLOVE CORPORATION BHD

YINSON HOLDINGS BHD

8.02%

6.00%

5.36%

3.73%

3.58%

10.11 sen

10.50 sen

ASSET ALLOCATION (% NAV) *

DISTRIBUTION HISTORY *TOP EQUITY HOLDINGS (% NAV) *

-

-

8.65%

5.83%

Based on the fund’s portfolio returns as at 15 November 2018, the Volatility Factor (VF) for this fund is 7.59 and is classified as “Moderate”. (Source: Lipper). “Moderate”

includes funds with VF that are above 6.615 and less than or equal to 8.710 (source: Lipper). The VF means there is a possibility for the fund in generating an upside return or

downside return around this VF. The Volatility Class (VC) is assigned by Lipper based on quintile ranks of VF for qualified funds. VF is subject to monthly revision and VC will

be revised every six months. The fund’s portfolio may have changed since this date and there is no guarantee that the fund will continue to have the same VF or VC in the

future. Presently, only funds launched in the market for at least 36 months will display the VF and its VC. The Master Prospectus dated 30 June 2017 and the Supplemental

Prospectus (if any), its Product Highlights Sheets (“PHS”) or Supplemental Disclosure Document (“SDD”) (if any) have been registered with the Securities Commission

Malaysia, who takes no responsibility for its contents. A copy of the Master Prospectus, Supplemental Prospectus (if any), SDD (if any) and the PHS are obtainable at our

offices. Application for Units can only be made on receipt of application form referred to in and accompanying the Master Prospectus and/or Supplemental Prospectus (if any),

SDD (if any) and PHS. Investors are advised to read and understand the Master Prospectus, its PHS and any other relevant product disclosure documents involved before

investing. Investors are also advised to consider the fees and charges before investing. Unit prices and distributions may go down as well as up. Where a unit split/distribution

is declared, investors are advised that following the issue of additional units/distribution, the NAV per unit will be reduced from pre-unit split NAV/cum-distribution NAV to post-

unit split NAV/ex-distribution NAV. Where a unit split is declared, investors should note that the value of their investment in Malaysian Ringgit will remain unchanged after the

distribution of the additional units. A Fund’s track record does not guarantee its future performance. Investors are advised to read and understand the contents of the unit trust

loan financing risk disclosure statement before deciding to borrow to purchase units.“Cooling-Off Period” or “Cooling-Off Right” is not applicable to EPF Member Investment

26-Feb-15

28-May-14

RM Yield (%)

* Source: Kenanga Investors Berhad, 30 November 2018

-9.31%

Date

Gross Distribution

Unit Split

7.50 sen

16-May-16

SECTOR ALLOCATION (% NAV) *

HISTORICAL FUND PRICE *Redemption Charge

Nil RM 465.07 million

4-May-12

11-Mar-03

RM 3.0262

RM 0.8124

Highest

LowestAll fees and charges payable to the Manager and the Trustee are

subject to the goods and services tax /sales and services tax/other taxes

of similar nature as may be imposed by the government or other

authorities from time to time.

Since Inception Date

NAV PER UNIT *

RM 0.9979

FUND SIZE *

86.30%

84.30%

84.00%

13.70%

15.70%

16.00%

September

October

November

Liquidity Equity

29.5%

21.7%

16.0%

7.9%

6.4%

5.8%

5.5%

4.2%

1.0%

0.9%

1.1%

Trading and Services

Industrial Products

Short Term Islamic Deposits and Cash

Consumer Products

Technology

Properties

Construction

Finance

Infrastructure

Plantations

Others

loan financing risk disclosure statement before deciding to borrow to purchase units.“Cooling-Off Period” or “Cooling-Off Right” is not applicable to EPF Member Investment

Scheme (EPF MIS). Kenanga Investors Berhad is committed to preventing Conflict of Interest between its various businesses and activities and between its

clients/directors/shareholders and employees by having in place procedures and measures for identifying and properly managing any apparent, potential and perceived Conflict

of Interest by making disclosures to Clients, where appropriate. The Manager wishes to highlight the specific risks of the Fund are specific stock risk and reclassification of

Shariah status risk.


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 -2.66%ftSe-Bursa malaysia emas Shariah Index (fBmS) -4.46%

Source: Lipper

For the financial period under review, the Fund outperformed the FBMS benchmark by 1.8% mainly due to Shariah-compliant security selection.

2.6 review of the market

market review

The FBMS started the month positive during the first week of June. However, the positive momentum failed to sustain as foreigners continued to sell the market. The initial decline was dragged by finance related stocks which brought the index lower on 11 June; bucking regional trend which closed in the green on optimism that the U.S-North Korea summit in Singapore may lead to the denuclearization of the Korean peninsula. The downtrend for the index continued, in line with regional markets on trade-war fears after Donald Trump threatened to have additional tariffs on another USD200 billion of Chinese imports.

Despite concerns over elevated trade tensions, a strong round of US corporate earnings have helped pacify market jitters and lifted US stock indices in July before ending positively in August led by solid US corporate earnings and continued to hit a new high in September.

October was a brutal month for equity markets. Equities tumbled amidst escalated US-China trade tension, rising treasury yields, disappointment over apple suppliers’ profits and UK’s introduction of digital tax. The International Monetary Fund (IMF) cut 2018/19 global growth to 3.7% (previously 3.9%), the first downgrade since July 2016. IMF highlighted that risks to global outlook have risen due to the trade tensions and sharper interest rate hikes. November ended with mixed performances across the globe. While US equity markets recorded monthly gains with Dow Jones up by 1.7% month-on-month (MoM), European markets were generally negative. Investors were generally cautious over Brexit-led turmoil, falling oil prices and the uncertain outcome between Trump and Xi’s trade talk in G20 meeting.

market Outlook

Market could remain volatile in December with ongoing news-flow on US-China trade wars, and statements from the Federal Reserve. Beijing and China now has 90 days to negotiate, after which US could go ahead with 25% tariff increase if both sides failed to reach an agreement. Expectation for further hikes next year has receded following the Powell’s dovish statement. Federal Open Market Committee (FOMC) will meet on 18 & 19 December 2018 which may lead to last rate hike for the year.

Another key to watch is outlook of oil price. All eyes will be on Organisation of Petroleum Exporting Countries (OPEC) meeting which is scheduled on 6 December. Details have yet to be disclosed but market is expecting a production cut of 1 million-1.4 million bpd. Russia had earlier expressed its interest to join Saudi in curbing production output.

Strategy

We remain defensive overall, while focusing on Shariah-compliant security picking for outperformance. We continue to focus on Shariah-compliant securities with sustained earnings growth, strong balance sheet and consistent dividend payment. These include exporters like technolgy, EMS and rubber glove players (beneficiary of weak Ringgit), Shariah-compliant securities related to domestic consumption and selective value picks which are sold down excessively.


2.7 distribution

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

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

2.11 Cross trade

During the financial period under review, no cross-trade transaction was undertaken by investment manager for the Fund.

2.12 rebates & Soft commissions

It is the policy of the Manager to credit any rebates received into the account of the Fund. Any soft commissions received by investment manager on behalf of the Fund are in the form of research and advisory services that assist in the decision making process relating to the investment of the Fund which are of demonstrable benefit to unit holders of the Fund. For the financial period under review, the Manager has received soft commissions from the stockbrokers.


3. fund PerfOrmAnCe

3.1 Details of portfolio composition of the Fund for the financial period as at 30 November 2018 against the last three financial years as at 31 May are as follows:

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

As at fy fy fy30.11.2018 2018 2017 2016

% % % %

Trading/Services 29.4 26.1 20.5 23.8 Industrial products 21.4 14.0 12.7 12.4 Consumer products 7.8 12.4 4.9 4.1 Technology 6.3 4.6 3.5 2.1 Properties 5.6 4.4 8.7 5.7 Constructions 5.4 8.9 13.7 8.0 Finance 4.2 4.2 4.1 4.1 Infrastructure 1.0 - 1.6 4.2 Plantations 0.8 2.3 2.6 5.3 Islamic Real Estate

Investment Trust 0.8 0.9 3.8 4.6 Shariah-compliant

warrants 0.3 0.3 - 0.1 Listed Shariah non-

compliant equity security (Note 14 (a)) 0.2 0.3 - -

Islamic deposits and cash 16.8 21.6 23.9 25.6

100.0 100.0 100.0 100.0

Note: The above mentioned percentages are based on total Shariah-compliant investment 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 2018 against the last three financial years ended 31 May are as follows:

Period from 1.6.2018 to30.11.2018

fy 2018

fy 2017

fy2016

Net asset value (“NAV”) (RM Million) 465.07* 421.03 361.64 241.24

Units in circulation (Million) 466.03 410.67 340.58 243.01 NAV per unit (RM) 0.9979* 1.0252 1.0618 0.9927 Highest NAV per unit (RM) 1.0888 1.1678 1.0802 1.1285 Lowest NAV per unit (RM) 0.9905 1.0217 0.9868 0.9851 Total return (%) -2.66 -3.45 6.95 -0.47- Capital growth (%) -2.66 -3.45 6.95 -9.74- Income growth (%) - - - 9.27 Gross distribution per unit (sen) - - - 10.11 Net distribution per unit (sen) - - - 10.11 Management expense ratio

(“MER”) (%)1 1.57 1.70 1.69 1.70 Portfolio turnover ratio (“PTR”)

(times)2 0.37 1.05 0.48 0.39

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 the previous financial year mainly due to lower recorved expenses incured during the financial period under review.

2. PTR for the financial period under review is lower due to shorter period under review.

* Based on bid price fair valuation method on all Shariah-compliant investments held by the Fund as at 30 November 2018, the NAV and NAV per unit would be RM463.31 million and RM0.9942 respectively. (As disclosed under Note 13 of the financial statements)”


3.3 Average total return of the fund

1 year30 nov 17 - 30 nov 18

3 years30 nov 15 - 30 nov 18

5 years30 nov 13 - 30 nov 18

Kenanga Syariah Growth fund -9.68% -0.02% 1.75%ftSe-Bursa malaysia emas Shariah Index (fBmS) -9.96% -1.99% -1.37%

Source: Lipper

3.4 Annual total return of the fund

Period under review

31 may 18 - 30 nov

18

1 year31 may 17 - 31 may

18

1 year31 may 16 - 31 nov

17


16


15

Period from

31 dec 12 - 31 may

14Kenanga Syariah Growth fund -2.66% -3.45% 6.96% -0.47% -1.30% 28.72%ftSe-Bursa malaysia emas Shariah Index (fBmS) -4.46% -4.91% 7.39% -5.20% -4.26% 14.02%

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 for 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 form 1 June 2018 to 30 November 2018.

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 of units of 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

15 January 2019


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 ended 30 November 2018.

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

For and on behalf of the Shariah AdviserIBFIM

Nazmi Ashraf Bin Mohd NazimConsultant (Shariah)/Designated Person Responsible for Shariah Advisory

Kuala Lumpur, Malaysia

15 January 2019


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 2018 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 2018 to 30 November 2018 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 2018 and of its financial performance and cash flows for the financial period from 1 June 2018 to 30 November 2018 and comply with the requirements of the Deed.

For and on behalf of the Manager KENANGA INVESTORS BERHAD

ISMITZ MATTHEW DE ALWIS Executive Director/Chief Executive Officer

Kuala Lumpur, Malaysia

15 January 2019


7. fInAnCIAL StAtementS

7.1 StAtement Of COmPrehenSIVe InCOme fOr the fInAnCIAL PerIOd frOm 1 June 2018 tO 30 nOVemBer 2018 (unaudited)

note1.6.2018 to 30.11.2018

1.6.2017 to 30.11.2017

rm rm

InVeStment InCOme

Dividend income 4,856,263 4,319,892 Profit income 1,418,717 829,353 Net (loss)/gain from Shariah-compliant

investments:- Financial assets at fair value through profit or

loss (“FVTPL”) 4 (14,880,717) 14,319,983 (8,605,737) 19,469,228

eXPenSeS

Manager’s fee 5 3,453,586 2,810,427 Trustee’s fee 6 115,120 93,681 Auditors’ remuneration 6,016 6,710 Tax agent’s fee 2,006 2,005 Administration expenses 62,002 275,773 Brokerage and other transaction costs 1,606,229 1,645,525

5,244,959 4,834,121

net (LOSS)/InCOme BefOre tAX (13,850,696) 14,635,107

Income tax 7 - -

net (LOSS)/InCOme After tAX, rePreSentInG tOtAL COmPrehenSIVe (LOSS)/InCOme fOr the fInAnCIAL PerIOd (13,850,696) 14,635,107

Net (loss)/income after tax is made up as follows:Realised (loss)/gain (11,204,515) 418,712 Unrealised (loss)/gain 4 (2,646,181) 14,216,395

(13,850,696) 14,635,107

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


7.2 StAtement Of CASh fLOwS fOr the fInAnCIAL PerIOd frOm 1 June 2018 tO 30 nOVemBer 2018 (unaudited)

note 30.11.2018 30.11.2017rm rm

ASSetS

InVeStmentS

Financial assets at FVTPL 4 388,764,107 344,612,971 Islamic deposits 8 78,522,502 53,535,513

467,286,609 398,148,484

Other ASSetS

Amount due from Manager 470,654 -Amount due from licensed financial institutions 9 5,119,405 4,754,306 Other receivables 10 633,943 415,668 Tax recoverable 9,092 9,092 Cash at bank 22,766 2,551,786

6,255,860 7,730,852

tOtAL ASSetS 473,542,469 405,879,336

LIABILItIeS

Amount due to Manager - 258,734 Amount due to Trustee 19,153 16,284 Amount due to licensed financial institutions 10,166,700 7,846,083 Other payables 11 43,350 73,750 tOtAL LIABILItIeS 10,229,203 8,194,851

eQuIty

Unit holders’ contribution 474,945,348 364,464,024 (Accumulated loss)/Retained earning (11,632,082) 33,220,461 net ASSet VALue (“nAV”) AttrIButABLe

tO unIt hOLderS 12 463,313,266 397,684,485

tOtAL LIABILItIeS And eQuIty 473,542,469 405,879,336

numBer Of unItS In CIrCuLAtIOn 12(a) 466,031,643 361,911,626

net ASSet VALue Per unIt (rm) 13 0.9942 1.0988




noteunit holders’ contribution

(Accumulatedloss)

/retained earning total nAV

rm rm rm

1.6.2018 to 30.11.2018At beginning of the financial

period 417,044,494 2,218,614 419,263,108 Total comprehensive loss - (13,850,696) (13,850,696)Creation of units 12(a) 68,451,203 - 68,451,203 Cancellation of units 12(a) (10,557,920) - (10,557,920)Distribution equalisation 12(a) 7,571 - 7,571 At end of the financial period 474,945,348 (11,632,082) 463,313,266

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 12(a) 47,181,797 - 47,181,797 Cancellation of units 12(a) (24,346,083) - (24,346,083)Distribution equalisation 12(a) 51,078 - 51,078 At end of the financial period 364,464,024 33,220,461 397,684,485




note1.6.2018 to 30.11.2018

1.6.2017 to 30.11.2017

rm rm

CASh fLOwS frOm OPerAtInG And InVeStInG ACtIVItIeS

Proceeds from sale of financial assets at FVTPL 132,142,105 171,676,844 Dividends received 5,252,387 4,508,067 Profit received from Islamic deposits 1,369,412 869,999 Auditors’ remuneration paid (12,000) (12,000)Trustee’s fee paid (114,283) (92,249)Payments for other fees and expenses (106,161) (225,991)Manager’s fee paid (3,428,464) (2,767,458)Purchase of financial assets at FVTPL (202,587,463) (230,310,886)Net cash used in operating and investing

activities (82,460,467) (56,353,674)

CASh fLOwS frOm fInAnCInG ACtIVItIeS

Cash received from units created 67,793,641 47,689,261 Cash paid on units cancelled (11,113,818) (24,309,269)Net cash generated from financing activities 56,679,823 23,379,992

net deCreASe In CASh And CASh eQuIVALentS (25,780,644) (32,973,682)

CASh And CASh eQuIVALentS At BeGInnInG Of the fInAnCIAL PerIOd 89,349,912 89,060,981

CASh And CASh eQuIVALentS At end Of the fInAnCIAL PerIOd 63,569,268 56,087,299

Cash and cash equivalents comprise:Cash at bank 22,766 2,551,786 Short term Islamic deposits 8 63,546,502 53,535,513

63,569,268 56,087,299



7.5 nOteS tO the fInAnCIAL StAtementS fOr the fInAnCIAL PerIOd frOm 1 June 2018 tO 30 nOVemBer 2018 (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 that is listed on the Main Market of Bursa Malaysia Securities 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 an Islamic 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 %

30.11.2018AssetsFinancial assets at

FVTPL - 388,764,107 388,764,107 Islamic deposits 78,522,502 - 78,522,502 3.5Other assets - 6,246,768 6,246,768

78,522,502 395,010,875 473,533,377

LiabilitiesOther liabilities - 10,185,853 10,185,853

total interest rate sensitivity gap 78,522,502 384,825,022 463,347,524




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 %

30.11.2017AssetsFinancial assets at

FVTPL -

344,612,971

344,612,971 Islamic deposits 53,535,513 - 53,535,513 3.1Other assets - 7,721,760 7,721,760

53,535,513 352,334,731 405,870,244

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

total interest rate sensitivity gap 53,535,513

344,213,630

397,749,143

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

ii. Price risk

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




ii. Price risk (contd.)

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 Islamic collective investment scheme, listed Shariah-compliant warrants and listed Shariah non-compliant equity security with all other variables held constant is indicated in the table below:

Changes in price

Effects on profit for the financial

periodIncrease/

(decrease)Increase/

(decrease)Basis points rm

30.11.2018Financial assets at FVTPL 5/(5) 194,382/(194,382)

30.11.2017Financial assets at FVTPL 5/(5) 172,238/(172,238)

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.

fair value Percentage of nAV30.11.2018 30.11.2017 30.11.2018 30.11.2017

rm rm % %

Financial assets at FVTPL 388,746,107 344,612,971 83.9 86.6




ii. Price risk (contd.)

Price risk concentration (contd.)

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

fair value Percentage of nAV30.11.2018 30.11.2017 30.11.2018 30.11.2017

rm rm % %

Trading/Services 137,174,476 93,488,741 29.6 23.5 Industrial products 100,540,515 57,184,982 21.7 14.4 Consumer products 36,329,720 36,912,659 7.8 9.3 Technology 29,658,986 17,400,144 6.4 4.4 Properties 26,000,661 34,221,899 5.6 8.6 Constructions 25,106,880 57,424,540 5.4 14.4 Finance 19,452,517 17,623,484 4.2 4.4 Infrastructure 4,649,193 - 1.0 -Plantations 3,958,080 23,661,690 0.9 5.9 Islamic Real Estate

Investment Trust 3,723,342 6,156,465 0.8 1.6 Shariah-compliant

warrants 1,323,762 538,367 0.3 0.1 Listed Shariah non-

compliant equity security

(Note 14 (a)) 845,975 - 0.2 -388,764,107 344,612,971 83.9 86.6

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.



b. Credit risk (contd.)

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:

Islamic deposits

Percentage of total Islamic deposits Percentage of nAV

30.11.2018 30.11.2017 30.11.2018 30.11.2017% % % %

ratingP1 39.2 - 6.6 - WR 60.8 100.0 10.3 13.5

100.0 100.0 16.9 13.5

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 30.11.2018 30.11.2017

rm rm

AssetsFinancial assets at FVTPL 388,764,107 344,612,971 Islamic deposits 78,522,502 53,535,513 Other assets 6,246,768 7,721,760

i. 473,533,377 405,870,244

LiabilitiesOther liabilities ii. 10,185,853 8,121,101

Equity iii. 463,313,266 397,684,485

Liquidity gap 34,257 64,658

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 listed Shariah-compliant equity securities, listed Islamic collective investment scheme, listed Shariah-compliant warrants and listed Shariah non-compliant equity security 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 Islamic funds 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 has been 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 2018. 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.


3. SummAry Of SIGnIfICAnt ACCOuntInG POLICIeS (COntd.)

b. Standards, amendments and interpretations issued but not yet effective

As at the reporting date, the following Standards, Amendments and Interpretation Committee’s (“IC”) Interpretations that have been issued by MASB will be effective for the Fund in future financial 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 2018

Amendments 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 128: Investments in Associates and Joint Ventures 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 2: Classification and Measurement

of Shared-Based Payment Transactions 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

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

IC Interpretation 22: Foreign Currency Transactions and Advance Consideration 1 January 2018

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

Amendments to MFRS 3 and MFRS 11: Previously Held Interest in a Joint Operation contained in the document 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 interpretations 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 2019Amendments to MFRS 119: Plan Amendment, Curtailment

or Settlement 1 January 2019Amendments to MFRS 128: Long-term interests in

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

Treatments 1 January 2019Amendments to MFRS 2: Share-Based Payment 1 January 2020Amendments to MFRS 3: Business Combinations 1 January 2020Amendments to MFRS 6: Exploration for and Evaluation of

Mineral Resources 1 January 2020Amendments to MFRS 14: Regulatory Deferral Accounts 1 January 2020Amendments to MFRS 101: Presentation of Financial

Statements 1 January 2020Amendments to MFRS 108: Accounting Policies, Changes

in Accounting Estimates and Errors 1 January 2020Amendments to MFRS 134: Interim Financial Reporting 1 January 2020Amendment to MFRS 137: Provisions, Contingent

Liabilities and Contingent Assets 1 January 2020Amendment to MFRS 138: Intangible Assets 1 January 2020Amendments to IC Interpretation 12: Service Concession

Arrangements 1 January 2020Amendments to IC Interpretation 19: Extinguishing

Financial Liabilities with Equity Instruments 1 January 2020Amendments to IC Interpretation 22: Foreign Currency

Transactions and Advance Consideration 1 January 2020Amendments to IC Interpretation 132: Intangible Assets -

Web Site Costs 1 January 2020MFRS 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 announced by MASB



b. Standards, amendments and interpretations issued but not yet effective (contd.)

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 does not expect any change in classification and any potential material financial impact arising from the adoption 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.

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 include listed Shariah-compliant equity securities, listed Islamic collective investment scheme, listed Shariah-compliant warrants and listed Shariah non-compliant equity security 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 Shariah-compliant 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.

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 purpose 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 year 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. distributions

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.



m. Significant accounting judgments and estimates (contd.)

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

30.11.2018 30.11.2017 rm rm

Financial assets held for trading, at FVTPL:Listed Shariah-compliant equity securities 382,871,028 337,781,347 Listed Islamic collective investment scheme 3,723,342 6,156,465 Listed Shariah-compliant warrants 1,323,762 538,367 Listed Shariah non-compliant equity security

(Note 14 (a)) 845,975 -Unlisted Shariah-compliant investment securities - 136,792

388,764,107 344,612,971

1.6.2018 to 30.11.2018

1.6.2017 to 30.11.2017

rm rmNet (loss)/gain on financial assets at FVTPL comprised:

Realised (loss)/gain on disposals (12,234,536) 103,588 Unrealised changes in fair values (2,646,181) 14,216,395

(14,880,717) 14,319,983


4. fInAnCIAL ASSetS At fVtPL (COntd.)

Details of financial assets at FVTPL as at 30 November 2018:

Quantity Aggregate

cost fair value Percentage

of nAVrm rm %

Listed Shariah-compliant equity securities

trading/ServicesAxiata Group Berhad 6,861,828 29,576,835 24,908,436 5.4 Bermaz Auto Berhad 5,508,200 11,619,819 11,567,220 2.5 Chin Hin Group Berhad 2,063,800 2,699,843 1,434,341 0.3 Dialog Group Berhad 5,205,876 10,867,376 16,450,568 3.5 IHH Healthcare Berhad 1,634,300 8,622,438 8,727,162 1.9 PESTECH International

Berhad 2,839,264 2,600,191 3,151,583 0.7 Serba Dinamik Holdings

Berhad 598,500 2,351,626 2,154,600 0.5 Sunway Berhad 4,900,092 7,563,374 7,056,132 1.5 Tenaga Nasional Berhad 2,619,100 38,690,022 37,295,984 8.0 TIME dotCom Berhad 968,400 7,931,575 7,795,620 1.7 Yinson Holdings Berhad 3,868,100 14,852,222 16,632,830 3.6

137,375,321 137,174,476 29.6

Industrial productsHartalega Holdings

Berhad 707,500 4,410,280 4,528,000 1.0 Hibiscus Petroleum

Berhad 7,196,800 6,437,330 7,196,800 1.6 Kossan Rubber Industries

Berhad 2,343,500 9,365,728 10,030,180 2.2 Pentamaster Corporation

Berhad 4,064,100 10,952,452 12,436,146 2.7 PETRONAS Chemicals

Group Berhad 3,034,800 25,890,573 27,889,812 6.0 Press Metal Aluminium

Holdings Berhad (formerly known as Press Metal Berhad) 966,400 4,674,749 4,600,064 1.0

Rohas Tecnic Berhad (formerly known as Tecnic Group Berhad) 1,146,700 1,370,443 957,495 0.2

SKP Resources Bhd 7,421,400 9,464,602 8,386,182 1.8 Top Glove Corporation

Berhad 2,908,400 15,255,367 17,334,064 3.7 V. S. Industry Berhad 4,603,700 7,390,059 7,181,772 1.5

95,211,583 100,540,515 21.7



Details of financial assets at FVTPL as at 30 November 2018: (contd.)

Quantity Aggregate


of nAVrm rm %

Listed Shariah-compliant equity securities (contd.)

Consumer productsAjinomoto (Malaysia)

Berhad 189,300 4,034,776 3,634,560 0.8CCK Consolidated

Holdings Berhad 6,316,900 3,075,434 3,000,527 0.6CCM Duopharma Biotech

Berhad 3,597,636 4,912,508 3,705,565 0.8Nestlé (M) Berhad 89,100 6,297,172 13,293,720 2.9Power Root Berhad 4,035,100 6,193,761 5,528,087 1.2QL Resouces Berhad 1,019,525 3,058,030 7,167,261 1.5

27,571,681 36,329,720 7.8

technologyFrontken Corporation

Berhad 8,562,800 7,083,681 6,893,054 1.5 Globetronics Technology

Bhd. 4,058,966 9,834,648 8,361,470 1.8 Inari Amertron Berhad 5,113,000 8,755,483 8,436,450 1.8 N2N Connect Berhad 5,630,200 6,885,619 5,968,012 1.3

32,559,431 29,658,986 6.4

PropertiesS P Setia Berhad -

ordinary shares 2,990,900 9,246,525 6,430,435 1.4 S P Setia Berhad -

preference shares B 428,546 377,121 304,268 - LBS Bina Group Berhad -

ordinary shares 9,900,440 8,780,706 6,880,806 1.5 LBS Bina Group Berhad -

preference shares 817,580 899,338 833,932 0.2 Paramount Corporation

Berhad 3,573,900 6,977,654 7,326,495 1.6 Sime Darby Property Bhd 2,468,300 3,595,119 2,455,958 0.5 Tambun Indah Land

Berhad 2,297,100 3,928,084 1,768,767 0.4 33,804,547 26,000,661 5.6




Quantity Aggregate


of nAVrm rm %

Listed Shariah-compliant equity securities (contd.)

ConstructionsEconpile Holdings Berhad 3,243,600 3,112,986 1,410,966 0.3 Gabungan AQRS Berhad 5,469,800 9,163,650 4,430,538 1.0 Kerjaya Prospek Group

Berhad 6,532,440 8,301,793 7,838,928 1.7 Malaysian Resources

Corporation Berhad 10,061,600 7,605,776 6,690,964 1.4 MGB Berhad (formerly

known as ML Global Berhad) 6,230,900 7,404,185 4,735,484 1.0

35,588,390 25,106,880 5.4

financeBIMB Holdings Berhad 2,470,700 10,394,680 9,363,953 2.0 Syarikat Takaful Malaysia

Berhad 2,541,200 7,060,958 10,088,564 2.2 17,455,638 19,452,517 4.2

InfrastructureDigi.Com Berhad 1,099,100 4,855,519 4,649,193 1.0

PlantationsBatu Kawan Berhad 235,600 4,310,327 3,958,080 0.9

total listed Shariah-compliant equity securities 388,732,437 382,871,028 82.6

Listed Islamic collective investment scheme

Islamic real estate Investment trust

Axis Real Estate Investment Trust 2,433,557 3,828,759 3,723,342 0.8

total listed Islamic collective investment scheme 3,828,759 3,723,342 0.8




Quantity Aggregate


of nAVrm rm %

Listed Shariah-compliant warrants

CCK Consolidated Holdings Berhad-WA 2,871,400 - 287,140 0.1

Hibiscus Petroleum Berhad-WC 1,611,620 - 741,345 0.2

Kerjaya Prospek Group Berhad-WB 384,360 - 74,950 -

Malaysian Resources Corporation Berhad-WB 400,581 - 82,119 -

Sunway Berhad-WB 511,880 - 138,208 -total listed Shariah-

compliant warrants - 1,323,762 0.3

Listed Shariah non-compliant equity security

Sentoria Group Berhad (Note 14 (a)) 2,349,930 1,559,499 845,975 0.2

total listed Shariah non-compliant equity security 1,559,499 845,975 0.2

Total financial assets at fVtPL 394,120,695 388,764,107 83.9

unrealised loss on financial assets at fVtPL (5,356,588)


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 2017 to 30 November 2017: 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 of the NAV of the Fund (financial period from 1 June 2017 to 30 November 2017: 0.05% per annum).

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

1.6.2018 to 30.11.2018

1.6.2017 to 30.11.2017

rm rm

Net (loss)/income before tax (13,850,696) 14,635,107

Tax at Malaysian statutory tax rate of 24% (financial period from 1 June 2017 to 30 November 2017: 24%) (3,324,167) 3,512,426 Tax effect of:Income not subject to tax (1,505,995) (4,672,615)

Loss not deductible for tax purposes 3,571,372 - Expenses not deductible for tax purposes 415,490 473,728 Restriction on tax deductible expenses for unit trust fund 843,300 686,461

Income tax for the financial period - -


8. ISLAmIC dePOSItS

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

30.11.2018 30.11.2017rm rm

Short term Islamic deposits (tenure: 3 months or less) 63,546,502 53,535,513 Islamic deposits (tenure: more than 3 months) 14,976,000 -

78,522,502 53,535,513

9. AmOunt due frOm/tO LICenSed fInAnCIAL InStItutIOnS

Amount due from/to licensed financial institutions relates to the amount to be received from or to licensed financial institutions arising from the sales and purchase of Shariah-compliant investments.

10. Other reCeIVABLeS

30.11.2018 30.11.2017rm rm

Dividends receivable 540,113 403,877Profit receivable from Islamic deposits 93,830 11,791

633,943 415,668

11. Other PAyABLeS

30.11.2018 30.11.2017rm rm

Accrual for auditors’ remuneration 6,016 4,710 Accrual for tax agent’s fees 6,006 6,005 Provision for printing and other expenses 31,328 63,035

43,350 73,750


12. net ASSet VALue AttrIButABLe tO unIt hOLderS

NAV attributed to unit holders is represented by:

note 30.11.2018 30.11.2017rm rm

Unit holders’ contribution (a) 474,945,348 364,464,024

(Accumulated loss)/Retained earning:Realised reserve (6,275,494) 3,278,333 Unrealised reserve (5,356,588) 29,942,128

(11,632,082) 33,220,461

463,313,266 397,684,485

(a) unit holders’ contribution

1.6.2018 to 30.11.2018 1.6.2017 to 30.11.2017no. of units rm no. of units rm

At beginning of the financial period 410,674,447 417,044,494 340,583,836 341,577,232

Add: Creation of units 65,405,645 68,451,203 43,963,952 47,181,797

Less: Cancellation of units (10,048,449) (10,557,920) (22,636,162) (24,346,083)

Distribution equalisation - 7,571 - 51,078

At end of the financial period 466,031,643 474,945,348 361,911,626 364,464,024

The number of units legally or beneficially held by the Manager, Kenanga Investors Berhad, and parties related to the Manager as at 30 November 2018 were nil (30 November 2017: nil).


13. 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:

30.11.2018 30.11.2017rm rm/unit rm rm/unit

NAV attributable to unit holders for creation/cancellation of units 465,068,410 0.9979 399,882,813 1.1049

Effects of adopting bid prices as fair value (1,755,144) (0.0037) (2,198,328) (0.0061)

NAV attributable to unit holders per statement of financial position 463,313,266 0.9942 397,684,485 1.0988

14. ShArIAh InfOrmAtIOn Of the fund

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

a. Investment in equity securities listed on Bursa Malaysia Securities Berhad which have been classified as Shariah-compliant by the SACSC for the financial period under review except for Sentoria Group Berhad. The security has been reclassified as Shariah non-compliant by the SACSC on 25 May 2018. As per the SACSC’s advice, the security will be disposed of soonest practical, once the total amount of dividends received and the market value of the security held equals the original investment cost;

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

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

15. POrtfOLIO turnOVer rAtIO (“Ptr”)

PTR for the financial period from 4 June 2018 to 30 November 2018 is 0.37 times (financial period from 1 June 2017 to 30 November 2017: 0.52 times).

PTR is the ratio period from 1 June 2018 to 30 November 2018 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.


16. mAnAGement eXPenSe rAtIO (“mer”)

MER for the financial period from 1 June 2018 to 30 November 2018 is 1.57% per annum (financial period from 1 June 2017 to 30 November 2017: 1.63% per annum).

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.

17. trAnSACtIOnS wIth LICenSed fInAnCIAL InStItutIOnS

transaction value

Percentage of total

Brokerage, stamp duty

and clearing fee

Percentage of total

rm % rm %

UOB Kay Hian Securities (M) Sdn Bhd 80,488,666 23.9 193,948 24.2

Kenanga Investment Bank Berhad* 61,582,288 18.3 140,863 17.6

RHB Investment Bank Berhad 39,615,448 11.8 95,549 11.9

Public Investment Bank Berhad 32,517,421 9.6 76,506 9.6

Credit Suisse Securities (Malaysia) Sdn Bhd 21,421,306 6.3 53,102 6.6

CIMB Investment Bank Berhad 19,456,571 5.8 46,258 5.8

Affin Hwang Investment Bank Berhad 19,445,289 5.8 44,935 5.6

Maybank Investment Bank Berhad 18,726,838 5.6 43,530 5.5

KAF-Seagroatt & Campbell Securities Sdn Bhd 12,804,028 3.8 30,648 3.8

Macquarie Capital Securities (Malaysia) Sdn Bhd 7,701,807 2.3 19,403 2.4

Others 22,976,548 6.8 56,174 7.0 336,736,210 100.0 800,916 100.0

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

The above transaction values are in respect of of listed Shariah-compliant equity securities 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.

38

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19. 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 receivablesfinancialliabilities total

rm rm rm rm

30.11.2018AssetsListed Shariah-

compliant equity securities 382,871,028 - - 382,871,028

Listed Islamic collective investment scheme 3,723,342 - - 3,723,342

Listed Shariah-compliant warrants 1,323,762 - - 1,323,762

Listed Shariah non-compliant equity security (Note 14(a)) 845,975 - - 845,975

Islamic deposits - 78,522,502 - 78,522,502 Amount due from

Manager - 470,654 - 470,654Amount due from

licensed financial institutions - 5,119,405 - 5,119,405

Other receivables - 633,943 - 633,943 Cash at bank - 22,766 - 22,766

388,764,107 84,769,270 - 473,533,377

LiabilitiesAmount due to

Trustee - - 19,153 19,153 Other payables - - 10,166,700 10,166,700

- - 10,185,853 10,185,853


19. fInAnCIAL InStrumentS (COntd.)

a. Classification of financial instruments (contd.)

financial assets at

fVtPL receivablesfinancial liabilities total

rm rm rm rm

30.11.2017AssetsListed Shariah-



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

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

Islamic deposits - 53,535,513 - 53,535,513 Amount due from

licensed financial institutions - 4,754,306 - 4,754,306

Other receivables - 415,668 - 415,668 Cash at bank - 2,551,786 - 2,551,786

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

LiabilitiesAmount due to

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

Trustee - - 16,284 16,284 Amount due to

licensed financial institutions - - 7,846,083 7,846,083

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

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.



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

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

Level 1 Level 2 Level 3 totalrm rm rm rm

Investments:30.11.2018Listed Shariah-



Listed Shariah-compliant warrants 1,323,762 - - 1,323,762

Listed Shariah non-compliant equity security (Note 14(a)) 845,975 - - 845,975

30.11.2017Listed Shariah-



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

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

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 Islamic collective investment schemes, listed Shariah-compliant warrants and listed Shariah non-compliant equity security are determined by reference to Bursa Malaysia Securities Berhad’s bid prices 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.

20. 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 · 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