PROSPECTUS
This Prospectus is dated 30 April 2004 and expires
on 29 April 2005
INVESTORS ARE ADVISED TO READ AND UNDERSTAND
THE CONTENTS OF THE PROSPECTUS. IF IN DOUBT,
PLEASE CONSULT A PROFESSIONAL ADVISER.
This Prospectus encompasses the following three (3) unit trust schemes:
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.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..
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PB GROWTH FUND
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PB BALANCED FUND
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PB FIXED INCOME FUND
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Trustee:
Distributor:
(6463-H)
The Manager:
(344986-V)
Public Mutual Berhad (23419-A)
The Securities Commission has approved the issue, offer or invitation in respect of the unit trust funds,
the subject of this prospectus, and that the approval shall not be taken to indicate that the Securities
Commission recommends the investment.
The Securities Commission shall not be liable for any non-disclosure on the part of the management
company and takes no responsibility for the contents of the prospectus, makes no representation as to its
accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising
from or in reliance upon the whole or any part of the contents of this prospectus. INVESTORS SHOULD
RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IN
CONSIDERING THE INVESTMENT, INVESTORS WHO ARE IN DOUBT AS TO THE ACTION TO BE TAKEN
SHOULD CONSULT THEIR PROFESSIONAL ADVISERS IMMEDIATELY.
A copy of this prospectus has been registered, and lodged with, the Securities Commission.
This Prospectus has been seen and approved by the directors of Public Mutual Berhad and they collectively
and individually accept full responsibility for the accuracy of all information contained herein and confirm,
having made all enquiries which are reasonable in the circumstances, that to the best of their knowledge
and belief, there are no other facts the omission of which would make any statement herein misleading.
Dato’ Lee Kong Lam
Datuk Tay Ah Lek
Dato’ (Dr) Mohamed Ishak Bin Haji Mohamed Ariff
Tuan Haji Abdul Aziz Bin Omar
Edmond Cheah Swee Leng
No action has been taken to permit an offering of units in the funds or the distribution of this Prospectus,
in any jurisdiction where action would be required for such purpose, other than Malaysia. Accordingly,
this Prospectus may not be used for the purpose of an offer or solicitation in any jurisdiction or in any
circumstances in which such offer or solicitation is not authorised.
No units will be issued or sold on the basis of this prospectus later than one year after the date of this
prospectus.
CONTENTS
GLOSSARY OF TERMS/ABBREVIATIONS
3-5
DISTRIBUTORS, MANAGER, TRUSTEE AND ADVISERS
6-7
1.
2.
3.
4.
KEY FEATURES OF THE FUNDS
8 - 12
1.1
1.2
1.3
1.4
1.5
8
9
10
12
12
Summary of Key Data of The Funds
Fees and Charges
Information on Transaction of Units
Free Insurance for PBBF
Distribution Policy
INTRODUCTION TO UNIT TRUST FUNDS
13 - 19
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
13
14
14
15
16
16
17
19
The Unit Trust Scheme
The Regulatory Regime
Benefits of Investing in Unit Trusts
Risk Factors
Investor Profile
Fees, Charges and Management Expense Ratio
Fund Performance Indicators
Dollar-Cost Averaging Principle
Impact of Distribution on Unit Prices and the Effect of Buying
Into a Scheme Just Before Distributions are Made
19
THE MANAGER
20 - 31
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
20
20
21
22
22
23
23
25
26
27
28
31
31
Corporate Profile of Public Mutual
Organisation of Public Mutual
Unit Trust Funds under Public Mutual
Functions, Duties and Responsibilities of The Manager
Compliance Unit
Financial Performance of Public Mutual
The Board of Directors
Profile of Key Management Staff
Profile of Fund Managers
Awards Won by Public Mutual
Investment Management Function of The Manager
Retirement, Removal and Replacement of The Manager
Powers of The Manager to Remove and Replace The Trustee
THE TRUSTEE
32 - 33
4.1
4.2
4.3
4.4
4.5
32
32
32
33
33
The Trustee’s Willingness to Assume Position
Duties and Responsibilities of The Trustee
Profile of Amanah Raya Berhad
Retirement, Removal and Replacement of The Trustee
Powers of The Trustee to Remove and Replace The Manager
1
CONTENTS (CONT’D)
5.
DETAILED INFORMATION ON THE FUNDS
34 - 47
5.1
5.2
5.3
5.4
5.5
5.6
5.7
34
34
42
43
44
46
47
Categories of Funds
Fund Profiles
Investment Risks and Risk Management
Authorised Investments
Investment Restrictions
Valuation of Authorised Investments
Policy on Gearing
6.
PERFORMANCE OF THE FUNDS
48 - 51
7.
FINANCIAL AND INVESTMENT HIGHLIGHTS OF THE FUNDS
52 - 55
8.
GETTING STARTED WITH PUBLIC MUTUAL
56 - 59
8.1
8.2
8.3
8.4
Where to Purchase Units of The Funds
How to Buy, Sell or Switch Units of The Funds
Statements and Reports
Keeping Track of the Daily Prices of Units
56
56
58
59
Dedicated Services to Unitholders of Public Mutual
60
9.
TRANSACTION INFORMATION
61 - 64
9.1
9.2
9.3
61
61
63
Determination of Prices
Computation of Prices
Computation of Cooling-Off Proceeds
10. FEES, CHARGES AND EXPENSES
10.1
10.2
10.3
65 - 67
Charges Imposed on Sale and Purchase of Units
Fees and Expenses of The Funds
Policy on Stockbroking Rebates and Soft Commissions
11. UNITHOLDERS’ RIGHTS
11.1
11.2
11.3
11.4
11.5
65
66
67
68 - 69
Unitholders’ Rights and Limitations
Unitholders’ Liabilities
Jointholders
Documents Available for Inspection
The Deed
68
68
68
69
69
TAXATION OF THE FUND AND UNITHOLDERS
70 - 71
ACCOUNTANTS’ REPORT
72 - 87
NETWORK OF PUBLIC MUTUAL BRANCH OFFICES
88 - 89
DISTRIBUTION POINTS OF THE FUNDS
90
2
GLOSSARY OF TERMS/ABBREVIATIONS
ARB
Amanah Raya Berhad (344986-V)
Business Day(s)
Each weekday in which the Malaysia Securities Exchange Berhad is open for
dealing.
Cooling-off Right
The right of a unitholder who is investing with Public Mutual for the first
time, to change his mind and cancel an investment within 6 business days
from the date of receipt of the application form (deemed to be the date of
depositing of investment monies into the collection accounts of Public
Mutual), and obtain a full refund of the said investment within 10 days of
receipt of cooling-off notice by Public Mutual. For EPF unitholders, the
cooling-off period shall begin from the date of receipt of the application
form (deemed to be the date of acceptance of the application form by Public
Mutual).
The cooling-off right, however, does not extend to a corporation or
institution, the staff of Public Mutual, and persons registered to deal in its
unit trust funds.
FMUTM
The Federation of Malaysian Unit Trust Managers
Forward Pricing
The selling or buying of units is based on the NAV per unit next determined
or calculated after the application/repurchase order from unitholder(s) is
received by the Manager in proper form.
Normally, the calculation of NAV (and prices) is conducted on each business
day upon close of the MSEB.
IUTA
Institutional Unit Trust Agent
IUTA is an institution, corporation or organisation that is registered with
the FMUTM to market and distribute unit trust funds.
KLCI
KLSE Composite Index
Management Expense
Management expense is the inherent costs of operating a unit trust fund; it
includes management fees, trustee fees and expenses incurred for fund
administrative services.
MER
Management Expense Ratio (MER) is the ratio of the sum of the fees and
the recovered expenses of the unit trust fund to the average value of the
unit trust fund calculated on a daily basis, i.e.:
(Fees + Recovered expenses) of the unit trust fund
x 100
Average value of the unit trust fund calculated on a daily basis
3
GLOSSARY OF TERMS/ABBREVIATIONS (CONT’D)
Where:
Fees
=
All ongoing fees deducted/deductible directly from
the unit trust fund in respect of the period covered
by the management expense ratio, expressed as a
fixed amount calculated on a daily basis. This would
include the annual management fee, the annual
trustee fee and any other fees deducted/deductible
directly from the unit trust fund.
Recovered
expenses
=
All expenses recovered from/charged to the unit
trust fund as a result of the expenses incurred
by the operation of the unit trust fund, expressed as
a fixed amount.
Average
value of the
unit trust fund
=
The NAV of the unit trust fund, including net income
value of the fund, less expenses on an accrued basis,
in respect of the period covered by the management
expense ratio, calculated on a daily basis.
This expense ratio is directly comparable with that of other funds (under
the same fund category) in determining the fund that is more cost effective,
ceteris paribus. The lower the expense ratio of a fund the better, in the
universal comparison of the expenses of funds.
MSEB
Malaysia Securities Exchange Berhad
NAV
Net Asset Value (“NAV”) of the fund is determined by deducting the value of
all the fund’s liabilities from the value of the fund’s assets, at the valuation
point. For the purpose of computing the annual management fee and the
annual trustee fee, the NAV of the fund should be inclusive of the
management fee and trustee fee for the relevant day.
NAV per unit
The NAV per unit is the NAV of a fund divided by the number of units in
circulation at the valuation point. It forms the basis upon which the prices
of units of a fund are calculated.
PBBF
PB Balanced Fund
PBFI
PB Fixed Income Fund
PBGF
PB Growth Fund
PB-Series of Funds
Unit trust funds dedicated for exclusive distribution by Public Bank in their
role as approved Institutional Unit Trust Agent of Public Mutual. This series
of funds comprises three unit trust funds i.e. PB Growth Fund, PB Balanced
Fund and PB Fixed Income Fund.
Portfolio Turnover Ratio
(PTR)
(Total acquisitions of the fund for the year + total disposals of the fund
for the year) / 2
Average value of the fund for the year calculated on a daily basis
4
GLOSSARY OF TERMS/ABBREVIATIONS (CONT’D)
The annual portfolio turnover ratio will tell an investor whether the fund
buys and sells securities frequently or whether it takes a longer term approach
to investment management. A portfolio turnover ratio of 1 time means
that the fund has been turned over once for that particular year.
Public Bank
Public Bank Berhad (6463-H)
Public Mutual
or the Manager
Public Mutual Berhad (23419-A)
Public Series of Funds
This series of funds comprises the twelve non-Syariah based unit trust funds,
namely, Public Savings Fund, Public Growth Fund, Public Index Fund, Public
Industry Fund, Public Aggressive Growth Fund, Public Regular Savings Fund,
Public Balanced Fund, Public Bond Fund, Public SmallCap Fund, Public Equity
Fund, Public Institutional Bond Fund and Public Money Market Fund, and
three Syariah based unit trust funds, namely Public Ittikal Fund, Public Islamic
Bond Fund and Public Islamic Equity Fund, which are governed by separate
prospectuses dated 30 April 2004 and expires on 29 April 2005.
RM
Ringgit Malaysia
SC
Securities Commission of Malaysia
SC Act
The Securities Commission Act 1993
SC Guidelines
Guidelines on Unit Trust Funds issued by the SC, as may be amended from
time to time, and shall include any schedules, appendices and guidelines
contained therein or made pursuant thereto.
“the funds”/“the fund”
The three (3) funds covered under this prospectus, namely PB Growth Fund,
PB Balanced Fund and PB Fixed Income Fund, are collectively called “the
funds” and individually called “the fund”.
“the deed”
“The deed” means the Master Deed dated 9 August 2002 and all supplemental
deeds entered into between the Trustee and the Manager for the registered
holders of the funds.
UIC
Units in circulation (“UIC”) refers to the total number of units in issue.
5
DISTRIBUTORS, MANAGER, TRUSTEE
AND ADVISERS
DISTRIBUTOR OF PB-SERIES OF FUNDS
Public Bank Berhad (6463-H)
Menara Public Bank
146 Jalan Ampang
50450 Kuala Lumpur
Tel: 03-2176 6000 / 2176 6666
Fax: 03-2163 9917
Customer Service Hotline: 1800-883323
Web: www.publicbank.com.my
MANAGER OF THE FUNDS
Public Mutual Berhad (23419-A)
Registered Office
Block B, Sri Damansara Business Park
Persiaran Industri, Bandar Sri Damansara
52200 Kuala Lumpur
Tel: 03-6279 6800
Fax: 03-6277 9800
Hotline: 03-6279 5252
e-mail: customer@publicmutual.com.my
Web: http://www.publicmutual.com.my
Board of Directors
Dato’ Lee Kong Lam (Non-Executive Director / Chairman)
Datuk Tay Ah Lek (Non-Executive Director)
Mr. Edmond Cheah Swee Leng (Chief Executive Officer / Executive Director)
Dato’ (Dr) Mohamed Ishak Bin Haji Mohamed Ariff (Non-Executive Independent Director)
Tuan Haji Abdul Aziz Bin Omar (Non-Executive Independent Director)
Members of the Investment Committee
Dato’ Lee Kong Lam
Datuk Tay Ah Lek
Mr. Edmond Cheah Swee Leng
Dato’ (Dr) Mohamed Ishak Bin Haji Mohamed Ariff (Independent)
Tuan Haji Abdul Aziz Bin Omar (Independent)
Members of the Audit and Compliance Committee
Dato’ Lee Kong Lam
Datuk Tay Ah Lek
Dato’ (Dr) Mohamed Ishak Bin Haji Mohamed Ariff
Tuan Haji Abdul Aziz Bin Omar
Management Team
Mr. Edmond Cheah Swee Leng (Chief Executive Officer / Executive Director)
Mr. Wong Boon Choy (Senior General Manager)
Mr. Chong Chang Choong (General Manager - Investment)
Mr. Patrick Nge Koh Nguong (General Manager - Sales & Training)
Ms. Yeoh Kim Hong (General Manager - Finance & Operations)
Mr. Richard Tan Koon Eam (General Manager - Information Technology)
6
DISTRIBUTORS, MANAGER, TRUSTEE
AND ADVISERS (CONT’D)
Company Secretaries
Mr. Wong Boon Choy (MIA 4520)
c/o Public Mutual Berhad
5th Floor, Block B, Sri Damansara Business Park
Persiaran Industri, Bandar Sri Damansara
52200 Kuala Lumpur
Ms. Yeoh Kim Hong (MIA 4792)
c/o Public Mutual Berhad
4th Floor, Block B, Sri Damansara Business Park
Persiaran Industri, Bandar Sri Damansara,
52200 Kuala Lumpur
TRUSTEE
Amanah Raya Berhad (344986-V)
Tingkat 10, Wisma Amanah Raya
No.15, Jalan Seri Semantan 1
Off Jalan Semantan, Bukit Damansara
50508 Kuala Lumpur
Tel: 03-2095 3232
Web: http:www.arb.com.my
AUDITORS AND REPORTING
ACCOUNTANTS
Ernst & Young
Level 23A, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
Damansara Heights
50490 Kuala Lumpur
TAX AGENT
LEGAL ADVISERS
Soon Gan Dion & Partners
1st Floor, No.19 Jalan SS21/56B
Damansara Utama, 47400 Petaling Jaya
Selangor Darul Ehsan
PRINCIPAL BANKERS
Public Bank Berhad
Menara Public Bank
No. 146, Jalan Ampang
50450 Kuala Lumpur
INSURANCE COMPANY
John Hancock Life Insurance (Malaysia) Berhad
Bangunan John Hancock
Jalan Semantan, Damansara Heights
50490 Kuala Lumpur
Malaysian Assurance Alliance Berhad
Menara MAA, 11th Floor
12, Jalan Dewan Bahasa
50460 Kuala Lumpur
Malaysia National Insurance Berhad
Level 26 Tower 1, MNI Twins
11 Jalan Pinang
50450 Kuala Lumpur
Lonpac Insurance Berhad
23rd Floor, Bangunan Public Bank
6, Jalan Sultan Sulaiman
50000 Kuala Lumpur
KPMG Tax Services Sdn Bhd
Wisma KPMG
Jalan Dungun, Damansara Heights
50490 Kuala Lumpur
The Trustee, Auditors and Reporting Accountants, Tax Agent, Legal Adviser, Principal Bankers and
Insurers have given and have not withdrawn their written consent to the inclusion in this Prospectus
of their names and statements in the manner and context in which such names and statements
appear. Letters of consent in respect of each of the above parties have been lodged with the SC.
7
1.
KEY FEATURES OF THE FUNDS
1.1 SUMMARY OF KEY DATA OF THE FUNDS
The Manager
Public Mutual Berhad (23419-A)
Name of Fund
PB Growth Fund
(PBGF)
PB Balanced Fund
(PBBF)
PB Fixed Income
Fund (PBFI)
Category of Fund
Equity Fund
Balanced Fund
Bond Fund
Type of Fund
Capital growth
Income and capital
growth
Income
Launch Date
3 October 2002
5 May 1998
3 October 2002
Approved Fund Size
600 Million units
300 Million units
300 Million units
Financial Year End
30 June
30 June
30 June
Trustee
ARB
ARB
ARB
Fund Objective
To achieve capital
growth through
investment in a
diversified portfolio
of growth stocks.
To provide steady
income and capital
growth over the
medium to long term
period.
To provide a steady
stream of annual
income through
investment in private
debt securities (bonds)
and money market
instruments.
(Medium to long term
refers to a period of
3 years or more)
Risk Profile of Fund
With between 65% to
85% of NAV invested
in equities, PBGF
carries higher risk
than a balanced fund,
and is suitable for
investors who can
withstand extended
market volatilities.
With a balanced
portfolio of 60:40 in
equities:bonds, the
capital growth
potential of PBBF
may not be as
good as that of an
equity fund, but,
likewise, it is
considered to be
less risky.
With the fund’s
portfolio invested
mostly in fixed income
securities, PBFI is,
relatively, a low risk
fund.
Investor Profile
Moderate.
Conservative-tomoderate.
Conservative.
The Fund Profile, Fund Type, Investor Profile, Investment Objective, Policy and Strategy of each of the
funds above are tabulated in Chapter 5: Detailed Information on The Funds. Reading this chapter will
provide you with a better understanding of the characteristics and objective of each fund, and help you
to decide on the fund that is most compatible with your personal investment temperament and long
term financial goals.
The names of the designated Fund Manager are tabulated in Chapter 5: Detailed Information on The
Funds. For profiles of designated Fund Managers, please refer to pages 26 and 27 of Chapter 3: The
Manager. For more information on the Trustee, please refer to Chapter 4: The Trustee.
There are risks involved in investing with the funds. The general risks of investing with unit trust funds
are tabulated in Chapter 2: Introduction to Unit Trust Funds, while information on specific fund risks are
presented under Chapter 5: Detailed Information on The Funds.
8
KEY FEATURES OF THE FUNDS (CONT’D)
1.2 FEES AND CHARGES
A summary of all fees and charges of the funds are shown below:
Charges Imposed on Sale or Purchase of Units
This table describes the charges that you may incur when you buy or redeem units of the funds.
%
Charges
PBGF
PBBF
PBFI
Service Charge per Unit
Between 5% to 7%
of NAV per unit.
Between 5% to 7%
of NAV per unit.
Repurchase Charge per Unit
Nil.
Switching and Transfer of Units
Unitholders may incur charges on their switch and transfer
transactions. Please refer to page 11 for the charges that are
involved.
0.25% of NAV
per unit.
Bank charges, courier charges and any other indirect charges incurred as a result of redemptions will be
borne by the investor.
Fees Incurred on Investing in the Funds
There are annual operating expenses involved in running a fund such as the management fee, trustee
fee, audit fees, and other direct administrative costs. These expenses are deducted from the gross income
of the fund.
This table describes the fees that you may incur when you invest in the funds.
%/RM
Fees and Expenses
PBGF
PBBF
PBFI
Annual Management Fee
1.5% per annum
of NAV.
1.5% per annum
of NAV.
0.75% per annum
of NAV.
Annual Trustee Fee
0.07% per annum
of NAV, subject to
a minimum fee of
RM18,000 and a
maximum fee of
RM450,000
per annum.
0.07% per annum
of NAV, subject to
a minimum fee of
RM18,000 and a
maximum fee of
RM450,000
per annum.
0.035% per annum
of NAV, subject to
a minimum fee of
RM18,000 and a
maximum fee of
RM300,000 per
annum.
Fund Expenses
For the list of fund expenses, please refer to page 66, paragraph
10.2 of Chapter 10: Fees, Charges and Expenses.
Any other fees payable
indirectly by an investor
Management Expense
Ratio (%)
Nil.
1.73
(For financial period
ended 30 June 2003)
1.62
1.04
(For financial year
(For financial period
ended 30 June 2003) ended 30 June 2003)
For more information on MER, please refer to pages 16 and 67.
Please refer to Chapter 9: Transaction Information and Chapter 10: Fees, Charges and Expenses for
details on fees, charges and expenses of the funds.
9
KEY FEATURES OF THE FUNDS (CONT’D)
There are fees and charges involved and investors are advised to consider the fees and charges
before investing in the fund.
1.3 INFORMATION ON TRANSACTION OF UNITS
Unit Transactions
Units may be bought or sold daily on any Business Day which is a
Dealing Day for the Malaysia Securities Exchange Berhad (MSEB)*.
Public Mutual, the Manager of the funds, buys and sells units to
unitholders during Business Days. This ensures that there will always
be a market for the units.
Selling Price of Unit
At NAV per unit plus a service charge of between 5% to 7% for all
funds except PBFI, which trades at NAV plus a service charge of 0.25%.
(Please refer to page 62 for an illustration on computation of Selling
Price).
Repurchase Price of Unit
At NAV per unit. (Please refer to pages 62 and 63 for an illustration
on computation of Repurchase Price and Repurchase Proceeds).
Unit prices of the funds are published daily under the Unit Trusts
Column in major newspapers**.
Minimum Initial Investment
RM1,000
Minimum Additional Investment
RM100
Minimum Account Balance
1,000 units.
Cooling-Off Period
Investors who are investing with Public Mutual for the first time may
exercise their cooling-off right within 6 business days from the date
of receipt of the application form (deemed to be the date of
depositing of investment monies into the collection accounts of Public
Mutual) and receive a full refund of the investment paid within 10
days of receipt of cooling-off notice by the Manager. For EPF
unitholders, the cooling-off period shall begin from the date of
receipt of the application form (deemed to be the date of acceptance
of the application form by Public Mutual). This cooling-off right,
however, shall not extend to a corporation or institution, the staff of
Public Mutual, and persons registered to deal in its unit trust funds.
(Please refer to pages 63 and 64 for computation of cooling-off
proceeds).
Notes:
*
Investors are advised that the MSEB is open for dealing/trading on Mondays to Fridays, except on public
holiday(s). In the event that purchase and repurchase requests are received by the Manager on days
which are non-MSEB trading days, then such requests will automatically be carried forward to the first
trading or business day following therefrom. This elaboration holds particular significance on the issue
of entitlement to distribution payable by a fund at the close of its financial year/period.
**
While the Manager can ensure that the prices forwarded to the press for publication are accurate, it,
however, cannot be held liable for any error in prices finally published in the press since that would be
beyond its realm of control. Investors may contact the Customer Service or branch to further confirm the
unit prices if they so desire.
10
KEY FEATURES OF THE FUNDS (CONT’D)
Repurchase of Units
Unitholders may redeem units on any Business Day and receive
payment of repurchase proceeds within 10 Days. (Please refer to pages
62 and 63 for more information on repurchase of units). There is no
restriction on the frequency of repurchase.
Minimum Repurchase Units
1,000 units.
In the case of partial repurchase, the Manager may elect to repurchase
the entire account if the effect thereof would be that the unitholder
holds less than 1,000 units in his account with the fund.
Switching Between Funds
Unitholders may switch their investments between funds under the
PB-Series of Funds, in response to their changing financial goals or
market conditions.
The minimum transaction per switch is 1,000 units. There is no
restriction on the frequency of switching.
The conditions for switching are set out below:
To Recipient
Fund
Equity/Balanced
funds
Bond/Money
Market funds
Equity/Balanced funds
At NAV
+
RM25
At NAV
Bond/Money Market funds
- Loaded units #
At NAV
+
RM25
At NAV
Bond/Money Market funds
- Low-load units ##
At Selling Price
At NAV
Switching
From
Notes:
#
Loaded units are units which have incurred a service charge of 5% or
more at the point of purchase.
##
Low-load units are units which have incurred a service charge of 0.25%
or less at the point of purchase.
Switching between the PB-Series of Funds and the Public Series of
Funds is not allowed.
Transfer of Units
A unitholder may fully or partially transfer his units in the fund to
another unitholder. An administration fee of RM25 will be charged
for each transaction.
The minimum transaction per transfer is 1,000 units.
11
KEY FEATURES OF THE FUNDS (CONT’D)
1.4 FREE INSURANCE FOR PBBF
Free Group Term Life with Total and Permanent Disability plus Group Personal Accident Insurance is
provided for unitholders aged between 18-59 years with a minimum investment of 5,000 units at any
point in time in PBBF. The amount of insurance is equal to the number of units invested in the ratio of
RM1 insurance coverage for each unit, subject to a maximum amount of RM100,000 per unitholder of
the fund. Only individual investors who are first holders (i.e. persons who are first named in the account/
register) are entitled to the free insurance. EPF Scheme unitholders are also entitled to the free insurance.
The terms and conditions of free insurance shall apply. Please refer to the brochure on Free Insurance for
PBBF.
1.5 DISTRIBUTION POLICY
Each of the funds carries a distribution policy which is in line with the objective of the fund. Please refer
to Chapter 5: Detailed Information on The Funds for the distribution policy and Chapter 7: Financial and
Investment Highlights of The Funds for the past distributions of the respective funds. Investors are advised
to read page 19 on the impact of distributions on fund prices.
Income distributions are declared at the end of each financial year, or for any specified period as may be
approved by the Trustee.
If income is distributed, it will be forwarded to unitholders by cheques to the latest address shown in the
Register. Unitholders may, however, choose to reinvest the distribution by selecting the proper option in
the Application Form.
Distribution reinvestments will be effected on the first business day following the distribution date.
Where there are Standing Instructions to reinvest distributions, the distributions will be credited at NAV
i.e. Selling Price less service charge, computed at the close of the first business day following the distribution
date.
A unitholder must notify the Manager 14 Business Days prior to each date fixed for the distribution of
any change in his distribution instructions.
Auto-Reinvestment of Distribution Amount of Less Than RM100
Payment of distribution of an amount less than RM100 per account will automatically be reinvested on
behalf of the unitholder at NAV per unit i.e. Selling Price less service charge, computed at the close of the
first business day following the distribution date.
Auto-Reinvestment of Distribution Cheques upon Lapse of Six Months Cheque Validity Period
For distribution cheques which are left uncashed by unitholders after expiry of the six months cheque
validity period (from the date of the distribution cheque), the Manager shall reinvest the distributions in
the purchase of additional units of the fund on their behalf. The reinvestment will be executed based on
the NAV per unit of the fund i.e. Selling Price less service charge on the closing of the fifteenth day of the
following month or such earlier date as may be determined by the Manager.
Prospective unitholders should read and understand the contents of the Prospectus and, if necessary,
consult their adviser(s).
Unit prices and distributions payable, if any, may go down as well as up.
12
2.
INTRODUCTION TO UNIT TRUST FUNDS
2.1 THE UNIT TRUST SCHEME
A unit trust fund is a professionally managed, collective investment scheme that pools unitholders’ monies
and invests it toward a specific goal as declared by the investment objective of the scheme. Such a
scheme usually aims to provide above-average returns in the form of income distribution and capital
growth with reasonable risks, to medium-to-long term investors through investing in a broadly diversified
portfolio of stocks and bonds, or other specialised instruments.
Unitholders
RM
Managed By
FUND
RM
Invest
In Custody Of
Unit Trust
Manager
Trustee
Permitted Assets
RM
Capital Gains
RETURNS
RM
Distribution
A unit trust scheme may be illustrated as a tripartite relationship between the Manager, the Trustee and
Unitholders (as shown in the diagram below) governed by a legally binding Deed registered with the
Securities Commission. The Securities Commission regulates the industry as well as the operations and
administration of unit trust schemes through the Securities Commission Act 1993, and the Guidelines on
Unit Trust Funds.
UNIT TRUST TRIPARTITE CONCEPT
Trustee
Deed
Manager
Unitholders
13
INTRODUCTION TO UNIT TRUST FUNDS (CONT’D)
The Deed spells out in detail the manner in which the scheme is to be administered, the valuation and
pricing of units, the keeping of proper accounts and records, the collection and distribution of income,
the rights of unitholders, the duties and responsibilities of the Manager and Trustee with regard to the
operations of the scheme, and the protection of unitholders’ interests.
The Manager is obliged under the Deed, Securities Commission Act 1993 and Guidelines on Unit Trust
Funds to administer the fund(s)/scheme(s) in an efficient and proper manner that will ensure high standards
of integrity and fair dealing in managing the schemes to the exclusive interest of unitholders and investors,
to exercise due care, skill and diligence as well as effectively employ the resources and procedures necessary
for the proper performance of the scheme(s).
The Trustee is appointed Trustee for the unitholders and acts as the custodian for all the assets of the
scheme. The Trustee, therefore, must act to ensure that the Manager adheres strictly to the provisions of
the Deed; particularly with regard to the creation and cancellation of units, the exercise of investment
powers of the fund, collection and distribution of income, proper record keeping of administrative,
investment and unitholders’ transactions, and in upholding unitholders’ interests.
2.2 THE REGULATORY REGIME
The principal legislation governing the establishment and operation of unit trusts in Malaysia is the
Securities Commission Act 1993 and the Securities Commission Guidelines on Unit Trust Funds, which
have to be observed at all times. This requires, inter alia, that the Manager and the Trustee execute a
Deed which is registered with the Securities Commission.
The appointment of the Management Company, Trustee, Syariah Committee/Adviser, the Manager’s
Directors, Chief Executive Officer and Members of the Investment Committee(s) must be approved by the
Securities Commission.
2.3 BENEFITS OF INVESTING IN UNIT TRUSTS
Besides the potential for capital growth over the long-term period, unit trusts also provides other
recognised benefits that makes them attractive relative to other investment avenues. Among them are
as follows:
1.
Diversification: Diversification involves the process of spreading risk over a broad portfolio of stocks
and bonds in different companies, sectors, countries or regions. This can only be done with
substantial amounts of monies to buy a wide variety of stocks. Unit trusts facilitate the diversification
process through providing small investors with an avenue to pool their savings for the purchase of
a diversified portfolio of stocks and bonds that will bring returns at lower risks to unitholders
compared with investing directly in stock markets.
2.
Professional Management: Unit trusts either engage or maintain in-house professional fund
managers with the expertise and resources to manage the assets of the fund. The investors thus
benefit from this professional fund management of their investments in the fund at an affordable
(shared) cost.
3.
Liquidity: Unitholders may redeem all or part of their units on any business day and have their
proceeds mailed to them within 10 days.
4.
Ease of Transactions: Unit trusts do not require cumbersome administrative or paperwork or record
keeping on the part of unitholder in managing his investments.
5.
Capital Gains: Through participation in securities, unit trust investments provide the opportunity
to reap capital growth as part of the return on a unitholder’s investment.
14
INTRODUCTION TO UNIT TRUST FUNDS (CONT’D)
2.4 RISK FACTORS
Any investment carries with it an element of risk. Keeping one’s savings in fixed term deposits may
probably be the safest on an investment risk-return continuum, but it, nevertheless, carries with it the
risk of negative return when the rate of inflation is higher than the rate of interest return received on
fixed deposits, leading thus to the loss in purchasing power per dollar principal to the saver; otherwise
known as the inflation or purchasing power risk. Direct investment in the share market or stocks will
subject the investor to the specific risk of falling share prices without reprieve offered by the benefit of
portfolio diversification or fund management expertise available under collective investment schemes.
A unit trust fund is exposed to a variety of risks by nature of the investment schemes it is engaged in.
Where the unit trust participates in stock market-related investments, the following risks become key
considerations:
1.
Market Risks: The purchase of equities represents a risk since the prices of stocks underlying the
NAV of the fund fluctuate in response to many factors. Therefore, stock values fluctuate in response
to the activities of individual companies, and general market or economic conditions. Such
movements in the underlying values of the shares of the investment portfolio will cause the NAV or
prices of units to fall as well as rise, and income produced by the fund may also fluctuate.
2.
Particular Stock Risk: Any major price fluctuations of a particular stock invested by the fund may
affect the NAV and thus impact (adversely or favourably) on the prices of units. This impact can,
however, be minimised through the process of portfolio diversification by the fund managers.
3.
Liquidity Risk: Liquidity risk is defined as the ease with which a security can be sold at or near its fair
value depending on the volume traded on the market. If a unit trust fund has a large portfolio of
securities that are less liquid or difficult to sell, the securities may be sold at a discount to its fair
value, hence affecting the value of the unit trust fund. This risk is minimised through the process of
stock selection and portfolio diversification by the fund managers.
Further, investment in bonds brings forth the following specific investment risks:
1.
Interest Rate Risk: Generally, bond (fund) prices move in the opposite direction of interest rates. If
interest rates rise and bond (and bond fund) prices fall, this will lower the value of your investment.
The interest rate here refers to the general interest rate of the country which may affect the value
of investment even if the fund (e.g. Syariah fund) does not invest in interest-bearing instruments.
2.
Credit Risk: Credit risk refers to an issuer’s ability to make timely payments of interest and principal.
In the event that the issuer of the instrument is faced with financial difficulties, leading to a decrease
in their credit worthiness and default in the payment of interest and principal, the value of the unit
trust fund may be adversely affected.
In addition to the above, investors of unit trust funds need also to consider the following:
1.
Manager’s Risk: There is the risk that the Manager may not adhere to the investment mandate of
the respective fund. Poor management of the fund will also jeopardise the investment of unitholders
through the loss of their capital invested in the scheme.
2.
Loan Financing Risk: It is considered inadvisable for unitholders to finance the purchase of fund units
through borrowings. The price/value of units will fluctuate with the underlying fund portfolio and
unitholders may find themselves faced with the scenario of being forced to provide additional funds
to top up on their loan margins when the market goes down, or suffer the higher cost of financing
when interest rates trend upwards; both these events increase the potential for capital loss. In addition,
the returns on unit trusts are not guaranteed and may not be earned evenly over time.
15
INTRODUCTION TO UNIT TRUST FUNDS (CONT’D)
3.
Compliance Risk: There is the risk that the Manager and others associated with the fund will not
comply with the deed of the fund, the law that governs the fund, or the internal policies, procedures
and controls. Non-compliance of the deed, the law, or the internal policies, procedures and controls
may affect the investment of unitholders.
2.5 INVESTOR PROFILE
Investors of unit trust funds are likely to range from conservative to moderate, and sometimes even
(very) aggressive in their investment outlook. They seek long term capital growth on their investments
at an acceptable level of risk, and with minimal volatility to their investments. Investing in unit trusts
thus provides them with the avenue to achieve their long-term financial goals while satisfying this
investment criteria.
2.6 FEES, CHARGES AND MANAGEMENT EXPENSE RATIO
Investors may incur fees and charges upon the purchase, sale and holding of their investments in unit
trust funds.
A service charge is a front-end fee incurred by an investor when he purchases units of a fund. It is
represented by the spread between the NAV and Selling Price of a unit. The service charge is computed
by adding a certain percentage to the NAV per unit.
A repurchase charge is a back-end redemption fee incurred (if charged) whenever a unitholder sells his
units back to the Manager. It is represented by the spread between the NAV and Repurchase Price of a
unit. The repurchase charge is normally computed by deducting a certain percentage from the repurchase
proceeds.
Management expenses include expenses for portfolio management, the manager’s fees, trustee and
custody costs, audit fees, administrative charges like printing of annual reports, distribution cheques,
postage and other services properly incurred in the administration of the fund. These costs are paid out
of the fund’s assets.
Management Expense Ratio (MER) is the ratio of the inherent costs incurred in operating a unit trust
fund to the fund’s average net asset. MER allows unitholders and investors to make direct comparisons
of the costs carried by competitor funds of the same fund categories/peer funds e.g. between one balanced
fund and another. Through comparing the MERs of peer funds, the unitholders will be able to arrive at
an informed judgement as to whether the expenses of a fund that he is invested with can be considered
to be excessive.
Costs are an important consideration in choosing a fund. The annual costs of operating the fund can
erode a substantial portion of the gross income or capital appreciation that a fund achieves. Even seemingly
small differences in fund expenses can, over time, have a dramatic impact on a fund’s performance.
2.7 FUND PERFORMANCE INDICATORS
In reviewing the performance of unit trust funds, an investor must be familiar with the following definitions
of fund returns or performance indicators:
Total Returns = The percentage change in a fund’s price (adjusted for splits and distribution paid out) for
the period.
16
INTRODUCTION TO UNIT TRUST FUNDS (CONT’D)
Average Annual Return = The percentage change in a fund’s price (adjusted for splits and distribution
paid out) for the period divided by the number of years under review. It is used to compare unit trust
returns over periods exceeding one year.
Distribution Yield = Distribution paid to unitholders out of the trust’s income (derived from capital gains,
dividend and interest income) measured as a percentage of a fund’s selling price.
Performance Benchmarks = The performance of any given fund is usually objectively evaluated by
comparing it with the performance of an appropriately chosen yardstick or benchmark. For instance, to
evaluate the performance of an equity fund that focuses on Malaysian equities in a non-specific way,
comparing it against the Malaysian equity market in general would usually be appropriate. The benchmark
for the fund therefore should be the Malaysian equity market of which the KLSE Composite Index (KLCI)
is generally accepted as representative. Furthermore, information on the KLCI is readily available to
most users and for that reason, the Index is the preferred benchmark for all Malaysian-centric equity
funds unless specific investment constraints and focus determines otherwise. For example, the Syariah
constraint on Islamic-based funds requires the use of a Syariah compliant market Index and not the KLCI
as the latter is essentially made up of a large proportion of stocks that are non-Syariah compliant. Other
funds with specific investment constraints such as funds that are confined to companies with small market
capitalisation, should not be compared to the KLCI as the Index has little to do with small sized companies.
Also, equity funds that come with major asset allocation constraints such as the balanced funds should
not be compared directly with the KLCI as the performances of the funds are likely to deviate substantially
from that of the Index over time. In such cases where the KLCI is deemed not an appropriate benchmark
to use, alternative market indices are sought or created. The choice of benchmarks used for each fund
and where appropriate, the bases for their creation are set out in Chapter 5 : Detailed Information on
The Funds. Please note also that the bond and money market funds uses selected benchmarks that are
based on fixed income or debt instruments.
2.8 DOLLAR-COST AVERAGING PRINCIPLE
The Principle of Dollar-Cost Averaging involves a disciplined regular investment technique which may be
applied to maximum effect in unit trust investing. All that an investor has to do is to invest a regular
(monthly) sum of money with a selected unit trust fund over a period of time in order to arrive at his
target principal investment amount at the end of that period. This way, he does not have to worry about
market timing, or where shares prices or interest rates are headed. His regular investment amount will
buy him less when the market is up, and more when the market is down. He will also accumulate the
units at their lowest average price over the period. This represents the dollar-cost averaging effect.
Let’s take a walk through the illustration below and see for yourself the benefits of dollar-cost averaging
through regular savings/investments in a selected unit trust fund, called Fund A.
Illustration:
Let us assume that on 31 January 2003, Investor A decided to save towards a principal sum of RM4,800
with Fund A. Instead of making a lump sum investment upfront, he chose to save regularly toward this
sum via the Dollar-Cost Averaging approach through which he invests a monthly savings of RM400 with
the fund from 31 January 2003 to 31 December 2003. Through his disciplined savings program, Investor
A was thus able to bring down the average cost of units accumulated.
17
INTRODUCTION TO UNIT TRUST FUNDS (CONT’D)
As shown below, with fixed monthly investments of RM400, Investor A was thus able to buy/accumulate
more units per investment amount of RM400 per month when the prices of units were lower, and less
units when the prices of units were higher. This represents the dollar-cost averaging effect of regular
investments. Investor A managed to average-down the average cost of his units to RM0.4742 per unit
through his regular investments. In the process, he accumulated more units with the lower average cost
of units as shown in the table below. He thus managed to accumulate a total of 10,164.84 units (inclusive
of the 500.69 units resulting from distributions and unit split) on 31 December 2003 and will await the
market upturn (in hope of reaping attractive capital gains on his “enlarged” unit holdings), as shown in
the following table:
Dollar-Cost Averaging through Fund A (31 Jan 2003 – 31 Dec 2003)
Date
Selling Price
(RM)
Monthly
Investment (RM)
No. of Units
Credited
Units
Accumulated
30-Jan-03
0.5453
400.00
733.54
733.54
28-Feb-03
0.5343
400.00
748.64
1,482.18
31-Mar-03
0.5220
400.00
766.28
2,248.46
-
20.46
500.69
2,749.15
0.4278
400.00
935.02
3,684.17
Distribution
and Unit Split
30-Apr-03
30-May-03
0.4477
400.00
893.46
4,577.63
30-Jun-03
0.4620
400.00
865.80
5,443.43
31-Jul-03
0.4800
400.00
833.33
6,276.76
29-Aug-03
0.4960
400.00
806.45
7,083.21
30-Sep-03
0.4909
400.00
814.83
7,898.04
31-Oct-03
0.5400
400.00
740.74
8,638.78
28-Nov-03
0.5208
400.00
768.05
9,406.83
31-Dec-03
0.5277
400.00
758.01
10,164.84
Principal Investment (inclusive of distribution reinvestment)
Total units on 31 December 2003
Average Selling Price of units procured
Note:
=
=
=
RM4,820.46
10,164.84
RM0.4742
The average cost of units could be higher than the current market value of the fund in times of very
bearish market conditions.
18
INTRODUCTION TO UNIT TRUST FUNDS (CONT’D)
2.9 IMPACT OF DISTRIBUTION ON UNIT PRICES AND THE EFFECT OF BUYING INTO A
SCHEME JUST BEFORE DISTRIBUTIONS ARE MADE
Whenever a distribution is made, a fund’s unit prices and net asset value per unit will be reduced accordingly.
For example, if a fund declared a net distribution of 9 sen per unit on 31 December, the following day, the
effect of the distribution on the NAV per unit and unit prices of the fund will be as follows:
NAV (RM)
Buying Price (RM)
Selling Price (RM)
Before distribution
0.9389
0.9389
1.0000
After distribution
0.8489
0.8489
0.9041
The above illustration is under the assumption that there is no market fluctuation and that the Selling
Price is computed based on a service charge of 6.5%.
Thus, there is no significant difference in buying into a fund just before distributions are made as the exdistribution unit prices of the fund would have been revised downwards to account for the distribution
payout.
19
3.
THE MANAGER
3.1 CORPORATE PROFILE OF PUBLIC MUTUAL
The funds governed under this Prospectus are managed by Public Mutual, a member of the Public Bank
Group. Public Mutual is the largest private unit trust manager in terms of NAV. In addition to the PBSeries of Funds, Public Mutual manages fifteen other unit trust funds. Incorporated on 21 July 1975
under its former name Kuala Lumpur Mutual Fund Berhad, Public Mutual began its operations on 2 July
1980 and was among the early pioneers of the industry. Public Mutual has been managing unit trust
funds in Malaysia for over two decades. The graph below shows the rapid growth in net asset value
managed by Public Mutual since the early 1990s when the unit trust industry came under the purview of
the Securities Commission Malaysia. Public Mutual currently manages RM8.9 Billion in NAV from over
530,000 account holders as at 16 April 2004. In terms of NAV and market position within the Malaysian
private unit trust industry, Public Mutual maintains the largest market share of assets under management1.
Growth of Net Asset Value
(From Dec 1992 to Dec 2003 and 16 April 2004)
10
9
8
RM Billion
7
6
5
4
3
2
1
0
NAV (RM Bil)
1992
0.16
1993
0.82
1994
1.47
1995
2.13
1996
2.37
1997
1.78
1998
2.25
1999
3.83
2000
4.11
2001
5.03
2002
5.80
2003
8.23
16-Apr-04
8.95
3.2 ORGANISATION OF PUBLIC MUTUAL
Staff Strength
Public Mutual maintains a staff strength of 357 personnel comprising 189 Executives and 168 non-Executives
as of 16 April 2004 to manage and administer its unit trust schemes.
Sales Network
Sale of the Public Series of Funds is conducted through Public Mutual’s dedicated direct sales agency
force comprising individual agents registered with the FMUTM, and related party IUTA, Public Bank. The
PB-Series of Funds, to which this prospectus relates, are distributed by Public Mutual’s related party IUTA,
Public Bank.
Public Mutual has a broad network of branches located in state capitals and major towns to service its
unitholders and markets. This comes in addition to a national web of support networks comprising the
branches of Public Bank that also act as collection centres for the banking-in of investments by unitholders.
1
Source: The Edge, Lipper Fund Table, 29 February 2004
20
THE MANAGER (CONT’D)
Customer Service, Mutual Gold and TeleMutual
Customer Service of Public Mutual attends to unitholders’ enquiries on the status of their investment
transactions, statements, distributions and other matters pertaining to their investments with the funds.
Unitholders may also take advantage of quick fund information and other transactional services currently
available on TeleMutual.
Priority clients may access the exclusive Mutual Gold Service for value-added, time saving services. Please
refer to page 60 for details.
Call our Hotline: 03-6279 5252 for direct access to Customer Service, Mutual Gold and TeleMutual.
3.3 UNIT TRUST FUNDS UNDER PUBLIC MUTUAL
Public Mutual manages 18 unit trust funds spread over four fund categories namely Equity funds, Balanced
funds, Bond funds and Money Market funds as shown below:
Public Series of Funds
Public Savings Fund
Public Growth Fund
Public Index Fund
Public Industry Fund
Public Aggressive Growth Fund
Public Regular Savings Fund
Public Balanced Fund
Public Bond Fund
Public SmallCap Fund
Public Equity Fund
Public Institutional Bond Fund
Public Money Market Fund
Syariah based Funds
Public Ittikal Fund
Public Islamic Bond Fund
Public Islamic Equity Fund
PB-Series of Funds
PB Balanced Fund
PB Growth Fund
PB Fixed Income Fund
Category
of Fund
Approved
Size of Fund
(Billion Units)
Equity
Equity
Equity
Equity
Equity
Equity
Balanced
Bond
Equity
Equity
Bond
Money Market
1.5
4.5
1.5
1.0
1.0
3.0
1.5
1.5
0.5
5.0
2.0
1.0
0.750
1.210
0.720
0.250
0.417
0.862
0.458
0.887
0.129
0.692
1.073
0.056
1.202
2.358
0.949
0.460
0.676
1.639
0.638
0.880
0.195
2.162
1.073
0.056
Equity
Bond
Equity
2.0
0.3
2.0
0.706
0.049
0.456
0.828
0.048
1.532
Balanced
Equity
Bond
0.3
0.6
0.3
0.091
0.046
0.098
0.114
0.068
0.097
29.5
8.950
14.975
TOTAL
21
Net
Asset Value
as at
16-4-2004
(RM Billion)
Units In
Circulation
as at
16-4-2004
(Billion Units)
THE MANAGER (CONT’D)
3.4 FUNCTIONS, DUTIES AND RESPONSIBILITIES OF THE MANAGER
The Manager of a unit trust scheme pools together the collective investments of unitholders and
professionally invests the monies within prescribed limits, restrictions and guidelines to meet the objective
of the unit trust scheme. The Manager is under a fiduciary duty to act in good faith and to avoid
advancing a conflicting interest and to exercise due care and diligence when managing the monies of a
unitholder and when making any investments for the unit trust scheme.
The general functions, duties and responsibilities of the Manager include, but is not limited to, the
following:1.
to ensure that a unit trust scheme is managed within the ambit of the Deed, the Securities
Commission Act 1993, the Securities Laws and the relevant guidelines at all times;
2.
any application to the Securities Commission e.g. to increase the size of the unit trust scheme, the
renewal of the Prospectus etc;
3.
the success in the launch and sales of any unit trust scheme, and to provide customer support and
distribution agency networks to best serve the unitholders of the scheme;
4.
to keep the unitholders informed of the management and performance of the unit trust scheme
through the interim and annual reports;
5.
to ensure that the interest of the unitholders is best served and protected at all times.
3.5 COMPLIANCE UNIT
The Internal Audit and Compliance Department in Public Mutual maintains strict oversight of the
compliance practices within each unit trust scheme and also that of the Manager in order to ensure
compliance with the stringent requirements of the Securities Commission Act 1993 and Guidelines on
Unit Trust Funds. The department, thus, is responsible for ensuring that Public Mutual and its unit trust
schemes observe, comply, and practise high standards of regulatory and operational compliance in keeping
with the fiduciary duties and responsibilities.
The profile of the designated person responsible for compliance matters is as set out below:
Deputy Senior Manager - Internal Audit and Compliance
En. Abdul Samad B. Jaafar, is a Certified Internal Auditor, Certified Financial Planner, chartered member
of the Institute of Internal Auditors Malaysia and a member of the Information Systems Audit and Control
Association. He holds a BA (Hons) degree in Accounting and Management Control from Sheffield Hallam
University, UK and a Master in Business Administration from International Islamic University Malaysia.
He joined Public Mutual in 1998. He has more than ten years working experience in audit, finance and
treasury operations and computerisation projects. He first joined Public Mutual as the Audit Manager
and assumed his present post in 2000.
22
THE MANAGER (CONT’D)
3.6 FINANCIAL PERFORMANCE OF PUBLIC MUTUAL
The following is a summary of the past performance of Public Mutual based on audited accounts for the
past three financial years ended 31 December:
2001
RM’000
Paid-Up Capital
2002
RM’000
2003
RM’000
6,000
6,000
6,000
Shareholders’ Funds
129,215
162,154
199,262
Turnover
107,658
128,716
151,390
Pretax Profit
38,320
43,918
54,808
Profit After Tax
26,820
32,745
38,608
The Manager is not engaged in any material litigation and arbitration, either as plaintiff or defendant,
and is not aware of any proceedings, pending or threatened or of any facts likely to give rise to any
proceedings which might materially and adversely affect its business or financial position.
3.7 THE BOARD OF DIRECTORS
Responsibility of the Board
The Board of Directors meets monthly, and is involved in determining the corporate policies and direction
of the Company. The detailed day-to-day running of the Company is left largely with the management
of Public Mutual.
There are five members on the Board, of which two are Independent Directors. The profiles of the Directors
are set out below.
Board Members
Dato’ Lee Kong Lam - Non Independent Director (Chairman)
Datuk Tay Ah Lek - Non Independent Director
Mr. Edmond Cheah Swee Leng - Chief Executive Officer/Executive Director - Non Independent
Dato’ (Dr) Mohamed Ishak Bin Haji Mohamed Ariff - Independent Director
Tuan Haji Abdul Aziz Bin Omar - Independent Director
Director (Chairman) - Non Independent
Dato’ Lee Kong Lam is a Director of Public Mutual since July 1999. He was appointed as an Executive
Director of Public Bank; and as a Director of Public Finance Bhd. and Public Merchant Bank Bhd. in
November 2001. He joined Public Bank in November 1996 as General Manager and was subsequently
appointed Senior General Manager in November 1997 and Executive Vice President in December 1998.
He is also a Director of several companies within the Public Bank Group.
Prior to joining Public Bank, he was with Bank Negara Malaysia (BNM) and was involved primarily in the
supervision and examination of banking institutions. He retired in August 1996 as the Head of BNM’s
Examination Department and as a member of the BNM’s Management Committee.
He is a Fellow of the Australian Society of Certified Practising Accountants; a Fellow of the Chartered
Institute of Bankers, United Kingdom; and a Chartered Accountant of the Malaysian Institute of
Accountants.
23
THE MANAGER (CONT’D)
Director - Non Independent
Datuk Tay Ah Lek is a Director of Public Mutual since August 1995. He was appointed as an Executive
Director of Public Bank in June 1997 and has been re-designated as Managing Director with effect from
July 2002. He was appointed as a Director of Public Finance Bhd. since 1996. He was the Executive Vice
President of Public Bank from 1995 to 1997 and prior to this appointment, he was the Executive Vice
President of Public Finance Bhd. He joined the Public Bank Group as a pioneer staff in 1966 and has 43
years experience in the banking and finance industry.
He holds a Master degree in Business Administration from Henley, United Kingdom and attended the
Advanced Management Program at Harvard Business School. He is a Fellow of the Australasian Institute
of Banking and Finance and the Institute of Bankers Malaysia.
He is presently the Chairman of the Association of Finance Companies of Malaysia and Honorary Advisor
to the Association of Hire Purchase Companies Malaysia. He is a Council Member of the National Economic
Action Council and the National Payments Advisory Board.
Chief Executive Officer/Executive Director - Non Independent
Mr. Edmond Cheah Swee Leng B.A. (Hons), A.C.A., CFP, is the Executive Director and Chief Executive
Officer of Public Mutual and a member of the Investment Committee of the various unit trust schemes
managed by Public Mutual. Mr. Cheah is a member of the Institute of Chartered Accountants of England
and Wales and a Chartered Accountant of the Malaysian Institute of Accountants.
His previous work experience includes auditing, portfolio and investment management, corporate planning
and merchant banking. With regards to past investment experience, Mr Cheah has been involved in unit
trust management since 1984 when he started his career in portfolio management in a merchant bank,
where he was responsible for the management of the portfolios of the bank’s clientele. Prior to joining Public
Mutual, Mr. Cheah was the General Manager of Investment and Corporate Planning of a public listed company.
In 1992, he joined Public Mutual as its Deputy Managing Director and was subsequently appointed Chief
Executive Officer on 22 February 1994. As Deputy Managing Director, his responsibility was for managing
the funds of Public Mutual until he was promoted to Chief Executive Officer. In addition to his role as
Chief Executive Officer, Mr Cheah oversees the direction and portfolio management of Public Mutual’s
unit trust funds. Since he joined Public Mutual, the total fund size under management has grown from
RM159 million to its current level of above RM8 billion. Several of Public Mutual’s funds have won
awards for best performance in various categories such as equity funds, bond funds and Islamic equity
funds over the past few years.
Mr Cheah was first appointed a council member of the FMUTM and Chairman of Tax & Accounting for
the FMUTM since 13 December 1995. He is currently the Vice President of FMUTM and a founder member
and President of the Financial Planning Association of Malaysia (FPAM), and Chairman of its Board of
Certification and Standards.
He co-authored a financial planning book entitled “Financial Freedom - Your Guide To Lifetime Financial
Planning” and a second book entitled “Financial Freedom - Through Malaysian Equities and Unit Trusts”.
Independent Director
Dato’ (Dr) Mohamed Ishak Bin Haji Mohamed Ariff is a Director of Public Mutual since December 1993. A
qualified Professional Chartered Town Planner and a Professional Landscape Architect by profession,
Dato’ Mohamed Ishak was honoured in May 1993 by the University of Newcastle-Upon-Tyne, England,
with an Honorary Doctorate in Civil Law.
Dato’ Mohamed Ishak is the Chairman of Yee Lee Corporation Berhad. He is an Independent NonExecutive Director of Public Bank, Public Finance Bhd. and Public Merchant Bank Bhd. He is also a member
of the Board of Directors of Faber Group Berhad, Galeri Shah Alam, MIMA Holdings Enterprise Sdn. Bhd.
and P&D Consultants Sdn. Bhd. He is a member of the Advisory Board of the city of Kuala Lumpur.
24
THE MANAGER (CONT’D)
Independent Director
Tuan Haji Abdul Aziz Bin Omar is a Director of Public Mutual since December 1993. He is a Chartered
Accountant (England and Wales) by profession, and is also a member of the Malaysian Institute of
Accountants. His past experiences had been in the areas of property, plantation, hotelling, trading,
manufacturing and banking. He became a Fellow member of the Institute of Bankers Malaysia during
his past banking services.
Tuan Haji Abdul Aziz sits as an Independent Non-Executive Director on the Boards of Directors of Public
Bank, Public Finance Bhd., Public Merchant Bank Bhd. and PB Securities Sdn. Bhd. In addition, he is a
member of the Audit Committee of each of these companies.
3.8 PROFILE OF KEY MANAGEMENT STAFF
Chief Executive Officer/Executive Director
Mr. Edmond Cheah Swee Leng - Please refer to his profile as set out in Section 3.7 (page 24) of this
Chapter.
Senior General Manager
Mr. Wong Boon Choy, CA(M), CPA, CFP, is the Senior General Manager of Public Mutual since 1996. He
joined Public Mutual in 1988 and since then has accumulated more than fifteen years of experience in
the Malaysian unit trust industry. He first took charge of finance and accounting before moving on to
oversee other areas of operations including information technology, marketing and sales of unit trusts.
Prior to joining Public Mutual, he was with an international accounting firm for eight years.
Mr. Wong was involved in establishing the FMUTM. He was appointed the Founding Secretary in August
1993 and held that position for two years. He was exposed to foreign unit trust industries when he
participated in the Federation’s Study Trips to Hong Kong, United Kingdom and Australia.
He is a founder member and treasurer of the Financial Planning Association of Malaysia (FPAM). A
believer in financial planning, he co-authored a financial planning book entitled “Financial Freedom Your Guide To Lifetime Financial Planning” and a second book entitled “Financial Freedom - Through
Malaysian Equities and Unit Trusts”.
General Manager - Investment
Mr. Chong Chang Choong, B.A. (Hons), is a member of the Institute of Chartered Accountants of England
and Wales. Prior to joining Public Mutual in 1995, Mr Chong’s previous areas of experience include
auditing, banking, portfolio management and stockbroking. With regards to past investment experience,
Mr Chong was a fund manager with a life insurance company where he managed a RM300mil insurance
fund which held investments in equities, fixed income securities and properties. After serving three years
in this position, Mr Chong became an institutional dealer with an established stockbroking firm for four
years before leaving to assume his present position of General Manager - Investment at Public Mutual in
1995.
Mr. Chong is responsible for the direction and portfolio management of Public Mutual’s unit trust funds.
Since he joined Public Mutual, the total fund size under management has grown from RM2.1 billion to
its current level of above RM8 billion. As an indication of Mr Chong’s investment abilities, over the last
few years several of Public Mutual’s funds have won awards for best performance in various categories
such as equity funds, bond funds and Islamic equity funds.
25
THE MANAGER (CONT’D)
General Manager - Sales & Training
Mr. Patrick Nge Koh Nguong, CFP, graduated from Bristol University, England, in Economics and Accounting
and obtained his training in England and Malaysia with international accounting firms for about four
years. He joined Public Mutual as an agent in 1986 and was promoted to Group Agency Manager before
joining Public Mutual as Branch Manager of Kota Kinabalu Branch in 1991. He was subsequently promoted
to Regional Sales Manager for East Malaysia in 1993. He assumed the position of Senior Manager - Sales
and Marketing in 1994, and later, as Senior Manager - Sales and Training before being appointed to his
present post in 1999. He is responsible for Public Mutual’s national sales operations and distribution, and
agency force training and development programmes.
General Manager - Finance & Operations
Ms. Yeoh Kim Hong, is a member of the Malaysian Institute of Accountants and the Malaysian Institute
of Certified Public Accountants. She joined Public Mutual in 1996 and has since accumulated more than
eight years of experience in the various aspects of unit trust operations. In her current position, she is
responsible for the Company’s finance and accounts, as well as other areas of operations including
administration, product research, product development, business processes and re-engineering, and
regulatory issues. Prior to joining Public Mutual, she was with an international accounting firm for more
than ten years during which she gained exposures in auditing and management consultancy, both locally
and in the United States. She is also a joint Company Secretary of Public Mutual.
General Manager - Information Technology
Mr. Richard Tan Koon Eam, holds a diploma in Computer Science and 20 years experience in the information
technology sector. Mr. Tan possesses a wide knowledge base which includes software design &
development, project management, consultancy and web-based application development. He joined
Public Mutual in 2000. Prior to joining Public Mutual, he was a Chief Technical Officer of a MSC status
company specialising in E-commerce solutions. He is responsible for Public Mutual’s information technology
strategies and operations.
3.9 PROFILE OF FUND MANAGERS
Chief Executive Officer/Executive Director
Mr. Edmond Cheah Swee Leng - Designated fund manager of Public Savings Fund, Public Growth Fund,
Public Index Fund, Public Industry Fund and Public SmallCap Fund. Mr. Cheah’s profile is set out in
Section 3.7 (page 24) of this Chapter.
General Manager - Investment
Mr. Chong Chang Choong - Designated fund manager of Public Aggressive Growth Fund, Public Regular
Savings Fund, Public Balanced Fund, Public Bond Fund, Public Ittikal Fund, Public Islamic Bond Fund,
Public Equity Fund, Public Institutional Bond Fund, Public Islamic Equity Fund, Public Money Market
Fund, PB Balanced Fund, PB Growth Fund and PB Fixed Income Fund. Mr. Chong’s profile is set out in
Section 3.8 (page 25) of this Chapter.
Senior Manager - Fund Management
Mr. Lum Ming Jang - Designated co-fund manager of the Public Savings Fund, Public Growth Fund, Public
Index Fund, Public Industry Fund and Public SmallCap Fund.
Mr. Lum holds an honours degree in Accountancy from the National University of Singapore and is a Chartered
Financial Analyst. He joined Public Mutual in 2001 as Senior Manager - Investment Research and assumed
his present position as Senior Manager - Fund Management and co-designated fund manager in 2003.
26
THE MANAGER (CONT’D)
Mr. Lum has more than 15 years of experience in investment research and stock broking. Prior to joining
Public Mutual, Mr. Lum held management positions at various established local and foreign stock broking
houses, overseeing their investment research functions and institutional sales. More specifically, Mr. Lum’s
investment research experience include assessing corporate earnings growth prospects, evaluating
management track record, computation of stock valuations and financial analysis of listed companies on
the MSEB. He is also familiar with analysis of financial and economic trends which affect stockmarket
movements. Mr Lum will make full use of his experience in the investment field to execute his duties as
the designated co-fund manager.
Manager - Fund Management
Mr. Tan Yan Heong - Designated co-fund manager of Public Aggressive Growth Fund, Public Regular
Savings Fund, Public Balanced Fund, Public Bond Fund, Public Ittikal Fund, Public Islamic Bond Fund,
Public Equity Fund, Public Institutional Bond Fund, Public Islamic Equity Fund, Public Money Market
Fund, PB Balanced Fund, PB Growth Fund and PB Fixed Income Fund.
Mr. Tan holds a B.Sc. (Hons) Degree in Actuarial Science from University of Kent, Canterbury, England. He
joined Public Mutual in early 1994 as an Investment Analyst and has since accumulated more than 10
years of working experience in investment research and management. He assumed his present capacity
as an assisting co-designated fund manager since early 2000.
Throughout his time with Public Mutual, he has accumulated experience in managing equity portfolios ranging
from making individual investment trading decisions to performing stock analyses and investment valuations.
In managing the bond portfolios, he has been involved in a number of areas ranging from credit analysis
and bond selection to performing the day-to-day money management tasks. He has also contributed
significantly to the development of bond management capabilities within the in-house developed portfolio
management system.
As co-designated fund manager, he has helped several of these funds win awards for best performance
in various categories such as equity funds, bond funds and Islamic equity funds over the past 4 years.
3.10 AWARDS WON BY PUBLIC MUTUAL
On 24 February 2004, Public Mutual received The Fund Management Company Special Award for Highest
Number of Best Performing Funds in The Edge-Lipper Malaysia Unit Trust Fund Awards 2003. Besides the top
accolade, Public Mutual also bagged the following best fund awards for the year ended 31 December 2003:
Fund
Year(s)
Category
Public Islamic Bond Fund
Public Ittikal Fund
Public Bond Fund
Public Index Fund
Public Bond Fund
1 Year
3 Years
3 Years
5 Years
5 Years
Bond Islamic/Syariah
Equity Islamic/Syariah
Bond General
Equity Index Tracking
Bond General
On 1 April 2004, the following best performing fund awards for the year ended 31 December 2003 were
also won by Public Mutual in The Star/Standard & Poor’s Investment Funds Award Malaysia 2004:
Fund
Year(s)
Category
Public Islamic Bond Fund
Public Ittikal Fund
Public Bond Fund
Public Bond Fund
1 Year
3 Years
3 Years
5 Years
Fixed Income Islamic Fund
Sector-Islamic Syariah Fund
Fixed Income MYR Fund
Fixed Income MYR Fund
27
THE MANAGER (CONT’D)
3.11 INVESTMENT MANAGEMENT FUNCTION OF THE MANAGER
Public Mutual maintains an internal pool of portfolio managers and investment research analysts to
undertake the fund management of its unit trust funds. The Fund Managers of Public Mutual possess
the necessary expertise and experience to invest in local and foreign securities. The investment
methodology that is applied to all investment decisions including investments in foreign securities is
mainly based on fundamental analysis. The overall responsibility to oversee and review the portfolio
strategies recommended by the Fund Managers rests with the Investment Committee.
Investment Committee
The Investment Committee oversees the investment process of the funds, particularly with regard to
reviewing the asset allocation and investment strategies proposed by the Fund Manager and his team.
The members of the Investment Committee comprises the Board of Directors of Public Mutual and the
dates of appointment of the respective members of the Investment Committee are as follows:
Dato’ Lee Kong Lam was appointed as a non-independent member of the Investment Committee of
Public Savings Fund, Public Growth Fund, Public Index Fund, Public Industry Fund, Public Aggressive
Growth Fund, Public Regular Savings Fund, Public Balanced Fund, Public Bond Fund, Public Ittikal Fund
and PB Balanced Fund on 27 July 1999, Public SmallCap Fund on 5 June 2000, Public Equity Fund and
Public Islamic Bond Fund on 17 July 2001, PB Growth Fund and PB Fixed Income Fund on 9 May 2002,
Public Institutional Bond Fund and Public Islamic Equity Fund on 24 March 2003 and Public Money Market
Fund on 28 October 2003.
Datuk Tay Ah Lek was appointed as a non-independent member of the Investment Committee of Public
Savings Fund, Public Growth Fund, Public Index Fund, Public Industry Fund, Public Aggressive Growth
Fund, Public Regular Savings Fund, and Public Balanced Fund on 10 August 1995, Public Bond Fund on 11
June 1996, Public Ittikal Fund on 4 April 1997, PB Balanced Fund on 9 March 1998, Public SmallCap Fund
on 5 June 2000, Public Equity Fund and Public Islamic Bond Fund on 17 July 2001, PB Growth Fund and PB
Fixed Income Fund on 9 May 2002, Public Institutional Bond Fund and Public Islamic Equity Fund on 24
March 2003 and Public Money Market Fund on 28 October 2003.
Mr. Edmond Cheah Swee Leng was appointed as a non-independent member of the Investment Committee
of Public Savings Fund, Public Growth Fund, Public Index Fund and Public Industry Fund on 22 February
1994, Public Aggressive Growth Fund and Public Regular Savings Fund on 25 April 1994, Public Balanced
Fund on 7 June 1995, Public Bond Fund on 11 June 1996, Public Ittikal Fund on 4 April 1997, PB Balanced
Fund on 9 March 1998, Public SmallCap Fund on 5 June 2000, Public Equity Fund and Public Islamic Bond
Fund on 17 July 2001, PB Growth Fund and PB Fixed Income Fund on 9 May 2002, Public Institutional
Bond Fund and Public Islamic Equity Fund on 24 March 2003 and Public Money Market Fund on 28
October 2003.
Dato’ (Dr) Mohamed Ishak Bin Haji Mohamed Ariff was appointed as an independent member of the
Investment Committee of Public Savings Fund, Public Growth Fund, Public Index Fund and Public Industry
Fund on 16 December 1993, Public Aggressive Growth Fund and Public Regular Savings Fund on 25 April
1994, Public Balanced Fund on 7 June 1995, Public Bond Fund on 11 June 1996, Public Ittikal Fund on 4
April 1997, PB Balanced Fund on 9 March 1998, Public SmallCap Fund on 5 June 2000, Public Equity Fund
and Public Islamic Bond Fund on 17 July 2001, PB Growth Fund and PB Fixed Income Fund on 9 May 2002,
Public Institutional Bond Fund and Public Islamic Equity Fund on 24 March 2003 and Public Money Market
Fund on 28 October 2003.
28
THE MANAGER (CONT’D)
Tuan Haji Abdul Aziz Bin Omar was appointed as an independent member of the Investment Committee
of Public Savings Fund, Public Growth Fund, Public Index Fund and Public Industry Fund on 1 December
1993, Public Aggressive Growth Fund and Public Regular Savings Fund on 25 April 1994, Public Balanced
Fund on 7 June 1995, Public Bond Fund on 11 June 1996, Public Ittikal Fund on 4 April 1997, PB Balanced
Fund on 9 March 1998, Public SmallCap Fund on 5 June 2000, Public Equity Fund and Public Islamic Bond
Fund on 17 July 2001, PB Growth Fund and PB Fixed Income Fund on 9 May 2002, Public Institutional
Bond Fund and Public Islamic Equity Fund on 24 March 2003 and Public Money Market Fund on 28
October 2003.
For profiles of the members of the Investment Committee, please refer to pages 23 to 25.
The Committees meets monthly and keeps in purview the achievement of the long-term investment
objective of the funds. The detailed functions of the Investment Committees are as follows:
1.
2.
3.
4.
5.
Review the performances and portfolios of the funds.
Review the performance of the markets and their respective outlook.
Review and approve the portfolio strategies recommended by the Investment Department.
Review the foreign portfolio strategies of the funds.
Review the reports on weekly sale and purchase of investments.
Declaration of Conflict of Interest
All transactions carried out for or on behalf of the funds are executed on terms that are best available to
the funds and which are no less favourable than arm’s length transactions between independent parties.
Where a conflict of interest arises due to the investment committee member or director holding substantial
shareholding or directorships of public companies, and the fund(s) invests in that particular share or
stock belonging to a public listed company, the said committee member or director shall abstain from
any decision making relating to that particular share or stock of the fund(s).
Employees of the Manager who are directly involved in the investment management of the fund(s) or
who have direct and timely access to the daily trades done by the Fund Managers, are required to declare
their dealings in securities.
Fund Management and the Investment Process
The investment management of the unit trust funds under the management of Public Mutual is undertaken
by the Investment Department which is headed by Mr. Chong Chang Choong, General Manager Investment. He reports directly on the management of the funds to the Chief Executive Officer.
Mr. Chong is assisted by Mr. Lum Ming Jang, Senior Manager - Fund Management and two other managers,
Mr. Tan Yan Heong, Manager - Fund Management, and Encik Zaharudin Ghazali, Manager - Fixed Income
Management. Please refer to pages 26 and 27 for profiles of the fund managers.
A key part of the investment management process involves the research of securities, capital markets
and the economy. Mr. Lum oversees the Investment Research Section which comprises of a team of
analysts and administrative staff. Based on the research work undertaken by the Investment Research
Section, reports and recommendations will be presented to the Fund Managers for their deliberation.
29
THE MANAGER (CONT’D)
Organisation Structure of the Investment Department
Investment Committee
Chief Executive Officer
General Manager - Investment
FUND MANAGEMENT
Investment
Management
Senior Manager
Manager
INVESTMENT RESEARCH
Fixed Income
Management
(1)
(1)
Manager
Executive
Assistant
Investment Research
and Statistics
(1)
(1)
(1)
Manager
Assistant Manager
Senior Executive
(1)
(2)
(1)
Investment
Administration
Junior Executive
(2)
Key Job Functions of the Investment Department
Chief Executive Officer
Responsible for the overall direction and asset allocation of the unit trust funds under Public Mutual.
Reviews and monitors the performance of the funds.
Evaluates and approves strategic investment decisions and policies recommended by the General
Manager - Investment.
Oversees the daily management of the funds.
General Manager - Investment
Responsible for the daily portfolio management of the unit trust funds under Public Mutual.
Recommends strategic investment decisions and policies to the Chief Executive Officer for approval.
Responsible in ensuring that the investments of the funds comply with their investment guidelines.
Oversees and supervises the administration of the Investment Department.
Senior Manager - Fund Management
Involves in the daily and key portfolio management functions as a co-Fund Manager.
Responsible for providing feedback on the fundamental outlook of the local stock market.
Prepares investment reports to unit trust holders.
Presents economic and stockmarket views at investment seminars for the agency force.
Oversees and supervises the Investment Research Section.
Manager - Fund Management
Involves in the daily and key portfolio management functions as a co-Fund Manager.
Manages and oversees the Futures and Options operations of the funds.
Analyses and reports on the performance of the funds and their components.
Provides research and market intelligence feedback on the markets and stocks.
Provides technical assistance on matters relating to the systems and software.
Provides assistance on issues relating to the management of Islamic funds.
30
THE MANAGER (CONT’D)
Manager - Fixed Income Management
Assists in the day-to-day management of the fixed income portfolios of the funds.
Manages the daily placement and withdrawal of funds with approved financial institutions.
Provides feedback on the trading activities in the money markets to facilitate the management of the
bond portfolios.
Provides assistance on issues relating to the Islamic funds.
Investment Research Unit
Carries out the financial analysis of listed companies and monitors the performance of the economy
to facilitate the investment decision-making process.
Monitors corporate developments and performs in-depth evaluation of companies through site visits
and meetings with the management.
Assists in the preparation of investment reports for the fund management team and for dissemination
to unit trust holders and agents.
3.12 RETIREMENT, REMOVAL AND REPLACEMENT OF THE MANAGER
The Manager may retire upon giving twelve (12) months notice to the Trustee of its desire to do so, or
such shorter period as the Manager and the Trustee shall agree upon, in favour of some other corporation.
The Manager may be removed and another corporation appointed as manager by Extraordinary Resolution
of the unitholders at a Unitholders’ Meeting convened in accordance with the Deed either by the Trustee
or the unitholders.
The Trustee shall take reasonable steps to remove and replace the Manager as soon as practicable after
becoming aware of any such circumstances as stated on page 33.
3.13 POWERS OF THE MANAGER TO REMOVE AND REPLACE THE TRUSTEE
In the event of any of the situations occurring below, the onus lies with the Manager to take all reasonable
steps to replace the Trustee (in order to protect the interest of the scheme) as soon as practicable after
becoming aware that:
(a)
(b)
(c)
(d)
(e)
(f)
The Trustee has ceased to exist;
The Trustee has not been validly appointed;
The Trustee is not eligible to be appointed or to act as Trustee under section 99 of the SC Act 1993;
The Trustee has failed or refused to act as Trustee in accordance with the provisions or covenants of
the Deed or the provision of the SC Act 1993;
A receiver is appointed over the whole or a substantial part of the assets or undertaking of the
existing Trustee and has not ceased to act under the appointment, or a petition is presented for the
winding up of the existing Trustee (other than for the purpose of and followed by a reconstruction,
unless during or following such reconstruction the existing Trustee becomes or is declared to be
insolvent); or
The Trustee is under investigation for conduct that contravenes the Trust Companies Act 1949, the
Trustee Act 1949, the Companies Act 1965 or any securities law.
In addition to the above, the Trustee may be removed and another Trustee appointed by Extraordinary
Resolution of the unitholders at a Unitholders’ Meeting convened in accordance with the Deed either by
the Manager or the unitholders.
31
4.
THE TRUSTEE
4.1 THE TRUSTEE’S WILLINGNESS TO ASSUME POSITION
Amanah Raya Berhad (“ARB”) has indicated their willingness to assume the position and all the obligations
that comes along with it under the deed, all relevant written laws and rule of law.
4.2 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE
The Trustee of the funds will perform among others the following duties and responsibilities:
1.
2.
3.
4.
5.
6.
Acts as the custodian of the funds and safeguards the interest of the unitholders;
Exercises all due diligence and vigilance in carrying out its functions and duties in accordance with
the Deed, SC Guidelines, SC Act and securities laws;
Ensures that the Manager manages and administers the funds in accordance with the Deed, SC
Guidelines, SC Act and securities laws;
Ensures proper records are kept of all transactions, dividends, interest and income received and
distributed in respect of the funds;
Requires the Manager to keep the Trustee fully informed as to the details of the Manager’s policies
in investments and any changes thereof;
Ensures the accounts are audited at the end of each accrual period by the auditors and ensure that
each Unitholder receives a copy of the audited annual accounts within two months after the financial
year end.
4.3 PROFILE OF AMANAH RAYA BERHAD (“ARB”)
ARB, previously known as the Public Trustee Department (a Government Department within the Ministry
of Law) was corporatised under the Companies Act 1965 pursuant to Section 3 of the Public Trust
Corporation Act, 1995. ARB was incorporated on 29 May, 1995 and commenced its operation on 1
August, 1995. It employs 352 staff comprising 103 Executives and 249 non-Executives as at 16 April 2004.
It has sixty three (63) unit trust schemes under its trusteeship as at 16 April 2004. ARB has 38 years of
experience as Trustees to unit trust funds since 1966.
Financial Performance
The following is a summary of the past performance of ARB:
Paid-Up Share Capital
Shareholders’ Funds
Turnover
Pretax Profit
Profit After Taxation
Note:
Year Ended
31.7.2001
(Audited)
RM’000
Year Ended
31.7.2002
(Audited)
RM’000
Period Ended
31.12.2003
(Unaudited)
RM’000
6,000
40,471
24,784
10,649
7,344
6,000
47,156
27,813
10,005
7,284
6,000
59,675
29,451
3,098
2,231
There is no audited financial statements of ARB as at 31 July 2003 as the Company has changed its
financial year end to 31 December 2003.
32
THE TRUSTEE (CONT’D)
The Trustee is not engaged in any material litigation and arbitration, either as plaintiff or defendant,
and the Trustee is not aware of any proceedings, pending or threatened or of any facts likely to give rise
to any proceedings which might materially and adversely affect its financial position or business.
Board of Directors
Dato’ Haji Dusuki Bin Haji Ahmad - Chairman
En. Izham Bin Yusoff - Managing Director
En. Mohamed Bazain Bin Idris - Director
Tuan Haji Ab. Gani Bin Haron - Director
Datin Aminah Binti Pit Abd Raman - Director
En. Ahmad Kamal Bin Abdullah Al-Yafii - Director
Dato’ Wan Ahmad Farid Bin Wan Salleh - Director
Tuan Haji Yaacob Bin Hussin - Director
4.4 RETIREMENT, REMOVAL AND REPLACEMENT OF THE TRUSTEE
The Trustee may retire upon giving twelve (12) months notice to the Manager of its desire to do so, or
such shorter period as the Manager and the Trustee shall agree upon, and may appoint a new Trustee in
his stead or as additional Trustee.
The Trustee may be removed and another Trustee appointed by Extraordinary Resolution of the unitholders
at a Unitholders’ Meeting convened in accordance to the Deed either by the Manager or the unitholders.
The Manager shall take reasonable steps to remove and replace a Trustee as soon as practicable after
becoming aware of any such circumstances as stated on page 31.
4.5 POWERS OF THE TRUSTEE TO REMOVE AND REPLACE THE MANAGER
The Manager may be removed and replaced, if so required by the Trustee, on the grounds that:(a)
(b)
(c)
(d)
An Extraordinary Resolution to that effect has been duly passed by the unitholders at a meeting
called for that purpose;
The Manager is in breach of its obligations under the Deed;
The Manager has failed or neglected to carry out its duties to the satisfaction of the Trustee and
the Trustee considers that it would be in the interests of unitholders for it to do so, after the
Trustee has given notice and reasons and has considered any representations made by the Manager
in respect of that opinion, and after consultation with the relevant authorities and with the approval
of the unitholders; or
The Manager has gone into liquidation (except a voluntary liquidation for the purpose of
amalgamation or reconstruction or some similar purpose) or has had a receiver appointed or has
ceased to carry on business,
and the Manager shall not accept any extra payment or benefit in relation to such removal or replacement
or retirement.
In any of the cases aforesaid the Manager for the time being shall upon receipt of such notice by the
Trustee cease to be the Manager and the Trustee shall by writing under his seal appoint some other
corporation to be the Manager of the fund subject to such corporation entering into a Deed or Deeds
with the Trustee and thereafter act as Manager during the remainder period of the fund.
33
5.
DETAILED INFORMATION ON THE FUNDS
5.1 CATEGORIES OF FUNDS
Public Mutual currently promotes three categories of funds under the PB-Series of Funds, namely equity
fund, balanced fund and bond fund. In terms of these three fund categories, the difference among
them lies with the (asset) allocation among the various asset classes i.e. between equities and bonds,
resulting thus in different emphasis being placed on capital growth and income.
Generally, to be categorised as an equity fund denotes that a higher proportion of the fund assets will
be invested in stocks/shares in order to secure capital growth for unitholders, with income considered
incidental. A balanced fund, in turn, would focus on attaining a balance between long-term capital
growth and regular income by investing partly in stocks/shares (though not to the same extent as an
equity fund), and partly in fixed income securities (but to a lesser extent than a bond fund). Moreover,
the distribution of its income, though regular, may not mean annually as in the case of a bond fund. A
bond fund, concentrates chiefly on investing in fixed income securities to secure and distribute annual
income to unitholders, with capital growth considered incidental to the investment process.
The forthcoming paragraphs under this Chapter provides further information on the funds’ profiles
(paragraph 5.2), investment risks and risk management (paragraph 5.3), authorised investments
(paragraph 5.4), investment restrictions (paragraph 5.5), valuation of authorised investments (paragraph
5.6) and policy on gearing (paragraph 5.7).
5.2 FUND PROFILES
The following section lays out the investment objective, policy, strategy and other key features of each
of the funds to assist the investor in making an informed judgement of the distinctive features of each
fund in relation to their personal investment and financial goals. Investors are requested to read the
fund profile(s) carefully before making an investment decision.
Equity Fund
PB Growth Fund (PBGF)
Pages 35-36
Balanced Fund
PB Balanced Fund (PBBF)
Pages 37-39
Bond Fund
PB Fixed Income Fund (PBFI)
Pages 40-41
34
DETAILED INFORMATION ON THE FUNDS (CONT’D)
PB GROWTH FUND (PBGF)
Fund Profile
Category of Fund
Equity fund
Type of Fund
Capital growth
Equity Range of Fund *
65% to 85%
Stock Selection Profile of Fund
Growth stocks #
Distribution Policy **
Incidental
Investor’s Risk Profile ***
Moderate
Suggested Minimum Investment
Period ****
3 years
Designated Fund Managers
Chong Chang Choong and Tan Yan Heong
Notes:
*
In the event of actual or anticipated stock market weaknesses, the equity weighting may be lower than
that of the indicated equity range.
**
Incidental distribution implies that the main focus of the fund will be on securing capital growth.
***
Moderate indicates an investor’s risk disposition favouring higher return and higher risk with the prospect
of gains and losses involved.
**** Suggested minimum investment period is a guide only. Investors should review their investment in the
fund on a regular basis to ensure it continues to meet their investment needs or goals.
#
Growth stocks are companies with good prospects for earnings growth in the future.
Fund Objective
To achieve capital growth through investment in a diversified portfolio of growth stocks.
Note: Any material changes to the investment objective of the fund would require unitholders’ approval.
Investor Profile
Moderate risk-reward temperament
long-term investor
can withstand extended periods of market highs and lows in pursuit of capital growth
Investment Policy
PBGF invests in a diversified portfolio of primarily Malaysian equities and fixed income instruments to
meet the objective of the fund. Its equity content in terms of NAV will normally range in the region of
65% to 85% of the NAV of the fund.
Investment Strategy
The fund seeks to achieve the long-term goal of capital growth by maintaining a reasonable level of
exposure to equities over time. The equity investment of the fund comprise of a diversified portfolio of
index-linked companies, blue chip stocks and companies with growth prospects that are listed on the
MSEB. In particular, companies with reasonably good earnings growth prospect over the medium to
long-term are sought after as much as possible to maximise the growth potential of the fund. In identifying
such companies, the fund relies on fundamental research where the financial health, industry prospects,
management quality and past track records of the companies are considered.
35
DETAILED INFORMATION ON THE FUNDS (CONT’D)
The fund has investments in fixed income securities such as sovereign bonds, corporate debt and money
market instruments to help generate returns. Where yields are attractive and interest rate trends are
favourable, the investment in bonds is increased. In general, however, the investment in bonds and fixed
income assets are secondary to the focus on equities. In other words, the allocations to bonds and fixed
income assets are raised usually at the expense of equity allocations when weaknesses in the equity
markets are anticipated. Conversely, when the equity markets are expected to perform well, the funds
are reallocated from fixed income assets to equities.
To achieve increased diversification, the fund may invest in markets abroad where the returns are
promising. The fund may also consider attractive investments in unlisted equities, particularly in companies
that are expected to seek listing on the MSEB within two years. To mitigate risks, the fund may also
invest in futures and options contracts to hedge against market volatility. The emphasis on growth
stocks in the equity portfolio, in particular, may result in the fund experiencing significant volatilities in
times of adverse market movements.
Fund Specific Benefits
The fund allows the investor the opportunity to participate in the long-term growth potential of the
equity market through investments in a diversified portfolio of blue chip stocks, growth stocks,
fundamentally undervalued stocks and dividend stocks. There is however greater emphasis on capital
growth with lower emphasis on income and as such its equity exposures are in the moderately high
range of between 65% and 85%. It is thus potentially a stronger performer in a rising market than a
savings oriented equity fund. Commensurate with that, it is also likely to be more volatile in terms of
returns.
Fund Specific Risk Management
The asset allocation, liquidity management, diversification and hedging strategies employed are therefore
central to the efforts to manage the risks posed to the fund. Hence, there may even be situations such as
when a severe downturn in the equity markets is expected and liquidity risks are high, that the equity
exposures are reduced to and below the minimum levels indicated in the table above. It should be noted
that the bond investments may turn in sub-par performance if not losses should interest rates hike up
sharply. As such, exposures to bonds are managed accordingly to minimise the risks.
Furthermore, the above investments are subject to limits and restrictions that are precisely spelt out in
the sections titled “Authorised Investments” and “Investment Restrictions”.
Selected Performance Benchmark for PBGF
The KLCI, or KLSE Composite Index, comprises 100 major stocks representing 63% of the MSEB’s total
market capitalisation. The core of the fund’s equity portfolio comprises of companies that are components
of the KLCI. As it is also a very widely followed and easily understood representation of the MSEB, it is
deemed the most appropriate benchmark for this fund.
To obtain the latest information on the KLCI, investors can refer to the Kuala Lumpur Stock Exchange
Berhad website (www.klse.com.my under Market Information Section) for a list of the component stocks
of the KLCI and transactional information such as last traded price, previous closing price, volume traded,
high and low for the day and other information.
36
DETAILED INFORMATION ON THE FUNDS (CONT’D)
PB BALANCED FUND (PBBF)
Fund Profile
Category of Fund
Balanced fund
Type of Fund
Income and capital growth
Equity Range of Fund *
10% to 60% (maximum)
Stock Selection Profile of Fund
Blue chips # and growth stocks #
Distribution Policy **
Incidental
Investor’s Risk Profile ***
Conservative-to-Moderate
Suggested Minimum Investment
Period ****
3 years
Designated Fund Managers
Chong Chang Choong and Tan Yan Heong
Notes:
*
In the event of actual or anticipated stock market weaknesses, the equity weighting may be lower than
that of the indicated equity range.
**
Incidental distribution implies that the main focus of the fund will be on securing capital growth.
***
Conservative-to-moderate indicates an investor’s risk disposition favouring a prudent mix of current
income and capital growth, with a balanced risk profile which assume the prospect of gains and losses
involved.
**** Suggested minimum investment period is a guide only. Investors should review their investment in the
fund on a regular basis to ensure it continues to meet their investment needs or goals.
#
Blue chips stocks are proven staple stocks with solid earnings/dividends, and continued good growth
prospects.
Growth stocks are companies with good prospects for earnings growth in the future.
Fund Objective
To provide steady income and capital growth over the medium to long term period.
Note: Any material changes to the investment objective of the fund would require unitholders’ approval.
Medium to long term period refers to a period of 3 years or more.
Investor Profile
Conservative-to-moderate risk-reward temperament
Preference for receiving regular income with a respectable measure of capital growth
Medium to long term investor
Investment Policy
To create a prudent mix of primarily Malaysian equities and fixed income securities in the ratio of 60:40
which is in line with the fund’s objective. Its equity content will range in the region of between 10% to
60% of the NAV of the fund.
37
DETAILED INFORMATION ON THE FUNDS (CONT’D)
Investment Strategy
The fund seeks to meet its objective of producing a steady and recurring income while pursuing longterm capital growth by adhering to a balanced asset allocation approach of investing up to 60% of the
NAV in equities. In this manner, a significant portion of at least 40% of NAV would be invested in bonds
and other fixed income securities to generate the required recurring income.
The equity investment of the fund primarily focuses on a diversified portfolio of index-linked companies,
blue chip stocks and companies with growth prospects that are listed on the MSEB. Generally, companies
with reasonably good earnings growth prospect over the medium to long-term are sought. In identifying
such companies, the fund relies on fundamental research where the financial health, industry prospects,
management quality and past track records of the companies are considered.
The non-equity portion of the fund is invested in fixed income securities such as sovereign bonds, corporate
debt and money market instruments. Where yields are attractive and interest rate trends are favourable,
the investments in bonds are increased. Notwithstanding the need for a stable and recurring income
stream, the investment in bonds and fixed income assets are often raised at the expense of equity
allocations when weaknesses in the equity markets are anticipated. Conversely, when the equity markets
are expected to perform well, the funds are reallocated from fixed income assets to equities.
To achieve increased diversification, the fund may invest in markets abroad where the returns are
promising. The fund may also consider attractive investments in unlisted equities, particularly in companies
that are expected to seek listing on the MSEB within two years. To mitigate risks, the fund may also
invest in futures and options contracts to hedge against market volatility. Nevertheless, its significant
exposure to equities, in particular, may result in the fund experiencing significant volatilities in times of
adverse market movements.
Fund Specific Benefits
The fund allows the investor the opportunity to invest in a balanced approach where investments are
made in equities and fixed income securities in near equal proportion to spread out the risks. The
potentially large but highly volatile returns from equity investments are moderated by the fairly stable
performance from the fixed income securities. The returns of the fund should be significantly less volatile
than the equity market as a result.
Fund Specific Risk Management
The asset allocation, liquidity management, diversification and hedging strategies employed are therefore
central to the efforts to manage the risks posed to the fund. Hence, there may even be situations such as
when a severe downturn in the equity markets is expected and liquidity risks are high, that the equity
exposures are reduced to very low levels. It is also worth noting that the bond investments may turn in
sub-par performance if not losses should interest rates hike up sharply. As such, exposures to bonds are
managed accordingly to minimise the risks.
Furthermore, the above investments are subject to limits and restrictions that are precisely spelt out in
the sections titled “Authorised Investments” and “Investment Restrictions”.
38
DETAILED INFORMATION ON THE FUNDS (CONT’D)
Selected Performance Benchmark for PBBF
The KLCI, or KLSE Composite Index, comprises 100 major stocks representing 63% of the MSEB’s total
market capitalisation. The core of the fund’s equity portfolio comprises of companies that are components
of the KLCI. As it is also a very widely followed and easily understood representation of the MSEB, it is
deemed that the most appropriate benchmark for this fund must be based on the KLCI. To better reflect
the scope and parameters of the fund especially with regards to the equity constraints of 60%, the Public
Balanced Equity Index (PBEIX) was created. PBEIX is a hybrid index whose value is subject to the daily
changes in the KLCI and the 3-month Kuala Lumpur Interbank Offered Rates (KLIBOR) on a 60:40 basis.
The Index is assumed to be rebalanced to 60% equity exposure at the end of each trading day.
Public Balanced Equity Index (PBEIX) is a proprietary composite benchmark index comprising of a
hypothetical investment in the KLCI and 3-Month KLIBOR in a 60:40 ratio. Therefore, the returns for
PBEIX for any given period of time would be made up of 60% from the returns of the KLCI and 40% from
3-Month KLIBOR interest earned for the same period of time. For the purpose of this index, the returns
for 3-Month KLIBOR is calculated by accruing interest earned on a daily basis from the daily closing
quoted 3-Month KLIBOR rates. This index represents an appropriate performance benchmark for gauging
the performance of PBBF in view of the fund’s 60% equities portfolio composition.
39
DETAILED INFORMATION ON THE FUNDS (CONT’D)
PB FIXED INCOME FUND (PBFI)
Fund Profile
Category of Fund
Bond fund
Type of Fund
Income
Stock Selection Profile of Fund
Fixed income securities
Distribution Policy *
Annual income
Investor’s Risk Profile **
Conservative
Suggested Minimum Investment
Period ***
3 years
Designated Fund Managers
Chong Chang Choong and Tan Yan Heong
Notes:
*
Annual income implies that the fund concerned will distribute income annually to unitholders, on a best
effort basis.
**
Conservative indicates an investor’s risk disposition favouring safety of principal and stability of income
but recognise that it is possible to lose money by investing in the fund.
***
Suggested minimum investment period is a guide only. Investors should review their investment in the
fund on a regular basis to ensure it continues to meet their investment needs or goals.
Fund Objective
To provide a steady stream of annual income through its investment in private debt securities (bonds)
and money market instruments.
Note: Any material changes to the investment objective of the fund would require unitholders’ approval.
Investor Profile
conservative risk-reward temperament
seek stability of annual income with some safety of principal
medium term investor
Investment Policy
PBFI invests in fixed income securities and money market instruments to meet its objective of providing
annual income to unitholders. Its fixed income securities investments comprise government and
government-sponsored bonds, and private debt securities (listed or unlisted). Redeemable loan stocks
with convertible features to enhance the fund’s opportunity for capital gains are included in the fund’s
portfolio.
Investment Strategy
The fund seeks to meet its objectives of producing a steady and recurring annual income with long-term
capital growth by investing in a portfolio of fixed income securities such as sovereign bonds and corporate
debt with the balance invested in money market instruments. Investments in redeemable loan stocks
with convertible features to enhance the fund’s opportunity for capital gains are considered.
40
DETAILED INFORMATION ON THE FUNDS (CONT’D)
As much as possible, the fund will seek to maximise the return potential of the fund by investing in
corporate bonds that commands higher yields than money market instruments. In doing so, the fund
will likely be exposed to the risks of adverse interest rate movements and corporate credit deterioration.
On the other hand, should interest rates turn favourable i.e. fall, or corporate credit of the bond issues
improve, then the fund stands to benefit from the resultant capital gains. Nevertheless, the credit risks
assumed are limited to the extent that any bond invested must have credit ratings of no lower than BBB.
Notwithstanding, the exposures to the risk and return potentials need to be managed actively to achieve
the risk-reward tradeoff that is reasonable to the fund.
Furthermore, the above investments are subject to limits and restrictions that are precisely spelt out in
the sections titled “Authorised Investments” and “Investment Restrictions”.
Fund Specific Benefits
The fund allows the investor access to the bond market, which is usually inaccessible to the average
investor as it is a market for institutions where the minimum transaction block amount to RM5 million.
The fund invests in a diversified portfolio of bonds, which comprise mainly of corporate bonds, to produce
returns that are significantly better than fixed deposits. It is also able to provide the investor with greater
liquidity than fixed deposits and at very low associated costs.
Fund Specific Risk Management
Essentially, the risk management process in PBFI focuses on managing the investment impact of changes
in the interest rate trend and credit risk profile of the individual debt issuers.
The Fund Manager will take reasonable steps to ensure that the above potential risks are managed by
adopting various investment strategies, such as varying the asset allocation, etc. to adjust the risk and
return characteristics of the fund. However, should the Fund Manager judge market conditions incorrectly
or applies an unsuitable investment strategy, the performance of the fund may suffer.
Participation in futures and options contracts should also help reduce the overall risk in the fund’s portfolio
by providing a useful hedging tool against undue short-term volatilities. Nevertheless, as in other
investment activities, the effectiveness of any attempts to hedge is subject to errors of judgement and
execution that may result in significant under-performance and even losses.
While over a long period, the fund may be expected to produce positive total returns, however, in any
particular year, losses may be suffered. Therefore, the fund is not suitable for speculative investors
seeking short term gains.
Selected Performance Benchmark for PBFI
The benchmark for PBFI is based on fixed deposits rates as opposed to a more conventional corporate
bond index. The rationale for this is that the fund is essentially managed in a fairly conservative manner
with the primary aim of outperforming fixed deposit returns. Moreover, the general profile of the
unitholders of the fund is such that their returns from the fund are more often than not compared
against the returns from fixed deposits. For the purpose of this fund therefore, it is felt appropriate to
benchmark the fund against an accumulation index based on the 12-month fixed deposits rates (FDR)
quoted by Malayan Banking Berhad.
41
DETAILED INFORMATION ON THE FUNDS (CONT’D)
5.3 INVESTMENT RISKS AND RISK MANAGEMENT
Equity Fund
Normally, the equity content will range between 65% to 85% of the fund. In times of actual or anticipated
stock market weakness, the equity portfolio may be reduced accordingly. There are, however, no
restrictions on the proportions that can be held in fixed income investments.
The Fund Manager will take reasonable steps to ensure that the above potential risks are managed by
adopting various investment strategies, such as varying the asset allocation, etc. to adjust the risk and
return characteristics of the fund. Participation in futures and options contracts should also help reduce
the overall risk in the fund’s portfolio by providing a useful hedging tool against undue short-term
volatilities.
Nevertheless, as in other investment activities, the effectiveness of any attempts to hedge is subject to
errors of judgement and execution that may result in significant under-performance and even losses.
Investors should note that in any particular year, losses may be suffered due to the adverse market
condition. Therefore, the fund is not suitable for investors with short-term time horizon and who cannot
tolerate stock market fluctuations.
Balanced Fund
Normally, the equity content will range from 50% to 60% of the fund. In times of actual or anticipated
stock market weaknesses, the equity portfolio may be reduced accordingly. The asset allocation between
the various investment assets referred to above and the decision to invest, sell or trade are based on the
decision of the Fund Managers who adopt an active fund management approach. In addition, participation
by the fund in futures and options contracts should also help reduce the overall risk in the fund’s portfolio
by providing a useful hedging tool against undue short-term volatilities. Nevertheless, as in other
investment activities, the effectiveness of any attempts to hedge is subject to errors of judgement and
execution that may result in significant underperformance and even losses.
Bond Fund
The profile of the bond portfolio in terms of credit risk, interest rate risk, and liquidity risk, and the
allocation mix between money market instruments and private debt securities, is determined based on
the Fund Managers’ assessment of the economic conditions. The fund’s participation in futures and
options contracts (when available) should also help reduce the overall risk in the fund’s portfolio by
providing a useful hedging tool against undue short-term volatilities. Nevertheless, as in other investment
activities, the effectiveness of any attempts to hedge is subject to errors of judgement and execution
that may result in significant underperformance and even losses.
The Fund Manager will take reasonable steps to ensure that the above potential risks are managed by
adopting various investment strategies, such as varying the asset allocation, etc. to adjust the risk and
return characteristics of the funds. However, should the Fund Manager judge market conditions incorrectly
or applies an unsuitable investment strategy, the performance of the fund may suffer.
While over a long period, the fund may be expected to produce positive total returns, however, in any
particular year, losses may be suffered. Therefore, the fund is not suitable for speculative investors
seeking short term gains.
Apart from the above investment risk, there are also other risks of investing in unit trusts which have
been described under pages 15 and 16 of this Prospectus.
42
DETAILED INFORMATION ON THE FUNDS (CONT’D)
5.4 AUTHORISED INVESTMENTS
The Manager has absolute discretion, subject to the deeds, the investment policy for each of the funds
and the requirements of the SC and other regulatory body, as to how the assets of the funds are invested.
Equity and Balanced Funds
The funds may invest in the following investments:
i.
Securities of Malaysian companies listed on approved Stock Exchange(s);
ii.
Securities listed on foreign stock exchanges;
iii.
Unlisted Securities whether or not approved by the SC for listing and quotation on the Recognised
Stock Exchange, which are offered directly by the company to the fund;
iv.
Listed Private Debt Securities, and unlisted loan stocks and corporate bonds traded in eligible/
money markets;
v.
Malaysian Government Securities, Treasury Bills, Bank Negara Malaysia Certificates and Government
Investment Certificates, and Cagamas Bonds;
vi.
Fixed deposits and money market instruments with local commercial banks, finance companies,
merchant banks and discount houses;
vii.
Units/shares of other collective investment schemes;
viii.
Futures contracts and options traded in the futures and options market of an exchange approved
under the Futures Industry Act 1993, for hedging purposes only;
ix.
The fund may participate in lending of securities within the meaning of the Securities Commission
Guidelines on Securities Borrowing and Lending when permitted by the SC and other relevant
authorities; and
x.
Any other form of investments as may be agreed upon by the Manager and Trustee from time to
time.
Bond Fund
The fund may invest in the following investments:
i.
Fixed income securities of Malaysian companies listed on any Recognised Stock Exchange(s) or
approved Stock Exchange(s);
ii.
Foreign fixed income securities (subject to the Manager’s submission of relevant application
documents and receipt of approval from the SC);
iii.
Unlisted fixed income securities;
iv.
Malaysian Government Securities, Treasury Bills, Bank Negara Malaysia Certificates and Government
Investment Certificates, and Cagamas Bonds;
v.
Fixed deposits and money market instruments with local commercial banks, finance companies,
merchant banks and discount houses;
43
DETAILED INFORMATION ON THE FUNDS (CONT’D)
vi.
Units/shares of other collective investment schemes;
vii.
Futures contracts and options traded in the futures and options market of an exchange approved
under the Futures Industry Act 1993, for hedging purposes only; and
viii.
Any other form of investments as may be agreed upon by the Manager and the Trustee from time
to time.
5.5 INVESTMENT RESTRICTIONS
The funds are subject to the following investment restrictions imposed by the SC in the course of execution
of their investment policies and strategies:
Equity and Balanced Funds
(i)
Spread of investments
The value of each of the fund’s holding in:
(ii)
(iii)
(a)
the share capital of any single issuer must not exceed 10 per cent of the respective funds’
NAV; and
(b)
the securities/instruments of, and the securities/instruments relating to, any single issuer must
not exceed 15 per cent of the respective funds’ NAV.
Spread: group of companies
(a)
Subject to clause (ii)b below, the value of each of the fund’s holding in the securities/instruments
of, and the securities/instruments relating to, any group of companies should not exceed 20
per cent of the respective funds’ NAV; and
(b)
The value of each of the fund’s holding in the securities/instruments of, and the securities/
instruments relating to, any group of companies may exceed 20 per cent of the respective
funds’ NAV provided there are acceptable reasons for exceeding the limit. In this regard, the
management company must notify the Trustee and the SC of the reasons for exceeding the
limit immediately. Where the reasons are not considered satisfactory, the Trustee and/or the
SC may direct the fund(s) to comply strictly with clause (ii)a.
Concentration of investments
(a)
Each of the fund’s holding of any class of security/instrument of any single issuer must not
exceed 10 per cent of the securities/instruments issued.
The above limits and restrictions shall be complied with at all times based on the most up-to-date value
of the fund, and the value of their investments and instruments. However, a 5 per cent allowance in
excess of any limits or restrictions may be permitted where the limit or restriction is breached through
the appreciation or depreciation in value of the fund’s investment or instruments, or as a result of
repurchase of units or payment made from the fund.
Such limits and restrictions, however, do not apply to securities that are issued or guaranteed by the
Government or Bank Negara Malaysia.
44
DETAILED INFORMATION ON THE FUNDS (CONT’D)
(iv)
General
(a)
The value of each fund’s holding in securities that are not traded in, or under the rules of, an
eligible market, must not exceed 10% of the NAV of the respective funds;
(b)
For PBBF, listed private debt securities, unlisted loan stocks and corporate bonds invested by
the fund must either be bank guaranteed, or rated ‘BBB’ by RAM and/or other recognised
rating agencies.
(c)
Each fund may invest abroad the full amount of NAV attributed to non-residents and up to
10% of the NAV attributed to residents. PBGF will invest in foreign securities upon the Manager’s
submission of relevant application documents and receipt of approval from the SC;
(d)
The value of each fund’s holding of units or shares in other collective investment schemes
must not exceed 10% of the NAV of the fund;
(e)
The net market exposure owing to the futures contracts position of each fund must not
exceed the NAV of the respective funds;
(f)
The value of each fund’s holding in warrants and options must not exceed 10% of the NAV of
the respective funds. This investment limit applies to the price of the warrants and the premium
of the options; and
(g)
A minimum 2% and 5% of the NAV of PBGF and PBBF respectively, must be maintained in the
form of liquid assets at all times.
Bond Fund
(i)
(ii)
Spread of investments
(a)
The value of the fund’s holding in debentures/instruments of, and debentures/instruments
relating to, any single issuer must not exceed 20 per cent of the fund’s NAV.
(b)
Notwithstanding clause (i)a, the value of each of the fund’s holding in debentures/instruments
of, and debentures/instruments relating to, any single issuer may exceed 20% of the fund’s
NAV. However the value of the fund’s holding in debentures/instruments of, and debentures/
instruments relating to any single issuer may exceed 20 per cent but must not exceed 30 per
cent of the fund’s NAV, if the debentures/instruments are rated to be of the best quality and
offer highest safety of timely payment of interest and principal, by any global or domestic
rating agency.
Spread: group of companies
(a)
Subject to clause (ii)b, the value of the fund’s holding in debentures/instruments of, and
debentures/instruments relating to, any group of companies should not exceed 30 per cent
of the fund’s NAV; and
(b)
The value of the fund’s holding in debentures/instruments of, and debentures/instruments
relating to, any group of companies may exceed 30 per cent of the fund’s NAV provided there
are acceptable reasons for exceeding the limit. In this regard, the management company
must notify the Trustee and the SC of the reasons for exceeding the limit immediately. Where
the reasons are not considered satisfactory, the Trustee and/or the SC may direct the fund to
comply strictly with clause (ii)a.
45
DETAILED INFORMATION ON THE FUNDS (CONT’D)
(iii)
Concentration of investments
(a)
The fund’s holding of any class of debentures/instruments of any single issuer must not exceed
20 per cent of the debentures/instruments issued.
The limits and restrictions stated shall be complied with at all times based on the most up-to-date value
of the fund, and the value of its investments and instruments. However, a 5 per cent allowance in
excess of any limits or restrictions may be permitted where the limit or restriction is breached through
the appreciation or depreciation in value of the fund’s investment or instruments, or as a result of
repurchase of units or payment made from the fund.
Such limits and restrictions, however, do not apply to securities that are issued or guaranteed by the
Government or Bank Negara Malaysia.
(iv)
General
(a)
The value of the fund’s holding in fixed income securities that are not traded in, or under the
rules of, an eligible market, must not exceed 10% of the NAV of the fund;
(b)
The fund may invest abroad the full amount of NAV attributed to non-residents and up to
10% of the NAV attributed to residents. PBFI will invest in foreign securities upon the Manager’s
submission of relevant application documents and receipt of approval from the SC;
(c)
The value of the fund’s holding of units or shares in other collective investment schemes must
not exceed 10% of the NAV of the fund;
(d)
The net market exposure owing to the futures contracts position of the fund must not exceed
the NAV of the fund; and
(e)
The value of the fund’s holding in options must not exceed 10% of the NAV of the fund. This
investment limit applies to the premium of the options.
5.6 VALUATION OF AUTHORISED INVESTMENTS
Listed equities - any such securities will be valued based on the last done market price.
Unlisted equities - valuation is based on methods deemed to be fair and reasonable that are acceptable
to the Manager, verified by the Auditor and approved by the Trustee. Valuation is carried out on a half
yearly basis.
Listed and Unlisted fixed income securities - for listed fixed income securities, the last traded prices
quoted on a recognised exchange will be used. In the case of unlisted fixed income securities, valuations
are carried out on a daily basis using the Bond Information Dissemination System (BIDS) maintained by
Bank Negara Malaysia, and on a weekly basis whereby market quotations will be gathered from a number
of financial institutions whereupon the fair market values for the fixed income securities will be determined
involving a process of price evaluation in the context of relative liquidity, interest and credit risks. The
panel of financial institutions from which market quotations are obtained include AmMerchant Bank
Berhad, Affin Merchant Bank Berhad, Affin Bank Berhad, AseamBankers, Commerce International
Merchant Bankers Berhad, Hong Leong Bank Berhad and RHB Sakura Merchant.
Cash/Fixed Deposits - the value of such investment which are deposits placed with banks and other
financial institutions and bank bills, shall be determined each day by reference to their nominal values
and the accrued interest thereon for the relevant period.
46
DETAILED INFORMATION ON THE FUNDS (CONT’D)
Units in other collective investment schemes - the last published net asset value per unit or (where
considered appropriate by the Manager and Trustee, and verified by the Auditor) a price arrived at by
aggregating the last published bid price and offered price and dividing the result by two.
Futures and options - all futures contracts and options are marked-to-market at the end of each trading
day by the futures exchange that they are traded in. Any gains or losses are immediately realised upon
marking to market.
Suspended securities - will be valued at their suspended price unless there is conclusive evidence to
indicate that the value of such shares have gone below the suspended price, whereupon their value will
be ascertained in a manner as agreed upon by the Manager and Trustee, and verified by the Auditor.
5.7 POLICY ON GEARING
Bound by the deed and SC Guidelines on Unit Trust Funds, the funds are prohibited from gearing or
borrowing cash or other assets (including the borrowing of securities) to finance the purchase of
investments.
47
6.
PERFORMANCE OF THE FUNDS
This section covers the following funds that have been in operation for one financial year or more:
PB Growth Fund (PBGF)
Page 49
PB Balanced Fund (PBBF)
Page 50
PB Fixed Income Fund (PBFI)
Page 51
Notes:
Average annual returns of the fund for the 1-year, 3-year, 5-year periods and since inception (as of the last day
of latest financial year) presented on page 50 is derived by dividing the total returns of the fund with the
number of years under review.
The total returns of the funds for the 1-year, 3-year, 5-year periods and since inception were sourced from
Lipper Asia Ltd. Please visit our website for the latest updates on fund performance.
Past performance of the funds is not an indication of future performance.
48
PERFORMANCE OF THE FUNDS (CONT’D)
PERFORMANCE OF PB GROWTH FUND (PBGF)
Total Returns for the following period ended 30 June 2003
Since Inception
PBGF
11.16%
KLCI
5.51%
Fund Performance Review
The net asset value of the PBGF registered a gain of 11.16% since its inception on 24 October 2002 to
30 June 2003. Over the same period, the KLCI rose by only 5.51%. The KLCI is the selected performance
benchmark for this fund as it is a generally accepted barometer of the local stockmarket’s performance.
Asset Allocation Review and Portfolio Turnover Ratio
The build up of equity positions for the fund was conducted in a cautious environment, which was
essentially plagued by a host of uncertainties in view of the onset of war compounded later by the rapid
spread of the SARS virus. By the end of the financial year, the equity exposure of the fund was raised to
59.2%. Reflecting a moderate rate of stock accumulation, the Portfolio Turnover Ratio was recorded at
0.37 times for the period.
Asset Allocation as at 30 June 2003
Equities & Derivatives
59.2%
Fixed Income Securities
18.6%
Money Market Instruments & Others
22.2%
49
PERFORMANCE OF THE FUNDS (CONT’D)
PERFORMANCE OF PB BALANCED FUND (PBBF)
Average Annual Returns for the following periods ended 30 June 2003
1-Year
3-Year
5-Year
Since Inception
PBBF
0.38%
2.13%
11.96%
12.05%
PBEIX
-1.39%
-2.06%
9.21%
5.80%
1-Year Fund Performance Review
The PBBF outperformed the benchmark Public Balanced Equity Index (PBEIX) for the financial year ended
30 June 2003 with a return of 0.38% vs the PBEIX’s return of –1.39% over the same period. The PBEIX is
an index computed based on returns from the KLCI and 3-month KLIBOR rates in the ratio of 60:40. Thus,
it is the appropriate benchmark for balanced funds which have an equity weighting ranging up to 60%
of the fund’s NAV.
Asset Allocation Review and Portfolio Turnover Ratio
The fund’s equity exposures fell from 62.5% (58.3% after adjusting for dividend reinvestments) at the
beginning of the financial year in the face of the persistent decline in the equity market plagued by the
onset of war in Iraq and the outbreak of SARS. As fundamentals began to show improvements following
the end of the war and containment of the SARS epidemic, the equity exposures rebounded in tandem
with rising stock prices and by the end of the financial year reached 55.3%. The fund’s bond exposures
were raised from 7.3% to 14.4% over the course of the financial year to allow the fund to participate in
the robust bond market. The fund’s Portfolio Turnover Ratio for this financial year period fell to 0.12
times from 0.26 times previously as not much rebalancing work was performed on the fund.
Asset Allocation as at 30 June 2003
Equities & Derivatives
55.3%
Fixed Income Securities
14.4%
Money Market Instruments & Others
30.3%
50
PERFORMANCE OF THE FUNDS (CONT’D)
PERFORMANCE OF PB FIXED INCOME FUND (PBFI)
Total Returns for the following period ended 30 June 2003
Since Inception
PBFI
7.13%
12-Month Fixed Deposit Interest
2.67%
Fund Performance Review
The PBFI posted a return of 7.13% for the period since its inception on 25 October 2002 to 30 June 2003.
Over the same period, the return from the benchmark Fixed Deposit Return (FDR) Index was 2.67%. The
benchmark FDR Index is computed from 12-month fixed deposit rates of Malayan Banking Berhad.
Asset Allocation Review and Portfolio Turnover Ratio
From its launch in October 2002, the fund has raised its holding of bonds to 64.7% by the end of June
2003. Over this period, the bond market was essentially performing well amidst ample liquidity conditions
and an uncertain economic outlook. The robust bond market provided good accumulation as well as
trading opportunities and as a result the Portfolio Turnover Ratio registered 1.49 times over the period.
Asset Allocation as at 30 June 2003
Fixed Income Securities
64.7%
Money Market Instruments & Others
35.3%
51
7.
FINANCIAL AND INVESTMENT HIGHLIGHTS
OF THE FUNDS
This section covers the following funds that have been in operation for one financial year or more:
PB Growth Fund (PBGF)
Page 53
PB Balanced Fund (PBBF)
Page 54
PB Fixed Income Fund (PBFI)
Page 55
Past performance of the funds is not an indication of future performance.
The funds’ past distribution is not a guarantee of future distributions.
Investors are advised that following the issue of unit split and/or distribution, the selling price and
net asset value per unit of the fund will be reduced accordingly to reflect/account for the unit split
and/or distribution.
Where unit split is declared, investors should note that the value of their investment in Ringgit Malaysia
terms will remain unchanged after the distribution of additional units.
52
FINANCIAL AND INVESTMENT HIGHLIGHTS
OF THE FUNDS (CONT’D)
PB GROWTH FUND (PBGF)
Financial Highlights
Financial Period From 9 August 2002 to 30 June 2003
(i)
RM’000
Net distribution per unit (sen)
-
Gross distribution per unit (sen)
-
(ii) Unit split
%
-
(iii) Portfolio Turnover Ratio (Time)
0.37
(iv) Management Expense Ratio (%)
1.73
Investment Highlights
(Based on % of NAV)
Financial Period Ended 30 June
2003
Top 5 investments
RHB Sakura Merchant Bankers Berhad - 8.2% Bond
(7.4%)
RHB Capital Berhad - 7.5% Bond (7.2%)
Lingkaran Trans Kota Holdings Berhad (4.7%)
Malayan Banking Berhad (4.2%)
Puncak Niaga Holdings Berhad - 2.5% Bond (4.0%)
Top 3 foreign investments
Nil
Top 3 investments in securities not traded in
or under the rules of an eligible market
Nil
53
FINANCIAL AND INVESTMENT HIGHLIGHTS
OF THE FUNDS (CONT’D)
PB BALANCED FUND (PBBF)
Financial Highlights
Financial Years Ended 30 June
(i)
Source of Income for Distribution:
Interest income
Dividend income
Realised gains (less losses) on
sale/redemption of investments
Previous year’s realised income
Accretion of discount, net
of amortisation of premium
Distribution equalisation
Total
2001
RM’000
%
2002
RM’000
%
2003
RM’000
%
641
196
10.43
3.19
916
534
15.31
8.93
1,233
369
23.07
6.90
114
3,725
1.85
60.60
2,738
1,109
45.77
18.54
1,521
1,644
28.46
30.77
552
919
8.98
14.95
407
278
6.80
4.65
118
459
2.21
8.59
6,147
100.00
5,982
100.00
5,344
100.00
Net distribution per unit (sen)
6.00
4.99
3.11
Gross distribution per unit (sen)
6.00
5.00
3.50
-
-
-
(iii) Portfolio Turnover Ratio (Time)
0.11
0.26
0.12
(iv) Management Expense Ratio (%)
1.63
1.63
1.62
(ii) Unit split
Investment Highlights
(Based on % of NAV)
Financial Year Ended
30 June
2001
2002
2003
Top 5 investments
Cahya Mata Sarawak
Berhad - 0% Bond
(12.8%)
AMMB Holdings Berhad
- 5% Bond (9.8%)
Tenaga Nasional
Berhad (6.8%)
Berjaya Sports Toto
Berhad (3.7%)
Commerce AssetHolding Berhad (3.4%)
Tenaga Nasional
Berhad (8.0%)
Celcom (Malaysia)
Berhad - 8.5% Bond
(6.5%)
Resorts World Berhad
(4.7%)
Gamuda Berhad (3.2%)
Commerce AssetHolding Berhad (3.2%)
RHB Sakura Merchant
Bankers Berhad
- 8.2% Bond (7.0%)
RHB Capital Berhad
- 7.5% Bond (6.9%)
Tenaga Nasional
Berhad (5.1%)
IOI Corporation
Berhad (3.9%)
Berjaya Sports Toto
Berhad (3.7%)
Top 3 foreign
investments
Nil
Nil
Nil
Top 3 investments
in securities not
traded in or under
the rules of an
eligible market
Nil
Nil
Nil
54
FINANCIAL AND INVESTMENT HIGHLIGHTS
OF THE FUNDS (CONT’D)
PB FIXED INCOME FUND (PBFI)
Financial Highlights
Financial Period From 9 August 2002 to 30 June 2003
(i)
RM’000
%
Source of Income for Distribution:
Interest income
Realised gains (less losses) on sale of investments
Accretion of discount, net of amortisation of premium
Distribution equalisation
898
1,671
61
539
28.34
52.73
1.92
17.01
Total
3,169
100.00
Net distribution per unit (sen)
4.00
Gross distribution per unit (sen)
4.00
(ii) Unit split
1:35
(iii) Portfolio Turnover Ratio (Time)
1.49
(iv) Management Expense Ratio (%)
1.04
Investment Highlights
(Based on % of NAV)
Financial Period Ended 30 June
2002
Top 5 investments
Kesas Sendirian Berhad - 7.95% Bond (17.2%)
RHB Sakura Merchant Bankers Berhad - 8.2% Bond (16.6%)
Commerce Asset-Holding Berhad - 7.85% Bond (14.7%)
RHB Bank Berhad - 6.85% Bond (10.1%)
RHB Capital Berhad - 7.5% Bond (2.9%)
Top 3 foreign investments
Nil
Top 3 investments in securities not
traded in or under the rules of an
eligible market
Nil
55
8.
GETTING STARTED WITH PUBLIC MUTUAL
8.1 WHERE TO PURCHASE UNITS OF THE FUNDS
Units of PBGF, PBBF and PBFI are available for sale at branches of Public Bank throughout the country.
Investors are welcome to make enquiries about the funds at the branch information counters. You will
be duly advised on the important features of the funds, the risks, and all transactional procedures by a
corporate representative of Public Bank before you begin investing with the funds. Corporate
representatives are staff of Public Bank who have been appointed and trained to deal in unit trust funds,
and are registered with FMUTM.
Public Mutual branch offices are located throughout the state capitals and major towns of Malaysia to
service unitholders who may need to do an enquiry or a transaction with us. Please refer to the Directory
of Public Mutual Branch Offices on pages 88 to 89 of the Prospectus for details of their addresses and
telephone numbers.
8.2 HOW TO BUY, SELL OR SWITCH UNITS OF THE FUNDS
Read and Understand the Prospectus of the Fund(s)
It is important that you should understand fully about unit trust investments, and what investing with
the funds would mean to you in terms of the potential benefits and risks. First ask the corporate
representative attending to you for information on the fund(s), and be sure to request for a copy of the
Prospectus. It is important that you read the fund’s Prospectus carefully and seek further clarification
from the corporate representative concerned regarding matters or transactions that may concern you.
In reading the Prospectus, do make sure that you understand fully:
the nature of collective investment schemes;
the fund category, objective and its distribution policy;
the types of transactions available;
your rights as a unitholder;
the nature and amount of fees and expenses of the fund which you would have to bear;
the reports that you will receive as a unitholder which keeps you fully informed about the performance
of the fund.
To Open an Account
For prospective investors of the funds, you would need only to fill up the Fund Application Form that
comes with the Prospectus obtainable free upon request. Your application form, together with the
investment amount made out in a cheque in favour of ‘Public Mutual Berhad’, can then be submitted to
any of the Public Bank branches. You are advised to retain the bank-in slip issued by the bank for your
record and future reference.
For investors who are investing under the EPF Members Investment Scheme, you are required to fill-up
the Application Form for Initial Investment-EPF Members Investment Scheme and KWSP Form 9F (AHL)
and submit them together with a copy of your NRIC to the corporate representative attending to you.
For non-individual or corporate applicants, the application must be submitted together with the requisite
statutory documents. Please refer to the fund application form for non-individuals/corporate for details
of the documents required by the different customer types i.e. a Malaysian company, partnership, sole
proprietor or others. Please contact the corporate sales desk at 03-6279 6829 should you need further
assistance.
Minimum Initial Investment - Please refer to page 10 of Chapter 1: Key Features of The Funds.
56
GETTING STARTED WITH PUBLIC MUTUAL (CONT’D)
Adding Regularly to Your Account
You may invest regularly in your investment account. This is easily done through issuing Bank Standing
Instructions with Public Bank. Ask your corporate representative about investing regularly and get a
head start on the benefits of dollar-cost-averaging that comes with the regular purchase of units. (Please
refer to pages 17 and 18 for an illustration of the Dollar-Cost Averaging Principle).
Alternatively, you may add to your investment account as and when you feel so inclined by depositing
your monies into the collection accounts maintained at Public Bank.
Minimum Additional Investment - Please refer to page 10 of Chapter 1: Key Features of The Funds.
Under the Deed, the Manager is given the exclusive right to effect the issue of units for the account of
the fund and has absolute discretion to accept or reject in whole or in part any application for units.
Exercise of Cooling-off Right
For investors who are investing with Public Mutual for the first time, the request to exercise your coolingoff right must be submitted to the Public Bank branch at which you purchased your units within 6 business
days from the date of receipt of the application form (deemed to be the date of depositing of investment
monies into the collection accounts of Public Mutual). You will be paid a full refund of your investment
principal within 10 days from the date of exercise of this cooling off right.
For EPF unitholders, the cooling-off period shall begin from the date of receipt of the application form
(deemed to be the date of acceptance of the application form by Public Mutual).
Corporates or institutions, staff of the Manager and persons/agents registered to deal in its unit trust
funds are not entitled to the cooling-off right.
Exercise of Repurchase, Switching and Transfer of Units
Repurchase
Should you later need to partially or fully redeem your units, you would only need to fill-up and submit
the Repurchase Form to your nearest Public Mutual or Public Bank branch office or Public Mutual Head
Office. You will be paid the repurchase proceeds within 10 days from our receipt of your repurchase
request. For EPF unitholders, the net repurchase proceeds will be remitted to Kumpulan Wang Simpanan
Pekerja (KWSP) for crediting into the members’ provident accounts.
Switching
You may move your investments between funds under the PB-Series of Funds in response to changing
financial goals or market conditions subject to the fees and conditions for switching laid out on page 11
of Chapter 1: Key Features of The Funds. You need only to complete and return the Switching Form to
your nearest Public Mutual or Public Bank branch office or Public Mutual Head Office.
Transfer
For transfer of units, you need to complete and submit the Transfer Form instead. An administration fee
of RM25 is charged on each transfer transaction.
You can also execute your repurchase, switching and transfer requests using our phone-in voice system,
TeleMutual. Please refer to page 60 for more information on TeleMutual.
57
GETTING STARTED WITH PUBLIC MUTUAL (CONT’D)
Minimum Transaction Amount for Repurchase, Switching and Transfer
The minimum transaction per repurchase, switching or transfer is 1,000 units.
Minimum Account Balance
Whatever you may do by way of repurchase, transfer or switching of funds, you must always ensure that
you leave a minimum balance of 1,000 units in your account at all times in order to stay invested with the
fund.
In the case of partial repurchase, the Manager may elect to repurchase the entire account if the effect
thereof would be that the unitholder holds less than 1,000 units in his account with the fund.
Units of PBGF, PBBF and PBFI can be bought or sold at all branches of Public Bank in the country.
Pledging of Units as Collateral
Units held by you may be pledged as collateral for securing loans with Public Bank under the Unit Trust
Flexi-Loan Express (UNIFLEX) Plan. The UNIFLEX Plan has many advantages. For more details on the
UNIFLEX Plan, you may call Public Bank Hotline: 1800-883323. Investors should be aware of the loan
financing risk as stated in page 15 of this Prospectus and are advised to read and understand the Loan
Financing Risk Disclosure Statement that forms part of the Fund Application Form.
Borrowing to Purchase Units
Unit trusts are considered long term savings vehicles which should, theoretically speaking, return better
than bank deposits or bonds through its investments in equities or other market-related securities. But,
likewise, unit trusts cannot avoid assuming to a certain extent the market risks inherent in its portfolio
investments, and it would be considered unwise for the unitholder to undertake borrowing to purchase
his units as it may serve to accentuate any capital loss incurred by him in the event of a prolonged weak
(bear) market. Investing in a unit trust fund with borrowed money is more risky than investing with your
own savings.
Investors are advised to read and understand fully the Loan Financing Risk Disclosure Statement that
forms part of the Fund Application Form before signing off on the form.
It is Our Company’s Policy to Discourage the Use of Loan Financing in the Purchase of Units.
8.3 STATEMENTS AND REPORTS
Statements to Confirm and Record Transactions
Computer-generated Statements will be issued to lend you a record of each and every transaction made
in your account so that you may confirm the status and accuracy of your transactions, as well as to
provide you with an updated record of your investment account(s) with us.
Annual/Interim Statement of Transaction
In addition, you will receive annual and interim Statements of Transaction sent together with the funds’
financial reports, which will provide you with the latest update of your investment account.
For Mutual Gold Members, additional Quarterly Account Summaries of your investments will be generated
as part of the Manager’s Priority Client Service.
58
GETTING STARTED WITH PUBLIC MUTUAL (CONT’D)
Annual and Interim Reports
The investment strategies, performances, portfolio holdings and financial accounts of the funds are
detailed twice a year in annual and interim reports which are sent to all unitholders within 2 months
from the close of each financial year or interim period.
Statement of Distribution of Returns
If distribution of returns is declared by the funds, you will receive Statements of Distribution of Returns,
detailing the nature and amount of returns distributed by the funds.
You may refer to page 12, paragraph 1.5 of Chapter 1: Key Features of The Funds for more information
on the mode of distributions and policies and procedures on unclaimed monies/distributions.
8.4 KEEPING TRACK OF THE DAILY PRICES OF UNITS
Units are valued at their NAV per unit on every business day in which the MSEB is open for dealing. The
Manager of the funds makes a market for the units by selling to you units at the Manager’s Selling Price,
and repurchasing them at the Manager’s Repurchase Price. Liquidity of your investment is thus assured.
Unitholders may check for the current NAV and unit prices of the funds, the service charge and
management fee of the funds by referring to the Unit Trusts Column published daily in major newspapers
or by visiting Public Mutual website at http://www.publicmutual.com.my. (Please refer to page 61 for
Determination of Prices).
Feel free to contact Public Bank Hotline: 1800-883323 or Public Mutual Hotline 03-6279 5252 for general
enquiries or specific assistance regarding your investments with us.
Take full advantage of Public Mutual’s phone-in voice response system, TeleMutual Service:
03-6279 5252 for fast track information on unit prices of funds, fund information, stock market
commentaries, account balance enquiries, EPF next withdrawal date and for execution of repurchase,
switching and transfer requests.
59
DEDICATED SERVICES
TO UNITHOLDERS OF PUBLIC MUTUAL
PUBLIC MUTUAL WEBSITE
For the latest update on the company’s development, come and visit Public Mutual website at
www.publicmutual.com.my. It carries a variety of information and services including information about
our funds, updates on fund prices and performances, information on financial planning, market reports
available on a daily, weekly, monthly and quarterly basis, all available at the tip of your hands.
Surf our website in the comforts of your home and you can determine the feasibility of our funds before
deciding to invest with Public Mutual.
INSURANCE COVERAGE AT ATTRACTIVE PREMIUMS
Arrangements have been made between Public Mutual and insurers to provide insurance coverage at
attractive premiums exclusively for unitholders of Public Mutual. These insurance policies/plans provide
coverage for term life, personal accident, total permanent disability, critical illnesses, hospitalisation and
surgical, etc.
Contact our agents for more information, or call Public Mutual Hotline : 03-6279 5252
PRIORITY SERVICE
Mutual Gold Priority Service is designed to provide value-added, time saving services and benefits to
high net worth individual unitholders.
The exclusive privileges Mutual Gold Members will enjoy include repurchase cheques within one business
day, administration fee waiver, switching fee waiver between loaded funds, free Group Personal Accident
with Permanent Disability insurance coverage of up to RM500,000, choice of complimentary magazines,
fund reviews, Mutual Gold bulletin (Mutual Voice), invitations to seminars/financial planning talks and
many more.
Call our HOTLINE: 03-6279 5252 for more information
PHONE-IN ENQUIRIES
TeleMutual is our Voice Response System, which is designed exclusively for the convenience of our
unitholders who do not have the time to call personally at our Offices. TeleMutual will enable you to
conduct your investment needs from the comfort of your home or office. All that’s required of you is a
telephone call from a touch-tone phone. TeleMutual service is available from 7.00 a.m. to 12.00 midnight,
Mondays to Sundays.
Quick fund information, fund prices, stock market commentary, balance inquiry, EPF next withdrawal
date inquiry and other transactional services including repurchase, switching of units and transfer of
units are currently available on TeleMutual.
For further information regarding TeleMutual, please call our Hotline 03-6279 5252
60
9.
TRANSACTION INFORMATION
9.1 DETERMINATION OF PRICES
Valuation Point
Valuation point refers to such a time(s) on a business day as may be decided by the Manager wherein the
Net Asset Value (“NAV”) of the fund is calculated. A final valuation for each business day is carried out at
the end of the day immediate upon closing of the MSEB (i.e. forward pricing).
Under normal circumstances, only one valuation of the NAV of fund is conducted on each business day at
the close of the MSEB.
NAV per Unit
The NAV per unit is obtained by dividing the NAV of the fund by the number of units in issue, rounding
to 4 decimal points. The NAV per unit thus forms the basis for the computation of the Selling and
Repurchase Price.
Illustration 1: Computation of NAV per unit
The following is an example of the valuation carried out for PBBF at the end of the business day of 15
January 2004:
Total NAV (RM)
89,155,698.49
UIC (units)
118,434,000
NAV per unit (RM)
(Total NAV/UIC)
0.75278804
NAV per unit, rounding to 4 decimal points (RM)
0.7528
Forward Pricing for both Buy and Sell Transactions
Both the buy and sell transactions are traded at prices next determined. A transaction issued today by an
investor to purchase units of the fund will be carried at a Selling Price next determined i.e. to be calculated
at the next valuation point after the application to purchase units is received and accepted by the Manager.
Similarly, a transaction to redeem units by an investor will be done at the Repurchase Price next determined
i.e. at the next valuation point after the repurchase request is received by the Manager. The valuation
(and pricing) of units normally takes place at the end of each business day after the close of the MSEB.
Investment deposited into the collection accounts of Public Mutual before 5:00 p.m. on any business day
will be based on selling price determined at the end of the same business day. Investment deposited into
the collection accounts after 5:00 p.m. on any business day will be based on selling price determined at
the end of the next business day. Any payment made on a non-business day shall be treated as payment
made in the following business day.
The pricing formula for calculating the Selling and Repurchase Price, and the computation of the coolingoff refund proceeds illustrated below for PB Balanced Fund units are also applicable to all funds offered
under this Prospectus.
9.2 COMPUTATION OF PRICES
Selling Price
The Manager’s Selling Price per unit for PBGF and PBBF is calculated by adding to the NAV per unit a
service charge of between 5% to 7% of NAV per unit. The Manager’s Selling Price per unit for PBFI is at
its NAV per unit plus a service charge of 0.25% of NAV per unit.
61
TRANSACTION INFORMATION (CONT’D)
Illustration 2: Computation of Selling Price
On 15 January 2004, Investor A decides to invest RM1,000 in PBBF. He banked in an investment amount
of RM1,000 together with the application form at a Public Bank branch on that same day.
Following through on Illustration 1 above, the selling price of PBBF at the end of the business day of 15
January 2004 would be as follows:
RM
NAV per unit
0.75278804
Add: Service charge (6.5% of NAV)
0.04893122
Selling Price per unit before rounding adjustments
0.80171926
Quoted Selling Price per unit after rounding to 4 decimal points
0.8017
Based on the above Selling Price, Investor A would have 1,247.35 units credited into his investment
account as shown below:
Units credited
to investor’s account
Amount invested
Selling Price of the day
=
RM1,000
1,247.35 units
RM0.8017
The number of units credited to the investor’s account will be determined based on the amount
invested divided by the selling price per unit computed at the end of the business day.
Repurchase Price and Repurchase Proceeds
The Repurchase Price per unit of PBGF, PBBF and PBFI is at NAV per unit.
Illustration 3: Computation of Repurchase Price and Repurchase Proceeds
On 15 January 2004, Investor B decided to redeem 1,000 units of PBBF. He submitted his Repurchase
Form to a Public Bank branch. Following through on Illustration 1, the repurchase price of PBBF at the
end of the business day of 15 January 2004 would be as follows:
RM
NAV per unit
0.75278804
Repurchase charge (Nil)
0.00000000
Repurchase Price per unit before rounding adjustments
0.75278804
Quoted Repurchase Price per unit after rounding to 4 decimal points
62
0.7528
TRANSACTION INFORMATION (CONT’D)
Based on the above repurchase price, Investor B would receive RM752.80 as repurchase proceeds within
10 days from the Manager’s receipt of his repurchase request.
Proceeds
Units redeemed x Repurchase Price
i.e. 1,000 units x RM0.7528
RM752.80
The repurchase proceeds payable to the investor will be determined based on the units repurchased
multiplied by the repurchase price per unit computed at the end of the business day.
9.3 COMPUTATION OF COOLING-OFF PROCEEDS
A cooling-off period of 6 business days is accorded to an investor who is investing with Public Mutual for
the first time. During the cooling-off period, the investor, upon changing his mind about the unit trust
investment that he has made, may proceed to exercise his cooling-off right by submitting a cooling-off
request (directly) to the Public Bank branch at which he purchased the units. He will receive a full refund
of the initial investment amount paid by him on his purchase of units within 10 days of receipt of coolingoff notice by the Manager.
Under the cooling-off request, the refund for every unit held by the unitholder will be the sum total
of:
(a) the NAV of unit on the day the units were first purchased; and
(b) the sales charge per unit imposed on the day the units were purchased.
Illustration 4: Computation of Cooling-Off Proceeds
Let us assume that Investor C invested RM1,000 in the PBBF on 15 January 2004 at the following selling
price:
RM
NAV per unit
0.75278804
Add: Service charge (6.5% of NAV)
0.04893122
Selling Price per unit before rounding adjustments
0.80171926
Quoted Selling Price per unit after rounding to 4 decimal points
The total number of units credited to his account would be as follows:
RM1,000 / RM0.8017
=
1,247.35 units
63
0.8017
TRANSACTION INFORMATION (CONT’D)
On 22 January 2004 (within the cooling-off period), the investor decided to exercise his cooling-off right
by submitting a request for a refund of his investment. The cooling-off amount/proceeds due to him is
computed based on the unit prices and NAV determined at the close of the business day of 15 January
2004.
The amount per unit to be returned to him will be:
=
Service Charge paid by him on 15 January 2004
=
0.0489
=
0.8017
+
+
NAV for 15 January 2004
(as published in the
newspapers on
16 January 2004)
0.7528
The total amount in refund proceeds payable to Investor C shall thus be:
RM0.8017 x 1,247.35 units
=
RM1,000.00
The examples in this Chapter should not be considered to represent actual performances from the
past or for the future.
There are fees and charges involved and investors are advised to consider the fees and charges
before investing in the fund.
64
10. FEES, CHARGES AND EXPENSES
10.1 CHARGES IMPOSED ON SALE AND PURCHASE OF UNITS
Service Charge
The Manager’s Selling Price per unit is calculated by adding to the NAV per unit of the fund a service
charge of between 5% to 7% of NAV per unit for PBGF and PBBF, and 0.25% of NAV per unit for PBFI. A
portion of the service charge collected by the Manager is paid out as sales commission to IUTA. Depending
on the rate of service charge imposed, up to a maximum of 4% of the sales proceed is paid out as sales
commission.
Illustration 1: Computation of Service Charge
The computation of service charge for PBBF is as illustrated below:
RM
NAV per unit at the end of the business day of 15 January 2004
0.75278804
Add: Service charge (6.5% x RM0.75278804)
0.04893122
Selling Price per unit before rounding adjustments
0.80171926
Quoted Selling Price per unit after rounding to 4 decimal points
0.8017
Repurchase Charge
The Manager does not impose a repurchase charge on the sale of fund units by the investors. Units are
repurchased by the Manager at NAV per unit, which is the repurchase price.
Illustration 2: Computation of Repurchase Charge
Following through from Illustration 1 above, the repurchase charge and repurchase price of PBBF at the
end of business day of 15 January 2004 is as follows:
RM
NAV per unit
0.75278804
Repurchase charge (Nil)
0.00000000
Repurchase Price per unit before rounding adjustments
0.75278804
Quoted Repurchase Price per unit after rounding to 4 decimal points
0.7528
Charges on Switching and Transfer of Units
There are charges involved for switching and transfer transactions. Please refer to page 11 of Chapter 1:
Key Features of the Funds for more information.
65
FEES, CHARGES AND EXPENSES (CONT’D)
10.2 FEES AND EXPENSES OF THE FUNDS
Operating a fund involves a variety of expenses for portfolio management, the manager’s fee, trustee
and custody costs, audit fees, administrative charges like printing of interim and annual reports, distribution
cheques, postage and other services properly incurred in the administration of the fund. These costs are
paid out of the fund’s assets.
The expenses incurred by each of the funds over the past financial years/period may be obtained from
the Accountants’ Report included in this prospectus.
Manager’s Fee
PBGF and PBBF
The Manager is entitled to a management fee of 1.5% per annum of the NAV of the fund, calculated and
accrued daily, and payable monthly to the Manager.
PBFI
The Manager is entitled to a management fee of 0.75% per annum of the NAV of the fund, calculated
and accrued daily, and payable monthly to the Manager.
Trustee’s Fee
PBGF and PBBF
The Trustee is entitled to a fee of 0.07% per annum of the NAV of the fund subject to a minimum fee of
RM18,000 and a maximum fee of RM450,000 per annum; calculated and accrued daily, and payable
monthly to the Trustee.
PBFI
The Trustee is entitled to a fee of 0.035% per annum of the NAV of the fund subject to a minimum fee of
RM18,000 and a maximum fee of RM300,000 per annum; calculated and accrued daily, and payable
monthly to the Trustee.
Illustration 3: Computation of Annual Management Fee and Annual Trustee Fee
The following is an example of the daily computation of management fee and trustee fee carried out for
PBBF:
RM
Total NAV of PBBF (before deducting management fee and trustee fee for
the day) as at end of 15 January 2004
89,174,477
Management fee accrued for 15 January 2004 (1.5%/366* days x RM89,174,477)
Trustee fee accrued for 15 January 2004 (0.07%/366* days x RM89,174,477)
*
3,655
171
Calendar year 2004 is a leap year, thus explaining the 366 days in the above computation.
The annual management fee and annual trustee fee method of computation illustrated above is applicable
to all the funds carried by this Prospectus.
66
FEES, CHARGES AND EXPENSES (CONT’D)
Expenses Incurred by The Funds
The table below shows the total expenses incurred by the funds in their respective preceding financial
year/period.
Fund
Name
Management
Fee
RM’000
%#
Trustee
Fee
RM’000
%#
Other
Expenses
RM’000
%#
Total Annual
Expenses
Management
Expense Ratio
RM’000
%
1.73
PBGF
255
1.50
13
0.08
26
0.15
294
PBBF
1,095
1.50
53
0.07
31
0.05
1,179
1.62
PBFI
250
0.90
13
0.05
25
0.09
288
1.04
#
Reflected as a percentage of NAV.
All the above fees and expenses are measured in the MER of the fund. The MER is the ratio of the
inherent costs incurred in operating a unit trust fund to the fund’s average value.
A fund’s MER is thus calculated by dividing the total annual management (operating) expenses of
the fund with its average fund size in NAV terms.
Illustration 4: Computation of MER
The total expenses (i.e. fees plus recovered expenses of the fund) incurred by PBBF for the financial year
ended 30 June 2003 was RM1,179,000 and its average net asset value is RM72,966,608. The MER of the
fund is then calculated as follows:
MER (%)
=
Total expenses incurred by the fund
Average value of the fund
=
RM1,179,000
RM72,966,608
=
1.62%
i.e. the fund carries an expense of RM16.20 for every RM1,000 of the average value of the fund
during that financial year.
The MER method of computation illustrated above is applicable to all the funds carried by this Prospectus.
Please refer to Chapter 7: Financial and Investment Highlights of The Funds for the MERs of the respective
funds over their past three (3) financial years.
10.3 POLICY ON STOCKBROKING REBATES AND SOFT COMMISSIONS
The management company does not receive any form of rebates or soft commissions from brokers. All
dealings with brokers are executed at competitive market rates.
There are fees and charges involved and investors are advised to consider the fees and charges
before investing in the fund.
67
11. UNITHOLDERS’ RIGHTS
A unitholder is a person registered in the register as a holder of units or fractions of units in a fund
which automatically accord him rights and interests in the fund.
For new investors, the date of his first investment with the fund is the date on which he is recognised as
a unitholder i.e. in the case of cash sales, the date of depositing of investment monies, and in the case
of EPF sales, the date of submission of application forms to the Manager, subject to acceptance of the
application request by the Manager.
11.1 UNITHOLDERS’ RIGHTS AND LIMITATIONS
Unitholders shall be entitled to receive the distributions of the fund, participate in any increase in the
capital value of the units, and to other rights and privileges as are provided for in the Deed.
Unitholders are vested with the powers to call for a unitholders’ meeting, and to vote for the removal of
the Trustee or the Manager through an Extraordinary Resolution.
Investors who are investing with Public Mutual for the first time are entitled to a cooling-off period of 6
business days from the date of receipt of the application form (deemed to be the date of depositing of
investment monies into the collection accounts of Public Mutual). For EPF unitholders, the cooling-off
period shall begin from the date of receipt of the application form (deemed to be the date of acceptance
of the application form by Public Mutual). During this period of cooling-off, the unitholder, upon changing
his mind about the unit trust investment that he had made, may exercise his cooling-off right by issuing
a cooling-off request to Public Mutual and he will be paid a full refund of his investment principal within
10 days. This cooling-off right, however, shall not extend to a corporation or institution, the staff of
Public Mutual, and persons registered to deal in its unit trust funds.
In addition, unitholders shall receive annual and interim reports of the fund which are sent out within
two months from the close of each financial year/period.
No unitholder shall be entitled to require the transfer to him of any of the assets comprised in the fund
or be entitled to interfere with or question the exercise by the Trustee or the Manager on his behalf of
the rights of the Trustee as owner of such assets.
11.2 UNITHOLDERS’ LIABILITIES
No unitholders shall by reason of the provisions of the Deed and the relationship created thereby between
the unitholders, the Trustee and the Manager be liable for any amount in excess of the purchase price
paid for the unit, and shall not be under any obligation to indemnify the Trustee and/or the Manager in
the event that the liabilities incurred by the Trustee and the Manager in the name of or on behalf of the
fund pursuant to and/or in the performance of the provisions of the Deed exceed the Gross Asset Value
of the fund, and any right of indemnity of the Trustee and/or Manager will be limited to recourse to the
fund.
11.3 JOINTHOLDERS
Units may be registered in the name of more than one unitholder subject to a maximum number of two
jointholders. If the units are held by jointholders of whom one is a minor, the first registered unitholder
must be an adult who is not less than 18 years of age.
In the event of the demise of a jointholder, the Manager shall only recognise the surviving jointholder as
the rightful person having title or right of interest to the units in the account. However, if the surviving
jointholder is a minor, the units in the account shall be vested in the estate of the deceased jointholder
upon receipt by the Manager of the necessary documentation.
68
UNITHOLDERS’ RIGHTS (CONT’D)
11.4 DOCUMENTS AVAILABLE FOR INSPECTION
Unitholders may inspect the following documents at the registered office of the Manager and/or the
Trustee during their normal business hours without charge (for a period of not less than 12 months from
the date of this prospectus):
(a)
The Master Deed and Supplemental Deeds;
(b)
Each material contract or document referred to in this Prospectus;
(c)
The latest annual and interim reports of the funds;
(d)
All reports, letters or other documents, and statements referred to in this Prospectus;
(e)
The audited accounts of the Manager and the funds for the last 5 financial years or from the date
of commencement if fewer than 5 years, preceding the date of this Prospectus;
(f)
Latest audited accounts of the Manager for the current financial year; and
(g)
Any consent given by experts or persons whose statement appears in this Prospectus.
11.5 THE DEED
Copies of the Deed may be obtained from the Manager at a cost of RM10 each or may be inspected free
of charge during normal working hours at the offices of the Manager.
All holders of units will be entitled to the benefit of, be bound by and be deemed to have notice of the
provisions of the Deed, copies of which are available as mentioned above.
69
TAXATION OF THE FUND AND UNITHOLDERS
(Prepared for inclusion in this Prospectus)
The Board of Trustees
Amanah Raya Berhad
c/o Public Mutual Berhad
Block B, Sri Damansara Business Park
Persiaran Industri
Bandar Sri Damansara
52200 Kuala Lumpur
16 April 2004
Dear Sirs,
Re: Taxation of the Funds and Unit Holders
This letter has been prepared for inclusion in the Prospectus to be dated 30 April 2004 in connection with
the offer of units in the PB Balanced Fund, PB Growth Fund and PB Fixed Income Fund (“the funds”).
Taxation of the Funds
The funds are treated as unit trusts for Malaysian tax purposes. The taxation of the funds is therefore
governed principally by Sections 61 and 63B of the Income Tax Act, 1967 (“the Act”).
The income of the funds in respect of investment income derived from or accruing in Malaysia is liable to
income tax (the prevailing rate is 28%).
Capital gains from the realisation of investments by the funds will not be subject to income tax.
Taxable dividend income earned by the funds would have suffered a tax deduction at source at the
prevailing rate of 28%. The tax deducted will be available for set off either wholly or partly against the
tax liability of the funds. Any excess over the tax liability will be refundable to the funds.
Interest income or profit earned by the funds from the following are exempt from tax:
any savings certificates, securities or bonds issued by the Government; or
securities or bonds guaranteed by the Government; or
debentures, other than convertible loan stock, approved by the Securities Commission; or
Bon Simpanan Malaysia issued by the Central Bank of Malaysia; or
bonds or securities issued by Pengurusan Danaharta Nasional Berhad; or
bonds other than convertible loan stocks, issued by any company listed in Malaysia Exchange of
Securities Dealing and Automated Quotation Berhad; or
a bank or financial institution licensed under the Banking and Financial Institutions Act 1989 or
Islamic Banking Act 1983.
Income received by the funds from sources outside Malaysia will be exempt from tax.
Deductions in respect of the funds’ expenses such as manager’s remuneration, expenses on maintenance
of register of unit holders, share registration expenses, secretarial, audit and accounting fees, telephone
charges, printing and stationery costs and postage (“permitted expenses”) are allowed based on the
formula subject to a minimum of 10% and a maximum of 25% of the total permitted expenses.
70
TAXATION OF THE FUND AND UNITHOLDERS (CONT’D)
Taxation of Unit Holders
Unit holders are taxed on an amount equivalent to their share of the total taxable income of the funds,
to the extent that this is distributed to them. The income distribution from the funds will carry with it a
tax credit proportionate to each unit holder’s share of the total taxable income in respect of the tax paid
by the funds. Unit holders will be entitled to utilise the tax credit as a set off against the tax payable by
them. No other withholding tax will be imposed on the income distribution of the funds.
Corporate unit holders, resident or non resident in Malaysia, would be taxed at the corporate tax (the
prevailing rate is 28%) on distributions of income from the funds to the extent of an amount equivalent
to their share of the total taxable income of the funds. For Year of Assessment 2004, corporate unit
holders with paid-up capital in the form of ordinary shares of RM2.5 million and below will be subject to
a tax rate of 20% on chargeable income of up to RM500,000. For chargeable income in excess of
RM500,000, the prevailing rate is still applicable.
Individuals and other non-corporate unit holders who are resident in Malaysia will be subject to income
tax at scale rates. The prevailing scale rates range from 1% to 28%.
Individuals and other non-corporate unit holders who are not resident in Malaysia, for tax purposes, will
be subject to Malaysian income tax (the prevailing rate is 28%). Non resident unit holders may also be
subject to tax in their respective jurisdictions and depending on the provisions of the relevant tax legislation
and any double tax treaties with Malaysia, the Malaysian tax suffered may be creditable in the foreign
tax jurisdictions.
The distribution of tax exempt income by the funds will not be subject to tax in the hands of the unit
holders. Distributions of foreign income will also be exempt in the hands of the unit holders. In the case
of the corporate unit holders, distribution from foreign exempt income can also be further paid out to its
shareholders and is also exempt in their hands.
Unit split by the funds will be exempt from tax in the hands of the unit holders.
Any gains realised by the unit holders (other than financial institutions, insurance companies and those
dealing in securities) from the transfers or redemptions of the units are treated as capital gains which are
not subject to income tax.
The tax position is based on the Malaysian tax laws and provisions as they stand at present.
All prospective investors should not treat the contents of this letter as advice relating to taxation matters
and are advised to consult their own professional advisers concerning their respective investments.
Yours faithfully
Shalet Marian
Director
71
ACCOUNTANTS’ REPORT
(Prepared for inclusion in this Prospectus)
16 April 2004
The Board of Directors
Public Mutual Berhad
Block B, Sri Damansara Business Park,
Persiaran Industri, Bandar Sri Damansara,
52200 Kuala Lumpur
Gentlemen,
1
INTRODUCTION
We, as the auditors and reporting accountants of Public Mutual Berhad have prepared this report
for inclusion in the Prospectus to be dated 30 April 2004 to be issued by Public Mutual Berhad (“the
Management Company”) in connection with the public offer of units in the following funds:
i.
PB Balanced Fund (PBBF)
ii.
PB Growth Fund (PBGF)
iii.
PB Fixed Income Fund (PBFI)
The abovementioned funds are collectively referred to as “the funds”. The Management Company
or Manager of the funds is Public Mutual Berhad.
The funds are governed by a Master Deed dated 9 August 2002 entered into between the
Management Company and the Trustee for the registered unitholders of the Funds. PBBF was
established pursuant to the execution of a Deed dated 23 April 1998 and the Supplemental Deed
dated 30 April 1999. On 9 August 2002, a Master Deed was executed to consolidate the said
principal deed and supplemental deed into a Master Deed encompassing PBBF, PBGF and PBFI. The
Management Company and the Trustee are companies incorporated in Malaysia.
2
DISTRIBUTIONS OF RETURNS BY THE FUNDS
Details of distributions made by PBBF and PBFI, together with the buying and selling prices at the
date of distribution, for the past five (5) financial years or since the date of establishment whichever
applicable, preceding the date of this report are set out below.
Date
of
Distribution
Rate of Gross
Distribution
Per Unit
Rate of Net
Distribution
Per Unit
Buying Price
Per Unit
RM
Selling Price
Per Unit
RM
PBBF
30 June, 1999
30 June, 2000
30 June, 2001
30 June, 2002
30 June, 2003
7.00 sen
8.00 sen
6.00 sen
5.00 sen
3.50 sen
7.00 sen
7.94 sen
6.00 sen
4.99 sen
3.11 sen
1.39
1.37
0.65
0.7439
0.6965
1.46
1.44
0.69
0.7923
0.7418
PBFI
30 June, 2003
4.00 sen
4.00 sen
1.0714
1.0740
72
ACCOUNTANTS’ REPORT (CONT’D)
3
UNIT SPLIT BY THE FUNDS
Details of unit split made by PBBF and PBFI, together with the buying and selling price per unit of
the fund at date of distribution, for the past five (5) financial years preceding the date of this
report are as follows:
Date of
Unit Split
Rate of
Unit Split
PBBF
30 June, 2000
2:3
PBFI
30 June, 2003
1:35
Buying Price
Per Unit
RM
Selling Price
Per Unit
RM
1.37
1.44
1.0714
1.0740
There has been no income distribution or additional units declared or made by PBGF since the date
of its establishment.
4
QUOTED BUYING AND SELLING PRICES AND NET ASSET VALUE PER UNIT OF THE FUNDS
AS AT 16 APRIL 2004
The quoted buying and selling prices of units and net asset value per unit of the funds as at 16 April
2004 being the last practical date prior to the date of this report were as follows:
PBBF
5
Buying Price
Per Unit
RM
Selling Price
Per Unit
RM
Net Asset Value
Per Unit
RM
0.7957
0.8475
0.7957
PBGF
0.6715
0.7152
0.6715
PBFI
1.0130
1.0155
1.0130
EXTRACT OF FINANCIAL INFORMATION ON THE FUNDS
The extract of the Income Statement and Statement of Assets and Liabilities of PBBF, PBGF and PBFI
based on the audited financial statements of the respective funds for the past 5 financial years or
since the respective dates of their establishment, preceding the date of this report are set out in
the subsequent paragraphs to this report.
Where applicable, the interim audited financial statements of the fund is included when the most
recent audited financial statements of the said fund is more than 6 months from the date of this
report.
73
ACCOUNTANTS’ REPORT (CONT’D)
PB Balanced Fund
Statement of Income and Expenditure for years ended 30 June and period ended 31 December
6-Mth Ended
31.12.03
2003
RM’000 RM’000
Investment Income
Interest income
Gross dividend income
Realised gains on sale/
redemption of investments
Accretion of discount,
net of amortisation
of premium
2002
2001
2000
1999
RM’000 RM’000 RM’000 RM’000
765
767
1,296
1,110
984
1,657
897
648
637
537
788
157
2,596
1,521
2,738
454
2,376
3,055
66
119
407
798
1,004
1,562
4,194
4,046
5,786
2,797
4,554
5,562
Expenditure
Trustee’s fee
Management fee
Audit fee
Other expenses
30
648
3
11
53
1,095
6
25
52
979
7
27
46
860
6
25
46
865
3
20
27
497
3
19
Total Expenditure
692
1,179
1,065
937
934
546
Net Income Before Taxation
Taxation
3,502
(152)
2,867
(225)
4,721
(334)
1,860
(135)
3,620
(99)
5,016
(20)
Net Income After Taxation
Distribution Equalisation
3,350
-
2,642
459
4,387
278
1,725
1,150
3,521
-
4,996
1,735
3,350
3,101
4,665
2,875
3,521
6,731
1,403
1,638
3,973
3,772*
4,504
(3,705)
6,303
(4,900)
6,848
(5,210)
7,293
(3,320)
6,731
(2,918)
Total Investment Income
Undistributed income
brought forward
756*
-
Distribution paid and payable
4,106
-
Undistributed income
carried forward
4,106
799
1,403
1,638
3,973
3,813
Net Income After Taxation
is made up as follows:
Realised
Unrealised
3,350
-
2,642
-
4,387
-
1,725
-
3,521
-
4,996
-
3,350
2,642
4,387
1,725
3,521
4,996
* The undistributed income b/f for 2003 and 2000 are stated after netting off negative distribution
equalisation of RM43,000 and RM41,000 respectively.
74
ACCOUNTANTS’ REPORT (CONT’D)
PB Balanced Fund
Statement of Assets and Liabilities as at 30 June and 31 December
As at
31.12.03
RM’000
2003
RM’000
2002
RM’000
2001
RM’000
2000
RM’000
1999
RM’000
Assets
Investments
Other Assets
87,641
145
82,935
517
74,478
2,045
57,219
683
58,111
162
56,400
2,913
Total Assets
87,786
83,452
76,523
57,902
58,273
59,313
Liabilities
Creditors and Accruals
Distribution payable
302
-
560
3,705
3,383
4,900
1,719
5,210
1,045
3,320
1,735
2,918
Total Liabilities
302
4,265
8,283
6,929
4,365
4,653
Net Assets
87,484
79,187
68,240
50,973
53,908
54,660
Unitholders’ Funds
87,484
79,187
68,240
50,973
53,908
54,660
Net Asset Value Per Unit,
Ex-Distribution/
Unit Split (RM)
0.7368
0.6654
0.6940
0.59
0.78
1.32
75
ACCOUNTANTS’ REPORT (CONT’D)
PB Growth Fund
Statement of Income and Expenditure for periods ended 30 June and 31 December
6-Mth Ended
31.12.03
RM’000
From 9.8.02
to 30.6.03
RM’000
Investment Income
Interest income
Gross dividend income
Realised gains on sale of investments
Accretion of discount, net of amortisation of premium
311
329
1,132
-
444
187
110
4
Total Investment Income
1,772
745
Expenditure
Trustee’s fee
Management fee
Audit fee
Other expenses
12
260
3
8
13
255
6
20
Total Expenditure
283
294
Net Income Before Taxation
Taxation
1,489
(58)
451
(40)
Net Income After Taxation
Distribution Equalisation
1,431
29
411
46
Undistributed income brought forward
1,460
457
457
-
Undistributed income carried forward
1,917
457
Net Income After Taxation is made up as follows:
Realised
Unrealised
1,431
-
411
-
1,431
411
76
ACCOUNTANTS’ REPORT (CONT’D)
PB Growth Fund
Statement of Assets and Liabilities as at 30 June and 31 December
As at 31.12.03
RM’000
2003
RM’000
Assets
Investments
Other Assets
36,073
168
31,528
33
Total Assets
36,241
31,561
Liabilities
Creditors and Accruals
Distribution payable
15
-
1,214
-
Total Liabilities
15
1,214
Net Assets
36,226
30,347
Unitholders’ Funds
36,226
30,347
Net Asset Value Per Unit (RM)
0.6022
0.5219
77
ACCOUNTANTS’ REPORT (CONT’D)
PB Fixed Income Fund
Statement of Income and Expenditure for periods ended 30 June and 31 December
6-Mth Ended
31.12.03
RM’000
From 9.8.02
to 30.6.03
RM’000
Investment Income
Interest income
Realised gains on sale of investments
Accretion of discount, net of amortisation of premium
2,314
157
1,116
2,081
75
Total Investment Income
2,471
3,272
Expenditure
Trustee’s fee
Management fee
Audit fee
Other expenses
17
377
3
9
13
250
6
19
Total Expenditure
406
288
Net Income Before Taxation
Taxation
2,065
-
2,984
-
Net Income After Taxation
Distribution Equalisation
2,065
234
2,984
671
Undistributed income brought forward
2,299
775
3,655
-
Distribution paid and payable
3,074
-
3,655
(2,880)
Undistributed income carried forward
3,074
775
Net Income After Taxation is made up as follows:
Realised
Unrealised
2,065
-
2,984
-
2,065
2,984
78
ACCOUNTANTS’ REPORT (CONT’D)
PB Fixed Income Fund
Statement of Assets and Liabilities as at 30 June and 31 December
As at 31.12.03
RM’000
2003
RM’000
Assets
Investments
Other Assets
98,453
93
75,673
1,913
Total Assets
98,546
77,586
Liabilities
Creditors and Accruals
Distribution payable
16
-
454
2,880
Total Liabilities
16
3,334
Net Assets
98,530
74,252
Unitholders’ Funds
98,530
74,252
Net Asset Value Per Unit, Ex-Distribution/Unit Split (RM)
0.9987
1.0027
79
ACCOUNTANTS’ REPORT (CONT’D)
5.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES OF THE FUNDS
(a)
Basis of Accounting
The financial statements have been prepared under the historical cost convention, modified
by the revaluation of investments, in accordance with applicable Approved Accounting
Standards in Malaysia, the Securities Commission’s Guidelines on Unit Trust Funds in Malaysia
and comply with the requirements of the Deeds.
(b)
Investments
Quoted securities and derivative instruments are valued at the last done market price.
Unquoted securities are valued at fair value as determined by the Manager, on methods or
bases that have been approved by the Trustee.
The fair value of unquoted fixed income securities is determined from market quotations
gathered from a number of reputable financial institutions and incorporating an evaluation
process of pricing that considers the relative liquidity and credit risks.
Surplus or deficit on revaluation of investments is transferred to unrealised reserves.
Short term commercial papers and government bills are valued at cost adjusted for accrued
interest and accretion of discount, net of amortisation of premium to maturity date.
(c)
Income Recognition
Interest income is recognised on an accrual basis.
Dividend income is recognised on a declared basis, when right to receive the dividend has
been established.
The realised gain or loss on sale/redemption of investment is measured as the difference
between the net disposal proceeds and the carrying amount of the investment.
Discount is accreted and premium is amortised over the period to maturity as approved by
the Manager and the Trustee.
(d)
Distribution Equalisation
Distribution equalisation is accounted for at the date of creation and release. It represents the
average amount of distributable income included in the creation and release prices of units.
(e)
Financial Instruments
Financial assets and financial liabilities carried on the statement of assets and liabilities include
cash at bank, quoted and unquoted securities, derivative instruments, short term commercial
papers, government bills, deposits and placements with licensed institutions, receivables and
payables. The accounting policies on recognition and measurement of the fair value for
these items are disclosed in their respective accounting policies.
The fair value for the financial assets and liabilities with maturity of less than one year are
stated at approximately their carrying amount as at the date of statement of assets and liabilities.
Financial instruments are classified as investments and assets or liabilities in accordance with
the substance of the contractual arrangement. Interest, dividends, gains and losses relating
to financial instruments classified as assets, are reported as investment income.
80
ACCOUNTANTS’ REPORT (CONT’D)
(f)
Financial Risk Management Policies
The Funds are exposed to a variety of financial risks, which include market risk, single issuer
risk, interest rate risk, credit risk and liquidity risk. The overall financial risk management
objective of the Funds is to mitigate capital losses.
Financial risk management is carried out through policy reviews, internal control systems and
adherence to the investment powers and restrictions stipulated in the Securities Commission’s
Guidelines on Unit Trust Funds in Malaysia.
(a)
Market Risk
Market risk arises when the value of the securities fluctuate in response to the activities
of individual companies, and general market or economic conditions. The market risk is
managed through portfolio diversification and asset allocation whereby the securities
exposure will be reduced in the event of anticipated market weakness.
(b)
Single Issuer Risk
The Funds are restricted to invest in securities issued by any issuer of not more than a
certain percentage of its net asset value. Under such restriction, the exposure risk to the
securities of any issuer is minimised.
(c)
Interest Rate Risk
Interest rate moves in the opposite direction of bond prices. When the interest rates
rise, bond prices fall and vice versa. When interest rate trend is anticipated to rise, the
exposure to fixed income securities will be reduced.
(d)
Credit Risk
Credit risk refers to the ability of an issuer or a counterparty to make timely payments
of interest, principals and proceeds from realisation of investments. The Manager
manages the credit risk by setting counterparty limits and undertaking credit evaluation
to minimise such risk.
(e)
Liquidity Risk
The Funds maintain sufficient level of liquid assets, after consultation with the Trustee,
to meet anticipated payments and cancellation of units by unitholders. Liquid assets
comprise cash, deposits and placements with licensed institutions and other instruments,
which are capable of being converted into cash within 7 days. The Funds’ policy is to
always maintain a prudent level of liquid assets so as to reduce the liquidity risk.
6
INFORMATION OF THE MANAGEMENT COMPANY
The Management Company is a public limited liability company, incorporated and domiciled in
Malaysia. The registered office of the Management Company is located at Block B, Sri Damansara
Business Park, Persiaran Industri, Bandar Sri Damansara, 52200 Kuala Lumpur.
The holding and ultimate holding companies of the Management Company are Public Consolidated
Holdings Sdn. Bhd. and Public Bank Berhad, a licensed bank, respectively, both of which are
incorporated in Malaysia.
The Management Company has within the last 5 years immediately preceding the date of this
report offered for sale units in all the abovementioned funds.
81
ACCOUNTANTS’ REPORT (CONT’D)
6.1 AUDITED FINANCIAL STATEMENT OF THE MANAGEMENT COMPANY
The financial statements of the Management Company for the financial year ended 31 December
2003 was audited by Ernst & Young, Malaysia and the financial statements for the past 4 financial
years preceding the date of this report were audited by Arthur Andersen & Co., Malaysia. These
audited financial statements were reported on without any qualification.
6.2 SUMMARISED FINANCIAL INFORMATION ON THE MANAGEMENT COMPANY
The summarised financial information on the Management Company tabulated below has taken
into effects of changes in accounting policies arising from the adoption of MASB 19: Events After
the Balance Sheet Date and MASB 25: Income Taxes.
6.2.1 Income Statements
The condensed Income Statements of the Management Company for the past 5 financial
years ended 31 December are as follows:
31.12.03
RM’000
31.12.02
RM’000
31.12.01
RM’000
31.12.00
RM’000
31.12.99
RM’000
Revenue
151,390
128,716
107,658
132,776
94,649
Profit Before Taxation
Taxation
54,808
(16,200)
43,918
(11,173)
38,320
(11,500)
45,457
(13,638)
42,028
-
38,608
-
32,745
-
26,820
(359)
31,819
(229)
42,028
25
38,608
32,745
26,461
31,590
42,053
Profit After Taxation per audited
financial statements
Effects of adopting MASB 25*
*
The effects of adopting MASB 25 for the financial years ended 31 December 2003 and
2002 have already been incorporated in the profit after taxation per audited financial
statements.
6.2.2 Statement of Changes in Equity
The condensed Statement of Changes in Equity of the Management Company, after making
the necessary adjustments, for the past 5 financial years ended 31 December are as follows:
31.12.03
RM’000
31.12.02
RM’000
31.12.01
RM’000
31.12.00
RM’000
31.12.99
RM’000
Retained profits as at 1 January
per audited financial statements
156,154
- Effects of adopting MASB 19 (note i)
- Effects of adopting MASB 25 (note ii)
-
123,215
1,394
96,395
1,200
1,753
65,776
600
1,982
24,348
1,957
- as restated
156,154
124,609
99,348
68,358
26,305
Profit After Taxation
38,608
32,745
26,461
31,590
42,053
Final dividends
(1,500)
(1,200)
(1,200)
Retained Profit as at 31 December
(600)
-
193,262
156,154
124,609
99,348
68,358
Gross dividends per share (RM)
0.25
0.20
0.20
0.10
-
Net dividends per share (RM)
0.25
0.20
0.20
0.10
-
82
ACCOUNTANTS’ REPORT (CONT’D)
Note i :
The final ordinary dividend net of 28% taxation and the final tax exempt ordinary
dividends in respect of the financial years 1999 and 2000 were declared and paid
subsequent to the financial years 1999 and 2000 respectively. Accordingly, these
dividends have been adjusted for as appropriation of the retained profits in the
financial years 2000 and 2001, in line with the adoption of MASB 19: Events After
the Balance Sheet Date.
Note ii :
The effects of change in accounting policy arising from adoption of MASB 25: Income
Taxes.
6.2.3 Balance Sheet
The condensed Balance Sheet of the Management Company for the past 5 financial years as
at 31 December are set out below.
Note 31.12.03
RM’000
31.12.02
RM’000
31.12.01
RM’000
31.12.00
RM’000
31.12.99
RM’000
277,856
226,778
187,594
155,117
104,488
Current Liabilities
96,755
80,573
75,811
68,748
47,524
Net Current Assets
181,101
146,205
111,783
86,369
56,964
Property, Plant and
Equipment
13,729
13,368
17,637
17,970
14,780
Investment Property, at Cost
-
-
-
-
1,485
Agents’ Retirement Benefits
(160)
(189)
(205)
(564)
(673)
Deferred Tax Assets
4,592
2,770
1,394
1,573
1,802
199,262
162,154
130,609
105,348
74,358
6,000
6,000
6,000
6,000
6,000
193,262
156,154
123,215
96,395
65,776
199,262
162,154
129,215
102,395
71,776
-
-
1,394
2,953
2,582
199,262
162,154
130,609
105,348
74,358
33.21
27.02
21.76
17.55
12.39
Current Assets
Capital and Reserves
Share capital
(i)
Retained profits per
audited financial
statements
Effects of adopting
MASB 19 and 25
Net Assets per share (RM)
(i)
Share Capital
RM’000
Ordinary shares of RM1.00 each
Authorised
10,000
Issued and fully paid
6,000
6.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES OF THE MANAGEMENT COMPANY
83
ACCOUNTANTS’ REPORT (CONT’D)
6.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICES OF THE MANAGEMENT COMPANY
(a)
Basis of Preparation
The financial statements of the Management Company have been prepared under the
historical cost convention and comply with the provisions of the Companies Act 1965 and
applicable Approved Accounting Standards in Malaysia.
During the financial year ended 31 December 2003, the Management Company adopted the
following Malaysian Accounting Standard Board (“MASB”) Standards for the first time:
MASB 25
MASB 27
MASB 28
MASB 29
Income Taxes
Borrowing Costs
Discontinuing Operations
Employee Benefits
Except for MASB 25, the adoption of the new standards have not given rise to any adjustments
to the opening balances of retained profits of the prior and current year or to changes in
comparatives. The effects of adopting MASB 25 are summarised in the Statement of Changes
in Equity.
(b)
Property, Plant and Equipment and Depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and impairment
losses. The policy for the recognition and measurement of impairment losses is in accordance
with note (g).
Depreciation is provided on a straight-line basis to write off the cost of each asset to its
residual value over the estimated useful life at the following annual rates:
Freehold and long term leasehold buildings
Computer equipment
Motor vehicles
Renovation
Office equipment
Furniture and fittings
2%
12.5% - 50%
20%
12.5% - 50%
12.5% - 33.3%
12.5% - 33.3%
Upon the disposal of an item of property, plant or equipment, the difference between the
net disposal proceeds and carrying amount is charged to the income statement.
(c)
Manager’s Stocks
Manager’s stocks represent trust units held in the Public Savings Fund, Public Growth Fund,
Public Index Fund, Public Industry Fund, Public Aggressive Growth Fund, Public Regular Savings
Fund, Public Balanced Fund, Public Bond Fund, Public Ittikal Fund, PB Balanced Fund, Public
SmallCap Fund, Public Islamic Bond Fund, Public Equity Fund, PB Growth Fund, PB Fixed Income
Fund, Public Institutional Bond Fund, Public Islamic Equity Fund and Public Money Market
Fund and are stated at the lower of cost and net realisable value. Cost is determined on
weighted average basis.
84
ACCOUNTANTS’ REPORT (CONT’D)
(d)
Trade Receivables and Payables
Trade receivables and payables refer to the amounts due from or due to trust funds managed
by the Management Company in respect of the cancellation and creation of trust units
respectively. Trade receivables also include management fee receivable from trust funds.
Trade receivables and payables are stated at cost, which is the fair value of the consideration
for the trust units created or cancelled.
(e)
Income Tax
Income tax on the profit for the year comprises current and deferred tax. Current tax is the
expected amount of income taxes payable in respect of the taxable profit for the year and is
measured using the tax rates that have been enacted at the balance sheet date.
Deferred tax is provided for, using the liability method, on temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. In principle, deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised for all deductible temporary
differences, unused tax losses and unused tax credits to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, unused
tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary
difference arises from goodwill or negative goodwill or from the initial recognition of an
asset or liability in a transaction which is not a business combination and at the time of
transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the
asset is realised or the liability is settled, based on tax rates that have been enacted at the
balance sheet date. Deferred tax is recognised in the income statement, except when it arises
from a transaction which is recognised directly in equity, in which case the deferred tax is also
charged or credited directly in equity, or when it arises from a business combination that is an
acquisition in which case the deferred tax is included in the resulting goodwill or negative
goodwill.
Prior to the adoption of MASB 25 : Income Taxes on 1 January 2003, deferred tax was provided
for using the liability method in respect of significant timing differences and deferred tax
assets were not recognised unless there was reasonable expectation of their realisation.
(f)
Revenue Recognition
Revenue is recognised when it is probable that the economic benefits associated with the
transaction will flow to the enterprise and the amount of the revenue can be measured
reliably.
(i)
Sale of units
Revenue from sale of units is recognised upon allotment of units, net of cost of units
sold.
(ii)
Management fee and interest income
Management fee and interest income is recognised on an accrual basis.
(iii)
Distribution income
Income in respect of distributions by trust funds is recognised on receipt basis.
85
ACCOUNTANTS’ REPORT (CONT’D)
(g)
Impairment of Assets
At each balance sheet date, the Management Company reviews the carrying amounts of its
assets, other than manager’s stocks and financial assets, to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists,
impairment is measured by comparing the carrying values of the assets with their recoverable
amounts. Recoverable amount is the higher of net selling price and value in use, which is
measured by reference to discounted future cash flows. Recoverable amounts are estimated
for individual assets or, if it is not possible, for the cash-generating unit to which the asset
belongs.
An impairment loss is charged to the income statement immediately, unless the asset is carried
at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation
decrease to the extent of any available previously recognised revaluation surplus for the
same asset.
Reversal of impairment losses recognised in prior years is recorded when there is an indication
that the impairment losses recognised for the asset no longer exist or have decreased. The
reversal is recognised to the extent of the carrying amount of the asset that would have been
determined (net of amortisation and depreciation) had no impairment loss been recognised.
The reversal is recognised in the income statement immediately, unless the asset is carried at
revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to
revaluation surplus. However, to the extent that an impairment loss on the same revalued
asset was previously recognised as an expense in the income statement, a reversal of that
impairment loss is recognised as income in the income statement.
(h)
Provisions
A provision is recognised when it is probable that an outflow of resources embodying economic
benefits will be required to settle a present obligation as a result of a past event and a
reliable estimate can be made of the amount.
(i)
Employee Benefits
(i)
Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense
in the year in which the associated services are rendered by employees of the
Management Company. Short term accumulating compensated absences such as paid
annual leave are recognised when services are rendered by employees that increase
their entitlement to future compensated absences, and short term non-accumulating
compensated absences such as sick leave are recognised when the absences occur.
(ii)
Defined contribution plans
As required by law, companies incorporated in Malaysia make contributions to the state
pension scheme, the Employees Provident Fund (“EPF”). Such contributions are recognised
as an expense in the income statement as incurred.
(iii)
Equity compensation benefits
The eligible employees of the Company are entitled to acquire shares of its ultimate
holding company, Public Bank Berhad via participation in the Public Bank Berhad
Employees’ Share Option scheme (“PBB ESOS”). The disclosure on the terms of the PBB
ESOS is made in the financial statements of the ultimate holding company.
86
ACCOUNTANTS’ REPORT (CONT’D)
(j)
Financial Instruments
Financial instruments are recognised in the balance sheet when the Management Company
has become a party to the contractual provisions of the instrument. Financial instruments
are classified as liabilities or equity in accordance with the substance of the contractual
arrangement.
(i)
Equity instruments
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in
equity in the period in which they are declared.
(ii)
Other financial instruments
The accounting policies, together with the disclosure of fair value for financial
instruments other than equity instruments are disclosed in the individual policies
associated with each item.
(iii)
Fair Value
The fair values for financial assets and liabilities with a maturity of less than one year
are stated at approximately their carrying amount as at the balance sheet.
7
CURRENCY
All amounts are stated in Ringgit Malaysia.
8
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements of the Management Company have been prepared in respect of
any period subsequent to the financial year ended 31 December 2003.
Yours faithfully
Ernst & Young
AF: 0039
Chartered Accountants
Gladys Leong
No. 1902/04/04(J)
Partner
87
NETWORK OF
PUBLIC MUTUAL BRANCH OFFICES
Head Office
Block B, Sri Damansara Business Park,
Persiaran Industri, Bandar Sri Damansara,
52200 Kuala Lumpur.
Tel: 03 - 62796800 Fax: 03 - 62779800
Hotline: 03 - 62795252
Web: http://www.publicmutual.com.my
Financial Planning Centre
No 39 & 41, Jalan Telawi 3,
Bangsar Baru,
59100 Kuala Lumpur
Tel: 03-22877348
Fax: 03-22877358
Branches
West Malaysia
Northern Region
Alor Star
No. 1888, A & B, Jalan Stadium,
05100 Alor Star, Kedah.
Tel: 04-7312560 Fax: 04-7310178
Branch Manager: Khaw Bee Ruh
Ipoh
No. 39, Persiaran Greentown 4,
Greentown Business Centre, 30450 Ipoh, Perak.
Tel: 05-2538411/5 Fax: 05-2559859
Senior Branch Manager: Foong Kuan Mun
Sungai Petani
86B, Mezzanine Floor, Jalan Pengkalan,
Taman Pekan Baru, 08000 Sungai Petani, Kedah.
Tel: 04-4230642 Fax: 04-4230663
Branch Manager: Angeline Ang Bey Bey
Butterworth
No. 6, 1st & 2nd Floor, Jalan Todak 1,
Pusat Bandar Seberang Jaya,
13700 Prai, Penang.
Tel: 04-3990300 Fax: 04-3990400
Senior Branch Manager: Charmane Chew Hui Hsia
Penang
16 & 16A, Lintang Burma,
10250 Pulau Tikus, Penang.
Tel: 04-2295505 Fax: 04-2295171
Senior Branch Manager: Vincent Seow Weng Sim
Central Region
Bangsar
11, Jalan Bangsar Utama 3,
Bangsar Utama, 59000 Kuala Lumpur.
Tel: 03-22835735 Fax: 03-22835739
Senior Branch Manager: Khoo Peng Seng
Cheras
42-4, 44-2 & 44-4, Cheras Commercial Centre,
Jalan 5/101C, Off Jalan Kaskas,
56100 Cheras, Kuala Lumpur.
Tel: 03-91327620/4421 Fax: 03-91321022
Damansara Perdana
No. 1 & 3, Jalan PJU 8/5 I,
Perdana Business Centre,
Bandar Damansara Perdana,
47820 Petaling Jaya, Selangor.
Tel: 03-77222470 Fax: 03-77222475
Branch Manager: Annie Tan Yen Nee
Klang
155-A & B, Wisma Harp Soon,
Jalan Meru, 41050 Klang,
Selangor.
Tel: 03-33449344 Fax: 03-33440889
Branch Manager: Ong Chen Hung
Southern Region
Johor Bahru
30th Floor, Public Bank Tower,
19, Jalan Wong Ah Fook ,
80000 Johor Bahru, Johor.
Tel: 07-2281098 Fax: 07-2271098
Melaka
173 & 173-A, 172-A
Taman Melaka Raya,
75000 Melaka.
Tel: 06-2837654 Fax: 06-2837354
Kluang
16, Jalan Dato Haji Hassan,
86000 Kluang, Johor.
Tel: 07-7736193/4 Fax: 07-7736195
Branch Manager: Tan Kheng Aun
Muar
46, 1st Floor, Jalan Sayang,
84000 Muar, Johor.
Tel: 06-9542323 Fax: 06-9536830
Branch Manager: Angie Ng Seow Mai
88
NETWORK OF
PUBLIC MUTUAL BRANCH OFFICES (CONT’D)
Southern Region
Seremban
No. 13, Ground, 1st & 2nd Floor, Jalan Utam Singh,
70000 Seremban, Negeri Sembilan.
Tel: 06-7616663 Fax: 06-7644237
Senior Branch Manager: Chooi Chan Yen
East Coast Region
Kota Bahru
2817-A, Tingkat 1 & 2, Jalan Che Su,
15000 Kota Bahru, Kelantan.
Tel: 09-7476021/22 Fax: 09-7476026
Kuantan
Ground & 1st Floor, 73, Jalan Haji Abdul Aziz,
25000 Kuantan, Pahang.
Tel: 09-5178115 Fax: 09-5161223
Branch Manager: Melinda Chew Yuet Leng
Kuala Terengganu
No. 8, Mezzanine Floor, Jalan Air Jernih,
20300 Kuala Terengganu, Terengganu.
Tel: 09-6317020/40 Fax: 09-6317030
Branch Manager: Wee Suat Hwee
East Malaysia
Sabah
Kota Kinabalu
Lot 1-0-10 Ground & 1st Floor, Lorong Api-Api 1,
Api-Api Centre, 88000 Kota Kinabalu, Sabah.
Tel: 088-231080/2 Fax: 088-238389
Branch Manager: Lim Shaw Siang
Tawau
2nd Floor, TB 323 (Lot 20), Block 38,
Fajar Complex, Jalan Haji Karim,
91000 Tawau, Sabah.
Tel: 089-765325 Fax: 089-765326
Branch Manager: Janice Chong Mui Lin
Sandakan
Room 1505-1507, 15th Floor,
Wisma Khoo Siak Chiew, Jalan Sim Sim,
90000 Sandakan, Sabah.
Postal Address :
Public Mutual Berhad
Sandakan Branch
P.O. Box No. 3488
90739 Sandakan, Sabah.
Tel: 089-222922 Fax: 089-222889
Senior Branch Manager: Jonathan Yong Lok Sang
Sarawak
Bintulu
215, 2nd Floor, Li Hwa Plaza,
Main Bazaar Road,
97000 Bintulu, Sarawak.
Tel: 086-334718 Fax: 086-330221
Miri
Lot 578, 1st & 2nd Floor,
Pelita Commercial Centre,
Jalan Pujut-Lutong,
98000 Miri, Sarawak.
Tel: 085-429066 Fax: 085-416195
Branch Manager: Allan Ngo Say Khiang
Kuching
Lot 205 & 206, Section 49,
Jalan Tunku Abdul Rahman,
93100 Kuching, Sarawak.
Tel: 082-239285/238923 Fax: 082-239825
Senior Branch Manager: Jones Chen Chung Sze
Sibu
39-41, 1st Floor, Jalan Tuanku Osman,
96000 Sibu, Sarawak.
Tel: 084-317463 Fax: 084-330269
Senior Branch Manager: Peter Teng King Ho
Public Mutual offices are open on Mondays to Fridays, except public holidays, from 9:00 a.m. to 5:00 p.m.
89
DISTRIBUTION POINTS OF THE FUNDS
Units of the funds can be bought or sold at the branches of the following distributor:
Public Bank Berhad (6463-H)
Menara Public Bank
146 Jalan Ampang
50450 Kuala Lumpur
Tel: 03-2176 6000/2176 6666
Hotline: 1800 883 323
90