Affin Hwang
Select Dividend Fund
Annual Report
30 September 2015
MANAGER
Affin Hwang Asset Management Berhad (429786-T)
TRUSTEE
CIMB Islamic Trustees Berhad (167913-M)
AFFIN HWANG SELECT DIVIDEND FUND
Annual Report and Audited Financial Statements
For the Financial Year Ended 30 September 2015
Content
Page
MANAGER’S REPORT ...............................................................................................................2
FUND PERFORMANCE DATA ...................................................................................................8
TRUSTEE’S REPORT ...............................................................................................................9
STATEMENT OF COMPREHENSIVE INCOME ....................................................................... 10
STATEMENT OF FINANCIAL POSITION ................................................................................. 11
STATEMENT OF CHANGES IN EQUITY ................................................................................. 12
STATEMENT OF CASH FLOWS .............................................................................................. 13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ........................................................ 14
NOTES TO THE FINANCIAL STATEMENTS ........................................................................... 20
STATEMENT BY THE MANAGER ........................................................................................... 46
AUDITORS’ REPORT ...............................................................................................................47
DIRECTORY OF SALES OFFICE ............................................................................................ 49
1
MANAGER’S REPORT
(1)
MANAGER’S VIEW ON PORTFOLIO AND MARKET
Fund Type, Category, Objective and Distribution Policy
Affin Hwang Select Dividend Fund (the “Fund”) is an equity fund that provides a combination of regular
income and capital growth over the medium to long term period.
The Fund will distribute income (subject to income availability), on a semi-annual basis after the end of its
first financial year.
Benchmark
The benchmark used by the Manager in measuring the performance of the Fund will be 70% of the
benchmark is derived from the FTSE Bursa Malaysia Top 100 Index, which is in line with the Fund’s
expected long-term asset allocation of 70% of the Fund’s NAV invested domestically. The remaining 30% of
the benchmark is derived from the Dow Jones/Asia Pacific Select Dividend 30 Index as the Manager expects
over the long-term to invest 30% of the Fund’s NAV in foreign equities listed within the Asia-Pacific region.
(the “Benchmark”)
(70% FTSE Bursa Malaysia Top 100 Index) + (30% Dow Jones/Asia Pacific Select Dividend 30 Index)
(Obtainable: FTSE Bursa Malaysia 100 Index at http://www.klse.com.my + Dow Jones/Asia Pacific Select
Dividend 30 Index at http://www.djindexes.com/selectdividend/)
Performance of the Fund (1 October 2014 to 30 September 2015)
For the period under review from 1 October 2014 to 30 September 2015, the Fund registered a -0.99%
return compared to the benchmark return of -10.04%. The Fund thus outperformed the Benchmark by
9.05%. The Net Asset Value (“NAV”) per unit of the Fund as at 30 September 2015 was RM0.5941
compared to its NAV per unit as at 30 September 2014 of RM0.6445. During the same period under review,
the Fund has declared a total income distribution of RM0.045 per unit by way of reinvestment in the form of
additional units.
Given the performance during the period under review, we believe the Fund’s objective is being met to
provide investors with a regular income stream and high level of liquidity to meet cash flow requirement while
maintaining capital preservation.
Table 1: Performance of the Fund
1 Year
(1/10/14 - 30/9/15)
3 Years
(1/10/12 - 30/9/15)
Since Commencement
(16/4/11 - 30/9/15)
Fund
(0.99%)
23.58%
50.00%
Benchmark
(10.04%)
1.19%
8.49%
9.05%
22.39%
41.51%
Outperformance
Source of Benchmark: Bloomberg
Table 2: Average Total Return
1 Year
(1/10/14 - 30/9/15)
3 Years
(1/10/12 - 30/9/15)
Since
Commencement
(16/4/11 - 30/9/15)
Fund
(0.99%)
7.31%
9.52%
Benchmark
(10.04%)
0.39%
1.84%
9.05%
6.92%
7.68%
Outperformance
Source of Benchmark: Bloomberg
2
Table 3: Annual Total Return
FYE 2015
(01/10/14 30/9/15)
FYE 2014
(01/10/13 30/9/14)
FYE 2013
(01/10/12 30/9/13)
FYE 2012
(01/10/11 30/9/12)
Fund
(0.99%)
11.95%
11.48%
30.97%
Benchmark
(10.04%)
1.90%
10.38%
16.48%
9.05%
10.05%
1.10%
14.49%
Outperformance
Source of Benchmark: Bloomberg
Figure 1: Movement of the Fund versus the Benchmark since commencement.
“This information is prepared by Affin Hwang Asset Management Berhad for information purposes only. Past earnings or the Fund’s
distribution record is not a guarantee or reflection of the Fund’s future earnings/future distributions. Investors are advised that Unit
prices, distributions payable and investment returns may go down as well as up. Source of Benchmark is from Bloomberg.”
Benchmark: (70% FTSE Bursa Malaysia Top 100 Index) + (30% Dow Jones/Asia Pacific Select Dividend 30 Index)
(Obtainable: FTSE Bursa Malaysia 100 Index at http://www.klse.com.my + Dow Jones/Asia Pacific Select Dividend 30 Index at
http://www.djindexes.com/selectdividend/)
Strategies Employed (1 October 2014 to 30 September 2015)
The period under review was challenging for equity markets. Global political uncertainties, a weak Ringgit,
and the low oil price environment coupled with headwinds of a slowing global growth scenario have kept
financial markets in a limbo.
The Manager has kept a relatively high cash level for the Fund towards the end of the period under review
believing that the risk/reward environment was less than attractive and as the Manager took on a more
cautious view on the markets. The Manager continues to maintain its strategy of overlaying a top down
macro overview to determine the Fund’s equity and cash exposure, after which the country exposure is
determined based on our country analysis. Once the equity exposure and country exposure is determined,
the classic bottom-up approach is employed where stocks with good management, strong cash flow
generation and promising attractive dividend yields are selected.
3
Asset Allocation
As at 30 September 2015, the asset allocation of the Fund stood at 80.41% in equities, and balance of
19.59% in cash. For a snapshot of the Fund’s equity sector allocation as at 30 September 2015, refer to
Figure 2.
Figure 2: Equity Sector Allocation
Sector Allocation
Local Investment
Consumer Goods
Consumer Services
Financial Services
Healthcare
Industrials
Oil & Gas
Properties
Telecommunications
Technology
Utilities
REITs
Basic Materials
Constructions
Industrial Products
Trading & Services
ICPS
Foreign Investment
Financials
Consumer Goods
Consumer Services
Healthcare
Industrials
Technology
Telecommunications
Utilities
REITs
Financial Services
Oil & Gas
Equity
Cash
Total
30 Sept 2015
30 Sept 2014
30 Sept 2013
9.18%
1.90%
20.88%
1.84%
1.23%
6.64%
2.82%
5.71%
0.74%
1.50%
6.22%
-
6.90%
4.54%
17.72%
4.34%
7.23%
1.09%
4.68%
1.12%
0.65%
-
12.17%
9.24%
0.49%
6.51%
3.37%
1.78%
0.80%
8.31%
5.75%
6.22%
2.78%
0.30%
3.34%
3.37%
1.52%
3.47%
0.16%
0.59
80.41%
19.59%
100.00%
6.93%
1.36%
2.93%
2.58%
3.86%
0.97%
2.89%
0.92%
0.52%
1.01%
2.36%
74.63%
25.37%
100.00%
9.92%
5.04%
3.05%
0.42%
4.99%
1.55%
1.72%
1.80%
2.49%
79.40%
20.60%
100.00%
rd
The Manager reduced slightly foreign investment exposure towards the end of the 3 quarter of the year as
the foreign markets became more volatile due to the key event in the US. The Fund’s domestic equities
exposure on the other hand, is slightly increased from previous period under review.
Review of Market (1 October 2014 to 30 September 2015)
Global financial markets remained volatile over the course of the period under review. Investors remained
concerned over the health of the global economy as deflationary risk and low commodity prices put pressure
on global growth. The European Central Bank (“ECB”) maneuvered to meet market expectations with a fullscaled quantitative easing (QE) program. Lower crude oil prices helped to lift economic activity within the
region – especially the net importers as the reduced inflationary pressure provided more room to provide
accommodative monetary policies. Monetary easing measures were seen being taken by many central
banks in a bid to address the slowing environment e.g. Australia, China, Singapore, India, and Thailand.
The domestic equity market took lead from crude oil prices and rebounded in mid-January. To the dismay of
local investors, the rebound was unsustainable, and the index continued to trade range-bound. Comments of
a possible sovereign rating downgrade by rating agency, Fitch, dragged down market sentiment.
4
Political tensions continued to heighten within Malaysia as senior political personalities started to bicker in
th
the open. The announcement of the 11 Malaysia Plan in May failed to excite the market due to limited
initiatives being announced. This highlighted the funding constrained faced by the Government.
The Federal Open Market Committee (“FOMC”) meeting in June refocused investors’ expectation that the
US Federal Reserves may be back on track to raise its interest rates in the second half of 2015. Investors
remained cautious, taking into consideration the possibility of Greece being forced out of the Eurozone. The
domestic equity market gauged by the FBM KLCI slumped 2.9% in the first half of the year, making it the
second worst-performing market in ASEAN behind Indonesia, which slid 5.2% over the same period.
The Ringgit has continued to depreciate against the USD on the back of the highly anticipated rate hike,
which generally pressures most Asian currencies lower. The severe depreciation of the local currency was
mainly attributed to the plunging oil prices, as well as the intensifying political struggle in the nation. This was
on the back of revived concerns over the reversal of fund flows caused by the impending rate hike,
weakening growth environment, plunging commodity prices coupled with a very poor corporate earnings.
Volatility heightened towards the end of the period under review after the People’s Bank of China made a
surprise move to devalue the Renminbi. The move intensified concerns surrounding the rate of China’s
economic growth. The devaluation of the RMB drove down most Asian currencies.
Investment Outlook
Equity markets are expected to remain volatile in the near term, given the challenging environment globally.
The slow pace of global growth and the increasing concerns surrounding China’s ailing economy will likely
influence the performance of the domestic, as well as the global financial market. In a low global growth
environment and where interest rates are expected to remain low, dividend stocks will be an area for
investors to seek returns. Companies that can deliver growing earnings and dividend will be sought after
especially now and likely outperform the general market. On a medium to long term basis, stocks which
deliver dividends which grow over time have been shown to outperform and these are the companies that
the Manager continues to look out for.
(2)
SOFT COMMISSIONS RECEIVED FROM BROKERS
As per the requirements of the Securities Commission’s Guidelines on Unit Trust Funds and Guidelines on
Compliance Function for Fund Management Companies., soft commissions received from brokers/dealers
may be retained by the management company only if the –
(i)
(ii)
goods and services provided are of demonstrable benefit to Unit holders of the Fund; and
goods and services are in the form of research and advisory services that assists in the decisionmaking process.
During the financial period under review, the management company had received on behalf of the Fund, soft
commissions in the form of research materials, data and quotation services, investment-related publications,
market data feed and industry benchmarking agencies which are of demonstrable benefit to Unitholders of
the Fund.
5
(3)
BREAKDOWN OF UNITHOLDERS BY SIZE AS AT 30 SEPTEMBER 2015
Size of holdings
(Units)
No. of Unitholders
No. of Units held *
(‘000)
5,000 and below
379
1,139
5,001 to 10,000
367
2,739
10,001 to 50,000
891
21,228
50,001 to 500,000
308
38,042
500,001 and above
44
272,018
Total
610
335,166
* Note : Excluding Manager’s Stock
There is neither any significant change to the state affairs of the Fund nor any circumstances that materially
affect any interests of the unit holders during the period under review.
6
INCOME DISTRIBUTION
Affin Hwang Asset Management Berhad has distributed a total of gross distribution of RM0.045 per Unit to
investors of the Affin Hwang Select Dividend Fund over the period under review.
The Net Asset Value per Unit prior and subsequent to the distribution is as follows:CumDistribution Date
Ex-Distribution
Date
Cum-distribution
(RM)
20 Jun 2012
7 Dec 2012
10 Jun 2013
9 Dec 2013
11 Jun 2014
8 Dec 2014
22 Jun 2015
21 Jun 2012
10 Dec 2012
11 Jun 2013
10 Dec 2013
12 Jun 2014
9 Dec 2014
23 Jun 2015
0.5586
0.6068
0.6580
0.6423
0.6686
0.6360
0.6437
7
Distribution per
Unit
(RM)
0.0105
0.0200
0.0100
0.0300
0.0300
0.0200
0.0250
Ex-distribution
(RM)
0.5484
0.5906
0.6427
0.6127
0.6374
0.6137
0.6213
FUND PERFORMANCE DATA
Source: CIMB Trustee
As at
30 Sept 2015
As at
30 Sept 2014
As at
30 Sept 2013
Total NAV (RM’million)
199.460
210.826
120.556
NAV per Unit (RM)
0.5941
0.6445
0.6323
Units in Circulation (million)
335.710
327.091
190.669
Highest NAV
0.6722
0.6690
0.6713
Lowest NAV
0.5733
0.6036
0.5906
-0.99
11.95
11.48
-7.82
7.41
4.50
4.50
1.67
1.38
1.93
9.83
6.00
6.00
1.63
1.44
6.18
4.99
3.00
3.00
1.63
1.33
Return of the Fund (%)
iii
i
- Capital Growth (%)
ii
- Total Income Return (%)
Gross Distribution per Unit (sen)
Net Distribution per Unit (sen)
1
Management Expense Ratio (%)
2
Portfolio Turnover Ratio (times)
Basis of calculation and assumption made in calculating the returns:The performance figures are a comparison of the growth/decline in NAV for the stipulated period taking into
account all the distribution payable (if any) during the stipulated period.
An illustration of the above would be as follow:Capital return
Income return
Total return
= NAV per Unit end / NAV per Unit begin – 1
= Income distribution per Unit / NAV per Unit ex-date
= (1+Capital return) x (1+Income return) - 1
i
Capital Growth
= {NAV per Unit @ 30/09/15 ÷ NAV per Unit @ 30/09/14* - 1} x 100
= {0.5941 ÷ 0.6445 – 1} x 100
= -7.82%
Income Return @ ex-date
= {Income distribution per Unit ÷ NAV per Unit on ex-date} + 1
= {0.020 ÷ 0.6137 @ 09/12/14} + 1 = 1.03258
= {0.025 ÷ 0.6213 @ 23/06/15} + 1 = 1.04023
ii
Total Income
Return
= {Income Return @ex-date x Income Return @ex-date}-1x100
= {(1.03258 x 1.04023) -1} x 100
= 7.41%
iii
= [{(1 + Capital Growth) x (1 + Total Income Return)} – 1] x 100
= [{(1+ (7.82%)) x (1+ 7.41%)} – 1] x 100
= -0.99%
Return of the
Fund
* Source – CIMB Trustee
Past performance is not necessarily indicative of future performance and that Unit prices and
investment returns may go down, as well as up.
1
The MER was consistent over the period under review compared to the previous periods
The PTR reduced slightly over the period under review after the Manager reduced its transactions given the volatile market conditions.
2
8
TRUSTEE’S REPORT TO THE UNITHOLDERS OF
AFFIN HWANG SELECT DIVIDEND FUND
We, CIMB Islamic Trustee Berhad (the “Trustee”), being the Trustee of Affin Hwang Select Dividend Fund
(the “Fund”), are of the opinion that Affin Hwang Asset Management Berhad (“the Manager”), acting in the
capacity of Manager of the Fund, has fulfilled its duties in the following manner for the financial year ended
30 September 2015.
In our opinion:
a)
The Fund has been managed in accordance with the limitations imposed on the investment powers
of the Manager and the Trustee under the Deeds, other provisions of the Deeds, the Securities
Commission Malaysia’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act, 2007
(as amended from time to time) and other applicable laws during the financial year ended 30
September 2015;
b)
Valuation/pricing of units of the Fund has been carried out in accordance with the Deed and relevant
regulatory requirements;
c)
The creation and cancellation of units have been carried out in accordance with the Deed and the
relevant regulatory requirements; and
d)
The distributions for the financial year are relevant and reflected the objective of the Fund.
For and on behalf of
CIMB Islamic Trustee Berhad (167913-M)
LEE KOOI YOKE
Chief Operating Officer
Kuala Lumpur, Malaysia
20 November 2015
9
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015
Note
2015
RM
2014
RM
INVESTMENT INCOME
Dividend income
Interest income from short term deposits
Net gain/(loss) on foreign currency exchange
Net (loss)/gain on financial assets at fair
value through profit or loss
4,317,351
1,382,288
3,032,179
2,764,736
404,168
(247,178)
8
(3,505,871)
16,643,591
───────── ─────────
5,225,947
19,565,317
───────── ─────────
4
5
(3,338,553)
(2,194,338)
(178,056)
(117,031)
(7,500)
(7,500)
(3,500)
(3,550)
(2,016,318)
(1,458,814)
(196,162)
(64,165)
───────── ─────────
(5,740,089)
(3,845,398)
───────── ─────────
EXPENSES
Management fee
Trustee fee
Auditors’ remuneration
Tax agent’s fee
Transaction costs
Other expenses
(514,142)
NET (LOSS)/PROFIT BEFORE TAXATION
6
TAXATION
NET (LOSS)/PROFIT AFTER TAXATION AND TOTAL
COMPREHENSIVE (LOSS)/INCOME FOR THE
FINANCIAL YEAR
15,719,919
(144,705)
(144,609)
───────── ─────────
(658,847)
15,575,310
═════════ ═════════
Net (loss)/profit after taxation is made up of the following:
Realised amount
Unrealised amount
16,432,683
6,814,809
(17,091,530)
8,760,501
───────── ─────────
(658,847)
15,575,310
═════════ ═════════
The accompanying summary of significant accounting policies and notes to the financial statements form an
integral part of these financial statements.
10
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2015
Note
2015
RM
2014
RM
8
9
160,381,848
35,347,638
102,336
157,301,380
52,259,942
89,337
ASSETS
Financial assets at fair value through
profit or loss
Cash and cash equivalents
Dividend receivable
Amount due from Manager
- creation of units
Amount due from brokers
84,121
2,126,798
6,780,463
671,667
───────── ─────────
202,696,406
212,449,124
───────── ─────────
TOTAL ASSETS
LIABILITIES
Amount due to Manager
- management fee
- cancellation of units
Amount due to Trustee
Amount due to brokers
Auditors’ remuneration
Tax agent’s fee
Other payables and accruals
246,737
249,713
607,206
118,551
13,159
13,318
2,333,053
1,180,776
7,500
7,500
6,450
6,450
22,594
6,160
───────── ─────────
3,236,699
1,582,468
───────── ─────────
TOTAL LIABILITIES
199,459,707
210,866,656
═════════ ═════════
NET ASSET VALUE OF THE FUND
EQUITY
Unitholders’ capital
Retained earnings
188,481,897
183,729,409
10,977,810
27,137,247
───────── ─────────
199,459,707
210,866,656
═════════ ═════════
NET ASSETS ATTRIBUTABLE TO UNITHOLDERS
10
NUMBER OF UNITS IN CIRCULATION
335,710,000
327,091,000
═════════ ═════════
0.5941
0.6447
═════════ ═════════
NET ASSET VALUE PER UNIT (RM)
The accompanying summary of significant accounting policies and notes to the financial statements form an
integral part of these financial statements.
11
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015
Balance as at 1 October 2014
Unitholders’
capital
RM
Retained
earnings
RM
Total
RM
183,729,409
27,137,247
210,866,656
Total comprehensive loss for
the financial year
-
(658,847)
(658,847)
Distributions (Note 7)
-
(15,500,590)
(15,500,590)
Movement in unitholders’ capital:
Creation of units arising from applications
58,095,542
-
58,095,542
Creation of units arising from distribution
15,333,594
-
15,333,594
Cancellation of units
Balance as at 30 September 2015
Balance as at 1 October 2013
(68,676,648)
(68,676,648)
───────── ───────── ─────────
188,481,897
10,977,810
199,459,707
═════════ ═════════ ═════════
96,508,826
24,046,977
120,555,803
Total comprehensive income for
the financial year
-
15,575,310
15,575,310
Distributions (Note 7)
-
(12,485,040)
(12,485,040)
Movement in unitholders’ capital:
Creation of units arising from applications
99,724,946
-
99,724,946
Creation of units arising from distribution
12,340,879
-
12,340,879
Cancellation of units
Balance as at 30 September 2014
(24,845,242)
(24,845,242)
───────── ───────── ─────────
183,729,409
27,137,247
210,866,656
═════════ ═════════ ═════════
The accompanying summary of significant accounting policies and notes to the financial statements form an
integral part of these financial statements.
12
STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015
Note
2015
RM
2014
RM
CASH FLOWS FROM OPERATING ACTIVITIES
Proceeds from sale of investments
Purchase of investments
Capital repayment
Dividends received
Interest received
Management fee paid
Trustee fee paid
Payment for other fees and expenses
Net realised foreign currency exchange gain/(loss)
Tax refund
297,758,202
192,905,380
(317,629,542) (237,920,937)
680,185
47,769
4,159,647
2,825,718
1,382,288
404,168
(3,341,529)
(2,091,447)
(178,215)
(111,543)
(190,728)
(77,076)
8,387,784
(1,434,417)
106,986
───────── ─────────
(8,971,908)
(45,345,399)
───────── ─────────
Net cash used in operating activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from creation of units
Payments for cancellation of units
Payment for distributions
60,138,219
97,598,148
(68,187,993)
(25,077,379)
(166,996)
(144,161)
───────── ─────────
(8,216,770)
72,376,608
───────── ─────────
Net cash (used in)/generated from financing activities
NET (DECREASE)/INCREASE IN
CASH AND CASH EQUIVALENTS
(17,188,678)
276,374
EFFECTS OF FOREIGN CURRENCY EXCHANGE
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE FINANCIAL YEAR
27,031,209
12,357
52,259,942
25,216,376
───────── ─────────
CASH AND CASH EQUIVALENTS AT THE
END OF THE FINANCIAL YEAR
9
35,347,638
52,259,942
═════════ ═════════
The accompanying summary of significant accounting policies and notes to the financial statements form an
integral part of these financial statements.
13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015
The following accounting policies have been used in dealing with items which are considered material in
relation to the financial statements.
A
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost convention in accordance with the
provisions of the Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting
Standards (“IFRS”), as modified by financial assets at fair value through profit or loss.
The preparation of financial statements in conformity with MFRS requires the use of certain critical
accounting estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenue and expenses during the reported financial year. It also requires the Manager to
exercise their judgment in the process of applying the Fund’s accounting policies. Although these estimates
and judgment are based on the Manager’s best knowledge of current events and actions, actual results may
differ.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed in Note N.
(a)
The new standards and amendments to published standards that are applicable to the Fund but not
yet effective and have not been early adopted are as follows:
(i)
Financial year beginning on/after 1 October 2018
•
MFRS 15 ‘Revenue from Contracts with Customers’ (effective from 1 January 2018)
deals with revenue recognition and establishes principles for reporting useful
information to users of financial statements about the nature, amount, timing and
uncertainty of revenue and cash flows arising from an entity’s contracts with
customers. Revenue is recognised when a customer obtains control of a good or
service and thus has the ability to direct the use and obtain the benefits from the good
or service. The standard replaces MFRS 118 ‘Revenue’ and MFRS 111 ‘Construction
Contracts’ and related interpretations.
This standard is not expected to have a significant impact on the Fund’s financial
statements.
(ii)
Financial year beginning on/after 1 October 2018
•
MFRS 9 "Financial Instruments" (effective from 1 January 2018) will replace MFRS
139 "Financial Instruments: Recognition and Measurement". The complete version of
MFRS 9 was issued in November 2014.
MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and
establishes three primary measurement categories for financial assets: amortised
cost, fair value through profit or loss and fair value through other comprehensive
income (“OCI”). The basis of classification depends on the entity's business model and
the contractual cash flow characteristics of the financial asset. Investments in equity
instruments are always measured at fair value through profit or loss with an
irrevocable option at inception to present changes in fair value in OCI (provided the
instrument is not held for trading).
14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
A
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED)
(a)
The new standards and amendments to published standards that are applicable to the Fund but not
yet effective and have not been early adopted are as follows: (continued)
(ii)
Financial year beginning on/after 1 October 2018 (continued)
A debt instrument is measured at amortised cost only if the entity is holding it to collect
contractual cash flows and the cash flows represent principal and interest.
For liabilities, the standard retains most of the MFRS 139 requirements. These include
amortised cost accounting for most financial liabilities, with bifurcation of embedded
derivatives. The main change is that, in cases where the fair value option is taken for
financial liabilities, the part of a fair value change due to an entity’s own credit risk is
recorded in other comprehensive income rather than the income statement, unless
this creates an accounting mismatch.
There is now a new expected credit losses model on impairment for all financial
assets that replaces the incurred loss impairment model used in MFRS 139. The
expected credit losses model is forward-looking and eliminates the need for a trigger
event to have occurred before credit losses are recognised.
This standard is not expected to have a significant impact on the Fund’s financial
statements.
B
INCOME RECOGNITION
Interest income from short term deposits with licensed financial institutions is recognised based on effective
interest rate method on an accrual basis.
Dividend income is recognised on the ex-dividend date, when the right to receive the dividend has been
established.
For quoted investments, realised gains and losses on sale of investments are accounted for as the difference
between the net disposal proceeds and the carrying amount of investments, determined on a weighted
average cost basis.
C
DIVIDEND DISTRIBUTION
A distribution to the Fund’s unitholders is accounted for as a deduction from realised reserve. A proposed
distribution is recognised as a liability in the period in which it is approved by the Trustee of the Fund.
D
TRANSACTION COSTS
Transaction costs are costs incurred to acquire financial assets or liabilities at fair value through profit or loss.
They include the bid-ask spread, fees and commissions paid to agents, advisors, brokers. Transaction costs,
when incurred, are immediately recognised in the statement of comprehensive income as expenses.
15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
E
TAXATION
Current tax expense is determined according to the Malaysian tax laws at the current rate based upon the
taxable profits earned during the financial year.
Tax on investment income from foreign investments is based on the tax regime of the respective countries
that the Fund invests in.
F
FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the financial statements of the Fund are measured using the currency of the primary
economic environment in which the Fund operates (the “functional currency”). The financial statements are
presented in Ringgit Malaysia, which is the Fund’s functional and presentation currency.
G
FOREIGN CURRENCY TRANSLATION
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and
losses resulting from the settlement of such transactions and from the translation at period-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognised in statement of
comprehensive income, except when deferred in other comprehensive income as qualifying cash flow
hedges.
H
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
(i)
Classification
The Fund designates its investment in quoted securities as financial assets at fair value through
profit or loss at inception.
Financial assets are designated at fair value through profit or loss when they are managed and their
performance evaluated on a fair value basis.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and have been included in current assets. The Fund’s loans and
receivables comprise cash and cash equivalents, dividend receivable, amount due from Manager
and amount due from brokers.
Financial liabilities are classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability.
The Fund classifies amount due to Manager, amount due to Trustee, amount due to brokers,
auditors’ remuneration, tax agent’s fee and other payables and accruals as other financial liabilities.
Regular purchases and sales of financial assets are recognised on the trade-date – the date on
which the Fund commits to purchase or sell the asset. Investments are initially recognised at fair
value. Transaction costs are expensed in the statement of comprehensive income.
16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
H
FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONTINUED)
(ii)
Recognition and measurement
Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial
position when, and only when, the Fund becomes a party to the contractual provisions of the
financial instrument.
Financial assets are derecognised when the rights to receive cash flows from the investments have
expired or have been transferred and the Fund has transferred substantially all risks and rewards of
ownership.
Financial liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the
contract is discharged or cancelled or expired.
Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through
profit or loss’ category including the effects of currency transactions are presented in the statement
of comprehensive income within ‘net gain/(loss) on financial assets at fair value through profit or loss
’ in the period which they arise.
Dividend income from financial assets at fair value through profit or loss is recognised in the
statement of comprehensive income as part of gross dividend income when the Fund’s right to
receive payments is established.
If a valuation based on the market price does not represent the fair value of the securities, for
example during abnormal market conditions or when no market price is available, including in the
event of a suspension in the quotation of the securities for a period exceeding 14 days, or such
shorter period as agreed by the Trustee, then the securities are valued as determined in good faith
by the Manager, based on the methods or basis approved by the Trustee after appropriate technical
consultation.
Deposits with a licensed financial institution are stated at cost plus accrued interest calculated on the
effective interest method over the period from the date of placement to the date of maturity of the
deposit.
Loans and receivables and other financial liabilities are subsequently carried at amortised cost using
the effective interest method.
For assets carried at amortised cost, the Fund assesses at the end of the reporting period whether
there is objective evidence that a financial asset or group of financial assets is impaired. A financial
asset or a group of financial assets is impaired and impairment losses are incurred only if there is
objective evidence of impairment as a result of one or more events that occurred after the initial
recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or group of financial assets that can be reliably
estimated.
The amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been
incurred) discounted at the financial asset’s original effective interest rate. The asset’s carrying
amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If ‘loans and
receivables’ or a ‘held-to-maturity investment’ has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective interest rate determined under the contract.
17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
H
FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONTINUED)
(ii)
Recognition and measurement (continued)
As a practical expedient, the Fund may measure impairment on the basis of an instrument’s fair
value using an observable market price.
If, in a subsequent financial year, the amount of the impairment loss decreases and the decrease
can be related objectively to an event occurring after the impairment was recognised (such as an
improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss
is recognised in statement of comprehensive income.
When an asset is uncollectible, it is written off against the related allowance account. Such assets
are written off after all the necessary procedures have been completed and the amount of the loss
has been determined.
I
CASH AND CASH EQUIVALENTS
For the purpose of statement of cash flows, cash and cash equivalents comprise cash and bank balances
and deposits held in highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of change in value.
J
AMOUNT DUE FROM/(TO) BROKERS
Amounts due from and to brokers represent receivables for securities sold and payables for securities
purchased that have been contracted for but not yet settled or delivered on the statement of financial position
date respectively.
These amounts are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment for amounts due from brokers. A provision for
impairment of amounts due from brokers is established when there is objective evidence that the Fund will
not be able to collect all amounts due from the relevant broker.
Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial
reorganisation, and default in payments are considered indicators that the amount due from brokers is
impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an
impairment loss, interest income is recognised using the rate of interest used to discount the future cash
flows for the purpose of measuring the impairment loss.
The effective interest method is a method of calculating the amortised cost of a financial asset or financial
liability and of allocating the interest income or loans expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected
life of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount of the
financial asset or financial liability. When calculating the effective interest rate, the Fund estimates cash flows
considering all contractual terms of the financial instrument but does not consider future credit losses. The
calculation includes all fees and points paid or received between parties to the contract that are an integral
part of the effective interest rate, transaction costs and all other premiums or discounts.
18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
K
CREATION AND CANCELLATION OF UNITS
The Fund issues cancellable units, which are cancelled at the unitholder’s option and are classified as equity.
Cancellable units can be put back to the Fund at any time for cash equal to a proportionate share of the
Fund’s Net Asset Value or “NAV”. The outstanding units are carried at the redemption amount that is payable
as at the date of the statement of financial position if the unitholder exercises the right to put the unit back to
the Fund.
Units are created and cancelled at the unitholder’s option at prices based on the Fund’s NAV per unit at the
time of creation or cancellation. The Fund’s NAV per unit is calculated by dividing the net assets attributable
to unitholders with the total number of outstanding units.
L
UNITHOLDERS’ CAPITAL
The unitholders’ capital to the Fund meets the definition of puttable instruments classified as equity
instruments under MFRS 132 “Financial Instruments: Presentation”.
The units in the Fund are puttable instruments which entitle the unitholders to a pro-rata share of the net
asset of the Fund. The units are subordinated and have identical features. There is no contractual obligation
to deliver cash or another financial asset other than the obligation on the Fund to repurchase the units. The
total expected cash flows from the units in the Fund over the life of the units are based on the change in the
net asset of the Fund.
M
SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting used by the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the strategic asset allocation
committee of the Manager that makes strategic decisions.
N
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING ACCOUNTING POLICIES
The preparation of financial statements in conformity with the Malaysian Financial Reporting Standards
requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities as at
the date of the financial statements and the reported amounts of revenues and expenses during the financial
year. Although these estimates are based on the Manager’s best knowledge of current events and actions,
actual results could differ from those estimates.
The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, rarely equal the related actual results. To enhance the information contents on the estimates,
certain key variables that are anticipated to have material impacts to the Fund’s results and financial position
are tested for sensitivity to changes in the underlying parameters.
Estimates and judgments are continually evaluated by the Manager and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
19
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015
1
INFORMATION ON THE FUND
The Unit Trust Fund was constituted under the name HwangDBS Select Dividend Fund (the “Fund”)
pursuant to the execution of a Deed dated 24 February 2011. The Fund has changed its name from
HwangDBS Select Dividend Fund to Hwang Select Dividend Fund as amended by the First Supplemental
Deed dated 18 January 2012 and from Hwang Select Dividend Fund to Affin Hwang Select Dividend Fund as
amended by the Second Supplemental Deed dated 27 June 2014 (the “Deeds”) entered into between Affin
Hwang Asset Management Berhad (the “Manager”), CIMB Islamic Trustee Berhad, (the “Trustee”) and the
registered unitholders of the Fund.
The Fund commenced operations on 28 March 2011 and will continue its operations until terminated by the
Trustee as provided under Clause 12.1 of the Deed.
The Fund may invest in any of the following investments:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Securities listed on Bursa Malaysia and throughout the Asia-Pacific region where the regulatory
authorities are members of the International Organization of Securities Commission (IOSCO);
Fixed deposit and money market deposits with commercial banks and investment banks;
Others money market instruments such as negotiable certificates of deposits and bankers’
acceptance;
Government bonds, treasury bills and other government approved or guaranteed bonds;
Debentures, including private debt securities and bonds;
Warrants;
Derivatives for hedging purposes; and
Any other form of investments permitted by the Securities Commission (“SC”) which is in line with
the objective of the Fund.
All investments will be subjected to the SC’s Guidelines on Unit Trust Funds, the Deed and the objective of
the Fund.
The main objective of the Fund is to provide a combination of regular income and capital growth over the
medium to long term period.
The Manager is a company incorporated in Malaysia. The principal activities of the Manager are
establishment and management of unit trust funds and private retirement schemes as well as providing fund
management services to private clients.
The financial statements were authorised for issue by the Manager on 20 November 2015.
20
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Financial instruments are as follows:
Note
2015
Quoted equities
Cash and cash equivalents
Dividend receivable
Amount due from Manager
Amount due from brokers
Loans and
receivables
RM
Financial
assets at fair
value through
profit or loss
RM
Total
RM
8
9
160,381,848
160,381,848
35,347,638
35,347,638
102,336
102,336
84,121
84,121
6,780,463
6,780,463
───────── ───────── ─────────
42,314,558
160,381,848
202,696,406
═════════ ═════════ ═════════
8
9
157,301,380
157,301,380
52,259,942
52,259,942
89,337
89,337
2,126,798
2,126,798
671,667
671,667
───────── ───────── ─────────
55,147,744
157,301,380
212,449,124
═════════ ═════════ ═════════
Total
2014
Quoted equities
Cash and cash equivalents
Dividend receivable
Amount due from Manager
Amount due from brokers
Total
All current liabilities are financial liabilities which are carried at amortised cost.
The Fund is exposed to a variety of risks which include market risk (including price risk, interest rate risk, and
currency risk), credit risk, liquidity risk and capital risk.
Financial risk management is carried out through internal control processes adopted by the Manager and
adherence to the investment restrictions as stipulated by the SC’s Guidelines on Unit Trust Funds.
Market risk
(a)
Price risk
Price risk arises mainly from the uncertainty about future prices of investments. It represents the
potential loss the Fund might suffer through holding market positions in the face of price movements.
The Manager manages the risk of unfavourable changes in prices by continuous monitoring of the
performance and risk profile of the investment portfolio.
21
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Market risk (continued)
(a)
Price risk (continued)
The Fund’s overall exposure to price risk was as follows:
2015
RM
Quoted investments
Quoted equities designated at fair value through
profit or loss
2014
RM
160,381,848
157,301,380
═════════ ═════════
The following table summarises the sensitivity of the Fund’s profit after taxation and net asset value
to price risk movements. The analysis is based on the assumptions that the market price increased
by 5% and decreased by 5% with all other variables held constant. This represents management’s
best estimate of a reasonable possible shift in the quoted securities, having regard to the historical
volatility of the prices.
% Change in price
Market value
RM
Impact on
profit after
tax/NAV
RM
152,362,756
160,381,848
168,400,940
═════════
(8,019,092)
8,019,092
═════════
149,436,311
157,301,380
165,166,449
═════════
(7,865,069)
7,865,069
═════════
2015
-5%
0%
+5%
2014
-5%
0%
+5%
(b)
Interest rate risk
Interest rate risk arises from the effects of fluctuations in the prevailing levels of market interest rates
on the fair value of financial assets and liabilities and future cash flows.
The Fund’s exposure to the interest rate risk is mainly confined to short term deposit placement with
a financial institution. The Manager overcomes this exposure by way of maintaining deposits on a
short term basis.
The Fund’s exposure to interest rate risk associated with deposit with a licensed financial institution
is not material as the deposit is held on a short term basis.
22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Market risk (continued)
(c)
Currency risk
Currency risk is associated with investments denominated in foreign currencies. When the foreign
currencies fluctuate in an unfavourable movement against Ringgit Malaysia, the investments will
face currency losses in addition to the capital gain/loss. The Manager will evaluate the likely
directions of a foreign currency versus Ringgit Malaysia based on considerations of economic
fundamentals such as interest rate differentials, balance of payments position, debt levels, and
technical chart considerations.
The following table sets out the foreign currency risk concentrations and counterparties of the Fund.
Quoted
equities
RM
Cash
and cash
equivalents
RM
Other
assets*
RM
Australian Dollar
Hong Kong Dollar
24,978,197
Indonesian Rupiah
2,026,284
Korean Won
1,204,058
Philippines Peso
2,392,366
Singapore Dollar
8,267,735
Thailand Baht
4,504,017
United States Dollar
─────────
43,372,657
═════════
2
1,226,670
157,291
2,998,511
────────
4,382,474
════════
963,824
13,687
609,584
────────
1,587,095
════════
2
- 27,168,691
2,026,284
1,217,745
3,001,950
(336,716)
8,088,310
4,504,017
2,998,511
──────── ─────────
(336,716) 49,005,510
════════ ═════════
2
1,193,575
560,641
3,390,525
────────
5,144,743
════════
326,331
345,336
33,355
────────
705,022
════════
2
(1,180,776) 16,730,193
8,426,924
5,659,451
9,803,079
7,268,772
8,902,315
3,390,525
──────── ─────────
(1,180,776) 60,181,261
════════ ═════════
2015
Other
payables**
RM
Total
RM
2014
Australian Dollar
Hong Kong Dollar
16,391,063
Indonesian Rupiah
8,081,588
Korean Won
5,659,451
Philippines Peso
9,769,724
Singapore Dollar
6,708,131
Thailand Baht
8,902,315
United States Dollar
─────────
55,512,272
═════════
* Other assets consist of dividend receivable and amount due from brokers.
** Other payables consist of amount due to brokers.
23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Market risk (continued)
(c)
Currency risk (continued)
The table below summarises the sensitivity of the Fund's profit after tax and net asset value to
changes in foreign exchange movements. The analysis is based on the assumption that the foreign
exchange rate changes by 5%, with all other variables held constant. This represents management's
best estimate of a reasonable possible shift in the foreign exchange rate, having regard to historical
volatility of this rate. Any increase/decrease in foreign exchange rate will result in a corresponding
decrease/increase in the net assets attributable to unitholders by approximately 5%. Disclosures
below are shown in absolute terms, changes and impacts could be positive or negative.
Change
in price
%
Impact on
profit after
tax/NAV
RM
2015
Australian Dollar
Hong Kong Dollar
Indonesian Rupiah
Korean Won
Philippines Peso
Singapore Dollar
Thailand Baht
United States Dollar
5
5
5
5
5
5
5
5
1,358,435
101,314
60,887
150,097
404,416
225,201
149,926
─────────
2,450,276
═════════
5
5
5
5
5
5
5
5
836,510
421,346
282,973
490,154
363,439
445,116
169,526
─────────
3,009,064
═════════
2014
Australian Dollar
Hong Kong Dollar
Indonesian Rupiah
Korean Won
Philippines Peso
Singapore Dollar
Thailand Baht
United States Dollar
24
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Credit risk
Credit risk refers to the ability of an issuer or counterparty to make timely payments of interest, principals and
proceeds from realisation of investment. The Manager manages the credit risk by undertaking credit
evaluation to minimise such risk.
The settlement terms of amount due from are governed by the relevant rules and regulations as prescribed
by the respective stock exchanges.
Credit risk arising from placements on deposits in licensed financial institutions is managed by ensuring that
the Fund will only place deposits in reputable licensed financial institutions.
The settlement terms of the proceeds from the creation of units receivable from the Manager are governed by
the Securities Commission's Guidelines on Unit Trust Funds.
The following table sets out the credit risk concentrations and counterparties of the Fund:
2015
AAA
AA3
Others
Cash
and cash
equivalents
RM
Other
assets*
RM
Total
RM
9,572,645
25,774,993
─────────
35,347,638
═════════
6,966,920
─────────
6,966,920
═════════
9,572,645
25,774,993
6,966,920
─────────
42,314,558
═════════
21,075,871
31,184,071
─────────
52,259,942
═════════
2,887,802
─────────
2,887,802
═════════
21,075,871
31,184,071
2,887,802
─────────
55,147,744
═════════
2015
AAA
AA3
Others
* Other assets consist of dividend receivables, amount due from Manager and amount due from
The financial assets of the Fund are neither past due nor impaired.
25
brokers.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
2
FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
Liquidity risk
Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial obligations. The Manager
manages this risk by maintaining sufficient level of liquid assets to meet anticipated payment and
cancellations of unit by unitholders, liquid assets comprise cash, deposits with licensed financial institutions
and other instruments, which are capable of being converted into cash within 7 days.
The table below analyses the Fund's financial liabilities into relevant maturity groupings based on the
remaining period at the statement of financial position date to the contractual maturity date.
The amounts in the table below are the contractual undiscounted cash flows.
Within
one month
RM
2015
Amount due to Manager
- management fee
- cancellation of units
Amount due to Trustee
Amount due to brokers
Auditors’ remuneration
Tax agent’s fee
Other payables and accruals
2014
Amount due to Manager
- management fee
- cancellation of units
Amount due to Trustee
Amount due to brokers
Auditors’ remuneration
Tax agent’s fee
Other payables and accruals
Between
one month
to one year
RM
Total
RM
246,737
246,737
607,206
607,206
13,159
13,159
2,333,053
2,333,053
7,500
7,500
6,450
6,450
15,594
7,000
22,594
───────── ───────── ─────────
3,215,749
20,950
3,236,699
════════ ════════ ════════
249,713
249,713
118,551
118,551
13,318
13,318
1,180,776
1,180,776
7,500
7,500
6,450
6,450
6,160
6,160
───────── ───────── ─────────
1,562,358
20,110
1,582,468
════════ ════════ ════════
Capital risk
The capital of the Fund is represented by equity consisting of unitholders’ capital and retained earnings. The
amount of equity can change significantly on a daily basis as the Fund is subject to daily subscriptions and
redemptions at the discretion of unitholders. The Fund’s objective when managing capital is to safeguard the
Fund’s ability to continue as a going concern in order to provide returns for unitholders and benefits for other
stakeholders and to maintain a strong capital base to support the development of the investment activities of
the Fund.
26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
3
FAIR VALUE ESTIMATION
Financial instruments comprise financial assets and financial liabilities. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date.
The fair value of financial assets traded in active markets (such as trading securities) is based on quoted
market prices at the close of trading on the period end date.
An active market is a market in which transactions for the asset take place with sufficient frequency and
volume to provide pricing information on an ongoing basis.
The fair value of financial assets that are not traded in an active market is determined by using valuation
techniques.
(i)
Fair value hierarchy
The table below analyses financial instruments carried at fair value. The different levels have been
defined as follows:
• Quoted prices (unadjusted) in active market for identical assets or liabilities (Level 1)
• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2)
• Inputs for the asset and liability that are not based on observable market data (that is, unobservable
inputs) (Level 3)
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety
is determined on the basis of the lowest level input that is significant to the fair value measurement in its
entirety. For this purpose, the significance of an input is assessed against the fair value measurement in
its entirety. If a fair value measurement uses observable inputs that require significant adjustment
based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the
significance of a particular input to the fair value measurement in its entirety requires judgment,
considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgment by the Fund. The Fund
considers observable data to be that market data that is readily available, regularly distributed or
updated, reliable and verifiable, not proprietary and provided by independent sources that are actively
involved in the relevant market.
The following table analyses within the fair value hierarchy the Fund’s financial assets (by class)
measured at fair value:
2015
Financial assets at fair value
through profit or loss
- quoted equities
Level 1
RM
Level 2
RM
Level 3
RM
Total
RM
160,381,848
- 160,381,848
═════════ ════════ ════════ ════════
27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
3
FAIR VALUE ESTIMATION (CONTINUED)
(i)
Fair value hierarchy (continued)
The following table analyses within the fair value hierarchy the Fund’s financial assets (by class)
measured at fair value (continued):
2014
Financial assets at fair value
through profit or loss
- quoted equities
Level 1
RM
Level 2
RM
Level 3
RM
Total
RM
157,301,380
- 157,301,380
═════════ ════════ ════════ ════════
Investments whose values are based on quoted market prices in active markets, and are therefore
classified within Level 1, include active listed equities. The Fund does not adjust the quoted prices for
these instruments.
(ii)
4
The carrying value of cash and cash equivalents, dividend receivable, amount due from Manager,
amount due from brokers and all current liabilities are a reasonable approximation of the fair values due
to their short term nature.
MANAGEMENT FEE
In accordance with the Deed, the Manager is entitled to a management fee at a rate not exceeding 3.00%
per annum on the NAV of the Fund calculated on a daily basis.
For the financial year ended 30 September 2015, the management fee is recognised at a rate of 1.50%
(2014: 1.50%) per annum on the NAV of the Fund calculated on a daily basis.
There will be no further liability to the Manager in respect of management fee other than the amount
recognised above.
5
TRUSTEE FEE
In accordance with the Deed, the Trustee is entitled to an annual fee at a rate not exceeding 0.10% per
annum on the NAV of the Fund, exclusive of foreign custodian fees, subject to a minimum fee of RM18,000
per annum.
For the financial year ended 30 September 2015, the Trustee fee is recognised at a rate of 0.08% (2014:
0.08%) per annum on the NAV of the Fund calculated on a daily basis, subject to a minimum fee of
RM18,000 per annum, exclusive of foreign custodian fees.
There will be no further liability to the Trustee in respect of Trustee fee other than the amount recognised
above.
28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
6
TAXATION
Current taxation
– local
– foreign
Under provision in prior financial year
2015
RM
2014
RM
10,118
134,587
─────────
144,705
═════════
13,919
68,582
62,108
─────────
144,609
═════════
The numerical reconciliation between net (loss)/profit before taxation multiplied by the Malaysian statutory
tax rate and tax expense of the Fund is as follows:
2015
RM
Net (loss)/profit before taxation
Tax at Malaysian statutory rate of 25% (2014: 25%)
Tax effects of:
Investment income not subject to tax
Expenses not deductible for tax purposes
Restriction on tax deductible expenses for Unit Trust Funds
Income subject to different tax rate
Foreign income subject to foreign tax rate
Under provision in prior financial year
Tax expense
29
2014
RM
(514,142)
─────────
15,719,919
─────────
(128,536)
3,929,980
(1,306,487)
597,010
838,013
10,118
134,587
─────────
144,705
═════════
(4,891,329)
409,389
551,960
13,919
68,582
62,108
─────────
144,609
═════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
7
DISTRIBUTIONS
Distribution to unitholders are from the following sources:
Dividend income
Interest income
Net realised gain on sale of investment
Previous year’s realised income
6,807,817
14,272,985
─────────
21,080,802
(5,580,212)
─────────
15,500,590
═════════
Gross realised income
Less: Expenses
Net distribution amount
2014
RM
2015
RM
77,637
16,902,017
─────────
16,979,654
(4,494,614)
─────────
12,485,040
═════════
During the financial year 30 September 2015, distributions (sen) were made as follows:
2015
RM
09.12.2014
23.06.2015
0.020
0.025
─────────
0.045
═════════
Gross/net (sen) distribution per unit
During the financial year 30 September 2014, distributions (sen) were made as follows:
2014
RM
10.12.2013
12.06.2014
0.030
0.030
─────────
0.060
═════════
Gross/net (sen) distribution per unit
Gross distribution per unit is derived from gross realised income less expenses divided by the number of
units in circulation, while net distribution per unit is derived from gross realised income less expenses and
taxation divided by the number of units in circulation.
Included in distributions for the financial year is an amount of RM14,272,985 (2014: RM16,902,017) made
from previous year’s realised income.
30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
2015
RM
Designated at fair value through profit or loss
at inception
- quoted equities – local
- quoted equities – foreign
117,009,191 101,789,108
43,372,657 55,512,272
───────── ─────────
160,381,848 157,301,380
═════════ ═════════
Net (loss)/gain on financial assets at fair value through
profit or loss
- realised gain on sale of investments
- unrealised (loss)/gain
(a)
2014
RM
13,862,033
7,895,448
(17,367,904)
8,748,143
───────── ────────
(3,505,871) 16,643,591
═════════ ════════
Quoted equities – local
(i)
Quoted equities – local as at 30 September 2015 are as follows:
Aggregate
cost
RM
Quantity
CONSUMER GOODS
Carlsberg Brewery Malaysia Bhd
Guinness Anchor Bhd
QL Resources Bhd
Sarawak Oil Palms Bhd
Spritzer Bhd
CONSUMER SERVICES
Berjaya Auto Bhd
FINANCIAL SERVICES
Allianz Malaysia Bhd
Bursa Malaysia Bhd
Hong Leong Financial Group Bhd
Malayan Banking Bhd
Public Bank Bhd
Tune Protect Group Bhd
Fair
value
RM
Percentage
of NAV
%
344,800
4,067,965
4,123,808
2.07
110,700
1,439,159
1,496,664
0.75
1,236,900
4,215,566
4,947,600
2.48
637,000
3,705,424
3,019,380
1.51
2,573,000
5,453,298
4,734,320
2.37
───────── ───────── ───────── ─────────
4,902,400
18,881,412
18,321,772
9.18
───────── ───────── ───────── ─────────
1,962,300
3,434,062
3,787,239
1.90
───────── ───────── ───────── ─────────
863,500
4,680,074
8,980,400
4.50
663,600
5,722,805
5,328,708
2.67
597,100
9,175,691
8,311,632
4.17
914,507
8,340,973
7,819,035
3.92
494,700
9,377,409
8,657,250
4.34
1,973,300
3,874,784
2,545,557
1.28
───────── ───────── ───────── ─────────
5,506,707
41,171,736
41,642,582
20.88
───────── ───────── ───────── ─────────
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(a)
Quoted equities – local (continued)
(i)
Quoted equities – local as at 30 September 2015 are as follows (continued):
Aggregate
cost
RM
Quantity
HEALTHCARE
Pharmaniaga Bhd
INDUSTRIALS
Lingkaran Trans Kota Holdings Bhd
OIL & GAS
CLIQ Energy Bhd
Reach Energy Bhd
Sona Petroleum Bhd
PROPERTIES
IGB Corporation Bhd
MKH Bhd
TELECOMMUNICATIONS
Axiata Group Bhd
Telekom Malaysia Bhd
TECHNOLOGY
Inari Amerton Bhd
UTILITIES
Tenaga Nasional Bhd
Fair
value
RM
Percentage
of NAV
%
565,400
3,491,345
3,675,100
1.84
───────── ───────── ───────── ─────────
482,500
2,228,022
2,451,100
1.23
───────── ───────── ───────── ─────────
4,120,000
2,763,530
2,781,000
1.39
11,636,700
7,781,622
7,040,204
3.53
7,866,300
3,356,628
3,421,840
1.72
───────── ───────── ───────── ─────────
23,623,000
13,901,780
13,243,044
6.64
───────── ───────── ───────── ─────────
920,800
2,270,785
2,292,792
1.15
1,477,120
4,703,155
3,338,291
1.67
───────── ───────── ───────── ─────────
2,397,920
6,973,940
5,631,083
2.82
───────── ───────── ───────── ─────────
815,161
5,698,064
4,687,176
2.35
1,002,177
7,605,060
6,694,542
3.36
───────── ───────── ───────── ─────────
1,817,338
13,303,124
11,381,718
5.71
───────── ───────── ───────── ─────────
436,800
1,346,177
1,476,384
0.74
───────── ───────── ───────── ─────────
249,900
2,817,041
2,998,800
1.50
───────── ───────── ───────── ─────────
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(a)
Quoted equities – local (continued)
(i)
Quoted equities – local as at 30 September 2015 are as follows (continued):
Aggregate
cost
RM
Quantity
REITS
Capitaland Malaysia Mall Trust
IGB Bhd
Sunway Bhd
Total quoted equities – local
Accumulated unrealised loss on
quoted equities – local
Percentage
of NAV
%
2,944,500
3,886,740
4,063,410
2.04
4,659,300
6,025,393
5,917,311
2.97
1,571,200
2,253,779
2,419,648
1.21
───────── ───────── ───────── ─────────
9,175,000
12,165,912
12,400,369
6.22
───────── ───────── ───────── ─────────
51,119,265
═════════
119,714,551
117,009,191
═════════
58.66
═════════
(2,705,360)
─────────
117,009,191
═════════
Total quoted equities – local
(ii)
Fair
value
RM
Quoted equities – local as at 30 September 2014 are as follows:
Aggregate
cost
RM
Quantity
OIL & GAS
Dialog Group Bhd
Icon Offshore Bhd
Reach Energy Bhd
Sapura-Kencana Petroleum Bhd
TECHNOLOGY
Globetronics Technology Bhd
BASIC MATERIALS
Pantech Group Holding Bhd
CONSUMER SERVICES
Berjaya Auto Bhd
Fair
value
RM
Percentage
of NAV
%
2,213,970
3,587,910
3,785,889
1.80
403,000
745,550
616,590
0.29
8,704,000
6,039,544
5,614,080
2.66
1,267,900
5,263,748
5,223,748
2.48
───────── ───────── ───────── ─────────
12,588,870
15,636,752
15,240,307
7.23
───────── ───────── ───────── ─────────
490,800
1,593,844
2,292,036
1.09
───────── ───────── ───────── ─────────
1,280,200
1,232,833
1,369,814
0.65
───────── ───────── ───────── ─────────
2,799,100
6,824,829
9,572,922
4.54
───────── ───────── ───────── ─────────
33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(a)
Quoted equities – local (continued)
(ii)
Quoted equities – local as at 30 September 2014 are as follows:
Aggregate
cost
RM
Quantity
INDUSTRIALS
Bumi Armada Bhd
Westports Holdings Bhd
CONSUMER GOODS
IJM Plantation Bhd
QL Resources Bhd
Sarawak Oil Palms Bhd
Spritzer Bhd
UTILITIES
Tenaga Nasional Bhd
FINANCIAL SERVICES
Aeon Credit Service (M) Bhd
Allianz Malaysia Bhd
Eastern & Oriental Bhd
Hong Leong Financial Group Bhd
IJM Land Bhd
MKH Bhd
REITS
Sunway Real Estate Investment
Trust
Total quoted equities – local
Accumulated unrealised gain on
quoted equities – local
Total quoted equities – local
Fair
value
RM
Percentage
of NAV
%
1,512,900
2,211,360
2,844,252
1.35
2,067,600
5,793,839
6,306,180
2.99
───────── ───────── ───────── ─────────
3,580,500
8,005,199
9,150,432
4.34
───────── ───────── ───────── ─────────
744,100
2,450,964
2,574,586
1.22
1,000,000
3,400,000
3,410,000
1.62
637,000
3,705,424
3,637,270
1.72
2,322,800
4,938,913
4,924,336
2.34
───────── ───────── ───────── ─────────
4,703,900
14,495,301
14,546,192
6.90
───────── ───────── ───────── ─────────
799,800
9,177,897
9,869,532
4.68
───────── ───────── ───────── ─────────
199,200
2,857,621
3,095,568
1.47
863,500
4,680,074
10,275,650
4.87
1,292,200
2,760,408
3,708,614
1.76
358,500
5,292,688
6,309,600
2.99
2,599,900
8,557,808
8,579,670
4.07
1,477,120
4,703,155
5,406,259
2.56
───────── ───────── ───────── ─────────
6,790,420
28,851,754
37,375,361
17.72
───────── ───────── ───────── ─────────
1,571,200
2,253,779
2,372,512
1.12
───────── ───────── ───────── ─────────
34,604,790
═════════
88,072,188
13,716,920
─────────
101,789,108
═════════
34
101,789,108
═════════
48.27
═════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign
(i)
Quoted equities – foreign as at 30 September 2015 are as follows:
Quantity
Aggregate
cost
RM
Fair
value
RM
Percentage
of NAV
%
33,000
491,678
500,431
0.25
CHINA
FINANCIALS
China Life Insurance Company Ltd
PICC Property & Casualty Company
Ltd
58,000
504,232
493,860
0.25
───────── ───────── ───────── ─────────
91,000
995,910
994,291
0.50
───────── ───────── ───────── ─────────
HONG KONG
CONSUMER GOODS
China Mengniu Dairy Company Ltd
CONSUMER SERVICES
Asiaray Media Group Ltd
FINANCIALS
AIA Group Ltd
Dah Sing Banking Group Ltd
HEALTHCARE
Harmonicare Medical Holdings
Phoenix Healthcare Group
INDUSTRIALS
China Everbright International Ltd
TECHNOLOGY
Tencent Holdings Ltd
97,000
1,606,524
1,492,959
0.75
───────── ───────── ───────── ─────────
315,500
869,266
590,228
0.30
───────── ───────── ───────── ─────────
257,200
5,530,534
5,832,267
2.92
267,600
2,217,396
2,154,175
1.08
───────── ───────── ───────── ─────────
524,800
7,747,930
7,986,442
4.00
───────── ───────── ───────── ─────────
917,000
3,077,157
2,952,733
1.48
524,000
3,524,367
3,713,195
1.86
───────── ───────── ───────── ─────────
1,441,000
6,601,524
6,665,928
3.34
───────── ───────── ───────── ─────────
689,000
4,170,286
4,218,416
2.12
───────── ───────── ───────── ─────────
41,400
2,352,293
3,029,933
1.52
───────── ───────── ───────── ─────────
35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(i)
Quoted equities – foreign as at 30 September 2015 are as follows (continued):
Aggregate
cost
RM
Quantity
Fair
value
RM
Percentage
of NAV
%
INDONESIA
TELECOMMUNICATIONS
Telekomunikasi TBK PT
2,561,000
2,014,793
2,026,284
1.02
───────── ───────── ───────── ─────────
PHILIPPINES
UTILITIES
Metro Pacific Investment
Corporation
FINANCIALS
Megaworld Corporation
670,800
246,621
313,347
0.16
───────── ───────── ───────── ─────────
5,107,000
2,336,375
2,079,019
1.04
───────── ───────── ───────── ─────────
SINGAPORE
TELECOMMUNICATIONS
Singapore Telecommunications
CONSUMER GOODS
Bumitama Agri Ltd
First Resources Ltd
FINANCIALS
DBS Group Holdings Ltd
REITS
Capitaland Retail China Trust
259,600
2,980,147
2,876,600
1.44
───────── ───────── ───────── ─────────
1,013,000
2,762,138
2,501,381
1.26
67,200
329,196
340,168
0.17
───────── ───────── ───────── ─────────
1,080,200
3,091,334
2,841,549
1.43
───────── ───────── ───────── ─────────
27,300
1,484,494
1,365,922
0.68
───────── ───────── ───────── ─────────
281,974
972,031
1,183,664
0.59
───────── ───────── ───────── ─────────
KOREA
CONSUMER GOODS
Coway Company Ltd
3,892
1,174,299
1,204,058
0.60
───────── ───────── ───────── ─────────
36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(i)
Quoted equities – foreign as at 30 September 2015 are as follows (continued):
Aggregate
cost
RM
Quantity
Fair
value
RM
Percentage
of NAV
%
THAILAND
INDUSTRIALS
Airports of Thailand PCL
TELECOMMUNICATIONS
Advanced Info Service PCL
Total quoted equities – foreign
Accumulated unrealised gain on
quoted equities – foreign
Total quoted equities – foreign
73,200
1,671,133
2,482,702
1.25
───────── ───────── ───────── ─────────
74,100
2,003,530
2,021,315
1.01
───────── ───────── ───────── ─────────
13,338,766
═════════
42,318,490
1,054,167
─────────
43,372,657
═════════
37
43,372,657
═════════
21.75
═════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(ii)
Quoted equities –foreign as at 30 September 2014 are as follows:
Aggregate
cost
RM
Quantity
Fair
value
RM
Percentage
of NAV
%
INDONESIA
INDUSTRIALS
Indocement Tunggal Prakarsa
TELECOMMUNICATIONS
Telekomunikasi TBK PT
FINANCIALS SERVICES
Ciputra Development TBK
399,300
2,547,012
2,313,862
1.10
───────── ───────── ───────── ─────────
4,650,200
3,108,684
3,645,029
1.73
───────── ───────── ───────── ─────────
7,894,000
2,508,354
2,122,697
1.01
───────── ───────── ───────── ─────────
PHILIPPINES
UTILITIES
Metro Pacific Investment
Corporation
FINANCIALS
GT Capital Holdings Incorporation
Security Bank Corporation
Vista Land & Lifescapes
Incorporation
5,456,500
2,023,510
1,933,205
0.92
───────── ───────── ───────── ─────────
30,170
288,690
1,799,409
2,774,538
2,318,160
3,051,598
1.10
1.45
5,520,000
2,100,525
2,466,761
1.17
───────── ───────── ───────── ─────────
5,838,860
6,674,472
7,836,519
3.72
───────── ───────── ───────── ─────────
SINGAPORE
OIL & GAS
Ezion Holding Bhd
CONSUMER GOODS
Bumitama Agri Ltd
REITS
Capitaretail China Trusts
592,800
2,773,386
2,736,378
1.30
───────── ───────── ───────── ─────────
1,013,000
2,762,138
2,865,534
1.36
───────── ───────── ───────── ─────────
273,992
992,482
1,106,219
0.52
───────── ───────── ───────── ─────────
38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(ii)
Quoted equities – foreign as at 30 September 2014 are as follows (continued):
Aggregate
cost
RM
Quantity
Fair
value
RM
Percentage
of NAV
%
KOREA
INDUSTRIALS
CJ Korea Express Corporation
HEALTH CARE
Naturalendo Tech Co Ltd
CONSUMER SERVICES
BGF Retail Co Ltd
THAILAND
INDUSTRIALS
Airport of Thailand - NVDR
CONSUMER SERVICES
CP All PCL - NVDR
TELECOMMUNICATIONS
Total Access Communication PLC
- NVDR
2,791
1,441,576
1,452,312
0.69
───────── ───────── ───────── ─────────
18,047
2,774,744
2,545,342
1.21
───────── ───────── ───────── ─────────
8,464
1,680,192
1,661,797
0.79
───────── ───────── ───────── ─────────
181,200
4,135,746
4,378,317
2.07
───────── ───────── ───────── ─────────
457,000
2,126,728
2,067,571
0.98
───────── ───────── ───────── ─────────
231,400
2,511,188
2,456,427
1.16
───────── ───────── ───────── ─────────
CHINA
OIL & GAS
China Longyuan Power Group
702,000
2,573,374
2,247,658
1.06
───────── ───────── ───────── ─────────
CAYMAN ISLANDS
CONSUMER SERVICES
China Modern Dairy Holdings
1,610,000
2,548,702
2,441,430
1.16
───────── ───────── ───────── ─────────
39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
8
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
(b)
Quoted equities – foreign (continued)
(ii)
Quoted equities – foreign as at 30 September 2014 are as follows (continued):
Aggregate
cost
RM
Quantity
Fair
value
RM
Percentage
of NAV
%
HONG KONG
TECHNOLOGY
Tencent Holding Ltd
HEALTH CARE
Sihuan Pharmaceutical Holding
FINANCIALS
AIA Group Ltd
Hong Kong Exchanges & Clearing
Total quoted equities – foreign
Accumulated unrealised gain on
quoted equities – foreign
Total quoted equities – foreign
42,000
2,078,908
2,041,966
0.97
───────── ───────── ───────── ─────────
1,170,000
2,170,066
2,881,233
1.37
───────── ───────── ───────── ─────────
217,000
3,424,041
3,680,181
1.74
43,900
2,657,178
3,098,595
1.47
───────── ───────── ───────── ─────────
260,900
6,081,219
6,778,776
3.21
───────── ───────── ───────── ─────────
30,802,454
═════════
53,512,481
1,999,791
─────────
55,512,272
═════════
40
55,512,272
═════════
26.33
═════════
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
9
CASH AND CASH EQUIVALENTS
Cash and bank balances
Deposits with licensed financial institutions
2015
RM
2014
RM
4,568,110
30,779,528
─────────
35,347,638
═════════
5,382,980
46,876,962
─────────
52,259,942
═════════
Weighted average effective interest rates per annum and weighted average maturity of deposits with
licensed financial institution are as follows:
2015
%
Deposits with licensed financial institutions
2014
%
3.45
3.35
═════════ ═════════
Deposits with licensed financial institutions have an average maturity of 2 days (2014: 1 day).
10
NUMBER OF UNITS IN CIRCULATION
2015
No. of units
2014
No. of units
327,091,000
190,669,000
Creation of units arising from applications
during the financial year
91,990,849
155,491,000
Creation of units arising from distribution
during the financial year
24,884,192
19,679,611
At the beginning of the financial year
Cancellation of units during the financial year
(108,256,041)
(38,748,611)
─────────── ───────────
335,710,000
327,091,000
═══════════ ═══════════
At the end of the financial year
41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
11
TRANSACTIONS WITH BROKERS AND DEALERS
(i)
Details of transactions with the top 10 dealers for the financial year ended 30 September 2015 are
as follows:
Value
of trade
RM
Percentage
of total trade
%
Brokerage
fees
RM
Percentage
of total
brokerage
%
Name of brokers/dealer
Affin Group*
323,249,384
28.61
291,357
19.33
Public Bank Bhd
239,490,259
21.20
KAF Group*
60,680,908
5.37
51,702
3.43
CLSA Ggroup*
45,534,187
4.03
123,288
8.18
Maybank Investment Bank Bhd
37,495,427
3.32
117,328
7.78
UOB Group*
36,553,079
3.24
91,383
6.06
CCB International Securities Ltd
35,895,209
3.18
96,258
6.39
CIMB Group*
34,814,595
3.08
83,408
5.53
Daiwa Securities Group
Incorporation
31,207,844
2.76
78,019
5.18
Credit Suisse Malaysia Sdn Bhd
27,741,389
2.46
69,353
4.60
Others
257,158,860
22.75
505,301
33.52
────────────────────────────────────────────
1,129,821,141
100.00
1,507,397
100.00
════════════════════════════════════════════
(ii)
Details of transactions with the top 10 dealers for the financial year ended 30 September 2014 are as
follows:
Name of brokers/dealer
Value
of trade
RM
Percentage
of total trade
%
Brokerage
fees
RM
Percentage
of total
brokerage
%
Affin Group*
1,579,180,547
44.60
164,140
14.22
Public Bank Bhd
908,304,122
25.65
RHB Group*
559,512,448
15.80
62,638
5.43
Hong Leong Investment Bank Bhd 167,811,823
4.74
29,917
2.59
CIMB Group*
41,047,533
1.16
121,765
10.55
UOB Kay Hian Group*
36,096,969
1.02
90,243
7.82
Maybank Investment Bank Bhd
30,739,446
0.87
118,112
10.23
Credit Suisse M Sdn Bhd
28,900,901
0.82
72,252
6.26
CLSA Group*
19,129,691
0.54
51,994
4.50
Kenanga Investment Bank Bhd
15,409,589
0.44
30,597
2.65
Others
154,878,127
4.36
412,712
35.75
────────────────────────────────────────────
3,541,011,196
100.00
1,154,370
100.00
════════════════════════════════════════════
Note: * Group wide
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
11
TRANSACTIONS WITH BROKERS AND DEALERS (CONTINUED)
Included in transactions with brokers and dealers are trades with Affin Group, companies related to the
Manager amounting to RM323,249,384 (2014: RM1,579,180,547).The Manager is of the opinion that all
transactions with the related companies have been entered into at agreed terms between the related parties.
12
UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER
The related parties of and their relationship with the Fund are as follows:
Related parties
Relationships
Affin Hwang Asset Management Berhad
The Manager
Affin Hwang Investment Bank Berhad
Holding company of the Manager
Affin Holdings Berhad (“AHB”)
Ultimate holding company of the
Manager
Subsidiaries and associates of AHB as
disclosed in its financial statements
Subsidiary and associated companies
of the ultimate holding company of
the Manager
Director of Affin Hwang Asset Management
Director of the Manager
Non-Executive Chairman of AHB
Non-Executive Chairman of the
ultimate holding company of the Manager
The Manager:
Affin Hwang Asset Management
Berhad
2015
RM
No. of units
No. of units
2014
RM
543,306
322,778
106,738
68,814
════════ ════════ ════════ ════════
43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
13
MANAGEMENT EXPENSE RATIO (“MER”)
MER
2015
%
2014
%
1.67
═════════
1.63
═════════
MER is derived from the following calculation:
MER
=
(A + B + C + D + E) x 100
───────────────────
F
A
B
C
D
E
F
=
=
=
=
=
=
Management fee
Trustee fees
Auditors’ remuneration
Tax agent’s fee
Other expenses, excluding goods and service tax on transaction costs
Average NAV of the Fund calculated on a daily basis
The average NAV of the Fund for the financial year calculated on a daily basis is RM222,600,998 (2014:
RM146,162,459).
14
PORTFOLIO TURNOVER RATIO (“PTR”)
PTR (times)
2015
2014
1.38
═════════
1.44
═════════
PTR is derived from the following calculation:
(Total acquisition for the financial year + total disposal for the financial year) ÷ 2
Average NAV of the Fund for the financial year calculated on a daily basis
where: total acquisition for the financial year = RM317,838,371 (2014: RM237,332,613)
total disposal for the financial year = RM296,704,573 (2014: RM184,457,479)
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 (CONTINUED)
15
SEGMENT INFORMATION
The strategic asset allocation committee of the Investment Manager makes the strategic resource allocations
on behalf of the Fund. The Fund has determined the operating segments based on the reports reviewed by
the Manager that are used to make strategic decisions.
The committee is responsible for the Fund’s entire portfolio and considers the business to have a single
operating segment. The committee’s asset allocation decisions are based on a single, integrated investment
strategy and the Fund’s performance is evaluated on an overall basis.
The reportable operating segment derives its income by seeking investments to achieve targeted returns
consummate with an acceptable level of risk within the portfolio. These returns consist of interest, dividends
and gains on the appreciation in the value of investments and are derived from quoted equities in Malaysia,
China, Hong Kong, Indonesia, Korea, Philippines, Singapore and Thailand.
There were no changes in the reportable segment during the financial year.
The internal reporting provided to the committee for the Fund’s assets, liabilities and performance is
prepared on a consistent basis with the measurement and recognition principles of MFRS.
45
AFFIN HWANG SELECT DIVIDEND FUND
STATEMENT BY THE MANAGER
We, Maimoonah Binti Mohamed Hussain and Teng Chee Wai, as the Directors of Affin Hwang Asset
Management Berhad, do hereby state that in our opinion as the Manager, the financial statements set out
on pages 10 to 45 are drawn up in accordance with the provisions of the Deed and give a true and fair view
of the financial position of the Fund as at 30 September 2015 and of its financial performance, changes in
equity and cash flows for the financial year ended 30 September 2015 in accordance with the Malaysian
Financial Reporting Standards and International Financial Reporting Standards.
For and on behalf of the Manager,
AFFIN HWANG ASSET MANAGEMENT BERHAD
MAIMOONAH BINTI MOHAMED HUSSAIN
DIRECTOR
TENG CHEE WAI
EXECUTIVE DIRECTOR
Kuala Lumpur
20 November 2015
46
INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF
AFFIN HWANG SELECT DIVIDEND FUND
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Affin Hwang Select Dividend Fund on pages 10 to 45, which
comprise the statement of financial position as at 30 September 2015 of the Fund, and the statement of
comprehensive income, statement of changes in equity and statement of cash flows of the Fund for the year
then ended, and a summary of significant accounting policies and other explanatory notes, as set out on
Note 1 to 15.
Manager’s Responsibility for the Financial Statements
The Manager of the Fund is responsible for the preparation of financial statements so as to give a true and
fair view in accordance with Malaysian Financial Reporting Standards and International Financial Reporting
Standards. The Manager is also responsible for such internal control as the Manager determines are
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgment, including the assessment of risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, we consider internal control relevant to the Fund’s preparation of the financial statements to
give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Manager’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Manager, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
47
INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF
AFFIN HWANG SELECT DIVIDEND FUND (CONTINUED)
REPORT ON THE FINANCIAL STATEMENTS (CONTINUED)
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Fund as of 30
September 2015 and of its financial performance and cash flows for the year then ended in accordance with
Malaysian Financial Reporting Standards and International Financial Reporting Standards.
OTHER MATTERS
This report is made solely to the unitholders of the Fund and for no other purpose. We do not assume
responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS
(No. AF: 1146)
Chartered Accountants
Kuala Lumpur
20 November 2015
48
DIRECTORY OF SALES OFFICE
HEAD OFFICE
Affin Hwang Asset Management Berhad
th
Suite 11-01, 11 Floor
Menara Keck Seng
203, Jalan Bukit Bintang
55100 Kuala Lumpur
Tel : 03 – 2116 6000
Fax : 03 – 2116 6100
Toll free no : 1-800-88-7080
Email:customercare@affinhwangam.com
SELANGOR
Affin Hwang Asset Management Berhad
A-7-G Jaya One
No. 72A, Jalan Universiti
46200 Petaling Jaya
Selangor
Tel: 03-7620 1290
Fax: 03-7620 1298
PENANG
Affin Hwang Asset Management Berhad
No. 10-C-24 Precinct 10
Jalan Tanjung Tokong
10470 Penang
Tel : 04 – 899 8022
Fax : 04 – 899 1916
PERAK
Affin Hwang Asset Management Berhad
13A Persiaran Greentown 7
Greentown Business Centre
30450 Ipoh Perak
Tel : 05 – 241 0668
Fax : 05 – 255 9696
MELAKA
Affin Hwang Asset Management Berhad
Ground Floor, No. 584, Jalan Merdeka
Taman Melaka Raya
75000 Melaka
Tel : 06 – 281 2890 / 3269
Fax : 06 – 281 2937
JOHOR
Affin Hwang Asset Management Berhad
st
1 Floor, Lot 93
Jalan Molek 1/29, Taman Molek
81100 Johor Bahru
Johor
Tel : 07 – 351 5977
Fax : 07 – 351 5377
SABAH
Affin Hwang Asset Management Berhad
nd
Lot No. B-2-09, 2 Floor
Block B, Warisan Square
Jalan Tun Fuad Stephens
88000 Kota Kinabalu
Sabah
Tel : 088 – 252 881
Fax : 088 – 288 803
49
DIRECTORY OF SALES OFFICE (Continued)
SARAWAK
Affin Hwang Asset Management Berhad
Ground Floor, No. 69
Block 10, Jalan Laksamana Cheng Ho
93200 Kuching
Sarawak
Tel : 082 – 233 320
Fax : 082 – 233 663
Affin Hwang Asset Management Berhad
st
1 Floor, Lot 1291
Jalan Melayu, MCLD
98000 Miri
Sarawak
Tel : 085 – 418 403
Fax : 085 – 418 372
50
www.affinhwangam.com
Affin Hwang Asset Management Berhad (429786-T)
Suite 11-01, 11th Floor, Menara Keck Seng, 203 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia