CIMB-PRINCIPAL ASIA PACIFIC DYNAMIC INCOME FUND

CIMB-PRINCIPAL ASIA PACIFIC DYNAMIC INCOME FUND

CONTENTS

INVESTORS' LETTER

MANAGER'S REPORT

Fund Objective and Policy

Performance Data

Market Review

Fund Performance

Portfolio Structure

Market Outlook

Investment Strategy

Unit Holdings Statistics

Soft Commissions and Rebates

STATEMENT BY MANAGER

TRUSTEE’S REPORT

INDEPENDENT AUDITORS' REPORT

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

DIRECTORY

LIST OF CWA (an agency force of CIMB-Principal) OFFICES

10

11 - 12

13

14

9

PAGE(S)

1

2 - 8

15

16

17 - 52

53

54 - 57


INVESTORS' LETTER

Dear Valued Investors,

Thank you for investing in CIMB-Principal Asset Management Berhad (“CIMB-Principal”) funds. Our commitment to you is to deliver consistent risk-adjusted returns by combining sound investment and strong corporate governance. By placing clients at the heart of everything we do, we will continue to strive in delivering quality products and services that meet our clients’ financial and investment needs.

We are pleased to announce that CIMB-Principal has recently won fund performance awards by The

Edge-Lipper Malaysia Fund Awards 2015 and Morningstar Awards 2015 Malaysia. The awards are:

Award Category Fund Name

Malaysia Fund

Awards 2015

3 years

Best Equity Global, 3 and 5 years

Best Equity Asia Pacific Ex Japan,

5 years

Best Equity Asia Pacific Ex Japan

Malaysia Islamic, 3 and 5 years

Best Asia Pacific Equity Fund

CIMB-Principal Asia Pacific

Dynamic Income Fund

CIMB-Principal Global Titans Fund

CIMB-Principal Equity Income Fund

CIMB Islamic Equity Fund

Morningstar

Fund Awards

2015

CIMB-Principal Asia Pacific

Dynamic Income Fund

Winning these awards is a testament to the excellent performance of our Funds and the overall capabilities of our experienced fund managers in managing local funds. Both the Edge-Lipper Awards and Morningstar Fund Awards honor funds that have delivered the outperformance, on a strong riskadjusted basis relative to their peers.

Once again, we thank you for your support as CIMB-Principal remains committed in helping you to grow your investment.

Yours faithfully,

For CIMB-Principal Asset Management Berhad

Munirah Khairuddin

Chief Executive Officer/Executive Director

1


MANAGER’S REPORT

FUND OBJECTIVE AND POLICY

What is the investment objective of the Fund?

The Fund aims to provide regular income by investing primarily in the Asia Pacific ex Japan region and at the same time aims to achieve capital appreciation over the medium to long-term.

Has the Fund achieved its objective?

The Fund has achieved its objective of delivering capital appreciation over the medium or long term.

What are the Fund investment policy and principal investment strategy?

The Fund will be managed with the aim of achieving a stable and positive investment returns over the medium-term to long term through investment in the Asia Pacific ex Japan region regardless of market conditions. The companies invested in must be domiciled in, listed in, and/or have significant operations in Asia Pacific ex Japan. ‘Significant operations’ means major businesses of the company.

For example, the Fund can invest in a company with significant business/operations in Thailand but listed on the New York Stock Exchange. The threshold for ‘significant operations’ would be if more than 30% of total group revenue derives from countries in Asia Pacific ex Japan. The calculation would be based on the most recent financial reports released by the companies (e.g. interim and annual reports). The term “medium-term to long term” refers to a period of three (3) years and more.

Under general market conditions, the Fund’s investment will focus on high dividend yielding equities of companies, which the Sub-Manager believes will offer attractive yields, sustainable dividend payments and will exhibit above average growth potential when compared to its industry or the overall market. In addition, the Fund may also invest in companies with good growth potential, which the Sub-Manager foresees may adopt a strong dividend payout policy in the future. The Fund may also invest up to 15% of the Fund’s Net Asset Value (“NAV”) in fixed income instruments to be in line with the Fund’s objective. The Fund’s fixed income investments will generally be restricted to securities rated at least a minimum credit rating of “BBB3” or “P2” by RAM Ratings (“RAM”) or equivalent rating by Malaysian Rating Corporation Berhad (“MARC”) or by local rating agency(ies) of the country or “BB” by Standard & Poor's (“S&P”) or equivalent rating by Moody’s or Fitch.

However, the Sub-Manager may take temporary defensive positions that may detract from the Fund’s prescribed asset allocation when the Sub-Manager believes that the equity markets that the Fund invests in are experiencing excessive volatility, expects prolonged declines, or when there are other adverse conditions, such as political instability. Under these circumstances, the Fund may invest all or a substantial portion of its assets in money market instruments to achieve the Fund’s investment objective in bearish or non-performing equity markets. The Sub-Manager may from time to time reduce its proportion of higher risk assets, such as equities and increase its asset allocation to liquid assets such as money market instruments and/or Deposits to safeguard the Fund.

In response to these adverse conditions, the Manager or its fund management delegate may also utilise derivative instruments such as futures contracts to hedge the portfolio. The use of derivatives is subject to the prevailing Securities Commission Malaysia (“SC”) regulations.

As the investment universe of this Fund is Asia Pacific ex Japan, the countries in which the Fund may invest in includes, but is not limited to Australia, the People's Republic of China, Hong Kong SAR,

India, Indonesia, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand and

Vietnam.

The Fund will generally invest between 70% to 98% (both inclusive) of the Fund’s NAV in equities and up to 15% of the Fund’s NAV may be invested in fixed income instruments. A minimum of 2% of its NAV will be invested in liquid assets for liquidity purpose.

2


FUND OBJECTIVE AND POLICY (CONTINUED)

Fund category/type

Equity/Income & Growth

How long should you invest for?

Recommended up to three (3) years or more

Indication of short-term risk (low, moderate, high)

Moderate

When was the Fund launched?

25 April 2011

What was the size of the Fund as at 31 March 2015?

RM2,241.07 million (7,391.69 million units)

What is the Fund’s benchmark?

The performance of this Fund cannot be compared directly with any specific publicly available benchmark. However, the Fund has a target return of eight percent (8%) per annum.

This is not a guaranteed return and is only a measurement of the Fund’s performance. The Fund may not achieve the target return in any particular financial year but targets to achieve this growth over the medium-term to long-term.

What is the Fund distribution policy?

Depending on the level of income (if any) the Fund generates, the Fund aims to distribute part or all of its distributable income on an annual basis. The payment of distributions, if any, from the Fund will vary from period to period depending on interest rates, market conditions and the performance of the

Fund. However, pursuant to the Deed, the Manager has the right to make provisions for reserves in respect of distribution of the Fund. If the distribution available is too small or insignificant, any distribution may not be of benefit to the Unit holders as the total cost to be incurred in any such distribution may be higher than the amount for distribution. The Manager has the discretion to decide on the amount to be distributed to the Unit holders.

What was the net income distribution for the financial year ended 31 March 2015?

There was no distribution made for the financial year ended 31 March 2015. However, there was a unit split declared on 15 October 2014. As a result, the NAV per unit dropped from RM0.3602 to

RM0.2573.

3


PERFORMANCE DATA

Details of portfolio composition of the Fund for the last three financial years are as follows:

31.03.2015

%

31.03.2014

%

31.03.2013

%

Quoted securities

- Basic Materials

- Consumer Products

- Finance

- Health Care

- Industrials

- Oil & Gas

- Properties

- Technology

- Telecommunications

- Trading/Services

- Utilities

Cash and other net assets

1.79

9.90

29.66

2.37

12.66

8.48

-

1.68

17.24

-

7.70

8.52

100.00

-

16.03

18.01

3.92

19.37

2.34

1.27

-

20.47

4.02

3.83

10.74

100.00

15.39

37.89

-

-

9.09

6.75

4.70

2.90

7.11

-

10.55

5.62

100.00

Performance details of the Fund for the last three financial years are as follows:

31.03.2015 31.03.2014 31.03.2013

NAV (RM Million)

Units in circulation (Million)

NAV per unit (RM)

2,241.07

7,391.69

0.3031

236.77

703.80

0.3364

164.73

516.50

0.3189

Highest NAV per unit (RM)

Lowest NAV per unit (RM)

Total return (%)

- Capital growth (%)

- Income distribution (%)

0.5103

0.2567

26.30

26.30

-

0.3457

0.2969

9.61

5.39

4.18

0.3386

0.2455

35.46

27.82

5.90

Date of distribution

Gross distribution per unit (sen)

Net distribution per unit (sen)

Management Expense Ratio (%) (“MER”)

Portfolio Turnover Ratio (times) (“PTR”)#

1.92

2.12

-

-

-

06.03.2014 29.03.2013

1.35

1.33

1.89

1.88

2.01

1.99

2.01

1.91

* The Fund's MER decreased from 2.01% to 1.92% due to higher average NAV during the financial

year.

# The Fund’s PTR increased from 1.99 times to 2.12 times due to the steadier market compared with the volatility conditions that were experienced in the same period a year ago.

31.03.2015 31.03.2014 31.03.2013

Since inception to 31.03.2012

% % % %

Annual Total Return

(Launch date: 25 April 2011)

26.30 9.61 35.46 3.96

Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up. All performance figures for the financial year have been extracted from Lipper.

4


MARKET REVIEW (1 APRIL 2014 TO 31 MARCH 2015)

Asian Pacific ex-Japan markets posted returns of +17.5% in Ringgit terms for the 1-year to end-

March 2015. China and India was the star performer of the period, with gain of more than 30% throughout the year, while Malaysia was a laggard followed by Australia.

Overall, market volatility was high with the period marked by two major events. In September 2014, markets suffered a sell-off driven by renewed worries over China, political stability in Hong Kong and concerns over a strong USD. Another event is falling commodity price, the clearest representative is oil. With a slower growth generally in the world and lower demand of commodities, price has fallen off for most commodities. In December 2014, oil price decline accelerated, many oil exporting countries

(mainly emerging market) were hit hard with falling foreign reserve and weaker exchanging rate.

Among the ASEAN markets, martial law was imposed in Thailand in early May 2014 by the military government but equity markets viewed it positively as there was now a functioning government.

Indonesia also did relatively well as investors expected reforms to happen after Jokowi won the

Indonesian Presidential election in late July 2014. Philippine economy remains buoyant, consumption is strong.

As for India, the Bombay Stock Exchange Sensitive Index (“SENSEX”) rallied prior to elections as domestic macro indicators surprised positively on low expectations. The SENSEX rallied further on the back of expectations that the Bharatiya Janata Party ("BJP") led coalition will win, and again post elections in mid-May 2014 after the BJP exceeded expectations by winning more than half of the seats of the lower house. Following that India was a big beneficiary of weak oil prices and hopes that reforms would push up long term Gross Domestic Product (“GDP”) growth from the tepid 5%+ to 7%+ levels.

China did very well after an initial growth scare in early 2014. The People’s Bank of China (“PBOC”) pumped more than USD126 billion into banks in September 2014 and October 2014 via short term loans. This followed a 2 time cut in reserve requirements for small and regional banks that cater to farmers and small businesses. Towards the end of October 2014, the markets started to price in monetary easing by the PBOC given the high real interest rates, high leverage in the system and slowing economic growth. Reforms of state-owned enterprises in the energy, telecommunications and construction sectors were in the headlines and were generally well received by investors.

Australia market was performing well in AUD term, however, as it was a commodity export country, the economy slow down, which leads to a first rate cut in 2015, currency has depreciated, in MYR term Australia market return is a mere 2%.

5


FUND PERFORMANCE

Income

1 year

to

31.03.2015

%

-

3 years

to

31.03.2015

%

-

Since inception to

31.03.2015

%

-

Capital

Total Return

Benchmark

26.30

26.30

8.00

87.52

87.52

25.97

94.99

94.99

35.18

Average Total Return 26.30 23.31 18.49

For the financial year under review, the Fund recorded a total return of 26.30% which outperformed the benchmark by 18.30% due to market timing and good stock selections.

120%

100% CIMB-Principal Asia Pacific Dynamic Income Fund

8.00% per annum

80%

60%

40%

20%

0%

-20%

Changes in NAV

NAV (RM million)

31.03.2015 31.03.2014 Changes

2,241.07 236.77

%

846.52

NAV/unit (RM) 0.3031 0.3364 (9.90)

The NAV of the Fund has increased by 846.52% due to inflow and capital appreciation. The reduction in NAV per unit is due to unit split on 15 October 2014.

Performance data represents the combined income and capital return as a result of holding units in the Fund for the specified length of time, based on NAV to NAV price. The performance data assumes that all earnings from the Fund are reinvested and are net of management and trustee fees. Past performance is not reflective of future performance and income distributions are not guaranteed. Unit prices and income distributions, if any, may fall and rise. All performance figures for the financial year have been extracted from Lipper.

6


PORTFOLIO STRUCTURE

Asset allocation

(% of NAV)

Quoted securities

Cash and other net assets

31.03.2015

91.48

8.52

31.03.2014

89.26

10.74

TOTAL 100.00 100.00

As at 31 March 2015, 91.48% of the Fund's NAV was invested in quoted securities as compared to

89.26% in the previous financial year.

MARKET OUTLOOK*

Equities have benefited from Quantitative Easing (“QE”) from US, Europe and Japan. Despite market consensus of strong US economy and expecting rate normalisation, we do not expect this going to happen any sooner simply because it is not as strong as market has been expecting and a strong dollar will have an impact of domestic economy recovery. The European Central Bank (“ECB”) has finally launched QE in early 2015. Timing is everything and must be accompanied by structural reforms.

Emerging market central banks have also joined the easing club to cut interest rates, hopefully to stimulate growth, given inflation is low. However, we suspect such easing is having any material long term impact on the economy growth, other than asset inflation.

Overall the loose monetary policies will help on the equity market.

* This market outlook does not constitute an offer, invitation, commitment, advice or recommendation to make a purchase of any investment. The information given in this article represents the views of CIMB-Principal or based on data obtained from sources believed to be reliable by CIMB-Principal. Whilst every care has been taken in preparing this, CIMB-Principal makes no guarantee, representation or warranty and is under no circumstances liable for any loss or damage caused by reliance on, any opinion, advice or statement made in this market outlook.

INVESTMENT STRATEGY

The prolonged period of low interest rates has led to over-investment and over-supply to the extent that inflation may be benign for some time. In 2015 which we dub the “Year of the Turtle”, growth is scarce and more monetary easing is positive for financial assets.

Our regional portfolios are fully invested. Earnings risks remain and stock selection is key.

We are positive on Asian Equities. The rally will be narrow as the outperformers may be confined to companies with rising Return on Equity; improving business fundamentals aided by consolidation/

Mergers and acquisitions (“M&A”); global cost leaders in a deflationary environment; exhibit visible earnings growth. There may be Price-to-Book ratio multiple expansions on falling rates in Asia.

We like Telecommunications, Industrials and Financial stocks - which benefit from visible growth drivers and benign interest rates. We are looking for cyclicals which are cost leaders as these may continue to generate high Return on Equity (“ROE”).

7


UNIT HOLDINGS STATISTICS

Breakdown of unit holdings by size as at 31 March 2015 are as follows:

Size of unit holdings (units)

5,000 and below

No. of unit holders No. of units held % of units held

(million)

996 0.91 0.01

341 2.55 0.03 5,001-10,000

10,001-50,000

50,001-500,000

500,001 and above

1,416 38.08 0.52

2,350 421.71 5.58

445 6,928.45 93.86

Total 5,548 7,391.70 100.00

SOFT COMMISSIONS AND REBATES

CIMB-Principal Asset Management Berhad (the “Manager”) and the Trustee (including their officers) will not retain any form of rebate or soft commission from, or otherwise share in any commission with, any broker in consideration for directing dealings in the investments of the Funds unless the soft commission received is retained in the form of goods and services such as financial wire services and stock quotations system incidental to investment management of the Funds. All dealings with brokers are executed on best available terms.

During the financial year under review, the Manager and the Trustee did not receive any rebates from the brokers or dealers but have retained soft commission in the form of goods and services such as financial wire services and stock quotations system incidental to investment management of the

Funds.

8


STATEMENT BY MANAGER TO THE UNIT HOLDERS OF


I, being the Director of CIMB-Principal Asset Management Berhad (the “Manager”), do hereby state that, in the opinion of the Manager, the accompanying audited financial statements set out on pages

13 to 52 are drawn up in accordance with the provisions of the Deeds and give a true and fair view of the financial position of the Fund as at 31 March 2015 and of its financial performance, changes in equity and cash flows for the financial year then ended in accordance with the provision of the

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

(“IFRS”).

For and on behalf of the Manager

CIMB-Principal Asset Management Berhad

(Company No.: 304078-K)

MUNIRAH KHAIRUDDIN

Chief Executive Officer/Executive Director

Kuala Lumpur

29 May 2015

9


TRUSTEE’S REPORT TO THE UNIT HOLDERS OF


We, Universal Trustee (Malaysia) Berhad, being the Trustee for CIMB-Principal Asia Pacific Dynamic

Income Fund (the “Fund”), are of the opinion that CIMB-Principal Asset Management Berhad (the

“Manager”), acting in the capacity of the Manager of the Fund, have fulfilled their duties in the following manner for the financial year ended 31 March 2015:

(a) the Fund is being managed in accordance with the limitations imposed on the investment powers of the Manager and the Trustee under the Deeds, the Securities Commission’s

Guidelines on the Unit Trust Funds, the Capital Markets and Services Act 2007 and other applicable laws during the financial year ended 31 March 2015;

(b) valuation/pricing is carried out in accordance with the Deeds and any regulatory requirements;

(c) creation and cancellation of units are carried out in accordance with the Deeds and any regulatory requirements; and

During this financial year, the Fund declared a unit split at a ratio of 2:5 for CIMB-Principal Asia

Dynamic Income Fund on 15 October 2014. We are of the view that the unit split is not inconsistent with the objective of the Fund.

For and on behalf of the Trustee

UNIVERSAL TRUSTEE (MALAYSIA) BERHAD

ONG TEE VANN

Chief Executive Officer

Kuala Lumpur

29 May 2015

10


INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS OF


REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of CIMB-Principal Asia Pacific Dynamic Income Fund on pages 13 to 52, which comprise the statement of financial position as at 31 March 2015 of the Fund, and the statements of comprehensive income, statement of changes in equity and statement of cash flows for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on Note 1 to 16.

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 is 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 financial statements that 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.

11


INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS OF

CIMB-PRINCIPAL ASIA PACIFIC DYNAMIC INCOME 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 31 March 2015 and of its financial performance and cash flows for the financial year then ended, in accordance with Malaysian Financial Reporting Standards and International Financial

Reporting Standards.

OTHER MATTERS

This report is made solely to the unit holders 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

29 May 2015

12


STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2015

Note

2015

RM

2014

RM

15,805,241 5,415,121

INVESTMENT INCOME

Dividend income

Interest income from deposits with licensed financial institutions

Net gain on financial assets at fair value through profit or loss

Net foreign exchange loss

EXPENSES

8

477,353

229,393,807

(4,418,128)

241,258,273

162,235

19,791,296

(1,021,430)

24,347,222

Management fee

Trustee’s and custodian fees

Audit fee

Tax agent’s fee

Transaction costs

Other expenses

PROFIT BEFORE TAXATION

Taxation

PROFIT AFTER TAXATION AND TOTAL

COMPREHENSIVE INCOME FOR THE

FINANCIAL YEAR

4

5

6

14,374,876

957,777

6,000

37,305

11,154,110

35,889

26,565,957

214,692,316

(2,584,074)

212,108,242

3,424,155

328,680

11,000

18,927

2,726,469

34,580

6,543,811

17,803,411

(353,664)

17,449,747

Profit after taxation is made up as follows:

Realised amount

Unrealised amount

55,891,669

156,216,573

212,108,242

22,884,577

(5,434,830)

17,449,747

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

13


STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2015

Note

2015

RM

2014

RM

CURRENT ASSETS

Financial assets at fair value through profit or loss

Cash and cash equivalents

Amount due from Manager

8

9

2,050,032,052 211,346,163

191,124,453

139,356,344

16,436,070

7,781,299

Amount due from stockbrokers

Dividends receivable

Tax recoverable

TOTAL ASSETS

CURRENT LIABILITIES

Amount due to Manager

Amount due to stockbrokers

Accrued management fee

Amount due to Trustee

Other payables and accruals

TOTAL LIABILITIES

NET ASSET VALUE OF THE FUND

20,977,965

2,493,517

-

4,314,807

314,984

2,403,984,331 240,219,690

11,579,716

148,152,222

3,020,666

134,252

27,980

26,367

727,379

2,345,786

331,425

14,730

27,181

162,914,836 3,446,501

2,241,069,495 236,773,189

EQUITY

Unit holders’ capital

Retained earnings

NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS

2,001,193,830 209,005,766

239,875,665 27,767,423

2,241,069,495 236,773,189

NUMBER OF UNITS IN CIRCULATION (UNITS)

NET ASSET VALUE PER UNIT (RM)

10 7,391,694,329 703,798,076

0.3031 0.3364


14


STATEMENT OF CHANGES IN EQUITY


Unit holders’ capital

Note RM

Retained earnings

RM

Total

RM

209,005,766 27,767,423 236,773,189 Balance as at 1 April 2014

Movement in unit holders’ contributions:

- Creation of units from applications

- Cancellation of units

Total comprehensive income for the financial year

Balance as at 31 March 2015

2,192,259,206

(400,071,142)

-

2,001,193,830

-

-

212,108,242

239,875,665

2,192,259,206

(400,071,142)

212,108,242

2,241,069,495

Balance as at 1 April 2013

Movement in unit holders’ contributions:

- Creation of units from applications

- Creation of units from distribution

- Cancellation of units

Total comprehensive income for the financial year

Distribution

Balance as at 31 March 2014

7

146,273,411

206,365,809

3,496,658

(147,130,112)

-

-

18,456,160

-

-

-

17,449,747

(8,138,484)

164,729,571

206,365,809

3,496,658

(147,130,112)

17,449,747

(8,138,484)

209,005,766 27,767,423 236,773,189


15


STATEMENT OF CASH FLOWS


Note

2015

RM

2014

RM

CASH FLOWS FROM OPERATING ACTIVITIES

922,741,659 369,042,288

(2,420,060,400) (410,458,514)

12,540,258 5,321,328

Proceed from disposal of quoted securities

Purchase of quoted securities

Dividend income received

Interest income received from deposits with licensed financial institutions

Management fee paid

Trustee’s and custodian fees paid

Payments for other fees and expenses

Foreign tax paid

Net realised exchange loss

477,353

(11,685,635)

(838,256)

(78,395)

(1,491,253)

(7,102,349)

162,235

(3,319,316)

(324,021)

(57,547)

-

(1,060,414)

Net cash used in operating activities

CASH FLOWS FROM FINANCING ACTIVITIES

Cash proceeds from units created

(1,505,497,018) (40,693,961)

2,060,684,161 204,503,353

Payments for cancellation of units

Distribution paid

Net cash generated from financing activities

(389,218,805) (146,770,774)

- (9,323,468)

1,671,465,356 48,409,111

Net increase in cash and cash equivalents 165,968,338 7,715,150

Effect of foreign exchange differences

Cash and cash equivalents at the beginning of the financial year

Cash and cash equivalents at the end of the financial year 9

8,720,045

16,436,070

191,124,453

896,126

7,824,794

16,436,070


16


NOTES TO THE FINANCIAL STATEMENTS


1. THE FUND, THE MANAGER AND ITS PRINCIPAL ACTIVITY

CIMB-Principal Asia Pacific Dynamic Income Fund (the “Fund”) is governed by a Principal

Master Deed dated 15 May 2008, a Ninth Supplemental Master Deed dated 25 November

2010 (collectively referred to as the “Deeds”), a Thirteenth Supplemental Deed dated 26 June

2012, and a Eighteenth Supplemental Master Deed dated 25 March 2015 made between

CIMB-Principal Asset Management Berhad (the “Manager”) and Universal Trustee (Malaysia)

Berhad (the “Trustee”).

The Fund will be managed with the aim of achieving a stable and positive investment returns over the medium-term to long term through investment in the Asia Pacific ex Japan region regardless of market conditions. The companies invested in must be domiciled in, listed in, and/or have significant operations in Asia Pacific ex Japan. ‘Significant operations’ means major businesses of the company. For example, the Fund can invest in a company with significant business/operations in Thailand but listed on the New York Stock Exchange. The threshold for ‘significant operations’ would be if more than 30% of total group revenue derives from countries in Asia Pacific ex Japan. The calculation would be based on the most recent financial reports released by the companies (e.g. interim and annual reports). The term

“medium-term to long term” refers to a period of three (3) years and more.

Under general market conditions, the Fund’s investment will focus on high dividend yielding equities of companies, which the Sub-Manager believes will offer attractive yields, sustainable dividend payments and will exhibit above average growth potential when compared to its industry or the overall market. In addition, the Fund may also invest in companies with good growth potential, which the Sub-Manager foresees may adopt a strong dividend payout policy in the future. The Fund may also invest up to 15% of the Fund’s NAV in fixed income instruments to be in line with the Fund’s objective. The Fund’s fixed income investments will generally be restricted to securities rated at least a minimum credit rating of “BBB3” or “P2” by

RAM or equivalent rating by MARC or by local rating agency(ies) of the country or “BB” by

S&P or equivalent rating by Moody’s or Fitch.

However, the Sub-Manager may take temporary defensive positions that may detract from the

Fund’s prescribed asset allocation when the Sub-Manager believes that the equity markets that the Fund invests in are experiencing excessive volatility, expected prolonged declines, or when there are other adverse conditions, such as political instability. Under these circumstances, the Fund may invest all or a substantial portion of its assets in money market instruments to achieve the Fund’s investment objective in bearish or non-performing equity markets. The Sub-Manager may from time to time reduce its proportion of higher risk assets, such as equities and increase its asset allocation to liquid assets such as money market instruments and/or bank deposits to safeguard the Fund.

In response to these adverse conditions, the Manager or its fund management delegate may also utilize derivative instruments such as futures contracts to hedge the portfolio. The use of derivatives is subject to the prevailing SC regulations.

As the investment universe of this Fund is Asia Pacific ex Japan, the countries in which the

Fund may invest in includes, but is not limited to Australia, the People's Republic of China,

Hong Kong SAR, India, Indonesia, Korea, Malaysia, New Zealand, the Philippines, Singapore,

Taiwan, Thailand and Vietnam.

The Fund will generally invest between 70% to 98% (both inclusive) of the Fund’s NAV in equities and up to 15% of the Fund’s NAV may be invested in fixed income instruments. A minimum of 2% of its NAV will be invested in liquid assets for liquidity purpose.

17

1.

2.


THE FUND, THE MANAGER AND ITS PRINCIPAL ACTIVITY (CONTINUED)

All investments will be subjected to the SC Guidelines on Unit Trust Funds, SC requirements, the Deeds, except where exemptions or variations have been approved by the SC, internal policies and procedures and the Fund’s objective.

The Manager, a company incorporated in Malaysia, is a subsidiary of CIMB Group Sdn Bhd and regards CIMB Group Holdings Berhad as its ultimate holding company. The Manager is also an associate of Principal International (Asia) Limited, which is a subsidiary of Principal

Financial Group Inc. The principal activities of the Manager are the establishment and management of unit trust funds and fund management activities.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial statements:

(a) Basis of preparation

The financial statements have been prepared in accordance with the provisions of the

MFRS and IFRS.

The financial statements have been prepared under the historical cost convention, as modified by financial assets at fair value through profit or loss.

The preparation of financial statements in conformity with MFRS and IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported financial year. It also requires the Manager to exercise their judgment in the process of applying the Fund’s accounting policies. The

Manager believes that the underlying assumptions are appropriate and the Fund’s financial statements therefore present the financial position results fairly. 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 2(m).

18

2.


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(a) Basis of preparation (continued)

The standards, amendments to published standards and interpretations to existing 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 April 2017

MFRS 15 “Revenue from Contracts with Customers” (effective from 1 January

2017) 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

(ii) 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.

The Fund will apply this standard when effective. This standard is not expected to have a significant impact on the Fund’s financial statements.

Financial year beginning on/after 1 April 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). 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.

19

2.



(a) Basis of preparation (continued)

(ii) Financial year beginning on/after 1 April 2018 (continued)

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.

MFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes.

The Fund will apply this standard when effective. This standard is not expected to have a significant impact on the Fund’s financial statements.

(b) Financial assets and financial liabilities

Classification

The Fund designates its investments 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 are 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, amount due from Manager, amount due from stockbrokers and dividends receivable.

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 stockbrokers, accrued management fee, amount due to Trustee, and other payables and accruals as other financial liabilities.

Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date the date on which the Fund commits to purchase or sell the asset. Investments are initially recognised at fair value. Transaction costs are expensed in the statement of comprehensive income.

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.

20

2.



(b) Financial assets and financial liabilities (continued)

Recognition and measurement (continued)

Financial liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expired.

Unrealised gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the statement of comprehensive income within net gain or loss on financial assets at fair value through profit or loss in the financial year 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.

Quoted securities in Malaysia are valued at the last done market price quoted on

Bursa Malaysia Securities Berhad (“Bursa Securities”) at the date of the statement of financial position.

Foreign quoted securities are valued at the last traded market price quoted on the respective foreign stock exchange at the close of the business day of the respective foreign stock exchanges.

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 investments for a period exceeding 14 days, or such shorter period as agreed by the Trustee, then the investments are valued as determined in good faith by the Manager, based on the methods or bases approved by the Trustee after appropriate technical consultation.

Deposits with licensed financial institutions are stated at cost plus accrued interest calculated on the effective interest method over the period from the date of placement to the date of maturity of the respective deposits.

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 statement of comprehensive income. If ‘loans and receivables’ has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

21

2.



(b) Financial assets and financial liabilities (continued)

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.

(c) Income recognition

Interest income from deposits with licensed financial institutions is recognised on a time proportionate basis using the effective interest rate method on an accrual basis.

Realised gain or loss on disposal of quoted securities is accounted for as the difference between the net disposal proceeds and the carrying amount of quoted securities, determined on a weighted average cost basis.

(d) Foreign currency

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

(“RM”), which is the Fund’s functional and presentation currency.

Transactions and balances

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 remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in other comprehensive income as qualifying cash flow hedges.

Dividend income is recognised on the ex-dividend date when the right to receive payment is established.

22

2.



(e) Creation and cancellation of units

The Fund issues cancellable units, which are cancelled at the unit holder’s option and are classified as equity. Cancellable units can be put back to the Fund at any time for cash equal to a proportionate share of the Fund’s NAV. The outstanding units are carried at the redemption amount that is payable at the date of the statement of financial position if the unit holder exercises the right to put back the unit to the Fund.

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

Fund’s NAV per unit at the time of creation or cancellation. The Fund’s NAV per unit is calculated by dividing the net assets attributable to unit holders with the total number of outstanding units.

(f) Cash and cash equivalents

For the purpose of statement of cash flows, cash and cash equivalents comprise 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 changes in value.

(g) Taxation

Current tax expense is determined according to Malaysian tax laws at the current rate based upon the taxable profit earned during the financial year.

Tax on dividend income from foreign quoted securities is based on the tax regime of the respective countries that the Fund invests in.

(h) Transaction costs

Transaction costs are costs incurred to acquire or dispose financial assets or liabilities at fair value through profit or loss. They include fees and commissions paid to agents, advisers, brokers and dealers. Transaction costs, when incurred, are immediately recognised in the statement of comprehensive income as expenses.

(i) Amount due from/to stockbrokers

Amounts due from and amount due to stockbrokers represent receivables for investments sold and payables for investments 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 amount due from stockbrokers. A provision for impairment of amount due from stockbrokers is established when there is objective evidence that the Fund will not be able to collect all amounts due from the relevant stockbroker. Significant financial difficulties of the stockbroker, probability that the broker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from stockbrokers is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

23

2.



(i) Amount due from/to stockbrokers (continued)

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.

(j) Distributions

A distribution to the Fund’s unit holders 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.

(k) Unit holders’ capital

The unit holders’ contributions to the Fund meet 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 unit holders to a prorata 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.

(l) Segment information

Operating segments are reported in a manner consistent with the internal reporting used by the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

24

2.



(m) Critical accounting estimates and judgments in applying accounting policies

The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material impact to the Fund’s results and financial position are tested for sensitivity to changes in the underlying parameters.

Estimates and judgments are continually evaluated by the Manager and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In undertaking any of the Fund’s investment, the Manager will ensure that all assets of the Fund under management will be valued appropriately, that is at fair value and in compliance with the SC Guidelines on Unit Trust Funds.

25

3.


FINANCIAL INSTRUMENTS AND RISK MANAGEMENT OBJECTIVES AND POLICIES

Financial instruments of the Fund are as follows:

Financial assets at fair value through profit or loss

RM

2015

Quoted securities (Note 8) 2,050,032,052

Cash and cash

equivalents (Note 9)


Amount due from

Manager


-

-

-

-

2,050,032,052

2014

Quoted securities (Note 8)

Cash and cash

equivalents (Note 9)


Amount due from

Manager



RM

211,346,163

-

-

-

-

211,346,163

Loans and receivables

RM

-

191,124,453

20,977,965

139,356,344

2,493,517

353,952,279

Loans and receivables

RM

4,314,807

16,436,070

Total

RM

2,050,032,052

191,124,453

20,977,965

139,356,344

2,493,517

2,403,984,331

4,314,807

7,781,299

314,984

7,781,299

314,984

28,847,160 240,193,323

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

Total

RM

- 211,346,163

16,436,070

26

3.



(CONTINUED)

The investment objective of the Fund is to provide regular income by investing primarily in the

Asia Pacific ex Japan region and at the same time aims to achieve capital appreciation over the medium to long term

The Fund is exposed to a variety of risks which include market risk (inclusive of price risk, interest rate risk and currency risk), credit risk, liquidity risk, non-compliance risk and capital risk.

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

Manager and adherence to the investment restrictions as stipulated in the Deeds and SC

Guidelines on Unit Trust Funds.

(a) Market risk

(i) Price risk

This is the risk that the fair value of an investment in quoted securities will fluctuate because of changes in market prices (other than those arising from interest rate risk and currency risk). The value of investments may fluctuate according to the activities of individual companies, sector and overall political and economic conditions. Such fluctuation may cause the Fund’s NAV and prices of units to fall as well as rise, and income produced by the Fund may also fluctuate.

The price risk is managed through diversification and selection of securities and other financial instruments within specified limits according to the Deeds.

The Fund’s overall exposure to price risk was as follows:

2015 2014

RM RM

Financial assets at fair value through profit or loss:

- Quoted securities

2,050,032,052 211,346,163

27

3.



(CONTINUED)

(a) Market risk (continued)

(i) Price risk (continued)

The table below summarises the sensitivity of the Fund’s profit after tax and

NAV to movements in prices of quoted securities at the end of each reporting year. The analysis is based on the assumptions that the price of the quoted securities fluctuates 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 of quoted securities Market value

Impact on profit after tax/NAV

2015

RM

- 5% 1,947,530,449

0% 2,050,032,052

5% 2,152,533,655

2014

- 5%

0%

5%

200,778,855

211,346,163

221,913,471

RM

(102,501,603)

-

102,501,603

(10,567,308)

-

10,567,308

(ii) Interest rate risk

Interest rate risk is the risk that the value of the Fund’s investments and its return will fluctuate due to changes in market interest rates.

The Fund’s exposure to fair value interest rate risk arises from investment in money market instruments. The interest rate risk is expected to be minimal as the Fund’s investments comprise mainly short term deposits with approved licensed financial institutions. The Fund is not exposed to cash flow interest rate risk as the Fund does not hold any financial instruments at variable interest rate.

(iii) Currency risk

Currency risk is associated with investments that are quoted and/or priced in foreign currency denomination. Foreign currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

The Manager will evaluate the likely directions of a foreign currency versus RM based on considerations of economic fundamentals such as interest rate differentials, balance of payments position, debt levels, and technical chart considerations.

28

3.

2014

AUD

HKD

IDR

INR

KRW

PHP

SGD

THB

TWD

USD

2015

AUD

HKD

IDR

INR

KRW

PHP

SGD

THB

TWD

USD



(CONTINUED)

(iii) Currency risk (continued)

The following table sets out the foreign currency risk concentrations arising from the denomination of the Fund’s financial instruments in foreign currencies:


RM

333,528,967

813,901,179

Cash and cash equivalents

RM

173,272

-

111,863,906

94,238,115

138,940,295

68,469,322

-

11,052,926

-

-

296,681,114

87,875,202

249,353

366

104,533,952 45,379,578

- 113,009,923

2,050,032,052 169,865,418

Amount due from stockbrokers

RM

-

5,031,992

-

15,945,973

-

-

-

-

-

-

20,977,965

Dividends receivable

RM

426,934

-

851,599

-

-

464,865

-

750,119

-

-

2,493,517

Total

RM

334,129,173

818,933,171

112,715,505

121,237,014

138,940,295

68,934,187

296,930,467

88,625,687

149,913,530

113,009,923

2,243,368,952


RM

14,070,257

85,304,724

5,121,387

9,253,793

31,746,882

10,175,323

28,662,364

-

6,355,314

-

190,690,044


RM

122

-

-

-

-

-

11,376

324

2,533,184

12,134,578

14,679,584


RM

-

-

4,314,807

-

-

-

-

-

-

-

4,314,807


RM

74,120

-

-

-

206,177

-

34,687

-

-

-

314,984

Total

RM

14,144,499

85,304,724

9,436,194

9,253,793

31,953,059

10,175,323

28,708,427

324

8,888,498

12,134,578

209,999,419

29

3.



(CONTINUED)

(iii) Currency risk (continued)

AUD

HKD

IDR

INR

KRW

PHP

SGD

THB

TWD

USD

The table below summarises the sensitivity of the Fund's profit after tax and

NAV to changes in foreign exchange movements at the end of each financial year. The analysis is based on the assumption that the foreign exchange rate fluctuates by 5%, with all other variables remain constants. This represents management’s best estimate of a reasonable possible shift in the foreign exchange rate, having regard to historical volatility of this rate. Disclosures below are shown in absolute terms, changes and impacts could be positive or negative.

% Change in foreign

exchange rate

%

5

5

5

5

5

5

5

5

5

5

Impact on profit after tax/NAV

2015 2014

RM

16,706,459

RM

707,225

40,946,659

5,635,775

6,061,851

6,947,015

3,446,709

14,846,523

4,431,284

7,495,677

5,650,496

112,168,448

4,265,236

471,810

462,690

1,597,653

508,766

1,435,421

16

444,425

606,729

10,499,971

30

3.



(CONTINUED)

(b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligation resulting in financial loss to the Fund.

The credit risk arising from placements of deposits in licensed financial institutions is managed by ensuring that the Fund will only place deposits in reputable licensed financial institutions. The settlement terms of the proceeds from the creation of units receivable from the Manager are governed by the SC Guidelines on Unit Trust Funds.

For amount due from stockbrokers, the settlement terms are governed by the relevant rules and regulations as prescribed by respective stock exchange. The credit risk is minimal as all transactions in quoted securities are settled/paid upon delivery using approved stockbrokers.


2015

Consumer

Products

- NR

Finance

RM

-


RM

-

Amount due from

Manager

RM

-


RM

348,269

Total

RM

348,269

- CIMB Bank

Bhd)

(AAA

- Citibank

5,000,452

Bhd (AAA) 169,958,217

- Malayan

Banking

Bhd (AAA)

- Public

5,000,445

Bank Bhd

(AAA)

- RHB Bank

Bhd (AA2)

- NR

Industrials

- NR

Oil & Gas

- NR

Utilities

- NR

Others

- NR

3,251,624

7,913,715

-

-

-

-

-

191,124,453

-

-

-

-

-

20,977,965

-

-

-

-

-

-

-

-

-

-

-

-

- 139,356,344

20,977,965 139,356,344

-

- 169,958,217

-

-

5,000,452

5,000,445

3,251,624

- 7,913,715

851,825 21,829,790

264,244

828,784

200,395

264,244

828,784

200,395

- 139,356,344

2,493,517 353,952,279

31

3.



(CONTINUED)

(b) Credit risk (continued)

2014


RM

Consumer Products

- NR -

Finance

- Citibank Bhd (AAA) 14,766,932

- United Overseas

Bank Malaysia

(AAA)

- AmBank Bhd

(AA2)

- RHB Bank Bhd

(AA2)

- NR

Industrials

- NR

Telecommunication

- NR

Others

- NR

669,056

500,042

500,040

-

-

-

-

16,436,070


RM

-

-

-

-

-

4,314,807

-

4,314,807

Amount due from

Manager

RM

-

- 7,781,299

-

-

-

-

-

-

-

-

7,781,299


RM

Total

RM

34,687 34,687

- 14,766,932

-

-

699,056

500,042

- 500,040

67,835 4,382,642

107,535

104,927

314,984

107,535

104,927

- 7,781,299

28,847,160

32

3.



(CONTINUED)

(c) 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 payments and cancellations of the units by unit holders. Liquid assets comprise bank balance, deposits with licensed financial institutions and other instruments, which are capable of being converted into cash within 7 business days.

Generally, all investments are subject to a certain degree of liquidity risk depending on the nature of the investment instruments, market, sector and other factors. For the purpose of the Fund, the fund Manager will attempt to balance the entire portfolio by investing in a mix of assets with satisfactory trading volume and those that occasionally could encounter poor liquidity. This is expected to reduce the risks for the entire portfolio without limiting the Fund’s growth potentials.

The table below summarises the Fund’s financial liabilities into relevant maturity groupings based on the remaining period as at the statement of financial position date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows.

Between 1

2015






Contractual undiscounted cash

flows

Less than 1 month

RM

148,152,222

11,579,716

3,020,666

134,252

-

162,886,856 month to

1 year

RM

Total

RM

- 148,152,222

- 11,579,716

- 3,020,666

-

27,980

134,252

27,980

27,980 162,914,836

2014






Contractual undiscounted cash

flows

2,345,786

727,379

331,425

14,730

-

3,419,320

- 2,345,786

- 727,379

-

-

27,181

331,425

14,730

27,181

27,181 3,446,501

(d) Non-compliance risk

Non-compliance risk arises when the Manager and others associated with the Fund do not follow the rules set out in the Fund’s constitution, or the law that govern the Fund, or act fraudulently or dishonestly. It also includes the risk of the Manager not complying with internal control procedures.

The non-compliance may expose the Fund to higher risks which may result in a fall in the value of the Fund which in turn may affect its investment goals. However, the risk can be mitigated by the internal controls and compliance monitoring undertaken by the

Manager.

33

3.



(CONTINUED)

(e) Capital risk management

The capital of the Fund is represented by equity consisting of unit holders’ capital and retained earnings. The amount of equity can change significantly on a daily basis as the Fund is subject to daily subscriptions and redemptions at the discretion of unit holders. The Fund’s objective when managing capital is to safeguard the Fund’s ability to continue as a going concern in order to provide returns for unit holders and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the Fund.

(f) Fair value estimation

Fair value is defined as 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 (i.e. an exit price).

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 financial year end date.

The Fund utilises the last traded market price for financial assets where the last market traded price falls within the bid-ask spread. In circumstances where the last traded market price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread that is most representative of the fair value.

An active market is a market in which transactions for the asset or liability 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

Fair value hierarchy

(i) The table below analyses financial instruments carried at fair value. The different levels have been defined as follows: by using valuation techniques.

•

•

•

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 categorized 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.

34

3.



(CONTINUED)

(f) Fair value estimation (continued)

Fair value hierarchy(continued)

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.

2015

Financial assets at fair value

Level 1

RM

through profit or loss:

- Quoted securities 2,050,032,052

Level 2

RM

-

Level 3

RM

-

Total

RM

2,050,032,052

2014

Financial assets at fair value

through profit or loss:

- Quoted securities 211,346,163 - - 211,346,163

Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed quoted securities. The Fund does not adjust the quoted prices for these instruments.

The Fund’s policies on valuation of these financial assets are stated in Note

2(b).

(ii) The carrying values of cash and cash equivalents, amount due from stockbrokers, amount due from Manager, dividends receivable and all current liabilities are a reasonable approximation of their fair values due to their short term nature.

35

4.

5.


MANAGEMENT FEE

In accordance with the Deeds, the Manager is entitled to a maximum management fee of up to 3.00% per annum, calculated daily based on the NAV of the Fund.

For the financial year ended 31 March 2015, the management fee is recognised at a rate of

1.80% per annum (2014: 1.80% per annum).

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

TRUSTEE’S AND CUSTODIAN FEES

In accordance with the Deeds, the Trustee is entitled to a maximum fee of 0.08% per annum, calculated daily based on the NAV of the Fund. The trustee’s fee includes local custodian fee but excludes the foreign sub0custodian fee (if any).

The foreign sub-custodian fee is dependent on the country invested and is charged monthly in arrears.

For the financial year ended 31 March 2015, the Trustee’s fee is recognised at a rate of 0.08% per annum (2014: 0.08% per annum) while the foreign custodian fee is recognised at

RM318,676.

There will be no further liability to the Trustee and custodian in respect of Trustee’s and custodian fees other than the amount recognised above.

6. TAXATION

Tax charged for the financial year:

- Current taxation - foreign

- (Over)/Under provision in prior financial year

2015

RM

2,613,427

(29,353)

2,584,074

2014

RM

336,694

16,970

353,664

A numerical reconciliation between the profit before taxation multiplied by the Malaysian statutory income tax rate and tax expense of the Fund is as follows:

2015 2014

RM

214,692,316

RM

17,803,411 Profit before taxation

Taxation 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

Effect of foreign tax on foreign taxable income

(Over)/Under provision in prior financial year

53,673,079

(60,314,568)

3,042,252

3,599,237

2,613,427

(29,353)

4,450,853

(6,082,424)

777,164

854,407

336,694

16,970

Taxation 2,584,074 353,664

36


7. DISTRIBUTION

Distribution to unit holders is derived from the following sources:

Dividend income

Interest income

Net realised gain on disposal of investments

Less:

Expenses

Taxation

Net distribution amount

2015

RM

-

-

-

-

-

-

-

2014

RM

1,781,959

53,387

6,512,739

8,348,085

(96,885)

(112,716)

8,138,484

Distribution on 6 March 2014

Gross distribution per unit (sen)

Net distribution per unit (sen)

-

-

1.350

1.332

Gross distribution is derived using total income less total expenses. Net distribution above is sourced from current financial year’s realised income.

Gross distribution per unit is derived from gross realised income less expenses, divided by the number of units in circulation. Net distribution per unit is derived from gross realised income less expenses and taxation, divided by the number of units in circulation.

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

2015

RM

2014

RM

Designated at fair value through profit or loss at inception:

- Quoted securities - Local

- Quoted securities - Foreign

-

2,050,032,052

2,050,032,052

20,656,119

190,690,044

211,346,163

Net gain on financial assets at fair value through

profit or loss:

- Realised gain on disposals

- Unrealised fair value gain/(loss) 146,378,472

229,393,807

83,015,335 26,139,727

(6,348,431)

19,791,296

37


8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)

Name of counter Quantity

Aggregate

cost

Market

value

Percentage

of NAV

Units RM RM %

2015

QUOTED SECURITIES -

FOREIGN

AUSTRALIA

Finance

Centuria Metropolitan

REIT

Stockland Corporation

Ltd

1,550,000

3,936,697

8,945,360

51,359,609

9,639,357

49,850,394

5,486,697 60,304,969 59,489,751

0.43

2.22

2.65

Industrials

Amcor Ltd

Boral Ltd

Transurban Group

Health Care

Ramsay Health Care Ltd

1,264,681 43,222,696 49,965,725

2,323,172 43,170,037 41,708,650

1,681,173

5,269,026

211,320

40,846,900

127,239,633

38,986,276

45,084,722

136,759,097

39,984,567

2.23

1.86

2.01

6.10

1.78

Telecommunications

Telstra Corp Ltd

Oil & Gas

Caltex Australia Ltd

TOTAL AUSTRALIA

CHINA

Finance

China Life Insurance Co.

Ltd

Industrial and

Commercial

Bank of China Ltd

Industrials

Shenzhen Expressway

Co. Ltd

Zhejiang Expressway

Co. Ltd

2,778,717

487,606

14,233,366

4,524,000

25,318,000

29,842,000

6,010,000

11,128,000

46,197,617

48,848,129

321,576,624

63,105,065

63,956,167

127,061,232

9,962,042

44,610,318

49,339,843

47,955,709

333,528,967

73,339,130

69,151,053

142,490,183

17,390,837

54,624,014

3.27

3.09

6.36

0.78

2.44

2.20

2.14

14.87

Oil & Gas

China Petroleum &

Chemical

Ltd

17,138,000 54,572,360 72,014,851

21,266,000 61,937,802 62,653,358

3.22

2.80

38



Name of counter

2015 (CONTINUED)


Quantity

Units

Aggregate

cost

RM

Market Percentage

value of NAV

RM %

FOREIGN (CONTINUED)

CHINA (CONTINUED)


China Telecom Corp Ltd 21,650,000 50,112,285 51,379,239 2.29

Utilities

Beijing Jingneng Clean

Energy Co. Ltd - H**

TOTAL CHINA

HONG KONG

Consumer Products

Brilliance China

Automotive Holdings Ltd

Hengan International

Group Co. Ltd

MTR Corp Ltd

13,466,000

2,052,000

736,500

1,972,000

4,760,500

21,388,870

14,713,941

30,115,763

25,723,496

70,553,200

21,090,449

103,362,000 315,072,549 349,628,080

14,638,660

32,741,292

34,746,147

82,126,099

0.94

15.61

0.65

1.46

1.55

3.66

Finance

Sun Hung Kai Properties

Ltd

Health Care

Phoenix Healthcare

Group Co.

1,363,000 72,696,850 77,839,567 3.47

2,025,000 10,279,745 13,266,382 0.59

Industrials

SITC International

Holdings Co. Ltd

Oil & Gas

China Gas Holdings Ltd


China Mobile Ltd

Hutchison

Telecomunications

Holdings Ltd

PCCW Ltd

1,514,000

4,958,000

2,142,500

10,226,000

8,060,000

2,266,346

26,609,841

91,903,669

12,485,393

14,883,363

2,956,804

30,066,552

103,532,028

17,529,665

18,204,115

20,428,500 119,272,425 139,265,808

0.13

1.34

4.62

0.78

0.81

6.21

39



HONG KONG

(CONTINUED)


Name of counter



Quantity

Units

Aggregate

cost

RM


value of NAV

RM %

Utilities

Cheung Kong

Infrastructure Holdings

Ltd 393,000 11,956,070 12,507,372 0.56

China Resources Gas

Group Ltd

China Resources Power

Holding Co. Ltd

5,510,000

4,610,000

50,107,574

42,478,210

63,407,703

42,836,812

2.82

1.92

TOTAL HONG KONG

10,513,000

45,562,000

104,541,854 118,751,887

406,220,261 464,273,099

5.30

20.70

INDIA

Finance

Housing Development

Finance Corp Ltd

Industrials

IRB Infrastructure

DevelopersLtd

Tata Motors Ltd

Utilities

Power Grid Corp of India

Ltd

TOTAL INDIA

627,045

2,068,871

273,978

2,342,849

745,002

3,714,896

48,773,695

28,751,234

9,128,032

37,879,266

48,922,684

29,959,445

8,939,042

38,898,487

2.18

1.34

0.40

1.74

6,966,607

93,619,568

38,150,238

6,416,944

94,238,115

43,017,890

0.29

4.21

1.92

TOTAL INDONESIA 72,239,800

29,505,057

33,955,906

32,922,945

35,923,071

101,611,201 111,863,906

1.47

1.60

4.99

40



Name of counter



Quantity

Aggregate

cost

Units RM


value of NAV

RM %


PHILIPPINES

Finance

Metropolitan Bank & Trust

Co. 5,244,531 36,410,857 42,309,651 1.89

Utilities

Metro Pacific Investments

Corp

TOTAL PHILIPPINES

SINGAPORE


ComfortDelGro Corp Ltd

Finance

Capitacommercial Trust

Capitamall Trust

City Developments Ltd

DBS Group Holdings Ltd

Keppel DC REIT

65,490,700 27,939,761 26,159,671

70,735,231 64,350,618 68,469,322

9,585,900 65,167,804 74,577,152

9,107,700

8,505,000

785,200

1,162,200

8,184,000

27,744,100 188,024,409

39,451,985

45,904,922

21,344,986

61,282,676

20,039,840

43,274,143

50,370,012

21,264,410

63,699,159

22,692,268

201,299,992

1.17

3.06

3.33


Singapore

Telecommunications

Ltd

TOTAL SINGAPORE

SOUTH KOREA

Basic Materials

LG Chem Ltd

Finance

Samsung Securities Co Ltd

1,764,400 19,877,981 20,803,970

39,094,400 273,070,194 296,681,114

53,351 36,720,466 40,214,799

285,740 45,264,743 49,557,488

1.93

2.25

0.95

2.84

1.01

8.98

0.93

13.24

1.79

2.21


SK Telecom Co. Ltd

TOTAL SOUTH KOREA

54,098 50,606,409 49,168,008

393,189 132,591,618 138,940,295

2.19

6.19

41



Name of counter


Quantity

Units

Aggregate

cost

RM

Market

value

RM

Percentage

of NAV

%



TAIWAN


President Chain Store

Corporation

Technology

Taiwan

Semiconductor

Manufacturing Co.

Ltd


Taiwan Mobile Co. Ltd

937,000

2,185,000

3,158,000

23,654,002

37,787,282

34,475,622

26,082,425

37,577,849

40,873,678

1.16

1.68

1.82

TOTAL TAIWAN

THAILAND


Bangkok Airways Co

Ltd - NVDR*

Oil & Gas

PTT Public Company

Ltd - NVDR*

TOTAL THAILAND

6,280,000

17,016,900

1,323,300

18,340,200

95,916,906

39,858,460

48,727,977

88,586,437

104,533,952

39,276,877

48,598,325

87,875,202

4.66

1.75

2.20

3.95

TOTAL QUOTED

SECURITIES -

FOREIGN

ACCUMULATED

UNREALISED GAIN

ON QUOTED

SECURITIES AT

FAIR VALUE

THROUGH PROFIT

OR LOSS

TOTAL FINANCIAL

ASSETS AT FAIR

VALUE THROUGH

PROFIT OR LOSS

373,955,082 1,892,615,976

157,416,076

2,050,032,052

2,050,032,052 91.48

42



* NVDR, or non-voting depository receipt, is a trading instrument issued by Thai NVDR

Company Limited, a subsidiary wholly owned by the Stock Exchange of Thailand (“SET”). It is a valid security as specified by the United States Securities and Exchange Commission

(“SEC”) and is automatically regarded as a listed security by the SET. The underlying security is a listed security in the SET.

** H shares refer to the shares of companies incorporated in the Chinese mainland that are listed on the Hong Kong Stock Exchange or other foreign exchange. H shares are still regulated by Chinese law, but they are denominated in Hong Kong dollars and trade the same as other equities on the Hong Kong exchange.

Name of counter

2014

QUOTED SECURITIES

- LOCAL

Finance

RHB Capital Bhd

Quantity

Aggregate

cost

units RM

512,317 4,175,607


value of NAV

RM %

4,313,709 1.82


Digi.com Bhd

Trading/Services

Tenaga Nasional Bhd

TOTAL QUOTED

SECURITIES -

LOCAL

1,961,800

482,300

2,956,417

9,955,768 10,574,102

4,548,571 5,768,308

18,679,946 20,656,119

4.47

2.43

8.72

43



Aggregate Market Percentage

Name of counter



FOREIGN

Quantity

Units

cost

RM

value

RM

of NAV

%

AUSTRALIA

Industrials

JB Hi-Fi Ltd

Orora Ltd

30,000

965,376

995,376

1,709,531

3,762,970

5,472,501

1,693,631

3,996,645

5,690,276

0.72

1.69

2.41


Telstra Corp Ltd

Trading/Services

301,232 4,428,873 4,607,456 1.95

APA Group

TOTAL AUSTRALIA

194,861 3,715,420

1,491,469 13,616,794

3,772,526

14,070,258

1.59

5.95

CHINA

Finance

China Construction Bank

Ltd

Industrials

Guangshen Railway Co.

2,431,000

415,000

2,846,000

3,494,000

4,326,000

4,758,000

5,442,324

3,662,469

9,104,793

5,257,582

4,870,510

6,384,530

5,553,379

3,832,261

9,385,640

4,821,357

5,004,858

7,025,934

2.35

1.62

3.97

2.04

2.11

2.97

Co. Ltd

Oil & Gas

PetroChina Co. Ltd

TOTAL CHINA

12,578,000 16,512,622

1,556,000

16,980,000

5,383,532

31,000,947

16,852,149

5,531,448

31,769,237

7.12

2.34

13.43

44



Name of counter



Quantity

Aggregate

cost

Units RM


value of NAV

RM %

- FOREIGN

(CONTINUED)

HONG KONG


China Mengniu Dairy Co.

Ltd

Hengan International

Group Co. Ltd

Nexteer Automotive

Group Ltd

Want Want China

Holdings Ltd

Xinyi Glass Holdings Ltd

18,000

72,000

2,006,000

484,000

1,912,000

293,697

2,526,135

3,983,995

2,202,847

5,154,373

294,196

2,433,834

5,122,620

2,357,906

5,075,628

0.12

1.03

2.16

1.00

2.14

Health Care

Phoenix Healthcare

Group Co.

Ltd

Industrials

Sinotrans Ltd

SITC International

Holdings Co. Ltd


China Unicom (Hong

Kong) Ltd

Hutchison

Telecomunications Hong

Kong Holdings Ltd

PCCW Ltd

Utilities

China Resources Power

Holdings Co. Ltd

TOTAL HONG KONG

INDIA

Finance

Axis Bank Ltd

ICICI Bank Ltd

4,492,000

1,114,500

5,000,000

553,000

5,553,000

1,154,000

4,064,000

3,330,000

8,548,000

1,068,000

20,775,500

60,139

65,580

14,161,047

5,754,963

4,786,049

799,870

5,585,919

4,956,522

4,629,457

4,717,569

14,303,548

7,934,553

47,740,030

4,306,643

4,281,679

15,284,184

5,288,855

8,203,650

870,100

9,073,750

4,951,976

4,411,090

5,449,622

14,812,688

9,076,014

53,535,491

4,795,682

4,458,111

6.45

2.23

0.37

3.83

2.09

1.86

2.30

6.25

3.83

22.59

2.03

1.88

3.46

TOTAL INDIA

125,719

125,719

8,588,322

8,588,322

9,253,793

9,253,793

3.91

3.91

45


TOTAL INDONESIA

PHILIPPINES

Finance

Rockwell Land Corp

Properties

Filinvest Land Inc.


Philippine Long Distance

Telephone Co.

TOTAL PHILIPPINES

361,100

10,520,000

28,764,000

29,475

39,313,475

SINGAPORE


Osim International Ltd 670,000

Finance

Capita commercial Trust 1,283,000

Mapletree Commercial

Trust 1,051,000

2,334,000

Health Care

Raffles Medical Group

Ltd

Industrials

Singapore Post Ltd


M1 Ltd

481,000

1,598,000

701,000

TOTAL SINGAPORE 5,784,000

4,831,619

2,580,535

4,217,174

5,874,164

12,671,873

4,226,011

4,763,953

3,245,632

8,009,585

4,032,829

5,392,052

4,982,477

26,642,954

5,121,387

1,301,955

3,015,388

5,857,979

10,175,322

4,491,998

4,931,943

3,319,155

8,251,098

3,996,824

5,625,753

6,296,692

28,662,365

46

1.40

3.48

1.69

2.38

2.66

12.11

2.47

4.29

1.90

2.08

2.16

0.55

1.27



Name of counter



Quantity

Aggregate

cost

Units RM


value of NAV

RM %

- FOREIGN

(CONTINUED)

SOUTH KOREA


Amorepacific Corp 1,733 6,489,441 6,691,363 2.83

2.06

Finance

Hana Financial Group Inc.

Shinhan Financial Group

Co. Ltd

40,820 5,079,797 4,865,955

Industrials

Daewoo International Corp


36,570

77,390 10,107,071 10,133,015

72,540

9,570

5,027,274 5,267,060

8,245,873

5,873,898

8,602,684

6,319,819

161,233 30,716,283 31,746,881

SK Telecom Co. Ltd

TOTAL SOUTH KOREA

TAIWAN


President Chain Store

Corp

TOTAL TAIWAN

276,000

276,000

5,819,791 6,355,310

5,819,791 6,355,310

TOTAL QUOTED

SECURITIES - FOREIGN 85,268,496 181,628,613 190,690,044

2.22

4.28

3.63

2.67

13.41

2.69

2.69

80.54

TOTAL QUOTED

SECURITIES

ACCUMULATED

UNREALISED GAIN ON


AT FAIR VALUE

THROUGH PROFIT OR

LOSS

TOTAL QUOTED

SECURITIES AT FAIR

VALUE THROUGH

PROFIT OR LOSS

88,224,913 200,308,559

11,037,604

211,346,163

211,346,163 89.26

47


CASH AND CASH EQUIVALENTS 9.

Deposits with licensed financial institutions

Bank balances

2015

RM

21,166,236

169,958,217

191,124,453

The weighted average effective interest rate per annum is as follows:

2014

RM

1,669,138

14,766,932

16,436,070

2015 2014

Deposits with licensed financial institutions

% %

3.32 3.03

Deposits with licensed financial institutions of the Fund have an average maturity of 1 day

(2014: 1 day).

10. NUMBER OF UNITS IN CIRCULATION (UNITS)

At the beginning of the financial year

Add: Creation of units from applications

Add: Creation of units from distribution

Less: Cancellation of units during the financial year

At the end of the financial year

2015

No. of units

703,798,076

8,026,108,265

-

2014

No. of units

516,496,130

634,977,985

10,538,452

(1,338,212,012) (458,214,491)

7,391,694,329 703,798,076

11. MANAGEMENT EXPENSE RATIO (“MER”)

2015

%

2014

%

MER 1.92

═════════

MER is derived based on the following calculation:

MER = (A + B + C + D + E) x 100

F

A

B

C

D

E

F

=

=

=

=

=

=

Management fee

Trustee’s and custodian fees

Audit fee

Tax agent’s fee

Other expenses

Average NAV of the Fund calculation on a daily basis

2.01

═════════

The average NAV of the Fund for the financial year calculated on a daily basis is

RM803,655,103 (2014: RM189,593,463).

48


12. PORTFOLIO TURNOVER RATIO (“PTR”)

PTR (times)

PTR is derived from the following calculation:

2015

2.12

═════════

2014

1.99

═════════

(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 = RM2,552,758,502 (2014: RM408,633,867) total disposal for the financial year = RM860,451,081 (2014: RM346,402,862)

13. UNITS HELD BY THE MANAGER, PARTIES RELATED TO THE MANAGER, AND

SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES

The related parties and their relationship with the Fund are as follows:

Relationship Related parties

CIMB-Principal Asset Management Berhad

CIMB Group Sdn Berhad

CIMB Group Holdings Berhad (“CIMB”)

CIMB Bank Berhad

CIMB-GK Securities Pte Ltd - SG

CIMB Securities Ltd, Singapore

CIMB Investment Bank Berhad

CIMB Securities Ltd, Taiwan

CIMB Securities India Pvt Ltd

CIMB Securities, Korea

Subsidiaries and associates of CIMB as

disclosed in its financial statements

The Manager

Holding company of the Manager

Ultimate holding company of the Manager

Fellow subsidiary of the Manager







Subsidiary and associated companies

of the ultimate holding company of

the Manager

49


13. UNITS HELD BY THE MANAGER, PARTIES RELATED TO THE MANAGER, AND

SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

Units held by the Manager and parties related to the Manager

2015 2014

No. of units RM No. of units RM

Manager

CIMB-Principal Asset

Management Berhad 335,343

══════════

101,642

══════════

231,779

══════════

77,970

══════════

In the opinion of the Manager, the above units were transacted at the prevailing market price.

The units are held beneficially by the Manager for booking purposes. Other than the above, there were no units held by the Directors or parties related to the Manager.

In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions and balances. The Manager is of the opinion that all transactions with the related companies have been entered into in the normal course of business at agreed terms between the related parties.

Significant related party transaction

2015

RM

2014

RM

Interest income from deposits with licensed

financial institution:

- CIMB Bank Berhad

Significant related party balances

Deposits with licensed financial institutions:

- CIMB Bank Berhad

116,153

5,000,452

12,573

-

There were no related party balances at the end of each financial year.

50


14. TRANSACTIONS WITH BROKERS/DEALERS

Details of transactions with the top 10 brokers/dealers for the financial year ended 31 March

2015 are as follows:

Brokers/Dealers

RHB Bank Berhad

Malayan Banking Berhad

CIMB Bank Berhad #

Hong Leong Bank Berhad

Macquarie Sec Singapore

Value of trades

RM

1,126,271,000

810,675,000

786,979,000

Citigroup Global Markets Ltd 521,239,077

UBS Securities Asia Ltd SG 441,820,609

425,882,000

393,175,159

JP Morgan Sec Singapore

CLSA Ltd HK

CIMB-GK Securities Pte

Ltd - SG #

315,790,931

274,077,762

Others #

271,763,489

1,423,007,889

6,790,681,916

Percentage of total trades

%

16.59

11.94

11.59

Brokerage fees

RM

-

-

-

7.68 1,180,512

6.51 1,195,730

6.27 -

5.79 1,034,517

4.65

4.04

742,997

717,756

4.00 616,202

20.94 3,322,305

100.00 8,810,019

Percentage of brokerage fees

%

13.40

13.57

-

11.74

-

-

-

8.43

8.15

6.99

37.72

100.00

Details of transactions with the top 10 brokers/dealers for the financial year ended 31 March

2014 are as follows:

Brokers/Dealers

Hong Leong Bank Berhad

RHB Bank Berhad

Affin Bank Berhad

CIMB Bank Berhad #

UBS Securities Asia Ltd SG

JP Morgan Sec Singapore

Value of trades

RM

404,993,000

333,674,000

201,214,000

79,032,000

77,197,934

73,292,762

Percentage of total trades

%

21.48

17.70

10.67

4.19

4.09

3.89

Brokerage fees

RM

-

-

-

-

218,797

207,701

Percentage of brokerage fees

%

-

-

-

-

10.49

9.96

CIMB-GK Securities Pte

Ltd - SG #

Citigroup Global Markets Ltd

China International Cap Co.

Macquarie Sec Singapore

Others #

63,616,289

60,220,989

55,797,250

55,172,436

481,119,170

1,885,329,830

3.37

3.19

2.96

2.93

221,693

143,220

139,443

152,584

25.53

1,001,528

100.00 2,084,966

10.63

6.87

6.69

7.32

48.04

100.00

# Included in the transactions are trades conducted with CIMB Bank Berhad, CIMB-GK

Securities Pte Ltd - SG, CIMB Investment Bank Berhad and CIMB Securities Ltd, Korea fellow subsidiaries of the Manager amounting to RM786,979,000 (2014: RM79,032,000),

RM271,763,489 (2014: RM63,616,289), RM44,029,234 (2014: RM10,471,734), and

RM4,398,891 (2014:Nil) respectively. The Manager is of the opinion that all transactions with the related companies have been entered into in the normal course of business at agreed terms between the related parties.

51


15.

SEGMENT INFORMATION

The internal reporting provided to the chief operating decision-maker for the Fund’s assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of MFRS and IFRS. The chief operating decision-maker is responsible for the performance of the Fund and considers the business to have a single operating segment located in Malaysia. Asset allocation decisions are based on a single, integrated investment strategy and the Fund’s performance is evaluated on an overall basis.

The investment objective of the Fund is to provide regular income by investing primarily in the

Asia Pacific ex Japan region and at the same time aims to achieve capital appreciation over the medium to long term. 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 income and dividend income earned from investments and gains on the appreciation in the value of investments, which are derived from

Ringgit-denominated deposits with licensed financial institutions in Malaysia, quoted securities listed on the Bursa Securities, Malaysia, and foreign equities of companies domiciled in, listed in, and/or have significant operations in the Asia Pacific ex-Japan

There were no changes in reportable operating segment during the financial year.

16. APPROVAL OF FINANCIAL STATEMENTS

The financial statements have been approved for issue by the Manager on 29 May 2015.

52


DIRECTORY

Head office of the Manager

CIMB-Principal Asset Management Berhad (Company No.: 304078-K)

10th Floor, Bangunan CIMB,

Jalan Semantan,

Damansara Heights,

50490 Kuala Lumpir, MALAYSIA.

Postal address

CIMB-Principal Asset Management Berhad (Company No.: 304078-K)

P.O.Box 10571,

50718 Kuala Lumpur, MALAYSIA.

Website www.cimb-principal.com.my

E-mail address service@cimb-principal.com.my

General investment enquiries

(03) 7718 3100

Trustee for the CIMB-Principal Asia Pacific Dynamic Income Fund

Universal Trustee (Malaysia) Berhad (Company No.:17540-D)

No. 1 Jalan Ampang (3rd Floor),

50450 Kuala Lumpur, MALAYSIA.

Auditors of the Trusts and of the Manager

PricewaterhouseCoopers (Company No. AF: 1146)

Level 10, 1 Sentral,

Jalan Travers, Kuala Lumpur Sentral,

PO Box 10192, 50706 Kuala Lumpur, MALAYSIA.

53


LIST OF CWA (an agency force of CIMB-Principal) OFFICES

ADDRESS

CWA BRANCHES

Central Region

•

46, 2 nd

Floor, Jalan SS 21/39 Damansara Utama,

47400, Petaling Jaya, Selangor.

•

No 13B, 2nd Floor, Jalan Mamanda 7/1,

Off Jalan Ampang, 68000 Ampang, Selangor.

•

169-2, Jalan Radin Bagus, Bandar Baru Sri Petaling,

57000 Kuala Lumpur.

Northern Region

•

No 5, Jalan Todak 4, Bandar Sunway,

Seberang Jaya, 13700 Perai, Penang.

•

30A, First Floor, Persiaran Greentown 1,

Greentown Business Centre, 30450 Ipoh, Perak.

East Coast Region

•

Ground Floor, No 298-B,

Jalan Tok Hakim,

15000 Kota Bharu, Kelantan.

TELEPHONE

03-77122888

03-42702970

03-90592333

04-3702155

04-3702156

05-2439001

05-2439002

09-7471172

09-7471190

•

No. 44 & 44A, Jalan Putra Square 6,

Putra Square,

25000 Kuantan, Pahang.

Southern Region

•

23 & 23A Jalan Harimau Tarum,

Taman Century, 80250 Johor Bahru, Johor.

•

21, Jalan Melaka Raya 24,Taman Melaka Raya, 75000 Melaka.

East Malaysia Region

•

No 1 Jalan Pasar Baru, Kampung Air,

88000 Kota Kinabalu, Sabah.

•

5B, Lot 414, Section 10, KTLD Jalan Rubber,

93400 Kuching, Sarawak.

•

1 st

and 2 nd

Floor, Lot 1092, Jalan Merpati,

98000 Miri, Sarawak.

09-5134410

07-3341748

06-2811111

088-239951

088-239952

082-259777

085-432525

54


LIST OF CWA (an agency force of CIMB-Principal) OFFICES (CONTINUED)

ADDRESS

CWA SALES OFFICES

Central Region

•

32-3, 3rd Floor Jalan 1/27F, KL Satellite Centre (KLSC),

Wangsa Maju, Section 5, 53300 Kuala Lumpur.

•

Unit B-3A-1, Setiawangsa Business Suites, Jalan Setiawangsa 11,

Taman Setiawangsa, 54200, Kuala Lumpur.

•

J-06-01, Level 6, Block J, Solaris Mont Kiara,

Jalan Solaris, 50480 Kuala Lumpur.

•

No 41B, 43B, Jalan Wan Kadir 2, Taman Tun Dr Ismail,

60000, Kuala Lumpur.

•

A-2-1, Block A, 8 Jalan PJU 1A/20A,

Dataran Ara Damansara, 47301 Petaling Jaya, Selangor.

•

Lot C-615 & Lot C-616, Level 6, Block C, Kelana Square,

17, Jalan SS7/26, Kelana Jaya, 47301 Petaling Jaya, Selangor.

•

A-2-3, Block A, 8 Jalan PJU 1A/20A,

Dataran Ara Damansara, 47301 Petaling Jaya, Selangor.

•

No 3A, Jalan Hentian 3, Pusat Hentian Kajang,

43000, Kajang, Selangor.

•

2-6A Jalan PJU 8/3A, Bandar Damansara Perdana,

47820 Petaling Jaya, Selangor.

•

The Strand, 32A-3, Jalan PJU5/20D, Kota Damansara,


•

Lot No 35-2, 2 nd Floor, Jalan Sepah Puteri 5/1B, Pusat Dagangan Seri Utama,

PJU5, Kota Damansara, 47410, Selangor.

•

1-91-2, Block I, Jalan Teknologi 3/9, Kota Damansara,


•

47A, Tingkat 1, Jalan Badminton 13/29, Seksyen 13,

Shah Alam, 40100, Selangor.

•

98A, Jalan SS21/39, Damansara Utama,


•

D10-08-G & D10-08-1, Pusat Perdagangan Dana 1, Jalan PJU1A/46,


TELEPHONE

03-41422911

03-42566277

03-62040113

03-77241789

03-78430506

03-78806893

03-78430503

03-87345695

03-77256320

03-61428382

03-61403046

03-61407275

03-55232693

03-77250825

03-78311267

55



ADDRESS

CWA SALES OFFICES (CONTINUED)

Central Region (Continued)

•

37-2, Jalan Cecawi 6/33, PJU5, Kota Damansara,


•

B-1-22 & B-2-22 & B-2-21 Block B 10 Boulevard, Jalan Cempaka,

Sungai Kayu Ara, 47400 Petaling Jaya, Selangor.

•

No. 6-2, Jalan Dagang 1/1A, Taman Dagang,

68000 Ampang, Selangor.

•

No 35B-2 (2 nd

Floor), Jalan Keluli Am7/Am, Pusat Perniagaan Bukit Raja,

40000 Seksyen 7, Shah Alam, Selangor.

•

No 65-2, Jalan Nelayan A, 19/A, Pusat Daerah Seksyen 19,

40300 Shah Alam, Selangor.

TELEPHONE

03-61422970

03-77223895

03-42511129

03-33414978

03-54800296

•

No B-3A-23, Merchant Square, Jalan Tropicana Selatan 1,

Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor.

•

Block E-1-03A & E-2-03A, Jalan SS6/20A, Dataran Glomac,

47301 Kelana Jaya, Selangor.

•

No 12-01 D’Bayu Business Center, Jalan Serambi U8/24

Bukit Jelutong, 40150 Shah Alam, Selangor.

•

No 41B 3B Curve Business Park, Medan Pusat Bandar 2D,

Seksyen 9, 43650 Bandar Baru Bangi, Selangor.

•

19-1 Jalan Adenium 2G/9, Adenium Business Center,

Bukit Beruntung, 48300 Rawang, Selangor.

East Coast Region

•

Lot 252, No 73, Tingkat 1, Jalan Besar Pusat Niaga Paka,

23100, Paka, Terengganu.

•

PT 10725, Ground Floor, Jalan Kubang Kurus, Taman Cukai Utama Fasa 4,

24000 Kemaman,Terengganu.

•

No. 50A, Tingkat 1, Malay Town

25200 Kuantan, Pahang.

Southern Region

•

No 38-01, Jalan Serangkai 18, Taman Bukit Dahlia,

81700 Pasir Gudang, Johor.

•

24-1 Jalan Padi Emas 4/1 Pusat Bandar Tampoi, Johor Bahru,

81200 Johor.

03-78874408

03-78807082

03-61428382

03-89264155

03-60217385

09-8278001

09-8589911

019-2366602

07-2326976

07-2326976

56



ADDRESS

CWA SALES OFFICES (CONTINUED)

Southern Region (Continued)

•

No 55-2, 57-2, 59-2, Jalan TU 49A, Taman Tasik Utama,

Ayer Keroh, 75450 Melaka.

•

No 18-1 S2 B18, Biz Avenue Seremban 2, 70300 Seremban,

Negeri Sembilan.

•

16-01 Jalan Padi Emas 1/5, UDA Business Centre,

81200 Johor Bharu, Johor.

East Malaysia Region

•

15A, Jalan Ruby, 96000 Sibu, Sarawak.

•

Shop Lot No.2, Block 49, of Parent Lot 2646, Park City Commerce Square,

Jalan Kambar, Off Jalan Tun Ahmad Zaidi, 97000 Bintulu, Sarawak.

TELEPHONE

06-2533289

06-6015749

07-3009350

084-325515

012-2172269

57

CIMB-PRINCIPAL ASIA PACIFIC DYNAMIC INCOME FUND

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