Investments that stand the test of time

Transcription

1 UNAUDITED INTERIM REPORT FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 OCTOBER 2018 Investments that stand the test of time FORWARD Your Investments

2 UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 OCTOBER 2018

3 CONTENTS PAGE(S) INVESTORS' LETTER 1 MANAGER'S REPORT 2-7 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 8 TRUSTEE S REPORT 9 UNAUDITED STATEMENT OF COMPREHENSIVE INCOME 10 UNAUDITED STATEMENT OF FINANCIAL POSITION 11 UNAUDITED STATEMENT OF CHANGES IN EQUITY 12 UNAUDITED STATEMENT OF CASH FLOWS 13 NOTES TO THE FINANCIAL STATEMENTS DIRECTORY 46

4 INVESTORS' LETTER Dear Valued Investors, Thank you for your continued support and for the confidence that you have placed in us. We are pleased to share that CIMB-Principal Asset Management Berhad ( CIMB-Principal ) Malaysia has achieved RM54.02 billion in Asset under Management ( AUM ) as at September The Edge Thomson Reuters Lipper Malaysia Fund Awards 2018 Best Fund Over 5 Years, Equity Global - Malaysia : CIMB-Principal Global Titans Fund Best Fund Over 5 Years, Equity Asia Pacific ex Japan - Malaysia : CIMB-Principal Asian Equity Fund Best Fund Over 5 Years, Equity Asia Pacific ex Japan - Malaysia : CIMB Islamic Asia Pacific Equity Fund Best Fund Over 5 Years, Equity Malaysia Diversified - Malaysia : CIMB-Principal Equity Growth & Income Fund Best Fund Over 5 Years, Mixed Asset MYR Bal - Malaysia : CIMB-Principal Income Plus Balanced Fund Best Fund Over 3 Years, Equity Global - Malaysia : CIMB-Principal Global Titans Fund In addition, we received recognition from Fundsupermart.com for Fund House of the Year award and Recommended Unit Trust 2018/2019 awards for the following funds: CIMB-Principal Global Titans Fund CIMB-Principal Asia Pacific Dynamic Income Fund CIMB Islamic Asia Pacific Equity Fund CIMB-Principal Greater China Equity Fund CIMB-Principal PRS Plus Conservative CIMB-Principal PRS Plus Growth Our latest accomplishment is The Asset Triple A Private Banking, Wealth Management, Investment and Exchange-Traded Fund ( ETF ) Awards 2018 where we have been recognized for the Best Wealth Manager in Malaysia. These prestigious awards are a celebration of the trust that you have placed in us and testament to our capability in bringing potential value to your financial goals and needs. We look forward to serving you for many years to come and to the best of our ability. Thank you. Yours faithfully, for CIMB-Principal Asset Management Berhad Munirah Khairuddin Chief Executive Officer 1

5 MANAGER S REPORT FUND OBJECTIVE AND POLICY What is the investment objective of the Fund? The Fund aims to achieve capital appreciation over the medium to long-term through all types of investments that have the potential for above average growth over time. Has the Fund achieved its objective? For the six months financial period under review, the Fund s total return was -8.96% which outperformed the benchmark return by 2%. The Fund has performed in line with its objective. What are the Fund investment policy and principal investment strategy? The Fund may invest between 70% to 98% (both inclusive) of its Net Asset Value ( NAV ) in equities in order to gain long-term capital growth. The Fund may opt to invest in foreign equities up to a maximum of 30% of its NAV. Such foreign equities must be equity securities of companies domiciled in, listed in, and/or have significant operations in Asia 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 ( NYSE ). The threshold for significant operations would be if more than 30% of total group revenue derives from countries in Asia ex Japan. The calculation would be based on the most recent financial reports released by the companies (e.g. interim and annual reports). In line with its objective, the investment policy and strategy of the Fund will be to invest primarily in equities, with a bias towards growth stocks that have the potential to deliver long-term capital appreciation and to a lesser extent focus on dividend yielding stocks that provides income. The Fund may opt to seek investment exposure via CIS that is in line with the Fund s objective, subject to the requirement of the SC Guidelines. To a lesser extent, the Fund invests in liquid assets primarily for the purpose of cash management. The investment management function for the foreign investments of this Fund has been delegated to CIMB-Principal Asset Management (S) Pte. Ltd. ( CIMB-Principal (S) ) with the approval of the SC. CIMB Principal (S) will be responsible for investing and managing these foreign investments in accordance with the investment objective and within the investment restrictions. Fund category/type Equity/Growth How long should you invest for? Recommended between three (3) years and five (5) years or more Indication of short-term risk (low, moderate, high) High When was the Fund launched? 15 May 1991 What was the size of the Fund as at 31 October 2018? RM million ( million units) What is the Fund s benchmark? 70% Financial Times Stock Exchange ( FTSE ) Bursa Malaysia ( FBM ) Top 100 ( FBM100 ) Index + 30% Morgan Stanley Capital International ( MSCI ) All Country ( AC ) Asia ex Japan Index Note: The benchmark is for performance comparison only. The benchmark is customised as such to align it closer to the structure of the portfolio and to reflect the composition of the portfolio in line with the markets they operate in. Investors are cautioned that the risk profile of the Fund is higher than the benchmark. 2

6 FUND OBJECTIVE AND POLICY (CONTINUED) What is the Fund distribution policy? The Manager has the discretion to distribute part or all of the Fund s distributable income. The distribution (if any) may vary from period to period depending on the investment objective and the performance of the Fund. What was the net income distribution for the six months financial period ended 31 October 2018? The Fund distributed a total net income of RM9.60 million to unit holders for the six months financial period ended 31 October As a result, the NAV per unit dropped from RM to RM on 26 July PERFORMANCE DATA Details of portfolio composition of the Fund for the last three unaudited financial periods are as follows: % % % Collective investment schemes Quoted securities - Basic Materials Construction Consumer Products Energy Finance Health Care Industrials Infrastructure Projects Companies ( IPC ) Plantation Properties Real Estate Investment Trusts ( REITs ) Technology Telecommunications Trading/Services Transportation & Logistics Utilities Cash and other net assets Performance details of the Fund for the last three unaudited financial periods are as follows: NAV (RM Million) Units in circulation (Million) NAV per unit (RM) to to to Highest NAV per unit (RM) Lowest NAV per unit (RM) Total return (%) (8.96) Capital growth (%) (14.07) 3.26 (0.02) - Income distribution (%)

7 PERFORMANCE DATA (CONTINUED) to to to Management Expense Ratio ( MER ) (%) Portfolio Turnover Ratio ( PTR ) (times) # * The Fund's MER decreased from at 0.87% to 0.81% during the six months financial period under review compared to the same period last year mainly due to increase in average NAV. # The Fund s PTR increased from 0.27 times to 0.68 times as there were more trading activities amidst increased volatility in the market. Date of distribution Gross/Net distribution per unit (sen) % % % % % Annual total return (6.43) (Launch date: 15 May 1991) 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 period have been extracted from Lipper. MARKET REVIEW (1 MAY 2018 TO 31 OCTOBER 2018) In May 2018, the FBM100 Index succumbed to heavy foreign selling, falling 8.5% or 1, points to a low of 11, points as investors repriced policy risk. Year-to-date ( YTD ), the FBM100 has lost 9.6%. In May 2018, foreigners net sold RM5.6 billion, reversing YTD net foreign flows to RM1.9 billion. The release of the mid-term review of the austere 11 th Malaysia Plan offered no reprieve as investors further locked in gains made due to rising economic risk and uncertainties. Local investors were concerns that the government will unveil new taxes and announce higher fiscal deficits during the 2019 Budget. Telecommunication companies were the largest loser on the back of regulatory risk, while construction sector underperformed on Mass Rapid Transit ( MRT ) Line 2 project cost cut. During the month of October 2018, the Malaysian Ringgit ( MYR ) weakened by 1.1% while the 10- year Malaysian Government Securities ( MGS ) rose by 10 basis points ( bps ) to 4.08%. Brent crude oil fell to USD75 per barrel, down by 9% month-on-month. For the financial period under review, Asian stock markets suffered, declining almost 20% as measured by the MSCI Asia Ex-Japan index. Several reasons could be attributed to the decline. The tightening US monetary policy, the weakening Asia economies and the rising US-China trade tensions were among them. This caused a rise in the US Dollar ( USD ) and negative fund flows as investors sold Asian equities. 4

8 FUND PERFORMANCE 6 months to year to years to years to Since inception to % % % % % Income Capital (14.07) (11.67) (3.94) (3.57) Total Return (8.96) (6.43) Benchmark (10.96) (8.49) Average Total Return N/A (6.43) For the six months financial period under review, the Fund s total return dropped 8.96% which outperformed the benchmark return by 2%. The Fund has performed in line with its objective. 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% Oct-13 Jan-14 CIMB-Principal Equity Growth & Income Fund 70% FBM100 Index + 30% MSCI AC Asia ex Japan Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Changes in NAV Changes % NAV (RM Million) (2.43) NAV/Unit (RM) (11.64) The Fund s NAV decreased by 2.43% while the NAV per unit decreased by 11.64% for the six months financial period under review due to the performance of the underlying investments. 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 period have been extracted from Lipper. Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 5

9 PORTFOLIO STRUCTURE Asset allocation (% of NAV) Collective investment schemes Quoted securities local Quoted securities foreign Cash and other net assets TOTAL Asset allocation on quoted securities and collective investment scheme has decreased from 92.87% as at 31 October 2017 to 90.68% at as 31 October MARKET OUTLOOK The local market is in a consolidation stage with foreign inflow moderating as we enter seasonal holiday months in the western world. Investors are now awaiting fresh catalysts before it resumes its uptrend. Key catalysts: 1) Clarity on the Government s revised budget announcement on 2 November 2018; 2) Short term reprieve from a 90 days pause in increasing US tariffs on China and a potential truce; 3) Resumption of foreign flows into the Malaysian equity market if the Government can shore up confidence post cleaning up and rebalancing the fiscal balance. In the near term, the stock market outlook in Asia is clouded by the unresolved trade war and the deleveraging exercise undertaken by China which is causing the economy to slow and the tightening cycle of the US monetary policy. This is likely to cause more episodes of volatile currencies and other financial assets in Asia which will dampen investor enthusiasm for Asian equities. However, we remain positive on the outlook for the Asian stock markets in the longer run. We expect the trade tensions to be resolved eventually while we also expect the growth in China to be stable and on a better footing once the deleveraging exercise is complete. The Asian stock markets remain attractive due to the numerous growth opportunities available to the investors. Asia remains a fast growing region supported by a young, growing population with increasing urbanisation and innovations. *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 For Malaysia, we continue to reiterate our short-term cautious stance on the domestic market for rest of 2018 and the first quarter of We deemed the recent Budget as progressive for the future but having neutral impact to the market in the short-term. Targeted spending on B40 Group and tax refunds will be positive for consumer sectors while higher fiscal deficits will put the Government with limited safety net in the event of global meltdown. Focus for domestic investors will now turn to global, especially the US Federal Reserve (the Fed ) rate hike and Trade War. On the back of all these uncertainties, we reiterated our capital preservation investment strategy with preference on big cap Government-Linked Companies ( GLCs ) and companies with strong fundamentals and solid cash flow and dividends in sectors such as banks, utilities & renewable energy and industrials. We are also positive on exporters as US-China trade conflicts may benefit technology-related and Electronics Manufacturing Services ( EMS ) players in Malaysia. For Asia, we shall focus on growth companies involved in the information technology, consumer, financial and the materials sectors. However, the Fund may hold more defensive stocks than usual in the near term due to the expected near term volatility. 6

10 UNIT HOLDINGS STATISTICS Breakdown of unit holdings by size as at 31 October 2018 are as follows: Size of unit holdings (units) No of unit holders No of units held % of units held (million) 5,000 and below 62, ,001 to 10,000 1, ,001 to 50,000 2, ,001 to 500, ,001 and above Total 66, 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 period under review, the Manager and the Trustee did not receive any rebates from the brokers or the 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. 7

11 STATEMENT BY MANAGER TO THE UNIT HOLDERS OF We, being the Directors of CIMB-Principal Asset Management Berhad (the Manager ), do hereby state that, in the opinion of the Manager, the accompanying unaudited financial statements set out on pages 10 to 45 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 October 2018 and of its financial performance, changes in equity and cash flows for the financial period then ended in accordance with Malaysian Financial Reporting Standards ( MFRS ) 134 Interim Financial Reporting and International Accounting Standards ( IAS ) 34 Interim Financial Reporting. For and on behalf of the Manager CIMB-Principal Asset Management Berhad (Company No.: K) ALEJANDRO ECHEGORRI Executive Director PEDRO ESTEBAN BORDA Director Kuala Lumpur 14 December

12 TRUSTEE S REPORT TO THE UNIT HOLDERS OF We, AMANAHRAYA TRUSTEES BHD, have acted as Trustee of CIMB-PRINCIPAL EQUITY GROWTH & INCOME FUND for the six months financial period ended 31 October In our opinion, CIMB-PRINCIPAL ASSET MANAGEMENT BERHAD, the Manager, has operated and managed in accordance with the limitations imposed on the investment powers of the management company under the Deeds, securities laws and the applicable Guidelines on Unit Trust Funds for the six months financial period ended 31 October We are of the opinion that: (a) (b) (c) Valuation and pricing is carried out in accordance with the Deeds and any regulatory requirement; Creation and cancellation of units are carried out in accordance with the Deeds and any regulatory requirement; and The distribution of income made by as declared by the Manager is appropriate and reflects the investment objective OF CIMB- PRINCIPAL EQUITY GROWTH & INCOME FUND. Yours faithfully AMANAHRAYA TRUSTEES BERHAD HABSAH BINTI BAKAR Chief Executive Officer Kuala Lumpur, Malaysia 14 December

13 UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 OCTOBER to to Note RM RM INVESTMENT INCOME Dividend income 3,014,641 3,908,187 Interest income from deposits with licensed financial institutions 167, ,051 Net (loss)/gain on financial assets at fair value through profit or loss 9 (16,743,118) 11,677,199 Net foreign exchange gain/(loss) 121,057 (83,251) Other income 4 32,587 24,578 (13,407,762) 15,675,764 EXPENSES Management fee 5 1,269,031 1,226,487 Trustee s and custodian fees 6 82,104 87,126 Transaction costs 643, ,635 Audit fee 8,550 8,100 Tax agent s fee 3,400 9,769 Other expenses 23,669 98,935 2,030,471 1,715,052 (LOSS)/PROFIT BEFORE TAXATION (15,438,233) 13,960,712 Taxation 7 (63,616) (146,959) (LOSS)/PROFIT AFTER TAXATION AND TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE FINANCIAL PERIOD (15,501,849) 13,813,753 (Loss)/Profit after taxation is made up as follows: Realised amount (781,289) 7,246,139 Unrealised amount (14,720,559) 6,567,614 (15,501,849) 13,813,753 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 10

14 UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 31 OCTOBER Audited Note RM RM ASSETS Cash and cash equivalents 10 11,139,521 10,390,117 Financial assets at fair value through profit or loss 9 147,031, ,247,242 Amount due from stockbrokers 4,463,667 2,550,091 Amount due from Manager 279, ,408 Amount due from Manager of collective investment schemes - Management fee rebate 16,395 12,349 Dividends receivable 154,108 78,517 Tax recoverable 214, ,108 TOTAL ASSETS 163,298, ,451,832 LIABILITIES Amount due to stockbrokers 749,153 3,533,739 Amount due to Manager 166,836 32,601 Accrued management fee 209, ,791 Amount due to Trustee 9,901 9,510 Other payables and accruals 13,301 35,395 TOTAL LIABILITIES 1,148,537 3,812,036 NET ASSET VALUE OF THE FUND 162,150, ,639,796 EQUITY Unit holders' capital 93,920,790 72,307,779 Retained earnings 68,229,578 93,332,017 NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS 162,150, ,639,796 NUMBER OF UNITS IN CIRCULATION (UNITS) ,802, ,518,163 NET ASSET VALUE PER UNIT (RM) The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 11

15 UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 OCTOBER 2018 Unit holders' Retained capital earnings Total Note RM RM RM Balance as at 1 May ,307,779 93,332, ,639,796 Movement in unit holders' contributions: - Creation of units from applications 20,060,264-20,060,264 - Creation of units from distribution 9,221,663-9,221,663 - Cancellation of units (7,668,916) - (7,668,916) Total comprehensive loss for the financial period - (15,501,849) (15,501,849) Distribution 8 - (9,600,590) (9,600,590) Balance as at 31 October ,920,790 68,229, ,150,368 Balance as at 1 May ,751,811 83,500, ,252,234 Movement in unit holders' contributions: - Creation of units from applications 6,990,574-6,990,574 - Creation of units from distribution 8,261,305-8,261,305 - Cancellation of units (11,550,387) - (11,550,387) Total comprehensive income for the financial period - 13,813,753 13,813,753 Distribution 8 - (8,581,546) (8,581,546) Balance as at 31 October ,453,303 88,732, ,185,933 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 12

16 UNAUDITED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 OCTOBER to to RM RM CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from disposal of quoted securities 107,088,709 48,346,591 Purchase of quoted securities (120,998,727) (47,989,912) Dividend income received 2,878,513 3,959,392 Interest income received from deposits with licensed financial institutions 167, ,051 Management fee paid (1,244,081) (1,207,834) Management fee rebate received 12,146 11,974 Trustee s and custodian fees paid (81,714) (86,255) Payments for other fees and expenses (57,713) (122,695) Tax refund (paid)/refunded - (137,400) Net realised foreign exchange loss (18,385) (1,507,544) Net cash (used in)/generated from operating activities (12,254,181) 1,415,639 CASH FLOWS FROM FINANCING ACTIVITIES Cash proceeds from units created 20,740,303 7,081,626 Payments for cancellation of units (7,534,681) (11,589,800) Distribution paid (378,927) (320,241) Net cash generated from/(used in) financing activities 12,826,695 (4,828,415) Net increase/(decrease) in cash and cash equivalents 572,514 (3,413,046) Effects of foreign exchange differences 176,890 (90,915) Cash and cash equivalents at the beginning of the financial period 10,390,117 16,466,473 Cash and cash equivalents at the end of the financial period 11,139,521 12,962,512 Cash and cash equivalents comprised of: Bank balances 5,351,003 7,304,009 Deposits with licensed financial institutions 5,788,518 5,658,503 Cash and cash equivalents at the end of the financial period 11,139,521 12,962,512 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 13

17 NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 OCTOBER THE FUND, THE MANAGER AND ITS PRINCIPAL ACTIVITIES CIMB-Principal Equity Growth & Income Fund (the Fund ) is governed by a Principal Master Deed dated 15 May 2008, a Third Supplemental Master Deed dated 14 July 2008, a Sixth Supplemental Master Deed dated 16 July 2009, a Seventh Supplemental Master Deed dated 11 February 2010, Thirteenth Supplemental Master Deed dated 26 June 2012, and an Eighteenth Supplemental Master Deed dated 25 March 2015 (collectively referred to as the Deeds ), made between CIMB-Principal Asset Management Bhd (the Manager ) and AmanahRaya Trustees Bhd (the Trustee ). The Fund may invest between 70% to 98% (both inclusive) of its NAV in equities in order to gain long-term capital growth. The Fund may opt to invest in foreign equities up to a maximum of 30% of its NAV. Such foreign equities must be equity securities of companies domiciled in, listed in, and/or have significant operations in Asia 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 NYSE. The threshold for significant operations would be if more than 30% of total group revenue derives from countries in Asia ex Japan. The calculation would be based on the most recent financial reports released by the companies (e.g. interim and annual reports). In line with its objective, the investment policy and strategy of the Fund will be to invest primarily in equities, with a bias towards growth stocks that have the potential to deliver long-term capital appreciation and to a lesser extent focus on dividend yielding stocks that provides income. The Fund may opt to seek investment exposure via Collective Investment Schemes that is in line with the Fund s objective, subject to the requirement of the SC Guidelines. To a lesser extent, the Fund invests in liquid assets primarily for the purpose of cash management. The investment management function for the foreign investments of this Fund has been delegated to CIMB-Principal (S) with the approval of the SC. CIMB-Principal (S) will be responsible for investing and managing these foreign investments in accordance with the investment objective and within the investment restrictions. All investments are 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 jointly owned by CIMB Group and Principal International (Asia) Limited. The principal activities of the Manager are the establishment and management of unit trust funds and fund management activities. 2. 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 International Financial Reporting Standards ( IFRS ). The financial statements have been prepared under the historical cost convention, as modified by financial assets at fair value through profit or loss. 14

18 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 (continued) 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 period. It also requires the Manager to exercise their judgment in the process of applying the Fund s accounting policies. Although these estimates and judgment are based on the Manager s best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgment or complexity, or areas where estimates and assumptions are significant to the financial statements are disclosed in Note 2(m). Standards, amendments to published standards and interpretations to existing standards that are effective: The Fund has applied the following amendments for the first time for the financial year beginning 1 May 2018: MFRS 9 Financial Instruments (effective from 1 January 2018) will replace MFRS 139 Financial Instruments: Recognition and Measurement. The adoption of these amendments did not have any impact on the current financial period or any prior period and is not likely to affect future periods. (b) Financial assets and financial liabilities Classification The Fund designates its investments in collective investment schemes and quoted securities as financial assets at fair value through profit or loss at inception. Financial assets are designated at fair value through profit or loss when they are managed and their performance evaluated on a fair value basis. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and have been included in current assets. The Fund s loans and receivables comprise cash and cash equivalents, amount due from stockbrokers, amount due from Manager, amount due from Manager of collective investment schemes 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 stockbrokers, amount due to Manager, accrued management fee, amount due to Trustee, and other payables and accruals as other financial liabilities. 15

19 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Financial assets and financial liabilities (Continued) 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. 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 period which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the statement of comprehensive income as part of gross dividend income when the Fund s right to receive payments is established. Collective investment schemes are valued based on the most recent published NAV per unit or share of such collective investment schemes or, if unavailable, the last published price of such unit or share (excluding any sales charge included in such selling price). Quoted securities in Malaysia are valued at the last traded market price quoted on Bursa Malaysia Securities Bhd ( 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 exchanges 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 quoted 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 quoted securities for a period exceeding 14 days, or such shorter period as agreed by the Trustee, then the quoted securities 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. 16

20 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Financial assets and financial liabilities (continued) Recognition and measurement (continued) Loans and receivables and other financial liabilities are subsequently carried at amortised cost using the effective interest method. Impairment for assets carried at amortised costs 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 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. 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 period, 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) 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. Due to mixed factors in determining the functional currency of the Fund, the Manager has used its judgment to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and have determined the functional currency to be in RM primarily due to following factors: 17

21 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Foreign currency (continued) Functional and presentation currency (continued) i. The Fund s units are denominated in RM. ii. Significant portion of the Fund s expenses are denominated in RM. iii. Significant portion of the Fund s NAV is invested in investment denominated in RM. 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 financial period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in statement of comprehensive income, except when deferred in OCI as qualifying cash flow hedges. (d) Income recognition Dividend income is recognised on the ex-dividend date when the right to receive payment is established. Interest income from deposits with licensed financial institutions is recognised on a time proportionate basis using effective interest rate method on an accrual basis. Realised gain or loss on sale of collective investment schemes and quoted securities is accounted for as the difference between the net disposal proceeds and the carrying amount of investments, determined on a weighted average cost basis. (e) Cash and cash equivalents For the purpose of statement of cash flow, cash and cash equivalent 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. (f) Taxation Current tax expense is determined according to Malaysian tax laws at the current rate based upon the taxable profit earned during the financial period. Tax on dividend income from foreign quoted securities is based on the tax regime of the respective countries that the Fund invests in. (g) Distribution 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 financial period in which it is approved by the Trustee. 18

22 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Transactions 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) Unit holders capital The unit holders contributions to the Fund meet the criteria to be classified as equity instruments under MFRS 132 Financial Instruments: Presentation. Those criteria include: the units entitle the holder to a proportionate share of the Fund s NAV; the units are the most subordinated class and class features are identical; there is no contractual obligations to deliver cash or another financial asset other than the obligation on the Fund to repurchase; and the total expected cash flows from the units over its life are based substantially on the profit or loss of the Fund. The outstanding units are carried at the redemption amount that is payable at each financial period if unit holder exercises the right to put the unit back to the Fund. Units are created and cancelled 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. (j) 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 stockbrokers. Significant financial difficulties of the stockbrokers, probability that the brokers 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. (k) Other income Management fee rebate is derived from the collective investment schemes held by the Fund on an accrual basis to ensure no double charging of management fee. It is accrued daily based on the fair value of collective investment schemes held. 19

23 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (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. (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 judgment 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. However, the Manager is of the opinion that in applying these accounting policies, no significant judgment was required. 3. RISK MANAGEMENT OBJECTIVES AND POLICIES The investment objective of the Fund is to achieve capital appreciation over the medium to long-term through all types of investments that have the potential for above average growth over time. 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 and liquidity 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 investments in collective investment schemes and quoted securities will fluctuate because of changes in market prices (other than those arising from interest rate risk and currency risk). The value of collective investment schemes and quoted securities 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 collective investment schemes, quoted securities and other financial instruments within specified limits according to the Deeds. 20

24 3. RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (a) Market risk (Continued) (ii) Interest rate risk Interest rate is a general economic indicator that will have an impact on the management of the Fund. Fair value interest rate risk is the risk that the value of a financial instrument 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. (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. (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. For amount due from Manager, 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 exchanges. The credit risk is minimal as all transactions in collective investment schemes are settled/paid upon delivery using approved stockbrokers. For amount due from Manager of collective investment schemes, the Fund will invest with an investment management company of the collective investment schemes which is authorised or approved by the relevant regulatory authority in its home jurisdiction. 21

25 3. RISK MANAGEMENT OBJECTIVES AND POLICIES (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 balances, 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. (d) Capital risk management The capital of the Fund is represented by equity consisting of unit holders capital of RM93,920,790 ( : RM72,307,779) and retained earnings of RM68,133,207 ( : RM93,332,017). The amount of capital 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 to 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. (e) 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 values of financial assets traded in active markets (such as trading securities) are based on quoted market prices at the close of trading on the financial period end date. The Fund utilises the last traded market price for financial assets where the last traded price falls within the bid-ask spread. In circumstances where the last traded 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 by using valuation techniques. (i) Fair value hierarchy The table below analyses financial instruments carried at fair value. The different levels have been defined as follows: 22

26 3. RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (e) Fair value estimation (continued) (i) Fair value hierarchy (continued) Quoted prices (unadjusted) in active market for identical assets or liabilities (Level 1) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2) Inputs for the asset and liability that are not based on observable market data (that is, unobservable inputs) (Level 3) The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability. The determination of what constitutes observable requires significant judgment by the Fund. The Fund considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. Level 1 Level 2 Level 3 Total RM RM RM RM Financial assets at fair value through profit or loss: - Collective investment schemes 1,674, ,674,025 - Quoted securities - Local 109,071, ,071,186 - Quoted securities - Foreign 36,286, ,286, ,031, ,031,737 23

27 3. RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (e) Fair value estimation (continued) (i) Fair value hierarchy (continued) Level 1 Level 2 Level 3 Total RM RM RM RM Audited Financial assets at fair value through profit or loss: - Collective investment scheme 1,801, ,801,059 - Quoted securities - Local 108,953, ,953,105 - Quoted securities -Foreign 44,493, ,493, ,247, ,247,242 Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include collective investment schemes and 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, amount due from Manager of collective investment schemes, dividends receivable and all current liabilities are a reasonable approximation of their fair values due to their short term nature. 4. OTHER INCOME Other income represents the Fund s entitlement to management fee rebate from the Manager of collective investment schemes the Fund invests in. For the six months financial period ended 31 October 2018, the rebate is recognised at a rate of 2.00% and 1.75% per annum respectively for PT CIMB-Principal Indo Domestic Equity Fund ( : 2.00%) and PT CIMB-Principal RD Smart Equity Fund calculated and accrued daily based on the NAV of the collective investment schemes. 5. MANAGEMENT FEE In accordance with the Deeds, the Manager is entitled to a management fee of up to 1.50% per annum calculated daily based on the NAV of the Fund. For the six months financial period ended 31 October 2018, the management fee is recognised at a rate of 1.50% per annum ( : 1.50% per annum). There is no further liability to the Manager in respect of management fee other than the amount recognised above. 24

28 6. TRUSTEE S AND CUSTODIAN FEES In accordance the Deeds, the Trustee is entitled to a fee not exceeding 0.07% per annum calculated daily based on the NAV of the Fund. The foreign sub-custodian fee is dependent on the country invested and is charged monthly in arrears. For the six months financial period ended 31 October 2018, the Trustee s fee is recognised at a rate of 0.07% per annum ( : 0.07% per annum) while the foreign custodian fee is recognised at RM22,883 ( : RM29,890). There is no further liability to the Trustee and custodian in respect of Trustee s and custodian fees other than the amount recognised above. 7. TAXATION to to RM RM Tax charged for the financial period: - Current taxation local Current taxation foreign 63, ,959 63, ,959 A numerical reconciliation between (loss)/profit before taxation multiplied by the Malaysian statutory income tax rate and tax expense of the Fund is as follows: to to RM RM (Loss)/Profit before taxation (15,438,232) 13,960,712 Taxation at Malaysian statutory rate of 24% ( : 24%) (3,705,176) 3,350,571 Tax effects of: Investment income not subject to tax 3,217,863 (3,762,183) Expenses not deductible for tax purposes 176,566 97,165 Restriction on tax deductible expenses for Unit Trust Funds 310, ,447 Effects of foreign tax on foreign taxable income 63, ,959 Taxation 63, ,959 25

29 8. DISTRIBUTION Distribution to unit holders is derived from the following sources: to to RM RM Dividend income 723, ,014 Interest income from deposits with licensed financial institutions 30,955 45,991 Net realised gain on disposal of quoted securities 1,482,032 8,227,439 Prior financial year's realised income 7,473,842-9,710,770 8,729,444 Less: Expenses (110,180) (146,237) Taxation - (1661) Net distribution amount 9,600,590 8,581,546 Distribution on 26 July 2018 Gross/Net distribution per unit (sen) Distribution on 27 July 2017 Gross/Net distribution per unit (sen) Gross distribution is derived using total income less total expenses. Net distribution above is mainly sourced from current and prior financial periods' realised income. Gross distribution per unit is derived from gross realised income less expense, divided by the number of units in circulation. Net distribution per unit is derived from net realised income less expenses and taxation, divided by the number of units in circulation. 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Audited RM RM Designated at fair value through profit or loss at inception: - Collective investment schemes 1,674,025 1,801,059 - Quoted securities local 109,071, ,953,105 - Quoted securities foreign 36,286,526 44,493, ,031, ,247, to to RM RM Net (loss)/gain on financial assets at fair value through profit or loss: - Realised (loss)/gain on disposals (2,199,149) 5,018,670 - Unrealised fair value (loss)/gain (14,543,969) 6,658,529 (16,743,118) 11,677,199 26

30 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Name of counter COLLECTIVE INVESTMENT SCHEMES Aggregate Market Percentage Quantity cost value of NAV Units RM RM % PT CIMB-Principal Asset Management Indo Domestic Equity Fund 3,567, , , PT CIMB-Principal Asset Management RD Smart Equity Fund 7,375, , , TOTAL COLLECTIVE INVESTMENT SCHEMES 10,942,853 1,917,089 1,674, ACCUMULATED UNREALISED LOSS ON COLLECTIVE INVESTMENT SCHEMES AT FAIR VALUE THROUGH PROFIT OR LOSS (243,064) TOTAL COLLECTIVE INVESTMENT SCHEMES AT FAIR VALUE THROUGH PROFIT OR LOSS 1,674,025 27

31 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter (CONTINUED) QUOTED SECURITIES - LOCAL Aggregate Market Percentage Quantity cost value of NAV Units RM RM % Construction Gabungan AQRS Bhd - Warrant 280,875-92, Consumer Products Bermaz Auto Bhd 1,112,300 2,446,375 2,113, British American Tobacco Bhd 76,200 2,623,083 2,369, Fraser & Neave Holdings Bhd 65,500 2,300,282 2,207, Genting Bhd 555,300 5,095,861 4,075, Genting Malaysia Bhd 912,600 4,700,054 4,097, Nestle Malaysia Bhd 16,000 2,303,622 2,300, Padini Holdings Bhd 392,600 1,855,247 2,206, Ql Resources Bhd 165,800 1,161,483 1,168, Sime Darby Bhd 586,200 1,299,289 1,289, ,882,500 23,785,297 21,829, Energy Dialog Group Bhd 1,279,700 3,316,807 4,338, Hibiscus Petroleum Bhd 871, , , Petronas Dagangan Bhd 48,500 1,275,535 1,261, Serba Dinamik Holdings Bhd 88, , , Yinson Hldgs Bhd 657,000 2,096,509 2,923, ,944,900 7,926,428 9,855, Finance CIMB Group Holdings Bhd 1,107,692 6,494,650 6,335, Hong Leong Bank Bhd 176,000 3,145,179 3,643, Malayan Banking Bhd 1,105,949 10,229,121 10,495, Public Bank Bhd 510,010 10,659,865 12,546, Rhb Bank Bhd 374,900 2,019,672 1,960, ,274,551 32,548,487 34,981, Health Care Hartalega Holdings Bhd 140, , , IHH Healthcare Bhd 232,400 1,386,625 1,162, Top Glove Corp Bhd 263, ,178 1,564, ,500 3,183,169 3,607, Industrials Petronas Chemicals Group Bhd 729,000 5,744,319 6,816, Uchi Technologies Bhd 546,300 1,665,251 1,584, V.S. Industry Bhd 1,680,950 2,962,172 2,689, ,956,250 10,371,743 11,089,

32 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter (CONTINUED) QUOTED SECURITIES - LOCAL (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % Plantation IOI Corp Bhd 509,000 2,315,950 2,290, Kuala Lumpur Kepong Bhd 96,700 2,385,724 2,409, ,700 4,701,674 4,700, Property Eastern And Oriental Bhd 14,062 22,287 16, REIT IGB Reit 688,000 1,156,462 1,155, Technology Globetronics Technology Bhd 578,400 1,418,299 1,278, Inari Amertron Bhd 400, , , Pentamaster Corporation Bhd 770,888 1,227,848 2,420, Unisem Bhd 790,000 2,314,790 2,283, ,539,288 5,796,312 6,765, Telecommunications Digi.Com Bhd 765,000 3,511,044 3,297, Transportation & Logistics Malaysia Airports Holdings Bhd 148,300 1,263,234 1,230, MISC Bhd 122, , , ,200 2,010,282 1,980, Utilities Tenaga Nasional Bhd 659,700 9,343,877 9,697, TOTAL QUOTED SECURITIES- LOCAL 19,518, ,357, ,071,

33 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter (CONTINUED) QUOTED SECURITIES - FOREIGN Aggregate Market Percentage Quantity cost value of NAV Units RM RM % CHINA Industrials Anhui Conch Cement Co. Ltd 23, , , Finance Industrial and Commercial Bank 450,000 1,232,181 1,272, Ping An Insurance Group Co. - H 29, ,267 1,162, ,500 2,205,448 2,434, Energy PetroChina Co. Ltd 248, , , TOTAL CHINA 750,500 3,325,339 3,690, HONG KONG REITs Link REIT 44,500 1,773,795 1,649, Technology Riverhill Holdings Ltd 2,165, Tencent Hldg Ltd 4, , , ,169, , , Telecommunications China Mobile Ltd 24, , , Consumer Products China Mengniu Dairy Co. Ltd 75, , , Galaxy Entertainment Group Ltd 41,000 1,309, , Techtronic Industries Co. Ltd 65,000 1,402,145 1,272, ,000 3,542,645 3,123, Finance AIA Group Ltd 56,700 1,185,009 1,794, HSBC Holdings PLC 17, , , ,300 1,938,147 2,399, Energy CNOOC Ltd 201,000 1,320,540 1,443, TOTAL HONG KONG 2,694,700 9,899,225 10,252,

34 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter (CONTINUED) QUOTED SECURITIES - FOREIGN (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % INDIA Industrials Larsen & Toubro Ltd 10, , , Finance HDFC Bank Ltd 11, ,960 1,227, ICICI Bank Ltd 7, , , Indusind Bank Ltd 5, , , ,827 1,391,740 1,840, Energy Reliance Industries Ltd 27,456 1,500,539 1,649, TOTAL INDIA 62,515 3,751,651 4,241, INDONESIA Consumer Products Ace Hardware Indonesia 942, , , Gudang Garam TBK PT 19, , , , , , TOTAL INDONESIA 961, , , PHILIPPINES Industrials Megawide Construction Corporation 234, , , TOTAL PHILIPPINES 234, , , SINGAPORE Industrials Singapore Technologies Engineering Ltd 120,900 1,274,507 1,296, Venture Corporation Ltd 19, , , ,400 2,115,295 2,198, Finance CapitaLand Mall Trust 157,400 1,007,264 1,003, CDL Hospitality Trusts 191, , , DBS Group Holdings Ltd 18,000 1,134,054 1,275, Mapletree Commercial Trust 97, , , ,200 3,618,618 3,590, Energy Keppel Corporation Ltd 26, , ,

35 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter (CONTINUED) QUOTED SECURITIES - FOREIGN (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % SINGAPORE (CONTINUED) TOTAL SINGAPORE 631,000 6,418,553 6,283, SOUTH KOREA Basic Materials Posco 883 1,029, , Consumer Products Samsung Electronics Co. Ltd 15,891 1,899,316 2,472, TOTAL SOUTH KOREA 16,774 2,928,479 3,308, TAIWAN Technology Taiwan Semiconducter Manufacturing Co.Limited 81,000 1,778,133 2,562, Finance CTBC Financial Holding Co. Ltd 289, , , TOTAL TAIWAN 370,000 2,518,483 3,369, THAILAND 1,024,800 2,964,053 3,143, Health Care Bangkok Dusit Medical Service - NVDR 158, , , Consumer Products CP ALL PCL - NVDR 92, , , Erawan Group PCL - NVDR 727, , , ,100 1,259,090 1,452, Finance Bangkok Bank PCL - NVDR 46,000 1,210,841 1,200, TOAL THAILAND 1,024,800 2,964,053 3,143, UNITED STATES 4,450 1,049, , Technology Nvidia Corporation , , Consumer Products Huazhu Group Ltd 3, , , TOTAL UNITED STATES 4,450 1,049, ,

36 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter (CONTINUED) QUOTED SECURITIES - FOREIGN (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % TOTAL QUOTED SECURITIES - FOREIGN 6,750,839 33,913,581 36,286, TOTAL QUOTED SECURITIES 26,269, ,270, ,357, ACCUMULATED UNREALISED GAIN ON QUOTED SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS 7,087,073 TOTAL QUOTED SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS 145,357, Audited COLLECTIVE INVESTMENT SCHEMES PT CIMB-Principal Indo Domestic Equity Fund 3,567, , , PT CIMB-Principal Smart Equity Fund 2,846, , , TOTAL COLLECTIVE INVESTMENT SCHEMES 6,413,774 1,917,089 1,801, ACCUMULATED UNREALISED LOSS ON COLLECTIVE INVESTMENT SCHEMES AT FAIR VALUE THROUGH PROFIT OR LOSS (116,030) TOTAL COLLECTIVE INVESTMENT SCHEMES AT FAIR VALUE THROUGH PROFIT OR LOSS 1,801,059 33

37 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter Audited (Continued) QUOTED SECURITIES - LOCAL Aggregate Market Percentage Quantity cost value of NAV Units RM RM % Construction Gamuda Bhd 120, , , IJM Corporation Bhd 691,200 2,219,497 2,059, Muhibbah Engineering Malaysia Bhd 463,000 1,187,631 1,370, Sunway Construction Group Bhd 278, , , WCT Holdings Bhd 745,390 1,721, , ,297,990 6,323,191 5,591, Consumer Products Fraser & Neave Holdings Bhd 55,500 1,662,053 1,995, UMW Holdings Bhd 267,400 1,596,416 1,633, ,900 3,258,469 3,629, Finance Alliance Bank Malaysia Bhd 413,800 1,661,862 1,800, Bursa Malaysia Bhd 208,350 1,286,107 1,504, CIMB Group Holdings Bhd 1,007,841 5,322,199 7,256, Hong Leong Bank Bhd 99,800 1,359,325 1,896, Malayan Banking Bhd 983,449 8,509,682 10,601, Public Bank Bhd 374,610 7,281,321 8,915, RHB Bank Bhd 294,800 1,584,950 1,562, ,382,650 27,005,446 33,536, Industrials Hartalega Holdings Bhd 140, , , Petronas Chemicals Group Bhd 453,000 3,206,340 3,827, SKP Resources Bhd 82, , , Top Glove Corporation Bhd 236,700 1,736,480 2,251, V.S. Industry Bhd 856,700 2,420,137 1,927, ,769,100 8,314,420 8,954, IPC Digi.com Bhd 552,000 2,540,616 2,555, Time Dotcom Bhd 118, , , ,900 3,095,903 3,510,

38 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter Audited (Continued) QUOTED SECURITIES - LOCAL (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % Plantation Genting Plantations Bhd 110,400 1,152,231 1,092, IOI Corporation Bhd 444,000 2,042,404 2,126, Kuala Lumpur Kepong Bhd 45,700 1,059,067 1,164, Sime Darby Plantation Bhd 76, , , ,000 4,683,573 4,812, Properties LBS Bina Group Bhd 1,184,700 1,000,456 1,137, LBS Bina Group Bhd - Preference 112, , , Sime Darby Property Bhd 404, , , SP Setia Bhd 249, , , UOA Development Bhd 451,400 1,106,520 1,096, ,402,172 3,699,819 3,760, Technology Globetronics Technology Bhd 182,100 1,087, , Inari Amertron Bhd 1,451,400 2,860,922 2,496, Pentamaster Corporation Bhd 770,888 1,227,848 1,472, ,404,388 5,176,485 4,753, Trading/Services Airasia Bhd 842,300 2,913,856 3,242, Axiata Group Bhd 614,396 3,493,506 3,256, Bermaz Auto Bhd 1,133,200 2,458,023 2,515, Dialog Group Bhd 505, ,614 1,558, Genting Bhd 555,300 5,095,861 4,958, Genting Malaysia Bhd 399,100 2,110,677 2,047, IHH Healthcare Bhd 418,300 2,481,192 2,543, Malaysia Airports Holdings Bhd 182,900 1,284,616 1,647, MISC Bhd 231,600 1,744,672 1,658, My Eg Services Bhd 310, , , Sime Darby Bhd 480, ,561 1,283, Telekom Malaysia Bhd 367,897 2,497,522 1,949, Tenaga Nasional Bhd 582,000 7,585,888 9,218, Yinson Holdings Bhd 937,000 2,989,997 3,710, ,560,593 37,325,123 40,403, TOTAL QUOTED SECURITIES- LOCAL 21,487,693 98,882, ,953,

39 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter Audited (Continued) QUOTED SECURITIES - FOREIGN Aggregate Market Percentage Quantity cost value of NAV Units RM RM % CAYMAN ISLANDS Consumer Products Alibaba Group Holdings Ltd 2, ,987 1,588, TOTAL CAYMAN ISLANDS 2, ,987 1,588, CHINA Consumer Products Midea Group Co Ltd - A 28, , , Finance China Vanke Co Ltd - H 3 47, , , Industrial & Commercial Bank of China Ltd - H 3 711,000 1,877,513 2,479, Ping An Insurance Group Co of China Ltd - H 3 49,500 1,123,418 1,918, ,500 3,597,406 5,166, Industrials Anhui Conch Cement Co Ltd - H 3 49, ,129 1,221, Beijing Oriental Yuhong Waterproof Technology Co Ltd 31, , , Hangzhou Hikvision Digital Technology Co Ltd 79,905 1,447,860 1,905, ,945 2,974,776 3,828, TOTAL CHINA 997,155 7,266,126 9,913, HONG KONG Consumer Products China Mengniu Dairy Co Ltd 75, , , Galaxy Entertainment Group Ltd 52,000 1,661,441 1,803, Techtronic Industries Co Ltd 37, , , Xinyi Glass Holdings Co Ltd 12,000 69,962 68, ,500 3,304,578 3,697,

40 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter Audited (Continued) QUOTED SECURITIES - FOREIGN (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % HONG KONG (CONTINUED) Finance AIA Group Ltd 45, ,829 1,607, HSBC Holdings Ltd 17, , , ,100 1,561,967 2,299, Industrials Sunny Optical Technology Group Co Ltd 1, , , Technology Riverhill Holdings Ltd 2,165, Tencent Holdings Ltd 15, ,754 2,969, ,180, ,754 2,969, TOTAL HONG KONG 2,421,700 5,959,437 9,090, INDIA Energy Reliance Industries Ltd 23,200 1,101,546 1,314, Finance HDFC Bank Ltd 11, ,960 1,297, ICICI Bank Ltd 7, , , IndusInd Bank Ltd 6, , , ,420 1,319,195 2,124, Industrials Larsen & Toubro Ltd 10, , , TOTAL INDIA 59,040 3,346,399 4,297,

41 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter Audited (Continued) QUOTED SECURITIES - FOREIGN (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % INDONESIA Consumer Products Mitra Adiperkasa Tbk PT 130, , , TOTAL INDONESIA 130, , , PHILIPPINES Basic Materials D&L Industries Inc 393, , , Industrials Megawide Construction Corp 234, , , TOTAL PHILIPPINES 628, , , SINGAPORE Energy Keppel Corporation Ltd 30, , , Finance CDL Hospitality Trusts 94, , , City Developments Ltd 30,900 1,043,582 1,158, DBS Group Holdings Ltd 28,700 1,808,186 2,619, ,300 3,346,551 4,276, Industrials Venture Corp Ltd 30,200 1,302,144 1,872, TOTAL SINGAPORE 215,000 5,439,662 6,887, SOUTH KOREA Basic Materials Lotte Chemical Corp , , Posco ,768 1,161, ,150 1,467,810 1,618, Technology Samsung Electronics Co Ltd 253 1,321,800 2,461, TOTAL SOUTH KOREA 1,403 2,789,610 4,079,

42 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter Audited (Continued) QUOTED SECURITIES - FOREIGN (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % TAIWAN Finance CTBC Financial Holding Co Ltd 289, , , CTBC Financial Holding Co Ltd Preference Share 2,287 18,936 18, , , , Industrials AirTac International Group 6, , , Hon Hai Precision Industry Co 53, , , Silergy Corp 5, , , ,000 1,420,632 1,404, Technology Taiwan Semiconductor Manufacturing Co Ltd 70,000 1,406,472 2,105, TOTAL TAIWAN 425,287 3,586,390 4,342, THAILAND Consumer Products CP All PCL - NVDR 1 104, ,122 1,125, Erawan Group PCL - NVDR 1 727, , , ,100 1,340,284 1,866, Finance TMB Bank PLC - NVDR 1 935, , , TOTAL THAILAND 1,767,400 1,691,588 2,140, UNITED STATES Technology Nvidia Corporation 1,248 1,105,975 1,100, TOTAL UNITED STATES 1,248 1,105,975 1,100,

43 9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Name of counter Audited (Continued) QUOTED SECURITIES - FOREIGN (CONTINUED) Aggregate Market Percentage Quantity cost value of NAV Units RM RM % TOTAL QUOTED SECURITIES - FOREIGN 6,648,802 33,059,746 44,493, TOTAL QUOTED SECURITIES 28,136, ,942, ,446, ACCUMULATED UNREALISED GAIN ON QUOTED SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS 21,504,008 TOTAL QUOTED SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS 153,446,183 1 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. 2 ADR, or American depositary receipt, is a negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. 3 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. 40

44 10. CASH AND CASH EQUIVALENTS Audited RM RM Deposits with licensed financial institutions 5,788,518 6,346,785 Bank balances 5,351,003 4,043,332 11,139,521 10,390,117 The weighted average effective interest rate per annum is as follows: Audited % % Deposits with licensed financial institutions Deposits with licensed financial institutions of the Fund have an average maturity of 1 day ( : 3 days). 11. NUMBER OF UNITS IN CIRCULATION (UNITS) to to Audited No. of units No. of units At the beginning of the financial period/year 117,518, ,330,854 Add : Creation of units from applications 14,985,216 12,051,890 Add : Creation of units from distribution 7,066,408 6,270,916 Less: Cancellation of units (5,767,666) (19,135,497) At the end of the financial period/year 133,802, ,518, MANAGEMENT EXPENSE RATIO ( MER ) to to % % MER MER is derived from the following calculation: MER = (A + B + C + D + E) x 100 F A = Management fee (including management fee debate) B = Trustee s and custodian fees C = Audit fee D = Tax agent s fee E = Other expenses excluding Goods and Services Tax ( GST ) on transaction costs F = Average NAV of the Fund calculated on a daily basis The average NAV of the Fund for the financial period calculated on a daily basis is RM168,004,166 ( : RM162,127,389). 41

45 13. PORTFOLIO TURNOVER RATIO ( PTR ) to to PTR (times) PTR is derived based on the following calculation: (Total acquisition for the financial period + total disposal for the financial period) 2 Average NAV of the Fund for the financial period calculated on a daily basis where: total acquisition for the financial period = RM117,840,001 ( : RM46,869,771) total disposal for the financial period = RM109,203,130 ( : RM40,943,927) 14. UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER, AND SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES The related parties and their relationship with the Fund are as follows: Related parties CIMB-Principal Asset Management Bhd Principal Financial Group, Inc. Principal International (Asia) Ltd Subsidiaries and associates of Principal Financial Group Inc., other than above, as disclosed in its financial statements CIMB Group Holdings Bhd CIMB Group Sdn Bhd Subsidiaries and associates of CIMB Group Holdings Bhd, other than above, as disclosed in its financial statements CIMB Bank Bhd CIMB Investment Bank Bhd CIMB Securities (Singapore) Pte Ltd CIMB Securities (India) Pte Ltd CIMB Securities Limited (Taiwan) CIMB Securities Limited (South Korea) Relationship The Manager Ultimate holding company of shareholder of the Manager Shareholder of the Manager Fellow subsidiary and associated companies of the ultimate holding company of shareholder of the Manager Ultimate holding company of shareholder of the Manager Shareholder of the Manager Fellow subsidiary and associated companies of the ultimate holding company of shareholder of the Manager Fellow related party to the Manager Fellow related party to the Manager Fellow related party to the Manager Fellow related party to the Manager Fellow related party to the Manager Fellow related party to the Manager 42

46 14. UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER, AND SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED) Units held by the Manager and parties related to the Manager Audited No. of units RM No. of units RM Manager CIMB-Principal Asset Management Bhd 44,819 54,312 5,378 7,579 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 to to RM RM Significant related party transactions Interest income from deposits with licensed financial institution: - CIMB Bank Bhd - 5,779 Cash placements with licensed financial institution: - CIMB Bank Bhd - 13,157,000 There were no significant related party balances as at the end of each financial period/year. 43

47 15. TRANSACTIONS WITH BROKERS/DEALERS Details of transactions with top 10 brokers/dealers for the six months financial period ended 31 October 2018 are as follows: Brokers/Dealers Percentage of total brokerage fees Value of trades Percentage of total trades Brokerage fees RM % RM % Macquarie Malaysia Sdn Bhd 38,650, , RHB Investment Bank Bhd 23,667, , KAF-Seagroatt & Campbell Securities Bhd 23,158, , CLSA Securities (M) Sdn Bhd 15,360, , Affin Hwang Investment Bank Bhd 15,252, , CIMB Investment Bank Bhd # 15,074, , J.P. Morgan Sec (M) Sdn Bhd 14,111, , Maybank Investment Bank Bhd 9,191, , Credit Suisse Securities (Malaysia) Sdn Bhd 8,686, , Hong Leong Investment Bank Bhd 6,513, , Others # 57,358, , ,023, , Details of transactions with top 10 brokers/dealers for the six months financial period ended 31 October 2017 are as follows: Brokers/Dealers Percentage of total brokerage fees Value of trades Percentage of total trades Brokerage fees RM % RM % RHB Investment Bank Berhad 10,858, , Maybank Securities 7,843, , JPMorgan Securities 7,804, , CIMB Investment Bank # 7,566, , Credit Suisse M Sdn Bhd 6,982, , CLSA Securities M Sdn Bhd 6,358, , Hong Leong Investment Bank 6,101, , Macquarie Malaysia Sdn Bhd 4,269, , Instinet Asia Singapore 4,230, , DBS Vickers Sec SIN Pte Ltd 3,302, , Others 22,497, , ,813, ,

48 15. TRANSACTIONS WITH BROKERS/DEALERS (CONTINUED) # Included in the transactions are trades conducted with CIMB Investment Bank Bhd and CIMB Securities (S) Pte Ltd, fellow related parties to the Manager amounting to RM15,074,515 ( : RM7,566,272) and RM1,159,281 ( : Nil). The Manager is of the opinion that all transactions with the related company have been entered into in the normal course of business at agreed terms between the related parties. 16. 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 Fund aims to achieve capital appreciation over the medium to long-term through all types of investments that have the potential for above average growth over time. 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, collective investment scheme, 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 ex-japan. There were no changes in reportable operating segment during the financial period. 45

49 DIRECTORY Head office of the Manager CIMB-Principal Asset Management Berhad (Company No.: K) 10 th Floor, Bangunan CIMB, Jalan Semantan, Damansara Heights, Kuala Lumpur, MALAYSIA. Tel: (03) Postal address CIMB-Principal Asset Management Berhad (Company No.: K) P.O.Box 10571, Kuala Lumpur, MALAYSIA. Website address General investment enquiries (03) Trustee for the CIMB Principal Equity Growth & Income Fund AmanahRaya Trustees Berhad (Company No: T) Tingkat 4, Wisma TAS, No 21 Jalan Melaka, Kuala Lumpur, MALAYSIA. Tel: (03) /5129 Fax: (03)

50 CIMB-Principal Asset Management Berhad ( K) Enquiries: Customer Care Centre (603) Website