MANAGER : AMANAHRAYA INVESTMENT MANAGEMENT SDN BHD

Transcription

1 AmanahRaya Islamic Cash Management Fund (ARICMF) THIS INFORMATION MEMORANDUM IS DATED 2 8 TH FEBRUARY MANAGER : AMANAHRAYA INVESTMENT MANAGEMENT SDN BHD TRUSTEE : PB TRUSTEE SERVICES BERHAD INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THE INFORMATION MEMORANDUM. IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER. UNITS OF AMANAHRAYA ISLAMIC CASH MANAGEMENT FUND CAN ONLY BE SOLD TO QUALIFIED INVESTORS AS PRESCRIBED UNDER PARAGRAPH 3.02 OF GUIDELINES ON WHOLESALE FUND.

2 ABOUT THIS DOCUMENTS Responsibility Statement This Information Memorandum has been reviewed and approved by the Directors of AmanahRaya Investment Management Sdn Bhd and they collectively and individually accept full responsibility for the accuracy of the information. Having made all reasonable inquiries, they confirm to the best of their knowledge and belief, there are no false or misleading statements, or omission of other facts which would make any statement in the Information Memorandum false or misleading. Datuk Mohamed Adnan bin Ali (Chairman) (Independent/ Non-Executive) Meor Khairi bin Meor Mohd Bazid (Managing Director/Chief Executive Officer) Azhar bin Harun (Independent/ Non-Executive) Dato Haji Che Pee bin Samsudin (Non-Independent/Non-Executive) Haji Zulkifly bin Sulaiman (Independent/Non-Executive) Hawariah binti Idris (Non-Independent/Non-Executive) Investors are advised to note that recourse for false or misleading statements or acts made in connection with the Information Management is directly available through Sections 248, 249 and 357 of the Capital Markets and Services Act Statements of Disclaimer The Securities Commission has approved the issue, offer or invitation in respect of the wholesale fund, the subject of this Information Memorandum, and that the approval shall not be taken to indicate that the Securities Commission recommends the investment. The Securities Commission will not be liable for any non-disclosure on the part of the AmanahRaya Investment Management Sdn Bhd and takes no responsibility for the contents of the Information Memorandum, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the content of this Information Memorandum. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IN CONSIDERING THE INVESTMENT, INVESTORS WHO ARE IN DOUBT AS TO THE ACTION TO BE TAKEN SHOULD CONSULT PROFESSIONAL ADVISERS IMMEDIATELY. AmanahRaya Islamic Cash Management Fund has been certified as being Shariah compliant by the Shariah appointed for the fund. Adviser i

3 TABLE OF CONTENTS ABOUT THIS DOCUMENTS i TABLE OF CONTENTS ii GLOSSARY OF TERMS iii CORPORATE DIRECTORY v 1. KEY DATA INFORMATION 1 2. FUND DETAILS General Information Fees and Charges Investment Strategies and Policies Valuation of Assets 9 3. SALE AND PURCHASE OF UNITS Pricing of Units RIGHT AND LIABILITIES OF UNIT HOLDERS Rights of Unit Holders Liabilities of Unit Holders Unclaimed Monies CLIENT COMMUNICATION THE MANAGEMENT COMPANY The Manager Summary of Financial Position of ARIM Role of The Manager The Board of Directors The Investment Committee Profile of the Key Management Staff of ARIM The Investment Team Circumstances That May Lead Towards The Retirement, Removal or Replacement of The Management Company Powers of The Manager to Remove The Trustee Policy on Conflict of Interest Policies and Procedures on Anti Money Laundering Material Litigations THE TRUSTEE SALIENT TERMS OF THE DEEDS 22 ii

4 9. SHARIAH ADVISER TAXATION STATEMENT OF CONSENT DOCUMENTS AVAILABLE FOR INSPECTION UNIT TRUST LOAN FINANCING RISK DISCLOSURE STATEMENT DIRECTOR S DECLARATION 37 iii

5 GLOSSARY OF TERMS AmanahRaya Investment Management or ARIM or the Manager ARB ARICMF or The Fund Assets of the Fund BNM Business Day(s) Bursa Malaysia Collecting Points AmanahRaya Investment Management Sdn Bhd ( H) Amanah Raya Berhad ( V). AmanahRaya Islamic Cash Management Fund. A unit trust s holdings, which may include derivatives securities, cash and bank deposits, other money market instruments and all amounts due to the Fund. Bank Negara Malaysia. A day on which Bursa Malaysia is open for trading. Bursa Malaysia Berhad Any branch, outlet or any premise only as a conduit used to facilitate purchase and redemption of unit trust funds. Collection Points are not distribution points for marketing and distribution of unit trusts in accordance to the Guidelines on Marketing And Distribution of Unit Trusts issued by SC. Common Fund Shall have the same meaning as prescribed under Clause 25 of the PTCA 1995, vis-à-vis all capital money available for investments which are held by ARB after the date of which PTCA 1995 is in force, shall form the common fund and shall be invested in any investments permitted by law of investment of trust funds. CMSA 2007 Capital Markets and Services Act 2007 Deed, The Deed The Deed dated 7 th November 2007 and supplemental deed(s), if applicable, entered into between the Manager and the Trustee, agreeing to be bound by the provisions of the Deed. Financial Institutions FIMM Forward Pricing General Investment Account (GIA) GII Guidelines IBFIM Any locally incorporated institutions that are licensed and regulated by BNM and/or SC or foreign incorporated institutions that are regulated by the equivalent regulatory authority abroad. Federation of Investment Managers Malaysia. The Buying/Selling price for units is the NAV per unit of the Fund as at the next valuation point, after the request for redemption/purchase is received by the Manager. An investment account based on either Mudharabah or Murabahah that works on profit sharing basis and fixed profit income basis respectively. Government Investment Issue which are government securities based on Islamic principles, issued by the Government of Malaysia and placed on competitive tender with maturities of one year or more. Guidelines on Wholesale Funds dated 18 th February 2009 issued by the SC. IBFIM ( W) iv

6 Latest Practicable Date (LPD) MARC NAV or Net Asset Value NAV per unit Person PB Trustee or Trustee As at 31 st January 2014, being the latest practicable date for the purposes of ascertaining certain information contained in this Information Memorandum. Malaysian Rating Corporation Berhad ( V). Net Asset Value of the Fund is determined by deducting the value of all the Fund s liabilities from the value of all the Fund s assets, at the valuation point. For the purpose of computing the annual management fee and annual trustee fee, the NAV of the Fund should be inclusive of the management fee and the trustee fee for the relevant day. The Net Asset Value of the Fund divided by the total number of units in issue. For the purpose of Unit holder it includes but not limited to a firm, a body corporate, an unincorporated association, an authority, an Individual and non- Individual. PB Trustee Services Berhad (7968-T). PTCA 1995 Public Trustee Corporation Act Qualified Investors RAM Ratings SACSC SC SC Guidelines or Guidelines Selling Price Shariah Requirements Shariah The Shariah Adviser Short Term Special Resolution As per the definition stated in the Guidelines on Wholesale Fund dated 18 th February 2009 issued by the SC. RAM Rating Services Berhad, a subsidiary of RAM Holdings Berhad (formerly known as Rating Agency Malaysia Berhad). Shariah Advisory Council of the Securities Commission. Securities Commission. The Guidelines on Unit Trust Funds issued by the SC and includes any schedules, appendices and guidelines contained therein and any amendments or modification made thereto, from time to time. NAV per unit of the Fund and the price at which the Manager sells the Units to the Unit Holders. A phrase or expression which generally means making sure that any human conducts must not involve any elements which are prohibited by the Shariah and that in performing and that in performing that conduct all the essential elements that make up the conduct must be present and each essential element must meet all the necessary conditions required by the Shariah for that element. Islamic Law comprising the whole body of rulings pertaining to human conducts derived from sources of Shariah. Refers to IBFIM ( W) or any Shariah Adviser appointed for the Fund which includes its permitted assigns,successors in title and any new or replacement Shariah Adviser; A period of less than 3 years. A resolution passed at a meeting of Unit Holders duly convened in accordance with the Deed and carried by a majority of not less than three-fourths of the Unit Holders voting thereat upon a show of hands of hands or if a poll is duly demanded and taken by a majority consisting of not less than three-fourths in number of the votes given on such poll. v

7 Sukuk The Act The Fund The Information Memorandum or Info Memo UIC Unit holder Means certificates of equal value which evidence undivided ownership or investment in the assets using Shariah principles and concepts endorsed by the Shariah Advisory Council of the Securities Commission, but shall not include any agreement for a financing/investment where the financier/investor and customer/investee are signatories the agreement and where the financing/investment of money is in the ordinary course of business of the financier/investor, and any promissory note issued under the terms of such agreement; Capital Markets and Service Act 2007 including all amendments thereto and all regulations, rules and guidelines issued in connection therewith. Refers to AmanahRaya Islamic Cash Management Fund. Information Memorandum for AmanahRaya Islamic Cash Management Fund. Unit In Circulation refer to total number of units in issue at a point in time. The person registered as the holder of a unit or units including persons jointly registered. vi

8 CORPORATE DIRECTORY The Manager & Investment Manager: AmanahRaya Investment Management Sdn Bhd Business address Tingkat 7 & 8 Wisma AmanahRaya No 2 Jalan Ampang Kuala Lumpur Tel: (03) Fax: (03) Registered address Tingkat 11 Wisma AmanahRaya No 2 Jalan Ampang Kuala Lumpur Tel: (03) Fax: (03) Principal Banker: Malayan Banking Berhad (3813-K) No 105, Jalan Bunus, Off Masjid India Kuala Lumpur Tel: (03) Fax: (03) Tax Consultant of the Fund: Ernst & Young Tax Consultants Sdn Bhd ( K) Level 23A, Menara Milenium, Jalan Damanlela Pusat Bandar Damansara Kuala Lumpur Tel: (03) Fax: (03) Board of Directors Datuk Mohamed Adnan bin Ali (Chairman) * Meor Khairi bin Meor Mohd Bazid (Managing Director/Chief Executive Officer) Dato Haji Che Pee bin Samsudin Azhar bin Harun * Haji Zulkifly bin Sulaiman * Hawariah binti Idris *Independent member Investment Committee Datuk Mohamed Adnan bin Ali (Chairman)* Azhar bin Harun* Haji Zulkifly bin Sulaiman* *Independent member Audit Committee Datuk Mohamed Adnan bin Ali (Chairman)* Dato Haji Che Pee bin Samsudin * Independent member Risk Management & Compliance Committee Azhar bin Harun (Chairman)* Datuk Mohamed Adnan bin Ali* *Independent member Company Secretary Norhaslinda Samin (LS8512) Jerry Jesudian a/l Joseph Alexander (MAICSA ) Tingkat 11, Wisma AmanahRaya No 2 Jalan Ampang Kuala Lumpur The Trustee: PB Trustee Services Berhad (7968-T) 17th Floor, Menara Public Bank, No 146, Jalan Ampang, Kuala Lumpur Tel : (03) Fax : (03) The Custodian : Bank Muamalat Malaysia Berhad (6175-W) Treasury Processing & Settlement Level 24 Menara Bumiputra, Jalan Melaka Kuala Lumpur Tel. No: / Fax No: Shariah Adviser: IBFIM ( W) 3 rd Floor, Menara Takaful Malaysia Jalan Sultan Sulaiman Kuala Lumpur Tel : (03) Fax : (03) Website : vii

9 1. KEY DATA INFORMATION Fund Name Fund Category Fund Type Initial Offer Period (IOP) NAV per unit during IOP Financial Year End Asset Allocation Benchmark Investment Strategy Investor s Profile AmanahRaya Islamic Cash Management Fund (ARICMF). Wholesale Islamic Money Market Fund. Income. 1 day. RM th September. The Fund may invest up to 100% in short-term Islamic financial instruments with maturity of not more than 365 days. Up to 10% of the NAV of the Fund may be invested in short-term sukuk, Islamic money market instruments and Islamic Negotiable Instruments with remaining maturity exceeding 365 days but no longer than 732 days. Maybank Islamic Overnight Repo Rate (obtainable from The Fund shall invest up to 100% of its NAV in a diversified portfolio of good value short-term Islamic financial instruments carrying a minimum credit rating of AA3/P1 (RAM or equivalent) and Islamic money market instruments, including Islamic Negotiable Instruments, Islamic Accepted Bills, Islamic commercial papers and an equivalent form of Islamic deposit with licensed financial institutions. The Fund is primarily suitable for low risk investors who are generally conservative, risk averse and prefer a short-term investment. Qualified Investors Qualified Investors are defined by SC s Guidelines on Wholesale Funds dated 18 th February 2009 as follows :- (a) an individual whose total net personal assets exceed RM3 million or its equivalent in foreign currencies; (b) a corporation with total net assets exceeding RM10 million or its equivalent in foreign currencies based on the last audited accounts; (c) a unit trust scheme or prescribed investment scheme; (d) a company registered as a trust company under the Trust Companies Act 1949 which has discretion in the investment of trust assets of a trust with total net assets exceeding RM10 million or its equivalent in foreign currencies; 1

10 (e) (f) (g) (h) (i) a corporation that is a public company under the Companies Act 1965 or under the laws of any other country, which has been allowed by the SC to be a trustee for the purposes of the CMSA and has discretion in the investment of trust assets of a trust with total net assets exceeding RM10 million or its equivalent in foreign currencies; a pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967; a holder of a Capital Markets Services Licence carrying on the business of dealing in securities; any other fund manager; a person who acquires securities pursuant to an offer, as principal, if the aggregate consideration for the acquisition is not less than RM250,000 or its equivalent in foreign currencies for each acquisition; a licensed institution; an Islamic bank; and (j) (k) (l) an insurance company licensed under the Insurance Act Principal Risks of Investing in the Fund Sales Charge (% of NAV per unit) Other Charges Switching Fee Transfer Fee Redemption Fee Management Fee Trustee Fee Market Risk Credit/ default risk Interest rate or Price risk Liquidity risk Nil. Any applicable bank charges and other bank fees incurred as a result of purchasing or withdrawal of units will be borne by the investor. At the Manager s discretion. Not applicable. Nil. Up to 0.5% per annum of the NAV of the Fund. Up to 0.08% per annum of the NAV of the Fund, subject to a minimum of RM18,000 per annum. 2

11 Fund Expenses Minimum Initial Investment Minimum Units Held Minimum Additional Investment Frequency and Minimum Units Redeemed Period of Payment of Redemption Proceeds Switching Facility Transfer Facility Distribution Policy The Trustee These include audit fee, tax fee and administration expenses. RM100,000 (to be paid via Telegraphic Transfer payable to AmanahRaya Investment Management Sdn Bhd ). 500,000 units. RM1,000 (to be paid via Telegraphic Transfer payable to AmanahRaya Investment Management Sdn Bhd ). Minimum 10,000 units or RM 10,000 whichever is higher. Next Business Day after the redemption application is received by the Manager at or before 10.30a.m. on any Business Day. Any redemption received after the cut-off time will be considered to be received on the next Business Day, at the Manager s discretion. At the Manager s discretion. Switching from Shariah-compliant unit trust funds to conventional funds is discouraged, especially to Muslim unit holders. Transferred is prohibited. The Fund endeavors to distribute income on a monthly basis by way of reinvestment in the form of additional units. PB Trustee Services Berhad THERE ARE FEES AND CHARGES INVOLVED AND INVESTORS ARE ADVISED TO CONSIDER THE FEES AND CHARGES BEFORE INVESTING IN THE FUND. UNIT PRICES AND DISTRIBUTION PAYABLE, IF ANY, MAY GO DOWN AS WELL AS UP. FOR INFORMATION CONCERNING SPECIFIC RISKS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE SPECIFIC RISK COMMENCING ON PAGE 6. PAST PERFORMANCE OF THE FUND IS NOT AN INDICATION OF ITS FUTURE PERFORMANCE. INVESTOR WHO INTEND TO FINANCE AN INVESTMENT IN A SHARIAH-COMPLIANT FUND, OR FOR THAT MATTER ANY SHARIAH-COMPLIANT INVESTMENT, ARE ADVISED TO SEEK FOR ISLAMIC FINANCING TO FINANCE THEIR INVESTMENT. 3

12 2. FUND DETAILS 2.1 General Information Approved Fund Size Initial Offer Period (IOP) Initial Offer Price Manager s Single Pricing Regime Minimum Initial Investment Minimum Additional Investment Minimum Units Held 1, million units 1 day. Proceeds received from investors will be invested on the following day. NAV per unit during Initial Offer Period is RM The single pricing which equates to sales and redemptions quoted and transacted on a single price (i.e. NAV per unit), offer many advantages to investors. Under this practice, distribution charge (service charge) are separately disclosed, therefore it is easier to understand and fairer to investors as they can see what they are being charged. Such transparency would also facilitate the investor in comparing the different charges imposed by various distribution channels and assist investors in making an informed decision about their choice of investment products as well as the preferred distribution channel. In addition, with all charges separately stated, investors are able to clearly gauge or ascertain the performance of their investment. RM100,000 (Ringgit Malaysia One Hundred Thousand only) to be paid via Telegraphic Transfer payable to AmanahRaya Investment Management Sdn Bhd RM1,000 (Ringgit Malaysia One Thousand only) to be paid via Telegraphic Transfer payable to AmanahRaya Investment Management Sdn Bhd The minimum units to be held by a Unit Holder in order to remain in the Fund are 500,000 units. 2.2 Fees and Charges Fees payable by the Investor (directly incurred by the investors when investing in the Fund, unless otherwise stated) :- Sales Charge Redemption Fee Transfer Fee Switching Fee Management Fee Nil No redemption charge levied on the redemption of units for the Fund. Not applicable as transfer from one Unit Holder to another is prohibited for this Fund. Switching from ARICMF to other Funds managed by the Manager may or may not incur fee. The Fund pays an annual management fee of up to 0.5% of the NAV to the Manager for managing the Fund. The management fee is calculated on a daily basis and paid monthly to the Manager. 4

13 Illustration: For example, the NAV of the Fund is RM30 million. Then, the daily accrued management fee that paid monthly to the Manager is: Assuming the daily NAV is unchanged at RM30 million, then the daily accrued management fee is: RM30 million x 0.5% x 1/365 = RM and Monthly amount paid to the Manager: RM X 30 = RM12, 328, 80 Trustee Fee The Fund pays an annual trustee fee (inclusive of local custodian fee but excluding foreign sub-custodian fee) of up to 0.08% per annum of the NAV of the Fund, subject to a minimum fee of RM18,000 per annum. In addition to the annual trustee fee, which includes the transaction fee, i.e. the fee incurred for handling purchase/sale of local investments, the Trustee may be reimbursed by the Fund for any expenses properly incurred by it in the performance of its duties and responsibilities. The trustee fee is calculated daily and paid monthly. Illustration: Assuming the NAV of the Fund is RM30 million throughout the month, and the Trustee fee is 0.08% p.a., then the daily accrued trustee fee would be: RM30 million x 0.08% x 1/365 = RM65.75 and Monthly amount paid to the Trustee: RM65.75 X 30 = RM1, Administrative Fee Only direct fees or costs incurred will be paid out of the Fund. These include the following: Commissions/fees paid to brokers/dealers in affecting dealings in the investments of the Fund; Tax and other duties charged on the Fund by the Government and other authorities; The fee and other expenses properly incurred by the auditor appointed for the Fund; Fees for the valuation of any investments of the Fund by independent valuers for the benefit of the fund; Cost incurred for the modification of the Deed of the Fund other than those for the benefit of the Management Company or Trustee; Cost incurred for any meeting of the Unit Holders other than those convened by, or for the benefit of, the Management Company or Trustee; and Other fees/expenses directly related to the Fund. Expenses related to the issuance of this Info Memo will be borne by the Manager. There are fees and charges involved and investors are advised to consider the fees and charges before investing in the Fund. Policy on Stock Broking Rebates and Soft Commissions The Manager or any delegate thereof must not retain any rebate from, or otherwise share in any commissions with, any broker in consideration for direct dealings in the investments of the Fund. Accordingly, any rebate or shared commission should be directed to the account of the Fund concerned. However, the Manager or any delegate thereof may and intends to retain goods and services ( soft commissions ) from any broker, only of the goods and services which are of demonstrable benefit to the Unit Holders such as research materials and computer software that are incidental to the investment management activities of the Fund. Distribution Policy The Fund endeavors to distribute income on a monthly basis by way of reinvestment in the form of additional units. There is no incidental 5

14 cost associated with the reinvestment. 2.3 Investment Strategies and Policies Objective Investor s Profile Asset Allocation Investment Strategies and Policies The Fund seeks to provide investors with a regular income stream and high level of liquidity to meet cash flow requirement while maintaining capital preservation. The Fund is primarily suitable for low risk investors who are generally conservative, risk averse and prefer a short-term Shariah compliant investment. The Fund may invest up to 100% in short-term sukuk with maturity of not more than 365 day. Up to 10% of the NAV of the Fund may be invested in short-term sukuk, Islamic money market instruments and Islamic Negotiable Instruments with remaining maturity exceeding 365 days but no longer than 732 days. The Fund shall invest up to 100% of its NAV in a diversified portfolio of good value short-term Islamic financial instruments carrying a minimum credit rating of AA3/P1 (RAM or its equivalent) and Islamic money market instruments, including Islamic Negotiable Instruments, Islamic Accepted Bills, Islamic commercial papers and an equivalent form of Islamic deposit with licensed financial institutions. In selecting good value financial instruments, the following are the more important considerations: issuer s and/or guarantor s industry and business medium- to longterm outlook; issuer s and/or guarantor s financial strength and gearing levels; issuer s and/or guarantor s cash-flow quality and volatility; issuer s and/or guarantor s expected future cash-flow and ability to pay profit and principal; issuer s and/or guarantor s ratings by RAM or MARC; duration and interest rate sensitivity; collateral type and value, and claims priority; and price and yield-to-maturity. Specific Risks of the Fund There are specific risks associated with the Shariah compliant securities/ instruments in which the Fund will invest. These include: Market Risk Market risk arises due to fluctuations in market values of investments. Such fluctuations occur because of factors that affect the entire market. Market risk cannot be eliminated by diversification. It stems from the fact that there are economy-wide perils which threaten all businesses. Hence investors will be exposed to market uncertainties, and no matter how many securities are held, fluctuations in the economy, political and social environment will affect the market price of the investments. 6

15 Credit/Default Risk Credit or default risk is a concern for sukuk. The risk arises when an issuer is unable to service any income payments or pay the principal amount upon redemption. In such cases, investors may suffer significant capital losses with respect to their capital invested and income foregone. The management of credit risk is largely accounted for by the Fund s management of issue-specific risk. This refers to the emphasis on credit analysis conducted to determine issuer s or guarantor s ability to service promised payments. Interest Rate or Price Risk All fixed income investors are exposed to interest rate risk. Changes in the level of interest rates will cause demand for sukuk to change inversely. This risk can largely be eliminated by holding the Shariah compliant instruments until maturity, thereby locking in price and yields. However, whether the Fund will hold any Shariah compliant instrument until maturity will depend on the actual and expected changes in interest rates. The Fund also manages interest rate risk by considering each Shariah compliant instrument s sensitivity to interest changes as measured by its duration. When interest rates are expected to increase, the Fund would switch to Shariah compliant instruments with lower duration that are less sensitive to interest rate changes. (Note: Interest rate is a general economic indicator that will have the impact on the management of the Fund regardless of whether it is a Shariah-compliant fund or otherwise. It does not in any way suggest that this Fund will invest in conventional financial instrument. All investments carried out for this Fund are in accordance with Shariah requirements.) Liquidity Risk Liquidity risk is the risk that the instrument invested in cannot be readily sold and converted into cash. This can occur when trading volume for the instrument is low and / or when there is a lack of demand for the instrument. In managing the liquidity risk, the Fund will employ liquidity or volume traded analysis on primary and secondary markets for all the instrument types. Where applicable, the Fund will look into the historical volume transacted for the instruments in question. Thereafter, the appropriate asset allocation can be made for each Shariah compliant security/instrument with regard to reducing liquidity to a comfortable level in relation to that Shariah compliant security/instrument s risk return profile. Liquidity risk is managed by the Fund s credit selection and diversification policies. Risk Management The Fund has in place a proper risk management structures throughout the entire investment management process. Various measures include: (a) Adhering to the Fund s investment objectives, policies and strategies of the Fund; (b) Undertaking stringent evaluation of movements in market prices and regularly monitoring, reviewing and reporting to the Investment Committee to ensure that all the Fund s investment objectives are met; (c) Employing active and effective asset allocation strategy; (d) Employing a stringent screening process by conducting fundamental analysis of economic, political and social factors to evaluate their likely effects on the performance of the markets and sectors; 7

16 (e) (f) Practicing prudent liquidity management in a timely and cost effective manner; and May use Shariah-compliant financial derivatives for the purposes of hedging only when deemed appropriate after taking into account the costs of hedging. Benchmark Permitted Investments and Investment Restrictions Maybank Islamic Overnight Repo Rate (obtainable from The Fund may invest in the following investments subject to the SC Guidelines, Shariah r e q u i r e m e n t, the Fund s objective and as approved by the Shariah Advisory Council of the SC and/or the Shariah Adviser: 1. All sukuk issued in Malaysia and rated by approved rating agencies such as Government Investment Issues, Islamic Accepted Bills, Bank Negara Monetary Notes-i, Islamic Negotiable Instruments, Cagamas sukuk and any other Islamic money market instruments; 2. Other obligations issued or guaranteed by the Malaysian Government, Bank Negara Malaysia, State Governments and Government- related agencies; 3. Corporate sukuk traded in Islamic money market and either bankguaranteed or carrying a minimum rating at least AA3/P1 rating by RAM, or MARC equivalent; and 4. Islamic deposits with licensed financial institutions and placements of money at call with investment banks. Investment Limits The restrictions and investment limits for this Fund are as follows:- 1. The value of a fund s investments in permitted investments must not be less than 90% of the fund s NAV; 2. The value of a fund s investments in permitted investments which have a remaining maturity period of not more than 365days must not be less than 90% of the fund s NAV; 3. The value of a fund s investments in permitted investments which have a remaining maturity period of more than 365 days but fewer than 732 days must not exceed 10% of the fund s NAV; 4. The value of the fund s investments in Islamic debentures and Islamic money market instruments issued by any single issuer must not exceed 20% of the fund s NAV; 5. The issuer limit in (4) may be increased to 30% if the Islamic debentures are rated by any domestic or global rating agency to be of the best quality and offer highest safety for timely payment of profit and principal; 6. The value of a fund s placement in Islamic deposits with any single licensed institution, must not exceed 20% of the fund s NAV; 7. The value of the fund s investments in Islamic debentures and Islamic money market instruments issued by any group of companies must not exceed 30% of the fund s NAV; 8. A fund s investments in Islamic debentures must not exceed 20% of the securities issued by any single issuer; and 9. A fund s investments in Islamic money market instruments must not exceed 20% of the instruments issued by any single issuer. The above limits and restrictions must be complied with at all times based on the most up-to-date value of the Fund and value of the investments. However, under the Guidelines, a 5% allowance in excess of any limit or restriction may be permitted where the limit or restriction is breached through the appreciation or depreciation of the NAV of the Fund (whether as a result of an appreciation or depreciation in the value of the 8

17 investments or as a result of repurchase of units or payment made from the Fund). The Manager will not make any further acquisitions to which the relevant limit is breached and the Manager should within a reasonable period of not more than 3 months from the date of the breach take all necessary steps and actions to rectify the breach. 2.4 Valuation of Assets In undertaking any of its investments, the Manager will ensure that all the assets of the Fund will be valued fairly. For unlisted Shariah compliant securities, if reliable quotation exists, market value would be used. In the absence of reliable market quotation, valuation would be based on the average price obtained from at least 3 independent dealers. The valuation of these Shariah compliant securities will be calculated fortnightly or more frequent when the needs arise. These methods of valuation are verified by the auditor of the Fund and approved by the Trustee. Policies on Gearing and Minimum Liquid Assets Requirements The Fund is not permitted to borrow cash or other assets (including the borrowing of Shariah compliant securities within the meaning of the Guidelines on Securities Borrowing and Lending) in connection with its activities. Further, the Fund may not assume, guarantee, endorse or otherwise become directly or contingently liable for or in connection with any obligation or indebtedness of any person. As this is a wholesale Islamic money market fund and highly liquid, there will be no minimum limit for Islamic liquid assets. Shariah Investment Guidelines, Cleansing Process and Zakat (tithe) for the Fund The following matters are adopted by IBFIM in determining the Shariah status of investments of the Fund. Shariah Investment Guidelines Sukuk and Islamic money market instruments : IBFIM will review any sukuk and/or Islamic money market instruments based on the data available at Bond Info Hub ( and Fully Automated System For Issuing/Tendering ( Cleansing for the Fund Wrong Investment This refers to Shariah non-compliant investment made by the Manager. The said investment will be disposed of/withdrawn with immediate effect. In the event of the investment resulted in gain (through capital gain and/or dividend/profit), the gain is to be channeled to baitulmal or any other charitable bodies as advised by the Shariah Adviser. If the disposal of the investment resulted in losses to the Fund, the losses are to be borne by the Manager. Zakat (tithe) for the Fund The Fund does not pay zakat on behalf of Muslim individuals and Islamic legal entities who are investors of the Fund. Thus, investors are advised to pay zakat on their own. 9

18 3. SALE AND PURCHASE OF UNITS 3.1 Pricing of Units Computation of NAV Net Asset Value of the Fund is determined by deducting the value of the Fund s liabilities from the value of the Fund s assets, at the valuation point. For the purpose of computing the annual management fee and annual trustee fee, the NAV of the Fund should be inclusive of the management fee and the trustee fee for the relevant day. As an illustration, if for example the NAV of the Fund is RM 50,000,000 and the number of Units in Circulation is 100,000,000, then the NAV per Unit is:- RM 50,000,000 = RM ,000,000 Pricing of Units The prices of Units of the Funds are determined by using the forward pricing formula where prices are based on the NAV per Unit of the relevant Fund at the end of a Business Day after the application for Unit is received by the Manager. The single pricing which equates to sales and redemptions quoted and transacted on a single price (i.e. NAV per unit), offer many advantages to investors. Under this practice, distribution charge (service charge) are separately disclosed, therefore it is easier to understand and fairer to investors as they can see what they are being charged. Such transparency would also facilitate the investor in comparing the different charges imposed by various distribution channels and assist investors in making an informed decision about their choice of investment products as well as the preferred distribution channel. In addition, with all charges separately stated, investors are able to clearly gauge or ascertain the performance of their investment. Service Charge Repurchase Charge Frequency of Valuation Sale of Units The Manager does not impose a service charge on the purchase of Units of ARICMF by investors. Units are sold by the Manager at NAV per unit. The Manager does not impose a repurchase charge on the purchase of units of ARICMF by the Manager. Units are purchased by the Manager at NAV per unit. Valuation of the Fund is carried out at the end of each Business Day. As forward pricing method is used for this Fund, any request received at or before 10.30a.m. on any Business Day, the units would be created and/or cancelled based on the NAV per Unit at the end of that Business Day. Any request received after the cut-off time will be considered to be received on the next Business Day, at the Manager s discretion. Investors can obtain the Info Memo, account opening form and investment application form from ARIM s Office or any authorized agent. The Info Memo is also available at the Managers website at The Fund application from can be handed directly to ARIM s Office, or any authorized agent or sent by mail, together with a copy of TT Form, cheque or bank draft made payable to AmanahRaya Investment Management Sdn Bhd. If payment is by cheque and Bank Draft, it must be cross and drawn on a local bank. The investment of the Fund shall only commenced upon the Bank s clearance of the cheque and bank draft.\ Bank charges, where relevant, for outstation cheques will be borne by the investors. Individual or joint- 10

19 application must be accompanied by a copy of the applicant s identity card or passport or other document of identification. Application by a corporation must be accompanied by a certified true copy of its Memorandum and Articles of Association. Certificate of Incorporation, Form 24, Form 44, Form 49 and Board Resolution relating to the investment, a list of their authorized signatories and their respective specimen signatures. Investors are also required to sign off a Declaration Form as verification to indicate that they comply with the requirement referring to Qualified Investors as stated in the Guidelines on Wholesale Fund. Sale of Units will only be honored upon cheque clearance. If sale of Units is by way of telegraphic transfer, a bank validated fund transfer form must be presented as evidence as good for payment. Redemption of Units Payment of Redemption Proceeds Unit Holders may redeem their Shariah compliant investments in the Fund at any point in time by simply completing the redemption application form and returning it to the Manager on any Business Day. Redemption must be made in terms of units and not Ringgit Malaysia (RM) values. The amount to be received by the Unit Holder for redemption of units will be calculated by multiplying the number of units redeemed by the NAV of the Fund. The Manager may repurchase Units utilizing its own fund where Unit Holders will be paid within the next Business Day from the day the redemption application is received by the Manager at or before the cut-off time of 10.30a.m. Any redemption received after the cut-off time will be considered to be received on the next Business Day, at the Manager s discretion. Alternatively, the Manager may request the Trustee to cancel units of the Fund for the purpose of meeting Unit Holders redemption requests. There is no restriction on the number of times and units a Unit Holder can redeem. Nonetheless, the Manager shall not be bound to comply with the request for partial redemption, if this request resulted in the Unit Holder s holding being less than 500,000 units in the Fund. Transfer Ownership of Units Switching Facilities Cut off Time to Purchase and Redeem Transfer of ownership of investments is not allowed for this Fund. Switching from this Fund into other funds managed by the Manager may be permitted at the Manager s discretion. If permitted, Unit Holders of this Fund will have to redeem the units and acquire the intended fund at the Manager s prevailing Selling Price per Unit. Switching from Shariahcompliant unit trust funds to conventional funds is discouraged, especially for Muslim unit holders. A valid application to purchase or redeem units of the Fund received by ARIM before a.m will be processed using the NAV per unit calculated at the end of the same Business Day at the Manager s discretion, any application received after a.m or on a non-business Day will be processed using the NAV per unit calculated at the end of the next Business Day. Any incomplete application will not be processed, pending receipt of all necessary information. 11

20 4. RIGHT AND LIABILITIES OF UNIT HOLDERS 4.1 Rights of Unit Holders A Unit Holder has the right, among others, to the followings: (a) To receive the distribution of income, participate in any increase in the value of the units and to other such rights and privileges as set out under the Deed for the Fund; (b) To call for Unit Holders meetings, and to vote for the removal of the Trustee or the Manager through a special resolution; and (c) To receive annual and interim reports. However, a Unit Holder would not have the right to require the transfer to the Unit Holder of any of the investments of the Fund. Neither would a Unit Holder have the right to interfere with or question the exercise by the Trustee or the Manager on his/her behalf, of the rights of the Trustee as trustee of the investments of the Fund. 4.2 Liabilities of Unit Holders (a) No Unit Holder is liable for any amount in excess of the purchase price paid for the Units as determined pursuant to the Deed at the time the Units were purchased; (b) Unit holders shall not be under any obligation to indemnify the Trustee and/or the Manager in the event that the liabilities incurred by the Trustee and the Manager in the name of or on behalf of the Fund pursuant to and/or in the performance of the provisions of the Deed exceed the NAV of the Fund, and any right of indemnity of the Trustee and/or the Manager shall be limited to recourse to the Fund. 4.3 Unclaimed Monies Any moneys payable to Unit Holders which remain unclaimed after one year from the date of payment will be handled by the Manager in accordance with the requirements of the Unclaimed Monies Act, Prospective Unit Holders should read and understand the contents of the Information Memorandum and, if necessary, should consult their adviser(s). 12

21 5. CLIENT COMMUNICATION Unit Holders will/can receive regular updates on the Fund and on their investment through: (i) Newspapers From time to time, Unit Holders will be able to obtain information pertaining to the Fund from the Fund from the press. The Fund s daily unit buying and selling prices, the NAV per unit, annual management fee and sales charge will be quoted in at least 2 major newspapers to enable Unit Holders to monitor their investments. (ii) Financial Reports The Manager will provide Unit Holders with an annual report within 2 months of the Fund s financial year-end and quarterly reports within 2 months of the end of the quarterly period covered. A Financial Statement audited by the Fund s appointed auditors will be included in the annual report. The Trustee will prepare a report to Unit Holders in the annual report stating its opinion on the conduct of the Manager, in particular whether the Manager had managed the Fund in accordance with the limitation on its investment powers as set out in the Deed and whether the Manager had acted in accordance with the Deed, guidelines on unit trusts, securities laws and other relevant laws. (iii) Statement of Investment The Manager will issue a statement to Unit Holders confirming the current shareholdings and transactions relating to their units in the Fund every month. (iv) Customer Service ARIM will be pleased to provide more detailed information on your investments should you require this service. Our Customer Service personnel will always be willing to assist you in enquiries on the products, your investments and other administrative matters. You can contact our Customer Service personnel through the following: Telephone : (03) / 5277 Facsimile : (03) sales@arim.com.my 13

22 6. THE MANAGEMENT COMPANY 6.1 The Manager AmanahRaya Investment Management Sdn Bhd ( ARIM ) is a licensed asset management company under the Capital Markets and Services Act and a wholly-owned subsidiary of Amanah Raya Berhad. As at December 2011, the authorized and paid-up capital of ARIM stood at RM25 million and RM10 million respectively. Asset under management as at 31 st December 2013 is approximately RM6.847 billion, which makes ARIM one of the biggest non-bank backed fund management companies in Malaysia. The asset under management covers both Shariah and non-shariah mandates. Over the years, ARIM has invested vast resources in building up its infrastructure to provide a top notch fund management service. ARIM also has wealth of experience and competency in managing multiple asset classes, for both Ringgit and non-ringgit based investments, which include but not limited to equity, fixed income, unit trust, property, structured products and private equity. Currently, ARIM s list of clients include reputable pension funds, insurance companies, government agencies, nonprofit foundations, public listed companies and high net-worth individuals. 6.2 Summary of Financial Position of ARIM Unaudited Results for ten (10) months ended 31st December 2013 Audited Financial Year Ended 31st December Paid-up Capital 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 Shareholder s Funds 14,694,386 13,390,940 13,219,657 13,299,064 10,763,387 Turnover 15,725,569 16,789,380 12,537,008 11,430,902 8,544,515 Pre-Tax Profit/(Loss) 7,140,790 4,000,404 4,043,132 3,142, ,267 After Tax Profit/(Loss) 5,303,447 2,693,308 3,295,593 2,535,677 1,224, Role of The Manager The Manager is responsible for the investment management and marketing of the Fund; servicing Unit Holders needs; keeping proper administrative records of Unit Holders and the Fund; ensuring compliance with stringent internal procedures and guidelines of relevant authorities. 14

23 6.4 THE BOARD OF DIRECTORS There are six (6) members on the Board of Directors of ARIM consisting of three (3) Independent Directors and three (3) Non- Independent Directors. The Board of Directors oversees the management and operations of ARIM and meets quarterly. Role of Directors The Board of directors is responsible for the overall management of ARIM and its funds. The Board not only ensures corporate governance is practiced but policies and guidelines are adhered to. Members of The Board of Directors Datuk Mohamed Adnan bin Ali (Chairman) (Independent Non-Executive) Meor Khairi bin Meor Mohd Bazid (Managing Director/Chief Executive Officer) Azhar bin Harun (Independent/Non-Executive) Dato Haji Che Pee bin Samsudin (Non-Independent/Non-Executive) Haji Zulkifly bin Sulaiman (Independent/Non-Executive Hawariah binti Idris (Non-Independent/Non-Executive) 6.5 THE INVESTMENT COMMITTEE There are three (3) members on the Investment Committee of ARIM consisting three (3) Independent Members. Role of the Investment Committee The investment committee approves or recommends investment policies and procedures. The committee will continuously monitor the implementation of the investment policies against the predetermined benchmarks towards achieving a proper performance of the Fund. The investment committee will meet at least once every quarter or such other times as may be decided by the Chairman. Members of the Investment Committee Datuk Mohd Adnan Bin Ali (Chairman) Azhar bin Harun Haji Zulkifly bin Sulaiman 6.6 Profile of the Key Management Staff of ARIM Meor Khairi Meor Mohd Bazid (Managing Director / Chief Executive Officer) Meor Khairi Meor Mohd Bazid was appointed to the Board on 27 February He holds a Bachelor of Business Administration (Finance) and Master of Business Administration (Finance) from University of Toledo, Ohio, USA. He was a recipient of Jabatan Perkhidmatan Awam's full scholarships at both undergraduate and graduate levels. He began his working career as a Corporate Banking Officer at Arab Malaysian Merchant Bank in 1992, which back then was the biggest merchant bank in the country. In 1993, he joint DR Group Holdings as Assistant Finance Manager, where he was responsible in overseeing the group's cash flows, investment as well as insurance portfolio. His career then progressed into fund management industry when he began working as Assistant Portfolio Manager at SJ Asset Management ("SJAM") in 1995 and was appointed as the Chief Investment Officer of SJAM in In April 2008, after almost thirteen years, he left the aforementioned company to join ARIM, first as General Manager, Equity Research and later as the Chief Investment Officer. Besides overseeing the Research Department, he is also responsible in formulating the asset allocation and equity strategies. He has more than a decade of experience in investment in the Asian region. He had done extensive research work and company visits around the region in the last 13 years. He holds a Capital Markets and Services Representative s License under the Capital Markets & Services Act (2007) since He is familiar with investment product, trading system and risk management developments. Mohd Amir Shah Basir (Chief Operating Officer) Mohd Amir Shah joined Amanah Raya Berhad as an Accountant in year 2004 and was attached to various Departments including Operations and Accounts and Finance Department. He was entrusted to oversee the Trust and Estate Accounts and Operations besides managing the Company s and Group s Accounts. He joined ARIM in year Prior to joining Amanah Raya Berhad, he was working at PriceWaterHouseCoopers ( PwC ) for more than 4 years. During his tenure with PwC, he was attached to the Audit Business Assurance and Advisory Services under the Financial Industry Group and had been exposed to a wide range of Financial Services areas including Banking, Insurance, Investment, Asset Management and Unit Trust. He holds a Master of Business Administration in Finance from Putra University of Malaysia and Bachelor of Accountancy (Hons) from International Islamic University. He is also a Chartered Accountant and a Certified Financial Planner. 15