AMB SHARIAH VALUE PLUS FUND

Transcription

1 Level 34, Menara PNB 201-A Jalan Tun Razak Kuala Lumpur, Malaysia Tel: Fax: / AMB SHARIAH VALUE PLUS FUND Annual Report For the financial year ended 31 May 2018

2 CONTENTS PAGE Manager's Report 1-17 Trustee's Report 18 Statement by Manager 19 Report of the Shariah Committee 20 Independent Auditors' Report Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity 29 Statement of Cash Flows 30 Notes to the Financial Statements 31-71

3 Manager s report for the financial year ended 31 May 2018 A. Fund Information 1. Name of the Fund AMB Shariah Value Plus Fund (the Fund ) 2. Type of Fund Growth 3. Category of Fund Equity (Shariah) 4. Classes of units Classes of units A-MYR * C-MYR * B-USD B-JPY A-SGD B-SGD Currency Denomination RM (Ringgit Malaysia) RM (Ringgit Malaysia) USD (United States Dollar) JPY (Japanese Yen) SGD (Singapore Dollar) SGD (Singapore Dollar) Categories of Investors Retail Institutional Retail Retail Retail Retail Distribution Policy Distribution of income Distribution of income Accumulation of units Accumulation of units Distribution of income Accumulation of units * These units are only offered in Malaysia 5. Duration of the Fund The Fund is an open-ended Fund. 6. Launch date / Commencement date Share Class Launch date Commencement date Class A-MYR 16 June July 2015 Class C-MYR 16 June July 2015 Class B-USD 16 June July 2015 Class B-JPY 16 June July 2015 Class A-SGD 1 February February 2016 Class B-SGD 16 June July Fund s investment objective The Fund aims to provide unitholders with capital growth through investments in Shariahcompliant equities that are trading at a discount to their intrinsic values. 1

4 Manager s report for the financial year ended 31 May 2018 (cont'd) A. Fund Information (cont'd) 8. Fund distribution policy It is not the main objective of the Fund to distribute income as the main focus of the Fund is to secure capital growth in line with the performance of the Fund's benchmark. Any distribution of income (if any) is at the Manager's discretion, subject to Trustee's approval. 9. Fund s performance benchmark An absolute of 8% annualised growth in net asset value ("NAV"), compounded over a period of more than 5 years. 10. Has the Fund achieved its objective? During the period reviewed the Fund has delivered a negative net return of 6.29% mainly due to negative capital growth, underperforming the FBM Shariah Index returns of negative 4.91%. The Fund s performance did not exceed the 8% absolute target return per annum during the period reviewed due to stocks picks selection and asset allocation. The Fund s negative returns were contributed by a mix of diversified exposure across all sectors and from both regional and local equities. The main contributors to the Fund s performance were China Maple Leaf, SK Hynix, Tencent Holdings, Amorepacific Corp, and CSPC Pharmaceuticals. The main detractors were Matahari Putra Prima, Gabungan AQRS, Nippon Indosari, AAC Technologies and Sapura Energy. 11. The Fund's asset allocation policy The Fund will invest a minimum of 70% in Shariah-compliant equities and equity-related securities, and a minimum of 2% in Islamic deposits and/or Shariah-compliant money market instruments. The Fund may invest up to 50% of the Fund's NAV in the Asia Pacific ex-japan markets and in Shariah-compliant equities that derive the majority of revenue from the Asia Pacific ex-japan markets. 12. Strategy employed for the period under review The Fund has continued to invest in companies with strong earnings growth potential. In terms of sectorial weighting, tech, consumer staples and industrials are the three largest sector exposures in the Fund. In terms of asset allocation, the Fund has maintained an average investment level of 75% during the period under review. 13. Net income distribution for the financial year ended 31 May 2018 There was no distribution made by the Fund for the financial year ended 31 May

5 Manager s report for the financial year ended 31 May 2018 (cont'd) A. Fund Information (cont'd) 14. Breakdown of unitholdings as at 31 May 2018 Fund size As at 31 May 2018, the size of the Fund was 77,640,650 units. Units in circulation by Share Class (units) Units in circulation - Class A-MYR 75,570,000 60,605,000 Units in circulation - Class C-MYR 1,780,000 20,000 Units in circulation - Class B-USD 10,000 95,000 Units in circulation - Class B-JPY Units in circulation - Class A-SGD 15,000 15,000 Units in circulation - Class B-SGD 265,000 65,000 Total 77,640,650 60,800,650 Breakdown of unitholdings by Class of Units as at 31 May 2018 Class A-MYR Unitholdings 5,000 units and below 5,001 to 10,000 units 10,001 to 50,000 units 50,001 to 500,000 units 500,001 units and above Total No. of No. of unitholders % units ('000) % * , ** 75, * Included 14,206 units held by the Manager ** Included 67,695,332 units held under an Institutional Unit Trust Scheme Adviser Class C-MYR Unitholdings 5,000 units and below 5,001 to 10,000 units 10,001 to 50,000 units 50,001 to 500,000 units 500,001 units and above Total No. of No. of unitholders % units ('000) % * , , * Included 11,208 units held by the Manager 3

6 Manager s report for the financial year ended 31 May 2018 (cont'd) A. Fund Information (cont'd) 14. Breakdown of unitholdings as at 31 May 2018 (cont'd) Breakdown of unitholdings by Class of Units as at 31 May 2018 (cont'd) Class B-USD Unitholdings 5,000 units and below 5,001 to 10,000 units 10,001 to 50,000 units 50,001 to 500,000 units 500,001 units and above Total No. of No. of unitholders % units ('000) % * ** * Included 2,737 units held by the Manager ** Included 7,263 units held under an Institutional Unit Trust Scheme Adviser Class B-JPY Unitholdings 5,000 units and below 5,001 to 10,000 units 10,001 to 50,000 units 50,001 to 500,000 units 500,001 units and above Total No. of No. of unitholders % units ('000) % * * Included 650 units held by the Manager Class A-SGD Unitholdings 5,000 units and below 5,001 to 10,000 units 10,001 to 50,000 units 50,001 to 500,000 units 500,001 units and above Total No. of No. of unitholders % units ('000) % * * Included 15,000 units held by the Manager 4

7 Manager s report for the financial year ended 31 May 2018 (cont'd) A. Fund Information (cont'd) 14. Breakdown of unitholdings as at 31 May 2018 (cont'd) Breakdown of unitholdings by Class of Units as at 31 May 2018 (cont'd) Class B-SGD Unitholdings 5,000 units and below 5,001 to 10,000 units 10,001 to 50,000 units 50,001 to 500,000 units 500,001 units and above Total No. of No. of unitholders % units ('000) % * ** * Included 6,049 units held by the Manager ** Included 258,951 units held under an Institutional Unit Trust Scheme Adviser B. Performance Review 1. Key performance data of the Fund Category FY2018 FY2017 FPE2016 Portfolio Quoted equities - local (%) Quoted equities - foreign (%) Singapore Indonesia Taiwan Thailand Hong Kong Philippines South Korea Cash and other net assets (%) Total (%)

8 Manager s report for the financial year ended 31 May 2018 (cont'd) B. Performance Review (cont'd) 1. Key performance data of the Fund (cont'd) Category FY2018 FY2017 FPE2016 Class A-MYR NAV (RM) 36,909,341 31,601,832 5,033,728 Units in circulation (units) 75,570,000 60,605,000 9,975,000 NAV per unit (RM) Highest NAV per unit (RM) Lowest NAV per unit (RM) Net income distributed (RM) - 2,438,212 - Distribution date - 31/05/ Gross distribution per unit (sen) Net distribution per unit (sen) Class C-MYR NAV (RM) 943,303 11,154 4,384,047 Units in circulation (units) 1,780,000 20,000 8,640,000 NAV per unit (RM) Highest NAV per unit (RM) Lowest NAV per unit (RM) Class B-USD NAV (RM) 37, , ,598 Units in circulation (units) 10,000 95,000 95,000 NAV per unit (USD) Highest NAV per unit (USD) Lowest NAV per unit (USD) Class B-JPY NAV (RM) 209, , ,544 Units in circulation (units) NAV per unit (JPY) 8,784 8,871 8,288 Highest NAV per unit (JPY) 9,983 9,063 10,028 Lowest NAV per unit (JPY) 8,491 7,584 8,048 6

9 Manager s report for the financial year ended 31 May 2018 (cont'd) B. Performance Review (cont'd) 1. Key performance data of the Fund (cont'd) Category FY2018 FY2017 FPE2016 Class A-SGD NAV (RM) 23,300 24,874 22,349 Units in circulation (units) 15,000 15,000 15,000 NAV per unit (SGD) Highest NAV per unit (SGD) Lowest NAV per unit (SGD) Class B-SGD NAV (RM) 385, ,682 91,359 Units in circulation (units) 265,000 65,000 65,000 NAV per unit (SGD) Highest NAV per unit (SGD) Lowest NAV per unit (SGD) Management Expense Ratio ("MER") (%) (2) Portfolio Turnover Ratio ("PTR") (times) (3) Investors are reminded that past performance of the Fund is not necessarily an indicative of its future performance and that unit prices and investment returns may fluctuate. Note: (1) Actual return of the Fund for the financial year is computed based on the daily average NAV per unit, net of Manager's and Trustee's fees. (2) (3) The Fund's MER decreased to 1.90% due to increased average NAV in the current financial year under review. The Fund's PTR increased to 2.12 times due to increased trading activities in the current financial year under review. 7

10 Manager s report for the financial year ended 31 May 2018 (cont'd) B. Performance Review (cont'd) 2. Performance of the Fund since inception to 31 May 2018 Class A-MYR Since 1 year inception Category to to % % Total return of the Fund (6.33) 5.25 Average total return (6.33) 1.78 Annualised return of benchmark Performance of Class A-MYR of the Fund for the financial year ended 31 May 2018 Source: Lipper Class C-MYR Since 1 year inception Category to to % % Total return of the Fund (4.98) 5.98 Average total return (4.98) 2.02 Annualised return of benchmark

11 Manager s report for the financial year ended 31 May 2018 (cont'd) B. Performance Review (cont'd) 2. Performance of the Fund since inception to 31 May 2018 (cont'd) Performance of Class C-MYR of the Fund for the financial year ended 31 May 2018 Source: Lipper Class B-USD Since 1 year inception Category to to % % Total return of the Fund (8.02) (6.68) Average total return (8.02) (2.35) Annualised return of benchmark Performance of Class B-USD of the Fund for the financial year ended 31 May 2018 Source: Lipper 9

12 Manager s report for the financial year ended 31 May 2018 (cont'd) B. Performance Review (cont'd) 2. Performance of the Fund since inception to 31 May 2018 (cont'd) Class B-JPY Since 1 year inception Category to to % % Total return of the Fund (0.98) (12.16) Average total return (0.98) (4.37) Annualised return of benchmark Performance of Class B-JPY of the Fund for the financial year ended 31 May 2018 Source: Lipper Class A-SGD Since 1 year inception Category to to % % Total return of the Fund (2.68) 4.71 Average total return (2.68) 1.91 Annualised return of benchmark

13 Manager s report for the financial year ended 31 May 2018 (cont'd) B. Performance Review (cont'd) 2. Performance of the Fund since inception to 31 May 2018 (cont'd) Performance of Class A-SGD of the Fund for the financial year ended 31 May 2018 Source: Lipper Class B-SGD Since 1 year inception Category to to % % Total return of the Fund (3.38) (2.22) Average total return (3.38) (0.77) Annualised return of benchmark Performance of Class B-SGD of the Fund for the financial year ended 31 May 2018 Source: Lipper 11

14 Manager s report for the financial year ended 31 May 2018 (cont'd) B. Performance Review (cont'd) 3. Annual total return of Share Class Class A-MYR For the financial year ended % % % Capital growth (6.33) Income distribution Total return of the Share Class (6.33) Benchmark Class C-MYR For the financial year ended % % % Capital growth (4.98) Income distribution Total return of the Share Class (4.98) Benchmark Class B-USD For the financial year ended % % % Capital growth (8.02) 7.34 (5.48) Income distribution Total return of the Share Class (8.02) 7.34 (5.48) Benchmark (1.17) Class B-JPY For the financial year ended % % % Capital growth (0.98) 7.03 (17.12) Income distribution Total return of the Share Class (0.98) 7.03 (17.12) Benchmark (10.64) Class A-SGD For the financial year ended % % % Capital growth (2.68) 7.67 (0.36) Income distribution Total return of the Share Class (2.68) 7.67 (0.36) Benchmark Class B-SGD For the financial year ended % % % Capital growth (3.38) 7.68 (6.02) Income distribution Total return of the Share Class (3.38) 7.68 (6.02) Benchmark

15 Manager s report for the financial year ended 31 May 2018 (cont'd) B. Performance Review (cont'd) 4. Basis of calculation made in calculating the returns: The performance figures are a comparison of the growth/decline in NAV after taking into account all the distributions payable (if any) during the stipulated period. An illustration of the above would be as follows: Capital return (%) = (NAV per unit end / NAV per unit begin) - 1 Income return (%) = Gross income distribution per unit / NAV per unit begin Total return (%) = Capital return (%) + Income return (%) C. Market Review During the period under review, MSCI Asia ex-japan gained 14.6%. The gainers were led by Hang Seng (+18.7%) and Sensex (+13.41%). The KLCI lagged regional peers at -1.4%. FBM Emas Shariah Index and FBM Small Cap Index have declined by 4.91% and 19.9% respectively during the same period. Asian markets continued to perform well in June with key indices reaching all-time high. As a widely expected move, United States Federal Reserve ("Fed") raised interest rates for the second time in 2017 by 25 bps after upgrading GDP growth forecast to 2.2% and unemployment rate to 4.3% for The International Monetary Fund ("IMF") remained confident that the global economic recovery is on a firmer footing for 2017 on expectations of accelerating growth in the Euro-zone, Japan and China. In the July 2017 update of its World Economic Outlook ("WEO"), the IMF kept its global Gross Domestic Product ("GDP") forecast at 3.5% for 2017 and 3.6% for 2018 unchanged from its April 2017 outlook. Major European and Asian Indices fell early August 2017 with concerns over North Korea, Hurricane Harvey, Spain terror attacks and the US political environment. Stronger economic data and positive corporate earnings propped up August 2017 numbers. The regional markets continued to be jittery in September as sabre rattling by North Korea sent investors into selling mode while heightened expectations of another US interest rate hike and balance sheet contraction this year following comments from the Fed officials also added to the downbeat sentiment. Meanwhile, the Asian Development Bank came out a report and remained confident that the global economic recovery is on a firmer footing this year as controlled growth moderation in China is balanced by expected healthy growth elsewhere. Regional markets fared better in October 2017 compared to previous month driven by a recovery in tech stocks and easing geopolitical tension between China and Korea following the year-long standoff over deployment of anti-missile systems. Following this, both economies agreed to a currency swap agreement, which was key rerating catalyst for China-centric Korean equities while the month of November 2017 started off with the Bank of England raising UK interest rates for first time since The Bank of England raised rates by 25 bps but the Pound still fell as gloomy forecasts for growth appeared to rule out the prospect of steep increases in the cost of credit before

16 Manager s report for the financial year ended 31 May 2018 (cont'd) C. Market Review (cont'd) Key markets saw 2017 ended with mixed performance amid thin trading volume towards the end of the year. All three major US indices ended 2017 with the best annual gains since Nasdaq recorded the biggest yearly gain of 28.2% followed by Dow Jones and S&P500 which advanced by 25.1% and 19.4% each respectively. Fed then started to double the pace of its balance sheet reduction from USD10 billion to USD20 billion and will increase it by USD10 billion every three months. China s December 2017 data were broadly within expectations but 4Q17 GDP growth was higher than expected and brought 2017 GDP growth to 6.9%, the first pick-up since After the US Government shutdown ended, President Trump slapped steep tariffs of 20-50% on imported washing machines and solar panels. Korea stock exchange announced KRX300 Index to be launched on 5 February 2018, another bright spot for small-mid caps. The month of February 2018 began with three days of intense sell-offs. Fears of rising interest rates in the US, due to measures aimed at controlling inflation, resulted in heightened volatility. Regional stock markets tumbled after Wall Street plummeted, as investors fled to safe havens in a highly volatile global market. Although the market did stage a mild rebound thereafter, it weakened again on news that the US would impose import tariffs on steel and aluminium, raising concern of higher prices and trade war. Asian equities dropped in line with global trend while the Federal Open Market Committee ("FOMC") raised benchmark interest rate by 25 bps, marking the sixth increase since the start of monetary policy tightening. The People's Bank of China ("PBOC") also lifts shortterm interest rates, following the Fed s move of rate normalization. The national people s congress approved merging China Insurance Regulatory Commission with the China Banking Regulatory Commission, while Yi Gang has been appointed as the new PBOC governor, as part of a sweeping reshuffle of China s cabinet cementing President Xi Jinping already strong influence. Global equities were mixed in April 2017 as trade war rhetoric continued to dominate headlines despite US announcing its willingness to hold negotiations for a resolution on the escalating trade rift with China; whilst geopolitical advances were seen as North and South Korea pledged to bring a formal end to Korean War. Meanwhile, geopolitical tensions in the Middle East continued to weigh on global equity markets. Markets were then rattled by the return of US-China trade conflicts after President Donald Trump announced that a final list involving US$50 billion in Chinese imports that would be subjected to 25% tariffs, would be released in mid-june 2018, with investment restrictions on Chinese acquisitions of U.S. technology to be announced shortly thereafter. At the close of the month, Trump administration also announced that it will place tariffs on steel and aluminium imports from the European Union, Mexico and Canada a news that was immediately responded with threats of proportional reciprocal measures from all affected countries. MYR (+7.0%), Chinese Yuen ("CNY") (+5.9%), and Thai Baht ("THB") (+5.8%) were the best performing currencies in Asia-Pacific ex-japan. Dollar weakness backed a rally in most Asian currencies. The Ringgit was supported by rising oil prices, as Brent Crude rose 38% almost reaching USD70/bbl levels. Philippine peso ("PHP") (-5.4%), Indian Rupee ("INR") (-4.5%), and Indonesian Rupiah ("IDR") (+4.3%) were the worst performing currencies for the same period. 14

17 Manager s report for the financial year ended 31 May 2018 (cont'd) D. Market Outlook Geopolitical risks return as global markets take a cautious stance towards possible trade wars between the world s biggest economies. At the same time, the Fed signalled that the central bank is set to raise its benchmark interest rates during the next FOMC meeting in June However, no clear direction was given on whether one or two more hikes would ensue this year following that move, as the committee indicated that they are not in a rush to aggressively tighten monetary stance. Domestically, despite the KLCI performing resiliently in the immediate aftermath of the stunning 14th Malaysian general elections ("GE14"), revelation of a larger-than-expected national debt of RM1 trillion as well as the cancellation of MRT Line 3 and High Speed Rail projects have spooked the market. We intend to take advantage of the market weakness to bottom fish on stocks which remain fundamentally attractive regardless of the latest change. E. Currency Review For the financial year under review, the MYR strengthened by 7% against the USD, 3.8% against the SGD, 11.1% against the IDR and 11.8% against the PHP. Unfavourable foreign currency movement had an approximately negative 3.6% impact to the overall performance. The Fund has equity and cash holdings denominated in foreign currencies such as Taiwanese Dollars, Korean Won, HK Dollars, SGD, THB and IDR, which suffered from MYR strength. US Fed has raised rates by 25 bps to % during the FOMC meeting in June 2018, in line with expectations. Dots chart now shows two more hikes this year and three hikes in 2019, while US GDP growth forecast was raised from 2.7% to 2.8% for 2018 and maintained at 2.4% for The Manager expects MYR to weaken slightly against USD, assuming moderate GDP growth and inflation for Bank Negara Malaysia ("BNM") to maintain Overnight Policy Rate ("OPR") at 3.25%. In the near term, despite crude oil prices found higher ground, MYR is pressured by continuous capital outflows after election. F. Investment Strategy The Fund Manager believes that markets will face a period of continued volatility both overseas and domestic due to concerns over a potential trade war between the US and China while back at home the newly installed government are in the midst of implementing the GE14 manifesto. We are cautiously optimistic and continue to be selective towards stocks with stable earnings and growing momentum. We currently favour North East Asian countries for stronger earnings growth and countries with more stable currencies such as and Singapore, Thailand and Malaysia in Association of Southeast Asian Nations ("ASEAN"). In terms of asset allocation, the Fund will maintain its invested levels at 75% in the interim in view of the uncertainties ahead. 15

18 Manager s report for the financial year ended 31 May 2018 (cont'd) G. Asset Allocation The Fund s asset allocation as at 31 May 2018 and 31 May 2017 are as follows: Asset allocation RM % RM % Quoted equities - local 11,943, ,348, Quoted equities - foreign 17,107, ,224, Cash and cash equivalents 9,539, ,946, Total Investments 38,590, ,519, As at 31 May 2018, the Fund s allocation in quoted equities increased from 62.10% to 75.28%. H. NAV as at 31 May 2018 NAV by Share Class (RM) Changes (%) NAV Class A-MYR 36,909,341 31,601, NAV Class C-MYR 943,303 11,154 8, NAV Class B-USD 37, ,477 (91.00) NAV Class B-JPY 209, ,206 (6.33) NAV Class A-SGD 23,300 24,874 (6.33) NAV Class B-SGD 385, , Total 38,507,651 32,375,225 I. Significant financial risk of the Fund The Manager did not enter into any hedging instruments (e.g. forward currency contracts) to hedge the foreign currency exposure of the Fund as disclosed in the Fund's Prospectus dated 17 September The base currency of the Fund is Malaysian Ringgit ("MYR"). As the investments of the Fund may be denominated in currencies other than the base currency, any fluctuation in the exchange rate between MYR and the currencies in which the Fund's investments are denominated in may have an impact on the fair value of the Fund's quoted equities. If the currencies in which the investments are denominated depreciate against the base currency, this will have an adverse effect on the NAV of the Fund in the base currency and vice versa. Any gains or losses arising from the fluctuation in the exchange rate may further increase or decrease the returns of the investment and of the Fund. The impact of the exchange rate movement between the MYR and the foreign currency of Class A and Class B (i.e. Singapore Dollar ("SGD"), United States Dollar ("USD") and Japanese Yen ("JPY")) may result in a depreciation of the unitholders' investment in the Fund as expressed in MYR. 16

19 Manager s report for the financial year ended 31 May 2018 (cont'd) J. Soft Commissions and Rebates The Manager and its delegates will not retain any form of soft commissions and rebates from or otherwise share in any commission with any broker in consideration for directing dealings in the investments of the Fund unless the 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 Fund. All dealings with brokers are executed on best available terms. Any rebates received are channelled back to the Fund. On the other hand, soft commissions received from brokers in the form of research and advisory services to assist in the investment of the mandate and are of demonstrable benefit to the fund shall be retained by the Manager. For the financial period under review, the Manager has received soft commissions from the brokers. 17

20 TRUSTEE'S REPORT FOR THE FINANCIAL YEAR ENDED 31 MAY 2018 To the Unitholders of AMB SHARIAH VALUE PLUS FUND We, CIMB Islamic Trustee Berhad (the "Trustee"), being the Trustee for AMB Shariah Value Plus Fund ("the Fund") are of the opinion that Amanah Mutual Berhad ("the Manager"), acting in the capacity as Manager of the Fund, has fulfilled its duties in the following manner for the financial year ended 31 May (a) The Trust has been managed in accordance with the limitations imposed on the investment powers of the Manager and the Trustee under the Deed, Supplemental Deed, the Securities Commision Malaysia's Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 (as amended from time to time) and other applicable laws during the financial year ended 31 May 2018; (b) Valuation/pricing of units of the Trust has been carried out in accordance with the Deed, Supplemental Deed and relevant regulatory requirements; and (c) Creation and cancellation of units have been carried out in accordance with the Deed, Supplemental Deed and relevant regulatory requirements. For and on behalf of CIMB ISLAMIC TRUSTEE BERHAD ( M) LEE KOOI YOKE Chief Operating Officer Kuala Lumpur, Malaysia 25 July

21 STATEMENT BY MANAGER TO THE UNITHOLDERS OF AMB SHARIAH VALUE PLUS FUND We, being two of the Directors of Amanah Mutual Berhad, the Manager of AMB Shariah Value Plus Fund ("the Fund") do hereby state that, in the opinion of the Manager, the accompanying financial statements of the Fund for the year ended 31 May 2018, together with the notes thereto, have been properly drawn up in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards, so as to give a true and fair view of the financial position of the Trust as at 31 May 2018, and of its financial performance and cash flows for the year then ended. Signed on behalf of Amanah Mutual Berhad, being the Manager of AMB Shariah Value Plus Fund, in accordance with a resolution of the Directors. Dato' Noorizah Binti Abdul Hamid Director Norlin Binti Abdul Samad Director Kuala Lumpur, Malaysia 25 July

22 REPORT OF THE SHARIAH COMMITTEE TO THE UNITHOLDERS AMB SHARIAH VALUE PLUS FUND We have acted as the Shariah Committee of AMB Shariah Value Plus Fund ("the Fund") for the financial year ended 31 May Our responsibility is to ensure that the procedures and processes employed by Amanah Mutual Berhad ("the Manager") and that the provisions of the Deed dated 17 April 2015 are in accordance with Shariah principles. In our opinion, the Manager has managed and administered the Fund in accordance with Shariah principles and complied with applicable guidelines, ruling or decisions issued by the Securities Commission Malaysia ("SC") pertaining to Shariah matters. The investment portfolio of the Fund comprises quoted equities which has been endorsed as Shariah-compliant by this Shariah Committee. For and behalf of the Shariah Committee members of AMB SHARIAH VALUE PLUS FUND Datuk Dr Syed Othman Bin Syed Hussin Alhabshi Kuala Lumpur, Malaysia 25 July

23 Independent auditors report to the unitholders of AMB Shariah Value Plus Fund Report on the audit of the financial statements Opinion We have audited the financial statements of AMB Shariah Value Plus Fund (the "Fund"), which comprise the statement of financial position as at 31 May 2018 of the Fund, and statement of comprehensive income, statement of changes in equity and statement of cash flows of the Fund for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, as set out on pages xx to xx. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the as at 31 May 2018, and of its financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards. Basis for opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence and other ethical responsibilities We are independent of the Fund in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants ( By-Laws ) and the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants ( IESBA Code ), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Information other than the financial statements and auditors report thereon The Manager of the Fund ("the Manager ) is responsible for the other information. The other information comprises the information included in the annual report of the Fund, but does not include the financial statements of the Fund and our auditors report thereon. Our opinion on the financial statements of the Fund does not cover the other information and we do not express any form of assurance conclusion thereon. 21

24 Independent auditors report to the unitholders of AMB Shariah Value Plus Fund (cont'd) Information other than the financial statements and auditors report thereon (cont'd.) In connection with our audit of the financial statements of the Fund, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Fund or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Manager and Trustee for the financial statements The Manager is responsible for the preparation of financial statements of the Fund that give a true and fair view in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards. The Manager is also responsible for such internal control as the Manager determines is necessary to enable the preparation of financial statements of the Fund that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Fund, the Manager is responsible for assessing the Fund s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager either intends to liquidate the Fund or to cease operations, or have no realistic alternative but to do so. The Trustee is responsible for overseeing the Fund s financial reporting process. The Trustee is also responsible for ensuring that the Manager maintains proper accounting and other records as are necessary to enable true and fair presentation of these financial statements. Auditors responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Fund as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 22

25 Independent auditors report to the unitholders of AMB Shariah Value Plus Fund (cont'd) Auditors responsibilities for the audit of the financial statements (cont'd.) As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements of the Fund, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Manager. Conclude on the appropriateness of the Manager s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements of the Fund or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Fund to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements of the Fund, including the disclosures, and whether the financial statements of the Fund represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 23

26 Independent auditors report to the unitholders of AMB Shariah Value Plus Fund (cont'd) Other matters This report is made solely to the unitholders of the Fund, as a body, in accordance with the Guidelines on Unit Trust Funds issued by the Securities Commission Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Ernst & Young AF: 0039 Chartered Accountants Lee Pei Yin No /05/2019 J Chartered Accountant Kuala Lumpur, Malaysia 25 July

27 STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 MAY Note RM RM INCOME Dividend income 797, ,499 Profit income 127,688 56,668 Realised foreign exchange losses (2,535,955) (13,859) Unrealised foreign exchange losses 256,543 (104,188) Net gain on fair value through profit or loss ("FVTPL") investments: - Realised gain/(loss) 1,298, ,935 - Unrealised (loss)/gain (957,677) 501,415 (1,013,282) 1,044,470 EXPENSES Manager's fee 4 658, ,527 Trustee's fee 5 26,422 5,123 Auditors' remuneration 12,000 12,000 Tax agent's fee 20,034 19,176 Brokerage and other transaction fees 594, ,618 Administrative expenses 117,999 29,902 1,429, ,346 NET (LOSS)/INCOME BEFORE TAXATION (2,442,693) 735,124 TAXATION 6 (29,399) (11,173) NET (LOSS)/INCOME AFTER TAXATION, REPRESENTING TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR (2,472,092) 723,951 Total comprehensive (loss)/income for the year is made up of the following: Net realised (loss)/gain (1,770,958) 327,000 Net unrealised (loss)/gain (701,134) 396,951 (2,472,092) 723,951 The accompanying notes form an integral part of the financial statements. 25

28 STATEMENT OF COMPREHENSIVE INCOME (CONT'D) FOR THE FINANCIAL YEAR ENDED 31 MAY 2018 CLASS A-MYR Note RM RM Net distribution for the year 11-2,438,212 Gross distribution per unit (sen) Net distribution per unit (sen) Distribution date - 31 May 2017 There was no distribution declared for the Fund in the current financial year. The accompanying notes form an integral part of the financial statements. 26

29 STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2018 Note RM RM ASSETS Investments at FVTPL 7 29,050,910 19,572,838 Short term deposit placements 8 1,428,123 9,838,000 Tax recoverable 3, Other receivables 9 95,482 58,563 Amount due from stockbrokers 121, ,923 Amount due from Manager 10-6,728,192 Cash at bank 8,111,726 2,108,657 TOTAL ASSETS 38,811,052 38,452,523 LIABILITIES Provision for distribution 11-2,438,212 Other payables 39,766 35,943 Amount due to Manager ,796 30,905 Amount due to Trustee 1,971 1,241 Amount due to stockbrokers 114,868 3,570,997 TOTAL LIABILITIES 303,401 6,077,298 NET ASSET VALUE ("NAV") OF THE FUND 38,507,651 32,375,225 EQUITY Unitholders' capital 12(a) 40,300,122 31,695,604 (Accumulated losses) / retained earnings 12(b) & (c) (1,792,471) 679,621 NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 38,507,651 32,375,225 NET ASSET VALUE - Class A-MYR 36,909,341 31,601,832 - Class C-MYR 943,303 11,154 - Class B-USD 37, ,477 - Class B-JPY 209, ,206 - Class A-SGD 23,300 24,874 - Class B-SGD 385, ,682 38,507,651 32,375,225 The accompanying notes form an integral part of the financial statements. 27

30 STATEMENT OF FINANCIAL POSITION (CONT'D) AS AT 31 MAY 2018 Note RM RM NUMBER OF UNITS IN CIRCULATION 12 - Class A-MYR 75,570,000 60,605,000 - Class C-MYR 1,780,000 20,000 - Class B-USD 10,000 95,000 - Class B-JPY Class A-SGD 15,000 15,000 - Class B-SGD 265,000 65,000 77,640,650 60,800,650 NET ASSET VALUE PER UNIT - Class A-MYR MYR MYR Class C-MYR MYR MYR Class B-USD USD USD Class B-JPY JPY 8,784 JPY 8,871 - Class A-SGD SGD SGD Class B-SGD SGD SGD The accompanying notes form an integral part of the financial statements. 28

31 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MAY 2018 (Accumulated losses) / Unitholders' retained capital earnings Total equity RM RM RM Note 12(a) Note 12(b) & (c) At 1 June ,146,955 (44,330) 10,102,625 Total comprehensive income for the year - 723, ,951 Creation of units 35,479,988-35,479,988 Cancellation of units (11,493,127) - (11,493,127) Distribution (Note 11) (2,438,212) - (2,438,212) At 31 May ,695, ,621 32,375,225 At 1 June ,695, ,621 32,375,225 Total comprehensive loss for the year - (2,472,092) (2,472,092) Creation of units 30,854,123-30,854,123 Reinvestment of units 2,438,212-2,438,212 Cancellation of units (24,687,817) - (24,687,817) At 31 May ,300,122 (1,792,471) 38,507,651 The accompanying notes form an integral part of the financial statements. 29

32 STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 MAY 2018 CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES RM RM Proceeds from sale of investments 86,983,853 11,430,198 Purchase of investments (102,426,031) (19,983,374) Profit income received 128,373 56,498 Net dividend received 727, ,481 Manager's fee paid (640,440) (108,767) Trustee's fee paid (25,692) (4,397) Other expenses paid (146,157) (68,155) Net cash used in operating and investing activities (15,398,986) (8,546,516) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from creation of units 37,582,315 28,751,796 Payments for cancellation of units (24,590,137) (11,493,127) Net cash generated from financing activities 12,992,178 17,258,669 NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (2,406,808) 8,712,153 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 11,946,657 3,234,504 CASH AND CASH EQUIVALENTS AT END OF THE YEAR 9,539,849 11,946,657 CASH AND CASH EQUIVALENTS COMPRISE: Cash at bank 8,111,726 2,108,657 Short term deposit placement (Note 8) 1,428,123 9,838,000 9,539,849 11,946,657 The accompanying notes form an integral part of the financial statements. 30

33 1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES AMB Shariah Value Plus Fund (hereinafter referred to as "the Fund") was constituted pursuant to the executed Deed dated 17 April 2015 between Amanah Mutual Berhad ("AMB") as the Manager and CIMB Islamic Trustee Berhad as the Trustee and the Registered Holders of the Fund. The Fund was launched on 16 June 2015 and commenced operations on 7 July 2015 and will continue to be in operations until terminated by the Trustee as provided under the Deed. The Fund has incorporated 6 Classes of Units namely A-MYR, C-MYR, B-USD, B-JPY, A-SGD, and B-SGD as at 31 May The principal activity of the Fund is to maximise total returns from capital appreciation through diversified investments in Shariah-compliant stocks listed on the Bursa Malaysia that are trading at a discount to their intrinsic values. The Fund may also invest up to 50% of the Fund's NAV in the Asia Pacific ex-japan markets. The Manager, a company incorporated in Malaysia, is principally engaged in the management of unit trust funds. Amanah Saham Nasional Berhad ( ASNB ) and Permodalan Nasional Berhad, companies incorporated in Malaysia, were the holding and ultimate holding company of the Manager until 16 May Following the acquisition of AMB by Maybank Asset Management Sdn Bhd ("MAM"), the immediate and ultimate holding company of the Manager has been changed to MAM and Malayan Banking Berhad ( MBB ) respectively, effective 17 May The financial statements were authorised for issue by the Board of Directors of the Manager on 25 July BASIS OF PREPARATION The financial statements of the Fund have been prepared in accordance with Malaysian Financial Reporting Standards ( MFRS ) as issued by the Malaysian Accounting Standards Board ( MASB ) and International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ). The Fund has adopted the MFRS, Amendments to Standards and Interpretations Committee ("IC") Interpretations which have become effective during the financial year. The adoption of the new pronouncements did not result in any material impact to the financial statements. The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies in Note 3 to the financial statements. All amounts are stated in Ringgit Malaysia ("RM") except for the NAV per unit for non-myr classes which are stated in Singapore Dollar ("SGD"), US Dollar ("USD") or Japanese Yen ("JPY"). 31

34 2. BASIS OF PREPARATION (CONT'D) (a) Standards and amendments to standards issued but not yet effective The following are standards, amendments to standards and interpretations issued by the MASB, but not yet effective, up to the date of issuance of the Fund's financial statements. The Fund intends to adopt the relevant standards, if applicable, when they become effective. Description Effective for annual periods beginning on or after Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018 MFRS 9: Financial Instruments 1 January 2018 MFRS 15: Revenue from Contracts with Customers 1 January 2018 Amendments to MFRS 140: Transfers of Investment Property 1 January 2018 Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018 Amendments to MFRS 1 and 128 (Annual Improvements to MFRS cycle) 1 January 2018 IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018 Amendments to MFRS 9: Prepayment Features with Negative Compensation 1 January 2019 Amendments to MFRS 128: Long-term Interests in Associates and Joint Ventures 1 January 2019 MFRS 16: Leases 1 January 2019 Amendments to MFRS 119: Plan Amendment, Curtailment or Settlement 1 January 2019 IC Interpretation 23: Uncertainty over Income Tax Treatments 1 January 2019 Amendments to MFRS 3 (Annual Improvements to MFRS Cycle) 1 January 2019 Amendments to MFRS 11 (Annual Improvements to MFRS Cycle) 1 January 2019 Amendments to MFRS 112 (Annual Improvements to MFRS Cycle) 1 January 2019 Amendments to MFRS 113 (Annual Improvements to MFRS Cycle) 1 January 2019 Amendments to MFRS 2: Share-based Payment 1 January 2020 Amendments to MFRS 3: Business Combinations 1 January 2020 Amendments to MFRS 6: Exploration for and Evaluation of Mineral Resources 1 January 2020 Amendments to MFRS 14: Regulatory Deferral Accounts 1 January 2020 Amendments to MFRS 101: Presentation of Financial Statements 1 January 2020 Amendments to MFRS 108: Accounting Policies, Changes in Accounting Estimates and Errors 1 January

35 2. BASIS OF PREPARATION (CONT'D) (a) Standards and amendments to standards issued but not yet effective (cont'd) The following are standards, amendments to standards and interpretations issued by the MASB, but not yet effective, up to the date of issuance of the Fund's financial statements. The Fund intends to adopt the relevant standards, if applicable, when they become effective. Description Effective for annual periods beginning on or after Amendments to MFRS 134: Interim Financial Reporting 1 January 2020 Amendment to MFRS 137: Provisions, Contingent Liabilities and Contingent Assets 1 January 2020 Amendment to MFRS 138: Intangible Assets 1 January 2020 Amendments to IC Interpretation 12: Service Concession Arrangements 1 January 2020 Amendments to IC Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments 1 January 2020 Amendments to IC Interpretation 22: Foreign Currency Transactions and Advance Consideration 1 January 2020 Amendments to IC Interpretation 132: Intangible Assets - Web Site Costs 1 January 2020 MFRS 17: Insurance Contracts 1 January 2021 Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred (i) Early adoption of MFRS 9 Financial Instruments ("MFRS 9") The Fund has applied MFRS 9 and the related consequential amendments in advance of their effective dates. The date of initial application (i.e. the date on which the Fund has assessed its existing financial assets and financial liabilities) is 16 June 2015 (date of launch). 33

36 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Financial instruments Financial assets and financial liabilities are recognised when the Fund becomes a party to the contractual provision of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. (b) Financial assets All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place. All recognised financial assets are subsequently measured in their entirety at amortised cost or fair value, depending on the classification of the assets. (i) Classification of financial assets Unless designated as at fair value through profit or loss ("FVTPL") on initial recognition, debt instruments that meet the following conditions are subsequently measured at amortised cost less impairment loss: - - the assets are held within a business model whose objectives is to hold assets in order to collect contractual cash flows; and the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Debt instruments that do not meet the criteria above are classified as either fair value through other comprehensive income ("FVTOCI") or FVTPL. The Fund classifies cash and cash equivalents, other receivables, amount due from stockbrokers and amount due from Manager as financing and receivables, and are subsequently measured at amortised cost. Quoted equities are classified as FVTPL. 34