KENANGA PRINCIPAL PROTECTED INCOME FUND (FOERLY KNOWN AS ING PRINCIPAL PROTECTED INCOME) Quarterly Report to Unit Holders First Quarter Report
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(KPPIF) Contents Page CORPORATE DIRECTORY DIRECTORY OF MANAGER S OFFICES i ii MANAGER S REPORT 1-6 1.0 FUND KEY INFOATION 1 2.0 FUND REVIEW 4 3.0 MARKET REVIEW & OUTLOOK 6 STATEMENT OF COMPREHENSIVE INCOME 10 STATEMENT OF FINANCIAL POSITION 11 STATEMENT OF CHANGES IN EQUITY 12 STATEMENT OF CASH FLOWS 13 NOTES TO THE FINANCIAL STATEMENTS 14 ADDITIONAL INFOATION KEY PERSONNEL OF THE MANAGER 17-18 - The Management Team 17 - The Investment Team 18
CORPORATE DIRECTORY MANAGER: KENANGA INVESTORS BERHAD (Company No. 353563-P) REGISTERED OFFICE Kenanga Investors Berhad (KIB) 8 th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia. Tel: 03-2162 1490 Fax: 03-2161 4990 BOARD OF DIRECTORS Datuk Syed Ahmad Alwee Alsree (Chairman) Syed Zafilen Syed Alwee (Independent Director) YM Raja Dato Seri Abdul Aziz bin Raja Salim (Independent Director) Vivek Sharma (Independent Director) Bruce Kho Yaw Huat Abdul Razak bin Ahmad Peter John Rayner BUSINESS OFFICE Suite 12.02, 12 th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia. Tel: 03-2057 3688 / 03-2713 3188 Fax: 03-2161 8807 / 03-2713 5868 E-mail: InvestorServices@kenanga.com.my Website: www.kenangainvestors.com.my INVESTMENT COMMITTEE Bruce Kho Yaw Huat (Chairman) Syed Zafilen Syed Alwee (Independent Member) Vivek Sharma (Independent Member) Abdul Razak bin Ahmad Peter John Rayner COMPANY SECRETARY: Norliza Abd Samad, (MAICSA 7011089) 9 th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia. TRUSTEE: CIMB COMMERCE TRUSTEE BERHAD (313031-A) REGISTERED OFFICE 5 th Floor Bangunan CIMB Jalan Semantan Damansara Heights 50490 Kuala Lumpur Tel: 03-2084 8888 Fax: 03-2093 9688 BUSINESS OFFICE Level 7, Wisma Amanah Raya Berhad Jalan Semantan, Damansara Heights 50490 Kuala Lumpur Tel: 03-2084 8888 Fax: 03-2095 5473 Web: http://cimb.com AUDITOR: ERNST & YOUNG (AF : 0039) Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur, Malaysia. TAX ADVISER: ERNST & YOUNG TAX CONSULTANTS SDN BHD (179793-K) Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur, Malaysia. MEMBERSHIP: FEDERATION OF INVESTMENT MANAGERS MALAYSIA (FIMM) 19-07-3, 7th Floor, PNB Damansara, 19, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia. Tel: 03-2093 2600 Fax: 03-2093 2700 Website: www.fimm.com.my i
DIRECTORY OF MANAGER S OFFICES REGIONAL BRANCH OFFICES : Kuala Lumpur Suite 12.02, 12th Floor, Kenanga International Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia Tel: 03-2057 3688 / 03-2713 3188 Fax: 03-2161 8807 / 03-2713 5868 Petaling Jaya Unit B-6-2, Sunway Giza Mall Dataran Sunway, PJU 5/14 Kota Damansara 47810 Petaling Jaya, Selangor Tel: 03-6148 1871, 6150 3983 Fax: 03-6148 1872 Klang No. 12 Jalan Batai Laut 3, Taman Intan 41300 Klang, Selangor Darul Ehsan Tel:03-3341 8818, 3348 7889 Fax:03-3341 8816 Penang Blok A, Aras 3, Wisma Perkeso No. 269, Jalan Burma 10538 George Town, Penang Tel: 04-226 4880 Fax: 04-226 5120 Melaka No. 25-1 Jalan Kota Laksamana 2/17 Taman Kota Laksamana Seksyen 2 75200 Melaka Tel: 06-281 8913, 282 0518 Fax: 06-281 4286 Johor Bahru Lot 11.03, 11th Floor, Menara MSC Cyberport 5 Jalan Bukit Meldrum 80300 Johor Bahru, Johor Tel: 07-223 7505/4798 Fax: 07-223 4802 Kuching 1st Floor, No 71, Lot 7 Lot 10900, Jalan Tun Jugah 93350 Kuching, Sarawak Tel: 082-572 228 Fax: 082-572 229 Kota Kinabalu A-03-11, 3rd Floor Block A Warisan Square Jalan Tun Fuad Stephens 88000 Kota Kinabalu, Sabah Tel: 088-447 089/448 106 Fax: 088-447 039 Ipoh No. 5A, Persiaran Greentown 9 Greentown Business Centre 30450 Ipoh, Perak Darul Ridzuan Tel: 05-254 7573/7570 Fax: 05-254 7606 Seremban Suite 08-3, Seremban City Centre Jalan Pasar 70000 Seremban Tel: 06-761 5678 Fax: 06-761 2243 Agency Office Miri (Sarawak) c/o Lot 1084, 2nd Floor, Jalan Merpati 98000 Miri Sarawak, Malaysia Tel: 085-427 782 ii
MANAGER S REPORT Dear Unit Holders, We are pleased to present the Manager s first quarter report for the period from 1 May 2013 to 31 July 2013 for KENANGA PRINCIPAL PROTECTED INCOME FUND. 1.0 FUND KEY INFOATION 1.1 Fund Name KENANGA PRINCIPAL PROTECTED INCOME FUND (KPPIF or the Fund / Scheme) 1.2 Investment Objective The Fund aims to provide investors a regular stream of income from the short-term money market returns which is competitive to that offered by fixed deposits, while preserving its capital by placing the funds primarily in short-term money market and deposit-based instruments issued by licensed financial institutions with a minimum of RAM A3 or MARC P2. The Fund also provides a high level of liquidity. 1.3 Investment Strategy The Fund seeks to achieve its objective by placing its funds primarily in a diversified portfolio of short-term money market and deposit-based instruments that are not subject to market valuation risks. In order to enhance the returns of the Fund, an active management process will be adopted, including active management of the maturities of the Fund s holdings, continuous monitoring of the prevailing interest rates environment and to actively seek out the best rates and instruments available for the Fund. 1.4 Asset Allocation Short-term money market instruments - Up to 100% 1.5 Duration The Fund is an open-ended fund and hence does not have a termination date. 1.6 The Fund s performance benchmark Overnight rate obtainable from www.maybank2u.com.my. The above benchmark has been changed from 1-month fixed deposit rate to overnight rate with effect from 2 May 2012 to better reflect the investment objective and the underlying investment strategies, and is therefore more suitable to measure performance against. The benchmark change will have no impact on the portfolio or how it is managed. 1.7 Distribution Policy Income will be paid daily on a best effort basis, if any. Income paid (if any) will be reinvested into the Fund. 1
1.8 Risk Consideration Fund management company risk Credit risk Risk of non-compliance Loan financing risk Liquidity risk Interest rate risk Market risk Inflation risk Wholesale funds are managed by of the Fund Management Company. The expertise, experience and investment process of the investment team would affect the performance of the fund. Poor management of a wholesale fund may jeopardise the investment of each investor. A wholesale fund could lose money if the issuer or guarantor of a fixed income security, or the counterpart to a derivatives contract, redemption agreement or a loan of portfolio securities, is unable or unwilling to make timely principal and/or interest/profit payments, or to otherwise honour its obligations. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings. The operations and administrations of the fund by the Fund Management Company or its delegates are governed by the Deed, all applicable laws and regulations or internal policies and procedures. Non-adherence may result in tarnished reputation, limited business opportunities and reduced expansion potential for the Fund Management Company. Unitholder investment goals may also be affected should the Fund Management Company not adhere to the investment mandate. The inherent risk of investing with borrowed money, which includes the ability for you to service the loan repayments and the effect of increase in interest rates on the loan repayments and your ability to provide additional collateral should wholesale fund prices fall beyond a certain level. Liquidity risk stems from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize loss. This may lead to a possibility that the Fund may not be able to unwind its positions which may result in the Fund not obtaining a fair price or true bid on the market. The lack of liquidity could also bring about instability in market prices, hence the net asset value of the Fund. This risk is managed by investing only in short-term money market and deposit-based instruments. This risk refers to the effect of interest rate changes on the market value of a fixed income portfolio. In the event of rising interest rates, prices of fixed income securities such as debentures will decrease and vice versa. The risk is mitigated by investing only in short-term money market and deposit-based instruments that are not subject to valuation risk. Market risk refers to fluctuations in market values of investments that affect the entire market. Economic and political uncertainties represent some sources of market risks because they affect the entire market and cannot be avoided through diversification. Inflation reduces the purchasing power of money. Therefore, in a high inflationary environment, there is possibility that income from debt securities may not be able to keep up with inflation. 2
Counterparty risk Counterparty risk occurs when a financial institution that has entered into a securities trade defaults on its obligations under the agreement. A fund may encounter unit price volatility due to this risk arising. 3
2.0 FUND REVIEW 2.1 Details of portfolio composition of Kenanga Principal Protected Income Fund ( the Fund ) as at against last 3 financial years ended 30 April are as follows: a. Distribution among industry sectors and category of investments: As at FY FY FY 31-7-13 2013 2012 2011 % % % % Short term deposits and cash 100.0 100.0 100.0 100.0 b. Distribution among markets The Fund invested in short-term deposits and cash only. 100.0 100.0 100.0 100.0 Note: The above mentioned percentages are based on total investment market value plus cash. 2.2 Performance details of the Fund for the financial period ended against last 3 financial year ended 30 April are as follows: Period from 01-05-13 to 31-07-13 FY 2013 FY 2012 FY 2011 Net asset value ( Million) 40.02 65.28 58.33 9.58 Units in circulation (Million) 40.02 65.28 58.33 9.58 Net asset value per unit () 1.0000 1.0000 1.0000 1.0000 Highest NAV price (/unit) 1.0000 1.0000 1.0000 1.0000 Lowest NAV price (/unit) 1.0000 1.0000 1.0000 1.0000 Total return (%) 0.60 2.39 2.48 1.97 - Capital growth (%) - - - - - Income growth (%) 0.60 2.39 2.48 1.97 Gross distribution per unit (sen) 0.60 2.39 2.48 1.97 Net distribution per unit (sen) 0.60 2.39 2.48 1.97 Management expense ratio ( MER ) (%) 1 0.14 0.55 0.55 0.65 Portfolio turnover ratio ( PTR ) (times) 2 63.58 108.67 86.31 97.74 Note: Total return is the actual return of the Fund for the financial period, computed based on net asset value per unit and net of all fees. MER is computed based on the total fees and expenses incurred by the Fund divided by the average fund size calculated on a daily basis. PTR is computed based on the average of the 4
total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis. Above prices and NAV are shown as ex-distribution. For details of income distribution, kindly refer to note 3 in manager s report. 1 MER is lower against previous financial year as the computation is in respect of 3 months only. 2 PTR is lower against previous financial years because the computations are in respect of 3 months only. 2.3 Average total return of the Fund 1 Year 31 July 2012-3 Years 31 July 2010- Since Inception 12 May 2008- Kenanga Principal Protected Income Fund 2.31% 2.32% 2.14% Maybank Overnight Rate 1.82% 1.75% 1.65% 2.4 Annual Total Return of the Fund for each of the last financial years or since inception (for financial period ending 30 April) Period under review 30 April 2013-30 April 2012-30 April 2013 30 April 2011-30 April 2012 30 April 2010-30 April 2011 30 April 2009-30 April 2010 Kenanga Principal Protected Income Fund 0.56% 2.36% 2.45% 1.90% 1.32% Maybank Overnight Rate 0.45% 1.82% 1.72% 1.42% 1.00% The performance data of the Fund is calculated based on net asset value per unit with distribution reinvested and is quoted from: Lipper. Note: Past performance is not necessarily indicative of future performance. Unit prices and investment returns may fluctuate. 5
3.0 MARKET REVIEW & OUTLOOK 3.1 Explanation on whether the Fund has achieved its investment objective. For the period under review, the Fund fulfilled its investment objective, having invested primarily in bank deposits that are not subject to market valuation risks and to provide a high level of liquidity. 3.2 Comparison between the fund s performance during the period under review and the performance of the benchmark disclosed in the information memorandum covering the last five financial years, or since inception if shorter. * Fund performance for the financial period 12 May 2008 (inception date) to Source: Lipper 3.3 Investment strategies and policies employed during the period under review For the period under review, the Fund s investment strategy and policy were to invest primarily in short term bank deposits for liquidity given the indicative ad-hoc withdrawal requests from qualified investors. 6
3.4 The Fund s asset allocation (% of NAV) as at Asset 30 April 2013 Short term deposits/cash 100.0 100.0 3.5 Fund performance and volatility analysis Period under review (30 April 2013 - ) Kenanga Principal Protected Income 0.56% Maybank Overnight Rate 0.45% The Fund s outperformance was due to higher rates obtained from longer-tenured deposits than the overnight placements. This was possible due to investors commitment for longer investment horizon. The Fund was launched on 12 May 2008. According to Lipper, the standard deviation is 0.04 for the period under review. Note: Past performance is not necessarily indicative of future performance, unit prices and investment returns may fluctuate. 3.6 Review of the market (period 1 May 2013 to ) Money Market Review Bank Negara retained the Overnight Policy Rate at 3.00% during the July s Monetary Policy Meeting. The central bank views that the growth remains at a slow pace, while highlighting the weak growth in advanced economies. The interbank money market rates also remained stable during the period under review. Loan growth inched up to 9.2% year-on-year in July compared to 9.1% in June. Malaysia's real GDP growth reaccelerated to 4.3% year-on-year in 2nd Quarter 2013 from 4.1% in 1st Quarter 2013. The Consumer Price Index (CPI) picked up to 2% in July from 1.8% in June, largely pushed up by costlier food and transport. Demand price pressures remained contained, as reflected by lower core inflation of 1% in July compared to1.1% in June. 7 months 2013 headline inflation was 1.7%, slightly lower than the 1.9% a year ago. Inflation has turned upside since January this year and accelerated to 1.8% year-on-year in June and May, up from 1.7% in April. 7
Money Market Outlook Market expect Bank Negara Malaysia (BNM) to maintain its overnight policy rate (OPR) at 3% in the coming Monetary Policy Committee (MPC) meeting on 5 September 2013. The decent domestic demand and the current financial turbulence due to the Fed s tapering risk do not warrant a change in the current monetary policy stance. Inflation target for this year is around 1.8%. Upside could come from resumption of subsidy rationalisation and potential price surges for food and other goods & services related to subsidy rationalisation. Bank Negara still considers the current stance of monetary policy to be appropriate and will continue to carefully assess the global economic and financial developments and their implications on the overall outlook for inflation and growth of the Malaysian economy. With no strong pressure points for domestic growth, the market expects BNM to keep its policy rate at 3% until end-2013. The central bank is committed to maintain orderly market conditions and believes that Malaysia is in a strong position to weather volatility in currency and stock markets. 3.7 Income Distribution For the quarterly financial period under reviewed. The Fund has declared the followings income distribution on daily basis:- Gross/Net distribution per Ex-Price unit (sen) 31 May 2013 0.20 1.00 28 June 2013 0.20 1.00 0.20 1.00 0.60 *Ex price will be maintained at 1.00 after each distribution. 3.8 Details of any unit split exercise The Fund did not carry out any unit split exercise during the financial period under review. 8
3.9 Significant changes in the state of affair of the Fund during the period Pursuant to the acquisition of ING Funds Berhad by Kenanga Investors Berhad on 19 th April 2013, Kenanga Investors Berhad had written to the Securities Commission to seek the Securities Commission s approval to become the Management Company of the Fund. The Securities Commission had approved the application. With effect from 8 th June 2013, Kenanga Investors Berhad has become the Management Company of the Fund. 3.10 Circumstances that materially affect any interests of the unitholders During the period under review, there are no circumstances that materially affect any interests of the unitholders. However, there was a change in the Management Company of the Fund on 8 th June 2013 on detailed in 3.9. 3.11 Rebates/Soft commissions Any rebates received are channeled back to the Fund. On the other hand, commissions received from the stockbrokers for goods and services such as technical analysis software, fundamental database, financial wire services, stock quotation system and portfolio management software incidental to investment management of the Fund shall be retained by the Manager. For the period under review, the Manager did not receive any rebates or commissions from stockbrokers. 3.12 Borrowing / lending activities The Fund did not borrow or engage in any form of lending during period under review 9
STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD ENDED 31 JULY 2013 (unaudited) Note 1.5.13 to 31.7.13 1.5.12 to 31.7.12 INVESTMENT INCOME Interest income 415,623 417,486 415,623 417,486 EXPENSES Manager s fee 70,471 68,524 Trustee s fee 5,638 5,482 Auditors remuneration 1,159 1,008 Tax agent s fee 756 832 Administration 1,568 2,164 79,592 78,010 NET INCOME BEFORE TAX 336,031 339,476 Income tax expense - - NET INCOME AFTER TAX, REPRESENTING TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 336,031 339,476 Total comprehensive income is made up as follows: Realised gain 336,031 339,476 Unrealised gain - - 336,031 339,476 Distribution for the period Net distribution 4 336,031 339,476 Net distribution per unit (sen) 4 0.60 0.62 Gross distribution per unit (sen) 4 0.60 0.62 The accompanying notes form an integral part of the financial statements. 10
STATEMENT OF FINANCIAL POSITION AS AT 31 JULY 2013 (unaudited) ASSETS Note 31.7.13 31.7.12 1.5.11 Short term deposits 1 40,045,795 57,147,878 9,578,893 40,045,795 57,147,878 9,578,893 OTHER ASSETS Other receivables 3,244 51,804 14,492 Cash at bank 8,481 9,934 4,436 11,725 61,738 18,928 TOTAL ASSETS 40,057,520 57,209,616 9,597,821 LIABILITIES Amount due to Manager 17,551 24,180 4,892 Amount due to Trustee 1,404 1,997 392 Other payables 15,388 13,710 7,833 TOTAL LIABILITIES 34,343 39,887 13,117 EQUITY NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS 2 40,023,177 57,169,729 9,584,704 TOTAL LIABILITIES AND EQUITY 40,057,520 57,209,616 9,597,821 NUMBER OF UNITS IN CIRCULATION 2(a) 40,023,177 57,169,729 9,584,704 NET ASSET VALUE PER UNIT EX DISTRIBUTION 1.0000 1.0000 1.0000 The accompanying notes form an integral part of the financial statements. 11
STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 31 JULY 2013 (unaudited) Note Unitholders Retained capital earnings Total equity 31.7.13 At beginning of the year 65,278,762-65,278,762 Total comprehensive income - 336,031 336,031 Creation of units 2(a) 15,081,526-15,081,526 Cancellation of units 2(a) (40,673,142) - (40,673,142) Reinvestment of income distribution/income distribution 2(a),4 336,031 (336,031) - At end of the period 40,023,177-40,023,177 31.7.12 At beginning of the year 58,333,550-58,333,550 Total comprehensive income - 339,476 339,476 Creation of units 2(a) 16,446,585-16,446,585 Cancellation of units 2(a) (17,949,882) - (17,949,882) Reinvestment of income distribution/income distribution 2(a),4 339,476 (339,476) - At end of the period 57,169,729-57,169,729 The accompanying notes form an integral part of the financial statements. 12
STATEMENT OF CASH FLOWS FOR THE FINANCIAL PERIOD ENDED 31 JULY 2013 (unaudited) 1.5.13 to 31.7.13 1.5.12 to 31.7.12 CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES Interest received 417,641 421,189 Manager s fee paid (79,404) (69,747) Trustee s fee paid (6,508) (5,586) Payment for other fees and expenses (1,546) (1,494) Net cash generated from operating and investing activities 330,183 344,362 CASH FLOWS FROM FINANCING ACTIVITIES Cash received from units created 15,081,526 16,446,585 Cash paid on units cancelled (40,673,142) (17,949,882) Net cash used in financing activities (25,591,616) (1,503,297) NET DECREASE IN CASH AND CASH EQUIVALENTS (25,261,433) (1,158,935) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 65,315,709 58,316,747 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 40,054,276 57,157,812 Cash and cash equivalent comprise: Cash at bank 8,481 9,934 Short term deposits 40,045,795 57,147,878 40,054,276 57,157,812 The accompanying notes form an integral part of the financial statements. 13
NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD ENDED 31 JULY 2013 1. SHORT TE DEPOSITS Short term deposits with: 31.7.2013 31.7.2012 Licensed banks 40,045,795 57,147,878 Investment bank - - 40,045,795 57,147,878 Short term deposits are placed with licensed financial institutions. The weighted average interest rate and average remaining maturity of the short term deposits are as follows: Weighted average interest rate Remaining maturity 31.7.2013 31.7.2012 1.5.2011 31.7.2013 31.7.2012 1.5.2011 % % % Days Days Days Short term deposits 2.96 3.05 2.95 1 9 4 2. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS Net asset value attributed to unitholders is represented by: Note 31.7.13 31.7.12 1.5.11 Unitholders contribution (a) 40,023,177 57,169,729 9,584,704 Retained earnings: Realised reserves (b) - - - Unrealised reserves (c) - - - 40,023,177 57,169,729 9,584,704 a. Unitholders Contribution 31.7.13 31.7.12 No. of units No. of units At beginning of the year 65,278,762 65,278,762 58,333,550 58,333,550 Add: Creation of units 15,081,526 15,081,526 16,446,585 16,446,585 Less: Cancellation of units (40,673,142) (40,673,142) (17,949,882) (17,949,882) Add: Reinvestment of income distribution 336,031 336,031 339,476 339,476 At end of the period 40,023,177 40,023,177 57,169,729 57,169,729 14
2. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS (CONTD.) b. Realised reserves 31.7.13 31.7.12 At beginning of the year - - Net realised gain 336,031 339,476 Income Distribution (336,031) (339,476) At end of the period - - c. Unrealised reserves 31.7.13 31.7.12 At beginning of the year - - Net unrealised gain - - At end of the period - - In accordance with the Information Memorandum, the maximum number of units that can be issued for circulation is 1,000,000,000 units. The number of units legally or beneficially held by the Manager, Kenanga Investors Berhad, as of was nil (2012 by ING Funds Berhad: 2,994,525) units valued at 1.00. Holdings by parties related to the Manager as of were nil (2012: nil). Pursuant to the Sixth Schedule of the Deed dated 25 February 2008, the Manager is entitled to a sales charge of not more than 8% of the net asset value of the Fund. No sales charges for the financial period ended. 3. INCOME DISTRIBUTION Distributions to unitholders since 1 May 2013 to were from following source income entitlement distributed on: Gross/Net distribution per unit (sen) 31 May 2013 0.20 129,817 30 June 2013 0.20 122,536 0.20 83,678 Total 0.60 336,031 15
3. INCOME DISTRIBUTION (CONTD.) Distributions to unitholders since 1 May 2012 to 31 July 2012 were from following source income entitlement distributed on: Gross/Net distribution per unit (sen) 31 May 2012 0.21 119,590 29 June 2012 0.20 95,781 31 July 2012 0.21 124,105 Total 0.62 339,476 The distributions declared are derived from the following sources: 1.5.13 to 31.7.13 1.5.12 to 31.7.12 Interest income 415,623 417,486 Less: Expenses (79,592) (78,010) 336,031 339,476 Gross distribution per unit (sen) 0.60 0.62 Net distribution per unit (sen) 0.60 0.62 4. TRANSACTIONS WITH FINANCIAL INSTITUTIONS Transaction Percentage of value total % Hong Leong Bank Bhd 898,163,905 24.9 CIMB Bank Bhd 896,719,932 24.8 RHB Bank Bhd 883,412,000 24.4 UOB (M) Bank Bhd 490,008,000 13.6 Ambank (M) Bhd 443,834,166 12.3 3,612,138,003 100.0 The above transactions values are in short term deposits. Transactions in short term deposits do not involve any commission or brokerage fees. None of the parties mentioned is related to the Manager. 16
ADDITIONAL INFOATION KEY PERSONNEL OF THE MANAGER The Management Team Abdul Razak bin Ahmad Chief Executive Officer/ Executive Director Abdul Razak bin Ahmad was appointed as Chief Executive Office / Executive Director of KIB on 19 July 2010. He has more than twenty (20) years of experience in the financial industry; mainly Asset Management, Unit Trust Business, Corporate Banking and Treasury. He had held Senior Management positions and directorship in three (3) Investment Management Organizations in Malaysia. He holds a Bachelor Degree of Science majoring in Business Administration (Finance) Magna Cum Laude from University of Southwestern Louisiana, USA. He is a holder of the Capital Markets Services Representative s Licence and a Certified Financial Planner. Ismitz Matthew De Alwis Deputy Chief Executive Officer Ismitz Matthew De Alwis joined KIB in June 2013 as Deputy Chief Executive Officer following the acquisition of ING Funds Berhad ( ING Funds) by KIB. He is responsible for the company's retail business, finance, strategic business planning, risk management and governance, business development, operations and IT functions. He was with ING Funds since 2003 and was part of the pioneer team who was responsible for the exponential growth of ING Funds in Malaysia. He was the Executive Director and country head for ING Funds. Before assuming the strategic and executive oversight of ING Funds; he was responsible for nationwide distribution, product management and business development for retail, corporate and institutional markets. He started his career as an investment analyst with a regional research & advisory firm, where he obtains vast regional exposure in Hong Kong, Philippines, Dubai and Singapore. He was responsible for research, marketing, distribution and product development. Upon his return to Malaysia, he joined a local established financial institution and investment management company before joining ING Funds. He brings with him 21 years of experience and multiple expertise including a number of leadership roles experiences in the field of financial and investment management. Ismitz Matthew holds a MBA from Southern Cross University where he graduated with distinction and a Bachelor Degree (H) in Business Administration from IT. In addition, he holds two other professional qualifications from the Chartered Institute of Marketing UK (CIM UK), and is a Certified Financial Planner (CFP). Ismitz Matthew is also a Capital Markets Services Representative s Licence holder for investment advice, fund management and dealing in private retirement schemes approved by the Securities Commission Malaysia. Shahariah Binti Shaharudin Head, Institutional Business Shahariah Binti Shaharudin joined KIB in April 2011 as Head of Institutional Business overseeing the wholesale business. Shahariah brings with her twenty (20) years of experience in the financial services industry. She began her career in a local bank and has extensive experience in both Retail and Corporate Banking. Subsequently she joined a stock broking company as Head of Dealing managing Institutional Trade. In 2006, she joined RHB Investment Management Sdn Bhd under Strategic Business and Market Development Division where her core responsibility is sourcing business and servicing both retail and wholesale clients ranging from unit trust, corporate and government agencies to insurance companies. She graduated with Bachelor of Arts Degree in Business Studies from Knox College, Illinois and Master of Arts in Economics from University of Illinois, Springfield, USA. She holds the Capital Markets Services Representative s Licence. Yap Siok Hoon Head, Retail Client Solutions & Services Group Yap Siok Hoon joined KIB in May 2012 as Head of the Retail Client Solutions & Services Group, overseeing the KIB s retail unit trust business. Siok Hoon brings with her fifteen (15) years of experience in the asset management industry and holds a Bachelor (First Class Honours) in Business Administration degree from Universiti Utara Malaysia. She started her career with Hong Leong Asset Management (HLAM) in April 1997 and has held many senior management positions, ultimately rising to a position of General Manager, Client Solutions Group, in July 2011. This role saw her managing the departments of both Retail and Institutional Business Development and Customer Experience. Her specific experience includes distribution channel sales and marketing support, agency and Institutional Unit Trust Adviser (IUTA) development, training and product development. Andrew Chan Yee Kok Head, Finance & Investment Operations Andrew Chan Yee Kok joined KIB in June 2013 to head the Finance & Investment Operations team. Prior to this, Andrew was with ING Funds Berhad ( ING Funds ), where he joined since 2004. He has been with ING Funds since the company s inception and is one of the pioneers during the company s green field set-up. Andrew has more than 20 years of experience in the business management, finance and accounting field. He started his accounting career in Australia. Upon his return, he joined a public-listed company as a senior accountant. His last stint prior to joining ING Funds was with an established unit trust management company where he was responsible for all financial reporting and management. Andrew is a CPA, Aust and holds a Bachelor of Economics from La Trobe University, Melbourne, Australia. Mariam Veronica Abu Bakkar Seddek Head, Compliance Mariam Veronica Abu Bakkar Seddek joined KIB in July 2012 as Head of Compliance. She graduated with a Bachelor of Science in Accounting from University of Wales Cardiff, United Kingdom in 1998. She worked as a teacher in the United Kingdom for a year before joining the SC in 1999. She served the SC for 8.5 years where she specialised in auditing asset management companies. Thereafter, she served as the Head of Compliance in a fund management company for 4 years. 17
ADDITIONAL INFOATION KEY PERSONNEL OF THE MANAGER The Investment Team Lee Sook Yee Chief Investment Officer Lee Sook Yee joined KIB as the Chief Investment Officer ( CIO ) in March 2013, bringing with her more than twelve (12) years of experience in local and regional equities investment. Prior to this, Sook Yee was Head of Equities at Meridian Asset Management ( Meridian ), where she led an experienced team of fund managers/analysts in managing equities portfolios of more than 1 billion in assets under management. At Meridian, she managed various local and regional funds. Before joining Meridian, Sook Yee was Vice President/Senior Portfolio Manager at Credit-Suisse Asset Management in Singapore where she co-managed mutual funds focusing on emerging Asian markets. She was also Associate Director/ Portfolio Manager with UOB-OSK Asset Management. Wong Yew Joe Director of Investment, Fixed Income Wong Yew Joe joined KIB in April 2011, bringing with him more than eleven (11) years of experience in the fund management industry. Prior to this, he has been in RHB Investment Management Sdn Bhd (RHBIM) for a total of seven (7) years. As the Head of Fixed Income in RHBIM, he was responsible for all fixed income investments, totalling about 9 billion worth of funds managed by RHBIM. Prior to RHBIM, he was with SBB Asset Management Sdn Bhd for a year as a credit analyst. Before that, he was with BHLB Asset Management Sdn Bhd and his principal involvement there was in business development and corporate marketing. Yew Joe is a graduate from the University of Southern Queensland with a Bachelor s Degree, majoring in Accounting and Finance. Tammi Lim Geok Wah Director of Investment, Equities Tammi Lim Geok Wah joined KIB in October 2011. Prior to this, she was attached to RHB Investment Management as Head of Equities for over four (4) years where she was responsible for the management of institutional funds, unit trust funds and corporate accounts. She began her career as an investment analyst in TA Securities Holding Berhad servicing both institutional and retail clients. Thereafter, she moved on to the fund management industry with Asialife Insurance Berhad and Manulife Insurance Berhad where she was responsible for the management of both company s life funds as well as investment-linked funds. She has more than eighteen (18) years experience in the fund management industry. She graduated from the University of Toledo, Ohio with a Masters of Business Administration, majoring in Finance. Syhiful Zamri Bin Abdul Azid Director of Investment, Credit and Advisory Syhiful Zamri Bin Abdul Azid joined KIB in April 2011. Prior to this, he was with RHB Investment Management Sdn Bhd (RHBIM) as Head of Fund Management Research for more than three (3) years. He has also been with KAF Investment Bank for more than five (5) years before joining RHBIM. He has wide experience in both equity and fixed income research and had exposures doing financial analysis and marketing of unit trust funds. He graduated with an Honours Degree from De Montfort University (UK) with Bachelor in Accounting and Finance. He has more than ten (10) years experience in the industry. Nik Hazim Nik Mohamed Senior Portfolio Manager Nik Hazim Nik Mohamed joined the Management Company in April 2009 as a fund manager. Prior to this, he was with Permodalan Nasional Berhad (PNB) having almost fourteen (14) years experience in the company. During his stint in PNB, he had started out managing international funds for proprietary accounts and later on public funds in Singapore. He also has wide experience in managing local unit trust fund for PNB and had exposures doing financial analysis and marketing of unit trust funds. He graduated with an Honours Degree from Universiti Utara Malaysia in Bachelor in Business Administration majoring in Finance. Tan Lip Kwang Portfolio Manager Tan Lip Kwang joined Kenanga Group in May 2007. He started as an analyst in Kenanga Fund Management Berhad and trained as a generalist specializing in Malaysia market. He was promoted as a portfolio manager in August 2009 after obtaining his Capital Markets Services Representative s Licence in July 2009. Prior to Kenanga Fund Management Berhad, he was an internal auditor with Public Bank for one and a half year. Lip Kwang holds a Bachelor Degree in Finance from Lancaster University and a MSC in Actuarial Science from City University of London. Lip Kwang was appointed as the portfolio manager of KIB on 1 November 2010. 18