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KENANGA PREMIER FUND

INTERIM REPORT

For the Financial Period Ended 30 June 2013

i

KENANGA PREMIER FUND (KPF)

Report to Unit Holders for the 6-Month Financial Period Ended 30 June 2013

Contents Page

CORPORATE DIRECTORY ii

DIRECTORY OF MANAGER’S OFFICES iii

MANAGER’S REPORT

1.0 FUND INFORMATION 1

2.0 FUND REVIEW 2 - 3

3.0 MARKET REVIEW & OUTLOOK 4 - 5

4.0 PERFORMANCE DATA 6 - 7

5.0 PORTFOLIO COMPOSITION 8 - 9

TRUSTEE’S REPORT 10

STATEMENT BY THE MANAGER 11

STATEMENT OF COMPREHENSIVE INCOME 12

STATEMENT OF FINANCIAL POSITION 13

STATEMENT OF CHANGES IN EQUITY 14

STATEMENT OF CASH FLOwS 15

NOTES TO THE FINANCIAL STATEMENTS 16 - 47

ii

CORPORATE DIRECTORY

MANAGER: KENANGA INVESTORS BERHAD (Company No. 353563-P)

REGISTERED OFFICEKenanga Investors Berhad (KIB)8th Floor, Kenanga International, Jalan Sultan Ismail,50250 Kuala Lumpur, Malaysia.Tel: 03-2162 1490 Fax: 03-2161 4990

BUSINESS OFFICESuite 12.02, 12th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.Tel: 03-2057 3688 / 03-2713 3188Fax: 03-2161 8807 / 03-2713 5868E-mail: [email protected] Website: www.KenangaInvestors.com.my

BOARD OF DIRECTORSDatuk 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 HuatAbdul Razak bin AhmadPeter John Rayner

COMPANY SECRETARY: Norliza Abd Samad, (MAICSA 7011089)9th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.

TRUSTEE: HSBC (MALAYSIA) TRUSTEE BERHAD (Company No. 1281-T)

REGISTERED AND BUSINESS OFFICE 13th Floor, Bangunan HSBC, South Tower, No. 2, Leboh Ampang, 50100 Kuala Lumpur, Malaysia. Tel: 03-2075 7800 Fax: 03-2026 1273

EXTERNAL FUND MANAGER: KENANGA ISLAMIC INVESTORS BERHAD (Company No. 451957-D)

REGISTERED OFFICE8th Floor, Kenanga International, Jalan Sultan Ismail,50250 Kuala Lumpur, Malaysia.Tel: 03-2162 1490 Fax: 03-2161 4990

BUSINESS OFFICESuite 12.02, 12th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.Tel: 03-2057 3688 Fax: 03-2161 8805

AUDITOR: ERNST & YOUNG

Room 300-303, 3rd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak, Malaysia.

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DIRECTORY OF MANAGER’S OFFICES

REGIONAL BRANCH OFFICES:

Kuala LumpurSuite 12.02, 12th Floor, Kenanga InternationalJalan Sultan Ismail,50250 Kuala Lumpur, MalaysiaTel: 03-2057 3688 / 03-2713 3188Fax: 03-2161 8807 / 03-2713 5868

Johor BahruLot 11.03, 11th Floor, Menara MSC Cyberport5 Jalan Bukit Meldrum80300 Johor Bahru, JohorTel: 07-223 7505/4798 Fax: 07-223 4802

Petaling JayaUnit B-6-2, Sunway Giza MallDataran Sunway, PJU 5/14Kota Damansara47810 Petaling Jaya, SelangorTel: 03-6148 1871, 6150 3983 Fax: 03-6148 1872

Kuching1st Floor, No 71, Lot 7Lot 10900, Jalan Tun Jugah93350 Kuching, SarawakTel: 082-572 228 Fax: 082-572 229

KlangNo. 12 Jalan Batai Laut 3, Taman Intan41300 Klang, Selangor Darul EhsanTel:03-3341 8818, 3348 7889 Fax:03-3341 8816

Kota KinabaluA-03-11, 3rd FloorBlock A Warisan SquareJalan Tun Fuad Stephens88000 Kota Kinabalu, SabahTel: 088-447 089/448 106 Fax: 088-447 039

PenangBlok A, Aras 3,Wisma PerkesoNo. 269, Jalan Burma10538 George Town, PenangTel: 04-226 4880 Fax: 04-226 5120

IpohNo. 5A, Persiaran Greentown 9Greentown Business Centre30450 Ipoh,Perak Darul RidzuanTel: 05-254 7573/7570 Fax: 05-254 7606

MelakaNo. 25-1 Jalan Kota Laksamana 2/17Taman Kota Laksamana Seksyen 275200 MelakaTel: 06-281 8913, 282 0518 Fax: 06-281 4286

SerembanSuite 08-3, Seremban City CentreJalan Pasar70000 SerembanTel: 06-761 5678 Fax: 06-761 2243

Agency OfficeMiri (Sarawak)c/o Lot 1084, 2nd Floor,Jalan Merpati98000 MiriSarawak, MalaysiaTel: 085-427 782

1

MANAGER’S REPORT

Dear Unit Holders,

We are pleased to present the Manager’s interim report and the financial statements of the KENANGA PREMIER FUND for the 6-month financial period ended 30 June 2013.

1.0 FUND INFORMATION

1.1 Fund Name

KENANGA PREMIER FUND (KPF or the Fund)

1.2 Fund Type / Category

Equity / Growth

1.3 Investment Objective

The Fund aims to provide consistent annual returns and medium to long-term capital appreciation.

1.4 Investment Strategy

The Fund will invest principally in a diversified portfolio of equity and equity-related securities.

1.5 Asset Allocation

70% - 98% in equities and minimum 2% in liquid assets.

1.6 Duration

The Fund was launched on 26 November 1996 and shall exist as long as it appears to the Manager and the Trustee that it is in the interests of the unit holders for it to continue.

1.7 Performance Benchmark

FTSE-Bursa Malaysia 100 Index.

1.8 Distribution Policy

The Fund intends to pay income by way of distributions or by the creation of additional units after the end of each Accrual Period (i.e. 12-month period ending on the last day of December of each year) or any specified period, where possible.

2


2.0 FUND REVIEw

2.1 Fund performance vs benchmark performance

NAV per unit (RM) 1 Fund Return 3

(%)Benchmark Return 3

(%)30/6/2013 31/12/20122

0.4381 0.4179 11.33 6.89

1 Published NAV per unit based on last done price.2 On 31 December 2012, the Manager declared gross dividend of 2.49 sen per unit. 3 Source: Lipper. Performance returns are adjusted for all distributions (on a reinvested basis) and unit splits.

For the period under review to 30th June 2013, the Fund appreciated by 11.33%, outperforming the 6.89% increase in the FBM-100. The outperformance was mainly due to better stock selection. The top 5 performers during the period were (1) Dayang Enterprise (+105.9%); (2) Sunway Bhd (+48.8%); (3) Sapurakencana Petroleum (+29.8%); (4) Tenaga (+19.5%) and (5) MBM Resources (+19.3%).

2.2 Has the Fund achieved its objective?

Since inception, the Fund has appreciated by 289.80%* in Net Asset Value terms (while its benchmark rose 51.36%*), thus achieving the Fund’s stated objective of medium to long term capital appreciation.

* Source: Lipper.

2.3 Strategies & policies employed

For the period under review, the Fund continued with its strategy of investing in companies with sustainable business models and competent management, whilst trading at a discount to their intrinsic / fair value. The Fund focused on companies whose top line / revenue should prove to be relatively more resilient to a global economic slowdown and have the ability to maintain their profit margins. We also focused on companies likely to benefit from Malaysia’s on-going Economic Transformation Program.

Sectors that we favor include: i) REITs, ii) Consumer staples and FMCG, iii) Healthcare, iv) Plantations on a longer term, and v) Oil & Gas.

2.4 State of Affairs of the Fund

There were no other significant changes to the state of affairs of the Fund and no circumstances that materially affect the interests of Unit Holders up to the date of this Manager’s report.

3


2.5 Unit Holders’ Profile

As at 30 June 2013, the number of units of the Fund in circulation stood at 242,435,923 (includes Manager Stock) units out of an approved Fund size of 1 billion units.

Breakdown of Unit Holdings by Size

Unit Holders Unit Holdings

Size of holdings Number % Units %

5,000 and below 444 16.49 1,052,693.16 0.43

5,001 - 10,000 381 14.15 2,771,390.47 1.14

10,001-50,000 1171 43.50 29,738,213.78 12.27

50,001-500,000 648 24.07 79,303,493.70 32.71

500,001 and above 48 1.78 129,570,131.63 53.45

Total 2692 100.00 242,435,922.74 100.00

Manager and Related Party Holdings

Breakdown of holdings by the Manager and related parties as at 30 June 2013 is as follows:-

No. of Units Held

Manager# -

Director of the Manager -

Other related parties -

Total -

# excludes normal & EPF bookings

2.6 Rebates & Soft Commission

The Manager from time to time may receive rebates which are then paid to the Fund. During the financial period under review, no rebates were received by virtue of transactions conducted by the Fund. The Manager received soft commission from its brokers by virtue of transactions conducted by the Fund in the form of research and advisory services. These services assist in the decision-making process relating to the investments of the Fund and are of a demonstrable benefit to the Unit Holders.

4


3.0 MARKET REVIEw & OUTLOOK

3.1 Market Review

Equities market in the region performance can be broken up into three parts for the period under review. The Nikkei had a fantastic year (+31.8% yoy) following the government’s surprise decision to follow the US “quantitative easing programme” with a potential value of US$1.5 trillion in an effort to inflate the long stagnant economy. The emerging countries of ASEAN were clear outperformers led by Indonesia and Philippines which rose by 11.6% and 11.2% respectively as investors react positively to the underlying domestic economic growth of these economies. The strong inflow of funds into these countries was also helped by US’s QE3 programme.

Governments around the world were generally adopting a loose monetary policy to help economic recovery. The major underperforming countries were China, Hong Kong and Korea as the benchmark indices of these countries fell by 13%, 8% and 7% respectively. Investors were worried the Chinese government might tighten further to rein in inflation especially for property and non-productive sectors.

Malaysia on the other hand, lagged regional market especially in the 1Q ’13 due to uncertainty over the timing and result of the 13th Malaysia General Election. The FBMS index soared to record level, especially after results of the 13th General Election is known helped by the strong inflows of foreign funds as well as participation from “cashed up” domestic funds. The KLCI Index rose by 5% whilst the broader FBM Shariah Index grew by 6.7%.

The market reacted positively after Barisan National retained power albeit with a slightly lesser majority. The KLCI index rose by 4.8% on the first day after the announcement of the election result. This could be attributed to the removal of risk premium associated with the uncertainty over the general election. On the economic side, the 1Q’13 GDP growth of 4.1% fell short of expectation. This was attributed to weaker exports and slower growth in private investments due to uncertainty from the election outcome. The 1Q reporting season in Malaysia came in within analysts’ expectation with 60% of the results met consensus expectation whilst around 17% was above expectation. The disappointment came mostly from the oil & gas, plantation, and gaming related companies.

Equities market reacted strongly on the negative in June after the Fed’s chairman, Ben Bernanke commented that it would be appropriate to moderate the monthly pace of purchases later this year. It sparked investors’ fear that US’ QE3 will be tapering off earlier than expected. The situation was made worse when the PBoC initially refused to ease a liquidity squeeze in the interbank market which caused a sharp spike in SHIBOR rate to peak at 13.4%. The decline was led by China SHComp (-14%), Philippines (-7.9%) and Hong Kong (-7.1%). Malaysia was the only market that managed to stay flat as domestic funds managed to absorb the foreigners selling. The Ringgit weakened from RM2.96/US$ to RM3.22/US$ as a result of the outflow.

5


3.2 Market Outlook

After the sterling performance in 2Q2013 amidst the positive reception to the outcome of the 13th General Election wherein the benchmark FBMKLCI chalked up 6.1% q-o-q, we expect 3Q2013 to be in consolidative mode given the prospects of the US QE being tapered off and the Chinese government higher tolerance for lower economic growth in an effort to regulate sector such as property. We believe the market will experience heightened volatility in view of potential portfolio outflows to developed markets in view of improvement in the underlying economy which in turn fuels corporate earnings. Having said that, this may just be a temporary phase of adjustment due to the reversal of short term capital, which incidentally will coincide with the full month of Ramadan.

The Malaysian equity market remains supported by strong fundamentals underpinned by its sustainable GDP growth of 5.1% in 2013 and 5.4% in 2014 which is driven by private consumption growth and the new investment cycle; and strong domestic liquidity. Valuations remain elevated at long term mean of 15-16x CY2013EPS, but justified by the 5-10% EPS growth in CY13/14; not to mention its underperformance vis-à-vis the region since September 2010.

Sector wise, we remain positive on key domestic sectors such as oil and gas, construction and banks, which will continued newsflow from the government’s ETP in the various sectors/projects such as the MRT2 and MRT3, High Speed Rail, Petronascapex plan, although we remain cautious on the property sectors following murmurs of possible tightening by Bank Negara to prevent speculation; and have turned mildly positive on the plantation sector following the bottoming out of CPO prices after the sizeable drawdown in inventory.

Strategy

We maintain our barbell strategy of holding a good balance of high yielding/defensive stocks and beta stocks. We will continue to deploy the excess funds on dips, as we believe market will fare better in the later part of the year due to improving economic conditions.

Our stock selection will move towards sectors that will benefit from being the main drivers of the economy such as the oil & gas, construction and plantation sector.

This will be balanced out with having a significant portion of your portfolio invested in high yielding stocks to ensure stability. Sectors that we favour include REITs, consumer staples and FMCG, healthcare, O&G and plantations on a longer term.

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4.0 PERFORMANCE DATA

4.1 Performance Chart

PERFORMANCE CHART SINCE LAUNCH (26/11/1996 – 30/6/2013)

KENANGA PREMIER FUND vs. BENCHMARK

% Growth, Cum, TR, ExD, MYR, Launch to 30/06/2013

0.00

-50.00

50.00

-100.00

100.00

150.00

250.00

200.00

250.00

200.00

31/1

2/19

97

31/1

2/19

96

31/1

2/19

99

31/1

2/19

98

31/1

2/20

01

31/1

2/20

00

31/1

2/20

03

31/1

2/20

02

31/1

2/19

95

31/1

2/19

94

31/1

2/20

07

31/1

2/20

06

31/1

2/20

09

31/1

2/20

08

31/1

2/20

11

31/1

2/20

12

30/0

6/20

13

31/1

2/20

10

Kenanga Premier* : 289.80 FTSE Bursa Malaysia Top 100 CR* : 51.36

51.36

289.80

* Contains estimated data.Source: Lipper

4.2 Average Total Returns

1 year 3 years 5 years

30/6/12 – 30/6/13 30/6/10 – 30/6/13 30/6/08 – 30/6/13

KPF (%) 15.06% 13.21% 5.57%

Benchmark (%) 12.45% 13.25% 11.46%

Source: Lipper

4.3 Annual Total Returns

Period Under Review

31/12/12 – 30/6/13

201231/12/11 – 31/12/12

201131/12/11 – 31/12/12

201031/12/11 – 31/12/12

200931/12/11 – 31/12/12

200831/12/11 – 31/12/12

Since inception

09/11/07 – 30/6/13

KPF (%) 11.33% 7.62% 3.18% 14.83% 33.56% -49.67% 289.80%

Benchmark (%) 6.89% 9.60% 1.94% 21.76% 48.00% -40.92% 51.36%

Source: Lipper

Investors are reminded that past performance is not necessarily indicative of future performance and that unit prices and investment returns may fluctuate.

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4.4 Other Performance Data

Performance details of the Fund as at 30 June 2013 and the two previous financial years are as follows:

6-months ended 30/6/2013




Net Asset Value (RM’000 ) 1 106,204 103,206 111,051 124,660

Net Asset Value Per Unit (RM)

0.4381 0.4179 cd 0.3912 xd

0.4232 cd

0.3950 xd

0.4539 cd

0.4179 xd

Units In Circulation (‘000 units)

242,436 246,925 281,120 298,315

Highest Net Asset Value Per Unit (RM)

0.4494 0.4180 0.4479 0.4595

Lowest Net Asset Value Per Unit (RM)

0.3838 0.3887 0.3564 0.3802

Total Return (%) 2 11.33 7.62 1.27 12.83

- Capital Growth (%) 2 11.33 (0.38) (5.48) 3.88

- Gross Income Distribution (%)

- 8.00 9.16 10.55

Gross Distribution Per Unit (RM)

- 0.0248 0.0362 0.0441

Net Distribution Per Unit (RM)

- 0.0244 0.0282 0.0360

Unit Split (Ratio) - - - -

Management Expenses Ratio (%) 3

0.86 1.91 1.62 1.65

Portfolio Turnover (times) 4 0.47 1.37 0.55 0.50

1 NAV computed based on last done price.2 Source: Lipper. Total return is the annualised return of the Fund for the respective financial period / years computed

based on the net asset value per unit and net of all fees. 3 Management Expense Ratio (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. MER is lower against previous financial years as the computations are for 6 months only.

4 Portfolio Turnover Ratio (PTR) is computed based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis. PTR is lower against previous years as the computations are for 6 months only.

4.5 Distribution / Unit Split for the Period under Review

No distribution / unit split was made during the period under review.

Investors are reminded that past performance is not necessarily indicative of future performance and that unit prices and investment returns may fluctuate.

8


5.0 PORTFOLIO COMPOSITION

5.1 Portfolio Composition

As at 30th June 2013, the asset allocation of the Fund stood at 91.30% in equities and the balance of 8.70% in liquidity. The increase in equities in 1H 2013 was because the Manager was confident that there is more upside potential to the market.

For a snapshot of the Fund’s asset allocation as at 30th June 2013, please refer to the pie charts below.


Asset Allocation as at 30 June 2013

Liquidity8.70%

Equity91.30%

Detailed Breakdown of Equity by Sector as at 30 June 2013

Trading/Services28.60%

Finance16.20%

Real Estate Investment

Trusts14.10%

Planta�on10.30%

Consumer Products

8.70%

Liquidity8.70%

Construc�on4.00%

Proper�es4.00% Infrastructure

2.90%Industrial Products

2.50%

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5.2 Portfolio Composition – Comparative Table

Details of portfolio composition of the Fund as at 30 June 2013 and the two previous financial years are as follows:

Sectors

30/6/2013 % of NAV

Based on last done price

31/12/2012 % of NAV Based on

last done price


last done price


last done price

Main Board

Construction 4.00 - 16.09 8.93

Consumer Products 8.70 8.78 - 9.82

Industrial Products 2.50 6.50 6.41 3.24

Infrastructure Project Companies 2.90 4.94 - 1.14

Plantation 10.30 5.36 6.80 2.38

Properties 4.00 4.47 2.86 8.94

Trading / Services 28.60 31.06 36.72 29.64

Finance 16.20 11.24 22.61 34.90

Technology - - - -

Ace Market - - - -

Derivative Securities

Warrants / ICULS - - - -

Trust, REITs 14.10 19.50 - -

Preference Shares - - - -

Total quoted/ unquoted investment 91.30 91.85 91.49 98.99

Fixed Income Securities - - - -

Collective Investment Scheme - - - -

Liquidity (Cash at Banks / Receivables) 8.70 8.15 8.51 1.01

Total 100.00 100.00 100.00 100.00

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TRUSTEE’S REPORT

To the Unit Holders of Kenanga Premier Fund

We have acted as Trustee of Kenanga Premier Fund (“the Fund”) for the financial period ended 30 June 2013. To the best of our knowledge, Kenanga Investors Berhad (“the Manager”), has operated and managed the Fund in accordance with the following:

(a) limitations imposed on the investment powers of the Manager and the Trustee under the Deed, the Securities Commission’s Guidelines on the Unit Trust Funds in Malaysia, the Capital Markets and Services Act 2007 and other applicable laws;

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

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

For HSBC (Malaysia) Trustee Berhad

Tan Bee Nie Head, Trustee Operations

Kuala Lumpur, Malaysia Date: 28 August 2013

11


STATEMENT BY THE MANAGER

To the Unit Holders of Kenanga Premier Fund

We, Abdul Razak Bin Ahmad and Bruce Kho Yaw Huat, being two of the directors of Kenanga Investors Berhad, the Manager, do hereby state that in the opinion of the Manager, the accompanying financial statements set out on pages 12 to 47 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and Securities Commission’s Guidelines on Unit Trust Funds in Malaysia so as to give a true and fair view of the financial position of Kenanga Premier Fund as at 30 June 2013 and of its financial performance and cash flows for the financial period then ended.

For and on behalf of the ManagerKenanga Investors Berhad

Bruce Kho Yaw Huat Abdul Razak Bin AhmadDirector Director

Kuala Lumpur, MalaysiaDate: 28 August 2013

12


Statement of Comprehensive IncomeFor the financial period ended 30 June 2013 (Unaudited)

1.1.2013 to 1.1.2012 to

Note 30.6.2013 30.6.2012

RM RM

INCOME

Gross dividend income 1,848,582 1,424,393

Interest income 173,461 167,188

Net gain from investments:

- financial assets at fair value through profit and loss (“FVTPL”) 8 10,010,306 1,863,206

12,032,349 3,454,787

EXPENSES

Manager’s fee 5 750,712 851,018

Trustee’s fee 6 35,033 39,714

Auditors’ remuneration 9,807 6,971

Tax agent’s fee 1,472 1,660

Administrative expenses 13,542 27,168

Brokerage and other transaction costs 60,028 -

870,594 926,531

Net income before tax 11,161,755 2,528,256

Income tax expense 7 (32,657) (60,350)

Net income after tax 11,129,098 2,467,906

Total comprehensive income for the period 11,129,098 2,467,906

Net income after tax is made up as follows:

Net realised gain 7,214,839 8,266,845

Net unrealised gain/(loss) 3,914,259 (5,798,939)

11,129,098 2,467,906

The accompanying notes are an integral part of the financial statements.

13


Statement of Financial Position as at 30 June 2013 (Unaudited)

As at As at

Note 30.6.2013 30.6.2012

RM RM

ASSETS

Investments 8 96,549,139 95,857,750

Deposits with licensed financial institutions 9 6,620,000 13,857,963

Tax recoverable 440,348 389,657

Interest receivable 723 4,470

Dividends receivable 189,328 57,440

Amount due from stockbrokers 11 1,875,475 -

Cash at bank 281,062 28,561

TOTAL ASSETS 105,956,075 110,195,841

LIABILITIES

Other payables and accruals 45,811 37,526

Amount due to Manager 10 122,232 228,474

TOTAL LIABILITIES 168,043 266,000

UNITHOLDERS’ EQUITY

Unitholders’ capital 54,842,685 67,424,423

Retained earnings 50,945,347 42,505,418

TOTAL EQUITY 12 105,788,032 109,929,841

TOTAL EQUITY AND LIABILITIES 105,956,075 110,195,841

UNITS IN CIRCULATION 13 242,435,923 272,702,534

NET ASSET VALUE (“NAV”) PER UNIT (RM) 14 0.4364 0.4031


14


Statement of Changes in Equity For the financial period ended 30 June 2013 (Unaudited)

Unitholders’ Retained Total

capital earnings equity

(Note 12) (Note 12)

RM RM RM

At 1 January 2012 71,013,439 40,037,512 111,050,951

Total comprehensive income for the period - 2,467,906 2,467,906

Creation of units 5,916,320 - 5,916,320

Cancellation of units (8,170,687) - (8,170,687)

Distribution equalisation (1,334,649) - (1,334,649)

At 30 June 2012 67,424,423 42,505,418 109,929,841

At 1 January 2013 56,790,963 39,816,249 96,607,212

Total comprehensive income for the period - 11,129,098 11,129,098

Creation of units 5,490,949 - 5,490,949

Cancellation of units (6,222,258) - (6,222,258)

Distribution equalisation (1,216,969) - (1,216,969)

At 30 June 2013 54,842,685 50,945,347 105,788,032


15


Statement of Cash Flows For the financial period ended 30 June 2013 (Unaudited)

1.1.2013 to 1.1.2012 to

30.6.2013 30.6.2012

RM RM

OPERATING AND INVESTING ACTIVITIES

Proceeds from sale of investments 49,313,620 63,124,534

Purchase of investments (44,094,985) (55,513,947)

Net dividends received 1,444,149 1,428,272

Interest received 175,574 171,377

Manager’s fee paid (757,551) (860,894)

Trustee’s fee paid (35,352) (40,175)

Auditors’ remuneration paid (21,000) (8,500)

Payment for other fees and expenses (4,713) (56,853)

Tax refund received 51,513 -

Net cash flows generated from operating and investing activities 6,071,255 8,243,814

FINANCING ACTIVITIES

Cash received from units created 5,758,060 5,918,550

Cash paid on units cancelled (7,713,954) (9,414,652)

Dividends to Unitholders (6,024,973) (7,927,593)

Net cash flows used in financing activities (7,980,867) (11,423,695)

NET DECREASE IN CASH AND CASH EQUIVALENTS (1,909,612) (3,179,881)

CASH AND CASH EQUIVALENTS AT 1 JANUARY 8,810,674 17,066,405

CASH AND CASH EQUIVALENTS AT 30 JUNE 6,901,062 13,886,524

Cash and cash equivalents comprise:

Cash at bank 281,062 28,561

Deposits with licensed financial institutions 6,620,000 13,857,963

6,901,062 13,886,524


16


Notes to the Financial Statements - 30 June 2013

1. The Fund, the Manager and their principal activities

Kenanga Premier Fund (the “Fund”) was constituted pursuant to a Deed of Trust dated 21 November 1996 followed by a first supplementary Deed of Trust dated 26 November 1998, a second supplementary Deed of Trust dated 16 November 2000 and a third supplementary Deed of Trust dated 19 December 2001 between the Manager, Kenanga Investors Berhad, the Trustee, Universal Trustee (Malaysia) Berhad and the registered Unitholders of the Fund. A fourth supplementary Deed of Trust dated 15 April 2005, a master supplementary Deed of Trust dated 1 June 2009 and a second master supplementary Deed of Trust dated 13 October 2010 were entered between the Manager, the new Trustee, HSBC (Malaysia) Trustee Berhad.

The Fund’s registered office is at 8th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur.

The objective of the Fund is to provide Unitholders with consistent annual returns and medium to long-term capital appreciation.

The principal activity of the Fund is to invest in “Authorised Investments” as defined under Clause 1 of the Deed of Trust, which include stocks and shares of companies quoted on Bursa Malaysia Securities Berhad and short term investments. The Fund commenced operations on 26 November 1996 and will continue its operations until terminated by the Trustee as provided under Clause 23 of the Deed of Trust.

The Manager, a company incorporated and domiciled in Malaysia, is a wholly-owned subsidiary of Kenanga Investment Bank Berhad, a company incorporated and domiciled in Malaysia. The principal activities of the Manager are the promotion and management of unit trust funds and the management of investment funds.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Fund have been prepared on in accordance with the Malaysian Financial Reporting Standards (“MFRS”).

The financial statements also comply with International Financial Reporting Standards (“IFRS”) as issued by International Accounting Standards Board.

The financial statements have been prepared on the historical cost basis, except for financial assets and financial liabilities held at fair value through profit or loss, that have been measured at fair value.

The financial statements are presented in Ringgit Malaysia (“RM”), being the Fund’s functional currency.

17



2. Summary of significant accounting policies (contd.)

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial period except as follows:

On 1 January 2013, the Fund adopted the following new and amended MFRS and IC Interpretations mandatory for annual financial periods beginning on or after 1 January 2013.

Description

Effective for annual periods beginning

on or after

MFRS 10 Consolidated Financial Statements 1 January 2013

MFRS 11 Joint Arrangements 1 January 2013

MFRS 12 Disclosure of Interests in Other Entities 1 January 2013

MFRS 13 Fair Value Measurement 1 January 2013

MFRS 119 Employee Benefits (IAS 19 as amended by IASB in June 2012) 1 January 2013

MFRS 127 Separate Financial Statements (IAS 27 as amended by IASB in May 2012)

1 January 2013

MFRS 128 Investments in Associates and Joint Ventures (IAS 28 as amended by IASB in May 2012)

1 January 2013

Amendment to MFRS 7 Disclosures: Offsetting Financial Assets and Financial Liabilities

1 January 2013

Amendment to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards - Government Loans

1 January 2013

IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013

Annual Improvements 2009-2012 Cycle 1 January 2013

Amendments to MFRS 10 Consolidated Financial Statements, MFRS 11 Joint Arrangements and MFRS 12 Disclosed of Interests in other Entities

1 January 2013

MFRS 3 Business combination (IFRS 3 Business Combinations issued by IASB in March 2004)

1 January 2013

MFRS 127 Consolidation and Separate Financial Statements (IAS 27 Consolidated and Separate Financial Statements revised by IASB in December 2003)

1 January 2013

Adoption of the above Standards and Interpretations did not have any significant effect on the financial performance and position of the Fund except for those discussed below:

18




2.2 Changes in accounting policies (contd.)

MFRS 9 Financial Instruments: Classification and Measurement

MFRS 9 reflects the first phase of the work on the replacement of MFRS 139 Financial Instruments: Recognition and Measurement and applies to classification and measurement of financial assets and financial liabilities as defined in MFRS 139 Financial Instruments: Recognition and Measurement. The adoption of the first phase of MFRS 9 will have an effect on the classification and measurement of the Fund’s financial assets. The Fund will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.

2.3 Financial assets

Financial assets are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Fund determines the classification of its financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, and loans and receivables.

(i) Financial assets at FVTPL

Financial assets are classified as financial assets at FVTPL if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading include equity securities and collective investment schemes acquired principally for the purpose of selling in the near term. All transaction costs for such instruments upon initial recognition are recognised directly in profit or loss.

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Changes in the fair value of those financial instruments are recorded in ‘Net gain or loss on financial assets at fair value through profit or loss’. Interest earned and dividend revenue elements of such instruments are recorded separately in interest income and ‘Gross dividend income’, respectively. Exchange differences on financial assets at FVTPL are not recognised separately in profit or loss but are included in net gains or net losses on changes in fair value of financial assets at FVTPL.

(ii) Loans and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. The Fund includes short term receivables in this classification.

19




2.3 Financial assets (contd.)

(ii) Loans and receivables (contd.)

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method less any allowance for impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Fund estimates cash flows considering all contractual terms of the financial instruments, but does not consider future credit losses. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

A financial asset is derecognised where the asset is disposed and the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Fund commits to purchase or sell the asset.

2.4 Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument. Financial liabilities are classified as other financial liabilities.

The Fund’s financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method as described in Note 2.3 (ii).

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

20




2.5 Determination of fair value

The fair value for financial instruments traded in active markets at the reporting date is based on their quoted price or binding dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

Where the Fund has assets and liabilities with offsetting market risks, it uses mid-market prices as a basis for establishing fair values for the offsetting risk positions and applies the bid or ask price to the net open position as appropriate.

For all other financial instruments not traded in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques include: using recent arm’s length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible. An analysis of fair values of financial instruments and further details as to how they are measured are provided in Note 20(b).

2.6 Impairment of financial assets

The Fund assesses at each reporting date whether a financial asset or group of financial assets classified as loans and receivables is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is an objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtor, or a group of debtors, is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and, where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred) discounted using the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in profit or loss as ‘Credit loss expense’.

Impaired debts, together with the associated allowance, are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Fund. If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a previous write-off is later recovered, the recovery is credited to the ‘Credit loss expense’.

Interest revenue on impaired financial assets is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

21




2.7 Net gain or loss on financial assets and liabilities at FVTPL

This item includes changes in the fair value of financial assets and liabilities held for trading or designated upon initial recognition as ‘at fair value through profit or loss’ and excludes interest and dividend income and expenses.

Unrealised gains and losses comprise changes in the fair value of financial instruments for the period and from reversal of prior period’s unrealised gains and losses for financial instruments which were realised (i.e. sold, redeemed or matured) in the reporting period.

Realised gains and losses on disposals of financial instruments classified as part of ‘at FVTPL’ are calculated using weighted average method. They represent the difference between an instrument’s initial carrying amount and disposal amount, or cash payments or receipts made of Islamic derivative contracts (excluding payments or receipts on collateral margin accounts for such instruments).

2.8 Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

2.9 Functional and presentation currency

The Fund’s functional currency is RM, which is the currency of the primary economic environment in which it operates. The Fund’s performance is evaluated and its liquidity is managed in RM. Therefore, the RM is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The fund’s presentation currency is also the RM.

2.10 Due to and due from brokers

Amounts due to brokers are payables for securities purchased (in a regular way transaction) that have been contracted for but not yet delivered on the reporting date. Refer to the accounting policy for ‘financial liabilities, other than those classified as at fair value through profit or loss’ for recognition and measurement.

Amounts due from brokers include margin accounts and receivables for securities sold (in a regular way transaction) that have been contracted for but not yet delivered on the reporting date. Refer to accounting policy for ‘loans and receivables’ for recognition and measurement.

Margin accounts represent cash deposits held with brokers as collateral against open futures contracts.

22




2.11 Unitholders’ capital

The Unitholders’ contribution to the Fund meet the definition of puttable instruments.

Distribution equalisation represents the average distributable amount included in the creation and cancellation prices of units. This amount is either refunded to Unitholders by way of distribution and/or adjusted accordingly when units are cancelled.

2.12 Distributions

Distributions are at the discretion of the Fund. A distribution to the Fund’s Unitholders is accounted for as a deduction from realised reserves except where the distribution is sourced out of distribution equalisation which is accounted for as a deduction from Unitholders’ capital. A proposed distribution is recognised as a liability in the period in which it is approved. No income distribution was declared by the Fund for the financial period ended 30 June 2013.

2.13 Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank and deposits with licensed financial institutions which are subject to an insignificant risk of changes in value, with original maturities of three months or less.

Short-term investments that are not held for the purpose of meeting short-term cash commitments and restricted margin accounts are not considered as ‘cash and cash equivalents’.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts when applicable.

2.14 Income Recognition

Income is recognised to the extent that it is probable that the economic benefits will flow to the Fund and the income can be reliably measured. Income is measured at the fair value of consideration received or receivable.

Dividend income is recognised when the Fund’s right to receive payment is established.

Interest income, which includes the accretion of discount and amortisation of premium on fixed income securities, is recognised using the effective interest method.

2.15 Fees

Manager’s fee and Trustee’s fee are recognised on an accrual basis.

23




2.16 Income tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

The Fund is exempted from income taxes, except for certain investment income that are subject to tax deducted at the source of the income. The Fund presents the income tax separately from the gross investment income in the statement of comprehensive income. For the purpose of the statement of cash flows, cash inflows from investments are presented net of income taxes, when applicable.

No deferred tax is recognised as there are no material temporary differences.

2.17 Segment reporting

For management purposes, the Fund is managed by a single portfolio, equity securities. The Investment Committee assumes the role of chief operating decision maker, for performance assessment purposes and to make decisions about resources allocated to the investment segment.

3. Significant accounting judgements, estimates and assumptions

The preparation of the Fund’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts recognised in the financial statements and disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgements

In the process of applying the Fund’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

Going Concern

The Fund’s management has made an assessment of the Fund’s ability to continue as a going concern and is satisfied that the Fund has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Fund’s ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the going concern basis.

24



3. Significant accounting judgements, estimates and assumptions (contd.)

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. The Fund based its assumptions and estimates on parameters available when the financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond the control of the Fund. Such changes are reflected in the assumptions when they occur.

Fair value of financial instruments

When the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using a variety of valuation techniques that include the use of mathematical models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. The estimates include considerations of liquidity and model inputs such as credit risk (both own and counterparty’s), correlation and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments in the statement of financial position and the level where the instruments are disclosed in the fair value hierarchy. The models are calibrated regularly and tested for validity using prices from any observable current market transactions in the same instrument (without modification or repackaging) or based on any available observable market data. MFRS 7 requires disclosures relating to fair value measurements using a three-level fair value hierarchy. The level within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input requires judgement, considering factors specific to the asset or liability. To assess the significance of a particular input to the entire measurement, the Fund performs sensitivity analysis or stress testing techniques.

4. Standards issued but not yet effective

Standards issued but not yet effective up to the date of issuance of the Fund’s financial statements are listed below. The Fund intends to adopt applicable standards when they become effective.

Description

Effective for annual periods beginning

on or after

Amendment to MFRS 132 Offsetting Financial Assets and Financial Liabilities 1 January 2014

MFRS 9 Financial instruments (IFRS 9 issued by IASB in November 2009) 1 January 2015

MFRS 9 Financial instruments (IFRS 9 issued by IASB in October 2010) 1 January 2015

25



5. Manager’s fee

The Manager is currently charging Manager’s fee of 1.50% (30.6.2012: 1.50%) per annum of the NAV of the Fund. This is calculated on a daily basis by dividing the NAV of the Fund before deducting the Manager’s fee and Trustee’s fee for the particular day by the number of days in the period and multiplying the total with the rate of the annual fee disclosed in the current prospectus of the Fund. However, Clause 24(7) of the Deed of Trust provides that the Manager is entitled to a fee not exceeding 1.50% (30.6.2012: 1.50%) per annum of the NAV of the Fund.

With effect from 1 May 2005, Clause 13.1.2 of the fourth supplementary Deed of Trust provides that the maximum Manager’s fee be increased to 2.00% per annum.

6. Trustee’s fee

The Trustee’s fee is currently computed at 0.07% (30.6.2012: 0.07%) per annum on the NAV of the Fund. This is calculated on a daily basis by dividing the NAV of the Fund before deducting the Manager’s fee and Trustee’s fee for the particular day by the number of days in the period and multiplying the total with the rate of the annual fee disclosed in the current prospectus of the Fund. However, Clause 25(8) of the Deed of Trust provides that the Trustee is entitled to a fee at such rate as may be agreed between the Manager and the Trustee from time to time.

With effect from 1 May 2005, following the change in Trustee to HSBC (Malaysia) Trustee Berhad, Clause 13.2.2 of the fourth supplementary Deed of Trust provides that the maximum Trustee’s fee be stated at 0.15% (30.6.2012: 0.15%) per annum of the NAV of the Fund subject to a minimum of RM18,000 (30.6.2012: RM18,000) per annum.

7. Income tax expense

1.1.2013 to 1.1.2012 to

30.6.2013 30.6.2012

RM RM

Income tax:

Tax expense for the period 28,597 60,350

Underprovision in prior year 4,060 -

32,657 60,350

Income tax is calculated at the Malaysian statutory tax rate of 25% (30.6.2012: 25%) of the estimated assessable income for the financial period.

The Malaysian tax charge for the financial period is in relation to the taxable income earned by the Fund after deducting tax allowable expenses. In accordance with Schedule 6 of the Income Tax Act 1967, interest income earned by the Fund is exempted from tax.

26



7. Income tax expense (contd.)

A reconciliation of income tax expense applicable to net income before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Fund is as follows:

1.1.2013 to 1.1.2012 to

30.6.2013 30.6.2012

RM RM

Net income before tax 11,161,755 2,528,256

Tax at Malaysian statutory rate of 25% (30.6.2012: 25%) 2,790,439 632,064

Effect of unrealised loss not allowable for tax (unrealised gain not subject to tax) (978,565) 1,449,735

Effect of income not subject to tax (1,986,418) (2,233,824)

Effect of expenses not deductible for tax purposes 203,141 212,375

Underprovision in prior year 4,060 -

Tax expense for the period 32,657 60,350

8. Investments

Financial assets at FVTPL

As at As at

30.6.2013 30.6.2012

RM RM

Financial assets held for trading:

Quoted equities 96,549,139 95,857,750

Net gain on financial assets at FVTPL comprised:

Realised gain on disposals 6,096,047 7,662,145

Unrealised changes in fair values 3,914,259 (5,798,939)

10,010,306 1,863,206

27



8. Investments (contd.)

Financial assets held for trading as at 30 June 2013 are as detailed below:

Name of counter Quantity Cost Fair value As a% of NAV

RM RM %

QUOTED EQUITIES

Main Market

Construction

Hock Seng Lee Berhad 1,011,000 2,114,207 2,011,890 1.90

IJM Corporation Berhad 400,000 2,334,401 2,244,000 2.12

4,448,608 4,255,890 4.02

Consumer Products

Dutch Lady Milk Industries Berhad 54,000 2,478,745 2,539,080 2.40

Guinness Anchor Berhad 130,000 1,977,838 2,470,000 2.33

Nestle (M) Berhad 42,000 2,585,328 2,809,800 2.66

UMW Holdings Berhad 100,000 1,280,505 1,452,000 1.37

8,322,416 9,270,880 8.76

Finance

Syarikat Takaful Malaysia Berhad 283,600 2,025,777 2,141,180 2.02

LPI Capital Berhad 145,100 1,989,346 2,193,912 2.07

CIMB Group Holdings Berhad 250,000 2,117,143 2,067,500 1.95

Hong Leong Bank Berhad 249,200 3,196,212 3,588,480 3.39

Malayan Banking Berhad 341,114 2,908,664 2,744,280 3.34

Public Bank Berhad 162,000 2,327,951 2,744,280 2.59

RHB Capital Berhad 100,000 868,622 860,000 0.81

15,433,715 17,129,293 16.17

Industrial Products

Petronas Gas Berhad 126,000 2,418,486 2,618,280 2.48

Infrastructure

Digi.com Berhad 655,000 3,094,898 3,085,050 2.92

28




Financial assets held for trading as at 30 June 2013 are as detailed below: (contd.)


RM RM %

QUOTED EQUITIES

Main Market

Plantation

Batu Kawan Berhad 127,000 2,397,279 2,374,900 2.24

Genting Plantation Berhad 242,300 2,277,108 2,252,446 2.14

IOI Corporation Berhad 418,000 2,168,089 2,265,560 2.14

Sarawak Oil Palms Berhad 235,400 1,604,532 1,311,178 1.24

TSH Resources Berhad 653,000 1,709,859 1,560,670 1.48

United Plantations Berhad 41,400 1,085,350 1,163,340 1.11

11,242,217 10,928,094 10.35

Properties

KLCC Real Estate Investment Trust 300,000 1,995,678 2,025,000 1.91

MPHB Capital Berhad 459,000 449,606 628,830 0.59

Sunway Berhad 441,200 1,195,236 1,553,024 1.47

3,640,520 4,206,854 3.97

Trading/Services

Amway (M) Holdings Berhad 278,400 3,057,727 3,368,640 3.18

Dayang Enterprise Holdings Berhad 420,000 1,411,174 2,053,800 1.95

Axiata Group Berhad 315,000 1,641,040 2,085,300 1.97

MBM Resources Berhad 818,200 3,112,311 3,109,160 2.94

Media Prima Berhad 1,016,000 2,977,022 2,804,160 2.65

Dialog Group Berhad 700,000 1,423,854 1,974,000 1.87

Multi Purpose Holdings Berhad 918,000 3,382,605 3,313,980 3.13

Perdana Petroleum Berhad 1,244,000 1,723,125 2,351,160 2.22

Petronas Dagangan Berhad 127,200 2,846,256 3,197,808 3.03

Sapura Kencana Petroleum Berhad 510,000 806,560 2,065,500 1.95

Tenaga National Berhad 334,000 2,320,311 2,752,160 2.61

Telekom Malaysia Berhad 200,000 860,448 1,078,000 1.02

25,562,433 30,153,668 28.52

29




Financial assets held for trading as at 30 June 2013 are as detailed below: (contd.)


RM RM %

QUOTED EQUITIES

Main Market

Real Estate Investment Trust

Axis Real Estate Investment Trust 739,280 2,210,583 2,698,372 2.55

Al Hadharah Boustead REIT 1,082,000 2,164,095 1,969,240 1.86

Capitamalls Malaysia Trust 1,041,000 1,823,259 1,821,750 1.72

IGB Real Estate Investment Trust 1,540,000 2,059,481 2,032,800 1.92

Pavilion Real Estate Investment Trust 2,608,400 3,829,468 3,938,684 3.72

Sunway Real Estate Investment Trust 1,584,600 2,434,266 2,440,284 2.31

14,521,152 14,901,130 14.08

Total financial assets at FVTPL 88,684,445 96,549,139 91.27

Excess of fair value over cost 7,864,694

9. Deposits with licensed financial institutions

As at As at

30.6.2013 30.6.2012

RM RM

These are short-term placements with:

Investment banks 4,360,000 5,146,000

Commercial banks 2,260,000 8,711,963

6,620,000 13,857,963

The weighted average interest rate of the Fund during the period is 2.97% (30.6.2012: 3.00%) per annum and the maturity of deposits range from 0 to 6 days (30.6.2012: 1 to 30 days).

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10. Amount due to Manager

As at As at 30.6.2013 30.6.2012

RM RM

Payable in relation to units cancelled - 92,746 Management fee 122,232 135,728 122,232 228,474

Amount payable for units cancelled is payable within 10 days from the transaction date.

11. Amount due from stockbrokers

The amount due from stockbrokers arose from the ordinary course of sale of quoted investments but not yet settled.

12. Total equity

As at As atNote 30.6.2013 30.6.2012

RM RM

Unitholders’ capital 13 54,842,685 67,424,423Retained earnings- Realised 43,080,653 35,879,337- Unrealised 7,864,694 6,626,081

105,788,032 109,929,841

13. Unitholders’ capital and units in circulation

2013 2012No. of units RM No. of units RM

At 1 January 246,925,115 56,790,963 281,120,334 71,013,439 Creation of units 14,311,842 5,490,949 15,151,400 5,916,320

261,236,957 62,281,912 296,271,734 76,929,759 Cancellation of units (18,801,034) (6,222,258) (23,569,200) (8,170,687) Distribution equalisation - (1,216,969) - (1,334,649) At 30 June 242,435,923 54,842,685 272,702,534 67,424,423

The approved size of the Fund is 1,000,000,000 units. As at 30 June 2013, the number of units yet to be issued was 757,564,077 (30.6.2012: 727,297,466).

31



14. Net Asset Value (“NAV”) per unit

The NAV per unit has been calculated based on the Fund’s NAV of RM105,788,032 (30.6.2012: RM109,929,841) and on the number of units in circulation of 242,435,923 (30.6.2012: 272,702,534) at the date of the Statement of Financial Position.

Net asset value attributable to unitholders is classified as equity in the statements of financial position.

In line with the requirement of MFRS, quoted financial assets have been valued at the bid price at the close of business. In accordance with the Deed, the calculation of net asset value attributable to unitholders per unit for the issuance and cancellation of units is computed based on quoted financial assets valued at the last done market price.

A reconciliation of net asset attributable to unitholders for issuing/redeeming of units and the net asset value attributable to unitholders per the financial statements is as follows:

RM RM/Unit

Net asset value attributable to unitholders for issuing/redeeming of units 106,203,957 0.4381

Effect from adopting bid prices as fair value (415,925) (0.0017)

Net asset value attributable to unitholders per statement of financial position 105,788,032 0.4364

15. Transactions with top 10 stockbrokers and financial institutions

Value ofTrade

As a% ofTotal

TradeBrokerage

Fees

As a% of TotalBrokerage

Fees

RM % RM %

Affin Bank Berhad 175,456,000 35.38 - -

Kenanga Investment Bank Berhad* 142,922,160 28.82 37,117 19.53

Hong Leong Bank Berhad 101,944,000 20.55 - -

Maybank Investment Bank Berhad 8,031,651 1.62 16,101 8.46

Citigroup Global Markets Sdn. Bhd. 7,627,514 1.54 19,095 10.05

Affin Investment Bank Berhad 7,285,114 1.47 14,574 7.67

Credit Suisse Securities (M) Sdn. Bhd. 6,199,196 1.25 12,389 6.52

Hong Leong Investment Bank Berhad 6,166,420 1.24 11,245 5.92

MIDF Amanah Investment Bank Berhad 5,991,531 1.21 11,987 6.30

Hwang-DBS Investment Bank Berhad 4,849,847 0.98 9,693 5.10

466,473,433 94.05 132,201 69.55

* Kenanga Investment Bank Berhad is the holding company of Kenanga Investors Berhad.

32



15. Transactions with top 10 stockbrokers and financial institutions (contd.)

The directors of the Manager are of the opinion that the transactions with the related parties have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties. The Manager is of the opinion that the above dealings have been transacted on an arm’s length basis.

16. Units held by related parties

There were no units held by related parties as at 30 June 2013 (30 June 2012: Nil).

17. Management expense ratio (“MER”)

The MER of the Fund is the ratio of the sum of fees and expenses incurred by the Fund to the average NAV of the Fund calculated on a daily basis. The fees and expenses include Manager’s fee, Trustee’s fee, auditors’ remuneration, tax agent’s fee and administrative expenses. For the financial period ended 30 June 2013, the MER of the Fund stood at 0.86% (30.6.2012: 0.81%) calculated as follows:

RM

A = Manager’s fee 750,712

B = Trustee’s fee 35,033

C = Auditors’ remuneration 9,807

D = Tax agent’s fee 1,472

E = Administrative expenses 13,542

G = Brokerage and other transaction costs 60,028

H = Average NAV of the Fund 100,918,225

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

G

= 870,594 x 100

100,918,225

= 0.86%

The average NAV of the Fund for the financial period ended 30 June 2013 was RM 100,918,225 (30.6.2012: RM114,107,143).

33



18. Portfolio turnover ratio (“PTR”)

The PTR of the Fund is the ratio of the average of the acquisitions and disposals of the Fund for the financial period to the average NAV of the Fund calculated on a daily basis. For the financial period ended 30 June 2013, the PTR of the Fund stood at 0.47 times (30.6.2012: 0.51 times).

The PTR of the Fund is calculated as follows:

RM

Total acquisitions of the Fund 43,003,870

Total disposals of the Fund 51,189,095

Average NAV of the Fund 100,918,225

PTR = (Total acquisitions + Total disposals) / 2

Average NAV of the Fund

= RM47,096,483

RM 100,918,225

= 0.47 times

The average NAV of the Fund for the financial period ended 30 June 2013 was RM 100,918,225 (30.6.2012: RM114,107,143).

19. Segment information

The Manager and Investment Committee of the Fund are responsible for allocating resources available to the Fund in accordance with the overall investment strategies as set out in the Investment Guidelines of the Fund.

For management purposes, the Fund is organised into one main operating segment which invests in equity securities. The financial results from this segment are equivalent to the financial statements of the Fund as a whole.

34



20. Financial instruments

(a) Classification of financial instruments

The following table analyses the financial assets and liabilities of the Fund in the statement of financial position as at 30 June 2013 and 2012 by the class of financial instrument to which they are assigned, and therefore by the measurement basis.

As at 30 June 2013

Financialassets at

FVTPL

Loansand

receivables

Financialliabilities at

amortisedcost

Total

RM RM RM RM

Assets

Amount due from stockbrokers - 1,875,475 - 1,875,475

Quoted investments 96,549,139 - - 96,549,139

Deposits with licensed financial institutions - 6,620,000 - 6,620,000

Interest receivable - 723 - 723

Dividend receivable - 189,328 - 189,328

Cash at bank - 281,062 - 281,062

Total financial assets 96,549,139 8,966,588 - 105,515,727

Total non-financial assets 440,348

105,956,075

Liabilities

Other payables and accruals - - 45,811 45,811

Amount due to Manager - - 122,232 122,232

Total financial liabilities - - 168,043 168,043

Income, expense, gains and losses

Net gain 10,010,306 - -

Interest income - 173,461 -

35



20. Financial instruments (contd.)

(a) Classification of financial instruments (contd.)

As at 30 June 2012

Financialassets at

FVTPL

Loansand

receivables

Financialliabilities at

amortisedcost

Total

RM RM RM RM

Assets

Quoted investments 95,857,750 - - 95,857,750

Deposits with licensed financial institutions - 13,857,963 - 13,857,963

Interest receivable - 4,470 - 4,470

Dividend receivable - 57,440 - 57,440

Cash at bank - 28,561 - 28,561

Total financial assets 95,857,750 13,948,434 - 109,806,184

Total non-financial assets 389,657

110,195,841

Liabilities

Other payables and accruals - - 37,526 37,526

Amount due to Manager - - 228,474 228,474

Total financial liabilities - - 266,000 266,000

Income, expense, gains and losses

Net gain 1,863,206 - -

Interest income - 167,188 -

(b) Financial instruments that are carried at fair value

The Fund’s financial assets at FVTPL are carried at fair value. The fair values of these financial assets were determined using quoted prices in active markets for identical assets.

36




(b) Financial instruments that are carried at fair value (contd.)

Quoted equity instruments

Fair value is determined directly by reference to their published market bid price at the reporting date.

For equity instruments quoted on Bursa Malaysia, the market bid prices are determined by reference to the theoretical closing market price as published by Bursa Malaysia. The market bid prices of equity instruments quoted on other stock exchanges are determined by reference to information made publicly available by these respective stock exchanges.

The following table shows financial instruments recognised at fair value, analysed between those whose fair value is based on:

• Quoted prices in active markets for identical assets or liabilities (Level 1)• Those involving inputs other than quoted prices included in Level 1 that are observable for the

asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2)• Those with inputs for the asset or liability that are not based on observable market data

(unobservable inputs) (Level 3)

Level 1 Level 2 Level 3 Total

RM RM RM RM

30 June 2013


Quoted equities 96,549,139 - - 96,549,139

30 June 2012


Quoted equities 95,857,750 - - 95,857,750

No transfers between any levels of the fair value hierarchy took place during the current period and the comparative period. There were also no changes in the purpose of any financial asset that subsequently resulted in a different classification of that asset.

The determination of NAV based on last done prices of the fund differs from the determination of NAV in accordance with the requirement of MFRSs. A common difference is the measurement of NAV using last done prices as opposed to the FRS measurement basis (of using bid prices of investments).

37




(b) Financial instruments that are carried at fair value (contd.)

The following table shows a reconciliation between NAV based on last prices and bid prices:

NAV calculated in

accordance withlast done prices

Adjustmentarising from

last-done pricesto bid prices

NAVcalculated in

accordancewith MFRS

RM RM RM

Investments 96,965,064 (415,925) 96,549,139

(c) Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

• Deposits with licensed financial institutions• Dividend receivable• Interest receivable• Other payables and accruals • Amounts due from/to Manager• Amounts due from/to stockbrokers• Distribution payable

There were no financial instruments which are not carried at fair values and whose carrying amounts are not reasonable approximation of their respective fair values.

The methods and basis for the determination of fair value of the Fund’s financial instruments in the current financial period were consistent with that of the previous financial period.

21. Financial risk and management objectives and policies

(a) Introduction

The Fund maintains investment portfolios in a variety of listed financial instruments as dictated by its Trust Deed and investment management strategy.

The Fund is exposed to a variety of risks including market risk (which includes interest rate risk and price risk), credit risk and liquidity risk. Whilst these are the most important types of financial risks inherent in each type of financial instruments, the Manager would like to highlight that this list does not purport to constitute an exhaustive list of all the risks inherent in an investment in the Fund.

38



21. Financial risk and management objectives and policies (contd.)

(a) Introduction (contd.)

The Fund’s objective in managing risk is the creation and protection of Unitholders’ value. Risk is inherent in the Fund’s activities, but it is managed through a process of ongoing identification, measurement and monitoring of risks. Financial risk management is also carried out through sound internal control systems and adherence to the investment restrictions as stipulated in the Trust Deed, the Securities Commission’s Guidelines on Unit Trust Funds and the Capital Markets and Services Act, 2007.

(b) Risk management structure

The Fund’s Manager is responsible for identifying and controlling risks. The Board of Directors of the Manager is ultimately responsible for the overall risk management approach within the Fund.

(c) Risk measurement and reporting system

Monitoring and controlling risks is primarily set up to be performed based on limits established by the Manager. These limits reflect the investment strategy and market environment of the Fund as well as the level of the risk that Fund is willing to accept. In addition, the Fund monitors and measures the overall risk bearing capacity in relation to the aggregate risk exposure across all risks type and activities.

(d) Risk mitigation

The Fund has investment guidelines that set out its overall business strategies, its tolerance for risk and its general risk management philosophy. The Manager also has a Compliance Department to ensure that the Fund complies with the various regulations and guidelines as stipulated in its Trust Deed, the Securities Commission’s Guidelines on Unit Trust Funds and the Capital Markets and Services Act, 2007.

It is, and has been throughout the current and previous financial period, the Fund’s policy that no derivatives shall be undertaken for either investment risk management purposes.

(e) Excessive risk concentration

Concentration indicates the relative sensitivity of the Fund’s performance to developments affecting a particular industry or geographical location. Concentrations of risk arise when a number of financial instruments or contracts are entered into with the same counterparty, or where a number of counterparties are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations of foreign exchange risk may arise if the Fund has a significant net position in a single foreign currency, or aggregate net positions in several currencies that tend to move together.

39




(e) Excessive risk concentration (contd.)

In order to avoid excessive concentration of risk, the Fund’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio in accordance with the Fund’s Trust Deed, Investment Manager’s guidelines and the Securities Commission’s Guidelines on Unit Trust Funds. Portfolio diversification across a number of sectors and industries minimises the risk not only of any single company’s securities becoming worthless but also of all holdings suffering uniformly adverse business conditions. Specifically, the Fund’s Trust Deed and Securities Commission’s Guidelines on Unit Trust Funds limits the Fund’s exposure to a single entity/industry sector to a certain percentage of its NAV.

(f) Market risk

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates and equity prices. The maximum risk resulting from financial instruments equals their fair value.

(i) Interest rate risk

Interest rate risk will affect the value of the Fund’s investments, given interest rate movements, which are influenced by regional and local economic developments as well as political developments.

Domestic interest rates on deposits and placements with licensed financial institutions are determined based on prevailing market rates.

Interest rate risk sensitivity

The following table demonstrates the sensitivity of the Fund’s profit/(loss) for the period and other comprehensive income to a reasonably possible change in interest rates, with all other variables held constant.

The sensitivity is the effect of the assumed changes in interest rates on:

• The net profit income for the period, based on the floating rate financial assets held at the end of the reporting period; and

• Changes in fair value of investments for the period, based on revaluing fixed rate financial assets at the end of the reporting period.

40




(f) Market risk (contd.)

(i) Interest rate risk (contd.)

Interest rate risk sensitivity (contd.)

Changesin basispoints*

Sensitivityof interest

incomeIncrease/

(decrease)

Sensitivity of other

comprehensiveincome

Increase/(decrease)

Sensitivity of changes

in fair value investments

Increase/(decrease)

RM RM RM

As at 30 June 2013 +25/-25 16,550/ (16,550) - 16,550/ (16,550)

As at 30 June 2012 +25/-25 34,653/ (34,653) - 34,653/ (34,653)

* The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

Interest rate risk exposure

The following table analyses the Fund’s interest rate risk exposure. The Fund’s assets and liabilities are included at fair value and categorised by the earlier of contractual re-pricing or maturity dates.

0-3months

3 months-5 years

5-10 years

Non-exposure tointerest rate

movement Total

Effectiveinterest

rate*

RM RM RM RM %

As at 30 June 2013

Assets:

Financial assets held at FVTPL - - - 96,549,139 96,549,139

Deposits with licensed financial institutions 6,620,000 - - - 6,620,000

Other assets - - - 2,786,936 2,786,936

Total assets 6,620,000 - - 99,336,075 105,956,075

Liabilities:

Other liabilities - - - 168,043 168,043

Total liabilities - - - 168,043 168,043

Total interest sensitivity gap 6,620,000 - - 99,168,032 105,788,032

41





(i) Interest rate risk (contd.)

Interest rate risk exposure (contd.)

0-3months

3 months-5 years

5-10 years

Non-exposure tointerest rate

movement Total

Effectiveinterest

rate*

RM RM RM RM %

As at 30 June 2012

Assets:

Financial assets held at FVTPL - - - 95,857,750 95,857,750

Deposits with licensed financial institutions 13,857,963 - - - 13,857,963 2.98

Other assets - - - 480,128 480,128

Total assets 13,857,963 - - 96,337,878 110,195,841

Liabilities:

Other liabilities - - - 266,000 266,000

Total liabilities - - - 266,000 266,000

Total interest sensitivity gap 13,857,963 - - 96,071,878 109,929,841

* Computed based on interest-bearing assets only

(ii) Equity price risk

Equity price risk is the risk of unfavourable changes in the fair values of equities as the result of changes in the levels of equity indices and the value of individual shares. The equity price risk exposure arises from the Fund’s investments in quoted equity securities.

Equity price risk sensitivity

Management’s best estimate of the effect on the profit/(loss) for the period and other comprehensive income due to a reasonably possible change in equity indices, with all other variables held constant is indicated in the table below:

42





(ii) Equity price risk (contd.)

Equity price risk sensitivity (contd.)

Market indexChanges in

equity price

Effects on profitfor the period

increase/(decrease)

Effects on othercomprehensive

incomeincrease/

(decrease)

Effects on equityinvestments

increase/(decrease)

% RM RM RM

As at 30 June 2013

FTSE Bursa Malaysia 100 Index +5 / -5 482,746/(482,746) - 482,746/(482,746)

As at 30 June 2012

FTSE Bursa Malaysia 100 Index +5 / -5

5,632,750/(6,096,764) -

5,632,750/(6,096,764)

In practice, the actual trading results may differ from the sensitivity analysis below and the difference could be material.

Equity price risk concentration

The following table sets out the Fund’s exposure to equity risk based on its portfolio of equity instruments as at the reporting date.

As at 30 June 2013 As at 30 June 2012

As a % of As a % of

RM of NAV RM of NAV

Malaysia 96,549,139 91.27 95,857,750 87.19

43





(ii) Equity price risk (contd.)

Equity price risk concentration (contd.)

The Fund’s concentration of equity price risk analysed by the Fund’s equity instruments by sector is as follows:

As at 30 June 2013 As at 30 June 2012As a % of As a % of

RM of NAV RM of NAV

REITS 14,901,130 14.08 - -Construction 4,255,890 4.02 8,545,220 7.76Consumer products 9,270,880 8.76 6,068,836 5.52Finance 17,129,293 16.17 17,579,050 15.99Industrial products 2,618,280 2.48 2,034,900 1.85Infrastructure 3,085,050 2.92 1,700,000 1.55Plantation 10,928,094 10.35 9,686,310 8.81Properties 4,206,854 3.97 4,321,700 3.93Trading/Services 30,153,668 28.52 45,921,734 41.78

96,549,139 91.27 95,857,750 87.19

(g) Credit risk

Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Fund by failing to discharge an obligation. The Fund is exposed to the risk of credit-related losses that can occur as a result of a counterparty or issuer being unable or unwilling to honour its contractual obligations to make timely repayments of interest, principal and proceeds from realisation of investments. These credit exposures exist within financing relationships, derivatives and other transactions.

The Manager manages the Fund’s credit risk by undertaking credit evaluation and close monitoring of any changes to the issuer/counterparty’s credit profile to minimise such risk. It is the Fund’s policy to enter into financial instruments with reputable counterparties. The Manager also closely monitors the creditworthiness of the Fund’s counterparties (e.g., brokers, custodian, banks, etc.) by reviewing their credit ratings and credit profile on a regular basis.

Credit risk exposure

At the reporting date, the Fund’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position.

None of the Fund’s financial assets were past due nor impaired as at 30 June 2013 and 30 June 2012.

44




(h) Liquidity risk

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Exposure to liquidity risk arises because of the possibility that the Fund could be required to pay its liabilities or redeem its units earlier than expected. The Fund is exposed to cash redemptions of its units on a regular basis. Units sold to Unitholders by the Manager are redeemable at the Unitholder’s option based on the Fund’s NAV per unit at the time of redemption calculated in accordance with the Fund’s Trust Deed.

The Manager’s policy is to always maintain a prudent and sufficient level of liquid assets so as to meet normal operating requirements and expected redemption requests by Unitholders. Liquid assets comprise cash, deposits with licensed financial institutions and other instruments which are capable of being converted into cash within 7 days.

The following table summarises the maturity profile of the Fund’s units in issue (classified as equity instruments) and financial liabilities. Balances due within six months equal their carrying amounts, as the impact of discounting is insignificant. The table also analyses the maturity profile of the Fund’s financial assets (undiscounted where appropriate) and equity in order to provide a complete view of the Fund’s contractual commitments and liquidity.

Less than 1 month- 3 months- 1year- 5-10

1 month 3 months 1 year 5 years years Total

RM RM RM RM RM RM

As at 30 June 2013

Financial assets:

Financial assets held at FVTPL 96,549,139 - - - - 96,549,139

Deposits with licensed financial institutions 6,620,000 - - - - 6,620,000

Other assets 2,786,936 - - - - 2,786,936

Total undiscounted financial assets 105,956,075 - - - - 105,956,075

Financial liabilities:

Other liabilities 168,043 - - - - 168,043

Total undiscounted financial liabilities 168,043 - - - - 168,043

Total equity 105,788,032 - - - - 105,788,032

Liquidity gap - - - - - -

45




(h) Liquidity risk (contd.)

Less than 1 month- 3 months- 1year- 5-10

1 month 3 months 1 year 5 years years Total

RM RM RM RM RM RM

As at 30 June 2012

Financial assets:

Financial assets held at FVTPL 95,857,750 - - - - 95,857,750

Deposits with licensed financial institutions 13,857,963 - - - - 13,857,963

Other assets 480,128 - - - - 480,128

Total undiscounted financial assets 110,195,841 - - - - 110,195,841

Financial liabilities:

Other liabilities 266,000 - - - - 266,000

Total undiscounted financial liabilities 266,000 - - - - 266,000

Total equity 109,929,841 - - - - 109,929,841

Liquidity gap - - - - - -

Notes:

(i) Financial assets

Analysis of financial assets at fair value through profit or loss into maturity groupings is based on the expected date on which these assets will be realised. Quoted equity instruments have been included in the “Less than 1 month category” on the assumption that these are highly liquid investments which can be realised should all of the Fund’s unitholders’ capital are required to be redeemed. For other assets, the analysis into maturity groupings is based on the remaining period from the end of the reporting period to the contractual maturity date or if earlier, the expected date on which the assets will be realised/maturity dates of debt securities.

(ii) Financial liabilities

The maturity grouping is based on the remaining period from the end of the reporting period to the contractual maturity date. When a counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which the Fund can be required to pay.

46




(h) Liquidity risk (contd.)

Notes: (contd.)

(iii) Equity

As Unitholders can request for redemption on their units without giving the Manager any notice period and the redemptions are repayable within 10 days, they have been categorised as having a maturity of “Less than 1 month”.

(i) Specific risk

The Fund is exposed to the individual risk of the respective companies issuing Shariah-compliant securities and sukuk which includes changes to the business performance of the company, consumer tastes and demand, lawsuits and management practices. This risk is minimised through the well diversified nature of the Fund.

(j) Inflation risk

The Fund is subject to the risk of Unitholders’ investment not growing proportionately to the inflation rate thereby decreasing the Unitholders’ purchasing power even though the investment in monetary terms may have increased.

(k) Compliance risk

Non-compliance of regulations imposed by the Securities Commission Act 1993 and the Securities Commission’s Guidelines on Unit Trust Funds may affect the Unitholders’ investment.

(l) Single issuer risk

Internal policy restricts the Fund from investing in securities issued by any issuer of not more than a certain percentage of its NAV. Under such restriction, the risk exposure to the securities of any issuer is managed based on internal/external ratings.

(m) Regulatory risk

Any changes in national policies and regulations may have an effect on the capital market.

(n) Management risk

Poor management of a fund may cause considerable losses to the Fund that in turn will affect the capital invested by Unitholders.

47



22. Capital management

The capital of the Fund can vary depending on the demand for redemptions and subscriptions to the Fund. The Fund’s approved fund size and units in issue at the end of the period is disclosed in Note 13.

The Funds’ objectives for managing capital are:

(a) To invest in investments meeting the description, risk exposure and expected return indicated in its prospectus;

(b) To achieve consistent returns while safeguarding capital by using various investment strategies;

(c) To maintain sufficient liquidity to meet the expenses of the Fund, and to meet redemption requests as they arise; and

(d) To maintain sufficient fund size to make the operation of the Fund cost-efficient.

No changes were made to the capital management objectives, policies or processes during the current financial period.

23. Events after the reporting period

There were no events occurring since the last reporting date and before the completion of these financial statements.

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KENANGA MONEY MARKET FUND

INTERIM REPORT

For the Financial Period Ended 30 June 2013

kenanga premier fund · kenanga premier fund (kpf) report to unit holders for the 6-month financial...

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