Annual Report for
31 October 2017
Namaa’ Asia-Pacific EquityGrowth
Namaa’ Asia-Pacific Equity Growth
TRUST DIRECTORY
Manager
AmFunds Management Berhad
9th
& 10th
Floor, Bangunan AmBank Group
55 Jalan Raja Chulan
50200 Kuala Lumpur
Board of Directors
Raja Maimunah Raja Abdul Aziz
Dato’ Mustafa Mohd Nor
Tai Terk Lin
Goh Wee Peng
Sum Leng Kuang
Investment Committee
Sum Leng Kuang
Tai Terk Lin
Dato’ Mustafa Mohd Nor
Zainal Abidin Mohd Kassim
Goh Wee Peng
Investment Manager
AmIslamic Funds Management Sdn Bhd
Shariah Adviser
Al Rajhi Banking & Investment Corporation (Malaysia) Berhad
Trustee
Deutsche Trustees Malaysia Berhad
Auditors and Reporting Accountants
Ernst & Young
Taxation Adviser
Deloitte Tax Services Sdn Bhd
Namaa’ Asia-Pacific Equity Growth
CONTENTS
1 Manager’s Report
10 Independent Auditor’s Report to the Unitholders
13 Statement of Financial Position
14 Statement of Comprehensive Income
15 Statement of Changes in Equity
16 Statement of Cash Flows
17 Notes to the Financial Statements
34 Statement by the Manager
35 Trustee’s Report
36 Report of the Shariah Adviser to the Unitholders
37 Directory
1
MANAGER’S REPORT
Dear Unitholders,
We are pleased to present you the Manager’s Report and the audited accounts of Namaa’ Asia-Pacific
Equity Growth (“Fund”) for the financial year ended 31 October 2017.
Salient Information of the Fund
Name Namaa’ Asia-Pacific Equity Growth (“Fund”)
Category/Type
Feeder Fund (Shariah-compliant Equity) / Growth
Name of
Target Fund
Am-Namaa’ Asia-Pacific Equity Growth
Objective The Fund seeks to grow the value of investment in the Longer term by investing in
Shariah-compliant listed equities and equities related investments and other
Islamic instruments that conforms to the Shariah Investment Guidelines across
Asia Pacific (ex-Japan) region.
Duration The Fund was established on 5 June 2008 and shall exist for as long as it appears
to the Manager and the Trustee that it is in the interest of the unitholders for it to
continue. In some circumstances, the unitholders can resolve at a meeting to
terminate the Fund.
Performance
Benchmark
Dow Jones Islamic Market Index Asia-Pacific (ex-Japan).
(obtainable from www.aminvest.com)
Note: The risk profile of the Fund is not the same as the risk profile of the
performance benchmark.
Income
Distribution
Policy
Income distribution (if any) is incidental and will be automatically be reinvested.
Note: Income distributed will be automatically reinvested at no cost, based on the
NAV per unit at the end of the Business Day of the income distribution date.
Breakdown of
Unit Holdings
by Size
For the financial year under review, the size of the Fund stood at 9,182,417 units.
Size of holding As at 31 October 2017 As at 31 October 2016
No of units
held
Number of
unitholders
No of units
held
Number of
unitholders
5,000 and below 109,736 49 112,180 54
5,001-10,000 304,736 43 327,186 43
10,001-50,000 1,784,697 79 2,605,329 104
50,001-500,000 5,422,270 47 13,831,903 92
500,001 and above 1,560,978 2 1,760,861 3
2
Fund Performance Data
Portfolio
Composition
Details of portfolio composition of the Fund for the financial years as at 31
October are as follows:
FY
2017
%
FY
2016
%
FY
2015
%
Foreign collective investment scheme 96.94 96.68 97.29
Cash and others 3.06 3.32 2.71
Total 100.00 100.00 100.00
Note: The abovementioned percentages are calculated based on total net asset
value.
Performance
Details
Performance details of the Fund for the financial years ended 31 October are as
follows:
FY
2017
FY
2016
FY
2015
Net asset value (RM)* 7,085,943 12,370,880 1,088,335
Units in circulation* 9,182,417 18,637,459 1,533,142
Net asset value per unit (RM)* 0.7717 0.6638 0.7099
Highest net asset value per unit (RM)* 0.7759 0.7231 0.7342
Lowest net asset value per unit (RM)* 0.6564 0.6048 0.6196
Benchmark performance (%) 27.60 3.60 18.15
Total return (%)(1)
16.25 -6.49 14.04
- Capital growth (%) 16.25 -6.49 14.04
- Income distribution (%) - - -
Gross distribution (sen per unit) - - -
Net distribution (sen per unit) - - -
Management expense ratio (%)(2)
0.26 0.41 1.25
Portfolio turnover ratio (times)(3)
0.96 1.24 0.32
* Above prices and net asset value per unit are not shown as ex-distribution.
Note:
(1) Total return is the actual return of the Fund for the respective financial years
computed based on the net asset value per unit and net of all fees.
(2) Management expense ratio (“MER”) is calculated based on the total fees and
expenses incurred by the Fund divided by the average fund size calculated on a
daily basis. The MER decreased by 0.15% as compared to 0.41% per annum
for the financial year ended 31 October 2016 mainly due to increase in average
fund size.
(3) Portfolio turnover ratio (“PTR”) is calculated 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. The PTR decreased by 0.28
times (22.6%) as compared to 1.24 times for the financial year ended 31
October 2016 mainly due to increase in average fund size.
3
Average Total Return (as at 31 October 2017)
Namaa’
Asia-Pacific
Equity Growth(a)
%
DJIM AP
(ex-Japan)(b)
%
One year 16.25 27.60
Three years 7.42 16.01
Five years 4.29 13.26
Since launch (15 August 2008) 4.82 7.08
Annual Total Return
Financial Years Ended
(31 October)
Namaa’
Asia-Pacific
Equity Growth(a)
%
DJIM AP
(ex-Japan)(b)
%
2017 16.25 27.60
2016 -6.49 3.60
2015 14.04 18.15
2014 -1.98 7.91
2013 1.55 10.60
(a) Source: Novagni Analytics and Advisory Sdn Bhd.
(b) Dow Jones Islamic Market Index (“DJIM”) Asia-Pacific (ex-Japan)
(Obtainable from: www.aminvest.com).
The Fund performance is calculated based on the net asset value per unit of the
Fund. Average total return of the Fund and its benchmark for a period is computed
based on the absolute return for that period annualised over one year.
Note: Past performance is not necessarily indicative of future performance
and that unit prices and investment returns may go down, as well as up.
Fund
Performance
For the financial year under review, the Fund’s net asset value (“NAV”) decreased
by 42.7% to RM7,085,943 as at 31 October 2017 from RM12,370,880 as at 31
October 2016. Units in circulation as at the end of financial year under review
were 9,182,417 units, which was 50.7% lower as compared with 18,637,459 units
as at 31 October 2016. The Fund’s NAV per unit increased from RM0.6638 as at
31 October 2016 to RM0.7717 as at 31 October 2017, a rise of 16.3%.
For the financial year under review, the Fund registered a return of 16.25% which
was entirely capital in nature. Comparatively, for the same financial year, the
benchmark, Dow Jones Islamic Market Index (DJIM) Asia Pacific (ex-Japan)
registered a return of 27.60%. As such the Fund has underperformed the
benchmark by 11.35%.
The line chart below shows comparison between the annual performances of
Namaa’ Asia-Pacific Equity Growth and its benchmark, DJIM AP ex-Japan Index,
for the financial years ended 31 October.
4
Note: Past performance is not necessarily indicative of future performance and
that unit prices and investment returns may go down, as well as up.
Performance
of the Target
Fund
Fund Performance Review of the Target Fund – Am-Namaa’ Asia-Pacific
Equity Growth (“the Target Fund”)
The Target Fund’s net asset value was US$17.516 million as at 31 October 2017,
9.17% higher as compared to US$16.045 million as at 31 October 2016. The Fund
Target Fund’s net asset value (“NAV”) per unit increased by 19.35% to
US$16.4353 as at 31 October 2017 from US$13.7711 as at 31 October 2016.
The Target Fund registered a return of 19.35% for the financial year ended 31
October 2017, which was entirely capital growth in nature. Comparatively, for the
same year, the benchmark, Dow Jones Islamic Market Index Asia Pacific ex-Japan
registered a return of 26.57%. As such the Target Fund underperformed the
benchmark by 7.22%.
Has the Fund
achieved its
objective?
The Fund seeks to grow the value of investment in the Longer term by investing in
Shariah-compliant listed equities and equities related investments and other Islamic
instruments that conform to the Shariah Investment Guidelines across Asia Pacific
(ex-Japan) region. Over the 5 year period, the Fund achieved an average total return
of 4.29%.
Strategies and
Policies
Employed
For the financial year under review, the Fund invested 96.94% of the Fund’s net
asset value in the Target Fund, Am-Namaa’ Asia-Pacific Equity Growth. The
Target Fund is a Malaysian based fund and is denominated in USD.
Portfolio
Structure
This table below is the asset allocation of the Fund for the financial years under
review.
5
As at
31-10-2017
%
As at
31-10-2016
%
Changes
%
Foreign collective investment scheme 96.94 96.68 0.26
Cash and others 3.06 3.32 -0.26
Total 100.00 100.00
For the financial year under review, the exposure of the Fund in the foreign
collective investment scheme was at 96.94% as at 31 October 2017 as compared to
96.68% as at 31 October 2016.
Distribution/
Unit Splits
There was no income distribution and unit split declared for the financial year
under review.
State of
Affairs
There have been neither significant change to the state of affairs of the Fund nor
any circumstances that materially affect any interests of the unitholders during the
financial year under review.
Rebates
and Soft
Commission
It is our policy to pay all rebates to the Fund. Soft commission received from
brokers/dealers are retained by the Manager only if the goods and services provided
are of demonstrable benefit to unitholders of the Fund.
During the financial year under review, the Manager had received on behalf of the
Fund, soft commissions in the form of fundamental database, financial wire
services, technical analysis software and stock quotation system incidental to
investment management of the Fund. These soft commissions received by the
Manager are deem to be beneficial to the unitholders of the Fund.
Market
Review
The surprise victory of Donald trump in the presidential election saw the market
going through a wild ride, with S&P 500 futures being halted trading after dropping
5%, while Nasdaq 100 futures lost 5.1% and Dow futures were off 4.3%.
Nevertheless, sentiment was quick to reverse as investors shift focus on what
Trump administration will seek to achieve. Potential tax cuts and infrastructure
spending which will bring America’s economy stronger again boosted market
performance.
China economic data continue to remain healthy, with no signs of the economy
losing steam. In the latest figures published in November, industrial production
rose 6.1%, retail sales grew 10.1% and fixed-asset investment added 8.3%. Strong
domestic drivers eased concerns over the possible impact of a Trump presidency on
the economy. However, there are still concerns about the sustainability of growth
as regulatory changes continue to drive hot-money flows from sector to sector.
In South Korea, the President, Park Geun-hye, was impeached with an
overwhelming majority of votes in parliament. She was suspended from power
until the constitutional court rules on the lawmakers' decision. It must do so within
six months, which would then start the clock for an election within 60 days.
In December 2016, overall market stabilised and recouped some losses in
November, with the exception of China and Hong Kong market which registered a
big negative return in December.
As expected, the Federal Open Market Committee decided to increase rates by 25
6
basis points on 14 December. Dollar surged 1.1% on the day itself driven mainly
by Federal Reserve’s updated dot-plot which is predicting a faster than previously
expected rate of tightening next year.
Economic numbers in advanced economy especially Europe area showed sign of
improvement in December. PMI numbers in German and France are all in
expansionary mode in the 4th quarter of 2016.
China’s exports gained for November as a cheaper Yuan aided foreign purchasing
as it is partly due to the strength of dollar. However, Trump’s economy policy
towards China also creates uncertainty on China’s currency and export, not to
mention even on political front. At the same time, investors are concern on the
potential of monetary tightening policy in China where as a step to control overly
robust property market in 2016 and currency direction. There was a surprise jump
in shadow-banking activity in November.
Taiwan’s exports for November grew at their strongest pace in nearly four years, as
global retailers stocked up on the island’s hi-tech gadgets for the year-end shopping
season. Exports grew 12.1 percent from a year earlier, the fastest on-year pace since
January 2013. South Korea exports for December also rose for a second straight
month on semi-con, machinery amid nascent recovery.
Going into 2017, US economy finds a strong footing where jump in wages in
December pointed to sustained labour market momentum. In January, additional
227,000 of new jobs were added. Meanwhile, ISM Non-Manufacturing PMI
remained in the expansionary mode for the 85th consecutive month, rising by 56.5
in January.
As for Euro area, inflation accelerated 1.1 percent in December, the fastest pace
since 2013. While the increase was driven almost entirely by recovering oil prices,
the return of price growth is also likely to shift the policy debate at the European
Central Bank. The Composite PMI for the currency bloc finished 2016 with its
highest reading in 67 months at 54.4 in December, driven in part by the weaker
euro.
China new data show growth rising to 6.8% in three months in December. Retail
sales were the main driver of the increase, with industrial production coming in
slightly below expectations. In other good news for policy makers, it seems that
capital controls are starting to pay off as yuan outflows plummeted in December.
In February, US continue to report strong economic data. Labour force
participation rate climbed to 62.9%, the highest since September 2016, while the
average wages rose 3 cents to USD26.00 from USD25.97 in December.
As for Euro area, economic activity unexpectedly rose to the highest level in almost
six years, with the composite Purchasing Managers Index for February climbing to
56.0, according to IHS Markit. While politics continues to dominate coverage of
Europe, investors are starting to recommend looking beyond the noise to find
opportunities.
In China, export growth in USD terms jumped to a stronger-than-expected 7.9% y-
o-y in January from -6.2% in December, with improvement was across the board
by product, from higher value-added products (such as high tech products and
7
mechanical & electrical products) to labour-intensive products (such as garments &
clothing accessories, and footwear & parts).
Market took a breather at the beginning of March following US robust February
jobs report, as it further solidified expectations the Fed will raise interest rates in
the mid of March. Non-farm payrolls grew a robust pace during February as the
construction sector posted its largest gain in almost 10 years.
China reported its first trade deficit in three years in February as imports soared
38.1 percent while exports dropped 1.3 percent. The economy producer prices
surged 7.8 percent in February, the fastest pace since 2008 and a jump which lifts
the outlook for global reflation.
President Park Geun-hye of South Korea saw her parliament's impeachment upheld
by the country's highest court, opening the door for her to face jail time amid a
corruption probe. The graft investigation, which has also snared Samsung
Electronics Co. heir-apparent Jay Y. Lee, is the largest scandal in the nation in
decades. Shares on Seoul's KOSPI index, which have rallied since Park's
impeachment in December.
Federal Reserve raised its rate by 25bps as anticipated. More of a balance
comment/less hawkish than market expected has provided a good sentiment for the
market recovery and moved higher after the rate hike announcement.
In April, while the released of economic data from US soften, the data remains at
strong level, indicating the underlying economy remain healthy. On the other hand,
Euro economic data remained strong, with the Purchasing Managers’ Index for
manufacturing and services rose 56.7 in April, the highest in six years. It was led
by France with Composite PMI unexpected surged to 57.4 from 56.8 in March.
First round of voting in France president election held on 23 April saw the centrist
candidate, Emmanuel Macron and far-right nationalist Marine Le Pen making it
through to the second round runoff which is schedule on May 7. Republican
candidate Francois Fillon, who came in third, is said to back Macron for the May
vote. An early poll is suggesting that he would beat Le Pen by more than 20
percentage points. Euro climbed to all time high at $1.0875, highest level against
the US dollar since November 2016.
Similarly, in Asia, 1Q GDP coming out from China and Korea continue to show
improvement. China reported 1Q2017 GDP growth of 6.9% the fastest pace in six
quarter while Finance Minister of Korea said it potentially beat GDP forecast of
2.6% as export continues to improve.
May saw the market continued its upward momentum. In China, President Xi
JinPing has pledged RMB380 billion in loans of infrastructure spending at the Silk
Road summit in promoting “One Belt, One Road’. Moody’s downgrade of Hong
Kong to Aa2 from Aa1 and China to A1/Stable from Aa3/Negative in the later part
of May, however, did not impact overall markets.
In South Korea, figures show exports are growing at the fastest rate in six years,
buoyed by demand for high-tech memory chips. The winning of Moon, Jae-in for
the South Korean presidency also contribute to the strong stocks market gains.
8
In Jakarta, with Anies/Sandiaga winning the Jakarta election convincingly,
sentiment on the JCI improved as it removes uncertainties and normalises business
sentiment. The recently concluded 1Q results show that earnings growth remains
healthy, and Indonesia reported a slight improvement in its 1Q 2017 GDP numbers
at 5.0 percent yoy (vs 4.9 percent yoy in 4Q 2016), led by government spending
and stronger exports amid higher global trade activity and commodity prices.
In June, Fed raised its interest rate policy rate by 25bps, bringing the fed fund rate
to a new range of 1.00 percent to 1.25 percent. The Fed also laid out a plan to start
slowly reducing their USD4.5 trillion balance sheet, though they did not say
exactly when the process will commence.
The announcement by index provider, MSCI to include 222 Large Cap China A-
shares in the MSCI Emerging Markets, with inclusion to be implemented using a
two-stage process effective on 1 June 2018 and 3 September 2018 helped in
supporting sentiment.
Equity market continued the positive momentum in July despite the ongoing
political uncertainty. In US, sentiment was supported by positive macroeconomic
data, a robust start to the quarterly reporting season and further weakness in the
dollar. Similarly, the macro story in the Euro was positive. The focus in Europe
was the comments by the European Central Bank (“ECB”) president suggesting
that the European economy was strong enough to start the tapering of quantitative
easing.
China too provided a surprisingly strong numbers with 2Q2017 GDP coming in
above expectation, at 6.9% yoy. Producer price index (“PPI”) for June remains in
positive territory, industrial production and exports continue to expand and PMI
number clocked in at 51.7 for June, beating estimates.
Markets held up well in August despite mounting US-North Korea tensions and
terrorist attacks in Spain. Continued strong economic and earnings outlooks as well
as additional clarity on tax reform supported US equities. In Europe, the economic
momentum improved, with 2Q2017 GDP coming reported at 2.2%. Similarly, the
Chinese economic activity continues to be resilient with Chinese companies
reporting good second quarter earnings.
In September, economic data releases continued to support the recovery in the US
economy. Fed officials boosted their projections with the gross domestic product
for this year expected to rise 2.4%, while unemployment rate is expected to fall to
4.3% this year. The unveiling of the tax reform plans, among others, include the
cutting of corporate tax from 35% to 20% also excites the markets in anticipation
of a faster pace of economic growth going forward. Similarly, the Eurozone
economy continues to improve. In addition, the winning of Angela Merkel in
Germany’s election for the fourth term, albeit with a lower than expected score,
provides comfort to the market.
In China, S&P Global Ratings downgrade China’s rating to A1/Stable on
prolonged period of strong credit growth which has increased China’s economic
and financial risks. Nonetheless Chinese economic activity data in August
continued to suggest economic expansion.
Stocks recorded solid and steady gains in October, on continued confidence about
9
earnings and synchronized recovery of global growth. In US, the optimism on the
implementation of tax reform further support market. Meanwhile, the European
Central bank announced that it will halve its bond-buying program to €30 billion
from €60 billion a month from January through September 2018, or longer, if
necessary, until inflation has improved.
In China, the 19th National Congress of the Communist Party of China (“CPC”)
was held, emphasizing on quality of growth rather than pace of growth. Chinese
stocks delivered positive returns in October, on the back of stronger economic data
coupled with stability in yuan.
Market
Outlook
We continue to be positive on China as the financial and currency markets are
stabilizing amidst an improving economy. In addition, the new economic sectors
such as on-line services, e-commerce, technology-related manufacturing and
service sectors are expected to further support growth. For Korea, the improved
business and consumer confidence is expected to drive the economy. Potential
fiscal expansionary measures could be the next catalyst for the market. Taiwanese
technology sector will be supported by the global growth pick up as well as
semiconductor restocking while staying selective on non-tech.
ASEAN markets continue to look expensive, despite some divergence in
performance: P/E multiples for benchmarks in Vietnam and Thailand are at new
10-year highs, whilst Singapore’s also continues to inch up. The popularity of
Indonesia and Philippines have declined slightly in recent weeks, but their
multiples are still close to 10-year highs. Fundamentally, things are certainly
improving, with GDP growth coming in strong or above expectations across most
ASEAN countries. Much of this has been due to exports; farming income as well as
private consumption and investment remains subdued in most parts (with
Philippines and Vietnam being the notable exceptions), but consumer confidence is
gradually improving across the region. All in all, sentiment and prices for ASEAN
equity assets continue to make it difficult to find real value, despite the improved
outlook for growth.
For Malaysia, we believe that going forward, the local market will be driven by
companies with earnings supported by robust external growth. This would mean
our exporters and technology picks would remain as the preferred sectors because
we believe that the much stronger core earnings would outpace the currency
strength. The recent hawkish statement by BNM would mean an imminent interest
rate hike in the near term. This is beneficial to our local banks, which are already
seeing credit quality improvement in the recent quarterly results, and NIM is
expected to improve too, in a rising interest rate environment. As the election is
drawing nearer, the government would tend to escalate the local “feel good” factors
such as the continuous BR1M handout and rolling out of the planned infrastructure
projects. The consumer and construction sectors are likely to be the direct
beneficiaries.
Kuala Lumpur, Malaysia
AmFunds Management Berhad
7 December 2017
Independent auditors’ report to the unitholders of
Namaa’ Asia-Pacific Equity Growth
Report on the audit of the financial statements
Opinion
Basis for opinion
Independence and other ethical responsibilities
Information other than the financial statements and auditors’ report thereon
We have audited the financial statements of Namaa’ Asia-Pacific Equity Growth (“the Fund”),
which comprise the statement of financial position as at 31 October 2017, and the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies,
as set out on pages 13 to 33.
In our opinion, the accompanying financial statements give a true and fair view of the financial
position of the Fund as at 31 October 2017 and of its financial performance and cash flows for the year
then ended in accordance with Malaysian Financial Reporting Standards and International Financial
Reporting Standards.
We conducted our audit in accordance with approved standards on auditing in Malaysia and
International Standards on Auditing. Our responsibilities under those standards are further described
in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
We are independent of the Fund in accordance with the By-Laws (on Professional Ethics, Conduct and
Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and
we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA
Code.
The Manager is responsible for the other information. The other information comprises information in
the Annual Report, but does not include the financial statements of the Fund and our auditors’ report
thereon.
Our opinion on the financial statements of the Fund does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Fund, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements of the Fund or our knowledge obtained in the audit or otherwise appears
to be materially misstated.
10
Independent auditors’ report to the unitholders of
Namaa’ Asia-Pacific Equity Growth (cont’d.)
Responsibilities of the Manager and the Trustees for the financial statements
Auditor’s responsibilities for the audit of the financial statements
As part of an audit in accordance with the approved standards on auditing in Malaysia and
International Standards on Auditing, we exercise professional judgment and maintain professional
skepticism throughout the planning and performance of the audit. We also:
Identify and assess the risks of material misstatement of the financial statements of the Fund,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund’s internal control.
Our objectives are to obtain reasonable assurance about whether the financial statements of the Fund,
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance approved standards on auditing in Malaysia and
International Standards on Auditing will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
If based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
The Manager is responsible for the preparation of the financial statements of the Fund that give a true
and fair view in accordance with Malaysian Financial Reporting Standards and International Financial
Reporting Standards. The Manager is also responsible for such internal control as the Manager
determines is necessary to enable the preparation of financial statements of the Fund that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements of the Fund, the Manager is responsible for assessing the Fund’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Manager either intends to liquidate the Fund or
to cease operations, or has no realistic alternative to do so.
The Trustee is responsible for ensuring that the Manager maintains proper accounting and other
records as are necessary to enable true and fair presentation of these financial statements.
11
Independent auditors’ report to the unitholders of
Namaa’ Asia-Pacific Equity Growth (cont’d.)
Other matters
Ernst & Young Wan Daneena Liza Bt Wan Abdul Rahman
AF: 0039 No. 2978/03/18(J)
Chartered Accountants Chartered Accountant
Kuala Lumpur, Malaysia
7 December 2017
We communicate with the Manager regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
This report is made solely to the unitholders of the Fund, as a body, and for no other purpose. We do
not assume responsibility to any other person for the content of this report.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Manager.
Conclude on the appropriateness of the Manager’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Fund’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors’ report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditors’ report. However, future events or conditions
may cause the Fund to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements of the Fund,
including the disclosures, and whether the financial statements of the Fund represent the
underlying transactions and events in a manner that achieves fair presentation.
12
Namaa’ Asia-Pacific Equity Growth
STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2017
2017 2016
Note RM RM
ASSETS
Shariah-compliant investment 4 6,869,403 11,960,068
Amount due from Manager 5 - 351,825
Amount due from Target Fund Manager 6 83,455 -
Cash at banks 235,596 77,848
TOTAL ASSETS 7,188,454 12,389,741
LIABILITIES
Amount due to Manager 5 81,846 -
Amount due to Trustee 7 472 605
Sundry payables and accrued expenses 20,193 18,256
TOTAL LIABILITIES 102,511 18,861
EQUITY
Unitholders’ capital 10(a) 3,474,740 10,597,441
Retained earnings 10(b)(c) 3,611,203 1,773,439
TOTAL EQUITY 10 7,085,943 12,370,880
TOTAL EQUITY AND LIABILITIES 7,188,454 12,389,741
UNITS IN CIRCULATION 10(a) 9,182,417 18,637,459
NET ASSET VALUE PER UNIT 77.17 sen 66.38 sen
The accompanying notes form an integral part of the financial statements.
13
Namaa’ Asia-Pacific Equity Growth
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 OCTOBER 2017
2017 2016
Note RM RM
SHARIAH-COMPLIANT INVESTMENT INCOME
Net gain from Shariah-compliant investment:
− Financial assets at fair value through profit or
loss (“FVTPL”) 8 1,868,575 619,175
Gross Income 1,868,575 619,175
EXPENDITURE
Manager’s fee 5 (7,001) (6,007)
Trustee’s fee 7 (7,154) (3,671)
Auditors’ remuneration - current financial year (6,500) (6,000)
Auditors’ remuneration - under provision in prior financial year (500) -
Tax agent’s fee (3,800) (3,500)
Custodian’s fee (50) (53)
Other expenses 9 (5,806) (5,637)
Total Expenditure (30,811) (24,868)
NET INCOME BEFORE TAX 1,837,764 594,307
LESS: INCOME TAX 12 - -
NET INCOME AFTER TAX 1,837,764 594,307
OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR THE
FINANCIAL YEAR 1,837,764 594,307
Total comprehensive income comprises the following:
Realised income 1,563,976 11,414
Unrealised gain 273,788 582,893
1,837,764 594,307
The accompanying notes form an integral part of the financial statements.
14
Namaa’ Asia-Pacific Equity Growth
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 OCTOBER 2017
Unitholders’ Retained Total
capital earnings equity
Note RM RM RM
At 1 November 2015 (90,797) 1,179,132 1,088,335
Total comprehensive income for
the financial year - 594,307 594,307
Creation of units 10(a) 14,658,462 - 14,658,462
Cancellation of units 10(a) (3,970,224) - (3,970,224)
Balance at 31 October 2016 10,597,441 1,773,439 12,370,880
At 1 November 2016 10,597,441 1,773,439 12,370,880
Total comprehensive income for
the financial year - 1,837,764 1,837,764
Creation of units 10(a) 11,970,341 - 11,970,341
Cancellation of units 10(a) (19,093,042) - (19,093,042)
Balance at 31 October 2017 3,474,740 3,611,203 7,085,943
The accompanying notes form an integral part of the financial statements.
15
Namaa’ Asia-Pacific Equity Growth
STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 OCTOBER 2017
2017 2016
RM RM
CASH FLOWS FROM OPERATING AND
INVESTING ACTIVITIES
Proceeds from sale of Shariah-compliant investment 14,746,106 2,354,960
Manager’s fee paid (7,340) (5,444)
Trustee’s fee paid (7,287) (3,120)
Tax agent’s fee paid (3,500) (3,500)
Custodian’s fee paid (50) (53)
Payments for other expenses (11,169) (11,105)
Purchase of Shariah-compliant investment (7,870,321) (12,636,968)
Net cash generated from/(used in) operating and
investing activities 6,846,439 (10,305,230)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from creation of units 12,322,774 14,306,029
Payments for cancellation of units (19,011,465) (3,970,224)
Net cash (used in)/generated from financing activities (6,688,691) 10,335,805
NET INCREASE IN CASH AND CASH
EQUIVALENTS 157,748 30,575
CASH AND CASH EQUIVALENTS AT
BEGINNING OF FINANCIAL YEAR 77,848 47,273
CASH AND CASH EQUIVALENTS AT
END OF FINANCIAL YEAR 235,596 77,848
Cash and cash equivalents comprise:
Cash at banks 235,596 77,848
The accompanying notes form an integral part of the financial statements.
16
Namaa’ Asia-Pacific Equity Growth
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
Standards effective during the financial year
Standards issued but not yet effective
Effective for
financial periods
beginning on or after
MFRS 9: Financial Instruments 1 January 2018
MFRS 15: Revenue From Contracts With Customers 1 January 2018
The Fund was set up with the objective to grow the value of investment in the longer term by
investing in listed equities, equities-related investments and other Islamic instruments that
conform to the Shariah Investment Guidelines across Asia Pacific (ex-Japan) region. Being a
feeder fund, a minimum of 95% of the Fund’s net asset value will be invested in the Am-
Namaa’ Asia-Pacific Equity Growth (“Target Fund”), which is a Shariah-compliant target fund,
denominated in USD and managed by AmFunds Management Berhad (“Target Fund Manager”).
As provided in the Deed, the “accrual period” or the financial year shall end on 31 October and
the units in the Fund were first offered for sale on 15 August 2008.
The adoption of MFRS which have been effective during the financial year did not have any
material financial impact to the financial statements.
The financial statements of the Fund have been prepared in accordance with Malaysian
Financial Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards
Board (“MASB”) and are in compliance with International Financial Reporting Standards.
The financial statements of the Fund have been prepared under the historical cost convention,
unless otherwise stated in the accounting policies.
As at the date of authorisation of these financial statements, the following Standards, which are
relevant to the Fund, have been issued by MASB but are not yet effective and have not been
adopted by the Fund.
Namaa’ Asia-Pacific Equity Growth (“the Fund”) was established pursuant to a Deed dated 5
June 2008 as amended by Deeds Supplemental thereto (“the Deed”), between AmFunds
Management Berhad as the Manager, Deutsche Trustees Malaysia Berhad as the Trustee and all
unitholders.
17
MFRS 9 Financial Instruments
3. SIGNIFICANT ACCOUNTING POLICIES
Income recognition
Income tax
Functional and presentation currency
Foreign currency transactions
Statement of cash flows
The Fund plans to adopt the above pronouncements when they become effective in the
respective financial periods. These pronouncements are expected to have no significant impact
to the financial statements of the Fund upon their initial application except as described below:
MFRS 9 reflects International Accounting Standards Board’s (“IASB”) work on the replacement
of MFRS 139 Financial Instruments: Recognition and Measurement (“MFRS 139”). MFRS 9
will be effective for financial year beginning on or after 1 January 2018. The Fund is in the
process of quantifying the impact of the first adoption of MFRS 9.
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.
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 at the reporting date.
Transactions in currencies other than the Fund’s functional currency (foreign currencies) are
recorded in the functional currency using exchange rates prevailing at the transaction dates. At
each reporting date, foreign currency monetary items are translated into Ringgit Malaysia at
exchange rates ruling at the reporting date. All exchange gains or losses are recognised in profit
or loss.
The Fund adopts the direct method in the preparation of the statement of cash flows.
Functional currency is the currency of the primary economic environment in which the Fund
operates that most faithfully represents the economic effects of the underlying transactions. The
functional currency of the Fund is Ringgit Malaysia which reflects the currency in which the
Fund competes for funds, issues and redeems units. The Fund has also adopted Ringgit Malaysia
as its presentation currency.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive income or directly in equity.
18
Distribution
Unitholders’ capital
Financial assets
(i) Financial assets at FVTPL
Cash equivalents are short-term, highly liquid Shariah-compliant investment that is readily
convertible to cash with insignificant risk of changes in value.
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.
Distributions are at the discretion of the Fund. A distribution to the Fund’s unitholders is
accounted for as a deduction from realised reserves. A proposed distribution is recognised as a
liability in the period in which it is approved.
The unitholders’ capital of the Fund meets the definition of puttable instruments and is classified
as equity instruments under MFRS 132 Financial Instruments: Presentation (“MFRS 132”).
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 by the Fund
include Shariah-compliant collective investment scheme acquired principally for the
purpose of selling in the near term.
On disposal of Shariah-compliant investment, the net realised gain or loss on disposal is
measured as the difference between the net disposal proceeds and the carrying amount of the
Shariah-compliant investment. The net realised gain or loss is recognised in profit or loss.
The Fund determines the classification of its financial assets at initial recognition, and the
categories applicable to the Fund include financial assets at fair value through profit or loss
(“FVTPL”) and receivables.
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’. Exchange differences, if any, 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.
For Shariah-compliant investment in collective investment scheme, fair value is determined
based on the closing net asset value per unit of the collective investment scheme. The
difference between the cost and fair value is treated as unrealised gain or loss and is
recognised in profit or loss. Unrealised gains or losses recognised in profit or loss are not
distributable in nature.
19
(ii) Receivables
Impairment of financial assets
(i) Receivables carried at amortised cost
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 profit method.
A financial liability is derecognised when the obligation under the liability is extinguished.
Gains and losses are recognised in profit or loss when the liabilities are derecognised, and
through the amortisation process.
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.
Subsequent to initial recognition, receivables are measured at amortised cost using the
effective profit method. Gains and losses are recognised in profit or loss when the
receivables are derecognised or impaired, and through the amortisation process.
If any such evidence exists, the amount of impairment loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the financial asset’s original effective profit rate. The impairment loss is
recognised in profit or loss.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed to the extent that the carrying amount of
the asset does not exceed its amortised cost at the reversal date. The amount of reversal is
recognised in profit or loss.
Financial assets with fixed or determinable payments that are not quoted in an active market
are classified as receivables.
The Fund assesses at each reporting date whether there is any objective evidence that a financial
asset is impaired.
The carrying amount of the financial asset is reduced through the use of an allowance
account. When a receivable becomes uncollectible, it is written off against the allowance
account.
To determine whether there is objective evidence that an impairment loss on financial assets
has been incurred, the Fund considers factors such as the probability of insolvency or
significant financial difficulties of the debtor and default or significant delay in payments.
20
Classification of realised and unrealised gains and losses
Significant accounting estimates and judgments
4. SHARIAH-COMPLIANT INVESTMENT
2017 2016
RM RM
Financial assets at FVTPL
At cost:
Collective investment scheme 5,842,147 11,206,600
At fair value:
Collective investment scheme 6,869,403 11,960,068
The Fund classifies its Shariah-compliant investment as financial assets at FVTPL as the Fund
may sell its Shariah-compliant investment in the short-term for profit-taking or to meet
unitholders’ cancellation of units.
No major judgments have been made by the Manager in applying the Fund’s accounting
policies. There are no 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.
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) during the reporting period.
Realised gains and losses on disposals of financial instruments classified at fair value through
profit or loss are calculated using the weighted average method. They represent the difference
between an instrument’s initial carrying amount and disposal amount.
The preparation of the Fund’s financial statements requires the Manager to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent liabilities at the reporting date. 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 in the future.
21
Details of Shariah-compliant investment as at 31 October 2017 are as follows:
Fair
value as a
percentage of
Collective investment Number Fair Purchase net asset
scheme of units value cost value
RM RM %
Am-Namaa’ Asia-Pacific
Equity Growth (“Target Fund”) 98,775 6,869,403 5,842,147 96.94
Excess of fair value over cost 1,027,256
2017 2016
% of % of
By country portfolio portfolio
Hong Kong 26.4 18.9
Taiwan 16.8 17.3
South Korea 12.9 9.7
Indonesia 9.9 9.2
Australia 9.2 7.8
Thailand 6.7 5.5
Malaysia 5.2 4.9
Philippines 3.3 2.8
Singapore - 5.8
Cash and others 9.6 18.1
100.0 100.0
By sector
Information technology 20.6 17.9
Consumer discretionary 16.3 16.3
Communications 8.7 10.3
Energy 8.3 4.1
Materials 7.0 5.3
Consumer staples 6.9 4.8
(Forward)
A minimum of 95% of its net asset value will be invested in the Target Fund. However, the asset
allocation may be reduced due to creation of units at the point of reporting date. The ratio will be
adjusted back to the minimum level after the reporting period, if need be.
The Target Fund’s Shariah-compliant investment objective and policy are to grow the value of
investment in the longer term by investing in listed equities, equities-related investments and
other Islamic instruments that conform to the Shariah Investment Guidelines across Asia Pacific
(ex-Japan) region. As at the reporting date, the Shariah-compliant investment portfolio of the
Target Fund is made up of the following:
22
2017 2016
% of % of
portfolio portfolio
Industrial 6.6 4.4
Healthcare 6.2 9.8
Plantation 2.8 3.0
Trading/Services 2.4 1.8
Financial 2.3 -
Real estate 2.3 1.4
Utility - 2.8
Cash and others 9.6 18.1
100.0 100.0
5. AMOUNT DUE (TO)/FROM MANAGER
2017 2016
RM RM
(Redemption)/creation of units* (81,577) 352,433
Manager’s fee payable (269) (608)
(81,846) 351,825
*
As the Fund is investing in a Target Fund, the Manager’s fee was charged as follows:
2017 2016
% p.a. % p.a.
Manager’s fee charged by the Target Fund Manager,
on the net asset value of the Target Fund (Note a) 1.80 1.80
Manager’s fee charged by the Manager, on the remaining
net asset value of the Fund (Note b) 1.80 1.80
Note a)
Note b)
The amount represents amount (payable to)/receivable from the Manager for units
(redeemed)/created.
The Fund’s share of manager’s fee to the Target Fund Manager has been accounted for
as part of net unrealised changes in fair value of Shariah-compliant investment in
collective investment scheme.
Manager’s fee of the Fund chargeable in the Statement of Comprehensive Income only
relates to 1.80% on the remaining net asset value of the Fund.
23
6. AMOUNT DUE FROM TARGET FUND MANAGER
7. AMOUNT DUE TO TRUSTEE
8. NET GAIN FROM SHARIAH-COMPLIANT INVESTMENT
2017 2016
RM RM
Net gain on financial assets at FVTPL comprised:
− Net realised gain on sale of Shariah-compliant investment 1,336,037 71,809
− Net realised gain/(loss) on foreign currency exchange 258,750 (35,527)
− Net unrealised gain on changes in fair values of Shariah-
compliant investment 677,551 433,518
− Net unrealised (loss)/gain on foreign currency fluctuation of
Shariah-compliant investment denominated in foreign
currency (403,763) 149,375
1,868,575 619,175
9. OTHER EXPENSES
The amount due from the Target Fund Manager was for the sale of Shariah-compliant
investment where settlement was not due as at the financial year end.
Trustee’s fee is at a rate of 0.06% (2016: 0.06%) per annum on the net asset value of the Fund,
calculated on a daily basis.
The normal credit period in the previous and current financial years for Trustee’s fee payable is
one month.
Included in other expenses is Goods and Services Tax incurred by the Fund during the financial
year amounting to RM1,707 (2016: RM1,941).
The normal credit period in the previous and current financial years for creation and redemption
of units is three business days.
The normal credit period in the previous and current financial years for Manager’s fee payable is
one month.
24
10. TOTAL EQUITY
Total equity is represented by:
2017 2016
Note RM RM
Unitholders’ capital (a) 3,474,740 10,597,441
Retained earnings
− Realised income (b) 2,583,947 1,019,971
− Unrealised gain (c) 1,027,256 753,468
7,085,943 12,370,880
(a) UNITHOLDERS’ CAPITAL/UNITS IN CIRCULATION
2016
Number of Number of
units RM units RM
At beginning of the
financial year 18,637,459 10,597,441 1,533,142 (90,797)
Creation during the
financial year 16,602,190 11,970,341 23,178,375 14,658,462
Cancellation during the
financial year (26,057,232) (19,093,042) (6,074,058) (3,970,224)
At end of the financial year 9,182,417 3,474,740 18,637,459 10,597,441
(b) REALISED – DISTRIBUTABLE
2017 2016
RM RM
At beginning of the financial year 1,019,971 1,008,557
Total comprehensive income for the financial year 1,837,764 594,307
Net unrealised gain attributable to Shariah-
compliant investment held transferred to
unrealised reserve [Note 10(c)] (273,788) (582,893)
Net increase in realised reserve for the
financial year 1,563,976 11,414
At end of the financial year 2,583,947 1,019,971
2017
25
(c) UNREALISED – NON-DISTRIBUTABLE
2017 2016
RM RM
At beginning of the financial year 753,468 170,575
Net unrealised gain attributable to Shariah-
compliant investment held transferred from
realised reserve [Note 10(b)] 273,788 582,893
At end of the financial year 1,027,256 753,468
11. UNITS HELD BY RELATED PARTIES
12. INCOME TAX
2017 2016
RM RM
Net income before tax 1,837,764 594,307
Taxation at Malaysian statutory rate of 24% 441,063 142,634
Tax effects of:
Income not subject to tax (545,361) (157,128)
Loss not deductible for tax purposes 96,903 8,526
Restriction on tax deductible expenses for unit trust fund 3,665 3,111
Non-permitted expenses for tax purposes 3,323 2,512
Permitted expenses not used and not available for future
financial years 407 345
Tax expense for the financial year - -
13. DISTRIBUTION
No distribution was declared by the Fund for the financial years ended 31 October 2017 and 31
October 2016.
Income tax payable is calculated on Shariah-compliant investment income less deduction for
permitted expenses as provided for under Section 63B of the Income Tax Act, 1967.
The Manager and parties related to the Manager did not hold any units in the Fund as at 31
October 2017 and 31 October 2016.
Pursuant to Schedule 6 of the Income Tax Act, 1967, local profit income derived by the Fund is
exempted from tax.
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:
26
14. MANAGEMENT EXPENSE RATIO (“MER”)
2017 2016
% p.a. % p.a.
Manager’s fee 0.06 0.10
Trustee’s fee 0.06 0.06
Fund’s other expenses 0.14 0.25
Total MER 0.26 0.41
15. PORTFOLIO TURNOVER RATIO (“PTR”)
16. SEGMENTAL REPORTING
17. TRANSACTIONS WITH THE TARGET FUND MANAGER
Target Fund Manager
RM %
AmFunds Management Berhad 22,989,372 100.00
There was no transaction with financial institutions related to the Manager, during the financial
year.
The PTR of the Fund, which is the ratio of average total acquisitions and disposals of Shariah-
compliant investment to the average net asset value of the Fund calculated on a daily basis, is
0.96 times (2016: 1.24 times).
The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by the
Fund to the average net asset value of the Fund calculated on a daily basis.
The Fund’s MER is as follows:
Transaction value
Details of transactions with the Target Fund Manager for the financial year ended 31 October
2017 are as follows:
As the Fund operates substantially as a feeder fund which invests primarily in the Target Fund, it
is not possible or meaningful to classify its Shariah-compliant investment by separate business
or geographical segments. A summary of the Shariah-compliant investment portfolio of the
Target Fund is disclosed in Note 4.
As stated in Note 1, the Fund is a feeder fund whereby a minimum of 95% of the Fund’s net
asset value will be invested in the Target Fund.
27
18. FINANCIAL INSTRUMENTS
(a) Classification of financial instruments
Financial
Financial Receivables liabilities at
assets at amortised amortised
at FVTPL cost cost Total
RM RM RM RM
Assets
Shariah-compliant investment 6,869,403 - - 6,869,403
Amount due from Target Fund
Manager - 83,455 - 83,455
Cash at banks - 235,596 - 235,596
Total financial assets 6,869,403 319,051 - 7,188,454
Liabilities
Amount due to Manager - - 81,846 81,846
Amount due to Trustee - - 472 472
Sundry payables and accrued
expenses - - 20,193 20,193
Total financial liabilities - - 102,511 102,511
Assets
Shariah-compliant investment 11,960,068 - - 11,960,068
Amount due from Manager - 351,825 - 351,825
Cash at bank - 77,848 - 77,848
Total financial assets 11,960,068 429,673 - 12,389,741
(Forward)
2016
The above transactions were in respect of Shariah-compliant collective investment scheme.
Transactions in this Shariah-compliant investment do not involve any commission or brokerage.
The significant accounting policies in Note 3 describe how the classes of financial instruments
are measured, and how income and expenses, including fair value gains and losses, are
recognised. The following table analyses the financial assets and liabilities of the Fund in the
statement of financial position by the class of financial instrument to which they are assigned,
and therefore by the measurement basis.
2017
The Manager and the Trustee are of the opinion that the above transactions have been entered in
the normal course of business and have been established under terms that are no less favourable
than those arranged with independent third parties.
28
Financial
Financial Receivables liabilities at
assets at amortised amortised
at FVTPL cost cost Total
RM RM RM RM
2016
Liabilities
Amount due to Trustee - - 605 605
Sundry payables and accrued
expenses - - 18,256 18,256
Total financial liabilities - - 18,861 18,861
Income, expense, gains
and losses
2017 2016
RM RM
Net gain from financial assets at FVTPL 1,868,575 619,175
(b) Financial instruments that are carried at fair value
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2:
Level 3:
Level 1 Level 2 Level 3 Total
RM RM RM RM
- 6,869,403 - 6,869,403
- 11,960,068 - 11,960,068
The Fund’s financial assets and liabilities at FVTPL are carried at fair value.
The following table shows an analysis of financial instruments recorded at fair value by the
level of the fair value hierarchy:
The Fund uses the following hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:
techniques which use inputs which have a significant effect on the recorded fair
value that are not based on observable market data.
other techniques for which all inputs which have a significant effect on the recorded
fair values are observable; either directly or indirectly; or
2016
2017
Financial assets at FVTPL
Financial assets at FVTPL
29
(c)
Amount due from/(to) Manager
Amount due from Target Fund Manager
Cash at banks
Amount due to Trustee
Sundry payables and accrued expenses
19. RISK MANAGEMENT POLICIES
Market risk
(i) Price risk
Price risk refers to the uncertainty of an investment’s future prices. In the event of adverse
price movements, the Fund might endure potential loss on its Shariah-compliant investment in
the Target Fund. In managing price risk, the Manager actively monitors the performance and
risk profile of the investment portfolio.
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 due to their short period to
maturity or short credit period:
There are no financial instruments which are not carried at fair values and whose carrying
amounts are not reasonable approximation of their respective fair values.
Market risk, in general, is the risk that the value of a portfolio would decrease due to changes in
market risk factors such as equity prices, profit rates, foreign exchange rates and commodity prices.
The Fund is exposed to a variety of risks that include market risk, credit risk, liquidity risk, single
issuer risk, regulatory risk, country risk, management risk and non-compliance/Shariah non-
compliance risk.
Risk management is carried out by closely monitoring, measuring and mitigating the above said
risks, careful selection of Shariah-compliant investment coupled with stringent compliance to
Shariah-compliant investment restrictions as stipulated by the Capital Market and Services Act
2007, Securities Commission’s Guidelines on Unit Trust Funds and the Deed as the backbone of
risk management of the Fund.
30
Percentage movements in
price by: 2017 2016
RM RM
-5.00% (343,470) (598,003)
+5.00% 343,470 598,003
(ii) Currency risk
Percentage movements in
currencies other than the 2017 2016
Fund’s functional currency: RM RM
-5.00% (348,104) (599,042)
+5.00% 348,104 599,042
Assets denominated in RM % of net RM % of net
United States Dollar equivalent asset value equivalent asset value
Shariah-compliant investment 6,869,403 96.94 11,960,068 96.68
Amount due from Target Fund
Manager 83,455 1.18 - -
Cash at banks 9,220 0.13 20,770 0.17
6,962,078 98.25 11,980,838 96.85
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss to
the Fund by failing to discharge an obligation. Credit risk applies to distributions receivable. The
issuer of such instruments may not be able to fulfill the required profit payments or repay the
principal invested or amount owing. These risks may cause the Fund’s Shariah-compliant
investment to fluctuate in value.
2017
The result below summarised the price risk sensitivity of the Fund’s NAV due to movements
of price by -5.00% and +5.00% respectively:
2016
The net unhedged financial assets of the Fund that are not denominated in Fund’s functional
currency are as follows:
Currency risk is associated with the Fund’s assets and liabilities that are denominated in
currencies other than the Fund’s functional currency. Currency risk refers to the potential loss
the Fund might face due to unfavorable fluctuations of currencies other than the Fund’s
functional currency against the Fund’s functional currency.
The result below summarised the currency risk sensitivity of the Fund’s NAV due to
appreciation/depreciation of the Fund’s functional currency against currencies other than the
Fund’s functional currency.
Sensitivity of the Fund’s NAV
Sensitivity of the Fund’s NAV
31
Cash at banks are held for liquidity purposes and are not exposed to significant credit risk.
Liquidity risk
Single issuer risk
Regulatory risk
Country risk
Management risk
Non-compliance/Shariah non-compliance risk
The Fund, as a feeder fund, invests significantly all its assets in the Target Fund. The Target Fund
manages the risk by setting internal counterparty limits and undertaking internal credit evaluation
to minimise such risk.
Liquidity risk is defined as the risk of being unable to raise funds or borrowings to meet payment
obligations as they fall due. This is also the risk of the Fund experiencing large redemptions, when
the Investment Manager could be forced to sell large volumes of its holdings at unfavourable prices
to meet redemption requirements.
The Fund maintains sufficient level of liquid assets, after consultation with the Trustee, to meet
anticipated payments and cancellations of units by unitholders. Liquid assets comprise of deposits
with licensed financial institutions and other instruments, which are capable of being converted
into cash within 5 to 7 days. The Fund’s policy is to always maintain a prudent level of liquid
assets so as to reduce liquidity risk.
The Fund, as a feeder fund, invests significantly all its assets in the Target Fund. The Target Fund
is restricted from investing in securities issued by any issuer in excess of a certain percentage of its
net asset value. Under such restriction, the risk exposure to the securities of any single issuer is
diversified and managed by the Target Fund Manager based on internal/external ratings.
Any changes in national policies and regulations may have effects on the capital market and the net
asset value of the Fund.
Poor management of the Fund may cause considerable losses to the Fund that in turn may affect the
net asset value of the Fund.
This is the risk of the Manager, the Trustee or the Fund not complying with internal policies, the
Deed of the Fund, securities law or guidelines issued by the regulators. In the case of an Islamic
Fund, this includes the risk of the Fund not conforming to Shariah Investment Guidelines. Non-
compliance risk may adversely affect the Shariah-compliant investment of the Fund when the Fund
is forced to rectify the non-compliance.
The risk of price fluctuation in foreign securities may arise due to political, financial and economic
events in foreign countries. If this occurs, there is a possibility that the net asset value of the Fund
may be adversely affected.
32
20. CAPITAL MANAGEMENT
No changes were made in the objective, policies or processes during the financial years ended 31
October 2017 and 31 October 2016.
The specific risks associated to the Target Fund include market risk, securities risk, emerging
market risk, settlement and credit risks, regulatory and accounting standards risks, political risk,
custody risk and liquidity risk.
The primary objective of the Fund’s capital management is to ensure that it maximises unitholders’
value by expanding its fund size to benefit from economies of scale and achieving growth in net
asset value from the performance of its Shariah-compliant investment.
The Fund manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust the capital structure, the Fund may issue new or bonus units,
make distribution payment, or return capital to unitholders by way of redemption of units.
33
Namaa’ Asia-Pacific Equity Growth
STATEMENT BY THE MANAGER
Kuala Lumpur, Malaysia
7 December 2017
GOH WEE PENG
For and on behalf of the Manager
AmFunds Management Berhad
I, GOH WEE PENG, for and on behalf of the Manager, AmFunds Management Berhad, for
Namaa’ Asia-Pacific Equity Growth do hereby state that in the opinion of the Manager, the
accompanying statement of financial position, statement of comprehensive income, statement of
changes in equity, statement of cash flows and the accompanying notes are drawn up in accordance
with Malaysian Financial Reporting Standards and International Financial Reporting Standards so
as to give a true and fair view of the financial position of the Fund as at 31 October 2017 and the
comprehensive income, the changes in equity and cash flows of the Fund for the financial year then
ended.
34
35
TRUSTEE’S REPORT
36
REPORT OF THE SHARIAH ADVISER TO THE UNITHOLDERS
Namaa’ Asia-Pacific Equity Growth
For The Financial Year Ended 31 October 2017
We have acted as the Shariah Adviser of Namaa’ Asia – Pacific Equity Growth (the Fund). Our role and
responsibility is to ensure that the Fund is managed and operated in accordance with approved Shariah
principles.
We are of the view that the Fund is managed and operated accordance with the Shariah rulings issued by
us, the Shariah Adviser of the Fund.
In addition, we confirm that we have reviewed all the securities in the investment portfolio of the Fund
and opine that these securities are in accordance with our Shariah rulings. These securities are in line with
the guidelines laid out by the Shariah Advisory Council (SAC) of the SC or the SAC of Bank Negara
Malaysia (BNM). For instruments not classified as Shariah-compliant by the SAC of the SC or SAC of
BNM, a statement stating that the status of the instruments has been determined in accordance with the
ruling issued by the Shariah adviser.
…………………………………………..
Assoc. Prof. Dr. Azman Bin Mohd Noor
for and on behalf of
Al Rajhi Banking & Investment
Corporation (Malaysia) Berhad
Date: 7 December 2017
37
DIRECTORY
Head Office 9th
Floor, Bangunan Ambank Group
55, Jalan Raja Chulan, 50200 Kuala Lumpur
Tel: (03) 2032 2888 Facsimile: (03) 2031 5210
Email: [email protected]
Postal Address AmFunds Management Berhad
P.O Box 13611, 50816 Kuala Lumpur
Related Institutional Unit Trust Agent
AmBank (M) Berhad Head Office
Company No. 8515-D 31st Floor, Menara AmBank
No. 8 Jalan Yap Kwan Seng, 50450 Kuala Lumpur
AmInvestment Bank Berhad Head Office
Company No. 23742-V 22nd
Floor, Bangunan AmBank Group
55 Jalan Raja Chulan, 50200 Kuala Lumpur
For more details on the list of IUTAs, please contact the Manager.
For enquiries about this or any of the other Funds offered by AmFunds Management Berhad
Please call 2032 2888 between 8.45 a.m. to 5.45 p.m. (Monday to Thursday),
Friday (8.45 a.m. to 5.00 p.m.)
Semi-Annual Report28 February 2015
03 2132 2888 | aminvest.com | [email protected]
AmFunds Management Berhad (155432-A)