fund information investment objective, policy and strategy · growth potential. investment policy...

1

Investment Objective

• To provide investors with regular income

and capital gain at an acceptable level of risk

by investing primarily in Malaysian public

listed companies with steady and good

growth potential.

Investment Policy

• The main objective of the Investment Policy

is to implement a plan of action to achieve

the highest probability of investment return

from the Fund’s portfolio of securities.

Investment Strategy

• RHB Dynamic Fund seeks regular income

and capital gain. To pursue this goal, the

Fund invests primarily in Malaysian public

listed companies with steady income and

good growth potential. In analyzing

companies, the Investment Manager looks

for businesses that demonstrate leadership

in their respective sectors with strong growth

potential coupled with consistent dividend

policy.

• The Investment Manager uses conservative

valuation parameters, focusing on several key

numbers with respect to the company’s

historical price levels and relative value to

its peer universe. These numbers include

price/earnings multiples of the company,

earnings growth rates, relative price earnings

to growth, dividend yield, cashflow, balance

sheet strength, quality of management, return

on assets and return on investments, among

others. Quarterly earnings expectations and

results are carefully followed, and the Fund’s

portfolio manager’s investment strategy

could differ if key macro and micro factors

materially change.

MANAGER'S OVERVIEW

INVESTMENT OBJECTIVE,

POLICY AND STRATEGY

W e are pleased to present to you the Interim

Report of RHB Dynamic Fund incorporating the

Unaudited Financial Statements for the Six-

Month Financial Period Ended 30 June 2008.

During the financial period under review, the Fund

received an investment income of RM3,266,810

including RM2,224,592 realised gain from the sale

of investments.

The Fund registered a loss of 15.31%* compared to

a loss of 17.89%* in the KLCI. The total return

since inception was 144.95%* as opposed to

the KLCI’s return of 102.52%*.

The Net Asset Value (NAV) per unit of the Fund

decreased 15.30% from RM1.0370 per unit at

end of the last financial year on 31 December

2007 to RM0.8783 per unit on 30 June 2008.

The number of units in circulation decreased

from 72.62 million as at 31 December 2007 to

66.33 million as at 30 June 2008.

The Fund has met its investment objective by

investing primarily in Malaysian public listed

companies with steady and good growth

potential.

FUND INFORMATION

Period of Trust

Fund Category

Fund Type

Relevant Benchmark

Distribution Policy

:

:

:

:

:

Subject to occurence of any events as stated under Clause 11.37 of the

Guidelines on Unit Trust Funds

Equity

Capital Growth and Income

Kuala Lumpur Composite Index (KLCI)

Subject to the availability of income at the end of the financial year

• In addition to those described above, the Fund

may invest in fixed income securities to

preserve the value of the Fund under volatile

market conditions.

*Source: Lipper Hindsight

2

MANAGER'S REPORT

Equity Market Review

(1 January 2008 to 30 June 2008)

Equity Market Outlook & Strategy

The first six months of 2008 proved to be

rather volatile times for global equity markets.

With the continuous strengthening of crude

oil and commodity prices, a weakening US

Dollar as well as further writedowns in the US

banking sector, sentiment remained cautious

and concerns of global inflation emerged. This

is evident with the tightening monetary stance

adopted by most central banks around the

world. Even the US Federal Reserve has given

the indication that they might have to hike

interest rates back up from the 2.0% level to

combat inflation.

Domestically, the Kuala Lumpur Composite

Index (KLCI) was not spared by the heightened

volatility and higher risk aversion that global

equity markets were experiencing. Further

dampening sentiments was the changing

political landscape that gave rise due to the

results of the 12 th General Election. As

sentiments remained subdued with lack of

fresh leads insight coupled with downgrades

by various research houses, the KLCI recorded

a loss of 17.89% for the period under review.

The KLCI started the year 2008 on a strong

footing, racing to an all-time high of 1,516.22

points on 11 January 2008 on the back of

stronger Crude Palm Oil (CPO) prices and

expectations of a stronger Ringgit. The

bullish sentiment soon gave way to concerns

over massive losses on Wall Street, the

possibility of a recession in the US economy

as well as soaring crude oil prices. With the

US Federal Reserve acting swiftly by cutting

interest rates by 125 basis points (bps) to 3.0%,

the local bourse recovered a little but soon

plunged sharply and triggered for the first time

the 10% circuit breaker after the 12th General

Election. Negative news externally, such as the

collapse of Bear Stearns as well as soaring

crude oil prices, saw the KLCI trading in a

narrow band with thinning market volumes.

Even the US Federal Reserve’s move to

further cut interest rates down to 2.0% in April

failed to provide cheer to equity markets

globally. Investor sentiment was further

spooked by inflationary concerns as the

Government announced a significant hike

in petrol prices and electricity tariffs in June

2008. The weak sentiment was further

compounded by the current political scene.

At the end of the review period, the KLCI

lost 258.46 points or 17.89% to close at

1,186.57 points.

Domestically, economic growth is expected

to remain intact for 2008, underpinned by

domestic demand as well as rising intra-Asian

trade, particularly to China, which will

provide some cushion to the economy as

exports are expected to be soft, given the

current economic outlook in the US. However,

Gross Domestic Product (GDP) growth is

expected to be slower in 2H08 on the back of

the recent hike in petrol prices and electricity

tariffs which have given rise to inflationary

pressures. These inflationary pressures, if not

kept in check, would result in softer domestic

demand and private investments. Despite this,

Bank Negara Malaysia (BNM) is still

projecting a GDP growth of 5.0% for 2008. Other

economic fundamentals remain strong with

rising foreign exchange reserves and ample

liquidity in the system. On the interest rate

front, BNM is expected to keep the Overnight

Policy Rate (OPR) stable at 3.5%, with the

flexibility to maneuver should the need arise.

Against this backdrop, the outlook for the

local bourse remains positive, supported by

sustained economic growth, resilient

corporate earnings (although there is the risk

3

of a possible earnings downgrade with the

slowdown in global economies as well as

inflation risks) and attractive valuations.

Having said that, we expect the stock market

to remain volatile with a downside bias in the

short-term, mainly driven by external

developments in the US, concerns over global

inflation as well as the changing political

landscape domestically.

As such, we remain cautiously optimistic on

the local bourse, focusing on fundamentally

sound stocks with good earnings visibility,

strong cashflows and sound management.

From a sector perspective, we continue to like

sectors with strong earnings visibility and

lower correlation to global macroeconomic

conditions, given the heightened external

risks.

4

PORTFOLIO STRUCTURE

PORTFOLIO STRUCTURE AS AT 30 JUNE 2008

As at 30 June 2008, the Fund has invested 77.21% in equities and the balance of 22.79%

in liquid assets and other net current assets.

In the portfolio structure as at 31 December 2007, the Fund invested 86.46% in equities

and the balance of 13.54% in liquid assets and other net current assets.

As at 30 June 2008, the top five holdings in the portfolio were Kumpulan Sime Darby Bhd,

IOI Corporation Bhd, AmBank Bhd, Affin Bank Bhd and Malayan Banking Bhd.

Changes in core holdings for the period included the addition of AmBank Bhd, Affin

Bank Bhd and Malayan Banking Bhd replacing Bumiputra-Commerce Holdings Bhd,

MMC Corporation Bhd and Telekom Malaysia Bhd.

The Fund’s detailed holdings in the various sectors is shown below:-

PERFORMANCE OF FUND AND BENCHMARK

Since Inception

(15 September 1992)

%

Total Return**

RHB Dynamic Fund

KLCI

144.95

102.52

Two

Years

%

One

Year

%

21.25

29.72

(10.10)

(12.39)

Six-Month

%

(15.31)

(17.89)

Source: Lipper Hindsight

** The above Total Return and Average Annual Return are indicative returns based on daily Net

Asset Value of a unit since inception.

Note: Unit prices and returns may fluctuate, past performance figures shown are not necessarily

indicative of future performance.

Three

Years

%

23.36

33.57

Four

Years

%

23.19

44.73

Five

Years

%

38.98

71.48

Since Inception

(15 September 1992)

%

Average Annual Return**

RHB Dynamic Fund

KLCI

5.83

4.57

Two

Years

%

One

Year

%

10.10

13.88

(10.05)

(12.33)

Six-Month

%

(28.34)

(32.65)

Three

Years

%

7.24

10.12

Four

Years

%

5.35

9.68

Five

Years

%

6.80

11.38

C o n s t r u c t io n

1 .7 1 %

In f r a s t r u c tu r e

3 .6 5 %

P la n ta t io n s

1 7 .0 0 %

W a r r a n ts /R ig h ts

1 .1 6 %

P r o p e r t ie s

0 .9 3 %

L iq u id a s s e ts a n d o th e r n e t

c u r r e n t a s s e ts

2 2 .7 9 %

C o n s u m e r P r o d u c ts

3 .5 4 %

T r a d in g /S e r v ic e s

3 2 .4 5 %

F in a n c e

1 2 .7 1 %

In d u s t r ia l P r o d u c t

4 .0 6 %

5

Portfolio Composition (%)Trading/ServicesConsumer ProductsIndustrial ProductsConstructionPlantationPropertyFinanceInfrastructureTechnologyWarrant/RightsMesdaq TradeForeign SecuritiesREITSInitial Public OfferingLocal Loan Stocks, Notes and BondsLiquid assets and other net current assets

Total Portfolio Holdings

Net Assets Attributable to Unitholders (RM)

Units in Circulation

Net Asset Value (RM) per unit

Seller’s Price (RM)Buyer’s Price (RM)Year’s Seller’s Price - Highest (RM)Year’s Seller’s Price - Lowest (RM)Year’s Buyer’s Price - Highest (RM)Year’s Buyer’s Price - Lowest (RM)

Management Expense Ratio (%)

Portfolio Turnover (Times)

Total Return (%)Return on Capital (%)Return on Income (%)

Kuala Lumpur Composite Index (%)

Distribution Per Unit (Sen)Interim - Gross/NetFinal - Gross/Net

Other Performance Data

Performance Data

48.892.863.861.031.340.92

23.363.210.62

--

0.51--

0.0113.39

100.00

216,760,376

310,220,000

0.6987

0.74590.70370.76800.72690.72450.6857

1.59

0.66

(7.55)(7.55)

-

(0.84)

--

31 Dec ‘05

46.224.284.803.775.400.72

15.854.05

-0.13

--

0.960.18

-13.64

100.00

90,739,289

113,060,000

0.8026

0.86100.81230.76800.72690.72450.6857

1.63

0.95

15.4315.43

-

21.83

--

31 Dec ‘06

5,000 and below

5,001 to 10,000

10,001 to 50,000

50,001 to 500,000

500,001 and above

Total *

*Note: Including Manager's Stock.

Size of Holdings Unitholders Unitholdings

BREAKDOWN OF UNITHOLDINGS

Number % (‘000) units %

2,509

789

1,122

183

6

4,609

54.44

17.12

24.34

3.97

0.13

100.00

6,535,000

6,144,000

24,368,000

19,866,000

9,412,000

66,325,000

9.85

9.26

36.74

29.96

14.19

100.00

43.861.863.596.00

10.472.42

14.032.47

-0.611.15

----

13.54

100.00

75,306,726

72,620,000

1.0370

1.03701.03701.03700.99771.03700.9977

1.52♦

0.73#

27.50**27.50**

-

31.62**

--

31 Dec ‘07

♦ The Fund recorded a lower Management Expense Ratio in 2007 as a result of a lower average net asset value.

# The lower PTR in 2007 vis-a-vis 2006 was due to the more defensive portfolio comprising of quality blue chips put in

place to weather the volatility of the market in 2007.

** Source: Lipper Hindsight

6

The notes on pages 8 to 22 form an integral part of these financial statements.The notes on pages 8 to 22 form an integral part of these financial statements.

INVESTMENT INCOME

EXPENSES

Management fee

Trustees’ fee

Auditor’s remuneration

Tax agent’s fee

Administrative expenses

Net income before finance

cost and taxation

Taxation

Increase in net assets

attributable to unitholders

Net income after finance cost and after

taxation is made up as follows:

Realised amount

STATEMENT OF ASSETS AND

LIABILITIES AS AT 30 JUNE 2008

(UNAUDITED)

Note 31.12.2007

RM

LISTED INVESTMENTS

LIQUID ASSETS

Bank balance

Short term deposits

OTHER ASSETS

Amount due from stockbrokers

Interest receivable

Dividend receivable

Tax recoverable

TOTAL ASSETS

LIABILITIES

Taxation

Amount due to stockbrokers

Amount due to Trustee

Amount due to Manager

Other payables and accruals

LIABILITIES (EXCLUDING

NET ASSETS ATTRIBUTABLE

TO UNIT HOLDERS)


TO UNITHOLDERS

REPRESENTED BY:

Fair value of outstanding units

Units in circulation

Net asset value per unit

6

7

8

9

INCOME STATEMENT

FOR THE FINANCIAL PERIOD ENDED

30 JUNE 2008 (UNAUDITED)

10

11

12

13

8,071,023

(671,253)

(31,325)

(4,750)

(1,900)

(28,900)

(738,128)

7,332,895

(752,524)

6,580,371

6,580,371

UNAUDITED FINANCIAL STATEMENTS AND

NOTES TO THE FINANCIAL STATEMENTS

30.06.2008

RM

44,978,775

44,978,775

10,087

12,807,403

12,817,490

962,045

4,260

58,694

-

1,024,999

58,821,264

221,027

-

3,435

318,077

23,325

565,864

58,255,400

58,255,400

66,325,000

0.8783

3,266,810

(484,392)

(22,605)

(5,250)

(1,500)

(14,942)

(528,689)

2,738,121

(187,000)

2,551,121

2,551,121

Note

01.01.2007

to

30.06.2007

RM

01.01.2008

to

30.06.2008

RM

65,111,813

65,111,813

50,787

9,111,000

9,161,787

2,700,804

2,557

89,527

75,258

2,868,146

77,141,746

-

1,370,438

4,439

410,604

49,539

1,835,020

75,306,726

75,306,726

72,620,000

1.0370

7

The notes on pages 8 to 23 form an integral part of these financial statements.The notes on pages 8 to 23 form an integral part of these financial statements.

STATEMENT OF CHANGES IN NET ASSETS

ATTRIBUTABLE TO UNITHOLDERS FOR

THE FINANCIAL PERIOD ENDED


NET ASSETS VALUE AT

THE BEGINNING OF THE

FINANCIAL PERIOD

Movement due to units

created and released during

the financial period:

Amounts on creation of units

Amounts on release of units

Net increase in net assets attributable

to unitholders during the financial period:

Net income for the financial period

Net change in fair value reserve


TO UNITHOLDERS AT END

OF THE FINANCIAL PERIOD

CASH FLOW FROM

INVESTING AND

OPERATING ACTIVITIES

Proceeds from sale of investments

Purchase of investments

Dividends received

Interest received

Tax refund from IRB

Management fee paid

Trustees’ fee paid

Payment for other fees and expenses

Net cash inflow from investing

and operating activities

CASH FLOW FROM

FINANCING ACTIVITIES

Cash proceeds from units created

Payment for release of units

Net cash outflow from financing

activities

Net increase/(decrease) in cash

and cash equivalents

Cash and cash equivalents at

beginning of the financial period

Cash and cash equivalents at

end of the financial period

ANALYSIS OF CASH AND

CASH EQUIVALENTS COMPRISE:

Bank balance

Short term deposits

90,739,289

-

(26,649,464)

64,089,825

6,580,371

11,584,554

82,254,750

59,585,798

(37,982,925)

925,864

187,990

-

(687,116)

(32,065)

(23,054)

21,974,492

-

(26,824,315)

(26,824,315)

(4,849,823)

12,769,784

7,919,961

50,961

7,869,000

7,919,961

CASH FLOW STATEMENT FOR THE

FINANCIAL PERIOD ENDED


75,306,726

6,510

(6,248,050)

69,065,186

2,551,121

13,360,907

58,255,400

33,779,944

(24,414,900)

681,150

191,704

307,779

(505,902)

(23,609)

(47,906)

9,968,260

6,510

(6,319,067)

(6,312,557)

3,655,703

9,161,787

12,817,490

10,087

12,087,403

12,817,490

01.01.2007

to

30.06.2007

RM

01.01.2008

to

30.06.2008

RM

01.01.2007

to

30.06.2007

RM

01.01.2008

to

30.06.2008

RM

8

The Unit Trust Fund (hereinafter referred to as ‘the

Fund’) was constituted under the name DCM-RHB

Dynamic Fund pursuant to the execution of the Deed

dated 26 May 1992 between the Manager, RHB

Investment Management Sdn Bhd*, the Trustee,

Mayban Trustees Bhd and the registered Unitholders

of the Fund. In accordance with a Supplementary

Deed dated 1 July 1997, the Fund changed its name

to RHB Dynamic Fund. Pursuant to this, the

Manager on 12 June 2008 had registered and lodged

with the Securities Commission a Master Deed

that also covers the Fund. This Master Deed shall

hereafter supersede the aforesaid Deeds.

The principal activity of the Fund is to invest in

‘Permitted Investments’ as defined under Item 15 of

Schedule 1 of the Master Deed, which comprises

securities (including unlisted securities in Malaysia),

other collective investment schemes, futures contracts,

securities lending, liquid assets and any other forms

of investment as may be approved by the relevant

authorities from time to time. The Fund commenced

operations on 15 September 1992 and will continue

its operations until terminated by the Trustee as

provided under Clause 25 of the Master Deed.

The main objective of the Fund is to provide

Unitholders with regular income and capital gain

at an acceptable level of risk by investing primarily

in Malaysian public listed companies with steady

and good growth potential.

The Manager, a company incorporated in

Malaysia, is a wholly-owned subsidiary of

RHB Investment Bank Berhad, effective from

6 January 2003. Its principal activities include

rendering of investment management services to

institutions, trust funds, pension and retirements

funds, insurance funds, private clients and

management of unit trust funds.

NOTES TO THE UNAUDITED FINANCIAL

STATEMENTS - 30 JUNE 2008

1. THE FUND, THE MANAGER AND THEIR

PRINCIPAL ACTIVITIES

2.FINANCIAL RISK MANAGEMENT

OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks

which include single issuer risk, fund

management risk, liquidity risk, interest rate

risk and credit risk.

Financial risk management is carried out

through internal control systems and

adherence to the investment restrictions as

stipulated by the Guidelines on Unit Trust

Funds issued by the Securities Commission.

Single issuer risk

The value of the Fund’s holding in the share

capital of any single issuer must not exceed ten

percent (10%) of the net asset value. The Fund

is also restricted to investment in transferable

securities and money market instruments

issued by any single issuer of not more than

fifteen percent (15%) of its net asset value.

Furthermore, the Fund is restricted to invest

in securities issued by and securities relating to

any group of companies of not more than

twenty percent (20%) of its net asset value.

Under such restrictions, the exposure risk to

the securities of any single issuer or any one

group of companies is minimised.

Fund management risk

The selection of securities which make up

the investments of the Fund is subjective and the

securities selected may perform better or worse

than the overall market. This risk is managed by

having a professional and experienced Fund

Manager who has access to research materials

and independent market analysis to enable fully

informed decisions in investments to be made.

Liquidity risk

The Fund maintains sufficient level of liquid

assets, after consultation with the Trustee,

to meet anticipated payments and cancellations

of units by unit holders. Liquid assets comprise

cash, deposits with licensed financial institutions

and other instruments which are capable of

being converted into cash with 7 days. The

Fund has a policy of maintaining a minimum

level of five percent (5%) of liquid assets at

all times to reduce the liquidity risk.

With effect from 1 January 2008, the entire assets and

liabilities of the unit trust businesses of RHB Unit Trust

Management Berhad (“RHBUTM”) was transferred to

RHB Investment Management Sdn Bhd (“RHBIM”)

(formerly known as RHB Asset Management Sdn Bhd)

by way of a Business Transfer Agreement and a Vesting

Order. Accordingly, RHBIM has assumed the role of

the Manager for all the unit trust funds managed by

RHBUTM prior to 1 January 2008.

*

9

The Fund issues cancellable units, which are

cancelled at the holder’s option and are

classified as financial liability. Cancellable

units can be put back to the Fund at any time

for cash equal to a proportionate share of the

Fund’s net asset value. The outstanding units

is carried at the redemption amount that is

payable at the balance sheet date if the holder

exercises the right to put the units back to

the Fund.

Units are created and cancelled at the holder’s

option at prices based on the Fund’s net asset

value per unit at the time of creation or

cancellation. The Fund’s net asset value is

calculated by dividing the net assets attributable

to unitholders with the total number of

outstanding units. In accordance with the

Securities Commission Guidelines on Unit

Trust Funds, investment positions are valued

based on the last traded market price for the

purpose of determining the net asset value per

unit for creations and cancellations.

3.2 CREATION AND CANCELLATION

OF UNITS

Credit risk

Credit risk refers to the ability of an issuer or a

counter party to make timely payments of

interest, principals and proceeds from realisation

of investments. The Fund, as required by the

Guidelines and Deed, maintains its liquidity

level at five percent (5%) of its net asset value

to meet redemption requests.

The credit risk arising from placements of

deposits in licensed financial institutions is

managed by ensuring that the Fund will only

place deposits in reputable licensed financial

insti tutions. For amount due from

stockbrokers, the sett lement terms are

governed by the relevant rules and regulations

as prescribed by Bursa Securities. The

settlement terms of the proceeds from the

creation of units receivable from the Manager

are governed by the Securities Commission’s

Guidelines on Unit Trust Funds.

2. FINANCIAL RISK MANAGEMENT

OBJECTIVES AND POLICIES

(CONTINUED)

3. SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

3.1 BASIS OF PREPARATION OF THE

FINANCIAL STATEMENTS

The financial statements of the Fund have been

prepared under the historical cost convention

in accordance with the Financial Reporting

Standards (‘FRS’), the MASB Approved

Accounting Standards in Malaysia for Entities

other than Private Entities and the Securities

Commission’s Guidelines on Unit Trust Funds.

Standards and amendments to published

standards and interpretations that are

effective

The new account ing s tandards and

amendments to pub l i shed s t andards

effective for the Fund’s financial period

beginning on or after 1 January 2007

are as follow:

The risk that the other party in an agreement

will default. In general, counterparty risk can be

reduced by having an organisation with extremely

good credit act as an intermediary between the

two parties.

Counter party risk

FRS 124 Related Party Disclosures

The new standards that has been issued but the

effective date of which has yet to be

determined by MASB is:

FRS 139 F i n a n c i a l I n s t r u m e n t s :

Recognition and Measurement. The new

standard establishes p r inc ip l e s for

recognising and measuring financial

assets, financial liabilities and some

contracts to buy and sell non-financial item.

Hedge accounting is permitted only under

strict circumstances. The Fund will apply

this standard when effective.

•

Interest rate risk

The Fund is exposed to interest rate risk.

Changes in interest rate will affect the value

of the investments and its returns. To manage

the risk, investments will be concentrated in

investment grade issued by financial institutions

and companies determined by the Manager.

10

3.11 SEGMENTAL INFORMATION

A business segment is a group of assets and

operations engaged in providing products or

services that are subject to risks and returns

that are different from those of other business

segments. A geographical segment is engaged

in providing products or services within a

particular economic environment that are

subject to risks and returns that are different

from those of segments operating in other

economic environments. In the opinion of

the Manager, all activities of the Fund are in

the single business of investment activities

conducted mainly in Malaysia. Consequently,

no segment reporting is provided in the Fund’s

financial statements.

The net asset value per unit is computed for

each dealing day. The price at which units are

created or cancelled is calculated by reference

to the net asset value per unit as at the close of

business on the relevant dealing day. Units in

the Fund are classified as financial liability in

the Statement of Net Assets and are stated at

fair value representing the price at which

unitholders can redeem the units from the Fund.

3.4 PROCEEDS AND PAYMENTS ON

CREATION AND CANCELLATION OF

UNITS

3.5 FINANCE COST

Proposed distributions to unit holders of

redeemable shares are recognised in the income

statement upon approval by the Board of

Directors of the Manager. The distribution to

the unitholders is recognised as finance cost in

the income statement.

3.6 INCOME RECOGNITION

Interest income from short-term deposits and

unlisted fixed income securities is recognised

on an accrual basis.

Dividends from Malaysian listed securities are

recognised on the ex-dividend date.

Realised gain and loss on sale of listed

investments is arrived at after accounting for

cost of investments, determined on the weighted

average cost method.

3.7 TAXATION

Current tax expense is determined according

to the Malaysian tax laws of the jurisdiction

in which the Company operates and includes

all taxes based upon the taxable profits.


ACCOUNTING POLICIES (CONTINUED)

3.3 INVESTMENTS

In accordance with the Master Deed, the

listed investments are valued in the financial

statements at the last done market price listed on

the Bursa Malaysia Securities Berhad as at the

date of the statement of assets and liabilities.

The unrealised gains and losses are taken to the

fair value reserve and the unrealised gains are

not distributable.

3.8 CASH AND CASH EQUIVALENTS

For the purpose of cash flow statement, cash

and cash equivalents comprise cash and bank

balances and deposits that are readily

convertible to known amounts of cash and

which are subject to an insignificant risk of

changes in value.

3.9 AMOUNT DUE FROM/TO STOCKBROKERS

Amount due from/to stockbrokers is carried

at approved transaction amount as stated in

contract notes.

3.10 PRESENTATION AND FUNCTIONAL

CURRENCY

The financial statements are presented in

Ringgit Malaysia, which is the Company’s

functional and presentation currency.

11

3.12 FINANCIAL INSTRUMENTS

Financial instruments comprise financial assets

and financial liabilities. Fair value is the amount

at which a financial asset could be exchanged

or a financial liability settled, between

knowledgeable and willing parties in an arm’s

length transaction. The information presented

herein represents the estimates of fair values

as at the date of the statement of assets and

liabilities.

Where available, quoted and observable market

prices are used as the measure of fair values.

Where such quoted and observable market prices

are not available, fair values are estimated based

on a range of methodologies and assumptions

regarding risk characteristics of various financial

instruments, discount rates, estimates of future

each cash flows and other factors. Changes in

the uncertainties and assumptions could

materially affect these estimates and the

resulting fair value estimates.

A range of methodologies and assumption have

been used in deriving the fair values of the Fund’s

financial statements at the date of the

statement of assets and liabilities. The total

fair value of each financial instrument is not

materially different from the total carrying

value.

The fair values are based on the following

methodologies assumptions:

For deposits and placements with financial

institutions with maturities of less than

three months, the carrying value is a

reasonable estimate of fair value. For

deposits and placements with maturities

of three months and above, the estimated

fair value is based on discounted cash flows

using prevailing money market interest

rates at which similar deposits and

placmements would be made with financial

institutions of similar credit risk and

remaining period to maturity.

(b) Other short term financial instruments

Other short term financial instruments

comprise interest receivable, payables and

accruals. The carrying values of the assets

and liabilities are assumed to approximate

their fair values due to the short tenure

of less than one year.

CRITICAL ACCOUNTING ESTIMATES

AND JUDGEMENTS IN APPLYING

ACOUNTING POLICIES

The preparation of financial statements in

conformity with FRS requires the use of certain

critical accounting estimates and exercise of

judgement by management in the process of

applying the Company’s accounting policies.

Estimates and judgements are continually

evaluated and are based on historical

experience and other factors, including

expectations of future events that are believed

to be reasonable under the circumstances. The

resulting accounting estimates will, by

definition, seldom equal the related actual

results.


ACCOUNTING POLICIES

(CONTINUED)

(a) Short term deposits

4.

NET ASSETS ATTRIBUTABLE TO

UNITHOLDERS

5.

In accordance with the provisions of the

Master Deed, listed investments and

investments with prices quoted in over the

counter markets or by market makers are

stated at the last traded price on the valuation

date for the purpose of determining Net Asset

Value per unit for creations and cancellations

and for various fee calculation. Net assets

attributable to unitholders represent a liability

in the balance sheet, carried at the redemption

amount that would be payable at the balance

sheet date if the unitholder exercised the right

to redeem unit of the Fund.

12

6. INVESTMENTS

(i) Listed investments are as follows:

QUANTITY NAME OF COUNTER

AGGREGATE

COST

RM

MARKET

VALUE AS AT

30.06.2008

RM

MARKET VALUE

AS AT 30.06.2008

EXPRESSED AS A

PERCENTAGE OF

VALUE OF THE FUND

%

CONSTRUCTIONGamuda BhdMalaysian Resources Corporation BhdWCT Bhd

CONSUMER PRODUCTSBritish American Tobacco (M) BhdPPB Group BhdUMW Holdings Bhd

FINANCEAlliance Finance Group BhdBumiputra-Commerce Holdings BhdMalayan Banking BhdPublic Bank Bhd

INDUSTRIAL PRODUCTSCoastal BhdKNM Group BhdTSH Resources Bhd

INFRASTRUCTUREDiGi.Com BhdLingkaran Trans Kota Holdings Bhd

PLANTATIONSAsiatic Development BhdBousted Holdings BhdIOI Corporation BhdKuala Lumpur Kepong BhdKulim (Malaysia) BhdKwantas Corporation Bhd

PROPERTIESSP Setia BhdYNH Property Bhd

216,461964,883139,816

1,321,160

842,132753,072266,378

1,861,582

570,4401,584,2804,012,0231,643,759

7,810,322

992,934921,584674,769

2,589,287

708,357493,648

1,202,005

1,212,510829,619

4,368,923711,000

1,365,59510,800

8,498,447

400,642423,043

823,685

70,000472,000101,800

20,00067,50075,000

196,800226,000451,250180,000

394,800136,000220,000

69,000150,000

159,000152,400696,00052,450

170,0002,700

100,000140,000

163,800519,200311,508

994,508

885,000729,000450,000

2,064,000

545,1351,808,0003,181,3131,872,000

7,406,448

868,560863,600631,400

2,363,560

1,649,100477,000

2,126,100

1,303,800830,580

5,185,200923,120

1,649,0009,990

9,901,690

294,000246,400

540,400

0.280.890.54

1.71

1.521.250.77

3.54

0.943.105.463.21

12.71

1.491.481.09

4.06

2.830.82

3.65

2.241.438.901.582.830.02

17.00

0.510.42

0.93

13

6. LISTED INVESTMENTS (CONTINUED)

(i) Listed investments are as follows (continued):


AGGREGATE

COST

RM

MARKET

VALUE AS AT

30.06.2008

RM

MARKET VALUE

AS AT 30.06.2008

EXPRESSED AS A

PERCENTAGE OF

VALUE OF THE FUND

%


AGGREGATE

COST

RM

MARKET

VALUE AS AT

31.12.2007

RM

CONSTRUCTIONMalaysian Resources Corporation BhdSunway Holdings BhdWCT Engineering Bhd

CONSUMER PRODUCTSUMW Holdings Bhd

FINANCEAlliance Malaysia BhdAMMB Holdings BhdBumiputra-Commerce Holdings BhdMalayan Banking BhdPublic Bank Bhd

669,000896,600138,900

90,000

86,000303,000356,000295,000150,000

MARKET VALUE

AS AT 31.12.2007

EXPRESSED AS A

PERCENTAGE OF

VALUE OF THE FUND

%

TRADING/SERVICESBerjaya Sports Toto BhdDialog Group BhdGenting BhdKencana Petroleum BhdSime Darby BhdMISC BhdMISC Bhd-ForeignMMC Corporation Bhd* MY E G. Services BhdPLUS Expressways BhdRamunia BhdResorts World BhdSapuraCrest Petroleum BhdTanjong Public Limited CompanyTelekom Malaysia BhdTelekom Malaysia International Bhd

WARRANTS/RIGHTSKNM Group BhdSP Setia BhdVastalux Energy BhdWCT Bhd

319,300157,400

84,400386,000625,000171,800

37,000592,000801,900350,000500,000100,000400,200

22,000390,900340,900

34,00075

282,000476,360

1,330,032244,558446,030795,009

4,028,3501,264,196

330,6992,007,619

690,6881,075,509

740,900293,293518,093313,807624,068

2,676,065

16,688,227

136,00022

211,500139,090

486,612

41,982,677

1,551,798210,916472,640687,080

5,781,2501,417,350

307,1001,633,920

725,720906,500760,000260,000552,276301,400

1,243,0622,096,535

18,907,547

215,90032

211,500247,090

674,522

44,978,775

2.660.360.811.189.922.430.532.811.241.561.300.450.950.522.133.60

32.45

0.370.000.360.43

1.16

77.21

* Mesdaq Trade

1,609,4681,706,273

270,609

3,586,350

973,976

973,976

878,6281,161,0042,419,5853,276,8181,318,634

9,054,669

1,705,9501,649,7441,159,815

4,515,509

1,404,000

1,404,000

451,5001,151,4003,916,0003,392,5001,650,000

10,561,400

2.272.191.54

6.00

1.86

1.86

0.601.535.204.512.19

14.03

14


(ii) Listed investments are as follows (continued):


AGGREGATE

COST

RM

MARKET

VALUE AS AT

31.12.2007

RM

MARKET VALUE AS

AT 31.12.2007

EXPRESSED AS A

PERCENTAGE OF

VALUE OF THE FUND

%

INDUSTRIAL PRODUCTSCoastal BhdTSH Resources BhdWah Seong Corporation Bhd

INFRASTRUCTUREDiGi.Com Berhad

PLANTATIONAlliance Finance GroupAsiatic Development BhdIOI Corporatioin BhdKuala Lumpur Kepong BhdKulim (Malaysia) Bhd

PROPERTYNaim Cendera Holdings BhdSP Setia BhdYNH Property Bhd

TRADING/SERVICESBerjaya Sports Toto BhdGenting BhdKencana Petroleum BhdSime Darby BhdMagnum Corporation BhdMISC BhdMISC Bhd-ForeignMMC Corporation Bhd* MY E.G Services BhdPetra Perdana BhdPLUS Expressways BhdResorts World BhdSapuraCrest Petroleum BhdTanjong Public Limited CompanyTelekom Malaysia BhdTenaga Nasional Bhd

WARRANTS/RIGHTSAMMB Holdings BhdSP Setia BhdWCT Engineering Bhd

394,800276,000200,000

75,000

135,90050,000

500,00088,050

205,000

110,000185,550140,000

307,000372,400506,000610,000265,000252,00067,000

385,000841,000150,000350,000476,000997,00044,000

315,900285,000

37,87530,925

400,000

992,934844,404493,118

2,330,456

769,954

769,954

393,339254,832

2,190,961527,974

1,397,750

4,764,256

584,007673,866423,043

1,680,916

1,197,0041,968,0291,042,1623,733,874

866,4711,854,350

609,0012,647,032

724,366769,547

1,075,5091,258,2441,072,447

627,6143,242,5962,647,910

25,336,156

128,7759,300

120,000

258,075

48,754,808

1,026,480888,720788,000

2,703,200

1,860,000

1,860,000

418,572432,500

3,875,0001,532,0701,629,750

7,887,892

519,200924,039378,000

1,821,239

1,550,3502,941,9601,244,7607,259,000

869,2002,457,000

663,3003,580,500

866,230810,000

1,148,0001,846,8801,575,260

814,0003,538,0802,736,000

33,900,520

128,7759,278

320,000

458,053

65,111,813

1.361.181.05

3.59

2.47

2.47

0.560.575.152.032.16

10.47

0.691.230.50

2.42

2.063.911.659.641.153.260.884.761.151.081.522.452.091.084.703.63

45.01

0.170.010.43

0.61

86.46

* Mesdaq Trade

15

NO. BROKER

VALUE OF

TRADES

RM

PERCENTAGE

OF TOTAL

TRADES

%

BROKERAGE

FEES

RM

PERCENTAGE

OF TOTAL

BROKERAGE

FEES

%

1

2

3

4

5

6

7

8

9

10

RHB Investment Bank Bhd

HLG Securities Sdn Bhd

Hwang-DBS Investment Bhd

Aseambankers Malaysia Bhd

CIMB Investment Bank Bhd

Kenanga Investment Bank Bhd

Affin Investment Bank Bhd

AmInvestment Bank Bhd

MIDF Amanah Investment Bank Bhd

OSK Investment Bank Bhd

17,455,261

6,564,268

4,879,943

4,621,969

4,506,925

3,952,555

3,222,754

3,148,731

2,781,499

2,421,218

53,555,123

32.59

12.26

9.11

8.63

8.42

7.38

6.02

5.88

5.19

4.52

100.00

34,976

13,129

9,771

9,244

9,027

7,932

6,464

6,297

5,563

4,842

107,245

32.61

12.24

9.11

8.62

8.42

7.40

6.03

5.87

5.19

4.51

100.00

Included in transactions with other brokers are trades conducted on normal terms in the

stockbroking industry with RHB Investment Bank Bhd, a company related to the Manager amounting

to RM17,455,261 (30.6.2007: RM118,403,916).

(iii) Transactions with brokers

Details of transactions with all 10 brokers for the financial period ended 30 June 2008 are as

follows:


NO. BROKERVALUE OF

TRADES

RM

PERCENTAGE

OF TOTAL

TRADES

%

BROKERAGE

FEES

RM

PERCENTAGE

OF TOTAL

BROKERAGE

FEES

%

1

2

3

4

5

6

7

8

9

RHB Investment Bank Bhd

Hwang-DBS Investment Bank Bhd

OSK Investment Bank Bhd

HLG Securities Sdn Bhd

AmInvestment Bank Bhd

CIMB Investment Bank Bhd

Aseambankers Malaysia Bhd

Affin Investment Bank Bhd

MIDF Amanah Investment Bank Bhd

38,303,154

12,944,054

12,803,967

10,453,806

10,270,770

8,847,673

7,818,232

7,327,345

7,272,939

116,041,940

33.01

11.16

11.03

9.01

8.85

7.62

6.74

6.31

6.27

100.00

83,766

28,653

27,596

20,834

21,631

19,382

16,216

15,302

15,700

249,080

33.63

11.50

11.08

8.37

8.69

7.78

6.51

6.14

6.30

100.00

Included in transactions with other brokers are trades conducted on normal terms in the stockbroking

industry with RHB Investment Bank Bhd, a company related to the Manager amounting to

RM38,303,154 (31.12.2006: RM118,403,916).

(iii) Transactions with brokers

Details of transactions with the all brokers for the financial year ended 31 December 2007 are as

follows: (Transactions were effected with a total of 9 brokers only)

16

8. OTHER PAYABLES AND ACCRUALS31.12.2007

RM

30.06.2008

RM

9,500

3,800

36,239

49,539


Tax agent’s fee

Sundry payables and accruals

4,750

1,900

16,675

23,325

Interest bearing the earlier of contractual repricing within 1 year

Deposits with licensed financial institution:

- Commercial Banks 9,111,000

9,111,000

7. SHORT TERM DEPOSITS

31.12.2007

RM

12,807,403

12,807,403

30.06.2008

RM

Weighted average effective interest rate

Deposits with licensed financial institution:

- Commercial Banks 3.43

3.43

31.12.2007

%

3.41

3.41

30.06.2008

%

9. NUMBER OF UNITS IN CIRCULATION AND NET ASSETS ATTRIBUTABLE TO

UNITHOLDERS

As at the beginning of the financial period/year

Created during the financial period/year

Released during the financial period/year

Net increase in net assets attributable

to unitholders

Net change in fair value reserve

As at the end of the financial period/year

Approved size of the Fund

90,739,289

60,243

(38,133,686)

12,164,835

10,476,045

75,306,726

113,060,000

65,000

(40,505,000)

-

-

72,620,000

750,000,000

31.12.2007

RMUnits

75,306,726

6,510

(6,248,050)

2,551,121

13,360,907

58,255,400

72,620,000

7,000

(6,302,000)

-

-

66,325,000

750,000,000

30.06.2008

RMUnits

In accordance with the Securities Commission’s approval letter dated 4 June 1998, the maximum

number of units that can be issued out for circulation is 750,000,000. As at 30 June 2008, the number

of units not yet issued is 683,675,000 (31.12.2007: 677,380,000).

17

10. INVESTMENT INCOME

Gross dividends

Interest income

Realised gain on sale of investments

1,086,577

185,707

6,798,739

8,071,023

01.01.2007

to

30.06.2007

RM

01.01.2008

to

30.06.2008

RM

848,811

193,407

2,224,592

3,266,810

Item 10 of Schedule 1 of the Master Deed provides that the Manager shall be entitled at the rate

agreed between the Manager and the Trustee which rate shall not exceed 1.50% of the net asset value

of the Fund, calculated on a daily basis.

The management fee provided in the financial statements amounted to 1.50% per annum based on

the net asset value of the Fund, calculated on a daily basis for the financial period.

11. MANAGEMENT FEE

Item 11 of Schedule 1 of the Master Deed provides that the Trustees’ fee shall not exceed 0.10% of

the net asset value of the Fund but such rate shall not fall below 0.07% of the net asset value of the

Fund calculated on a daily basis in addition to a custodian service fee.

The trustees’ fee provided in the financial statements is 0.07% per annum based on the net asset value

of the Fund, calculated on a daily basis.

12. TRUSTEES’ FEE

13. TAXATION

(a) Tax charge for the financial period

01.01.2007

to

30.06.2007

RM

01.01.2008

to

30.06.2008

RM

Current taxation

Underprovision of tax in prior years

187,000

-

187,000

283,000

469,524

752,524

18

(b) Numerical reconciliation of income tax expenses

The tax on the income before taxation differs from theoretical amount that would arise using the

statutory income tax rate of Malaysia as follows:

1,979,882

(1,877,778)

180,896

283,000

469,524

752,524

711,911

(649,619)

124,708

187,000

-

187,000

Tax calculated at a tax rate of 26% (30.06.2007:27%)

Tax effects of:

- Income not subject to tax

- Expenses not deductible for tax expenses

Tax expense

Underprovision of tax in prior years

2,738,121 7,332,895

01.01.2007

to

30.06.2007

RM

01.01.2008

to

30.06.2008

RM

13. TAXATION (CONTINUED)

14. MANAGEMENT EXPENSE RATIO (‘MER’)

M a n a g e m e n t e x p e n s e r a t i o i n c l u d e s management fee , Trus tees ’ f ee , auditor’s

remuneration, tax agent’s fee and other administrative expenses which is calculated as follows:

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

F

MER

Management fee

Trustees’ fee


Tax agent’s fee

Administrative expenses

Average net asset value of the Fund, calculated on a daily basis

A =

B =

C =

D =

E =

F =

0.820.81

01.01.2007

to

30.06.2007

%

01.01.2008

to

30.06.2008

%

The average net asset value of the Fund for the financial period is RM65,271,219 (30.06.2007:

RM90,227,228).

Income before taxation

19

15. PORTFOLIO TURNOVER

The portfolio turnover for the financial period (times) 0.500.40

The portfolio turnover is derived from the following calculation:

where :

total acquisition for the financial period = RM23,044,382 (30.6.2007: RM36,395,325)

total disposal for the financial period = RM29,816,594 (30.6.2007: RM53,286,522)

(Total acquisition for the financial period + total disposal for the financial period) ÷ 2

Average net asset value of the Fund for the financial period calculated on a daily basis

16. HOLDINGS OF UNITS BY THE MANAGER AND OTHER RELATED PARTIES

The Manager

Cost

RM

No. of

Units

49,75348,741

Other than the above, there were no units held by Directors or parties related to the Manager or

Trustees as at 30 June 2008.

31.12.2007

As at 30 June 2008, the number of units held by the Manager is as follows:

Cost

RM

No. of

Units

888996

30.06.2008

17. SEGMENT INFORMATION

The Fund has only one business activity which is the business of investment management within

Malaysia. Segmental information on investments have been provided in Note 6 to the financial

statements.

01.01.2008

to

30.06.2008

01.01.2007

to

30.06.2007

20

Listed investments

Bank balance

Short term deposits

Amount due from stockbrokers

Interest receivable

Dividend receivable

Tax recoverable

ASSETS

-

-

9,111,000

-

-

-

-

9,111,000

UP TO 1 YEAR

R M

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

65,111,813

50,787

-

2,700,803

2,557

89,527

75,258

68,030,745

1 - 5 YEARS

R M

OVER 5

YEARS

R M

NON -INTEREST

BEARING

R M

65,111,813

50,787

9,111,000

2,700,803

2,557

89,527

75,258

77,141,745

As at 31.12.2007 TOTAL

R M

As interest rates rise, the value of fixed income securities in a unit trust fund’s portfolio is likely to

decrease. Securities with longer duration tend to be more sensitive to changes in interest rates, usually

making them more volatile than securities with shorter duration.

Interest sensitivity of financial assets and financial liabilities items are as follows :

Listed investments

Bank balance

Short term deposits

Amount due from

stockbrokers

Interest receivable

Dividend receivable

Tax recoverable

18. INTEREST RATE RISK

ASSETS





Total interest

sensitivity gap

LIABILITIES

As at 30.06.2008

-

-

12,807,403

-

-

-

-

12,807,403

UP TO 1 YEAR

R M

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

44,978,775

10,087

-

962,045

4,260

58,694

-

46,013,861

1 - 5 YEARS

R M

OVER 5

YEARS

R M

NON -INTEREST

BEARING

R M

44,978,775

10,087

12,807,403

962,045

4,260

58,694

-

58,821,264

-

-

-

-

-

12,807,403

-

-

-

-

-

-

-

-

-

-

-

-

221,027

3,435

318,077

23,325

565,864

221,027

3,435

318,077

23,325

565,864

TOTAL

R M

21

18. INTEREST RATE RISK (CONTINUED)





Total interest

sensitivity gap

LIABILITIES

-

-

-

-

-

9,111,000

-

-

-

-

-

-

-

-

-

-

-

-

1,370,438

4,439

410,604

49,539

1,835,020

1,370,438

4,439

410,604

49,539

1,835,020

The summary of weighted average interest rates per annum for each class of financial asset is as

follows:

Financial assets

Short term deposits

31.12.2007

%

3.43

30.06.2008

%

3.41

UP TO 1 YEAR

R M

1 - 5 YEARS

R M

OVER 5

YEARS

R M

NON -INTEREST

BEARING

R M

TOTAL

R M

19. CREDIT RISK

Credit and counter party risk is defined as the possibility of losses due to an unexpected default or due

to a deterioration of a business partner’s creditworthiness.

A unit trust fund could lose money if the issuer or guarantor of a fixed income security is unable or

unwilling to make timely principal and/or interest payments, or to otherwise honour its obligations.

Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings.

The following table sets out the credit risk concentration of the Fund:

As at 30.06.2008

Finance

Construction

Consumer Product

Industrial Product

Infrastructure

Property

Trading/Services

Plantation

TSR/Warrants/Rights

Others

LISTED

INVESTMENTS

RMTOTAL

RM

DIVIDEND

RECEIVABLE

RM

7,406,448

994,508

2,064,000

2,363,560

2,126,100

540,400

18,907,547

9,901,690

674,522

-

44,978,775

-

4,191

-

-

7,770

-

26,070

20,663

-

-

58,694

20,223,938

998,699

2,064,000

2,363,560

2,133,870

540,400

18,933,617

9,922,353

674,522

966,305

58,821,264

OTHER

ASSETS

RM

-

-

-

-

-

-

-

-

-

4,260

4,260

-

-

-

-

-

-

-

-

-

962,045

962,045

AMOUNT DUE

FROM

STOCKBROKERS

RM

CASH

BALANCE AND

DEPOSITS

RM

12,817,490

-

-

-

-

-

-

-

-

-

12,817,490

As at 31.12.2007

22

LISTED

INVESTMENTS

RM

As at 31.12.2007 TOTAL

RM

DIVIDEND

RECEIVABLE

RM

Finance

Construction

Consumer Product

Industrial Product

Infrastructure

Property

Trading/Services

Plantation

Warrant/Rights

Others

10,561,400

4,515,509

1,404,000

2,703,200

1,860,000

1,821,239

33,900,520

7,887,892

458,053

-

65,111,813

37,686

-

-

-

-

-

51,841

-

-

-

89,527

19,763,430

4,515,509

1,404,000

2,703,200

1,860,000

1,821,239

33,952,361

7,887,892

458,053

2,776,061

77,141,745

OTHER

ASSETS

RM

-

-

-

-

-

-

-

-

-

77,815

77,815

-

-

-

-

-

-

-

-

-

2,700,803

2,700,803

AMOUNT DUE

FROM

STOCKBROKERS

RM

CASH

BALANCE AND

DEPOSITS

RM

9,161,787

-

-

-

-

-

-

-

-

-

9,161,787

19. CREDIT RISK (CONTINUED)

Fair value is the amount at which a financial asset could be exchanged or a financial liability settled,

between knowledgeable and willing parties in an arm’s length transaction. Other than investments,

the fair values of the other balance sheet items are not materially sensitive to shifts in market interest

rates because of the limited term to maturity of these instruments. Listed investments and fixed

income securities are already carried at fair value in the financial statements. As such, the carrying

amounts of financial assets and financial liabilities approximate their fair values.

The following methods and assumptions were used to estimate the fair value:

a) Listed investments and unlisted fixed income securities

The fair value of the listed investments and fixed income securities is taken to equate their aggregate

cost and carrying values, as the investments are marked-to-market.

b) Short term deposits

The fair values of short term deposits is taken to approximate their carrying values as the

maturities are less than six months.

20. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

23

We have acted as Trustee of RHB Dynamic Fund for the financial period ended 30 June

2008. In our opinion, RHB Investment Management Sdn Bhd, has managed the Fund in the

period under review in accordance with the following:

1. The limitations imposed on the investment powers of the Management Company and the

Trustee under the Master Deed, the Guidelines on Unit Trust Funds, the Capital Markets

and Services Act 2007 and other applicable laws;

2. The valuation or pricing of the Fund are carried out in accordance with the Master Deed and

any regulatory requirements; and

3. The creation and cancellation of units of the Fund are carried out in accordance with the

Master Deed and any regulatory requirements.

MAYBAN TRUSTEES BERHAD

(Company No: 5004P)

TRACY HAZEL SIGUJI

HEAD, UNIT TRUST

Kuala Lumpur

TRUSTEE’S REPORT

REBATES AND SOFT COMMISSIONS

Any rebate on brokerage fees is to be credited into the accounts of the Fund. Soft

commissions received from brokers are retained by the management company only if the goods

and services provided are of demonstrable benefits to the unitholders of the scheme as

per the requirements of Clause 11.33 and 11.34 of the Guidelines on Unit Trust Funds as

issued by the Securities Commission on 3 May 2008.

During the period under review, the Manager did not receive or utilise any soft commissions

from brokers/dealers in consideration for directing dealings in the investment of the

Fund. However, in the event the Manager were to receive any soft commissions in the

future, these will only be retained by the Manager if they are in the form of goods and

services which are of demonstrable benefits to the unitholders.

STATEMENT BY MANAGER

We, Dato’ Mohamed Khadar Merican and Sharifatul Hanizah Said Ali, two of the Directors

of RHB Investment Management Sdn Bhd, do hereby state that in the opinion of the

Directors of the Manager, the accompanying financial statements set out on pages 6 to 22

are drawn up in accordance with the provision of the Master Deed and give a true and

fair view of the state of affairs of the Fund as at 30 June 2008 and of its results, changes

in net asset value and cash flow of the Fund for the financial period ended on that date

in accordance with the MASB Approved Accounting Standards in Malaysia for Entities

Other than Private Entities and the Securities Commission’s Guidelines on Unit Trust

Funds.

On behalf of the Manager

DATO’ MOHAMED KHADAR MERICAN SHARIFATUL HANIZAH SAID ALI

DIRECTOR DIRECTOR

Kuala Lumpur

24

AUDITORS & REPORTING ACCOUNTANTSPricewaterhouseCoopers10th Floor, 1 SentralJalan TraversKL Sentral50706 Kuala Lumpur

TAX ADVISERSPricewaterhouseCoopersTaxation Services Sdn Bhd15th Floor, 1 SentralJalan TraversKL Sentral50706 Kuala Lumpur

BANKERSRHB Bank BerhadKL Main OfficeRHB CentreJalan Tun Razak50400 Kuala Lumpur

Malayan Banking BerhadKL Main OfficeMenara Maybank100, Jalan Tun Perak50050 Kuala Lumpur

INSTITUTIONAL UNIT TRUST AGENTSRHB Bank BerhadStandard Chartered Bank Malaysia Berhad

TRUSTEEMayban Trustees Berhad34th Floor, Menara Maybank100, Jalan Tun Perak50050 Kuala Lumpur

SOLICITORSoon Gan Dion & Partners1st Floor, No. 19, Jalan SS21/56BDamansara Utama47400 Petaling JayaSelangor Darul Ehsan

BRANCHES

• Northern Regional Office44, Level 4, Lebuh PantaiGeorgetown, 10300 Penang

Southern Regional Office58B, Jalan Molek 2/2Taman Molek81100 Johor Bahru, Johor Darul Takzim

• Sabah Regional Office1st Floor, Lot 319Block 3, Api-Api CentreJalan Centre Point88000 Kota Kinabalu, Sabah

• Sarawak Regional OfficeLot 7418, 1st FloorJalan Simpang Tiga93300 Kuching, Sarawak

•

• Kuala Lumpur Branch Office1st & 2nd Floor, Lot 10, Block JKuala CityviewNo. 10, Jalan 4/93AWarisan CityviewOff Batu 2 1/2, Jalan Cheras56100 Kuala Lumpur

CORPORATE INFORMATION

(WITH EFFECT FROM 1 JANUARY 2008)

MANAGERRHB Investment Management Sdn Bhd

(formerly known as RHB Asset Management Sdn Bhd)

REGISTERED OFFICELevel 10, Tower One, RHB Centre

Jalan Tun Razak, 50400 Kuala Lumpur

BUSINESS OFFICE AND OFFICE OF THE REGISTRARLevel 7, Tower One,

RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur

BOARD OF DIRECTORSDato’ Mohamed Khadar Merican (Independent Non-Executive Chairman)

Tan Sri Dato’ Haji Hanafiah bin Haji Ahmad (Independent Non-Executive Director)Dato’ Othman Jusoh (Independent Non-Executive Director)

Haji Khairuddin bin Ahmad (Independent Non-Executive Director)Chay Wai Leong (Non-Independent Non-Executive Director)

Michael Lim Kheng Boon (Non-Independent Non-Executive Director)Sharifatul Hanizah Said Ali (Managing Director)

INVESTMENT COMMITTEE MEMBERSHaji Khairuddin bin Ahmad (Independent Chairman)

Dato’ Othman Jusoh (Independent Member)Chay Wai Leong (Non-Independent Member)

Michael Lim Kheng Boon (Non-Independent Member)Sharifatul Hanizah Said Ali (Non-Independent Member)

MANAGING DIRECTORSharifatul Hanizah Said Ali

SECRETARYAzman Shah bin Md Yaman (LS No. 006901)

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