kenanga global dividend fund · 2016. 6. 29. · ii kenanga global dividend fund annual report...

ANNUAL REPORT

For the Financial Year Ended 30 April 2016

KENANGA GLOBAL DIVIDEND FUND

KENANGA GLOBAL DIVIDEND FUND

Contents Page

Corporate Directory ii

Directory of Manager’s Offi ces iii

Fund Information 1

Manager’s Report 2 - 5

Fund Performance 6 - 9

Trustee’s Report 10

Independent Auditor’s Report 11 - 12

Statement by the Manager 13

Financial Statement 14 - 35

Kenanga Global Dividend Fund Annual Reportii

CORPORATE DIRECTORY

MANAGER: KENANGA INVESTORS BERHAD (Company No. 353563-P) REGISTERED OFFICE BUSINESS OFFICEKenanga Investors Berhad (KIB) Suite 12.02, 12th Floor, Kenanga International,8th Floor, Kenanga International, Jalan Sultan Ismail,Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.50250 Kuala Lumpur, Malaysia. Tel: 03-2057 3688Tel: 03-2162 1490 Fax: 03-2161 8807Fax: 03-2161 4990 E-mail: [email protected] Website: www.KenangaInvestors.com.my

BOARD OF DIRECTORS INVESTMENT COMMITTEEDatuk Syed Ahmad Alwee Alsree Dato’ Bruce Kho Yaw Huat (Chairman) (Chairman)Syed Zafi len Syed Alwee Syed Zafi len Syed Alwee (Independent Director) (Independent Member)Peter John Rayner Peter John Rayner (Independent Director) (Independent Member)Imran Devindran bin Abdullah Imran Devindran bin Abdullah(Independent Director) (Independent Member)Dato’ Bruce Kho Yaw Huat Ismitz Matthew De AlwisIsmitz Matthew De Alwis

COMPANY SECRETARY: NORLIZA ABD SAMAD (MAICSA 7011089)9th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.Tel: 03-2162 1490 Fax: 03-2161 4990 TRUSTEE: CIMB COMMERCE TRUSTEE BERHAD (Company No. 313031-A) REGISTERED OFFICE BUSINESS OFFICE Level 13, Menara CIMB Level 21, Menara CIMBJalan Stesen Sentral 2 Jalan Stesen Sentral 2Kuala Lumpur Sentral Kuala Lumpur Sentral50490 Kuala Lumpur. 50490 Kuala Lumpur.Tel: 03-2261 8888 Tel: 03-2261 8888Fax: 03-2261 0099 Fax: 03-2261 9889Website: www.cimb.com

AUDITOR: ERNST & YOUNG (AF: 0039)Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

TAX ADVISER: ERNST & YOUNG TAX CONSULTANTS SDN BHD (Company No. 179793-K)Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

MEMBERSHIP: FEDERATION OF INVESTMENT MANAGERS MALAYSIA (FIMM)19-06-1, 6th Floor, Wisma Tune, 19, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia. Tel: 03-2093 2600 Fax: 03-2093 2700 Website: www.fi mm.com.my

Kenanga Global Dividend Fund Annual Report iii

DIRECTORY OF MANAGER’S OFFICES

REGIONAL BRANCH OFFICES:

Kuala LumpurSuite 12.02, 12th FloorKenanga InternationalJalan Sultan Ismail50250 Kuala Lumpur, MalaysiaTel : 03-2057 3688 Fax : 03-2161 8807

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

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

Penang16th Floor, Menara Boustead Penang 39, Jalan Sultan Ahmad Shah 10050 PenangTel : 04-227 3788 / 04-210 6644 Fax : 04-226 5120

Seremban 2nd Floor, No. 1D-2, Jalan Tuanku Munawir 70000 Seremban, Negeri Sembilan Tel : 06-761 5678 Fax : 06-761 2243

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

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

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

IpohSuite 1, 2nd Floor,63, Persiaran Greenhill,30450 Ipoh, Perak, MalaysiaTel : 05-254 7573 / 7570 Fax : 05-254 7606

Miri 2nd Floor, Lot 1264, Centre Point Commercial Centre, Jalan Melayu, 98000 Miri, Sarawak Tel : 085-416 866 Fax : 085-322 340

Kenanga Global Dividend Fund Annual Report1

1. FUND INFORMATION

1.1 Fund Name

Kenanga Global Dividend Fund (KGDF or the Fund)

1.2 Fund Category / Type

Feeder / Growth

1.3 Investment Objective

The Fund aims to achieve capital growth by investing in a diversifi ed portfolio of high dividend–yielding equities globally through a target fund.

1.4 Investment Strategy

The Fund will invest a minimum of 95% of its Net Asset Value (NAV) in NN (L) Global High Dividend (NNGHD) (formerly known as ING (L) Invest Global High Dividend (IIGHD)) domiciled in Luxembourg. The remaining will be invested in liquid assets including money market instruments and deposits with licensed fi nancial institutions which will enable the Manager to fulfi l investors’ redemption requests.

1.5 Duration

The Fund was launched on 19 March 2007 and it shall exist as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue.

1.6 Performance Benchmark

MSCI World AC Index

1.7 Distribution Policy

Income (if any) will be distributed annually on the best effort basis.

1.8 Breakdown of unit holdings of KGDF as at 30 April 2016

Size of holdings No. of unitholders No. of units held 5,000 and below 0 0 5,001 - 10,000 49 488,692 10,001-50,000 105 2,423,537 50,001-500,000 26 3,214,747 500,001 and above 8 17,763,631 Total 188 23,890,607

Kenanga Global Dividend Fund Annual Report 2

2. MANAGER’S REPORT

2.1 Explanation on whether the Fund has achieved its investment objective.

For the fi nancial year under review, the Fund fulfi lled its investment objective, having invested in a diversifi ed portfolio of global high dividend yielding equities through a target fund.

2.2 Comparison between the Fund’s performance and performance of the benchmark.

Performance Chart Since Launch (19/03/2007– 30/4/2016)Kenanga Global Dividend Fund vs MSCI World AC Index

Source: Novagni Analytics and Advisory Sdn Bhd

2.3 Investment strategies and policies employed during the fi nancial year under review.

For the fi nancial year under review, the Fund invested 96.0% of its net asset value in NN (L) Global High Dividend which is a fund denominated in Euro and domiciled in Luxembourg in line with its investment strategy and policy. The remaining was invested in liquid assets including money market instruments and deposits with licensed fi nancial institutions.

2.4 The Fund’s asset allocation as at 30 April 2016 and comparison with the previous fi nancial year.

Asset 30 Apr 2016 30 Apr 2015 Collective investment scheme - foreign 96.0% 96.2% Short term deposits and cash 4.0% 3.8%

Reason for the differences in asset allocation

There is no signifi cant difference in the asset allocation from the previous fi nancial year under review.


2.5 Fund performance analysis based on NAV per unit (adjusted for income distribution; if any) since last review period.

Period under review Kenanga Global Dividend Fund 0.48% MSCI World Index 1.40%

Source: Lipper

For the fi nancial year under review, the Fund registered a return of 0.48% underperforming its benchmark which returned 1.40%. The underperformance was due to unfavourable asset allocation and stock selection of the target fund.

2.6 Review of the market

Market Review

Global equities declined 4.2% in US dollar terms over the 12-month reporting period. The decline came largely from two bouts of volatility. The fi rst was in the summer when worries about the slowdown in China sparked a sell-off in global equity markets before central bank support – or expectation of support – helped markets to pare a large part of the losses. The second bout came in the second half of the period and was triggered by concerns about US growth, China, declining oil prices, and credit spreads. This time, the market made a strong comeback thanks to recovering commodity prices as well as accommodative central bank actions. The best performing markets were the US (-0.2%) and Japan (-6.1%); Europe (-10.1%), Developed Asia-Pacifi c ex Japan (-11.3%) and Emerging Markets (-17.9%) all lagged. Commodity-based sectors Energy (-15.6%) and Materials (-9.6%) were the largest underperformers, followed by Financials (-9.4%). The outperforming sectors were Consumer Staples (+7.1%), Utilities (+4.4%) and Telecoms (+1.9%).

In Europe a Greek exit from the Eurozone was again a real possibility. However, despite fears to the contrary, the Greek people responded positively in a national referendum to the new bailout terms of Greece’s debt creditors. The ECB expanded its monetary stimulus by extending its asset-buying programme, lowering its deposit rate, and raising the amount of monthly asset purchases by €20bn to €80bn. More signifi cantly it widened the scope of its purchases to non-fi nancial investment grade corporate bonds.

After months of speculation the Fed’s fi rst rate hike since 2006 fi nally became a reality in December. The US central bank raised the target funds rate range by 0.25%. The Fed pointed to increasing household spending and business fi xed investment, and an improving housing sector and labour market. The rate hike was widely anticipated and the focus of markets was already on the pace of rate hikes in 2016.


2.6 Review of the market (Contd.)

Market Review (Contd.)

The People’s Bank of China made a surprise devaluation of the yuan in the fi rst half of the period. The move spooked markets, which interpreted the move as a negative sign. More positively, however, were comments from IMF Managing Director Christine Lagarde, who gave credit to the reforms taking place in China following the inclusion of the yuan in the IMF’s basket of reserve currencies. In Japan the central bank stepped up its efforts to revive economic growth by adopting negative interest rates.

Market Outlook and Current Strategy

Although expectations of Fed rate hikes in 2016 have moderated, it is clear that the Fed is in a different phase of the monetary cycle than the ECB and Bank of Japan. That said, we expect ‘dovish’ or ‘hawkish’ comments from the Fed will continue to have an infl uence on markets in the short term. The recent rebound in oil and commodity prices is helping to increase risk sentiment and relieve stressed segments of the market. It’s a clear positive for Value investors and a further stabilization might lead to a sustained tailwind for the style.

Financial stocks combine attractive valuations, high and growing dividend yields, and offer direct exposure to the consumption recovery in Europe. While we acknowledge that the sector continues to face challenges, we believe that these are fully refl ected at current price levels. Relative valuations for the sector are now below the levels of 2000 and 2008, which we believe is out of line with the improvement in return on equity and risk profi le of the sector. We ought not to forget that banks have passed stress tests, have been recapitalized and are now better regulated. Negative interest rates are an issue for banks, but increasingly we see more signals that central bankers are becoming aware of this. In Japan the central bank stated openly it would not lower negative rates further before they have a better view on banks’ profi ts in this environment.

We continue to underweight ‘expensive defensives’ whose valuations are too high from a fundamental perspective in our view. Expensive quality-growth industries could start to lose their leadership once it becomes clear we are entering a new phase in the cycle driven by the Fed’s monetary tightening.

Source: NN Investment Partners


2.7 Income Distribution

For the fi nancial year under review, the Fund did not declare any income distribution.

2.8 Details of any unit split exercise

The Fund did not carry out any unit split exercise during the fi nancial year under review.

2.9 Signifi cant changes in the state of affair of the Fund during the fi nancial year

There were no signifi cant changes in the state of affair of the Fund during the fi nancial year and up until the date of the manager’s report, not otherwise disclosed in the fi nancial statements.

2.10 Circumstances that materially affect any interests of the unitholders

During the fi nancial year under review, there are no circumstances that materially affect any interests of the unitholders.

2.11 Rebates & Soft commissions

Any rebates received are channeled back to the Fund. On the other hand, soft commissions received from the stockbrokers for goods and services such as technical analysis software, fundamental database, fi nancial wire services, stock quotation system and portfolio management software incidental to investment management of the Fund shall be retained by the Manager. For the fi nancial year under review, the Manager did not receive any rebates or soft commissions from stockbrokers.


3. FUND PERFORMANCE

3.1 Details of portfolio composition of Kenanga Global Dividend Fund (“the Fund”) for the last 3 fi nancial years as at 30 April are as follows:

a. Distribution among industry sectors and category of investments:

FY FY FY 2016 2015 2014 % % % Collective investment scheme - foreign 96.0 96.2 96.6 Short term deposits and cash 4.0 3.8 3.4 100.0 100.0 100.0

Note: The above mentioned percentages are based on total investment market value plus cash.

b. Distribution among markets

At 30 April 2016, the target fund NN (L) Global High Dividend (formerly known as ING (L) Invest Global High Dividend) has invested in the following markets:



3.1 Details of portfolio composition of Kenanga Global Dividend Fund (“the Fund”) for the last 3 fi nancial years as at 30 April are as follows: (Contd.)

c. Distribution among industry sectors

At 30 April 2016, the target fund NN (L) Global High Dividend (formerly known as ING (L) Invest Global High Dividend) has invested in the following sectors.



3.2 Performance details of the Fund for the last 3 fi nancial years ended 30 April are as follows:

FY FY FY 2016 2015 2014

Net asset value (“NAV”) (RM Million) 11.01* 13.51 17.98 Units in circulation (Million) 23.89 29.45 43.25 NAV per unit (RM) 0.4609* 0.4587 0.4158 Highest NAV per unit (RM) 0.5231 0.4711 0.4159 Lowest NAV per unit (RM) 0.4183 0.3876 0.3439 Total return (%) 0.48 10.32 19.48 - Capital growth (%) 0.48 10.32 19.48 - Income growth (%) - - - Gross distribution per unit (sen) - - - Net distribution per unit (sen) - - - Management expense ratio (“MER”) (%) 1 0.64 0.68 0.55 Portfolio turnover ratio (“PTR”) (times) 2 0.50 0.62 2.52

Note: Total return is the actual return of the Fund for the respective fi nancial years, computed based on NAV per unit and net of all fees.

MER is computed based on the total fees and expenses incurred by the Fund divided by the average fund size calculated on a daily basis. PTR is computed based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis.

Above NAV and NAV per unit are not shown as ex-distribution as there was no distribution declared by the Fund in the current fi nancial year under review.

1 MER is lower against previous fi nancial year mainly due to decrease in total expenses during the fi nancial year under review.

2 The lower PTR was mainly due to lower unit creation/redemption request.

* The NAV and NAV price per unit are valued based on bid price fair valuation method.


3.3 Average total return of the Fund

1 Year 3 Years 5 Years 30 Apr 15 30 Apr 13 30 Apr 11 -30 Apr 16 -30 Apr 16 -30 Apr 16

Kenanga Global Dividend Fund 0.48% 10.81% 8.78% MSCI World AC Index 1.40% 13.40% 9.81%

Source: Lipper

3.4 Annual total return of the Fund

Period under review 1 Year 1 Year 1 Year 1 Year 30 Apr 15 30 Apr 14 30 Apr 13 30 Apr 12 30 Apr 11 -30 Apr 16 -30 Apr 15 -30 Apr 14 -30 Apr 13 -30 Apr 12

Kenanga Global Dividend Fund 0.48% 10.32% 19.48% 12.48% -3.40% MSCI World AC Index 1.40% 14.92% 22.72% 14.70% -4.80%

Source: Lipper

Investors are reminded that past performance is not necessarily indicative of future performance. Unit prices and investment returns may fl uctuate.


4 TRUSTEE’S REPORT TO THE UNITHOLDERS OF KENANGA GLOBAL DIVIDEND FUND

We, CIMB COMMERCE TRUSTEE BERHAD (“the Trustee”), being the Trustee of KENANGA GLOBAL DIVIDEND FUND (“the Fund”) are of the opinion that KENANGA INVESTORS BERHAD (“the Manager”), acting in the capacity of Manager of the Fund, has fulfi lled its duties in the following manner for the fi nancial year ended 30 April 2016.

a) The Fund has been managed in accordance with the limitations imposed on the

investment powers of the Manager and the Trustee under the Deed, the Securities Commission Malaysia’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 (as amended from time to time) and other applicable laws;

b) Valuation/pricing of units of the Fund has been carried out in accordance with the Deed and relevant regulatory requirements; and

c) Creation and cancellation of units have been carried out in accordance with the Deed

and relevant regulatory requirements.

For and on behalf of CIMB COMMERCE TRUSTEE BERHAD LEE KOOI YOKE Chief Operating Offi cer

Kuala Lumpur, Malaysia

27 June 2016


5 INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF KENANGA GLOBAL DIVIDEND FUND

Report on the fi nancial statements

We have audited the fi nancial statements of Kenanga Global Dividend Fund (“the Fund”), which comprise the statement of fi nancial position as at 30 April 2016 and the statement of comprehensive income, statement of changes in net asset value and statement of cash fl ows for the fi nancial year then ended, and a summary of signifi cant accounting policies and other explanatory information, as set out on pages 14 to 35.

Manager’s and Trustee’s responsibility for the fi nancial statements and fair presentation

The Manager of the Fund is responsible for the preparation of fi nancial statements so as to 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 fi nancial statements that are free from material misstatement, whether due to fraud or error. 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 fi nancial statements.

Auditors’ responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Fund’s preparation of fi nancial statements that give a true and fair view 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Manager, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.


5 INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF KENANGA GLOBAL DIVIDEND FUND (CONTD.)

Opinion

In our opinion, the fi nancial statements give a true and fair view of the fi nancial position of the Fund as at 30 April 2016 and of its fi nancial performance, changes in net asset value and cash fl ows for the fi nancial year then ended in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards.

Other matters

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.

Ernst & Young Chan Hooi Lam AF: 0039 No. 2844/02/18(J) Chartered Accountants Chartered Accountant


27 June 2016


6. STATEMENT BY THE MANAGER

I, Ismitz Matthew De Alwis, being a director of Kenanga Investors Berhad, do hereby state that, in the opinion of the Manager, the accompanying statement of fi nancial position as at 30 April 2016 and the related statement of comprehensive income, statement of changes in net asset value and statement of cash fl ows for the fi nancial year ended 30 April 2016 together with notes thereto, 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 fi nancial position of Kenanga Global Dividend Fund as at 30 April 2016 and of its fi nancial performance and cash fl ows for the fi nancial year then ended and comply with the requirements of the Deed.

For and on behalf of the Manager Kenanga Investors Berhad

Ismitz Matthew De Alwis Executive Director/Chief Executive Offi cer


27 June 2016


7. FINANCIAL STATEMENT

7.1 STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 APRIL 2016

Note 2016 2015 RM RM

INVESTMENT INCOME

Interest income 19,501 22,558 Net gain from investments: - Financial assets at fair value through profi t or loss (“FVTPL”) 4 242,594 1,691,279 262,095 1,713,837

EXPENSES

Manager’s fee 5 51,250 59,099 Trustee’s fee 6 11,356 13,656 Auditors’ remuneration 8,500 11,000 Tax agent’s fee 4,100 4,650 Administration expenses 14,144 15,951 89,350 104,356

NET INCOME BEFORE TAX 172,745 1,609,481

Income tax 7 - -

NET INCOME AFTER TAX, REPRESENTING TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR 172,745 1,609,481

Net income after tax is made up as follows: Realised gain 1,132,981 908,694 Unrealised (loss)/gain 4 (960,236) 700,787 172,745 1,609,481

The accompanying notes form an integral part of the fi nancial statements.



7.2 STATEMENT OF FINANCIAL POSITION AS AT 30 APRIL 2016

Note 2016 2015 RM RM

INVESTMENTS

Financial asset at FVTPL 4 10,174,681 13,042,827 Short term deposits 8 413,522 503,694 10,588,203 13,546,521

OTHER ASSETS

Amount due from Manager 434,463 - Other receivable 9 36 44 Cash at bank 11,227 7,200 445,726 7,244

TOTAL ASSETS 11,033,929 13,553,765

LIABILITIES

Amount due to Manager - 22,751 Amount due to Trustee 713 958 Other payables 10 21,722 19,929 TOTAL LIABILITIES 22,435 43,638 EQUITY

Unitholders’ contribution 46,256,453 48,927,831 Accumulated losses (35,244,959) (35,417,704) NET ASSET VALUE (“NAV”) ATTRIBUTABLE TO UNITHOLDERS 11 11,011,494 13,510,127 TOTAL EQUITY AND LIABILITIES 11,033,929 13,553,765 NUMBER OF UNITS IN CIRCULATION 11(a) 23,890,607 29,451,585 NET ASSET VALUE PER UNIT (RM) 0.4609 0.4587



7.3 STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE FINANCIAL YEAR ENDED 30 APRIL 2016

Unitholders’ Retained Total Note contribution earnings NAV

RM RM RM

2016 At beginning of the fi nancial year 48,927,831 (35,417,704) 13,510,127 Total comprehensive income - 172,745 172,745 Creation of units 11(a) 6,923,856 - 6,923,856 Cancellation of units 11(a) (9,361,645) - (9,361,645) Distribution equalisation 11(a) (233,589) - (233,589) At end of the fi nancial year 46,256,453 (35,244,959) 11,011,494

2015 At beginning of the fi nancial year 55,008,939 (37,027,185) 17,981,754 Total comprehensive income - 1,609,481 1,609,481 Creation of units 11(a) 8,089,908 - 8,089,908 Cancellation of units 11(a) (14,001,244) - (14,001,244) Distribution equalisation 11(a) (169,772) - (169,772) At end of the fi nancial year 48,927,831 (35,417,704) 13,510,127


7.4 STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 APRIL 2016

2016 2015 RM RM

CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES

Proceeds from sale of fi nancial assets at FVTPL 8,620,740 13,150,000 Interest from deposits received 19,509 22,567 Tax agent’s fee paid (3,500) (4,150) Auditors’ remuneration paid (8,500) (8,500) Trustee’s fee paid (11,601) (14,178) Payments for other fees and expenses (12,951) (10,922) Manager’s fee paid (52,550) (60,618) Purchase of fi nancial assets at FVTPL (5,510,000) (7,140,000) Net cash generated from operating and investing activities 3,041,147 5,934,199

CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from units created 6,579,217 8,138,163 Cash paid on units cancelled (9,706,509) (14,221,902) Net cash used in fi nancing activities (3,127,292) (6,083,739) NET DECREASE IN CASH AND CASH EQUIVALENTS (86,145) (149,540) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 510,894 660,434 CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 424,749 510,894 Cash and cash equivalents comprise: Cash at bank 11,227 7,200 Short term deposits 413,522 503,694 424,749 510,894



7.5 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 APRIL 2016

1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES

Kenanga Global Dividend Fund (“the Fund”) was constituted pursuant to the executed Deed dated 6 February 2007 (collectively, together with deeds supplemental thereto, referred to as (“the Deed”) between the Manager, Kenanga Funds Berhad, and CIMB Commerce Trustee Berhad (“the Trustee”). The Fund commenced operations on 19 March 2007 and will continue to be in operation until terminated by the Trustee as provided under Part 12 of the Deed.

Pursuant to the executed First Supplemental Deed dated 15 May 2013 between Kenanga Investors Berhad and CIMB Commerce Trustee Berhad, Kenanga Investors Berhad was appointed as the Manager of the Fund with effect from 8 June 2013.

Kenanga Investors Berhad is a wholly-owned subsidiary of Kenanga Investment Bank Berhad, which in turn is a wholly-owned subsidiary of K & N Kenanga Holdings Berhad that is listed on the Main Market of Bursa Malaysia Securities Berhad. All of these companies are incorporated in Malaysia.

The principal place of business of the Manager is Suite 12.02, 12th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur.

The Fund aims to achieve capital growth by investing in a diversifi ed portfolio of high dividend-yielding equities globally through a target fund. To achieve the objective of the Fund, it will invest a minimum 95% of its funds in NN (L) Global High Dividend (“NNGHD”), a fund which is managed by NN Investment Partners Luxembourg S.A. (“NNIP”) denominated in Euro (“EUR”), domiciled in Luxembourg. The remaining funds will be invested in liquid assets including money market instruments and deposits with licensed fi nancial institutions. NNGHD invests in a diversifi ed portfolio of securities issued by companies established, listed or traded in various countries worldwide and offering an attractive dividend yield.

The fi nancial statements were authorised for issue by the Chief Executive Offi cer of the Manager on 27 June 2016.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

To the extent the Fund invests in NNGHD, which has investment in global equities, it is exposed to market risk (which includes interest rate risk, price risk and currency risk) and credit risk.

The Manager monitors the portfolio of NNGHD to ensure that the underlying fund is positioned to meet its investment objectives. The Manager may seek alternative collective investment schemes or any permissible instruments that are consistent with the objective of the Fund.


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) a. Market Risk Market risk is the risk that the fair value or future cash fl ows of a fi nancial instrument

will fl uctuate because of changes in market prices. Market risk includes interest rate risk, price risk and currency risk.

Market risk arises when the value of the fi nancial instruments fl uctuates in response to the activities of individual companies, general market or economic conditions. It stems from the fact that there are economy-wide perils, which threaten all businesses. Hence, investors are exposed to market uncertainties. Fluctuation in the investment’s price caused by uncertainties in the economic, political and social environment will affect the NAV of the Fund.

i. Interest rate risk

The Fund has minimal exposure to interest rate risk as placements with licensed fi nancial institutions are short term in nature and have fi xed interest rates. In addition, the Fund has indirect exposure to interest rate risk through NNGHD.

ii. Price risk

Price risk is the risk of unfavourable changes in the fair value of foreign collective investment scheme. The Fund invests in a foreign collective investment scheme which is exposed to price fl uctuations. This may then affect the NAV per unit of the Fund.

Price risk sensitivity

The Manager’s best estimate of the effect on the profi t for the fi nancial year due to a reasonably possible change in investments in foreign collective investment scheme with all other variables held constant is indicated in the table below:

Effects on profi t for Changes in price the fi nancial year Increase/(decrease) Increase/(decrease) Basis points RM

2016 Collective investment scheme - foreign 5/(5) 5,087/(5,087) 2015 Collective investment scheme - foreign 5/(5) 6,521/(6,521)

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


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) a. Market Risk (Contd.) ii. Price risk (Contd.) Price risk concentration

The following table sets out the Fund’s exposure and concentration to price risk based on its portfolio of fi nancial instruments as at the reporting date.

Fair value Percentage of NAV 2016 2015 2016 2015 RM RM % % Collective investment scheme - foreign 10,174,681 13,042,827 92.4 96.5

iii. Currency risk

Currency risk is the risk that the fair value or future cash fl ows of a fi nancial instrument will fl uctuate because of changes in foreign exchange rates.

When the foreign currencies fl uctuate in an unfavorable movement against Ringgit, the investment face currency loss in addition to capital gain/(loss). This will lead to lower NAV of the Fund.

The Fund invests a minimum 95% in NNGHD, denominated in EUR and domiciled in Luxembourg. The Manager may consider managing the currency risk using currency hedging. However, this would be subject to the current market outlook on the currency exposure risk as well.

Currency risk sensitivity

The Fund did not have any fi nancial liabilities denominated in foreign currencies as at the reporting date. The following table indicates the currencies to which the Fund had signifi cant exposure at the reporting date on its fi nancial assets. The analysis calculates the effect of a reasonably possible movement of the currency rate against Ringgit Malaysia on profi t with all other variables held constant.

Changes in Effects on profi t for currency rate the fi nancial year Increase/(decrease) Increase/(decrease) Basis points RM

2016 EUR/RM 5/(5) 5,087/(5,087)

2015 EUR/RM 5/(5) 6,521/(6,521)

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


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) a. Market Risk (Contd.) iii. Currency risk (Contd.)

Currency risk concentration

The following table sets out the Fund’s exposure to foreign currency exchange rates on its fi nancial assets as at the reporting date.

Fair value Percentage of NAV 2016 2015 2016 2015 RM RM % % EUR 10,174,681 13,042,827 92.4 96.5

b. Credit Risk

Prior to investing in NNGHD, the Manager has performed an evaluation of the performance and track record of NNGHD, as well as the fund management team of NNGHD.

i. Credit risk exposure

As at the reporting date, the Fund’s maximum exposure to credit risk is represented by the carrying amount of each class of fi nancial asset recognised in the statement of fi nancial position.

ii. Financial assets that are either past due or impaired

As at the reporting date, there are no fi nancial assets that are either past due or impaired.

iii. Credit quality of fi nancial assets

The Fund invests in deposits with fi nancial institutions licensed under the Financial Services Act 2013 and Islamic Financial Services Act 2013. The following table analyses the licensed fi nancial institutions by rating category.

Short term deposits

Percentage of total short term deposits Percentage of NAV 2016 2015 2016 2015 RM RM % % Rating P1 100.0 100.0 3.8 3.7


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) c. Liquidity Risk

Liquidity risk is defi ned as the risk that the Fund will encounter diffi culty in meeting obligations associated with fi nancial liabilities that are to be settled by delivering cash or another fi nancial asset. Exposure to liquidity risk arises because of the possibility that the Fund could be required to pay its liabilities or cancel its units earlier than expected. The Fund is exposed to cash cancellation of its units on a regular basis. Units sold to unitholders by the Manager are cancellable at the unitholder’s option based on the Fund’s NAV per unit at the time of cancellation calculated in accordance with the Deed.

Unit trust funds with principal investment strategies that involve foreign securities, derivatives or securities with substantial market and/or credit risk tend to have the greatest exposure to liquidity risks. NNGHD’s investment manager manages the risk by adopting NNIP’s diversifi cation policy that stipulates single and group issuer limits to confi ne over-exposure to a single company or group of companies.

The following table analyses the maturity profi le of the Fund’s fi nancial assets and fi nancial liabilities in order to provide a complete view of the Fund’s contractual commitments and liquidity.

Up to 1 year Note 2016 2015 RM RM Assets Financial assets at FVTPL 10,174,681 13,042,827 Short term deposits 413,522 503,694 Other assets 445,726 7,244 (i) 11,033,929 13,553,765 Liabilities Other liabilities (ii) 22,435 43,638 Equity (iii) 11,011,494 13,510,127 Liquidity gap - -


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.)

c. Liquidity Risk (Contd.)

i) Financial assets

Analysis of fi nancial asset at FVTPL into maturity groupings is based on the expected date on which this asset will be realised. The Fund’s investments in foreign collective investment scheme have been included in the “up to 1 year” category on the assumption that this is highly liquid investment which can be realised should all of the Fund’s unitholders’ equity be required to be redeemed. For other assets, the analysis into maturity groupings is based on the remaining period from the end of the reporting period to the contractual maturity date or if earlier, the expected date on which the assets will be realised.

ii) Financial liabilities

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

iii) Equity

As unitholders can request for redemption of their units, they have been categorised as having a maturity of “up to 1 year”.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Accounting

The fi nancial statements of the Fund have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board (“MASB”) and International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”).

The accounting policies adopted are consistent with those of the previous fi nancial year except for the adoption of the new and amended MFRS which became effective for the Fund on 1 May 2015. The adoption of the new and amended MFRS did not have any signifi cant impact on the fi nancial position or performance of the Fund.

The fi nancial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

b. Standards and Amendments Issued But Not Yet Effective

As at the reporting date, the following Standards and Amendments that have been issued by MASB will be effective for the Fund in future fi nancial periods. The Fund intends to adopt the relevant standards when they become effective.

Effective for fi nancial period beginning Description on or after Amendments to MFRS contained in the documents entitled “Annual Improvements to MFRSs 2012 – 2014 Cycle” 1 January 2016 MFRS 14: Regulatory Deferral Accounts 1 January 2016 Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the Consolidation Exception 1 January 2016 Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016 Amendments to MFRS 101: Disclosure Initiative 1 January 2016 Amendments to MFRS 116 and MFRS 138: Clarifi cation of Acceptable Methods of Depreciation and Amortisation 1 January 2016 Amendments to MFRS 116 and MFRS 141: Agriculture: Bearer Plants 1 January 2016 Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016 MFRS 9: Financial Instruments 1 January 2018 MFRS 15: Revenue from Contracts with Customers 1 January 2018 MFRS 16: Leases 1 January 2019 Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor To be announced and its Associate or Joint Venture by MASB

The Fund will adopt the above pronouncements when they become effective in the respective fi nancial periods. These pronouncements are not expected to have any signifi cant impact to the fi nancial statements of the Fund upon their initial application, other than MFRS 9.

MFRS 9 replaces MFRS 139 on the following requirements: classifi cation and measurement of fi nancial assets and fi nancial liabilities as defi ned in MFRS 139, impairment methodology and hedge accounting. The Fund is in the process of making an assessment of the impact of this Standard



c. Financial Assets

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

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial assets not at FVTPL, directly attributable transaction costs.

The Fund determines the classifi cation of its fi nancial assets at initial recognition.

i. Financial assets at FVTPL

Financial assets are classifi ed as fi nancial assets at FVTPL if they are held for trading or are designated as such upon initial recognition.

Financial assets held for trading includes foreign collective investment scheme acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, fi nancial assets at FVTPL is measured at fair value. Change in the fair value of that fi nancial instrument is recorded in profi t or loss.

Interest earned elements of such instruments are recorded in “interest income”.

Exchange difference on fi nancial assets at FVTPL is not recognised separately in profi t or loss but is included in net gain or net loss on changes in fair value of fi nancial asset at FVTPL.

ii. Receivables

Financial assets with fi xed or determinable payments that are not quoted in an active market are classifi ed as receivables.

Subsequent to initial recognition, receivables are measured at amortised cost using the effective interest method. Gain or loss is recognised in profi t or loss when the receivable is derecognised or impaired, and through the amortisation process.

A fi nancial asset is derecognised when the contractual right to receive cash fl ows from the asset has expired. On derecognition of a fi nancial asset, the difference between the carrying amount and the sum of the consideration received is recognised in profi t or loss.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) d. Impairment of Financial Assets

The Fund assesses at each reporting date whether there is any objective evidence that a fi nancial asset is impaired.

To determine whether there is objective evidence that an impairment loss on fi nancial assets has been incurred, the Fund considers factors such as the probability of insolvency or signifi cant fi nancial diffi culties of the debtor and default or signifi cant delay in payments.

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 fl ows discounted at the fi nancial asset’s original effective interest rate. The impairment loss is recognised in profi t or loss.

The carrying amount of the fi nancial asset is reduced by the impairment loss directly for all fi nancial assets, with the exception of receivables, where the carrying amount is reduced through the use of an allowance account. When a receivable becomes uncollectible, it is written off against the allowance account.

If, in a subsequent year, 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 assets does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profi t or loss.

e. Income

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

Interest income is recognised using the effective interest method on an accrual basis.

The realised gain or loss on sale of investments is measured as the difference between the net disposal proceeds and the carrying amount of the investment.

f. Cash and Cash Equivalents

For the purposes of the statement of cash fl ows, cash and cash equivalents include cash at bank and short term deposits with licensed fi nancial institutions.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) g. Income Tax

Income tax on the profi t or loss for the fi nancial year comprises current tax. Current tax is the expected amount of income taxes payable in respect of the taxable profi t for the fi nancial year.

As no temporary differences have been identifi ed, no deferred tax has been recognised.

h. Unrealised Reserves

Unrealised reserves represent the net gain or loss arising from carrying investments at their fair values and unrealised gain or loss from translating foreign currency monetary items at exchange rates prevailing at reporting date. This reserve is not distributable.

i. Financial Liabilities

Financial liabilities are classifi ed according to the substance of the contractual arrangements entered into and the defi nitions of a fi nancial liability.

Financial liabilities are recognised in the statement of fi nancial position when, and only when, the Fund becomes a party to the contractual provisions of the fi nancial instrument. The Fund’s fi nancial liabilities are classifi ed as other fi nancial liabilities. The Fund’s fi nancial liabilities are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

A fi nancial liability is derecognised when the obligation under the liability is extinguished. Gains and losses are recognised in profi t or loss when the liabilities are derecognised, and through the amortisation process.

j. Unitholders’ Contribution – NAV Attributable to Unitholders

The unitholders’ contribution to the Fund is classifi ed as equity instruments.

Distribution equalisation represents the average amount of undistributed net income included in the creation or cancellation price of units. This amount is either refunded to unitholders by way of distribution and/or adjusted accordingly when units are released back to the Trustee.

k. Foreign Currency

i. Functional and Presentation Currency

The fi nancial statements of the Fund are measured using the currency of the primary economic environment in which the Fund operates (“the functional currency”). The fi nancial statements are presented in Ringgit Malaysia (“RM”), which is also the Fund’s functional currency.



k. Foreign Currency (Contd.)

ii. Foreign currency transactions

In preparing the fi nancial statements of the Fund, transactions in currencies other than the Fund’s functional currency (foreign currencies) are recorded in the functional currency using exchange rates prevailing at the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are translated at the rates prevailing on the reporting date. All exchange gain or loss is recognised in profi t or loss.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profi t or loss for the fi nancial year.

The principal exchange rate for each respective unit of foreign currency ruling at reporting date is as follows:

2016 2015 RM RM 1 EUR 4.4761 3.9980

l. Distribution

Distributions are at the discretion of the Manager. A distribution to the Fund’s unitholders is accounted for as a deduction from retained earnings.

m. Signifi cant Accounting Judgments and Estimates

The preparation of fi nancial statements requires the use of certain accounting estimates and exercise of judgment. Estimates and judgments are continually evaluated and are based on past experience, reasonable expectations of future events and other factors.

i. Critical judgments made in applying accounting policies

There are no major judgments made by the Manager in applying the Fund’s accounting policies.

ii. Key sources of estimation uncertainty

There are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year.


4. FINANCIAL ASSETS AT FVTPL

2016 2015 RM RM Financial assets held for trading, at FVTPL: Collective investment scheme - foreign 10,174,681 13,042,827 Net gain on fi nancial assets at FVTPL comprised: Realised gain on disposals 1,202,830 990,492 Unrealised changes in fair values (960,236) 700,787 242,594 1,691,279

Details of fi nancial assets at FVTPL as at 30 April 2016:

Percentage Quantity Cost Fair value of NAV RM RM %

Collective investment scheme - foreign

NNGHD 5,989 9,233,929 10,174,681 92.4

Total fi nancial assets at FVTPL 9,233,929 10,174,681 92.4

Unrealised gain on fi nancial assets at FVTPL 940,752

5. MANAGER’S FEE

The Manager’s fee is computed on a daily basis at a rate not less than 0.5% per annum and not exceeding 3.0% per annum of the NAV of the Fund as provided under Division 13.1 of the Deed.

The Manager is currently charging Manager’s fee of 1.80% per annum of the NAV of the Fund (2015: 1.80% per annum).

As the Fund invests in units of NNGHD, 1.50% of the Manager’s fee is charged by the NNGHD’s manager, NNIP, and the remaining 0.30% is charged by the Manager. Accordingly, there is no double charging of Manager’s fee.


6. TRUSTEE’S FEE

Pursuant to the Second Supplemental Deed dated 25 July 2014, the Trustee’s fee is computed at a rate not exceeding 0.08% per annum of the NAV of the Fund and subject to a minimum fee of RM9,000 per annum. Prior to 1 August 2014, the Trustee’s fee was computed at a rate not exceeding 0.20% per annum of the NAV of the Fund and subject to a minimum fee of RM18,000 per annum.

The Trustee’s fee is computed at 0.08% per annum of the NAV of the Fund effective from 1 August 2014. Prior to 1 August 2014, the Trustee’s fee was computed based on the minimum fee of RM18,000 per annum.

7. INCOME TAX

Income tax is calculated at the Malaysian statutory tax rate of 24% (2015: 25%) of the estimated assessable income for the fi nancial year.

Income tax is calculated on investment income less partial deduction for permitted expenses as provided for under Section 63B of the Income Tax Act, 1967.

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:

2016 2015 RM RM Net income before tax 172,745 1,609,481 Tax at Malaysian statutory tax rate of 24% (2015: 25%) 41,459 402,370 Tax effect of: Income not subject to tax (293,359) (428,459) Loss not deductible for tax purposes 230,457 - Expenses not deductible for tax purposes 5,026 5,508 Restriction on tax deductible expenses for unit trust fund 16,417 20,581 Income tax for the fi nancial year - -

8. SHORT TERM DEPOSITS

Short term deposits are held with licensed fi nancial institutions in Malaysia at the prevailing interest rates.


9. OTHER RECEIVABLE

2016 2015 RM RM

Interest receivable from short term deposits 36 44

10. OTHER PAYABLES 2016 2015 RM RM Accrual for auditors’ remuneration 8,500 8,500 Accrual for tax agent’s fees 4,000 3,400 Provision for printing and other expenses 9,222 8,029 21,722 19,929

11. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS

NAV attributed to unitholders is represented by:

Note 2016 2015 RM RM Unitholders’ contribution (a) 46,256,453 48,927,831 Accumulated losses: Realised reserves (36,185,711) (37,318,692) Unrealised reserves 940,752 1,900,988 (35,244,959) (35,417,704) 11,011,494 13,510,127

(a) Unitholders’ contribution

2016 2015 No. of units RM No. of units RM At beginning of the fi nancial year 29,451,585 48,927,831 43,249,633 55,008,939 Add: Creation of units 14,496,159 6,923,856 19,419,524 8,089,908 Less: Cancellation of units (20,057,137) (9,361,645) (33,217,572) (14,001,244) Distribution equalisation - (233,589) - (169,772) At end of the fi nancial year 23,890,607 46,256,453 29,451,585 48,927,831 The number of units legally or benefi cially held by the Manager, Kenanga Investors

Berhad, and parties related to the Manager as at 30 April 2016 were nil (2015: nil).


12. PORTFOLIO TURNOVER RATIO (“PTR”)

PTR for the fi nancial year is 0.50 times (2015: 0.62 times).

PTR is the ratio of average sum of acquisitions and disposals of investments of the Fund for the fi nancial year to the average NAV of the Fund, calculated on a daily basis.

13. MANAGEMENT EXPENSE RATIO (“MER”)

MER for the fi nancial year is 0.64% (2015: 0.68%).

MER is the ratio of total fees and recovered expenses of the Fund expressed as a percentage of the Fund’s average NAV, calculated on a daily basis.

14. TRANSACTIONS WITH TARGET FUND MANAGER AND LICENSED FINANCIAL INSTITUTIONS

Transaction Percentage value of total RM %

NNIP* 14,130,740 57.9 Hong Leong Bank Berhad 10,279,000 42.1 24,409,740 100.0

* As the Fund is by nature a feeder fund to a global fund, NNGHD, hence substantial transactions were made with the target fund manager, NNIP.

The above transaction values are in respect of investments in foreign collective investment scheme and short term deposits. Transactions in these investments do not involve any commission or brokerage fees.

15. SEGMENTAL REPORTING

As stated in Note 1 to the fi nancial statements, the Fund is a feeder fund whereby at least 95% of the Funds’ NAV will be invested in NNGHD and maintaining a minimum of 2% of the Fund’s NAV in liquid assets. NNGHD is an open ended unit trust fund in Luxembourg and is managed by NNIP.

As at 30 April 2016, the Fund invests 92.4% of its NAV in NNGHD which is lower than the minimum investment requirement as stated in its prospectus. This is merely due to units created at end of fi nancial year. The investment level has been back to above the minimum level of 95% subsequent to the fi nancial year end on 13 May 2016.

As the Fund is by nature a feeder fund to an underlying fund, disclosure by business or geographical segments is not relevant.


16. FINANCIAL INSTRUMENTS

a. Classifi cation of fi nancial instruments

The Fund’s fi nancial assets and fi nancial liabilities are measured on an ongoing basis at either fair value or at amortised cost based on their respective classifi cation. The signifi cant accounting policies in Note 3 describe how the classes of fi nancial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised.

The following table analyses the fi nancial assets and liabilities of the Fund in the statement of fi nancial position by the class of fi nancial instrument to which they are assigned and therefore by the measurement basis.

Financial assets Financial at FVTPL Receivables liabilities Total

RM RM RM RM

2016 Assets Collective investment scheme - foreign 10,174,681 - - 10,174,681 Short term deposits - 413,522 - 413,522 Amount due from Manager - 434,463 - 434,463 Other receivable - 36 - 36 Cash at bank - 11,227 - 11,227 10,174,681 859,248 - 11,033,929

Liabilities Amount due to Trustee - - 713 713 Other payables - - 21,722 21,722 - - 22,435 22,435

2015 Assets Collective investment scheme - foreign 13,042,827 - - 13,042,827 Short term deposits - 503,694 - 503,694 Other receivable - 44 - 44 Cash at bank - 7,200 - 7,200 13,042,827 510,938 - 13,553,765

Liabilities Amount due to Manager - - 22,751 22,751 Amount due to Trustee - - 958 958 Other payables - - 19,929 19,929 - - 43,638 43,638


16. FINANCIAL INSTRUMENTS (CONTD.)

b. Financial instruments that are carried at fair value

The Fund’s fi nancial assets at FVTPL are carried at fair value. The fair values of these fi nancial assets were determined using prices in active markets.

The following table shows the fair value measurements by level of the fair value measurement hierarchy:

Level 1 Level 2 Level 3 Total

Investments: 2016 - Collective investment scheme - foreign - 10,174,681 - 10,174,681 2015 - Collective investment scheme - foreign - 13,042,827 - 13,042,827

Level 1: Quoted prices in active market Level 2: Model with all signifi cant inputs which are observable market data Level 3: Model with inputs not based on observable market data

The fair value of foreign collective investment scheme is stated based on the NAV per unit of the NNGHD at the reporting date.

c. Financial instruments not carried at fair value and whose carrying amounts are reasonable approximations of fair value

The carrying amounts of the Fund’s other fi nancial assets and liabilities are not carried at fair value but approximate fair values due to the relatively short term maturity of these fi nancial instruments.


17. CAPITAL MANAGEMENT

The capital of the Fund can vary depending on the demand for creation and cancellation of units to the Fund.

The Fund’s objectives for managing capital are:

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

b. To maintain suffi cient liquidity to meet the expenses of the Fund, and to meet cancellation requests as they arise; and

c. To maintain suffi cient fund size to make the operations of the Fund cost-effi cient.

No changes were made to the capital management objectives, policies or processes during the current and previous fi nancial years.


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Investor Services Center Head Offi ce, Kuala LumpurToll Free Line: 1 800 88 3737 Suite 12.02, 12th Floor, Kenanga Interna onal,Fax: +603 2057 3722 Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.Email: [email protected] Tel: 03-2057 3688 Fax: 03-2161 8807

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kenanga global dividend fund · 2016. 6. 29. · ii kenanga global dividend fund annual report...

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