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ANNUAL REPORT

For the Financial Year Ended 31 August 2013

KENANGA GROWTH OPPORTUNITIES FUND(FORMERLY KNOWN AS ING GROWTH OPPORTUNITIES)

KENANGA GROWTH OPPORTUNITIES FUND ANNUAL REPORT

Contents Page

CORPORATE DIRECTORY i

DIRECTORY OF MANAGER’S OFFICES ii

MANAGER’S REPORT 1- 8

1.0 FUND INFORMATION 1

2.0 FUND REVIEW 2

3.0 MARKET REVIEW & OUTLOOK 4

4.0 PERFORMANCE DATA 6

TRUSTEE’S REPORT 9

STATEMENT BY MANAGER 10

INDEPENDENT AUDITORS’ REPORT 11

STATEMENT OF COMPREHENSIVE INCOME 13

STATEMENT OF FINANCIAL POSITION 14

STATEMENT OF CHANGES IN EQUITY 15

STATEMENT OF CASH FLOWS 16

NOTES TO THE FINANCIAL STATEMENTS 17-36

i


CORPORATE DIRECTORY

MANAGER: KENANGA INVESTORS BERHAD (Company No. 353563-P) REGISTERED OFFICE BUSINESS OFFICEKenanga Investors Berhad (KIB) Suite 12.02, 12th Floor, Kenanga Interna onal,8th Floor, Kenanga Interna onal, 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 DIRECTORSDatuk Syed Ahmad Alwee Alsree (Chairman)Syed Zafi len Syed Alwee (Independent Director)YM Raja Dato’ Seri Abdul Aziz bin Raja Salim (Independent Director)Vivek Sharma (Independent Director)Bruce Kho Yaw HuatAbdul Razak bin AhmadPeter John Rayner

COMPANY SECRETARY: Norliza Abd Samad, (MAICSA 7011089)9th Floor, Kenanga Interna onal, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia. TRUSTEE: CIMB COMMERCE TRUSTEE BERHAD (Company No. 313031-A) REGISTERED AND BUSINESS OFFICE 5th Floor, Bangunan CIMB, Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur. Tel: 03-2084 8888 Fax: 03-2093 9688

AUDITOR: ERNST & YOUNG

Level 23A, Menara Millennium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000

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DIRECTORY OF MANAGER’S OFFICES

REGIONAL BRANCH OFFICES:

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

KlangNo. 12 Jalan Batai Laut 3Taman Intan, 41300 KlangSelangor Darul EhsanTel:03-3341 8818 / 03-3348 7889Fax:03-3341 8816

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

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

Agency Offi ceMiri (Sarawak)c/o Lot 1084, 2nd Floor,Jalan Merpa 98000 MiriSarawak, MalaysiaTel: 085-427 782

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

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

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

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

1


MANAGER’S REPORT

Dear Unit Holders,

We are pleased to present the Manager’s annual report and the audited fi nancial statements of the KENANGA GROWTH OPPORTUNITIES FUND (formerly known as ING Growth Opportuni es) for 12-month fi nancial year ended 31 August 2013.

1.0 FUND INFORMATION

1.1 Fund Name KENANGA GROWTH OPPORTUNITIES FUND (KGOF or the Fund) (formerly known as ING Growth Opportuni es)

1.2 Fund Category / Type Equity / Growth

1.3 Investment Objec ve The Fund aims to achieve consistent capital apprecia on over the long-term by primarily inves ng

in rela vely smaller capitalized companies with good growth prospects.

1.4 Investment Strategy The Fund is an equity growth fund that is ac vely managed based on both quan ta ve and

qualita ve disciplines. Its strategy is to invest in companies that are likely to yield higher earnings growth than the market average.

1.5 Asset Alloca on 70% to 98% in equi es and 2% to 30% in fi xed income securi es / cash.

1.6 Dura on The Fund was launched on 23 April 2004 and shall exist as long as it appears to the Manager and

the Trustee that it is in the interests of the unit holders for it to con nue.

1.7 Performance Benchmark FTSE Bursa Malaysia Emas Index.

1.8 Distribu on Policy Income (if any) as secondary objec ve, is paid annually.

2


2.0 FUND REVIEW

2.1 Fund performance analysis based on NAV per unit (adjusted for income distribu on, if any) since last review date

Period under review Kenanga Growth Opportuni es Fund 14.50% FTSE Bursa Malaysia Emas Index 6.58% Source: Lipper

During the period under review, the Fund registered a posi ve return of 14.50%, outperforming the benchmark return of 6.58%. The outperformance was a ributable to posi ve asset alloca on decision to underweight equity. In term of sector alloca on, the Fund had overrweighted in oil and gas, industrial product and construc on.

2.2 Has the Fund achieved its objec ve?

For the period under review, the Fund fulfi lled its investment objec ve, having invested in rela vely smaller capitalized companies with growth prospects to produce consistent capital apprecia on over the long term.

2.3 Strategies & policies employed

For the period under review, the Fund’s investment strategy and policy were to invest in companies that are likely yield higher earnings growth than the market average. The strategy employed was in line with that disclosed in the master prospectus.

2.4 The Fund’s asset alloca on (% of NAV) as at 31 August 2013 and comparison with the previous fi nancial year

Asset 31 August 2013 31 August 2012 Unquoted Investments 74.9% 97.5% Cash and Others 25.1% 2.5%

Reason for the diff erences in asset alloca on During the period under review, the Fund has reduced its equity exposure due to rising poli cal

and market uncertainty. The Fund will maintain equity exposure of 75-80% to ride through the vola lity.

2.5 State of Aff airs of the Fund

Pursuant to the acquisi on of ING Funds Berhad by Kenanga Investors Berhad on 19th April 2013, Kenanga Investors Berhad had wri en to the Securi es Commission to seek the Securi es Commission’s approval to become the Management Company of the Fund.

The Securi es Commission had approved the applica on. With eff ect from 8th June 2013, Kenanga Investors Berhad has become the Management Company of the Fund.

3


2.6 Circumstances that materially aff ect any interests of the unitholders

During the period under review, there are no circumstances that materially aff ect any interests of the unitholders. However, there was a change in the Management Company of the Fund on 8th

June 2013 as detailed in 2.5.

2.7 Unit Holders’ Profi le

As at 31 August 2013, the number of units of the Fund in circula on stood at 5,061,595 (include Manager Stock) units out of an approved fund size of 300 million units.

Breakdown of Unit Holdings by Size Unit Holders Unit Holdings Size of holdings Number % Units % 5,000 and below 4,252 96.11 2,460,777.16 48.62 5,001 - 10,000 87 1.97 604,302.62 11.94 10,001-50,000 78 1.76 1,393,026.29 27.52 50,001-500,000 7 0.16 603,488.81 11.92 500,001 and above 0 0.00 0.00 0.00 Total 4,424 100.00 5,061,594.88 100.00

Manager and Related Party Holdings Breakdown of holdings by the Manager and related par es as at 31 August 2013 is as follows:- No. of Units Held Manager# - Director of the Manager - Other related par es -

Total - # excludes normal & EPF bookings

2.8 Rebates & So Commission

Any rebates received are channeled back to the Fund. On the other hand, so commissions received from the stockbrokers for goods and services such as technical analysis so ware, fundamental database, fi nancial wire services, stock quota on system and por olio management so ware incidental to investment management of the Fund shall be retained by the Manager. For the period under review, the Manager has received so commissions in the form of research and advisory services that assist in the decision-making process rela ng to the Fund’s investments.

4


3.0 MARKET REVIEW & OUTLOOK

3.1 Market Review

Stock market performance in the region can be broken up into two parts for the period under review. The Nikkei had a fantas c year (+30.3% year-on-year) following the Japanese government’s surprise decision to infl ate the long stagnant economy with a US-style quan ta ve easing programme, valued at US$1.5 trillion. The emerging countries of Associa on of South East Asian Na ons (ASEAN) were clear outperformers, led by Philippines and Thailand which rose by 25.7% and 18.7% year-on-year (YoY) respec vely as investors reacted posi vely to the underlying domes c economic growth of these economies. The strong infl ow of funds into these countries was also helped by US’s Quan ta ve Easing 3 (QE3) programme. Governments around the world were generally adop ng a loose monetary policy to help economic recovery.

Malaysia lagged regional market especially in the fi rst quarter of 2013 due to uncertainty over the 13th Malaysia General Elec on. However, the market reacted posi vely a er Barisan Na onal retained power albeit with a slightly lesser majority. The Kuala Lumpur Composite Index (KLCI) index rose by 4.8% on the fi rst day a er the announcement of the elec on result. This could be a ributed to the removal of risk premium associated with the uncertainty over the general elec on. On the economic side, the fi rst quarter of 2013 Gross Domes c Product (GDP) growth of 4.1% fell short of expecta on. This was a ributed to weaker exports and slower growth in private investments due to uncertainty from the elec on outcome. The fi rst quarter repor ng season in Malaysia came in within analysts’ expecta on with 60% of the results met consensus expecta on whilst around 17% was above expecta on. The disappointment came mostly from the oil & gas, planta on, and gaming related companies.

The downturn came in June when equity markets reacted strongly on the nega ve a er the Fed’s chairman, Ben Bernanke commented that it would be appropriate to moderate the monthly purchase of assets backed securi es later this year. It sparked investors’ fear that US’ QE3 will be tapering off earlier than expected. The situa on was made worse when the People’s Bank of China (PBoC) ini ally refused to ease a liquidity squeeze in the interbank market which caused a sharp spike in Shanghai Interbank Off ered Rate (SHIBOR) rate to peak at 13.4%. The decline was led by China Shanghai Stock Exchange Composite Index (SHComp) (-14%), Philippines (-7.9%) and Hong Kong (-7.1%). Malaysia was the only market that managed to stay fl at as domes c funds managed to absorb the selling by foreign investors. The Ringgit weakened from RM2.96/US$ to RM3.22/US$ as a result of the ou low.

The Thailand, Indonesia, Philippines & Singapore (TIPS) markets fell further in August, led by Indonesia and Thailand loss of 9% month-on-month (MoM) whilst Philippines fell by 8.5% MoM. The selldown was sparked by Indonesia’s widening trade defi cit and the Rupiah weakened by 10.6%. This was exacerbated by weaker than expected economic data. Foreign investors sold to reduce exposure to poten ally weaker currencies as well as slower Earnings per Share (EPS) growth in the TIPS countries.

5


3.2 Market Outlook

The debate to raise US debt ceiling to above US$16.7 trillion by 17th October should dominate market in the near term. A failure to do would cause the US government to default on its obliga ons. The impact could be extremely nega ve as it will derail and already fragile US economy and its repercussion on global markets will be long las ng. We expect the US congress to come to approve to raise the limit but only a er a round of showboa ng by the Republicans to try to gain some concessions.

The Malaysian 2014 Budget will be tabled on 25th October 2013, a week a er the UMNO general elec on. This 2014 Budget is viewed as cri cal to the equity market given the rise in twin defi cit concern in emerging markets and poten al ra ng review by Moody’s following the downgrade of the sovereign ra ng outlook by Fitch on July 2013. We believe the government is likely to come out with a more modest budget to help reduce Malaysia’s budget defi cit.

We also opined that despite the need to reduce the budget defi cit, the key Economic Transforma on Programme (ETP) and oil and gas (O&G) projects such as the Mass Rapid Transit (MRT) line 2 and 3, the development of marginal oil fi leds and water sector will con nue to be implemented as per plan. As such, we remain posi ve on O&G companies and selected construc on companies.

The Malaysia GDP growth is expected to grow by around 5% in 2014. This is posi ve for the stock market as it will help to drive earnings growth. The KLCI EPS growth had disappointed in the past few quarters due to falling Crude Palm Oil (CPO) prices and slower than expected industrial growth. Net EPS growth is projected to improve to 6.6% in 2014. This should provide the base for the KLCI to rerate further.

6


4.0 PERFORMANCE DATA

4.1 Performance Chart

PERFORMANCE CHART SINCE LAUNCH 23/04/2004 31/08/2013KENANGA GROWTH OPPORTUNITIES FUND VS FTSE BURSA MALAYSIA EMAS INDEX

Source: Lipper

4.2 Average Total Returns

1 Year 3 Years 5 Years 31 Aug 12 31 Aug 10 31 Aug 08 - 31 Aug 13 - 31 Aug 13 - 31 Aug 13 Kenanga Growth Opportuni es Fund 14.50% 15.69% 11.80% FTSE Bursa Malaysia Emas Index 6.58% 8.74% 12.59% Source: Lipper

4.3 Annual Total Returns Period under review 1 Year 1 Year 1 Year 1 Year 1 Year 31 Aug 12 31 Aug 11 31 Aug 10 31 Aug 09 31 Aug 08 31 Aug 07 -31 Aug 13 -31 Aug 12 -31 Aug 11 -31 Aug 10 -31 Aug 09 -31 Aug 08 Kenanga Growth Opportuni es Fund 14.50% 12.47% 14.20% 17.10% -7.67% -25.86% FTSE Bursa Malaysia Emas Index 6.58% 13.33% 4.49% 19.67% 7.89% -14.86% Source: Lipper

Investors are reminded that past performance is not necessarily indica ve of future performance and that unit prices and investment returns may fl uctuate.

7


4.4 Por olio Composi on

Details of por olio composi on of Kenanga Growth Opportuni es Fund (“the Fund”) for the last 3 fi nancial years ended as at 31 August are as follows:

a. Distribu on among industry sectors and category of investments:

FY 2013 FY 2012 FY 2011 % % % Trading /Services 25.3 45.9 36.3 Industrial Product 19.6 4.8 9.1 Construc on 17.8 6.1 10.2 Proper es 6.6 - 5.4 Consumer Product 2.9 - 1.4 Finance 2.1 20.3 19.1 Technology 0.6 0.6 - Planta on - 19.8 7.6 Infrastructure - - 3.1 REITs - - - Cash and others 25.1 2.5 7.8 100.0 100.0 100.0

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

b. Distribu on among markets

The Fund invested in local equi es and cash instruments only.

8


4.5 Performance Data

Performance details of the Fund for the last 3 fi nancial years ended 31 August are as follows:

FY 2013 FY 2012 FY 2011 Net asset value (RM Million) 4.05* 4.62 1.54 Units in circula on (Million) 5.06 6.61 2.48 Net asset value per unit (RM) 0.8005* 0.6991 0.6216 Highest NAV per unit (RM) 0.8550 0.7069 0.6808 Lowest NAV per unit (RM) 0.6749 0.5746 0.5466 Total return (%) 14.50 12.47 14.20 - Capital growth (%) 11.36 9.49 11.87 - Gross Income distribu on (%) 3.14 2.98 2.33 Gross distribu on per unit (sen) - - - Net distribu on per unit (sen) - - - Management expense ra o (%) 1 2.68 3.13 1.81 Por olio turnover ra o ( mes) 2 5.01 7.69 3.56

Note: Total return is the actual return of the Fund for the fi nancial year, computed based on net asset value per unit and net of all fees.

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

Above prices and NAV are not shown as ex-distribu on as there were no distribu on declared by the Fund in the current year under review.

1. The decrease in MER is due to decrease in average fund size during the year under review.

2. Lower PTR was mainly due to lower trading ac vity.

* Based on bid price fair valua on method on all investments held by the Fund as at 31 August 2013, the NAV and price would be RM4.03 million and RM0.7970 respec vely.

(As disclosed under note 11 of the fi nancial statements)

4.6 Distribu on / Unit Split for the Period under Review

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

Investors are reminded that past performance is not necessarily indica ve of future performance and that unit prices and investment returns may fl uctuate.

9


TRUSTEE’S REPORT

To the Unit Holders of Kenanga Growth Opportuni es Fund

We, CIMB COMMERCE TRUSTEE BERHAD, being the Trustee of KENANGA GROWTH OPPORTUNITIES FUND (“the Fund”) (formerly known as ING Growth Opportuni es) are of the opinion that KENANGA INVESTORS BERHAD (“the Manager”), ac ng in the capacity of Manager of the Fund, have fulfi lled their du es in the following manner for the fi nancial year ended 31 August 2013.

a) The Fund has been managed in accordance with the limita ons imposed on the investment powers of the Manager and the Trustee under the Deed, the Securi es Commission’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 and other applicable laws;

b) Valua on/pricing of units of the Fund has been carried out in accordance with the Deed and

relevant regulatory requirements; and c) Crea on and cancella on of units have been carried out in accordance with the Deed and

relevant regulatory requirements. For and on behalf ofCIMB COMMERCE TRUSTEE BERHAD

LIEW PIK YOONG Head/Director, Group Trustee Services

Kuala Lumpur, Malaysia

28 October 2013

10


STATEMENT BY THE MANAGER

To the Unit Holders of Kenanga Growth Opportuni es Fund

I, Abdul Razak Bin Ahmad, being the director of Kenanga Investors Berhad, do hereby state that, in the opinion of the Manager, the accompanying statement of fi nancial posi on as at 31 August 2013 and the related statement of comprehensive income, statement of changes in equity and statement of cash fl ows for the fi nancial year ended 31 August 2013 together with notes thereto, are drawn up in accordance with Malaysian Financial Repor ng Standards and Interna onal Financial Repor ng Standards so as to give a true and fair view of the fi nancial posi on of KENANGA GROWTH OPPORTUNITIES FUND (formerly known as ING Growth Opportuni es) as at 31 August 2013 and of its fi nancial performance and cash fl ows for the year then ended and comply with the requirements of the Deed.

For and on behalf of the Manager,Kenanga Investors Berhad

Abdul Razak Bin AhmadDirector

Kuala Lumpur, Malaysia

28 October 2013

11

INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS OF KENANGA GROWTH OPPORTUNITIES FUND FORMERLY KNOWN AS ING GROWTH OPPORTUNITIES

Report on the fi nancial statements

We have audited the fi nancial statements of Kenanga Growth Opportuni es Fund (formerly known as ING Growth Opportuni es) (“the Fund”), which comprise the statement of fi nancial posi on as at 31 August 2013, and the statement of comprehensive income, statement of changes in equity and statement of cash fl ows for the fi nancial year then ended, and a summary of signifi cant accoun ng policies and other explanatory notes, as set out on pages 13 to 36.

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

The Manager of the Fund is responsible for the prepara on of fi nancial statements that give a true and fair view in accordance with Malaysian Financial Repor ng Standards and Interna onal Financial Repor ng Standards. The Manager is also responsible for such internal control as the Manager determines is necessary to enable the prepara on 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 accoun ng and other records as are necessary to enable true and fair presenta on 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 audi ng in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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 prepara on 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 eff ec veness of the Fund’s internal control. An audit also includes evalua ng the appropriateness of the accoun ng policies used and the reasonableness of accoun ng es mates made by the Manager, as well as evalua ng the overall presenta on 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.

12

INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS OF KENANGA GROWTH OPPORTUNITIES FUND FORMERLY KNOWN AS ING GROWTH OPPORTUNITIES (CONTD.)

Report on the fi nancial statements (Contd.)

Opinion

In our opinion, the fi nancial statements have been properly drawn up in accordance with Malaysian Financial Repor ng Standards and Interna onal Financial Repor ng Standards so as to give a true and fair view of the fi nancial posi on of the Fund as at 31 August 2013 and of its fi nancial performance and the cash fl ows of the Fund for the fi nancial year then ended.

Other ma ers

1. As stated in Note 3 to the fi nancial statements, the Fund adopted Malaysian Financial Repor ng Standards on 1 September 2012 with a transi on date of 1 September 2011. These standards were applied retrospec vely by directors to the compara ve informa on in these fi nancial statements, including the statements of fi nancial posi on as at 31 August 2012 and 1 September 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash fl ows for the year ended 31 August 2012 and related disclosures. We were not engaged to report on the compara ve informa on and it is unaudited. Our responsibili es as part of our audit of the fi nancial statements of the Fund for the year ended 31 August 2013 have, in these circumstances, included obtaining suffi cient appropriate audit evidence that the opening balances as at 1 September 2012 do not contain misstatements that materially aff ect the fi nancial posi on as of 31 August 2013 and fi nancial performance and cash fl ows for the year then ended.

2. This report is made solely to the unit holders 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 Yeo Beng Yean AF: 0039 No. 3013/10/14(J) Chartered Accountants Chartered Accountant Kuala Lumpur, Malaysia

28 October 2013

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

13


STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2013

Note 2013 2012 RM RM

INVESTMENT INCOMEInterest income 13,973 5,925Other Income - 94Dividend income 110,575 63,228Net gain from investments: - Financial assets at fair value through profi t and loss (“FVTPL”) 7 450,989 220,806 575,537 290,053

EXPENSESManager’s fee 4 59,171 38,606Trustee’s fee 5 17,985 18,066Auditors’ remunera on 4,000 3,978Tax agent’s fee 3,500 3,856Administra on 17,533 13,318 102,189 77,824

NET INCOME BEFORE TAX 473,348 212,229Income tax expense 6 (4,400) (3,200)

NET INCOME AFTER TAX, REPRESENTING TOTAL COMPREHENSIVE INCOME FOR THE YEAR 468,948 209,029

Total comprehensive income is made up as follows: Realised gain 460,541 59,917 Unrealised gain 8,407 149,112 468,948 209,029


14


STATEMENT OF FINANCIAL POSITIONAS AT 31 AUGUST 2013

Note 31.8.13 31.8.12 1.9.11 RM RM RM

ASSETSQuoted equity securi es 7 3,022,858 4,491,950 1,415,710Short term deposits 8 1,004,712 103,204 115,052 4,027,570 4,595,154 1,530,762

OTHER ASSETSOther receivables 9 3,258 139,196 24,725Cash at bank 8,293 12,318 3,861Tax recoverable 20,229 18,552 17,410 31,780 170,066 45,996 TOTAL ASSETS 4,059,350 4,765,220 1,576,758 LIABILITIESAmount due to Manager 6,109 9,082 2,113Amount due to Trustee 1,480 1,475 1,529Other payables 17,858 145,267 37,956TOTAL LIABILITIES 25,447 155,824 41,598 EQUITY NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS 10 4,033,903 4,609,396 1,535,160 TOTAL LIABILITIES AND EQUITY 4,059,350 4,765,220 1,576,758 NUMBER OF UNITS IN CIRCULATION 10(a) 5,061,595 6,606,384 2,476,427 NET ASSET VALUE PER UNIT 11 0.7970 0.6977 0.6199


15


STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 AUGUST 2013

Unitholders’ Retained Note capital earnings Total equity

RM RM RM

2013 At beginning of the year 4,505,334 104,062 4,609,396Total comprehensive income - 468,948 468,948Crea on of units 10(a) 1,978,175 - 1,978,175Cancella on of units 10(a) (3,031,491) - (3,031,491)Distribu on equalisa on 12 8,875 - 8,875At end of the year 3,460,893 573,010 4,033,903

2012At beginning of the year 1,640,127 (104,967) 1,535,160Total comprehensive income - 209,029 209,029Crea on of units 10(a) 4,884,324 - 4,884,324Cancella on of units 10(a) (2,037,724) - (2,037,724)Distribu on equalisa on 12 18,607 - 18,607At end of the year 4,505,334 104,062 4,609,396


16


STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2013

2013 2012 RM RM

CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIESProceeds from sale of investments 20,182,286 17,575,952Purchase of investments (18,246,284) (20,439,215)Net dividend received 101,321 61,280Interest received 13,900 5,926Manager’s fee paid (59,507) (35,000)Trustee’s fee paid (17,980) (18,120)Auditors’ remunera on paid (4,000) (8,000)Tax agent’s fee paid (7,142) (875)Other income - 94Payment for other fees and expenses (18,033) (14,003)Net cash generated from/(used in) opera ng and inves ng ac vi es 1,944,561 (2,871,961) CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from units created 2,042,320 4,911,906Cash paid on units cancelled (3,089,398) (2,043,336)Net cash (used in)/generated from fi nancing ac vi es (1,047,078) 2,868,570 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 897,483 (3,391)CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 115,522 118,913CASH AND CASH EQUIVALENTS AT END OF THE YEAR 1,013,005 115,522 Cash and cash equivalent comprise: Cash at bank 8,293 12,318 Short term deposits 1,004,712 103,204 1,013,005 115,522

17


NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 AUGUST 2013

1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES

Kenanga Growth Opportuni es Fund (formerly known as ING Growth Opportuni es) (herein a er referred to as “The Fund”) was cons tuted pursuant to the executed Deed dated 16 April 2004 between ING Funds Berhad and CIMB Commerce Trustee Berhad as the Trustee. The Fund commenced opera on on 23 April 2004 and will con nue to be in opera on un l terminated by the Trustee as provided under Clause 38 of the Deed. As provided in the Deed, the “accrual period” or fi nancial year shall end on 31 August.

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 eff ect from 8 June 2013 and the name of the Fund was changed from ING Growth Opportuni es to Kenanga Growth Opportuni es Fund.

The principal ac vity of the Fund is to achieve consistent capital apprecia on over long term by primarily inves ng in rela vely smaller capitalised companies with good growth prospects based on equity securi es corpora ons that prac ce good corporate governance.

2. FINANCIAL RISK AND MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks including market risk (which includes interest rate risk and price risk), liquidity risk and single issuer risk. Whilst these are the most important types of fi nancial risks inherent in each type of fi nancial instruments, the Manager and the Trustee would like to highlight that this list does not purport to cons tute an exhaus ve list of all the risks inherent in an investment in the Fund.

The Fund has an approved set of investment guidelines and policies as well as internal controls which set out its overall business strategies to manage these risks to op mise returns and preserve capital for the unitholders, consistent with the long term objec ves of the Fund.

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 and price risk.

Market risk arises when the value of the quoted investments fl uctuate in response to the ac vi es of individual companies, general market or economic condi ons. It stems from the fact that there are other economy-wide perils, which threaten all businesses. Hence, investors are exposed to market uncertain es. Fluctua on in the securi es prices caused by uncertain es in the economy, poli cal and social environment will aff ect the fair value of the Fund.

The Manager manages the risk of unfavorable changes in prices by cau ous review of the investments and con nuous monitoring of their performance and risk profi les.

18


2. FINANCIAL RISK AND MANAGEMENT OBJECTIVES AND POLICIES CONTD.

a. Market Risk (Contd.)

i. Interest rate risk

The Fund’s exposure to interest rate risk is mainly confi ned to short term placement with fi nancial ins tu ons. The Manager overcomes this exposure by way of maintaining deposits on short term basis.

The interest rate is general economic indicator that will have an impact on management of fund or otherwise. It does not in any way suggest that this Fund will invest in conven onal fi nancing instruments.

Interest rate risk sensi vity

The following table demonstrates the sensi vity of the Fund’s profi t for the year to a reasonably possible change in interest rate, with all other variables held constant.

Eff ect on changes in Changes in rate Eff ect on profi t fair value of Basis points for the year fi nancial assets Increase/(decrease) Increase/(decrease) Increase/(decrease) RM RM

2013 5/(5) 502/(502) - 2012 5/(5) 52/(52) -

Interest rate risk exposure

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

Eff ec ve Up to Non-interest interest 1 year bearing Total rate*

RM RM RM %

2013 Assets Quoted equity securi es - 3,022,858 3,022,858 - Short term deposits 1,004,712 - 1,004,712 2.95 Other assets - 31,780 31,780 1,004,712 3,054,638 4,059,350

19




i. Interest rate risk (Contd.)

Interest rate risk exposure (Contd.)

Eff ec ve Up to Non-interest interest 1 year bearing Total rate*

RM RM RM %

2013 Liabili es Other liabili es - 25,447 25,447 - 25,447 25,447

Total interest sensi vity gap 1,004,712 3,029,191 4,033,903 2012 Assets Quoted equity securi es - 4,491,950 4,491,950 - Short term deposits 103,204 - 103,204 2.95 Other assets - 170,066 170,066 103,204 4,662,016 4,765,220 Liabili es Other liabili es - 155,824 155,824 - 155,824 155,824

Total interest sensi vity gap 103,204 4,506,192 4,609,396

* Computed based on interest – bearing assets only.

ii. Price Risk

Price risk is the risk of unfavourable changes in the fair values of quoted equity securi es. The Fund invests in quoted equity securi es which are exposed to price fl uctua ons. This may then aff ect the unit price of Kenanga Growth Opportuni es Fund.

Price risk sensi vity

Manager’s best es mate of the eff ect on the profi t for the year and other comprehensive income due to a reasonably possible change in investments in quoted equity securi es, with all other variables held constant is indicated in the table below:

20




ii. Price Risk (Contd.)

Price risk sensi vity (Contd.)

Eff ects on other Eff ect on profi t comprehensive Changes in price for the year income Increase/(decrease) Increase/(decrease) Increase/(decrease) Basis points RM RM 2013 Quoted equity securi es 5/(5) 1,511/(1,511) - 2012 Quoted equity securi es 5/(5) 2,246/(2,246) -

In prac ce, the actual trading results may diff er from the sensi vity analysis above and the diff erence could be material.

Price risk concentra on

The following table sets out the Fund’s exposure and concentra on to price risk based on its por olio of fi nancial instruments as at the repor ng date.

Fair value Percentage of NAV 2013 2012 2013 2012 RM RM % %

Quoted equity securi es 3,022,858 4,491,950 74.9 97.5

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

Fair value Percentage of NAV 2013 2012 2013 2012 RM RM % %

Trading/Services 1,021,219 2,115,771 25.3 45.9 Industrial Product 789,079 220,641 19.6 4.8 Construc on 718,180 282,309 17.8 6.1 Proper es 264,500 - 6.6 - Consumer Products 117,480 - 2.9 - Finance 86,300 933,177 2.1 20.3 Technology 26,100 25,894 0.6 0.6 Planta on - 914,158 - 19.8 3,022,858 4,491,950 74.9 97.5

21



b. Liquidity Risk

Liquidity risk is defi ned as the risk that the Fund will encounter diffi culty in mee ng obliga ons associated with fi nancial liabili es that are to be se led 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 liabili es or cancel its units earlier than expected. The Fund is exposed to cancella on of its units on a regular basis. Units sold to unitholders by the Manager are cancellable at the unitholder’s op on based on the Fund’s net asset value per unit at the me of cancella on calculated in accordance with the Fund’s Trust Deed.

The liquid assets comprise cash, deposits with licensed fi nancial ins tu ons and other instruments, which are capable of being converted into cash within 7 days.

The following table analyses the maturity profi le of the Fund’s fi nancial assets (undiscounted where appropriate) and fi nancial liabili es in order to provide a complete view of the Fund’s contractual commitments and liquidity.

Up to 1 month RM

2013 Assets Quoted equity securi es 3,022,858 Short term deposits 1,004,712 Other assets 31,780 4,059,350 Liabili es Other liabili es 25,447 25,447 Net asset value 4,033,903 Liquidity gap 4,033,903 2012 Assets Quoted equity securi es 4,491,950 Short term deposits 103,204 Other assets 170,066 4,765,220 Liabili es Other liabili es 155,824 155,824 Net asset value 4,609,396 Liquidity gap 4,609,396

22



c. Single Issuer Risk

The Fund is restricted to invest in securi es issued by any issuer of not more than a certain percentage of its net asset value. Under such restric on, the exposure risk to the securi es of any issuer is minimised.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Accoun ng

The fi nancial statements of the Fund have been prepared in accordance with Malaysian Financial Repor ng Standards (“MFRS”) as issued by Malaysian Accoun ng Standards Board (“MASB”) and Interna onal Financial Repor ng Standards (“IFRS”) issued by Interna onal Accoun ng Standards Board (“IASB”).

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

b. First- me adop on of MFRS

These are the Fund’s fi nancial statements prepared in accordance with MFRS. For the periods up to and including the fi nancial period ended 31 August 2012, the fi nancial statements of the Fund were prepared in accordance with Financial Repor ng Standards (“FRS”) in Malaysia.

The accoun ng policies set out in Note 3 have been applied in preparing the fi nancial statements of the Fund for the fi nancial period ended 31 August 2013, the compara ve informa on presented in these fi nancial statements for the fi nancial period ended 31 August 2012 and in the prepara on of the opening statement of fi nancial posi on at 1 September 2011 (which is the Fund’s date of transi on to MFRS).

The transi on to MFRS did not give rise to any signifi cant eff ects on the fi nancial statements of the Fund.

c. Standard and interpreta ons issued but not yet eff ec ve

The Manager expect that the new MFRSs, Amendments to MFRSs and Interpreta ons which are issued but not yet eff ec ve for the fi nancial period ended 31 August 2013 will not have a material impact on the fi nancial statements of the Fund in the period of ini al applica on.

23


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTD.

d. Financial Assets

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

When fi nancial assets are recognised ini ally, they are measured at fair value, plus, in the case of fi nancial assets not at fair value through profi t or loss, directly a ributable transac on costs.

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 ini al recogni on.

Financial assets held for trading includes quoted equity securi es acquired principally for the purpose of selling in the near term.

Subsequent to ini al recogni on, fi nancial assets at FVTPL are measured at fair value. Changes in the fair value of those fi nancial instruments are recorded in “Net gain or loss on fi nancial assets at fair value through profi t or loss”.

Interest earned and dividend revenue elements of such instruments are recorded separately in “interest income” and “gross dividend income” respec vely.

ii. Loan and receivables

Financial assets with fi xed or determinable payment that are not quoted in an ac ve market are classifi ed as loan and receivables. The Fund includes deposits in fi nancial ins tu ons and short term receivable in this classifi ca on.

Subsequent to ini al recogni on, loan and receivables are measured at amor sed cost using the eff ec ve interest method. Gain or loss is recognised in profi t or loss when the loan and receivable are derecognised or impaired, and through the amor sa on process.

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

24



e. Impairment of Financial Assets

The Fund assesses at each repor ng date whether there is any objec ve evidence that a fi nancial assets is impaired.

Trade and other receivables and other fi nancial assets carried at amor sed cost

To determine whether there is objec ve 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 cul es 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 diff erence between the asset’s carrying amount and the present value of es mated future cash fl ows discounted at the fi nancial asset’s original eff ec ve interest rate. The impairment loss is recognised in profi t or loss.

The carrying amount of the fi nancial assets is reduced by the impairment loss directly for all fi nancial assets.

If in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objec vely to an event occurring a er 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 amor sed cost at the reversal date. The amount of reversal is recognised in profi t or loss.

f. Income Recogni on

Interest income is recognised using eff ec ve interest method on an accrual basis.

Dividend income is recognised on a declared basis, when the right to receive the dividend is established.

The realised gain or loss on sale of investments is measured as the diff erence between the net disposal proceeds and the carrying amount of the investment, calculated on the daily basis.

The unrealised gain or loss on change in value of investments is measured as the diff erence between the fair value and the carrying amount of the investment, calculated on a daily basis.

25



g. Cash and Cash Equivalents

For the purposes of the statement of cash fl ow, cash and cash equivalents include cash at bank and short term deposits with fi nancial ins tu on.

h. Income Tax Expense

Income tax on the profi t or loss for the year comprises current tax. Current tax is the expected amount of income taxes payable in respect of the taxable profi t for the year. Income tax is calculated on investment income less par al deduc on for permi ed expenses as provided for under Sec on 63B of the Income Tax Act, 1967.

i. Unrealised Reserves

Unrealised reserves represent the net gain or loss arising from carrying investments at their fair values at repor ng date. This reserve is not distributable in nature.

j. Financial Liabili es

Financial liabili es are classifi ed according to the substance of the collateral arrangements entered into and the defi ni ons of a fi nancial liability.

Financial liabili es within the scope of MFRS 139, are recognised in the statement of fi nancial posi on when and only when, the Fund becomes a party to the contractual provisions of the fi nancial instrument. The Fund’s liabili es which include amount due to Manager, amount due to Trustee and other payables are recognised ini ally at fair value plus directly a ributable transac on costs and subsequently measured at amor sed cost using the eff ec ve interest method.

A fi nancial liability is derecognised when the obliga on under the liability is ex nguished. Gain and loss is recognised in profi t or loss when the liabili es are derecognised, and through amor sa on process.

26



k. Func onal and Presenta on Currency

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

l. Unitholders’ Capital – NAV A ributable to Unitholders

The unitholders’ contribu ons to the Fund meet the defi ni on of pu able instruments classifi ed as equity instruments.

Distribu on equalisa on represents the average distributable amount included in the crea on and cancella on prices of units. This amount is either refunded to unitholders by way of distribu on and/or adjusted accordingly when units are cancelled.

m. Signifi cant Accoun ng Judgments and Es mates

The prepara on of fi nancial statements requires the use of certain accoun ng es mates and exercise of judgment. Es mates and judgments are con nually evaluated and are based on past experience, reasonable expecta ons of future events and other factors.

i. Cri cal judgments made in applying accoun ng policies

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

ii. Key sources of es ma on uncertainty

There are no key assump ons concerning the future and other key sources of es ma on uncertainty at the fi nancial posi on date, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabili es within the next fi nancial year.

4. MANAGER’S FEE

The Manager’s fee is computed based on 1.55% per annum of the net asset value of the Fund, calculated on a daily basis, as provided under Clause 13(2) of the Deed.

27


5. TRUSTEE’S FEE

Trustee’s fee is calculated on a daily basis at 0.07% per annum of the net asset value of the Fund, as provided under Clause 13(8) and subject to a minimum fee of RM18,000 per annum as provided under Clause 13(7) of the Deed.

6. INCOME TAX EXPENSE

Income tax is calculated at the Malaysian statutory tax rate of 25% of the es mated assessable income for the fi nancial year.

Income tax is calculated on investment income less par al deduc on for permi ed expenses as provided for under Sec on 63B of the Income Tax Act, 1967. The eff ec ve rate does not approximate the statutory tax rate mainly due to interest income exempted from tax in accordance with Schedule 6 of the Income Tax Act, 1967 and gain on disposal of investments are treated as capital in nature for tax purposes.

A reconcilia on of income tax expense applicable to net income before tax at the statutory income tax rate to income tax expense at the eff ec ve income tax rate of the Fund is as follows:

2013 2012 RM RM Net income before tax 473,348 212,229 Tax at Malaysian statutory tax rate of 25% (2012: 25%) 118,337 53,057 Income not subject to tax (137,807) (68,171) Expenses not deduc ble for tax purposes (under Sec on 63B of the Income Tax Act, 1967) 23,870 18,314 Tax expense for the year 4,400 3,200

7. QUOTED EQUITY SECURITIES

2013 2012 2011 RM RM RM

Financial assets held for trading, at FVTPL: Quoted equity securi es 3,022,858 4,491,950 1,415,710

Net gain on fi nancial assets at FVTPL comprised: Realised gain on disposals 442,582 71,694 Unrealised changes in fair values 8,407 149,112 450,989 220,806

28


7. QUOTED EQUITY SECURITIES (CONTD.)

Details of quoted equity securi es as at 31 August 2013:

Fair Percentage Units Cost value of NAV RM RM %

Trading/Services Perisai Petroleum Teknologi Bhd 136,500 177,082 184,275 4.6 Alam Mari m Resources Bhd 129,800 175,687 181,720 4.5 Media Prima Bhd 50,000 133,188 134,000 3.3 Ramunia Holdings Bhd 150,000 110,603 119,250 3.0 Time Dotcom Bhd 30,000 109,796 109,800 2.7 Perdana Petroleum Bhd 61,500 97,951 108,240 2.7 Air Asia X Bhd 95,000 115,681 97,850 2.4 MBM Resources Bhd 19,700 72,311 69,344 1.7 Integrax Bhd 9,000 17,883 16,740 0.4 1,010,182 1,021,219 25.3

Industrial Product Kossan Rubber Industries Bhd 26,000 139,468 166,920 4.2 Can-One Bhd 49,200 168,846 157,440 3.9 Kian Joo Can Factory Bhd 48,300 138,095 141,519 3.5 Coastal Contracts Bhd 45,000 126,567 121,500 3.0 Sarawak Cable Bhd 50,000 85,813 92,500 2.3 Oldtown Bhd 35,000 91,051 89,250 2.2 Favelle Favco Bhd 7,000 21,897 19,950 0.5 771,737 789,079 19.6

Construc on Kimlun Corpora on Bhd 110,000 228,290 204,600 5.1 Muhibbah Engineering (M) Bhd 88,400 137,528 190,944 4.7 Protasco Bhd 130,000 168,252 165,100 4.1 Malaysian Resources Corpora on Bhd 109,400 165,154 157,536 3.9 699,224 718,180 17.8

Proper es Eastern & Oriental Bhd 70,000 128,273 137,200 3.4 Tambun Indah Land Bhd 80,000 102,336 100,800 2.5 Encorp Bhd 25,000 29,929 26,500 0.7 260,538 264,500 6.6

29


7. QUOTED EQUITY SECURITIES (CONTD.)

Details of quoted equity securi es as at 31 August 2013 (Contd.):

Fair Percentage Units Cost value of NAV RM RM %

Consumer Product Padini Holdings Bhd 66,000 123,967 117,480 2.9 123,967 117,480 2.9

Finance Syarikat Takaful Malaysia Bhd 10,000 78,344 86,300 2.1 78,344 86,300 2.1

Technology Globetronics Technology Bhd 10,000 26,314 26,100 0.6 26,314 26,100 0.6

Total quoted equity securi es 2,970,306 3,022,858 74.9

Excess of fair value over cost 52,552

8. SHORT TERM DEPOSITS

Short term deposits were held with licenced commercial banks in Malaysia, on a daily renewal basis at the prevailing interest rate.

The weighted average interest rate and average remaining maturity of the short term deposits are as follows:

Weighted average interest rate Remaining maturity 31.8.13 31.8.12 1.9.11 31.8.13 31.8.12 1.9.11 % % % Days Days Days Short term deposits 2.95 2.95 2.90 3 4 2

30


9. OTHER RECEIVABLES

31.8.13 31.8.12 1.9.11 RM RM RM Interest income from short term deposits 81 8 9 Amount due from brokers - 139,188 18,526 Dividend receivable 3,177 - 6,190 3,258 139,196 24,725

10. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS

Net asset value a ributed to unitholders is represented by:

Note 31.8.13 31.8.12 1.9.11 RM RM RM

Unitholders’ contribu on (a) 3,460,893 4,505,334 1,640,127 Retained earnings:

Realised reserves (b) 520,458 59,917 - Unrealised reserves (c) 52,552 44,145 (104,967) 4,033,903 4,609,396 1,535,160

a. Unitholders’ contribu on

31.8.13 31.8.12 No. of units RM No. of units RM At beginning of the year 6,606,384 4,505,334 2,476,427 1,640,127 Distribu on equalisa on - 8,875 - 18,607 Add: Crea on of units 2,772,101 1,978,175 7,149,861 4,884,324 Less: Cancella on of units (4,316,890) (3,031,491) (3,019,904) (2,037,724) At end of the year 5,061,595 3,460,893 6,606,384 4,505,334

b. Realised reserves

31.8.13 31.8.12 RM RM At beginning of the year 59,917 - Net realised gain 460,541 59,917 At end of the year 520,458 59,917

31


10. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS (CONTD.)

c. Unrealised reserves

31.8.13 31.8.12 RM RM At beginning of the year 44,145 (104,967) Net unrealised gain 8,407 149,112 At end of the year 52,552 44,145

In accordance with the Deed, the maximum number of units that can be issued for circula on is 300,000,000 (2012: 300,000,000). The number of units legally or benefi cially held by the Manager, Kenanga Investors Berhad, and par es related to the Manager as at 31 August 2013 were nil (2012: nil).

Pursuant to Clause 25(1) of the Deed dated 16 April 2004, the Manager is en tled to a sales charge of not more than 8% of the net asset value of the Fund. The sales charge was 6.5% of the net asset value for the fi nancial year ended 31 August 2013.

11. NET ASSET VALUE PER UNIT

Net asset value a ributable to unitholders is classifi ed as equity in the statement of fi nancial posi on.

In line with the adop on of MFRS 139, quoted fi nancial assets have been valued at the bid prices at the close of business. In accordance with the Deed, the calcula on of net asset value a ributable to unitholders per unit for the crea on and cancella on of units is computed based on quoted fi nancial assets valued at the last done market price.

A reconcilia on of net asset a ributable to unitholders for crea ng/cancelling of units and the net asset value a ributable to unitholders per the fi nancial statements is as follows:

31.8.13 31.8.12 RM RM/Unit RM RM/Unit

Net asset value a ributable to unitholders for crea ng/ cancelling of units 4,052,018 0.8005 4,618,351 0.6991 Eff ect from adop ng bid prices as fair value (18,115) (0.0035) (8,955) (0.0014) Net asset value a ributable to unitholders per statement of fi nancial posi on 4,033,903 0.7970 4,609,396 0.6977

32


12. DISTRIBUTION EQUALISATION

Distribu on equalisa on represents the average amount of undistributed net income included in the crea on or cancella on price of units. This amount is either refunded to unitholders by way of distribu on and/or adjusted accordingly when units are released back to the Trustee.

13. INCOME DISTRIBUTION

No income distribu on was declared by the Fund for the fi nancial year ended 31 August 2013 (2012: nil).

14. PORTFOLIO TURNOVER RATIO

The por olio turnover ra o (“PTR”) for the current fi nancial year is 5.01 mes (2012: 7.69 mes).

PTR is the ra o of the average of the acquisi ons and disposals of investments of the Fund for the year to the average net asset value of the Fund, calculated on a daily basis.

15. MANAGEMENT EXPENSE RATIO

The management expense ra o (“MER”) for the current fi nancial year is 2.68% (2012: 3.13%).

MER is the ra o of total fees and recovered expenses of the Fund expressed as a percentage of the Fund’s average net asset value, calculated on a daily basis.

16. TRANSACTIONS WITH STOCK BROKING COMPANIES/FINANCIAL INSTITUTIONS

Brokerage, stamp duty Transac on Percentage and Percentage value of total clearing fee of total RM % RM %

RHB Investment Bank Bhd 7,316,501 19.2 26,197 19.4 Alliance Investment Bank Bhd 5,113,937 13.4 16,673 12.3 UBS Securi es Malaysia Sdn Bhd 4,833,447 12.7 17,250 12.8 CIMB Investment Bank Bhd 3,738,618 9.8 13,933 10.3 Kenanga Investment Bank Bhd* 3,693,829 9.7 12,938 9.6 Credit Suisse Securi es (M) Sdn Bhd 3,513,621 9.2 12,549 9.3 KAF-Seagroa & Campbell Securi es Sdn Bhd 3,191,860 8.3 11,409 8.4 Macquarie Capital Securites (M) Sdn Bhd 2,305,431 6.0 8,230 6.1 Maybank Investment Bank Bhd 1,427,539 3.8 5,023 3.7 Others 3,021,631 7.9 10,922 8.1 38,156,414 100.0 135,124 100.0

The above transac on values were in respect of quoted securi es.

* Kenanga Investment Bank Berhad is a related party of Kenanga Investors Berhad with eff ect from 19 April 2013.

33


16. TRANSACTIONS WITH STOCK BROKING COMPANIES/FINANCIAL INSTITUTIONS (CONTD.)

The directors of the Mananger are of the opinion that the transac ons with the related par es have been entered into in the normal course of business and have been established on terms and condi ons that are not materially diff erent from that obtainable in transac ons with unrelated par es. The Manager is of the opinion that the above dealings have been transacted on an arm’s length basis.

17. SEGMENTAL REPORTING

a. Business Segment

In accordance with the objec ve of the Fund, the Fund can invest around 50% to 98% in quoted equity securi es and 2% to 50% in others. The following table provides an analysis of the Fund’s revenue, results, assets and liabili es by business or geographical segments:

Quoted equity securi es Other Total RM RM RM

31.8.13 Revenue Segment income represen ng segment results 561,564 13,973 575,537 Unallocated expenditure (102,189) Income before tax 473,348 Tax (4,400) Income a er tax 468,948

Assets Investments 3,022,858 1,004,712 4,027,570 Unallocated assets 31,780 4,059,350 Liabili es Unallocated liabili es 25,447 Net asset value a ributable to unitholders 4,033,903 4,059,350

31.8.12 Revenue Segment income represen ng segment results 284,034 6,019 290,053 Unallocated expenditure (77,824) Income before tax 212,229 Tax (3,200) Income a er tax 209,029

Assets Investments 4,491,950 103,204 4,595,154 Unallocated assets 170,066 4,765,220 Liabili es Unallocated liabili es 155,824 Net asset value a ributable to unitholders 4,609,396 4,765,220

34


17. SEGMENTAL REPORTING (CONTD.)

b. Geographical Segments

As all of the Fund’s investments are located in Malaysia, the Fund does not have separate iden fi able geographical segments.

18. FINANCIAL INSTRUMENTS

a. Classifi ca on of fi nancial instruments

The Fund’s fi nancial assets and fi nancial liabili es are measured on an ongoing basis at either fair value or at amor sed cost based on their respec ve classifi ca on. The signifi cant accoun ng policies in Note 3 describe how the classes of fi nancial instruments are measured, and how income and expenses, including fair value gain and loss, are recognised.

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

Financial assets Loans and Financial at FVTPL receivables liabili es Total RM RM RM RM

31.8.13 Assets Investments 3,022,858 - - 3,022,858 Short term deposits - 1,004,712 - 1,004,712 Other receivables - 3,258 - 3,258 Cash at bank - 8,293 - 8,293 3,022,858 1,016,263 - 4,039,121 Liabili es Amount due to Manager - - 6,109 6,109 Amount due to Trustee - - 1,480 1,480 Other payables - - 17,858 17,858 - - 25,447 25,447

31.8.12 Assets Investments 4,491,950 - - 4,491,950 Short term deposits - - 103,204 103,204 Other receivables - - 139,196 139,196 Cash at bank - - 12,318 12,318 4,491,950 - 254,718 4,746,668 Liabili es Amount due to Manager - - 9,082 9,082 Amount due to Trustee - - 1,475 1,475 Other payables - - 145,267 145,267 - - 155,824 155,824

35


18. 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 ac ve markets.

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

Level 1 Level 2 Level 3 Total RM RM RM RM

Investments: - Quoted equity securi es (31.8.2013) 3,022,858 - - 3,022,858 - Quoted equity securi es (31.8.2012) 4,491,950 - - 4,491,950 - Quoted equity securi es (1.9.2011) 1,415,710 - - 1,415,710

Level 1: Quoted prices in ac ve 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 values of quoted equi es securi es are determined by reference to Bursa Malaysia Securi es Berhad’s bid price at repor ng date.

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

Cash and cash equivalents, amount due to Manager/Trustee and other receivables/payables

The carrying amounts approximate fair values due to the rela vely short term maturity of these fi nancial instruments.

36


19. CAPITAL MANAGEMENT

The capital of the Fund can vary depending on the demand for crea on and cancella on to the Fund. The Fund’s approved fund size and units in issue at the end of the fi nancial year is disclosed in Note 10.

The Fund’s objec ves for managing capital are:

a. To invest in investments mee ng the descrip on, risk exposure and expected return indicated in its prospectus;

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

c. To maintain suffi cient liquidity to meet the expenses of the Fund, and to meet cancella on requests as they arise; and

d. To maintain suffi cient fund size to make the opera ons of the Fund cost-effi cient.

No changes were made to the capital management objec ves, policies or processes during the current fi nancial year.

20. SIGNIFICANT EVENTS

On 19 March 2013, IFB Management Holdings Sdn Bhd, the holding company of the Manager of the Fund has entered into a condi onal Sales and Purchase agreement with Kenanga Investors Berhad on the disposal of ING Funds Berhad.

The High Court of Malaya has granted the term of the ves ng order on 25 April 2013 and the eff ec ve transfer date of the businesses will fall on 8 June 2013.

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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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