kenanga oneprs growth fund...2018/19 global growth to 3.7% (previously 3.9%), the ﬁ rst downgrade...

ANNUAL REPORT

For the Financial Year Ended 31 July 2019

KENANGA ONEPRS GROWTH FUND

KENANGA ONEPRS GROWTH FUND

Contents Page

Corporate Directory ii

Directory of PRS Provider’s Offi ces iii

Fund Information 1

PRS Provider’s Report 2 - 12

Fund Performance 13 - 15

Trustee’s Report 16

Independent Auditors’ Report 17 - 19

Statement by the PRS Provider 20

Financial Statements 21 - 56

ii Kenanga OnePRS Growth Fund Annual Report

CORPORATE DIRECTORY

Private Retirement Scheme (PRS) Provider: Kenanga Investors Berhad (Company No. 353563-P)

Registered Offi ce Business Offi ceLevel 17, Kenanga Tower Level 14, Kenanga Tower237, Jalan Tun Razak 237, Jalan Tun Razak50400 Kuala Lumpur, Malaysia 50400 Kuala Lumpur, MalaysiaTel: 03-2172 2888 Tel: 03-2172 3000Fax: 03-2172 2999 Tel: 03-2172 3080 E-mail: [email protected] Website: www.KenangaInvestors.com.my

Board of Directors Investment CommitteeDatuk Syed Ahmad Alwee Alsree (Chairman) Syed Zafi len Syed Alwee (IndependentSyed Zafi len Syed Alwee (Independent Member) Director) Peter John Rayner (IndependentPeter John Rayner (Independent Member) Director) Imran Devindran bin Abdullah (IndependentImran Devindran bin Abdullah (Independent Member) Director) Ismitz Matthew De AlwisIsmitz Matthew De Alwis Norazian Ahmad Tajuddin (Independent Norazian Ahmad Tajuddin (Independent Member) Director)

Company Secretary: Norliza Abd Samad (MAICSA 7011089)

Level 17, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia.

Scheme Trustee (“Trustee”): Maybank Trustees Berhad (5004-P)

Registered and Business Address 8th Floor, Menara Maybank, 100, Jalan Tun Perak, 50050 Kuala Lumpur.Tel: 03-2074 8580 / 8952 Email: [email protected]

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

Administrator: Private Pension Administrator Malaysia (PPA)

Level 6, Menara Mudajaya, Jalan PJU 7/3, Mutiara Damansara, 47180 Kuala Lumpur. Tel: 03-6204 8990 Fax: 03-6204 8995 Website: www.ppa.my Email: [email protected]

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

iiiKenanga OnePRS Growth Fund Annual Report

REGIONAL BRANCH OFFICES:

Kuala LumpurLevel 13, Kenanga Tower237, Jalan Tun Razak50400 Kuala Lumpur, MalaysiaTel : 03-2172 3123 Fax : 03-2172 3133

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

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

Penang5.04, 5th Floor, Menara Boustead Penang No. 39, Jalan Sultan Ahmad Shah 10050 PenangTel : 04-210 6628Fax : 04-210 6644

Miri 2nd Floor, Lot 1264Centre Point Commercial CentreJalan Melayu98000 Miri, Sarawak Tel : 085-416 866 Fax : 085-322 340

Seremban 2nd Floor, No. 1D-2, Jalan Tuanku Munawir 70000 Seremban, Negeri Sembilan Tel : 06-761 5678 Fax : 06-761 2242

Johor BahruNo. 63, Jalan Molek 3/1Taman Molek81100 Johor Bahru, JohorTel : 07-288 1683 Fax : 07-288 1693

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

KuantanGround Floor ShopNo. B8, Jalan Tun Ismail 125000 Kuantan, PahangTel : 09-514 3688Fax : 09-514 3838

IpohSuite 1, 2nd Floor,No. 63, Persiaran Greenhill30450 Ipoh, Perak, MalaysiaTel : 05-254 7573 / 7570 / 7575Fax : 05-254 7606

Kota KinabaluLevel 8, Wisma Great EasternNo. 68, Jalan Gaya88000 Kota Kinabalu, SabahTel : 088-203 063 Fax : 088-203 062

Petaling Jaya44B, Jalan SS21/35, Damansara Utama47400 Petaling Jaya, Selangor Tel : 03-7710 8828 Fax : 03-7710 8830

DIRECTORY OF PRS PROVIDER’S OFFICES

1 Kenanga OnePRS Growth Fund Annual Report

1. FUND INFORMATION

1.1 Fund Name

Kenanga OnePRS Growth Fund (PKOGF or the Fund)

1.2 Fund Category / Type

Core (Growth)

1.3 Investment Objective

The Fund seeks to provide capital growth.

1.4 Investment Strategy

The Fund seeks to achieve its objective by investing a maximum of 70% of the Fund’s NAV in equities and at least 30% of the Fund’s NAV in fi xed income instruments and/or money market instruments.

1.5 Performance Benchmark

A composite of All MGS Index (30%) and FBM 100 (70%).

The risk profi le of the Fund is not the same as the risk profi le of the performance benchmark.

1.6 Distribution Policy

Distribution (if any) will be declared annually and reinvested into the Fund.

Members who have reached their retirement age can opt to have the distribution paid to them by cheque or to their bank account.

1.7 Breakdown of unit holdings of the Fund as at 31 July 2019

Size of holdings No. of members No. of units held 5,000 and below 9,531 27,501,546 5,001 - 10,000 2,654 19,412,978 10,001 - 50,000 3,183 59,019,558 50,001 - 500,000 98 9,860,471 500,001 and above 5 4,128,962 Total 15,471 119,923,515

2Kenanga OnePRS Growth Fund Annual Report

2. PRS PROVIDER’S REPORT

2.1 Explanation on whether the Fund has achieved its investment objective

During the fi nancial year under review, the Fund fulfi lled its stated investment objective to provide long-term capital growth, having invested not more than 70% of the Fund’s NAV in equities, at least 30% in fi xed income and money market instruments, and up to 5% in cash and cash equivalents. As variation to collective investment scheme (CIS) limit was obtained earlier, the investment in any CIS was allowed up to 70% of the Fund’s Net Asset Value (NAV) until 19 May 2019.

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

Performance Chart Since Launch (20/11/2013 - 31/07/2019)Kenanga OnePRS Growth Fund vs Benchmark*

Source: Novagni Analytics and Advisory * A composite of All MGS Index (30%) and FBM 100 (70%)

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

During the fi nancial year under review, up to 70% of the Fund’s NAV was invested in any CIS, i.e. 69% in Kenanga Growth Fund for equities investment and the balance in Kenanga Bond Fund between 1 August 2018 to 17 April 2019. Since 18 April 2019, the fund invested directly into equity, fi xed income instruments and money market instruments.

On the equity front, the Fund invested mainly in the Malaysian equities and continued with its strategy of investing in companies with sustainable business models and competent management, whilst trading at a discount to their intrinsic / fair value. Given the heightened volatility ignited by uncertain external environment and domestic policies, the Fund adopted a core defensive strategy coupled with trading approach. Sectors the Fund favoured are consumer, REITs, and technology, while we stay selective in the construction and oil and gas space. Meanwhile, on the fi xed income portion, the Fund was mainly invested in corporate bonds of issuers with strong credit profi le.


2.4 The Fund’s asset allocation as at 31 July 2019 and comparison with the previous fi nancial year

Asset 31 Jul 2019 31 Jul 2018Listed equity securities 58.4% -Listed collective investment schemes 2.5% -Unlisted collective investment schemes - 97.9%Unlisted corporate bonds 21.6% -Unlisted quasi government bonds 1.7% -Short term deposits and cash 15.8% 2.1%

Reason for the differences in asset allocation

As at 31 July 2019, the Fund invested 60.9% in equity and 23.3% in fi xed income instruments as compared to investment in both asset classes via CIS during the previous fi nancial year.

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

Year under review Kenanga OnePRS Growth Fund -2.28% A composite of All MGS Index (30%) and FBM 100 (70%) -3.46% Source: Lipper; Novagni Analytics and Advisory

For the fi nancial year under review, the Fund fell 2.28% outperforming the 3.46% fall in the composite benchmark of 30% MGS and 70% FBM100. The slight outperformance was mainly due to stock selection and higher yields from corporate bonds investment.

2.6 Review of the market

Equity market review

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (KLCI) fell 8.58% for the year under review (1 August 2018 - 31 July 2019). The KLCI was in a correction mode during the year. The KLCI hit the low of 1,598.32 points on 24 May 2019 before recovering to 1,634.87 points on 31 July 2019.

US stock indices ended positively in August 2018 led by solid US corporate earnings, despite the intra-month volatility caused by the on-going trade negotiations between the US and international trade partners. U.S. consumer spending increased a solid 0.4% in July 2018, the sixth straight month of healthy gains, suggesting strong economic growth early in the 3Q18, while a measure of underlying infl ation hit the US Federal Reserve’s 2% target for the third time this year. Elsewhere, investors were focused on emerging markets, including Turkey and Argentina, which are both embroiled in currency crises that Wall Street fears could have knock-on effects across the globe.


2.6 Review of the market (contd.)

Equity market review (contd.)

On the local front, 2Q18 Gross Domestic Product (GDP) growth of 4.5% year-on-year (YoY) was reported in August 2018, which was below market expectations. This was the slowest pace since 4Q16 as the country’s mining and agriculture sectors contracted at 2.2% and 2.5% respectively. Nevertheless, the underlying data are better than the headline implies. The domestic demand growth accelerated to 5.6% YoY from 4.1% YoY in 1Q18 driven by consumption. The Sales and Services Tax (SST) was reintroduced on 1 September 2018 with proposed sales tax at 5% and 10%, while service tax at fi xed rate of 6%. The government is drawing up new directions for the 11th Malaysia Plan which will be tabled in the Parliament in October 2018.

Despite escalation in US-China trade tension, US stock indices continued to hit new highs, on the back of stronger than expected macro-economic data in September 2018. As widely expected, the Federal Reserve raised interest rate by another 25 basis points (bps) at September Federal Open Market Committee (FOMC) meeting, which refl ected the positive economic outlook. Elsewhere, the European Central Bank (ECB) reiterated expectation of no rate change until at least summer 2019. However, concerns over potential no-deal Brexit and Italy budget capped upside in the European markets.

October 2018 was a brutal month for equity markets. Equities tumbled amidst escalated US-China trade tension, rising treasury yields, disappointment over apple suppliers’ profi ts and UK’s introduction of digital tax. The International Monetary Fund (IMF) cut 2018/19 global growth to 3.7% (previously 3.9%), the fi rst downgrade since July 2016. IMF highlighted that risks to global outlook have risen due to the trade tensions and sharper interest rate hikes. 10-year US treasury yield surged to 3.234%, the highest in seven years in early October before moderating to 3.144% by month end. The October correction sent Dow Jones, S&P and Nasdaq down month-on-month (MoM) by 5.1%, 6.9% and 9.2% respectively, erasing most of the gains in 2018. While China’s 3Q GDP growth came in within expectation at 6.5%, October manufacturing purchasing manager’s index (PMI) dropped to 50.2 from 50.8 in September, the slowest in 2 years. Weighed by domestic slowdown and trade tension, the Shanghai and Shenzhen Index plunged 7.8% and 10.2% respectively. To counter the slowdown, China cut banks reserve requirement for the 4th time for the year to support lending to corporates and small and medium-sized enterprises (SMEs). In addition, Chinese regulators also voiced support measures for the fi nancial markets as holdings of many listed companies are pledged for collateral loans. The Chinese Yuan depreciated 1.56% against US dollar to close at 6.98 by the end of October.

Locally, the KLCI was not spared by the respite in October 2018. The KLCI slipped 4.7% MoM to 1,709.27 points on the back of foreign selling and worries over introduction of new taxes which may dent capital markets. Offi cials reiterated that the upcoming 2019 budget would be diffi cult and require sacrifi ces, adding jitters into investors’ sentiment. The FBM Small Cap Index corrected a sharper 11.4% due to risk-off sentiment. While the termination of MRT2 underground works was later avoided with main contractor Gamuda-MMC JV offering a bigger cost cut, the drama threw the entire construction sector into doldrums.




Malaysia’s new government announced its maiden Budget 2019 in November 2018, with the increase of casino gaming tax and introduction of new taxes which include sugar tax, digital tax and airport departure levy. The economy is expected to grow at 4.8%/4.9% in 2018/2019 driven by private sector consumption growth of 9%/9.9% in 2018/2019 respectively. Fiscal defi cit is projected at 3.7% in 2018 and will narrow to 3.4% in 2019. The Budget however did not provide any boost to the market. Malaysia 3Q18 GDP rose 4.4% YoY driven largely by consumer and private sector spending. The KLCI slipped 1.7% MoM to the year’s low of 1,679.86 points on the back of foreign selling and disappointing 3Q earnings.

Despite a 90-day trade truce between US and China, December witnessed a sharp correction for equity markets especially for developed markets. Markets tanked after Huawei’s Chief Financial Offi cer was arrested in Canada on US request for violation of US sanctions. Later US indicted another 2 Chinese hackers for stealing of intellectual property and confi dential business information. Meanwhile, the Fed raised interest rate for the fourth time in 2018 but forecasted 2 rate hikes in 2019 (versus previous forecast of 3 rate hikes). US government also experienced partial shutdown due to the stalemate between Trump and the House over border wall funding. Investors’ sentiment however improved towards month end after Trump hailed big progress on trade talks after a call with Xi JinPing. The KLCI rose 0.64% MoM to close the year of 2018 at 1,796.81 points on window dressing activities.

US markets rose in January in comparison with the rough correction back in December 2018, with the Dow Jones Industrial Average Index, S&P 500 Index and Nasdaq Composite Index rising 7.2%, 7.9%, and 9.7% respectively. The Fed kept interests rates unchanged at 2.25%-2.50% following its fi rst FOMC meeting in 2019. The central bank turned more dovish indicating it will be patient in its monetary normalisation plan given moderating economic activity, muted infl ation pressures and market uncertainty arising from concerns regarding trade war and global growth. Over in the European Union (EU), the Euro STOXX 50 rose 5.3% mimicking US markets and the ECB left its policy rates unchanged. In the UK, Brexit uncertainty continues as British parliament votes on rejecting Prime Minister Theresa May’s EU withdrawal agreement. This was followed by May’s administration winning a vote of no-confi dence in the House of Commons by a thin margin.

The KLCI closed at 1,683 in January 2019, down by 0.4% MoM. It has also underperformed FBM Small Cap Index that rose 7.2% during the month. The underperformance of KLCI was attributable to the decline in exporters such as Top Glove (-13% MoM) and Hartalega (-12% MoM) due to the strengthening of Ringgit. Also, the lifting of US sanctions on aluminium giant Rusal at the end of December had a negative spillover effect affecting up-stream aluminium players such as Press Metal which saw a 12% decline in its share price during the month. Nevertheless, plantation stocks outperformed due to the surge in crude palm oil prices and while both Genting Berhad and Genting Malaysia registered strong gains after oversold levels in December 2018.




US markets rose for a second month in a row in February, with the Dow Jones Industrial Average Index, S&P 500 Index, and Nasdaq Composite Index rising 3.7%, 3%, and 3.4% respectively. European markets were generally positive as well. US President Donald Trump announced he will be delaying US tariffs on China until further notice. The FBMKLCI performed decently and closed at 1,683.5, up by 1.44% MoM. Higher oil prices boosted sentiment in oil and gas stocks pushing the Bursa Energy Index up 12.2% MoM making it the biggest sectorial winner in February. Malaysia’s GDP climbed to 4.7% in 4Q18 thanks to surprising resilience of household spending and the service sector. Current account surplus was higher at 3.98% of GDP in 4Q18. Malaysia’s palm oil stockpile decline 7% MoM in January boosted by strong exports and drop in production. The government has begun talks with Gamuda to negotiate the acquisition of four highway concessions.

In March, US markets continued its positive streak with the Dow Jones Industrial Average Index, S&P 500 Index, and Nasdaq Composite Index rising 0.1%, 1.8%, and 2.6% respectively. However, the Fed Yield Curve inverted, spooking investors as such inversion normally precedes a recession. Over to the EU, the central bank decided to keep rates at 0% and announced a new series of long-term lending operation to increase liquidity and counter the slow growing economy while the U.K. parliament rejected the EU withdrawal agreement for the third time, setting the motion for a no deal Brexit on April 12.

US markets touched one-year high in April with the Dow Jones Industrial Average Index, S&P 500 Index, and Nasdaq Composite Index rising 2.56%, 5.34%, and 6.15% respectively, boosted by stronger than expected macro-economic data and solid corporate earnings. After a temporary inversion, the yield curve normalized during the month, which alleviated recession concern. Over to Asia, the MSCI Asia Ex-Japan Index went up by 1.84% in April, supported by better than expected Chinese macro-economic data and early signs of progress in US-China trade negotiations. Locally, the FBMKLCI index edged down 0.08%, while the FBM Small Cap index gaining 7.16% during the month. The weakness in blue chip index was led by losses in banking names after Bank Negara’s cautious tone on the economy which ignited concern over Overnight Policy Rate (OPR) cut, and decline in a heavy-weight utility stock following unexpected secondary placement by a government-linked company (GLC). The mid-to-small cap space, however, continued its uptrend, boosted by positive sentiment following revival of mega infrastructure projects such as the East Coast Rail Link (ECRL) and Bandar Malaysia.

The renewed US-China trade tension with both countries raising tariffs against each other triggered a widespread selloff in May. The selloff also spilled over into the technology sector as US companies were banned from doing business with Huawei. In response to that, China toughened its stance on the trade war in the White Paper and emphasized that a trade deal must be mutually benefi cial, indicating further delay of a potential trade deal. Brent oil price fell 11.4% MoM in May as trade tensions weigh on market sentiment and global economy outlook. On the domestic front, Bank Negara Malaysia (BNM) cut OPR by 25 bps to 3%, the fi rst change in 8 policy meetings which is negative for Banks’ net interest margins and companies with high cash holdings.




Asian equities rallied in June as markets priced in an aggressive Fed easing this year as weak US jobs data raised hopes for US interest rate cuts in addition to a tentative trade truce in the trade dispute between US and China ahead of the G20. Hong Kong’s fi nancial markets came under pressure as protests against the territory’s controversial extradition shut down key parts of the city. On the domestic front, the KLCI rose 1.3% MoM (or 21.4 points) in June but fell 1.1% in 1H19 to close at 1,672 pts at the end of June 2019. Malaysia witnessed net foreign outfl ow of RM4.8 billion in 1H19 due to the uninspiring results released by Malaysian corporates, and global uncertainties.

The KLCI started July on a positive note, rising to a high of 1,690 points thanks to optimism from Fed’s monetary easing and continued trade talks between US-China. The KLCI however did not hold on to the gains and ended the month at 1,635 points. The KLCI fell 37 points or 2.2% MoM in July 2019 and 3.3% in 7M19. Foreign investors were marginal net seller of RM79 million in July. For the fi rst seventh months of 2019, net foreign outfl ow was RM4.8 billion due to the uninspiring corporate results on the back of global economy slowdown.

Fixed income market review

Beginning of August, the FOMC kept the Federal Funds Rate (FFR) unchanged at 2%, with hints of a hike in September as anticipated. The US Treasury (UST) yield curve continued to fl atten in August with its spread narrowing to 23 basis points. Despite increasing debt supply along with another two rate hikes for the year, the UST market rallied, with the 2-year yield closed 4 bps lower at 2.63%, while the 10-year yield was down 10 bps to 2.86% due to safe haven fl ows arising from concerns over global trade wars. Similarly, the Malaysian Government Securities (MGS) also rallied during the month, partly attributed to the release of weaker GDP growth of 4.5% YoY for 2Q18 (1Q18: 5.4% YoY). As investors’ interests were seen mainly on the short to medium MGS, the MGS benchmark yield curve bullish steepened to 56 bps with 3-year yield rallied the most at 7 bps lower to 3.51% vs 10-year yield down by 3 bps to 4.04%.

Moving into September, the UST yield curve steepened slightly for the fi rst time in six months, as the 10-year yield increased by 20 bps MoM to 3.06% vis-à-vis a 19 bps MoM increase in 2-year to 2.82%. The selloff in UST came under upward re-pricing pressure ahead of the FOMC meeting. As expected, the Federal Reserve (Fed) hiked the FFR by 25 bps to 2.25% on 27 September, while releasing a statement without reference to an “accommodative” policy; which was deemed rather dovish by market players. Locally, BNM on 5 September held its OPR unchanged at 3.25%, stating that the economy should stay on a steady growth path but heightened trade tensions are contributing to immediate term downside risks. After two consecutive months of gains, MGS came under selling pressure amid risk-off in the markets as lingering concerns over global trade war and selloffs in emerging markets. Consequently, the MGS benchmark yield curve bearish fl attened during the month to 47 bps, as the 3-year climbed 12 bps higher MoM to 3.60%, while the 10-year saw some support from month-end rebalancing fl ows and closed 3 bps higher MoM to 4.07%.



Fixed income market review (contd.)

Subsequently in October, Fed Chair Powell surprised the market with a hawkish speech stating that the Fed is still a long way from neutral rates, which stoked the global markets with high possibilities for additional rate hikes. As a result, the UST yields rose higher across the curve but eased slightly towards the fi nal week of the month due to risk-off sentiments amid political rumblings in the EU and lackluster corporate earnings in the US. The UST yield curve continued to steepen for another month (2x10 spread of 27 bps versus 24 bps in previous month) as the 10-year yield increased by 8 bps MoM to 3.14% vis-à-vis +5 bps in 2-year yield to 2.87%. On the local bond market, selling pressure was seen across the curve after Moody’s indicated credit negative for Malaysia in the event of a budget defi cit expansion in the budget. To recap, the government hinted that the fi scal defi cit would go beyond the target set during Budget 2018; citing the transitional period for the new administration while revising 2020 fi scal defi cit target to 3.0% to GDP. As such, the 3-year, 5-year, 7-year and 10-year MGS yields closed 2 bps - 6 bps higher MoM at 3.66%, 3.79%, 4.01% and 4.09% respectively at the end of the month.

In the beginning of November, the results of the US mid-term election turned out to be widely expected with the Democrats fi nally gaining control over the House of Representatives after 8 years in the minority while the Republicans maintained their grip of the Senate. Meanwhile, in the FOMC meeting on 8 November 2018, Fed left the FFR unchanged at 2.25% as expected, while the statement affi rms a December hike. Towards the fi nal week of November, Fed Chairman Jerome Powell described the current level of interest rates as “just below” neutral, which caused the UST to rally with the 2-year yield closed lower by 8 bps MoM at 2.79% and 10-year down by 15 bps MoM to 2.99%. Locally, BNM maintained the OPR at 3.25% during the Monetary Policy Committee (MPC) meeting on 8 November. On the bond market, it was another bearish month due to budget defi cit concerns with the recent plunge in oil prices. Consequently, foreign holdings of MGS also declined by RM5.4 billion (38.8% foreign share of MGS) in November versus infl ow of RM4.7 billion in October (40.7%). As such, the 3-year, 5-year, 7-year and 10-year benchmark MGS yields closed 3 bps - 7 bps higher MoM at 3.69%, 3.86%, 4.04% and 4.13% respectively end-November.

In the fi nal month of year 2018, UST experienced one of the strongest rallies as the yield curve shifted sharply lower, with 2Y and 10Y dipped 30 bps to 2.49% and 2.69% respectively. The UST rally was spurred by headlines on US government shutdown as well as prospects of slower pace of monetary policy tightening guided by the Fed at the December FOMC meeting. The Fed dot plot now indicates a two rate hikes for 2019, while market is leaning for one instead. As widely expected, the Fed raised its FFR by 25 bps to 2.50% on 19 December but lowered its projections for future hikes. Mirroring the bullish UST movements, the MGS also trended lower by smaller range of 5 bps-10 bps across all tenure, with the 3Y, 5Y, 7Y and 10Y benchmark MGS yields closed month-end at 3.61%, 3.76%, 3.99% and 4.07% respectively.

Moving into January 2019, UST yield curve fl atten and shifted lower on safe-haven bids as unresolved trade issues between US and China continue to linger, with 2Y and 10Y dipped 3 bps and 6 bps respectively to 2.46% and 2.63%. The UST rallied another month due to the ongoing partial US government shutdown as well as the upcoming debt-ceiling




revisit in early March 2019. Mirroring the bullish UST movements, the MGS also trended lower but at a smaller quantum of 1 bps-3 bps in only 3Y and 10Y benchmarks in January. The 3Y, 5Y, 7Y and 10Y benchmark yields closed month-end at 3.58%, 3.76%, 3.99% and 4.06% respectively. Meanwhile, in the MPC meeting on 24 January, BNM maintained the OPR at 3.25%.

Thereafter in February, UST yield curve bearish steepened as the long-end sold off on risk-on mode due to stronger-than-expected 4Q18 US GDP growth of 3.1% YoY from 3.0% YoY in 3Q18, bringing the full year GDP growth to 2.9% from 2.2% in 2017. As a result, the 2Y and 10Y UST yields rose 6 bps and 9 bps to 2.52% and 2.72% respectively. Locally, the MGS market was very upbeat on emerging market infl ows as Ringgit touched 4.06-4.07 levels against the US dollar. Interest was more apparent on the longer-ends with the 7Y and 10Y yields down by 12 bps and 17 bps MoM to 3.87% and 3.89% respectively. Meanwhile, the 3Y and 5Y also trended lower but at a smaller quantum of 1 basis point and 6 bps to 3.57% and 3.70% respectively.

Going into March, UST reverted to its bullish fl attening yield curve following the Fed’s FOMC statement on March 20, indicating a change in projection from two hikes to a median projection of its dot plot signaling no hike at all for 2019, and just one for 2020. During the FOMC meeting, the FFR was maintained at 2.50%; policymakers are adopting a patient stance as US economy has cooled so far this year, with ‘slight-to-moderate’ growth across most of its district. The dovish Fed statement and consensus expectation of a slower 2019 GDP forecast to 2.4% from 2.5% estimated earlier as a result of the unresolved US-China trade confl icts, sent the 2Y and 10Y UST yields to fall by 26 bps and 31 bps to 2.26% and 2.41% respectively month-end as investors are expecting a rate cut to follow suit. Moving on to Malaysia, BNM also maintained the OPR at 3.25% during the MPC meeting on 5 March. In the MPC statement, BNM stated that it now expects infl ation to stay low in the immediate term and be “broadly stable” in 2019 as compared to 2018, after previously saying that it would trend higher. As a result of the more cautious tone, some economists started to expect BNM to cut its OPR which sparked strong buying momentum in MGS across all tenures. With investors pricing in the 25 bps rate cut as early as next meeting in May, the 3Y, 5Y, 7Y and 10Y yields tumbled 19 bps, 17 bps, 15 bps, and 12 bps respectively to close at 3.38%, 3.53%, 3.72% and 3.77% month-end.

In April, the UST market experienced some bond sell-off, led by the 10Y rising 9 bps MoM to 2.50% as US-China trade negotiations have been showing encouraging progress, which bearish steepened the yield curve during the month. Meanwhile, the 2Y UST yield remained stable at 2.27% (+1 basis point) as investors kept their expectation of a rate cut. Locally, the triple negative news fl ow of Norwegian Sovereign Wealth Fund cutting exposure on Emerging Markets fi xed income holdings, FTSE Russell Index potential exclusion of Malaysia from the FTSE World Government Bond Index and Moody’s credit negative warning on government’s aid of RM6.2 billion to Felda during mid of April caused selling pressure with yields spiking up by 11 bps - 20 bps. However, the kneejerk reaction was short-lived supported by abundant domestic liquidity. The MGS recovered most of its losses before month-end with the 3Y, 5Y and 7Y yields climbed 3 bps - 6 bps MoM to close at 3.41%, 3.59% and 3.76% respectively as at end-April. Meanwhile, 10Y stood stable at 3.78% month-end, up 1 basis point MoM.




Subsequently in May, UST yield curve bullish fl attened on the back of heightened worries over the impact of the long-drawn US-China trade barriers on both US and global growth. President Donald Trump ratchets up further trade tensions with China, which involves the imposition of 25% tariffs on about US$200 billion of Chinese goods, as well as imposing a new 5% tariffs on all Mexican imports (which was later called off). As a result, it heightened expectations that the Fed will cut interest rates in 2019, sending the 2Y and 10Y UST yields tumbling down by 35 bps and 38 bps to 1.92% and 2.13% respectively, a fresh 20-month low. Locally, the MPC decided to reduce the OPR by 25 bps to 3.00% on 7 May, which was intended to preserve the degree of monetary accommodativeness in supporting a steady growth in the wake of downside risks to global and local growth. As the rate cut was priced in earlier, the 3Y and 10Y MGS benchmark yields were largely unchanged at 3.40% (-1 basis point) and 3.78% respectively. Meanwhile, the bellies of the curve gained the most during the month; with 5Y and 7Y yields down by 6 bps and 7 bps, closing at 3.53% and 3.69% respectively as at end-May. In 1Q2019, Malaysia’s GDP stood at 4.5% (1Q2018: 5.3%), mainly anchored by the services, manufacturing and agriculture sectors.

Safe-haven fl ows continued in June amid the extended trade tensions and global growth concerns leading to heightened expectations of further rate cuts, sending the 2Y benchmark UST 16 bps lower MoM to 1.78% (lowest since November 2017) and the 10Y yield down by 12 bps to 2.01% (lowest since November 2016), bullish steepening the yield curve. As widely expected, the Fed on 19 June kept rates unchanged at the target range of 2.25% to 2.50% during its FOMC meeting. In its statement, Fed withdrew its patient stance on monetary policy and dropped hints that it is willing to cut rates to support the waning growth momentum in the US amidst global trade uncertainties. As a result of the dovish statement, fed funds futures is now pricing in 100% probability of a rate cut at the next FOMC meeting in July. Taking queue from the UST movements, MGS also rallied during the month. Yield curve bullish fl attened as the 10Y fell by 15 bps to 3.63%, while 2Y closed 10 bps lower at 3.30%. Market players started to weigh the possibility of another OPR cut by BNM this year on account of potential slower economic growth due to the ongoing global trade issues.

July was a volatile month for UST, from safe-haven fl ows as a result of ongoing trade wars

grinding the yields down, to improved corporate earnings and better-than-expected 2Q19 GDP growth of 2.1% YoY versus consensus forecast of 2.0% as well as strong labour market, pushing the yields back up. On a MoM basis, yield curve bearish fl attened led by the 2Y UST as yield climbed 11 bps to 1.87%, while 10Y remained stable, up 1 basis point to 2.02%. As widely expected, the Fed lowered the target range for the FFR by 25 bps to 2% to 2.25% in the FOMC meeting held month-end. This is the fi rst rate cut from Federal Reserve since the Great Recession in 2008, calling it a “mid-cycle adjustment” to insure against downside risks. Moving on to Malaysia, BNM maintained the OPR at 3.00% during the MPC meeting on 9 July. The short to medium benchmarks were largely stable; 3Y MGS yield closed 1 basis point lower month-end to 3.29% and in contrast, 5Y yield closed 1 basis point higher to 3.43%, while 7Y yield was unchanged at 3.55%. Meanwhile, investors continued to extend duration sending 10Y MGS yield down by 4bps to 3.59%. On infl ation, the Consumer Price Index (CPI) in June increased 1.5% YoY, after




remaining at a low 0.2% YoY for the past 3 months. BNM projected the headline infl ation to rise in the coming months due to low base effects from zero-rating of the Goods and Services Tax (GST) for 3 months since 1 June 2018.

Equity market outlook

On the external front, investors will be following developments in the US-China trade tension, after US President Trump tweeted on 1 August that US will slap 10% tariffs on US$300 billion of Chinese imports starting from 1 September 2019. Investors will also be following Brexit developments. We expect equity markets to remain volatile in the near term due to the re-escalating US-China trade tension impacting the already weaker global growth outlook. While major central banks have maintained or switched towards easing bias providing the necessary liquidity support, situation remains fl uid with September appearing as a crucial period to gauge the direction on trade negotiations.

Based on historical data, the KLCI’s performance tends to be negative in August, having registered an average MoM loss of 0.6% over the past 10 years and a negative return of 1.8% over the past 40 years. On the local front, the key event to watch in August is the 2Q results reporting where investors will be watching for potential signs of a turnaround in corporate earnings delivery. Also in focus will be the 2Q19 GDP release on 16 August and a potential announcement on the power reform policy. Investors will also be tracking the MSCI quarterly index rebalancing review which will be announced on 7 August 2019. The rebalancing could spell outfl ow for KLCI as weighting in China A-share is being increased.

Fixed income market outlook

Fed Chief Jerome called the cut end-July a “mid-cycle adjustment”, stating that the FOMC did not see a marked economic weakness that would necessitate a longer rate-cutting cycle. Nevertheless, the Fed will continue to be data-dependent and watch the incoming economic data closely. As trade wars remained, growth concerns led the market to continue expecting another two rate cuts this year. As a result, strong buying momentum in both UST and MGS sent the yields tumbling month to-date.

Locally, some economists are expecting another rate cut this year and one rate cut next year. However, we opined the 25 bps cut in May should provide suffi cient support to growth through 2019 and expect BNM to cut rate early next year. However, if downside risk to growth materializes or fi nancial conditions tighten, further OPR cut is possible. In addition, with infl ation low and below tolerance threshold in the near term, BNM has room for a second 25 bps OPR cut in 2019, if need be.

Fund strategy

In view of the external headwinds, we continued to maintain a defensive stance and will focus on stock selection to outperform amid the volatile market. We are positive on selective stocks in the construction, oil and gas, REITs and export-oriented sector.



Fund strategy (contd.)

On fi xed income, we are revising our duration strategy from slight overweight to neutral. Our preference in private debt securities (PDS) over MGS remains for higher yield enhancement to the fund.

2.7 Distributions

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 PRS Provider’s report, not otherwise disclosed in the fi nancial statements.

2.10 Circumstances that materially affect any interests of the unit holders

During the fi nancial year under review, there were no circumstances that materially affected any interests of the members.

2.11 Cross trade

During the fi nancial year under review, cross-trade transactions were undertaken by investment manager for the best interest of the Fund in accordance to the relevant internal and regulatory requirements. Cross trades can only be undertaken upon the verifi cation by Compliance based on the following conditions:(a) permitted by authorised personnel;(b) the sale and purchase decisions are in the best interest of clients, unit holders and the

fund as a whole;(c) reason(s) for such transactions is documented prior to execution of the trades;(d) transactions are executed through a dealer or a fi nancial institution on an arm’s

length and fair value basis; and(e) cross trade transactions are disclosed to both clients accordingly.

2.12 Rebates and soft commissions

It is the policy of the PRS Provider to credit any rebates received into the account of the Fund. Any soft commissions received by investment manager on behalf of the Fund are in the form of research and advisory services that assist in the decision making process relating to the investment of the Fund which are of demonstrable benefi t to members of the Fund. Any dealing with the broker or dealer is executed on terms which are the most favourable for the Fund. For the fi nancial year under review, the PRS Provider has received soft commissions from the stockbrokers.


3. FUND PERFORMANCE

3.1 Details of portfolio composition of the Fund for the last three fi nancial years as at 31 July are as follows:

a. Distribution among industry sectors and category of investments:

FY FY FY 2019 2018 2017 % % %

Consumer Products and Services 10.7 - -Financial Services 10.1 - -Industrial Products and Services 9.0 - -Energy 7.1 - -Technology 5.4 - -Construction 5.2 - -Property 4.4 - -Telecommunications and Media 2.9 - -Utilities 2.4 - -Health Care 1.2 - -Real Estate Investment Trusts 2.5 - -Unlisted warrants* - - -Unlisted collective investment schemes - 97.9 97.9Unlisted corporate bonds 21.6 - -Unlisted quasi government bond 1.7 - -Short term deposits and cash 15.8 2.1 2.1 100.0 100.0 100.0

* Corporation action entitlement, for which no fair value was ascribed, till its listing on 5 August 2019.

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

b. Distribution among markets

The Fund invests in local listed investment securities, unlisted bond and cash instruments only.


3.2 Performance details of the Fund for the last three fi nancial years ended 31 July are as follows:

FY FY FY 2018 2017 2016

Net asset value (“NAV”) (RM Million) 80.79 61.41 41.07Units in circulation (Million) 119.92 89.08 59.24NAV per unit (RM) 0.6737 0.6894 0.6933Highest NAV per unit (RM) 0.6936 0.7413 0.6960Lowest NAV per unit (RM) 0.6267 0.6653 0.6113Total return (%) -2.28 -0.56 13.23- Capital growth (%) -2.28 -0.56 13.23- Income growth (%) - - -Gross distribution per unit (sen) - - -Net distribution per unit (sen) - - -Management expense ratio (“MER”) (%) 1 0.88 0.46 0.55Portfolio turnover ratio (“PTR”) (times) 2 1.34 0.33 0.27

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 were no distribution declared by the Fund in the fi nancial year under review.

1 MER is higher against previous fi nancial year mainly due to cease of management fee rebate from divestment of unlisted collective investment schemes managed by the PRS Provider during the fi nancial year under review.

2 PTR was higher during the fi nancial year under review as the Fund has been investing directly into equity and fi xed income instruments since 18 April 2019.

* Based on bid price fair valuation method on all investments held by the Fund as at 31 July 2019, the NAV and NAV per unit would be RM80.47 million and RM0.6710 respectively.

(As disclosed under Note 14 of the fi nancial statements)


3.3 Average total return of the Fund

1 Year 3 Years 5 Years 31 Jul 18 31 Jul 16 31 Jul 14 - 31 Jul 19 - 31 Jul 19 - 31 Jul 19

Kenanga OnePRS Growth Fund -2.28% 3.40% 3.78%

A composite of All MGS Index (30%) and FBM 100 (70%) -3.46% 1.68% 0.04%

Source: Lipper; Novagni Analytics and Advisory

3.4 Annual total return of the Fund

Year under review 1 Year 1 Year 1 Year 1 Year 31 Jul 18 31 Jul 17 31 Jul 16 31 Jul 15 31 Jul 14 - 31 Jul 19 - 31 Jul 18 - 31 Jul 17 - 31 Jul 16 - 31 Jul 15

Kenanga OnePRS Growth Fund -2.28% -0.56% 13.23% 2.20% 6.13%

A composite of All MGS Index (30%) and FBM 100 (70%) -3.46% 2.47% 6.17% 0.30% -4.90%

Source: Lipper; Novagni Analytics and Advisory

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 MEMBERS OF KENANGA ONEPRS GROWTH FUND

We have acted as Trustee for Kenanga OnePRS Growth Fund (“the Fund”) for the fi nancial year ended 31 July 2019. To the best of our knowledge, Kenanga Investors Berhad, (“the PRS Provider”) has managed the Fund in the fi nancial year under review in accordance with the following:

a) limitations imposed on the investment powers of the PRS Provider under the deed,

securities laws and Guidelines on Private Retirement Schemes;

b) valuation and pricing of the Fund are carried out in accordance with the deed and any regulatory requirement; and

c) creation and cancellation of units are carried out in accordance with the deed and any

regulatory requirement.

FOR MAYBANK TRUSTEES BERHAD (Company No.: 5004-P)

BERNICE K M LAU Head Operations

Kuala Lumpur, Malaysia

17 September 2019


5 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KENANGA ONEPRS GROWTH FUND REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the fi nancial statements of Kenanga OnePRS Growth Fund (“the Fund”), which comprise the statement of fi nancial position as at 31 July 2019, and the statement of comprehensive income, statement of changes in net asset value and statement of cash fl ows of the Fund for the fi nancial year then ended, and notes to the fi nancial statements, including a summary of signifi cant accounting policies and other explanatory information, as set out on pages 21 to 56.

In our opinion, the accompanying fi nancial statements give a true and fair view of the fi nancial position of the Fund as at 31 July 2019 and of its fi nancial performance and cash fl ows for the fi nancial year then ended in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the fi nancial statements section of our report. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Independence and other ethical responsibilities

We are independent of the Fund in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfi lled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Information other than the fi nancial statements and auditors’ report thereon

The PRS Provider of the Fund (“PRS Provider”) is responsible for the other information. The other information comprises the information included in the annual report of the Fund, but does not include the fi nancial statements of the Fund and our auditors’ report thereon.

Our opinion on the fi nancial statements of the Fund does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the fi nancial statements of the Fund, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the fi nancial statements of the Fund or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.


5 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KENANGA ONEPRS GROWTH FUND (CONTD.)

Responsibilities of the PRS Provider and the Trustee for the fi nancial statements

The PRS Provider is responsible for the preparation of fi nancial statements of the Fund that give a true and fair view in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards. The PRS Provider is also responsible for such internal control as the PRS Provider determines is necessary to enable the preparation of fi nancial statements of the Fund that are free from material misstatement, whether due to fraud or error.

In preparing the fi nancial statements of the Fund, the PRS Provider is responsible for assessing the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the PRS Provider either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so.

The Trustee is responsible for overseeing the Fund’s fi nancial reporting process. The Trustee is also responsible for ensuring that the PRS Provider maintains proper accounting and other records as are necessary to enable true and fair presentation of these fi nancial statements.

Auditors’ responsibilities for the audit of the fi nancial statements Our objectives are to obtain reasonable assurance about whether the fi nancial statements

of the Fund as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of these fi nancial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the fi nancial statements of the Fund, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suffi cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the PRS Provider.


5 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KENANGA ONEPRS GROWTH FUND (CONTD.)

Auditors’ responsibilities for the audit of the fi nancial statements (contd.) • Conclude on the appropriateness of the PRS Provider’s use of the going concern

basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the fi nancial statements of the Fund or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Fund to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the fi nancial statements of the Fund, including the disclosures, and whether the fi nancial statements of the Fund represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the PRS Provider regarding, among other matters, the planned

scope and timing of the audit and signifi cant audit fi ndings, including any signifi cant defi ciencies in internal control that we identify during our audit.

Other matters

This report is made solely to the members of the Fund, as a body, in accordance with the Guidelines on Private Retirement Schemes issued by the Securities Commission Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Ng Sue EanAF: 0039 No.03276/07/2020 JChartered Accountants Chartered Accountant


17 September 2019


6. STATEMENT BY THE PRS PROVIDER

I, Ismitz Matthew De Alwis, being a director of Kenanga Investors Berhad, do hereby state that, in the opinion of the PRS Provider, the accompanying statement of fi nancial position as at 31 July 2019 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 31 July 2019 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 OnePRS Growth Fund as at 31 July 2019 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 PRS Provider KENANGA INVESTORS BERHAD

ISMITZ MATTHEW DE ALWIS Executive Director/Chief Executive Offi cer


17 September 2019

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

Kenanga OnePRS Growth Fund Annual Report21

7. FINANCIAL STATEMENTS

7.1 STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 JULY 2019

Note 2019 2018 RM RM

INVESTMENT INCOME

Interest income 520,790 -Dividend income 430,137 -Net loss from investments: - Financial assets at fair value through profi t or loss (“FVTPL”) 4 (1,325,800) (501,223) (374,873) (501,223)

EXPENSES

PRS Provider’s remuneration 5 469,891 121,532Trustee’s fee 6 10,613 8,025Private Pension Administrator (“PPA”) administration fee 7 28,302 21,399Auditors’ remuneration 7,000 6,500Tax agent’s fee 4,000 2,700Administration expenses 103,142 88,037Brokerage and other transaction costs 150,768 - 773,716 248,193

NET LOSS BEFORE TAX (1,148,589) (749,416)

Income tax 8 - -

NET LOSS AFTER TAX, REPRESENTING TOTAL COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR (1,148,589) (749,416)

Net loss after tax is made up as follows: Realised gain 1,085,817 98,903 Unrealised loss 4 (2,234,406) (848,319) (1,148,589) (749,416)


Kenanga OnePRS Growth Fund Annual Report 22

7.2 STATEMENT OF FINANCIAL POSITION AS AT 31 JULY 2019


ASSETS

INVESTMENTS

Financial assets at FVTPL 4 70,509,106 60,190,790 Short term deposits 9 13,237,000 - 83,746,106 60,190,790

OTHER ASSETS

Amount due from PRS Provider 57,356 -Amount due from licensed fi nancial institutions 10 383,157 -Other receivables 11 45,590 -Cash at bank 13,051 1,288,657 499,154 1,288,657

TOTAL ASSETS 84,245,260 61,479,447

LIABILITIES

Amount due to PRS Provider - 28,599 Amount due to Trustee 1,062 1,574 Amount due to PPA 5,239 2,026 Amount due to licensed fi nancial institutions 10 3,702,126 -Other payables 12 67,600 33,500 TOTAL LIABILITIES 3,776,027 65,699

EQUITY

Members’ contribution 76,661,059 56,456,985 Retained earnings 3,808,174 4,956,763 NET ASSET VALUE (“NAV”) ATTRIBUTABLE TO MEMBERS 13 80,469,233 61,413,748

TOTAL LIABILITIES AND EQUITY 84,245,260 61,479,447

NUMBER OF UNITS IN CIRCULATION 13(a) 119,923,515 89,082,198

NET ASSET VALUE PER UNIT (RM) 14 0.6710 0.6894


Kenanga OnePRS Growth Fund Annual Report23

7.3 STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE FINANCIAL YEAR ENDED 31 JULY 2019

Members’ Retained Total Note contribution earnings NAV RM RM RM

2019At beginning of the fi nancial year 56,456,985 4,956,763 61,413,748 Total comprehensive loss - (1,148,589) (1,148,589)Creation of units 13(a) 21,742,849 - 21,742,849 Cancellation of units 13(a) (1,585,611) - (1,585,611)Distribution equalisation 13(a) 46,836 - 46,836 At end of the fi nancial year 76,661,059 3,808,174 80,469,233

2018At beginning of the fi nancial year 35,362,974 5,706,179 41,069,153 Total comprehensive loss - (749,416) (749,416)Creation of units 13(a) 21,323,580 - 21,323,580 Cancellation of units 13(a) (235,950) - (235,950)Distribution equalisation 13(a) 6,381 - 6,381 At end of the fi nancial year 56,456,985 4,956,763 61,413,748


Kenanga OnePRS Growth Fund Annual Report 24

7.4 STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 JULY 2019


CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES

Proceeds from sale of fi nancial assets at FVTPL 88,680,364 7,400,327 Dividends received 392,377 -Interest received 308,685 -Tax agent’s fee paid (4,000) (3,500)Auditors’ remuneration paid (6,500) (6,500)Trustee’s fee paid (11,125) (6,965)PPA administration fee paid (25,089) (20,744)Payment for other fees and expenses (69,542) (88,615)PRS Provider’s remuneration paid (376,238) (117,845)Placement of investments (5,000,000) -Purchase of fi nancial assets at FVTPL (97,184,611) (27,755,755)Net cash used in operating and investing activities (13,295,679) (20,599,597)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from units created 21,852,448 21,257,029 Cash paid on units cancelled (1,595,375) (236,180)Net cash generated from fi nancing activities 20,257,073 21,020,849

NET INCREASE IN CASH AND CASH EQUIVALENTS 6,961,394 421,252 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 1,288,657 867,405 CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 8,250,051 1,288,657

Cash and cash equivalents comprise: Cash at bank 13,051 1,288,657 Short term deposits 9 8,237,000 - 8,250,051 1,288,657


7.5 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 JULY 2019

1. THE FUND, THE PRS PROVIDER AND THEIR PRINCIPAL ACTIVITIES

Kenanga OnePRS Growth Fund (“the Fund”) was constituted pursuant to the executed Deed dated 29 August 2013 (collectively, together with the deeds supplemental thereto, referred to as “the Deed”) between the Private Retirement Scheme Provider (“PRS Provider”), Kenanga Investors Berhad and Maybank Trustees Berhad (“the Trustee”). The Fund commenced operations on 20 November 2013 and will continue to be in operation until terminated as provided under Part 16 of the Deed.

Kenanga Investors Berhad is a wholly-owned subsidiary of Kenanga Investment Bank 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 PRS Provider is Level 14, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur.

The Fund seeks to provide its members capital growth. The Fund seeks to achieve its objective by investing a maximum of 70% of the Fund’s NAV in equities and at least 30% of the Fund’s NAV in fi xed income instruments and/or money market instruments.

The fi nancial statements were authorised for issue by the Chief Executive Offi cer of the PRS Provider on 17 September 2019.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

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

The Fund has an approved set of investment guidelines and policies as well as internal controls which sets out its overall business strategies to manage these risks to optimise returns and preserve capital for the members, consistent with the long-term objectives 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.


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

a. Market risk (contd.)

Market risk arises when the value of the investments 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.

The PRS Provider manages the risk of unfavourable changes in prices by cautious review of the investments and continuous monitoring of their performance and risk profi les.

i. Interest rate risk

Interest rate risk refers to how the changes in the interest rate environment would affect the performance of Fund’s investments. Rate offered by the fi nancial institutions will fl uctuate according to the Overnight Policy Rate determined by Bank Negara Malaysia and this has direct correlation with the Fund’s investments in unlisted corporate bonds, unlisted quasi government bonds and short-term deposits.

The Fund’s exposure to the interest rate risk is mainly confi ned to unlisted corporate bonds and unlisted quasi government bond.

Interest rate risk sensitivity

The following table demonstrates the sensitivity of the Fund’s loss for the fi nancial year to a reasonably possible change in interest rate, with all other variables held constant.

Effects on loss for Changes in rate the fi nancial year Increase/(Decrease) Gain/(Loss) Basis points RM

2019 Financial assets at FVTPL 5/(5) 38,362/(38,247)

2018Financial assets at FVTPL 5/(5) -

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


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2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) a. Market risk (contd.)

ii. Price risk

Price risk is the risk of unfavourable changes in the fair values of listed equity securities (2018: unlisted collective investment schemes). The Fund invests in listed equity securities, listed collective investment schemes and unlisted warrants which are exposed to price fl uctuations (2018: unlisted collective investment schemes). This may then affect the NAV of the Fund.

Price risk sensitivity

The PRS Provider’s best estimate of the effect on the loss for the fi nancial year due to a reasonably possible change in investments in listed equity securities, listed collective investment schemes and unlisted warrants (2018: unlisted collective investment schemes) with all other variables held constant is indicated in the table below:

Effects on loss for Changes in price the fi nancial year Increase/(Decrease) Gain/(Loss) Basis points RM

2019 Financial assets at FVTPL 5/(5) 25,492/(25,492)

2018Financial assets at FVTPL 5/(5) 30,095/(30,095)

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

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 2019 2018 2019 2018 RM RM % %

Financial assets at FVTPL 50,984,445 60,190,790 63.3 98.0


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) a. Market risk (contd.)

ii. Price risk (contd.)

Price risk concentration (contd.)

The Fund’s concentration of price risk from the Fund’s listed equity securities, listed collective investment schemes and unlisted warrants analysed by sector is as follows:

Fair value Percentage of NAV 2019 2018 2019 2018 RM RM % %

Consumer Products and Services 8,965,950 - 11.1 -Financial Services 8,487,540 - 10.6 -Industrial Products and Services 7,505,720 - 9.3 -Energy 5,971,180 - 7.4 -Technology 4,490,068 - 5.6 -Construction 4,314,425 - 5.4 -Property 3,699,373 - 4.6 -Telecommunications and Media 2,450,835 - 3.0 -Utilities 2,019,956 - 2.5 -Health Care 969,680 - 1.2 -Real Estate Investment Trusts 2,109,718 - 2.6 -Unlisted warrants - - - -Unlisted collective investment schemes - 60,190,790 - 98.0 50,984,445 60,190,790 63.3 98.0

b. Credit risk

Credit risk is the risk that the counterparty to a fi nancial instrument will cause a fi nancial loss to the Fund by failing to discharge an obligation. The PRS Provider manages the credit risk by undertaking credit evaluation to minimise such risk.

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.


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) b. Credit risk (contd.)

iii. Credit quality of fi nancial assets

The Fund invests only in unlisted corporate bonds and unlisted quasi government bond with at least investment grade credit rating by a credit rating agency. The following table analyses the Fund’s portfolio of unlisted corporate bonds and unlisted quasi government bond by rating category:

Financial assets at FVTPL

Percentage of total unlisted bonds Percentage of NAV 2019 2018 2019 2018 % % % %

RatingAA3 26.1 - 6.3 -AAA 19.7 - 4.8 -A1 15.6 - 3.8 -A3 13.1 - 3.2 -A2 12.9 - 3.1 -AA 5.3 - 1.3 -AA+ 5.0 - 1.2 -AA- 2.3 - 0.6 - 100.0 - 24.3 -

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 2019 2018 2019 2018 % % % %

RatingP1 72.4 - 11.9 - WR 27.6 - 4.5 - 100.0 - 16.4 -


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) b. Credit risk (contd.)

iv. Credit risk concentration

Concentration risk is monitored and managed based on sectoral distribution. The table below analyses the Fund’s portfolio of unlisted corporate bonds and unlisted quasi government bond by sectoral distribution:

Percentage of total unlisted bonds Percentage of NAV 2019 2018 2019 2018 % % % %

Finance 56.4 - 13.7 -Properties 16.1 - 3.9 -Industrial products 12.9 - 3.1 -Utilities 12.3 - 3.0 -Construction 2.3 - 0.6 - 100.0 - 24.3 -

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 cancellation of its units on a regular basis. Units sold to unit holders by the PRS Provider are cancellable at the unit holders’ option based on the Fund’s NAV per unit at the time of cancellation calculated in accordance with the Deed.

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


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

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.

Above Above Up to 1 year 5 years 1 year - 5 years -15 years Total Note RM RM RM RM

2019AssetsFinancial assets at FVTPL 52,141,780 13,819,774 4,547,552 70,509,106Short term deposits 13,237,000 - - 13,237,000Other assets 499,154 - - 499,154 i. 65,877,934 13,819,774 4,547,552 84,245,260

LiabilitiesOther liabilities ii. 3,708,427 - - 3,708,427

Equity iii. 80,469,233 - - 80,469,233

Liquidity gap (18,299,726) 13,819,774 4,547,552 67,600

2018AssetsFinancial assets at FVTPL 60,190,790 - - 60,190,790Other assets 1,288,657 - - 1,288,657 i. 61,479,447 - - 61,479,447

LiabilitiesOther liabilities ii. 32,199 - - 32,199

Equity iii. 61,413,748 - - 61,413,748

Liquidity gap 33,500 - - 33,500


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

i. Financial assets

Analysis of fi nancial assets at FVTPL into maturity groupings is based on the expected date on which these assets will be realised. The Fund’s investments in listed equity securities, listed collective investment schemes and unlisted warrants (2018: unlisted collective investment schemes) have been included in the “up to 1 year” category on the assumption that these are highly liquid investments which can be realised should all of the Fund’s unit holders’ 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 the unit holders can request for redemption of their units, they have been categorised as having a maturity of “up to 1 year”. As a result, it appears that the Fund has a liquidity gap within “up to 1 year”. However, the Fund believes that it would be able to liquidate its investments should the need arises to satisfy all the redemption requirements.

d. Regulatory reportings

It is the PRS Provider’s responsibility to ensure full compliance of all requirements under the Guidelines on Private Retirement Schemes issued by Securities Commission Malaysia. Any breach of any such requirement has been reported in the mandatory reporting to Securities Commission Malaysia on a monthly basis.


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”) as issued by the International Accounting Standards Board (“IASB”).

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

The accounting policies adopted are consistent with those of the previous fi nancial year except for the adoption of the new and amended MFRS and Interpretation Committee’s (“IC”) Interpretation, which became effective for the Fund on 1 August 2018.

Effective for fi nancial period beginning onDescription or after

Amendments to MFRS contained in the document entitled “Annual Improvements to MFRS Standards 2014 - 2016 Cycle” 1 January 2018 Amendments to MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards contained in the document entitled “Annual Improvements to MFRS Standards 2014 - 2016 Cycle” 1 January 2018 Amendments to MFRS 128: Investments in Associates and Joint Ventures contained in the document entitled “Annual Improvements to MFRS Standards 2014 - 2016 Cycle” 1 January 2018 MFRS 9: Financial Instruments 1 January 2018 MFRS 15: Revenue from Contracts with Customers 1 January 2018 Clarifi cations to MFRS 15: Revenue from Contracts with Customers 1 January 2018 Amendments to MFRS 2: Classifi cation and Measurement of Shared-Based Payment Transactions 1 January 2018

Temporary exemption from MFRS 9 subject to certain criteria being met for annual periods beginning

Amendments to MFRS 4: Applying MFRS 9 Financial on or after Instruments with MFRS 4 Insurance Contracts 1 January 2018 Amendments to MFRS 140: Transfers of Investment Property 1 January 2018 IC Interpretation 22: Foreign Currency Transactions and Advance Consideration 1 January 2018

The adoption of the new and amended MFRS and IC Interpretation did not have any signifi cant impact on the fi nancial position or performance of the Fund other than the impacts as discussed below:


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

a. Basis of accounting (contd.)

MFRS 9 Financial Instruments

MFRS 9 Financial Instruments replaces MFRS 139 Financial Instruments: Recognition and Measurement and all previous versions of MFRS 9 for annual periods on or after 1 January 2018. MFRS 9 requires fi nancial assets to be classifi ed on the basis of the business model within which they are held and their contractual cash fl ow characteristics. The requirements related to the fair value option for fi nancial liabilities were also changed to address own credit risk. The adoption of MFRS 9 has no effect on the classifi cation and measurement of the Fund’s fi nancial assets and fi nancial liabilities.

MFRS 9 also requires impairment assessments to be based on an expected credit loss model, replacing the MFRS 139 incurred loss model. Finally, MFRS 9 aligns hedge accounting more closely with risk management, establish a more principle-based approach to hedge accounting and address inconsistencies and weaknesses in the previous model.

The Fund did not change the classifi cation of its investments nor were there any material fi nancial impact arising from the adoption of this standard.

b. Standards, amendments and interpretations issued but not yet effective

As at the reporting date, the following Standards, Amendments and IC Interpretations 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 and interpretations when they become effective.


Amendments to MFRS contained in the document entitled “Annual Improvements to MFRS Standards document 2015 - 2017 Cycle” 1 January 2019 Amendments to MFRS 3 and MFRS 11: Previously Held Interest in a Joint Operation contained in the document entitled “Annual Improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019 Amendments to MFRS 112: Income Tax Consequences of Payments on Financial Instruments Classifi ed as Equity contained in the document entitled “Annual Improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019 Amendments to MFRS 123: Borrowing Costs Eligible for Capitalisation contained in the document entitled “Annual Improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019 MFRS 16: Leases 1 January 2019 Amendments to MFRS 9: Prepayment Features with Negative Compensation 1 January 2019



b. Standards, amendments and interpretations issued but not yet effective (contd.)


Amendments to MFRS 119: Plan Amendment, Curtailment or Settlement 1 January 2019 Amendments to MFRS 128: Long-term Interests in Associates and Joint Ventures 1 January 2019 IC Interpretation 23: Uncertainty over Income Tax Treatments 1 January 2019 Amendments to MFRS 2: Share-Based Payment 1 January 2020 Amendments to MFRS 3: Business Combinations 1 January 2020 Amendments to MFRS 3: Defi nition of a Business 1 January 2020 Amendments to MFRS 6: Exploration for and Evaluation of Mineral Resources 1 January 2020 Amendments to MFRS 14: Regulatory Deferral Accounts 1 January 2020 Amendments to MFRS 101: Presentation of Financial Statements 1 January 2020 Amendments to MFRS 108: Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2020 Amendments to MFRS 101 & MFRS 108: Defi nition of Material 1 January 2020 Amendments to MFRS 134: Interim Financial Reporting 1 January 2020 Amendment to MFRS 137: Provisions, Contingent Liabilities and Contingent Assets 1 January 2020 Amendment to MFRS 138: Intangible Assets 1 January 2020 Amendments to IC Interpretation 12: Service Concession Arrangements 1 January 2020 Amendments to IC Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments 1 January 2020 Amendment to IC Interpretation 20: Stripping Costs in the Production Phase of a Surface Mine 1 January 2020 Amendments to IC Interpretation 22: Foreign Currency Transactions and Advance Consideration 1 January 2020 Amendments to IC Interpretation 132: Intangible Assets - Web Site Costs 1 January 2020 MFRS 17: Insurance Contracts 1 January 2021

Amendments to MFRS 10 and MFRS 128: Sale or Contribution To be announced of Assets between an Investor 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.



c. Financial instruments

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.

i. Measurement categories of fi nancial assets and liabilities

From 1 August 2018, the Fund classifi es all of its fi nancial assets based on the business model for managing the assets and the asset’s contractual terms, measured at either:

• Amortised cost;• Fair value through other comprehensive income; and• Fair value through profi t or loss.

The Fund may designate fi nancial instruments at FVTPL, if so doing eliminates or signifi cantly reduces measurement or recognition inconsistencies.

The Fund’s other fi nancial assets include cash at bank, short term deposits, trade receivable and other receivables. Prior to 1 August 2018, the Fund classifi ed its other fi nancial assets as receivables (amortised cost), as explained in Note 3(c)(iii).

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 classifi ed as either fi nancial liabilities at FVTPL or other fi nancial liabilities.

The Fund’s other fi nancial liabilities include trade payables and other payables.

Other fi nancial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest rate (“EIR”) method. Gains or losses are recognised in profi t or loss when the liabilities are derecognised, and through the amortisation process.

ii. Initial recognition and subsequent measurement

The classifi cation of fi nancial assets at initial recognition depends on their contractual terms and the business model for managing the instruments, as described in Note 3(c)(iii). Financial assets are initially measured at their fair value, except in the case of fi nancial assets recorded at FVTPL, transaction costs are added to, or subtracted from, this amount. Trade receivables are measured at the transaction price. When the fair value of fi nancial instruments at initial recognition differs from the transaction price, the Fund accounts for the Day 1 profi t or loss, as described below.

After initial measurement, debt instruments are measured at amortised cost, using the EIR method, less allowance for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. Expected credit losses (“ECLs”) are recognised in the statement of comprehensive income when the investments are impaired.

Financial assets at FVTPL are recorded in the statement of fi nancial position at fair value. Changes in fair value are recorded in profi t or loss.



c. Financial instruments (contd.)

iii. Due from banks, short term deposits, trade and other receivables at amortised cost

Prior to 1 August 2018, included in the fi nancial assets are cash at bank, short term deposits and other receivables including receivables which are those non-derivative fi nancial assets with fi xed or determinable payments that were not quoted in an active market.

From 1 August 2018, the Fund only measures the amount due from banks, short term deposits and other receivables at amortised cost if both of the following conditions are met:

• The fi nancial asset is held within a business model with the objective to hold fi nancial assets in order to collect contractual cash fl ows; and

• The contractual terms of the fi nancial asset give rise on specifi ed dates to cash fl ows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.

The details of these conditions are outlined below.

Business model assessment

The Fund determines its business model at the level that best refl ects how it manages groups of fi nancial assets to achieve its business objective.

The Fund’s business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios and is based on observable factors such as:

• How the performance of the business model and the fi nancial assets held within that business model are evaluated and reported to the entity’s key management personnel;

• The risks that affect the performance of the business model (and the fi nancial assets held within that business model) and, in particular, the way those risks are managed;

• How the PRS Provider of the business is compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash fl ows collected); and

• The expected frequency, value and timing of sales are also important aspects of the Fund’s assessment.

The business model assessment is based on reasonably expected scenarios without taking ‘worst case’ or ‘stress case’ scenarios into account. If cash fl ows after initial recognition are realised in a way that is different from the Fund’s original expectations, the Fund does not change the classifi cation of the remaining fi nancial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased fi nancial assets going forward, unless it has been determined that there has been a change in the original business model.



c. Financial instruments (contd.)

iii. Due from banks, short term deposits, trade and other receivables at amortised cost (contd.)

The SPPI test

As a second step of its classifi cation process the Fund assesses the contractual terms of fi nancial assets to identify whether they meet the SPPI test.

‘Principal’ for the purpose of this test is defi ned as the fair value of the fi nancial asset at initial recognition and may change over the life of the fi nancial asset (for example, if there are repayments of principal or amortisation/accretion of the premium/discount).

The most signifi cant elements of interest within a lending arrangement are typically the consideration for the time value of money and credit risk. To make the SPPI assessment, the Fund applies judgement and considers relevant factors such as the currency in which the fi nancial asset is denominated, and the period for which the interest rate is set.

In contrast, contractual terms that introduce a more than de minimis exposure to risks or volatility in the contractual cash fl ows that are unrelated to a basic lending arrangement do not give rise to contractual cash fl ows that are solely payments of principal and interest on the amount outstanding. In such cases, the fi nancial asset is required to be measured at FVTPL.

iv. Financial investments

Financial assets in this category are those that are managed in a fair value business model, or that have been designated by management upon initial recognition, or are mandatorily required to be measured at fair value under MFRS 9. This category includes debt instruments whose cash fl ow characteristics fail the SPPI criterion or are not held within a business model whose objective is either to collect contractual cash fl ows, or to both collect contractual cash fl ows and sell.

d. Reclassifi cation of fi nancial assets and liabilities

From 1 August 2018, the Fund has not reclassifi ed its fi nancial assets and fi nancial liabilities subsequent to their initial recognition and upon adoption of MFRS 9.

e. Derecognition of fi nancial assets

A fi nancial asset (or, where applicable, a part of a fi nancial asset or part of a group of similar fi nancial assets) is derecognised when the rights to receive cash fl ows from the fi nancial asset have expired. The Fund also derecognises the fi nancial asset if it has both transferred the fi nancial asset and the transfer qualifi es for derecognition.



e. Derecognition of fi nancial assets (contd.)

The Fund has transferred the fi nancial asset if, and only if, either:

• The Fund has transferred its contractual rights to receive cash fl ows from the fi nancial asset; or

• It retains the rights to the cash fl ows, but has assumed an obligation to pay the received cash fl ows in full without material delay to a third party under a ‘pass-through’ arrangement.

Pass-through arrangements are transactions whereby the Fund retains the contractual rights to receive the cash fl ows of a fi nancial asset (the ‘original asset’), but assumes a contractual obligation to pay those cash fl ows to one or more entities (the ‘eventual recipients’), when all of the following three conditions are met:

• The Fund has no obligation to pay amounts to the eventual recipients unless it has collected equivalent amounts from the original asset, excluding short-term advances with the right to full recovery of the amount lent plus accrued interest at market rates;

• The Fund cannot sell or pledge the original asset other than as security to the eventual recipients; and

• The Fund has to remit any cash fl ows it collects on behalf of the eventual recipients without material delay. In addition, the Fund is not entitled to reinvest such cash fl ows, except for investments in cash or cash equivalents including interest earned, during the period between the collection date and the date of required remittance to the eventual recipients.

A transfer only qualifi es for derecognition if either:

• The Fund has transferred substantially all the risks and rewards of the asset; or• The Fund has neither transferred nor retained substantially all the risks and rewards

of the asset, but has transferred control of the asset.

The Fund considers control to be transferred if and only if, the transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and without imposing additional restrictions on the transfer.

When the Fund has neither transferred nor retained substantially all the risks and rewards and has retained control of the asset, the asset continues to be recognised only to the extent of the Fund’s continuing involvement, in which case, the Fund also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that refl ects the rights and obligations that the Fund has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration the Fund could be required to pay.

If continuing involvement takes the form of a written or purchased option (or both) on the transferred asset, the continuing involvement is measured at the value the Fund would be required to pay upon repurchase. In the case of a written put option on an asset that is measured at fair value, the extent of the entity’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.



f. Impairment of fi nancial assets (Policy applicable from 1 August 2018)

i. Overview of the expected credit loss (“ECL”) principles

As described in Note 3(a), the adoption of MFRS 9 has fundamentally changed the Fund’s receivables impairment method by replacing MFRS 139’s incurred loss approach with a forward-looking ECL approach.

ii. Write-offs

The Fund’s accounting policy under MFRS 9 remains the same as it was under MFRS 139. Financial assets are written off either partially or in their entirety only when the Fund has stopped pursuing the recovery. If the amount to be written off is greater than the accumulated loss allowance, the difference is fi rst treated as an addition to the allowance that is then applied against the gross carrying amount. Any subsequent recoveries are credited to credit loss expense.

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

Distribution income is recognised on declared basis, when the right to receive the distribution is established.

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.

h. Cash and cash equivalents

For the purpose of the statement of cash fl ows, cash and cash equivalents include cash at bank and short term deposits with licensed fi nancial institutions with insignifi cant risk of changes in value.

i. 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.

j. Unrealised reserves

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



k. Members’ contribution – NAV attributable to members

The members’ 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 members by way of distribution and/or adjusted accordingly when units are released back to the Trustee.

l. 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.

m. Distributions

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

n. 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 PRS Provider 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

2019 2018 RM RM

Financial assets held for trading, at FVTPL: Listed equity securities 48,874,727 - Listed collective investment schemes 2,109,718 - Unlisted warrants - - Unlisted corporate bonds 18,080,358 - Unlisted quasi government bond 1,444,303 - Unlisted collective investment schemes - 60,190,790 70,509,106 60,190,790

Net loss on fi nancial assets at FVTPL comprised: Realised gain on disposals 908,606 347,096 Unrealised changes in fair values (2,234,406) (848,319) (1,325,800) (501,223)

Details of fi nancial assets at FVTPL as at 31 July 2019:

Aggregate/ Amortised Percentage Quantity cost Fair value of NAV RM RM %

Listed equity securities

Consumer Products and ServicesBerjaya Sports Toto Berhad 572,500 1,461,119 1,505,675 1.9Bermaz Auto Berhad 322,300 740,531 815,419 1.0DRB-HICOM Berhad 636,400 1,553,323 1,673,732 2.1Genting Malaysia Berhad 83,900 297,006 324,693 0.4Hong Leong Industries Berhad 161,600 1,709,134 1,777,600 2.2Malayan Flour Mills Berhad 700,000 527,910 469,000 0.6MBM Resources Berhad 295,300 964,004 965,631 1.2PPB Group Berhad 48,500 907,360 905,980 1.1QL Resources Berhad 77,000 527,264 528,220 0.6 8,687,651 8,965,950 11.1

Financial ServicesAEON Credit Service (M) Berhad 54,000 888,884 893,160 1.1Alliance Bank Malaysia Berhad 277,500 1,103,162 1,012,875 1.3BIMB Holdings Berhad 302,000 1,379,708 1,262,360 1.6ELK-Desa Resources Berhad 733,000 1,145,013 1,202,120 1.5Hong Leong Financial Group Berhad 71,000 1,352,828 1,270,900 1.6Malayan Banking Berhad 139,552 1,238,176 1,207,125 1.5RHB Bank Berhad 298,000 1,696,058 1,639,000 2.0 8,803,829 8,487,540 10.6



Details of fi nancial assets at FVTPL as at 31 July 2019: (contd.)


Listed equity securities (contd.)

Industrial Products and ServicesATA IMS Berhad 487,900 862,923 717,213 0.9Chemical Company of Malaysia Berhad 284,000 576,241 559,480 0.7Chin Well Holdings Berhad 491,200 897,939 864,512 1.1Dufu Technology Corp. Berhad 473,000 794,523 865,590 1.1Kelington Group Berhad 1,013,400 1,346,203 1,297,152 1.6Pecca Group Berhad 353,200 373,981 402,648 0.5Scientex Berhad 100,000 880,940 842,000 1.0Sunway Berhad 790,500 1,347,605 1,304,325 1.6Uchi Technologies Berhad 240,000 672,694 652,800 0.8 7,753,049 7,505,720 9.3

EnergyDeleum Berhad 182,000 200,971 170,170 0.2Dialog Group Berhad 311,000 1,018,040 1,066,730 1.3Hibiscus Petroleum Berhad 600,000 678,000 630,000 0.8Sapura Energy Berhad 2,526,000 827,440 757,800 0.9Serba Dinamik Holdings Berhad 297,000 1,232,682 1,185,030 1.5Yinson Holdings Berhad 311,000 1,479,171 2,161,450 2.7 5,436,304 5,971,180 7.4

TechnologyFrontken Corporation Berhad 555,800 849,085 867,048 1.1 Greatech Technology Berhad 1,031,000 1,024,153 1,051,620 1.3 Inari Amertron Berhad 363,000 564,516 595,320 0.7 Pentamaster Corporation Berhad 232,500 764,684 816,075 1.0 Revenue Group Berhad 720,500 1,105,890 1,160,005 1.5 4,308,328 4,490,068 5.6

ConstructionGabungan AQRS Berhad 987,300 1,391,926 1,382,220 1.7Gamuda Berhad 109,500 406,245 405,150 0.5IJM Corporation Berhad 355,500 807,577 828,315 1.1Kerjaya Prospek Group Berhad 688,800 896,942 971,208 1.2MGB Berhad 1,069,900 816,695 727,532 0.9 4,319,385 4,314,425 5.4





Listed equity securities (contd.)

PropertyLBS Bina Group Berhad - ordinary shares 1,015,000 617,285 537,950 0.7Matrix Concepts Holdings Berhad 408,000 784,058 775,200 0.9Paramount Corporation Berhad 1,057,900 1,587,545 1,586,850 2.0UEM Sunrise Berhad 1,005,500 815,517 799,373 1.0 3,804,405 3,699,373 4.6

Telecommunications and MediaAstro Malaysia Holdings Berhad 783,000 1,175,309 1,127,520 1.4Telekom Malaysia Berhad 100,500 410,040 410,040 0.5TIME dotCom Berhad 102,500 923,485 913,275 1.1 2,508,834 2,450,835 3.0

UtilitiesMega First Corporation Berhad 257,900 907,617 974,862 1.2Taliworks Corporation Berhad 1,154,800 1,070,963 1,045,094 1.3 1,978,580 2,019,956 2.5

Health CareDuopharma Biotech Berhad 713,000 972,787 969,680 1.2

Total listed equity securities 48,573,152 48,874,727 60.7

Listed collective investment schemes

Real Estate Investment TrustsAxis Real Estate Investment Trust 597,500 1,073,262 1,075,500 1.3IGB Real Estate Investment Trust 192,500 359,975 367,675 0.5YTL Hospitality REIT 516,700 669,110 666,543 0.8

Total listed collective investment schemes 2,102,347 2,109,718 2.6

Unlisted warrants

Paramount Corporation Berhad - CW99* 259,400 - - -

* Corporation action entitlement, for which no fair value was ascribed, till its listing on 5 August 2019.





Unlisted corporate bonds

Bank Muamalat Malaysia Berhad maturing on 15/06/2021 2,500,000 2,541,942 2,559,501 3.2CIMB Group Holdings Berhad maturing on 28/06/2024 3,000,000 3,013,637 3,038,237 3.8Dynasty Harmony Sdn Bhd maturing on 21/12/2029 2,000,000 2,066,612 2,095,333 2.6CIMB Islamic Bank Berhad maturing on 25/09/2019 950,000 972,074 972,541 1.2Fortune Premiere Sdn Bhd maturing on 13/03/2023 1,000,000 1,033,001 1,046,184 1.3Pengurusan Air SPV Berhad maturing on 07/02/2024 2,300,000 2,369,768 2,402,250 3.0IJM Land Berhad maturing on 19/03/2027 2,350,000 2,464,887 2,516,176 3.1Premier Auto Assets Berhad maturing on 19/07/2022 3,000,000 3,005,639 3,002,399 3.7WCT Holdings Berhad maturing on 23/10/2023 440,000 447,748 447,737 0.6

Total unlisted corporate bonds 17,915,308 18,080,358 22.5

Unlisted quasi government bond

Cagamas Berhad maturing on 25/05/2023 1,390,000 1,429,752 1,444,303 1.8

Total unlisted quasi government bond 1,429,752 1,444,303 1.8

Total fi nancial assets at FVTPL 70,020,559 70,509,106 87.6

Unrealised gain on fi nancial assets at FVTPL 488,547


5. PRS PROVIDER’S REMUNERATION

PRS Provider’s remuneration is calculated on a daily basis at a rate up to 5.00% per annum of the NAV of the Fund as provided under Division 17.1 of the Deed.

The PRS Provider is currently charging PRS Provider’s remuneration of 1.55% per annum of the NAV of the Fund (2018: 1.55% per annum).

As the Fund invested in units of the Kenanga Bond Fund and Kenanga Growth Fund managed by the PRS Provider, any management fee charged to the unlisted collective investment schemes are fully refunded to the Fund. Accordingly, there is no double charging of management fee during the fi nancial year.

6. TRUSTEE’S FEE

Pursuant to the supplemental deed dated 2 October 2014, the Trustee’s fee is calculated on a daily basis at a rate not exceeding 0.015% per annum of the NAV of the Fund and subject to a minimum fee of RM6,000 per annum as provided under Division 17.2 of the Deed.

The Trustee’s fee is currently calculated at 0.015% per annum of the NAV of the Fund (2018: 0.015% per annum).

7. PPA ADMINISTRATION FEE

PPA administration fee is calculated on a daily basis at a rate of 0.04% per annum of the NAV of the Fund (2018: 0.04% per annum).

8. INCOME TAX

Income tax is calculated at the Malaysian statutory tax rate of 24% of the estimated assessable income for the current and previous fi nancial years.

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 loss before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Fund is as follows:

2019 2018 RM RM

Net loss before tax (1,148,589) (749,416)

Tax at Malaysian statutory tax rate of 24% (2018: 24%) (275,661) (179,860)Tax effect of: Income not subject to tax (446,288) (83,303) Loss not deductible for tax purposes 536,257 203,597 Expenses not deductible for tax purposes 47,228 10,112 Restriction on tax deductible expenses for unit trust fund 138,464 49,454 Income tax for the fi nancial year - -


9. SHORT TERM DEPOSITS

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

2019 2018 RM RM

Short term deposits (less than 7 days) 8,237,000 -Short term deposits (more than 7 days) 5,000,000 - 13,237,000 -

10. AMOUNT DUE FROM/TO LICENSED FINANCIAL INSTITUTIONS

Amount due from/to licensed fi nancial institutions relate to the amounts to be received from or to licensed fi nancial institutions arising from the sales and purchase of investments.

11. OTHER RECEIVABLES

2019 2018 RM RM

Dividends receivable 37,760 -Interest receivable from short term deposits 7,830 - 45,590 -

12. OTHER PAYABLES

2019 2018 RM RM

Accrual for auditors’ remuneration 7,000 6,500 Accrual for tax agent’s fees 4,000 4,000 Provision for printing and other expenses 56,600 23,000 67,600 33,500

13. NET ASSET VALUE ATTRIBUTABLE TO MEMBERS

NAV attributable to members is represented by:


Members’ contribution (a) 76,661,059 56,456,985

Retained earnings: Realised reserves 3,319,627 2,233,810 Unrealised reserves 488,547 2,722,953 3,808,174 4,956,763

80,469,233 61,413,748


13. NET ASSET VALUE ATTRIBUTABLE TO MEMBERS (CONTD.)

(a) Members’ contribution

2019 2018 No. of units RM No. of units RM

At beginning of the fi nancial year 89,082,198 56,456,985 59,241,124 35,362,974Add: Creation of units 33,222,055 21,742,849 30,182,837 21,323,580Less: Cancellation of units (2,380,738) (1,585,611) (341,763) (235,950)Distribution equalisation - 46,836 - 6,381At end of the fi nancial year 119,923,515 76,661,059 89,082,198 56,456,985

The PRS Provider, Kenanga Investors Berhad, did not hold any units in the Fund, either legally or benefi cially, as at 31 July 2019 (2018: nil). The number of units legally or benefi cially held by the other parties related to the PRS Provider were 141,941 units valued at RM95,242 as at 31 July 2019 (2018: 133,560 units valued at RM92,076).

14. NET ASSET VALUE PER UNIT

Financial assets at FVTPL have been valued at the bid prices at the close of business. In accordance with the Deed, the calculation of NAV attributable to unit holders per unit for the creation and cancellation of units is computed based on fi nancial assets at FVTPL valued at the last done market price.

A reconciliation of NAV attributable to unit holders for creation/cancellation of units and the NAV attributable to unit holders per the fi nancial statements is as follows:

2019 2018 RM RM/Unit RM RM/Unit

NAV attributable to unit holders for creation/cancellation of units 80,786,631 0.6737 61,413,748 0.6894Effects of adopting bid prices as fair value (317,398) (0.0027) - -NAV attributable to unit holders per statement of fi nancial position 80,469,233 0.6710 61,413,748 0.6894

15. PORTFOLIO TURNOVER RATIO (“PTR”)

PTR for the fi nancial year is 1.09 times (2018: 0.33 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.


16. MANAGEMENT EXPENSE RATIO (“MER”)

MER for the fi nancial year is 1.34% (2018: 0.46%).

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.

17. TRANSACTIONS WITH LICENSED FINANCIAL INSTITUTIONS

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

Kenanga Investors Berhad* 103,220,874 54.3 - - RHB Investment Bank Berhad 20,323,449 10.7 16,936 11.2 Hong Leong Investment Bank Berhad 12,142,329 6.4 24,870 16.5 Alliance Bank Malaysia Berhad 10,827,504 5.7 - - Maybank Investment Bank Berhad 10,373,735 5.4 34,963 23.2 UOB Kay Hian Securities (M) Sdn Bhd 7,731,357 4.1 19,689 13.1Affi n Hwang Investment Bank Berhad 5,960,900 3.1 16,894 11.2CIMB Investment Bank Berhad 3,792,697 2.0 11,155 7.4Alliance Investment Bank Berhad 3,355,185 1.8 9,784 6.5CIMB Bank Berhad 3,000,000 1.6 - -Others 9,296,833 4.9 16,477 10.9 190,024,863 100.0 150,768 100.0

* Kenanga Investors Berhad, the PRS Provider, is also the Unit Trust Fund Manager of Kenanga Bond Fund and Kenanga Growth Fund, the unlisted collective investment schemes that the Fund invested in during the fi nancial year.

The above transaction values were in respect of listed equity securities, listed collective investment schemes, unlisted collective investment schemes, unlisted corporate bonds and unlisted quasi government bond. Transactions in unlisted collective investment schemes do not involve any commission or brokerage fees.

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


18. SEGMENTAL REPORTING

a. Business segments

In accordance with the objective of the Fund, the Fund can invest up to 70% in equities and at least 30% in fi xed income instruments and/or money market instruments. The following table provides an analysis of the Fund’s revenue, results, assets and liabilities by business segments:

Listed Unlisted investment investment Other securities securities investments Total RM RM RM RM

2019RevenueSegment (loss)/income (1,160,961) 540,792 245,296 Segment expenses (150,768) - - Net segment (loss)/income representing segment results (1,311,729) 540,792 245,296 (525,641)Unallocated expenditures (622,948)Loss before tax (1,148,589)Income tax -Net loss after tax (1,148,589)

AssetsFinancial assets at FVTPL 50,984,445 19,524,661 - Short term deposits - - 13,237,000 Other segment assets 420,917 - 7,830 Total segment assets 51,405,362 19,524,661 13,244,830 84,174,853 Unallocated assets 70,407 84,245,260

LiabilitiesSegment liabilities 3,702,126 - - 3,702,126 Unallocated liabilities 73,901 3,776,027


18. SEGMENTAL REPORTING (CONTD.)

a. Business segments (contd.)

Listed Unlisted investment investment Other securities securities investments Total RM RM RM RM

2018RevenueSegment income - (501,223) - (501,223)Unallocated expenditures (248,193)Income before tax (749,416)Income tax -Net income after tax (749,416)

AssetsFinancial assets at FVTPL - 60,190,790 - 60,190,790 Unallocated assets 1,288,657 61,479,447

LiabilitiesUnallocated liabilities 65,699

b. Geographical segments

As all of the Fund’s investments are located in Malaysia, disclosure by geographical segments is not relevant.


19. 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 fi nancial liabilities of the Fund in the statement of fi nancial position by the class of fi nancial instruments to which they are assigned and therefore by the measurement basis.

Financial Financial assets at Other assets amortised fi nancial at FVTPL cost liabilities Total RM RM RM RM

2019AssetsListed equity securities 48,874,727 - - 48,874,727Listed collective investment schemes 2,109,718 - - 2,109,718Unlisted warrants - - - -Unlisted corporate bonds 18,080,358 - - 18,080,358Unlisted quasi government bond 1,444,303 - - 1,444,303Short term deposits - 13,237,000 - 13,237,000Amount due from PRS Provider 57,356 57,356Amount due from licensed fi nancial institutions - 383,157 - 383,157Other receivables - 45,590 - 45,590Cash at bank - 13,051 - 13,051 70,509,106 13,736,154 - 84,245,260 Liabilities Amount due to Trustee - - 1,062 1,062Amount due to PPA - - 5,239 5,239Amount due to licensed fi nancial institutions - - 3,702,126 3,702,126 - - 3,708,427 3,708,427


19. FINANCIAL INSTRUMENTS (CONTD.)

a. Classifi cation of fi nancial instruments (contd.)

Financial Financial assets at Other assets amortised fi nancial at FVTPL cost liabilities Total RM RM RM RM

2018AssetsUnlisted collective investment schemes 60,190,790 - - 60,190,790 Cash at bank - 1,288,657 - 1,288,657 60,190,790 1,288,657 - 61,479,447

Liabilities Amount due to PRS Provider - - 28,599 28,599 Amount due to Trustee - - 1,574 1,574 Amount due to PPA - - 2,026 2,026 - - 32,199 32,199

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 RM RM RM RMInvestments:2019Listed equity securities 48,874,727 - - 48,874,727 Listed collective investment schemes - 2,109,718 - 2,109,718 Unlisted warrants - - - -Unlisted corporate bonds - 18,080,358 - 18,080,358 Unlisted quasi government bond - 1,444,303 - 1,444,303

2018Unlisted collective investment schemes - 60,190,790 - 60,190,790


19. FINANCIAL INSTRUMENTS (CONTD.)

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

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

The fair values of listed equity securities and listed collective investment schemes are determined by reference to Bursa Malaysia Securities Berhad’s bid prices at reporting date. The fair values of unlisted warrants are based on their reference price minus subscription price at reporting date. The fair values of unlisted corporate bonds and unlisted quasi government bond are based on bid prices provided by bond pricing agency accredited by the Securities Commission of Malaysia at reporting date.

In the previous fi nancial year, the fair values of unlisted collective investment schemes are stated based on its respective NAV per unit at reporting date.

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

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

20. 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 disclosure documents;

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 Level 14, Kenanga Tower, 237, Jalan Tun RazakFax: +603 2172 3133 50400 Kuala Lumpur, MalaysiaEmail: [email protected] Tel: 03-2172 3000 Fax: 03-2172 3080

kenanga oneprs growth fund...2018/19 global growth to 3.7% (previously 3.9%), the ﬁ rst downgrade...

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