kenanga premier fund · financial statements 11 - 41. ii kenanga premier fund interim report...

interim rePOrt

For the Financial Period From 1 March 2018 to 31 August 2018

KenAnGA Premier FUnD

KenAnGA Premier FUnD

Contents Page

Corporate Directory iiDirectory of Manager’s Offices iiiFund information 1manager’s report 2 - 5Fund Performance 6 - 8trustee’s report 9Statement by the manager 10Financial Statements 11 - 41

ii Kenanga Premier Fund Interim Report

COrPOrAte DireCtOrYmanager: Kenanga investors Berhad (Company No. 353563-P)

Registered OfficeLevel 17, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 2888Fax: 03-2172 2999

Business OfficeLevel 14, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3000Fax: 03-2172 3080E-mail:[email protected]: www.KenangaInvestors.com.my

Board Of DirectorsDatuk Syed Ahmad Alwee Alsree (Chairman)Syed Zafilen Syed Alwee (independent

Director)Peter John Rayner (independent Director)Imran Devindran bin Abdullah (independent

Director)Ismitz Matthew De Alwis

investment Committee Syed Zafilen Syed Alwee (independent

member)Peter John Rayner (independent member)Imran Devindran bin Abdullah (independent

member)Ismitz Matthew De Alwis

Company Secretary: norliza Abd Samad (MAICSA 7011089)

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

trustee: CimB Commerce trustee Berhad (Company No. 313031-A)

Registered Office Level 13, Menara CIMBJalan Stesen Sentral 2Kuala Lumpur Sentral50490 Kuala Lumpur.Tel: 03-2261 8888Fax: 03-2261 0099Website: www.cimb.com

Business Office Level 21, Menara CIMBJalan Stesen Sentral 2Kuala Lumpur Sentral50490 Kuala Lumpur.Tel: 03-2261 8888Fax: 03-2261 9889

Auditor: ernst & Young (AF: 0039)

Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

tax Adviser: ernst & Young tax Consultants Sdn Bhd (Company No. 179793-K)

Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

membership: Federation of investment managers malaysia (Fimm)19-06-1, 6th Floor, Wisma Tune, 19, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia.Tel: 03-2093 2600 Fax: 03-2093 2700 Website: www.fimm.com.my

Kenanga Premier Fund Interim Report iii

DireCtOrY OF mAnAGer’S OFFiCeSRegional Branch Offices :

Kuala LumpurLevel 13, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3123 Fax: 03-2172 3133

Johor BahruLot 11.03, 11th Floor, Menara MSC CyberportNo. 5, Jalan Bukit Meldrum80300 Johor Bahru , JohorTel: 07-223 7505 / 4798 Fax: 07-223 4802

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

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

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

KuantanNo. B8, Ground Floor, Jalan Tun Ismail 125000 Kuantan, Pahang.Tel : 09-514 3688Fax : 09-514 3838

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

ipohSuite 1, 2nd Floor,No. 63, Persiaran Greenhill,30450 Ipoh, Perak, MalaysiaTel: 05-254 7573 / 7570 / 7575Fax: 05-254 7606

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

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

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

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

1 Kenanga Premier Fund Interim Report

1. FUnD inFOrmAtiOn

1.1 Fund name

Kenanga Premier Fund (KPF or the Fund)

1.2 Fund Category / type

Equity / Growth

1.3 investment Objective

The Fund aims to provide consistent annual returns and medium to long-term capital appreciation.

1.4 investment Strategy

The Fund seeks to maximise total returns by providing investors with a combination of capital appreciation and income distribution, if any, while reducing risk through diversified investments mainly in equities.

1.5 Duration

The Fund was launched on 26 November 1996 and shall exist as long as it appears to the Manager and the Trustee that it is in the interests of the unit holders for it to continue.

1.6 Performance Benchmark

FTSE-Bursa Malaysia 100 Index

1.7 Distribution Policy

The Fund intends to pay income by way of distributions or by the creation of additional units after the end of each Accrual Period (i.e. 12-month period ending on the last day of December of each year) or any specified period, where possible.

1.8 Breakdown of unit holdings of KPF as at 31 August 2018

Size of holdingsno. of

unit holdersno. of

units held5,000 and below 322 722,5875,001 - 10,000 298 2,189,97710,001-50,000 857 22,197,57250,001-500,000 507 65,936,436500,001 and above 47 104,246,367total 2,031 195,292,939

Kenanga Premier Fund Interim Report 2

2. mAnAGer’S rePOrt

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

The Fund has depreciated by 2.42% in Net Asset Value terms vs the FBM100 benchmark which was down by 3.07%. The outperformance was attributed to stock selection.

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

Performance Chart Since Launch (26/11/1996 – 31/08/2018)Kenanga Premier Fund vs FtSe-Bursa malaysia 100 index

Source: Novagni Analytics and Advisory

2.3 Investment strategies and policies employed during the financial period under review

For the financial year under review, the Fund continued with its strategy of investing in companies with strong fundamentals and good growth prospect. The Fund has also increased its exposure to defensive high dividend yield stocks to reduce volatility.

2.4 the Fund’s asset allocation as at 31 August 2018 and comparison with the previous financial period

Asset 31 Aug 18 31 Aug 17Listed investment securities 87.1% 85.5%Short term deposits and cash 12.9% 14.5%

reason for the differences in asset allocation

As of 31 August 2018, the Fund’s asset allocation, invested levels has increased from 85.5% to 87.1%. The increase in equities exposure during the financial period under review was mainly due to the fund manager deploying more cash into stocks for better earnings outlook.

NAV PER UNIT * HISTORICAL FUND PRICE *FUND SIZE *

Low Pei Yee

#Source : Lipper, 31 August 2018

2017

2016

2015

2014

2013

0.57

-2.42

56.95

19.40

17.71

343.82

3 years

5 years

Since Launch

FUND OBJECTIVE

Sales Charge

Max 5.50%

Annual Management Fee

1.50% p.a.

Annual Trustee Fee

0.05% p.a.

0.86

Aims to provide consistent annual returns and medium to long-

term capital appreciation.

Fund Category/Type

Equity / Growth

Launch Date

26 November 1996

Trustee

-3.07

1.99

12.74

-2.45

-2.89

-6.17

11.39

FUND PERFORMANCE (%)

CUMULATIVE FUND PERFORMANCE (%) #

BenchmarkFundPeriod

CALENDAR YEAR FUND PERFORMANCE (%) #

BenchmarkPeriod Fund

Kenanga Premier FundSeptember 2018

6.00

1 month

6 months

1 year

16.70

6.80

8.65

0.99

4.68

-5.66

17.05

Redemption Charge

CIMB Commerce Trustee Berhad

Benchmark

FTSE Bursa Malaysia Top 100 Index

Designated Fund Manager

Lipper Analytics15 Aug 2018

3-yearFund Volatility

High

-100

-50

0

50

100

150

200

250

300

350

400

No

v 9

6

De

c 9

8

Jun

01

De

c 0

3

Jun

06

De

c 0

8

Jun

11

De

c 1

3

Jun

16

% Cumulative Return, Launch to 31/08/2018

Kenanga Premier : 343.82 FTSE Bursa Malaysia Top 100 Index : 56.95

Source: Novagni Analytics and Advisory

Gross DistributionCARLSBERG BREWERY MALAYSIA BHD

NESTLE (M) BHD

GLOBETRONICS TECHNOLOGY BHD

MALAYAN BANKING BHD

LBS BINA GROUP BHD

RM Yield (%)

3.58 sen

3.89 sen

3.01 sen

9.26%

8.70%

6.45%

Since Inception Date

RM 1.0400

RM 0.3222

29-Jun-99

12-Mar-09

RM 75.56 million

NAV PER UNIT *

RM 0.3869

HISTORICAL FUND PRICE *FUND SIZE *

Based on the fund’s portfolio returns as at 15 August 2018, the Volatility Factor (VF) for this fund is 9.12 and is classified as “High”. (Source: Lipper). “High” includes funds with

VF that are above 8.710 and less than or equal to 11.135 (source: Lipper). The VF means there is a possibility for the fund in generating an upside return or downside return

around this VF. The Volatility Class (VC) is assigned by Lipper based on quintile ranks of VF for qualified funds. VF is subject to monthly revision and VC will be revised every

six months. The fund’s portfolio may have changed since this date and there is no guarantee that the fund will continue to have the same VF or VC in the future. Presently, only

funds launched in the market for at least 36 months will display the VF and its VC.The Master Prospectus dated 30 June 2017 and the Supplemental Prospectus (if any), its

Product Highlights Sheets (“PHS”) or Supplemental Disclosure Document (“SDD”) (if any) have been registered with the Securities Commission Malaysia, who takes no

responsibility for its contents. A copy of the Master Prospectus, Supplemental Prospectus (if any), SDD (if any) and the PHS are obtainable at our offices. Application for Units

can only be made on receipt of application form referred to in and accompanying the Master Prospectus and/or Supplemental Prospectus (if any), SDD (if any) and PHS.

Investors are advised to read and understand the Master Prospectus, its PHS and any other relevant product disclosure documents involved before investing. Investors are

also advised to consider the fees and charges before investing. Unit prices and distributions may go down as well as up. Where a unit split/distribution is declared, investors

are advised that following the issue of additional units/distribution, the NAV per unit will be reduced from pre-unit split NAV/cum-distribution NAV to post-unit split NAV/ex-

distribution NAV. Where a unit split is declared, investors should note that the value of their investment in Malaysian Ringgit will remain unchanged after the distribution of the

additional units. A Fund’s track record does not guarantee its future performance. Investors are advised to read and understand the contents of the unit trust loan financing risk

Redemption Charge

Nil

1

2

All fees and charges payable to the Manager and the Trustee are

subject to GST as may be imposed by the government or other

authorities from time to time.

ASSET ALLOCATION (% NAV) * SECTOR ALLOCATION (% NAV) *

TOP EQUITY HOLDINGS (% NAV) *

4.82%

4.47%

Highest

Lowest

3

4

5

4.27%

4.04%

3.54%

* Source: Kenanga Investors Berhad, 31 August 2018

DISTRIBUTION HISTORY *

Date

16-May-16

26-Feb-15

27-Feb-14

-

-

-

Unit Split

88.20%

90.20%

89.10%

11.80%

9.80%

10.90%

June

July

August

Liquidity Equity

25.5%

16.9%

11.9%

10.9%

10.1%

9.6%

7.7%

6.6%

0.3%

0.3%

0.2%

Consumer Products

Industrial Products

Technology

Short Term Deposit and Cash

Trading and Services

Construction

Finance

Properties

Plantations

SPAC

Others

additional units. A Fund’s track record does not guarantee its future performance. Investors are advised to read and understand the contents of the unit trust loan financing risk

disclosure statement before deciding to borrow to purchase units.“Cooling-Off Period” or “Cooling-Off Right” is not applicable to EPF Member Investment Scheme (EPF MIS).

Kenanga Investors Berhad is committed to preventing Conflict of Interest between its various businesses and activities and between its clients/directors/shareholders and

employees by having in place procedures and measures for identifying and properly managing any apparent, potential and perceived Conflict of Interest by making disclosures

to Clients, where appropriate. The Manager wishes to highlight the specific risks of the Fund are stock specific risk, currency risk and country risk.

Au

g 1

8


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

Period under review

Kenanga Premier Fund -2.42%FtSe-Bursa malaysia 100 index -3.07%

Source: Lipper

For the financial period under review to 31 August 2018, the Fund has depreciated by 2.42% vs the negative return of 3.07% in the FBM 100 index. The outperformance was attributable to stock selection.

2.6 review of the market

market review

The FBMKLCI increased 2.21% for the period under review (1st March 2018 – 31st August 2018). The KLCI Index went up slightly since March 2018 but dipped between June and July 2018 but subsequently recovered slightly since then.

Global equities declined in March 2018 as investors concerns grew amid indications of potentially higher inflation and tighter monetary policy, as well as the implementation of aggressive trade protectionism measures from the US, which could potentially escalate into a US-China trade war. US President Trump imposed tariffs on steel and aluminium imports, after announcing levies on up to $60 billion in Chinese goods, to which the Chinese government responded with planned tariffs on more than 100 American goods. US also faced a massive sell down in tech stocks as a data privacy scandal engulfs Facebook, prompting speculation on a regulatory crackdown on antitrust concerns.

As expected, the Federal Reserve raised federal funds rate by 25bps in March while pencilling another 2 rate hikes in March. North Korea leader Kim Jong-un visited Beijing and met with China President Xi Jinping in his first known trip to foreign country since he took power in 2011. Bank Negara released Annual Report and expects Malaysia GDP to expand 5.5%-6% in 2018, underpinned by robust domestic demand and better exports on the back of global economy recovery.

The KLCI Index traded in a tight range of 1810-1895 points between March and April. The Index hit the year high of 1895.18 points on 19 April before starting its correction. Malaysian Parliament was dissolved on 7 April for 14th General Election to be held on 9 May. Pakatan Harapan won the 14th General Election and Tun Mahathir was sworn in as 7th Prime Minister. Malaysia achieved 1Q18 GDP growth of 5.4%, slightly below 4Q17 GDP growth of 5.9% due to slower domestic demand.

May and June headlines were again focused on escalating threats of US-China trade tariffs. Meanwhile Trump and Kim Jon-un concluded nuclear summit in Singapore with North Korea committing to denuclearisation. The Federal Reserve raised rate for 2nd time in 2018 and forecasted total of 4 hikes in 2018 (previously 3 hikes) with better growth outlook. In the end June meeting, OPEC pledged to increase production but with scanty details on how to achieve the increase.


2.6 review of the market (Contd.)

market review (Contd.)

Malaysian new government announced measures to relieve rakyat from rising living costs which include removal of 6% Goods and Services Tax (GST) to be replaced by Sales and Services Tax (SST) and fixing of fuel price. While the Finance Ministry announced government debts totaling at RM1trillion (80.3% GDP), the ministry is confident to maintain 2018 budget deficit at 2.8% with expenditure rationalisation, review of mega projects and other revenue enhancements. The KLCI Index tumbled end May over concerns of RM1trillion debts and policy uncertainties. Not helping was the poor showing of 1Q corporate reporting quarter released end May. 35.7% corporates missed earnings expectations, which was the highest in six quarters. 45% of the corporates also suffered downgrade in estimates after the earnings disappointment. The convergence of all these negatives dragged KLCI Index down to the year low of 1663.86 points by 6 July 2018.

US-China trade tension escalated again in July as Trump administration announced another potential US$200 billion tariff plan on Chinese goods. The Renminbi further depreciated in July by 3.0% against US dollar. The KLCI ended July with a 5.5% month-on-month (MoM) gain to close at 1784 points and narrowed its cumulative loss to only 0.7% in 7M18. This represents the first monthly gain by the Malaysian market since GE14 as foreign selling subsided and investors bottom fished. As expected, BNM left the OPR unchanged at 3.25%. The SST will be reintroduced on September 1 with proposed sales tax at 5% and 10%, while service tax at fixed rate of 6%. The government is drawing up new directions for the 11th Malaysia Plan which will be tabled in the Parliament in October.

US stock indices ended positively in August 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, the sixth straight month of healthy gains, suggesting strong economic growth early in the 3Q18, while a measure of underlying inflation 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.

On the local front, 2Q18 GDP growth of 4.5% year-on-year (YoY) was reported in August, 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.

Malaysia saw net foreign outflows of RM98.9million worth of shares in August (vs -RM1.7billion in July 2018, -RM4.9billion in June 2018), bringing the total YTD net selling to RM8.6billion. For the month, WTI futures rose by 1.5%, while Brent futures increased by 4.3%. The Ringgit declined by 1.1% against USD while 10Y MGS yields fell by 0.8% mom to 4.04%.

Year-to-date up to end August 2018, the KLCI Index was up by 1.3% while FBM100 Index and FBM Small Cap Index dropped 0.7%, and 15.2% respectively. The Ringgit weakened against US dollar for 1.5% for first eight months of 2018 to end at RM4.1090 as of end August 2018.


2.6 review of the market (Contd.)

market Outlook

Key risks to markets remain escalation of the US-China trade wars and also monetary tightening by global central banks. We can expect some policy divergence ahead as central banks are balancing growth risks and macro stability.

Fund Strategy

We remain defensive overall, while focusing on stock picking for outperformance. We continue to favour beneficiaries of the weak ringgit like exporters/technology, selective oil and gas names due to higher oil prices, stocks related to domestic consumption, as well as healthcare and tourism.

2.7 Distribution

For the financial period under review, the Fund did not declare any distribution.

2.8 Details of any unit split exercise

The Fund did not carry out any unit split exercise during the financial period under review.

2.9 Significant changes in the state of affair of the Fund during the financial period

There were no significant changes in the state of affair of the Fund during the financial period and up until the date of the manager’s report, not otherwise disclosed in the financial statements.

2.10 Circumstances that materially affect any interests of the unit holders

During the financial period under review, there were no circumstances that materially affected any interests of the unit holders.

2.11 Cross trade

During the financial period under review, no cross-trade transaction was undertaken by investment manager for the fund.

2.12 rebates & Soft commissions

It is the policy of the Manager 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 benefit to Unit holders of the fund. For the financial period under review, the Manager has received soft commissions from the stockbrokers.


3. FUnD PerFOrmAnCe

3.1 Details of portfolio composition of the Fund for the financial period as at 31 August 2018 against last three financial years as at 28/29 February are as follow:

a. Distribution among industry sectors and category of investments:

As at FY FY FY31.8.2018 2018 2017 2016

% % % %

Consumer products 24.8 26.1 15.0 15.0Industrial products 16.5 9.6 11.8 9.6Technology 11.6 5.5 - 2.6Trading/Services 9.9 21.7 8.8 11.4Constructions 9.4 11.9 6.3 4.5Finance 7.6 8.7 14.9 14.3Properties 6.5 7.0 4.3 7.6Special Purpose

Acquisition Company 0.3 0.3 0.2 0.2Plantations 0.3 1.7 10.0 7.9Infrastructure 0.2 - - 1.8Warrants 0.1 0.1 - 0.1Real Estate Investment

Trusts - 1.8 5.0 5.0Short term deposits and

cash 12.9 5.6 23.7 20.0

100.0 100.0 100.0 100.0

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 and cash instruments only.


3.2 Performance details of the Fund for the financial period ended 31 August 2018 against last three financial years ended 28/29 February are as follows:

Period from 1.3.2018 to 31.8.2018

FY 2018

FY 2017

FY 2016

Net asset value (“NAV”) (RM Million) 75.56* 80.56 89.28 84.12

Units in circulation (Million) 195.29 203.15 245.64 217.58NAV per unit (RM) 0.3869* 0.3965 0.3635 0.3866Highest NAV per unit (RM) 0.3955 0.3992 0.3981 0.4114Lowest NAV per unit (RM) 0.3628 0.3637 0.3468 0.3469Total return (%) -2.42 9.08 3.62 -5.20- Capital growth (%) -2.42 9.08 -5.98 -5.20- Income growth (%) - - 9.60 -Gross distribution per unit (sen) - - 3.58 -Net distribution per unit (sen) - - 3.58 -Management expense ratio

(“MER”) (%) 1 1.61 1.72 1.73 1.75Portfolio turnover ratio (“PTR”)

(times) 2 0.55 1.22 1.25 1.25

Note: TotalreturnistheactualreturnoftheFundfortherespectivefinancialperiod/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.

1. MERisloweragainstpreviousfinancialyearmainlyduetolowerexpensesincuredbytheFundduringthefinancialperiodunder.

2. PTR is lower against previous year due to lower trading activities incurred.

* Based on bid price fair valuation method on all investments held by the Fund as at 31August2018,theNAVandNAVperunitwouldbeRM75.29millionandRM0.3855respectively.

(AsdisclosedunderNote13ofthefinancialstatements)


3.3 Average total return of the Fund

1 Year31 Aug 17 - 31 Aug 18

3 Years31 Aug 15 - 31 Aug 18

5 Years31 Aug 13 - 31 Aug 18

Kenanga Premier Fund 6.00% 6.18% 3.65%FtSe-Bursa malaysia 100 index 1.99% 5.49% 1.66%

Source: Lipper

3.4 Annual total return of the Fund

Period under review

28 Feb 18 - 31 Aug 18

1 Year 28 Feb 17 - 28 Feb 18

1 Year 29 Feb 16 - 28 Feb 17

1 Year 28 Feb 15 - 29 Feb 16

1 Year 28 Feb 14 - 28 Feb 15

Kenanga Premier Fund -2.42% 9.08% 3.62% -5.20% 1.95%FtSe-Bursa malaysia 100 index -3.07% 11.01% 3.87% -8.39% -0.99%

Source: Lipper

investors are reminded that past performance is not necessarily indicative of future performance. Unit prices and investment returns may fluctuate.


4. trUStee’S rePOrt tO tHe Unit HOLDerS OF KenAnGA Premier FUnD

We, CIMB Commerce Trustee Berhad being the trustee of Kenanga Premier Fund (“the Fund”), are of the opinion that Kenanga Investors Berhad (“the Manager”), acting in the capacity as Manager of the Fund, has fulfilled its duties in the following manner for the financial period ended 31 August 2018.

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

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

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

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

For and on behalf of CIMB Commerce Trustee Berhad

Lee Kooi Yoke Chief Operating Officer Kuala Lumpur, Malaysia

15 October 2018


5. StAtement BY tHe mAnAGer

I, Ismitz Matthew De Alwis, being a director of Kenanga Investors Berhad, do hereby state that, in the opinion of the Manager, the accompanying statement of financial position as at 31 August 2018 and the related statement of comprehensive income, statement of changes in net asset value and statement of cash flows for the financial period from 1 March 2018 to 31 August 2018 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 financial position of Kenanga Premier Fund as at 31 August 2018 and of its financial performance and cash flows for the financial period from 1 March 2018 to 31 August 2018 and comply with the requirements of the Deed.

For and on behalf of the ManagerKENANGA INVESTORS BERHAD

ISMITz MATTHEW DE ALWISExecutive Director/Chief Executive Officer

Kuala Lumpur, Malaysia

15 October 2018


6. FinAnCiAL StAtementS

6.1 StAtement OF COmPreHenSiVe inCOme FOr tHe FinAnCiAL PeriOD FrOm 1 mArCH 2018 tO 31 AUGUSt 2018 (unaudited)

note1.3.2018 to 31.8.2018

1.3.2017 to 31.8.2017

rm rm

inVeStment inCOme

Dividend income 1,173,925 1,169,331 Interest income 125,462 219,514 Net (loss)/gain from investments:- Financial assets at fair value through profit or

loss (“FVTPL”) 4 (2,498,458) 413,003 (1,199,071) 1,801,848

eXPenSeS

Manager’s fee 5 566,067 659,029 Trustee’s fee 6 18,869 21,968 Auditors’ remuneration 6,518 6,391 Tax agent’s fee 2,006 2,006 Administration expenses 39,371 63,058 Brokerage and other transaction costs 213,824 415,672

846,655 1,168,124

net (LOSS)/inCOme BeFOre tAX (2,045,726) 633,724

Income tax 7 - -

net (LOSS)/inCOme AFter tAX, rePreSentinG tOtAL COmPreHenSiVe (LOSS)/inCOme FOr tHe FinAnCiAL PeriOD (2,045,726) 633,724

Net (loss)/income after tax is made up as follows:Realised gain 1,192,287 993,400 Unrealised loss 4 (3,238,013) (359,676)

(2,045,726) 633,724

The accompanying notes form an integral part of the financial statements.


6.2 StAtement OF FinAnCiAL POSitiOn AS At 31 AUGUSt 2018 (unaudited)

note 31.8.2018 31.8.2017rm rm

ASSetS

inVeStmentS

Financial assets at FVTPL 4 67,072,254 69,840,772 Short term deposits 8 9,936,000 11,779,000

77,008,254 81,619,772

OtHer ASSetS

Amount due from licensed financial institutions 9 852,514 -Other receivables 10 186,853 89,352 Cash at bank 23,468 50,942

1,062,835 140,294

tOtAL ASSetS 78,071,089 81,760,066

LiABiLitieS

Amount due to Manager 93,099 163,434 Amount due to Trustee 3,124 3,371 Amount due to licensed financial institutions 9 2,649,156 270,210Other payables 11 36,533 29,590 tOtAL LiABiLitieS 2,781,912 466,605

eQUitY

Unit holders’ contribution 55,305,596 65,862,763 Retained earnings 19,983,581 15,430,698 net ASSet VALUe (“nAV”) AttriBUtABLe

tO Unit HOLDerS 12 75,289,177 81,293,461

tOtAL LiABiLitieS AnD eQUitY 78,071,089 81,760,066

nUmBer OF UnitS in CirCULAtiOn 12(a) 195,292,939 223,639,069

net ASSet VALUe Per Unit (rm) 13 0.3855 0.3635



6.3 StAtement OF CHAnGeS in net ASSet VALUe FOr tHe FinAnCiAL PeriOD FrOm 1 mArCH 2018 tO 31 AUGUSt 2018 (unaudited)

noteUnit holders’ contribution

retained earnings total nAV

rm rm rm

1.3.2018 to 31.8.2018At beginning of the financial

period 58,283,473 22,029,307 80,312,780 Total comprehensive loss - (2,045,726) (2,045,726)Creation of units 12(a) 243,504 - 243,504 Cancellation of units 12(a) (3,210,348) - (3,210,348)Distribution equalisation 12(a) (11,033) - (11,033)At end of the financial period 55,305,596 19,983,581 75,289,177

1.3.2017 to 31.8.2017At beginning of the financial

period 74,126,178 14,796,974 88,923,152 Total comprehensive income - 633,724 633,724 Creation of units 12(a) 947,288 - 947,288 Cancellation of units 12(a) (9,033,247) - (9,033,247)Distribution equalisation 12(a) (177,456) - (177,456)At end of the financial period 65,862,763 15,430,698 81,293,461



6.4 StAtement OF CASH FLOWS FOr tHe FinAnCiAL PeriOD FrOm 1 mArCH 2018 tO 31 AUGUSt 2018 (unaudited)

1.3.2018 to 31.8.2018

1.3.2017 to 31.8.2017

rm rm

CASH FLOWS FrOm OPerAtinG AnD inVeStinG ACtiVitieS

Proceeds from sale of financial assets at FVTPL 44,493,631 43,912,980 Dividends received 1,048,008 1,235,779 Interest from deposits received 116,252 226,241 Auditors’ remuneration paid - (13,000)Trustee’s fee paid (18,783) (22,034)Payment for other fees and expenses (37,543) (58,576)Manager’s fee paid (563,494) (660,994)Purchase of financial assets at FVTPL (36,576,207) (45,675,048)Net cash generated from/(used in) operating and

investing activities 8,461,864 (1,054,652)

CASH FLOWS FrOm FinAnCinG ACtiVitieS

Cash received from units created 245,908 1,005,829 Cash paid on units cancelled (3,229,295) (9,167,689)Net cash used in financing activities (2,983,387) (8,161,860)

net inCreASe/(DeCreASe) in CASH AnD CASH eQUiVALentS 5,478,477 (9,216,512)

CASH AnD CASH eQUiVALentS At BeGinninG OF tHe FinAnCiAL PeriOD 4,480,991 21,046,454

CASH AnD CASH eQUiVALentS At enD OF tHe FinAnCiAL PeriOD 9,959,468 11,829,942

Cash and cash equivalents comprise: 23,468 50,942 Cash at bank 9,936,000 11,779,000 Short term deposits 9,959,468 11,829,942



6.5 nOteS tO tHe FinAnCiAL StAtementS FOr tHe FinAnCiAL PeriOD FrOm 1 mArCH 2018 tO 31 AUGUSt 2018

1. tHe FUnD, tHe mAnAGer AnD tHeir PrinCiPAL ACtiVitieS

Kenanga Premier Fund (“the Fund”) was constituted pursuant to the executed Deed dated 21 November 1996 (collectively, together with deeds supplemental thereto, referred to as “the Deed”) between the Manager, Kenanga Investors Berhad, and Universal Trustee (Malaysia) Berhad (“the Trustee” prior to 15 April 2005). Pursuant to the executed Fourth Supplemental Deed dated 15 April 2005, the Fund changed its trustee to HSBC (Malaysia) Trustee Berhad (“the Trustee” for the period from 15 April 2005 to 2 December 2013). The Fund has subsequently changed its trustee to CIMB Commerce Trustee Berhad (“the Trustee” with effect from 3 December 2013). The aforesaid change was effected on 3 December 2013 via a Fourth Master Supplemental Deed dated 19 November 2013. The Fund commenced operations on 26 November 1996 and will continue to be in operation until terminated in accordance to Part 12 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 Manager is Level 14, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur.

The Fund seeks to provide consistent annual returns and medium to long term capital appreciation.

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 financial risks inherent in each type of financial instruments, the Manager and the Trustee 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 unit holders, consistent with the long term objectives of the Fund.


2. FinAnCiAL riSK mAnAGement OBJeCtiVeS AnD POLiCieS (COntD.)

a. market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk includes interest rate risk and price risk.

Market risk arises when the value of the investments fluctuates 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 investments’ prices caused by uncertainties in the economic, political and social environment will affect the NAV of the Fund.

The Manager manages the risk of unfavourable changes in prices by cautious review of the investments and continuous monitoring of their performance and risk profiles.

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 financial institutions will fluctuate according to the Overnight Policy Rate determined by Bank Negara Malaysia and this has direct correlation with the Fund’s investments in deposits.

The Fund is not exposed to significant interest rate risk as its deposits are short term in nature and have fixed interest rates.

interest rate risk exposure

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

Up to 1 year

non-exposure to interest rate

movement total

Weighted average effective

interest rate*rm rm rm %

31.8.2018AssetsFinancial

assets at FVTPL - 67,072,254 67,072,254

Short term deposits 9,936,000 - 9,936,000 3.6

Other assets - 1,062,835 1,062,835 9,936,000 68,135,089 78,071,089



a. market risk (contd.)

i. interest rate risk (contd.)

interest rate risk exposure (contd.)

Up to 1 year

non-exposure to interest rate

movement total

Weighted average effective interest

rate*rm rm rm %

31.8.2018 (contd.)

LiabilitiesOther liabilities - 2,745,379 2,745,379

total interest rate sensitivity gap 9,936,000 65,389,710 75,325,710

2017AssetsFinancial assets

at FVTPL - 69,840,772 69,840,772 Short term

deposits 11,779,000 - 11,779,000 3.0 Other assets - 140,294 140,294

11,779,000 69,981,066 81,760,066

LiabilitiesOther liabilities - 437,015 437,015

total interest rate sensitivity gap 11,779,000 69,544,051 81,323,051

* Computed based on assets with exposure to interest rate movement only.




ii. Price risk

Price risk is the risk of unfavourable changes in the fair values of listed equity securities, listed collective investment schemes and listed warrants. The Fund invests in listed equity securities, listed collective investment schemes and listed warrants which are exposed to price fluctuations. This may then affect the NAV per unit of the Fund.

Price risk sensitivity

The Manager’s best estimate of the effect on the (loss)/profit for the financial period due to a reasonably possible change in investments in listed equity securities, listed collective investment schemes and listed warrants with all other variables held constant is indicated in the table below:

Changes in priceincrease/

(Decrease)Basis points

effects on (loss)/profit for the

financial periodincrease/

(Decrease)rm

31.8.2018Financial assets at FVTPL 5/(5) 33,536/(33,536)

31.8.2017Financial assets at FVTPL 5/(5) 34,920/(34,920)

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 financial instruments as at the reporting date.

Fair value Percentage of nAV31.8.2018 31.8.2017 31.8.2018 31.8.2017

rm rm % %

Financial assets at FVTPL 67,072,254 69,840,772 89.1 85.9




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 listed warrants analysed by sector is as follows:

Fair value Percentage of nAV31.8.2018 31.8.2017 31.8.2018 31.8.2017

rm rm % %

Consumer products 19,139,070 18,183,863 25.4 22.4 Industrial products 12,732,485 6,612,617 16.9 8.1 Technology 8,911,654 - 11.8 - Trading/Services 7,621,022 14,591,350 10.1 18.0 Constructions 7,230,502 6,147,240 9.6 7.6 Finance 5,821,495 11,470,263 7.7 14.1 Properties 4,999,836 3,774,420 6.7 4.6 Special Purpose

Acquisition Company 213,312 199,980 0.3 0.2

Plantations 208,800 5,261,423 0.3 6.5 Infrastructure 112,236 433,016 0.2 0.5 Real Estate

Investment Trusts - 3,125,571 - 3.8

Warrants 81,842 41,029 0.1 0.1 67,072,254 69,840,772 89.1 85.9

b. Credit risk

Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss to the Fund by failing to discharge an obligation. The Manager 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 financial asset recognised in the statement of financial position.



b. Credit risk (contd.)

ii. Financial assets that are either past due or impaired

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

iii. Credit quality of financial assets

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

Short term deposits

Percentage of nAV short term deposits Percentage of total

31.8.2018 31.8.2017 31.8.2018 31.8.2017% % % %

ratingP1 61.7 100.0 8.1 14.5WR 38.3 - 5.1 -

100.0 100.0 13.2 14.5

c. Liquidity risk

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities that are to be settled by delivering cash or another financial 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 Manager 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 financial institutions and other instruments, which are capable of being converted into cash within 7 days.



c. Liquidity risk (contd.)

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

Up to 1 yearnote 31.8.2018 31.8.2017

rm rm

AssetsFinancial assets at FVTPL 67,072,254 69,840,772 Short term deposits 9,936,000 11,779,000 Other assets 1,062,835 140,294

i. 78,071,089 81,760,066

LiabilitiesOther liabilities ii. 2,745,379 437,015

Equity iii. 75,289,177 81,293,461

Liquidity gap 36,533 29,590

i. Financial assets

Analysis of financial 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 listed warrants 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”.

d. regulatory reportings

It is the Manager’s responsibility to ensure full compliance of all requirements under the Guidelines on Unit Trust Funds 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 financial statements of the Fund have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board (“MASB”) and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The accounting policies adopted are consistent with those of the previous financial year except for the adoption of the new and amended MFRS which became effective for the Fund on 1 March 2018. The adoption of the new and amended MFRS did not have any significant impact on the financial position or performance of the Fund.

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

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

As at the reporting date, the following Standards, Amendments and Interpretation Committee’s (“IC”) Interpretations that have been issued by MASB will be effective for the Fund in future periods. The Fund intends to adopt the relevant standards when they become effective.

Description

Effective for financial period beginning on

or after

Amendments to MFRS contained in the documents 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 documents entitled “Annual Improvements to MFRS Standards 2014-2016 Cycle” 1 January 2018

Amendments to MFRS 128: Investment in Associates and Joint Ventures contained in the documents entitled “Annual improvements to MFRS Standards 2014 - 2016 Cycle” 1 January 2018

MFRS 9: Financial Instruments 1 January 2018MFRS 15: Revenue from Contracts with Customers 1 January 2018Clarifications to MFRS 15: Revenue from Contracts with

Customers 1 January 2018Amendments to MFRS 2: ClassificationandMeasurement

of Shared-based Payment Transactions 1 January 2018

Amendments to MFRS 4: ApplyingMFRS9FinancialInstruments with MFRS 4 Insurance Contracts

Temporary exemption from MFRS 9 subject

to certain criteria being met for annual periods

beginning on or after 1 January 2018


3. SUmmArY OF SiGniFiCAnt ACCOUntinG POLiCieS (COntD.)

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

Description


or after

Amendments to MFRS 140: Transfers of Investment Property 1 January 2018

IC Interpretation 22: Foreign Currency Transactions and Advance Consideration 1 January 2018

Amendments to MFRS contained in the documents entitled “AnnualimprovementstoMFRSStandards2015-2017Cycle” 1 January 2019

Amendments to MFRS 3: Business Combinations contained in the documents entitled “Annual improvementstoMFRSStandards2015-2017Cycle” 1 January 2019

Amendments to MFRS 11: Joint Arrangements contained in the documents entitled “Annual improvements to MFRSStandards2015-2017Cycle” 1 January 2019

Amendments to MFRS 112: Income Tax Consequences ofPaymentsonFinancialInstrumentsClassifiedasEquity contained in the documents entitled “Annual improvementstoMFRSStandards2015-2017Cycle” 1 January 2019

Amendments to MFRS 123: Borrowing Costs Eligible for Capitalisation contained in the documents entitled “AnnualimprovementstoMFRSStandards2015-2017Cycle” 1 January 2019

MFRS 16: Leases 1 January 2019Amendments to MFRS 9: Prepayment Features with

Negative Compensation 1 January 2019Amendments to MFRS 119: PlanAmendment,Curtailment

or Settlement 1 January 2019Amendments to MFRS 128: Long-term interests in

Associates and Joint Ventures 1 January 2019IC Interpretation 23: Uncertainty Over Income Tax

Treatments 1 January 2019Amendments to MFRS 2: Share-based Payment 1 January 2020Amendments to MFRS 3: Business Combinations 1 January 2020Amendments to MFRS 6: Exploration for and Evaluation of

Mineral Resources 1 January 2020Amendments to MFRS 14: Regulatory Deferral Accounts 1 January 2020Amendments to MFRS 101: Presentation of Financial

Statements 1 January 2020Amendments to MFRS 108:AccountingPolicies,Changes

in Accounting Estimates and Errors 1 January 2020



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

Description


or after

Amendments to MFRS 134: Interim Financial Reporting 1 January 2020Amendment to MFRS 137:Provisions,Contingent

Liabilities and Contingent Assets 1 January 2020Amendment to MFRS 138: Intangible Assets 1 January 2020Amendments to IC Interpretation 12: Service Concession

Arrangements 1 January 2020Amendments to IC Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments 1 January 2020Amendments to IC Interpretation 22: Foreign Currency

Transactions and Advance Consideration 1 January 2020Amendments to IC Interpretation 132: Intangible Assets -

Website Costs 1 January 2020MFRS 17: Insurance Contracts 1 January 2021Amendments to MFRS 10 and MFRS 128: Sale or

Contribution of Assets between an Investor and its Associate or Joint Venture

To be announced by MASB

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

MFRS 9 replaces MFRS 139 on the following requirements: classification and measurement of financial assets and financial liabilities as defined in MFRS 139, impairment methodology and hedge accounting. The Fund is in the process of making an assessment of the impact of this Standard. The Fund does not expect any change in classification and any potential material financial impact arising from the adoption of this standard.

c. Financial assets

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

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

The Fund determines the classification of its financial assets at initial recognition.

i. Financial assets at FVtPL

Financial assets are classified as financial assets at FVTPL if they are held for trading or are designated as such upon initial recognition.

Financial assets held for trading include listed equity securities, listed collective investment schemes and listed warrants acquired principally for the purpose of selling in the near term.



c. Financial assets (contd.)

i. Financial assets at FVtPL (contd.)

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Changes in the fair value of those financial instruments are recorded in profit or loss.

Interest earned and dividend revenue elements of such instruments are recorded separately in “interest income” and “dividend income”, respectively.

ii. receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as receivables.

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

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received is recognised in profit or loss.

d. Impairment of financial assets

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

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Fund considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

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

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the assets does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.



e. income

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

Interest income is recognised using the effective interest method.

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

f. Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include cash at bank and short term deposits with licensed financial institutions with insignificant risk of changes in value.

g. income tax

Income tax on the profit or loss for the financial period comprises current tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial period.

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

h. Unrealised reserves

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

i. Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

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

A financial liability is derecognised when the obligation under the liability is extinguished. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.



j. Unit holders’ contribution – nAV attributable to unit holders

The unit holders’ contribution to the Fund is classified 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 unit holders by way of distribution and/or adjusted accordingly when units are released back to the Trustee.

k. Functional and presentation currency

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

l. Distribution

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

m. Significant accounting judgments and estimates

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

i. Critical judgments made in applying accounting policies

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

ii. Key sources of estimation uncertainty

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


4. FinAnCiAL ASSetS At FVtPL

31.8.2018 31.8.2017rm rm

Financial assets held for trading, at FVTPL:Listed equity securities 66,990,412 66,674,172 Listed collective investment schemes - 3,125,571 Listed warrants 81,842 41,029

67,072,254 69,840,772

1.3.2018 to 31.8.2018

1.3.2017 to 31.8.2017

rm rm

Net (loss)/gain on financial assets at FVTPL comprised:Realised gain on disposals 739,555 772,679 Unrealised changes in fair values (3,238,013) (359,676)

(2,498,458) 413,003

Details of financial assets at FVTPL as at 31 August 2018:

Quantity Aggregate

cost Fair valuePercentage

of nAVrm rm %

Listed equity securities

Consumer productsAjinomoto (Malaysia)

Berhad 38,000 819,158 810,160 1.1 Apex Healthcare Berhad 172,500 853,548 1,321,350 1.8 Carlsberg Brewery

Malaysia Berhad 178,400 2,554,812 3,639,360 4.8 CCK Consolidated

Holdings Berhad 1,508,500 773,057 1,236,970 1.7 CCM Duopharma Biotech

Berhad 1,190,518 1,279,148 1,523,863 2.0 Dutch Lady Milk

Industries Berhad 37,200 1,734,003 2,473,056 3.3 Fraser & Neave Holdings

Bhd 53,000 1,353,177 1,987,500 2.6 Heineken Malaysia

Berhad 4,900 110,446 107,212 0.1 Hup Seng Industries

Berhad 489,400 543,395 513,870 0.7 Magni-Tech Industries

Berhad 63,300 354,550 301,941 0.4 Nestlé (M) Berhad 23,000 1,565,901 3,371,800 4.5


4. FinAnCiAL ASSetS At FVtPL (COntD.)

Details of financial assets at FVTPL as at 31 August 2018: (Contd.)

Quantity Aggregate

cost Fair value Percentage

of nAV rm rm %

Listed equity securities (Contd.)

Consumer products (Contd.)

NTPM Holdings Berhad 120,700 108,347 68,196 0.1 OCR Group Berhad

(formerly known as O&C Resources Berhad) 1,018,000 608,534 397,020 0.5

Panasonic Manufacturing Malaysia Berhad 24,700 619,174 988,000 1.3

Power Root Berhad 250,800 308,300 398,772 0.5 13,585,550 19,139,070 25.4

trading/ServicesBumi Armada Berhad 1,013,800 878,290 562,659 0.7 Chin Hin Group Berhad 733,100 587,078 546,160 0.7 Dialog Group Berhad 213,100 626,191 739,457 1.0 Genting Malaysia Berhad 203,300 1,043,441 1,059,193 1.4 KPJ Healthcare Berhad 668,700 690,900 728,883 1.0 Malaysia Airports

Holdings Berhad 40,000 365,036 374,000 0.5 Mynews Holdings Berhad

(formerly known as Bison Consolidated Berhad) 72,800 104,652 109,200 0.1

QES Group Berhad 5,073,700 1,312,541 1,344,530 1.8 Yinson Holdings Berhad 468,900 1,599,078 2,156,940 2.9

7,207,207 7,621,022 10.1

PlantationsSarawak Oil Palms

Berhad 72,500 259,583 208,800 0.3




Quantity Aggregate


of nAV rm rm %


infrastructureMalakoff Corporation

Berhad 119,400 117,275 112,236 0.2

industrial productsCahya Mata Sarawak

Berhad 232,600 743,574 797,818 1.1 DRB-HICOM Berhad 345,900 792,076 785,193 1.0 Dufu Technology Corp.

Berhad 424,600 726,255 870,430 1.2 Hartalega Holdings

Berhad 86,300 507,133 611,004 0.8 Hibiscus Petroleum

Berhad 1,810,200 1,644,823 1,728,741 2.3 Pentamaster Corporation

Berhad 389,000 928,208 1,330,380 1.8 PETRONAS Gas Berhad 62,100 1,286,478 1,161,270 1.5 Rohas Tecnic Berhad 781,700 1,084,660 914,589 1.2 SCGM Berhad 188,666 452,800 264,132 0.3 SKP Resources Bhd 1,074,600 1,441,719 1,321,758 1.8 Uchi Technologies

Berhad 359,300 943,514 1,095,865 1.4 V. S. Industry Berhad 1,179,175 1,972,312 1,851,305 2.5

12,523,552 12,732,485 16.9

FinanceAEON Credit Service (M)

Berhad 70,200 935,486 1,060,020 1.4 CIMB Group Holdings

Berhad 280,309 1,787,560 1,707,082 2.3 Malayan Banking Berhad 306,666 2,962,709 3,054,393 4.0

5,685,755 5,821,495 7.7




Quantity Aggregate


of nAV rm rm %


PropertiesLBS Bina Group Berhad -

ordinary shares 3,024,140 2,818,268 2,661,243 3.5 S P Setia Berhad -

ordinary shares 550,800 1,803,227 1,448,604 1.9 S P Setia Berhad -

preference shares A 102,080 102,080 101,570 0.2 S P Setia Berhad -

preference shares B 158,743 139,694 130,169 0.2 Sime Darby Property Bhd 526,600 737,081 658,250 0.9

5,600,350 4,999,836 6.7

technologyFrontken Corp. Berhad 1,995,800 1,456,124 1,686,451 2.2 Globetronics Technology

Bhd. 1,143,333 2,635,316 3,224,199 4.3 Inari Amertron Berhad 1,181,950 2,453,055 2,647,568 3.5 JHM Consolidation

Berhad 406,500 398,682 495,930 0.7 ViTrox Corporation

Berhad 111,800 626,433 857,506 1.1 7,569,610 8,911,654 11.8

ConstructionsEconpile Holdings

Berhad 2,551,650 2,584,806 2,117,870 2.8 Gabungan AQRS Berhad 982,100 1,640,153 1,090,131 1.4 GDB Holdings Berhad 2,540,200 1,039,771 1,003,379 1.3 Kerjaya Prospek Group

Berhad 894,120 1,453,282 1,269,650 1.7




Quantity Aggregate


of nAV rm rm %


Constructions (Contd.)MGB Berhad (formerly

known as ML Global Berhad) 1,901,600 2,194,649 1,749,472 2.3

8,912,661 7,230,502 9.6

Special Purpose Acquisition Company

Red Sena Berhad 444,400 224,422 213,312 0.3

total listed equity securities 61,685,965 66,990,412 89.0

Listed warrants

Malaysian Resources Corporation Berhad-WB 246,721 - 61,680 0.1

Mitrajaya Holdings Berhad-WE 107,960 - 11,336 -

Red Sena Berhad-WA 549,900 - 5,499 -SCGM Berhad-WA 22,946 - 3,327 -total listed warrants - 81,842 0.1

Total financial assets at FVtPL 61,685,965 67,072,254 89.1

Unrealised gain on financial assets at FVtPL 5,386,289


5. mAnAGer’S Fee

The Manager’s fee is calculated on a daily basis at a rate not exceeding 2.0% per annum of the NAV of the Fund as provided under Division 13.1 of the Deed.

The Manager is currently charging Manager’s fee of 1.50% per annum of the NAV of the Fund (financial period from 1 March 2017 to 31 August 2017: 1.50% per annum).

6. trUStee’S Fee

Pursuant to the Fifth Master Supplemental Deed dated 25 July 2014, the Trustee’s fee is calculated at a rate not exceeding 0.05% per annum of the NAV of the Fund effective from 1 August 2014.

The Trustee’s fee is currently calculated at 0.05% per annum (financial period from 1 March 2017 to 31 August 2017: 0.05% per annum) of the NAV of the Fund.

7. inCOme tAX

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

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

1.3.2018 to 31.8.2018

1.3.2017 to 31.8.2017

rm rm

Net (loss)/income before tax (2,045,726) 633,724

Tax at Malaysian statutory tax rate of 24% (financial period from 1 March 2017 to 31 August 2017: 24%) (490,974) 152,094

Tax effect of:Income not subject to tax (489,346) (518,766)Loss not deductible for tax purposes 777,123 86,322 Expenses not deductible for tax purposes 62,528 118,844 Restriction on tax deductible expenses for unit trust fund 140,669 161,506

Income tax for the financial period - -


8. SHOrt term DePOSitS

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

9. AmOUnt DUe FrOm/tO LiCenSeD FinAnCiAL inStitUtiOnS

Amount due from/to licensed financial institutions relates to the amount to be received from or paid to licensed financial institutions arising from the sales and purchase of investments.

10. OtHer reCeiVABLeS

31.8.2018 31.8.2017rm rm

Dividend receivable 177,256 88,384 Interest receivable from short term deposits 9,597 968

186,853 89,352

11. OtHer PAYABLeS

31.8.2018 31.8.2017rm rm

Accrual for auditors’ remuneration 19,518 5,391 Accrual for tax agent’s fees 6,005 6,006 Provision for printing and other expenses 11,010 18,193

36,533 29,590

12. net ASSet VALUe AttriBUtABLe tO Unit HOLDerS

NAV attributed to unit holders is represented by:

note 31.8.2018 31.8.2017rm rm

Unit holders’ contribution (a) 55,305,596 65,862,763

Retained earnings:Realised reserves 14,597,292 15,282,172 Unrealised reserves 5,386,289 148,526

19,983,581 15,430,698

75,289,177 81,293,461


12. net ASSet VALUe AttriBUtABLe tO Unit HOLDerS (COntD.)

(a) Unit holders’ contribution

1.3.2018 to 31.8.2018 1.3.2017 to 31.8.2017no. of units rm no. of units rm

At beginning of the financial period 203,145,216 58,283,473 245,636,735 74,126,178

Add: Creation of units 633,290 243,504 2,580,198 947,288

Less: Cancellation of units (8,485,567) (3,210,348) (24,577,864) (9,033,247)

Distribution equalisation - (11,033) - (177,456)

At end of the financial period 195,292,939 55,305,596 223,639,069 65,862,763

The number of units legally or beneficially held by the Manager, Kenanga Investors Berhad and parties related to the Manager as at 31 August 2018 were nil (31 August 2017: nil).

13. net ASSet VALUe Per Unit

In line with the adoption of MFRS 139, 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 financial 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 financial statements is as follows:

31.8.2018 31.8.2017

rm rm/Unit rm rm/Unit

NAV attributable to unit holders for creation/cancellation of units 75,558,836 0.3869 81,631,630 0.3650

Effects of adopting bid prices as fair value (269,659) (0.0014) (338,169) (0.0015)

NAV attributable to unit holders per statement of financial position 75,289,177 0.3855 81,293,461 0.3635


14. POrtFOLiO tUrnOVer rAtiO (“Ptr”)

PTR for the financial period from 1 March 2018 to 31 August 2018 is 0.55 times (financial period from 1 March 2017 to 31 August 2017: 0.51 times).

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

15. mAnAGement eXPenSe rAtiO (“mer”)

MER for the financial period from 1 March 2018 to 31 August 2018 is 1.61% (financial period from 1 March 2017 to 31 August 2017: 1.63%).

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.

16. trAnSACtiOnS WitH LiCenSeD FinAnCiAL inStitUtiOnS

transaction value

rm

Percentage of total

%

Brokerage, stamp

duty and clearing fee

rm

Percentage of total

%

Kenanga Investment Bank Berhad* 27,559,312 34.6 76,523 35.0

Maybank Investment Bank Berhad 14,838,595 18.6 39,981 18.3

CIMB Investment Bank Berhad 9,052,372 11.4 24,395 11.1 Public Investment Bank Berhad 7,851,384 9.9 22,165 10.1 Affin Hwang Investment Bank

Berhad 6,278,637 7.9 17,288 7.9 UOB Kay Hian Securities (M)

Sdn Bhd 5,046,726 6.3 13,988 6.5 RHB Investment Bank Berhad 3,670,598 4.6 10,142 4.6 Hong Leong Investment Bank

Berhad 3,394,729 4.3 9,470 4.3 KAF-Seagroatt & Campbell

Securities Sdn Bhd 1,440,264 1.8 3,450 1.6 Alliance Investment Bank

Berhad 456,040 0.6 1,390 0.6 79,588,658 100.0 218,792 100.0

* Kenanga Investment Bank Berhad is a related party of Kenanga Investors Berhad.

The above transactions values are in respect of listed equity securities, listed collective investment schemes and listed warrants.

The directors of the Manager are of the opinion that the transactions with the related party 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 Manager is of the opinion that the above dealings have been transacted on an arm’s length basis.


17. SeGmentAL rePOrtinG

a. Business Segments

In accordance with the objective of the Fund, the Fund can invest 70% to 98% of its fund in listed Malaysian investment securities. The following table provides an analysis of the Fund’s revenue, results, assets and liabilities by business segments:

Listed investment securities

Other investments total

rm rm rm

1.3.2018 to 31.8.2018revenueSegment (loss)/income (1,324,533) 125,462 Segment expenses (213,824) -Net segment (loss)/income

representing segment results (1,538,357) 125,462 (1,412,895)Unallocated expenditure (632,831)Loss before tax (2,045,726)Income tax -Net loss after tax (2,045,726)

31.8.2018AssetsFinancial assets at FVTPL 67,072,254 -Short term deposits - 9,936,000 Other segment assets 1,029,770 9,597 Total segment assets 68,102,024 9,945,597 78,047,621 Unallocated assets 23,468

78,071,089

LiabilitiesSegment liabilities 2,649,156 - 2,649,156 Unallocated liabilities 132,756

2,781,912


17. SeGmentAL rePOrtinG (COntD.)

a. Business segments (contd.)

Listed investment

securitiesOther

investments totalrm rm rm

1.3.2017 to 31.8.2017revenueSegment income 1,582,334 219,514 Segment expenses (415,672) -Net segment income representing

segment results 1,166,662 219,514 1,386,176 Unallocated expenditure (752,452)Income before tax 633,724 Income tax - Net income after tax 633,724

31.8.2017AssetsFinancial assets at FVTPL 69,840,772 -Short term deposits - 11,779,000 Other segment assets 88,384 968 Total segment assets 69,929,156 11,779,968 81,709,124 Unallocated assets 50,942

81,760,066

LiabilitiesSegment liabilities 270,210 - 270,210 Unallocated liabilities 196,395

466,605

b. Geographical segments

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


18. FinAnCiAL inStrUmentS

a. Classification of financial instruments

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

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

Financial assets

at FVtPL receivables

Financial liabilities total

rm rm rm rm

31.8.2018AssetsListed equity

securities 66,990,412 - - 66,990,412 Listed warrants 81,842 - - 81,842 Short term deposits - 9,936,000 - 9,936,000 Amount due

from financial institutions 852,514 852,514

Other receivables - 186,853 - 186,853 Cash at bank - 23,468 - 23,468

67,072,254 10,998,835 - 78,071,089

LiabilitiesAmount due to

Manager - - 93,099 93,099 Amount due to

Trustee - - 3,124 3,124 Amount due

to financial institutions - - 2,649,156 2,649,156

- - 2,745,379 2,745,379


18. FinAnCiAL inStrUmentS (COntD.)

a. Classification of financial instruments (contd.)

Financial assets

at FVtPL receivables

Financial liabilities total

rm rm rm rm

31.8.2017AssetsListed equity

securities 66,674,172 - - 66,674,172 Listed collective

investment schemes 3,125,571 - - 3,125,571

Listed warrants 41,029 - - 41,029 Short term deposits - 11,779,000 - 11,779,000 Other receivables - 89,352 - 89,352 Cash at bank - 50,942 - 50,942

69,840,772 11,919,294 - 81,760,066

LiabilitiesAmount due to

Manager - - 163,434 163,434 Amount due to

Trustee - - 3,371 3,371 Amount due to

licensed financial institutions - - 270,210 270,210

- - 437,015 437,015

b. Financial instruments that are carried at fair value

The Fund’s financial assets at FVTPL are carried at fair value. The fair values of these financial 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 totalrm rm rm rm

investments:31.8.2018Listed equity

securities 66,990,412 - - 66,990,412 Listed warrants 81,842 - - 81,842


18. FinAnCiAL inStrUmentS (COntD.)

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

Level 1 Level 2 Level 3 totalrm rm rm rm

investments: (Contd.)

31.8.2017Listed equity

securities 66,674,172 - - 66,674,172 Listed collective

investment schemes 3,125,571 - - 3,125,571

Listed warrants 41,029 - - 41,029

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

The fair values of listed equity securities, listed collective investment schemes and listed warrants are determined by reference to Bursa Malaysia Securities Berhad’s bid prices 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 financial assets and financial liabilities are not carried at fair value but approximate fair values due to the relatively short term maturity of these financial instruments.

19. CAPitAL mAnAGement

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

The Fund’s objectives for managing capital are:

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

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

c. To maintain sufficient fund size to make the operations of the Fund cost-efficient.

No changes were made to the capital management objectives, policies or processes during the current and previous financial periods.

investor Services CenterToll Free Line: 1 800 88 3737Fax: +603 2172 3133Email: [email protected]

Head Office, Kuala LumpurLevel 14, Kenanga Tower, 237 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3000 Fax: 03-2172 3080

kenanga premier fund · financial statements 11 - 41. ii kenanga premier fund interim report...

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