kenanga premier fund · 2020. 11. 1. · ii kenanga premier fund interim report corporate directory...

ANNUAL REPORT

For the Financial Year Ended 28 February 2021

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 9Independent Auditors’ Report 10 - 12Statement by the Manager 13Financial Statements 14 - 47

ii Kenanga Premier Fund Annual Report

CORPORATE DIRECTORYManager: Kenanga Investors Berhad Company No. 199501024358 (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)Imran Devindran Abdullah (Independent

Director)Norazian Ahmad Tajuddin (Independent

Director)Ismitz Matthew De Alwis (Executive Director)

Investment Committee Syed Zafilen Syed Alwee (Independent

Member)Peter John Rayner (Independent Member)Imran Devindran Abdullah (Independent

Member)Norazian Ahmad Tajuddin (Independent

Member)Ismitz Matthew De Alwis (Non-Independent

Member)

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. 199401027349 (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 LumpurTel: 03-2261 8888Fax: 03-2261 9899

Auditor: Ernst & Young PLT Company No. 202006000003 (LLP0022760-LCA) & 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. 198901002487 (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 Annual Report iii

DIRECTORY OF MANAGER’S OFFICESRegional Branch Offices :

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

Johor BahruNo. 63 Jalan Molek 3/1,Taman Molek 81100 Johor Bahru, JohorTel: 07-288 1683Fax: 07-288 1693

MelakaNo. 43, Jalan KSB 11Taman Kota Syahbandar75200 MelakaTel No. 06-240 2310Fax No. 06-240 2287

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

KuantanGround Floor Shop,No. B8, Jalan Tun Ismail 125000 Kuantan, PahangTel : 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 FloorNo. 63, Persiaran Greenhill30450 Ipoh, PerakTel: 05-254 7573 / 7570 / 7575Fax: 05-254 7606

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

Kota KinabaluLevel 8, Wisma Great EasternNo. 68, Jalan Gaya 88000 Kota Kinabalu, SabahTel: 088-203 063 Fax: 088-203 062

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 Annual 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 (FBM 100)

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 the Fund as at 28 February 2021

Size of holdingsNo. of

unit holdersNo. of

units held5,000 and below 346 797,2455,001 - 10,000 286 2,124,25310,001 - 50,000 750 18,703,01850,001 - 500,000 393 50,096,091500,001 and above 40 91,574,455Total 1,815 163,295,062

Kenanga Premier Fund Annual Report 2

2. MANAGER’S REPORT

2.1 Explanation on whether the Fund has achieved its investment objective

Since inception date, the Fund has appreciated by 492.6% in net asset value terms, outperforming its benchmark increase of 41.6%. The Fund’s performance has therefore satisfied the objective for consistent annual returns and medium to long-term capital appreciation.

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

Performance Chart Since Launch (26/11/1996 – 28/2/2021)Kenanga Premier Fund vs FTSE-Bursa Malaysia 100 Index

Based on the fund’s portfolio returns as at 10 February 2021, the Volatility Factor (VF) for this fund is 20.87 and is classified as “Very High”. (Source: Lipper). “Very High”

includes funds with VF that are above 17.19 (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 29 March 2019 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. The fund fact sheet has not been reviewed by the SC. 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 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 equity and equity-related

securities risk, currency risk and country risk.

* Source: Kenanga Investors Berhad, 28 February 2021

DISTRIBUTION HISTORY *

Date

16-May-16

26-Feb-15

27-Feb-14

-

-

-

Unit Split

1

2

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

subject to the goods and services tax /sales and services tax/other taxes

of similar nature as may be imposed by the government or other

authorities from time to time.

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

TOP EQUITY HOLDINGS (% NAV) *

7.88%

6.26%

CIMB Commerce Trustee Berhad

Benchmark

FTSE Bursa Malaysia Top 100 Index

Designated Fund Manager

RM 84.36 million

NAV PER UNIT *

RM 0.5166

HISTORICAL FUND PRICE *FUND SIZE *

Lee Sook Yee

#Source : Lipper, 28 February 2021

FUND PERFORMANCE (%)

CUMULATIVE FUND PERFORMANCE (%) #

BenchmarkFundPeriod

CALENDAR YEAR FUND PERFORMANCE (%) #

BenchmarkPeriod Fund

Kenanga Premier FundMarch 2021

9.72

-2.88

-9.28

12.74

-2.45

19.69

35.09

1 month

6 months

1 year

-12.54

0.84

Highest

Lowest

2.12

9.19

41.60

30.29

47.26

492.60

FUND OBJECTIVE

Sales Charge

Max 5.50%

Annual Management Fee

1.50% p.a.

Annual Trustee Fee

0.05% p.a.

1.77

Aims to provide consistent annual returns and medium to long-

term capital appreciation.

Fund Category/Type

Equity / Growth

Launch Date

26 November 1996

Trustee

3.81

-15.85

8.65

0.99

3.492020 21.82

2019

2018

2017

2016

Date

RM 1.0400

RM 0.2692

29-Jun-99

19-Mar-20

3 years

5 years

Since Launch

Redemption Charge

Nil

FRONTKEN CORP BHD

UNISEM (M) BHD

DUFU TECHNOLOGY CORP BHD

RM Yield (%)

3.58 sen

3.89 sen

3.01 sen

9.26%

8.70%

6.45%

Gross DistributionGREATECH TECHNOLOGY BHD

UWC BHD

Since Inception

3

4

5

5.40%

4.55%

4.43%

93.9%

91.5%

92.2%

6.1%

8.5%

7.8%

December

January

February

Liquidity Equity

Lipper Analytics10 Feb 2021

3-yearFund Volatility

Very High

-200

-100

0

100

200

300

400

500

600

No

v 9

6

Jun

98

De

c 9

9

Jun

01

De

c 0

2

Jun

04

De

c 0

5

Jun

07

De

c 0

8

Jun

10

De

c 1

1

Jun

13

De

c 1

4

Jun

16

De

c 1

7

Jun

19

Feb

21

% Cumulative Return, Launch to 28/02/2021

Kenanga Premier : 492.60 FTSE Bursa Malaysia Top 100 Index : 41.60

Source: Novagni Analytics and Advisory

35.1%

21.1%

7.8%

7.8%

6.3%

5.9%

5.3%

4.0%

3.6%

1.6%

1.5%

Technology

Industrial Products

Finance

Short Term Deposit and Cash

Construction

Healthcare

Energy

Utilities

Consumer Products

Telecommunications

Others

Source: Novagni Analytics and Advisory

2.3 Investment strategies and policies employed during the financial year 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 28 February 2021 and comparison with the previous financial year

Asset 28 Feb 2021 29 Feb 2020Listed investment securities 92.3% 93.3%Unlisted investment securities 0.1% -Short term deposits and cash 7.6% 6.7%

Reason for the differences in asset allocation

As of 28 February 2021, the Fund’s equity allocation has decreased as the Fund locked in upside and raised cash to accumulate quality holdings upon market pullback.


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

Year under review

Kenanga Premier Fund 35.09%FTSE-Bursa Malaysia 100 Index 9.72%

Source: Lipper

For the financial year under review, the Fund outperformed its benchmark by 25.37%. The outperformance was mainly attributable to good sector allocation and stock picking.

2.6 Review of the market

Market review

Recall after a panic sell-off 1Q20, equity markets improved into 3Q20 following aggressive easing by global central banks and massive fiscal stimulus unleashed by governments. Moderation of new infection cases for COVID-19 also added to the positive sentiment. In addition, after more than a month’s stalemate between Saudi and Russia over production issues, OPEC+ group finally agreed to reduce oil output. Locally, Bank Negara released its economy outlook and projected 2020 GDP growth at a range of -2.0% to +0.5%.

Subsequently, in August the US Federal Reserve announced a shift to average inflation targeting, wherein interest rate could stay lower for longer period. The Brent and WTI oil futures posted fourth monthly gains of 4.6% and 5.8% respectively on better demand expectation and OPEC+’s supply discipline.

Global markets turned risk-on mode in November as investors welcomed the prospect of a Biden presidency with a split Congress and the positive news of Pfizer and BioNTech’s COVID-19 vaccine result. Locally, BNM kept OPR rate unchanged at 1.75% and projected 2020/21 GDP growth at -3.5% to -5.5%/5.5% to 8% respectively. The government tabled an expansionary budget 2021 on 6 November with 2020/21 budget deficit projection of 6%/5.4% respectively. The budget was later passed on 25 November with some tweaks including automatic loan moratorium for B40 and SMEs and expansion of EPF account 1 withdrawal scheme. The FBMKLCI jumped 6.5% to 1,563 points in November 2020.

Equity markets remained steady in December as the US approved the use of Pfizer and BioNTech vaccine. The US Congress finally passed US$900 billion Covid relief bill to restore unemployment benefits and other assistance to businesses. Investors continued to switch from defensives into recovery sectors on the expectation of stronger economic growth following the start of the vaccination process. Meanwhile, the UK announced a new variant of COVID-19 virus which is more contagious but did not lead to worsening symptoms. On the domestic scene, Fitch Rating downgraded Malaysia’s rating from A- to BBB+, but raised the outlook to stable from negative. Fitch cited the downgrade due to weakened key credit metrics and political uncertainties which may cause policy uncertainties and hamper governance standards improvement.


2.6 Review of the market (contd.)

Market review (contd.)

MSCI Asia ex-Japan gained 6.6% in December, closing at an all-time high outperforming both MSCI ASEAN (+3.7%) and Dow Jones (+3.3%). The leading markets in the region were Korea (+10.9%), India (+8.2%), and Taiwan (+7.4%), while Thailand (+2.9%), Shanghai (+2.4%) and Singapore (+1.4%) lagged behind despite posting month-on-month (MoM) gains. Commodities had a particularly good month as well with both crude oil and CPO up by 8.8% and 8.9% respectively over the month, amid the vaccine breakthrough and U.S. stimulus package boosting the demand outlook.

Locally, the FBMKLCI posted a second consecutive month of gains as investors continued to position into the Covid-19 recovery play in the market following news of COVID-19 vaccine breakthroughs in November. All sectors, except healthcare and REITs, posted MoM positive returns in December. The four sectors that posted the highest returns were finance, energy, property and construction, as investors rotated into sectors that are expected to benefit from the projected rebound in the economy. The FBM KLCI closed +4.1% MoM in December at 1,627 pts. The December gain helped the FBM KLCI to end 2020 with a positive year-on-year (YoY) return of 2.4%.

Moving into January 2021, markets risk-on rally continued into the month bolstered by vaccination rollouts, optimism on the new Biden administration’s proposed stimulus plans as well as China’s stronger than expected recovery. However, sentiment turned towards the end of the month on vaccine delays, new virus mutations and the economic impact from extended lockdowns. Global markets sold off due to rising US bond yields, fear of sharper inflation and an earlier than expected timeline in normalising monetary policy.

Locally, the FBMKLCI ended February marginally higher (+0.72%) as Malaysia began easing lockdown measures and started to roll out its vaccination program. The FBM100 gained 1.7% while small caps (FBM SC) jumped 7.89%. All sectors (except healthcare) were broadly higher led by energy as oil prices trended higher and broke the USD60 pbl level. Retailers remained as net buyers at RM2.0 billion (versus RM1.8 billion in January) whilst local institutions were net sellers at RM1.7 billion. Foreign institutions remained net sellers at RM0.9 billion.

Market outlook

While short term risks of worsening infections and extended lockdowns may persist, investors should look past the noise in lieu of the upcoming vaccine deliveries which should support the eventual recovery. Hence, cyclical sectors and recovery stocks are likely to outperform. Global policy also remains supportive of the recovery, with ample fiscal stimulus, low interest rates and high levels of monetary injections by global central banks.

Fund strategy

We continue to adopt a barbell strategy in our sector positioning and maintain overweight in the technology sector to ride on secular growth trends. On the other hand, we also favour more cyclical sectors such as consumer discretionary, financials, energy, and commodities to take advantage of the recovery.


2.7 Distributions

For the financial 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 financial year under review.

2.9 Significant changes in the state of affairs of the Fund during the financial year

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

However, a Second Supplemental Master Prospectus was issued on 18 December 2020. Please refer to the Second Supplemental Master Prospectus for futher details.

2.10 Circumstances that materially affect any interests of the unit holders

There were no circumstances that materially affected any interests of the unit holders during the financial year under review.

2.11 Rebates and 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. Any dealing with the broker or dealer is executed on terms which are the most favourable for the Fund. During the financial year under review, the Manager received soft commissions from its stockbrokers.

2.12 Cross-trade

During the financial year under review, no cross-trade transaction were undertaken by the Manager for the Fund.


3. FUND PERFORMANCE

3.1 Details of portfolio composition of the Fund for the last three financial years as at 28/29 February are as follows:

a. Distribution among industry sectors and category of investments:

FY FY FY2021 2020 2019

% %

Technology 35.2 15.9 17.8 Industrial Products and Services 21.0 11.4 10.4 Financial Services 7.8 8.2 5.1 Construction 6.3 6.3 8.5 Health Care 6.0 7.5 8.2 Energy 5.3 13.5 9.1 Utilities 4.0 3.9 4.1 Consumer Products and Services 3.6 11.1 20.4 Telecommunications and Media 1.6 1.6 - Property 0.9 5.5 5.1 Plantation - 3.6 1.0 Transportation and Logistics - 2.1 0.7 Real Estate Investment Trust 0.6 2.7 - Unlisted warrants* 0.1 - -Listed warrants - - - Short term deposits and cash 7.6 6.7 9.6

100.0 100.0 100.0

* Unlisted warrants that have been approved for listing by relevant authority.

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, short term deposits and cash instruments only.


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

FY2021

FY2020

FY2019

Net asset value (“NAV”) (RM Million) 84.36 67.06 65.69 Units in circulation (Million) 163.30 175.36 188.03 NAV per unit (RM) 0.5166 0.3824 0.3494 Highest NAV per unit (RM) 0.5368 0.4043 0.3955 Lowest NAV per unit (RM) 0.2692 0.3442 0.3166 Total return (%) 35.09 9.44 -11.88- Capital growth (%) 35.09 9.44 -11.88- Income growth (%) - - - Gross distribution per unit (sen) - - - Net distribution per unit (sen) - - - Management expense ratio

(“MER”) (%)1 1.63 1.64 1.65 Portfolio turnover ratio (“PTR”) (times)2 0.69 0.82 1.08

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. MERisloweragainstpreviousfinancialyearmainlyduetolowerrecoveredexpensesincurredbytheFundduringthefinancialperiodunderreview.

2. PTRisslightlyloweragainstpreviousfinancialyearduetolowertradingactivities.


3.3 Average total return of the Fund

1 Year29 Feb 20 -28 Feb 21

3 Years28 Feb 18 -28 Feb 21

5 Years28 Feb 16 -28 Feb 21

KPF 35.09% 10.97% 9.10%FBM 100 9.72% -3.58% 0.80%

Source: Lipper

3.4 Annual total return of the Fund

Year under review

29 Feb 20 - 29 Feb 21

1 Year28 Feb 19 - 29 Feb 20

28 Feb 18 - 28 Feb 19

28 Feb 17 - 28 Feb 18

29 Feb 16 - 28 Feb 17

KPF 35.09% 9.44% -11.88% 9.08% 3.62%FBM 100 9.72% -11.94% -9.48% 11.01% 3.87%

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 the Manager of the Fund, has fulfilled its duties in the following manner for the financial year ended 28 February 2021.

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 Executive Officer Kuala Lumpur, Malaysia 31 May 2021


5. INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS OF KENANGA PREMIER FUND

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Kenanga Premier Fund (“the Fund”), which comprise the statement of financial position as at 28 February 2021, and the statement of comprehensive income, statement of changes in net asset value and statement of cash flows of the Fund for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, as set out on pages 14 to 47.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Fund as at 28 February 2021 and of its financial performance and cash flows for the financial 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’responsibilitiesfortheauditofthefinancialstatements section of our report. We believe that the audit evidence we have obtained is sufficient 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 Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Informationotherthanthefinancialstatementsandauditors’reportthereon

The Manager of the Fund (“the Manager”) 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 financial statements of the Fund and our auditors’ report thereon.

Our opinion on the financial 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 financial 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 financial 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 UNIT HOLDERS OF KENANGA PREMIER FUND (CONTD.)

ResponsibilitiesoftheManagerandtheTrusteeforthefinancialstatements

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

In preparing the financial statements of the Fund, the Manager 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 Manager 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 financial reporting process. The Trustee is also responsible for ensuring that the Manager maintains proper accounting and other records as are necessary to enable true and fair presentation of these financial statements.

Auditors’responsibilitiesfortheauditofthefinancialstatements

Our objectives are to obtain reasonable assurance about whether the financial 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 influence the economic decisions of users taken on the basis of these financial 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 financial 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 sufficient 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 Manager.


5. INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS OF KENANGA PREMIER FUND (CONTD.)

Auditors’responsibilitiesfortheauditofthefinancialstatements(contd.)

• Conclude on the appropriateness of the Manager’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 significant 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 financial 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 financial statements of the Fund, including the disclosures, and whether the financial statements of the Fund represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Other matters

This report is made solely to the unit holders of the Fund, as a body, in accordance with the Guidelines on Unit Trust Funds 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 PLT Ng Sue Ean202006000003 (LLP0022760-LCA) & AF 0039 No. 03276/07/2022 JChartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia

31 May 2021


6. STATEMENT BY THE MANAGER

I, Ismitz Matthew De Alwis, being a director of Kenanga Investors Berhad, do hereby state that, in the opinion of the Manager, the accompanying statement of financial position as at 28 February 2021 and the related statement of comprehensive income, statement of changes in net asset value and statement of cash flows for the financial year ended 28 February 2021 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 28 February 2021 and of its financial performance and cash flows for the financial year then ended 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

31 May 2021


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

7. FINANCIAL STATEMENTS 7.1 STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2021

Note 2021 2020RM RM

INVESTMENT INCOME

Dividend income 1,670,348 1,387,896Interest income 187,774 254,423 Net gain from investments:

- Financial assets at fair value through profit or loss (“FVTPL”) 4 22,593,179 5,916,945

24,451,301 7,559,264

EXPENSES

Manager’s fee 5 1,071,455 1,028,282 Trustee’s fee 6 35,715 34,276 Auditors’ remuneration 13,800 13,800 Tax agent’s fee 4,000 4,000 Administrative expenses 36,335 44,981 Brokerage and other transaction costs 424,363 471,261

1,585,668 1,596,600

NET INCOME BEFORE TAX 22,865,633 5,962,664

Income tax 7 - -

NET INCOME AFTER TAX, REPRESENTING TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR 22,865,633 5,962,664

Net income after tax is made up as follows:Realised gain 8,147,202 1,802,910 Unrealised gain 4 14,718,431 4,159,754

22,865,633 5,962,664



7.2 STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 2021

Note 2021 2020RM RM

ASSETS

INVESTMENTS

Financial assets at FVTPL 4 77,804,488 61,949,004 Short term deposits 8 6,348,000 4,462,000

84,152,488 66,411,004

OTHER ASSETS

Amount due from licensed financial institutions 9 962,516 229,559 Other receivables 10 30,950 10,788 Cash at bank 14,332 12,302

1,007,798 252,649

TOTAL ASSETS 85,160,286 66,663,653

LIABILITIES

Amount due to Manager 54,281 104,595 Amount due to Trustee 3,044 2,667 Amount due to licensed financial institutions 9 691,339 -Other payables 11 50,390 38,800 TOTAL LIABILITIES 799,054 146,062

EQUITY

Unit holders’ contribution 42,816,115 47,838,107 Retained earnings 41,545,117 18,679,484 NET ASSET VALUE (“NAV”)

ATTRIBUTABLE TO UNIT HOLDERS 12 84,361,232 66,517,591

TOTAL LIABILITIES AND EQUITY 85,160,286 66,663,653

NUMBER OF UNITS IN CIRCULATION 12(a) 163,295,062 175,364,933

NET ASSET VALUE PER UNIT (RM) 13 0.5166 0.3793



7.3 STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2021

NoteUnit holders’ contribution

Retained earnings Total NAV

RM RM RM

2021At beginning of the financial

year 47,838,107 18,679,484 66,517,591 Total comprehensive income - 22,865,633 22,865,633 Creation of units 12(a) 1,887,017 - 1,887,017Cancellation of units 12(a) (6,764,719) - (6,764,719)Distribution equalisation 12(a) (144,290) - (144,290)At end of the financial year 42,816,115 41,545,117 84,361,232

2020At beginning of the financial

year 52,640,312 12,716,820 65,357,132 Total comprehensive income - 5,962,664 5,962,664 Creation of units 12(a) 6,257,853 - 6,257,853 Cancellation of units 12(a) (10,972,250) - (10,972,250)Distribution equalisation 12(a) (87,808) - (87,808)At end of the financial year 47,838,107 18,679,484 66,517,591



7.4 STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2021

2021 2020RM RM

CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES

Proceeds from sale of financial assets at FVTPL 52,135,766 58,778,822

Dividends received 1,650,133 1,377,752 Interest from deposits received 187,827 255,603Tax agent’s fee paid - (4,000)Auditors’ remuneration paid (13,800) (13,800)Payment for other fees and expenses (16,747) (22,991)Trustee’s fee paid (35,338) (34,102)Manager’s fee paid (1,060,151) (1,023,079)Purchase of financial assets at FVTPL (45,876,050) (56,330,413)Net cash generated from operating and

investing activities 6,971,640 2,983,792

CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from units created 1,955,409 6,335,774 Cash paid on units cancelled (7,039,019) (11,115,265)Net cash used in financing activities (5,083,610) (4,779,491)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,888,030 (1,795,699)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 4,474,302 6,270,001

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 6,362,332 4,474,302

Cash and cash equivalents comprise:Cash at bank 14,332 12,302 Short term deposits 6,348,000 4,462,000

6,362,332 4,474,302


7.5 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2021

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.

The financial statements were authorised for issue by the Chief Executive Officer of the Manager on 31 May 2021.

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.

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.


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

a. Market risk (contd.)

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 %

2021AssetsFinancial assets at

FVTPL - 77,804,488 77,804,488 Short term deposits 6,348,000 - 6,348,000 1.7Other assets - 1,007,798 1,007,798

6,348,000 78,812,286 85,160,286

LiabilitiesOther liabilities - 748,664 748,664

Total interest rate sensitivity gap 6,348,000 78,063,622 84,411,622

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




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 %

2020AssetsFinancial assets at

FVTPL - 61,949,004 61,949,004 Short term deposits 4,462,000 - 4,462,000 2.8 Other assets - 252,649 252,649

4,462,000 62,201,653 66,663,653

LiabilitiesOther liabilities - 107,262 107,262

Total interest rate sensitivity gap 4,462,000 62,094,391 66,556,391

* Calculated 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 scheme and unlisted/listed warrants. The Fund invests in listed equity securities, listed collective investment scheme and unlisted/listed warrants which are exposed to price fluctuations. This may then affect the NAV per unit of the Fund.




ii. Price risk (contd.)

Price risk sensitivity

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

Changes in priceEffects on income

for the financial yearIncrease/(Decrease) Gain/(Loss)

Basis points RM

2021Financial assets at FVTPL 5/(5) 38,902/(38,902)

2020Financial assets at FVTPL 5/(5) 30,975/(30,975)

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 NAV2021 2020 2021 2020

RM RM % %

Financial assets at FVTPL 77,804,488 61,949,004 92.2 93.1




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 scheme and unlisted/listed warrants analysed by sector is as follows:

Fair value Percentage of NAV2021 2020 2021 2020

RM RM % %

Technology 29,605,298 10,592,379 35.1 15.9 Industrial Products

and Services 17,701,086 7,598,132 21.0 11.4 Financial Services 6,597,268 5,459,396 7.8 8.2 Construction 5,311,234 4,164,067 6.3 6.3 Health Care 5,003,340 4,952,934 5.9 7.4 Energy 4,476,093 8,961,105 5.3 13.5 Utilities 3,380,200 2,584,260 4.0 3.9 Consumer Products

and Services 2,990,782 7,392,838 3.6 11.1 Telecommunications

and Media 1,372,600 1,044,785 1.6 1.6 Property 737,889 3,625,597 0.9 5.4 Plantation - 2,417,792 - 3.6 Transportation and

Logistics - 1,384,866 - 2.1 Real Estate

Investment Trust 523,698 1,770,624 0.6 2.7 Unlisted warrants 105,000 - 0.1 - Listed warrants - 229 - -

77,804,488 61,949,004 92.2 93.1

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 total short term deposits Percentage of NAV2021 2020 2021 2020

% % % %

RatingP1/MARC-1 100.0 100.0 7.5 6.7

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 assets. 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 2021 2020

RM RM

AssetsFinancial assets at FVTPL 77,804,488 61,949,004 Short term deposits 6,348,000 4,462,000 Other assets 1,007,798 252,649

i. 85,160,286 66,663,653

LiabilitiesOther liabilities ii. 748,664 107,262

Equityiii. 84,361,232 66,517,591

Liquidity gap 50,390 38,800

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 scheme and unlisted/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 financial 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 financial year except for the adoption of the amended MFRS and Interpretation Committee’s (“IC”) Interpretations, which became effective for the Fund on 1 March 2020.

Description

Effective for financial period beginning on

or after

Amendments to MFRS 2: Share-Based Payments 1 January 2020Amendment to MFRS 3: Business Combination 1 January 2020Amendments to MFRS 3: DefinitionofaBusiness 1 January 2020Amendments to MFRS 6: Exploration for and Evaluation of

Mineral Resources 1 January 2020Amendment 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 2020Amendments to MFRS 101 and MFRS 108: Definitionof

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

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

Arrangements 1 January 2020Amendment to IC Interpretation 19: Extinguishing Financial

Liabilities with Equity Instruments 1 January 2020


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

a. Basis of accounting (contd.)

Description

Effective for financial period beginning on

or after

Amendments to IC Interpretation 20: Stripping Costs in the Production Phase of a Surface Mine 1 January 2020

Amendment 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

Amendments to MFRS 9, MFRS 139 and MFRS 7: Interest Rate Benchmark Reform 1 January 2020

The adoption of the amended MFRS and IC Interpretations did not have any significant impact on the financial position or performance of the Fund.

b. Standards and amendments issued but not yet effective

As at the reporting date, the following new standard and amendments to standards and IC Interpretations that have been issued by MASB will be effective for the Fund in future financial periods. The Fund intends to adopt the relevant standards and interpretations when they become effective.

Description

Effective for financial periods beginning on

or after

Amendments to MFRS 16: Covid-19 - Related Rent Concessions 1 June 2020

Amendments to MFRS 4: Extension of the Temporary Exemption from Applying MFRS 9 17 August 2020

Amendments to MFRS 9, MFRS 139, MFRS 7, MFRS 4 and MFRS 16: Interest Rate Benchmark Reform - Phase 2 1 January 2021

Amendments to MFRS 16: Covid-19 - Related Rent Concessions beyond 30 June 2021 1 April 2021

Amendments to MFRS contained in the document entitled “Annual Improvements to MFRS Standards 2018 - 2020 Cycle” 1 January 2022

Amendments to MFRS 1: Subsidiary as a First-time Adopter contained in the document entitled “Annual Improvements to MFRS Standards 2018 - 2020 Cycle” 1 January 2022

Amendments to MFRS 9: Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities contained in the document entitled “Annual Improvements to MFRS Standards 2018 - 2020 Cycle” 1 January 2022



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

Description

Effective for financial periods beginning on

or after

Amendments to Illustrative Examples accompanying MFRS 16: Lease Incentives contained in the document entitled “Annual Improvements to MFRS Standards 2018 - 2020 Cycle” 1 January 2022

Amendments to MFRS 141: Taxation in Fair Value Measurements contained in the document entitled “Annual Improvements to MFRS Standards 2018 - 2020 Cycle” 1 January 2022

Amendments to MFRS 3: Reference to the Conceptual Framework 1 January 2022

Amendments to MFRS 116:Property,PlantandEquipment - Proceeds before Intended Use 1 January 2022

Amendments to MFRS 137: Onerous Contracts - Cost of FulfillingaContract 1 January 2022

MFRS 17: Insurance Contracts 1 January 2023Amendments to MFRS 17: Insurance Contracts 1 January 2023Amendments to MFRS 101:ClassificationofLiabilitiesas

Current or Non-current 1 January 2023Amendments to MFRS 101: Disclosure of Accounting

Policies 1 January 2023AmendmentstoMFRS108:DefinitionofAccounting

Estimates 1 January 2023Amendments to MFRS 10 and MFRS 128: Sale or

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

To be announcedby MASB

These pronouncements are not expected to have any significant impact to the financial statements of the Fund upon their initial application.

c. Financial instruments

Financial assets and 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 instruments.

i. Initial recognition

The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments, as described in Notes 3(c)(ii) and (iii).



c. Financial instruments (contd.)

ii. Measurement categories of financial assets and liabilities

The Fund classifies all of its financial 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 profit or loss.

The Fund may designate financial instruments at FVTPL, if so doing eliminates or significantly reduces measurement or recognition inconsistencies.

The Fund’s other financial assets include cash at bank, short term deposits, trade receivables and other receivables.

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability. Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities.

The Fund’s other financial liabilities include trade payables and other payables.

Other financial liabilities are recognised initially and measured at fair values, net of directly attributable transaction costs and subsequently measured at amortised cost using the effective interest rate (“EIR”). Gains or losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

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

The Fund only measures the cash at bank, short term deposits, trade receivables and other receivables at amortised cost if both of the following conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

• The contractual terms of the financial asset give rise on specified dates to cash flows 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 reflects how it manages groups of financial assets to achieve its business objective.




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

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 financial 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 financial assets held within that business model) and, in particular, the way those risks are managed;

• How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows 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 flows after initial recognition are realised in a way that is different from the Fund’s original expectations, the Fund does not change the classification of the remaining financial assets held in that business model but incorporates such information when assessing newly originated or newly purchased financial assets going forward, unless it has been determined that there has been a change in the original business model.

The SPPI test

As a second step of its classification process, the Fund assesses the contractual terms of financial assets to identify whether they meet the SPPI test.

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

The most significant 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 judgment and considers relevant factors such as the currency in which the financial 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 flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to be measured at FVTPL.




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

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 flow characteristics fail the SPPI criterion or are not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell.

d. Derecognition of financial assets

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

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

• The Fund has transferred its contractual rights to receive cash flows from the financial asset; or

• It retains the rights to the cash flows but has assumed an obligation to pay the received cash flows 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 flows of a financial asset (the ‘original asset’), but assumes a contractual obligation to pay those cash flows 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 flows it collects on behalf of the eventual recipients without material delay. In addition, the Fund is not entitled to reinvest such cash flows, 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.



d. Derecognition of financial assets (contd.)

A transfer only qualifies 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 reflects 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.

e. Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis and to realise the assets and settle the liabilities simultaneously.

f. Impairment of financial assets

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

The Fund measures its receivables impairment using the forward-looking ECL approach in accordance with the requirements of MFRS 9.

ii. Write-offs

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 first 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 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.

h. Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents include cash at bank and short term deposits with licensed financial institutions with maturities of three months or less, which have an insignificant risk of changes in value.

i. Income tax

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

As no temporary differences have been identified, 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. 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.

l. 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.



m. Distributions

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.

n. 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 year.

4. FINANCIAL ASSETS AT FVTPL

2021 2020 RM RM

Financial assets held for trading, at FVTPL:Listed equity securities 77,175,790 60,178,151 Listed collective investment scheme 523,698 1,770,624 Unlisted warrants 105,000 -Listed warrants - 229

77,804,488 61,949,004

Net gain on financial assets at FVTPL comprised:Realised gain on disposals 7,874,748 1,757,191 Unrealised changes in fair values 14,718,431 4,159,754

22,593,179 5,916,945


4. FINANCIAL ASSETS AT FVTPL (CONTD.)

Details of financial assets at FVTPL as at 28 February 2021:

Quantity Aggregate

cost Fair value Percentage

of NAV RM RM %

Listed equity securities

TechnologyFrontken Corporation

Berhad 875,100 1,158,498 4,559,271 5.4 Globetronics Technology

Berhad 628,733 1,393,111 1,791,889 2.1 Greatech Technology

Berhad 1,089,800 1,494,983 6,647,780 7.9 Inari Amertron Berhad 600,700 1,545,891 2,162,520 2.6 My E.G. Services Berhad 594,700 1,118,134 1,260,764 1.5 Pentamaster Corporation

Berhad 532,900 1,218,659 3,351,941 4.0 Unisem (M) Berhad 431,700 2,410,882 3,842,130 4.5 UWC Berhad 818,200 2,230,705 5,277,390 6.3 VSTECS Berhad 256,900 725,865 711,613 0.8

13,296,728 29,605,298 35.1

Industrial Products and Services

ATA IMS Berhad 752,000 1,727,565 2,090,560 2.5 Cahya Mata Sarawak

Berhad 417,200 833,092 967,904 1.1 Dufu Technology Corp.

Berhad 922,064 1,369,853 3,734,359 4.4 Kelington Group Berhad 1,108,900 1,389,031 2,617,004 3.1 Muda Holdings Berhad 74,900 245,481 266,644 0.3 PESTECH International

Berhad 373,600 435,319 440,848 0.5 Samaiden Group Berhad 466,200 858,985 801,864 1.0 SKP Resources Berhad 246,700 368,977 562,476 0.7 Solarvest Holdings Berhad 500,000 1,045,228 1,170,000 1.4 Sunway Berhad 2,340,255 3,646,323 3,510,383 4.2 Thong Guan Industries

Berhad 696,400 2,064,929 1,539,044 1.8 13,984,783 17,701,086 21.0



Details of financial assets at FVTPL as at 28 February 2021: (contd.)

Quantity Aggregate


of NAV RM RM %

Listed equity securities (contd.)

Financial Services Allianz Malaysia Berhad 31,400 464,751 432,692 0.5 Hong Leong Bank Berhad 139,100 2,211,015 2,503,800 3.0 Kenanga Investment Bank

Berhad 475,000 878,750 840,750 1.0 RHB Bank Berhad 520,300 2,780,405 2,820,026 3.3

6,334,921 6,597,268 7.8

ConstructionEconpile Holdings Berhad 1,340,700 690,461 576,501 0.7 Gabungan AQRS Berhad 1,625,596 2,108,883 991,614 1.2 Gamuda Berhad 231,500 754,990 770,895 0.9 Kerjaya Prospek Group

Berhad 1,170,105 1,756,233 1,298,816 1.5 MGB Berhad 1,901,600 2,190,361 1,673,408 2.0

7,500,928 5,311,234 6.3

Health CareHartalega Holdings

Berhad 168,100 2,110,114 1,681,000 2.0 Kossan Rubber Industries

Berhad 127,400 328,421 503,230 0.6 Supermax Corporation

Berhad 208,840 1,081,285 1,010,786 1.2 Top Glove Corporation

Bhd 345,100 1,338,852 1,808,324 2.1 4,858,672 5,003,340 5.9

EnergyDayang Enterprise

Holdings Berhad 472,400 691,795 713,324 0.8 Dialog Group Berhad 574,300 1,966,589 1,854,989 2.2 KNM Group Berhad 2,356,900 412,457 471,380 0.6 Yinson Holdings Berhad 270,000 1,108,340 1,436,400 1.7

4,179,181 4,476,093 5.3




Quantity Aggregate


of NAV RM RM %

Listed equity securities (contd.)

UtilitiesTaliworks Corporation

Berhad 1,612,000 1,496,905 1,329,900 1.6 Tenaga Nasional Berhad 203,000 2,592,954 2,050,300 2.4

4,089,859 3,380,200 4.0

Consumer Products and Services

DRB-HICOM Berhad 653,700 1,461,257 1,189,734 1.4 Genting Malaysia Berhad 623,200 1,665,239 1,801,048 2.2

3,126,496 2,990,782 3.6

Telecommunications and Media

Axiata Group Berhad 386,648 1,594,159 1,372,600 1.6

PropertyLBS Bina Group Berhad 751,702 673,523 308,198 0.4 Paramount Corporation

Berhad 517,700 679,359 429,691 0.5 1,352,882 737,889 0.9

Total listed equity securities 60,318,609 77,175,790 91.5

Listed collective investment scheme

Real Estate Investment Trust

Axis Real Estate Investment Trust 286,174 531,767 523,698 0.6

Total listed collective investment scheme 531,767 523,698 0.6




Quantity Aggregate


of NAV RM RM %

Unlisted warrants

Solarvest Holdings Berhad - WA* 125,000 - 105,000 0.1

Total unlisted warrants - 105,000 0.1

Total financial assets at FVTPL 60,850,376 77,804,488 92.2

Unrealised gain on financial assets at FVTPL 16,954,112

* Corporate action entitlement, pending listing at reporting date and it was subsequently listed on 8 March 2021.

5. MANAGER’S FEE

The Manager’s fee is calculated on a daily basis at a rate not exceeding 2.00% 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 (2020: 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 of the NAV of the Fund (2020: 0.05% per annum).


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 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 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:

2021 2020RM RM

Net income before tax 22,865,633 5,962,664

Tax at Malaysian statutory tax rate of 24% (2020: 24%) 5,487,752 1,431,039 Tax effect of:

Income not subject to tax (5,868,312) (1,814,223)Expenses not deductible for tax purposes 115,299 126,844 Restriction on tax deductible expenses for unit trust fund 265,261 256,340

Income tax for the financial year - -

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

2021 2020RM RM

Dividend receivable 30,359 10,144 Interest receivable from short term deposits 591 644

30,950 10,788


11. OTHER PAYABLES

2021 2020RM RM

Accrual for auditors’ remuneration 13,000 13,000 Accrual for tax agent’s fees 8,500 4,500 Provision for printing and other expenses 28,890 21,300 50,390 38,800

12. NET ASSET VALUE ATTRIBUTABLE TO UNIT HOLDERS

NAV attributable to unit holders is represented by:

Note 2021 2020RM RM

Unit holders’ contribution (a) 42,816,115 47,838,107

Retained earnings:Realised reserves 24,591,005 16,443,803 Unrealised reserves 16,954,112 2,235,681

41,545,117 18,679,484

84,361,232 66,517,591

(a) Unit holders’ contribution

2021 2020No. of units RM No. of units RM

At beginning of the financial year 175,364,933 47,838,107 188,033,116 52,640,312

Add: Creation of units 4,536,011 1,887,018 16,752,158 6,257,853

Less: Cancellation of units (16,605,882) (6,764,719) (29,420,341) (10,972,250)

Distribution equalisation - (144,290) - (87,808)

At end of the financial year 163,295,062 42,816,115 175,364,933 47,838,107

The number of units legally or beneficially held by the Manager, Kenanga Investors Berhad and parties related to the Manager as at 28 February 2021 were nil (2020: nil).


13. NET ASSET VALUE PER UNIT

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. In the previous financial year, financial assets at FVTPL have been valued at the bid prices at the close of business.

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:

2021 2020

RM RM/Unit RM RM/Unit

NAV attributable to unit holders for creation/cancellation of units 84,361,232 0.5166 67,056,127 0.3824

Effects of adopting bid prices as fair value - - (538,536) (0.0031)

NAV attributable to unit holders per statement of financial position 84,361,232 0.5166 66,517,591 0.3793

14. PORTFOLIO TURNOVER RATIO (“PTR”) PTR for the financial year is 0.69 times (2020: 0.82 times).

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

15. MANAGEMENT EXPENSE RATIO (“MER”)

MER for the financial year is 1.63% per annum (2020: 1.64% per annum).

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

Percentage of total

Brokerage, stamp duty

and clearing fee

Percentage of total

RM % RM %

Maybank Investment Bank Berhad 20,647,942 20.9 59,645 22.0

Hong Leong Investment Bank Berhad 19,366,666 19.6 53,045 19.6

RHB Investment Bank Berhad 12,176,460 12.4 33,472 12.4

Kenanga Investment Bank Berhad* 10,296,349 10.4 25,825 9.5

UOB Kay Hian Securities (M) Sdn Bhd 10,246,213 10.4 27,243 10.1

CIMB Investment Bank Berhad 10,064,031 10.2 28,175 10.4

Public Investment Bank Berhad 6,176,747 6.3 16,366 6.1

Affin Hwang Investment Bank Berhad 4,976,012 5.0 13,659 5.0

KAF-Seagroatt & Campbell Securities Sdn Bhd 2,152,184 2.2 6,128 2.3

Alliance Investment Bank Berhad 1,550,790 1.6 4,163 1.5

Others 976,008 1.0 2,928 1.1 98,629,402 100.0 270,649 100.0

* 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 scheme 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 the Fund’s NAV in equity and equity related securities. The following table provides an analysis of the Fund’s revenue, results, assets and liabilities by business segments:

Listed investment

securities

Unlistedinvestment

securitiesOther

investments TotalRM RM RM RM

2021RevenueSegment income 24,263,527 - 187,774 Segment expenses (424,363) - -Net segment income

representing segment results 23,839,164 - 187,774 24,026,938

Unallocated expenditures (1,161,305)

Income before tax 22,865,633 Income tax -Net income after tax 22,865,633

AssetsFinancial assets at

FVTPL 77,699,488 105,000 -Short term deposits - - 6,348,000 Other segment

assets 992,875 - 591 Total segment

assets 78,797,363 - 6,348,591 85,145,954 Unallocated assets 14,332

85,160,286

LiabilitiesSegment liabilities 691,339 - - 691,339 Unallocated

liabilities 107,715 799,054


17. SEGMENTAL REPORTING (CONTD.)

a. Business segments (contd.)

Listed investment

securitiesOther

investments TotalRM RM RM

2020RevenueSegment income 7,304,841 254,423 Segment expenses (471,261) -Net segment income representing

segment results 6,833,580 254,423 7,088,003 Unallocated expenditures (1,125,339)Income before tax 5,962,664 Income tax -Net income after tax 5,962,664

AssetsFinancial assets at FVTPL 61,949,004 -Short term deposits - 4,462,000 Other segment assets 239,703 644 Total segment assets 62,188,707 4,462,644 66,651,351 Unallocated assets 12,302

66,663,653

LiabilitiesUnallocated liabilities 146,062

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

Financial assets at

amortised cost

Other financial liabilities Total

RM RM RM RM

2021AssetsListed equity securities 77,175,790 - - 77,175,790 Listed collective

investment scheme 523,698 - - 523,698Unlisted warrants 105,000 - - 105,000 Short term deposits - 6,348,000 - 6,348,000 Amount due from licensed

financial institutions - 962,516 - 962,516 Other receivables - 30,950 - 30,950 Cash at bank - 14,332 - 14,332

77,804,488 7,355,798 - 85,160,286

LiabilitiesAmount due to Manager - - 54,281 54,281 Amount due to Trustee - - 3,044 3,044Amount due to licensed

financial institutions - - 691,339 691,339 - - 748,664 748,664


18. FINANCIAL INSTRUMENTS (CONTD.)

a. Classification of financial instruments (contd.)

Financial assets at

FVTPL

Financial assets at

amortised cost

Other financial liabilities Total

RM RM RM RM

2020AssetsListed equity securities 60,178,151 - - 60,178,151 Listed collective

investment scheme 1,770,624 - - 1,770,624Listed warrants 229 - - 229Short term deposits - 4,462,000 - 4,462,000 Amount due from licensed

financial institutions - 229,559 - 229,559 Other receivables - 10,788 - 10,788 Cash at bank - 12,302 - 12,302

61,949,004 4,714,649 - 66,663,653

LiabilitiesAmount due to Manager - - 104,595 104,595 Amount due to Trustee - - 2,667 2,667

- - 107,262 107,262

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:2021Listed equity securities 77,175,790 - - 77,175,790 Listed collective

investment scheme 523,698 523,698 Unlisted warrants - 105,000 - 105,000


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:2020Listed equity securities 60,178,151 - - 60,178,151 Listed collective

investment scheme 1,770,624 1,770,624 Listed warrants 229 - - 229

Level 1: Listed prices in active market Level 2: Model with all significant inputs which are observable market data Level 3: Model with inputs not based on observable market data The fair values of listed equity securities and listed collective investment scheme

and are determined by reference to Bursa Malaysia Securities Berhad’s last prices at reporting date. The fair value of the unlisted warrants is determined using calculated price derived from significant inputs which are observable market data.

In the previous financial year, the fair values of listed equity securities, listed collective investment scheme and listed warrants were 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 years.


20. SIGNIFICANT EVENT

The COVID-19 pandemic has significantly disrupted many business operations around the world. For the Fund, the impact on business operations has not been a direct consequence of the COVID-19 outbreak, but a result of the measures taken by the Government of Malaysia to contain it. As the outbreak continues to evolve, it is challenging to predict the full extent and duration of its impact on business and the economy.

While the Fund is not able to fully ascertain on the financial impact of the COVID-19 outbreak at the date of this report, it is anticipated based on initial assessments performed, that there have not been any circumstances that would require adjustments to be made to the carrying values of the assets and liabilities of the Fund as at 28 February 2021. The Fund holds sufficient capital and will continue to prudently manage risks while implementing cost reduction measures in order to ensure that it remains resilient through this period of uncertainty.

21. SUBSEQUENT EVENT

On 9 April 2021, the Fund has declared an income distribution amounting to RM10,438,379 to its unit holders and the gross/net distribution per unit was RM0.0635.

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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 · 2020. 11. 1. · ii kenanga premier fund interim report corporate directory...

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