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Aberdeen Islamic Malaysia Equity FundInterim Report31 December 2017

1

INTERIM REPORT ABERDEEN ISLAMIC MALAYSIA EQUITY FUND

1

TABLE OF CONTENTS FUND INFORMATION 2 FUND PERFORMANCE DATA 3 - 4 MANAGER’S REPORT 5 - 7 UNAUDITED INTERIM STATEMENT OF COMPREHENSIVE INCOME 8 UNAUDITED INTERIM STATEMENT OF FINANCIAL POSITION 9 UNAUDITED INTERIM STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

10

UNAUDITED INTERIM STATEMENT OF CASH FLOWS 11 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 12 - 18 NOTES TO THE FINANCIAL STATEMENTS 19 – 32 STATEMENT BY THE MANAGER 33 TRUSTEE’S REPORT 34 SHARIAH ADVISER’S REPORT 35 DISTRIBUTORS 36

2


2

FUND INFORMATION Name of Fund

Aberdeen Islamic Malaysia Equity Fund

Fund Category / Type

Equity (Islamic) / Growth

Fund Objective

The Fund seeks to achieve capital appreciation in the long term through investments in Shariah-compliant equities and equity-related securities.

Fund Benchmark

FTSE Bursa Malaysia EMAS Shariah Index

Fund Income Distribution Policy

As the investment objective of the Fund is to provide capital appreciation, distribution of income, if any, is incidental.

Breakdown of Unitholdings by Size

As at 31 December 2017, the size of the Fund stood at 5.343 million units.

BREAKDOWN OF UNITHOLDINGS BY SIZE – CLASS A

Size of Holdings (Units)

No. of Unitholders

No. of Units Held (‘000)

5,000 and below 0 0 5,001 to 10,000 0 0 10,001 to 50,000 2 35 50,001 to 500,000 4 808 500,001 and above 0 0

Total 6 843

BREAKDOWN OF UNITHOLDINGS BY SIZE – CLASS I


No. of Unitholders


5,000 and below 0 0 5,001 to 10,000 0 0 10,001 to 50,000 0 0 50,001 to 500,000 0 0 500,001 and above 1 4,500

Total 1 4,500

3


1

TABLE OF CONTENTS FUND INFORMATION 2 FUND PERFORMANCE DATA 3 - 4 MANAGER’S REPORT 5 - 7 UNAUDITED INTERIM STATEMENT OF COMPREHENSIVE INCOME 8 UNAUDITED INTERIM STATEMENT OF FINANCIAL POSITION 9 UNAUDITED INTERIM STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

10

UNAUDITED INTERIM STATEMENT OF CASH FLOWS 11 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 12 - 18 NOTES TO THE FINANCIAL STATEMENTS 19 – 32 STATEMENT BY THE MANAGER 33 TRUSTEE’S REPORT 34 SHARIAH ADVISER’S REPORT 35 DISTRIBUTORS 36


3

FUND PERFORMANCE DATA FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2017

Sector Allocation

31.12.2017 %

31.12.2016 %

31.12.2015 %

Shariah-Compliant Equities Basic Materials 8.3 8.5 7.6 Consumer Goods 30.0 30.0 26.1 Consumer Services 7.0 11.3 10.2 Financials 8.7 9.5 10.7 Healthcare 1.0 0.0 0.0 Industrials 18.8 18.8 20.9 Oil & Gas 4.9 4.0 2.6 Technology 1.2 0.0 0.0 Telecommunications 11.1 16.3 19.3 Utilities Cash

2.6

6.4

2.4

-0.8*

0.5

2.1

Total 100.0 100.0 100.0

*Negative cash due to high redemption on the last day of the month.

As at 31.12.2017 As at 31.12.2016 As at 31.12.2015

Class A Class I Class A Class I Class A Class I

Total Net Asset Value (NAV) (RM million) 1.0800 5.7640 1.3250 5.3560 2.7170 5.3350 NAV per Unit (RM) 1.2809 1.2809 1.1903 1.1903 1.1854 1.1854 Units in Circulation (million) 0.8430 4.5000 1.1130 4.5000 2.2920 4.5000 Highest NAV per Unit (RM) 1.2827 1.2827 1.2701 1.2701 1.2276 1.2276

Lowest NAV per Unit (RM) 1.2301 1.2301 1.1812 1.1812 1.1338 1.1338

Total Return (%) 1.8689 1.8689 0.4473 0.4473 (1.8140) (1.8140) - Capital Return (%) 1.8689 1.8689 0.4473 0.4473 (1.8140) (1.8140) - Income Return (%) - - - - - - Gross Distribution per Unit (sen) - - - - - - Net Distribution per Unit (sen) - - - - - - Management Expense Ratio (MER) (%) 0.00 0.00 0.00

Portfolio Turnover Ratio (PTR) (times) 0.09 0.05 0.04 Source: Deutsche Bank (Malaysia) Berhad

Average Total Return 6 months 01.07.2017 to

31.12.2017 (%)

1 year 31.12.2016 to

31.12.2017 (%)

3 years (annualised)

31.12.2014 to 31.12.2017 (%)

Since inception (annualised)

06.02.2013 to 31.12.2017 (%)

Fund 1.87 7.61 2.74 5.12

Source: Lipper for Investment Management as at 31 December 2017

Annual Total Return 1 year 31.12.2016 to

31.12.2017 (%)

1 year 31.12.2015 to

31.12.2016 (%)

1 year 31.12.2014 to

31.12.2015 (%)

1 year 31.12.2013 to

31.12.2014 (%)

Fund

7.61

0.41

0.36

4.17


4


2

FUND INFORMATION Name of Fund

Aberdeen Islamic Malaysia Equity Fund

Fund Category / Type

Equity (Islamic) / Growth

Fund Objective

The Fund seeks to achieve capital appreciation in the long term through investments in Shariah-compliant equities and equity-related securities.

Fund Benchmark

FTSE Bursa Malaysia EMAS Shariah Index

Fund Income Distribution Policy

As the investment objective of the Fund is to provide capital appreciation, distribution of income, if any, is incidental.

Breakdown of Unitholdings by Size

As at 31 December 2017, the size of the Fund stood at 5.343 million units.

BREAKDOWN OF UNITHOLDINGS BY SIZE – CLASS A


No. of Unitholders


5,000 and below 0 0 5,001 to 10,000 0 0 10,001 to 50,000 2 35 50,001 to 500,000 4 808 500,001 and above 0 0

Total 6 843

BREAKDOWN OF UNITHOLDINGS BY SIZE – CLASS I


No. of Unitholders


5,000 and below 0 0 5,001 to 10,000 0 0 10,001 to 50,000 0 0 50,001 to 500,000 0 0 500,001 and above 1 4,500

Total 1 4,500


4

FUND PERFORMANCE DATA (CONTINUED) FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2017

Bases of calculation and assumptions made in calculating the returns: The performance figures are a comparison of the growth/decline in NAV for the stipulated period, taking into account all the distributions payable (if any) during the stipulated period. An illustration of the above would be as follows: Capital Return = NAV per Unit End / NAV per Unit Begin – 1 Income Return = Income Distribution per Unit / NAV per Unit Ex-Distribution Total Return = Capital Return x Income Return – 1 Class A Capital Return = {NAV per Unit @ 31.12.2017 ÷ NAV per Unit @ 30.06.2017 – 1} x 100 = {1.2809 ÷ 1.2574 – 1} x 100 = 1.8689% Income Return = {Income Distribution per Unit ÷ NAV per Unit Ex-Distribution} x 100 = Nil Total Return = [{(1+ Capital Return) x (1+ Income Return)} – 1] x 100 = [{(1 + 1.8689%) x (1 + 0%)} – 1] x 100 = 1.8689% Class I Capital Return = {NAV per Unit @ 31.12.2017 ÷ NAV per Unit @ 30.06.2017 – 1} x 100 = {1.2809 ÷ 1.2574 – 1} x 100 = 1.8689% Income Return = {Income Distribution per Unit ÷ NAV per Unit Ex-Distribution} x 100 = Nil Total Return = [{(1+ Capital Return) x (1+ Income Return)} – 1] x 100 = [{(1 + 1.8689%) x (1 + 0%)} – 1] x 100 = 1.8689% Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up.


5

MANAGER’S REPORT

Fund Performance

The Aberdeen Islamic Malaysia Equity Fund rose by 1.87% in ringgit terms over the period, compared with the benchmark’s total return of 5.29%. Given the performance during the period under review, we believe the Fund’s objective is being met to provide investors with capital appreciation through long term investments in Shariah-compliant equities

Income Return

%

Capital Return

%

Total Return of Fund

%

Total Return of Benchmark

%

0.00 1.87 1.87 5.29

FUND RETURN (SINCE INCEPTION) VS BENCHMARK

Benchmark: FTSE Bursa Malaysia EMAS Shariah Index Source: Lipper for Investment Management as at 31 December 2017 Note: This information is prepared by Aberdeen Islamic Asset Management Sdn Bhd for information purposes only. Past performance of the Fund is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up.

Analysis of Fund Performance

At the stock level, Aeon as well as DKSH were hampered by consumer sentiment, which remained weak despite the strong headline macro numbers. Nonetheless, we have a positive long-term view about consumer companies, given their relatively conservative balance sheets, steady cash-flow generation and attractive yields. Not holding Press Metal proved costly as its shares surged because of potentially higher aluminium prices. Conversely, Nestle Malaysia buoyed the fund, because of improvements in operational efficiency and lower costs. The underweight to Sime Darby proved beneficial as the conglomerate suffered from profit-taking, after it spun off its plantation and property businesses. Not holding Sapura Energy, formerly known as Sapurakencana Petroleum helped the fund too. Its shares plunged after its reported lacklustre quarterly results.

5


3

FUND PERFORMANCE DATA FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2017

Sector Allocation

31.12.2017 %

31.12.2016 %

31.12.2015 %

Shariah-Compliant Equities Basic Materials 8.3 8.5 7.6 Consumer Goods 30.0 30.0 26.1 Consumer Services 7.0 11.3 10.2 Financials 8.7 9.5 10.7 Healthcare 1.0 0.0 0.0 Industrials 18.8 18.8 20.9 Oil & Gas 4.9 4.0 2.6 Technology 1.2 0.0 0.0 Telecommunications 11.1 16.3 19.3 Utilities Cash

2.6

6.4

2.4

-0.8*

0.5

2.1

Total 100.0 100.0 100.0


As at 31.12.2017 As at 31.12.2016 As at 31.12.2015

Class A Class I Class A Class I Class A Class I

Total Net Asset Value (NAV) (RM million) 1.0800 5.7640 1.3250 5.3560 2.7170 5.3350 NAV per Unit (RM) 1.2809 1.2809 1.1903 1.1903 1.1854 1.1854 Units in Circulation (million) 0.8430 4.5000 1.1130 4.5000 2.2920 4.5000 Highest NAV per Unit (RM) 1.2827 1.2827 1.2701 1.2701 1.2276 1.2276

Lowest NAV per Unit (RM) 1.2301 1.2301 1.1812 1.1812 1.1338 1.1338

Total Return (%) 1.8689 1.8689 0.4473 0.4473 (1.8140) (1.8140) - Capital Return (%) 1.8689 1.8689 0.4473 0.4473 (1.8140) (1.8140) - Income Return (%) - - - - - - Gross Distribution per Unit (sen) - - - - - - Net Distribution per Unit (sen) - - - - - - Management Expense Ratio (MER) (%) 0.00 0.00 0.00

Portfolio Turnover Ratio (PTR) (times) 0.09 0.05 0.04 Source: Deutsche Bank (Malaysia) Berhad

Average Total Return 6 months 01.07.2017 to

31.12.2017 (%)

1 year 31.12.2016 to

31.12.2017 (%)

3 years (annualised)

31.12.2014 to 31.12.2017 (%)

Since inception (annualised)

06.02.2013 to 31.12.2017 (%)

Fund 1.87 7.61 2.74 5.12


Annual Total Return 1 year 31.12.2016 to

31.12.2017 (%)

1 year 31.12.2015 to

31.12.2016 (%)

1 year 31.12.2014 to

31.12.2015 (%)

1 year 31.12.2013 to

31.12.2014 (%)

Fund

7.61

0.41

0.36

4.17


Feb 13 May 13 Aug 13 Nov 13 Feb 14 May 14 Aug 14 Nov 14 Feb 15 May 15 Aug 15 Nov 15 Feb 16 May 16 Aug 16 Nov 160

15

20

25

30

35

40

45

Aberdeen Islamic Malaysia Equity Fund FTSE Bursa Malaysia EMAS Shariah Index

Feb 17 May 17 Aug 17 Nov 17

5

10

Perc

etag

e G

row

th (%

)



6

MANAGER’S REPORT (CONTINUED) Analysis of Fund Performance (continued)

In addition, we also introduced Gamuda, given its management quality, growth prospects, and attractive valuation; MyNews Holdings, a well-managed and growing convenience retail chain; and CCM Duopharma, a domestic pharmaceutical company with good growth potential. We also participated in SP Setia’s rights issue. On the flipside, we exited Ajinomoto Malaysia given its lofty valuations.

31.12.2017

% 30.06.2017

% Changes

% NAV (RM Million) 6.8 7.0 -2.9 NAV/ Unit (RM) 1.2574 1.1903 5.6

The Fund’s NAV fell by 2.9% to RM6.8 million as at 31 December 2017. Likewise, the NAV per unit rose by 5.6% during the financial period.

Market Review

Malaysian equities extended their gains over the six months under review, with index heavyweights underpinned by solid buying demand. Bank Negara maintained its key rate, which bolstered sentiment. Optimism about the country’s near-term prospects grew on upbeat economic data, with services and manufacturing sectors expanding significantly. Exports of electronics were also boosted by the worldwide demand for semiconductors. Trade flows grew and strengthened the ringgit. This helped consumption, as did an increase in wages and stabilising unemployment, which mitigated costlier food and non-alcoholic beverages. Sentiment was also lifted by stimulus ahead of general elections, such as the tabling of a populist budget focused on promoting major infrastructure projects and supporting domestic consumption, and the abolishment of tolls in states such as Selangor, Johor Bahru and Kedah. Elsewhere, the OPEC-led agreement to reduce global supply buoyed oil prices rose and underpinned growth in commodity and energy businesses.

Market Outlook

Malaysian equities are likely to maintain their upward trajectory, in line with global markets. Synchronised global economic growth should underpin exporters in sectors such as manufacturing and commodities. In particular, oil prices may find further support in a decrease in oil supply. Domestically, government spending on infrastructure as well as other programmes ahead of the elections could provide a further boost and lift consumption. However, recent inflows of foreign funds into equities, bonds and other direct investments have resulted in a stronger ringgit, which may pose a risk to exporters. Sentiment could also be dented by monetary policy tightening in major economies or an unexpected election outcome at home. All things considered, we continue to see good prospects for the companies that we hold, which are selected through our bottom-up analysis of company fundamentals. These businesses are led by capable management, have robust operations, and could see intrinsic earnings growing. To navigate the fast-changing markets, we will continue to monitor our investments diligently, while maintaining a long-term investment outlook.

Investment Strategy

The global economy is likely to face continued volatility ahead, given US President Donald Trump’s policy unpredictability, volatile oil prices and further geopolitical uncertainty. At home, the economy also faces challenges with ringgit weakness causing inflationary pressures that could dampen consumption, and sap investor confidence. However, our strategy is to remain disciplined, sticking to our buy-and-hold approach where we cherry-pick companies with robust business models and defensible industry leadership positions, investing for the long haul. Our portfolio remains fundamentally solid with our companies well-positioned in their respective sectors, being prudent and taking care to avoid overstretching their balance sheets given the current economic environment. We remain focused on quality and value, trimming positions when we think valuations are high, and adding to positions when we think valuations are attractive. Also, we will exit a position when we think that a company’s management has lost focus or when the long-term prospects have changed irreversibly, as we have done in the past.

6


4

FUND PERFORMANCE DATA (CONTINUED) FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2017

Bases of calculation and assumptions made in calculating the returns: The performance figures are a comparison of the growth/decline in NAV for the stipulated period, taking into account all the distributions payable (if any) during the stipulated period. An illustration of the above would be as follows: Capital Return = NAV per Unit End / NAV per Unit Begin – 1 Income Return = Income Distribution per Unit / NAV per Unit Ex-Distribution Total Return = Capital Return x Income Return – 1 Class A Capital Return = {NAV per Unit @ 31.12.2017 ÷ NAV per Unit @ 30.06.2017 – 1} x 100 = {1.2809 ÷ 1.2574 – 1} x 100 = 1.8689% Income Return = {Income Distribution per Unit ÷ NAV per Unit Ex-Distribution} x 100 = Nil Total Return = [{(1+ Capital Return) x (1+ Income Return)} – 1] x 100 = [{(1 + 1.8689%) x (1 + 0%)} – 1] x 100 = 1.8689% Class I Capital Return = {NAV per Unit @ 31.12.2017 ÷ NAV per Unit @ 30.06.2017 – 1} x 100 = {1.2809 ÷ 1.2574 – 1} x 100 = 1.8689% Income Return = {Income Distribution per Unit ÷ NAV per Unit Ex-Distribution} x 100 = Nil Total Return = [{(1+ Capital Return) x (1+ Income Return)} – 1] x 100 = [{(1 + 1.8689%) x (1 + 0%)} – 1] x 100 = 1.8689% Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up.


5

MANAGER’S REPORT

Fund Performance

The Aberdeen Islamic Malaysia Equity Fund rose by 1.87% in ringgit terms over the period, compared with the benchmark’s total return of 5.29%. Given the performance during the period under review, we believe the Fund’s objective is being met to provide investors with capital appreciation through long term investments in Shariah-compliant equities

Income Return

%

Capital Return

%

Total Return of Fund

%

Total Return of Benchmark

%

0.00 1.87 1.87 5.29


Benchmark: FTSE Bursa Malaysia EMAS Shariah Index Source: Lipper for Investment Management as at 31 December 2017 Note: This information is prepared by Aberdeen Islamic Asset Management Sdn Bhd for information purposes only. Past performance of the Fund is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up.

Analysis of Fund Performance

At the stock level, Aeon as well as DKSH were hampered by consumer sentiment, which remained weak despite the strong headline macro numbers. Nonetheless, we have a positive long-term view about consumer companies, given their relatively conservative balance sheets, steady cash-flow generation and attractive yields. Not holding Press Metal proved costly as its shares surged because of potentially higher aluminium prices. Conversely, Nestle Malaysia buoyed the fund, because of improvements in operational efficiency and lower costs. The underweight to Sime Darby proved beneficial as the conglomerate suffered from profit-taking, after it spun off its plantation and property businesses. Not holding Sapura Energy, formerly known as Sapurakencana Petroleum helped the fund too. Its shares plunged after its reported lacklustre quarterly results.

7


7

MANAGER’S REPORT (CONTINUED) Asset Allocation

31.12.2017

% 31.12.2016

% 31.12.2015

% Shariah-Compliant Equities 93.6 100.8 97.9 Cash 6.4 -0.8* 2.1

Total 100.0 100.0 100.0


Distribution / Unit Split

No distribution or unit split was declared for the financial period ended 31 December 2017.

State of Affairs of the Fund

There has been no significant change to the state of affairs of the Fund, nor any circumstances that materially affected any interests of the unitholders during the period under review.

Soft Commissions

Soft commissions received from brokers or dealers are retained by the management company only if the goods and services provided are of demonstrable benefit to unitholders of the Fund as per requirements of Clause 11.33 and 11.34 of the Guidelines on Unit Trust Funds. During the period under review, the Manager and its delegates (if any) did not receive any soft commissions from stockbrokers or dealers.


6

MANAGER’S REPORT (CONTINUED) Analysis of Fund Performance (continued)

In addition, we also introduced Gamuda, given its management quality, growth prospects, and attractive valuation; MyNews Holdings, a well-managed and growing convenience retail chain; and CCM Duopharma, a domestic pharmaceutical company with good growth potential. We also participated in SP Setia’s rights issue. On the flipside, we exited Ajinomoto Malaysia given its lofty valuations.

31.12.2017

% 30.06.2017

% Changes

% NAV (RM Million) 6.8 7.0 -2.9 NAV/ Unit (RM) 1.2574 1.1903 5.6

The Fund’s NAV fell by 2.9% to RM6.8 million as at 31 December 2017. Likewise, the NAV per unit rose by 5.6% during the financial period.

Market Review

Malaysian equities extended their gains over the six months under review, with index heavyweights underpinned by solid buying demand. Bank Negara maintained its key rate, which bolstered sentiment. Optimism about the country’s near-term prospects grew on upbeat economic data, with services and manufacturing sectors expanding significantly. Exports of electronics were also boosted by the worldwide demand for semiconductors. Trade flows grew and strengthened the ringgit. This helped consumption, as did an increase in wages and stabilising unemployment, which mitigated costlier food and non-alcoholic beverages. Sentiment was also lifted by stimulus ahead of general elections, such as the tabling of a populist budget focused on promoting major infrastructure projects and supporting domestic consumption, and the abolishment of tolls in states such as Selangor, Johor Bahru and Kedah. Elsewhere, the OPEC-led agreement to reduce global supply buoyed oil prices rose and underpinned growth in commodity and energy businesses.

Market Outlook

Malaysian equities are likely to maintain their upward trajectory, in line with global markets. Synchronised global economic growth should underpin exporters in sectors such as manufacturing and commodities. In particular, oil prices may find further support in a decrease in oil supply. Domestically, government spending on infrastructure as well as other programmes ahead of the elections could provide a further boost and lift consumption. However, recent inflows of foreign funds into equities, bonds and other direct investments have resulted in a stronger ringgit, which may pose a risk to exporters. Sentiment could also be dented by monetary policy tightening in major economies or an unexpected election outcome at home. All things considered, we continue to see good prospects for the companies that we hold, which are selected through our bottom-up analysis of company fundamentals. These businesses are led by capable management, have robust operations, and could see intrinsic earnings growing. To navigate the fast-changing markets, we will continue to monitor our investments diligently, while maintaining a long-term investment outlook.

Investment Strategy

The global economy is likely to face continued volatility ahead, given US President Donald Trump’s policy unpredictability, volatile oil prices and further geopolitical uncertainty. At home, the economy also faces challenges with ringgit weakness causing inflationary pressures that could dampen consumption, and sap investor confidence. However, our strategy is to remain disciplined, sticking to our buy-and-hold approach where we cherry-pick companies with robust business models and defensible industry leadership positions, investing for the long haul. Our portfolio remains fundamentally solid with our companies well-positioned in their respective sectors, being prudent and taking care to avoid overstretching their balance sheets given the current economic environment. We remain focused on quality and value, trimming positions when we think valuations are high, and adding to positions when we think valuations are attractive. Also, we will exit a position when we think that a company’s management has lost focus or when the long-term prospects have changed irreversibly, as we have done in the past.

8


8

UNAUDITED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017

Note

01.07.2017 to

31.12.2017

01.07.2016 to

31.12.2016

RM RM NET SHARIAH-COMPLIANT INVESTMENT INCOME Dividend income

99,133 82,745

Net gain/(loss) from Shariah-compliant investments:

Financial assets at fair value through profit or loss (“FVTPL”) 7 28,653 (45,118)

127,786 37,627

EXPENSES Management fee 3 - - Trustee’s fees 4 - - Audit fee 5 - - Tax agent’s fee 5 - - Transaction costs

2,947 1,836

Other expenses

47 31

2,994 1,867

NET PROFIT BEFORE TAXATION

124,792 35,760

Taxation 6 (756) (633)

INCREASE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 124,036 35,127

Net profit after taxation and total comprehensive income comprises the following: Realised amount

79,240 49,979

Unrealised amount 44,796 (14,852)

124,036 35,127

The accompanying summary of significant accounting policies and notes to the financial statements form an integral part of these financial statements.


9


7

MANAGER’S REPORT (CONTINUED) Asset Allocation

31.12.2017

% 31.12.2016

% 31.12.2015

% Shariah-Compliant Equities 93.6 100.8 97.9 Cash 6.4 -0.8* 2.1

Total 100.0 100.0 100.0


Distribution / Unit Split

No distribution or unit split was declared for the financial period ended 31 December 2017.

State of Affairs of the Fund

There has been no significant change to the state of affairs of the Fund, nor any circumstances that materially affected any interests of the unitholders during the period under review.

Soft Commissions

Soft commissions received from brokers or dealers are retained by the management company only if the goods and services provided are of demonstrable benefit to unitholders of the Fund as per requirements of Clause 11.33 and 11.34 of the Guidelines on Unit Trust Funds. During the period under review, the Manager and its delegates (if any) did not receive any soft commissions from stockbrokers or dealers.


9

UNAUDITED INTERIM STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

Note 31.12.2017 30.06.2017

RM RM

CURRENT ASSETS Financial assets at fair value through profit or loss (Shariah-compliant) 7 6,407,216 6,830,748

Dividends receivable 57 29,287 Cash and cash equivalents 8 441,059 140,554

TOTAL ASSETS 6,848,332 7,000,589

CURRENT LIABILITIES

Amount due to Manager

- Management fee 3 - - - Cancellation of units 4,017 - Amount due to Trustee 4 - - Other payables and accruals - - TOTAL LIABILITIES (EXCLUDING NET ASSETS ATTRIBUTABLE TO UNITHOLDERS)

4,017 -

NET ASSET VALUE OF THE FUND

6,844,315 7,000,589

NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

6,844,315 7,000,589

REPRESENTED BY:

FAIR VALUE OF OUTSTANDING UNITS

– CLASS A 1,080,068 1,342,111 – CLASS I 5,764,247 5,658,478

6,844,315 7,000,589

NUMBER OF UNITS IN CIRCULATION 10 – CLASS A 843,179 1,067,338 – CLASS I 4,500,000 4,500,000 NAV PER UNIT (RM) – CLASS A 1.2809 1.2574 – CLASS I 1.2809 1.2574



10


8

UNAUDITED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017

Note

01.07.2017 to

31.12.2017

01.07.2016 to

31.12.2016

RM RM NET SHARIAH-COMPLIANT INVESTMENT INCOME Dividend income

99,133 82,745

Net gain/(loss) from Shariah-compliant investments:

Financial assets at fair value through profit or loss (“FVTPL”) 7 28,653 (45,118)

127,786 37,627

EXPENSES Management fee 3 - - Trustee’s fees 4 - - Audit fee 5 - - Tax agent’s fee 5 - - Transaction costs

2,947 1,836

Other expenses

47 31

2,994 1,867

NET PROFIT BEFORE TAXATION

124,792 35,760

Taxation 6 (756) (633)

INCREASE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 124,036 35,127

Net profit after taxation and total comprehensive income comprises the following: Realised amount

79,240 49,979

Unrealised amount 44,796 (14,852)

124,036 35,127


The accompanying summary of significant accounting policies and notes to the financial statements form anintegral part of these financial statements.


10

UNAUDITED INTERIM STATEMENT OF CHANGES IN NET ASSETS ASTTRIBUTABLE TO UNITHOLDERS AS AT 31 DECEMBER 2017

01.07.2017 to

31.12.2017

01.07.2016 to

31.12.2016 RM RM

NET ASSETS ATTRIBUTABLE TO UNITHOLDERS AT THE BEGINNING OF THE FINANCIAL PERIOD 7,000,589 6,981,225 Movement due to units created and cancelled during the financial period: - Creation of units arising from applications 1,818 101,890 - Cancellation of units (282,128) (436,284) (280,310) (334,394)

Net increase in net assets attributable to unitholders during the financial period:

Net profit after taxation and total comprehensive income 124,036 35,127 NET ASSETS ATTRIBUTABLE TO UNITHOLDERS AT THE END OF THE FINANCIAL PERIOD 6,844,315 6,681,958


11


9

UNAUDITED INTERIM STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

Note 31.12.2017 30.06.2017

RM RM

CURRENT ASSETS Financial assets at fair value through profit or loss (Shariah-compliant) 7 6,407,216 6,830,748

Dividends receivable 57 29,287 Cash and cash equivalents 8 441,059 140,554

TOTAL ASSETS 6,848,332 7,000,589

CURRENT LIABILITIES

Amount due to Manager

- Management fee 3 - - - Cancellation of units 4,017 - Amount due to Trustee 4 - - Other payables and accruals - - TOTAL LIABILITIES (EXCLUDING NET ASSETS ATTRIBUTABLE TO UNITHOLDERS)

4,017 -

NET ASSET VALUE OF THE FUND

6,844,315 7,000,589

NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

6,844,315 7,000,589

REPRESENTED BY:

FAIR VALUE OF OUTSTANDING UNITS

– CLASS A 1,080,068 1,342,111 – CLASS I 5,764,247 5,658,478

6,844,315 7,000,589

NUMBER OF UNITS IN CIRCULATION 10 – CLASS A 843,179 1,067,338 – CLASS I 4,500,000 4,500,000 NAV PER UNIT (RM) – CLASS A 1.2809 1.2574 – CLASS I 1.2809 1.2574




11

UNAUDITED INTERIM STATEMENT OF CASH FLOWS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017

Note

01.07.2017

to 31.12.2017

01.07.2016

to 31.12.2016

RM RM

CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from sale of Shariah-compliant investments 790,339 1,111,431 Purchase of Shariah-compliant investments (338,154) (336,306) Dividends received 128,363 136,993 Payment for other fees and expenses (2,994) (1,867) Tax paid (756) (633)

Net cash generated from operating activities 576,798 909,618

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from creation of units 1,818 101,890

Payments for cancellation of units (278,111) (1,248,103) Net cash used in financing activities (276,293) (1,146,213)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 300,505 (236,595)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD

140,554 340,602

CASH AND CASH EQUIVALENTS AT THE END OF

THE FINANCIAL PERIOD 8 441,059 104,007

CASH AND CASH EQUIVALENT COMPRISE OF:

BANK BALANCES 8 441,059 104,007 The accompanying summary of significant accounting policies and notes to the financial statements form an integral part of these financial statements.

12


12

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The following accounting policies have been used consistently in dealing with items which are considered

material in relation to the financial statements. The financial statements have been prepared in accordance with Malaysian Financial Reporting Standards

(“MFRS”) and International Financial Reporting Standards (“IFRS”). The financial statements have been prepared under the historical cost conventions as modified by the financial

assets and financial liabilities at fair value through profit or loss (“FVTPL”). The preparation of financial statements in conformity with MFRS and IFRS requires the use of certain critical

accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported financial period. It also requires the Manager to exercise their judgment in the process of applying the Fund’s accounting policies. The Manager believes that the underlying assumptions are appropriate and the Fund’s financial statements therefore present the financial position results fairly. Although these estimates and judgment are based on the Manager’s best knowledge of current events and actions, actual results may differ.

The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are

significant to the financial statements are disclosed in Note N. Standards, amendments to published standards and interpretations to existing standards that are effective: The

fund has applied the following amendments for the first time for the financial year beginning 1 July 2016: • Amendments to MFRS 101 "Presentation of Financial Statements - Disclosure Initiative" provide

clarifications on a number of issues, including: Materiality – an entity should not aggregate or disaggregate information in a manner that obscures useful

information. Where items are material, sufficient information must be provided to explain the impact on the financial position or performance.

Disaggregation and subtotals – line items specified in MFRS 101 may need to be disaggregated where this

is relevant to an understanding of the entity’s financial position or performance. There is also new guidance on the use of subtotals.

Notes – confirmation that the notes do not need to be presented in a particular order. Other comprehensive income (“OCI”) arising from investments accounted for under the equity method –

the share of OCI arising from equity-accounted investments is grouped based on whether the items will or will not subsequently be reclassified to profit or loss. Each group should then be presented as a single line item in the statement of other comprehensive income.

According to the transitional provisions, the disclosures in MFRS 108 regarding the adoption of new

standards/accounting policies are not required for these amendments. • Annual Improvements to MFRS 2012 - 2014 Cycle

The adoption of these amendments did not have any impact on the current financial year or any prior financial year and is not likely to affect future years.


13

1 Equity instruments and derivatives refer to Shariah- compliant equity instruments and Shariah- compliant derivatives. 2 Debt instrument refers to trade and other receivables, cash and cash equivalents, financing and sukuk. 3 Interest refers to profits earned from Shariah- compliant investments.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED) The standards, amendments to published standards and interpretations to existing standards that are applicable to

the Fund but not yet effective and have not been early adopted are as follows: (i) Financial year beginning on/after 1 July 2017 Amendments to MFRS 107 ‘‘Statement of Cash Flows – Disclosure Initiative’’ (effective from 1 January

2017) introduce an additional disclosure on changes in liabilities arising from financing activities. The Fund will apply this standard when effective. This standard is not expected to have a significant impact

on the Fund’s financial statements. (ii) Financial year beginning on/after 1 July 2018 MFRS 15 “Revenue from Contracts with Customers” (effective from 1 January 2018) replaces MFRS 118

‘’Revenue’’ and MFRS 111 ‘‘Construction Contracts’’ and related interpretations. The core principle in MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Revenue is recognised when a customer obtains control of goods or services, i.e. when the customer has the ability

to direct the use of and obtain the benefits from the goods or services. A new five-step process is applied before revenue can be recognised: • Identify contracts with customers; • Identify the separate performance obligations; • Determine the transaction price of the contract; • Allocate the transaction price to each of the separate performance obligations; and • Recognise the revenue as each performance obligation is satisfied. Key provisions of the new standard are as follows: • Any bundled goods or services that are distinct must be separately recognised, and any discounts or

rebates on the contract price must generally be allocated to the separate elements. • If the consideration varies (such as for incentives, rebates, performance fees royalties, success of an

outcome etc), minimum amounts of revenue must be recognised if they are not at significant risk of reversal.

• The point at which revenue is able to be recognised may shift: some revenue which is currently recognised at a point in time at the end of a contract may have to be recognised over the contract term and vice versa.

• There are new specific rules on licenses, warranties, non-refundable upfront fees, and consignment arrangements, to name a few.

• As with any news standard, there are also increased disclosures. The fund will apply this standard when effective. This standard is not expected to have significant impact

on the Fund's financial statements. MFRS 9 “Financial Instruments” (effective from 1 January 2018) will replace MFRS 139 “Financial

Instruments: Recognition and Measurement”. MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary

measurement categories for financial assets: amortised cost, fair value through profit or loss and fair value through Other Comprehensive Income ("OCI"). The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments1 are always measured at fair value through profit or loss with an irrevocable option at inception to present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument2 is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest3.

13

14


14

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED)

A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED) (i) Financial year beginning on/after 1 July 2018 For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost

accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. MFRS 9 introduces an expected credit loss model on impairment that replaces the incurred loss impairment model used in MFRS 139. The expected credit loss model is forward-looking and eliminates the need for a trigger event to have occurred before credit losses are recognised.

The Fund will apply the above standards when effective. The standards are not expected to have a significant

impact on the Fund’s financial statements. B. INCOME RECOGNITION Profit income from Islamic deposits with licensed financial institutions is recognised based on effective profit

method on an accrual and time proportional basis. Dividend income is recognised on the ex-dividend date, when the right to receive the dividend has been established. Realised gains and losses on sale of Shariah-compliant investments are accounted for as the difference between the

net disposal proceeds and the carrying amount of Shariah-compliant investments, determined on a weighted average cost basis.

C. DISTRIBUTIONS A distribution to the Fund’s unit holders is accounted for as a deduction from realised reserve. As a result of the

reclassification of units from equity to financial liability, the Fund’s distributions are no longer classified as dividend paid in the statement of changes in net assets attributable to unit holders, but rather as finance cost in the statement of comprehensive income.

A proposed distribution is recognised as a financial liability in the year in which it is approved. D. TRANSACTION COSTS Transaction costs are costs incurred to acquire or dispose financial assets or liabilities at fair value through profit or

loss. They include fees and commissions paid to agents, advisors, brokers and dealers. Transaction costs, when incurred, are immediately recognised in the statement of comprehensive income as expenses.

E. TAXATION Current tax expense is determined according to the Malaysian tax laws at the current rate based on the taxable

profit earned during the financial period. F. FUNCTIONAL AND PRESENTATION CURRENCY Items included in 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 the Fund’s functional and presentation currency.


12

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The following accounting policies have been used consistently in dealing with items which are considered

material in relation to the financial statements. The financial statements have been prepared in accordance with Malaysian Financial Reporting Standards

(“MFRS”) and International Financial Reporting Standards (“IFRS”). The financial statements have been prepared under the historical cost conventions as modified by the financial

assets and financial liabilities at fair value through profit or loss (“FVTPL”). The preparation of financial statements in conformity with MFRS and IFRS requires the use of certain critical

accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported financial period. It also requires the Manager to exercise their judgment in the process of applying the Fund’s accounting policies. The Manager believes that the underlying assumptions are appropriate and the Fund’s financial statements therefore present the financial position results fairly. Although these estimates and judgment are based on the Manager’s best knowledge of current events and actions, actual results may differ.

The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are

significant to the financial statements are disclosed in Note N. Standards, amendments to published standards and interpretations to existing standards that are effective: The

fund has applied the following amendments for the first time for the financial year beginning 1 July 2016: • Amendments to MFRS 101 "Presentation of Financial Statements - Disclosure Initiative" provide

clarifications on a number of issues, including: Materiality – an entity should not aggregate or disaggregate information in a manner that obscures useful

information. Where items are material, sufficient information must be provided to explain the impact on the financial position or performance.

Disaggregation and subtotals – line items specified in MFRS 101 may need to be disaggregated where this

is relevant to an understanding of the entity’s financial position or performance. There is also new guidance on the use of subtotals.

Notes – confirmation that the notes do not need to be presented in a particular order. Other comprehensive income (“OCI”) arising from investments accounted for under the equity method –

the share of OCI arising from equity-accounted investments is grouped based on whether the items will or will not subsequently be reclassified to profit or loss. Each group should then be presented as a single line item in the statement of other comprehensive income.

According to the transitional provisions, the disclosures in MFRS 108 regarding the adoption of new

standards/accounting policies are not required for these amendments. • Annual Improvements to MFRS 2012 - 2014 Cycle

The adoption of these amendments did not have any impact on the current financial year or any prior financial year and is not likely to affect future years.

1.

15


15

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED)

G. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (i) Classification The Fund designates its investments in quoted Shariah-compliant equity securities as financial assets at fair

value through profit or loss at inception. Financial assets are designated at fair value through profit or loss when they are managed and their

performance evaluated on a fair value basis. Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an

active market and have been included in current assets. The Fund’s receivables comprise cash and cash equivalents, amount due from Manager and dividends receivable which are all due within 12 months.

Financial liabilities are classified according to the substance of the contractual arrangements entered into and

the definitions of a financial liability. The Fund classifies amount due to Manager, amount due to stockbrokers, amount due to Trustee, other

payables and accruals as other financial liabilities. (ii) Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-dates, the date on which the Fund

commits to purchase or sell the asset. Shariah-compliant investments are initially recognised at fair value. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with gain and loss are recognised in the statement of comprehensive income. Transaction costs are expensed in the statement of comprehensive income.

Financial liabilities, within the scope of MFRS 139, 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. Financial assets are derecognised when the rights to receive cash flows from the Shariah-compliant

investments have expired or have been transferred and the Fund has transferred substantially all risks and rewards of ownership.

Financial liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the contract is

discharged or cancelled or expired. Unrealised gains or losses arising from changes in the fair value of the financial assets at fair value through

profit or loss category are presented in the statement of comprehensive income within net gain or loss on financial assets at fair value through profit and loss in the period which they arise.

Dividend income from financial assets at fair value through profit or loss is recognised in the statement of

comprehensive income as part of gross dividend income when the Fund’s right to receive payments is established.

If a valuation based on the market price does not represent the fair value of the Quoted Shariah-compliant

securities, for example during abnormal market conditions or when no market price is available, including in the event of a suspension in the quotation of the Quoted Shariah-compliant securities for a period exceeding 14 days, or such shorter period as agreed by the Trustee, then the securities are valued as determined in good faith by the Manager, based on the methods or basis approved by the Trustee after appropriate technical consultation.

Islamic deposits with licensed Islamic financial institutions are stated at cost plus accrued profit calculated on

the effective profit method over the year from the date of placement to the date of maturity of the respective Islamic deposits.


13

1 Equity instruments and derivatives refer to Shariah- compliant equity instruments and Shariah- compliant derivatives. 2 Debt instrument refers to trade and other receivables, cash and cash equivalents, financing and sukuk. 3 Interest refers to profits earned from Shariah- compliant investments.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED) The standards, amendments to published standards and interpretations to existing standards that are applicable to

the Fund but not yet effective and have not been early adopted are as follows: (i) Financial year beginning on/after 1 July 2017 Amendments to MFRS 107 ‘‘Statement of Cash Flows – Disclosure Initiative’’ (effective from 1 January

2017) introduce an additional disclosure on changes in liabilities arising from financing activities. The Fund will apply this standard when effective. This standard is not expected to have a significant impact

on the Fund’s financial statements. (ii) Financial year beginning on/after 1 July 2018 MFRS 15 “Revenue from Contracts with Customers” (effective from 1 January 2018) replaces MFRS 118

‘’Revenue’’ and MFRS 111 ‘‘Construction Contracts’’ and related interpretations. The core principle in MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Revenue is recognised when a customer obtains control of goods or services, i.e. when the customer has the ability

to direct the use of and obtain the benefits from the goods or services. A new five-step process is applied before revenue can be recognised: • Identify contracts with customers; • Identify the separate performance obligations; • Determine the transaction price of the contract; • Allocate the transaction price to each of the separate performance obligations; and • Recognise the revenue as each performance obligation is satisfied. Key provisions of the new standard are as follows: • Any bundled goods or services that are distinct must be separately recognised, and any discounts or

rebates on the contract price must generally be allocated to the separate elements. • If the consideration varies (such as for incentives, rebates, performance fees royalties, success of an

outcome etc), minimum amounts of revenue must be recognised if they are not at significant risk of reversal.

• The point at which revenue is able to be recognised may shift: some revenue which is currently recognised at a point in time at the end of a contract may have to be recognised over the contract term and vice versa.

• There are new specific rules on licenses, warranties, non-refundable upfront fees, and consignment arrangements, to name a few.

• As with any news standard, there are also increased disclosures. The fund will apply this standard when effective. This standard is not expected to have significant impact

on the Fund's financial statements. MFRS 9 “Financial Instruments” (effective from 1 January 2018) will replace MFRS 139 “Financial

Instruments: Recognition and Measurement”. MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary

measurement categories for financial assets: amortised cost, fair value through profit or loss and fair value through Other Comprehensive Income ("OCI"). The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments1 are always measured at fair value through profit or loss with an irrevocable option at inception to present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument2 is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest3.

16


16


G. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONTINUED) (ii) Recognition and measurement Receivables and other liabilities are subsequently carried at amortised cost using the effective profit method. For assets carried at amortised cost, the Fund assesses at the end of the reporting period whether there is

objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The amount of the loss is measured as the difference between the asset’s carrying amount and the present

value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective profit rate. The asset’s carrying amount of the asset is reduced and the amount of the loss is recognised instatement of comprehensive income. If ‘receivables’ or a ‘held-to-maturity investment’ has a variable profit rate, the discount rate for measuring any impairment loss is the current effective profit rate determined under the contract.

As a practical expedient, the Fund may measure impairment on the basis of an instrument’s fair value using an

observable market price. If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related

objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the statement of comprehensive income.

When an asset is uncollectible, it is written off against the related allowance account. Such assets are written

off after all the necessary procedures have been completed and the amount of the loss has been determined. H. AMOUNT DUE FROM/TO STOCKBROKERS Amount due from and amount due to stockbrokers represent receivables for Shariah-compliant securities sold and

payables for Shariah-compliant securities purchased that have been contracted for but not yet settled or delivered on the statement of financial position date respectively.

These amounts are recognised initially at fair value and subsequently measured at amortised cost using the effective

profit method, less provision for impairment for amounts due from stockbrokers. A provision for impairment of amounts due from stockbrokers is established when there is objective evidence that the Fund will not be able to collect all amounts due from the relevant stockbroker. Significant financial difficulties of the stockbroker, probability that the stockbroker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from stockbrokers is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, profit income is recognised using the rate of profit used to discount the future cash flows for the purpose of measuring the impairment loss.

The effective profit method is a method of calculating the amortised cost of a financial asset or financial liability and

of allocating the profit income or financing expense over the relevant period. The effective profit rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective profit rate, the Fund estimates cash flows considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective profit rate, transaction costs and all other premiums or discounts.


14

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED)

A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED) (i) Financial year beginning on/after 1 July 2018 For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost

accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. MFRS 9 introduces an expected credit loss model on impairment that replaces the incurred loss impairment model used in MFRS 139. The expected credit loss model is forward-looking and eliminates the need for a trigger event to have occurred before credit losses are recognised.

The Fund will apply the above standards when effective. The standards are not expected to have a significant

impact on the Fund’s financial statements. B. INCOME RECOGNITION Profit income from Islamic deposits with licensed financial institutions is recognised based on effective profit

method on an accrual and time proportional basis. Dividend income is recognised on the ex-dividend date, when the right to receive the dividend has been established. Realised gains and losses on sale of Shariah-compliant investments are accounted for as the difference between the

net disposal proceeds and the carrying amount of Shariah-compliant investments, determined on a weighted average cost basis.

C. DISTRIBUTIONS A distribution to the Fund’s unit holders is accounted for as a deduction from realised reserve. As a result of the

reclassification of units from equity to financial liability, the Fund’s distributions are no longer classified as dividend paid in the statement of changes in net assets attributable to unit holders, but rather as finance cost in the statement of comprehensive income.

A proposed distribution is recognised as a financial liability in the year in which it is approved. D. TRANSACTION COSTS Transaction costs are costs incurred to acquire or dispose financial assets or liabilities at fair value through profit or

loss. They include fees and commissions paid to agents, advisors, brokers and dealers. Transaction costs, when incurred, are immediately recognised in the statement of comprehensive income as expenses.

E. TAXATION Current tax expense is determined according to the Malaysian tax laws at the current rate based on the taxable

profit earned during the financial period. F. FUNCTIONAL AND PRESENTATION CURRENCY Items included in 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 the Fund’s functional and presentation currency.

17


15


G. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (i) Classification The Fund designates its investments in quoted Shariah-compliant equity securities as financial assets at fair

value through profit or loss at inception. Financial assets are designated at fair value through profit or loss when they are managed and their

performance evaluated on a fair value basis. Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an

active market and have been included in current assets. The Fund’s receivables comprise cash and cash equivalents, amount due from Manager and dividends receivable which are all due within 12 months.

Financial liabilities are classified according to the substance of the contractual arrangements entered into and

the definitions of a financial liability. The Fund classifies amount due to Manager, amount due to stockbrokers, amount due to Trustee, other

payables and accruals as other financial liabilities. (ii) Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-dates, the date on which the Fund

commits to purchase or sell the asset. Shariah-compliant investments are initially recognised at fair value. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with gain and loss are recognised in the statement of comprehensive income. Transaction costs are expensed in the statement of comprehensive income.

Financial liabilities, within the scope of MFRS 139, 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. Financial assets are derecognised when the rights to receive cash flows from the Shariah-compliant

investments have expired or have been transferred and the Fund has transferred substantially all risks and rewards of ownership.

Financial liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the contract is

discharged or cancelled or expired. Unrealised gains or losses arising from changes in the fair value of the financial assets at fair value through

profit or loss category are presented in the statement of comprehensive income within net gain or loss on financial assets at fair value through profit and loss in the period which they arise.

Dividend income from financial assets at fair value through profit or loss is recognised in the statement of

comprehensive income as part of gross dividend income when the Fund’s right to receive payments is established.

If a valuation based on the market price does not represent the fair value of the Quoted Shariah-compliant

securities, for example during abnormal market conditions or when no market price is available, including in the event of a suspension in the quotation of the Quoted Shariah-compliant securities for a period exceeding 14 days, or such shorter period as agreed by the Trustee, then the securities are valued as determined in good faith by the Manager, based on the methods or basis approved by the Trustee after appropriate technical consultation.

Islamic deposits with licensed Islamic financial institutions are stated at cost plus accrued profit calculated on

the effective profit method over the year from the date of placement to the date of maturity of the respective Islamic deposits.


17


I. CASH AND CASH EQUIVALENTS For the purpose of the statement of cash flows, cash and cash equivalents comprise cash and bank balances that are

readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. J. CREATION AND CANCELLATION OF UNITS In the previous financial period, the Fund classified its puttable instruments as equity in accordance with MFRS 132

(Amendment) “Financial Instruments: Presentation”. The Fund issues cancellable units, in two classes of units, known respectively as Class A, targeted at retail investors

and Class I, targeted at institutional investors,which are cancelled at the unit holder’s option and do not have identical features. In accordance with MFRS 132 (Amendment) “Financial Instruments: Presentation”, such units, by virtue of not having identical features, are classified as financial liabilities. Cancellable units can be put back to the Fund at any time for cash equal to a proportionate share of the Fund’s net asset value (“NAV”) of respective classes. The outstanding units are carried at the redemption amount that is payable at the statement of financial position if the unit holder exercises the right to put back the unit to the Fund.

Each class of units is also offered in different currency denominations, i.e. Ringgit Malaysia, US Dollars, Euro and

Sterlings. The US Dollars, Euro and Sterlings denominated classes are not offered for sale for the financial period from 2 December 2015 (date of launch) to 30 June 2016.

Units are created and cancelled at the unit holder’s option at prices based on the Fund’s NAV per unit of respective

classes at the close of business on the relevant dealing day. The Fund’s NAV per unit of respective classes is calculated by dividing the net assets attributable to unit holders of respective classes with the total number of outstanding units of respective classes.

K. INCREASE/DECREASE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

Profit not distributed is included in net assets attributable to unit holders. Movements in net assets attributable to

unit holders are recognised in the statement of comprehensive income as finance costs. L. SEGMENT INFORMATION Operating segments are reported in a manner consistent with the internal reporting used by the chief operating

decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Investment Committee of the Fund’s Manager that undertakes strategic decisions for the Fund.

M. FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments comprise financial assets and financial liabilities. Fair value is the amount at which a financial asset could be exchanged or a financial liability settled, between knowledgeable and willing parties in an arm’s length transaction. The information presented herein represents the estimates of fair values as at the statement of financial position.

18


16


G. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONTINUED) (ii) Recognition and measurement Receivables and other liabilities are subsequently carried at amortised cost using the effective profit method. For assets carried at amortised cost, the Fund assesses at the end of the reporting period whether there is

objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The amount of the loss is measured as the difference between the asset’s carrying amount and the present

value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective profit rate. The asset’s carrying amount of the asset is reduced and the amount of the loss is recognised instatement of comprehensive income. If ‘receivables’ or a ‘held-to-maturity investment’ has a variable profit rate, the discount rate for measuring any impairment loss is the current effective profit rate determined under the contract.

As a practical expedient, the Fund may measure impairment on the basis of an instrument’s fair value using an

observable market price. If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related

objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the statement of comprehensive income.

When an asset is uncollectible, it is written off against the related allowance account. Such assets are written

off after all the necessary procedures have been completed and the amount of the loss has been determined. H. AMOUNT DUE FROM/TO STOCKBROKERS Amount due from and amount due to stockbrokers represent receivables for Shariah-compliant securities sold and

payables for Shariah-compliant securities purchased that have been contracted for but not yet settled or delivered on the statement of financial position date respectively.

These amounts are recognised initially at fair value and subsequently measured at amortised cost using the effective

profit method, less provision for impairment for amounts due from stockbrokers. A provision for impairment of amounts due from stockbrokers is established when there is objective evidence that the Fund will not be able to collect all amounts due from the relevant stockbroker. Significant financial difficulties of the stockbroker, probability that the stockbroker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from stockbrokers is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, profit income is recognised using the rate of profit used to discount the future cash flows for the purpose of measuring the impairment loss.

The effective profit method is a method of calculating the amortised cost of a financial asset or financial liability and

of allocating the profit income or financing expense over the relevant period. The effective profit rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective profit rate, the Fund estimates cash flows considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective profit rate, transaction costs and all other premiums or discounts.


18


N. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES

The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material impact to the Fund’s results and financial position are tested for sensitivity to changes in the underlying parameters.

Estimates and judgments are continually evaluated by the Manager and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In undertaking any of the Fund’s investment, the Manager will ensure that all assets of the Fund under management

will be valued appropriately, that is at fair value and in compliance with the SC Guidelines on Unit Trust Funds. However, the Manager is of the opinion that there are no accounting policies which require significant judgement to

be exercised.

19


17


I. CASH AND CASH EQUIVALENTS For the purpose of the statement of cash flows, cash and cash equivalents comprise cash and bank balances that are

readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. J. CREATION AND CANCELLATION OF UNITS In the previous financial period, the Fund classified its puttable instruments as equity in accordance with MFRS 132

(Amendment) “Financial Instruments: Presentation”. The Fund issues cancellable units, in two classes of units, known respectively as Class A, targeted at retail investors

and Class I, targeted at institutional investors,which are cancelled at the unit holder’s option and do not have identical features. In accordance with MFRS 132 (Amendment) “Financial Instruments: Presentation”, such units, by virtue of not having identical features, are classified as financial liabilities. Cancellable units can be put back to the Fund at any time for cash equal to a proportionate share of the Fund’s net asset value (“NAV”) of respective classes. The outstanding units are carried at the redemption amount that is payable at the statement of financial position if the unit holder exercises the right to put back the unit to the Fund.

Each class of units is also offered in different currency denominations, i.e. Ringgit Malaysia, US Dollars, Euro and

Sterlings. The US Dollars, Euro and Sterlings denominated classes are not offered for sale for the financial period from 2 December 2015 (date of launch) to 30 June 2016.

Units are created and cancelled at the unit holder’s option at prices based on the Fund’s NAV per unit of respective

classes at the close of business on the relevant dealing day. The Fund’s NAV per unit of respective classes is calculated by dividing the net assets attributable to unit holders of respective classes with the total number of outstanding units of respective classes.

K. INCREASE/DECREASE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

Profit not distributed is included in net assets attributable to unit holders. Movements in net assets attributable to

unit holders are recognised in the statement of comprehensive income as finance costs. L. SEGMENT INFORMATION Operating segments are reported in a manner consistent with the internal reporting used by the chief operating

decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Investment Committee of the Fund’s Manager that undertakes strategic decisions for the Fund.

M. FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments comprise financial assets and financial liabilities. Fair value is the amount at which a financial asset could be exchanged or a financial liability settled, between knowledgeable and willing parties in an arm’s length transaction. The information presented herein represents the estimates of fair values as at the statement of financial position.


19

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED)

1. INFORMATION ON THE FUND The Fund was constituted under the name of Aberdeen Islamic Malaysia Equity Fund (the “Fund”) pursuant to the execution of a Deed dated 10 September 2012 as amended by the Supplemental Deed dated 11 March 2013 (collectively referred to as the “Deeds”) between Aberdeen Islamic Asset Management Sdn Bhd (the “Manager”) and Deutsche Trustees Malaysia Berhad (the “Trustee”).

The Fund seeks to achieve capital appreciation in the long term through investments in Shariah-compliant equities and equity related securities. The Fund is a multi-class Fund which offers two classes of units which are class A, targeted at retail investors and Class I, targeted at institutional investors. Each class of units are also offered in different currency denominations, i.e. Ringgit Malaysia, US Dollars, Singapore Dollars, Australian Dollars, Euro and Sterlings. The US Dollars, Singapore Dollars, Australian Dollars, Euro and Sterlings denominated classes are not offered for sale for the financial period ended 31 December 2017.

All investments will be subjected to the Securities Commission (“SC”)’s Guidelines on Unit Trust Funds, SC requirements, the Deeds, except where exemptions or variations have been approved by the SC, internal policies and procedures and the Fund’s objective.

The Manager is a company incorporated in Malaysia and regards Aberdeen Asset Management Sdn Bhd as its immediate holding company and Aberdeen Asset Management Plc as its ultimate holding company. The principal activities of the Manager are establishment and management of Unit Trust Funds.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks which include market risk (including price risk), credit risk, liquidity risk, non-compliance risk, reclassification of Shariah status risk and capital risk.

Financial instruments of the Fund are as follows:

Note Receivables

Financial assets at fair value through

profit or loss Total As at 31 December 2017

RM RM RM

Quoted Shariah-compliant securities 7 - 6,407,216 6,407,216 Dividends receivable 57 - 57 Cash and cash equivalents 8 441,059 - 441,059

441,116 6,407,216 6,848,332

20


18


N. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES

The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material impact to the Fund’s results and financial position are tested for sensitivity to changes in the underlying parameters.

Estimates and judgments are continually evaluated by the Manager and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In undertaking any of the Fund’s investment, the Manager will ensure that all assets of the Fund under management

will be valued appropriately, that is at fair value and in compliance with the SC Guidelines on Unit Trust Funds. However, the Manager is of the opinion that there are no accounting policies which require significant judgement to

be exercised.


20

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

Note Receivables


profit or loss Total As at 30 June 2017

RM RM RM

Quoted Shariah-compliant securities 7 - 6,830,748 6,830,748 Dividends receivable 29,287 - 29,287 Amount due from stockbrokers - - - Cash and cash equivalents 8 140,554 - 140,554

169,841 6,830,748 7,000,589 All current liabilities are financial liabilities which are carried at amortised cost.

Financial risk management is carried out through internal control processes adopted by the Manager and adherence to the investment restrictions as stipulated by the prospectus and the SC’s Guidelines on Unit Trust Funds.

Market risk (i) Price risk

Price risk arises mainly due to uncertainty on the future prices of Shariah-compliant investments. It represents the potential loss the Fund might suffer through holding market positions in the face of price movements. The Manager manages the risk of unfavourable changes in prices by continuous monitoring of the performance and risk profile of the investment portfolio.

The table below shows the financial instruments of the Fund which are exposed to price risk. 31.12.2017 30.06.2017 RM RM

Quoted Shariah- compliant securities designated at fair value through profit or loss

6,407,216 6,830,748

The following table summarises the sensitivity of the Fund’s net asset value (“NAV”) and profit after tax to movements in prices of investments at the end of the reporting period. The analysis is based on the assumptions that the market price of investments fluctuates by 5% with all other variables held constant. This represents the Manager’s best estimate of a reasonable possible shift in investments, having regard to the historical volatility of the prices.

% change in price of quoted Shariah- compliant securities Market value

Impact on profit after

tax/NAV RM RM As at 31 December 2017 -5% 6,086,855 (320,361) 0% 6,407,216 - +5% 6,727,577 320,361


21


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Market risk (continued) (i) Price risk (continued)

% change in price of quoted Shariah- compliant securities

Market

value


tax/NAV RM RM As at 30 June 2017 -5% 6,489,211 (341,537) 0% 6,830,748 - +5% 7,172,285 341,537 Credit risk Credit risk refers to the risk that an issuer or counterparty will default on its contractual obligation to make timely

payments of profit, principals and proceeds resulting in financial loss to the Fund. The Manager manages the credit risk by undertaking credit evaluation to minimise such risk.

Credit risk arising from cash and cash equivalents is managed by ensuring that the Fund will only place Islamic

deposits in reputable licensed financial institutions. The settlement terms of the proceeds from the creation of units receivable from the Manager and redemption of units

payable to the Manager are governed by the SC’s Guidelines on Unit Trust Funds. For amount due from stockbrokers, the settlement terms are governed by the relevant rules and regulations as

prescribed by respective stock exchange. The credit risk is minimal as all transactions in Shariah-compliant investments are settled/ paid upon delivery using approved stockbrokers.

The following table sets out the credit risk concentration of the Fund:

Amount due from stockbrokers

Dividends receivable

Cash and cash equivalents Total

As at 31 December 2017 RM RM RM RM

Finance

- AA1 - - 441,059 441,059 Technology - NR - 57 - 57 - 57 441,059 441,116 As at 30 June 2017 Consumer Products - NR - 2,504 - 2,504 Finance - AA1 - - 140,554 140,554 Property -NR - 10,074 - 10,074 Trading/ Services - NR - 16,709 - 16,709 - 29,287 140,554 169,841 All financial assets of the Fund as at the end of the financial period are neither past due nor impaired.

21


19


1. INFORMATION ON THE FUND The Fund was constituted under the name of Aberdeen Islamic Malaysia Equity Fund (the “Fund”) pursuant to the execution of a Deed dated 10 September 2012 as amended by the Supplemental Deed dated 11 March 2013 (collectively referred to as the “Deeds”) between Aberdeen Islamic Asset Management Sdn Bhd (the “Manager”) and Deutsche Trustees Malaysia Berhad (the “Trustee”).

The Fund seeks to achieve capital appreciation in the long term through investments in Shariah-compliant equities and equity related securities. The Fund is a multi-class Fund which offers two classes of units which are class A, targeted at retail investors and Class I, targeted at institutional investors. Each class of units are also offered in different currency denominations, i.e. Ringgit Malaysia, US Dollars, Singapore Dollars, Australian Dollars, Euro and Sterlings. The US Dollars, Singapore Dollars, Australian Dollars, Euro and Sterlings denominated classes are not offered for sale for the financial period ended 31 December 2017.

All investments will be subjected to the Securities Commission (“SC”)’s Guidelines on Unit Trust Funds, SC requirements, the Deeds, except where exemptions or variations have been approved by the SC, internal policies and procedures and the Fund’s objective.

The Manager is a company incorporated in Malaysia and regards Aberdeen Asset Management Sdn Bhd as its immediate holding company and Aberdeen Asset Management Plc as its ultimate holding company. The principal activities of the Manager are establishment and management of Unit Trust Funds.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks which include market risk (including price risk), credit risk, liquidity risk, non-compliance risk, reclassification of Shariah status risk and capital risk.

Financial instruments of the Fund are as follows:

Note Receivables


profit or loss Total As at 31 December 2017

RM RM RM

Quoted Shariah-compliant securities 7 - 6,407,216 6,407,216 Dividends receivable 57 - 57 Cash and cash equivalents 8 441,059 - 441,059

441,116 6,407,216 6,848,332

22


20


Note Receivables


profit or loss Total As at 30 June 2017

RM RM RM

Quoted Shariah-compliant securities 7 - 6,830,748 6,830,748 Dividends receivable 29,287 - 29,287 Amount due from stockbrokers - - - Cash and cash equivalents 8 140,554 - 140,554

169,841 6,830,748 7,000,589 All current liabilities are financial liabilities which are carried at amortised cost.

Financial risk management is carried out through internal control processes adopted by the Manager and adherence to the investment restrictions as stipulated by the prospectus and the SC’s Guidelines on Unit Trust Funds.

Market risk (i) Price risk

Price risk arises mainly due to uncertainty on the future prices of Shariah-compliant investments. It represents the potential loss the Fund might suffer through holding market positions in the face of price movements. The Manager manages the risk of unfavourable changes in prices by continuous monitoring of the performance and risk profile of the investment portfolio.

The table below shows the financial instruments of the Fund which are exposed to price risk. 31.12.2017 30.06.2017 RM RM

Quoted Shariah- compliant securities designated at fair value through profit or loss

6,407,216 6,830,748

The following table summarises the sensitivity of the Fund’s net asset value (“NAV”) and profit after tax to movements in prices of investments at the end of the reporting period. The analysis is based on the assumptions that the market price of investments fluctuates by 5% with all other variables held constant. This represents the Manager’s best estimate of a reasonable possible shift in investments, having regard to the historical volatility of the prices.

% change in price of quoted Shariah- compliant securities Market value


tax/NAV RM RM As at 31 December 2017 -5% 6,086,855 (320,361) 0% 6,407,216 - +5% 6,727,577 320,361


22


Liquidity risk Liquidity risk is the risk that investments cannot be readily sold at or near its actual value without taking a significant discount. This will result in lower NAV and profit after tax of the Fund. The Manager manages this risk by maintaining sufficient level of Islamic liquid assets to meet anticipated payment and cancellations of units by unitholders. Islamic liquid assets comprise cash, Islamic deposits with licensed financial institutions and other instruments, which are capable of being converted into cash within 7 days.

The table below analyses the Fund's financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts in the table below are the contractual undiscounted cash flows.

Less than 1 month

Between 1 month to 1 year

Total

RM RM RM As at 31 December 2017 Amount due to the Manager - cancellation of units 4,017 - 4,017 Amount due to Trustee - - - Amount due to stockbrokers - - - Other payables and accruals - - - Contractual cash outflows 4,017 - 4,017

As at 30 June 2017 Amount due to the Manager- creation of units - - - - cancellation of units Amount due to Trustee - - - Amount due to stockbrokers - - - Other payables and accruals - - - Contractual cash outflows - - - Non-compliance risk Non-compliance risk arises when the Manager and others associated with the Fund are not in compliance with the rules set out in the Fund’s constitution, the law that governs the Fund or applicable internal control procedures, or act fraudulently or dishonestly.

The non-compliance may expose the Fund to higher risks which may result in a fall in the value of the Fund which in turn may affect its investment goals. However, the risk can be mitigated by the internal controls and compliance monitoring undertaken by the Manager.

Reclassification of Shariah status risk The risk that the currently held Shariah-compliant securities in the portfolio of Shariah-compliant funds may be reclassified to be Shariah non-compliant upon review of the securities by the Shariah Advisory Council of the Securities Commission performed twice yearly. If this occurs, the Manager will take the necessary steps to dispose of such securities. There may be opportunity loss to the Fund due to the Fund not being allowed to retain the excses capital gains derived from the disposal of the Shariah non- compliant equities. The value of the Fund may also be adversely affected in the event of a disposal of Shariah non- compliant equities at a price lower than the investment cost.

Capital risk management The capital of the Fund is represented by equity consisting of unitholders’ capital and retained earnings. The amount of equity can change significantly on a daily basis as the Fund is subject to daily subscriptions and redemptions at the discretion of unitholders. The Fund’s objective when managing capital is to safeguard the Fund’s ability to continue as a going concern in order to provide returns for unitholders and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the Fund.


21


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Market risk (continued) (i) Price risk (continued)

% change in price of quoted Shariah- compliant securities

Market

value


tax/NAV RM RM As at 30 June 2017 -5% 6,489,211 (341,537) 0% 6,830,748 - +5% 7,172,285 341,537 Credit risk Credit risk refers to the risk that an issuer or counterparty will default on its contractual obligation to make timely

payments of profit, principals and proceeds resulting in financial loss to the Fund. The Manager manages the credit risk by undertaking credit evaluation to minimise such risk.

Credit risk arising from cash and cash equivalents is managed by ensuring that the Fund will only place Islamic

deposits in reputable licensed financial institutions. The settlement terms of the proceeds from the creation of units receivable from the Manager and redemption of units

payable to the Manager are governed by the SC’s Guidelines on Unit Trust Funds. For amount due from stockbrokers, the settlement terms are governed by the relevant rules and regulations as

prescribed by respective stock exchange. The credit risk is minimal as all transactions in Shariah-compliant investments are settled/ paid upon delivery using approved stockbrokers.

The following table sets out the credit risk concentration of the Fund:

Amount due from stockbrokers

Dividends receivable

Cash and cash equivalents Total

As at 31 December 2017 RM RM RM RM

Finance

- AA1 - - 441,059 441,059 Technology - NR - 57 - 57 - 57 441,059 441,116 As at 30 June 2017 Consumer Products - NR - 2,504 - 2,504 Finance - AA1 - - 140,554 140,554 Property -NR - 10,074 - 10,074 Trading/ Services - NR - 16,709 - 16,709 - 29,287 140,554 169,841 All financial assets of the Fund as at the end of the financial period are neither past due nor impaired.

23


23


Fair value estimation Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). The fair value of financial assets traded in active markets (such as trading Shariah- compliant securities) is based on quoted market prices at the close of trading on the year end date. The Fund utilises the last traded market price for financial assets where the last traded price falls within the bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread that is most representative of the fair value.

An active market is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

The fair value of financial assets and liabilities that are not traded in an active market is determined by using valuation techniques.

Fair value hierarchy (i) The table below analyses financial instruments carried at fair value, by valuation method. The different levels

have been defined as follows: • Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities. • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly (that is, as prices) or indirectly (that is, derived from prices). • Level 3: Inputs for the asset and liability that are not based on observable market data (that is, unobservable

inputs). The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is

determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.

Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment,

considering factors specific to the asset or liability. The determination of what constitutes ‘observable’ requires significant judgment by the Fund. The Fund

considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

Level 1 Level 2 Level 3 Total As at 31 December 2017 RM RM RM RM Financial assets at fair value through profit or loss at inception

- quoted Shairah- compliant securities 6,407,216 - - 6,407,216 Level 1 Level 2 Level 3 Total As at 30 June 2017 RM RM RM RM Financial assets at fair value through profits or loss at inception

- quoted Shariah- compliant securities 6,830,748 - - 6,830,748

24


24


Fair value hierarchy (continued) Investments whose values are based on quoted market prices in active markets, and are therefore classified within

Level 1, include active listed Shariah-compliant equities. The Fund does not adjust the quoted prices for these instruments. The Fund’s policies on valuation of these financial assets are stated in Note G.

(ii) The carrying value of cash and cash equivalents, amount due from Manager, amount due from stockbrokers,

dividends receivable and all current liabilities are reasonable approximation of their fair values due to their short term natures.

3. MANAGEMENT FEE

In accordance with Clause 13.1.3 of the Deeds, the maximum rate of the annual management fee shall be 2.00% per annum for each unit class, calculated daily based on the net asset value of the Fund.

For the financial period 31 December 2017 and 31 December 2016, the management fee for the respective unit classes are as follows:

Class A Class I 1.50% per annum 1.00% per annum For the financial period ended 31 December 2017 and 31 December 2016, no management fee is charged on the fund as the management fee has been waived by the Manager.

There will be no further liability to the Manager in respect of management fee other than the amount recognised above.

4. TRUSTEE’S FEES

In accordance with Clause 13.2.2 of the Deeds, the maximum rate of annual Trustee’s fee shall be up to 0.08% per annum for each unit class, calculated daily based on the net asset value of the Fund, subject to a minimum fee of RM18,000 (excluding foreign custodian fees and charges, if applicable).

For the financial period ended 31 December 2017, the Trustee’s fee is recognised at a rate of 0.08% (2016: 0.08%) per annum for each unit class and is borne by the Manager.

There will be no further liability to the Trustee in respect of Trustee’s fees other than the amount recognised above.

5. AUDITOR’S REMUNERATION AND TAX AGENT’S FEE Auditor's remuneration and tax agent's fee of RM8,000 (2016: RM8,000) and RM3,000 (2016: RM3,000) respectively are borne by the Manager.

25


25


6. TAXATION 01.07.2017

to 31.12.2017

01.07.2016 to

31.12.2016 RM RM Tax charged for the financial period: - Current taxation 756 633 The numerical reconciliation between net income before taxation multiplied by the Malaysian statutory tax rate and tax expense of the Fund is as follows:

Net income before taxation 124,792 35,760 Tax at Malaysian statutory rate of 24 % (2016: 24%) 29,950 8,582 Tax effects of: - Investment income not subject to tax (32,729) (18,340) - Investment income subject to different tax rates (1,058) (886) - Expense not deductible for tax purposes 4,593 11,277 Taxation 756 633

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 31.12.2017 30.06.2017 RM RM Designated at fair value through profit or loss at inception - quoted Shariah- compliant securities (Note (a)) 6,407,216 6,830,748 01.07.2017

to 31.12.2017

01.07.2016 to

31.12.2016 RM RM Net gain/(loss) on financial assets at fair value through profit or loss - Realised (loss)/gain on disposals (16,143) (30,267) - Unrealised fair value gain/(loss) 44,796 (14,851) 28,653 (45,118)

26


24


Fair value hierarchy (continued) Investments whose values are based on quoted market prices in active markets, and are therefore classified within

Level 1, include active listed Shariah-compliant equities. The Fund does not adjust the quoted prices for these instruments. The Fund’s policies on valuation of these financial assets are stated in Note G.

(ii) The carrying value of cash and cash equivalents, amount due from Manager, amount due from stockbrokers,

dividends receivable and all current liabilities are reasonable approximation of their fair values due to their short term natures.

3. MANAGEMENT FEE

In accordance with Clause 13.1.3 of the Deeds, the maximum rate of the annual management fee shall be 2.00% per annum for each unit class, calculated daily based on the net asset value of the Fund.

For the financial period 31 December 2017 and 31 December 2016, the management fee for the respective unit classes are as follows:

Class A Class I 1.50% per annum 1.00% per annum For the financial period ended 31 December 2017 and 31 December 2016, no management fee is charged on the fund as the management fee has been waived by the Manager.

There will be no further liability to the Manager in respect of management fee other than the amount recognised above.

4. TRUSTEE’S FEES

In accordance with Clause 13.2.2 of the Deeds, the maximum rate of annual Trustee’s fee shall be up to 0.08% per annum for each unit class, calculated daily based on the net asset value of the Fund, subject to a minimum fee of RM18,000 (excluding foreign custodian fees and charges, if applicable).

For the financial period ended 31 December 2017, the Trustee’s fee is recognised at a rate of 0.08% (2016: 0.08%) per annum for each unit class and is borne by the Manager.

There will be no further liability to the Trustee in respect of Trustee’s fees other than the amount recognised above.

5. AUDITOR’S REMUNERATION AND TAX AGENT’S FEE Auditor's remuneration and tax agent's fee of RM8,000 (2016: RM8,000) and RM3,000 (2016: RM3,000) respectively are borne by the Manager.


26

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)

(a) Quoted Shariah-compliant investments Aggregate Percentage Name of counter Quantity cost Market value of NAV As at 31 December 2017 Units RM RM % Construction Gamuda Bhd 20,200 97,740 100,192 1.46 Consumer Products CCM Duopharma Biotech Bhd 5,692 13,652 14,401 0.21 Fraser & Neave Holdings Bhd 6,500 117,082 175,500 2.56 Nestle (Malaysia) Bhd 5,200 327,603 536,640 7.84 Oriental Holdings Bhd (Note 9(i)) 31,300 295,867 205,015 3.00 Spritzer Bhd 59,900 144,898 140,765 2.06 108,592 899,102 1,072,321 15.67 Industrial Chemical Company of Malaysia Bhd 4,666 8,869 8,632 0.13 Daibochi Plastic and Packaging Industry

Berhad

85,020 139,548 183,054 2.68 Lafarge Malaysia Bhd 62,000 578,654 384,400 5.62 Petronas Chemicals Group Bhd 25,700 160,296 197,890 2.89 Tasek Corporation Bhd 24,400 359,551 294,752 4.31 201,786 1,246,918 1,068,728 15.63 Infrastructure Project Companies Time Dotcom Berhad 35,900 118,056 326,690 4.77 Plantation Batu Kawan Bhd 17,700 331,189 346,920 5.07 Sime Darby Plantation Bhd 7,700 43,553 46,200 0.68 United Malacca Bhd 66,700 485,181 434,217 6.34 United Plantations Bhd 18,300 498,349 513,864 7.51 110,400 1,358,272 1,341,201 19.60 Properties SP Setia Bhd 135,579 278,877 343,845 5.02 Sime Darby Property Bhd 7,700 11,707 13,706 0.20 143,279 290,584 357,551 5.22 Islamic REITs Axis Real Estate Investment Trust 160,751 292,209 241,127 3.52 Technology ECS ICT Bhd 49,300 70,106 60,146 0.88 Vitrox Corporation Bhd 3,800 20,434 23,598 0.34 53,100 90,540 83,744 1.22


27


7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) (a) Quoted Shariah-compliant investments Aggregate Percentage Name of counter Quantity cost Market value of NAV As at 31 December 2017 (continued) Units RM RM % Trading / Services Aeon Co. (M) Bhd 216,000 750,969 380,160 5.55 Axiata Group Bhd 78,701 495,961 432,069 6.31 Bumi Armada Berhad 77,600 78,837 59,364 0.87 Dialog Group Bhd 109,300 155,933 274,343 4.01 DKSH Holdings (M) Bhd 77,200 335,786 307,256 4.49 IHH Healthcare Bhd 11,800 71,762 69,148 1.01 Sime Darby Bhd 7,700 14,425 17,017 0.25 Star Media Group Bhd 61,100 156,604 100,815 1.47 Tenaga Nasional Berhad 11,500 160,843 175,490 2.56 650,901 2,221,120 1,815,662 26.52 Total quoted Shariah-compliant

investment- local

1,484,909 6,614,541 6,407,216 93.61

Accumulated unrealised loss on financial asset at fair value through profit or loss

(207,325)

Total fair value of financial assets at fair value through profit or loss

6,407,216

Aggregate Percentage Name of counter Quantity cost Market value of NAV As at 30 June 2017 Units RM RM % Consumer Products Ajinomoto (Malaysia) Bhd 3,200 46,387 77,888 1.11 Fraser & Neave Holdings Bhd 8,500 153,107 215,050 3.07 Nestle (Malaysia) Bhd 5,200 327,603 442,000 6.32 Oriental Holdings Bhd (Note 9(i)) 31,300 295,868 208,771 2.98 Spritzer Bhd 59,900 144,898 146,755 2.10 108,100 967,863 1,090,464 15.58 Industrial Daibochi Plastic and Packaging Industry

Berhad

85,020

139,548

185,246

2.65 Lafarge Malaysia Bhd 56,900 546,601 315,795 4.51 Petronas Chemicals Group Bhd 25,500 155,634 181,050 2.58 Tasek Corporation Bhd 31,300 461,227 407,526 5.82 198,720 1,303,010 1,089,617 15.56

27


25


6. TAXATION 01.07.2017

to 31.12.2017

01.07.2016 to

31.12.2016 RM RM Tax charged for the financial period: - Current taxation 756 633 The numerical reconciliation between net income before taxation multiplied by the Malaysian statutory tax rate and tax expense of the Fund is as follows:

Net income before taxation 124,792 35,760 Tax at Malaysian statutory rate of 24 % (2016: 24%) 29,950 8,582 Tax effects of: - Investment income not subject to tax (32,729) (18,340) - Investment income subject to different tax rates (1,058) (886) - Expense not deductible for tax purposes 4,593 11,277 Taxation 756 633

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 31.12.2017 30.06.2017 RM RM Designated at fair value through profit or loss at inception - quoted Shariah- compliant securities (Note (a)) 6,407,216 6,830,748 01.07.2017

to 31.12.2017

01.07.2016 to

31.12.2016 RM RM Net gain/(loss) on financial assets at fair value through profit or loss - Realised (loss)/gain on disposals (16,143) (30,267) - Unrealised fair value gain/(loss) 44,796 (14,851) 28,653 (45,118)

28


26

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)

(a) Quoted Shariah-compliant investments Aggregate Percentage Name of counter Quantity cost Market value of NAV As at 31 December 2017 Units RM RM % Construction Gamuda Bhd 20,200 97,740 100,192 1.46 Consumer Products CCM Duopharma Biotech Bhd 5,692 13,652 14,401 0.21 Fraser & Neave Holdings Bhd 6,500 117,082 175,500 2.56 Nestle (Malaysia) Bhd 5,200 327,603 536,640 7.84 Oriental Holdings Bhd (Note 9(i)) 31,300 295,867 205,015 3.00 Spritzer Bhd 59,900 144,898 140,765 2.06 108,592 899,102 1,072,321 15.67 Industrial Chemical Company of Malaysia Bhd 4,666 8,869 8,632 0.13 Daibochi Plastic and Packaging Industry

Berhad

85,020 139,548 183,054 2.68 Lafarge Malaysia Bhd 62,000 578,654 384,400 5.62 Petronas Chemicals Group Bhd 25,700 160,296 197,890 2.89 Tasek Corporation Bhd 24,400 359,551 294,752 4.31 201,786 1,246,918 1,068,728 15.63 Infrastructure Project Companies Time Dotcom Berhad 35,900 118,056 326,690 4.77 Plantation Batu Kawan Bhd 17,700 331,189 346,920 5.07 Sime Darby Plantation Bhd 7,700 43,553 46,200 0.68 United Malacca Bhd 66,700 485,181 434,217 6.34 United Plantations Bhd 18,300 498,349 513,864 7.51 110,400 1,358,272 1,341,201 19.60 Properties SP Setia Bhd 135,579 278,877 343,845 5.02 Sime Darby Property Bhd 7,700 11,707 13,706 0.20 143,279 290,584 357,551 5.22 Islamic REITs Axis Real Estate Investment Trust 160,751 292,209 241,127 3.52 Technology ECS ICT Bhd 49,300 70,106 60,146 0.88 Vitrox Corporation Bhd 3,800 20,434 23,598 0.34 53,100 90,540 83,744 1.22


28


7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) (a) Quoted Shariah-compliant investments Aggregate Percentage Name of counter Quantity cost Market value of NAV As at 30 June 2017 (continued) Units RM RM % Infrastructure Project Digi.com Bhd 66,300 315,925 331,500 4.74 Time Dotcom Bhd 35,900 118,056 348,230 4.97 102,200 433,981 679,730 9.71 Plantation Batu Kawan Bhd 17,700 331,189 334,530 4.78 United Malacca Bhd 73,800 536,827 477,486 6.82 United Plantations Bhd 18,300 498,349 510,570 7.29 109,800 1,366,365 1,322,586 18.89 Properties SP Setia Bhd 105,209 242,333 267,063 3.82 Islamic REITs Axis Real Estate Investment Trust 159,786 290,771 262,049 3.74 Technology ECS ICT Bhd 14,800 22,496 21,608 0.31 Trading / Services Aeon Co. (M) Bhd 216,000 750,969 483,840 6.91 Axiata Group Bhd 99,266 628,508 479,455 6.85 Bumi Armada Bhd (Note 9(i)) 77,600 78,836 58,976 0.84 Dialog Group Bhd 109,300 155,933 209,856 3.00 DKSH Holdings (M) Bhd 72,600 313,706 355,740 5.08 IHH Healthcare Bhd 11,800 71,762 67,850 0.97 Sime Darby Bhd 7,700 69,685 73,150 1.05 Star Media Group Bhd 88,100 225,808 206,154 2.94 Tenaga Nasional Bhd 11,500 160,843 162,610 2.32 693,866 2,456,050 2,097,631 29.96 Total quoted Shariah-compliant investments -

local

1,492,481 7,082,869 6,830,748 97.57 Accumulated unrealised loss on financial asset

at fair value through profit or loss

(252,121)


6,830,748


27


7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) (a) Quoted Shariah-compliant investments Aggregate Percentage Name of counter Quantity cost Market value of NAV As at 31 December 2017 (continued) Units RM RM % Trading / Services Aeon Co. (M) Bhd 216,000 750,969 380,160 5.55 Axiata Group Bhd 78,701 495,961 432,069 6.31 Bumi Armada Berhad 77,600 78,837 59,364 0.87 Dialog Group Bhd 109,300 155,933 274,343 4.01 DKSH Holdings (M) Bhd 77,200 335,786 307,256 4.49 IHH Healthcare Bhd 11,800 71,762 69,148 1.01 Sime Darby Bhd 7,700 14,425 17,017 0.25 Star Media Group Bhd 61,100 156,604 100,815 1.47 Tenaga Nasional Berhad 11,500 160,843 175,490 2.56 650,901 2,221,120 1,815,662 26.52 Total quoted Shariah-compliant

investment- local

1,484,909 6,614,541 6,407,216 93.61

Accumulated unrealised loss on financial asset at fair value through profit or loss

(207,325)


6,407,216

Aggregate Percentage Name of counter Quantity cost Market value of NAV As at 30 June 2017 Units RM RM % Consumer Products Ajinomoto (Malaysia) Bhd 3,200 46,387 77,888 1.11 Fraser & Neave Holdings Bhd 8,500 153,107 215,050 3.07 Nestle (Malaysia) Bhd 5,200 327,603 442,000 6.32 Oriental Holdings Bhd (Note 9(i)) 31,300 295,868 208,771 2.98 Spritzer Bhd 59,900 144,898 146,755 2.10 108,100 967,863 1,090,464 15.58 Industrial Daibochi Plastic and Packaging Industry

Berhad

85,020

139,548

185,246

2.65 Lafarge Malaysia Bhd 56,900 546,601 315,795 4.51 Petronas Chemicals Group Bhd 25,500 155,634 181,050 2.58 Tasek Corporation Bhd 31,300 461,227 407,526 5.82 198,720 1,303,010 1,089,617 15.56

29


29

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 8. CASH AND CASH EQUIVALENTS 31.12.2017 30.06.2017 RM RM Bank balances 441,059 140,554 9. SHARIAH INFORMATION OF THE FUND The Shariah Adviser confirmed that the investment portfolio of the Fund is Shariah-compliant, and comprises the

following: (i) Equity securites listed in Bursa Malaysia which have been classified as Shariah- compliant by the Shariah

Advisory Council of the Securities Commission EXCEPT for Oriental Holdings Bhd and Bumi Armada Bhd, securities which were reclassified as Shariah non- compliant by the SACSC on 29 November 2013 and 27 May 2016 respectively. These securities will be disposed of soonest practical once the total amount of dividends received and the market value of the securities held equal the original investment costs; and

(ii) Cash placements and liquid assets in local market, which are placed in Shariah-compliant investments and/or

instruments. 10. NUMBER OF UNITS IN CIRCULATION Number of units in circulation is represented by: Note 31.12.2017 30.06.2017 No. of units No. of units Class A (a) 843,179 1,067,338 Class I (b) 4,500,000 4,500,000 5,343,179 5,567,338 (a) Class A 31.12.2017 30.06.2017 No. of units No. of units At the beginning of the financial period/year 1,067,338 1,391,173 Add: Creation of units arising from applications during the

financial period/year

1,450 352,963 Less: Cancellation of units during the financial period/year (225,609) (676,798) At the end of the financial period/year 843,179 1,067,338 (b) Class I 31.12.2017 30.06.2017 No. of units No. of units At the beginning of the financial period/year 4,500,000 4,500,000 Add: Creation of units arising from applications during the

financial period/year - -

Less: Cancellation of units during the financial period/year - - At the end of the financial period/year 4,500,000 4,500,000

30


28


7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) (a) Quoted Shariah-compliant investments Aggregate Percentage Name of counter Quantity cost Market value of NAV As at 30 June 2017 (continued) Units RM RM % Infrastructure Project Digi.com Bhd 66,300 315,925 331,500 4.74 Time Dotcom Bhd 35,900 118,056 348,230 4.97 102,200 433,981 679,730 9.71 Plantation Batu Kawan Bhd 17,700 331,189 334,530 4.78 United Malacca Bhd 73,800 536,827 477,486 6.82 United Plantations Bhd 18,300 498,349 510,570 7.29 109,800 1,366,365 1,322,586 18.89 Properties SP Setia Bhd 105,209 242,333 267,063 3.82 Islamic REITs Axis Real Estate Investment Trust 159,786 290,771 262,049 3.74 Technology ECS ICT Bhd 14,800 22,496 21,608 0.31 Trading / Services Aeon Co. (M) Bhd 216,000 750,969 483,840 6.91 Axiata Group Bhd 99,266 628,508 479,455 6.85 Bumi Armada Bhd (Note 9(i)) 77,600 78,836 58,976 0.84 Dialog Group Bhd 109,300 155,933 209,856 3.00 DKSH Holdings (M) Bhd 72,600 313,706 355,740 5.08 IHH Healthcare Bhd 11,800 71,762 67,850 0.97 Sime Darby Bhd 7,700 69,685 73,150 1.05 Star Media Group Bhd 88,100 225,808 206,154 2.94 Tenaga Nasional Bhd 11,500 160,843 162,610 2.32 693,866 2,456,050 2,097,631 29.96 Total quoted Shariah-compliant investments -

local

1,492,481 7,082,869 6,830,748 97.57 Accumulated unrealised loss on financial asset

at fair value through profit or loss

(252,121)


6,830,748


30

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 11. TRANSACTION WITH BROKERS/DEALERS

Details of transactions with the top 10 dealers for the financial period from 1 July 2017 to 31 December 2017 are as follows:

Value of trades

Percentage of total trades

Brokerage

fees

Percentage of total brokerage

fees RM % RM % UBS Securities Malaysia Sdn Bhd 336,685 30.41 873 29.63 Credit Suisse Hong Kong Limited 240,833 21.76 602 20.43 Maybank Investment Bank Bhd 149,256 13.48 436 14.79 CLSA Securities Malaysia Sdn Bhd 129,352 11.69 378 12.82 Citigroup Global Markets Malaysia Sdn Bhd

86,233

7.79

286

9.70

Macquarie Bank Ltd (HK) 78,421 7.08 228 7.76 CIMB Investment Bank Bhd 43,480 3.93 144 4.87 Direct 42,726 3.86 - - 1,106,986 100.00 2,947 100.00 For the financial period from 1 July 2017 to 31 December 2017, there were no transactions with related parties. Details of transactions with the top 10 dealers for the financial period from 1 July 2016 to 31 December 2016 are as follows:

Value of trades


Brokerage

fees


fees RM % RM % Malayan Banking Bhd 150,249 24.71 376 36.50 Credit Suisse Hong Kong Ltd 142,632 23.46 213 20.74 CLSA Securities Malaysia Sdn Bhd 134,670 22.15 280 27.21 UBS Securities Malaysia Sdn Bhd 103,249 16.98 120 11.66 Direct 39,115 6.43 - - Credit Suisse Hong Kong Ltd 38,149 6.27 40 3.89 608,064 100.00 1,029 100.00

For the financial period from 1 July 2016 to 31 December 2016, there were no transactions with related parties.

31


29

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 8. CASH AND CASH EQUIVALENTS 31.12.2017 30.06.2017 RM RM Bank balances 441,059 140,554 9. SHARIAH INFORMATION OF THE FUND The Shariah Adviser confirmed that the investment portfolio of the Fund is Shariah-compliant, and comprises the

following: (i) Equity securites listed in Bursa Malaysia which have been classified as Shariah- compliant by the Shariah

Advisory Council of the Securities Commission EXCEPT for Oriental Holdings Bhd and Bumi Armada Bhd, securities which were reclassified as Shariah non- compliant by the SACSC on 29 November 2013 and 27 May 2016 respectively. These securities will be disposed of soonest practical once the total amount of dividends received and the market value of the securities held equal the original investment costs; and

(ii) Cash placements and liquid assets in local market, which are placed in Shariah-compliant investments and/or

instruments. 10. NUMBER OF UNITS IN CIRCULATION Number of units in circulation is represented by: Note 31.12.2017 30.06.2017 No. of units No. of units Class A (a) 843,179 1,067,338 Class I (b) 4,500,000 4,500,000 5,343,179 5,567,338 (a) Class A 31.12.2017 30.06.2017 No. of units No. of units At the beginning of the financial period/year 1,067,338 1,391,173 Add: Creation of units arising from applications during the

financial period/year

1,450 352,963 Less: Cancellation of units during the financial period/year (225,609) (676,798) At the end of the financial period/year 843,179 1,067,338 (b) Class I 31.12.2017 30.06.2017 No. of units No. of units At the beginning of the financial period/year 4,500,000 4,500,000 Add: Creation of units arising from applications during the

financial period/year - -

Less: Cancellation of units during the financial period/year - - At the end of the financial period/year 4,500,000 4,500,000


31

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 12. UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER

The related parties of and their relationship with the Fund are as follows: Related parties Relationship Aberdeen Islamic Asset management Sdn Bhd The Manager Aberdeen Asset Management Sdn Bhd Immediate holding company of the Manager Aberdeen Asset Management Plc. (“Aberdeen”) Ultimate holding company of the Manager Subsidiaries and associates of Aberdeen Group as

disclosed in its financial statements Subsidiary and associated companies of the ultimate holding company of the Manager

Units held by the Manager and parties related to the Manager There were no units held by the Manager and parties related to the Manager as at the end of the financial period. Significant related party transactions and balances In addition to related party disclosure mentioned elsewhere in the financial statements, there were no other

significant related party transactions and balances. 13. MANAGEMENT EXPENSE RATIO (“MER”)

31.12.2017 31.12.2016 MER (%) - -

MER is derived from the following calculation: MER = (A + B + C + D + E) x 100 F A = Management fee B = Trustee’s fees C = Auditor’s remuneration D = Tax agent’s fee E = Other expenses F = Average NAV of the Fund calculated on a daily basis

The average NAV of the Fund for the financial period calculated on a daily basis is RM6,812,487 (2016: RM7,199,195).

32


30

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 11. TRANSACTION WITH BROKERS/DEALERS

Details of transactions with the top 10 dealers for the financial period from 1 July 2017 to 31 December 2017 are as follows:

Value of trades


Brokerage

fees


fees RM % RM % UBS Securities Malaysia Sdn Bhd 336,685 30.41 873 29.63 Credit Suisse Hong Kong Limited 240,833 21.76 602 20.43 Maybank Investment Bank Bhd 149,256 13.48 436 14.79 CLSA Securities Malaysia Sdn Bhd 129,352 11.69 378 12.82 Citigroup Global Markets Malaysia Sdn Bhd

86,233

7.79

286

9.70

Macquarie Bank Ltd (HK) 78,421 7.08 228 7.76 CIMB Investment Bank Bhd 43,480 3.93 144 4.87 Direct 42,726 3.86 - - 1,106,986 100.00 2,947 100.00 For the financial period from 1 July 2017 to 31 December 2017, there were no transactions with related parties. Details of transactions with the top 10 dealers for the financial period from 1 July 2016 to 31 December 2016 are as follows:

Value of trades


Brokerage

fees


fees RM % RM % Malayan Banking Bhd 150,249 24.71 376 36.50 Credit Suisse Hong Kong Ltd 142,632 23.46 213 20.74 CLSA Securities Malaysia Sdn Bhd 134,670 22.15 280 27.21 UBS Securities Malaysia Sdn Bhd 103,249 16.98 120 11.66 Direct 39,115 6.43 - - Credit Suisse Hong Kong Ltd 38,149 6.27 40 3.89 608,064 100.00 1,029 100.00

For the financial period from 1 July 2016 to 31 December 2016, there were no transactions with related parties.


32


14. PORTFOLIO TURNOVER RATIO (“PTR”)

31.12.2017 31.12.2016 PTR (times) 0.08 0.05 PTR is derived from the following calculation: (Total acquisition for the financial period + total disposal for the financial period) ÷ 2 Average NAV of the Fund for the financial period calculated on a daily basis Where: Total acquisition for the financial period = RM317,419 (2016: RM337,071) Total disposal for the financial period = RM788,164 (2016: RM312,912)

15. SEGMENT INFORMATION

The internal reporting provided to the chief operating decision maker for the Fund’s assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of MFRS and IFRS. The chief operating decision maker is responsible for the performance of the Fund and considers the business to have a single operating segment.

The reportable operating segment derives its income by seeking investments to achieve targeted returns

consummate with an acceptable level of risk within each portfolio. These returns consist of profit, dividend and gains on the appreciation in the value of investments.

There were no changes in the reportable operating segment during the financial period . 16. APPROVAL OF FINANCIAL STATEMENTS The financial statements have been approved for issue by the Manager on 15th February 2018.

33


31

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2017 (CONTINUED) 12. UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER

The related parties of and their relationship with the Fund are as follows: Related parties Relationship Aberdeen Islamic Asset management Sdn Bhd The Manager Aberdeen Asset Management Sdn Bhd Immediate holding company of the Manager Aberdeen Asset Management Plc. (“Aberdeen”) Ultimate holding company of the Manager Subsidiaries and associates of Aberdeen Group as

disclosed in its financial statements Subsidiary and associated companies of the ultimate holding company of the Manager

Units held by the Manager and parties related to the Manager There were no units held by the Manager and parties related to the Manager as at the end of the financial period. Significant related party transactions and balances In addition to related party disclosure mentioned elsewhere in the financial statements, there were no other

significant related party transactions and balances. 13. MANAGEMENT EXPENSE RATIO (“MER”)

31.12.2017 31.12.2016 MER (%) - -

MER is derived from the following calculation: MER = (A + B + C + D + E) x 100 F A = Management fee B = Trustee’s fees C = Auditor’s remuneration D = Tax agent’s fee E = Other expenses F = Average NAV of the Fund calculated on a daily basis

The average NAV of the Fund for the financial period calculated on a daily basis is RM6,812,487 (2016: RM7,199,195).


33

STATEMENT BY THE MANAGER

TO THE UNITHOLDERS OF ABERDEEN ISLAMIC MALAYSIA EQUITY FUND We, Gerald Michael Ambrose @ Johari Ali Bin Abdullah and Christopher Wong Chee Kin, being the Directors of Aberdeen Islamic Asset Management Sdn Bhd, do hereby state that, in our opinion as the Manager, the financial statements set out on pages 8 to 32 are drawn up in accordance with the provisions of the Deeds and give a true and fair view of the financial position of the Fund as at 31 December 2017 and of its financial performance, changes in net assets attributable to unitholders and cash flows for the financial year ended 31 December 2017 in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards. For and on behalf of the Manager, ABERDEEN ISLAMIC ASSET MANAGEMENT SDN BHD GERALD MICHAEL AMBROSE @ JOHARI ALI BIN ABDULLAH Chief Executive Officer CHRISTOPHER WONG CHEE KIN Director Kuala Lumpur 15th February 2018


32


14. PORTFOLIO TURNOVER RATIO (“PTR”)

31.12.2017 31.12.2016 PTR (times) 0.08 0.05 PTR is derived from the following calculation: (Total acquisition for the financial period + total disposal for the financial period) ÷ 2 Average NAV of the Fund for the financial period calculated on a daily basis Where: Total acquisition for the financial period = RM317,419 (2016: RM337,071) Total disposal for the financial period = RM788,164 (2016: RM312,912)

15. SEGMENT INFORMATION

The internal reporting provided to the chief operating decision maker for the Fund’s assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of MFRS and IFRS. The chief operating decision maker is responsible for the performance of the Fund and considers the business to have a single operating segment.

The reportable operating segment derives its income by seeking investments to achieve targeted returns

consummate with an acceptable level of risk within each portfolio. These returns consist of profit, dividend and gains on the appreciation in the value of investments.

There were no changes in the reportable operating segment during the financial period . 16. APPROVAL OF FINANCIAL STATEMENTS The financial statements have been approved for issue by the Manager on 15th February 2018.

34


34

TRUSTEE’S REPORT

TO THE UNITHOLDERS OF ABERDEEN ISLAMIC MALAYSIA EQUITY FUND

We have acted as Trustee for Aberdeen Islamic Malaysia Equity Fund (“the Fund”) for the financial year ended 31 December 2017. To the best of our knowledge, for the financial period under review, Aberdeen Islamic Asset Management Sdn Bhd (“the Manager”) has operated and managed the Fund in accordance with the following:

(a) limitations imposed on the investment powers of the Manager under the Deed(s), the Securities Commission’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 and other applicable laws;

(b) the valuation and pricing for the Fund has been carried out in accordance with the Deed(s) of the Fund and applicable regulatory requirements; and

(c) creation and cancellation of units for the Fund have been carried out in accordance with the Deed(s) of the Fund and applicable regulatory requirements.

For Deutsche Trustees Malaysia Berhad

SOON LAI CH

Senior Manager, Trustee Operations

Kuala Lumpur

15th February 2018

RICHARD LIM HOCK SENG

Chief Executive Officer

SOON LAI CHING


33

STATEMENT BY THE MANAGER

TO THE UNITHOLDERS OF ABERDEEN ISLAMIC MALAYSIA EQUITY FUND We, Gerald Michael Ambrose @ Johari Ali Bin Abdullah and Christopher Wong Chee Kin, being the Directors of Aberdeen Islamic Asset Management Sdn Bhd, do hereby state that, in our opinion as the Manager, the financial statements set out on pages 8 to 32 are drawn up in accordance with the provisions of the Deeds and give a true and fair view of the financial position of the Fund as at 31 December 2017 and of its financial performance, changes in net assets attributable to unitholders and cash flows for the financial year ended 31 December 2017 in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards. For and on behalf of the Manager, ABERDEEN ISLAMIC ASSET MANAGEMENT SDN BHD GERALD MICHAEL AMBROSE @ JOHARI ALI BIN ABDULLAH Chief Executive Officer CHRISTOPHER WONG CHEE KIN Director Kuala Lumpur 15th February 2018

35


35

SHARIAH ADVISER’S REPORT

TO THE UNITHOLDERS OF ABERDEEN ISLAMIC MALAYSIA EQUITY FUND

We have acted as the Shariah Adviser of Aberdeen Islamic Malaysia Equity Fund. Our responsibility is to ensure that the procedures and processes employed by Aberdeen Islamic Asset Management Sdn Bhd are in accordance with Shariah principles. In our opinion, Aberdeen Islamic Asset Management Sdn Bhd has managed and administered Aberdeen Islamic Malaysia Equity Fund in accordance with Shariah principles and complied with applicable guidelines, rulings and decisions issued by the Securities Commission pertaining to Shariah matters for the financial year ended 31 December 2017. In addition, we also confirm that the investment portfolio of the Aberdeen Islamic Malaysia Equity Fund comprises securities which have been classified as Shariah-compliant by the Shariah Advisory Council of the Securities Commission (“SACSC”). As for the securities which are not certified by the SACSC, we have reviewed the said securities and opine that these securities are designated as Shariah-compliant.

For and on behalf of the Shariah Adviser IBFIM

MUHAMMAD KHAIRULNIZAM BIN ALIAS

Consultant (Shariah) / Designated Person Responsible for Shariah Advisory

Kuala Lumpur 15th February 2018

Aberdeen IslamicMalaysia Equity Fund

36


36

DISTRIBUTORS FUNDSUPERMART.COM ADDRESS : Level 29, Menara Standard Chartered No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : (603) 2149 0567 WEBSITE : www.fundsupermart.com.my iFAST CAPITAL SDN BHD ADDRESS : Level 28, Menara Standard Chartered No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : (603) 2149 0660 FAX NO. : (603) 2143 1218 WEBSITE : www.ifastcapital.com.my PHILLIP MUTUAL BERHAD ADDRESS : B-2-7 Block B Level 2 Megan Avenue II No. 12 Jalan Yap Kwan Seng 50450 Kuala Lumpur HOTLINE NO. : (603) 2783 0300 FAX NO. : (603) 2166 6417 WEBSITE : www.phillipmutual.com STANDARD CHARTERED SAADIQ BERHAD ADDRESS : Menara Standard Chartered No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : 1300 888 888 / (603) 7711 8888 WEBSITE : https://www.sc.com/my/ KENWEALTH BY KENANGA ADDRESS : Kenanga Wealth Management Level 13, Kenanga Tower No. 237, Jalan Tun Razak 50400 Kuala Lumpur. HOTLINE NO. : (603) 2172 2888 WEBSITE : http://www.kenwealth.com/

For the latest list of our distributors, please refer to our website at www.aberdeen-asset.com.my/islamic

www.fundsupermart.com.my

www.ifastcapital.com.my

www.phillipmutual.com

https://www.sc.com/my/

http://www.kenwealth.com/

www.aberdeen-asset.com.my/islamic

37


37

DISCLAIMER The contents of this report is strictly for information purposes only and should not be considered an offer, or solicitation, to deal in any of the mentioned funds. Aberdeen Islamic Asset Management Sdn. Bhd. (the “Manager”) does not warrant the accuracy, adequacy or completeness of the information provided and expressly disclaims liability for any errors or omissions. Any projections or other forward-looking statement regarding future events or performance of countries, markets or companies are not necessary indicative of, and may differ from, actual events or results. No regard to the investment objectives, financial situation or particular needs of any specific investor has been taken into account in the preparation of the information provided. Investors should read and understand the master prospectus dated 2 December 2016 and the supplemental master prospectus dated 1 November 2017 in respect of Aberdeen Islamic Malaysia Equity Fund (“AIMEF”), Aberdeen Islamic World Equity Fund (“AIWEF”) and Aberdeen Islamic Asia Pacific Ex Japan Equity Fund (“AIAPxJEF”) (collectively, “Master Prospectus”) as well as the Product Highlights Sheet in respect of AIMEF, AIWEF and AIAPxJEF which can be obtained at our office or from any of our approved distributors, or seek relevant professional investment advice, before making any investment decision. A copy of the Master Prospectus has been registered with the Securities Commission of Malaysia. Investors should consider the fees and charges involved before investing. Investments in the unit trusts are not deposits in, obligations of, or guaranteed or insured by Aberdeen Islamic Asset Management Sdn. Bhd. (the “Manager”), and are subject to investment risks, including the possible loss of the principal amount invested. Unit values and income therefrom may fall or rise. Past performance is not indicative of future performance. Units will only be issued on receipt of the application form referred to in and accompanying the Master Prospectus, subject to the terms and conditions therein. Investors are advised to read and understand the contents of the unit trust loan financing risk statement before deciding to borrow/seek financing facility to purchase units. The information herein shall not be disclosed, used or disseminated, in whole or part, and shall not be reproduced, copied or made available to others. The Manager reserves the right to make changes and corrections to the information, including any opinions or forecasts expressed herein at any time, without notice. Aberdeen Islamic Asset Management Sdn. Bhd. (827342-W)


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DISTRIBUTORS FUNDSUPERMART.COM ADDRESS : Level 29, Menara Standard Chartered No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : (603) 2149 0567 WEBSITE : www.fundsupermart.com.my iFAST CAPITAL SDN BHD ADDRESS : Level 28, Menara Standard Chartered No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : (603) 2149 0660 FAX NO. : (603) 2143 1218 WEBSITE : www.ifastcapital.com.my PHILLIP MUTUAL BERHAD ADDRESS : B-2-7 Block B Level 2 Megan Avenue II No. 12 Jalan Yap Kwan Seng 50450 Kuala Lumpur HOTLINE NO. : (603) 2783 0300 FAX NO. : (603) 2166 6417 WEBSITE : www.phillipmutual.com STANDARD CHARTERED SAADIQ BERHAD ADDRESS : Menara Standard Chartered No. 30 Jalan Sultan Ismail 50250 Kuala Lumpur HOTLINE NO. : 1300 888 888 / (603) 7711 8888 WEBSITE : https://www.sc.com/my/ KENWEALTH BY KENANGA ADDRESS : Kenanga Wealth Management Level 13, Kenanga Tower No. 237, Jalan Tun Razak 50400 Kuala Lumpur. HOTLINE NO. : (603) 2172 2888 WEBSITE : http://www.kenwealth.com/

For the latest list of our distributors, please refer to our website at www.aberdeen-asset.com.my/islamic


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aberdeen islamic malaysia equity fund - fundsupermart.com malaysia€¦ · · 2018-03-01the...

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