INFORMATION MEMORANDUM

IN RESPECT OF THE

KENANGA YIELD ENHANCEMENT FUND

Manager: Kenanga Investors Berhad (Company No. 353563-P)

Trustee: CIMB Commerce Trustee Berhad

(Company No. 313031-A)

This Information Memorandum is dated 18th January 2016

Investors are advised to read and understand the contents of this Information Memorandum. If in doubt, please consult a professional adviser before subscribing

to Units of the Kenanga Yield Enhancement Fund.

This page is intentionally left blank.

TABLE OF CONTENTS

Page No.

RESPONSIBILITY STATEMENTS AND STATEMENTS OF DISCLAIMER i

DEFINITION ii

CHAPTER 1: KEY DATA 1

CHAPTER 2: RISK FACTORS 5

2.1 General Risks of Investing in Wholesale Fund 5

2.2 Specific Risks related to the Fund 6

2.3 Risk Management 6

CHAPTER 3: FUND INFORMATION 7

3.1 Investment Objective 7

3.2 Investment Policy and Strategy 7

3.3 Asset Allocation 7

3.4 Benchmark 8

3.5 Permitted Investments 8

3.6 Investment Restrictions and Limits 8

3.7 Income Distribution 8

3.8 Bases of Valuation of the Assets of the Fund and Valuation of the Fund 9 3.8.1 Bases of Valuation of the Assets of the Fund 9 3.8.2 Valuation of the Fund 10

CHAPTER 4: FEES, CHARGES AND EXPENSES 11

4.1 Sales Charge 11

4.2 Redemption Charge 11

4.3 Management Fee 11

4.4 Trustee Fee 11

4.5 Other Expenses Directly Related to the Fund 14

4.6 Reduction or Waiver of Fees 15

CHAPTER 5: TRANSACTION INFORMATION 16

5.1 Pricing Policy 16

5.2 Valuation Point of the Fund 16

5.3 Computation of NAV and how the Management Fee and Trustee Fee are calculated: 16

5.4 Subscription of Units 16

5.5 Redemption of Units 17

5.6 Periodic Reporting to Unit Holders 17

CHAPTER 6: MANAGEMENT COMPANY 19

6.1 The Manager 19

6.2 Duties and Responsibilities of the Manager 19

6.3 Board of Directors 19

6.4 Key Personnel of the Manager 20

CHAPTER 7: TRUSTEE 22

7.1 Background of the Trustee 22

7.2 Experience in Trustee Business 22

7.3 Board of Directors 22

7.4 Statement of Responsibility by the Trustee 22

7.5 Trustee’s Declaration 22

7.6 Trustee’s Delegate 23

7.7 Trustee’s Obligation 23

CHAPTER 8: SALIENT TERMS OF THE DEED 24

8.1 Unit Holders’ Rights and Liabilities 24

8.2 Termination of the Fund 24

8.3 Power to Call For A Meeting 24

CHAPTER 9: OTHER INFORMATION 26

9.1 Unclaimed Moneys 26

9.2 Unclaimed Income Distribution 26

9.3 Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLATFPUAA”) 26

9.4 No Guarantee 26

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RESPONSIBILITY STATEMENTS AND STATEMENTS OF DISCLAIMER

This Information Memorandum has been seen and approved by the directors of Kenanga Investors Berhad and they collectively and individually accept full responsibility for the accuracy of all information contained herein and confirm, having made all enquiries which are reasonable in the circumstances, that to the best of their knowledge and belief, there are no other facts omitted which would make any statement herein misleading. A copy of this Information Memorandum has been lodged with the Securities Commission Malaysia. The Securities Commission Malaysia will not be liable for any non-disclosure on the part of Kenanga Investors Berhad and takes no responsibility for the contents of this Information Memorandum, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the content of this Information Memorandum. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IN CONSIDERING THE INVESTMENT, INVESTORS WHO ARE IN DOUBT AS TO THE ACTION TO BE TAKEN SHOULD CONSULT THEIR PROFESSIONAL ADVISERS IMMEDIATELY. Additional Statements Investors should note that they may seek recourse under the Capital Markets and Services Act 2007 for breaches of securities laws and regulations including any statement in the Information Memorandum that is false, misleading, or from which there is a material omission; or for any misleading or deceptive act in relation to the Information Memorandum or the conduct of any other person in relation to the Fund. The Fund will not be offered for sale in the United States of America, its territories or possessions and all areas subject to its jurisdiction, or to any U.S. Person(s). Accordingly, investors may be required to certify that they are not U.S. Person(s) before making an investment in the Fund.

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DEFINITION

BNM Refers to Bank Negara Malaysia. Business Day Means a day on which banks in Kuala Lumpur are open for

business.

CMSA Means the Capital Markets and Services Act 2007.

Deed Means the deed entered into between the Manager and the Trustee dated 29th September 2015 in respect of the Fund, including any supplemental deeds thereto.

development financial institution

Means a development financial institution prescribed by and regulated under the Development Financial Institutions Act 2002.

financial institution Means: (a) if the institution is in Malaysia :-

(i) licensed bank; (ii) licensed investment bank; (iii) licensed Islamic bank; or (iv) Malaysia Building Society Berhad or such other

institution that is approved or authorised to provide similar business as Malaysia Building Society Berhad under any relevant laws of Malaysia;

and

(b) if the institution is outside Malaysia, any institution that is licensed, registered, approved or authorised by the relevant banking regulator to provide financial services.

the Fund Means the Kenanga Yield Enhancement Fund. GST Refers to the tax levied on goods and services pursuant to

the Goods and Services Tax Act 2014.

Guidelines Means the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework issued by the SC and any other relevant guidelines issued by the SC.

High Water Mark or HWM Refers to the NAV per Unit that forms the basis of

calculating and determining the Hurdle Value for a particular Performance Period.

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At launch, the HWM will be the initial offer price and thereafter, will be the closing NAV per Unit on the last Business Day of the preceding Performance Period or the previous HWM of the preceding Performance Period, whichever is higher.

Hurdle Value Means the minimum value that needs to be achieved before the Manager is eligible for a performance fee. The Hurdle Value is calculated by adding 4.5% to the HWM and is determined at the beginning of each Performance Period.

Information Memorandum Refers to the information memorandum of this Fund.

Initial Offer Period

A period when the Manager invites potential Investors to participate in the Fund by subscribing for Units in the Fund. During this period, Units are created, cancelled, sold and repurchased at the Offer Price.

Manager or KIB Means Kenanga Investors Berhad (353563-P).

Management Fee Is a percentage of the NAV of the Fund that is paid to the Manager for managing the Fund.

medium to long-term A period of 2 to 5 years.

Net Asset Value or NAV

Means the NAV of the Fund is determined by deducting the value of all the Fund’s liabilities from the value of all the Fund’s assets, at the valuation point. For the purpose of computing the annual management fee and annual trustee fee, the NAV of the Fund should be inclusive of the Management Fee and the Trustee Fee for the relevant day.

NAV per Unit Means the Net Asset Value of the Fund at a particular valuation point divided by the number of Units in circulation at that same valuation point.

Offer Price Means the price payable by an applicant for a Unit during the Initial Offer Period.

Performance Period Means a period of 12 months beginning from 1st June to 31st May every year to coincide with the start and the end of the Fund’s financial year. However, the Fund’s financial year may be more or less than 12 months in the first year, depending on when the Fund is launched.

RM or Ringgit Malaysia Means the lawful currency of Malaysia.

Securities Commission or SC

The Securities Commission Malaysia.

short to medium-term A period of 2 years and below.

Sophisticated Investor Refers to:-

1. an individual whose total net personal assets, or total

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net joint assets with his or her spouse, exceed RM3 million or its equivalent in foreign currencies, excluding the value of the individual’s primary residence;

2. an individual who has a gross annual income exceeding RM300,000 or its equivalent in foreign currencies per annum in the preceding 12 months;

3. an individual who, jointly with his or her spouse, has a gross annual income exceeding RM400,000 or its equivalent in foreign currencies per annum in the preceding 12 months;

4. a corporation with total net assets exceeding RM10 million or its equivalent in foreign currencies based on the last audited accounts;

5. a partnership with total net assets exceeding RM10 million or its equivalent in foreign currencies;

6. a unit trust scheme or prescribed investment scheme; 7. a private retirement scheme; 8. a closed-end fund approved by the SC; 9. a company that is registered as a trust company under

the Trust Companies Act 1949 which has assets under management exceeding RM10 million or its equivalent in foreign currencies;

10. a corporation that is a public company under the Companies Act 1965 which is approved by the SC to be a trustee under the CMSA and has assets under management exceeding ten million ringgit or its equivalent in foreign currencies;

11. a statutory body established by an Act of Parliament or an enactment of any State;

12. a pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967;

13. a holder of a capital markets services license or an executive director or a chief executive officer of a holder of a capital markets services license;

14. a licensed institution as defined in the Financial Services Act 2013;

15. an Islamic bank as defined in the Islamic Financial Services Act 2013;

16. an insurance company registered under the Financial Services Act 2013;

17. a takaful operator registered under the Islamic Financial Services Act 2013;

18. a bank licensee or insurance licensee as defined under the Labuan Financial Services and Securities Act 2010;

19. an Islamic bank licensee or takaful licensee as defined under the Labuan Islamic Financial Services and Securities Act 2010; and

20. any other investor as may be defined by the SC from time to time.

Special Resolution Means a resolution passed at a meeting of Unit Holders duly

convened in accordance with the Deed and carried by a majority in number representing at least three-fourths of the value of the Units held by the Unit Holders voting at the

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meeting in person or by proxy; for the avoidance of doubt, “three-fourths of the Unit Holders present and voting at the meeting in person or by proxy” means three-fourths of the votes cast by the Unit Holders present and voting; for the purposes of winding-up the Fund, “Special Resolution” means a resolution passed at a meeting of Unit Holders duly convened in accordance with this Deed by a majority in number holding not less than three-fourths of the value of the votes cast by the Unit Holders present and voting at the meeting in person or by proxy.

Trustee

Means CIMB Commerce Trustee Berhad (Company no. 313031-A).

Trustee Fee Is a percentage of the NAV of the Fund that is paid to the

Trustee for acting as the trustee for the Fund.

Unit Refers to undivided share in the beneficial interest and/or right in the Fund and a measurement of the interest and/or right of a Unit Holder in the Fund and means a unit of the Fund.

Unit Holder(s) or Investor(s) Refers to Sophisticated Investor for the time being registered as the holder of Units in the Fund, including a jointholder.

U.S. (United States) Person(s)

Means: (a) a U.S. citizen (including those who hold dual

citizenship or a greencard holder); (b) a U.S. resident alien for tax purposes; (c) a U.S. partnership; (d) a U.S. corporation; (e) any estate other than a non-U.S. estate; (f) any trust if:

(i) a court within the U.S. is able to exercise primary supervision over the administration of the trust; and

(ii) one or more U.S. Persons have the authority to control all substantial decisions of the trust;

(g) any other person that is not a non-U.S. Person; or (h) any definition as may be prescribed under the Foreign

Account Tax Compliance Act, as may be amended from time to time.

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CHAPTER 1: KEY DATA This section contains a summary of the salient information about the Fund.

Information about the Fund

Name Kenanga Yield Enhancement Fund.

Fund Type Income and Growth.

Fund Category Fixed income.

Investment Objective

The Fund seeks to provide Investors with income and capital growth by investing into short to medium-term money market instruments

and fixed income securities.

Investment Policy and Strategy

The Fund seeks to achieve its objective by investing a minimum of 60% of its NAV and a maximum of 100% of its NAV in fixed income securities. The Fund will invest up to 40% of its NAV in placements of fixed deposits with financial institutions and development financial institutions, money market instruments and fixed income securities with a maturity period of 2 years and below. The investment strategy will involve actively managing the maturities and durations of each investment in order to have a well-diversified portfolio for the Fund. The Fund will be strategized to focus on exceeding the average yield without compromising on the capital preservation. The Fund will also be proactively managed to meet the potential liquidity requirements.

Asset Allocation

The Fund’s portfolio will be structured as follows:-

Minimum of 60% to a maximum of 100% of its NAV will be

invested in fixed income securities; and Up to 40% of its NAV will be invested in placements of fixed

deposits, money market instruments and fixed income securities with a maturity period of 2 years and below.

Principal Risks

Interest rate risk Liquidity risk Counterparty risk

Benchmark

4.5% per annum. Please note that the benchmark herein is NOT a guaranteed rate of return of the Fund; instead it is a benchmark reference rate which is used to measure the performance of the Fund.

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Investors’ Profile

The Fund is suitable for Investors who:- seeking income and capital growth; have low to medium risk tolerance; and have medium to long-term investment horizon.

Financial Year End

The period of twelve (12) months ending on the 31st day of May of every calendar year, for the avoidance of doubt, the first financial year shall commence on the date of the first Information Memorandum and shall end on a date which does not exceed eighteen (18) months of the date of the first Information Memorandum.

Price per Unit during the Initial

Offer Period

RM1.00.

Initial Offer Period One (1) Business Day from the date of this Information Memorandum.

Commencement Date

The Fund will commence on the Business Day after the end of the Initial Offer Period.

Transaction Information

Minimum Initial Investment

RM50,000 or such other amount as the Manager may prescribe from time to time.

Minimum Additional Investment

RM10,000 or such other amount as the Manager may prescribe from time to time.

Minimum Redemption Amount

10,000 Units or such other amount as the Manager may prescribe from time to time.

Conditions for Redemption

Unit Holders may redeem their investments in the Fund on any Business Day by completing the prescribed redemption request form or such other manner as the Manager may accept and returning it to the Manager on any Business Day. The redemption request form is available at the office of the Manager. All such requests must be received by the Manager on or before the cut-off time of 11 a.m. on any Business Day. Any requests received after 11 a.m. will be treated as having been received the following Business Day. Redemption proceeds are based on the NAV per Unit of the Fund at the close of a Business Day on the day the redemption request form is received by the Manager. Redemption proceeds will be paid to Unit Holders within seven (7) Business Days upon receipt of the redemption request form.

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Transfer Facility

Transfer facility is not available for the Fund.

Switching Facility

Switching facility is not available for the Fund.

Fees and Charges

Expenses directly incurred by Unit Holders

Sales Charge

None.

Redemption Charge

None.

Expenses indirectly incurred by Unit Holders.

Management Fee

Up to zero point five per centum (0.50%) per annum of the NAV of the Fund. The Management Fee is calculated on a daily basis and payable monthly.

Performance Fee The Manager will earn a 20% performance fee on the appreciation in the NAV per Unit over and above the Hurdle Value during a particular Performance Period. However, in the interest of Investors, the Manager imposes a Hurdle Value, that is HWM plus 4.5%, in which the Fund’s performance have to exceed before the Manager is eligible for a performance fee.

Trustee Fee

Up to zero point zero two per centum (0.02%) per annum of the NAV of the Fund. The Trustee Fee is calculated daily and payable monthly.

Other Expenses

Only expenses directly incurred by the Fund will be charged to the Fund. These expenses relate primarily to the administration of the Fund. These expenses include auditor’s fees and other relevant professional fees, foreign custodial charges (if applicable), cost of distribution of quarterly or annual reports, tax certificates, reinvestment statements and other notices to Unit Holders. In addition, there are fees and expenses that are directly related and necessary to the business of the Fund such as commissions paid to brokers and taxes that are also paid out of the Fund.

Other Information

Reports Unit Holders will receive the following statements and reports in a financial year:

Confirmation of investment statements showing details of the Units purchased and the prices at which the Units were purchased;

Monthly statements of account showing the balance of Unit Holders’ investments and all transactions made during the month, distribution details and investment value based on the NAV per Unit of the Fund as at the last Business Day of that month;

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Quarterly reports and annual reports which provide an account of the Fund including a detailed overview of the Fund, investment strategies, performances, portfolio holdings and account of the Fund; and

If distribution of returns is declared by the Fund, Unit Holders will receive a statement of distribution of returns and tax statement or voucher for submission to the Inland Revenue Board of Malaysia.

Distribution Policy Subject to the availability of income, income distribution (if any) will

be incidental.

Distribution Options The following distribution options are available for the Fund. Unit Holders may specify their distribution preferences:-

Pay-out Option: Distribution proceeds paid directly to Unit Holders; or

Reinvestment Option: Unit Holders may opt for distribution proceeds to be reinvested as additional Units of the Fund at NAV per Unit on the Business Day following the distribution declaration date.

If Unit Holders do not indicate their preferred distribution option, any distributions will be automatically reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date.

For Unit Holders who select the pay-out option, the Manager shall endeavour to pay all distribution proceeds in cash or cheque in Ringgit Malaysia within fourteen (14) Business Days from the distribution declaration date, unless the distribution proceeds is less than RM50.00. In such circumstances, the distribution proceeds will be automatically reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date.

ALL FEES AND CHARGES PAYABLE TO THE MANAGER AND THE TRUSTEE ARE SUBJECT TO GOODS AND SERVICES TAX THAT IS IMPOSED BY THE GOVERNMENT OR OTHER AUTHORITIES FROM TIME TO TIME. INVESTORS ARE ADVISED TO READ THE INFORMATION MEMORANDUM AND OBTAIN PROFESSIONAL ADVICE BEFORE SUBSCRIBING TO THE FUND.

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CHAPTER 2: RISK FACTORS

2.1 General Risks of Investing in Wholesale Fund

Below are some of the general risks which Unit Holders should be aware of when investing in the Fund. Market risk – Market risk arises because of factors that affect the entire market place. Factors such as economic growth, political stability and social environment are some examples of conditions that have an impact on businesses, whether positive or negative. The Fund will be exposed to market uncertainties due to the factors stated above and this in turn will affect the value of the investments either in a positive or negative way.

Fund management risk – Investors rely on the experience and expertise of the fund management team of the Manager to make investment decisions for the Fund. A failure on the part of the fund management team to display the requisite experience and expertise expected of them in making such decisions may jeopardize the Fund’s performance and returns.

Performance risk – The performance of the Fund depends on the investments of the Fund. If there is a default, there will be a negative impact on the performance of the Fund. The performance of the Fund may also be affected if the allocation of assets is not properly done. This is where the experience and expertise of the fund managers are important as highlighted in the fund management risk write-up above. In view of the aforesaid, there is never a guarantee that investing in the Fund will produce the desired investment returns or the distribution of income.

Inflation risk – Inflation rate risk is the risk of potential loss in the purchasing power of investment due to a general increase of consumer prices. Inflation erodes the nominal rate of return giving a lower real rate of return. Investors are advised to take note that the Fund is not designed with the objective of matching the inflation rate of Malaysia. Risk of non-compliance – The Fund has been established in accordance with the provisions of the Deed and the Guidelines. There is a risk that the Manager may not observe the rules whether intentionally or inadvertently. Whilst non-compliance with the rules governing the Fund will not necessarily result in losses to the Fund, Investors cannot discount the risk that losses may be suffered by the Fund if the non-compliance with the rules is sufficiently serious and may affect the value of the Fund. This may occur, for instance, if the Manager decides to buy an instrument which is not permitted, whether intentionally or inadvertently, and thereafter having to sell that instrument at a loss to the Fund. Operational risk – This risk refers to the possibility of a breakdown in the Manager’s internal controls and policies. The breakdown may be a result of human error (for instance the keying of wrong details), system failure (causing unnecessary downtime) or even fraud (where employees of the Manager colludes with one another). This risk may cause monetary loss to the Fund and/or inconvenience to Investors. The Manager will regularly review its internal policies and system capability to minimize the occurrence of this risk. Additionally the Manager maintains a strict segregation of duties to minimize occurrence of fraudulent practices amongst employees of the Manager.

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2.2 Specific Risks related to the Fund

The specific risks affecting investments in this Fund may include but are not limited to: Interest rate risk – This risk refers to how changes in the interest rate environment would affect the performance of the Fund. In the event of a decreasing interest rate environment, lower interest rates may increase the prices of investment instrument; which in turn will reduce the potential returns of the Fund. In essence, there is an inverse relationship between interest rate and prices of investment instrument. Liquidity risk – This risk refers to the possibility that the investments of the Fund cannot be readily sold or converted into cash without incurring significant loss in value. For example, disposing a relatively illiquid instrument may result in a disadvantage to the Fund as there may not be a buyer, or sufficient buyers, available for the said instrument. This lack of demand or low trading volume may cause the value of the Fund to drop. This risk is mitigated through a diversified asset allocation in terms of the type of instruments and the tenure of the investment instruments, which include fixed deposits, money market instruments and fixed income securities.

Counterparty risk – This risk refers to the counterparty (in the contract) is not live up to its contractual obligations. For example, the counterparty’s non-payment or untimely payment of the principal and/or profit will subsequently lead to the reduction of the NAV of the Fund; which in turn will affect the performance of the Fund. The Manager may need to perform fundamental research and analysis to determine the creditworthiness of its counterparties. The Manager will have to also diversify its investments in fixed income securities, money market instruments and placements in fixed deposits by limiting its exposure on each of its counterparties.

2.3 Risk Management

Portfolio risk management is central to the Manager’s investment process. Portfolio risk management can therefore include the application of policies, procedures and practices which continually seek to identify, analyze, assess, control and mitigate unacceptable risk as it accumulates and/or concentrates within a portfolio. Accordingly, for fixed income securities, the Manger adopts an active management by conducting research on macro fundamentals, market valuations, sector outlook, company financial position and valuation to mitigate investment risks. As for the equities and equity related securities, the Manager applies numerous risk management techniques including stock exposure limits (company, sector, country etc.), pre-determined stock liquidity levels, stock selection process and “stop loss” disciplines. THE ABOVEMENTIONED RISK FACTORS SHOULD NOT BE CONSIDERED AS AN EXHAUSTIVE LIST OF RISKS. INVESTORS ARE ADVISED THAT IT IS NOT ALWAYS POSSIBLE TO PROTECT INVESTMENTS AGAINST ALL RISKS. INVESTORS ARE ADVISED TO READ THE INFORMATION MEMORANDUM TO ASSESS THE RISKS OF THE FUND. IF NECESSARY, CONSULT YOUR PROFESSIONAL ADVISER(S) FOR A BETTER UNDERSTANDING OF THE RISKS BEFORE MAKING AN INVESTMENT DECISION.

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CHAPTER 3: FUND INFORMATION

3.1 Investment Objective

The Fund seeks to provide Investors with income and capital growth by investing into short

to medium-term money market instruments and fixed income securities. Any material changes to the investment objective of the Fund would require the approval of Unit Holders.

3.2 Investment Policy and Strategy

The Fund seeks to achieve its objective by investing a minimum of 60% of its NAV and a maximum of 100% of its NAV in fixed income securities. The Fund will invest up to 40% of its NAV in placements of fixed deposits with financial institutions and development financial institutions, money market instruments and fixed income securities with a maturity period of 2 years and below. The investment strategy will involve actively managing the maturities and durations of each investment in order to have a well-diversified portfolio for the Fund. The Fund will be strategized to focus on exceeding the average yield without compromising on the capital preservation. The Fund will also be proactively managed to meet the potential liquidity requirements. The selection of the fixed income securities will depend largely on its credit quality, certainty of principal repayment by the issuers and the overall total return stability. There will be no minimum rating applicable in selecting each fixed income security. However, the following are the key considerations:

Issuer’s and/or guarantor’s industry and business medium to long-term outlook; Issuer’s and/or guarantor’s financial strength and gearing levels; Issuer’s and/or guarantor’s cash-flow quality and volatility; Issuer’s and/or guarantor’s expected future cash flow and ability to pay interest and

principal; Issuer’s and/or guarantor’s ratings by a domestic or globally recognized rating

agency; Interest rate sensitivity; Collateral type and value, and claims priority; and Price and yield-to-maturity.

In any case, the Manager may take temporary defensive position which may be inconsistent with Fund’s strategy by reducing its investment and increase liquidity level of the Fund during adverse market conditions to safeguard the Unit Holders’ interest.

3.3 Asset Allocation

Minimum of 60% to a maximum of 100% of its NAV will be invested in fixed income securities; and

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Up to 40% of its NAV will be invested in placements of fixed deposits, money market instruments or fixed income securities with a maturity period of 2 years and below.

3.4 Benchmark

4.5% per annum. Please note that the benchmark herein is NOT a guaranteed rate of return of the Fund; instead it is a benchmark reference rate which is used to measure the performance of the Fund.

3.5 Permitted Investments

Unless otherwise prohibited by the relevant authorities or any relevant law and provided always that there are no inconsistencies with the objective of the Fund, the Fund may invest in the following:

Placements of fixed deposits with financial institutions and development financial

institutions;

Money market instruments;

Commercial papers and medium-term notes;

Fixed income securities;

Malaysian government securities issued by the government of Malaysia;

Bank Negara monetary notes or its equivalent issued by BNM; and

Any other form of investments as may be determined by the Manager that is in line with the Fund’s objective.

3.6 Investment Restrictions and Limits

The Fund will be managed in accordance with the following investment restriction:

The Fund’s investments in money market instruments must be issued by a financial institution.

3.7 Income Distribution

Subject to the availability of income, income distribution (if any) will be incidental. It should be noted that the actual distribution of income and the frequency of distribution as indicated here are provisional and will depend on the availability of distributable surplus (after deducting expenses incurred by the Fund i.e., Management Fee, Trustee Fee and any other fund expenses). The following distribution options are available for the Fund. Unit Holders may specify their distribution preferences:

Pay-out Option: Distribution proceeds paid directly to Unit Holders; or

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Reinvestment Option: Unit Holders may opt for distribution proceeds to be

reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date.

If Unit Holders do not indicate their preferred distribution option, any distributions will be automatically reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date. For Unit Holders who select the pay-out option, the Manager shall endeavour to pay all distribution proceeds in cash or cheque in Ringgit Malaysia within fourteen (14) Business Days from the distribution declaration date, unless the distribution proceeds is less than RM50.00. In such circumstances, the distribution proceeds will be automatically reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date. If distribution cheque(s) remain unclaimed for 6 months, the amount will be reinvested into the Fund based on the prevailing NAV per Unit of the Fund.

3.8 Bases of Valuation of the Assets of the Fund and Valuation of the Fund

3.8.1 Bases of Valuation of the Assets of the Fund

Investment Instruments Valuation Basis

Fixed income securities Unquoted debt securities and Malaysian government securities will be valued on a daily basis based on fair value prices quoted by a bond pricing agency (“BPA”) registered with the SC. If the Manager is of the view that the price quoted by the BPA for a specific bond differs from the market price by more than twenty (20) basis points, the Manager may use the market price. In the absence of reliable market quotation, valuation should be the average price obtained from at least three (3) independent dealers.

Fixed deposits Fixed deposits are valued each day by reference to the value of such investments and the interest accrued thereon for the relevant period.

Money market instruments Money market instruments such as treasury bills, commercial papers and medium-term notes will be valued using the amortisation method.

Foreign exchange rate conversion Where the value of an asset of the Fund is denominated in a foreign currency (if any), the assets are translated on a daily basis to Ringgit Malaysia using the bid foreign

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exchange rate quoted by either Reuters or Bloomberg, at United Kingdom time 4.00 p.m. the same day.

Any other instruments Fair value as determined in good faith by the Manager, on methods or bases which have been verified by the auditors of the Fund and approved by the Trustee.

3.8.2 Valuation of the Fund The Fund will be valued at the end of every Business Day. The Fund adopts a forward pricing basis which means that the price of the Units will be calculated based on the NAV per Unit at the next valuation point. The price of Units in respect of application for Units or request for redemption received before the cut-off time of 11.00 a.m. on the Business Day (T), say, Monday, will be based on the valuation of the Units done on the same Business Day and will be available on the next day, i.e. Tuesday (T+1). If the Fund invests in foreign fixed income securities, the price of Units in respect of application for Units or request for redemption will be available on the following day, i.e. Wednesday (T+2).

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CHAPTER 4: FEES, CHARGES AND EXPENSES Expenses directly incurred by Unit Holders.

4.1 Sales Charge

The Manager does not intend to impose any sales charge.

4.2 Redemption Charge

The Manager does not intend to impose any redemption charge. Expenses indirectly incurred by Unit Holders.

4.3 Management Fee

The Management Fee is a charge levied for the services rendered by the Manager. The Management Fee is up to zero point five zero per centum (0.50%) per annum of the NAV of the Fund. The Management Fee is calculated daily and payable monthly. Please refer to the illustration under item 5.3 below to see how the Management Fee is calculated.

4.4 Performance Fee

The Manager will earn a 20% performance fee on the appreciation in the NAV per Unit over and above the Hurdle Value during a particular Performance Period. However, in the interest of investors, the Manager imposes a Hurdle Value, that is HWM plus 4.5%, in which the Fund’s performance has to exceed before the Manager is eligible for a performance fee.

The performance fee is calculated and readjusted on a daily basis. Although calculation is on a daily basis, the performance fee is only payable to the Manager at the end of each Performance Period in the following events:

(a) Where on the last Business Day of a Performance Period, the NAV per Unit (before performance fee) is higher than the Hurdle Value (see illustration 1 and illustration 2 below); and

(b) The Manager receives a repurchase request at the time when the NAV per Unit (before performance fee) is higher than the Hurdle Value, during the Performance Period. Hence, performance fee is chargeable to the redeeming Unit Holder regardless of the Fund’s performance at the end of the particular Performance Period (see illustration 4 below).

4.4.1 Determining the High Water Mark (HWM) and Setting the Hurdle Value

At the beginning of a Performance Period, the Manager will firstly determine the HWM. During the 1st Performance Period after the launch of the Fund, the HWM will be the initial

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offer price of the Fund. Thereafter, the HWM will be the closing NAV per Unit on the last Business Day of the Performance Period or the HWM of the preceding Performance Period, whichever is the higher. For example, if the NAV per Unit on the last Business Day of the 1st Performance Period is RM1.2000 (which is higher than the HWM for the preceding Performance Period i.e. RM1.0000), then the HWM for 2nd Performance Period will be RM1.2000. However, if the NAV per Unit on the last Business Day of the 1st Performance Period is RM0.98 (which is lower than the HWM for the preceding Performance Period i.e. RM1.0000), then the HWM for the 2nd Performance Period will be RM1.0000.

Next, a Hurdle Value will be determined. A Hurdle Value is the minimum value that needs to be achieved before the Manager is eligible to earn performance fee. The Hurdle Value is calculated by adding 4.5% to the HWM. For example, in Year 1, the HWM is RM1.0000. The Hurdle Value is therefore RM1.0450 (i.e. RM1.00 x 1.045). The Hurdle Value for each subsequent Performance Period is reset at the beginning of the Performance Period based on the latest HWM.

Illustration 1: Assuming in Year 1, the Fund’s initial offer price is RM1.0000 and there are no subscription and repurchase requests during the Performance Period. The HWM and Hurdle Value are as follows:

Table 1:

1st

Performance Period The Fund’s 1st

Financial Year

NAV per Unit at beginning of Year 1 RM1.0000

HWM for 1st Performance Period RM1.0000

Hurdle Value for 1st Performance Period RM1.0450

Therefore, the HWM for the 1st Performance Period is RM1.0000 and hence, the Hurdle Value of RM1.0450.

Table 2: 2

nd Performance Period The Fund’s 2

nd Financial Year

NAV per Unit at beginning of Year 1 = HWM for 1

st Performance Period

RM1.0000

Hurdle Value for 1st Performance Period RM1.0450

NAV per Unit at the end of Year 1 RM1.2000

HWM for 2nd

Performance Period RM1.2000

Hurdle Value for 2nd

Performance Period RM1.2540

Based on Table 2 above, on the last Business Day of the 1st Performance Period, the NAV per Unit of the Fund rises to RM1.2000, which is higher than the HWM for the 1st Performance Period. As a result, the HWM for 2nd Performance Period will be reset and the HWM will be RM1.2000.

As the HWM is now RM1.2000, the new Hurdle Value for Year 2 will be RM1.2540.

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4.4.2. Calculation of Performance Fee

The purpose of calculating and readjusting the performance fee on a daily basis is to take into account the calculation of the NAV per Unit for subscription and repurchase requests.

Illustration 2: Assuming there is no subscription or repurchase request during the entire Performance Period, thus Units in circulation is the same throughout the entire Performance Period. Table 3: Day Units in

Circulation (UIC)

NAV per Unit (before performance fee) (a)

NAV per Unit after performance fee)

High Water Mark (RM)

Hurdle Value (HWM x 1.045) (b)

Performance Fee [(a-b) x 20%] x UIC (RM)

1 500,000 1.0000 1.0000 1.0000 1.0450 0

2 500,000 1.0080 1.0080 1.0000 1.0450 0

3 500,000 1.0170 1.0170 1.0000 1.0450 0

4 500,000 1.0280 1.0280 1.0000 1.0450 0

5 500,000 1.0550 1.0530 1.0000 1.0450 1,000

6 500,000 1.0720 1.0666 1.0000 1.0450 2,700

7 500,000 1.0600 1.0570 1.0000 1.0450 1,500

365 500,000 1.2000 1.1690 1.0000 1.0450 15,500

Based on the figures in Table 3 above, the HWM for the Performance Period is RM1.0000 which is also the NAV per Unit on Day 1 and hence, the Hurdle Value is RM1.0450. Let us assume that on day 5, the NAV per Unit (before performance fee) is RM1.0550, while the Hurdle Value is RM1.0450, with the Units in Circulation of 500,000 Units.

Performance fee = (The difference between the NAV per Unit (before performance fee) and the Hurdle Value) x 20% x Total number of Units in Circulation of the Fund

= (RM1.0550 – RM1.0450) x 20% x 500,000 Units

= RM0.0100 x 500,000

= RM1,000

Based on the figures in Table 3 above, the performance fee, if any, will be re-adjusted* on a daily basis. On day 365, which is the last Business Day, the NAV per Unit (before performance fee) appears higher than the Hurdle Value; therefore a performance fee of RM15, 500 will be charged and payable to the Manager at the end of the Performance Period. * Adjustment is by reversing the daily accrued performance fee payable to the Manager. For example, on Day 6, the accrued performance fee from Day 5 which is RM1,000 will be reversed.

Note: Where the difference between the NAV per Unit on the last Business Day of the Performance Period and the Hurdle Value is a negative figure, no performance fee is payable to the Manager.

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Illustration 3: Where there is a subscription request by a Unit Holder during the Performance Period, the chargeable performance fee (if any) on the day of the subscription will be reflected in the NAV per Unit (after performance fee).

Illustration is based on the Day 5 figures in Table 3 above:- HWM = RM1.0000

Hurdle Value = RM1.0450

NAV per Unit (before performance fee) = RM1.0550

NAV per Unit (after performance fee) = RM1.0530

The NAV per Unit payable by the Unit Holder would be RM1.0530, i.e. Selling Price.

Illustration 4: Where there is a repurchase request by a Unit Holder during the Performance Period, the chargeable performance fee (if any) will be calculated as follows:

Illustration is based on the Day 7 figures in Table 3 above:

Number of Units repurchased by Unit Holder = 5,000 Units

Hurdle Value for the Performance Period = RM1.0450

NAV per Unit (before performance fee) @ Day 7 = RM1.0600

The repurchase request is received by the Manager on Day 7 of the Performance Period where the NAV per Unit is higher than the Hurdle Value of the Performance Period. Hence, the Fund performed and the Manager is entitled to the performance fee, as follows:-

(The difference between the NAV per unit on the Business Day when the redemption occurred and the Hurdle Value) x total number of Units redeemed x 20%

= (RM1.0600 – RM1.0450) x 5,000 Units x 20%

= RM15.00* * During the Performance Period, such amount will be maintained in the account payable of the Fund and will be paid to the Manager at the end of the Performance Period.

4.5 Trustee Fee

Up to zero point zero two per centum (0.02%) per annum of the NAV of the Fund. The Trustee Fee is calculated daily and payable monthly. Please refer to the illustration under item 5.3 below to see how the Trustee Fee is calculated.

4.6 Other Expenses Directly Related to the Fund

In administrating the Fund, there are expenses directly related to the Fund. These expenses include auditor’s fees and other relevant professional fees, foreign custodial charges (if applicable), cost of distribution of quarterly or annual reports, tax certificates, reinvestment statements and other notices to Unit Holders. In addition, there are fees and expenses that are directly related and necessary to the business of the Fund such as commissions paid to brokers and taxes that are also paid out of the Fund.

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4.7 Reduction or Waiver of Fees

The Manager may, for any reason at any time, waive or reduce the amount of any fees or other charges payable by the Unit Holders in respect of the Fund, either generally or specifically and for any period of time at its absolute discretion.

ALL FEES AND CHARGES PAYABLE TO THE MANAGER AND THE TRUSTEE ARE SUBJECT TO GOODS AND SERVICES TAX THAT IS IMPOSED BY THE GOVERNMENT OR OTHER AUTHORITIES FROM TIME TO TIME.

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CHAPTER 5: TRANSACTION INFORMATION

5.1 Pricing Policy

The Manager will adopt a single pricing policy when calculating your subscription for and redemption of Units which means that the selling price per Unit and the redemption price per Unit will be transacted and quoted on a single price i.e., the NAV per Unit of the Fund. The NAV per Unit of the Fund will be valued as at the next valuation point (at the end of each Business Day) on a forward pricing basis and will be made available on the following day. Unit Holders may obtain the NAV per Unit of the Fund by contacting the Manager directly.

5.2 Valuation Point of the Fund

The Fund will be valued at the end of every Business Day.

5.3 Computation of NAV and how the Management Fee and Trustee Fee are calculated:

Example: Computation of NAV per Unit RM Investments 10,001,000.00 Other Assets 5,000.00 Total Assets 10,006,000.00 Less: Liabilities (1,590.07) NAV of the Fund

10,004,409.93

Less: Management Fee - Calculated on a Daily Basis (0.50% per annum/365 days)

(137.05)

Trustee Fee - Calculated on a Daily Basis (0.02% per annum/365 days)

(5.48)

NAV of the Fund (before GST)

10,004,267.40

Less: GST 6% on the Management Fee for the day GST 6% on the Trustee Fee for the day NAV of the Fund (after GST) Units In Circulation

(8.22) (0.33)

10,004,258.85 10,004,000.00

NAV per Unit 1.000026

NAV per Unit (rounded to 4 decimal points) 1.0000

5.4 Subscription of Units

Application for Units should be made on or before the cut-off time of 11 a.m. on any Business Day. The subscription form is available at the office of the Manager.

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During the Initial Offer Period, Units of the Fund will be issued at the Offer Price. After the Initial Offer Period, Investors will purchase Units at the NAV per Unit of the Fund at the next valuation point after their application is accepted by the Manager.

5.5 Redemption of Units

Unit Holders may redeem their investments in the Fund on any Business Day by completing the prescribed redemption request form or such other manner as the Manager may accept and returning it to the Manager on any Business Day. The redemption request form is available at the office of the Manager. All such requests must be received by the Manager on or before the cut-off time of 11 a.m. on any Business Day. Any requests received after 11 a.m. will be treated as having been received the following Business Day. Redemption proceeds are based on the NAV per Unit of the Fund at the close of Business on the day the redemption request form is received by the Manager. Redemption proceeds will be paid to Unit Holders within seven (7) Business Days upon receipt of the redemption request form. The minimum redemption amount is 10,000 Units or such other amount as the Manager may prescribe from time to time.

5.6 Periodic Reporting to Unit Holders

During every Financial Year of the Fund, Unit Holder will receive:

Confirmation of investment statements detailing his investment, which will be sent within ten (10) Business Days from the date monies are received by the Manager for investment in the Fund. This confirmation will include details of the Units purchased and the purchase price;

Monthly statements of account which shows the balance of Unit Holders’ investments

and all transactions made during the month, distribution details and investment value based on the NAV per Unit of the Fund as at the last trading day of that month;

Quarterly reports which provides a brief overview of the Fund including key risk

factors, investment outlook for the quarter, the Fund’s financial performance, default risk, level of borrowings, market outlook, changes in the key investment team, illiquid holdings, details on portfolio holdings, information on Fund performance and volatility and unaudited financial statements of the Fund for the quarter. The quarterly reports will be dispatched to all Unit Holders within two (2) months from the close of each financial quarter;

An annual report which provides a detailed overview of the Fund including key risk

factors, investment outlook for the year, the Fund’s financial performance, default risk, level of borrowings, market outlook, changes in the key investment team, illiquid holdings, details on portfolio holdings, information on Fund performance and volatility and audited financial statements of the Fund for the year. The annual report will be dispatched to all Unit Holders within two (2) months from the close of each financial year; and

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If distribution of returns is declared by the Fund, Unit Holders will receive a statement

of distribution of returns, detailing the nature and amount of returns distributed by the Fund and a tax statement or voucher for submission to the Inland Revenue Board of Malaysia.

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CHAPTER 6: MANAGEMENT COMPANY

6.1 The Manager

Kenanga Investors Berhad holds the capital markets and services licence for fund management in Malaysia under the CMSA. KIB has more than 18 years’ experience in providing fund management and fund advisory services, for both institutional and retail clients. As at 30 September 2015, the Manager manages 25 unit trust funds, 1 private retirement scheme (consisting of 3 core funds and 1 non-core fund), 14 wholesale funds and other funds from government agencies, pension funds, insurance, corporate and individual clients with a total fund size of approximately RM6.0 billion. The Manager has the services of 90 experienced personnel (78 executives, and 12 non-executives). KIB is a wholly-owned subsidiary of Kenanga Investment Bank Berhad ("KIBB") and is licensed to perform the regulated activities of fund management, dealing in securities (restricted to unit trust), investment advice and dealing in private retirement scheme under the CMSA.

6.2 Duties and Responsibilities of the Manager

KIB is responsible for the day-to-day management, marketing and administration of the Fund in accordance with the provisions of the Deed. The responsibilities of the Manager include:- (a) Selecting and managing investments of the Fund; (b) Executing, supervising and valuing investments of the Fund; (c) Arranging the sale and repurchase of Units in the Fund; (d) Issuing the fund reports in respect of market and economic review, outlook,

strategies and performances; (e) Distribution of income to Unit Holders (if any); and (f) Keeping proper records of the Fund.

In fulfilling these functions, the Manager has in place a team of staff who are experienced in various aspects of the investment management industry, i.e. in the administration, marketing and fund management function. The Manager’s various investment teams will meet informally on a daily basis with a formal meeting (the investment sub-committee) occurring fifteen (15) times a year (at times considered appropriate), to amongst other things, monitor the changing investment landscape and re-assess market conditions in terms of opportunity and risk. This activity seeks to ensure the investment strategies and policies of all funds managed by the Manager are consistently matched with the prevailing market environment and outlook.

6.3 Board of Directors

Datuk Syed Ahmad Alwee Alsree (Chairman) Syed Zafilen Syed Alwee (Independent Director) Peter John Rayner (Independent Director) lmran Devindran bin Abdullah (Independent Director) Dato’ Bruce Kho Yaw Huat (Non-Independent Director) Ismitz Matthew De Alwis (Executive Director/Chief Executive Officer)

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6.4 Key Personnel of the Manager

Ismitz Matthew De Alwis Executive Director / Chief Executive Officer Ismitz Matthew De Alwis is the Chief Executive Officer for Kenanga Investors Berhad (KIB). He is responsible for the overall asset and investment management business of KIB and its subsidiaries. He started his career as an Investment Analyst with a regional research & advisory firm, where he obtains vast regional exposure in Hong Kong, Philippines, Dubai and Singapore. He brings with him 23 years of experience, multiple expertise and several leadership roles in the fields of financial and investment management both regionally and locally. He joined Kenanga Investors in June 2014 upon the acquisition by Kenanga Investors of ING Investment management business in Malaysia, ING Funds Berhad where he was the Executive Director and country head.

He has attended the Advanced Business Management Program (ABMP) by International Institute for Management Development (IMD), Lausanne, Switzerland and holds a MBA where he graduated with distinction. In addition, he has a Bachelor Degree (H) in Business Administration and holds two other professional qualifications from the Chartered Institute of Marketing UK (CIM UK), and is a Certified Financial Planner (CFP). Matthew also holds a Capital Markets Services Representative’s Licence (CMSRL) from the Securities Commission for fund management and investment advice. Mr. De Alwis is currently on the board of the Federation of Investment Managers Malaysia (FIMM) and the Board of Governors of Financial Planning Association of Malaysia (FPAM). Lee Sook Yee Chief Investment Officer and Designated Person Responsible for the Fund Lee Sook Yee joined KIB as the Chief Investment Officer (“CIO”) in March 2013, bringing with her more than twelve (12) years of experience in local and regional equities investment. Prior to this, Sook Yee was Head of Equities at Meridian Asset Management (“Meridian”), where she led an experienced team of fund managers/analysts in managing equities portfolios of more than RM1 billion in assets under management. At Meridian, she managed various local and regional funds. Before joining Meridian, Sook Yee was Vice President/Senior Portfolio Manager at Credit-Suisse Asset Management in Singapore where she co-managed mutual funds focusing on emerging Asian markets. She was also Associate Director/ Portfolio Manager with UOB-OSK Asset Management. Sook Yee graduated with a BSc (First Class Honours) in Economics from the London School of Economics, UK, and later obtained her Master of Philosophy (M.Phil) in Economics from the University of Cambridge, UK. She holds a Capital Markets Services Representative’s Licence (CMSRL) from the Securities Commission for fund management.

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Andrew Chan Chief Financial Officer Andrew Chan joined KIB in June 2013 to head the Finance & Investment Operations team. Prior to this, Andrew was with ING Funds Berhad (“ING Funds”), where he joined since 2004. He has been with ING Funds since the company’s inception and is one of the pioneers during the company’s green field set-up. Andrew has more than twenty (20) years of experience in the business management, finance and accounting field. He started his accounting career in Australia. Upon his return, he joined a public-listed company as a senior accountant. His last stint prior to joining ING Funds was with an established unit trust management company where he was responsible for all financial and management reporting. Andrew is a Certified Practising Accountant (“CPA”), Australia and holds a Bachelor of Economics from La Trobe University, Melbourne, Australia. Dr. Sahar Effendi bin Hj Daud Head of Compliance and Designated Person Responsible for Compliance matters for the Fund Dr. Sahar joined KIB on 3 November 2014 as the Head of Compliance. He started his career in 1997 with an international affiliated accounting firm before joining the Securities Commission in 2001. Whilst with the SC, he was attached to the Trust and Investment Management Department for about 2 years prior to joining the Investigation Department until his departure from the SC in October 2014. During his tenure with the Investigation Department, he was exposed to numerous high profile cases in various areas involving insider trading, market manipulation, illegal investment schemes, corporate fraud and forensic accounting as well as money laundering related offences. Dr. Sahar, a Chartered Accountant (Malaysia), holds a Bachelor of Accountancy (Hons) from Universiti Putra Malaysia, MBA (Management and Finance) and Doctor of Business Administration (Accounting: Financial Disclosure, Corporate Governance and Performance Measurement); both from Universiti Utara Malaysia. Dr. Sahar is also a member of the Malaysian Institute of Accountants (MIA), Chartered Tax Institute of Malaysia (CTIM), Association of Certified Fraud Examiner (ACFE) as well as the Certified Financial Investigator Alumni (CFIA).

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CHAPTER 7: TRUSTEE

7.1 Background of the Trustee

CIMB Commerce Trustee Berhad was incorporated on 25 August 1994 and registered as a trust company under the Trust Companies Act, 1949 and having its registered office at Level 13, Menara CIMB, Jalan Stesen Sentral 2, Kuala Lumpur Sentral 50470, Kuala Lumpur, Malaysia. The Trustee is qualified to act as a trustee for collective investment schemes approved under the CMSA. 7.2 Experience in Trustee Business

As at 30 September 2015, CIMB Commerce Trustee Berhad acts as trustee to one (1) real estate investment trust fund, sixty (60) unit trust funds, one (1) private retirement scheme (consisting of five (5) funds) and thirteen (13) wholesale funds and has more than nineteen (19) years of experience as trustee to unit trust funds. In addition to overseeing these funds, CIMB Commerce Trustee Berhad also acts as trustee to private debt securities issues such as bonds and notes. Other than being the administrator of deceased’s estates, executor of wills, trustee for minors or incapacitated persons, CIMB Commerce Trustee Berhad also acts as trustee for public, charitable, staff retirement, and pension/ gratuity fund scheme, custodian trustee for associations, clubs and others. CIMB Commerce Trustee Berhad is supported by twenty-two (22) staff of which comprising of twenty-two (22) executives as at 30 September 2015. 7.3 Board of Directors Zahardin Omardin Non-Executive, Independent Director & Chairman Mohamad Safri Bin Shahul Hamid Non-Executive. Non-Independent Director Liew Pik Yoong Executive, Non-Independent Director 7.4 Statement of Responsibility by the Trustee The Trustee has given its willingness to assume the position as trustee of the Fund and all the obligations in accordance with the Deed, all relevant laws and rules of law. 7.5 Trustee’s Declaration The Trustee is independent of the Manager. The Trustee will carry out transactions on an arm’s length basis and on terms which are best available for the Fund, as well as act at all times in the best interest of the Unit Holders. The Trustee also has adequate procedures and processes in place to prevent or control conflicts of interest.

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7.6 Trustee’s Delegate CIMB Commerce Trustee Berhad has appointed CIMB Bank Berhad as the custodian of the Fund's assets. CIMB custodial services come under Securities Services (“SS”), a unit of transaction banking under the wholesale banking division of CIMB Group. SS provides full-fledged custodial services, typically clearing and custody services covering all types of investment assets and classes, to a cross section of investors and intermediaries client base, both locally and overseas. For the local Ringgit assets, the assets are held through its wholly owned nominee subsidiary, CIMB Group Nominees (Tempatan) Sdn Bhd. For foreign non-Ringgit assets, SS appoints global custodian as its agent bank to clear, settle and safe keep on its behalf and to its order. The appointed global custodians are Citibank N. A, Singapore and BNP Paribas Securities Services, Singapore. All investments are automatically registered in the name of the Fund. CIMB Bank Berhad acts only in accordance with instructions from the Trustee.

7.7 Trustee’s Obligation

The Trustee’s obligation in respect of monies paid by an investor for the application of units arises when the monies are received in the relevant account of the trustee for the Fund and the Trustee’s obligation is discharged once it has paid the redemption amount to the Manager.

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CHAPTER 8: SALIENT TERMS OF THE DEED

8.1 Unit Holders’ Rights and Liabilities

Unit Holders’ Rights A Unit Holder has the right, amongst others:

(a) to receive distributions of income (if any); (b) to participate in any increase in the value of the Units; (c) to call for Unit Holders’ meetings and to vote for the removal of the Trustee through

a Special Resolution; (d) to receive annual and quarterly reports on the Fund; and (e) to enjoy such other rights and privileges as are provided for in the Deed.

No Unit Holder shall be entitled to require the transfer to him of any of the investments or assets of the Fund or be entitled to interfere with or question the exercise by the Trustee, or the Manager on its behalf, of the rights of the Trustee as the registered owner of such investments and assets. Unit Holders’ Liabilities

(a) No Unit Holder is liable for any amount in excess of the purchase price paid for the Units as determined pursuant to the Deed at the time the Units were purchased.

(b) A Unit Holder shall not be under any obligation to indemnify the Manager and/or the

Trustee in the event that the liabilities incurred by the Manager and/or the Trustee in the name of or on behalf of the Fund pursuant to and/or in the performance of the provisions of the Deed exceed the value of the assets of the Fund, and any right of indemnity of the Manager and/or the Trustee shall be limited to recourse to the Fund.

8.2 Termination of the Fund The Fund may be terminated or wound up should a Special Resolution be passed at a Unit Holders’ meeting to terminate or wind up the Fund.

8.3 Power to Call For A Meeting

A Unit Holders’ meeting may be called by the Manager, Trustee and/or Unit Holders. Any such meeting must be convened in accordance with the Deed. The Unit Holders may apply to the Manager to summon a meeting for any purpose including without limitation, for the purpose of:

(a) Requiring the retirement or removal of the Manager; (b) Requiring the retirement or removal of the Trustee; (c) Considering the most recent audited financial statements of the Fund; (d) Giving to the Trustee such directions as the meeting thinks proper; or

25

(e) Considering any matter in relation to the Deed, provided always that the Manager shall not be obliged to summon such a meeting unless a direction has been received from not less than fifty (50) or one-tenth (1/10) of all the Unit Holders of the Fund, whichever is the lesser number. Every question arising at any meeting shall be decided in the first instance by a show of hands unless a poll is demanded or if it be a question which under the Deed requires a Special Resolution, in which case a poll shall be taken. On a show of hands every Unit Holder who is present in person or by proxy shall have one vote. The quorum for a meeting of Unit Holders of the Fund is five (5) Unit Holders, whether present in person or by proxy, provided always that if the Fund has five (5) or less Unit Holders, the quorum required for a meeting of the Unit Holders of the Fund shall be two (2) Unit Holders, whether present in person or by proxy; if the meeting has been convened for the purpose of voting on a Special Resolution, the Unit Holders present in person or by proxy must hold in aggregate at least twenty five per centum (25%) of the Units in circulation of the Fund at the time of the meeting.

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CHAPTER 9: OTHER INFORMATION

9.1 Unclaimed Moneys

Any monies other than unclaimed income distribution payable to Unit Holders which remain unclaimed for one (1) year will be handled in accordance with the requirements of the Unclaimed Moneys Act, 1965 (revised 1989) and Unclaimed Moneys (Amendment) Act 2002.

9.2 Unclaimed Income Distribution

If Unit Holders elect to receive income distribution in the form of cheques and the Unit Holders do not deposit the cheques within six (6) months from the date of issuance of the said cheques, the Manager shall automatically reinvest the income amount into additional Units of the Fund at the NAV per Unit at the end of the expiry date of the said cheques provided that the Unit Holders still have an account with the Manager. For the avoidance of doubt, there will not be any sales charge imposed for the reinvestment.

9.3 Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLATFPUAA”)

Application for Units must be accompanied by proper identification documents for our verification. All Investors will be checked against various reliable sources for money laundering information. Any cases which are suspicious will be reported to our compliance officer who will then report the matter to the SC and BNM. Money laundering is a process intended to conceal the benefits derived from unlawful activities which are related, directly or indirectly, to any serious offence so that they appear to have originated from a legitimate source. The AMLATFPUAA is the act that provides for the offence of money laundering and also the measures to be taken for the prevention of money laundering and terrorism financing offences. The Financial Intelligence and Enforcement Department of BNM has been established to carry out the functions as the competent authority under the AMLATFPUAA. All market intermediaries under the CMSA and fund management companies approved by the SC under the CMSA are obliged to comply with the provisions of the AMLATFPUAA.

9.4 No Guarantee

The Manager does not guarantee the performance or success of the Fund. Investors are advised to read the Information Memorandum and obtain professional advice before subscribing to the Fund.

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All enquiries about the investment should be directed in writing to:- Kenanga Investors Berhad Suite 12.02, 12th Floor Kenanga International Jalan Sultan Ismail, 50250 Kuala Lumpur Website: www.kenangainvestors.com.my Email: investorservices@kenanga.com.my Toll free Line: 1-800-88-3737 Facsimile No.: 03-2057 3722

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Kenanga Investors Berhad Suite 12.02, 12th floor, Kenanga International

Jalan Sultan Ismail, 50250 Kuala Lumpur Malaysia Website: www.kenangainvestors.com.my Email: investorservices@kenanga.com.my

Toll free Line: 1-800-88-3737