Reaching out to you

Hong Leong Asia-Pacific Dividend Fund

Interim Report 2020/2021 30 April 2021 Unaudited Hong Leong Asia-Pacific Dividend Fund

Contents

Page Manager’s Review and Report 1-9 Statement by the Manager 10 Trustee’s Report 11 Condensed Statement of Comprehensive Income 12 Condensed Statement of Financial Position 13 Condensed Statement of Changes in Equity 14 Condensed Statement of Cash Flows 15 Notes to the Condensed Financial Statements 16-47 Performance Data 48-49 Corporate Information 50 Corporate Directory 51 Manager’s Review and Report

I. FUND INFORMATION

Fund Name Hong Leong Asia-Pacific Dividend Fund

Fund Category Equity

Fund Type Growth & Income

Investment Objective The Fund aims to provide investors with steady recurring income* that is potentially higher than the average fixed deposit rates. At the same time, the Fund also attempts to attain Medium-To-Long Term** capital gains from investing in high quality dividend yielding equities***.

Benchmark MSCI AC Asia-Pacific ex Japan Index

Distribution Policy The Fund intends to provide regular income* and potentially consistent Long-Term**** capital appreciation. Regular income returns will be declared annually on a best effort basis, depending on interest rates, market conditions and performance of the Fund. As such, the Fund will strive to declare distributions annually, if any, in the form of either cash or additional Units to the Unitholders.

Breakdown of Unitholdings By Size Size of Holdings No. of Unitholders No. of Units Held 5,000 and below 265 688,680.90 5,001 to 10,000 152 1,121,830.78 10,001 to 50,000 254 5,854,399.52 50,001 to 500,000 53 5,956,170.76 500,001 and above 2 137,243,554.05

Notes: * Income may be distributed in the form of cash and/or Units. ** Medium-To-Long Term refers to a period of 3 to 5 years. *** High quality dividend yielding equities refer to equity securities that have dividend yields at and/or above market average. **** Long-Term refers to a period of above 5 years.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 1 II. FUND PERFORMANCE

Chart 1: Performance of the Fund versus the benchmark covering the last five-year financial period

200

150

100

Percentage Growth Percentage 50

0 30/04/2017 30/04/2021 30/04/2016 30/04/2019 30/04/2018 30/04/2020

From 30/04/2016 To 30/04/2021

Hong Leong Asia-Pacific MSCI AC Asia-Pacific ex Dividend Fund Japan 75.36 (HLAPDF) 138.52

Source: Lipper For Investment Management, In Malaysian Ringgit terms, ex- distribution, NAV Per Unit-to-NAV Per Unit basis with gross income (if any) from HLAPDF reinvested.

Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up.

2 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Performance Review

This Interim Report covers the six-month financial period from 1 November 2020 to 30 April 2021.

The Fund posted a return of 33.19% in the past six months while its benchmark the MSCI AC Asia Pacific ex Japan Index registered a return of 20.36% (in Malaysian Ringgit terms). During the financial period under review, the Fund had distributed income distribution of 2.00 sen per unit to its Unitholders on 19 January 2021. Prior to the income distribution, the cum-distribution net asset value (NAV) per unit of the Fund was RM0.6827 while the ex-distribution NAV per unit was RM0.6627. Unitholders should note that income distribution has the effect of reducing the NAV per unit of the Fund after distribution.

For the five-year financial period ended 30 April 2021, the Fund garnered a return of 138.52% compared to the benchmark’s return of 75.36% while distributing a total gross income of 9.90 sen per unit.

Table 1: Performance of the Fund for the following periods as at 30 April 2021 (Source: Lipper For Investment Management)

31/01/21– 31/10/20– 30/04/20– 30/04/18– 30/04/16– 30/04/11– 28/02/06– 30/04/21 30/04/21 30/04/21 30/04/21 30/04/21 30/04/21 30/04/21 Since 3 Months 6 Months 1 Year 3 Years 5 Years 10 Years Launch HLAPDF (%) 13.87 33.19 76.89 88.83 138.52 113.84 166.68 Benchmark (%) 3.04 20.36 38.52 27.76 75.36 90.24 134.79

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 3 Table 2: Return of the Fund based on NAV Per Unit-to-NAV Per Unit basis for the period 31 October 2020 to 30 April 2021 (Source: Lipper For Investment Management)

30-Apr-21 31-Oct-20 Return (%) NAV Per Unit RM0.7363 RM0.5695 33.19# Benchmark 696.37 570.43 20.36 vs Benchmark (%) - - 12.83 # Return is calculated after adjusting for income distribution during the period under review.

Table 3: Financial Highlights The Net Asset Value attributable to Unitholders is represented by:

30-Apr-21 31-Oct-20 Change (RM) (RM) (%)

Unitholders’ Capital 87,227,080 25,488,111 242.23 Retained Earnings 23,861,108 8,955,050 166.45 Net Asset Value 111,088,188 34,443,161 222.53

Units in Circulation 150,864,636 60,483,297 149.43

Table 4: The Highest and Lowest NAV Per Unit, Total Return of the Fund and the breakdown into Capital Growth and Income Distribution for the financial period/years

Financial Period Financial Year Financial Year Financial Year 31/10/20– 31/10/19– 31/10/18– 31/10/17– 30/04/21 31/10/20 31/10/19 31/10/18 Highest NAV Per Unit (RM) 0.7610 0.6628 0.4694 0.4818 Lowest NAV Per Unit (RM) 0.5700 0.3702 0.3827 0.4146 Capital Growth (%) 29.29 21.33 11.36 -9.80 Income Distribution (%) 3.90 11.23 2.46 2.00 Total Return (%) 33.19 32.56 13.82 -7.80

Source: Lipper For Investment Management, In Malaysian Ringgit terms, ex- distribution, NAV Per Unit-to-NAV Per Unit basis with gross income (if any) from HLAPDF reinvested.

4 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Table 5: Average Total Return of the Fund

30/04/20– 30/04/18– 30/04/16– 30/04/21 30/04/21 30/04/21 1 Year 3 Years 5 Years Average Total Return (%) 76.89 29.61 27.70 Source: Lipper For Investment Management, In Malaysian Ringgit terms, ex- distribution, NAV Per Unit-to-NAV Per Unit basis with gross income (if any) from HLAPDF reinvested.

Table 6: Annual Total Return of the Fund

Financial Year 31/10/19– 31/10/18– 31/10/17– 31/10/16– 31/10/15– 31/10/20 31/10/19 31/10/18 31/10/17 31/10/16 Annual Total Return (%) 32.56 13.82 -7.80 18.85 5.97 Source: Lipper For Investment Management, In Malaysian Ringgit terms, ex- distribution, NAV Per Unit-to-NAV Per Unit basis with gross income (if any) from HLAPDF reinvested.

III. INVESTMENT PORTFOLIO

Chart 2: Asset Allocation - November 2020 to April 2021

Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21

Equities

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 5 Chart 3: Sector Allocation as at 30 April 2021

Deposits & Cash Equivalents 12.32% Consumer Products Energy & Services 3.34% 28.10% Real Estate 4.01% Financial Services 6.70% Technology 6.75%

Industrial Products Materials & Services 17.35% 21.43%

Chart 4: Geographical Allocation as at 30 April 2021

Deposits & Cash Equivalents 12.32% Thailand 32.16% 3.87%

Taiwan 24.59%

Hong Kong 27.06%

6 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Strategies employed by the Fund during the period under review

During the period under review, the Fund was well invested and managed to benefit from the vaccine-led market recovery, particularly at the end of 2020 and the beginning of 2021. In particular, the Fund’s exposure to export stocks in Taiwan and Malaysia drove most of the Fund’s outperformance during the period.

The Fund remains predominantly invested in Hong Kong, Taiwan and Malaysia equities. This geographical allocation enables the Fund to benefit from both the strong economic recovery in developed markets and the long-term structural domestic demand growth in Asia.

As of 30 April 2021, the Fund’s top-three holdings are D&O Green Technologies Berhad–Malaysia (6.75%), Eclat Textile Company Limited– Taiwan (6.71%) and Shimao Services Holdings Limited–Hong Kong (6.70%).

Notification of changes

A 3rd Supplementary Master Prospectus (“3rd SMP”) was issued on 31 December 2020 which is supplementary to and to be read in conjunction with the Hong Leong Master Prospectus dated 23 August 2019 (“MP”), the 1st Supplementary Master Prospectus dated 18 November 2019 (“1st SMP”) and the 2nd Supplementary Master Prospectus dated 27 March 2020 (“2nd SMP”).

Changes that require your attention are:

• The information stated under the “The Key Personnel of the Investment Team” was amended to reflect the change of designated Fund Manager effective 1 October 2020; and • The section on “Fund Switching” was partly re-arranged for clarity purposes.

A copy of the MP, the 1st SMP, the 2nd SMP and the 3rd SMP can be obtained from our website at www.hlam.com.my.

For the financial period under review, there were no significant changes in the state of affairs of the Fund or circumstances that would materially affect the interest of Unitholders up to the date of this Manager’s report.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 7 IV. MARKET REVIEW

During the period in review, the MSCI AC Asia Pacific ex Japan Index rose 20.4% (in RM terms). The best performing markets were Taiwan and Korea while the laggards were Philippines and China. In the local market, the FTSE Bursa Malaysia KLCI rose 9.2%. Small caps outperformed as the FTSE Bursa Malaysia Small Cap Index rose 33.4%.

The fourth quarter of 2020 had a rocky start as the resurgence of COVID-19 in Europe and the United States (US) started to accelerate at a worrying pace. There were also concerns about the possibility of a contentious US election. However, all the concerns quickly dissipated in November following a slew of positive news on the COVID-19 vaccines and a convincing US election results. Despite infection rates hitting new highs in various countries around the world, investors appeared to be in a hurry to deploy cash into equities with the assumption that the pandemic is likely to be successfully contained as the vaccines are being rolled out globally.

The global market carried much of the positive momentum over to 2021. The technology sector led the rally in the early part of the first quarter, but took a breather following a rise in treasury yields due to concerns about rising inflation and the prospects of an earlier than expected US Federal Reserve tightening cycle. However, the market rally resumed with gusto in March as the number of COVID-19 cases continued to decline rapidly in the US and Europe, along with the rise in the number of people getting vaccinated.

The local market ended higher during the fourth quarter of 2020 along with other regional markets. Risk-on sentiment from the positive vaccine development spilled over to the local market as foreign investors started taking an interest in emerging market laggards. Investors’ sentiment also received a boost as the 2021 Budget was successfully passed towards the end of the year.

It was a subdued start to the year of 2021 for the local market as the FTSE BM KLCI was pretty much one of the last few off the blocks among regional peers. From a technical perspective, the index was dragged down by the glove sector. Local investor sentiment was dampened by the stubbornly high number of COVID-19 cases, resulting in the imposition of Movement Control Order (MCO) 2.0.

8 HONG LEONG ASIA-PACIFIC DIVIDEND FUND V. FUTURE PROSPECTS AND PROPOSED STRATEGIES

The global economy is showing clear signs that it is firmly on the recovery path. However, the pace of recovery has been extremely divergent among various countries and region and the economic gap is growing. In particular, many ASEAN countries are seeing a bigger resurgence in COVID-19 cases and experiencing a shortage of vaccine supplies whilst developed countries such as the US and Europe appear to have successfully contained the pandemic through the rapid rollout of vaccines. Notwithstanding the uneven economic recovery, we expect the developed markets to lead the global economic growth due to accommodative monetary policies and generous government fiscal stimuli.

We are cautiously optimistic on the local market outlook. The recent lockdowns that have been imposed in the beginning of the year have not been able to reduce the number of cases meaningfully and the persistently high number of cases in the country is expected to dampen domestic demand recovery. Fortunately, the encouraging external demand outlook is expected to benefit the export sector and this is expected to drive most of the economic growth for the year. We would take the opportunity to accumulate should stocks decline to attractive valuations.

We like sectors that are expected to benefit from the ongoing global economic recovery, particular the export sector which is seen as the biggest beneficiary from a developed economy-led recovery. We also remain invested in companies that will benefit from the rising domestic demand growth in Asia.

VI. SOFT COMMISSIONS

The Manager has received soft commissions from brokers/dealers in the form of goods and services such as research materials, data and quotation services incidental to investment management of the Fund and investment related publications. Such soft commissions received are of demonstrable benefit to Unitholders.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 9 STATEMENT BY THE MANAGER

I, Hoo See Kheng, as the Director of Hong Leong Asset Management Bhd, do hereby state that, in the opinion of the Manager, the accompanying unaudited condensed financial statements set out on pages 12 to 47 are drawn up in accordance with the provision of the Deeds and give a true and fair view of the financial position of the Fund as at 30 April 2021 and of its financial performance, changes in equity and cash flows for the financial period ended 30 April 2021 in accordance with the Malaysian Financial Reporting Standards (“MFRS”) 134 “Interim Financial Reporting” and International Financial Reporting Standards (“IFRS”) 34 “Interim Financial Reporting”.

For and on behalf of the Manager, Hong Leong Asset Management Bhd (Company No.: 199401033034 (318717-M))

HOO SEE KHENG Chief Executive Officer/Executive Director

Kuala Lumpur 15 June 2021

10 HONG LEONG ASIA-PACIFIC DIVIDEND FUND TRUSTEE’S REPORT TO THE UNIT HOLDERS OF HONG LEONG ASIA-PACIFIC DIVIDEND FUND

We have acted as the Trustee for Hong Leong Asia-Pacific Dividend Fund (the “Fund”) for the financial period ended 30 April 2021. To the best of our knowledge, for the financial period under review, Hong Leong Asset Management 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) valuation and pricing for the Fund is carried out in accordance with the Deed(s) of the Fund and any regulatory requirements; and

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

We are of the view that the distribution made during the financial period ended 30 April 2021 by the Manager is not inconsistent with the objectives of the Fund.

For Deutsche Trustees Malaysia Berhad

Ng Hon Leong Gerard Ang Head, Trustee Operations Chief Executive Officer

Kuala Lumpur 15 June 2021

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 11 CONDENSED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) FOR THE FINANCIAL PERIOD ENDED 30 APRIL 2021

2021 2020 Note RM RM

INVESTMENT INCOME/(LOSS) Interest income from financial assets measured at amortised cost 24,779 18,284 Dividend income 813,671 144,728 Net gain/(loss) on financial assets at fair value through profit or loss (“FVTPL”) 8 17,170,749 (357,302) Net loss on derivatives 9 (419,617) (418,487) Net foreign currency exchange (loss)/gain (255,954) 91,713 17,333,628 (521,064)

EXPENDITURE Management fee 4 (529,038) (181,813) Trustee’s fee 5 (23,059) (8,485) Auditors’ remuneration (4,811) (4,823) Tax agent’s fee (1,289) (1,642) Custodian fees (11,564) (4,256) Transaction costs (603,970) (124,224) Other expenses (101,882) (6,387) (1,275,613) (331,630)

PROFIT/(LOSS) BEFORE TAXATION 16,058,015 (852,694) Taxation 6 - - PROFIT/(LOSS) AFTER TAXATION AND TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE FINANCIAL PERIOD 16,058,015 (852,694)

Profit/(loss) after taxation is made up as follows: Realised amount (4,002,844) 2,463,633 Unrealised amount 20,060,859 (3,316,327) 16,058,015 (852,694)

Distribution for the financial period: Net distribution 7 1,590,054 254,430 Net distribution per unit (sen) 7 2.0000 0.5000 Gross distribution per unit (sen) 7 2.0000 0.5000

The accompanying notes to the financial statements form an integral part of these unaudited condensed financial statements.

12 HONG LEONG ASIA-PACIFIC DIVIDEND FUND CONDENSED STATEMENT OF FINANCIAL POSITION (Unaudited) AS AT 30 APRIL 2021

30.04.2021 31.10.2020 Note RM RM

ASSETS Cash and cash equivalents 12,204,221 1,553,227 Amount due from brokers/dealers - 176,986 Amount due from the Manager -creation of units 1,978,983 299,888 Dividends receivable 360,359 70,416 Financial assets at fair value through profit or loss (“FVTPL”) 8 97,404,257 32,703,699 TOTAL ASSETS 111,947,820 34,804,216

LIABILITIES Amount due to brokers/dealers - 293,435 Amount due to the Manager -cancellation of units 431,855 - -management fee 163,907 42,871 -expenses - 157 Amount due to the Trustee 6,020 2,001 Derivatives 9 242,829 8,993 Other payables and accruals 15,021 13,598 TOTAL LIABILITIES 859,632 361,055

NET ASSET VALUE OF THE FUND 111,088,188 34,443,161

EQUITY Unit holders’ capital 87,227,080 25,488,111 Retained earnings 23,861,108 8,955,050 NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS 111,088,188 34,443,161

UNITS IN CIRCULATION (UNITS) 10 150,864,636 60,483,297

NET ASSET VALUE PER UNIT (RM) 0.7363 0.5695

The accompanying notes to the financial statements form an integral part of these unaudited condensed financial statements.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 13 CONDENSED STATEMENT OF CHANGES IN EQUITY (Unaudited) FOR THE FINANCIAL PERIOD ENDED 30 APRIL 2021

Unit holders’ Retained capital earnings Total Note RM RM RM

Balance as at 1 November 2020 25,488,111 8,955,050 34,443,161 Movement in net asset value: Creation of units from applications 71,422,099 - 71,422,099 Creation of units from distribution 782,298 - 782,298 Cancellation of units (10,027,331) - (10,027,331) Total comprehensive income for the financial period - 16,058,015 16,058,015 Distribution for the financial period 7 (438,097) (1,151,957) (1,590,054) Balance as at 30 April 2021 87,227,080 23,861,108 111,088,188

Balance as at 1 November 2019 18,906,647 5,771,525 24,678,172 Movement in net asset value: Creation of units from applications 7,198,810 - 7,198,810 Creation of units from distribution 61,046 - 61,046 Cancellation of units (9,944,048) - (9,944,048) Total comprehensive loss for the financial period - (852,694) (852,694) Distribution for the financial period 7 - (254,430) (254,430) Balance as at 30 April 2020 16,222,455 4,664,401 20,886,856

The accompanying notes to the financial statements form an integral part of these unaudited condensed financial statements.

14 HONG LEONG ASIA-PACIFIC DIVIDEND FUND CONDENSED STATEMENT OF CASH FLOWS (Unaudited) FOR THE FINANCIAL PERIOD ENDED 30 APRIL 2021

2021 2020 RM RM

CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from sales of financial assets at FVTPL 75,984,051 22,688,451 Purchase of financial assets at FVTPL (124,234,278) (18,486,533) Realised loss on derivatives (185,781) (506,363) Realised foreign exchange differences arising from operating activities (228,725) 55,786 Interest income received from financial assets measured at amortised cost 24,779 18,284 Dividend income received 440,684 124,554 Management fee paid (408,002) (190,235) Trustee’s fee paid (19,040) (8,878) Payment for other fees and expenses (32,104) (25,362) Net cash (used in)/generated from operating activities (48,658,416) 3,669,704

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from creation of units 69,743,004 7,198,810 Payments for cancellation of units (9,595,476) (9,946,101) Payment for distribution (807,756) (193,384) Net cash generated from/(used in) financing activities 59,339,772 (2,940,675)

NET INCREASE IN CASH AND CASH EQUIVALENTS 10,681,356 729,029 EFFECTS OF FOREIGN EXCHANGE RATE CHANGES (30,362) 44,159 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD 1,553,227 1,753,625 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL PERIOD 12,204,221 2,526,813

The accompanying notes to the financial statements form an integral part of these unaudited condensed financial statements.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 15 NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Unaudited) FOR THE FINANCIAL PERIOD ENDED 30 APRIL 2021

1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES

Hong Leong Asia-Pacific Dividend Fund (“the Fund”) was constituted pursuant to the execution of a Deed dated 27 January 2006 and Supplemental Deed dated 30 April 2010 between the Manager, Hong Leong Asset Management Bhd and HSBC (Malaysia) Trustee Berhad for the unit holders of the Fund. HSBC (Malaysia) Trustee Berhad has been replaced with Deutsche Trustees Malaysia Berhad (“the Trustee”) effective 1 November 2012 and Supplemental Master Deeds were entered into between the Manager and the Trustee for the unit holders of the Fund on 21 September 2012 and 25 March 2015 to effect the change (“the Deeds”).

The Fund aims to provide investors with steady recurring income that is potentially higher than the average fixed deposit rates. At the same time, the Fund also attempts to attain Medium-To-Long Term capital gains from investing in high quality dividend yielding equities.

The Fund will invest a minimum 70% of its net asset value into equities and equity-related securities which include common stock and depository receipts of companies in the Asia-Pacific ex Japan region. The Fund may invest in ETFs and REITs. A maximum 30% of its net asset value may be invested into fixed income instruments which include fixed income securities, money market instruments and deposits. The Fund’s investments may include derivatives which include futures, options, forward contracts and warrants to gain exposure to equities in the Asia-Pacific ex Japan region and in fixed income instruments. The Fund commenced operations on 28 February 2006 and will continue its operations until terminated as provided under Part 12 of the Deed.

The Manager of the Fund is Hong Leong Asset Management Bhd, a company incorporated in Malaysia. The principal activity of the Manager is the management of unit trust funds and private investment mandates. Its holding company is Hong Leong Capital Berhad, a company incorporated in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad.

The financial statements were authorised for issue by the Manager on 15 June 2021.

16 HONG LEONG ASIA-PACIFIC DIVIDEND FUND 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements:

(a) Basis of preparation

The condensed financial statements are unaudited and have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRS”) 134 “Interim Financial Reporting” and International Financial Reporting Standards (“IFRS”) 34 “Interim Financial Reporting”.

The condensed financial statements should be read in conjunction with the audited financial statements of the Fund for the financial year ended 31 October 2020 which have been prepared in accordance with the provisions of the Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”).

(i) Amendments to published standard and interpretations that are effective and relevant.

The Fund has applied the following amendments and interpretations for the first time for the financial period beginning 1 November 2020:

• Amendments to the definition of material (Amendments to MFRS 101 and MFRS 108) effective 1 January 2020.

The amendments clarify the definition of materiality and use a consistent definition throughout MFRSs and the Conceptual Framework for Financial Reporting.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 17 The definition of ‘material’ has been revised as “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.”

The amendments also:

- clarify that an entity assess materiality in the context of the financial statements as a whole. - explain the concept of obscuring information in the new definition. Information is obscured if it have the effect similar as omitting or misstating of that information. For example, material transaction is scattered throughout the financial statements, dissimilar items are inappropriately aggregated, or material information is hidden by immaterial information. - clarify the meaning of ‘primary users of general purpose financial statements’ to whom those financial statements are directed, by defining them as ‘existing and potential investors, lenders and other creditors’ that must rely on general purpose financial statements for much of the financial information they need.

• The Conceptual Framework for Financial Reporting (“Framework”) effective 1 January 2020.

The Framework was revised with the primary purpose to assist the International Accounting Standards Board (“IASB”) to develop IFRS that are based on consistent concepts and enable preparers to develop consistent accounting policies where an issue is not addressed by an IFRS. The Framework is not an IFRS, and does not override any IFRSs.

18 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Key changes include:

- Objective of general purpose financial reporting - clarification that the objective of financial reporting is to provide useful information to the users of financial statements for resource allocation decisions and assessment of management’s stewardship. - Qualitative characteristics of useful financial information - reinstatement of the concepts of prudence when making judgment of uncertain conditions and “substance over form” concept to ensure faithful representation of economic phenomenon. - Clarification on reporting entity for financial reporting - introduction of new definition of a reporting entity, which might be a legal entity or a portion of a legal entity. - Elements of financial statements - the definitions of an asset and a liability have been refined. Guidance in determining unit of account for assets and liabilities have been added, by considering the nature of executory contracts and substance of contracts. - Recognition and derecognition - the probability threshold for asset or liability recognition has been removed. New guidance on de-recognition of asset and liability have been added. - Measurement - explanation of factors to consider when selecting a measurement basis have been provided. - Presentation and disclosure - clarification that statement of comprehensive income is the primary source of information about an entity’s financial performance for a reporting period. In principle, recycling of income/expense included in other comprehensive income to profit or loss is required if this results in more relevant information or a more faithful representation of profit or loss.

The adoption of the amendments to published standards and revised Framework did not have any impact on the current period or any prior period and is not likely to affect future periods.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 19 (ii) Standards, amendments and interpretations that have been issued but not yet effective and have not been early adopted.

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 November 2020, and have not been early adopted in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the Fund.

(b) Financial assets and financial liabilities

Classification

The Fund classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income (‘OCI’) or through profit or loss), and • those to be measured at amortised cost.

The Fund classifies its investments based on both the Fund’s business model for managing those financial assets and the contractual cash flows characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The Fund is primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The Fund has not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. The contractual cash flows of the Fund’s debt securities are solely principal and interest, however, these securities are neither held for the purpose of collecting contractual cash flows nor held both for collecting contractual cash flows and for sale. The collection of contractual cash flows is only incidental to achieving the Fund’s business model’s objective. Consequently, all investments are measured at fair value through profit or loss.

20 HONG LEONG ASIA-PACIFIC DIVIDEND FUND The Fund classifies cash and cash equivalents, amount due from brokers/dealers, amount due from the Manager and dividends receivable as financial assets at amortised cost as these financial assets are held to collect contractual cash flows consisting of the amount outstanding.

The Fund classifies amount due to brokers/dealers, amounts due to the Manager, amount due to the Trustee and other payables and accruals as financial liabilities measured at amortised cost.

Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the Fund commits to purchase or sell the asset. Investments are initially recognised at fair value. Transaction costs are expensed in the statement of comprehensive income.

Financial liabilities, within the scope of MFRS 9 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 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 including the effects of currency translation are presented in the statement of comprehensive income within net gain or loss on financial assets at fair value through profit or loss in the period which they arise.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 21 Dividend income from financial assets at fair value through profit or loss is recognised in the statement of comprehensive income as part of dividend income when the Fund’s right to receive payments is established.

Local quoted investments are valued at the last done market prices quoted on Bursa Malaysia Securities Berhad (“Bursa Securities”) at the date of the statement of financial position.

Foreign quoted investments are valued at the last traded market prices quoted on the respective foreign stock exchanges at the close of the business day of the respective foreign stock exchanges.

If a valuation based on the market price does not represent the fair value of the quoted investments, 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 securities for a period exceeding 14 days, or such shorter period as agreed by the Trustee, then the quoted securities are valued as determined in good faith by the Manager, based on the methods or bases approved by the Trustee after appropriate technical consultation.

Deposits with licensed financial institutions are stated at cost plus accrued interest calculated on the effective interest rate method over the period from the date of placement to the date of maturity of the respective deposits, which is a close estimate of their fair value due to the short term nature of the deposits. Financial assets at amortised cost and other financial liabilities are subsequently carried at amortised cost using the effective interest rate method.

22 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Impairment

The Fund measures credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management considers both historical analysis and forward looking information in determining any expected credit loss. Management considers the probability of default to be closed to zero as these instruments have a low risk of default and the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised based on 12 months expected credit losses as any such impairment would be wholly insignificant to the Fund.

Significant increase in credit risk

A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days past due.

Definition of default and credit-impaired financial assets

Any contractual payment which is more than 90 days past due is considered credit impaired.

Write-off

The Fund writes off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and has concluded there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery is based on unavailability of obligor’s sources of income or assets to generate sufficient future cash flows to pay the amount. The Fund may write-off financial assets that are still subject to enforcement activity. Subsequent recoveries of amounts previously written off will result in impairment gains. There are no write-offs/recoveries during the financial period.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 23 (c) Foreign currency

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.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in other comprehensive income as qualifying cash flow hedges.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.

(d) Income recognition

Dividend income is recognised on the ex-dividend date when the Fund’s right to receive payment is established.

Interest income from deposits with licensed financial institutions and auto-sweep facility bank account are recognised on the effective interest rate method on an accrual basis.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).

24 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Realised gain or loss on disposal of quoted investments is accounted for as the difference between the net disposal proceeds and the carrying amount of quoted investments determined on a weighted average cost basis.

(e) Cash and cash equivalents

For the purpose of statement of cash flows, cash and cash equivalents comprise cash at banks and deposits held in highly liquid investments that are readily convertible to known amounts of cash with an original maturity of three months or lesser which are subject to an insignificant risk of changes in value.

(f) Amount due from/to brokers/dealers

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

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 25 (g) Taxation

Current tax expense is determined according to Malaysian tax laws at the prevailing tax rate based on the taxable profit earned during the financial period. Withholding taxes on investment income from foreign investments are based on the tax regime of the respective countries that the Fund invests in. Such withholding taxes are not “income tax” in nature and are recognised and measured based on the requirements of MFRS 137. There are presented within other expenses line in the statement of comprehensive income.

(h) Distributions

A distribution to the Fund’s unit holders is accounted for as a deduction from realised reserve. A proposed distribution is recognised as a liability in the financial period in which it is approved by the Board of Directors of the Manager.

(i) 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 and brokers/dealers. Transaction costs, when incurred, are immediately recognised in the statement of comprehensive income as expenses.

(j) Unit holders’ capital

The unit holders’ contributions to the Fund meet the criteria to be classified as equity instruments under MFRS 132 “Financial Instruments: Presentation”. Those criteria include:

• the units entitle the unit holder to a proportionate share of the Fund’s net asset value; • the units are the most subordinated class and class features are identical; • there is no contractual obligations to deliver cash or another financial asset other than the obligation on the Fund to repurchase the units; and

26 HONG LEONG ASIA-PACIFIC DIVIDEND FUND • the total expected cash flows from the units over its life are based substantially on the profit or loss and change in the net asset value of the Fund.

The outstanding units are carried at the redemption amount that is payable at the date of the statement of financial position if unit holder exercises the right to put the unit back to the Fund.

Units are created and cancelled at prices based on the Fund’s net asset value per unit at the time of creation and cancellation. The Fund’s net asset value per unit is calculated by dividing the net assets attributable to unit holders with the total number of outstanding units.

(k) Derivatives

A derivative is any contract that gives rise to a financial asset/ liability of the Fund and a financial liability/asset or equity instrument of another enterprise.

A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially favorable, or an equity instrument of another enterprise.

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavorable.

The Fund’s derivatives comprise unquoted forward currency contracts. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and is subsequently re-measured at their fair value.

The fair value of forward foreign currency contracts is determined using forward exchange rates at the date of statements of financial position with the resulting value discounted back to present value.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 27 The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and the nature of the item being hedged. Derivatives that do not qualify for hegde accounting are classified as held for trading and accounted for in accordance wih the accounting policy set out in Note 2(b).

(l) Fair value of financial instruments

Financial instruments comprise financial assets and financial liabilities. Fair value is 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. The information presented herein represents the estimates of fair values as at the date of the statement of financial position.

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at either fair value or at amortised cost based on the respective classification.

The following table analyses the financial assets and financial liabilities of the Fund in the statement of financial position as at the reporting date:

Financial Financial assets/ assets/ liabilities liabilities at at FVTPL amortised cost Total RM RM RM

30.04.2021 Financial assets Cash and cash equivalents - 12,204,221 12,204,221 Amount due from the Manager -creation of units - 1,978,983 1,978,983 Dividends receivable - 360,359 360,359 Financial assets at FVTPL (Note 8) 97,404,257 - 97,404,257 97,404,257 14,543,563 111,947,820

Financial liabilities Amount due to the Manager -cancellation of units - 431,855 431,855 -management fee - 163,907 163,907 Amount due to the Trustee - 6,020 6,020 Derivatives (Note 9) 242,829 - 242,829 Other payables and accruals - 15,021 15,021 242,829 616,803 859,632

28 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Financial Financial assets/ assets/ liabilities liabilities at at FVTPL amortised cost Total RM RM RM

31.10.2020 Financial assets Cash and cash equivalents - 1,553,227 1,553,227 Amount due from brokers/dealers - 176,986 176,986 Amount due from the Manager -creation of units - 299,888 299,888 Dividends receivable - 70,416 70,416 Financial assets at FVTPL (Note 8) 32,703,699 - 32,703,699 32,703,699 2,100,517 34,804,216

Financial liabilities Amount due to brokers/dealers - 293,435 293,435 Amount due to the Manager -management fee - 42,871 42,871 -expenses - 157 157 Amount due to the Trustee - 2,001 2,001 Derivatives (Note 9) 8,993 - 8,993 Other payables and accruals - 13,598 13,598 8,993 352,062 361,055

All liabilities except derivatives are financial liabilities which are carried at amortised cost.

(m) Critical accounting estimates and judgments 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 Funds’ 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.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 29 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 Securities Commission Malaysia’s Guidelines on Unit Trust Funds.

However, the Manager is of the opinion that there are no accounting policies which require significant judgment to be exercised.

3. FAIR VALUE ESTIMATION

The fair value of financial assets traded in active markets (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of trading on the reporting 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.

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis.

The fair value of financial assets that are not traded in an active market is determined by using valuation techniques. The Fund uses a variety of methods and makes assumptions that are based on market conditions existing at each period end date. Valuation techniques used for non- standardised financial instruments such as options, currency swaps and other over-the-counter derivatives, include the use of comparable recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on entity-specific inputs.

30 HONG LEONG ASIA-PACIFIC DIVIDEND FUND For instruments for which there is no active market, the Fund may use internally developed models, which are usually based on valuation methods and techniques generally recognised as standard within the industry. Valuation models are used primarily to value unlisted equity, debt securities and other debt instruments for which market were or have been inactive during the financial period. Some of the inputs to these models may not be market observable and are therefore estimated based on assumptions.

The output of a model is always an estimate or approximation of a value that cannot be determined with certainty and valuation techniques employed may not fully reflect all factors relevant to the positions the Fund holds. Valuations are therefore adjusted, where appropriate, to allow for additional factors including model risk, liquidity risk and counter party risk.

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 on-going basis.

(i) Fair value hierarchy

The table below analyses financial instruments carried at fair value. The different levels have been defined as follows:

• Quoted prices (unadjusted) in active market for identical assets or liabilities (Level 1); • 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 2); and • Inputs for the asset and liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 31 The level in the fair value hierarchy within which the fair value measurement is categorised in its entirely is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirely. For this purpose, the significance of an input is assessed against the fair value measurement in its entirely. If a fair value measurement uses observable inputs that requires 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 entirely 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.

The following table analyses within the fair value hierarchy of the Fund’s financial assets and liabilities (by class) measured at fair value:

Level 1 Level 2 Level 3 Total RM RM RM RM

30.04.2021 Financial assets at FVTPL: - Quoted equity securities - local 35,725,500 - - 35,725,500 - Quoted equity securities - foreign 61,678,757 - - 61,678,757 97,404,257 - - 97,404,257

Financial liabilities: - Derivatives - (242,829) - (242,829)

32 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Level 1 Level 2 Level 3 Total RM RM RM RM

31.10.2020 Financial assets at FVTPL: - Quoted equity securities - local 17,590,700 - - 17,590,700 - Quoted equity securities - foreign 15,112,999 - - 15,112,999 32,703,699 - - 32,703,699

Financial liabilities: - Derivatives - (8,993) - (8,993)

Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed equities. The Fund does not adjust the quoted prices for this instrument. The Fund’s policies on valuation of these financial assets are stated in Note 2(b).

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. This include derivatives. As Level 2 instruments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. The Fund’s policies on valuation of these financial liabilities are stated in Note 2(b).

(ii) The carrying values of financial assets (other than financial assets at FVTPL) and financial liabilities (other than derivatives) are a reasonable approximation of their fair values due to their short term nature.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 33 4. MANAGEMENT FEE

In accordance with Division 13.1 of the Deed, the Manager is entitled to a management fee of up to 2.00% per annum calculated daily based on the net asset value of the Fund.

For the financial period ended 30 April 2021, the management fee is recognised at a rate of 1.50% per annum until 6 April 2021. With effect from 7 April 2021, the management fee rate has been revised to 2.00% (2020: 1.50%) per annum.

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

5. TRUSTEE’S FEE

In accordance with Division 13.2 of the Deed, the Trustee is entitled to a fee not exceeding 0.20% subject to a minimum of RM18,000 per annum calculated daily based on the net asset value of the Fund.

For the financial period ended 30 April 2021, the Trustee’s fee is recognised at a rate of 0.07% (2020: 0.07%) per annum.

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

6. TAXATION

2021 2020 RM RM

Tax charge for the financial period: Current taxation - -

34 HONG LEONG ASIA-PACIFIC DIVIDEND FUND The numerical reconciliation between profit/(loss) before taxation multiplied by the Malaysian statutory income tax rate and tax expense of the Fund is as follows:

2021 2020 RM RM

Profit/(loss) before taxation 16,058,015 (852,694)

Taxation at Malaysian statutory rate of 24% (2020: 24%) 3,853,924 (204,647)

Tax effects of: (Investment income not subject to tax)/ investment loss disallowed from tax (4,160,071) 125,055 Expenses not deductible for tax purposes 175,824 34,178 Restriction on tax deductible expenses for unit trust fund 130,323 45,414 Taxation - -

7. DISTRIBUTION

2021 2020 RM RM

Prior financial years’ realised income 1,151,957 143,608 Current financial period’s realised income - 110,822 Distribution equalisation 438,097 - Net distribution amount 1,590,054 254,430

Date of Declaration

Distribution on 19/21 January Gross/net distribution per unit (sen) 2.0000 0.5000

Net distribution above is sourced from prior financial years’ and current financial period’s realised income. Gross distribution is derived using total income less total expenses.

Gross distribution per unit is derived from net realised income less expenses divided by units in circulation, while net distribution per unit is derived from net realised income less expenses and taxation divided by units in circulation.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 35 Distribution equalisation represents the average amount of distributable income included in the creation and cancellation of units. It is computed as at each date of creation and cancellation of units. For the purpose of determining amount available for distribution, distribution equalisation is included in the computation of distribution available for unit holders.

The above distribution has been proposed before taking into account the unrealised gain of RM20,060,859 (2020: unrealised loss of RM3,316,327) which is carried forward to the next financial period.

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (“FVTPL”)

30.04.2021 31.10.2020 RM RM

Financial assets at FVTPL: Quoted equity securities - local 35,725,500 17,590,700 Quoted equity securities - foreign 61,678,757 15,112,999 97,404,257 32,703,699

2021 2020 RM RM

Net gain/(loss) on financial assets at FVTPL: Realised (loss)/gain on disposals (3,151,175) 3,082,585 Changes in unrealised fair values 20,321,924 (3,439,887) 17,170,749 (357,302)

36 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Financial assets at FVTPL as at 30 April 2021 are as detailed below:

Percentage Aggregate Fair of net asset Quantity cost value value units RM RM %

QUOTED EQUITY SECURITIES - LOCAL

Main Market Energy Bumi Armada Berhad 4,500,000 877,500 1,845,000 1.66 Wah Seong Corporation Berhad 2,250,000 1,932,075 1,867,500 1.68 6,750,000 2,809,575 3,712,500 3.34

Consumer Products & Services Lee Swee Kiat Group Berhad 3,200,000 2,720,732 3,040,000 2.74

Industrial Products & Services Freight Management Holdings Bhd 2,200,000 2,305,230 3,674,000 3.31 Hiap Teck Venture Berhad 8,800,000 3,945,360 5,588,000 5.03 Pantech Group Holdings Berhad 8,200,000 3,556,500 4,387,000 3.95 Press Metal Aluminium Holdings Berhad 440,000 1,265,660 2,288,000 2.06 Samchem Holdings Berhad 1,030,000 1,021,879 1,915,800 1.72 20,670,000 12,094,629 17,852,800 16.07

Technology D&O Green Technologies Berhad 1,600,000 1,650,720 7,504,000 6.75

ACE Market Consumer Products & Services Focus Point Holdings Berhad 4,410,000 1,614,844 3,616,200 3.26

TOTAL QUOTED EQUITY SECURITIES - LOCAL 36,630,000 20,890,500 35,725,500 32.16

QUOTED EQUITY SECURITIES - FOREIGN

Hong Kong

Consumer, cyclical Chow Tai Fook Jewellery Group Limited 880,000 5,196,985 5,805,619 5.22

Financials Shimao Services Holdings Limited 700,000 6,320,512 7,439,054 6.70

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 37 Percentage Aggregate Fair of net asset Quantity cost value value units RM RM %

Industrials Sany Heavy Equipment Investments Company Limited 1,200,000 5,590,113 5,953,347 5.36

Materials China Hongqiao Group Limited 990,000 5,672,611 6,406,320 5.77

Real Estate Owners and Developers KWG Living Group Holding Ltd 1,065,000 4,790,406 4,459,960 4.01

Total Hong Kong 4,835,000 27,570,627 30,064,300 27.06

Taiwan

Consumer, cyclical Eclat Textile Company Limited 95,000 6,458,044 7,454,688 6.71 Makalot Insdustrial Co., Ltd. 195,000 6,957,843 6,994,260 6.30 290,000 13,415,887 14,448,948 13.01

Materials Formosa Plastics Corporation 430,000 6,933,191 6,672,912 6.00 Nan Ya Plastics Corporation 480,000 5,741,164 6,197,990 5.58 910,000 12,674,355 12,870,902 11.58

Total Taiwan 1,200,000 26,090,242 27,319,850 24.59

Thailand

Consumer, non-cyclical Rajthanee Hospital Public Company Limited^ 1,040,000 3,778,935 4,294,607 3.87

Total Thailand 1,040,000 3,778,935 4,294,607 3.87

TOTAL QUOTED EQUITY SECURITIES - FOREIGN 7,075,000 57,439,804 61,678,757 55.52

TOTAL INVESTMENTS 43,705,000 78,330,304 97,404,257 87.68

UNREALISED GAIN ON FINANCIAL ASSETS AT FVTPL 19,073,953

TOTAL FAIR VALUE OF FINANCIAL ASSETS AT FVTPL 97,404,257

38 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Financial assets at FVTPL as at 31 October 2020 are as detailed below:

Percentage Aggregate Fair of net asset Quantity cost value value units RM RM %

QUOTED EQUITY SECURITIES - LOCAL

Main Market Consumer Products & Services Guan Chong Berhad 500,000 1,784,950 1,415,000 4.11 Lee Swee Kiat Group Berhad 850,000 525,037 463,250 1.34 Lii Hen Industries Bhd 345,000 1,337,777 1,369,650 3.98 1,695,000 3,647,764 3,247,900 9.43

Energy Bumi Armada Berhad 4,500,000 877,500 990,000 2.87 Coastal Contracts Bhd 890,000 1,048,730 525,100 1.53 5,390,000 1,926,230 1,515,100 4.40

Healthcare Hartalega Holdings Berhad 155,000 2,701,247 2,790,000 8.10 Kossan Rubber Industries Bhd 265,000 1,896,585 1,987,500 5.77 420,000 4,597,832 4,777,500 13.87

Industrial Products & Services Samchem Holdings Berhad 930,000 909,099 976,500 2.84 Techbond Group Berhad 1,060,000 1,422,486 1,293,200 3.75 1,990,000 2,331,585 2,269,700 6.59

Technology D&O Green Technologies Berhad 1,600,000 1,650,720 1,776,000 5.16

ACE Market Consumer Products & Services Focus Point Holdings Berhad 2,940,000 1,614,844 1,690,500 4.91

Industrial Products & Services MTAG Group Berhad 1,300,000 967,330 884,000 2.56

Technology Aemulus Holdings Berhad 2,200,000 1,609,960 1,430,000 4.15

TOTAL QUOTED EQUITY SECURITIES - LOCAL 17,535,000 18,346,265 17,590,700 51.07

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 39 Percentage Aggregate Fair of net asset Quantity cost value value units RM RM %

QUOTED EQUITY SECURITIES - FOREIGN

Hong Kong

Consumer, cyclical Chow Tai Fook Jewellery Group Limited 500,000 2,678,769 2,651,220 7.70

Consumer, non-cyclical Zhou Hei Ya International Holdings Company Limited 590,000 2,806,574 2,376,350 6.90

Industrials Kerry Logistics Network Limited 320,000 2,626,837 2,769,695 8.04

Telecommunications Services Xiaomi Corporation 220,000 2,746,571 2,592,304 7.53

Utilities Network CSC Financial Co., Ltd.* 400,000 1,937,864 2,005,286 5.82

Total Hong Kong 2,030,000 12,796,615 12,394,855 35.99

Taiwan

Industrials Sunonwealth Electric Industry Co., Ltd. 320,000 2,808,790 2,718,144 7.89

Total Taiwan 320,000 2,808,790 2,718,144 7.89

TOTAL QUOTED EQUITY SECURITIES - FOREIGN 2,350,000 15,605,405 15,112,999 43.88

TOTAL INVESTMENTS 19,885,000 33,951,670 32,703,699 94.95

UNREALISED LOSS ON FINANCIAL ASSETS AT FVTPL (1,247,971)

TOTAL FAIR VALUE OF FINANCIAL ASSETS AT FVTPL 32,703,699

* H Shares are shares of the companies incorporated in the Chinese mainland that is listed on the Hong Kong Stock Exchange. These shares are denominated in Hong Kong dollars and trade the same as other equities on the Hong Kong Stock Exchange.

40 HONG LEONG ASIA-PACIFIC DIVIDEND FUND ^ NVDR, non-voting depository receipt, is a trading instrument issued by Thai NVDR Company Limited, a subsidiary wholly owned by the Stock Exchange of Thailand (“SET”). It is a valid security as specified by the United States Securities and Exchange Commision (“SEC”) and is automatically regarded as a listed security by the SET. The underlying security is a listed security in the SET.

9. DERIVATIVES

Derivatives comprise forward currency contracts. The negative fair value represents the unrealised loss on the revaluation of forward currency at the reporting date. The contract or underlying principal amount of the forward currency contracts and the corresponding gross negative fair value at the end of each reporting date is analysed below:

30.04.2021 31.10.2020 RM RM

Derivative liabilities: Forward currency contracts 242,829 8,993

2021 2020 RM RM

Net loss on derivatives: Realised loss on disposals (185,781) (506,363) Changes in unrealised fair values (233,836) 87,876 (419,617) (418,487)

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 41 Contract or underlying Maturity principal *Fair value date amounts RM

30.04.2021 Hong Kong Dollar within 3 months 36,561,000 129,792 Taiwan Dollar within 2 months 2,638,760^ (428,964) Thai Baht within 2 months 15,470,000 (20,111) United States Dollar within 2 months 108,000 3,888 United States Dollar within 2 months 2,638,760 72,566 (242,829)

31.10.2020 Hong Kong Dollar within 1 month 6,906,000 6,215 Taiwan Dollar within 1 month 207,456^ (15,736) United States Dollar within 1 month 207,456 332 United States Dollar within 1 month 28,000 196 (8,993)

^ This is the equivalent US dollar amount used to hedge TWD2,930,079 (31.10.2020: TWD108,375). * Being the difference between the contract price and the market forward price discounted at appropriate discount rates.

As the Fund does not adopt hedge accounting during the financial period, the change in the fair value of the forward currency contracts is recognised immediately in the statement of comprehensive income.

10. UNITS IN CIRCULATION

01.11.2019 01.11.2019 to 30.04.2021 to 31.10.2020 No. of units No. of units

At the beginning of the financial period/year 60,483,297 52,572,178 Add: Creation of units during the financial period/year - Arising from applications 103,692,350 41,167,408 - Arising from distribution 1,161,540 824,637 Less: Cancellation of units during the financial period/year (14,472,551) (34,080,926) At the end of the financial period/year 150,864,636 60,483,297

42 HONG LEONG ASIA-PACIFIC DIVIDEND FUND 11. MANAGEMENT EXPENSE RATIO (“MER”)

2021 2020 % %

MER (annualised) 1.75 1.69

Management expense ratio includes management fee, Trustee’s fee, auditors’ remuneration, tax agent’s fee, custodian fees and other expenses for the financial period divided by the Fund’s average net asset value calculated on a daily basis and is calculated as follows:

MER = (A+B+C+D+E+F) X 100 G

Where; A = Management fee B = Trustee’s fee C = Auditors’ remuneration D = Tax agent’s fee E = Custodian fees F = Other expenses excluding Sales and Service Tax (“SST”) on transaction costs and withholding tax G = Average net asset value of the Fund calculated on a daily basis

The average net asset value of the Fund for the financial period calculated on a daily basis is RM66,769,041 (2020: RM24,359,112).

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 43 12. PORTFOLIO TURNOVER RATIO (“PTR”)

2021 2020 Times Times

PTR 1.52 0.76

PTR is derived from the following calculation:

(Total acquisitions for the financial period + total disposals for the financial period)/ 2 Average net asset value of the Fund for the financial period calculated on a daily basis

Where: total acquisitions for the financial period = RM123,583,400 (2020: RM17,138,870) total disposals for the financial period = RM79,204,766 (2020: RM19,764,173)

13. UNITS HELD BY THE MANAGER AND RELATED PARTIES TRANSACTIONS AND BALANCES

The related parties and their relationships with the Fund are as follows:

Related parties Relationships Hong Leong Asset Management Bhd The Manager Hong Leong Islamic Asset Management Sdn Bhd Subsidiary of the Manager Hong Leong Capital Berhad Holding company of the Manager Hong Leong Financial Group Ultimate holding company of Berhad (“HLFG”) the Manager Subsidiaries and associates of Subsidiaries and associate HLFG as disclosed in its companies of the ultimate financial statements holding company of the Manager

No units were held by the Manager and parties related to the Manager as at 30 April 2021 and 31 October 2020.

44 HONG LEONG ASIA-PACIFIC DIVIDEND FUND In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other related party transactions and balances. The Manager is of the opinion that all transactions with the related companies have been entered into at agreed terms between the related parties.

30.04.2021 31.10.2020 RM RM

Related party balances Cash at bank - Berhad 2,911,892 1,135,142 Derivatives: - Hong Leong Bank Berhad (376,509) (15,404) - Hong Leong Investment Bank Berhad 133,680 6,411 2,669,063 1,126,149

2021 2020 RM RM

Related party transactions Interest income from auto-sweep facility bank account: - Hong Leong Bank Berhad 24,779 18,284

Purchase of quoted equity securities: - Hong Leong Investment Bank Berhad 1,077,873 4,675,802

Disposal of quoted equity securities: - Hong Leong Investment Bank Berhad 3,744,053 5,156,911

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 45 14. TRANSACTIONS WITH BROKERS/DEALERS

Detail of transactions with brokers/dealers are as follows:

Percentage of total Values Percentage Brokerage brokerage of trade of total trade fees fees RM % RM %

2021 Credit Suisse (Hong Kong) Limited 44,399,827 22.22 88,682 19.42 Affin Hwang Investment Bank Berhad 40,343,864 20.20 80,771 17.69 Investment Bank Berhad 27,157,909 13.60 67,869 14.86 Credit Suisse (Taiwan) Limited 19,434,198 9.73 48,541 10.63 CL Securities Taiwan Company Limited 17,116,623 8.57 42,734 9.36 Credit Suisse Securities (Malaysia) Sdn Bhd 10,979,738 5.50 27,418 6.00 CLSA Limited 10,041,637 5.03 25,015 5.48 JPMorgan Securities (Malaysia) Sdn Bhd 7,360,195 3.68 18,394 4.03 Hong Leong Investment Bank Berhad* 4,821,926 2.41 12,078 2.64 Nomura Securities Malaysia Sdn Bhd 4,192,595 2.10 10,451 2.29 Others 13,899,396 6.96 34,686 7.60 199,747,908 100.00 456,639 100.00

46 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Percentage of total Values Percentage Brokerage brokerage of trade of total trade fees fees RM % RM %

2020 Affin Hwang Investment Bank Berhad 16,483,554 41.24 33,260 36.74 Hong Leong Investment Bank Berhad* 9,832,714 24.60 24,588 27.16 Credit Suisse Securities (Malaysia) Sdn Bhd 2,791,626 6.99 6,974 7.70 JPMorgan Securities (Malaysia) Sdn Bhd 1,946,748 4.87 4,859 5.37 CLSA Securities Malaysia Sdn Bhd 1,720,033 4.30 4,303 4.75 DBS Vickers Securities (Singapore) Pte Ltd 1,181,535 2.96 1,772 1.96 Public Investment Bank Berhad 938,721 2.35 2,352 2.60 Maybank Invesment Bank Berhad 886,260 2.22 2,223 2.46 UOB Kay Hian Securities (M) Sdn Bhd 772,827 1.93 1,932 2.13 Credit Suisse AG, Taipei Securities Branch 692,929 1.73 1,728 1.91 Others 2,719,464 6.81 6,536 7.22 39,966,411 100.00 90,527 100.00

* Transactions with brokers/dealers related to the Manager.

The Manager is of the opinion that all transactions with the related companies have been entered into at agreed terms between the related parties.

15. SIGNIFICANT EVENT

The Manager is monitoring closely the worsening of the macro- economic outlook as a result of Covid-19, both domestically and globally, and will be managing the portfolio to achieve the Fund’s objective. At this stage, the impact on the Fund’s performance is limited.

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 47 Performance Data

Financial Period 31/10/20– 30/04/21 %

A (i) Portfolio Compositions: By Sector: Financial Services 6.70 Telecommunications & Media – Consumer Products & Services 28.10 Materials 17. 35 Industrial Products & Services 21.43 Utilities – Information Technology – Energy 3.34 Property – Trading/Services – Technology 6.75 Infrastructure Project Companies – Construction – Special Purpose Acquisition Company – Diversified – Health Care – Transportation & Logistics – Real Estate 4.01 Warrants – Collective Investment Schemes – Deposits & Cash Equivalents 12.32 By Country: Hong Kong 27.06 Malaysia 32.16 Thailand 3.87 Indonesia – Taiwan 24.59 Deposits & Cash Equivalents 12.32 (ii) Total Net Asset Value (ex-distribution) RM111,088,188

(iii) Net Asset Value Per Unit (ex-distribution) RM0.7363 Units in Circulation (ex-distribution) 150,864,636 (iv) Highest/Lowest NAV Per Unit Highest NAV Per Unit RM0.7610 (ex-distribution) Lowest NAV Per Unit RM0.5700

(v) Total Return of the Fund* 33.19% - Capital Growth 29.29% - Income Distribution 3.90%

(vi) Distribution Per Unit Additional Units – Distribution (Gross) 2.0 sen/unit Distribution (Net) 2.0 sen/unit Distribution Date 19/01/2021 Additional Units – Distribution (Gross) – Distribution (Net) – Distribution Date – (vii) Management Expense Ratio (MER) 1.75%

(viii) Portfolio Turnover Ratio (PTR) (times) 1.52#

B. Average Total Return, NAV Per Unit-to-NAV Per Unit basis (as at 30/04/21)* (i) One year 76.89% (ii) Three years 29.61% (iii) Five years 27.70% (iv) Ten years 11.38%

* Source: Lipper For Investment Management (Returns are calculated after adjusting for distributions and/or additional units, if any)

# The PTR decreased by 1.47 times (49.16%) as compared to 2.99 times for the financial year ended 31 October 2020 mainly due to lower level of rebalancing activities undertaken by the Fund and increased by 0.76 times (100%) as compared to 0.76 times for the financial period from 1 November 2019 to 30 April 2020 mainly due to higher level of rebalancing activities undertaken by the Fund.

48 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Financial Year Financial Year Financial Year Financial Year Financial Year 31/10/19– 31/10/18– 31/10/17– 31/10/16– 31/10/15– 31/10/20 31/10/19 31/10/18 31/10/17 31/10/16 % % % % %

– 29.80 21.69 24.21 4.85 7. 53 8.09 – – – 28.94 27.85 2.63 28.68 15.02 – – – 2.76 – 25.08 12.69 12.62 5.48 11.82 5.82 – 3.23 – – – – – 3.79 – 4.40 – 11.54 – 2.04 – – 3.32 3.03 5.21 – – – 2.46 23.38 9. 31 6.81 1.78 4.56 2.73 – – – – 3.56 – 2.46 1.19 3.36 3.69 – – – – 1.98 – – – 3.94 – 13.87 – 5.22 – – – 8.67 – – – – – – – – – – – 0.07 0.22 – – – – 10.42 5.05 3.63 36.78 17.66 15.08

35.99 51.72 10.05 49.92 21.45 51.07 44.65 50.79 16.58 63.41 – – 2.38 10.06 – – – – 5.78 0.06 7.89 – – – – 5.05 3.63 36.78 17.66 15.08 RM34,443,161 RM24,678,172 RM31,850,641 RM25,479,169 RM18,428,192 RM0.5695 RM0.4694 RM0.4215 RM0.4673 RM0.3975 60,483,297 52,572,178 75,570,182 54,528,795 46,364,207 RM0.6628 RM0.4694 RM0.4818 RM0.4774 RM0.4047 RM0.3702 RM0.3827 RM0.4146 RM0.3857 RM0.3540 32.56% 13.82% -7.80% 18.85% 5.97% 21.33% 11.36% -9.80% 17.56% 5.97% 11.23% 2.46% 2.00% 1.29% – – – – – – 0.5 sen/unit 0.5 sen/unit 0.5 sen/unit 0.5 sen/unit – 0.5 sen/unit 0.5 sen/unit 0.5 sen/unit 0.5 sen/unit – 21/01/2020 23/01/2019 17/01/2018 18/07/2017 – – – – – – 5.0 sen/unit 0.4 sen/unit 0.5 sen/unit – – 5.0 sen/unit 0.4 sen/unit 0.5 sen/unit – – 21/07/2020 16/07/2019 17/07/2018 – – 1.74% 1.71% 1.77% 1.96% 1.89% 2.99 2.46 2.17 2.51 1.68

HONG LEONG ASIA-PACIFIC DIVIDEND FUND 49 Corporate Information

Manager Hong Leong Asset Management Bhd [199401033034 (318717-M)]

Registered Office Level 30, Menara Hong Leong No. 6, Jalan Damanlela Bukit Damansara 50490 Kuala Lumpur

Business Office Level 18, Block B, Plaza Zurich No. 12, Jalan Gelenggang Bukit Damansara 50490 Kuala Lumpur

Board of Directors Mr. Chew Seong Aun Mr. Hoo See Kheng Dato’ Abdul Majit Bin Ahmad Khan Tunku Dato’ Mahmood Fawzy Bin Tunku Muhiyiddin

Executive Director / Chief Executive Officer Mr. Hoo See Kheng

Trustee Deutsche Trustees Malaysia Berhad [200701005591 (763590-H)]

Agents Hong Leong Bank Berhad (97141-X) Standard Chartered Bank Malaysia Berhad (115793-P) (Malaysia) Berhad (271809-K) Affin Bank Berhad (25046-T) HSBC Bank (Malaysia) Berhad (127776-V) CIMB Private Banking (18417-M) Malayan Banking Berhad (3813-K) Areca Capital Sdn Bhd (740840-D) Registered Independent Tied Agents with FiMM

50 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Corporate Directory

Head Office Level 18, Block B, Plaza Zurich No. 12, Jalan Gelenggang Bukit Damansara 50490 Kuala Lumpur Tel: 03-2081 8600 Fax: 03-2081 8500 Website: www.hlam.com.my E-mail: [email protected]

Pulau Pinang No. 441-1-3 Pulau Tikus Plaza, Jalan Burmah 10350 Pulau Tikus, Pulau Pinang Tel: 04-2288 112, 04-2289 112 Fax: 04-2283 112

Ipoh 2nd Floor, Lot 3, Persiaran Greentown 4 Greentown Business Centre 30450 Ipoh, Perak Tel: 05-2558 388, 05-2559 388, 05-2534 388 Fax: 05-2558 389

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54 HONG LEONG ASIA-PACIFIC DIVIDEND FUND Hong Leong Asset Management Bhd (318717-M) www.hlam.com.my