United Income Plus Fund

Interim Report 31 January 2021

UNITED INCOME PLUS FUND

Unaudited Interim Report and Financial Statements For the Financial Period Ended 31 January 2021

TABLE OF CONTENTS PAGE NO

(A) MANAGER’S REPORT 2

(B) TRUSTEE’S REPORT 10

(D) FINANCIAL STATEMENTS

UNAUDITED STATEMENT OF FINANCIAL POSITION 12

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME 13

UNAUDITED STATEMENT OF CHANGES IN NET ASSET VALUE 15

UNAUDITED STATEMENT OF CASH FLOWS 16

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 18

(E) CORPORATE INFORMATION 48

1 (A) MANAGER’S REPORT

Dear Unitholders,

We are pleased to present you the Manager’s report and the unaudited accounts of United Income Plus Fund (the “Fund”) for the financial period from 1 August 2020 to 31 January 2021.

(1) Key Data of the Fund

1.1 Fund name United Income Plus Fund (the "Fund") 1.2 Fund category Fixed Income 1.3 Fund type Income & Growth 1.4 Investment The Fund seeks to provide investors with income and capital appreciation objective over the medium to long term by investing primarily in fixed income securities with the remaining investing in equities and equity-related securities. 1.5 Performance With effect from 13 August 2015, the performance benchmark of the Fund benchmark has been changed as follows: • 70% 12 month fixed deposit rate by Malayan Banking Berhad; (available at www.maybank2u.com.my) • 30% FTSE Bursa Malaysia Kuala Lumpur Composite Index ("FBM KLCI") (available at www.bursamalaysia.com)

Prior to that, the performance benchmark of the Fund was: • 35% Quantshop All MGS Index; (available at www.quantshop.com) • 35% JP Morgan Asia Credit Investment Grade Index; (available at www.jpmorgan.com) • 15% FBM KLCI; and (available at www.bursamalaysia.com) • 15% MSCI AC Asia Pacific ex Japan. (available at www.msci.com) 1.6 Duration The Fund was launched on 9 February 2015 and shall exist for as long as it appears to the Manager and Trustee that it is in the interests of the unit holders for it to continue. In some circumstances, the unit holders can resolve at a meeting to terminate the Fund. 1.7 Distribution policy Subject to the availability of income, distribution will be paid on a quarterly basis. Distribution declared will be automatically reinvested into the Unit Holders’ accounts in the form of additional Units in the Fund at no cost. 1.8 Breakdown of unit As at 31 January 2021 holdings by size Size of holding No. of No. of units held unit holders • 5,000 and below 1 1,181.51 • 5,001 to 10,000 4 36,800.39 • 10,001 to 50,000 6 140,807.09 • 50,001 to 500,000 13 2,069,947.33 • 500,001 and above 9 134,893,266.30 Total 33 137,142,002.62

2 (2) Performance Data of the Fund

2.1 Portfolio Details of portfolio composition of the Fund for the three unaudited composition financial periods are as follows:

Sectors, category of investments As at 31 As at 31 As at 31 Jan & cash holdings Jan Jan 2020 2019 2021 (%) (%) (%) Consumer Products 5.36 4.98 3.05 CIS 13.14 9.23 -- Finance 32.77 28.55 47.32 Industrial Products -- -- 12.21 Technology 6.41 2.61 6.68 Trading/ Services 11.39 12.56 10.77 Telecommunication Services 8.35 6.76 -- Infrastructure 8.27 7.40 11.77 Health Care -- 2.17 -- Construction 1.32 -- 7.43 Properties 2.59 1.49 -- Materials 1.54 -- -- Energy 3.87 -- -- Utilities -- 1.91 -- Cash 4.99 22.34 0.77 Total 100.00 100.00 100.00 2.2 Performance Performance details of the Fund for the three unaudited financial periods details are as follows:

As at As at As at 31 Jan 2021 31 Jan 2020 31 Jan 2019 Net Asset Value 77,755,661 43,323,234 39,834,150 (“NAV”) (RM) NAV per unit (RM) 0.5670 0.5482 0.5104 Units in circulation 137,142,003 79,034,459 78,047,908 Highest NAV per unit 0.5801 0.5522 0.5348 (RM) Lowest NAV per unit 0.5556 0.5437 0.5020 (RM) Total return (%) 2.23 1.23 -0.44 • Capital growth 1.16 -0.29 -2.00 • Income 1.07 1.52 1.66 distribution (%) Gross distribution 0.60 # 0.83 0.80 (sen per unit) Net distribution 0.60 # 0.83 0.80 (sen per unit)

3 2.2 Performance Management expense 0.71 0.73 0.83 details ratio ("MER") (%) (continued) Portfolio turnover ratio 0.72 0.38 0.60 ("PTR") (times) Notes: # Date of distribution is shown in part 2.7 - Income distribution / Unit splits. 1 MER is lower against previous financial period mainly due to increase in average fund size. 2 PTR is higher against previous financial period mainly due to increase in trading activities.

Average total return As at 31 January 2021 (%) (Annualised) Since commencement (2 March 2015) 6.76 1 year 6.81 3 year 5.05 5 year 5.07

Annual total return Financial year ended 31 July The Fund (%) 2020 5.76 2019 10.17 2018 0.28 2017 2.89 2016 10.52 Since commencement (2 March 8.48 2015) - 31 July 2015 Note: Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up. All performance figures have been extracted from Bloomberg. 2.3 Has the Fund The Fund registered a return of 47.31% since commencement, achieved its outperforming the benchmark return of 13.12%. The Fund achieved its investment investment objective of providing investors with income and capital objective? appreciation. The Fund declared an income distribution of 0.60 sen per unit for the financial period under review. 2.4 Performance For the financial period under review, the Fund registered a return of review 2.23%, outperforming the benchmark return of -0.05%. The outperformance was due to stock selection within the equity portion of the portfolio.

For the period under review, the net asset value ("NAV") per unit of the Fund increased by 1.16% from RM 0.5604 to RM 0.5669.

4 2.4 Performance The line chart below shows comparison between the performance of the review Fund and its benchmark from the commencement date of the Fund to 31 (continued) January 2021.

Source: UOBAM(M) as at 31 January 2021.

1-month 3-month 6-month 12-month Since commencement The Fund -0.72% 2.44% 2.23% 6.81% 47.31% Benchmark* -1.01% 2.36% -0.05% 2.17% 13.12% Source: UOBAM(M), Lipper and Bloomberg as at 31 January 2021. * The benchmark of the Fund is 70% 12 month fixed deposit rate by Malayan Banking Berhad (obtainable via www.maybank2u.com.my) and 30% FBM KLCI (obtainable via www.bursamalaysia.com) with effect from 13 August 2015.

* Prior to that, the benchmark of the Fund was 35% Quantshop All MGS Index (obtainable via www.quantshop.com); 35% JP Morgan Asia Credit Investment Grade Index (obtainable via www.jpmorgan.com); 15% FBM KLCI (obtainable via www.bursamalaysia.com) and 15% MSCI AC Asia Pacific ex Japan (obtainable via www.msci.com).

Note: Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up. All performance figures have been extracted from Bloomberg. 2.5 Strategies and Equity policies employed We focused on global market leaders to form the core of the equity holdings. Given the rollout of COVID-19 vaccines, we have shifted some of our exposure to the Asian markets and increased our exposure into the recovery sectors including financials, consumer and commodities. Among the top contributors to the portfolio performance included Mr DIY, Tencent Music and TSMC.

Fixed Income We invested mainly in Ringgit corporate bonds and Asia credits. We favoured Ringgit corporate debts as we expected the market to be supported by demand from local investors due to ample market liquidity and expectations of a prolonged low interest rate environment. In addition, we also invested in Asia credits, especially investment grade issues, that offer relatively attractive yields compared to developed markets.

5 2.6 Asset allocation This table below shows the asset allocation of the Fund for the financial period ended 31 January are as follows:

Assets As at 31 As at 31 Jan Changes Jan 2020 2021 (%) (%) (%) Equities 24.67 19.91 4.76 Fixed income securities 70.34 57.75 12.59 Cash 4.99 22.34 -17.35 Total 100.00 100.00 --

Reason for the differences in asset allocation As at 31 January 2021, the asset allocation of the Fund stood at 24.67% in equities, 70.34% in fixed income securities and 4.99% in cash. The increase in fixed income securities exposure was due to the attractive valuation in the corporate debt segment. 2.7 Income For the financial period under review, the Fund has declared the following distribution/ income distribution: Unit splits Distribution Date Gross/Net Cum - Ex - NAV Distribution NAV per per unit per unit unit (RM) (RM) (RM) 15 October 2020 0.0030 0.5622 0.5592 26 January 2021 0.0030 0.5766 0.5736 Total 0.0060

The Fund did not carry out any unit split exercise during the financial period under view. 2.8 State of affairs There has been neither significant change to the state of affairs of the Fund nor any circumstances that materially affect any interests of the unit holders during the financial period under review. 2.9 Rebates and soft It is our policy to channel all rebates to the Fund. Soft commissions commission received from brokers/dealers are retained by the Manager only if the goods and services provided are of demonstrable benefit to unit holders of the Fund.

During the financial period under review, the Manager had received on behalf of the Fund, soft commissions in the form of fundamental database, financial wire services, technical analysis software and stock quotation system incidental to investment management of the Fund. These soft commissions received by the Manager are deem to be beneficial to the unit holders of the Fund.

6 2.10 Market review Equity The period under review started with some jitters amid a resurgence of new COVID-19 cases globally, with total death worldwide breaching 1 million mark in September 2020. The spread of COVID-19 also prompted some countries to re-impose lockdowns and implement stricter measures that would hinder the economic recovery.

In November, global markets were driven higher by positive developments on several COVID-19 vaccines that subsequently received the Emergency Use Authorization from the United States of America ("U.S.") Food and Drug Administration. The positive news on the COVID-19 vaccine triggered a rotation from growth to value or reopening plays. Sectors that were badly hit by COVID-19 pandemic rallied as investors anticipate a normalisation of economic activities after herd immunity is achieved. The beneficiaries of vaccine including financials, consumer, commodities and tourism have all seen strong performance.

During the financial period under review, the global market staged a strong rebound, with MSCI World Index rising 16.5%.

Fixed Income U.S. treasury ("UST") yields traded mostly higher during the period under review. Long tenor benchmark yields rose on improving economic indicators, optimism from vaccination rollout and larger fiscal spending under the Biden administration. The U.S. government outlined a fresh USD1.9 trillion pandemic relief package pending legislative approval. The 10- and 30-year UST yields increased by 54 and 64 basis points ("bps") to end at 1.07% and 1.83%.

On the local front, Malaysian government bond yields edged higher during the period as the market adjusted its expectation to key policy decisions. Bank Negara Malaysia ("BNM") maintained the Overnight Policy Rate ("OPR") at 1.75% during its Monetary Policy Committee ("MPC") meetings in September and November. Bond yields declined subsequently on concerns of the country’s worsening pandemic situation. COVID-19 cases escalated in December 2020 with conditional Movement Control Order ("MCO") further extended for certain localities. At the end of the period, the 3- and 5-year MGS benchmark yields declined 9 and 5 bps to 1.84%and 2.07% while the 7-, 10- and 15-year yields increased 16 to 36 bps to 2.469%, 2.71% and 3.32% respectively.

On the economic front, Malaysia’s real Gross Domestic Product ("GDP") contracted by a record 17.1% yoy in 2Q2020. The contraction surpassed the 11.2% contraction registered in the Asian Financial Crisis in 4Q1998. Nonetheless, the country recorded a narrower GDP contraction of 2.7% yoy in 3Q2020 mainly driven by the improvement in the manufacturing sector.

7 2.10 Market review Fitch Ratings downgraded Malaysia’s sovereign credit rating to BBB+ (continued) from A-, with a stable outlook. The rating downgrade was due to the weakening of several key credit metrics arising from the COVID-19 pandemic. Nonetheless, the impact of rating downgrade to the market was temporary and benign.

2.11 Market outlook Equity After a tumultuous 2020 for the global economy, markets are now looking forward to a stronger 2021. We see global synchronised economic growth underpinned by the vaccine rollout and supportive monetary and fiscal policies. According to International Monetary Fund ("IMF"), the global economy is projected to expand by 5.5% in 2021 and 4.2% in 2022. The rebound in economic activity and corporate earnings is expected to create a conducive backdrop for investing in 2021.

With the vaccine rollout, we see the rotation to value or reopening plays continuing as economies get on the path to normalcy. We continue to see investment opportunities in reopening plays like financials and consumer.

The improvement in the growth outlook is expected to be positive for Asia and the portfolio positioning reflects a positive view on Asia equities. Besides Asia, we continue to be positive on global leaders that would benefit from secular growth trends.

Fixed Income The U.S. Federal Reserve ("Fed") kept the fed funds rate at 0.00-0.25% in January and committed to extend the asset purchase program of $120 billion per month until substantial further progress has been made toward the committee's maximum employment and price stability goals. Meanwhile, the Fed chairman reiterated that it is premature to discuss about the timing of any removal of accommodation.

Meanwhile, the Fed’s latest economic forecasts showed a significant improvement to its GDP and unemployment projection. The 2020 GDP forecast was revised up from –3.7% to -2.4% and recover at a faster pace in 2021 at +4.2% (previous: +4.0%). On unemployment rate, the committee expects it to end lower at 6.7% (previous: 7.6%) in 2020 and ease further to 5.0% (previous: 5.5%) in 2021.

BNM held its policy rate at 1.75% in January. The central bank highlighted that near-term growth would be affected by the re-introduction of stricter containment measures due to escalating new COVID-19 daily cases but the impact will be less severe than that experienced in 2020. The growth trajectory is projected to improve from 2Q2021 onwards driven by the recovery in global demand amid continued policy support and the rollout of vaccines. BNM views the current monetary policy to be appropriate and accommodative but given the uncertainties surrounding the pandemic, the stance of monetary policy going forward would be data dependent.

8 2.12 Additional With effect from 23 March 2020, the following information has been Information updated in the Master Prospectus:

- If the transfer request leaves a unit holder with less than the required minimum holdings of units in the account, we will request the unit holder to transfer the remaining units from the transferor's account to the transferee's account.

- The unit holders are given an option to receive their income distribution.

Kuala Lumpur, Malaysia UOB Asset Management (Malaysia) Berhad

30 March 2021

9 (B) TRUSTEE’S REPORT

TO THE UNIT HOLDERS OF UNITED INCOME PLUS FUND

We have acted as Trustee for United Income Plus Fund (“the Fund”) for the financial period ended 31 January 2021. To the best of our knowledge, for the financial period under review, UOB Asset Management (Malaysia) Berhad (“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 distributions made during this financial period ended 31 January 2021 by the Manager are not inconsistent with the objective of the Fund.

For Deutsche Trustees Malaysia Berhad

Soon Lai Ching Gerard Ang Boon Hock Senior Manager, Trustee Operations Chief Executive Officer

Kuala Lumpur, Malaysia 30 March 2021

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We, Lim Suet Ling and Seow Lun Hoo, being two of the directors of UOB Asset Management (Malaysia) Berhad, do hereby state that, in the opinion of the Manager, the accompanying financial statements set out on pages 12 to 47 are drawn up in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards so as to give a true and fair view of the financial position of United Income Plus Fund as at 31 January 2021 and of its financial performance, changes in net asset value and cash flows for the financial period then ended and comply with requirements of the Deed(s).

For and on behalf of the Manager, UOB Asset Management (Malaysia) Berhad

LIM SUET LING SEOW LUN HOO Executive Director / Director Chief Executive Officer

Kuala Lumpur, Malaysia 30 March 2021

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(D) FINANCIAL STATEMENTS

UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 31 JANUARY 2021

31.01.2021 31.07.2020 Note RM RM ASSETS Investments 3 73,988,681 47,596,841 Forward foreign currency contracts 4 10,022 15,376 Amount due from Manager 5 1,440,958 - Dividend receivables 14,423 - Other receivable 3,651 - Cash at banks 4,556,043 5,065,614 TOTAL ASSETS 80,013,778 52,677,831

LIABILITIES Amount due to Manager 5 - 65,785 Amount due to Trustee 6 4,648 2,852 Amount due to brokers 2,213,940 2,047,386 Accruals 39,529 34,841 TOTAL LIABILITIES 2,258,117 2,150,864

UNITHOLDERS’ EQUITY Unitholders’ capital 7 70,865,289 44,683,590 Retained earnings 7 6,890,372 5,843,377 TOTAL EQUITY, REPRESENTING NET ASSET VALUE (“NAV”) ATTRIBUTABLE TO UNITHOLDERS 7 77,755,661 50,526,967

TOTAL EQUITY AND LIABILITIES 80,013,778 52,677,831

UNITS IN CIRCULATION 8 (a) 137,142,003 90,166,308

NET ASSET VALUE PER UNIT (RM) 0.5670 0.5604

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

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UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIXTH MONTHS FINANCIAL PERIOD ENDED 31 JANUARY 2021

01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020 Note RM RM INVESTMENT INCOME Dividend income from quoted equities 131,773 2,060 Income distributions from investments at fair value through profit or loss (“FVTPL”) 286,027 99,935 Interest income from unquoted fixed income securities 824,077 545,114 Interest income from deposit with licensed financial institution 20,508 114,661 Net gain on investments at FVTPL: 3 - net realised gain on sale of investments at FVTPL 1,182,067 93,088 - net unrealised gain on changes in fair values 7(c) 142,173 66,405 Net amortisation of premium (59,255) (3,426) Net realised gain/(loss) on forward foreign currency contracts 567,957 (118,111) Net realised loss on foreign currency exchange (682,625) (22,938) Net unrealised (loss)/gain on forward foreign currency contracts 7(c) (5,355) 15,710 Net unrealised gain on foreign currency exchange 7(c) 3,651 45 2,410,998 792,543 EXPENSES Manager’s fee 8 483,215 266,649 Trustee’s fee 9 26,057 14,080 Auditors’ remuneration 4,688 4,675 Tax agent’s fee - 3,520 Other expenses 6,791 4,424 520,751 293,348

NET INCOME BEFORE TAXATION 1,890,247 499,195

Tax expense 10 (24,318) - NET INCOME AFTER TAXATION, REPRESENTING TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD 1,865,929 499,195

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

13 UNITED INCOME PLUS FUND

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) FOR THE SIXTH MONTHS FINANCIAL PERIOD ENDED 31 JANUARY 2021

01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020 Note RM RM

Net income after taxation is made up of the following: Realised amount 7(b) 1,725,460 417,035 Unrealised amount 7(c) 140,469 82,160 1,865,929 499,195

Distributions for the financial period 11 818,934 626,168

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

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UNAUDITED STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE SIXTH MONTHS FINANCIAL PERIOD ENDED 31 JANUARY 2021

Unitholders’ Retained Total net capital earnings asset value Note RM RM RM

Balance as at 1 August 2019 33,127,597 4,932,950 38,060,547

Movement in net asset value: Total comprehensive income for the financial period 7 - 499,195 499,195 Creation of units 7(a) 11,109,303 - 11,109,303 Reinvestments of units 7(a) 626,168 - 626,168 Cancellation of units 7(a) (6,345,811) - (6,345,811) Distributions 11 - (626,168) (626,168)

Balance as at 31 January 2020 38,517,257 4,805,977 43,323,234

Balance as at 1 August 2020 44,683,590 5,843,377 50,526,967

Movement in net asset value: Total comprehensive income for the financial period 7 - 1,865,929 1,865,929 Creation of units 7(a) 53,219,411 - 53,219,411 Reinvestments of units 7(a) 818,746 - 818,746 Cancellation of units 7(a) (27,856,458) - (27,856,458) Distributions 11 - (818,934) (818,934)

Balance as at 31 January 2021 70,865,289 6,890,372 77,755,661

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

15 UNITED INCOME PLUS FUND

UNAUDITED STATEMENT OF CASH FLOWS FOR THE SIXTH MONTHS FINANCIAL PERIOD ENDED 31 JANUARY 2021

01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020 RM RM CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES Proceeds from sale of investments 40,979,721 17,945,376 Purchase of investments (65,759,377) (15,458,977) Dividend received from quoted equities 117,350 50,682 Income distributions received from investments at FVTPL 286,026 99,935 Interest received from unquoted fixed income securities 643,432 552,793 Interest received from deposits with licensed financial institutions 20,508 114,661 Manager’s fee paid (449,754) (262,079) Trustee’s fee paid (24,261) (13,801) Auditors’ remuneration paid - (9,300) Payment of other fees and expenses (6,791) (4,423) Foreign witholding tax (24,318) - Net realised gain/(loss) on forward foreign currency contracts 567,957 (118,111) Net realised loss on foreign currency exchange (682,625) (22,938) Net cash (used in)/generated from operating and investing activities (24,332,132) 2,873,818

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from creation of units 52,279,699 11,256,574 Payment for cancellation of units (28,456,950) (6,483,833) Distribution paid (188) - Net cash generated from financing activities 23,822,561 4,772,741

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (509,571) 7,646,559 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD 5,065,614 2,000,661

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL PERIOD 4,556,043 9,647,220

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

16 UNITED INCOME PLUS FUND

UNAUDITED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE SIXTH MONTHS FINANCIAL PERIOD ENDED 31 JANUARY 2021

01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020 RM RM

Cash and cash equivalents comprise the following: Deposits with licensed financial institutions - 6,709,756 Cash at banks 4,556,043 2,937,464 4,556,043 9,647,220

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

17 UNITED INCOME PLUS FUND

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

1. INFORMATION ON THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES

The United Income Plus Fund (hereinafter referred to as “the Fund”) was constituted pursuant to the execution of the Deed dated 30 April 2014 as amended by a First Supplemental Deed dated 26 February 2015 and Second Supplemental Deed dated 2 January 2019 (collectively referred to as “the Deeds”) between UOB Asset Management (Malaysia) Berhad (“the Manager”) and Deutsche Trustees Malaysia Berhad (“the Trustee”).

The Fund seeks to provide investors with income and capital appreciation over the medium to long term by investing primarily in fixed income securities with the remaining investing in equities and equity-related securities. The Fund was launched on 9 February 2015 and commenced for operation on 2 March 2015. As provided in the Master Deed, the accrual period or financial year shall end on 31 July.

The Manager is a subsidiary of UOB Asset Management Limited, headquartered in Singapore.

The financial statements were authorised for issue by the Manager on 30 March 2021.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation of the financial statements

The financial statements of the Fund have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”).

The financial statements have been prepared on the historical-cost basis except as disclosed in the accounting policies below and are presented in Ringgit Malaysia (“RM”).

2.2 Changes in accounting policies

Standards issued and effective

The accounting policies adopted that could have material impact to the financial statements are consistent with those of the previous financial year.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of significant accounting policies

(a) Financial instruments

Classification

In accordance with MFRS 9, the Fund classifies its financial assets and financial liabilities at initial recognition into the categories of financial assets and financial liabilities discussed below.

In applying that classification, a financial asset or financial liability is considered to be held for trading if:

(a) It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term; or

(b) On initial recognition, it is part of a portfolio of identified financial instruments that are managed together and for which, there is evidence of a recent actual pattern of short-term profit-taking; or,

(c) It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

Financial assets

The Fund classifies its financial assets as subsequently measured at amortised cost or measured at fair value through profit or loss ("FVTPL") on the basis of both the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

(i) Financial assets measured at amortised cost

A debt instrument is measured at amortised cost if it is held within a business model whose objective is to hold financial asset in order to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest ("SPPI") on the principal amount outstanding. The Fund includes in this category amount due from Manager, dividend receivables, sundry receivable and bank balances.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of significant accounting policies (continued)

(a) Financial instruments (continued)

Financial assets (continued)

(ii) Financial assets at FVTPL

A financial asset is measured at FVTPL if:

(a) Its contractual terms do not give rise to cash flows on specified dates that are SPPI on the principal amount outstanding; or

(b) It is held within a business model whose objective is to sell; or

(c) At initial recognition, it is irrevocably designated as measured at FVTPL when doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

The Fund includes in this category debt and equity instruments. These include investments that are held under a business model to manage them on a fair value basis for investment income and fair value gains.

Financial liabilities

(i) Financial liabilities measured at FVTPL

A financial liability is measured at FVTPL if it meets the definition of held for trading. The Fund does not have such liabilities at this juncture.

(ii) Financial liabilities measured at amortised cost

This category includes all financial liabilities, other than those measured at FVTPL. The Fund includes in this category amount due to Trustee and amount due to brokers.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of significant accounting policies (continued)

(a) Financial instruments (continued)

Impairment of financial assets

The Fund holds only trade receivables with no financing component and which have maturities of less than 12 months at amortised cost and, as such, has chosen to apply an approach similar to the simplified approach for expected credit losses ("ECL") under MFRS 9 to all its trade receivables. Therefore the Fund does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECL at each reporting date. The Fund’s approach to ECL reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

(b) Classification of realised and unrealised gains and losses

Unrealised gains and losses comprise changes in the fair value of financial instruments at FVTPL. Realised gains and losses on disposals of financial instruments at FVTPL are calculated using weighted average method. They represent the difference between an instrument’s initial carrying amount and disposal amount.

Return on investments, income distribution from collective investment schemes, foreign exchange translation differences of cash at a bank balances denominated in foreign currencies and accrued interest on deposits which have not matured as at the reporting date are classified as realised income in the financial statements.

Derivatives are financial assets or liabilities at FVTPL categorised as held for trading unless they are designated hedges.

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

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 hedge accounting are classified as held for trading and accounted for in accordance with the accounting policy on FVTPL.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of significant accounting policies (continued)

(d) Functional and presentation currency

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

(e) Foreign currency translation

Transactions in currencies other than the Fund’s functional currency (foreign currencies) are recorded in the functional currency using exchange rates prevailing at the transaction dates. At each reporting date, foreign currency monetary items are translated into RM at exchange rates ruling at the reporting date. All exchange gains or losses are recognised in the profit or loss.

(f) Unitholders’ capital

Unitholders’ capital of the Fund meets the definition of puttable instruments classified as equity instruments under the revised MFRS 132 Financial Instruments: Presentation and is classified as equity instruments. Any distribution to unitholders is recorded as a reduction from retained earning within equity.

(g) Distribution of income

Distribution of income is made at the discretion of the Manager. A distribution to the Fund’s unitholders is accounted for as a deduction from realised reserves except where distribution is sourced out of distribution equalisation which is accounted for as a deduction from unitholders’ capital. A proposed distribution is recognised as a liability in the period in which it is approved.

(h) Cash and cash equivalents

Cash and cash equivalents comprise deposits with a licensed financial institution and cash at a bank with a maturity of less than 3 months which have an insignificant risk of changes in value.

(i) Income recognition

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

# UNITED INCOME PLUS FUND

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 Summary of significant accounting policies (continued)

(j) Net asset value attributable to unitholders

Net asset value attributable to unitholders represents the redemption amount that would be payable if the unitholders exercised the right to redeem units of the Fund at the end of the reporting period.

(k) Income tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

No deferred tax is recognised as there are no material temporary differences.

(l) Segment reporting

For internal management reporting purposes, all of the investments of the Fund are managed as one portfolio and reviewed as such by the Manager. The Manager is the decision maker for performance assessment purposes and makes decisions about resource allocation. Accordingly, the Fund does not have any operating segment information to be disclosed in the financial statements.

(m) Significant accounting estimates and judgments

The preparation of the Fund’s financial statements requires the Manager to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability in the future.

No major judgments have been made by the Manager in applying the Fund’s accounting policies. There are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

# 3. INVESTMENTS

31.01.2021 31.07.2020 RM RM

Investments designated as FVTPL: - Collective investment schemes - foreign 10,229,603 8,811,266 - Quoted investments - local 1,460,500 - - Quoted investments - foreign 17,750,838 14,045,859 - Unquoted fixed income securities 44,547,740 24,739,716 73,988,681 47,596,841

01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020 RM RM Net gain on investments at FVTPL comprised: - net realised gain on sale of investments at FVTPL 1,182,067 93,088 - net unrealised gain on changes in fair values 142,173 66,405 1,324,240 159,493

Investments designated as FVTPL as at 31 January 2021 are as follows:

Fair value expressed as a percentage of value of the Name of counter Quantity Cost Fair value Fund RM RM %

COLLECTIVE INVESTMENT SCHEMES - FOREIGN

United Asian Bond Fund - Class USD 2,380,000 8,245,628 7,797,927 10.03 United Emerging Markets Bond Fund - Class USD 650,000 2,528,292 2,431,676 3.13 TOTAL COLLECTIVE INVESTMENT SCHEMES - FOREIGN 3,030,000 10,773,920 10,229,603 13.16

QUOTED INVESTMENTS - LOCAL

Malaysia Telekom Malaysia Berhad 230,000 1,476,454 1,460,500 1.88 TOTAL QUOTED INVESTMENT - LOCAL 230,000 1,476,454 1,460,500 1.88

# UNITED INCOME PLUS FUND

3. INVESTMENTS (CONTINUED)

Investments designated as FVTPL as at 31 January 2021 are as follows (continued):

Fair value expressed as a percentage of value of the Name of counter Quantity Cost Fair value Fund RM RM %

QUOTED INVESTMENTS - FOREIGN

Hong Kong

Materials Jiangxi Copper Co., Ltd. 180,000 1,394,184 1,201,941 1.54

Telecommunication Services Tencent Holdings Limited 4,000 1,494,392 1,422,088 1.83

Indonesia

Consumer Discretionary PT Astra International Tbk 880,000 1,602,784 1,544,373 1.99

Korea

Information Technology SK hynix Inc. 3,360 1,520,340 1,490,157 1.91 Samsung Electronics Co,.Ltd 5,500 1,558,720 1,632,800 2.10 8,860 3,079,060 3,122,957 4.01

United States

Consumer Discretionary Sony Corporation 6,800 2,182,477 2,629,345 3.38

Financials Citigroup Inc. 10,000 1,926,125 2,342,796 3.01

Information Technology Taiwan Semiconductor Manufacturing Co. Ltd. 3,800 864,406 1,865,575 2.40

# UNITED INCOME PLUS FUND

3. INVESTMENTS (CONTINUED)

Investments designated as FVTPL as at 31 January 2021 are as follows (continued):

Fair value expressed as a percentage of value of the Name of counter Quantity Cost Fair value Fund RM RM %

QUOTED INVESTMENTS - FOREIGN (CONTINUED)

United States (continued)

Telecommunication Services Tencent Music Entertainment Group 16,000 1,201,292 1,719,424 2.21 The Walt Disney Company 2,800 1,648,248 1,902,339 2.45 18,800 2,849,540 3,621,763 4.66

TOTAL QUOTED INVESTMENTS - FOREIGN 1,112,260 15,392,968 17,750,838 22.82

Fair value expressed as a percentage of Maturity Credit Nominal Adjusted value of the date Issuer rating value cost Fair value Fund RM RM RM %

UNQUOTED FIXED INCOME SECURITIES

CORPORATE BONDS

25.05.2021 CIMB Group Holdings Berhad A1 4,700,000 4,750,786 4,793,556 6.16 07.02.2022 Affin Bank Berhad A1 2,000,000 2,053,156 2,094,276 2.69 15.03.2022 AmBank (M) Berhad AA3 1,800,000 1,835,569 1,887,517 2.43 29.03.2022 Al Dzahab Assets Berhad AAA 2,500,000 2,541,952 2,608,302 3.35

# UNITED INCOME PLUS FUND

3. INVESTMENTS (CONTINUED)

Investments designated as FVTPL as at 31 January 2021 are as follows (continued):

Fair value expressed as a percentage of Maturity Credit Nominal Adjusted value of the date Issuer rating value cost Fair value Fund RM RM RM %

UNQUOTED FIXED INCOME SECURITIES (CONTINUED)

CORPORATE BONDS (CONTINUED)

28.04.2023 Telekom Malaysia Berhad AAA 3,000,000 3,138,833 3,140,558 4.04 09.05.2023 Danum Capital Berhad AAA (S) 1,000,000 1,046,184 1,046,453 1.35 25.07.2023 United Overseas Bank (Malaysia) Berhad* AA1 2,000,000 2,095,167 2,097,981 2.70 13.12.2024 Malaysia Airport Holdings Berhad AA2 700,000 729,732 758,850 0.98 22.08.2025 GENM Capital Berhad AAA(S) 1,000,000 1,021,614 1,083,524 1.39 21.10.2025 Pengerang LNG (Two) Sdn. Bhd. AA3 3,000,000 3,021,080 3,015,860 3.88 03.12.2025 Sime Darby Berhad A2 2,000,000 2,010,192 2,017,192 2.60 25.09.2026 Danainfra Nasional Berhad NR** 1,000,000 1,011,530 1,053,270 1.36 31.03.2027 GENM Capital Berhad AAA(S) 3,000,000 3,050,755 3,276,055 4.21

# UNITED INCOME PLUS FUND

3. INVESTMENTS (CONTINUED)

Investments designated as FVTPL as at 31 January 2021 are as follows (continued):

Fair value expressed as a percentage of Maturity Credit Nominal Adjusted value of the date Issuer rating value cost Fair value Fund RM RM RM %

UNQUOTED FIXED INCOME SECURITIES (CONTINUED)

CORPORATE BONDS (CONTINUED)

20.04.2028 UMW Holdings Berhad A1 3,000,000 3,235,139 3,463,809 4.45 04.06.2029 Pengurusan Air SPV Berhad AAA 1,000,000 1,006,708 1,083,668 1.39 31.01.2030 Hong Leong Assurance Berhad AA3 2,000,000 2,105,720 2,079,135 2.67 02.08.2030 United Overseas Bank (Malaysia) Berhad* AA1 1,000,000 1,014,959 1,016,759 1.31 09.10.2030 Malayan Banking Berhad AA1 4,000,000 4,036,548 4,040,788 5.20 30.06.2033 Cypark Ref Sdn. Bhd. AA3 1,000,000 1,027,499 1,119,966 1.44 23.08.2033 Lebuhraya Duke Fasa 3 Sdn. Bhd. AA- IS 300,000 340,793 341,036 0.44 15.11.2120 Dialog Group Berhad NR** 1,000,000 1,008,755 1,024,685 1.32 41,000,000 42,082,671 43,043,240 55.36

# UNITED INCOME PLUS FUND

3. INVESTMENTS (CONTINUED)

Investments designated as FVTPL as at 31 January 2021 are as follows (continued):

Fair value expressed as a percentage of Maturity Credit Nominal Adjusted value of the date Issuer rating value cost Fair value Fund RM RM RM %

UNQUOTED FIXED INCOME SECURITIES (CONTINUED)

CAGMAS BOND

06.12.2021 Cagamas Berhad AAA 1,500,000 1,505,055 1,504,500 1.93

TOTAL UNQUOTED FIXED INCOME SECURITIES 42,500,000 43,587,726 44,547,740 57.29

TOTAL INVESTMENTS 71,231,068 73,988,681 95.15

EXCESS OF FAIR VALUE OVER COST 2,757,613

* A financial institution related to the Manager.

** The unquoted fixed income securities which are non-rated ("NR") as at the end of the financial period are issued, backed or guaranteed by government or government agencies.

The weighted average effective yield on unquoted fixed income securities is as follows:

31.01.2021 31.07.2020 % %

Corporate bonds 6.15 3.34

Cagamas bond 2.09 3.34

# UNITED INCOME PLUS FUND

3. INVESTMENTS (CONTINUED)

Analysis of the remaining maturity by nominal value of unquoted fixed income securities as at 31 January 2021 and 31 July 2020 are as follows:

Less than 1 year to More than 1 year 5 years 5 years RM RM RM 31.01.2021 Corporate bonds 4,700,000 19,000,000 17,300,000

Cagamas bond 1,500,000 - -

31.07.2020 Corporate bonds 4,700,000 7,000,000 11,300,000

4. FORWARD FOREIGN CURRENCY CONTRACTS

As at the date of statement of financial position, there are 3 (31.07.2020: 3) forward foreign currency contracts outstanding.

The notional principal amount of the outstanding forward foreign currency contracts amounted to RM6,884,450 (31.07.2020: RM5,190,067).

The forward foreign currency contracts entered into were for hedging against the currency exposure arising from the investments denominated in United States Dollar (USD).

As the Fund has not adopted hedge accounting, the change in fair value of the forward foreign currency contract is recognised immediately in profit or loss.

5. AMOUNT DUE FROM/(TO) MANAGER

31.01.2021 31.07.2020 RM RM

Creation of units 2,026,606 1,086,894 Cancellation of units (499,035) (1,099,526) Manager's fee payable (86,613) (53,153) 1,440,958 (65,785)

The normal credit period for the Manager’s fee payable is one month (31.07.2020: one month).

# UNITED INCOME PLUS FUND

6. AMOUNT DUE TO TRUSTEE

31.01.2021 31.07.2020 RM RM

Amount due to Trustee 4,648 2,852

Amount due to Trustee represents Trustee’s fee payable.

The normal credit period for the Trustee’s fee payable is one month (31.07.2020: one month).

7. UNITHOLDERS’ EQUITY

Net asset value attributable to unitholders is represented by:

31.01.2021 31.07.2020 Note RM RM

Unitholders’ capital (a) 70,865,289 44,683,590 Retained earnings - Realised gain (b) 4,145,517 3,238,991 - Unrealised gain (c) 2,744,855 2,604,386 6,890,372 5,843,377 Total equity, representing NAV attributable to unitholders 77,755,661 50,526,967

(a) UNITHOLDERS’ CAPITAL/ UNITS IN CIRCULATION

31.01.2021 31.07.2020 Units RM Units RM At the beginning of the financial period/year 90,166,308 44,683,590 69,222,499 33,127,597 Creation of units during the financial period/year 94,499,801 53,219,411 64,980,589 35,486,893 Reinvestment for the financial period/year 1,445,998 818,746 3,053,060 1,674,538 Cancellation of units during the financial period/year (48,970,104) (27,856,458) (47,089,840) (25,605,438) At the end of the financial period/year 137,142,003 70,865,289 90,166,308 44,683,590

The Manager and parties related to the Manager did not hold any units in the Fund as at 31 January 2021 (31.07.2020: Nil).

# UNITED INCOME PLUS FUND

7. UNITHOLDERS’ EQUITY (CONTINUED)

(b) RETAINED EARNINGS - REALISED

31.01.2021 31.07.2020 RM RM

At the beginning of the financial period/year 3,238,991 2,918,148 Total comprehensive income for the financial period/year 1,865,929 2,585,108 Net unrealised gain attributable to investments and others held transferred to unrealised reserve (140,469) (589,584) Distributions for the financial period/year (818,934) (1,674,681) Net increase in realised reserve for the financial period/year 906,526 320,843 At the end of the financial period/year 4,145,517 3,238,991

31.01.2021 31.07.2020 RM RM

At the beginning of the financial period/year 2,604,386 2,014,802 Net unrealised gain attributable to investments and others held transferred to unrealised reserve: - Investments at FVTPL 142,173 558,453 - Forward foreign currency contracts (5,355) 31,086 - Foreign currency exchange 3,651 45 140,469 589,584 At the end of the financial period/year 2,744,855 2,604,386

8. MANAGER'S FEE

Schedule 8 of the Deed provides that the Manager shall be entitled to a fee at a rate agreed between the Manager and the Trustee which the rate shall not exceed 2.00% (31.01.2020: 2.00%) per annum of the net asset value of the Fund, calculated on a daily basis.

The management fee provided in the financial statements is 1.50% (31.01.2020: 1.50%) per annum based on the net asset value of the Fund, calculated on a daily basis for the financial period.

There will be no further liability to the Manager in respect of Manager’s fee other than the amount recognised in the financial statements.

# UNITED INCOME PLUS FUND

9. TRUSTEE'S FEE

Schedule 9 of the Deed provides that the Trustee shall be entitled to a fee at a rate agreed between the Manager and the Trustee which the rate shall not exceed 0.20% (31.01.2020: 0.20%) per annum of the net asset value of the Fund, calculated on a daily basis; subject to a minimum fee of RM15,000 (31.01.2020: RM15,000) per annum (excluding foreign custodian fees and charges).

The Trustee’s fee provided in the financial statements is 0.07% (31.01.2020: 0.07%) per annum based on the net asset value of the Fund subject to a minimum fee of RM15,000 (31.01.2020: RM15,000) per annum, calculated on a daily basis for the financial period.

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

10. INCOME TAX EXPENSE

Income from unquoted fixed income securities and deposit placements is exempted from tax in accordance with Schedule 6, Paragraph 35 and 35A of the Income Tax Act, 1967 ("ITA"), subject to certain exclusion. Distribution income derived from sources outside Malaysia and received in Malaysia is exempted from tax in accordance with Schedule 6, Paragraph 28 of the ITA. Pursuant to Section 61(1)(b) of the ITA, gains from realisation of investment will not be treated as income of the Fund and hence are not subject to income tax.

A reconciliation of income tax expense applicable to net income before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Fund is as follows:

01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020 RM RM

Net income before taxation 1,890,247 499,195

Tax calculated at a tax rate of 24% 453,659 119,807 Tax effects of: - Income not subject to tax (757,976) (236,930) - Loss not deductible for tax purposes 179,336 46,720 - Restriction on tax deductible expenses for unit trust funds 117,097 65,117 - Expenses not deductible for tax purposes 7,884 5,286 (453,659) (119,807) Income tax for the financial period - - Foreign withholding tax 24,318 - Tax expense for the financial period 24,318 -

# UNITED INCOME PLUS FUND

11. DISTRIBUTIONS

Final distributions to unitholders is derived from the following sources:

01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020 RM RM

Realised income from previous financial year - 919,516 Gross dividend 342,366 - Interest income 632,842 - Net realised gain on sale of investment 284,851 - Net realised gain on foreign currency exchange 103,944 - 1,364,003 919,516 Less: Expenses (520,751) (293,348) Tax expense (24,318) - (545,069) (293,348) Net distributable amount 818,934 626,168

Details of distributions to unitholders during the financial period ended are as follows:

Financial period ended 31 January 2021

Distributions Reinvestment Distributions Total Ex-date settlement date per unit distributions RM RM

15 October 2020 16 October 2020 0.0030 414,761 26 January 2021 27 January 2021 0.0030 404,173 0.0060 818,934

Financial period ended 31 January 2020

Distributions Reinvestment Distributions Total Ex-date settlement date per unit distributions RM RM

29 October 2019 30 October 2019 0.0042 306,386 22 January 2020 23 January 2020 0.0041 319,782 0.0083 626,168

# UNITED INCOME PLUS FUND

12. MANAGEMENT EXPENSE RATIO (“MER”) 01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020 % %

Manager’s fee 0.65 0.67 Trustee’s fee 0.04 0.04 Other expenses 0.02 0.02 Total MER 0.71 0.73

The MER of the Fund is the ratio of the sum of fees and expenses incurred by the Fund to the average NAV of the Fund calculated on a daily basis.

13. PORTFOLIO TURNOVER RATIO (“PTR”) 01.08.2020 01.08.2019 to 31.01.2021 to 31.01.2020

PTR (times) 0.72 0.38

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

14. TRANSACTIONS WITH BROKERS AND FINANCIAL INSTITUTIONS

Details of transactions with brokers and financial institutions by the Fund for the financial period ended 31 January 2021 are as follows: Percentage Percentage of total Value of of total Brokerage brokerage Brokers/Financial institutions trades trades fees fees RM % RM %

CLSA Limited (Hong Kong) 41,942,001 37.60 24,717 23.25 China International Capital Corporation Hong Kong Securities Limited 10,128,497 9.08 31,127 29.28 Deutsche Bank (Malaysia) Bhd 9,365,430 8.40 - - UOB Kay Hian Securities (M) Sdn. Bhd. * 8,269,073 7.41 20,854 19.61 CIMB Bank Berhad 6,000,000 5.38 - - CGS – CIMB Securities Sdn. Bhd 5,557,372 4.98 12,373 11.64 J.P. Morgan Securities LLC 5,456,964 4.89 4,392 4.13 RHB Investment Bank Berhad 5,246,799 4.70 - - Alliance Bank Malaysia Berhad 5,000,000 4.48 - - Malayan Banking Berhad 4,000,000 3.59 - - Others 10,582,323 9.49 12,850 12.09 111,548,459 100.00 106,313 100.00

# UNITED INCOME PLUS FUND

14. TRANSACTIONS WITH BROKERS AND FINANCIAL INSTITUTIONS (CONTINUED)

* Financial institution related to the Manager.

The Directors of the Manager are of the opinion that any transactions with the related party have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated party. These dealings with related parties have been transacted at arm’s length basis.

15. FINANCIAL INSTRUMENTS

(a) Classification of financial instruments

The Fund’s financial assets and financial liabilities are measured on an ongoing basis based on their respective classification. The significant accounting policies in Note 2.2 describe how the classes of financial instruments are measured and how income and expenses are recognised:

(i) the Fund’s investments, comprising quoted equities, collective investment schemes and unquoted fixed income securities, are classified as financial assets at FVTPL which are measured at fair value;

(ii) the Fund’s other financial assets, comprising amount due from brokers, dividend receivables, deposits with a licensed financial institution and cash at a bank, are classified as financial assets which are measured at amortised cost;

(iii) the Fund’s financial liabilities, comprising amount due to Manager, amount due to Trustee and amount due to brokers, are classified as other financial liabilities which are measured at amortised cost; and

(iv) the Fund’s forward foreign currency contracts are derivatives which are measured at FVTPL.

# UNITED INCOME PLUS FUND

15. FINANCIAL INSTRUMENTS (CONTINUED)

(a) Classification of financial instruments (continued)

Financial Financial Financial assets at liabilities at assets at amortised amortised FVTPL cost cost Total RM RM RM RM 31.01.2021 Financial Assets Investments 73,988,681 - - 73,988,681 Forward foreign currency contracts 10,022 - - 10,022 Amount due from Manager - 1,440,958 - 1,440,958 Dividend receivables - 14,423 - 14,423 Sundry receivable - 3,651 - 3,651 Cash at bank - 4,556,043 - 4,556,043

Total financial assets 73,998,703 6,015,075 - 80,013,778

Financial Liabilities Amount due to Trustee - - 4,648 4,648 Amount due to brokers - - 2,213,940 2,213,940

Total financial liabilities - - 2,218,588 2,218,588

# UNITED INCOME PLUS FUND

15. FINANCIAL INSTRUMENTS (CONTINUED)

(a) Classification of financial instruments (continued)

Financial Financial Financial assets and assets at liabilities at liabilities at amortised amortised FVTPL cost cost Total RM RM RM RM 31.07.2020 Financial Assets Investments 47,596,841 - - 47,596,841 Forward foreign currency contracts 15,376 - - 15,376 Cash at bank - 5,065,614 - 5,065,614

Total financial assets 47,612,217 5,065,614 - 52,677,831

Financial Liabilities Amount due to Manager - - 65,785 65,785 Amount due to Trustee - - 2,852 2,852 Amount due to brokers - - 2,047,386 2,047,386

Total financial liabilities - - 2,116,023 2,116,023

(b) Financial instruments that are carried at fair value

The Fund uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3: Inputs are unobservable inputs for the asset or liability.

# UNITED INCOME PLUS FUND

15. FINANCIAL INSTRUMENTS (CONTINUED)

(b) Financial instruments that are carried at fair value (continued)

The following table shows an analysis of financial instruments recorded at fair value by the level of the fair value hierarchy: Level 1 Level 2 Level 3 Total RM RM RM RM 31.01.2021 Financial instruments - Collective investment schemes - 10,229,603 - 10,229,603 - Forward foreign currency contracts - 10,022 - 10,022 - Quoted investments 19,211,338 - - 19,211,338 - Unquoted fixed income securities - 44,547,740 - 44,547,740 19,211,338 54,787,365 - 73,998,703

31.07.2020 Financial instruments - Collective investment schemes - 8,811,266 - 8,811,266 - Forward foreign currency contracts - 15,376 - 15,376 - Quoted investments 14,045,859 - - 14,045,859 - Unquoted fixed income securities - 24,739,716 - 24,739,716 14,045,859 33,566,358 - 47,612,217

(c) Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximations of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value due to their short period to maturity or short credit period:

• Cash at banks • Amount due from Manager • Dividend receivables • Sundry receivable • Amount due to Manager • Amount due to Trustee • Amount due to brokers

There were no financial instruments which are not carried at fair values and whose carrying amounts are not reasonable approximation of their respective fair values.

# UNITED INCOME PLUS FUND

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks including market risk, manager risk, inflation risk, non- compliance risk, currency risk, liquidity risk, credit risk, interest rate risk, geographical risk and income distribution risk.

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

(a) Market risk

Market risk refers to potential losses that may arise from changes in the market conditions which in turn affect the market prices of the investments of the Fund. Market conditions are generally affected by, amongst others, social environment, political and economic stability. The Fund that seeks to invest in various geographical markets will be subjected to risks arising from general and sector specific economic conditions in the markets in which the Fund invests. However, if one of the markets which the Fund invests in suffers a downturn or instability due to economic and/or political conditions, the possible adverse impact on the Fund’s value may be softened by the fact that the Fund is also invested in other markets that are not experiencing similar downturn or instability. In the event the downturn or instability affects multiple markets within the region or globally, the benefits of diversification in multiple markets enjoyed by the Fund will be reduced as each of the markets it invests in experiences the downturn or instability.

The Fund’s overall exposure to market risk was as follows: 31.01.2021 31.07.2020 RM RM

Investments at FVTPL 73,988,681 47,596,841

The table below summarises the sensitivity of the Fund’s net asset value and net income after taxation to movements in prices of investments. The analysis is based on the assumption that the price of the investments fluctuates by 5% with all other variables held constant. Impact on Change in profit after price of Market tax and net investments value asset value % RM RM 31.01.2021 -5 70,289,247 (3,699,434) 0 73,988,681 - 5 77,688,115 3,699,434

31.07.2020 -5 45,216,999 (2,379,842) 0 47,596,841 - 5 49,976,683 2,379,842

# UNITED INCOME PLUS FUND

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(b) Manager risk

The performance of the Fund depends on, amongst other things, the expertise of the Manager. A failure on the part of the Manager to display the requisite experience and expertise expected of them in making investment decisions for the Fund may jeopardize the Fund’s performance and returns.

Inflation risk is a risk of an investor’s investment not growing at a rate that keeps pace with inflation rate, thereby decreasing the investor’s purchasing power even though the investment in monetary terms may have increased.

(d) Non-compliance risk

Non-adherence with laws, rules, regulations, prescribed practices, internal policies and procedures may result in tarnished reputation, limited business opportunities and reduced expansion potential for the management company. Investment goals may also be affected should the Manager not adhere to the investment mandate, such as the Fund’s investment objective and investment policy and strategy. The non-adherence may be the outcome from human error (for instance the oversight of the Manager) or system failure (causing unnecessary downtime). The magnitude of such risk and its impact on the Fund and/or unitholders are dependent on the nature and severity of the non-compliance. In order to mitigate this risk, the Manager has stringent internal controls and ensures that compliance monitoring processes are undertaken.

(e) Currency risk

This risk is associated with investments denominated in currencies different from the base currency of the Fund. As the Fund is denominated in RM, investments in countries other than Malaysia will cause the Fund to be exposed to currency risks. When foreign currencies move unfavourably against the RM, these investments may face currency loss in addition to any capital gains or losses, which will affect the net asset value of the Fund, and consequently the net asset value per unit of the Fund. The Manager may mitigate this risk by hedging the foreign currency exposure. However, by employing this hedging, it will limit the potential upside of these currencies where investors would not be able to enjoy the additional returns when these currencies move favourably against the RM.

# UNITED INCOME PLUS FUND

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(e) Currency risk (continued)

The following table sets out the foreign currency risk concentrations of the Fund.

31.01.2021 RM

Hong Kong Dollar ("HKD") Investments at FVTPL 2,624,028 Amount due to brokers (737,487) 1,886,541 Indonesia Rupiah ("IDR") Investments at FVTPL 1,544,374

Korean Won ("KRW") Investments at FVTPL 3,122,957

United States Dollar ("USD") Investments at FVTPL 20,689,082 Dividends receivable 14,423 Cash at bank 3,131,596 Other payable (2,634,080) 21,201,021

31.07.2020

Hong Kong Dollar ("HKD") Investments at FVTPL 2,116,427

United States Dollar ("USD") Investments at FVTPL 19,532,006 Cash at bank 14,500 Amount due to brokers (1,047,386) 18,499,120 Singapore Dollar ("SGD") Investments at FVTPL 1,208,691

The table below summarises the sensitivity of the Fund’s net asset value and profit after tax to changes in foreign exchange movements. The analysis is based on the assumption that the foreign exchange rate changes by 5%, with all other variables remaining constant. Any increase/decrease in foreign exchange rate will result in a corresponding decrease/increase in the net assets attributable to unitholders by approximately 5%. Disclosures below are shown in absolute terms, changes and impact could be positive or negative.

# UNITED INCOME PLUS FUND

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(e) Currency risk (continued)

Impact on Change in profit after foreign tax / net exchange rate asset value % RM 31.01.2021 HKD 94,327 +5/-5 (94,327)

IDR 77,219 +5/-5 (77,219)

KRW 156,148 +5/-5 (156,148)

USD 1,060,051 +5/-5 (1,060,051)

31.07.2020 HKD 105,821 +5/-5 (105,821)

USD 924,956 +5/-5 (924,956)

SGD 60,435 +5/-5 (60,435)

(f) Liquidity risk

Liquidity risk refers to the ease of liquidating an investment depending on the investment’s volume traded in the market. Generally, if the Fund holds many securities that are illiquid, or difficult to dispose of, the value of the Fund may be affected when it has to sell such securities at an unfavourable price. This in turn will depress the value of the Fund. This risk may be mitigated by avoiding securities or markets with poor liquidity.

The table below summarises the Fund’s financial assets and liabilities into relevant maturity groupings based on the remaining period from the statement of financial position date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows.

# UNITED INCOME PLUS FUND

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(f) Liquidity risk (continued)

Contractual cash flows (undiscounted)

0 - 1 1 - 2 2 - 3 3 - 4 4 - 5 More than year years years years years 5 years RM RM RM RM RM RM 31.01.2021 Financial assets Investments - Unquoted fixed income securities 6,408,063 7,693,509 7,101,626 1,681,880 6,935,811 23,750,693 Amount due from Manager 1,440,958 - - - - - Dividend receivables 14,423 - - - - - Sundry receivables 3,651 - - - - - Cash at banks 4,556,043 - - - - - Total financial assets 12,423,138 7,693,509 7,101,626 1,681,880 6,935,811 23,750,693

Financial liabilities Amount due to Trustee 4,648 - - - - - Amount due to brokers 2,213,940 - - - - - Total financial liabilities 2,218,588 - - - - -

31.07.2020 Financial assets Investments - Unquoted fixed income securities 5,887,495 7,231,442 606,025 608,001 1,286,195 13,161,971 Cash at banks 5,065,614 - - - - - Total financial assets 10,953,109 7,231,442 606,025 608,001 1,286,195 13,161,971

Financial liabilities Amount due to Manager 65,785 - - - - - Amount due to Trustee 2,852 - - - - - Amount due to brokers 2,047,386 - - - - - Total financial liabilities 2,116,023 - - - - -

# UNITED INCOME PLUS FUND

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(g) Credit risk This refers to the creditworthiness of the issuers of fixed income securities and/or money market instruments and its expected ability to make timely payment of interest and/or principal. Default happens when the issuers are not able to make timely payments of interest and/or principal. Fixed income securities and/or money market instruments are subject to both actual and perceived measures of creditworthiness. The downgrading of a rated fixed income securities or adverse publicity and investor perception could decrease the value and liquidity of the fixed income securities and/or money market instruments, particularly in a thinly traded market.

Deposits that the Fund has placed with licensed financial institutions are also exposed to credit/default risk. If the financial institutions become insolvent, the Fund may suffer capital losses with regards to the capital invested and interest foregone, causing the performance of the Fund to be adversely affected. Placement of deposits with a licensed financial institution will also be made based on prudent selection by the Manager according to its analysis on credit worthiness of the financial institutions.

The following table sets out maximum exposure to credit risk and the credit risk concentrations of the Fund. Cash and As a cash Derivative percentage Unquoted fixed equivalents assets at of net asset income securities FVTPL Total value RM RM RM RM % 31.01.2021 - AAA 8,337,028 - - 8,337,028 10.72 - AA1 7,155,528 4,556,043 - 11,711,571 15.06 - AA2 758,850 - 10,022 768,872 0.99 - AA3 8,102,478 - - 8,102,478 10.42 - A1 10,351,641 - - 10,351,641 13.31 - A2 2,017,192 - - 2,017,192 2.59 - AA- IS 341,036 - - 341,036 0.44 - AAA (S) 5,406,032 - - 5,406,032 6.95 - NR* 2,077,955 - - 2,077,955 2.67 44,547,740 4,556,043 10,022 49,113,805 63.15

31.07.2020 - AAA 3,726,685 - - 3,726,685 7.38 - AA1 1,000,000 5,065,614 - 6,065,614 12.00 - AA2 760,763 - 15,376 776,139 1.54 - AA3 2,993,235 - - 2,993,235 5.92 - A1 10,426,425 - - 10,426,425 20.64 - AA- IS 344,444 - - 344,444 0.68 - AAA (S) 4,425,961 - - 4,425,961 8.76 - NR* 1,062,203 - - 1,062,203 2.10 24,739,716 5,065,614 15,376 29,820,706 59.02

* Non-rated

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16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(h) Interest rate risk

This Fund is also subject to interest rate risk. Interest rate is a general indicator that will have an impact on the management of the Fund. This risk refers to the effect of interest rate changes on the market value of a portfolio of fixed income securities. In the event of rising interest rates, prices of fixed income securities will generally decrease and vice versa. Meanwhile, fixed income securities with longer maturities and lower coupon/interest rates are more sensitive to interest rate changes.

The table below summarises the sensitivity of the Fund’s net asset value and profit after tax to movements in prices of unquoted fixed income securities held by the Fund as a result of movement in interest rate. The analysis is based on the assumptions that the interest rate increased and decreased by 1% with all other variables held constant.

Impact on profit after tax/ net asset value 31.01.2021 31.07.2020 RM RM % Change in interest rate +1% 445,477 (247,397) -1% (445,477) 247,397

(i) Geographical risk

The Fund is also subject to geographical risk. The value of the assets of the Fund may also be affected by the economic and political climate, restriction on currency repatriation or other developments in the law or regulations of the countries in the Asia Pacific region excluding Japan in which the Fund may invest. Further, when investing in foreign markets, there are countries which may require prior approvals before investments can take place. For example, if and when the Fund invests in countries such as China, Taiwan, South Korea, India and Vietnam, such countries require the prior application or registration of an investment license or investor code before any investment can be made in these countries. As such, if investments in such countries are undertaken, there may be a risk that the registration or license may be revoked or is not renewed by the relevant authority and the Fund’s investment in these countries may be affected. The effect on the Fund’s investments will depend on the regulatory requirements of the respective countries. For example, if a foreign market requires the Fund to obtain an investment license which is subject to renewal and if such investment license is not renewed in a timely manner, this may result in the Fund’s investment account in that country being frozen by the regulator resulting in investment activities for the Fund in that country being suspended. To mitigate this, the Manager will monitor closely the adherence of investment regulatory requirements in such countries.

# UNITED INCOME PLUS FUND

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(j) Income distribution risk

It should be noted that the distribution of income is not guaranteed. Circumstances preventing the distribution of income include, among others, unavailability of sufficient realised returns to enable income distribution as distribution of income may only be made from realised gains or realised income.

17. CAPITAL MANAGEMENT

The capital of the Fund can vary depending on the demand for redemptions and subscriptions to the Fund. The Fund’s units in issue at the end of the financial period are disclosed in Note 7(a).

No changes were made to the Fund’s objectives, policies or processes during the current financial period.

# (E) CORPORATE INFORMATION

Manager UOB Asset Management (Malaysia) Berhad 199101009166 (219478-X)

Level 22 Vista Tower The Intermark 348 Jalan Tun Razak 50400 Kuala Lumpur

Tel: 03-2732 1181 Fax: 03-2164 8188

Website: www.uobam.com.my

Board of Directors Mr Wong Kim Choong Mr Thio Boon Kiat (alternate to Mr Wong Kim Choong) Mr Seow Lun Hoo Mr Seow Voon Ping (alternate to Mr Seow Lun Hoo) Mr Wong Yoke Leong Mr Lim Kheng Swee En Syed Naqiz Shahabuddin Bin Syed Abdul Jabbar Ms Lim Suet Ling (Executive Director & CEO)

Trustee Deutsche Trustees Malaysia Berhad 200701005591 (763590-H)

Auditor of the Fund Ernst & Young

Tax Agent of the Fund Ernst & Young Tax Consultants Sdn Bhd