RHB INCOME FUND 2
ANNUAL REPORT 2021
For the financial year ended 31 March 2021
0 GENERAL INFORMATION ABOUT THE FUND
Name, Category and Type
Fund Name - RHB Income Fund 2
Fund Category - Bond Fund
Fund Type - Income Fund
Investment Objective, Policy and Strategy
Objective of the Fund
This Fund aims to provide investors with higher than average income returns compared to fixed deposits over a medium to long term* period through investments in a portfolio of predominantly quality fixed income securities with minimum risk to capital invested.
* Note: “medium to long term” in this context refers to a period of between 3-7 years.
Strategy
This Fund seeks to achieve its investment objective by investing substantially all of its assets in fixed income securities (comprising amongst others of convertible debt securities, redeemable debt securities, bonds/securities that are issued and/or guaranteed by the government or quasi-government agencies, corporate bonds carrying at least BBB ratings by RAM Rating Services Berhad or its equivalent rating by any other rating establishment and fixed income collective investments schemes), money market instruments, cash and deposits with any financial institutions. At least 60% of Net Asset Value will be invested in bonds. Although the Fund is actively managed, how active or the frequency of its trading strategy will very much depend on market opportunities.
1 Performance Benchmark
The performance of the Fund is benchmarked against the 12-month Fixed Deposit Rate as published by Malayan Banking Berhad (‘Maybank”).
Permitted Investments
This Fund may invest in debentures/instruments traded on the Bursa Malaysia or any other market considered as an eligible market, collective investment schemes, financial derivatives, structured products, liquid assets (including money market instruments and deposits with any financial institutions), and any other investments permitted by the Securities Commission Malaysia from time to time.
Distribution Policy
Consistent with the Fund’s objective to provide investors with higher than average income returns compared to fixed deposits, the Fund will distribute a substantial portion of its returns to unit holders. Distributions, if any, after deduction of taxation and expenses, are generally declared annually and will be reinvested.
2 MANAGER’S REPORT
MARKET REVIEW
During the period under review which started in the second quarter of 2020 (“2Q20”), market has extended rally after the sell-off in March 2020 appeared to diminish with attractive adjustment in term of yields have further ignite buying demand into local government bonds market. Both Malaysian Government Securities/Malaysian Government Investment Issue (“MGS/MGII”) have normalized back and in fact trading at tighter yield levels thanks to concerted global central bank easing and prospects of further Overnight Policy Rate (“OPR”) cuts by Bank Negara Malaysia (“BNM”). In May 2020, BNM again has cut the OPR by another 50 basis points (“bps”) to 2%, a level last seen during the year 2008-2009 global financial crisis. The central bank has noted that with this latest cut, the OPR has been reduced by a total of 100 bps since the start of the year. However, further announcement on recovery stimulus package by Government in June 2020 to support domestic economy has resulted in upward trajectory in yields due to the supply concern arising from higher fiscal deficit. Following recent gains in tightening of bond yields, investors seen realizing gains on top of supply concern resulting in upward movement in bond yields during the end of 2Q20.
Nonetheless, prospect of another rate cut by BNM has somehow supported the yield and market players have seen to be divided on their positioning ahead of the decision. After the meeting in July 2020 which saw BNM cut interest rate by another 25 bps local government bond yields were continuously being bought as curve flattening theme took place on dovish statement released from the meeting. Nevertheless, the bullish run in Malaysian Ringgit (“MYR”) bonds came to a halt in mid-August 2020 at the back of selling flows and profit taking activities amid the adjustments of rates outlook by investors. In September 2020, local bond market cruised the month with nervous moment as yields seen higher with three of the auctions held during the month ended- up with weak bid-to-cover (“BTC”) ratio of circa 1.5 times and lower. Bond market sentiment has been weak since the no OPR cut decision by BNM on 10 September 2020. Looking ahead, curve steepening pressure might prevail on supply dynamics point of view following additional MYR10 billion fiscal stimulus from Bantuan Prihatin Nasional (“BPN”) 2.0. With that, economists seen revising the budget deficit forecast slightly up to circa -6.70% for year 2020 and -6.00% for year 2021 from -6.50% and - 5.90% respectively previously. Nonetheless, we remain opportunistic as the correction in yields will attract good entry level as policy remain far from tightening cycle.
Towards the final quarter of the year, bond market sentiment has skewed weaker since the no OPR cut decision by BNM at its final meeting of the year on 3 November 2020. Looking ahead, curve steepening pressure might prevail on supply dynamics point of view. Rising external yields will inevitably weigh on Ringgit bonds when supply profile remains heavy while demand faces headwinds. From the start of the year 2021, the local bond yields have been adjusted higher on better risk sentiment as well as higher movement in United States Treasury (“UST”) yields on reflationary trades arising from 3 higher stimulus bill which is at the final page of approving through the Senate. Local markets reopened after the Chinese New Year break on a rather bearish note. Bonds were under intense selling pressure amidst paper thin liquidity while tracking the movement on the UST, coupled with the relaxation of Employees Provident Fund (“EPF”) withdrawals through the i-Sinar program which further extended market cautiousness on potential higher withdrawal that will further distress local yields. Nevertheless, towards the end of the first quarter of year 2021 (“1Q2021”), we saw demand for the local government securities emerging following decision of Financial Times Stock Exchange (“FTSE”) Russell to retain Malaysia in the World Government Bond Index (“WGBI”). This is a positive news for local bond market and it has lifted sentiments especially from offshore investors’ perspective given the certainty now and the risk of exclusion from the WGBI has now been completely removed. Local government space saw the yields flatten towards the end of the month with longer-end being sought after based on attractive valuation as a result of continuous selling pressure since the start of the year.
All in all, the 3-, 5-, 7-, 10-, 15-, 20- and 30-year MGS were bear-flattened and closed the period at 2.17% (March 2020: 1.83%), 2.66% (2.08%), 3.10% (2.30%), 3.26% (2.59%), 3.91% (3.08%), 4.22% (3.48%) and 4.37% (3.75%) respectively.
ECONOMIC REVIEW AND OUTLOOK
On the local economic front, Malaysia’s Consumer Prices Index (“CPI”) increased by 0.1% based on year-on-year (“YoY”) following a declined figure of -0.20% in January 2021. The increase in overall index was driven by miscellaneous goods and services (+1.60%), food and non-alcoholic beverages (+1.40%), alcohol beverages and tobacco (+0.70%), health (+0.70%) and furnishings, household equipment (+0.30%) which contributed around 50.70% of overall weight. The CPI's transport segment declined on cheaper petrol and diesel retail price compared to a year ago. In the statement, the Department of Statistic Malaysia (“DoSM”) said the average price of unleaded petrol RON95 in February 2021 decreased to RM1.96 per litre compared to RM2.07 in February 2020 amid persistently soft global crude oil prices. Going forward, overall inflation is expected to pick up on improvement in global oil prices coupled with low base effect. The upward pressure from demand side is expected to be muted as the pace of recovery in domestic consumption will be patchy and uneven. Meanwhile, price pressure from other product categories is expected to remain mild given the lack of demand-pull pressure. This shall allow BNM to maintain an accommodative policy stance in the foreseeable future even as real interest rates are expected to turn negative momentarily starting next month.
4 REVIEW OF FUND PERFORMANCE DURING FINANCIAL YEAR
For the financial year under review, the Fund has registered a return of -2.95%* in net asset value terms while its benchmark, Maybank 12 Months Fixed Deposit Rate recorded a gain of 1.97%*. The fund has distributed income distribution of 7.2000 sen during the financial year and has met its objective to provide investors with higher than average income returns compared to fixed deposits over a medium to long term period through investments in a portfolio of predominantly quality fixed income securities with minimum risk to capital invested.
*Source: Lipper Investment Management (“Lipper IM”), 8 April 2021
MARKET OUTLOOK AND STRATEGY GOING FORWARD
In domestic front, at its second Monetary Policy Meeting (“MPC”) the year, BNM held the OPR at 1.75%. This came in line with Bloomberg market consensus and economist expectations. This marks the fourth straight meeting that BNM kept rates on hold. The Statutory Reserve Requirement (“SRR”) was also kept unchanged at 2.00%. The next scheduled MPC decision is on 6 May 2021. In its statement, BNM highlighted that growth is expected to improve from the second half of the year driven by the recovery in global demand, increased public and private sector expenditure as well as more targeted containment measures following the roll-out of domestic COVID-19 vaccine programme. Growth will also be supported by higher production from existing and new manufacturing facilities, particularly in the Electrical and Electronic (“E&E”) and primary-related sub-sectors, as well as oil and gas facilities. Nevertheless, BNM also highlighted that the growth outlook remains subject to downside risks, stemming mainly from ongoing uncertainties in developments related to the pandemic, and potential challenges that might affect the roll-out of vaccines both globally and domestically. Although BNM continued to highlight potential downside risk and reiterated that future monetary decisions will be data dependent, BNM’s assessment painted a less negative outlook compared to their previous assessment in January 2021. The current Movement Control Order (“MCO”) has been relaxed to allow most economic activities to resume from March 2021 onwards, with exception of interstate travel. Malaysia’s external sector is projected to recover further in tandem with the global economy. In term of inflation trajectory, BNM highlighted that headline inflation is anticipated to temporarily spike in the second quarter of year 2021 (“2Q21”) due to the lower base from the low domestic retail fuel prices in the corresponding quarter of year 2020, before moderating thereafter. Underlying inflation is expected to remain subdued amid continued spare capacity in the economy. The outlook, however, is subject to global oil and commodity price developments. Despite expectations of further improvements, underlying economic conditions are unlikely to warrant any rate adjustments this year. Despite expectations for a pick-up in Gross Domestic Product (“GDP”) in year 2021, we expect parts of the economy will continue to face challenges, unemployment rates to stay elevated above pre-pandemic levels, and spare capacity to prevail this year. As such, we expect BNM to keep the OPR unchanged at 1.75% for the rest of the year.
5 PERFORMANCE DATA
Annual Total Returns Year Ended 31 March 2021 2020 2019 2018 2017 % % % % % RHB Income Fund 2 - Capital Return (8.14) (2.06) (0.37) (0.59) 0.61 - Income Return 5.65 5.37 5.15 5.06 4.66 - Total Returns (2.95) 3.20 4.76 4.44 5.30
Maybank’s 12-
month Fixed 3.35 3.14 3.16 Deposit Rate 1.97 3.07
Average Total Returns 1 Year 3 Years 5 Years 10 Years 31.03.2020 – 31.03.2018 – 31.03.2016 – 31.03.2011 – 31.03.2021 31.03.2021 31.03.2021 31.03.2021 % % % % RHB Income Fund 2 (2.95) 1.61 2.90 3.67
Maybank’s 12-month Fixed Deposit Rate 1.97 2.79 2.94 3.06
6 Performance of RHB Income Fund 2 for the period from 31 March 2011 to 31 March 2021 Cumulative Return Over The Period (%)
Source: Lipper Investment Management (“Lipper IM”), 8 April 2021
The abovementioned performance figures are indicative returns based on daily Net Asset Value of a unit (as per Lipper Database) since inception.
The calculation of the above returns is based on computation methods of Lipper.
Note : Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up.
The abovementioned performance computations have been adjusted to reflect distribution payments and unit splits wherever applicable.
7 As at 31 March Fund Size 2021 2020 2019 Net Asset Value (RM million)* 66.16 75.14 75.43 Units In Circulation (million)* 53.21 55.52 54.57 Net Asset Value Per Unit (RM)* 1.2433 1.3534 1.3821
Financial Year Ended 31 March Historical Data 2021 2020 2019 Unit Prices NAV - Highest (RM)* 1.4449 1.4720 1.4503 - Lowest (RM)* 1.2407 1.3416 1.3796
Distribution and Unit Split Gross Distribution Per Unit (sen) 7.2000 7.2000 7.1000 Net Distribution Per Unit (sen) 7.2000 7.2000 7.1000 Distribution date 25.03.2021 25.03.2020 27.03.2019 NAV before distribution (cum) 1.3467 1.4142 1.4503 NAV after distribution (ex) 1.2748 1.3416 1.3796
Unit Split - - -
Others Management Expense Ratio (MER) (%) # 1.08 1.07 1.10 Portfolio Turnover Ratio (PTR) (times) ## 0.54 0.89 0.91
* The figures quoted are ex-distribution
# The MER for the financial year was higher compared with the previous financial year due to higher expenses incurred for the financial year under review.
## The PTR for the financial year was lower compared with the previous financial year due to lesser investment activities for the financial year under review.
DISTRIBUTION
For the financial year under review, the Fund has declared a net distribution of 7.2000 sen per unit, which is equivalent to a net distribution yield of 5.10% based on the average net asset value for the financial year.
8 PORTFOLIO STRUCTURE
The asset allocations of the Fund as at reporting date was as follows:
As at 31 March 2021 2020 2019 Sectors % % % Unquoted fixed income securities 89.80 98.18 86.44 Liquid assets and other net current assets 10.20 1.82 13.56 100.00 100.00 100.00
The asset allocation of the Fund reflects the Manager stance to risk managed the portfolio in volatile markets.
BREAKDOWN OF UNIT HOLDINGS BY SIZE
Account Holders No. Of Units Held* Size of Holdings No. % (‘000) % 5,000 and below 69 45.70 136 0.26 5,001 to 10,000 18 11.92 133 0.25 10,001 to 50,000 38 25.17 813 1.53 50,001 to 500,000 20 13.24 4,140 7.78 500,001 and above 6 3.97 47,982 90.18 Total 151 100.00 53,204 100.00
*Excluding Manager’s stock
SOFT COMMISSION
The Fund Manager may only receive soft commission in the form of research and advisory services that assist in the decision-making process relating to the Fund’s investments.
During the financial year under review, the soft commission received from the brokers had been retained by the Manager as the goods and services provided are of demonstrable benefit to the unitholders.
9 RHB INCOME FUND 2 STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2021
Note 2021 2020 RM RM ASSETS Bank balances 5 45,501 51,209 Deposits with licensed financial institutions 5 6,729,341 1,287,929 Investments 6 59,409,331 73,767,994 Amount due from Manager 12,422 60,715 Other receivables 50,467 50,417 TOTAL ASSETS 66,247,062 75,218,264
LIABILITIES Amount due to Manager 18,621 - Accrued management fee 58,820 64,959 Amount due to Trustee 3,529 3,898 Other payables and accruals 10,229 12,770 TOTAL LIABILITIES 91,199 81,627
NET ASSET VALUE 66,155,863 75,136,637
EQUITY Unitholders’ capital 71,752,398 75,340,824 Accumulated losses (5,596,535) (204,187) 66,155,863 75,136,637
UNITS IN CIRCULATION (UNITS) 7 53,208,661 55,516,588
NET ASSET VALUE PER UNIT (EX-DISTRIBUTION) (RM) 1.2433 1.3534
The accompanying notes are an integral part of the financial statements. 10 RHB INCOME FUND 2 STATEMENT OF INCOME AND EXPENSES FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Note 2021 2020 RM RM (LOSS)/INCOME Interest income from deposits with licensed financial institutions 85,138 87,989 Interest income from investments 3,545,342 3,629,654 Net loss on investments 6 (4,628,342) (1,366,920) Net foreign currency exchange (loss)/gain (13) 2,936 (997,875) 2,353,659
EXPENSES Management fee 8 (713,901) (701,764) Trustee’s fee 9 (42,835) (42,107) Audit fee (5,600) (5,600) Tax agent’s fee (2,500) (2,500) Other expenses (2,739) (2,146) (767,575) (754,117)
Net (loss)/income before taxation (1,765,450) 1,599,542 Taxation 10 - - Net (loss)/income after taxation (1,765,450) 1,599,542
Net (loss)/income after taxation is made up of the following: Realised amount 4,023,212 4,845,615 Unrealised amount (5,788,662) (3,246,073) (1,765,450) 1,599,542
The accompanying notes are an integral part of the financial statements. 11 RHB INCOME FUND 2 STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Retained earnings/ Unitholders’ (accumulated Total net capital losses) asset value RM RM RM
Balance as at 1 April 2019 73,429,724 1,996,365 75,426,089
Movement in net asset value: Net income after taxation - 1,599,542 1,599,542 Creation of units arising from applications 41,137,920 - 41,137,920 Creation of units arising from distribution 3,800,094 - 3,800,094 Cancellation of units (43,026,914) - (43,026,914) Distribution (Note 11) - (3,800,094) (3,800,094) Balance as at 31 March 2020 75,340,824 (204,187) 75,136,637
Balance as at 1 April 2020 75,340,824 (204,187) 75,136,637
Movement in net asset value: Net loss after taxation - (1,765,450) (1,765,450) Creation of units arising from applications 61,124,463 - 61,124,463 Creation of units arising from distribution 3,626,898 - 3,626,898 Cancellation of units (68,339,787) - (68,339,787) Distribution (Note 11) - (3,626,898) (3,626,898) Balance as at 31 March 2021 71,752,398 (5,596,535) 66,155,863
The accompanying notes are an integral part of the financial statements. 12 RHB INCOME FUND 2 STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Note 2021 2020 RM RM CASH FLOWS FROM OPERATING ACTIVITIES Proceed from redemption of investments 976,000 2,500,000 Proceeds from sale of investments 42,446,979 56,306,060 Purchase of investments (33,907,544) (68,717,640) Interest received from deposits with licensed financial institutions 85,138 87,989 Interest received from investments 3,760,228 3,603,910 Management fee paid (720,040) (747,370) Trustee’s fees paid (43,204) (41,818) Payment for other fees and expenses (13,380) (7,851) Net cash generated from/(used in) operating activities 12,584,177 (7,016,720)
CASH FLOWS FROM FINANCING ACTIVITIES Cash proceeds from units created 61,172,756 42,002,638 Cash paid for units cancelled (68,321,166) (43,026,914) Net cash used in financing activities (7,148,410) (1,024,276)
Net increase/(decrease) in cash and cash equivalents 5,435,767 (8,040,996) Foreign currency translation differences (63) 2,936 Cash and cash equivalents at the beginning of the financial year 1,339,138 9,377,198 Cash and cash equivalents at the end of the financial year 5 6,774,842 1,339,138
The accompanying notes are an integral part of the financial statements 13 RHB INCOME FUND 2 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES
The RHB Income Fund 2 (hereinafter referred to as “the Fund”) was constituted pursuant to the execution of a Master Deed dated 13 February 2003 as amended via its First Supplemental Master Deed dated 24 December 2007, Supplemental Master Deed dated 1 June 2009, Second Supplemental Master Deed dated 4 September 2013, Third Supplemental Master Deed dated 2 March 2015, Fourth Supplemental Master Deed dated 25 May 2015 and Fifth Supplemental Master Deed dated 11 December 2018 (collectively referred to as “the Deeds”) between RHB Asset Management Sdn Bhd (“the Manager”) and HSBC (Malaysia) Trustee Berhad (“the Trustee”).
The Fund was launched on 26 February 2003 and will continue its operations until terminated according to the conditions provided in the Deed. The principal activity of the Fund is to invest in Permitted Investments as set out in the Deeds.
The main objective of the Fund is to provide investors with higher than average income returns compared to fixed deposits over a medium to long term period through investments in a portfolio of predominantly quality fixed income securities with minimum risk to capital invested.
All investments will be subject to the Securities Commission’s (“SC”) Malaysia Guidelines on Unit Trust Funds, SC requirements, the Deeds, except where exemptions or variations have been approved by the SC, internal policies and procedures and objective of the Fund.
The Manager, a company incorporated in Malaysia is a wholly-owned subsidiary of RHB Investment Bank Berhad, effective 6 January 2003. Its principal activities include rendering of investment management services, private retirement schemes and management of unit trust funds and provision of investment advisory services.
These financial statements were authorised for issue by the Manager on 25 May 2021.
14 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation of the financial statements
The financial statements have been prepared under the historical cost convention, as modified by revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss, except those as disclosed in the summary of significant accounting policies, and in accordance with Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”).
The preparation of financial statements in conformity with MFRS and IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the financial year. It also requires the Manager to exercise its judgement in the process of applying the Fund’s accounting policies. Although these estimates and judgement are based on the Manager’s best knowledge of current events and actions, actual results may differ.
(a) The Fund has applied the following amendments and interpretations for the first time for the financial year beginning on 1 April 2020:
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.
Key changes include: - increasing the prominence of stewardship in the objective of financial reporting - reinstating prudence as a component of neutrality - defining a reporting entity, which may be a legal entity, or a portion of an entity - revising the definitions of an asset and a liability - removing the probability threshold for recognition and adding guidance on derecognition - adding guidance on different measurement basis, and
15 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.1 Basis of preparation of the financial statements (continued)
(a) The Fund has applied the following amendments and interpretations for the first time for the financial year beginning on 1 April 2020: (continued)
The Conceptual Framework for Financial Reporting (“Framework”) (effective 1 January 2020) (continued)
Key changes include: (continued) - stating that profit or loss is the primary performance indicator and that, in principle, income and expenses in other comprehensive income should be recycled where this enhances the relevance or faithful representation of the financial statements.
No changes are made to any of the current accounting standards. However, entities that rely on the Framework in determining their accounting policies for transactions, events or conditions that are not otherwise dealt with under the accounting standards have to apply the revised Framework from 1 April 2020.
Amendments to MFRS 101 and MFRS 108 ‘Definition of Material’ (effective 1 January 2020) clarify the definition of materiality and use a consistent definition throughout MFRSs and the Conceptual Framework for Financial Reporting.
The revised Framework and adoption of the amendments to published standards did not have any impact on the current year or any prior period and is not likely to affect future periods.
(b) A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 April 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.
16 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 Financial assets
Classification
The Fund classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value through profit or loss (“FVTPL”), 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 flow 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.
The Fund classifies cash and cash equivalents, amount due from Manager and other receivables as financial assets measured at amortised cost as these financial assets are held to collect contractual cash flows consisting of the amount outstanding.
17 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 Financial assets (continued)
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. Financial assets at fair value through profit or loss are initially recognised at fair value.
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Fund has transferred substantially all risks and rewards of ownership.
Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in statement of income and expenses within net gain or losses on investments in the period in which they arise.
Interest on debt securities at fair value through profit or loss is recognised in the statement of income and expenses.
Unquoted fixed income securities denominated in Ringgit Malaysia are revalued on a daily basis based on fair value prices quoted by a bond pricing agency (“BPA”) registered with the SC Malaysia Guidelines on Unit Trust Funds.
Where such quotations are not available or where the Manager is of the view that the price quoted by the BPA for a specific unquoted fixed income security differs from the market price by more than 20 basis points, the Manager may use the market price, provided that the Manager:
(i) Records its basis for using a non-BPA price; (ii) Obtains necessary internal approvals to use the non-BPA price; and (iii) Keeps an audit trail of all decisions and basis for adopting the market price.
Deposits with licensed financial institutions are stated at cost plus accrued interest calculated on the effective interest method over the period from the date of placement to the date of the statement of financial position, which is a reasonable estimate of fair value due to the short-term nature of the deposits.
Financial assets at amortised cost are subsequently carried at amortised cost using the effective interest method.
18 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 Financial assets (continued)
Impairment of financial assets
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 close 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 the 12-month 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 or a counterparty credit rating which has fallen below BBB/Baa.
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 the unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay 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 year.
19 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.
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.
The Fund’s financial liabilities which include amount due to Manager, accrued management fee, amount due to Trustee and other payables and accruals are recognised initially at fair value and subsequently measured at amortised cost using the effective profit method.
A financial liability is derecognised when the obligation under the liability is extinguished. Gains and losses are recognised in statement of income and expenses when the liabilities are derecognised, and through the amortisation process.
2.4 Unitholders’ capital
The unitholders’ contributions to the Fund meet the criteria of the definition of puttable instruments to be classified as equity instruments under MFRS 132 “Financial Instruments: Presentation”. These criteria include:
the units entitle the 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 obligation to deliver cash or another financial asset other than the obligation on the Fund to repurchase; and the total expected cash flows from the units over its life are based substantially on the statement of income and expenses of the Fund.
The outstanding units are carried at the redemption amount that is payable at each financial year if the unitholders exercise the right to put the units 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 or cancellation. The Fund’s net asset value per unit is calculated by dividing the net assets attributable to unitholders with the total number of outstanding units.
20 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.5 Income recognition
Interest income from deposits with licensed financial institutions and unquoted fixed income securities are recognised on an accrual basis using the effective interest method.
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 assets (after deduction of the loss allowance).
Realised gain or loss on sale of unquoted fixed income securities are measured by the difference between disposal proceeds and the carrying amount of investments (adjusted for accretion of discount or amortisation of premium).
Net income or loss is the total of income less expenses.
2.6 Taxation
Current tax expense is determined according to Malaysian tax laws and includes all taxes based upon the taxable income earned during the financial year.
2.7 Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise bank balances and deposits with licensed financial institutions which are subject to an insignificant risk of changes in value.
2.8 Distributions
Distribution to the Fund’s unitholders is accounted for as a deduction from realised reserves. A proposed distribution is recognised as a liability in the period in which it is approved by the Trustee.
2.9 Presentation and functional 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 presentation and functional currency.
21 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9 Presentation and functional currency (continued)
Due to mixed factors in determining the functional currency of the Fund, the Manager has used its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and have determined the functional currency to be in RM primarily due to the following factors:
Part of the Fund’s cash is denominated in RM for the purpose of making settlement of the creation and cancellation, The Fund’s units are denominated in RM, The Fund’s significant expenses are denominated in RM, and The Fund’s investments are significantly denominated in RM.
2.10 Foreign currency translation
Foreign currency transactions in the Fund are accounted for at exchange rates prevailing at the transaction dates. Foreign currency monetary assets and liabilities are translated at exchange rates prevailing at the reporting date. Exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are recognised in statement of income and expenses.
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Fund is exposed to a variety of risks, which include price risk, interest rate risk, currency risk, credit risk, liquidity risk and capital 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.
Price risk
Price risk is the risk that the fair value of the investments of the Fund will fluctuate because of changes in market prices.
The Fund is exposed to price risk arising from interest rate risk in relation to its investments of RM59,409,331 (2020: RM73,767,994) in unquoted fixed income securities. The Fund’s exposure to price risk arising from interest rate risk and the related sensitivity analysis are disclosed in “Interest rate risk” below.
22 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Interest rate risk
In general, when interest rates rise, unquoted fixed income securities prices will tend to fall and vice versa. Therefore, the net asset value of the Fund may also tend to fall when interest rates rise or are expected to rise. In order to mitigate interest rates exposure of the Fund, the Manager will manage the duration of the portfolio via shorter or longer tenured assets depending on the view of the future interest rate trend of the Manager, which is based on its continuous fundamental research and analysis.
This risk is crucial since unquoted fixed income securities portfolio management depends on forecasting interest rate movements. Prices of unquoted fixed income securities move inversely to interest rate movements, therefore as interest rates rise, the prices of unquoted fixed income securities decrease and vice versa. Furthermore, unquoted fixed income securities with longer maturity and lower yield coupon rates are more susceptible to interest rate movements.
The table below summarises the sensitivity of the Fund’s profit or loss and net asset value as at reporting date to movements in price 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 fluctuates by +/- 1% with all variable held constant.
% Change in Impact on profit or loss interest rate and net asset value 2021 2020 RM RM +1% (208,928) (237,535) -1% 210,743 239,090
The Fund’s exposure to interest rate risk arises from investment in money market instruments is expected to be minimal as the Fund’s investments comprise mainly short term deposits with approved licensed financial institutions.
23 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Currency risk
Currency risk is associated with financial instruments that are quoted and/or priced in foreign currency denomination. Malaysian based investor should be aware that if the Ringgit Malaysia appreciates against the currencies in which the portfolio of the investment is denominated, this will have an adverse effect on the net asset value of the Fund and vice versa. Investors should note any gains or losses arising from the movement of foreign currencies against its home currency may therefore increase/decrease the capital gains of the financial instruments. Nevertheless, investors should realise that currency risk is considered as one of the major risks to financial instruments in foreign assets due to the volatile nature of the foreign exchange market.
The Fund did not have any significant financial liabilities denominated in foreign currencies as at the reporting date. The following table indicates the currencies to which the Fund had significant exposure at the reporting date on its financial assets. The analysis calculates the effect of a reasonably possible movement of each foreign currency rate against Ringgit Malaysia on equity and on income with all other variables held constant.
The analysis is based on the assumption that the foreign exchange rate fluctuates by +/(-) 5%, with all other variables remain constants, the impact on statement of income and expenses and net asset value is +/(-) RM141 (2020: RM147).
The following table sets out the currency risk concentration of the Fund:
Cash and cash Other equivalents receivables Total RM RM RM 2021 United States Dollar 1,565 1,257 2,822
2020 United States Dollar 1,734 1,257 2,991 Singapore Dollar - (50) (50) 1,734 1,207 2,941
24 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Credit risk
Credit risk refers to the possibility that the issuer of a particular investment will not be able to make timely or full payments of principal or income due on that investment. For investments in fixed income securities, risk is minimised by spreading its maturity profile. The risk arising from cash and cash equivalents is managed by ensuring that the Fund will only maintain cash balances and place deposits in reputable licensed financial institutions. The settlement terms of the proceeds from the creation of units receivable from the Manager are governed by the SC Malaysia Guidelines on Unit Trust Funds.
The following table sets out the credit risk concentration of the Fund:
Other Cash and cash financial Investments equivalents assets* Total 2021 RM RM RM RM Financial institutions: AAA - 6,774,842 - 6,774,842 AA1 1,656,791 - - 1,656,791 AA3 4,262,941 - - 4,262,941 AA- IS 4,358,792 - - 4,358,792 - - A IS 12,699,148 12,699,148 A+ IS 1,545,796 - - 1,545,796 - - A1 5,399,392 5,399,392 A3 4,596,987 - - 4,596,987 - - BBB IS 4,061,692 4,061,692 - - C IS 2,257,069 2,257,069 - - C3 6,034,437 6,034,437 - - Non-rated 12,536,286 12,536,286 - Others - 62,889 62,889 59,409,331 6,774,842 62,889 66,247,062
25 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Credit risk (continued)
The following table sets out the credit risk concentration of the Fund (continued)
Other Cash and financial Investments cash assets* equivalents Total 2020 RM RM RM RM Financial institutions: AAA 1,082,512 1,339,138 - 2,421,650 AA1 1,640,024 - - 1,640,024 AA3 6,568,712 - - 6,568,712 AA- 8,810,758 - - 8,810,758 A 18,954,219 - - 18,954,219 A+ 3,004,102 - - 3,004,102 A1 5,500,968 - - 5,500,968 A3 10,905,240 - - 10,905,240 BB1 7,945,822 - - 7,945,822 Non-rated 9,355,637 - - 9,355,637 Others - - 111,132 111,132 73,767,994 1,339,138 111,132 75,218,264
* Comprise amount due from Manager and other receivables
26 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Liquidity risk
Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial obligations.
Liquidity risk exists when particular investments are difficult to sell, possibly preventing a unit trust fund from selling such illiquid securities at an advantageous time or price. Unit trust funds with principal investment strategies that involve securities or securities with substantial market and/or credit risk tend to have the greater exposure to liquidity risk. As part of its risk management, the Manager will attempt to manage the liquidity of the Fund through asset allocation and diversification strategies within the portfolio. The Manager will also conduct constant fundamental research and analysis to forecast future liquidity of its investments.
The table below summarises the Fund’s financial 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.
Less than 1 Between 1 month month to 1 year RM RM 2021 Amount due to Manager 18,621 - Accrued management fee 58,820 - Amount due to Trustee 3,529 - Other payables and accruals - 10,229 80,970 10,229 2020 Accrued management fee 64,959 - Amount due to Trustee 3,898 - Other payables and accruals - 12,770 68,857 12,770
27 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Capital risk
The capital of the Fund is represented by equity consisting of unitholders’ capital of RM71,752,398 (2020: RM75,340,824) and accumulated losses of RM5,596,535 (2020: RM204,187). The amount of equity can change significantly on a daily basis as the Fund is subject to daily subscriptions and redemptions at the discretion of unitholders. The Fund’s objective when managing capital is to safeguard the Fund’s ability to continue as a going concern in order to provide returns for unitholders and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the Fund.
4. FAIR VALUE ESTIMATION
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price).
The fair value of financial assets and liabilities traded in an active market (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of trading on the financial year end date.
An active market is a market in which transactions for the assets or liabilities take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
The fair value of financial assets and liabilities that are not traded in an active market is determined by using valuation techniques. The Fund uses a variety of methods and makes assumptions that are based on market conditions existing at each financial year 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 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.
The fair values are based on the following methodologies and assumptions:
(i) For bank balances and deposits with licensed financial institutions with maturities less than 1 year, the carrying value is a reasonable estimate of fair value.
(ii) The carrying value of receivables and payables are assumed to approximate their fair values due to their short term nature.
28 4. FAIR VALUE ESTIMATION (CONTINUED)
Fair value hierarchy
The Fund adopted MFRS 13 “Fair Value Measurement” in respect of disclosures about the degree of reliability of fair value measurement. This requires the Fund to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) Level 3: Inputs for the asset and liability that are not based on observable market data (that is, unobservable inputs)
The following table analyses within the fair value hierarchy the Fund’s financial assets at fair value through profit or loss (by class) measured at fair value:
Level 1 Level 2 Level 3 Total RM RM RM RM 2021 Investments: - Unquoted fixed income securities - 59,409,331 - 59,409,331
2020 Investments: - Unquoted fixed income securities - 73,767,994 - 73,767,994
Financial instruments that trade in markets that are 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 includes unquoted fixed income investments. 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 assets are stated in Note 2.2.
29 5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise:
2021 2020 RM RM Deposits with licensed financial institutions 6,729,341 1,287,929 Bank balances 45,501 51,209 6,774,842 1,339,138
6. INVESTMENTS
2021 2020 RM RM Investments: Unquoted fixed income securities - local 59,409,331 73,767,994
2021 2020 RM RM Net loss on investments comprised: - net realised gain on disposal 1,252,448 1,971,070 - net unrealised loss on changes in fair value (5,880,790) (3,337,990) (4,628,342) (1,366,920)
Investments as at 31 March 2021 are as follows: % of Net Nominal Asset Name of Counter Rating Value Cost Fair Value Value RM RM RM % UNQUOTED FIXED INCOME SECURITIES – LOCAL MALAYSIA Alpha Circle Sdn Bhd - 5.45% (23/02/2022) A IS 533,000 543,533 548,147 0.83 Alpha Circle Sdn Bhd - 5.45% (19/11/2021) A IS 1,172,000 1,195,111 1,203,291 1.82 Alpha Circle Sdn Bhd - 5.60% (18/11/2022) A IS 319,000 325,452 329,235 0.50 Alpha Circle Sdn Bhd - 5.60% (18/11/2022 A IS 500,000 510,104 516,043 0.78 Alpha Circle Sdn Bhd - 6.00% (31/05/2023) BBB IS 4,000,000 4,114,768 4,061,692 6.14 Bank Islam Malaysia Bhd - 3.60% (21/10/2025) A1 2,000,000 2,031,924 2,024,096 3.06
30 6. INVESTMENTS (CONTINUED)
Investments as at 31 March 2021 are as follows:
% of Net Nominal Asset Name of Counter Rating Value Cost Fair Value Value RM RM RM % UNQUOTED FIXED INCOME SECURITIES – LOCAL MALAYSIA (CONTINUED) Bank Muamalat (M) Bhd - 5.80% (15/06/2026) A3 4,500,000 4,577,006 4,596,987 6.95 CIMB Group Holdings Bhd -5.40 % (23/10/2023) A1 1,000,000 1,023,557 1,070,161 1.62 DRB-Hicom Bhd - 5.10% (12/12/2029) A+ IS 1,500,000 1,522,329 1,545,796 2.34 Edra Energy Sdn Bhd - 5.82% (04/07/2025) AA3 1,000,000 1,033,884 1,093,623 1.65 Edra Energy Sdn Bhd - 6.35% (05/07/2033) AA3 1,500,000 1,558,072 1,726,832 2.61 GII Murabahah - 4.638% (15/11/2049) NR 1,500,000 1,669,993 1,523,143 2.30 GII Murabahah - 4.467% (15/09/2039) NR 1,000,000 1,131,264 1,014,064 1.53 GII Murabahah - 4.755% (04/08/2037) NR 1,000,000 1,126,164 1,098,716 1.66 Lebuhraya DUKE Fasa 3 Sdn Bhd - 6.23% (21/08/2037) AA- IS 1,000,000 1,094,300 1,076,145 1.63 Malaysian Government Securities - 23.75% (22/05/2040) NR 2,000,000 2,146,629 1,905,629 2.88 Malaysian Government Securities - 2.632% (15/04/2031) NR 4,000,000 4,014,791 3,836,591 5.80 Malaysian Government Securities - 3.828% (05/07/2034) NR 1,000,000 1,044,422 1,001,094 1.51 Malaysian Government Securities - 4.921% (06/07/2048) NR 2,000,000 2,351,110 2,157,050 3.26 MEX I Capital Bhd - 2.50% (24/01/2030) C3 4,500,000 3,663,988 1,242,497 1.88
31 6. INVESTMENTS (CONTINUED)
Investments as at 31 March 2021 are as follows (continued):
% of Net Nominal Asset Name of Counter Rating Value Cost Fair Value Value RM RM RM % UNQUOTED FIXED INCOME SECURITIES – LOCAL MALAYSIA (CONTINUED) MEX I Capital Bhd - 2.50% (22/01/2031) C3 1,000,000 786,041 243,541 0.37 MEX I Capital Bhd - 5.20% (24/01/2024) C3 6,200,000 6,255,358 4,548,399 6.88 MEX II Sdn Bhd - 6.00% (29/04/2030) C IS 1,200,000 1,204,454 532,513 0.80 MEX II Sdn Bhd - 6.20% (29/04/2032) C IS 1,500,000 1,564,968 601,184 0.91 MEX II Sdn Bhd - 6.40% (28/04/2034) C IS 3,000,000 3,143,702 1,123,372 1.70 Quantum Solar Park - 6.12% (06/10/2034) AA- IS 750,000 783,159 828,808 1.25 Quantum Solar Park - 6.16% (06/04/2035) AA- IS 750,000 783,541 830,994 1.26 Sabah Development Bank Bhd - 5.50% (24/04/2026) AA1 1,500,000 1,608,598 1,656,791 2.50 Solar Management Seremban Sdn Bhd - 4.83% (21/10/2033) AA3 1,500,000 1,557,557 1,442,486 2.18 Southern Power Generation Sdn Bhd IMTN - 5.45% (31/10/2033) AA- IS 500,000 513,655 555,673 0.84 UMW Holdings Bhd - 6.35% (20/04/2118) A1 2,000,000 2,084,007 2,305,135 3.48 WCT Holdings Bhd - 6.00% (28/09/2026) A IS 10,000,000 10,003,457 10,102,432 15.27 WCT Holdings Bhd - 5.65% (20/04/2026) AA- IS 1,000,000 1,025,062 1,067,171 1.61
TOTAL INVESTMENTS 67,991,960 59,409,331 89.80
32 6. INVESTMENTS (CONTINUED)
Investments as at 31 March 2020 are as follows:
% of Net Nominal Asset Name of Counter Rating Value Cost Fair Value Value RM RM RM % UNQUOTED FIXED INCOME SECURITIES –LOCAL MALAYSIA Affin Islamic Bank - 5.65% (18/10/2023) A3 3,000,000 3,076,644 3,176,807 4.23 Alpha Circle Sdn Bhd - 5.30% (23/02/2021) AA- 476,000 485,220 490,393 0.65 Alpha Circle Sdn Bhd - 5.45% (23/02/2022) AA- 533,000 543,607 554,303 0.74 Alpha Circle Sdn Bhd - 5.45% (19/11/2021) AA- 1,172,000 1,195,307 1,216,757 1.62 Alpha Circle Sdn Bhd - 5.60% (18/11/2022) AA- 319,000 325,517 334,088 0.44 Alpha Circle Sdn Bhd - 5.60% (18/11/2022) AA- 500,000 510,200 523,649 0.70 Alpha Circle Sdn Bhd - 6.00% (31/05/2023) A 4,000,000 4,127,501 4,179,990 5.56 AmIslamic Bank Bhd - 4.88% (18/10/2028) AA3 3,000,000 3,066,211 3,169,570 4.22 ASIFIN - 5.25% (18/10/2028) A3 3,000,000 3,044,052 3,074,625 4.09 Bank Muamalat (M) Bhd - 5.80% (15/06/2026) A3 4,500,000 4,580,485 4,653,808 6.19 CIMB Group Holdings Bhd -5.40 % (23/10/2023) A1 2,000,000 2,047,439 2,125,878 2.83 DRB-Hicom Bhd – 5.10% (12/12/2029) A+ 1,500,000 1,523,087 1,455,839 1.94 Edra Energy Sdn Bhd – 5.82% (04/07/2025) AA3 1,500,000 1,557,237 1,638,979 2.18 Edra Energy Sdn Bhd - 6.35% (05/07/2033) AA3 1,500,000 1,560,191 1,760,162 2.34 GII Murabahah - 4.755% (04/08/2037) NR 1,000,000 1,145,946 1,142,386 1.52
33 6. INVESTMENTS (CONTINUED)
Investments as at 31 March 2020 are as follows:
% of Net Nominal Asset Name of Counter Rating Value Cost Fair Value Value RM RM RM % UNQUOTED FIXED INCOME SECURITIES –LOCAL MALAYSIA (CONTINUED) Lebuhraya DUKE Fasa 3 Sdn Bhd - 6.23% (21/08/2037) AA- 1,000,000 1,097,716 1,096,965 1.46 Malaysian Government Securities -4.642% (07/11/2033) NR 5,300,000 5,917,265 5,872,492 7.82 Malaysian Government Securities - 4.921% (06/07/2048) NR 500,000 624,813 583,043 0.78 MEX I Capital Bhd - 2.50% (24/01/2030) BB1* 4,500,000 3,590,304 2,131,189 2.84 MEX I Capital Bhd - 2.50% (22/01/2031) BB1* 1,000,000 769,772 438,628 0.58 MEX I Capital Bhd - 5.20% (24/01/2024) BB1* 6,200,000 6,257,108 5,376,006 7.15 MEX II Sdn Bhd - 6.00% (29/04/2030) A 700,000 708,118 676,403 0.90 MEX II Sdn Bhd - 6.20% (29/04/2032) A 1,500,000 1,567,242 1,426,903 1.90 MEX II Sdn Bhd - 6.40% (28/04/2034) A 3,000,000 3,148,135 2,801,304 3.73 Prasarana Malaysia Bhd - 3.80% (25/02/2050) NR 2,000,000 2,007,496 1,757,716 2.34 Quantum Solar Park - 6.12% (06/10/2034) A+ 750,000 783,737 773,826 1.03 Quantum Solar Park - 6.16% (06/04/2035) A+ 750,000 784,102 774,436 1.03
34 6. INVESTMENTS (CONTINUED)
Investments as at 31 March 2020 are as follows (continued):
% of Net Nominal Asset Name of Counter Rating Value Cost Fair Value Value RM RM RM % UNQUOTED FIXED INCOME SECURITIES – LOCAL MALAYSIA (CONTINUED) Sabah Development Bank Bhd - 5.50% (24/04/2026) AA1 1,500,000 1,622,015 1,640,024 2.18 Special Power Vehicle Bhd - 20.42% (19/05/2020) A1 500,000 547,132 548,396 0.73 Southern Power Generation Sdn Bhd IMTN - 5.45% (31/10/2033) AA- 500,000 513,822 552,254 0.73 TG Excellence Bhd - 3.95% (27/2/2025) AA- 3,000,000 3,010,920 2,975,788 3.96 Tenaga Nasional Berhad - 4.98% (27/08/2038) AAA 1,000,000 1,090,063 1,082,512 1.44 UMW Holdings Bhd - 6.35% (20/04/2118) A1 2,500,000 2,609,026 2,826,694 3.77 WCT Holdings Bhd - 6.00% (28/09/2026) A 10,000,000 10,007,273 9,869,619 13.14 WCT Holdings Bhd - 5.65% (20/04/2026) AA- 1,000,000 1,025,130 1,066,562 1.42
TOTAL INVESTMENTS 76,469,833 73,767,994 98.18
35 6. INVESTMENTS (CONTINUED)
* MEX I Capital Bhd RM1.35 billion Sukuk Musharakah
On 23 April 2020, RAM lifted the Negative Rating Watch on MEX I Capital and reaffirmed its BB1 rating with a Negative outlook. RAM had earlier downgraded MEX I Capital’s rating to A1 from AA2 on 16 November 2018 and subsequently to BB1 on 3 June 2019 premised on the severe impairment in its debt-servicing metrics following unauthorized intercompany advances amounting to RM97.7 million by MESB to Maju Holdings, in addition to a deterioration in MESB’s projected annual cash flows.
On 24 June 2020, the High Court dismissed the legal action commenced by the Trustee for the Sukukholders against Maju Expressway Sdn Bhd (“MESB”), Bright Focus Berhad and Maju Holdings Sdn Bhd (“Maju Holdings”) to recover the unauthorized intercompany advances made earlier by MESB to Maju Holdings, with costs of RM10,000. The Judge found that the Trustee has no proprietary interest in the intercompany advances from MESB to Maju Holdings hence, no grounds to compel Maju Holdings to repay MESB. Pursuant to a Notice of Appeal filed by Messrs. Lee Hishamuddin Allen & Gledhill as legal counsel to the Trustee (acting for and behalf of the Sukukholders) on 17 July 2020, a hearing of appeal has been fixed for 24 June 2021. A final injunction was earlier granted by the Court on 14 August 2019 restraining MESB from making any further advances to Maju Holdings or any other party throughout the remaining tenure of the Sukuk. The longest Sukuk tranche matures on 23 January 2031.
On 24 January 2021, MEX I Capital fulfilled its obligation on the Sukuk with full and timely principal and profit payments of RM97.9 million from monies previously ring- fenced for the sole benefit of Sukukholders in a reserve account.
Approximately 90% of the next immediate Sukuk profit payment of RM25.9 million due on 26 July 2021 have been secured via funds set aside in a reserve account as at 9 March 2021.
On 19 March 2021, RAM further downgraded the rating of MEX I Capital to C3/Negative, from BB1/Negative, mainly premised on its persistent liquidity problems and heightened default risk amid sharply lower traffic volumes along the Maju Expressway due to COVID-19-led restrictions on mobility.
The proposed restructuring of the Sukuk (“New Sukuk”) to improve the rating is currently ongoing and targeted to be completed in the second half of 2021. On 6 November 2020, RAM assigned a preliminary A2/Stable rating to the New Sukuk.
36 6. INVESTMENTS (CONTINUED)
*MEX II Sdn Bhd (“MEX II”) RM1.30 billion Sukuk Murabahah Programme
On 18 October 2019, MARC had downgraded the rating of MEX II Sdn Bhd’s (“MEX II”) RM1.3 billion Sukuk Murabahah Programme from AA- to A whilst maintaining the rating on a negative outlook premised on rising completion risk and increased uncertainty with regard to completion and associated tolling date of the 16.8-km Lebuhraya KLIA (MEX Extension) project. MARC further placed MEX II’s ratings on MARCWatch Negative on 22 May 2020 due to the lack of construction progress at the Expressway.
On 30 October 2020, MEX II fulfilled its obligation on the Sukuk with a full and timely profit payment of circa RM39 million from monies previously ring-fenced for the sole benefit of Sukukholders in a reserve account.
On 18 November 2020, MARC downgraded MEX II’s ratings to BBB from A and the rating remained on MARCWatch Negative following concerns on MEX II’s timely ability to obtain additional financing to meet its debt obligations in April 2021 and complete a sukuk restructuring exercise.
On 9 February 2021, MARC further downgraded the rating to BB from BBB while maintaining the rating on MARCWatch Negative due to escalating risk that MEX II may not be able to obtain a liquidity line in time to meet Sukuk principal and profit payments of RM68.7 million due on 29 April 2021. As at 28 February 2021, MEX II had yet to procure external funding to meet its financial obligations in 2021 totaling approximately RM107 million comprising (i) a principal repayment of RM30 million due in April 2021 (ii) a profit payment of c.RM38.7 million due in April 2021 and (iii) a profit payment of c.RM38.2 million due in October 2021.
Overall construction of the Expressway stood at circa 86%. MEX II shall be seeking a third extension of time (“EOT”) from Lembaga Lebuhraya Malaysia (“LLM”) as completion will now be delayed beyond the earlier revised target of September 2021 pending the proposed restructuring/additional funding. MEX II received its second EOT to 4 September 2021 from LLM after the expiry of the first EOT on 4 July 2020. Construction of the remaining portion of the Expressway will take about 12 months.
On 26 March 2021, MARC downgraded MEX II’s rating to C from BB while maintaining the rating on MARCWatch Negative due to mounting liquidity pressure and the risk of missing the upcoming Sukuk payments on 29 April 2021, further highlighting that MEX II’s viability rests on a successful Sukuk restructuring through which additional funding will be available to complete the Expressway. MARC expects to maintain the rating at C in the event Sukukholders approve a deferment of MEX II’s financial obligation due in April 2021.
37 6. INVESTMENTS (CONTINUED)
*MEX II Sdn Bhd (“MEX II”) RM1.30 billion Sukuk Murabahah Programme (continued)
Sukukholders will vote to approve the temporary deferment of Sukuk payment obligations ahead of due date in April 2021. If approved, the Sukuk moratorium will buy some time for all parties to work on completing the proposed restructuring in the second half of 2021.
7. UNITS IN CIRCULATION
2021 2020 Units Units At the beginning of the financial year 55,516,588 54,572,080 Creation of units during the financial year Arising from applications 42,885,000 28,966,000 Arising from distribution 2,845,073 2,832,508 Cancellation of units during the financial year (48,038,000) (30,854,000) At the end of the financial year 53,208,661 55,516,588
8. MANAGEMENT FEE
In accordance with the Master Prospectus, the management fee provided in the financial statements is 1.00% (2020: 1.00%) per annum based on the net asset value of the Fund, calculated on a daily basis for the financial year.
9. TRUSTEE’S FEE
In accordance with the Master Prospectus, the Trustee’s fee provided in the financial statements is 0.06% (2020: 0.06%) per annum based on the net asset value of the Fund, calculated on a daily basis for the financial year. The minimum Trustee fee is waived as agreed by the Trustee and Manager.
38 10. TAXATION
(a) Tax charge for the financial year
2021 2020 RM RM
Current taxation - -
(b) Numerical reconciliation of income tax expense
The numerical reconciliation between the net (loss)/income before taxation multiplied by the Malaysian statutory income tax rate and the tax expense of the Fund is as follows:
2021 2020 RM RM Net (loss)/income before taxation (1,765,450) 1,599,542
Tax calculated at a statutory income tax rate of 24% (2020:24%) (423,708) 383,890 Tax effects of: - Loss not deductible for tax purpose/(Income not subject to tax) 239,490 (564,878) - Expenses not deductible for tax purposes 11,538 11,221 - Restriction on tax deductible expenses 172,680 169,767 Tax expense - -
11. DISTRIBUTIONS
Distribution to unitholders is derived from the following sources:
2021 2020 RM RM Prior financial year’s realised gain 2,564,873 4,461,974 Interest income from deposits with licensed financial institutions 82,940 87,989 Interest income from investments 1,733,158 - 4,380,971 4,549,963 Less: Expenses (754,073) (749,869) Distribution for the financial year 3,626,898 3,800,094
Gross/Net Distribution Per Unit (sen) Distributions during the financial year 2021 2020
25 March 2021 / 25 March 2020 7.2000 7.2000 39 11. DISTRIBUTIONS(CONTINUED)
Included in the above is an amount of RM2,564,873 (2020: RM4,461,974) derived from previous financial year’s realised income.
There were unrealised losses of RM5,788,662 (2020: RM3,246,073) for the financial year.
12. MANAGEMENT EXPENSE RATIO (“MER”)
2021 2020 2019 % % % MER 1.08 1.07 1.10
The MER ratio is calculated based on total expenses of the Fund to the average net asset value of the Fund calculated on a daily basis.
13. PORTFOLIO TURNOVER RATIO (“PTR”)
2021 2020 2019 PTR (times) 0.54 0.89 0.91
The PTR ratio is calculated based on average of acquisition and disposals of the Fund for the financial year to the average net asset value of the Fund calculated on a daily basis.
14. UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER
The number of units held by the Manager and related party are as follows:
2021 2020 Units RM Units RM The Manager 4,788 5,953 5,789 7,835 RHB Capital Nominees (Tempatan) Sdn Bhd 863,543 1,073,643 11,546 15,627
The units are held beneficially by the Manager for booking purposes. The Manager is of the opinion that all transactions with the related parties have been entered into in the normal course of business at agreed terms between the related parties.
The units held by RHB Capital Nominees (Tempatan) Sdn Bhd, a wholly owned subsidiary of ultimate holding company of the Manager, are under nominees structure.
40 14. UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER (CONTINUED)
The holding company and the ultimate holding company of the Manager is RHB Investment Bank Berhad and RHB Bank Berhad respectively. The Manager treats RHB Bank Berhad group of companies including RHB Investment Bank Berhad and its subsidiaries as related parties.
15. TRANSACTIONS BY THE FUND
Details of transactions by the Fund for the financial year ended 31 March 2021 are as follows:
Percentage Percentage of total Brokers/Financial Value of of total Brokerage brokerage institution trades trades fees fees RM % RM % CIMB Bank Bhd 12,932,528 16.94 - - Malayan Banking Bhd 9,249,000 12.11 - - Citibank Berhad 9,134,010 11.96 - - AmBank Islamic Berhad 8,825,650 11.56 - - AmBank (M) Bhd 7,486,600 9.81 - - Hong Leong Bank Berhad 6,238,800 8.17 - - CIMB Islamic Bank Bhd 4,940,100 6.47 - - Affin Hwang Investment Bank Bhd 4,395,500 5.76 - - Standard Chartered Bank (M) Bhd 3,880,534 5.08 - - RHB Investment Bank Bhd* 3,613,900 4.73 - - Others 5,657,900 7.41 - - 76,354,522 100.00 - -
41 15. TRANSACTIONS BY THE FUND (CONTINUED)
Details of transactions by the Fund for the financial year ended 31 March 2020 are as follows: Percentage Percentage of total Brokers/Financial Value of of total Brokerage brokerage institution trades trades fees fees RM % RM % AmBank (M) Bhd 43,874,800 35.09 - - RHB Investment Bank Bhd* 25,061,640 20.05 - - CIMB Bank Bhd 13,725,170 10.98 - - Affin Hwang Investment Bank Bhd 8,204,200 6.56 - - JPMorgan Chase Bank Berhad 6,565,000 5.25 - - Hong Leong Investment Bank Bhd 5,663,660 4.53 - - Alliance Bank Malaysia Berhad 5,439,000 4.35 - - AmBank Islamic Berhad 5,386,000 4.31 - - Hong Leong Bank Berhad 3,395,200 2.72 - - HSBC Bank (M) Bhd 3,128,100 2.50 - - Others 4,580,930 3.66 - - 125,023,700 100.00 - - * Included in transactions by the Fund are trade conducted with RHB Investment Bank Bhd, the holding company of the Manager. The Manager is of the opinion that all transactions with the related company have been entered into in the normal course of business at agreed terms between the related parties.
42 16. FINANCIAL INSTRUMENTS BY CATEGORIES
2021 2020 RM RM Financial assets Financial assets at fair value through profit or loss (‘FVTPL’) • Unquoted fixed income securities 59,409,331 73,767,994
Financial assets at amortised cost • Bank balances 45,501 51,209 • Deposits with licensed financial institutions 6,729,341 1,287,929 • Amount due from Manager 12,422 60,715 • Other receivables 50,467 50,417 6,837,731 1,450,270
Financial liabilities Financial liabilities at amortised cost • Amount due to Manager 18,621 - • Accrued management fee 58,820 64,959 • Amount due to Trustee 3,529 3,898 • Other payables and accruals 10,229 12,770 91,199 81,627
17. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR
The worsening of the macro-economic outlook as a result of COVID-19, both domestically and globally, has impacted the Fund’s performance during and after the financial year.
The Manager is monitoring the situation closely and will be managing the portfolio to achieve the Fund’s objective.
43 STATEMENT BY MANAGER RHB INCOME FUND 2
We, Dato’ Darawati Hussain and Ong Yin Suen, two of the Directors of RHB Asset Management Sdn Bhd, do hereby state that in the opinion of the Directors of the Manager, the accompanying statement of financial position, statement of income and expenses, statement of changes in net asset value, statement of cash flows and the accompanying notes, 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 the Fund as at 31 March 2021 and of its financial performance and cash flows for the financial year then ended and comply with the provisions of the Deeds.
Dato’ Darawati Hussain Ong Yin Suen Director Director
25 May 2021
44 TRUSTEE’S REPORT TO THE UNITHOLDERS OF RHB INCOME FUND 2
We have acted as Trustee of RHB Income Fund 2 (“the Fund”) for the financial year ended 31 March 2021. To the best of our knowledge, RHB Asset Management Sdn Bhd (“the Management Company”), has operated and managed the Fund in accordance with the following:
(a) limitations imposed on the investment powers of the Management Company and the Trustee under the Deeds, the Securities Commission’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 and other applicable laws;
(b) valuation/pricing is carried out in accordance with the Deeds and any regulatory requirements; and
(c) creation and cancellation of units are carried out in accordance with the Deeds and any regulatory requirements.
During the financial year, a total distribution of 7.2000 sen per unit has been distributed to the unitholders of the Fund. We are of the view that the distribution is not inconsistent with the objectives of the Fund.
For HSBC (Malaysia) Trustee Berhad
Tan Bee Nie Senior Manager, Investment Compliance Monitoring
Kuala Lumpur 25 May 2021
45 INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF RHB INCOMFE FUND 2
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Our opinion
In our opinion, the financial statements of RHB Income Fund 2 (“the Fund”) give a true and fair view of the financial position of the Fund as at 31 March 2021 and of its financial performance and its cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards.
What we have audited
We have audited the financial statements of the Fund, which comprise the statement of financial position as at 31 March 2021, and the statement of income and expenses, statement of changes in net asset value and statement of cash flows for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 10 to 43.
Basis for opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial statements” section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence and other ethical responsibilities
We are independent of the Fund in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By- Laws”) and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.
46 INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF RHB INCOMFE FUND 2 (CONTINUED)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)
Information other than the financial statements and auditors’ report thereon
The Manager of the Fund is responsible for the other information. The other information comprises Manager’s Report, but does not include the financial statements of the Fund and our auditors’ report thereon.
Our opinion on the financial statements of the Fund does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Fund, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Fund or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Manager for the financial statements
The Manager of the Fund is responsible for the preparation of the financial statements of the Fund that give a true and fair view in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards. The Manager is also responsible for such internal control as the Manager determines is necessary to enable the preparation of financial statements of the Fund that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Fund, the Manager is responsible for assessing the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager either intends to liquidate the Fund or to terminate the Fund, or has no realistic alternative but to do so.
47 INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF RHB INCOMFE FUND 2 (CONTINUED)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Fund as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the financial statements of the Fund, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.
(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Manager.
48 INDEPENDENT AUDITORS’ REPORT TO THE UNITHOLDERS OF RHB INCOMFE FUND 2 (CONTINUED)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)
Auditors’ responsibilities for the audit of the financial statements (continued)
(d) Conclude on the appropriateness of the Manager’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Fund or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Fund to cease to continue as a going concern.
(e) Evaluate the overall presentation, structure and content of the financial statements of the Fund, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
OTHER MATTERS
This report is made solely to the unitholders of the Fund and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS PLT (LLP0014401-LCA & AF 1146) Chartered Accountants
Kuala Lumpur 25 May 2021
49 CORPORATE INFORMATION
MANAGER RHB Asset Management Sdn Bhd
REGISTERED OFFICE Level 10, Tower One, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur
PRINCIPAL AND BUSINESS OFFICE Level 8, Tower Two & Three, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur
Email address: [email protected] Tel: 03 - 9205 8000 Fax: 03 - 9205 8100 Website: www.rhbgroup.com
BOARD OF DIRECTORS Mr Yap Chee Meng (Independent Non-Executive Chairman) Mr Chin Yoong Kheong (Senior Independent Non-Executive Director) Dr. Ngo Get Ping (Independent Non-Executive Director) Ms Ong Yin Suen (Managing Director) YBhg Dato’ Darawati Hussain (Independent Non-Executive Director) YBhg Datuk Seri Dr Govindan A/L Kunchamboo (Independent Non-Executive Director)(Appointed with effect from 15 October 2020)
INVESTMENT COMMITTEE MEMBERS Mr Yap Chee Meng (Independent Chairman) YBhg Dato’ Darawati Hussain Puan Sharifatu Laila Syed Ali
CHIEF EXECUTIVE OFFICER Ms Ong Yin Suen
SECRETARY Encik Azman Shah Md Yaman (LS No. 0006901)
50 BRANCH OFFICE
Kuala Lumpur Office B-9-6, Megan Avenue 1 No. 189, Jalan Tun Razak 50400 Kuala Lumpur Tel: 03-2171 2755/ 03-2166 7011 Fax: 03-2770 0022
Shah Alam Office B-3-1, 1st Floor Jalan Serai Wangi G16/G, Alam Avenue Persiaran Selangor, Section 16 40200 Shah Alam Tel: 03-5523 1909 Fax: 03-5524 3471
Sri Petaling Office Level 1 & 2, No 53 Jalan Radin Tengah Bandar Baru Seri Petaling 57000 Kuala Lumpur Tel: 03-9054 2470 Fax: 03-9054 0934
Batu Pahat Office 53, 53-A and 53-B Jalan Sultanah 83000 Batu Pahat, Johor Tel: 07-438 0271/ 07-438 0988 Fax: 07-438 0277
Ipoh Office No.7A, Persiaran Greentown 9 Pusat Perdagangan Greentown 30450 Ipoh, Perak Tel: 05-242 4311 Fax: 05-242 4312
Johor Bahru Office No 34 Jalan Kebun Teh 1 Pusat Perdagangan Kebun Teh 80250 Johor Bahru, Johor Tel: 07-221 0129 Fax: 07-221 0291
2nd Floor, 21 & 23 Jalan Molek 1/30, Taman Molek 81100 Johor Bahru, Johor Tel: 07-358 3587 Fax: 07-358 3581
Kuantan Office 1st Floor, Lot 10, Jalan Putra Square 1 Putra Square 25300 Kuantan, Pahang Tel: 09-517 3611/ 09-517 3612/ 09-531 6213 Fax: 09-517 3615
51 Kuching Office Lot 133, Section 20, Sublot 2 & 3 1st Floor, Jalan Tun Ahmad Zaidi Adruce 93200 Kuching, Sarawak Tel: 082-550 838 Fax: 082-550 508
Yung Kong Abell, Units 1-10 2nd Floor Lot 365 Section 50 Jalan Abell 93100 Kuching, Sarawak Tel: 082-245 611 Fax: 082-230 326
Kota Bharu Office Ground Floor, No 3486-G Jalan Sultan Ibrahim 15050 Kota Bharu, Kelantan Tel: 09-740 6891 Fax: 09-740 6890
Kota Kinabalu Office Lot No. C-02-04, 2nd Floor Block C, Warisan Square Jalan Tun Fuad Stephens 88000 Kota Kinabalu Sabah Tel: 088-528 686/ 088-528 692 Fax: 088-528 685
Melaka Office 581B, Taman Melaka Raya 75000 Melaka Tel: 06-284 4211/ 06-281 4110 Fax: 06-292 2212
Miri Office Lot 1268 & 1269, Second Floor Centre Point Commercial Centre Jalan Melayu 98000 Miri, Sarawak Tel: 085-422 788 Fax: 085- 415 243
Penang Office 3rd Floor, 44 Lebuh Pantai 10300 Georgetown, Penang Tel: 04-264 5639 Fax: 04-264 5640
Prai Office No 38, First Floor Jalan Todak 2 Seberang Jaya 13700 Perai, Penang Tel: 04-386 6670 Fax: 04-386 6528
52 TRUSTEE HSBC (Malaysia) Trustee Berhad
BANKER RHB Bank Berhad
AUDITORS PricewaterhouseCoopers PLT
TAX ADVISER PricewaterhouseCoopers Taxation Services Sdn Bhd
DISTRIBUTORS RHB Asset Management Sdn Bhd RHB Bank Bhd RHB Investment Bank Bhd Affin Bank Bhd Alliance Bank Malaysia Bhd AmBank (M) Bhd AmInvestment Bank Bhd Apex Investment Services Bhd Areca Capital Sdn Bhd CIMB Investment Bank Bhd CIMB Wealth Advisor CUTA – Genexus Advisory Sdn Bhd Hong Leong Bank Bhd iFast Capital Sdn Bhd Kenanga Investors Bhd Manulife Asset Management (Malaysia) Sdn Bhd OCBC Bank (M) Bhd Philip Mutual Bhd Standard Chartered Bank Malaysia Bhd United Overseas Bank (M) Bhd UOB Kay Hian Securities (M) Sdn Bhd
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