1
Investment Objective
• To provide investors with regular income
and capital gain at an acceptable level of risk
by investing primarily in Malaysian public
listed companies with steady and good
growth potential.
Investment Policy
• The main objective of the Investment Policy
is to implement a plan of action to achieve
the highest probability of investment return
from the Fund’s portfolio of securities.
Investment Strategy
• RHB Dynamic Fund seeks regular income
and capital gain. To pursue this goal, the
Fund invests primarily in Malaysian public
listed companies with steady income and
good growth potential. In analyzing
companies, the Investment Manager looks
for businesses that demonstrate leadership
in their respective sectors with strong growth
potential coupled with consistent dividend
policy.
• The Investment Manager uses conservative
valuation parameters, focusing on several key
numbers with respect to the company’s
historical price levels and relative value to
its peer universe. These numbers include
price/earnings multiples of the company,
earnings growth rates, relative price earnings
to growth, dividend yield, cashflow, balance
sheet strength, quality of management, return
on assets and return on investments, among
others. Quarterly earnings expectations and
results are carefully followed, and the Fund’s
portfolio manager’s investment strategy
could differ if key macro and micro factors
materially change.
MANAGER'S OVERVIEW
INVESTMENT OBJECTIVE,
POLICY AND STRATEGY
W e are pleased to present to you the Interim
Report of RHB Dynamic Fund incorporating the
Unaudited Financial Statements for the Six-
Month Financial Period Ended 30 June 2008.
During the financial period under review, the Fund
received an investment income of RM3,266,810
including RM2,224,592 realised gain from the sale
of investments.
The Fund registered a loss of 15.31%* compared to
a loss of 17.89%* in the KLCI. The total return
since inception was 144.95%* as opposed to
the KLCI’s return of 102.52%*.
The Net Asset Value (NAV) per unit of the Fund
decreased 15.30% from RM1.0370 per unit at
end of the last financial year on 31 December
2007 to RM0.8783 per unit on 30 June 2008.
The number of units in circulation decreased
from 72.62 million as at 31 December 2007 to
66.33 million as at 30 June 2008.
The Fund has met its investment objective by
investing primarily in Malaysian public listed
companies with steady and good growth
potential.
FUND INFORMATION
Period of Trust
Fund Category
Fund Type
Relevant Benchmark
Distribution Policy
:
:
:
:
:
Subject to occurence of any events as stated under Clause 11.37 of the
Guidelines on Unit Trust Funds
Equity
Capital Growth and Income
Kuala Lumpur Composite Index (KLCI)
Subject to the availability of income at the end of the financial year
• In addition to those described above, the Fund
may invest in fixed income securities to
preserve the value of the Fund under volatile
market conditions.
*Source: Lipper Hindsight
2
MANAGER'S REPORT
Equity Market Review
(1 January 2008 to 30 June 2008)
Equity Market Outlook & Strategy
The first six months of 2008 proved to be
rather volatile times for global equity markets.
With the continuous strengthening of crude
oil and commodity prices, a weakening US
Dollar as well as further writedowns in the US
banking sector, sentiment remained cautious
and concerns of global inflation emerged. This
is evident with the tightening monetary stance
adopted by most central banks around the
world. Even the US Federal Reserve has given
the indication that they might have to hike
interest rates back up from the 2.0% level to
combat inflation.
Domestically, the Kuala Lumpur Composite
Index (KLCI) was not spared by the heightened
volatility and higher risk aversion that global
equity markets were experiencing. Further
dampening sentiments was the changing
political landscape that gave rise due to the
results of the 12 th General Election. As
sentiments remained subdued with lack of
fresh leads insight coupled with downgrades
by various research houses, the KLCI recorded
a loss of 17.89% for the period under review.
The KLCI started the year 2008 on a strong
footing, racing to an all-time high of 1,516.22
points on 11 January 2008 on the back of
stronger Crude Palm Oil (CPO) prices and
expectations of a stronger Ringgit. The
bullish sentiment soon gave way to concerns
over massive losses on Wall Street, the
possibility of a recession in the US economy
as well as soaring crude oil prices. With the
US Federal Reserve acting swiftly by cutting
interest rates by 125 basis points (bps) to 3.0%,
the local bourse recovered a little but soon
plunged sharply and triggered for the first time
the 10% circuit breaker after the 12th General
Election. Negative news externally, such as the
collapse of Bear Stearns as well as soaring
crude oil prices, saw the KLCI trading in a
narrow band with thinning market volumes.
Even the US Federal Reserve’s move to
further cut interest rates down to 2.0% in April
failed to provide cheer to equity markets
globally. Investor sentiment was further
spooked by inflationary concerns as the
Government announced a significant hike
in petrol prices and electricity tariffs in June
2008. The weak sentiment was further
compounded by the current political scene.
At the end of the review period, the KLCI
lost 258.46 points or 17.89% to close at
1,186.57 points.
Domestically, economic growth is expected
to remain intact for 2008, underpinned by
domestic demand as well as rising intra-Asian
trade, particularly to China, which will
provide some cushion to the economy as
exports are expected to be soft, given the
current economic outlook in the US. However,
Gross Domestic Product (GDP) growth is
expected to be slower in 2H08 on the back of
the recent hike in petrol prices and electricity
tariffs which have given rise to inflationary
pressures. These inflationary pressures, if not
kept in check, would result in softer domestic
demand and private investments. Despite this,
Bank Negara Malaysia (BNM) is still
projecting a GDP growth of 5.0% for 2008. Other
economic fundamentals remain strong with
rising foreign exchange reserves and ample
liquidity in the system. On the interest rate
front, BNM is expected to keep the Overnight
Policy Rate (OPR) stable at 3.5%, with the
flexibility to maneuver should the need arise.
Against this backdrop, the outlook for the
local bourse remains positive, supported by
sustained economic growth, resilient
corporate earnings (although there is the risk
3
of a possible earnings downgrade with the
slowdown in global economies as well as
inflation risks) and attractive valuations.
Having said that, we expect the stock market
to remain volatile with a downside bias in the
short-term, mainly driven by external
developments in the US, concerns over global
inflation as well as the changing political
landscape domestically.
As such, we remain cautiously optimistic on
the local bourse, focusing on fundamentally
sound stocks with good earnings visibility,
strong cashflows and sound management.
From a sector perspective, we continue to like
sectors with strong earnings visibility and
lower correlation to global macroeconomic
conditions, given the heightened external
risks.
4
PORTFOLIO STRUCTURE
PORTFOLIO STRUCTURE AS AT 30 JUNE 2008
As at 30 June 2008, the Fund has invested 77.21% in equities and the balance of 22.79%
in liquid assets and other net current assets.
In the portfolio structure as at 31 December 2007, the Fund invested 86.46% in equities
and the balance of 13.54% in liquid assets and other net current assets.
As at 30 June 2008, the top five holdings in the portfolio were Kumpulan Sime Darby Bhd,
IOI Corporation Bhd, AmBank Bhd, Affin Bank Bhd and Malayan Banking Bhd.
Changes in core holdings for the period included the addition of AmBank Bhd, Affin
Bank Bhd and Malayan Banking Bhd replacing Bumiputra-Commerce Holdings Bhd,
MMC Corporation Bhd and Telekom Malaysia Bhd.
The Fund’s detailed holdings in the various sectors is shown below:-
PERFORMANCE OF FUND AND BENCHMARK
Since Inception
(15 September 1992)
%
Total Return**
RHB Dynamic Fund
KLCI
144.95
102.52
Two
Years
%
One
Year
%
21.25
29.72
(10.10)
(12.39)
Six-Month
%
(15.31)
(17.89)
Source: Lipper Hindsight
** The above Total Return and Average Annual Return are indicative returns based on daily Net
Asset Value of a unit since inception.
Note: Unit prices and returns may fluctuate, past performance figures shown are not necessarily
indicative of future performance.
Three
Years
%
23.36
33.57
Four
Years
%
23.19
44.73
Five
Years
%
38.98
71.48
Since Inception
(15 September 1992)
%
Average Annual Return**
RHB Dynamic Fund
KLCI
5.83
4.57
Two
Years
%
One
Year
%
10.10
13.88
(10.05)
(12.33)
Six-Month
%
(28.34)
(32.65)
Three
Years
%
7.24
10.12
Four
Years
%
5.35
9.68
Five
Years
%
6.80
11.38
C o n s t r u c t io n
1 .7 1 %
In f r a s t r u c tu r e
3 .6 5 %
P la n ta t io n s
1 7 .0 0 %
W a r r a n ts /R ig h ts
1 .1 6 %
P r o p e r t ie s
0 .9 3 %
L iq u id a s s e ts a n d o th e r n e t
c u r r e n t a s s e ts
2 2 .7 9 %
C o n s u m e r P r o d u c ts
3 .5 4 %
T r a d in g /S e r v ic e s
3 2 .4 5 %
F in a n c e
1 2 .7 1 %
In d u s t r ia l P r o d u c t
4 .0 6 %
5
Portfolio Composition (%)Trading/ServicesConsumer ProductsIndustrial ProductsConstructionPlantationPropertyFinanceInfrastructureTechnologyWarrant/RightsMesdaq TradeForeign SecuritiesREITSInitial Public OfferingLocal Loan Stocks, Notes and BondsLiquid assets and other net current assets
Total Portfolio Holdings
Net Assets Attributable to Unitholders (RM)
Units in Circulation
Net Asset Value (RM) per unit
Seller’s Price (RM)Buyer’s Price (RM)Year’s Seller’s Price - Highest (RM)Year’s Seller’s Price - Lowest (RM)Year’s Buyer’s Price - Highest (RM)Year’s Buyer’s Price - Lowest (RM)
Management Expense Ratio (%)
Portfolio Turnover (Times)
Total Return (%)Return on Capital (%)Return on Income (%)
Kuala Lumpur Composite Index (%)
Distribution Per Unit (Sen)Interim - Gross/NetFinal - Gross/Net
Other Performance Data
Performance Data
48.892.863.861.031.340.92
23.363.210.62
--
0.51--
0.0113.39
100.00
216,760,376
310,220,000
0.6987
0.74590.70370.76800.72690.72450.6857
1.59
0.66
(7.55)(7.55)
-
(0.84)
--
31 Dec ‘05
46.224.284.803.775.400.72
15.854.05
-0.13
--
0.960.18
-13.64
100.00
90,739,289
113,060,000
0.8026
0.86100.81230.76800.72690.72450.6857
1.63
0.95
15.4315.43
-
21.83
--
31 Dec ‘06
5,000 and below
5,001 to 10,000
10,001 to 50,000
50,001 to 500,000
500,001 and above
Total *
*Note: Including Manager's Stock.
Size of Holdings Unitholders Unitholdings
BREAKDOWN OF UNITHOLDINGS
Number % (‘000) units %
2,509
789
1,122
183
6
4,609
54.44
17.12
24.34
3.97
0.13
100.00
6,535,000
6,144,000
24,368,000
19,866,000
9,412,000
66,325,000
9.85
9.26
36.74
29.96
14.19
100.00
43.861.863.596.00
10.472.42
14.032.47
-0.611.15
----
13.54
100.00
75,306,726
72,620,000
1.0370
1.03701.03701.03700.99771.03700.9977
1.52♦
0.73#
27.50**27.50**
-
31.62**
--
31 Dec ‘07
♦ The Fund recorded a lower Management Expense Ratio in 2007 as a result of a lower average net asset value.
# The lower PTR in 2007 vis-a-vis 2006 was due to the more defensive portfolio comprising of quality blue chips put in
place to weather the volatility of the market in 2007.
** Source: Lipper Hindsight
6
The notes on pages 8 to 22 form an integral part of these financial statements.The notes on pages 8 to 22 form an integral part of these financial statements.
INVESTMENT INCOME
EXPENSES
Management fee
Trustees’ fee
Auditor’s remuneration
Tax agent’s fee
Administrative expenses
Net income before finance
cost and taxation
Taxation
Increase in net assets
attributable to unitholders
Net income after finance cost and after
taxation is made up as follows:
Realised amount
STATEMENT OF ASSETS AND
LIABILITIES AS AT 30 JUNE 2008
(UNAUDITED)
Note 31.12.2007
RM
LISTED INVESTMENTS
LIQUID ASSETS
Bank balance
Short term deposits
OTHER ASSETS
Amount due from stockbrokers
Interest receivable
Dividend receivable
Tax recoverable
TOTAL ASSETS
LIABILITIES
Taxation
Amount due to stockbrokers
Amount due to Trustee
Amount due to Manager
Other payables and accruals
LIABILITIES (EXCLUDING
NET ASSETS ATTRIBUTABLE
TO UNIT HOLDERS)
NET ASSETS ATTRIBUTABLE
TO UNITHOLDERS
REPRESENTED BY:
Fair value of outstanding units
Units in circulation
Net asset value per unit
6
7
8
9
INCOME STATEMENT
FOR THE FINANCIAL PERIOD ENDED
30 JUNE 2008 (UNAUDITED)
10
11
12
13
8,071,023
(671,253)
(31,325)
(4,750)
(1,900)
(28,900)
(738,128)
7,332,895
(752,524)
6,580,371
6,580,371
UNAUDITED FINANCIAL STATEMENTS AND
NOTES TO THE FINANCIAL STATEMENTS
30.06.2008
RM
44,978,775
44,978,775
10,087
12,807,403
12,817,490
962,045
4,260
58,694
-
1,024,999
58,821,264
221,027
-
3,435
318,077
23,325
565,864
58,255,400
58,255,400
66,325,000
0.8783
3,266,810
(484,392)
(22,605)
(5,250)
(1,500)
(14,942)
(528,689)
2,738,121
(187,000)
2,551,121
2,551,121
Note
01.01.2007
to
30.06.2007
RM
01.01.2008
to
30.06.2008
RM
65,111,813
65,111,813
50,787
9,111,000
9,161,787
2,700,804
2,557
89,527
75,258
2,868,146
77,141,746
-
1,370,438
4,439
410,604
49,539
1,835,020
75,306,726
75,306,726
72,620,000
1.0370
7
The notes on pages 8 to 23 form an integral part of these financial statements.The notes on pages 8 to 23 form an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS
ATTRIBUTABLE TO UNITHOLDERS FOR
THE FINANCIAL PERIOD ENDED
30 JUNE 2008 (UNAUDITED)
NET ASSETS VALUE AT
THE BEGINNING OF THE
FINANCIAL PERIOD
Movement due to units
created and released during
the financial period:
Amounts on creation of units
Amounts on release of units
Net increase in net assets attributable
to unitholders during the financial period:
Net income for the financial period
Net change in fair value reserve
NET ASSETS ATTRIBUTABLE
TO UNITHOLDERS AT END
OF THE FINANCIAL PERIOD
CASH FLOW FROM
INVESTING AND
OPERATING ACTIVITIES
Proceeds from sale of investments
Purchase of investments
Dividends received
Interest received
Tax refund from IRB
Management fee paid
Trustees’ fee paid
Payment for other fees and expenses
Net cash inflow from investing
and operating activities
CASH FLOW FROM
FINANCING ACTIVITIES
Cash proceeds from units created
Payment for release of units
Net cash outflow from financing
activities
Net increase/(decrease) in cash
and cash equivalents
Cash and cash equivalents at
beginning of the financial period
Cash and cash equivalents at
end of the financial period
ANALYSIS OF CASH AND
CASH EQUIVALENTS COMPRISE:
Bank balance
Short term deposits
90,739,289
-
(26,649,464)
64,089,825
6,580,371
11,584,554
82,254,750
59,585,798
(37,982,925)
925,864
187,990
-
(687,116)
(32,065)
(23,054)
21,974,492
-
(26,824,315)
(26,824,315)
(4,849,823)
12,769,784
7,919,961
50,961
7,869,000
7,919,961
CASH FLOW STATEMENT FOR THE
FINANCIAL PERIOD ENDED
30 JUNE 2008 (UNAUDITED)
75,306,726
6,510
(6,248,050)
69,065,186
2,551,121
13,360,907
58,255,400
33,779,944
(24,414,900)
681,150
191,704
307,779
(505,902)
(23,609)
(47,906)
9,968,260
6,510
(6,319,067)
(6,312,557)
3,655,703
9,161,787
12,817,490
10,087
12,087,403
12,817,490
01.01.2007
to
30.06.2007
RM
01.01.2008
to
30.06.2008
RM
01.01.2007
to
30.06.2007
RM
01.01.2008
to
30.06.2008
RM
8
The Unit Trust Fund (hereinafter referred to as ‘the
Fund’) was constituted under the name DCM-RHB
Dynamic Fund pursuant to the execution of the Deed
dated 26 May 1992 between the Manager, RHB
Investment Management Sdn Bhd*, the Trustee,
Mayban Trustees Bhd and the registered Unitholders
of the Fund. In accordance with a Supplementary
Deed dated 1 July 1997, the Fund changed its name
to RHB Dynamic Fund. Pursuant to this, the
Manager on 12 June 2008 had registered and lodged
with the Securities Commission a Master Deed
that also covers the Fund. This Master Deed shall
hereafter supersede the aforesaid Deeds.
The principal activity of the Fund is to invest in
‘Permitted Investments’ as defined under Item 15 of
Schedule 1 of the Master Deed, which comprises
securities (including unlisted securities in Malaysia),
other collective investment schemes, futures contracts,
securities lending, liquid assets and any other forms
of investment as may be approved by the relevant
authorities from time to time. The Fund commenced
operations on 15 September 1992 and will continue
its operations until terminated by the Trustee as
provided under Clause 25 of the Master Deed.
The main objective of the Fund is to provide
Unitholders with regular income and capital gain
at an acceptable level of risk by investing primarily
in Malaysian public listed companies with steady
and good growth potential.
The Manager, a company incorporated in
Malaysia, is a wholly-owned subsidiary of
RHB Investment Bank Berhad, effective from
6 January 2003. Its principal activities include
rendering of investment management services to
institutions, trust funds, pension and retirements
funds, insurance funds, private clients and
management of unit trust funds.
NOTES TO THE UNAUDITED FINANCIAL
STATEMENTS - 30 JUNE 2008
1. THE FUND, THE MANAGER AND THEIR
PRINCIPAL ACTIVITIES
2.FINANCIAL RISK MANAGEMENT
OBJECTIVES AND POLICIES
The Fund is exposed to a variety of risks
which include single issuer risk, fund
management risk, liquidity risk, interest rate
risk and credit risk.
Financial risk management is carried out
through internal control systems and
adherence to the investment restrictions as
stipulated by the Guidelines on Unit Trust
Funds issued by the Securities Commission.
Single issuer risk
The value of the Fund’s holding in the share
capital of any single issuer must not exceed ten
percent (10%) of the net asset value. The Fund
is also restricted to investment in transferable
securities and money market instruments
issued by any single issuer of not more than
fifteen percent (15%) of its net asset value.
Furthermore, the Fund is restricted to invest
in securities issued by and securities relating to
any group of companies of not more than
twenty percent (20%) of its net asset value.
Under such restrictions, the exposure risk to
the securities of any single issuer or any one
group of companies is minimised.
Fund management risk
The selection of securities which make up
the investments of the Fund is subjective and the
securities selected may perform better or worse
than the overall market. This risk is managed by
having a professional and experienced Fund
Manager who has access to research materials
and independent market analysis to enable fully
informed decisions in investments to be made.
Liquidity risk
The Fund maintains sufficient level of liquid
assets, after consultation with the Trustee,
to meet anticipated payments and cancellations
of units by unit holders. Liquid assets comprise
cash, deposits with licensed financial institutions
and other instruments which are capable of
being converted into cash with 7 days. The
Fund has a policy of maintaining a minimum
level of five percent (5%) of liquid assets at
all times to reduce the liquidity risk.
With effect from 1 January 2008, the entire assets and
liabilities of the unit trust businesses of RHB Unit Trust
Management Berhad (“RHBUTM”) was transferred to
RHB Investment Management Sdn Bhd (“RHBIM”)
(formerly known as RHB Asset Management Sdn Bhd)
by way of a Business Transfer Agreement and a Vesting
Order. Accordingly, RHBIM has assumed the role of
the Manager for all the unit trust funds managed by
RHBUTM prior to 1 January 2008.
*
9
The Fund issues cancellable units, which are
cancelled at the holder’s option and are
classified as financial liability. Cancellable
units can be put back to the Fund at any time
for cash equal to a proportionate share of the
Fund’s net asset value. The outstanding units
is carried at the redemption amount that is
payable at the balance sheet date if the holder
exercises the right to put the units back to
the Fund.
Units are created and cancelled at the holder’s
option 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 is
calculated by dividing the net assets attributable
to unitholders with the total number of
outstanding units. In accordance with the
Securities Commission Guidelines on Unit
Trust Funds, investment positions are valued
based on the last traded market price for the
purpose of determining the net asset value per
unit for creations and cancellations.
3.2 CREATION AND CANCELLATION
OF UNITS
Credit risk
Credit risk refers to the ability of an issuer or a
counter party to make timely payments of
interest, principals and proceeds from realisation
of investments. The Fund, as required by the
Guidelines and Deed, maintains its liquidity
level at five percent (5%) of its net asset value
to meet redemption requests.
The credit risk arising from placements of
deposits in licensed financial institutions is
managed by ensuring that the Fund will only
place deposits in reputable licensed financial
insti tutions. For amount due from
stockbrokers, the sett lement terms are
governed by the relevant rules and regulations
as prescribed by Bursa Securities. The
settlement terms of the proceeds from the
creation of units receivable from the Manager
are governed by the Securities Commission’s
Guidelines on Unit Trust Funds.
2. FINANCIAL RISK MANAGEMENT
OBJECTIVES AND POLICIES
(CONTINUED)
3. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
3.1 BASIS OF PREPARATION OF THE
FINANCIAL STATEMENTS
The financial statements of the Fund have been
prepared under the historical cost convention
in accordance with the Financial Reporting
Standards (‘FRS’), the MASB Approved
Accounting Standards in Malaysia for Entities
other than Private Entities and the Securities
Commission’s Guidelines on Unit Trust Funds.
Standards and amendments to published
standards and interpretations that are
effective
The new account ing s tandards and
amendments to pub l i shed s t andards
effective for the Fund’s financial period
beginning on or after 1 January 2007
are as follow:
The risk that the other party in an agreement
will default. In general, counterparty risk can be
reduced by having an organisation with extremely
good credit act as an intermediary between the
two parties.
Counter party risk
FRS 124 Related Party Disclosures
The new standards that has been issued but the
effective date of which has yet to be
determined by MASB is:
FRS 139 F i n a n c i a l I n s t r u m e n t s :
Recognition and Measurement. The new
standard establishes p r inc ip l e s for
recognising and measuring financial
assets, financial liabilities and some
contracts to buy and sell non-financial item.
Hedge accounting is permitted only under
strict circumstances. The Fund will apply
this standard when effective.
•
Interest rate risk
The Fund is exposed to interest rate risk.
Changes in interest rate will affect the value
of the investments and its returns. To manage
the risk, investments will be concentrated in
investment grade issued by financial institutions
and companies determined by the Manager.
10
3.11 SEGMENTAL INFORMATION
A business segment is a group of assets and
operations engaged in providing products or
services that are subject to risks and returns
that are different from those of other business
segments. A geographical segment is engaged
in providing products or services within a
particular economic environment that are
subject to risks and returns that are different
from those of segments operating in other
economic environments. In the opinion of
the Manager, all activities of the Fund are in
the single business of investment activities
conducted mainly in Malaysia. Consequently,
no segment reporting is provided in the Fund’s
financial statements.
The net asset value per unit is computed for
each dealing day. The price at which units are
created or cancelled is calculated by reference
to the net asset value per unit as at the close of
business on the relevant dealing day. Units in
the Fund are classified as financial liability in
the Statement of Net Assets and are stated at
fair value representing the price at which
unitholders can redeem the units from the Fund.
3.4 PROCEEDS AND PAYMENTS ON
CREATION AND CANCELLATION OF
UNITS
3.5 FINANCE COST
Proposed distributions to unit holders of
redeemable shares are recognised in the income
statement upon approval by the Board of
Directors of the Manager. The distribution to
the unitholders is recognised as finance cost in
the income statement.
3.6 INCOME RECOGNITION
Interest income from short-term deposits and
unlisted fixed income securities is recognised
on an accrual basis.
Dividends from Malaysian listed securities are
recognised on the ex-dividend date.
Realised gain and loss on sale of listed
investments is arrived at after accounting for
cost of investments, determined on the weighted
average cost method.
3.7 TAXATION
Current tax expense is determined according
to the Malaysian tax laws of the jurisdiction
in which the Company operates and includes
all taxes based upon the taxable profits.
3. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
3.3 INVESTMENTS
In accordance with the Master Deed, the
listed investments are valued in the financial
statements at the last done market price listed on
the Bursa Malaysia Securities Berhad as at the
date of the statement of assets and liabilities.
The unrealised gains and losses are taken to the
fair value reserve and the unrealised gains are
not distributable.
3.8 CASH AND CASH EQUIVALENTS
For the purpose of cash flow statement, cash
and cash equivalents comprise cash and bank
balances and deposits that are readily
convertible to known amounts of cash and
which are subject to an insignificant risk of
changes in value.
3.9 AMOUNT DUE FROM/TO STOCKBROKERS
Amount due from/to stockbrokers is carried
at approved transaction amount as stated in
contract notes.
3.10 PRESENTATION AND FUNCTIONAL
CURRENCY
The financial statements are presented in
Ringgit Malaysia, which is the Company’s
functional and presentation currency.
11
3.12 FINANCIAL INSTRUMENTS
Financial instruments comprise financial assets
and financial liabilities. Fair value is the amount
at which a financial asset could be exchanged
or a financial liability settled, between
knowledgeable and willing parties in an arm’s
length transaction. The information presented
herein represents the estimates of fair values
as at the date of the statement of assets and
liabilities.
Where available, quoted and observable market
prices are used as the measure of fair values.
Where such quoted and observable market prices
are not available, fair values are estimated based
on a range of methodologies and assumptions
regarding risk characteristics of various financial
instruments, discount rates, estimates of future
each cash flows and other factors. Changes in
the uncertainties and assumptions could
materially affect these estimates and the
resulting fair value estimates.
A range of methodologies and assumption have
been used in deriving the fair values of the Fund’s
financial statements at the date of the
statement of assets and liabilities. The total
fair value of each financial instrument is not
materially different from the total carrying
value.
The fair values are based on the following
methodologies assumptions:
For deposits and placements with financial
institutions with maturities of less than
three months, the carrying value is a
reasonable estimate of fair value. For
deposits and placements with maturities
of three months and above, the estimated
fair value is based on discounted cash flows
using prevailing money market interest
rates at which similar deposits and
placmements would be made with financial
institutions of similar credit risk and
remaining period to maturity.
(b) Other short term financial instruments
Other short term financial instruments
comprise interest receivable, payables and
accruals. The carrying values of the assets
and liabilities are assumed to approximate
their fair values due to the short tenure
of less than one year.
CRITICAL ACCOUNTING ESTIMATES
AND JUDGEMENTS IN APPLYING
ACOUNTING POLICIES
The preparation of financial statements in
conformity with FRS requires the use of certain
critical accounting estimates and exercise of
judgement by management in the process of
applying the Company’s accounting policies.
Estimates and judgements are continually
evaluated and are based on historical
experience and other factors, including
expectations of future events that are believed
to be reasonable under the circumstances. The
resulting accounting estimates will, by
definition, seldom equal the related actual
results.
3. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
(a) Short term deposits
4.
NET ASSETS ATTRIBUTABLE TO
UNITHOLDERS
5.
In accordance with the provisions of the
Master Deed, listed investments and
investments with prices quoted in over the
counter markets or by market makers are
stated at the last traded price on the valuation
date for the purpose of determining Net Asset
Value per unit for creations and cancellations
and for various fee calculation. Net assets
attributable to unitholders represent a liability
in the balance sheet, carried at the redemption
amount that would be payable at the balance
sheet date if the unitholder exercised the right
to redeem unit of the Fund.
12
6. INVESTMENTS
(i) Listed investments are as follows:
QUANTITY NAME OF COUNTER
AGGREGATE
COST
RM
MARKET
VALUE AS AT
30.06.2008
RM
MARKET VALUE
AS AT 30.06.2008
EXPRESSED AS A
PERCENTAGE OF
VALUE OF THE FUND
%
CONSTRUCTIONGamuda BhdMalaysian Resources Corporation BhdWCT Bhd
CONSUMER PRODUCTSBritish American Tobacco (M) BhdPPB Group BhdUMW Holdings Bhd
FINANCEAlliance Finance Group BhdBumiputra-Commerce Holdings BhdMalayan Banking BhdPublic Bank Bhd
INDUSTRIAL PRODUCTSCoastal BhdKNM Group BhdTSH Resources Bhd
INFRASTRUCTUREDiGi.Com BhdLingkaran Trans Kota Holdings Bhd
PLANTATIONSAsiatic Development BhdBousted Holdings BhdIOI Corporation BhdKuala Lumpur Kepong BhdKulim (Malaysia) BhdKwantas Corporation Bhd
PROPERTIESSP Setia BhdYNH Property Bhd
216,461964,883139,816
1,321,160
842,132753,072266,378
1,861,582
570,4401,584,2804,012,0231,643,759
7,810,322
992,934921,584674,769
2,589,287
708,357493,648
1,202,005
1,212,510829,619
4,368,923711,000
1,365,59510,800
8,498,447
400,642423,043
823,685
70,000472,000101,800
20,00067,50075,000
196,800226,000451,250180,000
394,800136,000220,000
69,000150,000
159,000152,400696,00052,450
170,0002,700
100,000140,000
163,800519,200311,508
994,508
885,000729,000450,000
2,064,000
545,1351,808,0003,181,3131,872,000
7,406,448
868,560863,600631,400
2,363,560
1,649,100477,000
2,126,100
1,303,800830,580
5,185,200923,120
1,649,0009,990
9,901,690
294,000246,400
540,400
0.280.890.54
1.71
1.521.250.77
3.54
0.943.105.463.21
12.71
1.491.481.09
4.06
2.830.82
3.65
2.241.438.901.582.830.02
17.00
0.510.42
0.93
13
6. LISTED INVESTMENTS (CONTINUED)
(i) Listed investments are as follows (continued):
QUANTITY NAME OF COUNTER
AGGREGATE
COST
RM
MARKET
VALUE AS AT
30.06.2008
RM
MARKET VALUE
AS AT 30.06.2008
EXPRESSED AS A
PERCENTAGE OF
VALUE OF THE FUND
%
QUANTITY NAME OF COUNTER
AGGREGATE
COST
RM
MARKET
VALUE AS AT
31.12.2007
RM
CONSTRUCTIONMalaysian Resources Corporation BhdSunway Holdings BhdWCT Engineering Bhd
CONSUMER PRODUCTSUMW Holdings Bhd
FINANCEAlliance Malaysia BhdAMMB Holdings BhdBumiputra-Commerce Holdings BhdMalayan Banking BhdPublic Bank Bhd
669,000896,600138,900
90,000
86,000303,000356,000295,000150,000
MARKET VALUE
AS AT 31.12.2007
EXPRESSED AS A
PERCENTAGE OF
VALUE OF THE FUND
%
TRADING/SERVICESBerjaya Sports Toto BhdDialog Group BhdGenting BhdKencana Petroleum BhdSime Darby BhdMISC BhdMISC Bhd-ForeignMMC Corporation Bhd* MY E G. Services BhdPLUS Expressways BhdRamunia BhdResorts World BhdSapuraCrest Petroleum BhdTanjong Public Limited CompanyTelekom Malaysia BhdTelekom Malaysia International Bhd
WARRANTS/RIGHTSKNM Group BhdSP Setia BhdVastalux Energy BhdWCT Bhd
319,300157,400
84,400386,000625,000171,800
37,000592,000801,900350,000500,000100,000400,200
22,000390,900340,900
34,00075
282,000476,360
1,330,032244,558446,030795,009
4,028,3501,264,196
330,6992,007,619
690,6881,075,509
740,900293,293518,093313,807624,068
2,676,065
16,688,227
136,00022
211,500139,090
486,612
41,982,677
1,551,798210,916472,640687,080
5,781,2501,417,350
307,1001,633,920
725,720906,500760,000260,000552,276301,400
1,243,0622,096,535
18,907,547
215,90032
211,500247,090
674,522
44,978,775
2.660.360.811.189.922.430.532.811.241.561.300.450.950.522.133.60
32.45
0.370.000.360.43
1.16
77.21
* Mesdaq Trade
1,609,4681,706,273
270,609
3,586,350
973,976
973,976
878,6281,161,0042,419,5853,276,8181,318,634
9,054,669
1,705,9501,649,7441,159,815
4,515,509
1,404,000
1,404,000
451,5001,151,4003,916,0003,392,5001,650,000
10,561,400
2.272.191.54
6.00
1.86
1.86
0.601.535.204.512.19
14.03
14
6. LISTED INVESTMENTS (CONTINUED)
(ii) Listed investments are as follows (continued):
QUANTITY NAME OF COUNTER
AGGREGATE
COST
RM
MARKET
VALUE AS AT
31.12.2007
RM
MARKET VALUE AS
AT 31.12.2007
EXPRESSED AS A
PERCENTAGE OF
VALUE OF THE FUND
%
INDUSTRIAL PRODUCTSCoastal BhdTSH Resources BhdWah Seong Corporation Bhd
INFRASTRUCTUREDiGi.Com Berhad
PLANTATIONAlliance Finance GroupAsiatic Development BhdIOI Corporatioin BhdKuala Lumpur Kepong BhdKulim (Malaysia) Bhd
PROPERTYNaim Cendera Holdings BhdSP Setia BhdYNH Property Bhd
TRADING/SERVICESBerjaya Sports Toto BhdGenting BhdKencana Petroleum BhdSime Darby BhdMagnum Corporation BhdMISC BhdMISC Bhd-ForeignMMC Corporation Bhd* MY E.G Services BhdPetra Perdana BhdPLUS Expressways BhdResorts World BhdSapuraCrest Petroleum BhdTanjong Public Limited CompanyTelekom Malaysia BhdTenaga Nasional Bhd
WARRANTS/RIGHTSAMMB Holdings BhdSP Setia BhdWCT Engineering Bhd
394,800276,000200,000
75,000
135,90050,000
500,00088,050
205,000
110,000185,550140,000
307,000372,400506,000610,000265,000252,00067,000
385,000841,000150,000350,000476,000997,00044,000
315,900285,000
37,87530,925
400,000
992,934844,404493,118
2,330,456
769,954
769,954
393,339254,832
2,190,961527,974
1,397,750
4,764,256
584,007673,866423,043
1,680,916
1,197,0041,968,0291,042,1623,733,874
866,4711,854,350
609,0012,647,032
724,366769,547
1,075,5091,258,2441,072,447
627,6143,242,5962,647,910
25,336,156
128,7759,300
120,000
258,075
48,754,808
1,026,480888,720788,000
2,703,200
1,860,000
1,860,000
418,572432,500
3,875,0001,532,0701,629,750
7,887,892
519,200924,039378,000
1,821,239
1,550,3502,941,9601,244,7607,259,000
869,2002,457,000
663,3003,580,500
866,230810,000
1,148,0001,846,8801,575,260
814,0003,538,0802,736,000
33,900,520
128,7759,278
320,000
458,053
65,111,813
1.361.181.05
3.59
2.47
2.47
0.560.575.152.032.16
10.47
0.691.230.50
2.42
2.063.911.659.641.153.260.884.761.151.081.522.452.091.084.703.63
45.01
0.170.010.43
0.61
86.46
* Mesdaq Trade
15
NO. BROKER
VALUE OF
TRADES
RM
PERCENTAGE
OF TOTAL
TRADES
%
BROKERAGE
FEES
RM
PERCENTAGE
OF TOTAL
BROKERAGE
FEES
%
1
2
3
4
5
6
7
8
9
10
RHB Investment Bank Bhd
HLG Securities Sdn Bhd
Hwang-DBS Investment Bhd
Aseambankers Malaysia Bhd
CIMB Investment Bank Bhd
Kenanga Investment Bank Bhd
Affin Investment Bank Bhd
AmInvestment Bank Bhd
MIDF Amanah Investment Bank Bhd
OSK Investment Bank Bhd
17,455,261
6,564,268
4,879,943
4,621,969
4,506,925
3,952,555
3,222,754
3,148,731
2,781,499
2,421,218
53,555,123
32.59
12.26
9.11
8.63
8.42
7.38
6.02
5.88
5.19
4.52
100.00
34,976
13,129
9,771
9,244
9,027
7,932
6,464
6,297
5,563
4,842
107,245
32.61
12.24
9.11
8.62
8.42
7.40
6.03
5.87
5.19
4.51
100.00
Included in transactions with other brokers are trades conducted on normal terms in the
stockbroking industry with RHB Investment Bank Bhd, a company related to the Manager amounting
to RM17,455,261 (30.6.2007: RM118,403,916).
(iii) Transactions with brokers
Details of transactions with all 10 brokers for the financial period ended 30 June 2008 are as
follows:
6. LISTED INVESTMENTS (CONTINUED)
NO. BROKERVALUE OF
TRADES
RM
PERCENTAGE
OF TOTAL
TRADES
%
BROKERAGE
FEES
RM
PERCENTAGE
OF TOTAL
BROKERAGE
FEES
%
1
2
3
4
5
6
7
8
9
RHB Investment Bank Bhd
Hwang-DBS Investment Bank Bhd
OSK Investment Bank Bhd
HLG Securities Sdn Bhd
AmInvestment Bank Bhd
CIMB Investment Bank Bhd
Aseambankers Malaysia Bhd
Affin Investment Bank Bhd
MIDF Amanah Investment Bank Bhd
38,303,154
12,944,054
12,803,967
10,453,806
10,270,770
8,847,673
7,818,232
7,327,345
7,272,939
116,041,940
33.01
11.16
11.03
9.01
8.85
7.62
6.74
6.31
6.27
100.00
83,766
28,653
27,596
20,834
21,631
19,382
16,216
15,302
15,700
249,080
33.63
11.50
11.08
8.37
8.69
7.78
6.51
6.14
6.30
100.00
Included in transactions with other brokers are trades conducted on normal terms in the stockbroking
industry with RHB Investment Bank Bhd, a company related to the Manager amounting to
RM38,303,154 (31.12.2006: RM118,403,916).
(iii) Transactions with brokers
Details of transactions with the all brokers for the financial year ended 31 December 2007 are as
follows: (Transactions were effected with a total of 9 brokers only)
16
8. OTHER PAYABLES AND ACCRUALS31.12.2007
RM
30.06.2008
RM
9,500
3,800
36,239
49,539
Auditor’s remuneration
Tax agent’s fee
Sundry payables and accruals
4,750
1,900
16,675
23,325
Interest bearing the earlier of contractual repricing within 1 year
Deposits with licensed financial institution:
- Commercial Banks 9,111,000
9,111,000
7. SHORT TERM DEPOSITS
31.12.2007
RM
12,807,403
12,807,403
30.06.2008
RM
Weighted average effective interest rate
Deposits with licensed financial institution:
- Commercial Banks 3.43
3.43
31.12.2007
%
3.41
3.41
30.06.2008
%
9. NUMBER OF UNITS IN CIRCULATION AND NET ASSETS ATTRIBUTABLE TO
UNITHOLDERS
As at the beginning of the financial period/year
Created during the financial period/year
Released during the financial period/year
Net increase in net assets attributable
to unitholders
Net change in fair value reserve
As at the end of the financial period/year
Approved size of the Fund
90,739,289
60,243
(38,133,686)
12,164,835
10,476,045
75,306,726
113,060,000
65,000
(40,505,000)
-
-
72,620,000
750,000,000
31.12.2007
RMUnits
75,306,726
6,510
(6,248,050)
2,551,121
13,360,907
58,255,400
72,620,000
7,000
(6,302,000)
-
-
66,325,000
750,000,000
30.06.2008
RMUnits
In accordance with the Securities Commission’s approval letter dated 4 June 1998, the maximum
number of units that can be issued out for circulation is 750,000,000. As at 30 June 2008, the number
of units not yet issued is 683,675,000 (31.12.2007: 677,380,000).
17
10. INVESTMENT INCOME
Gross dividends
Interest income
Realised gain on sale of investments
1,086,577
185,707
6,798,739
8,071,023
01.01.2007
to
30.06.2007
RM
01.01.2008
to
30.06.2008
RM
848,811
193,407
2,224,592
3,266,810
Item 10 of Schedule 1 of the Master Deed provides that the Manager shall be entitled at the rate
agreed between the Manager and the Trustee which rate shall not exceed 1.50% of the net asset value
of the Fund, calculated on a daily basis.
The management fee provided in the financial statements amounted to 1.50% per annum based on
the net asset value of the Fund, calculated on a daily basis for the financial period.
11. MANAGEMENT FEE
Item 11 of Schedule 1 of the Master Deed provides that the Trustees’ fee shall not exceed 0.10% of
the net asset value of the Fund but such rate shall not fall below 0.07% of the net asset value of the
Fund calculated on a daily basis in addition to a custodian service fee.
The trustees’ fee provided in the financial statements is 0.07% per annum based on the net asset value
of the Fund, calculated on a daily basis.
12. TRUSTEES’ FEE
13. TAXATION
(a) Tax charge for the financial period
01.01.2007
to
30.06.2007
RM
01.01.2008
to
30.06.2008
RM
Current taxation
Underprovision of tax in prior years
187,000
-
187,000
283,000
469,524
752,524
18
(b) Numerical reconciliation of income tax expenses
The tax on the income before taxation differs from theoretical amount that would arise using the
statutory income tax rate of Malaysia as follows:
1,979,882
(1,877,778)
180,896
283,000
469,524
752,524
711,911
(649,619)
124,708
187,000
-
187,000
Tax calculated at a tax rate of 26% (30.06.2007:27%)
Tax effects of:
- Income not subject to tax
- Expenses not deductible for tax expenses
Tax expense
Underprovision of tax in prior years
2,738,121 7,332,895
01.01.2007
to
30.06.2007
RM
01.01.2008
to
30.06.2008
RM
13. TAXATION (CONTINUED)
14. MANAGEMENT EXPENSE RATIO (‘MER’)
M a n a g e m e n t e x p e n s e r a t i o i n c l u d e s management fee , Trus tees ’ f ee , auditor’s
remuneration, tax agent’s fee and other administrative expenses which is calculated as follows:
MER = ( A + B + C + D + E) x 100
F
MER
Management fee
Trustees’ fee
Auditor’s remuneration
Tax agent’s fee
Administrative expenses
Average net asset value of the Fund, calculated on a daily basis
A =
B =
C =
D =
E =
F =
0.820.81
01.01.2007
to
30.06.2007
%
01.01.2008
to
30.06.2008
%
The average net asset value of the Fund for the financial period is RM65,271,219 (30.06.2007:
RM90,227,228).
Income before taxation
19
15. PORTFOLIO TURNOVER
The portfolio turnover for the financial period (times) 0.500.40
The portfolio turnover is derived from the following calculation:
where :
total acquisition for the financial period = RM23,044,382 (30.6.2007: RM36,395,325)
total disposal for the financial period = RM29,816,594 (30.6.2007: RM53,286,522)
(Total acquisition for the financial period + total disposal for the financial period) ÷ 2
Average net asset value of the Fund for the financial period calculated on a daily basis
16. HOLDINGS OF UNITS BY THE MANAGER AND OTHER RELATED PARTIES
The Manager
Cost
RM
No. of
Units
49,75348,741
Other than the above, there were no units held by Directors or parties related to the Manager or
Trustees as at 30 June 2008.
31.12.2007
As at 30 June 2008, the number of units held by the Manager is as follows:
Cost
RM
No. of
Units
888996
30.06.2008
17. SEGMENT INFORMATION
The Fund has only one business activity which is the business of investment management within
Malaysia. Segmental information on investments have been provided in Note 6 to the financial
statements.
01.01.2008
to
30.06.2008
01.01.2007
to
30.06.2007
20
Listed investments
Bank balance
Short term deposits
Amount due from stockbrokers
Interest receivable
Dividend receivable
Tax recoverable
ASSETS
-
-
9,111,000
-
-
-
-
9,111,000
UP TO 1 YEAR
R M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65,111,813
50,787
-
2,700,803
2,557
89,527
75,258
68,030,745
1 - 5 YEARS
R M
OVER 5
YEARS
R M
NON -INTEREST
BEARING
R M
65,111,813
50,787
9,111,000
2,700,803
2,557
89,527
75,258
77,141,745
As at 31.12.2007 TOTAL
R M
As interest rates rise, the value of fixed income securities in a unit trust fund’s portfolio is likely to
decrease. Securities with longer duration tend to be more sensitive to changes in interest rates, usually
making them more volatile than securities with shorter duration.
Interest sensitivity of financial assets and financial liabilities items are as follows :
Listed investments
Bank balance
Short term deposits
Amount due from
stockbrokers
Interest receivable
Dividend receivable
Tax recoverable
18. INTEREST RATE RISK
ASSETS
Amount due to stockbrokers
Amount due to Trustee
Amount due to Manager
Other payables and accruals
Total interest
sensitivity gap
LIABILITIES
As at 30.06.2008
-
-
12,807,403
-
-
-
-
12,807,403
UP TO 1 YEAR
R M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
44,978,775
10,087
-
962,045
4,260
58,694
-
46,013,861
1 - 5 YEARS
R M
OVER 5
YEARS
R M
NON -INTEREST
BEARING
R M
44,978,775
10,087
12,807,403
962,045
4,260
58,694
-
58,821,264
-
-
-
-
-
12,807,403
-
-
-
-
-
-
-
-
-
-
-
-
221,027
3,435
318,077
23,325
565,864
221,027
3,435
318,077
23,325
565,864
TOTAL
R M
21
18. INTEREST RATE RISK (CONTINUED)
Amount due to stockbrokers
Amount due to Trustee
Amount due to Manager
Other payables and accruals
Total interest
sensitivity gap
LIABILITIES
-
-
-
-
-
9,111,000
-
-
-
-
-
-
-
-
-
-
-
-
1,370,438
4,439
410,604
49,539
1,835,020
1,370,438
4,439
410,604
49,539
1,835,020
The summary of weighted average interest rates per annum for each class of financial asset is as
follows:
Financial assets
Short term deposits
31.12.2007
%
3.43
30.06.2008
%
3.41
UP TO 1 YEAR
R M
1 - 5 YEARS
R M
OVER 5
YEARS
R M
NON -INTEREST
BEARING
R M
TOTAL
R M
19. CREDIT RISK
Credit and counter party risk is defined as the possibility of losses due to an unexpected default or due
to a deterioration of a business partner’s creditworthiness.
A unit trust fund could lose money if the issuer or guarantor of a fixed income security is unable or
unwilling to make timely principal and/or interest payments, or to otherwise honour its obligations.
Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings.
The following table sets out the credit risk concentration of the Fund:
As at 30.06.2008
Finance
Construction
Consumer Product
Industrial Product
Infrastructure
Property
Trading/Services
Plantation
TSR/Warrants/Rights
Others
LISTED
INVESTMENTS
RMTOTAL
RM
DIVIDEND
RECEIVABLE
RM
7,406,448
994,508
2,064,000
2,363,560
2,126,100
540,400
18,907,547
9,901,690
674,522
-
44,978,775
-
4,191
-
-
7,770
-
26,070
20,663
-
-
58,694
20,223,938
998,699
2,064,000
2,363,560
2,133,870
540,400
18,933,617
9,922,353
674,522
966,305
58,821,264
OTHER
ASSETS
RM
-
-
-
-
-
-
-
-
-
4,260
4,260
-
-
-
-
-
-
-
-
-
962,045
962,045
AMOUNT DUE
FROM
STOCKBROKERS
RM
CASH
BALANCE AND
DEPOSITS
RM
12,817,490
-
-
-
-
-
-
-
-
-
12,817,490
As at 31.12.2007
22
LISTED
INVESTMENTS
RM
As at 31.12.2007 TOTAL
RM
DIVIDEND
RECEIVABLE
RM
Finance
Construction
Consumer Product
Industrial Product
Infrastructure
Property
Trading/Services
Plantation
Warrant/Rights
Others
10,561,400
4,515,509
1,404,000
2,703,200
1,860,000
1,821,239
33,900,520
7,887,892
458,053
-
65,111,813
37,686
-
-
-
-
-
51,841
-
-
-
89,527
19,763,430
4,515,509
1,404,000
2,703,200
1,860,000
1,821,239
33,952,361
7,887,892
458,053
2,776,061
77,141,745
OTHER
ASSETS
RM
-
-
-
-
-
-
-
-
-
77,815
77,815
-
-
-
-
-
-
-
-
-
2,700,803
2,700,803
AMOUNT DUE
FROM
STOCKBROKERS
RM
CASH
BALANCE AND
DEPOSITS
RM
9,161,787
-
-
-
-
-
-
-
-
-
9,161,787
19. CREDIT RISK (CONTINUED)
Fair value is the amount at which a financial asset could be exchanged or a financial liability settled,
between knowledgeable and willing parties in an arm’s length transaction. Other than investments,
the fair values of the other balance sheet items are not materially sensitive to shifts in market interest
rates because of the limited term to maturity of these instruments. Listed investments and fixed
income securities are already carried at fair value in the financial statements. As such, the carrying
amounts of financial assets and financial liabilities approximate their fair values.
The following methods and assumptions were used to estimate the fair value:
a) Listed investments and unlisted fixed income securities
The fair value of the listed investments and fixed income securities is taken to equate their aggregate
cost and carrying values, as the investments are marked-to-market.
b) Short term deposits
The fair values of short term deposits is taken to approximate their carrying values as the
maturities are less than six months.
20. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
23
We have acted as Trustee of RHB Dynamic Fund for the financial period ended 30 June
2008. In our opinion, RHB Investment Management Sdn Bhd, has managed the Fund in the
period under review in accordance with the following:
1. The limitations imposed on the investment powers of the Management Company and the
Trustee under the Master Deed, the Guidelines on Unit Trust Funds, the Capital Markets
and Services Act 2007 and other applicable laws;
2. The valuation or pricing of the Fund are carried out in accordance with the Master Deed and
any regulatory requirements; and
3. The creation and cancellation of units of the Fund are carried out in accordance with the
Master Deed and any regulatory requirements.
MAYBAN TRUSTEES BERHAD
(Company No: 5004P)
TRACY HAZEL SIGUJI
HEAD, UNIT TRUST
Kuala Lumpur
TRUSTEE’S REPORT
REBATES AND SOFT COMMISSIONS
Any rebate on brokerage fees is to be credited into the accounts of the Fund. Soft
commissions received from brokers are retained by the management company only if the goods
and services provided are of demonstrable benefits to the unitholders of the scheme as
per the requirements of Clause 11.33 and 11.34 of the Guidelines on Unit Trust Funds as
issued by the Securities Commission on 3 May 2008.
During the period under review, the Manager did not receive or utilise any soft commissions
from brokers/dealers in consideration for directing dealings in the investment of the
Fund. However, in the event the Manager were to receive any soft commissions in the
future, these will only be retained by the Manager if they are in the form of goods and
services which are of demonstrable benefits to the unitholders.
STATEMENT BY MANAGER
We, Dato’ Mohamed Khadar Merican and Sharifatul Hanizah Said Ali, two of the Directors
of RHB Investment Management Sdn Bhd, do hereby state that in the opinion of the
Directors of the Manager, the accompanying financial statements set out on pages 6 to 22
are drawn up in accordance with the provision of the Master Deed and give a true and
fair view of the state of affairs of the Fund as at 30 June 2008 and of its results, changes
in net asset value and cash flow of the Fund for the financial period ended on that date
in accordance with the MASB Approved Accounting Standards in Malaysia for Entities
Other than Private Entities and the Securities Commission’s Guidelines on Unit Trust
Funds.
On behalf of the Manager
DATO’ MOHAMED KHADAR MERICAN SHARIFATUL HANIZAH SAID ALI
DIRECTOR DIRECTOR
Kuala Lumpur
24
AUDITORS & REPORTING ACCOUNTANTSPricewaterhouseCoopers10th Floor, 1 SentralJalan TraversKL Sentral50706 Kuala Lumpur
TAX ADVISERSPricewaterhouseCoopersTaxation Services Sdn Bhd15th Floor, 1 SentralJalan TraversKL Sentral50706 Kuala Lumpur
BANKERSRHB Bank BerhadKL Main OfficeRHB CentreJalan Tun Razak50400 Kuala Lumpur
Malayan Banking BerhadKL Main OfficeMenara Maybank100, Jalan Tun Perak50050 Kuala Lumpur
INSTITUTIONAL UNIT TRUST AGENTSRHB Bank BerhadStandard Chartered Bank Malaysia Berhad
TRUSTEEMayban Trustees Berhad34th Floor, Menara Maybank100, Jalan Tun Perak50050 Kuala Lumpur
SOLICITORSoon Gan Dion & Partners1st Floor, No. 19, Jalan SS21/56BDamansara Utama47400 Petaling JayaSelangor Darul Ehsan
BRANCHES
• Northern Regional Office44, Level 4, Lebuh PantaiGeorgetown, 10300 Penang
Southern Regional Office58B, Jalan Molek 2/2Taman Molek81100 Johor Bahru, Johor Darul Takzim
• Sabah Regional Office1st Floor, Lot 319Block 3, Api-Api CentreJalan Centre Point88000 Kota Kinabalu, Sabah
• Sarawak Regional OfficeLot 7418, 1st FloorJalan Simpang Tiga93300 Kuching, Sarawak
•
• Kuala Lumpur Branch Office1st & 2nd Floor, Lot 10, Block JKuala CityviewNo. 10, Jalan 4/93AWarisan CityviewOff Batu 2 1/2, Jalan Cheras56100 Kuala Lumpur
CORPORATE INFORMATION
(WITH EFFECT FROM 1 JANUARY 2008)
MANAGERRHB Investment Management Sdn Bhd
(formerly known as RHB Asset Management Sdn Bhd)
REGISTERED OFFICELevel 10, Tower One, RHB Centre
Jalan Tun Razak, 50400 Kuala Lumpur
BUSINESS OFFICE AND OFFICE OF THE REGISTRARLevel 7, Tower One,
RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur
BOARD OF DIRECTORSDato’ Mohamed Khadar Merican (Independent Non-Executive Chairman)
Tan Sri Dato’ Haji Hanafiah bin Haji Ahmad (Independent Non-Executive Director)Dato’ Othman Jusoh (Independent Non-Executive Director)
Haji Khairuddin bin Ahmad (Independent Non-Executive Director)Chay Wai Leong (Non-Independent Non-Executive Director)
Michael Lim Kheng Boon (Non-Independent Non-Executive Director)Sharifatul Hanizah Said Ali (Managing Director)
INVESTMENT COMMITTEE MEMBERSHaji Khairuddin bin Ahmad (Independent Chairman)
Dato’ Othman Jusoh (Independent Member)Chay Wai Leong (Non-Independent Member)
Michael Lim Kheng Boon (Non-Independent Member)Sharifatul Hanizah Said Ali (Non-Independent Member)
MANAGING DIRECTORSharifatul Hanizah Said Ali
SECRETARYAzman Shah bin Md Yaman (LS No. 006901)