Semi-Annual Report for Islamic Funds · Fund Performance . For the financial period under review,...

AmIttikalAmBon Islam AmAl-Amin AmIslamic Balanced AmIslamic Growth AmOasis Global Islamic Equity

AmIslamic Master

Semi-Annual Report for Islamic Funds31 March 2020

AmIslamic Master

TRUST DIRECTORY

Manager AmFunds Management Berhad

9th & 10th Floor, Bangunan AmBank Group 55 Jalan Raja Chulan 50200 Kuala Lumpur

Board of Directors Jeyaratnam A/L Tamotharam Pillai

Dato’ Mustafa Bin Mohd Nor Tai Terk Lin

Sum Leng Kuang Goh Wee Peng

Investment Committee Sum Leng Kuang

Tai Terk Lin Dato’ Mustafa Bin Mohd Nor

Zainal Abidin Bin Mohd Kassim Goh Wee Peng

Investment Manager AmIslamic Funds Management Sdn Bhd

Shariah Adviser Amanie Advisors Sdn Bhd

Trustee AmanahRaya Trustees Berhad

Auditors and Reporting Accountants Ernst & Young PLT

Taxation Adviser Deloitte Tax Services Sdn Bhd

AmIslamic Master

CONTENTS

AmIttikal AmIslamic Balanced 1 8

9

10

11 12

36 37

Manager’s Report 106 115

116

117

118 119

143 144

Manager’s Report Condensed Statement of Financial Position

Condensed Statement of Financial Position

Condensed Statement of Comprehensive Income


Condensed Statement of Changes in Equity


Condensed Statement of Cash Flows Condensed Statement of Cash Flows Notes to the Condensed Financial Statements

Notes to the Condensed Financial Statements

Statement by the Manager Statement by the Manager Trustee’s Report Trustee’s Report

AmBon Islam AmIslamic Growth 38 44

45

46

47 48

69 70


153

154

155 156

179 180










AmAl-Amin AmOasis Global Islamic Equity 71 77

78

79

80 81

104 105


191

192

193 194

210 211 212

213










Report of the Shariah Adviser to Unitholders Directory

1

MANAGER’S REPORT

Dear Unitholders,

We are pleased to present you the Manager’s report and the unaudited accounts of AmIttikal (“Fund”) for the financial period from 1 October 2019 to 31 March 2020.

Salient Information of the Fund

Name AmIttikal (“Fund”)

Category/ Type

Equity (Islamic) / Income and to a lesser extent growth.

Objective Amlttikal is designed as a medium to long-term investment with an objective of producing “halal” income* and to a lesser extent capital growth.

Note: *The income could be in the form of units or cash.Any material change to the investment objective of the Fund would require UnitHolders’ approval

Duration The Fund was established on 12 January 1993 and shall exist for as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue. In some circumstances, the unitholders can resolve at a meeting to terminate AmIttikal.

Performance Benchmark

Malayan Banking Berhad 12-month Islamic General Investment Account plus 3% spread (“MBB”) (obtainable from www.aminvest.com / www.maybank2u.com.my)

Note: The benchmark does not imply that the risk profile of the Fund is the same as the risk profile of the benchmark. Investors of the Fund will assume a higher risk compared to the benchmark. Hence, the returns of the Fund may be potentially higher due to the higher risk faced by the investors.

Income Distribution Policy

Income distribution (if any) is paid at least once every year.

Breakdown of Unit Holdings by Size

For the financial period under review, the size of the Fund stood at 140,018,822 units.

Size of holding

As at 31 March 2020 As at 30 September 2019

No of units held

Number of unitholders

No of units held


5,000 and below 2,176,846 704 2,163,229 696

5,001-10,000 4,825,939 660 4,945,948 671

10,001-50,000 23,749,112 1,132 25,345,787 1,193

50,001-500,000 18,341,046 180 20,939,544 208

500,001 and above 90,925,879 9 140,271,908 10

2

Fund Performance Data

Portfolio Composition

Details of portfolio composition of the Fund for the financial period as at 31 March 2020 and three financial years as at 30 September are as follows:

As at 31.3.2020

%

FY 2019

%

FY 2018

%

FY 2017

%

Construction - - 8.49 12.27

Consumer discretionary 1.88 4.46 - -

Consumer products - - 2.83 1.26

Consumer staples 9.02 4.64 - -

Energy 5.45 8.16 - -

Financials 3.83 4.32 4.54 4.26

Health care 14.19 9.21 - -

Industrials 11.66 11.30 17.26 12.54

Information technology 6.08 4.73 - -

Infrastructure - - 3.79 5.40

Local collective investment scheme 1.62 1.11 - -

Materials 2.23 3.06 - -

Plantation - - 5.75 4.19

Properties - - 3.87 2.64

Real estate / REITs 5.02 4.75 1.03 -

Technology - - 1.68 2.70

Telecommunication services 11.22 12.44 - -

Trading/Services - - 37.91 32.70

Utilities 9.00 14.65 - -

Corporate sukuk - 2.39 2.09 -

Cash, other assets and liabilities 18.80 14.78 10.76 22.04

Total 100.00 100.00 100.00 100.00

Note: The abovementioned percentages are calculated based on total net asset value.

Performance Details

Performance details of the Fund for the financial period ended 31 March 2020 and three financial years ended 30 September are as follows:

Half year ended

31.3.2020 FY

2019 FY

2018 FY

2017

Net asset value (RM) 68,099,407* 107,771,946 121,761,648 151,309,309

Units in circulation 140,018,822* 193,666,416 211,412,712 238,025,628

Net asset value per unit (RM) 0.4864* 0.5565 0.5759 0.6357

Highest net asset value per unit (RM) 0.5711* 0.5849 0.6727 0.6767

Lowest net asset value per unit (RM) 0.4472* 0.5034 0.5621 0.6193

(Forward)

3

Half year ended

31.3.2020 FY

2019 FY

2018 FY

2017

Benchmark performance (%) 3.07 6.50 6.48 6.42

Total return (%)(1) -12.60 -2.14 -5.08 4.07

- Capital growth (%) -12.60 -3.88 -9.01 -0.12

- Incomedistribution (%) - 1.74 3.93 4.19

Gross distribution (sen per unit) - 1.00 2.50 2.67

Net distribution (sen per unit) - 1.00 2.50 2.67

Management expense ratio (%)(2) 0.82 0.69 1.22 1.65

Portfolio turnover ratio (times)(3) 0.22 0.21 0.82 1.09

* Above prices and net asset value per unit are not shown as ex-distribution.

Note: (1) Total return is the actual return of the Fund for the respective financial

period/years computed based on the net asset value per unit and net of allfees.

(2) Management expense ratio (“MER”) is calculated based on the total feesand expenses incurred by the Fund divided by the average fund sizecalculated on a daily basis. The MER increased by 0.13% as compared to0.69% per annum for the financial year ended 30 September 2019 mainlydue to decrease in average fund size.

(3) Portfolio turnover ratio (“PTR”) is calculated based on the average of thetotal acquisitions and total disposals of investment securities of the Funddivided by the average fund size calculated on a daily basis. The PTRincreased by 0.01 times (4.8%) as compared to 0.21 times for the financialyear ended 30 September 2019 mainly due to decrease in average fundsize.

Average Total Return (as at 31 March 2020)

AmIttikal(a) %

MBB(b) %

One year -9.62 6.33

Three years -6.45 6.42

Five years -3.69 6.55

Ten years 2.86 6.34

Annual Total Return

Financial Years Ended (30 September)

AmIttikal(a) %

MBB(b) %

2019 -2.14 6.50

2018 -5.08 6.48

2017 4.07 6.42

2016 5.01 6.93

2015 -5.04 6.48

4

(a) Source: Novagni Analytics and Advisory Sdn Bhd.(b) Malayan Banking Berhad 12-months Islamic General Investment Accounts

plus 3% Spread (“MBB”) (obtainable from www.aminvest.com /www.maybank2u.com.my).

The Fund performance is calculated based on the net asset value per unit of the Fund. Average total return of the Fund and its benchmark for a period is computed based on the absolute return for that period annualised over one year.

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

Fund Performance

For the financial period under review, the Fund registered a negative return of 12.60% which was entirely capital growth in nature.

Thus, the Fund negative return of 12.60% has underperformed the benchmark’s return of 3.07% by 15.67%.

As compared with the financial year ended 30 September 2019, the net asset value (“NAV”) per unit of the Fund decreased by 12.60% from RM0.5565 to RM0.4864, while units in circulation decreased by 27.70% from 193,666,416 to 140,018,822 units.

The line chart below shows comparison between the annual performance of AmIttikal and its benchmark, MBB, for the financial years ended 30 September.


Strategies and Policies Employed

For the financial period under review, the Fund’s strategy was to be defensive with investment tilt towards big cap stocks that were backed with strong balance sheets, cash flow and consistent dividend payments. The strategy was in line with the expectation of a more volatile market outlook.

5

Portfolio Structure

This table below is the asset allocation of the Fund for the financial period/year under review.

As at 31.3.2020

%

As at 30.9.2019

% Changes

%

Consumer discretionary 1.88 4.46 -2.58

Consumer staples 9.02 4.64 4.38

Energy 5.45 8.16 -2.71

Financials 3.83 4.32 -0.49

Health care 14.19 9.21 4.98

Industrials 11.66 11.30 0.36

Information technology 6.08 4.73 1.35

Local collective investment scheme 1.62 1.11 0.51

Materials 2.23 3.06 -0.83

Real estate / REITs 5.02 4.75 0.27

Telecommunication services 11.22 12.44 -1.22

Utilities 9.00 14.65 -5.65

Corporate sukuk - 2.39 -2.39

Cash, other assets and liabilities 18.80 14.78 4.02

Total 100.00 100.00

The Fund adopted a defensive strategy on the back of escalation of US-China trade war which could slow down global growth as well as rapid spread of coronavirus around the globe, triggering heightened uncertainty and fear in financial markets that the global economy is headed for a recession. The Fund lowered equity exposure to 81.20% from 85.22% as at 30 September 2019 in view of the highly uncertain period.

As at 31 March 2020, total exposure in defensive sectors, namely telecommunication services, utilities, consumer staples, REITS and healthcare was at 48.45%. While the Fund reduced exposure in utilities and telecommunication services sectors, it was compensated with higher exposure in healthcare and consumer staples. Higher exposure in the healthcare sector was on the back of positioning in the gloves stocks which would benefit from the Covid-19 pandemic, while increased exposure in consumer staples were mainly in the plantation sector, on expectation of higher average selling price yoy.

During the period, exposure in consumer discretionary, energy, financials and materials were reduced. The Fund also sold its holdings in corporate sukuk during the period under review.

Cross Trades There were no cross trades undertaken during the financial period under review.

Distribution/ Unit splits

There was no income distribution and unit split declared for the financial period under review.

State of Affairs

There has been neither significant change to the state of affairs of the Fund nor any circumstances that materially affect any interests of the unitholders during the financial period under review.

6

Rebates and Soft Commission

Soft commissions received from brokers/dealers are retained by the Manager only if the goods and services provided are in the form of research services that assist in the decision-making process relating to the Fund’s investments.

During the financial period under review, the Manager had received on behalf of the Fund, soft commissions as allowed under regulatory requirements to carry out investment management functions for the Fund. These soft commissions received by the Manager are deemed to be beneficial to the unitholders of the Fund.

Market Review

For the period under review, 1 October 2019 to 31 March 2020, FBM Emas Shariah Index (FBMS) was down 14.13% to close at 10,105bps. FBMS hit the high of 12,104bps on 1 March 2020 and was the lowest, at 9,120bps on 19 March 2020.

FBMS Index started the first quarter of period under review on a negative note as risk appetite was dampened on string of disappointing United States (US) economic data, notably weak manufacturing and lackluster jobs data, which raise fears of an economic recession. Calm returned to equity market towards later the quarter as US and China reaching an agreement on a phase one trade deal, reducing uncertainty in the market. FBMS gained 1.53% for the quarter.

Moving into 2020, markets were gripped by fear of the outbreak of Covid-19 which caused FMBS to register -15.42% for the quarter. COVID-19 pandemic spread like wildfire globally and as at end-March, 750k cases has been reported globally with no sign of easing. This pandemic caused the markets to fear of recession as US initial jobless claims to skyrocket to 3.3m, all time high while government from all over the world have imposed lockdown to ease the infection rate. The decline in oil priced did not help either as Brent crude oil price plunged 55.0% MoM to close at USD23/bbl. Saudi Arabia (SA) and Russia could not see eye to eye on the proposal by the former to cut Organization of the Petroleum Exporting Countries (OPEC+) oil production by a further 1.5m barrels per day (mbpd) in order to tackle weak oil prices impacted by the COVID-19 epidemic.

Market Outlook

The COVID-19 is still far from reaching its peak (if the experts’ prediction of the infection curve is correct) and is rapidly spreading that could lead to a global complete lockdown. This has continued to dampen the short-term outlook of the global economy significantly. Equities market has turned highly volatile due to the likelihood of significant negative impact on corporate earnings leading to credit default events. Although the governments and global central banks have been proactive in introducing extensive policies, those could only serve to cushion the economic downturn if the outbreak worsens.

At the same time, the Malaysian government has unveiled a MYR250b economic stimulus package to mitigate the economic downturn caused by the COVID-19 outbreak. The unprecedented Movement Control Order (MCO) in many countries (total lockdown in some cases) would moderate the economic activities significantly, and the earnings pressure is not limited to local corporates only but global businesses as well. Due to the wide economic impact, Fund Manager believes the recovery would take a longer period hence investment calls going forward to be based on a longer-term horizon.

During this highly uncertain period, Fund Manager would continue to maintain defensive strategy. Focus would be on high dividend-paying stocks to be defensive, strong cash flow and net cash position of the company is also a must consideration in this current market stock selection. Sectors wise, continue to focus on plantation, consumer (non-discretionary), certain oil & gas players involved mainly in maintenance, selective construction and technology players

7

and Real Estate Investment Trusts (REITs). Gloves and selective telcos maybe a tactical play to ride through this period.

Additional Information

The following information was updated: 1. Seohan Soo resigned as a Non-Independent, Non-Executive Director for

AmFunds Management Berhad and AmIslamic Funds Management Sdn Bhd with effect from 1st January 2020.

Kuala Lumpur, Malaysia AmFunds Management Berhad 17 May 2020

AmIttikal

CONDENSED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2020

31.3.2020 30.9.2019

(unaudited) (audited)

Note RM RM

ASSETS

Shariah-compliant investments 4 55,297,076 91,842,400

Amount due from Manager 5(a) 11,875 -

Dividends receivable 519,809 365,658

Cash at banks 12,604,610 16,409,574 TOTAL ASSETS 68,433,370 108,617,632

LIABILITIES

Amount due to Manager 5(b) 307,792 782,087

Amount due to Trustee 6 4,213 6,114

Distribution payable - 16,503

Sundry payables and accrued expenses 21,958 40,982

TOTAL LIABILITIES 333,963 845,686

EQUITY

Unitholders’ capital 8(a) 249,521,845 279,281,341

Accumulated losses 8(b)(c) (181,422,438) (171,509,395)

TOTAL EQUITY 8 68,099,407 107,771,946

TOTAL EQUITY AND LIABILITIES 68,433,370 108,617,632

UNITS IN CIRCULATION 8(a) 140,018,822 193,666,416

NET ASSET VALUE (“NAV”) PER UNIT 48.64 sen 55.65 sen

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

8

AmIttikal

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2019 TO 31 MARCH 2020

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019 Note RM RM

SHARIAH-COMPLIANT INVESTMENT LOSS

Gross dividend/distribution income 1,183,730 1,324,388

Profit income 243,597 393,566

Net loss from Shariah-compliant investments:

− Financial assets at fair value through profit or

loss (“FVTPL”) 7 (10,867,672) (7,501,624)

(9,440,345) (5,783,670)

EXPENDITURE

Manager’s profit 5 (307,792) (422)

Trustee’s fee 6 (30,418) (38,180)

Auditors’ remuneration (3,500) (3,452)

Tax agent’s fee (2,500) (2,466)

Custodian’s fee (1,073) (1,005)

Brokerage and transaction fee (114,208) (114,426)

Other expenses (11,028) (3,247)

(470,519) (163,198)

Net loss before tax (9,910,864) (5,946,868)

Less: Income tax 10 (2,179) (1,981)

Net loss after tax (9,913,043) (5,948,849)

Other comprehensive income - -

Total comprehensive loss for the financial period (9,913,043) (5,948,849)

Total comprehensive loss comprises the

following:

Realised losses (7,434,992) (12,476,865)

Unrealised (loss)/gain (2,478,051) 6,528,016

(9,913,043) (5,948,849)


9

AmIttikal

CONDENSED STATEMENT OF CHANGES IN EQUITY (Unaudited)


Unitholders’ Accumulated Total

capital losses equity

Note RM RM RM

At 1 October 2018 289,210,418 (167,448,770) 121,761,648

Total comprehensive loss

for the financial period - (5,948,849) (5,948,849)

Creation of units 17,270,872 - 17,270,872

Cancellation of units (22,149,078) - (22,149,078) Balance at 31 March 2019 284,332,212 (173,397,619) 110,934,593

At 1 October 2019 279,281,341 (171,509,395) 107,771,946



Creation of units 8(a) 53,608,320 - 53,608,320

Cancellation of units 8(a) (83,367,816) - (83,367,816) Balance at 31 March 2020 249,521,845 (181,422,438) 68,099,407


10

AmIttikal

CONDENSED STATEMENT OF CASH FLOWS (Unaudited)


1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

CASH FLOWS FROM OPERATING AND

INVESTING ACTIVITIES

Proceeds from sale of Shariah-compliant investments 31,651,687 21,331,755

Dividends received 1,027,400 1,518,568

Profit received 292,555 398,014

Manager’s profit paid (666,874) (1,479,552)

Trustee’s fee paid (32,319) (39,499)

Tax agent’s fee paid (5,000) -

Custodian’s fee paid (1,073) (1,005)

Payments for other expenses (145,260) (138,204)

Purchase of Shariah-compliant investments (6,022,993) (14,048,491)

Net cash generated from operating

and investing activities 26,098,123 7,541,586

CASH FLOWS FROM FINANCING

ACTIVITIES

Proceeds from creation of units 53,596,445 17,270,872

Payments for cancellation of units (83,483,029) (22,155,198)

Distribution paid (16,503) (1,005,701)

Net cash used in financing activities (29,903,087) (5,890,027)

NET (DECREASE)/INCREASE IN CASH AND

CASH EQUIVALENTS (3,804,964) 1,651,559

CASH AND CASH EQUIVALENTS AT

BEGINNING OF FINANCIAL PERIOD 16,409,574 17,304,711

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL PERIOD 12,604,610 18,956,270

Cash and cash equivalents comprise:Cash at banks 12,604,610 18,956,270


11

AmIttikal

NOTES TO THE CONDENSED FINANCIAL STATEMENTS


1. GENERAL INFORMATION

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Standards effective during the financial period

Standards issued but not yet effective

AmIttikal (“the Fund”) was established pursuant to a Deed dated 19 October 1992 as

amended by Deeds Supplemental thereto (“the Deed”), between AmFunds Management

Berhad as the Manager, AmanahRaya Trustees Berhad as the Trustee and all unitholders.

The Fund was set up with the objective of providing investors with a means to pool and invest

their funds in a professionally managed portfolio of Shariah-compliant equities and other non-

interest bearing securities. The Fund aims to provide an investment alternative where profits

earned are in accordance with Principles of Shariah. The Fund is managed based on the

concept of Al-Mudharabah. As provided in the Deed, the “accrual period” or the financial year

shall end on 30 September and the units in the Fund were first offered for sale on 18

December 1992.

The financial statements were authorised for issue by the Chief Executive Officer of the

Manager on 17 May 2020.

The financial statements of the Fund have been prepared on a historical cost basis, except

as otherwise stated in the accounting policies and comply with Malaysian Financial Reporting

Standards 134: Interim Financial Reporting (“MFRS 134”) as issued by the Malaysian

Accounting Standards Board (“MASB”) and Securities Commission Malaysia’s Guidelines on

Unit Trust Funds in Malaysia.

The Fund will adopt the following MFRSs and Amendments to MFRSs when they become

effective in the respective financial periods and these MFRSs and Amendments to MFRSs

are not expected to have any material impact to the financial statements of the Fund upon

initial application.

The adoption of MFRS which have been effective during the financial period did not have any

material financial impact to the financial statements.

12

AmIttikal

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS (CONT’D.)

Standards issued but not yet effective (cont’d.)

Effective for

financial periods

beginning on or after

Revised Conceptual Framework for Financial Reporting 1 January 2020

Amendments to MFRS 3 - Definition of a Business 1 January 2020

Amendments to MFRS 101 and MFRS 108 - Definition of Material 1 January 2020

Amendments to MFRS 7, MFRS 9 and MFRS 139 - 1 January 2020

Interest Rate Benchmark Reform

MFRS 17 Insurance Contracts 1 January 2021

Amendments to MFRS 10 and MFRS 128: Sale or Contribution Deferred

of Assets between an Investor and its Associate or Joint Venture

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Income recognition

(i) Dividend/Distribution income

(ii) Profit income

Dividend/distribution income is recognised when the Fund’s right to receive

payment is established.

Once the recorded value of a financial asset or a group of similar financial assets

has been reduced due to an impairment loss, profit income continues to be

recognised using the rate of return used to discount the future cash flows for the

purpose of measuring the impairment loss.

For all profit-bearing financial assets, profit income is calculated using the effective

profit method. Effective profit rate is the rate that exactly discounts estimated future

cash payments or receipts through the expected life of the financial instrument or a

shorter period, where appropriate, to the net carrying amount of the financial asset.

The calculation takes into account all contractual terms of the financial instrument

and includes any fees or incremental costs that are directly attributable to the

instrument and are an integral part of the effective profit rate, but not future credit

losses.

Income is recognised to the extent that it is probable that the economic benefits will flow

to the Fund and the income can be reliably measured. Income is measured at the fair

value of consideration received or receivable.

13

AmIttikal

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

3.1 Income recognition (cont’d.)

(iii) Gain or loss on disposal of investments

3.2 Income tax

3.3 Functional and presentation currency

3.4 Statement of cash flows

3.5 Distribution

3.6 Unitholders’ capital

Distributions are at the discretion of the Fund. A distribution to the Fund’s unitholders is

accounted for as a deduction from realised income. A proposed distribution is

recognised as a liability in the period in which it is approved. Distribution is either

reinvested or paid in cash to the unitholders on the income payment date. Reinvestment

of units is based on the NAV per unit on the income payment date, which is also the time

of creation.

The unitholders’ capital of the Fund meets the definition of puttable instruments and is

classified as equity instruments under MFRS 132 Financial Instruments: Presentation

(“MFRS 132”) .

The Fund adopts the direct method in the preparation of the statement of cash flows.

On disposal of Shariah-compliant investments, the net realised gain or loss on

disposal is measured as the difference between the net disposal proceeds and the

carrying amount of the Shariah-compliant investments. The net realised gain or loss

is recognised in profit or loss.

Current tax assets and liabilities are measured at the amount expected to be recovered

from or paid to the tax authorities. The tax rates and tax laws used to compute the

amount are those that are enacted or substantively enacted at the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to

items recognised outside profit or loss, either in other comprehensive income or directly

in equity.

Functional currency is the currency of the primary economic environment in which the

Fund operates that most faithfully represents the economic effects of the underlying

transactions. The functional currency of the Fund is Ringgit Malaysia (“RM”) which

reflects the currency in which the Fund competes for funds, issues and redeems units.

The Fund has also adopted RM as its presentation currency.

Cash equivalents are short-term, highly liquid Shariah-compliant investments that are

readily convertible to cash with insignificant risk of changes in value.

14

AmIttikal


3.7 Financial assets – initial recognition and measurement

(i) Initial recognition

(ii) Initial measurement

(iii) “Day 1” profit or loss

3.8 Financial assets – classification and subsequent measurement

(i) Debt instruments

Business model

The classification and subsequent measurement of debt instruments held by the

Fund are determined based on their business model and cash flow characteristics.

The business model reflects how the Fund manages the financial assets in order to

generate cash flows. That is, whether the Fund’s objective is solely to collect the

contractual cash flows from the assets, or is to collect both the contractual cash

flows and cash flows arising from the sale of assets. If neither of these is applicable

(e.g. the financial assets are held for trading purposes), then the financial assets

are classified as part of “other” business model. Factors considered by the Fund in

determining the business model for a portfolio of assets include past experience on

how the cash flows for these assets were collected, how the asset’s performance is

evaluated and reported to key management personnel, and how risks are assessed

and managed.

All financial assets are recognised initially at fair value, in the case of financial

assets not recorded at FVTPL, transaction costs that are attributable to the

acquisition of the financial asset. All financial liabilities are recognised initially at fair

value and, in the case of financial liabilities not recorded at FVTPL, net of directly

attributable transaction costs.

At initial measurement, if the transaction price differs from the fair value, the Fund

immediately recognises the difference between the transaction price and fair value

(a “Day 1” profit or loss) in profit or loss provided that fair value is evidenced by a

quoted price in an active market for an identical asset or liability (i.e. Level 1 input)

or based on a valuation technique that uses only data from observable markets. In

all other cases, the difference between the transaction price and model value is

recognised in profit or loss on a systematic and rational basis that reflects the

nature of the instrument over its tenure.

Financial assets and financial liabilities are recognised when the Fund becomes a

party to the contractual provisions of the instrument. Regular way purchases and

sales of financial assets are recognised using trade date accounting or settlement

date accounting. The method used is applied consistently for all purchases and

sales of financial assets that belong to the same category of financial assets.

15

AmIttikal


3.8 Financial assets – classification and subsequent measurement (cont’d.)

(i) Debt instruments (cont’d.)

Cash flow characteristics

(ii) Equity instruments and collective investment schemes (“CIS”)

3.9 Financial assets under MFRS 9

(i) Classification and measurement

The Fund may classify its financial assets under the following categories:

Financial assets at amortised cost

Where the business model is to hold the financial assets to collect contractual cash

flows, or to collect contractual cash flows and sell, the Fund assesses whether the

financial assets’ contractual cash flows represent solely payment of principal and

profit (“SPPP”). In making this assessment, the Fund considers whether the

contractual cash flows are consistent with a basic financing arrangement, i.e. profit

includes only consideration for time value of money, credit risk, other basic

financing risks and a profit margin that is consistent with a basic financing

arrangement. Financial assets with embedded derivatives are considered in their

entirety when determining whether their cash flows are SPPP.

The Fund subsequently measures its Shariah-compliant investments in equity

investments and CIS at FVTPL. Dividends/distribution earned whilst holding the

Shariah-compliant investments are recognised in profit or loss when the right to the

payment has been established. Gains and losses on the Shariah-compliant

investments, realised and unrealised, are included in profit or loss.

The classification of financial assets depends on the Fund’s business model of

managing the financial assets in order to generate cash flows (“business model

test”) and the contractual cash flow characteristics of the financial instruments

(“SPPP test”). The business model test determines whether cash flows will result

from collecting contractual cash flows, selling the financial assets, or both and the

assessment is performed on a portfolio basis. The SPPP test determines whether

the contractual cash flows are solely for payments of principal and profit and the

assessment is performed on a financial instrument basis.

A financial asset is measured at amortised cost if it is held within a business model

whose objective is to hold financial assets in order to collect contractual cash flows

and its contractual terms give rise on specified dates to cash flows that are solely

payments of principal and profit on the principal amount outstanding. The Fund

includes in this category deposits with financial institutions, cash at banks, amounts

due from brokers/financial institutions, amount due from the Manager and other

receivables.

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3.9 Financial assets under MFRS 9 (cont’d.)

(i) Classification and measurement (cont’d.)

Financial assets at FVOCI

Financial assets at FVTPL

3.10 Financial liabilities – classification and subsequent measurement

Instruments that qualify for amortised cost or FVOCI may be irrevocably designated

as FVTPL, if doing so eliminates or significantly reduces a measurement or

recognition inconsistency. Equity instruments are normally measured at FVTPL,

nevertheless, the Fund is allowed to irrevocably designate equity instruments that

are not held for trading as FVOCI, with no subsequent reclassification of gains or

losses to profit or loss.

Financial liabilities issued by the Fund are classified as financial liabilities at amortised

cost, where the substance of the contractual arrangement results in the Fund having an

obligation either to deliver cash or another financial asset to the holder. After initial

measurement, financial liabilities are subsequently measured at amortised cost using

the effective profit method. Amortised cost is calculated by taking into account any

discount or premium on acquisition and fees or costs that are an integral part of the

effective profit rate.

A financial asset is measured at fair value through other comprehensive income

(“FVOCI”) if its business model is both to hold the asset to collect contractual cash

flows and to sell the financial asset. In addition, the contractual terms of the

financial assets give rise on specified dates to cash flows that are solely payments

of principal and profit on the outstanding principal.

These Shariah-compliant investments are initially recorded at fair value and

transaction costs are expensed in the profit or loss. Subsequent to initial

recognition, these Shariah-compliant investments are remeasured at fair value. All

fair value adjustments are initially recognised through OCI. Debt instruments at

FVOCI are subject to impairment assessment.

Any financial assets that are not measured at amortised cost or FVOCI are

measured at FVTPL. Subsequent to initial recognition, financial assets at FVTPL

are measured at fair value. Changes in the fair value of those financial instruments

are recorded in “Net gain or loss on financial assets at FVTPL”. Profit earned and

dividend/distribution revenue elements of such instruments are recorded separately

in “Profit income” and “Dividend/Distribution income” respectively.

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3.11 Derecognition of financial instruments

(i) Derecognition of financial asset

- the rights to receive cash flows from the asset have expired, or

-

-

-

(ii) Derecognition of financial liability

3.12 Financial instruments – expected credit losses (“ECL”)

-

-

-

A financial asset (or, where applicable a part of a financial asset or part of a group

of similar financial assets) is derecognised when:

the Fund has transferred its rights to receive cash flows from the asset or has

assumed an obligation to pay the received cash flows in full without material

delay to a third party under a “pass-through” arrangement; and either:

the Fund has neither transferred nor retained substantially all the risks and

rewards of the asset, but has transferred control of the asset.

A financial liability is derecognised when the obligation under the liability is

discharged, cancelled or expired. Gains and losses are recognised in profit or loss

when the liabilities are recognised, and through the amortisation process.

the Fund has transferred substantially all the risks and rewards of the asset,

or

The Fund assesses on a forward-looking basis the ECL associated with its financial

assets at amortised cost. The Fund recognises a loss allowance for such losses at each

reporting date. The measurement of ECL reflects:

an unbiased and probability-weighted amount that is determined by evaluating a

range of possible outcomes;

The ECL in respect of financial assets at amortised cost, if any, is recognised in profit or

loss.

the time value of money; and

Financial assets together with the associated allowance are written off when it has

exhausted all practical recovery efforts and there is no realistic prospect of future

recovery. The Fund may also write-off financial assets that are still subject to

enforcement activity when there is no reasonable expectation of full recovery. If a write-

off is later recovered, the recovery is credited to profit or loss.

reasonable and supportable information that is available without undue cost or

effort at the reporting date about past events, current conditions and forecasts of

future economic conditions.

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3.13 Determination of fair value

3.14 Classification of realised and unrealised gains and losses

3.15 Significant accounting estimates and judgments

Realised gains and losses on disposals of financial instruments are classified at FVTPL

and are calculated using weighted average method. They represent the difference

between an instrument’s initial carrying amount and disposal amount.

The preparation of the Fund’s financial statements requires the Manager to make

judgments, estimates and assumptions that affect the reported amounts of revenues,

expenses, assets and liabilities, and the disclosure of contingent liabilities at the

reporting date. However, uncertainty about these assumptions and estimates could

result in outcomes that could require a material adjustment to the carrying amount of the

asset or liability in the future.

For Shariah-compliant investments in local quoted securities, fair value is determined

based on the closing price quoted on Bursa Malaysia Berhad. For Shariah-compliant

investments in CIS, fair value will determined based on the closing NAV per unit of the

CIS. Purchased cost is the quoted price that the Fund paid when buying its Shariah-

compliant investments. For Shariah-compliant investments in local fixed income

securities, nominal value is the face value of the securities and fair value is determined

based on the indicative prices from Bond Pricing Agency Malaysia Sdn Bhd plus

accrued profit, which includes the accretion of discount and amortisation of premium.

Adjusted cost of Shariah-compliant investments relates to the purchased cost plus

accrued profit, adjusted for amortisation of premium and accretion of discount, if any,

calculated over the period from the date of acquisition to the date of maturity of the

respective securities as approved by the Manager and the Trustee. The difference

between purchased/adjusted cost and fair value is treated as unrealised gain or loss and

is recognised in profit or loss. Unrealised gains or losses recognised in profit or loss are

not distributable in nature.

Unrealised gains and losses comprise changes in the fair value of financial instruments

for the period and from reversal of prior period’s unrealised gains and losses for financial

instruments which were realised (i.e. sold, redeemed or matured) during the reporting

period.

No major judgments have been made by the Manager in applying the Fund’s accounting

policies. There are no key assumptions concerning the future and other key sources of

estimation uncertainty at the reporting date, that have a significant risk of causing a

material adjustment to the carrying amounts of assets and liabilities within the next

financial period.

The Fund classifies its Shariah-compliant investments as financial assets at FVTPL as

the Fund may sell its Shariah-compliant investments in the short-term for profit-taking or

to meet unitholder’s cancellation of units.

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4.

31.3.2020 30.9.2019

RM RM


Quoted Shariah-compliant equity securities (a) 52,366,032 86,475,981

Quoted Shariah-compliant CIS (b) 1,825,059 1,593,405

Unquoted Shariah-compliant CIS (c) 1,105,985 1,201,738

Unquoted Shariah-compliant fixed income

securities (d) - 2,571,276

55,297,076 91,842,400

Details of Shariah-compliant investments are as follows:

Fair

value as a Name of company Number of Fair Purchased percentage

shares value cost of NAV

RM RM %

31.3.2020

(a) Quoted Shariah-compliant

equity securities

Consumer discretionary

DRB-Hicom Berhad 969,900 1,280,268 2,647,479 1.88

Consumer staples

FGV Holdings Berhad 292,400 250,002 427,665 0.37

Genting Plantations

Berhad 158,000 1,501,000 1,689,226 2.20

Kuala Lumpur Kepong

Berhad 67,300 1,397,148 1,545,877 2.05

Sime Darby Plantation

Berhad 605,800 2,992,652 3,378,760 4.40

1,123,500 6,140,802 7,041,528 9.02

Energy

Dialog Group Berhad 898,900 2,732,656 3,035,188 4.02

Yinson Holdings Berhad 204,500 975,465 942,332 1.43

1,103,400 3,708,121 3,977,520 5.45

Financials

BIMB Holdings Berhad 552,300 1,794,975 2,289,406 2.63

Syarikat Takaful Malaysia

Berhad 251,200 816,400 1,022,870 1.20

803,500 2,611,375 3,312,276 3.83

SHARIAH-COMPLIANT INVESTMENTS

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4.

Fair value as Name of company Number of Fair Purchased a percentage


RM RM %

31.3.2020 (cont’d.)


equity securities (cont’d.)

Health care

CCM Duopharma Biotech

Berhad 432,300 600,897 601,097 0.88

Hartalega Holdings

Berhad 305,800 2,103,904 1,626,705 3.09

IHH Healthcare Berhad 673,900 3,477,324 4,474,388 5.11

Kossan Rubber Industries

Berhad 167,400 858,762 741,024 1.26

Top Glove Corporation

Bhd 406,400 2,621,280 1,955,957 3.85

1,985,800 9,662,167 9,399,171 14.19

Industrials

Frontken Corporation

Berhad 483,300 874,773 385,450 1.29

Gamuda Berhad 597,500 1,690,925 2,995,904 2.48

IJM Corporation Berhad 814,900 1,295,691 2,311,315 1.90

MISC Berhad 238,300 1,772,952 1,638,268 2.60

Sime Darby Berhad 875,700 1,479,933 2,334,241 2.17

Sunway Construction

Group Berhad 549,100 829,141 1,284,827 1.22

3,558,800 7,943,415 10,950,005 11.66

Information technology

Globetronics Technology

Bhd. 734,700 1,190,214 1,623,630 1.75

Inari Amertron Berhad 716,400 888,336 1,343,602 1.31

My E.G. Services Berhad 1,186,400 1,138,944 1,648,348 1.67

Uchi Technologies

Berhad 479,000 919,680 1,431,364 1.35

3,116,500 4,137,174 6,046,944 6.08

Materials

ATA IMS Berhad 517,800 424,596 832,985 0.62

PETRONAS Chemicals

Group Berhad 216,800 1,094,840 2,003,321 1.61

734,600 1,519,436 2,836,306 2.23

Real estate

Sunway Berhad 1,026,016 1,590,325 1,690,057 2.34

SHARIAH-COMPLIANT INVESTMENTS (CONT’D.)

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4.

Fair value as Name of company/trust Number of Fair Purchased a percentage

units/shares value cost of NAV

RM RM %

31.3.2020 (cont’d.)



Telecommunication services

Axiata Group Berhad 860,800 2,823,424 5,207,451 4.14

DiGi.Com Bhd 510,100 2,218,935 2,748,619 3.26

Telekom Malaysia Berhad 693,500 2,600,625 3,330,173 3.82

2,064,400 7,642,984 11,286,243 11.22

Utilities

Mega First Corporation

Berhad 51,500 228,145 206,763 0.33

Tenaga Nasional Berhad 491,000 5,901,820 7,293,236 8.67

542,500 6,129,965 7,499,999 9.00

Total quoted Shariah-

compliant equity securities 17,028,916 52,366,032 66,687,528 76.90

(b) Quoted Shariah-compliant CIS

REITs

Axis Real Estate

Investment Trust 997,300 1,825,059 1,515,809 2.68

Total quoted Shariah-compliant CIS 997,300 1,825,059 1,515,809 2.68

(c) Unquoted Shariah-compliant CIS

AmIntelligent Global Equity

Multi Strategy-Developed

Markets* 1,173,833 1,105,985 1,171,799 1.62

Total unquoted Shariah-compliant CIS 1,173,833 1,105,985 1,171,799 1.62

* This CIS is managed by the Manager.

Total financial assets at FVTPL 55,297,076 69,375,136 81.20

Shortfall of fair value over purchased/

adjusted cost (14,078,060)


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4.



RM RM %

30.09.2019


equity securities


Bermaz Auto Berhad 448,200 1,021,896 976,449 0.95

DRB-Hicom Berhad 969,900 2,298,663 2,647,479 2.13

Padini Holdings Berhad 154,700 590,954 895,866 0.55

UMW Holdings Berhad 184,600 900,848 1,159,746 0.83

1,757,400 4,812,361 5,679,540 4.46

Consumer staples

Fraser & Neave Holdings

Bhd 31,700 1,106,330 1,201,430 1.03

Genting Plantations

Berhad 103,500 1,025,685 1,111,613 0.95

Sime Darby Plantation

Berhad 605,800 2,865,434 3,378,760 2.66

741,000 4,997,449 5,691,803 4.64

Energy

Dialog Group Berhad 1,158,800 3,939,920 3,912,755 3.66

Hibiscus Petroleum

Berhad 1,008,800 963,404 995,361 0.89

Serba Dinamik Holdings

Berhad 292,500 1,243,125 1,044,556 1.15

Uzma Berhad 1,472,400 1,288,350 2,199,526 1.20

Yinson Holdings Berhad 204,500 1,364,015 942,332 1.26

4,137,000 8,798,814 9,094,530 8.16

Finance

BIMB Holdings Berhad 552,300 2,187,108 2,289,406 2.03


Berhad 418,700 2,470,330 1,704,918 2.29

971,000 4,657,438 3,994,324 4.32


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4.



RM RM %

30.9.2019 (cont’d.)



Health care


Berhad 432,300 605,220 601,097 0.56

IHH Healthcare Berhad 859,100 4,879,688 5,704,032 4.53


Berhad 167,400 716,472 741,024 0.66

KPJ Healthcare Berhad 1,098,200 971,907 1,224,761 0.90

Supermax Corporation

Berhad 314,200 502,720 681,853 0.47

Top Glove Corporation

Bhd 506,400 2,253,480 2,437,246 2.09

3,377,600 9,929,487 11,390,013 9.21

Industrials

Frontken Corporation

Berhad 1,297,000 2,230,840 1,034,406 2.07

Gamuda Berhad 597,500 2,210,750 2,995,904 2.05

IJM Corporation Berhad 814,900 1,784,631 2,311,315 1.66

Malaysian Resources

Corporation Berhad 1,351,900 993,647 1,687,577 0.92

MISC Berhad 238,300 1,858,740 1,638,268 1.73

Sime Darby Berhad 875,700 1,970,325 2,334,241 1.83

Sunway Construction

Group Berhad 549,100 1,125,655 1,284,827 1.04

5,724,400 12,174,588 13,286,538 11.30



Bhd. 379,900 782,594 883,553 0.73

Inari Amertron Berhad 716,400 1,303,848 1,343,602 1.21

My E.G. Services Berhad 1,186,400 1,660,960 1,648,348 1.54

Uchi Technologies

Berhad 479,000 1,345,990 1,431,364 1.25

2,761,700 5,093,392 5,306,867 4.73

Materials

PETRONAS Chemicals

Group Berhad 437,800 3,301,012 4,045,452 3.06


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4.



RM RM %

30.9.2019 (cont’d.)



Real estate

Eco World Development

Group Berhad 999,700 649,805 1,568,487 0.60

Mah Sing Group Berhad 1,503,000 1,127,250 2,255,961 1.05

Sunway Berhad 1,015,858 1,747,276 1,690,056 1.62

3,518,558 3,524,331 5,514,504 3.27


Axiata Group Berhad 1,119,000 4,811,700 6,769,444 4.46

DiGi.COM Bhd 510,100 2,422,975 2,748,619 2.25

Maxis Berhad 363,100 2,033,360 2,538,170 1.89

Telekom Malaysia Berhad 693,500 2,496,600 3,330,173 2.32

TIME dotCom Berhad 179,400 1,637,922 1,670,712 1.52

2,865,100 13,402,557 17,057,118 12.44

Utilities


Berhad 46,400 189,312 182,538 0.18

PETRONAS Gas Berhad 222,400 3,642,912 4,812,221 3.38

Taliworks Corporation

Berhad 2,824,366 2,626,660 2,242,669 2.44

Tenaga Nasional Berhad 683,700 9,325,668 10,155,571 8.65

3,776,866 15,784,552 17,392,999 14.65


compliant equity securities 30,068,424 86,475,981 98,453,688 80.24


REITs

Axis Real Estate Investment

Trust 861,300 1,593,405 1,281,889 1.48

Total quoted Shariah-compliant CIS 861,300 1,593,405 1,281,889 1.48


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4.

Fair value as Name of trust Number of Fair Purchased a percentage

units value cost of NAV

RM RM %

30.9.2019 (cont’d.)




Markets* 1,160,427 1,201,738 1,157,874 1.11

Total unquoted Shariah-compliant CIS 1,160,427 1,201,738 1,157,874 1.11


Fair

value as a Maturity Nominal Fair Adjusted percentage date Issuer value value cost of NAV

RM RM RM %

(d) Unquoted Shariah-compliant fixed income securities

Corporate sukuk

30.12.2019 DRB-HicomBerhad 2,500,000 2,571,276 2,548,958 2.39

Total unquoted Shariah-

compliant fixed incomesecurities 2,500,000 2,571,276 2,548,958 2.39


Shortfall of fair value over purchased/

adjusted cost (11,600,009)

5. AMOUNT DUE FROM/TO MANAGER

31.3.2020 30.9.2019 Note RM RM

(a) Due from ManagerCreation of units (i) 11,875 -


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5. AMOUNT DUE FROM/TO MANAGER (CONT’D.)

31.3.2020 30.9.2019 Note RM RM

(b) Due to Manager

Redemption of units (ii) - 115,213

Manager’s profit payable (iii) 307,792 666,874

307,792 782,087

(i)

(ii)

(iii)

6. AMOUNT DUE TO TRUSTEE

7. NET LOSS FROM SHARIAH-COMPLIANT INVESTMENTS

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Net loss on financial assets at FVTPL comprised:

− Net realised losses on sale of Shariah-compliant

investments (8,389,621) (14,029,640)

− Net unrealised (loss)/gain on changes in fair values of

Shariah-compliant investments (2,478,051) 6,528,016

(10,867,672) (7,501,624)

The normal credit period in the previous financial year and current financial period for

creation and redemption of units is three business days.

The amount represents amount payable to the Manager for units redeemed.


Trustee’s fee payable is one month.

Trustee’s fee is at a rate of 0.07% (2019: 0.07%) per annum on the NAV of the Fund,

calculated on a daily basis.


Manager’s fee payable is one month.

The amount represents amount receivable from the Manager for units created.

Manager’s profit is up to 20% of the net realised profits. Net realised profits means all

income and profits including realised capital profits and gains from the sale of

investments less allowable expenses and the remuneration paid to the members of the

investment and Shariah Advisory panel and all fees payable to the Trustees.

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8. TOTAL EQUITY

Total equity is represented by:

31.3.2020 30.9.2019 Note RM RM

Unitholders’ capital (a) 249,521,845 279,281,341

Accumulated losses

– Realised losses (b) (167,344,378) (159,909,386)

– Unrealised losses (c) (14,078,060) (11,600,009)

68,099,407 107,771,946

(a) Unitholders’ capital/units in circulation

Number of Number of

units RM units RM

At beginning of the

financial period/year 193,666,416 279,281,341 211,412,712 289,210,418

Creation during the


Distribution reinvested - - 3,403,389 1,888,200

Cancellation during the

financial period/year (148,499,242) (83,367,816) (55,258,665) (30,011,094)

At end of the financial period/year 140,018,822 249,521,845 193,666,416 279,281,341

(b) Realised – distributable

31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year (159,909,386) (146,025,506)

Net realised losses for the financial period/year (7,434,992) (11,979,177)

Distributions out of realised income - (1,904,703)At end of the financial period/year (167,344,378) (159,909,386)

(c)

31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year (11,600,009) (21,423,264)

Net unrealised (loss)/gain for the financial period/year (2,478,051) 9,823,255 At end of the financial period/year (14,078,060) (11,600,009)

31.3.2020 30.9.2019

Unrealised – non-distributable

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9. UNITS HELD BY RELATED PARTIES

Related parties Relationship

AmFunds Management Berhad The Manager

AmInvestment Bank Berhad Holdings company of the Manager

AMMB Holdings Berhad Ultimate holding company of the Manager

Subsidiaries and associates of AMMB Subsidiaries and associate companies of

as disclosed in its financial statements the ultimate holding company of the

Manager

10. INCOME TAX

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Current financial year 2,179 1,981

A reconciliation of income tax expense applicable to net loss before tax at the statutory

income tax rate to income tax expense at the effective income tax rate of the Fund is as

follows:

Income tax payable is calculated on investment income less deduction for permitted

expenses as provided for under Section 63B of the Income Tax Act, 1967.

There were no units held by the Manager or any related party as at 31 March 2020 and 30

September 2019.

Pursuant to Schedule 6 of the Income Tax Act 1967, provided that the exemption shall not

apply to the profit paid or credited to a unit trust that is a wholesale fund which is a money

market fund. Profit income earned by Funds other than wholesale money market fund is

exempted from tax.

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

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10. INCOME TAX (CONT’D.)

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM


Taxation at Malaysian statutory rate of 24% (2019: 24%) (2,378,607) (1,427,248)

Tax effects of:

Income not subject to tax (337,329) (1,974,278)

Effect of different tax rate (3,051) (2,773)

Loss not allowed for tax deduction 2,608,241 3,367,113

Restriction on tax deductible expenses for unit

trust fund 67,387 1,072

Non-permitted expenses for tax purposes 38,050 37,976

Permitted expenses not used and not available for

future financial periods 7,488 119 Tax expense for the financial period 2,179 1,981

11. DISTRIBUTION

12. MANAGEMENT EXPENSE RATIO (“MER”)

The Fund’s MER is as follows:

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

% p.a. % p.a.

Manager’s fee 0.71 -*

Trustee’s fee 0.07 0.07

Fund’s other expenses 0.04 0.02 Total MER 0.82 0.09

* represents less than 0.01%.

13. PORTFOLIO TURNOVER RATIO (“PTR”)

No distribution was declared by the Fund for the financial periods ended 31 March 2020 and

31 March 2019.

The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by

the Fund to the average NAV of the Fund calculated on a daily basis.

The PTR of the Fund, which is the ratio of average total acquisitions and disposals of

Shariah-compliant investments to the average NAV of the Fund calculated on a daily basis,

is 0.22 times (2019: 0.16 times).

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14. SEGMENTAL REPORTING

– A portfolio of Shariah-compliant equity instruments;

–

–

Fixed

Equity CIS income

portfolio portfolio portfolio Total

RM RM RM RM

1.10.2019 to 31.3.2020

Gross dividend income 1,143,045 40,685 - 1,183,730

Profit income - - 243,597 243,597

Net loss from Shariah-

compliant investments:

- Financial assets at FVTPL (10,733,410) (111,944) (22,318) (10,867,672)

Total segment investment

(loss)/income for the financial period (9,590,365) (71,259) 221,279 (9,440,345)

1.10.2018 to 31.3.2019

Gross dividend income 1,324,388 - - 1,324,388

Profit income - - 393,566 393,566

Net (loss)/gain from Shariah-


- Financial assets at FVTPL (7,536,561) 28,082 6,855 (7,501,624)


(loss)/income for the financial period (6,212,173) 28,082 400,421 (5,783,670)

31.3.2020

Financial assets at FVTPL 52,366,032 2,931,044 - 55,297,076

Dividends receivable 519,809 - - 519,809 Total segment assets 52,885,841 2,931,044 - 55,816,885

The investment objective of each segment is to achieve consistent returns from the Shariah-

compliant investments in each segment while safeguarding capital by investing in diversified

portfolios. There have been no changes in reportable segments in the current financial

period. The segment information provided is presented to the Manager and Investment

Committee of the Fund.

A portfolio of Shariah-compliant fixed income instruments, including deposits with

financial institutions.

A portfolio of Shariah-compliant collective investment schemes; and

The Manager and Investment Committee of the Fund are responsible for allocating

resources available to the Fund in accordance with the overall investment strategies as set

out in the Investment Guidelines of the Fund. The Fund is managed by three segments:

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14. SEGMENTAL REPORTING (CONT’D.)

Fixed

Equity CIS income


RM RM RM RM

30.9.2019

Financial assets at FVTPL 86,475,981 2,795,143 2,571,276 91,842,400

Dividends receivable 351,733 13,925 - 365,658Total segment assets 86,827,714 2,809,068 2,571,276 92,208,058

There were no segment liabilities as at 31 March 2020 and 30 September 2019.

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Net reportable segment investment loss (9,440,345) (5,783,670)

Less: Expenses (470,519) (163,198)


Less: Income tax (2,179) (1,981) Net loss after tax (9,913,043) (5,948,849)

31.3.2020 30.9.2019

RM RM

Total segment assets 55,816,885 92,208,058

Amount due from Manager 11,875 -

Cash at banks 12,604,610 16,409,574 Total assets of the Fund 68,433,370 108,617,632

Total segment liabilities - -

Amount due to Manager 307,792 782,087

Amount due to Trustee 4,213 6,114

Distribution payable - 16,503

Sundry payables and accrued expenses 21,958 40,982Total liabilities of the Fund 333,963 845,686

In addition, certain assets and liabilities are not considered to be part of the net assets or

liabilities of an individual segment. The following table provides reconciliation between the

net reportable segment assets and liabilities and total assets and liabilities of the Fund.

Expenses of the Fund are not considered part of the performance of any investment

segment. The following table provides reconciliation between the net reportable segment

loss and net loss after tax:

32

AmIttikal

15. TRANSACTIONS WITH BROKERS AND FINANCIAL INSTITUTIONS

Brokerage fee, stamp

Brokers/Financial institutions Transaction value duty and clearing fee

RM % RM %

Hong Leong Investment Bank

Berhad 7,889,224 22.43 25,159 20.97

Maybank Investment Bank

Berhad 5,732,810 16.30 20,950 17.46

AmInvestment Bank Berhad* 5,214,437 14.82 17,032 14.19

RHB Investment Bank Berhad 4,627,460 13.16 16,504 13.75

CGS–CIMB Securities

Sdn. Bhd 3,163,549 8.99 11,415 9.51

Affin Hwang Investment Bank

Berhad 2,822,475 8.02 10,222 8.52

Kenanga Investment Bank

Berhad 2,496,968 7.10 7,766 6.47

Malayan Banking Berhad 1,244,309 3.54 4,546 3.79

CLSA Securities Malaysia

Sdn. Bhd 1,096,649 3.12 3,435 2.86

KAF Seagroatt & Campbell

Securities Sdn Bhd 872,874 2.48

Others financial institution 13,925 0.04 2,975 2.48

35,174,680 100.00 120,004 100.00

*

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks that include market risk, credit risk, liquidity risk,

single issuer risk, regulatory risk, management risk and non-compliance/Shariah non-

compliance risk.

A financial institution related to the Manager. The Manager is of the opinion that the

above transactions have been entered in the normal course of business and have been

established under terms that are no less favourable than those arranged with

independent third parties.

Risk management is carried out by closely monitoring, measuring and mitigating the above

said risks, careful selection of Shariah-compliant investments coupled with stringent

compliance to Shariah-compliant investment restrictions as stipulated by the Capital Market

and Services Act 2007, Securities Commission’s Guidelines on Unit Trust Funds and the

Deed as the backbone of risk management of the Fund.

The above transactions were in respect of listed securities and fixed income instruments.

Transactions in fixed income instruments do not involve any commission or brokerage.

Details of transactions with brokers and financial institutions for the financial period ended

31 March 2020 are as follows:

33

AmIttikal

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)

(a) Market risk

(i) Price risk

(ii) Rate of return risk

(b) Credit risk

(c) Liquidity risk

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting

obligations associated with financial liabilities that are settled by delivering cash or

another financial asset. Exposure to liquidity risk arises because of the possibility that

the Fund could be required to pay its liabilities or redeem its units earlier than expected.

The Fund maintains sufficient level of liquid assets, after consultation with the Trustee,

to meet anticipated payments and cancellations of units by unitholders. Liquid assets

comprise of deposits with licensed financial institutions and other instruments, which

are capable of being converted into cash within 5 to 7 days. The Fund’s policy is to

always maintain a prudent level of liquid assets so as to reduce liquidity risk.

Domestic profit rates on deposits and placements with licensed financial

institutions are determined based on prevailing market rates.

Rate of return risk will affect the value of the Fund’s Shariah-compliant

investments, given the rate of return movements, which are influenced by regional

and local economic developments as well as political developments.

Credit risk is the risk that the counterparty to a financial instrument will cause a financial

loss to the Fund by failing to discharge an obligation. The Fund is exposed to the risk of

bond issuers and financial institutions defaulting on their repayment obligations which in

turn would affect the NAV of the Fund.

For deposits with financial institutions, the Fund makes placements with financial

institutions with sound rating of P1/MARC-1 and above. Cash at banks are held for

liquidity purposes and are not exposed to significant credit risk.

Market risk, in general, is the risk that the value of a portfolio would decrease due to

changes in market risk factors such as equity prices, foreign exchange rates, rate of

return (yield curve) and commodity prices.

Price risk refers to the uncertainty of an investment’s future prices. In the event of

adverse price movements, the Fund might endure potential loss on its Shariah-

compliant investments. In managing price risk, the Manager actively monitors the

performance and risk profile of the investment portfolio.

34

AmIttikal


(d) Single issuer risk

(e) Regulatory risk

(f) Management risk

(g) Non-compliance/Shariah non-compliance risk

Any changes in national policies and regulations may have effects on the capital

market and the NAV of the Fund.

Internal policy restricts the Fund from investing in securities issued by any issuer of not

more than a certain percentage of its NAV. Under such restriction, the risk exposure to

the securities of any single issuer is diversified and managed based on internal/external

ratings.

This is the risk of the Manager, the Trustee or the Fund not complying with internal

policies, the Deed of the Fund, securities law or guidelines issued by the regulators. In

the case of an Islamic Fund, this includes the risk of the Fund not conforming to

Shariah Investment Guidelines. Non-compliance risk may adversely affect the Shariah-

compliant investments of the Fund when the Fund is forced to rectify the non-

compliance.

Poor management of the Fund may cause considerable losses to the Fund that in turn

may affect the NAV of the Fund.

35

AmIttikal

STATEMENT BY THE MANAGER

For and on behalf of the Manager

Chief Executive Officer

Kuala Lumpur, Malaysia

17 May 2020

I, Goh Wee Peng for and on behalf of the Manager, AmFunds Management Berhad, for

AmIttikal (the “Fund”) do hereby state that in the opinion of the Manager, the accompanying

condensed statement of financial position, condensed statement of comprehensive income,

condensed statement of changes in equity, condensed statement of cash flows and the

accompanying notes are drawn up in accordance with Malaysian Financial Reporting Standards

so as to give a true and fair view of the financial position of the Fund as at 31 March 2020 and

the comprehensive income, the changes in equity and cash flows of the Fund for the half year

then ended.

GOH WEE PENG

AmFunds Management Berhad

36

Trustee’s Report

For the Six Months Financial Period Ended 31 March 2020

To the Unit Holders of

AMITTIKAL

We are also of the opinion that:

(a)

(b)

Yours faithfully

AMANAHRAYA TRUSTEES BERHAD

ZAINUDIN BIN SUHAIMI

Deputy Chief Executive Officer


We, AMANAHRAYA TRUSTEES BERHAD, have acted as Trustee of AmIttikal for the six

months financial period ended 31 March 2020. In our opinion, AMFUNDS MANAGEMENT

BERHAD, the Manager, has operated and managed AMITTIKAL in accordance with the

limitations imposed on the investment powers of the management company under the Deed,

securities laws and the applicable Guidelines on Unit Trust Funds for the six months financial

period ended 31 March 2020.

Valuation and pricing is carried out in accordance with the Deed and any regulatory

requirements; and

Creation and cancellation of units have been carried out in accordance with the

Deed and any regulatory requirements.

19 May 2020

37

38

MANAGER’S REPORT Dear Unitholders, We are pleased to present you the Manager’s report and the unaudited accounts of AmBon Islam (“Fund”) for the financial period form 1 October 2019 to 31 March 2020.


Name AmBon Islam (“Fund”)

Category/ Type

Sukuk / Income

Objective AmBon Islam is a medium to long-term Sukuk fund that aims to provide a stream of halal income*. Note: * The income could be in the form of units or cash. Any material change to the investment objective of the Fund would require Unit Holders’ approval

Duration The Fund was established on 26 November 2001 and shall exist for as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue. In some circumstances, the unitholders can resolve at a meeting to terminate AmBon Islam.


BPAM Corporates (3 years to 7 years) Sukuk Index (“BPAM 3Y-7Y Sukuk Index”) (obtainable from www.aminvest.com) Note: The risk profile of the Fund may not be the same as the risk profile of the performance benchmark.


Income distribution (if any) is paid at least twice every year.


For the financial year under review, the size of the Fund stood at 81,628,558 units.

Size of holding As at 31 March 2020 As at 30 September 2019

No of units held


No of units held


5,000 and below 185,321 103 102,053 59

5,001-10,000 156,038 22 110,810 16

10,001-50,000 486,339 29 522,444 29

50,001-500,000 1,994,662 10 1,802,614 10

500,001 and above 78,806,198 15 50,514,809 11

39




As at 31.3.2020

%

FY 2019

%

FY 2018

%

FY 2017

%

Corporate sukuk 85.87 73.40 94.63 95.95

Malaysian government bond 4.98 18.00 - -

Money market deposit - - - 4.26

Cash, other assets and liabilities 9.15 8.60 5.37 -0.21

Total 100.00 100.00 100.00 100.00


Performance Details


Half year ended

31.3.2020 FY

2019 FY

2018 FY

2017

Net asset value (RM)* 100,862,889 67,510,971 33,635,825 46,019,117

Units in circulation* 81,628,558 53,052,730 27,717,587 36,501,065

Net asset value per unit (RM)* 1.2356 1.2725 1.2135 1.2608

Highest net asset value per unit (RM)* 1.3339 1.3199 1.2632 1.2609

Lowest net asset value per unit (RM)* 1.2267 1.2139 1.1975 1.2305


Total return (%)(1) -1.02 9.93 4.25 3.79

- Capital growth (%) -2.90 4.99 -3.52 1.38

- Income distribution (%) 1.88 4.94 7.77 2.41

Gross distribution (sen per unit) 2.39 6.00 9.80 3.00

Net distribution (sen per unit) 2.39 6.00 9.80 3.00



* Above prices and net asset value per unit are shown as ex-distribution. Note: (1) Total return is the actual/annualised return of the Fund for the respective

financial years computed based on the net asset value per unit and net of all fees.

(2) Management expense ratio (“MER”) is calculated based on the total fees and expenses incurred by the Fund divided by the average fund size calculated on a daily basis. The MER decreased by 0.01% as compared to 1.10% per annum for the financial year ended 30 September 2019 mainly due to decrease in expenses.

40

(3) Portfolio turnover ratio (“PTR”) is calculated based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis. The PTR decreased by 0.21 times (26.9%) as compared to 0.78 times for the financial year ended 30 September 2019 mainly due to increase in average fund size.


AmBon Islam(a) %

MGII/BPAM 3Y – 7Y Sukuk Index

** (b) %

One year 5.34 6.07

Three years 5.11 5.50

Five years 4.86 5.24

Ten years 4.58 4.66

Annual Total Return


AmBon Islam(a)

%

MGII/BPAM 3Y – 7Y Sukuk Index

** (b) %

2019 9.93 7.86

2018 4.25 4.62

2017 3.79 3.84

2016 6.86 7.93

2015 2.84 3.17

(a) Source: Novagni Analytics and Advisory Sdn Bhd. (b) BPAM Corporates (3 years to 7 years) Sukuk Index.

** Benchmark - from 26 November 2001 to 30 September 2016 Quantshop Medium Government Investment Issues

Index (“MGII”). - from 1 October 2016 onwards-

(3 years to 7 years) Sukuk Index. (“BPAM 3Y-7Y Sukuk Index”) (obtainable from www.aminvest.com)

The Fund performance is calculated based on the net asset value per unit of the Fund. Average total return of the Fund and its benchmark for a period is computed on the absolute return for that period annualised over one year. Note: Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up.

Fund Performance

For the financial period under review, the Fund registered a negative return of 1.02% comprising of negative 2.90% capital growth and 1.88% income distribution. Thus, the Fund’s negative return of 1.02% has underperformed the benchmark’s return of 1.43% by 2.45%. As compared with the financial year ended 30 September 2019, the net asset value (“NAV”) per unit of the Fund decreased by 2.90% from RM1.2725 to RM1.2356, while units in circulation increased by 53.86% from 53,052,730 units to 81,628,558 units.

41

The line chart below shows comparison between the annual performances of AmBon Islam and its benchmark, MGII/BPAM 3Y-7Y Sukuk Index, for the financial years ended 30 September.



For the financial period under review, the Fund invested primarily in medium to long-term Shariah compliant fixed income instruments. The Fund uses a top-down and relative value approach. It also involves the use of models that analyze and compare expected returns and assumed risk. The Fund also made reference to economic analysis, market conditions, and the sectorial analysis. Based on the findings, the investment manager focused on securities that are expected to deliver favourable return given the level of risk.

Portfolio Structure


As at 31.3.2020

%

As at 30.9.2019

%

Changes

%

Corporate sukuk 85.87 73.40 12.47

Malaysian government bond 4.98 18.00 -13.02

Cash, other assets and liabilities 9.15 8.60 0.55

Total 100.00 100.00

For the financial period under review, the Fund’s exposure to Corporate Sukuks have increased from 73.40% to 85.87% and decreased Government Issues to 4.98% of NAV.

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Tota

l Ret

urn

(%

)

2015 2016 2017 2018 2019

Fund 2.84 6.86 3.79 4.25 9.93

Benchmark 3.17 7.93 3.84 4.62 7.86


42

Cross Trades

There were no cross trades undertaken during the financial period under review.


During the financial period under review, the Fund declared income distributions, detailed as follows:

Date of distribution

Distribution per unit (sen)

NAV per unit Cum-Distribution

(RM)

NAV per unit Ex-Distribution

(RM)

23-Mar-20 2.39 1.2597 1.2358

There was no unit split declared for the financial period under review.

State of Affairs





Market Review

Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 3.00% in the last Monetary Policy Committee (MPC) meeting of the 2019. It highlighted the global growth risks while striking a neutral tone on domestic growth prospect, forecasting Gross Domestic Product (GDP) growth of 4.3%-4.8% for 2019 and 2020. The policy decision was followed by a surprise Statutory Reserve Requirement (SRR) cut of 50bps, releasing approximately MYR7b of liquidity into the banking system. Separately, Malaysia 3Q2019 GDP growth slowed to 4.4% YoY (2Q2019: 4.9%), in line with consensus estimate. As for the local bond markets in 4Q2019, following the profit taking driven sell-off in September and October, the Malaysian Government Securities (MGS) market rebounded in November as investors picked up value especially in the long end of the curve. The unchanged OPR, coupled with the surprise SRR reduction, strengthened the market’s conviction of a 1Q2020 cut. Indeed, on 22 January, BNM cut OPR by 25bps to 2.75%, sending yields down further by 8-18bps. In February, the local bond market continued to rally in tandem with the United States (US) treasuries and in anticipation of another 25bps OPR cut in 2020. The MGS curve parallel shifted downward by 18-35bps in February despite the political turmoil in the country. While foreign flows were affected, the government bonds were seen strongly supported by local investors despite the spike in yields on the day of Tun Mahathir’s resignation as the Prime Minister of Malaysia. Separately, Malaysia’s 4Q2019 real GDP printed a disappointing 3.6%YoY (consensus expectation: 4.5% YoY) dragged down mainly by the sharp contraction in net exports by -9.8% YoY. On sector wise, the Agriculture and Mining suffered contraction in 4Q2029, in line with BNM’s statement on commodity sector supply disruption.

43

Stepping into an anomalous and turbulent month of March, Malaysia experienced a mid-term change in ruling coalition resulting in a new Prime Minister and Cabinet. Political uncertainty took a backseat as the country then swiftly went into lockdown mode as the number of Covid-19 cases spiked. This necessitate the new Government to announce MYR250b fiscal stimulus package in addition to the MYR20b stimulus announced by previous Government on 27 February. The global flight to liquidity snapped the bullish trend in Malaysian Ringgit (MYR) bond markets and panic selling sent Malaysia Government Securities (MGS)/Government Investment Issue (GII) yields soaring 70-100bps across the curve.

The MGS/GII market was hit by the combination of foreign selling, bank traders cutting losses, and redemption-driven selling by asset managers. Signs of stabilization returned to the market following BNM’s emergency SRR cut of 100bps on 19 March 2020, and the MGS/(GII curves ended the month 20-80bps higher. Despite the massive selloff, the MGS/GII auctions (15 year MGS, 20 year GII, 5 year MGS, and 7 year GII) garnered decent bid-to-cover ratios of 2.1-2.9x, underpinned by demand from real money investors attracted to the higher yields.

Meanwhile, on 26 March 2020, S&P affirmed Malaysia’ A-/Stable sovereign rating with the expectation that Malaysia would maintain its fiscal consolidation trajectory in the medium term despite higher fiscal deficit in 2020 (from fiscal stimulus and lower oil-related revenue). Malaysian Ringgit (MYR) had weakened from 4.22 to 4.32 against the United States Dollar (USD) (after reaching the high of 4.45 at one point), amid plunging oil prices following the fallout of Organization of the Petroleum Exporting Countries (OPEC+) meeting in early March.

Market Outlook

Bond market sentiments should remain positive due to BNM policy remaining dovish as growth risks are tilted to the downside in 2020 and into 1H2021 which would likely require further OPR cuts in 2020. The quantum of further cuts in OPR rate would depend on

a) factors surrounding the COVID-19 pandemic as well as; andb) any restart of US-China and/or United States (US) - European Union (EU)

trade-tensions.

Market liquidity remains ample and demand for fixed income instruments is expected to remain strong despite any concerns on MGS/GII supply.


The following information was updated:

1. Seohan Soo resigned as a Non-Independent, Non-Executive Director forAmFunds Management Berhad and AmIslamic Funds Management SdnBhd with effect from 1st January 2020.

Kuala Lumpur, Malaysia AmFunds Management Berhad

17 May 2020

AmBon Islam


AS AT 31 MARCH 2020

31.3.2020 30.9.2019


Note RM RM

ASSETS


Amount due from Manager 5(a) 987,379 4,413,254

Cash at bank 8,431,596 1,581,980

TOTAL ASSETS 101,057,592 67,696,687

LIABILITIES



Distributions payable 70,447 103,815



EQUITY


(Accumulated losses)/retained earnings 8(b)(c) (684,540) 3,571,933

TOTAL EQUITY 8 100,862,889 67,510,971


UNITS IN CIRCULATION 81,628,558 53,052,730



44

AmBon Islam



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

Note RM RM

SHARIAH-COMPLIANT INVESTMENT

(LOSS)/INCOME

Profit income 1,957,996 1,029,149

Net (loss)/gain from Shariah-compliant investments:


loss (“FVTPL”) 7 (3,614,904) 610,118

(1,656,908) 1,639,267

EXPENDITURE

Manager’s fee 5 (455,003) (206,201)

Trustee’s fee 6 (31,850) (14,434)

Auditors’ remuneration (4,750) (4,685)Tax agent’s fee (2,050) (2,022)


(498,955) (230,047)

Net (loss)/income before tax (2,155,863) 1,409,220

Less: Income tax 10 - -

Net (loss)/income after tax (2,155,863) 1,409,220


Total comprehensive (loss)/income for thefinancial period (2,155,863) 1,409,220

Total comprehensive (loss)/income comprises the following:

Realised income 1,754,058 793,404

Unrealised (loss)/gain (3,909,921) 615,816(2,155,863) 1,409,220

Distributions for the financial period

Net distribution 2,100,610 787,828

Gross/net distribution per unit (sen) 2.39 2.00


45

AmBon Islam



Retained

earnings/

Unitholders’ (Accumulated Total

capital loss) equity

Note RM RM RM

At 1 October 2018 32,072,990 1,562,835 33,635,825

Total comprehensive income

for the financial period - 1,409,220 1,409,220

Creation of units 21,999,773 - 21,999,773

Reinvestments of distributions 692,338 692,338

Cancellation of units (7,670,888) - (7,670,888)

Distributions - (787,828) (787,828)

Balance at 31 March 2019 47,094,213 2,184,227 49,278,440

At 1 October 2019 63,939,038 3,571,933 67,510,971

Total comprehensive income



Reinvestments of distributions 8(a) 2,030,163 - 2,030,163

Cancellation of units 8(a) (29,875,353) - (29,875,353)

Distribution 11 - (2,100,610) (2,100,610)

Balance at 31 March 2020 101,547,429 (684,540) 100,862,889


46

AmBon Islam



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM



Proceeds from sale of Shariah-compliant

investments 35,038,500 6,572,200

Profit received 1,737,609 882,678

Manager’s fee paid (411,961) (194,349)




Net cash used in operating and investing activities (32,050,672) (13,777,045)

CASH FLOWS FROM FINANCING ACTIVITIES



Distribution paid (103,815) (2,175)

Net cash generated from financing activities 38,900,288 14,607,363

NET INCREASE IN CASH AND

CASH EQUIVALENTS 6,849,616 830,318




END OF FINANCIAL PERIOD 8,431,596 2,602,513

Cash and cash equivalents comprise:Cash at bank 8,431,596 2,602,513


47

AmBon Islam

NOTES TO THE CONDENSED FINANCIAL STATEMENTSFOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2019 TO 31 MARCH 2020





AmBon Islam (“the Fund”) was established pursuant to a Deed dated 30 October 2001 as



The Fund aims to provide investors with a consistent stream of “halal income”, derived from

investments based on Principles of Shariah. As provided in the Deed, the financial year

shall end on 30 September and the units in the Fund were first offered for sale on 26

November 2001.




as otherwise stated in the accounting policies and comply with Malaysian Financial

Reporting Standards 134: Interim Financial Reporting (“MFRS 134”) as issued by the

Malaysian Accounting Standards Board (“MASB”) and Securities Commission Malaysia’s

Guidelines on Unit Trust Funds in Malaysia.

The adoption of MFRS which have been effective during the financial period did not have

any material financial impact to the financial statements.





48

AmBon Islam



Effective for

financial periods












(i) Profit income

(ii) Gain or loss on disposal of investments

Income is recognised to the extent that it is probable that the economic benefits will

flow to the Fund and the income can be reliably measured. Income is measured at the

fair value of consideration received or receivable.

For all profit-bearing financial assets, profit income is calculated using the

effective profit method. Effective profit rate is the rate that exactly discounts

estimated future cash payments or receipts through the expected life of the

financial instrument or a shorter period, where appropriate, to the net carrying

amount of the financial asset. The calculation takes into account all contractual

terms of the financial instrument and includes any fees or incremental costs that

are directly attributable to the instrument and are an integral part of the effective

profit rate, but not future credit losses.






disposal is measured as the difference between the net disposal proceeds and

the carrying amount of the Shariah-compliant investments. The net realised gain

or loss is recognised in profit or loss.

49

AmBon Islam


3.2 Income tax




3.5 Distribution


Current tax assets and liabilities are measured at the amount expected to be

recovered from or paid to the tax authorities. The tax rates and tax laws used to

compute the amount are those that are enacted or substantively enacted at the

reporting date.



Distributions are at the discretion of the Fund. A distribution to the Fund’s unitholders

is accounted for as a deduction from realised income. A proposed distribution is


reinvested or paid in cash to the unitholders on the income payment date.

Reinvestment of units is based on the NAV per unit on the income payment date,

which is also the time of creation.



(“MFRS 132”).


items recognised outside profit or loss, either in other comprehensive income or

directly in equity.






50

AmBon Islam







Business model








acquisition of the financial asset. All financial liabilities are recognised initially at

fair value and, in the case of financial liabilities not recorded at FVTPL, net of

directly attributable transaction costs.


immediately recognises the difference between the transaction price and fair

value (a “Day 1” profit or loss) in profit or loss provided that fair value is evidenced

by a quoted price in an active market for an identical asset or liability (i.e. Level 1

input) or based on a valuation technique that uses only data from observable

markets. In all other cases, the difference between the transaction price and

model value is recognised in profit or loss on a systematic and rational basis that

reflects the nature of the instrument over its tenure.

The classification and subsequent measurement of debt instruments held by the Fund

are determined based on their business model and cash flow characteristics.



contractual cash flows from the assets, or is to collect both the contractual cash flows

and cash flows arising from the sale of assets. If neither of these is applicable (e.g. the

financial assets are held for trading purposes), then the financial assets are classified

as part of “other” business model. Factors considered by the Fund in determining the

business model for a portfolio of assets include past experience on how the cash flows

for these assets were collected, how the asset’s performance is evaluated and

reported to key management personnel, and how risks are assessed and managed.

51

AmBon Islam









A financial asset is measured at amortised cost if it is held within a business

model whose objective is to hold financial assets in order to collect contractual

cash flows and its contractual terms give rise on specified dates to cash flows

that are solely payments of principal and profit on the principal amount

outstanding. The Fund includes in this category deposits with financial institution,

cash at banks, amounts due from financial institutions, amount due from the

Manager and other receivables.


(“FVOCI”) if its business model is both to hold the asset to collect contractual

cash flows and to sell the financial asset. In addition, the contractual terms of the

financial assets give rise on specified dates to cash flows that are solely

payments of principal and profit on the outstanding principal.



financial assets’ contractual cash flows represent solely payment of principal and profit

(“SPPP”). In making this assessment, the Fund considers whether the contractual

cash flows are consistent with a basic financing arrangement, i.e. profit includes only

consideration for time value of money, credit risk, other basic financing risks and a

profit margin that is consistent with a basic financing arrangement. Financial assets

with embedded derivatives are considered in their entirety when determining whether

their cash flows are SPPP.









52

AmBon Islam




Financial assets at FVOCI (cont’d.)





-

-

the rights to receive cash flows from the asset have expired, or

These investments are initially recorded at fair value and transaction costs are

expensed in the profit or loss. Subsequent to initial recognition, these investments

are remeasured at fair value. All fair value adjustments are initially recognised

through OCI. Debt instruments at FVOCI are subject to impairment assessment.



are measured at fair value. Changes in the fair value of those financial

instruments are recorded in “Net gain or loss on financial assets at FVTPL”. Profit

earned element of such instrument is recorded in “Profit income”.

Instruments that qualify for amortised cost or FVOCI may be irrevocably

designated as FVTPL, if doing so eliminates or significantly reduces a

measurement or recognition inconsistency. Equity instruments are normally

measured at FVTPL, nevertheless, the Fund is allowed to irrevocably designate

equity instruments that are not held for trading as FVOCI, with no subsequent

reclassification of gains or losses to profit or loss.


cost, where the substance of the contractual arrangement results in the Fund having

an obligation either to deliver cash or another financial asset to the holder. After initial





the Fund has transferred its rights to receive cash flows from the asset or

has assumed an obligation to pay the received cash flows in full without

material delay to a third party under a “pass-through” arrangement; and

either:

A financial asset (or, where applicable a part of a financial asset or part of a

group of similar financial assets) is derecognised when:

53

AmBon Islam


3.11 Derecognition of financial instruments (cont’d.)

(i) Derecognition of financial asset (cont’d.)

-

-



-

-

-


The ECL in respect of financial assets at amortised cost, if any, is recognised in profit

or loss.






the Fund has transferred substantially all the risks and rewards of the

asset, or

the Fund has neither transferred nor retained substantially all the risks

and rewards of the asset, but has transferred control of the asset.


discharged, cancelled or expired. Gains and losses are recognised in profit or

loss when the liabilities are recognised, and through the amortisation process.

For Shariah-compliant investments in fixed income securities, nominal value is the

face value of the securities and fair value is determined based on the indicative prices

from Bond Pricing Agency Malaysia Sdn Bhd plus accrued profit, which includes the

accretion of discount and amortisation of premium. Adjusted cost of investments

relates to the purchase cost plus accrued profit, adjusted for amortisation of premium

and accretion of discount, if any, calculated over the period from the date of acquisition

to the date of maturity of the respective securities as approved by the Manager and

the Trustee. The difference between adjusted cost and fair value is treated as

unrealised gain or loss and is recognised in profit or loss. Unrealised gains or losses

recognised in profit or loss are not distributable in nature.


assets at amortised cost. The Fund recognises a loss allowance for such losses at

each reporting date. The measurement of ECL reflects:







54

AmBon Islam




4. SHARIAH-COMPLIANT INVESTMENTS

31.3.2020 30.9.2019

RM RM


At nominal value:

Corporate sukuk 84,600,000 45,350,000

Government securities 4,700,000 11,000,000

89,300,000 56,350,000

At fair value:

Corporate sukuk 86,612,356 49,550,975

Government securities 5,026,261 12,150,478

91,638,617 61,701,453

Unrealised gains and losses comprise changes in the fair value of financial

instruments for the period and from reversal of prior period’s unrealised gains and

losses for financial instruments which were realised (i.e. sold, redeemed or matured)

during the reporting period.

Realised gains and losses on disposals of financial instruments classified at FVTPL

are calculated using the weighted average method. They represent the difference






result in outcomes that could require a material adjustment to the carrying amount of

the asset or liability in the future.


the Fund may sell its Shariah-compliant investments in the short-term for profit-taking

or to meet unitholders’ cancellation of units.

No major judgments have been made by the Manager in applying the Fund’s

accounting policies. There are no key assumptions concerning the future and other

key sources of estimation uncertainty at the reporting date, that have a significant risk

of causing a material adjustment to the carrying amounts of assets and liabilities within

the next financial period.

55

AmBon Islam

4. SHARIAH-COMPLIANT INVESTMENTS (CONT’D.)


Fair

value as a Nominal Fair Adjusted percentage

Issuer value value cost of NAV RM RM RM %

31.3.2020

Corporate sukuk

15.04.2020 DRB-Hicom

Berhad 2,000,000 2,072,032 2,068,820 2.05

15.05.2020 KT Kira

Sertifikalari

Varlik

Kiralama

A.S. 2,000,000 2,044,952 2,042,042 2.03

21.05.2020 TF Varlik

Kiralama

A.S. 2,000,000 2,043,649 2,041,589 2.03

25.11.2021 Bank Muamalat

Malaysia

Berhad 2,000,000 2,084,261 2,038,681 2.07

29.08.2022 Celcom

Networks

Sdn Bhd 1,000,000 1,035,135 1,005,072 1.03

10.11.2023 Jimah Energy

Ventures

Sdn Bhd 500,000 615,234 592,340 0.61

27.02.2025 TG Excellence

Berhad 12,000,000 11,903,153 12,044,153 11.80

05.01.2026 Edra Energy

Sdn Bhd 1,000,000 1,098,704 1,035,351 1.09

19.03.2026 IJM Land

Berhad 3,000,000 3,067,807 3,185,123 3.04

25.09.2026 Malayan

Banking

Berhad 2,000,000 1,989,764 2,001,584 1.97

21.12.2026 MBSB Bank

Berhad 4,500,000 4,611,938 4,566,668 4.57

19.03.2027 IJMLand

Berhad 500,000 512,111 501,020 0.51

Maturity

date

56

AmBon Islam


Fair



31.3.2020 (cont’d.)

Corporate sukuk (cont’d.)

04.06.2027 Jimah East

Power

Sdn Bhd 5,000,000 5,499,125 5,567,839 5.46

27.09.2027 IJM

Land

Berhad 2,300,000 2,208,661 2,306,694 2.19

09.12.2027 First Abu Dhabi Bank

PJSC 3,500,000 3,715,024 3,551,469 3.68

10.02.2028 Aeon Credit

Service (M)

Berhad 2,000,000 1,959,399 2,010,759 1.94

16.03.2028 Tanjung Bin

Energy

Issuer

Berhad 1,500,000 1,669,174 1,568,879 1.65

20.04.2028 UMW Holdings

Berhad 3,500,000 3,957,371 3,840,908 3.92


Power

Sdn Bhd 1,000,000 1,113,168 1,081,197 1.10

30.04.2029 Southern Power

Generation

Sdn Bhd 1,000,000 1,078,156 1,029,398 1.07


Berhad 4,700,000 4,561,630 4,772,895 4.52

10.01.2031 Projek

Lebuhraya

Usahasama

Berhad 1,000,000 1,096,264 1,073,284 1.09


Energy Issuer

Berhad 500,000 585,089 539,419 0.58

25.11.2033 Sarawak

Energy

Berhad 1,600,000 1,745,141 1,627,557 1.73


Sdn Bhd 2,800,000 3,296,373 2,969,909 3.27

Maturity

date

57

AmBon Islam


Fair



31.3.2020 (cont’d.)


23.08.2034 Lebuhraya

DUKE Fasa

3 Sdn Bhd 1,000,000 1,072,622 1,078,336 1.06

27.09.2034 Kuala Lumpur

Kepong

Berhad 3,000,000 2,873,643 3,001,623 2.85

13.02.2035 Lembaga

Pembiayaan

Perumahan

Sektor Awam 4,500,000 4,207,981 4,520,416 4.17

21.02.2035 Danum

Capital

Berhad 4,500,000 4,102,641 4,516,866 4.07


DUKE Fasa

3 Sdn Bhd 2,500,000 2,705,457 2,565,530 2.68


Sdn Bhd 2,000,000 2,395,494 2,197,982 2.38

25.02.2050 Prasarana

Malaysia Berhad 4,200,000 3,691,203 4,215,742 3.66

Total corporate sukuk 84,600,000 86,612,356 87,159,145 85.87

Government Securities

09.07.2029 Government

of Malaysia 4,700,000 5,026,261 5,145,703 4.98 Total government securities 4,700,000 5,026,261 5,145,703 4.98


Shortfall of fair value over adjusted cost (666,231)

Maturity

date

58

AmBon Islam


Fair



30.9.2019

Corporate sukuk


Berhad 2,000,000 2,106,152 2,064,172 3.12

15.05.2020 KT Kira

Sertifikalari

Varlik

Kiralama

A.S. 2,000,000 2,055,966 2,043,528 3.05

21.05.2020 TF Varlik

Kiralama

A.S. 2,000,000 2,047,964 2,041,904 3.03

25.11.2021 Bank Muamalat

Malaysia

Berhad 2,000,000 2,091,839 2,038,379 3.10

29.08.2022 Celcom

Networks

Sdn Bhd 1,000,000 1,039,655 1,005,212 1.54

10.11.2023 Jimah Energy

Ventures

Sdn Bhd 500,000 628,231 601,483 0.93


Sdn Bhd 1,000,000 1,099,324 1,037,253 1.63

30.01.2026 Malayan

Banking

Berhad 1,000,000 1,053,611 1,008,001 1.56

25.09.2026 Malayan

Banking

Berhad 2,000,000 2,003,258 2,001,358 2.97

19.03.2027 IJMLand

Berhad 500,000 534,607 500,942 0.79

27.09.2027 IJM

Land

Berhad 2,300,000 2,309,194 2,306,658 3.42

09.12.2027 First Abu Dhabi Bank

PJSC 3,500,000 3,767,944 3,551,469 5.58

date

Maturity

59

AmBon Islam


Fair



30.9.2019 (cont’d.)



Energy

Issuer

Berhad 1,500,000 1,704,202 1,571,698 2.52


Berhad 3,500,000 4,023,822 3,852,636 5.96

01.12.2028 Konsortium

Lebuhraya

Utara-

Timur (KL)

Sdn Bhd 1,650,000 1,744,259 1,667,304 2.58


Power

Sdn Bhd 1,000,000 1,136,628 1,084,092 1.68

30.04.2029 Southern Power

Generation

Sdn Bhd 1,000,000 1,111,536 1,029,886 1.65

10.01.2031 Projek

Lebuhraya

Usahasama

Berhad 1,000,000 1,131,051 1,075,950 1.68


Energy Issuer

Berhad 500,000 603,579 540,383 0.89

25.11.2033 Sarawak

Energy

Berhad 1,600,000 1,803,109 1,627,557 2.67


Sdn Bhd 2,800,000 3,385,581 2,973,868 5.01

14.02.2034 Danum

Capital

Berhad 2,500,000 2,734,286 2,515,386 4.05


DUKE Fasa

3 Sdn Bhd 1,000,000 1,140,378 1,080,330 1.69

27.09.2034 Kuala Lumpur

Kepong

Berhad 3,000,000 2,954,559 3,001,299 4.38

Maturity

date

60

AmBon Islam


Fair



30.9.2019 (cont’d.)



DUKE Fasa

3 Sdn

Bhd 2,500,000 2,876,284 2,567,340 4.26


Sdn Bhd 2,000,000 2,463,956 2,201,770 3.66


Government Securities


of Malaysia 1,000,000 1,069,843 1,012,677 1.59


of Malaysia 10,000,000 11,080,635 10,455,228 16.41

Total government securities 11,000,000 12,150,478 11,467,905 18.00


Excess of fair value over adjusted cost 3,243,690


31.3.2020 30.9.2019

Note RM RM

(a) Due from ManagerCreation of units (i) 987,379 4,413,254

(b) Due to ManagerManager’s fee payable (ii) 105,339 62,297

(i) The amount represents amount receivable from the Manager for units created.



Maturity

date

61

AmBon Islam


(ii)


7. NET (LOSS)/GAIN FROM SHARIAH-COMPLIANT INVESTMENTS

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Net (loss)/gain on financial assets at FVTPL comprised:

− Net realised gain/(loss) on sale of Shariah-compliant

investments 295,017 (5,698)

− Net unrealised (loss)/gain on changes in fair values of

Shariah-compliant investments (3,909,921) 615,816

(3,614,904) 610,118

8. TOTAL EQUITY


31.3.2020 30.9.2019

Note RM RM


(Accumulated losses)/retained earnings

─ Realised (loss)/income (b) (18,309) 328,243

─ Unrealised gain (c) (666,231) 3,243,690

100,862,889 67,510,971

Manager’s fee is at a rate of 1.00% (2019: 1.00%) per annum on the NAV of the Fund,








62

AmBon Islam

8. TOTAL EQUITY (CONT’D.)

(a)

31.3.2020 30.9.2019

Number of Number of

units RM units RM

At beginning of the


Creation during the


Distributions reinvested 1,642,793 2,030,163 2,000,459 2,514,165



At end of the financial period/year 81,628,558 101,547,429 53,052,730 63,939,038


31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year 328,243 1,218,216

Net realised income for the financial period/year 1,754,058 1,823,497

Distributions out of realised income (2,100,610) (2,713,470)At end of the financial period/year (18,309) 328,243

(c) Unrealised – non-distributable

31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year 3,243,690 344,619

Net unrealised (loss)/gain for the financial period/year (3,909,921) 2,899,071At end of the financial period/year (666,231) 3,243,690


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





Subsidiaries and associates of AMMB Subsidiaries and associate companies of the

as disclosed in its financial statements ultimate holding company of the Manager

Unitholders’ capital/units in circulation


September 2019.

63

AmBon Islam

10. INCOME TAX

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Net (loss)/income before tax (2,155,863) 1,409,220

Taxation at Malaysian statutory rate of 24% (2019: 24%) (517,407) 338,213

Tax effects of:

Income not subject to tax (540,723) (394,792)

Loss not allowed for tax deduction 938,381 1,368

Restriction on tax deductible expenses for unit trust fund 99,473 45,734

Non-permitted expenses for tax purposes 9,224 4396

Permitted expenses not used and not available for future

11,052 5,081Tax expense for the financial period - -

11. DISTRIBUTION

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Undistributed net income brought forward 346,552 -

Profit income 1,957,996 1,017,875

Net realised gain on sale of Shariah-compliant investments 295,017 -

2,599,565 1,017,875

Less: Expenses (498,955) (230,047)

Total amount of distribution 2,100,610 787,828

financial periods

Distribution to unitholders declared on 23 March 2020 (declared on 27 March 2019 for the

previous financial period) are from the following sources:

Pursuant to Schedule 6 of the Income Tax Act 1967 provided that the exemption shall not

apply to the profit paid on credited to a unit trust that is a wholesale fund which is a money


exempted from tax.

A reconciliation of income tax expense applicable to net (loss)/income before tax at the

statutory income tax rate to income tax expense at the effective income tax rate of the Fund

is as follows:

Income tax payable is calculated on Shariah-compliant investment income less deduction

for permitted expenses as provided for under Section 63B of the Income Tax Act, 1967.

64

AmBon Islam

11. DISTRIBUTION (CONT’D.)

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Gross/net distribution per unit (sen) 2.39 2.00

Distribution made out of:

– Realised income 2,100,610 787,828

Comprising:

Distribution reinvested 2,030,163 692,338

Distribution to be reinvested 70,447 95,490

2,100,610 787,828



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

% p.a. % p.a.

Manager’s fee 1.00 1.00


Fund’s other expenses 0.02 0.04

Total MER 1.09 1.11







is 0.57 times (2019: 0.33 times).

In accordance with the objective of the Fund, substantially all of the Fund’s Shariah-

compliant investments are made in the form of Shariah-compliant fixed income securities in

Malaysia. The Manager is of the opinion that the risk and rewards from these Shariah-

compliant investments are not individually or segmentally distinct and hence the Fund does

not have a separately identifiable business or geographical segments.

Included in the distributions for the financial period ended 31 March 2020 was RM346,552

distributed from previous financial years’ realised income.

65

AmBon Islam

15. TRANSACTIONS WITH FINANCIAL INSTITUTIONS

Financial institutions

RM %

CIMB Islamic Bank Berhad 30,279,370 29.12

CIMB Bank Berhad 25,715,918 24.73

AmBank (M) Berhad* 18,852,216 18.13

Malayan Banking Berhad 12,512,748 12.03

Standard Chartered Bank Malaysia Berhad 4,950,085 4.76

Bank Islam Malaysia Berhad 4,863,100 4.68

RHB Investment Bank Berhad 4,700,000 4.52

AmBank Islamic Berhad* 1,077,402 1.03

Hong Leong Bank Berhad 1,035,314 1.00

Total 103,986,153 100.00

*


(a) Market risk

Details of transactions with financial institutions for the financial period ended 31 March 2020

are as follows:

Financial institutions related to the Manager. The Manager is of the opinion that the






compliance to Shariah-compliant investments restrictions as stipulated by the Capital Market





compliance risk.

The above transactions were in respect of Shariah-compliant fixed income instruments.

Transactions in these Shariah-compliant investments do not involve any commission or

brokerage.


changes in market risk factors such as equity prices, rate of return (yield curve), foreign

exchange rates and commodity prices.

Transaction value

66

AmBon Islam


(i) Rate of return risk

(b) Credit risk

(c) Liquidity risk


(e) Regulatory risk

Domestic profit rates on deposits and placements with licensed financial institutions

are determined based on prevailing market rates.



sukuk issuers and financial institutions defaulting on their repayment obligations which in


For deposit with financial institution, the Fund makes placements with financial

institutions with sound rating of P1/MARC-1 and above. Cash at bank is held for liquidity

purposes and is not exposed to significant credit risk.



another financial asset. Exposure to liquidity risk arises because of the possibility that the

Fund could be required to pay its liabilities or redeem its units earlier than expected. The

Fund maintains sufficient level of liquid assets, after consultation with the Trustee, to

meet anticipated payments and cancellations of units by unitholders. Liquid assets

comprise of deposits with licensed financial institutions and other instruments, which are

capable of being converted into cash within 5 to 7 days. The Fund’s policy is to always

maintain a prudent level of liquid assets so as to reduce liquidity risk.

Although Islamic Fund does not deal with profit-bearing accounts and products, the

fluctuation of profit rate may affect the performance of an Islamic Fund.




ratings.

Any changes in national policies and regulations may have effects on the capital market

and the NAV of the Fund.

Rate of return risk will affect the value of the Fund’s Shariah-compliant investments,

given the rate of return movements, which are influenced by regional and local

economic developments as well as political developments.

67

AmBon Islam


(f) Management risk




the case of an Islamic Fund, this includes the risk of the Fund not conforming to Shariah

Investment Guidelines. Non-compliance risk may adversely affect the Shariah-compliant

investments of the Fund when the Fund is forced to rectify the non-compliance.



68

AmBon Islam



GOH WEE PENG



17 May 2020

I, Goh Wee Peng, for and on behalf of the Manager, AmFunds Management Berhad, for AmBon

Islam (the “Fund”) do hereby state that in the opinion of the Manager, the accompanying

condensed statement of financial position, condensed statement of comprehensive income,

condensed statement of changes in equity, condensed statement of cash flows and the

accompanying notes are drawn up in accordance with Malaysian Financial Reporting Standards

so as to give a true and fair view of the financial position of the Fund as at 31 March 2020 and

the comprehensive income, the changes in equity and cash flows of the Fund for the half year

then ended.


69

Trustee’s Report



AMBON ISLAM


(a)

(b)

(c)

Yours faithfully




8 May 2020

We, AMANAHRAYA TRUSTEES BERHAD, have acted as Trustee of AMBON ISLAM for the

six months financial period ended 31 March 2020. In our opinion, AMFUNDS MANAGEMENT

BERHAD, the Manager, has operated and managed AMBON ISLAM in accordance with the





requirement;

Creation and cancellation of units are carried out in accordance with the Deed and any

regulatory requirement; and

The distribution of income made by AMBON ISLAM as declared by the Manager is

appropriate and reflects the investment objective of AMBON ISLAM.


70

71

MANAGER’S REPORT

Dear Unitholders,

We are pleased to present you the Manager’s report and the unaudited accounts of AmAl-Amin (“Fund”) for the financial period from 1 October 2019 to 31 March 2020.


Name AmAl-Amin (“Fund”)

Category/ Type

Islamic Fixed Income / Income

Objective AmAl-Amin aims to provide you with a regular stream of “halal” monthly income* by investing in Islamic money market and sukuk.

Note: * The income could be in the form of units or cash.Any material change to the investment objective of the Fund would require UnitHolders’ approval.

Duration The Fund was established on 26 November 2001 and shall exist for as long as it appears to the Manager and to the Trustee that it is in the interests of unitholders for it to continue. In some circumstances, the unitholders can resolve at a meeting to terminate AmAl-Amin.


Malayan Banking Berhad Al-Mudharabah (GIA) 1-Month Rate (“MBB”). (obtainable from www.aminvest.com / www.maybank2u.com.my)

Note: The benchmark does not imply that the risk profile of the Fund is the same as the risk profile of the benchmark. Investors of the Fund will assume higher risk compared to the benchmark. Hence, the returns of the Fund may be potentially higher due to the higher risk faced by the investors.


Income is calculated daily and paid monthly within 14 days after the last day of each month or on full redemption.




No of units held


No of units held


5,000 and below 35,476 16 36,905 17

5,001-10,000 79,677 10 118,253 16

10,001-50,000 530,368 25 502,953 25

50,001-500,000 4,682,272 30 8,105,274 42

500,001 and above 191,598,856 39 274,294,105 44

72




As at 31.3.2020

%

FY 2019

%

FY 2018

%

FY 2017

%

Corporate sukuk 54.07 42.69 62.01 55.87

Commercial papers 5.00 5.25 8.10 -

Money market deposit 20.26 38.01 12.17 41.20

Cash, other assets & liabilities 20.67 14.05 17.72 2.93

Total 100.00 100.00 100.00 100.00


Performance Details


Half year ended

31.3.2020 FY

2019 FY

2018 FY

2017



Net asset value per unit (RM)* (1) 1.0172 1.0127 1.0189 1.0167




Total return (%)(2) 1.54 3.61 3.28 3.03

- Capital growth (%) - - - -

- Income distribution(%) 1.54 3.61 3.28 3.03

Gross distribution (RM) 3,272,582 7,069,698 3,652,507 5,722,381

Net distribution (RM) 3,272,582 7,069,698 3,652,507 5,722,381



* Above price and net asset value per unit are shown as ex-distribution.

Note: (1) With the exemption granted by the authority in relation to determine the unit

pricing of the Fund, subscription/redemption price for the unit of the Fund maydiffer from the NAV per unit stated above.

(2) Total return is computed based on the income return of the Fund net of all fees.(3) Management expense ratio (“MER”) is calculated based on the total fees and

expenses incurred by the Fund divided by the average fund size calculated ona daily basis. The MER increased by 0.21% as compared to 0.47% per annumfor the financial year ended 30 September 2019 mainly due to increase inexpenses.

73

(4) Portfolio turnover ratio (“PTR”) is calculated based on the average of thetotal acquisitions and total disposals of investment securities of the Funddivided by the average fund size calculated on a daily basis. The PTRdecreased by 0.90 times (71.4%) as compared to 1.26 times for thefinancial year ended 30 September 2019 mainly due to decrease ininvesting activities.


AmAl-Amin(a) %

MBB(b) %

One year 3.32 2.22

Three years 3.31 2.69

Five years 3.24 3.10

Ten years 3.01 2.96

Annual Total Return


AmAl-Amin(a) %

MBB(b) %

2019 3.61 2.40

2018 3.28 3.02

2017 3.03 3.34

2016 3.21 3.92

2015 3.11 3.25

(a) Source: Novagni Analytics and Advisory Sdn Bhd.(b) Malayan Banking Berhad Al-Mudharabah (GIA) 1-Month Rate (“MBB”).

(obtainable from www.aminvest.com / www.maybank2u.com.my)

The Fund performance is calculated based on daily returns of the Fund. Average total return of the Fund and its benchmark for a period is computed based on the accumulated returns for that period annualised over one year.


Fund Performance

For the financial period under review, the Fund registered a return of 1.54% which was entirely income distribution in nature.

Thus, the Fund’s return of 1.54% has outperformed the benchmark’s return of 1.06% by 0.48%.

As compared with the financial year ended 30 September 2019, the net asset value (“NAV”) per unit of the Fund increased by 0.44% from RM1.0127 to RM1.0172, while units in circulations decreased 30.43% from 283,057,490 units to 196,926,649 units.

The line chart below shows the comparison between the annual performances of AmAl-Amin and its benchmark, MBB, for the financial years ended 30 September.

(Forward)

74



For the financial period under review, the Fund invested primarily in short to medium term debt securities with minimum short-term local credit rating of P2 by RAM or A3 by RAM or its equivalent as rated by a local or global rating agency that conforms to the principles of Shariah. In buying and selling securities for AmAl-Amin the Investment Manager used a relative value approach.

This approach involves an analysis of general economic and market conditions. It also involves the use of models that analyse and compare expected returns and assumed risk. Under this approach, the Investment Manager focused on securities that would deliver favourable return given an acceptable level of risk. AmAl-Amin’s weighted average maturity of investments would not exceed 1 year.

Portfolio Structure


As at 31.3.2020

%

As at 30.9.2019

% Changes

%

Corporate sukuk 54.07 42.69 11.38

Commercial papers 5.00 5.25 -0.25

Money market deposit 20.26 38.01 -17.75

Cash, other assets & liabilities 20.67 14.05 6.62

Total 100.00 100.00

(Forward)

2.0

3.0

4.0

5.0

To

tal R

etu

rn (

%)

2015 2016 2017 2018 2019

Fund 3.11 3.21 3.03 3.28 3.61

Benchmark 3.25 3.92 3.34 3.02 2.40

Financial Year Ended (30 September)

75

For the financial year under review, the Fund’s exposure to Corporate Sukuk increased from 42.69% to 54.07%. The Fund’s investment in Islamic commercial paper accounts for 5.00% whilst its other liquid assets have decreased from, 52.06% to 40.93%.



The Fund distributes the entire income on a monthly basis. For the financial period under review, the Fund has distributed income totaling RM3,272,582 and no unit split was declared.

State of Affairs



Soft commissions received from brokers/dealers are retained by the Manager only if the goods and services provided are in the form of research services that assist in the decision-making process relating to the Fund’s investments. During the financial period under review, the Manager had received on behalf of the Fund, soft commissions as allowed under regulatory requirements to carry out investment management functions for the Fund. These soft commissions received by the Manager are deemed to be beneficial to the unitholders of the Fund.

Market Review

Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 3.00% in the last Monetary Policy Committee (MPC) meeting of the 2019. It highlighted the global growth risks while striking a neutral tone on domestic growth prospect, forecasting Gross Domestic Product (GDP) growth of 4.3%-4.8% for 2019 and 2020. The policy decision was followed by a surprise Statutory Reserve Requirement (SRR) cut of 50bps, releasing approximately MYR7b of liquidity into the banking system. Separately, Malaysia 3Q2019 GDP

growth slowed to 4.4% YoY (2Q2019: 4.9%), in line with consensus estimate. As for the local bond markets in 4Q2019, following the profit taking driven sell-off in September and October, the Malaysian Government Securities (MGS) market rebounded in November as investors picked up value especially in the long end of the curve. The unchanged OPR, coupled with the surprise SRR reduction, strengthened the market’s conviction of a 1Q2020 cut. Indeed, on 22 January, BNM cut OPR by 25bps to 2.75%, sending yields down further by 8-18bps. In February, the local bond market continued to rally in tandem with the United States (US) treasuries and in anticipation of another 25bps OPR cut in 2020. The MGS curve parallel shifted downward by 18-35bps in February despite the political turmoil in the country. While foreign flows were affected, the government bonds were seen strongly supported by local investors despite the spike in yields on the day of Tun Mahathir’s resignation as the Prime Minister of Malaysia. Separately, Malaysia’s 4Q2019 real GDP printed a disappointing 3.6%YoY (consensus expectation: 4.5% YoY) dragged down mainly by the sharp contraction in net exports by -9.8% YoY. On sector wise, the Agriculture and Mining suffered contraction in 4Q2029, in line with BNM’s statement on commodity sector supply disruption.

76

Stepping into an anomalous and turbulent month of March, Malaysia experienced a mid-term change in ruling coalition resulting in a new Prime Minister and Cabinet. Political uncertainty took a backseat as the country then swiftly went into lockdown mode as the number of Covid-19 cases spiked. This necessitate the new Government to announce MYR250b fiscal stimulus package in addition to the MYR20b stimulus announced by previous Government on 27 February. The global flight to liquidity snapped the bullish trend in Malaysian Ringgit (MYR) bond markets and panic selling sent Malaysia Government Securities (MGS)/Government Investment Issue (GII) yields soaring 70-100bps across the curve.

The MGS/GII market was hit by the combination of foreign selling, bank traders cutting losses, and redemption-driven selling by asset managers. Signs of stabilization returned to the market following BNM’s emergency SRR cut of 100bps on 19 March 2020, and the MGS/GII curves ended the month 20-80bps higher. Despite the massive selloff, the MGS/GII auctions (15 year MGS, 20 year GII, 5 year MGS, and 7 year GII) garnered decent bid-to-cover ratios of 2.1-2.9x, underpinned by demand from real money investors attracted to the higher yields.

Meanwhile, on 26 March 2020, S&P affirmed Malaysia’ A-/Stable sovereign rating with the expectation that Malaysia would maintain its fiscal consolidation trajectory in the medium term despite higher fiscal deficit in 2020 (from fiscal stimulus and lower oil-related revenue). Malaysian Ringgit (MYR) had weakened from 4.22 to 4.32 against the United States Dollar (USD) (after reaching the high of 4.45 at one point), amid plunging oil prices following the fallout of Organization of the Petroleum Exporting Countries (OPEC+) meeting in early March.

Market Outlook

Bond market sentiments should remain positive due to BNM policy remaining dovish as growth risks are tilted to the downside in 2020 and into 1H2021 which would likely require further OPR cuts in 2020. The quantum of further cuts in OPR rate would depend on

a) factors surrounding the COVID-19 pandemic as well as; andb) any restart of US - China and/or United States (US)-European Union

(EU) trade-tensions.

Market liquidity remains ample and demand for fixed income instruments is expected to remain strong despite any concerns on MGS/GII supply.





17 May 2020

AmAl-Amin


AS AT 31 MARCH 2020

31.3.2020 30.9.2019


Note RM RM

ASSETS


Other receivables 5 2,513,218 2,985,560

Deposits with financial institutions 6 40,454,281 108,478,647

Cash at banks 39,697,255 40,921,627 TOTAL ASSETS 200,962,073 287,500,670

LIABILITIES

Amount due to Manager 7 114,538 120,131


Distributions payable and to be reinvested 503,034 701,805



EQUITY


Accumulated losses 10(b) (202,282) (348,371)

Fair value reserve 10(c) 893,236 1,658,027

Capital reserve 11 2,700,738 2,279,296

TOTAL EQUITY 10 200,318,341 286,646,442



NET ASSET VALUE (“NAV”) PER UNIT

− EX DISTRIBUTION 101.72 sen 101.27 sen


77

AmAl-Amin



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

Note RM RM

SHARIAH-COMPLIANT INVESTMENT INCOME

Profit income 4,021,031 3,773,751

Net gain/(loss) from Shariah-compliant investments: 9

− Financial assets at fair value through other

comprehensive income (“FVOCI”) 546,265 (73,572)

4,567,296 3,700,179

EXPENDITURE

Manager’s fee 7 (641,799) (346,005)

Trustee’s fee 8 (74,877) (64,588)


Tax agent’s fee (2,050) (2,044)

Custodian’s fee (185) (161)


(727,183) (419,001)

Net income before tax 3,840,113 3,281,178


Net income after tax 3,840,113 3,281,178

Other comprehensive (loss)/income:

Item that may be reclassified to profit or loss

– Net change in fair value during the period (218,526) 193,858

– Change in allowance for expected credit losses (143,706) 73,572

– Reclassification on sale of Shariah-compliant

investments (402,559) -

(764,791) 267,430

Total comprehensive income for the financial period 3,075,322 3,548,608

Total comprehensive income comprises the following:

Realised income 3,840,113 3,281,178

Unrealised (loss)/gain (764,791) 267,430

3,075,322 3,548,608

Distribution for the financial period

Net distributions 15 3,272,582 3,304,175


78

AmAl-Amin



Retained

earnings/

Unitholders’ (Accumulated AFS Fair value Capital Total

capital losses) reserve reserve reserve equity

Note RM RM RM RM RM RM

At 1 October 2018, as previously stated 121,072,724 12,070 93,162 - 2,179,550 123,357,506

Impact of adopting MFRS 9 - (134,907) (93,162) 228,069 - -

At 1 October 2018, as restated 121,072,724 (122,837) - 228,069 2,179,550 123,357,506

Total comprehensive income for the

financial period - 3,281,178 - 267,430 - 3,548,608

Transfer to capital reserve - (45,565) - - 45,565 -

Creation of units 172,763,989 - - - - 172,763,989

Reinvestment of distribution 2,990,696 - - - - 2,990,696

Cancellation of units (100,425,578) - - - - (100,425,578)

Distributions 15 - (3,304,175) - - - (3,304,175)Balance at 31 March 2019 196,401,831 (191,399) - 495,499 2,225,115 198,931,046

At 1 October 2019 283,057,490 (348,371) - 1,658,027 2,279,296 286,646,442

Total comprehensive income for the

financial period - 3,840,113 - (764,791) - 3,075,322

Transfer to capital reserve - (421,442) - - 421,442 -

Creation of units 10(a) 97,894,500 - - - - 97,894,500

Reinvestments of distributions 10(a),15 3,447,283 - - - - 3,447,283

Cancellation of units 10(a) (187,472,624) - - - - (187,472,624)

Distributions 15 - (3,272,582) - - - (3,272,582)Balance at 31 March 2020 196,926,649 (202,282) - 893,236 2,700,738 200,318,341


79

AmAl-Amin



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM



Proceeds from maturity/sale of Shariah-compliant

investments 118,444,700 93,200,000

Profit received 6,319,939 3,037,200



Custodian’s fee paid (185) (161)



Net cash generated from/(used in) operating and

investing activities 30,345,984 (49,085,301)




Distribution paid (24,070) (25,152)

Net cash (used in)/generated from financing activities (89,602,194) 72,313,259

NET (DECREASE)/INCREASE IN CASH AND

CASH EQUIVALENTS (59,256,210) 23,227,958




END OF FINANCIAL PERIOD 39,697,255 60,471,306

Cash and cash equivalents comprise:

Short-term deposits with financial institutions - 37,893,370

Cash at banks 39,697,255 22,577,936

39,697,255 60,471,306


80

AmAl-Amin






AmAl-Amin (“the Fund”) was established pursuant to a Deed dated 30 October 2001 as



The Fund was set up with the objective of providing investors with a regular stream of “halal

income”, by investing in Islamic money market and other Islamic debt securities. As provided

in the Deed, the “accrual period” or the financial year shall end on 30 September and the

units in the Fund were first offered for sale on 26 November 2001.




as otherwise stated in the accounting policies and comply with Malaysian Financial

Reporting Standards 134: Interim Financial Reporting (“MFRS 134”) as issued by the

Malaysian Accounting Standards Board (“MASB”) and Securities Commission Malaysia’s

Guidelines on Unit Trust Funds in Malaysia.

The adoption of MFRS which have been effective during the financial period did not have

any material financial impact to the financial statements.





81

AmAl-Amin



Effective for

financial periods












(i) Profit income

(ii) Gain or loss on disposal of investments

Income is recognised to the extent that it is probable that the economic benefits will

flow to the Fund and the income can be reliably measured. Income is measured at the

fair value of consideration received or receivable.








losses.







carrying amount of the Shariah-compliant investments. The net realised gain or

loss is recognised in profit or loss.

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AmAl-Amin


3.2 Income tax



3.5 Distribution


3.7 Capital reserve



(“MFRS 132”) .

Capital reserve of the Fund represents non-distributable amount as determined by the

Manager that may be applied to make good any losses incurred by the Fund and to

meet unitholders’ cancellation of units, in order to maintain the Fund’s prices at

RM1.00 per unit, as approved by the Securities Commission. Capital reserve is a

portion of the retained earnings and is based on 0.05% of the Fund's profit income

from fixed deposits computed on a daily basis.





items recognised outside profit or loss, either in other comprehensive income or

directly in equity.










accounted for as a deduction from realised income. A proposed distribution is


reinvested or paid in cash to the unitholders on the income payment date.

Reinvestment of units is based on the NAV per unit on the income payment date,

which is also the time of creation.

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AmAl-Amin






3.9 Financial assets - classification and subsequent measurement

Business model







assets not recorded at fair value through profit or loss (“FVTPL”), transaction costs

that are attributable to the acquisition of the financial asset. All financial liabilities

are recognised initially at fair value and, in the case of financial liabilities not

recorded at FVTPL, net of directly attributable transaction costs.









The classification and subsequent measurement of debt instruments held by the Fund

are determined based on their business model and cash flow characteristics.



contractual cash flows from the assets, or is to collect both the contractual cash flows

and cash flows arising from the sale of assets. If neither of these is applicable (e.g. the

financial assets are held for trading purposes), then the financial assets are classified

as part of “other” business model. Factors considered by the Fund in determining the

business model for a portfolio of assets include past experience on how the cash flows

for these assets were collected, how the asset’s performance is evaluated and

reported to key management personnel, and how risks are assessed and managed.

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AmAl-Amin


3.9 Financial assets - classification and subsequent measurement (cont’d.)








financial assets’ contractual cash flows represent solely payment of principal and profit

(“SPPP”). In making this assessment, the Fund considers whether the contractual cash

flows are consistent with a basic financing arrangement, i.e. profit includes only

consideration for time value of money, credit risk, other basic financing risks and a

profit margin that is consistent with a basic financing arrangement. Financial assets

with embedded derivatives are considered in their entirety when determining whether

their cash flows are SPPP.
















receivables.

A financial asset is measured at FVOCI if its business model is both to hold the

asset to collect contractual cash flows and to sell the financial asset. In addition,

the contractual terms of the financial assets give rise on specified dates to cash

flows that are solely payments of principal and profit on the outstanding principal.

These investments are initially recorded at fair value and transaction costs are

expensed in the profit or loss. Subsequent to initial recognition, these investments

are remeasured at fair value. All fair value adjustments are initially recognised

through OCI. Debt instruments at FVOCI are subject to impairment assessment.

85

AmAl-Amin





3.11 Financial liabilities - classification and subsequent measurement





-

-





are recorded in “Net gain or loss on financial assets at FVTPL”. Profit earned

elements of such instrument is recorded separately in “Profit income”.








cost, where the substance of the contractual arrangement results in the Fund having

an obligation either to deliver cash or another financial asset to the holder. After initial
















or

86

AmAl-Amin



-

- the time value of money; and

-



For Shariah-compliant investments in fixed income securities, nominal value is the face

value of the securities and fair value is determined based on the indicative prices from

Bond Pricing Agency Malaysia Sdn Bhd plus accrued profit, which includes the

accretion of discount and amortisation of premium. Adjusted cost of investments

relates to the purchase cost plus accrued profit, adjusted for amortisation of premium

and accretion of discount, if any, calculated over the period from the date of acquisition

to the date of maturity of the respective securities as approved by the Manager and the

Trustee.


assets at amortised cost. The Fund recognises a loss allowance for such losses at

each reporting date. The measurement of ECL reflects:






The ECL in respect of financial assets at FVOCI is recognised by way if an adjustment

from other comprehensive income to profit or loss. If, in a subsequent year, the amount

of the estimated impairment loss increases or decreases because of an event

occurring after the impairment was recognised, the previously recognised impairment

loss is increased or reduced accordingly. The ECL in respect of financial assets at

amortised cost, if any, is recognised in profit or loss.










result in outcomes that could require a material adjustment to the carrying amount of

the asset or liability in the future.

87

AmAl-Amin


3.15 Significant accounting estimates and judgments (cont’d.)

-

-

-

-

-

-

4. SHARIAH-COMPLIANT INVESTMENTS

31.3.2020 30.9.2019

RM RM


At nominal value:

Commercial papers 10,000,000 15,000,000

Corporate sukuks 104,550,000 113,850,000

114,550,000 128,850,000

At fair value:

Commercial papers 9,988,415 14,974,834

Corporate sukuks 108,308,904 120,140,002

118,297,319 135,114,836

In the process of applying the accounting policies, the Manager has made the following

judgments and assumptions concerning the future and other key sources of estimation

uncertainty at the reporting date, that have a significant risk of causing a material

adjustment to the carrying amounts of assets and liabilities within the next financial

period.

Selection of forward-looking macroeconomic scenarios and their probability

weightings, to derive the economic inputs into the ECL models.

The segmentation of financial assets when their ECL is assessed on a collective

basis;

The measurement of impairment losses under MFRS 9 of financial assets requires

judgment, in particular, the estimation of the amount and timing of future cash flows

and collateral values when determining impairment losses and the assessment of a

significant increase in credit risk. These estimates are driven by a number of factors,

changes in which can result in different levels of allowances.

The ECL calculations are outputs of complex models with a number of underlying

assumptions regarding the choice of variable inputs and their interdependencies.

Elements of the ECL models that involve the use of judgements and estimates include:

Development of ECL models, including the various formulas and the choice of

inputs;

The internal credit grading model, which assigns probability of default (“PD”) to the

individual grades;

The internal criteria for assessing if there has been a significant increase in credit

risk and so allowances for financial assets should be measured on a lifetime

expected credit loss (“LTECL”) basis and the qualitative assessment;

Determination of associations between macroeconomic scenarios and, economic

inputs, and the effect on PDs, exposure at default (“EAD”) and loss given default

(“LGD”); and

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AmAl-Amin


An analysis of changes in the fair value and the corresponding ECLs is as follows;

Stage 1 Stage 2 Stage 3 Total

RM RM RM RM

Fair value as at

1 October 2019 135,114,836 - - 135,114,836

New assets originated or

purchased 68,679,748 - - 68,679,748

Assets derecognised or

matured (excluding

write-offs) (83,042,140) - - (83,042,140)

Change in fair value (621,086) - - (621,086)

Amortisation of premium and

accretion at discount (1,834,039) - - (1,834,039)

At 31 March 2020 118,297,319 - - 118,297,319

ECL as at 1 October 2019 376,226 - - 376,226

New assets originated or

purchased 18,660 - - 18,660

Assets derecognised or

matured (excluding

write-offs) (162,366) - - (162,366)

At 31 March 2020 232,520 - - 232,520


Fair value as Maturity Nominal Fair Adjusted a percentage date Issuer value value cost of NAV

RM RM RM %

31.3.2020

Commercial papers

13.04.2020 Sunway

Treasury

Sukuk

Sdn Bhd 10,000,000 9,988,415 9,988,415 4.99

Total commercial papers 10,000,000 9,988,415 9,988,415 4.99

Corporate sukuk

22.04.2020 Bank Islam

Malaysia

Berhad 5,000,000 5,007,050 5,006,115 2.50


Berhad 4,000,000 4,015,960 4,011,555 2.00

89

AmAl-Amin



RM RM RM %

31.3.2020 (cont’d.)


19.05.2020 Special

Power

Vehicle

Berhad 1,950,000 1,992,959 1,992,261 0.99

09.10.2020 Edra Solar

Sdn Bhd 5,000,000 5,011,200 5,000,000 2.50

12.11.2020 Jimah

Energy

Ventures

Sdn Bhd 5,000,000 5,186,450 5,152,986 2.59

19.11.2020 Special

Power

Vehicle

Berhad 10,100,000 11,261,298 11,219,811 5.62


Malaysia

Berhad 10,000,000 10,152,100 10,119,570 5.07

24.12.2020 BGSM

Management

Sdn Bhd 5,000,000 5,066,500 5,026,847 2.53

19.05.2021 Special Power

Vehicle

Berhad 1,000,000 1,182,309 1,172,474 0.59

30.06.2021 UEM Sunrise

Berhad 5,000,000 5,098,250 5,019,155 2.55


Power

Sdn Bhd 10,000,000 10,176,400 10,063,376 5.08

28.09.2021 BGSM

Management

Sdn Bhd 2,500,000 2,535,300 2,500,387 1.27


Berhad 7,000,000 7,157,290 7,017,344 3.57


Vehicle

Berhad 2,800,000 3,597,692 3,558,720 1.80

90

AmAl-Amin



RM RM RM %

31.3.2020 (cont’d.)


17.01.2022 Perbadanan

Kemajuan

Negeri

Selangor 10,000,000 10,208,600 10,006,723 5.10


Kemajuan

Negeri

Selangor 10,000,000 10,142,700 10,193,347 5.06

13.01.2023 Kedah

Cement

Sdn Bhd 200,000 201,646 200,081 0.10

16.03.2023 Gamuda

Berhad 10,000,000 10,315,200 10,387,436 5.15


Total Shariah-compliant

investments 114,550,000 118,297,319 117,636,603 59.06

Excess of fair value over adjusted cost 660,716

30.9.2019

Commercial papers

17.10.2019 Sunway

Treasury

Sukuk

Sdn Bhd 10,000,000 9,983,222 9,983,222 3.48

18.10.2019 Aeon Credit

Service (M)

Berhad 5,000,000 4,991,612 4,991,612 1.74

Total commercial papers 15,000,000 14,974,834 14,974,834 5.22

Corporate sukuk

04.10.2019 UMW

Holdings

Berhad 3,000,000 3,000,300 3,000,034 1.05

91

AmAl-Amin



RM RM RM %

30.9.2019 (cont’d.)


01.11.2019 Gas

Malaysia

Berhad 4,500,000 4,502,835 4,500,719 1.57


Berhad 5,000,000 5,072,000 5,055,980 1.77


Malaysia

Berhad 5,000,000 5,064,250 5,058,424 1.77


Berhad 4,000,000 4,081,880 4,060,345 1.42

19.05.2020 Special

Power

Vehicle

Berhad 1,950,000 2,151,708 2,149,015 0.75


Power

Sdn Bhd 5,000,000 5,052,100 5,039,428 1.76

12.11.2020 Jimah

Energy

Ventures

Sdn Bhd 5,000,000 5,318,150 5,274,776 1.86

19.11.2020 Special

Power

Vehicle

Berhad 13,600,000 16,345,840 16,255,906 5.70


Malaysia

Berhad 10,000,000 10,233,200 10,202,601 3.57

24.12.2020 MBSB Bank

Berhad

(Fka Asian

Finance

Bank

Berhad) 5,000,000 5,064,600 5,032,572 1.77

24.12.2020 BGSM

Management

Sdn Bhd 5,000,000 5,098,900 5,044,879 1.78

92

AmAl-Amin



RM RM RM %

30.9.2019 (cont’d.)



Vehicle

Berhad 1,000,000 1,258,000 1,245,756 0.44


Berhad 8,500,000 8,791,295 8,512,817 3.07


Berhad 5,000,000 5,119,550 5,026,660 1.79


Power

Sdn Bhd 10,000,000 10,205,900 10,085,629 3.56

28.09.2021 BGSM

Management

Sdn Bhd 2,500,000 2,542,000 2,500,502 0.89


Berhad 7,000,000 7,188,090 7,022,658 2.51


Vehicle

Berhad 2,800,000 3,828,804 3,780,831 1.34


Kemajuan

Negeri

Selangor 10,000,000 10,220,600 10,008,668 3.57


Total Shariah-compliant

investments 128,850,000 135,114,836 133,833,034 47.16

Excess of fair value over adjusted cost 1,281,802

5. OTHER RECEIVABLES

Included in other receivables are the profit receivable from the Shariah-compliant

investments in fixed income securities.

93

AmAl-Amin

6. DEPOSITS WITH FINANCIAL INSTITUTIONS

31.3.2020 30.9.2019

RM RM

At nominal value:

Fixed deposits with licensed Islamic banks 40,000,000 50,000,000

Short-term deposits with licensed Islamic banks - 58,000,000

40,000,000 108,000,000

At carrying value:

Fixed deposits with licensed Islamic banks 40,454,281 50,446,809

Short-term deposits with licensed Islamic banks - 58,031,838

40,454,281 108,478,647

Details of deposits with financial institutions are as follows:

Carrying

value as a Maturity Nominal Carrying Purchased percentage date Bank value value cost of NAV

RM RM RM %

31.3.2020

Fixed deposits with licensed Islamic banks

10.07.2020 RHB Islamic

Bank

Berhad 10,000,000 10,265,000 10,000,000 5.13

Maybank Islamic

Berhad 5,000,000 5,018,411 5,000,000 2.52

AmBank Islamic

Berhad* 10,000,000 10,031,562 10,000,000 5.00

RHB Islamic

Bank

Berhad 5,000,000 5,109,500 5,000,000 2.55

AmBank Islamic

Berhad* 10,000,000 10,029,808 10,000,000 5.00

Total fixed deposits 40,000,000 40,454,281 40,000,000 20.20

30.9.2019

Fixed deposits with licensed Islamic banks

Maybank Islamic

Berhad 10,000,000 10,072,782 10,000,000 3.52

AmBank Islamic

Berhad* 5,000,000 5,018,630 5,000,000 1.75

19.08.2020

24.08.2020

25.08.2020

27.08.2020

16.10.2019

22.11.2019

94

AmAl-Amin

6. DEPOSITS WITH FINANCIAL INSTITUTIONS (CONT’D.)

Carrying

value as a

Maturity Nominal Carrying Purchased percentage

date Bank value value cost of NAV

RM RM RM %

30.9.2019 (cont’d.)

Fixed deposits with licensed Islamic banks (cont’d.)

AmBank Islamic

Berhad* 10,000,000 10,026,849 10,000,000 3.50


Bank

Berhad 10,000,000 10,228,548 10,000,000 3.56


Bank

Berhad 10,000,000 10,082,000 10,000,000 3.52

RHB Islamic

Bank

Berhad 5,000,000 5,018,000 5,000,000 1.75

Total fixed deposits 50,000,000 50,446,809 50,000,000 17.60

Short-term deposits with licensed Islamic banks

CIMB Islamic

Bank

Berhad 38,000,000 38,003,071 38,000,000 13.26

AmBank Islamic

Berhad* 10,000,000 10,025,151 10,000,000 3.50

RHB Islamic

Bank

Berhad 10,000,000 10,003,616 10,000,000 3.48

Total short-term deposits 58,000,000 58,031,838 58,000,000 20.24

108,000,000 108,478,647 108,000,000 37.84

25.08.2020

01.10.2019

02.03.2020

04.12.2019

27.12.2019

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AmAl-Amin

7. AMOUNT DUE TO MANAGER

31.3.2020 30.9.2019

Note RM RM

Due to ManagerManager’s fee payable (i) 114,538 120,131

(i)


9. NET GAIN/(LOSS) FROM SHARIAH-COMPLIANT INVESTMENTS

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Net gain/(loss) on financial assets at FVOCI comprised:

– Allowance for expected credit losses 143,706 (73,572)

– Net realised gain on sale of Shariah-compliant

investments 402,559 -

546,265 (73,572)

10. TOTAL EQUITY


31.3.2020 30.9.2019

Note RM RM


Accumulated losses

− Realised losses (b) (202,282) (348,371)

Fair value reserve (c) 893,236 1,658,027

Capital reserve 11 2,700,738 2,279,296

200,318,341 286,646,442









96

AmAl-Amin



Number of Number of

units RM units RM

At beginning of the

financial period/

year 283,057,490 283,057,490 121,072,724 121,072,724

Creation during the

financial period/

year 97,894,500 97,894,500 350,103,648 350,103,648

Reinvestment of

distributions 3,447,283 3,447,283 6,677,871 6,677,871

Cancellation during

the financial

period/year (187,472,624) (187,472,624) (194,796,753) (194,796,753)

At end of the



31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year as

previously stated (348,371) 12,070

Effect of adopting MFRS 9 - (134,907)

At beginning of the financial period/year as restated (348,371) (122,837)

Transfer to capital reserve (Note 11) (421,442) (99,746)

Net realised income for the financial period/year 3,840,113 6,943,910

Distributions out of realised reserve (Note 15) (3,272,582) (7,069,698)At end of the financial period/year (202,282) (348,371)

(c) Fair value reserve

31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year as

previously stated 1,658,027 93,162

Effect of adopting MFRS 9 - 134,907

At beginning of the financial period/year as restated 1,658,027 228,069

Fair value revaluation (loss)/gain (218,526) 1,188,639

Reclassification on sale of Shariah-compliant

investments (402,559) -

Allowance for expected credit losses (143,706) 241,319

At end of the financial period/year 893,236 1,658,027

30.9.201931.3.2020

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AmAl-Amin

11. CAPITAL RESERVE

31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year 2,279,296 2,179,550

Transfer from realised income [Note 10(b)] 421,442 99,746

At end of the financial period/year 2,700,738 2,279,296

12. NAV ATTRIBUTABLE TO UNITHOLDERS


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






as disclosed in its financial statements ultimate holding company of the Manager

Number of Number of

units RM units RM

Parties related to the

Manager* 6,959 6,959 6,853 6,853

*

30.9.201931.3.2020

In line with the requirement of MFRS 9 unquoted Shariah-compliant investments at FVOCI

have been valued at the indicative prices at the close of business. However, the valuation,

creation and cancellation of units will be based on RM1.00 per unit as stated in the trust

deed.

The parties related to the Manager are the legal and beneficial owners of the units. The

Manager did not hold any units in the Fund as at 31 March 2020 and 30 September

2019.

98

AmAl-Amin


1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Net income before tax 3,840,113 3,281,178

Taxation at Malaysian statutory rate of 24% (2019: 24%) 921,627 787,483

Tax effects of:

Income not subject to tax (1,245,212) (905,700)

Loss not deductible for tax purposes 149,061 17,657




future financial periods 15,500 8,411

Tax expense for the financial period - -

15. DISTRIBUTIONS

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

On redemption of units 24,070 25,152

Income entitlement distributed on:

31 October 2019/2018 683,309 387,268

30 November 2019/2018 511,396 382,513

31 December 2019/2018 530,945 570,886

31 January 2020/2019 523,103 675,546

29 February 2020/28 February 2019 496,725 603,578

31 March 2020/2019 503,034 659,232 3,272,582 3,304,175

Income tax payable is calculated on Shariah-compliant investment income less deduction for

permitted expenses as provided for under Section 63B of the Income Tax Act, 1967.




exempted from tax.

A reconciliation of income tax expense applicable to net income before tax at the statutory


follows:

99

AmAl-Amin

15. DISTRIBUTIONS (CONT’D.)

Distributions to unitholders are from the following sources:

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Profit income 3,999,765 3,723,176

Less: Expenses (727,183) (419,001)

Total amount of distributions 3,272,582 3,304,175

Distributions made out of:

Realised income 3,272,582 3,304,175

Comprising:

Distributions reinvested 2,745,478 2,619,791

Distributions payables and to be reinvested 503,034 659,232

Cash distributions 24,070 25,152

3,272,582 3,304,175

16.

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM



Fund’s other expenses 0.01 -* Total MER 0.68 0.45

* represents less than 0.01%


MANAGEMENT EXPENSE RATIO (“MER”)






is 0.36 times (2019: 0.62 times).

The gross and net distributions of the Fund are of the similar amount as the Fund is not

subject to tax. The above distributions have no implication on unit prices as the NAV per unit

of the Fund was maintained at RM1.00 throughout the financial period.

100

AmAl-Amin


19. TRANSACTIONS WITH FINANCIAL INSTITUTIONS

Financial institutions Transaction value

RM %

Kenanga Investment Bank Berhad 39,884,329 47.84

Hong Leong Bank Berhad 15,762,556 18.91

RHB Investment Bank Berhad 15,363,741 18.43

Standard Chartered Bank Malaysia Berhad 9,163,667 10.99

Malayan Banking Berhad 2,995,319 3.59

CIMB Bank Berhad 200,100 0.24

Total 83,369,712 100.00




compliance to Shariah-compliant investments restrictions as stipulated by the Capital

Markets and Services Act 2007, Securities Commission’s Guidelines on Unit Trust Funds

and the Deed as the backbone of risk management of the Fund.


single issuer risk, regulatory risk, management risk, non-compliance/Shariah non-

compliance risk and unstable NAV risk.

Details of transaction with financial institutions for the financial period ended 31 March 2020

are as follows:

There was no transaction with financial institutions related to the Manager, during the

financial period.

The above transactions were in respect of Shariah-compliant fixed income instruments.

Transactions in these Shariah-compliant investments do not involve any commission or

brokerage.

In accordance with the objective of the Fund, substantially all of the Fund’s Shariah-

compliant investments are made in the form of Shariah-compliant fixed income securities in

Malaysia. The Manager is of the opinion that the risk and rewards from these Shariah-

compliant investments are not individually or segmentally distinct and hence the Fund does

not have a separately identifiable business or geographical segments.

101

AmAl-Amin


(a) Market risk

(i) Rate of return risk

(b) Credit risk

(c) Liquidity risk





Rate of return risk will affect the value of the Fund’s Shariah-compliant investments,

given the rate of return movements, which are influenced by regional and local


Domestic profit rates on deposits and placements with licensed financial institutions

are determined based on prevailing market rates.


loss to the Fund by failing to discharge an obligation. The Fund can invest up to 100% of

the NAV in Shariah-compliant fixed income instruments. As such the Fund would be

exposed to the risk of sukuk issuers and financial institutions defaulting on its repayment

obligations which in turn would affect the NAV of the Fund.



the securities of any single issuer is diversified and managed by issuer is managed

based on internal/external ratings.









to meet anticipated payments and cancellations of units by members. Liquid assets

comprise of deposits with licensed financial institutions and other instruments, which are

capable of being converted into cash within 5 to 7 days. The Fund’s policy is to always

maintain a prudent level of liquid assets so as to reduce liquidity risk.

Although Islamic Fund does not deal with interest-bearing accounts and products,

the fluctuation of profit rate may affect the performance of an Islamic Fund.

102

AmAl-Amin


(e) Regulatory risk

(f) Management risk


(h) Unstable NAV risk

Unstable NAV risk means that the actual NAV per unit of the Fund may fluctuate with

the market and may not be maintained at or above its initial price (RM1.00) at all times.

This is the risk especially applicable to money market and short-to medium-term fixed

income funds that are priced at RM1.00.

Any changes in national policies and regulations may have effects on the capital market

and the NAV of the Fund.





the case of an Islamic Fund, this includes the risk of the Fund not conforming to Shariah

Investment Guidelines. Non-compliance risk may adversely affect the Shariah-compliant

investments of the Fund when the Fund is forced to rectify the non-compliance.

103

AmAl-Amin



17 May 2020

I, GOH WEE PENG, for and on behalf of the Manager, AmFunds Management Berhad, for

AmAl-Amin do hereby state that in the opinion of the Manager, the accompanying condensed

statement of financial position, condensed statement of comprehensive income, condensed

statement of changes in equity, condensed statement of cash flows and the accompanying notes

are drawn up in accordance with Malaysian Financial Reporting Standards so as to give a true

and fair view of the financial position of the Fund as at 31 March 2020 and the comprehensive

income, the changes in equity and cash flows of the Fund for the half year then ended.

GOH WEE PENG




104

Trustee’s Report



AMAL-AMIN


(a)

(b)

(c)

Yours faithfully





13 May 2020

We, AMANAHRAYA TRUSTEES BERHAD, have acted as Trustee of AMAL-AMIN for the six

months financial period ended 31 March 2020. In our opinion, AMFUNDS MANAGEMENT

BERHAD, the Manager, has operated and managed AMAL-AMIN in accordance with the





requirement;


regulatory requirement; and

The distribution of income made by AMAL-AMIN as declared by the Manager is

appropriate and reflects the investment objective of AMAL-AMIN.

105

106

MANAGER’S REPORT

Dear Unitholders,

We are pleased to present you the Manager’s report and the unaudited accounts of AmIslamic Balanced (“Fund”) for the financial period from 1 October 2019 to 31 March 2020.


Name AmIslamic Balanced (“Fund”)

Category/ Type

Balanced (Islamic) / Growth

Objective AmIslamic Balanced aims to grow the value of investments in the longer term with lower volatility through asset diversification, which conforms to principles of Shariah.

Note: Any material change to the investment objective of the Fund would require Unit Holders’ approval.

Duration The Fund was established on 10 September 2004 and shall exist for as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue. In some circumstances, the unitholders can resolve at a meeting to terminate AmIslamic Balanced.


50% FTSE Bursa Malaysia Emas Shariah Index (“FBM SI”)

50% Quantshop Medium GII Index (“MGII”)(obtainable from www.aminvest.com)

Note: The composite benchmark index is a reflection of the Fund’s average asset allocation over the medium to long-term. For the equities portion of the Fund the performance benchmark will be FTSE Bursa Malaysia EMAS Shariah Index and for the fixed income investment portion, it will be the Quantshop Medium GII Index. The benchmark is for the performance comparison only. The risk profile of the performance benchmark is not the same as the risk profile of the Fund.

Source: FTSE International Limited (“FTSE”) © FTSE 2020. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. “BURSA MALAYSIA" is a trade mark of Bursa Malaysia Berhad ("BURSA MALAYSIA”). All intellectual property rights in the index values and constituent list vests in FTSE and BURSA MALAYSIA. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.


Income distribution (if any) is incidental.

107




No of units held


No of units held


5,000 and below 278,832 92 131,765 41

5,001-10,000 630,580 89 419,378 57

10,001-50,000 3,983,234 195 3,029,124 139

50,001-500,000 3,535,606 36 2,930,650 31

500,001 and above 4,360,737 2 4,619,112 2




As at 31.3.2020

%

FY 2019

%

FY 2018

%

FY 2017

%

Construction - - 2.36 6.38 Consumer discretionary - 2.82 - -

Consumer products - - 5.92 - Consumer staples 1.64 2.06 - -

Energy 4.76 10.51 - - Financials - 2.38 - -

Health care 9.66 8.63 - - Industrials 12.87 7.31 8.68 10.13

Information technology 4.01 1.04 5.31 11.47 Infrastructure - - 1.64 3.45

Materials 2.12 1.66 - - Plantation - - 9.18 3.41

Properties - - - 1.58

Real estate 2.91 3.07 - -


Trading/Services - - 23.16 23.12

Utilities 4.94 4.03 - -

Corporate sukuk 23.32 25.71 34.92 26.48


Money market deposit 16.11 16.99 - -


Total 100.00 100.00 100.00 100.00


Performance Details


(Forward)

108

Half year ended

31.3.2020 FY

2019 FY

2018 FY

2017






Benchmark performance (%) -6.02 -0.29 1.58 2.84

Total return (%)(1) -5.78 3.74 -0.60 8.07

- Capital growth (%) -5.78 3.74 -0.60 8.07

- Income distribution(%) - - - -

Gross distribution (sen per unit) - - - -

Net distribution (sen per unit) - - - -




Note: (1) Total return is the actual/annualised return of the Fund for the respective

financial period/years computed based on the net asset value per unit and netof all fees.

(2) Management expense ratio (“MER”) is calculated based on the total fees andexpenses incurred by the Fund divided by the average fund size calculated ona daily basis. The MER decreased by 0.25% as compared to 2.08% perannum for the financial year ended 30 September 2019 mainly due todecrease in expenses.

(3) Portfolio turnover ratio (“PTR”) is calculated based on the average of the totalacquisitions and total disposals of investment securities of the Fund dividedby the average fund size calculated on a daily basis. The PTR decreased by0.63 times (47.0%) as compared to 1.34 times for the financial year ended 30September 2019 mainly due to decrease in investing activities.


AmIslamic Balanced(a)

%

50% FBM SI/ 50% MGII(b)

%

One year 0.65 -3.99

Three years 0.58 -1.22

Five years 1.33 -0.17

Ten years 4.84 2.94

(Forward)

109

Annual Total Return


AmIslamic Balanced(a)

%

50% FBM SI/ 50% MGII(b)

%

2019 3.74 -0.29

2018 -0.60 1.58

2017 8.07 2.84

2016 4.89 5.95

2015 -1.02 -3.23

(a) Source: Novagni Analytics and Advisory Sdn Bhd.(b) 50% FTSE Bursa Malaysia Emas Shariah Index (“FBM SI”) and 50% Quantshop

Medium GII Index (“MGII”) (obtainable from www.aminvest.com)



Fund Performance

For the financial period under review, the Fund registered a negative of 5.78% which was entirely capital growth in nature.

Thus, the Fund’s negative return of 5.78% has outperformed the benchmark’s negative return of 6.02% by 0.24%.

As compared with the financial year ended 30 September 2019, the net asset value (“NAV”) per unit of the Fund decreased by 5.78% from RM0.4637 to RM0.4369, while units in circulation increased by 14.91% from 11,130,029 units to 12,788,989 units.

The line chart below shows comparison between the annual performance of AmIslamic Balanced and its benchmark, FBM SI and MGII, for the financial years ended 30 September.


-10.0

-6.0

-2.0

2.0

6.0

10.0

To

tal R

etu

rn (

%)

2015 2016 2017 2018 2019

Fund -1.02 4.89 8.07 -0.60 3.74

Benchmark -3.23 5.95 2.84 1.58 -0.29Financial Year Ended (30 September)

110


For the financial period under review, the Fund invested generally according to a balanced mix between Shariah-compliant equities and Sukuk ranging between 40% and 60% for either asset class. Investment Manager may opt to invest in the investments either directly or via unit trust funds.

Islamic Equity

The Fund may invest up to a maximum 60% of its NAV in Shariah-compliant equities. Value-add from equities investments is derived from active stock selection with focus on undervalued Shariah-compliant stock relative to its earnings growth potential and/or its intrinsic value. In the event that outlook for equity investments is not conducive, the Fund can choose to have a minimum exposure of 40% in Shariah-compliant equity securities.

Islamic Debt Securities

The Fund may invest up to a maximum 60% of its NAV in Sukuk and Islamic money market instruments. In buying and selling such instruments for the Fund, the Investment Manager used active tactical duration management, yield curve positioning and credit spread arbitraging. This approach also involves an analysis of general economic and market conditions. This approach also involves an analysis of general economic and market conditions. It also involves the use of models that analyse and compare expected returns and assumed risk. Under this approach, the Investment Manager focused on Shariah-compliant instruments that would deliver favourable return in light of the risk. The Investment Manager also considered Shariah-compliant investments with a more favourable or improving credit or industry outlook that provide the potential for capital appreciation. The investment management team adopted an active trading stance, and will not consider portfolio turnover as a limiting factor in ensuring that the Fund meets its investment objective.

Portfolio Structure


As at 31.3.2020

%

As at 30.9.2019

% Changes

%

Consumer discretionary - 2.82 -2.82

Consumer staples 1.64 2.06 -0.42

Energy 4.76 10.51 -5.75

Financials - 2.38 -2.38

Health care 9.66 8.63 1.03

Industrials 12.87 7.31 5.56


Materials 2.12 1.66 0.46

Real estate 2.91 3.07 -0.16

Telecommunication services 3.92 1.23 2.69

Utilities 4.94 4.03 0.91

Corporate sukuk 23.32 25.71 -2.39

Local collective investment scheme 11.48 12.53 -1.05



Total 100.00 100.00

For the financial period under review, the Fund overall exposure was decreased to 81.63% from 82.98% as at 31 March 2020. The Fund exposure to equity was increased slightly to 46.83% from 44.74%, while investment in local collective investment scheme was at 11.48%.

111

The Fund tactically increased defensive names on the back of escalation ofUS-China trade war which could slow down global growth as well as rapid spread of coronavirus around the globe, triggering heightened uncertainty and fear in financial markets that the global economy is headed for a recession. Thus, the fund manager has reduced the weightage in energy as well as increase in the telecommunication sector and healthcare as these sectors deemed as defensive. The increase in information technology, materials and industrial sector was after market correction in the month of march where the fund manager believes the current valuations for these stocks are attractive.

Meanwhile, exposure in real estate, corporate sukuk, money market, local collective investment scheme, consumer discretionary, financials and consumer staples were lowered during the period of review.




State of Affairs





Market Review

Equity




112

Fixed Income

Following the selloff in October, the Malaysian Government Securities (MGS) market rebounded in November to December, with yields declining by 10-15bps in December. The unchanged Overnight Policy Rate (OPR) at 3% in November, coupled with the surprise Statutory Reserve Requirement (SRR) reduction by 50bps to 3.00%, strengthened the market’s conviction of a 1Q2020 cut.

Malaysian bond market entered 2020 with positive momentum amidst the whirlwind of predominantly risk-off global headlines hitting the press during the first month of the year and the ample liquidity ready to be deployed as the New Year started.

The assassination of prominent Iranian military leader, Qasem Soleimani on 3 January and the escalation of the novel coronavirus outbreak in China in late January have overshadowed the improved trade prospects from the signing of US-China phase-1 trade deal. Hence, the market falls back to risk-off mode sending US 10 year Treasury yield from 1.90% (2 January) to 1.60% (30 January). While locally, Malaysia Government Securities (MGS)/Government Investment Issue (GII) continued to rally from December 2019 with yields of the longer end fell more than 10bps in mid January. On 22 January, Bank Negara Malaysia (BNM) cut OPR by 25bps to 2.75%, sending yields down further by 8-18bps across the curve as market perceived more dovish policy actions going forward.

In February, the bond market continued to rally amidst the rising COVID-19 cases in US and other parts of the world outside China. Risk-off market sentiments and anticipation of further rate cut by the US Federal Reserve (Fed) have sent the US 10 year treasury yield dropped from the high of 1.65% to the low of 1.15% as at end February. In the local market, bonds continued to rally in tandem with the US treasuries and in anticipation of another 25bps OPR cut in 2020. The rate cut was delivered on 3 March 2020 as BNM made a second consecutive cut on OPR to 2.50%. The cut came shortly after the first COVID-19 fiscal stimulus package worth MYR20b was announced on 27 February. While foreign flows were affected by the ongoing political turmoil in the country, the government bonds were seen strongly supported by local investors despite the spike in yields on the day of Tun Mahathir’s resignation as the Prime Minister of Malaysia. The MGS curve parallel shifted downward by 18-35bps in February, which had fully priced in 25bps rate cut or more.

Stepping into an anomalous and turbulent month of March, Malaysia experienced a mid-term change in ruling coalition resulting in a new Prime Minister and Cabinet. Political uncertainty took a backseat as the country then swiftly went into lockdown mode as the number of confirmed Covid-19 cases spiked, necessitating the new government to announce an unprecedented MYR250b fiscal stimulus package despite a gloomy fiscal outlook from plunging oil prices as a result of the collapse of the OPEC-Russia (or OPEC+) alliance. The global flight to liquidity snapped the bullish trend in Malaysian Ringgit (MYR) bond markets and panic selling sent MGS/GII yields soaring. In a move to inject more liquidity into the market, BNM announced an emergency 100bps SRR cut following the 25bps OPR cut earlier in the month.

The rush to United States Dollar (USD) liquidity sent financial markets worldwide tumbling, the MGS/GII market was also hit by the combination of foreign selling, bank traders cutting losses, and redemption-driven selling by asset managers. At the height of the turmoil, yields soared approximately 60-100bps across the sovereign curves. Signs of stabilization returned to the market following BNM’s emergency SRR cut of 100bps on 19 March 2020, and the MGS/GII curves ended the month 20-80bps higher. Despite the massive selloff, the MGS/(GII auctions (15 year MGS,20 year GII, 5 year MGS, and 7 year GII) garnered decent bid-to-cover ratios of 2.1-2.9x, underpinned by demand from real money investors attracted to the higheryields.

113

Market Outlook

Equity



During this highly uncertain period, the Fund Manager would continue tomaintain defensive strategy. Focus would be on high dividend-paying stocks to be defensive, strong cash flow and net cash position of the company is also a must consideration in this current market stock selection. Sectors wise, continue to focus on plantation, consumer (non-discretionary), certain oil & gas players involved mainly in maintenance, selective construction and technology players and Real Estate Investment Trusts (REITs). Gloves and selective telcos maybe a tactical play to ride through this period.

Fixed Income

In response to the rising impact of Covid-19 outbreak, central banks across developed and emerging markets have stepped up their easing mode in March. These measures however failed to stem the global sell-off across both risk and “safe” asset classes, including local government bonds. In the near term, market direction will continue to be sentiment driven. The Fund Manager expectsfurther easing measures by BNM to stimulate the economy to counter the expected slowdown in growth.

The Fund Manager continues to overweight duration amidst the drastic marketvolatility, noting the factors (external headwinds, weakening growth outlook, and political uncertainty) that are expected to support bonds demand in medium term. Stability returned to the MGS/GII market following the 100bps emergency SRR cut by BNM.

114



1. Seohan Soo resigned as a Non-Independent, Non-Executive Director forAmFunds Management Berhad and AmIslamic Funds Management Sdn Bhdwith effect from 1st January 2020.


17 May 2020

AmIslamic Balanced


AS AT 31 MARCH 2020

31.3.2020 30.9.2019


Note RM RM

ASSETS


Amount due from Manager 5(a) - 6,786

Dividend receivable 21,504 9,788

Sundry receivable 6 503,433 -

Deposits with financial institutions 7 900,063 877,071

Cash at banks 510,437 7,557 TOTAL ASSETS 6,496,481 5,183,361

LIABILITIES


Amount due to Trustee 8 295 227

Sundry payables and accrued expenses 6 884,766 15,771


EQUITY

Unitholders’ capital 10(a) (4,044,765) (4,831,127)

Retained earnings 10(b)(c) 9,632,251 9,992,076

TOTAL EQUITY 10 5,587,486 5,160,949





115

AmIslamic Balanced



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

Note RM RM

SHARIAH COMPLIANT INVESTMENT LOSS

Gross dividend/distribution income 50,592 31,456




loss (“FVTPL”) 9 (385,022) (189,846)

(282,913) (96,729)

EXPENDITURE

Manager’s fee 5 (36,461) (39,168)

Trustee’s fee 8 (1,616) (1,590)


Tax agent’s fee (2,500) (2,466)


Custodian’s fee (367) -


(76,695) (68,408)

Net loss before tax (359,608) (165,137)

Less: Income tax 12 (217) (73)

Net loss after tax (359,825) (165,210)


Total comprehensive loss for the financial period (359,825) (165,210)

Total comprehensive loss comprises the following:

Realised income 3,713 115,953

Unrealised loss (363,538) (281,163)

(359,825) (165,210)


116

AmIslamic Balanced



Unitholders’ Retained Total

capital earnings equity

Note RM RM RM

At 1 October 2018 (4,150,723) 9,816,414 5,665,691


for the financial period - (165,210) (165,210)

Creation of units 124,065 - 124,065

Cancellation of units (316,680) - (316,680) Balance at 31 March 2019 (4,343,338) 9,651,204 5,307,866

At 1 October 2019 (4,831,127) 9,992,076 5,160,949


for the financial period - (359,825) (359,825)


Cancellation of units 10(a) (621,894) - (621,894) Balance at 31 March 2020 (4,044,765) 9,632,251 5,587,486


117

AmIslamic Balanced



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM




Dividends received 38,659 42,408




Custodian’s fee paid (367) -



Net cash (used in)/generated from operating

and investing activities (284,068) 702,573


ACTIVITIES

Proceeds from creation of units 1,415,042 124,065

Payments for cancellation of units (605,102) (316,680)

Net cash generated from/(used in) financing

activities 809,940 (192,615)

NET INCREASE IN CASH AND

CASH EQUIVALENTS 525,872 509,958


BEGINNING OF FINANCIAL PERIOD 884,628 503,074



Deposit with financial institution 900,063 -

Cash at banks 510,437 1,013,032

1,410,500 1,013,032


118

AmIslamic Balanced







AmIslamic Balanced (“the Fund”) was established pursuant to a Deed dated 2 September

2004 as amended by Deeds Supplemental thereto (“the Deed”), between AmFunds

Management Berhad as the Manager, AmanahRaya Trustees Berhad as the Trustee and all

unitholders.



interest bearing securities. The Fund aims to grow the value of investment in the longer term

with lower volatility through asset diversification, which conforms to Principles of Shariah. As

provided in the Deed, the “accrual period” or the financial year shall end on 30 September and

the units of the Fund were first offered for sale on 10 September 2004.



The financial statements of the Fund have been prepared on a historical cost basis, except as

otherwise stated in the accounting policies and comply with Malaysian Financial Reporting





effective in the respective financial periods and these MFRSs and Amendments to MFRSs are

not expected to have any material impact to the financial statements of the Fund upon initial

application.



119

AmIslamic Balanced



Effective for

financial periods












(i) Dividend/distribution income

(ii) Profit income

Dividend/distribution income is recognised when the Fund’s right to receive

payment is established.












losses.




120

AmIslamic Balanced


3.1 Income recognition (cont’d.)


3.2 Income tax



3.5 Distribution



accounted for as a deduction from realised income. A proposed distribution is recognised

as a liability in the period in which it is approved. Distribution is either reinvested or paid

in cash to the unitholders on the income payment date. Reinvestment of units is based

on the NAV per unit on the income payment date, which is also the time of creation.











in equity.










(“MFRS 132”) .

121

AmIslamic Balanced







(i) Debt instruments

Business model



contractual cash flows from the assets, or is to collect both the contractual cash

flows and cash flows arising from the sale of assets. If neither of these is applicable

(e.g. the financial assets are held for trading purposes), then the financial assets

are classified as part of “other” business model. Factors considered by the Fund in

determining the business model for a portfolio of assets include past experience on

how the cash flows for these assets were collected, how the asset’s performance is

evaluated and reported to key management personnel, and how risks are assessed

and managed.






The classification and subsequent measurement of debt instruments held by the

Fund are determined based on their business model and cash flow characteristics.














122

AmIslamic Balanced



(i) Debt instruments (cont’d.)


(ii) Equity instruments and collective investment scheme (“CIS”)











receivables.



financial assets’ contractual cash flows represent solely payment of principal and

profit (“SPPP”). In making this assessment, the Fund considers whether the

contractual cash flows are consistent with a basic financing arrangement, i.e. profit

includes only consideration for time value of money, credit risk, other basic

financing risks and a profit margin that is consistent with a basic financing

arrangement. Financial assets with embedded derivatives are considered in their

entirety when determining whether their cash flows are SPPP.

The Fund subsequently measures its Shariah-compliant investments in equity

investments and CIS at FVTPL. Dividends/distribution earned whilst holding the

Shariah-compliant investments are recognised in profit or loss when the right to the

payment has been established. Gains and losses on the Shariah-compliant

investments, realised and unrealised, are included in profit or loss.









123

AmIslamic Balanced
















measurement, financial liabilities are subsequently measured at amortised cost using the

effective profit method. Amortised cost is calculated by taking into account any discount

or premium on acquisition and fees or costs that are an integral part of the effective profit

rate.
















in “Profit income” and “Dividend/distribution income” respectively.

124

AmIslamic Balanced





-

-

-



-

-

-





asset, or


reasonable and supportable information that is available without undue cost or effort

at the reporting date about past events, current conditions and forecasts of future

economic conditions.



















loss.

125

AmIslamic Balanced







investments in CIS, fair value will determined based on the closing NAV per unit of the


compliant investments. For Shariah-compliant investments in unquoted fixed income

securities, nominal value is the face value of the securities and fair value is determined

based on the indicative prices from Bond Pricing Agency Malaysia Sdn Bhd plus accrued

profit, which includes the accretion of discount and amortisation of premium. Adjusted

cost of Shariah-compliant investments relates to the purchased cost plus accrued profit,

adjusted for amortisation of premium and accretion of discount, if any, calculated over

the period from the date of acquisition to the date of maturity of the respective securities

as approved by the Manager and the Trustee. The difference between

purchased/adjusted cost and fair value is treated as unrealised gain or loss and is

recognised in profit or loss. Unrealised gains or losses recognised in profit or loss are not

distributable in nature.














financial period.




period.



to meet unitholder’s cancellation of units.

126

AmIslamic Balanced

4.

31.3.2020 30.9.2019

RM RM Financial assets at FVTPL


Quoted Shariah-compliant CIS (b) 162,321 158,545

Unquoted Shariah-compliant CIS (c) 641,351 646,560

Unquoted Shariah-compliant fixed income securities (d) 1,302,782 1,326,994

4,561,044 4,282,159


Fair



RM RM %

31.3.2020

(a) Quoted Shariah-compliant equity securities

Consumer staples

NTPM Holdings Berhad 244,100 91,538 104,410 1.64

Energy

Dayang Enterprise Holdings

Bhd. 49,300 56,695 54,319 1.01

Wah Seong Corporation

Berhad 114,000 60,420 54,583 1.08


194,500 265,939 267,639 4.75

Health care


Berhad 72,740 101,109 91,736 1.81

Hartalega Holdings Berhad 29,200 200,896 149,502 3.60


Berhad 23,800 122,094 113,114 2.19

Top Glove Corporation Bhd 17,900 115,455 96,937 2.07

143,640 539,554 451,289 9.67


127

AmIslamic Balanced

4.

Fair



RM RM %

31.3.2020 (cont’d.)

(a) Quoted Shariah-compliant equity securities (cont’d.)

Industrials

Dufu Technology Corp. Berhad 18,300 60,207 56,426 1.08

Econpile Holdings Berhad 141,700 57,389 55,731 1.03

Frontken Corporation Berhad 32,500 58,825 55,208 1.05

Gabungan AQRS Berhad 86,500 68,335 104,025 1.22

Gamuda Berhad 58,876 166,619 180,861 2.98

IJM Corporation Berhad 37,600 59,784 56,866 1.07

Lingkaran Trans Kota Holdings

Berhad 19,800 73,260 93,004 1.31

Malaysian Resources Corporation

Berhad 145,500 56,745 56,716 1.02

MMC Corporation Berhad 97,800 59,169 58,230 1.06

UWC Berhad 32,700 58,860 56,130 1.05

671,276 719,193 773,197 12.87


Globetronics Technology Bhd. 47,000 76,140 106,695 1.36

KESM Industries Berhad 13,100 84,495 116,544 1.51

Mi Technovation Berhad 32,500 63,700 56,956 1.14

92,600 224,335 280,195 4.01

Materials

PETRONAS Chemicals Group

Berhad 23,500 118,675 110,685 2.12


Axiata Group Berhad 32,500 106,600 130,065 1.91

Digi.com Berhad 25,900 112,665 107,462 2.02

58,400 219,265 237,527 3.93

Utilities

Malakoff Corporation Berhad 139,900 112,619 112,312 2.02

Tenaga Nasional Berhad 13,600 163,472 171,571 2.93

153,500 276,091 283,883 4.95 Total quoted Shariah-compliant

equity securities 1,581,516 2,454,590 2,508,825 43.94


128

AmIslamic Balanced

4.

Fair

value as a

Number Fair Purchased percentage

Name of company/trust of units value cost of NAV

RM RM %

31.3.2020 (cont’d.)


REITs


Trust 88,700 162,321 175,342 2.91 Total quoted Shariah-

compliant CIS 88,700 162,321 175,342 2.91


AmBon Islam* 205,590 254,026 267,972 4.55

AmDynamic Sukuk* 183,320 255,199 256,256 4.57

AmIntelligent Global Equity Multi

Strategy-Developed Markets* 140,232 132,126 139,989 2.36

529,142 641,351 664,217 11.48 Total unquoted Shariah-

compliant CIS 529,142 641,351 664,217 11.48

* The CIS is managed by the Manager.

Fair

value as a Maturity Nominal Fair Adjusted percentage date Issuer value value cost of NAV

RM RM RM %


Corporate sukuk

15.04.2020 DRB-Hicom Berhad 300,000 310,805 310,414 5.56

27.08.2027 Celcom Networks

Sdn Bhd 500,000 539,706 505,616 9.66


Berhad 400,000 452,271 411,343 8.09

Total unquoted Shariah-compliant

fixed income securities 1,200,000 1,302,782 1,227,373 23.31


Shortfall of fair value over

purchased/adjusted cost (14,713)


129

AmIslamic Balanced

4.

Fair



RM RM %

30.09.2019



Magni-Tech Industries Berhad 22,700 145,507 107,073 2.82

Consumer staples


Energy

CARIMIN Petroleum Berhad 117,500 123,375 97,826 2.39

Dayang Enterprise Holdings Bhd. 70,700 118,776 88,565 2.30

Deleum Berhad 103,500 110,745 108,464 2.15


320,100 542,324 423,646 10.51

Financials

Syarikat Takaful Malaysia Berhad 20,800 122,720 125,757 2.38

Health care

CCM Duopharma Biotech Berhad 72,163 101,028 91,015 1.96



140,063 445,423 437,717 8.63

Industrials

Gamuda Berhad 13200 48840 38833 0.95

JAKS Resources Berhad 132800 98936 102123 1.92


Pentamaster Corporation Berhad 28,950 128,538 81,824 2.49

WCT Holdings Berhad 55,980 50,382 60,763 0.98

278,630 377,258 333,628 7.32


Inari Amertron Berhad 29,400 53,508 52,156 1.04

Materials

Press Metal Aluminium Holdings Bhd 18,000 85,680 75,654 1.66


Telekom Malaysia Berhad 17,700 63,720 63,685 1.23


130

AmIslamic Balanced

4.

Fair

value as a

Name of company/trust Number of Fair Purchased percentage

shares/units value cost of NAV

RM RM %

30.9.2019 (cont’d.)


Utilities



130,100 207,736 182,576 4.02 Total quoted Shariah-compliant



REITs


Trust 85,700 158,545 150,888 3.07 Total quoted Shariah-

compliant CIS 85,700 158,545 150,888 3.07


AmBon Islam* 199,295 253,603 260,000 4.92

AmDynamic Sukuk* 178,750 249,392 250,000 4.83

AmIntelligent Global Equity Multi

Strategy-Developed Markets* 138,630 143,565 138,325 2.78

516,675 646,560 648,325 12.53 Total unquoted Shariah-

compliant CIS 516,675 646,560 648,325 12.53

* The CIS is managed by the Manager.


Corporate sukuk

15.04.2020 DRB-Hicom Berhad 300,000 315,923 310,749 6.12

27.08.2027 Celcom Networks

Sdn Bhd 500,000 551,206 505,797 10.68


Berhad 400,000 459,865 411,273 8.91

Total unquoted Shariah-compliant

fixed income securities 1,200,000 1,326,994 1,227,819 25.71


131

AmIslamic Balanced

4.

Fair

value as a

Maturity Fair Adjusted percentage

date Issuer value cost of NAV

RM RM %

30.9.2019 (cont’d.)


Excess of fair value over

purchased/adjusted cost 348,825


31.3.2020 30.9.2019 Note RM RM

(a) Due from ManagerCreation of units (i) - 6,786

(b) Due to Manager

Redemption of units (ii) 16,792 -

Management fee payable (iii) 7,142 6,414

23,934 6,414

(i)

(ii)

(iii)







The amount represents amount payable to the Manager for units redeemed.



132

AmIslamic Balanced

6. SUNDRY RECEIVABLES/PAYABLES

31.3.2020 30.9.2019

RM RM

Amount owing from financial institution 503,433 - Amount owing to broker/financial institution 871,288 -

The normal trade settlement period is two business days.

7. DEPOSIT WITH FINANCIAL INSTITUTION

31.3.2020 30.9.2019

RM RM

At nominal value:Short-term deposit with a licensed Islamic bank 900,000 877,000

At carrying value:Short-term deposit with a licensed Islamic bank 900,063 877,071

Details of deposit with financial institution are as follows:

Carrying


RM RM RM %

31.3.2020

Short-term deposit with a licensed Islamic bank

CIMB Islamic BankBerhad 900,000 900,063 900,000 16.11

30.9.2019



01.10.2019

01.04.2020

Included in sundry receivables/payables were amounts owing from/to financial institution for

outstanding contracts where receipts or settlement were not due as follows:

133

AmIslamic Balanced



1.10.2019 1.10.2018

31.3.2020 31.3.2019

RM RM


− Net realised (loss)/gain on sale of Shariah-compliant

investments (21,484) 91,317

− Net unrealised loss on changes in fair values of

Shariah-compliant investments (363,538) (281,163)

(385,022) (189,846)

10. TOTAL EQUITY


31.3.2020 30.9.2019 Note RM RM

Unitholders’ capital (a) (4,044,765) (4,831,127)

Retained earnings

– Realised income (b) 9,646,964 9,643,251

– Unrealised (loss)/gain (c) (14,713) 348,825

5,587,486 5,160,949


Number of Number of

units RM units RM

At beginning of the

financial period/year 11,130,029 (4,831,127) 12,676,028 (4,150,723)

Creation during the

financial period/year 2,994,322 1,408,256 977,917 434,354


financial period/year (1,335,362) (621,894) (2,523,916) (1,114,758)

At end of the financial period/year 12,788,989 (4,044,765) 11,130,029 (4,831,127)





31.3.2020 30.9.2019

134

AmIslamic Balanced

10. TOTAL EQUITY (CONT’D)

(a) Unitholders’ capital/units in circulation (cont’d)


31.3.2020 30.9.2019

RM RM


Net realised income for the financial period/year 3,713 306,059 At end of the financial period/year 9,646,964 9,643,251

(c)

31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year 348,825 479,222

Net unrealised loss for the financial period/year (363,538) (130,397)At end of the financial period/year (14,713) 348,825








Manager


September 2019.

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


The negative balance of unitholders’ capital was due to the cancellation of units at a

higher NAV per unit following the price appreciation of the Fund as compared to the units

being created at a lower NAV per unit in prior years.

135

AmIslamic Balanced

12. INCOME TAX

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Current financial period - local tax 217 73

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM


Taxation at Malaysian statutory rate of 24% (2019: 24%) (86,306) (39,633)

Tax effects of:


Effect of different tax rate (303) (101)


Restriction on tax deductible expenses for unit

trust fund 8,544 9,185



future financial periods 949 1,021 Tax expense for the financial period 217 73

13. DISTRIBUTION



follows:






exempted from tax.


31 March 2019.

136

AmIslamic Balanced



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

% p.a. % p.a.






– A portfolio of Shariah-compliant equity instruments;

–

–








is 0.71 times (2019: 0.57 times).



A portfolio of Shariah-compliant CIS; and






137

AmIslamic Balanced

16. SEGMENTAL REPORTING (CONT’D)

Fixed

Equity CIS income


RM RM RM RM

1.10.2019 to 31.3.2020

Gross dividend income 34,750 15,842 - 50,592

Profit income - - 51,517 51,517

Net loss from Shariah-


- Financial assets at FVTPL (308,564) (52,692) (23,766) (385,022)


(loss)/income for the financial period (273,814) (36,850) 27,751 (282,913)

1.10.2018 to 31.3.2019

Gross dividend income 31,456 - - 31,456

Profit income - - 61,661 61,661



- Financial assets at FVTPL (218,377) 3,355 25,176 (189,846)


(loss)/income for the financial period (186,921) 3,355 86,837 (96,729)

31.3.2020

Financial assets at FVTPL 2,454,590 803,672 1,302,782 4,561,044

Dividends receivable 16,590 4,914 - 21,504

Amount owing from financial

institution 503,433 - - 503,433

Deposits with financial institutions - - 900,063 900,063Total segment assets 2,974,613 808,586 2,202,845 5,986,044

Amount owing to broker/

financial institution 871,288 - - 871,288 Total segment liabilities 871,288 - - 871,288

30.9.2019

Financial assets at FVTPL 2,150,060 805,105 1,326,994 4,282,159

Deposits with financial institutions - - 877,071 877,071

Dividends receivable 8,125 1,663 - 9,788 Total segment assets 2,158,185 806,768 2,204,065 5,169,018

There were no segment liabilities as at 30 September 2019.

138

AmIslamic Balanced


1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Net reportable segment investment loss (282,913) (96,729)

Less: Expenses (76,695) (68,408)


Less: Income tax (217) (73) Net loss after tax (359,825) (165,210)

31.3.2020 30.9.2019

RM RM


Amount due from Manager - 6,786

Cash at banks 510,437 7,557 Total assets of the Fund 6,496,481 5,183,361

Total segment liabilities 871,288 -


Amount due to Trustee 295 227

Sundry payables and accrued expenses 13,478 15,771 Total liabilities of the Fund 908,995 22,412







139

AmIslamic Balanced




RM % RM %


Macquarie Capital Securities

(Malaysia) Sdn. Bhd. 1,806,595 23.55 6,479 22.81


Berhad 658,969 8.59 2,207 7.77

Alliance Investment Bank Berhad 586,554 7.64 2,404 8.47


Sdn. Bhd 348,329 4.54 1,357 4.78


Berhad 267,208 3.48 1,199 4.22

CGS – CIMB Securities Sdn. Bhd 259,477 3.38 1,163 4.09


Berhad 145,742 1.90 507 1.79

RHB Investment Bank Berhad 26,307 0.34 92 0.32

AmFunds Management Berhad 15,892 0.21 - -

7,672,441 100.00 28,400 100.00

*






compliance risk.










The above transactions were in respect of Shariah-compliant listed securities and fixed

income instruments. Transactions in Shariah-compliant fixed income instruments do not

involve any commission or brokerage.

140

AmIslamic Balanced


(a) Market risk

(i) Price risk

(ii) Rate of return risk

(b) Credit risk

(c) Liquidity risk












Rate of return risk will affect the value of the Fund’s Shariah-compliant

investments, given the rate of return movements, which are influenced by regional

and local economic developments as well as political developments.



bond issuers and financial institutions defaulting on their repayment obligations which in












compliant quoted investments. In managing price risk, the Manager actively

monitors the performance and risk profile of the investment portfolio.

141

AmIslamic Balanced



(e) Regulatory risk

(f) Management risk







ratings.






compliance.



142

AmIslamic Balanced





17 May 2020

I, Goh Wee Peng, for and on behalf of the Manager, AmFunds Management Berhad, for

AmIslamic Balanced (the “Fund”) do hereby state that in the opinion of the Manager, the

accompanying condensed statement of financial position, condensed statement of

comprehensive income, condensed statement of changes in equity, condensed statement of

cash flows and the accompanying notes are drawn up in accordance with Malaysian Financial

Reporting Standards so as to give a true and fair view of the financial position of the Fund as at

31 March 2020 and the comprehensive income, the changes in equity and cash flows of the

Fund for the half year then ended.

GOH WEE PENG


143

Trustee’s Report



AMISLAMIC BALANCED


(a)

(b)

Yours faithfully





6 May 2020

We, AMANAHRAYA TRUSTEES BERHAD, have acted as Trustee of AMISLAMIC

BALANCED for the six months financial period ended 31 March 2020. In our opinion,

AMFUNDS MANAGEMENT BERHAD, the Manager, has operated and managed AMISLAMIC

BALANCED in accordance with the limitations imposed on the investment powers of the

management company under the Deed, securities laws and the applicable Guidelines on Unit

Trust Funds for the six months financial period ended 31 March 2020.


requirement; and

Creation and cancellation of units are carried out in accordance with the Deed and

any regulatory requirement.

144

145

MANAGER’S REPORT

Dear Unitholders,

We are pleased to present you the Manager’s report and the unaudited accounts of AmIslamic Growth (“Fund”) for the financial period from 1 October 2019 to 31 March 2020.


Name AmIslamic Growth (“Fund”)

Category/Type Equity (Islamic) / Growth

Objective AmIslamic Growth aims to provide long-term capital growth mainly through investments in securities with superior growth potential*, which conforms to principles of Shariah. As such, income** will be incidental to the overall capital growth objective and a substantial portion of the income from investments will be reinvested, rather than distributed.

Note: * Superior growth potential in this context refers to earnings growth higher than

the market average.** The income could be in the term of unit or cash. Any material change to the investment objective of the Fund would require Unit Holders’ approval.

Duration The Fund was established on 10 September 2004 and shall exist for as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue. In some circumstances, the unitholders can resolve at a meeting to terminate AmIslamic Growth.


FTSE Bursa Malaysia Emas Shariah Index (“FBM SI”) (obtainable from www.aminvest.com)

Note: The benchmark does not imply that the risk profile of the Fund is the same as the risk profile of the benchmark. Investors of the Fund will assume a higher risk compared to the benchmark. Hence, the returns of the Fund may be potentially higher due to the higher risk faced by the investors.

Source: FTSE International Limited (“FTSE”) © FTSE 2020. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. “BURSA MALAYSIA" is a trade mark of Bursa Malaysia Berhad ("BURSA MALAYSIA”). All intellectual property rights in the index values and constituent list vests in FTSE and BURSA MALAYSIA. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.


Income distribution (if any) is incidental.

146




No of units held


No of units held


5,000 and below 327,253 106 307,169 95

5,001-10,000 1,015,299 138 998,264 135

10,001-50,000 7,179,688 335 6,827,582 321

50,001-500,000 5,734,541 58 5,509,349 62

500,001 and above 13,129,038 4 13,937,236 5




As at 31.3.2020

%

FY 2019

%

FY 2018

%

FY 2017

%

Construction - - 2.93 15.97

Consumer discretionary - 2.83 - -

Consumer products - - 8.09 -

Consumer staples 2.08 2.14 - -

Energy 14.47 17.70 - -

Financials - 5.30 - 2.61

Health care 10.55 16.05 - -

Industrial products - - 14.49 7.27

Industrials 16.72 8.66 - -

Information technology 4.99 2.93 - -

Infrastructure - - 2.31 5.79


Materials 5.09 2.51 - -

Money market deposit 5.21 7.71 - -

Plantation - - 12.97 7.93

Properties - - - 2.11

Real estate 6.69 6.39 - -

Technology - - 7.27 5.57


Trading/services - - 33.11 37.69

Utilities 13.95 7.14 - -


Total 100.00 100.00 100.00 100.00


147

Performance Details


Half year ended

31.3.2020 FY

2019 FY

2018 FY

2017






Benchmark performance (%) -14.13 -7.18 -0.93 3.64

Total return (%)(1) -10.55 -2.89 -4.33 7.79

- Capital growth (%) -10.55 -2.89 -4.33 7.79

- Income distribution(%) - - - -

Gross distribution (sen per unit) - - - -

Net distribution (sen per unit) - - - -




Note: (1) Total return is the actual return of the Fund for the respective financial

period/years computed based on the net asset value per unit and net of allfees.

(2) Management expense ratio (“MER”) is calculated based on the total feesand expenses incurred by the Fund divided by the average fund sizecalculated on a daily basis. The MER decreased by 0.09% as compared to1.80% per annum for the financial year ended 30 September 2019 mainlydue to decrease in expenses.

(3) Portfolio turnover ratio (“PTR”) is calculated based on the average of thetotal acquisitions and total disposals of investment securities of the Funddivided by the average fund size calculated on a daily basis. The PTRdecreased by 0.89 times (53.0%) as compared to 1.68 times for the financialyear ended 30 September 2019 mainly due to decrease in investingactivities.


AmIslamic Growth(a)

%FBM SI(b)

%

One year -6.53 -13.54

Three years -5.15 -7.60

Five years -2.67 -5.09

Ten years 4.20 1.25

148

Annual Total Return


AmIslamic Growth(a)

%FBM SI(b)

%

2019 -2.89 -7.18

2018 -4.43 -0.93

2017 7.79 3.64

2016 2.38 3.86

2015 -3.88 -9.83

(a) Source: Novagni Analytics and Advisory Sdn Bhd.(b) FTSE Bursa Malaysia EMAS Shariah Index (“FBM SI”).

(obtainable from www.aminvest.com)



Fund Performance

For the financial period under review, the Fund’s net asset value (“NAV”) per unit decreased by 10.55% from RM0.4703 to RM0.4207. Meanwhile, the Fund’s NAV fell by 11.18% to RM11.522 million as at 31 March 2020 from RM12.972 million as at 30 September 2019. As at the end of financial period under review, units in circulation were 0.70% lower at 27,385,819 units as compared to 27,579,600 units as at 30 September 2019.

The Fund registered a negative return of 10.55% for the financial period ended 31 March 2020, which was entirely capital in nature. Comparatively, for the same period, the benchmark, FBM SI registered a negative return of 14.13%. As such the Fund outperformed the benchmark by 3.58%. The outperformance was attributed to stock selection and asset allocation.

The Line Chart below shows the comparison between the annual performances of AmIslamic Growth and its benchmark, FBM SI, for the financial years ended 30 September.

149



For the financial period under review, the Fund invested accordingly in Shariah compliant equities up to 95% of its NAV. Investment Manager may opt to invest in the investments either directly or via Shariah-compliant unit trust funds. Value-add from equities investments is derived from active stock selection with focus on undervalued Shariah-compliant stock relative to its earnings growth potential and/or its intrinsic value.

Portfolio Structure


As at 31.3.2020

%

As at 30.9.2019

% Changes

%

Consumer discretionary - 2.83 -2.83

Consumer staples 2.08 2.14 -0.06

Energy 14.47 17.70 -3.23

Financials - 5.30 -5.30

Health care 10.55 16.05 -5.50

Industrials 16.72 8.66 8.06


Local collective investment scheme 2.89 2.79 0.10

Materials 5.09 2.51 2.58


Real estate 6.69 6.39 0.30

Telecommunication services 5.81 8.66 -2.85

Utilities 13.95 7.14 6.81


Total 100.00 100.00

At the end of financial period under review, the Fund’s equity and local collective investment scheme exposure was at 83.24% as compared to 83.10% as at 30 September 2019.

The Fund tactically increased defensive names on the back of escalation ofUnited States (US) - China trade war which could slow down global growth as well as rapid spread of coronavirus around the globe, triggering heightened

-12.0-10.0

-8.0-6.0-4.0-2.00.02.04.06.08.0

10.0

To

tal R

etu

rn (

%)

2015 2016 2017 2018 2019

Fund -3.88 2.38 7.79 -4.43 -2.89

Benchmark -9.83 3.86 3.64 -0.93 -7.18


150

uncertainty and fear in financial markets that the global economy is headed for a recession. Thus, the fund manager has reduced the weightage in energy and financials as well as increase the weightage in utilities as this sector deemed as defensive. The increase in information technology, materials and industrial sector was after market correction in the month of March where the fund manager believes the current valuations for these stocks are attractive while the decreased in Healthcare was due to profit taking as the rubber gloves sector has done well on a year to date basis.

Meanwhile, exposure in real estate and collective investment scheme were increased while money market, telecommunication services, consumer discretionary and consumer staples were lowered during the period of review.




State of Affairs





Market Review




151

Market Outlook



During this highly uncertain period, The Fund Manager would continue tomaintain defensive strategy. Focus would be on high dividend-paying stocks to be defensive, strong cash flow and net cash position of the company is also a must consideration in this current market stock selection. Sectors wise, continue to focus on plantation, consumer (non-discretionary), certain oil & gas players involved mainly in maintenance, selective construction and technology players and Real Estate Investment Trusts (REITs). Gloves and selective telcos maybe a tactical play to ride through this period.





17 May 2020

AmIslamic Growth


AS AT 31 MARCH 2020

31.3.2020 30.9.2019


Note RM RM

ASSETS


Amount due from Manager 5(a) 9,738 12,484

Dividend receivable 61,372 27,317

Sundry receivables 6 2,850,038 -

Deposit with financial institution 7 600,042 1,000,081

Cash at banks 923,022 1,182,222 TOTAL ASSETS 14,035,356 13,002,320

LIABILITIES



Sundry payables and accrued expenses 6 2,496,671 12,732

TOTAL LIABILITIES 2,513,181 30,339

EQUITY

Unitholders’ capital 10(a) (8,131,314) (8,077,349)

Retained earnings 10(b)(c) 19,653,489 21,049,330

TOTAL EQUITY 10 11,522,175 12,971,981





152

AmIslamic Growth



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019 Note RM RM


Gross dividend/distribution income 158,073 118,136




loss (“FVTPL”) 9 (1,400,286) (999,959)

(1,214,413) (848,156)

EXPENDITURE

Manager’s fee 5 (94,149) (95,682)

Trustee’s fee 8 (3,898) (3,885)


Tax agent’s fee (2,500) (2,466)

Custodian’s fee (566) -



(180,294) (174,558)


Less: Income tax 12 (1,134) (318)

Net loss after tax (1,395,841) (1,023,032)


Total comprehensive loss for the financial period (1,395,841) (1,023,032)


Realised losses (239,906) (364,489)

Unrealised losses (1,155,935) (658,543)

(1,395,841) (1,023,032)


153

AmIslamic Growth




capital earnings equity Note RM RM RM

At 1 October 2018 (7,135,605) 21,509,642 14,374,037




Cancellation of units (489,930) - (489,930)Balance at 31 March 2019 (7,313,802) 20,486,610 13,172,808

At 1 October 2019 (8,077,349) 21,049,330 12,971,981




Cancellation of units 10(a) (1,146,957) - (1,146,957)Balance at 31 March 2020 (8,131,314) 19,653,489 11,522,175


154

AmIslamic Growth



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM




Dividends received 122,884 147,986






Net cash used in operating and investing activities (608,020) (1,151,550)


ACTIVITIES

Proceeds from creation of units 1,095,738 233,347

Payments for cancellation of units (1,146,957) (492,397)

Net cash used in financing activities (51,219) (259,050)

NET DECREASE IN CASH AND CASH

EQUIVALENTS (659,239) (1,410,600)





Deposit with financial institution 600,042 -

Cash at banks 923,022 1,297,371

1,523,064 1,297,371


155

AmIslamic Growth







AmIslamic Growth (“the Fund”) was established pursuant to a Deed dated 2 September 2004

as amended by Deed Supplemental thereto (“the Deed”), between AmFunds Management




interest bearing securities. The Fund aims to provide long-term capital growth mainly through

investments in securities with superior growth potential, which conforms to Principles of

Shariah. As provided in the Deed, the “accrual period” or the financial year shall end on 30

September and the units of the Fund were first offered for sale on 10 September 2004.




effective in the respective financial periods and these MFRSs and Amendments to MFRSs are

not expected to have any material impact to the financial statements of the Fund upon initial

application.








156

AmIslamic Growth



Effective for

financial periods












(i) Dividend income

(ii) Profit income


3.2 Income tax




Dividend income is recognised when the Fund’s right to receive payment is

established.

Profit income on Islamic short-term deposits is recognised on an accrual basis

using the effective profit method.








157

AmIslamic Growth


3.2 Income tax (cont’d.)



3.5 Distribution




in equity.










accounted for as a deduction from realised income. A proposed distribution is recognised

as a liability in the period in which it is approved. Distribution is either reinvested or paid

in cash to the unitholders on the income payment date. Reinvestment of units is based

on the NAV per unit on the income payment date, which is also the time of creation.



(“MFRS 132”) .

158

AmIslamic Growth



























The Fund subsequently measures its Shariah-compliant investments in equity securities

and collective investment schemes (“CIS”) at FVTPL. Dividends/distribution earned

whilst holding the Shariah-compliant investments are recognised in profit or loss when

the right to the payment has been established. Gains and losses on the Shariah-

compliant investments, realised and unrealised, are included in profit or loss.









159

AmIslamic Growth


3.9 Financial instruments under MFRS 9 (cont’d.)


























in “Profit income” and “Dividend/Distribution income” respectively.







receivables.

160

AmIslamic Growth






-

-

-



-

-

-


loss.


asset, or










measurement, financial liabilities are subsequently measured at amortised cost using the

effective profit method. Amortised cost is calculated by taking into account any discount

or premium on acquisition and fees or costs that are an integral part of the effective profit

rate.











reasonable and supportable information that is available without undue cost or effort

at the reporting date about past events, current conditions and forecasts of future

economic conditions.

161

AmIslamic Growth


3.12 Financial instruments – expected credit losses (“ECL”) (cont’d.)












to meet unitholders’ cancellation of units.




period.








financial period.








investments in CIS , fair value is determined based on the closing NAV per unit of the


compliant investments.The difference between the purchased cost and fair value is

treated as unrealised gain or loss and is recognised in profit or loss. Unrealised gains or

losses recognised in profit or loss are not distributable in nature.

162

AmIslamic Growth

4.

31.3.2020 30.9.2019

RM RM Financial assets at FVTPL


Quoted Shariah-compliant CIS (b) 770,706 828,985

Unquoted Shariah-compliant CIS (c) 333,523 362,399

9,591,144 10,780,216


Fair

value as a

Number of Fair Purchased percentage Name of company shares value cost of NAV

RM RM %

31.3.2020


Consumer staples

NTPM Holdings Bhd 637,800 239,175 272,573 2.08

Energy


Bhd. 152,000 174,800 167,474 1.52

Dialog Group Berhad 118,100 359,024 405,347 3.12


Berhad 233,190 349,785 288,481 3.04


Berhad 51,540 9,277 - 0.08

Wah Seong Corporation

Berhad 348,000 184,440 166,622 1.60


1,026,530 1,667,375 1,630,819 14.47

Health care

Duopharma Biotech Berhad

(fka CCM Duopharma

Biotech Berhad) 124,039 172,414 151,945 1.50



Berhad 46,400 238,032 220,525 2.07


289,739 1,215,621 973,507 10.55


163

AmIslamic Growth

4.

Fair

value as a


RM RM %

31.3.2020 (cont’d.)


Industrials

Dufu Technology Corp.

Berhad 55,100 181,279 169,895 1.57

Econpile Holdings Berhad 432,800 175,284 170,220 1.52

Frontken Corporation Berhad 133,100 240,911 226,097 2.09

Gabungan AQRS Berhad 218,000 172,220 262,167 1.49

Gamuda Berhad 160,210 453,394 531,856 3.93

IJM Corporation Berhad 114,800 182,532 173,624 1.58

Malaysian Resources

Corporation Berhad 432,800 168,792 168,705 1.46


UWC Berhad 98,100 176,580 168,389 1.54

1,935,910 1,927,047 2,044,214 16.72



Berhad 122,400 198,288 277,182 1.72

KESM Industries Berhad 29,500 190,275 262,762 1.65

Mi Technovation Berhad 95,300 186,788 167,013 1.62

247,200 575,351 706,957 4.99

Materials

Petronas Chemicals Group

Bhd 71,600 361,580 337,236 3.14

Press Metal Aluminium

Holdings Berhad 68,400 225,036 287,518 1.95

140,000 586,616 624,754 5.09



Digi Telecommunications

Sdn Bhd 78,800 342,780 372,697 2.97

178,228 668,904 843,846 5.81


164

AmIslamic Growth

4.

Fair

value as a

Number of Fair Purchased percentage

Name of company/Trust shares/units value cost of NAV

RM RM %

31.3.2020 (cont’d.)


Utilities



Berhad 108,200 479,326 430,941 4.16


610,575 1,606,826 1,521,417 13.95

Total quoted Shariah-compliant



REITs


Trust 421,151 770,706 766,132 6.69


compliant CIS 421,151 770,706 766,132 6.69




Markets* 353,984 333,523 353,370 2.89

Total unquoted Shariah

compliant CIS 353,984 333,523 353,370 2.89

Total financial assets at

FVTPL 5,841,117 9,591,144 9,737,589 83.24

Shortfall of fair value over purchased

cost (146,445)

30.9.2019



Magni-Tech Industries

Berhad 57,300 367,293 269,925 2.83


165

AmIslamic Growth

4.

Fair

value as a


RM RM %

30.9.2019 (cont’d.)


Consumer staples


Energy

CARIMIN Petroleum Berhad 308,800 324,240 264,402 2.50


Bhd. 189,800 318,864 243,548 2.46

Deleum Berhad 256,100 274,027 268,384 2.11

Dialog Group Berhad 75,600 257,040 261,629 1.98


Berhad 85,900 365,075 214,561 2.81


1,029,700 2,296,291 1,766,260 17.70

Financials

BIMB Holdings Berhad 109,000 431,640 501,431 3.33


Berhad 43,400 256,060 262,396 1.97

152,400 687,700 763,827 5.30

Health care


Berhad 282,083 394,916 345,488 3.04


IHH Healthcare Berhad 59,500 337,960 316,886 2.61

Supermax Corporation

Berhad 155,300 248,480 256,105 1.92

Top Glove Corporation Bhd. 88,400 393,380 278,665 3.03

719,983 2,081,911 1,853,530 16.05

Industrials

Gamuda Berhad 68,700 254,190 208,303 1.95

JAKS Resources Berhad 339,000 252,555 260,691 1.95


Pentamaster Corporation

Berhad 46,800 207,792 108,635 1.60

WCT Holdings Berhad 241,618 217,456 262,524 1.68

876,718 1,123,429 1,041,635 8.66


166

AmIslamic Growth

4.

Fair

value as a

Number of Fair Purchased percentage Name of company/trust shares/units value cost of NAV

RM RM %

30.9.2019 (cont’d.)



Inari Amertron Berhad 73,400 133,588 130,212 1.03

Uchi Technologies Berhad 87,900 246,999 254,532 1.90

161,300 380,587 384,744 2.93

Materials

Press Metal Aluminium

Holdings Bhd 68,400 325,584 287,518 2.51



Digi Telecommunications

Sdn Berhad 107,300 509,675 534,952 3.93

Telekom Malaysia Berhad 46,200 166,320 166,290 1.29

257,400 1,122,765 1,236,741 8.66

Utilities



Berhad 70,900 289,272 266,329 2.23


393,875 925,829 751,231 7.14

Total quoted Shariah-compliant



REITs


Trust 448,100 828,985 793,571 6.39


compliant CIS 448,100 828,985 793,571 6.39


167

AmIslamic Growth

4.

Fair

value as a

Number of Fair Purchased percentage Name of trust units value cost of NAV

RM RM %

30.9.2019 (cont’d.)




Markets* 349,941 362,399 349,171 2.79

Total unquoted Shariah

compliant CIS 349,941 362,399 349,171 2.79

Total financial assets at

FVTPL 5,152,917 10,780,216 9,770,726 83.10

Excess of fair value over purchased cost 1,009,490



31.3.2020 30.9.2019 Note RM RM

(a) Due from ManagerCreation of units (i) 9,738 12,484

(b) Due to ManagerManager’s fee payable (ii) 15,894 17,012

(i)

(ii)




The amount represents net amount receivable from the Manager for units created.


creation of units is three business days.



168

AmIslamic Growth

6. SUNDRY RECEIVABLES/PAYABLES

31.3.2020 30.9.2019

RM RM

Amount due from brokers 2,850,038 - Amount due to brokers 2,487,856 -

The normal trade settlement period is two business days.


31.3.2020 30.9.2019

RM RM

At nominal value:Short-term deposit with a licensed Islamic bank 600,000 1,000,000

At carrying value:Short-term deposit with a licensed Islamic bank 600,042 1,000,081


Carrying


RM RM RM %

31.3.2020



30.9.2019


CIMB Islamic BankBerhad 1,000,000 1,000,081 1,000,000 7.71

Included in sundry receivables/payables were amounts due owing from/to brokers for

outstanding contracts where receipts or settlement were not due as follows:

01.04.2020

01.10.2019

169

AmIslamic Growth



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM


− Net realised loss on sale of Shariah-compliant

investments (244,351) (341,416)

− Net unrealised loss on changes in fair value of

Shariah-compliant investments (1,155,935) (658,543)

(1,400,286) (999,959)

10. TOTAL EQUITY


31.3.2020 30.9.2019 Note RM RM

Unitholders’ capital (a) (8,131,314) (8,077,349)

Retained earnings

– Realised income (b) 19,799,934 20,039,840

– Unrealised (loss)/gain (c) (146,445) 1,009,490

11,522,175 12,971,981


Number of Number of

units RM units RM

At beginning of the

financial period/year 27,579,600 (8,077,349) 29,678,469 (7,135,605)

Creation during the




At end of the financial period/year 27,385,819 (8,131,314) 27,579,600 (8,077,349)





31.3.2020 30.9.2019

170

AmIslamic Growth


(a) Unitholders’ capital/units in circulation (cont’d.)


31.3.2020 30.9.2019

RM RM


Net realised (loss)/gain for the financial period/year (239,906) 484,168 At end of the financial period/year 19,799,934 20,039,840

(c)

31.3.2020 30.9.2019

RM RM


Net unrealised loss for the financial period/year (1,155,935) (944,480) At end of the financial period/year (146,445) 1,009,490








Manager

12. INCOME TAX

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

Current financial period - local tax 1,134 318


September 2019.

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


The negative balance of unitholders’ capital was due to the cancellation of units at a

higher NAV per unit following the price appreciation of the Fund as compared to the units

being created at a lower NAV per unit in prior years.

171

AmIslamic Growth


1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM



Tax effects of:


Effect of different tax rate (1,587) (446)




Permitted expenses not used and not available for future

financial periods 2,344 2,384 Tax expense for the financial period 1,134 318

13. DISTRIBUTION



1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

% p.a. % p.a.






follows:





market fund. Profit income earned by Funds other than other money market fund is exempted

from tax.


31 March 2019.

The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by the

Fund to the average NAV of the Fund calculated on a daily basis.

172

AmIslamic Growth



− A portfolio of Shariah-compliant equity instruments;

− A portfolio of Shariah-compliant CIS; and

−

Fixed

Equity CIS income


RM RM RM RM

1.10.2019 to 31.3.2020

Gross dividend income 137,684 20,389 - 158,073

Profit income - - 27,800 27,800

Net loss from Shariah-compliant

investments:

- Financial assets at FVTPL (1,363,626) (36,660) - (1,400,286)

Total segment investment (loss)/gain for the financial period (1,225,942) (16,271) 27,800 (1,214,413)

1.10.2018 to 31.3.2019

Gross dividend income 118,136 - - 118,136

Profit income - - 33,667 33,667



- Financial assets at FVTPL (1,008,428) 8,469 - (999,959)

Total segment investment (loss)/gain for the financial period (890,292) 8,469 33,667 (848,156)













is 0.79 times (2019: 0.70 times).

173

AmIslamic Growth


Fixed

Equity CIS income


RM RM RM RM

31.3.2020


Dividends receivable 61,372 - - 61,372

Amount owing from

brokers 2,850,038 - - 2,850,038

Deposit with financial

institution - - 600,042 600,042 Total segment assets 11,398,325 1,104,229 600,042 13,102,596

Amount owing to financial

institutions 2,487,856 - - 2,487,856 Total segment assets 2,487,856 - - 2,487,856

30.9.2019


Dividends receivable 23,118 4,199 - 27,317

Deposit with financial

institution - - 1,000,081 1,000,081 Total segment assets 9,611,950 1,195,583 1,000,081 11,807,614

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM

Net reportable segment investment loss (1,214,413) (848,156)

Less: Expenses (180,294) (174,558)


Less: Income tax (1,134) (318) Net loss after tax (1,395,841) (1,023,032)







174

AmIslamic Growth


31.3.2020 30.9.2019

RM RM


Amount due from Manager 9,738 12,484

Cash at banks 923,022 1,182,222 Total assets of the Fund 14,035,356 13,002,320

Total segment liabilities 2,487,856 -


Amount due to Trustee 616 595

Sundry payables and accrued expenses 8,815 12,732 Total liabilities of the Fund 2,513,181 30,339




RM % RM %


Macquarie Capital Securities

(Malaysia) Sdn. Bhd. 5,905,386 28.84 20,091 28.07


Berhad 1,828,308 8.93 6,072 8.49

CGS–CIMB Securities Sdn.

Bhd 1,003,307 4.90 4,254 5.95


Sdn. Bhd 827,308 4.04 2,991 4.18

KAF Seagroatt & Campbell

Securities Sdn Bhd 735,446 3.59 2,570 3.59


Berhad 620,494 3.03 2,413 3.37


Berhad 584,192 2.85 2,033 2.84

Alliance Investment Bank Berhad 203,932 1.00 710 0.99

RHB Investment Bank Berhad 52,159 0.25 181 0.25

AmFunds Management Berhad 4,199 0.03 - -

20,475,757 100.00 71,565 100.00

*







175

AmIslamic Growth

17. TRANSACTIONS WITH BROKERS AND FINANCIAL INSTITUTIONS (CONT’D.)


(a) Market risk

(i) Price risk

(ii) Profit rate risk



Profit rate risk will affect the value of the Fund's Shariah-compliant investments,

given the profit rate movements, which are influenced by regional and local



changes in market risk factors such as equity prices, foreign exchange rates, profit

rates and commodity prices.


adverse price movements, the Fund might endure potential loss on its quoted

Shariah-compliant investments. In managing price risk, the Manager actively

monitors the performance and risk profile of the investment portfolio.








The above transaction values were in respect of Shariah-compliant listed securities and CIS.

Transactions in CIS do not involve any commmission or brokerage.



compliance risk.

176

AmIslamic Growth


(b) Credit risk

(c) Liquidity risk


(e) Regulatory risk

(f) Management risk

Credit risk is the risk that the counterparty to a financial instrument will cause a

financial loss to the Fund by failing to discharge an obligation. Credit risk applies to

Islamic short-term deposits and dividends receivable. The issuer of such instruments

may not be able to fulfill the required profit payments or repay the principal invested or

amount owing. These risks may cause the Fund’ Shariah-compliant investments to

fluctuate in value.







the Fund could be required to pay its liabilities or redeem its units earlier than

expected. The Fund maintains sufficient level of liquid assets, after consultation with

the Trustee, to meet anticipated payments and cancellations of units by unitholders.

Liquid assets comprise of deposits with licensed financial institutions and other

instruments, which are capable of being converted into cash within 5 to 7 days. The

Fund’s policy is to always maintain a prudent level of liquid assets so as to reduce

liquidity risk.





the securities of any single issuer is diversified and managed based on

internal/external ratings.



The Fund’s financial liabilities have contractual maturities of not more than six months.

177

AmIslamic Growth








compliance.

178

AmIslamic Growth





17 May 2020

I, Goh Wee Peng for and on behalf of the Manager, AmFunds Management Berhad, for

AmIslamic Growth (the “Fund”) do hereby state that in the opinion of the Manager, the

accompanying condensed statement of financial position, condensed statement of






GOH WEE PENG


179

Trustee’s Report



AMISLAMIC GROWTH


(a)

(b)

Yours faithfully



27 May 2020

We, AMANAHRAYA TRUSTEES BERHAD, have acted as Trustee for AMISLAMIC GROWTH

for the six months financial period ended 31 March 2020. In our opinion, AMFUNDS

MANAGEMENT BERHAD, the Manager, has operated and managed AMISLAMIC GROWTH

in accordance with the limitations imposed on the investment powers of the management

company under the Deed, securities laws and the applicable Guidelines on Unit Trust Funds

for the six months financial period ended 31 March 2020.


requirements; and


regulatory requirements.



180

181

MANAGER’S REPORT

Dear Unitholders,

We are pleased to present you the Manager’s report and the unaudited accounts of AmOasis Global Islamic Equity (“Fund”) for the financial period from 1 October 2019 to 31 March 2020.


Name AmOasis Global Islamic Equity (“Fund”)

Category/ Type

Feeder Fund (Global Islamic equity) / Capital Growth

Name of Target Fund

Oasis Crescent Global Equity Fund

Objective The Fund seeks to achieve moderate capital and income* appreciation over a medium to long-term by investing in shares of global Shariah-compliant companies.

Note: *The income could be in the form of units or cash.Any material change to the investment objective of the Fund would require UnitHolders’ approval.

Duration The Fund was established on 21 April 2006 and shall exist for as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue. In some circumstances, the unitholders can resolve at a meeting to terminate AmOasis Global Islamic Equity.


Dow Jones Islamic Market Index (“DJIM”) (obtainable from www.aminvest.com)

Note: The risk profile of the performance benchmark is not the same as the risk profile.

The Dow Jones Islamic Market Index (the “Index”) is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by AmFunds Management Berhad. S&P® is a registered trademark of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); AmOasis Global Islamic Equity are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices makes no representation or warranty, express or implied, to the owners of the AmOasis Global Islamic Equity or any member of the public regarding the advisability of investing in securities generally or in AmOasis Global Islamic Equity particularly or the ability of the Dow Jones Islamic Market Index to track general market performance. S&P Dow Jones Indices’ only relationship to AmFunds Management Berhad with respect to the Dow Jones Islamic Market Index is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The Dow Jones Islamic Market Index is determined, composed and calculated by S&P Dow Jones Indices without regard to AmFunds Management Berhad or the AmOasis Global Islamic Equity. S&P Dow Jones Indices have no obligation to take the needs of AmFunds Management Berhad or the owners of AmOasis Global Islamic Equity into consideration in determining, composing or calculating the Dow Jones Islamic Market Index. S&P Dow Jones Indices are not responsible for and have

http://www.aminvest.com/

182

not participated in the determination of the prices, and amount of AmOasis Global Islamic Equity or the timing of the issuance or sale of AmOasis Global Islamic Equity or in the determination or calculation of the equation by which AmOasis Global Islamic Equity is to be converted into cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices have no obligation or liability in connection with the administration, marketing or trading of AmOasis Global Islamic Equity. There is no assurance that investment products based on the Dow Jones Islamic Market Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.


Income distribution (if any) is paid at least once a year.




No of units held


No of units held


5,000 and below 111,546 37 111,546 37

5,001-10,000 299,796 43 334,881 48

10,001-50,000 936,431 43 1,121,923 51

50,001-500,000 1,038,063 12 1,436,957 16

500,001 and above 6,645,831 3 6,625,345 3




As at 31.3.2020

%

FY 2019

%

FY 2018

%

FY 2017

%

Foreign collective investment scheme 96.28 97.55 96.80 98.94

Money market deposit 3.31 2.59 1.39 2.60

Cash, other assets & liabilities 0.41 -0.14 1.81 -1.54

Total 100.00 100.00 100.00 100.00


183

Performance Details

Performance details of the Fund for the financial years ended 30 September are as follows:

Half year ended

31.3.2020

FY 2019

FY 2018

FY 2017

Net asset value (RM) 7,714,172* 8,777,213 10,292,802 12,762,042

Units in circulation 9,031,667* 9,630,652 10,983,210 13,165,181

Net asset value per unit (RM) 0.8541* 0.9114 0.9371 0.9694

Highest net asset value per unit (RM) 1.0002* 0.9386 0.9791 1.2117

Lowest net asset value per unit (RM) 0.7817* 0.8071 0.8494 0.9095

Benchmark performance (%) -5.88 2.42 10.18 18.01

Total return (%)(1) -6.29 -2.31 2.89 6.58

- Capital growth (%) -6.29 -2.74 -3.12 -18.23

- Income distribution(%) - 0.43 6.01 24.81

Gross distribution (sen per unit) - 0.40 5.83 30.00

Net distribution (sen per unit) - 0.40 5.83 30.00



* Above prices and net asset value per unit are not shown as ex- distribution.

Note: (1) Total return is the actual/annualised return of the Fund for the respective

financial years computed based on the net asset value per unit and net of allfees.

(2) Management expense ratio (“MER”) is calculated based on the total fees andexpenses incurred by the Fund divided by the average fund size calculatedon a daily basis. The MER increased by 0.15% as compared to 0.30% perannum for the financial year ended 30 September 2019 mainly due todecrease in average fund size.

(3) Portfolio turnover ratio (“PTR”) is calculated based on the average of the totalacquisitions and total disposals of investment securities of the Fund dividedby the average fund size calculated on a daily basis. The PTR decreased by0.03 times (30.0%) as compared to 0.10 times for the financial year ended 30September 2019 mainly due to decrease in investing activities.

(Forward)

184


AmOasis Global Islamic Equity(a)

% DJIM(b)

%

One year -3.90 -0.32

Three years -2.80 3.69

Five years -0.02 7.26

Ten years 3.42 8.85

Annual Total Return


AmOasis Global Islamic Equity(a)

% DJIM(b)

%

2019 -2.31 2.42

2018 2.89 10.18

2017 6.58 18.01

2016 -1.87 5.85

2015 14.72 24.30

(a) Source: Novagni Analytics and Advisory Sdn Bhd.(b) The Dow Jones Islamic Market Index (“DJIM”).

(obtainable from www.aminvest.com)

The Fund performance is calculated based on the net asset value per unit of the Fund. Average total return of the Fund and its benchmark for a period is computed on the absolute return for that period annualised over one year.


Fund Performance

For the financial period under review, the Fund registered a negative return of 6.29% which was entirely capital growth in nature.

Thus, the Fund’s negative return of 6.29% has underperformed the benchmark’s negative return of 5.88% by 0.41%.

As compared with the financial year ended 30 September 2019, the net asset value (“NAV”) per unit of the Fund decreased by 6.29% from RM0.9114 to RM0.8541, while units in circulation decreased by 6.22% from 9,630,652 units to 9,031,667 units.

The line chart below shows comparison between the annual performances of AmOasis Global Islamic Equity and its benchmark, DJIM, for the financial years ended 30 September.

(Forward)

185


Performance of the Target Fund

Fund Performance review of the Target Fund - Oasis Crescent Global Equity Fund (“the Target Fund”)

Returns in USD, Net-of-Fees, Gross of Non Permissible Income Source: Oasis Research; Bloomberg: December 2000 – March 2020

Returns in USD, Net-of-Fees, Gross of Non Permissible Income Source: Oasis Research; Bloomberg: December 2000 – March 2020

We deliver better downside protection than the markets and our peers on the back of our meticulous and thorough investment process, which incorporates stringent share selection criteria and ensures that we buy high quality undervalued streams of cash flows. The Oasis in-house global research capacity also provides us with a competitive edge in analysing any company from a fundamental, qualitative, and technical perspective. The consistent application of this investment philosophy since inception, has contributed to significant value creation for our clients over the long term.

-3.0

2.0

7.0

12.0

17.0

22.0

27.0

Tota

l Ret

urn

(%

)

2015 2016 2017 2018 2019

Fund 14.72 -1.87 6.58 2.89 -2.31

Benchmark 24.30 5.85 18.01 10.18 2.42


Since Inception

Annualised

Oasis Crescent Global Equity Fund -9.6 -2.1 -0.4 2.7 3.9 5.8

Average Shariah Global Equity Peer Group -11.4 0.3 1.2 2.6 2.6 1.0

% Growth 7

Year

% Growth 5

Year

% Growth 10

Year

% Growth 1

Year

% Growth 3

Year Returns

OASIS CRESCENT

GLOBAL EQUITY FUND

AVG SHARI’AH GLOBAL

EQUITY PEER GP

139 93 -2.8 -3.7 76 √

NUMBER OF

BULL MONTHS

NUMBER OF

BEAR MONTHS

AVERAGE RETURN IN A BEAR MONTH AVERAGE

DOWNSIDE

CAPTURED

TARGET

ACHIEVED (%)

186


Strategies and Policies of the Target Fund

The objective of the Oasis Crescent Global Equity Fund is to achieve medium to long-term growth of capital and income by investing in shares, including preference shares, of companies and shares or units in collective investment schemes and Real Estate Investment Trusts (“REITS”), listed and traded on the international stock exchanges and on markets, set out in the Prospectus and that are Shari’ah compliant according to the guidelines set by the Investment Manager’s Shari’ah Advisory Board. The Oasis Crescent Global Equity Fund’s objective is to protect the real wealth and improve the standard of living of all investors. The Target Fund targets to provide attractive risk adjusted returns to our clients, which is driven by our instrument selection based on quality and value and ensuring that the portfolio is appropriately diversified. One of the key attributes of our philosophy is to provide significant downside protection relative to the market based on our quality and valuation selection criteria. This is one of the key drivers of outperformance and wealth creation over the long term.

We have maintained our investment philosophy of investing in high quality companies which have strong competitive advantages and the ability to leverage off those competitive advantages to deliver a higher level of sustainable Return on Equity (ROE) through the economic cycle. We believe that companies which have healthy balance sheets and strong cash flows have the ability to sustain themselves during challenging economic environments while delivering real earnings growth over the long-term.

Our portfolio trades at a significant discount to the global equity market across various measures and provides sustainably higher ROE through the economic cycle. This should result in real wealth creation for our clients over the long term.

This current market volatility is ideal for active managers and the Oasis Crescent Global Equity Fund is well positioned due to its focus on the best quality companies with strong balance sheets and its high exposure to outperforming sectors including Technology, Telecommunications and Healthcare. We are also taking advantage of opportunities to pick additional high quality companies which are trading at significant discounts to their intrinsic value in this current environment. Our strong positioning is reflected in the portfolio quality and valuation characteristics of the Oasis Crescent Global Equity Fund relative to the DJIM Index. The Target Fund is invested in companies that are global leaders in their sectors, generate strong free cash flows and have superior management teams who are efficient capital allocators that pursue value enhancing opportunities. Oasis has successfully navigated turbulent economic cycles since its inception and with our strong focus on downside protection, we are confident that our portfolio is well positioned to provide attractive risk adjusted performance for our clients over the long-term.

187

Returns in USD, Net-of-Fees, Gross of Non Permissible Income Source: Oasis Research; Inet; Bloomberg: December 2000 – March 2020

Strategies and Policies of the Fund

For the financial period under review, the Fund strategy was to invest a minimum of 95% of the Fund’s NAV in the share class denominated in USD of the Oasis Crescent Global Equity Fund (Target Fund).

Portfolio Structure


As at 31.3.2020

%

As at 30.9.2019

% Changes

%

Foreign collective investment scheme 96.28 97.55 -1.27

Money market deposit 3.31 2.59 0.72

Cash, other assets & liabilities 0.41 -0.14 0.55

Total 100.00 100.00

For the financial period under review, the Fund invested 96.28% in the foreign collective investment scheme and the balance of 3.72% in liquid assets.




State of Affairs





188

Market Review

The rapid spread of the Coronavirus (Covid-19) declared a pandemic on 11 March 2020 by the World Health Organization (WHO), is resulting in human tragedy across the world. The extent to which the virus will spread, both between and within countries remains unclear, and the duration and impact are highly uncertain. Efforts to control the outbreak of the virus, such as isolation, lockdowns and widespread closure are resulting in a substantial reduction in economic growth.

The spread of Covid-19 profoundly affected global markets in the first quarter of 2020. Many countries are facing a multi-layered crisis comprising of a health shock, domestic economic disruptions, declining external demand, capital flow reversals, and a collapse in commodity prices. The Great Lockdown, as dubbed by the International Monetary Fund (IMF), is projected to be more severe than both the Great Depression of 1930 and the Global Financial Crisis (GFC) a decade ago. The Target Fund expects the global economy to contract by 3.0% in 2020, revising sharply the expansion of 3.3% projected in January. However, it has revised up the 2021 growth projections to 5.8% from 3.4%, based on the assumptions that the pandemic fades in the second half of 2020 and as economic activity normalises, supported by policy measures.

Governments and central banks have taken exceptional steps to prevent a deeper and longer-lasting economic crisis from unfolding. Most central banks around the world have cut interest rates to around or below zero to mitigate the effect of the coronavirus. The United States (US) Federal Reserve launched an unprecedented range of emergency programs to support as much as USD2.3t in loans. The US is providing about 10% of its Gross Domestic Product (GDP) in support and Germany about 4.5%, while Japan’s program is worth about 20% of GDP. These actions have lifted confidence and contributed to limit the damage to the financial markets and therefore ensuring that the economy is better placed to recover.

Source: IMF, WEO, April 2020, Bloomberg Economics, Oasis Research; Bloomberg: March 2020

Market Outlook

The unprecedented impact of the Covid-19 pandemic and the uncertainty around the damage to household and corporate income has created a tough environment for global equity markets in Q12020. The key uncertainty is to what extent the loss in economic activity due to the Covid-19 recession will result in the deterioration of corporate profits and balance sheets. We will not see much of the impact on corporate profits in the Q12020 results as most of the curtailment in economic activity to limit the spread of the Covid-19 pandemic commenced towards the end of this quarter. The MSCI All Country World Index declined by 20.9% over the quarter with the Energy and Financial sectors leading the decline at 44.6% and 31.9% respectively while the global Technology and Telecommunication sectors outperformed and declined by 13.1% and 17.4% respectively. Healthcare was the top performing sector declining by 11.3% over the quarter. Looking at the major markets, the S&P 500 declined by 19.6%, the Nikkei declined by 19.3% while Europe underperformed with the FTSE100 declining by 24.0% and the DAX by 25.0% and the MSCI Emerging Markets declined by 23.6%.

As we look to the rest of 2020 we will start seeing the full impact of this recession and if economic data stabilise and we start seeing the impact of the exceptional steps taken by Governments and central banks in terms of fiscal and monetary policy, we could see flows moving back to global equity again.

Source: Oasis Research; Bloomberg: March 2020

189



1. Seohan Soo resigned as a Non-Independent, Non-Executive Director forAmFunds Management Berhad and AmIslamic Funds Management Sdn Bhdwith effect from 1st January 2020.


17 May 2020

AmOasis Global Islamic Equity


AS AT 31 MARCH 2020

31.3.2020 30.9.2019

(unaudited) (audited) Note RM RM

ASSETS

Shariah-compliant Investment 4 7,427,500 8,562,224

Amount due from Manager 5(a) 32,154 -

Deposit with financial institution 6 255,018 227,018

Cash at banks 5,658 4,233 TOTAL ASSETS 7,720,330 8,793,475

LIABILITIES

Amount due to Manager 5(b) 527 1,278




EQUITY


Retained earnings 9(b)(c) 3,414,720 3,916,908 TOTAL EQUITY 9 7,714,172 8,777,213





190




1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019 Note RM RM


Distribution income 31,442 51,699


Rebate fee income from Target Fund Manager 8,520 8,982

Net loss from Shariah-compliant investment:


loss (“FVTPL”) 8 (525,629) (536,423)

(482,374) (471,580)

EXPENDITURE

Manager’s fee 5 (2,272) (2,516)

Trustee’s fee 7 (3,060) (3,240)


Tax agent’s fee (1,900) (1,874)

Custodian’s fee (4,095) (2,234)


(19,814) (19,468)



Net loss after tax (502,188) (491,048)

Other income after tax - -

Total comprehensive loss for the financial period (502,188) (491,048)


Realised income 106,323 93,191

Unrealised loss (608,511) (584,239)

(502,188) (491,048)


191





capital earnings equity Note RM RM RM

At 1 October 2018 6,069,549 4,223,253 10,292,802

Total comprehensive loss for

the financial period - (491,048) (491,048)


Cancellation of units (1,260,776) - (1,260,776)Balance at 31 March 2019 5,322,962 3,732,205 9,055,167

At 1 October 2019 4,860,305 3,916,908 8,777,213

Total comprehensive loss for

the financial period - (502,188) (502,188)

Creation of units 9(a) 353,978 - 353,978

Cancellation of units 9(a) (914,831) - (914,831)Balance at 31 March 2020 4,299,452 3,414,720 7,714,172


192




1.8.2019 to 1.8.2018 to

31.3.2020 31.1.2019

RM RM



Proceeds from sale of Shariah-compliant investment 899,842 1,253,866

Distribution received 31,442 51,699

Rebate fee income received 8,520 8,982




Tax agent’s fee paid (3,800) -

Custodian’s fee paid (4,095) (2,234)


Purchase of Shariah-compliant investment (290,748) (348,580)

Net cash generated from operating and

investing activities 622,432 945,766


Proceeds from creation of units 321,824 536,513

Payments for cancellation of units (914,831) (1,539,246)

Distribution paid - (819)

Net cash used in financing activities (593,007) (1,003,552)

NET INCREASE/(DECREASE) IN CASH AND

CASH EQUIVALENTS 29,425 (57,786)


BEGINNING OF FINANCIAL PERIOD 231,251 356,585

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL PERIOD 260,676 298,799


Deposit with financial institution 255,018 294,026

Cash at banks 5,658 4,773

260,676 298,799


193







The financial statements were authorised for issue by the Chief Executive Officer of the Manager

on 17 May 2020.

AmOasis Global Islamic Equity (“the Fund”) was established pursuant to a Deed dated 30 March

2006 as amended by Deeds Supplemental thereto (“the Deed”), between AmFunds Management


The Fund was set up with the objective of providing investors with moderate capital and income

appreciation over a medium to long-term period by investing in shares of Shariah-compliant

companies globally. Being a feeder fund, a minimum of 95% of the Fund’s net asset will be

invested in the Oasis Crescent Global Equity Fund (“Target Fund”), which is a separate Shariah-

compliant unit trust fund managed by Oasis Global Management Company (Ireland) Limited

(“Target Fund Manager”). As provided in the Deed, the “accrual period” or financial year shall end

on 30 September and the units in the Fund were first offered for sale on 21 April 2006.



Standards 134: Interim Financial Reporting (“MFRS 134”) as issued by the Malaysian Accounting

Standards Board (“MASB”) and Securities Commission Malaysia’s Guidelines on Unit Trust Funds

in Malaysia.



The Fund will adopt the following MFRSs and Amendments to MFRSs when they become effective

in the respective financial periods and these MFRSs and Amendments to MFRSs are not expected

to have any material impact to the financial statements of the Fund upon initial application.

194




Effective for

financial periods












(i) Distribution income

(ii) Profit income

(ii) Gain or loss on disposal of investment

3.2 Income tax

Income is recognised to the extent that it is probable that the economic benefits will flow to the

Fund and the income can be reliably measured. Income is measured at the fair value of

consideration received or receivable.

Profit income on Islamic short-term deposits is recognised on an accrual basis using the

effective profit method.

On disposal of Shariah-compliant investment, the net realised gain or loss on disposal is

measured as the difference between the net disposal proceeds and the carrying amount

of the Shariah-compliant investment. The net realised gain or loss is recognised in profit

or loss.

Current tax assets and liabilities are measured at the amount expected to be recovered from

or paid to the tax authorities. The tax rates and tax laws used to compute the amount are

those that are enacted or substantively enacted at the reporting date.

Distribution income is recognised when the Fund’s right to receive payment is

established.

195



3.2 Income tax (cont’d.)


3.4 Foreign currency transactions



3.6 Distribution


Current taxes are recognised in profit or loss except to the extent that the tax relates to items

recognised outside profit or loss, either in other comprehensive income or directly in equity.

Functional currency is the currency of the primary economic environment in which the Fund

operates that most faithfully represents the economic effects of the underlying transactions.

The functional currency of the Fund is Ringgit Malaysia (“RM”) which reflects the currency in

which the Fund competes for funds, issues and redeems units. The Fund has also adopted

RM as its presentation currency.

Transactions in currencies other than the Fund’s functional currency (foreign currencies) are

recorded in the functional currency using exchange rates prevailing at the transaction dates.

At each reporting date, foreign currency monetary items are translated into RM at exchange

rates ruling at the reporting date. All exchange gains or losses are recognised in profit or loss.

Cash equivalents are short-term, highly liquid Shariah-compliant investment that is readily

convertible to cash with insignificant risk of changes in value.


accounted for as a deduction from realised income. A proposed distribution is recognised as a

liability in the period in which it is approved. Distribution is either reinvested or paid in cash to

the unitholders on the income payment date. Reinvestment of units is based on the NAV per

unit on the income payment date, which is also the time of creation.


classified as equity instruments under MFRS 132 Financial Instruments: Presentation (“MFRS

132”).

196











immediately recognises the difference between the transaction price and fair value (a

“Day 1” profit or loss) in profit or loss provided that fair value is evidenced by a quoted

price in an active market for an identical asset or liability (i.e. Level 1 input) or based on a

valuation technique that uses only data from observable markets. In all other cases, the

difference between the transaction price and model value is recognised in profit or loss

on a systematic and rational basis that reflects the nature of the instrument over its

tenure.

The Fund subsequently measures its Shariah-compliant investment in collective investment

scheme ("CIS") at FVTPL. Distributions earned whilst holding the Shariah-compliant

Investment in CIS is recognised in profit or loss when the right to the payment has been

established. Gains and losses on the Shariah-compliant investment in CIS, realised and

unrealised, are included in profit or loss.

The classification of financial assets depends on the Fund’s business model of managing

the financial assets in order to generate cash flows (“business model test”) and the

contractual cash flow characteristics of the financial instruments (“SPPP test”). The

business model test determines whether cash flows will result from collecting contractual

cash flows, selling the financial assets, or both and the assessment is performed on a

portfolio basis. The SPPP test determines whether the contractual cash flows are solely

for payments of principal and profit and the assessment is performed on a financial

instrument basis.

Financial assets and financial liabilities are recognised when the Fund becomes a party

to the contractual provisions of the instrument. Regular way purchases and sales of

financial assets are recognised using trade date accounting or settlement date

accounting. The method used is applied consistently for all purchases and sales of

financial assets that belong to the same category of financial assets.

All financial assets are recognised initially at fair value, in the case of financial assets not

recorded at FVTPL, transaction costs that are attributable to the acquisition of the

financial asset. All financial liabilities are recognised initially at fair value and, in the case

of financial liabilities not recorded at FVTPL, net of directly attributable transaction costs.

197









These investments are initially recorded at fair value and transaction costs are expensed

in the profit or loss. Subsequent to initial recognition, these investments are remeasured

at fair value. All fair value adjustments are initially recognised through OCI. Debt

instruments at FVOCI are subject to impairment assessment.

Any financial assets that are not measured at amortised cost or FVOCI are measured at

FVTPL. Subsequent to initial recognition, financial assets at FVTPL are measured at fair

value. Changes in the fair value of those financial instruments are recorded in “Net gain

or loss on financial assets at FVTPL”. Profit earned and distribution income elements of

such instruments are recorded separately in “Profit income” and “Distribution income”.

Exchange differences on financial assets at FVTPL are not recognised separately in

profit or loss but are included in net gain or net loss on changes in fair value of financial

assets at FVTPL.

Instruments that qualify for amortised cost or FVOCI may be irrevocably designated as

FVTPL, if doing so eliminates or significantly reduces a measurement or recognition

inconsistency. Equity instruments are normally measured at FVTPL, nevertheless, the

Fund is allowed to irrevocably designate equity instruments that are not held for trading

as FVOCI, with no subsequent reclassification of gains or losses to profit or loss.


(“FVOCI”) if its business model is both to hold the asset to collect contractual cash flows

and to sell the financial asset. In addition, the contractual terms of the financial assets

give rise on specified dates to cash flows that are solely payments of principal and profit

on the outstanding principal.


whose objective is to hold financial assets in order to collect contractual cash flows and

its contractual terms give rise on specified dates to cash flows that are solely payments

of principal and profit on the principal amount outstanding. The Fund includes in this

category deposits with financial institutions, cash at banks, amount due from the Target

Fund Manager, amount due from the Manager and other receivables.

198







-

-

-



-

-

-


assumed an obligation to pay the received cash flows in full without material delay to

a third party under a “pass-through” arrangement; and either:


or



A financial liability is derecognised when the obligation under the liability is discharged,

cancelled or expired. Gains and losses are recognised in profit or loss when the liabilities

are recognised, and through the amortisation process.

The Fund assesses on a forward-looking basis the ECL associated with its financial assets at

amortised cost. The Fund recognises a loss allowance for such losses at each reporting date.

The measurement of ECL reflects:

an unbiased and probability-weighted amount that is determined by evaluating a range of

possible outcomes;


reasonable and supportable information that is available without undue cost or effort at

the reporting date about past events, current conditions and forecasts of future economic

conditions.

Financial liabilities issued by the Fund are classified as financial liabilities at amortised cost,

where the substance of the contractual arrangement results in the Fund having an obligation

either to deliver cash or another financial asset to the holder. After initial measurement,

financial liabilities are subsequently measured at amortised cost using the effective profit

method. Amortised cost is calculated by taking into account any discount or premium on

acquisition and fees or costs that are an integral part of the effective profit rate.

A financial asset (or, where applicable a part of a financial asset or part of a group of

similar financial assets) is derecognised when:

The ECL in respect of financial assets at amortised cost, if any, is recognised in profit or loss.

199



3.13 Financial instruments – expected credit losses (“ECL”) (cont’d.)




The Fund classifies its Shariah-compliant investment as financial assets at FVTPL as the

Fund may sell its Shariah-compliant investment in the short-term for profit-taking or to meet

unitholder’s cancellation of units.

Unrealised gains and losses comprise changes in the fair value of financial instruments for the

period and from reversal of prior period’s unrealised gains and losses for financial instruments

which were realised (i.e. sold, redeemed or matured) during the reporting period.



estimation uncertainty at the reporting date, that have a significant risk of causing a material

adjustment to the carrying amounts of assets and liabilities within the next financial period.

Realised gains and losses on disposals of financial instruments classified at FVTPL are

calculated using the weighted average method. They represent the difference between an

instrument’s initial carrying amount and disposal amount.

The preparation of the Fund’s financial statements requires the Manager to make judgments,

estimates and assumptions that affect the reported amounts of revenues, expenses, assets

and liabilities, and the disclosure of contingent liabilities at the reporting date. However,

uncertainty about these assumptions and estimates could result in outcomes that could

require a material adjustment to the carrying amount of the asset or liability in the future.

Financial assets together with the associated allowance are written off when it has exhausted

all practical recovery efforts and there is no realistic prospect of future recovery. The Fund

may also write-off financial assets that are still subject to enforcement activity when there is no

reasonable expectation of full recovery. If a write-off is later recovered, the recovery is

credited to profit or loss.

For the Shariah-compliant investment in CIS, fair value is determined based on the closing

NAV per unit of the foreign CIS. Purchased cost is the quoted price that the Fund paid when

buying its Shariah-compliant investments. The difference between purchased cost and fair

value is treated as unrealised gain or loss and is recognised in profit or loss. Unrealised gains

or losses recognised in profit or loss are not distributable in nature.

200


4. SHARIAH-COMPLIANT INVESTMENT

31.3.2020 30.9.2019

RM RM


At cost:Foreign CIS 7,362,918 7,889,131

At fair value:Foreign CIS 7,427,500 8,562,224

Details of Shariah-compliant investment are as follows:

Fair value as a

Number Fair Purchased percentage of

Foreign CIS of units value cost NAV

RM RM %

31.3.2020

Oasis Crescent Global EquityFund (“Target Fund”) 63,184 7,427,500 7,362,918 96.28

Excess of fair value over purchased cost 64,582

30.9.2019

Oasis Crescent Global EquityFund (“Target Fund”) 67,621 8,562,224 7,889,131 97.55

Excess of fair value over purchased cost 673,093


31.3.2020 30.9.2019

Note RM RM

(a) Due from Manager

Creation of units (i) 32,154 -

(b) Due to Manager

Manager’s fee payable (ii) 527 1,278

A minimum of 95% of its NAV will be invested in the Target Fund. However, the asset allocation

may be reduced due to creation of units at the point of reporting date. The ratio will be adjusted

back to the minimum level after the reporting period, if need be.

201



(i)

(ii)

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

% p.a. % p.a.

Manager’s fee charged by the Target Fund Manager,

on the NAV of the Target Fund (Note a) 2.00 2.00

Rebate fee from the Target Fund Manager, on

the NAV of the Target Fund (Note b) 0.20 0.20

Manager’s fee charged by the Manager, on the

remaining NAV of the Fund (Note c) 1.80 1.80

Note a)

Note b)

Note c)


31.3.2020 30.9.2019

RM RM

At nominal value:

Short-term deposit with a licensed Islamic bank 255,000 227,000

At carrying value:

Short-term deposit with a licensed Islamic bank 255,018 227,018




As the Fund is investing in the Target Fund, the Manager’s fees were charged as follows:

The Fund’s share of Manager’s fee to the Target Fund Manager has been

accounted for as part of net unrealised changes in fair value of Shariah-

compliant investment in foreign CIS.

The Target Fund Manager has agreed to grant the Fund a fee rebate in the

form of additional units.

The Manager’s fee of the Fund chargeable in the Condensed Statement of

Comprehensive Income relates to the Fund’s NAV other than its investment

in the Target Fund.




202


6. DEPOSIT WITH FINANCIAL INSTITUTION (CONT’D.)

Carrying

value as a

Maturity Nominal Carrying Purchased percentage date Bank value value cost of NAV

RM RM RM %

31.3.2020Short-term deposit with a licensed Islamic bank

01.04.2020 CIMB Islamic

Bank Berhad 255,000 255,018 255,000 3.31

30.9.2019Short-term deposit with a licensed Islamic bank

01.10.2019 CIMB Islamic

Bank Berhad 227,000 227,018 227,000 2.59


8. NET LOSS FROM SHARIAH-COMPLIANT INVESTMENT

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM


– Net realised gain on sale of Shariah-compliant

investment 62,283 48,009

– Net realised gain/(loss) on foreign currency

exchange 20,599 (193)

– Net unrealised loss on changes in fair value

of Shariah-compliant investment (819,398) (469,901)

– Net unrealised gain/(loss) on foreign currency

fluctuation of Shariah-compliant investment

denominated in foreign currency 210,887 (114,338)

(525,629) (536,423)

The normal credit period in the previous financial year and current financial period for Trustee’s fee

payable is one month.

Trustee’s fee is at a rate of 0.07% (2019: 0.07%) per annum on the NAV of the Fund, calculated on

a daily basis.

203


9. TOTAL EQUITY


31.3.2020 30.9.2019

Note RM RM


Retained earnings

− Realised income (b) 3,350,138 3,243,815

− Unrealised gain (c) 64,582 673,093

7,714,172 8,777,213

(a) Unitholders' capital/units in circulation

Number of Number of

units RM units RM

At beginning of the


Creation during the

financial period/year 384,239 353,978 714,247 643,423

Distribution reinvested - - 42,147 38,354


financial period/year (983,224) (914,831) (2,108,952) (1,891,021)

At end of the financial

period/year 9,031,667 4,299,452 9,630,652 4,860,305

(b) Realised - distributable

31.3.2020 30.9.2019

RM RM


Net realised income for the financial period/year 106,323 130,372

Distributions out of realised income - (38,354)

At end of the financial period/year 3,350,138 3,243,815

(c) Unrealised - non-distributable

31.3.2020 30.9.2019

RM RM

At beginning of the financial period/year 673,093 1,071,456

Net unrealised loss for the financial period/year (608,511) (398,363)

At end of the financial period/year 64,582 673,093

30.9.201931.3.2020

204



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



AmInvestment Bank Berhad

AMMB Holdings Berhad


as disclosed in its financial ultimate holding company of the Manager

statements

11. INCOME TAX

1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

RM RM



Tax effects of:



Restriction on tax deductible expenses

for unit trust fund 1,363 1,680



future financial periods 151 187

Tax expense for the financial period - -

Holdings company of the Manager

A reconciliation of income tax expense applicable to net loss before tax at the statutory income tax

rate to income tax expense at the effective income tax rate of the Fund is as follows:

Pursuant to Schedule 6 of the Income Tax Act 1967, provided that the exemption shall not apply to

the profit paid or credited to a unit trust that is a wholesale fund which is a money market fund.

Profit income earned by Funds other than other money market fund is exempted from tax.



Ultimate holding company of the Manager


September 2019.

205


12. DISTRIBUTION

13.


1.10.2019 to 1.10.2018 to

31.3.2020 31.3.2019

% p.a. % p.a.



Fund’s other expenses 0.33 0.30

Total MER 0.45 0.42



16.

Target Fund ManagerRM %

Oasis Global Management Company (Ireland) Ltd 1,180,734 100.00

Details of transactions with the Target Fund Manager for the financial period ended 31 March 2020

are as follows:

Transaction value

As stated in Note 1, the Fund is a feeder fund whereby a minimum of 95% of the Fund’s NAV will

be invested in the Target Fund.

As the Fund operates substantially as a feeder fund which invests primarily in the Target Fund, it is

not possible or meaningful to classify its Shariah-compliant investment by separate business or

geographical segments.

TRANSACTIONS WITH THE TARGET FUND MANAGER

The PTR of the Fund, which is the ratio of average total acquisitions and disposals of Shariah-

compliant investment to the average NAV of the Fund calculated on a daily basis, is 0.07 times

(2019: 0.07 times).

No distribution was declared by the Fund for the financial periods ended 31 March 2020 and 31

March 2019.

MANAGEMENT EXPENSE RATIO (“MER”)

The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by the Fund

to the average NAV of the Fund calculated on a daily basis.

206


16.


(a) Market risk

(i) Price risk

(ii) Profit rate risk

(iii) Currency risk


changes in market risk factors such as equity prices, profit rates, foreign exchange

rates and commodity prices.



compliant investments in the Target Fund. In managing price risk, the Manager

actively monitors the performance and risk profile of the investment portfolio.

Domestic profit rate on deposits and placements with licensed financial


Profit rate risk will affect the value of the Fund’s Shariah-compliant investments,

given the profit rate movements, which are influenced by regional and local


Currency risk is associated with the Fund’s assets and liabilities that are

denominated in currencies other than the Fund’s functional currency. Currency

risk refers to the potential loss the Fund might face due to unfavorable

fluctuations of currencies other than the Fund’s functional currency against the

Fund’s functional currency.


single issuer risk, regulatory risk, country risk, management risk and non-

compliance/Shariah non-compliance risk.


said risks, careful selection of Shariah-compliant investment coupled with stringent




TRANSACTIONS WITH THE TARGET FUND MANAGER (CONT’D.)

There was no transaction with financial institutions related to the Manager, during the

financial period.

The above transactions were in respect of Shariah-compliant investment in CIS.

Transactions in this Shariah-compliant investment do not involve any commission or

brokerage.

207



(a) Market risk (cont’d.)

(iii) Currency risk (cont’d.)

31.3.2020 30.9.2019

Assets denominated RM % of RM % of

in USD equivalent NAV equivalent NAV

Shariah-compliant

investment 7,427,500 96.28 8,562,224 97.55

Cash at bank 1,704 0.02 837 0.01

7,429,204 96.30 8,563,061 97.56

(b) Credit risk

(c) Liquidity risk

The net unhedged financial assets of the Fund that are not denominated in

Fund’s functional currency are as follows:


institutions with sound rating of P1/MARC-1 and above. Cash at bank is held for

liquidity purposes and is not exposed to significant credit risk.

The Fund, as a feeder fund, invests significantly all its assets in the Target Fund. The

Target Fund manages the risk by setting internal counterparty limits and undertaking

internal credit evaluation to minimise such risk.

Credit risk is the risk that the counterparty to a financial instrument will cause a

financial loss to the Fund by failing to discharge an obligation. Credit risk applies to

Islamic short-term deposits and distributions receivable. The issuer of such

instruments may not be able to fulfill the required profit payments or repay the

principal invested or amount owing. These risks may cause the Fund’s Shariah-

compliant investment to fluctuate in value.









the Fund could be required to pay its liabilities or redeem its units earlier than

expected. This is also the risk of the Fund experiencing large redemptions, when the

Investment Manager could be forced to sell large volumes of its holdings at

unfavorable prices to meet redemption requirements.

208




(e) Regulatory risk

(f) Country risk

(g) Management risk

(h) Non-compliance/Shariah non-compliance risk

The Fund, as a feeder fund, invests significantly all its assets in the Target Fund. The

Target Fund is restricted from investing in securities issued by any issuer in excess of

a certain percentage of its NAV. Under such restriction, the risk exposure to the

securities of any single issuer is diversified and managed by the Target Fund Manager

based on internal/external ratings.



The specific risks associated to the Target Fund include market risk, securities risk,

emerging market risk, settlement and credit risks, regulatory and accounting

standards risks, political risk, custody risk and liquidity risk.





compliant investment of the Fund when the Fund is forced to rectify the non-

compliance.



The risk of price fluctuation in foreign securities may arise due to political, financial

and economic events in foreign countries. If this occurs, there is a possibility that the

NAV of the Fund may be adversely affected.

209






17 May 2020

GOH WEE PENG


I, Goh Wee Peng, for and on behalf of the Manager, AmFunds Management Berhad, for

AmOasis Global Islamic Equity (the “Fund”) do hereby state that in the opinion of the Manager,

the accompanying condensed statement of financial position, condensed statement of






210

Trustee’s Report



AMOASIS GLOBAL ISLAMIC EQUITY


(a)

(b)

Yours faithfully





8 May 2020

We, AMANAHRAYA TRUSTEES BERHAD, have acted as Trustee of AMOASIS GLOBAL

ISLAMIC EQUITY for the six months financial period ended 31 March 2020. In our opinion,

AMFUNDS MANAGEMENT BERHAD, the Manager, has operated and managed AMOASIS

GLOBAL ISLAMIC EQUITY in accordance with the limitations imposed on the investment powers

of the management company under the Deed, securities laws and the applicable Guidelines on

Unit Trust Funds for the six months financial period ended 31 March 2020.


requirement;

Creation and cancellation of units have been carried out in accordance with the Deed

and any regulatory requirement; and

211

212

REPORT OF THE SHARIAH ADVISER TO THE UNITHOLDERS

of AmIttikal, AmBon Islam, AmAl-Amin, AmIslamic Balanced, AmIslamic Growth and AmOasis Global Islamic Equity

For The Financial Period from 1 October 2019 to 31 March 2020

We have acted as the Shariah Adviser of AmIttikal, AmBon Islam, AmAl-Amin, AmIslamic

Balanced, AmIslamic Growth and AmOasis Global Islamic Equity. Our responsibility is to ensure

that the procedures and processes employed by AmIslamic Funds Management Sdn Bhd and that

the provisions of the Arab-Malaysian Master Trust Deed dated 30 October 2001 (for AmBon Islam,

AmAl-Amin, AmIslamic Balanced, AmIslamic Growth and AmOasis Global Islamic Equity), Third

Supplemental Deed dated 13 January 1999 (for AmIttikal), and their supplemental deeds (if any) are

in accordance with Shariah principles.

In our opinion, AmIslamic Funds Management Sdn Bhd has managed and administered AmIttikal,

AmBon Islam, AmAl-Amin, AmIslamic Balanced, AmIslamic Growth and AmOasis Global

Islamic Equity in accordance with Shariah principles and complied with applicable guidelines,

rulings or decisions issued by the Securities Commission (SC) pertaining to Shariah matters. We

confirm that the investment portfolio of the Fund comprises securities and/or instruments which have

been classified as Shariah compliant by the Shariah Advisory Council (SAC) of the SC and/or

Shariah Advisory Council (SAC) of Bank Negara Malaysia (BNM), where applicable. For securities

and/or instruments which are not classified as Shariah-compliant by the SAC of the SC and/or SAC

of BNM, we have determined that such securities and/or instruments are in accordance with Shariah

principles and have complied with the applicable Shariah guidelines.

For Amanie Advisors Sdn Bhd

………………………………………….. Datuk Dr Mohd Daud Bakar Executive Chairman

18 May 2020

213

DIRECTORY

Head Office 9th & 10th Floor, Bangunan AmBank Group 55, Jalan Raja Chulan, 50200 Kuala Lumpur Tel: (03) 2032 2888 Facsimile: (03) 2031 5210 Email: [email protected]

Postal Address AmFunds Management Berhad P.O Box 13611, 50816 Kuala Lumpur

For enquiries about this or any of the other Funds offered by AmFunds Management Berhad Please call 2032 2888 between 8.45 a.m. to 5.45 p.m. (Monday to Thursday),

Friday (8.45 a.m. to 5.00 p.m.)

03 2032 2888 | aminvest.com | [email protected] m

AmFunds Management Berhad 198601005272 (154432-A)

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