KENANGA INVESTORS BERHAD

INFORMATION MEMORANDUM

IN RESPECT OF THE

KENANGA ISLAMIC CASH FUND

Manager: Kenanga Investors Berhad (353563-P)

Trustee: CIMB Islamic Trustee Berhad (167913-M)

This Information Memorandum is dated 11 June 2014

Investors are advised to read and understand the contents of this Information Memorandum. If in doubt, please consult a professional adviser.

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TABLE OF CONTENTS

Page No.

RESPONSIBILITY STATEMENTS AND STATEMENTS OF DISCLAI MER IV

CORPORATE DIRECTORY V

DEFINITION 1

CHAPTER 1: KEY DATA 5

CHAPTER 2: RISK FACTORS 9

CHAPTER 3: FUND INFORMATION 11

3.1 Investment Objective 11

3.2 Investment Policy and Strategy 11

3.3 Asset Allocation 11

3.4 Benchmark 11

3.5 Risk Management 12

3.6 Permitted Investments 12

3.7 Investment Restrictions and Limits 12

3.8 Income Distribution and Distribution Options 13

3.9 Valuation of the Assets of the Fund 13

3.10 Shariah Investment Guidelines adopted by IBFIM and Cleansing/ Purification Process for the Fund 14

CHAPTER 4: FEES, CHARGES AND EXPENSES 15

4.1 Sales Charge 15

4.2 Redemption Charge 15

4.3 Switching Fee 15

4.4 Management Fee 15

4.5 Trustee Fee 15

4.6 Other Expenses Directly Related to the Fund 15

4.7 Reduction / Waiver of Fees 16

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CHAPTER 5: TRANSACTION INFORMATION 17

5.1 Pricing Policy 17

5.2 Valuation Point of the Fund 17

5.3 Illustration on the computation of NAV and how the Management Fee and Trustee Fee are calculated 17

5.4 Subscription of Units 17

5.5 Redemption of Units 18

5.6 Switching of Units 18

5.7 Periodic Reporting to Unit Holders 19

CHAPTER 6: MANAGEMENT COMPANY 20

6.1 The Manager 20

6.2 Functions of the Manager 20

6.3 Financial Position of the Manager 20

6.4 Board of Directors 21

6.5 The Investment Committee 23

6.6 The Management Team 23

6.7 The Investment Teams 25

6.8 Material Litigation 27

6.9 Conflict of Interest 28

6.10 Retirement and Removal of Manager 28

6.11 External Fund Manager 29

CHAPTER 7: TRUSTEE 31

7.1 Background of the Trustee 31

7.2 Financial position of the Trustee 31

7.3 Experience in Trustee Business 31

7.4 The Board of Directors 32

7.5 Key Personnel of the Trustee 32

7.6 Trustee’s Declaration 33

7.7 Duties and responsibilities of the Trustee 33

7.8 Trustee’s Statement of Responsibility 33

7.9 Trustee’s Delegate 33

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7.10 Material Litigation & Arbitration 34

7.11 Retirement and Removal of the Trustee 34

CHAPTER 8: SHARIAH ADVISER 36

8.1 IBFIM 36

8.2 General Information of IBFIM 36

8.3 Experience in Advisory and Services 36

8.4 Roles and Responsibilities of IBFIM as the Shariah Adviser 36

8.5 Profile of the Shariah Team 37

CHAPTER 9: RIGHTS AND LIABILITIES OF UNIT HOLDERS 3 9

9.1 Unit Holders’ Rights 39

9.2 Unit Holders’ Liabilities 39

CHAPTER 10: POWER TO CALL FOR UNIT HOLDERS’ MEETING S 40

10.1 Meetings Directed by the Unit Holders 40

10.2 Meetings Summoned by the Trustee 40

10.3 Meetings Summoned by the Manager 40

10.4 Provisions Governing Unit Holders’ Meetings 40

10.5 Termination of the Fund 42

CHAPTER 11: OTHER INFORMATION 44

11.1 Unclaimed Moneys Policy 44

11.2 Anti Money Laundering Policy 44

11.3 Regulatory Approval 44

11.4 No Guarantee 44

11.5 Enquiries 45

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RESPONSIBILITY STATEMENTS AND STATEMENTS OF DISCLAIMER

This Information Memorandum has been seen and approved by the directors of Kenanga Investors Berhad and they collectively and individually accept full responsibility for the accuracy of all information contained herein and confirm, having made all enquiries which are reasonable in the circumstances, that to the best of their knowledge and belief, there are no other facts omitted which would make any statement herein misleading. The Securities Commission Malaysia has authorized the Fund, the subject of this Information Memorandum, and the authorization shall not be taken to indicate that the Securities Commission Malaysia recommends the investment. The Securities Commission Malaysia will not be liable for any non-disclosure on the part of Kenanga Investors Berhad and takes no responsibility for the contents of this Information Memorandum, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the content of this Information Memorandum. The Kenanga Islamic Cash Fund has been certified as being Shariah-compliant by the appointed Shariah Adviser for the Fund.

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CORPORATE DIRECTORY

Manager Name: Kenanga Investors Berhad (353563-P)

Registered Office: 8th Floor, Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur

Business Address: Suite 12.02, 12th Floor Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur

Telephone number: 03-2057 3688

Facsimile number: 03-2161 8807 / 03-2713 5868

Customer Service Hotline:

1-800-88-3737

Email Address: investorservices@kenanga.com.my

Website: www.kenangainvestors.com.my Board of Directors Datuk Syed Ahmad Alwee Alsree (Chairman) Syed Zafilen Syed Alwee (Independent Director) YM Raja Dato’ Seri Abdul Aziz bin Raja Salim (Independent Director) Vivek Sharma (Independent Director) Peter John Rayner (Independent Director) Bruce Kho Yaw Huat Abdul Razak bin Ahmad Investment Committee Bruce Kho Yaw Huat (Chairman) Syed Zafilen Syed Alwee (Independent Member) Vivek Sharma (Independent Member) Peter John Rayner (Independent Member) Abdul Razak bin Ahmad Company Secretary Name: Norliza Abd Samad (MAICSA 7011089)

Business Address: 9th Floor, Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur.

Telephone number: 03-2164 9080

Facsimile number: 03-2161 4990

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External Fund Manager Name: Kenanga Islamic Investors Berhad (Company No. 451957-D)

Registered Office: 8th Floor, Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur

Business Office: Suite 12.03, 12th Floor Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur

Telephone number: 03-2057 3688

Facsimile number: 03-2161 8805 Trustee Name: CIMB Islamic Trustee Berhad (167913-M)

Registered Office:

Level 13, Menara CIMB Jalan Stesen Sentral 2, Kuala Lumpur Sentral 50470 Kuala Lumpur Malaysia

Business Address: Level 21, Menara CIMB Jalan Stesen Sentral 2, Kuala Lumpur Sentral 50470 Kuala Lumpur Malaysia

Telephone number: 03-2261 8888

Facsimile number: 03-2261 0099 Trustee’s Delegate (Custodian Functions)

Name: CIMB Islamic Nominees (Tempatan) Sdn Bhd (Company No.8424 H)

Registered Office: Level 13, Menara CIMB Jalan Stesen Sentral 2, Kuala Lumpur Sentral 50470 Kuala Lumpur

Business Address Level 21, Menara CIMB Jalan Stesen Sentral 2, Kuala Lumpur Sentral 50470 Kuala Lumpur

Telephone number: 03-2261 8888

Facsimile number: 03-2261 9894 Auditors for the Fund Name: Ernst & Young

Address: Level 23A, Menara Milenium Jalan Damanlela Pusat Bandar Damansara 50490 Kuala Lumpur

Telephone number: 03-7495 8000

Facsimile number: 03-7495 7908

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Tax Advisers for the Fund Name: Ernst & Young Tax Consultants Sdn Bhd (179793-K)

Address: Level 23A, Menara Milenium Jalan Damanlela Pusat Bandar Damansara 50490 Kuala Lumpur

Telephone number: 03-7495 8000

Facsimile number: 03-2095 5332 Solicitors Name: Raja, Darryl & Loh

Address: 18th Floor, Wisma Sime Darby Jalan Raja Laut 50350 Kuala Lumpur

Telephone number: 03-2694 9999

Facsimile number: 03-2698 4759 Shariah Adviser Name: IBFIM (763075-W)

Registered Office:

No : 149A, 149B, 151B Persiaran Raja Muda Musa 42000 Port Klang Selangor Darul Ehsan

Business Address: 3rd Floor, Dataran Kewangan Darul Takaful Jalan Sultan Sulaiman 50000 Kuala Lumpur

Telephone number: 03-2031 1010

Facsimile number: 03-2078 5250

Website: www.ibfim.com

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DEFINITION

the Act or CMSA The Capital Markets and Services Act 2007.

BAFIA

The Banking and Financial Institutions Act 1989.

Business Day A day on which banks in Kuala Lumpur are open for normal business.

BNM Bank Negara Malaysia.

Cash Produce In respect of any particular period, means all income and capital of the Fund for that period and includes all cash received by the Trustee in the form of: (a) dividends, bonuses and profits; (b) fees or charges charged by the Fund; (c) the proceeds of sale of rights and other cash received

pursuant to Clause 8.1.6 of the Deed; and paragraph (b) of Clause 8.1.3 of the Deed;

(d) any profit from the sale of the assets of the Fund; and (e) any other sum having the nature of capital or income

which the Manager and Trustee, having consulted the auditor of the Fund, deem to be Cash Produce.

Deed The deed entered into between the Manager and the

Trustee dated 16 August 2012 in respect of the Fund as modified by the first supplemental deed dated 17 December 2013.

developm ent financial institution

Means a development financial institution prescribed by and regulated under the Development Financial Institutions Act 2002.

External Fund Manager or KIIB

Kenanga Islamic Investors Berhad

Financial Year End 31st October.

fin ancial institution Means any of the following:

(i) a licensed bank; (ii) a licensed investment bank; (iii) an Islamic bank; (iv) a development financial institution; or (v) a scheduled institution.

the Fund The Kenanga Islamic Cash Fund, a wholesale fund issued

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pursuant to the Guidelines.

Guidelines The Guidelines on Wholesale Funds issued by the Securities Commission.

IBFIM / Shariah Adviser

Means IBFIM, the Shariah Adviser for the Fund.

Information Memorandum This document, and includes any supplementary or replacement Information Memorandums.

Initial Offer Period

A period when the Manager invites potential Investors to participate in the Fund by subscribing for Units in the Fund, during this period, Units are created, cancelled, sold and repurchased at the Offer Price.

Islamic bank Means a financial institution licensed or deemed to be licensed under the Islamic Banking Act 1983.

licensed bank Means a bank, including a banking and finance company, licensed or deemed to be licensed pursuant to the BAFIA.

licensed investment bank Means an investment bank licensed or deemed to be licensed pursuant to the BAFIA.

MARC Malaysian Rating Corporation Berhad.

Manager / Management Company / KIB

Kenanga Investors Berhad (353563-P).

Management Fee A percentage of the NAV of the Fund that is paid to the Manager for managing the Fund.

medium -term A period of between 1 to 2 years.

Net Asset Value or NAV

The NAV of the Fund is determined by deducting the value of all the Fund’s liabilities from the value of all the Fund’s assets, at the valuation point. For the purpose of computing the annual management fee and annual trustee fee, the NAV of the Fund should be inclusive of the management fee and the trustee fee for the relevant day.

NAV per Unit Is the Net Asset Value of the Fund at a particular valuation point divided by the number of Units in circulation at that same valuation point.

Offer Price means the price payable by an applicant for a Unit during the Initial Offer Period.

Qualified Investors Refers to:- 1. an individual whose total net personal assets, or total

net joint assets with his or her spouse, exceed RM3 million or its equivalent in foreign currencies, excluding the value of the individual’s primary residence;

2. an individual who has a gross annual income exceeding RM300,000 or its equivalent in foreign currencies per

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annum in the preceding 12 months; 3. an individual who, jointly with his or her spouse, has a

gross annual income exceeding RM400,000 or its equivalent in foreign currencies in the preceding 12 months;

4. a corporation with total net assets exceeding RM10 million or its equivalent in foreign currencies based on the last audited accounts;

5. a partnership with total net assets exceeding RM10 million or its equivalent in foreign currencies;

6. a unit trust scheme or prescribed investment scheme; 7. a private retirement scheme; 8. a closed-end fund; 9. a company that is registered as a trust company under

the Trust Companies Act 1949 which has assets under management exceeding RM10 million or its equivalent in foreign currencies;

10. a corporation that is a public company under the Companies Act 1965 which is approved by the SC to be a trustee under the Act and has assets under management exceeding ten million ringgit or its equivalent in foreign currencies;

11. a statutory body established by an Act of Parliament or an enactment of any State;

12. a pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967;

13. a holder of a capital markets services licence; 14. a licensed institution; 15. Islamic bank; 16. an insurance company licensed under the Insurance Act

1996; 17. a takaful operator registered under the Takaful Act

1984; 18. a bank licensee or insurance licensee as defined under

the Labuan Financial Services and Securities Act 2010; and

19. an Islamic bank licensee or takaful licensee as defined under the Labuan Islamic Financial Services and Securities Act 2010.

RAM RAM Rating Services Berhad.

RM or Ringgit Malaysia The lawful currency of Malaysia.

relevant laws Means laws, rules, regulations, guidelines, directives,

circulars, guidance notes and investment management standards passed or issued by any relevant authority relating to or connected with the fund management industry in Malaysia.

SACSC Shariah Advisory Council of the Securities Commission

scheduled institution Means a corporation or any other organisation which carries on building credit business, development finance business,

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factoring business or leasing business but does not include a co-operative society, a statutory body, a local authority, a licensed bank, a licensed finance company, or a licensed merchant bank carrying on the aforesaid businesses.

Securities Commission or SC

The Securities Commission Malaysia established under the Securities Commission Act 1993.

Shariah Means Islamic Law comprising the whole body of rulings pertaining to human conducts derived from the primary and secondary sources of the Shariah. The primary sources are the Quran, the Sunnah, Ijma’ and Qiyas while the secondary ones are those established sources such as Maslahah, Istihsan, Istishab, ‘Uruf and Sadd Zara’ie.

Shariah requirements

Is a phrase or expression which generally means making sure that any human conduct must not involve any prohibition and that in performing that conduct all the essential elements that make up the conduct must be present and each essential element must meet all the necessary conditions required by the Shariah for that element.

short -term A period of less than 1 year.

Special Resolution Means a resolution passed at a meeting of Unit Holders duly convened in accordance with the Deed and carried by a majority in number representing at least three-fourths of the value of the Units held by the Unit Holders voting at the meeting in person or by proxy.

suku k

refers to certificates of equal value which evidence undivided ownership or investment in the assets using Shariah principles and concepts approved by the SACSC.

Trustee

CIMB Islamic Trustee Berhad (167913-M)

Trustee Fee A percentage of the NAV of the Fund that is paid to the Trustee for acting as the trustee for the Fund.

Unit Is an undivided share in the beneficial interest and/or right in the Fund and a measurement of the interest and/or right of a Unit Holder in the Fund and means a Unit of the Fund.

Unit Holder / Investors The Qualified Investors for the time being registered as the holder of Units in the Fund.

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CHAPTER 1: KEY DATA This section contains a summary of the salient information about the Fund. Information about the Fund Name Kenanga Islamic Cash Fund

Fund Type Income

Fund Category Money Market (Islamic)

Investment Objective

The Fund seeks to provide Investors with regular income stream while maintaining capital stability. Note: Unless otherwise indicated by Unit Holders, any distributions will be automatically reinvested as additional Units.

Investment Policy and Strategy

The Fund seeks to achieve its objective by investing in Shariah-based deposits and Islamic money market instruments. The investment strategy will involve actively managing the maturities of each investment to the extent possible to enhance the returns of the Fund. The Fund will also be actively managed to meet potential liquidity requirements of the Fund.

Asset Allocation

The Fund’s portfolio will be structured as follows: • up to 100% of the NAV will be placed in Shariah-based

deposits and Islamic money market instruments, with at least 70% of the NAV placed in Shariah-based deposits and/or Islamic money market instruments that have a remaining maturity of 365 days or less.

Principal Risks

− Interest Rate Risk − Liquidity Risk − Credit /Default Risk

Benchmark

Maybank Overnight Repo Rate. Source: www.maybank2u.com Investors should be aware that investing in the Fun d is not the same as placement of moneys in Shariah based deposi ts. The capital and returns of the Fund are not guaranteed and there are risks involved. Hence, the risk profile of the Fund does not reflect that of a Shariah based deposit. The Fund has a higher risk profile than a Shariah based deposit.

Investors’ Profile

The Fund is suitable for Investors who:- − seek to invest in an Islamic money market fund; − seek regular income with capital stability;

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− have low risk tolerance; and − prefer a short to medium-term investment horizon.

Financial Year End

The period of twelve (12) months ending on the 31st day of October of every calendar year, for the avoidance of doubt, the first financial year shall commence on the date of this Information Memorandum.

Price per Unit during the Initial Offer Period

RM1.00.

Initial Offer Period The Initial Offer Period is for the period of twenty one (21) days from the date of this Information Memorandum.

Commencement Date

The Fund will commence on the Business Day after the end of the Initial Offer Period.

Transaction Information Minimum Initial Investment

RM50,000 or such other amount as the Manager may prescribe from time to time.

Minimum Additio nal Investment

RM10,000 or such other amount as the Manager may prescribe from time to time.

Minimum Redemption Amount

10,000 Units or such other amount as the Manager may prescribe from time to time.

Conditions for Redemption

Unit Holders may redeem their investments in the Fund on any Business Day by completing the prescribed redemption request form or such other manner as the Manager may accept and returning it to the Manager on any Business Day; the redemption request form is available at the office of the Manager. All such requests must be received by us before 11 a.m. on any Business Day. Any requests received after 11 a.m. will be treated as having been received the following Business Day. Redemption proceeds are based on the NAV per Unit of the Fund at the close of a Business Day on the day the redemption request form is received by the Manager. Redemption proceeds will be paid to Unit Holders on the next Business Day upon receipt of the redemption request form.

Transfer Facility

Transfer facility is not available for this Fund.

Switching Facility

Switching of Units is allowed at the discretion of the Manager and is subject to such terms and conditions as the Manager may impose. Kindly refer to Section 5.6 for further details on switching transactions.

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Switching from a Shariah-based fund to a conventional fund is discouraged especially for Muslim Unit Holders.

Fees and Charges

Fees and Charges directly incurred by Unit Holders

Sales Charge

None.

Redemption Charge

None.

Switching Fee None.

Fees and Expenses indirectly incurred by Unit Holde rs

Management Fee

0.30% per annum of the NAV of the Fund. The Management Fee is calculated on a daily basis and payable monthly. Note: The Manager may in its own discretion, from time to time, charge an annual management fee that is lower than that stated above.

Trustee Fee

0.02% per annum of the NAV of the Fund. The Trustee Fee is calculated daily and payable monthly.

Other Expenses

Only expenses directly incurred by the Fund will be charged to the Fund. These expenses relate primarily to the administration of the Fund. These expenses include auditor’s fees, Shariah Adviser’s fees and other relevant professional fees, foreign custodial charges (if applicable), cost of distribution of quarterly/annual reports, tax certificates, reinvestment statements and other notices to Unit Holders. Other fees/ expenses directly related to the Fund, such as commissions paid to brokers and taxes, are also paid out of the Fund.

Other Information Reports Unit Holders will receive the following statements and reports in a

financial year: − Confirmation of Investment Statements showing details of the

Units purchased and the application prices at which the Units were purchased;

− Monthly Statements of Account showing the balance of Investors’ investments and all transactions made during the month, distribution details and investment value based on the NAV per Unit of the Fund as at the last trading day of that month;

− Quarterly Reports and Annual Report which provides an account of the Fund including a detailed overview of the Fund, investment strategies, performances, portfolio holdings and account of the Fund; and

− If distribution of returns is declared by the Fund, Unit Holders

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will receive a Statement of Distribution of Returns and tax statement/voucher for submission to the Inland Revenue Board of Malaysia.

Distribution Policy Subject to the availability of income, distribution of income will be

done on a monthly basis.

Distribution Op tions The following distribution options are available for the Fund. Unit Holders may specify their distribution preferences:- - Pay-out Option: Distribution proceeds paid directly to Unit

Holders; or - Reinvestment Option: Unit Holders may opt for distribution

proceeds to be reinvested as additional Units of the Fund at NAV per Unit on the Business Day following the distribution declaration date.

If Unit Holders do not indicate their preferred distribution option, any distributions will be automatically reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date. For Unit Holders who select the pay-out option, the Manager shall endeavour to pay all distribution proceeds in cash or cheque in Ringgit Malaysia within 5 Business Days from the distribution declaration date and in any event, the pay-out shall be made no later than 14 Business Days from the distribution declaration date, unless the distribution proceeds is less than RM50.00. In such circumstances, the distribution proceeds will be automatically reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date.

External Fund Manager

Kenanga Islamic Investors Berhad

INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE IN FORMATION MEMORANDUM BEFORE SUBSCRIBING TO THE FUND. IF IN DO UBT, PLEASE SEEK PROFESSIONAL ADVICE.

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CHAPTER 2: RISK FACTORS

The Manager encourages investors to give careful consideration to the risks associated when investing in the Fund. If in doubt, investors should seek independent financial and taxation advice before investing in the Fund. Below are some of the general risks which investors should be aware of when investing in the Fund.

− Market risk – Market risk arises because of factors that affect the entire market place. Factors such as economic growth, political stability and social environment are some examples of conditions that have an impact on businesses, whether positive or negative. The Fund will be exposed to market uncertainties due to the factors stated above and this in turn will affect the value of the investments either in a positive or negative way.

− Fund management risk – As the investment management functions of the Fund has

been delegated to an external fund manager, the performance of the Fund depends on the experience, expertise and ability of the external fund manager to generate returns. Lack of any of the above mentioned on the part of the external fund manager may adversely affect the performance of the Fund.

− Performance risk – The performance of the Fund depends on the investments of

the Fund. If there is a default, there will be a negative impact on the performance of the Fund. The performance of the Fund may also be affected if the allocation of assets is not properly done. This is where the experience and expertise of the fund managers are important as highlighted in the fund management risk write-up above. In view of the aforesaid, there is never a guarantee that investing in the Fund will produce the desired investment returns or the distribution of income.

− Inflation risk – Inflation rate risk is the risk of potential loss in the purchasing power

of investment due to a general increase of consumer prices. Inflation erodes the nominal rate of return giving a lower real rate of return. Investors are advised to take note that the Fund is not designed with the objective of matching the inflation rate of Malaysia.

− Risk of non-compliance – The Fund has been established in accordance with the provisions of the Deed and the Guidelines. There is a risk that the Manager may not observe the rules whether intentionally or inadvertently. Whilst non-compliance with the rules governing the Fund will not necessarily result in losses to the Fund, Investors cannot discount the risk that losses may be suffered by the Fund if the non-compliance with the rules is sufficiently serious and may affect the value of the Fund. This may occur, for instance, if the Manager decides to buy an instrument which is not permitted, whether intentionally or inadvertently, and thereafter having to sell that instrument at a loss to the Fund.

− Operational risk – This risk refers to the possibility of a breakdown in the Manager’s internal controls and policies. The breakdown may be a result of human error (for instance the keying of wrong details), system failure (causing unnecessary downtime) or even fraud (where employees of the Manager colludes with one another). This risk may cause monetary loss to the Fund and/or inconvenience to

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investors. The Manager will regularly review its internal policies and system capability to minimize the occurrence of this risk. Additionally the Manager maintains a strict segregation of duties to minimize occurrence of fraudulent practices amongst employees of the Manager.

The specific risks affecting investments in this Fund may include but are not limited to:

− Interest Rate risk – The risk refers to how the changes in the interest rate environment would affect the performance of an Islamic money market portfolio. In the event of a decreasing interest rate environment, the bank may offer Shariah-based deposits with lower profit rates, effectively reducing the potential returns of future Shariah-based deposits which in turn will reduce the potential returns of an Islamic money market portfolio. Interest rate, such as overnight policy rate set by Bank Negara Malaysia, will have an impact on the investment decisions of the Fund regardless of whether it is a Shariah-based fund or otherwise. It does not in any way suggest that the Fund will invest in conventional financial instruments.

− Liquidity risk – This risk refers to the possibility that the investments of the Fund cannot be readily sold or converted into cash without incurring significant loss in value. For example, disposing a relatively illiquid Shariah-compliant instrument may result in a disadvantage to the Fund as there may not be a buyer, or sufficient buyers, available for the said instrument. This lack of demand or low trading volume may cause the value of the Fund to drop. This risk is mitigated through a diversified asset allocation in terms of the type of instruments and the tenure of the investment instruments, which include Shariah-based deposits and Islamic money market placements.

− Credit/Default risk – This risk refers to the possibility that a financial institution

issuer of Shariah-compliant instruments will not be able to meet the scheduled profit and/or principal repayments. This may lead to a reduction in the value of the Fund due to income and/or capital losses. In general, this risk can be mitigated by investing in instruments that are issued by financial institutions and the instruments carry credit ratings that are at least of A3/P2 by RAM or its equivalent by MARC or any other recognised local rating agencies. In the absence of a credit rating for the instrument, the Manager would use the credit rating of the financial institution issuing the instrument.

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CHAPTER 3: FUND INFORMATION

3.1 Investment Objective The Fund seeks to provide Investors with regular income stream while maintaining capital stability. Any material changes to the investment objective of the Fund would require the approval of Unit Holders. Note: Unless otherwise indicated by Unit Holders, any distributions will be automatically reinvested as additional Units.

3.2 Investment Policy and Strategy The Fund seeks to achieve its objective by investing in Shariah-based deposits and Islamic money market instruments. The investment strategy will involve actively managing the maturities of each investment to the extent possible so as to enhance the returns of the Fund. The Fund will also be actively managed to meet potential liquidity requirements of the Fund.

3.3 Asset Allocation In seeking to achieve the Fund’s investment objective, the Fund’s portfolio will be structured as follows: The Fund will invest up to 100% of the Fund’s NAV in Shariah-based deposits and Islamic money market instruments, with at least 70% of the NAV placed in Shariah-based deposits and/or Islamic money market instruments that have a remaining maturity of 365 days or less. The above asset allocation is only indicative and will be reviewed from time to time at the discretion of the Manager as to the general market and economic conditions. Specific risks associated with such investments are elaborated in Chapter 2, Risk Factors above.

3.4 Benchmark Maybank Overnight Repo Rate. Source: www.maybank2u.com Investors should be aware that investing in the Fun d is not the same as placement of moneys in Shariah based deposits. The capital and r eturns of the Fund are not guaranteed and there are risks involved. Hence, the risk profile of the Fund does not reflect that of a Shariah based deposit. The Fund has a higher risk profile than a Shariah based deposit.

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3.5 Risk Management The risk management strategy of the Fund entails active management of the tenures (maturities) of the investments in Shariah-based deposits and Islamic money market instruments issued by financial institutions as well as setting limits on the credit quality (credit rating of A3/P2 or above by RAM or its equivalent by MARC or any other recognized local credit rating agencies) of the investments in the portfolio. In the event that a credit rating for the instrument is not available, the Manager would use the credit rating of the financial institution issuing the instrument.

3.6 Permitted Investments Unless otherwise prohibited by the relevant authorities or any relevant law and provided always that there are no inconsistencies with the objective of the Fund, the Fund may invest in the following:

1. Placements of Shariah-based deposits with financial institutions;

2. Islamic money market instruments issued by financial institutions such as Islamic accepted bills, Islamic negotiable instruments, where the instruments carry a minimum credit rating of A3/P2 by RAM or an equivalent credit rating by MARC or any other recognized local rating agencies. In the absence of a credit rating for the instrument, the Manager would use the credit rating of the financial institution issuing the instrument; and

3. Any other Shariah-compliant investment instruments as may be agreed upon between the Manager and the Trustee from time to time.

3.7 Investment Restrictions and Limits The permitted investments of the Fund as stated in Section 3.6 above are subject to the following restrictions:- a) The value of the Fund’s holding of permitted investments with a maturity date of no more

than 365 days must not be less than 70% of the Fund’s total NAV; b) The value of the Fund’s holding of all permitted investments with a remaining tenure of

more than 365 days but less than 732 days must not exceed 30% of the Fund’s total NAV; and

c) All investments made by the Fund must be Shariah-compliant. The above stated limits and restrictions shall be complied with at all times based on the most up-to-date value of the Fund’s investments and instruments. However, a 5% allowance in excess of any limits or restrictions may be permitted where the limit or restriction is breached through the appreciation or depreciation in the NAV of the Fund (as a result of an appreciation or depreciation in value of investments or as a result of the purchase of units or payment made from the Fund). Once the relevant limit is breached, no further acquisitions of the particular securities involved shall be made and the Manager should, within a reasonable period of not more than three (3) months from the date of the breach take all necessary steps and actions to rectify the breach. The above restrictions and limits are not applicable to Shariah-compliant securities or instruments issued or guaranteed by the Malaysian government or Bank Negara Malaysia.

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3.8 Income Distribution and Distribution Options Subject to the availability of income, distribution of income will be done on a monthly basis. It should be noted that the actual distribution of income and the frequency of distribution as indicated here are provisional and will depend on the availability of distributable surplus (after deducting expenses incurred by the Fund i.e., Management Fee, Trustee Fee and any other fund expenses). The following distribution options are available for the Fund. Unit Holders may specify their distribution preferences: 1. Pay-out Option: Distribution proceeds paid directly to Unit Holders; or 2. Reinvestment Option: Unit Holders may opt for distribution proceeds to be reinvested as

additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date.

If Unit Holders do not indicate their preferred distribution option, any distributions will be automatically reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date. For Unit Holders who select the pay-out option, the Manager shall endeavour to pay all distribution proceeds in cash or cheque in Ringgit Malaysia within 5 Business Days from the distribution declaration date and in any event, the pay-out shall be made no later than 14 Business Days from the distribution declaration date, unless the distribution proceeds is less than RM50.00. In such circumstances, the distribution proceeds will be automatically reinvested as additional Units of the Fund at the NAV per Unit on the Business Day following the distribution declaration date. If distribution cheque(s) remain unclaimed for 6 months, the amount will be reinvested into the Fund based on the prevailing NAV per Unit of the Fund.

3.9 Valuation of the Assets of the Fund The Fund will be valued daily at the end of every Business Day. The Manager shall at all times value the assets of the Fund in accordance with the following bases of valuation. Accordingly: 1. Shariah-based deposits placed with financial institutions will be valued with reference to

the principal value of such investments and profits accrued thereon for the relevant period.

2. Islamic money market instruments such as Islamic accepted bills and Islamic negotiable

instruments will be valued on a daily basis by reference to the principal value of such investments and profits accrued thereon for the relevant period.

3. The valuation basis for any other forms of investment will be based on a methodology

agreed between the Manager and the Trustee.

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3.10 Shariah Investment Guidelines adopted by IBFIM and Cleansing/ Purification Process for the Fund

The following matters are adopted by IBFIM in determining the Shariah status of investments of the Fund. 1. Shariah Investment Guidelines

Sukuk and Islamic Money Market Instruments The review will be based on the lists of instruments readily available at the websites of the SC and Bank Negara Malaysia.

2. Cleansing/purification process for the Fund

Cleansing process for the Fund (a) Wrong Investment Refers to Shariah non-compliant investments made by the Manager. The said investment will be disposed/withdrawn of with immediate effect. In the event the investment resulted in gains (through capital gain and/or profits), the gain is to be channelled to baitulmal or any other charitable bodies as advised by the Shariah Adviser. If the disposal of the investment resulted in losses to the Fund, the losses are to be borne by the Manager. Purification Process for the Fund (a) Zakat for the Fund The Fund does not pay zakat on behalf of Muslim individuals and Islamic legal entities who are Investors of the Fund. Thus, Investors are advised to pay zakat on their own.

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CHAPTER 4: FEES, CHARGES AND EXPENSES Fees and Charges directly incurred by Unit Holders

4.1 Sales Charge The Manager does not intend to impose any sales charge.

4.2 Redemption Charge The Manager does not intend to impose any redemption charge.

4.3 Switching Fee The Manager does not intend to impose any switching fee. Fees and Expenses indirectly incurred by Unit Holde rs

4.4 Management Fee The Management Fee is a charge levied for the services rendered by the Manager. The Management Fee is 0.30% per annum of the NAV of the Fund. The Management Fee is calculated daily and payable monthly. Note: The Manager may in its own discretion, from time to time, charge an annual management fee that is lower than that stated above. Please refer to the illustration under item 5.3 below to see how the Management Fee is calculated.

4.5 Trustee Fee The Trustee Fee is 0.02% per annum of the NAV of the Fund. The Trustee Fee is calculated daily and payable monthly. Please refer to the illustration under item 5.3 below to see how the Trustee Fee is calculated.

4.6 Other Expenses Directly Related to the Fund In administrating the Fund, there are expenses directly related to the Fund. These expenses include auditor’s fees, Shariah Adviser’s fees and other relevant professional fees, foreign custodial charges (if applicable), cost of distribution of quarterly/annual reports, tax certificates, statements and other notices to Unit Holders. In addition, there are fees/ expenses that are directly related and necessary to the business of the Fund such as commissions paid to brokers and taxes, that are also paid out of the Fund.

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4.7 Reduction / Waiver of Fees The Manager may, for any reason at any time, waive or reduce the amount of any fees or other charges payable by the Unit Holders in respect of the Fund, either generally or specifically and for any period or periods of time at its absolute discretion.

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CHAPTER 5: TRANSACTION INFORMATION

5.1 Pricing Policy The Manager will adopt a single pricing policy when calculating your subscription for and redemption of Units which means that the selling price per Unit and the redemption price per Unit will be transacted and quoted on a single price i.e., the NAV per Unit of the Fund. The NAV per Unit of the Fund will be valued as at the next valuation point (at the end of each Business Day) on a forward pricing basis and will be made available on the following day. Unit Holders may obtain the NAV per Unit of the Fund by contacting the Manager directly. Investors will receive quarterly reports and an audited annual report each year from the Manager.

5.2 Valuation Point of the Fund The Fund will be valued at the end of every Business Day.

5.3 Illustration on the computation of NAV and how the Management Fee and Trustee Fee are calculated

Example: Computation of NAV per Unit RM Investments 10,001,000.00 Other Assets 5,000.00 Total Assets 10,006,000.00 Less: Liabilities 1,590.07 NAV of the Fund (before deduction of Management and Trustee Fees)

10,004,409.93

Less: Management Fee - Calculated on a Daily Basis (0.30% per annum/365 days)

82.23

Trustee Fee - Calculated on a Daily Basis (0.02% per annum/365days)

5.48

NAV of the Fund (after deduction of Management and Trustee Fees)

10,004,322.22

Units In Circulation 10,004,000.00 NAV per Unit 1.000032 NAV per Unit (Rounded to 4 decimal points) 1.0000

5.4 Subscription of Units Application for Units should be made at or before the cut-off time of 11 a.m. on any Business Day. The subscription form is available at the office of the Manager.

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During the Initial Offer Period, Units of the Fund will be issued at the Offer Price. After the Initial Offer Period, Investors will purchase Units at the NAV per Unit of the Fund at the next valuation point after their application is accepted by the Manager.

5.5 Redemption of Units Unit Holders may redeem their investments in the Fund on any Business Day by completing the prescribed redemption request form or such other manner as the Manager may accept and returning it to the Manager on any Business Day; the redemption request form is available at the office of the Manager. All such requests must be received by the Manager before 11 a.m. on any Business Day. Any requests received after 11 a.m. will be treated as having been received the following Business Day. Redemption proceeds are based on the NAV per Unit of the Fund at the close of a Business Day on the day the redemption request form is received by the Manager. Redemption proceeds will be paid to Unit Holders on the next Business Day upon receipt of the redemption request form. The minimum redemption amount is set at 10,000 Units or such other amount as the Manager may prescribe from time to time.

5.6 Switching of Units The minimum number of Units for each switching transaction is 10,000 Units. Switching of Units is allowed at the discretion of the Manager and is subject to such terms and conditions as the Manager may impose. Unit Holders may at the discretion of the Manager switch their Units into units of wholesale funds or unit trust funds established by the Manager. Unit Holders must contact the Manager to obtain details on the wholesale funds or unit trust funds which they can switch into. Qualified Investors who have invested in other wholesale funds established by the Manager may switch their units into the Fund if switching facility is provided by the wholesale fund they have initially invested in. Any switching transaction is subject to the conditions set out below: 1. unit holders who originally purchased units of a fund with a “sales charge” imposed will

switch into any of the other funds at the net asset value per unit of that fund. 2. unit holders who originally purchased units of a fund with NO “sales charge” imposed

who switches into any other funds with NO “sales charge” imposed will switch at the net asset value per unit of that fund.

3. However, if a unit holder who originally purchased units of a fund with NO “sales charge”

imposed decides to switch into a fund with a “sales charge” imposed, the unit holder will switch at the net asset value per unit of that fund and will incur the “sales charge”

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imposed by the fund they intend to switch into. Thereafter, any subsequent switches into any of the other funds will be at the net asset value per unit of that fund.

Please refer to the table below for an illustration on how the switching facility works:

SWITCHING FROM SWITCHING TO

CURRENT FUND INTENDED FUND

*fund with NO “sales charge” *fund with “sales charge”

*fund with “sales charge”

Switch at the net asset value per unit of the fund.

Switch at the net asset value per unit of the fund.

*fund with NO “sales charge”

Switch at the net asset value per unit of the fund.

Switch at the net asset value per unit of the fund, however,

the unit holder will have to incur the sales charge imposed by the fund they intend to switch into.

Switching from a Shariah-based fund to a conventional fund is discouraged especially for Muslim Unit Holders.

5.7 Periodic Reporting to Unit Holders During every Financial Year of the Fund, Unit Holder will receive: 1. Confirmation of Investment Statements detailing his investment, which will be sent within

ten (10) Business Days from the date monies are received by the Manager for investment in the Fund. This confirmation will include details of the Units purchased and the purchase price;

2. Monthly Statements of Account which shows the balance of Unit Holders’ investments

and all transactions made during the month, distribution details and investment value; 3. Quarterly Reports which provides a brief overview of the Fund including key risk factors,

investment outlook for the quarter, the Fund’s financial performance, credit risk, level of borrowings, market outlook, changes in the key investment team, illiquid holdings, details on portfolio holdings, information on fund performance and volatility and unaudited accounts of the Fund for the quarter. The Quarterly Reports will be dispatched to all Unit Holders within two (2) months from the close of each financial quarter;

4. An Annual Report which provides a detailed overview of the Fund including key risk

factors, investment outlook for the year, the Fund’s financial performance, credit risk, level of borrowings, market outlook, changes in the key investment team, illiquid holdings, details on portfolio holdings, information on fund performance and volatility and audited accounts of the Fund for the year. The Annual Report will be dispatched to all Unit Holders within two (2) months from the close of each Financial Year; and

5. If distribution of returns is declared by the Fund, Unit Holders will receive a Statement of

Distribution of Returns, detailing the nature and amount of returns distributed by the Fund and a tax statement/voucher for submission to the Inland Revenue Board of Malaysia.

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CHAPTER 6: MANAGEMENT COMPANY

6.1 The Manager Kenanga Investors Berhad has its principal place of business at Suite 12.02, 12th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia. The Manager, was incorporated as a public limited company on 2 August 1995 under the Companies Act 1965 with an authorised share capital of RM25,000,000.00 comprising 15,000,000 ordinary shares of RM1.00 each and 10,000,000 preference shares of RM1.00 each of which 13,465,300 ordinary shares and 5,000,000 preference shares are issued and fully paid up. KIB is 100% owned by Kenanga Investment Bank Berhad which is a wholly-own subsidiary of K & N Kenanga Holdings Berhad.

The Manager is licensed and authorised to conduct business in distributing unit trust funds, private retirement scheme, providing investment advice and fund management on behalf of corporate, institutional and individual clients under the CMSA 2007. As at 30 April 2014, the Manager manages 28 unit trust funds, 1 private retirement scheme (consisting of 3 funds), 8 wholesale funds and other funds from government agencies, pension funds, insurance, corporate and individual clients with a total fund size of more than RM6 billion. The Manager has the services of 88 experienced personnel (77 executives, and 11 non-executives).

6.2 Functions of the Manager KIB is responsible for the day-to-day management, marketing and administration of the Fund, where its key functions include: a) Endeavouring that the Fund is managed in a sound and professional manner in

accordance with its investment objectives, the provisions of this Information Memorandum and the Deed;

b) Endeavouring that the Fund is properly administered and to arrange for sale and redemption of Units of the Fund;

c) Issuing the Fund’s quarterly and annual reports, and monthly statement of accounts to Unit Holders;

d) Keeping proper records of the Fund; and e) Keeping Unit Holders informed on material matters relating to the Fund.

6.3 Financial Position of the Manager The audited financial results of KIB for the financial years ended 31 December 2011 to 31 December 2013 are summarised below: Year ended

31 Dec 2013 RM’000

Year ended 31 Dec 2012

RM’000

Year ended 31 Dec 2011

RM’000 Paid-up capital 18,465 6,765 6,765 Shareholders’ funds 35,583 11,036 12,777 Revenue 35,551 12,178 10,234 Profit / (loss) before taxation 14,138 (1,914) (1,473)

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Profit / (loss) after taxation 12,847 (1,741) (1,290)

6.4 Board of Directors The board of directors of KIB (“Board”) is responsible for the overall management of the Manager and its funds. The Board not only ensures corporate governance is practised but policies and guidelines are adhered to. The Board will sit once every quarter, or more often should the need arise. Datuk Syed Ahmad Alwee Alsree (Chairman) Date of Appointment: 11 October 2006 Datuk Syed Ahmad Alwee Alsree was appointed Chairman of KIB on 1 January 2008 after having been appointed to the Board in October 2006. He was appointed as a Non-Executive Director of K&N Kenanga Holdings Berhad on 28 August 2009 and had, on 26 July 2011, re-designated as Deputy Chairman. Datuk Syed Ahmad Alwee Alsree is also the Group Executive Director of Cahya Mata Sarawak Berhad (CMSB). He had earlier joined CMS in February 2004 as Group General Manager – Human Resources where he was responsible for the smooth operations and integration of the various human resource departments within Cahya Mata Sarawak (CMS) Group. He was appointed as Deputy Group Managing Director of CMSB in September 2006 and subsequently re-designated as Group Executive Director in August 2008. Datuk Syed Ahmad graduated with a Bachelor of Law (LL.B.) from the National University of Singapore, and practiced law in Singapore for over ten (10) years prior to joining CMS Group. Apart from K&N Kenanga Holdings Berhad and CMSB, Datuk Syed Ahmad is a director of KKB Engineering Berhad, Kenanga Investment Bank Berhad and SIG Gases Berhad. He is Chairman of Samalaju Aluminium Industries Sdn Bhd (formerly known as Similajau Aluminium Industries Sdn Bhd) and a director of several CMS subsidiaries in financial services, property development and education. Syed Zafilen Syed Alwee (Independent Director) Date of Appointment: 12 May 2008 Syed Zafilen Syed Alwee was appointed as the Director of KIB on 12 May 2008. He has spent his career in managing various sectors of operations of companies such as sales, marketing, technical, management, finance in local listed companies as well as multinational including Patimas, Lityan, Cahya Mata Sarawak, Lucent Technologies, Motorola, Mobil and others as well as being ownership of two other companies. He is currently undergoing an MBA programme in Finance at the University of Manchester. YM Raja Dato’ Seri Abdul Aziz bin Raja Salim (Indep endent Director) Date of Appointment: 24 February 2012 YM Raja Dato’ Seri Abdul Aziz bin Raja Salim was appointed as the Director of KIB on 24 February 2012. He is an Honorary Fellow of the Malaysian Institute of Taxation, Fellow of the Chartered Association of Certified Accountants, United Kingdom, Fellow of the Chartered Institute of Management Accountants ("CIMA"), United Kingdom and a Chartered Accountant (Malaysia). He served as Director General of Inland Revenue Malaysia from 1980 to 1990 and Accountant General Malaysia from 1990 to 1994. After his retirement from the Government

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service, he was appointed as Chairman of BSN Commercial Bank (M) Berhad from 1995 to 1999. He was a Board Member of several Government agencies and organisations as well as Deputy Chairman of the Employees Provident Fund and Deputy Chairman of the Universiti Pertanian Malaysia Council. YM Raja Dato' Seri Abdul Aziz was the President of CIMA, Malaysia from 1976 to 1993 and a council member of CIMA, United Kingdom from 1990 to 1996. He was awarded the CIMA Gold Medal in recognition of his outstanding service to the Accounting Profession. He was a council member of the Malaysian Institute of Accountants ("MIA") until September 2005 and still sits on many MIA committees. YM Raja Dato' Seri Abdul Aziz is a Director of K & N Kenanga Holdings Berhad, Kenanga Islamic Investors Berhad (Formerly known as Kenanga Fund Management Berhad), Hong Leong Industries Berhad, Panasonic Manufacturing Malaysia Berhad and Southern Steel Berhad. Vivek Sharma (Independent Director) Date of Appointment: 1 October 2012 Vivek Sharma was appointed as the Director of KIB on 1 October 2012. He has over twenty (20) years experience in building and leading businesses in South East Asia in the fields of higher education, insurance, wealth management, and real estate. He is currently Managing Director of VS Development, a company which focuses on property development. In financial services, he was a Director of Investments at Merrill Lynch and a business leader at CiGNA in South East Asia. He was also executive director, Asia for Laureate Higher Education Group, as well as director of development, Asia for INSEAD business school. He holds a BSc. Economics (Finance) from the Wharton School at the University of Pennsylvania and a MBA from International Institute for Management Development (IMD) in Lausanne, Switzerland. Peter John Rayner (Independent Director) Date of Appointment: 11 November 2010 Peter John Rayner was appointed a Director (and Investment Committee member) of KIB on 11 November 2010. He has over thirty (30) years successful experience in building & leading businesses in the fields of Chartered Accounting, Stock Broking, Private Equity and Asset Management. He has held many senior positions including as Chief Executive Officer of both Allianz Global Investors & Saltbush Funds Management in Australia, Executive Director of private equity firm Audant Capital, Head of Institutional Investment at Perpetual Investments and National Chief Financial Officer of a major Australian hospital group. He is currently a Director of two Australian private family companies. He holds a business degree (majoring in Accounting & Finance) from Charles Sturt University in Australia, and is a Certified Practising Accountant (“CPA”). Bruce Kho Yaw Huat Date of Appointment: 29 June 2010 Bruce Kho Yaw Huat was appointed as the Director of KIB on 29 June 2010. Bruce has significant experience in building and leading financial management firms. His experience spans thirty-five (35) years within the fields of finance and management, twenty four (24) of which were as the Chief Executive Officer, and later Chairman, of the Allianz Group’s Asian asset management business, a market leader in the provision of asset management services.

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Abdul Razak bin Ahmad (Chief Executive Officer/ Exe cutive Director) Date of Appointment: 19 July 2010 Abdul Razak bin Ahmad was appointed as Chief Executive Office / Executive Director of KIB on 19 July 2010. He has more than twenty (20) years of experience in the financial industry; mainly Asset Management, Unit Trust Business, Corporate Banking and Treasury. He had held Senior Management positions and directorship in three Investment Management Organizations in Malaysia. He holds a Bachelor Degree of Science majoring in Business Administration (Finance) Magna Cum Laude from University of Southwestern Louisiana, USA. He is a holder of the Capital Markets Services Representative‘s License and a Certified Financial Planner.

6.5 The Investment Committee The Investment Committee formulates, establishes and implements investment strategies and policies. The committee will continually review and monitor the success of these strategies and policies using predetermined benchmarks towards achieving a proper performance for the Fund. The Committee will also ensure investment guidelines and regulations are complied with. The Investment Committee will meet at least once every quarterly or more often should the need arise.

Members of the Investment Committee for the Fund ar e as follows:

• Bruce Kho Yaw Huat (Chairman) • Syed Zafilen Syed Alwee (Independent Member) • Vivek Sharma (Independent Member) • Peter John Rayner (Independent Member) • Abdul Razak bin Ahmad Please refer to the Board of Director’s section for more details on their profile.

6.6 The Management Team Abdul Razak bin Ahmad Chief Executive Officer/ Executive Director Abdul Razak bin Ahmad’s profile is as set out above under the Board of Director’s section. Ismitz Matthew De Alwis Deputy Chief Executive Officer Ismitz Matthew De Alwis joined KIB in June 2013 as Deputy Chief Executive Officer following the acquisition of ING Funds Berhad (“ING Funds”) by KIB. He is responsible for the company's retail business, finance, strategic business planning, risk management and governance, business development, operations and IT functions. He was with ING Funds since 2003 and was part of the pioneer team that was responsible for the exponential growth of ING Funds in Malaysia. He was the executive director and country head for ING Funds. Before assuming the strategic and executive oversight of ING Funds; he was responsible for

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nationwide distribution, product management and business development for retail, corporate and institutional markets. He started his career as an investment analyst with a regional research & advisory firm, where he obtained vast regional exposure in Hong Kong, Philippines, Dubai and Singapore. He was responsible for research, marketing, distribution and product development. Upon his return to Malaysia, he joined a local established financial institution and investment management company before joining ING Funds. He brings with him 21 years of experience, multiple expertise, and several leadership roles in the field of financial and investment management. Ismitz Matthew holds a MBA from Southern Cross University where he graduated with distinction and a Bachelor Degree (H) in Business Administration from RMIT. In addition, he holds two other professional qualifications from the Chartered Institute of Marketing UK (CIM UK), and is a Certified Financial Planner (CFP). Ismitz Matthew is also a Capital Markets Services Representative’s Licence holder for investment advice and fund management approved by the Securities Commission Malaysia. Andrew Chan Yee Kok Chief Financial Officer Andrew Chan Yee Kok joined KIB in June 2013 to head the Finance & Investment Operations team. Prior to this, Andrew was with ING Funds Berhad (“ING Funds”), where he joined since 2004. He has been with ING Funds since the company’s inception and is one of the pioneers during the company’s green field set-up. Andrew has more than 20 years of experience in the business management, finance and accounting field. He started his accounting career in Australia. Upon his return, he joined a public-listed company as a senior accountant. His last stint prior to joining ING Funds was with an established unit trust management company where he was responsible for all financial and management reporting. Andrew is a Certified Practising Accountant (CPA), Aust and holds a Bachelor of Economics from La Trobe University, Melbourne, Australia. Lee Sook Yee Chief Investment Officer Lee Sook Yee’s profile is set out in Section 6.7 Mariam Veronica Abu Bakkar Seddek Head, Institutional Business

Mariam Veronica joined the Manager in July 2012 as Head of Compliance. She was appointed to be the Head of Institutional Business in March 2014. She graduated with a Bachelor of Science in Accounting from University of Wales Cardiff, United Kingdom in 1998. She worked as a teacher in the UK for a year before joining the Securities Commission in 1999. She served the SC for 8.5 years where she specialised in auditing asset management companies. Thereafter, she served as the Head of Compliance in a fund management company for 4 years. Rizal Abdullah Head, Compliance Rizal Abdullah joined the PRS Provider in March 2014 as Head of Compliance. He graduated with an LLB Laws from King’s College London, United Kingdom in 1998. He was called to the Malaysian Bar in 2000 and joined the SC in the same year. He served the SC

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for 5 years where he was involved in the investigation and prosecution of breaches of the Securities laws. Thereafter, he served in various other positions, including as a Group Chief Compliance officer for a public trustee, Head of Legal for a fund management company and General Counsel and Corporate Secretary for a non-profit organization under Bank Negara Malaysia. Rizal is the designated person responsible for compliance matters for the Funds.

6.7 The Investment Teams

The Manager’s various investment teams meet informally on a daily basis with a formal meeting (the investment sub-committee) occurring fifteen (15) times a year (at times considered appropriate), to amongst other things, monitor the changing investment landscape and re-assess market conditions in terms of opportunity and risk. This activity seeks to ensure the investment strategies and policies of all funds managed by the Manager are consistently matched with the prevailing market environment and outlook. As the fund management functions for the Fund has been delegated to the External Fund Manager, the designated fund manager for the Fund is Mohd Ezani bin Abu Yazid (Ezani) the Senior Portfolio Manager of the Externa l Fund Manager . Please refer to Ezani’s particulars in Section 6.11 below. The External Fund Manager will work closely with the Fixed Income and Research and Advisory team of the Manager which comprises Wong Yew Joe (Yew Joe), Senior Vice President, Fixed Income and Syhiful Zamri Bin Abdul Azid (Syhiful), Senior Vice President, Research and Advisory respectively. Please refer to the particulars of Yew Joe and Syhiful set out below. The External Fund Manager will actively manage the Fund in a disciplined fashion by investing in certain Islamic money market instruments as dictated by the Fund’s investment process and the Fund mandate. This will include managing the maturities of the instruments the Fund invests in, to amongst other things, target suitable returns. The External Fund Manager will however, remain cognizant of prevailing levels of risk including liquidity and other issues affecting capital preservation, because investing in the Fund is not the same as placing cash on deposit with a bank. The Investment Team of the Manager will work with the External Fund Manager by providing research input on salient economic issues and also on the appropriateness of the instruments to be included in the Fund portfolio. The Fund is also actively managed to accommodate certain cashflow requirements of its investors. Notwithstanding the direct involvement of the External Fund Manager in managing the Fund, the Investment Team Members of the Manager, also noted below, will offer focused input, continually challenging the investment thesis of the External Fund Manager. This activity occurs via the Investment sub-committee (noted above), where all investment decisions, views and portfolio outcomes are rigorously debated, scrutinized and tested with the intention of maximising a risk-return outcome consistent with client requirements and / or fund mandate guidelines.

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The Investment Team of the Manager: Wong Yew Joe Senior Vice President, Fixed Income Wong Yew Joe joined KIB in April 2011, bringing with him more than thirteen (13) years of experience in the fund management industry. Prior to this, he has been in RHB Investment Management Sdn Bhd (“RHBIM”) for a total of seven (7) years. As the Head of Fixed Income in RHBIM, he was responsible for all fixed income investments, totalling about RM 9 billion worth of funds managed by RHBIM. Prior to RHBIM, he was with SBB Asset Management Sdn Bhd for a year as a credit analyst. Before that, he was with BHLB Asset Management Sdn Bhd and his principal involvement there was in business development and corporate marketing. Yew Joe is a graduate from the University of Southern Queensland with a Bachelor’s Degree, majoring in Accounting and Finance. Syhiful Zamri bin Abdul Azid Senior Vice President, Research and Advisory Syhiful Zamri bin Abdul Azid joined KIB in April 2011. Prior to this, he was with RHB Investment Management Sdn Bhd (RHBIM) as Head of Fund Management Research for more than three (3) years. He has also been with KAF Investment Bank for more than five (5) years before joining RHBIM. He has wide experience in both equity and fixed income research and had exposures doing financial analysis and marketing of unit trust funds. He graduated with an Honours Degree from De Montfort University (UK) with Bachelor in Accounting and Finance. He has more than ten (10) years experience in the industry. Other fund managers include: Lee Sook Yee Chief Investment Officer Lee Sook Yee joined the Manager as the Chief Investment Officer (“CIO”) in March 2013, bringing with her more than twelve (12) years of experience in local and regional equities investment. Prior to this, Sook Yee was Head of Equities at Meridian Asset Management (“Meridian”), where she led an experienced team of fund managers/analysts in managing equities portfolios of more than RM1 billion in assets under management. At Meridian, she managed various local and regional funds. Before joining Meridian, Sook Yee was Vice President/Senior Portfolio Manager at Credit-Suisse Asset Management in Singapore where she co-managed mutual funds focusing on emerging Asian markets. She was also Associate Director/ Portfolio Manager with UOB-OSK Asset Management. Tammi Lim Geok Wah Senior Vice President, Equities Tammi Lim joined KIB in October 2011. Prior to this, she was attached to RHB Investment Management Sdn Bhd as Head of Equities for over four (4) years where she was responsible for the management of institutional funds, unit trust funds and corporate accounts. She began her career as an investment analyst in TA Securities Holding Berhad servicing both institutional and retail clients. Thereafter, she moved on to the fund management industry with Asialife Insurance Berhad and Manulife Insurance Berhad where she was responsible for the management of both company’s life funds as well as investment-linked funds. She has more than eighteen (18) years experience in the fund

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management industry. She graduated from the University of Toledo, Ohio with a Masters of Business Administration, majoring in Finance. Nik Hazim Nik Mohamed Senior Vice President, Investment Nik Hazim Nik Mohamed joined the Manager in April 2009 as a fund manager. Prior to this, he was with Permodalan Nasional Berhad (“PNB”) having almost fourteen (14) years experience in the company. During his stint in PNB, he had started out managing international funds for proprietary accounts and later on public funds in Singapore. He also has wide experience in managing local unit trust fund for PNB and had exposures doing financial analysis and marketing of unit trust funds. He graduated with an Honours Degree from Universiti Utara Malaysia in Bachelor in Business Administration majoring in Finance. Tan Lip Kwang Vice President, Equities Tan Lip Kwang joined Kenanga Group in May 2007. He started as an analyst in Kenanga Fund Management Berhad and trained as a generalist specializing in Malaysia market. He was promoted as a portfolio manager in August 2009 after obtaining his Capital Markets Services Representative’s Licence in July 2009. Prior to Kenanga Fund Management Berhad, he was an internal auditor with Public Bank for one and a half year. Lip Kwang holds a Bachelor Degree in Finance from Lancaster University and a MSC in Actuarial Science from City University of London. Lip Kwang was appointed as the portfolio manager of KIB on 1 November 2010.

6.8 Material Litigation As at 30 April 2014, save as disclosed below, the Manager is not engaged in any litigation or arbitration proceedings, either as plaintiff or defendant which has a material effect on the financial position of the Manager, and the board of directors of the Manager is not aware of any proceedings pending or threatened, or of any fact likely to give rise to any such proceedings which might materially and adversely affect the position or business of the Manager. An ex-employee of the Manager who was dismissed by the Manager has filed an action under section 20(3) of the Industrial Relations Act 1967 to challenge his dismissal. The ex-employee contends that his dismissal was without just cause or excuse and is seeking to be reinstated to his former position without any loss of salary and benefits. The matter came up for further submissions on 31 January 2011 before the Industrial Court in Kuching. The learned chairman then adjourned the matter and informed us that he will be handing down his written decision on the above matter in due course. As at 30 April 2014, the learned chairman has yet to deliver his decision on the case. The directors are of the opinion that the claim has no bearing on the performance of the Fund and that it has no adverse effect on the capability of the Manager in discharging its duties and responsibilities to the Unit Holders of the Fund.

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6.9 Conflict of Interest The directors and investment committee members should avoid conflicts of interest arising, or if conflicts arise, ensure that the Fund is not disadvantaged by the transaction concerned. Any transaction carried out for or on behalf of the Fund must be executed on terms that are the best available to the Fund and which are no less favourable to the Fund than arm’s length transactions between independent parties. In the event that any of the directors or investment committee members is directly or indirectly involved, he or she would have to abstain from being involved with any decision making process of the said transaction. KIB has in place policies and procedures which regulates its employees’ securities dealings. Quarterly declaration of securities trading is required of all employees to ensure that there is no potential conflict of interest between the employees’ securities trading and the execution of the employees’ duties to the company and customers of the company.

6.10 Retirement and Removal of Manager Manager’s Right to Retire The Manager has a right to retire in favour of some other corporation by giving to the Trustee three (3) months' notice in writing of their desire so to do, or such other period as the Trustee and the Manager may agree upon, and subject to the fulfilment of the following conditions: • the retiring Manager shall appoint such corporation by writing under the seal of the

retiring Manager as the fund manager of the Fund in its stead and assign and transfer to such corporation all its rights and duties as fund manager of the Fund;

• such corporation shall enter into such deed or deeds as the Trustee may consider to be necessary or desirable to secure the due performance of its duties as fund manager for the Fund; and

• upon the payment to the Trustee of all sums due from us to the Trustee at the date of such retirement, the retiring Manager shall be absolved and released from all further obligations under the Deed but without prejudice to the rights of the Trustee or any Unit Holder or other person in respect of any act or omission on our part prior to such retirement and the new fund manager may and shall thereafter exercise all the powers and enjoy all the rights and shall be subject to all the duties and obligations as fully as though such new fund manager had been originally a party to the Deed.

Removal of the Manager The Manager may be removed by the Trustee by way of a Special Resolution passed at a Unit Holders’ meeting (details on Unit Holders Meetings are provided in Chapter 10, Power to Call for Meetings) convened on the grounds that the Manager: • has failed or neglected to carry out their duties to the satisfaction of the Trustee and

the Trustee considers that it would be in the Unit Holders interest to do so after the Trustee has given notice to the Manager of its opinion and the reasons for that opinion, and has considered any representations made by the Manager in respect of that opinion, and after consultation with the relevant authorities;

• unless expressly directed otherwise by the relevant authorities, if the Manager is in breach of any of its obligations or duties under the Deed or the relevant laws, or has ceased to be eligible to be a fund manager under the relevant laws; or

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• the Manager has gone into liquidation, except for the purpose of amalgamation or reconstruction or some similar purpose, or has had a receiver appointed or has ceased to carry on business.

The Manager shall upon receipt of a written notice from the Trustee cease to be the fund manager of the Fund by the mere fact of the Manager’s receipt of the notice. The Trustee shall, at the same time, by writing appoint some other corporation already approved by the relevant authorities to be the fund manager of the Fund; such corporation shall have entered into such deed or deeds as the Trustee may consider to be necessary or desirable to secure the due performance of its duties as fund manager for the Fund.

6.11 External Fund Manager

Kenanga Islamic Investors Berhad (KIIB) Background Information The External Fund Manager was incorporated as a public company in 1997 under the Companies Act 1965 as Kenanga Unit Trust Berhad (“KUTB”) to solely conduct unit trust business in Malaysia. In 2009, pursuant to the rationalization and re-organization of the asset and unit trust management businesses of the K & N Kenanga Holdings Berhad group of companies (“Kenanga Group”), the business and assets of Kenanga Asset Management Sdn Bhd (“KAM”) a fund management company within the Kenanga Group was transferred to KUTB. KUTB subsequently applied for and was licensed as a fund manager under the Capital Markets and Services Act 2007. KUTB was renamed as Kenanga Fund Management Berhad (KFMB) following the completion of the rationalization and re-organization exercise. In November 2010, KFMB transferred its business and employees to Kenanga Investors Berhad (“KIB”) and subsequently changed its name to Kenanga Islamic Investors Berhad (“KIIB”) in August 2011. Pursuant to the Kenanga Group business plans for KIIB to become a fully operational Islamic fund management business, KIIB applied for and received its Islamic fund management licence from the Securities Commission in April 2012. KIIB is the Kenanga Group’s asset management arm focused on exclusively providing Shariah-compliant investment products to the both domestic and regional markets. Effective 1 April 2013, KIIB is a wholly-owned subsidiary of KIB. Below are the profiles of the key personnel of the External Fund Manager. Shahariah Binti Shaharudin Chief Executive Officer/ Executive Director Shahariah was appointed as Chief Executive Officer / Executive director of Kenanga Islamic Investors Berhad on 20 March 2014. In April 2011, she joined KIB as Head of Institutional Business overseeing Manager’s institutional business. Shahariah brings along with her 20 years of experience in the financial services industry. She began her career in a local bank and has extensive experience in both retail and corporate banking. Subsequently she joined a stock broking company as Head of Dealing managing Institutional Trade. In 2006, she joined a local fund house under Strategic Business and Market Development Division where her core responsibility was sourcing business and servicing both retail and wholesale clients

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ranging from unit trust, corporate and government agencies to insurance companies. She is currently a holder of the Capital Market Services Representatives License for fund management. She graduated with BA Degree in Business Studies from Knox College, Illinois and Master of Arts in Economics from University of Illinois, Springfield, USA. Chung Yee Wah Chief Investment Officer Yee Wah joined KIIB as the Chief Investment Officer in February 2012. He brings with him more than 18 years of experience in the investment field, managing domestic and regional equity portfolios. Yee Wah started off as an investment analyst in 1993 and had worked in UMBC Securities Sdn Bhd and James Capel (Malaysia) Sdn Bhd (later known as HSBC Securities (Malaysia) Sdn Bhd) before he joined Abu Dhabi Investment Authority as a fund manager in 1998. He returned to Malaysia in 2007 and joined AmInvestment Bank Berhad as an Associate Director for institutional sales (equity). Yee Wah then moved on to UOB-OSK Asset Management Sdn Bhd as an Associate Director to manage institutional funds before he joined KIIB. Yee Wah earned a BBA from the National University of Malaysia with a major in finance. Mohd Ezani Bin Abu Yazid Senior Portfolio Manager Mohd Ezani bin Abu Yazid joined the Manager in March 2011 and was transferred to KIIB in July 2012. He has eighteen (18) years experience in the disciplines of treasury & money market management. In 1993, he began his career in the Treasury Department of Bank Utama (M) Berhad and in 1996, joined Bolton Finance Berhad (later known as Alliance Finance Berhad). He moved into the funds management industry in 2001 when he joined BHLB Asset Management Sdn Bhd (BAM). BAM later merged with SBB Asset Management (SBBAM) (later known as SBB Investment Management Sdn Bhd) and Ezani retained his position until he joined RHB Investment Management Sdn Bhd (RHBIM) in May 2006. During his tenure in RHBIM he managed wholesale and retail cash funds. His other wide experience includes central dealing of equity, fixed income and foreign exchange. He has a Diploma in AgriBusiness from University Putra Malaysia. Ezani is a holder of the Capital Markets Services Representative’s License. Roles and Duties of the External Investment Manager or KIIB The Manager has delegated the investment management functions for the Fund to KIIB, an Islamic fund management company. KIIB shall manage, realize, invest, reinvest or deal with the Fund according to the objective of the Fund and requirements of the Shariah. KIIB will at all times act with bona fides and in the best interests and for the benefit of the Fund and shall ensure that all investment transactions will be effected in accordance with the objective of the Fund and requirements of the Shariah.

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CHAPTER 7: TRUSTEE

7.1 Background of the Trustee CIMB Islamic Trustee Berhad was incorporated on 19 January 1988 and registered as a trust company under the Trust Companies Act, 1949 and having its registered office at Level 13, Menara CIMB, Jalan Stesen Sentral 2, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia. The Trustee is qualified to act as a trustee for collective investment schemes approved under the Capital Markets and Services Act 2007. CIMB Islamic Trustee Berhad has an authorised capital of RM5,000,000 divided into 500,000 ordinary shares of RM10 each of which the total issued capital is RM2,000,000 divided into 200,000 ordinary shares of RM10 each, and the total paid up capital is RM1,000,000 divided into 200,000 ordinary shares of RM10 each and partly paid-up at RM5 each. 7.2 Financial position of the Trustee The following is a summary of the past performance of the Trustee based on audited accounts for the last 3 years:

Financial Year Ended 31 December

2013 (RM’000)

2012 (RM’000)

2011 (RM’000)

Paid-up capital 1,000 1,000 1,000

Shareholders’ funds 6,573 6,311 5,317

Turnover 2,788 4,000 5,164

Profit before taxation 370 1,386 2,322

Profit after taxation 263 993 1,740

7.3 Experience in Trustee Business As at 30 April 2014, CIMB Islamic Trustee Berhad acts as trustee to two (2) real estate investment trust funds, twenty four (24) unit trust funds, sixteen (16) wholesale funds and one (1) private retirement scheme (consisting of three (3) funds) and has more than twenty four (24) years of experience as trustee to unit trust funds. CIMB Islamic Trustee Berhad is supported by eighteen (18) staff, constituting eleven (11) executives and seven (7) non-executives as at 30 April 2014. In addition to overseeing these funds, CIMB Islamic Trustee Berhad also acts as trustee to private debt securities issues such as bonds and notes. Other than being the administrator of deceased’s estates, executor of wills, trustee for minors or incapacitated persons, CIMB Islamic Trustee also acts as trustee for public, charitable, staff retirement, and pension/ gratuity fund scheme, custodian trustee for associations, clubs and others.

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7.4 The Board of Directors The following table sets out information regarding the Board of Directors of the Trustee:

Name Directorship

Zahardin bin Omardin Independent Director and Chairman, Non-Executive Chan Swee Liang Carolina Non-Independent Director, Non-Executive Liew Pik Yoong Non-Independent Director, Executive Lee Kooi Yoke Chief Operating Officer 7.5 Key Personnel of the Trustee Liew Pik Yoong (Head/Director, Group Trustee Servic es) Ms Liew is responsible for the overall business direction and management of the trustee company. She joined CIMB group in January 2011 and has more than twenty five (25) years experience in the financial market and the securities industry. Prior to joining CIMB group, she held the positions of Head/Director, Investors & Intermediaries and Head, Securities Services for custody and fund services product with a local international bank. Prior to that, she was Chief Operating Officer with a local foreign-owned trustee company and was Vice-President / Head of Department with a local foreign bank where she was responsible for custody services in addition to supporting share margin and unit trust product. She has a degree in the Institute of Chartered Secretaries & Administrators (ICSA). Lee Kooi Yoke (Chief Operating Officer) Ms Lee holds a Bachelor Degree in Administration (Finance) from Griffith University, Australia; and a member of CPA Australia, Malaysia Institute of Accountant and Financial Planning Association Malaysia. She has more than twenty (21) years of working experience in the financial industry. Prior to joining CIMB Trustee Services, she was heading the operations of a unit trust management company and before that investment operations of one of the largest insurance company. Jeslin Ng Lai Peng (Director, Corporate Trust) Ms Ng holds a Bachelor of Arts (Honours) Degree in Business Administration from the University of Bolton and London Chamber of Commerce and Industry (LCCI) qualification and has more than ten (10) years of experience in accounting and trust operations. Azida Binti Abdul Aziz, (Associate Director, Corpor ate Trust) She holds a Diploma in Accountancy from Universiti Teknologi Mara. She has more than ten (10) years experience in trust operations. Azmi Bin Hussin, (Associate Director, Corporate Tru st) Azmi holds a Diploma in Business Administration from Binary Business School. He has more than eight (8) years experience in Unit Trust Operations and Fund Accounting. Prior to joining CIMB Islamic Trustee Berhad, he was attached to a multinational company providing fund administration services. Yvonne Fernandez, (Manager, Legal and Compliance) Ms Yvonne holds Degree in Bachelor of Laws from University of London (External Programme), Master of Laws from University of Malaya and Certificate in Legal Practice.

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She joined CIMB Trustee Services in November 2007. Prior to joining CIMB she was in legal practice for three (3) years doing civil litigation. She handles the vetting of the legal documentation and all related legal and compliance issues arising from corporate trust. 7.6 Trustee’s Declaration The Trustee is independent of the Manager. The Trustee will carry out transactions on an arm’s length basis and on terms which are best available for the Fund, as well as act at all times in the best interest of the Fund’s investors. The Trustee also has adequate procedures and processes in place to prevent or control conflicts of interest. 7.7 Duties and responsibilities of the Trustee

The Trustee’s functions, duties and responsibilities are set out in the Deed. The general function, duties and responsibility of the Trustee include, but are not limited to, the following: a) Take into custody the investments of the Fund and hold the investments in trust for the

Unit Holders; b) Ensure that the Manager operates and administers the Fund in accordance with the

provisions of the Deed, the Guidelines and acceptable business practice within the fund management industry;

c) As soon as practicable notify the SC of any irregularity or breach of the provisions of the Deed, the Guidelines and any other matters which in the Trustee's opinions may indicate that the interests of Unit Holders are not served;

d) Exercise reasonable diligence in carrying out its functions and duties, in actively monitoring the operations and management of the Fund by the Manager to safeguard the interests of Unit Holders;

e) Maintain, or cause the Manager to maintain, proper accounting records and other records as are necessary to enable a complete and accurate view of the Fund to be formed and to ensure that the Fund is operated and managed in accordance with the Deed, Information Memorandum, the Guidelines and securities law.; and

f) Require that the accounts be audited at least annually.

The Trustee has covenanted in the Deed that it will exercise all due diligence and vigilance in carrying out its functions and duties, and in safeguarding the rights and interests of Investors.

7.8 Trustee’s Statement of Responsibility The Trustee has given its willingness to assume the position as Trustee of the Fund and all the obligations in accordance with the Deed, all relevant laws and rules of law.

7.9 Trustee’s Delegate

CIMB Islamic Trustee Berhad has appointed CIMB Islamic Nominees (Tempatan) Sdn Bhd (Company No.8424 H), as the Trustee’s delegate to perform custodial function. CIMB Islamic Nominees (Tempatan) Sdn Bhd (Company No.8424 H), is a wholly owned subsidiary

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of CIMB Islamic Bank Berhad. Its custodial function includes safekeeping, settlement and corporate action related processing and cash and security reporting,

All investments are automatically registered in the name of the Fund. CIMB Islamic Nominees (Tempatan) Sdn Bhd (Company No.8424 H) acts only in accordance with instructions from the Trustee.

7.10 Material Litigation & Arbitration As at 30 April 2014, the Trustee is not engaged in any material litigation and arbitration, including those pending or threatened, and is not aware of any facts likely to give rise to any proceedings which might materially affect the business/financial position of the Trustee or any of its delegates. Trustee’s Obligation

The Trustee’s obligation in respect of monies paid by an investor for the application of units arises when the monies are received in the relevant account of the Trustee for the Funds and the Trustee’s obligation is discharged once it has paid the redemption amount to the Manager.

7.11 Retirement and Removal of the Trustee Trustee’s Right to Retire Provided always that the Manager has in place a corporation approved by the relevant authorities to act as the trustee of the Fund, the Trustee may retire upon the expiration of three (3) months' (or such other period as the Manager and the Trustee may agree upon) notice in writing to the Manager of its desire so to do. The Trustee shall on retirement vest or transfer, or cause to be vested or transferred, the custody of or control over the assets of the Fund in or to such new trustee and shall deliver to such new trustee all books, documents, records and other property whatsoever relating to the Fund and in the Trustee’s possession. The costs and expenses incidental thereto shall be paid from the Fund. Removal of the Trustee The Manager is obliged to give Unit Holders notice in writing to consider the removal of the Trustee if the Trustee fails or neglects to carry out its duties as stipulated in the Deed and under the relevant laws. The Manager shall take all reasonable steps to replace the Trustee as soon as practicable after becoming aware that:

• the Trustee has ceased to exist;

• the Trustee has not been validly appointed;

• the Trustee is not eligible to be appointed or act as a trustee under the Guidelines;

• the Trustee has failed or refused to act as Trustee in accordance with the provisions and covenants of the Deed and the provisions of the Guidelines;

• a receiver has been appointed over the whole or substantial part of the assets or undertaking of the Trustee and has not ceased to act under the appointment, or a petition is presented for the winding up of the Trustee (other than for the purpose of

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and followed by a reconstruction, unless during or following such reconstruction the Trustee becomes or is declared to be insolvent); or

• the Trustee is under investigation for conduct that contravenes the Trust Companies Act 1949, the Trustee Act 1949, the Companies Act 1965 or any securities law.

The Trustee may be removed and another trustee may be appointed by Special Resolution of the Unit Holders at a duly convened meeting of which notice has been given to the Unit Holders in accordance with the Deed (details on Unit Holders Meetings are provided in Chapter 10, Power to Call for Meetings).

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8.1 IBFIM IBFIM has been appointed as the Shariah Adviser for the Fund. IBFIM is scheduled to meet the Manager and/or the Investment Committee of the Fund every quarter, where IBFIM will advise the Manager on the selection of investment tools to be adopted. IBFIM will also counsel the mechanism of the operations of the Fund’s activities to ensure that the operations of the Fund comply with Shariah requirements.

8.2 General Information of IBFIM IBFIM was incorporated as a company limited by guarantee and not having share capital in Malaysia under the Companies Act, 1965 on 15 February 2007. 8.3 Experience in Advisory and Services IBFIM is registered with the SC to act as a Shariah Adviser for Shariah-based collective investment schemes and sukuk issuance. IBFIM is also involved in numerous Shariah-based private mandates as well as the Shariah Adviser for Islamic REITs and Islamic asset management houses. As at 30 April 2014, IBFIM has total staff strength of 61 employees, and has 77 funds under its supervision.

8.4 Roles and Responsibilities of IBFIM as the Shar iah Adviser As the Shariah Adviser, the role of IBFIM is to ensure that the operations and investments of the Fund are in compliance with Shariah requirements.The Shariah Adviser reviews the Fund’s investments on a monthly basis to ensure compliance with Shariah requirements at all times and meets with the Manager on a quarterly basis to review and advise on the Fund’s compliance with Shariah requirements. The final responsibility for ensuring Shariah compliance of the Fund with Shariah requirements in all relevant aspects rests solely with the Manager.

In line with the SC Guidelines, the roles of IBFIM as the Shariah Adviser are; 1. ensuring that the Shariah-based unit trust fund (“the Fund”) is managed and

administered in accordance with the Shariah principles; 2. providing expertise and guidance for the Fund in all matters relating to Shariah

principles, including on the Fund’s deed and information memorandum, its structure and investment process, and other operational and administrative matters;

3. consulting the SC who may consult the Shariah Advisory Council where there is any

ambiguity or uncertainty as to an investment, instrument, system, procedure and/or process;

CHAPTER 8: SHARIAH ADVISER

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4. scrutinising the Fund’s compliance report as provided by the compliance officer, transaction report provided by or duly approved by the trustee and any other report deemed necessary for the purpose of ensuring that the Fund’s investments are in line with the Shariah principles;

5. preparing a report to be included in the Fund’s quarterly and annual report certifying

whether the Fund has been managed and administered in accordance with the Shariah principles;

6. ensuring that the Fund comply, with any guideline, ruling or decision issued by the SC,

with regard to Shariah matters; 7. vetting and advising on the promotional materials of the Fund; and 8. assisting and attending to any ad-hoc meeting called by the SC and/or any other relevant

authority.

8.5 Profile of the Shariah Team IBFIM’s Shariah team consists of the following personnel; Dato’ Mohd Bakir Bin Haji Mansor ( Distinguished Shariah Advisor ) Dato’ Mohd Bakir Bin Haji Mansor is a member of the Shariah Supervisory Council of Bank Islam Malaysia Berhad (BIMB), the Shariah Advisory Body of Syarikat Takaful Malaysia Berhad, the Shariah Advisory Committee of the Employees Provident Fund and sits on the Shariah Panel Committee of Amanah Ikhtiar Malaysia. He is also the Chairman of the Shariah Advisory Committee of BIMB Securities Sdn. Bhd. and the Shariah Advisory Committee of the Association of Islamic Banking Institutions Malaysia. Prior to joining IBFIM, Mohd Bakir was the Shariah Coordinator at BIMB, from 1984 to 2001. Previously, he served at the National Council for Islamic Religious Affairs in the Prime Minister's Department for 10 years from 1971. He was also a Chief Assistant Director at the Islamic Research Centre for 4 years from 1981. He holds a Shahadah Ulya from Kolej Islam Malaya. Dato’ Mohd Bakir was awarded “Tokoh Maulidur Rasul 1434H/2013M” by the government of Malaysia for his contributions in promoting the Islamic finance industry. Mohd Nasir Bin Ismail ( Shariah Advisor ) Mohd Nasir Bin Ismail, IFP, has been with IBFIM since its incorporation. He is responsible in providing Shariah input on the advisory, consultancy and research functions with regard to Islamic banking, takaful, Islamic capital market and Shariah-based unit trust funds. Prior to joining IBFIM, he was with Institut Pengajian Ilmu-Ilmu Islam, Kelantan. He graduated with a Bachelor of Shariah (Honours) from the University of Malaya in 1998. He is also the designated person responsible for Shariah matters related to the Fund. Ahmad Zakirullah Bin Mohamed Shaarani ( Senior Shariah Officer ) Ahmad Zakirullah Bin Mohamed Shaarani joined IBFIM in February 2008. He is responsible in providing Shariah input on the advisory, consultancy and research functions with regard to Islamic banking, takaful, Islamic capital market and Shariah-based unit trust

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funds. Prior to joining IBFIM, he served at University Sains Islam Malaysia before joining PTPL College. He obtained his Master in Islamic Revealed Knowledge and Human Sciences from International Islamic University of Malaysia (Honours), Bachelor of Shariah Islamiyyah (Honours) from Al-Azhar University, Egypt and Diploma of Shariah Islamiyyah (Honours) from Higher Institute of Islamic and Arabic Language (MADIWA). He is also the designated person responsible for Shariah matters related to the Fund. Budeeman Mana ( Senior Shariah Officer) Budeeman Mana joined IBFIM in July 2011. He is responsible in providing Shariah input on the advisory, consultancy and research functions with regard to Islamic banking, takaful, Islamic capital market and Shariah-compliant unit trust funds. Prior to joining IBFIM, he was with Sri Cempaka School, Damansara Heights. He graduated with a Bachelor of Islamic Revealed Knowledge and Heritage (Fiqh and Usul al-Fiqh) (Honours) from International Islamic University Malaysia in 2010. He is also the designated person responsible for Shariah matters related to the Funds.

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CHAPTER 9: RIGHTS AND LIABILITIES OF UNIT HOLDERS

9.1 Unit Holders’ Rights As a Unit Holder of the Fund, and subject to the provisions of the Deed, you have the right: 1. to receive distributions, if any, from the Fund; 2. to participate in any increase in the NAV of Units of the Fund; 3. to call for Unit Holders’ Meetings and to vote for the removal of the Trustee or the

Manager through a Special Resolution; 4. to receive monthly statements, quarterly and annual reports on the Fund; and 5. to exercise such other rights and privileges as provided for in the Deed. However, Unit Holders would not have the right to require the transfer to them any of the investments of the Fund. Neither would Unit Holders have the right to interfere with or to question the exercise by the Trustee (or by the Manager on the Trustee’s behalf) of the rights of the Trustee as trustee of the investments of the Fund.

9.2 Unit Holders’ Liabilities As a Unit Holder of the Fund, and subject to the provisions of the Deed, Unit Holders’ liabilities would be limited to the following: Unit Holders would not be liable for nor would Unit Holders be required to pay any amount in addition to the payment for Units of the Fund as set out in this Information Memorandum and the Deed. Unit Holders would not be liable to indemnify the Trustee and/or the Manager in the event that the liabilities incurred by the Trustee and/or the Manager on behalf of the Fund exceed the NAV of the Fund.

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CHAPTER 10: POWER TO CALL FOR UNIT HOLDERS ’ MEETINGS

10.1 Meetings Directed by the Unit Holders Unit Holders may call for a meeting for any purpose. Unless otherwise required or allowed by the relevant laws, the Manager shall, within twenty-one (21) days of receiving a direction from not less than fifty (50) or one-tenth (1/10) of Unit Holders at the registered office of the Manager, summon a meeting of the Unit Holders by: (a) sending by post at least fourteen (14) days before the date of the proposed meeting a

notice of the proposed meeting to all the Unit Holders; and (b) specifying in the notice the place and time of the meeting and the terms of the

resolutions to be proposed at the meeting.

10.2 Meetings Summoned by the Trustee The Trustee may summon a meeting of Unit Holders for any purpose whatsoever by: (a) giving at least fourteen (14) days written notice of the meeting to Unit Holders; and (b) specifying in the notice the place and time of the meeting and the terms of the

resolutions to be proposed at the meeting.

10.3 Meetings Summoned by the Manager The Manager may summon a meeting of Unit Holders for any purpose whatsoever by: (a) giving at least fourteen (14) days written notice of the meeting to Unit Holders; and (b) specifying in the notice the place and time of the meeting and the terms of the

resolutions to be proposed at the meeting.

10.4 Provisions Governing Unit Holders’ Meetings Quorum The quorum required for a meeting of the Unit Holders shall be five (5) Unit Holders, whether present in person or by proxy, provided that if the Fund has five (5) or less Unit Holders, the quorum required for a meeting of the Unit Holders of the Fund shall be two (2) Unit Holders, whether present in person or by proxy; if the meeting has been convened for the purpose of voting on a Special Resolution, the Unit Holders present in person or by proxy must hold in aggregate at least twenty five per centum (25%) of the Units in circulation at the time of the meeting.

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If within one (1) hour from the time appointed for the meeting a quorum is not present, the meeting if convened upon the request of Unit Holders shall be dissolved. In any other case, it shall stand adjourned to such day and time seven (7) days thereafter and to such place as may be appointed by the Chairman; at such adjourned meeting, the Unit Holders present in person or by proxy shall be the quorum for the transaction of business including the passing of Special Resolutions if the quorum prescribed by the Deed is not present after one (1) hour from the time appointed for the adjourned meeting. Resolutions passed at a meeting of Unit Holders bind all Unit Holders whether or not they were present at the meeting at which the resolutions were passed. No objection may be made as to any vote cast unless such objection is made at the meeting. Voting by Proxy Every instrument of proxy whether for a specific meeting or otherwise shall, as nearly as circumstances admit, be in the following form or in such other form as the Manager may accept: I/We, ..................................., being a Unit Holder of ......... Units in the ..................... Fund, hereby appoint ............................. or failing him/her, the Chairman of the meeting, as my/our proxy to vote for me/us and on my/our behalf at the Unit Holders' meeting to be held on the ........ day of ................ 20.... and at any adjournment thereof. My said proxy has my instructions to vote: (a)* in favour of the resolutions as stated in the notice of meeting; (b)* against the resolutions as stated in the notice of meeting; (c)* as he/she deems fit in respect of the resolutions as stated in the notice of meeting. * Delete as applicable SIGNED by the said .................... on the .......... day of ........................ 20.... in the presence of: (Witness's signature) (Signature of Unit Holder) The instrument appointing a proxy must be duly stamped, if required, and deposited at the office of the Manager not less than forty-eight (48) hours before the time appointed for the meeting or adjourned meeting as the case may be at which the person named in such instrument proposes to vote. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or the power of attorney or other authority under which the proxy was signed or the sale of Units in respect of which the proxy was given provided that no intimation in writing of such death, insanity, revocation or sale shall have been received at the place so appointed for the deposit of proxies or if no such place is appointed at the business office of the Manager before the commencement of the meeting or adjourned meeting at which the proxy is used. Chairman of the Meeting The meeting will be chaired if the meeting was convened at the instance of the Unit Holders or the Trustee, by a person appointed by the Unit Holders present at the meeting or, where no such appointment is made, a nominee of the Trustee; or if the meeting was convened at the instance of the Manager, by a person appointed by the Manager.

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The decision of the Chairman of the meeting on any matter shall be final.

10.5 Termination of the Fund The Fund may be terminated or wound up should the following events occur:

• The SC’s approval is revoked under section 212(7)(A) of the Act; • A Special Resolution is passed at a Unit Holders’ meeting to terminate or wind up the

Fund; and • Such other events and situations as provided in the Deed.

Upon the termination of the Fund, the Trustee shall:

a) sell all the assets of the Fund then remaining in its hands and pay out of the Fund any

liabilities of the Fund; such sale and payment shall be carried out and completed in such manner and within such period as the Trustee considers to be in the best interests of the Unit Holders; and

b) from time to time distribute to the Unit Holders, in proportion to the number of Units held

by them respectively:

i) the net cash proceeds available for the purpose of such distribution and derived from the sale of the investments and assets of the Fund less any payments for liabilities of the Fund; and

ii) any available Cash Produce;

provided always that the Trustee shall not be bound, except in the case of final distribution, to distribute any of the moneys for the time being in his hands the amount of which is insufficient for payment to the Unit Holders of fifty (50) sen in respect of each Unit and provided also that the Trustee shall be entitled to retain out of any such moneys in his hands full provision for all costs, charges, taxes, expenses, claims and demands incurred, made or anticipated by the Trustee in connection with or arising out of the winding-up of the Fund and, out of the moneys so retained, to be indemnified against any such costs, charges, taxes, expenses, claims and demands; each such distribution shall be made only against the production of such evidence as the Trustee may require of the title of the Unit Holder relating to the Units in respect of which the distribution is made. In the event of the Fund is terminated, the Trustee shall be at liberty to call upon the Manager to grant the Trustee, and the Manager shall so grant, a full and complete release from the Deed and the Manager shall indemnify the Trustee against any claims arising out of the Trustee's execution of the Deed provided always that such claims have not been caused by any failure on the part of the Trustee to exercise the degree of care and diligence required of a trustee as contemplated by the Deed and all relevant laws.

Where the termination of the Fund and the winding-up of the Fund have been occasioned by any of the events set out herein: a) if the Manager has gone into liquidation, except for the purpose of reconstruction or

amalgamation upon terms previously approved in writing by the Trustee and the relevant authorities;

b) if, in the opinion of the Trustee, the Manager has ceased to carry on business; or

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c) if, in the opinion of the Trustee, the Manager has to the prejudice of Unit Holders failed to comply with the provisions of the Deed or contravened any of the provisions of any relevant law;

the Trustee shall summon for a Unit Holders’ meeting to get directions from the Unit Holders. If a Special Resolution is passed to terminate the trust and wind-up the Fund, the Trustee shall apply to the Court for an order confirming such Special Resolution. The Trustee shall, as soon as it becomes aware that the Fund is to be terminated and wound-up, inform the relevant authorities of the same. The Trustee shall also arrange for a final review and audit of the final accounts of the Fund by the auditor of the Fund.

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CHAPTER 11: OTHER INFORMATION

11.1 Unclaimed Moneys Policy Redemption proceeds payable to Unit Holders who have requested for full or partial redemption of their investments in the Fund that remain unclaimed after twelve (12) months as prescribed by the Unclaimed Moneys Act, 1965 (revised 1989), shall be lodged with the Registrar of Unclaimed Moneys in accordance with the provisions of the Unclaimed Moneys Act, 1965.

11.2 Anti Money Laundering Policy Application for Units must be accompanied by proper identification documents for our verification. All Investors will be checked against various reliable sources for money laundering information. Any cases which are suspicious will be reported to our compliance officer who will then report the matter to the SC and BNM. Money laundering is a process intended to conceal the benefits derived from unlawful activities which are related, directly or indirectly, to any serious offence so that they appear to have originated from a legitimate source. The Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLA) is the act that provides for the offence of money laundering and also the measures to be taken for the prevention of money laundering and terrorism financing offences. The Financial Intelligence and Enforcement Department of BNM has been established to carry out the functions as the competent authority under the AMLA. All market intermediaries under the CMSA and fund management companies approved by the SC under the CMSA are obliged to comply with the provisions of the AMLA.

11.3 Regulatory Approval The Fund is subject to the approval of the SC under section 212 of the Act.

11.4 No Guarantee The Manager of the Fund does not guarantee the performance or success of the Fund. Investors are advised to read the Information Memorandum and obtain professional advice before subscribing to the Fund.

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11.5 Enquiries All enquiries about the investment should be directed in writing to:- Kenanga Investors Berhad Suite 12.02, 12th Floor Kenanga International Jalan Sultan Ismail, 50250 Kuala Lumpur Telephone No.: 03-2057 3688/ 03-2713 3188 Facsimile No.: 03-2161 8807/ 03-2713 5868 Email: investorservices@kenanga.com.my

Kenanga Investors Berhad Suite 12.02, 12th floor, Kenanga International

Jalan Sultan Ismail, 50250 Kuala Lumpur Malaysia Tel: 03-2057 3688 Fax: 03-2161 8807/ 03-2713 5868 Website: www.kenangainvestors.com.my Email: investorservices@kenanga.com.my