Kenanga Cash Plus Fund€¦ · ii Kenanga Cash Plus Fund Interim Report Manager: Kenanga Investors Berhad (Company No. 199501024358 (353563-P) Registered Office Level 17, Kenanga

Kenanga Cash Plus Fund

InTeRIM RePORT

For the Financial Period from 1 November 2019 to 30 April 2020

Contents Pages

Corporate Directory ii

Directory of Manager’s Offices iii

Fund information 1

Manager’s Report 2 - 6

Fund Performance 7 - 9

Trustee’s Report 10

Statement by the Manager 11

Financial Statements 12 - 40

KENANGA CASH PLUS FUND

ii Kenanga Cash Plus Fund Interim Report

Manager: Kenanga Investors Berhad (Company No. 199501024358 (353563-P)

Registered OfficeLevel 17, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 2888Fax: 03-2172 2999

Business OfficeLevel 14, Kenanga Tower,237, Jalan Tun Razak,50400 Kuala Lumpur, Malaysia.Tel: 03-2172 3000Fax: 03-2172 3080E-mail: [email protected] Website: www.KenangaInvestors.com.my

Board of DirectorsDatuk Syed Ahmad Alwee Alsree (Chairman)Syed Zafilen Syed Alwee (Independent

Director)Peter John Rayner (Independent

Director)Imran Devindran Abdullah (Independent

Director)Ismitz Matthew De AlwisNorazian Ahmad Tajuddin (Independent

Director)

Investment CommitteeSyed Zafilen Syed Alwee (Independent

Member)Peter John Rayner (Independent Member)Imran Devindran Abdullah (Independent

Member)Ismitz Matthew De AlwisNorazian Ahmad Tajuddin (Independent

Member)

Company Secretary: Norliza Abd Samad (MAICSA 7011089)

Level 17, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia

Trustee: CIMB Commerce Trustee Berhad Company No. 199401027349 (313031-A)

Registered Office Business OfficeLevel 13, Menara CIMB Level 21, Menara CIMBJalan Stesen Sentral 2 Jalan Stesen Sentral 2Kuala Lumpur Sentral Kuala Lumpur Sentral50490 Kuala Lumpur 50490 Kuala LumpurTel: 03-2261 8888 Tel: 03-2261 8888Fax: 03-2261 0099 Fax: 03-2261 9889 Website: www.cimb.com

Auditor: Ernst & Young PLT Company No. 202006000003 (LLP0022760-LCA) & AF 0039

Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

Tax Adviser: Ernst & Young Tax Consultants Sdn Bhd Company No. 198901002487 (179793-K)

Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

Membership: Federation of Investment Managers Malaysia (FiMM)

19-06-1, 6th Floor, Wisma Tune, 19, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia.Tel: 03-2093 2600 Fax: 03-2093 2700 Website: www.fimm.com.my

CORPORATE DIRECTORY

Kenanga Cash Plus Fund Interim Report iii

DIRECTORY OF MANAGER’S OFFICES

Regional Branch Offices:

Kuala LumpurLevel 13, Kenanga Tower237, Jalan Tun Razak50400 Kuala Lumpur, MalaysiaTel : 03-2172 3123Fax : 03-2172 3133 MelakaNo. 25-1, Jalan Kota Laksamana 2/17 Taman Kota Laksamana, Seksyen 2 75200 MelakaTel : 06-281 8913 / 06-282 0518Fax : 06-281 4286

KlangNo. 12, Jalan Batai Laut 3, Taman Intan 41300 Klang, Selangor Darul EhsanTel : 03-3341 8818 / 03-3348 7889Fax : 03-3341 8816

Penang5.04, 5th Floor, Menara Boustead Penang No. 39, Jalan Sultan Ahmad Shah10050 PenangTel : 04-210 6628Fax : 04-210 6644 Miri2nd Floor, Lot 1264,Centre Point Commercial CentreJalan Melayu98000 Miri, SarawakTel : 085-416 866Fax : 085-322 340

Seremban2nd Floor, No. 1D-2, Jalan Tuanku Munawir70000 Seremban, Negeri SembilanTel : 06-761 5678Fax : 06-761 2242

Johor BahruNo. 63Jalan Molek 3/1,Taman Molek81100 Johor Bahru, JohorTel : 07-288 1683Fax : 07-288 1693 Kuching1st Floor, No 71Lot 10900, Jalan Tun Jugah93350 Kuching, SarawakTel : 082-572 228Fax : 082-572 229

KuantanGround Floor Shop,No. B8, Jalan Tun Ismail 125000 Kuantan, PahangTel : 09-514 3688Fax : 09-514 3838

IpohSuite 1, 2nd Floor,No. 63, Persiaran Greenhill30450 Ipoh, PerakTel : 05-254 7573 / 7570 / 7575Fax : 05-254 7606 Kota KinabaluLevel 8, Wisma Great EasternNo. 68, Jalan Gaya,88000 Kota Kinabalu, Sabah Tel : 088-203 063Fax : 088-203 062

Petaling Jaya44B, Jalan SS21/35Damansara Utama47400 Petaling Jaya, SelangorTel : 03-7710 8828Fax : 03-7710 8830

1 Kenanga Cash Plus Fund Interim Report

1. FUND INFORMATION

1.1 Fund Name

Kenanga Cash Plus Fund (KCPF or the Fund)

1.2 Fund Category / Type

Fixed Income / Income

1.3 Investment Objective

Aims to provide investors a regular stream of income through investments in short to medium-term fixed income instruments with high level of liquidity.

1.4 Investment strategy

To achieve the objective of the Fund, it will invest in high quality short to medium-term fixed income instruments with minimum credit ratings of A3 or P2 (by RAM) or equivalent rating by other recognized rating agencies.

1.5 Duration

The Fund was launched on 26 October 2006 and shall exist as long as it appears to the Manager and the Trustee that it is in the interests of the unit holders for it to continue.

1.6 Performance Benchmark

Maybank 1-month Fixed Deposit Rate

1.7 Distribution Policy

Subject to the availability of income, the Fund will distribute income on a monthly basis.

1.8 Breakdown of unit holdings of the Fund as at 30 April 2020

Size of holdings No. of unit holders No. of units held5,000 and below 2,810 1,383,3445,001 – 10,000 68 474,94910,001 – 50,000 177 4,495,19850,001 – 500,000 98 11,912,519500,001 and above 10 21,825,855Total 3,163 40,091,865

Kenanga Cash Plus Fund Interim Report 2

2. MANAGER’S REPORT

2.1 Explanation on whether the Fund has achieved its investment objective

The Fund has achieved its investment objective of providing investors a regular stream of income through investments in short to medium term fixed income instruments with high level of liquidity.

2.2 Comparison between the Fund’s performance and performance of the benchmark

Performance Chart since launch (26/10/2006 - 30/4/2020)Kenanga Cash Plus Fund vs 1-month Fixed Deposit Rate

60% Cumulative Return, Launch to 30/04/2020

50

40

30

20

10

0

Kenanga Cash Plus : 46.79 Maybank 1-month Fixed Deposit Rate : 47.98

Oct

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Jun

14

Dec

14

Jun

15

Dec

15

Jun

16

Dec

16

Jun

17

Dec

17

Jun

18

Dec

18

Jun

19

Dec

19

Apr

20

Source: Novagni Analytics and Advisory

2.3 Investment strategies and policies employed during the financial period under review

During the financial period under review, the Fund invested in high quality short to medium term fixed income instruments with minimum credit ratings of A3 or P2 (by RAM) or equivalent rating by other recognized rating agencies.

2.4 The Fund’s asset allocation as at 30 April 2020 and comparison with the previous financial period

Asset 30 Apr 2020 30 Apr 2019Unlisted corporate bonds 28.5% 20.3%Unlisted government guaranteed bonds 1.2% -Commercial papers 19.6% 7.4%Short term deposits and cash 50.4% 72.3%

Reason for the differences in asset allocation

The asset allocation into commercial papers and unlisted bonds as at 30 April 2020 was increased to enhance fund returns, while meeting the liquidity requirements of the Fund.


2.5 Fund performance analysis based on NAV per unit (adjusted for income distribution; if any) since last review period

Period under reviewKenanga Cash Plus Fund 1.57%Maybank 1-Month Fixed Deposit Rate 1.34%

Source: Lipper IM

The Fund registered a return of 1.57% against its benchmark return of 1.34%, outperforming its benchmark by 23 basis points (bps), benefitting from its investments in commercial papers and short-term bonds.

2.6 Review of the market

Market review

During the final 2 months of year 2019, the 10-year UST (US Treasuries) yields leapt 23bps higher from 1.69% end-October to 1.92% end-December following positive US economic data releases and optimism over the US-China “phase one” trade deal. On 11 December, the US Federal Reserve (Fed) kept interest rates unchanged and signalled that rates would likely remain on hold through 2020. Meanwhile locally, the Malaysian Government Securities (MGS) market was steady in November and rallied in December as global risk appetite improved on positive US-China trade developments. Sustained buying interest from foreign investors, alongside portfolio rebalancing activities at year-end, drove 10-year MGS yields 12bps lower from 3.42% end-October to end the year on a strong note at 3.30%.On 5 November, Bank Negara Malaysia (BNM) held the Overnight Policy Rate (OPR) unchanged at 3.00% at its final meeting of the year. This was followed by an announcement on 8 November of a reduction in the Statutory Reserve Requirement (SRR) by 50bps from 3.50% to 3.00% effective 16 November, estimated to release about RM7.0-7.5 billion into the financial system.

Moving on to the new year, US Treasuries (UST) posted massive gains in 1Q20 as heightened concerns over the Covid-19 outbreak triggered a flight to safety, causing yields to tumble across the board. In March, the US Fed cut interest rates by a total of 150bps to 0.00%-0.25% in 2 successive unscheduled emergency meeting, its first intermeeting rate cut since the Global Financial Crisis in 2008. The Fed highlighted that the move is intended to counter the evolving risks to the US economy from the growing outbreak, and reiterated that policymakers would act as appropriate to support the economy. Additionally, the central bank has taken steps to support the flow of credit to households and businesses, including a bond-buying programme to keep borrowing costs low as well as other measures to boost liquidity in the financial markets.


2.6 Review of the market (contd.)

Market review (contd.)

On local front, the Malaysian Government Securities (MGS) market loosely tracked UST movements, with buying interest boosted by two OPR cuts during the quarter. In January and March, BNM lowered interest rates by a total of 50bps to 2.50% to support the domestic economy which is expected to be impacted by the Covid-19 outbreak. However, the MGS market weakened in mid-March, as the global risk-off sentiment spilled into the local bond market, causing yields to climb higher. BNM also cut the SRR ratio by 100bps from 3.00% to 2.00% effective 20 March. In addition, BNM announced that each Principal Dealer is able to recognise MGS and GII of up to RM1 billion as part of the SRR compliance, with the combined measures expected to release about RM30 billion worth of liquidity into the banking system. Following BNM’s move, coupled with the higher yields which began to attract buying interest, 10-year MGS yields soon trended lower to end the quarter at 3.37%.

In April, the US Fed took additional steps to provide up to USD2.3 trillion in loans to support the US economy, aimed at small- and medium-sized businesses, state and local governments, as well as households. As widely expected on 29 April, the Fed kept interest rates unchanged at 0.00%-0.25% and maintained its open-ended bond-buying programme. Given the gloomy outlook for the US economy, the Fed signalled that interest rate would likely remain at current levels until the US economy has weathered recent events, and both employment and inflation are back on track to meet its targets. Consequently, UST yields were largely unchanged month-on-month (M-o-M), with the 10Y UST ending the month at 0.64%. Locally, the MGS market rallied across the board in April. Buying interest was boosted by heightened expectations of a further rate cut at the upcoming monetary policy meeting in May, as the prolonged Movement Control Order (MCO) is expected to have a considerable impact on Malaysia’ growth prospects. M-o-M, MGS yields tumbled across the board, with the 10-year MGS yields tumbled 52bps lower to 2.85%.

Year to-date April 2020, demand for primary MGS/GII issuances remained robust. For example, the 7-year GII and 10-year GII tenders were strongly oversubscribed by 2.9 times and 3.1 times respectively. The final auction in 29 April for the 7-year MGS was also oversubscribed by 2.2 times. On a related note, the primary corporate bond market was active as issuers capitalised on positive market sentiment to raise funds at attractive rates. Notable issuances include government-guaranteed issuance i.e. Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA) and Prasarana Malaysia Bhd; Danum Capital Bhd (subsidiary of Khazanah Nasional Bhd), TG Excellence Bhd (guaranteed by Top Glove Corporation Bhd) and AEON Credit Service (M) Bhd.


2.6 Review of the market (contd.)

Market outlook

Amid encouraging developments in containing the COVID-19 threat, many countries are looking to ease containment measures and restart their economies slowly and cautiously. Nonetheless, it may take a while for households and business sentiment to recover as concerns over rising unemployment, weak global demand and supply chain disruptions may continue to linger. In the meantime, coordinated efforts by global central banks and policymakers to cushion the economic impact may have to continue. Therefore over the near term, demand for safe haven assets including UST, may continue to be supported by accommodative monetary policies by global central banks, as the outbreak continues to cloud the global growth outlook.

As widely expected on 5 May, BNM lowered the OPR by 50bps to 2.00% (historical low), to cushion the economic impact of the MCO which has been in effect since 18 March. This is BNM’s third consecutive rate cut for the year and brings the total reduction in OPR to 100bps to-date. In addition, effective 16 May, banking institutions are allowed to use MGS and GII to meet the SRR of 2.00%, thus releasing approximately RM16 billion worth of liquidity into the banking system. With more businesses allowed to operate under the Conditional Movement Control Order (CMCO) effective 4 May, BNM expects domestic growth to gradually improve, particularly in 2021 with the expected containment of the pandemic. Nonetheless, downside risks remain from the evolving outbreak situation.

Meanwhile, domestic headline inflation fell to -0.2% year-on-year in March (February: +1.3%) mainly driven by substantially lower fuel prices. For the full year 2020, headline inflation is likely to be negative, reflecting low global oil prices and subdued demand. Given muted inflationary pressures and continued uncertainties ahead, BNM is widely anticipated to remain accommodative to support domestic growth.

2.7 Distributions

For the financial period under review, the Fund has declared the following income distributions:

Gross/Netdistribution

per unitEx-NAV per unit

(sen) (RM)

25 November 201924 December 201922 January 202024 February 202025 March 202027 April 2020

0.250.250.250.250.250.25

0.99950.99950.99961.00060.99961.0004

1.50


2.8 Details of any unit split exercise

The Fund did not carry out any unit split exercise during the financial period under review.

2.9 Significant changes in the state of affair of the Fund during the financial period

There were no significant changes in the state of affair of the Fund during the financial period and up until the date of the manager’s report, not otherwise disclosed in the financial statements.

2.10 Circumstances that materially affect any interests of the unit holders

During the financial period under review, there were no circumstances that materially affected any interests of the unit holders.

2.11 Rebates and soft commissions

It is the policy of the Manager to credit any rebates received into the account of the Fund. Any soft commissions received by investment manager on behalf of the Fund are in the form of research and advisory services that assist in the decision making process relating to the investment of the Fund which are of demonstrable benefit to unit holders of the Fund. Any dealing with the broker or dealer is executed on terms which are the most favourable for the Fund. For the financial period under review, the Manager has received soft commissions from the stockbrokers.

2.12 Cross trade

During the financial period under review, cross-trade transactions were undertaken by investment manager for the best interest of the fund in accordance to the relevant internal and regulatory requirements. Cross trades can only be undertaken upon the verification by Compliance based on the following conditions:

(a) permitted by authorised personnel;(b) the sale and purchase decisions are in the best interest of clients, unit holders and

the fund as a whole;(c) reason(s) for such transactions is documented prior to execution of the trades;(d) transactions are executed through a dealer or a financial institution on an arm’s

length and fair value basis; and(e) cross trade transactions are disclosed to both clients accordingly.


3. FUND PERFORMANCE

3.1 Details of portfolio composition of the Fund for the financial period as at 30 April 2020 against last three financial years as at 31 October are as follows:

a. Distribution among industry sectors and category of investments:

As at30.4.2020

%

FY2019

%

FY2018

%

FY2017

%Unlisted corporate bondsUnlisted government guaranteed bondsCommercial papersShort term deposits and cash

28.5 1.2

19.6 50.7

29.3 -

19.9 50.8

20.7 -

18.7 60.6

6.3 -

5.3 88.4

100.0 100.0 100.0 100.0

Note: The above mentioned percentages are based on total investment market value plus cash.

b. Distribution among markets

The Fund invested in unlisted fixed income securities and cash instruments only.


3.2 Performance details of the Fund for the financial period ended 30 April 2020 against last three financial years ended 31 October are as follows:

1.11.2019 to30.4.2020

FY2019

%

FY2018

%

FY2017

%Net asset value (“NAV”) (RM Million)Units in circulation (Million)NAV per unit (RM)Highest NAV per unit (RM)Lowest NAV per unit (RM)Total return (%)- Capital growth (%)- Income growth (%)Gross distribution per unit (sen)Net distribution per unit (sen)Management expense ratio

(“MER”) (%)1

Portfolio turnover ratio (“PTR”) (times)2

40.12 * 40.09 1.0007 * 1.0031 0.9995 1.57 0.06 1.51 1.50 1.50 0.60

1.32

27.03 27.03

1.0001 1.0023 0.9971

3.350.29 3.05 3.00 3.00 0.62

1.61

21.5221.58

0.9972 0.9991 0.9946

3.190.073.12 3.003.00 0.63

1.53

31.31 31.43

0.9959 0.9996 0.9952

2.660.02 2.64 2.60 2.60 0.85

0.11

Note: Total return is the actual return of the Fund for the respective financial period/years, computed based on NAV per unit and net of all fees.

MER is computed based on the total fees and expenses incurred by the Fund divided by the average fund size calculated on a daily basis. PTR is computed based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis.

1 MER is lower against previous financial year mainly due to increase in average fund size during financial period under review.

2 PTR is lower during the financial period under review due to the shorter reporting period.

* Based on bid price fair valuation method on all investments held by the Fund as at 30 April 2020, the NAV and NAV per unit would be RM40.11 million and RM1.0004 respectively.

(As disclosed under Note 13 of the financial statements)


3.3 Average total return of the fund

1 Year30 Apr 19 -30 Apr 20

3 Years30 Apr 17 -30 Apr 20

5 Years30 Apr 15 -30 Apr 20

KCPF 3.20% 0.26% 0.24%

Maybank 1-month Fixed Deposit Rate 2.84% 0.25% 0.25%

Source: Lipper

3.4 Annual total return of the fund

Periodunderreview

31 Oct 19 - 30 Apr 20

1 Year31 Oct 18 -31 Oct 19

1 Year31 Oct 17 -31 Oct18

1 Year31 Oct 16 -31 Oct 17

1 Year31 Oct 15 -31 Oct 16

1 Year31 Oct 14 -31 Oct 15

KCPF 1.57% 3.35% 3.19% 2.66% 2.79% 2.42%

Maybank 1-month Fixed Deposit Rate 1.34% 3.07% 3.14% 2.99% 3.15% 3.19%

Source: Lipper

Investors are reminded that past performance is not necessarily indicative of future performance. Unit prices and investment returns may fluctuate.


4. TRUSTEE’S REPORT TO THE UNIT HOLDERS OF KENANGA CASH PLUS FUND

We, CIMB Commerce Trustee Berhad being the Trustee of Kenanga Cash Plus Fund (“the Fund”), are of the opinion that Kenanga Investors Berhad, acting in the capacity as Manager of the Fund, has fulfilled their duties in the following manner for the financial period from 1 November 2019 to 30 April 2020

a) The Fund has been managed in accordance with the limitations imposed on the investment powers of the Manager under the Deed, the Securities Commission Malaysia’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 (as amended from time to time) and other applicable laws;

b) Valuation and pricing of units of the Fund has been carried out in accordance with the Deed and relevant regulatory requirements; and

c) Creation and cancellation of units have been carried out in accordance with the Deed and relevant regulatory requirements.

d) The distributions of return by the Fund are relevant and reflects the investment objectives of the Fund.

For and on behalf ofCIMB Commerce Trustee Berhad

Lee Kooi YokeChief Executive Officer

Kuala Lumpur, Malaysia

29 June 2020


5. STATEMENT BY THE MANAGER

I, Ismitz Matthew De Alwis, being a director of Kenanga Investors Berhad, do hereby state that, in the opinion of the Manager, the accompanying statement of financial position as at 30 April 2020 and the related statement of comprehensive income, statement of changes in net asset value and statement of cash flows for the financial period from 1 November 2019 to 30 April 2020 together with notes thereto, are drawn up in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards so as to give a true and fair view of the financial position of Kenanga Cash Plus Fund as at 30 April 2020 and of its financial performance and cash flows for the financial period financial period from 1 November 2019 to 30 April 2020 and comply with the requirements of the Deed.

For and on behalf of the Manager KENANGA INVESTORS BERHAD

ISMITZ MATTHEW DE ALWISExecutive Director/Chief Executive Officer

Kuala Lumpur, Malaysia

29 June 2020


6. FINANCIAL STATEMENTS

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

6.1 STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2019 TO 30 APRIL 2020 (unaudited)

Note 1.11.2019 to 1.11.2018 to 30.4.2020 30.4.2019 RM RM

INVESTMENT INCOME

Interest income 448,980 406,104Net gain from investments:

- Financial assets at fair value through profit or loss (“FVTPL”) 4 93,517 71,806

542,497 477,910

EXPENSES

Manager’s fee 5 73,879 58,908Trustee’s fee 6 4,480 4,464Auditors’ remuneration 3,989 3,719Tax agent’s fee 2,992 2,975Administration expenses 12,493 2,834 97,833 72,900

NET INCOME BEFORE TAX 444,664 405,010

Income tax 7 - -

NET INCOME AFTER TAX, REPRESENTING TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD 444,664 405,010

Net income after tax is made up as follows:Realised gain 415,377 388,849Unrealised gain 4 29,287 16,161

444,664 405,010

Distribution for the financial period:Gross/Net distribution (RM) 8 450,622 375,989Gross/Net distribution per unit (sen) 8 1.50 1.50



6.2 STATEMENT OF FINANCIAL POSITION AS AT 30 APRIL 2020 (unaudited)

Note 30.4.2020 30.4.2019 RM RM

ASSETS

INVESTMENTS

Financial assets at FVTPL 4 20,059,734 10,961,893Short term deposits 9 20,604,000 28,595,248 40,663,734 39,557,141

OTHER ASSETS

Amount due from licensed financial institutions 10 - 2,012,175Other receivable 11 7,906 60,959Cash at bank 11,060 21,372 18,966 2,094,506

TOTAL ASSETS 40,682,700 41,651,647

LIABILITIES

Amount due to Manager 15,467 7,927,845Amount due to Trustee 1,500 740Amount due to licensed financial institutions 10 506,271 -Other payables 12 51,950 44,036TOTAL LIABILITIES 575,188 7,972,621

EQUITY

Unit holders’ contribution 38,663,926 32,240,391Retained earnings 1,443,586 1,438,635

NET ASSET VALUE (“NAV”) ATTRIBUTABLE TO UNIT HOLDERS 13 40,107,512 33,679,026

TOTAL LIABILITIES AND EQUITY 40,682,700 41,651,647

NUMBER OF UNITS IN CIRCULATION 13(a) 40,091,865 33,707,378

NET ASSET VALUE PER UNIT (RM) 14 1.0004 0.9992



6.3 STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2019 TO 30 APRIL 2020 (unaudited)

Unit holders’ Retained Note contribution earnings Total NAV RM RM RM

1.11.2019 to 30.4.2020At beginning of the financial

period 25,576,824 1,444,235 27,021,059Total comprehensive income - 444,664 444,664Creation of units 13(a) 44,072,036 - 44,072,036Cancellation of units 13(a) (31,435,556) - (31,435,556)Distribution equalisation 13(a) 5,309 - 5,309Distribution 8 (5,309) (445,313) (450,622)Reinvest of income distributed 13(a) 450,622 - 450,622At end of the financial period 38,663,926 1,443,586 40,107,512

1.11.2018 to 30.4.2019At beginning of the financial

period 20,142,814 1,377,439 21,520,253Total comprehensive income - 405,010 405,010Creation of units 13(a) 34,628,508 - 34,628,508Cancellation of units 13(a) (22,906,416) - (22,906,416)Distribution equalisation 13(a) 32,172 - 32,172Distribution 8 (32,172) (343,814) (375,986)Reinvest of income distributed 13(a) 375,485 - 375,485At end of the financial period 32,240,391 1,438,635 33,679,026



6.4 STATEMENT OF CASH FLOWS FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2019 TO 30 APRIL 2020 (unaudited)

Note 1.11.2019 to 1.11.2018 to 30.4.2020 30.4.2019 RM RM

CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES

Proceeds from the maturity of investments 35,800,000 22,231,024Interest received 385,179 342,569Trustee’s fee paid (3,744) (4,488)Payments for other fees and expenses (1,024) (11,455)Manager’s fee paid (70,081) (51,164)Purchase of financial assets at FVTPL (41,883,902) (26,603,858)Net cash used in operating and investing

activities (5,773,572) (4,097,372)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from units created 44,097,933 34,697,634Cash paid on units cancelled (31,456,144) (15,030,721)Distribution paid - (501)Net cash generated from financing activities 12,641,789 19,666,412

NET INCREASE IN CASH AND CASH EQUIVALENTS 6,868,217 15,569,040

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL PERIOD 13,746,843 13,047,580

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL PERIOD 20,615,060 28,616,620

Cash and cash equivalents comprise:Cash at bank 11,060 21,372Short term deposits 20,604,000 28,595,248 20,615,060 28,616,620


6.5 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2019 TO 30 APRIL 2020 (unaudited)

1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES

Kenanga Cash Plus Fund (“the Fund”) was constituted pursuant to the executed Deed dated 29 August 2006 (collectively, together with deeds supplemental thereto, referred to as “the Deed”) between the Manager, Kenanga Funds Berhad, and CIMB Commerce Trustee Berhad (“the Trustee”). The Fund commenced operations on 26 October 2006 and will continue to be in operation until terminated by the Trustee as provided under Clause 38 of the Deed.

Pursuant to the executed First Supplemental Deed dated 15 May 2013 between Kenanga Investors Berhad and CIMB Commerce Trustee Berhad, Kenanga Investors Berhad was appointed as the Manager of the Fund with effect from 8 June 2013.

Kenanga Investors Berhad is a wholly-owned subsidiary of Kenanga Investment Bank Berhad that is listed on the Main Market of Bursa Malaysia Securities Berhad. All of these companies are incorporated in Malaysia.

The principal place of business of the Manager is Level 14, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur.

The Fund seeks to provide investors with a regular stream of income through investments in short to medium term fixed income instruments with high level of liquidity. To achieve the objective of the Fund, it will invest in high quality short to medium term fixed income instruments with minimum credit rating of A3 or P2 (by RAM) or equivalent rating by other recognised rating agencies.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks including market risk (which includes interest rate risk), credit risk and liquidity risk. Whilst these are the most important types of financial risks inherent in each type of financial instruments, the Manager and the Trustee would like to highlight that this list does not purport to constitute an exhaustive list of all the risks inherent in an investment in the Fund.

The Fund has an approved set of investment guidelines and policies as well as internal controls which sets out its overall business strategies to manage these risks to optimise returns and preserve capital for the unit holders, consistent with the long term objectives of the Fund.

a. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk includes interest rate risk.

Market risk arises when the value of the investments fluctuates in response to the activities of individual companies, general market or economic conditions. It stems from the fact that there are economy-wide perils, which threaten all businesses. Hence, investors are exposed to market uncertainties. Fluctuation in the investments’ prices caused by uncertainties in the economic, political and social environment will affect the NAV of the Fund.


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.)

a. Market risk (contd.)

The Manager manages the risk of unfavourable changes in prices by cautious review of the investments and continuous monitoring of their performance and risk profiles.

i. Interest rate risk

Interest rate risk refers to how the changes in the interest rate environment would affect the performance of Fund’s investments. Rate offered by the financial institutions will fluctuate according to the Overnight Policy Rate determined by Bank Negara Malaysia and this has direct correlation with the Fund’s investments in unlisted corporate bonds, unlisted government guaranteed bonds, commercial papers and short term deposits.

The Fund’s exposure to the interest rate risk is mainly confined to unlisted corporate bonds, unlisted government guaranteed bonds and commercial papers.

Interest rate risk sensitivity

The following table demonstrates the sensitivity of the Fund’s income for the financial period to a reasonably possible change in interest rate, with all other variables held constant.

Effects on profit for Changes in rate the financial period Increase/(Decrease) (Loss)/Gain Basis points RM

30.4.2020Financial assets at FVTPL 5/(5) (7,165)/4,028

30.4.2019Financial assets at FVTPL 5/(5) (5,469)/3,581

In practice, the actual trading results may differ from the sensitivity analysis above and the difference could be material.



a. Market risk (contd.)

i. Interest rate risk (contd.)

Interest rate risk exposure

The following table analyses the Fund’s interest rate risk exposure. The Fund’s financial assets and financial liabilities are disclosed at fair value and categorised by the earlier of contractual re-pricing or maturity dates.

Non- Weighted exposure average Above to interest effective Up to 1 year - rate interest 1 year 5 years movement Total rate* RM RM RM RM %

30.4.2020AssetsFinancial assets at

FVTPL 15,896,824 3,995,837 167,073 20,059,734 6.6Short term deposits 20,604,000 - - 20,604,000 2.6Other assets - - 18,966 18,966 36,500,824 3,995,837 186,039 40,682,700

LiabilitiesOther liabilities - - 523,238 523,238

Total interest rate sensitivity gap 36,500,824 3,995,837 (337,199) 40,159,462

30.4.2019AssetsFinancial assets at

FVTPL 7,268,577 3,608,678 84,638 10,961,893 4.2Short term deposits 28,595,248 - - 28,595,248 3.6Other assets - - 2,094,506 2,094,506 35,863,825 3,608,678 2,179,144 41,651,647

LiabilitiesOther liabilities - - 7,928,585 7,928,585

Total interest rate sensitivity gap 35,863,825 3,608,678 (5,749,441) 33,723,062

* Computed based on interest-bearing assets only.



b. Credit risk

Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss to the Fund by failing to discharge an obligation. The Manager manages the credit risk by undertaking credit evaluation to minimise such risk.

i. Credit risk exposure

As at the reporting date, the Fund’s maximum exposure to credit risk is represented by the carrying amount of each class of financial asset recognised in the statement of financial position.

ii. Financial assets that are either past due or impaired

As at the reporting date, there are no financial assets that are either past due or impaired.

iii. Credit quality of financial assets

The Fund invests only in unlisted corporate bonds, unlisted government guaranteed bonds and commercial papers with at least investment grade credit rating by a credit rating agency. The following table analyses the Fund’s portfolio of unlisted corporate bonds, unlisted government guaranteed bonds and commercial papers by rating category:

Unlisted bonds

Percentage of total unlisted bonds Percentage of NAV 30.4.2020 30.4.2019 30.4.2020 30.4.2019 % % % %

RatingAAA 62.1 20.2 19.1 4.8AA3 30.8 - 8.9 -A3 7.1 - 2.1 -AA+ - 30.3 - 7.2AA1 - 25.4 - 6.1A1 - 24.1 - 5.7 100.0 100.0 30.1 23.8

Commercial papers

Percentage of total commercial papers Percentage of NAV 30.4.2020 30.4.2019 30.4.2020 30.4.2019 % % % %RatingMARC-1 62.5 - 12.5 -P1 37.5 100.0 7.5 8.7 100.0 100.0 20.0 8.7



b. Credit risk (contd.)

iii. Credit quality of financial assets (contd.)

The Fund invests in deposits with financial institutions licensed under the Financial Services Act 2013 and Islamic Financial Services Act 2013. The following table analyses the licensed financial institutions by rating category:

Short term deposits

Percentage of total short term deposits Percentage of NAV 30.4.2020 30.4.2019 30.4.2020 30.4.2019 RM RM % %RatingP1 79.1 70.4 40.7 59.8WR 20.9 29.6 10.7 25.1 100.0 100.0 51.4 84.9

iv. Credit risk concentration

Concentration risk is monitored and managed based on sectorial distribution. The table below analyses the Fund’s portfolio of unlisted corporate bonds, unlisted government guaranteed bonds and commercial papers by sectorial distribution:

Unlisted bonds

Percentage of total unlisted bonds Percentage of NAV 30.4.2020 30.4.2019 30.4.2020 30.4.2019 % % % %

Finance 81.8 55.7 24.8 13.3Properties 18.2 20.2 5.3 4.8Plantations - 24.1 - 5.7 100.0 100.0 30.1 23.8

Commercial papers

Percentage of total commercial papers Percentage of NAV 30.4.2020 30.4.2019 30.4.2020 30.4.2019 % % % %

Properties 62.5 100.0 12.5 8.7Trading and

Services 37.5 - 7.5 - 100.0 100.0 20.0 8.7



c. Liquidity risk

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities that are to be settled by delivering cash or another financial asset. Exposure to liquidity risk arises because of the possibility that the Fund could be required to pay its liabilities or cancel its units earlier than expected. The Fund is exposed to cancellation of its units on a regular basis. Units sold to unit holders by the Manager are cancellable at the unit holders’ option based on the Fund’s NAV per unit at the time of cancellation calculated in accordance with the Deed.

The liquid assets comprise cash, short term deposits with licensed financial institutions and other instruments, which are capable of being converted into cash within 7 days.

The following table analyses the maturity profile of the Fund’s financial assets and financial liabilities in order to provide a complete view of the Fund’s contractual commitments and liquidity.

Up to 1 year Note 30.4.2020 30.4.2019 RM RM

AssetsFinancial assets at FVTPL 20,059,734 10,961,893Short term deposits 20,604,000 28,595,248Other assets 18,966 2,094,506 i. 40,682,700 41,651,647

LiabilitiesOther liabilities ii. 523,238 7,928,585

Equity iii. 40,107,512 33,679,026

Liquidity gap 51,950 44,036

i. Financial assets

Analysis of financial assets at FVTPL into maturity groupings is based on the expected date on which these assets will be realised. For other assets, the analysis into maturity groupings is based on the remaining period from the end of the reporting period to the contractual maturity date or if earlier, the expected date on which the assets will be realised.

ii. Financial liabilities

The maturity grouping is based on the remaining period from the end of the reporting period to the contractual maturity date or if earlier, the date on which liabilities will be settled. When the counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which the Fund can be required to pay.



c. Liquidity risk (contd.)

iii. Equity

As the unit holders can request for redemption of their units, they have been categorised as having a maturity of “up to 1 year”.

d. Regulatory reportings

It is the Manager’s responsibility to ensure full compliance of all requirements under the Guidelines on Unit Trust Funds issued by Securities Commission Malaysia. Any breach of any such requirement has been reported in the mandatory reporting to Securities Commission Malaysia on a monthly basis.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of accounting

The financial statements of the Fund have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board (“MASB”) and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

The accounting policies adopted are consistent with those of the previous financial year except for the adoption of the new and amended MFRS and Interpretation Committee’s (“IC”) Interpretation, which became effective for the Fund on 1 September 2019.

Effective for financial period beginning on Description or after

Amendments to MFRS contained in the document entitled “Annual Improvements to MFRS Standards document 2015 - 2017 Cycle” 1 January 2019

Amendments to MFRS 3 and MFRS 11: Previously Held Interest in a Joint Operation contained in the document entitled “Annual Improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019

Amendments to MFRS 112: Income Tax Consequences of Payments on Financial Instruments Classified as Equity contained in the document entitled “Annual Improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019

Amendments to MFRS 123: Borrowing Costs Eligible for Capitalisation contained in the document entitled “Annual Improvements to MFRS Standards 2015 - 2017 Cycle” 1 January 2019

MFRS 16: Leases 1 January 2019Amendments to MFRS 9: Prepayment Features with Negative

Compensation 1 January 2019


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

a. Basis of accounting (contd.)


Amendments to MFRS 119: Plan Amendment, Curtailment or Settlement 1 January 2019

Amendments to MFRS 128: Long-term Interests in Associates and Joint Ventures 1 January 2019

IC Interpretation 23: Uncertainty over Income Tax Treatments 1 January 2019

The adoption of the new and amended MFRS and IC Interpretation did not have any significant impact on the financial position or performance of the Fund.

b. Standards, amendments and interpretations issued but not yet effective

Interpretations that have been issued by MASB will be effective for the Fund in future financial periods. The Fund intends to adopt the relevant standards and interpretations when they become effective.


Amendments to MFRS 2: Share-Based Payment 1 January 2020Amendments to MFRS 3: Business Combinations 1 January 2020Amendments to MFRS 3: Definition of a Business 1 January 2020Amendments to MFRS 6: Exploration for and Evaluation of Mineral

Resources 1 January 2020Amendments to MFRS 14: Regulatory Deferral Accounts 1 January 2020Amendments to MFRS 101: Presentation of Financial Statements 1 January 2020Amendments to MFRS 108: Accounting Policies, Changes in

Accounting Estimates and Errors 1 January 2020Amendments to MFRS 101 & MFRS 108: Definition of Material 1 January 2020Amendments to MFRS 134: Interim Financial Reporting 1 January 2020Amendment to MFRS 137: Provisions, Contingent Liabilities and

Contingent Assets 1 January 2020Amendment to MFRS 138: Intangible Assets 1 January 2020Amendments to IC Interpretation 12: Service Concession Arrangements 1 January 2020Amendments to IC Interpretation 19: Extinguishing Financial

Liabilities with Equity Instruments 1 January 2020Amendment to IC Interpretation 20: Stripping Costs in the

Production Phase of a Surface Mine 1 January 2020Amendments to IC Interpretation 22: Foreign Currency

Transactions and Advance Consideration 1 January 2020Amendments to IC Interpretation 132: Intangible Assets - Web Site

Costs 1 January 2020



b. Standards, amendments and interpretations issued but not yet effective (contd.)


Amendments to MFRS 9 Financial Instruments, MFRS 139 Financial Instruments: Recognition and Measurement and MFRS 7 Financial Instruments: Disclosures: Interest Rate Benchmark Reform 1 January 2020

MFRS 17: Insurance Contracts 1 January 2021Amendments to MFRS 10 and MFRS 128: Sale or Contribution To be announced

of Assets between an Investor and its Associate or Joint Venture by MASB

The Fund will adopt the above pronouncements when they become effective in the respective financial periods. These pronouncements are not expected to have any significant impact to the financial statements of the Fund upon their initial application.

c. Financial instruments

Financial assets are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instruments.

i. Measurement categories of financial assets and liabilities

The Fund classifies all of its financial assets based on the business model for managing the assets and the asset’s contractual terms, measured at either:

• Amortised cost;• Fair value through other comprehensive income; and• Fair value through profit or loss.

The Fund may designate financial instruments at FVTPL, if so doing eliminates or significantly reduces measurement or recognition inconsistencies.

The Fund’s other financial assets include cash at bank, short term deposits, trade receivables and other receivables.

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability. Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities.

The Fund’s other financial liabilities include trade payables and other payables.

Other financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest rate (“EIR”). Gains or losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.



c. Financial instruments (contd.)

ii. Initial recognition and subsequent measurement

The classification of financial assets at initial recognition depends on their contractual terms and the business model for managing the instruments, as described in Note 3(c)(iii). Financial assets are initially measured at their fair value, except in the case of financial assets recorded at FVTPL, transaction costs are added to, or subtracted from, this amount. Trade receivables are measured at the transaction price. When the fair value of financial instruments at initial recognition differs from the transaction price, the Fund accounts for the Day 1 profit or loss, as described below.

After initial measurement, debt instruments are measured at amortised cost, using the EIR, less allowance for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. Expected credit losses (“ECLs”) are recognised in the statement of comprehensive income when the investments are impaired.

Financial assets at FVTPL are recorded in the statement of financial position at fair value. Changes in fair value are recorded in profit or loss.

iii. Due from banks, short term deposits, trade and other receivables at amortised cost

The Fund only measures the cash at bank, short term deposits, trade receivables and other receivables at amortised cost if both of the following conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.

The details of these conditions are outlined below.

Business model assessment

The Fund determines its business model at the level that best reflects how it manages groups of financial assets to achieve its business objective.

The Fund’s business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios and is based on observable factors such as:

• How the performance of the business model and the financial assets held within that business model are evaluated and reported to the entity’s key management personnel;

• The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed;



c. Financial instruments (contd.)

iii. Due from banks, short term deposits, trade and other receivables at amortised cost (contd.)

Business model assessment (contd.)

• How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected); and

• The expected frequency, value and timing of sales are also important aspects of the Fund’s assessment.

The business model assessment is based on reasonably expected scenarios without taking ‘worst case’ or ‘stress case’ scenarios into account. If cash flows after initial recognition are realised in a way that is different from the Fund’s original expectations, the Fund does not change the classification of the remaining financial assets held in that business model but incorporates such information when assessing newly originated or newly purchased financial assets going forward, unless it has been determined that there has been a change in the original business model.

The SPPI test

As a second step of its classification process, the Fund assesses the contractual terms of financial assets to identify whether they meet the SPPI test.

‘Principal’ for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset (for example, if there are repayments of principal or amortisation/accretion of the premium/discount).

The most significant elements of interest within a lending arrangement are typically the consideration for the time value of money and credit risk. To make the SPPI assessment, the Fund applies judgment and considers relevant factors such as the currency in which the financial asset is denominated, and the period for which the interest rate is set.

In contrast, contractual terms that introduce a more than de minimis exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to be measured at FVTPL.

iv. Financial investments

Financial assets in this category are those that are managed in a fair value business model, or that have been designated by management upon initial recognition, or are mandatorily required to be measured at fair value under MFRS 9. This category includes debt instruments whose cash flow characteristics fail the SPPI criterion or are not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell.



d. Derecognitionoffinancialassets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the financial asset have expired. The Fund also derecognises the financial asset if it has both transferred the financial asset and the transfer qualifies for derecognition.

The Fund has transferred the financial asset if, and only if, either:

• The Fund has transferred its contractual rights to receive cash flows from the financial asset; or

• It retains the rights to the cash flows but has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass–through’ arrangement.

Pass-through arrangements are transactions whereby the Fund retains the contractual rights to receive the cash flows of a financial asset (the ‘original asset’), but assumes a contractual obligation to pay those cash flows to one or more entities (the ‘eventual recipients’), when all of the following three conditions are met:

• The Fund has no obligation to pay amounts to the eventual recipients unless it has collected equivalent amounts from the original asset, excluding short term advances with the right to full recovery of the amount lent plus accrued interest at market rates;

• The Fund cannot sell or pledge the original asset other than as security to the eventual recipients; and

• The Fund has to remit any cash flows it collects on behalf of the eventual recipients without material delay. In addition, the Fund is not entitled to reinvest such cash flows, except for investments in cash or cash equivalents including interest earned, during the period between the collection date and the date of required remittance to the eventual recipients.

A transfer only qualifies for derecognition if either:

• The Fund has transferred substantially all the risks and rewards of the asset; or• The Fund has neither transferred nor retained substantially all the risks and rewards

of the asset but has transferred control of the asset.

The Fund considers control to be transferred if and only if, the transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and without imposing additional restrictions on the transfer.

When the Fund has neither transferred nor retained substantially all the risks and rewards and has retained control of the asset, the asset continues to be recognised only to the extent of the Fund’s continuing involvement, in which case, the Fund also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Fund has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration the Fund could be required to pay.



d. Derecognitionoffinancialassets(contd.)

If continuing involvement takes the form of a written or purchased option (or both) on the transferred asset, the continuing involvement is measured at the value the Fund would be required to pay upon repurchase. In the case of a written put option on an asset that is measured at fair value, the extent of the entity’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

e. Impairmentoffinancialassets

i. Overview of the expected credit loss (“ECL”) principles

The Fund measure its loan and receivable impairment using the forward-looking ECL approach in accordance with the requirements of MFRS 9.

ii. Write-offs

Financial assets are written off either partially or in their entirety only when the Fund has stopped pursuing the recovery. If the amount to be written off is greater than the accumulated loss allowance, the difference is first treated as an addition to the allowance that is then applied against the gross carrying amount. Any subsequent recoveries are credited to credit loss expense.

f. Income

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

Interest income which includes the accretion of discount and amortisation of premium on fixed income securities, is recognised using the effective interest method.

The realised gain or loss on sale of investments is measured as the difference between the net disposal proceeds and the carrying amount of the investment.

g. Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents include cash at bank and short term deposits with licensed financial institutions with maturities of three months or less, which have an insignificant risk of changes in value.

h. Income tax

Income tax on the profit or loss for the financial year comprises current tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial period.

As no temporary differences have been identified, no deferred tax has been recognised.



i. Unrealised reserves

Unrealised reserves represent the net gain or loss arising from carrying investments at their fair values at reporting date. This reserve is not distributable.

j. Unitholders’contribution–NAVattributabletounitholders

The unit holders’ contribution to the Fund is classified as equity instruments.

Distribution equalisation represents the average amount of undistributed net income included in the creation or cancellation price of units. This amount is either refunded to unit holders by way of distribution and/or adjusted accordingly when units are released back to the Trustee.

k. Functional and presentation currency

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

l. Distributions

Distributions are at the discretion of the Manager. A distribution to the Fund’s unit holders is accounted for as a deduction from retained earnings.

m.Significantaccountingjudgmentsandestimates

The preparation of financial statements requires the use of certain accounting estimates and exercise of judgment. Estimates and judgments are continually evaluated and are based on past experience, reasonable expectations of future events and other factors.

i. Critical judgments made in applying accounting policies

There are no major judgments made by the Manager in applying the Fund’s accounting policies.

ii. Key sources of estimation uncertainty

There are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.


4. FINANCIAL ASSETS AT FVTPL

30.4.2020 30.4.2019 RM RM

Financial assets held for trading, at FVTPL:Unlisted corporate bonds 11,598,029 8,014,677Unlisted government guaranteed bonds 476,678 -Commercial papers 7,985,027 2,947,216

20,059,734 10,961,893

1.11.2019 to 1.11.2018 to 30.4.2020 30.4.2019 RM RM

Net gain on financial assets at FVTPL comprised:Realised gain on disposals 64,230 55,645Unrealised changes in fair values 29,287 16,161 93,517 71,806

Details of financial assets at FVTPL as at 30 April 2020:

Amortised Percentage Quantity cost Fair value of NAV RM RM %

Unlisted corporate bondsAl Dzahab Assets Berhad

maturing on 11/09/2020 1,000,000 1,011,110 1,012,458 2.5Aman Sukuk Berhad maturing

on 21/10/2021 500,000 506,776 508,262 1.3Bank Muamalat Malaysia

Berhad maturing on15/06/2021 800,000 829,659 830,184 2.1

CIMB Islamic Bank Berhad maturing on 25/09/2019 1,500,000 1,522,488 1,533,768 3.8

CJ Capital Sdn Bhd maturingon 15/07/2020 1,570,000 1,599,982 1,602,774 4.0

Sabah Development Bank Berhad maturing on 10/08/2021 2,000,000 2,027,388 2,034,970 5.1

Zamarad Assets Berhad maturing on 19/11/2020 3,500,000 3,562,726 3,569,452 8.9

Zamarad Assets Berhad maturing on 27/07/2020 500,000 506,271 506,161 1.2

Total unlisted corporate bonds 11,566,400 11,598,029 28.9


4. FINANCIAL ASSETS AT FVTPL (CONTD.)

Details of financial assets at FVTPL as at 30 April 2020: (contd.)

Amortised Percentage Quantity cost Fair value of NAV RM RM %

Unlisted government guaranteed bonds

Cagamas Berhad maturing on 25/05/2023 150,000 156,593 159,539 0.4

Cagamas MBS Berhad maturing on 11/12/2020 310,000 316,833 317,139 0.8

Total unlisted government guaranteed bonds 473,426 476,678 1.2

Commercial papersAEON Co. (M) Berhad

maturing on 29/05/2020 3,000,000 2,992,778 2,994,242 7.5Sunway Treasury Sukuk

Sdn Bhd maturing on 13/05/2020 3,000,000 2,996,693 2,997,779 7.5

Sunway Treasury Sukuk Sdn Bhd maturing on 15/06/2020 2,000,000 1,992,136 1,993,006 5.0

Total commercial papers 7,981,607 7,985,027 20.0

Total financial assets at FVTPL 20,021,433 20,059,734 50.1

Unrealised gain on financial assets at FVTPL 38,301

5. MANAGER’S FEE

The Manager’s fee is calculated on a daily basis at a rate not less than 0.50% per annum and not exceeding 3.0% per annum of the NAV of the Fund as provided under Clause 13(2) of the Deed.

The Manager is currently charging Manager’s fee of 0.50% per annum of the NAV of the Fund (financial period from 1 November 2018 to 30 April 2019: 0.50%).

6. TRUSTEE’S FEE

Pursuant to the Second Supplemental Deed dated 25 July 2014, the Trustee’s fee is calculated at a rate not exceeding 0.07% per annum of the NAV of the Fund and subject to a minimum fee of RM9,000.

The Trustee’s fee is currently computed based on the minimum fee of RM9,000 per annum for the current and previous financial periods.


7. INCOME TAX

Income tax is calculated at the Malaysian statutory tax rate of 24% of the estimated assessable income for the current and previous financial periods.

Income tax is calculated on investment income less partial deduction for permitted expenses as provided for under Section 63B of the Income Tax Act, 1967.

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

1.11.2019 to 1.11.2018 to 30.4.2020 30.4.2019 RM RM

Net income before tax 444,664 405,010

Tax at Malaysian statutory tax rate of 24% (financial period from 1 November 2018 to 30 April 2019: 24%) 106,719 97,202

Tax effect of:Income not subject to tax (130,199) (114,698)Expenses not deductible for tax purposes 2,039 1,989Restriction on tax deductible expenses for unit trust

fund 21,441 15,507Income tax for the financial period - -

8. DISTRIBUTIONS

Distributions to unit holders were made on the following dates:

1.11.2019 to 1.11.2018 to 30.4.2020 30.4.2019 RM RM

25 November 2019/26 November 2018 69,162 52,34224 December 2019/26 December 2018 67,627 52,46122 January 2020/28 January 2019 72,952 45,79124 February 2020/25 February 2019 57,304 51,02625 March 2020/26 March 2019 95,236 67,70227 April 2020/25 April 2019 88,341 106,664 450,622 375,986


8. DISTRIBUTIONS (CONTD.)

Distributions to unit holders were from the following sources:

1.11.2019 to 1.11.2018 to 30.4.2020 30.4.2019 RM RM

Distribution out of distribution equalisation (Note 12(a)) 5,309 32,172Undistributed income brought forward 541,186 413,539 546,495 445,711Less: Expenses (95,873) (69,725)Distribution for the financial period 450,622 375,986

Gross/Net distribution per unit (sen) 1.50 1.50

Current financial period’s income distributions included an amount of RM541,186 (financial period from 1 November 2018 to 30 April 2019: RM403,407) which is made from previous financial year’s realised gain.

9. SHORT TERM DEPOSITS

Short term deposits are held with licensed financial institutions in Malaysia at the prevailing interest rates.

10. AMOUNT DUE FROM/TO LICENSED FINANCIAL INSTITUTIONS

Amount due from licensed financial institutions relates to the amount to be received from or paid to licensed financial institutions arising from the sales and purchase of investments.

11. OTHER RECEIVABLE

30.4.2020 30.4.2019 RM RM

Interest receivable from short term deposits 7,906 60,959

12. OTHER PAYABLES

30.4.2020 30.4.2019 RM RM

Accrual for auditors’ remuneration 11,989 11,219Accrual for tax agent’s fees 10,992 4,975Provision for printing and other expenses 28,969 27,842 51,950 44,036


13. NET ASSET VALUE ATTRIBUTABLE TO UNIT HOLDERS

NAV attributable to unit holders is represented by:

Note 30.4.2020 30.4.2019 RM RM

Unit holders’ contribution (a) 38,663,926 32,240,391

Retained earnings:Realised reserves 1,405,285 1,419,912Unrealised reserves 38,301 18,723

1,443,586 1,438,635

40,107,512 33,679,026

(a)Unitholders’contribution

1.11.2019 to 30.4.2020 1.11.2018 to 30.4.2019 No. of units RM No. of units RM

At beginning of the financial period 27,026,528 25,576,824 21,581,751 20,142,814

Add: Creation of units 44,029,877 44,072,036 34,712,054 34,628,508

Less: Cancellation of units (31,415,226) (31,435,556) (22,962,663) (22,906,416)

Distribution equalisation - 5,309 - 32,172Distribution (Note 8) - (5,309) - (32,172)Reinvestment of income

distributed 450,686 450,622 376,236 375,485At end of the financial

period 40,091,865 38,663,926 33,707,378 32,240,391

The Manager, Kenanga Investors Berhad, did not hold any units in the Fund, either legally or beneficially, as at 30 April 2020 (30 April 2019: nil). The number of units legally or beneficially held by the other parties related to the Manager were nil as at 30 April 2020 (30 April 2019: 521,785 units valued at RM521,994).

14. NET ASSET VALUE PER UNIT

Financial assets at FVTPL have been valued at the bid prices at the close of business. In accordance with the Deed, the calculation of NAV attributable to unit holders per unit for the creation and cancellation of units is computed based on financial assets at FVTPL valued at the last done market price.

A reconciliation of NAV attributable to unit holders for creation/cancellation of units and the NAV attributable to unit holders per the financial statements is as follows:


14. NET ASSET VALUE PER UNIT (CONTD.)

1.11.2019 to 30.4.2020 1.11.2018 to 30.4.2019 RM RM/Unit RM RM/Unit

NAV attributable to unit holders for creation/cancellation of units 40,118,456 1.0007 33,680,664 0.9992

Effects of adopting bid prices as fair value (10,944) (0.0003) (1,638) -

NAV attributable to unit holders per statement of financial position 40,107,512 1.0004 33,679,026 0.9992

15. PORTFOLIO TURNOVER RATIO (“PTR”)

PTR for the financial period from 1 November 2019 to 30 April 2020 is 1.32 times (financial period from 1 November 2018 to 30 April 2019: 1.07 times).

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

16. MANAGEMENT EXPENSE RATIO (“MER”)

MER for the financial period from 1 November 2019 to 30 April 2020 is 0.60% (financial period from 1 November 2018 to 30 April 2019: 0.58%).

MER is the ratio of total fees and recovered expenses of the Fund expressed as a percentage of the Fund’s average NAV, calculated on a daily basis.

17. TRANSACTIONS WITH LICENSED FINANCIAL INSTITUTIONS

Transaction Percentage value of total RM %

RHB Investment Bank Berhad 12,680,363 29.9Malayan Banking Berhad 12,269,283 28.9AmBank (M) Berhad 8,077,836 19.0CIMB Bank Berhad 6,483,566 15.3Hong Leong Investment Bank Berhad 2,506,271 5.9Alliance Bank Malaysia Berhad 407,840 1.0 42,425,159 100.0

The above transaction values are in respect of unlisted corporate bonds, unlisted government guaranteed bonds and commercial papers. Transactions in unlisted corporate bonds and commercial papers do not involve any commission or brokerage fees.


17. TRANSACTIONS WITH LICENSED FINANCIAL INSTITUTIONS (CONTD.)

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

18. SEGMENTAL REPORTING

a. Business segments

In accordance with the objective of the Fund, the Fund can invest up to 50% in fixed income instruments and a minimum of 50% in liquid assets. The following table provides an analysis of the Fund’s revenue, results, assets and liabilities by business segments:

Unlisted fixed income Other instruments investment Total RM RM RM

1.11.2019 to 30.4.2020RevenueSegment income 343,866 198,631 542,497Unallocated expenditure (97,833)Income before tax 444,664Income tax -Net income after tax 444,664

30.4.2020AssetsFinancial assets at FVTPL 20,059,734 -Short term deposits - 20,604,000Other segment asset - 7,906Total segment assets 20,059,734 20,611,906 40,671,640Unallocated assets 11,060 40,682,700

LiabilitiesSegment liabilities 506,271 - 506,271Unallocated liabilities 68,917 575,188


18. SEGMENTAL REPORTING (CONTD.)

a. Business segments (contd.)

Unlisted fixed income Other instruments investment Total RM RM RM

1.11.2018 to 30.4.2019RevenueSegment income 227,556 250,354 477,910Unallocated expenditure (72,900)Income before tax 405,010Income tax -Net income after tax 405,010

30.4.2019AssetsFinancial assets at FVTPL 10,961,893 - Short term deposits - 28,595,248Other segment asset 2,012,175 60,959Total segment assets 12,974,068 28,656,207 41,630,275Unallocated assets 21,372 41,651,647

LiabilitiesUnallocated liabilities 7,972,621

b. Geographical segments

As all of the Fund’s investments are located in Malaysia, disclosure by geographical segments is not relevant.

19. FINANCIAL INSTRUMENTS

a. Classificationoffinancialinstruments

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at either fair value or at amortised cost based on their respective classification. The significant accounting policies in Note 3 describe how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised.


19. FINANCIAL INSTRUMENTS (CONTD.)

a. Classificationoffinancialinstruments(contd.)

The following table analyses the financial assets and financial liabilities of the Fund in the statement of financial position by the class of financial instruments to which they are assigned and therefore by the measurement basis.

Financial Financial assets at Other assets at amortised financial FVTPL cost liabilities Total RM RM RM RM

30.4.2020AssetsUnlisted corporate bonds 11,598,029 - - 11,598,029Unlisted government

guaranteed bonds 476,678 - - 476,678Commercial papers 7,985,027 - - 7,985,027Short term deposits - 20,604,000 - 20,604,000Other receivable - 7,906 - 7,906Cash at bank - 11,060 - 11,060 20,059,734 20,622,966 - 40,682,700

LiabilitiesAmount due to Manager - - 15,467 15,467Amount due to Trustee - - 1,500 1,500Other payables - - 506,271 506,271 - - 523,238 523,238

30.4.2019AssetsUnlisted corporate bonds 8,014,677 - - 8,014,677Commercial papers 2,947,216 - - 2,947,216Short term deposits - 28,595,248 - 28,595,248Amount due from

licensed financial institutions - 2,012,175 - 2,012,175

Other receivable - 60,959 - 60,959Cash at bank - 21,372 - 21,372 10,961,893 30,689,754 - 41,651,647

LiabilitiesAmount due to Manager - - 7,927,845 7,927,845Amount due to Trustee - - 740 740 - - 7,928,585 7,928,585


19. FINANCIAL INSTRUMENTS (CONTD.)

b. Financial instruments that are carried at fair value

The Fund’s financial assets at FVTPL are carried at fair value. The fair values of these financial assets were determined using prices in active markets.

The following table shows the fair value measurements by level of the fair value measurement hierarchy:

Level 1 Level 2 Level 3 Total RM RM RM RM

Investments:30.4.2020Unlisted corporate bonds - 11,598,029 - 11,598,029Unlisted government

guaranteed bonds - 476,678 - 476,678Commercial papers - 7,985,027 - 7,985,027

30.4.2019Unlisted corporate bonds - 8,014,677 - 8,014,677Commercial papers - 2,947,216 - 2,947,216

Level 1: Listed prices in active marketLevel 2: Model with all significant inputs which are observable market dataLevel 3: Model with inputs not based on observable market data

The fair values of unlisted corporate bonds, unlisted government guaranteed bonds and commercial papers are based on average of bid prices provided by financial institutions at reporting date.

c. Financial instruments not carried at fair value and which their carrying amounts are reasonable approximations of fair value

The carrying amounts of the Fund’s other financial assets and financial liabilities are not carried at fair value but approximate fair values due to the relatively short term maturity of these financial instruments.


20. CAPITAL MANAGEMENT

The capital of the Fund can vary depending on the demand for creation and cancellation of units to the Fund.

The Fund’s objectives for managing capital are:

a. To invest in investments meeting the description, risk exposure and expected return indicated in its prospectus;

b. To maintain sufficient liquidity to meet the expenses of the Fund, and to meet cancellation requests as they arise; and

c. To maintain sufficient fund size to make the operations of the Fund cost-efficient.

No changes were made to the capital management objectives, policies or processes during the current and previous financial periods.

21. SUBSEQUENT EVENT

The COVID-19 pandemic has significantly disrupted many business operations around the world. For the Fund, the impact on business operations has not been a direct consequence of the COVID-19 outbreak, but a result of the measures taken by the Government of Malaysia to contain it. As the outbreak continues to evolve, it is challenging to predict the full extent and duration of its impact on business and the economy.

Whilst the Fund is not able to fully conclude on the financial impact of the COVID-19 outbreak at the date of this report, it is anticipated based on initial assessments performed, that there have not been any circumstances which would require adjustments to be made to the carrying values of the assets and liabilities of the Fund as at 30 April 2020. The Fund holds sufficient capital and will continue to prudently manage risks while implementing cost reduction measures in order to ensure that it remains resilient through this period of uncertainty.

This page has been intentionally left blank.

Investor Services CenterToll Free Line: 1 800 88 3737Fax: +603 2172 3133Email: [email protected]

Head Office, Kuala LumpurLevel 14, Kenanga Tower, 237, Jalan Tun Razak 50400 Kuala Lumpur, Malaysia Tel: 03-2172 3000 Fax: 03-2172 3080

Documents

Kenanga Cash Plus Fund€¦ · ii Kenanga Cash Plus Fund Interim Report Manager: Kenanga Investors Berhad (Company No. 199501024358 (353563-P) Registered Office Level 17, Kenanga