Interim report cover page- 30062015 - Pheim Unit Trusts

PHEIM

PHEIM UNIT TRUSTS BERHAD (545919-A)7th Floor, Menara Hap Seng (Letter Box 12)Jalan P.Ramlee,50250 Kuala Lumpur, Malaysia.Tel No: (603) 2142 8888Fax No:(603) 2141 9199

Your Need

is our Focus

I N T E R I M R E P O R T30 JUNE 2015

Pheim Emerging Companies Balanced Fund

Dana Makmur Pheim

Pheim Income Fund

Pheim Asia Ex-Japan Fund

Pheim Asia Ex-Japan Islamic Fund

PHEIM Interim Report 30.06.2015

TRUST DIRECTORY

MANAGERPheim Unit Trusts Berhad (545919-A)

Registered Office and Head Office:7th Floor, Menara Hap Seng (Letter Box 12)

Jalan P. Ramlee, 50250 Kuala LumpurTel:(603) 2142 8888 Fax:(603) 2141 9199

BOARD OF DIRECTORSDr. Tan Chong Koay (Non-independent)Azmi Malek Merican (Non-independent)

Wong Cheng Leong (Independent)Hoi Weng Kong (Independent)

INVESTMENT COMMITTEEOng Kheng Liat (Non-independent)

Foong Mei Phong (Non-independent)Zarina Omar (Independent)

Rostam Effendi Abdul Rahim (Independent)Pee Ban Hock (Independent)Ho Sen Feek (Independent)

Mark Wing Kong (Independent)

EXTERNAL INVESTMENT MANAGERPheim Asset Management Sdn Bhd (269564-A)

SHARIAH ADVISERIBFIM (763075-W)

Amanie Advisors Sdn Bhd (684050-H)

TRUSTEEMaybank Trustees Berhad (5004-P)

AUDITORSFolks DFK & Co

TAXATION CONSULTANTFolks Taxation Sdn Bhd (178104-M)

PHEIM lnterim Report 30.06.2015

CONTENTS

Page No

1. Funds Information

2. Funds Performance

3. Manager’s Report

4. Trustee’s Report, Statement by the Manager,Shariah Adviser’s Report and Unaudited FinancialStatements:

Pheim Emerging Companies Balanced Fund

Dana Makmur Pheim

Pheim Income Fund

Pheim Asia Ex-Japan Fund

Pheim Asia Ex-Japan Islamic Fund

1 – 6

7 – 21

22 – 40

41 – 74

75 – 107

108 – 140

141 – 176

177 – 213


Fund Information

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1 YourNeedis our Focus

Dear Valued Unit Holders

We are pleased to present the Manager’s Report and the unaudited financial statements for theperiod from 1 January 2015 to 30 June 2015 for the following funds:

i. Pheim Emerging Companies Balanced Fund (PECBF)

ii. Dana Makmur Pheim (DMP)

iii. Pheim Income Fund (PIF)

iv. Pheim Asia Ex-Japan Fund (PAXJ)

v. Pheim Asia Ex-Japan Islamic Fund (PAXJI)

1 FUND INFORMATION

1.1 Fund Category and Type

Fund Category and type

PECBF PECBF is a balanced fund that aims to provide income and some capitalgrowth.

DMP DMP is an Islamic balanced fund that aims to provide Shariah permissibleincome and some capital growth.

PIF PIF is a bond fund that aims to provide steady income.

PAXJ PAXJ is an equity growth fund that aims to achieve capital appreciation inthe long term by investing primarily in Asian markets excluding Japan.

PAXJI PAXJI is an equity growth fund that aims to achieve capital appreciation inthe long term by investing primarily in Asian markets excluding Japanthrough investments that comply with Shariah requirements.


Fund Information

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1.2 Funds’ Investment Objective and Strategy

Fund Investment objective and strategy

PECBF PECBF aims to provide Unit Holders with steady income and someprospects for capital appreciation (income and growth) in the longer term.PECBF will invest in a balanced portfolio of equities and fixed incomeinstruments subject to a maximum of 60% in equities and a minimum of40% in fixed income instruments and liquid assets.

DMP DMP aims to provide Unit Holders with steady income and someprospects for capital appreciation (income and growth) in the longer term.DMP will invest in a balanced portfolio of Shariah-compliant equities andsukuk subject to a maximum of 60% in Shariah-compliant equities and aminimum of 40% in sukuk and Islamic liquid assets. All investment will bemade in accordance to Shariah requirements.

PIF PIF aims to provide unit holders with consistent income returns in themedium to longer term. PIF will invest primarily in medium to long-termfixed income instruments subject to a minimum of 80% in fixed incomeinstruments and liquid assets and a maximum of 20% in equities.

PAXJ PAXJ aims to achieve capital appreciation in the long term by investingprimarily in Asian markets excluding Japan. PAXJ will invest, withoutrestraint, in securities listed on the stock exchanges of the Asia Pacificregion excluding Japan with initial focus in ASEAN countries, Hong KongSAR, China, Taiwan, Korea, Australia, New Zealand and India.

PAXJI PAXJI aims to achieve capital appreciation in the long term by investingprimarily in Asian markets excluding Japan through investments thatcomply with Shariah requirements. PAXJI will invest in securities listed onthe stock exchanges of the Asia Pacific region excluding Japan with initialfocus in ASEAN countries, Hong Kong SAR, China, Taiwan, Korea,Australia, New Zealand and India that comply with Shariah requirements.


Fund Information

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1.3 Duration of the Funds

Fund Duration of the Fund

PECBF PECBF was launched on 28 January 2002 and its offer period endedon 15 February 2002. It shall exist for as long as it appears to theManager and the Trustee that it is in the interest of the Unit Holders forit to continue.

DMP DMP was launched on 28 January 2002 and its offer period ended on15 February 2002. It shall exist for as long as it appears to the Managerand the Trustee that it is in the interest of the Unit Holders for it tocontinue.

PIF PIF was launched on 28 January 2002 and its offer period ended on 15February 2002. It shall exist for as long as it appears to the Managerand the Trustee that it is in the interest of the Unit Holders for it tocontinue.

PAXJ PAXJ was launched on 30 June 2006 and its offer period ended on 20July 2006. It shall exist for as long as it appears to the Manager and theTrustee that it is in the interest of the Unit Holders for it to continue.

PAXJI PAXJI was launched on 1 November 2006 and its offer period ended on21 November 2006. It shall exist for as long as it appears to theManager and the Trustee that it is in the interest of the Unit Holders forit to continue.

1.4 Funds’ Performance Benchmark

The performance benchmarks deemed relevant to access the performance of the respectiveFunds are shown in the following table:

Fund Performance Benchmark Source

PECBFWeighted average of:1. 60% of FTSE Bursa Malaysia EMAS Index return, and2. 40% of Maybank 1-year fixed deposit rate.

BursaMalaysia&Maybank

DMPWeighted average of:1. 60% of FTSE Bursa Malaysia EMAS Shariah Index*, and2. 40% of Maybank 1-year General Investment Account

(GIA) rate obtained at the beginning of the financial year.

BursaMalaysia&Maybank

PIFMaybank 1-year fixed deposit rate at the beginning of thefinancial year.

Maybank


Fund Information

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1.4 Funds’ Performance Benchmark (continued)

The performance benchmark for both the PAXJ and PAXJI is 7% growth in NAV per annumover the long term.

This is not a guaranteed return and is only a measurement of the respective Fund’sperformance. The Funds may or may not achieve the 7% per annum growth rate in anyparticular financial year but the manager targets to achieve this growth over the long term.

* KL Syariah Index was discontinued from 1 November 2007 by Bursa Malaysia. The new index that issubstituting KL Syariah Index is FTSE Bursa Malaysia EMAS Shariah Index (FBMS).

1.5 Funds’ Distribution Policy

Fund Distribution Policy

PECBF,DMP&PIF

The Funds intend to distribute income, if any, on an annual basis. Theincome distribution may be declared at the end of each financial year orany specified period as maybe approved by the Trustee.

PAXJ &PAXJI Distribution by the Funds is incidental.

1.6 Breakdown Of Unit Holdings By Size As At 30.06.2015

1.6.1 PECBFNo. of units held Unitholders

Sizeof holding (‘000) %

No. ofAccounts %

No. ofUnitholders %

5,000 andbelow

94.00 0.35 41 21.81 33 19.64

5,001 - 10,000 265.29 1.00 43 22.87 36 21.43

10,001 -50,000

1,188.90 4.48 59 31.38 57 33.93

50,001 -500,000

3,984.11 14.99 35 18.62 32 19.05

500,001 andabove

21,040.30 79.18 10 5.32 10 5.95

Total 26,572.60 100.00 188 100 168 100.00


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1.6.2 DMP

No. of units held Unitholders


No. ofAccounts %

No. ofUnitholders %

5,000 andbelow

137.15 1.78 54 26.77 47 25.27

5,001 - 10,000 365.62 4.74 51 25.76 50 26.88

10,001 -50,000

1,309.31 16.96 76 38.38 70 37.63

50,001 -500,000

2,523.03 32.70 16 8.08 17 9.14

500,001 andabove

3,381.74 43.82 2 1.01 2 1.08

Total 7,716.85 100.00 199 100.00 186 100.00

1.6.3 PIF



No. ofAccounts %

No. ofUnitholders %

5,000 andbelow

73.82 0.58 26 24.07 25 25.77

5,001 - 10,000 60.96 0.48 15 13.89 9 8.25

10,001 -50,000 747.91 5.87 38 35.19

3536.08

50,001 -500,000

3,589.62 28.19 22 20.37 21 21.65

500,001 andabove

8,260.62 64.88 7 6.48 8 8.25

Total 12,732.93 100.00 108 100.00 98 100.00


Fund Information

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1.6.4 PAXJ



No. ofAccounts %

No. ofUnitholders %

5,000 andbelow

124.77 0.61 43 23.89 41 23.30

5,001 -10,000

253.99 1.23 37 20.56 36 20.45

10,001 -50,000

1,149.09 5.58 60 33.33 57 32.39

50,001 -500,000

5,628.35 27.32 31 17.22 33 18.75

500,001 andabove

13,445.92 65.26 9 5.00 9 5.11

Total 20,602.13 100.00 180 100.00 176 100.00

1.6.5 PAXJI



No. ofAccounts %

No. ofUnitholders %

5,000 andbelow

219.48 2.54 70 27.89 68 27.42

5,001 -10,000

469.98 5.43 67 26.69 66 26.61

10,001 -50,000

1,724.42 19.93 92 36.65 93 37.50

50,001 -500,000

3,469.09 40.08 20 7.97 19 7.66

500,001 andabove

2,771.48 32.02 2 0.80 2 0.81

Total 8,654.45 100.00 251 100.00 248 100.00


Funds’ Performances

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2 FUND PERFORMANCE

2.1 Pheim Emerging Companies Balanced Fund

2.1.1 Portfolio composition

As at30.06.2015

(%)

As at30.06.2014

(%)

As at30.06.2013

(%)

(Percentage of Net Asset Value)

Biochemical & Biotechnology - - 2.19

Construction 1.72 4.34 3.55

Consumer Products 8.54 6.57 2.59

Finance 5.51 1.99 7.75

Industrial Products 10.12 14.70 7.43

Home & Furniture 0.80 - -

Infrastructure - - 0.90

Manufacture 1.27 1.26 -

Mining - 0.98 1.22

Oil & Gas 0.56 1.05 -

Plantations 1.57 4.36 1.83

Pharmacy & Cosmetic 2.62 1.25 -

Properties 6.60 9.63 9.26

Technology 2.18 3.63 0.93

Telecommunications 1.35 0.98 0.83

Trading / Services 4.01 4.96 3.22

Unquoted/Quoted Corporate Bonds 18.39 13.95 35.15

Cash and cash equivalents 34.76 30.35 23.15

Total 100.00 100.00 100.00



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PECBF

2.1.2 Other financial and performance data

6 monthsended

30.06.2015

6 monthsended

30.06.2014

6 monthsended

30.06.2013

Net asset value (RM‘000) 31,040.25 19,325.90 16,783.19

Units in circulation (‘000) 26,572.60 16,351.84 14,900.98

Net asset value per unit (RM) 1.1681 1.1819 1.1263

Highest NAV/ unit for the period

NAV/ unit 1.2367 1.2691 1.1871

Lowest NAV/ unit for the period

NAV/ unit 1.1576 1.1844 1.1043

Total returns for the period(RM’000)

Capital growth (338.17) (66.03) (880.21)

Income distribution 2,639.70 688.34 1,647.72

Income Distribution (Final)On

27.03.2015On

29.04.2014On

26.04.2013

Gross distribution per unit (sen) 6.75 6.50 6.00

Net distribution per unit (sen) 6.75 6.50 6.00

Management expense ratio (MER)(%)

0.88 0.85 0.94

Portfolio turnover ratio (PTR)(time)

0.34 0.32 0.37

Note:i) MER is calculated based on total fees and expenses incurred by the fund divided by

average value of the fund calculated on a daily basis. The MER for the periodincreased mainly due to the higher total fee and expenses incurred.

ii) PTR is calculated based on the average of the acquisitions and disposals ofinvestments of the fund to the average value of the fund calculated on a daily basis.The PTR for the period increased due to higher trading activities.



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PECBF

2.1.3 Average total return ended 30 June 2015

(%)

One Year +4.54

Three Years +7.43

Five Years +7.62

2.1.4 Annual total return for each of the last five financial years

Financial year ended 31 December : (%)

2014 +5.01

2013 +10.44

2012 +9.86

2011 -1.82

2010 +10.7

Note : All returns above are calculated based on NAV per unit adjusted for incomedistribution.

Data source : Bloomberg

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



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2.2 Dana Makmur Pheim

2.2.1 Portfolio compositionAs at

30.06.2015(%)

As at30.06.2014

(%)

As at30.06.2013

(%)(Percentage of Net Asset Value)




Plantations 4.62 6.27 -


Technology 4.82 6.49 -


Sukuk 24.02 23.23 5.09

Cash and Other Assets 32.38 25.77 69.76

Total 100.00 100.00 100.00


6 monthsended

30.06.2015

6 monthsended

30.06.2014

6 monthsended

30.06.2013






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DMP

2.2.2 Other financial and performance data (continued)

6 monthsended

30.06.2015

6 monthsended

30.06.2014

6 monthsended

30.06.2013


NAV/ unit 2.0560 2.0597 1.7837


NAV/ unit 1.9309 1.9130 1.5398


Capital growth 273.29 636.90 183.40

Income distribution 603.81 715.59 1,332.82

Income Distribution (Final)

On27.03.2015

On29.04.2014

On26.04.2013




0.93 0.93 1.05

Portfolio turnover ratio (PTR)time)

0.17 0.31 0.29


average value of the fund calculated on a daily basis. The MER for the period remainedsame as previous period.

ii) PTR is calculated based on the average of the acquisitions and disposals of Shariah-compliant investments of the fund to the average value of the fund calculated on a dailybasis. The PTR for the period decreased due to lower trading activities.



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DMP


(%)

One Year +1.52

Three Years +11.59

Five Years +10.52



2014 +5.28

2013 +26.49

2012 +5.87

2011 +1.7

2010 +10.7






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2.3 Pheim Income Fund


30.06.2015(%)

As at30.06.2014

(%)

As at30.06.2013

(%)

(Percentage of Net Asset Value)


Consumer Product 2.80 3.63 0.69

Finance 0.39 3.69 4.24

Industrial Products 7.08 5.84 -


Plantation - 1.68 0.77

Pharmacy & Cosmetic 0.23 - -

Properties 3.83 - 1.65

Trading/ Services 1.48 0.55 0.32

Technology 1.60 1.60 -

Unquoted Corporate Bonds 62.52 47.37 45.65

Cash and Other Assets 19.22 33.92 45.81

Total 100.00 100.00 100.00


6 monthsended

30.06.2015

6 monthsended

30.06.2014

6 monthsended

30.06.2013





NAV/ unit 1.1005 1.1394 1.1541


NAV/ unit 1.0708 1.0644 1.0874


Capital growth 405.61 161.35 (432.25)

Income distribution 129.52 91.56 594.35



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PIF

2.3.2 Other financial and performance data (continued)

6 monthsended

30.06.2015

6 monthsended

30.06.2014

6 monthsended

30.06.2013

Income Distribution (Final)On

27.03.2015On

29.04.2014On

27.04.2013




0.67 0.65 0.69

Portfolio turnover ratio (PTR)(time)

0.14 0.29 0.21


average value of the fund calculated on a daily basis. The MER for the period increasedmainly due to the higher total fee and expenses incurred.

ii) PTR is calculated based on the average of the acquisitions and disposals of investmentsof the fund to the average value of the fund calculated on a daily basis. The PTR for theperiod decreased due to lower trading activities.


(%)

One Year +4.40

Three Years +3.97

Five Years +4.76



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PIF



2014 +2.29

2013 +3.29

2012 +6.02

2011 +4.36

2010 +3.4






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2.4 Pheim Asia Ex-Japan Fund


30.06.2015(%)

As at30.06.2014

(%)

As at30.06.2013

(%)Industry Sector (Percentage of NAV)

Biochemical and Biotechnology - 0.79 0.69



Finance 7.04 17.00 25.52

Electronic 3.09 - -



Infrastructure 0.82 - 1.45

Manufacture 1.98 2.62 0.67

Mining 0.74 3.26 1.99

Oil & Gas 2.66 1.15 -

Pharmacy & Cosmetic 4.23 2.08 -


Properties 11.34 10.15 5.83

Retail 1.12 - -

Technology 4.61 6.67 1.94




Total 100.00 100.00 100.00



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PAXJ


6 monthsended

30.06.2015

6 monthsended

30.06.2014

6 monthsended

30.06.2013





NAV/ unit 0.9857 0.8868 0.8518


NAV/ unit 0.8725 0.8134 0.7571

Total returns for the period (RM’000)

Capital growth 1,250.96 153.73 (1,483.87)

Income distribution 1,511.08 593.46 (1,184.66)

Income Distribution (Final)NIL NIL NIL

Gross distribution per unit (sen) NIL NIL NIL

Net distribution per unit (sen) NIL NIL NIL

Management expense ratio (MER) (%) 0.98 0.88 0.83

Portfolio turnover ratio (PTR) (time) 0.67 0.43 0.58

Note:iii) MER is calculated based on total fees and expenses incurred by the fund divided by


iv) PTR is calculated based on the average of the acquisitions and disposals ofinvestments of the fund to the average value of the fund calculated on a daily basis.The PTR for the period increased due to higher trading activities.



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PAXJ


(%)

One Year +6.46

Three Years +7.53

Five Years +3.08


Financial year ended 31 December :(%)

2014 +1.80

2013 +4.78

2012 +8.08

2011 -17.39

2010 +6.0

Note : All returns above are calculated based on NAV per unit adjusted for incomedistribution





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2.5 Pheim Asia Ex-Japan Islamic Fund

2.5.1 Portfolio composition

As at30.06.2015

(%)

As at30.06.2014

(%)

As at30.06.2013

(%)Industry Sector (Percentage of NAV)

Biochemical and Biotechnology - 1.57 1.67

Construction 7.58 3.61 -


Electronic 0.84 - -

Energy and Water Supply - 3.56 4.13


Mining 1.56 2.51 6.85

Oil & Gas 2.60 1.66 -

Pharmacy & Cosmetic 2.94 - -



Technology 11.77 14.29 4.86




Total 100.00 100.00 100.00



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PAXJI


6 monthsended

30.06.2015

6 monthsended

30.06.2014

6 monthsended

30.06.2013





NAV/ unit 1.1069 1.0165 0.8787


NAV/ unit 0.9870 0.9344 0.8185

Total returns for the period (RM’000)

Capital growth 119.20 (137.01) 864.41

Income distribution 566.36 608.97 (1,396.67)

Income Distribution (Final)NIL NIL NIL

Gross distribution per unit (sen) NIL NIL NIL

Net distribution per unit (sen) NIL NIL NIL

Management expense ratio (MER) (%) 1.14 1.05 1.08

Portfolio turnover ratio (PTR) (time) 0.38 0.34 0.41



ii) PTR is calculated based on the average of the acquisitions and disposals ofinvestments of the fund to the average value of the fund calculated on a daily basis.The PTR for the period increased due to higher trading activities.



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PAXJI


(%)

One Year +1.72

Three Years +10.81

Five Years +6.98



2014 +3.80

2013 +15.42

2012 +7.41

2011 -7.59

2010 +6.5

Note : All returns above are calculated based on NAV per unit adjusted for incomedistribution




Manager’s Report

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3 MANAGER’S REPORT

3.1 Performance Review

3.1.1 PECBF

The Fund has successfully met its investment objective of providing investors with capital

appreciation in longer term by investing in a balanced portfolio of equities and fixed

income instruments.

For the six months period ended 30 June 2015, the net asset value (NAV) per unit of the

Fund declined by 2.71% which has underperformed the benchmark by 1.08%. During the

period, the total NAV increased to approximately RM31.0 million from RM20.8 million.

The Fund had made an income distribution of 6.75 sen per unit (net of tax) on the 27March 2015 for the year ended 31 December 2014. After the income distribution, theNAV per unit declined to RM1.1576 from RM1.2251.

Performance table since the last review period (6 months):

Benchmark/ FundAs at

30.06.2015As at

31.12.2014Change

%

Benchmark of PECBF 105.05% 106.68% -1.63

PECBF – NAV per unit (RM) 1.1681* 1.2006 -2.71

* adjusted for income distribution on 27.03.2015

3.1.2 DMP

The Fund has successfully met its investment objective of providing investors with capitalappreciation in longer term by investing in a balanced portfolio of equities and fixedincome instruments which strictly comply with the principles of the Shariah.

For the six months period ended 30 June 2015, the net asset value (NAV) per unit of thefund increased by 0.40% which has outperformed the benchmark by 1.95%. During theperiod, the total NAV increased to approximately RM15.0 million from RM13.5 million.


Manager’s Report

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3.1.2 DMP (contd.)

The Fund had made an income distribution of 6.75 sen per unit (net of tax) on the 27March 2015 for the year ended 31 December 2014. After the income distribution, the NAVper unit declined to RM1.9774 from RM2.0449.



30.06.2015As at

31.12.2014Change

%

Benchmark of DMP 104.23% 105.78% -1.55

DMP – NAV per unit (RM) 1.9463* 1.9385 +0.40


3.1.3 PIF

The Fund has successfully met its investment objective of providing investors withconsistent income returns in the medium to longer term by investing primarily in mediumto long term fixed income instruments and also equities and other high yieldinginstruments.

For the six months period ended 30 June 2015, the net asset value (NAV) per unit of thefund increased by 2.29% which has outperformed the benchmark by 0.65%. During theperiod, the total NAV decreased to approximately RM13.9million from RM16.7 million.

The Fund had made an income distribution of 2.00 sen per unit (net of tax) on the 27March 2015 for the year ended 31 December 2014. After the income distribution, the NAVper unit declined to RM1.0784 from RM1.0984.



30.06.2015As at

31.12.2014Change

%

1-year fixed deposit rate (pro-rated) 46.22% 44.58% +1.64

PIF – NAV per unit (RM) 1.0947* 1.0702 +2.29



Manager’s Report

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3.1.4 PAXJ

The Fund has successfully met its investment objective of providing investors with capitalappreciation in longer term by investing in a balanced portfolio of equities and fixedincome instruments.

For the six month period ended 30 June 2015, PAXJ, based on its net asset value(NAV) per unit, increased by 7.46% and outperformed the benchmark by 3.99%. Thetotal NAV decreased to approximately RM19.1 million from RM26.0 million during thereview period.



30.06.2015As at

31.12.2014Change

%

7% per annum (pro-rated) 62.67% 59.20% +3.47

NAV per unit (RM) 0.9259 0.8616 +7.46

3.1.5 PAXJI

The Fund has successfully met its investment objective of providing investors with capitalappreciation in long term by investing primarily in Asian markets excluding Japan throughinvestments that comply with Shariah requirements.

For the six month period ended 30 June 2015, PAXJI, based on its net asset value(NAV) per unit, increased by 4.87%, outperformed the benchmark by 1.39%. The totalNAV decreased to approximately RM8.9 million from RM9.6 million during the reviewperiod.



30.06.2015As at

31.12.2014Change

%

7% per annum (pro-rated) 60.30% 56.82% +3.48

NAV per unit (RM) 1.0340 0.9860 +4.87


Manager’s Report

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3.2 Performance Chart Since Inception

3.2.1 PECBF

3.2.2 DMP


Manager’s Report

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3.2.3 PIF

3.2.4 PAXJ


Manager’s Report

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3.2.5 PAXJI

Note: The data source for all the above performance returns is Bloomberg.

3.3 Changes in Asset Allocation since the last review (in percentage)

3.3.1 PECBF

Asset ClassAs at

30.06.2015As at

31.12.2014 Change

Equity Securities – in Malaysia 23.17 15.43 +7.74

Equity Securities – outside Malaysia 23.68 23.75 -0.07

Corporate Bonds 18.39 27.35 -8.96

Cash and cash equivalent 34.76 33.47 +1.29

Total 100.00 100.00


Manager’s Report

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3.3.2 DMP

Asset ClassAs at

30.06.2015As at

31.12.2014 Change

Shariah-compliant equity securities– in Malaysia

43.60 37.37 +6.23

Sukuk 24.02 26.61 -2.59

Cash and cash equivalent 32.38 36.02 -3.64

Total 100.00 100.00

3.3.3 PIF

Asset ClassAs at

30.06.2015As at

31.12.2014 Change

Corporate Bonds – in Malaysia 62.52 51.91 +10.61

Money market & cash 19.22 32.34 -13.12


Equity Securities – outside Malaysia 5.88 6.73 -0.85

Total 100.00 100.00

3.3.4 PAXJ

Asset ClassAs at

30.06.2015As at

31.12.2014 Change

Equity Securities – outside Malaysia 58.07 47.82 +10.25



Total 100.00 100.00


Manager’s Report

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3.3.5 PAXJI

Asset ClassAs at

30.06.2015As at

31.12.2014 ChangeShariah-compliant equity securities –outside Malaysia

36.98 34.75 +2.23

Shariah-compliant equity securities –in Malaysia

37.97 27.75 +10.22


Total 100.00 100.00

3.4 Funds’Strategies and Policies Employed

3.4.1 PECBF

As at end of June 2015, equities exposure was higher at 46.85% versus 39.18% as atend of December 2014. We increased the Fund equity exposure as we took theopportunity to buy undervalued stocks with good upside potential.

As part of diversification strategy, the Fund has invested in foreign equities listed in HongKong/China, Singapore, Indonesia, Philippines, Korea and Thailand. We are investing infixed income securities which have a maturity of less than 5 years in order to mitigaterisks in event of an increase in the interest rates.

For the period ended 30 June 2015, PECBF recorded the following gains or losses inthe various markets invested.

Market

Net realised andunrealised gain/ (loss)

RM’000

Malaysia 200Indonesia (393)Korea 47Thailand (79)Philippines (87)Singapore (167)Hong Kong/China 141

3.4.2 DMP

As at end of June 2015, Shariah-compliant equities exposure was higher at 43.60%versus 37.37% as at end of December 2014. We increased the Fund Shariah-compliantequity exposure as we took the opportunity to buy undervalued Shariah-compliant stockswith good upside potential.


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3.4.2 DMP (continued)

We are investing in sukuk which have a maturity of less than 5 years in order to mitigaterisks in event of an increase in the interest rates.

For the period ended 30 June 2015, DMP recorded a net realised and unrealised loss ofRM 88,095 due to investments in domestic Shariah-compliant equities.

3.4.3 PIF

As at end of June 2015, equities exposure was higher at 18.26% versus 15.75% as atend of December 2014. We increased the Fund equity exposure as we took theopportunity to buy undervalued stocks with good upside potential.

As part of diversification strategy, the Fund has invested in foreign equities listed in HongKong, Singapore and Indonesia. We are investing in fixed income securities which have amaturity of less than 5 years in order to mitigate risks in event of an increase in theinterest rates.

For the period ended 30 June 2015, PIF recorded the following gains or losses in thevarious markets invested.

MarketNet realised and

unrealised gain/ (loss)RM’000

Malaysia (19)Indonesia 4Philippines 20Singapore (171)Hong Kong/China 123

3.4.4 PAXJ

The total equity exposure of PAXJ was 87.72% as at 30 June 2015, an increase of19.96% from 67.76% at the end of December 2014. The increase of exposure wasmainly in Malaysia, Hong Kong/China, Taiwan and Indonesia markets. 55.26% wasinvested in foreign equities and the remaining in domestic equities.

During the period, the PAXJ has invested in foreign equities listed in Hong Kong/China,Singapore, Indonesia, Philippines, Thailand, Taiwan and Korea.


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3.4.4 PAXJ (continued)

For the period ended 30 June 2015, PAXJ recorded the following gains or losses in thevarious markets invested.



Malaysia (105)Indonesia (153)Korea (334)Philippines 98Thailand (110)Singapore (870)Hong Kong (17)Taiwan 97

3.4.5 PAXJI

The total equity exposure of PAXJI was 74.88% as at 30 June 2015, an increase of12.48% from 62.40% at the end of December 2014. The increase of exposure was mainlyin Malaysia and Hong Kong/China markets. 55.26% was invested in Shariah-compliantforeign equities and the remaining in domestic Shariah-compliant equities.

During the period, the PAXJI has invested in Shariah-compliant foreign equities listed inHong Kong/China, Singapore, Indonesia, Philippines, Thailand, Taiwan and Korea. TheFund had not invested in any sukuk.

For the period ended 30 June 2015, PAXJI recorded the following gains or losses in thevarious markets invested.



Malaysia (175)Indonesia (359)Korea (66)Philippine (6)Thailand (45)Singapore (14)Hong Kong (92)Taiwan 15


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3.5 Market Review, Outlook and Strategy

3.5.1 Malaysian Bond/Sukuk Market

3.5.1.1 Bond/SukukMarket Review

On the 7th of May 2015, Bank Negara Malaysia decided to maintain the overnight policyrate (OPR) at 3.25%. According to the monetary policy statement, the current stance ofmonetary policy remains accommodative and supportive of economic activity. Themonetary policy committee (MPC) will continue to carefully assess the external anddomestic developments and their implications on the risks to inflation and the Malaysianeconomy. Although the underlying inflation is expected to remain contained, theimplementation of Goods and Services Tax may lead to higher inflationary pressure.

During the 1st half of 2015, there has been huge concern that the Fitch Ratings couldpotentially downgrade the Malaysian sovereign ratings. Prior to the announcement onMalaysian sovereign ratings on the 30th of June 2015, Fitch Ratings has said thatMalaysia was rated A- and there is more than 50% likelihood of a rating cut. According tothe rating agency, Malaysia sits more naturally in the BBB rated category and thecountry’s debt-to-GDP ratio has surpassed the average levels seen for peers rated A andBBB.

In an unexpected move, Fitch Ratings has affirmed Malaysia’s Long-Term foreigncurrency Issuer Default Rating (IDR) at ‘A-’ and the local currency at IDR at ‘A’ on the30th of June 2015. The issue ratings on Malaysia’s senior currency bonds were alsoaffirmed at ‘A’. Meanwhile, the outlook on the Long Term IDRs has been revised toStable from Negative. According to the rating agency, the fiscal finances have improvedas the general government deficit has fallen to 3.8% of GDP in 2014 from 4.6% of GDP in2013. In addition, the general government debt/GDP declined to 53.9% at the end of2014 from 54.7% at the end of 2013.

3.5.1.2 Bond/Sukuk Market Outlook and Strategy

Although a higher inflationary pressure is expected in the year 2015, we opine that BankNegara may maintain its overnight policy rate (OPR) at 3.25% for the 2nd half of the year2015. Despite the challenging economic outlook, we do not foresee a reduction in theinterest rate in the immediate term as it may lead to a further depreciation of the MalaysianRinggit.

On the external front, the US remains committed to keep interest rates at exceptionally lowlevels. However, this could change anytime as the US economic recovery continues to bepromising. That being said, we believe the hike in interest rates would be done on agradual basis to avoid disrupting US economic recovery. In fact, the US Federal Reservehas reiterated that the interest rates would be kept low for a considerable time andsignalled that it would be patient in deciding on the timing to raise the interest rates.

Given the challenging economic outlook, we would continue to adopt a tight creditassessment policy. Among the fundamental assessment on the bonds/sukuk include theissuers’ credit profile, management, financial performance and industry outlook.


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In order to mitigate the interest rate risks, we would prefer to invest in fixed incomesecurities/sukuk which offer shorter-dated maturities. Apart from investing in high qualitybonds/sukuk that meets our investment criteria, we would ensure that the bonds/sukukinvested would be able to give investors a decent yield for the risks undertaken.

3.5.2 Stock Markets Review

3.5.2.1Malaysian Stock Market – (Bursa Malaysia)

The FBM KLCI declined 3.1% in first half 2015 to close at 1,706.64 points at the end ofJune as investors were expecting a sovereign rating downgrade by Fitch Ratings at theend of the month. However, the rating agency surprised the market by revising theoutlook on Malaysia sovereign rating to “stable” from “negative” and affirmed thecountry’s long-term foreign currency Issuer Default Rating (IDR) at “A-” with localcurrency IDR at “A”.

Bank Negara has kept its overnight policy rate unchanged at 3.25% amid expectations ofgrowth moderating. The central bank expects the economy continued to be underpinnedby domestic demand but slower growth in private consumption, following the frontloadingof consumption activity prior to the implementation of the GST in April 2015. Theweakening exports, together with global economic uncertainties and febrile domesticpolitics have rendered the Ringgit depreciating against US Dollar.

Headline inflation was 2.5% in June compared with the same month a year ago, due tothe increase in petrol prices, when RON95 and RON97 petrol saw a 10 sen increase toRM2.05 and RM2.35. The headline inflation is expected to be higher following the impactof the GST and weaker Ringgit, before moderating towards the second half of 2016.

Malaysia Industrial Production picked up slightly with recording a growth of 4.5% y.o.y inMay, versus +4.0% in April and +7.1% in March. The growth was driven by the surge inmining output, but was partially offset by a slowdown in the growth of manufacturing andelectricity output, due to sluggish exports and softer consumer spending following theimplementation of GST in April 2015.

While Fitch upgrade was a positive surprise, the intensifying media coverage on 1MDBcontinued to hamper the market sentiment. On the positive side, the export-orientedsector, by benefiting from the weakening Ringgit, is expected to perform well in near term,such as the industries like semiconductor, furniture and rubber gloves. Constructionsector should continue to see robust growth as some of the mega infrastructure projectsare to kick in in near term, such as MRT Line 2, LRT Line 3, Pan-Borneo Highway andPenang Transport Master Plan. However, the consumer spending is expected to remainsloppy as the poor post-GST sentiment is still hanging.We continue to be neutral on Malaysia given the current market environment and therelatively high current market valuation but we shall continue to look for opportunities toinvest in companies that are undervalued with good earnings growth potentials andreasonably geared The U.S. Fed’s rate rise fears and the “Grexit” risks are expected toremain.


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3.5.3 Foreign Securities Investment - Market Review

3.5.3.1 Singapore Market

FSSTI declined 2.20% m.o.m in June leading to a drop of 1.42% YTD, due to thedeepening of Greek debt crisis, China’s economy slowdown and uncertain in Singapore’sgrowth prospects.

Inflation in Singapore recorded at -0.4% y.o.y in May, up from -0.5% in April, due to thehigher cost of private road transport. Services inflation fell to 0.5%, from 1.1% in April,mainly due to budgetary measures including the reduction in the concessionary foreigndomestic worker levy and the waiver of national examination fees, as well as a smallerincrease in telecommunication services fees.

Singapore’s exports dropped 0.2% y.o.y in May. The fall in exports comes after a 2.2%expansion in the previous month. Electronic exports fell 2.5% y.o.y, following the 4.0%decline in the previous month. Non-electronic exports expanded by 0.8%, following the4.7% rise in the previous month. The non-oil domestic exports to China, its biggest exportmarket fell 4.3% y.o.y in May, extending a 5.1% slide in April. Exports to European Unionfell 5.6% y.o.y after rising 11.4% in April.

Singapore’s economy grew 1.7% y.o.y in the second quarter of this year, lower than the2.8% growth in the previous quarter. On a q.o.q seasonally-adjusted annualised basis,the economy contracted 4.6%, a reversal from the 4.2% expansion in the precedingquarter. The weak growth was due to three main key sectors, manufacturing, constructionand services reported sequential contraction. Singapore’s economy contracted more thananalysts predicted in 2Q15, underscoring the weakening outlook amid sluggish globalgrowth. The outlook for this year remain cloudy given the risks in the global economy anddivergence in monetary policy directions. Domestic restructuring and the resulting labourshortage will also weigh on growth.

Given the absence of domestic catalysts, Singapore market will continue to be driven byexternal events, driven by volatility of China’s equity market, development of Greecebailout, recovery in oil price and timing of US rate hikes. The upcoming 2Q15 reportingseason is expected drive the market’s volatility in near term.

3.5.3.2 Hong Kong/ China Market

Hang Seng Index and Hang Seng China Enterprise Index (HSCEI) increased 11.21% and8.31% year-to-date to 26,250.03 points and 12,981.23 points respectively. However, bothindexes consolidated in June with drop of 4.28% and 7.96% m.o.m respectively. The fallshave been partly due to margin calls and panic selling by investors, driving the sharesdown since mid-June.

The Chinese authorities has intervened to soothe fears of a stock collapse. The People’sBank of China (PBOC) cut the 1-year lending rate and 1-year deposit rate by 25bps,respectively from 5.1% and 2.25% to 4.85% and 2%. Meanwhile, the central bank alsodeclared further targeted required reserve ratio (RRR) reductions for eligible banks andfinance companies. Specifically, the RRR will be reduced by 50bps for eligible banksfulfilling the requirements related to lending to agriculture sector, rural development &


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farmers and small & micro businesses. This was the fourth rate cut since November 2014and third cut of the RRR this year.

The authorities also announced other measures to support the equity market, whichinclude reducing transaction fee for A-shares, abolishing the mandatory levels of margincalls/liquidation for brokers’ margin loans and broadening brokers’ financing channels andallow national pension fund investing in the equities market.China's economic growth shows sign of stabilization, with the GDP posting a 7% growthrate in the second quarter. The stable growth momentum is underpinned by the slightrebound in industrial production. Economists expect the government to continue escalatepolicy supports in the coming months. Industrial output growth accelerated to 6.8% inJune, up from 6.1% in May. The fixed-asset investment growth in the first six monthsslightly declined to 11.4% year-on-year from 13.5% in the first quarter, due to thecontraction of real estate investment despite the government's supportive policy. Thegrowth of retail sales of consumer goods remained stable, at a rate of 10.4% fromJanuary to June, compared with 10.6% in the first quarter.Despite the 2Q15 GDP grew stronger than expected, the mainland economy continues toface further downward pressure with de-stocking in the property sector, capacityreduction in traditional industries and consecutive shrinkage of investment and financingby local government. The government is expected to introduce more stimulus measuresin 2H15 to support the economy.Hong Kong’s economy grew slightly in the 1Q15, affected by weak retail sales on theback of a slowdown in mainland Chinese tourists. GDP in 1Q15 grew a seasonallyadjusted 0.4%, slightly better than revised 0.2% growth in 4Q14. The governmentmaintained its full year GDP growth forecast of 1% to 3% while headline inflation isestimated at 3.2%. The political tension eased after the lawmakers rejected acontroversial Beijing-backed reform package in June that would have forced voters in theformer British colony to choose the southern Chinese city's next leader only from a list ofcandidates approved by China's government. Under the proposals, Hong Kong's voterswould have only been able to choose from candidates for the city's top leadership role,known as its chief executive, approved by a nominating committee appointed by thegovernment in Beijing.

3.5.3.4 Thailand Market

The SET index wrapped with a return of 0.46% for the 1H15 in local currency terms toend at 1504.55 points. Inflation contracted to -1.07% in June compared to +0.60% inJanuary. The Bath depreciated 2.70% against US Dollar to Baht33.80/USD compared toUS Dollar to Baht32.91 in January.

Martial law was eventually lifted and being replaced with Section 44 of the interimconstitution, which will focus mainly on threats to national security. During the first half ofthe year, Thailand was faced with promoting sustainable fisheries by the EU to tackleillegal and unregulated fishing practices before imposing sanctions on Thailand’s seafoodexports.

The Monetary Policy Committee decided to bring the policy rate down by 50bp to 1.5%from 2.0% as at 1H15 through two cuts, one in March and another in April on the back ofweaker-than-expected external demand and the decline in inflationary pressures. Thefinance minister warned continued drought could drag GDP down by -0.5% due to lowerspending power in the agricultural sector.


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Thailand started the year with the SET rebounding to a higher level but eventually theeconomic momentum weakened aside from the fragile growth outlook approaching Juneas macro and political concerns has capped market activities. We remain cautiouslyoptimistic and are looking for opportunities to secure a better position in 2H15.

3.5.3.5 Philippine Market

The Philippine equity market gained 4.62% y.o.y in the first half of the year to settle at7564.50 points in June. The rise was backed by healthy corporate earnings. The Pesodepreciated 0.87% during the first 6 months of the year to PHP45.107/USD at the end ofJune.

The Philippines registered GDP growth of 5.2% in 1Q14, lower than the revised 6.6%GDP growth in 4Q14. The weakening of GDP growth rate is mainly due to slowergovernment spending.

At the four monetary policy meetings held in the first half of the year, the Bangko Sentralng Pilipinas (BSP) kept the benchmark borrowing and lending rates unchanged at 4%and 6% and Special Deposit Account (SDA) rate at 2.5%. The reserve requirement ofbanks was also kept unchanged. At the June monetary policy meeting, the BSP reviseddownward the inflation forecast to 2.1% from 2.3% in 2015, and 2.5% from 2.6% in 2016.

Philippines’ export slowed 4.1% to USD 4.376 bil in May, mainly due to lower demand onother manufacturing products as well as woodcrafts and furniture. Four-month exportsregistered 1.2% decrease to USD18.623 bil. Philippine imports tumbled 12.8% y.o.y inApril to USD4.677 bil, dragged by lower oil prices and lower electronic imports. In the firstfour months, total imports decreased by 6.2% y.o.y to USD20.377 bil.

Overseas foreign worker (OFW) cash remittances moderated to 5.1% y.o.y in April from11.3% y.o.y in March. This brought YTD OFW cash remittances to 5.4% y.o.y to USD7.8bil. BSP has a full year target of 5% growth.

We expect the Philippines economy to remain robust in 2015 driven by healthy domesticconsumption, mainly due to lower oil prices, higher cash remittances in Peso terms, andelection-related spending, as well as higher government expenditure. However, we arewatchful on the potential risks from correction in market valuation and remain selective onthe Philippines market for undervalued high growth companies.

3.5.3.6 Taiwan Stock Market

The TWSE Index increased 0.17% in the first half of the year to close at 9323.02 indexpoints as at end of June 2015. The index started strong in the 1st quarter with anincrease of 3% due to strong Apple’s iPhone 6 series but subsequently declined 2.75% in2nd quarter due to Greece’s debt crisis and weaker economy data in Taiwan. The TWDappreciated 2.37% against the USD in the first six months of the year to close atTWD30.873/USD at the end of June.

Directorate-General of Budget, Accounting, and Statistics reported the 1Q15 GDP growthof 3.46%, miss the government forecast of 3.5%, due to weak private investment andfiscal spending. The government’s full year 2015 GDP target is 3.78%.


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Taiwan official manufacturing Purchasing Managers’ Index (PMI) has been on thedeclining trend towards 1H15 and recorded 50.8 in June from 51.1 in May and 54.7 inApril. It was due to downturn in Taiwan’s manufacturing sector as output and new orderscontracted at faster paces.

Taiwan Central Bank will keep the rediscount rate at 1.875%, the collateralized loan rateat 2.25% and the unsecured loan rate at 4.125% as the nation’s economy is still stablewith abundant liquidity and low inflation.

For technology sector, most of the smartphone brands are expected to launch newmodels on the 2nd half of the year, however, market is cautious on the slowing demandgrowth of smartphone and oversupply situation due to inventory overbuilt bymanufacturer.

With China aggressively expands its capacity and technology capability into technologysector, we are cautiously choosing Taiwan’s companies with growth potential that areundervalued and can sustain their competitiveness in the long run.

3.5.3.7 South Korean Stock Market

The KOSPI index declined by 0.70% close at 2,074.2 points on concerns that the U.S.interest-rate increase was imminent. As a result, this spurred foreign selling. Meanwhile,the KRW depreciated 2.3% against the USD in the 1H15, mainly fueled by the recentstimulus monetary policy in Japan, which led to Japanese yen weakening against thegreenback, thus hurting South Korea’s economy.

For the 1st quarter of 2015, the South Korea’s GDP grew by 2.5% y.o.y. On a q.o.q basis,the economy grew by 0.8%. There has been a slowdown in economic growth, mainly dueto a slump in exports and the outbreak of MERS which sapped consumer spending. Asthe country’s growth have been impaired by these events, the Bank of Korea trimmed the2015 GDP growth forecast from 3.8% to 3.1% projected earlier.

For the month of May 2015, inflation was on the low side of 0.5% on the back of sluggishdomestic demand and consumption. Despite a 0.1% recovery from the previous month,which was the lowest rate since 1999, the figure is still well below the Bank of Korea’starget inflation of 2.5% to 3.5%.

The unemployment rate in South Korea stood at 3.9% in June, up from 3.8% in May. Withhigher unemployment rate, job prospects in South Korea remains challenging especiallyfor young graduates due to slow economic growth. The unemployment rate for youngpeople between ages 15-29 stood at 9.3% in May.

We expect the KOPSI index to remain range bound on concerns that there could bedownward revision in earnings in the 2nd half of the year due to sluggish economicoutlook. However in mid-June, BOK decided to cut its key policy rate to record low. Thisshould help stimulate the nation’s consumer spending, thus providing a ‘bolster’ to the fallin earnings.


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3.5.3.8 Indonesian Stock Market

The Jakarta Composite Index (JCI) had a good run going into the year 2015 and it evenmanaged to record an all-time daily closing high of 5,523.29 points in early April.However, it later slumped to close the first half of 2015 at 4,910.66 points, a 6.1% decline,mainly due to slow government spending and high interest rate environment impeding theeconomic growth. The Rupiah depreciated 7.7% against the Dollar to close the first half atIDR13,339/USD.

The economy slowed further in the first quarter 2015 as the GDP came out weaker thanexpected at 4.71% y.o.y, the lowest growth in 5 years (4Q14: 5.01%). Being a largecommodity exporter, Indonesia is feeling the pinch from plunging commodity prices andglobal economic slowdown. Indonesia’s current account deficit (CAD) narrowed toUSD3.8 bil or 1.8% of GDP in the first quarter 2015, contributed by a better tradeperformance and it was an improvement from the previous quarter’s figure of USD5.7 bilor 2.6% of GDP.

The CPI inflation accelerated to 0.54% m.o.m and 7.26% y.o.y in June from May’s 0.50%m.o.m and 7.15% y.o.y on higher food prices triggered by the fasting month of Ramadanand the upcoming Eid-ul-Fitr.

Bank Indonesia kept its benchmark rate unchanged at 7.5% in June after lowering it by25bps in a surprise move in February 2015. The Central Bank aims to steer the inflationrate towards the target range of 3% to 5% for 2015 and 2016 respectively, as well asmanage the current account deficit to a healthier level of 2.5% to 3.0% of GDP in themedium term.

Concerns are growing on Indonesia’s ability to balance between achieving its economicgrowth and current account deficit targets. The Central Bank’s ability to spur the slowgrowth economy may be limited given the rising inflationary pressure, weakening Rupiah,and concerns on the US Fed’s rate hike. In addition, consumers’ purchasing powerdeclines amidst a high interest rate environment and a continual softness of commodityprices are also affecting the incomes of mining and plantation communities. In anticipationto more infrastructure projects commencing in the second half of the year, this shouldhelp to rejuvenate the economic growth.

We maintain an optimistic but cautious view on Indonesia as we believe its long termgrowth story is appealing. However, given the relatively high current market valuationagainst its regional peers, we shall be watchful for any opportunities. Our focus is toselectively buy stocks on weakness, in which we feel are undervalued, with low gearingand good earnings growth potentials.

3.5.3.9 Australian Stock Market

The ASX 200 Index remained flat to close at 5,459 points, gained by merely 0.9% for thefirst half of 2015. The index gained as much as 10.8% in early April before losing groundin most of the third quarter. The Aussie Dollar weakened by 6.0% against the US Dollar toclose at AUD1.30/USD.

Australia’s 1Q GDP up 0.9% q.o.q (+0.5% in 4Q 2014) and 2.3% y.o.y (+2.5% in 4Q2014), which was slight above the consensus estimates. The strong growth was fuelled


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by a jump in mining export volumes and a build-up in producer and retail stock offsetweak business investment.

The Reserve Bank of Australia (RBA) cut the benchmark interest rate twice over 1H14 toa record low of 2.0%. The board indicated that the economy has continued to grow, but ata rate somewhat below its longer-term average. In such circumstances, monetary policyneeds to be accommodative. Low interest rates are acting to support borrowing andspending.

The CPI rose by 1.3% y.o.y (+1.7% in 4Q 2014) and 0.2% q.o.q in 1Q (+0.2 in 4Q 2014).While cost of transport declined at a slower pace, food and housing inflation was weakerthan in the previous period.

3.5.4 Foreign Securities Investment - Market Outlook and Strategy

During the 1st half of 2015, the Dow Jones Industrial traded marginally lower by 1.14% toclose at 17,619.51 points. This was despite the fact that the Federal Reserve chair JanetYellen has indicated that the Federal Reserve is unlikely to raise interest ratesdramatically this year. According to her, although the US job market recovery has beensubstantial, she added that there is “some way to go” before the economy could reachmaximum employment. In recent months, there has been renewed concern that the USequity market is no longer cheap and investors seem to become less tolerant to negativeeconomic data.

During the 1st half of the year, the FBMKLCI declined by 3.10% to close at 1,706.64points on the back of concern over weak earnings outlook and potential downgrade in theMalaysian sovereign rating. Meanwhile, the FTSE Bursa Small Cap index saw a reboundof 4.79% to close at 15,755.5 points as investors took the opportunity to buy undervaluedsmall cap stocks with good earnings momentum.

It seems like the baton of quantitative easing (QE) has now been passed on to Europe.The European Central Bank (ECB) President Mario Draghi unveiled plans for a massivebond-buying programme that would see the bank purchase €60 billion in bonds permonth. The monthly purchases are intended to be carried out from beginning of March toSeptember 2016 to avert the threat of deflation. We view it positively for the equity marketas the QE increases the money supply to support lending and increase liquidity in thefinancial system. Nevertheless, we believe it may take some time before the stimulusmeasure start filtering into the real economy.

Apart from Europe, China has been aggressively cutting interest rates to spur economicgrowth and boost employment opportunities. On the 27th of June, the People’s Bank ofChina has cut the one-year lending rate by 25 basis points to 4.85%, which was the fourthrate cut since November 2014. In addition to cutting interest rates, the People’s Bank ofChina also cut its one-year deposit rate by 25 basis points to 2.0%. The reduction ininterest rate highlighted the concern that the slowdown in economic growth was fasterthan desired and China is committed to monetary easing policies. Although there aresigns that China is facing an economic slowdown, we believe China would be able toavoid a hard landing. In fact, China’s projected GDP growth of 7% for the year 2015 is stillone of the highest in the world.


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We believe policymakers around the world would continue to use fiscal and monetarypolicies to ensure that the global economic recovery would remain largely intact. We viewthat the economies in the Asia ex-Japan region would remain resilient backed by solidfundamentals. In addition, we believe the liquidity conditions remain positive and the USFederal Reserve remains committed to keep interest rates at exceptionally low levels.Assuming a hike in US interest rates, we believe it would be done on a gradual basis toprevent disrupting the US economic recovery. As inflation in the US has been persistentlyrunning below 2%, we believe there is still enough room for the US Federal Reserve tomaintain an ultra-low interest rate environment.

Although the challenging economic outlook may keep some investors on the sidelines, weremain invested in fundamentally strong companies with good upside potential. Apartfrom that, we would take profit on selective stocks which have rallied beyond itsfundamentals. As we do not believe in fully invested at all times, we may seek to trim ourequities exposure whenever we believe stocks are near fully valued relative to itsfundamentals.

3.6 Policy On Rebates And Soft Commission

It is our policy to pay all rebates from stockbrokers to the respective Funds. However, softcommissions from stockbrokers (if any) will be retained by the Manager only if the goodsand services are demonstrable benefit to the unit holders such as research materials, dataquotation services and computer software incidental to the management of the Funds.

During the period, the Manager has not received any soft commissions fromstockbrokers.


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41Your Need

is our Focus

21 August 2015


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42Your Need

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STATEMENT BY MANAGER TO THE UNITHOLDERS OFPHEIM EMERGING COMPANIES BALANCED FUND

In the opinion of the Manager, the accompanying unaudited financial statements ofPheim Emerging Companies Balanced Fund are drawn up in accordance with MalaysianFinancial Reporting Standards, International Financial Reporting Standards and theSecurities Commission's Guidelines on Unit Trust Funds in Malaysia so as to give a trueand fair view of the unaudited financial position of Pheim Emerging CompaniesBalanced Fund as at 30 June 2015 and of its results, changes in net assets value and cashflows for the period then ended.

For and on behalf of the Manager,PHEIM UNIT TRUSTS BERHAD

AZMI MALEK MERICANDirector

HOI WENG KONGDirector

Kuala Lumpur, Malaysia21 AUG 2015

PECBF

PHEIM EMERGING COMPANIES BALANCED FUND

STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

FOR THE PERIOD ENDED 30 JUNE 2015

Note 30.06.2015 30.06.2014

RM RM

INVESTMENT INCOME

Gross dividend income 158,219 158,287

Interest Income

- loans and receivables 128,397 79,706

- available for sale ("AFS") 108,346 45,683

Net gain on financial assets at fair value through

profit and loss ("FVTPL") 8 568,430 442,280

Accretion of discounts, net of amortisation of premiums 9 (1,543) 16,796

on AFS financial assets

Net realised loss on foreign exchange (493) (631)

961,356 742,120

EXPENSES

Manager's fee 4 213,353 141,070

Trustee's fee 5 11,464 8,926

Auditor's remuneration 4,057 4,296

Tax agent's fee 1,235 1,236

Administrative expenses 13,876 5,584

243,985 161,111

Net income before tax 717,371 581,009

Income tax expenses 6 - -Net income after tax 717,371 581,009

Other comprehensive income

Net change in fair value of AFS financial assets 13,712 (3,763)

Total comprehensive income for the period 731,083 577,246

Net income for the period is made up as follows:

Net realised income 1,055,541 647,034

Net unrealised loss (338,170) (66,025)717,371 581,009

Distribution for the year:

Net distribution 12 1,717,483 1,004,288

Net distribution per unit (sen) 12 6.75 6.5

Gross distribution per unit (sen) 12 6.75 6.5

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

43

PECBF


STATEMENT OF FINANCIAL POSITION (UNAUDITED) AS AT 30 JUNE 2015

Note 30.06.2015 30.06.2014

RM RM

ASSETS

Investment 7 20,186,862 13,465,334

Deposits with licensed financial institutions 10 10,484,914 5,715,409

Amount due from brokers 127,117 -

Other receivables 117,361 85,010

Tax recoverable 3,640 21,771

Cash at bank 178,065 73,023

TOTAL ASSETS 31,097,959 19,360,548

LIABILITIES

Amount due to Manager 11 46,540 24,675

Amount due to Trustee 2,427 1,529

Other payables and accruals 8,738 8,440

TOTAL LIABILITIES 57,705 34,644

UNITHOLDERS' EQUITY

Unitholders' capital 22,466,213 10,065,271

Retained earnings 8,566,625 9,268,267

Available for sale reserve 7,416 (7,635)

TOTAL EQUITY 13 31,040,254 19,325,903

TOTAL EQUITY AND LIABILITIES 31,097,959 19,360,547

UNITS IN CIRCULATION 13 (a) 26,572,597 16,351,839

NET ASSET VALUE ("NAV") PER UNIT 14 1.1681 1.1819


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STATEMENT OF CHANGES IN EQUITY (UNAUDITED)



Unitholders' Retained AFS Total

Capital earnings reserves Equity

Note 13(a) Note 13(b) Note 13(d)

and (c )

RM RM RM RM

At 1 January 2014 8,809,460 9,691,547 (3,872) 18,497,135

Total comprehensive income for

the period - 581,008 (3,763) 577,245

Creation of units 933,229 - - 933,229

Cancellation of units (1,169,686) - - (1,169,686)

Distribution equalisation (190,699) - (190,699)

Distribution for the period (858,410) (858,410)Balance at 30 June 2014 8,382,304 9,414,145 (7,635) 17,788,814

At 1 January 2015 11,267,447 9,566,737 (6,296) 20,827,888

Effects of adopting FRS 139 - - -

11,267,447 9,566,737 (6,296) 20,827,888


the period - 717,371 13,712 731,083

Creation of units 10,516,438 - - 10,516,438

Cancellations of units (901,834) - - (901,834)

Distribution equalisation 1,584,162 - - 1,584,162

Distribution for the period - (1,717,483) - (1,717,483)Balance at 30 June 2015 22,466,213 8,566,625 7,416 31,040,254

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STATEMENT OF CASH FLOWS (UNAUDITED)


01.01.2015 01.01.2014

to to

30.06.2015 30.06.2014

RM RM

CASH FLOWS FROM OPERATING AND

INVESTING ACTIVITIES

Proceeds from sale of investments 6,402,891 5,795,169

Purchase of investments (12,275,803) (6,422,177)

Dividends received 96,854 146,160

Interest received from deposits with licensed

financial institutions and other debt securities 235,544 143,365

Proceeds received from bonds on maturity - 1,700,000

Management fee paid (198,092) (140,919)

Trustee's fee paid (10,665) (8,975)

Payment for other fees and expenses (26,430) (18,794)

Income distribution paid (21,600) (20,800)

Net cash (used in)/generated from operating and investing activities (5,797,301) 1,173,029

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from creation of units 10,546,054 856,743

Payment for cancellation of units (1,043,981) (609,393)

Net cash generated from financing activities 9,502,073 247,350

NET INCREASE IN CASH

AND CASH EQUIVALENTS 3,704,772 1,420,379

CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR 6,958,207 4,368,053

CASH AND CASH EQUIVALENTS AT THE END OFTHE PERIOD 10,662,979 5,788,432

Cash and cash equivalents comprise the following:

Deposits with licensed financial institutions (Note 10) 10,484,914 5,715,409

Cash at bank 178,065 73,02310,662,979 5,788,432


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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)FOR THE PERIOD ENDED 30 JUNE 2015

1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES

2. BASIS OF PREPARATION

2.1 Statement of Compliance

2.2 Basis of Measurement

The unaudited financial statements of the Fund have been prepared in accordance with Malaysian FinancialReporting Standards ("MFRSs"), International Financial Reporting Standards ("IFRSs") and the SecuritesCommission's Guidelines on Unit Trust Funds in Malaysia.

Pheim Emerging Companies Balanced Fund ("the Fund") was established pursuant to a Master Deed dated 11January 2002 as amended modified and supplemented by a Supplemental Master Deed dated 3 November 2008made between HSBC Trustee (Malaysia) Berhad and Pheim Unit Trusts Berhad ("the Manager"), a secondSupplemental Master Deed dated 29 April 2013 and Third Supplemental Master Deed dated 30 April 2015 madebetween the Manager and Maybank Trustees Berhad ("the Trustee").

The principal activity of the Fund is to invest in "Permitted Investments" as defined under Part 7 of the MasterDeed, which includes investments in equities and fixed income securities traded on Bursa Malaysia or any othermarkets considered as Eligible Market. The Fund commenced operations on 28 January 2002 and will continue itsoperations until terminated by the Trustee as provided under Part 12 of the Master Deed.

The Manager is a public limited company incorporated in Malaysia. It is a wholly owned subsidiary of the PheimAsset Management Sdn Bhd, a private company incorporated in Malaysia. Its principal activity is the managementof unit trust funds. Pheim Asset Management Sdn. Bhd. has been appointed by the Manager as the ExternalInvestment Manager of the Fund with responsibility for the provision of investment management services to theFund.

The principal place of business of the Fund is located at 7th Floor, Menara Hap Seng, Jalan P.Ramlee, 50250 KualaLumpur.

The unaudited financial statements are presented in Ringgit Malaysia (RM).

The unaudited financial statements were authorised for issue by the Board of Directors of the Manager in

The unaudited financial statements of the Fund have been prepared under the historical cost convention unlessotherwise indicated in this summary of significant accounting policies.

The accounting policies applied by the Fund is consistent with those applied in the previuos year other thanthe application of the new and revised MFRSs, Issues Committee ("IC") Interpretations and amendments toMFRSs and IC Interpretations as disclosed in Note 2.3 below.

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2. BASIS OF PREPARATION (CONT'D.)

2.3 Application of Amendments to MFRSs and IC Interpretations

(a) Amendments to MFRS 132 - Offsetting Financial Assets and Financial Liabilities

(b) Amendments to MFRS 139 - Novation of Derivatives abd Continuation of Hedge Accounting

2.4 New MFRSs and Amendments to MFRSs That Are In Issue But Not Yet Effective

Effective for annual periods beginning on or after 1 July 2014

Amendments to MFRS 119, Defined Benefit Plans: Employee ContributionsAmendments to MFRSs Classified as "Annual Improvements to MFRSs 2010-2012 Cycle"Amendments to MFRSs Classified as "Annual Improvements to MFRSs 2011-2013 Cycle"

During the period, the Fund has applied the following amendments to MFRSs issued by the MalaysianAccounting Standards Board ("MASB") which are effective for accounting period beginning on or after 1January 2014 :-

Amendments to MFRS 132 - Offsetting Financial Assets and Financial Liabilities

Amendments to MFRS 139 - Novation of Derivatives and Continuation of Hedge Accounting

The Fund had not early adopted the following new MFRSs and amendments to MFRSsthat have been issuedby the MASB but are not yet effective :-

The Amendments clarify the requirements relating to the offset of financial assets and financialliabilities. Specifically, the Amendments clarify the meaning of 'currently has a legally enforceable rightof set-off' and 'simultaneous realisation and settlement'.

The Amendments have been applied retrospectively and the application has no impact on thedisclosures or the amounts recognised in the Fund's financial statements.

The Amendments introduce a narrow-scope exception to the requirement for the discontinuation ofhedge accounting in MFRS 139, Financial Instruments : Recognition and Measurement. Specifically,the Amendments provide relief from discontinuing hedge accounting when a novation of a derivative asa hedging instrument meets certain criteria.


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2.4 New MFRSs and Amendments to MFRSs That Are In Issue But Not Yet Effective (Cont'd)

Effective for annual periods beginning on or after 1 January 2016

MFRS 14, Regulatory Deferral AccountsAmendments to MFRS 10, MFRS 12 and MFRS 128 - Investment Entities: Applying the Consideration ExceptionAmendments to MFRS 10 and MFRS 128 - Sale or Contribution of Assets between an Investor and its Associate

or Joint VentureAmendments to MFRS 11 - Accounting for Acquisitions of Interests in Joint OperationsAmendments to MFRS 101 - Disclosure InitiativeAmendments to MFRS 116 and MFRS 138 - Clarification of Acceptable Methods of Depreciation and

AmortisationAmendments to MFRS 116 and MFRS 141 - Agriculture : Bearer PlantsAmendments to MFRS 127 - Equity Method in Separate Financial StatementsAmendments to MFRSs Classified as "Annual Improvements to MFRSs 2012 - 2014 Cycle"


MFRS 15 - Revenue from Contracts with Customers


MFRS 9 - Financial Instruments (IFRS 9 issued in July 2014)

MFRS 9, Financial Instruments (IFRS 9 issued in July 2014)

The Fund will apply the above new MFRSs and amendments to MFRSs that are applicable once they becomeeffective. The main features of the new applicable standards and amendments to standrds are summarisedbelow:-

The Standard replaces earlier versions of MFRS 9 and introduces a pcakage of improvements which includesa classification and measurement model, a single forward-looking 'expected loss' impairment model and asubstantially-reformed approach to hedge accounting.

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MFRS 9, Financial Instruments (IFRS 9 issued in July 2014) (Cont'd)

The key enhancements of MFRS 9 are :

• Under MFRS 9, all recognised financial assets are required to be subsequently measured at either amortisedcost, fair value through other comprehensive income ("FVTOCI") or fair value through profit or loss("FVTPL") on the basis of both an entity's business model for managing the financial assets and thecontractual cash flow characteristics fo the financial assets. These requirements improve and simplify theapproach for classification and measurement of financial assets as the numerous categories of financial assetsunder MFRS 139 had been replaced.

The initial application of MFRS 9 in the future may have an impact on the financial statements of the Fund.However, it is not practicable to provide a reasonbale estimate of the effect until a detailed review has beencompleted. The initial application of other new MFRSs and amendments to MFRSs is not expected to haveany significant impact on the financial statements of teh Fund.

• Most of the requirements in MFRS 139 for classification and measurment of financial liabilities werecarried forward unchanged to MFRS 9, except fro the measurement of financial liabilities designated as atFVTPL. Under MFRS 139, the entire amount of the change in the fair value of the financial liabilitydesignated as FVTPL is presented in profit or loss. However, MFRS 9 requires that the amount of change inthe fair value of the financial liability that is attributable to changes in the credit risk of that liability ispresented in other comprehensive income, unless the recognition of the effects of changes in the liability'sown credit risk in other comprehensive incoem would create or enlarge an accounting mismatch in profit orloss. Changes in fair value attributable to a financial liability's credit risk are not subsequently reclassified toprofit or loss.

• In relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model, asopposed to an incurred credit loss model under MFRS 139. Under MFRS 9, it is no longer necessary for acredit event to have occured before credit losses are recognised. Instead, an entity always accounts forexpected credit losses and changes in those expected credit losses at each reporting date to reflect changes incredit risk since initial recognition.

• The new general hedge accounting requirements retain the three types of hedge accounting mechanismscurrently available in MFRS 139 i.e. fair value hedges, cash flow hedges and hedges of a net investment in aforeign operation. MFRS 9 incorporates a new hedge accounting model that aligns the hedge accountingmore closely with an entity's risk management activities. The new badge accoutning model has also expandedthe scope of eligibility of hedge items and hedging instruments respectively.

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Financial Assets

(a) Financial assets at fair value through profit of loss ("FVTPL")

(b) Available-for-sale ("AFS") financial assets

Financial assets are classified as financial assets at FVTPL if they are held for trading or are designatedas such upon initial recognition. Financial assets held for trading include securities and fixed incomesecurities and collective investments scheme acquired principally for the purpose of selling them innear term.Subsequent to initial recognition, financial assets at the FVTPL are measured at fair value at the date ofstatement of financial position. Changes in the fair value of those financial instruments are recorded in"Net gain or loss on financial assets at FVTPL". Interest earned and dividend revenue elements of suchinstruments are recorded separately in "Interest income" and "Gross dividend income", respectively.Foreign exchange differences on financial assets at FVTPL are not recognised separately in profit andloss but included in net gains or net losses on changes in fair value of financial assets at FVTPL.

AFS financial assets are financial assets that are designated as available for sale or are not classified asfinancial assets at FVTPL or loans and receivables.

After initial recognition, AFS financial assets are measured at fair value. Gains or losses from changesin fair value of the AFS financial assets are recognised in other comprehensive income, except thatimpairment losses, foreign exchange gains and losses on monetary instruments, dividend income andinterest calculated using effective interest method are recognised in profit or loss.

The cumulative gains or loss previously recognised in other comprehensive income is reclassified fromequity to profit or loss as a reclassification adjustment when the financial assets is derecognised.Interest income calculated using the effective interest method is recognised in profit or loss. Dividendson an AFS equity instrument are recognised in profit or loss when the Fund's right to receive paymentis established.

Fair value is the amount for which an asset could be exchanged, or liability settled, betweenknowledgeable, willing parties in an arm's length transaction. The fair value for financial instrumentstraded in active markets at the reporting date is based on their quoted prices or binding dealer pricequotations, without deduction for transaction costs.

A financial assets is derecognised where the asset is disposed and the contractual right to receive cashflow from the asset has expired. On derecognition of a financial assets in its entirety, the differencebetween the carrying amount and the sum of the consideration received and any cumulative gain or lossthat had been recognised in other comprehensive income is recognised in profit or loss.

Financial assets are recognised in the statement of financial position when, and only when, the Fund becomesa party to the contractual provisions of the financial instruments. Regular way of purchase and sale ofinvestments in financial instruments are recognised on trade dates. When financial assets are recognisedinitially, they are measured at fair value, plus attributable transaction cost, for investment not at fair valuethrough profit or loss.

The Fund determines the classification of its financial assets at the initial recognition, and the categoriesinclude financial assets at fair value through profit or loss, available-for-sale financial assets and loans andreceivables.

The accounting policies set out below have been applied consistently to the periods, presented in these financialstatements and have been applied consistently by the Fund, unless otherwise stated.

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

3.1 Financial Assets (Contd.)

(b) Available-for-sale ("AFS") financial assets (Contd.)

(c) Loan and receivables

3.2 Impairment of Financial Assets

(a) AFS financial assets

Financial assets with fixed or determinable payments that are not quoted in an active market areclassified as loans and receivables. The Fund includes short term receivables such as balances duefrom broker, Manager and other receivables in the classification. Loans and receivables are recognisedinitially at fair value including transaction costs.

Subsequent to initial recognition, receivables are measured at amortised cost using effective interestmethod. Gains and losses are recognised in profit or loss when the loans and receivables arederecognised or impaired, and through the amortisation process.

Significant or prolonged decline in fair value below cost, weaken fundamental, significant financialdifficulties of the issuer or obligor, and the disappearance of an active trading market areconsiderations to determine whether there is objective evidence that investment securities classified asAFS financial assets are impaired. At end of each financial year, the Manager would receiveimpairment proposal from the Fund's external investment manager, if any financial assets of the Fund,in their professional opinion, warrant an impairment exercise.

If an AFS financial assets is impaired, an amount comprising the differences between its cost (net ofany principal payment and amortisation) and its current fair value, less any impairment loss previouslyrecognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on AFS equity investments are not reversed in profit or loss in the subsequentperiods. Increase in fair value, if any, subsequent to impairment loss is recognised in othercomprehensive income. For AFS debt investments, impairment losses are subsequently reversed inprofit or loss, up to the amount previously recognised as impairment loss, if an increase in the fairvalue of the investment can be objectively related to an event occuring after the recognition of theimpairment loss in profit or loss.

The Fund assesses at each reporting date whether there is any objective evidence that a financial asset isimpaired.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assetswithin the period generally established by regulation or convention in the marketplace concerned. Allregular way purchases and sales of financial assets are recognised or derecognised on trade date,i.e. thedate that the fund commit to purchase or sell the asset.

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3.2 Impairment of Financial Assets (Contd.)

(b) Trade and other receivables and other financial assets carried at amortised cost

3.3 Classification of Realised and Unrealised Gain and Losses

3.4 Financial Liabilities

Unrealised gain and losses comprise changes in fair value of financial instruments for the period fromreversal of prior period's unrealised gain and losses for financial instruments which were realised (i.e. sold,redeemed or matured) during the reporting period.

Realised gains and losses on disposals of financial instruments classified as part of "at fair value throughprofit or loss" are calculated using weighted average method. They represent the difference between aninstrument's initial carrying amount and disposal amount, or cash payment or receipts made of derivativecontracts (excluding payments or receipts on collateral margin accounts for such investments).

Financial liabilities are classified according to the substance of the contractual arrangements entered into andthe definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial positionwhen, and only when, the Fund become a party to the contractual provisions of the financial instrument.Financial liabilities are classified as other financial liabilities.

The Fund's financial liabilities which include amount due to broker, Manager and other payables arerecognised initially at fair value plus directly attributable transaction costs and subsequently measured at theamortised cost using effective interest method.

A financial liability is derecognised when the obligation under the liability is extinguished. Gains and lossesare recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

To determine whether there is objective evidence that an impairment loss on financial assets has beenincurred, the Fund considers factors such as the probability of insolvency or significant financialdifficulties of the debtor and default or significant delay in payments.

If any such evidence exists, the amount of impairment loss is measured as the difference between theassets's carrying amount and the present value of estimated future cash flows discounted at the financialasset's original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financialassets with the exception of trade receivables, where the amount is reduced through the use of anallowance account. When a trade receivable becomes uncollectible, it is written off against allowanceaccount.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be relatedobjectively to an event occurring after the impairment was recognised, the previously recognisedimpairment loss is reversed to the extent that the carrying amount of the asset does not exceed itsamortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

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3.5 Foreign Currencies

3.6 Unitholders' Capital

3.7 Income Distribution

3.8 Cash and Cash Equivalents

3.9 Income Recognition

Cash and cash equivalents comprise cash at bank and deposits with financial institutions which haveinsignificant risk of changes in value.

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

Dividend income is recognised when the Fund's right to receive payment is established.

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

The financial statements of the Fund are measured using the currency of the primary economic environmentin which the Fund operates ("the functional currency"). The financial statements are presented in RinggitMalaysia (RM), which is also the Fund's functional currency.

In preparing the financial statements, transactions in curriencies other than the Fund's functional currency(foreign curriencies) are recorded in the functional currency using teh exchange rates prevailing at the datesof the transactions. At the end of each reporting period, foreign currency monetary assets and liabilities aretranslated at exchange rates prevailing at the end of the reporting period. Non-monetary items that aremeasured at fair value in a foreign currency are translated using exchanges rates at the date when the fairvalue was determined.

Exchnages differences arising from the settlement of foreign currency transactions and from the translation offoreign currency monetary assets and liabilities are recognised in profit or loss.

Exchange differences arising from teh translation of non-monetary items caaried at fair value are included inprofit or loss for the period except for the differences arising on the translation of non-monetary items inrespect of which gains or losses are recognised directly in equity. Exchange differences arising from suchnon-monetary items are recognised directly to equity.

The unitholders' contributions to the Fund meet the definition of puttable instruments classified as equityinstruments under the revised MFRS 132.

Distribution equalisation represents the average distributable amount included in the creation and cancellationprices of units. This amount is either refunded to Unitholders by way of distribution and/or adjustedaccordingly when units are cancelled.

Income distributions are at the discretion of the Manager. Income distribution to the Fund's unitholders isaccounted for as a deduction from realised reserves except where distribution is sourced out of distributionequalisation which is accounted for as deduction from Unitholders' capital.

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3.10 Income Tax

3.11 Segment Reporting

3.12 Significant Accounting Estimates and Judgements

4. MANAGER'S FEE

5. TRUSTEE' S FEE

The Trustee is entitled to a fee of 0.07% per annum based on NAV of the Fund (before deducting the manager'sand trustee's fee for the day) calculated and accrued on a daily basis, subject to a minimum of RM18,000 p.a.

The Manager is entitled to an annual management fee of 1.50% per annum of the NAV of the Fund (beforededucting manager's and trustee's fees for the day) calculated and accrued on a daily basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxauthorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantivelyenacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognisedoutside profit or loss, either in other comprehensive income or directly in equity.

No deffered tax is recognised as there are no material temporary differences.

For management purposes, the Fund is managed by 2 main portfolios, namely (1) equity securities and (2)fixed income instruments. Each segment engages in separate business activities and the operating results areregularly reviewed by the Manager, External Investment Manager and the fund's Investment Committee. TheExternal Investment Manager and the Fund Investment Commitee jointly assumes the role of chief operationdecision maker, for performance assessment purposes and to make decision about resources allocated to eachinvestment segment.

The preparation of financial statements in accordance with MFRS and IFRS requires the use of certainaccounting estimates and exercise of judgements. Estimates and judgements are continually evaluated and arebased on past experience, reasonable expectations of future events and othe factors.

No major judgements have been made by the Manager in applying the Fund's accounting policies. There areno key assumptions concerning the future and other key sources of estimation uncertainty at the reportingdate, that have significant risk of causing material adjustment to the carrying amounts of assets and liabilitieswithin next year.

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6. TAXATION

30.06.2015 30.06.2014RM RM

Current year Malaysian tax - -Under provision in prior years - -Malaysian tax expense based on result for the year - -

30.06.2015 30.06.2014RM RM

Net income before taxation 717,371 581,009

Taxation at Malaysian statutory rate of 25% 179,343 145,252(2014: 25%)

Tax effects of:Losses/(Income) not subject to tax (240,339) (185,530)Expenses not deductible for tax purposes 6,644 3,936Restriction on tax deductible expenses for unit trustfunds 54,352 36,342

Tax expense for the financial period - -

7. INVESTMENTS

Financial assets at fair value through profit or loss 30.06.2015 30.06.2014(Note 8) RM RMQuoted equities- in Malaysia 7,125,311 5,661,372- outside Malaysia 7,353,231 5,107,582

14,478,542 10,768,954Available-for-sale financial assets (Note 9)- Unquoted fixed income securities

in Malaysia 5,708,320 2,696,380

Total investments 20,186,862 13,465,334

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

Income tax is calculated at Malaysian statutory tax rate 25% (2014 : 25%) of the estimated assessable income forthe period.

The tax charge for the period is in relation to the taxable income earned by the Fund after deducting allowableexpenses. In accordance with Schedule 6 of Income Tax Act 1967, interest income earned by the Fund is exemptedfrom tax.

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8. FINANCIAL ASSETS AT FVTPL

30.06.2015 30.06.2014RM RM

Financial assets at FVTPL :Quoted equities 14,478,542 10,768,954

Net gain on financial assets at FVTPL comprised:Realised gain on disposals 906,600 508,305Unrealised loss changes in fair values (338,170) (66,025)

568,430 442,280

The currency exposure profile of financial assets atFVTPL is as follows:

- Ringgit Malaysia 7,125,311 5,661,372- Hong Kong Dollar 4,087,045 1,716,528- Indonesian Rupiah 1,029,060 898,766- Singapore Dollar 846,389 639,025- Thai Baht 832,709 333,371- South Korea Won 294,584 549,292- Phillipines Peso 263,444 970,600

14,478,543 10,768,954

Financial assets at FVTPL as at 30 June 2015 are as detailed below:

Name of Counter

QUOTED EQUITIES- IN MALAYSIA

Main Market Quantity Cost Fair value % ofRM RM NAV

ConstructionHo Hup Construction Co. Bhd 145,000 178,984 172,550 0.56Muhibbah Engineering (M) Bhd 56,500 115,059 127,690 0.41

201,500 294,043 300,240 0.97

ConsumerPadini Holdings Bhd 100,000 198,553 132,000 0.43Sasbadi Holdings Bhd 302,000 584,093 709,700 2.29Tek Seng Holdings Bhd 499,340 293,209 257,160 0.83

901,340 1,075,855 1,098,860 3.55

Industrial ProductsCan-One Bhd 158,600 487,463 398,086 1.50Evergreen Fibreboard Bhd 696,000 687,471 932,640 3.00Jaya Tiasa Holdings Bhd 144,000 318,856 217,440 0.70Kian Joo Can Factory Bhd 55,000 145,737 173,250 0.56Malaysia Steel Works KL Bhd 40,000 40,914 24,800 0.08Scientex Bhd 6,000 32,010 41,100 0.13Supermax Corp Bhd 186,000 392,020 385,020 1.24TA Ann Holdings Bhd 75,000 348,952 285,000 0.92Top Glove Corp Bhd 21,000 115,240 139,440 0.45

1,381,600 2,568,663 2,596,776 8.58

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8. FINANCIAL ASSETS AT FVTPL (CONTD.)

Name of Counter Quantity Cost Fair value % ofRM RM NAV

QUOTED EQUITIES- IN MALAYSIA (CONTD.)

PropertiesHua Yang Bhd 47,000 105,598 89,770 0.29Land & General Bhd 404,000 236,962 173,720 0.56Matrix Concepts Holdings Bhd 209,500 357,332 649,450 2.09Metro Kajang Holdings Bhd 90,400 311,940 192,552 0.62Sentoria Group Bhd 283,000 331,589 291,490 0.94Tambun Indah Land Bhd 61,000 110,184 101,260 0.33

1,094,900 1,453,605 1,498,242 4.83

PlantationsHap Seng Plantations Holdings Bhd 17,000 47,596 41,650 0.13Sarawak Oil Palms Bhd 30,000 168,560 139,800 0.45TH Plantation Bhd 168,000 351,022 262,080 0.84

215,000 567,178 443,530 1.42

TechnologyInari Amertron Bhd 38,000 130,179 123,500 0.40Malaysia Pacific Industries 45,000 173,270 296,100 0.95Unisem (M) Bhd 27,000 56,121 62,640 0.20

110,000 359,570 482,240 1.55

Trading/ServicesBerjaya Auto Bhd 44,100 104,485 118,188 0.38Fitters Diversified Bhd 717,000 479,002 397,935 1.28Tenaga Nasional Bhd 15,000 218,309 189,300 0.61

776,100 801,796 705,423 2.27

TOTAL QUOTEDEQUITIES- IN MALAYSIA 4,680,440 7,120,710 7,125,311 23.17

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Name of Counter Quantity Cost Fair value % of

RM RM NAV

QUOTED EQUITIES- OUTSIDE MALAYSIA

Hong Kong Stock Exchange("HKSE")

AAC Technologies Holdings Inc 3,000 64,751 63,776 0.21Agricultural Bank of China-H 313,000 653,705 636,468 2.05Consun Pharmaceutical Group 116,000 299,619 311,497 1.00Central China Real Estate 32,000 36,225 34,092 0.11China Citic Bank 180,000 572,681 541,149 1.74China Gas Holdings Ltd 12,000 71,232 72,387 0.23China Huishan Dairy Holdings Co.Ltd 232,000 238,911 198,635 0.64China Oversea Grand Ocean Group 108,000 214,589 205,952 0.66Hua Han Bio-Pharmaceutical-H 718,000 569,525 502,971 1.62Ind & Comm Bank of China 80,000 254,333 239,343 0.77Red Star Macaline Group Corp Ltd 40,000 260,063 247,127 0.80Sinomax Group Ltd 65,000 32,846 34,783 0.11Termbray Petro King Oilfield 201,428 309,863 103,868 0.33Tongda Group Holdings Ltd 180,000 80,303 130,471 0.42Xinyi Glass Holdings Ltd 196,000 460,477 392,834 1.27Xinchen China Power Holdings 253,000 403,639 371,692 1.20

2,729,428 4,522,762 4,087,045 13.16

Jakarta Stock Exchange("JSX") Quantity Cost Fair value % of

RM RM NAVBekasi Fajar Industrial Estate 3,140,000 476,897 354,946 1.14Charoen Pokphand Indonesi PT 180,000 208,275 139,887 0.45Hexindo Adiperkasa TBK PT 259,000 382,688 193,963 0.62Metropolitan Land TBk 1,000,000 118,367 110,779 0.36PP Property TBK PT 750,000 40,500 39,635 0.13Tempo Scan Pacific TBK PT 260,000 212,240 143,278 0.46Tunas Baru Lampung TBK PT 320,000 53,752 46,572 0.15

5,909,000 1,492,719 1,029,060 3.31

Korea Stock Exchange("KE")

Hana Financial Group 3,000 310,199 294,584 0.95

Philippines Stock Exchange("PSE")

House Holdings Inc 160,000 88,406 94,947 0.31San Miguel Pure Foods Co. 12,000 262,256 168,497 0.54

172,000 350,662 263,444 0.85

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QUOTED EQUITIES- OUTSIDE MALAYSIA (CONTD.)

Stock Exchange Thailand("SET")

Amata Corporation Public Co. Ltd 116,000 215,231 193,958 0.62Malee Sampran Public Co-NVDR 33,000 119,488 117,712 0.38Sino Thai Engineering &

Construction-NVDR 40,000 113,296 103,444 0.33Total Access Communication-NVDR 45,000 463,248 417,595 1.35

234,000 911,263 832,709 2.68

Singapore Stock Exchange("SGX")

Centurion Corp Ltd 76,000 112,577 111,821 0.36Midas Holdings Ltd 137,000 176,755 122,862 0.40Indofood Agri Resources Limited 136,000 546,939 264,894 0.85Sbi Offshore Ltd 550,000 177,375 346,812 1.12

899,000 1,013,646 846,389 2.73

TOTAL QUOTEDEQUITIES- OUTSIDE MALAYSIA 9,946,428 8,601,251 7,353,231 23.68

TOTAL QUOTED EQUITIES

TOTAL FINANCIAL ASSETSAT FVTPL 15,721,961 14,478,542 46.85

EXCESS OF FAIR VALUEOVER COST 15,721,961 14,478,542 46.85

(1,243,419)

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9. AFS FINANCIAL ASSETS30.06.2015 30.06.2014

RM RM

Unquoted fixed income securities 5,708,320 2,696,380

Accretion of discounts, net ofamortisation of premiums on AFS financial assets (1,543) (2,748)

Unrealised gain/(loss) on changes in fair values 7,416 (7,635)

AFS financial assets as at 30 June 2015 are as detailed below:-

Name of Counter Nominal Cost * Fair value % ofAmount RM RM NAV

UNQUOTED FIXED INCOME SECURITIES

SME Bank IMTN -3/17Malaysian Government Securities 1,000,000 1,000,000 999,500 3.22

- 10/15 1,700,000 1,700,904 1,701,020 5.48SABAH 4.275%- 12/2019 3,000,000 3,000,000 3,007,800 9.69

5,700,000 5,700,904 5,708,320 18.39EXCESS OF FAIR VALUEOVER COST 7,416

* Cost of fixed income securities include accretion of discount and/or amortisation of premium.

10. DEPOSITS WITH LICENSED FINANCIAL INSTITUTIONS

30.06.2015 30.06.2014RM RM

Licensed investment bank 10,484,914 5,715,409

Averageremaining

WAEIR maturities30.06.2015 30.06.2014 30.06.2015 30.06.2014

% % Days Days

Licensed investment bank 3.21 3.19 7 5

The weighted average effective interest rate ("WAEIR") per annum and the average remaining maturities ofdeposits and placement are as follows:

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11. AMOUNT DUE TO MANAGER

30.06.2015 30.06.2014RM RM

Amount arising from release of units 2,830 -Management fee 43,710 -

46,540 -

12. INCOME DISTRIBUTION

Distribution declared and paid on 29 April 2015 was 6.50 sen net per unit.Distribution to unitholders are from the following sources:

2015 2014RM RM

Dividend income 10,928 18,973Interest income 26,057 22,991Net realised gain from sale of investment 583,715 130,266Net amortization of premium on corporate bond - (643)Other Income - -

620,700 171,587Less:Expenses 31,577 30,888Taxation - -Previous year's realised gain 589,123 140,699Distribution out of realised reserves 1,128,360 863,589Distribution for the period 1,717,483 1,004,288

Units in circulation at book closing date 25,444,189 15,450,593Gross distribution per units (sen) 6.75 6.50Net distribution per unit (sen) 6.75 6.50Date of distribution 27.03.2015 29.04.2014

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13. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS

Note 30.06.2015 30.06.2014RM RM

Unitholders' capital (a) 22,466,213 10,065,271Retained earnings- Realised (b) 10,206,894 9,455,258- Unrealised (c) (1,640,269) (186,991)

8,566,625 9,268,267AFS reserve (d) 7,416 (7,635)Total equity / Net asset value 31,040,254 19,325,903

(a)01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014

Number Numberof units RM of units RM

Balance at beginningof the yearUnitholders' Capital 17,347,920 11,267,447 15,334,865 8,809,460Add: Creation of units 10,097,569 10,516,438 1,521,382 1,726,420Less: Cancellation of units (872,892) (901,834) (504,408) (511,915)Distribution equalisation - 1,584,162 - 41,306Balance at end of the period 26,572,597 22,466,213 16,351,839 10,065,271

In accordance with Article 6.1.1 of the Deed and Securities Commission's approval letter dated 14 August 2006, themaximum number of units that can be issued for circulation is 100,000,000 units. As at 30 June 2015, the numbernot yet issued is 73,427,403 units (30 June 2014: 83,648,161).

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13. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS (CONTD.)

(b) Realised - Distributable30.06.2015 30.06.2014

RM RM

Balance at the beginning of period 10,868,343 9,811,882Net income after tax 717,371 581,008Net unrealised loss attributable toinvestments held transferred tounrealised reserve 338,170 66,025

Net unrealised foreign exchangeloss attributable to foreign currencymonetary items transferred to unrealisedreserve 493 631

Distribution out of realised reserve (1,717,483) (1,004,288)Balance at the end of period 10,206,894 9,455,258

(c) Unrealised - Non-distributable30.06.2015 30.06.2014

RM RM

Balance at the beginning of period (1,301,606) (120,335)Effects of adoption of FRS 139 - -

(1,301,606) (120,335)Net unrealised loss attributable toinvestment held transferred fromrealised reserve (338,170) (66,025)

Net unrealised foreign exchangeloss attributable to foreigncurrency monetary items transferred fromrealised reserve (493) (631)

Balance at the end of period (1,640,269) (186,991)

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14. NET ASSET VALUE PER UNIT

30 June 2015 30 June 2014RM RM/Unit RM RM/Unit

Net asset value attributableto unitholders forissuing/redeeming of units 31,114,975 1.1709 19,382,703 1.1854

Effect from adopting bidprices as fair value (74,721) (0.0028) (56,800) (0.0021)

Net asset value attributableto unitholders perfinancial statements 31,040,254 1.1681 19,325,903 1.1833

15. UNITS HELD BY RELATED PARTIES

30.06.2015 30.06.2014Number of Valued at Number of Valued at

units NAV units NAVRM RM

Directors of the Manager # 2,188,799 2,556,803 81,720 69,306

# The Directors of the Manager are the legal and beneficial owners of the units.

Net asset value attributable to unitholders is classified as equity in the statement of financial position.

Quoted financial assets have been valued at the bid prices at the close of business in accordance with the provisionof MFRS 139. For the purpose of calculation of net asset value attributable to unitholders per unit for the issuanceand redemption of units in accordance with the Deed, quoted financial assets are stated at the last done market price.

A reconciliation of net asset value attributable to unitholders for issuing/redeeming units as at 30 June 2013 and thenet assets value attributable to unitholders per the financial statements is as follows:-

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16. TRANSACTIONS WITH BROKERS

1 January 2015 to 30 June 2015% of Total

Value of % of Total Brokerage BrokerageTrade Trade Fees Fees

RM % RM %

MIDF Amanah Investment Bank Bhd 11,551,941 30.28 - -Affin Hwang Capital Investment Bank 6,342,009 16.62 1,464 2.98DBS Vickers Securities Ltd - HK 3,052,249 8.00 7,626 15.52CIMB-GK Securitites Ltd - HK 2,665,122 6.99 9,842 20.02KAF Investment Bank Bhd 2,200,000 5.77 - -RHB OSK Securities Hong Kong Ltd 1,680,113 4.40 2,652 5.40Oriental Patron Securities Linited - HK 1,680,036 4.40 4,206 8.56Kenanga Investment Bank Bhd 1,128,868 2.96 3,415 6.95Maybank Investment Bank Bhd 1,020,922 2.68 2,407 4.90CIMB Investment Bank Bhd 779,942 2.04 1,777 3.61Other brokers 6,048,937 15.86 15,759 32.06

38,150,139 100.00 49,148 100.00

17. MANAGEMENT EXPENSE RATIO ("MER")

30.06.2015 30.06.2014

Management expense ratio 0.88% 0.85%

18. PORTFOLIO TURNOVER RATIO ("PTR")

30.06.2015 30.06.2014

Portfolio turnover (times) 0.34 0.32

This is the ratio of the sum of fees ( inclusive of the manager's, trustee's audit and other proffessional fees) and otheradministrative expenses of the Fund to the average NAV of the Fund calculated on a daily basis. The average NAVof the Fund for the period ended 30 June 2015 was RM27,845,330 (30 June 2014: RM18,978,546)

Details of transactions with stockbroking companies and other investment banks for the period ended 30 June 2015are as follows:

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19. SEGMENT INFORMATION

The Manager and Investment Committee of the Fund are responsible for allocating resources available to the Fundin accordance with the overall investment strategies as set out in the investment Guidelines of the Fund. The Fund ismanaged by two segments:

● A portfolio of equity instruments● A portfolio of fixed income portfolio, including debt securities and deposits with financial institutions.

The investment objective of each segment is to achieve consistent returns from the investments in each segmentwhile safeguarding capital by investing in diversified portfolios. There have been no changes is reportable segmentsin the current financial period. The segment information provided is presented to the Manager and InvestmentCommittee of the Fund.

01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014Fixed Fixed

Equity Income Total Equity Income Total

Portfolio Portfolio Portfolio PortfolioRM RM RM RM RM RM

Gross dividend income 158,219 - 158,219 158,287 - 158,287

Interest Income - 236,743 236,743 - 125,389 125,389

Net (loss)/gain from

investments:

- financial assets at fair valuethrough profit and loss

("FVTPL") 568,430 - 568,430 442,280 - 442,280

- available for sale ("AFS") (1,543) (1,543) 16,796 - 16,796

- net amortisation of

discount/(premium) - - - - - -

- net unrealised loss on

foreign exchange (493) - (493) (631) - (631)

- net unrealised gain on

changes in value of

investments - - - - - -

Total segment operating (loss)/income for the period 724,612 236,743 961,356 616,731 125,389 742,120

Deposit with financial institutions 10,484,914 10,484,914 - 5,715,409 5,715,409Financial assets at FVTPL 14,478,542 - 14,478,542 10,768,954 - 10,768,954

AFS financial assets - 5,708,320 5,708,320 - 2,696,380 2,696,380Other assets 80,453 36,908 117,361 62,537 22,474 85,011

Total segment assets 14,558,995 16,230,142 30,789,137 10,831,491 2,718,854 19,265,755

Other liabilities - - - - - -Total segment liabilities - - - - - -

During the period, there were no transactions between operating segments.

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19. SEGMENT INFORMATION (CONTD.)

30.06.2015 30.06.2014RM RM

Net reportable segment operating income 961,356 742,120Expenses (243,985) (161,111)Net income before tax 717,371 581,009Income tax expense - -Net income after tax 717,371 581,009

30.06.2015 30.06.2014RM RM

Total segment assets 30,789,137 19,265,755Tax recoverable 3,640 21,771Amount due from Broker 127,117 -Cash at bank 178,065 73,023Total assets of the Fund 31,097,959 19,360,549

Total segment liabilities - -Other payables and accruals 8,738 8,440Amount due to Manager 46,540 24,675Amount due to Trustee 2,427 1,529Total liabilities of the Fund 57,705 34,644

22. FINANCIAL INSTRUMENTS

(a) Classification of financial instruments

Expenses of the Fund are not considered part of the performance of any operating segment. The following tableprovides a reconciliation between reportable segment income/(loss) and operating profits/(loss).

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at either fair value or atamortised cost based on their respective classification. The significant accounting policies in Note 3 describe howthe classes of financial instruments are measured, and how income and expenses, including fair value gains andlosses are recognized. The following table analyses the financial assets and liabilities of the Fund in the statement offinancial position by the class of financial instrument to which they are assigned, and therefore by the measurementbasis.

In addition, certain assets and liabilities are not considered to be part of the net assets or liabilities of an individualsegment. The following table provides reconciliation between the total reportable segment assets and liabilities andtotal assets and liabilities of the Fund.

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20. FINANCIAL INSTRUMENTS (CONTD.)

(a) Classification of financial instruments (Contd.)

Financial

liabilities

Financial AFS at

assets at financial Loan and amortised

FVTPL assets receivables cost Total

30-Jun-15 RM RM RM RM RM

AssetsInvestments 14,478,542 5,708,320 - - 20,186,862

Deposits with licensed

financial institutions - - 10,484,914 - 10,484,914

Amount due from brokers - - 127,117 - 127,117

Other receivables - - 117,361 - 117,361

Cash at bank - - 178,065 - 178,065

Total financial assets 14,478,542 5,708,320 10,907,457 - 31,094,319

Total non-financial assets 3,64031,097,959

Liabilities

Amount due to Brokers - - - - -

Amount due to Manager - - - 46,540 46,540Amount due to Trustee - - - 2,427 2,427

Other payables - - - 8,738 8,738

Total financial liabilities - - - 57,705 57,705

Financial

liabilities

Financial AFS at



30-Jun-14 RM RM RM RM RM

AssetsInvestments 10,768,954 2,696,380 - - 13,465,334



Amount due from brokers - - - - -


Cash at bank - - 73,023 - 73,023

Total financial assets 10,768,954 2,696,380 5,873,442 - 19,338,776


Liabilities

Amount due to Brokers - - - - -


Other payables - - - 8,440 8,440

Total financial liabilities - - - 34,644 34,644

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(b) Fair value

(i) Financial instruments that are carried at fair value

Level 1 Level 2 Total

RM RM RMAs at 30 June 2015

Financial asset at FVTPL- Quoted equities 14,478,542 - 14,478,542

AFS financial assets-Fixed income securities - 5,708,320 5,708,320

14,478,542 5,708,320 20,186,862


RM RM RMAs at 30 June 2014

Financial asset at FVTPL- Quoted equities 10,768,954 - 10,768,954

AFS financial assets-Fixed income securities - 2,696,380 2,696,380

10,768,954 2,696,380 13,465,334

The Fund’s financial assets at FVTPL and AFS financial assets are carried at fair value. The fair valuesof these financial assets were determined using prices in active markets for identical assets.

Quoted equity instrumentsFair value is determined directly by reference to their published market bid price on the relevant stockexchanges at the reporting date.

Unquoted fixed income securitiesThe published market prices for RM-denominated unquoted bonds are based on information providedby Bond Pricing Agency Malaysia Sdn Bhd.

The Fund held the following financial instruments carried at fair value on the statement of financialposition as at the end of period :

The Fund uses the following level of fair value hierarchy for determining and disclosing the fair value offinancial instruments carried at fair value in the statement of financial position:

Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilitiesLevel 2 : Inputs other than quoted prices included within Level 1 that are observable for the asset or

liability either directly or indirectly.Level 3 : Inputs for the asset or liability that are not based on observable market data.

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(b) Fair value (Contd.)


21. FINANCIAL RISK AND MANAGEMENT OBJECTIVES AND POLICIES

(i) Market Risk

(a) Equity Price Risk

Effect on profitor loss and equity

Change in equity price (%) Increase / (Decrease)RM

30 June 2015+6/-6 868,713/ (868,713)

30 June 2014+6/-6 646,137/ (646,137)

Equity price risk is the risk of unfavourable changes in the fair value of equities as the result of changes in thelevels of equity indices and the value of individual shares. The equity price risk exposure arises from theFund's investments in equity securities.

The table below summarises the effect of sensitivity from the Fund's underlying investments in quotedequities on the profit or loss and equity of the Fund due to possible changes in equity prices, with all othervariables held constant:

The Fund maintains investment portfolios in a variety of quoted and unquoted financial instruments as dictated byits Trust Deed and investment management strategy.

The Fund is exposed to a variety of risks including market risk (which include interest rate risk, equity price riskand currenct risk), credit risk, and liquidity risk. Whilst these are the most important types of financial risksinherent in each type of financial instruments, the Manager and the Trustee would like to highlight that this list doesnot purport to constitute an exhaustive list of all the risks inherent in an investment in the Fund.

The Fund’s objective in managing risk is the creation and protection of unitholders’ value. Risk is inherent in theFund’s activities, but it is managed through a process of ongoing identification, measurement and monitoring ofrisks. Financial risk management is also carried out through sound internal control systems and adherence to theinvestment restrictions as stipulated in the Trust Deed, the Securities Commission’s Guidelines on Unit Trust Fundsand the Capital Markets and Service Act, 2007.

The Fund's principal exposure to market risk arises primarily due to changes or developments in the marketenvironment and typically includes changes in regulations, politics and the economy of the country. Marketrisk is also influenced by global economics and geopolitical developments. The Fund seeks to diversify awaysome of this risk by investing into different sectors to mitigate risk exposure to any single asset class.

The Fund's market risk is affected primilary due to changes in market prices, interest rates and foreign

Financial instruments not carried at fair value comprise financial instruments and financial liabilitiesclassified as loans and receivables and financial liabilities at amortised cost respectively. The carryingamount of these financial instruments at the end of the period approximated their fair values due to theirshort term to maturity.

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

(i) Market Risk (Contd.)

(b) Interest Rate Risk


Change In Basis Points * Increase / (Decrease)RM

30 June 2015+25/-25 6,544/(6,544)

30 June 2014+25/-25 6,604/(6,604)

*

(c) Currency Risk

Effect on profit orloss and equity

30 June 2015 30 June 2014RM RM

Singapore Dollar 84,639 63,902South Korean Won 29,458 54,929Thai Baht 83,271 33,337Indonesia Rupiah 102,906 89,877Philippines Peso 26,344 97,060Hong Kong Dollar 408,705 171,653

735,323 510,758

This risk refers to the effect of interest rate changes on the market value of fixed income securities anddeposits with financial institutions. In the event of rising interest rates, the return on deposits with financialinstitutions will rise while prices of bond will decrease and vice versa, thus affecting the net asset value of theFund. This risk wil be minimized via the management of the duration structure of the portfolio of bond anddeposits with financial institutions.

The following table demonstrates the sensitivity of the profit or loss and equity of the Fund to a reasonablypossible change in interest rates, with all other variables held constant:

The assumed movement in basis points for interest rate sensitivity analysis is based on the currentlyobservable market environtment.

The Fund is exposure to currency risk primilary its investment in overseas quoted equities and bank balancesthat are denominated in foreign currencies. The Fund's foreign currency exposure profiles of its investment inquoted equities has been discolsed under Note 8.

A 10% strengtening or weakening of the RM against the following foreign currencies as at the end of periodwould have decreased or increased respectively the profit or loss and equity of the Fund by the amount shownbelow. This analysis assumes all other variables are held constant.

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(ii) Credit Risk

(iii) Liquidity Risk

30 June 2015 1 month-3 Above 3months months Total

RM RM RM

Financial assets 14,478,542 - 14,478,542Financial assets held at FVTPL - 5,708,320 5,708,320AFS financial assets 10,484,914 - 10,484,914Deposits with financial institutions 422,543 - 422,543Other assets 25,385,999 5,708,320 31,094,319Total undiscounted financial assets:

Non-Financial assetsTax Recoverable - 3,640 3,640

Total Assets 25,385,999 5,711,960 31,097,959

Financial liabilitiesOther Liabilities 57,705 57,705Total undiscountedfinancial liabilities 57,705 57,705

Unitholders capital 31,040,254 31,040,254

Liquidity gap (5,654,255) 5,654,255

The following table summarises the maturity profile of the Fund's financial liabilities and the correspondingassets available to meet commitments associated with those financial liabilities and redemption by theunitholders.

The Fund's prinicipal exposure to credit risk arises primarily due to changes in the financial conditions ofcompanies issuing debt securities and stockbroking companies, which may affect their creditworthiness. Thisin turn may lead to default in the payment. Such events can lead to loss of capital or delayed or reducedincome for the Fund resulting in a reduction in the Fund's asset value and thus unit price. This risk is mitigatedby vigorous credit analysis and diversification of the bond portfolio of the Fund and to enage differentstockbroking companies with good reputation. Bond rating of the Fund's portfolio is disclosed in Note 8.

This risk occurs in thinly traded or illiquid equity securities. Should the Fund needs to sell a relatively largeamount of such securities, the act itself may significantly depress the selling price. As the Fund is exposed todaily redemption of units, the risk is minimised by placing a prudent level of funds in short term deposits andby investing in stocks whose liquidity is adjudged to be commensurate with the expected exposure level of theFunds.

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(iii) Liquidity Risk (Contd.)

30 June 2013 1 month-3 Above 3

months months Total

RM RM RM

Financial assets

Financial assets held at FVTPL 6,996,864 - 6,996,864

AFS financial assets - 5,899,860 5,899,860

Deposits with financial institutions 2,081,211 - 2,081,211Other assets 1,822,999 - 1,822,999Total undiscounted financial assets: 10,901,074 5,899,860 16,800,934

Non-Financial assetsTax Recoverable - 11,547 11,547

Total Assets 10,901,074 5,911,407 16,812,481

Financial liabilitiesOther Liabilities - 29,291 29,291Total undiscountedfinancial liabilities - 29,291 29,291

Unitholders capital 16,783,190 - 16,783,190

Liquidity gap (5,882,116) 5,882,116

(iv) Stock Specific Risk

(v) Single Issuer Risk

(vi) Capital Management

The Fund is exposed to the individual risk of the respective companies issuing securities which includeschanges to the business performance of the company, consumer tastes and demand, lawsuits and managementpractices. This risk is minimised through the well diversified nature of the Fund.

The Fund's exposure to securities issued by any issuer is limited to not more than a certain percentage of itsnet assets value. Under such restriction, the risk exposure to the securities of any issuer is minimised.

The capital is represented by unitholders' subscription to the Fund. The amount of capital can changesignificantly on a daily basis as the Fund is subject to daily redemption and subscription at the discretion ofunitholders. The Manager manages the Fund's capital with the objective of maximising unitholders' value,while maintaining sufficient liquidity to meet untiholder's redemption as explained in Note 21 (iii) above.

74


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[email protected]

75Your Need

is our Focus

21 August 2015


DMP

[email protected]

76Your Need

is our Focus

21 August 2015


DMP

[email protected]

77Your Need

is our Focus

STATEMENT BY MANAGER TO THE UNITHOLDERS OFDANA MAKMUR PHEIM

In the opinion of the Manager, the accompanying unaudited financial statements ofDana Makmur Pheim are drawn up in accordance with Malaysian Financial ReportingStandards, International Financial Reporting Standards and the Securities Commission'sGuidelines on Unit Trust Funds in Malaysia so as to give a true and fair view of theunaudited financial position of Dana Makmur Pheim as at 30 June 2015 and of itsresults, changes in the net asset value and cash flows for the period then ended.





DMP

DANA MAKMUR PHEIM



Note 30.06.2015 30.06.2014

RM RM

INVESTMENT INCOME


Profit from Shariah-compliant investements

- receivables 61,347 72,591

- available for sale ("AFS") financial assets 74,596 35,617


profit or loss ("FVTPL") 8 432,632 927,377

Amortisation of premiums, net of accretion of

discounts on AFS financial assets 9 (1,565) (939)

642,487 1,103,681

EXPENDITURE

Manager's fee 4 114,703 109,159

Trustee's fee 5 9,195 8,926




139,701 136,094

Net income before taxation 502,786 967,588

Tax expenses 6 - -Net income for the period 502,786 967,588

Other comprehensive income

Net gain/(loss) on change in fair value of AFS financial assets 11,295 (3,932)

11,295 (3,932)


Net income after tax for the period is made up of the following:

Net realised income 229,495 330,688

Net unrealised income 273,291 636,900502,786 967,588

Distribution for the year

Net distribution (RM) 13 506,524 493,000

Net distribution per unit (sen) 13 6.75 6.5

Gross distribution per unit (sen) 13 6.75 6.5


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DANA MAKMUR PHEIM


Note 30.06.2015 30.06.2014

RM RM

ASSETS

Shariah-compliant investments 7 10,701,123 11,661,000

Islamic deposit with licensed financial institutions 10 4,182,151 3,778,785

Amount due from brokers - -


Tax recoverable 267 32,498

Cash at bank 78,855 22,482TOTAL ASSETS 15,041,060 15,553,687

LIABILITIES



Other payables and accruals (682) (186)


EQUITY


Retained earnings 5,034,609 5,377,211

Available for sale reserve 581 (3,465)

TOTAL EQUITY 14 15,019,014 15,531,586





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DANA MAKMUR PHEIM






Note 14(a) Note 14(b) Note 14 (d)

and 14 (c)

RM RM RM RM

At 1 January 2014 8,495,984 4,902,623 467 13,399,074


the period - 967,588 (3,932) 963,656


Cancellation of units (392,715) - - (392,715)

Distribution equalisation 384,898 - - 384,898

Distribution in the period - (493,000) (493,000)Balance at 30 June 2014 10,157,840 5,377,211 (3,465) 15,531,586

At 1 January 2015 8,495,870 5,038,347 (10,714) 13,523,503

Effects of adopting FRS 139 - - - -

(Note 2.2) 8,495,870 5,038,347 (10,714) 13,523,503


the period - 502,786 11,295 514,081


Cancellations of units (165,149) - - (165,149)

Distribution equalisation 374,314 - - 374,314

Distribution in the period - (506,524) - (506,524)Balance at 30 June 2015 9,983,824 5,034,609 581 15,019,014

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DANA MAKMUR PHEIM



01.01.2015 01.01.2014

to to

30.06.2015 30.06.2014

RM RM



Proceeds from sale of Shariah-compliant investments 1,529,791 2,552,306

Purchase of Shariah-compliant investments (3,681,087) (6,564,631)


Profits received from Islamic deposits with licensed

financial institutions and sukuk 135,911 83,960




Income distribution paid (57) (55)

Net cash used in from operating and investing activities (2,103,114) (3,969,291)


Proceeds from creation of units 1,253,211 1,742,052

Payment for cancellation of units (256,458) (595,978)

Net cash generated from financing activities 996,753 1,146,074

NET INCREASE IN CASH

AND CASH EQUIVALENTS (1,106,361) (2,823,217)





Islamic deposits with licensed financial institutions (Note 10) 4,182,151 3,778,785

Cash at bank 78,855 22,4824,261,006 3,801,267


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DANA MAKMUR PHEIM

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)






The unaudited financial statements of the Fund have been prepared in accordance withMalaysian Financial Reporting Standards ("MFRSs"), International Financial ReportingStandards ("IFRSs") and the Securities Commision's Guidelines on Unit Trust Funds inMalaysia.

Dana Makmur Pheim ("the Fund") was established pursuant to a Master Deed dated 11 January2002 as amended modified and supplemented by a Supplemental Master Deed dated 3 November2008 made between HSBC Trustee (Malaysia) Berhad and Pheim Unit Trusts Berhad ("theManager"), a second Supplemental Master Deed dated 29 April 2013 and Third SupplementalMaster Deed dated 30 April 2015 made between the Manager and Maybank Trustees Berhad ("theTrustee").

The principal activity of the Fund is to invest in "Permitted Investments" as defined under Part 7 ofthe Master Deed, which includes investments in equities and fixed income securities traded on BursaMalaysia or any other markets considered as Eligible Market. The Fund commenced operations on28 January 2002 and will continue its operations until terminated by the Trustee as provided underPart 12 of the Master Deed.

The Manager is a public limited company incorporated in Malaysia. It is a wholly owned subsidiaryof the Pheim Asset Management Sdn Bhd, a private company incorporated in Malaysia. Its principalactivity is the management of unit trust funds. Pheim Asset Management Sdn. Bhd. has beenappointed by the Manager as the External Investment Manager of the Fund with responsibility forthe provision of investment management services to the Fund.

The principal place of business of the Fund is located at 7th Floor, Menara Hap Seng, Jalan P.Ramlee, 50250 Kuala Lumpur.


The unaudited financial statements were authorised for issue by the Board of Directors of theManager in accordance with the resolution of the directors on 21 August 2015.

The unaudited financial statements of the Fund are prepared under the historical costconvention unless otherwise indicated in this summary of significant accounting policies.

The accounting policies applied by the Fund are consistent with those applied in the previousfinancial year other than the application of the new and revised MFRSs, Issues Committee("IC") Interpretations and amendments to MFRSs and IC Interpretations as disclosed in Note2.3 below

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2. BASIS OF PREPARATION (CONTD.)

2.3 Application of Amendments to MFRSs and new IC Interpretation




(b) Amendments to MFRS 139 - Novation of Derivatives and Continuation of Hedge

Accounting




MFRS 14, Regulatory Deferrral Accounts

Amendments to MFRS 10 and MFRS 128 - Sale or Contribution of Assets between an Investor at

its Associate or Joint Venture

Amendments to MFRS 10, MFRS 12 and MFRS 128 - Investment Entities: Applying the

Consideration Exception

Amendments to MFRS 11 - Accounting for Acquisitions of Interests in Joint Operations

Amendments to MFRS 101 - Disclosure Initiative

Amendments to MFRS 116 and MFRS 138 - Clarification of Acceptable Methods of

Depreciation and Amortisation

Amendments to MFRS 116 and MFRS 141 - Agriculture : Bearer Plants

Amendments to MFRS 127 - Equity Method in Separate Financial Statements

Amendments to MFRSs Classified as "Annual Improvements to MFRSs 2012 - 2014 Cycle"

During the period, the Fund has applied the following amendments to MFRSs issued by theMalaysian Accounting Standard Board ("MASB") which are effective for accounting periodbeginning on or after 1 January 2014 :-

The Amendments clarify the requirements relating to the offset of financial assets andfinancial liabilities. Specifically, the Amendments clarify the meaning of 'currently hasa legally enforceable right of set-off' and 'simultaneous realisation and settlement'.

The Amendments have been applied retrospectively and the application has no impacton the disclosures or the amounts recognised in the Fund's financial statements.

The Fund has not early adopted the following new MFRSs and amendments to MFRSs that havebeen issued by the MASB but are not yet effective :-

The Amendments introduce a narrow-sscope exception to the requirement for thediscontinuation of hedge accounting in MFRS 139, Financial Instruments : Recognitionand Measurement. Specifically, the Amendments provide relief from discontinuinghedge accounting when a novation of a derivative as a hedging instrument meets certaincriteria.

The Amendments have been applied retrospectively and the application has no impacton the disclosures or the amounts recognised in the Fund's financial statements.

Amendments to MFRS 119, Defined Benefit Plans: Employee ContributionsAmendments to MFRSs Classified as "Annual Improvements to MFRSs 2010 - 2012 Cycle"Amendments to MFRSs Classified as "Annual Improvements to MFRSs 2011 - 2013 Cycle"

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The Fund will apply the above new MFRSs and amendments to MFRSs that are applicableonce they become effective. The main features of the new applicable standards andamendments to standards are summarised below :-

The Standard replaces earlier versions of MFRS 9 and introduces a package of improvementswhich includes a classification and measurement model, a single forward-looking 'expectedloss' impairment model and a substantially-reformed approach to hedge accounting.

• Under MFRS 9, all recognisd financial assets are required to be subsequently measured ateither amortised cost, fair value through other comprehensive income ("FVTOCI") or fairvalue through profit or loss ("FVTPL") on the basis of both an entity's business model formanaging the financial assets and the contractual cash flow characteristics of the financialassets. These requirements improve and simplify the approach for classification andmeasurement of financial assets as the numerous categories of financial assets underMFRS 139 had been replaced.

• Most of the requirements in MFRS 139 for classification and measurement of financalliabilities were carried forward unchanged to MFRS 9, except for the measurement offinancial liabilities designated as at FVTPL. Under MFRS 139, the entire amount of thechange in the fair value of the financial liability designated as FVTPL is presented inprofit or loss. However, MFRS 9 requires that the amount of change in the fair value of thefinancial liability that is attributable to changes in the credit risk of that is liability ispresented in other comprehensive income, unless the recognition of the effects of changesin the liability's own credit risk in other comprehensive income would create or enlarge anaccounting mismatch in profit or loss. Changes in fair value attributable to a financialliability's credit risk are not subsequently reclassified to profit or loss.

• In relation to the impairment of financial assets, MFRS 9 requires an expected credit lossmodel, as opposed to an incurred credit loss model under MFRS 139. Under MFRS 9, it isno longer necessary for a credit event to have occurred before credit lossses arerecognised. Instead, an entity always accounts for expected credit losses and changes inthose expected credit losses at each reporting date to reflect changes in credit risk sinceinitial recognition.

• The new general hedge accounting requirements retain the three types of hedge accountingmechanisms currrently available in MFRS 139 i.e. fair value hedges, cash flow hedges andhedges of a net investment in a foreign operation. MFRS 9 incorporates a new hedgeaccounting model that aligns the hedge accounting more closely with an entity's riskmanagement activities. The new hedge accounting model has also expanded the scope ofeligibility of hedge items and hedging instruments respectively.

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2.4

MFRS 9, Financial Instruments (IFRS 9 issued in July 2014)(Contd.)



(a) Financial assets at fair value through profit or loss ("FVTPL")

New MFRSs and Amendments to MFRSs That Are In Issue But Not Yet Effective

The initial application of MFRS 9 in the future may have an impact on the financial statements

of the Fund. However, it is not practicable to provide a reasonable estimate of the effect until a

detailed review has been completed. The initial application of other new MFRSs and

amendments to MFRSs is not expected to have any significant impact on the financial statements

of the Fund.

The accounting policies set out below have been applied consistently to the periods, presented inthese financial statements and have been applied consistently by the Fund, unless otherwise stated.

Financial assets are recognised in the statement of financial position when, and only when, theFund becomes a party to the contractual provisions of the financial instruments. Regular wayof purchase and sale of investments in financial instruments are recognised on trade dates.When financial assets are recognised initially, they are measured at fair value, plus attributabletransaction cost, for investment not at fair value through profit or loss.

The Fund determines the classification of its financial assets at the initial recognition, and thecategories include financial assets at fair value through profit or loss, available-for-salefinancial assets and receivables.

Financial assets are classified as financial assets at FVTPL if they are held for trading orare designated as such by the Manager upon initial recognition. Financial assets held fortrading include Shariah-compliant securities and sukuk acquired principally for thepurpose of selling them in near term.

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value atthe date of the statement of financial position. Changes in the fair value of those financialinstruments are recorded in "Net gain or loss on financial assets at FVTPL". Profitearned and dividend revenue elements of such instruments are recorded separately in"Profit income" and "Dividend income", respectively. Foreign exchange differences onfinancial assets at FVTPL are not recognised separately in profit or loss but included innet gains or net losses on changes in fair value of financial assets at FVTPL.

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(c) Receivables

AFS financial assets are financial assets that are designated as available for sale or are notclassified as financial assets at FVTPL and receivables.

After initial recognition, AFS financial assets are measured at fair value. Gains or losseson changes in fair value of the AFS financial assets are recognised in othercomprehensive income, except that impairment losses, foreign exchange gains and losseson monetary instruments, dividend income and profit income calculated using effectiveprofit method are recognised in profit or loss.

The cumulative gain or loss previously recognised in other comprehensive income isreclassified from equity to profit or loss as a reclassification adjustment when thefinancial asset is derecognised. Profit income calculated using the effective profit methodis recognised in profit or loss. Dividends on an AFS Shariah-compliant equity instrumentare recognised in profit or loss when the Fund's right to receive payment is established.

Fair value is the amount for which an assets could be exchanged, or a liability settled,between knowledgeable, willing parties in an arm's length transaction. The fair value forfinancial instruments traded in active markets at the reporting date is based on theirquoted price or binding dealing price quotations, without deduction for transaction costs.

A financial asset is derecognised when the asset is disposed and the contractual right toreceive cash flows from the asset has expired. On derecognition of financial asset in itsentirety, the difference between the carrying amount and the sum of the considerationreceived and any cumulative gain or loss that had been recognised in othercomprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that requiredelivery of assets within the period generally established by regulation or convention inthe market place concerned. All regular way of purchases and sales of financial assets arerecognised or derecognised on the trade date, i.e. the date that fund commit to purchaseor sell of asset.

Financial assets with fixed or determinable payments that are not quoted in an activemarket are classified as receivables. The Fund includes short term receivables such asbalances due from broker, Manager and other receivables in the classification.Receivables are recognised initially at fair value including transaction costs.

Subsequent to initial recognition, receivables are measured at amortised cost usingeffective profit method. Gains and losses are recognised in profit or loss when thereceivables are derecognised or impaired, and through the amortisation process.

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The Fund assesses at each reporting date whether there is any objective evidence that

a financial asset is impaired.



Significant or prolonged decline in fair value below cost, significant financial difficultiesof the issuer or obligor, and the disappearance of an active trading market areconsiderations to determine whether there is objective evidence that investment securitiesclassified as AFS financial assets are impaired.

If an AFS financial asset is impaired, an amount comprising the differences between itscost (net of any principal payment and amortisation) and its current fair value, less anyimpairment loss previously recognised in profit or loss, is transferred from equity toprofit or loss.

Impairment losses on AFS equity investments are not reversed in profit or loss in thesubsequent periods. Increase in fair value, if any, subsequent to impairment loss isrecognised in other comprehensive income. For AFS sukuk investments, impairmentlosses are subsequently reversed in profit or loss, up to the amount previously recognisedas impairment loss, if an increase in the fair value of the investment can be objectivelyrelated to an event occurring after the recognition of the impairment loss in profit or loss.

To determine whether there is objective evidence that an impairment loss on financialassets has been incurred, the Fund consider factors such as the probability of insolvencyor significant financial difficulties of the debtor and default or significant delay inpayments.

If any such evidence exists, the amount of impairment loss is measured as the differencebetween the asset's carrying amount and the present value of estimated future cash flowsdiscounted at the financial asset's original effective profit rate. The impairment loss isrecognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly forall financial assets with the exception of trade receivables, where the amount is reducedthrough the use of an allowance account. When a trade receivable becomes uncollectible,it's written off against allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decreasecan be related objectively to an event occuring after the impairment was recognised, thepreviously recognised impairment loss is reversed to the extent that the carrying amountof the asset does not exceed its amortised cost at the reversal date. The amount of reversalis recognised in profit or loss.

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3.5 Functional and Presentation Currency


Unrealised gain and losses comprise changes in fair value of financial instruments for theperiod from reversal of prior period's unrealised gain and losses for financial instruments whichwere realised (i.e. sold, redeemed or matured) during the reporting period.

Realised gains and losses on disposals of financial instruments classified as part of "at fairvalue through profit or loss" are calculated using weighted average method. They represent thedifference between an instrument's initial carrying amount and disposal amount, or cashpayment or receipts made of Shariah-compliant derivative contracts (excluding payments orreceipts on collateral margin accounts for such investments).

Financial liabilities are classified according to the substance of the contractual arrangementsentered into and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement offinancial position when, only when, the Fund becomes a party to the contractual provisions ofthe financial instrument. Financial liabilities are classified as other financial liabilities.

The Fund's financial liabilities which include amount due to broker, Manager and otherpayables are recognised initially at fair value plus directly attributable transaction costs andsubsequently measured at the amortised cost using effective profit method.

A financial liability is derecognised when the obligation under the liability is extinguished.Gains and losses are recognised in profit or loss when the liabilities are derecognised, andthrough the amortisation process.

The financial statements of the Fund are measured using the currency of the primary economicenvironment in which the Fund operates ("the functional currency"). The financial statementsare presented in Ringgit Malaysia (RM), which is also the Fund's functional currency.

The unitholders' contributions to the Fund meet the definition of puttable instruments classifiedas equity instruments under MFRS 132.

Distribution equalisation represents the average distributable amount included in the creationand cancellation prices of units. This amount is either refunded to unitholders by way ofdistribution and/or adjusted accordingly when units are cancelled.

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3.9 Income

3.10 Income Tax

Income distributions are at the discretion of the Manager. Income distribution to the Fund'sunitholders is accounted for as a deduction from realised reserves except where distribution issourced out of distribution equalisation which is accounted for as deduction from unitholders'capital.

Cash and cash equivalents comprise cash at bank and Islamic deposits with financialinstitutions which have insignificant risk of changes in value.

Income is recognised to the extent that is probable that the economic benefits will flow to theFund and the income can be realiably measured. Income is measured at fair value ofconsideration received or receivable.


Profit income, which includes the accretion of discount and amortisation of premium on sukuk,is recognised using effective profit method.

Current tax assets and liabilities are measured at the amount expected to be recovered from orpaid to the tax authorities. The tax rates and tax laws used to compute the amount are thosethat are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

No deferred tax is recognised as there are no material temporary differences.

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4. MANAGER'S FEE

5. TRUSTEE' S FEE

The Manager is entitled to an annual management fee of 1.5% p.a. of net asset value of the Fund(before deducting the Manager's and Trustee's fee for the day) calculated and accrued on a dailybasis.

For management purposes, the Fund is managed by 2 main portfolios, namely (1) Shariah-compliant equity securities and (2) sukuk and Islamic deposits. Each segment engages inseparate business activities and the operating results are regularly reviewed by the Manager,External Investment Manager and the Fund's Investment Committee. The External InvestmentManagers and the Fund Investment Committee jointly assumes the role of chief operationdecision maker, for performance assessment purposes and to make decision about resourcesallocated to each investment segment.

The preparation of financial statements in accordance with MFRS and IFRS requires the use ofcertain accounting estimates and exercise of judgements. Estimates and judgements arecontinually evaluated and are based on past experience, reasonable expectations of future eventsand other factors.

No major judgements have been made by the Manager in applying the Fund's accountingpolicies. There are no key assumptions concerning the future and other key sources ofestimation uncertainty at the reporting date, that have significant risk of causing materialadjustment to the carrying amounts of assets and liabilities within next year.

The Trustee is entitled to a fee of 0.07% p.a. based on net asset value of the Fund (before deductingthe Manager's and Trustees for the day) calculated and accrued on a daily basis subject to aminimum of RM18,000 p.a.

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6. TAXATION

30.06.2015 30.06.2014

RM RM

Current year Malaysian tax - -

Overprovision in prior year - -Malaysian tax expense based on results for the year - -

30.06.2015 30.06.2014

RM RM


Tax at Malaysian statutory rate of 25% (2014: 25%) 125,697 241,898

Tax effects of:

Income not subject to tax (160,621) (275,920)

Expenses not deductible for tax purposes 5,233 5,656

Restriction on tax deductible expenses for unit trust funds 29,691 28,366Tax expense/(recoverable) for the financial year - -

7. SHARIAH-COMPLIANT INVESTMENTS

30.06.2015 30.06.2014RM RM

Financial assets at fair value through

profit or loss (Note 8)

Quoted Shariah-compliant equities

in Malaysia 7,093,263 8,054,030

Available-for-sale financial assets

(Note 9)

Unquoted sukuk 3,607,860 3,606,970Total Shariah-compliant investment 10,701,123 11,661,000

Income tax is calculated at Malaysian statutory tax rate 25% of the estimated assessable net incomefor the financial period.

The tax charge for the period is in relation to the taxable income earned by the Fund after deductingallowable expenses. In accordance with Schedule 6 of Income Tax Act 1967, profit income earned bythe Fund is exempted from tax.

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

91

DMP


30.06.2015 30.06.2014

RM RM

Financial assets at FVTPL:Quoted Shariah-compliant equities 7,093,263 8,054,030

Net gain on financial assets at FVTPL comprised:

Realised gain on disposals 159,341 290,477

Unrealised gain changes in fair values 273,291 636,900432,632 927,377

Financial assets held-for-trading as at 30 June 2015 are as detailed below:


RM RM NAV

QUOTED SHARIAH-COMPLIANT EQUITIES

- IN MALAYSIA

Main Market

Construction

Ho Hup Construction Co.Bhd 296,000 399,601 352,240 2.35

Muhibbah Engineering (M) Bhd 98,000 209,199 221,480 1.47

394,000 608,800 573,720 3.82

Consumer Products

Sasbadi Holdings Bhd 128,000 235,597 300,800 2.00

Tek Seng Holdings Bhd 400,000 235,467 206,000 1.37

528,000 471,064 506,800 3.37

Industrial Products

Can-One Bhd 167,000 538,205 419,170 2.79

Evergreen Fibreboard Bhd 392,000 353,454 525,280 3.50

Jaya Tiasa Holdings Berhad 176,050 385,672 265,836 1.77

Kian Joo Can Factory Bhd 92,000 271,528 289,800 1.93

Malaysia Steel Works KL Bhd 194,000 179,756 120,280 0.80

Scientex Bhd 26,200 158,511 179,470 1.19

Supermax Corp Bhd 100,000 243,688 207,000 1.38

Ta Ann Holdings Bhd 84,000 365,648 319,200 2.13

Top Glove Corp Bhd 20,000 109,931 132,800 0.88

1,251,250 2,606,393 2,458,836 16.37

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RM RM NAV


- IN MALAYSIA (CONTD.)

Plantation

Hap Seng Plantations Holdings Bhd 104,000 286,571 254,800 1.70

Sarawak Oil Palms Bhd 94,000 542,466 438,040 2.92

198,000 829,037 692,840 4.62

Properties

Hua Yang Bhd 180,333 404,307 344,436 2.29

Land & General Bhd 527,000 306,929 226,610 1.51

Matrix Concepts Holdings Bhd 162,500 271,271 503,750 3.35

Metro Kajang Holdings Bhd 128,500 476,846 273,705 1.82

Tambun Indah Land Bhd 162,000 303,669 268,920 1.79

1,160,333 1,763,022 1,617,421 10.76

Technology

Inari Amertron Bhd 134,125 321,486 435,906 2.90

Malaysian Pacific Industries 38,000 134,599 250,040 1.66

Unisem (M) Bhd 17,000 35,253 39,440 0.26

189,125 491,338 725,386 4.82

Trading/ Services

Berjaya Auto Bhd 56,000 133,149 150,080 1.00

Fitters Diversified Bhd 436,000 292,345 241,980 1.61

Tenaga Nasional Bhd 10,000 145,551 126,200 0.84

502,000 571,045 518,260 3.45

TOTAL QUOTED

SHARIAH-COMPLIANT

EQUITIES 4,222,708 7,340,699 7,093,263 47.21


EXCESS OF FAIR VALUEOVER COST (247,436)

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DMP

9. AFS FINANCIAL ASSETS

30.06.2015 30.06.2014

RM RM

Unquoted Sukuk 3,607,860 3,606,970

Amortisation of premiums, net of accretionof discounts on AFS financial assets (1,565) (939)

Unrealised gain/(loss) on changes in fair values 11,295 (3,465)

AFS financial assets as at 30 June 2015 are as detailed below:


RM RM NAV

UNQUOTED SUKUK

SME Bank IMTN -3/17 1,300,000 1,300,000 1,299,350 8.65

Poh Kong IMTN 10/17 2,300,000 2,307,279 2,308,510 15.37

3,600,000 3,607,279 3,607,860 24.02

EXCESS OF FAIR VALUEOVER COST 581

* Cost of sukuk includes amortisation of premium

10. ISLAMIC DEPOSITS WITH LICENSED FINANCIAL INSTITUTIONS

30.06.2015 30.06.2014

RM RM

Licensed investment banks 4,182,151 3,778,785

Average

remaining

WAERR maturities

30.06.2015 30.06.2014 30.06.2015 30.06.2014

% % Days Days

Licensed investment bank 3.12 4.08 7 10

The weighted average rate of return per annum and the average remaining maturities of Islamicdeposits and placement are as follows:

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11. SHARIAH INFORMATION OF THE FUND

(a)

(b)

(c)


2015 2014

RM RM

Amount arising from (creation)/release of units (99) 993

Management fee 21,154 19,76521,055 20,758

13. DISTRIBUTION FOR THE PERIOD

Distribution declared and paid on 27 March 2015 was 6.75 sen net per unit.

Distribution to unitholders are from the following sources:

2015 2014

RM RM

Dividend (local) Quoted Shariah-compliant securities 2,928 2,029

Profit from Corporate Sukuk 870 950

Profit from Islamic deposit 4,716 5,152

Amortisation of premium on corporate sukuk (64) (38)

Net realised gain from sale of Shariah-compliant investments 43,548 52,945

51,998 61,038

Less:

Expenses 5,426 8,317

Taxation - -

Previous year's realised gain 46,572 52,721

Distribution out of realised reserves 459,952 440,278Distribution for the period 506,524 493,000

Units in circulation at book closing date 7,504,060 7,584,611

Gross distribution per unit (sen) 6.75 6.5

Net distribution per unit (sen) 6.75 6.5Date of distribution 27.03.2015 29.04.2014

The Shariah Adviser confirmed that the investments portfolio of the Fund is Shariah-compliant,which comprises:

Equity securities listed on Bursa Malaysia which have been classified as Shariah-compliant bythe Shariah Advisory Council of the Securities Commission Malaysia;

Sukuk as per the list of sukuk available at Bond Info Hub and Fully Automated System ForIssuing/Tendering of Bank Negara Malaysia; and

Liquid assets in local market, which are placed in Shariah-compliant investments and/orinstruments.

95

DMP

14. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS (TOTAL EQUITY)

Note 30.06.2015 30.06.2014

RM RM

Unit holders' capital (a) 9,983,824 10,157,840

Retained earnings

- Realised (b) 5,289,594 3,846,496

- Unrealised (c) (254,985) 1,530,715

5,034,609 5,377,211

AFS reserve (d) 581 (3,465)Total equity / Net asset value 15,019,014 15,531,586

(a) Unitholders' Capital

Number Number

of units RM of units RM

Balance at beginning

of year 6,976,355 8,495,870 7,032,637 8,495,984

Add: Creation of units 869,781 1,278,789 1,124,856 1,669,673

Less: Cancellation of units (129,283) (165,149) (304,977) (392,715)

Distribution equalisation - 374,314 - 384,898

Balance at end ofperiod 7,716,853 9,983,824 7,852,516 10,157,840

(b) Realised - Distributable

30.06.2015 30.06.2014

RM RM

Balance at the beginning of period 5,566,623 4,008,808

Net income after taxation 502,786 967,588

Net unrealised gain attributable to

Shariah-compliant investments held

transferred to unrealised reserve (273,291) (636,900)

Distribution out of realised reserve (506,524) (493,000)Balance at the end of period 5,289,594 3,846,496

01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014

In accordance with Article 6.1.1 of the Deed and Securities Commission's approval letter dated 14August 2006, the maximum number of units that can be issued for circulation is 100 million units.As at 30 June 2015 the number not yet issued is 92,283,147 units (2014: 92, 147,754 units).

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14. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS (TOTAL EQUITY) [CONTD.]

(c) Unrealised - Non-distributable

30.06.2015 30.06.2014

RM RM

Balance at the beginning of period (528,276) 893,815


Shariah-compliant investment held

transferred from realised reserve 273,291 636,900Balance at the end of period (254,985) 1,530,715


RM RM/Unit RM RM/Unit

Net asset value attributable

to unitholders for

issuing/redeeming of units 15,046,415 1.9498 15,595,021 1.9861

Effect from adopting bid

prices as fair value (27,401) (0.0035) (63,435) (0.0082)


to unitholders per

financial statements 15,019,014 1.9463 15,531,586 1.9780


Number of Valued at Number of Valued at

units NAV units NAV

RM RM

Directors of the Manager# 423,390 824,028 300,260 544,879

# The Directors of the Manager are legal and beneficial owner of the units.

30.06.2015 30.06.2014

30 June, 2015 30 June, 2014

Net asset value attributable to unitholders is classified as equity in the statement of financialposition.

Quoted financial assets in the financial statements have been valued at the bid prices at the close ofbusiness in accordance with the provisions of MFRS 139. For the purpose of calculation of net assetvalue attributable to unitholders per unit for the issuance and redemption of units in accordance withthe Deed, quoted financial assets are stated at the last done market price.

A reconciliation of net asset value attributable to unitholders for issuing/redeeming units at and thenet value attributable to unitholders per the financial statements is as follows:-

97

DMP


1 January 2015 to 30 June 2015

% of Total

Value of % of Total Brokerage Brokerage

Trade Trade Fees Fees

RM % RM %

MIDF Amanah Investment 4,833,763 37.75 - -

- Bank Bhd

KAF Investment Bank Bhd 3,318,001 25.91 - -

Kenanga Investment Bank Bhd 858,261 6.70 1,931 18.40

Affin Hwang Capital Investment 759,902 5.93 1,699 16.19

- Bank Bhd

Maybank Investment Bank Bhd 745,550 5.82 1,853 17.66

RHB Investment Bank Bhd 693,079 5.41 1,558 14.85

Hong Leong Investment Bank Bhd 417,518 3.26 793 7.56

CIMB Investment Bank Bhd 290,064 2.27 660 6.29

Nomura Securities (M) Sdn Bhd 265,568 2.07 597 5.69

KAF Seagroat & Campbell 235,431 1.84 528 5.03

- Securities Sdn Bhd

Other brokers 388,654 3.04 874 8.3312,805,791 100.00 10,493 100.00

18. MANAGEMENT EXPENSE RATIO

30.06.2015 30.06.2014


19. PORTFOLIO TURNOVER RATIO

30.06.2015 30.06.2014


This is the ratio of the sum of the fees (inclusive of manager's trustee's audit and other professionalfees) and other administrative expenses of the Fund to the average NAV of the Fund calculated on adaily basis. The average NAV of the Fund for the period ended 30 June 2015 was RM14,971,164 (30June 2014: RM14,709,312)

This is the ratio of the average of acquisitions and disposals of Shariah-compliant investments for theperiod to average NAV of the Fund for the year calculated on a daily basis.

Details of transactions with stockbroking companies and other investment banks for the periodended 30 June 2015 are as follows:

98

DMP


The Manager , the appointed External Investment Manager and Investment Committee of the Fundare responsible for allocating resources available to the Fund in accordance with the overallinvestment strategies as set out in the investment Guidelines of the Fund. The Fund is managed bytwo segments:

● A portfolio of Shariah-compliant equity instruments● A portfolio of sukuk and Islamic deposits with financial institutions.

The investment objective of each segment is to achieve consistent returns from the investments ineach segment while safeguarding capital by investing in diversified portfolios. There have been nochanges is reportable segments in the current financial period. The segment information provided ispresented to the Manager, the appointed External Investment Manager and Investment Committee ofthe Fund.

Shariah- Islamic Shariah- Islamic

compliant Deposit compliant Deposit

Equity and Sukuk Total Equity and Sukuk Total



Profit from Islamic

deposits with licensed financial

institutions and sukuk - 135,943 135,943 - 108,208 108,208

Net gain on financial assets

at FVTPL 432,632 - 432,632 927,377 - 927,377

Amortisation of premium, net of

accretion of discount on

AFS financial assets (1,565) (1,565) (939) (939)

Total segment operating income

for the period 508,109 134,378 642,487 996,413 107,269 1,103,681

Islamic deposits

with financial institutions 4,182,151 4,182,151 3,778,785 3,778,785

Financial assets at FVTPL 7,093,263 - 7,093,263 8,054,030 - 8,054,030

AFS financial assets 3,607,860 3,607,860 3,606,970 3,606,970Other assets 77,931 733 78,664 58,257 665 58,922



01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014

99

DMP


30.06.2015 30.06.2014

RM RM

Net reportable segment operating income 642,487 1,103,681

Expenses (139,701) (136,094)

Net (Loss)/income before tax 502,786 967,587

Tax expense - -Net (Losses)/income after tax 502,786 967,587

30.06.2015 30.06.2014

RM RM

Total segment assets 14,961,938 15,498,707

Tax recoverable 267 32,498

Amount due from broker - -

Cash at bank 78,855 22,482

Total assets of the Fund 15,041,060 15,553,687

Total segment liabilities - -

Other payables and accruals (682) (186)

Amount due to Manager 21,055 20,758


Total liabilities of the Fund 22,046 22,101



Expenses of the Fund are not considered part of the performance of any operating segment. Thefollowing table provides a reconciliation between reportable segment income and operatingprofits/(loss).

In addition, certain assets and liabilities are not considered to be part of the net assets or liabilitiesof an individual segment. The following table provides reconciliation between the total reportablesegment a sse t s and l iabi l i t ie s and to ta l a sse t s and l iabi l i t ie s of the Fund .

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at either fairvalue or at amortised cost based on their respective classification. The significant accountingpolicies in Note 3 describe how the classes of financial instruments are measured, and how incomeand expenses, including fair value gains and losses are recognized. The following table analyses thefinancial assets and liabilities of the Fund in the statement of financial position by the class offinancial instrument to which they are assigned, and therefore by the measurement basis.

100

DMP


(a) Classification of financial instruments (contd.)

Financial

liabilities

Financial AFS at

assets at financial Receivables amortised

FVTPL assets cost Total

RM RM RM RM RM

30 June, 2015

Assets

Quoted Shariah-compliant

equities 7,093,263 3,607,860 - - 10,701,123

Islamic deposits with -

licensed financial institutions - - 4,182,151 - 4,182,151


Cash at bank - - 78,855 - 78,855Total financial assets 7,093,263 3,607,860 4,339,670 - 15,040,793

Total non-financial assets 267

15,041,060

Liabilities

Amount due to Manager - - - 21,055 21,055

Amount due to Trustee - - - 1,673 1,673

Other payables and accruals - - - (682) (682)Total financial liabilities - - - 22,046 22,046

30 June, 2014

Assets

Quoted Shariah-compliant

equities 8,054,030 3,606,970 - - 11,661,000

Islamic deposits with -

licensed financial institutions - - 3,778,785 - 3,778,785



Total non-financial assets 32,498

15,553,687

Liabilities



Other payables and accruals - - - (186) (186)Total financial liabilities - - - 22,101 22,101

101

DMP


(b) Fair value


The Fund held the following financial instruments carried at fair value on the statement of

financial position as at the end of the period:


RM RM RM

7,093,263 - 7,093,263

- 3,607,860 3,607,860

7,093,263 3,607,860 10,701,123

8,054,030 - 8,054,030

- 3,606,970 3,606,970

8,054,030 3,606,970 11,661,000

As at 30 June 2015Financial assets at FVTPL- Quoted Shariah-compliant equities

AFS financial assets- Sukuk

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

Quoted Shariah-compliant equity instrumentsFair value is determined directly by reference to their published market bid price on BursaMalaysia at the reporting date.

Unquoted sukukThe published market prices for RM-denominated unquoted sukuk are based on BursaMalaysia at the reporting date.

The Fund uses the following level of fair value hierarchy for determining and disclosingthe fair value of financial instruments carried at fair value in the statement of financialposition:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within Level 1 that are observablefor the asset or liability either directly or indirectly

Level 3: Inputs for the asset or liability that are not based on observable market data

As at 30 June 2014Financial assets at FVTPL- Quoted Shariah-compliant equities

AFS financial assets- Sukuk

102

DMP


(b) Fair value (Contd.)

(ii) Financial instruments not carried at fair value


(i) Market Risk


Equity price risk is the adverse changes in the fair value of Shariah-compliant equities asa result of changes in the levels of Shariah-compliant equity indices and the value ofindividual Shariah-compliant shares. The equity price risk exposure arises from theFund's investments in quoted Shariah-compliant equity securities.

The Fund maintains investment portfolios in a variety of quoted and unquoted financial instrumentsas dictated by its Deed and investment management strategy.

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

The Fund’s objective in managing risk is the creation and protection of unitholders’ value. Risk isinherent in the Fund’s activities, but it is managed through a process of ongoing identification,measurement and monitoring of risks. Financial risk management is also carried out through soundinternal control systems and adherence to the investment restrictions as stipulated in the Trust Deed,the Securities Commission’s Guidelines on Unit Trust Funds and the Capital Markets and ServiceAct, 2007.

The Fund’s principal exposure to market risk arises primarily due to changes ordevelopments in the market environment and typically includes changes in regulations,politics and the economy of the country. Market risk is also influenced by global economicsand geopolitical developments. The Fund seeks to diversify away some of this risk byinvesting into different sectors to mitigate risk exposure to any single asset class.

The Fund's market risk is affected primarily due to changes in market prices and interestrates.

Financial instruments not carried at fair value comprise of financial assets and financialliabilities classified as receivables and financial liabilities at amortised cost respectively.The carrying amount of these financial instruments at the end of the financial yearapproximated their fair values due to their short term to maturity.

103

DMP



(a) Equity Price Risk (Contd.)

Effect on profit

or loss and equity

Change in Shariah-compliant Increase/(Decrease)

equity price (%) RM

30/06/2015+6/-6 425,596 /(425,596)

30/06/2014+6/-6 483,242 /(483,242)


Effect on profit

or loss and equity

Increase/(Decrease)

Change In Basis Points* RM

30/06/2015+25/-25 4,952/ (4,952)

30/06/2014+25/-25 4,815/ (4,815)

* The assumed movement in basis points for interest rate sensitivity analysis is

based on the currently observable market environment

The risk refers to the effect of interest rate changes on the valuation for sukuk andIslamic deposits with financial institutions. In the event of rising interest rates, the returnon Islamic deposits with financial institutions will rise while valuation for sukuk willdecrease and vice versa, thus affecting the net asset value of the Fund. This risk will beminimized via the management of the duration structure of the portfolio of sukuk andIslamic deposits with financial institutions.

Interest rate is a general economic indicator that will have an impact on the managementof fund regardless of whether it is a Shariah-compliant fund or otherwise. It does not inany way suggest that this fund will invest in conventional financial instruments. Allinvestments carried out for this fund are in accordance with requirements of the Shariah.

The following table demonstrates the sensitivity of the profit or loss and equity of theFund to a reasonably possible change in interest rates, with all other variables heldconstant:

The table below summarises the effect of sensitivity from the Fund's underlyinginvestments in quoted Shariah-compliant equities on the profit or loss and equity of theFund due to possible changes in Shariah-compliant equity prices, with all other variablesheld constant:

104

DMP


(ii) Credit Risk


1 month - Above

30 June 2015 3 months 3 months Total

RM RM RM

Financial Assets:

Financial assets at FVTPL 7,093,263 - 7,093,263

AFS financial assets 3,607,860 3,607,860

Islamic deposits 4,182,151 - 4,182,151

with financial institutions

Other assets 157,519 - 157,519

Total undiscounted financial

assets: 11,432,933 3,607,860 15,040,793

Non-Financial assets

Tax Recoverable - 267 267

Total Assets 11,432,933 3,608,127 15,041,060

Financial Liabilities

Other liabilities 22,046 - 22,046

Total undiscounted financial liabilities 22,046 22,046

Unitholders NAV 15,019,014 - 15,019,014Liquidity gap (3,608,127) 3,608,127

This risk occurs in thinly traded or illiquid Shariah-compliant securities. Should the Fundneeds to sell a relatively large amount of such securities, the act itself may significantlydepress the selling price. As the fund is exposed to daily redemption of units, the risk isminimised by placing a prudent level of funds in short term Islamic deposits and by investingin Shariah-compliant stocks whose liquidity is adjudged to commensurate with the expectedexposure level of the Fund.

The following table summarises the maturity profile of the Fund's financial liabilities and thecorresponding assets available to meet commitments associated with those financial liabilitiesand redemption by unitholders.

The Fund 's principal exposure to credit risk arises primarily due to changes in the financialconditions of companies issuing sukuk, which may affect their creditworthiness. This in turnmay lead to default in the payment of principal and profit . Such events can lead to loss ofcapital or delayed or reduced income for the Fund resulting in a reduction in the Fund's assetvalue and thus unit price. This risk is mitigated by vigorous credit analysis and diversificationof the sukuk portfolio of the Fund.

As at the date of Financial Position, 30 June 2015, the fund only invested in a relatively stablesukuk issued by the Government of Malaysia.

105

DMP



30 June 2014 1 month - Above

3 months 3 months

Financial Assets: RM RM


AFS financial assets 3,606,970 3,606,970

Islamic deposits 3,778,785 - 3,778,785

with financial institutions

Other assets 81,404 - 81,404

Total undiscounted financial

assets: 11,914,219 3,606,970 15,521,189

Non-Financial assets - 32,498 32,498

Tax Recoverable 11,914,219 3,639,468 15,553,687

Total Assets



Total undiscounted financial liabilities 22,101 22,101

Unitholders NAV 15,531,586 - 15,531,586Liquidity gap (3,639,468) 3,639,468



The Fund is exposed to the individual risk of the respective companies issuing Shariah-compliant securities which includes changes to the business performance of the compnay,consumer tastes and demand, lawsuits and management practices. This is minimised throughthe well diversified nature of the Fund.

The Fund's exposure to Shariah-compliant securities issued by any issuer is limited to notmore than a certain percentage of its net asset value. Under such restriction, the risk exposureto the securities of any issuer is minimised.

106

DMP


(vi) Reclassification of Shariah Status Risk

(vii) Capital Management

This risk refers to the risk that the currently held Shariah-compliant securities in the portfolioof Shariah-compliant funds may be reclassified to be Shariah non-compliant upon review ofthe securities by the Shariah Advisory Council of Securities Commission performed twiceyearly. If this occurs, the Manager will take the necessary steps to dispose of such securities.

The capital is represented by unitholders' subscription to the Fund. The amount of capital canchange significantly on a daily basis as the Fund is subject to daily redemption andsubscription at the discretion of unitholders. The Manager manages the Fund's capital with theobjective of maximising unitholders' value, while maintaining sufficient liquidity to meetunitholder's redemption as explained in Note 22 (iii) above.

107


PIF

[email protected]

108Your Need

is our Focus

21 August 2015


PIF

[email protected]

109Your Need

is our Focus

STATEMENT BY MANAGER TO THE UNITHOLDERS OFPHEIM INCOME FUND

In the opinion of the Manager, the accompanying unaudited financial statements ofPheim Income Fund are drawn up in accordance with Malaysian Financial ReportingStandards, International Financial Reporting Standards and the Securities Commission'sGuidelines on Unit Trust Funds in Malaysia so as to give the true and fair view of theunaudited financial position of Pheim Income Fund as at 30 June 2015 and of its results,changes in net assets value and cash flows for the period then ended.





PIF

PHEIM INCOME FUND



Note 30.06.2015 30.06.2014

RM RM

INVESTMENT INCOME


Interest Income :


- available-for-sale ("AFS") financial assets 172,162 84,995


profit or loss ("FVTPL") 8 446,345 149,468

Amortisation of premiums, net of accretion of

discounts on AFS financial assets 9 (3,017) (3,864)


692,188 378,317

EXPENSES

Manager's fee 4 77,010 70,655





101,301 92,250


Tax expense 6 - -Net income for the period 590,887 286,067

Other comprehensive incomeNet loss on change in fair value of AFS financial assets 23,934 (9,356)


Net income after tax is made up of the following:


Net unrealised gain 405,610 120,383590,887 286,067

Distribution for the year :

Net distribution 11 271,329 879,526

Net distribution per unit (sen) 11 2 7

Gross distribution per unit (sen) 11 2 7


110

PIF

PHEIM INCOME FUND


Note 30.06.2015 30.06.2014

RM RM

ASSETS

Investments 7 11,263,279 9,353,081





Cash at bank 26,942 20,779

TOTAL ASSETS 13,961,636 14,175,274

LIABILITIES





EQUITY


Retained earnings/(Accumulated losses) 303,170 (94,505)

Available-for-sale reserve 5,401 (10,970)

TOTAL EQUITY 12 13,938,825 14,153,479





111

PIF

PHEIM INCOME FUND





Capital earnings/ reserves Equity

(Accumulated

losses)

Note 12(a) Note 12(b) Note 12(d)

and 12(c)

RM RM RM RM

At 1 January 2014 13,978,198 498,954 (1,614) 14,475,538


the period 286,067 (9,356) 276,711

Creation of units 1,129,451 1,129,451

Cancellation of units (815,535) (815,535)

Distribution equalisation (33,160) (33,160)

Distribution (879,526) (879,526)Balance at 30 June 2014 14,258,954 (94,505) (10,970) 14,153,479

At 1 January 2015 16,779,408 (16,388) (18,533) 16,744,487

Effects of adopting FRS 139 - - - -

16,779,408 (16,388) (18,533) 16,744,487


the period - 590,887 23,934 614,821


Cancellations of units (3,411,301) - - (3,411,301)

Distribution equalisation (55,757) - - (55,757)

Distribution for the period - (271,329) - (271,329)Balance at 30 June 2015 13,630,254 303,170 5,401 13,938,825

112

PIF

PHEIM INCOME FUND



01.01.2015 01.01.2014

to to

30.06.2015 30.06.2014

RM RM





Proceeds received from bonds on maturity - 2,800,000


Interest received 228,588 184,124




Income distribution paid (951) (3,328)

Net cash generated/(used in) from operating

and investing activities 307,860 (2,314,334)


Proceeds from creation of units 33,462 242,357

Payment for cancellation of units (3,468,764) (858,118)

Net cash used in from financing activities (3,435,302) (615,761)

NET DECREASE IN CASH


CASH AND CASH EQUIVALENTS AT THE

BEGINNING OF THE YEAR 5,762,028 7,617,941



Deposits with licensed financial institutions (Note 10) 2,536,935 4,667,067

Cash at bank 26,942 20,7792,563,877 4,687,846


113

PIF

PHEIM INCOME FUND







The unaudited financial statements of the Fund have been prepared in accordance with Malaysian FinancialReporting Standards ("MFRSs"), International Financial Reporting Standards ("IFRSs") and the SecuritiesCommission's Guidelines on Unit Trust Funds in Malaysia.

Pheim Income Fund ("the Fund") was established pursuant to a Master Deed dated 11 January 2002 as amendedmodified and supplemented by a Supplemental Master Deed dated 3 November 2008 made between HSBCTrustee (Malaysia) Berhad and Pheim Unit Trusts Berhad ("the Manager"), a second Supplemental MasterDeed dated 29 April 2013 and Third Supplemental Master Deed dated 30 April 2015 made between theManager and Maybank Trustees Berhad ("the Trustee").

The principal activity of the Fund is to invest in "Permitted Investments" as defined under Part 7 of the MasterDeed, which includes investments in equities and fixed income securities traded on Bursa Malaysia or any othermarkets considered as Eligible Market. The Fund commenced operations on 28 January 2002 and will continueits operations until terminated by the Trustee as provided under Part 12 of the Master Deed.

The Manager is a public limited company incorporated in Malaysia. It is a wholly owned subsidiary of thePheim Asset Management Sdn Bhd, a private company incorporated in Malaysia. Its principal activity is themanagement of unit trust funds. Pheim Asset Management Sdn. Bhd. has been appointed by the Manager as theExternal Investment Manager of the Fund with responsibility for the provision of investment managementservices to the Fund.

The principal place of business of the Fund is located at 7th Floor, Menara Hap Seng, Jalan P. Ramlee, 50250Kuala Lumpur.


The unaudited financial statements were authorised for issue by the Board of Directors of the Manager inaccordance with the resolution of the directors on 21 August 2015.

The unaudited financial statements of the Fund is prepared under the historical cost convention unlessotherwise indicated in the summary of significant accounting policies.

The accounting policies applied by the Fund is consistent with those applied in the previous financial yearother than the application of the new and revised MFRSs, Issues Committee ("IC") Interpretations andamendments to MFRSs and IC Interpretations as disclosed in Note 2.3 below.

114

PIF


2.3 Application of Amendments to MFRSs and new IC Interpretations




(b) Amendments to MFRS 139 - Novation of Deivatives and Continuation of Hedge Accounting



Amendments to MFRS 119, Defined Benefit Plans : Employee Contributions



During the financial year, the Fund has applied the following amendments to MFRSs issued by theMalaysian Accounting Standars Board ("MASB") which are effective for acountting period beginning onor after 1 January 2014 :-

The Amendments clarify the requirements relating to the offset of financial assets and financialliabilities. Specifically, the Amendments clarify the meaning of 'currently has a legally enforceableright of set-off' and 'simultaneous realisation and settlemet'.

The Amendments have been applied retrospectively and the applicayion has no impact on thedisclosures or the amounts recognised in the Fund's financial statements.

The Amendments introduce a narrow-scope exception to the requirement for the discontinuation ofhedge accounting in MFRS 139, Financial Instruments : Recognition and Measurement.Specifically, the Amendments provide relief from discontinuing hedge accounting when a novationof a derivative as a hedging instrument meets certain criteria.

The Amendments have been applied retrospectively and the application has no ompact on thedisclosures or them amounts recognised in the Fund's financial statements.

The Fund has not early adopted the following new MFRSs and amendments to MFRSs that have beenissued by the MASB but are not yet effective :-

115

PIF




MFRS 14, Regulatory Deferral Accounts

Amendments to MFRS 10, MFRS 12 and MFRS 128 - Investment Entities: Applying the Consideration Exception

Amendments to MFRS 10 and MFRS 128 - Sale or Contribution of Assets between an Investor and its Associate

or Joint Venture



Amendments to MFRS 116 and MFRS 138 - Clarification of Acceptable Methods of Depreciation and

Amortisation









The Fund will apply the above new MFRSs and amendments to MFRSs that are applicable once theybecome effective. The main features of the new applicable standards and amendments to standrds aresummarised below:-

The Standard replaces earlier versions of MFRS 9 and introduces a pcakage of improvements whichincludes a classification and measurement model, a single forward-looking 'expected loss' impairmentmodel and a substantially-reformed approach to hedge accounting.

116

PIF



MFRS 9, Financial Instruments (IFRS 9 issued in July 2014) (Cont'd)


• Under MFRS 9, all recognised financial assets are required to be subsequently measured at eitheramortised cost, fair value through other comprehensive income ("FVTOCI") or fair value through profit orloss ("FVTPL") on the basis of both an entity's business model for managing the financial assets and thecontractual cash flow characteristics fo the financial assets. These requirements improve and simplify theapproach for classification and measurement of financial assets as the numerous categories of financialassets under MFRS 139 had been replaced.

• Most of the requirements in MFRS 139 for classification and measurment of financial liabilities werecarried forward unchanged to MFRS 9, except fro the measurement of financial liabilities designated asat FVTPL. Under MFRS 139, the entire amount of the change in the fair value of the financial liabilitydesignated as FVTPL is presented in profit or loss. However, MFRS 9 requires that the amount of changein the fair value of the financial liability that is attributable to changes in the credit risk of that liability ispresented in other comprehensive income, unless the recognition of the effects of changes in theliability's own credit risk in other comprehensive incoem would create or enlarge an accounting mismatchin profit or loss. Changes in fair value attributable to a financial liability's credit risk are not subsequentlyreclassified to profit or loss.

• In relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model, asopposed to an incurred credit loss model under MFRS 139. Under MFRS 9, it is no longer necessary for acredit event to have occured before credit losses are recognised. Instead, an entity always accounts forexpected credit losses and changes in those expected credit losses at each reporting date to reflect changesin credit risk since initial recognition.

• In relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model, asopposed to an incurred credit loss model under MFRS 139. Under MFRS 9, it is no longer necessary for acredit event to have occured before credit losses are recognised. Instead, an entity always accounts forexpected credit losses and changes in those expected credit losses at each reporting date to reflect changesin credit risk since initial recognition.

The initial application of MFRS 9 in the future may have an impact on the financial statements of theFund. However, it is not practicable to provide a reasonabel setimate of the effect utnil a detailed reviewhas been completed. The initial application of othe new MFRSs and amendments to MFRSs is notexpected to have any significant impact on the financial statements of the Fund.

117

PIF





The accounting policies set out below have been applied consistently to the periods, presented in these financialstatements and have been applied consistently by the Fund, unless otherwise stated.

Financial assets are recognised in the statement of financial position when, and only when, the Fundbecomes a party to the contractual provisions of the financial instruments. Regular way of purchase andsale of investments in financial instruments are recognised on trade dates. When financial assets arerecognised initially, they are measured at fair value, plus attributable transaction cost, for investment not atfair value through profit or loss.

The Fund determines the classification of its financial assets at the initial recognition, and the categoriesinclude financial assets at fair value through profit or loss, available-for-sale financial assets and loans andreceivables.

Financial assets are classified as financial assets at FVTPL if they are held for trading or aredesignated as such by the Manager upon initial recognition. Financial assets held for trading includesecurities and fixed income securities acquired principally for the purpose of selling them in nearterm.

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value at the date ofthe statement of financial position. Changes in the fair value of those financial instruments arerecorded in "Net gain or loss on financial assets at FVTPL". Interest earned and dividend revenueelements of such instruments are recorded separately in "Interest income" and "Dividend income",respectively. Foreign exchange differences on financial assets at FVTPL are not recognisedseparately in profit or loss but included in net gains or net losses on changes in fair value offinancial assets at FVTPL.

AFS financial assets are financial assets that are designated as available for sale or are not classifiedas financial assets at FVTPL or loans and receivables.

After initial recognition, AFS financial assets are measured at fair value. Gains or losses fromchanges in fair value of the AFS financial assets are recognised in other comprehensive income,except that impairment losses, foreign exchange gains and losses on monetary instruments, dividendincome and interest calculated using effective interest method are recognised in profit or loss.

The cumulative gain or loss previously recognised in other comprehensive income is reclassifiedfrom equity to profit or loss as a reclassification adjustment when the financial asset isderecognised. Interest income calculated using the effective interest method is recognised in profitor loss. Dividends on an AFS equity instrument are recognised in profit or loss when the Fund'sright to receive payment is established.

Fair value is the amount for which an asset could be exchanged, or liability settled, betweenknowledgeable, willing parties in an arm's length transaction. The fair value for financialinstruments traded in active markets at the reporting date is based on their quoted price or bindingdealer price quotations, without deduction for transaction costs.

A financial asset is derecognised when the asset is disposed and the contractual right to receive cashflows from the asset has expired. On derecognition of a financial asset in its entirety, the differencebetween the carrying amount and the sum of the consideration received and any cumulative gain orloss that had been recognised in other comprehensive income is recognised in profit or loss.

118

PIF



(b) Available-for-sale ("AFS") financial assets (contd.)

(c) Loans and receivables



Regular way purchases or sales are purchases or sales of financial assets that require delivery ofassets within the period generally established by regulation or convention in the market placeconcerned. All regular way purchases and sales of financial assets are recognised or derecognised ontrade date, i.e. the date that the Fund commits to purchase or sell the asset.

Financial assets with fixed or determinable payments that are not quoted in an active market areclassified as loans and receivables. The Fund includes short term receivables such as balances duefrom broker, Manager and other receivables in the classification. Loans and receivables arerecognised initially at fair value including transaction costs.

Subsequent to initial recognition, loans and receivables are measured at amortised cost usingeffective interest method. Gains and losses are recognised in profit or loss when the loans andreceivables are derecognised or impaired, and through the amortisation process.

The Fund assesses at each reporting date whether there is any objective evidence that a financial asset isimpaired.

Significant or prolonged decline in fair value below cost, weaken fundamental, significant financialdifficulties of the issuer or obligor, and the disappearance of an active trading market areconsiderations to determine whether there is objective evidence that investment securities classifiedas AFS financial assets are impaired. At end of each financial year, the Manager would receiveimpairment proposal from the Fund's external investment manager, if any financial assets of theFund, in their professional opinion, warrant an impairment exercise.

If an AFS asset is impaired, an amount comprising the difference between its cost (net of anyprincipal payment and amortisation) and its current fair value, less any impairment loss previouslyrecognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on AFS equity investments are not reversed in profit or loss in the subsequentperiod. Increase in fair value, if any, subsequent to impairment loss is recognised in othercomprehensive income. For AFS debt investments, impairment losses are subsequently reversed inprofit or loss, up to the amount previously recognised as impairment loss, if an increase in the fairvalue of the investment can be objectively related to an event occurring after the recognition of theimpairment loss in profit or loss.

119

PIF






To determine whether there is objective evidence that an impairment loss on financial assets hasbeen incurred, the Fund considers factors such as the probability of insolvency or significantfinancial difficulties of the debtor and default or significant delay in payments.

If any such evidence exists, the amount of impairment loss is measured as the difference betweenthe asset's carrying amount and the present value of estimated future cash flows discounted at thefinancial asset's original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for allfinancial assets with the exception of trade receivables, where the amount is reduced through theuse of an allowance account. When a trade receivable becomes uncollectible, it is written off againstthe allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can berelated objectively to an event occurring after the impairment was recognised, the previouslyrecognised impairment loss is reversed to the extent that the carrying amount of the asset does notexceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

Unrealised gain and losses comprise changes in fair value of financial instruments for the period fromreversal of prior period's unrealised gain and losses for financial instruments which were realised (i.e. sold,redeemed or matured) during the reporting period.

Realised gains and losses on disposals of financial instruments classified as part of "at fair value throughprofit or loss" are calculated using weighted average method. They represent the difference between aninstrument's initial carrying amount and disposal amount, or cash payment or receipts made of derivativecontracts (excluding payments or receipts on collateral margin accounts for such investments).

Financial liabilities are classified according to the substance of the contractual arrangements entered intoand the definition of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial positionwhen, only when, the Fund becomes a party to the contractual provisions of the financial instrument.Financial liabilities are classified as other financial liabilities.

The Fund's financial liabilities which include trade and other payables are recognised initially at fair valueplus directly attributable transaction costs and subsequently measured at the amortised cost using effectiveinterest method.

A financial liability is derecognised when the obligation under the liability is extinguished. Gains andlosses are recognised in profit or loss when the liabilities are derecognised, and through the amortisationprocess.

120

PIF






The financial statements of the Fund are measured using the currency of the primary economicenvironment in which the Fund operates ("the functional currency"). The financial statements are presentedin Ringgit Malaysia (RM), which is also the Fund's functional currency.

In preparing the financial statements, transactions in currencies other than the Fund's functional currency(foreign currencies) are recorded in the functional currency using the exchange rates prevailing at the datesof the transactions. At the end of each reporting period, foreign currency monetary assets and liabilities aretranslated at exchange rates prevailing at the end of the reporting period. Non-monetary items that aremeasured at fair value in a foreign currency are translated using exchange rates at the date when the fairvalue was determined.

Exchange differences arising from the settlement of foreign currency transactions and from the translationof foreign currency monetary assets and liabilities are recognised in profit or loss.

Exchange differences arising from the translation of non-monetary items carried at fair value are includedin profit or loss for the period except for the differences arising on the translation of non-monetary items inrespect of which gains or losses are recognised directly in equity. Exchange differences arising from suchnon-monetary items are recognised directly to equity.

The unitholders' contributions to the Fund meet the definition of puttable instruments classified as equityinstruments under MFRS 132.

Distribution equalisation represents the average distributable amount included in the creation andcancellation prices of units. This amount is either refunded to unitholders by way of distribution and/oradjusted accordingly when units are cancelled.

Income distributions are at the discretion of the Manager. Income distribution to the Fund's unitholders isaccounted for as a deduction from realised reserves except where distribution is sourced out of distributionequalisation which is accounted for as deduction from unitholders' capital.


121

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3.10 Income Tax



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


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

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to thetax authorities. The tax rates and tax laws used to compute the amount are those that are enacted orsubstantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognisedoutside profit or loss, either in other comprehensive income or directly in equity.


For management purposes, the Fund is managed by 2 main portfolios, namely (1) equity securities and (2)fixed income instruments. Each segment engages in separate business activities and the operating resultsare regularly reviewed by the Manager, External Investment Manager and the Fund's InvestmentCommittee. The External Investment Manager and the Fund Investment Committee jointly assumes therole of chief operation decision maker, for performance assessment purposes and to make decision aboutresources allocated to each investment segment.

The preparation of financial statements in accordance with MFRS and IFRS requires the use of certainaccounting estimates and exercise of judgements. Estimates and judgements are continually evaluated andare based on past experience, reasonable expectations of future events and other factors.

No major judgements have been made by the Manager in applying the Fund's accounting policies. Thereare no key assumptions concerning the future and other key sources of estimation uncertainty at thereporting date, that have significant risk of causing material adjustment to the carrying amounts of assetsand liabilities within next year.

122

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4. MANAGER'S FEE

5. TRUSTEE' S FEE

6. TAXATION 30.06.2015 30.06.2014

RM RM

Current year Malaysian tax - -Overprovision in prior year - -

Malaysian tax expense based on - -

results for the year

30.06.2015 30.06.2014

RM RM


Taxation at Malaysian statutory rate of 25% (2013: 25%) 147,722 71,517

Tax effects of:


Expenses not deductible for tax purposes 5,058 4,324Restriction on tax deductible expenses for unit trust funds 20,267 18,738


The Manager is entitled to an annual management fee of 1.0% p.a. of net asset value of the Fund (beforededucting Manager's and Trustee's fees for the day) calculated and accrued on a daily basis.

The Trustee is entitled to a fee of 0.07% p.a. based on net asset value of the Fund (before deducting Manager'sand Trustee's fees for the day) calculated and accrued on a daily basis subject to a minimum of RM18,000 p.a.

Income tax is calculated at Malaysian statutory tax rate of 25% (2014: 25%) of the estimated assessable netincome for the year.

The tax charge for the period is in relation to the taxable income earned by the Fund after deducting allowableexpenses. In accordance with Schedule 6 of Income Tax Act 1967, interest income earned by the Fund isexempted from tax.

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

123

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7. INVESTMENTS

Financial assets at fair value through profit or loss 30.06.2015 30.06.2014

(Note 8) RM RM

Quoted Equities

- in Malaysia 1,726,028 1,266,640

- outside Malaysia 822,631 1,382,091

2,548,659 2,648,731

Available-for-sale financial assets (Note 9)

Unquoted fixed income

securities in Malaysia 8,714,620 6,704,350Total investments 11,263,279 9,353,081


30.06.2015 30.06.2014

RM RM

Financial assets at FVTPL:Quoted equity investments 2,548,659 2,648,731


Realised gain/(loss) on disposals 40,735 (11,882)

Unrealised gain on changes in fair values 405,610 161,350446,345 149,468

The currency exposure profile of financial assets at

FVTPL is as follows :

- Ringgit Malaysia 1,726,028 1,266,640

- Hong Kong Dollar 495,177 779,751

- Singapore Dollar 287,819 319,275

- Phillipines Peso - 173,135

- Indonesia Rupiah 39,635 109,9302,548,659 2,648,731

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RM RM NAV

QUOTED EQUITY INVESTMENTS

- IN MALAYSIA

Main Market

Constructions


Consumer Products

Padini Holdings Bhd 70,000 138,987 92,400 0.66Sasbadi Holdings Bhd 60,000 111,997 141,000 1.01Tek Seng Holdings Bhd 70,000 38,045 36,050 0.26

200,000 289,029 269,450 1.93

Industrial Products

Can-One Bhd 30,000 101,056 75,300 0.54Evergreen Fibreboard Bhd 240,000 227,176 321,600 2.31Jaya Tiasa Holdings Bhd 66,000 146,842 99,660 0.71Kian Joo Can Factory Bhd 125,000 395,613 393,750 2.82Malaysia Steel Works KL Bhd 40,000 40,914 24,800 0.18

501,000 911,601 915,110 6.56

Properties

Land & General Bhd 102,000 67,560 43,860 0.31Metro Kajang Holdings Bhd 57,500 170,165 122,475 0.88Sentoria Group Bhd 40,000 46,163 41,200 0.30

199,500 283,888 207,535 1.49

Technology

Inari Ametron Bhd 22,000 75,378 71,500 0.51

Trading/Services

Berjaya Corp Bhd 148,000 73,743 59,940 0.43

Berjaya Auto Bhd 40,600 96,079 108,808 0.78


255,600 215,515 205,933 1.48

TOTAL QUOTED

EQUITY INVESTMENTS- IN MALAYSIA 1,203,100 1,824,379 1,726,028 12.38

125

PIF



RM RM NAV

QUOTED EQUITY INVESTMENTS

- OUTSIDE MALAYSIA

Hong Kong Stock Exchange

("HKSE")

Agricultural Bank of China 14,000 28,586 28,468 0.20

China Citic Bank 9,000 28,896 27,057 0.19

China Huishan Dairy Holdings Co.Ltd 82,000 84,597 70,207 0.50

Consun Pharmaceutical Group 12,000 34,692 32,224 0.23

Goldpac Group Ltd 30,000 83,526 71,803 0.52

Red Star Macaline Group Corp Ltd 10,000 65,016 61,782 0.44

Tongda Group Holdings 210,000 93,643 152,216 1.09

Xinchen China Power Holdings 35,000 57,827 51,420 0.37

402,000 476,783 495,177 3.54

Jakarta Stock Exchange

PP Property TBK PT 750,000 40,500 39,635 0.28

Singapore Stock Exchange

("SGX")

Viva Industrial Trust 130,000 290,388 287,819 2.06

TOTAL QUOTED

EQUITY INVESTMENTS

- OUTSIDE MALAYSIA 1,282,000 807,671 822,631 5.88

TOTAL QUOTED EQUITIES 2,485,100 2,632,050 2,548,659 18.26


EXCESS OF FAIR VALUEOVER COST (83,391)

126

PIF

9. AFS FINANCIAL ASSETS

30.06.2015 30.06.2014

RM RM

Unquoted fixed income securities 8,714,620 6,704,350

Accretion of discounts, net of amortisationof premiums of AFS financial assets (3,017) (3,864)

Unrealised gain on changes in fair values 5,401 16,557

AFS financial assets as at 30 June 2015 are as detailed below:

Nominal

Name of Counter Amount Cost* Fair value % of

RM RM NAV

UNQUOTED FIXED INCOME SECURITIES

SME Bank IMTN -3/17 2,700,000 2,700,000 2,698,650 19.36

Malaysian Government Securities - 10/15 1,300,000 1,300,684 1,300,780 9.33

Poh Kong IMTN 10/17 2,700,000 2,708,535 2,709,990 19.44

Sabah 4.275%- 12/19 2,000,000 2,000,000 2,005,200 14.39

8,700,000 8,709,219 8,714,620 62.52

EXCESS OF FAIR VALUEOVER COST 5,401

* Cost of fixed income security includes accretion of discount and/or amortisation of premium.


30.06.2015 30.06.2014

RM RM


Average

remaining

WAEIR maturities

30.06.2015 30.06.2014 30.06.2015 30.06.2014

% % Days Days

Licensed investment banks 3.20 2.95 5 7

The weighted average effective interest rate ("WAEIR") per annum and the average remaining maturities ofdeposits and placement are as follows:

127

PIF


Distribution declared and paid on 27 March 2015 was 2.00 sen net per unit.

Distribution to unitholders are from the following sources:

2015 2014RM RM

Dividend Income 5,512 8,145

Interest Income 106,655 103,605

Net realised gain from sale of investment (47,145) (1,116)

Net realised loss on foreign exchange - -

Net accretion of discount on corporate bond (1,278) (2,453)

Other Income (42,632) -

21,112 108,180

Less:

Expenses 42,677 54,624

Taxation - -

Current year's realised income (21,565) 53,557

Distribution out of previous year's realised reserves 292,894 825,969Distribution for the year 271,329 879,526

Unit in circulation at book closing date 13,566,447 12,564,660

Gross distribution per unit (sen) 2.0 7.0

Net distribution per unit (sen) 2.0 7.0Date of distribution 27.03.2015 29.04.2014


Note 30.06.2015 30.06.2014

RM RM

Unitholder's capital (a) 13,630,254 14,258,954

Retained earnings/(Accumulated losses)

- Realised earnings/(losses) (b) 334,345 (104,304)

- Unrealised earnings (c) (31,175) 9,799

303,170 (94,505)

AFS reserve (d) 5,401 (10,970)Total equity / Net asset value 13,938,825 14,153,479


Number Number



of year 15,645,726 16,779,408 12,989,978 13,978,198

Add: Creation of units 281,402 317,904 1,040,860 1,129,451

Less: Cancellation of units (3,194,196) (3,411,301) (777,147) (815,535)

Distribution equalisation - (55,757) - (33,160)Balance at end of period 12,732,932 13,630,254 13,253,691 14,258,954

01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014

In accordance with Article 6.1.1 of the Deed and Securities Commission's approval letter dated 14 August 2006,the maximum number of units that can be issued for circulation is 100,000,000 units. As at 30 June 2015, thenumber not yet issued is 87,267,068 units (30 June 2014: 86,746,309).

128

PIF



30.06.2015 30.06.2014

RM RM

Balance at the beginning of period 420,328 650,443

Net income after taxation 590,887 286,067

Net unrealised gain attributable to investments

held transferred to unrealised reserve (405,610) (161,350)

Net unrealised foreign exchange loss

attributable to foreign currency monetary

item transferred to unrealised reserve 69 62

Distribution out of realised reserve (271,329) (879,526)Balance at the end of period 334,345 (104,304)


30.06.2015 30.06.2014

RM RM

Balance at the beginning of period (436,716) (151,489)

Net unrealised gain attributable to investment

held transferred from realised reserve 405,610 161,350

Net unrealised foreign exchange (loss)/gain


item transferred from realised reserve (69) (62)Balance at the end of period (31,175) 9,799

129

PIF




to unitholders for





to unitholders per




units NAV units NAV

RM RM

Directors of the Manager # 1,853,512 2,029,052 514,232 549,143

# The Directors of the Manager are legal and beneficial owners of the units.

30.06.2015 30.06.2014

30 June 2015 30 June 2014


Quoted financial assets in the financial statements have been valued at the bid prices at the close of business inaccordance with the provision of MFRS 139. For the purpose of calculation of net asset value attributable tounitholders per unit for the issuance and redemption of units in accrodance with the Deed, quoted financialassets are stated at the last done market price.

A reconciliation of net asset value attributable to unitholders for issuing/redeeming units and the net asset valueattributable to unitholders per the financial statements is as follows:-

130

PIF


Trading % of total Brokerage % of total

value trading fees brokerage

RM value RM fees

MIDF Amanah Investment Bank Bhd 6,046,598 48.42 - -

Affin Hwang Capital Investment Bank 2,797,905 22.41 532 4.01

CIMB-GK Securities Ltd - Hong Kong 776,412 6.22 2,737 20.63

DBS Vicker Securities Pte Ltd - 538,962 4.32 1,358 10.24

Hong Kong

Maybank Investment Bank Bhd 466,009 3.73 3,436 25.90

Sdn BhdOriental Patron Securities Limited 289,452 2.32 725 5.46

Hong Kong

RHB OSK Securities Hong Kong Limited 266,581 2.13 589 4.44

Hong Leong Investment Bank 219,032 1.75 491 3.70

CIMB-GK Securities Ltd - Singapore 120,518 0.96 302 2.28

RHB Investment Bank Bhd 120,136 0.96 269 2.03

Others 846,192 6.78 2,828 21.3112,487,797 100.00 13,268 100.00


30.06.2015 30.06.2014


17. PORTFOLIO TURNOVER

30.06.2015 30.06.2014


This is the ratio of the sum of the fees (inclusive of the manager's, trustee's, audit and other professional fees)and other administrative expenses of the Fund to the average net asset value NAV of the Fund calculated on adaily basis.The average NAV of the Fund for the period ended 30 June 2015 was RM 15,056,764(2014:RM14,247,847)

This is the the ratio of the average of acquisitions and disposals of the Fund for the period to average NAV of theFund for the year calculated on daily basis.

Details of transactions with stockbroking companies and other investment banks for the period ended 30June 2015 are as follows:

131

PIF


The Manager, the appointed External Investment Manager and Investment Committee of the Fund areresponsible for allocating resources available to the Fund in accordance with the overall investment strategies asset out in the investment Guidelines of the Fund. The Fund is managed by two segments:

● A portfolio of equity instruments● A portfolio of fixed income portfolio, including debt securities and deposits with financial institutions.

The investment objective of each segment is to achieve consistent returns from the investments in each segmentwhile safeguarding capital by investing in diversified portfolios. There have been no changes in reportablesegments in the current financial period. The segment information provided is presented to the Manager, theappointed External Investment Manager and Investment Committee of the Fund.

01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014

Fixed Fixed

Equity income Equity Income

Portfolio Portfolio Total Portfolio Portfolio Total

RM RM RM RM RM RM


Interest Income - 227,583 227,583 - 189,016 189,016

Net gain on financial assets

at ("FVTPL") 446,345 - 446,345 149,468 - 149,468

Accretion of discount,net of

amortisation of premium -

AFS financial assets - (3,017) (3,017) - (3,864) (3,864)

Net realised (loss)/gain onforeign exchange (69) - (69) (62) - (62)

Total segment operating incomefor the period 467,622 224,566 692,190 193,165 185,152 378,318

Deposit with financial institutions 2,536,935 2,536,935 - 4,667,067 4,667,067


AFS financial assets - 8,714,620 8,714,620 6,704,350 6,704,350Other assets 7,811 65,718 73,529 29,802 62,814 92,616



132

PIF


30.06.2015 30.06.2014

RM RM

Net reportable segment operating income 692,188 378,317

Expenses (101,301) (92,250)


Tax expense - -Net income for the year 590,887 286,067

30.06.2015 30.06.2014

RM RM



Amount due from broker 42,372 -Cash at bank 26,942 20,779




Other payables and accruals 8,138 8,241Amount due to Trustee 1,673 1,529




Expenses of the Fund are not considered part of the performance of any operating segment. The followingtable provides a reconciliation between reportable segment income and operating profits.

In addition, certain assets and liabilities are not considered to be part of the assets and liabilities of anindividual segment. The following table provides reconciliation between total reportable segment assets andliabilities and total assets and liabilities of the Fund.

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at either fair value orat amortised cost based on their respective classification. The significant accounting policies in Note 3describe how the classes of financial instruments are measured, and how income and expenses, includingfair value gains and losses are recognised. The following table analyses the financial assets and liabilitiesof the Fund in the statement of financial position, by the class of financial instrument to which they areassigned, and therefore by the measurement basis.

133

PIF



Financial

liabilities

Financial AFS at

assets at financial Loan and amortisedFVTPL assets receivables cost Total

RM RM RM RM RM

30 June 2015

Assets

Investments 2,548,659 8,714,620 - - 11,263,279


financial institutions - - 2,536,935 - 2,536,935Amount due from brokers 42,372 - - - 42,372




Liabilities


Other payables and accruals - - - 8,138 8,138Total financial liabilities - - - 22,811 22,811

30 June 2014

Assets

Investments 1,237,568 6,608,840 - - 7,846,408

Deposits with licensedfinancial institutions - - 5,303,688 - 5,303,688

Amount due from brokers 372,572 - - - 372,572




Liabilities


Other payables and accruals - - - 8,150 8,150Total financial liabilities - - - 20,752 20,752

134

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(b) Fair Value



RM RM RM

As at 30 June 2015

Financial assets as FVTPL

- Quoted Equities 2,548,659 - 2,548,659

AFS financial assets

-Fixed income securities - 8,714,620 8,714,620

2,548,659 8,714,620 11,263,279

As at 30 June 2014

Financial assets as FVTPL

- Quoted equities 2,648,731 - 2,648,731

AFS financial assets

-Fixed income securities - 6,704,350 6,704,350

2,648,731 6,704,350 9,353,081

The Fund’s financial assets at FVTPL and AFS financial assets are carried at fair value. The fairvalues of these financial assets were determined using prices in active markets for identical assets.

Quoted equity instrumentsFair value is determined directly by reference to their published market bid prices on the relevantstock exchanges at the reporting date.

Unquoted fixed income securitesThe published market prices for RM-denominated unquoted bonds are based on information providedby Bond Pricing Agency Malaysia Sdn Bhd.

The Fund uses the following level of fair value hierarchy for determining and disclosing the fairvalue of financial instruments carried at fair value in the statement of financial position :

Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2 : Inputs other than quoted prices included within Level 1 that are observable for the asset

or liability either directly or indirectly

Level 3 : Inputs for the asset or liability that are not based on observable market data

The Fund held the following financial instruments carried at fair value on the statement of financialposition as at the end of the period :

135

PIF


(b) Fair Value (Contd.)

(ii) Financial Instruments not carried at fair value


(i) Market Risk


The Fund maintains investment portfolios in a variety of quoted and unquoted financial instruments as dictatedby its Trust Deed and investment management strategy.

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

The Fund’s objective in managing risk is the creation and protection of unitholders’ value. Risk is inherent inthe Fund’s activities, but it is managed through a process of ongoing identification, measurement andmonitoring of risks. Financial risk management is also carried out through sound internal control systems andadherence to the investment restrictions as stipulated in the Trust Deed, the Securities Commission’s Guidelineson Unit Trust Funds and the Capital Markets and Service Act, 2007.

The Fund's principal exposure to market risk arises primarily due to changes or developments in the marketenvironment and typically includes changes in regulations, politics and the economy of the country.Market risk is also influenced by global economics and geopolitical developments. The Fund seeks todiversify away some of this risk by investing into different sectors to mitigate risk exposure to any singleasset class.

The Fund's market risk is affected primarily due to changes in market prices, interest rates and foreign

currency exchange rates.

Equity price risk is the adverse changes in the fair value of equities as a result of changes in thelevels of equity indices and the value of individual shares. The equity price risk exposure arises fromthe Fund's investments in quoted equity securities.

Financial instruments not carried at fair value comprise financial assets and financial liabilitiesclassified as loans and receivables and financial liabilities at amortised cost respectively. Thecarrying amount of these financial instruments at the end of the financial year approximated theirfair values due to their short term to maturity.

136

PIF



(a) Equity Price Risk (Contd.)

Effect on profit

or loss and equity

Change in equity price (%) Increase/(Decrease)

RM

30 June 2015+6/-6 152,920/ (158,924)

30 June 2014+6/-6 158,924/ (158,924)


Effect on profit

or loss and equity

Change In Basis Points* Increase/(Decrease)

RM

2014+25/-25 3,690/ (3,690)

2013+25/-25 4,656/ (4,656)

* The assumed movement in basis points for interest rate sensitivity analysis is based on the currently

observable market environment

This risk refers to the effect of interest rate changes on the market value of fixed income securitiesand deposits with financial institutions. In the event of rising interest rates, the return on depositswith financial institutions will rise while prices of fixed income securities will decrease and viceversa, thus affecting the net asset value of the Fund. This risk will be minimized via themanagement of the duration structure of the portfolio of fixed income securities and deposits withfinancial institutions.

The following table demonstrates the sensitivity of the profit or loss and equity of the Fund to areasonably possible change in interest rates, with all other variables held constant:

The table below summarises the effect of sensitivity from the Fund's underlying investments inquoted equities on the profit or loss and equity of the Fund due to possible changes in equity prices,with all other variables held constant:

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(c) Currency Risk

Effect on profit or loss

and equity

30 June 2015 30 June 2014

RM RM

Indonesian Rupiah 3,964 10,993

Phillipines Peso - 17,314

Hong Kong Dollar 49,518 77,975

Singapore Dollar 28,782 31,92882,263 138,210

(ii) Credit Risk

The Fund is exposed to currency risk primarily through its investment in overseas quoted equitiesand bank balances that are denominated in foreign currencies. The Fund's foreign currency exposureprofiles of it's investment in quoted equities has been disclosed under Note 8.

A 10% strenghtening or weakening of the RM againts the following foreign currencies as at the endof the period would have decreased or increased respectively the profit or loss and equity of the Fundby the amount shown below. The analysis assumes all other variables are held constant.

The Fund's principal exposure to credit risk arises primarily due to changes in the financial conditions ofcompanies issuing debt securities and stockbroking companies, which may affect their creditworthiness.This in turn may lead to default in the payment. Such events can lead to loss of capital or delayed orreduced income for the Fund resulting in a reduction in the Fund's asset value and thus unit price. This riskis mitigated by vigorous credit analyses and diversification of the bond portfolio of the Fund and to engagedifferent stockbroking companies with good reputation. Bond rating of the Fund's portfolio has beendisclosed in Note 9.

138

PIF



1 month - 3 Above 3

30 June 2015 months months Total

RM RM RM

Financial Assets



Deposits with financial institutions 2,536,935 - 2,536,935

Other assets 142,843 - 142,843

Total undiscounted financial asset: 5,228,437 8,714,620 13,943,057

Non-Financial Asset

Tax recoverable - 18,579 18,579

Total Assets 5,228,437 8,733,199 13,961,635



Total undiscounted

financial liabilities 22,811 - 22,811

Unitholder's NAV 13,938,825 - 13,938,825Liquidity gap (8,733,199) 8,733,199 -

This risk occurs in thinly traded or illiquid equity securities. Should the Fund need to sell a relatively largeamount of such securities, the act itself may significantly depress the selling price. As the Fund is exposedto daily redemption of units, the risk is minimized by placing a prudent level of funds in short-termdeposits and by investing in stocks whose liquidity is adjudged to be commensurate with the expectedexposure level of the Fund.

The following table summarises the maturity profile of the Fund's financial liabilities and thecorresponding assets available to meet commitments associated woth those financial liabilities andredemption by unitholders.

139

PIF



30 June 2014

Financial Assets




Other assets 113,395 - 113,395

Total undiscounted financial asset: 7,429,193 6,704,350 14,133,543

Non-Financial Asset


Total Assets 7,855,353 6,638,523 14,493,876



Total undiscounted

financial liabilities 21,794 - 21,794

Unitholder's NAV 14,153,479 - 14,153,479Liquidity gap (6,746,080) 6,746,080 -




The Fund is exposed to the individual risk of the respective companies issuing securities which includeschanges to the business performance of the company, consumer tastes and demand, lawsuits andmanagement practices. This risk is minimised through the well diversified nature of the Fund.

The Fund's exposure to securities issued by any issuer is limited to not more than a certain percentage of itsnet asset value. Under such restriction, the risk exposure to the securities of any issuer is minimised.

The capital is represented by unitholder's subscription to the Fund. The amount of capital can changesignificantly on a daily basis as the Fund is subject to a daily redemption and subscription at the discretionof unitholders. The Manager manages the Fund's capital with the objective of maximising unitholders'value, while maintaining sufficient liquidity to meet unitholders' redemption as explained in Note 20 (iii)above.

140


PAXJ

[email protected]

141YourNeedis our Focus

21 August 2015


PAXJ

[email protected]

142Your Need

is our Focus

STATEMENT BY MANAGER TO THE UNITHOLDERS OFPHEIM ASIA EX-JAPAN FUND

In the opinion of the Manager, the accompanying unaudited financial statements ofPheim Asia Ex-Japan Fund are drawn up in accordance with Malaysian FinancialReporting Standards, International Financial Reporting Standards and the SecuritiesCommission's Guidelines on Unit Trust Funds in Malaysia so as to give a true and fairview of the unaudited financial position of Pheim Asia Ex-Japan Fund as at 30 June2015 and of its results, changes in net asset value and cash flows for the period thenended.





PAXJ

PHEIM ASIA EX-JAPAN FUND



Note 30.06.2015 30.06.2014

RM RM

INVESTMENT INCOME


Interest Income:



profir or loss ("FVTPL") 8 1,688,456 520,641

Net realised loss on foreign exchange (396) (3,064)

1,907,202 950,194

EXPENDITURE

Manager's fee 4 175,830 205,199





224,118 242,651

Net income before tax 1,683,084 707,543

Tax expenses 6 - -Net income for the period 1,683,084 707,543

Total comprehensive income for the period 1,683,084 707,543



Net unrealised income 1,250,964 153,7261,683,084 707,543


143

PAXJ



Note 30.06.2015 30.06.2014

RM RM

ASSETS

Investments 7 16,795,967 24,970,897


Amount due from brokers 84,744 773,857


Tax recoverable - 33,660

Cash at bank 298,697 28,149

TOTAL ASSETS 19,344,723 27,461,010

LIABILITIES

Amount due to brokers - -



Other payables and accruals 6,547 (138)


EQUITY


Accumulated losses (1,921,074) (3,365,786)

Available for sale reserve - -

TOTAL EQUITY 12 19,075,489 27,288,420





144

PAXJ





Unitholders' Retained Total

Capital earnings/ Equity

(Accumulated

losses)

Note 12(a) Note 12(b)

and (c )

RM RM RM

At 1 January 2014 32,144,451 (4,073,329) 28,071,122


32,144,451 (4,073,329) 28,071,122


the period - 707,543 707,543

Creation of units 161,641 - 161,641

Cancellation of units (1,691,525) - (1,691,525)

Distribution equalisation 39,640 - 39,640Balance at 30 June 2014 30,654,207 (3,365,786) 27,288,422

At 1 January 2015 30,086,824 (3,604,158) 26,482,666


30,086,824 (3,604,158) 26,482,666

Total comprehensive loss for

the period - 1,683,084 1,683,084

Creation of units 86,298 - 86,298

Cancellations of units (10,255,520) - (10,255,520)

Distribution equalisation 1,078,961 - 1,078,961Balance at 30 June 2015 20,996,563 (1,921,074) 19,075,490

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01.01.2015 01.01.2014

to to

30.06.2015 30.06.2014

RM RM






Interest received from deposits with licensed 38,705 32,142

financial institutions and other debt securities - -

Tax refund - -




Net cash generated from/(used in) operating

and investing activities 3,712,603 (50,330)


Proceeds from creation of units 81,882 157,517

Payment for cancellation of units (8,935,345) (1,543,659)

Net cash used in from financing activities (8,853,463) (1,386,142)




BEGINNING OF THE YEAR 7,541,109 2,961,739



Deposits with licensed financial institutions

(Note 9) 2,101,552 1,497,118

Cash at bank 298,697 28,1492,400,249 1,525,267


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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)FOR THE PERIOD ENDED 30 JUNE 2015





The accounting policies applied by the Fund is consistent with those applied in the previous financialyear other than the application of the new and revised MFRSs, Issues Committee ("IC") Interpretationsand amendments to MFRSs and IC Interpretations as disclosed in Note 2.3 below.

Pheim Asia Ex-Japan Fund ("the Fund") was established pursuant to a Deed dated 12 September 2006 asamended by the Supplemental Deed dated 3 December 2008 and a Second Supplemental Master Deeddated 30 April 2015 made between Pheim Unit Trusts Berhad ("the Manager") and Maybank TrusteesBerhad ("the Trustee").

The principal activity of the Fund is to invest in "Permitted Investments" as defined under Part 7 of theDeed, which includes investments in equities and fixed income securities traded on Bursa Malaysia orany other markets considered as an Eligible Market. The Fund commenced operations on 30 June 2006and will continue its operations until terminated by Trustee as provided under Part 12 of the Deed.

The Manager is a public limited company incorporated in Malaysia. It is a wholly owned subsidiary ofthe Pheim Asset Management Sdn Bhd, a private company incorporated in Malaysia. Its principalactivity is the management of unit trust funds. Pheim Asset Management Sdn. Bhd. has been appointedby the Manager as the External Investment Manager of the Fund with responsibility for the provision ofinvestment management services to the Fund.

The principal place of business of the Fund is located at 7th Floor, Menara Hap Seng, Jalan P. Ramlee,50250 Kuala Lumpur.


The unaudited financial statements were authorised for issue by the Board of Directors of the Manager inaccordance with the resolution of the directors on 21 August 2015.

The unaudited financial statements of the Fund have been prepared in accordance with MalaysianFinancial Reporting Standards ("MFRSs"), International Financial Reporting Standards ("IFRSs")and the Securities Commission's Guidelines on Unit Trust Funds in Malaysia.

The unaudited financial statements of the Fund have been prepared on the historical cost conventionunless otherwise indicated in the summary of accounting policies below.

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2.3




(b)

2.4

Effective for annual periods beginning on or after 1 July 2014Amendments to MFRS 119, Defined Benefit Plans : Employee ContributionsAmendments to MFRSs Classified as "Annual Improvements to MFRSs 2010 - 2012 Cycle"Amendments to MFRSs Classified as "Annual Improvements to MFRSs 2011 - 2013 Cycle"



The Fund has not early adopted the following new MFRSs and amendments to MFRSs that have beenissued by the MASB but are not yet effective :-

Application of Amendments to MFRSs and new IC Interpretation

During the financial year, the Fund has applied the following amendments to MFRSs issued by theMalaysian Accounting Standards Board ("MASB") which are effective for accounting periodbeginning on or after 1 January 2014 :-

The Amendments clarify the requirements relating to the offset of financial assets and financialliabilities. Specifically, the Amendments clarify the meaning of 'currently has a legallyenforceable right of set-off' and 'simultaneous realisation and settlement'.


Amendments to MFRS 139 - Novation of Derivatives and Continuation of HedgeAccounting

The Amendments introduce a narrow-scope exception to the requirement for the discontinuationof hedge accounting in MFRS 139, Financial Instruments : Recognition and Measurement.Specifically, the Amendments provide relief from discontinuing hedge accounting when anovation of a derivative as a hedging instrument meets certain criteria.

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2.4

Effective for annual periods beginning on or after 1 January 2016MFRS 14, Regulatory Deferral AccountsAmendments to MFRS 10, MFRS 12 and MFRS 128 - Investment Entities: Applying the

Consideration ExceptionAmendments to MFRS 10 and MFRS 128 - Sale or Contribution of Assets between an Investor

and its Associate or Joint VentureAmendments to MFRS 11 - Accounting for Acquisitions of Interests in Joint OperationsAmendments to MFRS 101 - Disclosure InitiativeAmendments to MFRS 116 and MFRS 138 - Clarification of Acceptable Methods of

Depreciation and AmortisationAmendments to MFRS 116 and MFRS 141 - Agriculture : Bearer PlantsAmendments to MFRS 127 - Equity Method in Separate Financial StatementsAmendments to MFRSs Classified as "Annual Improvements to MFRSs 2012 - 2014 Cycle"

Effective for annual periods beginning on or after 1 January 2017MFRS 15 - Revenue from Contracts with Customers

Effective for annual periods beginning on or after 1 January 2018MFRS 9 - Financial Instruments (IFRS 9 issued in July 2014)


The Standard replaces earlier versions of MFRS 9 and introduces a package of improvements whichincludes a classification and measurement model, a single forward-looking ‘expected loss’ impairmentmodel and a substantially-reformed approach to hedge accounting.

• Under MFRS 9, all recognised financial assets are required to be subsequently measured at either

amortised cost, fair value through other comprehensive income ("FVTOCI") or fair value throughprofit or loss ("FVTPL") on the basis of both an entity's business model for managing the financialassets and the contractual cash flow characteristics of the financial assets. These requirements improveand simplify the approach for classification and measurement of financial assets as the numerouscategories of financial assets under MFRS 139 had been replaced.

• Most of the requirements in MFRS 139 for classification and measurement of financial liabilitieswere carried forward unchanged to MFRS 9, except for the measurement of financial liabilitiesdesignated as at FVTPL. Under MFRS 139, the entire amount of the change in the fair value of thefinancial liability designated as FVTPL is presented in profit or loss. However, MFRS 9 requires thatthe amount of change in the fair value of the financial liability that is attributable to changes in thecredit risk of that liability is presented in other comprehensive income, unless the recognition of theeffects of changes in the liability's own credit risk in other comprehensive income would create orenlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financialliability's credit risk are not subsequently reclassified to profit or loss.

New MFRSs and Amendments to MFRSs That Are In Issue But Not Yet Effective (Cont'd.)

The Fund will apply the above new MFRSs and amendments to MFRSs that are applicable once theybecome effective. The main features of the new applicable standard is summarised below :-


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2.4




New MFRSs and Amendments to MFRSs That Are In Issue But Not Yet Effective (Cont'd)

MFRS 9, Financial Instruments (IFRS 9 issued in July 2014) [cont'd.]

• In relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model, asopposed to an incurred credit loss model under MFRS 139. Under MFRS 9, it is no longer necessaryfor a credit event to have occurred before credit losses are recognised. Instead, an entity alwaysaccounts for expected credit losses and changes in those expected credit losses at each reporting dateto reflect changes in credit risk since initial recognition.

• The new general hedge accounting requirements retain the three types of hedge accountingmechanisms currently available in MFRS 139 i.e. fair value hedges, cash flow hedges and hedges of anet investment in a foreign operation. MFRS 9 incorporates a new hedge accounting model that alignsthe hedge accounting more closely with an entity's risk management activities. The new hedgeaccounting model has also expanded the scope of eligibility of hedge items and hedging instrumentsrespectively.

The initial application of MFRS 9 in the future may have an impact on the financial statements of theFund. However, it is not practicable to provide a reasonable estimate of the effect until a detailedreview has been completed. The initial application of other new MFRSs and amendments to MFRSs isnot expected to have any significant impact on the financial statements of the Fund.

The accounting policies set out below have been applied consistently to the periods, presented in thesefinancial statements and have been applied consistently by the Fund, unless otherwise stated.

Financial assets are recognised in the statement of financial position when, and only when, the Fundbecomes a party to the contractual provisions of the financial instruments. Regular way of purchaseand sale of investments in financial instruments are recognised on trade dates. When financial assetsare recognised initially, they are measured at fair value, plus attributable transaction cost, forinvestment not at fair value through profit or loss.

The Fund determines the classification of its financial assets at the initial recognition, and thecategories include financial assets at fair value through profit or loss, available-for-sale financial assetsand loans and receivables.

Financial assets are classified as financial assets at FVTPL if they are held for trading or aredesignated as such by the Manager upon initial recognition. Financial assets held for tradinginclude securities and fixed income securities acquired principally for the purpose of sellingthem in near term.

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

3.1 Financial Assets (Cont'd.)

(a) Financial assets at fair value through profit or loss ("FVTPL") [Cont'd.]


Regular way purchases or sales are purchases or sales of financial assets that require delivery ofassets within the period generally established by regulation or convention in the market placeconcerned. All regular way purchases and sales of financial assets are recognised orderecognised on trade date, i.e. the date that the Fund commits to purchase or sell the asset.

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value at the dateof the statement of financial position. Changes in the fair value of those financial instruments arerecorded in "Net gain or loss on financial assets at FVTPL". Interest earned and dividendrevenue elements of such instruments are recorded separately in "Interest income" and"Dividend income", respectively. Foreign exchange differences on financial assets at FVTPL arenot recognised separately in profit or loss but included in net gains or net losses on changes infair value of financial assets at FVTPL.

AFS financial assets are financial assets that are designated as available for sale or are notclassified as financial assets at FVTPL or loans and receivables.

After initial recognition, AFS financial assets are measured at fair value. Gains or losses fromchanges in fair value of the AFS financial assets are recognised in other comprehensive income,except that impairment losses, foreign exchange gains and losses on monetary instruments,dividend income and interest calculated using effective interest method are recognised in profitor loss.

The cumulative gain or loss previously recognised in other comprehensive income is reclassifiedfrom equity to profit or loss as a reclassification adjustment when the financial asset isderecognised. Interest income calculated using the effective interest method is recognised inprofit or loss. Dividends on an AFS equity instrument are recognised in profit or loss when theFund's right to receive payment is established.

Fair value is the amount for which an asset could be exchanged, or liability settled, betweenknowledgeable, willing parties in an arm's length transaction. The fair value for financialinstruments traded in active markets at the reporting date is based on their quoted price orbinding dealer price quotations, without deduction for transaction costs.

A financial asset is derecognised when the asset is disposed and the contractual right to receivecash flows from the asset has expired. On derecognition of a financial asset in its entirety, thedifference between the carrying amount and the sum of the consideration received and anycumulative gain or loss that had been recognised in other comprehensive income is recognised inprofit or loss.

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The Fund assesses at each reporting date whether there is any objective evidence that a financial assetis impaired.

Significant or prolonged decline in fair value below cost, weaken fundamental, significantfinancial difficulties of the issuer or obligor, and the disappearance of an active trading marketare considerations to determine whether there is objective evidence that investment securitiesclassified as AFS financial assets are impaired. At end of each financial year, the Manager wouldreceive impairment proposal from the Fund's external investment manager, if any financial assetsof the Fund, in their professional opinion, warrant an impairment exercise.

If an AFS asset is impaired, an amount comprising the difference between its cost (net of anyprincipal payment and amortisation) and its current fair value, less any impairment losspreviously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on AFS equity investments are not reversed in profit or loss in the subsequentperiod. Increase in fair value, if any, subsequent to impairment loss is recognised in othercomprehensive income. For AFS debt investments, impairment losses are subsequently reversedin profit or loss, up to the amount previously recognised as impairment loss, if an increase in thefair value of the investment can be objectively related to an event occurring after therecognition of the impairment loss in profit or loss.

If any such evidence exists, the amount of impairment loss is measured as the differencebetween the asset's carrying amount and the present value of estimated future cash flowsdiscounted at the financial asset's original effective interest rate. The impairment loss isrecognised in profit or loss.

To determine whether there is objective evidence that an impairment loss on financial assets hasbeen incurred, the Fund considers factors such as the probability of insolvency or significantfinancial difficulties of the debtor and default or significant delay in payments.

Financial assets with fixed or determinable payments that are not quoted in an active market areclassified as loans and receivables. The Fund includes short term receivables such as balancesdue from broker, Manager and other receivables in the classification. Loans and receivables arerecognised initially at fair value including transaction costs.

Subsequent to initial recognition, loans and receivables are measured at amortised cost usingeffective interest method. Gains and losses are recognised in profit or loss when the loans andreceivables are derecognised or impaired, and through the amortisation process.

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3.2 Impairment of Financial Assets (Cont'd.)

(b) Trade and other receivables and other financial assets carried at amortised cost (cont'd)



A financial liability is derecognised when the obligation under the liability is extinguished. Gains andlosses are recognised in profit or loss when the liabilities are derecognised, and through theamortisation process.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can berelated objectively to an event occurring after the impairment was recognised, the previouslyrecognised impairment loss is reversed to the extent that the carrying amount of the asset doesnot exceed its amortised cost at the reversal date. The amount of reversal is recognised in profitor loss.

Unrealised gain and losses comprise changes in fair value of financial instruments for the period fromreversal of prior period's unrealised gain and losses for financial instruments which were realised (i.e.sold, redeemed or matured) during the reporting period.

Realised gains and losses on disposals of financial instruments classified as part of "at fair valuethrough profit or loss" are calculated using weighted average method. They represent the differencebetween an instrument's initial carrying amount and disposal amount, or cash payment or receiptsmade of derivative contracts (excluding payments or receipts on collateral margin accounts for suchinvestments).

Financial liabilities are classified according to the substance of the contractual arrangements enteredinto and the definition of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financialposition when, only when, the Fund becomes a party to the contractual provisions of the financialinstrument. Financial liabilities are classified as other financial liabilities.

The Fund's financial liabilities which include trade and other payables are recognised initially at fairvalue plus directly attributable transaction costs and subsequently measured at the amortised cost usingeffective interest method.

The carrying amount of the financial asset is reduced by the impairment loss directly for allfinancial assets with the exception of trade receivables, where the amount is reduced through theuse of an allowance account. When a trade receivable becomes uncollectible, it is written offagainst the allowance account.

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Income is recognised to the extent that is probable that the economic benefits will flow to the Fundand the income can be reliably measured. Income is measured at fair value of consideration receivedor receivable.

The financial statements of the Fund are measured using the currency of the primary economicenvironment in which the Fund operates ("the functional currency"). The financial statements arepresented in Ringgit Malaysia (RM), which is also the Fund's functional currency.

In preparing the financial statements, transactions in currencies other than the Fund's functionalcurrency (foreign currencies) are recorded in the functional currency using the exchange ratesprevailing at the dates of the transactions. At the end of each reporting period, foreign currencymonetary assets and liabilities are translated at exchange rates prevailing at the end of the reportingperiod. Non-monetary items that are measured at fair value in a foreign currency are translated usingexchange rates at the date when the fair value was determined.

Exchange differences arising from the settlement of foreign currency transactions and from thetranslation of foreign currency monetary assets and liabilities are recognised in profit or loss.

Exchange differences arising from the translation of non-monetary items carried at fair value areincluded in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains or losses are recognised directly in equity. Exchangedifferences arising from such non-monetary items are recognised directly to equity.

The unitholders' contributions to the Fund meet the definition of puttable instruments classified asequity instruments under MFRS 132.

Distribution equalisation represents the average distributable amount included in the creation andcancellation prices of units. This amount is either refunded to unitholders by way of distribution and/oradjusted accordingly when units are cancelled.


Income distributions are at the discretion of the Manager. Income distribution to the Fund'sunitholders is accounted for as a deduction from realised reserves except where the distribution issourced out of distribution equalisation which is accounted for as a deduction from unitholders'capital.

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3.9 Income Recognition (Cont'd.)

3.10 Income Tax




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

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid tothe tax authorities. The tax rates and tax laws used to compute the amount are those that are enactedor substantively enacted by the reporting date.



For management purposes, the Fund is managed by 2 main portfolios, namely (1) equity securitiesand (2) fixed income instruments. Each segment engages in separate business activities and theoperating results are regularly reviewed by the Manager, External Investment Manager and theFund's Investment Committee. The External Investment Managers and the Fund InvestmentCommittee jointly assumes the role of chief operation decision maker, for performance assessmentpurposes and to make decision about resources allocated to each investment segment.

The preparation of financial statements in accordance with MFRS and IFRS requires the use ofcertain accounting estimates and exercise of judgements. Estimates and judgements are continuallyevaluated and are based on past experience, reasonable expectations of future events and other factors.

No major judgements have been made by the Manager in applying the Fund's accounting policies.There are no key assumptions concerning the future and other key sources of estimation uncertainty atthe reporting date, that have significant risk of causing material adjustment to the carrying amounts ofassets and liabilities within next year.

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4. MANAGER'S FEE

5. TRUSTEE' S FEE

6. TAXATION

30.06.2015 30.06.2014RM RM

Current year Malaysian tax - -Overprovision in prior year's income tax expenses - -Malaysian tax expenses based onresults for the year - -

30.06.2015 30.06.2014RM RM

Net income before tax 1,683,084 707,543

Taxation at Malaysian statutory rate of 25% 420,771 176,886(2014: 25%)

Tax effects of:Income not subject to tax (476,801) (237,549)Expenses not deductible for tax purposes 11,057 8,289Restriction on tax deductible expenses for unit trust funds 44,973 52,374


The Manager is entitled to an annual management fee of 1.5% per annum of the NAV of the Fund (beforededucting the Manager's and Trustee's fees for the day) calculated and accrued on a daily basis.

The Trustee is entitled to a fee of 0.07% per annum of the NAV of the Fund (before deducting theManager's and Trustee's fee for the day) calculated and accrued on a daily basis, subject to a minimum ofRM18,000 per annum.

Income tax is calculated at the Malaysian statutory tax rate of 25% (2014:25%) of the estimated assessableincome for the period.

The tax charge for the period is in relation to the taxable income earned by the Fund after deducting taxallowable expenses. In accordance with Schedule 6 of the Income Tax Act 1967, interest income earned bythe Fund is exempted from tax.

A reconciliation of income tax expenses applicable to net income/(loss) before tax at the statutory incometax rate to income tax expense at the effective income tax rate of the Fund is as follows:

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7. INVESTMENTS

Financial assets at fair value through profit or loss 30.06.2015 30.06.2014(Note 8) RM RMQuoted equities:-in Malaysia 5,724,814 7,982,651-outside Malaysia 11,071,153 16,988,246

16,795,967 24,970,897

8. FINANCIAL ASSETS AT FVTPL30.06.2015 30.06.2014

RM RMFinancial assets at FVTPL:Quoted equities 16,795,967 24,970,897

Net gain on financial assets at FVTPL comprised:Realised gain on disposals 437,492 366,915Unrealised gain changes in fair values 1,250,964 153,726

1,688,456 520,641

The currency exposure profile of financial assets at 30.06.2015 30.06.2014FVTPL is as follows :

- Ringgit Malaysia 5,724,814 7,982,651- Hong Kong Dollar 4,603,231 7,676,957- Indonesian Rupiah 1,108,722 2,493,285- South Korean Won 1,370,270 1,919,907- Thai Baht 1,072,202 1,799,574- Philippine Peso 210,302 1,338,701- Singapore Dollar 1,808,477 1,759,822- New Taiwan Dollar 897,948 -

16,795,966 24,970,897

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QUOTED EQUITIES- IN MALAYSIA

Main Market

Consumer ProductsSasbadi Holdings Bhd 100,000 213,685 235,000 1.23Tek Seng Holdings Bhd 352,000 206,500 181,280 0.95

452,000 420,185 416,280 2.18

Industrial ProductsCan-One Bhd 175,000 592,785 439,250 2.30Evergreen Fibreboard Bhd 540,000 503,818 723,600 3.79Kian Joo Can Factory Bhd 175,700 565,043 553,455 2.90Malaysia Steel Works KL Bhd 130,000 132,972 80,600 0.42Supermax Corp Bhd 134,000 287,033 277,380 1.45Ta Ann Holdings Bhd 111,000 481,817 421,800 2.21

1,265,700 2,563,468 2,496,085 13.07

Plantation


PropertiesLand & General Bhd 528,000 306,719 227,040 1.19Matrix Concepts Holdings Bhd 153,000 229,080 474,300 2.49Metro Kajang Holdings Bhd 131,000 501,907 279,030 1.46Sentoria Group Bhd 362,000 417,703 372,860 1.95

1,174,000 1,455,409 1,353,230 7.09

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TechnologyInari Amertron Bhd 81,875 262,283 266,094 1.39Malaysian Pacific Industries 33,000 122,840 217,140 1.14

114,875 385,123 483,234 2.53

Trading/ServicesBerjaya Corp Bhd 508,000 256,271 205,740 1.08Fitters Diversified Bhd 523,000 381,564 290,265 1.52

1,031,000 637,835 496,005 2.60

TOTAL QUOTEDEQUITIES- IN MALAYSIA 4,140,575 6,069,498 5,724,814 29.99

QUOTED EQUITIES- OUTSIDE MALAYSIA


AAC Technologies Holdings Inc 7,500 161,877 159,441 0.84Agricultural Bank of China 178,000 371,404 361,953 1.90Asia Cement China Holdings 84,000 161,663 156,507 0.82Central China Real Estate 122,000 136,254 129,975 0.68

China Citic Bank 96,000 303,899 288,613 1.51China Gas Holdings Ltd 36,000 218,868 217,160 1.14China Huishan Dairy Holdings Co Ltd 418,000 451,346 357,886 1.88China Overseas Grand Ocean Group 142,000 281,811 270,789 1.42

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QUOTED EQUITIES

-OUTSIDE MALAYSIA (CONTD.)

Hong Kong Stock Exchange

("HKSE") (Contd.)

China Resources Cement 82,000 185,060 171,529 0.90Consun Pharmaceutical Group 196,000 536,596 526,322 2.76Hua Han Bio-Pharmaceutical-H 400,000 320,151 280,207 1.47Ind & Comm Bank of China 30,000 95,376 89,754 0.47Real Gold Mining Ltd* 191,000 904,283 140,795 0.74Red Star Macalline Group Co Ltd 26,000 169,041 160,632 0.84SPT Energy Group Inc 210,000 208,114 140,979 0.74Sinomax Group Ltd 150,000 75,799 80,268 0.42Tembray Petro King Oilfield 288,571 434,658 148,804 0.78Tongda Group Holdings Ltd 326,000 152,698 236,298 1.24Xinyi Glass Holdings Ltd 188,000 441,899 376,800 1.98Xinchen China Power Holdings 210,000 340,002 308,519 1.62

3,381,071 5,950,799 4,603,231 24.15

Jakarta Stock Exchange("JSX")

Alam Sutera Realty TBK PT 890,000 124,015 144,620 0.76Bekasi Fajar Industrial Esta 2,240,000 325,035 253,210 1.33Indomobil Sukses International 192,000 332,135 192,078 1.01Metropolitan Land TBK PT 1,330,000 154,336 147,336 0.77PP Property TBK PT 3,000,000 161,999 158,539 0.83Ramayana Lestari Sentosa PT 1,100,000 277,768 212,939 1.12

8,752,000 1,375,288 1,108,722 5.82

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Korea Stock Exchange(''KE'')

Hana Financial Group 4,000 442,102 392,779 2.06Industrial Bank of Korea 4,300 209,698 209,302 1.10Kia Motors Corporation 2,045 424,969 312,791 1.64Lg Electronics Inc 1,641 482,761 261,814 1.37Sk Telecom Co Ltd 230 206,469 193,584 1.01

12,216 1,765,999 1,370,270 7.18

Philippines Stock Exchange("PSE")

EEI Corporation 259,400 209,503 210,302 1.10

Stock Exchange of Thailand("SET")

Amata Corporation Public Co Ltd 140,000 263,374 234,087 1.23Malee Sampran Public Co-NVDR 61,000 221,334 217,589 1.14Sino Thai Engineering &Construction-NVDR 100,000 277,659 258,610 1.36Total Access Communication-NVDR 39,000 421,404 361,915 1.90

340,000 1,183,771 1,072,201 5.63

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Singapore Exchange("SGX")

Centurion Corp Ltd 285,000 444,114 419,327 2.20China Environment Ltd 568,000 332,944 267,428 1.40IndoFood Agri Resources Ltd 70,000 274,601 136,343 0.71Midas Holdings Ltd 264,000 331,991 236,757 1.24Sbi Offshore Ltd 885,000 285,413 558,052 2.93Sino Grandness Food Industry 200,000 242,716 190,571 1.00

2,272,000 1,911,779 1,808,478 9.48

Taiwan Stock Exchange("TWSE")

Chaun-Choung Technology Corp 21,000 203,553 196,683 1.03Hon Hai Precision Industry 9,000 103,732 106,492 0.56Innolux Corp 150,000 304,391 293,980 1.54La Kaffa International Co Ltd 17,000 201,568 201,775 1.06Pegatron Corp 9,000 95,634 99,019 0.52

206,000 908,878 897,949 4.71

TOTAL QUOTEDEQUITIES- OUTSIDE MALAYSIA 15,222,687 13,306,017 11,071,153 58.07

TOTAL QUOTED EQUITIES 19,375,515 16,795,967 88.06


EXCESS OF COSTOVER FAIR VALUE (2,579,548)

* This security has been suspended since 27 May 2011 and its fair value has been determined by theManager with the consent of the Trustee.

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30.06.2015 30.06.2014RM RM

Licensed investment bank 2,101,552 1,497,118

Averageremaining

maturities30.06.2015 30.06.2014 30.06.2015 30.06.2014

% % Days Days

Licensed investment bank 3.18 2.91 5.76 1


30.06.2015 30.06.2014RM RM

Amount due from release of units 233,452 136,052Management fee 27,226 35,040

260,678 171,092

WAEIR

The weighted average effective interest rate ("WAEIR") per annum and the average remaining maturitiesof deposits and placement are as follows:

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There is no income distribution to unitholders for the financial year ended 31 December 2014.


Note 30.06.2015 30.06.2014RM RM

Unit holders' capital (a) 20,996,563 30,654,207Accumulated losses- Realised earnings (b) 2,287,902 1,383,740- Unrealised losses (c) (4,208,976) (4,749,526)

(1,921,074) (3,365,786)Total equity/Net asset value 19,075,489 27,288,421


Number Numberof units RM of units RM

Balance at beginningof the year 30,737,234 30,086,824 33,120,887 32,144,451

Add: Creation of units 88,816 86,298 180,521 161,641Less: Cancellation of units (10,223,920) (10,255,520) (1,935,062) (1,691,525)Distribution equalisation - 1,078,961 - 39,640Balance at end ofperiod 20,602,130 20,996,563 31,366,346 30,654,207


30.06.2015 30.06.2014RM RM

Balance at the beginning of the year 1,855,386 826,859Net income after taxation 1,683,084 707,543Net unrealised gain attributable toinvestments held transferred tounrealised reserve (1,250,964) (153,726)

Net unrealised foreign exchange lossattributable to foreign currency monetaryitems transferred to unrealised reserve 396 3,064

Balance at the end of period 2,287,902 1,383,740

01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014

The Fund has an approved fund size of 200 million units. As at 30 June 2015, the number of units not inissue is 179,397,870 units (30 June 2014: 168,633,654).

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12. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS (TOTAL EQUITY) (CONTD.)

(c) Unrealised - Non-distributable30.06.2015 30.06.2014

RM RM

Balance at the beginning of the year (5,459,544) (4,900,188)Net unrealised gain attributable toinvestment held transferred fromrealised reserve 1,250,964 153,726

Net unrealised foreign exchangeloss attributable to foreigncurrency monetary items transferred fromrealised reserve (396) (3,064)

Balance at the end of period (4,208,976) (4,749,526)


RM RM/Unit RM RM/UnitNet asset value attributable

to unitholders forissuing/redeeming of units 19,180,652 0.9310 27,428,304 0.8745

Effect from adopting bidprices as fair value (105,163) (0.0051) (139,883) (0.0045)

Net asset value attributableto unitholders perfinancial statements 19,075,489 0.9259 27,288,421 0.8700


30.06.2015 30.06.2014Number of Valued at Number of Valued at

units NAV units NAVRM RM

Directors of the Manager # 60,868 56,358 115,868 100,804

#

30 June 2015 30 June 2014


Quoted financial assets in the financial statements have been valued at the bid prices at the close ofbusiness in accordance with the provisions of MFRS 139. For the purpose of calculation of net assetvalue attributable to unitholders per unit for the issuance and redemption of units in accordance with theDeed, quoted financial assets are stated at the last done market price.

A reconciliation of net asset value attributable to unitholders for issuing/redeeming units to the net assetvalue attributable to uniholders per the financial statements is as follows:-

The Directors of the Manager are the legal and beneficial owners of the units.

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% of TotalValue of % of Total Brokerage Brokerage

Trade Trade Fees FeesRM % RM %

MIDF Amanah InvestmentBank Bhd 11,046,816 25.49 - -DBS Vickers Securites Pte Ltd- Hong Kong 4,433,932 10.23 11,092 14.27CIMB-GK Securities - Hong Kong 3,294,707 7.59 10,455 13.45Oriental Patron Securities Limited- Hong Kong 3,209,165 7.40 8,034 10.34Affin Hwang Capital Investment Bank 3,072,289 7.09 1,077 1.38RHB OSK Securities Limited- Hong Kong 3,038,182 7.01 5,992 7.71PT Mandiri Sekuritas 1,243,023 2.87 4,789 6.16DBS Vickers Securites Pte Ltd- Singapore 1,169,601 2.70 2,342 3.01Kenanga Investment Bank Bhd 1,109,286 2.56 3,084 3.97Fubon Securities Company Ltd 952,737 2.20 2,103 2.71Others 10,779,882 24.87 28,753 37.00

43,349,619 100.00 77,721 100.00


30.06.2015 30.06.2014



30.06.2015 30.06.2014


Details of transactions with stockbroking companies and other investment banks for the period ended 30June 2015 are as follows:

This is the ratio of the sum of the fees (inclusive of the manager's, trustee's, audit and other professionalfees) and other administrative expenses of the Fund to the average NAV of the Fund calculated on a dailybasis. The average NAV of the Fund for the period ended 30 June 2015 was RM 22,929,430 (30 June2014: RM 27,592,682).

This is the ratio of the average of acquisitions and disposals of the Fund for the year to the average NAV ofthe Fund calculated on a daily basis.

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The Manager, the appointed External Investment Manager and Investment Committee of the Fund areresponsible for allocating resources available to the Fund in accordance with the overall investmentstrategies as set out in the investment Guidelines of the Fund. The Fund is managed by two segments:

● A portfolio of equity instruments● A portfolio of fixed income portfolio, including debt securities and deposits with financial

institutions.

The investment objective of each segment is to achieve consistent returns from the investments in eachsegment while safeguarding capital by investing in diversified portfolios. There have been no changes inreportable segments in the current financial period. The segment information provided is presented to theManager, the appointed External Investment Manager and Investment Committee of the Fund.

01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014Fixed Fixed

Equity Income Equity Income

Portfolio Portfolio Total Portfolio Portfolio TotalRM RM RM RM RM RM

Gross Dividend income 181,310 - 181,310 400,591 - 400,591

Interest Income - 37,832 37,832 - 32,027 32,027

Net (loss)/gain on

financial assets at FVTPL 1,688,456 - 1,688,456 520,641 - 520,641

Net realised gain/ (loss) on

foreign exchange (396) - (396) (3,064) - (3,064)

Total segment operating (loss)/

income for the period 1,869,369 37,832 1,907,201 918,167 32,027 950,194

Deposit with financial institutions 2,101,552 2,101,552 1,497,118 1,497,118


AFS financial assets - - - - - -Other assets 63,579 184 63,763 931,067 119 931,186



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30.06.2015 30.06.2014RM RM

Net reportable segment operating income/(loss) 1,907,202 950,194Expenses (224,118) (242,651)Net income/(loss) before tax 1,683,084 707,543Tax expense - -Net income/(loss) tax for the period 1,683,084 707,543

30.06.2015 30.06.2014RM RM

Total segment assets 18,961,282 27,399,201Tax recoverable - 33,660Amount due from Broker 84,744 -Cash at bank 298,697 28,149Total assets of the Fund 19,344,723 27,461,010

Total segment liabilities - -Other payables and accruals 6,547 (138)Amount due to Manager 260,678 171,092Amount due to Trustee 2,009 1,635Total liabilities of the Fund 269,234 172,589



Expenses of the Fund are not considered part of the performance of any operating segment. Thefollowing table provides a reconciliation between reportable segment income/(loss) and operatingprofits/(loss).

In addition, certain assets and liabilities are not considered to be part of the assets and liabilities of anindividual segment. The following table provides reconciliation between total reportable segment assetsand liabilities and total assets and liabilities of the Fund.

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at either fair valueor at amortised cost based on their respective classification. The significant accounting policies in Note 2describe how the classes of financial instruments are measured, and how income and expenses, includingfair value gains and losses are recognized. The following table analyses the financial assets and liabilitiesof the Fund in the statement of financial position by the class of financial instrument to which they areassigned, and therefore by the measurement basis.

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Financial

liabilities

Financial AFS at



30.06.2015 RM RM RM RM RM

Assets

Quoted equities 16,795,967 - - 16,795,967



Amount due from brokers - - 84,744 - 84,744


Cash at bank - - 298,697 - 298,697

Total financial assets 16,795,967 - 2,548,756 - 19,344,723

Total non-financial assets -19,344,723

Liabilities



Other payables - - - 6,547 6,547Total financial liabilities - - - 269,234 269,234

30.06.2014

Assets

Quoted equities 24,970,897 - - - 24,970,897




Cash at bank - - 28,149 - 28,149

Total financial assets 24,970,897 - 2,456,453 - 27,427,350

Total non-financial assets 33,660

27,461,010

Liabilities



Other payables - - - (138) (138)Total financial liabilities - - - 172,589 172,589

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(b) Fair Value


The Fund held the following financial instruments carried at fair value on the statement offinancial position as at the end of period:

Level 1 Level 2 Level 3 TotalRM RM RM RM

As at 30 June 2015

Financial assetat FVTPL- Quoted Securities 16,655,172 - 140,795 16,795,967

As at 30 June 2014

Financial assetat FVTPL- Quoted Securities 24,851,015 - 119,882 24,970,897

The Fund uses the following level of fair value hierarchy for determining and disclosing thefair value of financial instruments carried at fair value in the statement of financial position:


Level 2: Inputs other than quoted prices included within Level 1 that are observable forthe asset or liability either directly or indirectly


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

Quoted equity instrumentsFair value of quoted equity instruments is determined directly by reference to their publishedmarket bid prices on the relevant stock exchanges at the reporting date. The fair value ofquoted equity instruments which have lost active trading market due to suspension in theirtrading, is determined by reference to their published net tangible assets.

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(i) Financial instruments that are carried at fair value (Contd.)

2015 2014RM RM

Financial assets at FVTPLBalance at 1 January 130,443 122,203Total loss recognised in profit or loss :

- Net gain/(loss) on financial assets at FVTPL 10,352 (2,321)Transfer from Level 1Balance at 30 June 140,795 119,882



The following table shows a reconciliation from the beginning balance to the ending balancefor the fair value measurement under Level 3 of the fair value hierarchy :

Financial instruments not carried at fair value comprise financial assets and financialliabilities classified as loans and receivables and financial liabilities at amortised costrespectively. The carrying amount of these financial instruments at the end of the periodapproximated their fair values due to their short term to maturity.

The Fund maintains investment portfolios in a variety of quoted and unquoted financial instruments asdictated by its Trust Deed and investment management strategy.

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

The Fund’s objective in managing risk is the creation and protection of unitholders’ value. Risk isinherent in the Fund’s activities, but it is managed through a process of ongoing identification,measurement and monitoring of risks. Financial risk management is also carried out through soundinternal control systems and adherence to the investment restrictions as stipulated in the Trust Deed, theSecurities Commission’s Guidelines on Unit Trust Funds and the Capital Market and Services Act, 2007.

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(i) Market Risk



Change in equity price (%) Increase/(Decrease)RM

2015+6/-6 1,007,758/ (1,007,758)

2014+6/-6 1,498,254/ (1,498,254)

The Fund's principal exposure to market risk arises primarly due to changes or developments in themarket environment and typically includes changes in regulations, politics and the economy of thecountry. Market risk is also influenced by global economics and geopolitical developments. TheFund seeks to diversify away some of this risk by investing into different sectors to mitigate riskexposure to any single asset class.

The Fund's market risk arises primarily due to changes in market prices and interest rates andforeign currency exchange rates.

Equity price risk is the adverse changes in the fair value of equities as a result of changes inthe levels of equity indices and the value of individual shares. The equity price risk exposurearises from the Fund’s investments in quoted equity securities.

The table below summarises the effect of sensitivity from the Fund's underlying investmentsin quoted equities on the profit or loss and equity of the Fund due to possible changes inequity prices, with all other variables held constant:

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Change in basis points* Increase/(Decrease)RM

2015+25/-25 4,857/ (4,857)

2014+25/-25 4,058/ (4,058)

* The assumed movement in basis points for interest rate sensitivity analysis is basedon the current observable market environment

(c) Currency Risk

This risk refers to the effect of interest rate changes on the market value of fixed incomesecurities and deposits with financial institutions. In the event of rising interest rates, thereturn on deposits with financial institutions will rise while prices of fixed income securitieswill decrease and vice versa, thus affecting the net asset value of the Fund. This risk will beminimized via the management of the duration structure of the portfolio of fixed incomesecurities and deposits with financial institutions.

The following table demonstates the sensitivity of the profit and loss and equity of the Fundto a reasonably possible change in interest rates, with all other variables held constant:

The Fund is exposed to currency risk primarily through its investment in overseas quotedequities that are denominated in foreign currencies. The Fund's foreign currency exposureprofile of its investment in quoted equities has been disclosed under Note 8. The currencyrisk is minimised by proper portfolio allocation and to avoid concentration in a singlecountry.

A 10% strenghtening or weakening of the RM against the following foreign currencies as atthe end of the period would have decreased or increased respectively the profit or loss andequity of the Fund by the amount shown below. This analysis assumes all other variables areheld constant.

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(c) Currency Risk (Contd.)

30 June 2015 30 June 2014RM RM

Hong Kong Dollar 460,323 767,696Indonesian Rupiah 110,872 249,329South Korean Won 137,027 191,991Thai Baht 107,220 179,957

Philippine Peso 21,030 133,870Singapore Dollar 180,848 175,982New Taiwan Dollar 89,795 -

1,107,115 1,698,825

(ii) Credit Risk



This risk occurs in thinly traded or illiquid equity securities. Should the Fund needs to sell arelatively large amount of such securities, the act itself may significantly depress the selling price.As the Fund is exposed to daily redemption of units, the risk is minimized by placing a prudentlevel of funds in short-term deposits and by investing in stocks whose liquidity is adjudged to becommensurate with the expected exposure level of the Fund.

The Fund’s principal exposure to credit risk arises primarily due to changes in the financialconditions of companies issuing debt securities and stockbroking companies, which may affect theircreditworthiness. This in turn may lead to default in the payment. Such events can lead to loss ofcapital or delayed or reduced income for the Fund resulting in a reduction in the Fund’s asset valueand thus unit price. This risk is mitigated by vigorous credit analysis and diversification of the bondportfolio of the Fund and to engage different stockbroking companies with good reputation.

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1 month 3 months

30 June 2015 - 3 months -5 years Total

RM RM RM

Financial Assets:

Financial assets held at FVTPL 16,795,967 - 16,795,967

Deposits with financial institutions 2,101,552 2,101,552

Other assets 447,204 - 447,204

Total undiscounted

financial assets: 19,344,723 - 19,344,723

Non-Financial AssetsTax recoverable - - -

Total Assets 19,344,723 - 19,344,723

Financial liabilititesOther liablities - 269,234 269,234Total undiscountedfinancial liabilities - 269,234 269,234

Unitholders' NAV 19,075,489 19,075,489

Liquidity gap 269,234 (269,234)

The following table summarises the maturity profile of the Fund’s financial liabilities and thecorresponding assets available to meet commitments associated with those financial liabilities andredemption by unitholders.

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(iii) Liquidity Risk (Contd.)1 month 3 months

30 June 2014 - 3 months - 5 years TotalRM RM RM

Financial AssetsFinancial assets held at FVTPL 24,970,897 - 24,970,897Deposits with financial institutions 1,497,118 - 1,497,118Other assets 959,335 - 959,335Total undiscountedfinancial assets 27,427,350 - 27,427,350

Non-Financial AssetsTax recoverable 33,660 33,660

Total Assets 27,427,350 33,660 27,461,010

Financial LiabilititesOther liablities - 172,589 172,589Total undiscountedfinancial liabilities - 172,589 172,589

Unitholders' NAV 27,288,421 - 27,288,421

Liquidity gap 138,929 (138,929)




The Fund is exposed to the individual risk of the respective companies issuing securities whichincludes changes to the business performance of the company, consumer tastes and demand,lawsuits and management practices. This risk is minimised through the well diversified nature ofthe Fund.

The Fund’s exposure to securities issued by any issuer is limited to not more than a certainpercentage of its net asset value. Under such restriction, the risk exposure to the securities of anyissuer is minimised.

The capital is represented by unitholders’ subscription to the Fund. The amount of capital canchange significantly on a daily basis as the Fund is subject to daily redemption and subscription atthe discretion of unitholders. The Manager manages the Fund’s capital with the objective ofmaximising unitholders' value while maintaining sufficient liquidity to meet unitholders'redemption as explained in Note 20 (iii) above.

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[email protected]

177YourNeedis our Focus

21 August 2015


PAXJI

[email protected]

178Your Need

is our Focus

21 August 2015


PAXJI

[email protected]

179Your Need

is our Focus

STATEMENT BY MANAGER TO THE UNITHOLDERS OFPHEIM ASIA EX-JAPAN ISLAMIC FUND

In the opinion of the Manager, the accompanying unaudited financial statement ofPheim Asia Ex-Japan Islamic Fund are drawn up in accordance with MalaysianFinancial Reporting Standards, International Financial Reporting Standards andSecurities Commission's Guidelines on Unit Trust Funds in Malaysia so as to give a trueand fair view of the unaudited financial position of Pheim Asia Ex-Japan Islamic Fundas at 30 June 2015 and of its results, changes in net asset value and cash flows for theperiod then ended.





PAXJI

PHEIM ASIA EX-JAPAN ISLAMIC FUND



Note 30.06.2015 30.06.2014

RM RM

INVESTMENT INCOME


Profit from Shariah-compliant deposits with licensed financial

institutions 32,345 23,353

Net gain on financial assets at fair value through:

- profit or loss ("FVTPL") 8 446,314 589,955


548,824 692,432

EXPENDITURE

Manager's fee 4 72,973 71,729


Audit fee 4,062 4,321



108,536 102,117


Income tax expenses 6 - -Net income for the period 440,288 590,315



Net realised gain 321,085 727,320

Net unrealised gain/(loss) 119,203 (137,005)440,288 590,315


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Note 30.06.2015 30.06.2014

RM RM

ASSETS

Quoted Shariah-compliant investments 7 6,707,758 8,213,751

9 1,847,141 1,402,265




Cash at bank 104,679 143,023TOTAL ASSETS 8,944,324 9,815,318

LIABILITIES

Amount due to brokers - -





EQUITY


Accumulated losses (2,164,871) (2,326,987)

TOTAL EQUITY 12 8,917,518 9,716,776





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Note 12(a) Note 12(b)

and (c )

RM RM RM RM

At 1 January 2014 11,092,899 (2,917,302) - 8,175,597

11,092,899 (2,917,302) - 8,175,597

Total comprehensive loss for

the period 590,315 - 590,315


Cancellation of units (1,963,373) - - (1,963,373)

Distribution equalisation (118,354) - - (118,354)Balance at 30 June 2014 12,043,764 (2,326,987) - 9,716,777

At 1 January 2015 12,254,512 (2,605,159) - 9,649,353

12,254,512 (2,605,159) - 9,649,353


the period - 440,288 - 440,288


Cancellations of units (1,655,520) - - (1,655,520)

Distribution equalisation 245,277 - - 245,277Balance at 30 June 2015 11,082,389 (2,164,871) - 8,917,518

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01.01.2015 01.01.2014

to to

30.06.2015 30.06.2014

RM RM



Proceeds from sale of Shariah-compliant investments 3,391,864 2,719,979

Purchase of Shariah-compliant investments (3,872,878) (3,894,526)


Profits received from Shariah-compliant deposits with licensed - -

financial institutions 32,744 23,575




Net cash (used in)/from operating and investing activities (512,008) (1,194,487)


Proceeds from creation of units 194,492 2,612,147

Payment for cancellation of units (1,370,414) (1,595,908)

Net cash (used in)/generated from financing activities (1,175,922) 1,016,239


AND CASH EQUIVALENTS (1,687,930) (178,248)





Shariah-compliant deposits with licensed financial institutions

(Note 9) 1,847,141 1,402,265

Cash at bank 104,679 143,0231,951,820 1,545,288


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Pheim Asia Ex-Japan Islamic Fund ("the Fund") was established pursuant to a Deed dated 12September 2006 as amended by the Supplemental Deed dated 3 December 2008 and a SecondSupplemental Master Deed dated 30 April 2015 made between Pheim Unit Trusts Berhad ("theManager") and Maybank Trustees Berhad ("the Trustee").

The principal activity of the Fund is to invest in "Permitted Investments" as defined under Part 7 ofthe Deed, which includes investments in equities and fixed income securities traded on BursaMalaysia or any other markets considered as an Eligible Market. The Fund commenced operations on1 November 2006 and will continue its operations until terminated by Trustee as provided under Part12 of the Deed.

The Manager is a public limited company incorporated in Malaysia. It is a wholly owned subsidiaryof the Pheim Asset Management Sdn Bhd, a private company incorporated in Malaysia. Its principalactivity is the management of unit trust funds. Pheim Asset Management Sdn. Bhd. has beenappointed by the Manager as the External Investment Manager of the Fund with responsibility for theprovision of investment management services to the Fund.

The principal place of business of the Fund is located at 7th Floor, Menara Hap Seng, Jalan P.Ramlee, 50250 Kuala Lumpur.


The unaudited financial statements were authorised for issue by the Board of Directors of theManager in accordance with the resolution of the directors on 21 August 2015.

The unaudited financial statements of the Fund have been prepared in accordance with MalaysianFinancial Reporting Standards ("MFRSs"), International Financial Reporting Standards ("IFRSs") andthe Securities Commission's Guidelines on Unit Trust Funds in Malaysia.

The unaudited financial statements of the Fund are prepared under the historical cost conventionunless otherwise indicated in the summary of significant acounting policies.

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2.2 Basis of Measurement (Cont'd)

2.3 Application of Amendments to MFRSs and IC Interpretations


(b) Amendments to MFRS 139, Novation of Derivatives and Continuation of Hedge

Accounting

The accounting policies applied by the Fund are consistent with those applied in the previous financial

year other than the application of the new and revised MFRSs, Issues Committee ("IC") Interpretations

and amendments to MFRSs and IC Interpretations as disclosed in Note 2.3 below.

During the financial year, the Fund has applied the following amendments of MFRSs issued bythe Malaysian Accounting Standards Board ("MASB") which are effective for accounting periodbeginning on or after 1 January 2014 :-

Amendments to MFRS 132- Offsetting Financial Assets and Financial LiabilitiesAmendmetns to MFRS 139- Novation of Derivatives and Continuation of Hedge Accounting

The Amendments clarify the requirements relating to the offset of financial assets andfinancial liabilities. Specifically, the Amendments clarify the meaning of 'currently has alegally enforceable right of set-off' and 'simultaneous realisation and settlement'.

The Amendments have been applied retrospectively and the application has no impact onthe disclosures or the amonuts recognised in the Fund's financial statements.

The Amendments introduce a narrow-scope exception to the requirement for thediscontinuation of hedge accounting in MFRS 139, Financial Instrments: Recognition andMeasurement. Specifically, the Amendments provide relief from discontinuing hedgeaccounting when a novation of a derivative as a hedging instruments meets certain criteria.

The Amendments have been applied retrospectively and the application has no impact onthe disclosures or the amonuts recognised in the Fund's financial statements.

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2.4


Amendments to MFRS 119, Defined Benefit Plans : Employee Contributions




MFRS 14, Regulatory Deferral Accounts

Amendments to MFRS 10 and MFRS 128 - Sale or Contribution of Assets between an Investor

and its Associate or Joint Venture

Amendments to MFRS 10, MFRS 12 and MFRS 128 - Investment Entities: Applying the

Consideration Exception



Amendments to MFRS 116 and MFRS 138 - Clarification of Acceptable Methods of

Depreciation and Amortisation









summarised below:-



The Fund has not early adopted the following new MFRSs and amendments to MFRSs that have

been issued by the MASB but are not yet effective :-

The Fund will apply the above new MFRSs and amendments to MFRSs that are applicable once

they become effective. The main features of the new applicable standards and amendments to

The Standard replaces earlier versions of MFRS 9 and introduces a package of improvements which

includes a classification and measurement model, a single forward-looking ‘expected loss’

impairment model and a substantially-reformed approach to hedge accounting.

• Under MFRS 9, all recognised financial assets are required to be subsequently measured at either

amortised cost, fair value through other comprehensive income ("FVTOCI") or fair value through

profit or loss ("FVTPL") on the basis of both an entity's business model for managing the financial

assets and the contractual cash flow characteristics of the financial assets. These requirements

improve and simplify the approach for classification and measurement of financial assets as the

numerous categories of financial assets under MFRS 139 had been replaced.

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MFRS 9, Financial Instruments (IFRS 9 issued in July 2014) [cont'd.]

The initial application of MFRS 9 may have an impact on the financial statements of the Fund.

However, it is not practicable to provide a reasonable estimate of the effect until a detailed review

has been completed. The initial application of other new MFRSs and amendments to MFRSs is not

expected to have any significant impact on the financial statements of the Fund.

• Most of the requirements in MFRS 139 for classification and measurement of financial liabilities

were carried forward unchanged to MFRS 9, except for the measurement of financial liabilities

designated as at FVTPL. Under MFRS 139, the entire amount of the change in the fair value of the

financial liability designated as FVTPL is presented in profit or loss. However, MFRS 9 requires

that the amount of change in the fair value of the financial liability that is attributable to changes in

the credit risk of that liability is presented in other comprehensive income, unless the recognition of

the effects of changes in the liability's own credit risk in other comprehensive income would create

or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial

liability's credit risk are not subsequently reclassified to profit or loss.

• In relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model,

as opposed to an incurred credit loss model under MFRS 139. Under MFRS 9, it is no longer

necessary for a credit event to have occurred before credit losses are recognised. Instead, an entity

always accounts for expected credit losses and changes in those expected credit losses at each

reporting date to reflect changes in credit risk since initial recognition.

• The new general hedge accounting requirements retain the three types of hedge accounting

mechanisms currently available in MFRS 139 i.e. fair value hedges, cash flow hedges and hedges of

a net investment in a foreign operation. MFRS 9 incorporates a new hedge accounting model that

aligns the hedge accounting more closely with an entity's risk management activities. The new

hedge accounting model has also expanded the scope of eligibility of hedge items and hedging

instruments respectively.

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Under MFRS 9, all recognised financial assets are required to be subsequently measured at

Financial assets are classified as financial assets at FVTPL if they are held for trading or aredesignated as such by the Manager upon initial recognition. Financial assets held for tradinginclude securities and fixed income securities acquired principally for the purpose of sellingthem in near term.

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value at thedate of the statement of financial position. Changes in the fair value of those financialinstruments are recorded in "Net gain or loss on financial assets at FVTPL". Interest earnedand dividend revenue elements of such instruments are recorded separately in "Interestincome" and "Dividend income", respectively. Foreign exchange differences on financialassets at FVTPL are not recognised separately in profit or loss but included in net gains or netlosses on changes in fair value of financial assets at FVTPL.

The Fund determines the classification of its financial assets at the initial recognition, and thecategories include financial assets at fair value through profit or loss, available-for-sale financialassets and loans and receivables.

Financial assets are recognised in the statement of financial position when, and only when, theFund becomes a party to the contractual provisions of the financial instruments. Regular way ofpurchase and sale of investments in financial instruments are recognised on trade dates. Whenfinancial assets are recognised initially, they are measured at fair value, plus attributabletransaction cost, for investment not at fair value through profit or loss.

The accounting policies set out below have been applied consistently to the periods, presented in thesefinancial statements and have been applied consistently by the Fund, unless otherwise stated.

AFS financial assets are financial assets that are designated as available for sale or are notclassified as financial assets at FVTPL or loans and receivables.

After initial recognition, AFS financial assets are measured at fair value. Gains or lossesfrom changes in fair value of the AFS financial assets are recognised in other comprehensiveincome, except that impairment losses, foreign exchange gains and losses on monetaryinstruments, dividend income and interest calculated using effective interest method arerecognised in profit or loss.

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(b) Available-for-sale ("AFS") financial assets (Contd.)


Financial assets with fixed or determinable payments that are not quoted in an active marketare classified as loans and receivables. The Fund includes short term receivables such asbalances due from broker, Manager and other receivables in the classification. Loans andreceivables are recognised initially at fair value including transaction costs.

Subsequent to initial recognition, loans and receivables are measured at amortised costusing effective interest method. Gains and losses are recognised in profit or loss when theloans and receivables are derecognised or impaired, and through the amortisation process.

The cumulative gain or loss previously recognised in other comprehensive income isreclassified from equity to profit or loss as a reclassification adjustment when the financialasset is derecognised. Interest income calculated using the effective interest method isrecognised in profit or loss. Dividends on an AFS equity instrument are recognised in profitor loss when the Fund's right to receive payment is established.

Fair value is the amount for which an asset could be exchanged, or liability settled, betweenknowledgeable, willing parties in an arm's length transaction. The fair value for financialinstruments traded in active markets at the reporting date is based on their quoted price orbinding dealer price quotations, without deduction for transaction costs.

A financial asset is derecognised when the asset is disposed and the contractual right toreceive cash flows from the asset has expired. On derecognition of a financial asset in itsentirety, the difference between the carrying amount and the sum of the considerationreceived and any cumulative gain or loss that had been recognised in other comprehensiveincome is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that requiredelivery of assets within the period generally established by regulation or convention in themarket place concerned. All regular way purchases and sales of financial assets arerecognised or derecognised on trade date, i.e. the date that the Fund commits to purchase or

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The Fund assesses at each reporting date whether there is any objective evidence that a financialasset is impaired.

Significant or prolonged decline in fair value below cost, weaken fundamental, significantfinancial difficulties of the issuer or obligor, and the disappearance of an active tradingmarket are considerations to determine whether there is objective evidence that investmentsecurities classified as AFS financial assets are impaired. At end of each financial year, theManager would receive impairment proposal from the Fund's external investment manager,if any financial assets of the Fund, in their professional opinion, warrant an impairmentexercise.

If an AFS asset is impaired, an amount comprising the difference between its cost (net ofany principal payment and amortisation) and its current fair value, less any impairment losspreviously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on AFS equity investments are not reversed in profit or loss in thesubsequent period. Increase in fair value, if any, subsequent to impairment loss isrecognised in other comprehensive income. For AFS debt investments, impairment lossesare subsequently reversed in profit or loss, up to the amount previously recognised asimpairment loss, if an increase in the fair value of the investment can be objectivelyrelated to an event occurring after the recognition of the impairment loss in profit or loss.

To determine whether there is objective evidence that an impairment loss on financial assetshas been incurred, the Fund considers factors such as the probability of insolvency orsignificant financial difficulties of the debtor and default or significant delay in payments.

If any such evidence exists, the amount of impairment loss is measured as the differencebetween the asset's carrying amount and the present value of estimated future cash flowsdiscounted at the financial asset's original effective interest rate. The impairment loss isrecognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for allfinancial assets with the exception of trade receivables, where the amount is reducedthrough the use of an allowance account. When a trade receivable becomes uncollectible, itis written off against the allowance account.

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(b) Trade and other receivables and other financial assets carried at amortised cost (Contd.)



Unrealised gain and losses comprise changes in fair value of financial instruments for the periodfrom reversal of prior period's unrealised gain and losses for financial instruments which wererealised (i.e. sold, redeemed or matured) during the reporting period.

Realised gains and losses on disposals of financial instruments classified as part of "at fair valuethrough profit or loss" are calculated using weighted average method. They represent thedifference between an instrument's initial carrying amount and disposal amount, or cashpayment or receipts made of derivative contracts (excluding payments or receipts on collateralmargin accounts for such investments).

Financial liabilities are classified according to the substance of the contractual arrangementsentered into and the definition of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financialposition when, only when, the Fund becomes a party to the contractual provisions of thefinancial instrument. Financial liabilities are classified as other financial liabilities.

The Fund's financial liabilities which include trade and other payables are recognised initially atfair value plus directly attributable transaction costs and subsequently measured at the amortisedcost using effective interest method.

A financial liability is derecognised when the obligation under the liability is extinguished.Gains and losses are recognised in profit or loss when the liabilities are derecognised, andthrough the amortisation process.

If in a subsequent period, the amount of the impairment loss decreases and the decrease canbe related objectively to an event occurring after the impairment was recognised, thepreviously recognised impairment loss is reversed to the extent that the carrying amount ofthe asset does not exceed its amortised cost at the reversal date. The amount of reversal isrecognised in profit or loss.

191

PAXJI






Income distributions are at the discretion of the Manager. Income distribution to the Fund's

unitholders is accounted for as a deduction from realised reserves except where distribution is

sourced out of distribution equalisation which is accounted for as deduction from unitholders'

capital.

Cash and cash equivalents comprise cash at bank and deposits with financial institutions whichhave insignificant risk of changes in value.

The financial statements of the Fund are measured using the currency of the primary economicenvironment in which the Fund operates ("the functional currency"). The financial statements arepresented in Ringgit Malaysia (RM), which is also the Fund's functional currency.

In preparing the financial statements, transactions in currencies other than the Fund's functionalcurrency (foreign currencies) are recorded in the functional currency using the exchange ratesprevailing at the dates of the transactions. At the end of each reporting period, foreign currencymonetary assets and liabilities are translated at exchange rates prevailing at the end of thereporting period. Non-monetary items that are measured at fair value in a foreign currency aretranslated using exchange rates at the date when the fair value was determined.

Exchange differences arising from the settlement of foreign currency transactions and from thetranslation of foreign currency monetary assets and liabilities are recognised in profit or loss.

Exchange differences arising from the translation of non-monetary items carried at fair value areincluded in profit or loss for the period except for the differences arising on the translation ofnon-monetary items in respect of which gains or losses are recognised directly in equity.Exchange differences arising from such non-monetary items are recognised directly to equity.

The unitholders' contributions to the Fund meet the definition of puttable instruments classified asequity instruments under MFRS 132.

Distribution equalisation represents the average distributable amount included in the creation andcancellation prices of units. This amount is either refunded to unitholders by way of distributionand/or adjusted accordingly when units are cancelled.

192

PAXJI



3.10 Income Tax



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


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

Current tax assets and liabilities are measured at the amount expected to be recovered from orpaid to the tax authorities. The tax rates and tax laws used to compute the amount are those thatare enacted or substantively enacted by the reporting date.



The preparation of financial statements in accordance with MFRS and IFRS requires the use ofcertain accounting estimates and exercise of judgements. Estimates and judgements arecontinually evaluated and are based on past experience, reasonable expectations of future eventsand other factors.

No major judgements have been made by the Manager in applying the Fund's accounting policies.There are no key assumptions concerning the future and other key sources of estimationuncertainty at the reporting date, that have significant risk of causing material adjustment to thecarrying amounts of assets and liabilities within next year.

For management purposes, the Fund is managed by 2 main portfolios, namely (1) equitysecurities and (2) fixed income instruments. Each segment engages in separate business activitiesand the operating results are regularly reviewed by the Manager, External Investment Managerand the Fund's Investment Committee. The External Investment Manager and the FundInvestment Committee jointly assumes the role of chief operation decision maker, forperformance assessment purposes and to make decision about resources allocated to eachinvestment segment.

193

PAXJI

4. MANAGER'S FEE

5. TRUSTEE' S FEE

6. TAXATION

30.06.2015 30.06.2014

RM RM

Current year Malaysian tax - -

(Over)/Under provision in prior years - -

Malaysian tax (income)/expense based onresults for the period - -

30.06.2015 30.06.2014

RM RM

Net Income before tax 440,288 590,315

Tax at Malaysian statutory rate of 25% (2014:25%) 110,072 147,579

Tax effects of:


Expenses not deductible for tax purposes 7,875 6,516

Restriction on tax deductible expenses for unit trust funds 19,259 19,013

(Over)/Underprovision of prior years - -Tax (income)/expense for the period - -

Income tax is calculated at the Malaysian statutory tax rate of 25% (2014 : 25%) of the estimatedassessable income for the period.

The tax charge for the period is in relation to the taxable income earned by the Fund after deductingtax allowable expenses. In accordance with Schedule 6 of the Income Tax Act 1967, profit incomeearned by the Fund is exempted from tax.

A reconciliation of tax expense/(income) applicable to income/(loss) before tax at the statutoryincome tax rate to tax (income)/expense at the effective income tax rate of the Fund is as follows:

The Manager is entitled to an annual management fee of 1.50% per annum of the NAV of the Fund(before deducting the Manager's and Trustee's fees for the day) calculated and accrued on a daily basis.

The Trustee is entitled to a fee of 0.07% per annum of the NAV of the Fund (before deducting theManager's and Trustee's fee for the day) calculated and accrued on a daily basis, subject to a minimimof RM18,000 per annum.

194

PAXJI

7. QUOTED SHARIAH-COMPLIANT INVESTMENTS

30.06.2015 30.06.2014

Financial assets at fair value through profit or loss RM RM

(Note 8)

Ouoted Shariah-compliant equities:

- in Malaysia 3,397,846 4,200,446

- outside Malaysia 3,309,912 4,013,3056,707,758 8,213,751


30.06.2015 30.06.2014

RM RM

Financial assets at FVTPL:Quoted Shariah-compliant equities 6,707,758 8,213,751


Realised gain/(loss) on disposals 119,203 (137,005)

Unrealised gain on changes in fair values 327,111 726,960446,314 589,955

The currency exposure profile of financial assets at

FVTPL is as follows :

- Ringgit Malaysia 3,397,846 4,200,446

- Hong Kong Dollar 1,340,774 1,328,677

- Indonesian Rupiah 649,992 1,083,272

- Philippine Peso 254,568 288,199

- South Korean Won 92,536 236,866

- Thai Baht 589,983 351,560

- Singapore Dollar 96,126 149,013

- New Taiwan Dollar 285,933 575,7186,707,758 8,213,751

195

PAXJI




RM RM NAV


- IN MALAYSIA

Main Market

Construction

Ho Hup Construction Co.Bhd 260,000 370,776 309,400 3.47


310,500 491,829 423,530 4.75

Consumer Products

Sasbadi Holdings Bhd 50,000 90,006 117,500 1.32

Tek Seng Holdings Bhd 245,000 142,599 126,175 1.41

295,000 232,605 243,675 2.73

Industrial Products

Can-One Bhd 52,000 174,321 130,520 1.46

Evergreen Fibreboard Bhd 231,000 193,728 309,540 3.47

Jaya Tiasa Holdings Bhd 120,000 317,580 181,200 2.03

Malaysia Steel Works KL Bhd 66,000 67,509 40,920 0.46

Supermax Corp Bhd 50,000 106,728 103,500 1.16

Ta Ann Holdings Bhd 47,000 205,572 178,600 2.00

566,000 1,065,438 944,280 10.58

Plantation

Hap Seng Plantations Holdings Bhd 75,000 206,279 183,750 2.06


127,000 516,228 426,070 4.78

Properties

Hua Yang Bhd 48,000 101,144 91,680 1.03

Land & General Bhd 192,000 121,674 82,560 0.93

Matrix Concepts Holdings Berhad 81,500 123,814 252,650 2.83

Metro Kajang Holdings Bhd 48,000 185,326 102,240 1.15

Tambun Indah Land Bhd 56,000 108,705 92,960 1.04

425,500 640,663 622,090 6.98

196

PAXJI



RM RM NAV


- IN MALAYSIA

Technology

Inari Amertron Bhd 85,000 291,178 276,250 3.10

Malaysian Pacific Industries 24,600 88,664 161,868 1.82

Unisem (M) Bhd 12,000 24,334 27,840 0.31

121,600 404,176 465,958 5.23

Trading/Services

Berjaya Auto Bhd 9,100 20,931 24,388 0.27


Tenaga Nasional Bhd 3,500 50,943 44,170 0.50

379,600 319,170 272,243 3.05

TOTAL QUOTED SHARIAH-

COMPLIANT EQUITIES

- IN MALAYSIA 2,225,200 3,670,109 3,397,846 38.10


- OUTSIDE MALAYSIA


AAC Technologies Holdings Inc 13,500 288,383 286,993 3.22China National Offshore Oil Corp 30,000 191,582 160,243 1.80

Consun Pharmaceutical Group 98,000 271,258 263,161 2.95

Goldpac Group Ltd 25,000 70,061 59,836 0.67

Real Gold Mining Ltd * 60,000 368,936 44,229 0.50

Termbray Petro King Oilfield 140,000 202,443 72,192 0.81

Tongda Group Holdings Ltd 286,000 141,167 207,304 2.32

Xinchen China Power Holdings 168,000 287,286 246,816 2.77

820,500 1,821,116 1,340,774 15.04

Jakarta Stock Exchange

("JSX")

Bekasi Fajar Industrial Estate 1,900,000 305,653 214,776 2.41

Kawasan Industri Jababeka TB 1,200,000 108,405 88,511 0.99

Sampoerna Agro TBK PT 230,200 153,112 110,918 1.24

United Tractor TBK PT 41,000 326,811 235,787 2.64

3,371,200 893,981 649,992 7.28

197

PAXJI



RM RM NAV


- OUTSIDE MALAYSIA (Contd.)

Korea Stock Exchange

(''KE'')

LG Electronics Inc 580 170,601 92,536 1.04

Thailand Stock Exchange

("SET")

GFPT Public Co Ltd-NVDR 66,000 97,796 88,284 0.99

Malee Sampran Public Co-NVDR 60,000 218,012 214,023 2.40

Total Access Communication-NVDR 31,000 319,031 287,676 3.23

157,000 634,839 589,983 6.62

Philippines Stock Exchange

("PSE")

EEI Corporation 314,000 260,874 254,568 2.85

Singapore Stock Exchange

("SGX")

CNMC Goldmine Holdings Ltd 140,000 109,805 96,126 1.08

198

PAXJI



RM RM NAV


- OUTSIDE MALAYSIA (Contd.)

Taiwan Stock Exchange

("TWSE")

AIC Inc 6,000 116,017 92,315 1.04

Chaun-Choung Technology Corp 8,000 78,402 74,927 0.84

La Kaffa International Co Ltd 10,000 119,192 118,691 1.33

24,000 313,611 285,933 3.21

TOTAL QUOTED SHARIAH-

COMPLIANT EQUITIES

- OUTSIDE MALAYSIA 4,827,280 4,204,827 3,309,912 37.12

TOTAL FINANCIAL ASSETS

AT FVTPL 7,874,936 6,707,758 75.22

EXCESS OF FAIR VALUE

OVER COST (1,167,178)

* This security has been suspended since 27 May 2011 and its fair value has been determined bythe Manager with the consent of the Trustee.

199

PAXJI

9. SHARIAH-COMPLIANT DEPOSITS WITH LICENSED FINANCIAL INSTITUTIONS

30.06.2015 30.06.2014

RM RM


Average

remaining

WAEPR maturities

30.06.2015 30.06.2014 30.06.2015 30.06.2014

% % Days Days

Licensed investment banks 3.12 2.81 9 5


30.06.2015 30.06.2014

RM RM

Amount arising from release of units (54) 71,081

Management fee 12,758 12,507

12,704 83,588


There is no income distribution to unitholders for the financial year ended 31 December 2014.

The weighted average effective profit rate ("WAEPR") per annum and the average remainingmaturities of deposits and placement are as follows:

200

PAXJI

12. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS

Note 30.06.2015 30.06.2014

RM RM

Unit holders' capital (a) 11,082,389 12,043,763

Retained earnings

- Realised (losses)/earnings (b) 819,633 169,942- Unrealised losses (c) (2,984,504) (2,496,929)

(2,164,871) (2,326,987)Total equity / Net asset value 8,917,518 9,716,776


Number Number



of year 9,786,315 12,254,512 8,595,137 11,092,899

Add: Creation of units 185,695 238,120 2,735,548 3,032,591

Less: Cancellation of units (1,317,556) (1,655,520) (1,730,331) (1,963,373)

Distribution equalisation - 245,277 - (118,354)Balance at end of period 8,654,454 11,082,389 9,600,354 12,043,763


30.06.2015 30.06.2014

RM RM

Balance at the beginning of the year 706,635 307,126

Net income after tax 440,288 590,315


Shariah-compliant investments held

transferred to unrealised reserve (327,111) (726,960)

Net unrealised foreign exchange loss


items transferred to unrealised reserve (179) (539)Balance at the end of period 819,633 169,942

01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014

In accordance with Article 6.1.1 of the Deed and Securities Commission's approval letter dated 14August 2006, the maximum number of units that can be issued for circulation is 200,000,000 units. Asat 30 June 2015, the number not yet issued is 191,345,546 units (30 June 2014: 190,399,646 ).

201

PAXJI



30.06.2015 30.06.2014

RM RM

Balance at the beginning of period (3,311,794) (3,224,428)


Shariah-compliant investment held

transferred from realised reserve 327,111 726,960

reserve 179 539Balance at the end of period (2,984,504) (2,496,929)




to unitholders for





to unitholders per


30 June 2015 30 June 2014

A reconciliation of net asset value attributable to unitholders for issuing/redeeming units and the netasset value attributable to unitholders per the financial statements is as follows:-


Quoted financial assets in the financial statements have been valued at the bid prices at the close ofbusiness in accordance with the provisions of MFRS 139. For the purpose of calculation of net assetvalue attributable to unitholders per unit for the issuance and redemption of units in accordance withthe Deed, quoted financial assets are stated at the last done market price.

202

PAXJI


30.06.2015 30.06.2014


units NAV units NAV

RM RM

Directors of the Manager # 394,621 406,618 - -

#



Value of % of Total Brokerage % of Total

Trade Trade Fees Brokerage Fees

RM % RM %

MIDF Amanah Investment Bank 4,347,632 31.80 - -

Berhad

KAF Investment Bank Bhd 1,800,000 13.17 - -

DBS Vickers Securites Pte Ltd 1,005,610 7.36 2,511 13.72

- Hong Kong

Fubon Securities Companies Ltd 733,388 5.36 1,645 8.99

PT Danareksa - Indonesia 675,899 4.94 1,854 10.13

CIMB-GK Securities Pte Ltd 655,728 4.80 1,638 8.95

- Hong Kong

Maybank Investment Bank Berhad 391,331 2.86 805 4.40

RHB Investment Bank Bhd 384,378 2.81 865 4.72

RHB OSK Securities (Hong Kong) 365,873 2.68 563 3.08

Limited

DBS Vickers Securites Pte Ltd 332,500 2.43 833 4.55

- Korea

Others brokers 2,978,925 21.79 7,588 41.46

13,671,264 100.00 18,302 100.00


30.06.2015 30.06.2014


Details of transactions with stockbroking companies and other investment banks for the financial ended30 June 2015 are as follows:

This is the ratio of the sum of the fees (inclusive of the manager's, trustee's, audit and other professionalfees) and other administrative expenses of the Fund to the average NAV of the Fund calculated on adaily basis. The average NAV of the Fund for the period ended 30 June 2015 was RM9,517,844 (30June 2014: RM9,680,386).

The Directors of the Manager are the legal and beneficial owners of the units.

203

PAXJI


30.06.2015 30.06.2014



01.01.2015 to 30.06.2015 01.01.2014 to 30.06.2014Shariah- Shariah-

compliant compliant

Deposits Deposits

Equity and sukuk Total Equity and sukuk Total



Profit from Shariah-compliant

deposits with licensed financial

institution - 32,345 32,345 - 23,353 23,353

Net (loss)/gain from Shariah-

compliant investments:

- financial assets at FVTPL 446,314 - 446,314 589,955 - 589,955

Net realised gain/(loss) on

foreign exchange (179) - (179) (539) - (539)

Total segment operating

income for the period 516,478 32,345 548,823 669,079 23,353 692,432

Shariah-compliant deposits with

financial institution - 1,847,141 1,847,141 - 1,402,265 1,402,265

Financial assets at FVTPL 6,707,758 - 6,707,758 8,213,751 - 8,213,751Other assets 27,550 235 27,785 34,255 107 34,362



This is the ratio of the average of acquisitions and disposals of Shariah-compliant investments for theyear to average NAV of the Fund for the year calculated on daily basis.

The Manager and Investment Committee of the Fund are responsible for allocating resources availableto the Fund in accordance with the overall investment strategies as set out in the investment Guidelinesof the Fund. The Fund is managed by two segments:

A portfolio of Shariah-compliant equity instruments. A portfolio of Shariah-compliant financial instruments, i.e.Shariah-compliant deposits with

financial institutions.

The investment objective of each segment is to achieve consistent returns from the investments in eachsegment while safeguarding capital by investing in diversified portfolios. There have been no changesin reportable segments in the current financial year. The segment information provided is presented tothe Manager, the appointed External Investment Manager and Investment Committee of the Fund.

204

PAXJI


30.06.2015 30.06.2014

RM RM

Net reportable segment operating income 548,824 692,432

Expenses (108,536) (102,117)


Tax Income / (expense) - -Net income for the year 440,288 590,315

30.06.2015 30.06.2014

RM RM



Amount due from Broker 252,130 -

Cash at bank 104,679 143,023









Expenses of the Fund are not considered part of the performance of any operating segment. Thefollowing table provides a reconciliation between reportable segment income/(loss) and operatingprofit/(loss).

In addition, certain assets and liabilities are not considered to be part of the assets or liabilities of anindividual segment. The following table provides reconciliation between the total reportable segmentassets and liabilities and total assets and liabilities of the Fund.

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at eitherfair value or at amortised cost based on their respective classification. The significant accountingpolicies in Note 2 describe how the classes of financial instruments are measured, and howincome and expenses, including fair value gains and losses are recognised. The following tableanalyses the financial assets and liabilities of the Fund in the statement of financial position, bythe class of financial instrument to which they are assigned, and therefore by the measurementbasis.

205

PAXJI



Financial

liabilitiesFinancial at

assets at Loans and amortisedFVTPL receivables cost Total

RM RM RM RM30 June 2015

Assets

Quoted Shariah-compliantequities 6,707,758 - - 6,707,758

Shariah-compliant deposits withlicensed financial institutions - 1,847,141 - 1,847,141

Amount due from brokers - 252,130 - 252,130Other receivables - 27,785 - 27,785

Cash at bank - 104,679 - 104,679Total financial assets 6,707,758 2,231,735 - 8,939,493


Liabilities

Amount due to Manager - - 12,704 12,704Amount due to Trustee - - 1,673 1,673

Other payables - - 12,429 12,429Total financial liabilities - - 26,806 26,806

30 June 2014

AssetsQuoted Shariah-compliant

equities 8,213,751 - - 8,213,751

Shariah-compliant deposits withlicensed financial institutions - 1,402,265 - 1,402,265

Other receivables - 34,362 - 34,362Cash at bank - 143,023 - 143,023

Total financial assets 8,213,751 1,579,650 - 9,793,401


Liabilities

Amount due to Manager - - 83,588 83,588Amount due to Trustee - - 1,529 1,529

Other payables - - 13,425 13,425Total financial liabilities - - 98,542 98,542

206

PAXJI


(b) Fair Value


Level 1 Level 2 Level 3 Total

RM RM RM RM

As at 30 June 2015

Financial asset at FVTPL- Quoted Securities 6,663,529 - 44,229 6,707,758

As at 30 June 2014

Financial asset at FVTPL- Quoted Securities 8,176,092 - 37,659 8,213,751

The Fund uses the following level of fair value hierarchy for determining and disclosing the fairvalue of financial instruments carried at fair value in the statement of financial position.


Level 2: Inputs other than quoted prices included within Level 1 that are observable forthe asset or liability either directly or indirectly


The Fund’s financial assets at FVTPL and AFS financial assets are carried at fair value. The fairvalues of these financial assets were determined using prices in active markets for identicalassets.

Quoted equity instrumentsFair value of quoted equity instruments is determined directly by reference to their publishedmarket bid prices on the relevant stock exchanges at the reporting date. The fair value of quotedequity instruments which have lost active trading market due to suspension in their trading, isdetermined by reference to their published net tangible assets.

The Fund held the following financial instruments carried at fair value on the statement offinancial position as at the period ended 30 June 2014:

207

PAXJI



(i) Financial instruments that are carried at fair value (Contd.)

2015 2014

RM RM

Financial assets at FVTPLBalance at 1 January 40,977 38,388

Total loss recognised in profit or loss :

- Net loss on financial assets at FVTPL 3,252 (729)

Transfer from Level 1 - -

Balance at 30 June 44,229 37,659



The Fund maintains investment portfolios in a variety of quoted and unquoted financial instruments asdictated by its Deed and investment management strategy.

The following table shows a reconciliation from the beginning balance to the ending balancefor the fair value measurement under Level 3 of the fair value hierarchy :

Financial instruments not carried at fair value comprise financial assets and financialliabilities classified as loans and receivables and financial liabilities at amortised costrespectively. The carrying amount of these financial instruments at the end of the financialyear approximated their fair values due to their short term to maturity.

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

The Fund’s objective in managing risk is the creation and protection of unitholders’ value. Risk isinherent in the Fund’s activities, but it is managed through a process of ongoing identification,measurement and monitoring of risks. Financial risk management is also carried out through soundinternal control systems and adherence to the investment restrictions as stipulated in the Trust Deed,the Securities Commission’s Guidelines on Unit Trust Funds and the Capital Market and ServicesAct, 2007.

208

PAXJI


(i) Market Risk


Effect on profit

Change in Shariah-compliant or loss and equity

equity price (%) Increase/(Decrease)

RM

30 June 2015

+6/-6 402,465 /(402,465)

30 June 2014

+6/-6 492,825 /(492,825)


The Fund's principal exposure to market risk arises primarily due to changes or developments inthe market environment and typically includes changes in regulations, politics and the economyof the country. Market risk is also influenced by global economics and geopoliticaldevelopments. The Fund seeks to diversify away some of this risk by investing into differentsectors to mitigate risk exposure to any single asset class.

The Fund’s market risk is affected primarily due to changes in market prices, interest rates andforeign currency exchange rates.

Equity price risk is the adverse changes in the fair value of Shariah-compliant equities as aresult of changes in the levels of Shariah-compliant equity indices and the value ofindividual Shariah-compliant shares. The equity price risk exposure arises from the Fund’sinvestments in quoted Shariah-compliant equity securities.

The table below summarises the effect of sensitivity from the Fund’s underlyinginvestments in quoted Shariah-compliant equities on the profit or loss and equity of theFund due to possible changes in Shariah-compliant equity prices, with all other variablesheld constant:

This risk refers to the effect of interest rate changes on the demand for sukuk and Shariah-compliant deposits with financial institutions. In the event of rising interest rates, thereturn on Shariah-compliant deposits with financial institutions will rise while demand forsukuk will decrease and vice versa, thus affecting the net asset value of the Fund. This riskwill be minimized via the management of the duration structure of the portfolio of sukukand Shariah-compliant deposits with financial institutions.

Interest rate is a general economic indicator that will have an impact on the management offund regardless of whether it is a Shariah-compliant fund or otherwise. It does not in anyway suggest that this fund will invest in conventional financial instruments. Allinvestments carried out for this fund are in accordance with requirement of the Shariah.

The following table demonstrates the sensitivity of the profit or loss and equity of the Fundto a reasonably possible change in interest rates, with all other variables held constant:

209

PAXJI



(b) Interest Rate Risk (Contd.)

Effect on profit

or loss and equity

Change in basis point * Increase/(Decrease)

RM

30 June 2015+25/-25 2,767/(2,767)

30 June 2014+25/-25 3,263/(3,263)

*

(c) Currency Risk

30.06.2015 30.06.2014

RM RM

Hong Kong Dollar 134,077 132,868

Indonesian Rupiah 64,999 108,327

South Korean Won 9,254 23,687

Thai Baht 58,998 35,156

Philippines Peso 25,457 28,820

Singapore Dollar 9,613 14,901

New Taiwan Dollar 28,593 57,572330,991 401,331

Effect on profit

or loss and equity

The assumed movement in basis points for interest rate sensitivity analysis is based on thecurrently observable market environment.

The Fund is exposed to currency risk primarily through its investment in overseas Shariah-compliant quoted equities that are denominated in foreign currencies. The Fund's foreigncurrency exposure profile of its investment in Shariah-compliant quoted equities has beendisclosed under Note 7. The currency risk is minimised by proper portfolio allocation and toavoid concentration in a single country.

A 10% strenghtening or weakening of the RM against the following foreign currencies as atthe end of the financial year would have decreased or increased respectively the profit orloss and equity of the Fund by the amount shown below. This analysis assumes all othervariables are held constant.

210

PAXJI


(ii) Credit Risk


1 month - 3 Above

30.06.2015 months 3 months Total

RM RM RM

Financial Assets



Other assets 384,594 - 384,594

Total undiscounted


Non-Financial Assets


Total Assets 8,939,493 4,831 8,944,324

Financial Liabilitites

Other liablities 14,377 12,429 26,806

Total undiscounted

financial liabilities 14,377 12,429 26,806

Unitholders' NAV 8,917,518 - 8,917,518

Liquidity gap 7,598 (7,598)

The Fund’s principal exposure to credit risk arises primarily due to changes in the financialconditions of companies issuing sukuk, which may affect their creditworthiness. This in turnmay lead to default in the payment of principal and profit. Such events can lead to loss of capitalor delayed or reduced income for the Fund resulting in a reduction in the Fund’s asset value andthus unit price. This risk is mitigated by vigorous credit analysis and diversification of the sukukportfolio of the Fund.

As at the end of period, the Fund do not have any investment in sukuk.

This risk occurs in thinly traded or illiquid Shariah-compliant securities. Should the Fund needto sell a relatively large amount of such securities, the act itself may significantly depress theselling price. As the Fund is exposed to daily redemption of units, the risk is minimized byplacing a prudent level of funds in short-term Shariah-compliant deposits and by investing inShariah-compliant stocks whose liquidity is adjudged to be commensurate with the expectedexposure level of the Funds.

The following table summarises the maturity profile of the Fund’s financial liabilities and thecorresponding assets available to meet commitments associated with those financial liabilitiesand redemption by the unitholders.

211

PAXJI



1 month - 3 Above

30.06.2014 months 3 months Total

RM RM RM

Financial Assets



Other assets 177,385 - 177,385

Total undiscounted -


Non-Financial Assets


Total Assets 9,793,401 21,917 9,815,318

Financial Liabilitites

Other liablities 85,117 13,425 98,542

Total undiscounted

financial liabilities 85,117 13,425 98,542

Unitholders' NAV 9,716,776 - 9,716,776

Liquidity gap (8,492) 8,492



The Fund is exposed to the individual risk of the respective companies issuing Shariah-compliant securities which includes changes to the business performance of the company,consumer tastes and demand, lawsuits and management practices. This risk is minimisedthrough the well diversified nature of the Fund.

The Fund’s exposure to Shariah-compliant securities issued by any issuer is limited to not morethan a certain percentage of its net asset value. Under such restriction, the risk exposure to thesecurities of any issuer is minimised.

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PAXJI


(vi) Reclassification of Shariah Status Risk

(vii) Capital Management

This risk refers to the risk that the currently held Shariah-compliant securities in the portfolio ofShariah-compliant funds may be reclassified to be Shariah non-compliant upon review of thesecurities by the Shariah Advisory Council of the Securities Commission of Malaysia("SACSC") performed twice yearly. If this occurs, the value of the Fund may be adverselyaffected where the Manager will take the necessary steps to dispose of such securities.

The capital is represented by unitholders’ subscription to the Fund. The amount of capital canchange significantly on a daily basis as the Fund is subject to daily redemption and subscriptionat the discretion of unitholders. The Manager manages the Fund’s capital with the objective ofmaximising unitholders' value, while maintaining sufficient liquidity to meet unitholders'redemption as explained in Note 20 (iii) above.

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Interim report cover page- 30062015 - Pheim Unit Trusts

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Transcript of Interim report cover page- 30062015 - Pheim Unit Trusts