Eastspring Investments Growth Fund

EASTSPRING INVESTMENTS
GROWTH FUND

ANNUAL REPORT

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019



Dear Valued Investor,

Greetings from Eastspring Investments Berhad!
First and foremost, we would like to take this opportunity to thank you for
choosing to invest with Eastspring Investments Berhad.
We are pleased to enclose a copy of the Annual/Interim/Quarterly Fund
Reports of Eastspring Investments Berhad’s fund(s) for the reporting
period ended 31 December 2019.
You may also download these reports from our website at
www.eastspring.com/my
Should you require any assistance, please do not hesitate to contact our
Client Services at 03-2778 1000.

Yours sincerely,

Raymond Tang Chee Kin
Non-Independent, Executive Director and Chief Executive Officer

TABLE OF CONTENTS 1
3
Fund Information 6
Key Performance Data 9
Manager’s Report 11
Market Review 14
Rebates and Soft Commissions
Statement by the Manager 15
Trustee’s Report to the Unit Holders of
16
Eastspring Investments Growth Fund 20
Independent Auditors‘ Report to the Unit Holders of 21
22
Eastspring Investments Growth Fund 23
Statement of Comprehensive Income 24
Statement of Financial Position 32
Statement of Changes In Equity 60
Statement of Cash Flows
Summary of Significant Accounting Policies
Notes to the Financial Statements
Corporate Directory

Annual Report

FUND INFORMATION

Name of Fund Eastspring Investments Growth Fund (the “Fund”)

Fund Category/ Equity/growth
Type

Fund Objective The Fund seeks to provide investors with long-term capital
appreciation by investing principally* in larger companies**
Performance which will appreciate in value.
Benchmark
* principally refers to minimum 50% of the Fund’s NAV.
** larger companies generally refers to companies with market

capitalisation of RM2 billion or above at the point of
acquisition.

ANY MATERIAL CHANGES TO THE FUND’S OBJECTIVE
WOULD REQUIRE UNIT HOLDERS’ APPROVAL.

The performance benchmark of the Fund is FTSE Bursa Malaysia
100 Index (“FBM100”).

Source: www.bursamalaysia.com

Note: The risk profile of the Fund is different from the risk
profile of the performance benchmark.

Fund Income Incidental

Distribution Policy

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Eastspring Investments Growth Fund

FUND INFORMATION (CONTINUED)

Breakdown of Unit As at 31 December 2019, the size of Eastspring InvestmentsUnits (Million)
Holdings by Size Growth Fund stood at 159.946 million units.

Fund Size

200
180
160
140
120
100

80
60
40
20

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019

Breakdown of Unit Holdings

Unit Holdings No. of No of %
Unit Units*
% (‘000)
Holders

5,000 units and below 984 19.99 3,029 1.89
5,001 to 10,000 units 1,002 20.35 7,193 4.50
10,001 to 50,000 units 2,270 46.11 52,314 32.71
50,001 to 500,000 units 66,655 41.67
500,001 units and above 651 13.22 30,752 19.23
Total 16 0.33 159,943 100.00

4,923 100.00

* excludes units held by the Manager.

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KEY PERFORMANCE DATA

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER

Category 2019 2018 2017
(%) (%) (%)

Quoted securities 1.36 0.69 7.48
Construction 14.89 16.29 -
Consumer Products & Services -
Energy 2.95 2.48
Financial Services 27.46 28.77 3.14
Health Care 20.18
Industrial Products & Services 8.18 8.16
Manufacturing 4.89 7.05 3.73
Plantation 1.48
Property - -
REITS 8.20 7.27 -
Technology 2.06 0.58 12.34
Telecommunications & Media 2.36 2.44
Trading/Services 2.76 5.26 1.39
Transportation & Logistics 10.24 3.20 25.61
Utilities
- - -
Cash and other assets 4.16 - 21.44
Total 9.78 7.91
99.29 90.10 -
0.71 9.90 -
100.00 100.00 96.79
3.21
100.00

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Eastspring Investments Growth Fund

KEY PERFORMANCE DATA (CONTINUED)

Category 2019 2018 2017

Net Asset Value (NAV) (RM'000) 98,186 114,309 130,836
Units In Circulation (Units '000) 159,946 183,012 170,891
Net Asset Value Per Unit (RM)
Highest Net Asset Value Per Unit (RM)# 0.6139 0.6246 0.7656
Lowest Net Asset Value Per Unit (RM)# 0.6432 0.6251 0.7657
Total Return (%) 0.5986 0.6172 0.7620
- Capital Growth
- Income Distribution (1.71) (18.43) 14.28
Total Return (%) - 5.41 5.16
Gross Distribution Per Unit (RM)
Net Distribution Per Unit (RM) (1.71) (14.01) 20.18
Management Expense Ratio (MER) (%)* - 0.0334 0.0393
Portfolio Turnover Ratio (PTR) (times)^ - 0.0257 0.0379

1.62 1.66 1.70
0.52 1.00 0.31

# Figures shown as ex-distribution.

* There were no significant changes to the MER during the period under review.

^ Lower PTR for Eastspring Investments Growth Fund in 2019 compare to 2018 was mainly due to
heighten market volatility in Malaysia equity market which can be attributed to impact of Sino-US
trade tension and post GE 14 extreme market gyration hence higher PTR in 2018.

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KEY PERFORMANCE DATA (CONTINUED)

1 year 3 years 5 years

1.1.2019 to 1.1.2017 to 1.1.2015 to

31.12.2019 31.12.2019 31.12.2019

(%) (%) (%)

Average total return (1.71) 0.52 1.05

Year ended 1.1.2019 to 1.1.2018 to 1.1.2017 to 1.1.2016 to 1.1.2015 to
31.12.2019 31.12.2018 31.12.2017 31.12.2016 31.12.2015

(%) (%) (%) (%) (%)

Annual total return (1.71) (14.01) 20.18 (1.83) 5.67

Source: The above total return of the Fund was sourced from Lipper for Investment Management.

Bases of calculation and assumptions made in calculating returns:

Percentage growth = NAVt -1
NAV0

NAVt = NAV at the end of the period
NAV0 = NAV at the beginning of the period
Performance annualised = (1 + Percentage Growth)1/n - 1

Adjusted for unit split and distribution paid out
for the period

n = Number of years

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

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Eastspring Investments Growth Fund

MANAGER’S REPORT

Fund Performance Over the 5-year period, the Fund recorded a return of 5.36%,
outperforming the benchmark return of -5.91% by 11.27%.

During the period under review, the Fund registered a return
of -1.71%, outperforming the benchmark return of -2.88% by
1.16%.

The outperformance was mainly due to sector and stock
selection. The Fund exposure to technology, financial and
consumer discretionary sectors which performed better relatively
vis-à-vis the broad market. The detractions came from exposure
to industrials, energy, and UW in consumer stapled stocks.

The Fund achieved its objective which is to provide investors with
long-term capital appreciation by investing principally in larger
companies which will appreciate in value.

Eastspring Investments Growth Fund 40%
- 5 Years Return Vs Benchmark

40%

30% 30%

5 years % Change 20% 20%

10% 10%

0% 0%

-10% -10%

-20% May Aug Dec Apr Aug Dec Apr Aug Dec Apr Aug Dec Apr Aug -20%
Dec 2015 2015 2015 2016 2016 2016 2017 2017 2017 2018 2018 2018 2019 2019 Dec
2014 2019

Eastspring Investments Growth Fund Benchmark

The performance is calculated on NAV-to-NAV basis with
gross income or dividend reinvested.

Benchmark: FTSE Bursa Malaysia 100 Index (“FBM100”).

Source: Lipper for Investment Management and
www.bursamalaysia.com, as at 31 December 2019.

Past performance of the Fund is not necessarily indicative
of its future performance.

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MANAGER’S REPORT (CONTINUED)

Analysis of Fund For the financial year ended 31 December 2019:
Performance

Income Capital Total Total Return of
Return Return* Return Benchmark

(%) (%) (%) (%)

0.00 (1.71) (1.71) (2.88)

* Capital return components (NAV per unit to NAV per unit).

Distribution/ No distribution or unit split were declared for the financial year
Unit Split ended 31 December 2019.

Investment The Fund adopted defensive strategy with focus on bigger
Strategy During cap stocks which can give investors good capital appreciation
the Period Under potential and strong fundamental.
Review

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Eastspring Investments Growth Fund

MANAGER’S REPORT (CONTINUED)

Asset Allocation 31-Dec 31-Dec
2019 2018
Asset Allocation (%) Changes
(%) (%)
99.29
Quoted securities 0.71 90.10 9.19
Cash and other assets 9.90 (9.19)

Asset Allocation as at 31 December 2019

Cash and other assets Quoted securities
0.71% 99.29%

There were no significant changes in asset allocation of the Fund
for the period under review.

State of Affairs of There have been neither significant change to the state of affairs
the Fund of the Fund nor any circumstances that materially affect any
interests of the unit holders during the period under review.

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MARKET REVIEW

For the 1Q2019, the FBM KLCI bucked the regional up-trend and was one of the worst
performing indices in emerging market. The regional uplift in sentiment was due to the
dramatic shift in US Federal Reserve policy to a more dovish stance and improving rhetoric
from the US-China trade talks. In addition, China’s fresh stimulus measures helped sustain
the positive sentiment. On the local front, investors were disappointed with Malaysian
corporates as reported results were once again disappointing. 2018 was the fourth year of
sub-par earnings growth. Towards the end of the 1Q2019, big cap stocks corrected post
the Invest Malaysia event held on 19-20 March, amidst the risk to earnings for banks due
to a possible rate cut, slower corporate earnings growth prospects and policy uncertainty.

The start of 2Q2019 saw regional markets rally on the back of positive US-China trade
talks prospects and improved global outlook. However, this quickly turned sour by the
month of May following the abrupt end of negotiations to the US-China trade deal with
the US raising tariffs on imports from China to 25% on USD200bn of goods effective 10th
May 2019. This was followed by steps to stifle China’s technology sector with what was
effectively a ban on American firms from supplying parts to Chinese telecommunications
giant Huawei Technologies. China retaliated with higher tariffs of up to 25% on US60bn
of US goods effective 1 June 2019, with the Chinese leadership hinting at further
retaliatory measures against the US. Regional markets rebounded in the month of June,
with news of US and China restarting their trade talks post the G20 meeting held in
Japan at the end of the month. Contrary to regional markets, the Malaysian equity
market struggled to perform early 2Q2019, dampened by news of the potential exclusion
of Malaysia from the FTSE Russel’s World Government Bond Index (“WBGI”) after
their review come September, weaker Malaysian Ringgit, cut in the OPR of 25bps, and
corporate results reporting that was not very inspiring.

The first two months of 3Q2019 saw regional markets correct largely due to an escalation
in the trade war and fear of increasing recession risks sparked by the further collapse in
global bond yields. President Trump announced an additional 10% tariff on a further
USD300bn in Chinese imports starting 1 September 2019, followed by the US designating
China as a “currency manipulator”. By the end of 3Q2019, global and regional equity
markets reversed some of the losses amid renewed optimism as US and China return to
the negotiation tables again. However, markets lost some momentum later in the month
following a drone attack on Saudi’s oil facilities and an impeachment inquiry launched
against the US President Trump. The Malaysian equity market remained weak in light of

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Eastspring Investments Growth Fund

the external headwinds faced. Domestically, the Malaysian ringgit depreciated by about
1.34% for the 3Q2019, given its correlation with the China’s CNY which depreciated
4.1% against the USD. Brent crude oil prices declined by 8.67% for the 3Q2019 on
concerns of slowing global growth and demand. The June 2019 results season reported
was uninspiring yet again with more downgrades in earnings by consensus. Investor
sentiment domestically weakened following the end to Axiata and Telenor Asia merger
talks due to “complexities”, which led to profit taking activities. FTSE Russell’s decision to
defer Malaysia’s exclusion from the World Global Bond Index (“WGBI”) and keeping it on
the watchlist, was a relief but could be a case of kicking the can down the road, with the
next review in March 2020.

Global equity markets ended the year with solid gains in general, as the US agreed to a
Phase 1 trade deal with China, and cancelled tariffs on US$160bn of Chinese goods due
to take effect on 15 December 2019. While details of the deal were hard to come by,
the agreement in principle lifted a cloud that had been hanging the global economy all
year. In addition, the decisive win by the ruling Conservative Party in the UK elections,
almost guarantees the UK will leave the EU on 31 January, albeit with a 23-month
transitory period, providing clarity on Brexit. Domestically, Malaysian equities continued
to be one of the worst performers in the region. During the 4Q2019, the Budget 2020
announced measures aimed at promoting jobs, FDIs and structural reforms, rather than
the traditional mega infrastructure pump-priming, and offered tax incentives that should
benefit the electronic and manufacturing sectors. Malaysian equities were also subject to
foreign outflows due to various index rebalancing activities. In November 2019, the MSCI
Emerging Market Index saw an estimated net outflow of USD300-400m. Results reporting
for 3Q2019 was uninspiring, which will likely see the KLCI earnings for 2019 report
another year of negative growth (2018: -2.8%).

The FBM KLCI closed the year under review at 1,588.76 points, down 6.02%. The broader
FBM Emas (“FBMEmas”) Index closed the period under review down by 1.77%. The MSCI
Asia Pacific ex-Japan Index declined by 15.85% in USD terms.1

1 Source: Bloomberg: World indices

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REBATES AND SOFT COMMISSIONS

During the period under review, the Manager and its delegates (if any) received goods and
services which directly assist the investment management of the Fund, including research
and advisory services, market analyses, data and quotation services, and computer
hardware and software used for and/or in support of the investment process of fund
managers.

The Manager and its delegates (if any) have not received any rebates or shared any
commissions from any brokers during the same period under review.

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EASTSPRING INVESTMENTS
GROWTH FUND

FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

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Eastspring Investments Growth Fund

STATEMENT BY THE MANAGER

We, Tang Chee Kin and Iskander Bin Ismail Mohamed Ali, being two of the Directors of
Eastspring Investments Berhad, do hereby state that, in the opinion of the Manager, the
accompanying financial statements set out on pages 20 to 59 are drawn up in accordance
with the provisions of the Deed and give a true and fair view of the financial position of
the Fund as at 31 December 2019 and of its financial performance, changes in equity and
cash flows for the financial year ended on that date in accordance with the Malaysian
Financial Reporting Standards and International Financial Reporting Standards.
For and on behalf of the Manager,
EASTSPRING INVESTMENTS BERHAD

TANG CHEE KIN
Executive Director/Chief Executive Officer

ISKANDER BIN ISMAIL MOHAMED ALI
Independent, Non-Executive Director

Kuala Lumpur
Date: 17 February 2020

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TRUSTEE’S REPORT TO THE UNIT HOLDERS OF
EASTSPRING INVESTMENTS GROWTH FUND

We have acted as Trustee for Eastspring Investments Growth Fund (the “Fund”) for
financial year ended 31 December 2019. To the best of our knowledge, for the financial
year under review, Eastspring Investments Berhad (the “Manager”) has operated and
managed the Fund in accordance with the following:-

a. limitations imposed on the investment powers of the Manager under the Deed(s),
the Securities Commission’s Guidelines on Unit Trust Funds, the Capital Markets and
Services Act 2007 and other applicable laws;

b. valuation and pricing for the Fund is carried out in accordance with the Deed(s) of the
Fund and any regulatory requirements; and

c. creation and cancellation of units for the Fund are carried out in accordance with the
Deed(s) of the Fund and any regulatory requirements.

For Deutsche Trustees Malaysia Berhad

Ng Hon Leong Richard Lim Hock Seng
Head, Trustee Operations Chief Executive Officer

Kuala Lumpur
Date: 17 February 2020

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Eastspring Investments Growth Fund

INDEPENDENT AUDITORS’ REPORT TO THE UNIT HOLDERS
OF EASTSPRING INVESTMENTS GROWTH FUND

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Our opinion
In our opinion, the financial statements of Eastspring Investments Growth Fund (“the
Fund”) give a true and fair view of the financial position of the Fund as at 31 December
2019, and of its financial performance and its cash flows for the financial year then ended
in accordance with Malaysian Financial Reporting Standards and International Financial
Reporting Standards.

What we have audited
We have audited the financial statements of the Fund, which comprise the statement
of financial position as at 31 December 2019, and the statement of comprehensive
income, statement of changes in equity and statement of cash flows for the financial year
then ended, and notes to the financial statements, including a summary of significant
accounting policies, as set out on pages 20 to 59.

Basis for opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia
and International Standards on Auditing. Our responsibilities under those standards
are further described in the “Auditors’ responsibilities for the audit of the financial
statements” section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

Independence and other ethical responsibilities
We are independent of the Fund in accordance with the By-Laws (on Professional Ethics,
Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in
accordance with the By-Laws and the IESBA Code.

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Information other than the financial statements and auditors’ report thereon

The Manager of the Fund is responsible for the other information. The other information
comprises Manager’s Report but does not include the financial statements of the Fund and
our auditors’ report thereon.
Our opinion on the financial statements of the Fund does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Fund, our responsibility is
to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the financial statements of the Fund or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.

Responsibilities of the Manager for the financial statements

The Manager of the Fund is responsible for the preparation of the financial statements
of the Fund that give a true and fair view in accordance with Malaysian Financial
Reporting Standards and International Financial Reporting Standards. The Manager is also
responsible for such internal control as the Manager determine is necessary to enable the
preparation of financial statements of the Fund that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements of the Fund, the Manager is responsible for assessing
the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the Manager
either intend to liquidate the Fund or have no realistic alternative but to do so.

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Eastspring Investments Growth Fund

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements
of the Fund as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance
with approved standards on auditing in Malaysia and International Standards on Auditing
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and
International Standards on Auditing, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatement of the financial statements
of the Fund, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.

b. Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Fund’s internal control.

c. Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Manager.

d. Conclude on the appropriateness of the Manager’s use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt
on the Fund’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the
related disclosures in the financial statements of the Fund or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditors’ report. However, future events or conditions
may cause the Fund to cease to continue as a going concern.

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e. Evaluate the overall presentation, structure and content of the financial statements of
the Fund, including the disclosures, and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Manager regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
OTHER MATTERS
This report is made solely to the unit holders of the Fund and for no other purpose. We do
not assume responsibility to any other person for the content of this report.

PRICEWATERHOUSECOOPERS PLT
LLP0014401-LCA & AF 1146
Chartered Accountants
Kuala Lumpur
Date: 17 February 2020

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Eastspring Investments Growth Fund

STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Note 2019 2018
RM RM

INVESTMENT INCOME/(LOSS) 3,499,020 3,490,373
Gross dividend income
Interest income from deposits with licensed 245,967 536,142

financial institutions 7 (3,612,624) (22,178,620)
Net loss on financial assets at fair 132,363 (18,152,105)

value through profit or loss 3 (1,589,502) (1,895,960)

EXPENSES 4 (84,773) (101,118)
Management fee
Trustee fee (7,000) (7,000)
Audit fee
Tax agent fee (3,400) (3,400)
Other expenses
Transaction cost (52,719) (85,234)

(295,015) (701,272)

(2,032,409) (2,793,984)

LOSS BEFORE TAXATION (1,900,046) (20,946,089)

TAXATION 6 - (15,538)

LOSS AFTER TAXATION AND (1,900,046) (20,961,627)
TOTAL COMPREHENSIVE LOSS

Loss after taxation is made up of the following: 4,270,618 13,545,333
Realised amount (6,170,664) (34,506,960)
Unrealised amount (1,900,046) (20,961,627)

The accompanying summary of significant accounting policies and notes to the financial statements
form an integral part of these financial statements.

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STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2019

Note 2019 2018
8 RM RM

ASSETS 7 1,084,606 10,916,064
Cash and cash equivalents 9,490 88,075
Amount due from Manager -
Amount due from broker 4,355 283,905
Dividends receivable 9,348 143,683
Tax recoverable 164,101
Financial assets at fair value through profit
97,451,898 102,982,090
or loss 98,559,697 114,577,918
TOTAL ASSETS

LIABILITIES 212,621 63,517
Amount due to Manager 128,061 145,330
Accrued management fee
Amount due to Trustee 6,830 7,751
Distribution payable - 27,887
Other payables and accruals 24,230
25,881

TOTAL LIABILITIES 373,393 268,715

NET ASSET VALUE OF THE FUND 98,186,304 114,309,203

EQUITY 1,536,945 10,712,201
Unit holders’ capital 96,649,359 103,597,002
Retained earnings

NET ASSET ATTRIBUTABLE 98,186,304 114,309,203
TO UNIT HOLDERS

NUMBER OF UNITS IN CIRCULATION 9 159,945,516 183,011,696

NET ASSET VALUE PER UNIT 0.6139 0.6246
(EX-DISTRIBUTION) (RM)

The accompanying summary of significant accounting policies and notes to the financial statements
form an integral part of these financial statements.

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Eastspring Investments Growth Fund

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Unit holders’ Retained
earnings
Note capital Total
RM RM
RM
114,309,203
Balance as at 1 January 2019 10,712,201 103,597,002

Movement in unit holders’ 8,202,245 - 8,202,245
contribution: (17,377,501) (5,047,597) (22,425,098)

Creation of units from - (1,900,046) (1,900,046)
applications
1,536,945 96,649,359 98,186,304
Cancellation of units
Total comprehensive loss

for the financial year
Balance as at

31 December 2019

Balance as at 1 January 2018 1,756,602 129,079,075 130,835,677

Movement in unit holders’

contribution:

Creation of units from

applications 25,486,305 - 25,486,305

Creation of units from

distribution 4,494,418 - 4,494,418

Cancellation of units (21,023,265) - (21,023,265)

Distribution (Gross: 3.34 sen/

Net: 2.57 sen) 5 (1,859) (4,520,446) (4,522,305)

Total comprehensive loss

for the financial year - (20,961,627) (20,961,627)

Balance as at

31 December 2018 10,712,201 103,597,002 114,309,203

The accompanying summary of significant accounting policies and notes to the financial statements
form an integral part of these financial statements.

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STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Note 2019 2018
RM RM

CASH FLOWS FROM OPERATING ACTIVITIES 55,810,187 126,922,627
Proceeds from sale of investments (53,903,729) (126,439,218)
Purchase of investments
Dividends received 3,638,348 3,605,121
Interest received from deposits with licensed
245,967 536,142
financial institutions (1,606,771) (1,922,781)
Management fee paid
Trustee fee paid (85,694) (102,548)
Payment for other fees and expenses (61,468) (106,153)
Tax refund 154,753
Net cash generated from operating activities 4,191,593 -
2,493,190

CASH FLOWS FROM FINANCING ACTIVITIES 8,280,830 25,526,353
Cash proceeds from units created (22,275,994) (21,216,756)
Payments for cancellation of units
Distributions paid (27,887) (44,007)
Net cash (used in)/generated from financing
(14,023,051) 4,265,590
activities

NET (DECREASE)/INCREASE IN CASH AND (9,831,458) 6,758,780
CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT THE 10,916,064 4,157,284
BEGINNING OF THE FINANCIAL YEAR

CASH AND CASH EQUIVALENTS AT THE 8 1,084,606 10,916,064
END OF THE FINANCIAL YEAR

The accompanying summary of significant accounting policies and notes to the financial statements form
an integral part of these financial statements.

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Eastspring Investments Growth Fund

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

The following accounting policies have been used in dealing with items which are
considered material in relation to the financial statements.

A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention
in accordance with the Malaysian Financial Reporting Standards (“MFRS”) and
International Financial Reporting Standards (“IFRS”), as modified by financial assets at
fair value through profit or loss.

The preparation of financial statements in conformity with the MFRS and IFRS
require the use of certain critical accounting estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reported financial year. It also requires the Manager
to exercise their judgment in the process of applying the Fund’s accounting policies.
Although these estimates and judgment are based on the Manager’s best knowledge
of current events and actions, actual results may differ.

The areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in
Note K.

a. Standards, amendments to published standards and interpretations that are
effective:

The Fund has applied the following amendments for the first time for the financial
year beginning on 1 January 2019:

• Amendments to MFRS 112 ‘Income Taxes’ (effective from 1 January 2019)
clarify that where income tax consequences of dividends on financial
instruments classified as equity is recognised (either in profit or loss, other
comprehensive income or equity) depends on where the past transactions
that generated distributable profits were recognised.

Accordingly, the tax consequences are recognised in profit or loss when an
entity determines payments on such instruments are distribution of profits
(that is, dividends). Tax on dividend should not be recognised in equity merely
on the basis that it is related to a distribution to owners.

This standard is not expected to have a significant impact on the Fund’s financial
statements.

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b. Standards, amendments that have been issued but not yet effective:

Amendments to the definition of material (Amendments to MFRS 101 and
MFRS 108) effective 1 January 2020

The amendments clarify the definition of materiality and use a consistent
definition throughout MFRSs and the Conceptual Framework for Financial
Reporting.

The definition of ‘material’ has been revised as “Information is material if
omitting, misstating or obscuring it could reasonably be expected to influence
decisions that the primary users of general purpose financial statements make on
the basis of those financial statements, which provide financial information about
a specific reporting entity.”

The amendments also:

• clarify that an entity assess materiality in the context of the financial
statements as a whole.

• explain the concept of obscuring information in the new definition.
Information is obscured if it have the effect similar as omitting or misstating
of that information. For example, material transaction is scattered throughout
the financial statements, dissimilar items are inappropriately aggregated, or
material information is hidden by immaterial information.

• clarify the meaning of ‘primary users of general purpose financial statements’
to whom those financial statements are directed, by defining them as ‘existing
and potential investors, lenders and other creditors’ that must rely on general
purpose financial statements for much of the financial information they need.

The amendments shall be applied prospectively.

B. INCOME RECOGNITION

Interest income from short-term deposits with licensed financial institutions is
recognised on an accrual basis using the effective interest rate method.

Dividend income is recognised on the ex-dividend date, when the right to receive the
dividend has been established.

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Eastspring Investments Growth Fund

Realised gain or loss on disposal of investments are accounted for as the difference
between the net disposal proceeds and the carrying amount of investments,
determined on a weighted average cost basis.


C. TAXATION

Current tax expense is determined according to the Malaysian tax laws at the current
rate based upon the taxable income during the financial year.

D. FUNCTIONAL AND PRESENTATION CURRENCY

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

E. FINANCIAL ASSETS AND FINANCIAL LIABILITIES

i. Classification

The Fund classify its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other
comprehensive income (“OCI”) or through profit or loss), and

• those to be measured at amortised cost

The Fund classifies its investments based on both the Fund’s business model for
managing those financial assets and the contractual cash flow characteristics of
the financial assets. The portfolio of financial assets is managed and performance
is evaluated on a fair value basis. The Fund is primarily focused on fair value
information and uses that information to assess the assets’ performance and to
make decisions. The Fund has not taken the option to irrevocably designate any
equity securities as fair value through other comprehensive income. Consequently,
all investments are measured at fair value through profit or loss.

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The Fund classifies cash and cash equivalents, dividends receivable and amount
due from Manager as financial assets at amortised cost as these financial assets
are held to collect contractual cash flows consisting of the amount outstanding.

The Fund classifies accrued management fee, amount due to Manager, amount
due to Trustee and other payables and accruals as financial liabilities measured at
amortised cost.

ii. Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade date,
the date on which the Fund commits to purchase or sell the asset. Investments
are initially recognised at fair value and transaction costs are expensed in the
statement of comprehensive income.

Financial assets are derecognised when the rights to receive cash flows from the
investments have expired or have been transferred and the Fund has transferred
substantially all risks and rewards of ownership.

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

Financial liabilities are derecognised when the obligation under the liabilities are
extinguished, i.e. when the obligation specified in the contract is discharged or
cancelled or expired.

Gains or losses arising from changes in the fair value of the “financial assets
at fair value through profit or loss” category are presented in the statement of
comprehensive income within “net gain/(loss) on financial assets at fair value
through profit or loss” in the financial year in which they arise.

Dividend income from financial assets at fair value through profit or loss is
recognised in the statement of comprehensive income as part of gross dividend
income when the Fund’s right to receive payments is established.

Quoted securities in Malaysia are valued at the last done market price quoted
on the Bursa Malaysia Securities Berhad (“Bursa Securities”) at the date of the
statement of financial position.

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Eastspring Investments Growth Fund

If a valuation based on the market price does not represent the fair value of the
securities, for example during abnormal market conditions or when no market
price is available, including in the event of a suspension in the quotation of
the securities for a period exceeding 14 days, or such shorter period as agreed
by the Trustee, then the securities are valued as determined in good faith by
the Manager, based on the methods or basis approved by the Trustee after
appropriate technical consultation.

Deposits with licensed financial institutions are stated at cost plus accrued interest
calculated on the effective interest method over the period from the date of
placement to the date of maturity of the respective deposits.

Loans and receivables and other financial liabilities are subsequently carried at
amortised cost using the effective interest method.

iii. Impairment for assets carried at amortised costs

The Fund measures credit risk and expected credit losses using probability of
default, exposure at default and loss given default. Management considers both
historical analysis and forward looking information in determining any expected
credit loss. Management consider the probability of default to be close to zero as
these instruments have a low risk of default and the counterparties have a strong
capacity to meet their contractual obligations in the near term. As a result, no loss
allowance has been recognised based on 12 months expected credit losses as any
such impairment would be wholly insignificant to the Fund.

Significant increase in credit risk

A significant increase in credit risk is defined by management as any contractual
payment which is more than 30 days past due.

Definition of default and credit-impaired financial assets

Any contractual payment which is more than 90 days past due is considered credit
impaired.

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Write-off

The Fund writes off financial assets, in whole or in part, when it has exhausted all
practical recovery efforts and has concluded there is no reasonable expectation
of recovery. The assessment of no reasonable expectation of recovery is based on
unavailability of debtor’s sources of income or assets to generate sufficient future
cash flows to repay the amount. The Fund may write-off financial assets that are
still subject to enforcement activity. Subsequent recoveries of amounts previously
written off will result in impairment gains. There are no write-offs/recoveries
during the financial year.

F. CASH AND CASH EQUIVALENTS

For the purpose of the statement of cash flows, cash and cash equivalents comprise
bank balance and deposit with licensed financial institution that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in
value.

G. DISTRIBUTION

A distribution to the Fund’s unit holders is accounted for as a deduction from realised
reserves. A proposed distribution is recognised as a liability in the financial year in
which it is approved by the Trustee of the Fund.

H. UNIT HOLDERS’ CAPITAL

The unit holders’ contributions to the Fund meet the criteria to be classified as equity
instruments under MFRS 132 “Financial Instruments: Presentation”. Those criteria
include:

• the units entitle the holder to a proportionate share of the Fund’s net assets value;
• the units are the most subordinated class and class features are identical;
• there is no contractual obligations to deliver cash or another financial asset other

than the obligation on the Fund to repurchase; and
• the total expected cash flows from the units over its life are based substantially on

the profit or loss of the Fund.

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Eastspring Investments Growth Fund

The outstanding units are carried at the redemption amount that is payable at each
financial year if unit holder exercises the right to put the unit back to the Fund.

Units are created and cancelled at prices based on the Fund’s net asset value per unit
at the time of creation or cancellation. The Fund’s net asset value per unit is calculated
by dividing the net assets attributable to unit holders with the total number of
outstanding units.

I. AMOUNT DUE FROM/(TO) BROKERS

Amounts due from and to brokers represent receivables for securities sold and
payables for securities purchased that have been contracted for but not yet settled
or delivered on the statement of financial position date respectively. The amount due
from brokers balance is held for collection.

These amounts are recognised initially at fair value and subsequently measured at
amortised cost. At each reporting date, the Fund shall measure the loss allowance
on amounts due from broker at an amount equal to the lifetime expected credit
losses if the credit risk has increased significantly since initial recognition. If, at the
reporting date, the credit risk has not increased significantly since initial recognition,
the Fund shall measure the loss allowance at an amount equal to 12 months expected
credit losses. Significant financial difficulties of the broker, probability that the broker
will enter bankruptcy or financial reorganisation, and default in payments are all
considered indicators that a loss allowance may be required.

If the credit risk increases to the point that it is considered to be credit impaired,
interest income will be calculated based on the gross carrying amount adjusted for the
loss allowance. A significant increase in credit risk is defined by management as any
contractual payment which is more than 30 days past due.

Any contractual payment which is more than 90 days past due is considered credit
impaired.

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J. TRANSACTION COSTS
Transaction costs are costs incurred to acquire financial assets or liabilities at fair
value through profit or loss. They include the bid-ask spread, fees and commissions
paid to agents, advisors, brokers and dealers. Transaction costs, when incurred, are
immediately recognised in the statement of comprehensive income as expenses.

K. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
ACCOUNTING POLICIES

The Fund makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, rarely equal the related actual results. To
enhance the information contents on the estimates, certain key variables that are
anticipated to have material impact to the Funds’ results and financial position are
tested for sensitivity to changes in the underlying parameters.

Estimates and judgments are continually evaluated by the Manager and are based on
historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.

In undertaking any of the Fund’s investment, the Manager will ensure that all assets of
the Fund under management will be valued appropriately, that is at fair value.

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Eastspring Investments Growth Fund

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

1. INFORMATION ON THE FUND

Eastspring Investments Growth Fund (the “Fund”) was constituted pursuant to the
execution of a Deed dated 4 March 2001, Supplemental Master Deed dated 26 May
2003, Supplemental Master Deed dated 15 February 2006, Master Supplemental Deed
dated 25 July 2007 and Second Supplemental Master Deed dated 30 November 2009
between BHLB Trustee Berhad (“BHLB Trustee”) and Eastspring Investments Berhad
(the “Manager”). The Fund replaced BHLB Trustee with Deutsche Trustees Malaysia
Berhad (the “Trustee”) effective 1 October 2010. A Supplemental Master Deed was
entered into between Eastspring Investments Berhad (the “Manager”) and Deutsche
Trustees Malaysia Berhad (the “Trustee”) on 30 July 2010 to effect the change of trustee
from BHLB Trustee to the Trustee, followed by Second Supplemental Master Deed
dated 28 January 2011, Third Supplemental Master Deed dated 9 March 2011, Fourth
Supplemental Master Deed dated 20 January 2012, Fifth Supplemental Master Deed
dated 26 March 2014, Sixth Supplemental Master Deed dated 2 January 2015, Seventh
Supplemental Master Deed dated 11 July 2016, Eighth Supplemental Master Deed
dated 25 January 2017, Ninth Supplemental Master Deed dated 11 December 2017
and Tenth Supplemental Master Deed dated 4 June 2018 (collectively referred to as the
“Deed”).

The Fund was launched on 29 May 2001 and will continue its operations until
terminated by the Trustee or the Manager as provided under Part 12 of the Deed.

The Fund invests principally in diversified portfolio of equity and equity-related securities.
All investments will be subjected to the Securities Commission’s (“SC”) Guidelines on
Unit Trust Funds, the Deeds, except where exemptions or variations have been approved
by the SC, internal policies and procedures, and Fund’s objective.

The main objective of the Fund seeks to provide investors with long-term capital
appreciation by investing principally in larger companies which will appreciate in value.

The Manager is a company incorporated in Malaysia and is related to Prudential Plc., a
public listed company in the United Kingdom. The principal activity of the Manager is
the establishment and management of unit trust funds and asset management.

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2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks which include market risk (inclusive of price
risk and interest rate risk), stock/issuer risk, fund management risk, liquidity risk, non-
compliance risk, credit/default risk and capital risk.

Financial risk management is carried out through internal control processes adopted by
the Manager and adherence to the investment restrictions as stipulated in the Deed.

Financial instruments of the Fund are as follows:

Note Financial Financial Total
assets at assets at RM
amortised fair value
through
cost profit or loss

RM RM

2019 7 - 97,451,898 97,451,898
Quoted securities 8 9,490 - 9,490
Amount due from Manager 4,355 - 4,355
Dividends receivable 1,084,606 -
Cash and cash equivalents 1,098,451 1,084,606
97,451,898 98,550,349

Note Loans and Financial Total
receivables assets at RM
fair value
RM through
profit or loss

RM

2018 7 - 102,982,090 102,982,090
Quoted securities 8 88,075 - 88,075
Amount due from Manager 283,905 -
Amount due from broker 143,683 - 283,905
Dividends receivable 10,916,064 - 143,683
Cash and cash equivalents 11,431,727 10,916,064
102,982,090 114,413,817

All liabilities are financial liabilities which are carried at amortised cost.

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Eastspring Investments Growth Fund

Market risk

i. Price risk

This risk refers to changes and developments in regulations, politics and the
economy of the country. The very nature of a Unit Trust Fund, however, helps
mitigate this risk because a fund would generally hold a well-diversified portfolio
of securities from different market sectors so that the collapse of any one security
or any one market sector would not impact too greatly on the value of the Fund.

The table below shows assets of the Fund as at 31 December which are exposed
to price risk:

2019 2018
RM RM

Quoted securities designated at fair 97,451,898 102,982,090
value through profit or loss

The following table summarises the sensitivity of the Fund’s net asset value
and loss after tax to movements in prices of quoted securities at the end of
the reporting year. The analysis is based on the assumptions that the market
price of the quoted securities increased by 5% and decreased by 5% with all
other variables held constant. This represents management’s best estimate of a
reasonable possible shift in the quoted securities, having regard to the historical
volatility of the prices.

% Change in price Market Impact on loss
value after tax/
2019 RM
+5% net asset value
-5% 102,324,493 RM
92,579,303
2018 4,872,595
+5% 108,131,195 (4,872,595)
-5% 97,832,985
5,149,105
(5,149,105)

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ii. Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial
instrument will fluctuate because of changes in market interest rates.

Fair value interest rate risk is the risk that the value of a financial instrument will
fluctuate due to changes in market interest rates.

The Fund’s investments in deposits with licensed financial institutions are short
term in nature. Therefore, exposure to interest rate fluctuations is minimal.

As at the end of the financial year, the Fund does not hold any other financial
instruments that expose it to interest rate risk.

Stock/Issuer risk

The Fund is restricted to investment in securities issued by and securities relating to
any issuer of not more than ten percent (10%) of its net asset value. Furthermore, the
Fund is restricted to invest in securities issued by and securities relating to any group of
companies of not more than twenty percent (20%) of its net asset value. Under such
restrictions, the exposure risk to the securities of any single issuer or any one group of
companies is minimised.

Fund management risk

There is the risk that the management company may not adhere to the investment
mandate of the respective Fund. With close monitoring by the investment committee,
back office system being incorporated with limits and controls, and regular reporting
to the senior management team, the management company is able to manage such
risk. The Trustee has an oversight function over management of the Fund by the
management company to safeguard the interest of unit holders.

Liquidity risk

Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial
obligations. Generally, all investments are subject to a certain degree of liquidity risk
depending on the nature of the investment instruments, market, sector and other
factors. For the purpose of the Fund, the Manager will attempt to balance the entire
portfolio by investing in a mix of assets with satisfactory trading volume and those

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Eastspring Investments Growth Fund

that occasionally could encounter poor liquidity. This is expected to reduce the risks for
the entire portfolio without limiting the Fund’s growth potentials.

The Fund maintains sufficient level of liquid assets, after consultation with the Trustee,
to meet anticipated payments and cancellations of units by unit holders. Liquid assets
comprise bank balance and deposits with licensed financial institutions and other
instruments which are capable of being converted into cash within 7 days.

The table below summarises the Fund’s financial liabilities into relevant maturity
groupings based on the remaining period as at the statement of financial position
date to the contractual maturity date. The amounts in the table are the contractual
undiscounted cash flows.

Less than Between Total
1 month 1 month to RM

RM 1 year 212,621
128,061
RM
6,830
2019 212,621 - 25,881
Amount due to Manager 128,061 - 373,393
Accrued management fee -
Amount due to Trustee 6,830 25,881 63,517
Other payables and accruals - 25,881 145,330
Contractual cash outflows
347,512 7,751
2018 27,887
Amount due to Manager 63,517 - 24,230
Accrued management fee 145,330 - 268,715
Amount due to Trustee -
Distribution payable 7,751 -
Other payables and accruals 27,887 24,230
Contractual cash outflows 24,230
-
244,485

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Non-compliance risk
Non-compliance risk arises when the Manager and others associated with the Fund

are not compliant to the rules set out in the Fund’s constitution or the law that
governs the Fund or applicable internal control procedures, or act fraudulently or
dishonestly.
The non-compliance may expose the Fund to higher risks which may result in a fall in
the value of the Fund which in turn may affect its investment goals. However, the risk
can be mitigated by the internal controls and compliance monitoring undertaken by
the Manager.
Credit/Default risk
Credit risk refers to the ability of an issuer or a counter party to make timely payments
of interest, principals and proceeds from realisation of investments.
The credit risk arising from placements of deposits in licensed financial institutions
is managed by ensuring that the Fund will only place deposits in reputable licensed
financial institutions. For amount due from brokers, the settlement terms are governed
by the relevant rules and regulations as prescribed by Bursa Malaysia Securities Berhad
(“Bursa Malaysia”). The settlement terms of the proceeds from the creation of units
receivable from the Manager are governed by the SC’s Guidelines on Unit Trust Funds.
The credit/default risk is minimal as all transactions in quoted securities are settled/paid
upon delivery using approved brokers.

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Eastspring Investments Growth Fund

The following table sets out the credit risk concentrations and counterparties of the Fund:

Cash Dividends Amount Total
and cash receivable due from RM
equivalents Manager
RM
RM RM

2019 554,562 - - 554,562
Finance 530,044 - - 530,044
- AA1
- AA2 - 4,355 - 4,355
Technology
- NR - - 9,490 9,490
Other 1,084,606 4,355 9,490 1,098,451
- NR

Cash Dividends Amount Amount Total
and cash receivable due from due from RM
equivalents Manager
RM broker 10,871,013
RM RM RM 45,051
87,780
2018 10,871,013 - - - 24,750
Finance 45,051 - - - 31,137
- AAA
- AA1 - 87,780 - - 371,996
Financial Services 11,431,727
- NR - 24,750 - -
Plantation
- NR - 31,137 - -
Technology
- NR - 16 88,075 283,905
Other 10,916,064 143,683 88,075 283,905
- NR

None of these assets are past due or impaired.

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Capital risk
The capital of the Fund is represented by equity consisting of unit holders’ capital

of RM1,536,945 (2018: RM10,712,201) and retained earnings of RM96,649,359
(2018: RM103,597,002). The amount of equity can change significantly on a daily
basis as the Fund is subject to daily subscriptions and redemptions at the discretion of
unit holders. The Fund’s objective when managing capital is to safeguard the Fund’s
ability to continue as a going concern in order to provide returns for unit holders and
benefits for other stakeholders and to maintain a strong capital base to support the
development of the investment activities of the Fund.
Fair value estimation
Fair value is defined as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the
measurement date (i.e. an exit price).
The fair value of financial assets traded in active market (such as trading securities) are
based on quoted market prices at the close of trading on the year end date. The Fund
utilises the last traded market price for financial assets where the last traded price falls
within the bid-ask spread. In circumstances where the last traded price is not within
the bid-ask spread, the Manager will determine the point within the bid-ask spread
that is representative of the fair value.
An active market is a market in which transactions for the asset take place with
sufficient frequency and volume to provide pricing information on an ongoing basis.
The fair value of financial assets that are not traded in an active market is determined
by using valuation techniques.

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Eastspring Investments Growth Fund

Fair value hierarchy
i. The table below analyses financial instruments carried at fair value by valuation
method. The different levels have been defined as follows:
• Level 1: Quoted prices (unadjusted) in active market 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 (that is, as prices) or
indirectly (that is, derived from prices).
• Level 3: Inputs for the asset and liability that are not based on observable
market data (that is, unobservable inputs).
The level in the fair value hierarchy within which the fair value measurement is
categorised in its entirety is determined on the basis of the lowest level input
that is significant to the fair value measurement in its entirety. For this purpose,
the significance of an input is assessed against the fair value measurement in its
entirety. If a fair value measurement uses observable inputs that require significant
adjustment based on unobservable inputs, that measurement is a Level 3
measurement.
Assessing the significance of a particular input to the fair value measurement in its
entirety requires judgment, considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgment
by the Fund. The Fund considers observable data to be that market data that
is readily available, regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively involved in the
relevant market.

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The following table analyses within the fair value hierarchy the Fund’s financial
assets (by class) measured at fair value:

Level 1 Level 2 Level 3 Total
RM RM RM RM

2019 97,451,898 - - 97,451,898
Financial assets at fair
102,982,090 - - 102,982,090
value through profit
or loss:

Quoted securities

2018
Financial assets at fair

value through profit
or loss:

Quoted securities

Investments whose values are based on quoted market prices in active markets,
and are therefore classified within Level 1, include active quoted securities.
The Fund does not adjust the quoted prices for these instruments. The Fund’s
policies on valuation of these financial assets are stated in Note E to the financial
statements.

ii. The carrying value of amount due from Manager, dividends receivable, cash and
cash equivalents and all liabilities are a reasonable approximation of their fair
values due to their short term nature.

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Eastspring Investments Growth Fund

3. MANAGEMENT FEE
In accordance with the Deed, the Manager is entitled to a management fee at a rate

not exceeding 3.00% per annum of the net asset value of the Fund accrued and
calculated on daily basis.
For the financial year ended 31 December 2019, the management fee is recognised
at a rate of 1.50% (2018: 1.50%) per annum of the net asset value of the Fund,
calculated on daily basis.
There will be no further liability to the Manager in respect of the management fee
other than the amounts recognised above.
4. TRUSTEE FEE
In accordance with the Deed, the Trustee is entitled to an annual fee at a rate not
exceeding 0.20% per annum of the net asset value of the Fund, subject to a minimum
fee of RM35,000 per annum.
For the financial year ended 31 December 2019, the Trustee’s fee is recognised at a
rate of 0.08% (2018: 0.08%) per annum of the net asset value of the Fund, inclusive
of local custodian fee, calculated on daily basis.
There will be no further liability to the Trustee in respect of the Trustee fee other than
the amounts recognised above.

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5. DISTRIBUTION 2019 2018
RM RM
Distribution to unit holders is from
the following sources: - 3,490,373
- 105,565
Dividend income -
Interest income 1,343,174
Net realised gain on sale of investments -
Distribution equalisation 1,859
-
(Memorandum account) - 4,940,971
- (403,128)
Gross realised income -
Less: Expenses (15,538)
Less: Taxation 4,522,305

Gross distribution per unit (RM) - 0.0334
Net distribution per unit (RM) - 0.0257
Ex-date - 26 December 2018

Gross distribution is derived using total income less total expenses. The distribution is
made from current and prior financial years’ realised income.

Gross distribution per unit is derived from gross realised income less expenses divided
by the number of units in circulation, while net distribution per unit is derived from
gross realised income less expenses and taxation divided by the number of units in
circulation.

Distribution equalisation represents the average amount of distributable income
included in the creation and cancellation prices of units. It is computed as at each
date of creation and cancellation of units. For the purposes of determining amount
available for distribution, distribution equalisation is included in the computation of
realised gain or income available for distribution.

For the financial year ended 31 December 2018, there are accumulated unrealised
losses of RM34,506,960.

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Eastspring Investments Growth Fund

6. TAXATION

Tax charged for the financial year: 2019 2018
Current taxation - local RM RM

- 15,538

The numerical reconciliation between loss before taxation multiplied by the Malaysian
statutory tax rate and tax expense of the Fund is as follows:

Loss before taxation 2019 2018
RM RM
Tax at Malaysian statutory rate of 24%
(2018: 24%) (1,900,046) (20,946,089)

Tax effect of: (456,011) (5,027,061)
(Investment income exempt from tax)/
(31,767) 4,393,795
investment loss not deductible for tax purposes 104,618 213,846
Expenses not deductible for tax purposes
Restriction on tax deductible expenses 383,160 456,711
- (21,753)
for Unit Trust Funds
Income subject to different tax rate - 15,538

Taxation

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7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

2019 2018
RM RM

Designated at fair value through profit or loss: 97,451,898 102,982,090
Quoted securities

Net loss on financial assets at fair value 2,558,040 12,328,340
through profit or loss: (6,170,664) (34,506,960)
Realised gain on disposals (3,612,624) (22,178,620)
Change in unrealised fair value loss

Quoted securities

Name of counter Quantity Aggregate Fair value Percentage
Units cost as at of net asset
Construction value of the
Econpile Holdings RM 31.12.2019
Fund
Berhad RM
IJM Corporation Berhad %

360,000 296,280 271,800 0.28
490,000 1,096,459 1,063,300 1.08
850,000 1,392,739 1,335,100 1.36

Consumer Products & Services

Bermaz Auto Berhad 147,000 299,204 308,700 0.31
513,752 483,140 0.49
DRB-HICOM Berhad 203,000 5,184,984 3,974,850 4.05
5,284,680 4,132,240 4.21
Genting Berhad 657,000 696,417 535,572 0.55

Genting Malaysia Berhad 1,256,000 2,441,794 2,194,500 2.24
948,095 1,053,156 1.07
Padini Holdings Berhad 165,300 1,933,620 1.97
2,053,633 14,615,778 14.89
Petronas Dagangan 17,422,559

Berhad 95,000

PPB Group Berhad 55,900

Sime Darby Berhad 871,000

3,450,200

Client Services : 03-2778 1000 45

Eastspring Investments Growth Fund

Quoted securities (continued)

Name of counter Quantity Aggregate Fair value Percentage
Units cost as at of net asset
Energy value of the
Dialog Group Berhad RM 31.12.2019
Velesto Energy Berhad Fund
RM
Financial Services %
Alliance Bank Malaysia
750,000 2,605,384 2,587,500 2.64
Berhad 800,000 312,000 304,000 0.31
AMMB Holdings Berhad 1,550,000 2.95
Bursa Malaysia Berhad 2,917,384 2,891,500
CIMB Group Holdings
182,000 510,292 478,660 0.49
Berhad 297,000 1,298,485 1,161,270 1.18
Hong Leong Bank 120,000 0.74
943,524 730,800
Berhad 5.47
Hong Leong Financial 1,042,000 6,943,131 5,366,300
1.06
Group Berhad 60,000 1,131,290 1,038,000
Malayan Banking Berhad 2.07
Public Bank Berhad 120,000 2,216,885 2,028,000 7.07
RHB Bank Berhad 804,000 7,914,196 6,946,560 7.98
403,000 9,695,611 7,834,320 1.40
Health Care 238,000 1,327,247 1,375,640 27.46
Hartalega Holdings 3,266,000 31,980,661 26,959,550

Berhad 376,000 2,382,129 2,060,480 2.10
IHH Healthcare Berhad 372,000 2,004,451 2,034,840 2.07
Kossan Rubber Industries
482,000 1,942,609 2,005,120 2.04
Berhad
Top Glove Corporation 412,000 2,282,540 1,936,400 1.97
1,642,000 8,611,729 8,036,840 8.18
Berhad

46 Client Services : 03-2778 1000