EASTSPRING INVESTMENTS
DINASTI EQUITY FUND
INTERIM REPORT
FOR THE SIX MONTHS FINANCIAL PERIOD
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 12
Manager’s Report 13
Market Review 16
Rebates and Soft Commissions
Statement by the Manager 17
Trustee’s Report to the Unit Holders of
18
Eastspring Investments Dinasti Equity Fund 19
Shariah Adviser’s Report to the Unit Holders of 20
21
Eastspring Investments Dinasti Equity Fund 22
Unaudited Statement of Comprehensive Income 23
Unaudited Statement of Financial Position 32
Unaudited Statement of Changes in Equity 69
Unaudited Statement of Cash Flows
Summary of Significant Accounting Policies
Notes to the Unaudited Financial Statements
Corporate Directory
Interim Report
FUND INFORMATION
Name of Fund Eastspring Investments Dinasti Equity Fund (the “Fund”)
Fund Category/ Shariah equity/growth
Type
Fund Objective The Fund aims to provide investors with long-term capital
appreciation by investing in Shariah-compliant investments with
Performance exposure to the Greater China region.
Benchmark
ANY MATERIAL CHANGES TO THE FUND’S OBJECTIVE
WOULD REQUIRE UNIT HOLDERS’ APPROVAL.
The performance benchmark of the Fund is Dow Jones Islamic
Market Greater China Index (“DJM Greater China Index”).
Source: www.djindexes.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 Dinasti Equity Fund
FUND INFORMATION (CONTINUED)
Breakdown of Unit As at 31 December 2019, the size of Eastspring Investments
Holdings by Size Dinasti Equity Fund stood at 1,425.804 million units.
1,800 Fund Size
1,600
Units (Million) 1,400
1,200
1,000 Jul Aug Sep Oct Nov Dec
2019 2019 2019 2019 2019 2019
800
600
400
200
0
Breakdown of Unit Holdings
Unit Holdings No. of % No. of %
Units Unit*
Holders (‘000)
5,000 units and below 2,546 17.08 7,342 0.51
5,001 to 10,000 units 2,774 18.62 20,684 1.45
10,001 to 50,000 units 6,944 46.60 166,893 11.71
50,001 to 500,000 units 2,584 17.34 276,342 19.38
500,001 units and above 954,540 66.95
Total 54 0.36 1,425,801 100.00
14,902 100.00
* 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 Shariah-compliant securities (%)
Basic Material 5.31 3.70
Consumer Goods 3.89 9.73 10.15
Consumer Services 10.73 3.95
Financial 12.80 4.63 5.12
Health Care 2.42 2.04
Industrial 2.86 6.12 4.69
Oil & Gas 1.42 3.11 9.15
Technology 8.71 38.77 2.60
Telecommunication 2.82 7.82 42.85
Utilities 43.32 7.58 7.37
5.91 89.44 4.63
Cash and other assets 4.64 10.56 92.30
Total 97.10 100.00 7.70
2.90 100.00
100.00
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Eastspring Investments Dinasti Equity Fund
KEY PERFORMANCE DATA (CONTINUED)
Category 2019 2018 2017
Net Asset Value (NAV) (RM'000) 858,057 778,693 393,965
Units In Circulation (Units '000) 1,425,804 1,548,883 616,714
Net Asset Value Per Unit (RM)
Highest Net Asset Value Per Unit (RM) 0.6018 0.5027 0.6388
Lowest Net Asset Value Per Unit (RM) 0.6104 0.6105 0.6395
Total Return (%) 0.5125 0.5016 0.6299
- Capital Growth
- Income Distribution 12.19 (16.09) 13.08
Total Return (%) - - -
Gross Distribution Per Unit (RM)
Net Distribution Per Unit (RM) 12.19 (16.09) 13.08
Management Expense Ratio (MER) (%)* - - -
Portfolio Turnover Ratio (PTR) (times)^ - - -
0.98 0.97 1.04
0.41 0.31 0.76
* There were no significant changes to the MER during the period under review.
^ There were no significant changes to the PTR during the period under review.
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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 24.74 11.16 12.41
Year ended 1.7.2018 to 1.7.2017 to 1.7.2016 to 1.7.2015 to 1.7.2014 to
Annual total return 30.6.2019 30.6.2018 30.6.2017 30.6.2016 30.6.2015
(%) (%) (%) (%) (%)
(6.71) 10.53 36.76 (3.57) 23.88
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 Dinasti Equity Fund
MANAGER’S REPORT
Fund Performance Over the 5-year period, the Fund recorded a return of 79.54%,
outperforming the benchmark return of 70.70% by 8.84%.
During the period under review, the Fund registered a return of
12.19%, outperforming the benchmark return of 11.55% by
0.64%.
The outperformance was largely due to Shariah-compliant stock
selection in the technology and consumer sectors.
Eastspring Investments Dinasti Equity Fund
- 5 Years Return Vs Benchmark
5 years % Return100% 100%
90% May Aug Dec Apr Aug Dec Apr Aug Dec Apr Aug Dec Apr Aug 90%
2015 2015 2015 2016 2016 2016 2017 2017 2017 2018 2018 2018 2019 2019
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
-10% -10%
Dec
Dec 2019
2014
Eastspring Investments Dinasti Equity Fund Benchmark
The performance is calculated on NAV-to-NAV basis with
gross income or dividend reinvested.
Benchmark: Dow Jones Islamic Market Greater China Index
(“DJIM Greater China Index“).
Source: Lipper for Investment Management and
www.djindexes.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 period ended 31 December 2019:
Performance
Income Capital Total Total Return of
Return Return* Return Benchmark
(%) (%) (%) (%)
0.00 12.19 12.19 11.55
* Capital return components (NAV per unit to NAV per unit).
Distribution/ No distribution or unit split were declared for the financial period
Unit Split ended 31 December 2019.
Investment The fund increased Shariah-compliant equity exposure and
Strategy During positioning in higher beta sectors such as consumer discretionary
the Period Under and information technology amidst earnings upgrades and
Review attractive valuations.
The Fund continues to focus on Shariah-compliant stock
selection, and favour companies with healthy balance sheets,
good market positioning, decent earnings growth and are trading
at attractive valuations.
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Eastspring Investments Dinasti Equity Fund
MANAGER’S REPORT (CONTINUED)
Asset Allocation 31-Dec 30-Jun
2019 2019
Asset Allocation Changes
(%) (%) (%)
Quoted Shariah
-compliant securities 97.10 95.01 2.09
2.90 4.99 (2.09)
Cash and other assets
Asset Allocation as at 31 December 2019
Cash and
other assets
2.90%
Quoted Shariah-
compliant securities
97.10%
There were no significant changes in asset allocation of the Fund
for the period under review.
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MANAGER’S REPORT (CONTINUED)
State of Affairs of There have been neither significant change to the state of affairs of
the Fund the Fund nor any circumstances that materially affect any interests of
the unit holders during the period under review.
While in the Eastspring Investments Fourth Supplementary Master
Prospectus dated 1 August 2019, the information in relation to the
investmwtegy and the designated fund manager of the Fund have
been revised as set out in (a) and (b) below:
a. Investment Strategy
3rd paragraph:
The Fund shall invest in sukuk with a minimum credit rating
of AA3 or P2 by RAM, or its equivalent rating by any other
domestic rating agencies. Should the credit rating of the sukuk be
downgraded by the rating agencies to below the minimum credit
rating, the Manager may dispose of the affected sukuk in the
market.
5th paragraph:
The Fund will only invest in Shariah-compliant derivatives that
are issued by counterparties with a strong credit rating. The
counterparties must have a credit rating of at least AA3 or P2
by RAM, or its equivalent rating by any other domestic rating
agencies. Should the credit rating of the counterparty be
downgraded by the rating agencies to below the minimum credit
rating, the Manager will unwind the affected invested Shariah-
compliant derivative instrument or hold the Shariah-compliant
derivative instrument to maturity if its period to maturity is less
than six (6) months.
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Eastspring Investments Dinasti Equity Fund
MANAGER’S REPORT (CONTINUED)
State of Affairs of b. EXTERNAL INVESTMENT MANAGER FOR THE EASTSPRING
the Fund INVESTMENTS DANA AL-ISLAH, EASTSPRING
(continued) INVESTMENTS DANA DINAMIK, EASTSPRING
INVESTMENTS DANA AL-ILHAM AND EASTSPRING
INVESTMENTS DINASTI EQUITY FUND
Roles and Duties of the External Investment Manager
The Manager has appointed Eastspring Al-Wara’ as the external
investment manager for Eastspring Investments Dana al-Islah,
Eastspring Investments Dana Dinamik, Eastspring Investments
Dana al-Ilham and Eastspring Investments Dinasti Equity Fund.
The External Investment Manager is responsible to invest the
investments of the above funds in accordance with the funds’
objective and its respective deeds, and subject to the Act, the
Guidelines and any practice notes issued by the SC from time
to time, as well as the internal policies and procedures of the
Manager. The External Investment Manager reports to the
investment committee of the above funds on a regular basis on
the status of the portfolio, proposed investment strategy and
other matters relating to the portfolio of the funds.
The External Investment Manager’s investment team is headed
by the chief investment officer. The chief investment officer is
supported by a team of experienced fund managers who are
responsible to manage the funds delegated to them.
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MANAGER’S REPORT (CONTINUED)
State of Affairs of Tan Ming Han
the Fund Chief Investment Officer
(continued)
Tan Ming Han (Ming Han) joined Eastspring Al-Wara’ as
chief investment officer in November 2018. Prior to joining
Eastspring Al-Wara’, Ming Han was an associate director
in Amundi Malaysia Sdn Bhd where he managed regional
and domestic equity portfolios for institutional clients from
June 2012 to October 2018. Ming Han has past investment
experience in the industry including Meridian Asset
Management Sdn Bhd, HwangDBS Investment Management
and Philip Capital Management where he also managed both
local and regional unit trust funds and discretionary mandates.
He has long and short equity experience from his working stint
as a hedge fund manager in Singapore in 2010. He started
his career in corporate finance and brings with him more than
15 years of investment industry experience. Ming Han holds a
Bachelor of Commerce degree majoring in Corporate Finance
and International Business from the University of Adelaide,
Australia.
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Eastspring Investments Dinasti Equity Fund
MARKET REVIEW
During the period under review, volatility was high throughout Greater China markets as
a series of events unfolded. The second half of 2019 started with social unrest in Hong
Kong, sparked by the Fugitive Offenders Bill tabled by the Hong Kong government. The
protests dragged on throughout the second half of 2019, causing tourism and retail sales
to slump and Hong Kong suffering its first recession since the global financial crisis. District
elections were also held in Hong Kong during the time, widely seen as a referendum to
the protests, which saw the pro-democracy party achieve its biggest win since history.
Meanwhile, trade friction between the United States (“US”) and China continued during
the half. More tariffs were imposed by the US on China, with USD 300billion worth of
Chinese imports slapped with fresh tariffs. However, financial markets later breathed a
sigh of relief after it was reported that the two countries were working towards a “Phase
1” deal that would avert further damage to both economies.
With manufacturing and private investments slowing due to uncertainty caused by
trade frictions, the Chinese government relaxed monetary policy by cutting reserve
requirements, lowering the lending rate, as well as loosening its fiscal purse to help
stimulate the economy. Policy help along with positive news flow surrounding the Phase 1
trade talks led to a rebound in financial markets.
Meanwhile, investors’ attention returned to the technology sector despite the World
Semiconductor Trade Statistics Organization projecting that global semiconductor sales
would decline 12.8% in 2019. The roll out of 5G networks in major cities in China and
the announcement of several 5G smartphone launches from major brands caused a stir
in the Greater China technology supply chains, with street analysts upgrading earnings
outlook for supply chain stocks into 2020.
Going forward, we expect trade tensions between the US and China to remain despite the
signing of a Phase 1 deal. We do see positives from the People’s Bank of China loosening
monetary policy and the Central government increasing the budget deficit to fiscally
stimulate the economy. Equity valuations now appear fair in Greater China stocks and over
the longer term we continue to look for companies entering the international markets or
playing more dominant roles in global supply chains, where we think the valuation gap is
likely to close in the long run.
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REBATES AND SOFT COMMISSIONS
During the period under review, the Manager and its delegates (if any) did not receive any
soft commissions from stockbrokers.
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Eastspring Investments Dinasti Equity Fund
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EASTSPRING INVESTMENTS
DINASTI EQUITY FUND
UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2019
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Eastspring Investments Dinasti Equity 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 unaudited financial statements set out on pages 19 to 68 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 six months financial period 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 DINASTI EQUITY FUND
We have acted as Trustee for Eastspring Investments Dinasti Equity Fund (the “Fund”)
for the financial period ended 31 December 2019. To the best of our knowledge, for
the financial period 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 Dinasti Equity Fund
SHARIAH ADVISER’S REPORT TO THE UNIT HOLDERS
OF EASTSPRING INVESTMENTS DINASTI EQUITY FUND
We have acted as the Shariah Adviser of Eastspring Investments Dinasti Equity Fund
(the “Fund”) managed by Eastspring Investment Berhad (“the Manager”) for the
financial period ended 31 December 2019.
Our responsibility is to ensure that the procedures and processes employed by the Manager
as well as the provisions of the Fund’s Deed dated 28 August 2009 and the Fourth
Supplemental Deed dated 11 December 2017 are all in accordance with Shariah principles.
In our opinion, based on the periodic reports submitted to us, the Manager has managed
and administered the Fund in accordance with Shariah principles and has complied with
applicable guidelines, rulings and decisions issued by the Shariah Advisory Council (“SAC”)
of the Securities Commission (“SC”) for the financial period ended 31 December 2019.
We confirm that the investment portfolio of the Fund comprises securities and instruments
which have been classified as Shariah-compliant by either the SAC of the SC, the SAC of
Bank Negara Malaysia (“BNM”) or the Shariah Supervisory Board of Dow Jones Islamic
Market Index (“SSB of DJIM”).
The exceptions are the securities of Real Gold Mining Ltd, China Petroleum & Chemical
Corporation and Petrochina Company Ltd which have been reclassified as Shariah non-
compliant by the SSB of DJIM. The securities of RGML were delisted from The Stock
Exchange of Hong Kong Limited effective 25 November 2019. These reclassified Shariah
non-compliant securities shall be disposed of according to the guidelines prescribed by the
SC.
As for securities and instruments which have not been classified by the SAC of the SC, the
SAC of BNM nor by the SSB of DJIM, we have reviewed and determined the Shariah status
of the said securities and instruments.
For and on behalf of Shariah Adviser,
BIMB SECURITIES SDN BHD
IR. DR. MUHAMAD FUAD ABDULLAH
Designated Shariah Person
Kuala Lumpur
Date: 17 February 2020
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UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2019
Note 6-months 6-months
financial financial
period period
ended ended
31.12.2019 31.12.2018
RM RM
INVESTMENT INCOME/(LOSS) 11,130,913 9,110,969
Gross dividend income
Profit income from Islamic deposits 55,502 509,300
with licensed financial institutions 6 100,905,170 (146,162,178)
Net gain/(loss) on financial assets at fair
(504,733) 425,040
value through profit or loss
Net foreign currency exchange (loss)/gain 111,586,852 (136,116,869)
EXPENSES 3 (7,802,030) (7,622,926)
Management fee
Custodian fee (231,636) (113,409)
Trustee fee
Audit fee 4 (346,757) (338,797)
Tax agent fee
Transaction cost (3,921) (3,932)
Other expenses
(1,709) (1,715)
PROFIT/(LOSS) BEFORE TAXATION
(1,997,139) (1,367,116)
TAXATION
(1,685,587) (57,419)
PROFIT/(LOSS) AFTER TAXATION AND
TOTAL COMPREHENSIVE PROFIT/(LOSS) (12,068,779) (9,505,314)
Profit/(loss) after taxation is made up of the 99,518,073 (145,622,183)
following:
Realised amount 5 - (1,159,844)
Unrealised amount
99,518,073 (146,782,027)
25,680,730 (30,565,117)
73,837,343 (116,216,910)
99,518,073 (146,782,027)
The accompanying summary of significant accounting policies and notes to the unaudited financial
statements form an integral part of these unaudited financial statements.
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Eastspring Investments Dinasti Equity Fund
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
Note 2019 2018
RM RM
ASSETS 8 34,282,512 82,869,290
Cash and cash equivalents
Dividends receivable 645,748 38,026
Amount due from Manager
Financial assets at fair value through 5,411,546 2,291,884
profit or loss 6 833,177,844 696,401,409
TOTAL ASSETS 873,517,650 781,600,609
LIABILITIES 2,830,789 -
Amount due to broker 10,919,022 1,517,878
Amount due to Manager
Amount due to custodian 310,029 67,917
Accrued management fee 1,315,606 1,223,770
Amount due to Trustee
Other payables and accruals 58,471 54,390
TOTAL LIABILITIES 26,916 43,657
15,460,833 2,907,612
NET ASSET VALUE OF THE FUND
858,056,817 778,692,997
EQUITY
Unit holders’ capital 800,461,915 907,041,492
Retained earnings/(accumulated losses) 57,594,902 (128,348,495)
NET ASSET ATTRIBUTABLE 858,056,817 778,692,997
TO UNIT HOLDERS
9 1,425,804,496 1,548,882,826
NUMBER OF UNITS IN CIRCULATION
0.6018 0.5027
NET ASSET VALUE PER UNIT (RM)
The accompanying summary of significant accounting policies and notes to the unaudited financial
statements form an integral part of these unaudited financial statements.
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UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2019
Unit holders’ Retained Total
capital earnings/ RM
(accumulated
RM
losses)
RM
Balance as at 1 July 2019 903,517,514 (41,923,171) 861,594,343
Movement in unit holders’ 117,587,382 - 117,587,382
contribution: (220,642,981) - (220,642,981)
99,518,073 99,518,073
Creation of units from - 57,594,902 858,056,817
applications 800,461,915 18,433,532 840,542,481
822,108,949
Cancellation of units
Total comprehensive income 177,583,711 - 177,583,711
(92,651,168) - (92,651,168)
for the financial period
- (146,782,027) (146,782,027)
Balance as at 31 December 2019
907,041,492 (128,348,495) 778,692,997
Balance as at 1 July 2018
Movement in unit holders’
contribution:
Creation of units from
applications
Cancellation of units
Total comprehensive loss
for the financial period
Balance as at 31 December 2018
The accompanying summary of significant accounting policies and notes to the unaudited financial
statements form an integral part of these unaudited financial statements.
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Eastspring Investments Dinasti Equity Fund
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2019
Note 6-months 6-months
financial financial
period period
ended ended
31.12.2019 31.12.2018
RM RM
CASH FLOWS FROM OPERATING ACTIVITIES 411,089,314 232,798,762
Proceeds from sale of Shariah-compliant (326,107,847) (302,632,016)
investments 13,525,910 11,113,406
55,502 509,300
Purchase of Shariah-compliant investments
Dividends received (7,732,948) (7,664,766)
Profit income received from Islamic deposits (343,687) (340,656)
Management fee paid
Trustee fee paid (2,212,540) (1,506,000)
Payment for other fees and expenses (504,733) 425,040
Net foreign currency exchange (loss)/gain
87,768,971 (67,296,930)
Net cash generated from/(used in) operating
activities
CASH FLOWS FROM FINANCING ACTIVITIES 116,436,845 190,906,477
Cash proceeds from units created (217,452,251) (94,312,835)
Payments for cancellation of units
Distribution paid - (2,196,916)
Net cash (used in)/generated from financing (101,015,406) 94,396,726
activities
NET (DECREASE)/INCREASE (13,246,435) 27,099,796
IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE 47,528,947 55,769,494
BEGINNING OF THE FINANCIAL PERIOD
CASH AND CASH EQUIVALENTS AT THE 8 34,282,512 82,869,290
END OF THE FINANCIAL PERIOD
The accompanying summary of significant accounting policies and notes to the unaudited financial
statements form an integral part of these unaudited financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE SIX MONTHS FINANCIAL PERIOD 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 in accordance with the Malaysian
Financial Reporting Standards (“MFRS”) and International Financial Reporting
Standards (“IFRS”) under the historical cost convention, 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 period. 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 L.
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 July 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 equity1 is recognised (either in profit or loss, other
comprehensive income or equity) depends on where the past transactions
that generated distributable profits were recognised.
¹ For the purposes of the investments made by the Fund, equity refers to Shariah-compliant equity
instruments.
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Eastspring Investments Dinasti Equity Fund
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 equity1
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.
B. INCOME RECOGNITION
Profit income from short-term Islamic deposits is recognised on an accrual basis using
the effective profit method.
Dividend income is recognised on the ex-dividend date, when the right to receive the
dividend has been established.
Realised gain or loss on sale of Shariah-compliant investments are accounted for as
the difference between the net disposal proceeds and the carrying amount of the
investments, determined on a weighted average cost basis.
C. TAXATION
Current tax expense is determined according to Malaysian tax laws at the current rate
based upon the taxable profit earned during the financial period.
Tax on dividend income from foreign quoted Shariah-compliant securities is based on
the tax regime of the respective countries that the Fund invests in.
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.
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E. FOREIGN CURRENCY TRANSLATION
Foreign currency transactions in the Fund are translated into the functional currency
using the exchange rates prevailing at the transaction dates. Foreign exchange gains
and losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the statement of comprehensive income, except when
deferred in other comprehensive income as qualifying cash flow hedges.
F. 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 Shariah-compliant 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 equity1 securities as fair value through other
comprehensive income. Consequently, all Shariah-compliant investments are
measured at fair value through profit or loss.
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 broker, amount due to custodian, amount due to Trustee and other
payables and accruals as financial liabilities measured at amortised cost.
¹ For the purposes of the investments made by the Fund, equity refers to Shariah-compliant equity
instruments.
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Eastspring Investments Dinasti Equity Fund
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. Shariah-
compliant 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
Shariah-compliant 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 liability is derecognised when the obligation under the liability is
extinguished; i.e when the obligation specified in the contract is discharged or
cancelled or expired.
Unrealised gains or losses arising from changes in the fair value of the ‘financial
assets at fair value through profit or loss including the effects of currency
translation, 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
period in which they arise. Any unrealised gains however are not distributable.
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 Shariah-compliant securities outside Malaysia are valued at the last traded
market price quoted on the respective foreign stock exchanges at the close of the
business day.
If a valuation based on the market price does not represent the fair value of the
Shariah-compliant 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 Shariah-compliant securities for a period exceeding 14 days,
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or such shorter period as agreed by the Trustee, then the Shariah-compliant
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.
Islamic deposits with licensed financial institutions are stated at cost plus accrued
profit rate calculated on the effective profit rate method over the period from the
date of placement to the date of maturity of the respective Islamic deposits.
Receivables and other financial liabilities are subsequently carried at amortised
cost using the effective profit rate method.
iii. Impairment for assets carried at amortised costs
For assets carried at amortised cost, the Fund assesses at the end of the financial
period whether there is objective evidence that a financial asset or group of
financial assets is impaired. A financial asset is a group of financial assets are
impaired and impairment losses are incurred only if there is objective evidence
of impairment as a result of one or more events that occurred after the initial
recognition of the asset (a ‘loss event’) and that loss event (or events) has an
impact on the estimated future cash flows of the financial asset or group of
financial assets that can be reliably estimated.
The amount of the loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset’s
original effective profit rate. The asset’s carrying amount is reduced and the
amount of the loss is recognised in the statement of comprehensive income.
If ‘receivables’ have a variable profit rate, the discount rate for measuring any
impairment loss is the current effective profit rate determined under the contract.
As a practical expedient, the Fund may measure impairment on the basis of an
instrument’s fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment
was recognised (such as an improvement in the obligor’s credit rating), the
reversal of the previously recognised impairment loss is recognised in the
statement of comprehensive income.
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Eastspring Investments Dinasti Equity Fund
When an asset is uncollectible, it is written off against the related allowance
account. Such assets are written off after all the necessary procedures have been
completed and the amount of the loss has been determined.
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 considers 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.
Write-off
The Fund writes off financial assets, in whole or in part, when it has exhausted
all practical recovery efforts and has concluded that there is no reasonable
expectation of recovery. The assessment of no reasonable expectation of recovery
is based on unavailability of obligor’s sources of income or assets to generate
sufficient future cash flows to pay 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 period.
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G. CASH AND CASH EQUIVALENTS
For the purpose of the statement of cash flows, cash and cash equivalents
comprise Islamic deposit with a licensed financial institution and bank balances
that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
H. 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.
I. 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;
• t here 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.
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.
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Eastspring Investments Dinasti Equity Fund
J. AMOUNTS DUE FROM/(TO) BROKERS
Amounts due from and to brokers represent receivables for Shariah-compliant
securities sold and payables for Shariah-compliant 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,
profit 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.
K. FAIR VALUE OF FINANCIAL INSTRUMENTS
Shariah-compliant financial instruments comprise financial assets and financial
liabilities. 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 information presented herein represents the
estimates of fair values as on the statement of financial position date.
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L. 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 impacts to the Fund’s results and financial position are
tested for sensitivity to changes in the underlying parameters.
Estimates and judgments are continually evaluated by the Manager and the Trustee
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 Shariah-compliant investment, the Manager will
ensure that all assets of the Fund under management will be valued appropriately, that
is at fair value and in compliance with Securities Commission Guidelines on Unit Trust
Funds.
However, the Manager is of the opinion that in applying the accounting policies, no
significant judgment was required.
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Eastspring Investments Dinasti Equity Fund
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 DECEMBER 2019
1. INFORMATION ON THE FUND
The Unit Trust Fund (the “Fund”) was constituted under the name Eastspring
Investments Dinasti Equity Fund pursuant to the execution of a Deed dated
28 August 2009 (the “Deed”) entered into between Eastspring Investments Berhad
(the “Manager”) and Deutsche Trustees Malaysia Berhad (the “Trustee”), followed
by Supplemental Deed dated 20 January 2012, Second Supplemental Deed dated 26
March 2014, Third Supplemental Deed dated 2 January 2015 and Fourth Supplemental
Deed dated 11 December 2017 (collectively referred to as the “Deed”).
The Fund was launched on 26 October 2009 and will continue its operations until
terminated by the Trustee or the Manager as provided under Part 12 of the Deed.
The Fund invests primarily in Shariah-compliant equities and Shariah-compliant equity-
related securities of companies based in the Greater China region which potentially
offer attractive long-term value. These include Shariah-compliant securities of Greater
China-based companies listed or to be listed on recognised exchanges of the People’s
Republic of China, Hong Kong and Taiwan as well as other recognised exchanges such
as in Malaysia, Singapore and United States of America where the regulatory authority
is a member of the International Organization of Securities Commissions (“IOSCO”). All
investments will be subjected to the Securities Commissions (“SC”) Guidelines on Unit
Trust Funds, the Deed and the objective of the Fund.
The main objective of the Fund is to provide investors with long-term capital
appreciation by investing in Shariah-compliant investments with exposure to the Greater
China Region.
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, exposure to interest rate risk and foreign exchange/currency risk), fund
management risk, capital risk, credit/default risk, liquidity risk and Shariah status
reclassification 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
8 assets at assets at fair RM
6 amortised value through
profit or loss
cost
RM
RM
2019 34,282,512 - 34,282,512
Cash and cash equivalents 5,411,546 - 5,411,546
Amount due from 645,748 - 645,748
Manager - 833,177,844 833,177,844
Dividends receivable 40,339,806 833,177,844 873,517,650
Quoted Shariah-compliant
securities
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Eastspring Investments Dinasti Equity Fund
Note Receivables Financial Total
RM assets at fair RM
value through
profit or loss
RM
2018
Cash and cash equivalents 8 82,869,290 - 82,869,290
Amount due from 2,291,884 - 2,291,884
Manager
Dividends receivable 38,026 - 38,026
Quoted Shariah-compliant 6 - 696,401,409 696,401,409
securities
85,199,200 696,401,409 781,600,609
All liabilities are financial liabilities which are carried at amortised cost.
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 an Islamic Unit Trust Fund, however,
helps mitigate this risk because a fund would generally hold a well-diversified
portfolio of Shariah-compliant securities from different market sectors so that the
collapse of any one Shariah-compliant security or any one market sector would
not impact too greatly on the value of the fund.
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The table below shows assets of the Fund as at 31 December which are exposed
to price risk:
2019 2018
RM RM
Quoted Shariah-compliant securities 833,177,844 696,401,409
designated at fair value through profit or loss
The following table summarises the sensitivity of the Fund’s net asset value
and profit/(loss) after tax to movements in prices of quoted Shariah-compliant
securities at the end of the reporting period. The analysis is based on the
assumptions that the market price of the quoted Shariah-compliant 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 Shariah-compliant securities, having regard to the historical volatility of
the prices.
% Change in price Market Impact on profit/
value (loss) after tax and
2019
+5% RM net asset value
-5%
RM
2018
+5% 874,836,736 41,658,892
-5% 791,518,952 (41,658,892)
731,221,479 34,820,070
661,581,339 (34,820,070)
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Eastspring Investments Dinasti Equity Fund
ii. Exposure to interest rate risk
Fair value interest rate risk is the risk that the value of a financial instrument will
fluctuate due to changes in market interest rates.
Interest rate is a general economic indicator that will have an impact on the
management of the Fund regardless whether it is an Islamic Unit Trust Fund or
otherwise. It does not in any way suggest that the Fund will invest in conventional
financial instruments. All the investments are carried out for the Fund are in
accordance with Shariah requirements.
As at the date of the statement of financial position, all the financial assets and
financial liabilities have no exposure to interest rate movement except for Islamic
deposits with licensed financial institution of Nil (2018: RM25,051,151) which
have maturities of less than one year.
The Fund’s investments in Islamic deposits with licensed financial institutions are
short term in nature. Therefore, exposure to interest rate fluctuations is minimal.
The Fund is not exposed to cash flow interest rate risk as the Fund does not hold
any financial instruments at variable profit rate.
iii. Foreign exchange/Currency risk
As the Fund may invest its assets in Shariah-compliant securities denominated
in a wide range of currencies other than Ringgit Malaysia, the NAV of the Fund
expressed in Ringgit Malaysia may be affected favourably or unfavourably by
exchange control regulations or changes in the exchange rates between Ringgit
Malaysia and such other currencies. The risk is minimised through investing in a
wide range of foreign currencies denominated assets and thus, diversifying the
risk of single currency exposure.
In the normal course of investment, the Manager will usually not hedge foreign
currency exposure. The Manager may however, depending on prevailing market
circumstances at a particular point in time, choose to use Islamic forward or
Islamic option contracts for hedging and risk reduction purposes.
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The following table sets out the foreign exchange/currency risk concentrations
and counterparties of the Fund.
Financial Cash Dividends Total
assets at and cash receivable RM
fair value equivalents
through RM
profit or loss RM
RM
2019 419,522,832 - 38,397 419,561,229
186,142,238 34,052,804 - 220,195,042
HKD 227,512,774 228,120,125
USD 833,177,844 - 607,351 867,876,396
TWD 34,052,804 645,748
Financial Cash Dividends Total
assets at and cash receivable RM
fair value equivalents
through RM
profit or loss RM
RM
2018 397,894,311 - 38,597 397,932,908
128,396,039 46,050,810 - 174,446,849
HKD 170,111,059 - 170,111,059
USD 696,401,409 - 742,490,816
TWD 46,050,810 38,597
Client Services : 03-2778 1000 37
Eastspring Investments Dinasti Equity Fund
The table below summarises the sensitivity of the Fund’s financial assets fair value
to changes in foreign exchange movements at the end of the reporting period.
The analysis is based on the assumption that the foreign exchange rate changes
by 5% with all variables remain constant. This represents management’s best
estimate of a reasonable possible shift in the foreign exchange rate having regard
to historical volatility of this rate.
Disclosures below are shown in absolute terms, changes and impacts could be
positive or negative.
Change in Impact on Impact on
price profit/(loss) net asset
% after tax value
RM
RM
20,978,061
2019 5 20,978,061 11,009,752
5 11,009,752 11,406,006
HKD 5 11,406,006
USD
TWD 5 19,896,645 19,896,645
5 8,722,342 8,722,342
2018 5 8,505,553 8,505,553
HKD
USD
TWD
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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 profit of unit holders.
Capital risk
The capital of the Fund is represented by equity consisting of unit holders’ capital
of RM800,461,915 (2018: RM907,041,492) and retained earnings/(accumulated
losses) of RM57,594,902 (2018: (RM128,348,495)). 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 Shariah-compliant investment
activities of the Fund.
Credit/Default risk
Credit risk refers to the ability of an issuer or a counter party to make timely payments
of profit, principals and proceeds from realisation of investments.
For amount due from brokers, the settlement terms are governed by the relevant rules
and regulations as prescribed by respective stock exchange.
The credit/default risk is minimal as all transactions in quoted Shariah-compliant
securities are settled/paid upon delivery using approved brokers. The credit risk arising
from placements of Islamic deposits in licensed financial institutions is managed by
ensuring that the Fund will only place Islamic deposits in reputable licensed financial
institutions. 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.
Client Services : 03-2778 1000 39
Eastspring Investments Dinasti Equity Fund
The following table sets out the credit risk concentrations and counterparties of the
Fund:
Cash and cash Amount Dividends Total
equivalents due from receivable RM
Manager
RM RM
RM
2019 34,282,512 - - 34,282,512
Finance - - 38,397 38,397
- AA1
Industrial - - 607,351 607,351
- NR
Technology - 5,411,546 - 5,411,546
- NR 34,282,512 5,411,546 645,748 40,339,806
Other
- NR 5,000,467 - - 5,000,467
57,818,139 - - 57,818,139
2018 20,050,684 - - 20,050,684
Finance - - 38,026 38,026
- AAA
- AA1 - 2,291,884 - 2,291,884
- AA2 82,869,290 2,291,884 38,026 85,199,200
Industrial
- NR
Other
- NR
None of these assets are past due or impaired.
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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
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 Islamic liquid assets, after consultation with
the Trustee, to meet anticipated payments and cancellations of units by unit holders.
Islamic liquid assets comprise cash, Islamic deposits with licensed financial institutions
and other instruments which are capable of being converted into cash within 7 days.
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Eastspring Investments Dinasti Equity Fund
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 RM
to 1 year
RM
RM
10,919,022
2019 2,830,789 - 10,919,022
Amount due to Manager 1,315,606 - 2,830,789
Amount due to broker 58,471 - 1,315,606
Accrued management fee 310,029 - 58,471
Amount due to Trustee - - 310,029
Amount due to custodian 26,916 26,916
Other payables and accruals 15,433,917 26,916
Contractual cash outflows 15,460,833
2018 1,517,878 - 1,517,878
Amount due to Manager 1,223,770 - 1,223,770
Accrued management fee -
Amount due to Trustee 54,390 - 54,390
Amount due to custodian 67,917 43,657 67,917
Other payables and accruals 43,657 43,657
Contractual cash outflows - 2,907,612
2,863,955
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Shariah Status Reclassification risk
The risk that the currently held Shariah-compliant equity securities in the portfolio
of Islamic funds may be reclassified as Shariah non-compliant in the periodic review
of the securities by the Shariah Advisory Council of the Securities Commission, the
Shariah Adviser or the Shariah Supervisory Boards of relevant Islamic indices. If this
occurs, the Manager will take the necessary steps to dispose of such securities.
Opportunity loss could occur due to the restriction on the Fund to retain the excess
capital gains derived from the disposal of the reclassified Shariah non-compliant
securities. In such an event, the Fund is required:
i. to dispose such securities with immediate effect or within one (1) calendar
month if the value of the securities exceeds or is equal to the investment cost on
the effective date of Reclassification of the List of Shariah-compliant securities
(“Reclassification“) by the SAC of the SC, the Shariah Adviser or the Shariah
Supervisory Boards of relevant Islamic indices. The Fund is allowed to keep
dividends received and capital gains from the disposal of the securities up to the
effective date of Reclassification. However, any dividends received and excess
capital gains from the disposal of the Shariah non-compliant securities after
the effective date of Reclassification should be channelled to baitulmal and/or
approved charitable bodies;
ii. to hold such securities if the value of the said securities is below the investment
cost on the effective date of Reclassification until the total subsequent dividends
received (if any) and the market price of the securities is equal to the cost of
investment at which time disposal has to take place within one (1) calendar
month, capital gains (if any) from the disposal of the securities should be
channelled to baitulmal and/or approved charitable bodies; or
iii. to dispose such securities at a price lower than the investment cost which will
result in a decrease in the Fund’s value.
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Eastspring Investments Dinasti Equity 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 Shariah-
compliant securities) are based on quoted market prices at the close of trading on
the period 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.
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.
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Assessing the significance of a particular input to the fair value measurement in its
entirety requires judgement, 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.
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 833,177,844 - - 833,177,844
Financial assets at fair value
through profit or loss:
Quoted Shariah
-compliant securities
2018
Financial assets at fair value
through profit or loss:
Quoted Shariah
-compliant securities 696,401,409 - - 696,401,409
Investments whose values are based on quoted market prices in active markets,
and are therefore classified within Level 1, include active quoted Shariah-
compliant 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 F to the financial statements.
ii. The carrying value of cash and cash equivalents, dividends receivable, amount due
from Manager and all liabilities are a reasonable approximation of their fair values
due to their short term nature.
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Eastspring Investments Dinasti Equity Fund
3. MANAGEMENT FEE
In accordance with the Deed, the Manager is entitled to a management fee at a rate
not exceeding 2.00% per annum of the net asset value of the Fund accrued and
calculated on daily basis.
For the financial period ended 31 December 2019, the management fee is recognised
at a rate of 1.80% (2018: 1.80%) 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 RM18,000 per annum (excluding foreign custodian fees and charges).
For the financial period ended 31 December 2019, the Trustee fee is recognised at a
rate of 0.08% (2018: 0.08%) per annum of the net asset value of the Fund, subject to
a minimum fee of RM18,000 per annum 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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