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Phillip Investment Funds

Annual Report For the year ended 31 December 2013

1


MANAGER

Phillip Capital Management (S) Ltd

250 North Bridge Road #06-00

Raffles City Tower

Singapore 179101

DIRECTORS OF THE MANAGER

Lim Hua Min

Loh Hoon Sun

Jeffrey Lee Chay Khiong

Linus Lim Wen Sheong

Lee Ken Hoon

TRUSTEE

Citicorp Trustee (Singapore) Limited

8 Marina View #21-00

Asia Square Tower 1

Singapore 018960

CUSTODIAN

Citibank N.A. Singapore Branch

8 Marina View #21-00

Asia Square Tower 1

Singapore 018960

REGISTRAR

Boardroom Corporate & Advisory Services Pte Ltd

50 Raffles Place

#32-01 Singapore Land Tower

Singapore 048623

2

AUDITORS

KPMG LLP

16 Raffles Quay #22-00

Hong Leong Building

Singapore 048581

SOLICITORS TO THE MANAGER

Chan & Goh LLP

50 Craig Road #03-01

Singapore 089688

SOLICITORS TO THE TRUSTEE

Drew & Napier LLP

10 Collyer Quay, #10-01

Ocean Financial Centre

Singapore 049315

3

CONTENTS Page

MANAGER’S REPORT 4-19

FINANCIAL STATEMENTS

REPORT OF THE TRUSTEE 20

STATEMENT BY THE MANAGER 21

INDEPENDENT AUDITORS’ REPORT 22– 23

Statements of Total Return FS1

Statements of Financial Position FS2

Statements of Movements of Unitholders’ Funds FS3-FS4

Statements of Portfolio FS5 – FS18

Notes to the Financial Statements FS19 – FS34

4

Phillip Money Market Fund

MANAGER’S REPORT

The fund generated a net return of 0.45% for the year ended 31 December 2013. The

return outperformed the corresponding 3-month SGD Interbank Offer rate (“SIBOR”) average at 0.38%.

As at 31 December 2013, the portfolio’s Weighted Average Maturity (“WAM’) stood at

79 days and liquidity was good with 11% and 16% of assets maturing within 14 days and

1month respectively. The bond portfolio has an average credit rating A as stipulated in

MAS Code on Collective Investment Schemes on high credit quality issues. The fund

comprises mainly Asian fixed rate issues and deposits with banks.

For the period under review, Singapore’s GDP expanded by 4.1% in 2013 compared with

1.9% in 2012. The increase was led by stronger growth in manufacturing, finance,

construction and trade-related industries amid improving economic conditions in the

external environment. In comparison, tourist-related activities and consumer services

experienced a slight decline due to lower tourist spending and lower vehicle sales on tighter financing rules respectively.

For the whole of 2013, Monetary Authority of Singapore (“MAS”) CPI inflation averaged

2.4% in 2013, sharply lower compared to 4.6% in 2012 and in the previous four years.

This primarily reflected a lower COE premium and slower increase in accommodation

costs. In October 2013’s policy meeting, MAS maintained its policy of a modest and

gradual appreciation of the S$NEER policy band on expectations that the domestic labour

market will remain tight and exert upward pressures on CPI inflation as firms pass on

accumulated costs to consumer prices.

SGD Singapore Swap Offer Rate (“SOR”) 1 month and 3 months yields dropped to

historical lows of 0.14% and 0.22% respectively during the past twelve months. While

SGD Inter-Bank Offer Rate (“SIBOR”) rates increased marginally, the1-month rate

increased by 4bp to 0.35% and 3-months rate by 3bp to 0.40% during the past twelve

months. The relative muted increase in SIBOR over the past year also reflected ample SGD liquidity.

OUTLOOK

The Singapore economy is expected to register growth of 2% to 4% in 2014 sustained by a

growth momentum in the advanced economies and moderate growth in Asia ex-Japan,

with expected gains to its exports from the recovery. While MAS expects core inflation to

rise slower to 2% to 3% in 2014, they remain concerned over higher inflation pass-through

from domestic wage cost pressures from 2013 Budget policies. We expect they are likely

to keep the current hawkish bias at the semi-annual April 2014 policy meeting, which

means short term interest rates will continue to remain low for a while.

Our strategy remains to buy and hold high quality securities to maturity and manage

interest rate risk with a portfolio of staggered maturities. In addition, we maintain prudent

management of concentration and liquidity risks with a wide diversification of issuers and

banks for the portfolio.

5

Disclosures on the Fund1

a) I Investment Classified by Geography

Fair Value

as at

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013 31/12/2013

S$ %

By Geography (Summary)

Australia 1,517,211 0.19

China / Hong Kong 71,994,383 9.16

Italy 12,049,716 1.53

Netherlands 2,797,011 0.36

New Zealand 3,075,015 0.39

Singapore 159,429,067 20.29

South Korea 52,322,173 6.67

Supranational 1,601,248 0.20

United Kingdom 34,410,660 4.39

United States 504,776 0.06

Accrued interest on debt securities 2,235,486 0.28

Portfolio of investments 341,936,746 43.52

Other net assets 443,820,899 56.48

Net assets attributable to

unitholders

785,757,645 100.00

a) II Investment Classified by Industry

Fair Value

as at

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013 31/12/2013

S$ %

By Industry (Summary)

Airline leasing 254,278 0.03

Banks & financials 160,604,480 20.44

Engineering & construction 505,916 0.06

Government agency 52,849,504 6.74

Hotel and property 61,717,446 7.85

Industrials 7,810,724 0.99

Investment companies 22,011,880 2.80

Media 16,332,160 2.08

REITS 505,824 0.07

Supranational 1,601,248 0.20

1 As required by the Code on Collective Investment Schemes

6

Transporation & logistics 13,179,972 1.68

Utilities 2,327,828 0.30




Net assets attributable to unitholders 785,757,645 100.00

a) III Asset Class

Fair Value

as at

31/12/2013

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013

S$ %

Debt Securities 341,936,746 43.52

Other net assets (92,612) (0.02)

Term deposits 427,670,503 54.43

Cash and Bank Balances 16,243,008 2.07


a) IV Credit Rating of Non-Deposit Investments

Fair Value

as at

31/12/2013

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013

S$ %

A 67,552,172 8.60

AA 7,213,174 0.92

AA * 18,630,402 2.37

AAA * 1,608,582 0.20

Aa ** 774,654 0.10

Unrated 246,157,762 31.33


Source of the credit rating is from Standard & Poor’s except for the following:

* Credit rating is from Fitch.

** Credit rating is from Moody’s.

Type of Non-Deposit Investments

Fair Value

as at

31/12/2013

Percentage of

Net Assets

Attributable to

Unitholders as

at

31/12/2013

S$ %

Certificates of Deposit 74,049,099 9.42

Fixed Rate Bonds 265,404,016 33.79

Fixed Rate Notes 248,145 0.03



7

Maturity Profile of Underlying Investments

Fair Value

as at

31/12/2013

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013

S$ %

Up to 30 days 53,012,364 6.76

31 to 60 days 12,997,777 1.65

61 to 90 days 59,908,709 7.62

91 to 120 days 15,583,602 1.98

121 to 180 days 38,417,792 4.89

181 to 365 days 124,482,117 15.85

366 to 643 days 35,298,899 4.49


341,936,746 43.52

b) Top Ten Holdings

10 Largest Holdings as at 31 December 2013

Fair Value

as at

31/12/2013

S$

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013

%

Bank of China 0.9% Due 28 March 2014 28,006,328 3.56

Street Square 3.02% Due 05 May 2014 25,340,648 3.22

Savu Investments 3.83% Due 17 January 2014 22,011,880 2.80

Lloyds TSB Bank 3.5% Due 17 September 2014 20,104,512 2.56

Maybank Kim Eng 1.35% Due 28 January 2014 20,000,440 2.55

Agriculture Bank of China 1.38% Due 19

December 2014 19,000,000 2.42

Singapore Press Holdings 2.81% Due 02 March

2015 16,332,160 2.08

Bank of China 1.15% Due 06 August 2014 14,993,055 1.91

Royal Bank of Scotland 2.85% Due 31 March 2014 14,058,002 1.79

SMRT Capital Pte Ltd2.42% Due 07 October 2014 13,179,972 1.68

8


Fair Value

as at

31/12/2012

S$

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2012

%

SingPost 3.13% Due 11 April 2013 22,867,571 2.67

Maybank Kim Eng 1.7% Due 21 June 2013 21,025,119 2.45

Mapletree Treasury 4.6% Due 20 August 2013 19,082,132 2.23

F&N Treasury 4.55% Due 5 August 2013 17,812,022 2.08

HSBC 1.6% Due 07 October 2013 12,292,875 1.43

Shinhan Bank 1.3% Due 30 May 2013 12,010,800 1.40

Bank of China 1.35% Due 14 February 2013 12,000,000 1.40

CapitaMalls Asia Treasury 2.15%

Due 21 January 2014 10,986,250 1.28

Export Import Bank of Korea 1.65%

Due 18 January 2013 10,025,000 1.17

Kookmin Bank 1.38% Due 19 April 2013 10,010,000 1.17

c) (i) Exposure to Derivatives as at 31 December 2013.

Nil.

c) (ii) Net gains/losses on derivative contracts realised during the period from 1

January 2013 to 31 December 2013.

Nil.

c) (iii) Net gains/losses on outstanding derivative contracts marked to market as at 31 December 2013.

Nil.

c) (iv) Description of the method used to calculate the global exposure of financial

derivatives

The global exposure relating to derivative instruments is calculated using the

commitment approach. The global exposure of each sub-fund is calculated as the sum of:

(a) the absolute value of the exposure of each individual financial derivative not

involved in netting or hedging arrangements;

(b) the absolute value of the net exposure of each individual financial derivative

after netting or hedging arrangements; and

(c) the sum of the values of cash collateral received pursuant to:

(i) the reduction of exposure to counterparties of OTC financial derivatives;

and

(ii) efficient portfolio management techniques relating to securities lending

and repurchase transactions, and that are reinvested.

9

d) Amount and percentage of total fund size invested in other unit trusts, mutual funds

and collective investment schemes as at 31 December 2013.

Nil

e) Amount and percentage of borrowings of total fund size as at 31 December 2013.

Nil

f) Amount of redemptions and subscriptions for the period 1 January 2013 to 31 December 2013.

Total amount of redemptions S$2,928,483,958

Total amount of subscriptions S$2,852,473,846

g) Related party transactions

Term deposits, cash and bank balances held with

related parties of the trustee S$15,976,719

h) Performance of the Fund

Note: * Cumulative returns are in Singapore dollars calculated on a bid to bid basis, with net dividends reinvested.

3

months

6

months 1 year

3

years*

5

years*

10

years*

Inception*

(on 16 Apr 2001)

The Fund 0.10% 0.22% 0.45% 1.57% 3.35% 12.20% 15.80%

Source: Bloomberg

i) Expense Ratio 31 December 2013 31 December 2012

Without performance fee 0.50% 0.48%

With performance fee 0.50% 0.48%

The expense ratio is computed in accordance with IMAS’ guidelines. The expenses

used in the calculation of the expense ratio do not include brokerage and other

transaction costs, performance fee (where applicable), foreign exchange gains or

losses, front or back end loads arising from the purchase or sale of other schemes and tax deducted at source or arising out of income received.

j) Turnover Ratio 31 December 2013 31 December 2012

28.24% 1.88%

The portfolio turnover ratio is calculated in accordance with the formula stated in the

Code on Collective Investment Schemes. The calculation of the portfolio turnover

ratio is based on the total value of purchases (or sales) of the underlying investments

divided by the weighted average daily net asset value. The total value of bonds matured during the year is not included in the computation of portfolio turnover ratio.

k) Any material information that will adversely impact the valuation of the scheme such

as contingent liabilities of open contracts.

Nil.

10

l) For schemes which invest more than 30% of their deposited property in another

scheme, the following key information on the second-mentioned scheme (‘the underlying scheme”) should be disclosed as well.

(i) Top 10 holdings at market value and as percentage of NAV as at 31 December

2013 and 31 December 2012.

Not applicable.

(ii) Expense ratios for the period 31 December 2013 and 31 December 2012.

Not applicable.

(iii) Turnover ratios for the period 31 December 2013 and 31 December 2012

Not applicable.

m) Soft dollar arrangements

The Manager shall be entitled to and intends to receive or enter into soft-dollar

commissions or arrangements. The Manager will comply with applicable regulatory

and industry standards on soft-dollars. The soft-dollar commissions which the

Manager may receive include research and advisory services, economic and political

analyses, portfolio analyses including valuation and performance measurements,

market analyses, data and quotation services, computer hardware and software or any

other information facilities to the extent that they are used to support the investment

decision making process, the giving of advice, or the conduct of research or analysis in

relation to the investments managed for clients. The soft dollar credits utilised are not

allocated on a specific client basis. The brokers also execute trades for other funds managed by the Manager.

The Manager will not accept or enter into soft dollar commissions or arrangements

unless such soft-dollar commissions/arrangements would, in the opinion of the

Manager, assist the Manager in its management of clients’ funds, provided that the

Manager shall ensure at all times that transactions are executed on the best available

terms taking into account the relevant market at the time for transactions of the kind

and size concerned, and that no unnecessary trades are entered into in order to qualify for such soft-dollar commissions or arrangements.

The Manager does not, and is not entitled to retain cash rebates for its own account in respect of rebates earned when transacting in securities for account of clients’ funds.

The Manager did not receive any soft dollar services in respect of the fund during the year.

11

Phillip Income Fund

MANAGER’S REPORT

For the year ended 31 December 2013, the fund generated a return of 3.37% (on a bid-to-

bid basis). The fund’s return underperformed its benchmark which registered 7.71% as the

fund overweighted equities relative to the benchmark. Its performance was achieved at a

lower volatility relative to the benchmark and peers. Since its inception on 16 April 2001,

the fund is up by 20.44%.

As at 31 December 2013, the portfolio is 36% in debt securities, 59% in equities and 5% in

cash. During the period under review, the asset allocation for the fund increased exposure

to equities, which benefited from exposure to the economic recovery of developed markets

in Japan, US and Europe. The performance was partially offset by a quick exodus of fund

flows out of emerging capital markets on news of US Fed Reserve tapering quantitative

easing on the improving state of the economy, and current account deficits reported by several emerging South East Asian countries.

The bonds allocation reduced from 82% to 36% in the first quarter of 2013 with an

expectation of rising bond yields in conjunction with the US tapering talks and the move

by Chinese policy makers to clamp down on a segment of non-bank lending. Nevertheless,

performance of the bonds portfolio was positive, driven by USD and Renminbi appreciation against SGD and a shortened portfolio duration.

The fund declared total distribution of SGD 4.50cts during the year.

OUTLOOK

Global macroeconomic conditions are expected to pick up gradually as developed markets

are becoming the new engine of global growth and US is at the forefront of this shift due

to upturn in the US business cycle. The Euro zone entered 2014 in recovery mode and

continued momentum should see a further gradual improvement through the year.

In the case of Japan, it is showing much stronger momentum following a series of efforts

involving fiscal stimulus, monetary stimulus and structural reform by Prime Minister Abe.

Japan’s economic revival has hit some potholes recently and may be hampered further by

consumption tax hike in April, although some significant monetary stimulus will be

implemented at the same time.

In Asia, continued slowdown in China as recent policies to rein in credit expansion could

potentially weigh on investment growth. For the ASEAN economies, growth is likely to

remain modest supported by resilient domestic demand. Upcoming elections in many large

emerging market economies this year are another potential source of volatility.

We expect more stabilization in the bond market with accommodative monetary policies

expected to stay through 2014 by developed market central banks, with more easing from

the Bank of Japan and the ECB, and followed by a more gradual rise in core yields in the

Fed rate.

At this point, we maintain a strategic preference for equities over fixed income.

12

For the equities portion of the portfolio, the long term investment theme for the portfolio is

investing in high-dividend defensive stocks during downturn, and high-dividend financials

and cyclicals when the economic outlook is improving. We believe the portfolio will

benefit from the high income and earnings growth opportunities in these stocks, even in

the current rising interest rate environment.

The portfolio intends to maintain a core allocation to fixed income at 30%. In most interest

rate environments, fixed income provides diversification, a steady stream of income and

lower volatility over time. In the rising interest rate environment, we are shortening

duration, buying floating rate notes as its coupon resets to market changes, and investing

in higher coupon securities which have shorter durations.

Our strategy is to balance the risk and reward of the fund through active management of

asset allocation, security selection and bond duration. The portfolio is diversified

geographically across developed and emerging markets.

13

Disclosures on the Fund 2

a) I Investment Classified by Geography

Fair Value

as at

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013 31/12/2013

By Geography (Summary) S$ %

Australia 471,701 3.54

Bermuda 435,990 3.29

British Virgin Islands 244,632 1.84

Cayman Islands 1,016,179 7.63

China / Hong Kong 361,359 2.71

France 248,464 1.87

Indonesia 582,588 4.38

Italy 232,155 1.74

Japan 1,638,841 12.31

Malaysia 476,612 3.58

New Zealand 206,695 1.55

Philippines 608,805 4.58

Singapore 3,295,147 24.76

South Korea 793,606 5.96

Taiwan 343,958 2.58

Thailand 314,187 2.36

Untied Kingdom 839,994 6.32

United States 551,308 4.14

Accrued interest on debt securities 60,123 0.45


Other net assets 587,525 4.41


2 As required by the Code on Collective Investment Schemes

14

a) II Investment Classified by Industry

Fair Value

as at

31/12/2013

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013

By Industry (Summary) S$ %

Airline leasing 197,410 1.48

Apparel 257,977 1.94

Automotive 397,864 2.98

Banks & financials 2,490,548 18.72

Chemicals 145,831 1.10

Distribution & wholesale 199,040 1.50

Engineering & construction 87,511 0.66

Exchange traded fund 163,381 1.23

Food & beverage 1,045,476 7.84

Healthcare 251,175 1.89

Home builders 244,780 1.84

Hotel and property 737,880 5.55

Materials 275,399 2.07

Mining 223,386 1.68

Oil & gas 248,464 1.87

Pharmaceuticals 408,342 3.07

REITS 1,430,196 10.73

Retail 434,409 3.26

Semiconductors 467,156 3.51

Shipbuilding 258,612 1.94

Telecommunications 1,683,255 12.66

Transportation 1,014,129 7.62





a) III Asset Class

Fair Value

as at

31/12/2013

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013

S$ %

Debt Securities 4,921,914 36.98

Equities / Equities Fund 6,370,234 47.86

REITs 1,430,196 10.75

Cash and Bank Balances 1,173,642 8.82

Other net assets (586,117) (4.41)


15

a) IV Credit Rating of Debt Securities

Fair Value

as at

31/12/2012

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2012

S$ %

A 684,246 5.14

BB 784,284 5.89

BBB 576,023 4.33

Unrated 2,877,361 21.62


Source of the credit rating is from Standard & Poor’s.

b) Top Ten Holdings


Fair Value

as at

31/12/2013

Percentage of

Net Assets

Attributable to

Unitholders as at

31/12/2013

S$ %

Hyundai Capital 4.5% Due 16 May 2017 336,173 2.53

China Shanshui 10% Due 27 April 2017 275,399 2.07

Vodafone Group Plc 272,720 2.05

Nam Cheong 6% Due 05 November 2015 258,612 1.94

Texhong Texttile 6. 5% Due 18 January 2019 257,977 1.94

Courta 4.75% Due 02 May 2016 257,031 1.93

Keppel Telecom & Transport 2.625% Due 13 August

2019 254,435 1.91

China Mengniu 3.5% Due 27 November 2018 251,594 1.89

Biosensors Investment 4.875% Due 23 January 2017 251,175 1.89

Neptune Orient Lines 4.65% Due 09 September 2020 250,926 1.89

16


Fair Value

as at

31/12/2012

Percentage of

Net Assets

Attributable to

Unitholders as

at 31/12/2012

S$ %

Keppel Land Ltd 2.5% Due 23 June 2013 401,476 3.03

Korea Finance Co 0% Due 17 February 2016 396,259 2.99

NYSE Euronext 317,469 2.40

SPI Electricity & Gas 7.5% Due 25 September 2017 284,563 2.15

Turkiye Garanti 5.25% Due 13 September 2022 262,781 1.99

Tingyi (CI) Holding Corporation 3.875% Due 20 June

2017 260,639 1.97

Lend Lease Fin 4.625% Due 24 July 2017 259,913 1.96

ABN AMRO Bank NV 6.25% Due 13 September 2022 259,669 1.96

AACI REIT MTN 4.9% Due 08 August 2016 259,070 1.96

IS Baukasi 6% Due 24 October 2022 258,230 1.95

c) (i) Exposure to derivatives as at 31 December 2013:

Nil

c) (ii) Net losses on derivative contracts realized for the period from 1 January 2013 to

31 December 2013.

S$ 51,673

c) (iii) Net gains/(losses) on outstanding derivative contracts marked to market as at 31 December 2013.

Nil

c) (iv) Description of the method used to calculate the global exposure of financial

derivatives

The global exposure relating to derivative instruments is calculated using the

commitment approach. The global exposure of each sub-fund is calculated as the sum of:

(a) the absolute value of the exposure of each individual financial derivative not

involved in netting or hedging arrangements;

(b) the absolute value of the net exposure of each individual financial derivative

after netting or hedging arrangements; and

(c) the sum of the values of cash collateral received pursuant to:

(i) the reduction of exposure to counterparties of OTC financial derivatives;

and

(ii) efficient portfolio management techniques relating to securities lending

and repurchase transactions, and that are reinvested.

17

d) Amount and percentage of total fund size invested in other unit trusts, mutual funds

and collective investment schemes as at 31 December 2013.

$ 1,593,577 (11.97%)

e) Amount and percentage of borrowings of total fund size as at 31 December 2013.

Nil

f) Amount of redemptions and subscriptions for the period 1 January 2013 to 31

December 2013.

Class A SGD Class I SGD

S$ S$

Total amount of redemptions 35,840 -

Total amount of subscriptions 89,557 86,768

g) Related party transactions

Brokerage paid to related parties of the Manager S$819

Brokerage paid to related parties of the Trustee S$31

Interest income received from related parties of the Manager S$28

Interest income received from related parties of the Trustee S$171

Cash and bank balances held with

related parties of the trustee S$1,012,851

Amounts held with related parties of the Manager S$160,791

h) Performance of the Fund

Note: * Cumulative returns are in Singapore dollars calculated on a bid to bid basis, with net dividends reinvested.

Source: Bloomberg

Benchmark: 30% Citigroup World Government Bond Index (SGD Unhedged) + 40%

Citigroup World Money Index SGD 3 Mth Euro Deposit (SGD) + 30% MSCI World

Free Index (SGD) with effect from 27 February 2005

3

months

6

months

1

year

3

years* 5 years*

10

years*

Inception*

(on 16 Apr 2001)

Class A SGD 0.78% 2.24% 3.37% 7.32% 28.35% 9.01% 20.44%

Benchmark 2.31% 4.89% 7.71% 9.15% 16.13% 16.71% 30.52%

3

months 6 months 1 year

Inception*

(on 28 Sep 2012)

Class I SGD 0.83% 2.36% 3.58% 6.00%

Benchmark 2.31% 4.89% 7.71% 7.70%

18

i) Expense Ratio

31 December 2013 31 December 2012

Class A

SGD

Class I SGD

Class A

SGD

Class I

SGD

% % % %

Without performance fee 1.72 1.51 2.16 2.06

With performance fee 1.72 1.51 2.16 2.06

The expense ratio is computed in accordance with IMAS’ guidelines. The expenses

used in the calculation of the expense ratio do not include brokerage and other

transaction costs, performance fee (where applicable), foreign exchange gains or

losses, front or back end loads arising from the purchase or sale of other schemes and tax deducted at source or arising out of income received.

j) Turnover Ratio 31 December 2013 31 December 2012

124.30% 200.87%

The portfolio turnover ratio is calculated in accordance with the formula stated in the

Code on Collective Investment Schemes. The calculation of the portfolio turnover

ratio was based on the total value of purchases (or sales) of the underlying investments

divided by the weighted average daily net asset value. The total value of bonds matured during the year is not included in the computation of portfolio turnover ratio.

k) Any material information that will adversely impact the valuation of the scheme such

as contingent liabilities of open contracts.

Nil

l) For schemes which invest more than 30% of their deposited property in another

scheme, the following key information on the second-mentioned scheme (‘the underlying scheme”) should be disclosed as well.

(i) Top 10 holdings at market value and as percentage of NAV as at 31 December

2013 and 31 December 2012.

Not applicable.

(ii) Expense ratios for the period 31 December 2013 and 31 December 2012.

Not applicable.

(iii) Turnover ratios for the period 31 December 2013 and 31 December 2012

Not applicable.

19

m) Soft dollar arrangements

The Manager shall be entitled to and intends to receive or enter into soft-dollar

commissions or arrangements. The Manager will comply with applicable regulatory

and industry standards on soft-dollars. The soft-dollar commissions which the

Manager may receive include research and advisory services, economic and political

analyses, portfolio analyses including valuation and performance measurements,

market analyses, data and quotation services, computer hardware and software or any

other information facilities to the extent that they are used to support the investment

decision making process, the giving of advice, or the conduct of research or analysis

and custodial services in relation to the investments managed for clients. The soft

dollar credits utilised are not allocated on a specific client basis. The brokers also execute trades for other funds managed by the Manager.

The Manager will not accept or enter into soft dollar commissions/arrangements

unless such soft-dollar commissions/arrangements would, in the opinion of the

Manager, assist the Manager in its management of clients’ funds, provided that the

Manager shall ensure at all times that transactions are executed on the best available

terms taking into account the relevant market at the time for transactions of the kind

and size concerned, and that no unnecessary trades are entered into in order to qualify for such soft-dollar commissions/ arrangements.

The Manager does not, and is not entitled to retain cash rebates for its own account in

respect of rebates earned when transacting in securities for account of clients’ funds.

During the year, soft dollar services received from each broker were investment

research and publications, data and quotation services. Soft dollars were received from

the Manager’s panel of brokers which executed transactions for the fund and other

funds managed by the Manager.


Report of the Trustee

Year ended 31 December 2013

20

Report of the Trustee

The Trustee is under a duty to take into custody and hold the assets of Phillip Investment Funds

in trust for the unitholders. In accordance with the Securities and Futures Act (Chapter 289), its

subsidiary legislation and the Code on Collective Investment Schemes, the Trustee shall

monitor the activities of the Manager for compliance with the limitations imposed on the

investment and borrowing powers as set out in the Trust Deed in each annual accounting period

and report thereon to unitholders in an annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed Phillip

Investment Funds during the period covered by these financial statements, set out on pages FS1

to FS34, in accordance with the limitations imposed on the investment and borrowing powers

set out in the Trust Deed.

For and on behalf of the Trustee

Citicorp Trustee (Singapore) Limited

────────────────────

Director

27 March 2014


Statement by the Manager


21

Statement by the Manager

In the opinion of the directors of Phillip Capital Management (S) Ltd, the accompanying

financial statements set out on pages FS1 to FS34, comprising the Statements of Total Return,

Statements of Financial Position, Statements of Movements of Unitholders’ Funds, Statements

of Portfolio and Notes to the Financial Statements are drawn up so as to present fairly, in all

material respects, the financial position of Phillip Investment Funds as at 31 December 2013,

and the total return and movements in unitholders’ funds for the year then ended in accordance

with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting

Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants

(formerly known as the Institute of Certified Public Accountants of Singapore). At the date of

this statement, there are reasonable grounds to believe that Phillip Investment Funds will be able

to meet its financial obligations as and when they materialise.

For and on behalf of Directors of

Phillip Capital Management (S) Ltd

────────────────────

Linus Lim Wen Sheong

Director

27 March 2014

22

KPMG LLP

16 Raffles Quay #22-00

Hong Leong Building

Singapore 048581

Telephone +65 6213 3388

Fax +65 6225 0984

Internet www.kpmg.com.sg

KPMG LLP (Registration No. T08LL1267L) an accounting limited liability partnership registered in Singapore under the Limited Liability Partnership Act (Chapter 163A) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Independent auditors’ report

Auditors’ Report to the Unitholders of


(Constituted under a Trust Deed in the Republic of Singapore)

We have audited the financial statements of Phillip Investment Funds (the “Fund”), which

comprise the Statements of Financial Position and Statements of Portfolio as at 31 December

2013, the Statements of Total Return and Statements of Movements of Unitholders’ Funds for

the year then ended, and a summary of significant accounting policies and other explanatory

information, as set out on pages FS1 to FS34.

Manager’s responsibility for the financial statements

The Fund’s Manager (the “Manager”) is responsible for the preparation and fair presentation of

these financial statements in accordance with the recommendations of Statement of

Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the

Institute of Singapore Chartered Accountants (formerly known as the Institute of Certified

Public Accountants of Singapore), and for such internal control as the Manager determines is

necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with Singapore Standards on Auditing. Those standards

require that we comply with ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the Fund’s preparation and fair presentation of the

financial statements 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. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of accounting estimates made by the Manager, as well as

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.


Independent auditors’ report


23

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Fund as at 31 December 2013 and the total return and movement in unitholders’

funds for the year then ended in accordance with the recommendations of Statement of

Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the

Institute of Singapore Chartered Accountants (formerly known as the Institute of Certified

Public Accountants of Singapore).

KPMG LLP

Public Accountants and

Chartered Accountants

Singapore

27 March 2014


Financial statements


FS1

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

Statements of Total Return


Note

Phillip Money

Market Fund

Phillip Income

Fund

2013 2012 2013 2012

S$ S$ S$ S$

Income

Dividends – – 228,057 113,542

Interest 9,320,415 10,608,330 266,117 291,147

9,320,415 10,608,330 494,174 404,689

Less:

Expenses

Management fees 3,981,186 3,849,800 108,414 156,872

Management fees rebate – (124,735) – –

Trustee fees 177,440 179,232 4,545 6,700

Custody fees 53,139 64,778 13,178 15,438

Audit fees 10,268 11,037 10,373 10,673

Transaction costs – – 28,710 13,542

Other expenses 186,036 90,167 69,204 58,192

4,408,069 4,070,279 234,424 261,417

Net income 4,912,346 6,538,051 259,750 143,272

Net gains or losses on

value of investments

and financial

derivatives

Net (losses)/gains on

investments (445,470) (898,544) 499,927 971,462

Net (losses)/ gains on

financial derivatives – – (51,673) 22,642

Net losses on foreign

exchange – – (158,197) (342,795)

(445,470) (898,544) 290,057 651,309

Total return for the year

before income tax 4,466,876 5,639,507 549,807 794,581

Less: Income tax 7 – – (62,693) (6,902)

Total return for the year

after income tax before

distribution 4,466,876 5,639,507 487,114 787,679




FS2


Statements of Financial Position

As at 31 December 2013

Phillip Money

Market Fund

Phillip Income

Fund

Note 2013 2012 2013 2012

S$ S$ S$ S$

Assets

Portfolio of investments 341,936,746 299,400,596 12,722,344 12,755,294

Receivables 3 1,003,685 1,286,582 10,781 2,225

Cash and bank balances 4 443,913,511 558,033,122 1,173,642 544,636

Total assets 786,853,942 858,720,300 13,906,767 13,302,155

Liabilities

Payables 5 1,096,297 1,419,419 65,081 66,777

Purchases awaiting

settlement – – 531,817 –

Total liabilities 1,096,297 1,419,419 596,898 66,777

Equity

Net assets attributable to

unitholders 6 785,757,645 857,300,881 13,309,869 13,235,378




FS3


Statements of Movements of Unitholders’ Funds


Phillip Money

Market Fund

2013 2012

S$ S$

Net assets attributable to unitholders at the

beginning of financial year 857,300,881 792,968,189

Operations

Changes in net assets attributable to unitholders

resulting from operations 4,466,876 5,639,507

Unitholders’ contributions/(withdrawals)

Creation of units 2,852,473,846 2,239,205,495

Cancellation of units (2,928,483,958) (2,180,512,310)

Change in net assets attributable to unitholders

resulting from net creation and cancellation of units (76,010,112) 58,693,185

Distribution – –

Total (decrease)/increase in net assets attributable

to unitholders (71,543,236) 64,332,692

Net assets attributable to unitholders at end of

the financial year 785,757,645 857,300,881




FS4


Phillip Income Fund

2013 2012

Note Class A Class I Class I Total Class A Class I Class I Total

SGD SGD USD SGD SGD USD

S$ S$ S$ S$ S$ S$ S$ S$ S$

Net assets attributable to unitholders at

the beginning of financial year 1,368,980 11,866,398 – 13,235,378 – – – 10,692,132 10,692,132

Operations

Changes in net assets attributable to unitholders resulting from operations 48,578 438,536

–

487,114 35,314 233,026 – 519,339 787,679

Unitholders’ contributions/

(withdrawals)

Creation of units 89,557 86,768 – 176,325 3,059,389 11,633,372 – 2,057,935 16,750,696

Cancellation of units (35,840) - – (35,840) (1,725,723) – – (12,994,923) (14,720,646)

Change in net assets attributable to

unitholders resulting from net creation

and cancellation of units 53,717 86,768

–

140,485 1,333,666 11,633,372 – (10,936,988) 2,030,050

Distribution 8 (58,667) (494,441) – (553,108) – – – (274,483) (274,483)

Total increase/(decrease) in net assets attributable to unitholders 43,628 30,863

–

74,491 1,368,980 11,866,398 – (10,692,132) 2,543,246

Net assets attributable to unitholders at

end of the financial year 1,412,608 11,897,261 – 13,309,869 1,368,980 11,866,398 – – 13,235,378




FS5


Statements of Portfolio


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013


By Industry (Primary)

Quoted securities

Airline leasing

Fixed Rate Bonds

Singapore Airlines 2.15%

Due 30 September 2015 250,000 254,278 0.03

Total Airline leasing 254,278 0.03

Banks & financials

Certificates of Deposit

Agriculture Bank of China 1.38%

Due 19 December 2014 19,000,000 19,000,000 2.42

Bank of China 1.15%

Due 06 August 2014 15,000,000 14,993,055 1.91

Bank of China 0.9%

Due 28 March 2014 28,000,000 28,006,328 3.56

Intesa San Paolo London 1.25%

Due 05 December 2014 6,000,000 6,049,730 0.77

Intesa San Paolo London 1.13%

Due 06 March 2014 6,000,000 5,999,986 0.76

74,049,099 9.42

Fixed Rate Bonds

ANZ New Zealand INTL 2.95 %

Due 27 July 2015 2,250,000 2,309,226 0.29

Bank of East Asia 0.7%

Due 21 March 2014 10,000,000 9,995,000 1.27

Commonwealth Bank of Australia 2.875%

Due 28 January 2015 1,500,000 1,517,211 0.19

Kookmin Bank 0.78%

Due 22 May 2014 3,250,000 3,249,610 0.41

Kookmin Bank 0.85%

Due 31 July 2014 9,000,000 8,998,200 1.15

Lloyds TSB Bank 3.5%

Due 17 September 2014 19,750,000 20,104,512 2.56

Maybank Kim Eng 1.35%

Due 28 January 2014 20,000,000 20,000,440 2.55

Carried forward 66,174,199 8.42




FS6


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at 31/12/2013 31/12/2013 31/12/2013

S$ %



Banks & financials

Fixed Rate Bonds

Brought forward 66,174,199 8.42

Rabobank 2.45%

Due 13 January 2015 2,750,000 2,797,011 0.36

Royal Bank of Scotland 2.85%

Due 31 March 2014 14,000,000 14,058,002 1.79

Shinhan Bank 2.4%

Due 27 October 2014 2,500,000 2,512,235 0.32

Westpac Securities NZ LT 3.06%

Due 12 February 2015 750,000 765,788 0.10

86,307,235 10.99

Floating Rate Bonds

Royal Bank of Scotland 0%

Due 31 March 2014 250,000 248,146 0.03

248,146 0.03

Total Banks & financials 160,604,480 20.44

Engineering & construction

Fixed Rate Bonds

SembCorp Finance 5%

Due 21 April 2014 500,000 505,916 0.06

Total Engineering & construction 505,916 0.06

Government agency

Fixed Rate Bonds

Export Import Bank of Korea 0.6%

Due 19 February 2014 5,000,000 4,998,905 0.64

Export Import Bank of Korea 1%

Due 29 August 2014 6,000,000 6,000,060 0.76

Housing & Development Board 1.87%

Due 25 March 2015 2,000,000 2,025,200 0.26





FS7


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at 31/12/2013 31/12/2013 31/12/2013 S$ %



Government agency

Fixed Rate Bonds


Housing & Development Board 1.005%

Due 01 August 2014 12,750,000 12,756,502 1.62

Industrial Bank of Korea 0.65%

Due 14 February 2014 8,000,000 7,998,872 1.02

Korea Development Bank 0.9%

Due 25 April 2014 6,000,000 6,002,346 0.76


Due 19 May 2014 500,000 509,054 0.07


Due 16 June 2014 6,000,000 6,025,476 0.77


Due 06 July 2014 6,000,000 6,027,414 0.77

Land Transport Authority 1.675%

Due 27 May 2015 500,000 505,675 0.07

Total Government agency 52,849,504 6.74

Hotel & property

Fixed Rate Bonds

Ascendas 5.15%

Due 29 April 2014 1,750,000 1,769,392 0.23

Ascott Capital 5.15%

Due 28 May 2014 2,750,000 2,788,228 0.35

CapitaLand Treasury 3.8%

30 October 2014 1,750,000 1,781,267 0.23

CapitaMalls Asia Treasury 2.15%

Due 21 January 2014 11,000,000 11,000,044 1.40

City Development 3.88%

Due 08 October 2014 1,000,000 1,016,191 0.13

City Development 3.22%

Due 08 April 2015 250,000 254,476 0.03

Hong Kong Land Treasury Service 3.65%

Due 05 October 2015 4,000,000 4,179,388 0.53

Keppel Land Ltd 3.51%

Due 03 February 2015 750,000 760,946 0.10





FS8


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013

S$ %



Hotel & property

Fixed Rate Bonds


Street Square 3.02%

Due 05 May 2014 25,250,000 25,340,648 3.22

United Overseas Land 2.5%

Due 01 July 2014 11,500,000 11,557,155 1.47

United Overseas Land 2.493%

Due 08 May 2015 500,000 505,249 0.06

Wing Tai Holdings 3.3%

Due 26 May 2015 750,000 764,462 0.10

Total Hotel & property 61,717,446 7.85

Industrials

Fixed Rate Bonds

General Electric Capital 3.93%

Due 07 May 2014 500,000 504,776 0.06

ST Treasury Services 3.98%

Due 02 April 2014 7,250,000 7,305,948 0.93

Total Industrials 7,810,724 0.99

Investment companies

Fixed Rate Bonds

Savu Investments 3.83%

Due 17 January 2014 22,000,000 22,011,880 2.80

Total Investment companies 22,011,880 2.80

Media

Fixed Rate Bonds

Singapore Press Holdings 2.81%

Due 02 March 2015 16,000,000 16,332,160 2.08

Total Media 16,332,160 2.08




FS9


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013

S$ %



REITS

Fixed Rate Bonds

CMT MTN Pte Ltd 2.85%

Due 01 September 2014 500,000 505,824 0.07

Total REITS 505,824 0.07

Supranational

Fixed Rate Bonds

International Bank for Reconstruction &

Development 1.43%

Due 05 March 2014 1,600,000 1,601,248 0.20

Total Supranational 1,601,248 0.20

Transportation & logistics

Fixed Rate Bonds

SMRT Capital Pte Ltd 2.42%

Due 07 October 2014 13,000,000 13,179,972 1.68

Total Transportation & logistics 13,179,972 1.68

Utilities

Fixed Rate Bonds

SP Powerassets 3.385%

Due 27 April 2015 2,250,000 2,327,828 0.30

Total Utilities 2,327,828 0.30








FS10


Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2012

S$ % %



Airline leasing 254,278 0.03 1.29

Banks & financials 160,604,480 20.44 11.90

Engineering & construction 505,916 0.06 0.06

Food & beverage 3.94

Government agency 52,849,504 6.74 3.64

Hotel and property 61,717,446 7.85 8.01

Industrials 7,810,724 0.99 1.96

Investment companies 22,011,880 2.80

Media 16,332,160 2.08

REITS 505,824 0.07 0.98

Supranational 1,601,248 0.20 0.19

Transportation & logistics 13,179,972 1.68 2.67

Utilities 2,327,828 0.30 0.01

Accrued interest on debt securities 2,235,486 0.28 0.27

Portfolio of investments 341,936,746 43.52 34.92

Other net assets 443,820,899 56.48 65.08

Net assets attributable to unitholders 785,757,645 100.00 100.00


By Geography (Secondary)

Australia 1,517,211 0.19 0.70

China / Hong Kong 71,994,383 9.16 3.42

Italy 12,049,716 1.53 –

Netherlands 2,797,011 0.36 –

New Zealand 3,075,015 0.39 –

Singapore 159,429,067 20.29 20.63

South Korea 52,322,173 6.67 7.93

Supranational 1,601,248 0.20 0.19

United Kingdom 34,410,660 4.39 1.02

United States 504,776 0.06 0.76

Accrued interest on debt securities 2,235,486 0.28 0.27


Other net assets 443,820,899 56.48 65.08





FS11


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013

S$ %

Phillip Income Fund


Quoted securities

Airline leasing

Equities

Singapore Airlines Ltd NPV 19,000 197,410 1.48

Total Airline leasing 197,410 1.48

Apparel

Fixed Rate Bonds

Texhong Textile 6.5%

Due 18 January 2019 200,000 257,977 1.94

Total Apparel 257,977 1.94

Automotive

Equities

Bridgestone Corporation NPV 4,600 220,266 1.65

Toyota Motor Corp NPV 2,300 177,598 1.33

Total Automotive 397,864 2.98

Banks & financials

Equities

Bank of China Ltd 328,000 191,101 1.44

Bank Rayat Indonesia Persek 244,000 182,668 1.37

Bursa Malaysia Bhd 66,000 208,059 1.56

Fubon Financial Holding Co 56,000 103,647 0.78

HSBC Holdings Plc Ord 13,118 180,153 1.35

Intercontinental Exchange Group Inc * – – –

Mizuho Financial Group Inc 53,800 147,116 1.11

Singapore Exchange Ltd 30,000 217,800 1.64

1,230,544 9.25

* less than 0.01 / 0.01%




FS12


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013

S$ %

Phillip Income Fund


Banks & financials

Fixed Rate Bonds

Bank Rayat Indonesia 2.95%

Due 28 March 2018 200,000 236,726 1.78

Filinvest Development Cayman Island 4.25%

Due 02 April 2020 200,000 231,209 1.74

Hyundai Capital 4.5%

Due 16 May 2017 300,000 336,173 2.53

804,108 6.05

Floating Rate Notes

Royal Bank Scotland 0%

Due 27 October 2014 200,000 223,741 1.68

Unicredit SPA 0%

Due 30 July 2023 250,000 232,155 1.74

455,896 3.42

Total Banks & Financials 2,490,548 18.72

Chemicals

Equities

PTT Global Chemical Plc 48,000 145,831 1.10

Total Chemicals 145,831 1.10

Distribution & wholesale

Equities

Mitsubishi Corp Ord 8,200 199,040 1.50

Total Distribution & wholesale 199,040 1.50

Engineering & construction

Equities

YTL Corporation Bhd 140,000 87,511 0.66

Total Engineering & construction 87,511 0.66




FS13


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013

S$ %

Phillip Income Fund


Exchange traded fund

Equities Fund

iShare Euro STOXX 50 UCITS 3,000 163,381 1.23

Total Exchange traded fund 163,381 1.23

Food & beverage

Equities

Del Monte Pacific Ltd 236,000 142,780 1.07

Pepsi Cola Products Phillipines 1,147,000 142,542 1.07

San Miguel Pure Foods Co 20,000 133,509 1.00

Thai Beverage Pcl 212,000 114,480 0.86

Thai Union Frozen Product 19,600 53,876 0.40

587,187 4.40

Fixed Rate Bonds

China Mengnui 3.5%

Due 27 November 2018 200,000 251,594 1.89

Fonterra 1.1%

Due 27 June 2014 1,000,000 206,695 1.55

458,289 3.44

Total Food & beverage 1,045,476 7.84

Healthcare

Fixed Rate Bonds

Biosensors Investments 4.875%

Due 23 January 2017 250,000 251,175 1.89

Total Healthcare 251,175 1.89

Home builders

Equities

Daiwa House Industry Co Ltd NPV 10,000 244,780 1.84

Total Home builders 244,780 1.84




FS14


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013

S$ %

Phillip Income Fund


Hotel & property

Fixed Rate Bonds

Hong Fok Corp 4.75%

Due 22 March 2019 250,000 244,654 1.84

Hotel Properties Ltd 3.5%

Due 15 January 2018 250,000 248,594 1.87

Lai Sun Finance 5.7%

Due 18 January 2018 200,000 244,632 1.84

Total Hotel & property 737,880 5.55

Materials

Fixed Rate Bonds

China Shanshui 10.5%

Due 27 April 2017 200,000 275,399 2.07

Total Materials 275,399 2.07

Mining

Fixed Rate Bonds

BHP Billiton Finance Ltd 3.75%

Due 18 October 2017 200,000 223,386 1.68

Total Mining 223,386 1.68

Oil & gas

Equities

Total SA 3,200 248,464 1.87

Total Oil & gas 248,464 1.87

Pharmaceuticals

Equities

Merck & Co. Inc 3,300 209,042 1.57

209,042 1.57




FS15


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013

S$ %

Phillip Income Fund


Pharmaceuticals

Fixed Rate Bonds

Eu Yan Sang 3%

Due 29 November 2016 200,000 199,300 1.50

199,300 1.50

Total Pharmaceuticals 408,342 3.07

REITS

REITS

AIMS AMP Capital Industrial 112,000 160,160 1.20

Ascendas Real Estate Investment Trust 63,000 138,600 1.04

Capitalcommercial Trust 131,000 189,295 1.42

GLP J-REIT 160 197,944 1.49

Keppel REIT 150,000 177,000 1.33

National Retail Properties 3,000 115,101 0.86

Nippon Prologis REIT 18 217,266 1.63

Nomura Real Estate Master Fund 180 234,830 1.76

Total REITS 1,430,196 10.73

Retail

Fixed Rate Bonds

Courta 4.75%

Due 02 May 2016 250,000 257,031 1.93

I.T Ltd 6.25%

Due 15 May 2018 1,000,000 177,378 1.33

Total Retail 434,409 3.26

Semiconductors

Equities

Novatek Microelectronics Corp 18,000 93,221 0.70

Samsung Electronics Co Ltd 138 226,844 1.70

Taiwan Semiconductor Manufacturing 33,000 147,091 1.11

Total Semiconductors 467,156 3.51




FS16


Holdings

as at

Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2013

S$ %

Phillip Income Fund


Shipbuilding

Fixed Rate Bonds

Nam Cheong Ltd 6%

Due 05 November 2015 250,000 258,612 1.94

Total Shipbuilding 258,612 1.94

Telecommunications

Equities

Axiata Group Bhd 68,000 181,042 1.36

China Mobile Ltd 13,000 170,258 1.28

Cisco Systems Inc 8,000 227,165 1.71

Philippine Long Distance Telephone 2,500 189,973 1.43

SK Telecom 838 230,589 1.73

Telekomunikasi Indonesia Persek 730,000 163,193 1.23

Telstra Corporation Ltd 42,000 248,315 1.87

Vodafone Group Plc 55,000 272,720 2.05

Total Telecommunications 1,683,255 12.66

Transporation

Equities

Comfort Delgro Corporation Ltd 103,000 206,000 1.55

Hutchinson Port Holdings 118,000 100,043 0.75

Singapore Post Ltd 153,000 202,725 1.52

508,768 3.82

Fixed Rate Bonds

Keppel Telecom & Transport 2.625%

Due 13 August 2019 250,000 254,435 1.91

Neptune Orient Lines 4.65%

Due 09 September 2020 250,000 250,926 1.89

505,361 3.80

Total Transportation 1,014,129 7.62








FS17


Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2012

S$ % %

Phillip Income Fund


Airline leasing 197,410 1.48 -

Apparel 257,977 1.94 -

Automotive 397,864 2.98 -

Banks & financials 2,490,548 18.72 29.25

Chemicals 145,831 1.10 1.92

Commercial services - - 1.56

Distribution & wholesale 199,040 1.50 -

Engineering & construction 87,511 0.66 -

Electronics - - 1.83

Exploration & production - - 1.94

Exchange traded fund 163,381 1.23 -

Food & beverage 1,045,476 7.84 3.40

Government agency - - 7.77

Healthcare 251,175 1.89 –

Home builders 244,780 1.84

Hotel and property 737,880 5.55 –

Internet - - 1.90

Logistics - - 3.79

Machinery - - 1.86

Materials 275,399 2.07 1.91

Media - - 1.49

Mining 223,386 1.68 -

Oil & gas 248,464 1.87 -

Pharmaceuticals 408,342 3.07 2.73

Real estate - - 12.47

REITS 1,430,196 10.73 7.43

Retail 434,409 3.26 1.83

Semiconductors 467,156 3.51 -

Shipbuilding 258,612 1.94 1.89

Telecommunications 1,683,255 12.66 6.64

Transportation 1,014,129 7.62

Utilities - - 4.05

Accrued interest on debt securities 60,123 0.45 0.71


Other net assets 587,525 4.41 3.63





FS18


Fair value

as at

Percentage of

total net assets

attributable to

unitholders

as at

Percentage of

total net assets

attributable to

unitholders

as at

31/12/2013 31/12/2013 31/12/2012

S$ % %

Phillip Income Fund

By Geography (Secondary)

Australia 471,701 3.54 6.91

Bermuda 435,990 3.29 5.67

British Virgin Islands 244,632 1.84 3.72

Cayman Islands 1,016,179 7.63 7.57

China / Hong Kong 361,359 2.71 7.45

France 248,464 1.87 –

Indonesia 582,588 4.38 4.76

Italy 232,155 1.74 –

Japan 1,638,841 12.31 –

Malaysia 476,612 3.58 3.78

Netherlands – – 3.88

New Zealand 206,695 1.55 1.43

Philippines 608,804 4.58 3.66

Singapore 3,295,147 24.76 27.28

South Korea 793,606 5.96 2.99

Taiwan 343,958 2.58 –

Thailand 314,187 2.36 1.92

Turkey – – 7.68

United Kingdom 839,995 6.32 4.56

United States 551,308 4.14 2.40

Accrued interest on debt securities 60,123 0.45 0.71


Other net assets 587,525 4.41 3.63





FS19

Notes to the Financial Statements

These notes form an integral part of the financial statements.

1 Domicile and activities

Phillip Investment Funds (the “Fund") is an open ended umbrella unit trust constituted pursuant

to a Trust Deed dated 26 February 2001 together with its Amending and Restating Deeds and its

Supplemental Deed thereon (thereafter referred to as the “Trust Deed”) between Phillip Capital

Management (S) Ltd (the “Manager") and Citicorp Trustee (Singapore) Limited (the “Trustee").

The Trust Deed is governed by and construed in accordance with the laws of the Republic of

Singapore.

The Fund offers a series of sub-funds (the “Sub-Funds”); these were first offered for sale in

Singapore on the following launch dates:

Sub-Fund Launch date

Phillip Money Market Fund 1 March 2001

Phillip Income Fund 1 March 2001


The investment objective of the Phillip Money Market Fund is to aim to preserve principal

value and maintain a high degree of liquidity while producing returns comparable to that of

Singapore dollar savings deposits. The Sub-Fund invests primarily in short term, high quality

money market instruments and debt securities. Such investments may include government and

corporate bonds, commercial bills and deposits with financial institutions. The Money Market

Funds Investment Guidelines in Appendix 2 of the Code on Collective Investment Schemes

apply to this Sub-Fund. The Phillip Money Market Fund is relatively low risk and its objective

is targeted at achieving absolute returns. There is no benchmark for the Phillip Money Market

Fund as the Sub-Fund maintains an orientation towards positive rather than relative returns

against a benchmark.

Phillip Income Fund

The investment objective of the Phillip Income Fund is to aim to achieve medium to long term

capital appreciation through investing substantially all of the assets in a diversified portfolio of

high quality bonds, high yield stocks and other interest bearing securities across various sectors

and regions. The Sub-Fund intends to offer regular dividends through semi-annual

distributions. However such distribution is not guaranteed and is subject to all times to the

discretion of the Manager.

Benchmark: 30% Citigroup World Government Bond Index (SGD Unhedged) + 40% Citigroup

World Money Market Index SGD 3 month Euro Deposit (SGD) + 30% MSCI World Free Index

(SGD) with effect from 27 February 2005.




FS20

2 Summary of significant accounting policies

2.1 Basis of financial statements preparation

The financial statements, expressed in Singapore dollars, have been prepared under the

historical cost basis, as modified by the revaluation of investments, and in accordance with the

Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts”

issued by the Institute of Singapore Chartered Accountants (formerly known as the Institute of

Certified Public Accountants of Singapore).

For the purposes of preparation of these financial statements, the basis used for calculating the

expense ratio and turnover ratio are in accordance with the guidelines issued by the Investment

Management Association of Singapore and the Code on Collective Investment Schemes under

the Securities and Futures Act (Cap 289) respectively.

2.2 Basis of valuation of investments

Quoted investments are stated at fair value based on the bid prices at the reporting date.

Unrealised gains/losses on investments are represented by the difference between the fair value

and the carrying value of investments and are recognised in the Statement of Total Return.

Realised gains and losses upon disposal of investments are computed on the basis of the

difference between the carrying value and the selling price of investments on trade date and are

taken to the Statement of Total Return.

Unquoted investments are stated at their fair values estimated by the Manager based on

information available at the reporting date including estimates provided by market-makers.

2.3 Financial derivatives

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in

the Statement of Total Return when incurred. Subsequent to initial recognition, derivatives are

measured at fair value, and changes in fair value therein are recognised in the Statement of Total

Return.

2.4 Recognition of income

Interest income is recognised using the effective interest method.

Dividend income is recognised when declared and is stated gross of tax credits.

2.5 Foreign currency translation

Transactions in foreign currencies are translated at the exchange rate at the date of transaction.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are

translated at exchange rates at the reporting date. All exchange differences are recognised in the

Statement of Total Return.




FS21

2.6 Income tax expense

The Fund was approved for the Enhanced-Tier Fund Tax Incentive Scheme under Section 13X

of the Income Tax Act by the Monetary Authority of Singapore (MAS) with effect from 12

December 2011. The tax exemption status will be for the life of the Fund, provided the Fund

continues to meet all the terms and conditions set out by MAS and the relevant Income Tax

legislations.

2.7 Cash and cash equivalents

Cash and cash equivalents comprise term deposits, cash and bank balances and amounts held

with brokers. Cash equivalents are short-term highly liquid investments that are readily

convertible to known amounts of cash and are subject to an insignificant risk of changes in

value.

2.8 Net assets attributable to unitholders

Net assets attributable to unitholders are classified as equity.

3 Receivables

Phillip Money

Market Fund

Phillip Income

Fund

2013 2012 2013 2012

S$ S$ S$ S$

Receivable from unitholders for

creation of units 78,502 88,629 10,369

Dividends receivable 2,225

Accrued interest receivable 903,358 1,106,058

Other receivable 21,825 91,895 412

1,003,685 1,286,582 10,781 2,225




FS22

4 Cash and bank balances

Phillip Money

Market Fund

Phillip Income

Fund

2013 2012 2013 2012

S$ S$ S$ S$

Term deposits 427,670,503 426,164,432

Cash and bank balances 16,243,008 131,868,690 1,012,851 163,038

Amounts held with brokers 160,791 381,598

443,913,511 558,033,122 1,173,642 544,636

5 Payables

Phillip Money

Market Fund

Phillip Income

Fund

2013 2012 2013 2012

S$ S$ S$ S$

Payable to unitholders for cancellation of units 335,975 354,382

Accrued expenses 760,322 1,065,037 65,081 66,777

1,096,297 1,419,419 65,081 66,777

6 Units in issue

During the year the number of shares issued, redeemed and outstanding were as follows:


2013 2012

Units at beginning of the year 744,006,950 692,831,131

Units created 2,469,050,471 1,948,233,917

Units cancelled (2,534,581,327) (1,897,058,098)

Units at end of the year 678,476,094 744,006,950

Net assets attributable to unitholders – S$ 785,757,645 857,300,881

Net asset value per unit – S$ 1.1581 1.1523




FS23

Phillip Income Fund

2013

Class A SGD Class I SGD Class I USD Total

Units at beginning

of the year 1,266,095 10,968,051 12,234,146

Units created 81,803 79,837 161,640

Units cancelled (32,458) (32,458)

Units at end of the

year 1,315,440 11,047,888 12,363,328

Net assets

attributable to

unitholders – S$ 1,412,608 11,897,261 13,309,869

Net asset value per

unit – S$ 1.0738 1.0769

2012

Class A SGD Class I SGD Class I USD Total

Units at beginning of

the year 10,337,352 10,337,352

Units created 1,923,085 2,886,451 10,968,051 15,777,587

Units cancelled (12,260,437) (1,620,356) (13,880,793)

Units at end of the

year 1,266,095 10,968,051 12,234,146

Net assets

attributable to

unitholders – S$ 1,368,980 11,866,398 13,235,378

Net asset value per

unit – S$ 1.0813 1.0819

On 28 September 2012, the Manager redesignated existing units of Phillip Income Fund to

Class A SGD Units and created 2 new Class I Units namely Class I SGD Units and Class I USD

Units. Class A SGD Units are offered to investors who invest SGD500 and above. Class I SGD

Units are offered to investors who invest SGD500,000 and above. Class I USD Units are offered

to investors who invest USD500,000 and above. All classes constitute the Sub-Fund and are not

separate sub-funds. Any expense, income and/or gain which is attributable to a particular class

shall be deducted from or added to (as the case may be) the value of the sub-fund which is

attributable to that class. A separate net asset value per unit will be calculated for each class.

For subscriptions and redemptions and for various fee calculations, investments are stated at the

last traded price/amortised cost on the valuation day for the purpose of determining net asset

value per unit while for reporting purpose the investments are valued at the relevant bid market

prices as at the reporting date.




FS24

The effect of bid market prices/amortised cost in the net assets attributable to unitholders is as

follows:


2013 2012

S$ S$

Net assets attributable to unitholders per financial statements 785,757,645 857,300,881

Effect of adopting amortised cost (64,126) 384,717

Net assets attributable to unitholders for issuing/redeeming 785,693,519 857,685,598

Phillip Income Fund

2013

Class A

SGD

Class I

SGD

Class I

USD Total

S$ S$ S$ S$

Net assets attributable to unitholders per

financial statements 1,412,608 11,897,261 13,309,869

Effect of adopting bid prices at fair value 3,838 32,322 36,160

Net assets attributable to unitholders for

issuing/redeeming 1,416,446 11,929,583 13,346,029

2012

Class A

SGD

Class I

SGD

Class I

USD Total

S$ S$ S$ S$

Net assets attributable to unitholders per financial statements 1,368,980 11,866,398 13,235,378

Effect of adopting bid prices at fair value 4,023 34,874 38,897

Net assets attributable to unitholders for

issuing/redeeming 1,373,003 11,901,272 13,274,275




FS25

7 Income tax

Phillip Money

Market Fund

Phillip Income

Fund

2013 2012 2013 2012

S$ S$ S$ S$

Singapore income tax – – 7,162 604

Overseas income tax – – 55,531 6,298

Total income tax – – 62,693 6,902

The income tax charge relates to tax deducted at source and withholding tax suffered on

dividend income and interest income.

8 Distribution

The following distribution was announced and paid by the Fund:

Phillip Income Fund

Entitlement cut

off date

Distribution

amount

S$

2013

Distribution at 2.25 cents per unit 8 March 2013 276,055

Distribution at 2.25 cents per unit 13 September 2013 277,053

553,108

2012

Distribution at 2.25 cents per unit 10 September 2012 274,483

The Manager has not proposed any distribution for Phillip Money Market Fund.

9 Financial risk management

The Sub-Funds’ activities expose them to a variety of financial risks (including price risk,

interest rate risk and currency risk), liquidity risk and credit risk. The Sub-Funds’ overall risk

management programme seeks to minimise potential adverse effects on the Sub-Funds’

financial performance. The Sub-Funds may use futures contracts, options contracts and/or

currency forward contracts subject to the terms of the Trust Deed to moderate certain risk

exposures. Specific guidelines on exposures to individual securities and certain industries are in

place for the Sub-Funds at any time as part of the overall financial risk management to reduce

the Sub-Funds’ risk exposures.




FS26

a) Market risk

Market risk is the risk of potential adverse change to the value of financial instruments because

of changes in market conditions such as interest rate movements and volatility in securities’

prices. The Manager manages each Sub-Fund’s exposure to market risk through the use of risk

management strategies and various analytical monitoring techniques.

i. Price risk

Price risk is the risk that the fair values of equities or future cash flows of a financial

instrument will fluctuate because of changes in market prices (other than those arising from

interest rate risk or currency risk).

The investments of the Fund are subject to normal market fluctuations and the risks inherent

in investing in securities markets and there can be no assurance that appreciation will occur.

It is the policy of the Manager to maintain a diversified portfolio of investments so as to

minimise the risk.

ii. Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to

changes in market interest rates.

The table below summarises the Fund’s exposure to interest rate risks. They include the

Fund’s assets and trading liabilities at fair value, categorised by interest rate types.


Variable

rates

Fixed

rates

Non-interest

bearing Total

S$ S$ S$ S$

2013

Assets

Portfolio of investments 249,311 341,687,435 341,936,746

Receivables 1,003,685 1,003,685

Cash and bank balances 427,936,792 15,976,719 443,913,511

249,311 769,624,227 16,980,404 786,853,942

Liabilities

Payables 1,096,297 1,096,297

1,096,297 1,096,297




FS27

Variable

rates Fixed rates

Non-interest

bearing Total

S$ S$ S$ S$

2012

Assets

Portfolio of investments 299,400,596 299,400,596

Receivables 1,286,582 1,286,582

Cash and bank balances 526,731,641 31,301,481 558,033,122

826,132,237 32,588,063 858,720,300

Liabilities

Payables 1,419,419 1,149,419

1,419,419 1,419,419

Phillip Income Fund

Variable

rates Fixed rates

Non-interest

bearing Total

S$ S$ S$ S$

2013

Assets

Portfolio of investments 463,076 4,458,838 7,800,430 12,722,344

Receivables 10,781 10,781

Cash and bank balances 160,792 1,012,850 1,173,642

463,076 4,619,630 8,824,061 13,906,767

Liabilities

Payables 65,081 65,081

Purchases awaiting

settlement 531,817 531,817

596,898 596,898

2012

Assets

Portfolio of investments 637,843 10,286,627 1,830,824 12,755,294

Receivables 2,225 2,225

Cash and bank balances 381,598 163,038 544,636

637,843 10,668,225 1,996,087 13,302,155




FS28

Variable

rates Fixed rates

Non-interest

bearing Total

S$ S$ S$ S$

Liabilities

Payables 66,777 66,777

66,777 66,777

The duration, a measure of the sensitivity of the price of a fixed income security to a change

in interest for the 12 month period is as disclosed below. As of 31 December 2013, should

interest rates rise or lower by 1% with all other variables remaining constant, the

increase/decrease in net assets attributable to unitholders would be as follows:

Interest rates rise/lower by 1%

Increase/Decrease in net assets

attributable to unitholders

2013 2012

S$ S$

Phillip Money Market Fund 1,647,707 1,588,228

Phillip Income Fund 152,351 519,195

iii. Currency risk

The Sub-Funds are denominated in Singapore dollars. The Sub-Funds invest in underlying

securities which are denominated in foreign currencies where fluctuations in the relevant

exchange rates may have an impact on the income and value of the Sub-Funds. The

Manager may seek to minimise exposure to foreign currency fluctuation to the extent

practicable.

As at 31 December 2013 and 2012, the concentration of the Sub-Funds’ investments are set

out in the Portfolio Statements.

Investments denominated in currencies other than the Sub-Funds’ functional currency

comprise the following:

Phillip Income Fund

2013 2012

S$ S$

Australian Dollar 1,031,615 1,040,884

Chinese Yuan 384,073 385,561

Euro 248,464 Great British Pound 436,101 164,867

Hong Kong Dollar 541,512 Indonesian Rupiah 345,862 124,614

Japanese Yen 1,638,841




FS29

2013 2012 S$ S$

Korean Won 457,433 Malaysian Ringgit 476,612 Philippine Peso 466,024 483,699

Thai Baht 199,707 Taiwan Dollar 343,958 US Dollar 2,148,888 6,079,419

Cash and cash equivalents denominated in currencies other than the Sub-Funds’ functional

currency comprise the following:

Phillip Income Fund

2013 2012

S$ S$

Chinese Yuan 7,732 1,083

Hong Kong Dollar 95,156 216,688

Indonesian Rupee 145,639 Japanese Yen 35,778

Philippine Peso 479 675

Swiss Franc Taiwan Dollar 57,530 Thai Baht 46

US Dollar 327,849 80,539

Investments and cash and cash equivalents of Phillip Money Market Fund are denominated

in the Sub-Fund’s functional currency.

Investments are exposed to both currency risk and price risk. Hence, no sensitivity analysis

has been performed to analyse currency risk.

As at 31 December 2013 and 2012, with respect to the cash and cash equivalents of the Sub-

Fund, had the Singapore Dollar increased/(decreased) by 2% against foreign currencies,

with all other variables remaining constant, the increase or decrease in net assets attributable

to unitholders would be as follows:




FS30

Currency rate rise/lower by 2%

Increase/(Decrease) in net assets

attributable to unitholders

2013 2012

S$ S$

Phillip Income Fund

Chinese Yuan (155) (22)

Hong Kong Dollar (1,903) (4,334)

Indonesian Rupee (2,913) (716)

Philippine Peso (10) (14)

Taiwan Dollar (1,151) (1)

US Dollar (6,557) (1,611)

b) Liquidity risk

The Sub-Funds are exposed to daily redemption of units in the Sub-Funds. Therefore the

majority of its assets are invested in investments that are traded in an active market and can be

readily disposed of.

c) Credit risk

Credit risk is the risk that a counterparty will fail to its perform contractual obligations, either in

whole or in part, under a contract.

The main credit risk to which the Sub-Funds are exposed arise from the Sub-Funds’ investments

in debt securities. The Sub-Funds are also exposed to counterparty credit risk on trading

derivative products, cash and cash equivalents, amounts due from brokers and other receivable

balances.

The Sub-Funds invest mostly in financial assets which have an investment grade as rated by

international credit rating agencies.

All transactions in listed securities are settled/paid upon delivery using approved brokers. The

risk of default is considered minimal, as delivery of securities is only made once the broker has

received payment. Payment is made on a purchase once the securities have been received by the

broker. The trade will fail if either party fails to meet its obligation.

The Sub-Funds may also enter into derivatives to manage exposures to currency risk and price

risk, including foreign exchange forward contracts and options. Hence, the Sub-Funds are also

exposed to the risk that derivatives held with counterparties may not be recoverable in the event

of any default by the parties concerned.




FS31

The table below analyses the Sub-Funds’ debt investments by credit ratings.


Debt securities by rating category 2013 2012

% %

A 8.60 3.41

AA 0.92 2.68

AA * 2.37 1.17

AAA * 0.20

A ** 7.25

Aa** 0.10 2.39

Aaa ** 0.19

Unrated 31.33 17.83

Total debt securities 43.52 34.92


* Credit rating is from Fitch

** Credit rating is from Moody’s

Phillip Income Fund

Debt securities by rating category 2013 2012

% %

A 5.14 3.26

BB 5.89 1.86

BBB 4.33 5.73

A ** 9.31

Aa ** 8.67

Ba ** 9.31

Baa ** 24.88

Unrated 21.62 19.51

Total debt securities 36.98 82.53


** Credit rating is from Moody’s

d) Derivatives risk

The Manager may use financial derivative instruments solely for the purposes of hedging

existing positions in a portfolio or for efficient portfolio management, and such financial

derivative instruments are not used to gear the overall portfolio.

e) Fair value estimation

At 31 December 2013 and 2012, the fair values of assets and liabilities approximate their

carrying values on the Statement of Financial Position.




FS32

The fair value of financial assets and liabilities traded in active markets (such as publicly traded

derivatives and trading securities) are based on quoted market prices at the close of trading on

the reporting date. The quoted market price used for financial assets held by the Fund is the

current bid price; the appropriate quoted market price for financial liabilities is the current

asking price. When the Fund holds derivatives with offsetting market risks, it uses mid-market

prices as a basis for establishing fair values for the offsetting risk positions and applies this bid

or asking price to the net open position, as appropriate.

The Fund classifies fair value measurements using a fair value hierarchy that reflects the

significance of the inputs used in making the measurements. The fair value hierarchy has the

following levels:

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

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

2).

Inputs for the asset or liability that are not based on observable market data (that is,

unobservable inputs) (Level 3).

The following table analyses within the fair value hierarchy the Fund’s financial assets and

liabilities (by class) measured at fair value at 31 December 2013 and 2012:


Level 1 Level 2 Level 3 Total

S$ S$ S$ S$

2013

Assets

Debt securities 341,936,746 – – 341,936,746

341,936,746 – – 341,936,746

2012

Assets

Debt securities 299,400,596 – – 299,400,596

299,400,596 – – 299,400,596

Phillip Income Fund


S$ S$ S$ S$

2013

Assets

Equity securities and

investment funds 7,800,431 – – 7,800,431

Debt securities 4,921,913 – – 4,921,913

12,722,344 – – 12,722,344




FS33


S$ S$ S$ S$

2012

Assets

Equity securities and

investment funds 1,830,824 – – 1,830,824

Debt securities 10,924,470 – – 10,924,470

12,755,294 – – 12,755,294

Investments whose values are based on quoted market prices in active markets, and therefore

classified within level 1, include active listed equities. The Fund does not adjust the quoted

price for these instruments.

Financial instruments that trade in markets that are not considered to be active but are valued

based on quoted market prices, dealer quotations or alternative pricing sources supported by

observable inputs are classified within level 2.

Investments classified within level 3 have significant unobservable inputs, as they trade

infrequently.

10 Related parties

In the normal course of the business of the Sub-Funds, management fees and trustee fees have

been paid or are payable to the Manager and the Trustee respectively as noted in the Statements

of Total Return.

In addition, the bank holding company and related parties of the Trustee have also provided

custodian, banking, foreign exchange, fund administration and brokerage services to the Sub-

Funds in the normal course of business at terms agreed between the parties and within the

provisions of the Trust Deed.

Except as disclosed elsewhere in the financial statements, the following significant transactions

took place between the Fund and its related parties during the year:

Phillip Money

Market Fund

Phillip Income

Fund

2013 2012 2013 2012

S$ S$ S$ S$

Brokerage fee paid to:

- related parties of the Manager 819 4,731

- related parties of the Trustee 31

Interest income received from:

- related parties of the Manager 28 27

- related parties of the Trustee 171 2,201

Cash and bank balances held with

related parties of the Trustee 15,976,719 31,301,481 1,012,851 163,038

Amounts held with related parties

of the Manager 160,791 381,597




FS34

The Manager may also use the services of related parties to carry out transactions involving the

purchase and sale of securities.

11 Financial ratios

Phillip Money

Market Fund

Phillip Income Fund

2013 2012 2013 2012

Class A

SGD

Class I

SGD

Class I

USD

Class A

SGD

Class I

SGD

Class I

USD

% % % % % % % %

Expense ratios (Note 1) 0.50 0.48 1.72 1.51 2.16 2.06

Phillip Money

Market Fund

Phillip Income

Fund

2013 2012 2013 2012

% % % %

Turnover ratios (Note 2) 28.24 1.88 124.30 200.87

Note 1 The expense ratio has been computed based on the guidelines laid down by the Investment

Management Association of Singapore ("IMAS"). The calculation of the expense ratio as at 31

December 2013 was based on total operating expenses divided by the average net asset value

for the year. The total operating expenses do not include (where applicable) brokerage and

other transaction costs, performance fees, interest expenses, distributions paid out to

unitholders, foreign exchange gains/losses, front or back end loads arising from the purchase or

sale of other funds and tax deducted at source or arising out of income received. The Sub-

Funds do not pay performance fee. The average net asset value is based on the daily balances.

Note 2 The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on

Collective Investment Schemes. The calculation of the portfolio turnover ratio was based on

the total value of purchases (or sales) of the underlying investments divided by the weighted

average daily net asset value. The total value of bonds matured during the year is not included

in the computation of portfolio turnover ratio.

Phillip Money

Market Fund Phillip Income Fund

2013 2012 2013 2012

Class A SGD Class I SGD Total Class A SGD Class I SGD Total

S$ S$ S$ S$ S$ S$ S$ S$

Total operating

expenses (as per note 1) 4,406,915 4,068,635 24,491 180,953 205,444 54,529 193,345 247,874

Total value of purchases (or

sales) of the underlying

investments 250,675,822 15,921,642 – – 16,699,774 – – 23,903,918

Average net

asset value 887,562,189 847,632,330 1,423,761 12,010,840 13,434,601 2,518,996 9,399,786 11,900,202

Documents

Annual Report - internetfileserver.phillip.com.sginternetfileserver.phillip.com.sg/Poems/UnitTrust/Reports/534_AR... · Annual Report For the year ended ... Statements of Portfolio