Semi-Annual Report for AmIncome Plus · of 2.17x and 1.73x respectively, with continued support from real money investors onshore. Markets were relatively quiet with thinner liquidity

Semi-Annual Report for

AmIncome Plus30 April 2020

AmIncome Plus

TRUST DIRECTORY

Manager AmFunds Management Berhad

9th & 10th Floor, Bangunan AmBank Group 55 Jalan Raja Chulan 50200 Kuala Lumpur

Board of Directors Jeyaratnam A/L Tamotharam Pillai

Dato’ Mustafa Bin Mohd Nor Tai Terk Lin

Sum Leng Kuang Goh Wee Peng

Investment Committee Sum Leng Kuang

Tai Terk Lin Dato’ Mustafa Bin Mohd Nor

Zainal Abidin Bin Mohd Kassim Goh Wee Peng

Trustee AmanahRaya Trustees Berhad

Auditors and Reporting Accountants Ernst & Young PLT

Taxation Adviser Deloitte Tax Services Sdn Bhd

AmIncome Plus

CONTENTS

1 Manager’s Report

7 Condensed Statement of Financial Position

8 Condensed Statement of Comprehensive Income

9 Condensed Statement of Changes in Equity

10 Condensed Statement of Cash Flows

11 Notes to the Condensed Financial Statements

35 Statement by the Manager

36 Trustee’s Report

37 Directory

1

MANAGER’S REPORT Dear Unitholders, We are pleased to present you the Manager’s report and the unaudited accounts of AmIncome Plus (“Fund”) for the financial period from 1 November 2019 to 30 April 2020. Salient Information of the Fund

Name

AmIncome Plus (“Fund”)

Category/ Type

Fixed Income / Income

Objective The Fund is a short to medium-term fixed income fund which aims to provide you with enhanced returns. Note: Any material change to the investment objective of the Fund would require Unit Holders’ approval.

Duration AmIncome Plus was established on 26 November 2001 and shall exist for as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue. In some circumstances, the unitholders can resolve at a meeting to terminate the Fund.

Performance Benchmark

Malayan Banking Berhad 1-Month Fixed Deposit Rate (“MBB”) (obtainable from www.aminvest.com / www.maybank2u.com.my) Note: The benchmark does not imply that the risk profile of the Fund is the same as the risk profile of the benchmark. Investors of the Fund will assume a higher risk compared to the benchmark. Hence, the returns of the Fund may be potentially higher due to the higher risk faced by the investors.

Income Distribution Policy

Income distribution (if any) is paid at least twice every year.

Breakdown of Unit Holdings by Size

For the financial period under review, the size of the Fund stood at 814,835,874 units.

Size of holding As at 30 April 2020 As at 31 October 2019

No of units held

Number of unitholders

No of units held

Number of unitholders

5,000 and below 2,980 1 2,904 1

5,001-10,000 17,097 2 7,498 1

10,001-50,000 65,756 2 89,490 4

50,001-500,000 1,195,805 5 1,623,548 6

500,001 and above 813,554,236 15 781,834,871 13

2

Fund Performance Data

Portfolio Composition

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

As at 30.4.2020

%

FY 2019

%

FY 2018

%

FY 2017

%

Corporate bonds 87.26 77.75 83.31 78.89

Government Securities - 1.92 - 0.41

Money market deposit 5.59 5.68 4.70 19.13

Cash, other assets & liabilities 7.15 14.65 11.99 1.57

Total 100.00 100.00 100.00 100.00

Note: The abovementioned percentages are calculated based on total net asset value.

Performance Details

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

Half year ended

30.4.2020

FY

2019

FY

2018

FY

2017

Net asset value (RM)* 549,228,945 530,266,207 531,623,462 495,103,231

Units in circulation* 814,835,874 783,558,311 783,953,256 720,576,045

Net asset value per unit (RM)*

0.6740

0.6767

0.6781

0.6871

Highest net asset value per unit (RM)*

0.6914

0.6941

0.6990

0.7116

Lowest net asset value per unit (RM)*

0.6719

0.6754

0.6781

0.6865

Benchmark performance (%)

1.31

3.02

3.12

2.95

Total return (%)(1) 2.20 5.03 3.84 3.29

- Capital growth (%) -0.39 -0.13 -1.25 -2.05

- Income distribution (%) 2.59 5.16 5.09 5.34

Gross distribution (sen per unit)

1.75

3.50

3.50

3.75

Net distribution (sen per unit)

1.75

3.50

3.50

3.75

Management expense ratio (%)(2)

0.82

0.82

0.85

0.87

Portfolio turnover ratio (times)(3)

0.26

0.44

0.40

0.23

* Above prices and net asset value per unit are shown as ex-distribution. Note: (1) Total return is the actual/annualised return of the Fund for the respective financial

period/years computed based on the net asset value per unit and net of all fees. (2) Management expense ratio (“MER”) is calculated based on the total fees and

expenses incurred by the Fund divided by the average fund size calculated on a daily basis.

(Forward)

3

(3) Portfolio turnover ratio (“PTR”) is calculated based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis. The PTR decreased by 0.18 times (40.9%) as compared to 0.44 times for the financial year ended 31 October 2019 mainly due to decrease in investing activities.

Average Total Return (as at 30 April 2020)

AmIncome Plus(a) %

MBB(b) %

One year 4.92 2.78

Three years 4.33 2.98

Five years 3.98 3.01

Ten years 3.59 2.99

Annual Total Return

Financial Years Ended (31 October)

AmIncome Plus(a) %

MBB(b) %

2019 5.03 3.02

2018 3.84 3.12

2017 3.29 2.95

2016 4.10 3.09

2015 3.20 3.15

(a) Source: Novagni Analytics and Advisory Sdn Bhd. (b) Malayan Banking Berhad 1-month fixed deposit rate (“MBB”)

(obtainable from www.aminvest.com / www.maybank2u.com.my) The Fund performance is calculated based on the net asset value per unit of the Fund. Average total return of the Fund and its benchmark for a period is computed based on the absolute return for that period annualised over one year. Note: Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up.

Fund Performance

For the financial period under review, the Fund registered a return of 2.20% comprising of negative 0.39% capital growth and 2.59% income distribution. Thus, the Fund’s return of 2.20% has outperformed the benchmark’s return of 1.31% by 0.89%. As compared with the financial year ended 31 October 2019, the net asset value (“NAV”) per unit of the Fund decreased by 0.40% from RM0.6767 to RM0.6740, while units in circulation increased by 3.99% from 783,558,311 units to 814,835,874 units. The line chart below shows comparison between the annual performances of AmIncome Plus and its benchmark, MBB, for each of the financial years ended 31 October. (Forward)

4

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

Strategies and Policies Employed

The Fund seeks to achieve its objective by investing primarily in short to medium-term fixed income instruments with the following minimum credit rating of short-term credit rating of P2 by RAM or long-term credit rating of A3 by RAM or its equivalent as rated by a local or global rating agency.

Portfolio Structure

The table below shows the asset allocation of the Fund for the financial period/year under review.

As at 30.4.2020

%

As at 31.10.2019

%

Changes

%

Corporate bonds 87.26 77.75 9.51

Government Securities - 1.92 -1.92

Money market deposit 5.59 5.68 -0.09

Cash, other assets & liabilities 7.15 14.65 -7.50

Total 100.00 100.00

For the financial period under review, the Fund has 87.26% of its NAV invested in corporate bonds, 5.59% in money market deposit while the remaining was in cash, other assets & liabilities.

Cross Trades

There were no cross trades undertaken during the financial period under review.

Distribution/ Unit Splits

During the financial period under review, the Fund declared income distributions, detailed as follows:

Date of distribution

Distribution per unit (sen)

NAV per unit Cum-Distribution

(RM)

NAV per unit Ex-Distribution

(RM)

21-Apr-20 1.75 0.6894 0.6719

There was no unit split declared for the financial period under review.

5

State of Affairs

There has been neither significant changes to the state of affairs of the Fund nor any circumstances that materially affect any interests of the unitholders during the financial period under review.

Rebates and Soft Commission

Soft commissions received from brokers/dealers are retained by the Manager only if the goods and services provided are in the form of research services that assist in the decision-making process relating to the Fund’s investments. During the financial period under review, the Manager had received on behalf of the Fund, soft commissions as allowed under regulatory requirements to carry out investment management functions for the Fund. These soft commissions received by the Manager are deemed to be beneficial to the unitholders of the Fund.

Market Review

In a move that was widely anticipated by the market, Bank Negara Malaysia (BNM) slashed the Overnight Policy Rate (OPR) by 50bps to the historical low of 2.00% at its 5 May meeting. This 3rd OPR cut in-a-row, bringing total OPR reduction year-to-date to a whopping 100bps. The policy action was a response to the gloomy economic growth outlook, which BNM had projected to be in the range of -2.0% to 0.5% for 2020 (latest MoF forecast is -3.0% to -4.0% for 2020 Gross Domestic Product (GDP)). The OPR last reached the low of 2.00% in the aftermath of the 2008-09 Global Financial Crisis (GFC). Along with the rate cuts, BNM had injected a total of MYR42b into the financial markets through a combination of outright government security purchases, reverse repos and Statutory Reserve Requirement (SRR) reduction (100bps cut to 2.00% effective 20 March 2020). Following the central bank’s May meeting, a further MYR16b was injected into the capital markets with banking institutions permitted to use Malaysia Government Securities (MGS) and Government Investment Issues (GIIs) holdings to meet statutory reserve requirements effective 16 May 2020 until 31 May 2021.

The MGS market responded to the policy move positively with MGS/GII yields closing 4-12bps lower following the OPR announcement. In the trading sessions that ensued, we saw some profit taking activities which pushed the MGS yields 4-10bps higher in the middle of the month, before the auction results, along with less-than-impressive economic data releases, re-ignited buying enthusiasm in the front end and belly of the curve. The 15-year GII and 10-year MGS auctions garnered bid-to-cover (BTC) ratio of 2.17x and 1.73x respectively, with continued support from real money investors onshore. Markets were relatively quiet with thinner liquidity towards the end of the month given Hari Raya festive season, and the MGS market ended the month with a steeper curve as the 3-10 year segment of the curve was 4-15bps lower MoM while the long end was 5-12bps higher.

The 1Q2020 GDP print of +0.7% YoY was an upside surprise (consensus: -0.1%; 4Q2019: +3.6%), but the bulk of the impact of Movement Control Order (MCO)-driven business disruption will only be reflected in the 2Q2020 GDP data. The April 2020 Consumer Price Index (CPI) saw sharp deflation of -2.9% YoY mainly resulting from record low fuel prices while core inflation remained unchanged at +1.30%. Headline Foreign Exchange (FX) reserves sustained at USD102.6b as at 15 May (30 April: USD102.5b); while the Malaysian Ringgit (MYR) closed the month weaker at 4.35 (end-April: 4.30).

In the corporate bonds space, Danum Capital’s (Khazanah’s funding vehicle) MYR2.0b issuance and DanaInfra Nasional’s MYR2.8b issuance dominated the total primary volume of MYR7.1b for the month. Credit spreads ended the month with tightening of 2-7bps in the 3 to 10-year segment of the yield curve while the longer end tightened by 5-15bps. Amidst thinner market trading during the Raya festive season, we continue to see good demand for higher-rated names and defensive credits in the secondary market.

6

Market Outlook

Bond market sentiments should remain positive due to BNM policy remaining dovish as growth risks are tilted to the downside in 2020 and into 1H2021 which would likely require further OPR cuts in 2020. The quantum of further cuts in OPR rate would depend on:

a) factors surrounding the COVID-19 pandemic as well as; and b) any restart of United States (US)-China and/or US-European Union (EU)

trade-tensions. Market liquidity remains ample and demand for fixed income instruments is expected to remain strong despite any concerns on MGS/GII supply. As we expect continued BNM easing to stimulate the economy, we will still maintain our overweight duration to express the expectations of further rate cuts and the fact that interest rates will remain low for the foreseeable future.

Additional Information

The following information has been updated: 1. Seohan Soo resigned as a Non-Independent, Non-Executive Director for

AmFunds Management Berhad with effect from 1st January 2020.

Kuala Lumpur, Malaysia AmFunds Management Berhad 17 June 2020

AmIncome Plus

CONDENSED STATEMENT OF FINANCIAL POSITION

AS AT 30 APRIL 2020

30.4.2020 31.10.2019

(unaudited) (audited)

Note RM RM

ASSETS

Investments 4 479,256,262 422,450,274

Amount due from Manager 5(a) 4,386,572 26,606,984

Deposits with financial institutions 6 30,708,822 30,132,904

Cash at banks 35,672,888 52,116,159

TOTAL ASSETS 550,024,544 531,306,321

LIABILITIES

Amount due to Manager 5(b) 748,818 993,281

Amount due to Trustee 7 31,133 27,468

Sundry payables and accrued expenses 15,648 19,365

TOTAL LIABILITIES 795,599 1,040,114

EQUITY

Unitholders’ capital 9(a) 453,351,733 431,647,468

Retained earnings 9(b)(c) 95,877,212 98,618,739

TOTAL EQUITY 9 549,228,945 530,266,207

TOTAL EQUITY AND LIABILITIES 550,024,544 531,306,321

UNITS IN CIRCULATION 9 814,835,874 783,558,311

NET ASSET VALUE (“NAV”) PER UNIT 67.40 sen 67.67 sen

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

7

AmIncome Plus

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2019 TO 30 APRIL 2020

1.11.2019 to 1.11.2018 to

30.4.2020 30.4.2019

Note RM RM

INVESTMENT INCOME

Interest income 11,565,234 11,950,032

Net income from investments:

− Financial assets at fair value through profit or

loss (“FVTPL”) 8 2,066,973 2,039,208

13,632,207 13,989,240

EXPENDITURE

Manager’s fee 5 (2,048,903) (1,952,713)

Trustee’s fee 7 (191,231) (182,253)

Auditors’ remuneration (4,226) (4,215)Tax agent’s fee (2,040) (2,033)

Custodian’s fee (80) (265)

Other expenses (890) (1,754)

(2,247,370) (2,143,233)

Net income before tax 11,384,837 11,846,007

Less: Income tax 11 - -

Net income after tax 11,384,837 11,846,007

Other comprehensive income - -

Total comprehensive income for thefinancial period 11,384,837 11,846,007

Total comprehensive income comprises the following:

Realised income 10,559,498 9,825,158

Unrealised gain 825,339 2,020,84911,384,837 11,846,007

Distribution for the financial period

Net distribution 12 14,126,364 12,671,951

Gross/net distribution per unit (sen) 12 1.75 1.75


8

AmIncome Plus

CONDENSED STATEMENT OF CHANGES IN EQUITY (Unaudited)


Unitholders’ Retained Total

capital earnings equity

Note RM RM RM

At 1 November 2018 433,163,368 98,460,094 531,623,462

Total comprehensive income

for the financial period - 11,846,007 11,846,007

Creation of units 467,294,209 - 467,294,209

Reinvestments of distributions 12,671,951 - 12,671,951

Cancellation of units (512,141,396) - (512,141,396)

Distributions 12 - (12,671,951) (12,671,951)

Balance at 30 April 2019 400,988,132 97,634,150 498,622,282

At 1 November 2019 431,647,468 98,618,739 530,266,207

Total comprehensive income

for the financial period - 11,384,837 11,384,837

Creation of units 9(a) 372,296,094 - 372,296,094

Reinvestments of distributions 9(a) 14,126,364 - 14,126,364

Cancellation of units 9(a) (364,718,193) - (364,718,193)

Distributions 12 - (14,126,364) (14,126,364)

Balance at 30 April 2020 453,351,733 95,877,212 549,228,945


9

AmIncome Plus

CONDENSED STATEMENT OF CASH FLOWS (Unaudited)


1.11.2019 to 1.11.2018 to

30.4.2020 30.4.2019

RM RM

CASH FLOWS FROM OPERATING AND

INVESTING ACTIVITIES

Proceeds from maturity/sale of investments 114,090,275 30,330,720

Interest received 11,429,726 12,858,201

Manager’s fee paid (2,041,964) (1,965,140)

Trustee’s fee paid (187,566) (186,611)

Tax agent’s fee paid - (4,100)

Custodian’s fee paid (80) (265)

Payments for other expenses (10,873) (10,512)

Purchase of investments (169,269,700) (52,469,400)

Net cash used in operating and investing activities (45,990,182) (11,447,107)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from creation of units 394,516,506 465,587,033

Payments for cancellation of units (364,969,595) (512,655,021)

Net cash generated from/(used in) financing activities 29,546,911 (47,067,988)

NET DECREASE IN CASH AND

CASH EQUIVALENTS (16,443,271) (58,515,095)

CASH AND CASH EQUIVALENTS AT

BEGINNING OF FINANCIAL PERIOD 52,116,159 95,055,984

CASH AND CASH EQUIVALENTS AT

END OF FINANCIAL PERIOD 35,672,888 36,540,889

Cash and cash equivalents comprise:

Cash at banks 35,672,888 36,540,889


10

AmIncome Plus

NOTES TO THE CONDENSED FINANCIAL STATEMENTSFOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2019 TO 30 APRIL 2020

1. GENERAL INFORMATION

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Standards effective during the financial period

Standards issued but not yet effective

AmIncome Plus (“the Fund”) was established pursuant to a Deed dated 30 October 2001 as

amended by Deeds Supplemental thereto (“the Deed”), between AmFunds Management

Berhad as the Manager, AmanahRaya Trustees Berhad as the Trustee and all unitholders.

The Fund which is a short to medium-term fixed income fund which aims to provide investors

with enhanced returns. As provided in the Deed, the “accrual period” or financial year shall end

on 31 October and the units in the Fund were first offered for sale on 26 November 2001.

Subsequently, the Fund was re-launched on 17 June 2004.

The financial statements were authorised for issue by the Chief Executive Officer of the

Manager on 17 June 2020.

The financial statements of the Fund have been prepared on a historical cost basis, except as

otherwise stated in the accounting policies and comply with Malaysian Financial Reporting

Standards 134: Interim Financial Reporting (“MFRS 134”) as issued by the Malaysian

Accounting Standards Board (“MASB”) and Securities Commission Malaysia’s Guidelines on

Unit Trust Funds in Malaysia.

The adoption of MFRS which have been effective during the financial period did not have any

material financial impact to the financial statements.

The Fund will adopt the following MFRSs and Amendments to MFRSs when they become

effective in the respective financial periods and these MFRSs and Amendments to MFRSs are

not expected to have any material impact to the financial statements of the Fund upon initial

application.

11

AmIncome Plus


2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS (CONT’D.)

Standards issued but not yet effective (cont’d.)

Effective for

financial periods

beginning on or after

Revised Conceptual Framework for Financial Reporting 1 January 2020

Amendments to MFRS 3 - Definition of a Business 1 January 2020

Amendments to MFRS 101 and MFRS 108 - Definition of Material 1 January 2020

Amendments to MFRS 7, MFRS 9 and MFRS 139 - 1 January 2020

Interest Rate Benchmark Reform

MFRS 17 Insurance Contracts 1 January 2021

Amendments to MFRS 10 and MFRS 128: Sale or Contribution Deferred

of Assets between an Investor and its Associate or Joint Venture

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Income recognition

(i) Interest income

(ii) Gain or loss on disposal of investments

Once the recorded value of a financial asset or a group of similar financial assets has

been reduced due to an impairment loss, profit income continues to be recognised

using the rate of profit used to discount the future cash flows for the purpose of

measuring the impairment loss.

On disposal of investments, the net realised gain or loss on disposal is measured as

the difference between the net disposal proceeds and the carrying amount of the

investments. The net realised gain or loss is recognised in profit or loss.

Income is recognised to the extent that it is probable that the economic benefits will flow to

the Fund and the income can be reliably measured. Income is measured at the fair value

of consideration received or receivable.

For all interest-bearing financial assets, interest income is calculated using the

effective interest method. Effective interest rate is the rate that exactly discounts

estimated future cash payments or receipts through the expected life of the financial

instrument or a shorter period, where appropriate, to the net carrying amount of the

financial asset. The calculation takes into account all contractual terms of the

financial instrument and includes any fees or incremental costs that are directly

attributable to the instrument and are an integral part of the effective interest rate, but

not future credit losses.

12

AmIncome Plus


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

3.2 Income tax

3.3 Functional and presentation currency

3.4 Statement of cash flows

The Fund adopts the direct method in the preparation of the statement of cash flows.

3.5 Distribution

3.6 Unitholders’ capital

Current taxes are recognised in profit or loss except to the extent that the tax relates to

items recognised outside profit or loss, either in other comprehensive income or directly in

equity.

Functional currency is the currency of the primary economic environment in which the

Fund operates that most faithfully represents the economic effects of the underlying

transactions. The functional currency of the Fund is Ringgit Malaysia (“RM”) which reflects

the currency in which the Fund competes for funds, issues and redeems units. The Fund

has also adopted RM as its presentation currency.

Current tax assets and liabilities are measured at the amount expected to be recovered

from or paid to the tax authorities. The tax rates and tax laws used to compute the amount

are those that are enacted or substantively enacted at the reporting date.

Cash equivalents are short-term, highly liquid investments that are readily convertible to

cash with insignificant risk of changes in value.

Distributions are at the discretion of the Fund. A distribution to the Fund’s unitholders is

accounted for as a deduction from realised income. A proposed distribution is recognised

as a liability in the period in which it is approved. Distribution is either reinvested or paid in

cash to the unitholders on the income payment date. Reinvestment of units is based on

the NAV per unit on the income payment date, which is also the time of creation.

The unitholders’ capital of the Fund meets the definition of puttable instruments and is

classified as equity instruments under MFRS 132 Financial Instruments: Presentation

(“MFRS 132”).

13

AmIncome Plus



3.7 Financial assets – initial recognition and measurement

(i) Initial recognition

(ii) Initial measurement

(iii) “Day 1” profit or loss

3.8 Financial assets – classification and subsequent measurement

Business model

Financial assets and financial liabilities are recognised when the Fund becomes a

party to the contractual provisions of the instrument. Regular way purchases and

sales of financial assets are recognised using trade date accounting or settlement

date accounting. The method used is applied consistently for all purchases and

sales of financial assets that belong to the same category of financial assets.

The business model reflects how the Fund manages the financial assets in order to

generate cash flows. That is, whether the Fund’s objective is solely to collect the

contractual cash flows from the assets, or is to collect both the contractual cash flows and

cash flows arising from the sale of assets. If neither of these is applicable (e.g. the

financial assets are held for trading purposes), then the financial assets are classified as

part of “other” business model. Factors considered by the Fund in determining the

business model for a portfolio of assets include past experience on how the cash flows for

these assets were collected, how the asset’s performance is evaluated and reported to

key management personnel, and how risks are assessed and managed.

All financial assets are recognised initially at fair value, in the case of financial assets

not recorded at FVTPL, transaction costs that are attributable to the acquisition of the

financial asset. All financial liabilities are recognised initially at fair value and, in the

case of financial liabilities not recorded at FVTPL, net of directly attributable

transaction costs.

At initial measurement, if the transaction price differs from the fair value, the Fund

immediately recognises the difference between the transaction price and fair value (a

“Day 1” profit or loss) in profit or loss provided that fair value is evidenced by a

quoted price in an active market for an identical asset or liability (i.e. Level 1 input) or

based on a valuation technique that uses only data from observable markets. In all

other cases, the difference between the transaction price and model value is

recognised in profit or loss on a systematic and rational basis that reflects the nature

of the instrument over its tenure.

The classification and subsequent measurement of debt instruments held by the Fund are

determined based on their business model and cash flow characteristics.

14

AmIncome Plus



3.8 Financial assets – classification and subsequent measurement (cont’d.)

Cash flow characteristics

3.9 Financial assets under MFRS 9

(i) Classification and measurement

The Fund may classify its financial assets under the following categories:

Financial assets at amortised cost

Where the business model is to hold the financial assets to collect contractual cash flows,

or to collect contractual cash flows and sell, the Fund assesses whether the financial

assets’ contractual cash flows represent solely payment of principal and interest (“SPPI”).

In making this assessment, the Fund considers whether the contractual cash flows are

consistent with a basic lending arrangement, i.e. interest includes only consideration for

time value of money, credit risk, other basic lending risks and a profit margin that is

consistent with a basic lending arrangement. Financial assets with embedded derivatives

are considered in their entirety when determining whether their cash flows are SPPI.

The classification of financial assets depends on the Fund’s business model of

managing the financial assets in order to generate cash flows (“business model test”)

and the contractual cash flow characteristics of the financial instruments (“SPPI

test”). The business model test determines whether cash flows will result from

collecting contractual cash flows, selling the financial assets, or both and the

assessment is performed on a portfolio basis. The SPPI test determines whether the

contractual cash flows are solely for payments of principal and interest and the

assessment is performed on a financial instrument basis.

A financial asset is measured at amortised cost if it is held within a business model

whose objective is to hold financial assets in order to collect contractual cash flows

and its contractual terms give rise on specified dates to cash flows that are solely

payments of principal and interest on the principal amount outstanding. The Fund

includes in this category deposits with financial institution, cash at banks, amounts

due from brokers/financial institutions, amount due from the Manager and other

receivables.

15

AmIncome Plus



3.9 Financial assets under MFRS 9 (cont’d.)

(i) Classification and measurement (cont’d.)

Financial assets at FVOCI

Financial assets at FVTPL

3.10 Financial liabilities – classification and subsequent measurement

Any financial assets that are not measured at amortised cost or FVOCI are

measured at FVTPL. Subsequent to initial recognition, financial assets at FVTPL are

measured at fair value. Changes in the fair value of those financial instruments are

recorded in “Net gain or loss on financial assets at FVTPL”. Interest earned element

of such instruments are recorded in “Interest income”.

A financial asset is measured at fair value through other comprehensive income

(“FVOCI”) if its business model is both to hold the asset to collect contractual cash

flows and to sell the financial asset. In addition, the contractual terms of the financial

assets give rise on specified dates to cash flows that are solely payments of principal

and interest on the outstanding principal.

These investments are initially recorded at fair value and transaction costs are

expensed in the profit or loss. Subsequent to initial recognition, these investments

are remeasured at fair value. All fair value adjustments are initially recognised

through OCI. Debt instruments at FVOCI are subject to impairment assessment.

Instruments that qualify for amortised cost or FVOCI may be irrevocably designated

as FVTPL, if doing so eliminates or significantly reduces a measurement or

recognition inconsistency. Equity instruments are normally measured at FVTPL,

nevertheless, the Fund is allowed to irrevocably designate equity instruments that are

not held for trading as FVOCI, with no subsequent reclassification of gains or losses

to profit or loss.

Financial liabilities issued by the Fund are classified as financial liabilities at amortised

cost, where the substance of the contractual arrangement results in the Fund having an

obligation either to deliver cash or another financial asset to the holder. After initial

measurement, financial liabilities are subsequently measured at amortised cost using the

effective interest method. Amortised cost is calculated by taking into account any discount

or premium on acquisition and fees or costs that are an integral part of the effective

interest rate.

16

AmIncome Plus



3.11 Derecognition of financial instruments

(i) Derecognition of financial asset

-

-

-

-

(ii) Derecognition of financial liability

3.12 Financial instruments – expected credit losses (“ECL”)

-

-

-

The Fund assesses on a forward-looking basis the ECL associated with its financial

assets at amortised cost. The Fund recognises a loss allowance for such losses at each

reporting date. The measurement of ECL reflects:

an unbiased and probability-weighted amount that is determined by evaluating a

range of possible outcomes;

the time value of money; and

The ECL in respect of financial assets at amortised cost, if any, is recognised in profit or

loss.

A financial asset (or, where applicable a part of a financial asset or part of a group of

similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired, or

the Fund has transferred its rights to receive cash flows from the asset or has

assumed an obligation to pay the received cash flows in full without material delay

to a third party under a “pass-through” arrangement; and either:

the Fund has transferred substantially all the risks and rewards of the asset, or

the Fund has neither transferred nor retained substantially all the risks and

rewards of the asset, but has transferred control of the asset.

Financial assets together with the associated allowance are written off when it has

exhausted all practical recovery efforts and there is no realistic prospect of future

recovery. The Fund may also write-off financial assets that are still subject to enforcement

activity when there is no reasonable expectation of full recovery. If a write-off is later

recovered, the recovery is credited to profit or loss.

A financial liability is derecognised when the obligation under the liability is

discharged, cancelled or expired. Gains and losses are recognised in profit or loss

when the liabilities are recognised, and through the amortisation process.

reasonable and supportable information that is available without undue cost or effort

at the reporting date about past events, current conditions and forecasts of future

economic conditions.

17

AmIncome Plus



3.13 Determination of fair value

3.14 Classification of realised and unrealised gains and losses

3.15 Significant accounting estimates and judgments

Realised gains and losses on disposals of financial instruments classified at FVTPL are

calculated using the weighted average method. They represent the difference between an

instrument’s initial carrying amount and disposal amount.

The preparation of the Fund’s financial statements requires the Manager to make

judgments, estimates and assumptions that affect the reported amounts of revenues,

expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting

date. However, uncertainty about these assumptions and estimates could result in

outcomes that could require a material adjustment to the carrying amount of the asset or

liability in the future.

The Fund classifies its investments as financial assets at FVTPL as the Fund may sell its

investments in the short-term for profit-taking or to meet unitholders’ cancellation of units.

No major judgments have been made by the Manager in applying the Fund’s accounting

policies. There are no key assumptions concerning the future and other key sources of

estimation uncertainty at the reporting date, that have a significant risk of causing a

material adjustment to the carrying amounts of assets and liabilities within the next

financial period.

Unrealised gains and losses comprise changes in the fair value of financial instruments

for the period and from reversal of prior period’s unrealised gains and losses for financial

instruments which were realised (i.e. sold, redeemed or matured) during the reporting

period.

For investments in fixed income securities, nominal value is the face value of the

securities and fair value is determined based on the indicative prices from Bond Pricing

Agency Malaysia Sdn Bhd plus accrued interest, which includes the accretion of discount

and amortisation of premium. Adjusted cost of investments relates to the purchase cost

plus accrued interest, adjusted for amortisation of premium and accretion of discount, if

any, calculated over the period for the date of acquisition to the date of maturity of the

respective securities as approved by the Manager and the Trustee. The difference

between adjusted cost and fair value is treated as unrealised gain or loss and is

recognised in profit or loss. Unrealised gains or losses recognised in profit or loss are not

distributable in nature.

18

AmIncome Plus


4. INVESTMENTS

30.4.2020 31.10.2019

RM RM

Financial assets at FVTPL

At nominal value:

Corporate bonds 463,250,000 397,900,000

Government Securities - 10,000,000

463,250,000 407,900,000

At fair value:

Corporate bonds 479,256,262 412,278,297

Government Securities - 10,171,977

479,256,262 422,450,274

Details of investments are as follows:

Fair

value as a

Nominal Fair Adjusted percentage

Issuer value value cost of NAV

RM RM RM %

30.4.2020

Corporate bonds

08.05.2020 RHB Bank

Berhad 10,000,000 10,229,840 10,229,712 1.86

15.05.2020 KT Kira

Sertifikalari

Varlik

Kiralama A.S. 20,000,000 20,524,551 20,516,024 3.74

21.05.2020 TF Varlik

Kiralama A.S. 5,000,000 5,129,703 5,127,603 0.93

06.07.2020 Krung Thai

Bank Public

Company

Limited 22,500,000 22,927,685 22,885,818 4.17

15.07.2020 KT Kira

Sertifikalari

Varlik

Kiralama A.S. 5,000,000 5,095,741 5,083,611 0.93

Maturity

date

19

AmIncome Plus


4. INVESTMENTS (CONT’D.)

Fair

value as a



RM RM RM %

30.4.2020 (cont’d.)

Corporate bonds (cont’d.)

19.11.2020 Special

Power

Vehicle

Berhad 5,000,000 5,997,259 5,992,017 1.09

11.12.2020 UEM Sunrise

Berhad 10,000,000 10,295,340 10,190,105 1.87

25.05.2021 CIMB Group

Holdings

Berhad 10,000,000 10,488,068 10,277,502 1.91

27.10.2021 First Resources

Limited 9,800,000 10,032,765 9,843,035 1.83

28.10.2021 Celcom Networks

Sdn Bhd 4,000,000 4,106,075 4,007,981 0.75


Berhad 5,000,000 5,124,864 5,004,961 0.93

31.03.2022 GENM Capital

Berhad 5,000,000 5,156,849 5,028,873 0.94

25.04.2022 Public Bank

Berhad 20,000,000 20,631,830 20,082,597 3.76

28.04.2022 Sabah

Development

Bank Berhad 10,000,000 10,390,956 10,082,998 1.89

10.06.2022 YTL Power

International

Berhad 10,000,000 10,430,214 10,448,166 1.90

30.06.2022 Sports Toto

Malaysia

Sdn Bhd 10,000,000 10,332,096 10,174,641 1.88

29.08.2022 Celcom

Networks

Sdn Bhd 5,000,000 5,234,606 5,052,494 0.95

20.09.2022 Affin Bank

Berhad 4,000,000 4,149,392 4,143,472 0.75

27.09.2022 RHB Bank

Berhad 10,000,000 10,357,219 10,258,058 1.89

Maturity

date

20

AmIncome Plus



Fair

value as a



RM RM RM %

30.4.2020 (cont’d.)


06.10.2022 Danajamin

Nasional

Berhad 5,000,000 5,182,538 5,031,215 0.94

14.11.2022 Bank Islam

Malaysia

Berhad 12,000,000 12,722,283 12,314,830 2.32

30.11.2022 Hong Leong

Financial

Group Berhad 5,000,000 5,289,431 5,124,391 0.96

13.01.2023 Kedah Cement

Sdn Bhd 30,000,000 30,825,210 30,423,827 5.61

23.02.2023 AmBank (M)

Berhad* 5,000,000 5,293,870 5,256,623 0.96

24.03.2023 YTL Power

International

Berhad 5,000,000 5,175,208 5,194,447 0.94

29.03.2023 CIMB Thai

Bank Public

Company

Limited 10,000,000 10,421,089 10,380,442 1.90


Financial

Group Berhad 5,000,000 5,300,468 5,085,768 0.96


Berhad 10,000,000 10,631,618 10,196,957 1.94

25.07.2023 United Overseas

Bank (Malaysia)

Berhad 9,000,000 9,499,965 9,117,899 1.73


Holdings

Berhad 28,500,000 29,960,726 28,857,272 5.45


Berhad 5,000,000 5,246,932 5,009,628 0.96

Maturity

date

21

AmIncome Plus



Fair

value as a



RM RM RM %

30.4.2020 (cont’d.)



Financial

Group

Berhad 10,000,000 10,358,958 10,042,257 1.89

24.04.2024 Sabah

Development

Bank Berhad 7,000,000 7,465,475 7,021,251 1.36


Holdings

Berhad 5,000,000 5,251,325 5,082,225 0.96

22.07.2024 Bumitama

Agri Ltd 9,700,000 10,042,923 9,808,959 1.83

25.09.2024 Malayan

Banking

Berhad 23,000,000 23,536,725 23,095,125 4.29

12.12.2024 DRB-Hicom

Berhad 23,500,000 23,545,278 23,913,053 4.29

20.12.2024 MBSB Bank

Berhad 10,000,000 10,402,514 10,185,680 1.89

21.02.2025 Danum Capital

Berhad 18,500,000 18,655,172 18,608,922 3.40

27.02.2025 Toyota Capital

Malaysia

Sdn Bhd 34,000,000 34,922,839 34,664,462 6.36

27.02.2025 TG Excellence

Berhad 2,750,000 2,795,254 2,769,047 0.51

25.02.2027 Prasarana

Malaysia

Berhad 10,000,000 10,095,408 10,054,608 1.84

Total corporate bonds 463,250,000 479,256,262 471,668,556 87.26

Total financial assets at FVTPL 479,256,262 471,668,556 87.26

Excess of fair value over adjusted cost 7,587,706

date

Maturity

22

AmIncome Plus



Fair

value as a



RM RM RM %

31.10.2019

Corporate bonds

12.11.2019 Jimah Energy

Ventures

Sdn Bhd 3,000,000 3,135,704 3,134,840 0.59


Berhad 5,000,000 5,159,402 5,156,726 0.97


Assurance

Berhad 5,000,000 5,063,414 5,050,138 0.96

31.03.2020 KT Kira

Sertifikalari

Varlik

Kiralama A.S. 1,000,000 1,009,575 1,005,085 0.19


Holdings

Berhad 32,700,000 33,167,915 33,047,472 6.25

16.04.2020 RHB Investment

Bank Berhad 5,000,000 5,037,599 5,036,221 0.95

08.05.2020 RHB Bank

Berhad 15,000,000 15,424,714 15,420,897 2.91

15.05.2020 KT Kira

Sertifikalari

Varlik

Kiralama A.S. 20,000,000 20,639,822 20,533,200 3.89

21.05.2020 TF Varlik

Kiralama A.S. 5,000,000 5,142,278 5,129,178 0.97

06.07.2020 Krung Thai

Bank Public

Company

Limited 22,500,000 23,031,860 22,951,197 4.34

15.07.2020 KT Kira

Sertifikalari

Varlik

Kiralama A.S. 5,000,000 5,119,508 5,087,358 0.97

19.11.2020 Special Power

Vehicle Berhad 5,000,000 6,435,459 6,429,187 1.21

Maturity

date

23

AmIncome Plus



Fair

value as a



RM RM RM %

31.10.2019 (cont’d.)



Berhad 10,000,000 10,334,055 10,194,476 1.95


Holdings

Berhad 10,000,000 10,521,268 10,289,539 1.98


Berhad 5,200,000 5,484,117 5,321,626 1.04

27.10.2021 First Resources

Limited 9,800,000 10,010,589 9,853,858 1.89


Sdn Bhd 4,000,000 4,103,995 4,010,020 0.77


Berhad 5,000,000 5,128,164 5,006,326 0.97


Berhad 5,000,000 5,154,003 5,031,673 0.97

25.04.2022 Public Bank

Berhad 20,000,000 20,596,603 20,107,470 3.88

28.04.2022 Sabah

Development

Bank Berhad 10,000,000 10,377,556 10,101,522 1.96

22.06.2022 UMW Holdings

Berhad 2,000,000 2,095,305 2,045,192 0.40

30.06.2022 Sports Toto

Malaysia

Sdn Bhd 10,000,000 10,241,781 10,180,372 1.93


Sdn Bhd 5,000,000 5,215,671 5,055,344 0.98

06.10.2022 Danajamin

Nasional

Berhad 10,000,000 10,289,477 10,065,682 1.94

11.10.2022 Edra Solar

Sdn Bhd 3,500,000 3,506,156 3,508,256 0.66

14.11.2022 Bank Islam

Malaysia

Berhad 12,000,000 12,731,744 12,323,830 2.40

Maturity

date

24

AmIncome Plus



Fair

value as a



RM RM RM %

31.10.2019 (cont’d.)



Financial Group

Berhad 5,000,000 5,271,848 5,127,658 0.99

29.03.2023 CIMB Thai

Bank Public

Company

Limited 10,000,000 10,457,489 10,434,089 1.97


Financial

Group Berhad 5,000,000 5,266,169 5,087,119 0.99


Berhad 10,000,000 10,581,975 10,211,264 2.00

25.07.2023 United Overseas

Bank (Malaysia)

Berhad 9,000,000 9,397,163 9,126,265 1.77

28.09.2023 BGSM

Management

Sdn Bhd 5,000,000 5,170,297 5,023,705 0.98

18.10.2023 AmBank Islamic

Berhad* 5,000,000 5,181,809 5,009,359 0.98


Holdings

Berhad 28,500,000 29,764,588 28,903,510 5.61


Berhad 5,000,000 5,230,732 5,010,788 0.99

15.11.2023 AmBank (M)

Berhad* 10,000,000 10,577,645 10,231,945 2.00

27.12.2023 BGSM

Management

Sdn Bhd 5,000,000 5,425,058 5,277,327 1.02


Financial

Group Berhad 10,000,000 10,260,058 10,042,257 1.94

24.04.2024 Sabah

Development

Bank Berhad 7,000,000 7,359,322 7,023,831 1.39

date

Maturity

25

AmIncome Plus



Fair

value as a Nominal Fair Adjusted percentage

Issuer value value cost of NAV RM RM RM %

31.10.2019 (cont’d.)



Holdings

Berhad 5,000,000 5,205,880 5,084,230 0.98

22.07.2024 Bumitama

Agri Ltd 9,700,000 9,922,785 9,811,138 1.87

25.09.2024 Malayan

Banking

Berhad 23,000,000 23,047,745 23,095,125 4.35Total corporate bonds 397,900,000 412,278,297 405,576,295 77.75

Government Securities

15.10.2024 Government

of Malaysia 10,000,000 10,171,977 10,111,612 1.92

Total GovernmentSecurities 10,000,000 10,171,977 10,111,612 1.92

Total financial assets at

FVTPL 407,900,000 422,450,274 415,687,907 79.67

Excess of fair value over adjusted cost 6,762,367

* Financial institutions related to the Manager

5. AMOUNT DUE FROM/TO MANAGER

30.4.2020 31.10.2019

Note RM RM

(a) Due from ManagerCreation of units (i) 4,386,572 26,606,984

(b) Due to Manager

Redemption of units (ii) 370,694 622,096

Manager’s fee payable (iii) 378,124 371,185

748,818 993,281

Maturity

date

26

AmIncome Plus


5. AMOUNT DUE FROM/TO MANAGER (CONT’D.)

(i)

(ii)

(iii)

6. DEPOSITS WITH FINANCIAL INSTITUTIONS

30.4.2020 31.10.2019

RM RM

At nominal value:Fixed deposits with licensed banks 30,000,000 30,000,000

At carrying value:Fixed deposits with licensed banks 30,708,822 30,132,904

Details of deposits with financial institutions are as follows:

Carrying

value as a

Nominal Carrying Purchased percentage Maturity value value cost of NAV date Bank RM RM RM %

30.4.2020

Fixed deposits with

licensed banks

Public Bank

Berhad 15,000,000 15,321,185 15,000,000 2.79

Public Bank

Berhad 15,000,000 15,387,637 15,000,000 2.80

30,000,000 30,708,822 30,000,000 5.59

The amount represents amount payable to the Manager for units redeemed.

10.07.2020

28.08.2020

Manager’s fee is at a rate of 0.75% (2019: 0.75%) per annum on the NAV of the Fund,

calculated on a daily basis.

The normal credit period in the previous financial year and current financial period for

Manager’s fee payable is one month.

The amount represents amount receivable from the Manager for units created.

The normal credit period in the previous financial year and current financial period for

creation and redemption of units is three business days.

27

AmIncome Plus


6. DEPOSITS WITH FINANCIAL INSTITUTIONS (CONT’D.)

Carrying

value as a

Nominal Carrying Purchased percentage Maturity value value cost of NAV date Bank RM RM RM %

31.10.2019

Fixed deposits with

licensed banks

Public Bank

Berhad 15,000,000 15,033,226 15,000,000 2.84

Public Bank

Berhad 15,000,000 15,099,678 15,000,000 2.84

30,000,000 30,132,904 30,000,000 5.68

7. AMOUNT DUE TO TRUSTEE

8. NET GAIN FROM INVESTMENTS

1.11.2019 to 1.11.2018 to

30.4.2020 30.4.2019

RM RM

Net gain on financial assets at FVTPL comprised:

− Net realised gain on sale of investments 1,241,634 18,359

− Net unrealised gain on changes in fair values of

investments 825,339 2,020,849

2,066,973 2,039,208

28.08.2020

10.07.2020

The normal credit period in the previous financial year and current financial period for Trustee’s

fee payable is one month.

Trustee’s fee is at a rate of 0.07% (2019: 0.07%) per annum on the NAV of the Fund,

calculated on a daily basis.

28

AmIncome Plus


9. TOTAL EQUITY

Total equity is represented by:

30.4.2020 31.10.2019

Note RM RM

Unitholders’ capital (a) 453,351,733 431,647,468

Retained earnings

─ Realised income (b) 88,289,506 91,856,372

─ Unrealised gain (c) 7,587,706 6,762,367

549,228,945 530,266,207

(a)

30.4.2020 31.10.2019

Number of Number of

units RM units RM

At beginning of the

financial period/year 783,558,311 431,647,468 783,953,256 433,163,368

Creation during the

financial period/year 544,844,712 372,296,094 1,257,142,953 861,123,761

Distributions reinvested 21,024,503 14,126,364 37,549,223 25,383,289

Cancellation during the

financial period/year (534,591,652) (364,718,193) (1,295,087,121) (888,022,950)

At end of the financial period/year 814,835,874 453,351,733 783,558,311 431,647,468

(b) Realised – distributable

30.4.2020 31.10.2019

RM RM

At beginning of the financial period/year 91,856,372 97,407,879

Net realised income for the financial period/year 10,559,498 19,831,782

Distributions out of realised income (14,126,364) (25,383,289)At end of the financial period/year 88,289,506 91,856,372

(c) Unrealised – non-distributable

30.4.2020 31.10.2019

RM RM

At beginning of the financial period/year 6,762,367 1,052,215

Net unrealised gain for the financial period/year 825,339 5,710,152At end of the financial period/year 7,587,706 6,762,367

Unitholders’ capital/units in circulation

29

AmIncome Plus


10. UNITS HELD BY RELATED PARTIES

The related parties and their relationships with the Fund are as follows:

Related parties Relationship

AmFunds Management Berhad The Manager

AmInvestment Bank Berhad Holdings company of the Manager

AMMB Holdings Berhad Ultimate holding company of the Manager

Subsidiaries and associates of AMMB Subsidiaries and associate companies of the

as disclosed in its financial statements ultimate holding company of the Manager

11. INCOME TAX

1.11.2019 to 1.11.2018 to

30.4.2020 30.4.2019

RM RM

Net income before tax 11,384,837 11,846,007

Taxation at Malaysian statutory rate of 24% (2019: 24%) 2,732,361 2,843,042

Tax effects of:

Income not subject to tax (3,271,730) (3,357,418)

Restriction on tax deductible expenses for unit trust fund 443,476 423,075

Non-permitted expenses for tax purposes 46,618 44,292

Permitted expenses not used and not available for future

49,275 47,009Tax expense for the financial period - -

financial periods

Pursuant to Schedule 6 of the Income Tax Act, 1967, provided that the exemption shall not

apply to the interest paid on credited to a unit trust that is a wholesale fund which is a money

market fund. Interest income earned by Funds other than wholesale money market fund is

exempted from tax.

A reconciliation of income tax expense applicable to net income before tax at the statutory

income tax rate to income tax expense at the effective income tax rate of the Fund is as

follows:

Income tax payable is calculated on investment income less deduction for permitted expenses

as provided for under Section 63B of the Income Tax Act, 1967.

There were no units held by the Manager or any related party as at 30 April 2020 and 31

October 2019.

30

AmIncome Plus


12. DISTRIBUTION

1.11.2019 to 1.11.2018 to

30.4.2020 30.4.2019

RM RM

Undistributed net income brought forward 3,566,866 2,846,793

Interest income 11,565,234 11,950,032

Net realised gain on sale of investments 1,241,634 18,359

16,373,734 14,815,184

Less: Expenses (2,247,370) (2,143,233)

Total amount of distributions 14,126,364 12,671,951

Gross/net distributions per unit (sen) 1.75 1.75

Distributions made out of:

– Realised income 14,126,364 12,671,951

Comprising:

Distributions reinvested 14,126,364 12,671,951

13. MANAGEMENT EXPENSE RATIO (“MER”)

The Fund’s MER is as follows:

1.11.2019 to 1.11.2018 to

30.4.2020 30.4.2019

% p.a. % p.a.

Manager’s fee 0.75 0.75

Trustee’s fee 0.07 0.07

Fund’s other expenses -* -*

Total MER 0.82 0.82

* represents less than 0.01%

The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by the

Fund to the average NAV of the Fund calculated on a daily basis.

Distributions to unitholders declared on 21 April 2020 (declared on 24 April 2019 for the

previous financial period) are from the following sources:

Included in the distributions for the financial period ended 30 April 2020 was RM3,566,866

(2019: RM2,846,793) distributed from previous financial period’ realised income.

31

AmIncome Plus

NOTES TO THE CONDENSED FINANCIAL STATEMENTS


14. PORTFOLIO TURNOVER RATIO (“PTR”)

15. SEGMENTAL REPORTING

16. TRANSACTIONS WITH FINANCIAL INSTITUTIONS

Financial institutions Transaction value

RM %

AmBank (M) Berhad* 84,932,320 32.32

CIMB Bank Berhad 72,101,758 27.44

Standard Chartered Bank Malaysia Berhad 47,328,415 18.01

RHB Investment Bank Berhad 32,977,075 12.55

Malayan Banking Berhad 11,331,727 4.31

AmInvestment Bank Berhad* 10,491,224 3.99

Hong Leong Bank Berhad 3,589,389 1.38

Total 262,751,908 100.00

*

The PTR of the Fund, which is the ratio of average total acquisitions and disposals of

investments to the average NAV of the Fund calculated on a daily basis, is 0.26 times (2019:

0.08 times).

In accordance with the objective of the Fund, substantially all of the Fund’s investments are

made in the form of fixed income securities in Malaysia. The Manager is of the opinion that

the risk and rewards from these investments are not individually or segmentally distinct and

hence the Fund does not have a separately identifiable business or geographical segments.

Details of transactions with financial institutions for the financial period ended 30 April 2020

are as follows:

Financial institutions related to the Manager. The Manager is of the opinion that the

above transactions have been entered in the normal course of business and have been

established under terms that are no less favourable than those arranged with

independent third parties.

The above transactions were in respect of fixed income instruments. Transactions in these

investments do not involve any commission or brokerage.

32

AmIncome Plus



17. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

(a) Market risk

(i) Interest rate risk

(b) Credit risk

Risk management is carried out by closely monitoring, measuring and mitigating the above

said risks, careful selection of investments coupled with stringent compliance to investments

restrictions as stipulated by the Capital Market and Services Act 2007, Securities

Commission’s Guidelines on Unit Trust Funds and the Deed as the backbone of risk

management of the Fund.

The Fund is exposed to a variety of risks that include market risk, credit risk, liquidity risk,

single issuer risk, regulatory risk, management risk and non-compliance risk.

Market risk, in general, is the risk that the value of a portfolio would decrease due to

changes in market risk factors such as equity prices, interest rates (yield curve), foreign

exchange rates and commodity prices.

Interest rate risk will affect the value of the Fund’s investments, given the interest

rates movements, which are influenced by regional and local economic

developments as well as political developments.

Domestic interest rates on deposits and placements with licensed financial

institutions are determined based on prevailing market rates.

Credit risk is the risk that the counterparty to a financial instrument will cause a financial

loss to the Fund by failing to discharge an obligation. The Fund is exposed to the risk of

bond issuers and financial institutions defaulting on their repayment obligations which in

turn would affect the NAV of the Fund.

For deposit with financial institution, the Fund makes placements with financial

institutions with sound rating of P1/MARC-1 and above. Cash at banks are held for

liquidity purposes and are not exposed to significant credit risk.

33

AmIncome Plus



17. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)

(c) Liquidity risk

(d) Single issuer risk

(e) Regulatory risk

(f) Management risk

(g) Non-compliance risk

Internal policy restricts the Fund from investing in securities issued by any issuer of not

more than a certain percentage of its NAV. Under such restriction, the risk exposure to

the securities of any single issuer is diversified and managed based on internal/external

ratings.

Any changes in national policies and regulations may have effects on the capital market

and the NAV of the Fund.

This is the risk of the Manager, the Trustee or the Fund not complying with internal

policies, the Deed of the Fund, securities law or guidelines issued by the regulators. Non-

compliance risk may adversely affect the investments of the Fund when the Fund is

forced to rectify the non-compliance.

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting

obligations associated with financial liabilities that are settled by delivering cash or

another financial asset. Exposure to liquidity risk arises because of the possibility that the

Fund could be required to pay its liabilities or redeem its units earlier than expected. The

Fund maintains sufficient level of liquid assets, after consultation with the Trustee, to

meet anticipated payments and cancellations of units by unitholders. Liquid assets

comprise of deposits with licensed financial institutions and other instruments, which are

capable of being converted into cash within 5 to 7 days. The Fund’s policy is to always

maintain a prudent level of liquid assets so as to reduce liquidity risk.

Poor management of the Fund may cause considerable losses to the Fund that in turn

may affect the NAV of the Fund.

34

AmIncome Plus

STATEMENT BY THE MANAGER

For and on behalf of the Manager

GOH WEE PENG

Chief Executive Officer

Kuala Lumpur, Malaysia

17 June 2020

I, Goh Wee Peng, for and on behalf of the Manager, AmFunds Management Berhad, for

AmIncome Plus (the “Fund”) do hereby state that in the opinion of the Manager, the

accompanying condensed statement of financial position, condensed statement of

comprehensive income, condensed statement of changes in equity, condensed statement of

cash flows and the accompanying notes are drawn up in accordance with Malaysian Financial

Reporting Standards so as to give a true and fair view of the financial position of the Fund as at

30 April 2020 and the comprehensive income, the changes in equity and cash flows of the Fund

for the half year then ended.

AmFunds Management Berhad

35

Trustee’s Report

For the Six Months Financial Period Ended 30 April 2020

To the Unit Holders of

AMINCOME PLUS

We are also of the opinion that:

(a)

(b)

(c)

Yours faithfully

AMANAHRAYA TRUSTEES BERHAD

Kuala Lumpur, Malaysia

Deputy Chief Executive Officer

17 June 2020

We, AMANAHRAYA TRUSTEES BERHAD, have acted as Trustee of AMINCOME PLUS for

the six months financial period ended 30 April 2020. In our opinion, AMFUNDS

MANAGEMENT BERHAD, the Manager, has operated and managed AMINCOME PLUS in

accordance with the limitations imposed on the investment powers of the management

company under the Deed, securities laws and the applicable Guidelines on Unit Trust Funds

for the six months financial period ended 30 April 2020.

Valuation and pricing is carried out in accordance with the Deed and any regulatory

requirement;

Creation and cancellation of units are carried out in accordance with the Deed and any

regulatory requirement; and

The distribution of income made by AMINCOME PLUS as declared by the Manager is

appropriate and reflects the investment objective of AMINCOME PLUS.

ZAINUDIN BIN SUHAIMI

36

37

DIRECTORY Head Office 9th & 10th Floor, Bangunan AmBank Group 55, Jalan Raja Chulan, 50200 Kuala Lumpur Tel: (03) 2032 2888 Facsimile: (03) 2031 5210 Email: [email protected] Postal Address AmFunds Management Berhad P.O Box 13611, 50816 Kuala Lumpur

For enquiries about this or any of the other Funds offered by AmFunds Management Berhad Please call 2032 2888 between 8.45 a.m. to 5.45 p.m. (Monday to Thursday),

Friday (8.45 a.m. to 5.00 p.m.)

03 2032 2888 | aminvest.com | [email protected] m

AmFunds Management Berhad 198601005272 (154432-A)

Documents

Semi-Annual Report for AmIncome Plus · of 2.17x and 1.73x respectively, with continued support from real money investors onshore. Markets were relatively quiet with thinner liquidity