ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 … · 4 1.2 Performance for the Financial Year Ended...

MANAGER:BIMB INVESTMENT MANAGEMENT BERHAD (276246-X)

BIMB i DIVIDEND FUND

ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 OCTOBER 2017

LAPORAN TAHUNAN BAGI TAHUN KEWANGAN BERAKHIR 31 OKTOBER 2017

2

TABLE OF CONTENT

1.0 Manager’s Report 3

1.1 Fund Name/ Fund Type/ Fund Category/ Fund Investment Objective

3

1.2 Performance for the Financial Year Ended 31 October 2017

4

1.3 Economic and Market Review 7

1.4 Market Outlook and Strategy 9

1.5 Asset Allocation as at 31 October 2017 10

1.6 Other Performance Data for the Financial Year Ended 31 October 2017

11

1.7 Unit Holdings as at 31 October 2017 12

1.8 Policy on Rebate and Soft Commission 12

2.0 Trustee’s Report 24

3.0 Shariah Committee’s Report 25

4.0 Directors’ Declaration Report 26

5.0 Independent Auditors’ Report 27

6.0 Financial Statements (Audited) 31

7.0 Corporate Directory 59

3

1.0 Manager’s Report

Dear Unitholders, We are pleased to present the Manager’s report of BIMB i Dividend Fund for the

financial year ended 31 October 2017.

1.1 Fund Name/ Fund Type/ Fund Category/ Fund Investment Objective/ Fund

Performance Benchmark/ Fund Distribution Policy

Fund Name BIMB i Dividend Fund

Fund Type Income and Growth

Fund

Category Equity

Fund Investment Objective

This Fund aims to primarily provide investors with a combination of steady and recurring income and capital growth in the medium to long term* through investments in Shariah-compliant dividend yielding equities, which historically

offered solid performance and is generally less volatile when compared to the broader equity market. Note: Any material change to the investment objective of the Fund

would require Unit Holders’ approval.

Fund Performance Benchmark

The Fund will be measured against an absolute return benchmark of 6% per annum. This is not a guaranteed return and it is only a measurement of the Fund’s performance. The

Fund may or may not achieve 6% per annum growth rate in any particular financial year but targets to achieve this growth rate through long term.

Fund Distribution

Policy

The Manager will declare annual distributions (subject to the

availability of income).

*“medium to long term” in this context refers to three (3) years or more.

4

1.2 Performance for the Financial Year Ended 31 October 2017

1.2.1 Performance review for BIMB i Dividend Fund

For the financial year under review, BIMB i Dividend Fund (the Fund) declared a

net income distribution of 1.54 sen per unit, equivalent to a yield of 7.54% per

annum. The selected performance benchmark for this Fund is an absolute return

benchmark of 6.00% per annum. The Fund registered a return of 9.50% as

compared to its Benchmark’s return of 6.00%. For the financial year under review,

the FTSE Bursa Malaysia EMAS Shariah Index registered a gain of 5.64% as

foreign investors returned to Malaysia to increase their holdings in local equities.

Our strategy has consistently remained to focus on investing in stocks with

consistent track record of dividend distribution and potential capital growth over

medium to long term.

During the financial year ended 31 October 2017, the Fund was able to deliver

higher than its historical dividend yield as better market conditions and stronger

than expected GDP growth for Malaysia had help shore up local stocks’ share

price performance in 2017. Hence, for the financial year under review, the Fund

has met its objectives of providing investors with a steady annual income stream

and capital growth through investments in dividend yielding equities that

historically tends to offer good returns during equity market recovery periods. As at

31 October 2017, the fund had 97.40% exposure to equities and continues to be

managed in line with its stated objective by investing in dividend yielding equities.

For the year ended 31 October 2017, there were no significant changes to the

state of affairs of the Fund and no circumstances that materially affect the interest

of Unit Holders that have taken place up to the date of this Manager’s Report.

5

1.2.2 Total Return and Average Total Return for the Financial Year Ended 31 October 2017

BIMB i Dividend Fund Benchmark

Total

Return (%)

Average

Total Return (%)

Total

Return (%)

Average

Total Return (%)

1-Year Period (Nov16 – Oct17) 9.50 9.50 6.00 6.00

3-Year Period (Nov14 – Oct17) -5.85 -1.95 19.10 6.00

5-Year Period (Nov12 – Oct17) 1.57 0.31 33.82 6.00

1.2.3 Total Return for the Last 5 Financial Years

Financial Years

Total Return

BIMB i Dividend Fund

(%)

Benchmark

(%)

31 October 2017 9.50 6.00

31 October 2016 -4.30 6.00

31 October 2015 -10.15 6.00

31 October 2014 4.70 6.00

31 October 2013 3.04 6.00

1.2.4 Income Distribution for the Last 5 Financial Years

Financial Years

Income Distribution

Benchmark per annum

(%) Distribution

(sen)/ unit

Distribution Yield per

annum (%)

31 October 2017 1.54 7.54 6.00

31 October 2016 0.73 3.30 6.00

31 October 2015 1.25 4.81 6.00

31 October 2014 1.87 7.02 6.00

31 October 2013 2.15 7.70 6.00

6

Figure 1: Performance of the Fund versus the Benchmark

3.04%4.70%

-10.15%

-4.30%

9.50%

6.00%6.00%

6.00%6.00% 6.00%

-12.0%

-7.0%

-2.0%

3.0%

8.0%

13.0%

31-Oct-13 31-Oct-14 31-Oct-15 31-Oct-16 31-Oct-17

BIMB I-Dividend Benchmark

FUNDAND BENCHMARK TOTAL RETURNTOTAL RETURN

Note: Data Source : BIMB Investment Management Berhad

Data verified by : Novagni Analytics & Advisory Sdn. Bhd. Benchmark : Absolute return of 6% per annum

Notes:

1. Total Return of the Fund has been verified by Novagni Analytics & Advisory

Sdn. Bhd.

2. Average Total return is derived by this formula:

Total Return Number of Years under Review

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

7

1.3 Economic and Market Review

Economy a) Global

United States (US) Gross Domestic Product (GDP) grew by 3.3% in the

third quarter of 2017 as compared to 3.1% growth in the second quarter of

2017 and 1.2% in the first quarter of 2017. US inflation rate remains healthy

at 2.0% in October 2017 while US unemployment rate continues to improve

to 4.1% in October 2017 as compared to 4.6% in November 2016. Moving

forward, the Fed intends to execute more potential rate hikes and

quantitative tightening for the US in the near term.

The Euro zone economy grew by 0.6% in the third quarter of 2017 as

compared to 0.7% in the second quarter 2017 and 0.6% in the first quarter

of 2017. The Euro zone economic recovery has gained momentum while

unemployment has fallen against a backdrop of ultra-low interest rates

which are among the measures implemented by the European Central

Bank (ECB) to boost economic activity.

The Chinese economy grew by 6.8% for the third quarter of 2017, as

compared to 6.9% in the second quarter of 2017 following improved

industrial output and private consumption, aided by a robust property

market and recovery in the exports sector. Overall, major global economies

appear to be recovering in tandem while market sentiment for the emerging

markets improved during the period under review.

(Source: Bloomberg, CIMB Research and RHB Research Institute Sdn Bhd)

b) Local

The Malaysian economy grew faster at 6.2% in the third quarter of 2017 as

compared to 5.8% in the second quarter 2017 and 5.6% in the first quarter

2017. The stronger GDP growth for the period was due to improvements in

private consumption and exports. Malaysia’s inflation on the other hand rose

to 3.7% in October 2017, up from 1.8% in November 2016 driven by higher

oil prices and stronger GDP performance.

Despite the higher inflationary pressure faced by the local economy, Bank

Negara Malaysia’s Monetary Policy Committee (MPC) had decided to

maintain the Overnight Policy Rate (OPR) at 3.00% during its September

meeting to accommodate and support growth prospect for the country.

Bank Negara’s international reserve rose to USD 101.5 billion as at 31

October 2017 as compared to USD 96.4 billion in November 2016 that is

sufficient to finance 7.6 months of retained imports and is 1.1 times the

short-term external debt.

(Source: Bank Negara Malaysia, Bloomberg, CIMB Research and RHB

Research Institute Sdn Bhd)

8

Market Review

Equity

FTSE Bursa Malaysia EMAS Shariah Index (“FBM Shariah”) commenced the year

under review at 12,384.01 points and declined to 11,845.46 points on 30

November 2016. The FBM Shariah subsequently rose to 13,126.04 on 16 May

2017 and closed at 13,082.72 points on 31 October 2017. For the year under

review, the FBM Shariah was up 698.71 points or 5.64% while the FBM KLCI was

up by 75.46 points or 4.51% to close at 1,747.92 points. Among the key factors

that contributed to the movement of the index are highlighted below:

In November 2016, Donald Trump’s victory in the U.S. presidential election

caught the general markets off-guard as investors flock to safe heaven assets

like gold, bond and the Japanese yen, perceiving Trump’s administration

would bring uncertainty to the markets. The Asian markets reacted with a

sharp selldown, however subsequently, global investors rebalanced their

portfolio to take advantage of the perceived stronger US growth and higher

US bond yields.

In April 2017, a historic meeting between US President Donald Trump and

China’s leader Xi Jinping signaled more understanding between the two

countries after a summit held in Florida, USA and appears to have

successfully defused a potential trade war between the world’s two largest

economies. A stabilizing US-China trade relationship will allow the US Federal

Reserve to conduct its third rate hike of the year by 25bps to 1.50% on the

back of stronger economic fundamentals in the US.

In August 2017, the North Korea and US dispute escalated to new heights

post of North Korea’s missile testing exercise that had prompted US President

Trump to issue a retaliation warning. However, markets were quick to

discount the negative news and sentiment recovered subsequently as the US

Federal Reserve announced of its quantitative tightening measures. The Fed

intends to retire USD3.6 trillion or 50% of its Quantitative easing money in the

market in three years time along with more rate hikes in the short to medium

term horizon.

(Source: Bloomberg, CIMB Research and RHB Research Institute Sdn Bhd)

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1.4 Market Outlook and Strategy

For the rest of 2017, the equity market is expected to be volatile. External

factors may likely influence the domestic market sentiment, which includes

the OPEC and Non-OPEC commitment to stabilize the oil glut, US President

Trump’s stance on North Korea’s nuclear ambition and potential military

strike. With potential interest on selective sector to support the domestic

market, the local bourse should be able to withstand external shocks given

the ample domestic liquidity and buying interest from foreign and local

institutional investors.

While the global economy continues to expand at a moderate pace, there has

been increasing divergence in the growth momentum among the major

economies. For most of Asia, growth is supported by the continued expansion

of domestic demand. Looking ahead, the global economy is expected to

continue on a moderate recovery path.

For Malaysia, the resilience of domestic consumption remains the support for

growth. With higher spending on infrastructure projects underway, higher

public sector wages adjustments, improved outlook for crude palm oil

production volume and a rebound in government consumption and

expenditure will help to improve corporate earnings and consumer spending

for the year.

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1.5 Asset Allocation as at 31 October 2017

BIMB i Dividend Fund 2017 (%)

2016 (%)

2015 (%)

Investment In Quoted Securities

Construction 1.3 2.9 3.6

Consumer Products 2.2 4.1 2.6

Finance - 2.7 2.8

Industrial Products 25.0 17.8 1.7

Infrastructure 7.0 6.7 10.6

Plantation 4.0 2.1 9.6

Properties 3.0 15.6 13.9

REITs - - 0.1

Technology 19.1 9.4 0.5

Trading and Services 34.8 34.9 44.7

Warrant 1.0 0.2 0.3

97.4 96.4 90.4

CASH AND SHORT TERM INVESTMENTS:

2.6 3.6 9.6

100.0 100.0 100.0

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1.6 Other Performance Data for the Financial Year Ended 31 October 2017

BIMB i Dividend Fund 2017 2016 2015

Unit Prices (MYR)

Highest net asset value (“NAV”) per unit for the year*

0.2229 0.2242 0.2600

Lowest NAV per unit for the year* 0.1934 0.2021 0.2060

Net Asset Value (NAV) and Units in Circulation (UIC) as at the End of the Year

Total NAV (MYR) 173,998,986 183,152,705 218,658,890

Units in Circulation (UIC) 835,418,744 896,618,385 988,832,925

NAV per unit (MYR)* 0.2083 0.2043 0.2211

Return of Fund (%)(a)

Capital Growth (%)(b)

1.96 (7.60) (14.96)

Income Return (%)(c)

7.54 3.30 4.81

Return of Fund (%) 9.50 (4.30) (10.15)

Gross Distribution per Unit (Sen) 1.54 0.73 1.2500

Net Distribution per Unit (Sen) 1.54 0.73 1.2500

NAV per Unit before Distribution (MYR) 0.2237 0.2116 0.2336

NAV per Unit after Distribution (MYR) 0.2083 0.2043 0.2211

Date of Distribution 31 October 31 October 31 October

Management Expense Ratio (MER) (%)

(d)

1.71 1.70 1.65

Portfolio Turnover Ratio (PTR) (times)

(e)

1.13 0.95 3.34

*The price and NAV per unit are ex-distribution

Note:

a) Return of the Fund = NAV per unit (end of financial year) - 1 NAV per unit (beginning of financial year)

b) Capital Growth = Total Return of the Fund – Income Return

c) Income Return =

{Income Distribution per Unit / NAV per Unit on beginning of financial year} x 100

d) Management Expenses =

Ratio

It is the total management expenses expressed as an annual percentage of the Fund’s average NAV

12

e) Portfolio Turnover Ratio =

It represents the average of the total acquisitions and disposals of the investment in the Fund for

the annual period over the average Net Asset Value of the Fund calculated on a daily basis

1.7 Unit Holdings as at 31 October 2017

Size of Unit Holdings


No. of Unit Holders No. of Units Held

No. % Units %

5,000 and below 814 41.83 2,702,909.77 0.32

5,001 to 10,000 345 17.73 2,557,194.66 0.31

10,001 to 50,000 563 28.93 13,788,251.27 1.65

50,001 to 500,000 207 10.64 28,524,407.70 3.41

500,001 and above * 16 0.82 787,845,580.80 94.31

Units Held by Holders 1,945 99.95 835,418,344.20 100.00

Units Held by Manager 1 0.05 400.00 0.00

Grand Total for The Fund

1,946 100.00 835,418,744.20 100.00

*included under this category are nominee accounts 1.8 Policy on Rebate and Soft Commission

Any stock broking rebates received by the Manager will be directed to the account

of the Fund. Any soft commissions received from the broker which are in the form

of research and advisory services that assist in the decision-making process

relating to the Fund’s investment may be retained by the Manager. The Manager

received soft commission from brokers in the form of research and advisory

services during the year under review.

For and on behalf of

The Manager

BIMB INVESTMENT MANAGEMENT BERHAD

Date: 21 December 2017

13

1.0 Laporan Pengurus

Para Pemegang Unit yang dihormati, Kami dengan sukacitanya membentangkan Laporan Pengurus BIMB i Dividend

Fund bagi tahun kewangan berakhir 31 Oktober 2017.

1.1 Nama Dana/ Jenis Dana/ Kategori Dana/ Objektif Pelaburan Dana/ Penanda

Aras Dana/ Polisi Agihan Dana

Nama Dana BIMB i Dividend Fund

Jenis Dana Dana Pendapatan dan Pertumbuhan

Kategori Dana Ekuiti

Objektif Pelaburan Dana

Tujuan utama Dana ini adalah untuk mewujudkan peluang kepada pelabur, kombinasi pendapatan yang stabil dan berulang serta pertumbuhan modal dalam

jangka sederhana hingga jangka panjang* melalui pelaburan dalam ekuiti patuh Syariah yang menghasilkan dividen, yang mana mengikut sejarah

menawarkan prestasi yang kukuh dan secara amnya lebih stabil berbanding pasaran ekuiti secara keseluruhan.

Nota:

Sebarang perubahan ketara pada objektif pelaburan Dana memerlukan kelulusan Pemegang Unit.

Penanda Aras Dana

Dana akan diukur berdasarkan penanda aras pulangan mutlak 6% setahun. Ini bukanlah satu pulangan yang dijamin dan ia hanyalah ukuran prestasi Dana. Dana ini mungkin atau mungkin tidak mencapai kadar

pertumbuhan 6% setahun pada mana-mana tahun kewangan tertentu tetapi mempunyai sasaran untuk mencapai pulangan ini menerusi pertumbuhan jangka

panjang.

Polisi Agihan

Dana

Pengurus akan mengisytiharkan agihan tahunan

(tertakluk kepada pendapatan diperolehi).

*“jangka sederhana hingga jangka panjang” dalam konteks ini merujuk kepada

tiga (3) tahun atau lebih.

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1.2 Pencapaian bagi Tahun Kewangan Berakhir 31 Oktober 2017

1.2.1 Kajian Pencapaian bagi BIMB i Dividend Fund

Bagi tahun kewangan dalam kajian, BIMB i Dividend Fund (Dana) telah

mengumumkan agihan pendapatan bersih sebanyak 1.54 sen seunit, bersamaan

dengan hasil pulangan sebanyak 7.54% setahun. Penanda aras terpilih prestasi

Dana adalah penanda aras pulangan mutlak sebanyak 6.00% setahun. Dana

mencatatkan pulangan sebanyak 9.50% berbanding pulangan penanda aras

sebanyak 6.00%. Bagi tahun kewangan dalam kajian, Indeks Syariah EMAS

FTSE Bursa Malaysia mencatatkan keuntungan sebanyak 5.64% berikutan para

pelabur asing kembali ke Malaysia untuk meningkatkan pegangan mereka dalam

pasaran ekuiti tempatan.

Strategi kami secara konsisten menumpukan kepada pelaburan dalam saham-

saham yang mempunyai rekod pencapaian yang berterusan dalam pengagihan

dividen dan berpotensi untuk mencatatkan pertumbuhan modal dalam jangka

sederhana dan panjang.

Dalam tahun kewangan berakhir pada 31 Oktober 2017, Dana telah berjaya

meraih hasil dividen lebih tinggi berbanding sejarahnya berikutan keadaan

pasaran lebih baik dan pertumbuhan keluaran dalam negara kasar (KDNK)

Malaysia yang lebih kukuh telah menyokong melonjakkan lagi prestasi harga-

harga saham tempatan pada 2017. Sehubungan itu, untuk tahun kewangan dalam

kajian, Dana telah mencapai objektifnya untuk membolehkan para pelabur

menikmati aliran pendapatan tahunan yang stabil dan pertumbuhan modal

melalui pelaburan ekuiti yang menawarkan hasil dividen yang berdasarkan

sejarahnya memberikan pulangan yang baik ketika tempoh pemulihan pasaran

ekuiti. Setakat 31 Oktober 2017, Dana mempunyai pendedahan dalam pasaran

ekuiti sebanyak 97.40% dan kekal diuruskan sejajar dengan objektifnya yang

dinyatakan iaitu melabur dalam ekuiti yang memberikan hasil pulangan dividen.

Bagi tahun berakhir 31 Oktober 2017, tidak terdapat sebarang perubahan ketara

dalam hal ehwal pengurusan Dana dan tiada berlakunya sebarang keadaan yang

menjejaskan kepentingan para Pemegang Unit sehingga tarikh Laporan Pengurus

ini disediakan.

15

1.2.2 Jumlah Pulangan dan Purata Jumlah Pulangan Bagi Tempoh Kewangan Berakhir Pada 31 Oktober 2017

BIMB i Dividend Fund Penanda Aras

Jumlah Pulangan

(%)

Purata

Jumlah Pulangan

(%)

Jumlah Pulangan

(%)

Purata

Jumlah Pulangan

(%)

Jangkamasa 1-

Tahun (Nov16 – Okt17)

9.50 9.50 6.00 6.00

Jangkamasa 3-


-5.85 -1.95 19.10 6.00

Jangkamasa 5 –


1.57 0.31 33.82 6.00

1.2.3 Jumlah Pulangan Bagi 5 Tahun Kewangan Terakhir

Tahun Kewangan

Jumlah Pulangan


(%)

Penanda Aras

(%)

31 Oktober 2017 9.50 6.00

31 Oktober 2016 -4.30 6.00

31 Oktober 2015 -10.15 6.00

31 Oktober 2014 4.70 6.00

31 Oktober 2013 3.04 6.00

1.2.4 Agihan Pendapatan Bagi 5 Tahun Kewangan Terakhir

Tahun Kewangan

Pengagihan Pendapatan Penanda

Aras Tahunan

(%)

Pengagihan

(sen)/ unit

Pengagihan

KeuntuganTahunan (%)

31 Oktober 2017 1.54 7.54 6.00

31 Oktober 2016 0.73 3.30 6.00

31 Oktober 2015 1.25 4.81 6.00

31 Oktober 2014 1.87 7.02 6.00

31 Oktober 2013 2.15 7.70 6.00

16

Rajah 1: Prestasi Dana Berbanding Pulangan Penanda Aras

Nota: Sumber Data : BIMB Investment Management Berhad

Data disahkan oleh : Novagni Analytics & Advisor Sdn. Bhd. Penanda Aras : Pulangan mutlak sebanyak 6% setahun

Nota: 1. Jumlah Pulangan telah disahkan oleh Novagni Analytics & Advisor Sdn.

Bhd.

2. Jumlah Pulangan Purata adalah berpandukan formula berikut:

Jumlah Pulangan Bilangan Tahun Bawah Kajian

Prestasi tahun-tahun sebelum ini tidak semestinya menjadi petunjuk prestasi masa depan dan harga unit serta pulangan pelaburan mungkin turun dan naik.

17

1.3 Ekonomi dan Kajian Pasaran

Ekonomi a) Global

Keluaran Dalam Negara Kasar (KDNK) Amerika Syarikat (AS)

berkembang sebanyak 3.3% pada suku ketiga 2017 berbanding

pertumbuhan 3.1% pada suku kedua 2017 dan 1.2% pada suku

pertama 2017. Kadar inflasi AS kekal sihat iaitu sekitar 2.0% pada

Oktober 2017 sementara kadar pengangguran AS terus menurun

kepada 4.1% pada Oktober 2017 daripada 4.6% pada November 2016.

Bergerak kehadapan, pihak Rizab Persekutuan AS bercadang untuk

menaikan kadar faedah dan pengetatan kuantitatif di AS dalam tempoh

terdekat.

Ekonomi zon Euro berkembang sebanyak 0.6% pada suku ketiga 2017

berbanding 0.7% pada suku kedua 2017 dan 0.6% pada suku pertama

2017. Pemulihan ekonomi zon Euro menyaksikan berlakunya

peningkatan momentum dengan kadar pengangguran telah menurun di

sebalik kejatuhan kadar faedah yang teramat rendah, iaitu di antara

langkah-langkah yang telah dilaksanakan oleh Bank Pusat Eropah

(ECB) untuk meningkatkan aktiviti ekonomi.

Ekonomi China berkembang sebanyak 6.8% pada suku ketiga 2017

berbanding 6.9% pada suku pertama 2017 berikutan peningkatan

dalam pengeluaran perindustrian dan penggunaan swasta yang

dibantu oleh pasaran hartanah yang kukuh dan pemulihan sektor

eksport. Secara keseluruhan, ekonomi utama dunia kelihatan semakin

pulih dengan kadar yang sejajar, dan sentimen untuk prestasi pasaran

saham untuk pasaran-pasaran baru telah meningkat pada tempoh

dalam kajian.

(Sumber: Bloomberg, CIMB Research dan RHB Research Institute Sdn Bhd)

18

b) Dalam Negara

Ekonomi Malaysia berkembang lebih pantas sebanyak 6.2% pada suku

ketiga 2017 berbanding 5.8% pada suku kedua 2017 dan 5.6% pada

suku pertama 2017. KDNK yang lebih kukuh dalam tempoh berkenaan

adalah hasil peningkatan dalam penggunaan swasta dan eksport.

Kadar inflasi Malaysia pada Oktobar 2017 meningkat kepada 3.7%

daripada 1.8% pada November 2016, didorong oleh kenaikan harga

minyak dan prestasi pertumbuhan KDNK yang lebih kukuh.

Meskipun terdapat tekanan inflasi yang lebih tinggi yang dihadapi oleh

ekonomi tempatan, Jawatankuasa Dasar Monetari Bank Negara

Malaysia (MPC) mengekalkan Kadar Dasar Semalaman (OPR) pada

paras 3.00% dalam mesyuaratnya yang diadakan pada September

bagi menampung dan menyokong prospek pertumbuhan negara. Rizab

antarabangsa Bank Negara meningkat kepada AS$101.5 bilion setakat

pada 31 Oktober 2017 berbanding AS$96.4 bilion pada November

2016 yang memadai untuk membiayai 7.6 bulan import tertangguh dan

mewakili 1.1 kali hutang jangka pendek luar negara.

(Sumber: Bank Negara Malaysia, Bloomberg, CIMB Research dan RHB

Research Institute Sdn Bhd)

Kajian Pasaran

Ekuiti

Indeks Syariah EMAS FTSE Bursa Malaysia (Syariah FBM) memasuki tempoh

dalam kajian pada paras 12,384.01 mata dan jatuh ke paras terendah 11,845.46

mata pada 30 November 2016. Indeks Syariah FBM kemudianya naik mencecah

ke paras tertinggi 13,126.04 mata pada 16 Mei 2017 dan ditutup pada paras

13,082.72 mata pada 31 Oktober 2017. Bagi tahun dalam kajian, FBM Syariah

meningkat sebanyak 698.71 mata atau 5.64% manakala FBM KLCI naik sebanyak

75.46 mata atau 4.51% untuk ditutup pada paras 1,747.92 mata. Antara faktor-

faktor utama yang menyumbang kepada pergerakan indeks adalah seperti berikut:

Pada November 2016, kemenangan Donald Trump dalam pilihan raya

Presiden AS adalah di luar jangkaan dan mengejutkan pasaran amnya

apabila para pelabur berpusu-pusu mencari aset pelaburan yang selamat

seperti emas, bon dan yen Jepun kerana mempercayai bahawa pentadbiran

Trump akan menyebabkan berlakunya ketidaktentuan dalam pasaran.

Pasaran Asia pula mengalami kegiatan jualan secara besar-besaran sebelum

para pelabur sejagat kemudiannya mengimbangi semula portfolio mereka

untuk mengambil faedah daripada pertumbuhan lebih kukuh dalam ekonomi

AS dan kadar hasil bon AS yang lebih tinggi.

19

Pada April 2017, pertemuan bersejarah antara Presiden AS Donald Trump

dan pemimpin China, Xi Jinping telah menunjukkan persefahaman yang

lebih di antara kedua-dua negara itu selepas sidang kemuncak diadakan

di Florida, AS yang mungkin dapat melenyapkan potensi berlakunya

perang perdagangan antara dua kuasa ekonomi terbesar dunia. Hubungan

perdagangan AS-China yang stabil juga telah membolehkan Rizab

Persekutuan AS menaikkan kadar faedah ketiga pada tahun ini sebanyak

25bps kepada 1.50% berasaskan fundamental ekonomi yang lebih kukuh

dalam ekonomi AS.

Pada Ogos 2017, pertikaian antara Korea Utara dengan AS semakin

memuncak selepas Korea Utara melakukan ujian peluru berpandu

sehingga Presiden Trump mengeluarkan amaran untuk bertindak balas.

Walau bagaimanapun, pasaran bertindak cepat untuk tidak mengendahkan

berita buruk tersebut dan sentimen kemudiannya pulih berikutan

pengumuman Rizab Persekutuan Amerika Syarikat akan memulakan

langkah pengetatan kuantitatifnya. Rizab Persekutuan Amerika Syarikat

bercadang untuk menghentikan program kelonggaran kuantitatif sebanyak

AS$3.6 trilion atau 50% daripada wangnya dalam pasaran bagi tempoh

tiga tahun akan datang selain melakukan lebih banyak kenaikan kadar

faedah dalam jangka masa pendek ke sederhana.

(Sumber: Bloomberg, CIMB Research dan RHB Research Institute Sdn Bhd)

1.4 Tinjauan Pasaran dan Strategi

Untuk baki tahun 2017, pasaran ekuiti dijangka akan terus berada dalam

keadaan tidak menentu. Faktor luaran berkemungkinan mempengaruhi

sentimen pasaran domestik termasuklah komitmen negara-negara

anggota OPEC dan bukan OPEC untuk menstabilkan pasaran minyak

yang mengalami lebihan pengeluaran, pendirian Presiden Trump terhadap

cita-cita nuklear Korea Utara dan kemungkinan tindakan ketenteraan.

Dengan potensi minat terhadap sektor terpilih untuk menyokong pasaran

domestik, bursa tempatan seharusnya berupaya menahan kejutan luaran

memandangkan terdapat mudah tunai yang mencukupi dalam negara dan

minat belian daripada para pelabur institusi asing dan tempatan.

Ketika ekonomi global terus berkembang pada kadar yang sederhana,

pencapahan didapati meningkat dalam momentum pertumbuhan

dikalangan kuasa-kuasa ekonomi yang utama. Bagi sebahagian besar

negara Asia, pertumbuhan ekonomi disokong oleh pengembangan

permintaan domestik yang berterusan. Melangkah ke hadapan, ekonomi

global dijangka akan terus berada pada landasan pemulihan yang

sederhana.

20

Pengukuhan penggunaan domestik kekal menyokong pertumbuhan

ekonomi Malaysia. Dengan jumlah perbelanjaan lebih besar diperuntukkan

kepada projek-projek infrastruktur yang sedang dijalankan, gaji sektor

awam yang lebih tinggi, tinjauan jumlah pengeluaran minyak sawit mentah

yang bertambah baik dan terdapat lonjakan dalam penggunaan dan

perbelanjaan kerajaan akan membantu menambah baik pendapatan

korporat dan perbelanjaan pengguna pada tahun ini.

1.5 Peruntukan Aset Setakat 31 Oktober 2017

BIMB i Dividend Fund 2017

(%) 2016

(%) 2015

(%)

Pelaburan Sekuriti Tersiarharga

Pembinaan 1.3 2.9 3.6

Barangan Pengguna 2.2 4.1 2.6

Kewangan - 2.7 2.8

Barangan Industri 25.0 17.8 1.7

Infrastruktur 7.0 6.7 10.6

Perladangan 4.0 2.1 9.6

Hartanah 3.0 15.6 13.9

REITs - - 0.1

Teknologi 19.1 9.4 0.5

Perdagangan dan Perkhidmatan 34.8 34.9 44.7

Waran 1.0 0.2 0.3

97.4 96.4

90.4

TUNAI DAN PELABURAN JANGKA PENDEK:

2.6 3.6 9.6

100.0 100.0 100.0

21

1.6 Lain-Lain Data Prestasi bagi Tahun Kewangan Berakhir 31 Oktober 2017

BIMB i Dividend Fund 2017 2016 2015

Harga Unit (RM)

Nilai aset bersih (NAB) tertinggi seunit dalam setahun*

0.2229 0.2242 0.2600

NAB terendah seunit dalam setahun*

0.1934 0.2021 0.2060

Nilai Aset Bersih (NAB) dan Unit Dalam Edaran (UDE) pada Akhir Tahun

Jumlah NAB (RM) 173,998,986 183,152,705 218,658,890

Unit Dalam Edaran (UDE) 835,418,744 896,618,385 988,832,925

NAB seunit (RM) * 0.2083 0.2043 0.2211

Jumlah Pulangan Dana (%)

(a)

Pertumbuhan Modal (%)(b) 1.96 (7.60) (14.96)

Pulangan Pendapatan (%)(c) 7.54 3.30 4.81

Jumlah Pulangan Dana (%)

9.50 (4.30) (10.15)

Agihan Kasar seunit (Sen) 1.54 0.73 1.2500

Agihan Bersih seunit (Sen) 1.54 0.73 1.2500

NAB sebelum Pengagihan (RM)

0.2237 0.2116 0.2336

NAB selepas Pengagihan

(RM) 0.2083 0.2043 0.2211

Tarikh Pengagihan 31 Oktober 31 Oktober 30 Oktober

Nisbah Perbelanjaan

Pengurusan (NPP) (%)(d) 1.71 1.70 1.65

Nisbah Pusing Ganti Portfolio (Kali)

(e) 1.13 0.95 3.34

* Harga dan NAB seunit adalah selepas pengagihan pendapatan

22

Nota:-

a) Pulangan ke atas Dana = Harga seunit (pada akhir tahun kewangan) - 1

Harga seunit (pada awal tahun kewangan)

b) Pertumbuhan Modal = Jumlah Pulangan Dana - Pulangan Pendapatan

c) Pulangan Pendapatan =

{Pengagihan Pendapatan per Unit / NAB per unit pada awal tahun kewangan} x 100

d) Nisbah Perbelanjaan =

Pengurusan

Ia dikira dengan mengambil jumlah perbelanjaan

pengurusan sepertimana yang dinyatakan

sebagai peratusan tahunan daripada jumlah

purata NAB Dana

e) Nisbah Pusing Ganti =

Portfolio

Ia dikira dengan mengambil purata jumlah

perolehan dan pelupusan pelaburan dalam Dana

bagi tempoh tahunan dibahagi dengan purata

NAB Dana yang dikira pada asas harian

1.7 Pecahan Pegangan Unit Setakat 31 Oktober 2017

Saiz Pegangan Unit


Bilangan

Pemegang Unit Jumlah Pegangan Unit

Bilangan % Unit %

5,000 dan ke bawah 814 41.83 2,702,909.77 0.32

5,001 hingga 10,000 345 17.73 2,557,194.66 0.31

10,001 hingga 50,000 563 28.93 13,788,251.27 1.65

50,001 hingga 500,000 207 10.64 28,524,407.70 3.41

500,001 dan ke atas * 16 0.82 787,845,580.80 94.31

Unit yang dipegang oleh Pemegang Unit

1,945 99.95 835,418,344.20 100.00

Unit yang dipegang oleh Pengurus

1 0.05 400.00 0.00

Jumlah Keseluruhan Dana 1,946 100.00 835,418,744.20 100.00

*Akaun penama juga termasuk dibawah kategori ini.

23

1.8 Polisi Rebat dan Komisyen Bukan Tunai

Sebarang rebat broker saham yang diterima oleh Pengurus akan dimasukkan

ke akaun Dana. Apa-apa komisyen bukan tunai yang diterima daripada broker

dalam bentuk perkhidmatan penyelidikan dan nasihat yang membantu dalam

proses membuat keputusan yang berkaitan dengan pelaburan Dana boleh

disimpan oleh Pengurus. Pengurus menerima komisen bukan tunai daripada

broker dalam bentuk perkhidmatan penyelidikan dan khidmat nasihat bagi

tahun dalam kajian.

Untuk dan bagi pihak Pengurus

BIMB INVESTMENT MANAGEMENT BERHAD

Tarikh: 21 Disember 2017

Nota:

Laporan ini telah diterjemahkan daripada laporan asal (dalam Bahasa

Inggeris). Jika terdapat perbezaan, sila rujuk kepada laporan Bahasa

Inggeris.

24

2.0 Trustee’s Report

CIMB ISLAMIC TRUSTEE BERHAD ANNUAL REPORT

FOR THE FINANCIAL YEAR ENDED 31 OCTOBER 2017

To the unitholders of BIMB i DIVIDEND FUND

We, CIMB Islamic Trustee Berhad being the Trustee of BIMB i Dividend Fund

(“the Fund”) are of the opinion that BIMB Investment Management Berhad (“the

Manager”), acting in the capacity as Manager of the Fund, has fulfilled its duties in

the following manner for the financial year ended 31 October 2017.

1. The Fund has been managed in accordance with the limitations imposed on

the investment powers of the Manager under the Deed, the Securities

Commission Malaysia’s Guidelines on Unit Trust Funds, the Capital Markets

and Services Act 2007 (as amended from time to time) and other applicable

laws;

2. Valuation and pricing for the Fund has been carried out in accordance with the

relevant regulatory requirements;

3. Creation and cancellation of units have been carried out in accordance with

the relevant regulatory requirements; and

4. The distribution of returns by the Fund is relevant and reflect the investment

objective of the Fund.

For and on behalf of CIMB ISLAMIC TRUSTEE BERHAD (Company No. 167913-M)

………………………

LEE KOOI YOKE

Chief Operating Officer

Kuala Lumpur, Malaysia


25

3.0 Shariah Committee’s Report

ANNUAL REPORT


حيم ن ٱلر ـ حم بسم ٱهلل ٱلر

To the Unitholders of BIMB i Dividend Fund

We have acted as the Shariah Committee of BIMB i Dividend Fund.

Our responsibilities are to ensure that the procedures and processes employed by

BIMB Investment Management Berhad and that the provisions of the Deed dated

23 June 2010 and any supplemental deed issued thereafter are in accordance

with Shariah principles.

In our opinion, BIMB Investment Management Berhad has managed BIMB i

Dividend Fund in accordance with Shariah principles and complied with applicable

guidelines, rulings or decisions issued by the Securities Commission pertaining to

Shariah matters for the financial year ended 31 October 2017.

In addition, we also confirm that the investment portfolio of BIMB i Dividend Fund

comprises securities which have been classified as Shariah-compliant by the

Shariah Advisory Council (SAC) of the Securities Commission, as the case may

be and that all deposits and money market instruments placed by the Funds are

Shariah-compliant.

أعلم وهللا For and on behalf of the Shariah Committee

………………………………………………..

USTAZ DR. AHMAD SHAHBARI@SOBRI SALAMON (Chairman)

……………………………………………….. USTAZ DR. YUSOF RAMLI (Committee Member)

……………………………………………….. USTAZAH DR. ASMAK AB. RAHMAN

(Committee Member) Date: 21 December 2017

26

4.0 Directors’ Declaration Report

ANNUAL REPORT


To the Unitholders of


We, Dr. Mohd Hatta Bin Dagap and Najmuddin Bin Mohd Lutfi, being two of the

directors of the Manager, BIMB Investment Management Berhad, for BIMB i

Dividend Fund, do hereby state that in our opinion, the accompanying Statement

of Financial Position, Statement of Profit or Loss and other Comprehensive

Income, Statement of Changes in Net Asset Value and Statement of Cash Flows

are drawn up so as to give true and fair view of the Statement of Financial

Position of the Fund as at 31 October 2017 and Statement of Profit or Loss and

other Comprehensive Income, Statement of Changes in Net Asset Value and

Statement of Cash Flows for the year ended on that date.

For and on behalf on the Board of Directors,

…………………………………

DR. MOHD HATTA BIN DAGAP

(Non Executive Independent Director)

…………………………………

NAJMUDDIN BIN MOHD LUTFI

(Chief Executive Officer)


27

5.0 Independent Auditors’ Report

Independent Auditors’ Report to the Unitholders of BIMB i Dividend Fund

(Established in Malaysia)

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of BIMB i Dividend Fund (“the Fund”),

which comprise the statement of financial position as at 31 October 2017, and the

statement of profit or loss and other comprehensive income, statement of changes

in net asset value and cash flows for the year then ended, and notes to the

financial statements, including a summary of significant accounting policies, as set

out on pages 31 to 58.

In our opinion, the accompanying financial statements give a true and fair view of

the financial position of the Fund as at 31 October 2017, and of its financial

performance and its cash flows for the year then ended in accordance with

Malaysian Financial Reporting Standards, International Financial Reporting

Standards and Securities Commission’s Guidelines on Unit Trust Funds in

Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in

Malaysia and International Standards on Auditing. Our responsibilities under those

standards are further described in the Auditors’ Responsibilities for the Audit of

the Financial Statements section of our report. We believe that the audit evidence

we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Fund in accordance with the By-Laws (on Professional

Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-

Laws”) and the International Ethics Standards Board for Accountants’ Code of

Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our

other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

28

Information Other than the Financial Statements and Auditors’ Report

Thereon

The Manager of the Fund is responsible for the other information. The other

information comprises the information included in the annual report, but does not

include the financial statements of the Fund and our auditors’ report thereon.

Our opinion on the financial statements of the Fund does not cover the annual

report and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Fund, our

responsibility is to read the annual report and, in doing so, consider whether

annual report is materially inconsistent with the financial statements of the Fund or

our knowledge obtained in the audit or otherwise appears to be materially

misstated.

If, based on the work we have performed, we conclude that there is a material

misstatement of the annual report, we are required to report that fact. We have

nothing to report in this regard.

Responsibilities of the Manager and Trustee for the Financial Statements

The Manager of the Fund is responsible for the preparation of financial statements

of the Fund that give a true and fair view in accordance with Malaysian Financial

Reporting Standards, International Financial Reporting Standards and Securities

Commission’s Guidelines on Unit Trust Funds in Malaysia. The Manager is also

responsible for such internal control as the Manager determine is necessary to

enable the preparation of financial statements of the Fund that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements of the Fund, the Manager is responsible for

assessing the ability of the Fund to continue as a going concern, disclosing, as

applicable, matters related to going concern and using the going concern basis of

accounting unless the Manager either intend to liquidate the Fund or to cease

operations, or have no realistic alternative but to do so.

The Trustee is responsible for ensuring that the Manager maintains proper

accounting and other records as necessary to enable true and fair presentations

of these financial statements.

29

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial

statements of the Fund as a whole are free from material misstatement, whether

due to fraud or error, and to issue an auditors’ report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with approved standards on auditing in Malaysia

and International Standards on Auditing will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these

financial statements.

As part of an audit conducted in accordance with approved standards on auditing

in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risk of material misstatement of the financial

statements of the Fund, whether due to fraud or error, design and perform

audit procedures responsive to those risks, and obtain audit evidence that is

sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one

resulting from error, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to

design audit procedures that are appropriate in the circumstances, but not for

the purpose of expressing an opinion on the effectiveness of the Fund’s

internal control.

Evaluate the appropriateness of accounting policies used and the

reasonableness of accounting estimates and related disclosures made by

the Manager.

Conclude on the appropriateness of the Manager’s use of the going concern

basis of accounting and, based on the audit evidence obtained, whether a

material uncertainty exists related to events or conditions that may cast

significant doubt on the ability of the Fund to continue as a going concern. If

we conclude that a material uncertainty exists, we are required to draw

attention in our auditors’ report to the related disclosures in the financial

statements of the Fund or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the

date of our auditors’ report. However, future events or conditions may cause

the Fund to cease to continue as a going concern.

30

Auditors’ Responsibilities for the Audit of the Financial Statements

(continued)

Evaluate the overall presentation, structure and content of the financial

statements of the Fund, including the disclosures, and whether the financial

statements of the Fund represent the underlying transactions and events in a

manner that gives a true and fair view.

We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any

significant deficiencies in internal control that we identify during our audit. Other matter

This report is made solely to the unitholders of the Fund, as a body, in accordance with Securities Commission’s Guidelines on Unit Trust Funds in Malaysia and for

no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG Desa Megat PLT (LLP0010082-LCA & AF 0759)

Chartered Accountants

Adrian Lee Lye Wang Approval Number: 2679/11/2019(J)

Chartered Accountant Petaling Jaya, Selangor


31

6.0 Financial Statements (Audited)

6.1 Statement of Financial Position as at 31 October 2017

Note 2017 2016 RM RM

Assets

Quoted securities 4 169,395,939 176,592,975 Amount due from stockbroker 9,096,720 5,892,351 Amount due from Manager 1,144,615 -

Other receivables 136,641 235,954 Current tax assets - 13,367 Cash and cash equivalents 5 6,446,506 3,452,203

Total assets 186,220,421 186,186,850

Liabilities Amount due to stockbroker 11,483,363 - Amount due to Manager 48,786 2,526,123

Other payables 270,796 286,847 Distribution payables 418,490 221,175

Total liabilities 12,221,435 3,034,145

Net asset value 173,998,986 183,152,705

Unitholders’ fund Unitholders’ capital 6 228,263,244 240,659,900 Accumulated losses (54,264,258) (57,507,195)

Net asset value attributable to unitholders

173,998,986

183,152,705

Number of units in circulation 6 835,418,744 896,618,385

Net asset value per unit - Ex distribution (sen) 20.83 20.43

The notes on pages 35 to 58 are an integral part of these financial statements.

32

6.2 Statement of Profit or Loss and Other Comprehensive Income for the

financial year ended 31 October 2017

Note 2017 2016

RM RM Income Gain on sale of quoted shares 9,688,154 4,045,604

Gross dividends from shares quoted in Malaysia 5,123,095 5,323,214 Income from short term investments 146,030 189,588 Hibah from Al-Wadiah account 1,997 2,362

Net unrealised gain/(loss) from financial instruments at fair value through profit or loss

3,242,807

(14,962,726)

Gross income/(loss) 18,202,083 (5,401,958)

Expenses

Manager’s fee 7 2,589,933 2,854,323 Trustee’s fee 8 103,597 114,173 Audit fee 13,000 11,000

Tax agent’s fee 3,000 3,000 Administrative expenses 241,044 252,240

2,950,574 3,234,736

Net income/(loss) before taxation 15,251,509 (8,636,694) Taxation 9 - -

Net income/(loss) after taxation 15,251,509 (8,636,694)

Other comprehensive income for the year - -

Total comprehensive income/(loss) for the year 15,251,509 (8,636,694)

Total comprehensive income/(loss) for the year

consist of:

Realised amount 12,008,702 6,326,032 Unrealised amount 3,242,807 (14,962,726)

15,251,509 (8,636,694)


33

6.3 Statement of Changes in Net Asset Value for the financial year ended 31

October 2017

Unitholders’

capital

Accumulated

losses

Total Note RM RM RM

As at 1 November 2015 261,202,257 (42,543,367) 218,658,890

Creation of units via cash 58,179,976 - 58,179,976 Reinvestment of distributions 6,105,959 - 6,105,959

Cancellation of units (84,828,292) - (84,828,292) Distributions 12 - (6,327,134) (6,327,134)

Total attributable to unitholders (20,542,357) (6,327,134) (26,869,491) Total comprehensive loss for the year - (8,636,694) (8,636,694)

As at 31 October 2016/ 1 November 2016

240,659,900 (57,507,195) 183,152,705

Creation of units via cash 25,468,429 - 25,468,429 Reinvestment of distributions 11,590,082 - 11,590,082 Cancellation of units (49,455,167) - (49,455,167)

Distributions 12 - (12,008,572) (12,008,572)

Total attributable to unitholders (12,396,656) (12,008,572) (24,405,228)

Total comprehensive income for the year

- 15,251,509 15,251,509

As at 31 October 2017 228,263,244 (54,264,258) 173,998,986


34

6.4 Statement of Cash Flows for the financial year ended 31 October 2017

2017 2016 RM RM

Cash flows from operating activities Proceed from sale of quoted investments 206,200,498 200,337,044 Purchase of quoted investments (177,793,506) (179,647,123)

Dividend received 5,222,956 5,552,334 Income from short term investments 145,483 189,402 Hibah from Al-Wadiah account 1,997 2,362

Management fee paid (2,603,640) (2,883,713) Trustee fee paid (104,145) (115,348) Audit fee paid (11,000) (11,000)

Tax agent fee paid (6,000) (3,000) Payment for administrative expenses (241,840) (257,679)

Cash generated from operations 30,810,803 23,163,279

Tax Refund 13,367 -

Net cash generated operating activities 30,824,170 23,163,279

Cash flows from financing activities Cash receipt for creation of units 24,323,813 58,221,302 Cash payment for cancellation of units (51,932,504) (82,722,849)

Payment of distributions (221,176) (119,119)

Net cash used in financing activities (27,829,867) (24,620,666)

Net increase/(decrease) in cash and cash equivalents 2,994,303 (1,457,387) Cash and cash equivalents at 1 November 3,452,203 4,909,590

Cash and cash equivalents at 31 October 6,446,506 3,452,203

Cash and cash equivalents comprise: Short term placements 5,946,553 2,736,494 Cash at bank 499,953 715,709

6,446,506 3,452,203


35

Notes to the financial statements

1. Information on the Fund

BIMB i Dividend (hereinafter referred to as “the Fund”) was constituted pursuant to

the execution of a Deed dated 23 June 2010 between the Manager - BIMB

Investment Management Berhad, the Trustee - HSBC (Malaysia) Trustee Berhad

and the registered unitholders of the Fund. Effective 1 November 2013, the Trustees

has changed from HSBC (Malaysia) Trustee Berhad to CIMB Islamic Trustees

Berhad. A Supplemental Deed was executed on 23 September 2013 to reflect the

changes.

The principal activity of the Fund is to invest in authorised investments as defined in

the Deed, which include investments in stocks and shares of companies quoted on

Bursa Malaysia, and short term placements.

The Manager, BIMB Investment Management Berhad, a company incorporated in

Malaysia, is a subsidiary of Bank Islam Malaysia Berhad.

The financial statements were approved by the Board of Directors of the Manager

on 21 December 2017.

2. Basis of preparation

(a) Statement of compliance

The financial statements of the Fund have been prepared in accordance with

Malaysian Financial Reporting Standards (“MFRS”), International Financial

Reporting Standards (“IFRS”), the Deed and Securities Commission’s

Guidelines on Unit Trust Funds (“Guidelines”) in Malaysia.

The following are accounting standards, amendments and interpretations that

have been issued by the Malaysian Accounting Standards Board (“MASB”) but

have not been adopted by the Fund:

MFRSs, Interpretations and amendments effective for annual periods

beginning on or after 1 January 2017

Amendments to MFRS 12, Disclosure of Interests in Other Entities (Annual

Improvements to MFRS Standards 2014-2016 Cycle)

Amendments to MFRS 107, Statement of Cash Flows – Disclosure

Initiative

Amendments to MFRS 112, Income Taxes – Recognition of Deferred Tax

Assets for Unrealised Losses

36

2. Basis of preparation (continued)

(a) Statement of compliance (continued)



MFRS 9, Financial Instruments (2014)

MFRS 15, Revenue from Contracts with Customers

Clarifications to MFRS 15, Revenue from Contracts with Customers

IC Interpretation 22, Foreign Currency Transactions and Advance

Consideration

Amendments to MFRS 1, First-time Adoption of Malaysian Financial

Reporting Standards (Annual Improvements to MFRS Standards 2014-

2016 Cycle)

Amendments to MFRS 2, Share-based Payment – Classification and

Measurement of Share-based Payment Transactions

Amendments to MFRS 4, Insurance Contracts – Applying MFRS 9

Financial Instruments with MFRS 4 Insurance Contracts

Amendments to MFRS 128, Investments in Associates and Joint Ventures

(Annual Improvements to MFRS Standards 2014-2016 Cycle)

Amendments to MFRS 140, Investment Property – Transfers of Investment

Property



MFRS 16, Leases

IC Interpretation 23, Uncertainty over Income Tax Treatments

Amendments to MFRS 128, Long-term Interests in Associates and Joint

Ventures

Amendments to MFRS 9, Prepayment Features with Negative

Compensation



MFRS 17, Insurance Contracts

MFRSs, Interpretations and amendments effective for a date yet to be

confirmed

Amendments to MFRS 10, Consolidated Financial Statements and MFRS

128, Investments in Associates and Joint Ventures – Sale or Contribution

of Assets between an Investor and its Associate or Joint Venture

The Fund plans to apply the abovementioned accounting standards,

amendments and interpretations, where applicable:

http://masb.org.my/pdf/MFRS%201%20042015.pdf



37


(a) Statement of compliance (continued)

from the annual period beginning on 1 November 2017 for those

amendments that are effective for annual periods beginning on or after 1

January 2017;

from the annual period beginning on 1 November 2018 for those

accounting standards, amendments and interpretations that are effective

for annual periods beginning on or after 1 January 2018;

from the annual period beginning on 1 November 2019 for the accounting

standard that is effective for annual periods beginning on or after 1

January 2019;

from the annual period beginning on 1 November 2021 for the accounting

standard that is effective for annual periods beginning on or after 1

January 2021.

The initial application of the accounting standards, amendments or

interpretations are not expected to have any material financial impact to the

current year and prior year financial statements of the Fund, except as

mentioned below:

MFRS 15, Revenue from Contracts with Customers

MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS

118, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC

Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation

18, Transfers of Assets from Customers and IC Interpretation 131, Revenue -

Barter Transactions Involving Advertising Services.

MFRS 9, Financial Instruments

MFRS 9 replaces the guidance in MFRS 139, Financial Instruments:

Recognition and Measurement on the classification and measurements of

financial assets and financial liabilities, and on hedge accounting.

MFRS 16, Leases

MFRS 16 replaces the guidance in MFRS 117, Leases, IC Interpretation 4,

Determining whether an Arrangement contains a Lease, IC Interpretation 115,

Operating Leases – Incentives and IC Interpretation 127, Evaluating the

Substance of Transactions Involving the Legal Form of a Lease.

The Fund is currently assessing the financial impact that may arise from the

adoption of MFRS 15, MFRS 9 and MFRS 16.

38


(b) Basis of measurement

The financial statements are prepared on the historical cost basis except as

disclosed in Note 3(a)(ii).

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is

the Fund’s functional currency.

(d) Use of estimates and judgements

The preparation of financial statements in conformity with MFRSs requires

management to make judgements, estimates and assumptions that affect the

application of accounting policies and the reported amounts of assets, liabilities,

income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognised in the period in which the

estimate is revised and in any future years affected.

There are no significant areas of estimation uncertainty and critical judgements

in applying accounting policies that have significant effect on the amounts

recognised in the financial statements.

3. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods

presented in these financial statements, unless otherwise stated.

(a) Financial instruments

(i) Initial recognition and measurement

A financial instrument is recognised in the statement of financial position

when, and only when, the Fund becomes a party to the contractual

provisions of the instrument.

A financial instrument is recognised initially, at its fair value plus, in the

case of a financial instrument not at fair value through profit or loss,

transaction costs that are directly attributable to the acquisition or issue of

the financial instrument.

(ii) Financial instrument categories and subsequent measurement

The Fund categorises financial instruments as follows:

39

3. Significant accounting policies (continued)

(a) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement (continued)

Financial assets

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

Fair value through profit or loss category comprises financial assets

that are held for trading, or financial assets that are specifically

designated into this category upon initial recognition.

Financial assets categorised as fair value through profit or loss are

subsequently measured at their fair values with the gain or loss

recognised in the statement of profit or loss.

(b) Financing and receivables

Financing and receivables category are debt instruments that are not

quoted in an active market and these comprises of amount due from

stockbroker, Manager, other receivables, cash and cash equivalents

and short term investments.

Financial assets categorised as financing and receivables are

subsequently measured at amortised cost using the effective profit

method.

All financial assets except for those measured at fair value through profit

or loss, are subject to review for impairment, Note 3(d).

Financial liabilities

Financial liabilities measured at amortised cost comprises of amount due

to stockbroker, Manager, other payables and distribution payable.

(iii) Derecognition

A financial asset or part of it is derecognised when, and only when, the

contractual rights to the cash flows from the financial asset expire or the

financial asset is transferred to another party without retaining control or

substantially all risks and rewards of the asset. On derecognition of a

financial asset, the difference between the carrying amount and the sum of

the consideration received (including any new asset obtained less any

new liability assumed) and any cumulative gain or loss that had been

recognised in equity is recognised in profit or loss.

40


(a) Financial instruments (continued)

(iii) Derecognition (continued)

A financial liability or a part of it is derecognised when, and only when, the

obligation specified in the contract is discharged or cancelled or expires.

On derecognition of a financial liability, the difference between the carrying

amount of the financial liability extinguished or transferred to another party

and the consideration paid, including any non-cash assets transferred or

liabilities assumed, is recognised in profit or loss.

(b) Income recognition

(i) Dividend income

Dividend income is recognised in profit or loss on the date that the Fund’s

right to receive payment is established, which in the case of quoted shares

is the entitlement date.

(ii) Income from short term investments

Income from short term investments is recognised as it accrues, using the

effective profit method in profit or loss.

(iii) Gain on sale of investments

The realised gain on sale of investments is measured as the difference

between the net disposal proceeds and the carrying amount of the

investments. The carrying amount for determining the realised gain on sale

of investments is based on the weighted average cost method and where

applicable adjusted for accretion for discount and amortisation of premium.

(c) Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and short term placements

with licensed financial institutions which have insignificant risk of changes in

fair value with original maturities of less than 30 days, and are used by the

Fund in the management of its short term commitments.

Cash and cash equivalents are categorised and measured as financing and

receivables in accordance with policy Note 3(a)(ii)(b).

41


(d) Impairment

Financial assets

All financial assets (except for financial assets categorised as fair value through

profit or loss) are assessed at each reporting date whether there is any

objective evidence of impairment as a result of one or more events having an

impact on the estimated future cash flows of the asset. Losses expected as a

result of future events, no matter how likely, are not recognised.

An impairment loss in respect of financing and receivables is recognised in

profit or loss and is measured as the difference between the asset’s carrying

amount and the present value of estimated future cash flows discounted at the

asset’s original effective profit rate. The carrying amount of the asset is

reduced through the use of an allowance account.

(e) Income tax

Income tax expense comprises current tax. Current tax is recognised in profit or

loss except to the extent that it relates to items recognised directly in equity or

other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income for

the year, using tax rates enacted or substantively enacted at the statement of

financial position date, and any adjustment to tax payable in respect of previous

years.

(f) Unitholders’ capital

The Fund issues cancellable units, which are cancelled at the unitholder’s

option and are classified as equity. Cancellable units can be put back to the

Fund at any time for cash equal to a proportionate share of the Fund’s net asset

value. The outstanding units is carried at the redemption amount that is payable

at the financial position date if the unitholder exercises the right to put the unit

back to the Fund.

Units are created and cancelled at the unitholder’s option at prices based on the

Fund’s net asset value per unit at the time of creation or cancellation. The

Fund’s net asset value per unit is calculated by dividing the net asset

attributable to unitholders with the total number of outstanding units. In

accordance with the Securities Commission’s Guidelines on Unit Trust Funds in

Malaysia, investment positions are valued based on the last traded market price

for the purpose of determining the net asset value per unit for creations and

cancellations.

42


(f) Unitholders’ capital (continued)

The units in the Fund are puttable instruments, classified as equity, which entitle

the unitholders to a pro-rata share of the net asset of the Fund. The units are

subordinated and have identical features. There is no contractual obligation to

deliver cash or another financial asset other than the obligation on the Fund to

repurchase the units. The total expected cash flows from the units are based on

the change in the net asset of the Fund.

(g) Distribution

Distribution is at the discretion of the Fund. A distribution to the Fund’s

unitholders is accounted for as a deduction from realised reserves. A proposed

distribution is recognised as a liability or equity in the year in which they are

declared.

(h) Net Asset Value

The Net Asset Value is calculated after deducting the retained profits allocated

for distribution.

(i) Fair value measurement

The Fund adopted MFRS 13, Fair Value Measurement which prescribed that

fair value of an asset or a liability, except for share-based payment and lease

transactions, is determined as the price that would be received to sell an asset

or paid to transfer a liability in an orderly transaction between market

participants at the measurement date. The measurement assumes that the

transaction to sell the asset or transfer the liability takes place either in the

principal market or in the absence of a principal market, in the most

advantageous market.

For non-financial asset, the fair value measurement takes into account a

market participant’s ability to generate economic benefits by using the asset in

its highest and best use or by selling it to another market participant that would

use the asset in its highest and best use.

When measuring the fair value of an asset or a liability, the Fund uses

observable market data as far as possible. Fair value are categorised into

different levels in a fair value hierarchy based on the input used in the valuation

technique as follows:

43


(i) Fair value measurement (continued)

Level 1: quoted prices (unadjusted) in active markets for identical assets

or liabilities that the Fund can access at the measurement date.

Level 2: inputs other than quoted prices included within Level 1 that are

observable for the asset or liability, either directly or indirectly.

Level 3: unobservable inputs for the asset or liability.

The Fund recognises transfers between levels of the fair value hierarchy as of

the date of the event or change in circumstances that caused the transfers.

44

4. Quoted securities

As at 31 October 2017

Company’s Name

Number of shares

held

Cost

RM

Market value

RM

Percentage

of value of funds at

2017

% Main Market

(i) Construction Mudajaya Group Bhd. 1,814,400 4,716,475 2,177,280 1.25

(ii) Consumer products

Bonia Corporation Bhd. 1,702,700 1,874,114 1,123,782 0.64

Power Root Bhd. 300,000 645,105 630,000 0.36 UMW Holdings Bhd. 384,000 4,528,147 2,012,160 1.16

2,386,700 7,047,366 3,765,942 2.16

(iii) Industrial products

Boon Koon Group Bhd. 7,152,000 4,024,650 3,719,040 2.14 Coastal Contracts Bhd. 206,000 621,772 261,620 0.15 Evergreen Fibreboard Bhd. 5,550,000 6,205,225 4,273,500 2.46

Hartalega Holdings Bhd. 500,000 3,414,510 3,810,000 2.19 Hengyuan Refining

Company Bhd. (formerly

known as Shell Refining Company Bhd.) * 60,000 622,991 508,200 0.29

Heveaboard Bhd. 2,900,000 4,567,767 4,843,000 2.78

Jaya Tiasa Holdings Bhd. 2,518,000 4,024,818 2,946,060 1.69 Kossan Rubber Industries

Bhd. 180,000 1,302,997 1,299,600 0.75

Mieco Chipboard Bhd. 256,000 311,218 302,080 0.17 Seacera Group Bhd. 1,815,000 2,498,855 1,615,350 0.93 SKP Resources Bhd. 950,000 1,516,135 1,681,500 0.97

Supermax Corporation Bhd. 980,000 2,469,161 1,734,600 1.00

Ta Ann Holdings Bhd. 1,259,500 5,054,399 4,647,555 2.67

Top Glove Corporation Bhd. 700,000 4,395,247 4,480,000 2.57

Versatile Creative Bhd. 2,100,000 1,770,584 1,963,500 1.13

V.S Industry Bhd. 1,000,000 2,459,393 3,080,000 1.77 WTK Holdings Bhd. 3,064,000 4,504,392 2,481,840 1.43

31,190,500 49,764,114 43,647,445 25.09

(iv) Infrastructure

DiGi.Com Bhd. 2,354,000 14,124,979 11,770,000 6.76 YTL Power International Bhd.* 270,963 543,915 352,252 0.20

2,624,963 14,668,894 12,122,252 6.96

45

4. Quoted securities (continued)

As at 31 October 2017 Company’s Name

Number of shares

held Cost

RM

Market value

RM

Percentage of value

of funds at 2017

%

Main Market (continued)

(v) Plantation Felda Global Ventures

Holdings Bhd 1,400,000 2,957,419 2,674,000 1.54

Hap Seng Plantation Holdings Bhd. 1,569,100 4,405,243 4,189,497 2.41

2,969,100 7,362,662 6,863,497 3.95

(vi) Properties

Glomac Bhd. 2,656,600 3,108,246 1,740,073 1.00 UEM Sunrise Bhd. 2,445,500 6,264,057 2,714,505 1.56 Yong Tai Bhd. 500,000 822,759 805,000 0.46

5,602,100 10,195,062 5,259,578 3.02

(vii) Technology Dagang Nexchange Bhd. 14,890,000 7,339,086 7,221,650 4.15 Elsoft Research Bhd. 800,000 2,143,407 2,072,000 1.19

GHL Systems Bhd. 1,000,000 1,715,706 1,570,000 0.90 Globetronics Technology

Bhd. 405,000 2,585,968 2,668,950 1.53

Inari Amerton Bhd. 560,000 1,347,260 1,573,600 0.91 JHM Consolidation Bhd. 771,000 2,315,069 2,297,580 1.32 Malaysian Pacific Industries

Bhd. 140,000 1,545,501 1,948,800 1.12 Notion Vtec Bhd. 1,630,000 1,851,182 1,165,450 0.67 Pentamaster Corporation

Bhd. 150,000 732,016 717,000 0.41 Perak Transit Bhd. 14,500,000 4,441,560 4,640,000 2.67 Unisem (M) Bhd. 1,000,000 3,901,763 4,000,000 2.30

Vitrox Corporation Bhd. 350,000 1,615,450 1,760,500 1.01 Vivocom Intl Holdings Bhd. 11,790,000 2,982,702 1,650,600 0.95

47,986,000 34,516,670 33,286,130 19.13

46



Number of shares

held Cost

RM

Market value

RM

Percentage of value

of funds at 2017

%


(viii) Trading and services Axiata Group Bhd. 2,194,815 15,208,810 11,830,053 6.80 Brahims Holdings Bhd. 1,919,800 2,759,783 1,036,692 0.60

Dayang Enterprise Holdings Bhd. 1,198,000 3,808,341 1,036,270 0.60

E.A Technique (M) Bhd. 1,394,100 1,768,470 676,139 0.39

Malakoff Corporation Bhd. 2,914,100 5,255,219 3,001,523 1.73 Maxis Bhd. 1,465,500 10,027,594 8,719,725 5.01 Media Chinese

International Limited. 3,810,300 5,110,622 1,638,429 0.94 My E.G. Services Bhd. 2,700,000 5,933,969 5,913,000 3.40 Parkson Holdings Bhd. 1,652,585 4,537,676 1,074,180 0.62

Pos Malaysia Bhd. 150,000 825,563 823,500 0.47 Salutica Bhd. 360,000 534,671 529,200 0.30 Sapura Energy Bhd. 1,422,100 5,476,762 2,275,360 1.31

Star Media Group Bhd. 1,814,100 5,325,310 3,065,829 1.76 Taliworks Corporation Bhd. 400,000 605,828 500,000 0.29 Telekom Malaysia Bhd. 1,560,187 11,094,884 9,907,187 5.69

TH Heavy Engineering Bhd.** 6,412,000 5,200,259 737,380 0.42 UMW Oil & Gas

Corporation Bhd. 1,514,870 4,524,538 484,758 0.28 Xin Hwa Holdings Bhd. 6,051,000 7,049,458 7,261,200 4.17

38,933,457 95,047,757 60,510,425 34.78

(ix) Warrant

Mah Sing Group Bhd. - Warrant B 1,103,896 430,812 110,390 0.06

Perak Transit Bhd.

- Warrant A 8,700,000 - 1,653,000 0.95

9,803,896 430,812 1,763,390 1.01

Total portfolio investment as at 31 October 2017 223,749,812 169,395,939 97.35

* YTL Power International Bhd. and Hengyuan Refining Company Bhd. (formerly

known as Shell Refining Company Bhd.) had been reclassified as Shariah non-

compliant securities by the Shariah Advisory Council (SAC) of the Securities

Commission on 29 November 2013 and 28 November 2014 respectively. Holding

or disposal of the securities will be made in accordance with the SAC guidance.

** The Fund holds investments in companies which are related to the Manager.

47



Number of shares

held Cost

RM

Market value

RM

Percentage of value

of funds at 2016

%

Main Market (i) Construction

Mudajaya Group Bhd. 1,814,400 4,716,475 1,759,968 0.96 WCT Holdings Bhd. 2,073,616 4,273,072 3,525,147 1.92

3,888,016 8,989,547 5,285,115 2.88

(ii) Consumer products

Bonia Corporation Bhd. 1,629,700 1,829,418 1,010,414 0.55 Fraser & Neave Holdings

Bhd. 80,000 2,070,743 1,958,400 1.07

Kawan Food Bhd. 615,100 2,243,073 2,331,229 1.27 UMW Holdings Bhd. 384,000 4,694,459 2,288,640 1.25

2,708,800 10,837,693 7,588,683 4.14

(iii) Finance

BIMB Holdings Bhd.** 1,107,100 4,881,356 4,871,240 2.66

(iv) Industrial products Coastal Contracts Bhd. 206,000 621,772 315,180 0.17 Evergreen Fibreboard Bhd. 5,265,000 5,954,750 5,528,250 3.02

Hartalega Holdings Bhd. 405,000 2,257,853 1,984,500 1.08 Jaya Tiasa Holdings Bhd. 2,434,000 3,906,573 3,383,260 1.85 Kossan Rubber Industries

Bhd. 816,300 5,604,608 5,510,025 3.01 Petronas Chemicals Group

Bhd. 462,000 3,398,899 3,234,000 1.77

Hengyuan Refining Company Bhd. (formerly known as Shell Refining

Company Bhd.) * 60,000 622,991 183,000 0.10 SKP Resources Bhd. 1,072,000 1,540,114 1,447,200 0.79 Supermax Corporation

Bhd. 749,000 1,987,670 1,625,330 0.89 Ta Ann Holdings Bhd. 556,400 2,364,972 1,964,092 1.07 Top Glove Corporation

Bhd. 834,000 5,344,074 4,128,300 2.25 WTK Holdings Bhd. 3,064,000 4,504,393 3,309,120 1.81

15,923,700 38,108,669 32,612,257 17.81

48


As at 31 October 2016

Company’s Name

Number of shares

held

Cost

RM

Market value

RM

Percentage

of value of funds at

2016

%


(v) Infrastructure

DiGi.Com Bhd. 2,354,000 14,124,979 11,840,620 6.46

YTL Power International Bhd.* 265,650 543,914 406,445 0.22

2,619,650 14,668,893 12,247,065 6.68

(vi) Plantation

Hap Seng Plantation Holdings Bhd. 1,569,100 4,405,243 3,797,222 2.07

(vii) Properties Glomac Bhd. 2,656,600 3,108,246 2,045,582 1.12 Matrix Concepts Holdings

Bhd. 929,833 2,604,718 2,408,267 1.31 S P Setia Bhd. 1,179,700 4,328,472 4,128,950 2.25 Sunway Bhd. 5,510,000 19,363,776 17,191,200 9.39

UEM Sunrise Bhd. 2,445,500 6,264,057 2,738,960 1.50

12,721,633 35,669,269 28,512,959 15.57

(viii) Technology

Globetronics Technology

Bhd. 573,000 3,437,836 2,091,450 1.14 Inari Amerton Bhd. 407,400 1,357,046 1,364,790 0.75 Malaysian Pacific Industries

Bhd. 578,800 4,826,101 4,578,308 2.50 Unisem (M) Bhd. 2,874,100 7,715,642 7,328,955 4.00 Vivocom Intl Holdings Bhd. 11,790,000 2,982,702 1,945,350 1.06

16,223,300 20,319,327 17,308,853 9.45

49



Number of shares held

Cost RM

Market value

RM

Percentage of value

of funds at 2016

%


(ix) Trading and services Axiata Group Bhd. 2,194,815 15,208,810 10,798,490 5.89 Brahims Holdings Bhd. 1,919,800 2,759,783 1,430,251 0.78

Dayang Enterprise Holdings Bhd. 1,198,000 3,808,341 1,030,280 0.56

E.A Technique (M) Bhd. 1,394,100 1,768,470 1,024,664 0.56

Malakoff Corporation Bhd. 2,914,100 5,255,219 4,516,855 2.47 Maxis Bhd. 1,465,500 10,027,594 8,734,380 4.77 Media Chinese

International Limited. 3,810,300 5,110,622 2,610,055 1.43 Parkson Holdings Bhd. 1,652,585 4,537,676 1,247,702 0.68 Petronas Dagangan Bhd. 124,500 3,145,051 2,908,320 1.59

Sapura Kencana Petroleum Bhd. 1,422,100 5,476,762 2,303,802 1.26

Sime Darby Bhd. 1,285,186 12,080,414 10,525,673 5.75

Star Media Group Bhd. 1,814,100 5,325,310 4,571,532 2.50 Telekom Malaysia Bhd. 1,560,187 11,094,884 10,203,623 5.57 TH Heavy Engineering

Bhd.** 6,412,000 5,200,259 929,740 0.51 UMW Oil & Gas

Corporation Bhd. 1,291,100 4,853,668 1,097,435 0.60

30,458,373 95,652,863 63,932,802 34.92

(x) Warrant LBS Bina Group Bhd. - Warrant A 300,000 225,983 216,000 0.12

Mah Sing Group Bhd. - Warrant B 1,103,896 430,812 220,779 0.12

1,403,896 656,795 436,779 0.24

Total portfolio investment as at 31 October 2016 234,189,655 176,592,975 96.42

* YTL Power International Bhd. and Hengyuan Refining Company Bhd. (formerly

known as Shell Refining Company Bhd.) had been reclassified as Shariah non-

compliant securities by the Shariah Advisory Council (SAC) of the Securities

Commission on 29 November 2013 and 28 November 2014 respectively.

Holding or disposal of the securities will be made in accordance with the SAC

guidance.

** The Fund holds investments in companies which are related to the Manager.

50

5. Cash and cash equivalents

2017 2016 RM RM Short term investments with maturity less than 30 days

Commodity Murabahah 2,614,461 2,736,494

Wafiyah Investment Account* 3,332,092 -

5,946,553 2,736,494 Cash at bank 499,953 715,709

6,446,506 3,452,203

* Wafiyah Investment Account is placed with the holding company of the

Manager, Bank Islam Malaysia Berhad.

6. Unitholders’ capital

No of units RM

1 November 2015 988,832,925 261,202,257 Creation of units 298,254,665 64,285,935 Cancellation of units (390,469,205) (84,828,292)

As at 31 October 2016/ 1 November 2016 896,618,385 240,659,900 Creation of units 175,840,518 37,058,511 Cancellation of units (237,040,159) (49,455,167)

As at 31 October 2017 835,418,744 228,263,244

7. Manager’s fee

The manager’s fee payable to the Manager is based on 1.50% (2016: 1.50%) per

annum of the net asset value of the Fund calculated on a daily basis.

8. Trustee’s fee

The trustee’s fee payable to the trustee is based on 0.06% (2016: 0.06%) per annum

of the net asset value of the Fund calculated on a daily basis.

9. Taxation

2017 2016 RM RM Taxation

- Current year - -

Reconciliation of effective tax expense

Net income/(loss) before taxation 15,251,509 (8,636,694)

Income tax using Malaysian tax rate @ 24% 3,660,362 (2,072,807) Non-assessable income (4,368,500) (2,294,584) Non-deductible expenses 25,583 3,619,176

Restrictions on the tax deductible expenses for unit trust funds

682,555

748,215

- -

51

10. Units held by related party

The number and value of units held legally or beneficially by a related party of the

Manager is as follows:

2017 2016

Units RM Units RM BIMB Investment Management

Berhad 400

83

400

82

11. Transactions with related parties

Other than as disclosed in Note 4, 5 and 10 of the financial statements, other

transaction with related parties are as follows:

Transactions as at Balance as at 2017 2016 2017 2016

RM RM RM RM The Manager BIMB Investment Management

Berhad - Amount due from Manager - - 1,144,615 - - Amount due to Manager - - (48,786) (2,526,123)

- Management fee 2,589,933 2,854,323 (226,252) (239,183)

Holding company of the Manager Bank Islam Malaysia Berhad

- Income from short term

placement (114,071) (55,799) 1,158 -

Related company of the Manager BIMB Securities Sdn. Bhd.

- Sales 35,244,153 11,230,563 5,131,466 -

- Purchase 13,648,809 15,400,080 - - - Brokerage fee 154,159 79,931 14,209 -

The Trustee CIMB Islamic Trustee Berhad

- Trustee fee 103,597 114,173 (9,050) (9,567)

52

12. Distribution

2017 2016 RM RM

Distribution to unitholders is from the following sources:

Gain on sale of quoted shares 9,688,154 4,045,604

Gross dividends from shares quoted in Malaysia 5,123,095 5,323,214 Income from short term investments 146,030 189,588 Previous years undistributed income (129) 1,102

Hibah from Al-Wadiah account 1,997 2,362

14,959,147 9,561,870 Less:

Expenses (2,950,575) (3,234,736) Tax expense - -

Net distribution 12,008,572 6,327,134

The Manager has declared a net distribution of 1.54 sen (2016: 0.73 sen) per unit

based on units in circulation as at date of distribution amounting to RM12,008,572

(2016: RM6,327,134) in respect of the current financial year.

13. Transactions with related and other stockbroking companies

Value of

trade

Percentage

of total trade

%

Brokerage fee

Percentage of total

brokerage fee % 2017 RM RM

RHB Investment Bank Bhd. 70,925,743 17.79 193,584 16.40 TA Securities Holdings Bhd. 56,916,324 14.27 162,230 13.74

BIMB Securities Sdn. Bhd.* 52,168,699 13.08 154,159 13.06 Maybank Investment Bank Bhd. 40,896,383 10.26 120,822 10.24

CIMB Investment Bank Bhd. 27,141,741 6.81 77,545 6.57 Public Investment Bank Bhd. 26,399,130 6.62 82,878 7.02 Macquarie Capital Securities

(Malaysia) Sdn. Bhd. 26,163,441 6.56 82,881 7.02 MIDF Amanah Investment

Bank Bhd. 25,840,478 6.48 77,021 6.53

Hong Leong Investment Bank Bhd. 24,287,401 6.09 75,806 6.42

KAF Seagroatt & Campbell

Securities Sdn. Bhd. 16,789,881 4.21 53,625 4.54 Others 31,237,536 7.83 99,797 8.46

398,766,757 100.00 1,180,348 100.00

53

13. Transactions with related and other stockbroking companies (continued)

Value of

trade

Percentage

of total trade

%

Brokerage

fee

Percentage of total

brokerage fee % 2016 RM RM

RHB Investment Bank Bhd. 80,103,748 22.21 226,027 21.27 Maybank Investment Bank

Bhd. 47,342,986 13.13 139,685 13.15 CIMB Investment Bank Bhd. 41,825,059 11.60 125,497 11.81 Kenanga Investment Bank Bhd. 32,412,516 8.99 88,700 8.35

Hong Leong Investment Bank Bhd. 29,359,838 8.14 89,853 8.46

BIMB Securities Sdn. Bhd.* 26,630,643 7.38 79,931 7.52

Macquarie Capital Securities (Malaysia) Sdn. Bhd. 23,904,232 6.63 73,497 6.92 TA Securities Holdings Bhd. 22,350,744 6.20 69,041 6.50

Public Investment Bank Bhd. 18,069,155 5.01 54,852 5.16 AmInvestment Bank Bhd. 17,406,510 4.83 52,418 4.93 Others 21,221,570 5.88 63,070 5.93

360,627,001 100.00 1,062,571 100.00

* Transactions with the related party have been entered into in the normal course

of business and have been transacted at arm’s length basis.

14. Management Expense Ratio (“MER”)

The management expense ratio for the financial year is 1.71% (2016: 1.70%).

Management expense ratio is the ratio of total fees and recovered expenses of the

Fund expressed as a percentage of the Fund’s average net asset value. It is a total

management expenses expressed as an annual percentage of the Fund’s average

net asset value.

15. Portfolio Turnover Ratio (“PTR”)

The portfolio turnover ratio for the financial year is 1.13 times (2016: 0.95 times). It

represents the average of total acquisitions and disposals of the investments in the

Fund for the financial year over the average net asset value of the Fund calculated

on a daily basis.

54

16. Financial instruments

16.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as

follows:

(a) Financing and receivables (“F&R”);

(b) Fair value through profit or loss (“FVTPL”);

(c) Financial liabilities measured at amortised cost (“FL”).

Carrying amount

F&R/ (FL)

FVTPL

RM RM RM

2017 Financial assets Quoted securities 169,395,939 - 169,395,939

Other receivables 10,377,976 10,377,976 - Cash and cash equivalents 6,446,506 6,446,506 -

186,220,421 16,824,482 169,395,939

Financial liabilities

Other payables (11,802,945) (11,802,945) - Distribution payable (418,490) (418,490) -

(12,221,435) (12,221,435) -

2016

Carrying

amount RM

F&R/

(FL) RM

FVTPL RM

Financial assets Quoted securities 176,592,975 - 176,592,975 Other receivables 6,128,305 6,128,305 -

Cash and cash equivalents 3,452,203 3,452,203 -

186,173,483 9,580,508 176,592,975

Financial liabilities Other payables (2,812,970) (2,812,970) -

Distribution payable (221,175) (221,175) -

(3,034,145) (3,034,145) -

16.2 Net gains and losses arising from financial instruments

2017 2016 RM RM

Net gains/(losses) on: Fair value through profit or loss: - Designated upon initial recognition Realised profit 14,811,249 9,368,818

Unrealised profit/(loss) 3,242,807 (14,962,726) Financing and receivables 148,027 191,950

18,202,083 (5,401,958)

55

16. Financial instruments (continued)

16.3 Financial risk management

The Fund has exposure to the following risks from its use of financial

instruments:

Credit risk

Liquidity risk

Market risk

Investment risk

16.4 Credit risk

Credit risk is the risk of a financial loss to the Fund if counterparty to a

financial instrument fails to meet its contractual obligations. The Fund’s

exposure to credit risk arises principally from its investment securities,

receivables and cash and cash equivalents.

Risk management objectives, policies and processes for managing the risk

The Manager manages the credit risk by setting counterparty limits and

undertaking credit evaluation to minimise the risk. The exposure to credit risk

is monitored on an ongoing basis.

Exposure to credit risk

The Fund’s maximum credit risk exposure at the reporting date is

represented by the respective carrying amounts of the relevant financial

assets in the statement of financial position.

No financial assets carried at amortised cost were past due or impaired as at

date of statement of financial position.

16.5 Liquidity risk

Liquidity risk is the risk that the Fund will not be able to meet its financial

obligations as they fall due. The Fund’s exposure to liquidity risk arises

principally from its various payables which are due within one year.

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

Trustee, to meet anticipated payments and cancellation of units by

unitholders. Liquid assets comprise cash and other instruments, which are

capable of being converted into cash within 7 days.

56


16.6 Market risk

Market risk is the risk that changes in market prices, such as profit rates and

market prices will affect the Fund’s financial position or cash flows.

Profit rate risk

The profit rate profile of the Fund’s significant profit-bearing financial

instruments, based on carrying amounts as at the end of reporting period

was:

Effective profit rate

per annum 2017

Effective profit rate

per annum 2016

% RM % RM Fixed rate instruments Cash and cash equivalents

- Short term investments with maturity less than 30 days

3.00-3.20

5,946,553

2.97

2,736,494

Fair value sensitivity analysis for fixed rate instruments

The Fund accounts for the deposits with licensed financial institutions at

amortised cost. Therefore a change in profit rates at the end of the reporting

year would not affect profit or loss. The deposits with licensed financial

institutions will mature within 1 month from the date of financial position.

Market price risk

Equity price risk arises from the Fund’s investments in quoted securities.


The Fund is restricted to invest in securities issued by any issuer of not more

than 10% of its net asset value. Under such restriction, the exposure risk to

the securities of any issuer is mitigated.

Equity price risk sensitivity analysis

This analysis assumes that all other variables remain constant and the

Fund’s equity investments are positively correlated to each other.

A 10% (2016: 10%) strengthening in the equity prices at the end of the

reporting year would have increased the net asset value and unitholders’

fund by RM16,939,594 (2016: RM17,659,298). A 10% weakening in equity

prices would have had equal but opposite effect on the net asset value and

unitholders’ fund respectively.

57


16.7 Investment risk

Investments are bound by Deed and prospectus that govern the maximum

securities holdings and maximum liquid assets holdings.

Investment risks for equity funds consist primarily of market risk, specific

stock risk and liquidity risk. The mechanism employed to control investment

risk for equity funds is by placing acceptable stock limits.


The Manager has written policies and guidelines on risk management, which

set out the overall investment risks strategies and general risk management

philosophies. These processes monitor, measure and control risks

associated with the business. Matters relating to investment risks in respect

of Funds portfolio are discussed during the Investment Committee meetings

of the Manager held at least 6 (2016: 5) times a year.

16.8 Fair value of financial instruments

The carrying amounts of cash and cash equivalents, short term receivables and

payables approximate fair values due to the relatively short term nature of these

financial instruments.

The table below analyses financial instruments carried at fair value and carrying

amounts shown in the statement of financial position.

Fair value of financial instruments carried at

fair value

Carrying

Level 1 Level 2 Level 3 Total amount

RM RM RM RM RM

2017

Financial assets

Quoted securities 169,395,939 - - 169,395,939 169,395,939

2016

Financial assets

Quoted securities 176,592,975 - - 176,592,975 176,592,975

Policy on transfer between levels

The fair value of an asset to be transferred between levels is determined as of

the date of the event or change in circumstances that caused the transfer.

58


16.8 Fair value of financial instruments (continued)

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for

identical financial assets or liabilities that the entity can access at the

measurement date.

Quoted equities

Quoted equities in Malaysia are valued at a closing market price quoted on the

Bursa Malaysia at the date of the statement of financial position, in accordance

with the Deed. Unrealised gain or loss is taken to statement of profit or loss and

other comprehensive income.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included

within Level 1 that are observable for the financial assets or liabilities, either

directly or indirectly.

Transfers between Level 1 and Level 2 fair values

There has been no transfer between Level 1 and 2 fair values during the

financial year (2016: no transfer in either direction).

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the financial assets

and liabilities.

17. Capital management

The Fund’s capital is represented by the unitholders’ fund in the statement of

financial position. The Manager of the Fund monitors the adequacy of capital on an

ongoing basis. There is no external capital requirement imposed on the Fund.

59

7.0 Corporate Directory

Manager BIMB Investment Management Berhad

Registered Office

Level 32, Menara Bank Islam, No. 22, Jalan Perak

50450, Kuala Lumpur

Business Office

Level 19, Menara Bank Islam, No. 22, Jalan Perak

50450, Kuala Lumpur

Board of

Directors

Nik Mohd Hasyudeen Yusoff (Chairman – Non-Executive

Independent Director – Appointed w.e.f. 13 September 2017)

Khairul Kamarudin (Chairman – Non-Executive Non Independent

Director – Resigned w.e.f. 13 September 2017)

Dato’ Ghazali Awang (Non-Executive Independent Director)

Datuk Noripah Kamso (Non-Executive Independent Director)

Dr. Mohd Hatta Dagap (Non-Executive Independent Director)

Malkiat Singh @ Malkit Singh Maan (Non-Executive Non

Independent Director)

Najmuddin Mohd Lutfi (Chief Executive Officer)

Shariah

Committee

Ustaz Dr. Ahmad Shahbari @ Sobri Salamon

Ustaz Dr. Yusof Ramli

Ustazah Dr. Asmak Ab. Rahman

Investment

Committee

Khairul Muzamel Perera Abdullah (Chairman – Non Independent

Member)

Datuk Noripah Kamso (Independent Member)

Dato’ Darawati Hussain (Independent Member)

Audit Committee Dato’ Ghazali Awang (Chairman – Independent Member)

Dr. Mohd Hatta Dagap (Independent Member)

Malkiat Singh @ Malkit Singh Maan (Non Independent Member)

Company

Secretary

Aidil Haznul Zulkifli (MACS 01638)

Level 32, Menara Bank Islam, No.22 Jalan Perak,

50450 Kuala Lumpur

Norhidayati Mohamat Salim (MIA 27364)

Level 32, Menara Bank Islam, No. 22, Jalan Perak 50450, Kuala

Lumpur

60

Key

Management

Najmuddin Mohd Lutfi (Chief Executive Officer)

Badrol Ahmad Fathan (Head of Investment)

Mohd Hamidullah Che Hassan (Manager, Compliance)

Noor Rose Mona Aziz (Head of Finance and Operations)

Principal Banker CIMB Islamic Bank Berhad

P. Ramlee Branch, Lot 1-01

Menara Hap Seng

Jalan P.Ramlee

Kuala Lumpur

Trustee CIMB Islamic Trustee Berhad (167913-M)

Level 21, Menara CIMB,

Jalan Stesen Sentral 2,

Kuala Lumpur Sentral,

50470 Kuala Lumpur.

Auditors KPMG Desa Megat PLT (LLP0010082-LCA & AF 0759)

Level 10, KPMG Tower

8, First Avenue, Bandar Utama

47800 Petaling Jaya, Selangor

Federation of

Investment

Managers

Malaysia (FIMM)

19-06-1, 6th Floor, Wisma Tune

No.19, Lorong Dungun

Damansara Heights

50490 Kuala Lumpur

Distributors Bank Islam Malaysia Berhad Branches

IFast Capital Sdn Bhd

Phillip Mutual Berhad

Johor Bharu Agency Office

Bank Simpanan Nasional

Registered Unit Trust Consultant with BIMB Investment

Management Berhad

Toll Free Number: 1-800-88-1196

ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 … · 4 1.2 Performance for the Financial Year Ended...

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Transcript of ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 … · 4 1.2 Performance for the Financial Year Ended...