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Annual Report for

31 March 2017

AmCash Management

AmCash Management

TRUST DIRECTORY

Manager

AmFunds Management Berhad

9th & 10

th Floor, Bangunan AmBank Group

55 Jalan Raja Chulan

50200 Kuala Lumpur

Board of Directors

Raja Teh Maimunah Raja Abdul Aziz

Mustafa Mohd Nor

Tai Terk Lin

Datin Maznah Mahbob

Sum Leng Kuang

Investment Committee

Sum Leng Kuang

Tai Terk Lin

Mustafa Mohd Nor

Zainal Abidin Mohd Kassim

Datin Maznah Mahbob

Trustee

HSBC (Malaysia) Trustee Berhad

Auditors and Reporting Accountants

Ernst & Young

Taxation Adviser

Deloitte Tax Services Sdn Bhd

AmCash Management

CONTENTS

1 Manager’s Report

10 Independent Auditor’s Report to the Unitholders

13 Statement of Financial Position

14 Statement of Comprehensive Income

15 Statement of Changes In Equity

16 Statement of Cash Flows

17 Notes to the Financial Statements

37 Statement by the Manager

38 Trustee’s Report

39 Directory

1

MANAGER’S REPORT

Dear Unitholders,

We are pleased to present you the Manager’s report and the audited accounts of AmCash Management

(“Fund”) for the financial year ended 31 March 2017.

Salient Information of the Fund

Name AmCash Management (“Fund”)

Category/

Type

Money Market / Income

Objective AmCash Management is a short-term money market fund which aims to provide you

with a regular stream of monthly income*. It is managed with the aim of maintaining

the Fund’s NAV at RM1.00.

Note: *The income could be in the form of units or cash.

Duration The Fund was established on 28 November 1986 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 Overnight Rate

(obtainable from: www.maybank2u.com.my)

Income

Distribution

Policy

Income is calculated daily and paid monthly within 14 days after the last day of each

month or on full redemption.

Breakdown of

Unit Holdings

by Size

For the financial year under review, the size of the Fund stood at 2,093,299,629

units.

Size of holding As at 31 March 2017 As at 31 March 2016

No of

units held

Number of

unitholders

No of

units held

Number of

unitholders

5,000 and below 1,273,270 546 1,330,427 653

5,001-10,000 2,333,425 338 2,371,182 349

10,001-50,000 11,010,951 438 11,729,265 479

50,001-500,000 106,489,969 586 112,077,019 609

500,001 and

above 1,972,192,014 378 2,109,477,699 424

2

Fund Performance Data

Portfolio

Composition

Details of portfolio composition of the Fund for the financial years as at 31 March

are as follows:

FY

2017

%

FY

2016

%

FY

2015

%

Corporate bonds - - 0.65

Cash and others 100.00 100.00 99.35

Total 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 for the financial years ended 31 March are as

follows:

FY

2017

FY

2016

FY

2015

Net asset value (RM)* 2,101,828,824 2,244,447,583 2,477,730,381

Units in circulation* 2,093,299,629 2,236,985,592 2,471,529,356

Net asset value per unit (RM)*(1)

1.00 1.00 1.00

Highest net asset value per unit

(RM)* 1.00

1.00

1.00

Lowest net asset value per unit

(RM)* 1.00

1.00

1.00

Benchmark performance (%) 1.81 2.01 1.95

Total return (%)(2)

2.59 2.77 2.65

- Capital growth (%) - - -

- Income distribution (%) 2.59 2.77 2.65

Gross distribution (RM) 54,454,773 68,731,898 65,785,057

Net distribution (RM) 54,454,773 68,731,898 65,785,057

Management expense ratio (%)(3)

1.11 1.12 1.05

Portfolio turnover ratio (times)(4)

0.02 0.03 0.14

* Above prices and net asset value per unit are shown as ex-distribution.

Note:

(1) Net asset value per unit is aimed to be maintained at RM1.00 as all income

earned is distributed on daily basis.

(2) Total return is the annualised return of the Fund for the respective financial

period/years computed based on the income return of the Fund net of all fees.

(3) 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. The MER decreased by 0.01% as compared to 1.12% per annum for

the financial year ended 31 March 2016 mainly due to decrease in expenses.

(4) 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 0.01

times (33.3%) as compared to 0.03 times for the financial year ended 31 March

2016 mainly due to decrease in investing activities.

3

Average Total Return (as at 31 March 2017)

AmCash

Management(a)

%

MBB(b)

%

One year 2.59 1.81

Three years 2.66 1.92

Five years 2.45 1.87

Ten years 2.20 1.79

Annual Total Return

Financial Years Ended

(31 March)

AmCash

Management(a)

%

MBB(b)

%

2017 2.59 1.81

2016 2.77 2.01

2015 2.65 1.95

2014 2.19 1.80

2013 2.12 1.80

(a) Source: Novagni Analytics and Advisory Sdn Bhd.

(b) Malayan Banking Berhad Overnight Rate (“MBB”) (obtainable from:

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 year under review, the Fund registered a return of 2.59% which was

entirely income distribution in nature.

Thus, the Fund’s return of 2.59% has outperformed the benchmark’s return of 1.81%

by 0.78%.

As compared with the financial year ended 31 March 2016, the net asset value

(“NAV”) per unit of the Fund is maintained at RM1.0000, while units in circulation

decreased by 6.42% from 2,236,985,592 units to 2,093,299,629 units.

The Line Chart below shows comparison between the annual performances of

AmCash Management and its benchmark, MBB, for financial years ended 31 March.

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.

Has the Fund

achieved its

objective?

The Fund has achieved its objective to provide investors with a regular stream of

monthly income*. It is managed with the aim of maintaining the Fund’s NAV at

RM1.00.

Note: *The income could be in the form of units or cash.

Strategies

and Policies

Employed

For the financial year under review, the Fund invested primarily in high quality

short-term instruments with a minimum short term local credit rating of P1 (by

RAM)/ MARC1 (by MARC) or long term credit rating of A1 (by RAM)/ A+ (by

MARC). If the credit rating of the instruments falls below the minimum rating, the

Fund may dispose off the investment. However, the Fund reserves the right to

maintain the investment if the downgrade is a temporary event. AmCash

Management’s investments are structured to mature as follows:

a. At least 10% of the investments within 7 days;

b. 20% of the investments within 31 days.

With the exception of extra ordinary circumstances, the weighted average

maturity of the Fund’s investments will not exceed 85 days and the maturity of

any non-governmental investments will not exceed 6 months, while the maturity

of any governmental investments will not exceed one year from the date of

purchase.

Portfolio

Structure

This table below is the asset allocation of the Fund for the financial years under

review.

5

As at

31-3-2017

%

As at

31-3-2016

%

Changes

%

Cash and others 100.00 100.00 -

Total 100.00 100.00

For the financial year under review, the Fund had substantially increased its exposure

to cash to 100% from 99.35% as at 30 Sept 2015. Consequent to that the

Fund had decreased its exposure of corporate bonds by 0.65%.

Distribution/

Unit splits

The Fund distributes the entire income earned on a monthly basis. For the financial

year under review, the Fund has distributed income totaling RM54,454,773 and no

unit split was declared.

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 unit holders during the

financial year under review.

Rebates

and Soft

Commission

It is our policy to pay all rebates to the Fund. Soft commission received from

brokers/dealers are retained by the Manager only if the goods and services provided

are of demonstrable benefit to unitholders of the Fund.

During the financial year under review, the Manager had received on behalf of the

Fund, soft commissions in the form of fundamental database, financial wire services,

technical analysis software and stock quotation system incidental to investment

management of the Fund. These soft commissions received by the Manager are deem

to be beneficial to the unitholders of the Fund.

Market

Review

In April 2016, Malaysia released its February exports number, which rebounded

6.7% YoY. The increase was generally driven by electrical and electronics sector as

well as increase in palm oil and palm-based and timber and timber based products.

On the inflation front, CPI for March came in much weaker than expected at 2.6%

YoY against consensus expectations of 3.4%. The drop was due to lower transport

cost as RON95 petrol price was reduced by 15 sen to RM1.60 per litre in March

2016 from RM1.75 in February. Meanwhile, Bank Negara Malaysia (BNM) said

that the reduction of the statutory reserve requirement by 50 basis points on 1

February 2016 has had its desired impact on the banking system’s interbank rates.

The base rate of commercial banks, on average, remained relatively stable at 3.89%

in March (February: 3.88%). On the consumer sentiment front, 1Q16 Consumer

Sentiment Index (“CSI”) has rebounded to 72.9 points after plunging for six

consecutive quarters. Recall that the index had hit its all-time lows in the past two

quarters, falling to 63.8 in 4Q15. In April, BNM’s international reserves continue to

climb steadily and were last seen at USD97b as at end-March 2016. More

pertinently, foreign holdings in Malaysian bonds of RM226.6 billion as at end March

has broken the previous record set in November 2014. Strengthening crude oil prices

and foreign fund inflows in both the bond as well as equities market has help turned

the Ringgit into Asia’s best-performing currency, confounding some analyst’s

expectation. The Ringgit has surged around 10% as at end April, the most in 43

years. Finally, polling for Sarawak’s 11th state election has finally been announced

to be on 7 May 2016.

In May 2016, Bank Negara Malaysia BNM kept the Overnight Policy Rate and

Statutory Reserve Requirement (“SRR”) ratio unchanged at 3.25% and 3.50%

6

respectively as widely expected in Datuk Muhammad Ibrahim’s inaugural Monetary

Policy Committee (“MPC”) meeting as BNM Governor. The tone of the MPC

statement was largely neutral with the stance broadly similar to the previous MPC

statements. BNM also reiterated its expectations for the domestic economy to expand

by 4.0 – 4.5% in 2016 while inflation is expected to trend lower for the remaining

parts of the year from the average consumer price index (“CPI”) of 3.4% in the first

quarter of 2016 (“1Q16”). This followed the release of Malaysia’s 1Q16 gross

domestic product (“GDP”) data which grew at a slower pace of 4.2% year-on-year

(“YoY”), on the back of weakness in exports and soft private investment growth

while on a quarter to quarter basis, the domestic economy grew 1.0%, compared to

1.5% previously.

In June 2016, Malaysia reported a positive growth in exports of 1.6% YoY for the

month of April 2016, while imports contracted by 2.3%, thus leaving a positive trade

balance of RM9.1b. Main contributors to exports came from the E&E sector which

showed an encouraging growth of 2.1% versus 0.5% in the preceding month. On the

inflation front, May’s CPI eases marginally to 2.0% YoY matching market

expectations. Since the implementation of GST in April 2015, the initial price shock

has faded while the current record low pump prices continue to keep inflationary

pressure in check. Meanwhile, Malaysia’s unemployment rate continued to inch up

in April. At 3.6%, the unemployment figure is at the highest since 2010. Finally,

Malaysia’s Ringgit appreciated versus USD by 2.9% from RM4.15 to RM4.03 at as

end June. The Ringgit has been volatile in June primarily due to two key events, the

FOMC meeting as well as the UK Referendum on Brexit.

In July 2016, Malaysia reported a negative growth in exports of -0.9% YoY for the

month of May 2016, its first drop in 4 months. This was against market expectation

of 2.0% growth. Nevertheless, Malaysia’s trade surplus continues to be in the

positive albeit narrowing to RM3.26b (April: RM9.06b) which brings cumulative

trade surplus to RM36.3b YTD. To recap, the biggest news of the month came from

Bank Negara Malaysia (“BNM”) which unexpectedly cut the Overnight Policy Rate

(“OPR”) by 25bps to 3.00% at its July 2016 meeting. This was the first monetary

policy move since July 2014. BNM’s Governor was also reported as explaining that

the cut was a pre-emptive move in light of the recent UK Referendum on Brexit

event as well as weaker global growth prospects in the near term. On the inflation

front, June’s CPI softened again to 1.6% YoY, below consensus expectations.

Average inflation for 1H2016 is now around 2.7% which is in line with BNM’s

guidance of 2 - 3% for 2016.

In August 2016, Malaysia exports bounced back into gain of 3.4% y-o-y in June after

falling by -0.9% in May and compared with +1.6% in April. Meanwhile, the foreign

exchange reserves increased marginally by USD0.1b to USD97.3b as at 29 July

2016. The current account surplus in the balance of payments narrowed to

MYR1.9bn in 2Q 2016, after recording a surplus of MYR5.0bn in 1Q and compared

with a surplus of MYR8.1bn in 2Q 2015. This was attributed to a smaller surplus in

the merchandise trade account and a larger deficit in the income transfers.

Meanwhile, the financial account registered a higher net inflow of MYR9.5bn in 2Q,

compared with an inflow of MYR5.8bn in the previous quarter. The improvement

was mainly due to a rebound in net inflow on other investments and a larger net

inflow of direct investments. On the other hand, the slowdown in the Malaysian

economy continued with real GDP growing at a slower pace of 4.0% y-o-y in 2Q

2016, from +4.2% in 1Q and +4.5% in 4Q 2016. The overall growth was dragged

lower by a cutback in inventories and subdued exports.

7

In September 2016, Malaysia’s PMI reading rose to 48.6 in September from 47.4 in

August 2016. This marked the highest reading in eight months. Nevertheless, it was

still the eighteenth consecutive month of contraction as indicated by the sub 50

reading. On the inflation front, headline inflation reading for August rebounded to

1.5% versus consensus expectation of 1.3%. Main drivers were non-food items

particularly cultural services which saw inflation surging from 1.0% in July to 6.1%

YoY in August. Finally, the banking sector’s loan growth moderated for the twelfth

consecutive month to 4.2% YoY in August from 5.1% YoY in July. Notably, this is

the lowest level in at least 13 years, as lending activities continue to face headwinds

from a slowing economy, tepid deposit growth and rising loan impairments.

In October 2016, Malaysia’s foreign exchange reserves rose by USD0.2bn to

USD97.7bn as at 30 September 2016, from USD97.5bn registered at end-August and

compared to USD95.3bn at end-December 2015. On the inflation front, the headline

inflation rate remained stable in September, as the easing in cost of food and

beverages was mitigated by the smaller magnitude of decline in cost of transport.

The core inflation rate inched lower in September. Growth of the broader money

supply, M3, slowed to 2.2% y-o-y in September, from +2.4% in August, due to a

decline in external operations and a slowdown in demand for funds by the private

and public sector. Meanwhile, loan growth was stable at 4.2% y-o-y in September,

unchanged from the previous month but lower compared with +5.6 in July, as the

deceleration in growth of household loans were mitigated by the marginal increase in

business loans.

In November 2016, Malaysia’s foreign exchange reserves rose by USD0.5bn to

USD98.3bn as at 15 November 2016, from USD97.8bn registered at end-October

2016 and compared to USD95.3bn at end-December 2015. CPI for Oct 2016 came

in marginally lower at 1.4% YoY compared to Sep 2016’s reading on 1.5% YoY.

3Q GDP was 4.3% YoY, higher than consensus expectations of 4.0% YoY (2Q:

4.0%, 1Q: 4.2%). GDP growth was boosted by higher consumer spending which

grew 6.4% YoY, supported by wage and employment growth. Private investment

eased slightly to 4.7% from 5.6% in 2Q, attributed to a decline in spending on

machinery and equipment. Government spending also slowed to 3.1% from 6.5% in

2Q, on the back of lower spending on supply and services. Bank Negara Malaysia

(BNM) left its Overnight Policy Rate(OPR) unchanged at 3.00%, as expected by the

market given the significant degree of financial market volatility following Donald

Trump's presidential victory. Compared to September, BNM slightly upgraded its

view on global growth in 2017, but retained its assessment that the domestic

economy remains on track to expand as projected in 2016 and 2017.

In December 2016, Malaysia’s manufacturing Purchasing Managers’ Index (PMI)

continue to remain below the 50-level mark coming in unchanged at 47.1 in

December. This was the twenty first consecutive months of contraction. On the trade

front, exports were below expectations, recording a contraction of 8.6% YoY in

October (September: -3.0%). Consensus expectations were for a contraction of -

5.6%. Imports meanwhile also fell by 6.6% YoY (September: -0.1%) driven by

broad-based declines in capital imports (-2.0%), intermediate imports (-8.9%), and

consumption imports (-8.0%). Nevertheless, trade surplus continues to be positive at

RM9.76b (September: RM7.56b). Indicative of the huge foreign outflows in the

month of November, Malaysia’s foreign reserves fell USD1.4b to USD96.4b. This

was the lowest reserve level since March 2016. The current level of reserves is

sufficient to cover 1.2 times of short-term external debt and 8.3 months of retained

imports. During the month, Bank Negara Malaysia (“BNM”) announced several

8

measures to enhance onshore foreign exchange liquidity effective 5 December 2016.

The measures include the liberalization and deregulation of the onshore MYR

hedging market, streamlining treatment for investment in foreign currency assets and

incentives and treatment of export proceeds. These pre-emptive measures were

implemented to stabilise the ringgit and support financial stability amid further broad

strengthening of the USD. Finally, the banking sector’s loan growth showed signs of

bottoming. For the month of November, growth accelerated to 5.3% YoY (October:

4.5%) and a robust 0.9% MoM, resulting in YTD annualised loan growth improving

to 4.7% (10M2016: 4.0%). The main driver of loan growth was in working capital

loans (+1.6% MoM vs average MoM run rate of +0.3%). In terms of consumer loans,

residential property loan growth remained stable at 9.5% YoY while automobile

loans remain mired in negative territory at -0.8% YoY.

In January 2017, after increasing by USD 0.2b and USD 0.5b in October and

November respectively, Malaysia’s foreign reserves fell by USD3.7b to USD 94.6b

in December. This was the lowest reserve level the start of the year and the decline

was spurred by considerable foreign outflows. The current level of reserves is

sufficient to cover 1.2 times of short-term external debt and 8.3 months of retained

imports. In comparison Malaysia’s foreign reserves stood at USD 95.3bn at end-

December 2015. On the trade front exports & imports rebounded 11.2% YoY. BNM

left the policy rate unchanged at 3.00% in its latest meeting, with a more upbeat

statement on the external sector and higher inflation expectation for 2017. The

general expectation is that BNM will leave the rate unchanged in 2017, against the

backdrop of expected Fed rate hike(s) during the year.

In February 2017, Malaysia’s 4Q16 GDP growth was printed at 4.5% vs consensus

of 4.4%, in line with BNM’s forecasts of 4.0-4.5%. The growth came on the back of

moderate rebound in exports/imports and resilient domestic demand in the 4 Qtr.

2016 budget deficits met the 3.1% of GDP target allaying concerns on the

sovereign’s ratings. Further, despite the persistent weakness in the MYR, Malaysia

external reserves remained resilient; it stood unchanged from end-January at US$95b

in mid-February. The January CPI print came in much higher than expected today at

3.2%, vs consensus estimate of 2.7%. The upside surprise was driven by 2 factors: 1)

domestic fuel price increases, and 2) food prices due to bad weather and also lagged

impact of cooking oil subsidy removals.

In March 2017, Bank Negara Malaysia (“BNM”) released the 2016 Annual Report

where the central bank projected Malaysia’s GDP to grow at 4.3% - 4.8% for 2017.

The higher growth projection is based on a rebound in exports as well as resilient

domestic demand. Inflation, however, is expected to spike upwards to 3% - 4%

(2016: 2.1%) due mainly to cost-driven factors i.e. pass-through impact from an

elevated retail oil prices. In the same report, BNM also projects Malaysia’s current

account surplus to remain positive at RM17.4b (2016: RM25.2b). Meanwhile, as at

end 2016, the top five Foreign Direct Investments (“FDI”) contributor was Singapore

(RM115b), Japan (RM70b), China & HK (RM53b), Netherlands (RM48b) and

United States (RM36b). In 2016, out of the RM207.9b approved investments, the

Services sector command 68% while the Manufacturing sector command a lower

share of 28%. The bulk of investments in the Manufacturing sector came from

Petroleum Products, E&E Products, Basic Metal Products and Transport Equipment

while the usual Real Estate, Financial Services, Utilities and Distributive Trade

dominate the Services Sector. Finally, the banking sector’s loan growth for February

slipped slightly to 5.3% YoY from 5.6% YoY in the previous month. The

moderation in February’s loan growth was caused by a slower Household loan

9

growth of +5.1% whilst business loan was unchanged at 5.4%.

Market

Outlook

The US FOMC March rate hike was fully expected by most investors but more

importantly, the dovish guidance that accompanied the FOMC statement was

welcomed by all, especially Emerging Markets investors. With the FOMC decision

out of the way, investors’ attention is now tuned to how President Trump and his

team will maneuver all the election promises made last November starting with its

China policy.

Meanwhile, the rise in inflation outlook globally as well as in Malaysia is very much

in focus. BNM has guided for 2017 headline inflation (“CPI”) to fall within 3.0% -

4.0% in its latest Annual Report. We note that the forecast is significantly higher

than the 2.1% recorded for the whole of 2016. What is more pertinent however is

whether the recent surge in Malaysia’s CPI (Feb: 4.5%) portends a potential change

in BNM’s monetary policy given the current negative real rate environment.

We do not think so, at least not in the next six months. The reason for the surge in

the CPI can be attributed to the lower base in prior year as well as the multiple price

hikes in petrol pump prices via RON95, RON97 and Diesel. In other words,

Malaysia’s headline inflation is largely cost-push and not demand-driven. In fact,

core inflation remains below 3.0% (Feb: 2.5%) and BNM has acknowledged as much

in its recent MPC statement stating that “the cost-driven inflation is not expected to

have a significant impact on the broader price trends given the stable domestic

demand conditions. Core inflation is expected to increase modestly.”

Given the above and based on BNM’s actions in the past, we opine that the current

higher inflation pressures are unlikely to trigger an overnight policy rate (OPR) hike,

given lingering growth risks, and the absence of strong demand conditions leading to

second-round effects on domestic inflation.

Kuala Lumpur, Malaysia


8 May 2017

Independent auditors’ report to the unitholders of

AmCash Management

Report on the audit of the financial statements

Opinion

Basis for opinion

Independence and other ethical responsibilities

Information other than the financial statements and auditors’ report thereon

Our opinion on the financial statements of the Fund does not cover the other information and we do

not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Fund, our responsibility is to read the

other information and, in doing so, consider whether the other information is materially inconsistent

with the financial statements of the Fund or our knowledge obtained in the audit or otherwise

appears to be materially misstated.

The Manager is responsible for the other information. The other information comprises information

in the Annual Report, but does not include the financial statements of the Fund and our auditors’

report thereon.

We have audited the financial statements of AmCash Management (“the Fund”), which comprise

the statement of financial position as at 31 March 2017, and the statement of comprehensive income,

statement of changes in equity and statement of 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 13

to 36.

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

position of the Fund as at 31 March 2017, and of its financial performance and its cash flows for the

year then ended in accordance with Malaysian Financial Reporting Standards and International

Financial Reporting Standards.

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 Auditor’s 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.

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.

10


AmCash Management (cont’d.)

Responsibilities of the Manager and the Trustees for the financial statements

Auditor’s responsibilities for the audit of the financial statements

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.

Identify and assess the risks of material misstatement of the financial statements of the Fund,

whether due to fraud or error, design and perform audit procedures responsive to those risks,

and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one

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

misrepresentations, or the override of internal control.

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

other information, we are required to report that fact. We have nothing to report in this regard.

The Manager is responsible for the preparation of the financial statements of the Fund that give a

true and fair view in accordance with Malaysian Financial Reporting Standards and International

Financial Reporting Standards. The Manager is also responsible for such internal control as the

Manager determines is necessary to enable the preparation of financial statements of the Fund that

are free from material misstatement, whether due to fraud or error.

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

Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless the Manager either intends to

liquidate the Fund or to cease operations, or has no realistic alternative to do so.

The Trustee is responsible for ensuring that the Manager maintains proper accounting and other

records as are necessary to enable true and fair presentation of these 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 approved standards on auditing in Malaysia

and International Standards on Auditing will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of these financial statements.

As part of an audit in accordance with the approved standards on auditing in Malaysia and

International Standards on Auditing, we exercise professional judgment and maintain professional

skepticism throughout the planning and performance of the audit. We also:

11


AmCash Management (cont’d.)

Other matters

Ernst & Young Wan Daneena Liza Bt Wan Abdul Rahman

AF: 0039 No. 2978/03/18(J)

Chartered Accountants Chartered Accountant


8 May 2017

This report is made solely to the unitholders of the Fund, as a body, and for no other purpose. We do

not assume responsibility to any other person for the content of this report.

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 Fund’s ability to

continue as a going concern. If we conclude that a material uncertainty exists, we are required

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

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.

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 achieves fair presentation.

We communicate with the Manager regarding, among other matters, the planned scope and timing of

the audit and significant audit findings, including any significant deficiencies in internal control that

we identify during our audit.

12

AmCash Management

STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2017

2017 2016

Note RM RM

ASSETS

Deposits with financial institutions 4 2,097,358,685 2,149,539,781

Cash at banks 11,185,637 102,409,171

TOTAL ASSETS 2,108,544,322 2,251,948,952

LIABILITIES

Amount due to Manager 5 2,052,311 1,963,207

Amount due to Trustee 6 90,327 97,319

Distributions payable and to be reinvested 4,425,136 5,302,517

Sundry payables and accrued expenses 147,724 138,326

TOTAL LIABILITIES 6,715,498 7,501,369

EQUITY

Unitholders’ capital 8(a) 2,093,299,629 2,236,985,592

Capital reserve 9 8,513,385 7,446,116

Retained earnings 8(b) 15,810 15,875

TOTAL EQUITY 8 2,101,828,824 2,244,447,583

TOTAL EQUITY AND LIABILITIES 2,108,544,322 2,251,948,952

UNITS IN CIRCULATION 8(a) 2,093,299,629 2,236,985,592

NET ASSET VALUE PER UNIT

− EX DISTRIBUTION 100.00 sen 100.00 sen

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

13

AmCash Management

STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2017

2017 2016

Note RM RM

INVESTMENT INCOME

Interest income 79,449,829 98,237,498

Gross Income 79,449,829 98,237,498

EXPENDITURE

Manager’s fee 5 (21,398,851) (25,309,692)

Trustee’s fee 6 (1,069,611) (1,265,485)

Auditors’ remuneration - current financial year (13,000) (10,000)

Auditors’ remuneration - over provision in prior

financial year - 4,000

Tax agent’s fee (4,100) (4,000)

Other expenses 7 (1,442,290) (1,659,457)

Total Expenditure (23,927,852) (28,244,634)

NET INCOME BEFORE TAX 55,521,977 69,992,864

LESS: INCOME TAX 11 - -

NET INCOME AFTER TAX 55,521,977 69,992,864

OTHER COMPREHENSIVE INCOME - -

TOTAL COMPREHENSIVE INCOME FOR THE

FINANCIAL YEAR 55,521,977 69,992,864

Total comprehensive income comprises the following:

Realised income 55,521,977 69,992,864

Distributions for the financial year:

Gross/net distributions 12 54,454,773 68,731,898


14

AmCash Management

STATEMENT OF CHANGES IN EQUITY


Unitholders’ Capital Retained Total

capital reserve earnings equity

Note RM RM RM RM

At 1 April 2015 2,471,529,356 6,185,400 15,625 2,477,730,381

Total comprehensive

income for the

financial year - - 69,992,864 69,992,864

Transfer to capital

reserve 9 - 1,260,716 (1,260,716) -

Creation of units 8(a) 19,247,276,699 - - 19,247,276,699

Reinvestments of 8(a)

distributions 67,982,546 - - 67,982,546

Cancellation of units 8(a) (19,549,803,009) - - (19,549,803,009)

Distributions 12 - - (68,731,898) (68,731,898)

Balance at 31 March 2016 2,236,985,592 7,446,116 15,875 2,244,447,583

At 1 April 2016 2,236,985,592 7,446,116 15,875 2,244,447,583

Total comprehensive

income for the

financial year - - 55,521,977 55,521,977

Transfer to capital

reserve 9 - 1,067,269 (1,067,269) -

Creation of units 8(a) 12,148,866,951 - - 12,148,866,951

Reinvestments of 8(a)

distributions 54,134,665 - - 54,134,665

Cancellation of units 8(a) (12,346,687,579) - - (12,346,687,579)

Distributions 12 - (54,454,773) (54,454,773)

Balance at 31 March 2017 2,093,299,629 8,513,385 15,810 2,101,828,824


15

AmCash Management

STATEMENT OF CASH FLOWS


2017 2016

Note RM RM

CASH FLOWS FROM OPERATING AND

INVESTING ACTIVITIES

Proceeds from maturity/sale of investments 2,042,079,228 546,000,000

Interest received 77,637,525 99,728,879

Manager’s fee paid (21,307,174) (25,516,362)

Trustee’s fee paid (1,076,603) (1,276,024)

Tax agent’s fee paid (4,000) (4,000)

Payments for other expenses (1,445,992) (1,553,635)

Purchase of investments (2,060,776,425) (510,252,500)

Net cash generated from operating and

investing activities 35,106,559 107,126,358

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from creation of units 12,148,866,951 19,247,276,699

Payment for cancellation of units (12,346,690,152) (19,549,803,009)

Distributions paid (1,197,489) (1,598,658)

Net cash used in from financing activities (199,020,690) (304,124,968)

NET DECREASE IN CASH AND CASH

EQUIVALENTS (163,914,131) (196,998,610)

CASH AND CASH EQUIVALENTS AT

BEGINNING OF FINANCIAL YEAR 1,789,586,809 1,986,585,419

CASH AND CASH EQUIVALENTS AT

END OF FINANCIAL YEAR 1,625,672,678 1,789,586,809

Cash and cash equivalents comprise:

Short-term deposits with financial institutions 4 1,614,487,041 1,687,177,638

Cash at banks 11,185,637 102,409,171

1,625,672,678 1,789,586,809


16

AmCash Management

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Standards effective during the financial year

Standards issued but not yet effective

Effective for

financial periods

beginning on or after

MFRS 9: Financial Instruments

MFRS 15: Revenue From Contracts With Customers

AmCash Management (“the Fund”) was established pursuant to a Deed dated 28 November 1986, as

amended by Deeds supplemental thereto (“the Deed”), between AmFunds Management Berhad as the

Manager, Universal Trustee (Malaysia) Berhad as the Trustee and all unitholders.

By a deed of retirement and appointment of trustee dated 17 November 1997, HSBC (Malaysia) Trustee

Berhad was appointed as trustee to replace Universal Trustee (Malaysia) Berhad.

AmCash Management Fourth Supplemental Deed dated 2 March 1998 was made between AmFunds

Management Berhad and HSBC (Malaysia) Trustee Berhad to replace the Deed and all Deeds

supplemental thereto.

The Fund was set up with the objective of providing individual investors with a steady stream of income

and security of principal. As provided in the Deed, the “accrual period” or financial year shall end on 31

March and units in the Fund were first offered for sale on 28 November 1986.

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

Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board (“MASB”) and

are in compliance with International Financial Reporting Standards.

As at the date of authorisation of these financial statements, the following Standards, which are relevant

to the Fund, have been issued by MASB but are not yet effective and have not been adopted by the Fund.

The financial statements of the Fund have been prepared under the historical cost convention, unless

otherwise stated in the accounting policies.

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

financial impact to the financial statements.

1 January 2018

1 January 2018

17

MFRS 9 Financial Instruments

3. SIGNIFICANT ACCOUNTING POLICIES

Income recognition

Income tax

Functional and presentation currency

Statement of cash flows

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 which reflects the currency in which the Fund competes for

funds, issues and redeems units. The Fund has also adopted Ringgit Malaysia as its presentation

currency.

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

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

insignificant risk of changes in value.

The Fund plans to adopt the above pronouncements when they become effective in the respective

financial periods. These pronouncements are expected to have no significant impact to the financial

statements of the Fund upon their initial application except as described below:

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.

Interest income on fixed income securities and short-term deposits are recognised on an accrual basis

using the effective interest method, which includes the accretion of discounts and amortisation of

premiums.

MFRS 9 reflects International Accounting Standards Board’s (“IASB”) work on the replacement of

MFRS 139 Financial Instruments: Recognition and Measurement (“MFRS 139”). MFRS 9 will be

effective for financial year beginning on or after 1 January 2018. The Fund is in the process of

quantifying the impact of the first adoption of MFRS 9.

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.

18

Distribution

Unitholders’ capital

Capital reserve

Financial assets

(i) Held-to-maturity investments

(ii) Loans and receivables

The Fund determines the classification of its financial assets at initial recognition, and the categories

include held-to-maturity investments and loans and receivables.

Capital reserve of the Fund represents non-distributable amount as determined by the Manager that may

be applied to make good any losses incurred by the Fund, in order to maintain the Fund’s prices at

RM1.00 per unit, as approved by the Securities Commission.

Financial assets are recognised in the statement of financial position when, and only when, the Fund

becomes a party to the contractual provisions of the financial instrument.

Distributions are 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 in the period in

which it is approved.

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”).

When financial assets are recognised initially, they are measured at fair value, plus, in the case of

financial assets not at fair value through profit or loss, directly attributable transaction costs.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the

effective interest method. Gains and losses are recognised in profit or loss when the loans and

receivables are derecognised or impaired, and through the amortisation process.

Financial assets with fixed or determinable payments that are not quoted in an active market are

classified as loans and receivables.

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-

maturity when the Fund has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using

the effective interest method. Gains and losses are recognised in profit or loss when the held-to-

maturity investments are derecognised or impaired, and through the amortisation process.

The Fund had received approval from the Securities Commission to value its investments at the

amortised cost.

19

Impairment of financial assets

(i) Financial assets carried at amortised cost

Financial liabilities

Classification of realised gains and losses

Significant accounting estimates and judgments

The Fund assesses at each reporting date whether there is any objective evidence that a financial asset is

impaired.

Due to the nature of the Fund’s investments, the Fund does not have any unrealised gains or losses.

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.

To determine whether there is objective evidence that an impairment loss on financial assets has been

incurred, the Fund considers factors such as the probability of insolvency or significant financial

difficulties of the debtor and default or significant delay in payments.

If any such evidence exists, the amount of impairment loss is measured as the difference between the

asset’s carrying amount and the present value of estimated future cash flows discounted at the

financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced through the use of an allowance account. When

loans and receivables become uncollectible, they are written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be

related objectively to an event occurring after the impairment was recognised, the previously

recognised impairment loss is reversed to the extent that the carrying amount of the asset does not

exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

Financial liabilities are classified according to the substance of the contractual arrangements entered into

and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position

when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument.

The Fund’s financial liabilities are recognised initially at fair value plus directly attributable transaction

costs and subsequently measured at amortised cost using the effective interest method.

A financial liability is derecognised when the obligation under the liability is extinguished. Gains and

losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation

process.

20

4. DEPOSITS WITH FINANCIAL INSTITUTIONS

2017 2016

RM RM

At nominal value:

Fixed deposits with:

- Licensed banks 330,000,000 100,000,000

- Licensed investment bank 50,000,000 -

- Licensed Islamic bank 100,000,000 -

480,000,000 100,000,000

Short-term deposits with:

- Licensed banks 819,000,000 1,713,000,000

- Licensed investment bank 690,000,000 230,000,000

- Licensed Islamic bank 100,000,000 100,000,000

1,609,000,000 2,043,000,000

2,089,000,000 2,143,000,000

At carrying value:


- Licensed banks 332,221,644 100,858,082

- Licensed investment bank 50,390,274 -

- Licensed Islamic bank 100,259,726 -

482,871,644 100,858,082


- Licensed banks 821,994,507 1,718,269,685

- Licensed investment bank 691,953,151 230,381,603

- Licensed Islamic bank 100,539,383 100,030,411

1,614,487,041 2,048,681,699

2,097,358,685 2,149,539,781

The Fund classifies its investments as held-to-maturity investments as the Fund has a policy to hold its

investments until maturity and maintains sufficient amounts in deposits with financial institutions to

meet unitholders’ cancellation of units, if any.

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 year.

21

Details of deposits with financial institutions as at 31 March 2017 are as follows:

Carrying

value as a

percentage

Maturity Nominal Carrying Purchase of net asset

date value value cost value

RM RM RM %

Fixed deposits with licensed banks

11.04.2017 Sumitomo

Mitsui

Banking

Corporation 40,000,000 40,689,315 40,000,000 1.94

19.04.2017 AmBank (M)

Berhad* 50,000,000 50,853,699 50,000,000 2.42

02.06.2017 AmBank (M)

Berhad* 40,000,000 40,126,575 40,000,000 1.91

06.06.2017 United Overseas

Bank

(Malaysia)

Bhd. 100,000,000 100,274,247 100,000,000 4.77

30.08.2017 CIMB Bank

Berhad 100,000,000 100,277,808 100,000,000 4.77

330,000,000 332,221,644 330,000,000 15.81

Fixed deposits with a licensed investment bank

17.05.2017 Kenanga

Investment

Bank

Berhad 50,000,000 50,390,274 50,000,000 2.40

Fixed deposits with a licensed Islamic bank

04.09.2017 Bank Islam

Malaysia

Berhad 100,000,000 100,259,726 100,000,000 4.77

480,000,000 482,871,644 480,000,000 22.98

Short-term deposits with licensed banks

03.04.2017 AmBank (M)

Berhad* 90,000,000 90,008,384 90,000,000 4.28

03.04.2017 Hong Leong

Bank Berhad 50,000,000 50,160,000 50,000,000 2.39

(Forward)

Bank

22

Carrying

value as a

percentage



RM RM RM %

Short-term deposits with licensed banks

03.04.2017 National Bank

of Abu Dhabi

Malaysia

Berhad 20,000,000 20,003,726 20,000,000 0.95

03.04.2017 Public Bank

Berhad 90,000,000 90,008,384 90,000,000 4.28


Bank

(Malaysia)

Bhd. 49,000,000 49,144,986 49,000,000 2.34

04.04.2017 AmBank (M)

Berhad* 100,000,000 100,905,754 100,000,000 4.80

05.04.2017 RHB Bank

Berhad 80,000,000 80,134,137 80,000,000 3.81


Bank

(Malaysia)

Bhd. 50,000,000 50,416,438 50,000,000 2.40

13.04.2017 CIMB Bank

Berhad 50,000,000 50,406,027 50,000,000 2.40


Bank

(Malaysia)

Bhd. 50,000,000 50,208,219 50,000,000 2.39


Bank

(Malaysia)

Bhd. 40,000,000 40,241,534 40,000,000 1.91


Bank Berhad 50,000,000 50,130,137 50,000,000 2.39


Bank Berhad 50,000,000 50,058,014 50,000,000 2.38

29.05.2017 AmBank (M)

Berhad* 50,000,000 50,168,767 50,000,000 2.39

819,000,000 821,994,507 819,000,000 39.11

(Forward)

Bank

23

Carrying

value as a

percentage



RM RM RM %

Short-term deposits with licensed investment banks

03.04.2017 Kenanga

Investment

Bank

Berhad 50,000,000 50,162,740 50,000,000 2.39


Investment

Bank

Berhad 50,000,000 50,020,000 50,000,000 2.38

05.04.2017 KAF

Investment

Bank

Berhad 100,000,000 100,236,712 100,000,000 4.77

05.04.2017 Kenanga

Investment

Bank

Berhad 50,000,000 50,447,671 50,000,000 2.40

06.04.2017 KAF

Investment

Bank

Berhad 150,000,000 150,233,425 150,000,000 7.14

17.04.2017 Affin Hwang

Investment

Bank

Berhad 100,000,000 100,152,877 100,000,000 4.76


Investment

Bank

Berhad 30,000,000 30,228,000 30,000,000 1.44


Investment

Bank

Berhad 30,000,000 30,030,000 30,000,000 1.43


Investment

Bank

Berhad 50,000,000 50,168,589 50,000,000 2.39


Investment

Bank

Berhad 50,000,000 50,244,658 50,000,000 2.39

(Forward)

Bank

24

Carrying

value as a

percentage



RM RM RM %

Short-term deposits with licensed investment banks

23.05.2017 Kenanga

Investment

Bank

Berhad 30,000,000 30,028,479 30,000,000 1.43

690,000,000 691,953,151 690,000,000 32.92

Short-term deposits with licensed Islamic banks


Islamic Bank

Berhad 50,000,000 50,272,260 50,000,000 2.39


Islamic Bank

Berhad 50,000,000 50,267,123 50,000,000 2.39

100,000,000 100,539,383 100,000,000 4.78

1,609,000,000 1,614,487,041 1,609,000,000 76.81

Total 2,089,000,000 2,097,358,685 2,089,000,000 99.79

* A licensed bank related to the Manager.

2017 2016 2017 2016

% % Days Days


- Licensed banks 3.84 4.35 62 20

- Licensed investment bank 3.85 - 47 -

- Licensed Islamic bank 3.95 - 157 -


- Licensed banks 3.67 3.94 18 40

- Licensed investment bank 3.67 4.02 18 15

- Licensed Islamic bank 3.75 3.70 9 5

The weighted average effective interest rate and average remaining maturity of short-term deposits are as

follows:

Weighted average effective

interest rate

Remaining

Bank

maturity

25

5. AMOUNT DUE TO MANAGER

2017 2016

RM RM

Manager’s fee payable (2,038,052) (1,946,375)

Cheque book fee payable to Manager (6,285) (16,484)

Bank charges payable to Manager (7,974) (348)

(2,052,311) (1,963,207)

6. AMOUNT DUE TO TRUSTEE

7. OTHER EXPENSES

8. TOTAL EQUITY

Total equity is represented by:

2017 2016

Note RM RM

Unitholders’ capital (a) 2,093,299,629 2,236,985,592

Retained earnings

− Realised income (b) 15,810 15,875

Capital reserve 9 8,513,385 7,446,116

2,101,828,824 2,244,447,583

Included in other expenses is Goods and Services Tax incurred by the Fund during the financial year

amounting to RM1,407,980 (2016: RM1,597,117).

The normal credit period in the previous and current financial years for Trustee’s fee payable is one

month.

The normal credit period in the previous and current financial years for Manager’s fee payable is one

month.

Trustee’s fee is at a rate of 0.05% (2016: 0.05%) per annum on the net asset value of the Fund, calculated

on a daily basis.

Manager’s fee is at a rate of 1.00% (2016: 1.00%) per annum on the net asset value of the Fund,

calculated on a daily basis , unless the Manager waive certain of its Manager’s fee.

26

(a) UNITHOLDERS’ CAPITAL/UNITS IN CIRCULATION

Number of Number of

units RM units RM

At beginning of the

financial year 2,236,985,592 2,236,985,592 2,471,529,356 2,471,529,356

Creation during the

financial year 12,148,866,951 12,148,866,951 19,247,276,699 19,247,276,699

Distributions reinvested 54,134,665 54,134,665 67,982,546 67,982,546

Cancellation during the

financial year (12,346,687,579) (12,346,687,579) (19,549,803,009) (19,549,803,009)

At end of the financial

year 2,093,299,629 2,093,299,629 2,236,985,592 2,236,985,592

(b) REALISED – DISTRIBUTABLE

2017 2016

RM RM

At beginning of the financial year 15,875 15,625

Total comprehensive income for the financial year 55,521,977 69,992,864

Distributions out of realised reserve (Note 12) (54,454,773) (68,731,898)

Transfer to capital reserve (Note 9) (1,067,269) (1,260,716)

Net (decrease)/increase in realised reserve for

the financial year (65) 250

At end of the financial year 15,810 15,875

9. CAPITAL RESERVE

2017 2016

RM RM

At beginning of the financial year 7,446,116 6,185,400

Transfer from realised income [Note 8(b)] 1,067,269 1,260,716

At end of the financial year 8,513,385 7,446,116

2017 2016

27

10. UNITS HELD BY RELATED PARTIES

The related parties of and their relationship 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

Number of Number of

units RM units RM

Subsidiaries and associates

of AMMB 507,463,785 507,463,785 485,782,214 485,782,214

*

11. INCOME TAX

2017 2016

RM RM

Net income before tax 55,521,977 69,992,864

Taxation at Malaysian statutory rate of 24% 13,325,274 16,798,300

Tax effects of:

Income not subject to tax (19,067,959) (23,577,000)

Restriction on tax deductible expenses for unit trust fund 4,632,348 5,481,000

Non-permitted expenses for tax purposes 595,631 688,700

Permitted expenses not used and not available for

future financial year 514,706 609,000

Tax expense for the financial year - -

Subsidiaries and associate companies of the ultimate

holding company of the Manager

20162017

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:

The parties related are the legal and beneficial owners of the units. The Manager did not hold any

units in the Fund as at 31 March 2017 and 31 March 2016.

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.

Pursuant to Schedule 6 of the Income Tax Act, 1967, local interest income derived by the Fund is

exempted from tax.

28

12. DISTRIBUTIONS

2017 2016

RM RM

On redemption of units 356,811 616,292

Income entitlement distributed on:

30 April 2016/2015 5,003,200 5,619,553

31 May 2016/2015 5,154,316 5,905,331

30 June 2016/2015 5,080,764 6,134,105

31 July 2016/2015 4,894,164 6,294,910

31 August 2016/2015 4,441,892 5,861,789

30 September 2016/2015 4,224,480 5,445,656

31 October 2016/2015 4,398,878 5,398,130

30 November 2016/2015 4,248,836 5,359,533

31 December 2016/2015 4,436,043 5,811,621

31 January 2017/2016 4,152,884 5,805,521

28 February 2017/29 February 2016 3,637,369 5,176,941

31 March 2017/2016 4,425,136 5,302,516

54,454,773 68,731,898

Distributions to unitholders are from the following sources:

2017 2016

RM RM

Undistributed net income brought forward 65 -

Interest income 78,382,560 96,976,532

Less: Expenses (23,927,852) (28,244,634)

Total amount of distributions 54,454,773 68,731,898

Comprising:

Distributions reinvested 48,912,788 61,923,866

Distributions to be reinvested 4,340,658 5,221,876

Cash distributions 1,201,327 1,586,156

54,454,773 68,731,898

Included in the distributions for the financial year ended 31 March 2017 is RM65 distributed from

previous financial years’ realised income.

29

13. MANAGEMENT EXPENSE RATIO (“MER”)

2017 2016% p.a. % p.a.

Manager’s fee 1.00 1.00

Trustee’s fee 0.05 0.05

Fund’s other expenses 0.06 0.07

Total MER 1.11 1.12

14. PORTFOLIO TURNOVER RATIO (“PTR”)

15. SEGMENTAL REPORTING

16. TRANSACTIONS WITH THE FINANCIAL INSTITUTIONS

Financial institutions

RM %

Malayan Banking Berhad 25,016,158,473 32.55

RHB Bank Berhad 15,572,000,000 20.26

CIMB Bank Berhad 10,217,196,325 13.29

Public Bank Berhad 6,552,000,000 8.52

AmBank (M) Berhad* 5,482,000,000 7.13

National Bank of Abu Dhabi Malaysia Berhad 4,920,000,000 6.40

Hong Leong Bank Berhad 1,851,000,000 2.41

United Overseas Bank (Malaysia) Bhd. 1,554,000,000 2.02

(Forward)

The Fund’s MER is as follows:

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

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

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

average net asset value of the Fund calculated on a daily basis, is 0.02 times (2016: 0.03 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 year ended 31 March 2017 are as

follows:

Transaction value

30

Financial institutions

RM %

KAF Investment Bank Berhad 1,290,000,000 1.68

Affin Hwang Investment Bank Berhad 1,090,000,000 1.42

Other financial institutions # 3,320,000,000 4.32

76,864,354,798 100.00

* A financial institution related to the Manager.#

17. FINANCIAL INSTRUMENTS

(a) Classification of financial instruments

Loans and Financial

receivables liabilities at

at amortised amortised

cost cost Total

RM RM RM

2017

Assets

Deposits with financial

institutions 2,097,358,685 - 2,097,358,685

Cash at banks 11,185,637 - 11,185,637

Total financial assets 2,108,544,322 - 2,108,544,322

(Forward)

The Manager and the Trustee are 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 significant accounting policies in Note 3 describe how the classes of financial instruments are

measured, and how income and expenses, including fair value gains and losses, are recognised. The

following table analyses the financial assets and liabilities of the Fund in the statement of financial

position by the class of financial instrument to which they are assigned, and therefore by the

measurement basis.

Transaction value

Included in the category of other financial institutions were transactions amounting to

RM70,000,000 with related party, AmBank Islamic Berhad.

The above transactions were in respect of fixed income instruments and money market deposits.

Transactions in these investments do not involve any commission or brokerage.

31

Loans and Financial

receivables liabilities at

at amortised amortised

cost cost Total

RM RM RM

2017

Liabilities

Amount due to Manager - 2,052,311 2,052,311

Amount due to Trustee - 90,327 90,327

Distributions payable

and to be reinvested - 4,425,136 4,425,136

Sundry payables and

accrued expenses - 147,724 147,724

Total financial liabilities - 6,715,498 6,715,498

2016

Assets

Deposits with financial

institutions 2,149,539,781 - 2,149,539,781

Cash at banks 102,409,171 - 102,409,171

Total financial assets 2,251,948,952 - 2,251,948,952

Liabilities

Amount due to Manager - 1,963,207 1,963,207

Amount due to Trustee - 97,319 97,319

Distributions payable

and to be reinvested - 5,302,517 5,302,517

Sundry payables and accrued

expenses - 138,326 138,326

Total financial liabilities - 7,501,369 7,501,369

Income, expense, gains

and losses

2017 2016

RM RM

Income, of which derived from:

- Interest income from held-to-maturity investments 79,228 1,019,417

- Interest income from loans and receivables 79,370,601 97,218,081

32

(b) Financial instruments that are not carried at fair value

Deposits with financial institutions

Cash at banks

Amount due to Manager

Amount due to Trustee

Distributions payable and to be reinvested

Sundry payables and accrued expenses

18. RISK MANAGEMENT POLICIES

Market risk

(i) Interest rate

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

careful selection of investments coupled with stringent compliance to investment 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 following are classes of financial instruments that are not carried at fair value and whose

carrying amounts are reasonable approximation of fair value due to their short period to maturity or

short credit period:

There are no financial instruments which are not carried at fair values and whose carrying amounts

are not reasonable approximation of their respective fair values.

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 rate 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.

33

Parallel shift in

yield curve by: 2017 2016

RM RM

+100 bps (1,769,610) (1,678,068)

-100 bps 1,791,122 1,864,712

Credit risk

(i) Credit quality of financial assets

As a % ofAs a % of net asset

Credit rating RM deposits value

2017

P1/MARC-1 2,097,358,685 100.00 99.79

2016

P1/MARC-1 2,149,539,781 100.00 95.77

Cash at banks are held for liquidity purposes and are not exposed to significant credit risk.

Liquidity risk

The result below summarised the interest rates sensitivity of the Fund’s NAV, or theoretical value

(applicable to money market deposit) due to the parallel movement assumption of the yield curve by

+100bps and -100bps respectively:

Sensitivity of the Fund’s NAV, or theoretical value

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 can invests up to 100% of the net asset value of

the Fund in money market/Islamic money market instruments, short-term fixed income/Islamic short-

term fixed income instruments and other permitted investments. As such the Fund would be exposed to

the risk of financial institutions defaulting on its repayment obligations which in turn would affect the

net asset value of the Fund.

For deposits with financial institutions, the Fund only makes placements with financial institutions

with sound rating. The following table presents the Fund᾽s portfolio of deposits by rating category as

at 31 March 2017 and 31 March 2016:

Liquidity risk is defined as the risk of being unable to raise funds or borrowings to meet payment

obligations as they fall due. The Fund maintains sufficient level of liquid assets, after consultation with

the Trustee, to meet anticipated payments and cancellation of units by unitholder. 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.

34

Objectives and assumptions

(i) For bonds

(a) For zero-coupon bonds, the nominal amount will be returned at maturity date.

(b)

Cash received from bonds are calculated as follows:

$ = cash received

R = coupon rate p.a.

F = coupon frequency

For zero coupon bonds, F = 0

At maturity: $ = Nominal

For F > 0

Before maturity: coupon payment, $ = Nominal * (R/F)

At maturity: maturity payment, $ = Nominal + (Nominal * R/F)

(ii) For money market instruments and deposits

$ = cash received

R = interest rate p.a.

F = time to maturity (days)

At maturity: $ = Nominal + (Nominal*R*F/365)

2017 2016

RM RM

Financial assets

Deposits with financial institutions 2,104,242,871 2,156,939,953

Cash at banks 11,185,637 102,409,171

Total assets 2,115,428,508 2,259,349,124

Financial liabilities

Other liabilities 2,374,839 2,198,852

Contractual cash flows (undiscounted)

The nominal amount and interest will be paid at maturity date. Cash received are calculated as

follows:

0 – 1 year

For each security in the Fund, the cash flows are projected according to its asset class. Each asset

class, if any, follows the calculation method as below:

For coupon-bearing bonds, the coupons could be paid on annual, bi-annual or quarterly

basis.

The following table presents undiscounted contractual cash flows from different asset and liability

classes in the Fund:

35

Single issuer risk

Regulatory risk

Management risk

Non-compliance risk

19. CAPITAL MANAGEMENT

The primary objective of the Fund’s capital management is to ensure that it maximises unitholders’

value by expanding its fund size to benefit from economies of scale and achieving growth in net asset

value from the performance of its investments.

No changes were made in the objective, policies or processes during the financial years ended 31 March

2017 and 31 March 2016.

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

certain percentage of its net asset value. Under such restriction, the risk exposure to the securities of any

single issuer is diversified and managed by issuer is managed based on internal/external ratings.

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

asset value of the Fund.

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

asset value 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.

The Fund manages its capital structure and makes adjustments to it, in light of changes in economic

conditions. To maintain or adjust the capital structure, the Fund may issue new or bonus units, make

distribution payment, or return capital to unitholders by way of redemption of units.

36

AmCash Management

STATEMENT BY THE MANAGER


8 May 2017

DATIN MAZNAH MAHBOB

For and on behalf of the Manager


I, DATIN MAZNAH MAHBOB, for and on behalf of the Manager, AmFunds Management

Berhad, for AmCash Management do hereby state that in the opinion of the Manager, the

accompanying statement of financial position, statement of comprehensive income, statement of

changes in equity, statement of cash flows and the accompanying notes are drawn up in accordance

with Malaysian Financial Reporting Standards and International Financial Reporting Standards so

as to give a true and fair view of the financial position of the Fund as at 31 March 2017 and the

comprehensive income, the changes in equity and cash flows of the Fund for the financial year then

ended.

37

38

TRUSTEE’S REPORT

39

DIRECTORY

Head Office 9th 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

Related Institutional Unit Trust Agent

AmBank (M) Berhad Head Office

Company No. 8515-D 31st Floor, Menara AmBank

No. 8 Jalan Yap Kwan Seng, 50450 Kuala Lumpur

AmInvestment Bank Berhad Head Office

Company No. 23742-V 22nd Floor, Bangunan AmBank Group

55 Jalan Raja Chulan, 50200 Kuala Lumpur

For more details on the list of IUTAs, please contact the Manager.

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 - Thursday),

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

Semi-Annual Report28 February 2015

03 2132 2888 | aminvest.com | [email protected]

AmFunds Management Berhad (155432-A)

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