mutual funds interim report 2019 - assetlineassetline mutual funds: assetline income fund assetline...

INTERIM REPORT 2019

MUTUAL FUNDS

ASSETLINE MUTUAL FUNDS INTERIM REPORT FOR THE SIX MONTHS PERIOD ENDED

SEPTEMBER 30, 2019

Table of Contents

1. Corporate Information 1

2. Fund Manager’s Report 2

3. Fund Report of Assetline Income Fund

Fund Performance – Assetline Income Fund 10

Financial Statements 12

4. Fund Report of Assetline Gilt Edged Fund

Fund Performance – Assetline Gilt Edged Fund 17


5. Fund Report of Assetline Income Plus Growth Fund

Fund Performance – Assetline Income Plus Growth Fund 24


1

01. Corporate Information

Assetline Mutual Funds: Assetline Income Fund

Assetline Gilt Edged Fund

Assetline Income Plus Growth Fund

MANAGEMENT COMPANY & REGISTRAR

Assetline Capital (Private) Limited

Registered Office: Principal Place of Business:

No. 75 No. 120, 120A

Hyde Park Corner Pannipitiya Road

Colombo 02 Battaramulla

Sri Lanka Sri Lanka

BOARD OF DIRECTORS OF THE MANAGEMENT COMPANY

Ms. R.M.A.S. Parakrama (Chairperson)

Mr. K.G. Vairavanathan

Mr. A.Y.D. De Silva

TRUSTEE & CUSTODIAN AUDITORS & TAX CONSULTANTS

Deutsche Bank AG B.R. De Silva & Company

No. 86 No. 22/4

Galle Road Vijaya Kumaranatunga Mawatha

Colombo 03 Colombo 05

Sri Lanka Sri Lanka

BANKERS

Commercial Bank of Ceylon PLC

Commercial House

No. 21

Sir Razik Fareed Mawatha

Colombo 01

Sri Lanka

National Development Bank PLC

No. 40

Navam Mawatha

Colombo 02

Sri Lanka

Sampath Bank PLC

No. 110

Sir James Peiris Mawatha

Colombo 02

Sri Lanka

Deutsche Bank AG

No. 86

Galle Road

Colombo 03

Sri Lanka

Nations Trust Bank PLC

No. 242

Union Place

Colombo 02

Sri Lanka

Seylan Bank PLC

Seylan Towers

No. 90

Galle Road

Colombo 03

Sri Lanka

Hatton National Bank PLC

HNB Towers

No. 479

T. B. Jayah Mawatha

Colombo 10

Sri Lanka

People’s Bank

No. 75

Sir Chittampalam A. Gardiner Mawatha

Colombo 02

Sri Lanka

2

02. Fund Manager Report

It is with great pleasure that we submit to our valued investors the Half Yearly Fund Management Report

for Assetline Mutual Fund (AMF) for the period of 1st April 2019 to 30th September 2019. Despite various

challenges that arose during the period, including the Easter Sunday terrorist attacks which saw panic

selling dragging the indices down, falling interest rates after introduction of deposit ceiling rates by the

Central Bank of Sri Lanka, deteriorating investor sentiment and government securities market with foreign

investors exiting, we believe that we have delivered value to our investors. Funds were deployed after in-

depth analysis of interest rates & liquidity with a focus on credit ratings to balance risk and return.

We followed an investment strategy of retaining the higher yield for a maximum period by locking the

funds in the medium-term bank deposits under the backdrop of reducing interest rates for bank deposits

due to rate capping by the Central Bank of Sri Lanka after April 2019.

Our Funds

AMF manages three types of ‘Open-Ended’ funds which cater to the different risk perceptions of investors, Assetline Income Fund (AINF), Assetline Gilt-Edged Fund (AGEF) and the Assetline Income Plus Growth

Fund (AIGF). AINF suits investors who favor a moderate risk profile and a short-term investment horizon,

AGEF is for investors with low risk appetite and a mixed time horizon; whereas AIGF is for investors with

a high-risk appetite and a long-term investment horizon. AINF and AGEF are free from front-end and exit

fees, whilst AIGF is subject to a front-end fee of 1% and an exit fee of 1% for withdrawals within 2 years.

As at 30th September 2019 AMF achieved a cumulative NAV of LKR 2.06 Bn invested by 1,325 unit

holders. AINF is the largest fund managed by Assetline Capital (Pvt) Ltd with a NAV of LKR 1.9 Bn,

followed by AIGF and AGEF with LKR 140.7 Mn. and LKR 10.1 Mn respectively.

ECONOMIC EXPECTAIONS FOR 2019

Still sluggish global growth

Global economic growth has weakened to 2.6% in 2019 which is 0.3% below the January 2019 projections

while reflecting weaker-than expected international trade and investment climate at the begining of the

year. However, global economic growth is forecasted to gradually rise to 2.8% in 2021 with a modest

recovery in emerging markets and developing economies which were previously affected by financial

market pressure. However, emerging markets and developing economies growth remains constrained by

subdued investments, which is dampening potential growth prospects and impeding progress toward

achieveing the sustainable development goals. Moreover, risks remain firmly on the upside including the

possibility of escalating trade tensions, sharper-than-expected slowdowns in major economies, and

renewed financial stress in emerging market and developing economies. Meanwhile, rising debt

constrains the ability of emerging market and developing economy governments to support economic

activity in the event of adverse developments, as well as finance growth-enhancing investments. This

highlights the need for policy actions to undertake reforms to boost private investments and productivity

growth. These reforms are particularly urgent in low-income countries, which face more significant

challenges today than they did in the early 2000s.

3

Region Wise: Real GDP Growth

The economic outlook for the region is solid

The South Asian region continued to remain solid in 2018, posting GDP growth of 7% due to robust private

domestic demand with moderate inflation. Domestic demand growth is expected to remain robust with

support from monetary and fiscal policy, particularly in India. Growth in India is projected to accelerate to

7.5% in FY19/20 and expected to stay there over the next two fiscal years (fiscal year starts on 1st April).

Economic growth in Pakistan is anticipated to slow down further to 2.7% in FY19/20 (fiscal year begins on

1st of July) mainly due to remaining depression in domestic demand. In Bangladesh, economic growth is

forecasted to accelerate to 7.4% in FY19/20 (fiscal year begins on 1st of July). This growth will be mainly

driven by strong infrastructure spending and solid private investments with some easing of infrastructure

constraints. Economic activity in Sri Lanka is expected to accelerate to 3.5% in 2019 and to average 3.6%

over the 2020 and 2021. This modest acceleration will be supported by a pickup in services sector activity

and solid infrastructure investments. However, recent security related incidents can have an impact on

the Sri Lankan economy in 2019.

GDP and Sectorial Growth from 2013 – 1H2019

* YoY Change

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2016 2017 2018E 2019F 2020F 2021F

South Asia Europe & Central Asia Middle East & North Africa

East Asia & Pacific Sub-Saharan Africa Latin America & Caribbean

World Sri Lanka

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2013 2014 2015 2016 2017 2018 1H2019*

Agriculture, Forestry & Fishing Industries

Services GDP Growth (RHS)

Source: World Bank

Source: CBSL

4

Easter Sunday attack puts weight on economic slowdown in Sri Lanka

The real GDP of Sri Lanka grew by 1.6% YoY in the 2nd quarter of 2019 following the growth of 3.7% YoY

which recorded during the 1st quarter of 2019. We can witness a noteworthy slowdown in the

performance of service related activities mainly due to the impact of Easter Sunday attacks. Moreover,

agriculture and industry related activities were grown lethargically during the 2nd quarter of 2019, in

comparison to the 1st quarter of 2019. Therefore, economic growth is likely to remain subdued in 2019 as

the security-related incidents are weighing on confidence and activity.

Easter Sunday attack will affect the revenue targets in 2019

Fiscal operations of the Government moderated during the 1st seven months of 2019 amidst the

Government’s efforts towards a revenue-based fiscal consolidation. Total revenue and grants declined by

4.8% YoY in the 1st seven months of 2019 in comparison to the same period in 2018. Moreover, tax

revenue and non-tax revenue declined by 4.0% and 9.5% YoY in the 1st seven months of 2019 in

comparison to the corresponding period in 2018 respectively. Meanwhile, government expenditure

increased by 11.0% YoY whilst recurrent and capital expenditure increasing by 10.2% and 13.9% YoY

respectively in the 1st seven months of 2019 in comparison to the same period of 2018. Aftermath of

Easter Sunday attack put pressure on fiscal operation due to the implementation of relief package to

facilitate the recovery of affected people, strengthening of security measures to restore “normalcy”, providing interest subsidy on soft loans to the affected sectors and reconstruction of the affected public

infrastructure including places of worship. Moreover, provision of tax concession to the directly affected

sectors including tourism industry further devasted the government revenue generation.

Government Fiscal Operations from 2013 – 7M2019

(3,000)

(2,000)

(1,000)

-

1,000

2,000

3,000

Revenue andGrants (LKR

Bn)

Tax Revenue(LKR Bn)

Non-taxRevenue(LKR Bn)

Grants (LKRBn)

Expenditure &Lending MinusRepayments

(LKR Bn)

RecurrentExpenditure

(LKR Bn)

CapitalLending MinusRepayments

(LKR Bn)

2013 2014 2015 2016 2017 2018 7M2019

Source: CBSL

5

Balance of Trade as a % GDP

* GDP data is available for the 1H2019

External sector remains resilient supported by an improved trade balance

Trade balance has narrowed to USD 4.9 Bn during the 1st eight months of 2019 over the previous year

supported by a significant contraction in the growth of imports and a modest growth of exports. Tourist

arrivals observed a notable recovery from the impact of the Easter Sunday attacks. However, we can

witness a notable decline in YoY growth numbers of tourist arrivals in comparison to 2018. On a

cumulative basis, workers’ remittances increased by 4.5% YoY in rupee terms whilst decreasing by 7.6%

YoY in USD terms during the 1st eight months of 2019 compared to the same period of 2018.

BOP Position, USD Bn

* Current account balance is available for 1H2019

-12.0%

-11.5%

-11.0%

-10.5%

-10.0%

-9.5%

-

5,000

10,000

15,000

20,000

25,000

2013 2014 2015 2016 2017 2018 7M2019

Exports (USD Mn) Imports (USD Mn) Balance of Trade as a % of GDP*

Source: CBSL

Source: CBSL

(12.0)

(10.0)

(8.0)

(6.0)

(4.0)

(2.0)

-

2.0

4.0

2013 2014 2015 2016 2017 2018 8M2019

Trade Balance Current Account Balance* Overall Balance

6

Notable contraction in import growth caused the improvement in months of imports

Even though, foreign investment in government securities has recorded net outflows so far during the

year, there were significant project loan inflows to the government in August 2019, with a number of

social development and infrastructure projects receiving disbursements. Further, CBSL continued to

purchase dollars except for August with a total 9-month net purchases tally of approx. USD 284.8 Mn

during 2019. This leads to the overall balance recording a surplus of USD 1.5 Bn in the 1st eight months of

2019. Reflecting these dynamics, gross official reserves amounted to USD 8.5 Bn, equivalent to 5.1 months

of imports as at end August 2019.

CCPI Inflation of Headline and Core, YoY Basis

Inflation to remain at desired levels despite temporary supply side pressures

Headline inflation, as measured by the year-on-year change of NCPI (National Consumer Price Index), is

projected to stabilize well within the desired range of 4%-6% supported by appropriate policy measures

and well anchored inflation expectations. Moreover, food inflation which attributed largely to the

acceleration of headline inflation of NCPI will further cause the elevation of headline inflation during the

rest of 2019. Amidst subdued demand conditions, core inflation is expected to revert to low levels from

January 2020, mainly with the dissipation of the effect of the one-time large adjustment to house rentals

in early 2019.

Rupee appreciation will have a positive impact on the economy

With a certain amount of inflows coming into the system by the way of funding such as long-term loan

and International Sovereign bonds have supported the appreciation of rupee so far during the year. The

LKR has strengthened appreciatively by 1.1% against USD during year up to 14th October 2019.

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

Jul-

16

Jan

-17

Jul-

17

Jan

-18

Jul-

18

Jan

-19

Jul-

19

CCPI (HI) CCPI (Core)

Source: Department of Census and Statistics

7

Movements in Exchange Rate

Policy Rates Movements Vs AWPLR

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0Jan

-13

Ap

r-13

Jul-

13

Oct-

13

Jan

-14

Ap

r-14

Jul-

14

Oct-

14

Jan

-15

Ap

r-15

Jul-

15

Oct-

15

Jan

-16

Ap

r-16

Jul-

16

Oct-

16

Jan

-17

Ap

r-17

Jul-

17

Oct-

17

Jan

-18

Ap

r-18

Jul-

18

Oct-

18

Jan

-19

Ap

r-19

Jul-

19

LKR per US Dollar

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Jan

-13

Ap

r-13

Jul-

13

Oct-

13

Jan

-14

Ap

r-14

Jul-

14

Oct-

14

Jan

-15

Ap

r-15

Jul-

15

Oct-

15

Jan

-16

Ap

r-16

Jul-

16

Oct-

16

Jan

-17

Ap

r-17

Jul-

17

Oct-

17

Jan

-18

Ap

r-18

Jul-

18

Oct-

18

Jan

-19

Ap

r-19

Jul-

19

SDFR SLFR SRR AWPLR

Source: CBSL

Source: CBSL

8

Movements in AWDR and AWFDR

1 Yr T-Bill Rate Vs 1 Yr US Rate

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%Jan

-13

Ap

r-13

Jul-

13

Oct-

13

Jan

-14

Ap

r-14

Jul-

14

Oct-

14

Jan

-15

Ap

r-15

Jul-

15

Oct-

15

Jan

-16

Ap

r-16

Jul-

16

Oct-

16

Jan

-17

Ap

r-17

Jul-

17

Oct-

17

Jan

-18

Ap

r-18

Jul-

18

Oct-

18

Jan

-19

Ap

r-19

Jul-

19

AWDR AWFDR

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1-Apr-13 1-Apr-14 1-Apr-15 1-Apr-16 1-Apr-17 1-Apr-18 1-Apr-19

1 Yr US Rate 1 Yr LKR Rate

Source: CBSL

Source: Bloomberg

9

Credit Granted by Commercial Banks to Private Sector

Fund Management Team

Assetline Capital (Pvt) Ltd.

Management Company

Source: CBSL

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

(100,000)

(50,000)

-

50,000

100,000

150,000

200,000

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Monthly Change in Credit (LKR Mn) YoY Change in Credit

10

03. Fund Report of Assetline Income Fund

Fund Performance – Assetline Income Fund (AINF)

The NAV of the Assetline Income Fund (AINF) as

at 30th September 2019 was Rs. 1.9 Bn. AINF

recorded a 9.68 % financial-year yield and 9.55%

Month-on-Month yield (MOM), while the

number of unit holders were 1,043.

The NAV was Rs. 2.99 Bn on 31st March 2019 and

fluctuated with in a higher and lower level

corridor of Rs. 3.86 Bn and Rs. 1.9 Bn respectively

during the period ended 30th September 2019.

The financial-year yield of AINF continued to

grow from the month of April, reaching 9.68% on

30th September 2019 while it was 9.52% as at 31st

March 2019. Despite having the deposit interest

rate cap imposed by the Central Bank of Sri Lanka

from 29th April 2019, AINF was able to maintain

the financial-year yield above 9.52% which was

the prevailing yield as of 31st March 2019, during

the period ended 30th September 2019. Given

our opinion of future interest rate movements,

funds were invested in a mixed tenor up to one

year.

The number of unit holders in AINF reduced by

11.16% to 1,043 from 1,174 during the 6-month

period.

The AINF maturities are well diversified with

maturity profiles varying from 1-4 weeks to 6-12

months with the view to maximizing the yield of

the fund. The majority of the investments are in

the “6-12 months” maturity bucket which is 58.0% of NAV while “3-6 months” maturities are at 27.0%.

The AINF has an investment mix of fixed deposits

and money market savings accounts, with 85.0%

of the funds invested in fixed deposits.

All the funds of AINF were invested in counter

parties having “A-” credit rating and above. 46.0% of funds are invested in counter parties

with “AA+” followed by “A+” and “AA-”, at 31.0%

and 12.0% respectively.

(Figure 1: NAV and financial-year yield of AINF)

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

4,500.00

9.20%

9.30%

9.40%

9.50%

9.60%

9.70%

9.80%

9.90%

10.00%

10.10%

Ma

rch

31

, 2

01

9

Ap

ril

30

,

20

19

Ma

y 3

1,

20

19

Jun

e 3

0,

20

19

July

30

,

20

19

Au

gu

st

31

, 2

01

9

Se

pte

mb

er

30

,

20

19 YTD yield %

NAV ( Mn )

AINF - NAV (Mn) & YTD Yield (%)

11

(Figure 2: Maturity profile of AINF)

(Figure 3: Asset allocation of AINF as at 30th September 2019)

(Figure 4: Credit profile of AINF)

3-6 Months

27%

6-12 Months

58%

1-4 Weeks

15%

Maturity Profile - AINF

Fixed Deposit

85%

Money Market Savings

A/c

15%

Asset Allocation - AINF

Rating

Fitch

Amount (LKR) As % of

NAV

AA+ 873,670,100.68 46%

AA- 226,982,219.14 12%

A+ 599,696,593.28 32%

A- 199,921,004.49 10%

Total 1,900,269,917.60 100%

ASSETLINE INCOME FUND

Statement of Comprehensive Income

(all amounts in Sri Lanka Rupees)

Note

Investment Income

Interest income 01 142,593,721 234,921,578

Total investment income 142,593,721 2,196,262,089

Expenses

Management fee (6,958,023) (11,304,803)

Trustee and custodian fee (3,773,277) (6,177,439)

Audit fee (129,290) (189,749)

Professional fee (17,548) (35,000)

Other operating expenses (305,340) (770,200)

Total operating expenses (11,183,478) (18,477,190)

Net operating profit 131,410,242 216,444,387

Profit after deductions and before tax 131,410,242 216,444,387

Income tax expense - -

Increase in net assets attributable to unitholders 131,410,242 216,444,387

For the year ended

31 March 2019

(Audited)

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

12


Statement of Financial Position


Note

ASSETS

Current assets

Cash and cash equivalents 5,431,227 12,667,518

Financial assets at amortised cost - loans and advances 02 1,900,398,303 2,980,285,119

Income tax receivables 42,338,456 42,338,456

Total assets 1,948,167,986 3,035,291,094

LIABILITIES

Current liabilities

Accrued expenses and other payables 1,403,280 2,482,279

Liabilities (Excluding net assets attributable to unitholders) 1,403,280 2,482,279

UNITHOLDERS' FUNDS

Net assets attributable to unitholders 1,946,764,706 3,032,808,814

Total unitholders' funds and liabilities 1,948,167,986 3,035,291,094

0

……………………… ………………………Managing Director Director

Management Company Management Company

As at 30 September

2019 (Unaudited)

As at 31 March 2019

(Audited)

13


Statement of Changes in Unitholders' Funds


Unitholders' funds at beginning of the period 3,032,808,814 83,228,749


Received on unit creations 9,530,411,034 21,119,693,991

Paid on unit redemptions (10,747,865,385) (18,386,558,312)

Unitholders' funds at end of the period 1,946,764,706 3,032,808,814

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

14


Statement of Cash Flows


Cash flows from operating activities

Proceeds from sale of loans and receivables 26,734,955,074 35,001,677,329

Purchase of loans and receivables (25,713,681,186) (37,801,659,377)

Interest received 201,206,647 104,649,092

Management fees paid (7,574,834) (17,763,450)

Other expenses paid (4,687,643) (9,554,487)

Net cash flows from operating activities 1,210,218,059 (2,722,650,893)

Cash flows from financing activities

Proceeds from subscription by unitholders 9,530,411,034 21,119,693,991

Payment for redemption by unitholders (10,747,865,385) (18,386,558,312)

Net cash flows from financing activities (1,217,454,350) 2,733,135,679

Net increase / (decrease) in cash and cash equivalents (7,236,291) 10,484,785

Cash and cash equivalents at beginning of the period 12,667,518 2,182,733

Net increase / (decrease) in cash and cash equivalents (7,236,291) 10,484,785

Cash and cash equivalents at end of the period 5,431,227 12,667,518

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

15


Notes to the Financial Statements

(All amounts in notes are shown in Sri Lanka Rupees)

01 Investment income

Interest income from fixed income securities

Interest income from fixed deposits 120,834,608 200,841,092

Interest income from money market savings 21,759,112 34,080,485

Total Interest income from fixed income securities 142,593,721 234,921,578

02 Financial assets at amortised cost - loans and advances

As at 30 September

2019

(Unaudited)

As at 31 March 2019

(Audited)

Investment in money market savings 284,187,536 549,701,624

Investment in fixed deposits 1,616,210,768 2,430,583,495

Total financial assets at amortised cost 1,900,398,303 2,980,285,119

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

16

17

04. Fund Report of Assetline Gilt Edged Fund

Fund Performance – Assetline Gilt Edged Fund (AGEF)

The NAV of the Assetline Gilt Edged Fund (AGEF)

as at 30th September 2019 was Rs. 10.14 Mn.

AGEF recorded a 5.22% financial-year yield and

0.01% month-on -month (MOM) yield, while the

number of unit holders were 154.

AGEF’s NAV continued to decrease as low of Rs.

10.14 Mn on 30th September 2019 from the level

where it was Rs. 61.14 Mn as of 31st March due

to the loss of attractive net return with the

implementation of new tax policy to withdraw

the notional tax and introduction of tax on

government securities for individual investors

with effect from 01st of April 2018.

The return was comparatively low due to lower

government security yields and the fixed costs of

the fund.

The number of unit trust holders reduced from

378 to 154 during the first two quarters of the

current financial year a 59.26% reduction.

The AGEF maturities are invested for less than 1-

week period to be in line with the Management

decision to close down this fund by end of

October 2019.

All the funds of AGEF are invested in REPO’s to avoid any fair value loss.

(Figure 1 : NAV and financial-year yield of AGEF)

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Ma

rch

31

,

20

19

Ap

ril

30

,

20

19

Ma

y 3

1,

20

19

Jun

e 3

0,

20

19

July

30

, 2

01

9

Au

gu

st 3

1,

20

19

Se

pte

mb

er

30

, 2

01

9

YTD yield %

NAV ( Mn )

AGEF - NAV (Mn) & YTD Yield (%)

18

(Figure 2 : Maturity profile of AGEF as at 30th September 2019)

(Figure 3 : Asset allocation of AGEF as at 30th September 2019)

(Figure 4 : Credit profile of AGEF as at 30th September 2019)

Within 1 Week

100%

Maturity Profile - AGEF

Treasury Bond/Bill

REPO

100%

Asset Allocation - AGEF

Risk Free

100%

Credit Profile -AGEF

ASSETLINE GILT EDGED FUND



Note

Investment Income

Interest income 01 1,651,486 5,000,898

Total investment income 1,651,486 5,000,898

Expenses

Management fee (94,918) (288,794)

Trustee and custodian fee (211,796) (464,561)

Audit fee (129,290) (189,749)



Total operating expenses (476,302) (1,026,853)





1,175,1840

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

19




Note

ASSETS

Current assets

Cash and cash equivalents 272,462 138,609

Financial assets at amortised cost - loans and advances 02 10,038,144 61,337,963


Total assets 21,802,728 72,968,694

LIABILITIES

Current liabilities

Accrued expenses and other payables 170,755 332,364

Liabilities (Excluding net assets attributable to unitholders) 170,755 332,364

UNITHOLDERS' FUNDS

Net assets attributable to unitholders 21,631,973 72,636,330

Total unitholders' funds and liabilities 21,802,728 72,968,694

(1) 1

……………………… ……………………… Managing Director Director


As at 30 September

2019

(Unaudited)

As at 31 March 2019

(Audited)

20




Unitholders' funds at beginning of the period 72,636,330 14,685,034


Received on unit creations 315,250 56,223,750

Paid on unit redemptions (52,494,791) (2,246,499)

Unitholders' funds at end of the period 21,631,973 72,636,330

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

21





Proceeds from sale of loans and receivables 295,067,530 439,237,705

Purchase of loans and receivables (243,827,093) (497,514,224)


Management fees paid (116,383) (287,331)

Other expenses paid (521,529) (720,092)

Net cash flows from operating activities 52,313,392 (54,342,510)


Proceeds from subscription by unitholders 315,250 56,223,750

Payment for redemption by unitholders (52,494,791) (2,246,500)

Net cash flows from financing activities (52,179,540) 53,977,250

Net increase / (decrease) in cash and cash equivalents

133,852 (365,260)

Cash and cash equivalents at beginning of the period 138,609 503,869

Net increase / (decrease) in cash and cash equivalents 133,853 (365,260)

Cash and cash equivalents at end of the period 272,462 138,609

For the period from

1 April 2019 to 30

September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

22



(All amounts in notes are shown in Sri Lanka Rupees)


Interest income from repurchase agreements 1,651,486 5,000,898

1,651,486 5,000,898


Investment in repurchase agreements 10,038,144 61,337,963

Total financial assets at amortised cost 10,038,144 61,337,963

For the year ended

31 March 2019

(Audited)

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

As at 30 September

2019

(Unaudited)

As at 31 March 2019

(Audited)

23

24

05. Fund Report of Assetline Income Plus Growth Fund

Fund Performance – Assetline Income Plus Growth Fund (AIGF)

The NAV of the Assetline Income Plus Growth

Fund (AIGF) as at 30th September 2019 was

140.75 Mn and the fund recorded 8.87%

financial-year yield and 7.44% Month-on-Month

(MOM) yield. The number of unit holders were

128.

AIGF financial year yield decreased, from 10.19%

to 8.87% during the period. AIGF’s highest yield recorded was 10.66% in April 2019.

The maturities of AIGF are diversified ranging

from short term to medium term with 41.0% of

the investments maturing in “6-12” Months”

followed by 32.0% of the investments maturing

in the “1-4” weeks” category.

All the investments of the AIGF are placed with

counterparties with “A-” rating and above, while 42% of the investments are invested in

counterparties with credit rating of either “AA+” or “AA-”.

(Figure 1 : NAV and financial-year yield of AIGF)

-

50.00

100.00

150.00

200.00

250.00

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

Ma

rch

31

,

20

19

Ap

ril

30

,

20

19

Ma

y 3

1,

20

19

Jun

e 3

0,

20

19

July

30

,

20

19

Au

gu

st 3

1,

20

19

Se

pte

mb

er

30

, 2

01

9

YTD yield %

NAV ( Mn )

AIGF - NAV (Mn) & YTD Yield (%)

25

(Figure 2 : Maturity profile of AIGF as at 30th September 2019)

(Figure 3 : Asset allocation of AIGF as at 30th September 2019)

Rating

Ratings

Total

Fitch ICRA

AA+ 31% - 31%

AA- 11% - 11%

A+ 32% - 32%

A - 7% 7%

A- 11% 8% 19%

(Figure 4 : Credit profile of AIGF as at 30th September 2019)

6-12 Months

41%

1-3 Months

7%

3-6 Months

20%

1-4 Weeks

32%

Maturity Profile - AIGF

Debenture

15%

Fixed Depostis

53%

Money Market Savings

A/c

32%

Asset Allocat ion - AIGF

ASSETLINE INCOME PLUS GROWTH FUND



Note

Investment Income

Interest income 01 6,358,191 17,075,193

Dividend income - 17,787

02 1,755,931 5,534,303

Total investment income 8,114,122 22,627,283

Expenses

Management fee (777,977) (2,201,365)

Trustee and custodian fee (369,328) (849,149)

Audit fee (129,290) (189,749)



Total operating expenses (1,313,396) (3,327,317)





For the period from

1 April 2019 to

30 September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

Net gains on financial assets at fair value through

profit or loss

26




Note

ASSETS

Current assets

Cash and cash equivalents 177,543 72,938

Financial assets at amortised cost - loans and advances 03 119,823,374 179,130,039

Financial assets held at fair value through profit or loss 04 21,056,379 30,462,298


Total assets 142,679,297 211,287,276

LIABILITIES

Current liabilities

Accrued expenses and other payables 310,419 517,684

Liabilities (Excluding net assets attributable to unitholders) 310,419 517,684

UNITHOLDERS' FUNDS

Net assets attributable to unitholders 142,368,878 210,769,592

Total unitholders' funds and liabilities 142,679,297 211,287,276

……………………… ………………………

Managing Director Director


As at 30 September

2019

(Unaudited)

As at 31 March 2019

(Audited)

27




Unitholders' funds at beginning of the period 210,769,592 189,631,747


Received on unit creations 41,089 2,162,443

Paid on unit redemptions (75,242,529) (324,565)

Unitholders' funds at end of the period 142,368,878 210,769,592

For the period from

1 April 2019 to 30

September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

28





Proceeds from sale of financial instruments at fair value

through profit or loss 10,970,000 2,026,376

Purchase of financial instruments at fair value through profit or loss (15,067) -

Proceeds from sale of loans and receivables 684,561,098 442,327,477

Purchase of loans and receivables (624,543,886) (461,526,204)

Dividend received - 17,787


Management fees paid (839,537) (2,264,227)

Other expenses paid (681,123) (1,103,489)

Net cash flows from operating activities 75,306,044 (2,298,263)


Proceeds from subscription by unitholders 41,089 2,162,443

Payment for redemption by unitholders (75,242,529) (324,565)

Net cash flows from financing activities (75,201,440) 1,837,878


Cash and cash equivalents at beginning of the period 72,938 533,324


Cash and cash equivalents at end of the period 177,543 72,938

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

For the year ended

31 March 2019

(Audited)

29





Interest income from fixed income securities

Interest income from fixed deposits 6,358,191 17,075,193

Total interest income from fixed income securities 6,358,191 17,075,193

02 Net gain on financial assets held at fair value through profit or loss

Net gain on financial assets held for trading 233 2,187,991

Net gain on financial assets designated as at fair value through 1,755,698 3,346,312

profit or loss 1,755,931 5,534,303

Net realised gain on financial assets at fair value through profit or loss 1,309,439 2,865,195

Net unrealised gain on financial assets at fair value through profit or loss 446,492 481,117

1,755,931 3,346,312

(a) Net realised gain on financial assets at fair falue through profit or loss:

Interest income from debentures 1,309,439 2,865,195

1,309,439 2,865,195


Investment in money market savings 44,725,181 16,671,633

Investment in fixed deposits 75,098,193 162,458,406

Total loans and receivables 119,823,374 179,130,039

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

For the period from

1 April 2019 to

30 September 2019

(Unaudited)

As at 30 September

2019

(Unaudited)

As at 31 March 2019

(Audited)

For the year ended

31 March 2019

(Audited)

For the year ended

31 March 2019

(Audited)

30


Notes to the Financial Statements (Contd...)


04 Financial assets at fair value through profit or loss

Financial assets held for trading

Equity securities (see note (a) below) 15,300 -

Total financial assets held for trading 15,300 -

Financial assets designated at fair value through profit or loss:

Debentures (see note (b) below) 21,041,079 30,462,298

Total Financial assets designated at fair value through profit or loss 21,041,079 30,462,298

Total financial assets at fair value through profit or loss 21,056,379 30,462,298

a) Investment in equity securities:

As at 30 September 2019

Number Cost Market Percentage of

Company of Shares Value Net Assets

Sampath Bank Plc 100 15,067 15,300 0.01% 15,067 15,300

As at 31 March 2019

Nill

b) Investment in debentures

As at 30 September 2019

Cost Market Value Percentage of

Net Assets

Merchant Bank of Sri Lanka & Finance PLC 12-Nov-19 5,000,000 5,311,500 3.8%

Lanka Orix Leasing Company Ltd 24-Nov-19 5,000,000 5,102,694 3.6%

First Capital Treasuries Ltd. 6-Feb-20 10,000,000 10,626,885 7.6% 20,000,000 21,041,079

As at 31 March 2019

Cost Market Value Percentage of

Net Assets

Softlogic Finance PLC 29-Aug-19 10,970,000 10,883,942 5.2%

Merchant Bank of Sri Lanka & Finance

PLC12-Nov-19 5,000,000 4,906,670

2.3%

Lanka Orix Leasing Company Ltd 24-Nov-19 5,000,000 4,913,629 2.3%

First Capital Treasuries Ltd. 6-Feb-20 10,000,000 9,758,057 4.7%

30,970,000 30,462,298

Maturity

Date

Maturity

Date

As at 30 September

2019

(Unaudited)

As at 31 March 2019

(Audited)

31

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