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PMB SHARIAH SMALL-CAP FUND 2016/2017

ii

PMB Investment Berhad

No units will be issued or sold on the basis of this Prospectus later than one (1) year after the

date of this Prospectus.

Investors should note that they may seek recourse under the Capital Markets and Services Act,

2007 for breaches of securities laws and regulations including any statement in this Prospectus

that is false, misleading, or from which there is a material omission; or for any misleading or

deceptive act in relation to this Prospectus or the conduct of any other person in relation to the

Fund.

The Fund has been certified as being Shariah-compliant by the Shariah Adviser appointed for

the Fund.

Responsibility Statement

This Prospectus has been reviewed and approved by the directors of PMB Investment Berhad and they

collectively and individually accept full responsibility for the accuracy of the information. Having made

all reasonable inquiries, they confirm to the best of their knowledge and belief, there are no false or

misleading statements, or omission of other facts which would make any statement in this Prospectus

false or misleading.

Statements of Disclaimer

The Securities Commission Malaysia has authorized PMB Shariah Small-Cap Fund (“the Fund”) and a

copy of this Prospectus has been registered with the Securities Commission Malaysia.

The authorization of the Fund, and registration of this Prospectus, should not be taken to indicate that

the Securities Commission Malaysia recommends the Fund or assumes responsibility for the correctness

of any statement made, opinion expressed or report contained in this Prospectus.

The Securities Commission Malaysia is not liable for any non-disclosure on the part of PMB Investment

Berhad responsible for the Fund and takes no responsibility for the contents in this Prospectus. The

Securities Commission Malaysia makes no representation on the accuracy or completeness of this

Prospectus, and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole

or any part of the contents.

INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF

THE INVESTMENT. IF INVESTORS ARE UNABLE TO MAKE THEIR OWN EVALUATION, THEY ARE

ADVISED TO CONSULT PROFESSIONAL ADVISERS.


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CONTENTS

1. GLOSSARY OF TERMS/ABBREVIATIONS 1-4

2. CORPORATE DIRECTORY 5-7

3. KEY DATA/INFORMATION SUMMARY

8-10

3.1 FUND INFORMATION 8

3.2 FEES, CHARGES AND EXPENSES 9

3.3 ADDITIONAL INFORMATION 10

4. RISK FACTORS 11-12

4.1 GENERAL RISKS OF INVESTING IN THE FUND 11

4.2 SPECIFIC RISKS ASSOCIATED WITH INVESTMENT PORTFOLIOS 12

5. THE FUND 13-20

5.1 FUND PROFILE 13

5.2 INVESTMENT OBJECTIVE 13

5.3 INVESTMENT STRATEGY 13

5.4 ASSET ALLOCATION 13

5.5 TEMPORARY DEFENSIVE POSITIONS 14

5.6 RISKS OF INVESTING IN THE FUND 14

5.7 RISK MANAGEMENT 14

5.8 PERFORMANCE BENCHMARK 14

5.9 PERMITTED INVESTMENT 15

5.10 INVESTMENT RESTRICTIONS AND LIMITS 15

5.11 VALUATION OF INVESTMENTS 16

5.12 POLICY ON GEARING 17

5.13 SHARIAH-COMPLIANT AND SHARIAH APPROVAL PROCESS 18

6. FEES, CHARGES AND EXPENSES 21-23

6.1 CHARGES 21

6.2 FEES 22

6.3 EXPENSES 23

6.4 REBATE AND COMMISSION 23


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7. TRANSACTION INFORMATION 24-33

7.1 TRANSACTION DETAILS 24

7.2 PAYMENT METHODS 25

7.3 COOLING-OFF POLICY 25

7.4 REPURCHASING/REDEEMING AN INVESTMENT 26

7.5 CHANNELS TO PURCHASE AND REDEEM UNITS 26

7.6 SWITCHING BETWEENS FUNDS 26

7.7 TRANSFER OF UNITS 27

7.8 A QUICK GUIDE ON HOW TO BUY, SELL, SWITCH & TRANSFER 28

7.9 INCOME DISTRIBUTION AND REINVESTMENT POLICIES 29

7.10 DETERMINATION OF PRICE 30

8. MANAGEMENT OF THE FUND

34-42

8.1 THE MANAGER’S PROFILE 34

8.2 BOARD OF DIRECTORS 34

8.3 MANAGEMENT TEAM 34

8.4 SUMMARY OF FINANCIAL POSITION 36

8.5 ROLES, DUTIES AND RESPONSIBILITIES OF THE MANAGEMENT

COMPANY

36

8.6 MANAGER’S DELEGATE 37

8.7 MATERIAL LITIGATION AND ARBITRATION 37

8.8 INVESTMENT COMMITTEE 37

8.9 SHARIAH ADVISER OF THE FUND 39

8.10 INVESTMENT MANAGEMENT TEAM 40

9. THE TRUSTEE OF THE FUND

43-45

9.1 COMPANY PROFILE 43

9.2 TRUSTEE’S STATEMENT OF RESPONSIBILITY 44

9.3 ROLES, DUTIES AND RESPONSIBILITIES OF THE TRUSTEE 44

9.4 TRUSTEE’S DECLARATION 45

9.5 TRUSTEE’S OBLIGATION 45


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10. SALIENT TERMS OF THE DEED

46-50

10.1 RIGHTS AND LIABILITIES OF A UNIT HOLDER 46

10.2 FEES AND CHARGES 46

10.3 OTHER PERMITTED EXPENSES 47

10.4 REMOVAL, REPLACEMENT AND RETIREMENT OF THE

MANAGEMENT COMPANY AND TRUSTEE

48

10.5 TERMINATION OF THE FUND 49

10.6 UNIT HOLDERS’ MEETING 49

11. CONFLICT OF INTEREST

51

12. TAXATION OF THE FUND

52-57

13. ADDITIONAL INFORMATION

58-62

13.1 UPDATES ON THE FUND 58

13.2 PRE-INVESTMENT FORM (PIF) 58

13.3 SUITABILITY ASSESSMENT 58

13.4 INVESTOR RELATION 58

13.5 COMPLAINTS 58

13.6 SECURITIES INDUSTRY DISPUTE RESOLUTION CENTER (SIDREC) 59

13.7

ANTI-MONEY LAUNDERING AND ANTI-TERRORISM FINANCING

(AML/CFT) POLICIES

59

13.8 PRIVACY NOTICE UNDER PERSONAL DATA PROTECTION ACT 2010 60

13.9 GOODS AND SERVICES TAX (GST) 60

13.10 FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) 60

13.11 ZAKAT 60

13.12 AUDITORS OF THE FUND 60

13.13 PLEDGING OF UNITS AS COLLATERAL 61

13.14 BORROWING TO PURCHASE UNITS 61

13.15 PERIOD OF THE FUND 61

13.16 LIST OF DISTRIBUTION CHANNELS 61


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14. STATEMENT OF CONSENT

63

15. DOCUMENTS AVAILABLE FOR INSPECTION

64

APPENDICES

1) MASTER APPLICATION FORM

2) INVESTMENT REQUEST FORM


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1. GLOSSARY OF TERMS/ABBREVIATIONS

In this Prospectus, except when the context otherwise requires, the following words and expressions shall

bear the following meanings:

“Act” Capital Markets and Services Act 2007 (as amended from time to time);

“ANGKASA” Angkatan Koperasi Kebangsaan Malaysia Berhad;

“application” Application or request to buy unit(s) by an Investor or a Unit Holder;

“BIMBSEC” BIMB Securities Sdn Bhd;

“Bursa Malaysia” Malaysia’s stock exchange managed by Bursa Malaysia Berhad;

“business day” A day on which the Bursa Malaysia is open for dealings;

“buying price” or

“repurchase price” of a unit

The price equivalent to the NAV per unit of the respective funds as at the

next valuation point after the request for repurchase is received by the

Manager;

“CIS”

‘Collective Investment Scheme’ refers to an arrangement where-

a) it is made for the purpose, or having the effect, of providing

facilities for persons to participate in or receive profits or income

arising from the acquisition, holding, management or disposal of

securities, derivatives or any other property (“referred to as

scheme’s assets”) or sums paid out of such profits or income;

b) the persons who participate in the arrangements do not have day-

to-day control over the management of the scheme’s assets; and

c) the scheme’s assets is managed by an entity who is responsible for

the management of the scheme’s assets and is approved/

authorized/licensed by a relevant regulator to conduct fund

management activities;

and includes among others unit trust funds, real estate investment

trusts, exchange-traded funds and closed-end funds;

“CITB” CIMB Islamic Trustee Berhad;

“cut-off time”

The time by which requests for unit purchases or redemptions by

Investors are accepted each day up to the unit trust fund’s dealing cut-off

time and are processed using the same day-end’s NAV prices;

“Deed”

The principal and any supplemental deeds of the Fund made between

the Manager and the Trustee;

“designated fund

manager”

A Capital Markets Services Representative Licence (CMSRL) holder who

is responsible for the fund management of the Fund;

“Distribution Date”

The date on which the cash distribution of the Fund, or unit distribution

in lieu of the cash, is made or scheduled to be made;

“dividend yield”

The amount of a company's annual dividend expressed as a percentage

of the current price of the share of that company;

“Eligible Market”

Means a market that-

a) is regulated by a regulatory authority;

b) operates regularly;


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c) is open to the public; and

d) has adequate liquidity for the purposes of the fund in question.

“equity–related

securities”

Warrants, rights and/or irredeemable unsecured loan stocks (ICULS);

“FBM 100” FTSE Bursa Malaysia Top 100 Index;

“FBM EMAS”

FTSE Bursa Malaysia EMAS Index.

FBM EMAS comprises the constituents of the FTSE Bursa Malaysia Top

100 Index and FTSE Bursa Malaysia Small Cap Index (FBM Small Cap).

FBM Small Cap comprises those eligible companies within the top 98%

of the Bursa Malaysia Main Market excluding constituents of the FTSE

Bursa Malaysia Top 100 Index;

“FBMSHA” FTSE Bursa Malaysia EMAS Shariah Index;

“FBM Shariah Small Cap

Index”

FTSE Bursa Malaysia Shariah Small Cap Index - Bursa Malaysia index

that comprises of Shariah-compliant small cap constituents of the FBM

EMAS that meet the screening requirement of the SAC;

“FIMM” Federation of Investment Managers Malaysia;

“financial institution”

a) If the institution is in Malaysia –

(i) licensed bank;

(ii) licensed investment bank; or

(iii) licensed Islamic bank;

b) if the institution is outside Malaysia, any institution that is

licensed/registered/approved/authorised by the relevant banking

regulator to provide financial services;

“forward pricing”

The determination of the unit price based on the NAV per unit of the

Fund as at the next valuation point after a request for sale or repurchase

of units is received;

“Fund” Means PMB Shariah Small-Cap Fund;

“Guidelines”

Guidelines on Unit Trust Funds issued by the SC, as amended from time

to time;

“Investor” or “Unit

Holder”

The person registered for the time being as a holder of units in the Fund

in accordance with the provisions of the Deed;

“Islamic money market

instruments “

Financial instruments with liquidity and near term maturity, issued

under the Shariah principles, that are tradeable, such as commercial

papers, banker’s acceptance and negotiable certificate of deposit;

“Islamic deposit

placements”

Money placed with financial institutions for an agreed period under the

Shariah principles which are Islamic Negotiable Instruments (INI),

General Investment Accounts (GIA) or Special Investment Accounts

(SIA);

“IUTA”

‘Institutional Unit Trust Adviser’, which is an institution, a corporation or

an organization registered with the FIMM in accordance with FIMM’s

Guidelines for Registration of Institutional Unit Trust Adviser for the

marketing and distribution of unit trusts;

“long term” A period of more than 5 years;

“Manager” or “We” or “us” PMB Investment Berhad;


3


“MARA” Majlis Amanah Rakyat;

“MARC” Malaysian Rating Corporation Berhad;

“medium term” A period of between 3 and 5 years;

“NAV”

‘Net Asset Value’ refers to the value of a unit trust fund which is

determined by deducting the value of all the fund’s liabilities from the

value of all the fund’s assets, at the valuation point, except that, for the

purpose of computing the annual management fee and the annual

trustee fee, the NAV of the fund should be inclusive (that is, before any

deduction) of the management fee and the trustee fee for the relevant

day;

“NAV per unit”

The NAV of a unit trust fund divided by the number of units in

circulation at the valuation point;

“near term” A period of less than 1 year;

“Prospectus”

Means this prospectus, which is the first prospectus for the Fund and

includes any supplementary or replacement prospectus, as the case

maybe;

“PMB” Pelaburan MARA Berhad;

“PMB Investment” PMB Investment Berhad;

“PMB SSCF” PMB Shariah Small-Cap Fund;

“RAM” RAM Rating Services Berhad;

“redemption” or

“repurchase”

The repurchase by the Manager of all or part of the units owned by the

Unit Holders;

“repurchase price” or

“buying price” of a unit

The price equivalent to the NAV per unit of the Fund as at the next

valuation point after the request for repurchase is received by the

Manager;

“RM” Ringgit Malaysia;

“SAC” Shariah Advisory Council of the SC;

“SC” Securities Commission Malaysia, established under the Securities

Commission Act, 1993;

“securities” Has the same definition according to the Capital Markets and Services

Act 2007 (as amended from time to time);

“selling price of a unit” The price equivalent to the NAV per unit of a unit trust fund as at the

next valuation point after the application for units is received by the

Manager;

“Shariah” Islamic laws, originating from the Qur`an (the holy book of Islam), and

its practices and explanations rendered by the Prophet Muhammad

(peace be upon him) and ijtihad of ulama’ (personal effort by qualified

Shariah scholars to determine the true ruling of the divine law on

matters whose revelations are not explicit);

“Shariah Adviser” The Shariah adviser appointed for the Fund;

“Shariah-compliant

securities”

The investment portfolio of the Fund comprises securities that have

been classified as Shariah-compliant by the SAC. For securities that

have yet to be certified by the SAC, the Shariah Adviser of the Fund will

determine whether or not the securities are Shariah-compliant for


4


investment by the Fund;

“short term” A period of between 1 and 3 years;

“SPR” ‘Single Pricing Regime’ refers to a policy or system in which the

creation, cancellation, selling and repurchase prices for units are the

NAV per unit of a unit trust fund(s). The actual and total amount of

these prices paid by the Investors then, depend on the rate of sales

charges separately imposed by different distribution channels;

“Structured Products” Any investment product that falls within the definition of “securities”

which provides the holder with an economic, legal or other interest in

another asset ("underlying asset") and derives its value by reference to

the price or value of the underlying asset;

“subscribing price of

unit’

The price payable by an Investor or a Unit Holder of the Fund for the

purchase of a unit of a Fund;

“sukuk” Certificates of equal value which evidence undivided ownership or

investment in the assets using Shariah principles and concepts

endorsed by the SAC;

“Trustee” The trustee appointed for the Fund;

“UiTM” Universiti Teknologi MARA.

“unit” A unit of a unit trust fund that represents a unit holder’s interest;

“unit price” The price at which a unit holder buys or sells units at NAV per unit;

“units in circulation” Units created and fully paid for and which have not been cancelled;

“Unit Holder” or

“Investor”

The person registered for the time being as a holder of units in the Fund

in accordance with the provisions of the Deed;

“Unit Trust Consultant”

or “UTC”

An individual unit trust adviser registered with FiMM; and

“US persons” Refers to:-

a) a citizen of United States of America (US);

b) an individual lawfully admitted for permanent residence of the

US;

c) an unincorporated association with a substantial number of

members who are citizens of the US or are individuals lawfully

admitted for permanent residence of the US; or

d) a corporation incorporated in the US.


5


2. CORPORATE DIRECTORY

Manager

Registered Office

Business Office

PMB Investment Berhad (256439-D)

Suite C-5-4, Wisma Goshen,

Plaza Pantai, Jalan Pantai Baharu

59200 Kuala Lumpur

Level 20, 1 Sentral,

Jalan Rakyat, Kuala Lumpur Sentral

50470 Kuala Lumpur

Tel: (03) 2785 9800 Fax: (03) 2785 9901

Website: pmbinvest.com.my

E-mail: [email protected]

Manager’s Delegate

Registered Office

Business Office

Pelaburan MARA Berhad (7240-P)

Suite C-5-4, Wisma Goshen,

Plaza Pantai, Jalan Pantai Bharu

59200 Kuala Lumpur



50470 Kuala Lumpur

Tel: (03) 2785 9800 Fax: (03) 2785 9901

Website: pelaburanmara.com.my

Board of Directors

Datuk (Dr.) Zamani bin Md Noor - Independent/Chairman

Dato’ Sri Haji Abd Rahim bin Haji Abdul - Independent

Professor Dr. Faridah binti Haji Hassan - Independent

Haji Mansoor bin Ahmad - Independent

Dato’ Mohamad Safie bin Haji Asnawi - Independent

Nik Mohamed Zaki bin Nik Yusoff - Independent

Ahmad Nazim bin Abd Rahman - Non-Independent

Ameer Ali bin Vali Mohamed - Non-Independent/Chief Executive

Officer

Members of

Investment

Committee

Haji Mansoor bin Ahmad - Independent/Chairman

Nik Mohamed Zaki bin Nik Yusoff - Independent

Professor Dr. Mohamed Aslam bin

Mohamed Haneef

- Independent

Ahmad Nazim bin Abd Rahman - Non-Independent

Company Secretary

Business Address

Shahrizat binti Othman (MAICSA No. 0764744)

AAJ Management Services Sdn Bhd (361182-T)

Suite C-5-4, Wisma Goshen

Plaza Pantai, Jalan Pantai Baharu

59200 Kuala Lumpur

Tel: (03) 2283 4007 Fax: (03) 2287 7006

Shariah adviser for

the Manager

Amanie Advisors Sdn Bhd (684050-H)

Level 33, Menara Binjai

No.2, Jalan Binjai, Off Jalan Ampang

504500 Kuala Lumpur

Tel: (03) 2181 8228 Fax: (03) 2181 8219


6


Shariah Adviser for

the Fund

BIMB Securities Sdn Bhd (290163-X)

32nd Floor, Menara Multi-Purpose, Capital Square

No.8 Jalan Munshi Abdullah

50100 Kuala Lumpur

Tel: (03) 2691 8887 Fax: (03) 2691 8854

Trustee

Registered Office

Business Office

Trustee’s Delegate

Registered Office

Business Office

CIMB Islamic Trustee Berhad (167913-M)

Level 13, Menara CIMB,

Jalan Stesen Sentral 2,

Kuala Lumpur Sentral,

50470 Kuala Lumpur.

Tel : (03) 2261 8888 Fax : (03) 2261 0099

Website: http://www.cimb.com

Level 21,Menara CIMB

Jalan Stesen Sentral 2

Kuala Lumpur Sentral

50470 Kuala Lumpur

Tel: (03) 2261 8888 Fax (03) 2261 9889

CIMB Islamic Bank Berhad (671380-H)

Level 13, Menara CIMB



50470 Kuala Lumpur

Tel : (03) 2261 8888 Fax: (03) 2261 8889

Level 21, Menara CIMB



50470 Kuala Lumpur

Tel: (03) 2261 8888 Fax : (03) 2261 9892

Website: http://www.cimb.com

Auditors

Messr. Jamal, Amin & Partners (AF 1067)

No.60-2B, 2nd Floor,

Jalan 2/23A, Off Jalan Genting Klang,

Taman Danau Kota, Setapak,

53300 Kuala Lumpur

Tel: (03) 4142 1626 Fax: (03) 4142 1601

Solicitors Messrs. M.K Chen & Leong

Suite B-09-02 Plaza Mont’ Kiara

No.2, Jalan Kiara, Mont’ Kiara

50480 Kuala Lumpur

Tel: (03) 6201 7381/7382 Fax: (03) 6201 7380

Tax Adviser

Messr. Ahmad Abdullah & Goh (AF 0381)

Suite 701, Tingkat 7, Wisma Hangsam,

Jalan Hang Lekir,

50000 Kuala Lumpur

Tel: (03) 2070 4408 Fax: (03) 2070 4393


7


Principal Bankers

1) CIMB Islamic Bank Berhad (671380-H)

Ground Floor,Wisma Genting

No. 28, Jalan Sultan Ismail

50250 Kuala Lumpur

Tel: (03) 2163 6358 Fax: (03) 2031 6320

2) Public Islamic Bank Berhad (14328-V)

Tiong Nam Branch

Level 1 & 2, Wisma Public Bank

300, Jalan Raja Laut

50350 Kuala Lumpur

Tel: (03) 2693 9555 Fax : (03) 2691 4673

FIMM Federation of Investment Managers Malaysia (272577-P)

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

No. 19, Lorong Dungun, Damansara Heights,

50490 Kuala Lumpur

Tel : (03) 2093 2600 Fax: (03) 2093 2700

Website: http://www.fimm.com.my

Distribution

Channels

Please refer to the directory of distribution channels in Section 13.16.


8


3. KEY DATA / INFORMATION SUMMARY

This section is only a summary of the salient information of the Fund and Investors should read

and understand the whole Prospectus before making any investment decisions.

3.1 FUND INFORMATION

NAME PMB SHARIAH SMALL-CAP FUND

Category / Type Equity (Shariah) / Growth

Initial Offer Period RM0.5000 per Unit

Objective The objective of the Fund is to achieve capital growth over the medium to long term

period by investing primarily in small-sized Shariah compliant companies listed on

Bursa Malaysia, in term of market capitalization.

Investment

Strategy

The Fund shall invest between 50% and 99.5% in a diversified portfolio of Shariah-

compliant equity securities of small-sized listed companies on Bursa Malaysia with

market capitalization of at least RM250 million but not more than RM1 billion (at

the point of acquisition). However the Fund may invest up to 20% of its NAV in

securities of companies with market capitalization in excess of RM1 billion but not

more than RM7 billion (at the point of acquisition). The Fund will focus its

investments on companies with growth prospects in medium to long term horizon,

reasonably good earnings, quality management and good corporate governance, as

analysed by the Manager. In view of the Fund’s objective, the designated fund

manager will trade the securities depending on the securities market conditions.

Asset Allocation The Fund shall invest between 70% and 99.5% of its NAV in Shariah-compliant

equity securities. The balance will be invested in Islamic money market

instruments, Islamic deposit placements, sukuk, equity-related securities and/or

other permitted investments

Performance

Benchmark

FBM Shariah Small Cap Index

Note: The risk profile of the Fund is not similar to the risk profile of the

performance benchmark.

Principal Risks • Equity market risk

• Stock specific risk

• Liquidity risk

• Shariah status reclassification risk

You may refer the detailed information of the risks in Chapter 4.

Investor Profile The Fund is suitable for investors who:

• have a high risk tolerance level;

• have a medium to long term investment horizon;

• prefer a portfolio that conforms to Shariah principles; and

• seek for capital appreciation from an aggressive Shariah-compliant fund.

Distribution Policy The distribution of income (if any) is incidental.

Financial Year End 31 July

Trustee CITB

Shariah Adviser BIMBSEC

You may refer the detailed information of the Fund in Chapter 5.


9


3.2 FEES, CHARGES AND EXPENSES

a) Charges directly incurred by Investors when purchasing or redeeming units of the Fund.

Table below describes the charges that you may directly incur when you buy or redeem units of the Fund:-

Charges Distribution Channels % of the NAV

Sales charge per unit IUTA, UTC & Direct purchase 6.0%

Repurchase charge per

unit IUTA, UTC & Direct repurchase Nil

Switching Fee

The fee for switching are set out below:

To

From

Equity

funds

Mixed Asset/

Balanced funds

Money Market

funds

PMB SSCF RM25 per

transaction

RM25 per

transaction Nil

Transfer fee RM10 per transaction (excluding stamp duty)

Other charges • Bank charges

• Telegraphic transfer charges

Rate as determined by transacting

financial institutions.

Notes:

i) The Manager may, at its discretion, charge a lower sales charge based on criteria as may be

determined from time to time. Please refer to Chapter 6 for details on the sales charge.

ii) All the above charges and fees are subject to the goods and services tax (GST) currently at the rate

of 6.0%. (You may refer to Section 13.9 on the GST.)

b) Fees and Expenses Indirectly Incurred when Investing in the Fund

Table below describes the fees and expenses that you may indirectly incur when you invest in the Fund:-

Fees and Expenses % Per Annum of NAV

Annual Management Fee 1.5%

Annual Trustee Fee 0.05%

Other Fees and Expenses Directly Related to the Fund

Fees paid to

brokers/dealers

The rate of brokerage fees is in accordance with and determined by the

rules and regulations of Bursa Malaysia.

Auditor’s fee The rate of auditors’ fee is determined by the Manager and auditors as

per the agreement.

Tax adviser’s fee The rate of tax adviser’s fee is determined by the Manager and Tax

Adviser as per the agreement.


10


Valuation fee The rate of valuation fee is determined by the independent valuers as

per the agreement.

Taxes The rate of taxes is determined by the Government and other

authorities.

Custodial charges The rate of custodial fee is determined by the Manager and the Trustee.

Tax voucher/

distribution warrants

The fees on tax voucher/distribution warrants are determined by the

printing company.

Annual/interim reports The annual/interim reports fees are determined by the cost incurred on

the issuance and distribution of the annual/interim reports.

Bank charges The rate is determined by the transacting financial institutions.

Note: All the above charges, fees and expenses are subject to the GST currently at the rate of 6.0%. (You

may refer to Section 13.9 on the GST).

3.3 ADDITIONAL INFORMATION

a) Deed of the Fund

The deed in respect of the Fund is dated 28 July 2015 which is available at the business office of the

Manager.

b) Avenues for Advice to Prospective Investors

For investment in Unit trusts, you may find answers to all your questions at

https://www.fimm.com.my/investor/. Alternatively, you may contact ‘Training & Investor

Education Division, Securities Industry Development Corporation, No. 3, Persiaran Bukit Kiara,

Bukit Kiara 50490 Kuala Lumpur (Tel: (03) 6204 8889)

c) Designated Fund Managers

The designated fund manager for the Fund is Isnami bin Ahmad Mohtar. The profile of the

designated fund manager may be referred to in Section 8.10.

• There are fees and charges involved and investors are advised to consider them before

investing in the Fund.

• Unit prices and distributions payable, if any, may go down as well as up.

• For information concerning certain risk factors which should be considered by prospective

investors, see “Risk Factors” in Chapter 4.

• Investors are required to complete Pre-Investment Form and Suitability Assessment Form in

addition to Application Form before investing.


11


4. RISK FACTORS

As with all investments, there are risks involved. The prices of units in, and the income from, a unit

trust fund may go up as well as down. You should be aware of the risks and returns involved in

investing in a unit trust fund. No guarantee is given that you will receive any income distribution or

return on your investments or that you will get back your initial amount invested in full. The risks

involved in investing in the Fund include but not limited to the following:-

4.1 GENERAL RISKS OF INVESTING IN THE FUND

a) Market Risk

Market risk refers to the possibility that an investment will lose value because of a general

decline in financial markets, due to economic, political and/or other factors, which will

result in a decline in the Fund’s NAV.

b) Fund Management Risk

The performance of the Fund depends on the experience, knowledge and expertise of the

fund manager and the investment strategies adopted. Poor management and/or strategies

of a fund, such as delays in responding appropriately to the economic or market changes,

or inadequate portfolio diversification, will jeopardize the investment of unit holders

through the loss of their capital invested in the fund or loss of opportunity.

c) Inflation Risk

This is the risk that investors’ investment in the Fund may not grow or generate income at

a rate that keeps pace with inflation. This would reduce investors’ purchasing power even

though the value of the investment in monetary terms has increased.

d) Loan Financing Risk

This risk occurs when investors take a loan/financing to finance their investment. The

inherent risk of investing with borrowed money includes investors being unable to service

the loan repayments. In the event units are used as collateral, an investor may be required

to top-up the investors’ existing instalment if the prices of units fall below a certain level

due to market conditions. Failing which, the units may be sold at a lower net asset value

per unit as compared to the net asset value per unit at the point of purchase towards

settling the loan.

e) Non-Compliance Risk

The risk that the Manager and others associated with the Fund may not follow the rules set

out in the Fund’s deed and internal policies, or the laws that governs the unit trust scheme,

or act fraudulently or dishonestly. Non-compliance may expose the Fund to higher risks

that may result in financial and/or non-financial losses. However, this risk is greatly

reduced via proper establishment of the compliance and internal control policies.


12


4.2 SPECIFIC RISKS ASSOCIATED WITH INVESTMENT PORTFOLIOS

In addition, there are also specific risks associated with the investment portfolio of the Fund. The

specific risks include but are not limited to the following:-

a) Equity Market Risk

The performance of the Fund is subject to the volatility of the stock market which is

influenced by the changes in the economic and political climate, interest rate, international

stock market performance and regulatory policies. The movement of the value in the

underlying investment portfolio will affect the NAV of the Fund. Any downward movement

of the value will negatively impact the NAV of the Fund.

b) Stock Specific Risk

Prices of a particular stock may fluctuate in response to the circumstances affecting

individual companies such as adverse financial performance, news of a possible merger or

loss of key personnel of a company. Any adverse price movements of such stock will

adversely affect the Fund’s NAV.

c) Liquidity Risk

Liquidity risk refers to the ease of liquidating an asset depending on the asset’s volume

traded in the market. If the Fund holds assets that are illiquid, or are difficult to dispose of,

the value of the Fund will be negatively affected when it has to sell such assets at

unfavourable prices.

d) Shariah Status Reclassification Risk

This risk refers to the risk that the currently held Shariah-compliant equities in the Fund

may be reclassified as Shariah non-compliant in the periodic review of the equities by the

SAC, the Shariah adviser or the Shariah boards of the relevant Islamic indices. If this

occurs, the Manager will take the necessary steps to dispose such equities. There may be

opportunity loss to the Fund due to the Fund not being allowed to retain the excess capital

gains derived from the disposal of the Shariah non-compliant equities. In such an event,

the Fund should :–

i) dispose of the securities if the value of the securities exceeds or is equal to the

investment cost on the date of announcement of the List of Shariah-compliant

securities by the SAC. The Fund is allowed to keep dividends received and capital

gain from the disposal of the securities up to the date of announcement of the List

of Shariah-compliant securities by the SAC. However, any dividends received and

excess capital gain from the disposal of Shariah non-compliant securities after the

date of announcement of the List of Shariah-compliant securities by the SAC

should be channeled to baitulmal and/or charitable bodies; or

ii) hold the respective securities if the market price of the said securities is below the

investment cost until the market price or value of the securities is equal to the

cost of investment.

As a result of the general risks of investing in the Fund and specific risks associated with investment

portfolios, capital appreciation of the value of the Fund cannot be guaranteed. However, the Manager will

take reasonable steps to ensure that the above potential risks are mitigated.


13


5. THE FUND

5.1 FUND PROFILE

Category of Fund Equity (Shariah)

Type of Fund Growth

5.2 INVESTMENT OBJECTIVE

The objective of the Fund is to achieve capital growth over the medium to long term period by investing

primarily in small-sized Shariah compliant companies listed on Bursa Malaysia, in term of market

capitalization.

Note: Any material changes to the investment objective of the Fund require Unit Holder’s approval.

5.3 INVESTMENT STRATEGY

The Fund shall invest between 50% and 99.5% in a diversified portfolio of Shariah-compliant equity

securities of small-sized listed companies on Bursa Malaysia with market capitalization of at least RM250

million but not more than RM1 billion (at the point of acquisition). However the Fund may invest up to 20%

of its NAV in securities of companies with market capitalization in excess of RM1 billion but not more than

RM7 billion (at the point of acquisition). The Fund will focus its investments on companies with growth

prospects in medium to long term horizon, reasonably good earnings, quality management and good

corporate governance, as analysed by the Manager. In view of the Fund’s objective, the designated fund

manager will trade the securities depending on the securities market conditions.

5.4 ASSET ALLOCATION

Asset class % of the Fund’s NAV

Shariah-compliant equity securities Minimum 70% and maximum 99.5%

Islamic money market instruments, Islamic

deposit placements, sukuk, equity-related

securities and/or other permitted investments.

The remaining balance of the Fund’s NAV not

invested in the above.

The equity allocation may be reviewed from time to time depending on the global, regional and local

economic as well as equity market conditions. This includes assessing the relevant political, economic and

business environment prior to making investment decisions. The Manager may take a temporary defensive

position, as disclosed in Section 5.5, of which the asset allocation of the equity may go below the minimum

level.

The investment portfolio of the Fund comprises securities which have been classified as Shariah-

compliant by the SAC. For securities not certified by the SAC, the status of the securities has been

determined in accordance with the ruling issued by the Shariah Adviser of the Fund. For

information concerning risk factors which should be considered by prospective investors,

please refer to Chapter 4 , Risk Factors of this Prospectus.


14


5.5 TEMPORARY DEFENSIVE POSITIONS

The Manager may also take temporary defensive positions that may be inconsistent with the Fund’s

principal strategy in attempting to respond to adverse economic and/or political conditions or potential

sharp downturn in the equities market that may be likely leading to substantial capital loss.

In such circumstances, the Manager may reallocate up to 100% of the Fund’s equity investments into other

permitted investments, including sukuk, Islamic money market instruments and/or Islamic deposit

placements.

5.6 RISKS OF INVESTING IN THE FUND

Please refer to Chapter 4 for detailed explanation of the risks involved.

5.7 RISK MANAGEMENT

The Manager adopts an active investment strategy to manage the risks of equity investment of the Fund.

The market volatility may lead to capital loss which affects the Fund’s return. Stock selection and

diversification of investment in equity securities are keys to mitigating the overall risk of the Fund.

The equity market risk of the Fund is prudently managed through the following strategies:-

a) Stock selection whereby the Manager employs fundamental approach to ensure selection of quality

Shariah-compliant equity which takes into account information gathered during company visits,

potential income and earnings growth, management quality and past track records of the

companies are considered; and

b) Diversification into different sectors that gives the Manager flexibility to move the Fund’s equity

exposure actively within the asset allocation range depending on capital market conditions. The

flexibility allows the Manager to remain invested during market upturns or liquidate investments

to preserve its capital during the market downturns.

To manage the stock specific risk of the Fund, in-depth company analysis is conducted. Stock selection is

based on stringent investment criteria which include the company’s financial strength, business operations

and management and good corporate governance. The Fund also takes into account trading liquidity to

manage the stock specific risk.

For investment in sukuk, credit evaluation and profit rate direction are the most critical risk factors to be

considered. As for credit evaluation, the designated fund manager has set stringent investment criteria in

assessing sukuk, covering mainly the nature of business, cash flow, gearing level, management and

collateralization. In case the Fund invests in such instrument, only investment grade sukuk rated by either

RAM or MARC will be considered. As for the profit/interest rate direction, the expected direction of Kuala

Lumpur Islamic Reference Rates (KLIRR) will be taken into consideration.

In addition, regular reporting to and consulting with the Investment Committee members are held at

periodical meetings. The reporting to the Investment Committee consists of, amongst others, the review on

the performance of the Fund and the relevant markets, immediate and future investment approach and

asset allocation strategy, and compliance status.

5.8 PERFORMANCE BENCHMARK

FBM Shariah Small Cap Index - FTSE Bursa Malaysia Shariah Small Cap Index.

Bursa Malaysia index that comprises of Shariah-compliant small cap constituents of the FBM EMAS that

meet the screening requirement of the SAC. You may obtain the information pertaining to the index from

Bursa Malaysia website and major daily newspapers.

Take note that the risk profile of the Fund is not similar to the risk profile of the performance benchmark.


15


5.9 PERMITTED INVESTMENT

Unless otherwise prohibited by the relevant authorities or any relevant law and provided always that there

is no inconsistency with the objectives of the Fund, the Fund must invest strictly in the

investments/securities which comply with the Shariah principles and approved by the Shariah Adviser, the

SAC or an international Shariah standard setting body (if applicable) as follows:-

(a) investment in other collective investment schemes;

(b) participation in the lending of securities within the meaning of the SC’s Guidelines of Securities

Borrowing and Lending when permitted by the SC and other relevant authorities;

(c) securities that are traded in or under the rules of an eligible market which fulfil all the conditions set

out in the Guidelines on Unit Trust Funds;

(d) liquid assets which include cash, deposits with licensed institutions and/or other institutions licensed

or approved to accept deposits and any other instruments that can be converted into cash within

seven (7) days as may be approved by the Trustee;

(e) warrants, provided that the warrants carry the right in respect of a security traded in or under the

rules of an eligible market;

(f) derivatives:

(i) consist of derivatives that are traded on exchange and traded over-the-counter;

(ii) the underlying instruments should consist of permissible investments and include indices,

profit rates and foreign exchange rates.

(g) Structured Products, where the Manager must ensure that:

(i) the counter party is an eligible issuer (for Structured Products issued in Malaysia) or an

issuer regulated by the relevant regulatory authority (for Structured Products issued outside

Malaysia); and

(ii) the counter-party has a minimum long-term rating by any domestic or global rating agency

that indicates adequate capacity for timely payment of financial obligations.

5.10 INVESTMENT RESTRICTIONS AND LIMITS

The investments limits for the Fund are in line with the Guidelines as follows:-

a) Exposure Limits

The value of a Fund’s investment in unlisted securities must not exceed 10% of a Fund’s NAV.

b) Investment Spread Limits

i) The value the Fund’s investment in ordinary shares issued by any single issuer must not

exceed 10% of the Fund’s NAV.

ii) The value of the Fund’s investment in transferable securities and money market

instruments issued by any single issuer must not exceed 15% of the Fund’s NAV.

iii) The value of the Fund’s placement in deposits with any single institution must not exceed

20% of the Fund’s NAV.

iv) For investments in derivatives:

• the exposure to the underlying assets must not exceed the investment spread

limits stipulated under these limits; and

• the value of the Fund’s over-the counter (OTC) derivative transaction with any

single counter-party must not exceed 10% of the Fund’s NAV.


16


v) The value of the Fund’s investment in Structured Products issued by a single counter-party

must not exceed 15% of the Fund’s NAV.

vi) The aggregate value of the Fund’s investment in transferable securities, money market

instruments, deposits, OTC derivatives and Structured Products issued by or placed with

(as the case may be) any single issuer/institution must not exceed 25% of the Fund’s NAV.

vii) The value of the Fund’s investment in units/shares of any CIS must not exceed 20% of the

Fund’s NAV.

viii) The value of the Fund’s investment in transferable securities and money market

instruments issued by any group of companies must not exceed 20% of the Fund’s NAV.

c) Investment Concentration Limits

i) The Fund’s investment in transferable securities (other than debentures) must not exceed

10% of the securities issued by any single issuer.

ii) The Fund’s investments in debentures must not exceed 20% of the debentures issued by

any single issuer.

iii) The Fund’s investment in CISs must not exceed 25% of the units/shares in any one CIS.

iv) The Fund’s investment in money market instruments must not exceed 10% of the

instruments issued by any single issuer. (Note: This limit does not apply to money market

instruments that do not have a pre-determined issue size).

d) Allowance in Excess of Investment Limits

The above investment restrictions and limits have at all times to be complied with based on the

most up-to-date valuation of the investments and instruments of the Fund. However, a 5%

allowance in excess of any restriction or limit may be permitted where the restriction or limit is

breached through an appreciation or depreciation of the NAV of the Fund (whether as a result of an

appreciation or depreciation in value of the investments or as a result of repurchase of Units or

payment made from the Fund).

If the relevant limit is breached, due to the appreciation or depreciation of the NAV of the Fund, no

further acquisition of the particular securities involved shall be made. We shall, within a

reasonable period of not more than 3 months from the date of breach, take all necessary steps and

actions to rectify the breach.

5.11 VALUATION OF INVESTMENTS

In respect of the investments of the Fund, it is our policy for the valuation point for the assets of the Fund to

be valued on a daily basis at the end of business day, in accordance with their respective class and at all

times in compliance with the Guidelines.

a) Listed Securities

The valuation of securities listed on an Eligible Market will be based on the market price.

However, if–

i) a valuation based on the market price does not represent the fair value of the securities,

for example during abnormal market conditions; or

ii) no market price is available, including in the event of a suspension in the quotation of the

securities for a period exceeding 14 days, or such shorter period as agreed by the trustee,

then the securities should be valued at fair value, as determined in good faith by the Manager,

based on the methods or bases approved by the Trustee after appropriate technical consultation.


17


b) Unlisted Securities

The valuation of unlisted securities will be based on fair value as determined in good faith by the

Manager, based on the methods or bases approved by the Trustee after appropriate technical

consultation.

c) Unlisted Sukuk Denominated in Ringgit Malaysia

Unlisted sukuk denominated in Ringgit Malaysia will be based on price quoted by a Bond Pricing

Agency (BPA) registered with the SC. Where the Manager is of the view that the price quoted by

BPA for a specific sukuk differs from the market price by more than 20 basis points, the Manager

may use the “market price”, provided that the Manager-

i) records its basis for using a non-BPA price;

ii) obtains necessary internal approvals to use the non-BPA price; and

iii) keeps an audit trail of all decisions and basis for adopting the “market yield”.

d) Other Unlisted Sukuk

The valuation on other unlisted sukuk will based on fair value by reference to the average

indicative yield quoted by three independent and reputable institutions.

e) Unlisted Collective Investment Scheme

The value of the Units will be based on the last published repurchase price.

f) Islamic Money Market Instruments

The valuation for money market instrument are valued at market yields based on the remaining

days to maturity.

g) Islamic Deposit Placements

Deposits placed with banks and other financial institutions are valued each day by reference to the

nominal value and the profit accrued thereon for the relevant period.

h) Any Other Investment

The valuation on any other investment will based on fair value as determined in good faith by the

Manager, on methods or bases which have been verified by the auditor of the Fund and approved

by the Trustee.

5.12 POLICY ON GEARING

The Fund is prohibited from borrowing other assets (including borrowing securities within the meaning of

Guidelines on Securities Borrowing and Lending) in connection with their activities.

However, the Fund may borrow cash for the purpose of meeting repurchase requests for units subject to

the following –

a) The borrowing is only on a temporary basis and not persistent;

b) The borrowing period should not exceed one month;

c) The aggregate borrowing of the Fund should not exceed 10% of the Fund’s NAV at the time the

borrowing is incurred; and

d) The Fund may only borrow from financial institutions.


18


5.13 SHARIAH-COMPLIANT AND SHARIAH APPROVAL PROCESS

The Fund must at all times and all stages of its operation comply with the Shariah principles. In the first

place, the Fund must be raised, operated and redeemed, if any, by investor on the basis of contracts which

are acceptable by Shariah.

In terms of investments, there are two significant Shariah-compliant matters that need to be adhered to.

First is the securities to be invested and secondly the companies of which the securities are issued. In

making investments, both securities and companies must be Shariah-compliant.

a) Capital Market Instrument

Since the establishment of the SAC, several capital market instruments have been evaluated and

approved. They are:

• Ordinary shares;

• Warrants/Transferable Subscription Rights (if the underlying is Shariah-compliant);

• Call warrants (if the underlying is Shariah-compliant);

• Non-cumulative preference shares;

• Redeemable preference shares;

• Crude palm oil futures contracts;

• Crude palm kernel oil futures contracts;

• Khazanah zero-coupon sukuk;

• Single Stock Futures (if the underlying is Shariah-compliant); and

• Futures Contract Index (if the index component is made up of Shariah-compliant

securities)

As for the Fund, investments in any of the above instruments depend on their respective objective

and investment strategy and the capital market instruments that are allowed to be used to achieve

the objective.

b) Shariah Adviser

The Guidelines stipulate that the Fund is required to appoint a Shariah committee or Shariah

adviser. At PMB Investment, we have appointed a Shariah Adviser whose details are in Section 8.9.

The investment portfolio of the Fund must invest only in Shariah-compliant

securities/instruments. As a general rule, for investment in equities, we use the approved List of

Shariah-compliant securities issued by the SAC (Approved List), which is currently updated in May

and November every year. However, in cases where the status of securities has not been

determined by the SAC due to reasons such as initial public offer, the interim status of the

securities will be determined by our Shariah Adviser in accordance with the SAC screening

methodology until such time when the SAC issues its ruling on the securities.

When investing in Islamic money market instruments, Islamic deposit placements, sukuk and/or

other permitted investments for the Fund, they must also be Shariah-compliant as determined by

the Shariah Advisory Council of Bank Negara Malaysia and/or the SAC, as the case may be.

c) Classification of Shariah Securities by the SC

For companies listed on Bursa Malaysia, the Fund’s investments must be strictly confined to the

companies on the prevailing Approved List.

In classifying the securities listed on Bursa Malaysia, the SAC received input and support from the

SC. The SC gathered information on the companies from various sources, such as company annual

financial reports, company responses to survey forms and through inquiries made to the respective

company’s management.

The SAC adopts a two-tier quantitative approach, which applies the business activity benchmarks

and the financial ratio benchmarks, in determining the Shariah status of the listed securities.


19


Hence, the securities will be classified as Shariah-compliant if they are within the business activity

benchmarks and the financial ratio benchmarks.

Quantitative

Assessment

Shariah Screening

Methodology

Business Activity Benchmarks

Business activity

benchmarks

5%

Conventional banking and insurance, gambling,

liquor and liquor related activities, pork and pork

related activities, non-halal food and beverages,

Shariah non-compliant entertainment, interest

income from conventional accounts and instruments,

interest income awarded arising from a judgement by

a court or arbitrator, tobacco and tobacco interest

income from conventional accounts and instruments

(including interest income awarded arising from a

court judgement or arbitrator and dividends from

Shariah non-compliant investments) and other

activities deemed non-compliant according to

Shariah.

20% Hotel and resort operations, share trading,

stockbroking business, rental received from Shariah

non-compliant activities and other activities deemed

non-compliant according to Shariah.

Financial Ratio

Benchmarks

33% Cash over total assets: Cash will only includes cash

placed in conventional accounts and instruments,

whereas cash placed in Islamic accounts and

instruments will be excluded from the calculation.

Debt over total assets: Debt only includes interest-

bearing debt whereas Islamic financing or sukuk is

excluded from the calculations.

Each ratios, which is intended to measure riba and

riba-based elements within a company’s statements

of financial position, must be less than 33%.

In addition to the above two-tier quantitative criteria, the SAC also takes into account the

qualitative aspect which involves public perception or image of the company’s activities from the

perspective of Islamic teaching.

d) Special Purpose Acquisition Companies (SPACs)

In classifying securities of SPACs, SAC considers the following criteria:

i) The proposed business activity should be Shariah-compliant;

ii) The entire proceeds raised from the initial public offering should be placed in Islamic

accounts; and

iii) In the event that the proceeds are invested, the entire investment should be Shariah-

compliant.

Shariah-compliant securities include ordinary shares and warrants (issued by the companies

themselves). This means that warrants are classified as Shariah-compliant securities provided the

underlying shares are also Shariah-compliant. On the other hand, loan stocks and bonds are

Shariah non-compliant securities unless they are structured based on the SAC’s approved Shariah


20


rulings, concepts and principles. The Fund may invest less than 5% of its NAV in the securities of

the SPACs, if any.

e) Timing for disposal of Shariah non-compliant securities

i) “Shariah-compliant securities” which are subsequently re-classified as “Shariah

non-compliant”

These refer to securities which were earlier classified as Shariah-compliant but due to

certain factors such as changes in the companies’ business operations and financial

positions, are subsequently reclassified as Shariah non-compliant, the Fund must liquidate

the securities if the market price of the securities held exceeds or is equal to the

investment cost. Any dividends received up to the date of the announcement and capital

gains arising from the disposal of Shariah non-compliant securities on the date of the

announcement can be kept by the Fund. However, any dividends received and excess

capital gain from the disposal of Shariah non-compliant securities after the date of the

announcement should be channeled to baitulmal and/or charitable bodies.

On the other hand, the Fund is allowed to hold their investment in the Shariah non-

compliant securities if the market price of the said securities is below the investment cost.

It is also permissible for the Fund to keep the dividends received during the holding period

until such time when the total amount of dividends received and the market value of the

Shariah non-compliant securities held equal the investment cost. At this stage, the Fund

will dispose of their holding.

In addition, during the holding period, the Fund is allowed to subscribe to:

• any issue of new securities by a company whose Shariah noncompliant securities

are held by the Fund, for example rights issues, bonus issues, special issues and

warrants (excluding securities whose nature is Shariah non-compliant e.g. loan

stocks); and

• Shariah-compliant securities of other companies offered by the company whose

Shariah non-compliant securities are held by the Fund, on condition that the Fund

expedites the disposal of the Shariah non-compliant securities.

ii) Shariah non-compliant securities

The Fund is advised to dispose of any Shariah non-compliant securities which they

presently hold, within a month of knowing the status of the securities. Any gain made in

the form of capital gain or dividend received before or after the disposal of the securities

has to be channeled to baitulmal and/or charitable bodies. The Fund has a right to retain

only the investment cost.

Note: Investment cost may include brokerage cost or other related transaction cost.

f) Foreign Shariah-compliant Securities

For investment in foreign securities, the Fund is only allowed to invest in securities which are on

the Approved List of the Dow Jones Islamic Market Index (DJIM). With regard to the issue of

delisting of Shariah-compliant securities from DJIM and Shariah non-compliant foreign securities,

the Fund is to abide by the same processes as laid down by the SAC above. In the rare event that

the Fund wishes to invest in foreign securities not covered by DJIM, the Fund must submit to the

Shariah Adviser the latest information pertaining to business activities, complete financial

statements and other related information on the relevant company to enable the Shariah Adviser

to carry out stock screening. The decision of the Shariah Adviser is final.


21


6. FEES, CHARGES AND EXPENSES

6.1 CHARGES

Charges payable by the investors directly when investing in the Fund, are as below –

In calculating the charges imposed, any adjustments for rounding up would only be conducted once at the

charges level and only up to 4 decimal places.

Notes:

i) The Manager may, at its discretion, charge a lower sales charge based on criteria as may be

determined from time to time.

ii) All the above charges are subject to the goods and services tax (GST) currently at the rate of 6.0% (You

may refer to Section 13.9 on the GST).

a) Sales Charge

Below is an illustration on how the sales charge is calculated:-

Investment amount in PMB SSCF : RM10,000

NAV per unit : RM0.5000

Sales charge : 6.0% of NAV per unit

Units issued to Unit Holder = Investment amount

NAV per unit

= RM10,000

RM0.5000

= 20,000 units

Sales charge per unit = NAV per unit x Sales charge (%)

= RM0.5000 x 6.0%

= RM0.0300

Total sales charge* = 20,000 units x RM0.0300

= RM600.00

Please note that the above example is for illustration purposes only.

*Note: In addition, the above charge is subject to the GST currently at the rate of 6.0%.

b) Repurchase Charge

We do not impose any repurchase charge when you redeem your units.

There are fees and charges involved and investors are advised to consider them before investing

in the Fund.

Charges Distribution Channel(s) % of the NAV

Sales charge per unit IUTA, UTC & direct purchase with Manager 6.0%

Repurchase charge per

unit IUTA, UTC & direct repurchase with Manager Nil


22


c) Transfer Fee

Up to RM10 per transaction (excluding stamp duty).

Note: In addition, the above fee is subject to the GST currently at the rate of 6.0%.

d) Switching Fee

This facility enables Unit Holders to switch units from PMB SSCF to other funds managed by the

Manager which is available for sale. Units switched are transacted at the Fund’s NAV per unit. The

minimum investment that can be switched in each transaction is RM1,000. The conditions for

switching are set out below:-

Switching

fee*

The charges for switching are set out below:

To

From

Equity

funds

Mixed Asset/

Balanced

fund

Money Market

fund

PMB SSCF RM25 per

transaction

RM25 per

transaction Nil

*Note: In addition, the above fee is subject to the GST currently at the rate of 6.0%.

6.2 FEES

When investing in the Fund, you may also incur indirect fees which are charged to the Fund as follows:-

a) Annual Management Fee

The annual management fee is calculated daily at 1.5% per annum of the NAV of the Fund, before

accruing the management fee and the trustee fee on the valuation point.

The computation of the annual management fee for a particular date based on the following

method:-

(NAV before accruing the management fee and the trustee fee

on the valuation point) X (the rate of management fee)

Number of days in a year

Assuming the NAV before accruing the management fee and trustee fee on a particular date is

RM280,000.00 and the rate of management fee for the relevant fund is 1.5% per annum, the

amount of the management fee charged for that particular date would be:-

Management Fee* = RM280,000.00 X 1.5% /365 days

= RM11.51


b) Annual Trustee Fee

The annual trustee fee is calculated daily at 0.05% per annum of the NAV, before accruing the

annual management fee and the trustee fee accrued on the valuation point. The computation of the

annual trustee fee for a particular date is based on the following method:-

(NAV before accruing the management fee and the trustee

fee on the valuation point) X (the rate of trustee fee)

Number of days in a year


23


Assuming the NAV before accruing the management fee and trustee fee on a particular date is

RM280,000.00 and the rate of trustee fee for the relevant fund is 0.05% per annum, the amount of

the trustee fee charged for that particular date would be:-


6.3 EXPENSES

The Fund may incur the following operational and administrative expenses: -

a) Commissions/fees paid to brokers/dealers in effecting dealings in the investments of the Fund

shown on the contract notes or confirmation notes;

b) Charges/fees paid to sub-custodian (for foreign investments only);

c) Tax and other duties charged on the Fund by the Government and other authorities;

d) The fees and other expenses properly incurred by the auditor appointed for the Fund;

e) Fees for the valuation of any investments of the Fund by independent valuers for the benefit of the

Fund;

f) Cost of printing the annual/interim reports;

g) Costs incurred for the modification of the Deed of the Fund other than those for the benefit of the

Manager and/or Trustee;

h) Cost incurred for any meeting of the Unit Holders other than those convened by, or for the benefit

of, the Manager and/or Trustee; and

i) Any other fees/expenses permitted by the Deed.

Expenses related to the issuance of this Prospectus will be borne by the Manager.

*Note: In addition, the above expenses are subject to the GST currently at the rate of 6.0%.

6.4 REBATE AND COMMISSION

The Manager and the Trustee are not entitled to any rebates or to share any commission from broker in

consideration for direct dealings in the investments of the Fund. Accordingly, any rebates and shared

commissions will be directed to the account of the Fund.

However, we may receive goods or services by way of soft commissions provided always that the goods or

services are of demonstrable benefit to the Fund and that the execution of a transaction is consistent with

the best execution standards.

Trustee Fee* = RM280,000.00 X 0.05% / 365 days

= RM0.38


24


7. TRANSACTION INFORMATION

7.1 TRANSACTION DETAILS

a) How to Start Investing

Please read and understand the Prospectus (and any supplementary prospectus) and Product

Highlight Sheet (PHS) before investing. You must attain the age of at least 18 on the date of

application. If you fulfill this requirement, all you have to do is to complete the FIMM Pre-

Investment Form, as well as PMB Investment’s Suitability Assessment Form and Master

Application Form for initial account opening. In addition, you need to complete the Investment

Request Form for buying transaction together with a photocopy of your NRIC or any related

document.

b) How to Conduct Subsequent Transaction

For subsequent transaction, simply complete the Investment Request Form (to make additional

investment). If your completed Suitability Assessment Form is done more than three (3) years

prior to this transaction, you need to do a new assessment.

c) Application and Acceptance

Application of units should be made before the cut-off time at 3.00 p.m. with cleared payment on

any business day. The units will be issued at NAV per unit calculated at the end of the business day

(i.e. “forward pricing”) on which the application to purchase is received by the Manager. Any

application received after the cut-off time, the request will be deemed to have been received on the

next business day. We reserve the right to vary the terms and conditions of investment and

payment modes from time to time, which shall be communicated to you in writing. Note that we

reserve the right to reject any application without providing any reason, whatsoever. We may also

reject any application that is not complete and/or not accompanied by the required documents. We

do not accept application from any US person.

d) Statement of Investment

An investor is recognized as a registered Unit Holder by PMB Investment upon receipt of payment

(in PMB Investment’s account) together with completed investment application form and other

relevant supporting documents. The Manager will then issue a statement of investment within 14

HOW CAN YOU KEEP TRACK OF YOUR INVESTMENT

The annual and interim reports with information on the performance and investments of the Fund

are issued to unit holders of the Fund within two (2) months from the closing of its respective

interim and financial year periods.

You may obtain our latest information, our products and services, and market outlook at our website

pmbinvest.com.my. Our officers will provide you with more specific information on your investments

should you require such a service.

You may communicate with us via :

• Investor Relation Careline: (03) 2785 9900

• Email: [email protected]

• Website: Complete the feedback form at pmbinvest.com.my

You may also walk-in to the Head Office or any of our regional offices during normal business hours,

8.45 a.m. to 5.15 p.m. Mondays to Fridays (excluding public holidays) or write to the same. Fund

prices will be published daily on our website.


25


days of receipt of the aforesaid documents provided that the application monies have cleared.

Investment certificate will not be issued in respect of purchase of units.

7.2 PAYMENT METHODS

a) Via Cheque, Bank Draft or Money Order

Payment can be made by cheque, bank draft or money order drawn on a bank located in Malaysia

in Ringgit Malaysia (RM), crossed, made payable to “PMB Investment Berhad”. Applicants are to

write their name and NRIC number or passport number or corporate/institutional registration

number at the back of the cheque, draft or money order. Application shall be processed based on

the net amount received. Where payment is by cheque, the cheque must be issued by the investor.

b) Via Bank Transfer Services (Telegraphic Transfer/Inter-Bank GIRO/Online Banking)

Applicants may transfer the subscription proceeds directly into the bank account of PMB

Investment Berhad via telegraphic transfer/inter-bank GIRO/online banking. Please include

applicant’s name in the transaction description where applicable for reference.

Details of our principal bank accounts are as follows:

Bank Account number

Maybank Islamic Berhad 5-64342-00013-8

Public Islamic Bank Berhad 3810755226

CIMB Islamic Bank Berhad 8600006139

Bank Muamalat (Malaysia) Berhad 14010003688717

Bank Islam (Malaysia) Berhad 14153010008206

c) Via Auto debit

You may choose to invest on a regular basis through a bank auto-debit (standing instruction)

facility at the following financial institutions:-

i) Bank Simpanan Nasional

ii) CIMB Bank Berhad

iii) Malayan Banking Berhad/Maybank Islamic Berhad

iv) RHB Bank Berhad/RHB Islamic Bank Berhad

d) Via Salary Deduction

If you are a Government servant, you can invest regularly by applying for the salary deduction

instruction through ANGKASA. If you are in the private sector, you may check with your employer

on the Employee’s Salary Deduction Scheme for a regular monthly investment.

7.3 COOLING-OFF POLICY

A first time investor with the Manager shall have the cooling-off right, within 6 business days, (commencing

from the day the completed application is received and accepted by the Manager) to withdraw his/her

investment in the fund. However, this cooling-off period does not apply to corporations or institutions, staff

of the Manager and a person registered with a body approved by the SC to deal in unit trusts.

Investors are advised not to make payment in cash when purchasing units of the Fund via any

institutional/retail agent.


26


An investor who exercises his/her right to withdraw during the cooling-off period is entitled to receive a

full refund of the money initially invested i.e.:-

a) the NAV per unit on the day the units were first purchased; plus

b) the sales charge per unit originally imposed on the day the units were purchased.

The money payable out of this transaction must be refunded to the investor within 10 days of the Manager’s

receipt of the repurchase request.

7.4 REPURCHASING/REDEEMING AN INVESTMENT

You may redeem all or some of the units held on any business day by completing a Transaction Form

together with a photocopy of your NRIC.

a) Redemption

i) For a request to redeem units received or deemed to have been received by us on or

before 3.00 p.m. on any business day, units will be redeemed at the NAV per unit

calculated at the end of business day on which the request was received (“forward

pricing”).

ii) Where the repurchase request is received after the cut-off time, i.e. after 3.00 p.m., the

request will be deemed to have been received on the next business day.

iii) Payment will be made within 10 days of the receipt of redemption request.

iv) We reserve the right to vary the terms and conditions of repurchase/redemption mode

from time to time, which shall be communicated to you in writing.

b) General

i) No restriction on the frequency of redemption.

ii) There is no minimum number of units for redemption but a Unit Holder must retain at

least RM100 upon partial redemption.

iii) No redemption fee is charged. However, any applicable bank charges and other bank fees

incurred as a result of a withdrawal by way of telegraphic transfer, bankers cheque or

other special payment method will be borne by the Unit Holder.

iv) If the units are held in the names of more than one Unit Holder, where mode of holding is

specified as “Joint Application”, redemption request will have to be signed by all the joint

holders unless the joint applicant is a minor.

7.5 CHANNELS TO PURCHASE AND REDEEM UNITS

You may refer the address of our Head Office and list of our regional offices in Section 13.16.

7.6 SWITCHING BETWEEN FUNDS

a) Switching is a facility which enables you to convert units of a particular fund for the units of our

other funds. Simply complete the Transaction Form. Unit Holders are required to enclose the

certificate of investment (if any) upon switching.

b) All Unit Holders are allowed to switch from one fund to any other funds managed by the Manager.

The minimum amount you can switch is RM1,000.

c) Switching fee is as per condition below:

i) No switching fee will be imposed if switching is made to fund with lower or no sales

charge (e.g. equity fund to money market fund).


27


ii) RM25 per transaction if the sales charge of the fund to be switched into is equal to the

sales charge of the fund from which switching is made (e.g. equity fund to balanced fund).

iii) At sales charge if the sales charge of the fund to be switched into exceeds the sales charge

of the fund from which switching is made (e.g. money market fund to equity fund).

However, if the originating fund from which switching is made is from an equity or

balanced fund, the switching fee shall be RM25 only.

iv) In addition, you shall be liable to pay any Goods and Services Tax imposed on you by virtue

of any law, regulation, directive or order by any governmental authority in relation to the

switching fee.

v) The Manager reserves the right to reject any switching request:

• that it regards as disruptive to efficient portfolio management; or

• if deemed by the Manager to be contrary to the best interest of the affected Fund.

d) To switch between the funds managed by the Manager, you can simply complete the switching

form at the Manager’s Head Office, Regional and Agency Offices.

(Please refer to Section 6.1 for switching charges).

7.7 TRANSFER OF UNITS

a) An investor may transfer some or all of the units held to another investor by completing a Transfer

Form. Subject to the provisions of the Deed, transfer of unit can be made provided that the units

registered thereof are not less than the minimum prescribed number of units.

b) In the case of a death, bankruptcy or insanity, the units shall be transferred to the

remaining/surviving joint holder provided that the age of remaining / surviving joint holder, if any,

is at least 18 years old, or to the executors or administrators of the deceased and subject to the

applicability of any Shariah principles (for Muslim investors).

c) Both the transferor (the Unit Holder) and transferee must complete the Transfer Form and submit

it to the Manager together with the certificate or any supporting document to prove the title of the

transferor. The Manager may refuse to register a transfer of less than RM100 or where the balance

in the transferor’s holding is less than RM100 in value at the time of transaction or any other

amount as may be determined by the Manager from time to time.

d) The transfer shall be affected within 30 days from the date of receipt of the request. A fee of not

exceeding RM10.00 will be charged for a transfer of units. In addition, you shall be liable to pay any

GST imposed on you by virtue of any law, regulation, directive or order by any governmental

authority in relation to the transfer fee.


28


7.8 A QUICK GUIDE ON HOW TO BUY, SELL, SWITCH & TRANSFER

How to Documents Required Minimum amount

Make an

Initial

Investment

Individual Investor:

• Pre-Investment Form by FIMM (for every new

fund);

• Suitability Assessment Form;

• Master Application Form;

• Investment Request Form;

• A photocopy of NRIC/Passport (if applicant is

Malaysian resident or foreigner)

Corporate investor:

• Master Application Form;

• Pre-Investment Form by FIMM (for every new

fund);

• Suitability Assessment Form;

• Investment Request Form;

• A copy of each of the company’s resolution

and certificate of incorporation (certified by a

director or company secretary);

• List of authorised signatories and specimen

signatures; and

• Form 8 or 9, 13, 49 or other documents, if

required

Completed forms and documents required

should be submitted together with payment or

proof of payment.

For Initial investment:

• Direct purchase:

RM100

Make

Additional

Investment

Individual Investor

• Investment Request Form; and

• A copy of NRIC/passport

Corporate Investor:

• Investment Request Form signed by

authorized signatories and company stamp;

and

• Board Resolution or any other necessary

authorization.

Completed forms and documents required

should be submitted together with payment or

proof of payment.

For additional investment:

• Direct purchase & Auto

debit:

- RM50

Redeem,

Switching

and Transfer

Individual Investor (single/joint applicant )

Redeem/Switching

• Transaction Form;

• A copy of NRIC/passport; and

• Pre-Investment form

(For switching to new fund)

For both individual and

corporate investor

Repurchase/redemption:

• No minimum number of

units; however, upon partial

redemption/repurchase, at

least RM100 value at the


29


Transfer

• Transfer Form; and

• A copy of NRIC/passport

Corporate Investor

Redeem/Switching

• Transaction form;

• Signed by authorized signatories and

company stamp; and

• Board Resolution or any other necessary

authorization

point of transaction should

be retained.

Switch & Transfer:

• At least RM1,000 per

transaction.

• For transfer of units, the

minimum amount may be

determined by the Manager

from time to time.

7.9 INCOME DISTRIBUTION AND REINVESTMENT POLICIES

a) Income Distribution

Income of the Fund includes dividends from shares, profit from deposit placement and debt income

securities, and capital gains realized from the disposal of investments in the Fund. The Fund may

distribute all or part of its net income and or net realized capital gains to its Unit Holders at the

discretion of the Manager, subject to the Trustee’s approval. Potential investors are however

advised that the distribution is subject to the Deed and the objective of the Fund, and after taking

into consideration the total return of the Fund, income for the period, cash flow of the distribution,

and stability and sustainability of the distribution of return.

Income distribution will be paid to eligible Unit Holders via

i) cheques; or

ii) e-payment to the Unit Holder’s bank account.

In certain cases, upon presentation to the depositing banks or financial institutions, the cheques

may attract bank commission or transaction charges which will be borne by the Unit Holders.

The income distributed may be in the form of ‘units’ instead of cash. A statement of the distribution

of units will be delivered to the Unit Holder within a reasonable time period, as permitted by the

Guidelines.

b) Unit Split

The Fund may undertake a unit split exercise to reduce the price of the units and this can only be

conducted once in every 12 month-period. The unit split exercise may be conducted at the time of

the distribution of return or at any time within the financial year. Where the exercise is conducted

within the financial year, the Fund needs to show a sustainable appreciation in its NAV in the

preceding 6-month period.

c) Reinvestment Policies

Reinvestment instruction of income distribution may be applied by Unit Holders by marking the

instruction in the application form. The distribution will be credited to the Unit Holder’s

investment account. The value of the reinvestment of distribution will be equivalent to the NAV per

unit on the first business day following the Distribution Date. No charge will be imposed on the

distribution reinvestment.

However, if a Unit Holder wishes to reinvest the distribution upon receipt of distribution

warrants/cash, such distribution reinvestment will be treated as normal sales of units.


30


d) Auto Reinvestment

Auto reinvestment will be applied to the followings:

i) Distribution amount of less than RM50, which will be reinvested at the unit price

equivalent to the NAV per unit computed at the end of the next business day following the

Distribution Date. No additional charge will be imposed on the distribution reinvestment.

ii) Fund’s distribution of income is by way of units, irrespective of the standing instruction

given by the Unit Holders to the contrary.

iii) Unit Holder should notify the Manager of their option for reinvestment and any change of

address within fourteen (14) business days prior to each distribution date.

e) Unclaimed Distribution

Distributions (if any) if not claimed within 12 months after the date of payment will be sent to the

Office of Registrar of Unclaimed Monies, Accountant General’s Department as required under the

Unclaimed Monies Act 1965 (as may be amended).

7.10 DETERMINATION OF PRICE

a) Forward Pricing

The price of units of the Fund is determined based on the NAV per unit as at the next valuation

point after a request for sales or repurchase of Units is received by the Manager.

Dealing cut-off time for any units to be issued and/or redeemed shall reach the Manager before

3.00 p.m. on the business day. Any applications received after the cut-off time will be treated as

received on the following business day.

b) Single Pricing Regime (SPR)

According to the SPR, the creation, cancellation, selling and buying/repurchase prices for Units

would be the NAV per unit on any transaction. For example, the NAV per Unit during a particular

date is RM0.23375 (before 4 decimal rounding adjustments).

NAV per unit = Buying price per unit

= RM0.2338 (rounded to 4 decimal places

c) Computation of NAV and NAV Per Unit

The NAV of the Fund is determined by deducting the value of the Fund’s liabilities from the value of

the Fund’s assets, at a valuation point.

Illustration :

For illustration purposes, assuming the figures of a relevant day are as below:

Value of the Fund’s Assets = RM100,000,000.00

Value of the Fund’s Liabilities = RM500,000.00

Units in Circulation = 150,000,000

Annual Management Fee = 1.5% per annum

Annual Trustee Fee = 0.05% per annum


31


The NAV of the Fund will be:

RM

Fund’s asset 100,000,000.00

Less: Fund’s liabilities (500,000.00)

Net asset value (before annual management fee & trustee fee) 99,500,000.00

Less: Management fee (1.5% per annum) (4,089.04)

Trustee fee (0.05% per annum) (136.30)

NAV of the Fund of the day (before GST) 99,495,774.66

Less: GST of 6% on the management fee (245.34)

GST of 6% on the trustee fee (8.18)

NAV of the Fund of the day (after GST) 99,495,521.14

The NAV per unit of the Fund will be:

NAV per unit = NAV of the Fund / Unit in Circulation

= RM 99,495,521.14/ 150,000,000

= RM 0.66330347426 (before rounding adjustment)

= RM 0.6633 (rounded to 4 decimal points)

d) Amount Payable Upon Sales of Units

Units will be sold at the NAV per unit of the Fund. Any sales charge payable by the Unit Holder

would be calculated as a percentage of the NAV per unit of the Fund.

For illustration purposes, assume the following;

Price/ NAV per unit = RM0.5000

Sales charge per unit = 6.0%

Goods & Services Tax = 6.0%


32


Purchase of 10,000 units Purchase with proceeds of RM10,000

Amount

invested

= Units purchased x Price per

unit

Sales charge

with GST

= Sales charge + (Sales charge x

6.0%)

= 10,000 x RM0.5000 = 6% + (6% x 6%)

= RM5,000.00 = 6.36%

Sales charge = Price per unit x Sales charge

per unit x Units purchased

Amount payable

per unit

= Price per unit + (Price per unit

x Sales charge with GST)

= RM0.5000 x 6.0% x 10,000

units

= RM0.5000 + (RM0.5000 x

6.36%)

= RM300.00 = RM0.5318

GST = Sales charge x 6.0% Units received = Proceeds / amount payable

= RM300.00 x 6.0% per unit

= RM18.00 = RM10,000-00/RM0.5318

= 18,804.06 units

Total payable = Amount invested + Sales

Charge + GST Amount invested = Units received x price per unit

= RM5,000.00 + RM300.00 + = 18,804.06 x RM0.5000

RM18 = RM9,402.0305

= RM5,318.00 = RM9,402.03 (to the nearest 2

decimal points)

Sales charge = 18,804.06 x RM0.5000 X 6.0%

= RM564.1218

= RM564.12 (to the nearest 2

decimal points)

GST = RM564.12 x 6.0%

= RM33.8475

= RM33.85 (to the nearest 2

decimal points

Total payable = Amount invested + Sales

charges + GST

= RM9,402.03 + RM564.12 +

RM33.85

= RM10,000.00

e) Amount Received Upon Repurchase of Units

As the redemption or buying price per unit of the Fund is equivalent to the NAV per unit, the total

amount received upon a repurchase of units will be equivalent to (the number of units redeemed x

the redemption price or buying price per unit) less (redemption charge x number of units

redeemed.) However, PMB Investment does not imposed any charges on redemption during the

lifetime of this Prospectus.

Illustration of Amount Received upon Redemption of units is shown below:-

Amount received = (units redeemed) x (redemption price or buying price per unit) –

(redemption charge x number of units redeemed)

= (10,000 units x RM0.5000) – (0 x 10,000 units)

= RM5,000


33


f) Incorrect Pricing

In the case of pricing discrepancies in the calculation of NAV occurs, the Manager will take

immediate remedial action to rectify the Unit pricing at the Fund’s level. The money will be

reimbursed to the Unit Holder if the error is more than 0.5% of the Unit NAV or RM10.00 in

absolute amount. Nevertheless, for a reimbursement of a lesser amount will be up to the

Manager’s discretion.


34


8. MANAGEMENT OF THE FUND

8.1 THE MANAGER’S PROFILE

PMB Investment Berhad (PMB Investment), formerly known as ASM Investment Services Berhad

(ASM Investment), is a wholly owned subsidiary of Pelaburan MARA Berhad (PMB). Its principal

activities are unit trust and funds management. It is an Islamic fund management company.

Incorporated on 15 January 1993 under the Companies Act, 1965 as ASM MARA Unit Trust

Management Berhad (ASM MARA Unit Trust), PMB Investment assumed the unit trust operations

from PMB, then known as Amanah Saham MARA Berhad (ASMB), and its related staff. This was

done following the requirement of the Securities Commission Act, 1993 that unit trust funds are to

be managed by a unit trust management company. PMB commenced operations in the late 1967

and its first unit trust fund was established on 6 April 1968 which is now known as PMB Dana Al-

Aiman.

ASM MARA Unit Trust had its name changed to ASM Investment on 9 October 2006 and it took over

the fund management operations of ASM Asset Management Sdn Bhd, another wholly-owned

subsidiary of PMB, to streamline the unit trusts and funds management activities of the group. ASM

Investment had its name changed to PMB Investment on 28 February 2014.

PMB Investment is licensed under the Capital Markets and Services Act, 2007 and its licence was

converted to an Islamic fund management company on 28 November 2014. It appointed Amanie

Advisors Sdn Bhd in Dec 2014 as its Shariah adviser.

The company has an authorised capital of RM10 million, of which RM6 million has been fully paid.

The PMB group concern has more than 45 years of experience in managing unit trust funds.

As at 30 November 2015, PMB Investment managed 13 unit trust funds and 2 wholesale funds

valued at RM312 million. Total fund size under management for unit trust funds, wholesale funds

and portfolio mandates was RM1.169 billion as at end November 2015.

8.2 BOARD OF DIRECTORS

a) Datuk (Dr) Zamani bin Md Noor - Independent /Chairman

b) Dato’ Sri Haji Rahim bin Haji Abdul - Independent

c) Professor Dr. Faridah binti Haji Hassan - Independent

d) Haji Mansoor bin Ahmad - Independent

e) Dato’ Mohamad Safie bin Haji Asnawi - Independent

f) Nik Mohamed Zaki bin Nik Yusoff - Independent

g) Ahmad Nazim bin Abd Rahman - Non-Independent

h) Ameer Ali bin Vali Mohamed - Non-Independent /Chief Executive Officer

8.3 MANAGEMENT TEAM

a) Ameer Ali bin Vali Mohamed

Ameer is the Chief Executive Officer of PMB Investment. He joined the Manager on 2 April 2012

and brought with him more than 20 years of experience in the capital markets, having entered into

the securities industry in December 1990 as an investment analyst. He held positions in research

analysis and portfolio management including as fund manager of the then Arab-Malaysian Unit

Trusts Berhad; senior manager of Affin Fund Management Sdn Bhd; head of investment – external

clients for Mayban Investment Management Sdn Bhd before entrusted to establish and head its

Business Development Department; and CEO/CIO of OSK Asset Management Sdn Bhd. Prior to

joining PMB Investment, he was the CE/Managing Director of Amanah Saham Kedah Berhad.


35


Among others, Ameer was the second-man in a team that was involved in the development of

Malaysia’s first privately managed Islamic equity unit trust fund that was launched in early 1993.

He was the first batch graduate of Bachelor of Business Administration (Hons) degree from the

International Islamic University Malaysia, where he graduated in 1988 with second class upper

honours. He started as a financial journalist with the then Business Times before entering into the

securities industry. He is the holder of a Capital Market Services Representative Licence (Islamic

fund management).

b) Isnami bin Ahmad Mohtar

Isnami was appointed Acting Chief Investment Officer effective on 10 April 2014. He has more than

15 years of experience in the funds management industry, starting in 1996 when he was appointed

Senior Investment Officer at PMB Investment to manage some Bumiputera funds. He was

subsequently promoted to Portfolio Manager in 2000 and was given larger responsibilities to

manage Shariah and conventional unit trust and corporate funds. He was made Senior Manager,

Fund Management in 2003. He joined Inter-Pacific Asset Management Sdn Bhd in August 2007 as a

Fund Manager, managing unit trust and corporate funds. He rejoined PMB Investment in April

2010 and was re-designated Head, Equity in January 2013. Isnami holds a Bachelor of Science

degree in Business Administration (Finance) from University of North Carolina at Charlotte, USA.

He is the holder of a Capital Markets Services Representative Licence (Islamic fund management).

c) Zulkefli bin Tan Sri Yahya

Zulkefli is the Chief Sales Officer and joined the company on 7 January 2015. He is responsible for

the overall sales of the company. He brought with him an extensive experience in marketing and

sales of financial products and services. Prior to joining PMB Investment, he was with Affin Fund

Management Berhad for 3 years as Vice President, Business Development and Marketing. He was

once the GM/CEO of Asia Unit Trusts Berhad (1995-2001) and CEO of Amanah Ventures Berhad

(2001-2004), responsible primarily for product development and expanding assets under

management. He graduated with a B.A in Social Science (Economics/Law) from Canberra College of

Advanced Education.

d) Mohd Adzhar bin Abd Hamed

Adzhar is the Deputy General Manager/Head, Compliance and Risk Management, PMB and he

oversees PMB Investment’s compliance with the related statutory and regulatory requirements

and risk management. He possesses a Diploma in Banking Studies from UiTM and a Bachelor of

Corporate Administration (Hons) from the same university. He joined PMB on 1 March 2000. Prior

to that, he was attached with one of the leading financial institutions in Malaysia for almost 6 years.

He is the designated Compliance Officer of PMB Investment, and registered with the SC.

e) Marina binti Ghazali

Marina is the Head of Marketing. She holds a Diploma in Mass Communication from UiTM. She has

more than 25 years of experience in marketing communications including public relations,

advertising and promotion. Currently, Marina manages the functions of investor relations,

strategic marketing, advertising and promotion. Prior to joining PMB Investment, she was attached

to PMB as the Head of Human Resource Development and Corporate Communication. Marina was

also with Park May Berhad (1995 – 1997) and a government agency (1988 – 1994).

f) Aida binti Abu Bakar

Aida is the Head of Fund Administration. She joined the PMB in 1997 as a Senior Executive, Projects

and Venture Capital. In 2000, she was transferred to PMB Investment and has since accumulated

more than 13 years of experience in unit trust, attached to several departments within the

company covering product research and development, business development, investment, unit

trust operations, marketing and promotion, customer administration and services, and agency

services. She has been instrumental in developing and launching PMB Investment’s Shariah retail

products and experience in merger, liquidation and conversion of unit trust schemes. Currently she


36


manages the functions of product development, trust administration and trust governance of PMB

Investment. She started her career in 1995 with a public listed company, Kumpulan Guthrie Berhad

where she gained exposure in accounting and finance. She holds a Master of Business

Administration from University of Wales, United Kingdom and a Bachelor of Arts in Accounting and

Financial Management from University of Essex, United Kingdom.

g) Marlina binti Hj. Bustanuddin

Marlina is the Manager, Accounts of PMB Investment. She is responsible for the overall function of

the company accounts, unit trust accounts and portfolio accounts. She obtained her Bachelor of

Accountancy from UiTM in June 2001 and Diploma in Accountancy from the same university in

November 1998. She is also a member of the Malaysian Institute of Accountants (MIA). Marlina has

been with the PMB Investment since 2007.

8.4 SUMMARY OF FINANCIAL POSITION

Audited Year 31 December (RM’000)

2014 2013 2012

Authorized Capital 10,000 10,000 10,000

Paid-up Capital 6,000 5,000 5,000

Share Premium 1,000 1,000 1,000

Shareholders’ Funds 10,550 11,161 12,626

Turnover 106,861 82,638 219,133

Pre-tax Profit/ (Loss) 185 (1,049) 970

After Tax Profit 185 (1,049) 956

8.5 ROLES, DUTIES AND RESPONSIBILITIES OF THE MANAGER

PMB Investment is responsible for the day-to-day management of the Fund, in accordance with the

provision of this Prospectus (as amended from time to time) the Deed, Act and the Guidelines on

Unit Trust Funds. Our main functions, duties and responsibilities include but not limited to the

following:-

a) Marketing, distribution, sale and repurchase of units of the Fund;

b) Maintenance of proper records of the Fund;

c) Distributing annual and interim reports of the Fund;

d) Providing customer services;

e) To ensure that the interests of the Unit Holders are best served and protected at all times;

f) To formulate and propose the portfolio strategy in line with the Fund’s investment objective

and Investment Committee direction;

g) To review the performance and portfolio composition of the Fund and to make the necessary

recommendations thereof to the Investment Committee;

h) To review the market trend (both local and international) and make the necessary

recommendation to the Investment Committee;

i) To recommend stocks or other investment instruments in line with the Fund’s objectives;

j) To undertake in depth market and company research so as to assist the Investment

Committee in their decision making; and


37


k) To be responsible for the day to day management of the Fund consistent with the Guidelines

and the direction of the Investment Committee.

8.6 MANAGER’S DELEGATE

PMB Investment has delegated the following functions to Pelaburan MARA Berhad (PMB):

a) Information Technology

b) Human Resource Development

c) Corporate Communications

d) Administration

e) Compliance

f) Operational Risk Management

g) Internal Audit

h) Business Strategy and Planning

PMB is a strategic investment and asset management company wholly-owned by Majlis Amanah

Rakyat (MARA), a statutory agency of the Government of Malaysia. Established on 24 June 1967,

PMB is principally involved in private equity investments, portfolio fund management, unit trust

management, financial services and corporate advisory. PMB is the parent company of PMB

Investment.

The roles and responsibilities of PMB, being the delegate of the Manager, are –

a) to ensure that the functions are discharged in effective and efficient manners;

b) to communicate to the Manager on any relevant changes or latest development related to the

functions;

c) to consider, propose and implement any relevant improvements related to the functions; and

d) to ensure that the relevant laws governing the Manager are complied with at all times.

8.7 MATERIAL LITIGATION AND ARBITRATION

As at 30 November 2015, PMB Investment was not engaged, pending or threatened, in any material

litigation and arbitration. It was also disclosed under the Director’s Report that there is no

contingent liability that will or may substantially affect our ability to meet the obligations as and

when they fall due.

8.8 INVESTMENT COMMITTEE

a) Profile of Investment Committee Members

i) Mansoor bin Ahmad (Independent/Chairman)

Mansoor received his Bachelor of Economics (Hons) degree from the University of Malaya and

Master of Business Administration from the Australian Graduate School of Management,

University of New South Wales, Sydney, Australia. He joined Komplek Kewangan Malaysia

Berhad in September 1975 as a Research Officer and was later transferred to ASMB and

became an Investment Officer in 1982. He was promoted as Head of Investment and

Corporate Development in 1991 and as General Manager of Operations in 1996, overseeing all

investment and business development function of PMB. In 1999, he was seconded to ASM

Asset Management Sdn. Bhd, a licensed fund management company as a General Manager and

served in that capacity until March 2002. He was transferred to PMB Investment and was

subsequently appointed as the Chief Executive Officer on 2 May 2002 and also as an Executive

Director on 1 April 2004. He was appointed as a member of the Investment Committee on 6

June 2002. He was also elected as a Council Member of FIMM for two (2) consecutive two year


38


terms since 2004. On 1 December 2006, Mansoor Ahmad was re-designated as the Executive

Director/Adviser of PMB Investment. He retired on 6 July 2007 and thereafter has served as

the Director of PMB Investment until today.

ii) Nik Mohamed Zaki bin Nik Yusoff (Independent)

Nik Mohamed Zaki was appointed as a member of the Investment Committee on 15 June 2009.

He graduated from Carleton University, Ottawa, Canada in 1985 and holds a Bachelor of

Commerce (Hons) Degree. He has more than 25 years of experience in the financial industry.

He started his career with financial institutions in commercial banking before furthering his

career in merchant banking with Affin Investment Bank Berhad. He left the banking sector in

1994 to join PMB as Head, Corporate Development Unit and has been part of Group’s Senior

Management team since 1997. In PMB Group, he has gained further experience in fund

management, unit trust operations, strategic and financial planning and venture

capital/equity investment amongst others. He retired as the Group Chief Executive Officer of

PMB on 30 April 2013. He has served as a Board member of PMB Investment since May 2008.

iii) Professor Dr. Mohamed Aslam bin Mohamed Haneef (Independent)

Professor Dr. Aslam was appointed a member of the Investment Committee on 1 January

2016. He is a currently Professor of Economics at the Economics Department and Director,

Centre for Islamic Economics at the International Islamic University, Malaysia (IIUM) in Kuala

Lumpur. Aslam previously served as an Investment Committee member of a local fund

management company for 13 years from September 2001 to October 2014.

He was in the pioneer batch of Bachelor of Economics (Hons) graduates from IIUM in 1987,

obtained his Master’s degree in Economics from University Malaya in 1991. He received his

PhD in 1994 from the School of Development Studies, University of East Anglia, United

Kingdom. He was conferred with Associate Professor in 2000 and Professor in 2006.

Aslam is also an executive committee member of the International Association for Islamic

Economics (IAEI) and an executive committee member of the International Council of Islamic

Finance Educators (ICIFE). He has written a number of books, articles, chapters in books and

book reviews.

iv) Ahmad Nazim bin Abd Rahman (Non-Independent)

Ahmad Nazim bin Abd Rahman is Group Chief Executive Officer of Pelaburan Mara Berhad, an

investment and asset management firm wholly-owned by the Government of Malaysia. He has

been involved in investments and fundraising activities across various industries and has

undertaken acquisitions of both listed and unlisted commercial entities and real estate assets

and projects across the region. He was previously Chief Executive Officer of a regional

telecommunication group and had served as President Director of its Indonesian subsidiary,

responsible for the group’s telecommunication infrastructure business in the region.

He currently sits on the Board of Directors of National Bank of Abu Dhabi (M) Berhad and

serves as its Chairman of the Risk Management Committee and the Remuneration Committee.

He is also a member of the board of Singapore-based private equity funds Al Masah Capital

(Asia) Pte Ltd.

Ahmad Nazim started his career in law and corporate finance and had worked with leading

firms in Kuala Lumpur and London and with Securities Commission of Malaysia. He had

advised financial institutions and corporations on various aspects of corporate finance, cross-

border financing, mergers and acquisitions and restructuring activities. A keen observer of

international affairs, he was the 2011 International Fellow at the Centre for Strategic and

International Studies, Washington, DC and a Fulbright scholar at Georgetown University

where he obtained his Master of Laws.


39


b) Roles and Functions of the Investment Committee

The functions and responsibilities of the Investment Committee are as follows:-

i) To ensure the consistency between the investment management policies of the Fund are

consistent and the Fund’s objectives, this Prospectus (as amended from time to time), the

Deed and the Guidelines and other relevant laws;

ii) To formulate investment policies and plan, and to select appropriate strategies to meet the

Fund’s objectives;

iii) To provide guidance and advice in the implementation of the strategies;

iv) To actively monitor, measure and evaluate the investment performance of the Fund and the

Fund Manager;

v) To consider other matters deemed necessary for the benefit of the Fund; and

vi) To recommend the Fund’s income distribution and/or unit splitting for the Trustee’s

approval.

vii) To meet at least once every two (2) months to monitor the management activities of the

Manager.

8.9 SHARIAH ADVISER OF THE FUND

a) Profile of the Shariah Adviser

BIMB Securities Sdn Bhd (BIMBSEC) is a stockbroking subsidiary of BIMB Holdings Bhd. It was

incorporated on 21 February 1994.

The company’s corporate mission is to actively participate in a modern, innovative and dynamic

Islamic capital market in Malaysia, catering for the needs of both Muslims and Non-Muslims.

BIMBSEC is Corporate Shariah Adviser to 24 Islamic unit trust funds. As at 30 November 2015, the

staff strength of BIMBSEC consists of 73 employees of whom 65 are executive staff and 8 are non-

executive staff.

The company has an authorised share capital of RM250 million, and its current issued and paid-up

share capital is RM100 million. The shareholdings of BIMBSEC are as follows:-

Shareholders % of Holding

BIMB Securities Holdings Sdn Bhd

(wholly owned subsidiary of BIMB Holdings Berhad) 51

BIMB Holdings Berhad 49

b) Board of Directors

Name Position

Zahari @ Mohd Zin bin Idris Non-Executive Director

Rashid bin Ismail Executive Director/CEO

Dato’ Johan bin Abdullah Non-Executive Director

Abdul Kadir bin Sahlan Non-Executive Director

Mohamad Rani Dali bin Samsudin Executive Director

Mustapha bin Hamat Non-Executive Director


40


c) Designated Person Responsible for Shariah Matters

Ir. Dr. Muhamad Fuad bin Abdullah

Ir. Dr. Muhamad Fuad, the designated person in-charge of all Shariah matters in BIMBSEC is

appointed to the Shariah Advisory Committee of BIMBSEC effective 1 June 2011.

He graduated with a Bachelor of Science Degree in Electrical Engineering in 1977 and a Master of

Philosophy Degree in Electrical Engineering in 1982 from the University of Southampton, England.

He also obtained a Bachelor of Arts (Jayyid) Degree in Shariah from the University of Jordan in

1994 and a Doctor of Philosophy in Muslim Civilization from the University of Aberdeen, Scotland

in 1996.

Currently Dr. Muhamad Fuad serves as the Chairman of the Shariah Committee of MIDF Group of

Companies and member of the Group Shariah Committee of MNRB Holdings Berhad. He is a

registered Shariah Adviser with the Securities Commission Malaysia (SC) which qualifies him to

advise on Shariah-compliant products and services regulated by the SC.

He is a registered Shariah lawyer of Majlis Agama Islam Perak and an Adjunct Professor of

Universiti Teknikal Malaysia Melaka (UTeM).

He sits on the boards of Sime Darby Bhd, Sime Darby Property Bhd, Malaysian Industrial

Development Finance Berhad (MIDF), MIDF Property Berhad, Mesiniaga Berhad and Institut

Kefahaman Islam Malaysia (IKIM), a public company limited by guarantee.

Dr. Muhamad Fuad is the designated person in-charge of PMB Investment’s funds.

d) Roles and Functions of Shariah Adviser

i) The responsibilities of the Shariah Adviser are to ensure that the Fund is managed and

operated in accordance with Shariah principles, relevant SC regulations and/or standards

including resolutions issued by the SAC.

ii) The Shariah Adviser shall provide expertise and guidance for the Fund in all matters relating

to Shariah principles, including on the Deed and prevailing Prospectus, its structure and

investment process and other operational matters.

iii) Where there is any ambiguity or uncertainty as to an investment, instrument, system,

procedure and/or process, the Shariah Adviser shall consult the SC.

iv) The Shariah Adviser is responsible to review the Fund’s compliance report as provided by the

compliance officer and investment transaction report provided by or duly approved by the

Trustee, to ensure that the Fund’s investments are in line with Shariah principles.

v) The Shariah Adviser shall prepare a report to be included in the Fund’s interim and annual

report certifying whether the Fund has been managed and operated in accordance with

Shariah principles for the period concerned.

vi) The Shariah Adviser shall meet with the Fund Manager on a quarterly basis for review of the

Fund management or any other ad-hoc meeting as required.

8.10 INVESTMENT MANAGEMENT TEAM

a) Ameer Ali bin Vali Mohamed

The detailed profile is as aforementioned is Section 8.3.

b) Isnami bin Ahmad Mohtar

The detailed profile is as aforementioned is Section 8.3.


41


c) Suliman bin Bakar

Suliman is the Senior Manager, Portfolio. He joined the Manager on 5 October 2015. Prior to

joining PMB Investment, he was with Kedah Islamic Asset Management Berhad from 1995 until

2015 and his last position was Executive Director / Head of Portfolio and Research Department.

Prior to that, he was attached with one of the leading financial institutions in Malaysia from 1991

until 1994. He has accumulated more than 21 years of experience in fund management industry.

He holds a Diploma in Accountancy from UiTM. He is the holder of a Capital Markets Services

Representative Licence (fund management).

d) Norzahari bin Zakaria

Norzahari is the Head of Research and reports to the Acting CIO. He is responsible for the overall

management of the investment research activities of the company, including but not limited to

economic research, equity research, fixed income research and money market research. He also

manages some equity funds. Norzahari has been in the financial industry since September 1990

with extensive experience in credit review, credit marketing, credit control, business development,

venture capital as well as equity research and fund management. He joined PMB in July 2000 and

was initially attached to its Project Department where his job scope was overseeing the venture

capital and credit activities of the company. Subsequently in February 2006, he was transferred to

ASM Asset Management Sdn Bhd and later to PMB Investment. He assumed the current position in

January 2013. Norzahari holds a Diploma in Business Studies and BBA (Hons) Finance from UiTM.

He is the holder of a Capital Markets Services Representative Licence (Islamic fund management).

e) Adil Azhar bin Ibrahim

Adil Azhar is the Portfolio Manager, Fixed Income. He manages fixed income portfolios as well as

monitors and conducts analysis on sukuk and money market instruments. He joined PMB in

October 2013 as Portfolio Manager, Direct Investment and was responsible for the overall due

diligence on all potential investments before being assigned to the current position in PMB

Investment in July 2014. He was previously attached to the Investment Operations and Financial

Market Department of Bank Negara. Adil Azhar holds a Degree of Bachelor of Engineering from

Hokkaido University, Hokkaido, Japan. He is the holder of a Capital Markets Services

Representative Licence (Islamic fund management).

e) Amirul Imran bin Ahmat

Amirul Imran is the Portfolio Manager, Fixed Income. He monitors and conducts analysis on sukuk

and money market instruments. He joined PMB in June 2014 as Portfolio Manager, Investment

Management and was responsible for the overall due diligence on all potential investments before

being assigned to the current position in PMB Investment in March 2015. Prior to that, he held

positions in banking industry including as Assistant Vice President of Affin Investment Bank

Berhad, Manager of RHB Islamic Bank Berhad, Manager of AmInvestment Bank (M) Bhd and

Porftolio Manager of Kumpulan Wang Persaraan Berhad. Amirul Imran holds a B.A (Hons) Business

Administration from University of East London. He is the holder of a Capital Markets Services

Representative Licence (Islamic fund management).

f) Norhazira binti Mazelan

Norhazira is the Assistant Portfolio Manager. She assists in managing fixed income portfolios as

well as monitors and conducts analysis on sukuk and money market instruments. She joined PMB

in February 2014 as Senior Executive, Investment Management, and was responsible for assisting

in money market and fixed income transactions before being assigned to the current position in

PMB Investment in June 2014. She was previously attached to Small Medium Enterprise

Development Bank of Malaysia Kuala Lumpur as an Associate for its Treasury and Investment

Department. Norhazira holds a Bachelor of Business Administration (Hons) (Finance) from UiTM.

She is the holder of a Capital Markets Services Representative Licence (Islamic fund management).


42


g) Nur Raihan binti Munir

Nur Raihan is the Assistant Portfolio Manager. She assists in managing fixed income portfolios as

well as monitors and conducts analysis on sukuk and money market instruments. She joined PMB

in June 2014 as Senior Executive, Investment Management, and was responsible for assisting in

money market and fixed income transactions before being assigned to the current position in PMB

Investment in November 2014. She was previously attached to Small Medium Enterprise

Development Bank of Malaysia Kuala Lumpur as an Associate for its Treasury and Investment

Department. Nor Raihan holds a Bachelor of Business Administration Hons (Finance) from UiTM.

She is the holder of a Capital Markets Services Representative Licence (Islamic fund management).

h) Siti Rafidah binti Ghazali

Siti Rafidah is the Executive, Portfolio Solutions, and an alternate fund manager. She joined PMB

Investment in January 2013 as an Equity Analyst. Prior to that, she was attached to Henry Butcher

Malaysia (Sel) Sdn Bhd as a Valuation Executive in 2012 and Warisan Mukmin Sdn Bhd as an

Investment Executive. Siti Rafidah holds a Bachelor of Estate Management from UiTM. She is the

holder of a Capital Markets Services Representative Licence (Islamic fund management).

i) Nahdatul Syima binti Mohd Saad

Syima is an Equity Analyst and an alternate fund manager. She joined PMB Investment in January

2013. Prior to that, she was attached to Public Bank Berhad as a Graduate Trainee (Credit Analyst

for Hire Purchase) in 2012. Syima holds a Bachelor of Business Administration and Diploma in

Investment Analysis from UiTM. She is the holder of a Capital Markets Services Representative

Licence (Islamic fund management).


43


9. THE TRUSTEE OF THE FUND

9.1 COMPANY PROFILE

CIMB Islamic Trustee Berhad (CITB) is the trustee for the Fund.

CITB is incorporated in Malaysia and registered as a trust company under the Trust Companies Act,

1949. It is qualified to act as a trustee for CISs approved under the Act. It has been involved in the

unit trust industry as trustee close to 25 years.

It has an authorised capital of RM5,000,000 of which the total issued capital is RM2,000,000 and

the total paid up capital is RM1,000,000.

As at 30 November 2015, CITB acts as trustee to 1 real estate investment trust fund, 21 unit trust

funds, 21 wholesale funds and one private retirement scheme (consisting of 3 funds) and has more

than 25 years of experience as a trustee to unit trust funds.

In addition to overseeing this Fund, CITB also acts as trustee to private debt securities issues such

as sukuk, bonds and notes. Other than being the administrator of deceased estates, executor of

wills, trustee for minors or incapacitated persons, CITB also acts as trustee for public, charitable,

staff retirement, and pension/gratuity fund scheme, custodian trustee for associations, clubs and

others.

CITB is supported by 18 staff, comprising 14 executives and 4 non-executives as at 30 November

2015.

a) Board of Directors

• Zahardin Bin Omardin - Non-Executive, Independent Director & Chairman

• Mohamad Safri Bin Shahul Hamid - Non-Executive, Non-Independent Director

• Liew Pik Yoong - Executive, Non-Independent Director

b) Liew Pik Yoong, Susan (Chief Executive Officer)

Ms Liew holds the position of CEO, Group Trustee Services in addition to her role as Head of

Securities Services in CIMB. She joined CIMB in 2011 and has over 28 years experience in the

financial market and securities industry. Prior to CIMB, she held various leadership roles such as

Head/Director of Investors & Intermediaries, Head of Securities Services, Vice President/HOD with

local foreign banks responsible for capital market products such as custody, nominees, unit trust,

fund administration and share margin services. She was also previously Chief Operating Officer

with a local foreign trustee company. Susan holds a professional degree from the Institute of

Chartered Secretaries & Administrators (ICSA).

c) Lee Kooi Yoke (Chief Operating Officer)

Ms Lee holds a Bachelor Degree in Administration (Finance) from Griffith University, Australia and

she is a member of both the Certified Practising Accountants (CPA) Australia and the Malaysia

Institute of Accountant and Financial Planning Association Malaysia. She has more than 22 years of

working experience in the financial industry. Prior to her current appointment, she headed the

operations of a unit trust management company responsible for transfer agency, investment back-

office, system and projects and retail and corporate agency operations. Also, prior to this position,

she headed the investment operations of an established insurance company in Malaysia and

Singapore.


44


d) Summary of Financial Position

Year Ended 2014

(RM’000)

2013

(RM’000)

2012

(RM’000)

Paid-Up Share Capital

Shareholders’ Fund

Turnover *

Profit Before Tax

Profit After Tax

1,000

5,018

3,403

1,312

945

1,000

6,573

2,788

370

263

1,000

6,311

4,000

1,386

993

*Only Shariah-compliant income are recognized since the entity’s conversion to Islamic in 2012.

e) Delegate

CIMB Islamic Trustee Berhad has appointed CIMB Islamic Bank Berhad (CIMB Islamic Bank) as the

Custodian of the Fund’s assets. CIMB Islamic Bank's ultimate holding company is CIMB Group

Holdings Berhad. a listed company in Bursa Malaysia and currently the second largest financial

services provider in Malaysia.

CIMB Islamic Bank provides full fledged custodial services, typically clearing settlement and

safekeep all types of investment assets and classes, to a cross section of investors and

intermediaries client base, both locally and overseas. For the local Ringgit assets, they are held

through its wholly owned nominee subsidiary “CIMB Islamic Nominees (Tempatan) Sdn Bhd”.

For foreign non-Ringgit assets, CIMB Islamic Bank appoints global custodian as its agent bank to

clear, settle and safekeep on its behalf and to its order.

The appointed global custodians are Citibank N. A, Singapore and BNP Paribas Securities Services,

Singapore

All investments are automatically registered in the name of the custodian to the order of the

Trustee. CIMB Islamic Bank Berhad acts only in accordance with instructions from the Trustee.

f) Material Litigation

As at 30 November 2015, CITB was not engaged in any material litigation and arbitration, including

those pending or threatened, and any facts likely to give rise to any proceedings which might

mateally affect the business/financial position of CITB or any of its delegates.

9.2 TRUSTEE’S STATEMENT OF RESPONSIBILITY

The Trustee has given its willingness to assume the position as Trustee of the Fund and all the

obligations in accordance with the Deed, all relevant laws and rules of law.

9.3 ROLES, DUTIES AND RESPONSIBILITIES OF THE TRUSTEE

The Trustee’s functions, duties and responsibilities are set out in the Deed. The general function,

duties and responsibilities of the Trustee include, but are not limited to, the following:-

a) Take into custody the investments of the Fund and hold the investments in trust for the Unit

Holders;

b) Ensure that the Manager operates and administers the Fund in accordance with the provisions

of the Deed, SC Guidelines and acceptable business practice within the unit trust industry;


45


c) As soon as practicable notify the SC of any irregularity or breach of the provisions of the Deed,

SC Guidelines and any other matters which in the Trustee’s opinions may indicate that the

interests of Unit Holders are not served;

d) Exercise reasonable diligence in carrying out its functions and duties, actively monitoring the

operation and management of the Fund by the Manager to safeguard the interests of Unit

Holders;

e) Maintain, or cause the Manager to maintain, proper accounting records and other records as

are necessary to enable a complete and accurate view of the Fund to be formed and to ensure

that the Fund is operated and managed in accordance with the Deed of the Fund, Prospectus,

the SC Guidelines and securities law; and

f) Require that the accounts be audited at least annually.

The Trustee has covenanted in the Deed that it will exercise all due diligence and vigilance in

carrying out its functions and duties, and in safeguarding the rights and interests of Unit Holders.

9.4 TRUSTEE’S DECLARATION

The Trustee is independent of the Manager. The Trustee will carry out transactions on an arm’s

length basis and on terms which are best available for the Funds, as well as act at all times in the

best interest of the Unit Holders. The Trustee also has adequate procedures and processes in

place to prevent or control conflicts of interest.

9.5 TRUSTEE’S OBLIGATION

The Trustee’s obligation in respect of monies paid by an investor for the application of units arises

when the monies are received in the relevant account of the Trustee for the Funds and the

Trustee’s obligation is discharged once it has paid the redemption amount to the Manager.


46


10. SALIENT TERMS OF THE DEED

10.1 RIGHTS AND LIABILITIES OF A UNIT HOLDER

a) Your rights

i) The right to receive the distributions of income (if any), participate in any increase in the

value of the Units and to enjoy such other rights and privileges as provided for in the Deed.

ii) Subject to the provision of the Deed, the right to call for a Unit Holders’ meeting for any

resolutions, and also to vote for the removal of the Trustee or us through a special resolution.

iii) The rights to exercise your cooling-off period if you invest for the first time with PMB

Investment except for if you are either corporate/institutional clients, staff of the Manager or

a person registered with a body approved by the SC to deal in unit trusts.

iv) The right to receive annual reports and interim reports of the Fund, which are sent out within

two (2) months from the closing of each financial year and the interim period.

b) Limitation of Rights

i) Unit Holders are not entitled to request for the transfer of any assets in the Fund or be entitled

to interfere with or question the exercise by the Trustee or by the Manager on the Trustee’s

behalf of the rights of the Trustee as the owner of such assets.

ii) Unit Holders are not entitled to attend any meeting of shareholders, stockholders or

debenture holders or to vote or take part in or consent to any company or shareholders', stock

holders' or debenture holders' action.

c) Your Liabilities

You would not be liable and shall not be under any obligation to indemnify the Trustee and/or the

Manager in the event that the liabilities incurred by the Trustee and/or the Manager in the name of

or on behalf of the Fund pursuant to and/or in the performance of the provisions of the Deed

exceed the value of the assets of the Fund, and any right of indemnity of the Trustee and/or

Manager will be limited to recourse to the Fund.

10.2 FEES AND CHARGES

Enlisted below are the maximum fees and charges permitted by the Deed:

Sales Charge 6.0% of the NAV per unit

Repurchase Charge Nil

Annual Management fee 1.8% per annum of the NAV of the Fund

Annual Trustee fee 0.5% per annum of the NAV of the Fund

All current fees and charges are disclosed in Sections 3.2 and Chapter 6 of this Prospectus. The

disclosed current fees and charges in Sections 3.2 and Chapter 6 of this Prospectus could be lower

than that stated in the Deed. Any increase in the current sale and/or repurchase charges stated in

the current Prospectus could only be made if:

a) the Manager has notified the Trustee in writing of the higher charge and the effective date of

the charge;

b) a supplementary prospectus stating the higher charge is issued;

c) time as required by the law has elapsed since the issuance of the supplementary prospectus;

and

d) the maximum fees or charges stated in the Deed shall not be breached.


47


Any increase in the current annual management fee and/or annual trustee fee stated in the

Prospectus could only be made if:

a) (for management fee) the Manager has notified the Trustee in writing of the new higher rate

and the trustee agrees to it;

b) (for Trustee fee) the Trustee has notified the Manager in writing of the new higher rate, and

the Manager agrees to it;

c) the Manager has notified unit holders of the higher rate and its effective date;

d) a supplementary prospectus stating the higher rate of fees has been registered and issued;

time as required by the law has elapsed since the issuance of the supplementary prospectus;

and

e) the maximum fees stated in the Deed shall not be breached.

Any increase of the fees and/or charges above the maximum rate stated in the Deed shall require

Unit Holders’ approval and can only be made by way of a supplemental deed and in accordance

with the requirements of the Act.

If any goods and services tax is imposed on or made payable by Unit Holders by virtue of any law,

regulation, directive or order by any governmental authority, in connection with or in relation to

any dealings in Units of the Fund or any services provided by the Manager of the Trustee in

connection with or in relation to the Fund, Unit Holders shall pay such goods and services tax to the

Manager and/or the Trustee for onward payment to the relevant governmental authorities.

10.3 OTHER PERMITTED EXPENSES

The Trustee shall at the request of the Manager pay out of the Cash Produce all costs, charges and

expenses that are directly related and necessary to the business of the Fund. These would include:

a) commissions/fees paid to brokers in effecting dealings in the investments of the Fund, shown

on the contract notes or confirmation notes;

b) taxes and other duties charged on the Fund by the Government and/or other authorities;

c) costs, fees and expenses properly incurred by the Auditor appointed for the Fund;

d) costs, fees and expenses incurred for the valuation of any investment of the Fund by

independent valuers for the benefit of the Fund;

e) costs, fees and expenses incurred for any modification of the Deed save where such

modification is for the benefit of the Manager and/or the Trustee;

f) costs, fees and expenses incurred for any meeting of the Unit Holders save where such meeting

is convened for the benefit of the Manager and/or the Trustee;

g) costs, commissions, fees and expenses of the sale, purchase, insurance and any other dealing of

any asset of the Fund;

h) costs, fees and expenses incurred in engaging any specialist approved by the Trustee for

investigating or evaluating any proposed investment of the Fund;

i) costs, fees and expenses incurred in engaging any valuer, adviser or contractor for the benefit

of the Fund;

j) costs, fees and expenses incurred in the preparation and audit of the taxation, returns and

accounts of the Fund;

k) costs, fees and expenses incurred in the termination of the Fund or the removal of the Trustee

or the Manager and the appointment of a new trustee or manager;

l) costs, fees and expenses incurred in relation to any arbitration or other proceedings

concerning the Fund or any asset of the Fund, including proceedings against the Trustee or the

Manager by the other for the benefit of the Fund (save to the extent that legal costs incurred

for the defence of either of them are not ordered by the court to be reimbursed by the Fund);


48


m) remuneration and out of pocket expenses of the independent members of the Investment

Committee of the Fund, unless the Manager decides otherwise; and

n) costs, fees and expenses deemed by the Manager to have been incurred in connection with any

change or the need to comply with any change or introduction of any law, regulation or

requirement (whether or not having the force of law) of any governmental or regulatory

authority.

In particular, expenses associated with the management and administration of the Fund, such as

general overheads and costs for services expected to be provided by the Manager, shall not be

charged to the Fund. However, expenses relating to the issue of the prevailing prospectus may be

charged to the Fund if the Fund does not impose any sales charge.

Provided further that the quantum of the expenses chargeable to the Fund shall not be excessive or

more than the standard commercial rates. In instances where uncertainty arises as to the status of

the expenses the Trustee shall use its discretion in determining the legitimacy of the expenses.

10.4 REMOVAL, REPLACEMENT AND RETIREMENT OF THE MANAGER

AND TRUSTEE

Subject to the provisions of the Deed and the relevant laws, the Manager may retire upon giving

twelve (12) months' notice to the Trustee of our desire to do so or such shorter period as the

Trustee and the Manager may agree, and we may by way of a deed appoint in our stead a new

manager subject to the approval of the relevant authorities.

Subject to the provisions of the Deed and the relevant laws, the Manager may be removed and

another manager may be appointed by special resolution of the Unit Holders at a Unit Holders’

meeting convened in accordance with the relevant Deed.

Subject to the provisions of the Deed and the relevant laws, the Trustee shall take reasonable steps

to remove the Manager as soon as practicable after becoming aware of any such circumstances as

stated in subsection 10.4 (c) of this Prospectus on "Power of Trustee to Remove, Retire or Replace

the Manager".

a) Powers of the Manager to Remove and Replace the Trustee

As allowed under Section 299 of the Act we shall take all reasonable steps to replace the

Trustee as soon as practicable after becoming aware that:-

i) the Trustee has ceased to exist;

ii) the Trustee has not been validly appointed;

iii) the Trustee is not eligible to be appointed or to act as trustee under any relevant law;

iv) the Trustee has failed or refused to act as a Trustee in accordance with the provisions or

covenants of the Deed or any relevant law;

v) a receiver is appointed over the whole or a substantial part of the assets or undertaking of

the existing Trustee and has not ceased to act under that appointment, or a petition is

presented for the winding up of the existing Trustee (other than for the purpose of and

followed by a reconstruction, unless during or following such reconstruction the existing

trustee becomes or is declared to be insolvent); or

vi) the Trustee is under investigation for conduct that contravenes the Trust Companies Act

1949, the Trustee Act 1949, the Companies Act 1965 or any relevant laws.


49


b) Retirement, Removal or Replacement of the Trustee

The Trustee may retire upon giving twelve (12) months' notice to the Manager of its desire to

do so, or such shorter period as the Manager and the Trustee may agree, and may by deed

appoint in its stead a new trustee approved by the relevant authorities and under any relevant

law.

The Trustee may be removed and another trustee may be appointed by Special Resolution of

the Unit Holders at a Unit Holders’ meeting convened in accordance with the Deed or as

stipulated in the Act.

c) Power of Trustee to Remove, Retire or Replace the Manager

Subject to the Deed and the relevant laws, the Trustee may take steps to remove the Manager

in the event that:

i) the Manager goes into liquidation (except for the purposes of amalgamation or

reconstruction or some other purpose approved by the relevant authorities); or

ii) the Manager is in breach of its obligations under the Deed, the Act or relevant laws; or

iii) the Manager has had a receiver appointed; or

iv) the Manager has ceased to carry on business; or

v) a special resolution has been passed at the Unit Holders’ meeting to remove the

Manager in accordance with the Deed; or

vi) the Manager has failed or neglected to carry out its duties to the satisfaction of the

Trustee and the Trustee considers that it would be in the interests of Unit Holders for

it to do so after the Trustee has given notice to the Manager of that opinion and the

reasons for that opinion, and has considered any representations made by the

Manager in respect of that opinion, and after consultation with the SC and with the

approval of the Unit Holders by way of a special resolution.

10.5 TERMINATION OF THE FUND

Upon the occurrence of any of the following events:

a) if the Manager has gone into liquidation, except for the purpose of reconstruction or

amalgamation upon terms previously approved in writing by the Trustee and the relevant

authorities; or

b) if, in the opinion of the Trustee, the Manager has ceased to carry on business; or

c) if, in the opinion of the Trustee, the Manager has to the prejudice of Unit Holders failed to

comply with the provisions of the Deed or contravened any of the provisions of any relevant law;

and at a unit holders' meeting summoned by the Trustee in accordance with the Deed, a special

resolution is passed to terminate or wind up the Fund, the Trustee shall apply to Court to confirm

such special resolution. Upon obtaining the relevant Court order, the Trustee shall take steps to

terminate and winding up the Fund in accordance with the Court order, the Deed, the prevailing Acts

and Guidelines .

10.6 UNIT HOLDERS’ MEETING

Subject to the Deed and the prevailing Acts and Guidelines, a Unit Holders’ meeting could be

summoned for any purpose with the salient details as follow:-

a) The Manager and the Trustee may convene a Unit Holders’ meeting at any time, whilst, the Unit

Holder could request for a meeting provided the written request comes from not less than fifty

(50) Unit Holders or 1/10 of Unit Holders.


50


b) If the meeting is requested by the Manager, a notice of the meeting would be sent out not less

than fourteen (14) days of any such meeting. Whereas, if a meeting is summoned by the Unit

Holders, the Manager will send a notice by post at least seven (7) days before the meeting , and

also publish a notice in the newspaper at least fourteen (14) days before the meeting.

c) The Manager is entitled to receive notice of and to attend at any Unit Holders’ meeting but in

respect of Units which the Manager hold or is deemed to hold, then the Manager is not entitled

to vote at or be counted in the quorum for such meeting. And accordingly, for the purposes of

the following provisions of this Clause, Units held or deemed to be held by the Manager shall

not be regarded as being an issue.

d) The quorum required for a meeting of the Unit Holders shall be 5 Unit Holders, whether

present in person or by proxy, provided always that the quorum for a meeting of the Unit

Holders convened for the purpose of removing the Manager and/or the Trustee shall be ten

(10) Unit Holders, whether present in person or by proxy, who must hold in aggregate at least

fifty per centum (50%) of the Units in circulation at the time of the meeting;

e) Save as has been otherwise expressly provided for herein the Deed or as may be directed by the

Trustee with the approval of the relevant authorities, all resolutions presented at Unit Holders'

meetings shall be passed by a simple majority.


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11. CONFLICT OF INTEREST

The Manager and the Trustee and any delegate thereof will endeavor to avoid conflicts of interest arising

or, if conflicts arise they will ensure that neither the Unit Holder nor the Fund is disadvantaged by the

transaction concerned. Any transaction or investment carried out by or on behalf of the Fund should be

executed at an arm’s length transaction. The Manager and our related corporations will not act as principal

in the sale and purchase of investments and the Fund will not invest in companies related to the Manager.

Where a conflict of interest arises due to the Investment Committee member or director holding substantial

shareholding or directorships of public companies, and the Fund invests in that particular share or stock,

the said committee member or director shall abstain from any decision making relating to investment in

that share or stock of the Fund.

Our employees who are directly involved in the investment management of the Fund or who have direct

and timely access to the daily trades done by the Fund Managers, are required to declare their dealing in

the securities.

To date, there has been no event of conflict of interest amongst us, employees, directors and Investment

Committee members. In the event a conflict or potential conflict of interest involving the Manager and

employees is identified, this will be evaluated by the Compliance Department and disclosed to the Chief

Executive Officer (CEO) for the next course of action. Conflict of interest situations involving the CEO,

directors and/or Investment Committee members will be disclosed to the Board of Directors for a decision

on the next course of action.


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12. TAXATION OF THE FUND

Our Ref : MG / LBP/EMI

14 July 2015

The Board of Directors


Level 20, 1 Sentral Jalan Rakyat, Kuala Lumpur Sentral

50470 Kuala Lumpur

Dear Sirs,

PMB SHARIAH SMALL-CAP FUND

TAXATION OF THE FUND AND UNIT HOLDERS

This letter has been prepared for inclusion in the First Prospectus in connection with the offer of units in

the PMB Shariah Small-Cap Fund (‘The Fund”).

1 TAXATION OF THE FUND

The Fund is treated as a unit trust for Malaysian tax purposes. The taxation of the Fund is subject to the

provisions of the Malaysian Income Tax Act 1967 (“the Act”), the applicable provisions being contained in

Section 61 (trusts generally) and section 63B (special deduction of expenses) of the Act.

The Fund is regarded as being resident for Malaysian tax purposes since the Trustee of the Fund is resident

in Malaysia under S61(3) of the Act.

1.1) General Taxation

The income of the Fund from its investments derived from or accruing in Malaysia such as dividends,

interest and profit (other than interest or profit which is exempt from tax) after deducting tax allowable

expenses under S 33(1) and S 63B of the Act is liable to income tax. The income tax rate applicable to the

Fund is 25%. It was proposed in the 2014 Budget tabled in Parliament on 25 October 2013 that the tax rate

of 25% be reduced by 1% to 24% with effect from Year of Assessment (“YA”) 2016.

Gains on disposal of investments by the fund are not subject to Malaysian income tax. Such gains, however,

may be subject to real property gain tax under the Real Property Gains Tax Act, 1976 (see Item E below).

1.1.1) Exempt Income

A) Malaysian Sourced Dividends

With effective from 1 January 2008, Malaysia introduced the single tier system where dividends paid by

fund are not taxable in the hands of the recipients. Dividend received from fund that are under the single

tier system would be exempted from tax and the expenses incurred on such dividends would be

disregarded. There will no longer be any tax refunds for dividends received.

B) Malaysian Sourced Interest

(i) Interest from securities or bonds issued or guaranteed by the government of Malaysia;

(subparagraph 35(a) of Schedule 6 of the ITA 1967)

(ii) Interest from Islamic securities, (other than convertible loan stock) approved by the Securities

Commission (subparagraph 35(b) of Schedule 6 of the ITA 1967) or Labuan Offshore Financial

Services Authority (LOFSA);


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(iii) Interest from Bon Simpanan Malaysia issued by Bank Negara Malaysia;

(Subparagraph 35(d) of Schedule 6 of the ITA 1967)

(iv) Interest derived from Malaysia and paid or credited by banks or financial institutions licensed under

the Banking and Financial Institutions Act 1989 (BAFIA) or the Islamic Banking Act 1983 (IBA);

(paragraph 35A of Schedule 6 of the ITA 1967)

Please note that the BAFIA and IBA have been repealed with the coming into force of the

Financial Services Act 2013 and Islamic Financial Services Act 2013 on 30th June 2013. No

amendment has been made to the Income Tax Act 1967 to reflect the above.

(v) Interest derived from bonds (other than convertible loan stock) paid or credited by any company

listed on the Malaysian Exchange of Securities Dealing and Automated Quotation Berhad (MESDAQ),

now known as Bursa Malaysia Securities Berhad ACE Market;

(vi) Interest received from bonds or securities issued by Pengurusan Danaharta Nasional Berhad;

(Income Tax (Exemption)(No.5) Order 2001 [P.U.(A) 220/2001]

(vii) Interest from any savings certificates issued by the Government;

(paragraph 19 of Schedule 6 of the ITA 1967)

C) Discounts

Discounts earned by the Fund in respect of investments as specified in items B) (i) to (iii) above.

D) Foreign Sourced Income

Income of the Fund in respect of income received from overseas investment is exempt from Malaysian Tax

by virtue of paragraph 28 of Schedule 6 of the Act and distribution of such income will be tax exempt in the

hands of the Unit holders. Such income from foreign investments may be subject to foreign taxes or

withholding taxes. Any foreign tax suffered on the income in respect of overseas investment is not tax

refundable to the Fund.

The foreign income exempted from Malaysian tax at the Fund level will also be exempted from tax upon

distribution to the unit holders.

E) Gains From Realisation of Investments

Pursuant to Section 61(1)(b) of the Malaysian Income Tax Act 1967, gains from the realization of

investments will not be treated as income of the Fund and hence, are not subject to income tax. Such gains

may be subject to real property gains tax under the Real Property Gains Tax Act 1976 (“RPGT Act“), if the

gains are derived from the sale of chargeable assets, as defined in the RPGT Act.

As gazetted in the Finance Act 2014, with effect from 1 January 2014, any gains from disposal of real

properties (“chargeable asset”) or shares in real property companies “chargeable asset” would be subject to

real property gains tax. According to Schedule 5 of the Real Property Gains Tax Act 1976 the RPGT rates are

as follows:

RPGT RATES

Time of Disposal Individuals Companies Non-citizens

Within 3 years 30 % 30 % 30%

In the 4th year 20% 20% 30%

In the 5th year 15 % 15 % 30%

In the 6th year and subsequent years 0% 5% 5%


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F) Tax Deductible Expenses

Tax deductible expenses are governed by Section 33(1) and Section 63B of the Malaysian Income Tax Act

1967.

Section 33(1) generally provides for deduction of expenses “wholly and exclusively” incurred in the

production of gross income. Whilst, Section 63B allows the Funds deduction for a portion of other

expenses(referred to as “permitted expenses”) not directly related to the production of gross income. The

special deduction is calculated using the following formula:

A X B

4C

Where:

A Is the total permitted expenses incurred for that basis period. “Permitted expenses” means expenses

incurred by the unit trust in respect of manager’s remuneration, maintenance of register of unit

holders, share registration expenses, secretarial, audit, accounting fees, telephone charges, printing

and stationery cost and postage, which are not deductible under Section 33(1),

B Is gross income consisting of dividends, interest and rent chargeable to tax for that basis period, and

C Is the aggregate of the gross income consisting of dividends and interest (whether exempt or not), rent

and gains made from the realisation of investments (whether chargeable to tax or not) for that basis

period,

Provided that the amount of deduction to be made shall not be less than 10% of the total permitted

expenses incurred for that basis period.

G) Goods and Services Tax (GST)

GST is implemented in Malaysia effective from 1 April 2015 at a standard rate of 6%. It will replace the

current sales tax and service tax.

Based on the Guide on Fund Management issued by the Royal Malaysian Customs Department on 27

October 2013. The investment activities of a unit trust fund including the buying and selling of securities

are exempt supplies. Therefore, a unit trust fund makes wholly exempt supplies and is not required to be

registered for GST purposes. There is no requirement for the fund to make any application for exemption

from registration.

However, certain expenses incurred by the Fund such as fund manager’s fee, trustee fees and professional

fees will be subject to GST at a standard rate if the service providers are registered persons. Since the Fund

is making exempt supplies, any input tax incurred by the Fund for the aforementioned expenses are not

claimable.

2) Taxation of Unit Holders

For Malaysian income tax purposes, unit holders will be taxed on their share of the distributions received

from the Fund.

The income of unit holders from their investment in the Funds broadly falls under the following categories:-

1. Taxable Distributions; and

2. Non-Taxable And Exempt Distributions.

3. Undistributed Income

In addition, unit holders may also realizes a gain from the sale of units.


55


The tax implications of each of the above categories are explained below: -

1. Taxable Distributions

Unit holders will be taxed on an amount equivalent to their share of the total taxable income of the Fund to

the extent of the distributions received from the Fund.

The income distributions received from the Fund will have to be grossed up to take into account the

underlying tax paid by the Fund and the unit holders will be taxed on the grossed up amount.

Such distributions carry a tax credit in respect of the tax paid by the Fund. Unit holders will be entitled to

utilise the tax credit against any Malaysian income tax payable by the unit holder on the income

distribution received by them, the excess is refundable to the unit holder.

Please refer to the paragraph below for the income tax rates applicable to the grossed up distributions.

2. Non-Taxable And Exempt Distributions

The distribution of single tier dividends, other than tax exempt income and gains from the realization of

investments earned by the Fund will not be subject to Malaysian income tax in the hands of the unit holders

in Malaysia. Distribution of foreign income will also be exempted in the hands of the unit holders.

The following types of income are tax exempt in the hands of the unit holders : -

a) certain interest income and foreign sourced income is tax exempt at the unit trust level. Unit

holders who receive a distribution of such tax exempt income will not be subject to income tax.

b) disposal of investments by the unit trust fund is not subject to tax. The distribution of gains from

such disposals is tax exempt in the hands of the unit holders.

c) any gains realised by unit holders (other than dealers in securities, insurance companies or

financial institutions) on the sale, transfer or redemption of the units trust are treated as capital

gains and will not be subject to income tax.

d) bonus issues of units which either : -

* represent a division of the unit holder’s existing investment into a larger number of units, or

* the distribution of unrealized gains as additional units.

However, if the bonus issue of units represents distribution of income derived from investment of

the unit trust, these units will be subject to tax.

e) Unit holders electing to receive their income distribution by way of investment in the form of the

purchase of new units will be regarded as having purchased the new units out of their income

distribution after tax. Unit splits issued by the Funds are not taxable in the hands of Unit holders.

3. Undistributed Income

Unit holders are not taxed on the undistributed income or gains of the fund.

• Filing of Income Tax Returns

Unit holders have to declare their taxable distributions from unit trusts together with their income

from other sources in the relevant Income Tax Returns.

• Rates of Tax

The Malaysian income tax chargeable on the unit holders would depend on their tax residence status

and whether they are individuals, corporations, non-corporations or trust bodies. The relevant income

tax rates are as follows : -


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TYPES OF UNIT HOLDERS

Malaysian tax resident

• Resident individuals and others (such as

associations and societies)

• Corporate unit holders

a) Small medium industry (SMI) company

b) Non – SMI company

Non-Malaysian tax resident

• Individual & non-corporate Unit holders

• Corporate unit holders & trust bodies

MALAYSIAN INCOME TAX RATES

• Progressive tax rates ranging from 0% to 25% -

Appendix (i)

• Chargeable income on first RM500,000 @20%

(reduced by 1% to 19% with effect from Year of

Assessment 2016) – Appendix 1(ii)

Chargeable income in excess of RM500,000

@25% (reduced by 1% to 24% with effect from

Year of Assessment 2016) - Appendix 1(ii)

• Flat rate of 25%

(reduced by 1% to 24% with effect from Year of

Assessment 2016) - Appendix 1(ii)

• 25% - Appendix 1(iii)

• 25% - Appendix 1(iii)

(Remarks : Non-resident unit holders may be subject to tax in their respective countries depending on the

provisions of the tax legislation in the respective countries and any existing double taxation arrangements

with Malaysia)

We hereby confirm that, as at the date of this letter, the statements made in this report correctly reflect our

understanding of the tax position under current Malaysian tax legislation. All prospective investors should

not treat the contents of this letter as advice relating to taxation matters and are recommended to obtain

independent advice on the tax issues associated with their investments in the Fund.

Yours faithfully,

AHMAD ABDULLAH & GOH

GOH KENG JUAY

Partner


57


Appendix 1

(i) The maximum income tax rate of 25% is reduced by 1% to 24% with effect from Year of Assessment

(YA) 2016;

(ii) SMI company means a company incorporated in Malaysia and has paid up capital in respect of ordinary

shares of RM 2.5 million and below at the beginning of basis period for a Year of Assessment (YA),

resident in Malaysia and not within a group where the holding or other subsidiary company is:

a) more than 50% of the paid up capital in respect of an ordinary shares of the company is directly or

indirectly owned by a related company;

b) more than 50% of the paid up capital in respect of ordinary shares of the related company is

directly or indirectly owned by the first mentioned company; or

c) more than 50% of the paid up capital in respect of ordinary shares of the first mentioned

companyandthe related company is directly or indirectly owned by other company.

“Related company” in this content is defined as a company which has a paid up capital exceeding RM2.5

million in respect of ordinary shares at the beginning of the basis period of the year of assessment.

However, the said tax rate of 20% on chargeable income of up to RM 500,000 would not apply if more

than 50% of the paid up capital in respect of ordinary shares of that corporate Unit Holder is directly

or indirectly owned by a related company which has a paid up capital exceeding RM 2.5 Million in

respect of ordinary shares, or vice versa, or more than 50% of the paid up capital in respect of

ordinary shares of both companies are directly or indirectly owned by another company.

(iii) Corporate unit holders who are not resident in Malaysia will be subject to Malaysian income tax (the

prevailing rate is 25%).


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13. ADDITIONAL INFORMATION

13.1 UPDATES ON THE FUND

You may access the daily Fund prices, Fund’s monthly updates and review our interim and annual reports

via our website – www.pmbinvest.com.my.

13.2 PRE-INVESTMENT FORM (PIF)

The purpose of the PIF is to ensure that the investor is sufficiently informed on investments in unit trust

funds and in particular, understand the unit trust fund you are investing in. You are required to complete

the PIF prior to account opening if you are a first time investor. If you invest in several new funds

simultaneously, a PIF must be completed for each fund.

13.3 SUITABILITY ASSESSMENT

The Suitability Assessment should be conducted on an investor who wishes to invest in a new unlisted

capital market product. The Suitability Assessment Form should be completed prior to the account opening.

A suitability assessment refers to an exercise carried out by the Manager to gather necessary information

from the investor before matching a particular Fund with the needs of an investor.

13.4 INVESTOR RELATION .

You may communicate with us by:-

a) Telephone: (03) 2785 9900 (Investor Relation Careline) / (03) 2785 9800 (General Line)

b) Fax: (03) 2785 9901

c) E-mail: [email protected]

d) Walk-in:

Mondays - Thursdays Fridays Saturdays-Sundays/Public

Holidays

8.45 a.m. – 5.15 p.m. 8.45 a.m. – 12.30 p.m.

2.15 p.m. – 5.15 p.m.

Closed

e) Write in –




50470 Kuala Lumpur

13.5 COMPLAINTS

Should you wish to complain, you may lodge your complaint by writing to:

Investor Relation Unit




50470 Kuala Lumpur

Please state the date, time, place of occurrence, person involved and nature of your complaint. You may also

lodge your complaint through telephone calls by contacting the department.


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13.6 SECURITIES INDUSTRY DISPUTE RESOLUTION CENTER (SIDREC)

SIDREC is an independent body corporate, approved under Capital Markets and Services (Dispute

Resolution) Regulations 2010, established to resolve monetary disputes between investors and capital

market intermediaries registered as its members, such as stockbrokers, futures brokers, unit trust

management companies, and fund managers. If an investor has an unresolved claim with a capital market

intermediary, he or she may file a claim with SIDREC, either :-

a) In person

Mondays - Thursdays Fridays Saturdays-Sundays/Public

Holidays

8.45 a.m. – 5.15 p.m. 8.45 a.m. – 12.30 p.m.

2.15 p.m. – 5.15 p.m.

Closed

b) Write in –

Securities Industry Dispute Resolution Center,

Unit A-9-1, Level 9 Tower A, Menara UOA Bangsar,

No. 5, Jalan Bangsar Utama, 59000 Kuala Lumpur.

c) Fax: (03) 2282 3855

d) E-mail: [email protected]

For further enquiry, you may reach SIDREC via, telephone at (03) 2282 2280 or its website at

www.sidrec.com.my.

13.7 ANTI-MONEY LAUNDERING AND ANTI-TERRORISM FINANCING

(AML/CFT) POLICIES

a) General Policy

We have established an Anti-Money Laundering and Anti-Terrorism Financing (AMLCFT) Policies

and Procedures as required by the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds

of Unlawful Activities Act (AMLATFA) 2001. As such we will actively prevent and take measures to

guard against being used as a medium for money laundering and/or terrorism financing activities

and any other activity that facilitates money laundering and/or terrorism financing.

b) Investor’s Identification and Verification

Pursuant to the AMLATFA, we have put in place procedures for identification and verification of

investors. Hence, we require you to provide us with your name, date of birth, national registration

card number, residential and business address, (and mailing address if different), name of

beneficial owner, address of beneficial owner, national registration card number of beneficial

owner, date of birth of beneficial owner or other official identification when you open or re-open

an account.

Additional information from you may be required on a case by case basis in certain situations

throughout your investment with us in the Fund. Application without such information may not be

accepted and the application amount shall be returned to you.

c) Suspicious Transaction Reporting

We are obliged to report to the Financial Intelligence and Enforcement Department of Bank Negara

Malaysia on any transaction which may raise our suspicion that the source of the investment

capital is originated or received from money laundering and terrorism activities, or proceeds from

illegal activities.


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13.8 PRIVACY NOTICE UNDER PERSONAL DATA PROTECTION ACT 2010

Pursuant to the PDPA gazetted on 15th November 2013, we have put in place procedures in dealing with

your personal data being collected and retained by us. Please read our ‘Privacy Notice’ on our website

pmbinvest.com.my or request a copy of the Privacy Notice from our office.

13.9 GOODS AND SERVICES TAX (GST)

With effect from 1 April 2015, GST has been implemented to replace the current sales tax and service tax

regime currently at the rate of 6%.

Based on the Guide on Fund Management issued by Royal Malaysian Customs Department on 27th October

2013 (“Guide on Fund Management”), a unit trust fund is making exempt supplies. Any contribution made

to the Fund by its Unit Holders for the issuance of units in the Fund should be regarded as an exempt

supply of services and thus, should not be subject to GST.

The investment made by the Fund to maximize its returns is generally proposed to be treated as exempt

supply and not subject to GST. Any investment activity such as buying or selling of securities should

generally be exempted from GST. However any fee-based charges by the Fund should be a taxable supply

subject to GST at the standard rate of 6%, provided the Fund exceeds the GST registration threshold of

RM500,000 per annum of taxable supplies. Any GST incurred by the Fund on the manager’s fees, trustee

fees and other supplies received by the Fund are not claimable as input tax credit for GST purposes if the

Fund is not GST registered or even if GST registered, to the extent the supplies by the Fund are exempted

from GST.

Manager’s GST Registration No.: 000923279360

13.10 FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)

FATCA is a United States of America (US) statute that, among others, requires foreign financial institutions,

including us, to report to the Inland Revenue Service (IRS) of the US on clients who are US persons. US

persons refers to a citizen of US; an individual lawfully admitted for permanent residence of the US; an

unincorporated association with a substantial number of members who are citizens of the US or are

individuals lawfully admitted for permanent residence of the US; or a corporation incorporated in the US.

13.11 ZAKAT

The Fund does not allocate payment for zakat on capital gains and income distributions, on behalf of

Muslim individuals and Muslim legal entities that invest in the Fund since by doing so, would not fulfill their

zakat obligations. Thus, Unit Holders are required and advised to make their own arrangements in respect

of the payments of zakat.

Muslim individuals and legal entities who are investors of the Fund are required to pay zakat on trading and

investment income. To determine the amount of zakat payable, these investors need to add the principal

invested in the Islamic Fund plus the profits earned on these investments multiplied by 2.5%.

13.12 AUDITORS OF THE FUND

Messrs Jamal, Amin & Partners has been appointed as the auditors for the Fund. The Auditors may retire

upon giving three (3) month’s written notice to the Trustee provided any such notice must always expire

one (1) month prior to or two (2) months following the end of the current accrual period, or may be

removed at any time by the Trustee or by a resolution of Unit Holders holding not less than 2/3 of the units

in issue. Any vacancy in the office of the Auditors shall be filled by a qualified person appointed by the

Trustee.


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13.13 PLEDGING OF UNITS AS COLLATERAL

Units held by the Unit Holder may be pledged as collateral for loans to enhance your financial leverage.

However, this facility is only available subject to the approval of the banks or other financial institutions.

13.14 BORROWING TO PURCHASE UNITS

The Unit Holder has the option to purchase the Units through a loan scheme. However, if such facility is

utilised the margin of finance shall not exceed 67% of the amount invested (this limit is not applicable for

purchase of Units via credit/charge card). Any redemption of Units is subject to the related financial

institution’s approval. Investors are required to understand fully the risk disclosure statement on the loan

scheme before signing off on the statement provided. The risk disclosure statement is incorporated in the

application forms referred to and accompanied in the Prospectus.

13.15 PERIOD OF THE FUND

The commencement dates of the Fund is the date of launching or the date of the first Prospectus issued by

the Manager. The Fund may be terminated by the Trustee who will summon a meeting of Unit Holders due

to circumstances affecting the Manager. Otherwise the Fund may continue in operation or in existence if it

appears to be in the interest of the Unit Holders for such periods as agreed by the Trustee and the Manager.

13.16 LIST OF DISTRIBUTION CHANNELS

Other than the Head Office in Kuala Lumpur, Unit Holder may obtain this Prospectus, forms and purchase

the units of our funds at our regional offices as follows:

Regional Offices

Central Region

Wisma PMB, No. 1A, Jalan Lumut, 50400 Kuala Lumpur

Tel: (03) 4145 4000 Fax: (03) 4045 3800

Email: [email protected]

Manager: Suhaila binti Malzuki

Northern Region

No.46, 1/F Jalan Todak 2, Pusat Bandar Seberang Jaya, 13700 Perai

Tel: (04) 390 9036 Fax: (04) 390 9041


Manager: Ahmad Shahril bin Md Yusof

Eastern Region

Lot D103, Tingkat 1, Mahkota Square, Jalan Mahkota, 25000 Kuantan

Tel: (09) 515 8545 Fax: (09) 513 4545


Manager: Mohd Faeez Mohd Ab Aziz

Southern Region

No.17-01, Jalan Molek 1/29, Taman Molek, 81100 Johor Bahru

Tel: (07) 352 2120 Fax: (07) 351 2120


Manager: Anuar bin Idrus


62


Sarawak

No. 59, Tingkat 1, Jalan Tun Jugah, 93350 Kuching

Tel: (082) 464 402 Fax: (082) 464 404


Manager: John Nyaliaw

Sabah

Lot 2-3-19C, Tingkat 2 Plaza Wawasan, Lorong Wawasan, 88000 Kota Kinabalu

Tel: (088) 244 129 Fax: (088) 244 419


Manager: Yong Yin Kong

Financial Institutions for Auto Debit

a. Bank Simpanan Nasional

b. CIMB Bank Berhad

c. Malayan Banking Berhad/Maybank Islamic Berhad

d. RHB Bank Berhad/RHB Islamic Bank Berhad


63


14. STATEMENT OF CONSENT

The auditors, bankers, company secretary, lawyers, tax adviser, Trustees, Shariah adviser for the Manager

and Shariah Adviser for the Fund have given their consent in writing before the issuance of this Prospectus

to act in that capacity in relation to this Prospectus and those consents have been lodged with the Securities

Commission Malaysia and have not subsequently been withdrawn.


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15. DOCUMENTS AVAILABLE FOR INSPECTION

For a period of not less than twelve (12) months from the date of this Prospectus, Unit Holders may inspect

the following documents or copies thereof during normal business hours at the Manager’s business office,

without charge:-

a) The Deed of the Fund;

b) Each material contract or document referred to in this Prospectus;

c) The latest annual and interim reports of the Fund;

d) All reports, letters or other documents, valuations and statements by any expert, any part of which is

extracted or referred to in this Prospectus;

e) Latest audited financial statements of the Manager and that of the Fund for the current financial year

(where applicable);

f) Audited financial statements of the Manager and that of the Fund for the last 3 financial years

preceding the date of this Prospectus;

g) Any consent given by experts or persons named in this Prospectus; and

h) Writ and relevant cause papers for all current material litigation and arbitration disclosed in this

Prospectus.


65


APPENDICES