PROSPECTUS

KENANGA GROWTH FUND SERIES 2

THIS PROSPECTUS IS DATED 28 MAY 2018.
DATE OF CONSTITUTION OF THE FUND: 30 APRIL 2018.

MANAGER:
Kenanga Investors Berhad (353563-P)

TRUSTEES:
CIMB Commerce Trustee Berhad (313031-A)

INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THE

PROSPECTUS. IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER.
FOR INFORMATION CONCERNING CERTAIN RISK FACTORS, WHICH SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS, SEE ‘RISK FACTORS’ COMMENCING
ON PAGE 10.
RESPONSIBILITY STATEMENTS

This Prospectus has been reviewed and approved by the directors of the Manager and they collectively
and individually accept full responsibility for the accuracy of the information. Having made all reasonable
enquiries, they confirm to the best of their knowledge and belief, that there are no false or misleading
statements, or omission of other facts which would make any statement in the Prospectus false or
misleading.

STATEMENTS OF DISCLAIMER

The Securities Commission Malaysia has authorised the Fund and a copy of this Prospectus has
been registered with the Securities Commission Malaysia.

The authorisation of the Fund, and registration of this Prospectus, should not be taken to indicate that
Securities Commission Malaysia recommends the said 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 the Manager
responsible for the said 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 its 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.

ADDITIONAL STATEMENTS

Investors should note that they may seek recourse under the Capital Markets and Services Act 2007
for breaches of securities laws including any statement in the Prospectus that is false, misleading, or
from which there is a material omission; or for any misleading or deceptive act in relation to the
Prospectus or the conduct of any other person in relation to the Fund.

This Prospectus is not intended to and will not be issued and distributed in any country or jurisdiction
other than Malaysia (“Foreign Jurisdiction”). Consequently, no representation has been and will be
made as to its compliance with the laws of any Foreign Jurisdiction. Accordingly, no offer or invitation
to subscribe or purchase Units of any of the Fund to which this Prospectus relates may be made in
any Foreign Jurisdiction or under any circumstances where such action is unauthorised.

i
TABLE OF CONTENTS

CHAPTER PAGE

1. DEFINITIONS 3

2. CORPORATE DIRECTORY 5

3. THE FUND 6

4. RISK FACTORS 10

5. FEES, CHARGES AND EXPENSES 13

6. TRANSACTION INFORMATION 15

7. THE MANAGER: KENANGA INVESTORS BERHAD 20

8. THE TRUSTEE: CIMB COMMERCE TRUSTEE BERHAD 22

9. SALIENT TERMS OF THE DEED 23

10. CONFLICT OF INTERESTS AND RELATED PARTY TRANSACTIONS 29

11. TAXATION OF THE UNIT TRUST AND THE UNIT HOLDERS 30

12. ADDITIONAL INFORMATION 36

13. DOCUMENTS AVAILABLE FOR INSPECTION 37

14. DIRECTORY OF THE MANAGER’S OFFICES, LIST OF IUTA AND AUTHORISED

DISTRIBUTORS 38

ii
1. DEFINITIONS

Act means the Capital Markets and Services Act 2007 as may be amended from
time to time.

Base Currency means the currency specified in the deed of the Fund as the base currency
in which the Fund is denominated, i.e. Ringgit Malaysia.

Bursa Malaysia means the stock exchange managed or operated by Bursa Malaysia
Securities Berhad.

Business Day means a day on which the Bursa Malaysia is open for trading.

BNM means Bank Negara Malaysia.

Cash Produce means all cash receivable by the Trustee in the form of :
• Dividends, bonuses and interest;
• Fees and other charges by the Fund;
• The proceeds of sale of rights and other cash received pursuant to
paragraph (b) of Clause 9.1.3 and Clause 9.1.6 of the Deed; and
• Any profit from the sale of the assets of the Fund.

Class(es) of Units means two or more classes of units representing similar interests in the
Fund’s assets.

Deed(s) means the deed or any other supplemental deeds that may be entered into
between the Manager and the Trustee of the Fund and registered with the
SC.

deposits has the same meaning as defined in the Financial Services Act 2013 and
Islamic Financial Services Act 2013.

Eligible Market means a market that is regulated by a regulatory authority, operates

regularly, open to the public and has adequate liquidity for the purposes of
the Fund.

ETF Exchange Traded Fund

GST refers to the tax levied on goods and services pursuant to the Goods and
Services Tax Act 2014.

the Fund means the Kenanga Growth Fund Series 2 (KGFS2).

Guidelines means Guidelines on Unit Trust Funds issued by the Securities Commission
as may be amended from time to time.

IOSCO means International Organization of Securities Commissions.

IPO means initial public offering.

IUTA means institutional unit trust advisers.

st
LPD Latest Practicable Date i.e. 31 March 2018, whereby information in the
Prospectus shall remain relevant and current as at the issue date of the
Prospectus.

Manager/KIB/We Kenanga Investors Berhad (353563-P).

MYR/RM means Ringgit Malaysia, the official currency of Malaysia.

MYR Class refers to a class of Units of the Fund which is denominated in MYR.

NAV means the value of all the Fund’s assets less all the Fund’s liabilities at the
valuation point, i.e. Net Asset Value.

NAV per Unit means the Net Asset Value attributable to a Class of Units of the Fund at a
particular valuation point divided by the number of Units in circulation of that
Class of Units at the same valuation point.

3
OTC means over-the-counter.

Prospectus means the prospectus for the Fund.

Repurchase Price per Unit means the NAV per Unit of the Fund as at the next valuation point (forward
pricing) after the repurchase request is received by the Manager.

Securities Commission or SC means the Securities Commission Malaysia established under the
Securities Commission Malaysia Act 1993.

Selling Price per Unit means the NAV per Unit of the Fund as at the next valuation point (forward
pricing) after a written request to buy Units is received by the Manager.

Trustee CIMB Commerce Trustee Berhad.

Unit(s) means an undivided share in the beneficial interest and/or right in the Fund and
a measurement of the interest and/or right of a Unit Holder in the Fund; and
means a Unit of the Fund and if the Fund has more than one Class of Units, it
means a Unit issued for each Class.

Unit Holders means the person(s) for the time being registered under the provisions of
the Deed(s) as the holder(s) of Units of a Class and includes joint-holders.
In relation to the Fund, means all the Unit Holders of every Class of Units in
the Fund.

USD means United States Dollar, the official currency of United States of
America.

USD Class refers to a class of Units of the Fund which is denominated in USD.

4
2. CORPORATE DIRECTORY

MANAGER Kenanga Investors Berhad

(Company No. 353563-P)

REGISTERED OFFICE Level 17, Kenanga Tower,

237, Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia.
Tel: 03-2172 2888
Fax: 03-2172 2999

BUSINESS OFFICE Level 14, Kenanga Tower,

237, Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia.
Tel: 1800 88 3737
Fax: 03-2172 3080
E-mail: investorservices@kenanga.com.my
Website: www.kenangainvestors.com.my

TRUSTEE CIMB Commerce Trustee Berhad (CCTB)

(Company No. 313031-A)

REGISTERED OFFICE Level 13, Menara CIMB

Jalan Stesen Sentral 2,
Kuala Lumpur Sentral
50470 Kuala Lumpur
Tel: 03-2261 8888
Fax: 03-2261 0099

BUSINESS OFFICE Level 21, Menara CIMB

Jalan Stesen Sentral 2,
Kuala Lumpur Sentral
50470 Kuala Lumpur
Tel: 03-2261 8888
Fax: 03-2261 9889

5
3. THE FUND

Kenanga Growth Fund Series 2

Fund Category Equity

Fund Type Growth

Launch Date 28 May 2018

Initial Offer Period 10 days commencing from 28 May 2018 to 06 June 2018

Base Currency Ringgit Malaysia

MYR Class USD Class

Initial Offer Price
RM1.0000 USD1.0000

MYR Class USD Class

Class(es) of Units
Note: You will be notified of the issuance of the new Classes of Units by way of a
replacement or supplemental prospectus.

Investment The Fund aims to provide Unit Holders with long-term capital growth.
Objective
Any material changes to the investment objective of the Fund would require the Unit
Holders’ approval.

Investment Policy The Fund’s assets are to be actively invested in a diversified portfolio of Malaysian and
and Strategy foreign equity, and equity-related securities.
The Fund does not have an active asset allocation strategy but seeks to manage
portfolios by investing in companies that satisfy the criteria of having a sustainable and
credible business model, and are also trading at a discount to their intrinsic value.
However, under conditions of extreme market volatility and/or when the market is trading
at valuations deemed unsustainable, the Fund will seek to judiciously scale back its
equity exposure.
The Fund may invest up to 30% of the Fund’s NAV in foreign markets, which may
include but not be limited to, Singapore, Indonesia, Thailand, Philippines, India, Hong
Kong, China, Japan, Korea, Taiwan, Australia, Vietnam and United States of America;
and any other permitted markets where regulatory authority is an ordinary or associate
member of the IOSCO.
The Manager adopts an active investment management approach which takes a longer
term view. This approach is not based on a ‘frequent-trading’ strategy, however the
frequency of the Fund’s trading strategy will be very much determined pursuant to the
investment process and prevailing market opportunities.
The Manager may employ currency hedging strategies to fully or partially hedge the
Fund’s foreign currency exposure.

Types and Characteristics Of Instruments

The Fund invests in the equity and equity-related securities of companies with suitable
sustainable business models and which are trading at a discount to their intrinsic value. The
Fund does not have a particular investment bias e.g. between growth or value stocks, be
they small-cap, mid-cap or large-cap. The Fund will however seek to maximize the highest
investment returns possible pursuant to the levels of risk it considers appropriate from time
to time.
The Fund may also invest in equity related securities such as warrants and convertible loan
stocks which are capable of being converted into new shares.

6
 Temporary Defensive Measures
The Manager will seek to take temporary defensive positions during adverse market
conditions. In times of extreme market volatility and/or when market valuations are at a
level considered unsustainable, the Fund may judiciously scale back its equity exposure
and hold more liquid assets like cash during defensive positions. Whilst this may not
necessarily meet the longer term growth objective of the Fund, this may occur in the
shorter term for reasons of prudent risk management.

Asset Allocation • Up to 98% of the Fund’s NAV – Equities and equity-related securities
• Up to 30% of the Fund’s NAV – Foreign assets

Risk Management Risk management is central to the investment processes which may be applied to the Fund.
Strategies The portfolio will be continuously subjected to a variety of risk management considerations,
which include process specific “buy or sell” disciplines. Also, a series of investment limit
checks, will be complemented where appropriate by various statistical checks, e.g. an
estimate of the reasonableness of the volatility of the portfolio.

Distribution Policy Income distribution is incidental.

Performance 8% growth in NAV per annum (compounded*) over 5 years.

Benchmark
Note: This is not a guaranteed return and is only a measurement of the Fund’s
performance. The Fund may or may not achieve a targeted return of 8% growth of NAV per
annum in any particular financial year but strives to achieve this return over the long-term.
*Compounded return is the rate of return, usually expressed as a percentage that
represents the cumulative effect that a series of gains or losses have on an original amount
of capital over a period of time.

Permitted Unless otherwise prohibited by the relevant authorities or any relevant law and provided
Investment always that there are no inconsistencies with the objective of the Fund, the Fund is
permitted under the Deed to invest in the following:
1. Equity and equity-related securities listed in Eligible Markets;
2. Equity of IPO companies seeking listing in Eligible Markets;
3. Unlisted equity and equity-related securities;
4. Units of collective investment schemes;
5. Exchange Traded Fund;
6. Deposits and money market instruments (including tradable) with domestic and
foreign financial institutions;
7. Derivatives, including but not limited to foreign exchange forward contracts, future
contracts and options, for hedging purposes; and
8. Any other forms of investments that are in line with the Fund’s objective as may be
permitted by the SC from time to time.

Investment Investment Spread Limits:

Restrictions and
Limits 1. The value of the Fund’s investments in ordinary shares issued by any single issuer
must not exceed 10% of the Fund’s NAV.
2. The value of the Fund’s investments in transferable securities and money market
instruments issued by any single issuer must not exceed 15% of the Fund’s NAV.
3. The value of the Fund’s placements in deposits with any single financial institution
must not exceed 20% of the Fund’s NAV.
4. For investments in derivatives:-
(a) the exposure to the underlying assets must not exceed the investment spread
limits stipulated in this section; and
(b) the value of the Fund’s OTC derivative transaction with any single counter-party
must not exceed 10% of the Fund’s NAV.
5. The aggregate value of the Fund’s investments in transferable securities, money
market instruments, OTC derivative and deposits issued by or placed with (as the

7
 case may be) any single issuer/institution must not exceed 25% of the Fund’s NAV.
6. The value of the Fund’s investments in units/shares of any collective investment
scheme must not exceed 20% of the Fund’s NAV.
7. The value of the Fund’s investments in transferable securities and money market
instruments issued by any group of companies must not exceed 20% of the Fund’s
NAV.
Investment Concentration Limits:
8. The Fund’s investments in transferable securities (other than debentures) must not
exceed 10% of the securities issued by any single issuer.
9. The Fund’s investments 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.
10. The Fund’s investments in collective investment schemes must not exceed 25% of
the units/shares in any one collective investment scheme.

Note: Transferable securities refer to equities, fixed income securities and warrants.

Exposure Limits:
11. The value of the Fund’s investments in unlisted securities must not exceed 10% of
the Fund’s NAV.
Note: This exposure limit does not apply to equities not listed or quoted on a stock
exchange but have been approved by the relevant authority for such listing and
quotation, and are offered directly to the Fund by the issuer.
12. The Fund’s exposure from derivatives position should not exceed the Fund’s NAV
at all times.

The above stated limits and restrictions shall be complied with at all times based on the
most up-to-date value of the Fund’s investments. However, a 5% allowance in excess of
any limit or restriction may be permitted where the limit or restriction is breached through
the appreciation or depreciation in the NAV of the Fund (as a result of an appreciation or
depreciation in value of investments or as a result of the purchase of Units or payment
made from the Fund). Once the relevant limit is breached, no further acquisitions of the
particular securities involved shall be made and the Manager should, within a
reasonable period of not more than three (3) months from the date of the breach, take
all necessary steps and actions to rectify the breach.
There are no restrictions and limits imposed on securities or instruments issued or
guaranteed by the Malaysian government or BNM.

Investors’ Profile The Fund is suitable for investors who:

• have a longer-term investment time horizon i.e. more than five (5) years; and

• have at least, a moderate risk profile including a tolerance for periods of shorter-
term volatility.

Trustee CIMB Commerce Trustee Berhad

Borrowings and The Fund is prohibited from borrowing cash or other assets (including borrowing of
Securities Lending securities within the meaning of Securities Borrowing and Lending Guidelines) in
connection with its activities. However, the Fund may borrow cash for the purpose of
meeting repurchase requests for Units and for short term bridging requirements subject
to the following:
(a) the Fund’s cash borrowing is only on a temporary basis and that borrowings are
not persistent;
(b) the borrowing period should not exceed one (1) month;
(c) the aggregate borrowings 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.

8
 The Fund may participate in the lending of securities within the meaning of the
Securities Borrowing and Lending Guidelines issued by the SC.

Transaction Information

MYR Class USD Class

Minimum Initial
RM1,000 USD250
Investment

Minimum Additional
RM100 USD25
Investment

Minimum
500 Units 100 Units
Redemption

Transfer Facility Transfer facility is not available for the Fund.

Minimum Switching 500 Units 100 Units

Minimum Holdings 500 Units 100 Units

Fees and Charges

This table describes the fees and charges that you may incur DIRECTLY when you purchase or redeem the
Units of the Fund.
Sales Charge Up to 5.50% of the NAV per Unit of the Fund.

Repurchase Charge There is no repurchase charge imposed by the Manager on the repurchase request.

Switching Fee There is no switching fee imposed by the Manager on the switching request.

Transfer Fee Not applicable as transfer facility is not available for the Fund.

This table describes the fees, charges and expenses that you may incur INDIRECTLY when you invest in the
Units of the Fund.

Management Fee Up to one point eight zero per centum (1.80%) per annum of the NAV of the Fund.

Trustee Fee Up to zero point zero five per centum (0.05%) per annum of the NAV of the Fund.

Only the expenses which are directly related and necessary in operating and
Other Expenses
administering the Fund may be charged to the Fund in accordance with the Deed.

Other Information

Financial Year End 31 May

Deed 30 April 2018

9
4. RISK FACTORS

General Risks

Whilst the Manager believes that the investment policy will be effective and that investment in unit trust funds may be
rewarding, investors should be aware that there are risks associated with their investment in unit trust funds.

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
net asset value.

b) Manager’s Risk
This risk refers to the day-to-day management of the fund by the manager which will impact the performance
of the fund. For example, investment decisions undertaken by the manager, as a result of an incorrect view
of the market or any non-compliance with internal policies, investment mandate, the deed, relevant law or
guidelines due to factors such as human error or weaknesses in operational process and systems, may
adversely affect the performance of the fund.

c) Liquidity Risk
Liquidity risk refers to the ease of liquidating an asset depending on the asset’s volume traded in the market.
If a 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) 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.

e) Non-Compliance Risk
This refers to the current and prospective risk to the unit trust fund and the investors’ interest arising from non-
compliance of regulations imposed by the Act and the Guidelines, deeds, prospectuses and/or manager’s
internal policies and procedures by the manager. Risk of non-compliance can lead to diminished reputation,
reduced franchise value, limited business opportunities and reduced expansion potential for the company.
Accordingly, non-compliance may affect the investor’s investments by causing a fall in the value of the unit trust
fund.

f) 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.

10
Specific Risks Associated when investing in the Fund

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.

Currency Risk
The Fund may be exposed to currency fluctuation risk as well as changes in foreign exchange regulations as the Fund
may be invested in foreign currency or assets denominated in a foreign currency. There is a risk of potential price
fluctuations in the value of foreign assets because of changing current exchange rates. If this occurs there is a
possibility that the Unit price of the Fund may be adversely affected. Any gains or losses arising from the movement of
the foreign currencies may therefore affect the value of investment as expressed in the Base Currency in addition to
the capital gains or losses of such investment; which in turn will impact the investment value of the Fund.
§ Currency Risk at the Fund’s Portfolio Level
The impact of the exchange rate movement between the Base Currency and the currency of the underlying
investments may result in a depreciation of the value of the investments as expressed in the Base Currency.
§ Currency Risk at the Class Level
The impact of the exchange rate movement between the Base Currency and the currency of the respective
Classes (other than MYR Class) may result in a depreciation of the investor’s holdings as expressed in the
Base Currency.
The Manager shall, however, depending on the prevailing market condition mitigate the risk by hedging the foreign
currency exposure; in this case, investors will not be able to enjoy any potential upside from the foreign currency
appreciation.

Country Risk
Investment of the Fund in any countries may be affected by changes in the economic and political climate, restriction
on currency repatriation or other developments in the law or regulations of the countries in which the Fund invests in.
For example, the deteriorating economic condition of such countries may be adversely affecting the value of the
investments undertaken by the Fund in those affected countries. This in turn may cause the NAV of the Fund or prices
of Units to fall.

Equity Risk
As the main investments of the Fund will be in equities and equity related securities, the Fund will be affected by
equity risk. Generally, equity risk may arise in the following forms, i.e., equity risks related to external factors and
equity risks related to company-specific factors. All of these related equity risks can adversely affect the prices of
equities, which would negatively impact the performance of the Fund.
Equity risks related to external factors include economic, political or general market factors which impact equities
generally. For example, adverse political developments may cause the economy of the country in which the Fund
invests in to become unstable, which in turn affects the profitability of a company that operates in that country due
to weakening of the economy.
Equity risks related to company-specific factors include how the companies in which the Fund invests are
managed; the performance of any given company depends on the quality of its management. A company that has
a competent management with the necessary experience and skill sets will contribute to the effectiveness of the
operations of the company as indicated by such metrics as revenue growth and profitability. Company specific
factors also include how the company is doing relative to its competitors or other companies in its industry or
related industries.
These types of equity risks can work individually or in combination to negatively affect the value of equities held
by the Fund.

Derivatives Risk
The Fund may from time to time use derivatives for hedging. Derivatives are financial contracts whose value
depend on, or are derived from, the value of an underlying asset, reference rate or index. Such assets may
include shares, interest rates, currency exchange rates and stock indices. The Manager will only enter into
hedging transactions where the counterparty is a financial institution with minimum long-term credit rating by any
domestic or global rating agency which indicates strong capacity for timely payment of financial obligations. In the
11
event where the counterparty or issuer’s rating falls below the minimum required or it ceases to be rated, the
Manager will liquidate its position according to the regulatory requirements, unless the Trustee considers it to be
in the best interest of the Unit Holders to do otherwise. Some of the risks associated with derivatives are market
risk, management risk, credit risk, liquidity risk and counterparty risk.

Settlement Risk
As the Fund may invest in different countries, the securities markets of certain countries may lack efficiency and
regulatory controls. The investments of the Fund in certain countries may be adversely affected by delays in, or
refusal to grant relevant approvals for the repatriation of fund which may result in delay in realizing investments
made by the Fund.

Warrant and Convertible Loan Stock Risk

The Fund may also invest in equity related securities such as warrants and convertible loan stocks which are
capable of being converted into new shares. The price of warrants and convertible loan stocks are typically linked
to the underlying stock. However, the price and performance of such warrants will generally fluctuate more than
the underlying stocks because of the greater volatility of the warrants market. Generally, as the warrants have a
limited life, they will depreciate in value as they approach their maturity date, assuming that all other factors
remain unchanged. Warrants that are not exercised at maturity become worthless and negatively affect the NAV
of the Fund. Convertible loan stocks must be converted to the underlying stock at a predetermined conversion
ratio and conversion rate, and in the event the total costs of converting into underlying stock is higher than the
market price of that underlying stock, it will negatively affect the NAV of the Fund.

Risk of Investing in ETF

The cost of investing in the Fund may be higher when the manager chooses to invest in ETFs as the investor will
have to bear the fees and expenses charged by the underlying ETFs in addition to the fees and expenses
incurred by the Fund.
Though ETF is supposedly designed to track the performance of the index, there are bound to have tracking
error between the performances of the ETF and the tracked index. The difference is inevitable.

The market price of ETF will generally fluctuate in accordance with the supply of and demand for the units of the
ETF; whereby the trading price of ETF may also differ from the ETF’s net asset value. Therefore, the ease with
ETF can be sold at or near its fair value depending very much on the volume traded on the market. In essence,
investing into widely recognized and tradable ETFs will eventually lead to portfolio management in a more
efficient manner.

It is important to note that events affecting the investments cannot always be foreseen. Therefore, it is
not always possible to protect investments against all risks. Different investment instruments generally
exhibit different levels of risk. Please note that the returns of the Fund are not guaranteed.

Investors are reminded that the above list of risks may not be exhaustive and if necessary, they should
consult a professional adviser for a better understanding of the risks.

This Fund is a multi-class fund and is allowed to establish new Classes of Units from time to time
without your prior consent subject to the concurrence of the Trustee.

You will be notified of the issuance of the new Classes of Units by way of a replacement or
supplemental prospectus.

12
5. FEES, CHARGES AND EXPENSES

Sales charge and repurchase charge (if any) that are to be levied on the purchase and redemption of units are
computed based on the NAV per unit of the Fund that has not been rounded up.

Bank charges, courier charges and any other indirect charges as a result of purchase or redemption transactions
will be borne by Unit Holders.

5.1 FEES AND CHARGES DIRECTLY INCURRED

a) Sales Charge
The sales charge is a fee levied on the purchase of Units of the Fund, and is used to pay for marketing,
advertising and distribution expenses of the Fund. The fee is deducted upfront from the purchase amount,
leaving only the net amount invested in the Fund.
The sales charge is calculated based on the Selling Price per Unit (which is the NAV per Unit) of the Fund as at
the next valuation point after the application is received by the Manager (“forward pricing”).

Note: The Manager may waive or reduce the sales charge imposed. Investors may also negotiate for a
lower sales charge with their preferred distributor, subject to the respective channels’ qualifying
criterion.

Illustration on how the sales charge is calculated

The NAV per Unit of the Fund is the Selling Price per Unit. Assuming the Manager is charging a sales charge of
5.50% of the Selling Price per Unit:

MYR Class USD Class

(in RM) (in USD)

Investment Amount RM10,000 USD2,500

NAV per Unit RM1.0000 USD1.0000
Exchange rate of USDMYR @ 4.0000
Sales charge 5.50% 5.50%

Units issued to Unit Holder =10,000/1.0000 =2,500/1.0000

= Investment amount/NAV per Unit =10,000 Units =2,500 Units

Sales charge per Unit =1.0000 x 5.50% =1.0000 x 5.50%

= NAV per Unit x Sales charge =RM0.055 =USD0.055
=10,000 Units x RM0.055 2,500 Units x USD0.055
Total sales charge
=RM550.00 =USD137.50
=RM10,000 + RM550 =USD2,500 + USD137.50
Total amount paid to the Manager
=RM10,550.00 =USD2,637.50

Note: Please note that the above example is for illustration purposes only and the illustration does not take into
account of GST.

b) Repurchase Charge

There is no repurchase charge imposed by the Manager on the repurchase request.

c) Transfer Fee

Not available as transfer facility is not available for the Fund.

d) Switching Fee

There is no switching fee imposed by the Manager on the switching request.

13
5.2 FEES AND EXPENSES INDIRECTLY INCURRED

a) Annual Management Fee

The Manager imposes annual management fee of up to one point eight zero per centum (1.80%) per annum of the
NAV of the Fund.

The management fee is computed and accrued on a daily basis and payable monthly.

Please refer to page 17 for an illustration on the calculation of the management fee.

b) Annual Trustee Fee

Up to zero point zero five per centum (0.05%) per annum of the NAV of the Fund.

The trustee fee is computed and accrued on a daily basis and payable monthly.

Please refer to page 17 for an illustration on the calculation of the trustee fee.

c) Fund’ Expenses

These include the following:

(a) Commission paid to brokers;

(b) Auditor’s fee;
(c) Tax adviser’s fee;
(d) Valuation fee;
(e) Taxes;
(f) Foreign sub-custodian charges (where applicable);
(g) Annual/interim reports;
(h) Independent investment committee member fee; and
(i) Any other expenses permitted to be charged to the Fund by the Deed.

5.3 POLICY ON REBATES AND SOFT COMMISSIONS

It is the policy of the Manager to credit any rebates received into the account of the Fund. Soft commissions are
retained by the Manager for purchasing goods and services that are of demonstrable benefit to the Unit Holders of
the Fund and are in the form of research and advisory services that assist in the decision making process relating to
the investment of the Fund (i.e. research materials, data and quotation services and investment advisory services).

THERE ARE FEES AND CHARGES INVOLVED AND INVESTORS ARE ADVISED TO CONSIDER THEM
BEFORE INVESTING IN THE FUND.

ALL FEES AND CHARGES PAYABLE TO THE MANAGER AND THE TRUSTEE ARE SUBJECT TO GST IN
ACCORDANCE WITH THE GOODS AND SERVICES TAX ACT 2014.

14
6. TRANSACTION INFORMATION

6.1 BASES FOR VALUATION AND VALUATION FOR THE FUND

Bases for Valuation

In undertaking any of its investments, the Manager will ensure that all the assets of the Fund will be valued
appropriately, i.e. at fair market value and at all times in compliance with the Guidelines.

Investment Instruments Valuation Basis

Securities Listed on Any Market price

Exchange
However, if:
§ a valuation based on the market price does not represent the fair value of
the securities, e.g. during abnormal market conditions; or
§ no market price is available, including in the event of a suspension in the
quotation of the securities for a period exceeding fourteen (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.

Securities Not Traded In or Fair value as determined in good faith on methods or bases which have been
Under the Rules of an Eligible verified by the auditors of the Fund and approved by the Trustee.
Market

Fixed Income Securities Unquoted fixed income securities denominated in Ringgit Malaysia will be valued
on a daily basis based on fair value prices quoted by a bond pricing agency
(BPA) registered with the SC. If the Manager is of the view that the price quoted
by the BPA for a specific fixed income security differs from the market price by
more than 20 basis points, the Manager may use the market price provided that
the Manager adheres to the requirements as stipulated in the Guidelines.

Malaysian Currency Liquid Nominal value.

Assets

Foreign Currency Liquid Same basis as Malaysian currency liquid assets of similar type, with such
Assets adaptations as are necessary.

Financial Futures Investments in financial futures are valued at marked to market prices at the end
of each trading day.

Money Market Instruments Investments in conventional financial instruments such as banker acceptance,
Bank Negara monetary notes, negotiable certificate of deposits or other short-
term financial instruments issued by government or government-related
agencies are valued each day by reference to the value of such investments
and the interests accrued thereon for the relevant period.

Collective Investment Investments in collective investment schemes will be valued, based on the last
Scheme published net asset value per unit or share of such collective investment scheme.
In the case of unlisted collective investment schemes, the valuation will be based
on the last published repurchase price.

Financial Options and Investments in financial options and futures are valued at marked to market
Futures prices at the end of each trading day.

Derivatives Valuation of derivatives is classified as financial assets and is measured at

Fair Value through Profit and Loss, “FVTPL”. The financial instruments are
marked to market using valuation prices quoted by the derivatives or
structured products provider. The fair values of the financial assets are valued
at least once a week. Any unrealized gains or losses comprise changes in fair
15
 Investment Instruments Valuation Basis

value of the financial instruments are reported immediately on the statement

of comprehensive income.

Any Other Instruments Fair value as determined in good faith by the Manager, on methods or bases
which have been verified by the auditors of the Fund and approved by the
Trustee.

Valuation for the Fund

The Fund must be valued at least once every Business Day. The Guidelines also requires a valuation of the Fund
to be carried out in a fair and accurate manner. The Fund adopts a forward pricing basis which means that prices
of Units will be calculated based on the NAV of the Fund at a valuation point in the future, i.e. the next valuation
point.
If applications for Units or requests for repurchase are received before the cut-off time of 4.00 p.m. on a Business
Day, say, 2 July 2017, the Manager will process the applications using the price of the Units for that Business
Day, 2 July 2017. The price of the Units for 2 July 2017 will be calculated on the following Business Day, 3 July
2017 based on the market closing on 2 July 2017. Accordingly, applications for Units or requests for redemption
received after the cut-off time of 4.00 p.m. on the Business Day will only be processed on the next Business Day.
The valuation of the Fund will be done only on T+1 day due to the different time zones of foreign markets. The
valuation of the Units in respect of a particular Business Day can only be carried out on the following Business
Day at the close of business of the last relevant foreign market in which the Fund invests in.
The foreign exchange rate used for valuation of foreign investment is based on bid rate obtained from Reuters or
Bloomberg at U.K. time 4.00 p.m. the same day.
If you want to know the latest prices of the Units, please contact the Manager directly or refer to our website
www.kenangainvestors.com.my.

6.2 PRICING POLICY

Single Pricing
Under the single pricing regime, both the Selling Price and Repurchase Price per Unit of the Fund will be quoted
based on a single price i.e. the NAV per Unit of the Fund. NAV per Unit will be rounded to four (4) decimal places for
the purposes of publication of the NAV per Unit.
When you invest in the Fund, the investment amount payable to us is rounded to two (2) decimal points. The Units
allocated in your investment account are also rounded to two (2) decimal points. Your redemption value is also
rounded to two (2) decimal points.

Incorrect Pricing
Subject to any relevant law, if there is an error in the pricing of the NAV per Unit of the Fund, the Manager will take
immediate remedial action to correct the error. Rectification shall, where necessary, extend to the reimbursements
of money as follows if the error is at or above the significant threshold of 0.5% of the NAV per Unit:

(a) if there is an over pricing in relation to the purchase and creation of Units, the Fund shall reimburse the Unit
Holder;

(b) if there is an over pricing in relation to the repurchase of Units, the Manager shall reimburse the Fund;

(c) if there is an underpricing in relation to the purchase and creation of Units, the Manager shall reimburse the
Fund; and

(d) if there is an underpricing in relation to the repurchase of Units, the Fund shall reimburse the Unit Holder or
former Unit Holder.

Subject to any regulatory requirements, the Manager shall have the right to amend, vary or revise the abovesaid
limits or threshold from time to time.

16
Illustration: Computation of NAV for a particular day

The Fund MYR Class USD Class

#
Multi-class ratio 100% 60% 40%

Value of investment (MYR) 300,000,000.00 180,000,000.00 120,000,000.00

Conversion rate USD/MYR @ 4.1000 N/A 4.1000
Value of investment (base currency of
respective Class) 180,000,000.00 29,268,292.68
Add: Income 50,000.00 10,000.00
Less: Expenses (30,000.00) (7,000.00)
Gross Asset Value of the Fund 180,020,000.00 29,271,292.68

Less:
Management Fee - Calculated on a Daily
Basis
(1.80% per annum/365 days) (8,877.70) (1,443.52)
Trustee Fee – Calculated on a Daily Basis
(0.05% per annum/365 days)
(246.60) (40.10)
NAV of the Fund (before GST) 180,010,875.70 29,269,809.06

Less:
GST 0% on the Management Fee for the day* - -
GST 0% on the Trustee Fee for the day* - -
NAV of the Fund (after GST) 180,010,875.70 29,269,809.06

Units In Circulation 180,000,000.00 29,260,000.00

NAV per Unit of MYR Class and USD Class
(rounded to 4 decimal places) MYR 1.0001 USD 1.0003
#
Multi-class ratio (MCR) is apportioned based on the size of the Class of Units relative to the entire Fund. The
apportionment is expressed as a ratio and calculated as a percentage.

*The GST will be charged at prevailing rate in accordance to the applicable law.

6.3 APPLICATION AND REDEMPTION OF UNITS

Where Units can be Bought and Sold

Investors are required to complete applications forms or repurchase forms, which are available at the Manager’s
head office, regional offices, approved Institutional Unit Trust Advisers (IUTAs) and tied agents of the Manager
throughout Malaysia. Please refer to Directory of the Manager’s Offices, list of IUTAs and authorised distributors
at the end of this Prospectus.

The Fund may offer the following plans:

(a) “Cash Plan” whereby an investor invests on a lump sum basis;

(b) “Financing Plan” which is a personalized financial borrowing plan;

(c) “Easy Saver Plan” which is a monthly regular saving plan.

The cut-off time for making an application for Units of the Fund is 4.00 p.m. on any Business Day. Application for
Units made before the aforesaid cut-off times will be issued Units at the Selling Price per Unit calculated at the next
valuation point (i.e. “forward pricing”). The cut-off time will be determined based on the time and date stamp made by
the Manager.
Where an application is received after the cut-off times as set out above, the request will be deemed to have
been received on the next Business Day.

Note: The Manager reserves the right to accept or reject any application in whole or part thereof without
assigning any reason.

17
INVESTORS ARE ADVISED NOT TO MAKE PAYMENT IN CASH TO ANY INDIVIDUAL AGENT WHEN
PURCHASING UNITS OF THE FUND.

Transaction Details

MYR Class USD Class

Minimum Initial Investment RM1,000 USD250
Minimum Additional Investment RM100 USD25
Minimum Redemption 500 Units 100 Units
Minimum Switch 500 Units 100 Units
Minimum Transfer Transfer facility is not available for the Fund.
Minimum Holdings 500 Units 100 Units

Note: The Manager reserves the right to change the minimum amounts and number of Units stipulated
above from time to time.

Redeeming Your Investment

The Fund does not have any restriction on the frequency of redemption. You may request the Manager to repurchase
all or at least the required minimum redemption of Units per transaction (a minimum holding of Units is required to be
maintained in an account at any time) at any time by simply completing the repurchase form and returning it to the
Manager through our appointed agents or direct to our business office.
The cut-off time for making a redemption request in respect of Units of the Fund is 4.00 p.m. on any Business
Day. Redemption requests received by us before the aforesaid cut-off times will be transacted at the Repurchase
Price per Unit calculated at the next valuation point (i.e. “forward pricing”). The cut-off time will be determined based
on the time and date stamp made by the Manager.
Where the redemption request is received after the cut-off times as set out above, the request will be deemed to have
been received on the next Business Day.
Payments of redemption proceeds will be made within ten (10) days from the date at which a redemption request is
received by us.
However, if the redemption request leaves a Unit Holder with less than the required minimum holding of Units,
the Manager will automatically liquidate the balance of the Units held in the Unit Holder’s account.
Note: The Manager reserves the right to allow for such other lower amount of minimum redemption
amount.

Switching Option
Switching is a facility that we offer to our Unit Holders. This facility is a convenient way of converting Units of one
fund to another fund that we manage, in response to changing market conditions or changes in your investment
goals. Unit Holders may switch into or out of any of the funds which are managed by the Manager.
The minimum number of Units for each switching transaction is 500 Units for MYR Class and 100 Units for USD
Class or such other lower amount as the Manager in its sole discretion allows.
Application for switching of Units of the Fund should be made before the cut-off time of 4.00 p.m. on any
Business Day. Where the application for switching of Units of the Fund are received after the aforesaid cut-off times,
the application for switching of Units will be deemed to have been received on the next Business Day.
In executing his/her transaction, the Unit Holder must ensure that he/she maintains the required minimum
holding of Units in his/her account with the respective fund if he/she intends to stay invested with the fund. In the
event a switching request leaves a Unit Holder with less than the required minimum holding of Units, the
Manager will automatically switch the balance of the Units held in the Unit Holder’s account into the fund
selected by the Unit Holder.
Switching is treated as a withdrawal from one (1) fund and an investment into another fund. A Unit Holder
switching from a fund with a lower sales charge, to a fund with a higher sales charge will pay the difference in
sales charge between the sales charges of these two (2) funds. If a Unit Holder switches from one (1) fund with
higher sales charge to another fund with a lower sales charge, the Unit Holder will switch at the net asset value
per unit of the another fund.
Switching between Classes of Units is not allowed.
18
Cooling-Off Right
A cooling-off right refers to the right of the investor to obtain a refund of his/her investment if he/she so requests
within the cooling-off period (within six (6) Business Days from the date of receipt of application). The
cooling-off right is only given to an individual investor, other than those listed below, who is investing for the first
time in any unit trust fund managed by the Manager:
(i) a staff of the Manager; and
(ii) persons registered with a body approved by SC to deal in unit trust funds.

Within the cooling-off period, the refund to the investors shall not be less than the sum of:
(a) the NAV of the Units on the day the Units were purchased; and
(b) the sales charge originally imposed on the day the Units were purchased.

In other words, the investors shall be refunded their “original investment proceeds”, within ten (10) days (from the date
of receipt of the cooling-off notice by the investors). Any application for cooling-off must be made before the cut-off
time of 4.00 p.m. on any Business Day.

6.4 DISTRIBUTION POLICY AND REINVESTMENT POLICY

In the absence of instructions from a Unit Holder, distributions from the Fund are automatically reinvested into
additional Units of that Fund based on the NAV per Unit with NO sales charge on the next Business Day after the
distribution declaration date.
If there is any change to the distribution instructions, Unit Holders need to notify the Manager within fourteen (14)
days prior to the distribution payment date.
For Unit Holders who opt for distribution proceeds to be paid out to them, any distribution proceeds amounting to
RM250 and below shall be automatically reinvested as additional Units of that Fund based on the NAV per Unit with
NO sales charge on the next Business Day after the distribution declaration date.
In the event that the distribution are not presented within six (6) months from the date of payment, the unclaimed
distributions will be automatically reinvested into additional Units, based on the prevailing NAV per Unit fifteen (15)
Business Days from the end of the said six (6) months period provided that the Unit Holders still have an account with
the Manager.

6.5 UNCLAIMED MONEYS

Any proceeds payable to Unit Holders which remain unclaimed after more than one (1) year will be submitted to the
Registrar of Unclaimed Moneys by the Manager in accordance with the provisions of the Unclaimed Moneys Act
1965.

UNIT PRICES AND DISTRIBUTIONS PAYABLE, IF ANY, MAY GO DOWN AS WELL AS UP

19
7. THE MANAGER: KENANGA INVESTORS BERHAD

The Manager, was incorporated as a public limited company on 2 August 1995 under the Companies Act 1965
with an authorised share capital of RM25,000,000.00 comprising 15,000,000 ordinary shares of RM1.00 each
and 10,000,000 preference shares of RM1.00 each of which 13,465,300 ordinary shares and 5,000,000
preference shares are issued and fully paid-up. KIB is a wholly-owned subsidiary of Kenanga Investment Bank
Berhad.
The Manager is licensed and authorised to conduct business in distributing unit trust funds and fund management on
behalf of corporate, institutional and individual clients under the Act. The Manager established its maiden fund, the
Kenanga Premier Fund, on 26 November 1996 and has since then been managing an array of unit trust funds and
private mandates.
As at LPD, the Management Company manages 26 unit trust funds, 2 private retirement schemes (consisting of 6
core funds and 1 non-core fund), 22 wholesale funds and other funds from government agencies, pension funds,
insurance, corporate and individual clients with a total fund size of RM8.36 billion.

Functions of the Manager

KIB is responsible for the day-to-day management, marketing and administration of the Fund, where its key
functions include:
a) Endeavouring to manage the Fund in a sound and professional manner in accordance with its investment
objectives, the provisions of this Prospectus and the Deed;
b) Arranging for sale and redemption of Units of the Fund;
c) Issuing the Fund’s interim and annual reports to Unit Holders;
d) Keeping proper records of the Fund; and
e) Keeping Unit Holders informed on material matters relating to the Fund.

The Board of Directors

The functions of the board of directors are to elaborate, decide, endorse or resolve all matters pertaining to the
Manager and the Fund at the board meetings that are held formally four times yearly or as circumstances require.

Names Designation (Independent / Appointment Date

Non-Independent)
Datuk Syed Ahmad Alwee Alsree Chairman & Independent Director 11 October 2006
Syed Zafilen Syed Alwee Independent Director 12 May 2008
Peter John Rayner Independent Director 11 November 2010
Imran Devindran bin Abdullah Independent Director 1 June 2015
Dato’ Bruce Kho Yaw Huat Non-Independent Director 29 June 2010
Ismitz Matthew De Alwis Non-Independent Director 25 February 2015

Material Litigation
As at LPD, the Manager is not engaged in any litigation or arbitration proceedings, either as plaintiff or defendant
which has a material effect on the financial position of the Manager, and the board of directors is not aware of
any proceedings pending or threatened, or of any fact likely to give rise to any such proceedings which might
materially and adversely affect the position or business of the Manager.

Roles and Functions of the Investment Committee

The investment committee is responsible for the following:-
(a) Selecting appropriate strategies to achieve the proper performance of the Fund in accordance with the fund
management policies;
(b) Ensuring that the strategies selected are properly and efficiently implemented by the Manager; and
(c) Actively monitor, measure and evaluate the fund management performance of the Manager.
The investment committee meets four times yearly or as circumstances require.

20
Note: Further information on the Manager, board of director and investment committee are provided in
the Manager’s website at www.kenangainvestors.com.my

7.1 THE FUND MANAGEMENT TEAM

Lee Sook Yee is the designated person responsible for fund management function of the Fund. The main
personnel in the investment team are:

Lee Sook Yee

Chief Investment Officer

Lee Sook Yee joined KIB as Chief Investment Officer in March 2013, bringing with her more than sixteen (16)
years of experience in local and regional equities investment. Prior to this, Sook Yee was Head of Equities at
Meridian Asset Management, where she managed various local and regional funds. Before joining Meridian,
Sook Yee was Vice President/Senior Portfolio Manager at Credit-Suisse Asset Management in Singapore where
she co-managed mutual funds focusing on emerging Asian markets. She was also Associate Director/ Portfolio
Manager with UOB-OSK Asset Management.

Sook Yee graduated with a Bachelor of Science (First Class Honours) in Economics from the London School of
Economics, United Kingdom, and later obtained her Master of Philosophy (M.Phil) in Economics from the
University of Cambridge, UK.

Christopher Kok Keng Fai

Senior Portfolio Manager

Christopher joined KIB in January 2014 and currently has more than eight (8) years of experience in local and
regional investments. His responsibilities include portfolio management as well maintaining research coverage on
regional market & sectors. Previously, he was with Meridian Asset Management where he was also involved in
managing local and regional portfolios. He began his career with AmInvestment Bank in the Equity Capital
Markets department where he worked on numerous deals including initial public offerings (IPOs), follow-on equity
offerings, and secondary placements and underwriting risk assessments.

Christopher graduated from Monash University, Australia with a Bachelor of Commerce (Accounting & Finance)
and is also a Chartered Financial Analyst (CFA) charter holder and a holder of a Capital Markets Services
Representative’s Licence.

Liong Chee How

Senior Portfolio Manager

Liong Chee How joined KIB in September 2015, bringing with him more than ten (10) years of experience in
investment research and analysis. He started his career as an engineer before joining the investment industry as
research analyst in a local investment bank. Subsequently, he worked as an analyst in Meridian Asset
Management, covering domestic and regional equities. He then joined Pacific Mutual Fund as a fund manager,
where he managed both local and foreign funds. Chee How graduated with a Bachelor of Engineering (First
Class Honours) from University Technology of Malaysia. He is also a CFA charter holder. He obtained his Fund
Manager Representative Licence in 2012.

Lucas Kang Chun Ee

Portfolio Manager

Lucas has eight (8) years of experience and exposure in both Malaysia and regional capital markets. He began
his career as a sell-side analyst in Maybank Investment Bank covering mainly the consumer sector in Malaysia.
Subsequently Lucas joined CIMB Private Banking to cover both domestic and regional equities, his key
responsibilities include stock idea generation and portfolio advisory for ultra high net worth clients. In KIB, he
covers the North Asia region and specialise in China/Hong Kong, with Kenanga Asia Pacific Total Return Fund
under his co-management among others. Lucas graduated from University Science of Malaysia with Bachelor
Degree in Management.

21
8. THE TRUSTEE: CIMB COMMERCE TRUSTEE BERHAD

Corporate Information

CIMB Commerce Trustee Berhad was incorporated on 25 August 1994 and registered as a trust company under
the Trust Companies Act, 1949 and having its registered office at Level 13, Menara CIMB, Jalan Stesen Sentral
2, Kuala Lumpur Sentral 50470, Kuala Lumpur, Malaysia. The Trustee is qualified to act as a trustee for collective
investment schemes approved under the Capital Markets and Services Act 2007.

Experience as Trustee to Unit Trust Funds

CIMB Commerce Trustee Berhad has been involved in unit trust industry as trustee since 1996. It acts as Trustee
to various unit trust funds, real estate investment trust fund, wholesale funds and private retirement schemes.

Duties and Responsibilities of the Trustee’s in relation to the Fund

The Trustee’s functions, duties and responsibilities are set out in the Deed. The general functions, 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,
the Guidelines and acceptable business practice within the unit trust industry.
c. As soon as practicable notify the SC of any irregularity or breach of the provisions of the Deed, the
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 Guidelines and securities law.
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.

Material Litigations and Arbitration

There is no current material litigation and arbitration including those pending or threatened or any facts likely to
give rise to any proceedings, which might materially affect the business/financial position of the Trustee and any
of its delegates.

Trustee’s Delegate and Delegate’s Roles and Duties

CIMB Commerce Trustee Berhad has delegated its custodian function to CIMB Bank Berhad (CIMB Bank). CIMB
Bank's ultimate holding company is CIMB Group Holdings Berhad, a listed company on Bursa Malaysia. CIMB
Bank provides full-fledged custodial services, typically clearing, settlement and safekeeping of 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 Group Nominees
(Tempatan) Sdn Bhd”. For foreign non-Ringgit assets, CIMB Bank appoints global custodian as its agent bank to
clear, settle and safekeep on its behalf and to its order.

All investments are automatically registered in the name of the custodian to the order of the Trustee. CIMB Bank
acts only in accordance with instructions from the Trustee.

22
9. SALIENT TERMS OF THE DEED

This section of the Prospectus provides an extract of the salient terms of the deeds governing the Fund.

Rights of Unit Holders

A Unit Holder has the right, amongst others, to the following:
(a) To receive distribution of income (if any), to participate in any increase in the value of the Units and to enjoy such
other rights and privileges as are provided for in the Deed for the Fund;
(b) To call for Unit Holders’ meetings, and to vote for the removal of the Trustee or the Manager through a special
resolution;
(c) To exercise cooling-off rights (if applicable); and
(d) To receive annual and interim reports.
However, no Unit Holder shall be entitled to require the transfer to him of any of the assets of the Fund or be entitled
to interfere with or question the exercise by the Trustee, or the Manager on its behalf, of the rights of the Trustee as
the registered owner of such assets.

Liabilities of Unit Holders

(a) No Unit Holder is liable for any amount in excess of the purchase price paid for the Units as determined
pursuant to the Deed at the time the Units were purchased and any charges payable in relation thereto; and
(b) A Unit Holder shall not be under any obligation to indemnify the Manager and/or the Trustee in the event that
the liabilities incurred by the Manager and/or the Trustee 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 Manager and/or the Trustee shall be limited to recourse to the Fund.

Maximum Fees and Charges Permitted by the Deed

Maximum Sale Maximum Maximum Maximum Trustee

Charge Repurchase Charge Management Fee Fee
Fund Name
(% of the NAV per (% of the NAV per (% of the NAV per (% of the NAV per
Unit) Unit) annum) annum)
KGFS2 6% Nil 3% 0.05%

All fees and charges payable to the Manager and the Trustee are subject to GST in accordance with the Goods
and Services Tax Act 2014.

Procedures to be taken to increase the Direct Charges and Indirect Fees from the current amount
stipulated in the Prospectus

Sales Charge
The Manager may not charge a sales charge at a rate higher than that disclosed in a prospectus unless:
(a) the Manager has notified the Trustee in writing of the higher rate and the date on which such higher rate is to
become effective;
(b) a supplemental prospectus stating the higher rate is registered, lodged and issued; and
(c) such time as may be prescribed by any relevant law shall have elapsed since the supplemental prospectus
is issued.

Repurchase Charge
The Manager may not charge a repurchase charge at a rate higher than that disclosed in a prospectus unless:
(a) the Manager has notified the Trustee in writing of the higher rate and the date on which such higher rate is to
become effective;
(b) a supplemental prospectus stating the higher rate is registered, lodged and issued; and

23
(c) such time as may be prescribed by any relevant law shall have elapsed since the supplemental prospectus
is issued.

Annual Management Fee

The Manager may not charge an annual management fee at a rate higher than that disclosed in a prospectus
unless:
(a) the Manager has come to an agreement with the Trustee on the higher rate;
(b) the Manager has notified the Unit Holders of the higher rate and the date on which such higher rate is to
become effective; such time as may be prescribed by any relevant law shall have elapsed since the notice is
sent;
(c) a supplemental prospectus stating the higher rate is registered, lodged and issued; and
(d) such time as may be prescribed by any relevant law shall have elapsed since the supplemental prospectus
is issued.

Annual Trustee Fee

The Trustee may not charge an annual trustee fee at a rate higher than that disclosed in a prospectus unless:
(a) the Manager has come to an agreement with the Trustee on the higher rate;
(b) the Manager has notified the Unit Holders of the higher rate and the date on which such higher rate is to
become effective; such time as may be prescribed by any relevant law shall have elapsed since the notice is
sent;
(c) a supplemental prospectus stating the higher rate is registered, lodged and issued; and
(d) such time as may be prescribed by any relevant law shall have elapsed since the supplemental prospectus
is issued.

Procedures to be taken to increase the Direct Charges and Indirect Fees from the Maximum Rate
provided in the Deed
The maximum sales charge, repurchase charge, annual management fee or annual trustee fee set out in the
Deed can only be increased if a Unit Holders' meeting has been held in accordance with the Deed. Thereafter, a
supplemental deed proposing a modification to the Deed to increase the aforesaid maximum charges and fees is
required to be submitted for registration with the SC accompanied by a resolution of not less than two-thirds (2/3)
of all Unit Holders present and voting at the Unit Holders' meeting sanctioning the proposed modification to the
Deed.

Permitted Expenses Payable Out of the Fund

Only the expenses (or part thereof) which are directly related and necessary to the operation and administration
of the Fund may be charged to the Fund. These would include (but are not limited to) the following:
(a) commissions or fees paid to brokers or dealers 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 adviser for the benefit of the Fund;

24
(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 management company;
(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);
(m) remuneration and out of pocket expenses of the independent members of the investment committee of the
Fund, unless the Manager decides otherwise;
(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; and
(o) costs and expenses incurred in relation to the distribution of income (if any);
(p) (where the custodial function is delegated by the Trustee) charges and fees paid to sub-custodians taking into
custody any foreign assets of the Fund;
(q) fees, charges, costs and expenses relating to the preparation, printing, posting, registration and lodgement of
documents and reports which the Manager and/or Trustee may be obliged to prepare, print, post, register
and/or lodge in relation to the Fund by virtue of any relevant law; and
(r) any tax such as GST and/or other indirect or similar tax now or hereafter imposed by law or required to be paid
in connection with any costs, fees and expenses incurred under sub-paragraphs (a) to (q) above.

Retirement, Removal or Replacement of the Manager

Subject to the approval of the relevant authorities, the Manager has the power to retire in favour of some other
corporation and as necessary under any relevant law upon giving to the Trustee three (3) months' notice in
writing of the Manager’s desire so to do, or such lesser time as the Manager and the Trustee may agree upon,
and subject to the fulfilment of the following conditions:
• the retiring Manager shall appoint such corporation by writing under its seal as the management company of
the Fund in its stead and assign and transfer to such corporation all its rights and duties as management
company of the Fund;
• such corporation shall enter into such deed or deeds as the Trustee may consider to be necessary or
desirable to secure the due performance of its duties as management company for the Fund;
• upon the payment to the Trustee of all sums due from the retiring Manager to the Trustee at the date of such
retirement, the retiring Manager shall be absolved and released from all further obligations hereunder but
without prejudice to the rights of the Trustee or any Unit Holder or other person in respect of any act or
omission on the retiring Manager’s part prior to such retirement and the new management company may and
shall thereafter exercise all the powers and enjoy all the rights and shall be subject to all the duties and
obligations as fully as though such new management company had been originally a party to the Deed.

Powers of the Manager to Remove the Trustee

The Manager is obliged to give the Unit Holders notice in writing to consider the removal of the Trustee if the
Trustee fails or neglects to carry out its duties as stipulated in the Deed and under the Act. The Manager shall
take all reasonable steps to replace the Trustee as soon as practicable after becoming aware that:
• the Trustee has ceased to exist;
• the Trustee has not been validly appointed;
• the Trustee was not eligible to be appointed or to act as a trustee under any relevant law;
• the Trustee has failed or refused to act as Trustee in accordance with the provisions or covenants of the
Deed or any relevant law;
• a receiver has been appointed over the whole or a substantial part of the assets or undertaking of the
Trustee and has not ceased to act under the appointment;
• a petition has been presented for the winding up of the Trustee (other than for the purpose of and followed
by a reconstruction, unless during or following such reconstruction the Trustee becomes or is declared to be
insolvent); or
• the Trustee is under investigation for conduct that contravenes the Trust Companies Act 1949, the Trustee
Act 1949, the Companies Act 2016 or any relevant law.
25
The Trustee may be removed and another trustee may be appointed by special resolution of the Unit Holders at a
duly convened meeting of which notice has been given to the Unit Holders in accordance with the Deed.

Retirement or Removal or Replacement of the Trustee

Provided always that the Manager has in place a corporation approved by the relevant authorities to act as the
trustee of the Fund, the Trustee may retire upon the expiration of three (3) months' (or such other period as the
Manager and the Trustee may agree upon), notice in writing to the Manager of its desire so to do.
The Trustee may be removed and another trustee may be appointed by way of a special resolution of the Unit
Holders at a Unit Holders’ meeting convened in accordance with the Deed or as stipulated under the Act.

Power of Trustee to Remove or Replace the Manager

The Manager may be removed by the Trustee on the following grounds:
• if 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 Unit Holders’ interest to do so after the Trustee has given notice to it 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 relevant authorities and with the approval of the Unit
Holders by way of a special resolution;
• unless expressly directed otherwise by the relevant authorities, if the Manager is in breach of any of its
obligations or duties under the Deed or the relevant laws, or has ceased to be eligible to be a management
company under the relevant laws; or
• if the Manager has gone into liquidation, except for the purpose of amalgamation or reconstruction or some
similar purpose, or has had a receiver appointed or has ceased to carry on business.
If any of the events set out above occurs, the Manager shall upon receipt of a written notice from the Trustee cease
to be the management company of the Fund by the mere fact that the Manager has received the notice. The
Trustee shall, at the same time, by writing appoint some other corporation already approved by the relevant
authorities to be the management company of the Fund; such corporation shall have entered into such deed or
deeds as the Trustee may consider to be necessary or desirable to secure the due performance of its duties as
management company for the Fund.

Termination of the Fund

Circumstances that may lead to the termination of the Fund:-
• A special resolution is passed at a Unit Holders’ meeting to terminate or wind up the Fund, following
occurrence of events stipulated under section 301(1) of the Act and the court has confirmed the resolution,
as required under section 301(2) of the Act;
• A special resolution is passed at a Unit Holders’ meeting to terminate or wind up the Fund;
• The Fund has reached its maturity date as specified in the Deed (if applicable); and
• The effective date of an approved transfer scheme (if any) has resulted in the Fund, which is the subject of
the transfer scheme, being left with no asset/property.

Upon the termination of the Fund, the Trustee shall:

(a) sell all the assets of the Fund then remaining in its hands and pay out of the Fund any liabilities of the Fund;
such sale and payment shall be carried out and completed in such manner and within such period as the
Trustee considers to be in the best interests of the Unit Holders; and
(b) from time to time distribute to the Unit Holders, in proportion to the number of Units held by them respectively:
i) the net cash proceeds available for the purpose of such distribution and derived from the sale of the
investments and assets of the Fund less any payments for liabilities of the Fund; and
ii) any available Cash Produce;

provided always that the Trustee shall not be bound, except in the case of final distribution, to distribute any of the
moneys for the time being in his hands the amount of which is insufficient for payment to the Unit Holders of fifty (50)
sen or its foreign currency equivalent, if applicable, in respect of each Unit and provided also that the Trustee shall
be entitled to retain out of any such moneys in his hands full provision for all costs, charges, taxes, expenses, claims
and demands incurred, made or anticipated by the Trustee in connection with or arising out of the winding-up of the
Fund and, out of the moneys so retained, to be indemnified against any such costs, charges, taxes, expenses,
26
claims and demands; each such distribution shall be made only against the production of such evidence as the
Trustee may require of the title of the Unit Holder relating to the Units in respect of which the distribution is made.
In the event Fund is terminated, the Trustee shall be at liberty to call upon the Manager to grant the Trustee, and
the Manager shall so grant, a full and complete release from the Deed.
The Trustee or the Manager (as the case may be) shall, as soon as it becomes aware that the Fund is to be
terminated and wound-up, inform the relevant authorities of the same.
Where the termination of the Fund and the winding-up of the Fund have been occasioned by any of the events set
out herein;
(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;
(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;
the Trustee shall summon for a Unit Holders meeting to get directions from the Unit Holders and also arrange for a
final review and audit of the final accounts of the Fund by the auditor of the Fund; in all other cases of termination of
the trust and winding-up of the Fund, such final review and audit by the auditor of the Fund shall be arranged by the
Manager.

Termination of a Class of Unit of the Fund

The Manager may terminate a particular Class of Units if a special resolution is passed at a meeting of Unit
Holders of that Class of Units to terminate that Class of Units. The Manager may only terminate that Class of
Units if the termination of that Class of Units does not prejudice the interests of Unit Holders of any other Class of
Units. For the avoidance of doubt, the termination of a Class of Units shall not affect the continuity of any other
Class of Units of the Fund.

PROVISIONS REGARDING UNIT HOLDERS MEETINGS

Quorum Required for Convening a Unit Holders’ Meeting

The quorum required for a meeting of the Unit Holders shall be five (5) Unit Holders, whether present in person or
by proxy, provided that if the Fund has five (5) or less Unit Holders, the quorum required for a meeting of the Unit
Holders of the Fund shall be two (2) Unit Holders, whether present in person or by proxy; if the meeting has been
convened for the purpose of voting on a special resolution, the Unit Holders present in person or by proxy must
hold in aggregate at least twenty five per centum (25%) of the Units in circulation at the time of the meeting.

Unit Holders’ Meeting convened by Unit Holders

Unless otherwise required or allowed by the relevant laws, the Manager shall, within twenty-one (21) days of
receiving a direction from not less than fifty (50) or one-tenth (1/10), whichever is less, of all the Unit Holders of
the Fund or of a particular Class of Units, as the case may be, summon a meeting of the Unit Holders of the Fund
or of that Class of Units by:
(a) sending by post at least seven (7) days before the date of the proposed meeting a notice of the proposed
meeting to all the relevant Unit Holders;
(b) publishing at least fourteen (14) days before the date of the proposed meeting an advertisement giving
notice of the proposed meeting in a national language newspaper published daily and another newspaper
approved by the relevant authorities; and
(c) specifying in the notice the place and time of the meeting and the terms of the resolutions to be proposed at
the meeting.

The Unit Holders may direct the Manager to summon a meeting for any purpose including, without limitation, for
the purpose of:
(a) requiring the retirement or removal of the Manager;
(b) requiring the retirement or removal of the Trustee;
(c) considering the most recent financial statements of the Fund;
(d) giving to the Trustee such directions as the meeting thinks proper; or

27
(e) considering any matter in relation to the Deed;

provided always that the Manager shall not be obliged to summon such a meeting unless direction has been
received from not less than fifty (50) or one-tenth (1/10), whichever is less, of all the Unit Holders of the Fund or
all the Unit Holders of a particular Class of Units.

Unit Holders’ Meeting convened by Manager

Unless otherwise required or allowed by the relevant laws, the Manager may convene a Unit Holders’ meeting by
giving Unit Holders’ a fourteen (14) day written notice specifying the place, time and terms of the resolutions to be
proposed.

Unit Holders meeting convened by the Trustee

The Trustee may convene a Unit Holders’ meeting by giving Unit Holders’ a fourteen (14) day written notice
specifying the place, time and terms of the resolutions to be proposed for any purpose including, without
limitation, for the purpose of:
(a) requiring the retirement or removal of the Manager;
(b) giving instructions to the Trustee or the Manager if the Trustee considers that the investment management
policies of the Manager are not in the interests of Unit Holders;
(c) securing the agreement of the Unit Holders to release the Trustee from any liability;
(d) deciding on the next course of action after the Trustee has suspended the sale and repurchase of Units; and
(e) deciding on the reasonableness of the annual management fee charged to the Fund.

In the circumstances where:

(a) the Manager is in liquidation,
(b) in the opinion of the Trustee, the Manager has ceased to carry on business, or
(c) in the opinion of the Trustee, the Manager has, to the prejudice of Unit Holders, failed to comply with the
Deed or contravened any of the provisions of the Act,
the Trustee shall summon a Unit Holders’ meeting by sending by post a notice of the proposed meeting to the
Unit Holders at least twenty-one (21) days before the date of the proposed meeting; and publishing at least
twenty-one (21) days before the date of the proposed meeting an advertisement giving notice of the meeting in a
national language newspaper published daily and another newspaper permitted by the relevant authorities.

THE REMAINDER OF THE PAGE IS INTENTIONALLY LEFT BLANK

28
10. CONFLICT OF INTERESTS AND RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

The Kenanga Group (i.e. Kenanga Holdings Berhad and its subsidiaries) and all of its staff are allowed to invest
in any of the funds managed by the Manager.

All the transactions made by the related parties are processed as per any transactions made by normal investors.

Policies and Procedures on Dealing with Conflict of Interest

Manager
A situation of conflict of interest may erode the trust and confidence of the public in dealing with the Manager.
Hence, the directors and investment committee members must be alert and avoid or declare any conflict of
interest situations to the company secretary. Staff of the Manager will declare to the Compliance Officer in the
event of all conflicts or any potential conflict of interest situations.
All conflict of interest situations, if any, will be forwarded to the audit committee (AC) for deliberation before a fair
and equitable decision is reached. As at LPD, none of the Manager’s director or sole shareholder has direct or
indirect interest in other corporations carry on a similar business, except as otherwise disclosed below:
Kenanga Investment Bank Berhad, the sole shareholder of the Manager has indirect interest in Kenanga Islamic
Investors Berhad as it is a wholly-owned subsidiary of Kenanga Investors Berhad.

Members Dealing in Securities

(a) Trading in securities by a member for his/her personal account or for a connected person or under the
name of a nominee is not encouraged and if done so, he/she should ensure that the dealing is not
taking advantage or be viewed as taking advantage of information not generally known to the public.
(b) Dealings by employees in their own name or on behalf, and for the benefit, of another person may only
be carried out with the prior approval of Compliance officer.
(c) A member when dealing in securities whether for the company, the client or personal account shall
consistently adhere to ethical standards in such dealings. A member shall not engage in share dealing
transactions of a nature that is questionable or illegal and therefore shall not engage in share dealing
transactions, either by himself or with others which are, or which will give resemblance of false trading,
market rigging or market manipulation.

Cross Trades
Investment manager may perform cross trades between funds and/or its private mandate clients subject to the
relevant client’s, internal and regulatory requirements. However, cross trades between the personal account of an
employee of the Manager and any funds’ account or between the Manager’s proprietary accounts and its clients’
accounts are strictly prohibited. Compliance with the relevant internal and regulatory requirements on cross
trades is closely monitored and is reported to the investment committee accordingly.

Trustee – CIMB Commerce Trustee Berhad

CIMB Commerce Trustee Berhad has confirmed that they have no interest/potential interest or conflict of
interest/potential conflict of interest with the Manager and the Fund.

Advisers
The auditors, tax adviser and solicitor have confirmed that they have no interest/potential interest or conflict of
interest/potential conflict of interest with the Manager and the Fund.

29
11. TAXATION OF THE UNIT TRUST AND THE UNIT HOLDERS

(prepared for inclusion in this Prospectus)

Ernst & Young Tax Consultants Sdn Bhd 30 March 2018

Level 23A Menara Milenium
Pusat Bandar Damansara
50490 Kuala Lumpur

The Board of Directors

Kenanga Investors Berhad
Level 14, Kenanga Tower
237, Jalan Tun Razak
50400 Kuala Lumpur

Dear Sirs

TAXATION OF THE UNIT TRUST AND UNIT HOLDERS

This letter has been prepared for inclusion in the Prospectus in connection with the offer of units in the unit trust
known as Kenanga Growth Fund Series 2 (hereinafter referred to as “the Fund”).

The purpose of this letter is to provide prospective unit holders with an overview of the impact of taxation on the
Fund and the unit holders.

TAXATION OF THE FUND

The taxation of the Fund is subject to the provisions of the Malaysian Income Tax Act 1967 (MITA), particularly
Sections 61 and 63B.

Subject to certain exemptions, the income of the Fund comprising interest and other investment income derived
from or accruing in Malaysia after deducting tax allowable expenses, are subject to Malaysian income tax at the
rate of 24% with effect from the year of assessment 2016.

Tax allowable expenses would comprise expenses falling under Section 33(1) and Section 63B of the MITA.
Section 33(1) permits a deduction for expenses that are wholly and exclusively incurred in the production of
gross income. In addition, Section 63B allows unit trusts a deduction for a portion of other expenses (referred to
as ‘permitted expenses’) not directly related to the production of income, as explained below.

”Permitted expenses”’ refer to the following expenses incurred by the Fund which are not deductible under
Section 33(1) of the MITA:

• the manager's remuneration,

• maintenance of the register of unit holders,
• share registration expenses,
• secretarial, audit and accounting fees, telephone charges, printing and stationery costs and postage.

These expenses are given a partial deduction under Section 63B of the MITA, based on the following formula:

A x B
4C

where A is the total of the permitted expenses incurred for that basis period;

30
 1
B is gross income consisting of dividend , interest and rent chargeable to tax for that basis
period; and
1
C is the aggregate of the gross income consisting of dividend and interest (whether such
dividend or interest is exempt or not) and 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.

Exempt income

The following income of the Fund is exempt from income tax:

• Malaysian sourced dividends

All Malaysian-sourced dividends should be exempt from income tax.

• Malaysian sourced interest

(i) interest from securities or bonds issued or guaranteed by the Government of Malaysia;

(ii) interest from debentures or sukuk, other than convertible loan stock, approved or authorized by,
or lodged with, the Securities Commission;

(iii) interest from Bon Simpanan Malaysia issued by Bank Negara Malaysia;

(iv) interest derived from Malaysia and paid or credited by banks licensed under the Financial
2
Services Act 2013 or the Islamic Financial Services Act 2013 ;

(v) interest derived from Malaysia and paid or credited by any development financial institution
2
prescribed under the Development Financial Institutions Act 2002 ;

(vi) interest from sukuk originating from Malaysia, other than convertible loan stock, issued in any
currency other than Ringgit and approved or authorized by, or lodged with, the Securities
3
Commission or approved by the Labuan Financial Services Authority (LFSA) ; and

(vii) interest which is specifically exempted by way of statutory orders or any other specific exemption
provided by the Minister.

• Discount

Tax exemption is given on discount paid or credited to any unit trust in respect of investments as specified
in items (i), (ii) and (iii) above.

Foreign sourced income

Dividends, interest and other income derived from sources outside Malaysia and received in Malaysia by a
resident unit trust is exempt from Malaysian income tax. However, such income may be subject to tax in the
country from which it is derived.

____________________________

1
Pursuant to Section 15 of the Finance Act 2011, with effect from the year of assessment 2011, dividend income is deemed
to include income distributed by a unit trust which includes distributions from Real Estate Investment Trusts.
2
Effective from the year of assessment 2017, in the case of a wholesale fund which is a money market fund, the exemption
shall only apply to a wholesale fund which complies with the criteria as set out in the relevant guidelines of the Securities
Commission Malaysia.
3
Effective from the year of assessment 2017, the exemption shall not apply to interest paid or credited to a company in the
same group or interest paid or credited to a bank licensed under the Financial Services Act 2013; or a development financial
institution prescribed under the Development Financial Institutions Act 2002.

31
Gains from the realisation of investments

Pursuant to Section 61(1) (b) of the MITA, gains from the realisation 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
(RPGT) 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.

Goods and Services Tax (GST)

On 1 April 2015, GST was implemented at the standard rate of 6% to replace the previous sales tax and service
tax systems. Based on the Goods and Services Tax Act 2014 which was gazetted on 19 June 2014, the Fund,
being collective investment vehicles, will be making exempt supplies. Hence, the Fund is not required to be
registered for GST purposes. The Fund will incur expenses such as management fees, trustee fees and other
administrative charges which will be subject to 6% GST. The 6% input tax which may be incurred on such
4
expenses will generally not be claimable by the Fund.

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 Fund broadly falls under the following categories:

1. taxable distributions; and

2. non-taxable and exempt distributions.

In addition, unit holders may also realise a gain from the sale of units.

The tax implications of each of the above categories are explained below:

1. Taxable distributions

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 holder will be taxed on the grossed up amount.
Such distributions carry a tax credit, which will be available for set-off against any Malaysian income tax
payable by the unit holder. Should the tax deducted at source exceed the tax liability of the unit holder,
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

Tax exempt distributions made out of gains from the realisation of investments and exempt income earned
by the Fund will not be subject to Malaysian income tax in the hands of the unit holders.

___________________________
4
The Goods And Service Tax (Rate of Tax) (Amendment) Order 2018 [P. U. (A) 118], gazetted on 16 May 2018, states that the
standard (6%) rate of Goods and Services Tax (“GST”) will be substituted with the zero (0%) rate as of 1 June 2018. The
Order does not apply to supplies that are exempt from GST. These will remain exempt in accordance with the Goods and
Services Tax (Exempt Supply) Order 2014 and subsequent amendments. For GST registrants, compliance requirements
remain in place. There will be further guidelines and clarification issued by the authorities to transition from GST to the new
Sales and Services Tax (“SST”).

32
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 or trust bodies. The relevant income tax rates are as follows:

Unit holders Malaysian income tax rates

Malaysian tax resident:

• Individual and non-corporate unit holders (such as • Progressive tax rates ranging from 0% to
associations and societies) 28%

5
• Co-operatives • Progressive tax rates ranging from 0% to
24%

• 24% (Note 1)
• Trust bodies

Unit holders Malaysian income tax rates

Malaysian tax resident:

• Corporate unit holders

(i) A company with paid up capital in respect
• First RM500,000 of chargeable income @
of ordinary shares of not more than RM2.5
million (at the beginning of the basis period 18%
for the year of assessment)
6 • Chargeable income in excess of RM500,000
@ 24% (Note 1)

(ii) Companies other than (i) above • 24% (Note 1)

Non-Malaysian tax resident (Note 2):

• Individual and non-corporate unit holders • 28%

• Corporate unit holders and trust bodies • 24% (Note 1)

___________________________
5
Pursuant to Paragraph 12(1), Schedule 6 of the MITA, the income of any co-operative society—
(a) in respect of a period of five years commencing from the date of registration of such co-operative society; and
(b) thereafter where the members’ fund [as defined in Paragraph 12(2)] of such co-operative society as at the first day of
the basis period for the year of assessment is less than seven hundred and fifty thousand ringgit is exempt from tax.
6
A company would not be eligible for the 19% tax rate on the first RM500,000 of chargeable income if:-
(a) more than 50% of the paid up capital in respect of the ordinary shares of the company is directly or indirectly owned by
a related company which has paid up capital in respect of ordinary shares of more than RM2.5 million at the beginning
of a basis period for a year of assessment;
(b) the company owns directly or indirectly more than 50% of the paid up capital in respect of the ordinary shares of a
related company which has paid up capital in respect of ordinary shares of more than RM2.5 million at the beginning of
a basis period for a year of assessment;
(c) more than 50% of the paid up capital in respect of the ordinary shares of the company and a related company which
has a paid up capital in respect of ordinary shares of more than RM2.5 million at the beginning of a basis period for a
year of assessment is directly or indirectly owned by another company.

33
Note 1:
The Income Tax (Exemption) (No. 2) Order 2017 [P. U. (A) 117] was gazetted on 10 April 2017, exempts a
“qualifying person”7 from payment of income tax on an ascertained amount of chargeable income derived from
the business source in the basis period for a year of assessment. This exemption is only for the years of
assessment 2017 and 2018.

Note 2:
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.

Gains from sale of units

Gains arising from the realisation of investments will not be subject to income tax in the hands of unit holders
unless they are insurance companies, financial institutions or traders/ dealers in securities.

Unit splits and reinvestment of distributions

Unit holders may also receive new units as a result of unit splits or may choose to reinvest their distributions.
The income tax implications of these are generally as follows:

• Unit splits – new units issued by the Fund pursuant to a unit split will not be subject to income tax in the
hands of the unit holders.

• Reinvestment of distributions – unit holders may choose to reinvest their income distribution in new units by
informing the Manager. In this event, the unit holder will be deemed to have received the distribution and
reinvested it with the Fund.

___________________________
7
In order to be a qualifying person, such person must be resident in Malaysia and:
(a) a company incorporated under the Companies Act 2016;
(b) a limited liability partnership registered under the Limited Liability Partnership Act 2012;
(c) a trust body;
(d) an executor of an estate of a deceased individual who was domiciled outside Malaysia at the time of his death; or
(e) a receiver with respect to whom Section 68(4) of the MITA applies.
The exemption order only applies to a qualifying person:
(a) whose business has been in operation for not less than twenty four months; and
(b) who has chargeable income from a source consisting of a business in the basis period for a year of assessment and the
year of assessment immediately preceding that year of assessment and has made up its account for a period of twelve
months ending on the same date for each of those years of assessment.
The exemption order shall not apply to a qualifying person who in the basis period for a year of assessment;
(a) has made a claim for reinvestment allowance under Schedule 7A to the MITA or investment allowance for service sector
under Schedule 7B to the MITA;
(b) has been granted any incentive under the Promotion of Investments Act 1986;
(c) has been granted an exemption under section 127 of the MITA;
(d) has made a claim for group relief under section 44A of the MITA;
(e) is an investment holding company under section 60F or 60FA of the MITA;
(f) is a unit trust which is defined under subsection 63C(5) of the MITA; or
(g) has a debt that has been released under subsection 30(4) of the MITA.

34
 **********************************************

We hereby confirm that, as at the date of this letter, the statements made in this letter correctly reflect our
understanding of the tax position under current Malaysian tax legislation and the related interpretation and
practice thereof, all of which are subject to change, possibly on a retrospective basis. We have not been retained
(unless specifically instructed hereafter), nor are we obligated to monitor or update the statements for future
conditions that may affect these statements.

The statements made in this letter are not intended to be a complete analysis of the tax consequences relating to
an investor in the Fund. As the particular circumstances of each investor may differ, we recommend that
investors obtain independent advice on the tax issues associated with an investment in the Fund.

Yours faithfully
Ernst & Young Tax Consultants Sdn Bhd

Julie Thong
Partner

Ernst & Young Tax Consultants Sdn Bhd has given its consent to the inclusion of the Taxation Adviser's Letter in
the form and context in which it appears in this Prospectus and has not withdrawn such consent before the date
of issue of this Prospectus.

35
12. ADDITIONAL INFORMATION

Updates on the Fund

The interim and annual reports of the Fund will be forwarded to Unit Holders no later than two (2) months after the
end of the financial period in respect of the Fund.
Unit Holders and potential investors can refer to web-site: www.kenangainvestors.com.my for pricing information.
A statement of accounts will be issued to each Unit Holder on a half yearly basis. It will summarise all transactions
effected within the Fund for the past six (6) months and/or since inception as a Unit Holder.

THE FUND’S ANNUAL REPORT IS AVAILABLE UPON REQUEST.

Customer Service
Unit Holders can seek the assistance of our marketing personnel on Fund related issues at the Manager’s business
office during our business hours from 8.30 a.m. to 5.30 p.m. from Monday to Friday (refer to the Directory of the
Manager’s Office, List of IUTA and Authorised Distributors section for contact numbers).

Anti-Money Laundering Policies

Money laundering is a process intended to conceal the benefits derived from unlawful activities which are related,
directly or indirectly, to any serious offence so that they appear to have originated from a legitimate source.
The Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001
(AMLATFPUAA) is the act that provides for the offence of money laundering and also the measures to be taken
for the prevention of money laundering and terrorism financing offences. The Financial Intelligence and
Enforcement Department (FIED) of BNM has been established to carry out the functions as the competent
authority under the AMLATFPUAA. All market intermediaries under the Act and management companies
approved by the Securities Commission under the Act are obliged to comply with the provisions of the
AMLATFPUAA.
Under the AMLATFPUAA, any person who:
a) engages, directly or indirectly, in a transaction that involves proceeds of an unlawful activity or
instrumentalities of an offence;
b) acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes of or uses
proceeds of an unlawful activity or instrumentalities of an offence;
c) removes from or brings into Malaysia, proceeds of an unlawful activity or instrumentalities of an offence; or
d) conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition,
title of, rights with respect to, or ownership of, proceeds of an unlawful activity or instrumentalities of an
offence,
commits a money laundering offence and shall on conviction be liable to imprisonment for a term not exceeding
fifteen years and shall also be liable to a fine of not less than five times the sum or value of the proceeds of an
unlawful activity or instrumentalities of an offence at the time the offence was committed or five million ringgit,
whichever is the higher.
When opening new accounts and entering into a transaction with a client, the Manager identifies and verifies the
client through documents such as identity card, passport, birth certificate, driver’s licence, constituent documents
or any other official documents, whether in the possession of a third party or otherwise. Such documents shall be
filed by the Manager in accordance with relevant laws. Where the Manager suspects that a particular transaction
may not be genuine, a report will be made to the FIED.

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13. DOCUMENTS AVAILABLE FOR INSPECTION

The following documents or copies thereof, where applicable, may be inspected, without charge at the registered
office of the Manager or such other place as the SC may determine:
(a) the Deed and supplemental deeds of the Fund;
(b) the current Prospectus and supplementary or replacement prospectus, if any;
(c) the latest annual and interim reports of the Fund;
(d) each material contract disclosed in the Prospectus (if any) and, in the case of contracts not reduced into
writing, a memorandum which gives full particulars of the contracts;
(e) where applicable, the audited financial statements of the Manager and the Fund for the current financial
year and for the last three (3) financial years or if less than three years, from the date of incorporation or
commencement;
(f) any report, letter or other document, valuation and statement by any expert, any part of which is
extracted or referred to in this Prospectus (if any);
(g) writ and relevant cause papers for all current material litigation and arbitration disclosed in the
Prospectus; and
(h) consent given by experts disclosed in the Prospectus.

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37
14. DIRECTORY OF THE MANAGER’S OFFICES, LIST OF IUTA AND AUTHORISED
DISTRIBUTORS

REGIONAL OFFICES

Kuala Lumpur Johor Bahru

th
Level 13, Kenanga Tower Lot 11.03, 11 Floor, Menara MSC Cyberport
237, Jalan Tun Razak, No. 5 Jalan Bukit Meldrum
50400 Kuala Lumpur, Malaysia 80300 Johor Bahru, Johor
Toll Free: 1800 88 3737 Tel: 07-223 7505/4798
Tel: 03-2172 3123 Fax: 07-223 4802
Fax: 03-2172 3133

Petaling Jaya Seremban

nd
44B, Jalan SS21/35, 2 Floor, No. 1D-2 Jalan Tuanku Munawir
Damansara Utama, 70000 Seremban, Negeri Sembilan
47400 Petaling Jaya, Selangor. Tel : 06-761 5678
Tel No: 03-7710 8828 Fax : 06-761 2242
Fax No: 03-7710 8830
Kuantan
Klang No. B8, Ground Floor
No. 12 Jalan Batai Laut 3, Taman Intan Jalan Tun Ismail 1
41300 Klang, Selangor Darul Ehsan 25000 Kuantan, Pahang
Tel:03-3341 8818 / 03-3348 7889 Tel: 09-514 3688
Fax:03-3341 8816 Fax: 09-514 3838

Penang Miri
th nd
5.04, 5 Floor , Menara Boustead Penang 2 Floor, Lot 1264
39, Jalan Sultan Ahmad Shah Centre Point Commercial Centre
10050 Penang Jalan Melayu
Tel : 04-210 6628 98000 Miri, Sarawak
Fax : 04-210 6644 Tel: 085-416 866
Fax: 085-322 340

Ipoh Kuching
nd st
Suite 1, 2 Floor 1 Floor, No 71
63 Persiaran Greenhill Lot 10900, Jalan Tun Jugah
30450 Ipoh, 93350 Kuching, Sarawak
Perak Darul Ridzuan Tel: 082-572 228
Tel: 05-254 7573 / 05-254 7570 / 05-254 7575 Fax: 082-572 229
Fax: 05-254 7606

Melaka Kota Kinabalu

rd
No. 25-1, Jalan Kota Laksamana 2/17 A-03-11, 3 Floor
Taman Kota Laksamana, Seksyen 2 Block A Warisan Square
75200 Melaka Jalan Tun Fuad Stephens
Tel: 06-281 8913/ 06-282 0518 88000 Kota Kinabalu, Sabah
Fax: 06-281 4286 Tel: 088-447 089 / 088-448 106
Fax: 088-447 039

IUTA OR AUTHORISED DISTRIBUTORS

For more details on the list of appointed IUTAs or authorised distributors, please contact the Manager at 03-
2172 3123.

38
Kenanga Investors Berhad
Company No. 353563-P

Head Office
Level 14, Kenanga Tower
237, Jalan Tun Razak
50400 Kuala Lumpur
Malaysia

Website
www.kenangainvestors.com.my

Email
investorservices@kenanga.com.my

Toll Free Line

1-800-88-3737