interim 2008 osk-uob equity trust unaudited interim … · allocation and stock specific selection....

INTERIM 2008

OSK-UOB EQUITY TRUST

UNAUDITED INTERIM REPORT

TO UNIT HOLDERS

FOR THE FINANCIAL PERIOD FROM

1 JANUARY 2008

TO 30 JUNE 2008

OSK-UOB Unit Trust Management Bhd (355720-P)

OSK-UOB Unit Trust Management Bhd 1

GENERAL INFORMATION ABOUT THE FUND Commencement Date OSK-UOB Equity Trust (“the Fund”) was established on 24 July 1996. It commenced operations on 8 August 1996. Size of Fund The present size of the Fund has been approved up to 750 million Units. Any further increase in fund size shall be effective upon notification to the Securities Commission of the increase subject to the requirements as per the Guidelines on Unit Trust Funds. Fund Category and Type Fund Category - Equity fund Fund type - Growth fund Investment Objective, Policy and Strategy Objective of the Fund This Fund aims to provide investors with capital growth through investments in stocks with high growth potential over a medium to long term* period. Strategy The asset allocation of the Fund will be as follows:- 90% - 98% of Net Asset Value

- Investments in securities of companies that have good growth potential. In managing these investments, the Fund may invest up to 50% of the Fund’s Net Asset Value in Asia ex Japan markets.

2% - 10% of Net Asset Value

- Investments in liquid assets including bonds, money market instruments and deposits with licensed financial institutions.

The above asset allocation of the Fund is only indicative and will be reviewed from time to time depending on the judgement of the investment manager as to the general economic and market conditions.


*Note: “medium to long term” in this context refers to a period of between 3 – 7 years.

The Manager has on 17 August 2007 appointed UOB Asset Management Ltd, Singapore as the Fund’s External Investment Manager for the Fund’s investment in foreign market.

Investment Philosophy Manager The Manager believes that prices of securities are ultimately determined by fundamental factors, and superior long-term investment performance can be achieved by exploiting inefficiencies in the capital market through rigorous and intensive research. External Investment Manager The External Investment Manager believes that the global capital markets are, to varying degrees, inefficient. Therefore, it is possible to achieve superior long-term performance through rigorous research and analysis in the form of top down macro analysis of markets and bottom-up sector, stock and credit specific research process that is applied consistently firm-wide. The External Investment Manager’s team-based approach synthesizes the ideas and convictions generated by both the fixed income and equities team who work closely with one another. This team-based approach has delivered consistent performance over time and across business cycles. Investment Approach (a) The Manager’s investment approach will evolve around the following principles:- Equities 1) Combination of “top-down” and “bottom-up” approach – an investment

strategy that is not mutually exclusive but closely inter-twined between asset allocation and stock specific selection.

2) Value driven approach - Stocks are then selected for their value. 3) Emphasis on growth - Stocks are further selected for their growth potential.


The equity selection will be based on a rigorous process which will appraise the relative value of a company in terms of:-

1) Price/Earnings (P.E.) 2) P.E. to Growth 3) Dividend Growth 4) Dividend Yield 5) Price-Book Value 6) Quality of Earnings (Volatility, Sustainability, Visibility) 7) Financial Strength (Strong balance sheet) 8) Competitive Risks 9) Profit Margin 10) Cashflow Analysis 11) Quality of Management, Corporate Governance

(b) External Investment Manager The External Investment Manager’s investment approach is ultimately driven by fundamental research and will evolve around the following principles:-

Macro Economic Analysis

Sectoral Analysis & Asset Allocation

In-depth Analysis

Equity Selection

Pre-select Stock Universe

Fundamental Analysis

Relative valuation of stock and its related securities i.e. warrants and ICULS (Where applicable)

Black-Scholes model for warrant valuation

Valuation screen for growth, value, momentum and quality

Liquidity and market capitalization consideration

Portfolio Construction


The portfolio is constructed from best fundamental ideas as follows:-

Fundamental Research

Idea Generation Quantitative and qualitative screens

Quality and potential at a reasonable price; performance over varying conditions; shareholder value creation; cash flow generation

Portfolio Construction

Risk / Performance Analysis

Select best ideas; country diversification; client guidelines and restrictions

Quantifying portfolio risks

Tracking error and allocation controls; ongoing monitoring of all investments for fundamental deterioration

Review performance against client expectations; performance attribution analysis


The equity selection will be based on a rigorous process which will appraise the relative value of a company in terms of:-

1) Valuation (PER, DCF, NTA, RNAV) 2) Correct asset allocation based on economic cycle 3) Correct sector allocation based on market cycle 4) Dividend Payout 5) Earnings growth potential 6) Quality of Earnings (Volatility, Sustainability, Visibility) 7) Financial Strength (Strong balance sheet) 8) Risk Factors pertaining to stock/sector 9) Cash Flow 10) Quality of Management, Corporate Governance

Investment Policies and Restrictions This Fund may invest in securities traded on the Bursa Malaysia or any other market considered as an Eligible Market, securities not listed in or traded under the rules of an Eligible Market, collective investment schemes, securities/instruments in foreign markets, financial derivatives, structured products, liquid assets (including money market instruments and deposits with any licensed financial institutions), participate in the lending of securities, and any other investments approved by the Securities Commission from time to time. Fund Distribution Policy Distribution, if any, will be reinvested to purchase additional units in the Fund based on the Net Asset Value of a unit one month after the close of the Fund’s financial year.


MANAGER’S REPORT MARKET REVIEW From January to June 2008, the benchmark KLCI and FBM Emas declined by 17.9% and 19.5% respectively. Market sentiment was affected by several issues including inflationary pressure, the weakening US economy, financial crisis in the West, rising oil prices and domestic political uncertainties following BN’s poor performance in the 8 March General Elections. Relative to the rest of Asia, Malaysia outperformed the MSCI Asia ex-Japan Index, which declined 23.0% (in Ringgit terms) during the period. This was not surprising given Malaysia did not appreciate as much as the other regional markets over the last 2 years. Looking at MSCI’s individual country indices, there was nowhere to hide with all regional bourses recording losses. The top performing markets were Singapore (-9.9%), Thailand (-10.8%) and Indonesia (-11.8%), while Philippines (-39.0%), China (-27.3%) and Hong Kong (-23.4%) were the worst performing markets. The results from the General Elections on 8 March 2008 shocked the market with the ruling coalition’s worse than expected showing, losing its 2/3 majority for the first time since gaining Independence. This led to an immediate sell-down of the market with the KLCI losing 123 points (9.5%) on the Monday following the election results. The local bourse recovered gradually as global markets improved up till mid-May 2008. In June 2008, the government announced an unexpected 41% increases in petrol prices and 21% jump in electricity tariff rates. This spooked the stock market on concerns that cost-push inflationary pressure would dampen economic growth going forward. Under the Mid Term Review of the 9th Malaysia Plan, the government increased the development expenditure by RM30bn to help compensate for the rising cost of raw materials. Nonetheless, the Government had to defer some mega projects (Penang Outer Ring Road and the Penang Monorail projects) to contain the fiscal deficit. ECONOMIC REVIEW AND OUTLOOK In 2007, Malaysia’s GDP growth expanded by 6.3% (vs. 5.9% in 2006) thanks mainly to strong private consumption and investment activities. The strong growth momentum continued into 1Q08 where GDP growth came in at 7.1%, a second consecutive quarter of above 7% growth. Growth was broad based, led by strong domestic demand. Private consumption grew 11.8% lifted by rising disposable income from high CPO prices and favourable labour market conditions. Similarly, public consumption expanded by 10.5% on the back of higher expenditure on emoluments,


defense and services. On the external front, export growth moderated to 6.0% from 7.8% in 4Q07, dragged down by a 10.2% contraction in the exports of electronic and electrical products. Looking forward into 2H08, growth momentum is expected to wane as domestic demand is likely to slow significantly. Sharp rises in fuel and electricity rates coupled with heightened political uncertainties are likely to dampen consumer spending and private investment. On the external front, expected slowdown in global demand led by prolonged US sub-prime mortgage woes and credit crisis coupled with rising interest rates across the world would dampen exports. Overall we expect GDP growth to slow to 5.0-5.5% this year from 6.3% in 2007. On the inflation front, Consumer Price Index (CPI) is expected to spike from June onwards given the recent hike in energy prices. Inflation accelerated to 3.8% in May, the highest in 22 months on rising food & non-alcoholic beverage prices. Moving forward, soaring food prices and the increases in fuel and electricity tariffs coupled with potential pass-through effects could push CPI to 6.0-6.5% in 2H08. For the whole year, inflation is likely to register between 4.7-5.2% from 2.0% last year. With rising cost pressures, Bank Negara may also be forced to raise interest rates by as much as 50 basis points by year end to contain the knock-on effects of inflation. REVIEW OF FUND PERFORMANCE AND STRATEGY DURING THE PERIOD For 1H08, Equity Trust Fund’s NAV declined by 17.6%, outperforming its benchmark (70% KLCI and 30% MSCI Asia ex Japan Indices) decline of 19.4%. During the period under review, the Manager lowered the equity investment level from 92.5% to 76.0% while at the same time repositioning the portfolio to be more defensive. The major out-performers during the first half of the year were steel and plantation companies while MAS, Tenaga and Resorts World were the worst performers. At the interim period, the Fund’s realized loss from the sale of investments of RM4.95m was partially offset by dividends and interest income of RM1.7m. With the market down close to 20%, the Fund also sat on paper losses of RM17.4m or 16.5% of NAV as at 30 June 2008. After deducting expenses and taxes of RM0.903m and RM0.236m respectively, the Fund reported a total loss of RM21.8m for the first half of the year. MARKET OUTLOOK & STRATEGY GOING FORWARD While global growth has been more resilient than anticipated, investors’ concerns have now spread from the financial crisis in the West towards global inflation as oil prices


continue to surge upwards dragging along food and other commodity prices. As headline inflation across the world continues to break new highs, central banks are forced to tighten monetary policy by raising interest rates. The main worry going forward is central banks over tightening monetary policy thus further exacerbating the slowdown in global economic growth. Asia’s economic decoupling from the West argument put forth at the beginning of this year has been thrown out of the window as monies set aside for infrastructure development has now been used to subsidize escalating food and energy prices. This coupled with the fact that food and energy accounts for as much as 50% of the average household income in some of the developing /emerging Asian countries poses serious problems for policy makers. While the global economic uncertainties and the deceleration in domestic growth does not augur well for investors’ confidence especially with the added concern of domestic political uncertainties, the only silver lining for now is the fact that relative to the rest of Asia, Malaysia’s economic fundamentals stand in good stead given the country’s strong balance sheet, growing foreign reserves and relatively low corporate gearing. Potential positive market catalyst could come from an accommodative 2009 budget speech slated for 29 August as the government looks for ways to ease the pain of higher cost of living. Political headwinds should also subside by the end of 3Q as the deadline set by de-facto Opposition Leader, Datuk Seri Anwar Ibrahim to take over the Federal Government is 16 September while within UMNO, nominations for contesting in party posts should be known after the October UMNO divisional meetings. With the confluence of domestic and external concerns, we would remain sidelined until there is greater clarity on the global outlook. Locally, we will also have to wait to see how the political impasse pans-out over the next couple of months. The final outcome as to whether Datuk Seri Abduallah Ahmad Badawi will remain as Prime Minister of Malaysia and President of UMNO will be known after the UMNO election which is slated for the third week of December 2008. From an asset allocation perspective, we favor investing more money abroad as opposed to locally in 2H08 given the wider range of stock options minus the political uncertainties. We will look to invest in the oversold markets like China and Hong Kong where valuations are now looking attractive after the sharp correction in share prices. Locally, we will focus on: 1) defensive stocks i.e. those able to provide sustainable high dividend yields; 2) companies undertaking general offers; and 3) companies with attractive valuations, visible earnings growth and clear share price catalyst.


PERFORMANCE REVIEW For the financial period under review, the Fund achieved a loss of 17.64% in net asset value terms whilst the Equity Index** recorded a loss of 19.42%. Since its launch date, the Fund has registered an average annual return of 3.42% in net asset value terms compared to the Equity Index**, which recorded a smaller gain of 0.70%. Thus, the Fund has achieved its objective of providing investors with capital growth over a medium to long term period. PERFORMANCE DATA As at

30/6/2008 1-month

% 3-month

% 6-month

% OSK-UOB Equity

Trust

Net Asset Value Per Unit (RM)

0.6715

(6.41)

(2.07)

(17.64)

Equity Index** - (8.29) (5.38) (19.42)

Average Annual Return

1 Year

30/6/2007 - 30/6/2008

%

3 Years

30/6/2005 - 30/6/2008

%

5 Years

30/6/2003 - 30/6/2008

%

Since Launch

6/9/1996*- 30/6/2008

% OSK-UOB Equity

Trust

Net Asset Value Per Unit

(12.09)

14.80

14.12

3.42

Equity Index** (12.47) 10.54 11.64 0.70


Year Ended 31 December

2007 %

2006 %

2005 %

2004 %

2003 %

OSK-UOB Equity Trust - Capital Return 17.00 17.47 (5.11) 8.41 14.43 - Income Return 18.10 7.89 6.74 6.24 5.72 - Total Returns 38.18 26.74 1.29 15.18 20.98 KLCI 31.82 21.83 (0.84) 14.29 22.84 Equity Index** 30.82 21.73 3.28 - -

PERFORMANCE DATA

1.29

38.18

15.18

26.74

20.9821.73

0 0

3.28

30.82

31.82

21.83

14.29

22.84

(0.84)

-5

0

5

10

15

20

25

30

35

40

2003 2004 2005 2006 2007

Year

Percentage

Total Returns Equity Index KLCI *Being the last day of the Initial Offer Period Note: The performance of the Fund is benchmarked against Equity Index. ** The performance of the Fund cannot be compared directly with any specific publicly

available benchmark such as the Kuala Lumpur Composite Index (KLCI) nor the MSCI AC Asia Ex-Japan Index as the Fund may invest up to 50% of its Net Asset Value in securities of approved foreign markets. However, a benchmark comprising 70% of the performance of the KLCI and 30% of the MSCI AC Asia Ex-Japan Index for the financial period under review is used for comparative purposes.


NOTE: Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up. The abovementioned performance computations have been adjusted to reflect distribution payments and unit splits wherever applicable. The basis of calculating the Fund’s returns is in line with the method used by Mercer Zainal Consulting Sdn Bhd.

As at As At 31 December Fund Size 30/6/2008 2007 2006 2005 Net Asset Value (RM million) 105.21 118.49 160.68 221.07 Units In Circulation (million) 156.68 145.32 230.63 372.73 Net Asset Value Per Unit (RM)

0.6715

0.8153

0.6967

0.5931

Selling Price (RM) -+ -+ 0.7412 0.6309 Buying Price (RM) -+ -+ 0.6967 0.5931


+ Effective 1 July 2007, due to the introduction of the Single Pricing Regime (SPR)

by the regulatory authorities, the Fund no longer computes the buying and selling prices as all references to the Fund’s valuation shall be at Net Asset Value (NAV) per unit.

1/1/2008- Year Ended 31 December

Historical Data 30/6/2008

RM 2007 RM

2006 RM

2005 RM

Unit Prices Selling Price - High -+ -+ 0.7816 0.6883 - Low -+ -+ 0.6286 0.6274 Buying Price - High -+ -+ 0.7348 0.6470 - Low -+ -+ 0.5909 0.5898 NAV - High 0.8270 0.9635 0.7348 0.6470 - Low 0.6491 0.6898 0.5909 0.5898 Distribution and Unit Split Gross Distribution Per Unit

(sen) -

14.7595

5.5000

4.0000

Net Distribution Per Unit (sen) -

12.6135 3.8000 2.7635

Ex date

-

31 December 2007

29 December 2006

30 December 2005

Payment date

-

4 February 2008

2 February 2007

3 February 2006

Reinvestment NAV Per Unit N/A 0.7366 0.7364 0.6100 NAV before distribution (cum)

N/A

0.9425

0.7304

0.6216 NAV after distribution (ex) N/A 0.8153 0.6967 0.5931 Unit Split - - - - Others Management Expense Ratio

(MER) (%) #

0.80

1.62

1.62

1.59 Portfolio Turnover Ratio (PTR)

(times) ##

0.37

0.94

0.78

0.56


# The MER for the financial period is consistent with the previous corresponding period (refer note 15).

## The PTR for the financial period was lower compared with the previous financial

period as there were less trading opportunities during the financial period under review (refer note 14).

FINANCIAL REVIEWS For the financial period under review, the Fund reported an income of RM1.74 million comprising of dividends and interest. Taking into account total net realised loss on sales of quoted investments of RM4.95 million and net realised loss on foreign exchange of RM0.05 million, unrealised loss attributable to changes in value of investments held of RM17.45 million and unrealised gain on foreign exchange of RM0.05 million, the Fund reported a total investment loss of RM20.66 million. After taking into consideration the Fund’s expenses and income tax expense, the Fund reported a net loss after tax of RM21.80 million. However, with the inclusion of the undistributed income brought forward from previous year of RM56.37 million; the realisation of unrealised gain attributable to investments sold of RM19.89 million and realisation of unrealised foreign exchange loss attributable to foreign currency monetary items of RM0.56 million; the transfer of the unrealised loss attributable to investments held of RM17.45 million and unrealised loss on foreign exchange of RM0.05 million to unrealised reserve; and the deduction of distribution equalisation of RM4.90 million, the Fund has a surplus income carried forward of RM66.40 million. DISTRIBUTION For the financial period under review, no distribution has been proposed. PORTFOLIO STRUCTURE As at 30 June 2008, the Fund was 75.27% invested in equities, 5.48% invested in collective investment schemes and the remaining 19.25% invested in cash and money market instruments.


PORTFOLIO STRUCTURE AS AT 30 JUNE 2008

Cash/Deposits19.25%

Construction4.45%

Trading/services31.15%

Collective Investment Schemes5.48%

Consumer Products

2.94%

Plantation8.09%

Industrial Products13.61%

Technology4.55%

Properties2.66%

Finance7.82%

The asset allocation of the Fund as at 30 June were as follows: 2008 2007 2006 Sectors % % % % % %Equities : Construction 4.45 3.18 2.24 Consumer Products 2.94 4.93 5.94 Finance 7.82 12.46 17.31 Industrial Products 13.61 19.22 5.99 Infrastructure Project Companies

-

-

3.80

Plantation 8.09 5.70 5.78 Properties 2.66 7.69 4.76 Technology 4.55 5.70 5.31 Trading / Services 31.15 31.91 40.37 Warrants / TSR - 75.27 0.39 91.18 - 91.50 Collective Investment Schemes 5.48

0.79

5.07

Cash / Deposits: 19.25 8.03 3.43

100.00 100.00 100.00


The asset allocation was reflective of our stance to realise equities into cash deposits amidst global markets uncertainties caused by among others the US sub prime mortgage crisis, the domestic political development, increase in oil prices and the global concern over rising inflation.

71.63%

9.43%

5.50%

5.34%

5.06%

3.04%

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

Percentage

Malaysia

Hong Kong

Taiwan

USA

Singapore

Korea

Countries

ASSET ALLOCATION BY COUNTRIES AS AT 30 JUNE 2008

FUND SIZE AND PROFILE OF UNIT HOLDINGS BY SIZE As at 30 June 2008, the Fund’s units in circulation stood at 156.68 million units with a total of 3,821 accounts.

Account Holders No. Of Units Held* Size of Holdings No. % (‘000) % 5,000 and below 1,240 32.45 2,728 1.74 5,001 to 10,000 760 19.89 5,545 3.54 10,001 to 50,000 1,344 35.17 30,603 19.54 50,001 to 500,000 469 12.28 54,312 34.69 500,001 and above 8 0.21 63,406 40.49 Total 3,821 100.00 156,594 100.00

*Excluding Manager’s stock


SOFT COMMISSIONS It is the Manager’s policy to credit all stockbroking rebates to the account of the Fund. For the financial period under review, the Manager has received soft commissions from brokers/dealers in consideration for directing dealings in the investments of the Fund. These soft commissions were in the form of goods and services such as subscriptions to Bloomberg Services and Lipper Analytical Services which are of demonstrable benefits to the Unit Holders.


TRUSTEE’S REPORT TO THE UNIT HOLDERS OF OSK-UOB EQUITY TRUST We have acted as Trustee of OSK-UOB Equity Trust for the financial period from 1 January 2008 to 30 June 2008. In our opinion, OSK-UOB Unit Trust Management Bhd, the Manager, has managed the Fund in accordance with the limitations imposed on the investment powers of the management company and the trustee under the Deed, other provisions of the Deed, the Capital Markets And Services Act 2007, the applicable Guidelines on Unit Trust Funds and other applicable laws during the financial period then ended. We have also ensured the following: a) the procedures and processes employed by OSK-UOB Unit Trust

Management Bhd to value and price the units of the Fund are adequate and that such valuation/pricing is carried out in accordance with the Deed and relevant regulatory requirements; and

b) the creation and cancellation of units are carried out in accordance with the

Deed and the relevant regulatory requirements. For HSBC (Malaysia) Trustee Bhd Maziah Yong Co-Head, Unit Trust Kuala Lumpur, Malaysia 15 August 2008


STATEMENT BY MANAGER We, Ho Seng Yee and Lim Suet Ling, being two of the directors of OSK-UOB Unit Trust Management Bhd, do hereby state that in the opinion of the Manager, the accompanying unaudited statement of assets and liabilities as at 30 June 2008 and the unaudited income statement, unaudited statement of changes in net asset value and unaudited cash flow statement for the financial period from 1 January 2008 to 30 June 2008 together with the notes thereto, are drawn up in accordance with applicable Financial Reporting Standards in Malaysia and the Securities Commission’s Guidelines on Unit Trust Funds so as to give a true and fair view of the financial position of OSK-UOB Equity Trust as at 30 June 2008 and of its results, changes in net asset value and cash flows for the financial period then ended. On behalf of the Manager Ho Seng Yee Lim Suet Ling Kuala Lumpur, Malaysia 15 August 2008


OSK-UOB EQUITY TRUST UNAUDITED INCOME STATEMENT FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 1/1/2008 to 1/1/2007 to Note 30/6/2008 30/6/2007 RM RM INVESTMENT (LOSS)/INCOME Gross dividend income 1,492,298 2,338,118 Interest income 246,819 104,346 Net realised (loss)/gain on sale of

investments

(4,953,305)

12,400,305 Net realised loss on foreign exchange (47,095) (277,613) Net unrealised (loss)/gain on changes in

value of investments held

(17,449,161)

27,778,231 Net unrealised gain/(loss) on foreign

exchange

47,974

(887,886) (20,662,470) 41,455,501 EXPENSES Manager’s fee 4 (843,932) (1,148,270) Trustee’s fee 5 (39,537) (53,644) Auditors’ remuneration (1,500) (1,500) Tax agent’s fee (1,200) (1,200) Administrative expenses (16,992) (26,819) (903,161) (1,231,433) Net (loss)/income before tax (21,565,631) 40,224,068 Income tax expense 6 (236,220) (434,008) Net (loss)/income after tax (21,801,851) 39,790,060

Net (loss)/income after tax is made up of the following: Net realised (loss)/income (4,400,664) 12,899,715 Net unrealised (loss)/gain (17,401,187) 26,890,345 (21,801,851) 39,790,060 The accompanying notes are an integral part of the financial statements.


OSK-UOB EQUITY TRUST UNAUDITED STATEMENT OF ASSETS AND LIABILITIES AS AT 30 JUNE 2008 Note 2008 2007 RM RM INVESTMENTS Quoted investments- In Malaysia 7 57,509,908 99,561,720 Quoted investments- Outside Malaysia 8 21,682,856 34,477,412 Collective investment schemes – In Malaysia

9

5,767,924

1,159,072 Deposits with licensed financial institutions 10 12,514,723 7,196,367 97,475,411 142,394,571 OTHER ASSETS Tax recoverable 234,553 1,018,783 Dividends receivable 172,625 118,437 Interest receivable 4,586 2,425 Other receivables 380 80,301 Due from stockbrokers - 57,928 Cash at bank - In Malaysia 98,352 1,471,647 Cash at bank - Outside Malaysia 8,144,639 6,542,845 8,655,135 9,292,366 TOTAL ASSETS 106,130,546 151,686,937 LIABILITIES Due to stockbrokers - 2,991,948 Due to Manager 872,501 1,594,597 Due to Trustee 19,610 26,150 Other payables and accruals 24,706 38,484 TOTAL LIABILITIES EXCLUDING

NET ASSET VALUE (“NAV”) ATTRIBUTABLE TO UNIT HOLDERS

916,817

4,651,179 NAV ATTRIBUTABLE TO UNIT

HOLDERS

11

105,213,729

147,035,758 UNITS IN CIRCULATION 11(a) 156,682,000 162,994,000 NAV PER UNIT (RM) 0.6715 0.9021 The accompanying notes are an integral part of the financial statements.


OSK-UOB EQUITY TRUST UNAUDITED STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 2008 2007 RM RM RM RM NAV attributable to

Unit Holders as at 1 January 2008/2007

118,489,874

160,684,812 Net realised

(loss)/income recognised in the income statement

(4,400,664)

12,899,715

Distribution

equalisation

(4,903,694)

5,020,523

Net (decrease)/increase

in realised income transferred to realised reserve

(9,304,358)

17,920,238 Net unrealised

(loss)/gain recognised in the income statement

(17,401,187)

26,890,345 Movement due to units

created and cancelled during the period (Note 11(a)):

- creation of units 7,287,513 1,193,947 - reinvestment of units

18,330,443

8,764,092

- cancellation of units (12,188,556) (68,417,676) 13,429,400 (58,459,637) NAV attributable to

Unit Holders as at 30 June 2008/2007

105,213,729

147,035,758 The accompanying notes are an integral part of the financial statements.


OSK-UOB EQUITY TRUST UNAUDITED CASH FLOW STATEMENT FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008

1/1/2008 to 1/1/2007 to 30/6/2008 30/6/2007 RM RM CASH FLOWS FROM OPERATING AND

INVESTING ACTIVITIES

Proceeds from sale of investments 53,401,527 125,346,210 Purchase of investments (30,897,797) (54,963,336) Dividends received 1,259,572 1,928,482 Interest received 243,916 103,375 Manager’s fee paid (949,420) (1,256,346) Trustee’s fee paid (44,459) (58,687) Auditors’ remuneration paid (3,000) (3,000) Payment for other fees and expenses (29,085) (17,810) Tax refund/(paid) 814,599 (345) Distribution to Unit Holders (18,330,443) (8,764,092) Net cash generated from operating and investing

activities

5,465,410

62,314,451 CASH FLOWS FROM FINANCING

ACTIVITIES

Cash proceeds from units created 19,891,410 8,875,561 Cash paid on units cancelled (12,815,147) (61,963,247) Net cash generated from/(used in) financing

activities

7,076,263

(53,087,686) NET INCREASE IN CASH AND CASH

EQUIVALENTS 12,541,673 9,226,765 CASH AND CASH EQUIVALENTS AT

THE BEGINNING OF THE PERIOD 8,216,041 5,984,094 CASH AND CASH EQUIVALENTS AT

THE END OF THE PERIOD 20,757,714 15,210,859 Cash and cash equivalents comprise : Cash at banks 8,242,991 8,014,492 Deposits with licensed financial institutions 12,514,723 7,196,367 20,757,714 15,210,859 The accompanying notes are an integral part of the financial statements.


OSK-UOB EQUITY TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2008 1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES The Unit Trust (hereinafter referred to as “the Fund”) was constituted pursuant to the execution of a Deed dated 24 July 1996 and First Supplemental Deed dated 18 March 1998 (hereinafter referred to as “Deed”) between the Manager, OSK-UOB Unit Trust Management Bhd and the Trustee, HSBC (Malaysia) Trustee Bhd and the Unit Holders of the Fund.

The principal activity of the Fund is to invest in Authorised Investments as set out in the Deed, which includes securities of companies quoted on Bursa Malaysia and short term money market instruments. The Fund was launched on 8 August 1996 and will continue its operations until terminated by the Trustee as provided under Clause 33 of the Deed.

The Manager is a 70% owned subsidiary of OSK Investment Bank Bhd. It is principally engaged in the sale of trust units and management of unit trust funds. The ultimate holding company of the Manager is OSK Holdings Bhd, a company listed on the Main Board of Bursa Malaysia. All of the above-mentioned companies are incorporated in Malaysia. The financial statements were authorised for issue by the Board of Directors of the Manager in accordance with a resolution of the directors on 15 August 2008.

2. FINANCIAL RISK MANAGEMENT POLICIES The Fund is exposed to a variety of risks which include market risk, single issuer risk, interest rate risk, credit risk, liquidity risk, currency risk and country risk. Financial risk management is carried out through sound internal control systems and adherence to the investment restrictions as stipulated by the Securities Commission’s Guidelines on Unit Trust Funds and the Capital Markets And Services Act 2007 in Malaysia.


(a) Market Risk Market risk arises when the value of the securities fluctuates in response to the activities of individual companies, and general market or economic conditions. Market risk is managed through portfolio diversification across a number of sectors, industries and countries, minimising the risk not only of any single company’s securities becoming worthless, but also of all holdings suffering uniformly adverse business conditions. (b) Single Issuer Risk The Fund is restricted to invest in securities issued by any issuer of not more than a certain percentage of its NAV. Under such restriction, the risk exposure to the securities of any issuer is managed. (c) Interest Rate Risk Cash, bonds and other fixed income securities are particularly sensitive to movements in interest rates. Where interest rates rise, the return on cash will rise while the value of bonds and other fixed income securities will fall and vice versa, thus affecting the NAV of the Fund. When the interest rate trend is anticipated to rise, the exposure to bonds and other fixed income securities will be reduced to an acceptable level. (d) Credit Risk Credit risk refers to the ability of an issuer or counterparty to make timely payments of interest, principals and proceeds from realisation of investments. The Manager manages the credit risk by undertaking credit evaluation and close monitoring of any changes to the issuer/counterparty’s credit profile to minimise such risk. (e) Liquidity Risk The Fund maintains sufficient level of liquid assets to meet anticipated payments and redemption of units by Unit Holders. Liquid assets comprise cash, deposits with licensed financial institutions and other instruments, which are capable of being converted into cash within 7 days. The Manager’s policy is to always maintain a prudent level of liquid assets so as to reduce the liquidity risk to the Fund. (f) Currency Risk Investments in foreign countries are exposed to currency risk due to the fluctuation of currency exchange rates. The Fund is restricted to invest in foreign securities of not more than a certain percentage of its net asset value. Under such restriction, the exposure on currency risk is thus managed.


(g) Country Risk In addition to currency risk, the value of the assets of the Fund may also be affected by uncertainties such as currency repatriation restrictions or other developments in the law or regulations of the countries in which the Fund may invest. 3. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Accounting The financial statements of the Fund have been prepared on a historical cost basis, except for investments that have been measured at their fair values, and comply with applicable Financial Reporting Standards (“FRS”) in Malaysia and the Securities Commission’s Guidelines on Unit Trust Funds. At the date of authorisation of these financial statements, FRS 139 Financial Instruments: Recognition and Measurement, whose effective date has been deferred, have not been applied by the Fund. The Fund is exempted from disclosing the possible impact, if any, to the financial statements upon the initial application of FRS 139. The financial statements are presented in Ringgit Malaysia (“RM”). (b) Foreign Currency Translation Transactions in foreign currencies are initially recorded in Ringgit Malaysia (RM) at rates of exchange ruling at the date of the transaction. At each balance sheet date, foreign currency monetary items are translated into Ringgit Malaysia at exchange rates ruling at that date. All exchange rate differences are recognised in the income statement. The principal exchange rate used for each respective unit of foreign currency at balance sheet date is as follows: 2008 RM Hong Kong Dollar 0.418600 Korean Won 0.003117 Singapore Dollar 2.400600 Taiwan Dollar 0.107500 United States Dollar 3.265000


(c) Investments

Quoted investments are valued at the last done market price quoted on the respective stock exchanges as at balance sheet date. Collective investment schemes are valued based on the NAV per unit at the close of the balance sheet date. (d) Income Recognition

Dividend income is recognised on a declared basis, when the right to receive the dividend has been established. Interest income is recognised on an accrual basis. The realised gain/(loss) on sale of investments is measured as the difference between the net disposal proceeds and the carrying amount of the investments. The carrying amount of the investments for determining the realised gain/(loss) on sale of investments is based on the weighted average cost method. (e) Unrealised Reserve Unrealised reserve represents the net gain or loss arising from carrying investments at their market values or indicative market values and unrealised gains or loss from translating foreign currency monetary items at exchange rates prevailing at the balance sheet date. This reserve is not distributable in nature. (f) Distribution Equalisation Distribution equalisation is accounted for at the date of creation and cancellation of units. It represents the average amount of distributable income included in the creation and cancellation prices of units. (g) Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and deposits with licensed financial institutions, which have an insignificant risk of changes in value. (h) Receivables Receivables are carried at anticipated realisable values.


(i) Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. (j) Functional and Presentation Currency The financial statements of the Fund are measured using the currency of the primary economic environment in which the Fund operates (“the functional currency”). The financial statements are presented in Ringgit Malaysia (RM), which is also the Fund’s functional currency.

(k) Financial Instruments Financial assets and financial liabilities carried on the statement of assets and liabilities include cash at bank, quoted and unquoted securities, deposits with licensed financial institutions, receivables and payables. The accounting policies on the recognition and measurement of these items are disclosed in the respective accounting policies. Financial instruments are classified as assets or liabilities in accordance with the substance of the contractual arrangements. Interest, dividends, gains and losses relating to financial instruments classified as assets, are reported as investment income. Distributions to Unit Holders are recognised in NAV Attributable to Unit Holders’ fund in the financial period in which they are declared. 4. MANAGER’S FEE The Manager’s fee is computed on a daily basis at 1.50% per annum of the NAV of the Fund before deducting the Manager’s and Trustee’s fee for that particular day. 5. TRUSTEE’S FEE The Trustee’s fee is computed on a daily basis at 0.07% per annum of the NAV of the Fund, before deducting the Manager’s and Trustee’s fee for that particular day. 6. INCOME TAX EXPENSE 1/1/2008 to 1/1/2007 to 30/6/2008 30/6/2007 RM RM Malaysian income Tax 216,136 348,046 Foreign income tax 20,084 85,962 236,220 434,008


Income tax is calculated at the Malaysian statutory tax rate of 26% of the estimated assessable income for the financial period. The statutory tax rate will be reduced to 25% from the current year’s rate of 26%, effective year of assessment 2009. Income tax for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. The Malaysian tax charge for the financial period is in relation to the taxable income earned by the Fund after deducting tax allowable expenses. In accordance with Schedule 6 of the Income Tax Act 1967, interest income earned by the Fund is exempted from tax. A reconciliation of income tax expense applicable to net income before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Fund is as follows: 2008 2007 RM RM Net (loss)/income before tax (21,565,631) 40,224,068 Tax at Malaysian statutory tax rate of 26% (2007:

27%)

(5,607,064)

10,860,499 Effect of different tax rates in other countries (6,383) (27,799)Effect of interest on deposits and other income not

subject to tax (200,080)

(10,700,066)Losses not deductible for tax purposes 5,836,886 - Effect of expenses not deductible for tax purposes 14,105 19,735 Restriction on tax deductible expenses for unit trust

funds

198,756

281,639 Tax expense for the period 236,220 434,008 7. QUOTED INVESTMENTS – IN MALAYSIA

2008 2007 Quoted investments in Malaysia represent: RM RM Cost, at 30 June 2008/2007 55,734,163 65,952,260 Unrealised reserve: At 1 January 2008/2007 29,929,157 25,585,673 Changes during the period (28,153,412) 8,023,787 At 30 June 2008/2007 1,775,745 33,609,460 Market value, at 30 June 2008/2007 57,509,908 99,561,720


Quoted investments in Malaysia as at 30 June 2008 are as detailed below:

Name of Counter

Quantity

Cost RM

Market

Value RM

% of NAV

Main Board Construction IJM Corporation Bhd 110,000 781,769 605,000 0.57 Sunway Holdings Bhd 650,000 1,233,333 754,000 0.72 UEM Builders Bhd 2,384,200 4,110,497 3,027,934 2.88 6,125,599 4,386,934 4.17 Finance Allianz Malaysia Bhd 458,000 2,756,244 1,630,480 1.55 Bumiputra-Commerce

Holdings Bhd

133,100

491,438

1,064,800

1.01 Public Bank Bhd 340,000 1,684,971 3,536,000 3.36 4,932,653 6,231,280 5.92 Industrial Products Ann Joo Resources Bhd 743,500 893,439 2,840,170 2.70 KNM Group Bhd 427,700 934,637 2,715,895 2.58 Lingui Developments Bhd 558,300 1,518,675 843,033 0.80 Lion Industries Corporation

Bhd

400,000

1,142,237

1,044,000

0.99 Nylex Malaysia Bhd 1,028,400 1,751,924 1,336,920 1.27 Petronas Gas Bhd 397,400 3,581,695 3,954,130 3.76 Scomi Group Bhd 214,000 337,931 136,960 0.13 10,160,538 12,871,108 12.23 Plantation Asiatic Development Bhd 267,000 2,222,354 2,189,400 2.08 Boustead Holdings Bhd 345,000 801,327 1,880,250 1.79 IOI Corporation Bhd 305,900 2,244,169 2,278,955 2.17 Kuala Lumpur Kepong Bhd 122,700 2,116,852 2,159,520 2.05 7,384,702 8,508,125 8.09 Technology Green Packet Bhd 1,067,400 4,759,230 1,227,510 1.17 Trading/Services Astro All Asia Network Plc 920,000 3,518,956 3,128,000 2.97


Name of Counter

Quantity

Cost RM

Market Value

RM

% of NAV

Berjaya Sports Toto Bhd 679,100 2,065,026 3,300,426 3.14 Dialog Group Bhd 1,644,000 1,515,704 2,202,960 2.09 Genting Bhd 205,000 832,741 1,148,000 1.09 Malaysian Airline System

Bhd

552,200

2,151,792

1,711,820

1.63 MISC Bhd 276,400 1,627,459 2,280,300 2.17 Resorts World Bhd 885,000 2,142,198 2,301,000 2.19 Taliworks Corporation Bhd 1,532,600 3,542,642 3,601,610 3.42 Telekom Malaysia Bhd 202,000 619,833 642,360 0.61 Tenaga Nasional Bhd 334,500 2,759,782 2,726,175 2.59 TM International Bhd 202,000 1,595,308 1,242,300 1.18 22,371,441 24,284,951 23.08 TOTAL QUOTED INVESTMENTS 55,734,163 57,509,908 54.66 UNREALISED GAIN FROM

QUOTED INVESTMENTS IN MALAYSIA 1,775,745

8. QUOTED INVESTMENTS – OUTSIDE MALAYSIA

2008 2007 RM RM Quoted investments outside Malaysia represent: Cost, at 30 June 2008/2007 21,999,487 24,406,074 Unrealised reserve: At 1 January 2008/2007 8,136,676 11,836,264 Changes during the period (8,453,307) (1,764,926) At 30 June 2008/2007 (316,631) 10,071,338 Market value, at 30 June 2008/2007 21,682,856 34,477,412


Quoted investments outside Malaysia as at 30 June 2008 are as detailed below:

Name of Counter

Quantity

Cost RM

Market

Value RM

% of NAV

Quoted in: Hong Kong Construction China Railway Construction

Corporation - H

63,000

275,902

290,090

0.28 Consumer Products Beijing Enterprises Holdings

Ltd 67,000 992,596 715,178

0.68 Belle International Holdings

Ltd 25,000 67,792 73,464

0.07 Vietnam Manufacturing &

Export Production Holdings Ltd 961,000 1,563,428 643,639

0.61 2,623,816 1,432,281 1.36 Properties Beijing Capital Land Ltd 864,000 1,646,604 770,358 0.73 Cheung Kong Holdings Ltd 36,000 1,467,011 1,583,815 1.51 Sun Hung Kai Properties Ltd

10,000

650,548

442,879

0.42 3,764,163 2,797,052 2.66 Trading/Services Beijing Jingkelong Company

Ltd- H

450,000

1,207,465

960,687

0.91 China Mobile Ltd 43,000 973,076 1,886,379 1.79 China Telecom Corporation

Ltd

692,000

1,141,364

1,228,206

1.17 Petrochina Company Ltd- H 298,000 910,714 1,259,902 1.20 4,232,619 5,335,174 5.07 10,896,500 9,854,597 9.37 Quoted in : Korea Consumer Products Korea Tobacco & Ginseng

Corporation

5,942

898,355

1,666,909

1.58 898,355 1,666,909 1.58


Name of Counter

Quantity

Cost RM

Market

Value RM

% of NAV

Quoted in: Singapore Finance DBS Group Holdings Ltd 44,000 1,474,732 1,992,114 1.90 Industrial Products Midas Holdings Ltd 413,000 1,199,046 882,389 0.84 Sino Techfibre Ltd 419,000 1,344,200 568,306 0.54 2,543,246 1,450,695 1.38 Trading/Services SembCorp Industries Ltd 188,000 1,292,661 1,877,461 1.78 5,310,639 5,320,270 5.06 Quoted in: Taiwan Technology Hon Hai Precision Industry

Company Ltd

48,000

1,076,283

771,420

0.73 Taiwan Semiconductor

Manufacturing Company Ltd

207,845

1,378,122

1,452,317

1.38 Tripod Technology

Corporation Ltd

163,305

1,557,125

1,332,446

1.27 4,011,530 3,556,183 3.38 Trading/Services Delta Electronics

Incorporation

141,450

882,463

1,284,897

1.22 4,893,993 4,841,080 4.60 TOTAL QUOTED INVESTMENTS-

OUTSIDE MALAYSIA

21,999,487

21,682,856

20.61

UNREALISED LOSS FROM QUOTED INVESTMENTS- OUTSIDE MALAYSIA (316,631)


9. COLLECTIVE INVESTMENT SCHEMES – IN MALAYSIA

2008 2007 RM RM

Collective investment schemes in Malaysia represents:

Cost, at 30 June 2008/2007 5,607,658 929,962

Unrealised reserve: At 1 January 2008/2007 293,344 20,690 Changes during the period (133,078) 208,420 At 30 June 2008/2007 160,266 229,110

Market value, at 30 June 2008/2007 5,767,924 1,159,072

Collective investment in Malaysia as at 30 June 2008 are as detailed below:

Name of Counter

Quantity

Cost RM

Market

Value RM

% of NAV

Real Estate Investment Trust Tower Real Estate

Investment Trust

652,900

607,658

770,422

0.73 Collective Investment Schemes: OSK-UOB Institutional

Islamic Money Market Fund

4,997,501

5,000,000

4,997,502

4.75 TOTAL COLLECTIVE

INVESTMENT SCHEMES

5,607,658

5,767,924

5.48 UNREALISED GAIN FROM

COLLECTIVE INVESTMENT SCHEMES IN MALAYSIA 160,266


10. DEPOSITS WITH LICENSED FINANCIAL INSTITUTIONS

These are short-term placements with licensed investment banks. Included in short-term placements with licensed investment banks is an amount of RM3,348,205 (2007: RM3,545,235) placed with OSK Investment Bank, the holding company of OSK-UOB Unit Trust Management Bhd, the Manager. The weighted average effective interest rates and weighted average maturities of deposit remaining as at 30 June were as follows: Weighted Average

Effective Interest Rates Per Annum

Weighted Average Maturities of Deposit

Remaining 2008 2007 2008 2007 % % Days Days

Short term placements 3.37 3.35 1 2 11. NAV ATTRIBUTABLE TO UNIT HOLDERS NAV attributable to Unit Holders is represented by: Note 2008 2007 RM RM

Unit Holders’ contribution (a) 37,942,835 42,138,166 Realised reserve (b) 66,398,946 61,569,196 Unrealised reserve (c) 871,948 43,328,396 UNIT HOLDERS’ FUNDS 105,213,729 147,035,758


(a) Unit Holders’ Contribution 2008 2007

No. of units RM No. of units RM As at 1 January

2008/2007 145,324,000 24,513,435 230,634,000 100,597,803 Creation of units 2,139,794 7,287,513 253,734 1,193,947 Reinvestment of

units

24,885,206

18,330,443

11,901,266

8,764,092 172,349,000 50,131,391 242,789,000 110,555,842 Cancellation of

units (15,667,000) (12,188,556)

(79,795,000)

(68,417,676) As at 30 June

2008/2007 156,682,000 37,942,835 162,994,000 42,138,166 The maximum number of units that can be issued for circulation is 750,000,000 (2007: 750,000,000). As at 30 June 2008 the number of units yet to be issued is 593,318,000 (2007: 587,006,000). (b) Realised Reserve 2008 2007 RM RM RM RM

Balance as at 1 January 2008/2007

56,371,194

23,110,133

Net unrealised gain

attributable to investments sold transferred from unrealised reserve 19,890,715 21,108,168

Net unrealised foreign

exchange loss attributable to foreign currency monetary items transferred from unrealised reserve

(558,605)

(569,343)


2008 2007 RM RM RM RM Net (loss)/income after

tax

(21,801,851)

39,790,060

Distribution

equalisation

(4,903,694)

5,020,523

Net unrealised foreign

exchange (gain)/loss attributable to foreign currency monetary items transferred to unrealised reserve (47,974) 887,886

Net unrealised

loss/(gain) attributable to investments held transferred to unrealised reserve 17,449,161 (27,778,231)

Net (decrease)/increase

in realised reserve for the period (9,304,358) 17,920,238

Balance as at 30 June

2008/2007 66,398,946 61,569,196


(c) Unrealised Reserve 2008 2007 RM RM Balance as at 1 January 2008/2007 37,605,245 36,976,876 Net unrealised (loss)/gain attributable to investments

held transferred from realised reserve (17,449,161)

27,778,231 Net unrealised foreign exchange gain/(loss)

attributable to foreign currency monetary items transferred from realised reserve

47,974

(887,886) Net unrealised gain attributable to investments sold

transferred to realised reserve (19,890,715)

(21,108,168) Net unrealised foreign exchange loss attributable to

foreign currency monetary items transferred to realised reserve

558,605

569,343 Balance as at 30 June 2008/2007 871,948 43,328,396

The unrealised reserve represents the net gain/(loss) arising from stating investments at their fair values and translating foreign currency monetary items at exchange rates prevailing at the balance sheet date. This reserve is not distributable in nature. 12. UNITS HELD BY RELATED PARTIES

2008 2007 No. of units Valued at

NAV No. of

units Valued at

NAV RM RM Manager 87,852 # 58,993 275,808 # 248,806 Director of Manager:

- Dato’ Nik Mohamed Bin Nik Yahya

-

-

7,436 #

6,708

# The Manager and the Director are the legal and beneficial owners of the units.


13. TRANSACTIONS WITH RELATED PARTY AND OTHER STOCKBROKING COMPANIES

Details of transactions with related party and other stockbroking companies for the financial period from 1 January 2008 to 30 June 2008 are as follows:

Value of Trade

% of Total

Trade

Brokerage

Fees

% of Total Brokerage

Fees RM % RM % OSK Investment Bank

Bhd*

25,315,902

33.07

75,948

36.10 CIMB Investment Bank

Bhd

11,878,907

15.53

35,637

16.94 Macquarie Capital

Securities Ltd

8,139,167

10.64

25,035

11.90 AmInvestment Bank Bhd 6,427,512 8.40 19,282 9.17 Kenanga Investment Bank

Bhd

5,878,412

7.69

17,635

8.38 OSK-UOB Unit Trust

Management Bhd**

5,000,000

6.54

-

- Aseambankers Malaysia

Bhd

3,606,777

4.72

10,820

5.14 Credit Suisse Securities

(M) Sdn Bhd

2,569,803

3.36

1,799

0.86 J.P.Morgan Securities (S)

Pte Ltd

2,327,199

3.04

5,818

2.77 Goldman Sachs

(Singapore) Pte Ltd

1,998,926

2.61

7,559

3.59 Deutsche Securities Asia

Ltd

1,231,321

1.61

4,416

2.10 HLG Securities Sdn Bhd 1,006,037 1.32 3,018 1.43 TA Securities Holdings

Bhd

554,000

0.73

1,662

0.79 Merrill Lynch (HK) Pte

Ltd

462,544

0.61

1,619

0.77 DMG & Partners

Securities Pte Ltd*

95,797

0.13

144

0.06 76,492,304 100.00 210,392 100.00

* OSK Investment Bank Bhd is the holding company of OSK-UOB Unit Trust

Management Bhd, the Manager while DMG & Partners Securities Pte Ltd is a related company.


** OSK-UOB Unit Trust Management Bhd is the Manager of OSK-UOB Institutional Islamic Money Market Fund, a collective investment scheme that the Fund invested in during the financial period under review.

The directors of the Manager are of the opinion that the transactions with the related parties have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties. These dealings with the related parties have been transacted at arm’s length basis. 14. PORTFOLIO TURNOVER RATIO (“PTR”) The PTR of the Fund is the ratio of the average acquisitions and disposals of the Fund for the financial period to the average NAV of the Fund calculated on a daily basis. For the financial period from 1 January 2008 to 30 June 2008, the PTR of the Fund stood at 0.37 times (2007: 0.60 times). The PTR of the Fund is calculated as follows: RM Total acquisitions of the Fund 32,610,596 Total disposals of the Fund 51,862,569 PTR = (Total Acquisitions + Total Disposals)/2 Average NAV of Fund = (RM84,473,165)/2 RM113,577,517 = 0.37 times

The average NAV of the Fund for the financial period from 1 January 2008 to 30 June 2008 was RM113,577,517 (2007: RM154,530,800). 15. MANAGEMENT EXPENSE RATIO (“MER”) The MER of the Fund is the ratio of the sum of fees and expenses incurred by the Fund to the average NAV of the Fund calculated on a daily basis. The fees and expenses include Manager’s fee, Trustee’s fee, auditors’ remuneration, tax agent’s fee and other administrative expenses. For the financial period from 1 January 2008 to 30 June 2008, the MER of the Fund stood at 0.80% (2007: 0.80%) and is calculated as follows:


RM A = Manager’s fee 843,932 B = Trustee’s fee 39,537 C = Auditors’ remuneration 1,500 D = Tax agent’s fee 1,200 E = Administrative expenses 16,992 F = Average NAV of the Fund 113,577,517 MER = (A + B + C + D + E) x 100 F = RM903,161 x 100 RM113,577,517 = 0.80%

The average NAV of the Fund for the financial period from 1 January 2008 to 30 June 2008 was RM113,577,517 (2007: RM154,530,800). 16. SEGMENTAL REPORTING The primary segment reporting format is determined to be geographical segments as the Fund’s risks and rates of return are affected predominantly by the countries/regions in which the Fund invests in. Secondary information is reported by business segments representing the different instruments in which the Fund invests in. a) Geographical Segments The following table provides an analysis of the Fund’s revenue, results, assets and liabilities by geographical segments:


Hong Kong

Malaysia

Singapore

Other countries

Total

RM RM RM RM RM 2008 Revenue Segment loss

representing segment results

(5,302,352)

(11,262,333)

(1,509,514)

(2,588,271)

(20,662,470)Unallocated

expenditure

(903,161)Net loss

before tax

(21,565,631)Income tax

expenses

(236,220)Net loss after

tax

(21,801,851) Assets Investments 9,854,597 75,792,555 5,320,270 6,507,989 97,475,411 Other assets 60,193 243,599 - 8,116,790 8,420,582 Unallocated

assets

234,553 Total Assets 106,130,546 Liabilities Unallocated

liabilities

916,817


Hong Kong

Malaysia

Singapore

Other countries

Total

RM RM RM RM RM 2007 Revenue Segment

income representing segment results

1,359,527

38,048,469

3,723,980

(1,676,475)

41,455,501 Unallocated

expenditure

(1,231,433)Net income

before tax

40,224,068 Income tax

expenses

(434,008)Net income

after tax

39,790,060 Assets Investments 12,423,989 107,917,159 9,844,109 12,209,314 142,394,571 Others Assets 97,534 1,552,858 130,238 6,492,953 8,273,583 Unallocated

assets

1,018,783 Total Assets 151,686,937 Liabilities Unallocated

liabilities

4,651,179 b) Business Segments The following table provides an analysis of the Fund’s revenue and assets by business segments: Segment Segment revenue assets RM RM 2008 Quoted securities (20,981,777) 80,338,995 Collective investment schemes 72,488 5,767,924 Cash and deposits 246,819 20,023,627 (20,662,470) 106,130,546


Segment Segment revenue assets RM RM 2007 Quoted securities 41,147,652 135,890,324 Collective investment schemes 203,503 1,159,072 Cash and deposits 104,346 14,637,541 41,455,501 151,686,937


CORPORATE INFORMATION

MANAGER OSK-UOB UNIT TRUST MANAGEMENT BHD REGISTERED & 5th Floor, Plaza OSK PRINCIPAL OFFICE Jalan Ampang 50450 Kuala Lumpur E-mail: [email protected] Website: www.oskuob.com.my Tel: 03-2164 3036 Fax: 03-2164 4226 BRANCHES 1. PENANG 20-E, Penang Street

10200 Penang Tel: 04-264 5639 Fax: 04-264 5640 2. BUTTERWORTH 2677, Jalan Chain Ferry Taman Inderawasih 13600 Prai

Penang Tel: 04-397 3811 Fax: 04-390 1812

3. IPOH 3rd Floor, 21- 25, Jalan Seenivasagam Greentown 30450 Ipoh Perak Tel: 05-242 4311 Fax: 05-242 4312 4. KUANTAN B32-34, 2nd Floor Lorong Tun Ismail 8, Sri Dagangan II 25000 Kuantan Pahang Tel: 09-517 3611 Fax: 09-517 3612 5. MELAKA 582, Taman Melaka Raya 75000 Melaka Tel: 06-284 4211 Fax: 06-292 2212 6. BATU PAHAT 53, 53A & 53B Jalan Sultanah 83000 Batu Pahat Johor Tel: 07-438 0271 Fax: 07-438 0277


7. JOHOR BAHRU Tingkat 6, Wisma Tiong-Hua 8, Jalan Keris, Taman Sri Tebrau 80050 Johor Bahru Johor Tel: 07-278 8931 Fax: 07-278 8930 8. KOTA KINABALU Tingkat 5, Wisma BSN Sabah Jalan Kemajuan, Karamunsing 88000 Kota Kinabalu Sabah Tel: 088-248 211 Fax: 088-232 312 9. KUCHING Lot282, 1st Floor Jalan Ban Hock 93100 Kuching Sarawak Tel: 082-245 611 Fax: 082-242 712 10. SIBU 101 & 102, 2nd Floor Pusat Pedada Jalan Pedada 96000 Sibu, Sarawak Tel: 084-317 028 Fax: 084-334 100 11. MIRI Lot 1268, First Floor Centre Point Commercial Centre Jalan Melayu 98000 Miri Sarawak Tel: 085-422 788 Fax: 085-415 243 12. KOTA BHARU 1st Floor, No.3953-J Jalan Kebun Sultan 15350 Kota Bharu Kelantan Tel: 09-741 8539 Fax: 09-741 8540 13. PETALING JAYA 32A, Jalan SS2/63 47300 Petaling Jaya Selangor Tel: 03-7877 3733 Fax: 03-7877 8733


BOARD OF DIRECTORS Dato’ Nik Mohamed Bin Nik Yahya (Independent) Ms Eliza Ong Yin Suen Mr Ho Seng Yee

Mr Thio Boon Kiat Ms Lim Suet Ling (Alternate Director to Mr Thio Boon Kiat)

Dr Choong Tuck Yew (Independent) Encik Izlan Bin Izhab (Independent)

EXTERNAL INVESTMENT MANAGER UOB Asset Management Ltd, Singapore

TRUSTEE HSBC (Malaysia) Trustee Bhd SECRETARIES Ms Wong Wei Fong (MAICSA 7006751) Ms Lim Lee Kuan (MAICSA 7017753) PRINCIPAL BANKER United Overseas Bank (Malaysia) Bhd AUDITORS Ernst & Young TAX ADVISERS KPMG Tax Services Sdn Bhd DISTRIBUTORS Affin Bank Bhd Tel: 03-2055 9000 Alliance Bank Malaysia Bhd Tel: 03-2730 2844 AmBank (M) Bhd Tel:03-2167 3000 AmInvestment Bank Bhd Tel: 03-2078 2633 Apex Investment Services Bhd Tel:03-2693 2789 Citibank Bhd Tel: 03-2383 8833


DISTRIBUTORS CIMB Investment Bank Bhd Tel: 03-2723 8688

CIMB Bank Bhd (Please contact the nearest branch)

CIMB Wealth Advisors Bhd Tel: 03-7718 3000 EON Bank Bhd Tel:03-2612 8888 Hong Leong Bank Bhd Tel: 1-800-388-888 OCBC Bank (Malaysia) Bhd Tel: 1-300-88-5000 OSK Investment Bank Bhd Tel: 03-2333 8228 RHB Bank Bhd Tel: 03-9206 8118

Standard Chartered Bank Malaysia Bhd

Tel: 03-2117 7777 The Royal Bank of Scotland Bhd Tel:03-2160 9888 United Overseas Bank (Malaysia) Bhd Tel: 03-2772 6868 OSK-UOB Unit Trust Consultants Tel: 03-2171 2755

interim 2008 osk-uob equity trust unaudited interim … · allocation and stock specific selection....

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