MAY PRINCIPAL ISLAMIC MONEY MARKET FUND

Principal IslamicMoney Market FundInterim Report

For The Six Months Financial Period Ended 31 May 2021

PRINCIPAL ISLAMIC MONEY MARKET FUND INTERIM REPORT FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 MAY 2021

PRINCIPAL ISLAMIC MONEY MARKET FUND

CONTENTS PAGE(S)

INVESTORS’ LETTER 1

MANAGER’S REPORT 2 - 7

Fund Objective and Policy

Performance Data

Market Review

Fund Performance

Portfolio Structure

Market Outlook

Investment Strategy

Unit Holdings Statistics

Soft Commissions and Rebates

STATEMENT BY MANAGER 8

TRUSTEE REPORT 9

SHARIAH ADVISER’S REPORT 10

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME 11

UNAUDITED STATEMENT OF FINANCIAL POSITION 12

UNAUDITED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO

UNIT HOLDERS 13

UNAUDITED STATEMENT OF CASH FLOWS 14

NOTES TO THE FINANCIAL STATEMENTS 15 - 38

DIRECTORY 39


1

INVESTORS’ LETTER Dear Valued Investor,

The global equity markets maintained its uptrend in May despite continued volatility arising from

concerns of potentially higher inflation and policy changes. Equity markets with the highest return were

in Asia, led by India at 6.5%, and the Shanghai Composite at 4.9%, followed by the STOXX Europe 600

at 2.1%. The bond indices gained more grounds in May 2021, after the turnaround in April 2021, with

growth of 0.7% to 1.1%.

Our investment team continue to do their best to make the right decisions to maximise fund returns to

help you meet your long-term investment needs. We are positive on Asian equities on a long-term basis

and have added more ASEAN names on anticipation of a broader recovery which would be enhanced

by the greater availability of Coronavirus Disease 2019 (COVID-19) vaccines.

We are pleased to share that we have won awards for Best Online & Mobile Platform (Asset Manager), Best Fund with the optimal Sharpe ratio and Best Fund Manager for Pension Mandates & Private Retirement Schemes at Alpha Southeast Asia’s 12th Fund Management Awards 2021. Continue to log on to our website (www.principal.com.my), like our Facebook page (@PrincipalAssetMY) and follow us on our latest social media asset, our Instagram account (principalassetmanagement_my) to receive updates on our latest market commentary and insights as well as investing articles. We appreciate your continuous support and the trust you place in us.

Please be informed that effective 1 July 2021, the Fund has appointed HSBC (Malaysia) Trustee Berhad as the trustee of the fund following the issuance of the Replacement Prospectus Issue No. 11. Yours faithfully, for Principal Asset Management Berhad Munirah Khairuddin Chief Executive Officer


2

MANAGER’S REPORT FUND OBJECTIVE AND POLICY What is the investment objective of the Fund? The Fund aims to provide investors with liquidity and regular income, whilst maintaining capital stability by investing primarily in money market instruments that conform with Shariah principles. Has the Fund achieved its objective? For the financial period under review, the Fund is in line with its stated objective. What are the Fund investment policy and principal investment strategy? The Fund will place at least 90% of its Net Asset Value (“NAV”) in Islamic money market instruments such as Islamic Accepted Bills, Islamic Negotiable Instruments of Deposits and Islamic Repurchase Agreements (“Repo-i”) as well as in any other Islamic fixed income instruments and placements of Islamic Deposits, all of which are highly liquid and have a remaining maturity period of less than 365 days. Up to 10% of the Fund’s NAV may be invested in Islamic fixed income instruments, which have a remaining maturity period of more than 365 days but less than 732 days. The Fund will be actively managed with frequency that will depend on the market conditions and market outlook. The strategy is to invest in liquid and low risk short-term investments for capital preservation*. The investment strategy adheres to the Guidelines of Unit Trust Funds (“GUTF”) pertaining to investments for a money market fund. The asset allocation strategy for this Fund is as follows:

• at least 90% of the Fund’s NAV will be invested in Islamic money market instruments and/or Islamic Deposits; and

• up to 10% of the Fund’s NAV may be invested in Islamic fixed income instruments, which have a remaining maturity period of more than 365 days but less than 732 days.

Note: *The Fund is neither a capital guaranteed fund nor a capital protected fund.

Fund category/type Money Market (Islamic)/Income When was the Fund launched? 17 March 2008 What was the size of the Fund as at 31 May 2021? RM1,425.34 million (1,331.48 million units) What is the Fund’s benchmark? CIMB Islamic 1-Month Fixed Return Income Account-i (“FRIA-i”) Note: The Fund’s benchmark is for performance comparison only. The benchmark is reflective of the objective of the Fund. Thus, you are cautioned that the risk profile of the Fund is higher than the benchmark.

What is the Fund distribution policy? Monthly, depending on the level of income (if any) the Fund generates. What was the net income distribution for the six months financial period ended 31 May 2021? The Fund distributed a total net income of RM21.16 million to unit holders for the six months financial period ended 31 May 2021.


3

FUND OBJECTIVE AND POLICY (CONTINUED) The Fund’s NAV per unit were as follows:

Date NAV per unit

(before distribution) NAV per unit

(after distribution)

RM RM

31.12.2020 1.0789 1.0751

29.01.2021 1.0767 1.0741

26.02.2021 1.0757 1.0730

31.03.2021 1.0737 1.0714

30.04.2021 1.0736 1.0711

31.05.2021 1.0732 1.0704 PERFORMANCE DATA Details of portfolio composition of the Fund for the last three unaudited financial periods were as follows:

31.05.2021 31.05.2020 31.05.2019

% % %

Unquoted Sukuk and Islamic Commercial Papers 86.04 47.42 71.34 Shariah-compliant deposits with licensed Islamic financial institutions 9.55 33.19 -

Cash and other assets 4.48 19.57 31.63

Liabilities (0.07) (0.18) (2.97)

100.00 100.00 100.00

Performance details of the Fund for the last three unaudited financial periods were as follows:

31.05.2021 31.05.2020 31.05.2019

NAV (RM Million)* 1,425.34 992.01 1,065.88

Units in circulation (Million) 1,331.48 916.12 987.48

NAV per unit (RM)* 1.0704 1.0828 1.0793

*Ex-distribution

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020 01.12.2018

to 31.05.2019

Highest NAV per unit (RM) 1.0789 1.0854 1.0827

Lowest NAV per unit (RM) 1.0704 1.0819 1.0782

Total return (%) 0.93 1.57 1.84

- Capital growth (%) (0.64) 0.01 0.10

- Income distribution (%) 1.58 1.56 1.74

Management Expense Ratio (“MER”) (%) ^ 0.26 0.27 0.27

Portfolio Turnover Ratio (“PTR”) (times) # 0.51 0.47 0.52 ^ The Fund’s MER has decreased from 0.27% to 0.26% due to the increase in average NAV during the

financial period.

# The Fund’s PTR for the financial period under review increased from 0.47 times to 0.51 times compared to the previous year’s corresponding period due to the increased number of transactions.


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PERFORMANCE DATA (CONTINUED)

01.12.2020 to 31.05.2021

01.12.2019 to 31.05.2020

01.12.2018 to 31.05.2019

Date of distribution Gross/Net distribution per unit (sen) Distribution on 31 December 2020 0.39 - - Distribution on 29 January 2021 0.26 - - Distribution on 26 February 2021 0.27 - - Distribution on 31 March 2021 0.24 - - Distribution on 30 April 2021 0.26 - - Distribution on 31 May 2021 0.28 - - Distribution on 31 December 2019 - 0.30 - Distribution on 31 January 2020 - 0.31 - Distribution on 28 February 2020 - 0.30 - Distribution on 31 March 2020 - 0.26 - Distribution on 30 April 2020 - 0.29 - Distribution on 29 May 2020 - 0.22 - Distribution on 31 December 2018 - - 0.20 Distribution on 31 January 2019 - - 0.33 Distribution on 28 February 2019 - - 0.35 Distribution on 29 March 2019 - - 0.39 Distribution on 30 April 2019 - - 0.27 Distribution on 31 May 2019 - - 0.31

31.05.2021 31.05.2020 31.05.2019 31.05.2018 31.05.2017

% % % % %

Annual total return 2.00 3.21 3.87 3.53 3.58 (Launch date: 17 March 2008) Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up. All performance figures for the financial period have been extracted from Lipper.

MARKET REVIEW (1 DECEMBER 2020 TO 31 MAY 2021) Malaysia’s fourth quarter of 2020 real Gross Domestic Product (“GDP”) shrank by -3.4% year-on-year (“y-o-y”) Third quarter of 2020: -2.6% y-o-y and -0.3% seasonally-adjusted quarter-on-quarter (“q-o-q”) Third quarter of 2020: +18.2% q-o-q, as the Second Conditional Movement Control Order (“CMCO 2.0”) came into effect in mid-October 2020. The biggest impact were seen in the services -4.9% y-o-y; third quarter of 2020: -4.0% y-o-y, mining -10.6% y-o-y; third quarter of 2020: -6.8% y-o-y, agriculture -0.7% y-o-y; third quarter of 2020: -0.5% y-o-y and construction -13.9% y-o-y; third quarter of 2020: -12.4% y-o-y sectors. For Financial Year 2020, real GDP contracted by -5.6%. The 2021 year began with two major announcements, i.e. the Second Movement Control Order (“MCO 2.0”) and the State of Emergency (“SoE”). The entire country was placed under MCO 2.0 (except Sarawak) up until 4 March 2021. The MCO 2.0 is deemed to be less restrictive vis-à-vis First MCO (“MCO 1.0”), as more industries and businesses are allowed to operate in the current environment. Meanwhile, the Palace issued the SoE proclamation to suspend Parliament and State Legislative Assemblies (including elections) until 1 August 2021. The Government unveiled Perlindungan Eknonomi & Rakyat Malaysia (“PERMAI”) on 18 January 2021, its 5th economic stimulus package to date worth RM15 billion spread over 22 initiatives aimed at safeguarding the welfare of the people and supporting business continuity following the implementation of MCO 2.0.


5

MARKET REVIEW (1 DECEMBER 2020 TO 31 MAY 2021) (CONTINUED) On 17 March 2021, Prime Minister announced a RM20 billion stimulus package of which RM11 billion will be a one-off direct fiscal spending to be funded by domestic borrowing. Official guidance of deficit ratio for 2021 is revised to 6.0% versus 5.4% under Budget 2021. Ministry of Finance expects the statutory debt ratio, which includes only Malaysian Government Securities (“MGS”), Government Investment Issue (“GII”) and Malaysian Islamic Treasury Bills (“MITB”) (excluding Sukuk Perumahan Kerajaan (“SPK”), Malaysian Treasury Bills and foreign currency debts) to be at 58.5% of GDP in 2021, which is below the limit of 60%. On overall Government debt ratio, the ratio is estimated to be at 62.2% at end 2021. Bank Negara Malaysia (“BNM”) has maintained the Overnight Policy Rate (“OPR”) at 1.75% throughout all of its meetings in 2021 to date. The Central Bank continued to mention that the overall outlook locally and globally remains subject to downside risks, primarily if there is a further resurgence of COVID-19 cases. FUND PERFORMANCE

As at 31 May 2021, the total return for 6 months, 1 year, 3 years, and 5 years stood at 0.93%, 2.00%, 9.34% and 17.25% respectively, which outperformed the benchmark of 0.77%, 1.68%, 7.97% and 14.61% for the respective periods. Since inception, the Fund achieved a total return of 48.55% beating the benchmark returns of 42.21%.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Principal Islamic Money Market Fund

CIMB Islamic 1-Month FRIA-i

6 months

to 31.05.2021 1 year

to 31.05.2021 3 years

to 31.05.2021 5 years

to 31.05.2021

Since inception

to 31.05.2021 % % % % %

Income Distribution 1.58 3.16 9.96 18.15 38.76 Capital Growth (0.64) (1.14) (0.57) (0.76) 7.05 Total Return 0.93 2.00 9.34 17.25 48.55 Benchmark 0.77 1.68 7.97 14.61 42.21 Average Total Return N/A 2.00 3.02 3.23 3.04


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FUND PERFORMANCE (CONTINUED) Changes in NAV

31.05.2021 30.11.2020 Changes

Audited %

NAV (RM Million)* 1,425.34 1,269.51 12.27

NAV/Unit (RM)* 1.0704 1.0774 (0.65) *Ex-distribution The Fund’s NAV as at 31 May 2021 increased by 12.27% to RM1,425.34 million from RM1,269.51 million on 30 November 2020. Meanwhile, the NAV per unit decreased slightly by 0.65% from RM1.0774 per unit to RM1.0704 per unit. Performance data represents the combined income and capital return as a result of holding units in the Fund for the specified length of time, based on NAV to NAV price. The performance data assumes that all earnings from the Fund are reinvested and are net of management and trustee fees. Past performance is not reflective of future performance and income distributions are not guaranteed. Unit prices and income distributions, if any, may fall and rise. All performance figures for the financial period have been extracted from Lipper.

PORTFOLIO STRUCTURE Asset allocation

(% of NAV) 31.05.2021 30.11.2020 Audited

Unquoted Sukuk and Islamic Commercial Papers 86.04 61.80

Shariah-compliant deposits with licensed Islamic financial institutions 9.55 27.74

Cash and other assets 4.48 10.58

Liabilities (0.07) (0.12)

TOTAL 100.00 100.00

As at 31 May 2021, the Fund was 86.04% invested in unquoted Sukuk and Islamic Commercial Papers, with the remaining 13.96% in Shariah-compliant deposits, cash and other net assets. The increase in unquoted Sukuk and Islamic Commercial Papers is mainly attributed to the more attractive yields generated by these papers vis-à-vis deposits. MARKET OUTLOOK* Malaysia’s first quarter of 2021 GDP rebounded 2.7% q-o-q or -0.5% y-o-y primarily driven by stronger exports, global demand recovery and tech upcycle. Recent trade data in April 2021 continue to see exports to grow – at 63% y-o-y – confirming our thesis that a strong global demand recovery will eventually benefit export-oriented country like Malaysia. However, surging COVID-19 cases has prompted the Malaysian government to announce a two-weeks lockdown from 1 June 2021. At the time of writing, the lockdown has been extended further to 28 June 2021. While the Ministry of Finance has not officially guided a new GDP forecast taking into the consideration of the lockdown impact, most business economists are downgrading growth by 0.5% to 1.5% for 2021 (forecast range from 4.4% to 5.4% for 2021). Prime Minister Muhyiddin Yassin acknowledged that there is limited fiscal space to stimulate the economy.


7

MARKET OUTLOOK* (CONTINUED) BNM kept OPR unchanged in the May-2021 meeting, with assessment of overall growth trajectory, current policy stance, and outlook for policy broadly similar to March-2021. However, with pandemic-related headwinds stronger than initial assumptions, policy action may be required in the next meeting. We believe that BNM is likely to keep its OPR at 1.75% for the time being as they deem the current monetary policies to be accommodative to support the recovery. *This market outlook does not constitute an offer, invitation, commitment, advice or recommendation to make a purchase of any investment. The information given in this article represents the views of Principal Asset Management Berhad (“Principal Malaysia”) or based on data obtained from sources believed to be reliable by Principal Malaysia. Whilst every care has been taken in preparing this, Principal Malaysia makes no guarantee, representation or warranty and is under no circumstances liable for any loss or damage caused by reliance on, any opinion, advice or statement made in this market outlook.

INVESTMENT STRATEGY We continue to overweight on quality short term Sukuk papers as well as Islamic Commercial Papers issued by corporates with strong fundamentals. UNIT HOLDINGS STATISTICS Breakdown of unit holdings by size as at 31 May 2021 were as follows:

Size of unit holdings (units) No. of unit holders No. of units held (million)

% of units held

5,000 and below 31 0.05 0.00*

5,001-10,000 132 1.04 0.08

10,001- 50,000 1,245 30.60 2.30

50,001- 500,000 501 56.80 4.27

500,001 and above 35 1,242.99 93.35

Total 1,944 1,331.48 100.00

Note: 0.00* denotes percentage less than 0.01%.

SOFT COMMISSIONS AND REBATES Principal Asset Management Berhad and the Trustee will not retain any form of rebate or soft commission from, or otherwise share in any commission with, any broker in consideration for directing dealings in the investments of the Principal Malaysia Funds (“Funds”) unless the soft commission received is retained in the form of goods and services such as financial wire services and stock quotations system incidental to investment management of the Funds. All dealings with brokers are executed on best available terms. During the financial period under review, the Manager and the Trustee did not receive any rebates from the brokers or dealers but the Manager has retained soft commission in the form of goods and services such as financial wire services and stock quotations system incidental to investment management of the Funds.


8

STATEMENT BY MANAGER TO THE UNIT HOLDERS OF PRINCIPAL ISLAMIC MONEY MARKET FUND We, being the Directors of Principal Asset Management Berhad (the “Manager”), do hereby state that, in the opinion of the Manager, the accompanying unaudited financial statements set out on pages 11 to 38 are drawn up in accordance with the provisions of the Deeds and give a true and fair view of the financial position of the Fund as at 31 May 2021 of its financial performance, changes in net assets attributable to unit holders and cash flows for the financial period then ended in accordance with Malaysian Financial Reporting Standards (“MFRS”) 134 - Interim Financial Reporting and International Accounting Standards (“IAS”) 34 - Interim Financial Reporting. For and on behalf of the Manager Principal Asset Management Berhad (Company No.: 199401018399 (304078-K)) MUNIRAH KHAIRUDDIN JUAN IGNACIO EYZAGUIRRE BARAONA Chief Executive Officer/Executive Director Director Kuala Lumpur 12 July 2021


9

TRUSTEE REPORT TO THE UNIT HOLDERS OF PRINCIPAL ISLAMIC MONEY MARKET FUND We, MTrustee Berhad, being the Trustee of Principal Islamic Money Market Fund (the “Fund”), are of the opinion that Principal Asset Management Berhad (the “Manager”), has managed the Fund for the six months financial period ended 31 May 2021 in accordance with the following: (a) limitations imposed on the investment powers of the Manager under the Deeds, the Securities

Commission Malaysia’s Guidelines on the Unit Trust Funds, the Capital Markets and Services Act 2007 and other applicable laws;

(b) valuation/pricing is carried out in accordance with the Deeds and relevant regulatory

requirements; (c) creation and cancellation of units is carried out in accordance with the Deeds and relevant

regulatory requirements; and (d) during the financial period, a total distribution of 1.70 sen per unit (gross) has been distributed

to the unit holders of the Fund. We are of the view that the distribution is consistent with the objective of the Fund.

For and on behalf of the Trustee MTrustee Berhad NURIZAN JALIL Chief Executive Officer Selangor 12 July 2021


10

SHARIAH ADVISER’S REPORT To the Unit Holders of Principal Islamic Money Market Fund (“Fund”) For the Financial Period Ended 31 May 2021 1. To the best of our knowledge, after having made all reasonable enquiries, Principal Asset

Management Berhad has operated and managed the Fund during the period covered by these financial statements in accordance with the Shariah principles and complied with the applicable guidelines, rulings or decisions issued by the Securities Commission Malaysia (“SC”) pertaining to Shariah matters; and

2. The asset of the Fund comprises of instruments that have been classified as Shariah compliant. For Amanie Advisors Sdn Bhd Datuk Dr Mohd Daud Bakar Executive Chairman Kuala Lumpur 12 July 2021


11

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 MAY 2021

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020

Note RM RM

INCOME Profit income from unquoted Sukuk and Islamic Commercial Papers 12,161,479 9,216,113 Profit income from Shariah-compliant deposits with

licensed Islamic financial Institutions at amortised cost and Hibah earned 4,046,221 7,557,336

Net (loss)/gain on financial assets at fair value through profit or loss 8 (283,288) 954,974

15,924,412 17,728,423

EXPENSES

Management fee 4 3,331,946 2,418,871

Trustee fee 5 143,824 145,132

Audit fee 4,200 8,000

Tax agent’s fee 1,300 3,300

Other expenses 5,472 5,449

3,486,742 2,580,752

PROFIT BEFORE TAXATION 12,437,670 15,147,671

Taxation 7 - -

PROFIT AFTER TAXATION, REPRESENTING

TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD 12,437,670 15,147,671

Profit after taxation is made up as follows:

Realised amount 12,291,116 14,968,584

Unrealised amount 146,554 179,087

12,437,670 15,147,671

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


12

UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2021

31.05.2021 30.11.2020

Audited

Note RM RM

ASSETS

Cash and cash equivalents 9 62,781,498 133,916,836 Shariah-compliant deposits with licensed Islamic financial institutions at amortised cost 136,085,308 352,194,877

Financial assets at fair value through profit or loss 8 1,226,354,809 784,537,879

Amount due from Manager 1,051,443 375,000

TOTAL ASSETS 1,426,273,058 1,271,024,592

LIABILITIES

Amount due to Manager 287,093 949,662

Accrued management fee 604,478 521,065

Amount due to Trustee 24,179 31,264

Distribution payable 1,194 1,436

Other payables and accruals 17,202 13,400

TOTAL LIABILITIES 934,146 1,516,827

NET ASSET VALUE OF THE FUND 1,425,338,912 1,269,507,765

NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS 10 1,425,338,912 1,269,507,765

NUMBER OF UNITS IN CIRCULATION (UNITS) 11 1,331,479,467 1,178,289,465

NET ASSET VALUE PER UNIT (RM) (EX-DISTRIBUTION) 1.0704 1.0774



13

UNAUDITED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 MAY 2021

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020

Note NET ASSETS ATTRIBUTABLE TO UNIT

HOLDERS AT THE BEGINNING OF THE FINANCIAL PERIOD 1,269,507,765 1,003,628,307

Movement due to units created and cancelled during

the financial period:

- Creation of units from applications 403,422,289 258,959,466

- Creation of units from distributions 18,942,618 14,885,382

- Cancellation of units (257,808,573) (285,533,748)

164,556,334 (11,688,900)

Total comprehensive income for the financial period 12,437,670 15,147,671

Distributions 6 (21,162,857) (15,077,917)

NET ASSETS ATTRIBUTABLE TO UNIT

HOLDERS AT THE END OF THE FINANCIAL PERIOD 10 1,425,338,912 992,009,161



14

UNAUDITED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 MAY 2021

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020

RM RM

CASH FLOWS FROM OPERATING ACTIVITIES Purchase of unquoted Sukuk and Islamic Commercial Papers (1,186,369,241) (731,793,242) Proceeds from disposal of unquoted Sukuk and Islamic Commercial Papers 173,662,364 192,236,020 Proceeds from redemption of unquoted Sukuk and Islamic Commercial Papers - 575,936,794 Proceeds from maturity of Shariah-compliant deposits with licensed Islamic financial institutions 6,666,995,151 478,537,000

Placement of Shariah-compliant deposits with licensed Islamic financial institutions (6,446,844,000) (335,120,000)

Profit income received from Shariah-compliant deposits with licensed Islamic financial institutions and Hibah received 4,638 7,004,027 Profit income received from unquoted Sukuk and Islamic Commercial Papers 18,768,139 12,857,133

Management fee paid (3,248,533) (2,459,893)

Trustee fee paid (150,909) (147,594)

Payments for other fees and expenses (7,170) (20,147)

Net cash (used in)/generated from operating activities (213,189,561) 197,030,098

CASH FLOWS FROM FINANCING ACTIVITIES

Cash proceeds from units created 402,745,846 256,474,957

Payments for cancellation of units (258,471,142) (400,543,035)

Distributions paid (2,220,481) (297,807)

Net cash generated from/(used in) financing activities 142,054,223 (144,365,885)

Net (decrease)/increase in cash and cash equivalents (71,135,338) 52,664,213

Cash and cash equivalents at the beginning of the financial period 133,916,836 137,805,007

Cash and cash equivalents at the end of the financial period 62,781,498 190,469,220

Cash and cash equivalents comprised of:

Bank balances 26,602 12,524 Shariah-compliant deposits with licensed Islamic financial institutions 62,754,896 190,456,696

Cash and cash equivalents at the end of the financial period 62,781,498 190,469,220



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NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 31 MAY 2021 1. THE FUND, THE MANAGER AND ITS PRINCIPAL ACTIVITIES

Principal Islamic Money Market Fund (the “Fund”) is governed by a Master Deed dated 15 May 2008, a Third Supplemental Master Deed dated 25 June 2008, a Sixth Supplemental Master Deed dated 14 July 2008, a Seventh Supplemental Master Deed dated 19 November 2008, a Seventeenth Supplemental Master Deed dated 25 March 2015, a Nineteenth Supplemental Master Deed dated 18 June 2019, a Twentieth Supplemental Master Deed dated 9 April 2021, and a Twenty first Supplemental Master Deed dated 15 April 2021 (collectively referred to as the “Deeds”) between Principal Asset Management Berhad and MTrustee Berhad (the “Trustee”). The Fund will place at least 90% of its NAV in Islamic money market instruments such as Islamic Accepted Bills, Islamic Negotiable Instruments of Deposits and Repo-i as well as in any other Islamic fixed income instruments and placements of Islamic Deposits, all of which are highly liquid and have a remaining maturity period of less than 365 days. Up to 10% of the Fund’s NAV may be invested in Islamic fixed income instruments, which have a remaining maturity period of more than 365 days but less than 732 days. The Fund will be actively managed with frequency that will depend on the market conditions and market outlook. The strategy is to invest in liquid and low risk short-term investments for capital preservation. The investment strategy adheres to the GUTF pertaining to investments for a money market fund.The asset allocation strategy for this Fund is as follows:

• at least 90% of the Fund’s NAV will be invested in Islamic money market instruments and/or Islamic Deposits; and

• up to 10% of the Fund’s NAV may be invested in Islamic fixed income instruments, which have a remaining maturity period of more than 365 days but less than 732 days.

All investments are subjected to the SC Guidelines on Unit Trust Funds, SC requirements, the Deeds, except where exemptions or variations have been approved by the SC, internal policies and procedures and the Fund’s objective.

The Manager is a joint venture between Principal Financial Group®, a member of the FORTUNE 500® and a Nasdaq-listed global financial services and CIMB Group Holdings Berhad, one of Southeast Asia’s leading universal banking groups. The principal activities of the Manager are the establishment and management of unit trust funds and fund management activities.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial statements: (a) Basis of preparation

The financial statements have been prepared in accordance with the provisions of the MFRS as issued by the Malaysian Accounting Standards Board (“MASB”) and IFRS as issued by the International Accounting Standards Board (“IASB”). The financial statements have been prepared under the historical cost convention, as modified by financial assets at fair value through profit or loss. The preparation of financial statements in conformity with MFRS and IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(a) Basis of preparation (continued) It also requires the Manager to exercise their judgement in the process of applying the Fund’s accounting policies. Although these estimates and judgement are based on the Manager’s best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2(j).

There are no other standards, amendments to standards or interpretations that are effective for financial period beginning on 1 December 2020 that have a material effect on the financial statements of the Fund. None of the standards, amendments to standards or interpretations that are effective for financial period beginning on/after 1 June 2021 to the financial statements of the Fund.

(b) Financial assets and financial liabilities

Classification The Fund classify its financial assets in the following measurement categories: • those to be measured subsequently at fair value through profit or loss, and • those to be measured at amortised cost. The Fund classifies its Shariah-compliant investments based on both the Fund’s business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The Fund is primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The contractual cash flows of the Fund’s debt securities are solely principal and interest1 (“SPPI”). However, these securities are neither held for the purpose of collecting contractual cash flows nor held both for collecting contractual cash flows and for sale. The collection of contractual cash flows is only incidental to achieving the Fund’s business model’s objective. Consequently, all investments are measured at fair value through profit or loss.

The Fund classifies cash and cash equivalents, and amount due from Manager as financial assets at amortised cost as these financial assets are held to collect contractual cash flows consisting of the amount outstanding. All of the Fund’s financial liabilities are measured at amortised cost.

1 For the purposes of this Fund, interest refers to profits earned from Shariah-compliant investments.


17


(b) Financial assets and financial liabilities (continued) Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Fund commits to purchase or sell the asset. Shariah-compliant investments are initially recognised at fair value. Financial liabilities are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the rights to receive cash flows from the Shariah-compliant investments have expired or have been transferred and the Fund has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expired. Unrealised gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the statement of comprehensive income with net gain or loss on financial assets at fair value through profit or loss in the financial period which they arise. Unquoted Sukuk and Islamic Commercial Papers denominated in Malaysian Ringgit (“MYR”) are revalued on a daily basis based on fair value prices quoted by a Bond Pricing Agency (“BPA”) registered with the SC as per the SC Guidelines on Unit Trust Funds. Refer to Note 2(j) for further explanation.

Shariah-compliant deposits with licensed Islamic financial institutions are stated at cost plus accrued profit calculated on the effective profit method over the financial period from the date of placement to the date of maturity of the respective deposits. Financial assets at amortised cost and other financial liabilities are subsequently carried at amortised cost using the effective profit method.

Impairment on assets carried at amortised costs The Fund measures credit risk and expected credit losses (“ECL”) using probability of default, exposure at default and loss given default. The Manager consider both historical analysis and forward looking information in determining any ECL. The Manager consider the probability of default to be close to zero as these instruments have a low risk of default and the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised based on 12 month ECL as any such impairment would be wholly insignificant to the Fund. Significant increase in credit risk A significant increase in credit risk is defined by the Manager as any contractual payment which is more than 30 days past due.


18


(b) Financial assets and financial liabilities (continued) Definition of default and credit-impaired financial assets Any contractual payment which is more than 90 days past due is considered credit impaired. Write-off The Fund writes off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and has concluded there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay the amount. The Fund may write-off financial assets that are still subject to enforcement activity. Subsequent recoveries of amounts previously written off will result in impairment gains. There are no write-offs/recoveries during the financial period.

(c) Income recognition

Profit income from Shariah-compliant deposits with licensed Islamic financial institutions, unquoted Sukuk and Islamic Commercial Papers are recognised on a time proportionate basis using the effective profit method on an accrual basis. Profit income is calculated by applying the effective profit rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective profit rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance). Realised gain or loss on disposal of unquoted Sukuk and Islamic Commercial Papers are accounted for as the difference between the net disposal proceeds and the carrying amount of unquoted Sukuk and Islamic Commercial Papers, determined on cost adjusted for accretion of discount or amortisation of premium.

(d) Functional and presentation currency

Items included in 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 MYR, which is the Fund’s functional and presentation currency.

(e) Cash and cash equivalents For the purpose of statement of cash flows, cash and cash equivalents comprise bank balances and Shariah-compliant deposits held in highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(f) Taxation Current tax expense is determined according to Malaysian tax laws at the current rate

based upon the taxable profit earned during the financial period.


19


(g) Distribution A distribution to the Fund’s unit holders is accounted for as a deduction from realised reserve. A proposed distribution is recognised as a liability in the financial period in which it is approved by the Trustee.

(h) Unit holders’ contributions

The unit holders’ contributions to the Fund meet the criteria to be classified as equity instruments under “MFRS 132 “Financial Instruments: Presentation”. Those criteria include: • the units entitle the holder to a proportionate share of the Fund’s NAV; • the units are the most subordinated class and class features are identical; • there is no contractual obligations to deliver cash or another financial asset

other than the obligation on the Fund to repurchase; and • the total expected cash flows from the units over its life are based substantially

on the profit or loss of the Fund. The outstanding units are carried at the redemption amount that is payable at each financial period if unit holder exercises the right to put the unit back to the Fund. Units are created and cancelled at prices based on the Fund’s NAV per unit at the time of creation or cancellation. The Fund’s NAV per unit is calculated by dividing the net assets attributable to unit holders with the total number of outstanding units.

(i) Realised and unrealised portions of profit or loss after tax

The analysis of realised and unrealised portions of profit or loss after tax as presented on the statement of comprehensive income is prepared in accordance with Guidelines on Unit Trust Funds.

(j) Critical accounting estimates and judgements in applying accounting policies

The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material impact to the Fund’s results and financial position are tested for sensitivity to changes in the underlying parameters. Estimates and judgement are continually evaluated by the Manager and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Estimate of fair value of unquoted Sukuk and Islamic Commercial Papers In undertaking any of the Fund’s Shariah-compliant investment, the Manager will ensure that all assets of the Fund under management will be valued appropriately, that is at fair value and in compliance with the SC Guidelines on Unit Trust Funds.


20


(j) Critical accounting estimates and judgements in applying accounting policies (continued)

Estimate of fair value of unquoted Sukuk and Islamic Commercial Papers (continued) Ringgit-denominated unquoted Sukuk are valued using fair value prices quoted by a BPA. Where the Manager is of the view that the price quoted by BPA for a specific unquoted Sukuk differs from the market price by more than 20 bps the Manager may use market price, provided that the Manager records its basis for using a non-BPA price, obtains necessary internal approvals to use the non-BPA price, and keeps an audit trail of all decisions and basis for adopting the use of non-BPA price. Islamic Commercial Papers are revalued at least weekly by reference to bid and offer prices quoted by three (3) independent and reputable financial institutions of similar standing at the close of trading.

3. RISK MANAGEMENT OBJECTIVES AND POLICIES The investment objective of the Fund is to provide investors with liquidity and regular income, whilst maintaining capital stability by investing primarily in money market instruments that conform with Shariah principles. The Fund is exposed to a variety of risks which include market risk (inclusive of price risk and interest rate risk), credit risk and liquidity risk. Financial risk management is carried out through internal control process adopted by the Manager and adherence to the investment restrictions as stipulated in the Deeds and SC Guidelines on Unit Trust Funds.

(a) Market risk

(i) Price risk

This is the risk that the fair value of a Shariah-compliant investment in unquoted Sukuk and Islamic Commercial Papers will fluctuate because of changes in market prices (other than those arising from interest rate risk). The Fund is exposed to price risk arising from interest rate fluctuation in relation to its investments in unquoted Sukuk and Islamic Commercial Papers. The Fund’s exposure to price risk arising from interest rate fluctuation and the related sensitivity analysis are disclosed in “interest rate risk” below.

(ii) Interest rate risk In general, when interest rates rise, unquoted Sukuk and Islamic Commercial Papers prices will tend to fall and vice versa. Therefore, the NAV of the Fund may also tend to fall when interest rates rise or are expected to rise. However, investors should be aware that should the Fund holds an unquoted Sukuk and Islamic commercial papers till maturity, such price fluctuations would dissipate as it approaches maturity, and thus the growth of the NAV shall not be affected at maturity.


21

3. RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(a) Market risk (continued) (ii) Interest rate risk (continued)

In order to mitigate interest rates exposure of the Fund, the Manager will manage the duration of the portfolio via shorter or longer tenured assets depending on the view of the future interest rate trend of the Manager, which is based on its continuous fundamental research and analysis.

Investors should note that the movement in prices of unquoted Sukuk, Islamic Commercial Papers and Shariah-compliant money market instruments are benchmarked against interest rates. As such, the investments are exposed to the movement of the interest rates. It does not in any way suggest that this Fund will invest in conventional financial instruments. All investments carried out for the Fund including placement and deposits are in accordance with Shariah. This risk is crucial since unquoted Sukuk and Islamic Commercial Papers portfolio management depends on forecasting interest rate movements. Prices of unquoted Sukuk and Islamic Commercial Papers move inversely to interest rate movements, therefore as interest rates rise, the prices of unquoted Sukuk and Islamic Commercial Papers decrease and vice versa. Furthermore, unquoted Sukuk and Islamic Commercial Papers with longer maturity and lower yield coupon rates are more susceptible to interest rate movements.

Such investments may be subject to unanticipated rise in interest rates which may impair the ability of the issuers to meet obligation under the instrument, especially if the issuers are highly leveraged. An increase in interest rates may therefore increase the potential for default by an issuer. The Fund’s exposure to interest rate risk associated with Shariah-compliant deposits with licensed Islamic financial institutions is not material as the Shariah-compliant deposits are held on short-term basis. The Fund is not exposed to cash flow interest rate risk as the Fund does not hold any financial instruments at variable interest rate.

(b) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligation resulting in financial loss to the Fund. Investment in unquoted Sukuk and Islamic Commercial Papers may involve a certain degree of credit/default risk with regards to the issuers. Generally, credit risk or default risk is the risk of loss due to the issuer’s non-payment or untimely payment of the investment amount as well as the returns on investment. This will cause a decline in value of the defaulted unquoted Sukuk and Islamic Commercial Papers and subsequently depress the NAV of the Fund. Usually credit risk is more apparent for an investment with a longer tenure, i.e. the longer the duration, the higher the credit risk. Credit risk can be managed by performing continuous fundamental credit research and analysis to ascertain the creditworthiness of its issuer.


22

3. RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (b) Credit risk (continued)

In addition, the Manager imposes a minimum rating requirement as rated by either local and/or foreign rating agencies and manages the duration of the investment in accordance with the objective of the Fund. For this Fund, the unquoted Sukuk and Islamic Commercial Papers investments must satisfy a minimum rating requirement of at least “BBB3” or “P2” rating by RAM Rating Services Berhad (“RAM Ratings”) or equivalent rating by Malaysian Rating Corporation Berhad (“MARC”) or by local rating agency(ies) of the country of issuance; “BBB-” by Standard & Poor’s (“S&P”) or equivalent rating by any other international rating agencies. The credit risk arising from placements of Shariah-compliant deposits in licensed Islamic financial institutions is managed by ensuring that the Fund will only place deposits in reputable licensed Islamic financial institutions. For amount due from Manager, the settlement terms of the proceeds from the creation of units’ receivable from the Manager are governed by the SC Guidelines on Unit Trust Funds.

(c) Liquidity risk

Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial obligations. The Manager manages this risk by maintaining sufficient level of liquid assets to meet anticipated payments and cancellations of the units by unit holders. Liquid assets comprise bank balances and Shariah-compliant deposits with licensed Islamic financial institutions, which are capable of being converted into cash within 7 business days. Generally, all investments are subject to a certain degree of liquidity risk depending on the nature of the investment instruments, market, sector and other factors. For the purpose of the Fund, the Manager will attempt to balance the entire portfolio by investing in a mix of assets with satisfactory trading volume and those that occasionally could encounter poor liquidity. This is expected to reduce the risks for the entire portfolio without limiting the Fund’s growth potentials.

(d) Capital risk management

The capital of the Fund is represented by equity consisting of net assets attributable to unit holders. The amount of capital can change significantly on a daily basis as the Fund is subject to daily subscriptions and redemptions at the discretion of unit holders. The Fund’s objective when managing capital is to safeguard the Fund’s ability to continue as a going concern in order to provide returns to unit holders and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the Fund.

(e) Fair value estimation

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price).


23


(e) Fair value estimation (continued) The fair value of financial assets traded in active markets (such as trading securities) are based on quoted market prices at the close of trading on the financial period end date. The Fund utilises the last traded market price for financial assets where the last traded price falls within the bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread that is most representative of the fair value. An active market is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of financial assets that are not traded in an active market is determined by using valuation techniques.

(i) Fair value hierarchy

The table below analyses financial instruments carried at fair value. The different levels have been defined as follows:

• Quoted prices (unadjusted) in active market for identical assets or liabilities (Level 1)

• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2)

• Inputs for the asset and liability that are not based on observable market data (that is, unobservable inputs) (Level 3)

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. The determination of what constitutes ‘observable’ requires significant judgement by the Fund. The Fund considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.


24


(e) Fair value estimation (continued)

(i) Fair value hierarchy (continued)

Level 1 Level 2 Level 3 Total RM RM RM RM 31.05.2021 Financial assets at fair value through profit or loss: - Unquoted Sukuk

and Islamic Commercial Papers - 1,226,354,809 - 1,226,354,809

30.11.2020 Audited Financial assets at fair value through profit or loss: - Unquoted

Sukuk and Islamic Commercial Papers - 784,537,879 - 784,537,879

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. This includes unquoted Sukuk and Islamic Commercial Papers. As Level 2 instruments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. The Fund’s policies on valuation of these financial assets are stated in Note 2(b).

(ii) The carrying values of cash and cash equivalents, amount due from Manager,

and all current liabilities are a reasonable approximation of their fair values due to their short-term nature.

4. MANAGEMENT FEE In accordance with the Deeds, the Manager is entitled to a maximum management fee of 3.00%

per annum, calculated daily based on the NAV of the Fund. For the six months financial period ended 31 May 2021, the management fee was recognised at a rate of 0.50% per annum (31.05.2020: 0.50% per annum). There was no further liability to the Manager in respect of management fee other than the amount recognised above.


25

5. TRUSTEE FEE In accordance with the Deeds, the Trustee is entitled to a maximum Trustee fee of 0.03% per annum calculated daily based on the NAV of the Fund. The Trustee fee includes the local custodian fee but excludes the foreign sub-custodian fees (if any). For the six months financial period ended 31 May 2021, the Trustee fee was recognised at a rate of 0.03% per annum (31.05.2020: 0.03% per annum). There was no further liability to the Trustee in respect of Trustee fee other than the amount recognised above.

6. DISTRIBUTIONS

Distributions to unit holders were derived from the following sources (assessed up to distribution declaration date):

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020

RM RM

Profit income 4,153,856 6,979,625 Net realised (loss)/gain from disposal of financial

assets at fair value through profit or loss (1,240,476) 150,035

Prior financial periods’ realised income 19,529,206 9,117,703

22,442,586 16,247,363

Less:

Expenses (1,279,729) (1,169,446)

Net distribution amount 21,162,857 15,077,917

Gross/Net distribution per unit (sen)

Distribution on 31 December 2020 0.39 -

Distribution on 29 January 2021 0.26 -

Distribution on 26 February 2021 0.27 -

Distribution on 31 March 2021 0.24 -

Distribution on 30 April 2021 0.26 -

Distribution on 31 May 2021 0.28 -

Distribution on 31 December 2019 - 0.30

Distribution on 31 January 2020 - 0.31

Distribution on 28 February 2020 - 0.30

Distribution on 31 March 2020 - 0.26

Distribution on 30 April 2020 - 0.29

Distribution on 29 May 2020 - 0.22

1.70 1.68

Gross distribution was derived using total income less total expenses. Net distribution above was sourced from current and prior financial periods’ realised income. Gross distribution per unit was derived from gross realised income less expenses, divided by the number of units in circulation. Net distribution per unit is derived from gross realised income less expenses and taxation, divided by the number of units in circulation.


26

7. TAXATION

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020

RM RM

Tax charged for the financial period:

- Current taxation - -

A numerical reconciliation between the profit before taxation multiplied by the Malaysian statutory income tax rate and tax expense of the Fund is as follows:

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020

RM RM

Profit before taxation 12,437,670 15,147,671

Taxation at Malaysian statutory rate of 24% (31.05.2020: 24%) 2,985,041 3,635,441

Tax effects of:

- Investment income not subject to tax (3,821,859) (4,254,821)

- Expenses not deductible for tax purposes 35,882 36,589 - Restriction on tax deductible expenses for Unit Trust Funds 800,936 582,791

Taxation - -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

31.05.2021 30.11.2020 Audited

RM RM At fair value through profit or loss: - Unquoted Sukuk and Islamic Commercial Papers 1,226,354,809 784,537,879

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020 RM RM Net (loss)/gain on financial assets at fair value through profit or loss:

- Realised gain on disposals 20,004 775,887 - Unrealised fair value (loss)/gain (303,290) 179,087

(283,286) 954,974


27

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)

Name of issuer Nominal

value Aggregate

cost Market value Percentage

of NAV

RM RM RM %

31.05.2021

UNQUOTED SUKUK

Abu Dhabi National Energy Co PJSC (TAQA) 4.65% 03/03/2022 (NR) 119,000,000 121,565,318 121,643,104 8.54

Aeon Co (M) Bhd 3.15% 12/07/2021 (AA2) 5,000,000 5,062,981 5,063,742 0.36

Al Dzahab Assets Bhd 4.90% 29/03/2022 (AAA) 5,000,000 5,116,044 5,134,009 0.36


Aman Sukuk Bhd 4.29% 06/05/2022 (AAA) 5,000,000 5,095,538 5,103,779 0.36

Aman Sukuk Bhd 4.75% 28/02/2023 (AAA) 5,000,000 5,246,791 5,255,565 0.37

AmBank Islamic Bank Bhd 3.55% 25/03/2022 (AA3) 40,000,000 40,514,674 40,511,167 2.84

Anih Bhd 5.22% 29/11/2022 (AA2) 5,000,000 5,190,638 5,178,965 0.36

Bank Pembangunan Malaysia Bhd 4.28% 02/03/2022 (AAA) 45,000,000 46,095,480 46,092,766 3.23

BGSM Management Sdn Bhd 2.55% 18/10/2021 (AA3) 5,000,000 5,016,088 5,016,918 0.35


Cerah Sama Sdn Bhd 4.68% 31/01/2022 (AA3) 5,000,000 5,140,837 5,140,705 0.36

Edra Energy Sdn Bhd 5.61% 05/01/2022 (AA3) 5,000,000 5,189,869 5,191,468 0.36

Encorp Systembilt Sdn Bhd 4.84% 18/11/2021 (AA1) 5,000,000 5,064,103 5,068,432 0.36

Encorp Systembilt Sdn Bhd 4.95% 18/11/2022 (AA1) 5,000,000 5,180,989 5,183,093 0.36

First Resources Ltd 4.85% 27/10/2021 (AA2) 74,800,000 75,792,025 75,842,763 5.33

Fortune Premiere Sdn Bhd 4.65% 21/12/2022 (AA2) 2,500,000 2,611,260 2,614,046 0.18

Gamuda Bhd 4.825% 23/11/2022 (AA3) 15,000,000 15,423,167 15,421,913 1.08

GII Murabahah 3.743% 26/08/2021 (NR) 20,000,000 20,288,587 20,289,456 1.42

Government Investment Issues 4.194% 15/07/2022 # 20,000,000 20,824,958 20,832,846 1.46


28



value Aggregate


of NAV

RM RM RM % 31.05.2021 (CONTINUED)

UNQUOTED SUKUK (CONTINUED)

Gulf Investment Corp 5.10% 20/06/2022 (AAA) 5,000,000 5,233,374 5,235,524 0.37

Imtiaz Sukuk Bhd 4.65% 24/11/2021 (AA2) 35,000,000 35,418,277 35,428,721 2.49

Imtiaz Sukuk II Bhd 4.58% 27/05/2022 (AA2) 10,000,000 10,184,446 10,193,055 0.72

Infracap Resources Sdn Bhd 2.83% 15/04/2022 (AAA) 20,000,000 20,072,882 20,111,882 1.41

Jimah Energy Ventures Sdn Bhd 9.50% 12/05/2022 (AA3) 5,000,000 5,339,204 5,339,465 0.37

Kapar Energy Ventures Sdn Bhd 4.63% 05/07/2022 (AA1) 5,000,000 5,199,747 5,199,384 0.36

Kedah Cement Sdn Bhd 5.06% 08/07/2022 (AA3) 5,000,000 5,144,694 5,203,427 0.37

Malakoff Power Bhd 5.25% 17/12/2021 (AA3) 15,000,000 15,580,273 15,584,501 1.09


Malaysian Islamic Treasury Bil 364D 21/02/2022 (NR) 60,000,000 59,244,114 59,206,800 4.15

Manjung Island Energy Bhd 4.15% 25/11/2021 (AAA) 15,000,000 15,155,158 15,148,888 1.06

Manjung Island Energy Bhd 4.22% 25/11/2022 (AAA) 5,000,000 5,124,914 5,132,697 0.36

Pengurusan Air SPV Bhd 4.12% 25/02/2022 (AAA) 35,000,000 35,837,545 35,833,566 2.51

Pengurusan Air SPV Bhd 4.16% 11/11/2021 (AAA) 35,000,000 35,377,828 35,378,470 2.48

Perbadanan Kemajuan Negeri Selangor 4.58% 01/04/2022 (AA3) 15,000,000 15,299,330 15,278,750 1.07


Projek Lebuhraya Usahasama Bhd 4.40% 12/01/2022 (AAA) 45,000,000 46,310,413 46,328,252 3.25


29



value Aggregate


of NAV



Public Islamic Bank Bhd 4.30% 27/07/2021 (AAA) 35,000,000 35,628,059 35,628,461 2.50

Puncak Wangi Sdn Bhd 2.94% 24/11/2021 (AAA) 20,000,000 20,013,761 20,014,288 1.40

Putrajaya Holdings Sdn Bhd 4.23% 29/07/2021 (AAA) 10,000,000 10,175,774 10,177,827 0.71

Quantum Solar Park Green Sri Sukuk 5.16% 6/10/22 (AA3) 5,000,000 5,157,976 5,161,734 0.36

Ranhill Powertron II Sdn Bhd 5.55% 17/06/2021 (AA2) 10,000,000 10,263,314 10,265,804 0.72


Sabah Credit Corp 05/05/2022 (AA1) 10,000,000 10,230,699 10,215,985 0.72

Sabah Credit Corp 2.65% 28/03/2022 (AA1) 80,000,000 80,418,436 80,335,551 5.65

Sabah Credit Corp 2.95% 25/04/2022 (AA1) 10,000,000 10,040,075 10,047,721 0.70

Sarawak Energy Bhd 4.50% 19/01/2022 (AAA) 60,000,000 61,851,703 61,814,236 4.35


Sepangar Bay Power Corporation 4.70% 01/07/2022 (AA1) 5,000,000 5,188,728 5,212,332 0.37

Southern Power Generation Sdn Bhd 4.76% 28/04/2023 (AA3) 10,000,000 10,375,419 10,377,332 0.73

Special Power Vehicle 22.18% 19/11/2021 (A1) 14,000,000 15,283,768 15,292,415 1.07

Tanjung Bin Power Sdn Bhd 4.79% 16/08/2021 (AA2) 10,000,000 10,184,026 10,187,595 0.71

Teknologi Tenaga Perlis Consortium Sdn Bhd 4.71% 29/07/2022 (AA1) 5,000,000 5,212,901 5,209,210 0.37

UEM Edgenta Bhd 4.85% 26/04/2022 (AA3) 40,000,000 40,909,229 40,921,342 2.87

UEM Sunrise Bhd 4.85% 29/10/2021 (AA3) 10,000,000 10,102,219 10,102,321 0.71



30



value Aggregate


of NAV



UMW Holdings Bhd 5.02% 04/10/2021 (AA2) 30,000,000 30,491,423 30,503,084 2.14

United Growth Bhd 4.73% 21/06/2022 (AA2) 5,000,000 5,212,535 5,215,767 0.37

WCT Holdings Bhd 4.95% 22/10/2021 (AA3) 5,000,000 5,040,225 5,050,845 0.35


Westports Malaysia Sdn Bhd 4.68% 01/04/2022 (AAA) 2,500,000 2,565,735 2,567,235 0.18

Westports Malaysia Sdn Bhd 5.10% 03/05/2022 (AAA) 5,000,000 5,135,678 5,144,544 0.36

TOTAL UNQUOTED SUKUK 1,172,800,000 1,196,111,352 1,196,374,609 83.94

ISLAMIC COMMERCIAL PAPERS

Bermaz Auto Bhd 18/06/2021 (P1) 10,000,000 9,989,343 9,990,600 0.70

Gamuda Land Sdn Bhd 90D 10/06/2021 (P1) 20,000,000 19,989,104 19,989,600 1.40

TOTAL ISLAMIC COMMERCIAL PAPERS 30,000,000 29,978,447 29,980,200 2.10

TOTAL UNQUOTED SUKUK AND ISLAMIC COMMERCIAL PAPERS 1,202,800,000 1,226,089,799 1,226,354,809 86.04

ACCUMULATED UNREALISED GAIN ON UNQUOTED SUKUK AND ISLAMIC COMMERCIAL PAPERS AT FAIR VALUE THROUGH PROFIT OR LOSS 265,010

TOTAL UNQUOTED SUKUK AND ISLAMIC COMMERCIAL PAPERS AT FAIR VALUE THROUGH PROFIT OR LOSS 1,226,354,809


31



value Aggregate


of NAV

RM RM RM %

30.11.2020

Audited

UNQUOTED SUKUK

Abu Dhabi National Energy Co PJSC (TAQA) 4.65% 03/03/2022 (NR) 5,000,000 5,150,749 5,158,194 0.41

Aeon Co (M) Bhd 3.15% 12/07/2021 (AA2) 5,000,000 5,074,105 5,074,037 0.40





First Resources Ltd 4.85% 27/10/2021 (AA2) 70,000,000 71,655,936 71,691,948 5.65

Gulf Investment Corp 5.10% 16/03/2021 (AAA) 38,750,000 39,342,019 39,459,104 3.11



Kapar Energy Ventures Sdn Bhd 4.63% 05/07/2022 (AA1) 5,000,000 5,248,012 5,246,818 0.41

Kedah Cement Sdn Bhd 5.06% 08/07/2022 (A1) 5,000,000 5,165,382 5,165,464 0.41

Konsortium KAJV Sdn Bhd 5.15% 12/05/2021 (AA3) 350,000 352,164 353,290 0.03


National Bank of Abu Dhabi PJSC 4.90% 28/12/2020 (AAA) 20,000,000 20,450,322 20,456,164 1.61






32



value Aggregate


of NAV


Audited (Continued) UNQUOTED SUKUK (CONTINUED)

Public Islamic Bank Bhd

4.30% 27/07/2021 (AAA) 35,000,000 35,975,220 36,002,458 2.84 Puncak Wangi Sdn Bhd

2.94% 24/11/2021 (AAA) 20,000,000 20,014,788 20,017,288 1.58 Putrajaya Holdings Sdn Bhd

4.23% 29/07/2021 (AAA) 10,000,000 10,276,363 10,278,782 0.81 Quantum Solar Park Green

Sri Sukuk 5.01% 6/4/2021 (A1) 5,000,000 5,049,454 5,064,333 0.40



Sabah Credit Corp 05/05/2022 (AA1) 10,000,000 10,336,415 10,336,378 0.81


Sepangar Bay Power Corp Sdn Bhd 4.70% 01/07/2022 (AA1) 5,000,000 5,231,843 5,260,969 0.41

Special Power Vehicle 22.18% 19/11/2021 (A1) 14,000,000 16,528,821 16,541,175 1.30

Tanjung Bin Power Sdn Bhd 4.79% 16/08/2021 (AA2) 10,000,000 10,290,215 10,297,019 0.81

Teknologi Tenaga Perlis Consortium Sdn Bhd 4.59% 29/01/2021 (AA1) 25,000,000 25,475,008 25,485,836 2.01

Telekom Malaysia Bhd 4.00% 13/05/2022 (AAA) 15,000,000 15,419,623 15,407,758 1.21

UEM Edgenta Bhd 4.85% 26/04/2022 (AA3) 5,000,000 5,158,468 5,163,918 0.41





United Growth Bhd 4.73% 21/06/2022 (AA2) 5,000,000 5,262,394 5,264,617 0.41



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value Aggregate


of NAV


Audited (Continued) UNQUOTED SUKUK (CONTINUED)

WCT Holdings Bhd 5.32%

11/5/2022 (AA3) 5,000,000 5,136,582 5,114,625 0.40 Westports Malaysia Sdn

Bhd 5.10% 03/05/2022 (AA1) 5,000,000 5,197,161 5,204,174 0.41

TOTAL UNQUOTED SUKUK 565,100,000 581,846,685 582,367,916 45.88

ISLAMIC COMMERCIAL PAPERS

Aeon Co (M) Bhd 90D

11/02/2021 (P1) 12,900,000 12,843,513 12,846,465 1.01 Aeon Co (M) Bhd 91D

28/12/2020 (P1) 60,000,000 59,891,390 59,913,000 4.72 Gamuda Land Sdn Bhd 89D

28/12/2020 (P1) 40,000,000 39,930,903 39,940,400 3.15 Sabah Credit Corporation

120D 19/03/2021 (P1) 45,000,000 44,720,190 44,709,750 3.52 Sabah Credit Corporation

175D 23/04/2021 (P1) 20,000,000 19,814,663 19,821,599 1.56 Sabah Credit Corporation

182D 15/01/2021 (P1) 25,000,000 24,922,235 24,938,749 1.96

TOTAL ISLAMIC COMMERCIAL PAPERS 202,900,000 202,122,894 202,169,963 15.92

TOTAL UNQUOTED

SUKUK AND ISLAMIC COMMERCIAL PAPERS 768,000,000 783,969,579 784,537,879 61.80

ACCUMULATED

UNREALISED GAIN ON UNQUOTED SUKUK AND ISLAMIC COMMERCIAL PAPERS AT FAIR VALUE THROUGH PROFIT OR LOSS 568,300

TOTAL UNQUOTED

SUKUK AND ISLAMIC COMMERCIAL PAPERS AT FAIR VALUE THROUGH PROFIT OR LOSS 784,537,879


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# The unquoted fixed income securities which are not rated as at the end of each financial period are issued, backed or guaranteed by Governments or Government agencies.

9. CASH AND CASH EQUIVALENTS

31.05.2021 30.11.2020

Audited

RM RM

Bank balances 26,602 112,546 Shariah-compliant deposits with licensed Islamic financial institutions 62,754,896 133,804,290

62,781,498 133,916,836

10. NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS

Net assets attributable to unit holders as at the reporting date comprises of:

31.05.2021 30.11.2020

Audited

RM RM

Unit holders’ contributions 1,411,708,920 1,247,152,586

Retained earnings 13,629,993 22,355,179

1,425,338,913 1,269,507,765

The movement in the components of net assets attributable to unit holders for the financial period were as follows:

Unit holders’

contributions Retained earnings Total

RM RM RM

Balance as at 1 December 2020 1,247,152,586 22,355,179 1,269,507,765 Movements in unit holders’

contributions:

- Creation of units from

applications 403,422,289 - 403,422,289 - Creation of units from

distributions 18,942,618 - 18,942,618

- Cancellation of units (257,808,573) - (257,808,573) Total comprehensive income for the

financial period - 12,437,671 12,437,671

Distributions - (21,162,857) (21,162,857)

Balance at 31 May 2021 1,411,708,920 13,629,993 1,425,338,913


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10. NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS (CONTINUED)

The movement in the components of net assets attributable to unit holders for the financial period were as follows:

Unit holders’

contributions Retained earnings Total

RM RM RM

Balance as at 1 December 2019 975,287,420 28,340,887 1,003,628,307 Movements in unit holders’

contributions:

- Creation of units from

applications 258,959,466 - 258,959,466 - Creation of units from

distributions 14,885,382 - 14,885,382

- Cancellation of units (285,533,748) - (285,533,748) Total comprehensive income for the

financial period - 15,147,671 15,147,671

Distributions - (15,077,917) (15,077,917)

Balance at 31 May 2020 963,598,520 28,410,641 992,009,161

11. NUMBER OF UNITS IN CIRCULATION (UNITS)

01.12.2020 to 31.05.2021

01.12.2019 to 30.11.2020

Audited

No. of units No. of units

At the beginning of the financial period/year 1,178,289,465 926,973,900

Add : Creation of units from applications 375,291,915 773,307,897

Add : Creation of units from distributions 17,658,137 30,653,932

Less : Cancellation of units (239,760,050) (552,646,264)

At the end of the financial period/year 1,331,479,467 1,178,289,465

12. MANAGEMENT EXPENSE RATIO (“MER”)

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020

% %

MER 0.26 0.27

MER is derived based on the following calculation: MER = (A + B + C + D + E) x 100 F A = Management fee B = Trustee fee C = Audit fee D = Tax agent’s fee

E = Other expenses F = Average NAV of the Fund calculated on a daily basis The average NAV of the Fund for the financial period calculated on a daily basis was RM1,337,679,200 (31.05.2020: RM966,832,550).


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13. PORTFOLIO TURNOVER RATIO (“PTR”)

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020

PTR (times) 0.51 0.47

PTR was derived from the following calculation:

(Total acquisition for the financial period + total disposal for the financial period) 2 Average NAV of the Fund for the financial period calculated on a daily basis

where: total acquisition for the financial period = RM1,180,614,822 (31.05.2020: RM727,966,638) total disposal for the financial period = RM171,749,900 (31.05.2020: RM189,957,545)

14. UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER, AND SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES

The related parties and their relationship with the Fund are as follows: Related parties Relationship Principal Asset Management Berhad The Manager Principal Financial Group, Inc. Ultimate holding company of shareholder of

the Manager Principal International (Asia) Ltd Shareholder of the Manager Subsidiaries and associates of Principal Financial Group Inc., other than above, as disclosed in its financial statements

Fellow subsidiary and associated companies of the ultimate holding company of shareholder of the Manager

CIMB Group Holdings Bhd Ultimate holding company of shareholder of

the Manager CIMB Group Sdn Bhd Shareholder of the Manager Subsidiaries and associates of CIMB Group Holdings Bhd, other than above, as disclosed in its financial statements

Fellow subsidiary and associated companies of the ultimate holding company of the Manager

CIMB Bank Bhd Fellow related party to the Manager CIMB Islamic Bank Bhd Fellow related party to the Manager


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14. UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER, AND SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

Units held by the Manager and parties related to the Manager 31.05.2021 30.11.2020 Audited

No. of units RM No. of units RM Manager Principal Asset Management

Berhad 136,293 145,888 152,884 164,717

In the opinion of the Manager, the above units were transacted at the prevailing market price.

The units are held beneficially by the Manager for booking purposes. Other than the above, there were no units held by the Directors or parties related to the Manager. In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions and balances. The Manager is of the opinion that all transactions with the related companies have been entered into in the normal course of business at agreed terms between the related parties.

01.12.2020

to 31.05.2021 01.12.2019

to 31.05.2020 RM RM Significant related party transactions Profit income from Shariah-compliant deposits with licensed Islamic financial institution: - CIMB Islamic Bank Bhd 990,138 1,054,842

31.05.2021 30.11.2020 Audited Significant related party balances Shariah-compliance deposits with licensed Islamic

financial institution: - CIMB Islamic Bank Bhd 57,754,690 76,727,110

Bank balances: - CIMB Islamic Bank Bhd 26,502 112,546


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15. TRANSACTIONS WITH DEALERS

Details of transactions with the top 10 dealers for the six months financial period ended 31 May 2021 were as follows:

Dealers Value of trades

Percentage of total trades

RM %

RHB Investment Bank Bhd 309,813,180 23.26

Malayan Banking Bhd 209,753,999 15.75

RHB Bank Bhd 175,405,475 13.17

CIMB Islamic Bank Bhd # 151,884,700 11.40

CIMB Bank Bhd # 110,040,000 8.26

AmBank (M) Bhd 108,822,411 8.17

Hong Leong Investment Bank Bhd 82,647,707 6.20

Hong Leong Bank Bhd 70,974,000 5.33

Affin Hwang Investment Bank Bhd 56,463,750 4.24

United Overseas Bank (M) Bhd 35,592,000 2.67

Others 20,564,000 1.55

1,331,961,222 100.00

Details of transactions with the top 10 dealers for the six months financial period ended 31 May 2020 were as follows:

Dealers Value of trades

Percentage of total trades

RM %

CIMB Bank Bhd # 141,721,151 15.44

Malayan Banking Bhd 120,171,432 13.09

RHB Investment Bank Bhd 110,869,448 12.08

CIMB Islamic Bank Bhd # 91,894,000 10.01

Alliance Bank Malaysia Bhd 74,144,694 8.08

AmBank (M) Bhd 69,246,280 7.54

Hong Leong Bank Bhd 52,950,750 5.77

RHB Bank Bhd 44,021,753 4.80

Kenanga Investment Bank Bhd 41,881,944 4.56

United Overseas Bank (M) Bhd 36,648,099 3.99

Others 134,374,632 14.64

917,924,183 100.00

# Included in the transactions are trades conducted with CIMB Bank Bhd and CIMB Islamic

Bank Bhd, fellow related parties to the Manager amounting to RM110,040,000 (31.05.2020: RM141,721,151) and RM151,884,700 (31.05.2020: RM91,894,000) respectively. The Manager is of the opinion that all transactions with the related companies have been entered into in the normal course of business at agreed terms between the related party.

16. SIGNIFICANT EVENT

Please be informed that effective 1 July 2021, the Fund has appointed HSBC (Malaysia) Trustee Berhad as the Trustee of the Fund following the issuance of the Replacement Prospectus Issue No. 11.


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DIRECTORY

Head Office of the Manager Principal Asset Management Berhad (Company No.: 199401018399 (304078-K)) 10th Floor, Bangunan CIMB, Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur, MALAYSIA. Tel: (03) 2084 8888 Website www.principal.com.my E-mail address [email protected] Customer Care Centre (03) 7718 3000 Trustee for the Principal Islamic Money Market Fund MTrustee Bhd (Company No.: 163032-V) Level 15, Menara Merais, No. 1, Jalan 19/3, 46300 Petaling Jaya, Selangor, MALAYSIA. Tel: (03) 2036 5129 Fax: (03) 2072 0322 Shariah Adviser of the Principal Islamic Money Market Fund Amanie Advisors Sdn. Bhd. (Company No.: 200501007003 (684050-H)) Level 13A-2, Menara Tokio Marine Life, No 189, Jalan Tun Razak, 50400 Kuala Lumpur, MALAYSIA. Tel: (03) 2161 0260 Fax: (03) 2161 0262

http://www.principal.com.my/

mailto:[email protected]

Enquiries:

Customer Care Centre(603)7718 3000

[email protected]

Websitewww.principal.com.my

Principal Asset Management Berhad199401018399 (304078-K)

MAY PRINCIPAL ISLAMIC MONEY MARKET FUND

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