contents...invest primarily in selected shariah-compliant equities that comprise of a diversified...

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CONTENTS

Page

GROUP MANAGING DIRECTOR‟S STATEMENT

3

FUND PROFILE

4

GLOBAL AND LOCAL ECONOMIC REVIEW

8

EQUITY AND FIXED INCOME MARKET REVIEW

10

MARKET OUTLOOK AND INVESTMENT STRATEGY

12

FUND PERFORMANCE REPORT

14

SOFT COMMISSION RECEIVED FROM BROKERS

28

STATEMENT BY DIRECTORS

29

REPORT OF THE AUDITORS

30

STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2011

32

STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2010

33

STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2011

34

STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2010

35

STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2011

36

STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2010

36

CASH FLOW STATEMENT FOR FINANCIAL YEAR ENDED 31 DECEMBER 2011

37

CASH FLOW STATEMENT FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2010

38

NOTES TO THE FINANCIAL STATEMENTS 39

DETAILS OF INVESTMENTS 43

COMPARATIVE PERFORMANCE TABLE 53

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GROUP MANAGING DIRECTOR’S STATEMENT

In the Name of Allah, the Most Compassionate, the Most Merciful

It is my great pleasure to present the 2011 Annual Report of Takaful Malaysia‟s Investment-Linked Funds consisting of the Ittizan (Balanced Fund), Istiqrar (Stable Capital Fund), Ihfaz Equity Index Fund, Ittihad Growth Fund, Istifad Blue Chips Fund, Irad Dividend Fund and Ihsan Balanced Fund for the year ended 31 December 2011. The year 2011 was a challenging year for the world economy as the United States (USA) suffered weaker than expected economic performance, Japan was hit by a devastating earthquake and Europe‟s sovereign debt crisis deepened. Despite these shocks, emerging market economies had demonstrated resilience, showing a steady growth path to recovery, well ahead of major developed countries which faced challenges of low growth, high unemployment, weak housing markets and mounting fiscal burdens. Against this backdrop, the International Monetary Fund (IMF) estimated the world economy to grow at a more moderate pace of 3.8% in 2011 after expanding at 5.2% in 2010. On the domestic front, the Malaysian economy continued to expand, albeit at a more modest pace of 5.1% in 2011 (7.2% growth in 2010), driven mainly by strong domestic demand. Continued pre-emptive and accommodative monetary stance adopted by Bank Negara Malaysia coupled with implementation of the government‟s initiatives such as Economic Transformation Programme (ETP), New Economic Model and the Budget 2011 had cushioned the impact of weaker economic growth in advanced economies. Nevertheless, on the financial market, amid adverse external uncertainties and massive sell-off of major and regional equity markets, the local bourse experienced greater volatility with the Bursa Malaysia‟s main benchmark for Shariah-compliant stocks, FTSE Bursa Malaysia Emas Shariah Index lost 1,390.83 points or 13.2% in the third quarter 2011 before bouncing back to register a modest gain of 2.41% in 2011. Despite the challenging investment landscape in 2011, all our funds continued to register encouraging growth in their net asset value per unit with the best performance led by Irad Dividend Fund with a return of 6.39% against its benchmark performance of 2.41%. This is followed by Ittizan (Balanced Fund) which had registered a return of 5.22%, outperforming their benchmark return of 2.56%. Similarly, our index tracker fund, Ihfaz Equity Index Fund also gained about 4.46%, outperforming its benchmark return of 2.41% during the same period under review. You may find out more about the funds‟ information and financial performance in the following pages. In 2012, the global growth is expected to remain moderate as world investment and trade continue to expand, but at a slower pace. However, the challenges remain as possible escalation of the ongoing fiscal concerns in the advanced economies could add further strains to the international financial system and undermine the prospects for continued global growth. For Malaysia, although the current challenging external environment could present greater downside risks to its economic growth prospects for 2012, Malaysia‟s strong fundamental on the back of resilient domestic demand is expected to support its economic growth trajectory. Amidst the expected external uncertainties and market volatility in 2012, we shall continue to be prudent and vigilant in outlining the investment strategies for your funds to ensure their long-term investment objectives are met and at the same time investment risk and return is managed efficiently. Last but not least, we would like to express our utmost appreciation and gratitude for your continuous support for our Takaful Investment-Linked products mainly the newly launched Takaful myGenLife. We will continue to strive and work hard to serve you better and achieve our vision to be the preferred choice for insurance. May Allah give us His guidance, Amin.

DATO’ MOHAMED HASSAN MD KAMIL Group Managing Director

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FUND PROFILE

ITTIZAN (BALANCED FUND)

Investment Objective

To achieve reasonable returns and capital growth opportunities through selected investments in Shariah approved shares listed in Bursa Malaysia and Shariah-compliant Islamic debt securities.

Investment Strategy

Invest in a balanced asset allocation comprising of Shariah-compliant equity and Islamic debt securities and money market.

Asset Allocation

At least 30% and a maximum of 70% in Malaysian shares approved by the Shariah Advisory Council of the Securities Commission;

The balance in cash, long and short term Islamic debt securities and other liquid Islamic investments.

Performance Benchmark

70% FBM Emas Shariah Index (“FBMSI”) and 30% one-month return Maybank General Investment Account rate (“GIA”).

ISTIQRAR (STABLE CAPITAL FUND)


To achieve relatively stable pattern of investment returns over medium term through selected investment in Shariah approved shares listed in Bursa Malaysia and Shariah-compliant fixed income securities.

Investment Strategy

Invest in a balanced asset allocation comprising mainly in Islamic debt securities with smaller exposure in Shariah-compliant equity.

Asset Allocation

A maximum of 35% in Malaysian shares approved by the Shariah Advisory Council of the Securities Commission;

At least 65% and a maximum 100% in cash, long and short term Islamic debt securities and other liquid Islamic investments.


30% FBM Emas Shariah Index (“FBMSI”) and 70% one-month return Maybank General Investment Account rate (“GIA”).

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IHFAZ EQUITY INDEX FUND


To achieve returns that tracks the performance of FBM Emas Shariah Index.

Investment Strategy

Invest mainly in the top forty of the Index component stocks; closely tracking the movement of the Benchmark in the medium to long term;

Constant rebalancing of the component stocks to closely track the benchmark performance.

Asset Allocation

90% - 95% in Malaysian shares approved by the Shariah Advisory Council of the Securities Commission;

The balance in Islamic money market instruments.


FBM Emas Shariah Index (“FBMSI”).

ITTIHAD GROWTH FUND


To achieve capital growth opportunities and dividend income through selective investments in Shariah approved shares listed in Bursa Malaysia.

Investment Strategy

Invest primarily in selected Shariah-compliant equities that comprise of a diversified portfolio of index-linked companies, blue-chip stocks and companies with growth prospects and attractive dividend yields that are listed on Bursa Malaysia;

Active portfolio management – constant review on asset allocation and stocks holding. Stock/portfolio turnover would be practically high in search for opportunities in capital gain and dividend yield stocks.

Asset Allocation


The balance in cash, long and short term Islamic debt securities and other liquid Islamic investments.



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ISTIFAD BLUE CHIPS FUND


To achieve consistent capital growth in the long run through investments in Shariah-compliant Blue Chips Shares.

Investment Strategy

Invest primarily in Shariah-compliant equities with higher market capitalisation to achieve long term capital growth;

Active portfolio management - constant review on asset allocation and stock holding in search of stocks that meet the objective of the Fund.

Asset Allocation





IRAD DIVIDEND FUND


To achieve dividend income in the long term through selective investments in high dividend yield shares that provide a minimum annual gross dividend of 4.00%.

To achieve capital growth through selective investments in Blue Chips Shares that could potentially provide capital growth in the long run.

Investment Strategy

Invest primarily in dividend yield stocks that provide a minimum annual gross dividend of 4.00% as well as blue-chip stocks that could potentially grow in the long run;

At all times, exposure in stocks that yield a minimum of 4% annual gross dividend shall be at least 50% of the equity exposure;

Constant review on asset allocation and stock holding in search of stocks that comply with the objectives of the Fund.

Asset Allocation


At least 50% of the equity exposure is in dividend yield shares;




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IHSAN BALANCED FUND


To achieve moderate streams of income and consistent capital growth over the medium-to-long term period by investing in a diversified portfolio of investments;

To construct a diversified portfolio containing a balanced mixture of equities and fixed income securities.

Investment Strategy

Invest in a balanced asset allocation comprising of Shariah-compliant equity, debt securities and money market.

Asset Allocation


At least 10% and a maximum of 60% in Islamic debt securities and Malaysian Government Investment Issues;



40% FBM Emas Shariah Index (“FBMSI”) and 60% 12 months return Maybank General Investment Account rate (“GIA”).

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GLOBAL AND LOCAL ECONOMIC REVIEW

This annual report is for the period from 1 January 2011 until 31 December 2011. Global growth slowed throughout the year as the global economy was traumatized with a series of economic woes, natural disasters, political upheavals as well as the European sovereign credit turmoil. In 1Q2011, most advanced economies registered moderate growth as domestic demand remained subdued amid elevated unemployment and the contraction of the Japanese economy after the March 11 earthquake. The moderate growth remained in 2Q2011 on account of fiscal sustainability issues and financial distress. Also, supply chain dislocations caused by the earthquake and tsunami led to a slowdown in global manufacturing and trade activities. Global economic activity continued to expand at a slower pace in 3Q2011, largely due to the sluggish recovery in the advanced economies which impacted by the persistently high unemployment, financial sector de-leveraging, large fiscal deficits, and a lack of resolution to the Eurozone debt crisis. Nonetheless, 4Q2011 turned out better as advanced economies like United States (US) reported better-than expected economic data. Correspondingly, the International Monetary Fund (IMF), in the January 2012 issue of the World Economic Outlook (WEO), revised its projection of the world economic growth downward to 3.8% in 2011 from the earlier forecast of 4.0% in September 2011, following the escalation of the sovereign debt crisis in Europe. The Eurozone already entered a technical recession at the end of 2011, as signaled by the drop in its manufacturing and services Purchasing Managers Indices (PMI) which stayed below 50. The still unfolding European debt crisis has dampened the region‟s growth and is weighing on the exports of the European Union‟s key trading partners, including China, which saw its exports fall to 13.4% in December 2011 as compared with 17.9% in year earlier due to the softening demand. On the positive side, however, the US economy was reported as getting into better shape with encouraging economic data such as a drop in the unemployment rate to 8.5% in December 2011. This is the lowest it has been in nearly three years. Manufacturing also grew at its fastest pace in six months. With continued improvements in the housing and labour markets as well as inventory buildup, the US economy reported a strong economic growth rate of 2.8% in 4Q2011 (1.8%: 3Q2011), making it a third straight quarter of accelerated growth. In Asia, economic growth and activity though resilient, has moderated due to policy tightening in early 2011 and slower external demand. Nevertheless, domestic demand was sustained, supported by favourable labour market conditions, continued access to financing, rising income, and high commodity prices. According to Bank Negara Malaysia‟s Fourth Quarter 2011 Report, Singapore‟s economy expanded at a slower rate of 3.6% (3Q2011: 5.9%), as activity in the manufacturing sector moderated. Growth in PR China, Hong Kong and Chinese Taipei moderated due to slower export activity. Korea‟s economy expanded by 3.4% (3Q2011: 3.5%) supported by domestic demand. Indonesia‟s economic growth was sustained at 6.5% (3Q2011: 6.5%), due largely to continued investment activity and resilient private consumption. The Philippines‟ economy grew by 3.7% (3Q2011: 3.6%), supported mainly by private consumption. In reflection of global economy slowdown, Malaysia‟s real gross domestic product (GDP) growth moderated to 5.2% in 4Q2011 from 5.8% in 3Q2011 on account of a slowdown in net exports and manufacturing growth, but supported by stronger-than-expected domestic demand and services growth. For the whole year, Malaysia‟s economy grew by 5.1% (7.2%: 2010) which reflected resilient domestic demand conditions toward the latter part of the year.

Graph 1 Malaysia’s Quarterly Real GDP Growth (% y-o-y)

Source : Bloomberg

6.3 5.94.6

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Additionally, Malaysian economy was also spurred by the government‟s pump priming activities such as the Economic Transformation Programme (ETP) which focused on sustainable initiatives to transform Malaysia into a high-income nation by 2020. To date, Prime Minister has announced 110 new projects under the ETP which committed to invest over RM177bn up to 2020, approximately 70% of the projects have taken-off. Separately, foreign direct investment (FDI) rose 12.3% to RM32.9 billion in 2011 from RM29.3 billion in 2010, indicating continued improvement of FDI flows into Malaysia. Despite the external uncertainties and weakening global growth, Malaysia‟s economic fundamental remains good as reflected in the healthy current account surpluses together with rising international reserves. Malaysia‟s annual current account surplus in the balance of payments rose from RM88.1 billion in 2010 to RM97.9 billion in 2011, on the back of continuing higher goods surplus and lower income deficits. Similarly, Bank Negara Malaysia‟s international reserves have increased steadily on a monthly basis from RM328.6 billion (US$106.5 billion) since early 2011 to a high of RM423 billion (US$133.6 billion) as at end December 2011. Currently, the reserves position is sufficient to finance 9.6 months of retained imports and is 4.1 times the short-term external debt.

Graph 2 Malaysia Inflation Rate (monthly)

Source : Bloomberg

Headline inflation, as measured by the Consumer Price Index (CPI), is now on a downward trajectory after peaking at 3.5% in June 2011. For December 2011, the Malaysia‟s CPI slowed further to 3.0% as commodity prices softened and demand condition weakened. Consequently, Bank Negara Malaysia during its meeting in November 2011, maintained the benchmark Overnight Policy Rate (OPR) at 3.00% for a third straight meeting in order to support the domestic growth as global economic recovery was slower than expected. Similarly, the Statutory Reserve Requirement (SRR) was also kept at 4.0% from the previous increase in July 2011, as short-term capital has reversed into outflows gradually since August 2011. Note that central banks around the world have exercised restraint in raising rates as the global economic outlook gets cloudier and inflationary pressure is cooled.

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EQUITY AND FIXED INCOME MARKET REVIEW

Equity Markets The year 2011 was a volatile year for the local bourse. This was on the back of a global stock market rout caused by political uncertainties in the Middle East countries, natural disasters that hit global supply chains, the political bickering and standoff on the US debt ceiling, the downgrade of US credit rating by the Standard & Poor‟s (S&P), worsening euro-debt crisis as well as mounting evidence of slowing growth in many economies.

Graph 3 FY2011 FBM Emas Shariah Index and FBM KLCI Performance

Source : Bloomberg and Bursa Malaysia

Commencing the financial period under review on a strong note at 10,058.15 points on 31 December 2010, the main benchmark for the Shariah-compliant stocks, FTSE-Bursa Malaysia Emas Shariah Index (“FBMSI”) recorded an upward move to close at 3-year high of 10,554.88 points on 17 January 2011 following an extended rally from the year 2010. The local bourse however fell into a correction mode after political uncertainties in the Middle East caused the spike in crude oil prices. The market thereafter underwent a volatile trading period on renewed concern of the euro-debt crisis as sovereign ratings in peripheral Europe were downgraded by international ratings agencies. Subsequently, the FBMSI closed sharply lower below the 10,000 mark in early March 2011 in tandem with the plunge in regional markets after a powerful earthquake rocked Japan‟s north-eastern coast, triggering a tsunami and damaged nuclear reactors that sent investors to panic selling. Moving into the second quarter of 2011 (2Q2011), the global equity market regained some of its lost ground after the bargain-hunting activities came back on improved market sentiment as European leaders came-out with some positive comments to resolve the euro-debt crisis. Domestically, the positive performance of the local stock market was partly on account of increased economic activities and the ongoing Economic Transformation Programmes (ETPs) and Government Transformation Programmes (GTPs) as well as positive corporate merger and acquisition (M&A) news flow. Supported by the higher participation of retail investors and strong foreign buying momentum, the FBMSI bounced back to close slightly higher by 1.4% quarter-on-quarter at 10,517.49 points on 30 June 2011. In the 3Q2011, the stock market was increasingly volatile, mirroring other major and regional markets. In July, the FBMSI fell 1.4% from the previous month following the unresolved European debt crisis and uncertainties arising from the US debt ceiling negotiation. The market continued to drop 7.4% in August, as risk averse investors took the cue from the massive sell-off on Wall Street due to the credit rating cut by the international rating agency Standard & Poor (S&P) and the higher risk of a double-dip recession in the US economy. The sharp drop in the local market was also

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attributed to the massive outflow of foreign funds from the equity market amidst continued volatility and deleveraging in the global financial markets. Bank Negara Malaysia reported that about RM3.8 billion of foreign funds net outflow from Malaysia in August 2011, the biggest monthly outflow since 2008 financial crisis. Subsequently, the FBMSI plunged further to a year low of 8,735.26 points on 26 September 2011, shedding another 9.0% compared to the previous month due to the escalating of Eurozone sovereign debt crisis and weak global economic outlook,. For the quarter, the local bourse experienced its worst performance since 2008 financial crisis after the FBMSI lost 1,390.83 points or -13.2% quarter-on-quarter to close at 9,126.66 points on 30 September 2011.

Graph 4 Total Net Foreign Fund Flows Into Malaysia (RM bil monthly)

Source : Bank Negara Malaysia, Affin Investment Bank Bhd

As the 4Q2011 started, investors‟ sentiment recovered following the announcements of rescue loan packages for the highly-indebted European nations. In October, the FBMSI increased 8.7% from the previous month following the Budget 2012 announcement, which included the move to liberalise 17 services sub-sectors. The market decreased slightly by 0.8% in November, as investors remained concerned over the unresolved Eurozone debt crisis spreading from Greece to Italy and affecting the global economy. Subsequently, the FBMSI recorded a month-on-month increase of 4.6% in December 2011, supported by the positive performance on Wall Street following better-than-expected US economic indicators. At the end of 2011, the FBMSI registered a modest gain of 2.41% year-on-year to close at 10,300.29 points whereby the FBM KLCI rose slightly by 0.8% to close at 1,530.73 points as at end-December 2011.

Fixed Income Markets

2011 continued to see vibrant activities in fixed income markets supported by a very strong demand and supply dynamics. As the developed markets were still plagued with sovereign debt crises, particularly within the Eurozone areas, the Malaysian fixed income market saw an increasing flow of foreign capital buying into stable Malaysian sovereign credits. This has resulted in increased foreign holdings in MGS, from RM75.20 billion in January 2011 to RM102.53 billion by end of the year. On the back of the strong buying interest by foreign capitals, coupled with anticipated easing monetary policy in 2012 to support growth, MGS yield across the tenure was traded lower towards the end of the year. The yield for MGS 10-year for instance was traded lower to 3.69% from 4% a year before. Similar attributes were observed for the corporate sukuk segment. The corporate sukuk continued to witness net buying interest in particular from local institutional investors which were fueled by the flush of liquidity. New issuances which picked up in the 3Q2011 and 4Q2011 saw strong demand that pushed the order books to strongly oversubscribed. In the meantime, the market also witnessed investors who were aggressively bidding in the secondary market, in particular for longer dated high credit paper for a better yield pick-up. AAA rated paper for 5, 7, and 10 years traded lower by 41bps, 51bps and 69bps as compared to a year ago to close at 3.83%, 4.00% and 4.22% respectively.

Money Markets For Islamic money market, short-term rates rose over the period under review following Bank Negara Malaysia‟s move to increase OPR by 25 basis point from 2.75% to 3.00% in May 2011. The 1-Month General Investment Account Maybank rose from 2.77% at the beginning of the review period to 3.00% at the end of the financial period under review.

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MARKET OUTLOOK AND INVESTMENT STRATEGY

Market Outlook In 2011, despite overwhelming market optimism at the beginning of the year, the global equity market, including Malaysia‟s, underwent a very volatile period given heightened external risks and slower-than-expected global economic recovery. Earlier hopes of a pick-up in the global economy was dented in August 2011 as the global equity markets took a battering, taking an early cue from S&P downgrading United States (US) AAA rating to AA+, and despite the increasing of the US debt-ceiling that managed to steer US away from a temporary debt default. To top it off, market jitters were exacerbated by a worsening Eurozone debt crisis with Greece seemingly unable to satisfy its austerity measures that would prevent it from securing further bailout-loans from the Eurozone emergency fund. Looking ahead in 2012, the challenges facing investors are significant, with expectations that the volatility on stock markets will remain elevated throughout the year. This following development in the domestic and global economies with the outlook of European turmoil would threaten global economy. Accordingly, the International Monetary Fund (IMF) has slashed its growth forecasts for most major countries in 2012 and urged governments to adjust the “rhythm” of their austerity measures to avoid derailing economic recovery. In an update of the forecasts in its autumn World Economic Outlook, the IMF projected a world GDP growth of 3.3% in 2012, down from the 4.0% it forecast in September. The unfolding sovereign debt crisis in Europe is envisaged to affect the market sentiment further as the outcome from December 2011 EU summit, in which the countries agreed to a fiscal framework and the need for an enforcement mechanism, remains unclear. As the IMF reckons that most major economies were decelerating but not collapsing, it pinned much of the blame on the debt crisis in the Eurozone, where it expected Euro area GDP to shrink by 0.5% in 2012. Conversely, growth in the US economy, although modest by some measures, has at least been on an improving trajectory over the course of 2011. This could bode well for 2012. Liquidity is returning and credit markets have improved considerably. Furthermore, the housing market may finally be hitting bottom. Thus, the US recovery is expected to continue with the IMF forecasting its GDP to grow by 1.8% during the year driven by consumer spending as a key factor. This in turn may provide some support to corporate earnings. Again, the developing world and the high-growth Asian economies are expected to continue to outpace the advanced economies of Europe, Japan and the US as the power balance shifts. On the local front, external headwinds are unlikely to take centre stage; giving way to domestic affairs as Malaysia‟s economic growth is expected to remain resilient, supported by domestic factors such as domestic consumption as well as private and government investments. This is in light of the weak external demand which likely to dampen Malaysia‟s exports growth, especially for electrical and electronic (E&E) products, which account for close to 42% of the country‟s total exports. Going forward, domestic demand will likely be supported by the implementation of projects under the Economic Transformation Programme (ETP), the implementation of which is likely to be speed up by the government to shield the local economy from the increased risk of a “double-dip” global recession. A bright spot would be the export of commodities such as palm oil which is expected to remain stable. Overall, government projected Malaysia‟s GDP to grow 5% to 6% YoY in 2012 although the market consensus is looking a slower growth than 5.1% recorded in 2011. Moreover, the slowdown in economic growth and demand will likely lead to lower inflation rates. With lower inflationary pressures, with the inflation rate falling to a 6-month low of 3% in December 2011, Bank Negara Malaysia will likely cut the Overnight Policy Rate (OPR) in 2012 if the economics worsen significantly. As for the outlook of the local equity market in 2012, the external events and developments emanating from Europe, US and China will continue to influence the direction of the local bourse and keep markets on a volatile trajectory in the foreseeable future. However, weaker external development shall be somewhat offset by robust domestic demand supported by accommodative monetary policies and strong consumer spending. Moreover, Bursa Malaysia is known as a defensive market given the resilient domestic situation driven by earnings profiles, high domestic liquidity, low foreign share holdings of Malaysia equities, and strong participation of government-linked investment funds. All of this will cushion the market downside risks. On the fixed income side, MGS is expected to be actively traded in a bull flattening manner particularly in 1H2012 in anticipation of easing monetary policy to support the domestic growth. The local market is also expected to continuously attract strong interests particularly from foreign investors as part of their currency trading or asset allocation strategy having greater exposure in the emerging markets which have been, thus far, insulated from the developed market sovereign credit crisis.

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On the corporate sukuk, the supply and demand dynamic is expected to be strong. On the supply side, it is expected that bigger issuances in 2012, around RM90 billion, of which one-third of it, or RM30.6 billion, would be from PLUS‟s issuances which have been completed in January 2012. The remaining issuances for 2012 are expected from infrastructure related projects under the ETP, IPP related projects, the telco sector, Danajamin and Cagamas. With flush liquidity in the market, it is expected that the market will continue to see a net buying interest of corporate sukuk in both primary and secondary markets. Nonetheless, as there are signs of increased risk in the global economy, overall credit sentiment is expected to be weakened though at a lesser degree compared to the 2008-09 global financial meltdowns. In relation to that, market interest will flock to safe-haven papers; namely near-sovereigns, bank papers, and bellwether “AAA” and “AA” papers, while the non-bank “A” segment will continue to remain lethargic.

Investment Strategy Looking ahead, in anticipation of the market volatility that has primarily been influenced by external factors, strategies for equity investment shall continuously be concentrating on stock pickings. Going forward, these shall be cautiously undertaken in line with the fund stated objectives and asset allocation strategies in order to attain opportunities to enhance the overall returns. For certain funds in which asset allocations strategies have to meet a certain level of exposure in fixed income, the focus and concentration would be more on corporate sukuk within AAA and AA segments for better liquidity and yield pick-up. Active duration management would be the key focus in which the fund may be positioned to have a longer duration in view of the diminishing inflation threat as global economic continuously be engulfed with a negative outlook.

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FUND PERFORMANCE REPORT

ITTIZAN (BALANCED FUND)

Performance Review For the 12 months ended 31 December 2011, Ittizan (Balanced Fund) outperformed its benchmark whereby it recorded a return of 5.22% against its benchmark of 2.56% (70% FBMSI and 30% 1-Month GIA).

Asset Allocation In terms of asset allocation, the fund has invested 58.6% in equity, 25.1% in Islamic debt securities and the remaining is in money market/cash. On equity sectoral allocation, trading & services was the top sector the fund invested in with 31.4% exposure. The details of asset allocation and the top 5 investment holdings are shown below:-

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25.1%

16.3%

Construction Consumer Products

Industrial Products

Infrastructure Plantation Property Trading & Services

REITS Islamic Debt Securities

Money Market &

Cash

Total Return (%) Average Annual Return (%)

1-Year 3-Year 5-Year 1-Year 3-Year 5-Year

Ittizan 5.22 9.22 44.80 5.22 3.07 8.96

Benchmark 2.56 7.01 39.97 2.56 2.34 7.99

P a g e | 15

Fees/Charges levied to the Fund Among the fees/charges levied to the fund are as follows: a) management fee which is calculated based on 1.5% per annum of the Gross Net Asset Value (NAV); b) custodian fee which is calculated based on 0.03% per annum of equity market value and at par value of debt securities.

Details on Distribution There was no distribution declared for Ittizan (Balanced Fund) for the period ended 31 December 2011.

Descriptions of any changes in Fund’s Objectives and Strategies There were no material changes in fund‟s objectives and strategies for the period ended 31 December 2011.

58.6%

25.1%

16.3%

Equities

Islamic Debt Securities

Money Market & Cash

3.0%

3.1%

3.7%

4.8%

5.5%

Axiata Group Bhd

DiGi.Com Bhd

Petronas Gas Bhd

Tenaga Nasional Bhd

Telekom Malaysia Bhd

Top 5 Investment Holdings

P a g e | 16

ISTIQRAR (STABLE CAPITAL FUND)

Performance Review For the 12 months ended 31 December 2011, Istiqrar (Stable Capital Fund) outperformed its benchmark whereby it recorded a return of 4.45% against its benchmark of 2.77% (30% FBMSI and 70% 1-Month GIA).



Istiqrar 4.45 2.08 19.06 4.45 0.69 3.81

Benchmark 2.77 5.71 22.13 2.77 1.90 4.43

Asset Allocation In terms of asset allocation, the fund has invested 29.6% in equity, 69.6% in Islamic debt securities and the remaining is in money market/cash which is in accordance with its asset allocation strategy. On equity sectoral allocation, trading & services was the top sector the fund invested in with 16.1% exposure. The details of asset allocation and the top 5 investment holdings are shown below:-

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Re

turn

%

Istiqrar vs Benchmark

Istiqrar Benchmark

1.2% 1.2% 3.2% 2.7% 2.2% 1.2%

16.1%

1.8%

69.6%

0.7%


Industrial Products


REITS Islamic Debt Securities

Money Market & Cash

P a g e | 17

Fees/Charges levied to the Fund Among the fees/charges levied to the fund are as follows: a) management fee which is calculated based on 1.5% per annum of the Gross Net Asset Value (NAV); b) custodian fee which is calculated based on 0.03% per annum of equity market value and at par value of debt securities;

Details on Distribution There was no distribution declared for Istiqrar (Stable Capital Fund) for the period ended 31 December 2011.


69.6%

29.6%

0.7%


Equities

Money Market & Cash

6.4%

6.6%

6.7%

6.7%

7.0%

Tesco Stores (M)

National Bank of Abu Dhabi

Kapar Energy

Rantau Abang Capital Berhad

Binariang Gsm Sdn Bhd

Top Investment 5 Holdings

P a g e | 18

IHFAZ EQUITY INDEX FUND

Performance Review For the period under review, the NAV per unit of Ihfaz Equity Index Fund recorded a positive return of 4.46%, outperforming the gain of 2.41% in its benchmark of FBMSI. Additionally, in line with the fund strategy to closely track its benchmark, its tracking error has consistently within the parameters set by the fund. For the period, the fund‟s tracking error stood at 1.62.



Ihfaz 4.46 - - 4.46 - -

Benchmark 2.41 - - 2.41 - -

Tracking Error 1.62 - - 1.62 - -

Note : The fund only has 2 years financial track record.

Note : Tracking error (also called active risk) is a measure of the deviation from the benchmark. It measures how closely a portfolio follows the index to which it is benchmarked. The index fund could have a tracking error close to zero, while an actively managed portfolio would normally have a higher tracking error.

Asset Allocation In terms of asset allocation, the fund has invested 94.4% in equity and the remaining is in money market/cash. On equity sectoral allocation, trading & services was the top sector the fund invested in which is in accordance to the Bursa Malaysia FBMSI index component allocation. The details of asset allocation and the top 5 investment holdings are shown below:-

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

-15.0

-10.0

-5.0

0.0

5.0

10.0


Re

turn

(%

)

Ihfaz vs Benchmark and Tracking Error

Ihfaz Benchmark Tracking Error

Tracking Erro

r (%)

9.4%

2.6%

11.1%7.2%

12.7%

4.6%

46.8%

5.6%


Industrial Products Infrastructure Plantation Property Trading & Services Money Market & Cash

http://en.wikipedia.org/wiki/Active_risk

P a g e | 19

Fees/Charges levied to the Fund Among the fees/charges levied to the fund are as follows: a) management fee which is calculated based on 1.5% per annum of the equity market value and 1% of the

remaining Gross Net Asset Value (NAV); b) custodian fee which is calculated based on 0.03% per annum of equity market value and at par value of debt

securities.

Details on Distribution There was no distribution declared for Ihfaz Equity Index Fund for the period ended 31 December 2011.


94.4%

5.6%

Equities

Money Market & Cash

5.5%

5.5%

6.7%

6.9%

7.8%

DiGi.Com Bhd

Petronas Gas Bhd

IOI Corp Bhd

Sime Darby Bhd

Axiata Group Bhd


P a g e | 20

ITTIHAD GROWTH FUND

Performance Review For the financial year ended 31 December 2011, Ittihad Growth Fund outperformed its benchmark, FBMSI whereby it recorded a return of 3.23% against its benchmark of 2.41%.



Ittihad 3.23 - - 3.23 - -

Benchmark 2.41 - - 2.41 - -


Asset Allocation In terms of asset allocation, the fund has invested 71.3% in equity and the remaining is in money market/cash. On equity sectoral allocation, trading & services was the top sector the fund invested in with 37.2% exposure. The details of asset allocation and the top 5 investment holdings are shown below:-

-16.0

-11.0

-6.0

-1.0

4.0

9.0

14.0


turn

%

Ittihad vs Benchmark

Ittihad Benchmark

9.3% 8.1%

1.6%

7.1% 8.1%

37.2%

28.7%

Construction Industrial Products Infrastructure Plantation Property Trading & Services Money Market & Cash

P a g e | 21



securities.

Details on Distribution There was no distribution declared for Ittihad Growth Fund for the period ended 31 December 2011.


71.3%

28.7%

Equities

Money Market & Cash

4.6%

4.7%

4.8%

4.9%

5.6%

Parkson Holdings Bhd

Axiata Group Bhd

Petronas Gas Bhd

Tenaga Nasional Bhd

IOI Corp Bhd


P a g e | 22

ISTIFAD BLUE CHIPS FUND

Performance Review For the financial year ended 31 December 2011, the NAV per unit of Istifad Blue Chips Fund is recorded a positive return of 2.23% in tandem with the positive movement of the benchmark, FBMSI which recorded an increase of 2.41% during the same period under review.



Istifad 2.23 - - 2.23 - -

Benchmark 2.41 - - 2.41 - -


Asset Allocation In terms of asset allocation, the fund has invested 70.0% in equity and the remaining is in money market/cash. On equity sectoral allocation, construction was the top sector the fund invested in as most of the blue chip companies are included in this sector. The details of asset allocation and the top 5 investment holdings are shown below:-

(14.0)

(9.0)

(4.0)

1.0

6.0

11.0


Re

turn

%

Istifad vs Benchmark

Istifad Benchmark

8.9%

3.0%

8.6%

4.1%

8.6%

3.8%

33.0%30.0%


Industrial Products


Money Market & Cash

P a g e | 23


remaining Gross Net Asset Value (NAV). b) custodian fee which is calculated based on 0.03% per annum of equity market value and at par value of debt

securities.

Details on Distribution There was no distribution declared for Istifad Blue Chips Fund for the period ended 31 December 2011.


70.0%

30.0%

Equities

Money Market & Cash

4.4%

4.6%

4.6%

6.0%

6.1%

Petronas Gas Bhd

Parkson Holdings Bhd

Gamuda Bhd

Tenaga Nasional Bhd

IOI Corp Bhd


P a g e | 24

IRAD DIVIDEND FUND

Performance Review For the 12 months ending 31 December 2011, the NAV per unit of Irad Dividend Fund recorded a return of 6.39%, outperforming its benchmark return of 2.41% of FBMSI. The fund which focused on high dividend yielding stocks tend to be less volatile as compared to the overall market as reflected in the fund performance for the period under review.



Irad 6.39 - - 6.39 - -

Benchmark 2.41 - - 2.41 - -


Asset Allocation In terms of asset allocation, the fund has invested 72.3% in equity and the remaining is in money market/cash. On equity sectoral allocation, trading & services was the top sector the fund invested in with 32.1% allocation. The details of asset allocation and the top 5 investment holdings are shown below:-

(14.0)

(9.0)

(4.0)

1.0

6.0

11.0


turn

%

Irad vs Benchmark

Irad Benchmark

4.3%6.2%

8.9%6.6% 5.3% 5.4%

32.1%

3.5%

27.7%


Industrial Products


REITS Money Market & Cash

P a g e | 25



securities.

Details on Distribution There was no distribution declared for Irad Dividend Fund for the period ended 31 December 2011.


72.3%

27.7%

Equities

Money Market & Cash

3.5%

3.7%

3.7%

4.4%

6.5%

DiGi.Com Bhd

UMW Holdings Bhd

Petronas Dagangan Bhd

Petronas Gas Bhd

Telekom Malaysia Bhd


P a g e | 26

IHSAN BALANCED FUND

Performance Review For the financial year ended 31 December 2011, the NAV per unit of Ihsan Balanced Fund recorded a positive return of 2.56% in tandem with the positive movement of its benchmark of 2.81% (40% FBMSI and 60% 12-Month Maybank GIA rate).



Ihsan 2.56 - - 2.56 - -

Benchmark 2.81 - - 2.81 - -

Note : The fund only has 1 year financial track record.

Asset Allocation As at 31 December 2011, the majority of the fund‟s asset allocation is towards Islamic debt securities in line with its stated asset allocation mandate to invest up to 60% in Islamic debt securities. The fund had invested 51.1% in Islamic debt securities with the top holding is Binariang GSM Sdn Bhd sukuk with a holding of 7.9% of the fund‟s NAV. The details of asset allocation and the top 5 investment holdings are shown below:-

(5.0)

(3.0)

(1.0)

1.0

3.0

5.0


Re

turn

%

Ihsan vs Benchmark

Ihsan Benchmark

2.0% 2.0%5.6%

1.9%5.0%

1.5%

13.5%

51.1%

17.4%


Industrial Products



Money Market & Cash

P a g e | 27

Fees/Charges levied to the fund Among the fees/charges levied to the fund are as follows: a) management fee which is calculated based on 1.2% per annum of the Gross Net Asset Value (NAV); b) custodian fee which is calculated based on 0.03% per annum of equity market value and at par value of debt

securities.

Details on Distribution There was no distribution declared for Ihsan Balanced Fund for the period ended 31 December 2011.


51.1%

31.5%

17.4%


Equities

Money Market & Cash

7.3%

7.3%

7.4%

7.5%

7.9%

Lingkaran Transkota Sdn Bhd

Westports Malaysia Sdn Bhd

National Bank of Abu Dhabi

Padiberas Nasional Bhd

Binariang GSM Sdn Bhd


P a g e | 28

SOFT COMMISSION RECEIVED FROM BROKERS

Soft commissions received from brokers may be retained by the Company on behalf of the funds provided that the services rendered are related to the management of the investment-linked funds and of demonstrable benefit to certificate owners as per the requirements of Clause 6.2 of the Guidelines on Investment-Linked Insurance/Takaful Business. During the financial year under review, the management company had received on behalf of the funds, soft commissions in the form of research materials and investment related publications which are incidental to the investment management of the funds. Meanwhile, all dealings with brokers are executed at competitive market rates.

P a g e | 29

STATEMENT BY DIRECTORS

In the opinion of the Manager, the Takaful Investment-Linked Funds („‟Funds‟‟) financial statements set out on pages 32

to 42, comprising the Statements of Assets and Liabilities as at 31 December 2011 and the related Statements of

Income and Expenditure, Changes in Net Asset Value and cash flow of the Funds for the financial year ended 31

December 2011 together with the notes thereto, have been drawn up in accordance with the Guidelines on Investment-

Linked Insurance/Takaful Business issued by Bank Negara Malaysia and give true and fair view of the financial position

of the Funds as at 31 December 2011 and their financial performance and the movements in the Statements of

Changes in Net Assets attributable to the unitholders of the Funds for year ended on that date.

Signed in accordance with a resolution of the Directors: ………………………………………………………… Dato’ Paduka Ismee Ismail ………………………………………………………… Dato’ Mohamed Hassan Kamil Kuala Lumpur, Date : 22 March 2012

P a g e | 30

REPORT OF THE AUDITORS to the unitholders of the Takaful Malaysia‟s Investment-Linked Funds (Company No. 131646-K) (Incorporated in Malaysia)

Report on the Financial Statements

We have audited the financial statements of Takaful Investment-Linked Funds (“Funds”) of Syarikat Takaful Malaysia

Berhad, which comprise the Statements of Assets and Liabilities as at 31 December 2011, and the related Statements

of Income and Expenditure, Changes in Net Asset Value and cash flow of the Funds for the year then ended, and a

summary of significant accounting policies and other explanatory information, as set out on pages 32 to 42.

Directors’ Responsibility for the Financial Statements

The Directors of the Manager are responsible for the preparation of these financial statements that give a true and fair

view in accordance with the Guidelines on Investment-Linked Insurance/Takaful Business, and for such internal control

as the Directors determine is necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in

accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free

from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on our judgment, including the assessment of risks of material

misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider

internal control relevant to the Funds‟ preparation and fair presentation of the financial statements in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Funds‟ internal control. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by the Directors of the Manager, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Funds as at 31 December

2011 and of their financial performance and changes in net assets attributable to the unitholders of the Funds for the

year then ended in accordance with the accounting policies set out in Note 1 to the financial statements and the

Guidelines on Investment-Linked Insurance/Takaful Business.

P a g e | 31

Other Matters

This report is made solely to the unitholders of Takaful Investment-Linked Funds, as a body, in accordance with the

Guidelines on Investment-Linked Insurance/Takaful Business and for no other purpose. We do not assume

responsibility to any other person for the content of this report.

KPMG Desa Megat & Co Firm Number: AF 0759 Chartered Accountants Petaling Jaya, Selangor

Date : 22 March 2012

P a g e | 32

STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2011 ITTIZAN ISTIQRAR IHFAZ ITTIHAD ISTIFAD IRAD IHSAN

Note RM RM RM RM RM RM RM

ASSETS


2 5,339,375 8,154,849 - - - - 1,765,775

Quoted Shares 3 12,434,491 3,471,724 4,774,381 2,701,096 2,570,304 2,705,781 1,089,588

Other Assets 211,161 178,163 287,330 76,409 119,558 113,189 137,077

Deposits with Financial Institutions

3,965,000 200,000 - 1,106,000 1,098,000 1,041,000 561,000

Cash and cash equivalents

7,589 49,552 262,528 2,039 1,673 3,119 1,480

21,957,616 12,054,288 5,324,239 3,885,544 3,789,535 3,863,089 3,554,920

LIABILITIES

Other Liabilities 718,378 338,615 265,660 99,258 117,080 121,826 96,529

718,378 338,615 265,660 99,258 117,080 121,826 96,529

Net Asset Value 21,239,238 11,715,673 5,058,579 3,786,286 3,672,455 3,741,263 3,458,391

REPRESENTED BY

Certificate holders Capital

10,756,647 8,215,847 4,132,579 3,473,439 3,412,910 3,383,459 3,390,879

Accumulated Income Carried Forward

10,482,591 3,499,826 926,000 312,847 259,545 357,804 67,512

21,239,238 11,715,673 5,058,579 3,786,286 3,672,455 3,741,263 3,458,391

Number of Units

13,871,401 9,423,878 3,790,811 3,383,972 3,335,751 3,306,250 3,326,291

Net Asset Value Per Unit

1.5311 1.2432 1.3344 1.1189 1.1009 1.1316 1.0397

P a g e | 33

STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2010 ITTIZAN ISTIQRAR IHFAZ ITTIHAD ISTIFAD IRAD IHSAN

Note RM RM RM RM RM RM RM

ASSETS


2 4,670,725 7,547,400 - - - - 1,819,800

Quoted Shares 3 11,523,620 3,824,330 3,734,589 2,661,493 2,497,806 1,921,757 319,950

Other Assets 2,688,635 297,254 212,812 70,255 44,936 42,495 135,430


2,416,000 - - 894,534 1,126,000 1,564,935 973,000

Cash and cash equivalents

730 345,208 332,974 56,126 290 47,017 6,253

21,299,710 12,014,192 4,280,375 3,682,408 3,669,032 3,576,204 3,254,433

LIABILITIES

Other Liabilities 638,397 218,157 269,571 259,701 319,047 290,757 128,174

638,397 218,157 269,571 259,701 319,047 290,757 128,174

Net Asset Value 20,661,313 11,796,035 4,010,804 3,422,707 3,349,985 3,285,447 3,126,259

REPRESENTED BY

Certificate holders Capital

11,160,436 8,769,775 3,163,732 3,162,614 3,115,268 3,091,799 3,085,186

Accumulated Income Carried Forward

9,500,877 3,026,260 847,072 260,093 234,717 193,648 41,073

20,661,313 11,796,035 4,010,804 3,422,707 3,349,985 3,285,447 3,126,259

Number of Units

14,199,486 9,910,043 3,140,055 3,158,543 3,112,006 3,088,798 3,084,619

Net Asset Value Per Unit

1.4551 1.1903 1.2773 1.0836 1.0765 1.0637 1.0135

P a g e | 34

STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2011 ITTIZAN ISTIQRAR IHFAZ ITTIHAD ISTIFAD IRAD IHSAN RM RM RM RM RM RM RM Income Gross Dividend Income 383,021 120,886 117,042 86,446 81,876 92,796 35,206 Profit Income: Islamic Debt Securities 216,202 358,870 - - - - 86,973 Islamic Investment


136,096 23,030 21,001 25,993 27,981 34,863 13,649

Profit on Disposal: Islamic Debt Securities 96,682 114,815 - - - - 4,000 Quoted Shares 1,339,728 347,367 242,248 209,383 148,060 121,807 5,421 Unrealised Capital Gain - - - - - 41,365 -

2,171,729 964,968 380,291 321,822 257,917 290,831 145,249

Outgo Fees (313,606) (178,784) (63,184) (49,459) (47,224) (46,605) (39,891) Unrealised Capital Loss (752,322) (249,151) (79,591) (131,729) (113,315) - (8,200) Other Outgo (124,087) (63,467) (158,588) (87,880) (72,550) (80,070) (70,719) (1,190,015) (491,402) (301,363) (269,068) (233,089) (126,675) (118,810)

Excess of Income over Outgo

981,714 473,566 78,928 52,754 24,828 164,156 26,439

Undistributed Income brought forward

9,500,877 3,026,260 847,072 260,093 234,717 193,648 41,073

Amount Available for Distribution

10,482,591 3,499,826 926,000 312,847 259,545 357,804 67,512

Undistributed Income carried forward

10,482,591 3,499,826 926,000 312,847 259,545 357,804 67,512

P a g e | 35

STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2010 ITTIZAN ISTIQRAR IHFAZ ITTIHAD ISTIFAD IRAD IHSAN RM RM RM RM RM RM RM Income Gross Dividend Income 609,704 165,368 186,799 35,103 53,283 63,174 - Profit Income: Islamic Debt Securities 276,623 315,079 - - - - 19,455 Islamic Investment

Deposits with Financial Institution

262,536 146,882 - 77,321 75,723 86,734 49,296

Profit on Disposal: Islamic Debt Securities 49,843 3,950 - - - - - Quoted Shares 706,681 18,504 124,181 5,157 1,241 - - Unrealised Capital Gain 2,649,069 585,253 683,350 221,114 180,215 113,247 14,893

4,554,456 1,235,036 994,330 338,695 310,462 263,155 83,644

Outgo Investment Management Fees

(434,357) (254,420) (77,979) (53,826) (53,555) (51,231) (35,404)

Other Outgo (299,720) (100,907) (87,062) (28,812) (26,495) (22,611) (7,167)

(734,077) (355,327) (165,041) (82,638) (80,050) (73,842) (42,571)

Excess of Income over Outgo

3,820,379 879,709 829,289 256,057 230,412 189,313 41,073

Undistributed Income brought forward

5,680,498 2,146,551 17,783 4,036 4,305 4,335 -

Amount Available for Distribution

9,500,877 3,026,260 847,072 260,093 234,717 193,648 41,073

Undistributed Income carried forward

9,500,877 3,026,260 847,072 260,093 234,717 193,648 41,073

P a g e | 36

STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2011 ITTIZAN ISTIQRAR IHFAZ ITTIHAD ISTIFAD IRAD IHSAN

RM RM RM RM RM RM RM

Net Asset Value at the Beginning of the Financial Year 20,661,313 11,796,035 4,010,804 3,422,707 3,349,985 3,285,447 3,126,259

Amount received from

1,484,272 633,539 1,028,164 372,459 333,427 309,211 319,994 Units Creation Amount paid from

(1,888,061) (1,187,467) (59,317) (61,634) (35,785) (17,551) (14,301) Units Cancellation

Net Income 981,714 473,566 78,928 52,754 24,828 164,156 26,439

Net Asset Value at the End of Financial Year 21,239,238 11,715,673 5,058,579 3,786,286 3,672,455 3,741,263 3,458,391

STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2010 ITTIZAN ISTIQRAR IHFAZ ITTIHAD ISTIFAD IRAD IHSAN RM RM RM RM RM RM RM Net Asset Value at the Beginning of the Financial Period

16,785,184 10,820,752 3,026,533 3,037,673 3,013,091 3,010,279 -

Increase in Capital - - - - - - 3,000,000 Amount received from

Units Creation 3,583,301 1,572,111 262,133 217,892 183,022 155,449 155,431

Amount paid from Units Cancellation

(3,527,551) (1,476,537) (107,151) (88,915) (76,540) (69,594) (70,245)

Net Income 3,820,379 879,709 829,289 256,057 230,412 189,313 41,073 Net Asset Value at the End of Financial Period

20,661,313 11,796,035 4,010,804 3,422,707 3,349,985 3,285,447 3,126,259

P a g e | 37

CASH FLOW STATEMENT FOR FINANCIAL YEAR ENDED 31 DECEMBER 2011

ITTIZAN ISTIQRAR IHFAZ ITTIHAD ISTIFAD IRAD IHSAN 2011 RM RM RM RM RM RM RM Cash flow from operating activities Income before taxation

981,714 473,566 78,928 52,754 24,828 164,156 26,439

Adjustment for: Profit Income

(352,298) (381,900) (21,001) (25,993) (27,981) (34,863) (100,622)

Gross dividend income

(383,021) (120,886) (117,042) (86,446) (81,876) (92,796) (35,206)

(Profit)/loss on disposal

(1,436,410) (462,182) (242,248) (209,383) (148,060) (121,807) (9,421)

Unrealised capital loss/(gain)

752,322 249,151 79,591 131,729 113,315 (41,365) 8,200

Outgo from operations before changes in operating assets and liabilities

(437,693) (242,251) (221,772) (137,339) (119,774) (126,675) (110,610)

Proceeds from disposal of investment

6,254,986 3,472,196 2,796,336 1,767,707 1,591,540 1,879,670 912,899

Purchase of investment (8,699,419) (3,714,008) (3,673,471) (1,941,122) (1,601,293) (1,976,587) (1,215,291)

Decrease/(Increase) in other assets

2,477,474 119,091 (74,518) (6,154) (74,622) (70,694) (1,647)

Increase/(Decrease) in other liabilities

79,981 120,458 (3,911) (160,443) (201,967) (168,931) (31,645)

Cash used in operations

(324,671) (244,514) (1,177,336) (477,351) (406,116) (463,217) (446,294)

Gross dividend income received

383,021 120,886 117,042 86,446 81,876 92,796 35,206

Profit income received 352,298 381,900 21,001 25,993 27,981 34,863 100,622

Net cash generated from/(used in) operating activities

410,648 258,272 (1,039,293) (364,912) (297,259) (335,558) (310,466)

Cash flow from financing activities

Proceeds from creations of units

1,484,272 633,539 1,028,163 372,458 333,427 309,211 319,994

Payment for cancellation of units

(1,888,061) (1,187,467) (59,316) (61,633) (35,785) (17,551) (14,301)

Net cash (used in)/generated from financing activities

(403,789) (553,928) 968,847 310,825 297,642 291,660 305,693

Net increase/(decrease) in cash and cash equivalents

6,859 (295,656) (70,446) (54,087) 1,383 (43,898) (4,773)

Cash and cash equivalents at 31 December 2010

730 345,208 332,974 56,126 290 47,017 6,253


7,589 49,552 262,528 2,039 1,673 3,119 1,480

P a g e | 38

CASH FLOW STATEMENT FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2010

ITTIZAN ISTIQRAR IHFAZ ITTIHAD ISTIFAD IRAD IHSAN 2010 RM RM RM RM RM RM RM Cash flow from operating activities Income before taxation

3,820,379

879,709

829,289

256,057

230,412

189,313

41,073

Adjustment for: Profit Income

(539,159) (461,961) - (77,321) (75,723) (86,734) (68,751)

Gross dividend income (609,704) (165,368) (186,799) (35,103) (53,283) (63,174) -

Profit on disposal (756,524) (22,454) (124,181) (5,157) (1,241) - -

Unrealised capital gain (2,649,069) (585,253) (683,350) (221,114) (180,215) (113,247) (14,893)

Outgo from operations before changes in operating assets and liabilities

(734,077) (355,327) (165,041) (82,638) (80,050) (73,842) (42,571)

Proceeds from disposal of investment

11,177,544 6,293,538 1,226,223 2,144,175 1,885,951 1,445,775 -

Purchase of investment (6,077,769) (6,108,699) (1,324,057) (2,463,221) (2,317,591) (1,808,510) (3,097,857)

(Increase)/Decrease in other assets

(1,226,828) 1,307,869 (201,019) (36,177) (35,910) (36,339) (135,430)

(Decrease)/Increase in other liabilities

(4,418,659) (1,521,619) 260,265 252,586 312,402 284,170 128,174

Cash used in operations (1,279,789) (384,238) (203,629) (185,275) (235,198) (188,746) (3,147,684) Gross dividend income

received 609,704 165,368 186,799 35,103 53,283 63,174 -

Profit income received 539,159 461,961 - 77,321 75,723 86,734 68,751

Net cash (used in)/ generated from operating activities

(130,926) 243,091 (16,830) (72,851) (106,192) (38,838) (3,078,933)

Cash flow from financing activities

Proceeds from creations of units

3,583,301 1,572,111 262,133 217,892 183,022 155,449 155,431

Payment for cancellation of units

(3,527,551) (1,476,537) (107,151) (88,915) (76,540) (69,594) (70,245)

Net cash generated from financing activities

55,750 95,574 154,982 128,977 106,482 85,855 85,186

Net (decrease)/increase in cash and cash equivalents

(75,176) 338,665 138,152 56,126 290 47,017 (2,993,747)

Cash and cash equivalents at 1 July 2009

75,906 6,543 194,822 - - - 3,000,000


730 345,208 332,974 56,126 290 47,017 6,253

P a g e | 39

NOTES TO THE FINANCIAL STATEMENTS

The Manager and its principal activities The Manager is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The address of its registered office and principal place of business of the Company is located at: 26

th Floor, Annexe Block

Dataran Kewangan Darul Takaful No.4, Jalan Sultan Sulaiman 50000 Kuala Lumpur The Company is principally engaged in managing family and general takaful businesses. The family takaful business includes investment-linked products. The financial statements were approved by the Board of Directors of the Manager on 22 March 2012. 1. Summary of significant accounting policies

The accounting policies set out below have been applied consistently to periods presented in these financial statements, unless otherwise stated.

(a) Basis of accounting

The financial statements have been prepared in accordance with the notes set out in Note 1, The Guidelines on Investment-Linked Insurance/Takaful Business (issued by Bank Negara Malaysia) and the requirements of the certificate document.

(b) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (RM), which is the Funds‟ functional currency.

(c) Investments Quoted shares, which are Shariah approved, are stated at the closing market prices as at the date of the Statement of Assets and Liabilities. Islamic debt securities are valued at cost adjusted for amortisation of premiums or accretion of discounts over their par values at the time of acquisition using the effective yield method. The carrying value is subsequently revalued to reflect their fair values by using price quoted by Bond Pricing Agency Malaysia. Any increase or decrease in value of investments at each reporting date is taken into Statement of Income and Expenditure.

(d) Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and bank balances.

(e) Net Creation of Units Net creation of units represents contributions paid by participants as payment for new certificate/top up for existing certificate. Net creation of units is recognised on a receipt basis.

(f) Net Cancellation of Units

Net cancellation of units represents cancellation of units arising from the surrenders and withdrawals by participant. Net cancellation of units is recognised upon surrendering of/withdrawal from the related takaful certificates.

(g) Income Recognition

Dividend income is recognised when the right to receive payment is established. Income is recognised on time proportion basis that takes into account the effective yield of the asset.

P a g e | 40

Gain or loss of disposal of quoted shares is credited or charged to the Statement of Income and Expenditure.

(h) Investment management fees Investment management fees are calculated in accordance with the provisions of the certificate document.

2. Islamic debt securities

31 December 2011 RM

31 December 2010 RM

(i) Ittizan Cost 5,325,607 4,562,500 Accretion of discount - 24,866 Unrealised capital gain 13,768 83,359 Market value 5,339,375 4,670,725 (ii) Istiqrar Cost 8,101,855 7,372,126 Accretion of discount - 20,089 Unrealised capital gain 52,994 155,185 Market value 8,154,849 7,547,400 (iii) Ihsan Unquoted in Malaysia Islamic debt securities Cost 1,761,738 1,809,248 Amortisation of premium - (1,156) Unrealised capital gain 4,037 11,708 Market value 1,765,775 1,819,800

3. Quoted shares

31 December 2011 RM

31 December 2010 RM

(i) Ittizan Quoted in Malaysia

Cost 11,465,982 9,897,246

Unrealised capital gain 968,509 1,626,374

Market value 12,434,491 11,523,620

(ii) Istiqrar Quoted in Malaysia

Cost 3,219,475 3,445,208

Unrealised capital gain 252,249 379,122

Market value 3,471,724 3,824,330

P a g e | 41

(iii) Ihfaz Quoted in Malaysia

Cost 4,156,811 3,037,428


Market value 4,774,381 3,734,589

(iv) Ittihad Quoted in Malaysia

Cost 2,611,711 2,440,379


Market value 2,701,096 2,661,493

(v) Istifad Quoted in Malaysia

Cost 2,503,404 2,317,591


Market value 2,570,304 2,497,806

(vi) Irad Quoted in Malaysia

Cost 2,551,169 1,808,510


Market value 2,705,781 1,921,757

(vii) Ihsan Quoted in Malaysia Cost 1,086,932 315,609 Unrealised capital gain 2,656 4,341

Market value 1,089,588 319,950

4. Financial Instruments

The Funds are exposed to market, credit, liquidity and profit rate risks.

Market risk Market risk arises when the value of securities fluctuate in response to the activities of the individual companies, general market, or economic conditions. The market risk is managed through portfolio diversification and asset allocation whereby the securities exposure will be reduced in the event of anticipated market weakness.

Credit risk Credit risk refers to the ability of an issuer or a counterparty to make timely profit and principal payments. The maximum exposure to credit risk is represented by the carrying amount of each financial asset as disclosed in the Statement of Assets and Liabilities.

Liquidity risk

This may come about when the realisation of units is required in excess of normal amounts. The extent of exposure to the risk is contained in provisions set out in the prospectus.

P a g e | 42

Profit rate risk When the profit rate rises, bond prices fall and vice versa. The market risk is monitored through periodic reviews of its assets and liability positions, the objective of which being to limit the net changes in the value of assets and liabilities arising from profit rate movements. Shariah risk Shariah risk arises when transactions entered by an Islamic Financial Institution are declared impermissible. Any profit derived from Shariah non-compliance activities shall be cleansed in order to comply with Shariah requirements which may adversely affect the Fund.

Fair values The fair values of investments have been disclosed in notes 2 and 3. The basis of deriving the fair values is disclosed in Note 1(c).

P a g e | 43

DETAILS OF INVESTMENTS

ITTIZAN

Security Name

Number of Units

Total Cost Market

Value % of NAV

Construction

Gamuda Berhad 176,100 529,331 596,979 2.81%

Malaysian Resources Corporation Bhd 80,000 177,584 172,800 0.81%

WCT Berhad 115,000 260,546 273,700 1.29%

371,100 967,461 1,043,479 4.91%

Consumer

QL Resources Berhad 48,000 145,040 147,840 0.70%

UMW Holdings Bhd 55,200 344,168 386,400 1.82%

103,200 489,208 534,240 2.52%

Industrial Products

KNM Group Bhd 40,087 287,424 39,686 0.19%

Petronas Chemicals Group Bhd 71,500 498,265 443,300 2.09%

Petronas Gas Bhd 51,600 573,285 784,320 3.69%

Uchi Technologies Bhd 217,000 297,127 236,530 1.11%

380,187 1,656,101 1,503,836 7.08%

Infrastructure Project Company

Digi.Com Bhd 168,000 416,026 651,840 3.07%

YTL Power International Bhd 195,948 382,787 348,787 1.64%

363,948 798,813 1,000,627 4.71%

Plantation

IJM Plantations Bhd 50,000 149,931 141,000 0.66%

IOI Corporation Bhd 107,150 488,992 576,467 2.71%

157,150 638,923 717,467 3.38%

Property

IJM Land Berhad 80,000 211,418 184,000 0.87%

Mah Sing Group Bhd 60,000 115,529 126,000 0.59%

SP Setia Bhd 37,500 147,476 144,375 0.68%

UEM Land Holdings Bhd 80,000 208,303 193,600 0.91%

257,500 682,726 647,975 3.05%

Real Estate Investment Trust

Axis Real Estate Investment Trust 120,000 294,735 314,400 1.48%

120,000 294,735 314,400 1.48%

Trading/Services

Bumi Armada Berhad 30,000 121,029 123,000 0.58%

Axiata Group Berhad 124,850 554,996 641,729 3.02%

Dialog Group Berhad 111,889 158,197 294,268 1.39%

Faber Group Bhd 25,000 54,278 44,750 0.21%

Kencana Petroleum Berhad 127,536 221,046 378,782 1.78%

KFC Holdings (M) Bhd 90,000 330,442 345,600 1.63%

KPJ Healthcare Bhd 45,000 179,362 211,500 1.00%

Maxis Berhad 60,000 321,413 328,800 1.55%

Media Chinese International Ltd 88,000 86,119 102,080 0.48%

P a g e | 44

ITTIZAN

Security Name

Number of Units

Total Cost

Market Value

% of NAV

Malaysia Marine and Heavy Engineering Bhd 82,400 486,132 466,384 2.20%

Parkson Holdings Berhad 87,602 516,998 495,827 2.33%

Petronas Dagangan Bhd 25,000 333,014 445,000 2.10%

Sime Darby Bhd 65,800 500,494 605,360 2.85%

Tenaga Nasional Bhd 173,187 1,337,957 1,021,803 4.81%

Telekom Malaysia Bhd 235,400 736,540 1,167,583 5.50%

1,371,664 5,938,014 6,672,467 31.42%

Total Malaysian Equities 3,124,749 11,465,982 12,434,491 58.54%


Rantau Abang Capital Berhad 4.91% 250,000 253,508 263,300 1.24%

Lingkaran Transkota Holdings Bhd 4.60% 250,000 243,200 253,200 1.19%

Kapar Energy Ventures Sdn Bhd 6.85% 500,000 538,000 522,750 2.46%

Maybank Islamic Sub-Debt 5.00% 500,000 508,050 509,350 2.40%

Westports Malaysia Sdn Bhd 4.54% 500,000 505,050 506,050 2.38%

Tesco Stores (M) Sdn Bhd 4.25% 500,000 504,250 502,850 2.37%

Binariang Gsm Sdn Bhd 6.60% 500,000 555,650 545,300 2.57%

Padiberas Nasional Berhad 5.05% 250,000 255,225 258,300 1.22%

Senari Synergy Sdn Bhd 4.62% 250,000 254,025 254,975 1.20%

CIMB Islamic Bank Berhad 5.85% 200,000 219,540 219,800 1.03%

Kencana Petroleum Berhad 3.90% 500,000 482,800 490,300 2.31%

Anih Berhad 4.70% 500,000 505,200 510,600 2.40%

DRB Hicom Berhad 4.50% 500,000 501,109 502,600 2.37%

5,200,000 5,325,607 5,339,375 25.14%

Total Malaysian Equities & Islamic Debt Securities

8,324,749 16,791,589 17,773,866 83.68%

ISTIQRAR

Security Name

Number of Units Total Cost

Market Value

% of NAV

Construction Malaysian Resources Corporation Bhd 30,000 65,874 64,800 0.55%

WCT Berhad 30,000 72,316 71,400 0.61%

60,000 138,190 136,200 1.16%

Consumer QL Resources Berhad 30,000 91,223 92,400 0.79%

UMW Holdings Bhd 7,500 44,407 52,500 0.45%

37,500 135,630 144,900 1.24%

P a g e | 45

ISTIQRAR

Security Name

Number of Units

Total Cost

Market Value

% of NAV

Industrial Products

KNM Group Bhd 10,000 59,262 9,900 0.08%

Petronas Gas Bhd 11,600 128,041 176,320 1.50%


Petronas Chemicals Group Berhad 20,000 113,866 124,000 1.06%

101,600 383,621 375,620 3.21%


Digi.Com Bhd 47,000 78,357 182,360 1.56%

Lingkaran Transkota Holdings Berhad 8,000 29,974 30,640 0.26%


113,144 229,422 316,496 2.70%

Plantation


48,173 310,262 259,171 2.21%

Property


SP Setia Bhd 22,500 86,960 86,625 0.74%

47,500 131,620 139,125 1.19%



80,000 196,490 209,600 1.79%

Trading/Services



Maxis Berhad 30,000 160,738 164,400 1.40%

Media Chinese International Limited 64,000 60,774 74,240 0.63%




Petra Perdana Berhad 42,212 72,819 33,136 0.28%

Sime Darby Bhd 21,600 164,098 198,720 1.70%

Tenaga Nasional Bhd 44,875 311,022 264,763 2.26%

Telekom Malaysia Bhd 84,700 280,985 420,112 3.59%

417,363 1,694,239 1,890,612 16.14%

Total Malaysian Equities 905,280 3,219,475 3,471,724 29.63%


Rantau Abang Capital Berhad 5.24% 750,000 760,523 789,900 6.74%

Lingkaran Transkota Holdings Bhd 4.60% 500,000 486,400 506,400 4.32%

Kapar Energy Ventures Sdn Bhd 6.85% 50,000 807,000 784,125 6.69%

Maybank Islamic Sub-Debt 5.00% 500,000 508,050 509,350 4.35%

Westports Malaysia Sdn Bhd 4.54% 500,000 505,050 506,050 4.32%

National Bank Of Abu Dhabi 4.75% 750,000 752,318 772,125 6.59%

P a g e | 46

ISTIQRAR

Security Name

Number of Units

Total Cost

Market Value

% of NAV

Tesco Stores (M) Sdn Bhd 4.25%

750,000

756,375

754,275

6.44%


Padiberas Nasional Berhad 5.05% 500,000 510,450 516,600 4.41%

Senari Synergy Sdn Bhd 4.62% 250,000 254,025 254,974 2.18%


Kencana Petroleum Berhad 3.90% 500,000 482,800 490,300 4.18%

Anih Berhad 4.70% 500,000 505,200 510,600 4.36%

DRB Hicom Berhad 500,000 501,110 502,600 4.29%

7,900,000 8,101,855 8,154,849 69.61%


8,805,280 11,321,330 11,626,573 99.24%

IHFAZ

Security Name Number of

Units Total Cost Market

Value % of NAV

Construction

Gamuda Berhad 44,600 136,331 151,194 2.99%

IJM Corporation Bhd 25,920 135,053 146,448 2.90%

Malaysian Resources Corp 24,700 51,188 53,352 1.05%

WCT Bhd 22,700 67,254 54,026 1.07%

YTL Corporation Bhd 47,600 66,867 70,448 1.39%

165,520 456,692 475,468 9.40%

Consumer

UMW Holdings Bhd 18,500 119,306 129,500 2.56%

18,500 119,306 129,500 2.56%

Industrial Products

Lafarge Malayan Cement Bhd 5,300 32,605 37,100 0.73%

Petronas Gas Bhd 18,300 214,468 278,160 5.50%


63,600 486,369 563,260 11.13%


Digi.Com Bhd 71,000 179,489 275,480 5.45%



115,600 280,801 365,118 7.22%

Plantation

Batu Kawan Bhd 2,700 24,282 47,142 0.93%


Kuala Lumpur Kepong Bhd 11,300 210,044 256,510 5.07%

76,553 540,136 640,187 12.66%

P a g e | 47

IHFAZ



Value % of NAV

Property

KLCC Property Holdings Bhd 5,500 17,002 17,325 0.34%


SP Setia Bhd 18,600 60,627 71,610 1.42%


88,100 219,741 234,759 4.64%

Trading/Services

Airasia Bhd 22,100 59,990 83,317 1.65%


Dialog Group Bhd 18,695 23,978 49,168 0.97%

Kencana Petroleum Berhad 11,800 31,448 35,046 0.69%


Maxis Berhad 28,900 156,190 158,372 3.13%


MISC Bhd 14,600 121,119 79,862 1.58%

MMC Corporation Bhd 13,100 27,224 36,287 0.72%



Sapuracrest Petroleum Bhd 9,200 30,362 42,320 0.84%

Sime Darby Bhd 38,000 301,575 349,600 6.91%

Star Publications (M) Bhd 10,800 34,996 34,020 0.67%



413,780 2,053,766 2,366,089 46.77%


ITTIHAD



Value % of NAV

Construction

Gamuda 47,000 162,166 159,330 4.21%



WCT Bhd 25,000 74,040 59,500 1.57%

108,000 367,573 352,430 9.31%

Industrial Products

Petronas Gas Berhad 12,000 135,027 182,400 4.82%


32,000 249,757 306,400 8.09%

P a g e | 48

ITTIHAD



Value % of NAV



33,000 75,732 58,740 1.55%

Plantation


IJM Plantations Berhad 20,000 61,001 56,400 1.49%

59,500 272,906 268,910 7.10%

Property

IJM Land Berhad 25,000 68,993 57,500 1.52%

SP Setia Bhd 15,000 52,182 57,750 1.53%


Sunway Berhad 14,857 41,600 37,885 1.00%


UOA Development Bhd 14,000 36,764 19,180 0.51%

128,857 327,148 306,315 8.09%

Trading/Services

AirAsia Bhd 17,000 55,653 64,090 1.69%

Bumi Armada Berhad 7,500 30,258 30,750 0.81%


Dialog Group Bhd 20,000 35,299 52,600 1.39%

Faber Group Bhd 9,000 19,691 16,110 0.43%

Kencana Petroleum Bhd 56,000 129,992 166,320 4.39%

KFC Holdings (M) Berhad 19,500 72,456 74,880 1.98%

Maxis Berhad 22,000 117,116 120,560 3.18%



Parkson Holdings Bhd 30,900 176,760 174,894 4.62%

SapuraCrest Petroleum Berhad 5,000 20,718 23,000 0.61%

Sime Darby Bhd 10,000 88,848 92,000 2.43%



322,850 1,318,596 1,408,301 37.19%


P a g e | 49

ISTIFAD



Value % of NAV

Construction

Gamuda Bhd 50,100 169,251 169,839 4.62%


YTL Corporation Bhd 32,500 48,175 48,100 1.31%

WCT Berhad 20,000 65,390 47,600 1.30%

113,600 341,337 327,689 8.92%

Consumer

MSM Malaysia Holdings Berhad 10,000 48,372 48,800 1.33%

UMW Holdings Bhd 8,500 58,708 59,500 1.62%

18,500 107,080 108,300 2.95%

Industrial Products

Petronas Gas Bhd 10,500 124,829 159,600 4.35%


35,500 274,697 314,600 8.57%

Infrastructure Project Company Digi.Com Bhd 24,000 68,580 93,120 2.54%

YTL Power International Berhad 33,000 75,619 58,740 1.60%

57,000 144,199 151,860 4.14%

Plantation IOI Corporation Bhd 41,700 223,979 224,346 6.11%


45,700 312,803 315,146 8.58%

Property SP Setia Bhd 15,500 54,694 59,675 1.62%



54,500 156,514 139,355 3.79%

Trading/Services Bumi Armada 7,500 30,258 30,750 0.84%



Maxis Berhad 21,000 111,485 115,080 3.13%



Petronas Dagangan Berhad 5,000 84,419 89,000 2.42%

Sime Darby Berhad 14,000 124,321 128,800 3.51%


Telekom Malaysia Berhad 31,600 108,247 156,736 4.27%

208,660 1,166,773 1,213,354 33.04%


P a g e | 50

IRAD

Security Name Number of Units Total Cost

Market Value

% of NAV

Construction

Gamuda Bhd 30,000 109,652 101,700 2.72%

WCT Berhad 25,000 82,980 59,500 1.59%

55,000 192,632 161,200 4.31%

Consumer



UMW Holdings Bhd 19,600 134,171 137,200 3.67%

44,600 227,910 232,200 6.21%

Industrial Products

Petronas Gas Bhd 10,900 120,519 165,680 4.43%



70,900 290,176 333,280 8.91%


Digi.Com Bhd 34,000 98,715 131,920 3.53%



89,000 236,903 246,220 6.58%

Plantation



27,500 196,851 199,910 5.34%

Property

IJM Land Berhad 10,000 28,391 23,000 0.61%


KLCC Property Holdings Bhd 21,000 69,714 66,150 1.77%

SP Setia Bhd 7,500 28,987 28,875 0.77%


82,500 218,025 200,205 5.35%



50,000 122,806 131,000 3.50%

Trading/Services

Amway (M) Holdings Bhd 6,200 48,550 57,412 1.53%


Bintulu Port Holdings Berhad 7,100 44,889 48,280 1.29%


KPJ Healthcare Bhd 21,000 86,553 98,700 2.64%

Maxis Berhad 22,200 118,135 121,656 3.25%




P a g e | 51

IRAD


Market Value

% of NAV


Star Publication (M) Bhd 25,800 87,380 81,270 2.17%

Telekom Malaysia Berhad 48,700 173,612 241,552 6.46%

252,200 1,065,865 1,201,766 32.12%


IHSAN



Value % of NAV

Construction


WCT Berhad 20,000 65,390 47,600 1.38%

30,000 87,564 69,200 2.00%

Consumer



17,000 69,658 70,360 2.03%

Industrial Products

Petronas Gas Berhad 4,600 53,912 69,920 2.02%


24,600 169,132 193,920 5.61%




28,000 77,141 66,240 1.92%

Plantation



19,000 166,432 171,500 4.96%

Property



29,000 64,538 50,680 1.47%

Trading/Services Axiata Group Berhad 7,000 32,322 35,980 1.04%


Maxis Berhad 8,000 42,781 43,840 1.27%


Malaysia Marine and Heavy Engineering Bhd

10,000 60,415 56,600 1.64%

P a g e | 52

IHSAN


Market Value

% of NAV

Parkson Holdings Berhad

13,000

77,574

73,580

2.13%

Petronas Dagangan Berhad 3,800 63,895 67,640 1.96%

Sime Darby Berhad 7,500 69,187 69,000 2.00%


89,600 452,468 467,688 13.52%


Islamic Debt Securities Westports Malaysia Sdn Bhd 4.54% 250,000 252,525 253,025 7.32%

National Bank Of Abu Dhabi 4.75% 250,000 250,773 257,375 7.44%

Tesco Stores (M) Sdn Bhd 4.25% 250,000 252,125 251,425 7.27%


Padiberas Nasional Bhd 5.05% 250,000 255,225 258,300 7.47%

Lingkaran Transkota Sdn Bhd 4.60% 250,000 253,725 253,200 7.32%


1,700,000 1,761,738 1,765,775 51.06%


1,937,200 2,848,670 2,855,363 82.56%

P a g e | 53

COMPARATIVE PERFORMANCE TABLE

ITTIZAN

Portfolio Composition 31-Dec-11 31-Dec-10 30-Jun-09 30-Jun-08 30-Jun-07

(%) (%) (%) (%) (%)

a. Equities: 58.55 55.72 42.78 56.45 67.88

● Construction 4.91 4.68 5.66 5.60 7.89

● Consumer Products 2.52 2.33 3.37 1.68 4.95

● Industrial Products 7.08 4.67 5.14 7.27 3.90

● Infrastructure 4.71 6.09 5.20 4.20 2.08

● Plantation 3.38 4.93 3.23 10.14 12.69

● Property 3.05 1.00 0.60 1.06 3.40

● Trading & Services 31.42 32.02 19.58 25.41 30.60

● REITs 1.48 - - 0.77 0.81

● Derivatives - - - 0.32 1.56

b. Islamic Debt Securities 25.14 22.59 15.14 28.91 23.22

c. Money Market & Cash 16.31 21.69 42.08 14.64 8.90

TOTAL 100.00 100.00 100.00 100.00 100.00

31-Dec-11 31-Dec-10 30-Jun-09 30-Jun-08 30-Jun-07

Total NAV (RM) 21,239,238 20,661,313 16,785,184 23,103,316 23,649,602

Number of units 13,871,401 14,199,486 14,197,887 17,669,009 17,297,969 NAV per Unit (RM) 1.531 1.455 1.182 1.310 1.3700

Highest NAV (RM) 1.551 1.458 1.390 1.560 1.380

Lowest NAV (RM) 1.406 1.230 1.030 1.270 0.973

Total Annual Return (% p.a)

a) Capital Growth 5.22 13.77 (9.77) (4.38) 39.95

b) Income Distributions - - - - -

Average Annual Return :

One-Year 5.22 13.77 (9.77) (4.38) 39.95

Three-Year 3.07 (0.13) 8.60 9.63 -

Five-Year 8.96 6.58 - - -

Benchmark Performance (70% FBM Shariah Index : 30% 1-Month GIA Rates Maybank)


One-Year 2.56 12.74 (8.29) (5.33) 38.29

Three-Year 2.34 (0.29) 8.22 12.03 -

Five-Year 7.99 8.11 - - -

* Note : 2010 return for one-year is based on 12-month from 31 Dec 2009 to 31 Dec 2010

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ISTIQRAR

Portfolio Composition 31-Dec-11 31-Dec-10 30-Jun-09 30-Jun-08 30-Jun-07

(%) (%) (%) (%) (%)

a. Equities: 29.64 32.41 18.08 23.19 29.17

● Construction 1.16 1.22 0.86 1.89 3.20

● Consumer Products 1.24 1.55 0.78 - 0.54

● Industrial Products 3.21 1.99 2.22 0.99 0.57

● Infrastructure 2.70 3.02 3.55 3.49 1.95

● Plantation 2.21 3.21 2.49 5.39 5.75

● Property 1.19 1.04 0.34 0.00 2.69

● Trading & Services 16.14 20.38 7.84 11.43 14.47

● REITs 1.79 - - - -

b. Islamic Debt Securities 69.61 63.96 28.66 62.18 57.72

c. Money Market & Cash 0.75 3.63 53.26 14.63 13.11

TOTAL 100.00 100.00 100.00 100.00 100.00

31-Dec-11 31-Dec-10 30-Jun-09 30-Jun-08 30-Jun-07

Total NAV (RM) 11,715,673 11,796,035 10,820,752 11,708,998 11,722,068

Number of units 9,423,878 9,910,043 9,820,000 9,776,795 9,562,501 NAV per Unit (RM) 1.243 1.190 1.102 1.200 1.230

Highest NAV (RM) 1.244 1.200 1.240 1.300 1.240

Lowest NAV (RM) 1.190 1.111 1.080 1.190 1.030


a) Capital Growth 4.45 5.80 (8.17) (2.44) 19.42

b) Income Distributions - - - - -


One-Year 4.45 5.80 (8.17) (2.44) 19.42

Three-Year 0.69 (1.60) 2.93 4.72 -

Five-Year 3.81 2.35 - - -

Benchmark Performance (30% FBM Shariah Index : 70% 1-Month GIA Rates Maybank) Average Annual Return :

One-Year 2.77 5.47 (2.53) (1.18) 17.60

Three-Year 1.90 0.59 4.63 6.26 -

Five-Year 4.43 4.34 - - - * Note : 2010 return for one-year is based on 12-month from 31 Dec 2009 to 31 Dec 2010

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Portfolio Composition

IHFAZ ITTIHAD 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10

(%) (%) (%) (%)

a. Equities: 94.38 93.15 71.33 77.79

● Construction 9.40 7.70 9.31 4.75

● Consumer Products 2.56 2.72 - 1.06

● Industrial Products 11.13 5.95 8.09 5.25

● Information Technology - - - -

● Infrastructure 7.22 5.35 1.55 3.79

● Plantation 12.66 14.46 7.10 9.38

● Property 4.64 2.98 8.09 4.31

● Trading & Services 46.77 53.99 37.19 49.25

b. Islamic Debt Securities - - - -

c. Money Market & Cash 5.62 6.85 28.67 22.21

TOTAL 100.00 100.00 100.00 100.00

IHFAZ ITTIHAD 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10

Total NAV (RM) 5,058,579 4,010,804 3,786,286 3,422,707

Number of units 3,790,811 3,140,055 3,383,972 3,158,543

NAV per Unit (RM) 1.334 1.277 1.119 1.084

Highest NAV (RM) 1.351 1.280 1.161 1.089

Lowest NAV (RM) 1.178 1.004 0.997 0.972


a) Capital Growth 4.46 14.15 3.23 7.71

b) Income Distributions - - - -


One-Year 4.46 14.15 3.23 7.71

Three-Year - - - -

Five-Year - - - -

Benchmark Performance FBMSI FBMSI FBMSI FBMSI


One-Year 2.41 18.20 2.41 18.20

Three-Year - - - -

Five-Year - - - -

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ISTIFAD IRAD 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10

(%) (%) (%) (%)

a. Equities: 69.99 74.59 72.32 58.53

● Construction 8.92 7.16 4.31 -

● Consumer Products 2.95 - 6.21 3.12

● Industrial Products 8.57 4.67 8.91 10.03

● Information Technology - - - -

● Infrastructure 4.14 4.46 6.58 4.93

● Plantation 8.58 10.41 5.34 1.53

● Property 3.79 2.49 5.35 2.24

● Trading & Services 33.04 45.40 32.12 36.68

● REITS - - 3.50 -

b. Islamic Debt Securities - - - -

c. Money Market & Cash 30.01 25.41 27.68 41.47

TOTAL 100.00 100.00 100.00 100.00

ISTIFAD IRAD 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10

Total NAV (RM) 3,672,455 3,349,985 3,741,263 3,285,447

Number of units 3,335,751 3,112,006 3,306,250 3,088,798

NAV per Unit (RM) 1.101 1.076 1.132 1.063

Highest NAV (RM) 1.131 1.089 1.140 1.067

Lowest NAV (RM) 0.997 0.972 1.039 1.002


a) Capital Growth 2.23 7.01 6.39 5.74

b) Income Distributions - - - -


One-Year 2.23 7.01 6.39 5.74

Three-Year - - - -

Five-Year - - - -

Benchmark Performance FBMSI FBMSI FBMSI FBMSI


One-Year 2.41 18.20 2.41 18.20

Three-Year - - - -

Five-Year - - - -

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IHSAN 31-Dec-11 31-Dec-10

(%) (%)

a. Equities: 31.51 10.24

● Construction 2.00 -

● Consumer Products 2.03 -

● Industrial Products 5.61 -

● Information Technology - -

● Infrastructure 1.92 -

● Plantation 4.96 -

● Property 1.47 1.77

● Trading & Services 13.52 8.47

b. Islamic Debt Securities 51.06 58.25

c. Money Market & Cash 17.43 31.51

TOTAL 100.00 100.00

IHSAN 31-Dec-11 31-Dec-10

Total NAV (RM) 3,458,390 3,126,259

Number of units 3,326,291 3,084,619

NAV per Unit (RM) 1.040 1.013

Highest NAV (RM) 1.054 1.014

Lowest NAV (RM) 0.996 1.00


a) Capital Growth 2.56 -

b) Income Distributions - -


One-Year 2.56 -

Three-Year - -

Five-Year - -

Benchmark Performance FBMSI FBMSI


One-Year 2.81 -

Three-Year - -

Five-Year - -

* There was no performance return for Ihsan in FYE 31 December 2010 as the fund is a new fund.

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contents...invest primarily in selected shariah-compliant equities that comprise of a diversified...

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