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 34 31 DECEMBER 2011

STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL PERIOD ENDED 35 31 DECEMBER 2010

STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 36 31 DECEMBER 2011

STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL PERIOD 36 ENDED 31 DECEMBER 2010

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)

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

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

At least 30% and a maximum of 70% in Malaysian shares approved by the Asset Shariah Advisory Council of the Securities Commission; Allocation The balance in cash, long and short term Islamic debt securities and other liquid Islamic investments.

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

ISTIQRAR (STABLE CAPITAL FUND)

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

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

A maximum of 35% in Malaysian shares approved by the Shariah Advisory Asset Council of the Securities Commission; Allocation At least 65% and a maximum 100% in cash, long and short term Islamic debt securities and other liquid Islamic investments.

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

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IHFAZ EQUITY INDEX FUND

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

Invest mainly in the top forty of the Index component stocks; closely tracking the Investment movement of the Benchmark in the medium to long term; Strategy Constant rebalancing of the component stocks to closely track the benchmark performance.

90% - 95% in Malaysian shares approved by the Shariah Advisory Council of the Asset Securities Commission; Allocation The balance in Islamic money market instruments.

Performance FBM Emas Shariah Index (“FBMSI”). Benchmark

ITTIHAD GROWTH FUND

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

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 Investment Malaysia; Strategy 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.

At least 50% and a maximum of 95% in Malaysian shares approved by the Asset Shariah Advisory Council of the Securities Commission; Allocation The balance in cash, long and short term Islamic debt securities and other liquid Islamic investments.

Performance FBM Emas Shariah Index (“FBMSI”). Benchmark

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ISTIFAD BLUE CHIPS FUND

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

Invest primarily in Shariah-compliant equities with higher market capitalisation to Investment achieve long term capital growth; Strategy Active portfolio management - constant review on asset allocation and stock holding in search of stocks that meet the objective of the Fund.

At least 40% and a maximum of 90% in Malaysian shares approved by the Asset Shariah Advisory Council of the Securities Commission; Allocation The balance in Islamic money market instruments.

Performance FBM Emas Shariah Index (“FBMSI”). Benchmark

IRAD DIVIDEND FUND

To achieve dividend income in the long term through selective investments in high Investment dividend yield shares that provide a minimum annual gross dividend of 4.00%. Objective To achieve capital growth through selective investments in Blue Chips Shares that could potentially provide capital growth in the long run.

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; Investment At all times, exposure in stocks that yield a minimum of 4% annual gross dividend Strategy 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.

At least 40% and a maximum of 90% in Malaysian shares approved by the Asset Shariah Advisory Council of the Securities Commission; Allocation At least 50% of the equity exposure is in dividend yield shares; The balance in Islamic money market instruments.

Performance FBM Emas Shariah Index (“FBMSI”). Benchmark

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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 Investment investments; Objective To construct a diversified portfolio containing a balanced mixture of equities and fixed income securities.

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

At least 10% and a maximum of 40% in Malaysian shares approved by the Shariah Advisory Council of the Securities Commission; Asset At least 10% and a maximum of 60% in Islamic debt securities and Malaysian Allocation Government Investment Issues; The balance in Islamic money market instruments.

Performance 40% FBM Emas Shariah Index (“FBMSI”) and 60% 12 months return Benchmark 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) 12.0 10.1 8.9 10.0 8.2 7.9 7.4 7.2 6.6 8.0 6.3 5.9 6.5 6.4 5.9 6 6.1 6.5 5.6 5.6 5.8 5.4 5.4 5.6 5.3 5.2 5.8 5.2 6.0 4.6 4.9 4.3 4.8 4.4 4.8 4.3 4.0 2.0 0.1 0.0 -2.0 -1.2 -4.0 -6.0 -3.9

-8.0 -6.2

3Q04 2Q09 2Q03 3Q03 4Q03 1Q04 2Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q03 Source : Bloomberg

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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)

4.50 4.00 3.50 3.40 3.40 3.40 3.50 3.20 3.30 3.30 3.30 3.00 2.90 3.00 3.00 2.40 2.50 2.10 2.00 2.00 1.80 1.60 1.40 1.90 1.50 1.20 1.80 1.90 1.40 1.60 1.60 1.00 0.50

0.00

10 10 10 10 10 11 11 11 11 11

11 10

10 11

10 10 11 11

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Jul Jul

Jan Jan

Jun Jun

Oct Oct

Apr Apr

Feb Sep Feb Sep

Dec Dec

Aug Aug

Nov Nov

Mar Mar

May May

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)

RM bn 5.0 4.4 0.50%

4.0 3.0 3.2 0.40% 3.0 2.3 2.6 0.30% 1.8 1.8 1.6 2.0 1.1 1.2 1.4 0.20% 0.9 0.6 0.6 0.7 1.0 0.3 0.1 0.10% 0.0 0.00% (1.0) -0.1 -0.3 -0.10% -0.7 (2.0) -1.0 -1.3 -0.20% (3.0) -0.30% (4.0) -3.4 -0.40% -3.8

(5.0) -0.50%

10 10 10 11 11 11

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May May Foreign flows (RMbn) % of Mkt Cap 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).

Ittizan vs Benchmark 10.0

8.0 Ittizan Benchmark

6.0

4.0

2.0

0.0

Return % Return Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 (2.0)

(4.0)

(6.0)

(8.0)

(10.0)

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

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:-

31.4% 25.1%

16.3%

7.1% 4.9% 4.7% 3.4% 2.5% 3.1% 1.5%

Construction Consumer Industrial Infrastructure Plantation Property Trading & REITS Islamic Debt Money Products Products Services Securities Market & Cash

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Top 5 Investment Holdings Money Market & 16.3% Cash Telekom Malaysia Bhd 5.5% Tenaga Nasional Bhd 4.8% Islamic Debt 25.1% Securities Petronas Gas Bhd 3.7% DiGi.Com Bhd 3.1% Equities 58.6% Axiata Group Bhd 3.0%

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.

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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 vs Benchmark 6.0 Istiqrar Benchmark 5.0

4.0

3.0

2.0 Return % Return 1.0

0.0 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 (1.0)

(2.0)

(3.0)

Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year 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:-

69.6%

16.1%

1.2% 1.2% 3.2% 2.7% 2.2% 1.2% 1.8% 0.7%

Construction Consumer Industrial Infrastructure Plantation Property Trading & REITS Islamic Debt Money Market Products Products Services Securities & Cash

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Top Investment 5 Holdings

Money Market & Cash 0.7% Binariang Gsm Sdn Bhd 7.0%

Rantau Abang Capital Berhad 6.7% Equities 29.6% Kapar Energy 6.7%

National Bank of Abu Dhabi 6.6% Islamic Debt Securities 69.6% Tesco Stores (M) 6.4%

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.

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.

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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 vs Benchmark and Tracking Error 10.0 6.00 Ihfaz Benchmark Tracking Error 5.00

5.0 Tracking Error (%) Error Tracking 4.00

3.00 0.0 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

2.00 Return (%) Return -5.0 1.00

0.00 -10.0 -1.00

-15.0 -2.00

Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year 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:-

46.8%

12.7% 9.4% 11.1% 7.2% 5.6% 2.6% 4.6%

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

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Top 5 Investment Holdings

Money Market & Axiata Group Bhd 7.8% 5.6% Cash Sime Darby Bhd 6.9% 94.4% IOI Corp Bhd 6.7%

Equities Petronas Gas Bhd 5.5% DiGi.Com Bhd 5.5%

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.

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.

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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 vs Benchmark

14.0 Ittihad Benchmark

9.0

4.0

-1.0

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

-6.0

-11.0

-16.0

Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year Ittihad 3.23 - - 3.23 - - Benchmark 2.41 - - 2.41 - -

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

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:-

37.2%

28.7%

9.3% 8.1% 7.1% 8.1% 1.6%

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

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Top 5 Investment Holdings

Money Market & 28.7% IOI Corp Bhd 5.6% Cash Tenaga Nasional Bhd 4.9%

Petronas Gas Bhd 4.8%

Equities 71.3% Axiata Group Bhd 4.7% Parkson Holdings Bhd 4.6%

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 Ittihad Growth 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.

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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 vs Benchmark

11.0 Istifad Benchmark

6.0

1.0

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Return % Return (4.0)

(9.0)

(14.0)

Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year Istifad 2.23 - - 2.23 - - Benchmark 2.41 - - 2.41 - -

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

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:-

33.0% 30.0%

8.9% 8.6% 8.6% 3.0% 4.1% 3.8%

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

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Top 5 Investment Holdings

Money Market IOI Corp Bhd 6.1% 30.0% & Cash Tenaga Nasional Bhd 6.0% 70.0% Gamuda Bhd 4.6% Equities Parkson Holdings Bhd 4.6% Petronas Gas Bhd 4.4%

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 Istifad Blue Chips 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.

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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 vs Benchmark

11.0 Irad Benchmark

6.0

1.0

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Return % Return (4.0)

(9.0)

(14.0)

Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year Irad 6.39 - - 6.39 - - Benchmark 2.41 - - 2.41 - -

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

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:-

32.1% 27.7%

8.9% 6.2% 6.6% 5.3% 5.4% 4.3% 3.5%

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

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Top 5 Investment Holdings

Money Market & Cash 27.7% Telekom Malaysia Bhd 6.5% Petronas Gas Bhd 4.4%

Petronas Dagangan Bhd 3.7%

Equities 72.3% UMW Holdings Bhd 3.7% DiGi.Com Bhd 3.5%

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 Irad Dividend 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.

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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 vs Benchmark

5.0 Ihsan Benchmark

3.0

1.0 Return % Return (1.0)Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

(3.0)

(5.0)

Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year 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:-

51.1%

17.4% 13.5% 5.6% 5.0% 2.0% 2.0% 1.9% 1.5%

Construction Consumer Industrial Infrastructure Plantation Property Trading & Islamic Debt Money Market & Products Products Services Securities Cash

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Top 5 Investment Holdings Money Market & 17.4% Cash Binariang GSM Sdn Bhd 7.9%

Padiberas Nasional Bhd 7.5% Equities 31.5% National Bank of Abu Dhabi 7.4%

Westports Malaysia Sdn Bhd 7.3% Islamic Debt 51.1% Securities Lingkaran Transkota Sdn Bhd 7.3%

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.

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.

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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.

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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

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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.

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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

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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

Islamic Debt 2 5,339,375 8,154,849 - - - - 1,765,775 Securities 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 3,965,000 200,000 - 1,106,000 1,098,000 1,041,000 561,000 Institutions Cash and cash 7,589 49,552 262,528 2,039 1,673 3,119 1,480 equivalents 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 10,756,647 8,215,847 4,132,579 3,473,439 3,412,910 3,383,459 3,390,879 holders Capital Accumulated Income Carried 10,482,591 3,499,826 926,000 312,847 259,545 357,804 67,512 Forward 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 1.5311 1.2432 1.3344 1.1189 1.1009 1.1316 1.0397 Per Unit

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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

Islamic Debt 2 4,670,725 7,547,400 - - - - 1,819,800 Securities 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 Deposits with Financial 2,416,000 - - 894,534 1,126,000 1,564,935 973,000 Institutions Cash and cash 730 345,208 332,974 56,126 290 47,017 6,253 equivalents 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 11,160,436 8,769,775 3,163,732 3,162,614 3,115,268 3,091,799 3,085,186 holders Capital Accumulated Income Carried 9,500,877 3,026,260 847,072 260,093 234,717 193,648 41,073 Forward 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 1.4551 1.1903 1.2773 1.0836 1.0765 1.0637 1.0135 Per Unit

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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 Deposits with Financial 136,096 23,030 21,001 25,993 27,981 34,863 13,649 Institutions 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 981,714 473,566 78,928 52,754 24,828 164,156 26,439 Outgo Undistributed Income 9,500,877 3,026,260 847,072 260,093 234,717 193,648 41,073 brought forward Amount Available for 10,482,591 3,499,826 926,000 312,847 259,545 357,804 67,512 Distribution Undistributed Income 10,482,591 3,499,826 926,000 312,847 259,545 357,804 67,512 carried forward

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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 262,536 146,882 - 77,321 75,723 86,734 49,296 Institution 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 (434,357) (254,420) (77,979) (53,826) (53,555) (51,231) (35,404) Fees 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 3,820,379 879,709 829,289 256,057 230,412 189,313 41,073 Outgo Undistributed Income 5,680,498 2,146,551 17,783 4,036 4,305 4,335 - brought forward Amount Available for 9,500,877 3,026,260 847,072 260,093 234,717 193,648 41,073 Distribution Undistributed Income 9,500,877 3,026,260 847,072 260,093 234,717 193,648 41,073 carried forward

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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 Units Creation 1,484,272 633,539 1,028,164 372,459 333,427 309,211 319,994 Amount paid from Units Cancellation (1,888,061) (1,187,467) (59,317) (61,634) (35,785) (17,551) (14,301) 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 16,785,184 10,820,752 3,026,533 3,037,673 3,013,091 3,010,279 - Financial Period Increase in Capital ------3,000,000 Amount received from 3,583,301 1,572,111 262,133 217,892 183,022 155,449 155,431 Units Creation Amount paid from (3,527,551) (1,476,537) (107,151) (88,915) (76,540) (69,594) (70,245) Units Cancellation 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 20,661,313 11,796,035 4,010,804 3,422,707 3,349,985 3,285,447 3,126,259 Period

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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 981,714 473,566 78,928 52,754 24,828 164,156 26,439 Income before taxation Adjustment for: Profit Income (352,298) (381,900) (21,001) (25,993) (27,981) (34,863) (100,622) Gross dividend (383,021) (120,886) (117,042) (86,446) (81,876) (92,796) (35,206) income (Profit)/loss on (1,436,410) (462,182) (242,248) (209,383) (148,060) (121,807) (9,421) disposal Unrealised capital 752,322 249,151 79,591 131,729 113,315 (41,365) 8,200 loss/(gain)

Outgo from operations before (437,693) (242,251) (221,772) (137,339) (119,774) (126,675) (110,610) changes in operating assets and liabilities Proceeds from disposal 6,254,986 3,472,196 2,796,336 1,767,707 1,591,540 1,879,670 912,899 of investment 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 2,477,474 119,091 (74,518) (6,154) (74,622) (70,694) (1,647) other assets Increase/(Decrease) in 79,981 120,458 (3,911) (160,443) (201,967) (168,931) (31,645) other liabilities

Cash used in (324,671) (244,514) (1,177,336) (477,351) (406,116) (463,217) (446,294) operations Gross dividend income 383,021 120,886 117,042 86,446 81,876 92,796 35,206 received Profit income received 352,298 381,900 21,001 25,993 27,981 34,863 100,622 Net cash generated from/(used in) 410,648 258,272 (1,039,293) (364,912) (297,259) (335,558) (310,466) operating activities

Cash flow from financing activities Proceeds from 1,484,272 633,539 1,028,163 372,458 333,427 309,211 319,994 creations of units Payment for (1,888,061) (1,187,467) (59,316) (61,633) (35,785) (17,551) (14,301) cancellation of units Net cash (used in)/generated from (403,789) (553,928) 968,847 310,825 297,642 291,660 305,693 financing activities

Net increase/(decrease) 6,859 (295,656) (70,446) (54,087) 1,383 (43,898) (4,773) in cash and cash equivalents Cash and cash equivalents at 31 730 345,208 332,974 56,126 290 47,017 6,253 December 2010 Cash and cash equivalents at 31 7,589 49,552 262,528 2,039 1,673 3,119 1,480 December 2011

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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 (734,077) (355,327) (165,041) (82,638) (80,050) (73,842) (42,571) operating assets and liabilities Proceeds from disposal 11,177,544 6,293,538 1,226,223 2,144,175 1,885,951 1,445,775 - of investment 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 (1,226,828) 1,307,869 (201,019) (36,177) (35,910) (36,339) (135,430) other assets (Decrease)/Increase in (4,418,659) (1,521,619) 260,265 252,586 312,402 284,170 128,174 other liabilities

Cash used in operations (1,279,789) (384,238) (203,629) (185,275) (235,198) (188,746) (3,147,684) Gross dividend income 609,704 165,368 186,799 35,103 53,283 63,174 - received Profit income received 539,159 461,961 - 77,321 75,723 86,734 68,751 Net cash (used in)/ generated from operating (130,926) 243,091 (16,830) (72,851) (106,192) (38,838) (3,078,933) activities

Cash flow from financing activities Proceeds from creations 3,583,301 1,572,111 262,133 217,892 183,022 155,449 155,431 of units Payment for cancellation (3,527,551) (1,476,537) (107,151) (88,915) (76,540) (69,594) (70,245) of units

Net cash generated from 55,750 95,574 154,982 128,977 106,482 85,855 85,186 financing activities

Net (decrease)/increase in cash and cash (75,176) 338,665 138,152 56,126 290 47,017 (2,993,747) equivalents Cash and cash 75,906 6,543 194,822 - - - 3,000,000 equivalents at 1 July 2009 Cash and cash equivalents at 31 730 345,208 332,974 56,126 290 47,017 6,253 December 2010

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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:

26th 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.

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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 31 December 2010 RM 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 31 December 2010 RM 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

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(iii) Ihfaz

Quoted in Malaysia Cost 4,156,811 3,037,428 Unrealised capital gain 617,570 697,161 Market value 4,774,381 3,734,589

(iv) Ittihad

Quoted in Malaysia Cost 2,611,711 2,440,379 Unrealised capital gain 89,385 221,114 Market value 2,701,096 2,661,493

(v) Istifad

Quoted in Malaysia Cost 2,503,404 2,317,591 Unrealised capital gain 66,900 180,215 Market value 2,570,304 2,497,806

(vi) Irad

Quoted in Malaysia Cost 2,551,169 1,808,510 Unrealised capital gain 154,612 113,247 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.

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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).

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DETAILS OF INVESTMENTS

ITTIZAN Number Market % of Total Cost Security Name of Units Value 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%

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ITTIZAN Number Market % of Security Name of Units Total Cost Value 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%

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

ISTIQRAR Number Market % of Security Name of Units Total Cost Value 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%

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ISTIQRAR Number Market % of Security Name of Units Total Cost Value 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% Uchi Technologies Bhd 60,000 82,452 65,400 0.56% Petronas Chemicals Group Berhad 20,000 113,866 124,000 1.06% 101,600 383,621 375,620 3.21% Infrastructure Project Company

Digi.Com Bhd 47,000 78,357 182,360 1.56% Lingkaran Transkota Holdings Berhad 8,000 29,974 30,640 0.26% YTL Power International Bhd 58,144 121,091 103,496 0.88% 113,144 229,422 316,496 2.70%

Plantation

IOI Corporation Bhd 48,173 310,262 259,171 2.21% 48,173 310,262 259,171 2.21%

Property

Mah Sing Group Bhd 25,000 44,660 52,500 0.45% SP Setia Bhd 22,500 86,960 86,625 0.74% 47,500 131,620 139,125 1.19%

Real Estate Investment Trust

Axis Real Estate Investment Trust 80,000 196,490 209,600 1.79% 80,000 196,490 209,600 1.79%

Trading/Services

Axiata Group Berhad 56,875 226,733 292,338 2.50% KFC Holdings (M) Bhd 16,000 58,456 61,440 0.52% Maxis Berhad 30,000 160,738 164,400 1.40% Media Chinese International Limited 64,000 60,774 74,240 0.63% Parkson Holdings Berhad 28,301 169,151 160,184 1.37% Malaysia Marine and Heavy Engineering Bhd 24,000 140,274 135,840 1.16% Petronas Dagangan Bhd 4,800 49,188 85,440 0.73% 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%

Islamic Debt Securities

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%

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ISTIQRAR Number Market % of Security Name of Units Total Cost Value NAV

Tesco Stores (M) Sdn Bhd 4.25% 750,000 756,375 754,275 6.44% Binariang Gsm Sdn Bhd 6.60% 750,000 833,475 817,950 6.98% 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% CIMB Islamic Bank Berhad 5.85% 400,000 439,080 439,600 3.75% 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%

Total Malaysian Equities & Islamic Debt 8,805,280 11,321,330 11,626,573 99.24% Securities

IHFAZ Number of Market % of Security Name Units Total Cost Value 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% Petronas Chemicals Group Berhad 40,000 239,296 248,000 4.90% 63,600 486,369 563,260 11.13%

Infrastructure Project Company Digi.Com Bhd 71,000 179,489 275,480 5.45% Lingkaran Transkota Holdings Berhad 5,000 18,734 19,150 0.38% YTL Power International Bhd 39,600 82,578 70,488 1.39% 115,600 280,801 365,118 7.22%

Plantation Batu Kawan Bhd 2,700 24,282 47,142 0.93% IOI Corporation Bhd 62,553 305,810 336,535 6.65% Kuala Lumpur Kepong Bhd 11,300 210,044 256,510 5.07% 76,553 540,136 640,187 12.66%

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IHFAZ Number of Market % of Security Name Units Total Cost Value NAV

Property KLCC Property Holdings Bhd 5,500 17,002 17,325 0.34% Mah Sing Group Bhd 28,300 48,451 59,430 1.17% SP Setia Bhd 18,600 60,627 71,610 1.42% UEM Land Holdings Bhd 35,700 93,661 86,394 1.71% 88,100 219,741 234,759 4.64% Trading/Services Airasia Bhd 22,100 59,990 83,317 1.65% Axiata Group Berhad 76,400 297,151 392,696 7.76% Dialog Group Bhd 18,695 23,978 49,168 0.97% Kencana Petroleum Berhad 11,800 31,448 35,046 0.69% KFC Holdings (M) Bhd 11,500 42,860 44,160 0.87% Maxis Berhad 28,900 156,190 158,372 3.13% Malaysia Marine and Heavy Engineering Bhd 23,000 136,746 130,180 2.57% MISC Bhd 14,600 121,119 79,862 1.58% MMC Corporation Bhd 13,100 27,224 36,287 0.72% Parkson Holdings Berhad 28,860 162,144 163,348 3.23% Petronas Dagangan Bhd 16,100 223,283 286,580 5.67% 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% Tenaga Nasional Bhd 33,125 206,715 195,438 3.86% Telekom Malaysia Bhd 57,600 197,986 285,696 5.65% 413,780 2,053,766 2,366,089 46.77%

Total Malaysian Equities 941,653 4,156,811 4,774,381 94.38%

ITTIHAD Number of Market % of Security Name Units Total Cost Value NAV

Construction

Gamuda 47,000 162,166 159,330 4.21% IJM Corporation Bhd 16,000 87,390 90,400 2.39% Malaysian Resources Corporation Bhd 20,000 43,977 43,200 1.14% 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% Petronas Chemicals Group Bhd 20,000 114,730 124,000 3.27% 32,000 249,757 306,400 8.09%

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ITTIHAD Number of Market % of Security Name Units Total Cost Value NAV

Infrastructure Project Company

YTL Power International Bhd 33,000 75,732 58,740 1.55% 33,000 75,732 58,740 1.55%

Plantation

IOI Corporation Bhd 39,500 211,905 212,510 5.61% 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% Mah Sing Group Bhd 35,000 62,698 73,500 1.94% Sunway Berhad 14,857 41,600 37,885 1.00% UEM Land Holdings Bhd 25,000 64,910 60,500 1.60% 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% Axiata Group Berhad 34,500 159,049 177,330 4.68% 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% Malaysia Marine and Heavy Engineering Bhd 18,000 106,989 101,880 2.69% Media Chinese International Ltd 21,000 20,291 24,360 0.64% 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% Tenaga Nasional Bhd 31,250 210,826 184,375 4.87% Telekom Malaysia Bhd 21,200 74,650 105,152 2.78% 322,850 1,318,596 1,408,301 37.19%

Total Malaysian Equities 684,207 2,611,711 2,701,096 71.34%

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ISTIFAD Number of Market % of Security Name Units Total Cost Value NAV

Construction Gamuda Bhd 50,100 169,251 169,839 4.62% IJM Corporation Bhd 11,000 58,522 62,150 1.69% 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% Petronas Chemicals Group Berhad 25,000 149,868 155,000 4.22% 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% Kuala Lumpur Kepong Bhd 4,000 88,824 90,800 2.47% 45,700 312,803 315,146 8.58%

Property SP Setia Bhd 15,500 54,694 59,675 1.62% UEM Land Holdings Bhd 25,000 65,056 60,500 1.65% UOA Development Bhd 14,000 36,764 19,180 0.52% 54,500 156,514 139,355 3.79% Trading/Services Bumi Armada 7,500 30,258 30,750 0.84% Axiata Group Berhad 26,600 114,353 136,724 3.72% KFC Holdings (M) Berhad 19,500 72,456 74,880 2.04% Maxis Berhad 21,000 111,485 115,080 3.13% Malaysia Marine and Heavy Engineering Bhd 16,000 93,645 90,560 2.47% Parkson Holdings Berhad 29,960 172,348 169,574 4.62% Petronas Dagangan Berhad 5,000 84,419 89,000 2.42% Sime Darby Berhad 14,000 124,321 128,800 3.51% Tenaga Nasional Bhd 37,500 255,241 221,250 6.02% Telekom Malaysia Berhad 31,600 108,247 156,736 4.27% 208,660 1,166,773 1,213,354 33.04%

Total Malaysian Equities 533,460 2,503,404 2,570,304 69.99%

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IRAD Number Market % of Security Name of Units Total Cost Value 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

MSM Malaysia Holdings Berhad 10,000 48,372 48,800 1.30% QL Resources Berhad 15,000 45,368 46,200 1.23% 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% Petronas Chemicals Group Berhad 20,000 115,219 124,000 3.31% Uchi Technologies Bhd 40,000 54,437 43,600 1.17% 70,900 290,176 333,280 8.91%

Infrastructure Project Company

Digi.Com Bhd 34,000 98,715 131,920 3.53% Lingkaran Transkota Holdings Berhad 8,000 29,974 30,640 0.82% YTL Power International Bhd 47,000 108,214 83,660 2.24% 89,000 236,903 246,220 6.58%

Plantation

IOI Corporation Bhd 24,500 130,233 131,810 3.52% Kuala Lumpur Kepong Bhd 3,000 66,618 68,100 1.82% 27,500 196,851 199,910 5.34%

Property

IJM Land Berhad 10,000 28,391 23,000 0.61% Mah Sing Group Bhd 30,000 54,169 63,000 1.68% KLCC Property Holdings Bhd 21,000 69,714 66,150 1.77% SP Setia Bhd 7,500 28,987 28,875 0.77% UOA Development Bhd 14,000 36,764 19,180 0.51% 82,500 218,025 200,205 5.35%

Real Estate Investment Trust

Axis Real Estate Investment Trust 50,000 122,806 131,000 3.50% 50,000 122,806 131,000 3.50%

Trading/Services

Amway (M) Holdings Bhd 6,200 48,550 57,412 1.53% Axiata Group Berhad 18,400 83,423 94,576 2.53% Bintulu Port Holdings Berhad 7,100 44,889 48,280 1.29% KFC Holdings (M) Berhad 21,000 77,537 80,640 2.16% KPJ Healthcare Bhd 21,000 86,553 98,700 2.64% Maxis Berhad 22,200 118,135 121,656 3.25% Malaysia Marine and Heavy Engineering Bhd 16,000 93,645 90,560 2.42% Media Chinese International Ltd 40,000 37,557 46,400 1.24% Parkson Holdings Berhad 18,000 105,373 101,880 2.72%

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IRAD Number Market % of Security Name of Units Total Cost Value NAV

Petronas Dagangan Bhd 7,800 109,210 138,840 3.71% 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%

Total Malaysian Equities 671,700 2,551,169 2,705,781 72.32%

IHSAN Number of Market % of Security Name Units Total Cost Value NAV

Construction

Malaysian Resources Corporation Bhd 10,000 22,174 21,600 0.62% WCT Berhad 20,000 65,390 47,600 1.38% 30,000 87,564 69,200 2.00%

Consumer

MSM Malaysia Holdings Berhad 10,000 48,372 48,800 1.41% QL Resources Berhad 7,000 21,286 21,560 0.62% 17,000 69,658 70,360 2.03%

Industrial Products

Petronas Gas Berhad 4,600 53,912 69,920 2.02% Petronas Chemicals Group Bhd 20,000 115,219 124,000 3.59% 24,600 169,132 193,920 5.61%

Infrastructure Project Company

Lingkaran Transkota Holdings Berhad 8,000 29,974 30,640 0.89% YTL Power International Bhd 20,000 47,167 35,600 1.03% 28,000 77,141 66,240 1.92%

Plantation

IOI Corporation Bhd 15,000 77,608 80,700 2.33% Kuala Lumpur Kepong Bhd 4,000 88,824 90,800 2.63% 19,000 166,432 171,500 4.96%

Property

Mah Sing Group Bhd 15,000 27,774 31,500 0.91% UOA Development Bhd 14,000 36,764 19,180 0.55% 29,000 64,538 50,680 1.47%

Trading/Services Axiata Group Berhad 7,000 32,322 35,980 1.04% KFC Holdings (M) Berhad 19,500 72,456 74,880 2.17% Maxis Berhad 8,000 42,781 43,840 1.27% Media Chinese International Ltd 15,000 13,009 17,400 0.50% Malaysia Marine and Heavy Engineering 10,000 60,415 56,600 1.64% Bhd

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IHSAN Number Market % of Security Name of Units Total Cost Value NAV

13,000 77,574 73,580 2.13% Parkson Holdings Berhad Petronas Dagangan Berhad 3,800 63,895 67,640 1.96% Sime Darby Berhad 7,500 69,187 69,000 2.00% Telekom Malaysia Bhd 5,800 20,829 28,768 0.83% 89,600 452,468 467,688 13.52%

Total Malaysian Equities 237,200 1,086,932 1,089,588 31.51%

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% Binariang Gsm Sdn Bhd 6.60% 250,000 277,825 272,650 7.88% 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% CIMB Islamic Bank Berhad 5.85% 200,000 219,540 219,800 6.36% 1,700,000 1,761,738 1,765,775 51.06%

Total Malaysian Equities & Islamic Debt 1,937,200 2,848,670 2,855,363 82.56% Securities

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COMPARATIVE PERFORMANCE TABLE

ITTIZAN

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

Average Annual Return : 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

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

Total Annual Return (% p.a)

a) Capital Growth 4.45 5.80 (8.17) (2.44) 19.42 b) Income Distributions - - - - -

Average Annual Return : 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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IHFAZ ITTIHAD Portfolio Composition 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

Total Annual Return (% p.a) a) Capital Growth 4.46 14.15 3.23 7.71 b) Income Distributions - - - - Average Annual Return : One-Year 4.46 14.15 3.23 7.71 Three-Year - - - - Five-Year - - - - Benchmark Performance FBMSI FBMSI FBMSI FBMSI Average Annual Return : One-Year 2.41 18.20 2.41 18.20 Three-Year - - - - Five-Year - - - -

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ISTIFAD IRAD Portfolio Composition 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

Total Annual Return (% p.a) a) Capital Growth 2.23 7.01 6.39 5.74 b) Income Distributions - - - - Average Annual Return : One-Year 2.23 7.01 6.39 5.74 Three-Year - - - - Five-Year - - - - Benchmark Performance FBMSI FBMSI FBMSI FBMSI Average Annual Return : One-Year 2.41 18.20 2.41 18.20 Three-Year - - - - Five-Year - - - -

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IHSAN Portfolio Composition 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

Total Annual Return (% p.a) a) Capital Growth 2.56 - b) Income Distributions - - Average Annual Return : One-Year 2.56 - Three-Year - - Five-Year - - Benchmark Performance FBMSI FBMSI Average Annual Return : 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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