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SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD | ILP ANNUAL REPORT • 2019 P a g e | 2

GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT

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CONTENTS GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT 3 FUND PROFILE 4 GLOBAL AND LOCAL ECONOMIC REVIEW 7 EQUITY AND FIXED INCOME MARKET REVIEW 8 MARKET OUTLOOK AND INVESTMENT STRATEGY 9 FUND PERFORMANCE REPORT 11 SOFT COMMISSION RECEIVED FROM BROKERS 25 STATEMENT BY DIRECTORS 26 REPORT OF THE AUDITORS 27 STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2019 31 STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2018 32 STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2019 33 STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2018 34 STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2019 35 STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2018 35 CASH FLOW STATEMENTS FOR FINANCIAL YEAR ENDED 31 DECEMBER 2019 36 CASH FLOW STATEMENTS FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2018 37 NOTES TO THE FINANCIAL INFORMATION 38 DETAILS OF INVESTMENTS 43 COMPARATIVE PERFORMANCE TABLE 57


GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT

It is my pleasure to present the 2019 Annual Report of Takaful Malaysia’s Investment-Linked Funds consisting of the

Ittizan Fund, Istiqrar Fund, myEquity Index Fund, myGrowth Fund, myBlueChips Fund, myDividend Fund and

myBalanced Fund for the year ended 31 December 2019.

FTSE Bursa Malaysia KLCI (“FBMKLCI”) ended the year of 2019 in the red zone to close at 1,588.76 pts with a loss

of 6.02% since its peak in February at 1,730.68 pts, depicting a downtrend of the index.

Locally, the newly-elected government continued in making some policy revisions which impacted the earnings of

selected companies. Some of the changes imposed include the revival of mega infrastructure projects, cutting of

broadband prices, raising the gaming tax and revising up the minimum wage. Externally, trade tensions between the

United States (“U.S.”) and its trading partners continued to intensify.

Malaysia’s gross domestic product (“GDP”) weakened to 3.6% y-o-y in 4Q 2019, due to pronounced declines in net

exports, dragging 2019 full year expansion to 4.3%. Supply shocks in agriculture and declining oil production were

compounded by moderation in the manufacturing activity. The Government is expected to announce an economic

package by end of March 2020, focusing on providing relief to the most-affected areas of the economy.

International Monetary Fund (“IMF”) forecasted the global GDP growth in 2019 at 2.9%, the lowest since 2008-09. This weakness was widespread, affecting both advanced economies – particularly the Euro Area and emerging

market and developing economies. The uncertainties over the future trade relationship between the US and China,

political stability in the EU and conflicts in oil producing economies remain as downside risks to global growth.

On the investment front, we continued to adopt prudent and vigilant investment strategies in managing risks and

returns resourcefully in advance of the ongoing uncertainties in the financial market. Despite the challenges, we are

pleased to report that the myBalanced Fund, Istiqrar Fund and myBlueChips Fund have outperformed their relative

benchmarks. By rank, the outperformance was led by the mixed asset fund, myBalanced fund surpassing its

benchmark by +348 bps followed by another mixed asset Fund, Istiqrar and myBlueChips Fund outperforming their

benchmark returns by +193 bps and +24 bps respectively. You may find out more information about the funds,

including the financial performance in the following pages.

Against the backdrop of Malaysia’s healthy domestic demand, improving fiscal deficit position as well as monetary

policy muscle, we are optimistic with the sustainable economic growth of the country in 2020. However, the upside

for the domestic market is anticipated to be restricted mainly due to the slowing global growth, the on-going trade

conflict between the U.S and China and the overall impact of the coronavirus disease 2019 (“CoVid-19”).

For the year 2020, the short-term, domestic factors may contribute to minimal downside risk to the MGS yield curve

due to the ease on monetary policy, neutral supply of government sukuk and also resilient domestic demand for

sukuk.

Amidst the challenging and vibrant market environment, the coming year will hold manifold opportunities for our team

to strive towards achieving sound returns for the participants. I would like to express my sincere gratitude for your

unwavering support and look forward to charting another great year of success.

Dato’ Sri Mohamed Hassan Kamil Group Chief Executive Officer


FUND PROFILE

ITTIZAN

Investment Objective

To achieve reasonable returns and capital growth opportunities via selected investments in Shariah approved shares listed in Bursa Malaysia and sukuk.

Investment Strategy

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

Asset Allocation

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

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

Performance Benchmark

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

ISTIQRAR


To achieve a relatively stable pattern of investment returns over medium term through selected investments in Shariah approved shares listed in Bursa Malaysia and sukuk.

Investment Strategy

Invest in a balanced asset allocation comprising mainly of sukuk with smaller exposure in Shariah-compliant equity.

Asset Allocation

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

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


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

myEQUITY INDEX FUND


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

Investment Strategy

Invest mainly in the top 40 of the Index component stocks; closely tracking the movement of the Benchmark in the medium to long term;

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

Asset Allocation

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

The balance in Islamic money market instruments.


FBM Emas Shariah Index (“FBMSI”).


myGROWTH FUND


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

Investment Strategy

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

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

Asset Allocation


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



myBLUE CHIPS FUND


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

Investment Strategy

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

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

Asset Allocation





myDIVIDEND FUND


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

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

Investment Strategy

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

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

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

Asset Allocation


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





myBALANCED FUND


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

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

Investment Strategy

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

Asset Allocation


At least 10% and a maximum of 60% in sukuk and Malaysian Government Investment Issues;



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


GLOBAL AND LOCAL ECONOMIC REVIEW

Economic Review This annual report is for the financial year of 1 January 2019 to 31 December 2019.

IMF forecasted global growth at 2.9% in 2019, its lowest level since 2008–09. This is the slowest rate of

expansion since the global recession of 2009. Mainly due to the difficulties caused by the US-China trade war,

including direct costs, market turmoil, reduced investment and lower factory activity due to supply-chain

disruptions. The uncertainties over the future trade relationship between the US and China, political stability in the

EU and conflicts in oil producing economies remain as downside risks to global growth.

Over to the United States of America (“U.S.”), according to the estimates released by the Bureau of Economic

Analysis (“BEA”), U.S. gross domestic products (“GDP”) grew 2.1% in 4Q 2019 thanks to a surprisingly strong

contribution from net exports, continued improvement in residential investment & government spending. And

while consumer spending remained positive, its 4Q 2019 growth was a marked slowdown from the preceding two

quarters. For the full year, the U.S. economy grew by 2.3% in 2019, slower than the 2.9% recorded in 2018 and

further away from the 3% growth pledged by U.S. President Donald Trump.

The Eurozone economy continued to grow at a modest pace in the July-September period as expected, as

Germany narrowly escaped a technical recession whilst other big economies expanded. Eurostat data showed

GDP in the 19 countries sharing the EUR increased 0.2% q-o-q in 3Q19 for a 1.2% y-o-y gain. On the political

front, the Conservative Party’s resounding victory in the UK elections on 12 December signalling a clearer Brexit

roadmap ahead, reducing related uncertainties. Meanwhile, in mid-November, the European Commission

reproached France, Italy and Spain for not adopting meaningful fiscal adjustment, exposing themselves to

potential economic shocks.

China’s 4Q2019 real GDP growth steady at +6.0% y-o-y (3Q2019: +6.0% y-o-y). Economy grew +6.1% in 2019

(2018: +6.6%), slowest since 1990 as the impact of the trade war with the US began to manifest. China’s GDP

growth remained in line with the government’s target of 6.0%-6.5% through 2019. China has engaged in targeted

monetary and fiscal stimulus that included interest rate, RRR and tax cuts to boost domestic demand and counter

the impact of US tariffs on China’s exports. These helped to stabilize key domestic demand indicators, i.e. retail

sales and fixed asset investment. Meanwhile, external trade improved with rebounds in both exports and imports.

2019 has been a good year for the crude oil. The crude oil prices were relatively stable, averaging at a USD64/bbl

level (at year end Brent USD66/bbl), with a high-low range of USD75-55/bbl. The level of compliance and

discipline from the OPEC+ pact has been reassuring. The latest agreement, to increase the production cut by

0.5m bpd, to 1.7m bpd, up to Mar 2020 is a positive move, a reflection of its commitment to maintain market

stability.

Malaysia’s growth decelerated to a 10-year low of 3.6% y-o-y in 4Q 2019 (from 4.4% y-o-y in 3Q 2019), bringing

2019 full-year growth to 4.3% (2018: 4.7%). Key sectors that added to the disappointment were mining and

agriculture, which saw sharper declines due to ongoing supply disruptions. Manufacturing activity expanded at a

slower pace as a result of weak exports. Services sector held up on robust private consumption and seasonal

activity, while construction sector turned around after a pick-up in private residential work.

During the year under review, Bank Negara Malaysia (“BNM”) reduced OPR by 25bps to 3.00% at the 6-7 May

2019 Monetary Policy Committee (“MPC”) meeting to support the slowing down of the economy. Subsequently,

due to the slower economic activities and falling liquidity levels, BNM announced a 50 bps cut in the Statutory

Reserve Requirement (“SRR”) to 3.00%, in order to release RM7.4bn into the financial system to help spur bank

lending. The central bank announced that the SRR move not a prelude to an impending easing of monetary

policy.


EQUITY AND FIXED INCOME MARKET REVIEW

Equity Market

FTSE Bursa Malaysia KLCI (“FBM KLCI”) ended the year 2019 in the red zone to close at 1,588.76 pts with a

loss of -6.02%, witnessing a downtrend since its peak in February at 1,730.68 pts. In contrast, FBM Emas

Shariah Index (“FBMS”) recorded a +3.85% gain for the year, after hitting a peak of 12,334.29 pts in July 2019,

the index also closed the year lower at 11,947.92 pts. The FBM Small Cap Index was the best performer,

registering a +25.36% gain. As FBMKLCI losses mainly led by loss in bank stocks, FBMS outperformed strongly

against the FBMKLCI.

Looking at FBMKLCI, losses were mainly from the Bursa Malaysia (“BM”) Finance sector and BM Industrial

Product, registering a loss of -10.59% and -7.86% respectively. For finance sector, the biggest losers were

Kenanga Investment Bank Berhad with a negative return of -25.00% and Public Bank Berhad at a loss of -

21.49%. Meanwhile, for Industrial Product sector, British American Tobacco and Chemical Company of Malaysia

were the worst performers, recording a loss of -58.20% and -31.28% respectively.

Foreign investors were the net sellers of Malaysian equities, in 2019 with a cumulative net selling of RM11.14

billion. This was only RM0.8 billion lower than the RM11.9 billion net selling by foreigners recorded in 2018. The

foreign selling in 2019 was partly due to the rebalancing activities by passive investors as Malaysia’s weightage in

the global index (MSCI Emerging Market Index) was most likely cut to accommodate the inclusion of China A-

shares, coupled with the disappointing earnings season. The other potential contributing factor due to concerns

over a possible downgrade of Malaysia by FTSE Russell (currently placed under watchlist), resulting in its

exclusion from the FTSE Russell’s World Government Bond Index (“WBGI”).

It was a good period for the other ASEAN-5 with all registering a positive return in 2019 except for Malaysia which

recorded a loss of -6.02%. Singapore outperformed others with 7.01% return, followed by Philippines at +3.38%,

Thailand at +1.91% and Indonesia at +1.66%.

Fixed Income Market

Overall, 2019 has been a strong bond year, reflecting a higher cover ratio in auctions with average 2.6x (2018:

2.3x). For FY2019, the benchmark 10-year MGS yield dropped by 77 bps to close at 3.30%. Furthermore, there

was a modest foreign flow in 2019, with total of RM22.9 billion inflow for MGS and GII which was mainly recorded

in the final two months of 2019 amid the dovish BNM as well as the easing of US-China trade tensions.

Moreover, as for corporate bonds, the gross PDS issuance increased to a total of MYR132.0 billion in 2019 (2018:

RM103.9 billion) due to the tightening of credit spreads and a lower yield environment by easing monetary

policies. The financial services dominated the corporate bond issuance approximately 60.5% (2018: 48.2%) or

RM79.8 billion (2018: RM50.0 billion) of the total issuance, followed by the property and real estate sector about

9.8% (2018: 11.8%) or RM12.9 billion. The others were Urusharta Jamaah Sdn Bhd (RM12.1 billion), Maybank

Bhd (RM6.6 billion), PNB Merdeka Ventures Sdn Bhd (RM1.7 billion) and Sunway Treasury Sukuk Sdn Bhd

(RM1.3 billion).

The total gross issuance for MGS/GII rose to RM115.7 billion in 2019 (2018: RM114.8 billion) through 32 offerings

with RM57.2 billion via MGS and RM58.5 billion via GII (2018: 33 offerings, MGS: RM51.0 billion, GII: RM63.8

billion). Overall, the GII-to-MGS ratio fell to 51:49 (2018: 56:44).

On the other hand, GG and AAA-rated bonds accounted for the largest share of primary issuance at 44.2% (2018:

51.1%), AA-rated bonds at 31.2% (2018: 29.3%) and unrated bonds at 18.8% (2018: 13.4%).


MARKET OUTLOOK AND INVESTMENT STRATEGY

Market Outlook

On 20 Jan 2020, IMF projected a global economic growth of 2.9% in 2019 and to pick up to 3.3% in 2020. On 8

Jan 2020, World Bank in its Global Economic Prospects report cut 0.2ppt off of the growth for both years, 2.4% in

2019 and 2.5% in 2020. The global growth uncertainty remains elevated on several political and policy factors.

The world trade uncertainty remains as U.S. protectionist trade policy resulted in trade frictions with major trading

partners – not only China, but also others (Europe, Asia, Latin America). U.S. political and policy uncertainties are

elevated amid on-going President Trump’s impeachment inquiry and the US Presidential Election in Nov 2020.

The geopolitical risks are spread out across Europe, Latin America, Middle East and Asia. There is also a

question over major central banks’ effectiveness and options amid prolonged unconventional monetary policy.

U.S. and China have finally signed the Phase One trade deal on 15 January 2020. Part of the deal required China

to increase purchases of US goods & services for the next two years while on the tariff front, U.S. to maintain

tariffs on roughly two-thirds of imports from China. Investors are relieved that this might halt the trade tension to

from worsening, although it is still too early to conclude but potential hurdles could be the interference of U.S.

Congress in China’s internal politics and the blacklisting of China’s technology firms which would undermine the

current momentum.

Due to the recent developments between US and Iran, we do not expect any further escalation to the ongoing

crisis as both sides seemed unwilling. The incident involving both countries has sparked a knee-jerk reaction to

oil prices, spiking to hit USD69/bbl on 6 Jan 2020 before decreasing back to USD65/bbl level. We are expecting

the crude prices to remain volatile in the range of USD60-70/bbl premised on compliance of OPEC+ and the

absence of supply shocks. The upside is capped as crude markets have a comfortable supply cushion should

there be a disruption. OPEC is sitting on huge amounts of spare capacity after reducing supplies for most of the

past three years, while the U.S. recently reported its first months as a net exporter of petroleum in about seven

decades.

At the moment, recession fear has subsided, although the signs remain evident. 10Y-3M US Treasury yield curve

steepened as the yield spread turned positive since October 2019 vs. negative in May 2019 – September 2019.

Historically, US recession came 8-18 months after the first month of yield curve inversion / negative yield spread,

regardless of the subsequent yield curve steepening / positive yield spread. New York Fed’s latest probability of

US recession dropped to 29% in October 2020 vs. the 31.5%-35% range in June-September 2020, still elevated

after the steady climb from 9% in February 2019. The Institute for Supply Management (ISM) purchasing

managers index recorded lowest reading in December 2019 at 47.2, its fifth straight


Moving on to the equity market in 2020, in summary, we are positive in tandem with the country’s robust domestic

demand and improving fiscal deficit position as well as fiscal and monetary policy muscle. However, the upside

for the domestic market is anticipated to be limited mainly due to: (i) slowing global growth; (ii) the U.S.

Presidential election in November which will typically lead to a strong U.S. stock market and U.S. dollar that may

subsequently limit capital flows into the FBM KLCI; (iii) trade conflict between the U.S. and China; and (iv) lack of

confidence in corporate earnings growth in 2020 following successive years of disappointment. In addition, we

are concern on the impact coronavirus disease 2019 (“CoVID-19”) outbreak via disruptions to China’s economy

and spill over onto regional tourism and travel related industries, global supply chain and world trade activities.

For the short-term, domestic factors may contribute a downside risk to the MGS yield curve due to expectation of

further monetary policy easing, neutral supply of government bond and also resilient domestic demand for bonds.

Gross supply of MGS and GII in 2020 is estimated at RM122.4 billion based on budget deficit of RM51.7 billion

and a refinancing need for bond maturities of RM70.7 billion. As local pension funds and banks are the largest

investors of MGS and GII, owning 86% of GII and 53% of MGS as of Jun 2019, it is likely that these investors will

be the main buyers of MGS and GII in 2020.

On the medium-term front, the outlook is likely on the receding side particularly due to some external factors such

as the US-China partial deal, Fed’s mid-cycle easing and an improving growth outlook apart from the steepen

UST curve that could influence the local bond sentiment. Also, a potential downgrade of the Malaysian bond

market and exclusion from the World Government Bond Index by FTSE Russell could potentially put the local

bond market at a downside risk.

Lastly, it is expected the gross supply of corporate bonds totalling RM110 billion in 2020. Overall, the corporate

bond issuance is anticipated to sustain at a healthy pace in 2020 in view of the ongoing funding needs for

infrastructure projects, resilient economic growth and a dovish monetary policy as well as broadly stable credit

conditions.

Investment Strategy

The market outlook is expected to remain challenging in 2020 on the back of the global and domestic

uncertainties. The FBMKLCI traded at 16.0x 12M forward PER and 1.73x trailing P/B at the end of 2019. We are

of the opinion that the lackluster corporate earnings trends have brought forward the market PE valuation to its

mean (PER 15.8x).

Our strategy in 2020 will emphasize on the bottom-up approach and the listed companies’ ability to deliver better

earnings after a few challenging quarters. We remain prudent in our investment strategy whilst continuing to focus

on stocks with good fundamentals, stable historical income, strong management team, long-term earnings

visibility and a solid balance sheet. Additionally, we will maintain to seek alpha in our stock picks that are

defensive in nature to protect the capital from any potential downside risks while meeting the long-term objective

of the funds.

Against the backdrop of domestic factors such as a dovish monetary policy, healthy supply of government and

corporate bond supported by resilient domestic demand for sukuk, the local sukuk market is poised to stage a

positive and healthy outlook for a shorter period of time. The investors are anticipated to remain neutral in adding

sukuk into their portfolio due to lower yield and continuous rallying in pricing or acquiring more sukuk into their

portfolio if the current market yield matches with the objective and the preference of the investors.

On the other hand, for medium to longer term, investors may be required to maintain a defensive position due to

further geopolitical risks such as the US-China trade war and the potential devaluation of the Malaysian bond

market from the World Government Bond Index.


FUND PERFORMANCE REPORT

ITTIZAN

Performance Review For the 12 months ended 31 December 2019, Ittizan performance is trailing its benchmark (70% FBMSI and 30% 1-Month GIA) by 31 bps with a gain of 3.1% in tandem with the benchmark’s positive return of 3.4% as detailed out below:-

Asset Allocation In terms of asset allocation, the fund has invested 55.53% in equity, 18.20% in sukuk and the remaining in money market / cash. On equity sectoral allocation, the Industrial Products sector was the top sector that the fund invested in with 16.95% exposure. The details of the asset allocation and the top 5 investment holdings are given below:-

(2.0)

0.0

2.0

4.0

6.0

Retu

rn %

Ittizan vs. Benchmark

Ittizan Benchmark

18.20% 16.95%

7.26% 6.16% 5.75% 5.03%

Sukuk Industrial Products

Energy Consumer Utilities Healthcare

Total Return (%) Average Annual Return (%)

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

Ittizan 3.1% -0.3% 0.8% 3.1% -0.1% 0.2%

Benchmark 3.4% 2.6% 2.0% 3.4% 0.8% 0.4%


Fees / Charges levied to the Fund Among the fees/charges levied to the fund are: 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 sukuk.

Details on Distribution There was no distribution declared for Ittizan for the period ended 31 December 2019.

Descriptions of any changes in Fund’s Objectives and Strategies There were no material changes in the fund’s objectives and strategies for the period ended 31 December 2019.

55.53%

26.27%

18.20%

Equities

Money Market &

Cash

Sukuk

2.31%

2.33%

2.35%

2.43%

2.72%

Cerah Sama Sdn Bhd

Tenaga Nasional Bhd

Ranhill Powertron II Sdn …

Malakoff Power Berhad

Frontken Corp Bhd

Top 5 Investment Holding



ISTIQRAR Performance Review For the 12 months ended 31 December 2019, Istiqrar performance outperformed its benchmark (30% FBMSI and 70% 1-Month GIA) by 193 bps with a gain of 4.7% against its benchmark’s return of 2.8% as detailed out below:-



Istiqrar 4.7% 6.8% 11.9% 4.7% 2.2% 2.3%

Benchmark 2.8% 6.3% 10.5% 2.8% 2.1% 2.0%

Asset Allocation In terms of asset allocation, the fund has invested 27.78% in equity, 46.45% in sukuk and the remaining in money market / cash which is in accordance with its asset allocation strategy. On equity sectoral allocation, the Industrial Products & Services sector was the top sector the fund has invested in with 8.59% exposure. The details of the asset allocation and the top 5 investment holdings are given below:-

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Retu

rn %

Istiqrar vs. Benchmark

Istiqrar Benchmark

46.45%

8.59% 3.70% 3.61% 2.58% 2.30%

Total Malaysian Sukuk

Industrial Products & Servic

Energy Consumer Products & Servic

Health Care Utilities


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 sukuk.

Details on Distribution There was no distribution declared for Istiqrar for the period ended 31 December 2019.

Descriptions of any changes in Fund’s Objectives and Strategies There were no material changes in the fund’s objectives and strategies for the period ended 31 December 2019.

46.45%

27.78%

25.77%

Sukuk

Equities

Money Market & Cash

5.32%

5.34%

5.45%

5.58%

5.68%

Kapar Energy Ventures Sdn Bhd

TNB Northern Energy

Alam Maritim Resources Bhd

Cerah Sama Sdn Bhd

Ranhill Powertron II Sdn Bhd




myEQUITY INDEX FUND Performance Review For the period under review, myEquity Index Fund, has trailing its benchmark, FBMSI by 135 bps as detailed out below. Additionally, the tracking error was within the parameters set for the fund and its strategy as to closely track its benchmark. For the period, the fund’s tracking error stood at 0.7%.



myEquity Index 2.5% 5.6% 2.5% 2.5% 1.8% 0.5%

Benchmark 3.9% -0.6% -4.5% 3.9% -0.2% -0.9%

Tracking Error 0.7% - - - - -

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 93.75% in equity and the remaining in money market / cash. On equity sectoral allocation, Utilities was the top sector the fund has invested in with 17.57% exposure. The details of asset allocation and the top 5 investment holdings are given below:-

0.0

4.0

8.0

12.0

16.0

20.0

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Retu

rn %

myEquity Index Fund vs Benchmark

myEquity Index Fund (LHS) Benchmark (LHS)

Tracking Error (RHS)

16.04% 15.66%

13.50% 13.30%

8.92% 8.44%

Utilities Telecommunications & Media

Plantation Consumer Products & Services

Health Care Industrial Products & Services

my

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


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 sukuk.

Details on Distribution There was no distribution declared for myEquity Index Fund for the period ended 31 December 2019.

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 2019.

93.75%

6.25%

Equities

Money Market &

Cash

4.27%

4.90%

5.02%

5.41%

12.74%

Digi.Com Bhd

Axiata Group Berhad

Sime Darby Plantation Berhad

Petronas Chemicals Group Bhd

Tenaga Nasional Bhd




myGROWTH FUND Performance Review For the financial year ended 31 December 2019, myGrowth Fund recorded performance of a 2.44% gain in tandem with the positive return of its benchmark, FBMSI which recorded a gain of 3.9%.



myGrowth 2.4% -1.6% -2.7% 2.4% -0.5% -0.5%

Benchmark 3.9% -0.6% -4.5% 3.9% -0.2% -0.9%

Asset Allocation In terms of asset allocation, the fund has invested 74.43% in equity and the remaining is in money market / cash. On equity sectoral allocation, the Industrial Products & Services sector was the top sector the fund has invested in with 20.82% exposure. The details of the asset allocation and the top 5 investment holdings are given below:-

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

Re

turn

(%

)

myGrowth Fund vs Benchmark

myGrowth Fund Benchmark

20.82%

10.13% 9.66% 8.41%

7.12%

5.20%

Industrial Products & Services

Consumer Products & Services

Energy Healthcare Utilities Technology




Details on Distribution There was no distribution declared for myGrowth Fund for the period ended 31 December 2019.


74.43%

25.57%

Equities

Money Market & Cash

2.60%

2.65%

2.84%

2.91%

2.97%

Serba Dinamik Holdings Berhad

Yinson Holdings Bhd

MBM Resources Bhd

Tenaga Nasional Bhd

Frontken Corp Bhd




myBLUE CHIPS FUND Performance Review For the period under review, myBlueChips Fund performance outperformed its benchmark, FBMSI by 24 bps with a gain of 4.1% against its benchmark’s gain of 3.9% as detailed out below:-



myBlue Chips 4.1% 3.4% 2.6% 4.1% 1.1% 0.5%

Benchmark 3.9% -0.6% -4.5% 3.9% -0.2% -0.9%

Asset Allocation In terms of asset allocation, the fund has invested 75.00% in equity and the remaining in money market / cash. On equity sectoral allocation, the Industrial Products & Services sector was the top sector the fund has invested in as most of the blue chip companies are included in this sector. The details of the asset allocation and the top 5 investment holdings are given below:-

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Re

turn

(%

)

myBlue Chips Fund vs Benchmark

myBlue Chips Fund Benchmark

20.01%

15.09%

9.08% 7.18%

5.80% 5.48%



Energy Utilities Healthcare Technology




Details on Distribution There was no distribution declared for myBlue Chips Fund for the period ended 31 December 2019.


75.00%

25.00%

Equities

Money Market & Cash

2.45%

2.49%

2.63%

2.79%

2.95%

Yinson Holdings Bhd

QL Resources Berhad

MBM Resources Bhd

Frontken Corp Bhd

Tenaga Nasional Bhd




myDIVIDEND FUND Performance Review For the 12 months ending 31 December 2019, the fund is trailing its benchmark, FBMSI by 83 bps with a gain of 3.0% against its benchmark’s gain of 3.9% as detailed out below:-



myDividend 3.0% 0.2% -1.2% 3.0% 0.1% -0.2%

Benchmark 3.9% -0.6% -4.5% 3.9% -0.2% -0.9%

Asset Allocation In terms of asset allocation, the fund has invested 77.03% in equity and the remaining in money market/cash. On equity sectoral allocation, the Industrial Products & Services sector was the top sector the fund invested in with 18.92% allocation. The details of the asset allocation and the top 5 investment holdings are shown below:-

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Re

turn

(%

)

myDividend Fund vs Benchmark

myDividend Fund Benchmark

18.92%

13.89%

8.85% 7.83%

6.62%

4.29%

Industrial Product & Services


Energy Telecommunication Utilities Property




Details on Distribution There was no distribution declared for myDividend Fund for the period ended 31 December 2019.


77.03%

22.97%

Equities

Money Market & Cash

2.33%

2.40%

2.44%

2.58%

2.64%

Sunway Bhd

Serba Dinamik Holdings Berhad

MBM Resources Bhd

Tenaga Nasional Bhd

Frontken Corp Bhd




myBALANCED FUND Performance Review For the financial year ended 31 December 2019, myBalanced Fund recorded a gain of 7.1% outperforming its blended benchmark of 40% FBMSI and 60% 12-Month Maybank GIA rate by 348bps with a recorded gain of 3.6%.



myBalanced 7.1% 10.6% 16.6% 7.1% 3.4% 3.1%

Benchmark 3.6% 6.5% 9.6% 3.6% 2.1% 1.9%

Asset Allocation As at 31 December 2019, the majority of the fund’s asset allocation invested in sukuk, in line with its stated asset allocation mandate to invest up to 60% in sukuk. The fund had invested 58.81% in sukuk and the remaining in equity (29.81%) and money market/cash (11.38%). The details of the asset allocation and the top 5 investment holdings are given below:-

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Retr

un

(%

)

myBalanced Fund vs Benchmark

myBalanced Fund Benchmark

58.81%

8.98% 4.10% 3.61% 2.75% 2.65%

Sukuk Industrial Product & Services

Energy Consumer Products & Services

Healthcare Utilities


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 sukuk.

Details on Distribution There was no distribution declared for myBalanced Fund for the period ended 31 December 2019.


58.81%

29.81%

11.38%

Sukuk

Equities

Money Market &

Cash

4.57%

4.61%

5.03%

5.04%

5.09%

Bank Islam Malaysia Berhad

Malakoff Power Berhad

Jimah East Power Sdn Bhd

UMW Holdings Berhad

Tenaga Nasional Berhad



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 10.5 of the Guidelines on Investment-Linked 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.


STATEMENT BY DIRECTORS

In the opinion of the Directors of Manager, the Takaful Investment-Linked Funds (“Funds’’) financial information set out

on pages 31 to 42, comprising the Statements of Assets and Liabilities as at 31 December 2019 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 2019 together with the notes thereto, have been drawn up in accordance with the Guidelines on

Investment-Linked Business issued by Bank Negara Malaysia and give true and fair view of the financial position of the

Funds as at 31 December 2019 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: ………………………………………………………… Datin Sri Azlin Arshad ………………………………………………………… Encik Mahadzir Azizan Kuala Lumpur, Date: 25 February 2020


INDEPENDENT AUDITORS’ REPORT to the unitholders of Syarikat Takaful Malaysia Keluarga Berhad’s Investment-Linked funds (Company No. 198401019089 (131646-K)) (Incorporated in Malaysia)

SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD (Company No. 198401019089 (131646-K)) (Incorporated in Malaysia) INDEPENDENT AUDITORS’ REPORT TO THE CERTIFICATE HOLDERS OF SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD: ITTIZAN ISTIQRAR myEQUITY INDEX myGROWTH myBLUE CHIPS myDIVIDEND myBALANCED (HEREINAFTER REFERRED TO COLLECTIVELY AS “THE FUNDS”) REPORT ON THE AUDIT OF THE FINANCIAL INFORMATION

Opinion We have audited the financial information of the Funds, which comprise the statements of assets and liabilities as at 31 December 2019, and the statements of income and expenditure, statements of changes in net asset value and cash flow statements for the financial year then ended, and notes to the financial information, including a summary of significant accounting policies, as set out in pages 31 to 42. In our opinion, the accompanying financial information of the Funds for the financial year ended 31 December 2019 are prepared, in all material respects, in accordance with the accounting policies set out in Note 1 to the financial information and the Guidelines on Investment-linked Business issued by Bank Negara Malaysia. Basis for opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial information” section of our report. We are independent of the Funds in accordance with the ethical requirements that are relevant to our audit of the financial information in Malaysia, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter – basis of preparation and restriction on distribution and use We draw attention to Note 1 to the financial information, which describes the basis of preparation. The financial information is prepared to assist the Funds to meet the requirements of the Guidelines on Investment-linked Business issued by Bank Negara Malaysia. As a result, the financial information may not be suitable for another purpose. Our report is intended solely for the certificate holders of the Funds as a body and should not be distributed to or used by parties other than the certificate holders of the Funds. Our opinion is not modified in respect of this matter.


SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD (Company No. 198401019089 (131646-K)) (Incorporated in Malaysia) INDEPENDENT AUDITORS’ REPORT TO THE CERTIFICATE HOLDERS OF SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD: (CONTINUED) ITTIZAN ISTIQRAR myEQUITY INDEX myGROWTH myBLUE CHIPS myDIVIDEND myBALANCED (HEREINAFTER REFERRED TO COLLECTIVELY AS “THE FUNDS”) (continued) REPORT ON THE AUDIT OF THE FINANCIAL INFORMATION (continued) Responsibilities of the Manager for the financial information The Directors of Syarikat Takaful Malaysia Keluarga Berhad (“the Manager”) are responsible for the preparation of the financial information in accordance with the accounting policies set out in Note 1 to the financial information and the Guidelines on Investment-linked Business issued by Bank Negara Malaysia, and for such internal control as the Manager determines is necessary to enable the preparation of financial information that are free from material misstatement, whether due to fraud or error. In preparing the financial information, the Manager is responsible for assessing the Funds’ ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Manager either intends to liquidate the Funds or to cease operations, or has no realistic alternative but to do so. The Manager is responsible for overseeing the Funds’ financial reporting process. Auditors’ responsibilities for the audit of the financial information Our objectives are to obtain reasonable assurance about whether the financial information of the Funds as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial information.


SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD (Company No. 198401019089 (131646-K)) (Incorporated in Malaysia) INDEPENDENT AUDITORS’ REPORT TO THE CERTIFICATE HOLDERS OF SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD: (CONTINUED) ITTIZAN ISTIQRAR myEQUITY INDEX myGROWTH myBLUE CHIPS myDIVIDEND myBALANCED (HEREINAFTER REFERRED TO COLLECTIVELY AS “THE FUNDS”) (continued) REPORT ON THE AUDIT OF THE FINANCIAL INFORMATION (continued) Auditors’ responsibilities for the audit of the financial information (continued) As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (a) Identify and assess the risks of material misstatement of the financial information of the Funds, whether due to

fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(b) Obtain an understanding of internal control relevant to the audit 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 Manager’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by the Manager. (d) Conclude on the appropriateness of the Manager’s use of the going concern basis of accounting and, based on

the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Funds’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial information or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Funds to cease to continue as a going concern.


SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD (Company No. 198401019089 (131646-K)) (Incorporated in Malaysia) INDEPENDENT AUDITORS’ REPORT TO THE CERTIFICATE HOLDERS OF SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD: (CONTINUED) ITTIZAN ISTIQRAR myEQUITY INDEX myGROWTH myBLUE CHIPS myDIVIDEND myBALANCED (HEREINAFTER REFERRED TO COLLECTIVELY AS “THE FUNDS”) (continued) REPORT ON THE AUDIT OF THE FINANCIAL INFORMATION (continued) Auditors’ responsibilities for the audit of the financial statements (continued) We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. PRICEWATERHOUSECOOPERS PLT LLP0014401-LCA & AF1146 Chartered Accountants Kuala Lumpur 25 February 2020


STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2019

ITTIZAN

ISTIQRAR

myEQUITY

INDEX

myGROWTH

myBLUE

CHIPS

myDIVIDEND

myBALANCED

Note RM RM RM RM RM RM RM

ASSETS

Sukuk 2 1,709,060 3,608,856 - - - - 13,119,312

Quoted Shares 3 5,214,472 2,158,288 35,983,846 8,187,903 6,945,995 9,105,077 6,648,857

Unit Trusts 4 - - - - - 267,270 -

Other Assets 27,764 42,096 1,703,007 320,860 202,292 375,359 449,350

Deposits with

Financial

Institutions

2,497,000 2,061,000 2,023,000 2,876,000 2,238,000 2,735,000 2,411,000

Cash and Cash

Equivalents

1,620 1,190 1,544 2,206 1,232 1,771 1,579

9,449,916 7,871,430 39,711,397 11,386,969 9,387,519 12,484,477 22,630,098

LIABILITIES

Other Liabilities 60,306 102,718 1,329,877 386,867 125,878 316,615 322,771

60,306 102,718 1,329,877 386,867 125,878 316,615 322,771

Net Asset Value 9,389,610 7,768,712 38,381,520 11,000,102 9,261,641 12,167,862 22,307,327

REPRESENTED

BY

Certificate

Holders Capital

5,011,154 5,604,557 35,546,909 10,427,649 8,126,348 11,050,906 19,556,799

Accumulated

Income Carried

Forward

4,378,456 2,164,155 2,834,611 572,453 1,135,293 1,116,956 2,750,528

9,389,610 7,768,712 38,381,520 11,000,102 9,261,641 12,167,862 22,307,327

Number of Units

5,317,217 5,155,629 22,551,719 8,734,613 6,878,506 8,708,274 16,773,722

Net Asset Value

Per Unit

1.7659 1.5068 1.7019 1.2594 1.3465 1.3973 1.3299


STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2018

ITTIZAN

ISTIQRAR

myEQUITY

INDEX

myGROWTH

myBLUE

CHIPS

myDIVIDEND

myBALANCED

Note RM RM RM RM RM RM RM

ASSETS

Sukuk

2

2,090,100 3,897,659 - - - - 12,570,096

Quoted Shares 3 4,626,658 1,869,408 30,237,577 6,122,162 5,215,859 5,843,051 4,967,565

Unit Trusts

4 - - - - 84,260 - -

Other Assets 454,481 117,732 2,027,282 450,198 227,315 832,473 411,351

Deposits with

Financial

Institutions

2,505,000

1,983,000

2,463,000

3,405,000

3,069,500

4,391,500

3,849,000

Cash and Cash

Equivalents

290

245

281

500

233

544

251

9,676,529 7,868,044 34,728,140 9,977,860 8,597,167 11,067,568 21,798,263

LIABILITIES

Other Liabilities 217,489 141,271 2,027,747 272,684 240,311 354,181 421,004

217,489 141,271 2,027,747 272,684 240,311 354,181 421,004

Net Asset Value 9,459,040 7,726,773 32,700,393 9,705,176 8,356,856 10,713,387 21,377,259

REPRESENTED

BY

Certificate

Holders Capital

5,547,206

5,922,038

30,732,191

9,379,619

7,578,991

9,935,449

20,136,988

Accumulated

Income Carried

Forward

3,911,834

1,804,735

1,968,202

325,557

777,865

777,938

1,240,271

9,459,040 7,726,773 32,700,393 9,705,176 8,356,856 10,713,387 21,377,259

Number of Units

5,521,031 5,369,889 19,681,344 7,897,059 6,464,041 7,901,669 17,208,878

Net Asset Value

Per Unit

1.7133

1.4389

1.6615

1.2290

1.2928

1.3558

1.2422


STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2019

ITTIZAN

ISTIQRAR

myEQUITY

INDEX

myGROWTH

myBLUE

CHIPS

myDIVIDEND

myBALANCED

RM RM RM RM RM RM RM

Income

Gross Dividend Income 155,114 63,569 843,110 217,199 173,577 283,337 193,404

Profit Income:

Sukuk 121,360 227,705 - - - - 741,011

Islamic Investment

Deposits with

Financial

Institutions

58,306 50,991 64,411 83,942 74,596 102,808 54,858

Unrealised Capital Gain 429,326 204,422 1,045,303 634,937 455,428 690,941 1,054,825

764,106 546,687 1,952,824 936,078 703,601 1,077,086 2,044,098

Outgo

Fees (141,617) (116,989) (523,127) (143,011) (120,420) (156,238) (265,185)

Loss on Disposal:

Quoted Shares (196,297) (19,364) (790,833) (474,471) (333,750) (639,443) (318,257)

Islamic Debts

Securities (42,616) (68,776) - - - - (36,011)

Other Outgo (41,029) (19,536) (93,938) (58,844) (44,380) (63,563) (90,448)

(421,559) (224,665) (1,407,898) (676,326) (498,550) (859,244) (709,901)

Excess of Income over

Outgo before tax 342,547

322,022 544,926 259,752 205,051 217,842 1,334,197

Tax Expense 124,075 37,398 321,482 (12,856) 152,376 121,176 176,060

Excess of Income

over Outgo after tax 466,622 359,420 866,408 246,896 357,427 339,018 1,510,257

Undistributed Income

brought forward 3,911,834 1,804,735 1,968,202 325,557 777,865 777,938 1,240,271

Amount Available for

Distribution 4,378,456 2,164,155 2,834,611 572,453 1,135,293 1,116,956 2,750,528


carried forward 4,378,456 2,164,155 2,834,611 572,453 1,135,293 1,116,956 2,750,528


STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2018

ITTIZAN

ISTIQRAR

myEQUITY

INDEX

myGROWTH

myBLUE

CHIPS

myDIVIDEND

myBALANCED


Income

Gross Dividend Income 193,109 62,046 837,073 195,680 166,261 220,165 106,735

Profit Income:

Sukuk 105,629 188,678 - - - - 633,213

Islamic Investment

Deposits with

Financial

Institutions

48,706

62,599

70,942

109,097

88,128

127,562

186,599

Other Income 5,527 - 206,412 60,141 52,247 60,685 27,446

352,971 313,323 1,114,427 364,918 306,636 408,412 953,993

Outgo

Fees (158,559) (122,292) (473,842) (135,115) (116,121) (146,656) (266,985)

Loss on Disposal:

Quoted Shares (1,294,701) (498,878) (644,596) (720,580) (337,581) (751,238) (705,462)

Unrealised Capital Loss (160,173) (36,133) (2,635,985) (794,747) (683,648) (796,688) (385,439)

Other Outgo - (3,545) - - - - -

(1,613,433)

(660,848)

(3,754,423)

(1,650,442)

(1,137,350)

(1,694,582)

(1,357,886)

Excess of Outgo over

Income before tax (1,260,462)

(347,525)

(2,639,996)

(1,285,524)

(830,714)

(1,286,170)

(403,893)

Tax Expense 76,103 15,166 (21,074) 33,264 6,655 32,281 (17,687)

Excess of Outgo over

Income after tax (1,184,359) (332,359) (2,661,070) (1,252,260) (824,059) (1,253,889) (421,580)


brought forward

5,096,193

2,137,093

4,629,271

1,577,817

1,601,923

2,031,827

1,661,851

Amount Available for

Distribution

3,911,834

1,804,735

1,968,202

325,557

777,865

777,938

1,240,271


carried forward

3,911,834

1,804,735

1,968,202

325,557

777,865

777,938

1,240,271


STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2019

ITTIZAN

ISTIQRAR

myEQUITY INDEX

myGROWTH

myBLUE

CHIPS

myDIVIDEND

myBALANCED


Net Asset Value at the

Beginning of the

Financial Year

9,459,040 7,726,773 32,700,393 9,705,176 8,356,856 10,713,387 21,377,259

Amount Received from

Units Creation 15,600 10,208 7,691,165 1,617,186 1,089,205 1,863,005 1,461,926

Amount Paid from

Units Cancellation (551,652) (327,689) (2,876,447) (569,157) (541,848) (747,548) (2,042,115)

Net Income 466,622 359,420 866,409 246,896 357,428 339,018 1,510,257


End of Financial Year 9,389,610 7,768,712 38,381,520 11,000,101 9,261,641 12,167,862 22,307,327

STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2018

ITTIZAN

ISTIQRAR

myEQUITY INDEX

myGROWTH

myBLUE

CHIPS

myDIVIDEND

myBALANCED



Beginning of the

Financial Year

11,122,075

8,288,322

31,443,403

10,232,169

8,815,441

11,211,659

22,297,167

Amount Received from

Units Creation

15,129

6,579

6,682,018

1,351,272

878,885

1,596,953

1,217,307

Amount Paid from

Units Cancellation

(493,805)

(235,770)

(2,763,959)

(626,005)

(513,412)

(841,336)

(1,715,635)

Net Outgo (1,184,359) (332,358) (2,661,069) (1,252,260) (824,058) (1,253,889) (421,580)


End of Financial Year

9,459,040

7,726,773

32,700,393

9,705,176

8,356,856

10,713,387

21,377,259


CASH FLOW STATEMENTS FOR FINANCIAL YEAR ENDED 31 DECEMBER 2019

ITTIZAN

ISTIQRAR

myEQUITY

INDEX

myGROWTH

myBLUE

CHIPS

myDIVIDEND

myBALANCED

2019 RM RM RM RM RM RM RM

Cash Flow from

Operating Activities

Income Before Taxation 466,622 359,420 866,409 246,896 357,428 339,018 1,510,257

Adjustment for:

Profit Income

(179,666) (278,696) (64,411) (83,942) (74,596) (102,808) (795,869)

Gross Dividend

Income (155,114) (63,569) (843,110) (217,199) (173,577) (283,337) (193,404)

Loss on Disposal 238,913 88,140 790,833 474,471 333,750 639,443 354,268

Unrealised Capital Gain (429,326) (204,422) (1,045,302) (634,937) (455,428) (690,941) (1,054,825)

Outgo from Operations

Before Changes in

Operating Assets and

Liabilities

(58,571) (99,127) (295,581) (214,711) (12,423) (98,625) (179,573)

Proceeds from Disposal of

Investment 4,858,624 2,171,816 14,223,687 6,370,272 6,197,141 7,463,453 5,971,850

Purchase of Investment (4,866,986) (2,133,610) (19,275,486) (7,746,547) (6,889,839) (9,284,750) (6,063,802)

Decrease/(increase) in

other assets

426,717 75,636 324,275 129,338 25,023 457,114 (37,999)

(Decrease) / Increase in

Other Liabilities (157,183) (38,554) (697,870) 114,183 (114,432) (37,566) (98,233)

Cash used in Operations 202,601 (23,839) (5,720,975) (1,347,465) (794,530) (1,500,374) (407,757)

Profit Income Received 179,666 278,697 64,411 83,942 74,596 102,808 795,869

Gross Dividend Income

Received 155,115 63,569 843,110 217,199 173,577 283,336 193,405

Net Cash generated from

/ (used in) Operating

Activities

537,382 318,427 (4,813,454) (1,046,324) (546,357) (1,114,230) 581,517

Cash Flow from

Financing Activities

Proceeds from Creations

of Units 15,600 10,208 7,691,164 1,617,187 1,089,204 1,863,005 1,461,926

Payment for Cancellation

of Units (551,652) (327,689) (2,876,447) (569,157) (541,848) (747,548) (2,042,115)

Net Cash (used in) /

generated from


(536,052) (317,481) 4,814,717 1,048,030 547,356 1,115,457 (580,189)

Net Increase in Cash and

Cash Equivalents 1,330 945 1,263 1,706 999 1,227 1,328

Cash and Cash

Equivalents at 1

January 2019

290 245 281 500 233 544 251

Cash and Cash

Equivalents at 31

December 2019 1,620 1,190 1,544 2,206 1,232 1,771 1,579


CASH FLOW STATEMENTS FOR FINANCIAL YEAR ENDED 31 DECEMBER 2018

ITTIZAN

ISTIQRAR

myEQUITY

INDEX

myGROWTH

myBLUE

CHIPS

myDIVIDEND

myBALANCED

2018 RM RM RM RM RM RM RM

Cash Flow from

Operating Activities

Outgo Before Taxation (1,184,359) (332,358) (2,661,069) (1,252,260) (824,058) (1,253,889) (421,580)

Adjustment for:

Profit Income

(154,335) (251,277) (70,942) (109,097) (88,128) (127,562) (819,812)

Gross Dividend

Income

(193,109)

(62,046)

(837,073)

(195,680)

(166,261)

(220,165)

(106,735)

Loss on Disposal 1,294,701 498,878 644,596 720,580 337,581 751,238 705,462

Unrealised Capital Loss 160,173 36,133 2,635,985 794,747 683,648 796,688 385,439

Outgo from Operations

Before Changes in

Operating Assets and

Liabilities

(76,929)

(110,670)

(288,503)

(41,710)

(57,218)

(53,690)

(257,226)

Proceeds from Disposal of

Investment

2,366,441

1,206,743

2,112,436

2,157,554

886,582

2,053,960

1,193,610

Purchase of Investment (1,831,706) (1,172,436) (5,690,089) (3,197,895) (1,626,315) (2,861,404) (1,191,707)

(Increase) / Decrease in

Other Assets

(424,345)

(42,054)

(673,100)

77,453

181,105

(233,568)

136,142

Increase / (Decrease) in

Other Liabilities

61,363

7,006

(450,266)

(53,792)

(29,019)

(39,303)

(345,064)

Cash generated / (used)

in Operations

94,824

(111,411)

(4,989,522)

(1,058,390)

(644,865)

(1,134,005)

(464,245)

Profit Income Received 154,335 251,277 70,942 109,097 88,128 127,562 819,812

Gross Dividend Income

Received

193,109

62,046

837,073

195,680

166,261

220,165

106,735

Net Cash generated from

/ (used in) Operating

Activities

442,268

201,912

(4,081,507)

(753,613)

(390,476)

(786,278)

462,302

Cash Flow from


Proceeds from Creations

of Units

15,129

6,579

6,682,018

1,351,272

878,885

1,596,953

1,217,307

Payment for Cancellation

of Units

(493,805)

(235,770)

(2,763,959)

(626,005)

(513,412)

(841,336)

(1,715,635)

Net Cash (used in) /

generated from


(478,676)

(229,191)

3,918,059

725,267

365,473

755,617

(498,328)

Net Decrease in Cash

and Cash Equivalents

(36,408)

(27,279)

(163,448)

(28,346)

(25,003)

(30,661)

(36,026)

Cash and Cash

Equivalents at 1

January 2018

36,698

27,524

163,729

28,846

25,236

31,205

36,277

Cash and Cash

Equivalents at 31

December 2018

290

245

281

500

233

544

251


NOTES TO THE FINANCIAL STATEMENTS

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

th Floor, Annexe Block

Menara Takaful Malaysia No.4, Jalan Sultan Sulaiman 50000 Kuala Lumpur The Manager is principally engaged in managing family takaful business. The family takaful business includes investment-linked products. The financial information were approved by the Board of Directors of the Manager on 25 February 2020. 1. Summary of significant accounting policies

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

(a) Basis of accounting

The financial information 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. The financial information have been prepared under the historical cost convention except as disclosed in the significant accounting policies.

(b) Functional and presentation currency

These financial information 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 deposits held at call with financial institutions with original maturities of three months or less.


1. Summary of significant accounting policies (continued)

(e) Financial liabilities Financial liability is recognised in the Statements of Assets and Liabilities when and only when, the Fund becomes a party to the contractual provisions of the instrument. The Fund's financial liabilities are measured at amortised cost using the effective profit rate method. A financial liability is derecognised when the obligation under the liability is extinguished. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

(f) 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 recognized on a receipt basis.

(g) 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 recognized upon surrendering of/withdrawal from the related takaful certificates.

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

(i) Investment management fees

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

(j) Other income Other income is recognised to the extent that it is probable that the economic benefits will flow to the Fund and the income can be reliably measured. Income is measured at the fair value of consideration received or receivable.

(k) Other outgo Other outgo, other than the outgo directly attributable to the principal activities, is recognised in the Statements of Income and Expenditure.

(l) Taxation Current tax assets or liabilities position as at reporting date are measured at the net amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the tax expense for the financial year are those that are enacted or substantively enacted by the reporting date. Current taxes are recognised in the Statements of Income and Expenditure.


2. Sukuk

31 December 2019 RM

31 December 2018 RM

(i) Ittizan

Cost 1,647,032 2,118,031

Unrealised capital gain / (loss) 62,028 (27,937)

Market value 1,709,060 (2,090,100)

(ii) Istiqrar

Cost 3,522,577 3,955,627


Market value 3,608,856 3,897,659

(iii) myBalanced

Cost 12,481,597 12,484,590

Unrealised capital gain 637,715 85,506

Market value 13,119,312 12,570,096

3. Quoted shares

31 December 2019

RM

31 December 2018

RM

(i) Ittizan

Cost 5,020,195 4,771,748


Market value 5,214,472 4,626,658

3.

(ii) Istiqrar

Cost 2,114,914 1,886,210


Market value 2,158,288 1,869,408

(iii) myEquity Index

Cost 36,097,531 31,396,565

Unrealised capital loss (113,685) (1,158,988)

Market value 35,983,846 30,237,577

(iv) myGrowth

Cost 7,992,060 6,561,256


Market value 8,187,903 6,122,162


3. Quoted shares (continued)

(v) myBlue Chips

Cost 6,834,586 5,558,954


Market value 6,945,995 5,215,859

(vi) myDividend

Cost 8,784,326 6,220,487


Market value 9,105,077 5,843,051

(vii) myBalanced

Cost 6,507,902 5,329,225


Market value 6,648,857 4,967,565

4. Unit Trusts

31 December 2019 RM

31 December 2018 RM

(i) myBlue Chips

Cost - 85,183

Unrealised capital loss - (923)

Market value - 84,260

(ii) myDividend

Cost 274,516 -

Unrealised capital loss (7,246) -

Market value 267,270 -

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

Market risk Market risk arises when the value of securities fluctuates 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.


5. Financial Instruments (continued)

Liquidity risk

This may come about when 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.

Profit rate risk When the profit rate rises, bond prices fall and vice versa. The profit rate risk is monitored through periodic reviews of its asset and liability positions with the objective to limit the net changes in the value of assets and liabilities arising from profit rate movements. Shariah risk Shariah risk arises when transaction entered by an Islamic financial institution (IFI) is declared impermissible according to Shariah. Any profit sourced from Shariah non-compliance transaction shall be cleansed in order to retain compliance and it also will impact the reputation of IFI.

Fair values The fair values of investments have been disclosed in notes 2, 3 and 4. The basis of deriving the fair values is disclosed in Note 1(c).


DETAILS OF INVESTMENTS

ITTIZAN

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

Construction

Muhibbah Engineering(M) Bhd 63,000 153,066 154,980 1.65

Sunway Construction Group Bhd 80,500 144,126 153,755 1.64

Consumer

Bermaz Auto Bhd 67,200 156,266 141,120 1.50

MBM Resources Bhd 54,000 159,340 208,440 2.22

Sime Darby Berhad 71,452 149,648 158,623 1.69

UMW Holdings Berhad 15,600 90,012 70,044 0.75

Energy

Dialog Group Bhd 50,664 85,760 174,791 1.86

Hibiscus Petroleum Bhd 182,000 169,961 171,080 1.82

Serba Dinamik Holdings Berhad 81,900 141,064 180,180 1.92

Yinson Holdings Bhd 24,000 103,969 155,520 1.66

Financial Services

Bursa Malaysia Berhad 21,000 145,105 127,890 1.36

Health Care

IHH Healthcare Bhd 29,000 172,677 158,630 1.69

KPJ Healthcare Berhad 186,000 199,162 175,770 1.87

Supermax Corp Bhd 99,507 185,991 138,315 1.47

Industrial Products

Chemical Co of Malaysia Bhd 81,600 169,442 100,368 1.07

Chin Well Holdings Bhd 106,000 188,477 146,280 1.56

Cypark Resources Bhd 112,150 174,957 160,374 1.71

Favelle Favco Bhd 62,000 173,603 169,260 1.80

Kelington Group Bhd 135,000 173,480 170,100 1.81

Petronas Chemicals Group Bhd 22,000 151,701 161,700 1.72

Scientex Bhd 18,000 158,635 170,100 1.81

SKP Resources Bhd 123,100 161,657 167,416 1.78

Sunway Bhd 100,989 162,664 181,780 1.94

UEM Edgenta Bhd 54,600 152,680 164,346 1.75

Technology

Frontken Corp Bhd 111,500 114,006 255,335 2.72

Vitrox Corp Bhd 21,000 149,627 166,320 1.77

Telecommunications & Media

Axiata Group Berhad 32,994 174,098 136,595 1.45

Time DotCom Bhd 17,800 145,934 164,116 1.75

Transportation & Logistics

Westports Holdings Bhd 43,000 170,879 181,030 1.93


Security Name

Number of Units Total Cost Market Value % of NAV

Utilities

Gas Malaysia Bhd 56,400 163,035 155,100 1.65

Petronas Gas Bhd 10,000 175,306 166,200 1.77

Tenaga Nasional Bhd 16,487 203,869 218,618 2.33

Warrants

Serba Dinamik Holdings Bhd - Warrants 23,400 - 10,296 0.11

Total Malaysian Equities 2,173,843 5,020,197 5,214,472 55.53

Sukuk

Electric/Power Generation

Kapar Energy Ventures Sdn Bhd 200,000 204,800 206,816 2.20

Malakoff Power Berhad 200,000 207,240 228,544 2.43

TNB Northern Energy 200,000 200,000 207,596 2.21

Financial Services

National Bank Of Abu Dhabi 200,000 204,000 203,012 2.16

Ranhill Powertron II Sdn Bhd 200,000 220,080 220,776 2.35

Oil & Gas

Alam Maritim Resources Bhd 211,772 211,772 211,772 2.26

Transportation & Toll Roads

Cerah Sama Sdn Bhd 200,000 197,000 216,784 2.31

Projek Lebuhraya Usahasama Berhad 200,000 202,140 213,760 2.28

Total Malaysian Sukuk 1,611,772 1,647,032 1,709,060 18.20

Total Malaysian Equities & Debt Securities 3,785,615 6,667,229 6,923,532 73.73


ISTIQRAR

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

Construction

Muhibbah Engineering(M) Bhd 31,600 81,417 77,736 1.00


Bermaz Auto Bhd 33,600 76,082 70,560 0.91

MBM Resources Bhd 24,000 71,269 92,640 1.19

Sime Darby Berhad 30,451 68,475 67,601 0.87

UMW Holdings Berhad 11,000 60,430 49,390 0.64

Energy

Dialog Group Bhd 18,608 38,501 64,197 0.83

Hibiscus Petroleum Bhd 76,000 69,044 71,440 0.92

Serba Dinamik Holdings Berhad 33,390 56,802 73,458 0.95

Yinson Holdings Bhd 12,000 50,349 77,760 1.00

Financial Services

Bursa Malaysia Berhad 5,000 34,064 30,450 0.39

Health Care

IHH Healthcare Bhd 12,000 71,404 65,640 0.85

KPJ Healthcare Berhad 68,000 71,934 64,260 0.83

Supermax Corp Bhd 50,769 103,226 70,569 0.91


Chemical Co of Malaysia Bhd 33,000 68,037 40,590 0.52

Chin Well Holdings Bhd 52,000 94,403 71,760 0.92

Cypark Resources Bhd 50,250 73,742 71,857 0.92

Favelle Favco Bhd 24,000 67,245 65,520 0.84

Kelington Group Bhd 53,000 67,035 66,780 0.86

Petronas Chemicals Group Bhd 10,000 66,157 73,500 0.95

Scientex Bhd 10,000 88,097 94,500 1.22

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