Page GROUP MANAGING DIRECTOR S STATEMENT 3 FUND PROFILE 4 GLOBAL AND LOCAL ECONOMIC REVIEW 7 EQUITY AND FIXED INCOME MARKET REVIEW 9

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2 Page GROUP MANAGING DIRECTOR S STATEMENT 3 FUND PROFILE 4 GLOBAL AND LOCAL ECONOMIC REVIEW 7 EQUITY AND FIXED INCOME MARKET REVIEW 9 MARKET OUTLOOK AND INVESTMENT STRATEGY 11 FUND PERFORMANCE REPORT 13 SOFT COMMISSION RECEIVED FROM BROKERS 27 STATEMENT BY DIRECTORS 28 INDEPENDENT AUDITOR S REPORT 29 STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL YEAR ENDED 31 DECEMBER STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL YEAR ENDED 31 DECEMBER STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER CASH FLOW STATEMENT FOR FINANCIAL YEAR ENDED 31 DECEMBER CASH FLOW STATEMENT FOR FINANCIAL YEAR ENDED 31 DECEMBER NOTES TO THE FINANCIAL STATEMENTS 38 DETAILS OF INVESTMENTS 42 COMPARATIVE PERFORMANCE TABLE 56 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 2

3 GROUP MANAGING DIRECTOR S STATEMENT It is my pleasure to present the 2016 Annual Report of Takaful Malaysia s Investment-Linked Funds (ILP Funds) for the financial year ended 31 December The funds namely are Ittizan, Istiqrar, myequity Index Fund, mygrowth Fund, myblue Chips Fund, mydividend Fund and mybalanced Fund. For the last three years, the performance of the Malaysian stock market has not been encouraging and recorded losses consecutively. The FBM KLCI declined by 51 points, reporting a -3.0% loss year-on-year from 1, points on 31 December 2015, to 1, points as of 31 December There were many contributing factors, both domestic and external that affected the market namely, the weaker corporate earnings, strengthening of the United States (US) Dollar and slower global growth. Two major unexpected global events, namely the outcome of the Brexit referendum (on 24 June) with 51.9% who voted LEAVE ; and (ii) the victory of the unconventional US presidency election candidate, Donald Trump (on 9 Nov) affected the volatility of the market and its selling pressure. This therefore brought about a weaker-than-expected KLCI performance for During the year, the foreign net outflow was RM3.0 billion as compared in 2015, where the net outflow was RM19.5 billion. In comparison to other markets, the performance of the equity markets in 2016 were mixed with the United States, Thailand, and Indonesia charting well with annual gains at 13.4% 19.8% and 15.3%, whilst Philippines, Malaysia and China were down by -1.6%, -3.0% and -11.3% respectively. Despite the negative performance of the local market and the various uncertainties over external headwinds in global events, I am pleased to report that we rose above the challenges to maintain a stable return on investment to our valued customers. We exercised prudent investment strategies in ensuring the long-term objectives of our customers funds are met whilst managing the investment risk and return efficiently. For the year 2016, all the funds registered encouraging performances and managed to outperform their respective benchmarks by 40 to 324 bps. By rank, the outperformance was led by the Equity funds namely mydividend fund, mygrowth fund and myblue Chips fund with surpass of 324 bps, 316 bps and 295 bps respectively against their benchmark return of a loss -6.14%. Similarly, our mixed asset funds namely mybalanced fund, Ittizan and Istiqrar ended the year with an outrun to their respective benchmarks by 261 bps, 161 bps and 40 bps. You may find out more about the funds information and financial performance in the following pages. We anticipate the challenges for 2017 to be centered more on the global and political events of 2016, especially on the outcome of changes in trade-related policies. The International Monetary Fund (IMF) has projected the economic activity to pick up pace in 2017 and 2018, especially in emerging and developing markets. However, we remain cautious given the uncertainty surrounding the policy stance of the new US administration and its global ramifications. For Malaysia, we expect our growth to come mainly from domestic demand as we turn cautiously optimistic that corporate earnings will improve helped by improvement in commodity prices and resilient domestic consumption trends. Amidst the impending challenges, uncertainties and market volatilities, we will continue to be cautious and vigilant in our investment strategies of the funds to ensure their long-term investment objectives are met and at the same time investment risk and return is managed efficiently. In concluding, we would like to express our utmost appreciation and gratitude for your continuous support for our Takaful Investment-Linked products. We will continue to do our best to serve you better and ensure Takaful Malaysia remains your preferred choice for insurance. Dato Sri Mohamed Hassan Kamil Group Managing Director SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 3

4 FUND PROFILE ITTIZAN Investment Objective Investment Strategy Asset Allocation Performance Benchmark To achieve reasonable returns and capital growth opportunities via selected investments in Shariah approved shares listed in Bursa Malaysia and Sukuk. Invest in a balanced asset allocation comprising of Shariah-compliant equity, Sukuk and money market. 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. 70% FBM Emas Shariah Index ( FBMSI ) and 30% one-month return Maybank General Investment Account rate ( GIA ). ISTIQRAR Investment Objective Investment Strategy Asset Allocation Performance Benchmark 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. Invest in a balanced asset allocation comprising mainly of Sukuk with smaller exposure in Shariah-compliant equity. 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 Investment Objective Investment Strategy Asset Allocation Performance Benchmark To achieve returns that tracks the performance of the FBM Emas Shariah Index. 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. 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 ). SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 4

5 mygrowth FUND Investment Objective Investment Strategy Asset Allocation Performance Benchmark To achieve capital growth opportunities and dividend income through selective 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 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. At least 50% and a maximum of 95% 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. FBM Emas Shariah Index ( FBMSI ). myblue CHIPS FUND Investment Objective Investment Strategy Asset Allocation Performance Benchmark To achieve consistent capital growth in the long run through investments in Shariah-compliant Blue Chips Shares. 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. At least 40% and a maximum of 90% 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 ). mydividend FUND Investment Objective Investment Strategy Asset Allocation Performance Benchmark 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. 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. At least 40% and a maximum of 90% in Malaysian shares approved by the Shariah Advisory Council of the Securities Commission; At least 50% of the equity exposure is in dividend yield shares; The balance in Islamic money market instruments. FBM Emas Shariah Index ( FBMSI ). SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 5

6 mybalanced FUND Investment Objective Investment Strategy Asset Allocation Performance Benchmark 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. Invest in a balanced asset allocation comprising of Shariah-compliant equity, Sukuk and money market. At least 10% and a maximum of 40% in Malaysian shares approved by the Shariah Advisory Council of the Securities Commission; At least 10% and a maximum of 60% in Sukuk and Malaysian Government Investment Issues; The balance in Islamic money market instruments. 40% FBM Emas Shariah Index ( FBMSI ) and 60% 12 months return Maybank General Investment Account rate ( GIA ). SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 6

7 GLOBAL AND LOCAL ECONOMIC REVIEW Economic Review This annual report is for the financial year of 1 January 2016 to 31 December On the international front, the US Bureau of Economic Analysis estimated growth of 1.9% q-o-q in the GDP for 4Q2016 after growth of 3.5% in the 3Q2016. For the year 2016, real GDP increased 1.6%, compared with 2.6% in 2015 y-o-y. The growth in real GDP in 2016 reflected increases in consumer spending, residential investment, state and local government spend, exports, and federal government spending. However they were partly offset by declines in private inventory and business investment as well as increase in imports. In December 2016, US Federal Reserve (US Fed) finally increased the interest rate by 25 basis points, after a further delay in rate hikes, leading to a 0.50% level for its federal fund rate. European economy continued to struggle with many challenges, in particular UK s decision to leave European Union (EU) (referendum on 23 June 2016). The European Central Bank (ECB) had extended its quantitativeeasing program from end-march 2017 until end However, it will reduce the monthly pace of bond-buying from 80 billion to 60 billion with effect from April 2017 and keep its main refinancing rate and deposit rate at 0.00% and -0.40% respectively. Latest data showed that the annualised November inflation rate rose +0.6% and is expected to pick up in 2017 and 2018 but to remain below target (of 2.0%) at 1.7% in The Eurozone s GDP growth eased from 1.9% in 2015 to 1.7% in the first three quarters of 2016 amid slower export growth. China maintained its balancing act to stabilize growth this year by its fiscal stimulus, credit easing, and currency depreciation. China s GDP grew 6.7% for 2016 y-o-y, and this was the slowest full-year growth figure since 1990 but comfortably within the government s target range of 6.5-7%. China remained vulnerable to negative dynamics involving the currency and capital outflows, a pressure point that would intensify if the US government follows through on its confrontational trade-policy talks. China s inflation rate rose to 2.0% in the first eleven months of 2016 from 1.4% in 2015 due to higher food and housing costs. In January, oil price fell to a multiyear low of USD26/barrel (bbl). In the first quarter of the year, the price rose to above USD40/bbl on the back of expectations that Russia and the Organization of the Petroleum Exporting Countries (OPEC) would work together to curb supplies or freeze output. On 30 November 2016, OPEC announced a 1.2 million barrel per day (mbpd) crude oil output cut agreement among its members to 32.5mbpd followed with a side deal on 10 December 2016 with non-opec producers to add another 0.558mbpd cut. This resulted in the rebound of oil price but stabilised to close the year at USD56.82/pbl. Domestically, Malaysia announced a recalibrated 2016 Budget on 28 January 2016, to address the falling crude oil prices. The government lowered its Brent crude oil projection to USD30-35/bbl against USD48/bbl. This was coupled with Bank Negara s announcement on 22 January 2016 to reduce the Statutory Reserve Requirement (SRR) from 4% to 3.5% effective from 1 February In July 2016, Bank Negara Malaysia (BNM) cut its Overnight Policy Rate (OPR) by 25 basis points to 3.00% from 3.25%. The OPR was reduced in light of the rising risks from Britain s withdrawal from the EU and due to the uncertainties in the global environment, which could negatively impact Malaysia s growth prospects. For the rest of the year, BNM maintained its OPR at 3.00% to ensure that the domestic economy continues on a steady growth path amid stable inflation, supported by continued healthy financial intermediation in the economy. During the year, ringgit was extremely volatile, depreciated by 4.3% against the US Dollar driven mainly by portfolio investment outflows from emerging economies amid uncertainties arising from the outcome of the US Presidential Elections. Expectations of an interest rate increase, the actual increase in the US Federal Reserve s policy rate in December 2016, and the anticipation of a faster pace of US interest rate normalisation in 2017, exacerbated portfolio outflows and exerted further downward pressure on most major and regional currencies. The ringgit also faced additional adjustments in the final quarter following speculative activity in the nondeliverable forward (NDF) market. The ringgit, along with regional currencies, however, began to stabilise towards the end of the year amidst higher stability in the global financial markets. The implementation of SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 7

8 measures to develop, deepen, and address the rising imbalances in the domestic foreign exchange market, and the firmer global crude oil prices, also lent stability to the domestic foreign exchange market towards the end of the year. Arising from challenges in the global and domestic market, Malaysia s annual real GDP recorded a slower growth for the second year to +4.2% in 2016 from +5.0% in 2015 and +6.0% on 2014 which is in line with BNM and government s projection of 4% to 4.5% growth for the year. SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 8

9 EQUITY AND FIXED INCOME MARKET REVIEW Equity Market The Equity Market started the year under selling pressure amidst global uncertainties. Concern over weakening China economy, and crude oil prices hitting multiyear low that could negatively impact the market had resulted in central bankers stepping in with interest rate cuts and stimulus packages. FBM KLCI managed to bounce out of the year s low of 1,601 points after foreign funds turned net buyer with a net inflow of RM4.4b in 1Q 2016, hitting the year high of 1,728 points in mid-april. The ringgit also continued to strengthen against the USD despite moderating crude oil prices to close the quarter at RM3.93 to the dollar. Unfortunately, the good start to the year was hampered by the reduction of Malaysia`s country weight by MSCI and the unexpected Brexit referendum outcome. The impact, however, was mitigated by a slew of favourable news on macroeconomic numbers; BNM s interest rate cut and Fitch`s reaffirmed Malaysia s A- rating. However, the weakening of the emerging market economy and the unexpected outcome of Trump winning the US Presidential election further dampened market sentiment as ringgit suffered significant depreciation and FBM KLCI turned sideways, closing the year at a -3.0% loss, y-o-y at 1, The benchmark index, FBM Emas Syariah Index (FBMS) also closed the year lower at 12,014.42, fell by -6.14% y-o-y. Post Trump s presidency to end of 2016, foreign portfolio investors sold an estimated >RM20b of Malaysian bonds/sukuk and >RM4.3b of Malaysian equities (to end 2016 at a net sell position of RM3.0b). Source: Bloomberg, Maybank. In the US, the Dow Jones Industrial Average closed out the year 2016 at 19, with a gain of 13.4% y-o-y. The S&P 500 closed out the year at 2,238.83, up 9.5% from the 2, close of The NASDAQ closed at 5, for a gain of just 7.5% from the 5, close at the end of SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 9

10 Fixed Income Market The sentiment in the US Treasury market shifted dramatically in November 2016 with Donald Trump s victory in the US presidential election. The benchmark 10-year UST yield spiked to a peak of 2.60% in December from a historical low of 1.36% recorded in July. The shift in sentiment reflects mounting concerns over Trump s proposed policies that would stimulate growth and generate higher inflationary pressure, as well as a more hawkish stance of the US Federal Reserve. In Europe, the bond rally seen in the first half of 2016 also reversed in the later part of the year as the European Central Bank was initially reluctant to extend its Quantitative Easing programme in July. Although the ECB emphasized that its actions should not be regarded as equivalent to the US tapering, it failed to remove market concerns about the curtailment of the QE. Locally, the Malaysian bond/sukuk market ended 2016 on a negative note with benchmark yields rising between 3 basis points to 27 basis points from 2015 across all maturities due to the negative sentiment in the US bond market which led to the weakening of ringgit. Donald Trump s surprise victory in the US general election triggered a global bond rout that caused massive capital outflows, especially from Emerging Markets. As a result, yield curves of both local government and corporate bonds/sukuk have steepened sharply. However, the recovery in crude oil prices in recent months has helped to limit the losses. In terms of issuance, the Malaysian government raised a total of RM86.0 billion in 2016, lower than RM92.5 billion in the previous year. The lower total issuance partly reflects the absence of Sukuk Perumahan Kerajaan issuances which averaged around RM 5.0 billion per year since Overall, government bonds/sukuk in the primary market continued to attract strong bidding interest in 2016 despite steepening yields supported by bargain hunting activities from local institutional funds despite declining foreign holdings. However by November, foreign investors liquidated their holdings amid Trump s surprise victory and growing expectations of a more aggressive rate hike by the Fed in As a result, foreign ownership of Malaysian Government Securities (MGS) reduced to 48.4% of total outstanding in November from 2016 s high of 51.9% in October. In the corporate debt market, a total gross issuance of RM84.8 billion was recorded in 2016, slightly lower than RM85.0 billion recorded in Ongoing concerns on the US rate hikes, volatile crude oil prices and the relatively weak ringgit in 2016 underpinned the challenges faced by corporates in issuing rated bonds/sukuk. Money Market With regards to the Islamic money market, Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) at 3.00% at the last MPC meeting for the year in November 2016, notwithstanding the outcome of the US election. For the year, BNM has cut 25 basis points from 3.25%, first cut since July With the reduction in the OPR, the 1-month Maybank General Investment Account (GIA-i) Rate was revised down by 45 bps from 4.0% to 3.55% in SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 10

11 MARKET OUTLOOK AND INVESTMENT STRATEGY Market Outlook The International Monetary Fund (IMF), in the January 2017 issue of the World Economic Outlook (WEO), maintained its forecast for global growth in 2017 at 3.4% and expansion for 2018 is forecasted at 3.6%, both unchanged from the previous forecast in October The IMF is taking a cautious stance toward the policies of US President-elect Donald Trump, who took office on 20 Jan 2017, assuming only a modest boost to the U.S. economy from his promise of fiscal stimulus. The US economy will expand by 2.3% in 2017 before firming to a 2.5% rate in 2018 (moderate increase forecast by only 0.1% for 2017 and 0.4% for 2018). The impact of a Trump administration is one of the biggest unknown facing the global economy. While Trump has promised to cut taxes and boost infrastructure spending, he has also threatened to impose tariffs on trade partners such as China and Mexico. Such punitive measures may sap growth if they provoke retaliation. Trump s policy priorities should become clearer after his inauguration. During the 2017 Budget session in October 2016, Malaysia s 2017 GDP was forecasted at %. IMF projected Malaysia's real GDP to increase to around 4.5% in IMF is of the view that in 2017, private consumption growth should remain strong, supported by labour market strength and fiscal measures. Lower commodity prices have impacted business sentiment, moderating private investment growth. The current account surplus is projected to be largely unchanged. External risks include structurally weak growth in advanced and emerging market economies. Although the Malaysian economy have adjusted well to the lower global oil prices and sustained low commodity prices, they add to the challenges of fiscal consolidation. Heightened global financial stress could potentially spill over to domestic markets. Domestic risks are primarily related to elevated public sector and household debt. Although its ratio to GDP is likely to decline, household debt remains relatively high. Risks of a severe downturn in the financial cycle appear to be low, mainly due to a resilient banking system and Bank Negara Malaysia's prudential policies and oversight. Over in China, although China s economy is able to meet its GDP growth target of 6.7% due to its robust monetary and fiscal stimulus, policymakers are bracing headwinds as possible trade war could come from the US presidency of Donald Trump. Aside from the trade war, the main threat to China s economy is continued reliance on debt-fuelled investment to drive growth. Lower exports could force policymakers to rely even more heavily on debt to defend its growth target. In summary, we think that downside risks for domestic market for 2017 is expected to be limited and well supported mainly by the following: (1) Recovery in the commodity sector: (2) recovery in crude oil prices after the Brent crude oil hit a low of USD27, then later closed the year higher at USD56.82; and (iii) recovery in CPO production when the impact of El Nino fades in 2016, CPO production declined by 13% y-o-y, shaving approximately 0.4% from GDP growth. In addition, market support will also come from the robust infrastructure and construction contract flows in 2016, domestic contract awards at record high of RM56.4bn (2015: RM22bn) which will start to translate into actual construction value added in We also expect a recovery in corporate earnings in 2017 after three years of a negative growth. Politics remain a key risk event to our view for 2017: (i) US President Trump s policies will be closely watched, mainly policy promises on issues like trade, immigration, taxes, spending, business and bank regulations, and foreign relations; (ii) major central banks monetary policies which is dominated by the US Fed increases the pace of interest rate hikes with FX impact in terms of stronger USD against major and regional currencies; (iii) key political events in Europe to contend with, amid the rising tide of inward-looking nationalism and populism, deglobalisation and protectionism e.g. the start of UK-EU talks on Brexit (Article 50 to be invoked in 1Q2017, triggering minimum two year exit process) and elections in Italy, Holland, France, UK and Germany; (iv) the shift in China s policy focus from growth-stability to financial-stability to address the risk of excessive leveraging; and (v) stimulus to domestic demand via infrastructure spending in ASEAN as well as the broadening, deepening and strengthening of ASEAN integration with China in the background. SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 11

12 As for the rates market, OPR is forecasted to be maintained at 3.00% throughout This is due to the limited room for monetary easing given the recent significant depreciation in the ringgit against the USD, prospects of further outflows of capital due to the continuing bond/sukuk market corrections and concerns over the high household debt level. Bond/sukuk yields, for both government and corporate, is expected to trend higher compared to 2016 as investors remain cautious on concerns over the prospects of ringgit in view of the strengthening USD. Furthermore, the local bond/sukuk market is more susceptible to selling pressures given the high proportion of foreign holdings of MGS. This is further exacerbated by expectations of Trump's fiscal expansionary plan and the likelihood of more aggressive rate hikes by the US Fed. In terms of credit, the trend of higher downgrades compared to upgrades seen in 2016 may prevail in 2017 in view of the challenging business environment. As for new issuances, the prospect of higher funding costs may result in lower financing activities by corporates thus lowering new supply of bonds/sukuk. Investment Strategy As such, we remain prudent and vigilant in our investment strategy; continue to focus on stocks with good fundamentals, stable historical income, strong management team, long-term earnings visibility and solid balance sheet. We prefer stocks that are defensive in nature, to protect the capital from any potential downside risks while meeting the long-term objective of the funds. For 2017, direction for domestic equity markets would remain cautious and be determined by the development of US President Trump s administration and the pace of US interest rate hikes. However, we think FBM KLCI will perform relatively better in 2017 compared to 2016 driven by recovery in corporate earnings and returning of foreign flows. Corporate earnings recovery will be supported by recovery in commodity prices, stabilized ringgit and increased activity from infrastructure and construction contract flows in We remain cautiously optimistic going into 2017 as we: (i) continue to overweigh on Construction sectors as we expect an increased activity from contracts announcements FY2016 and a continued strong flow of contract announcements in FY2017; (ii) position the portfolio into FY2017 themes which include Consumer and Technology related counters which should benefit from resilient private consumption and accommodative foreign exchange; and (iii) advocate defensive stance in stocks with earnings certainty and domestic oriented catalysts. For certain funds which have exposure to investment in fixed income, the focus will be on corporate sukuk within AAA and AA segments to maintain the portfolio healthy credit profile as well as for better liquidity. Short to medium term papers are preferred at this juncture with expectation of yields to move higher in SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 12

13 Return % FUND PERFORMANCE REPORT ITTIZAN Performance Review For the 12 months ended 31 December 2016, Ittizan recorded an outperformance of 161bps above its benchmark (70% FBMSI and 30% 1-Month GIA) which recorded a loss of -3.15% during the period under review. 2.0 Ittizan vs Benchmark Ittizan Benchmark 0.0 (2.0) (4.0) (6.0) Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year Ittizan Benchmark Asset Allocation In terms of asset allocation, the fund has invested 68.49% in equity, 23.58% in Sukuk and the remaining in money market / cash. On equity sectoral allocation, trading & services was the top sector that the fund invested in with 28.07% exposure. The details of asset allocation and the top 5 investment holdings are given below: % 23.58% 12.59% 9.90% 7.52% 2.95% Trading/Services Sukuk Plantation Industrial Products Construction Technology SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 13

14 Money Market & Cash 7.93% Top 5 Investment Holding Tenaga Nasional Bhd 6.14% Sukuk 23.58% Sime Darby Berhad Genting Plantations Bhd 4.63% 4.12% Equities 68.49% Petronas Chemicals Group Bhd Axiata Group Berhad 3.24% 2.94% 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 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 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 14

15 Return % FUND PERFORMANCE REPORT ISTIQRAR Performance Review For the 12 months ended 31 December 2016, Istiqrar has outperformed its benchmark, recording a return of 1.24% against its benchmark of 0.84% (30% FBMSI and 70% 1-Month GIA) Istiqrar vs Benchmark Istiqrar Benchmark (0.5) (1.0) (1.5) Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year Istiqrar Benchmark Asset Allocation In terms of asset allocation, the fund has invested 24.33% in equity, 60.19% in Sukuk and the remaining 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 has invested in with 10.00% exposure. The details of asset allocation and the top 5 investment holdings are given below: % 10.00% 4.12% 3.30% 2.77% 1.38% Sukuk Trading/Services Plantation Industrial Products Construction Technology SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 15

16 Money Market & Cash 15.48% Top 5 Investment Holding Jimah Energy Ventures Sdn Bhd 5.04% Equities 24.33% Ranhill Powertron II Sdn Bhd CIMB Islamic Bank Berhad 5.03% 5.02% Sukuk 60.19% Sarawak Energy Berhad National Bank Of Abu Dhabi 4.97% 4.99% 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 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 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 16

17 Return % FUND PERFORMANCE REPORT myequity INDEX FUND Performance Review For the period under review, myequity Index Fund, has outperformed its benchmark, i.e FBMSI by 51 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 (1.0) (2.0) (3.0) (4.0) (5.0) (6.0) (7.0) (8.0) myequity Index Fund vs Benchmark myequity Index Fund (LHS) Benchmark (LHS) Tracking Error (RHS) Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year myequity Index Benchmark Tracking Error 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 92.0% in equity and the remaining in money market / cash. On equity sectoral allocation, trading & services was the top sector the fund has invested in, which is in line with the Bursa Malaysia FBMSI index component allocation. The details of asset allocation and the top 5 investment holdings are given below: % 13.63% 8.85% 5.85% 5.23% 4.45% Trading/Services Industrial Products Plantation Construction Infrastructure Project Company Consumer SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 17

18 Top 5 Investment Holding Money Market & Cash 8.00% Tenaga Nasional Bhd Sime Darby Berhad 7.30% 12.84% Axiata Group Berhad 5.54% Equities 92.00% Petronas Chemicals Group Bhd Digi.Com Bhd 5.30% 4.63% 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 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 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 18

19 Return (%) FUND PERFORMANCE REPORT mygrowth FUND Performance Review For the financial year ended 31 December 2016, mygrowth Fund recorded an outperformance by 316 bps as compared to its benchmark, FBMSI which recorded a loss of -6.14% during the same period under review mygrowth Fund vs Benchmark mygrowth Fund Benchmark Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year mygrowth Benchmark Asset Allocation In terms of asset allocation, the fund has invested 72.34% in equity and the remaining is in money market / cash. On equity sectoral allocation, trading & services was the top sector the fund has invested in with 34.81% exposure. The details of asset allocation and the top 5 investment holdings are given below: % 11.59% 10.96% 7.88% 3.14% 2.08% Trading/Services Industrial Products Plantation Construction Infrastructure Project Co. Technology SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 19

20 Top 5 Investment Holding Money Market & Cash 27.66% Tenaga Nasional Bhd Sime Darby Berhad 6.91% 6.18% Petronas Chemicals Group Bhd 4.60% Equities 72.34% Axiata Group Berhad 4.39% Petronas Gas Bhd 4.05% 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 mygrowth Fund for the period ended 31 December 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 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 20

21 Return (%) FUND PERFORMANCE REPORT myblue CHIPS FUND Performance Review For the period under review, mybluechips Fund has outperformed the return of its benchmark, FBMSI of -6.14% by 295bps as detailed out below myblue Chips Fund vs Benchmark myblue Chips Fund Benchmark Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year myblue Chips Benchmark Asset Allocation In terms of asset allocation, the fund has invested 75.49% in equity and the remaining in money market / cash. On equity sectoral allocation, trading and services was the top sector the fund has 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 given below: % 11.79% 11.51% 8.27% 3.20% 2.30% Trading/Services Industrial Products Plantation Construction Infrastructure Project Company Technology SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 21

22 Top 5 Investment Holding Money Market & Cash 24.51% Tenaga Nasional Bhd Sime Darby Berhad 7.39% 6.37% Petronas Chemicals Group Bhd 4.60% Equities 75.49% Axiata Group Berhad 4.53% Petronas Gas Bhd 4.13% 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 myblue Chips Fund for the period ended 31 December 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 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 22

23 Return (%) FUND PERFORMANCE REPORT mydividend FUND Performance Review For the 12 months ending 31 December 2016, The fund which focuses on high dividend yielding stocks was the best performer for the period under review, outperforming the performance of its benchmark, FBMSI f -6.14% by 324 bps mydividend Fund vs Benchmark mydividend Fund Benchmark Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year mydividend Benchmark Asset Allocation In terms of asset allocation, the fund has invested 70.90% 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 34.32% allocation. The details of asset allocation and the top 5 investment holdings are shown below: % 11.45% 10.48% 7.64% 2.94% 2.03% Trading/Services Industrial Products Plantation Construction Infrastructure Project Company Technology SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 23

24 Top 5 Investment Holding Money Market & Cash 29.10% Tenaga Nasional Bhd Sime Darby Berhad 6.89% 6.14% Petronas Chemicals Group Bhd 4.40% Equities 70.90% Axiata Group Berhad 4.29% Petronas Gas Bhd 4.00% 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 mydividend Fund for the period ended 31 December 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 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 24

25 Retrun (%) FUND PERFORMANCE REPORT mybalanced FUND Performance Review For the financial year ended 31 December 2016, mybalanced Fund recorded a positive return of 2.45% outperforming significantly of its blended benchmark of 40% FBMSI and 60% 12-Month Maybank GIA rate which recorded a loss of % mybalanced Fund vs Benchmark mybalanced Fund Benchmark Total Return (%) Average Annual Return (%) 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year mybalanced Benchmark Asset Allocation As at 31 December 2016, the majority of the fund s asset allocation is towards Sukuk in line with its stated asset allocation mandate to invest up to 60% in Sukuk. The fund had invested 50.13% in Sukuk and remaining in equity (10.76%) and money market/cash (39.12%). The details of asset allocation and the top 5 investment holdings are given below: % 4.98% 1.82% 1.48% 1.27% 0.40% Sukuk Trading/Services Plantation Industrial Products Construction Infrastructure Project Company SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 25

26 Top 5 Investment Holding Sukuk 50.13% Jimah East Power Sdn Bhd 4.83% Equities 10.76% Bank Islam Malaysia Berhad Malakoff Power Berhad 4.61% 4.37% Money Market & Cash 39.12% Cerah Sama Sdn Bhd Sarawak Energy Berhad 4.13% 4.02% 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 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 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 26

27 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. SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 27

28 STATEMENT BY DIRECTORS In the opinion of the Manager, the Takaful Investment-Linked Funds ( Funds ) financial statements set out on pages 31 to 41, comprising the Statements of Assets and Liabilities as at 31 December 2016 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 2016 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 2016 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: Tan Sri Dato' Ahmad Fuzi Haji Abdul Razak Dato Sri Mohamed Hassan Kamil Kuala Lumpur, Date: 25 April 2017 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 28

29 INDEPENDENT AUDITOR S REPORT to the unitholders of Syarikat Takaful Malaysia Berhad s Investment-Linked funds (Company No K) (Incorporated in Malaysia) Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Investment-Linked Funds of Syarikat Takaful Malaysia Berhad, which comprise the Statements of Assets and Liabilities as at 31 December 2016, the Statements of Income and Expenditure, the Statements of Changes in Net Asset Value and Cash Flow Statements for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 31 to 41. In our opinion, the accompanying financial statements for the year ended 31 December 2016 are prepared, in all material respects, in accordance with the accounting policies set out in Note 1 to the financial statements and the Guidelines on Investment-Linked Insurance/Takaful Business (BNM/RH/GL ). 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 Statements section of our auditors report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and Other Ethical Responsibilities We are independent of the Investment-Linked Funds in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants ( By-Laws ) and the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants ( IESBA Code ), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Information Other than the Financial Statements and Auditors Report Thereon The Directors of the Manager are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements of the Investment-Linked Funds and our auditors report thereon. Our opinion on the financial statements of the Investment-Linked Funds does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Investment-Linked Funds, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Investment-Linked Funds or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Statements The Directors of the Manager are responsible for the preparation of the financial statements in accordance with the accounting policies set out in Note 1 to the financial statements and the Guidelines on Investment-Linked Insurance/Takaful Business (BNM/RH/GL ). The Directors are also responsible 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. SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 29

30 In preparing the financial statements of the Investment-Linked Funds, the Directors are responsible for assessing the ability of the Investment-Linked Funds to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Investment-Linked Funds or to cease operations, or have no realistic alternative but to do so. Auditors Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements 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 statements. 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: Identify and assess the risks of material misstatement of the financial statements, 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. 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 internal control of the Investment-Linked Funds. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. Conclude on the appropriateness of the Directors 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 ability of the Investment-Linked Funds 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 statements of the Investment-Linked Funds 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 Investment-Linked Funds to cease to continue as a going concern. We communicate with the Directors 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. Other Matter This report is made solely to the unitholders of Investment-Linked Funds of Syarikat Takaful Malaysia Berhad, as a body, and for no other purpose. We do not assume responsibility to any other person for the content of this report. KPMG Desa Megat PLT (LLP LCA & AF 0759) Chartered Accountants 25 April 2017 Petaling Jaya SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 30

31 STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2016 ASSETS ITTIZAN ISTIQRAR myequity INDEX mygrowth myblue CHIPS mydividend mybalanced Note RM RM RM RM RM RM RM Sukuk 2 2,536,249 4,940, ,114,847 Quoted Shares 3 7,349,284 1,997,098 22,735,993 6,195,199 5,924,819 6,753,300 2,384,919 Other Assets 94, ,342 2,104, , , , ,956 Deposits with Financial Institutions Cash and Cash Equivalents 908,000 1,268,000 1,851,000 2,347,000 1,928,000 2,726,000 8,900,000 14, ,658 13,106 12,717 14,445 5,357 10,901,732 8,324,213 26,763,327 8,891,531 8,102,153 9,891,457 22,889,079 LIABILITIES Other Liabilities 161, ,371 2,049, , , , , , ,371 2,049, , , , ,201 Net Asset Value 10,740,005 8,207,842 24,713,653 8,564,487 7,848,172 9,525,116 22,172,878 REPRESENTED BY Certificate Holders Capital Accumulated Income Carried Forward 6,308,882 6,415,176 22,573,904 7,610,576 6,827,050 8,190,991 21,261,047 4,431,123 1,792,666 2,139, ,911 1,021,122 1,334, ,831 10,740,005 8,207,842 24,713,653 8,564,487 7,848,172 9,525,116 22,172,878 Number of Units 5,936,535 5,705,443 14,990,982 6,559,814 5,912,014 6,706,536 18,120,077 Net Asset Value Per Unit SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 31

32 STATEMENTS OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2015 ASSETS myequity myblue ITTIZAN ISTIQRAR INDEX mygrowth CHIPS mydividend mybalanced Note RM RM RM RM RM RM RM Sukuk 2 6,777,813 6,465, ,221,538 Quoted Shares 3 15,955,871 4,209,938 19,815,285 6,314,985 6,059,601 6,825,571 2,837,276 Other Assets 287, ,253 1,909, , , , ,678 Deposits with Financial Institutions Cash and Cash Equivalents 220,000 1,675,000 1,411,000 1,225,000 1,075,000 1,409,000 1,522, ,825 1, ,241,764 12,564,445 23,137,122 8,332,547 7,792,506 9,113,057 7,903,869 LIABILITIES Other Liabilities 264, ,353 1,937, , , , , , ,353 1,937, , , , ,186 Net Asset Value 22,977,064 12,410,092 21,199,201 8,003,942 7,547,029 8,791,957 7,656,683 REPRESENTED BY Certificate Holders Capital Accumulated Income Carried Forward 8,118,248 7,204,122 17,878,243 6,753,929 6,233,421 7,139,196 6,899,707 14,858,816 5,205,970 3,320,958 1,250,013 1,313,608 1,652, ,976 22,977,064 12,410,092 21,199,201 8,003,942 7,547,029 8,791,957 7,656,683 Number of Units 12,248,713 8,611,777 12,187,734 5,912,989 5,471,230 5,975,763 6,352,300 Net Asset Value Per Unit SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 32

33 STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2016 Income ITTIZAN ISTIQRAR myequity INDEX mygrowth myblue CHIPS mydividend mybalanced RM RM RM RM RM RM RM Gross Dividend Income 367,198 97, , , , ,792 69,153 Profit Income: Sukuk 308, , ,443 Islamic Investment Deposits with Financial 25,736 48,690 53,471 62,052 52,951 72, ,637 Institutions Profit on Disposal: Quoted Shares ,462 Other Income 55,833 15, ,697 22,923 22,470 24,344 11, , , , , , , ,555 Outgo Fees (285,682) (167,916) (335,874) (114,644) (107,279) (126,037) (142,882) Loss on Disposal: Quoted Shares (145,843) (21,469) (78,167) (142,063) (135,346) (162,037) - Sukuk (69,940) (43,660) Unrealised Capital Loss (697,918) (194,441) (1,433,706) (286,538) (280,873) (304,298) (148,255) Other Outgo (43,520) (35,507) (46,884) (10,309) (9,487) (10,839) (39,563) (1,242,903) (462,993) (1,894,631) (553,554) (532,985) (603,211) (330,700) Excess of (Outgo over Income) / Income over Outgo Undistributed Income brought forward Amount Paid for units cancelled Amount Available for Distribution Undistributed Income carried forward (486,111) 24,253 (1,181,209) (296,102) (292,486) (318,636) 154,855 14,858,816 5,205,970 3,320,958 1,250,013 1,313,608 1,652, ,976 (9,941,582) (3,437,557) ,431,123 1,792,666 2,139, ,911 1,021,122 1,334, ,831 4,431,123 1,792,666 2,139, ,911 1,021,122 1,334, ,831 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 33

34 STATEMENTS OF INCOME AND EXPENDITURE FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2015 Income ITTIZAN ISTIQRAR myequity INDEX mygrowth myblue CHIPS mydividend mybalanced RM RM RM RM RM RM RM Gross Dividend Income 420, , , , , ,364 73,093 Profit Income: Sukuk 322, , ,885 Islamic Investment Deposits with Financial 100,436 73,129 67,943 36,705 35,711 37,770 67,372 Institutions Profit on Disposal: Quoted Shares - 34,888 2, Unrealised Capital Gain , Outgo 843, , , , , , ,350 Fees (347,281) (185,972) (263,314) (107,059) (102,838) (115,060) (86,816) Loss on Disposal: Quoted Shares (95,253) - - (134,349) (80,443) (88,777) (5,851) Sukuk (5,225) (18,967) (14,128) Unrealised Capital Loss (311,480) (141,728) (78,294) - (22,000) (89,754) (53,653) Other Outgo (40,623) (37,492) (45,873) (13,482) (13,517) (10,068) (21,118) (799,862) (384,159) (387,481) (254,890) (218,798) (303,659) (181,566) Excess of (Outgo over Income) / Income over Outgo Undistributed Income brought forward Amount Available for Distribution Undistributed Income carried forward 43, , ,655 (5,250) 40 (52,525) 111,784 14,814,830 5,014,038 3,118,303 1,255,263 1,313,568 1,705, ,192 14,858,816 5,205,970 3,320,958 1,250,013 1,313,608 1,652, ,976 14,858,816 5,205,970 3,320,958 1,250,013 1,313,608 1,652, ,976 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 34

35 STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2016 ITTIZAN ISTIQRAR myequity INDEX mygrowth myblue CHIPS mydividend mybalanced RM RM RM RM RM RM RM Net Asset Value at the Beginning of the Financial Year Amount Received from Units Created Amount Paid for Units Cancelled 22,977,064 12,410,092 21,199,201 8,003,942 7,547,029 8,791,957 7,656, , ,780 10,235,979 2,989,865 2,527,125 3,028,068 16,831,792 (12,135,560) (4,392,283) (5,540,318) (2,133,218) (1,933,496) (1,976,273) (2,470,452) Net (Outgo) / Income (486,111) 24,253 (1,181,209) (296,102) (292,486) (318,636) 154,855 Net Asset Value at the End of Financial Year 10,740,005 8,207,842 24,713,653 8,564,487 7,848,172 9,525,116 22,172,878 STATEMENTS OF CHANGES IN NET ASSET VALUE FOR FINANCIAL YEAR ENDED 31 DECEMBER 2015 ITTIZAN ISTIQRAR myequity INDEX mygrowth myblue CHIPS mydividend mybalanced RM RM RM RM RM RM RM Net Asset Value at the Beginning of the Financial Year Amount Received from Units Created Amount Paid for Units Cancelled 23,385,210 12,400,830 15,781,182 7,013,066 6,832,540 7,461,149 6,725, , ,579 6,239,508 1,299,051 1,037,834 1,666,368 1,133,267 (1,037,591) (424,249) (1,024,144) (302,925) (323,385) (283,035) (314,139) Net Income / (Outgo) 43, , ,655 (5,250) 40 (52,525) 111,784 Net Asset Value at the End of Financial Year 22,977,064 12,410,092 21,199,201 8,003,942 7,547,029 8,791,957 7,656,683 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 35

36 CASH FLOW STATEMENT FOR FINANCIAL YEAR ENDED 31 DECEMBER 2016 ITTIZAN ISTIQRAR myequity INDEX mygrowth myblue CHIPS mydividend mybalanced 2016 RM RM RM RM RM RM RM Cash Flow from Operating Activities (Outgo) / Income Before Taxation (486,111) 24,253 (1,181,209) (296,102) (292,486) (318,636) 154,855 Adjustment for: Profit Income (333,761) (373,875) (53,471) (62,052) (52,951) (72,439) (372,080) Gross Dividend Income (367,198) (97,816) (545,254) (172,477) (165,078) (187,792) (69,153) Loss/(Profit) on Disposal 215,783 65,129 78, , , ,037 (32,462) Unrealised Capital Loss 697, ,441 1,433, , , , ,255 Outgo from Operations Before Changes in Operating Assets and (273,369) (187,868) (268,061) (102,030) (94,296) (112,532) (170,585) Liabilities Proceeds from Disposal of Investment 12,575,023 3,955, ,769 (50,179) 153,661 (172,989) 627,453 Purchase of Investment (1,328,573) (69,588) (5,833,350) (1,380,636) (1,288,098) (1,538,075) (15,562,198) Decrease / (Increase) in Other Assets 193,491 86,911 (195,115) 455, , ,195 (161,278) (Decrease) / Increase in Other Liabilities (102,973) (37,982) 111,753 (1,561) 8,504 45, ,015 Cash generated from / (used in) Operations 11,063,599 3,746,701 (5,224,004) (1,078,839) (799,179) (1,298,160) (14,797,593) Profit Income Received 333, ,875 53,471 62,052 52,951 72, ,080 Gross Dividend Income Received 367,198 97, , , , ,792 69,153 Net Cash generated from / (used in) Operating 11,764,558 4,218,392 (4,625,279) (844,310) (581,150) (1,037,929) (14,356,360) Activities Cash Flow from Financing Activities Proceeds from Creations of Units 384, ,780 10,235,979 2,989,865 2,527,125 3,028,068 16,831,792 Payment for Cancellation of Units (12,135,560) (4,392,283) (5,540,318) (2,133,218) (1,933,496) (1,976,273) (2,470,452) Net Cash (used in) / generated from (11,750,948) (4,226,503) 4,695, , ,629 1,051,795 14,361,340 Financing Activities Net Increase / (Decrease) in Cash and Cash 13,610 (8,111) 70,382 12,337 12,479 13,866 4,980 Equivalents Cash and Cash Equivalents at ,825 1, January 2016 Cash and Cash Equivalents at 31 December , ,658 13,106 12,717 14,445 5,357 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 36

37 CASH FLOW STATEMENT FOR FINANCIAL YEAR ENDED 31 DECEMBER 2015 ITTIZAN ISTIQRAR myequity INDEX mygrowth myblue CHIPS mydividend mybalanced 2015 RM RM RM RM RM RM RM Cash Flow from Operating Activities Income / (Outgo) Before Taxation 43, , ,655 (5,250) 40 (52,525) 111,784 Adjustment For: Profit Income (423,194) (423,478) (67,943) (36,705) (35,711) (37,770) (220,257) Gross Dividend Income (420,654) (117,725) (520,017) (193,496) (183,127) (213,364) (73,093) Loss/(Profit) on Disposal 100,478 (15,921) (2,176) 134,349 80,443 88,777 19,979 Unrealised Capital Loss 311, ,728 78,294 (19,439) 22,000 89,754 53,653 Outgo from Operations Before Changes in Operating Assets and (387,904) (223,464) (309,187) (120,541) (116,355) (125,128) (107,934) Liabilities Proceeds from Disposal of Investment 15,021,987 4,427,425 12,818,358 5,895,164 5,593,505 5,548,387 2,514,607 Purchase of Investment (14,844,993) (4,462,275) (18,309,054) (6,495,893) (5,952,140) (6,444,906) (3,561,906) Increase in Other Assets (34,417) (46,726) (896,299) (509,404) (420,453) (582,604) (77) (Decrease) / Increase in Other Liabilities (154,057) (47,516) 889,298 4,811 (40,341) (31,027) 41,512 Cash used in Operations (399,384) (352,556) (5,806,884) (1,225,863) (935,784) (1,635,278) (1,113,798) Profit Income Received 423, ,478 67,943 36,705 35,711 37, ,257 Gross Dividend Income Received Net Cash generated from / (used In) Operating Activities Cash Flow from Financing Activities Proceeds from Creations of Units Payment for Cancellation of Units Net Cash (used in) / generated from Financing Activities Net Increase / (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at 1 January 2015 Cash and Cash Equivalents at 31 December , , , , , ,364 73, , ,647 (5,218,924) (995,662) (716,946) (1,384,144) (820,448) 585, ,579 6,239,508 1,299,051 1,037,834 1,666,368 1,133,267 (1,037,591) (424,249) (1,024,144) (302,925) (323,385) (283,035) (314,139) (452,132) (182,670) 5,215, , ,449 1,383, ,128 (7,668) 5,977 (3,560) 464 (2,497) (811) (1,320) 8,231 2,848 4, ,735 1,390 1, ,825 1, SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 37

38 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 Kuala Lumpur The Manager 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 25 April 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. Sukuk 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 recognized 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 recognized upon surrendering of/withdrawal from the related takaful certificates. SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 38

39 (g) Income Recognition Dividend income is recognized when the right to receive payment is established. Income is recognized 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. (h) Investment management fees Investment management fees are calculated in accordance with the provisions of the certificate document. 2. Sukuk (i) Ittizan 31 December 2016 RM 31 December 2015 RM Cost 2,611,696 6,962,996 Unrealised capital loss (75,447) (185,183) Market value 2,536,249 6,777,813 (ii) Istiqrar Cost 5,093,092 6,653,962 Unrealised capital loss (153,033) (188,533) Market value 4,940,059 6,465,429 (iii) mybalanced Cost 11,159,380 3,306,301 Unrealised capital loss (44,533) (84,763) Market value 11,114,847 3,221, Quoted shares (i) Ittizan 31 December 2016 RM 31 December 2015 RM Cost 7,968,272 15,767,205 Unrealised capital (loss) / gain (618,988) 188,666 Market value 7,349,284 15,955,871 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 39

40 (ii) Istiqrar 31 December 2016 RM 31 December 2015 RM Cost 2,149,182 4,132,081 Unrealised capital (loss) / gain (152,084) 77,857 Market value 1,997,098 4,209,938 (iii) myequity Index Cost 23,884,855 19,530,441 Unrealised capital (loss) / gain (1,148,862) 284,844 Market value 22,735,993 19,815,285 (iv) mygrowth Cost 6,473,022 6,306,270 Unrealised capital (loss) / gain (277,823) 8,715 Market value 6,195,199 6,314,985 (v) myblue Chips Cost 6,169,648 6,023,557 Unrealised capital (loss) / gain (244,829) 36,044 Market value 5,924,819 6,059,601 (vi) mydividend Cost 7,034,595 6,802,568 Unrealised capital (loss) / gain (281,295) 23,003 Market value 6,753,300 6,825,571 (vii) mybalanced Cost 2,573,898 2,837,770 Unrealised capital loss (188,979) (494) Market value 2,384,919 2,837, 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. SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 40

41 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 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/sukuk prices fall and vice versa. The market 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 Islamic Financial Institution (IFI) are declared impermissible. Any profit sourced from shariah non compliance activities 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 and 3. The basis of deriving the fair values is disclosed in Note 1(c). SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 41

42 DETAILS OF INVESTMENTS ITTIZAN Security Name Number of Units Total Cost Market Value % of NAV Construction Gamuda Bhd 47, , , % IJM Corporation Bhd 69, , , % Ho Hup Construction Company Bhd 122, , , % Hock Seng Lee Bhd 86, , , % Muhibbah Engineering(M) Bhd 56, , , % Consumer PPB Group Bhd 10, , , % QL Resources Berhad 19,000 81,600 82, % Industrial Products Cahya Mata Sarawak Berhad 60, , , % Kossan Rubber Industries Berhad 11,000 74,853 72, % Petronas Chemicals Group Bhd 50, , , % Petronas Gas Bhd 13, , , % Top Glove Corporation Bhd 20, , , % Infrastructure Project Company Digi.Com Bhd 51, , , % Plantation Genting Plantations Bhd 41, , , % IJM Plantations Bhd 80, , , % IOI Corporation Berhad 44, , , % Sarawak Oil Palms Bhd 67, , , % Kuala Lumpur Kepong Bhd 8, , , % Property SP Setia Berhad 47, , , % Sunway Berhad 48, , , % Technology Globetronics Technology Bhd 31, , , % Inari Amertron Bhd 63, , , % Trading/Services Axiata Group Berhad 66, , , % Bermaz Auto Berhad 93, , , % Dialog Group Bhd 86, , , % E.A. Technique(M) Berhad 123, ,258 76, % IHH Healthcare Berhad 42, , , % Malakoff Corporation Bhd 93, , , % MMC Corporation Bhd 115, , , % Sime Darby Berhad 61, , , % Sapurakencana Petroleum Berhad 73, , , % Telekom Malaysia Bhd 32, , , % Tenaga Nasional Bhd 47, , , % Westports Holdings Berhad 37, , , % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 42

43 Real Estate Investment Trust Axis Real Estate Investment Trust % Total Malaysian Equities 1,934,870 7,968,272 7,349, % Malaysian Sukuk Kapar Energy Ventures Sdn Bhd 200, , , % BGSM Management Sdn Bhd 239, , , % Senari Synergy Sdn Bhd 250, , , % CIMB Islamic Bank Berhad 200, , , % Projek Lebuhraya Usahasama Berhad 200, , , % Jimah Energy Ventures Sdn Bhd 200, , , % Ranhill Powertron II Sdn Bhd 200, , , % TNB Northern Energy Bhd 200, , , % Alam Maritime Resources Bhd 200, , , % Cerah Sama Sdn Bhd 200, , , % Malakoff Power Berhad 200, , , % National Bank of Abu Dhabi 200, , , % Total Malaysian Sukuk 2,489,999 2,611,696 2,536, % Total Malaysian Equities & Sukuk 4,424,869 10,579,967 9,885, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 43

44 ISTIQRAR Security Name Number of Units Total Cost Market Value % of NAV Construction IJM Corporation Bhd 18,000 61,671 57, % Gamuda Bhd 14,000 71,891 66, % Hock Seng Lee Bhd 23,400 43,120 37, % Ho Hup Construction Company Bhd 32,000 44,412 26, % Muhibbah Engineering(M) Bhd 17,600 39,773 39, % Consumer PPB Group Bhd 3,000 46,729 47, % QL Resources Berhad 5,000 21,474 21, % Industrial Products Cahya Mata Sarawak Berhad 16,000 80,080 64, % Kossan Rubber Industries Berhad 4,000 27,173 26, % Petronas Chemicals Group Bhd 13,000 86,004 90, % Petronas Gas Bhd 3,200 69,233 68, % Top Glove Corporation Bhd 4,000 22,414 21, % Infrastructure Project Company Digi.Com Bhd 14,300 79,149 69, % Plantation Genting Plantations Bhd 9,000 96,109 97, % IJM Plantations Bhd 21,000 77,091 71, % IOI Corporation Berhad 11,000 47,235 48, % Sarawak Oil Palms Bhd 18,000 85,032 66, % Kuala Lumpur Kepong Bhd 2,300 52,492 55, % Property SP Setia Berhad 13,000 43,563 40, % Sunway Berhad 13,000 43,299 39, % Technology Globetronics Technology Bhd 12,000 75,490 41, % Inari Amertron Bhd 21,500 62,130 71, % Trading/Services Axiata Group Berhad 16,034 86,106 75, % Bermaz Auto Berhad 24,600 56,213 52, % Dialog Group Bhd 24,608 42,545 37, % E.A. Technique(M) Berhad 33,000 42,118 20, % IHH Healthcare Berhad 12,000 71,404 76, % Malakoff Corporation Bhd 24,300 41,854 33, % MMC Corporation Bhd 31,000 71,219 72, % Sime Darby Berhad 16, , , % Sapurakencana Petroleum Berhad 20,000 44,151 32, % Telekom Malaysia Bhd 9,258 59,918 55, % Tenaga Nasional Bhd 13, , , % Westports Holdings Berhad 10,000 43,029 43, % Real Estate Investment Trust Axis Real Estate Investment Trust % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 44

45 Warrants Mitrajaya Holdings Berhad-WD 4,800-2, % Gamuda Bhd-WE 4,833 1,250 5, % Total Malaysian Equities 532,922 2,149,182 1,997, % Malaysian Sukuk Kapar Energy Ventures Sdn Bhd 400, , , % BGSM Management Sdn Bhd 310, , , % Senari Synergy Sdn Bhd 250, , , % CIMB Islamic Bank Berhad 400, , , % Anih Berhad 400, , , % Jimah Energy Ventures Sdn Bhd 400, , , % Ranhill Powertron II Sdn Bhd 400, , , % TNB Northern Energy Bhd 400, , , % Alam Maritime Resources Bhd 400, , , % Sarawak Energy Berhad 400, , , % Cerah Sama Sdn Bhd 400, , , % Malakoff Power Berhad 300, , , % National Bank of Abu Dhabi 400, , , % Total Malaysian Sukuk 4,860,000 5,093,091 4,940, % Total Malaysian Equities & Sukuk 5,392,922 7,242,273 6,937, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 45

46 myequity Security Name Number of Units Total Cost Market Value % of NAV Construction Gamuda Bhd 136, , , % IJM Corporation Bhd 208, , , % Ho Hup Construction Company Bhd 10,000 13,879 8, % Mitrajaya Holdings Bhd 21,500 24,500 27, % WCT Bhd 54,000 97,909 93, % Consumer PPB Group Bhd 37, , , % Fraser & Neave Holdings Bhd 7, , , % QL Resources Berhad 35, , , % UMW Holdings Berhad 40, , , % Industrial Products Cahya Mata Sarawak Berhad 36, , , % Hartalega Holdings Bhd 43, , , % Kossan Rubber Industries Berhad 21, , , % Lafarge Malaysia Bhd 9,000 80,947 64, % Petronas Chemicals Group Bhd 187,700 1,225,240 1,310, % Petronas Gas Bhd 50,100 1,123,456 1,067, % Press Metal Berhad 103, , , % Top Glove Corporation Bhd 51, , , % Infrastructure Project Company Digi.Com Bhd 236,800 1,327,527 1,143, % Time Dotcom Bhd 19, , , % Plantation Felda Global Ventures Holdings Berhad 116, , , % Genting Plantations Bhd 22, , , % IOI Corporation Berhad 213, , , % Kuala Lumpur Kepong Bhd 34, , , % Property IOI Properties Group Bhd 111, , , % Mah Sing Group Bhd 102, , , % SP Setia Berhad 20,800 70,357 65, % Sunway Berhad 35, , , % UEM Sunrise Bhd 84, ,777 88, % Technology Inari Amertron Bhd 40, , , % Trading/Services Axiata Group Berhad 290,133 1,735,760 1,369, % Dialog Group Bhd 282, , , % IHH Healthcare Berhad 180,000 1,094,166 1,143, % KPJ Healthcare Bhd 37, , , % MISC Berhad 93, , , % Malakoff Corporation Bhd 157, , , % Maxis Berhad 163,500 1,069, , % MMC Corporation Bhd 54, , , % MyEg Services Bhd 140, , , % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 46

47 Petronas Dagangan Berhad 19, , , % Sapurakencana Petroleum Berhad 278, , , % Sime Darby Berhad 222,714 1,946,738 1,803, % Telekom Malaysia Bhd 143, , , % Tenaga Nasional Bhd 228,325 2,965,329 3,173, % Westports Holdings Berhad 67, , , % Real Estate Investment Trust Axis Real Estate Investment Trust 1,194 1,898 1, % KLCC Property & KLCC Reits Staple Group 27, , , % Total Malaysian Equities 4,472,771 23,884,855 22,735, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 47

48 mygrowth Security Name Number of Units Total Cost Market Value % of NAV Construction Gamuda Bhd 52, , , % IJM Corporation Bhd 66, , , % Ho Hup Construction Company Bhd 56,000 77,721 45, % Hock Seng Lee Bhd 40,000 73,704 64, % Kimlun Corporation Bhd 14,000 24,964 29, % Mitrajaya Holdings Bhd 18,800 22,941 23, % Muhibbah Engineering(M) Bhd 10,000 23,882 22, % WCT Holdings Berhad 16,000 24,919 27, % Consumer QL Resources Berhad 10,400 42,682 45, % PPB Group Bhd 2,500 39,084 39, % Industrial Products Cahya Mata Sarawak Berhad 13,700 66,827 54, % Petronas Chemicals Group Bhd 56, , , % Kossan Rubber Industries Berhad 6,000 42,279 39, % Petronas Gas Bhd 16, , , % SKP Resources Bhd 56,000 78,192 72, % Top Glove Corporation Bhd 8,000 44,497 42, % VS Industry Bhd 30,000 42,485 42, % Infrastructure Project Company Time Dotcom Bhd 2,000 11,644 15, % Digi.Com Bhd 52, , , % Plantation Genting Plantations Bhd 22, , , % IJM Plantations Bhd 44, , , % IOI Corporation Berhad 53, , , % Kuala Lumpur Kepong Bhd 10, , , % Sarawak Oil Palms Bhd 14,000 66,716 51, % Property SP Setia Berhad 11,600 38,805 36, % Technology Unisem (M) Bhd 13,000 29,448 30, % Inari Amertron Bhd 44, , , % Trading/Services Axiata Group Berhad 79, , , % Bermaz Auto Berhad 148, , , % Dialog Group Bhd 93, , , % IHH Healthcare Berhad 45, , , % KPJ Healthcare Bhd 15,300 57,620 63, % MISC Berhad 16, , , % Maxis Berhad 11,000 73,130 65, % Pestech International Berhad 47,000 69,748 72, % Petronas Dagangan Berhad 3,900 96,650 92, % Prestariang Berhad 46, ,832 95, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 48

49 Sime Darby Berhad 65, , , % Sapurakencana Petroleum Berhad 16,600 36,584 26, % Tenaga Nasional Bhd 42, , , % Telekom Malaysia Bhd 27, , , % UEM Edgenta Berhad 11,600 37,005 40, % Real Estate Investment Trust Axis Real Estate Investment Trust 14,251 24,984 22, % KLCC Property & KLCC Reits Staple Securities 2,000 15,263 16, % Total Malaysian Equities 1,426,911 6,473,023 6,195, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 49

50 mybluechips Security Name Number of Units Total Cost Market Value % of NAV Construction Gamuda Bhd 51, , , % IJM Corporation Bhd 63, , , % Ho Hup Construction Company Bhd 55,000 76,333 45, % Hock Seng Lee Bhd 38,000 70,014 60, % Kimlun Corporation Bhd 13,000 23,181 27, % Mitrajaya Holdings Bhd 17,200 20,985 21, % Muhibbah Engineering(M) Bhd 10,000 23,882 22, % WCT Holdings Berhad 15,000 23,362 25, % Consumer QL Resources Berhad 9,900 40,630 43, % PPB Group Bhd 2,400 37,521 38, % Industrial Products Cahya Mata Sarawak Berhad 12,600 61,441 50, % Petronas Chemicals Group Bhd 51, , , % Kossan Rubber Industries Berhad 6,000 42,279 39, % Petronas Gas Bhd 15, , , % SKP Resources Bhd 53,000 74,003 68, % Top Glove Corporation Bhd 8,000 44,497 42, % VS Industry Bhd 28,000 39,655 39, % Infrastructure Project Company Time Dotcom Bhd 1,100 6,424 8, % Digi.Com Bhd 50, , , % Plantation Genting Plantations Bhd 21, , , % IJM Plantations Bhd 42, , , % IOI Corporation Berhad 52, , , % Kuala Lumpur Kepong Bhd 10, , , % Sarawak Oil Palms Bhd 15,000 71,481 55, % Property SP Setia Berhad 9,600 32,173 30, % Technology Unisem (M) Bhd 13,300 30,152 31, % Inari Amertron Bhd 44, , , % Real Estate Investment Trust Axis Real Estate Investment Trust 13,238 23,207 21, % KLCC Property & KLCC Reits Staple Securities 2,000 15,263 16, % Trading/Services Axiata Group Berhad 75, , , % Bermaz Auto Berhad 142, , , % Dialog Group Bhd 89, , , % IHH Healthcare Berhad 42, , , % KPJ Healthcare Bhd 15,000 56,358 62, % MISC Berhad 17, , , % Maxis Berhad 11,700 77,769 69, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 50

51 Pestech International Berhad 42,000 62,336 64, % Petronas Dagangan Berhad 3,700 91,717 88, % Prestariang Berhad 43, ,742 88, % Sime Darby Berhad 61, , , % Sapurakencana Petroleum Berhad 16,900 37,423 27, % Telekom Malaysia Bhd 26, , , % Tenaga Nasional Bhd 41, , , % UEM Edgenta Berhad 10,200 32,538 35, % Total Malaysian Equities 1,363,905 6,169,647 5,924, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 51

52 mydividend Security Name Number of Units Total Cost Market Value % of NAV Construction Gamuda Bhd 56, , , % IJM Corporation Bhd 70, , , % Hock Seng Lee Bhd 42,900 79,047 68, % Ho Hup Construction Company Bhd 60,000 83,273 49, % Kimlun Corporation Bhd 16,000 28,530 33, % Mitrajaya Holdings Bhd 20,100 24,517 25, % Muhibbah Engineering(M) Bhd 11,000 26,271 24, % WCT Holdings Berhad 18,000 28,034 31, % Consumer QL Resources Berhad 11,500 47,197 50, % PPB Group Bhd 4,000 62,364 63, % Industrial Products Cahya Mata Sarawak Berhad 14,700 71,625 58, % Petronas Gas Bhd 17, , , % Kossan Rubber Industries Berhad 8,000 56,366 52, % Petronas Chemicals Group Bhd 60, , , % SKP Resources Bhd 61,000 85,173 78, % Top Glove Corporation Bhd 10,000 55,620 53, % VS Industry Bhd 33,000 46,729 46, % Infrastructure Project Company Digi.Com Bhd 57, , , % Plantation Genting Plantations Bhd 23, , , % IJM Plantations Bhd 48, , , % IOI Corporation Berhad 54, , , % Kuala Lumpur Kepong Bhd 12, , , % Sarawak Oil Palms Bhd 15,000 71,481 55, % Property SP Setia Berhad 12,000 40,143 37, % Technology Unisem (M) Bhd 14,300 32,405 33, % Inari Amertron Bhd 48, , , % Trading/Services Axis Real Estate Investment Trust 16,968 29,634 27, % KLCC Property & KLCC Reits Staple Securities 2,000 15,263 16, % Trading/Services Axiata Group Berhad 86, , , % Bermaz Auto Berhad 159, , , % Dialog Group Bhd 103, , , % IHH Healthcare Berhad 47, , , % KPJ Healthcare Bhd 16,500 61,977 68, % MISC Berhad 17, , , % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 52

53 Maxis Berhad 13,900 92,350 83, % Pestech International Berhad 53,000 78,660 81, % Petronas Dagangan Berhad 4,500 84, , % Prestariang Berhad 49, , , % Sime Darby Berhad 72, , , % Sapurakencana Petroleum Berhad 18,900 41,753 30, % Telekom Malaysia Bhd 29, , , % Tenaga Nasional Bhd 47, , , % UEM Edgenta Berhad 12,000 38,281 41, % Total Malaysian Equities 1,551,322 7,034,595 6,753, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 53

54 mybalanced Security Name Number of Units Total Cost Market Value % of NAV Construction IJM Corporation Bhd 24,000 82,493 76, % Gamuda Bhd 17,900 91,569 85, % Ho Hup Construction Company Bhd 21,000 29,146 17, % Hock Seng Lee Bhd 14,500 26,748 23, % Mitrajaya Holdings Bhd 20,100 22,932 25, % Muhibbah Engineering(M) Bhd 23,700 53,191 52, % Consumer PPB Group Bhd 2,000 31,153 31, % QL Resources Berhad 4,000 17,186 17, % Industrial Products Cahya Mata Sarawak Berhad 11,000 55,091 44, % Kossan Rubber Industries Berhad 2,000 13,569 13, % Petronas Gas Bhd 5, , , % Petronas Chemicals Group Bhd 18, , , % SKP Resources Bhd 21,000 29,432 27, % Top Glove Corporation Bhd 2,000 11,235 10, % Infrastructure Project Company Digi.Com Bhd 18, ,646 88, % Plantation Genting Plantations Bhd 11, , , % IJM Plantations Bhd 15,000 55,050 51, % IOI Corporation Berhad 26, , , % Kuala Lumpur Kepong Bhd 3,100 69,617 74, % Sarawak Oil Palms Bhd 12,000 56,688 44, % Property SP Setia Berhad 8,000 26,812 25, % Sunway Berhad 8,000 26,645 24, % Technology Globetronics Technology Bhd 8,000 50,299 27, % Inari Amertron Bhd 14,500 43,224 48, % Trading/Services Axiata Group Berhad 29, , , % Bermaz Auto Berhad 32,300 73,372 68, % Dialog Group Bhd 29,304 50,155 45, % E.A. Technique(M) Berhad 23,000 29,597 14, % IHH Healthcare Berhad 16,000 97, , % MISC Berhad 6,000 48,968 44, % Malakoff Corporation Bhd 32,300 55,525 44, % Maxis Berhad 12,300 82,023 73, % MMC Corporation Bhd 20,000 45,634 46, % Sime Darby Berhad 21, , , % Sapurakencana Petroleum Berhad 14,000 30,906 22, % Telekom Malaysia Bhd 11,739 76,623 69, % Tenaga Nasional Bhd 16, , , % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 54

55 Westports Holdings Berhad 7,000 30,121 30, % Real Estate Investment Trust Axis Real Estate Investment Trust % Warrants Mitrajaya Holdings Berhad -WD 3,200-1, % Gamuda Bhd - WE 2, , % Total Malaysian Equities 588,474 2,573,898 2,384, % Malaysian Sukuk BGSM Management Sdn Bhd 520, , , % Bank Islam Malaysia Berhad 1,000,000 1,018,080 1,023, % CIMB Islamic Bank Berhad 200, , , % Projek Lebuhraya Usahasama Berhad 850, , , % Jimah Energy Ventures Sdn Bhd 550, , , % Ranhill Powertron II Sdn Bhd 450, , , % TNB Northern Energy Bhd 450, , , % Tanjung Bin Energy Issuer Berhad 500, , , % Alam Maritime Resources Bhd 550, , , % Kapar Energy Ventures Sdn Bhd 550, , , % Sarawak Energy Berhad 850, , , % Anih Berhad 600, , , % Cerah Sama Sdn Bhd 900, , , % Malakoff Power Berhad 900, , , % National Bank of Abu Dhabi 400, , , % Northport Malaysia Berhad 500, , , % Jimah East Power Sdn Bhd 1,000,000 1,056,640 1,071, % Total Malaysian Sukuk 10,770,000 11,159,380 11,114, % Total Malaysian Equities & Sukuk 11,358,474 13,733,279 13,499, % SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 55

56 COMPARATIVE PERFORMANCE TABLE ITTIZAN Portfolio Composition 31-Dec Dec Dec Dec Dec-12 (%) (%) (%) (%) (%) a. Equities: Construction Consumer Products Industrial Products Infrastructure Plantation Property Technology Trading & Services REITs Warrants b. Sukuk c. Money Market & Cash TOTAL Dec Dec Dec Dec Dec-12 Total NAV (RM) 10,740,005 22,977,064 23,385,211 24,457,156 22,774,730 Number of units 5,936,535 12,248,713 12,518,467 12,926,122 13,530,802 NAV per Unit (RM) Highest NAV (RM) Lowest NAV (RM) Total Annual Return (% p.a) a) Capital Growth b) Income Distributions Average Annual Return : One-Year Three-Year Five-Year Benchmark Performance (70% FBM Shariah Index : 30% 1-Month GIA Rates Maybank) Average Annual Return : One-Year Three-Year Five-Year SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 56

57 ISTIQRAR Portfolio Composition 31-Dec Dec Dec Dec Dec-12 (%) (%) (%) (%) (%) a. Equities: Construction Consumer Products Industrial Products Infrastructure Plantation Property Technology Trading & Services REITs Warrants b. Sukuk c. Money Market & Cash TOTAL Dec Dec Dec Dec Dec-12 Total NAV (RM) 8,207,842 12,410,092 12,400,829 12,534,317 12,120,158 Number of units 5,705,443 8,611,777 8,751,945 8,904,600 9,203,208 NAV per Unit (RM) Highest NAV (RM) Lowest NAV (RM) Total Annual Return (% p.a) a) Capital Growth b) Income Distributions Average Annual Return : One-Year Three-Year Five-Year Benchmark Performance (30% FBM Shariah Index : 70% 1-Month GIA Rates Maybank) Average Annual Return : One-Year Three-Year Five-Year SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 57

58 myequity INDEX 31-Dec Dec Dec Dec Dec-12 Portfolio Composition (%) (%) (%) (%) (%) a. Equities: Construction Consumer Products Industrial Products Infrastructure Plantation Property Technology Trading & Services REITs Warrants b. Sukuk c. Money Market & Cash TOTAL Dec Dec Dec Dec Dec-12 Total NAV (RM) 24,713,653 21,199,201 15,781,182 12,377,753 7,722,366 Number of units 14,990,982 12,187,734 9,160,411 7,153,541 5,126,342 NAV per Unit (RM) Highest NAV (RM) Lowest NAV (RM) Total Annual Return (% p.a) a) Capital Growth b) Income Distributions Average Annual Return : One-Year Three-Year Five-Year Benchmark Performance (FBM Shariah Index) Average Annual Return : One-Year Three-Year Five-Year SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 58

59 mygrowth 31-Dec Dec Dec Dec Dec-12 Portfolio Composition (%) (%) (%) (%) (%) a. Equities: Construction Consumer Products Industrial Products Infrastructure Plantation Property Technology Trading & Services REITS Warrants b. Sukuk c. Money Market & Cash TOTAL Dec Dec Dec Dec Dec-12 Total NAV (RM) 8,564,487 8,003,942 7,013,066 6,254,346 4,620,531 Number of units 6,559,814 5,912,989 5,177,770 4,510,356 3,867,556 NAV per Unit (RM) Highest NAV (RM) Lowest NAV (RM) Total Annual Return (% p.a) a) Capital Growth b) Income Distributions Average Annual Return : One-Year Three-Year Five-Year Benchmark Performance (FBM Shariah Index) Average Annual Return : One-Year Three-Year Five-Year SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 59

60 myblue CHIPS 31-Dec Dec Dec Dec Dec-12 Portfolio Composition (%) (%) (%) (%) (%) a. Equities: Construction Consumer Products Industrial Products Infrastructure Plantation Property Technology Trading & Services REITS Warrants b. Sukuk c. Money Market & Cash TOTAL Dec Dec Dec Dec Dec-12 Total NAV (RM) 7,848,172 7,547,029 6,832,540 6,067,297 4,579,614 Number of units 5,912,014 5,471,230 4,955,050 4,302,222 3,733,835 NAV per Unit (RM) Highest NAV (RM) Lowest NAV (RM) Total Annual Return (% p.a) a) Capital Growth b) Income Distributions Average Annual Return : One-Year Three-Year Five-Year Benchmark Performance (FBM Shariah Index) Average Annual Return : One-Year Three-Year Five-Year SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 60

61 mydividend 31-Dec Dec Dec Dec Dec-12 Portfolio Composition (%) (%) (%) (%) (%) a. Equities: Construction Consumer Products Industrial Products Infrastructure Plantation Property Technology Trading & Services REITs Warrants b. Sukuk c. Money Market & Cash TOTAL Dec Dec Dec Dec Dec-12 Total NAV (RM) 9,525,116 8,791,957 7,461,149 6,687,100 4,719,043 Number of units 6,706,536 5,975,763 5,036,643 4,487,083 3,638,863 NAV per Unit (RM) Highest NAV (RM) Lowest NAV (RM) Total Annual Return (% p.a) a) Capital Growth b) Income Distributions Average Annual Return : One-Year Three-Year Five-Year Benchmark Performance (FBM Shariah Index) Average Annual Return : One-Year Three-Year Five-Year SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 61

62 mybalanced 31-Dec Dec Dec Dec Dec-12 Portfolio Composition (%) (%) (%) (%) (%) a. Equities: Construction Consumer Products Industrial Products Infrastructure Plantation Property Technology Trading & Services REITs Warrants b. Sukuk c. Money Market & Cash TOTAL Dec Dec Dec Dec Dec-12 Total NAV (RM) 22,172,878 7,656,683 6,725,771 5,146,369 4,141,321 Number of units 18,120,077 6,352,300 5,668,099 4,356,342 3,762,770 NAV per Unit (RM) Highest NAV (RM) Lowest NAV (RM) Total Annual Return (% p.a) a) Capital Growth b) Income Distributions Average Annual Return : One-Year Three-Year Five-Year Benchmark Performance (FBM Shariah Index) Average Annual Return : One-Year Three-Year Five-Year SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 62

63 SYARIKAT TAKAFUL MALAYSIA BERHAD ILP ANNUAL REPORT 2016 P a g e 63