AFFIN ISLAMIC EQUITY FUND by dmm14830

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									                                          A F F IN IS L A M IC E Q U IT Y F UN D   A F F IN IS L A M IC E Q U IT Y FU N D

CONTENTS                                                                                 13.   Shariah Information Of The Fund                                  25
                                                                                         14.   Payables And Accruals                                            25
1.   FUND INFORMATION                                                      1             15.   Number Of Units In Circulations And Net Assets Attributable To
                                                                                               Unitholders                                                      25
     1.1   Investment Objective                                            1             16.   Transactions With Brokers/Dealers                                26
     1.2   Distribution Policy                                             1             17.   Unit Held By The Manager And Parties Related To The Manager      27
     1.3   Unitholders’Statistics                                          1             18.   Management Expense Ratio (“MER”)                                 28
                                                                                         19.   Portfolio Turnover Ratio (“PTR”)                                 28
2.   FUND PERFORMANCE                                                      1             20.   Segment Information                                              28
                                                                                         21.   Interim Financial Statement Are Unaudited                        28
     2.1   Asset Allocation                                                1
     2.2   Returns Breakdown By Asset Class                                2       10.   STATEMENT BY THE MANAGER                                               29
     2.3   Performance Data                                                2
     2.4   Annual Return                                                   2       11.   TRUSTEE’S REPORT TO THE UNITHOLDERS                                    30
     2.5   Average Annual Return (%)                                       2
                                                                                   12.   SHARIAH ADVISER’S REPORT TO THE UNITHOLDERS                            31-32
3.   MANAGER’S REPORT                                                      3

     3.1   Fund’s Performance                                              3
     3.2   Investment Strategy                                             3-4
     3.3   Income Distribution                                             4
     3.4   Stock Market Review                                             4-5
     3.5   Stock Market Outlook                                            5
     3.6   Policy On Stockbroking Rebates And Soft Commissions             6


4.   INCOME STATEMENT                                                      7

5.   STATEMENT OF ASSETS AND LIABILITIES                                   8

6.   STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE                       9

7.   CASH FLOW STATEMENT                                                  10

8.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                           11

     A.    Basis Of Preparation Of The Financial Statements               11
     B.    Income Recognition                                             12
     C.    Finance Cost                                                   12
     D.    Taxation                                                       12
     E.    Functional And Reporting Currency                              12
     F.    Investments                                                    12
     G.    Amount Due From/To Stockbrokers                                12
     H.    Cash And Cash Equivalents                                      13
     I.    Creation And Cancellation Of Units                             13
     J.    Proceeds And Payments On Creation And Cancellation Of Units    13
     K.    Segmental Information                                          13
     L.    Financial Instruments                                          13-14
     M.    Critical Accounting Estimates And Judgements In Applying
           Accounting Policies                                            14

9.   NOTES TO THE FINANCIAL STATEMENTS                                    15

      1.   Information On The Fund                                        15
      2.   Financial Risk Management Objectives And Policies              15-20
      3.   Net Assets Attributable To Unitholders                         20
      4.   Net Realised Gains On Sales Of Shariah-compliant Investments   20
      5.   Management Fee                                                 20
      6.   Trustee’s Fee                                                  20
      7.   Administration Expenses                                        20
      8.   Finance Cost-Distribution                                      20
      9.   Taxation                                                       21
     10.   Quoted Shariah-compliant Investments – Local                   21-24
     11.   Cash And Cash Equivalents                                      24
     12.   Receivables                                                    25
                                                   A F F IN IS L A M IC E Q U IT Y F UN D             A F F IN IS L A M IC E Q U IT Y FU N D

1. FUND INFORMATION                                                                                   2.2 Returns Breakdown by Asset Class

Fund Category           :      Islamic Equity                                                                                                       31/12/2009         30/06/2009
Type of Fund            :      Capital Growth
                                                                                                      NAV (RM)                                     151,666,555        132,249,252
Launch Date             :      1 August 2007
                                                                                                      Shariah-compliant Equity*                         5.13%              4.33%
Benchmark               :      FTSE-Bursa Malaysia EMAS Shariah Index
                                                                                                      Shariah-based Deposit*                            0.14%              0.75%
1.1 Investment Objective                                                                              Gross Returns                                     5.27%              5.08%
The Fund aims to provide investors with stable returns by enabling investors to participate           Less:
in the growth prospect of the Malaysian market which is in compliance with Shariah                    Expenses*                                         0.78%               1.56%
principles. This is achieved through investing in undervalued and high quality Shariah-               Net Total Returns Before Tax*                     4.49%               3.52%
compliant equities of fundamentally sound companies listed on FTSE Bursa Malaysia                     Unit in Circulation                          356,422,350        342,340,270
Emas Shariah Index (FBMS EMAS) of Bursa Malaysia.
                                                                                                      * Expressed as a percentage of the Fund’s Net Asset Value (NAV)
1.2 Distribution Policy
In line with the Fund’s objective to reward unit holders with reasonable rate of return on            2.3 Performance Data
income and to realize capital growth, any income received by the Fund which is available              The performance data covering the last 2 financial years of the Fund at the end of each
for distribution, all or substantially all of the income will be distributed after taxation to unit   financial year are as follows:-
holders each year.
                                                                                                                                                    31/12/2009         Y/E 2009          Y/E 2008
1.3 Unit holders’Statistics

Size of holdings               No. of unit holders           No. of units held                        Total NAV                            (RM)    151,666,555      132,249,252      155,511,725
5,000 – below                           82,260                   131,675,588                          Unit in circulation                (Units)   356,422,350      342,340,270      363,761,270
5,001 – 10,000                          24,310                   169,817,822
10,001 – 50,000                           3,985                   49,418,235                          NAV per unit                      (RM)        0.4255      0.3863xd*                  0.4275
50,001 – 100,000                              9                       578,330                         Highest                           (RM)        0.4336         0.4279                  0.5171
100,001– 500,000                              5                       897,006                         Lowest                            (RM)        0.3800         0.3087                  0.4098
500,001 and above                             1                     1,043,483                         Distribution per unit
Manager stock                                 1                     2,991,886                         Gross                             (sen)           Nil          2.87                       Nil
                                       110,571                   356,422,350                          Net                               (sen)           Nil          2.70                       Nil
                                                                                                      Date of distribution                              Nil   30/06/2009                        Nil
                                                                                                      MER                                 (%)        0.80**          1.60                     1.46
2. FUND PERFORMANCE
                                                                                                      PTR                                  (X)       0.51**          0.23                     0.79
                                                                                                      *ex-distribution
2.1 Asset Allocation
As at 31st Dec 2009, the Fund was 87.12% invested in Shariah-compliant equities, 13.54%               ** The MER and PTR are for the six months period ended 31 December 2009.
in Shariah-based deposits and -0.66% in Net Cash and Other Assets/ (Liability). In terms
                                                                                                      2.4 Annual Return
of sector allocation, the top 5 sectors accounted for 87.12% of the NAV of the Fund and
the weighting of the top 5 sectors are in the following order: Trading & Services (32.78%),
                                                                                                      Investment Return                               31/12/2009       Y/E 2009          Y/E 2008
Plantation (13.55%), Industrial Products (12.72%), Consumer (9.62%) and Properties
                                                                                                      -Capital Return                       (%)          10.15             -9.63            -9.43*
(8.11%). Portfolio of investment and other assets covering the last 3 financial years, taken
                                                                                                      -Income Distribution                  (%)            -                6.99                 -
as percentage of NAV, illustrated as follows:-
                                                                                                      Total Return                          (%)          10.15             -2.64             -9.43
                                                                                                      *As at commencement date
Sectors                             Percentage (%) Percentage (%) Percentage (%)
                                        of NAV         of NAV         of NAV
                                                                                                      2.5 Average annual return (%) of the Fund measured over the following periods are as
                                      31/12/2009      Y/E 2009       Y/E 2008
                                                                                                          follows:-
Consumer                                 9.62           2.82           3.04
Construction                             7.05           5.26           2.48
Industrial                              12.72          16.27          10.45                                                     AIEF *      FBMS Emas **
Infrastructure                           3.29           3.81           2.63                           -6 month                  10.15          14.26
Plantation                              13.55          18.71           8.46                           - one year                -2.64          -13.29
Properties                               8.11           4.75           4.40
Trading & Services                      32.78          31.38          20.73                           *AIEF Total Return: Percentage change in fund prices divided by the months/years under review.
Shariah-based Deposit                   13.54          24.19          47.59                           **FBMS Emas Total Return: Percentage change in Index divided by the months/years under
Net Cash and Other Assets/Liabilities -0.66            -7.19           0.22                           review. Source- Bloomberg
Total                                  100.00         100.00         100.00
                                                                                                      Investors are advised that the past performance of the Fund is not an indication of
                                                                                                      future performance. In addition, the unit price and distribution payable (if any) may
                                                                                                      rise as well as decline.




                                              AFFIN FUND MANAGEMENT BERHAD 1                             2    AFFIN FUND MANAGEMENT BERHAD
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3. MANAGER’S REPORT                                                                          In addition, the Fund may potentially invest in Shariah-compliant stocks that are currently
   FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009                                            not paying dividends but offer prospect of future income or capital appreciation. The Fund
                                                                                             will be actively traded and the investment manager will actively seek to add value by
3.1 Fund’s Performance                                                                       selectively over/under-weighting benchmark components to achieve relative out-
For the period under review, Affin Islamic Equity Fund (AIEF) has accumulated a gross        performance.
income of RM7,991,056 of which RM5,796,763 as net realized gains on sale of Shariah-
compliant investments, RM211,095 as profit and hibah from Shariah-based deposits and         For investment in Shariah-compliant equities, the Fund shall invest in Shariah-compliant
RM1,981,826 as gross dividend income.                                                        stocks that are in the list of Shariah-compliant securities issued by the Shariah Advisory
                                                                                             Council of the Securities Commission. For Islamic money market, the Fund shall invest in
AIEF has generated a profit before tax of RM6,802,515. Since 30 June 2009 the fund’s net     securities/instruments issued by approved banks in the market.
asset value per unit ranged from a low of 0.3800 sen per unit (6/07/2009) to a high of
0.4336 sen per unit (20/10/2009).                                                            As at 31 st Dec 2009, the Fund was 87.1% invested in Shariah-compliant equities, 24.19%
                                                                                             in Shariah-based deposits and (7.19%) in Net Cash and Other Assets/ (Liability). Our
                                      31/12/2009            Y/E 2009          Change%        investment strategy on Shariah-compliant equities is to accumulate Shariah-compliant
NAV (RM)                             151,666,554         132,249,252            14.68%       stocks that can offer between 8% and 10% upside potential in a rising market. We will also
NAV per unit (sen)                        0.4255              0.3863            10.15%       take profit on Shariah-compliant stocks that have done extremely well and switch over to
                                                                                             laggards seeking to outperform the benchmark FBMS EMAS.
Unit in circulation                  356,422,350         342,340,270             4.11%
FBMS Emas*                              8,509.52            7,445.71            14.28%       3.3 Income Distribution
* Source: Bloomberg                                                                          The Manager has decided not to declare any interim income distribution.
For the period under review from 30 June 2009, the Fund under-performed the FBMS             3.4 Stock Market Review: July 2009 – December 2009
EMAS index by -4.14% registering (10.15%) against (14.29%). During the interim period        For the month of July, the market was propelled by higher liquidity and the low interest rate
under review, there were no unit split declaration made nor were there any significant       regime while BNM kept the OPR at 2%. In addition, the recovery theme globally to some extent
changes in the affairs of the Fund and circumstances that materially affected the interest   provided confidence to investors. FBMS Emas Index moved up by 8.9% to 8,107 points and the
of the unit holders.                                                                         average daily value of the market was RM1.45bn for the month of July. The domestic equity
Affin Islamic Equity Fund was ranked 28 out of 46 (for the 6-month Period: 01/07/2009 –      market underwent a major transition with the introduction of the revamped FBM KLCI Index and
01/01/2010) in the Lipper Fund Table: Islamic Equity Category (The Edge dated 11th           the merger of the First Board and Second Board into the Main Market. The MESDAQ market is
January 2010).                                                                               now known as the ACE Market. The global markets were also on the rise with Shenzhen
                                                                                             recording a hefty gain of 16% on a month to month basis. The Dow posted its largest gain of
                                     31/12/2009             2009             2008            8.6%, its biggest monthly hike since the global economic crisis in November 2008 signaling that
AIEF Total Return*                        10.15            -2.64             -9.43           the global economic recovery was well on the way.
FBMS EMAS Total Return**                  14.28           -13.29             -8.06
                                                                                             During the month of August, the market was in a consolidation phase after the FBM KLCI had
*AIEFReturn: Percentage change in NAV divided by the months/years under review.              soared to a year high of 1,196 points. The FBMS Emas was down marginally at 2% at the end
**FBMS EMAS Total Return: Percentage change in Index divided by the months/years             of the month’s trading at 7,924 points. A slew of positive external news had resulted in increased
under review. Source: Bloomberg                                                              market activity but this was thwarted by news from the Chinese authorities that it was planning
                                                                                             to restrict credit growth. As a result China markets were rattled and subsequently slumped by
3.2 Investment Strategy
                                                                                             16% at the end of the month. The announcement of the 2Q GDP at -3.9% was better than
                                                                                             consensus after the -6.2% contraction for the first quarter 2009. Average daily value traded on
                                                                                             the market was RM1.43bn, down marginally in comparison with RM1.45bn registered in the
                                                                                             previous month.

                                                                                             The month of September saw the FBM KLCI breaching the psychological barrier of 1,200 points
                                                                                             in line with the improving economic scenario and stronger corporate earnings. Another impetus
                                                                                             to the market was the improved foreign shareholding which increased to 24% from 21%
                                                                                             previously. FBMS Emas closed the month’s trading at 8,097 points which was up marginally by
                                                                                             2.2% in comparison with the previous month. Average trading value declined to RM1.2bn due
                                                                                             to subdued trading in conjunction with the month of Ramadan.

                                                                                             In the month of October, the FBMS Emas inched higher by 2.95% to 8,337 points owing to
                                                                                             improved liquidity and enhanced market sentiment. There was a run up to the Budget 2010 Day
                                                                                             on 23 October but this was shortlived as Budget 2010 failed to spur the market to a higher level.
The Fund is structured as an open-ended fund with a target allocation of up to 95%
                                                                                             Regionally, the Chinese markets were buoyed by the release of the 3Q GDPwhich registered
invested in Shariah-compliant equities with the remaining 5% invested in Islamic money
                                                                                             a growth of 8.9%. Average daily value traded was also up 6.6% to RM1.29bn in line with
market instruments for liquidity purposes.
                                                                                             stronger market conditions.
The investment manager’s investment approach is to invest a majority of the assets in
Shariah-compliant equities with a focus on those that exhibit above-average earnings         The FBM KLCI was higher by 1.28% to 1,259 points given the strong corporate earnings and
growth, has a leading competitive position and show potential for delivering superior        ample liquidity scenario with the FBMS Emas closed November marginally higher by 0.6% at
returns while staying true to Shariah requirements.                                          8,362.64 points against 8,336.73 points at end-October. The contraction of the GDP at -1.2%
                                                                                             for 3Q2009 was very well received by the market. Average daily value traded on the stock

                                          AFFIN FUND MANAGEMENT BERHAD 3                        4    AFFIN FUND MANAGEMENT BERHAD
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market also increased on a monthly basis to RM1.38bn in light of the slew of positive news.   3.6 Policy On Stockbroking Rebates And Soft Commissions
Chinese markets also ended the month with strong performance with Shenzhen rising as          The Manager is not entitled to any rebates or to share in any commission from any broker
much as 8% in view of the weaker US dollar which prompted institutional funds to pump         in consideration for direct dealings in the investments of the Fund. Accordingly, any rebates
money into emerging markets. UAE’s sovereign wealth flagship company Dubai World              and shared commissions are directed to the account of the relevant Fund.
announced it was seeking to extend maturities on its debt payments owing to its troubled
property development unit Nakheel, which triggered off a brief equity sell-down in global     Notwithstanding the aforesaid, the Manager may receive goods or services by way of soft
bourses on the back of mounting concern about sovereign default risk. However, after Abu      commissions provided always that the goods or services are of demonstrable benefit to the
Dhabi Investment Authority stepped in to inject USD10bn bailout funds into Dubai World,       Fund and that the execution of a transaction is consistent with the best execution
the local market recovered in tandem with the upswing in global stock markets on the back     standards.
of weak US Dollar coupled with low interest rate environment.
                                                                                              The Manager has not received any rebates or shared any commissions from any broker
The market ended the month of December on a positive note with the FBMS Emas rising           during the period under review. The Manager has also not received any goods or services
1.5% to close at 8,508 points. The recovery of the economy from the downturn in late 2008     by way of soft commission during the period under review.
was visible as the FBM KLCI rose as much as 45% for 2009. However, average daily value
traded for the month of December declined significantly by 30.4% to RM964m given the
holiday season and the mild window dressing activities in the early part of December. A
welcomed announcement by the Government on reversal on the imposition of RPGThad
a positive impact on stocks in the property sector. Regionally, the Nikkei increased by 16%
month on month due to positive economic data from Japan which marked its exit from a
severe economic downturn.




3.5 Stock Market Outlook
Moving forward, Affin Fund Managment Berhad (AFMB) is cautiously positive for 1Q2010
with Malaysia’s economy is expected to turn around with its GDPforecasted to grow at 5%
in the year 2010. More capital-raising exercises are expected to take place in the local
equity market, thus, improving liquidity buoyed by low interest rates and measures by
Government to attract foreign direct investment and further liberalise the economy.

The outlook for the equity market is rather muted given that stock bourses globally have
rallied strongly and there are concerns that the prices have moved ahead of valuations and
the real economic recovery. We foresee that the main impetus for the local market going
forward is the upcoming national electricity tariff review in early 2010, award of major
construction projects and steps taken by the Government to stimulate and liberalise the
economy, such as the 10th Malaysia Plan (2011-2015) which will be tabled in June 2010
and Malaysia’s New Economic Model focusing on shaking up the private sector to
transform our national status from a medium high income economy into a high income
economy.

In summary, AFMB opines that business sentiment and corporate earnings in Malaysia will
improve in 2010 in line with the projected economic recovery with external trade and
production picking up due to decreasing unemployment and better consumer demand,
whereby Asia and the emerging economies are expected to lead the charge out of the
global recession. Based on AFMB’s index model the FBM KLCI is expected to trade
between 1,264 and 1,377 points in the 1H of 2010.



                                          AFFIN FUND MANAGEMENT BERHAD 5                         6   AFFIN FUND MANAGEMENT BERHAD
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INCOME STATEMENT                                                                         STATEMENT OF ASSETS AND LIABILITIES
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009                                           AS AT 31 DECEMBER 2009


                                               Note             2009            2008                                                    Note              2009           2008
INVESTMENT INCOME                                                RM              RM      INVESTMENTS                                                       RM             RM

Gross dividend income                                      1,981,826       1,619,641     Quoted Shariah-compliant investments             10      132,138,990      86,041,815
Net realised gain on sale of                                                                                                                       _________       _________
 Shariah-compliant investments                    4        5,796,763               -
Profit and hibah from Shariah-based deposits                 212,467         702,944     LIQUID ASSETS
                                                          _________        ________
                                                           7,991,056       2,322,585     Shariah-based deposits                                    20,536,375      25,937,276
                                                          _________        ________      Cash and bank balances                                     2,984,267         204,524
EXPENSES                                                                                                                                           _________       _________
                                                                                                                                           11      23,520,642      26,141,800
Management fee                                    5       (1,124,283)       (997,156)                                                              _________       _________
Trustee’s fee                                     6          (59,962)        (53,181)
Auditors’remuneration                                               -             200    OTHER ASSETS
Tax agent’s fee                                                     -         (7,150)
Administrative expenses                           7           (4,296)         (1,756)    Receivables                                      12          724,575         765,559
                                                          _________       _________                                                                _________       _________
                                                          (1,188,541)     (1,059,043)    TOTALASSETS                                              156,384,207     112,949,174
                                                          _________       _________                                                               __________       _________

NET INCOME BEFORE FINANCE COST                                                           LIABILITIES
 AND TAXATION                                              6,802,515       1,263,542
                                                                                         Amount due to Manager                                       (191,813)      (151,658)
FINANCE COST                                                                             Amount due to Trustee                                        (10,230)        (8,088)
 Net distribution                                 8                -               -     Amount due to stockbrokers                                (4,374,820)              -
                                                          _________       _________      Payables and accruals                            14         (140,789)      (242,035)
NET INCOME BEFORE TAXATION                                 6,802,515       1,263,542                                                               _________       _________

TAXATION                                          9               -               -      LIABILITIES (EXCLUDING NET ASSETS
                                                          _________       _________       ATTRIBUTABLE TO UNITHOLDERS)                             (4,717,652)      (401,781)
INCREASE IN NET ASSETS                                                                                                                            __________       _________
 ATTRIBUTABLE TO UNITHOLDERS                               6,802,515       1,263,542     NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 15                151,666,555     112,547,393
                                                                                                                                                  __________
                                                                                                                                                  __________       _________
                                                                                                                                                                   _________
                                                         __________
                                                         __________       _________
                                                                          _________
                                                                                         REPRESENTED BY
Net income after taxation is made up of the following:
                                                                                         Fair value of outstanding units                          151,666,555     112,547,393
Realised amount                                            6,802,515       1,263,542                                                              __________       _________
                                                                                                                                                  __________       _________
                                                          _________
                                                          _________       _________
                                                                          _________
                                                                                         NUMBER OF UNITS IN CIRCULATION                   15      356,422,350     354,490,270
                                                                                                                                                  __________
                                                                                                                                                  __________      __________
                                                                                                                                                                  __________

                                                                                         NET ASSET VALUE
                                                                                          PER UNIT, EX-DISTRIBUTION                                   0.4255          0.3175
                                                                                                                                                   _________
                                                                                                                                                   _________       _________
                                                                                                                                                                   _________




The accompanying summary of significant accounting policies and notes to the financial   The accompanying summary of significant accounting policies and notes to the financial
statements form an integral part of these financial statements.                          statements form an integral part of these financial statements.




                                          AFFIN FUND MANAGEMENT BERHAD 7                    8   AFFIN FUND MANAGEMENT BERHAD
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STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS                            CASH FLOW STATEMENT
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009                                            FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009


                                                                 2009             2008                                                     Note            2009            2008
                                                                  RM               RM
                                                                                                                                                            RM              RM
NET ASSETS ATTRIBUTABLE TO UNITHOLDERS
 AT THE BEGINNING OF THE FINANCIALYEAR /                                                  CASH FLOW FROM INVESTING AND
                                                                                           OPERATING ACTIVITIES
 DATE OF COMMENCEMENT                                     132,249,252      155,511,725
                                                                                          Proceeds from sale of Shariah-compliant investments        70,805,815                 -
Movement due to units created and released                                                Purchases of Shariah-compliant investments               (76,086,721)     (45,915,002)
 during the financial year/period:                                                        Profit and hibah received                                      227,069         759,497
                                                                                          Dividends received                                           1,649,620       1,354,505
  Creation of units                                          9,333,714                -   Management fee paid                                        (1,121,070)     (1,039,892)
  Release of units                                         (3,675,246)      (3,253,592)   Trustee’s fee paid                                             (59,791)        (55,462)
                                                           _________        _________     Payment for payables                                           (14,096)        (18,206)
                                                             5,658,468      (3,253,592)                                                             __________      ___________
                                                           _________        _________     Net cash used in investing and
                                                                                           operating activities                                     (4,599,174)     (44,914,560)
Net decrease in net assets attributable to                                                                                                         __________       __________
 unitholders during the financial year/period:
                                                                                          CASH FLOW FROM FINANCING ACTIVITIES
 Net (loss)/income after taxation                           6,802,515         1,263,542   Proceeds from creation of units                             9,333,714                -
 Net change in fair value reserve                           6,956,320      (40,974,282)   Payments for release of units                             (4,160,907)      (3,016,157)
                                                           _________         _________    Payment for distribution                                  (9,243,187)                -
                                                           13,758,835      (39,710,740)                                                             _________        _________
                                                           _________         _________    Net cash (used in)/generated from financing activities    (4,070,380)      (3,016,157)
                                                                                                                                                    _________        _________
NET ASSETS ATTRIBUTABLE TO
 UNITHOLDERS AT THE END OF THE                                                            NET (DECREASE)/INCREASE IN CASH AND
 FINANCIALYEAR/PERIOD                                     151,666,555      112,547,393     CASH EQUIVALENTS                                         (8,669,554)     (47,930,717)
                                                          __________
                                                          __________        _________
                                                                            _________

                                                                                          CASH AND CASH EQUIVALENTS AT THE
                                                                                           BEGINNING OF THE FINANCIALYEAR / DATE
                                                                                           OF COMMENCEMENT                                          32,190,196       74,072,517

                                                                                                                                                    _________        _________
                                                                                          CASH AND CASH EQUIVALENTS AT THE
                                                                                           END OF THE FINANCIALYEAR / PERIOD                  11    23,520,642       26,141,800
                                                                                                                                                    _________
                                                                                                                                                    _________        _________
                                                                                                                                                                     _________




                                                                                          The accompanying summary of significant accounting policies and notes to the financial
The accompanying summary of significant accounting policies and notes to the financial
                                                                                          statements form an integral part of these financial statements.
statements form an integral part of these financial statements.




                                           AFFIN FUND MANAGEMENT BERHAD 9                   10 AFFIN FUND MANAGEMENT BERHAD
                                                 A F F IN IS L A M IC E Q U IT Y F UN D                A F F IN IS L A M IC E Q U IT Y FU N D

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009                                                         FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)

    The following accounting policies have been used in dealing with items which are                   B     INCOME RECOGNITION
    considered material in relation to the financial statements.                                             Realised gains and losses on sales of Shariah-compliant investments are
                                                                                                             accounted for as the difference between the net disposal proceeds and the carrying
A   BASIS OF PREPARATION OF THE FINANCIALSTATEMENTS                                                          amount of Shariah-compliant investments, determined on a weighted average cost
                                                                                                             method for Shariah-compliant shares.
    The financial statements of the Fund have been prepared under the historical cost
                                                                                                             Profit and hibah earned from Shariah-based deposits are recognised on an accrual basis.
    convention, unless otherwise indicated, and in accordance with the Deed, Financial
    Reporting Standards, the MASB Approved Accounting Standards in Malaysia for                              Dividend income is recognised on the ex-dividend date, when the right to receive the
    Entities Other than Private Entities and the Securities Commission’s (“SC”)                              dividend has been established.
    Guidelines on Unit Trust Funds.
                                                                                                       C     FINANCE COST
    (i)    The new accounting standards that are effective for the Fund’s financial year
           beginning on or after 1 July 2008, are as follows:                                                Proposed distributions to unitholders are recognised in the income statement upon
                                                                                                             approval by the Board of Directors of the Manager. The distribution to the
           • FRS 112          Income Taxes                                                                   unitholders is recognised as finance cost in the income statement.

           • Revised standards that have no significant changes compared to the original               D     TAXATION
             standards:
                                                                                                             Current tax expense is determined according to the Malaysian tax laws and includes
            FRS 107           Cash Flow Statements                                                           all taxes based upon the taxable profits.
            FRS 118           Revenue
            FRS 137           Provisions, Contingent Liabilities and Contingent Assets                 E     FUNCTIONALAND REPORTING CURRENCY

                                                                                                             The financial statements are presented in Ringgit Malaysia, which is the Fund’s
           All changes in accounting policies have been made in accordance with the                          functional and presentation currency.
           transitional provisions in the respective standards. The new standards
           adopted by the Fund have been applied retrospectively.
                                                                                                       F     INVESTMENTS
           The adoption of the new standards did not have a material impact on the
           financial statements of the Fund.                                                                 Investments are initially recorded at cost, which include transaction costs, and
                                                                                                             subsequently revalued to their fair values as at the date of the statement of assets
    (ii)   The new standards that have been issued which are relevant to the Fund and                        and liabilities.
           have not been early adopted are:
                                                                                                             In accordance with the Deed, quoted Shariah-compliant investments in Malaysia are
           • FRS 8 Operating Segments (effective for annual period beginning on or after 1 July              valued at the last done market price quoted on Bursa Malaysia Securities Berhad at
             2009). FRS 8 replaces FRS 114 2004 Segment Reporting. The new standard                          the date of the statement of assets and liabilities. Unrealised gains or losses are
             requires a ‘management approach’, under which segment information is                            transferred to the fair value reserve included in the net assets attributable to
             presented on the same basis as that used for internal reporting purposes. The                   unitholders and are not distributable.
             Fund will apply this standard from financial periods beginning on 1 July 2010.
                                                                                                       G     AMOUNT DUE FROM/TO STOCKBROKERS

           • The following standards will be effective for annual period beginning on or after 1             Amount due from/to stockbrokers is carried at approved transaction amount as
             January 2010. The Fund will apply these standards from financial periods                        stated in contract notes.
             beginning on 1 July 2010. The Fund has applied the transitional provision in the
             respective standards which exempts entities from disclosing the possible impact
             arising from the initial application of the standard on the financial statements of the
             Fund:

             - FRS 139 Financial Instruments: Recognition and Measurement
             - FRS 7 Financial Instruments: Disclosures




                                            AFFIN FUND MANAGEMENT BERHAD 11                                12 AFFIN FUND MANAGEMENT BERHAD
                                                A F F IN IS L A M IC E Q U IT Y F UN D             A F F IN IS L A M IC E Q U IT Y FU N D

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)                                         FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)

H   CASH AND CASH EQUIVALENTS                                                                      L     FINANCIALINSTRUMENTS (CONTINUED)

    Cash and cash equivalents comprise cash and bank balances, Shariah based                             (a)   Short term Shariah-based deposits
    demand deposits and highly liquid Shariah-compliant investments that are readily
    convertible to known amounts of cash and which are subject to an insignificant
                                                                                                               For Shariah-based deposits and placements with financial institutions with
    risk of changes in value.
                                                                                                               maturities of less than three months, the carrying value is a reasonable
I   CREATION AND CANCELLATION OF UNITS                                                                         estimate of fair value. For Shariah-based deposits and placements with
                                                                                                               maturities three months and above, estimated fair value is based on discounted
    The Fund issues cancellable units, which are cancelled at the holder’s option and                          cash flows using prevailing Islamic money market profit rates at which similar
    are classified as financial liability. Cancellable units can be put back to the Fund at                    Shariah-based deposits and placements would be made with financial
    any time for cash equal to a proportionate share of the Fund’s net asset value. The                        institutions of similar credit risk and remaining year to maturity.
    outstanding units is carried at the redemption amount that is payable at the balance
    sheet date if the holder exercises the right to put the unit back to the Fund.                       (b)   Quoted Shariah-compliant investments

    Units are created and cancelled at the holder’s option at prices based on the Fund’s                       The estimated fair value is based on quoted and observable market prices.
    net asset value per unit at the time of creation or cancellation. The Fund’s net asset
    value is calculated by dividing the net assets attributable to unitholders with the total
                                                                                                         (c)   Other short term financial instruments
    number of outstanding units.

J   PROCEEDS AND PAYMENTS ON CREATION AND CANCELLATION OF UNITS                                                Other short term financial instruments comprise profit and hibah receivable,
                                                                                                               dividends receivable, other receivables, payables and accruals.
    The net asset value per unit is computed for each dealing day. The price at which
    units are created or cancelled is calculated by reference to the net asset value per                       The carrying value of these assets and liabilities are assumed to approximate
    unit as at the close of business on the relevant dealing day. Units in the Fund are                        their fair value due to short tenure of less than one year.
    classified as financial liability in the statement of net assets and liabilities and are
    stated at fair value representing the price at which unitholders can redeem the units          M     CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
    from the Fund.                                                                                       ACCOUNTING POLICIES

K   SEGMENTALINFORMATION                                                                                 The preparation of financial statements in conformity with FRS and the SC Guidelines
                                                                                                         on Unit Trust Funds requires the use of estimates and assumptions that affect the
    A business segment is a group of assets and operations engaged in providing                          reported amounts of assets and liabilities at the date of the financial statements, and
    products or services that are subject to risks and returns that are different from
                                                                                                         the reported amounts of income and expenses during the reported financial period.
     those of other business segments. A geographical segment is engaged in providing
                                                                                                         Although these estimates are based on the Manager’s best knowledge of current
    products or services within a particular economic environment that are subject to
    risks and returns that are different from those of segments operating in other                       events and actions, actual results may differ from those estimates.
    economic environments.
                                                                                                         Estimates and judgements are continually evaluated by the Manager and are based
L   FINANCIALINSTRUMENTS                                                                                 on historical experience and other factors, including expectations of future events that
                                                                                                         are believed to be reasonable under the circumstances.
    Financial instruments comprise financial assets and financial liabilities. Fair value is
    the amount at which a financial asset could be exchanged or a financial liability                    The Fund makes estimates and assumptions concerning the future. The resulting
    settled, between knowledgeable and willing parties in an arm’s length transaction. The               accounting estimates will, by definition, rarely equal the related actual results. To
    information presented herein represents the estimates of fair values as at the                       enhance the information content of the estimates, certain key variables that are
    statement of assets and liabilities date.                                                            anticipated to have material impact to the Funds’ results and financial position are
                                                                                                         tested for sensitivity to changes in the underlying parameters.
    Where available, quoted and observable market prices are used as the measure of
    fair values. Where such quoted and observable market prices are not available, fair
    values are estimated based on a range of methodologies and assumptions regarding
    risk characteristics of various financial instruments, discount rates, estimates of future
    cash flows and other factors. Changes in the uncertainties and assumptions could
    materially affect these estimates and the resulting fair value estimates.

    A range of methodologies and assumptions had been used in deriving the fair values
    of the Fund’s financial instruments as at the statement of assets and liabilities date.
    The total fair value of each financial instrument is not materially different from the total
    carrying value.


                                           AFFIN FUND MANAGEMENT BERHAD 13                             14 AFFIN FUND MANAGEMENT BERHAD
                                                A F F IN IS L A M IC E Q U IT Y F UN D            A F F IN IS L A M IC E Q U IT Y FU N D

NOTES TO THE FINANCIAL STATEMENTS                                                                 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2009                                                   FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2009 (CONTINUED)
1    INFORMATION ON THE FUND                                                                      2     FINANCIALRISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
     Affin Islamic Equity Fund (“the Fund”), which was established under a Deed dated 27
     June 2007 and a Supplemental Deed dated 25 October 2007 (“the Deed”), between                      Stock risk
     Affin Fund Management Berhad as the Manager, Amanah Raya Berhad as the
     Trustee and the registered unitholders of the Fund.                                                Any major price fluctuations of a particular Shariah-compliant stock invested by the
                                                                                                        Fund may affect the net asset value and thus impact adversely or favourably on the
     The Fund aims to provide investors with stable returns by enabling investors to                    prices of units. This impact can, however, be minimised through the process of portfolio
     participate in the growth prospect of the Malaysian market, which is in compliance                 diversification by the Manager. The investment process will include an active asset
     with Shariah principles.                                                                           allocation strategy to mitigate the stock risk.

     Any material changes to the objective of the Fund would require unitholders’approval.              Credit risk

     On 1 November 2008, the Trustee has been changed to AmanahRaya Trustees                            Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet
     Berhad.                                                                                            a commitment that it has entered into with the Fund.
     The Manager, Affin Fund Management Berhad, a company incorporated in Malaysia,
                                                                                                        The Fund’s credit risk is minimal as all transactions in quoted Shariah-compliant
     is a wholly owned subsidiary company of Affin Investment Bank Berhad, a licensed
                                                                                                        investments are settled/paid upon delivery using approved brokers.
     investment bank incorporated in Malaysia. The principal activities of the Manager are
     the management of unit trust funds and fund management services.
                                                                                                        The effective weighted average rate of return of Shariah-based deposits per annum as
2    FINANCIALRISK MANAGEMENT OBJECTIVES AND POLICIES                                                   at the date of the statement of assets and liabilities is as follow:

     All investments will always carry an element of risk, which may lead to capital
     losses. Some of the risks can be managed while there are systematic risks that may                                                                                    2009                 2008
     not be diversifiable.                                                                                                                                                   %                    %

     The Fund is exposed to a variety of risks which include market risk, liquidity risk,               Shariah-based deposits                                        1.95                  3.15
     stock risk, credit risk, interest rate risk, business risk and reclassification of Shariah                                                                  _________
                                                                                                                                                                 _________             _________
                                                                                                                                                                                       _________
     status risk.
                                                                                                        Shariah-based deposits have an average maturity of less than 1 year (2008: 1 year).
     To mitigate the key risks, the Fund Manager researches on the economy and
     monetary policy and manage duration risks by measuring modified duration of the                    The following table sets out the credit risk concentrations and counterparties of the Fund.
     papers to ensure it is consistent with the debt/sukuk market outlook.
                                                                                                                                                                   Profit
     Financial risk management is carried out through internal control processes
                                                                                                                                                        receivable from
     adopted by the Manager and adherence to the investment restrictions as stipulated
                                                                                                                            Shariah-                           Shariah-
     by the SC Guidelines on Unit Trust Funds.
                                                                                                                 Quoted        based                              based
     Market risk                                                                                                Shariah- deposits            Cash              deposits Amount
                                                                                                               compliant          with        and                    with    due
     The purchase of Shariah-compliant equities represents a risk since the prices of                       investments financial            bankDividends financial from                 Tax
     Shariah-compliant stocks underlying the net asset value of the fund fluctuate in                             - local institutions   balances receivable institutions brokers recoverable          Total
     response to many factors. Therefore, Shariah-compliant stock values fluctuate in                                RM            RM         RM         RM          RM      RM          RM             RM
     response to the activities of individual companies, and general market or economic           As at December 2009
     conditions. Such movements in the underlying values of the Shariah-compliant
     shares of the investment portfolio will cause the net asset value or process of units        Consumer
     to fall as well as rise, and income produces by the Fund may also fluctuate. The               products 14,587,636              -         -          -           -           -        - 14,587,636
     Manager will take necessary steps to manage this risk by having a well-diversified           Construction10,693,147             -         -     22,003           -           -        - 10,715,150
     portfolio.                                                                                   Finance                 - 20,536,375 2,984,267          -       2,992           -        - 23,523,634
                                                                                                  Industrial
     Liquidity risk                                                                                 products 19,294,925              -         -     13,498            -          -        -    19,308,423
     Liquidity refers to the ease of converting a Shariah-compliant investment into cash          Infrastructure 4,987,116           -         -    170,325            -          -        -     5,157,441
     without incurring an overly significant loss in value. If a unit trust fund has a large      Plantation 20,553,068              -         -          -            -          -        -    20,553,068
     portfolio of Shariah-compliant stocks issued by smaller companies, the relatively            Properties 12,296,246              -         -          -            -          -        -    12,296,246
     less liquid nature of those Shariah-compliant stocks can cause the value of the fund         Trading and
     to drop; this is because there are generally less ready buyers of such Shariah-                services 49,726,852              -         -    214,081       -    -        - 49,940,933
     compliant stocks as compared with the Shariah-compliant stocks of large and more             Others                  -          -         -          -       -    - 301,676     301,676
     established companies. This risk is managed by taking greater care in Shariah-                             __________________________         _______ _______ _____ ________ _________
                                                                                                                32,138,      0,              267
                                                                                                               1______990 2__536,375 2,984,___      419,907   2,       - 301,
                                                                                                                                                   _______ ____992 _____ _____676156,384,207
     compliant stock selection and diversification.                                                             __________________________
                                                                                                                        ____ ___________           _______ _______ _____ ________ _________
                                                                                                                                                                ___           ___ _________

                                           AFFIN FUND MANAGEMENT BERHAD 15                            16 AFFIN FUND MANAGEMENT BERHAD
                                                        A F F IN IS L A M IC E Q U IT Y F UN D                A F F IN IS L A M IC E Q U IT Y FU N D

NOTES TO THE FINANCIALSTATEMENTS                                                                              NOTES TO THE FINANCIALSTATEMENTS
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)                                                    FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)

2      FINANCIALRISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)                                           2       FINANCIALRISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

      Credit risk(continued)                                                                                          Interest rate risk (continued)
                                                                    Profit
                                                                                                                      As at the date of the statement of assets and liabilities, the net asset value of the Fund
                                                         receivable from                                              can be analysed into investment exposed to interest rate movement and non-
                             Shariah-                           Shariah-                                              exposure to interest rate movement, as follows:
                Quoted           based                             based
               Shariah-      deposits         Cash              deposits Amount                                                                                            Exposed to Interest Rate
              compliant            with        and                    with     due                                                                                                                            Non-
           investments        financial       bankDividends financial from                 Tax                                                                                                           exposure
                                                                                                                                                                                              (Maturity to Interest
                 - local   institutions   balances receivable institutions brokers recoverable        Total                           (Maturity up (Maturity (Maturity (Maturity (Maturity         over       Rate
                    RM              RM         RM         RM          RM      RM          RM           RM                                to 1year) 1-2 years) 2-3 years) 3-4 years) 4-5 years) 5 years) movement          Total
As at 31 December 2008                                                                                                                        RM         RM         RM         RM         RM        RM          RM         RM

Consumer                                                                                                      As at 31 December 2009
  products     9,141,905          -         -         91,960          -         -           - 9,233,865
Construction 4,452,800            -         -          7,970          -         -           - 4,460,770       Financial assets
Finance                - 25,937,276 204,524                -     19,350         -           - 26,161,150      Quoted
Industrial                                                                                                     Shariah-compliant
  products 14,380,007             -         -         35,547            -       -           -    14,415,554    Investments                -      -       -       -       -     - 132,138,990 132,138,990
Infrastructure 4,950,780          -         -              -            -       -           -     4,950,780   Shariah-based
Plantation 16,220,675             -         -        110,650            -       -           -    16,331,325    deposits          20,536,375      -       -       -       -     -           - 20,536,375
                                                                                                              Cash and bank
Properties 5,883,245              -         -         68,047            -       -           -     5,951,292    balances                   -      -       -       -       -     - 2,984,267 2,984,267
Trading and                                                                                                   Receivables                 -      -       -       -       -     -     724,575     724,575
  services 31,012,403             -         -         80,870      -     -        - 31,093,273                                    _________ _______ _______ _______ _______ _______________ __________
Others                 -          -         -              -      -     - 351,165      351,165
                                                                                                              Total financial
              __________________________            _______ _______ _____ ________ _________                   assets                 20,536,375            -          -           -        -       - 135,847,832 156,384,207
              86 ,        5,
              __,041_815 2__937,276 _204,___
              __________________________
                ___ ____ _______ ___
                                         524        _______ ____350 _____ _____165 11_____174
                                                     395,044 19,
                                                                ___
                                                                        - 351,
                                                                               ___ _
                                                                                     2,949,
                                                    _______ _______ _____ ________ _________
                                                                                           ___
                                                                                                              Financial liabilities
      Interest rate risk                                                                                      Amount due to
                                                                                                               Manager                          -           -          -           -        -       -    (191,813)    (191,813)
      Interest rate is a general economic indicator that will have an impact on the                           Amount due to
      management of the fund regardless of whether it is a Shariah-based fund or otherwise.                    Trustee                          -           -          -           -        -       -     (10,230)     (10,230)
                                                                                                              Amount due to
      The reason for this is because a high level of interest rates will inevitably affect                     Stockbrokers                     -           -          -           -        -       - (4,374,820) (4,374,820)
      corporate profits and this will have an impact on the value of Shariah-compliant equity                 Payables and
      and the demand for sukuk.                                                                                accruals                        -      -       -       -       -     - (140,789) (140,789)
                                                                                                                                      _________ _______ _______ _______ _______ _______________ __________
      It does not in any way suggest that this Fund will invest in conventional financial                                             20,536,375      -       -       -       -     - 131,130,180 151,666,555
                                                                                                                                      _________ _______ _______ _______ _______ _______________ __________
                                                                                                                                      _________ _______ _______ _______ _______ _______________ __________
      instruments. All the investments carried out for this Fund are in accordance with
      Shariah requirements.




                                                   AFFIN FUND MANAGEMENT BERHAD 17                                18 AFFIN FUND MANAGEMENT BERHAD
                                                             A F F IN IS L A M IC E Q U IT Y F UN D                    A F F IN IS L A M IC E Q U IT Y FU N D

NOTES TO THE FINANCIALSTATEMENTS                                                                                       NOTES TO THE FINANCIALSTATEMENTS
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)                                                             FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)

2       FINANCIALRISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)                                                   2     FINANCIALRISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

        Interest rate risk (continued)                                                                                       Reclassification of Shariah Status Risk
                                                                                                                             The risk that the currently held Shariah-compliant securities in the portfolio of Shariah-
                                                                                                                             based funds may be reclassified to be Shariah non-compliant upon review of the
                                                           Exposed to Interest Rate                                          securities by the Shariah Advisory Council of the Securities Commission performed
                                                                                                Non-                         twice yearly. If this occurs, the value of the fund may be adversely affected where the
                                                                                           exposure                          Manager will take the necessary steps to dispose of such securities.
                                                                                (Maturity to Interest
                        (Maturity up (Maturity (Maturity (Maturity (Maturity         over       Rate
                           to 1year) 1-2 years) 2-3 years) 3-4 years) 4-5 years) 5 years) movement             Total   3     NET ASSETS ATTRIBUTABLE TO UNITHOLDERS
                               RM         RM         RM        RM          RM       RM           RM             RM
                                                                                                                             In accordance with the provisions of the Fund’s Deed, listed investments and
                                                                                                                             investments with prices quoted in over the counter markets or by market makers are
As at 31 December 2008
                                                                                                                             stated at the last traded price on the valuation date for the purpose of determining the
Financial assets                                                                                                             net asset value per unit for creations and cancellations and for various fee calculation.
                                                                                                                             Net assets attributable to unitholders represent a liability in the balance sheet, carried
Quoted                                                                                                                       at the redemption amount that would be payable at the balance sheet date if the
 Shariah-compliant                                                                                                           unitholder exercised the right to redeem unit of the Fund.
 investments               -      -       -       -       -      - 86,041,815                            86,041,815
Shariah-based
 deposits          25,937,276     -       -       -       -      -          -                            25,937,276    4     NET REALISED GAINS ON SALES OF SHARIAH-COMPLIANT INVESTMENTS
Cash and bank
 balances                  -      -       -       -       -      -    204,524                               204,524                                                                       2009                 2008
Receivables                -      -       -       -       -      -    765,559                               765,559                                                                        RM                   RM
                   ________ _______ _______ _______ _______ ______ _________                            __________
Total financial                                                                                                              Realised gain on sale of Shariah-compliant
 assets            25,937,276     -       -       -       -      - 87,011,898                           112,949,174           investments                                            5,796,763                   -
                                                                                                                                                                                     ________             ________
Financial liabilities                                                                                                                                                                5,796,763                   -
                                                                                                                                                                                     ________
                                                                                                                                                                                     ________             ________
                                                                                                                                                                                                          ________
Amount due to
 Manager                         -          -          -         -          -        -    (151,658)       (151,658)
Amount due to                                                                                                          5     MANAGEMENT FEE
 Trustee                         -          -          -         -          -        -      (8,088)         (8,088)
Payables and                                                                                                                 In accordance with the Deed, the Manager is entitled to a management fee at a rate
 accruals                       -      -       -       -       -      - (242,035)    (242,035)                               of 1.5% per annum of the gross net asset value of the Fund, calculated on a daily
                        ________ _______ _______ _______ _______ ______ _________ __________                                 basis for the current year (2008: 1.5%). For the Financial Period Ended 31 December
                        25,937,276     -       -       -       -      - 86,610,117 112,547,393                               2009, the management fee is recognised at a rate of 1.5% (2008: 1.5%) per annum.
                        ________ _______ _______ _______ _______ ______ _________ __________
                        ________ _______ _______ _______ _______ ______ _________ __________
                                                                                                                       6     TRUSTEE’S FEE
        Business risk
                                                                                                                             In accordance with the Deed, the Trustee is entitled to a fee of 0.08% per annum,
        Business risk of emerging companies with a short track record tends to be higher than                                calculated daily based on the gross net asset value of the Fund for the current year
        matured and well-established companies. The Fund gives preference to invest in                                       (2008: 0.08%). For the Financial Period Ended 31 December 2009, the Trustee’s fee
        companies with a reasonable track record compared to new companies.                                                  is recognised at a rate of 0.08% (2008: 0.08%) per annum.
        The Manager can manage the market cycles and short-term fluctuations by virtue of
        its experience, the analytical process adopted by its Fund Manager, and by                                     7     ADMINISTRATION EXPENSES
        constructing a diversified investment portfolio.
                                                                                                                             Administration expenses comprise registration charges, unitholders’correspondence
        Redemption and subscription of units are important in the day-to-day management of                                   charges (e.g. postages, envelopes, etc.), printing, bank charges and other
        the Fund. Liquidity is monitored everyday to ensure the Fund is not affected                                         miscellaneous expenses.
        especially by unexpected redemption.
                                                                                                                       8     FINANCE COST - DISTRIBUTION
        The compliance unit is in place to ensure no breaches in investment limits. If there is
        any breach, the compliance unit can quickly notify the Fund Manager to take                                          There has been no income distribution made for the period ended 31 December 2009.
        corrective action.

        In managing the Fund, the Manager has established policies and procedures outlining
        the internal control mechanism, reporting responsibilities and internal audit and
        compliance function.

        The performance and investment activities of the Fund are regularly reviewed by the
        Investment Committee and the Board of Directors of the Manager.




                                                       AFFIN FUND MANAGEMENT BERHAD 19                                     20 AFFIN FUND MANAGEMENT BERHAD
                                         A F F IN IS L A M IC E Q U IT Y F UN D        A F F IN IS L A M IC E Q U IT Y FU N D

NOTES TO THE FINANCIALSTATEMENTS                                                       NOTES TO THE FINANCIALSTATEMENTS
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)                             FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)

9    TAXATION                                                                          10     QUOTED SHARIAH-COMPLIANT INVESTMENTS (CONTINUED)
                                                         2009                2008
                                                          RM                  RM                                                              Aggregate          Market value
                                                                                              Name of counter                     Quantity         cost     as at 31.12.2009
     Current taxation                                       -
                                                    _________                  -
                                                                       _________                                                                                   % of value
                                                    _________          _________
                                                                                                                                                                        of the
                                                                                                                                                     RM        RM       Fund
10   QUOTED SHARIAH-COMPLIANT INVESTMENTS
                                                                                              PROPERTIES
                                                                                              Eastern & Oriental Bhd             2,395,600 3,154,511 2,515,380           1.66
                                                  Aggregate            Market value
                                                                                              IJM Land Bhd                       1,173,300 3,072,409 2,757,255           1.82
     Name of counter                   Quantity        cost       as at 31.12.2009
                                                                                              SPSetia Bhd                          608,450 3,049,921 2,385,124           1.57
                                                                         % of value
                                                                                              Sunrise Bhd                          521,400 1,192,351 1,074,084           0.71
                                                                              of the
                                                                                              YNH Property Bhd                   2,329,675 4,359,728 3,564,403           2.35
                                                       RM            RM       Fund
                                                                                                                                 ________ ________ ________           ______
     CONSUMER PRODUCTS
                                                                                                                                 7,028,425 14,828,920 12,296,246
                                                                                                                                 ________ ________ ________              8.11
                                                                                                                                                                      ______
     QLResources Bhd                 1,194,300 4,454,253 4,633,884             3.06
     Tan Chong Motor Holdings Bhd    1,562,100 3,979,794 4,873,752             3.21           TRADING AND SERVICES
     UMW Holdings Bhd                  800,000 5,202,947 5,080,000             3.35           Alam Maritim Resources Bhd        1,337,050 2,705,969 2,513,654            1.66
                                     ________ ________ ________             ______            Axiata Group Bhd                    978,600 3,073,111 2,984,730            1.97
                                     3,556,400 13,636,994 14,587,636
                                     ________ ________ ________                9.62
                                                                            ______            Bintulu Port Holdings Bhd           815,300 5,365,923 5,299,450            3.49
                                                                                              Malaysian Bulk Carriers Bhd       2,087,200 7,599,909 6,720,784            4.43
     CONSTRUCTION
                                                                                              Maxis Bhd                         1,012,600 5,431,165 5,437,662            3.58
     Gamuda Bhd                           337,100 1,621,106     876,460        0.58
                                                                                              MMC Corporation Bhd               2,113,700 6,731,481 5,136,291            3.39
     Malaysia Resources Corporation Bhd 969,400 2,589,841 1,328,078            0.88
                                                                                              NCB Holdings Bhd                  1,561,200 4,653,644 4,855,332            3.20
     Ranhill Bhd                          583,100 1,497,413     486,888        0.32
                                                                                              Parkson Holdings Bhd                571,100 3,018,230 3,032,541            2.00
     WCTEngineering Bhd                 1,979,300 5,185,889 5,146,180          3.39
                                                                                              Petronas Dagangan Bhd               491,700 3,922,704 4,277,790            2.82
     YTLCorporation Bhd                   391,170 2,649,259 2,855,541          1.88
                                                                                              Sime Darby Bhd                      334,600 3,049,511 3,001,362            1.98
                                        ________ ________ ________          ______
                                                                                              Swee Joo Bhd                      1,764,600 2,596,908 1,058,760            0.70
                                        4,260,070 13,543,508 10,693,147
                                        ________ ________ ________             7.05
                                                                            ______            Telekom Malaysia Bhd              1,001,600 3,034,102 3,064,896            2.02
     INDUSTRIAL                                                                               Tenaga Nasional Bhd                 279,000 2,825,151 2,343,600            1.54
     Ann Joo Resources Bhd              1,064,800 2,926,826 2,981,440          1.97                                             ________ ________ ________            ______
     Boustead Heavy Industries                                                                                                 14,348,250 54,007,808 49,726,852
                                                                                                                                ________ ________ ________              32.78
                                                                                                                                                                      ______
      Corporation Bhd                     957,300 4,453,770 4,882,230          3.22
     CB Industrial Product Holding Bhd 1,438,900 5,569,867 4,201,588           2.77           Total quoted Shariah-compliant
     Chemical Company of Malaysia Bhd1,425,700 4,242,669 3,250,596             2.14            investments                     44,183,431148,910,034 132,138,990   87.12
     KNM Group Bhd                      5,167,625 8,339,465 3,979,071          2.62                                            _________
                                                                                                                               _________             __________ _______
                                                                                                                                                     __________ _______
                                        ________ ________ ________          ______
                                       10,054,325 25,532,597 19,294,925
                                        ________ ________ ________            12.72
                                                                            ______            Fair value reserve                             (16,771,044)
                                                                                                                                              _________
     INFRASTRUCTURE                                                                           Market value of quoted Shariah-compliant
     Digi.Com Bhd                      227,100    5,188,815     4,987,116      3.29            investments - Local                           132,138,990
                                     ________     ________      ________    ______                                                           _________
                                                                                                                                             _________
     PLANTATION
     Genting Plantations Bhd         1,210,000 7,752,773 7,550,400             4.98
     IOI Corporation Bhd             1,968,661 11,875,842 10,768,576           7.10
     TH Plantation Bhd               1,530,200 2,542,777 2,234,092             1.47
                                     ________ ________ ________             ______
                                     4,708,861 22,171,392 20,553,068
                                     ________ ________ ________               13.55
                                                                            ______




                                     AFFIN FUND MANAGEMENT BERHAD 21                        22 AFFIN FUND MANAGEMENT BERHAD
                                        A F F IN IS L A M IC E Q U IT Y F UN D      A F F IN IS L A M IC E Q U IT Y FU N D

NOTES TO THE FINANCIALSTATEMENTS                                                    NOTES TO THE FINANCIALSTATEMENTS
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)                          FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)

10   QUOTED SHARIAH-COMPLIANT INVESTMENTS (CONTINUED)                               10     QUOTED SHARIAH-COMPLIANT INVESTMENTS (CONTINUED)

                                                 Aggregate          Market value                                                            Aggregate           Market value
     Name of counter                  Quantity        cost     as at 31.12.2008            Name of counter                     Quantity          cost       as at 31.12.2008
                                                                      % of value                                                                                  % of value
                                                                           of the                                                                                      of the
                                                      RM          RM       Fund                                                                     RM         RM       Fund
     CONSUMER PRODUCTS                                                                     TRADING AND SERVICES
     PPB Group Bhd                     636,400 5,993,560     5,918,520     5.26            Alam Maritim Resources Bhd         1,337,050  2,705,969          835,656   0.74
     UMW Holdings Bhd                  625,900 4,130,900     3,223,385     2.86            Bintulu Port Holdings Bhd            815,300 5,365,923         4,647,210   4.13
                                     ________ ________       ________    ______            Malaysian Bulk Carriers Bhd        2,087,200  7,599,909        4,988,408   4.43
                                     1,262,300 10,124,460
                                     ________ ________       9,141,905
                                                             ________      8.12
                                                                         ______            Malaysia Mining Corporation Bhd    2,113,700 6,731,481         2,198,248   1.95
     CONSTRUCTION                                                                          NCB Holdings Bhd                   1,561,200  4,653,644        3,637,596   3.23
     Gamuda Bhd                          337,100 1,621,106     637,119     0.57            Petronas Dagangan Bhd                834,200  6,655,114        6,006,240   5.34
     Malaysia Resources Corporation Bhd 969,400 2,589,841      683,427     0.61            Sapuracrest Petroleum Bhd          1,808,100  3,401,390        1,374,156   1.22
     Ranhill Bhd                         583,100 1,497,413     428,579     0.38            Sime Darby Bhd                       896,836 6,901,984         4,663,547   4.14
     YTLCorporation Bhd                  383,500 2,649,259 2,703,675       2.40            Swee Joo Bhd                       1,764,600  2,596,908          917,592   0.82
                                       ________ ________ ________        ______            Tenaga Nasional Bhd                  279,000 2,825,151         1,743,750   1.55
                                       2,273,100 8,357,619 4,452,800       3.96                                              _________ _________         _________ _______
                                       ________ ________ ________        ______
                                                                                                                             13,497,186 49,437,473
                                                                                                                             _________ _________         31,012,403  27.55
                                                                                                                                                         _________ _______
     INDUSTRIAL
     Boustead Heavy Industries
                                                                                           Total quoted Shariah-compliant
      Corporation Bhd                    766,800 2,903,130 2,185,380        1.94
                                                                                            investments                      38,323,421 140,353,850      86,041,815  76.45
     CB Industrial Product Holding Bhd 1,438,900 5,569,867 2,446,130        2.18                                             _________                   _________ _______
     Chemical Company of Malaysia Bhd1,425,700 4,242,669 3,136,540          2.79                                             _________                   _________ _______
     Coastal Contracts Bhd             2,741,300 5,127,995 2,535,703        2.25
     KNM Group Bhd                     5,167,625 8,339,465 2,092,888        1.86           Fair value reserve                             (54,312,035)
                                                                                                                                           _________
     Wah Seong Corporation Bhd         1,993,333 3,962,013 1,983,366        1.76           Market value of quoted Shariah-compliant
                                       ________ ________ ________        ______             investments - Local                            86,041,815
                                                                                                                                          _________
                                                                                                                                          _________
                                      13,533,658 30,145,139 14,380,007
                                       ________ ________ ________          12.78
                                                                         ______
                                                                                    11     CASH AND CASH EQUIVALENTS
     INFRASTRUCTURE
     Digi.Com Bhd                     227,100
                                     ________    5,188,816
                                                 ________    4,950,780
                                                             ________      4.40
                                                                         ______                                                            2009            2008
                                                                                                                                            RM              RM
     PLANTATION
                                                                                           Shariah-based deposits:
     Asiatic Development Bhd         1,210,000 7,752,773 4,283,400          3.80
                                                                                           - Licensed Islamic bank                    20,536,375     25,937,276
     IOI Corporation Bhd             1,398,260 7,079,641 4,977,806          4.42                                                      _________      _________
     Kuala Lumpur Kepong Bhd           585,100 7,630,074 5,207,390          4.63
                                                                                                                                      20,536,375     25,937,276
     TH Plantation Bhd                 765,100 2,542,777 1,752,079          1.56
                                                                                           Cash and bank balances:
                                     ________ ________ ________          ______
                                                                                           - Local                                     2,984,267        204,524
                                     3,958,460 25,005,265 16,220,675
                                     ________ ________ ________            14.41
                                                                         ______                                                       _________      _________
     PROPERTIES                                                                                                                        23,520,642    26,141,800
     IOI Properties Bhd                745,600 4,685,429     1,491,200     1.32                                                       _________      _________
                                                                                                                                      _________      _________
     SPSetia Bhd                       608,450 3,049,921     1,886,195     1.68
     YNH Property Bhd                2,217,567 4,359,728     2,505,850     2.23            The effective weighted average rates of return for Shariah-based deposits are
                                     ________ ________       ________    ______            presented in Note 2 to the financial statements.
                                     3,571,617 12,095,078
                                     ________ ________       5,883,245
                                                             ________      5.23
                                                                         ______




                                    AFFIN FUND MANAGEMENT BERHAD 23                      24 AFFIN FUND MANAGEMENT BERHAD
                                                A F F IN IS L A M IC E Q U IT Y F UN D           A F F IN IS L A M IC E Q U IT Y FU N D

NOTES TO THE FINANCIALSTATEMENTS                                                                 NOTES TO THE FINANCIALSTATEMENTS
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)                                       FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)

12   RECEIVABLES                                                                                 16     TRANSACTIONS WITH BROKERS/DEALERS
                                                           2009              2008
                                                            RM                RM                        Details of transactions with all brokers/dealers, by value of trades, are as follows:

     Profit and hibah receivable                       2,992              19,350                                                                                                     Percentage
     Dividends receivable                            419,907             395,044                                                                  Value Percentage         Brokerage    of total
     Tax recoverable                                 301,676             351,165                        Name of brokers/dealers                 of trade of total trades        fees brokerage
                                                   _________           _________                                                                     RM               %          RM           %
                                                     724,575
                                                   _________             765,559
                                                                       _________                        2009
                                                   _________           _________

13   SHARIAH INFORMATION OF THE FUND                                                                    AmIslamic Bank Bhd                 252,815,600           31.92              -           -
                                                                                                        Bank Islam Malaysia Bhd            141,534,889           17.87              -           -
     The Shariah Adviser confirmed that the investments portfolio of the Fund is                        Asian Finance Bank Bhd             137,769,646           17.40              -           -
     Shariah-compliant, which comprises:                                                                Affin Islamic Bank Bhd*            108,648,971           13.72
                                                                                                        Affin Investment Bank Bhd*          71,910,599            9.08       177,883      47.26
     a) Equity securities listed in Bursa Malaysia which have been classified as Shariah-               OSK Investment Bank Bhd             19,443,301            2.45        48,612      12.91
        compliant by the Shariah Advisory Council of the Securities Commission; and                     Maybank Investment Bank Bhd         16,516,173            2.09        38,875      10.33
                                                                                                        ECM Libra Avenue Securities
     b) Cash placements and liquid assets in local market, which are placed in Shariah-                  Sdn Bhd                            14,210,298           1.79         35,537       9.44
        compliant investments and/or instruments.                                                       RHB Investment Bank Bhd             12,039,378           1.52         30,099       8.00
                                                                                                        Kenanga Investment Bank Bhd         10,907,235           1.38         27,268       7.24
14   PAYABLES AND ACCRUALS                                                                              Others                               6,169,219           0.78         18,146       4.82
                                                                                                                                          ___________       ________       ________     ______
                                                        2009                 2008                                                          791,965,309        100.00         376,420     100.00
                                                                                                                                          ___________
                                                                                                                                          ___________       ________
                                                                                                                                                            ________       ________
                                                                                                                                                                           ________     ______
                                                                                                                                                                                        ______
                                                         RM                   RM
     Tax agent’s fee                                   5,000                4,600
     Other payables and accruals                     135,789              237,435                                                                                                    Percentage
                                                   _________            _________                                                                 Value Percentage         Brokerage    of total
                                                     140,789              242,035                       Name of brokers/dealers                 of trade of total trades        fees brokerage
                                                   _________
                                                   _________            _________
                                                                        _________                                                                    RM               %          RM           %
                                                                                                        2008
15   NUMBER OF UNITS IN CIRCULATION AND NET ASSETS ATTRIBUTABLE TO
     UNITHOLDERS                                                                                        Affin Investment Bank Bhd            13,475,475          39.06        33,637      39.08
                                                                                                        Aseambankers Malaysia Bhd             3,904,514          11.32         9,759      11.34
                                                             .2009                       2008           CIMB Investment Bank Bhd              2,775,550           8.05         6,917       8.04
                                        No. of units           RM No. of units            RM            ECM Libra Avenue Securities
                                                                                                         Sdn Bhd                             4,540,817          13.16         11,323      13.15
     At beginning of the financial                                                                      Kenanga Investment Bank Bhd          1,652,706           4.79          4,118       4.78
      year/date of commencement 342,340,270             132,249,252 363,761,270 155,511,725             OSK Investment Bank Bhd              3,858,662          11.18          9,628      11.19
     Creation of units during the                                                                       RHB Investment Bank Bhd              4,292,158          12.44        10,695       12.42
      financial year/period               22,772,080      9,333,714             -            -                                            ___________       ________       ________     ______
     Release of units during the                                                                                                            34,499,882        100.00         86,077      100.00
                                                                                                                                          ___________
                                                                                                                                          ___________       ________
                                                                                                                                                            ________       ________
                                                                                                                                                                           ________     ______
                                                                                                                                                                                        ______
      financial year/period               (8,690,000)   (3,675,246) (9,271,000) (3,253,592)
     Net (decrease)/increase in net
      assets attributable to unitholders            -     6,802,515             - 1,263,542             * Included in transactions with brokers/dealers are trades and Islamic money market
     Net change in fair value reserve               -     6,956,320             - (40,974,282)          placements conducted on normal terms in the stockbroking and banking industry with
                                        __________      __________    __________ _________              Affin Islamic Bank Berhad and Affin Investment Bank Berhad, companies related to
     At end of the financial year/period 356,422,350    151,666,555   354,490,270 112,547,393           the Manager amounting to RM108,648,971 (2008: RM Nil) and RM71,910,599
                                        __________
                                        __________      __________
                                                        __________    __________ _________
                                                                      __________ _________              (2008: RM 13,475,475) respectively.

     Approved size of Fund            600,000,000                     600,000,000
                                      __________
                                      __________                       _________
                                                                       _________

     In accordance with Clause 3 (2) of the Deed dated 27 June 2007, the maximum
     number of units that can be issued out for circulation is 600,000,000. As at 31
     December 2009, the number of units not yet issued is 243,577,650 (2008:
     245,509,730).



                                           AFFIN FUND MANAGEMENT BERHAD 25                            26 AFFIN FUND MANAGEMENT BERHAD
                                                  A F F IN IS L A M IC E Q U IT Y F UN D      A F F IN IS L A M IC E Q U IT Y FU N D

NOTES TO THE FINANCIALSTATEMENTS                                                              NOTES TO THE FINANCIALSTATEMENTS
FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)                                    FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2009 (CONTINUED)

17   UNITS HELD BYTHE MANAGER AND PARTIES RELATED TO THE MANAGER                              18     MANAGEMENT EXPENSE RATIO (“MER”)
     The related party of and its relationship with the Fund are as follows:                                                                            2009             2008
                                                                                                                                                          %                %
     Related parties                                Relationship

     Affin Fund Management Berhad                   The Manager                                      MER                                              0.80
                                                                                                                                                 _________             0.80
                                                                                                                                                                  _________
                                                                                                                                                 _________        _________
     Affin Investment Bank Berhad                   Holding company of the Manager
                                                                                                     MER is derived from the following calculation:
     Affin Holdings Berhad (“AHB”)                  Ultimate holding company of the Manager

     Subsidiaries and associates of AHB as Subsidiary and associated companies of                    MER     =        (A+ B + C + D + E) x 100
                                                                                                                      ________________
      disclosed in its financial statements the ultimate holding company of the                                              F
                                            Manager
                                                                                                     A       =        Management fee
     Units held by the Manager and parties related to the Manager                                    B       =        Trustee’s and custodian fees
                                                                                                     C       =        Auditors’remuneration
                                                                                                     D       =        Tax agent’s fee
                                                                                                     E       =        Administration expenses
                                                           31.12.2009            31.12.2008
                                                                                                     F       =        Average net asset value of the Fund calculated on daily basis
                                            No. of units          RM No. of units        RM

     Affin Fund Management Berhad                                                                    The average net asset value of the Fund for the financial year calculated on daily
     (The units are held beneficially for                                                            basis is RM148,662,068 ( 2008: RM131,864,566)
     booking purposes)                       2,991,886 1,265,410       2,416,780   767,328
                                            __________________
                                            __________________        _________ _________
                                                                      _________ _________
                                                                                              19     PORTFOLIO TURNOVER RATIO (“PTR”)

     Significant related party balances                                                                                                                 2009             2008
                                                                            2009      2008
                                                                             RM        RM            PTR (times)                                      0.51              0.17
                                                                                                                                                 _________
                                                                                                                                                 _________         _________
                                                                                                                                                                   _________
     Cash and bank balances:
     - Affin Islamic Bank Berhad                                       2,984,267  204,524            PTR is derived from the following calculation:
                                                                      _________ _________
                                                                      _________ _________
                                                                                                     (Total acquisition for the financial year + total disposal for the financial year) ÷2
     Shariah-based deposits:                                                                         Average net asset value of the Fund for the financial year calculated on daily basis
     - Affin Islamic Bank Berhad                                       9,753,849 7,130,411
                                                                      _________ _________
                                                                      _________ _________            where: total acquisition for the financial year = RM80,428,734 (2008: RM45,915,002)
                                                                                                            total disposal for the financial year = RM70,805,825 (2008: Nil)
     Significant related party transactions

     Profit and hibah from Shariah-based deposits:                                            20     SEGMENT INFORMATION
     - Affin Islamic Bank Berhad                                          55,841   244,510
                                                                       _________ _________
                                                                       _________ _________           The Fund operates solely in the business of investment management within
                                                                                                     Malaysia. Segmental information has been disclosed in Note 10 to the financial
                                                                                                     statements by virtue of disclosing the investments undertaken by the Fund by
                                                                                                     industry sectors. Segment income has been disclosed in the income statement.


                                                                                              21     INTERIM FINANCIALSTATEMENT ARE UNAUDITED

                                                                                                     The interim financial statements for the six months ended 31 December 2009 and
                                                                                                     31 December 2008 are unaudited.




                                             AFFIN FUND MANAGEMENT BERHAD 27                       28 AFFIN FUND MANAGEMENT BERHAD
                                                A F F IN IS L A M IC E Q U IT Y F UN D           A F F IN IS L A M IC E Q U IT Y FU N D

STATEMENT BYTHE MANAGER                                                                          TRUSTEE’S REPORT
                                                                                                 FOR THE SIX MONTHS FINANCIALPERIOD ENDED 31 DECEMBER 2009
We, Admiral Tan Sri Dato’Seri Abu Bakar Bin Abdul Jamal (R) and Mohamad Ayob Bin Abu
Hassan, being two of the directors of Affin Fund Management Berhad, do hereby state that,        To the Unit Holders of
in the opinion of the Manager, the accompanying financial statements set out on pages 7 to       AFFIN ISLAMIC EQUITYFUND
28 are drawn up in accordance with the provisions of the Deed and give a true and fair view
of the financial position of the Fund as of 31 December 2009 and of its financial performance,   We, AmanahRaya Trustees Berhad, have acted as Trustee of AFFIN ISLAMIC EQUITY
changes in net assets attributable to unitholders and cash flows of the Fund for the financial   FUND for the six months financial period ended 31 December 2009. In our opinion, AFFIN
year then ended in accordance with Financial Reporting Standards in Malaysia and the             FUND MANAGEMENT BERHAD, the Manager, has managed AFFIN ISLAMIC EQUITY
Securities Commission’s Guidelines on Unit Trust Funds.                                          FUND in accordance with the limitations imposed on the investment powers of the
                                                                                                 management company and the Trustee under the Deed, other provisions of the Deed, the
                                                                                                 applicable Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 and
For and on behalf of the Manager,                                                                other applicable laws for the six months financial period ended 31 December 2009.
AFFIN FUND MANAGEMENT BERHAD
                                                                                                 We are of the opinion that:

                                                                                                 (a)     the procedures and processes employed by the Manager to value and/or price the
                                                                                                         units of AFFIN ISLAMIC EQUITYFUND are adequate and that such valuation/pricing
                                                                                                         is carried out in accordance with the Deed and other regulatory requirement; and

                                                                                                 (b)     creation and cancellation of units are carried out in accordance with the Deed and any
ADMIRAL TAN SRI DATO’SERI                                                                                other regulatory requirement.
 ABU BAKAR BIN ABDULJAMAL(R)
Director

                                                                                                 Yours faithfully
                                                                                                 AMANAHRAYA TRUSTEES BERHAD




MOHAMAD AYOB BIN ABU HASSAN
Director
                                                                                                 HABSAH BINTI BAKAR
                                                                                                 Chief Executive Officer


Kuala Lumpur                                                                                     Kuala Lumpur




                                           AFFIN FUND MANAGEMENT BERHAD 29                             30 AFFIN FUND MANAGEMENT BERHAD
                                               A F F IN IS L A M IC E Q U IT Y F UN D          A F F IN IS L A M IC E Q U IT Y FU N D

SHARIAH ADVISER’S REPORT TO THE UNIT HOLDERS OF                                                SHARIAH ADVISER’S REPORT TO THE UNIT HOLDERS OF
AFFIN ISLAMIC EQUITYFUND                                                                       AFFIN ISLAMIC EQUITYFUND

We have acted as the Shariah Adviser of AFFIN ISLAMIC EQUITYFUND. Our responsibility           We have acted as the Shariah Adviser of AFFIN ISLAMIC EQUITYFUND. Our responsibility
is to ensure that the procedures and processes employed by AFFIN FUND MANAGEMENT               is to ensure that the procedures and processes employed byAFFIN FUND MANAGEMENT
BERHADand that the provisions of the Deed dated 27 June 2007 and a Supplemental Deed           BERHAD and that the provisions of the Deed dated 27 June 2007 and a Supplemental Deed
dated 25 October 2007 are in accordance with Shariah principles.                               dated 25 October 2007 are in accordance with Shariah principles.

In our opinion, AFFIN FUND MANAGEMENT BERHAD has managed and administered                      In our opinion, AFFIN FUND MANAGEMENT BERHAD has managed and administered
AFFIN ISLAMIC EQUITYFUNDin accordance with Shariah principles and complied with the            AFFIN ISLAMIC EQUITYFUNDin accordance with Shariah principles and complied with the
applicable guidelines, rulings and decisions issued by the Securities Commission pertaining    applicable guidelines, rulings and decisions issued by the Securities Commission pertaining
to Shariah matters for the period between 1 October 2009 until 31 December 2009.               to Shariah matters for the period between 1 July 2009 until 30 September 2009.

In addition, we also confirm that the investment portfolio of AFFIN ISLAMIC EQUITYFUND         In addition, we also confirm that the investment portfolio of AFFIN ISLAMIC EQUITYFUND
comprises securities which have been classified as Shariah-compliant by the Shariah            comprises securities which have been classified as Shariah-compliant by the Shariah
Advisory Council of the Securities Commission (‘SACSC’). As for the securities which are not   Advisory Council of the Securities Commission (‘SACSC’). As for the securities which are not
certified by the SACSC, we have reviewed the said securities and opine that these securities   certified by the SACSC, we have reviewed the said securities and opine that these securities
are designated as Shariah-compliant.                                                           are designated as Shariah-compliant.

For Islamic Banking and Finance Institute Malaysia Sdn Bhd                                     For and on behalf of the Shariah Adviser Members.




MOHD NASIR ISMAIL                                                                              DR. HAILANI BIN MUJI TAHIR
Senior Shariah Fellow/Designated Person Responsible for Shariah Advisory
Kuala Lumpur



                                                                                               DR. MD KHALILBIN RUSLAN




                                                                                               Y.B. SENATOR MEJ. JEN. DATO’ HJ. JAMILKHIR BIN HJ. BAHAROM (B)
                                                                                               Kuala Lumpur




                                          AFFIN FUND MANAGEMENT BERHAD 31                        32 AFFIN FUND MANAGEMENT BERHAD

								
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