Preliminary Final Results

RNS Number : 1253L

The Family Shariah Fund Ltd

30 April 2010

THE FAMILY SHARI'AH FUND LIMITED

('Family Shari'ah Fund" or the 'Fund')

Preliminary Results for the year ended 31 December 2009

The Family Shari'ah Fund Limited, a multi-asset class fund providing investors with exposure to a variety of Shari'ah compliant investments predominantly outside of the GCC region, is pleased to announce its preliminary audited results for the year ended 31 December 2009.

These results, the financial timetable, the full investing policy and the latest monthly investment manager's report are also available on the Fund's website (www.familyshariahfund.com).

The financial statements and the notice of the AGM (which be held on 15 June 2010) will be sent to shareholders prior to 25 May 2010.

Included within these preliminary financial results is the Company's current investing policy as required by the AIM Rules and details of a potential change to the investing policy which will, although the Directors do not believe them to be material and therefore requiring Shareholder approval in accordance with the AIM Rules, be put to Shareholders at the AGM to be held on 15 June 2010.

For further information, please contact:

The Family Office	Tel: +973 (17) 221177
Richard Joye, Head of Client Service

Religare Capital Markets (Nomad and Broker)	Tel: +44 (0) 207 444 0800
James Pinner / Derek Crowhurst / Alan MacKenzie

This announcement should be read in conjunction with the Admission Document. Terms defined in the Admission Document have the same meaning when used in this announcement.

Notes to Editors

The Family Shari'ah Fund Limited is the first multi-asset class fund to gain admission to AIM and provides investors with exposure to a variety of Shari'ah Compliant investments predominantly outside of the GCC region.

The Company's investing policy, as defined by the AIM Rules, is available on the Company's website at www.familyshariahfund.com/investing_policy.html.

CHAIRMAN'S STATEMENT

FOR THE YEAR DECEMBER 31, 2009

It gives me pleasure to present the report and accounts of The Family Shariah Fund Limited (the "Fund") for the year ended December 31, 2009, being the first full accounting year of operations. During the year the Fund recorded a net profit of US$ 473,417 and the net asset value of the Fund increased from US$ 27,761,862 to US$ 28,235,279.

The year of 2009 saw major transitions in world economies and in global financial market conditions. The early part of the year saw major countries reporting the longest and largest contraction of economic activity for 60 years followed by signs of a resumption in growth as the effects of implementing massive financial stimulus packages became apparent. The impact on financial markets was evident with some recovery in equity markets although some concerns remain about the risks involved in maintaining economic growth in future.

With this background and in view of the Fund's stated objective to achieve growth over the economic cycle, which requires a long term investment perspective, it is not a surprise that the Fund's Investment Manager maintained a cautious approach to the markets. However, as confidence slowly returned during the second half of the year, the Investment Manager reduced its cash position (comprising of balance with bank and murabaha receivables) from 71.7% at December 31, 2008 to 36.8% at December 31, 2009. This decrease in cash was through an increase of investments in Islamic Income by 15.9 percentage points (11% in 2008 to 26.9% in 2009), in Public Equity by 9.4 percentage points (12.7% to 22.1%) and in Private Equity by 9.6 percentage points (4.6% to 14.2%).

Since the Fund's inception in July 2008 the dislocation in many markets has meant that implementing the investment objectives has taken longer than originally anticipated. In addition profitability has been affected by the continuing low yields on short term instruments. Nevertheless there has been significant progress in building the Fund's longer term investment profile and the Fund has made a profit in its first full year of operation. Accordingly the Fund continues to work towards its stated objectives of achieving stable capital growth for investors with a perspective over the medium to long term.

I would like to thank the shareholders for their continued support together with my fellow Directors and the members of the Shari'ah Supervisory Board for their efforts and also those teams of professionals at the Investment Manager and other firms for their continued hard work.

Peter Robinson

Chairman

Date: April 19, 2010

Manama, Kingdom of Bahrain

DIRECTORS' REPORT

DECEMBER 31, 2009

The Directors present their report and audited financial statements for The Family Shari'ah Fund Limited (the "Fund") for the year ended December 31, 2009.

Principal Activities

The principal activity of the Fund is to carry on the business of an investment company with the investment objective to provide investors with a diversified pool of Shari'ah Compliant assets and consistent risk-adjusted returns over a market cycle via an active and diversified asset allocation programme. The Fund aims at geographic diversification of investments, predominantly outside the GCC (Gulf Cooperation Council) and enhances liquidity through trading of the Fund's shares on the AIM market of the London Stock Exchange ("AIM").

Investing Policy

As required by the AIM Rules the Fund's investing policy is included in full at the end of this announcement and will be included in the financial statements which will be posted to Shareholders by 25 May 2010 and the posting of which will be announced via an RIS announcement at such time.

The Board are also recommending that, at the AGM on 15 June 2010, that a resolution is passed relating to the approval of a revised investing policy for the Company which has been proposed by The Family Office Company BSC (Closed) (the "Investment Manager") in light of the current economic climate and the Company's stated investment objective of achieving long-term capital appreciation from a Shari'ah compliant, diversified investment portfolio characterised by a moderate level of risk.

Although the Board does not consider the proposed changes to the investing policy to be material in nature (and accordingly, Shareholder consent is not required under the AIM Rules for Companies) the Board nevertheless considers it to be important that Shareholders have an opportunity to consider and approve the proposed changes. An explanation of the rationale for such changes together with a summary of the proposed changes is therefore set out below. Shareholders are reminded however that, other than in the context of the proposed changes summarised below, the provisions of the Company's Admission Document are still applicable. In particular, Shareholders are reminded that the risk factors set out in the Admission Document remain applicable notwithstanding the proposed amendments set out below.

The Board would welcome any questions Shareholders may have on the proposed revised investing policy at the AGM.

Rationale for the changes

The Investment Manager believes that in the current economic climate, the Company's asset allocation ranges should be revised in order to maintain the Company's objective of achieving long-term capital appreciation with a moderate level of risk, as summarised above.

The Investment Manager has therefore proposed that the allocations to certain illiquid asset classes are revised to provide the Company with the possibility of benefiting from the opportunities that the Investment Manager believes exist in real estate and private equity due to their current low valuations relative to the public markets. Accordingly, the Investment Manager is proposing that the top end of the range for allocation to real estate and private equity be increased.

In addition, the Investment Manager is proposing to decrease the bottom end of the range for allocation to money market & cash to provide greater flexibility to invest the Company's assets between similarly liquid asset classes depending upon the returns available whilst maintaining the required level of risk over the portfolio as a whole (e.g. to allow the Investment Manager to deploy assets between Murabaha and Sukuks as the rates of return fluctuate between asset classes).

However, notwithstanding the current economic climate, the Investment Manager still considers that the fundamental split of asset allocation between liquid and illiquid assets remains appropriate and is therefore proposing formally to adopt an explicit maximum allocation to the illiquid asset classes (being alternative investments, real estate and private equity) of 50 per cent.

Proposed changes

Accordingly, the proposed revised asset class ranges and maximum allocations are as follows:

Existing

	Money Market & Cash	Islamic Income / leasing	Equity	Alternative Investments	Real Estate	Private Equity
Maximum	100%	40%	40%	20%	15%	15%
Range	10% - 100%	0% - 40%	0%-40%	0% - 20%	0% - 15%	0% - 15%
	LIQUID ASSET CLASSES			ILLIQUID ASSET CLASSES
	MIN 50% - MAX 100%			MIN 0% - MAX 50%

Proposed

	Money Market & Cash	Islamic Income / leasing	Equity	Alternative Investments	Real Estate	Private Equity
Maximum	100%	40%	40%	20%	30%	20%
Range	5% - 100%	0% - 40%	0%-40%	0% - 20%	0% - 30%	0% - 20%
	LIQUID ASSET CLASSES			ILLIQUID ASSET CLASSES
	MIN 50% - MAX 100%			MIN 0% - MAX 50%

Quotation

The Fund was admitted to trading on AIM on July 25, 2008.

Substantial Shareholding

At December 31, 2009, the Fund had notification that the following shareholders had a beneficial interest of 3% or more of the Fund's issued share capital:

	No. of Shares	% of Holding

Abdulaziz Almunajem	3,000,000		9.51%
Abdullah Abdullatif Al Fozan	3,000,000		9.51%
Ahmed Abdullah Almunajem	3,000,000		9.51%
Ali Ibrahim Almunajem	3,000,000		9.51%
Ibrahim Abdullah Almunajem	3,000,000		9.51%
Saleh Abdullah Almunajem	3,000,000		9.51%
Sumu Al Khaleej Trading Co.	3,000,000		9.51%
Heraymila Investments Limited	2,000,000		6.34%
Pershing Nominees Limited	1,000,000		3.17%
Goldman Sachs Securities (Nominees) Limited	1,000,000		3.17%
Asasat Investments Company	1,000,000		3.17%
Abdulwahab Al Sajid	1,000,000		3.17%

	27,000,000		85.59%

Review of the Development of the Business

See below for the Investment Manager's report.

Results for the year and state of affairs as at December 31, 2009

The statement of financial position as at December 31, 2009 and statement of comprehensive income for the year ended December 31, 2009 are set out on pages 16 and 17, respectively.

Dividend

No dividend was paid or proposed during the year.

Directors

The Directors, who served during the year and to the date of this report, are as follows:

Appointed on

William Morrison

March 5, 2008

Abdulmohsin Al-Omran

March 5, 2008

Christopher Drew Dixon

May 7, 2008

Dr. Reinhard Leopold Klarmann

May 7, 2008

Peter Robinson

May 7, 2008

Directors' Interests

The Directors do not have any shareholdings in the Fund or any options over shares in the Fund as at December 31, 2009. None of the Directors were granted or exercised any share options during the year.

Directors' Fees

The total amounts incurred for Directors' fees during the year were as follows:

	2009	2008
	US$	US$
Abdulmohsin Al-Omran	15,000	12,500
William Morrison	15,000	12,500
Christopher Drew Dixon	15,000	10,000
Dr. Reinhard Leopold Klarmann	15,000	10,000
Peter Robinson	20,000	13,333
Total	80,000	58,333

Corporate Governance Statement

Whilst the Fund is not subject to the Combined Code, published by the Financial Reporting Council, which is applicable to companies listed on the main market of London Stock Exchange (the "LSE"), the Directors recognise the importance of sound corporate governance. The Fund complies with the Corporate Governance Guidelines for AIM Companies as published by the Quoted Companies Alliance (as far as such guidelines are appropriate to a fund of its size and nature).

The Fund has adopted a code of conduct for its Directors' and key employees' share dealings, which the Directors consider is appropriate for the Fund given its nature as an AIM quoted investment company and as the Fund has no executive Directors and has no share option or incentive schemes. The Directors comply with Rule 21 of the AIM Rules for Companies as published by the LSE relating to Directors' dealings and, in addition, take all reasonable steps to ensure compliance by the Fund's applicable employees.

The Directors have established an Audit Committee and a Remuneration and Nomination Committee, each with formally delegated roles and responsibilities. The Audit Committee is comprised of all three of the independent non-executive Directors; Peter Robinson, Christopher Dixon and Dr. Reinhard Klarmann. The Remuneration Committee comprises of Peter Robinson, Christopher Dixon and William Morrison. The Committees meet as often as required but in any event at least once per year.

The Audit Committee is responsible for ensuring that the financial performance of the Fund is properly reported on and monitored and for meeting the auditors and reviewing the reports from the auditors relating to the financial statements and internal control systems.

The Remuneration and Nomination Committee, where appropriate given the size and nature of the Fund and the composition of the Board, reviews the performance of the executive and non-executive Directors and sets and reviews the scale and structure of their remuneration and the terms of their service agreements and letters of appointment with due regard to the interest of shareholders. No Director is permitted to participate in discussions or decisions concerning his own remuneration.

Shari'ah Supervisory Board

The Shari'ah Supervisory Board is responsible for ensuring that the Fund's activities are in compliance with Shari'ah law.

Statement of Directors Responsibilities in Respect of the Financial Statements

The Directors are responsible for the preparation of financial statements for each financial period which present fairly the Fund's state of affairs as at the end of the year and the results of operations for the year then ended.

In preparing those financial statements, the Directors are required to:

• ensure that the financial statements comply with the Memorandum and Articles of Association of the Fund and International Financial Reporting Standards ("IFRS"), as published by the International Accounting Standards Board;

• select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors, and then apply them on a consistent basis;

• make judgments and estimates that are reasonable and prudent;

• prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Fund will continue in business;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and

• provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Fund's financial position and financial performance.

The Directors are responsible for keeping proper accounting records, for safeguarding the assets of the Fund and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

On behalf of the Directors:

___________________ _____________________

Abdulmohsin Al-Omran Peter Robinson

Date: April 19, 2010

AUDIT COMMITTEE REPORT

DECEMBER 31, 2009

The Audit Committee is appointed by the Board from the non-executive Directors of the Fund. The Audit Committee is responsible for ensuring that the financial performance of the Fund is properly reported on and monitored and for meeting the auditors and reviewing the reports from the auditors relating to the financial statements and internal control systems. It meets at least once a year with the auditors to discuss their remit and any issues arising from the audit.

Composition of the Audit Committee

The members of the Audit Committee are:

Name and Date of Appointment

Peter Robinson (Chairman) - May 7, 2008

Christopher Dixon - May 7, 2008

Dr. Reinhard Klarmann - May 7, 2008

The Board expects the Audit Committee members to have an understanding of:

· the principles of, content of, and developments in financial reporting including the applicable accounting standards and statements of recommended practice;

· key aspects of the Fund's operations including corporate policies, company financing, products and systems of internal control;

· matters that influence or distort the presentation of the financial statements and key figures; and

· the principles of, and developments in, company law, sector-specific laws and other relevant corporate legislation.

In addition, the Board expects the Audit Committee members to have an understanding of:

· the role of internal and external auditing and risk management;

· the regulatory framework for the Fund's businesses; and

· environmental and social responsibility and best practices.

Meetings

The Audit Committee is required to meet at least once a year. The Audit Committee can invite the executive management and senior representatives of the external auditors to attend any of its meetings in full, although it reserves the right to request any of these individuals to withdraw. Other senior management are invited to present such reports as they are required for the Committee to discharge its duties. The Audit Committee met twice, together with the external auditors and the CFO of the Investment Manager to discuss the audited accounts for 2008, interim accounts for June 2009 and the internal and reporting systems.

Overview of the Actions Taken by the Audit Committee to Discharge its Duties

External Auditors

The Audit Committee is responsible for the development, implementation and monitoring of the Fund's policy on external audit. The policy assigns oversight responsibility for monitoring the independence, objectivity and compliance with ethical and regulatory requirements to the Audit Committee. The policy states that the external auditors are responsible to the shareholders to express an audit opinion on the Fund's financial statements. The Audit Committee is responsible to the Board of Directors.

Overview

As a result of its work during the year, the Audit Committee has concluded that it has acted in accordance with its terms of reference and has ensured the independence and objectivity of the external auditors. The Chairman of the Audit Committee will be available at the Annual General Meeting to answer any questions about the work of the Committee.

Approval

The Audit Committee has approved the annual report.

This report was approved by the Audit Committee and signed on its behalf by:

Peter Robinson

Chairman of the Audit Committee

Date: April 19, 2010

Manama, Kingdom of Bahrain

REMUNERATION AND NOMINATION COMMITTEE REPORT

DECEMBER 31, 2009

The Remuneration and Nomination Committee is appointed by the Board from the non-executive Directors of the Fund. The Remuneration and Nomination Committee is responsible to review the performance of non-executive Directors and to set and review the scale and structure of their remuneration and the terms of their service agreements and letters of appointment with due regard to the interests of Shareholders. In determining the remuneration of the Directors and Officers of the Fund, the Remuneration and Nomination Committee will seek to attract and retain Board members of the highest calibre. The Remuneration and Nomination Committee will also meet as required for the purpose of considering new or replacement appointments to the Board.

Composition of the Remuneration and Nomination Committee

The members of the Remuneration and Nomination Committee are:

Name and Date of Appointment

Peter Robinson (Chairman) - May 7, 2008

Christopher Dixon - May 7, 2008

William Morrison - May 7, 2008

The Board expects the Remuneration and Nomination Committee members to have an understanding of:

· key aspects of the Directors' roles and responsibilities and involvement;

· matters that influence the performance of the Directors; and

· the principles of Directors' remuneration.

Meetings

The Remuneration and Nomination Committee is required to meet at least once a year. The Remuneration and Nomination Committee can invite the executive management and senior representatives of the external auditors to attend any of its meetings in full, although it reserves the right to request any of these individuals to withdraw. The Remuneration and Nomination Committee met once during the year and discussed the rotation policy and remuneration of the Directors and the Chairman of the Board.

Overview of the Actions Taken by the Remuneration and Nomination Committee to Discharge its Duties

Overview

As a result of its work during the year, the Remuneration and Nomination Committee has concluded that it has acted in accordance with its terms of reference and is satisfied with the conduct of the Directors. The Chairman of the Remuneration and Nomination Committee will be available at the Annual General Meeting to answer any questions about the work of the Committee.

Approval

The Remuneration and Nomination Committee recommends to the Board that the composition as well as remuneration of the Directors remains unchanged.

This report was approved by the Remuneration and Nomination Committee and signed on its behalf by:

Peter Robinson

Chairman of the Remuneration and Nomination Committee

Date: April 19, 2010

Manama, Kingdom of Bahrain

INVESTMENT MANAGER'S REPORT

DECEMBER 31, 2009

We were appointed by the Board of Directors of the Fund as the Fund's Investment Manager with the objective of achieving long-term capital appreciation from a Shari'ah-Compliant, diversified, investment portfolio characterised by a moderate level of risk.

The Investment Manager had the view that the global macro picture was improving due to central banks interventions and demand stabilization. This translated into increased allocation to riskier assets in 2009. The Investment Manager started the year with 70.5% of the Fund's assets allocated to cash (comprising of balance with bank and murabaha receivables) and finished the year with an allocation of 36.8% to cash.

This decrease in the proportions of funds held as cash was through an increase of investments in Islamic Income by 15.9 percentage points (11% in 2008 to 26.9% in 2009), in Public Equity by 9.4 percentage points (12.7% to 22.1%) and in Private Equity by 9.6 percentage points (4.6% to 14.2%).

Most of the activity in Islamic income was produced in the fourth quarter of 2009. The Investment Manager preferred to keep the allocation in sovereign and quasi sovereign Sukuks to ensure defensiveness in the portfolio. The Investment Manager has therefore avoided real estate exposure and Dubai related names which in the late summer which helped the Sukuk portfolio outperform the overall Sukuk market in fourth quarter of 2009.

With regards to investments in Public Equity, the Investment Manager reduced the exposure to emerging markets and increased exposure to developed markets. The Investment Manager increased the exposure to equities through an active manager with a global equity mandate and strong stock selection bias.

The Investment Manager participated in eight Private Equity transactions in 2009 of which four were based in North America, three in Asia and one in Europe. The Investment Manager participated in various sectors such as industrials, real estate & healthcare.

The Investment Manager believes that the current positive macro trends are expected to continue into first half of 2010. However, growth momentum is expected to surprise in the Western markets, while emerging markets could start tightening in 2010. The Investment Manager also believes that the market volatility could remain present throughout the year. Therefore, the Investment Manager will continue to invest selectively in markets that favour illiquid strategies, maintaining a flexible approach around the liquid portion of the portfolio.

Acting in accordance with the objectives of the Fund and the expectations of the shareholders, our prudent approach implemented in phases resulted in increase of the net asset value of the Fund net of all fees, of US$ 473,417.

At year-end, the portfolio of assets is still positioned with the objective of preserving capital.

___________________________

Richard Joye

Member of the Investment Committee

On behalf of the Investment Manager

The Family Office Co. BSC(c)

REPORT OF THE SHARI'AH SUPERVISORY BOARD

In the name of Allah, The Beneficent, The Merciful

Assalam Alaikum Wa Rahmat Allah Wa Barakatuh

In compliance with the letter of appointment and the Fund's admission document, we are required to submit the following report:

We have reviewed the principles and the contracts relating to the transactions and applications introduced by The Family Shari'ah Fund Limited (the "Fund") during the period. We have also conducted our review to form an opinion as to whether the Fund has complied with Shari'ah Rules and Principles and also with the specific fatwas, rulings and guidelines issued by us.

The Fund's management is responsible for ensuring that the Fund conducts its business in accordance with Islamic Shari'ah Rules and Principles. It is our responsibility to form an independent opinion, based on our review of the operations of the Fund, and to report to you.

We conducted our review which included examining, on a test basis, each type of transaction, the relevant documentation and procedures adopted by the Fund.

We planned and performed our review so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Fund has not violated Islamic Shari'ah Rules and Principles.

In our opinion:

(a) the contracts, transactions and dealings entered into by the Fund during the period that we have reviewed are in compliance with the Islamic Shari'ah Rules and Principles; and

(b) all earnings that have been realised from sources or by means prohibited by Islamic Shari'ah Rules and Principles have been disposed of to charitable causes.

We beg Allah the Almighty to grant us all the success and straight-forwardness.

Wassalam Alaikum Wa Rahmat Allah Wa Barakatuh

___________ ___________

Member Member

INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF

THE FAMILY SHARI'AH FUND LIMITED

We have audited the accompanying financial statements of The Family Shari'ah Fund Limited (the "Fund"), which comprise the statement of financial position as at December 31, 2009 and the statements of comprehensive income, changes in equity and cash flows for the year ended December 31, 2009, and a summary of significant accounting policies and other explanatory notes.

Board of Directors' Responsibility for the Financial Statements

The Board of Directors is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2009, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

April 19, 2010

Manama, Kingdom of Bahrain

STATEMENT OF FINANCIAL POSITION

DECEMBER 31, 2009

		2009	2008
	Note	US$	US$

ASSETS

Balance with bank		10,439,924	16,805,698
Investments at fair value through profit or loss	4	17,917,360	7,827,150
Murabaha receivables		-	3,038,750
Other assets	5	153,150	500,707

TOTAL ASSETS		28,510,434	28,172,305

LIABILITIES AND EQUITY

LIABILITIES

Due to Investment Manager	6	185,991	204,942
Other payables and accruals	7	89,164	205,501

TOTAL LIABILITIES		275,155	410,443

EQUITY
Share capital	9	315,500	315,500
Share premium	9	31,234,500	31,234,500
Accumulated loss		(3,314,721)	(3,788,138)

TOTAL EQUITY		28,235,279	27,761,862

TOTAL LIABILITIES AND EQUITY		28,510,434	28,172,305

___________________ ___________________

Abdulmohsin Al-Omran Peter Robinson

Director Director

STATEMENT OF COMPREHENSIVE INCOME

YEAR ENDED DECEMBER 31, 2009

			Period from
		Year ended	July 25 to
		December 31,	December 31,
		2009	2008
	Note	US$	US$
INCOME
Net income from investments at fair value
through profit or loss		1,905,677	(3,027,577)
Murabaha income		55,626	140,243

TOTAL INCOME		1,961,303	(2,887,334)


EXPENSES
Management fee	6	416,699	193,398
General and administration expenses	8	1,071,187	707,406

TOTAL EXPENSES		1,487,886	900,804

NET PROFIT (LOSS) FOR THE YEAR / PERIOD		473,417	(3,788,138)
Other comprehensive income for the year / period		-	-
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR / PERIOD		473,417	(3,788,138)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	9	31,550,000	31,550,000

EARNINGS (LOSS) PER SHARE (BASIC AND DILUTED)	9	0.02	(0.12)

STATEMENT OF CHANGES IN EQUITY

YEAR ENDED DECEMBER 31, 2009


	Share capital	Share premium	Accumulated loss	Total
	US$	US$	US$	US$
Balance at July 25, 2008	-	-	-	-

Shares issued during the period (note 9)	315,500	31,234,500	-	31,550,000

Total comprehensive income for the period	-	-	(3,788,138)	(3,788,138)

Balance at December 31, 2008	315,500	31,234,500	(3,788,138)	27,761,862

Total comprehensive income for the year	-	-	473,417	473,417

Balance at December 31, 2009	315,500	31,234,500	(3,314,721)	28,235,279

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2009



	Year ended	Period from July 25 to
	December 31, 2009	December 31, 2008
	US$	US$

OPERATING ACTIVITIES

Net profit (loss) for the year / period	473,417	(7,827,150)
Investments at fair value through profit or loss	(10,090,210)	(3,788,138)
Murabaha receivables	3,038,750	(3,038,750)
Other assets	347,557	(500,707)
Due to Investment Manager	(18,951)	204,942
Other payables and accruals	(116,337)	205,501

Net cash used in operating activities	(6,365,774)	(14,744,302)
FINANCING ACTIVITY

Proceeds from issuance of shares
Share capital	-	315,500
Share premium	-	31,234,500

Net cash from financing activity	-	31,550,000


NET (DECREASE) INCREASE IN BALANCE WITH BANK	(6,365,774)	16,805,698

BALANCE WITH BANK AT JANUARY 1, 2009 / JULY 25, 2008	16,805,698	-

BALANCE WITH BANK AT DECEMBER 31, 2009 / 2008	10,439,924	16,805,698

Supplemental information:
Dividends received	41,503	36,974

NOTES TO THE FINANCIAL INORMATION

DECEMBER 31, 2009

1 ACTIVITIES

The Family Shari'ah Fund Limited (the "Fund") is a Shari'ah-compliant multi-asset class investment company. The Fund is a Cayman Islands exempted company which is not registered with the Cayman Islands Monetary Authority ("CIMA"). The Fund invests in a range of Shari'ah-compliant assets, products and investments. The Fund's strategy is to focus on providing specialised Shari'ah-compliant financial products that appeal to a growing market of investors who desire Shari'ah-compliant economic equivalents to conventional assets and instruments.

The address of the registered office of the Fund is SH Corporate Services Ltd., P.O. Box 61, 4^th Floor, Harbour Centre, George Town, Grand Cayman, KY1, 1102, Cayman Islands.

The investment objective of the Fund is to achieve long-term capital appreciation from a Shari'ah-compliant, diversified, investment portfolio characterised by a moderate level of risk. The Fund operates under the overriding principle that all investments must be Shari'ah-compliant. The Fund's investment objectives are therefore devised so as to provide investors with a diversified pool of Shari'ah-compliant assets, consistent risk-adjusted returns over a market cycle via an active and diversified asset allocation programme, geographic diversification of investments and liquidity through trading of the Fund's shares on the AIM market of the London Stock Exchange.

The activities of the Fund are subject to Islamic Investment Guidelines, as defined from time to time by the Shari'ah Supervisory Board ('SSB'). The SSB consist of two members, as mentioned on page 3.

The SSB is responsible for:

- reviewing and approving the "Islamic Investment Guidelines" of the Fund;

- reviewing the Fund's investments to ensure that they are Shari'ah compliant;

- reviewing reports from the Investment Manager to ensure adherence to Islamic Investment Guidelines; and

- advising the Directors on revenue purification and selecting appropriate charities.

The Family Office Company B.S.C. (c), a company incorporated in the Kingdom of Bahrain, is the investment manager of the Fund ("Investment Manager").

The Fund has appointed Apex Fund Services (Ireland) Limited (the "Administrator" or "Apex"), an Irish limited liability company as its administrator.

The comparative amounts included in the financial statements cover the period from July 25, 2008 (date of commencement of operations) to December 31, 2008 and hence are not comparable with the current year's amounts.

The financial statements of the Fund for the year ended December 31, 2009 were approved by the Directors on April 19, 2010.

2 BASIS OF PREPARATION

The financial statements of the Fund have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standard Board (IASB).

The financial statements are prepared under the historical cost basis as modified for the measurement at fair value of investments carried at fair value through profit or loss.

The financial statements are presented in United States Dollars (US Dollars) which is the functional currency of the Fund.

3 SIGNIFICANT ACCOUNTING POLICIES

3.1 Accounting standards, interpretations and amendments therein issued but not yet effective

The following standards are not expected to have a material effect on the financial position or performance of the Fund when adopted/applied:

Ø IFRS 1, 'First time Adoption of International Financial Reporting Standards (Revised)'

Ø IFRS 2, 'Share Based Payment - Group cash-settled share-based payment transactions'

Ø IFRS 3, 'Business Combinations (Revised 2008)'

Ø IAS 24, 'Related Party Transactions (Revised)'

Ø IAS 27, 'Consolidated and Separate Financial Statements (Revised 2008)'

Ø IAS 32, 'Amendments to IAS 32 Classification of Rights Issues'

Ø IAS 39, 'Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items'

Ø IFRIC 14, 'Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement Annual Improvements to IFRS (2007-2009)'

Ø IFRIC 17, 'Distribution of Non-cash Assets to Owners'

Ø IFRIC 18, 'Transfer of Assets from Customers

Ø IFRS 9, 'Financial instruments part 1: Classification and measurement'

IFRS 9 was issued in November 2009 and replaces those parts of IAS 39 relating to the classification and measurement of financial assets. Key features are as follows:

- Financial assets are required to be classified into two measurement categories: those to be measured subsequently at fair value, and those to be measured subsequently at amortised cost. The decision is to be made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument.

- An instrument is subsequently measured at amortised cost only if it is a debt instrument and both the objective of the entity's business model is to hold the asset to collect the contractual cash flows, and the asset's contractual cash flows represent only payments of principal and interest (that is, it has only 'basic loan features'). All other debt instruments are to be measured at fair value through profit or loss.

- All equity instruments are to be measured subsequently at fair value. Equity instruments that are held for trading will be measured at fair value through profit or loss. For all other equity investments, an irrevocable election can be made at initial recognition, to recognise unrealised and realised fair value gains and losses through other comprehensive income rather than profit or loss. There is to be no recycling of fair value gains and losses to profit or loss. This election may be made on an instrument-by-instrument basis. Dividends are to be presented in profit or loss, as long as they represent a return on investment.

The adoption of IFRS 9 is mandatory from January 1, 2013.

The Fund is considering the implications of the standard, the impact on the Fund's financial position and results and the timing of its adoption by the Fund. However, the management does not expect any significant impact on adoption of the changes brought in by the above phase of IFRS 9.

3.2 Adoption of IFRS amendments

The accounting policies adopted are consistent with those of the previous period except for those stated below. During the year, the Fund adopted the following standards effective for the annual periods beginning on or after January 1, 2009.

Ø IAS 1 'Presentation of Financial Statements' (Revised):

The revised standard separates owner and non-owner changes in equity. The statement of changes in equity included only details of transactions with owners. All other changes in equity (i.e. non - owner changes in equity) are required to be presented separately in a statement of comprehensive income, either in a single statement or in two linked statements. The Fund has elected to present a single statement.

Ø IFRS 7 'Financial Instruments: Disclosures - Improving Disclosures about Financial Instruments'

The amended standard requires additional disclosures about fair value measurement and liquidity risk. Fair value measurements related to items recorded at fair value are to be disclosed by source of inputs using a three level fair value hierarchy, by class, for all financial instruments recognised at fair value. In addition, a reconciliation between the beginning and ending balance for level 3 fair value measurements is now required, as well as significant transfers between levels in the fair value hierarchy. The amendments also clarify the requirements for liquidity risk disclosures with respect to derivative transactions and assets used for liquidity management. The fair value measurement disclosures are presented in note 4. The liquidity risk disclosures are not significantly impacted by the amendments and are presented in note 12(c).

Ø IFRS 8 'Operating Segments'

The new standard which replaced IAS 14 'Segment Reporting' requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes. The adoption of this standard has not resulted in any significant change in the reportable segments, as the existing external segmental disclosures are more consistent with the internal reporting provided to the chief operating decision makers.

Ø Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation

Amendments to IAS 32 and IAS 1 were issued by the IASB in February 2008 and become effective for annual periods beginning on or after 1 January 2009 with early application permitted. The amendment to IAS 32 requires certain puttable financial instruments and obligations arising on liquidation to be classified as equity if certain criteria are met. The amendments to IAS 1 require disclosure of certain information relating to puttable instruments classified as equity.

The Fund has no such instruments; hence, the adoption of these amendments did not have any impact on the financial position or performance of the Fund.

Except for certain additional disclosure, the amendments to the following standards did not have any impact on the accounting policies, financial position or performance of the Fund:

Ø IFRS 1 First Time Adoption of International Financial Reporting Standards

Ø IFRS 2 Share Based Payment - Vesting Conditions and Cancellations

Ø IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

Ø IFRIC 9 Reassessment of Embedded Derivatives and IAS 39 Financial Instruments: Recognition and Measurement

Ø IFRIC 13 Customer Loyalty Programmes

Ø IFRIC 15 Agreements for the Construction of Real Estate

Ø IFRIC 16 Hedges of a Net Investment in a Foreign Operation

Ø IFRIC 18 Transfer of Assets from Customers

Ø IAS 8 Accounting Policies, Change in Accounting Estimates and Error

Ø IAS 10 Events After the Reporting Period

Ø IAS 16 Property, Plant and Equipment

Ø IAS 18 Revenue

Ø IAS 19 Employee Benefits

Ø IAS 20 Accounting for Government Grants and Disclosures of Government Assistance

Ø IAS 23 Borrowing Costs

Ø IAS 27 Consolidated and Separate Financial Statements

Ø IAS 28 Investments in Associates

Ø IAS 29 Financial Reporting in Hyperinflationary Economies

Ø IAS 31 Interest in Joint ventures

Ø IAS 32 Financial Instruments: Presentation and IAS 1 Puttable Financial Instruments and Obligations Arising on Liquidation

Ø IAS 34 Interim Financial Reporting

Ø IAS 36 Impairment of Assets

Ø IAS 38 Intangible Assets

Ø IAS 39 Financial Instruments: Recognition and Measurement

Ø IAS 40 Investment Property

Ø IAS 41 Agriculture

3.3 Murabaha receivables

Murabaha receivables comprise commodity murabaha receivables.

Murabaha receivables are sales on deferred terms. The Fund arranges a murabaha transaction by buying a commodity (which represents the object of the murabaha) and then resells this commodity to the murabeh (beneficiary) after computing a margin of profit over cost. The sale price (cost plus the profit margin) is repaid in instalments by the murabeh over the agreed period.

Where the income is quantifiable and contractually determined at the commitment of the contract, the income is recognised on a time apportioned basis over the period of the contract based on the principal amount outstanding and profit rate agreed with the customer.

3.4 Due from and due to broker

Amounts due from and due to broker represents receivables for securities sold and payables for securities purchased respectively, that have been contracted for but not yet settled or delivered on the statement of financial position date.

3.5 Financial instruments

Classification

Financial assets and financial liabilities are classified as financial assets and financial liabilities at fair value through profit or loss in accordance with IAS 39 "Financial Instruments: Recognition and Measurement". The category of financial assets and financial liabilities at fair value through the profit or loss is sub-divided into:

Financial assets and financial liabilities held for trading:Financial assets held for trading include equity securities, investments in managed funds and debt instruments. These assets are acquired principally for the purpose of generating a profit from active trading and short-term fluctuation in price.

Financial instruments designated as at fair value through profit or loss upon initial recognition: These include equity securities and debt instruments that are not held for trading. These financial assets are designated on the basis that they are part of a group of financial assets which are managed and have their performance evaluated on a fair value basis, in accordance with risk management and investment strategies of the Fund. The financial information about these financial assets is provided internally on that basis to the Investment Manager and to the Board of Directors.

Recognition and measurement

Investments are initially recognised at cost, being the fair value of the consideration given. All transaction costs for such instruments are recognised in the statement of comprehensive income. After initial recognition, these investments are remeasured at fair value with both realised and unrealised gains or losses recorded in the statement of comprehensive income in "net income from investments at fair value through profit or loss". Profit and dividend revenue elements on such investments are included in the same line.

Trade date

All "regular way" purchases and sales of financial assets are recognised on the trade date, i.e. the date that the Fund commits to purchase or sell the asset.

Derecognition of financial instruments

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:

(i) the right to receive cash flow from the asset has expired;

(ii) the Fund retains the right to receive cash flows from the asset, but has assumed an obligation to pay the cash flows received, in full without material delay to a third party under a 'pass through' arrangement;

(iii) the Fund has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Fund has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Fund's continuing involvement in the asset.

A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.

Fair value

Fair value represents the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. The fair value of a quoted investment is determined by reference to the market bid price as of the statement of financial position date. The fair value of unquoted investment is determined by reference to its net asset value (NAV) as calculated by the respective administrator as of the statement of financial position date.

3.6 Accrued expenses

Liabilities are recognised for amounts to be paid in the future for services received, whether billed or not.

3.7 Functional and presentation currency

Transactions in foreign currencies are recorded at the rate of exchange prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into US Dollars at the rate of exchange prevailing at the statement of financial position date. Any gains or losses on translation of monetary assets and liabilities are taken to the statement of comprehensive income.

Translation gains or losses on investments at fair value through profit or loss are included in the statement of comprehensive income.

3.8 Dividend income

Dividend is recognised when the right to receive the dividend is established.

3.9 Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is generally not the case with master-netting agreements, and the related assets and liabilities are presented gross in the statement of financial position.

3.10 Provisions

Provisions are recognized when the Fund has a present obligation (legal or constructive) as a result of past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

3.11 Share capital

The Fund's shares are classified as equity as the Fund's shares are not redeemable at the option of the shareholders.

3.12 Dividend distribution

Dividend distributions are at the discretion of the Fund. A dividend distribution to the Fund's shareholders is accounted for as a deduction from retained earnings. A proposed dividend is recognized as a liability in the period in which it is approved by the annual general meeting of shareholders.

3.13 Fees and commissions

Unless included in the effective interest calculation, fees and commissions are recognised on an accrual basis. Legal and audit fees are included within 'general and administration expenses'.

3.14 Significant accounting judgements and estimates

Fair value of financial instruments

The preparation of financial statements in conformity with IFRS requires the Directors and management to make estimates and assumptions that affect the amounts in the financial statements and accompanying notes. The Investment Manager decides on acquisition of an investment, whether it should be classified as fair value through profit or loss, held-to-maturity or available-for-sale. The use of estimates is principally limited to the determination of fair value of unquoted investments at fair value through profit or loss. The Directors and management believe that the estimates utilised in preparing the financial statements are reasonable and prudent. However, actual results could differ from these estimates.

Going concern

The Fund's management has made an assessment of the Fund's ability to continue as a going concern and is satisfied that the Fund has the resources to continue in business for the foreseeable future. Furthermore, the management is not aware of any material uncertainties that may cast significant doubt upon the Fund's ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the going concern basis.

4 INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

This represents investments in instruments compliant with, or in compliance with, the principles and precepts of Shari'ah as determined by the Shari'ah Supervisory Board. Investments are made in accordance with the investment policies as laid down in the Admission Document of the Fund.

The fair values of financial instruments are as follows:

	2009	2008
	US$	US$
Held-for-trading:
Quoted
- Equity securities	6,262,160	6,554,096
- Debt securities	7,628,451	-

	13,890,611	6,554,096
Designated at fair value through profit or loss: Unquoted
- Investments in an unquoted fund	4,026,749	1,273,054

Total	17,917,360	7,827,150

Determination of fair value and fair value hierarchy for investments at fair value through profit or loss:

The Fund uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

- Level 1: quoted prices in active markets for identical assets or liabilities;

- Level 2: those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and

- Level 3: those whose inputs for the asset or liability that are not based observable market data (unobservable inputs).

The Fund's quoted equity and debt securities fall under level 1 category and unquoted investments fall under level 3 category.

The unquoted investments are valued at their net asset value (NAV) as calculated by the respective administrator as of the statement of financial position date. The Investment Manager considers the use of NAV as a reasonable basis to measure the fair market value.

Refer note 12(b)(i) for the sensitivity analysis on the level 3 inputs.

The following table shows a reconciliation of all movements in the fair value of level 3 instruments:

	2009	2008
	US$	US$

Balance, beginning of the year / period	1,273,054	-

Purchase of investments	2,520,887	1,800,000
Net profit included in the statement of
comprehensive income	232,808	(526,946)

Balance, end of the year / period	4,026,749	1,273,054

The Fund's exposure analysed by geographic region and industry sector as at December 31, 2009 and 2008 is as follows:

Geographic region

	2009	2008
	US$	US$

Ireland	3,652,457	2,178,498
Luxembourg	2,609,703	-
United States	2,255,128	1,029,052
Malaysia	2,008,747	-
Jersey	1,966,100	-
Bermuda	1,641,500	-
Cayman Islands	1,357,003	-
Bahrain	1,075,985	-
United Kingdom	740,696	244,002
South Korea	610,041	-
Singapore	-	491,127
Saudi Arabia	-	3,884,471

	17,917,360	7,827,150

Industry sector

	2009	2008
	US$	US$

Industrial	2,254,240	-
Energy	2,168,933	282,124
Government	2,012,104	-
Infrastructure	1,966,100	-
Biotechnology	1,046,104	431,452
Real Estate	681,937	-
Telecommunications	525,062	315,476
Pharmaceutical and Consumer Goods	314,893	244,002
Education	264,943	-
Others	6,683,044	6,554,096

	17,917,360	7,827,150

5 OTHER ASSETS

	2009	2008
	US$	US$

Prepayments	83,729	131,995
Profit receivables	69,421	-
Due from broker	-	368,712

	153,150	500,707

6 RELATED PARTY TRANSACTIONS AND BALANCES

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. All transactions with related parties were in the normal course of business. The Investment Manager and related companies are deemed to be related to the Fund. Fees incurred with related parties during the year and amounts payable to related parties at the year end are disclosed below.

Nature	Payable to	Basis

Management fee	The Family Office Company B.S.C. (c)	1.5% of the net asset value (NAV) of the Fund, calculated monthly as of the last day of each fiscal quarter using the month end net asset value and paid quarterly in arrears.
Performance fee	The Family Office Company B.S.C. (c)	is calculated in respect of each fiscal quarter if the hurdle rate (the Murabaha 3 month return) and a high water mark are met. The performance fee is equal to 10% of the excess NAV per share over the hurdle rate multiplied by the time weighted average of the number of shares in issue in the fiscal quarter.
Other fees	The Family Office Company B.S.C. (c)	This represents amount reimbursed to the Investment Manager for certain expenses incurred on behalf of the Fund.

Balances and transactions with related parties included in these financial statements are as follows:

	2009	2008
Statement of financial position	US$	US$
Assets:
Investments at fair value through profit or loss*	4,026,749	1,273,054

Liabilities:
Due to Investment Manager	185,991	204,942
Directors' fees payable	20,872	20,000

	Year ended	Period from July 25 to
	December 31, 2009	December 31,2008
	US$	US$
Statement of comprehensive income:
Net profit (loss) from investments at fair value through profit or loss*	232,808	(526,946)
Management fee	416,699	193,398
General and administration expenses	462,661	207,014

* Investments made through investment vehicles that have common control of Investment Manager

7 OTHER PAYABLES AND ACCRUALS

	2009	2008
	US$	US$

Shari'ah Supervisory Board fee payable	21,600	91,684
Directors' fees payable	20,872	20,000
Audit fee payable	23,798	49,811
Other payables	18,494	8,665
Administration fee payable	4,400	4,400
Legal fee payable	-	30,941

	89,164	205,501

8 GENERAL AND ADMINISTRATION EXPENSES

	Year ended	Period from July 25 to
	December 31, 2009	December 31, 2008
	US$	US$

Other fees to the Investment Manager (note 6)	341,122	149,532
Insurance expense	183,573	96,803
Commission expense	169,650	66,289
Directors' fees and expenses	121,539	58,333
Advisory fees	72,442	34,018
Legal fees	67,931	46,165
Administration fee	52,800	26,400
Audit and tax fee	17,700	49,811
Other expenses	44,430	180,055

	1,071,187	707,406

9 SHARE CAPITAL

The authorised share capital of the Fund was US$ 49,990 divided into 4,999,000 shares of US$ 0.01 each, of which one share was issued for cash at par to the subscriber to the Fund's Memorandum of Association. On March 5, 2008 the subscriber share was transferred to TFO Shari'ah Manager Limited who subsequently transferred the subscribed share to The Family Office Company B.S.C. (c) on March 19, 2008. On July 17, 2008 the Fund's authorised share capital was increased to US$ 2,000,000.

The authorised, issued and paid up share capital of the Fund is as follows:


	2009	2008	2009	2008
	Number of shares	Number of shares	US$	US$

Authorized share capital	200,000,000	200,000,000	2,000,000	2,000,000

Issued and fully paid up	31,550,000	31,550,000	315,500	315,500

The above shares were issued at a par value of US$ 0.01 each and paid up at a premium of US$ 0.99 per share.

The holders of shares are entitled to receive notice to attend and to vote at any general meeting of the Fund. On a return of assets on liquidation or otherwise, the net assets of the Fund available for distribution among its members shall be applied first in repaying to the holders of the shares. The shares shall entitle the holders thereof to any dividends that may be declared in respect of their shares. The shares are not redeemable at the option of the holders. The Fund shall be entitled to redeem all or any of such shares at such times and in such manner as the Directors shall in their absolute discretion from time to time determine.

The Directors intend to operate an active discount management policy through the use of share buybacks of up to 14.99% of the ordinary shares that were issued upon admission. The objective is to maintain the price at which the ordinary shares trade in the market at a discount to net asset value per ordinary share of no more than 5%. In implementing this policy, the Directors will have regard to prevailing market conditions and will undertake share buybacks so long as they believe that it is in the best interests of shareholders as a whole to do so. Any ordinary shares bought back pursuant to the policy will be cancelled. There was no share buyback during the year and in the period from July 25 to December 31, 2008.

The weighted average number of shares and earnings per share for the period from July 25 to December 31, 2008 were calculated in last year's financial statements based on the full year period instead of calculating based on the period the shares were outstanding. Accordingly, the weighted average number of shares and earnings per share for the comparative period have been restated in these financial statements. This has not impacted the previously reported total assets, total liabilities, total comprehensive income and total equity.

10 COMMITMENTS

The Fund does not have any commitments except as disclosed in note 12(c).

11 CATEGORIES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

The table below shows categories of the Fund's financial assets and financial liabilities at December 31, 2009:

	Held-for-trading	Designated at fair value through profit or loss	Items at amortised cost	2009 Total
	US$	US$	US$	US$

Balance with bank	-	-	10,439,924	10,439,924
Investments at fair value through profit or loss	13,890,611	4,026,749	-	17,917,360
Other assets	-	-	69,421	69,421

Total financial assets	13,890,611	4,026,749	10,509,345	28,426,705

Due to Investment Manager	-	-	185,991	185,991
Other payables	-	-	89,164	89,164

Total financial liabilities	-	-	275,155	275,155

The table below shows categories of the Fund's financial assets and financial liabilities at December 31, 2008:

	Held-for-trading	Designated at fair value through profit or loss	Items at amortised cost	2008 Total
	US$	US$	US$	US$

Balance with bank	-	-	16,805,698	16,805,698
Investments at fair value through profit or loss	6,554,096	1,273,054	-	7,827,150
Murabaha receivables	-	-	3,038,750	3,038,750
Other assets	-	-	368,712	368,712

Total financial assets	6,554,096	1,273,054	20,213,160	28,040,310

Due to Investment Manager	-	-	204,942	204,942
Other payables	-	-	205,501	205,501

Total financial liabilities	-	-	410,443	410,443

12 RISK MANAGEMENT

Risk is inherent in the Fund's activities, but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. The process of risk management is critical to the Fund's continuing profitability. The Fund is exposed to credit risk, market risk and liquidity risk. The Board of Directors is responsible for overall management of these risks. The Board of Directors has included certain of the risk management activities in the investment management agreement with the Investment Manager. The Investment Manager's objective is to assess, continuously measure and manage the risks of the portfolio, according to the investment objective, the investment policy and the overall risk profile of the Fund. The nature and extent of the financial instruments outstanding at the statement of financial position date and the risk management policies employed by the Fund are discussed below.

(a) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge a financial obligation and cause the other party to incur a financial loss. The Fund is exposed to credit risk on its balance with bank, quoted debt investments at fair value through profit or loss, Murabaha receivables and other assets.

The Fund has a policy to maintain balances with reputable banks and custodians to minimise the counterparty risk. S&P's long term credit rating of the custodian was A as at December 31, 2009. During the year, the Fund employed custodians whose credit rating ranges from A-1 to A. The Investment Manager evaluates counterparty risk for any of the Fund's transactions. All transactions in quoted securities are settled upon delivery using approved and recognised brokers.

The Fund's maximum credit risk exposure as of December 31, 2009 is as follows:

	2009	2008
	US$	US$

Balance with bank	10,439,924	16,805,698
Investment at fair value through profit or loss
- quoted debt securities	7,628,451	-
Murabaha receivables	-	3,038,750
Other assets	69,421	368,712

	18,137,796	20,213,160

The Fund's financial assets are performing and are neither past due nor impaired.

(b) Market risk

Market risk is the risk that the fair value of future cash flows of financial instruments will fluctuate due to changes in market variables such as equity prices, profit rate and foreign exchange rate.

(i) Equity price risk

The Fund trades in financial instruments, to take advantage of short-term market movements. All investments present a risk of loss of capital. The Fund's investments are susceptible to equity price risk arising from uncertainties about future prices of the instruments. The Investment Manager moderates this risk through a careful selection of investments and other financial instruments within specified limits. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments. The Fund's overall market positions are monitored on a regular basis by the Investment Manager.

Equity price risk sensitivity

The below table demonstrates the sensitivity for equity investments that are based on indices:

Market Indices	Change in	Effect on equity and on
	equity price	profit/(loss) for the year / period
		2009	2008
	%	US$	US$

MSCI World Islamic	+/- 5	+/- 105,235	+/- 43,522
MSCI Emerging Markets Islamic	+/- 5	+/- 77,388	+/- 34,393
MSCI USA Islamic	+/- 5	-	+/- 31,010
FTSE Shariah Japan 100	+/- 5	-	+/- 24,556

The equity price risk sensitivity for equity investments that are not based on indices is as follows:

A 5% increase in the fair value of these investments will increase the Fund's net profit by US$ 331,823 (2008: US$ 257,876), whilst all other variables held constant.

A decrease by 5% would result in an equal but opposite effect on net profit to the figures shown above, on the basis that all other variables remain constant.

This calculation is based on adjusting the fair values as at the year end. It is important to note that this form of sensitivity analysis is unrepresentative of the risks inherent in the financial instruments held by the Fund as the measure is a point-in-time calculation, reflecting positions as recorded at that date, which do not necessarily reflect the risk position held at any other time.

(ii) Profit rate risk

Profit rate risk arises from the possibility that changes in profit rates will affect future cash flows or the fair values of financial instruments.

The Fund is exposed to profit rate risk on the quoted debt investments at fair value through profit or loss.

The following table demonstrates the sensitivity of the statement of comprehensive income to reasonably possible changes in profit rates, with all other variables held constant:

	Increase/	Effect on
	decrease in basis points	net profit for the year

United States Dollars	+100	76,285
	-100	(76,285)

(iii) Currency risk

Foreign currency risk is the risk that as certain assets of the Fund may be invested in securities and other investments denominated in foreign currencies (i.e. non base currency), the value of such assets may be affected favourably or unfavourably by fluctuations in currency rates.

The Fund's monetary assets and liabilities are denominated in the base currency, US Dollars, and therefore the Fund is not exposed to currency risk.

Liquidity risk is the risk that the Fund will encounter difficulty in meeting financial obligations as they fall due. The Fund's quoted securities are considered readily realisable. The Investment Manager monitors the Fund's liquidity position on a daily basis, and a high allocation of cash is maintained within the Fund to ensure that liquidity risk is minimised. The Fund's constitution does not provide for the redemption of shares at the option of the shareholders and it is therefore not exposed to the liquidity risk of meeting shareholders' redemptions at any point in time.

The Fund has a capital commitment to a related party unquoted fund, representing a portfolio of assets. This capital commitment as at the statement of financial position date amounted to US$ 0.05 million (2008: US$ 2.7 million). The capital call depends upon investment opportunities identified by the related party fund and is expected to be called within one year.

The Fund's financial liabilities mature within six months from the balance sheet date. The contractual maturities of financial liabilities based on undiscounted cash flows are the same as the amounts disclosed in note 11 since these financial liabilities do not carry any profit.

13 SEGMENT REPORTING

For management purposes, the Fund is organised into six operating segments as mentioned below. Each segment engages in separate business activities and the operating results are regularly reviewed by the Investment Manager and Board of Directors, for performance assessment purposes and to make decisions about resources allocated to each segment. The Investment Manager is responsible for allocating resources available to the Fund in accordance with the overall business strategies as set out in the Admission Document of the Fund. The segments are as follows:

· Money market and cash (comprising of balances with bank and murabaha receivables)

· Equity (comprising of investments in equity funds, publicly quoted equities, ETF tracking Islamic indices, etc.)

· Private Equity (comprising of investments in private placements, investment in private equity fund, etc.)

· Islamic income and leasing (comprising of investments in Shari'ah compliant alternatives such as Sukuk, Musharakah, Ijarah etc.)

· Alternative investments (comprising of investments in hedge funds, Shari'ah compliant wrapper instruments, etc.)

· Real estate (comprising of investments in real estate, real estate funds, managed portfolio, etc.)

There have been no changes in reportable segments during the course of the year. There have been no transactions in the 'Alternative investments' and 'Real estate segment during 2009 and 2008.

Financial information about the remaining segments for the year ended December 31, 2009 and period from July 25 to December 31, 2008 was as follows:

	Year ended December 31, 2009
	Money			Islamic
	market and		Private	income and	Total
	cash	Equity	Equity	leasing
	US$	US$	US$	US$	US$

Net income from investments at fair value through profit or loss	-	1,330,461	232,808	342,408	1,905,677
Murabaha income	55,626	-	-	-	55,626

Total income	55,626	1,330,461	232,808	342,408	1,961,303

At December 31, 2009
Other information:
Segment assets	10,439,924	6,262,160	4,026,749	7,628,451	28,357,284

Out of the total revenue, four investments which are included in Equity and Private Equity segment constitute 84% of the total revenue.

	For the period from July 25 to December 31, 2008
	Money			Islamic
	market and		Private	income and
	cash	Equity	Equity	leasing	Total
	US$	US$	US$	US$	US$

Net income from investments at fair value through profit or loss	-	(2,567,215)	(526,946)	66,584	(3,027,577)
Murabaha income	140,243	-	-	-	140,243

Total income	140,243	(2,567,215)	(526,946)	66,584	(2,887,334)

At December 31, 2008 Other information:
Segment assets	19,844,448	3,522,603	1,273,054	3,031,493	27,671,598

The Fund's other assets, total liabilities, total equity and expenses are not considered part of the performance of an individual segment.

During the year there were no revenues from transactions within other operating segments.

The following table analyses the Fund's total income per geographical location:

	Year ended	Period from July 25 to
	December 31, 2009	December 31, 2008
	US$	US$

Ireland	1,032,860	(1,595,478)
Luxembourg	365,329	140,243
Bahrain	102,476	-
Jersey	(19,749)	-
Malaysia	29,322	-
Bermuda	(21,604)	-
United States	205,837	(320,948)
United Kingdom	67,410	(205,998)
South Korea	(40,439)	-
Singapore	(12,102)	(281,619)
Saudi Arabia	215,891	(60,437)
British Virgin Islands	-	(563,097)
Cayman Islands	36,072	-

	1,961,303	(2,887,334)

The following table provides a reconciliation between total segment assets and total assets:

	2009	2008
	US$	US$

Segment assets	28,357,284	27,671,598
Other assets	153,150	500,707

	28,510,434	28,172,305

14 CAPITAL MANAGEMENT

The primary objectives of the Fund's capital management procedures are to ensure that the Fund maintains liquidity in order to support its business and to maximise shareholders' value. The Fund manages its capital structure and makes adjustments to it in light of changes in business conditions and risk characteristics of its activities. No changes in structure were made during the year.

15 FAIR VALUES OF FINANCIAL INSTRUMENTS

Financial instruments comprise financial assets and financial liabilities. The fair values of all financial instruments are not materially different from their carrying values as of the statement of financial position date.

16 TAXES

There is currently no taxation imposed on income by the Government of the Cayman Islands. If any form of taxation were to be enacted, the Fund has been granted an exemption therefrom for a period of 20 years from March 18, 2008. The only tax payable by the Fund on its income is withholding tax applicable to certain investment income. As a result of the above, no tax liability or expense has been recorded in the financial statements.

CURRENT INVESTING POLICY

The Company's current Investing Policy (prior to the acceptance or otherwise of the proposed changes to be put to Shareholders at the AGM on 15 June 2010) is as follows:

Investment objectives

The overriding principle

The Company's investment objective is to achieve long-term capital appreciation from a Shari'ah Compliant, diversified, investment portfolio characterised by a moderate level of risk. The Company operates under the overriding principle that all investments must be Shari'ah Compliant and that the Company's assets must be invested in accordance with the Shari'ah Screen. The Company's investment objectives have therefore been devised so as to provide investors with:

 a diversified pool of Shari'ah Compliant assets;

 consistent risk-adjusted returns over a market cycle via an active and diversified asset allocation programme;

 geographic diversification of investments, predominantly outside the GCC; and

 liquidity through trading of the Company's shares on AIM.

The portfolio of investments / assets

The Company seeks to invest its funds (through the Investment Manager) in Shari'ah Compliant economically-equivalent products for the majority of existing investment opportunities. The asset classes it may invest in are as follows:

Money market and cash

The Company may invest in assets under one or multiple Murabaha frameworks with different maturities and may hold cash from time to time.

Islamic income and leasing

The Company may invest in Shari'ah Compliant alternatives to income generating investments including:

 Sukuk;

 Ijarah;

 Musharakah;

 funds of various underlying structures holding a mix of the above assets; and/or

 a leasing portfolio with a strategic partner.

Equities

The Company may build a portfolio of equity investments and actively managed baskets of securities by investing through a diversified basket of index-linked investments and through funds or managed accounts with selected fund managers. The Company may, therefore, allocate capital to:

 equity funds;

 managed accounts with active investment managers investing within the Shari'ah Screen;

 publicly quoted equities;

 ETFs tracking Islamic indices or their sub-indices e.g. Dow Jones Islamic Market Indexes™; and/or

 ETFs tracking Shari'ah Compliant private equity investments.

Alternative investments

Upon satisfactory review by the SSB, the Company may invest in alternative investments and, in conjunction, may establish a variety of investment funds with specific mandates to satisfy this part of its investment objective. The Company may allocate capital to:

 Hedge Fund managers through managed accounts on a Shari'ah Compliant brokerage platform; and/or

 wrapper instruments that emulate conventional Hedge Fund returns in a Shari'ah Compliant manner.

Real Estate

The Company may invest in real estate including investments in:

 real estate funds; and/or

 a managed portfolio of direct properties in association with a selected partner or partners.

Private Equity

The Company may invest in private equity including investments in:

 private placements; and/or

 other private equity funds or co-investment opportunities (for example, the Co-Investment Fund).

Other

Alternative investments may also include currency and currency-linked products and investments driven by special situations and such other kinds of investment as the Investment Manager may determine from time to time acting through its Limited Discretion. The Investment Manager can also implement strategies through structured notes that are Shari'ah Compliant although it will not typically do so.

Investment Strategies

The Investment Manager is, in accordance with and subject to its Limited Discretion, responsible for devising investment strategies to satisfy the Company's investment objectives.

Investment Manager methodology

The Investment Manager, on behalf of the Company, seeks to achieve diversification of the Company's asset portfolio by investing in multiple asset classes in different geographical areas and engaging multiple third party portfolio managers. The Investment Manager may also achieve diversification by using Tactical Tilts to capture shorter term movements in the prices of assets and devising underlying strategies individual to each asset class or investment rather than adopting a single strategy across the portfolio. In addition, the Investment Manager may:

· formulate strategic and tactical views on liquid asset classes, geographies or sectors to prudently exploit market opportunities;

· analyse the various liquid asset classes in order to construct an efficiently diversified portfolio;

· utilise the above views as inputs into the portfolio construction process; and

· analyse the performance of illiquid assets including (at least) annual performance against budgets and the basis on which the initial investment was made.

The Company's investments will be passive investments in that the Company, or the Investment Manager acting on its behalf, will not take an active role in the management or the board of directors of any such investment.

The implementation of the Investment Strategy

The Investment Manager will formulate its views based on the review of internal and external analysis that include, but are not limited to: top-down macro analysis, bottom-up analysis, sector reviews, fundamental and technical analysis, brokers' research material, third party managers' screening and reviews, conferences or events and thematic research.

The Investment Manager implements its views on the market through a mix of investment vehicles including direct investments in liquid markets (Sukuk, equities, ETFs), Fund of Funds (managed by the Investment Manager or by third parties) and pooling vehicles to generate economies of scale. On an ongoing basis, the Investment Manager will:

· utilise a top-down portfolio construction process starting with asset allocation and then filtering the asset allocations down to regions, countries and/or sectors;

· continually develop its views of the markets based on macroeconomic and micro components;

· challenge its market views internally and always compare them against external research; and

· aim to select and appoint the best managers (in relation to the specific economic climate and the desired risk, return and volatility requirement for that portion of the asset allocation).

Asset allocation

The Company targets a degree of risk above that of a conservative diversified portfolio, but below that of a long-only equities portfolio. The Company seeks to invest its assets in accordance with the Investment Manager's investment philosophy which incorporates quantitative risk control and portfolio construction tools to manage the return expectations effectively against the level of volatility and maximum acceptable loss to the Company over the investment timeframe, being a full market cycle.

The Investment Manager utilises its professionals and its tools in order to manage a portfolio of investments that is designed to achieve diversification through asset allocation. The Investment Manager's approach seeks to avoid concentrating the Company's assets in a single asset class, in a unique investment, or in a specific geographical area because it believes that doing so increases the risks on any portfolio. Organised and structured asset allocation can provide an attractive means of balancing the risks of investing and this approach represents one of the key objectives of the Company.

The Investment Manager has devised its allocation between each major asset class to fit the Company's investment objectives, taking into account the risk/return balance and the level of volatility required and accepted.

The Investment Manager is required to work within the target range of allocation levels for each asset class as set out in the diagram below to enable it to have a greater degree of flexibility in managing the Company's assets.

The target asset allocation ranges are as follows:

	Money market /cash	Islamic income /leasing	Equity*	Alternative investments	Real estate	Private equity
Maximum	100%	40%	40%	20%	15%	15%
Range	10%-100%	0%-40%	0%-40%	0%-20%	0%-15%	0%-15%

*It should be noted that investments in private equity ETFs are included within the equity proportion of the asset allocation.

The Investment Manager may, at its Limited Discretion, allocate different proportions of the Company's NAV outside these ranges where it believes doing so will achieve the Company's investment objectives and is in the best interests of Shareholders or to take advantage of short-term opportunities. Such active movements outside of these ranges requires prior approval by the Board whereas involuntary or passive movements as a result of, for example, the increase or decrease in value of a particular asset class due to its performance would require ratification at the first quarterly Board meeting following the date the range is breached.

The Investment Manager will use its best efforts to diversify holdings within each selected asset class without limitation and to avoid concentrating the Company's assets with a single manager, in a single investment or in a specific geographical area because it believes that this strategy will decrease the risks on the portfolio.

There is no intention to invest more than 20% of the Company's gross assets with a single fund manager or in a single investment vehicle. However, as the Company deploys funds initially, or as it reallocates them as a consequence of a significant policy change in the future, it is possible that more than 20% of the gross assets could temporarily be with a single fund manager or in a single investment vehicle. The risk associated with this is spread as a result of the overall diversified investment portfolio as outlined in the Company's investment objectives and strategy above.

Investment Restrictions

Shari'ah Compliance

The Company operates under the overriding principle that all investments must be Shari'ah Compliant. The SSB determines whether investments are Shari'ah Compliant as far as the Company is concerned.

Shari'ah Screen and Shari'ah Compliance

The Company's policies, activities and investments must be in compliance with the principles and precepts of Shari'ah, as determined by the SSB, and must always be conducted under the supervision of the SSB. The SSB also provides certain guidelines to the Investment Manager by means of the Shari'ah Screen, enabling the Investment Manager to make certain restricted and specific investments without requiring the prior approval of the SSB.

Further, the SSB provides advice, guidance and opinions by way of fatwas in relation to the Company's investments. The SSB will review material documents and instruments relating to the investments undertaken by the Investment Manager.

Other Investment Restrictions

 Any variation to the Company's Investment Policy would require agreement by the Board under the supervision of the SSB and any material change would require Shareholder consent in accordance with the AIM Rules.

 The Company may not invest directly in derivatives, financial instruments and/or currencies other than for the purposes of efficient portfolio management (i.e. solely for the purpose of reducing, transferring or eliminating investment risk in the underlying fund, but not for speculative targets).

 Any pre-existing investments made by the Investment Manager (or any of its affiliates) that are offered or recommended to the Company shall be subject to both an external valuation and specific pre-approval by the Board.

 The Company may not invest directly in physical commodities but may do so through Murabaha arrangements which can represent up to 100% of the Company's assets.

 The Investment Manager will not typically invest in structured notes or products unless such vehicles are Shari'ah Compliant and are, in the view of the Investment Manager, the most efficient way to participate in given underlying assets.

 There are no limits on the Company's level of leveraging.

 The Company is not a property collective investment undertaking, however the Company may seek to invest in property from time to time.

The nature of returns to Shareholders

The Company's absolute return orientated portfolio construction approach focuses on generating returns independently of any benchmark and not relative to any benchmark. The Company aims to generate superior returns to those of normal cash returns over a full economic and business cycle with the objective of delivering consistent risk-adjusted returns over a market cycle via a diversified asset allocation programme of passive investments.

Definitions

In this announcement, where the context permits, the expressions set out below shall bear the following meanings:

AIM	the AIM market of the London Stock Exchange.
AIM Rules	together, and as amended from time to time, the AIM Rules for Companies and the AIM Rules for Nominated Advisers, governing admission to and the operation of AIM, as published by the London Stock Exchange.
Board	the Board of Directors for the time being of the Company.
Co-Investment Fund	TFO Shari'ah Co-Investment Fund SPC.
Company or The Family Shari'ah Fund	The Family Shari'ah Fund Limited, an exempted Cayman Islands incorporated closed-ended fund company with company number SH-206066.
Depository	Computershare Investor Services plc or such other persons from time to time appointed by the Board on behalf of the Company as its depository.
Depository Interest or DI	the dematerialised depository interests representing Ordinary Shares in uncertificated form issued to a holder on the terms of the DI Deed Poll.
DI Deed Poll	the trust deed poll dated 8 May 2008 under which the Depository issues DIs to holders representing an interest in the underlying Ordinary Shares and holds the corresponding Ordinary Shares as bare trustee for the DI Holders.
DI Holders	the holder of a DI issued pursuant to the DI Deed Poll.
GCC	the Gulf Cooperation Council, also known as The Cooperation Council for the Arab States of the Gulf (CCASG), a trade bloc comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE.
Investment Manager	TFO.
Investment Management Agreement	the investment management agreement between the Investment Manager and the Company dated 18 July 2008.
Limited Discretion	at the discretion of the Investment Manager, subject to compliance with, inter alia, the Shari'ah Screen and the restrictions outlined in the Investment Management Agreement and associated Schedules.
London Stock Exchange	London Stock Exchange plc.
NAV	the total assets of the Company less its total liabilities (including accrued but unpaid fees) as determined by guidelines laid down by the Board from time to time.
Ordinary Shares or Shares	ordinary shares with a par value of US $0.01 each in the capital of the Company.
Shareholder	a holder of any legal or beneficial interest, whether direct or indirect, in one or more Ordinary Shares including DI Holders.
Shari'ah	the divine Islamic "law" as revealed in (i) the Qur'an, which is the holy book of Islam, (ii) the Sunna, or binding authority of the dicta and decisions of the Prophet Mohammed (peace be upon him), (iii) ijma, or "consensus" of the community of Islamic scholars, and (iv) the qiyas, or analogical deductions and reasoning of the Islamic scholars with respect to the foregoing.
Shari'ah Compliant or Shari'ah Compliance	compliant with, or in compliance with, the principles and precepts of Shari'ah as determined by the SSB.
Shari'ah Screen	the specified guidelines developed and applied by the SSB in accordance with Shari'ah (as determined by the SSB) from time to time in connection with the activities and business of the Company including those applicable to individual structural elements of investment, acquisition, disposition, operating and financing transactions engaged in by the Company.
SSB	the Shari'ah Supervisory Board appointed by the Company to oversee its operations and ensure its compliance with Shari'ah precepts (as determined by the SSB).
TFO	The Family Office Company B.S.C.(Closed), a Bahrain closed-ended stock company incorporated in Bahrain on 19 May 2004 with company registration number 53871. TFO's commercial name is The Family Office and it is licensed by the Central Bank of Bahrain as an Investment Business Firm - Category 1.
UAE	the United Arab Emirates.
US	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia.
US $ or USD	US dollars.

Glossary

ETF	exchange traded fund, a fund that tracks an index, a fund, a sector, a geography or a group of shares that is traded like a share on an open market.
Fund of Funds	an investment fund that uses an investment strategy of holding a portfolio of other investment funds rather than investing directly in securities.
Hedge Fund	a fund which is allowed to use aggressive strategies that may be unavailable to certain other funds, including selling short, leveraging, program trading, swaps, arbitrage, and derivatives. Hedge funds are generally highly speculative and are not, therefore, generally Shari'ah Compliant, unless tailored on specifically designed Islamic platforms.
Ijarah	an Islamic lease agreement. Ijarah allows the owner of the assets (often a bank) to earn profits by charging rentals on the asset leased to the customer. Ijarah-wa-iqtinah extends the concept of Ijarah to a hire and purchase agreement.
Murabaha	purchase and resale with a mark-up. The capital provider purchases the desired commodity at cost price from a third party and resells it at a predetermined higher price (which is the sum of the cost price and profit) to the capital user.
Musharakah	a partnership where profits are shared according to an agreed ratio whereas the losses are shared in proportion to the capital / investment of each partner. In a Musharakah, all partners to a business undertaking contribute funds and have the right, but not the obligation, to exercise executive powers in that project, which is similar to a conventional partnership structure and the holding of voting stock in a limited company.
Private equity	equity which is not traded on a public market.
Shari'ah Compliant Hedge Fund	a Hedge Fund which is allowed to use aggressive (Shari'ah Compliant) strategies that may be unavailable to certain other funds and invests in Shari'ah Compliant underlying assets.
Sukuk	certificates which represent proportionate undivided beneficial ownership rights in the underlying asset. There are several types of Sukuk. The more common Sukuk is the "Sukuk Ijarah". The asset will be leased to the client to yield the return on the investment.
UCITS	Undertakings for Collective Investment in Transferable Securities - the name given by the EU to pan-European investment funds which comply with the UCITS Directive.
Tactical Tilts	short-term investments or sets of investments grouped in a particular strategy and deployed so as to take advantage of a particular market situation or environment.