Investment-Linked Funds Performance Report For The Year Ended 31 March 2014

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2 Message from the CEO Dear Valued Policyholder, The last quarter of our 2013/14 Financial Year was a historic time for us as we welcomed our new shareholders Prudential Financial, Inc. (PFI)* and Bank Simpanan Nasional (BSN). Subsequently, on 29 April 2014, we changed the company s name to Gibraltar BSN Life Berhad (Gibraltar BSN Life). PFI is a financial services leader with more than $1.1 trillion of assets under management as of March 31, 2014 and operations in the United States, Asia, Europe and Latin America. Leveraging its heritage of life insurance and asset management expertise, PFI is focused on helping individual and institutional customers grow and protect their wealth. In the U.S., the company s The Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. PFI s businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. BSN, a statutory body under the Ministry of Finance, was established on December 1, Since its inception, all the duties and responsibilities under the Post Office Savings Bank were taken over by BSN. The bank s mission is to encourage savings, investment and smart financial management among Malaysians to improve the well-being and quality of life. BSN has more than 6,700 employees, 398 branches, 999 automated teller machines (ATMs), 317 cash deposit machines (CDM) across the country and more than 5,000 Registered Banking Agents (Ejen Bank Berdaftar) or EBB BSN across the country. BSN has over 8 million customers across Malaysia with retail deposits amounting to RM 12 billion (as of October 2013). Using the tagline, A Refreshing Approach to Life Insurance, we are focusing on offering different and better life insurance solutions to all Malaysians. With the global experience of PFI and the local expertise of BSN, you can expect more innovative products from Gibraltar BSN Life in the months and years to come. As for our performance in 2013/14 Financial Year, I am pleased to share with you our Gibraltar BSN Aggressive Fund recorded the highest growth at 48.48% while Gibraltar BSN Strategic Fund came in second with 24.31% growth. 2014/15 Financial Year will be an exciting period for Gibraltar BSN Life as we implement various initiatives and strategies in our effort to expand the business. As our valued Policyholder, protecting your best interest will remain our key priority and we look forward to share our success with you. Thank you. Regards Vincent Kwo Shih Kang Chief Executive Officer *Prudential Financial, Inc. (PFI) and its affiliated companies are not affiliated in any manner with Prudential plc., a company incorporated in the United Kingdom. 2

3 Fund Investment Objectives GIBRALTAR BSN AGGRESSIVE FUND (formerly known as Uni Aggressive Fund) Gibraltar BSN Aggressive Fund aims to achieve consistent and above average capital appreciation over the medium to Iong-term by investing in companies with market capitalization of not more than RM750 million at the time of acquisition. GIBRALTAR BSN STRATEGIC FUND (formerly known as Uni Strategic Fund) Gibraltar BSN Strategic Fund aims to achieve consistent capital appreciation over the medium to Iong-term by investing mainly in companies that has been systematically filtered through a series of pre-determined financial criteria. GIBRALTAR BSN ASIAEQUITY FUND (formerly known as Uni AsiaEquity Fund) Gibraltar BSN AsiaEquity Fund aims to achieve consistent, above-average capital appreciation and reasonable income over the medium to Iong-term by investing in a balanced portfolio of quality investments in Malaysia and Asia excluding Japan. GIBRALTAR BSN INCOME FUND (formerly known as Uni Income Fund) Gibraltar BSN Income Fund aims to achieve capital preservation over the medium-term while providing a stable long-term and secured income return by investing primarily in a portfolio of investment-grade fixed income securities. GIBRALTAR BSN BOND FUND (formerly known as Uni Bond Fund) Gibraltar BSN Bond Fund aims to achieve capital preservation over the medium-term while providing a stable long-term and secured income return by investing primarily in a portfolio of investment-grade fixed income securities. GIBRALTAR BSN GLOBAL IPO FUND (formerly known as Uni Global IPO Fund) Gibraltar BSN Global IPO Fund aims to achieve medium to long-term capital growth by investing in a single collective investment scheme that invests primarily in IPOs, post IPO listed securities, interest bearing debt securities and/or deposits. GIBRALTAR BSN GOLD AND GENERAL FUND (formerly known as Uni Gold and General Fund) Gibraltar BSN Gold and General Fund aims to achieve long-term capital growth by investing in a single collective investment scheme that invests in companies involved in the exploration of precious metals, energy and base metals. GIBRALTAR BSN ASIA PACIFIC INFRASTRUCTURE FUND (formerly known as Uni Asia Pacific Infrastructure Fund) Gibraltar BSN Asia Pacific Infrastructure Fund aims to achieve medium to long-term capital growth by investing in a single collective investment scheme that invests primarily in securities (equities or equity-related securities) issued by companies which carry on infrastructure-related businesses in the Asia-Pacific region. GIBRALTAR BSN GOLDEN HARVEST FUND (formerly known as Uni Golden Harvest Fund) Gibraltar BSN Golden Harvest Fund aims to provide a 5½-year 100% capital guaranteed investment (if held till maturity) that offers investors the opportunity to participate in DB Commodity Harvest 3.5% Target Vol ER AC Index s performance which is linked to commodity prices across energy, precious metals, industrial metals, agriculture, and livestock sectors. GIBRALTAR BSN CASH FUND (formerly known as Uni Cash Fund) Gibraltar BSN Cash Fund aims to provide liquidity by investing in low risk money market instruments with high degree of capital preservation. Notes: Fund management fees of 1.50% p.a of Net Asset Value are levied on Gibraltar BSN Aggressive Fund, Gibraltar BSN Strategic Fund, Gibraltar BSN AsiaEquity Fund, Gibraltar BSN Global IPO Fund, Gibraltar BSN Gold and General Fund and Gibraltar BSN Asia Pacific Infrastructure Fund. Fund management fees of 1.00% p.a of Net Asset Value are levied on Gibraltar BSN Income Fund and Gibraltar BSN Bond Fund. Fund management fees of 0.75% p.a of Net Asset Value is levied on Gibraltar BSN Cash Fund. 3

4 Investment Review MALAYSIAN EQUITY MARKET REVIEW During the period under review, the broader market FBM Emas Index added 12.1% while FBM KLCI rose 10.6%. Among regional markets, the top performers were Vietnam, India, and Japan while the laggards were China, Thailand, and Singapore. At the start of the review period, the Malaysian market was weighed down by the impending General Election that was eventually held in May Post the General Election, the Malaysian market staged a strong rally as political uncertainty was removed after the incumbent, Barisan Nasional, retained power but with a reduced majority. Entering into the middle of the year, the local market had a rough ride. The US Federal Reserve (Fed) spooked the market when the central bank chairman hinted to start slowing bond purchases before the year end. The Malaysian and Emerging Markets equities turned volatile as selldown ensued with funds flowing back to the Developed Markets. Subsequently, the local equity market suffered another selldown when the country s sovereign debt rating outlook was downgraded to negative from stable by Fitch Ratings. As a result of various negative headwinds, the selling pressure increased and accelerated the local market decline. However, Malaysian equity market exhibited its resiliency largely thanks to the support of domestic investors and also due to the defensive nature of the local bourse. Besides, the country s economic fundamental remain resilient with steady gross domestic product growth and positive trade balance, with the exception of budget deficit, lending support to the equity market. On the other hand, some Emerging Markets suffered continuous selldown as result of deteriorating economic fundamentals. The Fed surprised the markets by delaying Quantitative Easing (QE) tapering in its September 2013 meeting. This helped to provide some short term relief to the local market. It continued its ascent towards end 2013 with multiple record highs as investors were positive on the structural reforms introduced by the government. These include fiscal consolidation measures like subsidy rationalisation and the announcement of implementation of Goods and Services Tax (GST) in

5 Investment Review (continued) MALAYSIAN EQUITY MARKET OUTLOOK AND STRATEGY The US Federal Reserve has announced the commencement of QE tapering in This is expected to trigger continuous outflows from Emerging Markets to Developed Markets and hence, persistent weakness to Asian markets. However, we believe that the impact would be lesser compared to mid-2013 when QE tapering fears first cropped up as investors have already been adjusting their portfolios since mid Beyond the short term impact from QE tapering, we believe that the improving outlook in the US and Eurozone economies would eventually be positive for the growth prospects of Asian markets including Malaysia. On the local front, one of the fundamental concerns is the country s fiscal position but recent announcements by the government including GST and the rollback of subsidies for fuel and sugar would help to soothe some of those concerns. In the short term, this would have a negative impact on consumption. However, we think that it would be a case of short term pain to achieve fiscal consolidation in the medium to long term. In terms of strategy, we remain positive on the local bourse due to favourable liquidity conditions, positive momentum from Economic Transformation Programme (ETP), and better outlook for crude palm oil (CPO) prices. We will continue to be well invested in equities and concentrate on opportunities in selected investment themes like ETP, pricing power, and capital management. 5

6 Investment Review (continued) GLOBAL EQUITY MARKET REVIEW 2013 can be characterised as a year of divergence, where Developed Markets significantly outperformed Emerging Markets. It was also a year where performance came in spurts in early and late 2013, after a midyear correction. The strong performance was underpinned by improved economic momentum in the US and a broadening out of the US recovery to the rest of the world with leading economic indicators for most major countries improved in the second half of the year. At the same time, Europe has slowly emerged from recession in the third quarter of the year. The recoveries of major economic powerhouses provided a favorable backdrop to the overall global equity market. Global equities performed strongly with the MSCI AC World Index up by 14.2% in US dollar terms for the period between 31st March 2013 and 31st March Equity markets did particularly well in the first half of the year, but surrendered much of their gains after the US Federal Reserve (Fed) hinted at a possible reduction in the US Quantitative Easing (QE) program. Investors were also concerned with the slowdown in China and were spooked by the spike in the China s interbank lending rate, Shanghai Interbank Offered Rate (SHIBOR). A divergence in economic momentum coupled with the expectation of higher interest rates, triggered a reversal of capital flows from the Emerging Markets back to the Developed Markets. This resulted in steep declines in many of the Emerging Markets equities, and acute weakness in certain currencies. However, conditions slowly stabilised in the second half of 2013 when the Fed assured that it will maintain an accommodative monetary policy even with the reduction in bond purchasing program. Most markets recovered and scaled higher as economic data improved across the globe. On the policy front, US lawmakers managed to once again avert the fiscal cliff, this time avoiding any government shutdown. Meanwhile, the European Central Bank (ECB) continued its accommodative monetary policies with a 25bps cut in their benchmark interest rate which lifted the equities markets. The Bank of Japan joined in the fray and announced plans for a significant monetary expansion to stabilise prices and restore modest inflation. In terms of sector performance, commodity related sectors (materials and energy) lagged the broader market. It was due to the slowdown in Chinese economy and the effects of the US QE tapering which resulted in a stronger US dollar. Utilities and real estate also underperformed as investors shunned interest rate sensitive sectors. On the other hand, defensive stocks from the healthcare sector did well, so did the consumer discretionary companies that were beneficiaries of the global recovery. The US market was the top performing region. The US economic indicators improved steadily while corporate earnings surprised positively despite some initial concerns over the economic outlook due to fiscal adjustment. The US unemployment rate fell rapidly from 7.5% in March 2013 to 6.7% in March While part of the improvement in unemployment was due to a drop in the participation rate, there is no arguing with the fact that the US recovery was building in momentum. The combination of better economic data, stronger corporate sector results, lower inflationary pressure, and low interest rates, drove inflows into US equities. As investors became comfortable that the US tapering would not adversely affect the US economy and monetary policy would not be tightened further, the US markets advanced to new highs. 6

7 Investment Review (continued) GLOBAL EQUITY MARKET REVIEW (continued) Japanese markets rallied strongly in early 2013 following a shift in policy, initiated by Prime Minister Shinzo Abe. Monetary easing by the Bank of Japan resulted in reinvigorating asset prices and driving down the Yen exchange rate. The shift in monetary conditions, coupled with changes to the fiscal stimulus and tax policy provided a boost to domestic demand. However, by mid-year, Japanese equity markets took a pause due to rising concerns of further Fed tapering, and fears that reforms have not been clearly outlined and implemented. Bigger challenges lie ahead in the form of broad-based reforms ranging from corporate taxes, labour market reforms and immigration. These reforms are still yet to be introduced, and their impacts remain uncertain. European equities were flat in the first half of the year due to unease over the Italian election impasse in February 2013, and the Cypriot bank bailout in March Economic indicators also pointed to a deepening recession in Europe. However, things took a turn for the better as the economies recovered in the second half of the year and early 2014 with European equities staging a strong rally that corresponded with the region coming out of recession. The ECB reduced interest rates to counter the deflation threat from stalling the Euro zone s recovery. Supportive monetary conditions and modestly improving economic data provided a boost to markets. Emerging Markets equities generated very poor returns in Economic conditions in some of the developing countries have deteriorated due to weak fundamental, for example, weak external demand, fiscal and current account deficits and high inflation. In addition, capital flows reversed arising from QE tapering created additional pressures on the exchange rates. Only towards the end of the year did conditions start to stabilise. 7

8 Investment Review (continued) GLOBAL EQUITY OUTLOOK & STRATEGY The US economic recovery appears to be slowly gaining momentum. A gradual pickup in employment, steady improvement in the housing market, and reduced fiscal drag should combine to provide a solid platform for expansion into We believe that the earnings outlook will improve as the unemployment rate continues to decline, the backdrop of inflation remains benign, and aggregate demand slowly expands. As such, we retain a positive view on the US market. In Europe, the picture is more complicated. Growth is still significantly below potential in the majority of the Euro zone countries, unemployment levels remained stubbornly high in peripheral Europe, financial system deleveraging is still underway and the path to fiscal union is still not complete. Nevertheless, the region seems to have recovered, and we believe there will be opportunities in the export sectors. Having said that, the situation has to be monitored closely and the opportunities are very much bottom-up in nature. Japan has achieved some initial success with its expansionary monetary and fiscal policies. The economy has recovered somewhat, and inflation has picked up. However, there is still significant work ahead and it remains unclear how the increase in sales tax will impact domestic demand in The concerns we have are two folds: first the challenges in implementing structural reform, and second the long lag before these policies impact demand. As is the case with Europe, our approach to Japan is to identify opportunities that should perform well regardless of how effective domestic reforms turn out to be. Emerging Markets are not behaving in a homogenous manner. The slowdown in world growth and the shift in monetary conditions have revealed a wide range of problems that are likely to adversely impact near term growth and the performance of markets in aggregate. As is the case of the regions going through structural shifts, bottom-up stock selection will be critical. As this transformation takes shape, opportunities are likely to arise in new areas. For example, what worked in the past in China investing in sectors and companies that benefit from fixed asset investment is unlikely to work now as the Chinese economy rebalances. It is important for investors to take note that the developing world continues to generate above average growth, but it is equally important to understand that economic growth does not always translate to opportunities for investors. We do still find some excellent opportunities, but we do so in less conventional ways than in the past. Just as the Emerging Markets are undergoing rapid transformation, investors approach to these regions also has to change. We continue to prefer Developed Market equities over Emerging Market equities. 8

9 Investment Review (continued) BOND MARKET REVIEW 2013 was once again a challenging and capricious year for local bond investors despite the signs of stability in the global economy. The run up to the local General Election dominated investors thoughts in the early parts of 2013 while the speculation on the timing of when the US Federal Reserve (Fed) will scale back its Quantitative Easing (QE) programme drove investor sentiment in the second half of the year. These events caused short-term volatilities in the fixed income markets throughout the year. In the local bond market, the Malaysian government bonds rallied after the General Election in May as the election results was viewed positively by market players, which took out the political risk element from the domestic financial markets. At the same time, the rally, which pushed short-dated yields below the Overnight Policy Rate (OPR) (which was 3%), was supported by the release of relatively soft domestic economic data. However, in the 19 June 2013 Federal Open Market Committee (FOMC) meeting, the then Fed Chairman Ben Bernanke highlighted the possibility of QE tapering in late 2013 and the QE3 programme may be completely ended by mid-2014 if the US economy stays on stable course. This triggered huge fund outflows out of Emerging Markets and the local bond market was not spared. As a result, foreign holdings of the total outstanding Malaysian Government Securities (MGS) fell to 44.6% in January 2014 from an all time high of 48.3% in April Despite the release of a more prudent 2014 Budget by the Malaysian government, the local bond market remained lacklustre and continued to track the movement in US Treasuries (UST) market for the remaining of the year as investors continued to speculate on the timing of QE tapering. At the same time, the resumption of subsidy rationalisation has led to rising inflationary pressure in the domestic economy and given as such, market players started to price in a possible rate hike in Nonetheless, in the 18 December 2013 FOMC meeting, the Fed finally announced that it will start tapering the pace of the QE exercise, beginning January 2014, by reducing USD10 billion off the existing USD85 billon monthly bond purchase programme. The pace of tapering has since been maintained in the subsequent two FOMC meetings held in January and March 2014 while the local MGS market have generally continued to trade range bound during this period. Similarly, corporate bond yields have also been gradually rising in tandem with the upward movement in MGS yields seen earlier while new issuances are beginning to be priced at relatively more attractive levels to reflect the wider credit spreads. Movement of 3, 5 and 10-year MGS 4.50 MALAYSIAN GOVERNMENT SECURITIES Apr -13 May -13 Jun -13 Jul -13 Aug -13 Sep -13 Oct -13 Nov -13 Dec -13 Jan -14 Feb -14 Mar -14 Source: Bloomberg 3 Years MGS 5 Years MGS 10 Years MGS 9

10 Investment Review (continued) BOND MARKET OUTLOOK The tone for the MGS market is likely to be set by an interplay of factors: medium and long dated government bonds, suggesting a supply constraint of short-dated papers in We expect global markets to remain choppy especially if US continues to see an uneven growth trajectory. the event of continued Ringgit weakness. Against the above mentioned backdrop, we reckon that market players will likely remain cautious in the domestic scene. With inflation creeping higher, we believe that the upward trajectory for inflation will likely persist in the near term as highlighted by Bank Negara Malaysia (BNM) in its 2013 annual report. Nonetheless, we note that BNM has continued to maintain its view that the current inflationary pressure is still very much cost pushed rather than demand pulled. Coupled with an expectation for moderate domestic growth, we believe that the OPR will likely remain unchanged in the first half of In the longer term, we do not discount of the possibility of a rate hike if inflation remains elevated for an extended period of time. In the corporate bond market, supply pipeline is expected to pick up with the construction of the Mass Rapid Transit (MRT) project gathering pace, especially in the Government Guaranteed Bond segment that will likely tap the primary market for additional funding. Apart from that, we also expect more corporations to tap the bond market for funding due to the bank lending constraints that were caused by stringent Basel III standards. At the same time, new issuances are likely to be priced at more attractive levels on expectations of rising interest rates. 10

11 Investment Review (continued) INVESTMENT STRATEGY Structurally, we will continue to maintain our cautious investment approach as the local bond market digests the impact of QE tapering and US Federal Reserve s hawkish guidance. Given the outlook of rising interest rates, we expect the local bond yields to drift higher towards the end of The rising interest rate environment would present good opportunities for us to reinvest at relatively attractive levels. Our strategy can be summarized as follows:- Portfolio Duration Consumer Price Index to remain elevated and market to continue to be volatile on the evolving interest rate outlook. Tactically, short-lived trading positions on duration will be adopted when opportunity arises. Security Selection corporate bonds for spread buffers, with an emphasis on liquidity and credit quality; the secondary market; and 11

12 Fund Performance GIBRALTAR BSN AGGRESSIVE FUND Net asset value per unit of Gibraltar BSN Aggressive Fund rose by % since inception date (1 April 2005 RM to 31 March 2014 RM1.7492). For the period 31 March 2013 to 31 March 2014, Gibraltar BSN Aggressive Fund rose by 48.48% Gibraltar BSN Aggressive Fund Net Asset per Unit Movement Net Asset Value per Unit Apr-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Gibraltar BSN Aggressive Fund Portfolio Composition as at 31 March 2014 Other Assets & Liabilities 19.04% Consumer Products 13.55% Finance 2.08% Industrial Products 10.11% Trading/Services 47.97% Properties 3.40% Infrastructure 3.85% 12

13 Fund Performance (continued) GIBRALTAR BSN STRATEGIC FUND Net asset value per unit of Gibraltar BSN Strategic Fund rose by % since inception date (1 April 2005 RM to 31 March 2013 RM1.6442). For the period 31 March 2013 to 31 March 2014, Gibraltar BSN Strategic Fund rose by 24.31% Gibraltar BSN Strategic Fund Net Asset per Unit Movement Net Asset Value per Unit Apr-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Gibraltar BSN Strategic Fund Portfolio Composition as at 31 March 2014 Other Assets & Liabilities 17.98% Construction 6.48% Consumer Products 4.43% Finance 11.29% Trading/Services 26.08% Industrial Products 15.74% Technology 3.53% Properties Infrastructure 4.58% 3.05% Plantations 6.84% 13

14 Fund Performance (continued) GIBRALTAR BSN ASIAEQUITY FUND Net asset value per unit of Gibraltar BSN Strategic Fund rose by 34.95% since inception (4 August 2005 RM to 31 March 2014 RM0.6410). For the period 31 March 2013 to 31 March 2014, Gibraltar BSN AsiaEquity Fund reduced by 3.88% Gibraltar BSN AsiaEquity Fund Net Asset per Unit Movement Net Asset Value per Unit Apr-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Gibraltar BSN AsiaEquity Fund Portfolio Composition as at 31 March 2014 Other Assets & Liabilities 20.26% Foreign Equities 33.78% Domestic Equities 45.96% 14

15 Fund Performance (continued) GIBRALTAR BSN INCOME FUND Net asset value per unit of Gibraltar BSN Income Fund rose by 44.06% since inception (22 September 2005 RM to 31 March 2014 RM0.7131). For the period 31 March 2013 to 31 March 2014, Gibraltar BSN Income Fund rose by 0.81% Gibraltar BSN Income Fund Net Asset per Unit Movement 0.71 Net Asset Value per Unit Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Gibraltar BSN Income Fund Portfolio Composition as at 31 March 2014 Other Assets & Liabilities 9.26% Infrastructure 5.22% Consumer 0.56% Finance 23.15% Utility-Power 29.13% Others 6.49% Toll Road 10.46% Telecommunication 7.03% Services 5.44% Retail 3.26% 15

16 Fund Performance (continued) GIBRALTAR BSN BOND FUND Gibraltar BSN Bond Fund s net asset value per unit rose by 36.27% for the period 31 March 2013 to 31 March Since inception (29 September 2005), Gibraltar BSN Bond Fund s net asset value per unit rose by 0.81%. Gibraltar BSN Bond Fund Net Asset per Unit Movement 0.66 Net Asset Value per Unit Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Gibraltar BSN Bond Fund Portfolio Composition as at 31 March 2014 Other Assets & Liabilities 17.97% Infrastructure 5.57% Consumer 3.00% Finance 24.53% Utility-Power 18.80% Gaming 2.25% Toll Road 10.06% Telecommunication 5.07% Services 5.81% Retail 2.32% Others 4.62% 16

17 Fund Performance (continued) GIBRALTAR BSN GLOBAL IPO FUND For the period 31 March 2013 to 31 March 2014, Gibraltar BSN Global IPO Fund s net asset value per unit reduced by 1.69%. Since inception (15 February 2007), the fund has reduced by 30.11% Gibraltar BSN Global IPO Fund Net Asset per Unit Movement Net Asset Value per Unit Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Mar-13 Sep-13 Mar-14 Gibraltar BSN Global IPO Fund Portfolio Composition as at 31 March 2014 Other Assets 4.38% United Global IPO 95.62% 17

18 Fund Performance (continued) GIBRALTAR BSN GLOBAL IPO FUND (continued) Gibraltar BSN Global IPO Fund's Allocation By Country as at 31 March 2014 Others 11.29% Cash 9.87% Hong Kong 22.78% Brazil 11.17% Canada 12.74% Indonesia 5.05% United Kingdom 8.54% United States 18.56% Gibraltar BSN Global IPO Fund's Allocation by Sector as at 31 March 2014 Materials 2.50% Information Technology 7.58% Financials 10.68% Others 1.60% Consumer Staples 4.91% Cash 9.87% Energy 34.14% Consumer Discretionary 28.72% 18

19 Fund Performance (continued) GIBRALTAR BSN GOLD AND GENERAL FUND For the period 31 March 2013 to 31 March 2014, Gibraltar BSN Gold and General Fund s net asset value per unit reduced by 20.38%. Since inception 06 September 2007, Gibraltar BSN Gold and General Fund s net asset value per unit reduced by 31.98%. Gibraltar BSN Gold & General Fund Net Asset per Unit Movement 0.70 Net Asset Value per Unit Feb-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Gibraltar BSN Gold & General Fund's Portfolio Composition as at 31 March 2014 Other Assets 6.58% United Gold & General 93.42% 19

20 Fund Performance (continued) GIBRALTAR BSN GOLD AND GENERAL FUND (continued) Gibraltar BSN Gold & General Fund's Allocation by Country as at 31 March 2014 South Africa 4.17% Hong Kong 1.75% Others 1.99% Cash 1.73% Australia 19.47% Canada 42.43% United Kingdom 9.04% United States 19.42% Gibraltar BSN Gold & General Fund's Allocation by Sector as at 31 March 2014 Cash 1.73% Energy 5.94% Gold & Precious Metals 54.70% Materials 37.63% 20

21 Fund Performance (continued) GIBRALTAR BSN ASIA PACIFIC INFRASTRUCTURE FUND For the period 31 March 2013 to 31 March 2014, Gibraltar BSN Asia Pacific Infrastructure Fund s net asset value per unit rose by 2.30%. Since inception on 15 November 2007, Gibraltar BSN Asia Pacific Infrastructure Fund s net asset value per unit reduced by 28.02%. Gibraltar BSN Asia Pacific Infrastructure Fund Net Asset per Unit Movement Net Asset Value per Unit Nov-07 May-08 Nov-08 May-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Sep-12 Mar-13 Sep-13 Mar-14 Gibraltar BSN Asia Pacific Infrastructure Fund's Portfolio Composition as at 31 March 2014 Other Assets 3.11% United Asia Pacific Infrastructure Fund 96.89% 21

22 Fund Performance (continued) GIBRALTAR BSN ASIA PACIFIC INFRASTRUCTURE FUND (continued) Gibraltar BSN Asia Pacific Infrastructure Fund's Allocation by Country as at 31 March 2014 Cash 6.62% China 8.94% Others 19.52% Singapore 14.40% Indonesia 8.65% India 20.50% Thailand 9.98% Hong Kong 11.39% Gibraltar BSN Asia Pacific Infrastructure Fund's Allocation by Sector as at 31 March 2014 Telecommunication Service 3.54% Materials 4.21% Others 4.63% Cash 6.62% Industrials 35.50% Financials 8.62% Energy 23.53% Utilities 13.35% 22

23 Fund Performance (continued) GIBRALTAR BSN GOLDEN HARVEST FUND Since inception (9 September 2010 to 31 March 2014), Gibraltar BSN Golden Harvest Fund s net asset value per unit reduced by 3.27%. For the period 31 March 2013 to 31 March 2014, Gibraltar BSN Golden Harvest Fund s net asset value per unit rose by 2.16%. Gibraltar BSN Goldan Harvest Fund Net Asset per Unit Movement Net Asset Value per Unit Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 23

24 Fund Performance (continued) GIBRALTAR BSN CASH FUND Since inception (3 October 2011 to 31 March 2014), Gibraltar BSN Cash Fund fund s net asset value per unit rose by 5.92%. For the period 31 March March 2014, Gibraltar BSN Cash Fund s net asset value per unit rose by 2.32% Gibraltar BSN Cash Fund Net Asset per Unit Movement Net Asset Value per Unit Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Dec-12 Apr-13 Jul-13 Sep-13 Dec-13 Mar-14 Gibraltar BSN Cash Fund's Portfolio Composition as at 31 March 2014 Other Assets & Liabilities 0.51% Fixed Deposit 99.49% 24

25 Comparative Performance Table as at 31 March 2014 GIBRALTAR BSN AGGRESSIVE FUND 31-Mar Mar Mar Mar Mar-10 Composition of Fund according to sectors and category of Investment % % % % % Equities Construction Consumer Products Finance Industrial Products Infrastructure Plantations Properties Technology Trading/Services Warrants/Call Warrants Cash & Deposits Other Assets Liabilities (2.24) (0.84) (1.90) (2.12) (1.75) Total Total NAV (RM) 42,477,153 23,365,809 20,901,107 18,287,969 14,283,988 Number of units 24,283,615 19,832,801 18,313,897 16,212,736 14,678,035 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth 48.48% 3.23% 1.17% 15.07% 35.64% Income Distribution Total return One-year 48.48% 3.23% 1.17% 15.07% 35.64% Since Inception 1 April % % % % % Performance of relevant benchmark indices FBM Emas Index 12.06% 4.40% 3.08% 17.75% 57.11% 25

26 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN STRATEGIC FUND 31-Mar Mar Mar Mar Mar-10 Composition of Fund according to sectors and category of Investment % % % % % Equities Construction Consumer Products Finance Industrial Products Plantations Infrastructure Properties Technology Trading/Services Trusts Warrants/Call Warrants Cash & Deposits Other Assets Liabilities (1.08) (2.36) (1.26) (0.51) (1.28) Total Total NAV (RM) 46,786,533 29,090,522 24,456,806 22,252,807 17,631,144 Number of units 28,454,501 21,993,223 20,642,950 19,227,412 18,188,304 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth 24.31% 11.65% 2.37% 18.93% 38.73% Income Distribution Total return One-year 24.31% 11.65% 2.37% 18.93% 38.73% Since Inception 1 April % % % % % Performance of relevant benchmark indices FBM Emas Index 12.06% 4.40% 3.08% 17.75% 57.11% 26

27 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN ASIAEQUITY FUND 31-Mar Mar Mar Mar Mar-10 Composition of Fund according to sectors and category of Investment % % % % % Equities Foreign Consumer Product Construction Energy Finance Food & Non-Alcoholic Industry Industrials Information Technology Material Pharmacy & Cosmetics Plantation Property Property Trust Transportation Telecom Services Trading and Services Utilities Unit Trusts Sub Total Malaysia Construction Consumer Products Finance Industrial Products Infrastructure Plantations Properties TSR/WARRANT Technology Trading/Services REITs Sub Total Cash & Deposits Other Assets Liabilities (0.02) (0.57) (0.32) (0.96) (0.17) Total Total NAV (RM) 17,553,292 17,594,779 15,791,135 15,691,924 13,506,501 Number of units 27,381,082 26,380,552 25,765,047 24,040,522 22,768,405 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth -3.88% 8.83% -6.11% 9.55% 30.40% Income Distribution Total return One-year -3.88% 8.83% -6.11% 9.55% 30.40% Since Inception 1 April % 40.40% 29.01% 37.42% 24.88% Performance of relevant benchmark indices 50% FBM Emas + 50% MSCI Far East Ex Japan* 8.74% 5.14% -1.76% 13.97% 52.45% * Benchmark measured based on Malaysian Ringgit 27

28 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN INCOME FUND 31-Mar Mar Mar Mar Mar-10 Composition of Fund according to sectors and category of Investment % % % % % Debt Securities Construction Consumer Finance Gaming Infrastructure Others Retail Service Telecommunication Toll Road Trading & Services Utility-Power Utility-Water Other Assets & Liabilities Total Total NAV (RM) 9,241,461 8,945,681 9,044,521 8,816,366 9,619,430 Number of units 12,958,299 12,644,105 13,406,216 14,439,149 16,102,386 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth 0.81% 4.86% 10.50% 2.14% 6.22% Income Distribution Total return One-year 0.81% 4.86% 10.50% 2.14% 6.22% Since inception 22 September % 42.91% 36.28% 23.33% 20.67% Performance of relevant benchmark indices Maybank 1 year Fixed Deposits rates basis points* 4.65% 4.65% 4.62% 4.33% 4.02% * Based on 150 basis points above Maybank 1 year Fixed Deposit rate 28

29 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN BOND FUND 31-Mar Mar Mar Mar Mar-10 Composition of Fund according to sectors and category of Investment % % % % % Debt Securities Construction Consumer Finance Gaming Infrastructure Others Property Retail Service Telecommunication Toll Road Trading & Services Utility-Power Utility-Water Other Assets & Liabilities (7.91) Total Total NAV (RM) 8,655,078 7,785,550 5,171,310 4,924,905 4,927,593 Number of units 13,369,966 12,123,517 8,367,291 8,584,929 8,878,686 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth 0.81% 3.90% 7.74% 3.31% 5.45% Income Distribution Total return One-year 0.81% 3.90% 7.74% 3.31% 5.45% Since inception 29 September % 35.18% 30.11% 20.76% 16.82% Performance of relevant benchmark indices Maybank 1 year Fixed Deposits rates basis points* 4.65% 4.65% 4.62% 4.33% 4.02% * Based on 150 basis points above Maybank 1 year Fixed Deposit rate 29

30 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN GLOBAL IPO FUND 31-Mar Mar Mar Mar Mar-10 Total NAV (RM) 17,906,994 20,720,977 25,133,117 30,513,976 34,123,295 Number of units 53,930,850 61,071,028 69,951,082 82,114,369 94,671,819 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth -1.69% -5.99% -3.34% 3.11% 37.82% Income Distribution Total return One-year -1.69% -5.99% -3.34% 3.11% 37.82% Since inception 15 February % % % % % Performance of relevant benchmark indices 6% p.a 6% p.a 6% p.a 6% p.a 6% p.a (Absolute return) 30

31 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN GOLD AND GENERAL FUND 31-Mar Mar Mar Mar Mar-10 Total NAV (RM) 7,089,109 8,651,361 11,596,400 13,861,551 21,365,809 Number of units 21,934,830 21,128,055 22,672,551 20,863,690 39,968,665 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth % % % 23.94% 25.59% Income Distribution Total return One-year % % % 23.94% 25.59% Since inception 6 September % % 7.66% 39.85% 12.53% Performance of relevant benchmark indices 70% FT Gold Mines Index & 30% HSBC Global Mining Index* % % % 17.93% 25.75% * Benchmark measured based on Malaysia Ringgit 31

32 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN ASIA PACIFIC INFRASTRUCTURE FUND 31-Mar Mar Mar Mar Mar-10 Total NAV (RM) 22,540,519 25,585,836 31,667,531 44,674,203 46,432,346 Number of units 65,921,296 76,592,427 93,867, ,083, ,418,071 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth 2.30% -0.92% % 11.01% 38.85% Income distribution Total return One-year 2.30% -0.92% % 11.01% 38.85% Since inception 15 November % % % % % Performance of relevant benchmark indices 6% p.a 6% p.a 6% p.a 6% p.a 6% p.a (Absolute return) 32

33 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN GOLDEN HARVEST FUND 31-Mar Mar Mar Mar Mar-11 Composition Total NAV (RM) of Fund according to sectors and Number category of units of Investment NAV (RM) per unit 80,443,190 86,628, ,554,579 88,613, ,653,405 89,870, ,220,478 90,660, Total Highest NAV NAV (RM) (RM) per unit during 80,554,579 82,653,405 83,220,478 financial year Number Lowest NAV of units (RM) per unit during 88,613,164 89,870,864 90,660,864 NAV financial (RM) per year unit Highest NAV (RM) per unit during financial year Lowest Total return NAV of (RM) the fund per unit during financial year Capital Growth 2.16% -1.15% 0.22% -4.42% Total Income return Distribution of the fund Capital Growth % -1.15% 5.00% 0.19% % Income Total return Distribution One-year % 3.79% 5.23% -4.42% Total Since return inception 9 September One-year 6.64% 4.39% -1.15% 0.58% 0.19% -4.42% -4.39% Since Performance inception of relevant 9 September benchmark 2011 indices Non Applicable Non -5.31% Applicable Non -4.21% Applicable Non Applicable -4.39% Performance of relevant benchmark indices Non Applicable Non Applicable Non Applicable Notes: 1. Based on guaranteed cash payment of 5% on single premium 2. The one year total returns are calculated using NAV to NAV prices with any income distributed according to this formula: NAV at current year - 1 [ NAV at previous year 3. The total returns since inception are calculated using NAV to NAV prices with any income distributed according to this formula: NAV at current year - 1 [ NAV since inception [ [ 33

34 Comparative Performance Table as at 31 March 2014 (continued) GIBRALTAR BSN CASH FUND 31-Mar Mar Mar-12 Total NAV (RM) 5,296,086 5,176,836 5,051,078 Number of units 10,000,000 10,000,000 10,000,000 NAV (RM) per unit Highest NAV (RM) per unit during financial year Lowest NAV (RM) per unit during financial year Total return of the fund Capital Growth 2.32% 2.47% 1.02% Income Distribution Total return One-year 2.32% 2.47% - Since inception 3 October % 3.52% 1.02% Performance of relevant benchmark indices Average savings deposit rate of commercial banks 1.01% 1.03% 1.10% 34

35 Statement By Manager INVESTMENT LINKED FUNDS Gibraltar BSN Investment-Linked Funds consisting of Gibraltar BSN Aggressive Fund (formerly known as Uni Aggressive Fund) Gibraltar BSN Strategic Fund (formerly known as Uni Strategic Fund) Gibraltar BSN AsiaEquity Fund (formerly known as Uni AsiaEquity Fund) Gibraltar BSN Income Fund (formerly known as Uni Income Fund) Gibraltar BSN Bond Fund (formerly known as Uni Bond Fund) Gibraltar BSN Global IPO Fund (formerly known as Uni Global IPO Fund) Gibraltar BSN Gold and General Fund (formerly known as Uni Gold and General Fund) Gibraltar BSN Asia Pacific Infrastructure Fund (formerly known as Uni Asia Pacific Infrastructure Fund) Gibraltar BSN Golden Harvest Fund (formerly known as Uni Golden Harvest Fund) Gibraltar BSN Cash Fund (formerly known as Uni Cash Fund) (hereinafter referred to collectively as the Funds ) We, Benett Maximillian Theseira and Datuk Azizan Bin Haji Abd Rahman, two of the Directors of Gibraltar BSN Life Berhad (formerly known as Uni.Asia Life Assurance Berhad), state that, in the opinion of the Manager of the funds, the accompanying financial information have been prepared in accordance with the accounting policies prescribed in Note 2 to the financial information and the Guidelines on Investment-Linked Insurance/Takaful Business issued by Bank Negara Malaysia. On behalf of the Manager, BENETT MAXIMILLIAN THESEIRA CHAIRMAN DATUK AZIZAN BIN HAJI ABD RAHMAN DIRECTOR Kuala Lumpur 29 May

36 Independent Auditor s Report INVESTMENT LINKED FUNDS Gibraltar BSN Investment-Linked Funds consisting of Gibraltar BSN Aggressive Fund (formerly known as Uni Aggressive Fund) Gibraltar BSN Strategic Fund (formerly known as Uni Strategic Fund) Gibraltar BSN AsiaEquity Fund (formerly known as Uni AsiaEquity Fund) Gibraltar BSN Income Fund (formerly known as Uni Income Fund) Gibraltar BSN Bond Fund (formerly known as Uni Bond Fund) Gibraltar BSN Global IPO Fund (formerly known as Uni Global IPO Fund) Gibraltar BSN Gold and General Fund (formerly known as Uni Gold and General Fund) Gibraltar BSN Asia Pacific Infrastructure Fund (formerly known as Uni Asia Pacific Infrastructure Fund) Gibraltar BSN Golden Harvest Fund (formerly known as Uni Golden Harvest Fund) Gibraltar BSN Cash Fund (formerly known as Uni Cash Fund) (hereinafter referred to collectively as the Funds ) REPORT ON THE FINANCIAL INFORMATION We have audited the financial information of the Funds, which comprise the statements of assets and liabilities as at 31 March 2014, statements of income and expenditure, and statements of changes in net asset value for the financial year ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 38 to 65. Manager s Responsibility for the Financial Information The Directors of the manager of the Funds, Gibraltar BSN Life Berhad ( the Manager ) are responsible for the preparation of financial information in accordance with the accounting policies prescribed in Note 2 to the financial information and the Guidelines on Investment-Linked Insurance/Takaful Business issued by Bank Negara Malaysia, and for such internal control as the Manager of the Funds determine are necessary to enable the preparation of financial information that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on this financial information based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial information is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial information. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial information, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Funds preparation of financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Director, as well as evaluating the overall presentation of the financial information. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 36