Takafulink Funds Report 2009 Nurturing Fruitful Futures Takafulink Reports and Statements for the year ended 31 December 2009
Nurturing Fruitful Futures Choice, commitment and care are key ingredients to grow a portfolio that delivers what you want. With steadfast focus, Prudential BSN Takaful continues to nurture fruitful futures for our clients by providing you a right mix of Shariah-compliant investments and constantly upgrading our level of service to you. Together we plant the seed of a flourishing future that shelters and provides for your needs... when you need it the most. Contents 2 CEO s Message 4 Fund Objectives 5 Investment Review 7 Fund Performance 8 Investment Outlook
Dear Certificate Holders, We have pleasure in presenting to you the PruBSN Takaful Berhad Summary and CD Rom 2009. The CD-Rom can be found on the inside back cover of this summary. The full version of the Annual Report is also available on our website at www.prubsn.com.my. 10 Financial Highlights 14 Statement of Assets and Liabilities 17 Statement of Changes in Net Asset Value 20 Statement of Income and Expenditure 26 Notes to the Accounts 28 Statement by Directors 29 Report of the Auditors Takafulink Funds Report 2009 1
CEO s Message During 2009 we introduced Takaful Health, a first of its kind product in the takaful industry that provides a No Claim Bonus as well as comprehensive medical cover. We also embarked on a number of initiatives aimed at further improving customer service and enhancing our distribution capabilities. Dear Customer Assalamualaikum, It gives me great pleasure to bring to you our 2009 Takafulink Report which I hope you will find useful. As you know, 2009 proved to be an extraordinarily challenging year as the global financial crisis continued to unfold. The crisis did not spare the Malaysian economy as shown by the contraction in the country s GDP of 1.7% in 2009. In response to weakening private demand, Governments and Central Banks including ours at home adopted a number of fiscal stimulus measures and as a result most economies including Malaysia s turned the corner during the last quarter of the year so that the outlook is now cautiously optimistic. For our part, Prudential BSN Takaful successfully navigated through these difficult times and we are confident that we are well positioned to take advantage of the upswing in the economy. We also gave back to the community through our CSR programme, Segunung Harapan, in collaboration with Astro which aired on Oasis channel for about 10 weeks at the end of last year. Through this programme, communities were able to come together to create opportunities for others through self-help and collaboration. 2 Takafulink Funds Report 2009
Looking ahead to 2010, I believe we have the right strategies in place to serve you better with new products and new services in the pipeline. Combined with the dynamism and innovativeness that lie at the core of our identity, I believe that PruBSN will be able to consolidate our leading market position. Of course, none of this would have been possible without your support and trust in our business. So on behalf of all of the staff at PruBSN I would like to say a big Thank You to you, our customers. We look forward to serving you better in 2010 and beyond. Wishing you all the best for 2010! Azim Mithani CEO, Prudential BSN Takaful Berhad Takafulink Funds Report 2009 3
Fund Objectives The Takafulink Dana Ekuiti Fund aims to maximise returns over medium to long term by investing in high quality Syariah-approved shares listed on the Kuala Lumpur Stock Exchange. The Takafulink Dana Bon fund aims to provide medium to long term accumulation of capital by investing in selected Islamic Private Debt Securities (IPDS) and Islamic Financing Facilities (IFF) The Takafulink Dana Urus fund seeks to maximise returns over medium to long term by investing in Shariah-approved shares and Islamic Private Debt Securities (IPDS) and Islamic Financing Facilities (IFF) through Takafulink Dana Ekuiti and Takafulink Dana Bon and in any other such Takafulink funds that may become available in the future. 4 Takafulink Funds Report 2009
Investment Review During the period under review, the FBM Emas Shariah rose 43%, underperforming the regional markets in general with the MxAPJ rising 67% for the same period. The local equity market started 2009 on a positive note as the market rallied on optimism over potential additional stimulus the US President would unveil following his inauguration. However, the momentum was not sustained as concerns over the pace of economic recovery emerged. On the domestic front, the BNM surprised the market with a larger-than-expected 75bps cut to OPR in January 2009, on the back of declining inflationary pressures in line with the global quantitative easing measures. A month later, BNM surprised the market yet again with an earlier-than-expected 50bps cut on OPR. This came amidst political uncertainty in the state government of Perak, lower-than-expected 4Q08 GDP of 0.1% and more consensus downgrades in earnings estimates for 2009. In response, the Malaysian government announced its Second Stimulus Package worth 60 billion (2009-2010) to buffer the Malaysian economy from a deep recession, however, the local market was dragged down by the announcements of rights issue for two index heavy weights, TM International and Maybank which the market perceived as negative. Moving into 2Q09, newsflow globally and regionally turned positive with statements coming out of US on green shoots, indicating signs of recovery appearing. The local equity market benefited from the return in risk appetite and excess liquidity in the market. Positive newsflow was maintained leading up to Invest Malaysia 2009 Conference held on 30th June 2009. Policies liberalizing the services sector and certain aspects of the financial sector, boosted market sentiment. In 3Q09, the local share market started off in a consolidation phase as investors digested the announcements from Invest Malaysia 2009 which ended on 1st July 2009 and some investors rebalanced their portfolios to reflect the changes in KL Composite Index to FTSE Bursa Malaysia KL Composite Index. When the Chinese equity market saw a steep correction as investors were spooked by talks of monetary tightening, local investors took the opportunity to take some profit as new political issues resurfaced. However, market sentiment improved on the back of better-thanexpected corporate earnings reports and the better-than-expected slower contraction of 2Q09 GDP announced (-3.9% YoY, consensus: -5.3%). In 4Q09, the market saw investors buying stocks ahead of the 2010 Budget announcement which was on 23 October 2009. On the other hand, selected telecommunication stocks were under selling pressure as fund managers raised cash for the listing of Maxis Berhad. The fairly strong 3Q09 results season was a pleasant surprise as the number of companies that beat expectations outnumbered those that disappointed consensus. The average value traded on Bursa in November improved 7% mom to 1.38bn (1.29bn in Oct) per day, partly boosted by the listing of Malaysiaís and Asean s largest IPO in 2009 Maxis Berhad. Despite concerns about Dubai s solvency and rights issues announced by selected big-cap stocks, positive corporate newsflow and potential M&A announcements helped the FBMKLCI to close 2009 at 1272.78. Takafulink Funds Report 2009 5
Investment Review (cont.) Bond Market Domestically, Consumer Price Index (CPI) rose to 1.1% yoy in December 2009 for the first time since last May. The lower CPI was helped by the easing in transport and food prices. On the other hand, the resume of inflation from the lowest -2.4% yoy in July and August 2009, indicating the higher base effect is gradually wearing off. The easing inflationary pressure has given Bank Negara Malaysia (BNM) rooms to implement an accommodative monetary policy to boost economic growth. The local bond market started off 2009 stronger with the 75bps OPR cut and moderating inflation. However, sovereign bond supply concerns, Fitch s placing of Malaysia s local-currency debt rating from stable to negative, and BNM s comment that the OPR cut has been frontloaded severely affected market sentiment, and despite the 50bps OPR cut in February and the revision to the MGS auction calendar, sovereign yields ended higher in the 1Q09. Supply concerns continue to plague the sovereign bond market in 2Q09, and coupled with lower expectations of rate cuts in near future as well as Fitch Ratingís downgrade of Malaysia s long-term local currency rating from A+ to A, sovereign yield were driven north in 2Q09. Sovereign bonds strengthened at the beginning of 3Q09 amidst BNM Governor s comment that more rate cuts cannot be ruled out. However, trading in sovereign bonds turned weak on the back of lower contraction of 2Q09 GDP reported and ahead of festive month of September 2009. MGS yield rose at the beginning of 4Q09 despite a smaller target deficit of 5.6% for 2010 GDP announced during the 2010 Budget in October 2009. The higher corporate bond issuances (Mostly AAA), sapped some interest from the sovereign bonds, also contributed to higher yield in MGS. Sovereign yields improved before profit taking activities emerged towards the end of the year, as supply concerns diminished post the 2010 Budget announcement. As a result, yields were traded higher for the period under review. The 3-, 5- and 10-year sovereign bond yields rose by 29bps, 83bps and 108bps and closed at 3.24%, 3.79% and 4.25% respectively. Corporate bond yields generally moved in tandem with sovereign bond yields, albeit at a lag. Activities in the corporate bond market was supported by improving risk appetite and dominated by selected names in the AAA and AA segments, leading to a tightening in credit spreads and therefore improved returns. 6 Takafulink Funds Report 2009
Fund Performance Takafulink Dana Ekuiti As at 31 December 2009, the Fundís Net Asset Value per unit appreciated by 36.13% to 1.1949 as compared to 0.8777 as at 31 December 2008. Since inception (1st December 2006), the Fund registered a positive return of 19.49%. Takafulink Dana Bon As at 31 December 2009, the Net Asset Value per unit of Takaful Dana Bon increased to 1.1134 from 1.0603 as at on 31 December 2008, recording a return of 5.01% for the period under review. Since inception (1st December 2006), the Fund registered a positive return of 11.34%. Takafulink Dana Urus As at 31 December 2009, the Net Asset Value per unit of the Takafulink Dana Urus was 1.1826 compared to 0.9156 as at 31 December 2008, recording a return of 29.17% for the period under review. Since inception (1st December 2006), the Fund registered a positive return of 18.26%. Takafulink Funds Report 2009 7
Investment Outlook Equity Despite the scepticism felt at the beginning of 2009, the global economy seems to have turned the corner as evidenced by improving economic data points in the second half of 2009. Indeed the major economies of the US and the Eurozone have already begun to register positive annualised growth in the 3rd Quarter. Similarly many countries in the region have also returned to positive growth when measured on a year-on-year basis. While the global economy is on track to recover, the pace of recovery is likely to be slow and uneven, given that the global deleveraging is still ongoing, and countries around the globe continue to depend on government policy support for sustainable growth. The outlook for 2010 is looking more challenging with central banks and governments likely to unwind the loose monetary and fiscal policies in place for most of 2009. The risk of asset bubbles and their costly aftermath will ensure more obvious tightening measures will be implemented globally by mid 2010. Domestically, we expect the PM YAB Datuk Seri Najib Tun Razak to continue to introduce more liberalization policies, economic data released should be positive given the low base of 2009, and corporate earnings is likely to continue to strengthen. Some events or factors that may lend support to the local bourse include: Improving macro fundamentals. Positive government liberalisation policies announced. More consumer friendly policies announced. More M&As and corporate restructuring activities. More IPOs in the pipeline We continue to favour a bottom-up investment strategy moving forward, whereby tactical stock selection and asset allocation will drive fund outperformance. We will continue to look for companies with stability in earnings, demonstratable competitiveness in local or overseas markets, transparency and good corporate governance practice. 8 Takafulink Funds Report 2009
Bond Domestically, the slow pace of economic recovery, and upward trending but still manageable inflationary pressure, will give Bank Negara Malaysia (BNM) the leeway to continue its accommodative monetary policy stance to support the domestic economic recovery. Any rate hikes in 2010 is expected to be modest given the slow pace of economic recovery. In line with the government s policy to unwind its fiscal expansion from 7.4% of GDP in 2009 to forecasted 5.6% of GDP in 2010, BNM recently released the 2010 sovereign bonds auction calendar, with a smaller number of auctions compared to 2009 (19 against 28 in 2009). With this, supply concern for the sovereign bond market has somewhat diminished. Supply and activity of corporate bonds is expected to improve in 2010 as Issuers are expected to take advantage of the low interest rate environment and improving risk appetite of investors, to lock-in cheaper borrowing costs before any rate hikes. An environment of ample liquidity, low interest rates, and wide credit spreads, will continue to be supportive of the bond market. An economic recovery and improving financials will potentially shift risk appetites to lower investment grade bonds, leading to a tightening in credit spreads and therefore improved returns. We will continue to accumulate quality issues with stable cash flow and look for trading opportunities. Takafulink Funds Report 2009 9
Financial Highlights For the financial year ended 31 December 2009 TAKAFULINK DANA EKUITI Category 2009 2008 2007 % % % Shariah Approved Shares Building Materials 2.73 1.20 6.77 Conglomerates 13.30 10.86 13.15 Construction 7.98 8.43 8.47 Consumer 2.89 2.25 1.55 Finance 0.28 Industrial 5.58 2.39 3.66 Media 0.25 1.25 3.14 Motor 1.45 1.66 3.76 Oil & Gas 4.76 6.21 10.24 Plantation 14.67 8.44 6.57 Power 10.41 8.52 7.04 Property 4.77 2.07 5.30 Technology 0.60 3.31 Telecommunications 12.49 10.64 4.35 Timber 0.41 Transportation 3.07 4.24 4.37 Water 0.49 1.08 2.07 85.72 69.25 84.16 Cash and Deposits 15.38 28.66 18.63 Other Assets 0.75 2.35 (0.01) Total Liabilities (1.85) (0.46) (2.78) Total 100.00 100.00 100.00 10 Takafulink Funds Report 2009
Financial Highlights For the financial year ended 31 December 2009 TAKAFULINK DANA EKUITI (cont.) Category 2009 2008 2007 % % % Total Net Asset Value () 93,892,359 39,816,472 22,179,240 Units in Circulation 78,577,690 45,362,268 16,330,676 NAV Per Unit () 1.1949 0.8777 1.3581 Highest NAV per unit () 1.204 1.406 1.363 Lowest NAV per unit () 0.871 0.844 0.983 Total Return - Capital Growth 36.13% -35.37% 35.81 Average Annual Return Fund Period One year 36.13% Three years 5.53% Average Annual Return Benchmark: FTSE-Bursa Malaysia Emas Shariah Index (FBMSHA) Period One year 43.03% Three years 5.10% Takafulink Funds Report 2009 11
Financial Highlights For the financial year ended 31 December 2009 TAKAFULINK DANA BON Category 2009 2008 2007 % % % Islamic Debts Securities 54.25 63.11 85.40 Government Bonds 26.37 10.88 0.00 Quasi Government Bonds 7.13 0.00 0.00 87.74 73.99 85.40 Cash and Deposits 12.40 25.35 14.16 Other Assets 0.66 1.25 1.07 Total Liabilities (0.80) (0.59) (0.63) Total 100.00 100.00 100.00 Total Net Asset Value () 18,742,204 15,528,062 11,704,512 Units in Circulation 16,817,282 14,645,091 11,238,402 NAV Per Unit () 1.1134 1.0603 1.0415 Highest NAV per unit () 1.114 1.060 1.043 Lowest NAV per unit () 1.060 1.025 1.000 Total Return - Capital Growth 5.01% 1.81% 4.15 Average Annual Return Fund Period One year 5.01% Three years 3.44% Average Annual Return Benchmark: MBB 1 month Tier 2 Islamic Deposit rate Period One year 2.13% Three years 2.65% 12 Takafulink Funds Report 2009
Financial Highlights For the financial year ended 31 December 2009 TAKAFULINK DANA URUS Category 2009 2008 2007 % % % Investment in- Takafulink Dana Ekuiti 81.33 76.83 84.84 Takafulink Dana Bon 18.67 23.17 15.16 Other Assets 0.00 Total 100.00 100.00 100.00 Total Net Asset Value () 23,037,250 9,031,083 3,047,901 Units in Circulation 19,479,632 9,864,080 2,358,805 NAV Per Unit () 1.1826 0.9156 1.2921 Highest NAV per unit() 1.188 1.331 1.292 Lowest NAV per unit() 0.911 0.885 0.987 Total Return - Capital Growth 29.17% -29.14% 29.21 Average Annual Return Fund Period One year 29.17% Three years 5.26% Average Annual Return Benchmark: 80% FBMSHA + 20% MBB 1 month Tier 2 Islamic Deposit rate Period One year 34.02% Three years 4.95% Takafulink Funds Report 2009 13
Statement of Assets and Liabilities as at 31 December 2009 TAKAFULINK DANA EKUITI 2009 2008 % % Investments Shariah Approved Shares 80,481,952 85.72 27,572,486 69.25 Cash and Deposits Cash at bank 2,049 0.00 31,820 0.08 Deposits 14,440,000 15.38 11,460,000 28.78 Tax Assets 410,890 0.44 260,398 0.65 Other Assets 288,718 0.31 677,547 1.70 Total Assets 95,623,609 101.85 40,002,251 100.46 Provision for Deferred Tax (618,566) (0.66) (80,132) (0.20) Provision for Taxation (214,554) (0.23) (97,550) (0.24) Other Liabilities (898,130) (0.96) (8,097) (0.02) Total Liabilities (1,731,250) (1.85) (185,779) (0.46) Net Asset Value of the Fund 93,892,359 100.00 39,816,472 100.00 Participants Fund Capital 84,339,096 89.83 49,135,311 123.40 Generated Income/(Accumulated Losses) carried forward 9,553,263 10.17 (9,318,839) (23.40) 93,892,359 100.00 39,816,472 100.00 Net Asset Value Per Unit () 1.19490 0.87774 Number of Units 78,577,690 45,362,268 14 Takafulink Funds Report 2009
Statement of Assets and Liabilities as at 31 December 2009 TAKAFULINK DANA BON 2009 2008 % % Investments Islamic Debts Securitites 16,429,142 87.74 11,489,102 73.99 Cash and Deposits Cash at bank 2,206 0.01 7,543 0.05 Deposits 2,320,000 12.39 3,930,000 25.30 Other Assets 123,288 0.66 193,709 1.25 Total Assets 18,874,636 100.80 15,620,354 100.59 Provision for Taxation (145,032) (0.77) (90,546) (0.58) Provision for Deferred Tax (1,145) (0.01) (178) 0.00 Other Liabilities (4,255) (0.02) (1,568) (0.01) Total Liabilities (150,432) (0.80) (92,292) (0.59) Net Asset Value of the Fund 18,724,204 100.00 15,528,062 100.00 Participants Fund Capital 17,224,557 91.99 14,859,564 95.69 Generated Income carried forward 1,499,647 8.01 668,498 4.31 18,724,204 100.00 15,528,062 100.00 Net Asset Value Per Unit () 1.11339 1.06029 Number of Units 16,817,282 14,645,091 Takafulink Funds Report 2009 15
Statement of Assets and Liabilities as at 31 December 2009 TAKAFULINK DANA URUS 2009 2008 % % Investments in - Takafulink Dana Ekuiti 18,737,138 81.33 6,938,410 76.83 Takafulink Dana Bon 4,300,103 18.67 2,092,620 23.17 Cash At Bank Other Assets 830 0.00 3 75 0.00 Total Assets 23,038,071 100.00 9,031,405 100.00 Other Liabilities (821) (0.00) (322) (0.00) Total Liabilities (821) (0.00) (322) (0.00) Net Asset Value of the Fund 23,037,250 100.00 9,031,083 100.00 Participants Fund Capital 20,908,159 90.76 10,616,085 117.55 Generated Income/(Accumulated Losses) carried forward 2,129,091 9.24 (1,585,002) (17.55) 23,037,250 100.00 9,031,083 100.00 Net Asset Value Per Unit () 1.18263 0.91555 Number of Units 19,479,632 9,864,080 16 Takafulink Funds Report 2009
Statement of Changes in Net Asset Value for the financial year ended 31 December 2009 Takafulink Dana EkuiTi 2009 2008 Net Asset Value at beginning of year 39,816,472 22,179,240 Amounts received from units created 76,953,647 45,768,389 Amounts paid for units cancelled (41,749,862) (15,819,364) Net Income/(Outgo) 18,872,102 (12,311,793) Value of fund at end of year 93,892,359 39,816,472 Takafulink Funds Report 2009 17
Statement of Changes in Net Asset Value for the financial year ended 31 December 2009 TAKAFULINK DANA BON 2009 2008 Net Asset Value at beginning of year 15,528,062 11,704,512 Amounts received from units created 9,140,169 5,519,762 Amounts paid for units cancelled (6,775,176) (1,962,448) Net Income 831,149 266,236 Value of fund at end of year 18,724,204 15,528,062 18 Takafulink Funds Report 2009
Statement of Changes in Net Asset Value for the financial year ended 31 December 2009 TAKAFULINK DANA URUS 2009 2008 Net Asset Value at beginning of year 9,031,083 3,047,901 Amounts received from units created 20,013,016 12,505,129 Amounts paid for units cancelled (9,720,942) (4,733,391) Net Income/(Outgo) 3,714,093 (1,788,556) Value of fund at end of year 23,037,250 9,031,083 Takafulink Funds Report 2009 19
Statement of Income & Expenditure For the financial year ended 31 December 2009 TAKAFULINK DANA EKUITI 2009 2008 Net Investment Income 1,986,007 1,464,506 Profit Income 227,032 249,075 Dividend income 1,758,975 1,215,431 Profits on Disposal 3,319,208 982,439 Securities 3,319,208 982,439 Unrealised Capital Gain 17,959,422 Other Income 151 567,940 Total Income 23,264,788 3,014,885 20 Takafulink Funds Report 2009
TAKAFULINK DANA EKUITI (cont.) 2009 2008 Investment Management Fees (1,001,373) (453,357) Loss on Disposal (2,702,938) (8,508,726) Securities (2,702,938) (8,508,726) Unrealised Capital Loss (6,264,693) Provision for taxation (655,439) (68,814) Other Outgo (32,936) (31,088) Total Outgo (4,392,686) (15,326,678) Net Income/(Outgo) 18,872,102 (12,311,793) (Accumulated Losses)/Generated Income brought forward (9,318,839) 2,992,954 Amount Available for Distribution Generated Income/(Accumulated Losses) carried forward 9,553,263 (9,318,839) Takafulink Funds Report 2009 21
Statement of Income & Expenditure For the financial year ended 31 December 2009 TAKAFULINK DANA BON 2009 2008 Net Investment Income 681,950 604,736 Profit Income 681,950 604,736 Profits on Disposal 16,327 Securities 16,327 Others Unrealised Capital Gain 297,470 Other Income 17,851 Total Income 995,747 622,587 22 Takafulink Funds Report 2009
TAKAFULINK DANA BON (cont.) 2009 2008 Investment Management Fees (85,576) (66,838) Loss on Disposal (17,200) Securities (17,200) Unrealised Capital Loss (234,724) Provision for taxation (54,552) (48,165) Other Outgo (7,270) (6,624) Total Outgo (164,598) (356,351) Net Income 831,149 266,236 Generated Income brought forward 668,498 402,262 Amount Available for Distribution Generated Income carried forward 1,499,647 668,498 Takafulink Funds Report 2009 23
Statement of Income & Expenditure For the financial year ended 31 December 2009 TAKAFULINK DANA URUS 2009 2008 Net Investment Income 209,596 71,082 Fee Rebate 209,596 71,082 Profits on Disposal 444,625 13,629 Securities 444,625 13,629 Unrealised Capital Gain 3,469,082 Other Income 4,172 Total Income 4,123,303 88,883 24 Takafulink Funds Report 2009
TAKAFULINK DANA URUS (cont.) 2009 2008 Investment Management Fees (206,276) (72,568) Loss on Disposal (202,756) (433,850) Securities (202,756) (433,850) Unrealised Capital Loss (1,371,021) Provision for taxation Other Outgo (178) Total Outgo (409,210) (1,877,439) Net Income/(Outgo) 3,714,093 (1,788,556) (Accumulated Losses)/Generated Income brought forward (1,585,002) 203,554 Amount Available for Distribution Generated Income/(Accumulated Losses) carried forward 2,129,091 (1,585,002) Takafulink Funds Report 2009 25
Notes to the Accounts 1. Summary of Significant Accounting Policies a. Basis of Accounting The financial statements have been prepared in accordance with JPI/GPI 33 The Guidelines on Investment- Linked business and the requirements of the certificate document, modified by the following: (i) for the purpose of unit pricing, investments at market value are adjusted to include future cost of acquisitions. This is to ensure equitable unit pricing for incoming, outgoing and remaining unit-holders; and (ii) for the purpose of unit pricing, provision for deferred tax is recognized on taxable and deductible temporary differences using an actuarially calculated rate of 4% instead of the statutory rate of 8%. The Board of Directors are of the opinion that since these temporary differences will only be realized in the future, the lower tax rate of 4% has been used to ensure equitable unit pricing for incoming, outgoing and remaining unit-holders. b. Investments Quoted investments are valued at the closing market prices at the end of the financial year. Unquoted loan stock/bonds are valued at the prevailing prices quoted by financial institutions. Net unrealized gains or losses in value of investments are credited or charged to the capital account. c. Dividend Income Dividend income is recognized when the right to receive payment is established. d. Profit Income Profit income is recognized on an accrual basis. 26 Takafulink Funds Report 2009
e. Gains/Losses on Disposal of Investments Gains or losses arising from the disposal on investment are credited or charged to the capital account. f. Investment Management fees Investment management fees are calculated in accordance with the provisions of the certificate document. g. Fee Rebate This relates to rebate of fees from the Fund Manager in respect of investment held in Takafulink Dana Ekuiti and Takafulink Dana Bon for the Takafulink Dana Urus. h. Cash and cash equivalents Cash and cash equivalents consists of cash in hand and balances with banks, excluding Islamic deposits. 2. Other Outgo comprises bank charges and custodian charges. 3. At 31 December 2009, the Funds had no contingent liabilities or commitments. 4. All amounts are stated in Ringgit Malaysia. Takafulink Funds Report 2009 27
Statement by Directors In the opinion of the Directors, the Takafulink Funds ( Funds ) financial statements set out on pages 14 to 27, comprising the statements of assets and liabilities as at 31 December 2009 and the related Statements of Income and Expenditure and Statements of Changes in Net Asset Value for the financial year ended 31 December 2009 together with the notes thereto, have been drawn up in accordance with JPI/GPI 33 The Guidelines on Investment-Linked Business issued by Bank Negara Malaysia and give true and fair view of the financial position of the Funds as at 31 December 2009 and their financial performance and the movements in the Statements of Changes in Net Assets attributable to the unitholders of the Funds for year ended on that date. Signed in accordance with a resolution of the Directors: Adinan bin Maning Charlie Espinola Oropeza Kuala Lumpur 31 March 2010 28 Takafulink Funds Report 2009
Report of the Auditors to the Unitholders of Takafulink Funds Report on the Financial Statements We have audited the financial statements of Takafulink Funds of Prudential BSN Takaful Berhad, which comprise the Statements of Assets and Liabilities as at 31 December 2009, and the related Statements of Income and Expenditure, Statements of Changes in Net Asset Value for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 14 to 27. Directors Responsibility for the Financial Statements The Directors of the Manager are responsible for the preparation and fair presentation of these financial statements in accordance with JPI/GPI 33 The Guidelines on Investment-Linked Business. 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 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 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 our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Manager 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 Manager s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the 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. Takafulink Funds Report 2009 29
Report of the Auditors to the Unitholders of Takafulink Funds (cont.) Opinion In our opinion, the financial statements have been properly drawn up in accordance with the accounting policies set out in Note 1 to the financial statements and JPI/GPI 33 The Guidelines on Investment-Linked Business so as to give a true and fair view of the financial position of the Funds as of 31 December 2009 and of their financial performance and changes in net assets attributable to the unitholders of the Funds for the year then ended in accordance with JPI/GPI 33. Emphasis of Matter Without qualifying our opinion, we wish to draw your attention to Note 1a to the financial statements. For the purposes of unit pricing, investments are adjusted to include future cost of acquisitions, and provision for deferred tax was calculated using a rate lower than the statutory tax rate. As explained in Note 1a, the Directors are of the opinion that the above would be fairer to the unitholders in the pricing of units. The potential effect of the above matter is not significant to the pricing of units in the respective Funds. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. KPMG Chartered Accountants Petaling Jaya, Selangor 31 March 2010 30 Takafulink Funds Report 2009