at prubsn, we power our business by two key virtues ......2q11 higher then the previous high last...

At PruBSN, we power our business by two key virtues – innovation and dynamism. This allows us to respond to your needs efficiently and effectively. It is reflected in the innovative first-to-market Takaful products that we develop and in the dynamic purposeful partnerships we form with our employees, agents, business partners, and you, our customer. Most importantly, it enables us to genuinely care for and provide you and your loved ones with Takaful products and services to enrich your life.

Prudential BSN Takaful. For All. For Life.

Contents

2 CEO’s Message

4 Fund Objectives

5 Investment Review

9 Fund Performance

10 Investment Outlook

14 Financial Highlights

26 Statement of Assets and Liabilities

31 Statement of Changes in Net Asset Value

35 Statement of Income and Expenditure

39 Notes to the Accounts

41 Statement by Directors

42 Independent Auditors’ Report

Dear Certificate Holders,

We have pleasure in presenting to you the

Takafulink Funds Report 2011 of

Prudential BSN Takaful Berhad.

The full version of this report is also available

on our website at www.prubsn.com.my.

2 T a k a f u l i n k F u n d s R e p o r t 2 0 1 1

CEO’S MESSAGE

“Our flagship Takafulink Dana Ekuiti Fund

recorded a strong return of 8.49%, ranking it

the best performing equity fund in 2011.”

Azim MithaniCEO, Prudential BSN Takaful Berhad

3T a k a f u l i n k F u n d s R e p o r t 2 0 1 1

Dear PruBSN Takafulink Certificate Holders,

Assalamualaikum and salam sejahtera.

It gives me great pleasure to present to you the 2011 Takafulink Annual Report which should serve as an essential reference as you review your financial needs and goals.

2011 was a challenging year for both the global economy, following headwinds from the European debt crisis. Nevertheless, Malaysia recorded a healthy GDP growth of 5.2%, only slightly lower than the previous year.

Our own business has remained resilient with total Annual Contribution Equivalent (ACE) in 2011 of RM231 million, representing 29% growth and a market share of 28.8%. It gives me great pleasure to inform you that this makes us the Number 1 Takaful Operator in Malaysia based on new business (ACE) results.

Similarly, our funds performed well in 2011. Our flagship Takafulink Dana Ekuiti Fund recorded a strong return of 8.49%, surpassing our official benchmark by 6.08%, ranking it the best performing equity fund in 20111. Our Takafulink Dana Bon Fund and Takafulink Dana Urus Fund also recorded impressive returns of 4.89% and 7.49% respectively1. Indeed, our Dana Urus Fund is also ranked number 1 against our peers in the industry. You will find more of this information as you flip the pages of this report.

For such tremendous results, we thank you for the confidence and trust you have shown in PruBSN. It is only with your support that we can achieve this level of performance. We remain confident that we can build on our past success to better serve you, our customers, who are the heart of all that we do. Thank you once more for your continued support.

Wishing you the very best of health, prosperity and peace in 2012!

1 Source: Lipper IM (Date of extraction: 10th January 2012), 1 year performance, January to December 2011


FUND OBJECTIVES

The Takafulink Dana Ekuiti Fund aims to maximise returns over medium to long term by investing in high quality Shariah-approved shares listed on the Kuala Lumpur Stock Exchange.

The Takafulink Dana Bon 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 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.

The Takafulink Dana Ekuiti Dinasti aims to provide long term capital appreciation by investing in Shariah-compliant investments with exposure to the Greater China region.


INVESTMENT REVIEW

Equity Market

The market commenced on a strong note in 2011 with the FBM KLCI reaching a new high of 1,574.49, before succumbing to profit taking, ahead of Chinese New Year. February and March brought with it a lot of concerns and uncertainties for the Malaysian market with the ongoing Middle East and North Africa (MENA) region instability and rising oil prices. Malaysia’s full year 2010 corporate reporting season was not very inspiring with more disappointments than positive surprises. On 11 March 2011, the earthquake and ensuing tsunami disaster in Japan caused the equity markets to correct globally due to the growing uncertainty.

In 2Q11, sentiment in the global equity markets continued to be dampened by Greece’s debt woes. Nonetheless, Malaysia’s stock market performed relatively well, spurred from the excitement in banking stocks as M&A became the theme in June. Also in June, the listing of MSM Holdings which debuted at a 40% premium on the first day helped drive the market to close 2Q11 higher then the previous high last seen on 17 January 2011.

3Q11 started off with a bang for the KLCI scaling new all-time highs early in the quarter. However, profit taking soon set in as Wall Street and European markets experienced selling pressures on renewed concerns on their debt problems. In the US, we saw the loss of America’s triple-A rating for the first time in history and the announcement of US Federal Reserve’s choice of “Operation Twist” which caused the reversal of the 2-year long USD carry trade. The lack of policy direction in response to the Europe debt crisis also weighed on the local market. Domestically, Malaysia’s stock market was negatively affected by the Bersih street rally on 9th July which revived concerns about political uncertainties. Sentiment was also weighed down by disappointing corporate results. Many big-cap GLC stocks such as Tenaga, Axiata, MISC, Petronas Chemicals, CIMB, MAS and Proton reported results that were below expectations. On the flip side, M&A activities continued to steal the limelight as companies from the property and finance sectors announced potential buy out offers.


INVESTMENT REVIEW

Equity Market (cont’d)

The KLCI staged a strong rally in early 4Q11 on the back of renewed confidence in Europe that a resolution was imminent for the debt crisis in Europe, from the EU summit held on 23rd October 2011. However, the KLCI subsequently corrected sharply in mid-November amidst growing uncertainty in the EU due to transitions in governments in Italy, Greece and Spain, and potential contagion effects. Sentiment was also dampened by the failure of US Congress’ “super committee” to reach an agreement on ways to achieve USD2.1 trillion of cost savings in the budget, which would result in across the board spending cuts in 2013. Despite disappointment from the 9 December 2011 EU Summit where investors had hoped for a more concrete resolution to the Euro debt crisis, the market was supported by window dressing activities. Domestically, 3Q11 results reporting season were generally in line or slightly below expectations, with few companies surprising on the upside. The 2012 Budget announced on 7th October 2011, will predominantly benefit the low income earners, civil servants, consumer sector and education sectors.

The FBM KLCI closed the year under review at 1,530.73 points. It rose marginally by 0.78% during the period under review, broadly outperforming regional markets.

Bond Market Review

On 27 January 2011, BNM decided to maintain the OPR at 2.75%. The Monetary Policy Committee (MPC) considered the current monetary policy as appropriate and consistent with the latest assessment of the economic growth and inflation prospects. Whilst, BNM decided to maintain the OPR Rate at 2.75% on 11 March 2011, the MPC stated that monetary policy is expected to remain supportive of growth, but the degree of monetary accommodation may be reviewed given the sustained growth in the economy and inflation risks. BNM also announced the increased the Statutory Reserve Requirement (SRR) Ratio from 1.00% to 2.00%, effective from 1 April 2011 and clarified that the SRR change is not a signal on the stance of monetary policy, but a pre-emptive measure to reduce the risk of a build-up of liquidity caused by capital flows into Asian emerging economies.


INVESTMENT REVIEW

Bond Market Review (cont’d)

Amidst divided market views, BNM had on May 2011, hiked the OPR by 25 bps to 3.00% after holding it unchanged in 4 consecutive Monetary Policy Committee (MPC) meetings. The Monetary Policy Statement (MPS) cited that although the global recovery is expected to continue going forward, downside risks have increased, arising from the potential for higher energy and commodity prices, possible supply disruptions following developments in Japan and the heightened volatility in capital flows to emerging economies. On the domestic front, demand factors could further exert upward pressure on prices in 2H2011. BNM also raised the Statutory Reserve Requirement (SRR) Ratio from 2.00% to 3.00%, effective from 16 May 2011, as a pre-emptive measure to manage the significant build up of liquidity which may result in financial imbalances and create risks to financial stability.

In the July and September MPC meet, BNM decided to keep the OPR unchanged at 3.00%, citing that heightened concerns over external demand risk could lead to slowing export momentum. BNM expects inflation to remain relatively stable for the rest of the year as cost-push inflation is expected to increase only at a gradual pace. The SRR Ratio was also raised from 3.00% to 4.00% in July.

In the MPC meeting on 11 November, BNM held the overnight policy rate (OPR) at 3.0%, citing that whilst the Malaysian economy is expected to expand, the weaker external developments could affect the overall growth prospects of the domestic economy. Inflation is expected to remain stable for the rest of the year and moderate into 2012.

For the period under review, the 3-, 5- and 10-year sovereign bond yields changed by -13 bps, -12 bps and -31 bps to close at 2.98%, 3.22% and 3.69% respectively. The Government bonds rallied in the second half of the year as BNM held its OPR unchanged at 3.00%, citing weakening global and domestic economic outlook as well as moderate inflation.

Corporate bond yields generally moved in tandem with sovereign bond yields, albeit at a lag. Activities in the corporate bond market were supported by ample liquidity and an improving credit environment.


INVESTMENT REVIEW

Asia-Pacific ex-Japan

Markets started 2011 on a positive note backed by optimism that the global economy was on a recovery path. Then a series of events: rising oil prices, political unrest in North Africa and Middle East and a devastating earthquake in Japan quickly undermined confidence.

As the year progressed, investors had to grapple with concerns over US growth and fiscal problems, Europe’s escalating debt crisis, higher inflation and rising interest rate expectations in Asia. Worries that China might suffer a hard landing due to excessive policy tightening also affected sentiment.

As the year drew to a close, most equity markets in the Asia Pacific region ex-Japan managed to eke out some gains, recovering in part the hefty across-the-board losses recorded in November. China’s move to cut its reserve requirement ratio for banks for the first time since 2008 and the coordinated action by six of the world’s central banks to cut funding costs for European lenders helped boost the market. A series of favourable U.S. economic data boosted optimism and temporarily eased worries that Europe’s debt crisis will erode global growth.

Nonetheless the year was marked by heightened market volatility as investors swung between risk taking and risk adverse modes. The MSCI Asia ex Japan posted a decline of 17.98%. India was the worst performing market, underperforming its regional peers due to issues ranging from inflation, lack of policy action and a slowing economy. Persistent inflationary pressures triggered a series of rate hikes by the Reserve Bank of India. As a result, economic growth numbers were downgraded several times during the year. On the other hand, the equity markets of Southeast Asian countries such as Malaysia, Philippines and Indonesia, with inflation rates under their central bank’s target zone, emerged as the big outperformers.


FUND PERFORMANCE

Takafulink Dana Ekuiti

As at 31 December 2011, the Fund’s Net Asset Value per unit appreciated by 8.50% to RM1.5259 as compared to RM1.4064 as at 31 December 2010.

Since inception (1 December 2006), the Fund registered a positive return of 52.48%.

Takafulink Dana Bon

As at 31 December 2011, the Fund’s Net Asset Value per unit increased to RM1.2317 from RM1.1744 as at 31 December 2010, recording a return of 4.88% for the period under review.


Takafulink Dana Urus

As at 31 December 2011, the Net Asset Value per unit of the Takafulink Dana Urus was RM1.4669 compared to RM1.3647 as at 31 December 2010, recording a return of 7.49% for the period under review.


Takafulink Dana Ekuiti Dinasti

As at 31 December 2011, the Fund’s Net Asset Value per unit depreciated by 11.33% to RM0.9700 as compared to RM1.0940 as at 31 December 2010.

Since inception (5 April 2010), the Fund registered an adverse return of 3.00%.

Takafulink Funds are Shariah compliant.


INVESTMENT OUTLOOK

Equity

2012 will continue to be faced with many uncertainties, with 2011 unresolved issues rolling over into 2012, and markets will have to stomach additional potential volatilities on the political front as many countries will be having their elections during the year, which may result in changes in policies.

Domestically, Malaysia will continue to take its cue from the issues concerning the external environment. We expect consumer spending to remain fairly resilient for now, as “goodies” from the Budget 2012 becomes effective 1 Jan 2012, such as the 7-13% pay rise for government employees and one-off payments. Catalysts for the next few months include the potential for the General Election to be called. 2012 will potentially see the listing of Khazanah’s healthcare unit, Felda Global Ventures, amongst others. M&A’s will also continue to be a theme in 2012.

Whilst we believe that corporate earnings growth may be near a bottom, we remain cautious on Malaysian equities going into 2012 given the outstanding global uncertainties.

Current global issues are going to take awhile to resolve and will likely be further complicated, potentially in the form of political changes, with the many elections scheduled to occur globally in 2012. However these events create opportunities for out performance over the longer term.

We continue to favour a bottom-up investment strategy moving forward, whereby tactical stock selection will drive fund outperformance. We will continue to look for companies with stability in earnings, competitiveness in local or overseas markets, transparency and good track record of corporate governance.

Bond

In the MPC meeting on 31 January 2012, Bank Negara Malaysia decided to maintain the overnight policy rate (OPR) at 3.0%, reiterating that the weaker external developments could affect the overall growth prospects of the domestic economy. With inflation expected to moderate in 2012, we are of the view that the OPR has an increased likelihood of heading south in 2012.

The Ringgit has been volatile in recent weeks due to increasing risk aversion, as the European debt crisis deepens, and this is expected to prevail in the near term.

Supply and activity in corporate bonds is expected to pick up as Issuers take advantage of the low interest rate levels to raise funding.

The bond market continues to be supported by ample domestic liquidity and an improving credit environment.


INVESTMENT OUTLOOK

ASIA

Market Overview

Markets started 2011 on a positive note backed by optimism that the global economy was on a recovery path. Then a series of events: rising oil prices, political unrest in North Africa and Middle East and a devastating earthquake in Japan quickly undermined confidence.

As the year progressed, investors had to grapple with concerns over US growth and fiscal problems, Europe’s escalating debt crisis, higher inflation and rising interest rate expectations in Asia. Worries that China might suffer a hard landing due to excessive policy tightening also affected sentiment.

As the year drew to a close, most equity markets in the Asia Pacific region ex-Japan managed to eke out some gains, recovering in part the hefty across-the-board losses recorded in November. China’s move to cut its reserve requirement ratio for banks for the first time since 2008 and the coordinated action by six of the world’s central banks to cut funding costs for European lenders helped boost the market. A series of favourable U.S. economic data boosted optimism and temporarily eased worries that Europe’s debt crisis will erode global growth.

Nonetheless the year was marked by heightened market volatility as investors swung between risk taking and risk adverse modes. The MSCI Asia ex Japan posted a decline of 17.98%. India was the worst performing market, underperforming its regional peers due to issues ranging from inflation, lack of policy action and a slowing economy. Persistent inflationary pressures triggered a series of rate hikes by the Reserve Bank of India. As a result, economic growth numbers were downgraded several times during the year. On the other hand, the equity markets of Southeast Asian countries such as Malaysia, Philippines and Indonesia, with inflation rates under their central bank’s target zone, emerged as the big outperformers.


INVESTMENT OUTLOOK

ASIA

Outlook

The year of 2012 has started with some encouraging market performances, sparked by better-than-anticipated US and Chinese economic data but it is probably too early to say they represent a trend. The factors fuelling 2011’s volatility that is Europe’s sovereign and banking issues and growth concerns remain in place - to varying degrees.

Equity valuations in many markets suggest that much of the bad news was discounted in the market sell-offs in 3Q2011. All in, value does seem increasingly apparent but this is not without its risks; the factors that undermined confidence over the past few years could still inflict another sell-off.

Asia, on the other hand, should remain fairly resilient, although not unaffected by the advanced economies’ woes. Concerns over China’s potential hard landing is over done we believe, as the government’s blueprint for growth continues to be oriented towards increasing consumption, and it has plenty of fiscal power to stimulate the economy if need be.

While the market is expected to remain volatile, economic growth in the region is expected to surpass developed markets over the medium term and a large number of the Asian companies we invest in continue to enjoy good business conditions. As such, we will continue to focus on a bottom-up approach in search for undervalued stocks.


INVESTMENT OUTLOOK

GLOBAL

Market Overview

The global market witnessed a volatile year in 2011. Despite a strong start at the beginning of the year, the market was hit by rising oil prices amid political unrest in North Africa and Middle East as well as a devastating earthquake in Japan.

The lack of policy direction in response to the Europe debt crisis adversely impacted the sentiment in the global market. European policy makers, with opposing ideas and backgrounds, are divided on how the Eurozone crisis can be resolved.

The burden of sovereign debt has not been confined to Europe. In July, political gridlock about raising the US debt ceiling almost forced the world’s largest economy into a technical default and prompted S&P to strip the country of its AAA rating. However, a series of favorable U.S. economic data boosted optimism and temporarily eased worries that Europe’s debt crisis will erode global growth.

Global equities ended the year lower with the MSCI World Index declining by 7.62%. Developed markets such as the US generally outperformed their Asian counterparts.

Outlook

Macro risks are likely to continue to overhang markets in 2012. Ongoing uncertainties over the European sovereign debt crisis, the status of the US economy and the pace of economic growth in China suggest that upcoming data and other news flow could still cause considerable volatility in the market.

The structural debt issues and fiscal drag in the Western economies are expected to be headwinds for global growth. Europe shows little sign of any possible quick and clean resolution to its sovereign debt crisis; a long-drawn-out process is expected as political deadlock is likely to pose hindrance to any decisive, concerted policy actions.

Having said that, economic data, notably from the US and China have been surprising on the upside. However, it is probably too early to conclude they represent a trend.

It is likely that policy actions will prove more crucial than before to driving asset prices and valuations; not just in Europe or the US, but also monetary policy stances in the emerging world.

Against these backdrops, the Fund Managers will continue to focus on bottom-up approach in search for undervalued stocks.


FINANCIAL HIGHLIGHTS

Comparative Performance Tablefor financial year ended 31 December 2011

TAKAFULINK DANA EKUITI

Category 2011 2010 2009 2008 2007 % % % % %

Equity Building Materials 0.27 2.24 2.73 1.20 6.77 Conglomerates 5.93 9.37 13.30 10.86 13.15 Construction 5.09 13.72 7.98 8.43 8.47 Consumer Products 3.01 1.55 2.89 2.25 1.55 Finance – 0.30 0.28 – – Industrial 4.68 2.66 5.58 2.39 3.66 Media – 0.90 0.25 1.25 3.14 Motor – 1.91 1.45 1.66 3.76 Oil & Gas 22.50 11.86 4.76 6.21 10.24 Plantation 10.39 13.16 14.67 8.44 6.57 Power 0.92 8.41 10.41 8.52 7.04 Property 3.38 4.90 4.77 2.07 5.30 Technology – 2.25 0.60 – 3.31 Telecommunications 23.85 16.72 12.49 10.64 4.35 Timber – – – – 0.41 Transportation 3.82 6.56 3.07 4.24 4.37 Water – 0.15 0.49 1.08 2.07

83.84 96.66 85.73 69.25 84.16

Cash and Deposits 17.03 4.00 15.38 28.86 18.63Other Assets 0.49 0.71 0.75 2.35 (0.01)Total Liabilities (1.36) (1.37) (1.85) (0.46) (2.78)

Total 100.00 100.00 100.00 100.00 100.00




Category 2011 2010 2009 2008 2007 % % % % %

Total Net Asset Value (RM) 203,868,447 141,289,501 93,892,359 39,816,472 22,179,240 Units in Circulation 133,612,489 100,463,328 78,577,690 45,362,268 16,330,676 NAV Per Unit (RM) 1.526 1.406 1.195 0.878 1.358 Highest NAV per unit (RM) 1.526 1.415 1.204 1.406 1.363 Lowest NAV per unit (RM) 1.296 1.149 0.871 0.844 0.983 Total Return (+)

- Capital Growth 8.49% 17.70% 36.13% -35.37% 35.81%- Income Distribution – – – – –

Average Annual Return -Fund (+) Period One year 8.49% 17.70% 36.13% -35.37% 35.81% Three years 20.24% 1.17% 5.53% n/a n/a Five years 8.46% n/a n/a n/a n/a

Average Annual Return-Benchmark: FTSE-Bursa Malaysia EmasShariah Index (FBMSHA)Period One year 2.41% 18.20% 43.03% -43.52% 43.69% Three years 20.08% -1.53% 5.10% n/a n/a Five years 7.04% n/a n/a n/a n/a



TAKAFULINK DANA EKUITI FUND PERFORMANCE (Since Inception)

(40.00)

(20.00)

Dec-06 Jun-07 Jan-08 Aug-08 Feb-09

Date

SI %

Cha

nge

Sept-09 Apr-10 Nov-10 May-11 Dec-11

0.00

20.00

40.00

60.00% %

(40.00)

(20.00)

0.00

20.00

40.00

60.00

Takafulink Dana Ekuiti Vs. FTSE-Bursa Malaysia Emas Shariah Index (FBMSHA)

+ The Fund returns are calculated based on five decimal placeThe unit prices of the Funds may go down as well as up and the past performance figures shown are not indicative of future performance.

TDE FBMSHA



TAKAFULINK DANA BON


2011 2010 2009 2008 2007 % % % % %

Category Fixed Income Securities:- Islamic Debt Securities 66.88 60.36 54.25 63.11 85.40- Government 13.28 25.18 26.37 10.88 0.00- Quasi Government 7.56 5.81 7.13 – 0.00Cash and Deposits 12.48 8.98 12.40 25.35 14.16Other Assets 0.71 0.65 0.66 1.25 1.07Total Liabilities (0.91) (0.98) (0.80) (0.59) (0.63)

Total 100.00 100.00 100.00 100.00 100.00

Total Net Asset Value (RM) 37,630,097 23,791,465 18,724,204 15,528,062 11,704,512 Units in Circulation 30,549,422 20,258,545 16,817,282 14,645,091 11,238,402 NAV Per Unit (RM) 1.232 1.174 1.113 1.060 1.041 Highest NAV per unit (RM) 1.232 1.174 1.114 1.060 1.043 Lowest NAV per unit (RM) 1.175 1.114 1.060 1.025 1.000 Total Return (+)

- Capital Growth 4.89% 5.47% 5.01% 1.81% 4.15%


2011 2010 2009 2008 2007 % % % % %

Average Annual Return -Fund (+) Period One year 4.89% 5.47% 5.01% 1.81% 4.15% Three years 5.12% 4.08% 3.44% n/a n/a Five years 3.89% n/a n/a n/a n/a

Average Annual Return-Benchmark: MBB 12mth Tier 1 FD rate Period One year 2.93% 2.51% 2.13% 2.90% 3.20% Three years 2.52% 2.51% 2.65% n/a n/a Five years 2.68% n/a n/a n/a n/a


TAKAFULINK DANA BON



TAKAFULINK DANA BON FUND PERFORMANCE (Since Inception)

(10.00)Dec-06 Oct-07 Aug-08 Jun-09

Date

SI %

Cha

nge

Apr-10 Feb-11 Dec-11

% %

Takafulink Dana Bon Vs. 1 Month Maybank Tier 1 Islamic Deposit Rate


TDB 1 MTH MBB T1 Islamic Deposit Rate

(5.00)

0.00

5.00

10.00

15.00

20.00

25.00

(10.00)

(5.00)

0.00

5.00

10.00

15.00

20.00

25.00



TAKAFULINK DANA URUS


2011 2010 2009 2008 2007 % % % % %

Category Investment in- Takafulink Dana Equity Fund 71.71 82.35 81.33 76.83 84.84 Takafulink Dana Bon Fund 28.29 17.65 18.67 23.17 15.16 Cash and Deposits – – – – – Other Assets – 0.01 – – –Total Liabilities (0.00) (0.01) – – –

Total 100.00 100.00 100.00 100.00 100.00

Total Net Asset Value (RM) 61,186,502 39,683,534 23,037,250 9,031,083 3,047,901Units in Circulation 41,711,100 29,079,728 19,479,632 9,864,080 2,358,805NAV Per Unit (RM) 1.467 1.365 1.183 0.916 1.292Highest NAV per unit (RM) 1.467 1.371 1.188 1.331 1.292Lowest NAV per unit (RM) 1.302 1.150 0.911 0.885 0.987Total Return (+)

- Capital Growth 7.49% 15.39% 29.17% -29.14% 29.21%


2011 2010 2009 2008 2007 % % % % %

Average Annual Return -Fund (+) Period One year 7.49% 15.39% 29.17% -29.14% 29.21% Three years 17.01% 1.84% 5.26% n/a n/a Five years 7.60% n/a n/a n/a n/a

Average Annual Return-Benchmark: 80% FBMSHA + 20% 1 Month MaybankTier 1 Islamic Deposit rate Period One year 2.29% 15.06% 34.02% -35.97% 30.22% Three years 16.38% -0.69% 4.95% n/a n/a Five years 6.34% n/a n/a n/a n/a





TAKAFULINK DANA URUS FUND PERFORMANCE (Since Inception)

(20.00)Dec-06 Oct-07 Aug-08 Jun-09

Date

SI %

Cha

nge

Apr-10 Feb-11 Dec-11

% %

Takafulink Dana Urus Vs. 80% FBMSHA + 20% 1 Month Maybank Tier 1 Islamic Deposit Rate


TDU 80%FBMSHA & 20%1 MTH MBB T1 Islamic Deposit Rate

0.00

20.00

40.00

60.00

0.00

20.00

40.00

60.00

(20.00)



TAKAFULINK DANA EKUITI DINASTI


2011 2010 % %

Category Investment in- PRUdinasti Equity Fund 98.54 97.29 Cash and Deposits 0.93 0.64 Other Assets 1.23 3.43Total Liabilities (0.70) (1.36)

Total 100.00 100.00

Total Net Asset Value (RM) 4,523,965 1,465,272Units in Circulation 4,663,788 1,339,304 NAV Per Unit( RM) 0.970 1.094 Highest NAV per unit (RM) 1.148 1.123 Lowest NAV per unit (RM) 0.931 0.932 Total Return (+)

- Capital Growth -11.34% 9.41%


2011 2010 % %

Average Annual Return -Fund (+) Period One year -11.34% 9.40% Three years n/a n/a Five years n/a n/a

Average Annual Return-Benchmark: Dow Jones Islamic Market Greater China Index Period One year -16.48% 8.66% Three years n/a n/a Five years n/a n/a





TAKAFULINK DANA EKUITI DINASTI FUND PERFORMANCE (Since Inception)

(12.00)Apr-10 Sept-10 Feb-11 Jul-11

Date

SI %

Cha

nge

Dec-11

% %

Takafulink Dana Ekuiti Dinasti Vs. Dow Jones Islamic Market Greater China Index


TDED Dow Jones Islamic Market Greater China Index

(7.00)

(2.00)

3.00

8.00

13.00

(7.00)

(2.00)

3.00

8.00

13.00

(20.00)


STATEMENT OF ASSETS AND LIABILITIESas at 31 December 2011


2011 2010 RM % RM %

Investments Shariah Approved Shares 170,927,864 83.84 136,570,597 96.66 Cash and Deposits Cash at Bank 9,954 0.00 9,166 0.01 Deposits 34,700,000 17.02 5,650,000 4.00 Tax Assets 838,081 0.41 670,733 0.47 Other Assets 169,848 0.08 326,630 0.23 Dividend Receivable 93,154 0.05 324,034 0.23 Accrued Profit 76,694 0.03 2,596 0.00

Total Assets 206,645,747 101.36 143,227,126 101.37

Provision for Deferred Tax (1,261,226) (0.62) (1,002,200) (0.71) Provision for Taxation (1,419,346) (0.70) ( 843,023) (0.60) Other Liabilities (96,728) (0.04) (92,402) (0.06)

Total Liabilities (2,777,300) (1.36) (1,937,625) (1.37)

Net Asset Value of the Fund 203,868,447 100.00 141,289,501 100.00



2011 2010 RM % RM %

Participants Fund Capital 160,811,726 78.88 112,624,127 79.71 Generated Income Carried Forward 43,056,721 21.12 28,665,374 20.29

203,868,447 100.00 141,289,501 100.00

Net Asset Value Per Unit (RM) 1.52582 1.40638

NUMBER OF UNITS 133,612,489 100,463,328

STATEMENT OF ASSETS AND LIABILITIES as at 31 December 2011


TAKAFULINK DANA BON

2011 2010 RM % RM %

Investments Islamic Debts Securitites 33,008,525 87.72 21,733,842 91.35 Cash and Deposits Cash at Bank 7,945 0.02 46,680 0.20 Deposits 4,690,000 12.46 2,090,000 8.78 Other Assets 266,285 0.71 155,791 0.65

Total Assets 37,972,755 100.91 24,026,313 100.98

Provision for Taxation (303,820) (0.81) (214,779) (0.90) Provision for Deferred Tax (37,556) (0.10) (17,339) (0.07) Other Liabilities ( 1,282) – (2,730) (0.01)

Total Liabilities ( 342,658) (0.91) (234,848) (0.98)



37,630,097 100.00 23,791,465 100.00


NUMBER OF UNITS 30,549,422 20,258,545




2011 2010 RM % RM %

Investments in - Takafulink Dana Ekuiti Fund 43,876,840 71.71 32,679,670 82.35 Takafulink Dana Bon Fund 17,309,940 28.29 7,003,812 17.65 Cash at bank – – – – Other Assets – – 2,878 0.01

Total Assets 61,186,780 100.00 39,686,360 100.01Other Liabilities (278) (0.00) (2,826) (0.01)

Total Liabilities (278) (0.00) (2,826) (0.01)



61,186,502 100.00 39,683,534 100.00


NUMBER OF UNITS 41,711,100 29,079,728




2011 2010 RM % RM %

Investments in - Prudinasti Equity Fund 4,457,788 98.54 1,425,537 97.29 Cash At Bank 41,852 0.93 9,445 0.64 Other Assets 56,054 1.23 50,204 3.43Provision for Deferred Tax 14,756 0.33 (3,682) (0.25)

Total Assets 4,570,450 101.03 1,481,504 101.11Other Liabilities (46,485) (1.03) (16,232) (1.11)

Total Liabilities (46,685) (1.03) (16,232) (1.11)


Participants Fund Capital 4,868,497 107.62 1,375,933 93.90Generated Income Carried Forward (344,532) (7.62) 89,339 6.10

4,523,965 100.00 1,465,272 100.00


NUMBER OF UNITS 4,663,788 1,339,304



STATEMENT OF CHANGES IN NET ASSET VALUEfor the financial year ended 31 December 2011


2011 2010 RM RM

Net Asset Value at beginning of year 141,289,501 93,892,359

Amounts received from units created 90,339,019 68,787,908 Amounts paid for units cancelled (42,151,420) (40,502,877) Excess of income over outgo 14,391,347 19,112,111

Value of fund at end of year 203,868,447 141,289,501


TAKAFULINK DANA BON

2011 2010 RM RM




STATEMENT OF CHANGES IN NET ASSET VALUE for the financial year ended 31 December 2011



2011 2010 RM RM







2011 2010 RM RM

Net Asset Value at beginning of year 1,465,272 –

Amounts received from units created 7,582,686 1,924,316 Amounts paid for units cancelled (4,090,122) (548,383) Excess of (outgo) over income / Excess of income over outgo (433,871) 89,339




STATEMENT OF INCOME & EXPENDITUREfor the financial year ended 31 December 2011


2011 2010 RM RM

Net Investment Income 5,294,160 3,635,382 Profit Income 725,654 295,335 Dividend income 4,568,506 3,340,047 Profits on Disposal 11,797,838 7,419,662 Securities 11,797,838 7,419,662 Unrealised Capital Gain 6,918,341 11,496,462 Other Income 9,015 11,721

Total Income 24,019,354 22,563,227

Investment Management Fees (2,525,983) (1,661,322) Loss on Disposal (6,243,077) (667,929) Securities (6,243,077) (667,929) Unrealised Capital Loss – – Provision for taxation (835,349) (1,092,235) Other Outgo (23,598) (29,630) Bank Charges (2,311) (2,141) Custodian Charges (21,287) (27,489)

Total Outgo (9,628,007) (3,451,116)

Excess of Income over Outgo 14,391,347 19,112,111

Generated Income Brought Forward 28,665,374 9,553,263 Amount Available for Distribution – – Generated Income Carried Forward 43,056,721 28,665,374


TAKAFULINK DANA BON

2011 2010 RM RM

Net Investment Income 1,212,906 826,709 Profit Income 1,212,906 826,709 Profits on Disposal – 42,904 Securities – 42,904 Unrealised Capital Gain 554,809 455,085 Other Income – –

Total Income 1,767,715 1,324,698

Investment Management Fees (147,664) (105,424) Loss on Disposal (99,900) – Securities (99,900) – Unrealised Capital Loss – – Provision for taxation (109,257) (86,843) Other Outgo (7,098) (6,639)

Total Outgo (363,919) (198,906)



STATEMENT OF INCOME & EXPENDITURE for the financial year ended 31 December 2011



2011 2010 RM RM

Net Investment Income 621,398 395,149 Profits on Disposal 1,093,315 957,134 Unrealised Capital Gain 2,613,829 3,638,201

Total Income 4,328,542 4,990,484

Investment Management Fees (637,786) (390,493) Loss on Disposal – – Securities – – Unrealised Capital (Loss) – –

Total Outgo (637,786) (390,493)






2011 2010 RM RM

Net Investment Income 53,137 7,227 Unrealised Capital Gain – 92,037

Total Income 53,137 99,264

Investment Management Fees (44,283) (6,082) Unrealised Capital Loss (460,950) – Provision for taxation 18,438 (3,681) Other Outgo (213) (162)

Total Outgo (487,008) (9,925)

Excess of (Outgo) over Income / Excess of Income over Outgo (433,871) 89,339

Generated Income Brought Forward 89,339 – Amount Available for Distribution – – (Accumulated Losses) / Generated Income Carried Forward (344,532) 89,339



NOTES TO THE ACCOUNTS

1. Summary of Significant Accounting Policies

a. Basis of Accounting

The financial statements have been prepared in accordance with The Guidelines on Investment-Linked Insurance/Takaful Business (BNM/RH/GL 010-15) 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;

(ii) for the purpose of unit pricing, provision for deferred tax is recognised 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 realised in the future, the lower tax rate of 4% has been used to ensure equitable unit pricing for incoming, outgoing and remaining unit-holders; and

(iii) during the financial year, the accounting policy has been changed to recognise all deferred tax assets or liabilities arising from the temporary differences on unrealised gains or losses and the impact of the change is immaterial.

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 unrealised gains or losses in value of investments are credited or charged to the capital account.

c. Dividend Income

Dividend income is recognised when the right to receive payment is established.

d. Profit Income

Profit income is recognised on an accrual basis.


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. Rebates and Soft Commissions

The Fund Managers are restricted by the regulation from receiving any rebate or share any commission from any broker/dealer. Accordingly, any rebate and share commission received from stockbrokers/dealers shall be directed to the Funds. However, soft commissions received in a form of goods and services which are of demonstrable benefit to unit-holders such as fundamental databases, financial wire services, technical analysis software and stock quotation system incidental to investment management of the Funds are retained by the Fund Manager.

4. At 31 December 2011, the Funds had no contingent liabilities or commitments.

5. All amounts are stated in Ringgit Malaysia.

NOTES TO THE ACCOUNTS


STATEMENT BY DIRECTORS

In the opinion of the Directors, the Takafulink Funds (‘’Funds’’) financial statements set out on pages 26 to 40, comprising the Statements of Assets and Liabilities as at 31 December 2011 and the related Statements of Income and Expenditure and Statements of Changes in Net Asset Value for the financial year ended 31 December 2011 together with the notes thereto, have been prepared, in all material respects in accordance with the accounting policies set out in Note 1 to the financial statements and Guidelines on Investment-Linked Insurance/Takaful Business (BNM/RH/GL 010-15) issued by Bank Negara Malaysia.

Signed in accordance with a resolution of the Directors:

Datuk Adinan bin Maning

Charlie Espinola Oropeza

Kuala Lumpur 28 March 2012


INDEPENDENT AUDITORS’ REPORT to the unitholders of Takafulink Funds

Report on the Financial Statements

We have audited the financial statements of the Takafulink Funds of Prudential BSN Takaful Berhad, which comprise the Statement of Assets and Liabilities as at 31 December 2011, and the 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 information, as set out on pages 26 to 40.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements in accordance with the accounting policies set out in Note 1 to the financial statements and Guidelines on Investment-Linked Insurance/Takaful Business (BNM/RH/GL 010-15) and for such internal control as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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 about 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 judgement, 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 entity’s preparation of 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 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.


INDEPENDENT AUDITORS’ REPORT to the unitholders of Takafulink Funds

Opinion

In our opinion, the financial statements as of 31 December 2011 and for the year then ended have been prepared, in all material respects in accordance with the accounting policies set out in Note 1 to the financial statements and Guidelines on Investment-Linked Insurance/Takaful Business (BNM/RH/GL 010-15).

Emphasis of Matter

Without qualifying our opinion, we wish to draw your attention to Note 1a (ii) to the accounts whereby a lower rate of tax was used for deferred taxation provision. As fully explained in Note 1a (ii), the Directors of the Company are of the opinion that it is fairer to unitholders to use a lower rate than the statutory tax rate in the pricing of units.

Other Matter(s)

This report is made solely to the unitholders of the Funds, as a body, and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG Firm Number: AF: 0758 Chartered Accountants

28 March 2012 Petaling Jaya

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