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    Reports and Financial Statements iShares Asia Trust • iShares MSCI China Index ETF • iShares MSCI China A International Index ETF • iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* (*This is a synthetic ETF)) • iShares Core S&P BSE SENSEX India Index ETF • iShares Core MSCI AC Asia ex Japan Index ETF • iShares MSCI Emerging Asia Index ETF • iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) • iShares Core KOSPI 200 Index ETF • iShares Core MSCI Taiwan Index ETF • iShares DAX Index ETF • iShares EURO STOXX 50 Index ETF • iShares FTSE 100 Index ETF • iShares NASDAQ 100 Index ETF • iShares Core Hang Seng Index ETF (Sub-funds of iShares Asia Trust) For the Year/Period ended 31st December 2017


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    Contents Report of the Manager to the Unitholders 3 Report of the Trustee to the Unitholders 22 Statement of Responsibilities of the Manager and the Trustee 23 Independent Auditor’s Report 24 Statement of Financial Position 28 Statement of Comprehensive Income 35 Statement of Changes in Net Assets Attributable to Unitholders 42 Statement of Cash Flows 45 Notes to the Financial Statements 52 iShares MSCI China Index ETF 101 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares MSCI China A International Index ETF 105 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* (*This is a synthetic ETF)) 111 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Holdings of Collateral (unaudited) – Performance Record (unaudited) iShares Core S&P BSE SENSEX India Index ETF 115 – Investment Portfolio (unaudited) – Investment Portfolio of iShares BSE SENSEX Mauritius Company (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares Core MSCI AC Asia ex Japan Index ETF 119 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares MSCI Emerging Asia Index ETF 126 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) 132 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) Reports and Financial Statements 1


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    Contents (continued) iShares Core KOSPI 200 Index ETF 137 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares Core MSCI Taiwan Index ETF 141 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares DAX Index ETF 144 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares EURO STOXX 50 Index ETF 147 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares FTSE 100 Index ETF 150 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares NASDAQ 100 Index ETF 154 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) iShares Core Hang Seng Index ETF 158 – Investment Portfolio (unaudited) – Statement of Movements in Investment Portfolio (unaudited) – Performance Record (unaudited) Management and Administration 161 2 iShares Asia Trust


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    iShares MSCI China Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction A summary of the performance of the MSCI China ETF(a) is The iShares MSCI China Index ETF (the “MSCI China ETF”) (the given below. “Sub-Fund”), a sub-fund of the iShares Asia Trust (the “Trust”), was launched on 23rd November 2001 and commenced Total Return(b) in HK$ trading under the stock code 2801 on The Stock Exchange of (as at 31st December) 2017 2016 2015 2014 2013 Hong Kong Limited (the “SEHK”) on 28th November 2001. The MSCI China Index(c) 55.34% 0.94% -7.88% 7.98% 3.68% MSCI China ETF is a Hong Kong unit trust authorized under MSCI China ETF the Securities and Futures Ordinance (Cap. 571) of Hong NAV-to-NAV(d) 54.10% 0.34% -8.18% 7.33% 3.06% Kong. The MSCI China ETF is benchmarked against the MSCI China Index. The Manager of the MSCI China ETF is BlackRock Total Return(b) in HK$ Since Asset Management North Asia Limited (the “Manager”) and (as at 31st December) 2012 2011 2010 Inception(e) the trustee is HSBC Institutional Trust Services (Asia) Limited (the “Trustee”). MSCI China Index(c) 22.50% -18.48% 4.89% 13.78% MSCI China ETF As of 31st December 2017, the MSCI China ETF invests in NAV-to-NAV(d) 21.46% -18.87% 3.96% 12.83% Chinese securities (including H-shares, Red Chips and P Chips) listed on the SEHK, B-shares of Chinese securities listed on the Source: BlackRock, MSCI Barra and WM/Reuters Shanghai Stock Exchange and the Shenzhen Stock Exchange and depositary receipts. Under the PRC Corporate Income Tax The MSCI China Index is a free-float adjusted market Law, the MSCI China ETF may be liable to pay PRC tax on the capitalization-weighted index that is compiled and published capital gains realized in the trading of these securities. by MSCI Inc. It is designed to track the equity market However, no provision was made for taxation from such gains performance of (i) Chinese securities (including H-shares, Red in the financial statements as the Manager believes that the Chips and P Chips) listed on the SEHK (ii) B-shares of Chinese MSCI China ETF can sustain a position for not filing a tax return securities listed on the Shanghai Stock Exchange and the based on the existing tax regulations and that the enforcement Shenzhen Stock Exchange and (iii) companies traded outside of such PRC tax on capital gains is not probable. the country of classification (i.e. foreign listed companies) including those traded by way of depositary receipts. The Fund Performance difference in performance between the MSCI China Index and The MSCI China ETF seeks to provide investment results, the MSCI China ETF is mainly attributed to fees and expenses, before fees and expenses, that closely correspond to the and security misweights. performance of the MSCI China Index in Hong Kong dollar (“HK$”) terms. As at 31st December 2017, the net asset value, Fund Activities applicable to primary market creations and redemptions The average daily trading volume for the MSCI China ETF (“Dealing NAV”) per unit of the MSCI China ETF was during the year was reported by Bloomberg to be HK$28.05, and there were 85,800,000 units outstanding. The approximately 177,106 units. As at 31st December 2017, the total size of the Sub-Fund was approximately HK$2.4 billion. MSCI China ETF comprised 85,800,000 outstanding units. In accordance with the Dividend Announcement on 29th November 2017, a final distribution of HK$0.43 was declared. The ex-dividend date for the MSCI China ETF was 18th December 2017 and the record date was 19th December 2017. The distribution was paid on 29th December 2017. Index Activities The MSCI China Index underwent four regular reviews during the year. As at 31st December 2017, the MSCI China ETF held all constituents in the MSCI China Index. (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total return represents the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 23rd November 2001. Reports and Financial Statements 3


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    iShares MSCI China A International Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction A summary of the performance of the MSCI China A ETF(a) is The iShares MSCI China A International Index ETF (the “MSCI given below. China A ETF”) (the “Sub-Fund”), a sub-fund of the iShares Asia Trust (the “Trust”), was launched on 25th January 2016 and Total Return(b) in RMB (as at 31st Since commenced trading under the stock codes 83162 for the RMB December) 2017 2016 Inception(e) counter and 3162 for the HKD counter on The Stock Exchange MSCI China A Index(c) 17.72% 6.12% 12.21% of Hong Kong Limited (the “SEHK”) on 28th January 2016. The MSCI China A ETF MSCI China A ETF is a Hong Kong unit trust authorized under NAV-to-NAV(d) 19.07% 6.83% 13.27% the Securities and Futures Ordinance (Cap. 571) of Hong Kong. The MSCI China A ETF is benchmarked against the Source: BlackRock, MSCI Barra and WM/Reuters MSCI China A International Index (the “MSCI China A Index”). The Manager of the MSCI China A ETF is BlackRock Asset The MSCI China A Index is a free-float adjusted market Management North Asia Limited (the “Manager”) and the capitalization-weighted index that is compiled and published trustee is HSBC Institutional Trust Services (Asia) Limited (the by MSCI Inc. It captures the large and mid-cap representation “Trustee”). of the Shenzhen Stock Exchange and Shanghai Stock Exchange and includes all of the China A-Share constituents of The MSCI China A ETF may invest in China A-Shares through a the MSCI China All Shares Index. The index was launched on combination of RQFII quota and Stock Connect. Via the 26th June 2014. The MSCI China A ETF tracks the total return release of Caishui [2014] No. 79 (“Circular 79”), Caishui [2014] version of the MSCI China A Index, net of dividend No. 81 (“Circular 81”) and Caishui [2016] No. 127 (“Circular withholding tax. The difference in performance between the 127”) by the Ministry of Finance (“MOF”) in the PRC, the China MSCI China A Index and the MSCI China A ETF is mainly Securities Regulatory Commission (“CSRC”) and the State attributed to fees and expenses of the MSCI China A ETF and Administration of Taxation (“SAT”), acting with State Council’s security misweights. approval, a temporary exemption from tax on capital gains derived from the trading of A-Shares on or after 17th Fund Activities November 2014 was provided to (i) QFIIs/RQFIIs; and The average trading volume for the MSCI China A ETF during (ii) foreign investors trading in A-Shares via Stock Connect. No the year was reported by Bloomberg to be approximately provision was made for taxation from such gains in the 11,494 units. As at 31st December 2017, there were 9,000,000 financial statements as the Sub-Fund began operations post units outstanding. this temporary exemption being granted. Index Activities Fund Performance The MSCI China A Index underwent four regular quarterly The MSCI China A ETF seeks to provide investment results reviews during the year. As at 31st December 2017, the MSCI that, before fees and expenses, that closely correspond to the China A ETF held all constituents in the MSCI China A Index. performance of the MSCI China A Index in Renminbi (“RMB”) terms. As of 31st December 2017, the Dealing NAV per unit of the MSCI China A ETF was RMB7.49 and there were 9,000,000 units outstanding. The total size of the Sub-Fund was approximately RMB67.4 million. (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 25th January 2016. 4 iShares Asia Trust


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    iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* (*This is a synthetic ETF)) Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction was (i) required to collateralise all counterparty exposures with The iShares FTSE A50 China Index ETF (formerly known as a view to ensuring that the collateral held by the A50 China iShares FTSE A50 China Index ETF* (*This is a synthetic ETF)) ETF must represent at least 100% of the A50 China ETF’s gross (the “A50 China ETF”) (the “Sub-Fund”), a sub-fund of the total counterparty exposure and (ii) where the A50 China ETF iShares Asia Trust (the “Trust”), was launched on 15th accepted collateral in the nature of equity securities, the A50 November 2004 and commenced trading under the stock China ETF had to obtain collateral that has a market value of at codes 2823 for the HKD counter on The Stock Exchange of least 120%, and for not-equity collateral, the Manager was Hong Kong Limited (the “SEHK”) on 18th November 2004 and required to adopt a prudent haircut policy (“SFC Collateral 82823 for the RMB counter on the SEHK on 7th July 2017. The Condition”). The removal of the SFC Collateral Condition took A50 China ETF is a Hong Kong unit trust authorized under the effect from 1st January 2018. Securities and Futures Ordinance (Cap. 571) of Hong Kong. The A50 China ETF is benchmarked against the FTSE China From 7th July 2017 onwards, the asterisk and annotation to A50 Index (the “A50 Index”). The Manager of the A50 China the name of the A50 China ETF was removed and the name of ETF is BlackRock Asset Management North Asia Limited (the A50 China ETF was changed from the “iShares FTSE A50 “Manager”) and the trustee is HSBC Institutional Trust Services China Index ETF* (*This is a synthetic ETF)” to “iShares FTSE (Asia) Limited (the “Trustee”). A50 China Index ETF”. On 30th June 2017, the Manager announced that, as a result The A50 China ETF may invest in a combination of A-Shares, of the transition from a “synthetic representative” sub-strategy Physical A-Share ETFs, as well as derivative instruments. These to a “physical representative” sub-strategy, the A50 China derivative instruments, referred to as China A-Share Access ETF’s use of the “physical representative” sub-strategy and Products (“CAAPs”) are linked to A-Shares or an A-Share index investment in A-Shares as well as physical A-Share exchange and are intended to provide economic performance traded funds (“Physical A-Share ETFs”) in aggregate, comprise equivalent to holding the underlying A-Shares or the A-Share more than 70% of the Net Asset Value of the A50 China ETF index. The CAAPs are issued by one or more Qualified Foreign on an ongoing basis. Accordingly, as foreshadowed in the Institutional Investors (“QFIIs”) or their affiliates (together, Manager’s announcement of 28th October 2016, the Manager “CAAP Issuers”). The Manager expanded its investment had applied and been granted approval by the Securities and universe to include direct investments in A-Shares on behalf of Futures Commission of Hong Kong (“SFC”) to remove the SFC the A50 China ETF through QFII quota, Renminbi Qualified synthetic labelling condition. The Manager would continue to Foreign Institutional Investor (“RQFII”) quota, the Shanghai- decrease the A50 China ETF’s use of the “synthetic Hong Kong Stock Connect and the Shenzhen-Hong Kong representative” sub-strategy of investing in China A-Share Stock Connect on 2nd August 2013, 1st September 2014, Access Products (“CAAPs”) and increase the use of the 14th November 2014 and 5th December 2016 respectively. “physical representative” sub-strategy, including investing in A-Shares (directly through the QFII Quota and RQFII Quota With effect from 19th August 2013, the A50 China ETF may available to the A50 China ETF and Stock Connect and as well invest up to 10% of its net asset value (“NAV”) in Physical as Physical A-Share ETFs). The A50 China ETF uses a A-Share ETFs for cash management and contingency representative sampling investment strategy which comprised purposes. During the year and as of 31st December 2017, the primarily a “physical representative” sub-strategy and a A50 China ETF did not invest into any Physical A-Share ETFs. “synthetic representative” sub-strategy as an ancillary strategy. On an ongoing basis, the Manager intends to manage the A50 Under the general taxing provision of the PRC corporate tax China ETF such that its investment in A-Shares as well as a law, which came into effect on 1st January 2008, a non-PRC tax Physical A-Share ETFs will in aggregate comprise 70% or more resident enterprise, e.g., QFII or RQFII, is subject to 10% of the Net Asset Value of A50 China ETF. On 1st December withholding tax on PRC sourced interest income, dividends 2017, the Manager announced that the A50 China ETF had and capital gains provided that the non-PRC tax resident completed its transition from a “synthetic representative” enterprise does not have its central management and control strategy to a “physical representative” strategy under which its in the PRC or a PRC tax establishment. In practice, however, holdings in A-Shares and Physical A-Share ETFs (for cash and prior to the release of Caishui [2014] No. 79 (“Circular management and contingency purposes) in aggregate 79”), the PRC tax authorities have not actively enforced comprise 90% or more of its Net Asset Value on an ongoing taxation on capital gains arising from the sale of A-Shares by basis. Furthermore, the Manager also announced that it had non-PRC tax resident enterprises, notwithstanding the fact the applied to the SFC for, and has been granted, approval to PRC State Council continued to not provide any specific remove the authorisation condition imposed on the A50 China income tax exemption on capital gains tax under PRC ETF by the SFC on 29th August 2011 whereby the Manager Corporate Income Tax Law. Reports and Financial Statements 5


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    iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* (*This is a synthetic ETF)) (continued) Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction Fund Performance Via the release of Circular 79, Caishui [2014] No. 81 (“Circular The A50 China ETF seeks to provide investment results, before 81”) and Caishui [2016] No. 127 (“Circular 127”) by the Ministry fees and expenses, that closely correspond to the of Finance (“MOF”) in the PRC, the China Securities Regulatory performance of the A50 Index in Hong Kong dollar (“HK$”) Commission (“CSRC”), and the State Administration of terms. As of 31st December 2017, the Dealing NAV per unit of Taxation (“SAT”) acting with State Council’s approval, a the A50 China ETF was HK$15.08 and there were temporary exemption from tax on capital gains derived from 2,050,000,000 units outstanding. The total size of the Sub- the trading of A-Shares on or after 17th November 2014 was Fund was approximately HK$30.9 billion. provided to (i) QFIIs/RQFIIs; and (ii) foreign investors trading in A-Shares via Stock Connect respectively. However, Circular A summary of the performance of the A50 China ETF(a) is given 79 did also state that any gains realized by QFIIs/RQFIIs prior below. to 17th November 2014 would be subject to tax in accordance with law. Total Return(b) in HK$ (as at 31st December) 2017 2016 2015 2014 2013 Pursuant to Circular 79, Circular 81 and Circular 127 the A50 Index(c) 44.89% -10.33% -10.59% 67.53% -8.94% Manager realigned the provisioning policy of the A50 China A50 China ETF ETF in respect of its underlying PRC investments in CAAPs and NAV-to-NAV(d) 41.95% -8.97% -10.43% 61.21% -12.25% direct A-Shares. As at 31st December 2017, the manager has settled with all CAAP issuers the withheld capital gain tax Total Return(b) in HK$ Since (“CGT”) amounts attributable to the CAAPs invested in by the (as at 31st December) 2012 2011 2010 Inception(e) A50 China ETF. True-up adjustments representing the difference between the accrued provision and final settlement A50 Index(c) 15.50% -13.45% -19.29% 13.22% amount was made to the Sub-Fund. Depending on whether A50 China ETF the withheld provision of the A50 China ETF was greater or NAV-to-NAV(d) 10.38% -15.00% -21.34% 11.53% less than the amount of CGT attributable resulted in adjustments to the net asset value (“NAV”) of the A50 China Source: BlackRock, FTSE and WM/Reuters ETF. With respect to the A50 China ETF’s direct investments in A-Shares via its QFII and RQFII quotas, the A50 China ETF filed for relief under the respective Double Tax Agreement (“DTA”) with the PRC tax authorities and was subsequently approved. As such, a positive yet immaterial adjustment was made to the NAV of the A50 China ETF on 29th October 2015 to reflect the true-up between tax settlement and provision. For further detail regarding these adjustments, please refer to the iShares Asia Trust Announcements released by the Manager on 30th October 2015, 24th November 2015, 5th May 2016, 12th August 2016, 15th August 2016, 27th September 2016, 12th October 2016, 25th October 2016, 3rd November 2016, 16th November 2016, 19th December 2016 and 20th December 2016. (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 15th November 2004. 6 iShares Asia Trust


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    iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* (*This is a synthetic ETF)) (continued) Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Fund Performance Effective from 4th February 2014, the Sub-Fund is tracking the Net Total Return Index that has taken into account the 10% withholding tax on dividends of China A-Shares. In the past, the Sub-Fund tracked the gross (of tax) total return index. The A50 Index is compiled and published by FTSE International Limited and comprises the top 50 A-Share companies by market capitalization and was launched on 13th December 2003. It is a net total return index which means that the net dividends of the securities of the A50 Index are reinvested. The A50 Index operates under clearly defined rules published by the index provider and is a tradable index with liquidity. In addition, the A50 Index covers both the Shanghai and Shenzhen markets. The difference in performance between the A50 Index and the A50 China ETF is mainly attributed to fees and expenses, including collateral costs, taxes on dividends and PRC capital gains, and a different currency exchange rate used for fund valuation and index calculation. Fund Activities The average trading volume for the A50 China ETF during the year was reported by Bloomberg to be approximately 33.0 million units. As at 31st December 2017, there were 2,050,000,000 units outstanding. In accordance with the Dividend Announcement on 29th November 2017, a final distribution of HK$0.32 was declared. The ex-dividend date for the A50 China ETF was 18th December 2017 and the record date was 19th December 2017. The distribution was paid on 29th December 2017. Index Activities The A50 Index underwent four regular quarterly reviews during the year. As at 31st December 2017, the A50 China ETF had exposure to all* of the constituents in the A50 Index. * The A50 China ETF held all the constituents comprising the FTSE China A50 Index, in which 9 constituents were held directly in listed equities, and 41 constituents were held both directly in listed equities and indirectly through CAAPs. Reports and Financial Statements 7


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    iShares Core S&P BSE SENSEX India Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction Following the restructure, the SENSEX India ETF may invest up The iShares Core S&P BSE SENSEX India Index ETF (the to 15% of its net asset value in IAPs, with a maximum exposure “SENSEX India ETF”) (the “Sub-Fund”), a sub-fund of the to any single issuer of 10% of its net asset value. As indicated iShares Asia Trust (the “Trust”), was launched on 31st October above, an IAP is a derivative instrument and is not the same as 2006 and commenced trading under the stock code 2836 for direct holding or investment in the underlying Indian shares. the HKD counter on The Stock Exchange of Hong Kong Limited (the “SEHK”) on 2nd November 2006. The SENSEX India Tax Law Changes India ETF commenced trading under the stock codes 9836 for On 10th May 2016, the Indian Tax Board announced a phased the USD counter and 82836 for the RMB counter on the SEHK removal of the capital gains tax (“CGT”) exemption under the on 14th October 2016. The SENSEX India ETF is a Hong Kong India-Mauritius Tax Treaty. The change, effective from 1st April unit trust authorized under the Securities and Futures 2017, resulted in India retaining taxation rights on capital gains Ordinance (Cap. 571) of Hong Kong. The SENSEX India ETF is arising from sales of shares of Indian resident companies benchmarked against the S&P BSE SENSEX Index (the acquired by a Mauritius entity on or after 1st April 2017. Shares “SENSEX Index”). The Manager of the SENSEX India ETF is acquired prior to 1st April 2017 would still be protected from BlackRock Asset Management North Asia Limited (the taxing rights in India. There is a transition period from 1st April “Manager”) and the trustee is HSBC Institutional Trust Services 2017 to 31st March 2019 where the tax rate will be limited to (Asia) Limited (the “Trustee”). 50% of India’s domestic tax rate subject to a limitation of benefits clause. Taxation in India at the full domestic tax rate Until June 2009, the SENSEX India ETF invested solely in will apply from financial year 2019 – 2020 onwards. derivative instruments. These derivative instruments, referred to as India Access Products (“IAPs”) were linked to the In 2017, gains arising on disposal of shares by the Mauritian underlying Indian shares and were intended to provide subsidiary acquired prior to 1st April 2017 were not subject to economic performance equivalent to holding the underlying tax in accordance with the above. Gains on disposal of shares Indian shares. On 10th June 2009, the Manager announced its acquired after 1st April 2017 will be subject to tax according to intention to restructure the SENSEX India ETF to allow it to the relevant local laws. The Manager will continue to monitor invest directly in Indian securities in addition to IAPs. The the impact of India tax law changes on the SENSEX India ETF restructuring involved the establishment of iShares BSE and the Mauritius Subsidiary. SENSEX Mauritius Company, a wholly owned subsidiary of the SENSEX India ETF incorporated in Mauritius (the “Mauritius Subsidiary”), to invest in Indian securities and/or IAPs. The restructure was completed on 22nd June 2009. Following the restructure: (a) the underlying investments of the Mauritius Subsidiary, together with the direct investments made by the SENSEX India ETF, must in aggregate comply with the SENSEX India ETF’s investment restrictions; (b) the SENSEX India ETF will not incur additional fees and expenses as a result of the establishment of the Mauritius Subsidiary as the Manager will rebate to the SENSEX India ETF the amount of ordinary fees and expenses incurred by the Mauritius Subsidiary (other than brokerage and transaction costs, fees and charges relating to the IAPs and extra ordinary expenses, if any); and (c) the various reports required to be prepared for the SENSEX India ETF will be prepared in a single entity form as the Mauritius Subsidiary is no longer consolidated to SENSEX India ETF and is accounted for at fair value through profit or loss. 8 iShares Asia Trust


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    iShares Core S&P BSE SENSEX India Index ETF (continued) Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Fund Performance The SENSEX Index is a float adjusted market capitalization- The SENSEX India ETF seeks to provide investment results, weighted index that is compiled and published by Asia Index before fees and expenses, that closely correspond to the Private Limited, a joint venture company established by BSE performance of the SENSEX Index in Hong Kong dollar Limited (“BSE”) and S&P Dow Jones Indices LLC. It comprises (“HK$”) terms. As at 31st December 2017, the Dealing NAV the 30 largest and most actively traded stocks, representative per unit of the SENSEX India ETF was HK$24.57, and there of various sectors, on BSE. The difference in performance were 44,800,000 units outstanding. The total size of the Sub- between the SENSEX Index and the SENSEX India ETF is Fund was approximately HK$1.1 billion. mainly attributed to fees and expenses, and a different currency exchange rate used for fund valuation and index A summary of the performance of the SENSEX India ETF(a) is calculation. given below. Fund Activities Total Return(b) in HK$ The average daily trading volume for the SENSEX India ETF (as at 31st December) 2017 2016 2015 2014 2013 during the year was reported by Bloomberg to be SENSEX Index(c) 38.91% 0.89% -8.15% 29.24% -1.90% approximately 115,207 units. As at 31st December 2017, a SENSEX India ETF total of 44,800,000 units were outstanding. NAV-to-NAV(d) 38.25% -0.01% -9.04% 27.78% -2.89% Index Activities The SENSEX Index had two regular reviews during the year. As Total Return(b) in HK$ Since at 31st December 2017, the SENSEX India ETF invested all, or (as at 31st December) 2012 2011 2010 Inception(e) substantially all, of its assets in Indian equity securities through SENSEX Index(c) 23.80% -35.76% 24.31% 7.24% the Mauritius Subsidiary, in substantially the same weightings SENSEX India ETF as constituted in the SENSEX Index. NAV-to-NAV(d) 22.57% -36.38% 22.81% 5.98% Source: BlackRock, Asia Index Private Limited and WM/Reuters (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. Starting on the 14th September 2011, the calculation of the Total Return Index has been adjusted by the index provider as from the date of inception. The SENSEX Index performance for comparative periods has been restated accordingly. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 31st October 2006. Reports and Financial Statements 9


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    iShares Core MSCI AC Asia ex Japan Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction A summary of the performance of the MSCI AC Asia ex Japan The iShares Core MSCI AC Asia ex Japan Index ETF (the “MSCI ETF(a) is given below. AC Asia ex Japan ETF”) (the “Sub-Fund”), a sub-fund of the iShares Asia Trust (the “Trust”), was launched on 12th March Total Return(b) in HK$ 2009 and commenced trading under the stock code 3010 for (as at 31st December) 2017 2016 2015 2014 2013 the HKD counter on The Stock Exchange of Hong Kong MSCI All Country Asia Limited (the “SEHK”) on 23rd April 2009. The MSCI AC Asia ex ex Japan Index(c) 42.89% 5.48% -7.20% N/A N/A Japan ETF commenced trading under the stock codes 9010 MSCI Asia APEX 50 for the USD counter and 83010 for the RMB counter on the Index(c) N/A N/A N/A 4.41% 6.34% SEHK on 14th October 2016. The MSCI AC Asia ex Japan ETF MSCI AC Asia ex Japan is a Hong Kong unit trust authorized under the Securities and ETF NAV-to-NAV(d) 42.47% 5.17% -8.10% 3.88% 5.51% Futures Ordinance (Cap. 571) of Hong Kong. The MSCI AC Asia ex Japan ETF is benchmarked against the MSCI All Total Return(b) in HK$ Since Country Asia ex Japan Index, and, prior to 27th July 2015, (as at 31st December) 2012 2011 2010 Inception(e) MSCI Asia APEX 50 Index. The Manager of the MSCI AC Asia ex Japan ETF is BlackRock Asset Management North Asia MSCI All Country Asia Limited (the “Manager”) and the trustee is HSBC Institutional ex Japan Index(c) N/A N/A N/A 15.37% Trust Services (Asia) Limited (the “Trustee”). MSCI Asia APEX 50 Index(c) 24.90% -12.71% 15.70% N/A Fund Performance MSCI AC Asia ex Japan The MSCI AC Asia ex Japan ETF seeks to provide investment ETF NAV-to-NAV(d) 24.25% -13.45% 15.13% 14.64% results, before fees and expenses, that closely correspond to the performance of the MSCI All Country Asia ex Japan Index, Source: BlackRock, MSCI Barra and WM/Reuters and, prior to 27th July 2015, the MSCI Asia APEX 50 Index, in Hong Kong dollar (“HK$”) terms. As at 31st December 2017, the Dealing NAV per unit of the MSCI AC Asia ex Japan ETF was HK$56.08, and there were 132,320,000 units outstanding. The total size of the Sub-Fund was approximately HK$7.4 billion. (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. The Index changed from the MSCI Asia APEX 50 Index to the MSCI All Country Asia ex Japan Index on 27th July 2015. The performance of the Sub-Fund prior 27th July 2015 was achieved under circumstances that no longer apply. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 12th March 2009. 10 iShares Asia Trust


  • Page 12

    iShares Core MSCI AC Asia ex Japan Index ETF (continued) Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Fund Performance Fund Activities The MSCI All Country Asia ex Japan Index is a free-float The average daily trading volume for the MSCI AC Asia ex adjusted market capitalization-weighted index that is Japan ETF during the year was reported by Bloomberg to be compiled and published by MSCI Inc. It is designed to capture approximately 318,178 units. As at 31st December 2017, MSCI the large and mid-cap representation across two of three AC Asia ex Japan ETF comprised 132,320,000 outstanding developed markets countries (excluding Japan) and nine units. emerging markets countries (as of 1st June 2017) in Asia. The MSCI AC Asia ex Japan ETF will track the total return version of In accordance with the Dividend Announcement on 29th the MSCI All Country Asia ex Japan Index, net of dividend November 2017, a final distribution of HK$0.94 was declared. withholding tax. The ex-dividend date for the MSCI AC Asia ex Japan ETF was 18th December 2017 and the record date was 19th December The MSCI AC Asia ex Japan ETF invests primarily in securities 2017. The distribution was paid on 29th December 2017. (including depositary receipts) included in the MSCI All Country Asia ex Japan Index. It also invests in (i) the iShares Index Activities MSCI India Index ETF (the “SG MSCI India ETF”), a Singapore- The MSCI All Country Asia ex Japan Index underwent four listed ETF, and (ii) the iShares MSCI India ETF (the “US MSCI regular reviews during the year. As at 31st December 2017, India ETF”), an ETF traded in the United States of America with the MSCI AC Asia ex Japan ETF held all† constituents in the its primary listing on the BATS Exchange, Inc, to gain access to MSCI All country Asia ex Japan Index. the India securities comprised in the MSCI All Country Asia ex Japan Index (“Indian Constituents”). The SG MSCI India ETF Effective from 1st June 2017, MSCI Inc. reclassified the MSCI and US MSCI India ETF are not authorized by the Securities Pakistan Index from Frontier Markets to Emerging Markets. As and Futures Commission of Hong Kong (the “SFC”) and are such, from 1st June 2017, MSCI AC Asia ex Japan ETF may not available to Hong Kong residents. There is no guarantee as invest in such foreign listed companies as part of its to the performance of the SG MSCI India ETF or the US MSCI investment strategy and to meet its investment objective. India ETF or the correlation of their future performance to that † The MSCI AC Asia ex Japan ETF held all constituents comprising the MSCI All Country Asia of the Indian Constituents. There is no additional management Ex Japan Index, in which 569 constituents were held directly in listed equities and 78 fee charged to the MSCI AC Asia ex Japan ETF for holding the constituents were held indirectly through SG MSCI India ETF and US MSCI India ETF. SG MSCI India ETF and US MSCI India ETF. The difference in performance between the MSCI All Country Asia ex Japan Index and the MSCI AC Asia ex Japan ETF is mainly attributed to fees and expenses, and security misweights. Reports and Financial Statements 11


  • Page 13

    iShares MSCI Emerging Asia Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction The MSCI EM Asia Index is a free float-adjusted market The iShares MSCI Emerging Asia Index ETF (the “MSCI capitalization-weighted index that is compiled and published Emerging Asia ETF”) (the “Sub-Fund”), a sub-fund of the by MSCI Inc. It is designed to track the equity market iShares Asia Trust (the “Trust”), was launched on 12th March performance of emerging market countries of Asia. The MSCI 2009 and commenced trading under the stock code 2802 on Emerging Asia ETF is not a registered Foreign Portfolio The Stock Exchange of Hong Kong Limited (the “SEHK”) on Investor (“FPI”) with the Securities and Exchange Investment 23rd April 2009. The MSCI Emerging Asia ETF is a Hong Kong Board of India (“SEBI”) and is investing in the iShares Core S&P unit trust authorized under the Securities and Futures BSE SENSEX India Index ETF to gain exposure to the Indian Ordinance (Cap. 571) of Hong Kong. The MSCI Emerging Asia market segment of the MSCI EM Asia Index. There is no ETF is benchmarked against the MSCI EM Asia Index. The additional management fee charged to the MSCI Emerging Manager of the MSCI Emerging Asia ETF is BlackRock Asset Asia ETF for holding the iShares Core S&P BSE SENSEX India Management North Asia Limited (the “Manager”) and the Index ETF. The difference in performance between the MSCI trustee is HSBC Institutional Trust Services (Asia) Limited (the EM Asia Index and the MSCI Emerging Asia ETF is mainly “Trustee”). attributed to fees and expenses, and security misweights. Fund Performance Fund Activities The MSCI Emerging Asia ETF seeks to provide investment The average daily trading volume for the MSCI Emerging Asia results, before fees and expenses, that closely correspond to ETF during the year was reported by Bloomberg to be the performance of the MSCI EM Asia Index in Hong Kong approximately 14,839 units. As at 31st December 2017, the dollar (“HK$”) terms. As at 31st December 2017, the Dealing MSCI Emerging Asia ETF comprised 3,200,000 outstanding NAV per unit of the MSCI Emerging Asia ETF was HK$56.36 units. and there were 3,200,000 units outstanding. The total size of the Sub-Fund was approximately HK$180.3 million. In accordance with the Dividend Announcement on 29th November 2017, a final distribution of HK$0.76 was declared. A summary of the performance of the MSCI Emerging Asia The ex-dividend date for the MSCI Emerging Asia ETF was ETF(a) is given below. 18th December 2017 and the record date was 19th December 2017. The distribution was paid on 29th December 2017. Total Return(b) in HK$ (as at 31st December) 2017 2016 2015 2014 2013 Index Activities MSCI EM Asia Index (c) 44.02% 6.18% -9.85% 4.91% 2.02% The MSCI EM Asia Index underwent four regular reviews MSCI Emerging Asia during the year. As at 31st December 2017, the MSCI ETF NAV-to-NAV(d) 43.74% 5.61% -10.66% 5.12% 0.53% Emerging Asia ETF held 417* constituents versus the 572 constituents in the MSCI EM Asia Index. Total Return(b) in HK$ Since Effective from 1st June 2017, MSCI Inc. reclassified the MSCI (as at 31st December) 2012 2011 2010 Inception(e) Pakistan Index from Frontier Markets to Emerging Markets. As MSCI EM Asia Index(c) 20.58% -17.52% 19.28% 14.86% such, from 1st June 2017, MSCI Emerging Asia ETF may invest MSCI Emerging Asia in such foreign listed companies as part of its investment ETF NAV-to-NAV(d) 18.34% -15.33% 19.53% 14.52% strategy and to meet its investment objective. * The MSCI Emerging Asia ETF directly held 390 constituents and indirectly held 27 Source: BlackRock, MSCI Barra and WM/Reuters constituents through SENSEX India ETF, out of 572 constituents comprising the MSCI EM Asia Index. (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 12th March 2009. 12 iShares Asia Trust


  • Page 14

    iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction Pursuant to the authorization conditions imposed on the CSI The iShares Core CSI 300 Index ETF (formerly known as 300 ETF by the SFC on 29th August 2011, the Manager was iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) required to collateralize all counterparty exposures with a view (the “CSI 300 ETF”) (the “Sub-Fund”), a sub-fund of the iShares to ensuring that the collateral held by the CSI 300 ETF must Asia Trust (the “Trust”), was launched on 12th November 2009 represent at least 100% of the CSI 300 ETF’s gross total and commenced trading under the stock code 2846 on The counterparty exposure. In addition, where the CSI 300 ETF Stock Exchange of Hong Kong Limited (the “SEHK”) on 18th accepted collateral in the nature of equity securities, the CSI November 2009. The CSI 300 ETF commenced trading under 300 ETF had to obtain collateral that has a market value of at the stock codes 9846 for the USD counter and 82846 for the least 120%. Further, for non-equity collateral, the Manager was RMB counter on the SEHK on 28th February 2017. The CSI 300 required to adopt a prudent haircut policy (the “SFC Collateral ETF is a Hong Kong unit trust authorized under the Securities Condition”). As a result of the transition from a “synthetic and Futures Ordinance (Cap. 571) of Hong Kong. The CSI 300 representative” strategy to a “physical representative” strategy, ETF is benchmarked against the CSI 300 Index. The Manager the Manager applied to the SFC for, and was granted, of the CSI 300 ETF is BlackRock Asset Management North Asia approval to remove the SFC Collateral Condition with effect Limited (the “Manager”) and the trustee is HSBC Institutional from 28th February 2017. From this date onwards, the CSI 300 Trust Services (Asia) Limited (the “Trustee”). ETF may continue to invest in CAAPs from time to time, but on an uncollateralized basis and only for cash management and On 18th November 2016, the Manager announced the contingency purposes. The CSI 300 ETF’s aggregate investment strategy of the CSI 300 ETF would change, investment in CAAPs for cash management and contingency effective 21st November 2016 (“Effective Date”), to introduce a purposes will not exceed 10% of the Net Asset Value of the “physical representative” sub-strategy, and the Manager CSI 300 ETF. intended to seek to decrease the CSI 300 ETF’s reliance on the “synthetic representative” investment strategy. The “physical Under the general taxing provision of the PRC corporate tax representative” sub-strategy consists of direct investments in law, which came into effect on 1st January 2008, a non-PRC tax A-Shares via (i) Stock Connect where the CSI 300 ETF has resident enterprise, e.g., QFII or RQFII, is subject to 10% direct access to certain eligible A-Shares via the securities withholding tax on PRC sourced interest income, dividends trading and clearing linked programme with an aim to achieve and capital gains, provided that the non-PRC tax resident mutual stock market access between the PRC and Hong Kong enterprise does not have its central management and control stock exchange and (ii) the RQFII Quota of BlackRock in the PRC or a PRC tax establishment. In practice, however, (Singapore) Limited (“RQFII Licence Holder”), an affiliate of the and prior to the release of Caishui [2014] No. 79 (“Circular Manager, which will allocate its RQFII Quota for use by the CSI 79”), the PRC tax authorities have not actively enforced 300 ETF from time to time, as well as investments in Physical taxation on capital gains arising from the sale of A-Shares by A-Share ETFs for cash management and contingency non-PRC tax resident enterprises, notwithstanding the fact the purposes. Prior to the Effective Date, the CSI 300 ETF adopted PRC State Council continued to not provide any specific a “synthetic representative” investment strategy through income tax exemption on capital gains tax under PRC investing solely in China A-Share Access Products (“CAAPs”) or Corporate Income Tax Law. a combination of CAAPs and the iShares CSI Sector Index Funds*. On 17th February 2017, the Manager announced that Via the release of Circular 79, Caishui [2014] No. 81 (“Circular the CSI 300 ETF had completed its transition from a “synthetic 81”) and Caishui [2016] No. 127 (“Circular 127”) by the Ministry representative” strategy to a “physical representative” strategy of Finance (“MOF”) in the PRC, the China Securities Regulatory under which its holding in A-Shares and Physical A-Share ETFs Commission (“CSRC”), and the State Administration of (for cash management and contingency purposes) in Taxation (“SAT”) acting with State Council’s approval, a aggregate comprise 90% or more of its Net Asset Value on an temporary exemption from tax on capital gains derived from ongoing basis. the trading of A-Shares on or after 17th November 2014 was provided to (i) QFIIs/RQFIIs; and (ii) foreign investors trading From 28th February 2017 onwards, the asterisk and annotation in A-Shares via Stock Connect respectively. However, Circular to the name of the CSI 300 ETF was removed and the name of 79 did also state that any gains realized by QFIIs/RQFIIs prior CSI 300 ETF was changed from the “iShares CSI 300 A-Share to 17th November 2014 would be subject to tax in accordance Index ETF* (*This is a synthetic ETF)” to “iShares Core CSI 300 with law. Index ETF”. * “iShares CSI Sector Index Funds” means the (i) iShares CSI A-Share Energy Index ETF* (*This is a synthetic ETF); (ii) iShares CSI A-Share Materials Index ETF* (*This is a synthetic ETF); (iii) iShares CSI A-Share Financials Index ETF* (*This is a synthetic ETF); (iv) iShares CSI A-Share Infrastructure index ETF* (*This is a synthetic ETF); (v) iShares CSI A-Share Consumer Discretionary Index ETF* (*This is a synthetic ETF); and (vi) iShares CSI A-Share Consumer Staples Index ETF* (*This is a synthetic ETF). Reports and Financial Statements 13


  • Page 15

    iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) (continued) Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction Total Return(b) in HK$ Since Pursuant to Circular 79, the Manager realigned the (as at 31st December) 2012 2011 2010 Inception(e) provisioning policy of the CSI 300 ETF in respect of its CSI 300 Index(c) 10.70% -20.55% -8.16% 4.35% underlying PRC investments in CAAPs. As at 31st December 2017, the Manager has settled with all CAAP issuers the CSI 300 ETF NAV-to-NAV(d) 1.56% -24.65% -4.63% 1.87% withheld capital gains tax (“CGT”) amounts attributable to the CAAPs invested in by the CSI 300 ETF. True-up adjustments representing the difference between the accrued provision Source: BlackRock, China Securities Index Co Ltd (CSI) and WM/Reuters and final settlement amount was made to the Sub-Fund. Depending on whether the withheld provision of the CSI 300 The CSI 300 Index is a free-float market capitalization- ETF was greater or less than the amount of CGT attributable weighted index that is compiled and published by China resulted in adjustments to the net asset value (“NAV”) of the Securities Index Co., Ltd (“CSI”) since 31st December 2004. CSI 300 ETF, be it positive or negative. The CSI 300 Index is a diversified index consisting of 300 constituent stocks traded on the Shanghai Stock Exchange For further detail regarding these adjustments, please refer to and Shenzhen Stock Exchange. The difference in performance the iShares Asia Trust Announcements released by the between the CSI 300 Index and the CSI 300 ETF is mainly Manager on 30th October 2015, 24th November 2015, 12th attributed to fees and expenses, including collateral costs, August 2016, 12th October 2016, 25th October 2016 and taxes on dividends and PRC capital gains, and a different 20th December 2016. currency exchange rate used for fund valuation and index calculation. Fund Performance The CSI 300 ETF seeks to provide investment results, before Effective from 4th February 2014, the Sub-Fund is tracking the fees and expenses, that closely correspond to the Net Total Return Index that has taken into account the 10% performance of the CSI 300 Index in Hong Kong dollar (“HK$”) withholding tax on dividends of China A-Shares. In the past, terms. As at 31st December 2017, the Dealing NAV per unit of the Sub-Fund tracked the gross (of tax) total return index. the CSI 300 ETF was HK$31.29, and there were 5,750,000 units outstanding. The total size of the Sub-Fund was Fund Activities approximately HK$179.9 million. The average daily trading volume for the CSI 300 ETF during the year was reported by Bloomberg to be approximately A summary of the performance of the CSI 300 ETF(a) is given 22,966 units. As at 31st December 2017, the CSI 300 ETF below. comprised 5,750,000 outstanding units. Total Return(b) in HK$ In accordance with the Dividend Announcement on 29th (as at 31st December) 2017 2016 2015 2014 2013 November 2017, a final distribution of HK$0.29 was declared. The ex-dividend date for the CSI 300 ETF was 18th December CSI 300 Index(c) 32.69% -15.21% 0.79% 54.92% -2.54% 2017 and the record date was 19th December 2017. The CSI 300 ETF distribution was paid on 29th December 2017. NAV-to-NAV(d) 30.46% -15.77% 0.34% 51.18% -6.62% Index Activities The CSI 300 Index underwent two regular reviews during the year. As at 31st December 2017, the CSI 300 ETF held 281 constituents versus the 300 constituents in the CSI 300 Index. (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 12th November 2009. 14 iShares Asia Trust


  • Page 16

    iShares Core KOSPI 200 Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction The KOSPI 200 Net Total Return USD Index is a free float- The iShares Core KOSPI 200 Index ETF (the “KOSPI 200 ETF”) adjusted market capitalization-weighted index based on 200 (the “Sub-Fund”), a sub-fund of the iShares Asia Trust (the blue chip companies listed on the Korea Stock Market, which “Trust”), was launched on 22nd June 2016 and commenced are selected on the basis of such factors as their market and trading under the stock codes 83170 for the RMB counter, sector representation and liquidity. It is calculated and 9170 for the USD counter and 3170 for the HKD counter on maintained by the Korea Exchange. The KOSPI 200 Net Total The Stock Exchange of Hong Kong Limited (the “SEHK”) on Return USD Index is a net total return index, meaning its 29th June 2016. The KOSPI 200 ETF is a Hong Kong unit trust performance is calculated on the basis that dividends net of authorized under the Securities and Futures Ordinance (Cap. tax are reinvested. 571) of Hong Kong. The KOSPI 200 ETF is benchmarked against the KOSPI 200 Net Total Return USD Index. The Fund Activities Manager of the KOSPI 200 ETF is BlackRock Asset The average daily trading volume for the KOSPI 200 ETF Management North Asia Limited (the “Manager”) and the during the year was reported by Bloomberg to be trustee is HSBC Institutional Trust Services (Asia) Limited (the approximately 29,907 units. As at 31st December 2017, the “Trustee”). KOSPI 200 ETF comprised 9,000,000 outstanding units. Fund Performance Index Activities The KOSPI 200 ETF seeks to provide investment results, before The KOSPI 200 Net Total Return USD Index underwent one fees and expenses, that closely correspond to the regular review during the year. As at 31st December 2017, the performance of the KOSPI 200 Net Total Return USD Index in KOSPI 200 ETF held 197 constituents versus the 200 United States dollar (“US$”) terms. As at 31st December 2017, constituents in the KOSPI 200 Net Total Return USD Index. the Dealing NAV per unit of the KOSPI 200 Index ETF was US$1.52 and there were 9,000,000 units outstanding. The total size of the Sub-Fund was approximately US$13.7 million. A summary of the performance of the KOSPI 200 ETF(a) is given below. Total Return(b) in US$ (as at 31st Since December) 2017 2016 Inception(e) KOSPI 200 Net Total Return USD Index(c) 44.53% 0.89% 28.11% KOSPI 200 ETF NAV-to-NAV(d) 42.47% 1.73% 27.61% Source: BlackRock, MSCI Barra and WM/Reuters (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 22nd June 2016. Reports and Financial Statements 15


  • Page 17

    iShares Core MSCI Taiwan Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction The MSCI Taiwan Index is a free float-adjusted market The iShares Core MSCI Taiwan Index ETF (the “MSCI Taiwan capitalization covering approximately 85% of the Taiwan ETF”) (the “Sub-Fund”), a sub-fund of the iShares Asia Trust investable equity universe on a net total return basis with (the “Trust”), was launched on 22nd June 2016 and dividends net of tax reinvested, subject to a global minimum commenced trading under the stock codes 83074 for the RMB size requirement. It is calculated and maintained by MSCI Inc. counter, 9074 for the USD counter and 3074 for the HKD counter on The Stock Exchange of Hong Kong Limited (the Fund Activities “SEHK”) on 29th June 2016. The MSCI Taiwan ETF is a Hong Kong unit trust authorized under the Securities and Futures The average daily trading volume for the MSCI Taiwan ETF Ordinance (Cap. 571) of Hong Kong. The MSCI Taiwan ETF is during the year was reported by Bloomberg to be benchmarked against the MSCI Taiwan Index. The Manager of approximately 70,724 units. As at 31st December 2017, the the MSCI Taiwan ETF is BlackRock Asset Management North MSCI Taiwan ETF comprised 22,200,000 outstanding units. Asia Limited (the “Manager”) and the trustee is HSBC Institutional Trust Services (Asia) Limited (the “Trustee”). In accordance with the Dividend Announcement on 30th August 2017, a quarterly distribution of US$0.02 was declared. Fund Performance The ex-dividend date for the MSCI Taiwan ETF was 18th The MSCI Taiwan ETF seeks to provide investment results, September 2017 and the record date was 19th September before fees and expenses, that closely correspond to the 2017. The distribution was paid on 29th September 2017. performance of the MSCI Taiwan Index in United States dollar (“US$”) terms. As at 31st December 2017, the Dealing NAV Index Activities per unit of the MSCI Taiwan ETF was US$1.41 and there were The MSCI Taiwan Index underwent four regular reviews during 22,200,000 units outstanding. The total size of the Sub-Fund the year. As at 31st December 2017, the MSCI Taiwan ETF held was approximately US$31.3 million. all constituents in the MSCI Taiwan Index. A summary of the performance of the MSCI Taiwan ETF(a) is given below. Total Return(b) in US$ (as at 31st Since December) 2017 2016 Inception(e) MSCI Taiwan Index(c) 27.53% 9.57% 24.58% MSCI Taiwan ETF NAV-to-NAV(d) 26.98% 9.31% 24.04% Source: BlackRock, MSCI Barra and WM/Reuters (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 22nd June 2016. 16 iShares Asia Trust


  • Page 18

    iShares DAX Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction The DAX Index is a free float-adjusted market capitalization The iShares DAX Index ETF (the “DAX ETF”) (the “Sub-Fund”), weighted index that tracks the segment of the 30 largest and a sub-fund of the iShares Asia Trust (the “Trust”), was launched most important companies – known as blue chips – on the on 23rd June 2016 and commenced trading under the stock Frankfurt Stock Exchange. It is calculated and maintained by codes 83146 for the RMB counter, 9146 for the USD counter Deutsche Börse AG. The DAX Index is a gross total return and 3146 for the HKD counter on The Stock Exchange of index, meaning its performance is calculated on the basis that Hong Kong Limited (the “SEHK”) on 29th June 2016. The DAX dividends gross of tax are reinvested. ETF is a Hong Kong unit trust authorized under the Securities and Futures Ordinance (Cap. 571) of Hong Kong. The DAX Fund Activities ETF is benchmarked against the DAX Index. The Manager of The average daily trading volume for the DAX ETF during the the DAX ETF is BlackRock Asset Management North Asia year was reported by Bloomberg to be approximately 35,491 Limited (the “Manager”) and the trustee is HSBC Institutional units. As at 31st December 2017, the DAX ETF comprised Trust Services (Asia) Limited (the “Trustee”). 2,400,000 outstanding units. Fund Performance Index Activities The DAX ETF seeks to provide investment results, before fees The DAX Index underwent two regular reviews during the year. and expenses, that closely correspond to the performance of As at 31st December 2017, the DAX ETF held all constituents the DAX Index in the Euro (“EUR”) terms. As at 31st December in the DAX Index. 2017, the Dealing NAV per unit of the DAX ETF was EUR 1.17 and there were 2,400,000 units outstanding. The total size of the Sub-Fund was approximately EUR 2.8 million. A summary of the performance of the DAX ETF(a) is given below. Total Return(b) in EUR (as at 31st Since December) 2017 2016 Inception(e) DAX Index(c) 12.51% 11.93% 16.39% DAX ETF NAV-to-NAV(d) 11.55% 11.82% 15.66% Source: BlackRock, MSCI Barra and WM/Reuters (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 23rd June 2016. Reports and Financial Statements 17


  • Page 19

    iShares EURO STOXX 50 Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction The EURO STOXX 50 Index is a free float-adjusted market The iShares EURO STOXX 50 Index ETF (the “EURO STOXX 50 capitalization weighted index. It represents the 50 largest ETF”) (the “Sub-Fund”), a sub-fund of the iShares Asia Trust companies in terms of free-float market capitalization in 12 (the “Trust”), was launched on 23rd June 2016 and Eurozone countries. It is calculated and maintained by STOXX commenced trading under the stock codes 83155 for the RMB Limited. The EURO STOXX 50 Index is a net total return index, counter, 9155 for the USD counter and 3155 for the HKD meaning its performance is calculated on the basis that counter on The Stock Exchange of Hong Kong Limited (the dividends net of tax are reinvested. “SEHK”) on 29th June 2016. The EURO STOXX 50 ETF is a Hong Kong unit trust authorized under the Securities and Fund Activities Futures Ordinance (Cap. 571) of Hong Kong. The EURO The average daily trading volume for the EURO STOXX 50 ETF STOXX 50 ETF is benchmarked against the EURO STOXX 50 during the year was reported by Bloomberg to be Index. The Manager of the EURO STOXX 50 ETF is BlackRock approximately 37,881 units. As at 31st December 2017, the Asset Management North Asia Limited (the “Manager”) and EURO STOXX 50 ETF comprised 3,000,000 outstanding units. the trustee is HSBC Institutional Trust Services (Asia) Limited (the “Trustee”). Index Activities The EURO STOXX 50 Index underwent four regular reviews Fund Performance during the year. As at 31st December 2017, the EURO STOXX The EURO STOXX 50 ETF seeks to provide investment results, 50 ETF held all constituents in the EURO STOXX 50 Index. before fees and expenses, that closely correspond to the performance of the EURO STOXX 50 Index in the Euro (“EUR”) terms. As at 31st December 2017, the Dealing NAV per unit of the EURO STOXX 50 ETF was EUR 1.11 and there were 3,000,000 units outstanding. The total size of the Sub-Fund was approximately EUR 3.3 million. A summary of the performance of the EURO STOXX 50 ETF(a) is given below. Total Return(b) in EUR (as at 31st Since December) 2017 2016 Inception(e) EURO STOXX 50 Index(c) 9.15% 8.93% 12.07% EURO STOXX 50 ETF NAV-to-NAV(d) 8.96% 8.79% 11.84% Source: BlackRock, MSCI Barra and WM/Reuters (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 23rd June 2016. 18 iShares Asia Trust


  • Page 20

    iShares FTSE 100 Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction The FTSE 100 Index is a free float market capitalization- The iShares FTSE 100 Index ETF (the “FTSE 100 ETF”) (the weighted index of UK-listed blue chips companies. It is “Sub-Fund”), a sub-fund of the iShares Asia Trust (the “Trust”), designed to measure the performance of the 100 largest UK was launched on 23rd June 2016 and commenced trading companies listed on the London Stock Exchange (the “LSE”) under the stock codes 82847 for the RMB counter, 9847 for by full market capitalization, i.e. before the application of any the USD counter and 2847 for the HKD counter on The Stock investability weights. It is calculated and maintained by FTSE Exchange of Hong Kong Limited (the “SEHK”) on 29th June International Limited (“FTSE”). The FTSE 100 Index is a net 2016. The FTSE 100 ETF is a Hong Kong unit trust authorized total return index, meaning its performance is calculated on under the Securities and Futures Ordinance (Cap. 571) of the basis that dividends net of tax are reinvested. Hong Kong. The FTSE 100 ETF is benchmarked against the FTSE 100 Index. The Manager of the FTSE 100 ETF is Fund Activities BlackRock Asset Management North Asia Limited (the The average daily trading volume for the FTSE 100 ETF during “Manager”) and the trustee is HSBC Institutional Trust Services the year was reported by Bloomberg to be approximately (Asia) Limited (the “Trustee”). 11,655 units. As at 31st December 2017, the FTSE 100 ETF comprised 3,000,000 outstanding units. Fund Performance The FTSE 100 ETF seeks to provide investment results, before Index Activities fees and expenses, that closely correspond to the The FTSE 100 Index underwent four regular reviews during the performance of the FTSE 100 Index in British Pound (“GBP”) year. As at 31st December 2017, the FTSE 100 ETF held all terms. As at 31st December 2017, the Dealing NAV per unit of constituents in the FTSE 100 Index. the FTSE 100 ETF was GBP 0.93 and there were 3,000,000 units outstanding. The total size of the Sub-Fund was approximately GBP 2.8 million. A summary of the performance of the FTSE 100 ETF(a) is given below. Total Return(b) in GBP (as at 31st Since December) 2017 2016 Inception(e) FTSE 100 Index(c) 11.91% 14.63% 17.82% FTSE 100 ETF NAV-to- NAV(d) 11.56% 14.46% 17.46% Source: BlackRock, MSCI Barra and WM/Reuters (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 23rd June 2016. Reports and Financial Statements 19


  • Page 21

    iShares NASDAQ 100 Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction The NASDAQ 100 Index is a modified market capitalization- The iShares NASDAQ 100 Index ETF (the “NASDAQ 100 ETF”) weighted index. It includes 100 of the largest US and (the “Sub-Fund”), a sub-fund of the iShares Asia Trust (the international non-financial companies listed on The NASDAQ “Trust”), was launched on 22nd June 2016 and commenced Stock Market LLC (“NASDAQ”) based on market capitalization. trading under the stock codes 82834 for the RMB counter, It is calculated and maintained by The NASDAQ OMX Group 9834 for the USD counter and 2834 for the HKD counter on Inc. or its affiliates. The NASDAQ 100 Index is a net total return The Stock Exchange of Hong Kong Limited (the “SEHK”) on index, meaning its performance is calculated on the basis that 29th June 2016. The NASDAQ 100 ETF is a Hong Kong unit dividends net of tax are reinvested. trust authorized under the Securities and Futures Ordinance (Cap. 571) of Hong Kong. The NASDAQ 100 ETF is Fund Activities benchmarked against the NASDAQ 100 Index. The Manager The average daily trading volume for the NASDAQ 100 ETF of the NASDAQ 100 ETF is BlackRock Asset Management during the year was reported by Bloomberg to be North Asia Limited (the “Manager”) and the trustee is HSBC approximately 21,871 units. As at 31st December 2017, the Institutional Trust Services (Asia) Limited (the “Trustee”). NASDAQ 100 ETF comprised 6,000,000 outstanding units. Fund Performance Index Activities The NASDAQ 100 ETF seeks to provide investment results, The NASDAQ 100 Index underwent four regular reviews before fees and expenses, that closely correspond to the during the year. As at 31st December 2017, the NASDAQ 100 performance of the NASDAQ 100 Index in United States dollar ETF held all constituents in the NASDAQ 100 Index. (“US$”) terms. As at 31st December 2017, the Dealing NAV per unit of the NASDAQ 100 ETF was US$1.52 and there were 6,000,000 units outstanding. The total size of the Sub-Fund was approximately US$9.1 million. A summary of the performance of the NASDAQ 100 ETF(a) is given below. Total Return(b) in US$ (as at 31st Since December) 2017 2016 Inception(e) NASDAQ 100 Index(c) 32.53% 10.91% 28.79% NASDAQ 100 ETF NAV-to-NAV(d) 32.05% 10.73% 28.35% Source: BlackRock, MSCI Barra and WM/Reuters (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 22nd June 2016. 20 iShares Asia Trust


  • Page 22

    iShares Core Hang Seng Index ETF Report of the Manager to the Unitholders (a Sub-Fund of iShares Asia Trust) Introduction The HSI Net Total Return Index adopts a free float adjusted The iShares Core Hang Seng Index ETF (the “Hang Seng ETF”) market capitalization-weighted methodology with a 10% cap (the “Sub-Fund”), a sub-fund of the iShares Asia Trust (the on individual securities. The universe of securities of HSI Net “Trust”), was launched on 18th November 2016 and Total Return Index includes stocks and real estate investment commenced trading under the stock codes 83115 for the RMB trusts primarily listed on the main board of The Stock counter, 9115 for the USD counter and 3115 for the HKD Exchange of Hong Kong Limited (“SEHK”), excluding securities counter on The Stock Exchange of Hong Kong Limited (the that are secondary listings, foreign companies, preference “SEHK”) on 23rd November 2016. The Hang Seng ETF is a shares, debt securities, mutual funds and other derivatives. Hong Kong unit trust authorized under the Securities and Securities need to meet eligibility requirements based on Futures Ordinance (Cap. 571) of Hong Kong. The Hang Seng market value, turnover and listing history, and H-shares are ETF is benchmarked against the Hang Seng Index (net total only included if they meet specific additional requirements. return version) (“HSI Net Total Return Index”). The Manager of Final selections are based on the market capitalization and the Hang Seng ETF is BlackRock Asset Management North turnover rank of securities, the representation of the relevant Asia Limited (the “Manager”) and the trustee is HSBC sub-sector within the HSI Net Total Return Index directly Institutional Trust Services (Asia) Limited (the “Trustee”). reflecting that of the market and the financial performance. The review of HSI Net Total Return Index is conducted Fund Performance quarterly. The Hang Seng ETF seeks to provide investment results, before fees and expenses, that closely correspond to the Fund Activities performance of the HSI Net Total Return Index. As at 31st The average daily trading volume for the Hang Seng ETF December 2017, the Dealing NAV per unit of the Hang Seng during the period was reported by Bloomberg to be ETF was HK$107.43 and there were 3,200,000 units approximately 138,171 units. As at 31st December 2017, the outstanding. The total size of the Sub-Fund was appropriately Hang Seng ETF comprised 3,200,000 outstanding units. HK$343.8 million. In accordance with the Dividend Announcements on 31st May A summary of the performance of the Hang Seng ETF(a) is 2017 and 29th November 2017, semi-annual distribution of given below. HK$0.71 and HK$2.95 were declared, corresponding with an ex-dividend date of 19th June 2017 and 18th December 2017, Total Return(b) in HK$ (as at 31st Since and a record date of 20th June 2017, 19th December 2017. December) 2017 2016 Inception(e) The distribution was paid on 30th June 2017 and 29th HSI Net Total Return Index(c) 41.04% -1.47% 34.27% December 2017. Hang Seng ETF NAV-to- NAV(d) 40.70% -1.48% 33.97% Index Activities The HSI Net Total Return Index underwent four regular reviews during the period. As at 31st December 2017, the Hang Seng Source: BlackRock, MSCI Barra and WM/Reuters held all constituents in the HSI Net Total Return Index. (a) Past performance figures shown are not indicative of the future performance of the Sub-Fund. (b) Total returns represent the rate that an investor would have earned (or lost) on an investment, assuming reinvestment of all dividends and distributions. Calculated as at 31st December. (c) An investor cannot invest directly in an index and the index performance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns of the Sub-Fund. (d) Units in the Sub-Fund are issued and redeemed at NAV. Therefore, the Sub-Fund does not publish a bid price and the Sub-Fund’s returns have been calculated from NAV. (e) This is the annualized return since fund inception. The Sub-Fund inception date is 18th November 2016. Reports and Financial Statements 21


  • Page 23

    Report of the Trustee to the Unitholders iShares Asia Trust We hereby confirm that, in our opinion, the Manager of the iShares MSCI China Index ETF, iShares MSCI China A International Index ETF, iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* (*This is a synthetic ETF)), iShares Core S&P BSE SENSEX India Index ETF, iShares Core MSCI AC Asia ex Japan Index ETF, iShares MSCI Emerging Asia Index ETF, iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)), iShares Core KOSPI 200 Index ETF, iShares Core MSCI Taiwan Index ETF, iShares DAX Index ETF, iShares EURO STOXX 50 Index ETF, iShares FTSE 100 Index ETF, iShares NASDAQ 100 Index ETF and iShares Core Hang Seng Index ETF (the “Sub-Funds”) has, in all material respects, managed the Sub-Funds in accordance with the provisions of the Trust Deed dated 16th November 2001, as amended, for the period ended 31st December 2017. HSBC Institutional Trust Services (Asia) Limited 26th April 2018 22 iShares Asia Trust


  • Page 24

    Statement of Responsibilities of the Manager and the Trustee iShares Asia Trust Manager’s Responsibilities Trustee’s Responsibilities The Manager of the iShares MSCI China Index ETF, iShares The Trustee of the Sub-Funds is required to: MSCI China A International Index ETF, iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index – ensure that the Sub-Funds in all material respects are ETF* (*This is a synthetic ETF)), iShares Core S&P BSE SENSEX managed in accordance with the Trust Deed and that the India Index ETF, iShares Core MSCI AC Asia ex Japan Index investment and borrowing powers are complied with; ETF, iShares MSCI Emerging Asia Index ETF, iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share – satisfy itself that sufficient accounting and other records Index ETF* (*This is a synthetic ETF)), iShares Core KOSPI 200 have been maintained; Index ETF, iShares Core MSCI Taiwan Index ETF, iShares DAX Index ETF, iShares EURO STOXX 50 Index ETF, iShares FTSE – safeguard the property of the Sub-Funds and rights 100 Index ETF, iShares NASDAQ 100 Index ETF and iShares attaching thereto; and Core Hang Seng Index ETF (the Sub-Funds of iShares Asia Trust) (the “Sub-Funds”) is required by the Code on Unit Trusts – report to the Unitholders for each annual accounting and Mutual Funds issued by the Securities and Futures period should the Manager not managing the Sub-Funds Commission of Hong Kong and the Trust Deed dated 16th in accordance of the Trust Deed. November 2001, as amended (the “Trust Deed”), to prepare financial statements for each annual accounting period which give a true and fair view of the financial position of the Sub- Funds at the end of that period and of the transactions for the period then ended. In preparing these financial statements the Manager is required to: – select suitable accounting policies and then apply them consistently; – make judgments and estimates that are prudent and reasonable; and – prepare the financial statements on the basis that the Sub-Funds will continue in operation unless it is inappropriate to presume this. The Manager is also required to manage the Sub-Funds in accordance with the Trust Deed and take reasonable steps for the prevention and detection of fraud and other irregularities in relation to the Sub-Funds. iShares Asia Trust (the “Trust”) is an umbrella unit trust governed by its Trust Deed. As at 31st December 2017, the Trust has established fourteen sub-funds, namely iShares MSCI China Index ETF, iShares MSCI China A International Index ETF, iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* (*This is a synthetic ETF)), iShares Core S&P BSE SENSEX India Index ETF, iShares Core MSCI AC Asia ex Japan Index ETF, iShares MSCI Emerging Asia Index ETF, iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)), iShares Core KOSPI 200 Index ETF, iShares Core MSCI Taiwan Index ETF, iShares DAX Index ETF, iShares EURO STOXX 50 Index ETF, iShares FTSE 100 Index ETF, iShares NASDAQ 100 Index ETF and iShares Core Hang Seng Index ETF. Reports and Financial Statements 23


  • Page 25

    Independent Auditor’s Report To the Unitholders of iShares Asia Trust (The “Trust”) Report on the Audit of the Financial Statements Basis for Opinion We conducted our audit in accordance with International Opinion Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the Auditor’s What we have audited Responsibilities for the Audit of the Financial Statements The financial statements of iShares MSCI China Index ETF, section of our report. iShares MSCI China A International Index ETF, iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 We believe that the audit evidence we have obtained is China Index ETF* (*This is a synthetic ETF)), iShares Core S&P sufficient and appropriate to provide a basis for our opinion. BSE SENSEX India Index ETF, iShares Core MSCI AC Asia ex Japan Index ETF, iShares MSCI Emerging Asia Index ETF, Independence iShares Core CSI 300 Index ETF (formerly known as iShares We are independent of the Sub-Funds in accordance with the CSI 300 A-Share Index ETF* (*This is a synthetic ETF)), iShares International Ethics Standards Board for Accountants’ Code of Core KOSPI 200 Index ETF, iShares Core MSCI Taiwan Index Ethics for Professional Accountants (“IESBA Code”), and we ETF, iShares DAX Index ETF, iShares EURO STOXX 50 Index have fulfilled our other ethical responsibilities in accordance ETF, iShares FTSE 100 Index ETF and iShares NASDAQ 100 with the IESBA Code. Index ETF for the year ended 31st December 2017 and iShares Core Hang Seng Index ETF for the period from 18th Emphasis of Matter November 2016 (date of inception) to 31st December 2017 We draw your attention to Note 2 to the financial statements (“relevant periods”) and as at 31st December 2017 (each a which states that the Manager has decided to terminate separate sub-fund of the Trust and referred to individually or iShares MSCI China A International Index ETF. As a result, the collectively as the “Sub-Funds”) set out on pages 28 to 100, financial statements of iShares MSCI China A International which comprise: Index ETF have not been prepared on a going concern basis of accounting, and are prepared in accordance with the basis • the Statement of Financial Position as at 31st December set out in Note 2. Our opinion is not modified in respect of this 2017; matter. • the Statement of Comprehensive Income for the relevant Key Audit Matters periods then ended; Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the • the Statement of Changes in Net Assets Attributable to financial statements of the current period. These matters were Unitholders for the relevant periods then ended; addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, • the Statement of Cash Flows for the relevant periods then and we do not provide a separate opinion on these matters. ended; and Key audit matters identified in our audit are summarised as • the notes to the financial statements, which include a follows: summary of significant accounting policies. • Existence and valuation of investments Our opinion In our opinion, the financial statements give a true and fair view of the financial position of each of the Sub-Funds as at 31st December 2017, and of each of their financial transactions and their cash flows for the relevant periods then ended in accordance with International Financial Reporting Standards (“IFRSs”). 24 iShares Asia Trust


  • Page 26

    Independent Auditor’s Report To the Unitholders of iShares Asia Trust (The “Trust”) (continued) Key Audit Matter How our audit addressed the Key Audit Matter Existence and valuation of investments We tested the existence of investments by obtaining direct confirmations from the Sub-Funds’ custodians and CAAP Issuers The investments held by each of the Sub-Funds as at 31st (as applicable), and agreeing the Sub-Funds’ holdings of December 2017 mainly comprised (i) listed equities, (ii) China investments to those confirmations. No material exceptions were A-Share Access Products (“CAAPs”) as defined in note 1 to the identified from our testing. financial statements and (iii) an investment fund, in their respective financial statements, which were valued at: For the listed equities held by each of the Sub-Funds, we agreed their valuations by comparing the pricing used by the Sub-Funds iShares MSCI China Index ETF listed equities: to external pricing sources as at 31st December 2017. We found HK$2,404,732,674 no material exceptions from our testing. iShares MSCI China A International listed equities: Index ETF RMB67,058,219 For CAAPs, we checked the contract terms of the CAAPs on a iShares FTSE A50 China Index ETF listed equities: sample basis to ensure that they were each linked to the (formerly known as iShares FTSE A50 HK$28,741,301,772 performance of the underlying listed equities. We also China Index ETF* (*This is a synthetic performed credit spread analysis for all CAAPs Issuers to assess ETF)) CAAPs: the impact of their credit and counterparty risk on the fair value HK$2,023,653,891 of CAAPs, if any. In addition, we agreed the valuations of the CAAPs’ underlying listed equities by comparing the pricing used iShares Core S&P BSE SENSEX India investment fund: by the Sub-Funds to external pricing sources as at 31st Index ETF HK$1,094,333,177 December 2017. We found no material exceptions from our iShares Core MSCI AC Asia ex Japan listed equities: testing. Index ETF HK$7,399,800,310 iShares MSCI Emerging Asia Index ETF listed equities: For the investment fund, we agreed its valuation by comparing HK$179,930,047 the pricing used to its net asset value as reported by the iShares Core CSI 300 Index ETF (formerly listed equities: administrator of the investment fund. known as iShares CSI 300 A-Share HK$179,683,353 Index ETF* (*This is a synthetic ETF)) In addition, for listed equities that have been suspended for iShares Core KOSPI 200 Index ETF listed equities: trading as at 31st December 2017, we assessed the US$13,611,268 appropriateness of the valuation methodology adopted by the Manager. We also assessed the judgments made in determining iShares Core MSCI Taiwan Index ETF listed equities: the valuation of these investments by considering factors that US$31,310,877 may impact their fair values, including duration of the suspension iShares DAX Index ETF listed equities: period, relevant market information and news of the suspended EUR2,805,291 listed equities, the price movement of comparable indices iShares EURO STOXX 50 Index ETF listed equities: during the suspension period and, if applicable, the market EUR3,319,501 prices of the suspended listed equities upon resumption of iShares FTSE 100 Index ETF listed equities: trading after 31st December 2017. GBP2,761,857 iShares NASDAQ 100 Index ETF listed equities: Based on the procedures we performed, we found the US$9,116,638 judgments made in determining the valuations of the investments to be supportable by available evidence. iShares Core Hang Seng Index ETF listed equities: HK$343,310,604 Investments held by certain Sub-Funds included listed equities that have been suspended for trading as at 31st December 2017, valued at: iShares MSCI China A International listed equities: Index ETF RMB2,627,778 iShares Core CSI 300 Index ETF (formerly listed equities: known as iShares CSI 300 A-Share HK$5,008,732 Index ETF* (*This is a synthetic ETF)) iShares Core KOSPI 200 Index ETF listed equities: US$30,050 We focused on the existence and valuation of the investments because the investments represented the principal element of the respective Sub-Funds’ net asset value. In addition, we also focused on the valuation of listed equities that have been suspended for trading as at 31st December 2017 because the judgment made by the Manager in determining their fair values involved a higher degree of subjectivity. Refer to note 11 to the financial statements. Reports and Financial Statements 25


  • Page 27

    Independent Auditor’s Report To the Unitholders of iShares Asia Trust (The “Trust”) (continued) Other Information assurance is a high level of assurance, but is not a guarantee The Manager and the Trustee (the “Management”) of the that an audit conducted in accordance with ISAs will always Sub-Funds are responsible for the other information. The other detect a material misstatement when it exists. Misstatements information comprises all of the information included in the can arise from fraud or error and are considered material if, annual report other than the financial statements and our individually or in the aggregate, they could reasonably be auditor’s report thereon. expected to influence the economic decisions of users taken on the basis of these financial statements. In addition, we are Our opinion on the financial statements of the Sub-Funds required to assess whether the financial statements of the does not cover the other information and we do not express Sub-Funds have been properly prepared, in all material any form of assurance conclusion thereon. respects, in accordance with the relevant disclosure provisions of the Trust Deed and the relevant disclosure provisions of In connection with our audit of the financial statements, our Appendix E of the SFC Code. responsibility is to read the other information and, in doing so, consider whether the other information is materially As part of an audit in accordance with ISAs, we exercise inconsistent with the financial statements or our knowledge professional judgment and maintain professional scepticism obtained in the audit or otherwise appears to be materially throughout the audit. We also: misstated. • Identify and assess the risks of material misstatement of the If, based on the work we have performed, we conclude that financial statements, whether due to fraud or error, design there is a material misstatement of this other information, we and perform audit procedures responsive to those risks, are required to report that fact. We have nothing to report in and obtain audit evidence that is sufficient and appropriate this regard. to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than Responsibilities of Management for the Financial Statements for one resulting from error, as fraud may involve collusion, The Management of the Sub-Funds is responsible for the forgery, intentional omissions, misrepresentations, or the preparation of the financial statements that give a true and fair override of internal control. view in accordance with IFRSs, and for such internal control as the Management determines is necessary to enable the • Obtain an understanding of internal control relevant to the preparation of financial statements that are free from material audit in order to design audit procedures that are misstatement, whether due to fraud or error. appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Sub- In preparing the financial statements, the Management of the Funds’ internal control. Sub-Funds is responsible for assessing the Sub-Funds’ ability to continue as a going concern, disclosing, as applicable, • Evaluate the appropriateness of accounting policies used matters related to going concern and using the going concern and the reasonableness of accounting estimates and basis of accounting unless the Management either intends to related disclosures made by the Management. liquidate the Sub-Funds or to cease operations, or have no realistic alternative but to do so. • Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based In addition, the Management of the Sub-Funds is required to on the audit evidence obtained, whether a material ensure that the financial statements have been properly uncertainty exists related to events or conditions that may prepared in accordance with the relevant disclosure provisions cast significant doubt on the Sub-Funds’ ability to continue of the Trust Deed dated 16th November 2001, as amended as a going concern. If we conclude that a material (“Trust Deed”) and the relevant disclosure provisions of uncertainty exists, we are required to draw attention in our Appendix E of the Code on Unit Trusts and Mutual Funds auditor’s report to the related disclosures in the financial issued by the Hong Kong Securities and Futures Commission statements or, if such disclosures are inadequate, to modify (the “SFC Code”). our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. Auditor’s Responsibilities for the Audit of the Financial However, future events or conditions may cause the Sub- Statements Funds to cease to continue as a going concern. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from • Evaluate the overall presentation, structure and content of material misstatement, whether due to fraud or error, and to the financial statements, including the disclosures, and issue an auditor’s report that includes our opinion. We report whether the financial statements represent the underlying our opinion solely to you, as a body, and for no other purpose. transactions and events in a manner that achieves fair We do not assume responsibility towards or accept liability to presentation. any other person for the contents of this report. Reasonable 26 iShares Asia Trust


  • Page 28

    Independent Auditor’s Report To the Unitholders of iShares Asia Trust (The “Trust”) (continued) We communicate with the Management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Management with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Management, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on matters under the relevant disclosure provisions of the Trust Deed and the relevant disclosure provisions of Appendix E of the SFC Code In our opinion, the financial statements of the Sub-Funds have been properly prepared, in all material respects, in accordance with the relevant disclosure provisions of the Trust Deed and the relevant disclosure provisions of Appendix E of the SFC Code. The engagement partner on the audit resulting in this independent auditor’s report is Paul John Walters. PricewaterhouseCoopers Certified Public Accountants Hong Kong, 26th April 2018 Reports and Financial Statements 27


  • Page 29

    Statement of Financial Position As at 31st December 2017 iShares MSCI China A iShares MSCI China Index ETF International Index ETF 2017 2016 2017 2016 Note HK$ HK$ RMB RMB Assets Current Assets Financial assets at fair value through profit or loss 11(a) 2,404,732,674 1,404,268,081 67,058,219 65,803,015 Dividends receivable 180,089 53,207 – – Interest receivable 115 1 19 – Amounts due from brokers 11(b) – 4,819,002 – – Management fee reimbursement receivable 7(a) – – – 32,079 Other accounts receivable – 2,104 – – Margin deposits 11(b) – 175,847 – – Bank balances 7(e), 11(b) 3,042,526 5,114,433 402,529 248,920 Total assets 2,407,955,404 1,414,432,675 67,460,767 66,084,014 Liabilities Current Liabilities Margin deposits 38 – – – Amounts due to unitholders for redemptions – 4,821,127 – – Management fee payable 7(a) 1,039,811 705,736 24,612 – Other accounts payable 47,817 30,722 1,694 11,876 Total liabilities 1,087,666 5,557,585 26,306 11,876 Net assets attributable to unitholders 2,406,867,738 1,408,875,090 67,434,461 66,072,138 Approved by the Trustee and the Manager on 26th April 2018. HSBC Institutional Trust Services (Asia) Limited as Trustee of the Trust. BlackRock Asset Management North Asia Limited as Manager of the Trust. The accompanying notes form part of these financial statements. 28 iShares Asia Trust


  • Page 30

    Statement of Financial Position (continued) As at 31st December 2017 iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* iShares Core S&P BSE SENSEX (*This is a synthetic ETF)) India Index ETF 2017 2016 2017 2016 Note HK$ HK$ HK$ HK$ Assets Current Assets Financial assets at fair value through profit or loss 11(a) 30,764,955,663 28,729,179,921 1,094,333,177 797,797,824 Interest receivable 35,616 158 88 1 Bank balances 7(e), 11(b) 187,306,629 134,370,833 6,637,987 2,113,901 Total assets 30,952,297,908 28,863,550,912 1,100,971,252 799,911,726 Liabilities Current Liabilities Management fee payable 7(a) 23,172,581 24,440,101 355,312 309,608 Securities lending expenses payable in respect of the collateral arrangements 12,238,555 25,516,273 – – Other accounts payable 49,968 215,345 30,000 – Total liabilities 35,461,104 50,171,719 385,312 309,608 Net assets attributable to unitholders 30,916,836,804 28,813,379,193 1,100,585,940 799,602,118 Approved by the Trustee and the Manager on 26th April 2018. HSBC Institutional Trust Services (Asia) Limited as Trustee of the Trust. BlackRock Asset Management North Asia Limited as Manager of the Trust. The accompanying notes form part of these financial statements. Reports and Financial Statements 29


  • Page 31

    Statement of Financial Position (continued) As at 31st December 2017 iShares Core MSCI AC Asia iShares MSCI ex Japan Index ETF Emerging Asia Index ETF 2017 2016 2017 2016 Note HK$ HK$ HK$ HK$ Assets Current Assets Financial assets at fair value through profit or loss 11(a) 7,399,800,311 4,201,493,393 179,930,047 118,633,229 Dividends receivable 10,137,296 689,969 263,633 9,533 Interest receivable 659 3 9 – Bank balances 7(e), 11(b) 21,078,825 10,430,214 221,538 667,971 Total assets 7,431,017,091 4,212,613,579 180,415,227 119,310,733 Liabilities Current Liabilities Amounts due to brokers 9,229,751 – – – Management fee payable 7(a) 873,158 479,360 66,569 54,690 Other accounts payable 175,238 41,746 4,808 7,443 Total liabilities 10,278,147 521,106 71,377 62,133 Net assets attributable to unitholders 7,420,738,944 4,212,092,473 180,343,850 119,248,600 Approved by the Trustee and the Manager on 26th April 2018. HSBC Institutional Trust Services (Asia) Limited as Trustee of the Trust. BlackRock Asset Management North Asia Limited as Manager of the Trust. The accompanying notes form part of these financial statements. 30 iShares Asia Trust


  • Page 32

    Statement of Financial Position (continued) As at 31st December 2017 iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) iShares Core KOSPI 200 Index ETF 2017 2016 2017 2016 Note HK$ HK$ US$ US$ Assets Current Assets Financial assets at fair value through profit or loss 11(a) 179,683,353 192,461,359 13,611,268 13,310,016 Management fee reimbursement receivable 7(a) 16,409 – – – Dividends receivable – 3,202 103,008 157,539 Interest receivable 97 2 3 – Bank balances 7(e), 11(b) 216,288 1,925,593 10,481 20,887 Total assets 179,916,147 194,390,156 13,724,760 13,488,442 Liabilities Current Liabilities Management fee payable 7(a) – 168,513 2,937 3,815 Securities lending expenses payable in respect of the collateral arrangements – 433,645 – – Other accounts payable – 94,864 2,540 2,210 Total liabilities – 697,022 5,477 6,025 Net assets attributable to unitholders 179,916,147 193,693,134 13,719,283 13,482,417 Approved by the Trustee and the Manager on 26th April 2018. HSBC Institutional Trust Services (Asia) Limited as Trustee of the Trust. BlackRock Asset Management North Asia Limited as Manager of the Trust. The accompanying notes form part of these financial statements. Reports and Financial Statements 31


  • Page 33

    Statement of Financial Position (continued) As at 31st December 2017 iShares Core MSCI Taiwan Index ETF iShares DAX Index ETF 2017 2016 2017 2016 Note US$ US$ EUR EUR Assets Current Assets Financial assets at fair value through profit or loss 11(a) 31,310,877 19,767,905 2,805,291 6,063,264 Amounts due from brokers 11(b) – – 1,173,753 – Interest receivable 1 – – – Margin deposits 11(b) 1 – – – Bank balances 7(e), 11(b) 29,702 78,395 2,437 16,906 Total assets 31,340,581 19,846,300 3,981,481 6,080,170 Liabilities Current Liabilities Amounts due to unitholders for redemptions – – 1,173,312 – Management fee payable 7(a) 5,801 4,741 818 1,763 Interest payable – – 34 – Other accounts payable 315 2,115 4,321 5,889 Total liabilities 6,116 6,856 1,178,485 7,652 Net assets attributable to unitholders 31,334,465 19,839,444 2,802,996 6,072,518 Approved by the Trustee and the Manager on 26th April 2018. HSBC Institutional Trust Services (Asia) Limited as Trustee of the Trust. BlackRock Asset Management North Asia Limited as Manager of the Trust. The accompanying notes form part of these financial statements. 32 iShares Asia Trust


  • Page 34

    Statement of Financial Position (continued) As at 31st December 2017 iShares EURO STOXX 50 Index ETF iShares FTSE 100 Index ETF 2017 2016 2017 2016 Note EUR EUR GBP GBP Assets Current Assets Financial assets at fair value through profit or loss 11(a) 3,319,501 5,078,529 2,762,021 3,963,654 Dividends receivable 2,536 2,878 13,611 14,545 Amounts due from brokers 11(b) 668,165 – 736,856 – Bank balances 7(e), 11(b) 18,344 27,172 12,724 14,809 Total assets 4,008,546 5,108,579 3,525,212 3,993,008 Liabilities Current Liabilities Amounts due to unitholders for redemptions 670,753 – 741,564 – Management fee payable 7(a) 631 1,674 387 1,362 Interest payable 24 – – – Other accounts payable 2,221 6,065 1,836 2,944 Total liabilities 673,629 7,739 743,787 4,306 Net assets attributable to unitholders 3,334,917 5,100,840 2,781,425 3,988,702 Approved by the Trustee and the Manager on 26th April 2018. HSBC Institutional Trust Services (Asia) Limited as Trustee of the Trust. BlackRock Asset Management North Asia Limited as Manager of the Trust. The accompanying notes form part of these financial statements. Reports and Financial Statements 33


  • Page 35

    Statement of Financial Position (continued) As at 31st December 2017 iShares NASDAQ iShares Core Hang 100 Index ETF Seng Index ETF 2017 2016 2017 Note US$ US$ HK$ Assets Current Assets Financial assets at fair value through profit or loss 11(a) 9,116,638 7,822,780 343,314,064 Dividends receivable 1,626 2,730 – Interest receivable 2 – 35 Amounts due from brokers 11(b) 4,173 – – Margin deposits 11(b) – – 19,850 Bank balances 7(e), 11(b) 26,570 29,686 468,849 Total assets 9,149,009 7,855,196 343,802,798 Liabilities Current Liabilities Amounts due to brokers 4,764 – – Management fee payable 7(a) 1,958 2,927 20,645 Other accounts payable 875 6,400 15,000 Total liabilities 7,597 9,327 35,645 Net assets attributable to unitholders 9,141,412 7,845,869 343,767,153 Approved by the Trustee and the Manager on 26th April 2018. HSBC Institutional Trust Services (Asia) Limited as Trustee of the Trust. BlackRock Asset Management North Asia Limited as Manager of the Trust. The accompanying notes form part of these financial statements. 34 iShares Asia Trust


  • Page 36

    Statement of Comprehensive Income For the year ended 31st December 2017 iShares MSCI China A iShares MSCI China Index ETF International Index ETF 25.01.2016 (date of inception) 2017 2016 2017 to 31.12.2016 Note HK$ HK$ RMB RMB Income Dividend income 44,529,901 47,237,282 1,257,777 2,352,053 Bank interest income 7(e) 1,085 693 1,313 3,473 Net gain/(loss) on financial assets at fair value through profit or loss 5 808,743,964 (92,529,832) 11,916,612 6,209,879 Net foreign currency gain/(loss) (27,742) (87,927) 769 (1,431) Total net income/(loss) 853,247,208 (45,379,784) 13,176,471 8,563,974 Expenses Management fee 7(a) (11,651,794) (10,281,726) (414,560) (580,172) Transaction handling fee 7(b) (38,454) (75,721) (48,949) (124,238) Transaction costs on financial assets at fair value through profit or loss 7(d) (197,551) (400,117) (36,907) (209,333) Safe custody and bank charges 7(b) (228,975) (270,029) (314,066) (221,730) Total operating expenses (12,116,774) (11,027,593) (814,482) (1,135,473) Profit/(loss) before taxation 841,130,434 (56,407,377) 12,361,989 7,428,501 Taxation 6 (3,575,032) (3,757,730) (125,896) (235,548) Total comprehensive income/(loss) 837,555,402 (60,165,107) 12,236,093 7,192,953 The accompanying notes form part of these financial statements. Reports and Financial Statements 35


  • Page 37

    Statement of Comprehensive Income (continued) For the year ended 31st December 2017 iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* iShares Core S&P BSE SENSEX (*This is a synthetic ETF)) India Index ETF 2017 2016 2017 2016 Note HK$ HK$ HK$ HK$ Income Dividend income 765,033,855 938,639,093 – – Bank interest income 7(e) 600,046 3,710,155 801 300 Net gain/(loss) on financial assets at fair value through profit or loss 5 10,115,562,767 (4,325,828,672) 312,238,541 4,624,765 Net foreign currency gain/(loss) (38,870,738) (11,593,007) 4,233 209 Other income 7(a) – – 4,204,931 – Total net income/(loss) 10,842,325,930 (3,395,072,431) 316,448,506 4,625,274 Expenses Management fee 7(a) (286,546,332) (312,133,492) (4,115,524) (5,041,232) Transaction handling fee 7(b) (836,211) (1,050,175) – – Transaction costs on financial assets at fair value through profit or loss 7(d) (63,854,489) (272,372,295) – – Safe custody and bank charges 7(b) (85,840) (81,828) (800) (200) Securities lending expenses in respect of the collateral arrangements 11(b) (149,775,020) (369,065,397) – – Total operating expenses (501,097,892) (954,703,187) (4,116,324) (5,041,432) Operating profit/(loss) 10,341,228,038 (4,349,775,618) 312,332,182 (416,158) Finance Costs Interest expense 7(f) (2,458,787) (716) – – Profit/(loss) before taxation 10,338,769,251 (4,349,776,334) 312,332,182 (416,158) Taxation 6 (76,547,260) (93,935,237) – – Total comprehensive income/(loss) 10,262,221,991 (4,443,711,571) 312,332,182 (416,158) The accompanying notes form part of these financial statements. 36 iShares Asia Trust


  • Page 38

    Statement of Comprehensive Income (continued) For the year ended 31st December 2017 iShares Core MSCI AC Asia iShares MSCI ex Japan Index ETF Emerging Asia Index ETF 2017 2016 2017 2016 Note HK$ HK$ HK$ HK$ Income Dividend income 169,636,068 32,695,806 3,610,795 2,925,800 Bank interest income 7(e) 6,001 1,352 57 37 Net gain/(loss) on financial assets at fair value through profit or loss 5 1,986,143,386 (69,624,796) 50,961,412 5,291,258 Net foreign currency gain/(loss) 1,231,609 4,383,222 (34,183) (14,975) Other income 325,424 – – – Total net income/(loss) 2,157,342,488 (32,544,416) 54,538,081 8,202,120 Expenses Management fee 7(a) (12,614,776) (3,650,710) (782,272) (606,604) Transaction handling fee 7(b) (123,700) (138,093) (25,040) (82,108) Transaction costs on financial assets at fair value through profit or loss 7(d) (8,459,343) (2,236,328) (37,115) (46,674) Safe custody and bank charges 7(b) (443,518) (210,135) (37,370) (34,100) Total operating expenses (21,641,337) (6,235,266) (881,797) (769,486) Operating profit/(loss) 2,135,701,151 (38,779,682) 53,656,284 7,432,634 Finance Costs Interest expense 7(f) – – (37) (13) Profit/(loss) before taxation 2,135,701,151 (38,779,682) 53,656,247 7,432,621 Taxation 6 (20,702,411) (3,541,857) (537,177) (427,046) Total comprehensive income/(loss) 2,114,998,740 (42,321,539) 53,119,070 7,005,575 The accompanying notes form part of these financial statements. Reports and Financial Statements 37


  • Page 39

    Statement of Comprehensive Income (continued) For the year ended 31st December 2017 iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) iShares Core KOSPI 200 Index ETF 22.06.2016 (date of inception) 2017 2016 2017 to 31.12.2016 Note HK$ HK$ US$ US$ Income Dividend income 2,967,567 4,431,522 217,631 216,243 Bank interest income 7(e) 5,947 17,752 36 10 Net gain/(loss) on financial assets at fair value through profit or loss 5 42,928,296 (43,937,900) 4,895,839 143,399 Net foreign currency gain/(loss) (849,096) 87,856 16,105 2,098 Other income – – 182 – Total net income/(loss) 45,052,714 (39,400,770) 5,129,793 361,750 Expenses Management fee 7(a) (793,634) (2,108,655) (42,054) (26,479) Transaction handling fee 7(b) (217,408) (275,322) (5,460) (1,740) Transaction costs on financial assets at fair value through profit or loss 7(d) (731,115) (1,810,416) (19,092) (26,272) Safe custody and bank charges 7(b) (34,271) (5,682) (2,136) (205) Securities lending expenses in respect of the collateral arrangements 11(b) (142,058) (3,740,204) – – Total operating expenses (1,918,486) (7,940,279) (68,742) (54,696) Operating profit/(loss) 43,134,228 (47,341,049) 5,061,051 307,054 Finance Costs Interest expense 7(f) (35,871) (13,768) – – Profit/(loss) before taxation 43,098,357 (47,354,817) 5,061,051 307,054 Taxation 6 (297,325) (443,275) (47,447) (48,562) Total comprehensive income/(loss) 42,801,032 (47,798,092) 5,013,604 258,492 The accompanying notes form part of these financial statements. 38 iShares Asia Trust


  • Page 40

    Statement of Comprehensive Income (continued) For the year ended 31st December 2017 iShares Core MSCI Taiwan Index ETF iShares DAX Index ETF 22.06.2016 23.06.2016 (date of inception) (date of inception) 2017 to 31.12.2016 2017 to 31.12.2016 Note US$ US$ EUR EUR Income Dividend income 886,688 719,513 175,190 3,717 Bank interest income 7(e) 252 31 – – Net gain on financial assets at fair value through profit or loss 5 4,759,626 1,224,339 639,440 929,683 Net foreign currency gain/(loss) 61,322 (5,064) 280 (82) Total net income 5,707,888 1,938,819 814,910 933,318 Expenses Management fee 7(a) (76,010) (33,642) (12,873) (8,420) Transaction handling fee 7(b) (2,925) (4,725) (3,085) (371) Transaction costs on financial assets at fair value through profit or loss 7(d) (9,609) (32,932) (1,213) (1,295) Safe custody and bank charges 7(b) (129) (542) (117) – Total operating expenses (88,673) (71,841) (17,288) (10,086) Operating profit 5,619,215 1,866,978 797,622 923,232 Finance Cost Interest expense 7(f) – – (34) – Profit before taxation 5,619,215 1,866,978 797,588 923,232 Taxation 6 (184,514) (162,286) (39,882) (980) Total comprehensive income 5,434,701 1,704,692 757,706 922,252 The accompanying notes form part of these financial statements. Reports and Financial Statements 39


  • Page 41

    Statement of Comprehensive Income (continued) For the year ended 31st December 2017 iShares EURO STOXX 50 Index ETF iShares FTSE 100 Index ETF 23.06.2016 23.06.2016 (date of inception) (date of inception) 2017 to 31.12.2016 2017 to 31.12.2016 Note EUR EUR GBP GBP Income Dividend income 169,633 44,279 176,563 117,535 Bank interest income 7(e) – – 1 3 Net gain on financial assets at fair value through profit or loss 5 377,553 634,116 289,913 726,747 Net foreign currency gain/(loss) 264 (135) 328 (646) Total net income 547,450 678,260 466,805 843,639 Expenses Management fee 7(a) (10,846) (8,127) (8,320) (6,825) Transaction handling fee 7(b) (3,250) (3,099) (3,572) (2,064) Transaction costs on financial assets at fair value through profit or loss 7(d) (887) (9,002) (2,180) (32,535) Safe custody and bank charges 7(b) (2,032) (190) (82) – Total operating expenses (17,015) (20,418) (14,154) (41,424) Operating profit 530,435 657,842 452,651 802,215 Finance Cost Interest expense 7(f) (24) – – – Profit before taxation 530,411 657,842 452,651 802,215 Taxation 6 (39,915) (10,372) (2,132) (625) Total comprehensive income 490,496 647,470 450,519 801,590 The accompanying notes form part of these financial statements. 40 iShares Asia Trust


  • Page 42

    Statement of Comprehensive Income (continued) For the year/period ended 31st December 2017 iShares NASDAQ iShares Core Hang 100 Index ETF Seng Index ETF 22.06.2016 18.11.2016 (date of inception) (date of inception) 2017 to 31.12.2016 to 31.12.2017 Note US$ US$ HK$ Income Dividend income 95,815 86,472 14,715,973 Bank interest income 7(e) 21 13 223 Net gain on financial assets at fair value through profit or loss 5 2,204,566 1,388,470 132,691,091 Net foreign currency gain 9 – 2,349 Total net income 2,300,411 1,474,955 147,409,636 Expenses Management fee 7(a) (22,929) (19,383) (470,892) Transaction handling fee 7(b) (2,275) (1,025) – Transaction costs on financial assets at fair value through profit or loss 7(d) (173) (3,276) (300,632) Safe custody and bank charges 7(b) (128) (1) – Total operating expenses (25,505) (23,685) (771,524) Profit before taxation 2,274,906 1,451,270 146,638,112 Taxation 6 (25,908) (25,214) (503,688) Total comprehensive income 2,248,998 1,426,056 146,134,424 The accompanying notes form part of these financial statements. Reports and Financial Statements 41


  • Page 43

    Statement of Changes in Net Assets Attributable to Unitholders For the year ended 31st December 2017 iShares MSCI China A iShares MSCI China Index ETF International Index ETF 25.01.2016 (date of inception) 2017 2016 2017 to 31.12.2016 Note HK$ HK$ RMB RMB Net assets attributable to unitholders at 1st January/ date of inception 1,408,875,090 2,412,353,952 66,072,138 – Proceeds on issue of units 8 – in-kind 380,342,509 225,900,392 – – – cash component and cash subscription 136,336,763 52,001,570 – 116,850,655 Payments on redemption of units 8 – in-kind (235,817,338) (958,315,577) – – – cash component and cash redemption (85,594,688) (227,296,140) (10,873,770) (56,711,470) Distribution to unitholders 12 (34,830,000) (35,604,000) – (1,260,000) 160,437,246 (943,313,755) (10,873,770) 58,879,185 Total comprehensive income/(loss) for the year/period 837,555,402 (60,165,107) 12,236,093 7,192,953 Net assets attributable to unitholders at 31st December 2,406,867,738 1,408,875,090 67,434,461 66,072,138 iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* iShares Core S&P BSE SENSEX (*This is a synthetic ETF)) India Index ETF 2017 2016 2017 2016 Note HK$ HK$ HK$ HK$ Net assets attributable to unitholders at 1st January 28,813,379,193 42,960,355,403 799,602,118 828,098,456 Proceeds on issue of units 8 – in-kind – 272,014,773 – – – cash component and cash subscription – 1,597,627 108,388,920 14,000,400 Payments on redemption of units 8 – in-kind (1,642,259,617) (6,543,468,490) – – – cash component and cash redemption (5,860,504,763) (2,637,208,549) (119,737,280) (42,080,580) Distribution to unitholders 12 (656,000,000) (796,200,000) – – (8,158,764,380) (9,703,264,639) (11,348,360) (28,080,180) Total comprehensive income/(loss) for the year 10,262,221,991 (4,443,711,571) 312,332,182 (416,158) Net assets attributable to unitholders at 31st December 30,916,836,804 28,813,379,193 1,100,585,940 799,602,118 iShares Core MSCI AC Asia iShares MSCI ex Japan Index ETF Emerging Asia Index ETF 2017 2016 2017 2016 Note HK$ HK$ HK$ HK$ Net assets attributable to unitholders at 1st January 4,212,092,473 91,969,720 119,248,600 122,524,427 Proceeds on issue of units 8 – in-kind 149,803,929 801,720,298 1,245,108 – – cash component and cash subscription 3,899,209,035 3,409,472,093 9,163,072 – Payments on redemption of units 8 – in-kind – – – (961,386) – cash component and cash redemption (2,832,187,633) (20,344,099) – (7,220,016) Distribution to unitholders 12 (123,177,600) (28,404,000) (2,432,000) (2,100,000) 1,093,647,731 4,162,444,292 7,976,180 (10,281,402) Total comprehensive income/(loss) for the year 2,114,998,740 (42,321,539) 53,119,070 7,005,575 Net assets attributable to unitholders at 31st December 7,420,738,944 4,212,092,473 180,343,850 119,248,600 The accompanying notes form part of these financial statements. 42 iShares Asia Trust


  • Page 44

    Statement of Changes in Net Assets Attributable to Unitholders (continued) For the year ended 31st December 2017 iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) iShares Core KOSPI 200 Index ETF 22.06.2016 (date of inception) 2017 2016 2017 to 31.12.2016 Note HK$ HK$ US$ US$ Net assets attributable to unitholders at 1st January/ date of inception 193,693,134 292,498,075 13,482,417 – Proceeds on issue of units 8 – cash component and cash subscription 7,727,170 – – 19,831,326 Payments on redemption of units 8 – cash component and cash redemption (62,637,689) (47,486,849) (4,776,738) (6,607,401) Distribution to unitholders 12 (1,667,500) (3,520,000) – – (56,578,019) (51,006,849) (4,776,738) 13,223,925 Total comprehensive income/(loss) for the year/period 42,801,032 (47,798,092) 5,013,604 258,492 Net assets attributable to unitholders at 31st December 179,916,147 193,693,134 13,719,283 13,482,417 iShares Core MSCI Taiwan Index ETF iShares DAX Index ETF 22.06.2016 23.06.2016 (date of inception) (date of inception) 2017 to 31.12.2016 2017 to 31.12.2016 Note US$ US$ EUR EUR Net assets attributable to unitholders at 1st January/ date of inception 19,839,444 – 6,072,518 – Proceeds on issue of units 8 – cash component and cash subscription 8,123,723 26,222,371 – 8,052,917 Payments on redemption of units 8 – cash component and cash redemption (1,711,403) (7,735,619) (4,027,228) (2,902,651) Distribution to unitholders 12 (352,000) (352,000) – – 6,060,320 18,134,752 (4,027,228) 5,150,266 Total comprehensive income for the year/period 5,434,701 1,704,692 757,706 922,252 Net assets attributable to unitholders at 31st December 31,334,465 19,839,444 2,802,996 6,072,518 iShares EURO STOXX 50 Index ETF iShares FTSE 100 Index ETF 23.06.2016 23.06.2016 (date of inception) (date of inception) 2017 to 31.12.2016 2017 to 31.12.2016 Note EUR EUR GBP GBP Net assets attributable to unitholders at 1st January/ date of inception 5,100,840 – 3,988,702 – Proceeds on issue of units 8 – cash component and cash subscription – 8,071,935 – 6,273,459 Payments on redemption of units 8 – cash component and cash redemption (2,256,419) (3,618,565) (1,657,796) (3,086,347) (2,256,419) 4,453,370 (1,657,796) 3,187,112 Total comprehensive income for the year/period 490,496 647,470 450,519 801,590 Net assets attributable to unitholders at 31st December 3,334,917 5,100,840 2,781,425 3,988,702 The accompanying notes form part of these financial statements. Reports and Financial Statements 43


  • Page 45

    Statement of Changes in Net Assets Attributable to Unitholders (continued) For the year/period ended 31st December 2017 iShares NASDAQ iShares Core Hang 100 Index ETF Seng Index ETF 22.06.2016 18.11.2016 (date of inception) (date of inception) 2017 to 31.12.2016 to 31.12.2017 Note US$ US$ HK$ Net assets attributable to unitholders at 1st January/date of inception 7,845,869 – – Proceeds on issue of units 8 – in-kind – – 686,322,156 – cash component and cash subscription – 12,922,638 140,817,049 Payments on redemption of units 8 – in-kind – – (602,462,363) – cash component and cash redemption (953,455) (6,502,825) (15,367,613) Distribution to unitholders 12 – – (11,676,500) (953,455) 6,419,813 197,632,729 Total comprehensive income for the year/period 2,248,998 1,426,056 146,134,424 Net assets attributable to unitholders at 31st December 9,141,412 7,845,869 343,767,153 The accompanying notes form part of these financial statements. 44 iShares Asia Trust


  • Page 46

    Statement of Cash Flows For the year ended 31st December 2017 iShares MSCI China A iShares MSCI China Index ETF International Index ETF 25.01.2016 (date of inception) 2017 2016 2017 to 31.12.2016 Note HK$ HK$ RMB RMB Operating Activities Payments for purchase of financial assets at fair value through profit or loss (229,705,205) (354,268,669) (7,590,889) (133,558,996) Proceeds from sale of financial assets at fair value through profit or loss 187,301,007 528,795,006 18,253,066 73,964,429 Dividends received 44,403,019 47,219,060 1,257,777 2,352,053 Bank interest received 971 692 1,294 3,473 Management fee paid (11,317,719) (10,758,559) (357,869) (612,251) Taxation paid (3,575,032) (3,757,730) (125,896) (235,548) Transaction costs paid (197,551) (400,117) (36,907) (209,333) Other fees paid (248,230) (385,567) (373,197) (334,092) Margin deposits paid 175,885 (23,447) – – Net cash generated from/(used in) operating activities (13,162,855) 206,420,669 11,027,379 (58,630,265) Financing Activities Cash component and cash subscription received on issue of units 8 136,336,763 52,001,570 – 116,850,655 Cash component and cash redemption paid on redemption of units 8 (90,415,815) (222,475,013) (10,873,770) (56,711,470) Final distribution paid 12 (34,830,000) (35,604,000) – (1,260,000) Net cash generated from/(used in) financing activities 11,090,948 (206,077,443) (10,873,770) 58,879,185 Net increase/(decrease) in cash and cash equivalents (2,071,907) 343,226 153,609 248,920 Cash and cash equivalents at the beginning of the year/ period 5,114,433 4,771,207 248,920 – Cash and cash equivalents at the end of the year/period 3,042,526 5,114,433 402,529 248,920 Analysis of Balances of Cash and Cash Equivalents Bank balances 3,042,526 5,114,433 402,529 248,920 The accompanying notes form part of these financial statements. Reports and Financial Statements 45


  • Page 47

    Statement of Cash Flows (continued) For the year ended 31st December 2017 iShares FTSE A50 China Index ETF (formerly known as iShares FTSE A50 China Index ETF* iShares Core S&P BSE SENSEX (*This is a synthetic ETF)) India Index ETF 2017 2016 2017 2016 Note HK$ HK$ HK$ HK$ Operating Activities Payments for purchase of financial assets at fair value through profit or loss (17,502,055,432) (16,719,849,405) (107,979,193) (13,958,913) Proceeds from sale of financial assets at fair value through profit or loss 23,900,712,102 19,732,855,115 123,686,614 46,937,617 Dividends received 765,033,855 939,657,829 – – Bank interest received 564,588 3,710,182 714 300 Other income received – – 4,204,931 – Management fee paid (287,813,852) (322,935,372) (4,069,820) (5,299,166) Taxation paid (76,547,260) (93,935,237) – – Transaction costs paid (63,854,489) (272,372,295) – – Securities lending expenses paid in respect of the collateral arrangements (163,052,738) (405,801,747) – – Other fees refunded/(paid) (1,087,428) (107,144,909) 29,200 (15,200) Net cash generated from/(used in) operating activities 6,571,899,346 2,754,184,161 15,872,446 27,664,638 Financing Activities Interest paid (2,458,787) (716) – – Cash component and cash subscription received on issue of units 8 – 1,597,627 108,388,920 14,000,400 Cash component and cash redemption paid on redemption of units 8 (5,860,504,763) (2,637,208,549) (119,737,280) (42,080,580) Final distribution paid 12 (656,000,000) (796,200,000) – – Net cash generated from/(used in) financing activities (6,518,963,550) (3,431,811,638) (11,348,360) (28,080,180) Net increase/(decrease) in cash and cash equivalents 52,935,796 (677,627,477) 4,524,086 (415,542) Cash and cash equivalents at the beginning of the year 134,370,833 811,998,310 2,113,901 2,529,443 Cash and cash equivalents at the end of the year 187,306,629 134,370,833 6,637,987 2,113,901 Analysis of Balances of Cash and Cash Equivalents Bank balances 187,306,629 134,370,833 6,637,987 2,113,901 The accompanying notes form part of these financial statements. 46 iShares Asia Trust


  • Page 48

    Statement of Cash Flows (continued) For the year ended 31st December 2017 iShares Core MSCI AC Asia iShares MSCI ex Japan Index ETF Emerging Asia Index ETF 2017 2016 2017 2016 Note HK$ HK$ HK$ HK$ Operating Activities Payments for purchase of financial assets at fair value through profit or loss (4,582,143,298) (3,574,046,100) (17,088,236) (13,229,711) Proceeds from sale of financial assets at fair value through profit or loss 3,530,245,055 200,937,731 7,963,755 20,876,388 Dividends received 160,188,741 32,037,620 3,356,695 2,940,898 Bank interest received 5,345 1,349 48 37 Other income received 325,424 – – – Management fee paid (12,220,978) (3,211,155) (770,393) (598,024) Taxation paid (20,702,411) (3,541,857) (537,177) (427,046) Transaction costs paid (8,459,343) (2,236,328) (37,115) (46,674) Other fees refunded/(paid) (433,726) (344,035) (65,045) (149,499) Net cash generated from/(used in) operating activities (933,195,191) (3,350,402,775) (7,177,468) 9,366,369 Financing Activities Interest paid – – (37) (13) Cash component and cash subscription received on issue of units 8 3,899,209,035 3,409,472,093 9,163,072 – Cash component and cash redemption paid on redemption of units 8 (2,832,187,633) (20,344,099) – (7,220,016) Final distribution paid 12 (123,177,600) (28,404,000) (2,432,000) (2,100,000) Net cash generated from/(used in) financing activities 943,843,802 3,360,723,994 6,731,035 (9,320,029) Net increase/(decrease) in cash and cash equivalents 10,648,611 10,321,219 (446,433) 46,340 Cash and cash equivalents at the beginning of the year 10,430,214 108,995 667,971 621,631 Cash and cash equivalents at the end of the year 21,078,825 10,430,214 221,538 667,971 Analysis of Balances of Cash and Cash Equivalents Bank balances 21,078,825 10,430,214 221,538 667,971 The accompanying notes form part of these financial statements. Reports and Financial Statements 47


  • Page 49

    Statement of Cash Flows (continued) For the year ended 31st December 2017 iShares Core CSI 300 Index ETF (formerly known as iShares CSI 300 A-Share Index ETF* (*This is a synthetic ETF)) iShares Core KOSPI 200 Index ETF 22.06.2016 (date of inception) 2017 2016 2017 to 31.12.2016 Note HK$ HK$ US$ US$ Operating Activities Payments for purchase of financial assets at fair value through profit or loss (166,914,911) (82,844,883) (1,299,704) (19,934,139) Proceeds from sale of financial assets at fair value through profit or loss 221,772,117 137,633,578 5,910,396 6,769,620 Dividends received 2,970,769 4,429,416 272,162 58,704 Bank interest received 5,852 17,750 33 10 Other income received – – 182 – Management fee paid (978,556) (2,188,714) (42,932) (22,664) Taxation paid (297,325) (443,275) (47,447) (48,562) Transaction costs paid (731,115) (1,810,416) (19,092) (26,272) Securities lending expenses paid in respect of the collateral arrangements (575,703) (4,080,230) – – Other fees refunded/(paid) (346,543) (241,329) (7,266) 265 Net cash generated from/(used in) operating activities 54,904,585 50,471,897 4,766,332 (13,203,038) Financing Activities Interest paid (35,871) (13,768) – – Cash component and cash subscription received on issue of units 8 7,727,170 – – 19,831,326 Cash component and cash redemption paid on redemption of units 8 (62,637,689) (47,578,257) (4,776,738) (6,607,401) Final distribution paid 12 (1,667,500) (3,520,000) – – Net cash generated from/(used in) financing activities (56,613,890) (51,112,025) (4,776,738) 13,223,925 Net increase/(decrease) in cash and cash equivalents (1,709,305) (640,128) (10,406) 20,887 Cash and cash equivalents at the beginning of the year/ period 1,925,593 2,565,721 20,887 – Cash and cash equivalents at the end of the year/period 216,288 1,925,593 10,481 20,887 Analysis of Balances of Cash and Cash Equivalents Bank balances 216,288 1,925,593 10,481 20,887 The accompanying notes form part of these financial statements. 48 iShares Asia Trust


  • Page 50

    Statement of Cash Flows (continued) For the year ended 31st December 2017 iShares Core MSCI Taiwan Index ETF iShares DAX Index ETF 22.06.2016 23.06.2016 (date of inception) (date of inception) 2017 to 31.12.2016 2017 to 31.12.2016 Note US$ US$ EUR EUR Operating Activities Payments for purchase of financial assets at fair value through profit or loss (10,831,134) (27,455,328) (706,785) (8,442,379) Proceeds from sale of financial assets at fair value through profit or loss 4,109,110 8,906,698 3,430,725 3,308,716 Dividends received 886,688 719,513 175,190 3,717 Bank interest received 251 31 – – Management fee paid (74,950) (28,901) (13,818) (6,657) Taxation paid (184,514) (162,286) (39,882) (980) Transaction costs paid (9,609) (32,932) (1,213) (1,295) Other fees refunded/(paid) (4,854) (3,152) (4,770) 5,518 Margin deposit paid (1) – – – Net cash generated from/(used in) operating activities (6,109,013) (18,056,357) 2,839,447 (5,133,360) Financing Activities Cash component and cash subscription received on issue of units 8 8,123,723 26,222,371 – 8,052,917 Cash component and cash redemption paid on redemption of units 8 (1,711,403) (7,735,619) (2,853,916) (2,902,651) Final distribution paid 12 (352,000) (352,000) – – Net cash generated from/(used in) financing activities 6,060,320 18,134,752 (2,853,916) 5,150,266 Net increase/(decrease) in cash and cash equivalents (48,693) 78,395 (14,469) 16,906 Cash and cash equivalents at the beginning of the year/ period 78,395 – 16,906 – Cash and cash equivalents at the end of the year/period 29,702 78,395 2,437 16,906 Analysis of Balances of Cash and Cash Equivalents Bank balances 29,702 78,395 2,437 16,906 The accompanying notes form part of these financial statements. Reports and Financial Statements 49

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