Annual Report IShares Southeast Asia Trust

Annual ReportiShares Southeast Asia Trust iShares MSCI India Index ETF iShares J.P. Morgan USD Asia Credit Bond Index ETF iShares Barclays USD Asia High Yield Bond Index ETF(Constituted under a Trust Deed in the Republic of Singapore)For the Year ended 31 December 2017

Contents Manager’s Investment Report Page2Report of the Trustee 11Statement by the Manager 12Independent Auditor’s Report 13Financial Statements– Statements of Total Return 16– Statements of Financial Position 17– Statements of Movements of Unitholders’ Funds 18– Statements of Portfolio 19– Notes to the Financial Statements 29Management and Administration 42Annual Report 1

Manager’s Investment ReportiShares MSCI India Index ETF(a Sub-Fund of iShares Southeast Asia Trust)IntroductioniShares MSCI India Index ETF (“MSCI India ETF”), a sub-fund ofthe iShares Southeast Asia Trust (the “Trust”), was launchedand commenced trading on 15 June 2006 on the SingaporeExchange Securities Trading Limited (“SGX-ST”) under thetrading name of “IS MS INDIA 100US ” and Exchange ticker of“I98”. Effective on 15 June 2012, other than the US dollar, theMSCI India ETF is also traded in Singapore dollars on SGX-ST.The Singapore dollar trading line of MSCI India ETF is underthe trading name of “IS MS INDIA 100S D” and Exchangeticker of “QK9”.A. Fund Performance1MSCI India ETF seeks to provide investment results that closelycorrespond to the performance of the MSCI India Index beforefees and expenses. MSCI India ETF invests into the Indianmarket through its wholly owned Mauritius Subsidiary whichinvests in Indian securities.The MSCI India ETF was established as an authorised schemeunder the Securities and Futures Act, Chapter 289 ofSingapore and obtained designation of an exchange tradedfund (“ETF”) from the SGX-ST. MSCI India ETF is benchmarkedagainst the MSCI India Index. The Manager of MSCI India ETFis BlackRock (Singapore) Limited (the “Manager”). TheManager has appointed the Hong Kong domiciled BlackRockAsset Management North Asia Limited (the “Sub-Manager”) asthe sub-manager of the MSCI India ETF under a submanagement agreement entered into between the Managerand the Sub-Manager (the “Sub-Management Agreement”).Under the Sub-Management Agreement, the Manager hasdiscretion to delegate its investment management functions ofMSCI India ETF to the Sub-Manager.A summary of the performance of MSCI India ETF is givenbelow:The MSCI India ETF invests in the Indian market via theMauritius Subsidiary. The Mauritius Subsidiary is registered asa sub-account of the Manager, which is registered as a ForeignPortfolio Investor (“FPI”) with the Securities Exchange Board ofIndia, allowing the Mauritius subsidiary to invest directly inIndian securities.India Tax Law ChangesOn 10 May 2016, the Indian Tax Board announced a phasedremoval of the capital gains tax (“CGT”) exemption under theIndia-Mauritius Tax Treaty. The change, effective from 1 April2017, resulted in India retaining taxation rights on capital gainsarising from sales of shares of Indian resident companiesacquired by a Mauritius entity on or after 1 April 2017. Sharesacquired prior to 1 April 2017 are still protected from taxingrights in India. There is a transition period from 1 April 2017 to31 March 2019 where the tax rate is limited to 50% of India’sdomestic tax rate subject to a limitation of benefits clause.Taxation in India at the full domestic tax rate will apply fromfinancial year 2019 - 2020 onwards.The returns of the MSCI India ETF via its holdings in Indianinvestments may as a result be adversely impacted by IndiaTax Law Changes.At the close of 31 December 2017, the NAV per unit (based onthe last traded prices of the investments) of the MSCI India ETFwas US 9.20 and 39,500,000 units were outstanding. The totalsize of the MSCI India ETF was approximately US 363.5 million.Total Return2 in US as of31 December 20172iShares Southeast Asia Trust3-Month6-Month1-YearNet DIV MSCI India Total ReturnIndex in US 4Fund NAV Return in US 5Fund Price Return (MKT) in US 5%15.34%37.48%38.06%Total Return2 in US as of31 December 5%7.94%8.01%Net DIV MSCI India Total ReturnIndex in US 4Fund NAV Return in US 5Fund Price Return (MKT) in US 6Source: BlackRock and MSCIAs of 31 December 2017, MSCI India Index consists of 79constituents and all of them are large and mid-cap Indiacompanies in MSCI universe. The difference in performancebetween the MSCI India Index and MSCI India ETF can belargely explained by the MSCI India ETF’s expenses.Fund ActivitiesThe average daily trading volume for MSCI India ETF duringthe year was reported by Bloomberg to be approximately199,368 units.1234In 2017, gains arising on disposal of shares by the Mauritiansubsidiary acquired prior to 1 April 2017 were not subject totax in accordance with the above. Gains on disposal of sharesacquired after 1 April 2017 will be subject to tax according tothe relevant local laws. The Manager is continuing to monitorthe impact of the India Tax Law Changes on the MSCI IndiaETF and the Mauritius subsidiary.1-Month56Past performance figures shown are not indicative of the future performance of the Fund.Total returns represent the rate that an investor would have earned (or lost) on aninvestment, assuming reinvestment of all dividends and distributions.This is annualised return since fund inception and fund inception date is 15 June 2006.An investor cannot invest directly in an index and the index performance returns do notreflect management fees, transaction costs or other expenses, which would reduceperformance returns.Units in the Fund are issued and redeemed at their NAV in exchange for a basket ofsecurities representing the MSCI India Index. Therefore, the Fund does not publish a bidprice and the Fund’s returns have been calculated from NAVs; and assuming reinvestmentof all dividends.Market returns are calculated using historical market closing prices (when NAV is normallydetermined for the Fund), and do not represent the returns you would receive if you tradedshares at other times.

Manager’s Investment Report (continued)iShares MSCI India Index ETF(a Sub-Fund of iShares Southeast Asia Trust)Index ActivitiesMSCI India Index underwent 4 regular reviews during the yearfrom 1 January 2017 to 31 December 2017. As at 31December 2017, MSCI India ETF had exposure to all indexconstituents in the MSCI India Index.C. Top 10 Holdings1 largest holding as at 31 December 2017*Sector WeightsAs of 31 December 2017, the index sector weights, asrepresented by holdings of the Mauritius Subsidiary, are listedbelow.SectorIndex Weights%Portfolio res MSCI India MauritiusCompanyFair Value as at31 December 2017US Percentage ofTotal Net AssetsAttributable toUnitholders as at31 December 2017%362,989,41599.87*There was only 1 holding as at 31 December 2017Consumer DiscretionaryConsumer StaplesEnergyFinancialHealth CareIndustrialInformation TechnologyMaterialsTelecommunicationUtilities1 largest holding as at 31 December 2016*iShares MSCI India MauritiusCompanyFair Value as at31 December 2016US Percentage ofTotal Net AssetsAttributable toUnitholders as at31 December 2016363,925,27699.77*There was only 1 holding as at 31 December 2016B. Distribution of Investments of the MSCI India ETF as at 31December 20171 By Asset ClassListed EquitiesOther Net Assets7Net Assets Attributable toUnitholders (At Last 49100.00By Credit Rating of Fixed Income SecuritiesNot Applicable3Fair ValueUS Percentage ofTotal Net AssetsAttributable toUnitholders%By Derivative TypeNot ApplicableD. Global ExposureNot applicable.E. CollateralNil.F. Securities Lending or Repurchase TransactionsNil.G. Investment in Other Unit Trusts, Mutual Funds andCollective Investment SchemesNil.H. BorrowingsNil.I. Soft Dollar Commission Received by the ManagersDuring the year ended 31 December 2017, the Managerconfirmed that no soft dollar commission arrangementsexisted in relation to directing transactions of MSCI India ETFthrough a broker or dealer.J. Other Material InformationThere is no other material information that will adverselyimpact the valuation of MSCI India ETF.7Annual Report Other net assets include the cash and bank balances of US 715,7733

Manager’s Investment Report (continued)iShares MSCI India Index ETF(a Sub-Fund of iShares Southeast Asia Trust)K. Supplemental Information on Underlying Sub-Fund(ii) Expense RatioISHARES MSCI INDIA MAURITIUS COMPANYAs at 31 December 2017As at 31 December 20160.17%0.16%(i) 10 largest holdingsAs at 31 December 2017Housing Development FinanceCorporation LimitedReliance Industries LimitedInfosys LtdTata Consultancy Services LtdMaruti Suzuki India LimitedAxis Bank LimitedI.T.C LimitedHindustan Unilever LimitedICICI Bank LimitedTata Motors LimitedFair Value as at31 December 2017US Percentage ofTotal Net AssetsAttributable toUnitholders as at31 December 172,7387.866.004.073.373.092.932.902.462.25As at 31 December 2016Housing Development FinanceInfosys LtdReliance Industries LimitedTata Consultancy Services LtdI.T.C LimitedAxis Bank LimitedTata Motors LimitedSun Pharmaceutical IndustryLimitedMaruti Suzuki India LimitedHindustan Unilever Limited4iShares Southeast Asia TrustFair Value as at31 December 2016US Percentage ofTotal Net AssetsAttributable toUnitholders as at31 December 3.663.363.332.719,145,5198,724,6832.512.40The expense ratio has been computed based on theguidelines laid down by the Investment ManagementAssociation of Singapore (“IMAS”). The calculation of theexpense ratio at 31 December 2017 and 31 December 2016was based on total operating expenses divided by the averagenet asset value for the year. The total operating expenses donot include (where applicable) brokerage and othertransactions costs, performance fee, interest expense,distribution paid out to unitholders, foreign exchange gains/losses, front or back end loads arising from the purchase orsale of other funds and tax deducted at source or arising outof income received. The Fund does not pay any performancefee. The average net asset value is based on the dailybalances.(iii) Turnover RatioAs at 31 December 2017As at 31 December 201614.32%16.04%The portfolio turnover ratio is calculated in accordance withthe formula stated in the Code on Collective InvestmentSchemes. The calculation of the portfolio turnover ratio wasbased on the lower of the total value of purchases or sales ofthe underlying investment divided by the average daily netasset value.