iShares plc ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS For the year ended 29 February 2008
iShares plc ANNUAL REPORT For the accounting year ended 29 February 2008
CONTENTS iShares plc Annual Report and Audited Financial Statements Letter to Investors
3
Company Information
4
Report of the Investment Manager
6
Directors’ Report
13
Statement of Custodian’s Responsibilities & Custodian’s Report
17
Independent Auditors’ Report
18
Profit and Loss Account
20
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
20
Balance Sheet
20
Notes to the Financial Statements
21
Audited Financial Statements of the Funds iShares € Corporate Bond
www.iShares.eu
55
iShares € Government Bond 1-3
60
iShares € Inflation Linked Bond
64
iShares £ Corporate Bond
68
iShares $ Corporate Bond
73
iShares $ Treasury Bond 1-3
78
iShares AEX
82
iShares DJ Asia/Pacific Select Dividend
86
iShares DJ Euro STOXX Growth
90
iShares DJ Euro STOXX MidCap
95
iShares DJ Euro STOXX Select Dividend
100
iShares DJ Euro STOXX SmallCap
104
iShares DJ Euro STOXX Value
109
iShares FTSE 100
113
iShares FTSE 250
118
iShares FTSEurofirst 80
125
iShares FTSEurofirst 100
130
iShares FTSE/EPRA European Property Index Fund
135
iShares FTSE UK Dividend Plus
139
iShares FTSE/Xinhua China 25
143
iShares MSCI AC Far East ex Japan
147
iShares MSCI Brazil
159
iShares MSCI Eastern Europe
164
iShares MSCI Emerging Markets
169
iShares MSCI Europe ex-UK
181
iShares MSCI Japan
191
iShares MSCI Korea
200
iShares MSCI North America
206
iShares MSCI Taiwan
218
iShares MSCI World
224
iShares S&P 500
240
iShares plc Annual Report 1
iShares plc ANNUAL REPORT For the accounting year ended 29 February 2008 CONTENTS (continued)
2 iShares plc Annual Report
Notice of Annual General Meeting
252
Directors and Officers
255
Disclaimers
256
Contact Information
258
www.iShares.eu
iShares plc LETTER TO INVESTORS Welcome to the annual report and accounts for iShares plc for the year ended 29 February 2008. Assets under management increased from £8.59 billion to £10.10 billion during the year under review, showing growth of just over £1.51 billion in assets from the year ended 28 February 2007. Despite volatile market conditions during much of the review year, the growth in assets under management reflects the trend that more and more investors are discovering how Exchange Traded Funds ("EFTs") can help them towards achieving their investment objectives in both bull and bear markets. As one of the world’s leading ETF providers, BGI has continued to develop its fund range of iShares products to help more investors to use these highly flexible, easily tradeable and very cost-efficient investment products. Listed below, the total expense ratio (TER%) figures express the sum of all costs and commissions charged to the assets of each Fund in the umbrella as a percentage of the average Fund assets during the period. Please note that the expense ratio does not include the additional costs incurred on the purchase and sale of investments. The PTR is an indication of the additional costs that may be incurred by a fund when buying and selling investments
Fund iShares € Corporate Bond iShares € Government Bond 1-3 iShares € Inflation Linked Bond iShares £ Corporate Bond iShares $ Corporate Bond iShares $ Treasury Bond 1-3 iShares AEX iShares DJ Asia/Pacific Select Dividend iShares DJ Euro STOXX Growth iShares DJ Euro STOXX MidCap iShares DJ Euro STOXX Select Dividend iShares DJ Euro STOXX SmallCap iShares DJ Euro STOXX Value iShares FTSE 100 iShares FTSE 250 iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares FTSE/EPRA European Property Index iShares FTSE UK Dividend Plus iShares FTSE/Xinhua China 25 iShares MSCI AC Far East ex-Japan iShares MSCI Brazil iShares MSCI Eastern Europe 10/40 iShares MSCI Emerging Markets iShares MSCI Europe ex-UK iShares MSCI Japan iShares MSCI Korea iShares MSCI North America iShares MSCI Taiwan iShares MSCI World iShares S&P 500
TER % (Unaudited) 0.20 0.20 0.25 0.20 0.20 0.20 0.30 0.59 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.74 0.74 0.74 0.74 0.75 0.40 0.59 0.74 0.40 0.74 0.50 0.40
PTR% (Unaudited) 212.12 209.56 48.40 126.53 348.89 257.36 64.28 70.03 94.58 75.93 76.82 110.56 79.87 15.66 68.43 17.19 17.56 63.88 65.84 99.61 10.68 36.71 36.41 7.93 27.02 8.46 28.55 14.70 17.57 14.60 11.14
We are pleased to report further success for iShares investment products during the review year. Despite the prospect of fresh bouts of volatility in global equities this year, we believe the ongoing expansion of iShares funds across a diverse range of investment markets should help us deliver further good news to our investors during the period ahead.
From the Directors of iShares plc. 20 June 2008 www.iShares.eu
iShares plc Annual Report 3
iShares plc COMPANY INFORMATION iShares plc (the “Company”) is an open-ended investment company with variable capital. The Company has segregated liability between its funds and is incorporated as a public limited company under the laws of Ireland. The Company was authorised by the Financial Regulator as an Undertaking for Collective Investment in Transferable Securities (“UCITS”) within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (as amended) on 14 February 2000. Barclays Global Investors Ireland Limited (“BGIIL”) is the appointed Manager of the Company. Barclays Global Investors Limited (“BGIL”) is the Investment Manager and Promoter of the Company. The Governor and Company of the Bank of Ireland (“BOI”) is the appointed Custodian to the Company and Bank of Ireland Securities Services Limited (“BOISS”) is the appointed Administrator. iShares plc has an umbrella structure, so that different funds may be established within the Company, subject to the prior approval of the Financial Regulator. Given that the Company is a segregated liability company, each fund (the funds) is treated as bearing its own liabilities exclusively from its own assets. The primary exchange for the iShares plc funds is the London Stock Exchange (“LSE”). As of 29 February 2008, all iShares plc funds are traded on the LSE, and in respect of each fund, the following additional exchanges. Fund Base Currency
Borsa Italiana
Deutsche Bourse*
Euronext Amsterdam
Euronext Paris
SWX Swiss Exchange
iShares € Government Bond 1-3
€
3
3
3
3
3
iShares € Inflation Linked Bond
€
3
3
3
3
3
iShares £ Corporate Bond
£
iShares € Corporate Bond
€
3
3
3
3
3
iShares $ Corporate Bond
$
3
3
3
3
iShares $ Treasury Bond 1-3
$
3
3
3
3
iShares AEX
€
iShares DJ Asia/Pacific Select Dividend
$
3
3
3
3
3
iShares DJ Euro STOXX Growth
€
3
3
3
3
3
iShares DJ Euro STOXX MidCap
€
3
3
3
3
3
iShares DJ Euro STOXX Select Dividend
€
3
3
3
3
3
iShares DJ Euro STOXX SmallCap
€
iShares DJ Euro STOXX Value
€
iShares FTSE 100
£
iShares FTSE 250
£
iShares FTSEurofirst 80
€
iShares FTSEurofirst 100
€
iShares FTSE/EPRA European Property Index Fund
€
iShares FTSE UK Dividend Plus
£
iShares FTSE/Xinhua China 25
$
iShares MSCI AC Far East ex-Japan
$
iShares MSCI Brazil
$
iShares MSCI Eastern Europe 10/40
$
iShares MSCI Emerging Markets
$
4 iShares plc Annual Report
3
Virt-x
3
3
www.iShares.eu
iShares plc Company Information (continued) Fund Base Currency
iShares MSCI Europe ex-UK
€
iShares MSCI Japan
$
iShares MSCI Korea
$
iShares MSCI North America
$
iShares MSCI Taiwan
$
iShares MSCI World
$
iShares S&P 500
$
Borsa Italiana
Deutsche Bourse*
Euronext Amsterdam
Euronext Paris
SWX Swiss Exchange
Virt-x
* - Funds trade on the Deutsche Börse Xetra XTF Funds Platform of the Frankfurt Stock Exchange. All figures relating to each fund are shown in the relevant functional currency. The financial statements of the Company are presented in pounds sterling. These funds are ETFs, which provide the flexibility of a share with the diversification of a fund. They can be bought and sold like any other shares listed on a stock exchange, but provide instant exposure to many companies or various financial instruments relevant to the fund.
www.iShares.eu
iShares plc Annual Report 5
iShares plc REPORT OF THE INVESTMENT MANAGER FUND REVIEW By owning a single stock-exchange listed share in an iShares fund, the holder is entitled to participate in the price and yield performance, net of any non-reclaimable withholding tax, of the securities that make up the relevant benchmark index. This participation may be achieved either by the Investment Manager replicating as far as practicable the benchmark or by using optimisation techniques to achieve a similar result. The specific investment objectives and policies for each Fund are formulated by the Directors and are set out in the Company’s prospectus and supplements. The benchmark indices for these Funds are shown below: Fund
Benchmark index
iShares € Corporate Bond iShares € Government Bond 1-3 iShares € Inflation Linked Bond iShares £ Corporate Bond iShares $ Corporate Bond iShares $ Treasury Bond 1-3 iShares AEX iShares DJ Asia/Pacific Select Dividend iShares DJ Euro STOXX Growth iShares DJ Euro STOXX MidCap iShares DJ Euro STOXX Select Dividend iShares DJ Euro STOXX SmallCap iShares DJ Euro STOXX Value iShares FTSE 100 iShares FTSE 250 iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares FTSE/EPRA European Property Index Fund iShares FTSE UK Dividend Plus iShares FTSE/Xinhua China 25 iShares MSCI AC Far East ex-Japan iShares MSCI Brazil iShares MSCI Eastern Europe 10/40 iShares MSCI Emerging Markets iShares MSCI Europe ex-UK iShares MSCI Japan iShares MSCI Korea iShares MSCI North America iShares MSCI Taiwan iShares MSCI World iShares S&P 500
iBoxx Euro Liquid Corporates Index Barclays Euro Government Bond 1-3 Term Index Barclays Euro Government Inflation Linked Bond Index iBoxx £ Liquid Corporates Long Dated Index USD Liquid Investment Grade Index*** Barclays US Treasury 1-3 year Term Index AEX® Index Dow Jones Asia/Pacific Select Dividend 30 IndexSM Dow Jones Euro STOXX• TMI Large Cap Growth Index Dow Jones Euro STOXX• Growth Mid Index Dow Jones Euro STOXX• Select Dividend 30 Index Dow Jones Euro STOXX• Growth Small Index Dow Jones Euro STOXX• TMI Large Cap Index FTSE 100 Index FTSE 250 Index FTSEurofirst 80 Index Net Total Return Index*TM FTSEurofirst 100 Index Net Total Return* FTSE EPRA / NAREIT Europe ex UK Dividend + Index FTSE UK Dividend + Index FTSE/Xinhua China 25 Index MSCI AC Far East ex-Japan Index MSCI Brazil Index TM MSCI Eastern Europe 10/40 Index MSCI Emerging Markets Index TM MSCI Europe ex-UK Index TM MSCI Japan Index TM MSCI Korea Index TM MSCI North America Index TM MSCI Taiwan Index TM MSCI World Index S&P 500 Net Total Return Index****
6 iShares plc Annual Report
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iShares plc Report of the Investment Manager (continued) FUND REVIEW (continued) The performance of the Funds for the periods under review is shown below:
Fund iShares € Corporate Bond iShares € Inflation Linked Bond iShares € Government Bond 1-3 iShares £ Corporate Bond iShares $ Corporate Bond*** iShares $ Treasury Bond 1-3 iShares AEX Tracker iShares DJ Asia/Pacific Select Dividend iShares DJ Euro STOXX Growth iShares DJ EuroSTOXX MidCap Fund iShares DJ Euro STOXX Select Dividend iShares DJ EuroSTOXX SmallCap Fund iShares DJ Euro STOXX Value iShares FTSE 100 iShares FTSE 250 Fund iShares FTSEurofirst 80 Fund* iShares FTSEurofirst 100 Fund* iShares FTSE/EPRA European Property Index iShares FTSE UK Dividend Plus iShares FTSE/Xinhua China 25 iShares MSCI AC Far East ex-Japan iShares MSCI Brazil iShares MSCI Eastern Europe 10/40 iShares MSCI Emerging Markets iShares MSCI Europe ex-UK iShares MSCI Japan iShares MSCI Korea iShares MSCI North America iShares MSCI Taiwan iShares MSCI World iShares S&P 500 Fund****
Launch Date Mar-03 Nov-05 Jun-06 Mar-04 May-03 Jun-06 Nov-05 Jun-06 Nov-05 Oct-04 Oct-05 Oct-04 Nov-05 Apr-00 Mar-04 Dec-00 Oct-01 Nov-05 Nov-05 Oct-04 Oct-05 Nov-05 Nov-05 Nov-05 Jun-06 Oct-04 Nov-05 Jun-06 Oct-05 Oct-05 Mar-02
Net Asset Value (NAV)** NAV Per Share** At launch At 29/02/08 At ‘000 ‘000 At launch 29/02/08 € 766.40 € 645.21 € 117.46 € 115.63 € 31.19 € 314.73 € 155.95 € 165.65 € 41.70 € 142.03 € 130.24 € 131.55 £109.82 £194.46 £136.37 £121.54 $353.80 $ 112.41 $ 114.12 $ 102.19 $53.07 $ 117.01 $ 120.62 $127.19 € 16.64 € 102.43 € 41.62 € 44.53 $10.00 $ 113.55 $ 25.00 $ 35.48 € 16.96 € 230.58 € 24.23 € 27.45 € 8.21 € 170.78 € 27.37 € 42.69 € 21.03 € 590.65 € 23.37 € 29.98 € 7.81 € 161.87 € 17.36 € 26.98 € 16.94 € 49.90 € 24.20 € 29.35 £ 60.00 £1,615.97 £10.00 £5.86 £ 20.16 £208.06 £6.20 £9.91 € 19.20 € 139.16 € 30.93 € 11.72 € 10.30 € 88.32 € 26.51 € 27.18 € 23.80 € 294.40 € 23.80 € 28.86 € 9.83 £241.14 £9.83 £9.96 $17.53 $ 785.33 $ 50.10 $ 144.10 $15.00 $ 516.73 $ 25.00 $ 45.32 $12.49 $ 612.17 $ 24.99 $ 64.44 $9.25 $ 350.41 $ 23.14 $ 43.26 $45.00 $ 1,341.25 $ 25.00 $ 44.71 € 30.00 € 243.24 € 25.00 € 25.88 $52.28 $ 1,780.85 $ 9.68 $ 12.79 $12.50 $ 169.17 $ 25.00 $ 35.99 $35.00 $ 386.11 $ 25.00 $ 26.45 $12.50 $ 282.71 $ 25.00 $ 37.69 $50.00 $ 1,138.27 $ 25.00 $ 30.93 $49.50 $ 3,177.37 $ 11.66 $ 13.27
Return since launch** (%) Fund 21.37 6.25 6.75 10.28 14.52 12.90 12.36 53.22 17.22 64.23 37.45 63.30 28.28 16.07 74.97 11.29 17.86 28.10 11.58 206.45 87.87 170.76 91.75 84.49 6.01 34.49 47.01 8.08 56.81 28.07 22.48
(%) Index 22.16 6.90 7.16 10.23 15.76 13.35 14.69 53.12 17.95 66.39 35.53 65.88 29.01 21.49 79.11 16.04 23.01 27.97 12.73 214.15 90.99 175.20 92.31 86.26 6.18 37.22 49.52 8.06 60.30 28.17 22.98
One year return** at 29/02/08 Fund% Index% 5 -0.15 -0.06 5.30 5.66 7 4.82 5.07 3,5 -6.21 -6.56 4,5 0.97 2.28 7 8.86 9.16 3 -6.66 -5.88 11.25 10.31 3 -3.22 -3.05 4 -11.29 -11.03 3 -12.58 -14.23 4 -12.94 -12.77 3 -6.10 -6.10 8 -1.75 -1.27 3 -7.53 -7.06 3 -5.56 -5.48 3 -7.93 -7.67 8 -20.84 -20.26 8 -16.69 -16.50 8 50.34 51.68 3 26.80 26.84 3 86.47 87.98 3 24.99 22.03 3 33.87 33.21 -8.24 -8.29 10 -12.66 -12.28 3 18.89 20.20 -1.75 -1.82 3 11.70 12.53 3 0.20 -0.53 9 -4.18 -4.15
The calendar year performance of the Funds is shown below:
Inception Fund Date iShares € Corporate Bond Mar-03 iShares € Inflation Linked Bond Nov-05 iShares € Government Bond 1-3 Jun-06 iShares £ Corporate Bond Mar-04 iShares $ Corporate Bond *** May-03 iShares $ Treasury Bond 1-3 Jun-06 iShares AEX Tracker Nov-05 iShares DJ Asia/Pacific Select Dividend Jun-06 iShares DJ Euro STOXX Growth Nov-05 iShares DJ EuroSTOXX MidCap Fund Oct-04 iShares DJ Euro STOXX Select Dividend Oct-05 iShares DJ EuroSTOXX SmallCap Fund Oct-04 iShares DJ Euro STOXX Value Nov-05 iShares FTSE 100 Apr-00 iShares FTSE 250 Fund Mar-04 iShares FTSEurofirst 80 Fund * Dec-00 iShares FTSEurofirst 100 Fund * Oct-01 iShares FTSE/EPRA European Property Index Nov-05 iShares FTSE UK Dividend Plus Nov-05 iShares FTSE/Xinhua China 25 Oct-04 iShares MSCI AC Far East ex-Japan Oct-05 iShares MSCI Brazil Nov-05 iShares MSCI Eastern Europe 10/40 Nov-05 iShares MSCI Emerging Markets Nov-05
www.iShares.eu
Year to Date 29/02/2008 Fund Index 5 -0.15 -0.06 7 5.30 5.66 7 4.82 5.07 3,5 -6.21 -6.56 4,5 0.97 2.28 7 8.86 9.16 3 -6.66 -5.88 3 11.25 10.31 3 -3.22 -3.05 4 -11.29 -11.03 3 -12.58 -14.23 4 -12.94 -12.77 3 -6.10 -6.10 8 -1.75 -1.27 3 -7.53 -7.06 3 -5.56 -5.48 3 -7.93 -7.67 -20.84 -16.69 50.34 26.80 86.47 24.99 33.87
8
-20.26 8 -16.50 8 51.68 3 26.84 3 87.98 3 22.03 3 33.21
2007 (31/12/06 - 31/12/07) Fund Index 5 -1.44 -1.28 7 1.57 1.91 7 3.55 3.78 3,5 -1.53 -1.75 4,5 2.70 4.05 7 7.03 7.30 3 6.70 7.51 3 18.52 17.72 3 12.91 13.13 4 0.43 0.64 3 3.09 1.25 4 -3.14 -2.85 3 10.40 10.42 8 6.85 7.36 3 -2.93 -2.46 3 10.68 10.70 3 6.15 6.42 -20.10 -11.30 54.78 36.55 78.08 34.07 39.41
8
-19.63 8 -11.05 8 55.99 3 36.49 3 79.56 3 29.72 3 39.39
2006 (31/12/05 - 31/12/06) Fund Index 5 -0.42 -0.28 7 -1.88 1.37 7 1.25 -1.67 3,5 0.28 0.36 4,5 3.97 3.98 7 2.71 2.80 3 15.88 17.19 3 33.65 34.54 3 13.57 13.96 4 30.98 31.76 3 37.03 37.51 4 32.23 32.99 3 26.43 26.96 8 13.89 14.43 3 29.48 30.21 3 19.48 20.62 3 15.61 16.41 51.87 24.51 82.94 30.28 44.49 54.46 31.35
8
50.48 8 25.24 8 84.37 3 31.74 3 45.30 3 55.53 3 32.17
2005 (31/12/04 - 31/12/05) Fund Index 5 4.15 4.33 2.73 n/a 7 n/a 2.75 3 15.24 15.54 4 0.99 0.84 n/a n/a 3 4.90 4.94 n/a n/a 3 6.04 6.10 4 40.16 40.72 3 10.36 10.47 4 39.63 40.66 3 7.74 7.84 8 20.25 20.78 3 47.25 49.01 3 23.58 24.63 3 23.27 24.16 1.10 8.41 23.04 14.88 2.52 3.59 6.85
8
1.18 8 8.59 8 24.00 3 15.24 3 2.65 3 5.73 3 7.58
iShares plc Annual Report 7
iShares plc Report of the Investment Manager (continued) FUND REVIEW (continued)
Fund iShares MSCI Europe ex-UK iShares MSCI Japan iShares MSCI Korea iShares MSCI North America iShares MSCI Taiwan iShares MSCI World iShares S&P 500 Fund ****
Inception Date Jun-06 Oct-04 Nov-05 Jun-06 Oct-05 Oct-05 Mar-02
Year to Date 29/02/2008 Fund Index -8.24 -8.29 10 -12.66 -12.28 3 18.89 20.20 3 -1.75 -1.82 3 11.70 12.53 3 0.20 -0.53 9 -4.18 -4.15
2007 (31/12/06 - 31/12/07) Fund Index 5.03 5.22 3 -4.68 -4.23 3 30.87 31.85 3 7.11 7.07 3 7.70 8.38 3 9.34 9.04 9 4.84 4.90
2006 (31/12/05 - 31/12/06) 15.31 5.70 11.65 10.11 18.73 19.70 15.12
3
15.40 10 6.24 3 12.64 3 10.18 3 19.97 3 20.07 9 15.14
2005 (31/12/04 - 31/12/05) Fund Index n/a n/a 10 38.99 40.36 3 10.80 10.87 n/a n/a 3 19.60 19.97 3 6.41 6.62 9 4.29 4.33
Unless otherwise stated, the Fund performance quoted is on a total return basis (capital growth plus income net of withholding taxes), using the Fund’s valuation currency. Past performance may not necessarily be repeated and is no guide to future returns. 1 The performance figure takes account of the bonus issue applied to the Fund in October 2001. 2 The performance figure takes account of the bonus issue applied to the Fund in August 2001. Return since launch is capital return as the Fund launched against a capital return benchmark due to the unavailability of a total return benchmark at launch. 3 Benchmark source: DataStream 4 Benchmark source: Goldman Sachs 5 Benchmark source: iBoxx.com 6 Benchmark source: Barclays Global Investors Limited 7 Benchmark source: Barclays Capital 8 Benchmark source: FTSE 9 Benchmark source: Standard & Poor's 10 Benchmark source: MSCI Additional sources: Bank of Ireland, AIB and STOXX. * iShares FTSEurofirst 80 and iShares FTSEurofirst 100 benchmarks changed on 15 October 2004. The returns for iShares FTSEurofirst 80 since inception are shown against the total return benchmark from 20 March 2001, the inception of the total return benchmark. ** The NAV per share and net assets values are based on the published pricing NAV. Due to accounting policy requirements under Irish GAAP that apply to the financial statements, there may be differences between the NAV per share as recorded in the financial statements, and the pricing NAV per share. In addition, the fund returns are net of expenses. ***On the 4th December 2007, the benchmark index for the Fund changed from iBoxx $Liquid Investment Grade Index to USD Liquid Investment Grade 30 Index. **** With effect from 1 March 2007, the benchmark index changed from S&P 500 to S&P 500 Net Total Return Index
8 iShares plc Annual Report
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iShares plc Report of the Investment Manager (continued) MARKET BACKGROUND Global equities Following a relatively solid start to the review year amid signs that the benign global economic backdrop was continuing to support corporate profits growth, global equities endured higher levels of volatility during the second half of 2007. This came about as concerns over the health of the US sub-prime mortgage market steadily spread, with fears over the full impact of the developing ‘credit crunch’ prompting the US Federal Reserve to slash interest rates in an effort to underpin economic activity. Despite concerted action from central banks in North America and Europe to inject liquidity to free up interbank lending markets, global equities slipped sharply in early 2008 on concerns that the credit crisis would hamper lending to businesses and consumers, thus slowing economic activity and weighing on corporate profits. Rising energy and food prices also fanned concerns over global inflationary pressures. UK equities Robust domestic economic activity and continuing merger & acquisition activity underpinned the UK market’s progress during the first half of 2007. The UK economy grew by a sprightly 0.7% and 0.8% in the first and second quarters of 2007 respectively while consolidation in the corporate sector was evidenced by the takeover of baker RHM by Premier Foods and the merger of housebuilders Taylor Woodrow and George Wimpey. However UK equities followed the lead of their US peers by sliding sharply in July on concern that the impact of the developing crisis in the US mortgage market would hit economic activity across the world’s leading economies. Though generally positive corporate earnings news and hopes of lower interest rates helped the market to regain some of its losses towards the end of 2007, the UK market soon followed its leading global peers in early 2008. Fresh signs of a rapidly cooling housing market, a loss of confidence in the banking sector in the wake of the Northern Rock debacle and a squeeze on consumer finances against the backdrop of high energy prices and rising utility bills added to concerns over the impact of the global credit crunch. US Equities Having delivered relatively strong returns during the second quarter of 2007, US stocks suffered a bout of weakness from July amid a surge in worries over the potential impact of the developing credit crunch on the outlook for corporate profits. However, though the market endured several weeks of sharply higher volatility, generally reassuring company trading updates and a substantial injection of liquidity from the US Federal Reserve (Fed) to help lubricate the faltering capital markets supported sentiment, helping US equities to make good much of their earlier losses. Investors also took comfort from signs that the Federal Reserve was ready to take further drastic action to fend off the risk that the contagion could spread to drag the wider economy into a deep and prolonged recession. However, despite a succession of interest rate cuts, fears grew towards the end of the year that the crisis had already spread beyond sub-prime loans, with a slump in house prices and rising economic uncertainty taking a heavy toll on consumer sentiment. Economic growth tumbled from 4.9% on an annualised basis during the third quarter of 2007 to just 0.6% during the fourth quarter, while concerns grew over the health of the banking sector. European equities European bourses made solid ground during the early months of the review period amid further signs that the region’s economic recovery was gathering momentum. Ever vigilant to inflationary pressures, the European Central Bank lifted interest rates in response to rising energy prices, confident that the region’s economy, fired by a further strengthening of economic activity in Germany, would continue to deliver steady growth. Nevertheless, European equity markets could not escape the impact of the US market’s slide early in the third quarter of 2007 as fresh worries appeared over the impact of the developing US mortgage market crisis. However, despite its hawkish tone on interest rates, the European Central Bank was quick to make funds available to help fend off a liquidity crisis in the European banking system and also subsequently participated in a concerted round of action in tandem with the US Fed and the Bank of England among others. Rising energy prices helped push inflation in the eurozone to a record high of 3.2% in January 2008.
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iShares plc Annual Report 9
iShares plc Report of the Investment Manager (continued) MARKET BACKGROUND (continued) European equities (continued) Against this backdrop the European Central Bank continued to sound tough on interest rates, despite signs that cooling property prices in countries such as Ireland and Spain could put additional stresses on the 15-nation eurozone region. Japanese equities Japanese stocks had a poor start to the third quarter of 2007, erasing the steady gains enjoyed during the previous quarter. While sentiment towards Japanese equities slipped in tandem with falls in global stockmarkets on concerns over the developing problems in the US sub-prime mortgage sector, the Japanese banking sector was left nursing particularly heavy losses after two major financial institutional revealed hefty losses of their own from investments in mortgage-related securities. Though the Bank of Japan echoed moves from its counterparts in the US and Europe to inject liquidity into the banking system, fresh evidence steadily appeared in the second half of the year that the Japanese economy was softening. Gross Domestic Product for the third quarter was slashed to just 1.5% on an annualised basis compared to the initial estimate of 2.6%, while capital investment from businesses grew only modestly as exporters became less confident over their prospects against the backdrop of a slowing US economy. In January the Nikkei Index slipped to its lowest level in 26 months after the Bank of Japan confirmed that bank lending had slipped to its slowest level in almost two years. Despite a relatively optimistic outlook from the country’s Economy Minister, some analysts speculated that a cut in interest rates could be required to help stop the economy teetering back into recession. Emerging markets equities Having initially fallen sharply in July in sympathy with major developed markets in the US, Europe and Japan amid growing concerns over the outlook for the US economy, emerging markets subsequently delivered strong gains for much of the second half of 2007. While the US remains an important market for exports for emerging market manufacturers, optimism grew that relatively robust domestic demand would help many of the region’s companies to continue to deliver attractive profits growth. The Chinese economy continued its breakneck expansion during the review year, as annualised growth hit 11.4% in 2007, its fastest rate in 13 years. However, despite a succession of interest rate increases, inflation hit its highest level in 11 years against the backdrop of rising food and energy prices. Meanwhile Latin American stockmarkets performed strongly, as the valuations of mining stocks such as Brazil’s CVRD were lifted by robust metal prices. Nevertheless, towards the end of the review year emerging markets surrendered some of their earlier gains on concerns that any sustained economic slowdown in the developed economies could impact on the region’s leading companies, with markets perceived as carrying a higher political risk, such as Russia and Turkey, among the underperformers. Property markets The shockwaves from the US sub-prime mortgage market implosion weighed on global property markets in the second half of 2007. Asset prices slipped in the US and Europe on concerns that the prospect of slower economic growth could hamper demand for office and retail space. However property markets in Asia generally bucked the downtrend amid confidence that the region’s economies could achieve some level of decoupling from the slowing developed economies as the domestic consumer took up much of the slack. US government bonds Following a poor start to the review year as investors favoured the greater upside potential of equities, US government bonds quickly recovered from early July’s volatile trading as investors tried to get to grips with the full impact of the crisis in the sub-prime mortgage market. Bond prices subsequently trended higher for the remainder of 2007 as the market gained greater conviction that the Federal Reserve would implement aggressive interest rate cuts in an attempt to fend off the risk of a prolonged Japan-style recession. Treasuries attracted additional buying from investors fleeing higher risk or less transparent assets, particularly those with direct or indirect exposure to the falling residential property market. Having cut interest rates from 5.25% to 3% during the review year, the Federal
10 iShares plc Annual Report
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iShares plc Report of the Investment Manager (continued) MARKET BACKGROUND (continued) US government bonds (continued) Reserve slashed its economic growth forecast in February 2008, predicting that the world’s largest economy would grow by between 1.3% and 2% in 2008. Despite upward pressure on inflation from rising energy and food prices, Federal Reserve chief Ben Bernanke reaffirmed that he was prepared to implement further interest rate cuts to support economic activity and to shore up the banking sector with further liquidity injections. US corporate bonds The US corporate bond market underperformed US government bonds by a considerable margin over the review year. Yield spreads between less highly-rated corporate bonds and their government equivalents widened sharply from July as investors took fright over the potential impact of the developing credit crisis. The corporate bond market was at the sharp end of investors’ re-pricing of investment risk as the market demanded a sharply higher premium for the greater risk of investing in corporate bonds, particularly lower-rated bonds, compared to government issues. Corporate bonds issued by financial institutions were among the worst performers as many investors steered clear of companies most exposed to the credit market turmoil. European government bonds The eurozone region’s ongoing economic recovery acted as a headwind for the eurozone government bond market for much of the review period. News from the region’s largest economy, Germany, was particularly encouraging as German industry benefited both from rising export demand and the improving domestic economic backdrop. The European Central Bank (ECB) continued to emphasise the threat rising food and energy costs posed for inflation. Having raised borrowing costs to 4% during the second quarter of 2007, the ECB chose not to follow the US and UK lead in cutting interest rates, despite the credit crunch weighing to some extent on business confidence in the second half of 2007. This came despite rising political pressure to help exporters by taming the euro’s muscular display against the US dollar and sterling. However the ECB acted promptly injecting capital into the banking system to help alleviate some of the strain which had afflicted the financial sector, particularly banks with exposure to the cooling Spanish property market. European corporate bonds As in the US, eurozone corporate bonds generally produced disappointing returns as increasing investor caution against the backdrop of uncertainty over the impact of the global credit crunch steered buyers towards the greater security of government securities. Bonds issued by financial institutions were among the weakest performers as large write-downs resulting from losses related to US mortgagebacked bonds weakened the balance sheets of some of the region’s highest profile banks. UK government bonds Gilts had a generally soft start to the review year as official data releases confirmed the robust nature of the UK economy. Meanwhile worries over building inflationary pressures were exacerbated by news that March 2007’s consumer price index hit 3.1%, the highest level in 11 years and far in excess of the government’s 2.0% target. Interest rates were duly raised twice by 0.25%, hitting a cycle high of 5.75% in July. However as worries came to a head early in the third quarter over the full potential impact of the US sub-prime mortgage crisis, government bonds both in the UK and overseas returned firmly to favour as investors sought out the higher security of government issues. Gilts found further support in the second half of 2007 as some near-term concerns over inflation abated as August’s inflation figure slipped to 1.8%. Fears that the credit crisis was affecting the health of the UK financial sector were confirmed by the state-backed bailout of mortgage bank Northern Rock as the seizure of the money markets to borrowers perceived as higher risk floored the bank’s business model. Though sharp rises in food prices and the ascent of crude oil prices above $100 a barrel reignited concerns over the near-term outlook for inflation, an abrupt slowdown in the housing market convinced many investors that the Bank of England would implement further interest cuts following 0.25% reductions in December and February.
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iShares plc Annual Report 11
iShares plc Report of the Investment Manager (continued) MARKET BACKGROUND (continued) UK corporate bonds In a similar vein to the US market, UK corporate bonds underperformed government bonds as worries over the crisis in the US sub-prime mortgage market came to a head early in the third quarter of 2007. This underperformance was particularly pronounced in July as investors showed a strong preference for the security of the highest-quality bonds, while bonds issued by companies perceived as higher risk fell sharply in value. Though UK corporate bonds generally delivered positive returns during the fourth quarter of 2007, they continued to underperform gilts.
Bonds issued by companies in the financial sector were among the laggards amid continued
uncertainty over the prospect of further asset write-downs in the financial sector, though bonds issued by industrial companies generally delivered better performance. Barclays Global Investors Limited March 2008
12 iShares plc Annual Report
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iShares plc DIRECTORS’ REPORT The Directors submit their annual report together with the audited financial statements for the year ended 29 February 2008. STATEMENT OF DIRECTORS’ RESPONSIBILITIES The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable Irish law and Generally Accepted Accounting Practice in Ireland including the accounting standards issued by the Accounting Standards Board and published by The Institute of Chartered Accountants in Ireland and comply with the Irish Companies Acts, 1963 to 2006 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (as amended) (the "Regulations"). Irish company law requires the Directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company (iShares plc) for that period. In preparing these financial statements, the Directors are required to: •
Select suitable accounting policies and then apply them consistently;
•
Make judgements and estimates that are reasonable and prudent;
•
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors confirm that they have complied with the above requirements in preparing the financial statements. These responsibilities have been delegated in part to BGI Ireland Limited (the Company's Manager), who in turn has delegated part of the responsibility for the investment management of the assets of the Company, including securities lending and the promotion of the Company to Barclays Global Investors Limited. The Company has delegated the safeguarding of the assets of the Company directly to the Governor & Company of the Bank of Ireland. The Directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the Financial statements are prepared in accordance with accounting standards generally accepted in Ireland and comply with the Irish Companies Acts, 1963 to 2006 and the European Communities Regulations 2003 (as amended). They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. This responsibility has been delegated in part to BGI Ireland Limited (the Company's Manager), who in turn delegated day to day management to the Custodian and Administrator. The responsibility for the maintenance and integrity of the information on the website has been delegated to BGI Ltd. as distributor of the funds. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
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iShares plc Annual Report 13
iShares plc Directors’ Report (continued) BOOKS OF ACCOUNT The measures taken by the Directors to secure compliance with the Company’s obligation to keep proper books of account are the use of appropriate systems and procedures and employment of competent persons. The books of account are kept at the following address: Bank of Ireland Securities Services Limited New Century House Mayor Street Lower International Financial Services Centre Dublin 1 Ireland REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS A review of the business and future developments are given in the Letter to Investors, and the Report of the Investment Manager on pages 3 to 6. RISK MANAGEMENT OBJECTIVES AND POLICIES The various types of risks to which the Company is exposed are disclosed in note 2 "Financial Risk Management" on pages 24 to 48 of the notes to the financial statements. RESULTS AND DIVIDENDS The results and dividends for the year are set out in the Profit and Loss Account on page 20. SIGNIFICANT EVENTS SINCE THE YEAR END The significant events which have occurred since the Balance Sheet date are disclosed in note 18 on page 54 of the notes to the financial statements. DIRECTORS The names of the persons who were directors at any time during the year ended 29 February 2008 are set out below. Except where indicated, they served for the entire year. The Directors who served during the year are as follows: Gerald J.P. Brady (resigned 12 June 2007) John Caslin Richard Arthur Davis Keatinge Michael Thomas Lennon Tim West (resigned 22 January 2008) Mr. Keatings died on 29 February 2008. The Board wishes to extend its sympathy to his family and friends. Gerald J.P. Brady Mr Brady was appointed as a non-executive director of the Company on 27 July 2004. Mr Brady has been Country Head of Bank of Bermuda in Ireland since it commenced operations in 1995 but left Bank of Bermuda in May 2004 following its acquisition by HSBC. He joined The Bank of Bermuda Limited in 1986 as Global Head of Internal Audit in Bermuda and subsequently served as Managing Director of the Group's Cayman operations from 1990 before returning to Dublin in 1995. Prior to joining Bank of Bermuda, Mr Brady was employed by KPMG in Dublin and is a Fellow of the Institute of Chartered Accountants of Ireland (FCA). Mr Brady is also a Chartered Financial Analyst (CFA) and is a member of the International Tax Planning Association and the Institute of Directors. He also serves as a Director of numerous client companies, several of which are listed on international stock exchanges.
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iShares plc Directors’ Report (continued) DIRECTORS (continued) John Caslin Mr Caslin is an executive director of Alder Capital having joined the firm in September 2003 from Eagle Star life Assurance Company of Ireland (ultimate parent Zurich Financial Services) where he held the position of General Manager Investment & Financial Solutions. He was a member of the senior management team and a member of the Investment Committee of the board of Eagle Star Life Assurance Company of Ireland which, at that time, oversaw the management of a portfolio of assets of approximately US$3.0 billion. He is a Fellow of the Institute of Acturaries and a Fellow of the Society of Acturaries in Ireland. John is a former Chairman of the Education Committee and of the Investment & Finance Committee of the Society of Acturaries in Ireland. John's name has been entered in the Prizes' Book of the Institute of Acturaries for two papers, one of which was entitled Hedge Funds. He has written several articles on both traditional and alternative investments and his work has been published in the Alternative Investment Management Association Newsletter/Journal and the British Actuarial Journal. In 1981, Trinity College Dublin awarded John a degree in mathematics and a first class honours degree and gold medal in engineering. Richard Arthur Davis Keatinge Mr Keatinge was appointed as a non executive director of the Company on 25 January 2000. Mr Keatinge was Managing Director of IBI Corporate Finance Ltd from 1993 to February 2000. In this role he was involved in providing financial and strategic advice to Irish public and private companies. He was non-executive chairman and director of a number of companies including P.J. Carroll & Co., Stafford Holdings, Allianz Plc and the Irish Take Over Panel. He has also held senior positions with other Irish companies including Hardwicke Limited, NCB Corporate Finance Limited and various roles in Bank of Ireland. Mr Keatinge has a BA from Trinity College Dublin and an MBA from University College Dublin. Michael Thomas Lennon Mr Lennon was appointed a non executive director of the Company on 17 December 2002. Mr Lennon was head of Treasury at EBS Building Society Dublin from 1988 to 2001 prior to his retirement in May 2002. He was a Director with EBS Asset Managers and Summit plc from 1994 to 1998 and the Managing Director from 1998 to 2001. He was a representative on the European Mortgage Federation Capital Markets Committee and was also a member of the industry working parties on the Asset Covered Sercurities Act, the Investment Intermediaries Act and the Investor Compensation Act. Tim West (British) Mr West was appointed as a director of the Company on 4 December 2007. Mr West joined Barclays Global Investors in October 2005 as Chief Operating Officer of iShares Europe, the exchange-traded fund business of Barclays Global Investors. In this role Mr West has responsibility for product management of in-house and outsourced operations which involves regular contact with brokers, exchanges, index providers and regulators across Europe. Prior to joining Barclays Global Investors, Mr West was a founding director of Bluerock Consulting and prior to that was in Private Banking and Corporate Finance with UBS. Mr West started his career in management consulting with Price Waterhouse. DIRECTORS' AND SECRETARY'S INTERESTS The Directors and Secretary and their families had no interests in the shares of the Company at 29 February 2008. No Director had at any time during the year, a material interest in any contract of significance, subsisting during or at the end of the year, in relation to the business of the Company. INDEPENDENT AUDITORS The auditors, PricewaterhouseCoopers, will be re-appointed in accordance with section 160(2) of the Companies Act, 1963. ASSESSMENT OF THE INVESTMENT MANAGER Barclays Global Investors Limited (“BGIL”) has been appointed as investment manager and sponsor of the Company's Funds ("Funds") pursuant to the Investment Management Agreement ("the Agreement") dated 14 February 2000 between Barclays Global Investors Ireland Limited ("the Manager") and BGIL. BGIL has been delegated all the powers, duties and discretions exercisable in respect of the management of the investments and sponsorship of the Funds. BGIL has agreed to perform all such obligations on the terms set out in the Agreement and in accordance with the Company's prospectus and memorandum and articles of association.
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iShares plc Annual Report 15
iShares plc Directors’ Report (continued) ASSESSMENT OF THE INVESTMENT MANAGER (continued) The Agreement identifies and outlines the terms and conditions by which BGIL performs its duties on behalf of the Company. These include BGIL's responsibilities, powers and obligations, the nature of their authority, the services to be provided and the fees to be paid by the Funds. Inter alia, the Agreement provides that BGIL is granted authority, subject to the supervision of the Manager, and ultimately, the Directors of the Company, to issue orders and instructions to the Custodian and/or Administrator with respect to the acquisition, disposal and investment of assets, and to negotiate and execute contracts which are deemed necessary, advisable or incidental to the carrying out of the management activity. With relation to the appointment of BGIL as investment manager and its responsibilities, powers and obligations, the Directors are not precluded from exercising any duties, powers, discretions or functions wherever they wish so upon prior notice to the Investment Manager. The Agreement may be terminated by either party giving not less than 90 days notice in writing. In the event of a termination notice, BGIL will be entitled to receive all fees accrued up to the date of the termination but shall not be entitled to compensation in respect of the termination of its appointment under the Agreement. In consideration of the services to be provided by BGIL, the Manager shall be responsible for and pay to BGIL such fee and properly vouched expenses as may be agreed between them from time to time. BGIL takes its fees and expenses from this amount, and discharges all fees, costs and expenses connected with the management and operation of the Fund as detailed in the Company's prospectus. Fees accrue on a monthly basis and are paid monthly in arrears. The Board of Directors reviews BGIL's overall performance in the functioning of its duties as outlined in the Agreement. The Board has been provided with information prepared and presented by BGIL throughout the year which assist in the evaluation of their performance as to the management of the Company’s sub-fund assets. In addition, BGI has commissioned an independent review of their performance which includes an analysis of the Company's fund performance against the benchmarks as well as comparative expense reports. The Directors assess this information along with marketing and distribution activities, and other services such as securities lending and client support provided by BGIL. The Board considers the nature and quality of the investment management, costs and benefits of engaging BGIL as well as their compensation for services provided. The Board having carefully considered BGIL's performance as investment manager for the year under review have decided to continue the Agreement for a further year, during which they will constantly monitor performance as the Company expands its development in the ETF market. The Board of Directors is of the view that the continuance of the Agreement appointing BGIL as investment manager under the current terms is in the best interests of the shareholders. On behalf of the Board
Director
Director
Date of approval: 20 June 2008
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iShares plc STATEMENT OF CUSTODIAN’S RESPONSIBILITIES & CUSTODIAN’S REPORT CUSTODIAN’S RESPONSIBILITIES The European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended), ("the Regulations"), require the Custodian to take reasonable care so as to ensure that the Company is managed in accordance with the Regulations. In particular, the Custodian must: -
enquire into the conduct of the investment company in each annual accounting period and report thereon to the shareholders in a report which shall contain the matters prescribed by the Regulations;
-
take into its custody or under its control, all the assets of the Company and hold them in trust for the shareholders in accordance with the Regulations and Memorandum and Articles of Association; and
-
satisfy itself that the valuation of the shares of the Company and that the sale, issue, repurchase and redemption of shares of the Fund are being carried out in accordance with the Regulations and Memorandum and Articles of Association.
CUSTODIAN’S REPORT TO THE SHAREHOLDERS OF THE iSHARES PLC (THE “COMPANY”) FOR THE YEAR ENDED 29 FEBRUARY 2008 We have enquired into the conduct of the Company for the year ended 29 February 2008, in our capacity as Custodian to the Company.
This report, including the opinion, has been prepared for and solely to the shareholders in the Company as a body, in accordance with UCITS Notice 4.1 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown.
Basis of Custodian Opinion The Custodian conducts its reviews to ensure that it adheres to the custodian duties outlined in UCITS Notice 4.1 and to ensure that the Company is managed in accordance with the Company’s constitutional documentation and the appropriate regulations.
The Custodian ensures that the Company complies with the limitations imposed on investment and borrowing powers by the provisions of its constitutional documentation and the appropriate regulations.
Opinion In our opinion, the iShares plc has been managed during the year, in all material aspects: •
In accordance with the limitations imposed on the investment and borrowing powers of the investment company by the memorandum and articles of association and by the European Communities (Undertakings for Collective Investments in Transferable Securities) Regulations 2003 (“the Regulations) and
•
Otherwise in accordance with the provisions of the Memorandum and Articles of Association and the Regulations
The Governor and Company of the Bank of Ireland
Date of approval: 20 June 2008
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iShares plc Annual Report 17
iShares plc INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF iSHARES PLC (the “Company”) We have audited the Company’s financial statements for the year ended 29 February 2008 which comprise the Company Balance Sheet, the Company Profit and Loss Account, the Company Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders, the related Company notes, and the Funds’ Balance Sheets, the Funds’ Profit and Loss Accounts, the Funds’ Statements of Changes in Net Assets Attributable to Redeemable Participating Shareholders, the Funds’ Schedules of Investments and the related Funds’ notes. These financial statements have been prepared under the accounting policies set out therein. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS The Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable Irish law and the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland) are set out in the Statement of Directors’ Responsibilities Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 193 of the Companies Act, 1990 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. We report to you our opinion as to whether the financial statements give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute comprising the Companies Acts, 1963 to 2006 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended). We state whether we have obtained all the information and explanations we consider necessary for the purposes of our audit, and whether the financial statements are in agreement with the books of account. We also report to you our opinion as to: •
whether the Company has kept proper books of account; and
•
whether the Directors’ report is consistent with the financial statements.
We also report to you if, in our opinion, any information specified by law regarding Directors’ remuneration and Directors’ transactions are not disclosed and where practicable, include such information in our report. We read the other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. BASIS OF AUDIT OPINION We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
18 iShares plc Annual Report
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iShares plc Independent Auditors’ Report to the Members of iShares plc (the “Company”) (continued) OPINION In our opinion the financial statements •
give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the Company’s and Funds’ affairs at 29 February 2008 and of their results for the year then ended; and
•
have been properly prepared in accordance with the requirements of the Companies Acts, 1963 to 2006 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended).
We have obtained all the information and explanations we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the Company. The Company’s financial statements are in agreement with the books of account. In our opinion the information given in the Directors' report is consistent with the financial statements. PricewaterhouseCoopers Chartered Accountants Dublin Date of approval: 20 June 2008
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iShares plc Annual Report 19
iShares plc PROFIT AND LOSS ACCOUNT For the year ended 29 February 2008
Notes
2008 £'000s
2007 £'000s
Operating income
3
280,511
Net (losses)/gains on financial assets at fair value through profit or loss
4
(220,672)
629,799
59,839
809,911
Total investment income Operating expenses
5
Net income
180,112
(45,919)
(31,426)
13,920
778,485
(212,976)
(147,311)
Finance costs Distributions to Redeemable Participating Shareholders
6
Interest expense (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(1,598)
(98)
(200,654)
631,076
(11,424)
(7,046)
4,621
4,476
(207,457)
628,506
There are no recognised gains or losses arising in the year other than the decrease in net assets attributable to Redeemable Participating Shareholders dealt within the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS For the year ended 29 February 2008
Notes
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year Notional foreign exchange adjustment**
1(d)
2008 £'000s
2007 £'000s
8,588,796
5,362,111
221,466
(403,204)
(207,457)
628,506
4,072,723
3,897,911
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares
(2,572,542)
(896,528)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
10,102,986
8,588,796
** The Notional Foreign Exchange adjustment arises from the retranslation of the net assets at the beginning of the year using the exchange rate at 29 February 2008. The average rate for the year is applied to the Profit and Loss items. (see note 1 (d)).
BALANCE SHEET As at 29 February 2008
Notes
2008 £'000s
2007 £'000s
Current assets Financial assets at fair value through profit or loss
1(a)
10,026,418
8,511,754
7
380,072
321,431
16
81,064
123,881
10,487,554
8,957,066
1(a)
(1,415)
-
Creditors (amounts falling due within one year)
8
(394,269)
(352,472)
Distributions to Redeemable Participating Shareholders payable
6
-
(25,455)
16
(3,269)
(107)
(398,953)
(378,034)
10,088,601
8,579,032
14,385
9,764
10,102,986
8,588,796
Debtors Cash and bank balances Total current assets Current liabilities Financial liabilities at fair value through profit or loss
Bank overdraft Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid prices) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) The accompanying notes form an integral part of the Financial Statements.
Date of approval: 20 June 2008 20 iShares plc Annual Report
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iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) 1.
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies and estimation techniques applied in
The significant accounting policies adopted by the Company are as follows:
the preparation of these financial statements are set out below. Basis of preparation The financial statements have been prepared in accordance with accounting standards generally accepted in Ireland and Irish statute comprising the Companies Acts, 1963 to 2006, and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003, (as amended). Accounting standards generally accepted in Ireland in preparing Financial Statements giving a true and fair view are those published by the Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board (ASB). The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments held at fair
a) Financial assets and financial liabilities at fair value through profit or loss Valuation of Investments at Fair Value Classification The Company classifies its investments in debt and equity securities, and related derivatives, as financial assets or financial liabilities at fair value through profit or loss. These financial assets and financial liabilities are classified as held for trading or designated by the Board of Directors at fair value through profit or loss at inception. Financial assets and financial liabilities designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Company's documented investment strategy.
value through profit or loss and in accordance with generally accepted accounting principles in the Republic of Ireland.
Recognition/derecognition Purchases and sales of investments are recognised on the trade date
All the Company’s assets and liabilities are held for the purpose of
being the date on which the Company commits to purchase or sell
being traded or are expected to be realised within one year.
the investment. Investments are derecognised when the rights to receive cash flows from the investments have expired or the
The format and certain wordings of the Financial Statements have been
Company has transferred substantially all risks and rewards of
adapted from those contained in the Companies (Amendment) Act
ownership.
1986 and FRS 3, so that, in the opinion of the Directors, they more approximately reflect the nature of the Company's business as an
Measurement
Investment Fund.
Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value. Transaction costs are
The Company has availed of the exemption contained in FRS 1
expensed in the profit and loss statement. Subsequent to initial
(Revised) "Cash Flow Statements" and has not presented a Cash Flow
recognition, all financial assets and financial liabilities at fair value
Statement. The information required by Financial Reporting Standard
through profit or loss are measured at fair value. Gains and losses
No. 1"Cash Flow Statements", to be included in a Cash Flow Statement
arising from changes in the fair value of the financial assets or
and Financial Reporting Standard No. 3 "Reporting Financial
financial liabilities at fair value through profit or loss category are
Performance", to be included in a statement of total recognised gains
presented in the profit and loss account in the period in which they
and losses and a reconciliation of movements in Shareholder's Funds is
arise.
in the opinion of the Directors, contained in the Profit and Loss Account and the Statement of Changes in Net Assets Attributable to
Fair Value Estimation
Redeemable Participating Shareholders from operations on page 20.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives and trading securities) is based on
Adoption of New Accounting Standards
quoted market prices at the balance sheet date. The quoted market
The Company adopted FRS29 “Financial Instruments: Disclosures”
price used for financial assets held by the Company is the current bid
during the year. It is effective for accounting periods commencing on or
price; the appropriate quoted market price for financial liabilities is
after 1 January 2007.
the current asking price.
www.iShares.eu
iShares plc Annual Report 21
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) The fair value of financial instruments that are not traded in an active
Initial margin deposits are made upon entering into future contracts
market (for example, over the counter derivatives) is determined by
and are generally made in cash or cash equivalents. The cash
using valuation techniques. The Company uses a variety of methods
balances held as collateral at the reporting date are included in cash
and makes assumptions that are based on market conditions existing
and bank balances in the Balance Sheet. For further details, see note
at each balance sheet date.
16.
iShares € Corporate Bond iShares € Government Bond 1-3 iShares € Inflation Linked Bond iShares £ Corporate Bond iShares $ Corporate Bond iShares $ Treasury Bond 1-3 iShares AEX iShares DJ Asia/Pacific Select Dividend iShares DJ Euro STOXX Growth iShares DJ Euro STOXX MidCap iShares DJ Euro STOXX Select Dividend iShares DJ Euro STOXX SmallCap iShares DJ Euro STOXX Value iShares FTSE 100 iShares FTSE 250 iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares FTSE/EPRA European Property iShares FTSE UK Dividend Plus iShares FTSE/Xinhua China 25 iShares MSCI Far East ex Japan iShares MSCI Brazil iShares MSCI Eastern Europe iShares MSCI Emerging Markets iShares MSCI Europe ex-UK iShares MSCI Japan iShares MSCI Korea iShares MSCI North America iShares MSCI Taiwan iShares MSCI World iShares S&P 500*
16.45 Irish time 18.00 Irish time 22.00 Irish time 16.15 Irish time 15.00 New York time (Eastern Standard) 22.00 Irish time 17.00 Irish time 16.45 Irish time 18.45 Irish time 17.30 Irish time 17.30 Irish time 17.30 Irish time 18.45 Irish time See note below 16.45 Irish time 17.30 Irish time 17.30 Irish time 18.45 Irish time 17.30 Irish time 16.30 on Dealing Day +1 Irish Time 16.45 on Dealing Day +1 Irish Time 23.00 Irish time 22.15 Irish time 23.00 on Dealing Day +1 Irish Time 17.30 Irish time 16.30 on Dealing Day +1 Irish Time 16.45 on Dealing Day +1 Irish Time 22.15 Irish time 16.45 on Dealing Day +1 Irish Time 22.15 on Dealing Day +1 Irish time See note below
Forward Contracts The Funds of the Company may enter into forward currency contracts. The unrealised gain or loss on open forward currency contracts is calculated by reference to the difference between the contracted rate and the rate to close out the contract. Realised gains or losses include net gains on contracts, which have been settled. Realised gains or losses and changes in unrealised gains or losses are recognised in the Profit and Loss Account in Net Gains/(losses) on financial assets at fair value through profit or loss. b) Equalisation Income equalisation arrangements are applied in the case of Shares in the Company. These arrangements are intended to ensure that the income per share, which is distributed in respect of the distribution period, is not affected by changes in the number of shares in issue during that period. The calculation of equalisation is based on net income and represents the income portion of the price of subscriptions/redemptions of shares. Equalisation income and/or expense amounts are included in note 6 - Finance costs - Distributions to Redeemable Participating Shareholders. c) Income from Investments (i) Dividend Income and Bond Interest Dividends on listed investments at fair value are recognised when the
*Note: The valuation point for this Fund shall be the time of the close of business on the dealing day in the markets relevant for the valuation of the assets and liabilities of the Fund.
securities are declared ex-dividend. Bond interest income is accrued on a daily basis using the effective interest method in accordance with FRS 26. The effective interest method is a method of calculating
Futures Contracts
the amortised cost of a financial asset or financial liability and of
Futures contracts are valued at their fair value by ''marking-to-
allocating the interest income or interest expense over the relevant
market'' the value of the contract at the Balance Sheet date. For open
period. The effective interest rate is the rate that exactly discounts
futures, changes in the value of the contract are recognised in the
estimated future cash payments or receipts throughout the expected
Profit and Loss account in Net gains/(losses) on financial assets at
life of the financial instrument, or a shorter period where appropriate,
fair value through profit or loss. When the contract is closed, the
to the net carrying amount of the financial asset or financial liability.
difference between the proceeds from (or cost of) the closing transactions and the original transaction is recorded in the Balance Sheet in Net Gains/(losses) on financial assets at fair value through profit or loss. 22 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) Income is shown gross of any non-recoverable withholding taxes,
The Profit and Loss Accounts and proceeds from subscriptions and
which is disclosed separately in the Profit and Loss account.
amounts paid on redemptions of Redeemable participating shares
Dividends receivable in relation to securities on loan are
are translated at the average rates prevailing at the date of the
'manufactured dividends' under UK and Irish tax legislation, and no
transactions. The method of translation has no effect on the Net
withholding tax is deducted from such receipts. Any dividend income
Asset Value per share attributable to the individual funds. For rates of
that is UK franked investment income is shown net of any tax credits.
exchange please see note 17 on page 54.
(ii) Deposit Interest
Translation to presentation currency
Deposit interest is recognised as income of the Sub-Fund on an
For the purpose of combining the Financial Statements of the Funds
effective interest basis. When calculating the effective interest rate,
to arrive at Total Company figures (required under Irish Company
the Trust estimates cash flows considering all contractual terms of
Law), the amounts in the Funds' Balance Sheets have been translated
the financial instruments but does not consider future credit losses.
to GBP at the exchange rate ruling at 29 February 2008. The method
The calculation includes all fees paid between parties to the contract
of translation has no effect on the Net Asset Value per share
that are an integral part of the effective interest rate, transaction
attributable to the individual Funds.
casts and all other premiums or discounts. The opening value of the Company has been restated at the exchange (iii) Securities Lending Income
rates ruling at 29 February 2008. The resulting gain of £221,466,000
Certain Funds engage in securities lending whereby income is earned
(2007: (£403,204,000)) is due to the movements in exchange rates
from lending securities owned by the Funds to a number of third-
between 1 March 2007 and 29 February 2008 and the use of average
party borrowers. Securities lending income is accounted for on an
rates as stated in the above paragraph. This is a notional foreign
accruals basis. For further details on securities lending income
exchange adjustment which has no impact on the Net Asset Value of
please see note 15.
the individual Funds.
d) Foreign Currency
e) Distributions
Functional Currency
Distributions payable to holders of Redeemable Participating Shares
Items included in the Company's financial statements are measured
are classified as Finance Costs in the Profit and Loss Account.
using the currency of the primary economic environment in which it operates ("the functional currency"). This is sterling, which reflects
f) Receivables Receivables are non-derivative financial assets with fixed or
the fact that the Company's investor base is located in the United
determinable payments that are not quoted in an active market.
Kingdom.
Receivables are recognised initially at fair value plus transaction costs that are directly attributable to their acquisition origination.
In accordance with FRS 23, the functional currency of the Funds has
They are subsequently measured at amortised cost using the
been re-evaluated by the Directors on the advice of the Manager. The
effective interest method, less provision for impairment.
currencies in which the performance of the Funds are reported to investors are still considered to be the appropriate functional currencies.
The carrying amount of other receivables approximates to their fair values. g) Payables
Foreign Exchange
Payables are recognised initially at fair value and subsequently stated
Transactions denominated in foreign currencies are translated into
at amortised cost, using the effective interest method. The difference
the functional currency at the exchange rate ruling on the date of the
between the proceeds and the amount payable is recognised over the
transaction. The fair value of the investments and other assets and
period of the payable.
liabilities in currencies other than the functional currency of the individual Fund have been translated at the rates of exchange ruling
The carrying amount of payables approximates to their fair values.
at 29 February 2008.
www.iShares.eu
iShares plc Annual Report 23
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) h) Redeemable participating shares
2.
Redeemable participating shares are redeemable at the shareholder's
The Company’s investment activities expose it to the various types of
option and are classified as financial liabilities. The distribution on
risk which are associated with the financial instruments and markets
these preference shares is recognised in the profit and loss account
in which it invests. The following information is not intended to be a
as finance costs. The participating share can be redeemed at any time for cash equal to a proportionate share of the Company's net asset value. The
Financial Risk Management
comprehensive summary of all risks and investors should refer to the Prospectus for a more detailed discussion of the risks inherent in investing in the Company.
participating share is carried at the redemption amount that is payable at the balance sheet date if the shareholder exercised its right to put the share back to the Company.
The Directors of the Company and Manager review quarterly investment
performance
reports
and
receive
a
semi-annual
presentation in person from the Investment Manager covering the The fair value of the financial liability for the redeemable participating
funds’ performance and risk profile during the period. The Investment
shares is the redemption amount per share, calculated as the Net
Manager is also responsible for ensuring that the funds are managed
Asset Value per share less any associated duties and charges and
within the terms of the Funds’ investment guidelines and limits set
any redemption dividend which is payable on the shares redeemed.
out in the Funds’ Prospectus and Supplements.
i) Offsetting financial instruments
The Directors of the Company have delegated the monitoring and
Financial assets and liabilities are offset and the net amount reported
oversight of regulatory, product and operational risk of the Company
in the Balance Sheet when there is a legally enforceable right to
to the Manager. The Directors of the Company have also delegated
offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liabilities simultaneously.
the responsibility of the daily risk management to the key management personnel of the Investment Manager.
j) Cash and other liquid assets Cash and other liquid assets with a maturity of less than 3 months will be valued at their face value with interest accrued.
24 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) Market Risk
Price Risk – Sensitivity analysis
Market risk arises mainly from uncertainty about future prices for
The sensitivity analysis for the Equity Funds, on the next page,
financial instruments held specifically from price, currency and
assumes a change in the market price of the Funds while holding all
interest rate movements. It represents the potential gain or loss the
other variables constant. In practice this is unlikely to occur, and
Company might suffer through holding market positions in the face of
changes in some of the variables may be correlated. In addition, as
price movements.
the sensitivity analysis uses historical data as a basis for determining future events, it does not encompass all possible scenarios,
Price Risk
particularly those that are of an extreme nature. The increase in
Other price risk is the risk that the fair value or future cash flows of a
benchmark indices is based on the movement at 28 February 2007
financial instrument will fluctuate because of changes in market
and 28 February 2008. These movements may be different from the
prices (other than those arising from interest rate risk or currency
long term volatility of the indices.
risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting
As detailed in the table on the next page, the increase in the
similar financial instruments traded in the market.
respective indices at 29 February 2008 and 28 February 2007, with all other variables held constant, would have resulted in an estimated
The Company is exposed to market price risk arising from its
increase in the net assets attributable to holders of redeemable
investments in a wide range of financial assets. By diversifying the
participating shares and in the changes in net assets attributable to
portfolio, the risk that a price change of a particular investment will
holders of redeemable participating shares as follows:
have a material impact on the Company is minimized. The Investment Manager manages the Company’s market risk on a daily basis in accordance
with
the
Company’s
investment
objective.
The
investment objective of the Funds are to provide investors with a total return, taking into account the capital and income returns, which reflect the total returns of the respective benchmarks. The Fund’s performance is correlated to its benchmarks. The correlation of the Funds’ performance against their benchmark is a metric monitored by key management personnel.
25 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) Price Risk- Sensitivity Analysis (continued)
Fund
Benchmark Index
Benchmark Movement *
Change in Net Assets 2008 (‘000)
Change in Net Assets 2007 (‘000)
iShares AEX
AEX® Index
10
€10,689
€6,131
iShares DJ Asia/Pacific Select Dividend iShares DJ Euro STOXX Growth
Dow Jones Asia/Pacific Select Dividend 30 Index Dow Jones EURO STOXX® Large Cap Growth Index TM
2 12
$1,797 €26,504
$1,486 €9,953
iShares DJ Euro STOXX MidCap iShares DJ Euro STOXX Select Dividend
Dow Jones EURO STOXX® Growth Mid Index Dow Jones EURO STOXX Select Dividend® 30 Index
21 26
€35,924 €153,447
€38,168 €157,452
iShares DJ Euro STOXX SmallCap
Dow Jones EURO STOXX® Growth Small Index
20
€32,688
€53,531
iShares DJ Euro STOXX Value iShares FTSE 100
Dow Jones EURO STOXX® Large Cap Index FTSE 100 Index
16 10
€8,060 £163,459
€7,814 £150,425
iShares FTSE 250
FTSE 250 Index
20
£42,015
£64,738
iShares FTSEurofirst 80
FTSEurofirst 80 Index
14
€19,897
€24,455
iShares FTSEurofirst 100
FTSEurofirst 100 Index
11
€9,758
€9,807
iShares FTSE/EPRA European Property Index Fund
FTSE EPRA/NAREIT Europe ex UK Dividend + Index
22
€65,509
€64,399
iShares FTSE UK Dividend Plus
FTSE UK Dividend+ Index
18
£42,883
£41,004
iShares FTSE/Xinhua China 25 iShares MSCI AC Far East ex-Japan
FTSE/Xinhua China 25 Index MSCI AC Far East ex Japan Index TM
30 22
$236,637 $114,552
$301,145 $72,515
iShares MSCI Brazil iShares MSCI Eastern Europe 10/40
MSCI Brazil Index TM MSCI EM Eastern Europe 10/40 Index
61 24
$371,307 $84,910
$123,385 $45,898
iShares MSCI Emerging Markets
MSCI Emerging Markets Index TM
21
$285,663
$168,665
iShares MSCI Europe ex-UK iShares MSCI Japan
MSCI Europe ex-UK Index TM TM MSCI Japan Index
13 15
€32,340 $261,416
€14,571 $339,918
iShares MSCI Korea
MSCI Korea Index TM
12
$19,771
$11,085
iShares MSCI North America
MSCI North America Index TM
4
$14,590
$2,886
iShares MSCI Taiwan
MSCI Taiwan Index TM
18
$50,552
$36,860
iShares MSCI World iShares S&P 500
MSCI World Index S&P 500 Net Total Return Index
16 5
$180,365 $161,369
$83,590 $124,615
* Rounded to the nearest percent
26 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares € Government Bond 1-3
Price Risk- Sensitivity Analysis (continued)
29-Feb-08 An equivalent decrease in the indices, with all other variables held constant, would have decreased the net assets attributable to holders of redeemable shares by the same amount. Based on historic movements and volatilities in these market variables, and management’s knowledge and experience of the financial markets, it
Currency GBP Total
Monetary EUR -
Non Monetary EUR -
Currency Exposure EUR -
Monetary EUR -
Non Monetary EUR 1,342 1,342
Currency Exposure EUR 1,342 1,342
Monetary EUR 31,168 31,168
Non Monetary EUR 48 48
Currency Exposure EUR 31,216 31,216
Monetary EUR 16,511 16,511
Non Monetary EUR -
Currency Exposure EUR 16,511 16,511
Monetary GBP -
Non Monetary GBP -
Currency Exposure GBP -
Monetary GBP (51,821) (51,821)
Non Monetary GBP 402 402
Currency Exposure GBP (51,419) (51,419)
Monetary USD -
Non Monetary USD -
Currency Exposure USD -
Monetary USD (24,236) (24,236)
Non Monetary USD -
Currency Exposure USD (24,236) (24,236)
28-Feb-07
was determined that the movements listed for respective indices were “reasonably possible” over a 12 month period.
Currency GBP Total
(NB: Historical movements are not always indicative of future events
iShares € Inflation Linked Bond
and the movements may differ significantly from the movements
29-Feb-08
disclosed above.) Currency Risk The funds may invest in securities denominated in currencies other
Currency GBP Total
than their functional currency. Consequently, the Funds may be exposed to the risks that the exchange rate of their functional
28-Feb-07
currency relative to other currencies may change in a manner which Funds' assets denominated in foreign currencies. The funds, in line
Currency GBP Total
with their benchmarks, are unhedged and are therefore exposed to
iShares £ Corporate Bond
currency risk. The currency risk that the funds are exposed to is
29-Feb-08
may have a favourable or unfavourable effect on the value of the
described below: Monetary items are units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. Non monetary items are any other assets and liabilities other than monetary ones.
28-Feb-07 Currency EURO Total
iShares € Corporate Bond 29-Feb-08
Currency GBP CHF NOK Total
Currency EURO Total
Monetary EUR 12,046,570 24,978,702 11,582,932 48,608,204
Non Monetary EUR -
Currency Exposure EUR 12,046,570 24,978,702 11,582,932 48,608,204
Monetary EUR 80,997 80,997
Non Monetary EUR -
Currency Exposure EUR 80,997 80,997
iShares $ Corporate Bond 29-Feb-08 Currency GBP Total
28-Feb-07 Currency GBP Total
www.iShares.eu
28-Feb-07 Currency GBP Total
iShares plc Annual Report 27
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares $ Treasury Bond 1-3
iShares DJ Euro STOXX MidCap
The fund had no foreign currency exposure for the year ended 29
29-Feb-08
February 2008 (28 February 2007: Nil) as all assets and liabilities of the fund were held in functional currency.
Currency GBP Total
Monetary EUR -
Non Monetary EUR -
Currency Exposure EUR -
Monetary EUR -
Non Monetary EUR 52,857 52,857
Currency Exposure EUR 52,857 52,857
Monetary EUR 205 205
Non Monetary EUR 44,385 44,385
Currency Exposure EUR 45,040 45,040
Monetary EUR 34 34
Non Monetary EUR 29,020 183,586 212,606
Currency Exposure EUR 34 29,020 183,586 212,640
Monetary EUR (2,082) (2,082)
Non Monetary EUR (7) (7)
Currency Exposure EUR (2,089) (2,089)
Monetary EUR (4,128) (4,128)
Non Monetary EUR 214 5,408 5,622
Currency Exposure EUR (3,914) 5,408 1,494
Monetary GBP 2,133 2,133
Non Monetary GBP 645,776 1,552,728 2,198,504
Currency Exposure GBP 647,909 1,552,728 2,200,637
iShares AEX 29-Feb-08 Currency GBP Total
Monetary USD -
Non Monetary USD 6,627 6,627
Currency Exposure USD 6,627 6,627
Monetary EUR (11,910) (11,910)
Non Monetary EUR -
Currency Exposure EUR (11,910) (11,910)
29-Feb-08 Currency GBP Total
28-Feb-07 Currency GBP Total
iShares DJ Euro STOXX Select Dividend 29-Feb-08 Currency GBP Total
iShares DJ Asia / Pacific Select Dividend 29-Feb-08 Currency AUD EUR HKD JPY NZD SGD Total
28-Feb-07 Monetary USD 268,267 17 268,284
Non Monetary USD 81,350,230 (1) 15,243,016 4,707,685 8,701,296 2,977,624 112,979,850
Currency Exposure USD 81,618,497 16 15,243,016 4,707,685 8,701,296 2,977,624 113,248,134
Currency CHF GBP USD Total
iShares DJ Euro STOXX Value 29-Feb-08
28-Feb-07 Currency AUD EUR GBP HKD JPY NZD SGD Total
Non Monetary USD 62,778,188 12 (1,623) 18,802,434 2,884,631 5,884,558 2,943,462 93,291,662
Currency Exposure USD 62,778,188 (1,042) (164,648) 18,802,434 2,884,630 5,899,598 2,960,782 93,159,943
Monetary EUR -
Non Monetary EUR -
Currency Exposure EUR -
Monetary EUR (10,046) (10,046)
Non Monetary EUR -
Currency Exposure EUR (10,046) (10,046)
Monetary USD (1,054) (163,025) 15,040 17,320 (131,719)
iShares DJ Euro STOXX Growth
Currency GBP Total
28-Feb-07 Currency GBP USD Total
29-Feb-08 Currency GBP Total
28-Feb-07 Currency GBP Total
28 iShares plc Annual Report
iShares FTSE 100 29-Feb-08 Currency EURO USD Total
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares FTSE/EPRA European Property Index Fund
28-Feb-07 Currency EURO USD Total
Monetary GBP 635,596 635,596
Non Monetary GBP 525,412 922,800 1,448,212
Currency Exposure GBP 1,161,008 922,800 2,083,808
Monetary GBP -
Non Monetary GBP -
Currency Exposure GBP -
Monetary GBP (325) (325)
Non Monetary GBP 19,413 19,413
Currency Exposure GBP (325) 19,413 19,088
iShares FTSE 250 29-Feb-08 Currency EURO USD Total
28-Feb-07 Currency EURO USD Total
29-Feb-08 Currency CHF GBP NOK SEK Total
Non Monetary EUR 26,646,314 57,842 2,975,630 (302,899) 29,376,887
Currency Exposure EUR 26,838,575 749 3,006,384 5,240 29,850,948
Non Monetary EUR 17,516,559 188 14,732 1,729,659 35,251,555 54,512,693
Currency Exposure EUR 17,517,697 188 14,732 1,729,495 35,251,555 54,513,667
Monetary GBP -
Non Monetary GBP -
Currency Exposure GBP -
Monetary GBP -
Non Monetary GBP 32 32
Currency Exposure GBP 32 32
Monetary USD (3) (3)
Non Monetary USD 207,773 784,784,737 784,992,510
Currency Exposure USD 207,773 784,784,734 784,992,507
Monetary USD (121) (178,562) (178,683)
Non Monetary USD 82 270,824 997,608,873 997,879,779
Currency Exposure USD (39) 270,824 997,430,311 997,701,096
Monetary EUR 192,261 (57,093) 30,754 308,139 474,061
28-Feb-07 Currency CHF DKK GBP NOK SEK Total
Monetary EUR 1,138 (164) 974
iShares FTSE UK Dividend Plus 29-Feb-08
iShares FTSEurofirst 80 29-Feb-08 Currency GBP USD Total
Monetary EUR -
Non Monetary EUR -
Currency Exposure EUR -
28-Feb-07 Currency GBP USD Total
Monetary EUR 3,680 3,680
Non Monetary EUR 26,279 11,956 38,235
Currency Exposure EUR 29,959 11,956 41,915
Currency EURO USD Total
28-Feb-07 Currency EURO Total
iShares FTSE/Xinhua China 25 29-Feb-08
iShares FTSEurofirst 100 29-Feb-08 Currency GBP USD Total
Monetary EUR 5,787,685 5,787,685
Non Monetary EUR 33,548,676 41,866 33,590,542
Currency Exposure EUR 39,336,361 41,866 39,378,227
28-Feb-07 Currency GBP Total
www.iShares.eu
Monetary EUR 67,028 67,028
Non Monetary EUR 35,247,169 35,247,169
Currency Exposure EUR 35,314,197 35,314,197
Currency GBP HKD Total
28-Feb-07 Currency EURO GBP HKD Total
iShares plc Annual Report 29
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares MSCI AC Far East ex-Japan
28-Feb-07 Non Monetary USD 16,737,291 66,974,416 21,009,497 37,700,999 142,422,203
Currency Exposure USD 16,754,611 66,974,416 21,003,609 37,681,812 142,414,448
Monetary USD 1,302,355 2,363 (141,512) 2,528 4,475,967 9,883 282,031 763,852 792 (590,248) (599,709) 35,242 41,670 19,999 (862) 5,672,633 1,051,723 12,328,707
Non Monetary USD 196,633,704 7,877,448 16,809,783 16,943,077 3 31,182,948 183,382,144 12,163,414 26,938,035 34,364,990 30,701,860 181,630,445 68,031,449 40,741,921 5,314,744 17,882,015 22,327,048 19,705,624 148,238,265 85,649,385 1,146,518,302
Currency Exposure USD 197,936,059 7,877,448 16,812,146 16,801,565 2,531 31,182,948 187,858,111 12,173,297 27,220,066 35,128,842 30,701,860 181,631,237 67,441,201 40,142,212 5,349,986 17,923,685 22,347,047 19,704,762 153,910,898 86,701,108 1,158,847,008
Monetary USD 717,212 72,881 (116,386) (221) 788,038 86,321 116,443 176,274 1,070,303 511,275 184,539 36,491 114,016 6,569 120,672 4,729,763 1,851,514 10,465,704
Non Monetary USD 83,313,356 5,300,593 8,115,205 8,204,425 148,063 58,141,591 88,171,421 9,513,876 12,413,491 24,833,078 19,348,218 121,581,428 49,473,123 25,873,751 3,542,599 12,110,148 11,625,092 12,710,781 98,314,788 66,543,126 719,278,153
Currency Exposure USD 84,030,568 5,300,593 8,188,086 8,088,039 147,842 58,141,591 88,959,459 9,600,197 12,529,934 24,833,078 19,524,492 122,651,731 49,984,398 26,058,290 3,579,090 12,224,164 11,631,661 12,831,453 103,044,551 68,394,640 729,743,857
29-Feb-08 Currency EGP HKD IDR KRW MYR PHP SGD THB TWD Total
Monetary USD 301,151 11,888,888 577,764 (21,493) 757,769 15,070 1,953,711 (22,974) 6,333,050 21,782,936
Non Monetary USD 193,115,959 15,255,739 115,477,255 21,228,086 2,928,779 35,069,655 13,225,739 92,200,344 488,501,556
Currency Exposure USD 301,151 205,004,847 15,833,503 115,455,762 21,985,855 2,943,849 37,023,366 13,202,765 98,533,394 510,284,492
28-Feb-07 Currency EUR GBP HKD IDR KRW MYR PHP SGD THB TWD Total
Monetary USD (18,673) (157,344) 543,269 (6,551) (27,595) 83,531 10,589 257,922 3,439 (724,566) (35,979)
Non Monetary USD 125 (367) 111,475,935 7,809,091 84,998,337 13,908,962 1,947,654 28,817,601 7,189,481 69,029,018 325,175,837
Currency Exposure USD (18,548) (157,711) 112,019,204 7,802,540 84,970,742 13,992,493 1,958,243 29,075,523 7,192,920 68,304,452 325,139,858
Monetary USD 431,814 431,814
Non Monetary USD 614,023,015 614,023,015
Currency Exposure USD 614,844,525 614,844,525
iShares MSCI Brazil 29-Feb-08 Currency BRL Total
Currency CZK GBP HUF PLN Total
iShares MSCI Emerging Markets 29-Feb-08 Currency BRL CLP CZK EGP EUR GBP HKD HUF IDR ILS INR KRW MXN MYR PHP PLN THB TRY TWD ZAR Total
28-Feb-07 Currency
28-Feb-07 Currency BRL GBP Total
Monetary USD 121,159 (95,251) 25,908
Non Monetary USD 203,789,831 960 203,790,791
Currency Exposure USD 203,910,990 (94,291) 203,816,699
iShares MSCI Eastern Europe 10/40 29-Feb-08 Currency CZK EUR HUF PLN RUB Total
Monetary USD (17,385) (17,385)
30 iShares plc Annual Report
Non Monetary USD 33,626,514 74,434,060 27,351,430 59,328,144 7,194,600 201,934,748
Currency Exposure USD 33,609,129 74,434,060 27,351,430 59,328,144 7,194,600 201,917,363
Monetary USD 17,320 (5,888) (19,187) (7,755)
BRL CHL CZK EGP EUR GBP HKD HUF IDR IND ISR KRW MXN MYR PHP PLN THB TRY TWD ZAR Total
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares MSCI North America
iShares MSCI Europe ex-UK
29-Feb-08
29-Feb-08 Monetary EUR 865,375 104,526 255,453 117,867 1,343,221
Currency CHF DKK SEK NOK USD Total
Non Monetary EUR 36,212,658 4,994,867 12,250,561 5,420,604 5,001 58,883,691
Currency Exposure EUR 37,078,033 5,099,393 12,506,014 5,538,471 5,001 60,226,912
28-Feb-07 Monetary EUR (1) 95 2,906 65,872 68,872
Currency CHF DKK SEK NOK Total
Non Monetary EUR 16,504,939 2,033,741 6,150,508 2,154,474 26,843,662
Currency Exposure EUR 16,504,938 2,033,836 6,153,414 2,220,346 26,912,534
29-Feb-08 Monetary USD 1 7,069,073 7,069,074
Non Monetary USD 70,651 1,771,006,083 1,771,076,734
Currency Exposure USD 1 70,651 1,778,075,156 1,778,145,808
Monetary USD 29 117,719,019 117,719,048
Non Monetary USD 333 78,406 2,173,752,056 2,173,830,795
Currency Exposure USD 333 78,435 2,291,471,075 2,291,549,843
Monetary USD 174,451 174,451
Non Monetary USD 167,706,698 167,706,698
Currency Exposure USD 167,881,149 167,881,149
Monetary USD 22,543 22,543
Non Monetary USD 95,594,734 95,594,734
Currency Exposure USD 95,617,277 95,617,277
Currency EURO GBP JPY Total
28-Feb-07 Currency EURO GBP JPY Total
iShares MSCI Korea 29-Feb-08 Currency KRW Total
Non Monetary USD 32,391,200 32,391,200
Currency Exposure USD 32,398,315 32,398,315
Monetary USD 101,711 (82,852) 18,859
Non Monetary USD 4,990,315 723 4,991,038
Currency Exposure USD 5,092,026 (82,129) 5,009,897
Monetary USD (2,001,200) (2,001,200)
Non Monetary USD 289,776,837 289,776,837
Currency Exposure USD 287,775,637 287,775,637
Monetary USD (301,398) (301,398)
Non Monetary USD 98 1,048 206,301,395 206,302,541
Currency Exposure USD 98 1,048 205,999,997 206,001,143
Monetary USD 3,600,006 5,004,312 3,473,668 477,481 18,508,760 19,516,815 1,056,681 1,180,516 568,548 1,113,905 490,008 54,990,700
Non Monetary USD 34,038,580 45,416,130 37,471,996 (478,902) 419,930,100 (19,210,142) 10,948,859 14,819,118 6,102,559 (1,115,212) 4,640,354 552,563,440
Currency Exposure USD 37,638,586 50,420,442 40,945,664 (1,421) 438,438,860 306,673 12,005,540 15,999,634 6,671,107 (1,307) 5,130,362 607,554,140
Currency CAD Total
28-Feb-07 Currency CAD GBP Total
iShares MSCI Taiwan 29-Feb-08 Currency TWD Total
iShares MSCI Japan
Monetary USD 7,115 7,115
28-Feb-07 Currency EUR GBP TWD Total
iShares MSCI World 29-Feb-08 Currency AUD CAD CHF DKK EUR GBP HKD JPY NOK SEK SGD Total
28-Feb-07 Currency KRW Total
www.iShares.eu
iShares plc Annual Report 31
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares € Corporate Bond
28-Feb-07 Currency AUD CAD CHF DKK EUR GBP HKD JPY NOK NZD SEK SGD THB Total
Monetary USD 21,933 12,108 (1,146) (561) 14 1,171 320 1,970,957 827 5,290 95 355,301 1,128 2,367,437
Non Monetary USD 14,200,685 18,595,053 20,406,959 2,314,313 84,855,696 107,277,762 4,174,314 6,773,135 2,315,716 515,509 6,526,987 1,954,117 269,910,246
Currency Exposure USD 14,222,618 18,607,161 20,405,813 2,313,752 84,855,710 107,278,933 4,174,634 8,744,092 2,316,543 520,799 6,527,082 2,309,418 1,128 272,277,683
Currency CHF GBP NOK Total
2008 EUR 1,248,935 602,328 579,147 2,430,410
2007 EUR 4,050 4,050
2008 EUR -
2007 EUR 67 67
Sensitivity Movement % 5%
2008 EUR 1,561 1,561
2007 EUR 826 826
Sensitivity Movement % 5%
2008 EUR 331 331
2007 EUR (596) (596)
2008 EUR -
2007 EUR (502) (502)
2008 EUR -
2007 EUR 2,643 2,643
2008 EUR 2,252 2,252
2007 EUR 2 1,451 9,179 10,632
2008 EUR -
2007 EUR -
2008 EUR (104) (104)
2007 EUR (196) 270 74
iShares € Government Bond 1-3 Currency GBP Total
Sensitivity Movement % 5%
iShares € Inflation Linked Bond Currency GBP Total
iShares S&P 500
Sensitivity Movement % 5% 5% 5%
29-Feb-08 Currency EURO GBP Total
Monetary USD 538 (8) 530
Non Monetary USD (350) (350)
Currency Exposure USD 538 (358) 180
Monetary USD 6,001 466 6,467
Non Monetary USD -
Currency Exposure USD 6,001 466 6,467
iShares AEX Currency GBP Total
28-Feb-07 Currency CAD GBP Total
Currency Risk – Sensitivity analysis The foreign currency sensitivity analysis below is based on a change in one variable while holding all other variables constant. In practice
iShares DJ Euro Stoxx Growth Currency GBP Total
Sensitivity Movement % 5%
iShares DJ Euro STOXX MidCap Currency GBP Total
Sensitivity Movement % 5%
this is unlikely to occur, and changes in some of the assumptions may be correlated – for example, changes in interest rates. In
iShares DJ Euro STOXX Select Dividend
addition, as the sensitivity analysis uses historical data as a basis for determining future events, it does not encompass all possible scenarios, particularly those that are of an extreme nature. The sensitivity movement in the currencies is a standard 5% for less volatile currencies and average of the high and low over the last two years for more volatile currencies. These movements may be different to the long term volatility of the currencies. At 29 February 2008 and 28 February 2007, had the Euro
Currency CHF GBP USD Total
Sensitivity Movement % 5% 5% 5%
iShares DJ Euro STOXX SmallCap Currency GBP Total
Sensitivity Movement % 5%
strengthened by 5% in relation to the major currencies listed in the tables below, assuming no hedging of this position, the net assets
iShares DJ Euro STOXX Value
attributable to redeemable participating shareholders and the change in net assets attributable to holders of redeemable participating shares per the income statement of the funds would have decreased(increased) by the amounts shown below: 32 iShares plc Annual Report
Currency GBP USD Total
Sensitivity Movement % 5% 5%
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares UK Dividend Plus
iShares FTSEurofirst 80 Currency GBP USD Total
Sensitivity Movement % 5% 5%
2008 EUR -
2007 EUR 1,498 598 2,096
Sensitivity Movement % 5% 5%
2008 EUR 1,966,818 2,093 1,968,911
2007 EUR 1,765,710 1,765,710
iShares FTSEurofirst 100 Currency GBP USD Total
Sensitivity Movement % 5% 5%
2008 GBP -
2007 GBP 2 2
Sensitivity Movement % 5% 5%
2008 GBP 32,395 77,636 110,031
2007 GBP 58,050 46,140 104,190
Sensitivity Movement % 5% 5%
2008 GBP -
2007 GBP (16) 971 955
iShares FTSE 100
iShares FTSE/EPRA European Property Index Currency CHF DKK GBP NOK SEK Total
Currency EUR USD Total
Sensitivity Movement % 5% 5% 5% 5% 5%
Currency Euro USD Total
iShares FTSE 250
2008 EUR 1,341,929 37 150,319 262 1,492,547
2007 EUR 875,885 9 737 86,475 1,762,578 2,725,684
Currency Euro USD Total
A weakening of the British Pound against the above currencies would have resulted in an equal but opposite effect on the financial
MSCI Europe Currency CHF DKK NOK SEK USD Total
statement amounts to that shown above, on the basis that all other Sensitivity Movement % 5% 5% 5% 5% 5%
2008 EUR 1,853,902 254,970 276,924 625,301 250 3,011,347
2007 EUR 825,247 101,692 111,017 307,671 1,345,627
variables remain constant. At 29 February 2008 and 28 February 2007, had the US Dollar strengthened by 5% in relation to the major currencies listed in the tables below, assuming no hedging of this position, the net assets attributable to redeemable participating shareholders and the change
A weakening of the Euro against the above currencies would have
in net assets attributable to holders of redeemable participating
resulted in an equal but opposite effect on the financial statement
shares per the Profit and Loss Account of the fund would have
amounts to that shown above, on the basis that all other variables
decreased/(increased) by the amounts shown below:
remain constant. iShares $ Corporate Bond At 29 February 2008 and 28 February 2007, had the British Pound strengthened by 5% in relation to the major currencies listed below in the tables, assuming no hedging of this position, the net assets attributable to redeemable participating shareholders and the change in net assets attributable to holders of redeemable shares per the Profit and Loss Account of the fund would have decreased (increased) by the amounts shown below: iShares £ Corporate Bond Currency EUR Total
www.iShares.eu
Sensitivity Movement % 5%
2008 GBP -
2007 GBP (2,571) (2,571)
Currency GBP Total
Sensitivity Movement % 5%
2008 USD -
2007 USD (1,212) (1,212)
2008 USD 4,080,925 1 762,151 235,384 435,065 148,881 5,662,407
2007 USD 3,138,909 (52) (8,232) 940,122 144,232 294,980 148,039 4,657,998
iShares DJ Asia/Pacific Select Dividend Currency AUD EUR GBP HKD JPY NZD SGD Total
Sensitivity Movement % 5% 5% 5% 5% 5% 5% 5%
iShares plc Annual Report 33
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) IShares MSCI Japan Currency EUR JPY GBP Total
Account of the fund would have decreased by the amounts shown Sensitivity Movement % 5% 5% 5%
2008 2007 USD USD 17 88,903,758 114,573,554 3,533 3,922 88,907,291 114,577,493
IShares MSCI North America Currency CAD GBP Total
Sensitivity Movement % 5% 5%
2008 USD 1,619,916 1,619,916
2007 USD 254,601 (4,106) 250,495
Sensitivity Movement % 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%
2008 USD 1,881,929 2,521,022 2,047,283 (71) 21,921,943 15,334 600,277 799,982 333,555 (65) 256,518 30,377,707
2007 USD 711,131 930,358 1,020,291 115,688 4,242,786 5,363,947 208,732 437,205 115,827 26,040 326,354 115,471 56 13,613,886
2008 USD 10,389 39,239,237 39,249,626
2007 USD (2) 13,541 49,871,516 49,885,055
IShares MSCI World Currency AUD CAD CHF DKK EUR GBP HKD JPY NOK NZD SEK SGD THB Total
iShares FTSE/Xinhua China 25 Currency EUR GBP HKD Total
Sensitivity Movement % 5% 5% 5%
below: iShares MSCI AC Far East ex Japan Currency EUR EGP GBP HKD IDR KRW MYR PHP SGD THB TWD Total
have resulted in an equal but opposite effect on the financial statement amounts to that shown above, on the basis that all other variables remain constant. Based on historic movements and volatilities in these currencies, and management’s knowledge and experience of the financial markets, the was determined that a 5% increase in the value of the Euro, the British Pound, and the US Dollar, is “reasonably possible” over a 12 month period. At 29 February 2008 and 28 February 2007, had the US Dollar strengthened in relation to the currencies listed in the tables below, assuming no hedging of this position, the net assets attributable to
2008 2007 USD USD (927) 24,092 (7,886) 10,250,242 5,600,960 1,583,350 780,254 11,545,576 8,497,074 18,468,118 11,753,694 765,401 509,143 1,851,168 1,453,776 3,564,747 1,942,088 7,882,672 5,464,356 55,935,366 35,992,532
Sensitivity Movement % 38% 5%
2008 2007 USD USD 233,492,835 77,078,354 (4,715) 233,492,835 77,073,639
iShares MSCI Brazil Currency BRL GBP Total
iShares MSCI Eastern Europe 10/40 Currency CZK EUR GBP HUF PLN RUB Total
Sensitivity Movement % 38% 5% 5% 29% 33% 18%
2008 2007 USD USD 12,771,469 6,366,752 3,721,703 3,348,721 7,931,915 6,091,047 19,578,288 12,434,998 1,295,028 45,298,403 28,241,518
iShares MSCI Emerging Markets Currency
A weakening of the US Dollar against the above currencies would
Sensitivity Movement % 5% 8% 5% 5% 10% 10% 84% 26% 5% 27% 8%
BRL CLP CZK EGP EUR GBP HKD HUF IDR ILS INR KRW MXN MYR PHP PLN THB TRY TWD ZAR Total
Sensitivity Movement % 38% 16% 38% 8% 5% 5% 5% 29% 10% 21% 16% 10% 10% 84% 26% 33% 27% 35% 8% 26%
2008 USD
2007 USD
75,215,702 31,931,616 1,260,392 848,095 6,388,615 3,111,473 14,113,315 647,043 127 7,392 1,559,147 2,907,080 9,392,906 4,447,973 3,530,256 2,784,057 2,722,007 1,252,993 7,377,057 4,100,143 4,912,298 3,973,292 18,163,124 12,265,173 6,744,120 4,998,440 33,719,458 21,888,964 1,390,996 930,563 5,914,816 4,033,974 6,033,703 3,140,548 6,896,667 4,491,009 12,312,872 8,243,564 22,542,288 17,782,606 240,189,866 133,785,998
redeemable participating shareholders and the change in net assets attributable to holders of redeemable shares per the Profit and Loss 34 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares MSCI Korea Currency KRW Total
prices of these investments are derived from movements in market Sensitivity Movement % 10%
2008 USD 16,788,115 16,788,115
2007 USD 9,561,728 9,561,728
interest rates and issuer credit-worthiness. Issuer credit worthiness and credit spreads are monitored by the Investment Manager regularly. The securities in which the Funds invest will generally have a minimum rating from a ratings agency as set out in the Investment
iShares MSCI Taiwan Currency EUR GBP TWD Total
Sensitivity Movement % 5% 5% 8%
2008 2007 USD USD 5 52 23,022,051 16,480,000 20,719,846 16,480,057
policy of the Funds. Due to the high credit-worthiness of the bonds in these funds, the Investment Manager believes this risk to be very low to the Bond Funds over the next year and, thus, there is no sensitivity analysis disclosed for price risk. Interest rate risk is deemed material to these Funds and is discussed further with a sensitivity analysis below.
iShares MSCI S&P 500 Currency CAD GBP Total
Sensitivity Movement % 5% 5%
2008 USD 27 (18) 9
2007 USD 300 23 323
Interest Rate Risk- Sensitivity Analysis The sensitivity analysis below is based on a change in one variable while holding all other variables constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated
A weakening of the US Dollar against the above currencies would
– for example, change in foreign currency rate and change in market
have resulted in an equal but opposite effect on the financial
values. In addition, as the sensitivity analysis uses historical data as a
statement amounts to that shown above, on the basis that all other
basis for determining future events, it does not encompass all
variables remain constant.
possible scenarios, particularly those that are of an extreme nature.
Based on historic movements and volatilities in these currencies, and
Although the movements in interest rates drive the value the Bond
management’s knowledge and experience of the financial markets, it
funds, as listed below, the performance of the Funds move in line
was determined that the increase in the value of the above-
with the benchmarks. Management manage the fund in line with its
mentioned currencies are ‘reasonably possible’ over a 12 month
benchmark rather than specifically managing interest rate risk. The
period.
sensitivity analysis below for the Bond Funds, assumes that a change in the interest rate of the Funds while holding all other variables
(NB: Historical movements are not always indicative of future events
constant. In practice this is unlikely to occur, and changes in some of
and the movements may differ significantly from the movements
the variables may be correlated.
disclosed above.)
analysis uses historical data as a basis for determining future events,
In addition, as the sensitivity
it does not encompass all possible scenarios, particularly those that Interest Rate Risk
are of an extreme nature. As detailed in the table below, the increase
Interest rate risk is the risk that the fair value or future cash flows of
in the respective indices at 29 February 2008 and 28 February 2007,
a financial instrument will fluctuate because of changes in market
with all other variables held constant, would have increased the net
interest rates.
assets attributable to holders of redeemable shares and the changes in net assets attributable to holders of redeemable participating
All of the funds are exposed to interest rate risks from cash balances
shares by the following:
held with The Governor and Company of the Bank of Ireland. The interest rate for those cash accounts, that earn interest, ranges from 1.9% to 4.5% (28 February 2007: 1.1% to 5.6%). The Bond Funds, as listed in the table below, are exposed to interest rate risk through their investments in corporate and government bonds where the value of these securities may fluctuate as a result of a change in interest rates. The investments exposed to interest rate
Fund iShares € Corporate Bond iShares € Inflation Linked Bond
Benchmark Index
Movement in Benchmark
Change in Change in net assets net assets 2008 2007 ('000) ('000)
iBoxx Euro Liquid Corporates Index
1%
€6,452
€8,715
Barclays Euro Government Inflation Linked Bond Index
1%
€3,147
€1,101
risk are detailed on the schedule of investments. Movements in the www.iShares.eu
iShares plc Annual Report 35
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued)
Fund iShares € Government Bond 1-3 iShares $ Corporate Bond iShares £ Corporate Bond iShares $ Treasury Bond 1-3
Benchmark Index Barclays Euro Government Bond 1-3 Term Index iBoxx $ Liquid Investment Grade Index iBoxx £ Liquid Corporates Long Dates Year Index Barclays US Treasury 1-3 yr Term Index
Movement in Benchmark
Change in Change in net assets net assets 2008 2007 ('000) ('000)
1%
€1,421
€881
2%
$2,248
$1,925
1%
£1,945
£2,075
1%
$1,170
$1,268
PLC, a related party. The Company is exposed to credit risk through the use of the BOI for its cash and investments. Bankruptcy or insolvency of the banks may cause the Company’s rights with respect to its cash and investments in debt and equity securities held by the bank to be delayed or limited. The maximum exposure to this risk at 28 February 2007 and 29 February 2008 is the cash amounts disclosed in note 16 and the investments in collective investment schemes, securities, liquidity instruments and forwards as disclosed
A decrease in the benchmark index would have resulted in an equal but opposite effect on the financial statement amounts to that shown above, on the basis that all other variables remain constant. Based on historic movements and volatilities in these market variables, and management’s knowledge and experience of the financial markets, it was determined that the increases in the benchmarks above are ‘reasonably possible’ over a 12 month period. With the exception of the Funds disclosed above, no other Funds had any fixed rate interest bearing financial assets. (NB: Historical movements are not always indicative of future events and the movements may differ significantly from the movements disclosed above.) Credit Risk Credit risk is monitored and managed by a formal counterparty exposure management program within the Investment Manager, the Global Credit Group (“GCG”). General credit policies and procedures are established by the Global Risk and Compliance Committee. This program includes counterparty credit analysis and evaluation establishing and managing trade lines and the ongoing monitoring of the credit quality of counterparties. GCG reviews and approves certain types of transactions entered into by the funds on the basis of a counterparty’s ability to meets its obligations. GCG completes a formal review of each new counterparty. In addition, in accordance with the investment restrictions as described in the Offering Memorandum, the Funds may not invest more than 10% of their net assets in a single issuer, unless it is guaranteed by EU member state. The Company’s custodian is The Governor and Company of the Bank of Ireland (BOI). Substantially all of the cash, certificates of deposit and investments in debt and equities securities of the Funds are held by BOI at year end, with the exception of cash held as collateral with 36 iShares plc Annual Report
the counterparty for futures contract that is held with Barclays Bank
in the Schedules of Investments. To mitigate the risks the Company is exposed to from the use of the Custodian, the Investment Manager employs appropriate procedures to ensure that the counterparties are reputable institutions and that the credit risk is acceptable to the Company. The Company only transacts with custodians that are regulated entities subject to prudential supervision, or with high credit-ratings assigned by international credit-rating agencies. In addition, with the exception of cash, the Company's securities are maintained by the Custodian in segregated accounts. Thus, in the event of insolvency or bankruptcy of the Custodian, the Funds' securities are segregated and protected and this further reduces counterparty risk. Credit risk arising on transactions with brokers relates to transactions
awaiting
settlement. Risk relating
to
unsettled
transactions is considered small due to the short settlement period involved and the high credit quality of the brokers used. The Company monitors the credit rating and financial positions of the brokers used to further mitigate this risk. Certain funds invest into corporate bonds. This exposes the Funds to risk that the issuer of the bonds may default on interest or principal payments. To manage this risk, the Investment Manager monitors the external rating agency credit ratings of the investments. As described in price risk, these Funds only invest in highly rated instruments as dicated by the index they track. The ratings of the corporate bonds held are disclosed in the Schedule of Investments of the respective Funds. Certain funds invest into future contracts which expose the Funds to counterparty risk should they default. The maximum credit exposure to these counterparties equals the unrealised gain on the contracts as at 29 February 2008 and 28 February 2007 as disclosed in note 4 of the Funds’ financial statements. Although the Investment Manager employs appropriate procedures to ensure that the counterparties are reputable institutions and that the credit risk to the fund is www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) acceptable, the Funds may incur a loss if a counterparty were to
These reports allow them to manage their cash obligations.
default on its obligations. However, the Funds mitigate much of this risk by receiving collateral with a value at least equal to the exposure
The following table details the Company’s liquidity analysis for its
to the counterparty. Subject to the minimum transaction limits, it is
financial liabilities. The tables have been drawn up based on the
intended that the level of collateral is updated on each business day.
undiscounted gross cash outflows for outflows which settle gross and
Cash held in a segregated account as collateral with the counterparty
undiscounted net cash outflows for cash outflows which settle net on
to derivative contracts, Barclays Bank PLC, is disclosed in note 16.
its financial liabilities for the following periods. All amounts are stated in '000s, and are in the functional currency of the Fund in question.
Additionally, certain funds engage in securities lending activities which expose the Funds to credit risk. The maximum exposure to each Fund is equal to the value of the securities loaned at 29 February 2008 and 28 February 2007 as described in note 15. To mitigate this risk, the Funds take collateral which is in excess of the value of the securities loaned as disclosed in note 15. There were no past due or impaired assets as of 29 February 2008. (2007:£nil). Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The main liquidity risk to the Company arises from the redemption requests of its investors. The Company’s shareholders may redeem their shares on any business day for cash equal to a proportionate share of the Fund’s net asset value and it is therefore exposed to the liquidity risk of meeting the daily redemptions by its shareholders. To manage this risk, shareholders redemptions will only be settled by the fund, 3 or 4 days after a shareholder notifies the Company of its intended redemption. In addition, redemptions are only normally accepted in multiples of the minimum amount for the respective funds and thus minimises the occurrence of redemptions. If redemption requests on any business day represent 10% or more of the shares in issue in respect of any Fund, the Company may defer the excess redemption request to subsequent dealing days and shall redeem such shares prorata. Any deferred redemption request shall be treated in priority to any redemption request received on subsequent business days. In any event, settlement on redemption will be made within fourteen days of the day on which the redemption request is made. The Company’s liquidity risk is managed by investing in highly liquid assets and on a daily basis by the Investment Manager in accordance with policies and procedures in place. The portfolio managers review daily forward looking cash reports which project cash obligations. www.iShares.eu
iShares plc Annual Report 37
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares € Corporate Bond 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
Less than 1 month 154,660
1-3 months -
3 months to 1 year
Greater than 1 year -
Total 154,660
620,594
24,615
-
-
645,209
Less than 1 month 307,922
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 307,922
838,213
33,247
-
-
871,460
Less than 1 month 101,827
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 101,827
302,731
12,008
-
-
314,739
Less than 1 month 1,318
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 1,318
105,924
4,021
-
-
110,125
Less than 1 month 487
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 487
136,580
5,421
-
-
142,001
Less than 1 month 1,486
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 1,486
84,764
3,362
-
-
88,126
Less than 1 month 39,214
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 39,214
187,043
7,419
-
-
194,462
Less than 1 month 35,154
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 35,154
199,596
7,916
-
-
207,512
Less than 1 month 22,940
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 22,940
108,124
4,288
-
-
112,412
iShares € Inflation Linked Bond 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares € Government Bond 1-3 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares £ Corporate Bond 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares $ Corporate Bond 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
38 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares $ Corporate Bond (cont) 1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
Less than 1 month 7,259
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 7,259
92,559
3,670
-
-
96,229
Less than 1 month 19,818
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 19,818
112,547
4,465
-
-
117,012
Less than 1 month 9,432
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 9,432
121,957
4,837
-
-
126,794
Less than 1 month 30 102 98,519
1-3 months 3,908
3 months to 1 year -
Greater than 1 year -
Total 30 102 102,427
Less than 1 month 42
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 42
56,489
2,240
-
-
58,729
Less than 1 month 65
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 65
109,217
4,333
-
-
113,550
Less than 1 month 699
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 699
90,093
3,574
-
-
93,667
Less than 1 month 98
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 98
221,780
8,796
-
-
230,576
Less than 1 month 6,230
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 6,230
83,156
3,298
-
-
86,454
iShares $ Treasury Bond 1-3 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares AEX 1 March 2007 to 29 February 2008 Other payables Bank overdraft Net assets attributable to redeemable shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares DJ Asia/Pacific Select Dividend 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares DJ Euro STOXX Growth 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
www.iShares.eu
iShares plc Annual Report 39
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares DJ Euro STOXX MidCap 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
Less than 1 month 72
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 72
164,260
6,515
-
-
170,775
Less than 1 month 690
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 690
174,205
6,909
-
-
181,114
Less than 1 month 242
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 242
568,116
22,534
-
-
590,650
Less than 1 month 14,979
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 14,979
582,574
23,108
-
-
605,682
Less than 1 month 68
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 68
155,690
6,175
-
-
161,865
Less than 1 month 308
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 308
254,572
10,097
-
-
264,669
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
12 55
-
-
-
12 55
47,995
1,904
-
-
49,899
Less than 1 month 33
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 33
46,433
1,841
-
-
48,274
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
1,288 649
-
-
-
1,288 649
1,554,322
61,653
-
-
1,615,975
iShares DJ Euro STOXX Select Dividend 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares DJ Euro STOXX SmallCap 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares DJ Euro STOXX Value 1 March 2007 to 29 February 2008 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares FTSE 100 1 March 2007 to 29 February 2008 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares 40 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares FTSE 100 (cont) 1 March 2006 to 28 February 2007 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
216 5,635
-
-
-
216 5,635
1,430,242
56,731
-
-
1,486,973
Less than 1 month 212 9
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 212 9
Greater than 1 year -
208,061
iShares FTSE 250 1 March 2007 to 29 February 2008 Other payables Bank overdraft Net assets attributable to redeemable participating shares 1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
200,125 Less than 1 month 893
7,936 1-3 months -
3 months to 1 year -
308,384
12,232
-
-
320,616
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
132 57
-
-
-
132 57
133,849
5,309
-
-
139,158
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
11 68
-
-
-
11 68
164,189
6,511
-
-
170,700
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
43 36
-
-
-
43 36
84,952
3,369
-
-
88,321
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
18 35
-
-
-
18 35
85,276
3,381
-
-
88,657
Less than 1 month 3,031
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 3,031
283,167
11,231
-
-
294,398
Total 893
iShares FTSEurofirst 80 1 March 2007 to 29 February 2008 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares
iShares FTSEurofirst 100 1 March 2007 to 29 February 2008 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares
iShares FTSE/EPRA European Property Index 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
www.iShares.eu
iShares plc Annual Report 41
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares FTSE/EPRA European Property Index (cont) 1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
Less than 1 month 391
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 391
278,286
11,038
-
-
289,324
Less than 1 month 98 169
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 98 169
231,935
9,200
-
-
241,135
Less than 1 month 1,505
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 1,505
221,631
8,792
-
-
230,423
Less than 1 month 561 345 755,372
1-3 months 29,962
3 months to 1 year -
Greater than 1 year -
Total 561 345 785,334
Less than 1 month 956
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 956
960,502
38,098
-
-
998,600
Less than 1 month 28,120 1,350
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 28,120 1,350
497,020
19,714
-
-
516,734
Less than 1 month 3,061
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 3,061
314,400
12,469
-
-
326,869
Less than 1 month 10,135 2,031
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 10,135 2,031
588,810
23,355
-
-
12,165
Less than 1 month 2,144
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 2,144
195,852
7,767
-
-
203,619
iShares FTSE UK Dividend Plus 1 March 2007 to 29 February 2008 Other payables Bank overdraft Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares FTSE/Xinhua China 25 1 March 2007 to 29 February 2008 Other payables Bank overdraft Net assets attributable to redeemable shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares MSCI AC Far East ex-Japan 1 March 2007 to 29 February 2008 Other payables Bank overdraft Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares MSCI Brazil 1 March 2007 to 29 February 2008 Investments in swaps Bank overdraft Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
42 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares MSCI Eastern Europe 10/40 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
Less than 1 month 4,149
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 4,149
337,041
13,368
-
-
350,409
Less than 1 month 10,586
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 10,586
182,244
7,229
-
-
189,473
Less than 1 month 7,145
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 7,145
1,290,080
51,171
-
-
1,341,251
Less than 1 month 12,731
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 12,731
761,604
30,208
-
-
791,812
Less than 1 month 5,362
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 5,362
233,958
9,280
-
-
243,238
Less than 1 month 291
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 291
105,162
4,171
-
-
109,333
Less than 1 month 10,183 794
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 10,183 794
1,712,913
67,942
-
-
1,780,855
Less than 1 month 147,635
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 147,635
2,230,774
88,484
-
-
2,319,258
Less than 1 month 1,376 1,474
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 1,376 1,474
162,718
6,454
-
-
169,172
iShares MSCI Emerging Markets 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares MSCI Europe ex-UK 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares MSCI Japan 1 March 2007 to 29 February 2008 Other payables Bank overdraft Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares MSCI Korea 1 March 2007 to 29 February 2008 Other payables Bank overdraft Net assets attributable to redeemable participating shares
www.iShares.eu
iShares plc Annual Report 43
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares MSCI Korea (cont) 1 March 2006 to 28 February 2007 Other payables Bank overdraft Net assets attributable to redeemable participating shares
Less than 1 month 829 104
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 829 104
90,886
3,604
-
-
94,490
Less than 1 month 145
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 145
371,385
14,730
-
-
386,115
Less than 1 month 318
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 318
73,483
2,913
-
-
76,396
Less than 1 month 9,428
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 9,428
271,924
10,785
-
-
282,709
Less than 1 month 6,248 105
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 6,248 105
198,524
7,874
-
-
206,398
Less than 1 month 102,816
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 102,816
1,094,838
43,427
-
-
1,138,265
Less than 1 month 4,356
1-3 months -
3 months to 1 year -
Greater than 1 year -
Total 4,356
507,129
20,115
-
-
527,244
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
87 83,628
-
-
-
87 83,628
3,056,142
121,223
-
-
3,177,365
Less than 1 month
1-3 months
3 months to 1 year
Greater than 1 year
Total
178 8,022
-
-
-
178 8,022
2,360,709
93,637
-
-
2,454,346
iShares MSCI North America 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares MSCI Taiwan 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Bank overdraft Net assets attributable to redeemable participating shares
iShares MSCI World 1 March 2007 to 29 February 2008 Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Other payables Net assets attributable to redeemable participating shares
iShares S&P 500 1 March 2007 to 29 February 2008 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares
1 March 2006 to 28 February 2007 Financial liabilities at fair value through profit or loss Other payables Net assets attributable to redeemable participating shares 44 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) Statement of Investments Summary As at 29 February 2008 iShares € Corporate Bond EUR (‘000) Australia European Union Hong Kong Japan New Zealand Norway Singapore Switzerland United Kingdom United States
European Union Norway Switzerland United Kingdom Futures Contracts
Brazil Chile Czech Republic Egypt European Union Hong Kong Hungary India Indonesia Israel Japan Malaysia Mexico Norway Phillippines Poland
www.iShares.eu
308,581 308,581
iShares £ Corporate Bond GBP (‘000) 189,040 189,040
iShares DJ Euro STOXX Select Dividend EUR (‘000) 568,696 568,696
iShares DJ Euro STOXX Small Cap EUR (‘000) 161,294 161,294
iShares DJ Euro STOXX Value GBP (‘000) 49,580 (12) 49,568
iShares FTSE 100 GBP (‘000) 1,594,841 (1,228) 1,593,613
iShares FTSE/Xinhua 25 USD (‘000) 784,785 -
iShares MSCI AC Far East ex-Japan USD ('000) 204,559 15,883 22,369 3,091 -
iShares MSCI Brazil USD ('000) 610,584 -
iShares MSCI Eastern Europe 10/40 USD ('000) 33,627 74,434 27,351 59,328
582,924 11,583 24,979 11,975 631,461
iShares € Gvt Bond 1-3 EUR (‘000) 140,072 140,072
iShares DJ EURO STOXX Midcap EUR (‘000) 170,326 170,326
iShares FTSE UK Dividend Plus EUR (‘000) -
iShares € Inflation Linked Bond EUR (‘000)
iShares $ Corporate Bond USD (‘000) 111,099 111,099
iShares Treasury Bond 1-3 USD (‘000) 115,989 115,989
IShares AEX EUR (‘000) 102,346 102,346
iShares DJ Asia/Pacific Select Dividend USD (‘000) 80,778 15,243 4,707 8,592 2,978 112,298
iShares FTSE 250 GBP (‘000) 207,705 207,705
iShares FTSE Eurofirst 80 EUR (‘000) 137,750 (132) 137,618
iShares FTSE Eurofirst 100 EUR (‘000) 87,670 (43) 87,627
iShares FTSE/EPRA European Property Index EUR (‘000) 263,960 3,006 26,842 293,808
iShares MSCI Japan USD ('000) 1,776,716 -
iShares MSCI Korea USD ('000) -
iShares MSCI Emerging Markets USD ('000) 195,316 7,877 16,810 16,943 187,858 12,163 30,702 26,343 34,365 40,696 67,463 5,302 17,882
iShares MSCI Europe ex-UK EUR ('000) 200,704 5,358 -
iShares DJ STOXX EURO Growth EUR (‘000) 230,198 230,198
iShares plc Annual Report 45
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) Statement of Investments Summary (cont) As at 29 February 2008 (cont)
Russia Singapore South Africa South Korea Switzerland Taiwan Thailand Turkey United Kingdom United States
Australia Canada European Union Hong Kong Japan Norway Singapore Switzerland Taiwan United States Futures Contracts Forward Currency Contracts
iShares FTSE UK Dividend Plus GBP (‘000) 240,548 240,548
iShares MSCI AC Far East ex-Japan USD ('000) 37,011 119,392 96,313 13,948 2,014 514,580
iShares DJ Euro Dividend EUR (‘000) 784,785
iShares MSCI Brazil USD ('000) 610,584
iShares MSCI NorthAmerica USD (‘000) 32,360 353,439 -
iShares MSCI Taiwan USD ('000) 289,784 -
iShares MSCI World USD ('000) 37,250 50,347 437,300 12,007 16,009 6,672 5,127 40,923 529,435 (137)
iShares S&P 500 USD ('000) 3,169,841 (87)
384,799
289,784
6 1,134,939
3,169,754
iShares MSCI Eastern Europe 10/40 USD ('000) 7,194 148,377 350,311
iShares MSCI Emerging Markets USD ('000) 85,642 180,187 148,238 22,292 19,706 31,150 189,522 1,336,457
iShares MSCI Europe ex-UK EUR ('000) 36,213 242,275
iShares MSCI Japan USD ('000) 1,776,716
iShares MSCI Korea USD ('000) 167,698 168,246
IShares AEX EUR (‘000)
iShares DJ Asia/Pacific Select Dvidend USD (‘000)
iShares DJ Euro STOXX Growth EUR (‘000)
58,701
62,311 -
86,433
As at 28 February 2007 iShares € Inflation Linked Bond EUR (‘000)
iShares € Corporate Bond EUR (‘000)
iShares € Government Bond 1-3 EUR (‘000)
856,536
89,974
Hong Kong
-
-
18,802
Japan New Zealand
-
-
2,885 5,815
Norway Singapore
-
-
2,915 -
Switzerland
-
-
United Kingdom United States
-
-
856,536
89.974
Australia European Union
46 iShares plc Annual Report
iShares € Corporate Bond GBP (‘000)
iShares $ Corporate Bond USD (‘000)
iShares $ Treasury Bond 1-3 EUR (‘000)
108,697
203,075
108,697
203,075
94,900
125,604
94,900
125,604
58,701
92,756
86,433
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) Statement of Investments Summary (cont) As at 28 February 2007 iShares FTSE/EPRA European Property Index EUR (‘000) 269,830
iShares DJ Euro STOXX Midcap EUR (‘000) 180,982
iShares DJ Euro STOXX Select Dividend EUR (‘000) 604,277
iShares DJ Euro STOXX Small Cap EUR (‘000) 263,849
iShares DJ Euro STOXX Value GBP (‘000) 48,288
iShares FTSE 100 GBP (‘000) -
Norway
-
-
-
-
Switzerland United Kingdom
-
-
-
-
Futures Contracts
-
-
-
-
(216)
-
(11)
(18))
-
1,444,489
319,995
167,712
87,694
289,076
iShares MSCI Japan USD ('000) -
iShares MSCI Korea USD ('000) -
-
-
-
-
-
-
-
-
-
-
European Union
180,982 iShares FTSE UK Dividend Plus GBP (‘000)
604,277
263,849
48,288
iShares MSCI AC Far East ex-Japan USD ('000) -
iShares MSCI Brazil USD ('000) 203,076
iShares FTSE 250 GBP (‘000) -
IShares FTSE Eurofirst 80 EUR (‘000) 167,723
iShares FTSE Eurofirst 100 EUR (‘000) 87,712
-
-
-
-
1,730
1,44,705
319,995
-
-
17,516 -
5,301
iShares MSCI Europe ex-UK EUR ('000) -
16,738
8,186
-
-
-
8,235
111,580
-
-
88,957
-
20,329
9,598
-
7,867
-
-
24,833 12,523
-
-
-
-
-
-
19,499 -
-
2,310,398
14,739
-
-
26,089
-
-
-
-
49,900
-
-
-
2,483
-
-
Brazil
-
Chile
-
iShares FTSE/Xinhua China 25 USD (‘000) -
Czech Republic
-
-
-
-
Egypt
-
-
-
European Union Hong Kong
-
-
Hungary
-
997,510 -
India Indonesia
-
Israel Japan Malaysia
IShares MSCI Eastern Europe 10/40 USD ('000) -
iShares MSCI Emerging Markets USD ('000) 81,669
90,261
-
-
Mexico
-
-
Norway
-
-
-
Phillippines
-
-
2,109
-
-
3,570
-
-
-
-
-
-
34,460
12,168
-
-
-
iShares MSCI Emerging Markets USD ('000) 68,373
iShares MSCI Europe ex-UK EUR ('000) -
iShares MSCI Japan USD ('000) -
iShares MSCI Korea USD ('000) -
Poland
iShares FTSE UK Dividend Plus EUR (‘000) -
-
iShares MSCI AC Far East ex-Japan USD ('000) 28,805 -
iShares MSCI Brazil USD ('000) -
iShares MSCI Eastern Europe 10/40 USD ('000) -
-
iShares DJ Euro Dividend EUR (‘000) -
South Korea
-
-
81,955
-
-
120,611
-
-
94,410
Switzerland Taiwan
-
-
69,336
-
-
99,136
16,505 -
-
-
Thailand
-
-
7,473
-
-
11,712
-
-
-
-
-
-
-
12,824
-
-
-
229,996 -
-
2,005
-
66,862 50,515
58,140 65,444
-
-
-
229,996
997,510
325,869
203,076
188,904
786,768
109,249
2,310,398
94,410
Singapore South Africa
Turkey United Kingdom United States
www.iShares.eu
-
iShares plc Annual Report 47
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) Statement of Investments Summary (cont) As at 28 February 2007 (cont) iShares MSCI NorthAmerica USD (‘000)
iShares MSCI Taiwan USD ('000)
iShares MSCI World USD ('000)
iShares S&P 500 USD ('000)
Australia
-
-
14,146
-
5,082
-
18,312
-
European Union
-
-
200,684
-
Hong Kong
-
-
4,174
-
Japan
-
-
8,726
-
New Zealand Norway
-
-
509 2,316
-
Singapore
-
-
2,287
-
Switzerland
-
-
20,407
-
Taiwan
-
206,471
-
-
United States
71,124
-
254,755
2,450,364
Futures Contracts
76,206
206,471
526,316
(178) 2,450,186
Canada
48 iShares plc Annual Report
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) 3.
OPERATING INCOME 2008 £'’000s 218,463 49,454 7,349 4,875 371 280,511
Dividends income Bond income Securities lending income Interest income Other income Operating income
4.
2007 £'’000s 132,278 41,424 3,568 2,713 129 180,112
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Net fair value gains on sale of investments Net change in fair value (depreciation)/ appreciation on investments Fair value currency gains Net fair value (losses)/gains on sale of futures contracts Net change in fair value on futures Net fair value gains on forwards Net (losses)/gains on financial assets at fair value through profit or loss
5.
2008 £'’000s 468,195
2007 £'’000s 147,236
(687,927) 525
480,539 595
(336) (1,143) 14
2,447 (1,018) -
(220,672)
629,799
2008 £'’000s 45,919
2007 £'’000s 31,426
OPERATING EXPENSES
Management fees
Pay date October November December January February March* Equalisation Income Equalisation expense
For further details of Management fee charges see note 10. 6.
FINANCE
COSTS
–
DISTRIBUTIONS
TO
REDEEMABLE
2007 £'’000s 193 200 28,123 2,110 245 25,455 149,325 (10,037) 8,023 147,311
2008 £'’000s 18,692 19,220 432 117 194,334 147,200 77 380,072
2007 £'’000s 11,696 16,227 411 1,713 260,326 31,058 321,431
*Outstanding at year end .
7.
DEBTORS
Dividends receivable Bond income receivable Securities lending income receivable Interest income receivable Sales of securities awaiting settlement Subscriptions awaiting settlement Sundry debtors Debtors
8.
CREDITORS (amounts falling due within one year)
Included in expenses are audit fees of GBP231,059 (2007: GBP228,575) and directors fees of GBP99,102 (2007: GBP94,368)
2008 £'’000s 246 298 44,631 3,617 34,468 220,778 (15,997) 8,195 212,976
Accrued expenses Purchases of securities payable awaiting settlement Redemptions awaiting settlement Interest expense payable Creditors
2008 £'’000s 4,613 385,970 3,650 36 394,269
2007 £'’000s 3,714 348,665 37 56 352,472
PARTICIPATING SHAREHOLDERS The Company may declare and pay dividends on any class of Shares
9.
SHARE CAPITAL
Authorised
in the Company.
The authorised share capital of the Company is £30,000 divided into In order for each Fund to maintain its status as a distributing Fund for UK tax purposes for the year ended 28 February 2006, additional
30,000 subscriber shares of a par value of £1 each and 500 billion participating shares of no par value.
distributions were made in August 2006 for certain funds. Since these additional distributions were declared and paid in August 2006, they were recognised in the Profit and Loss Account for the year ended 28 February 2007. As a result, distributions recorded in the Profit and Loss Account for that period may exceed the reported net
Subscriber shares The Company has issued 30,000 subscriber shares to the Manager and nominees of the Manager. They do not form part of the net asset value of the Company. They are thus disclosed in the financial statements by way of this note only. In the opinion of the Directors
income for certain funds.
this disclosure reflects the nature of the Company's investment Pay date March April May June July August September www.iShares.eu
2008 £'’000s 197 191 69,946 4,510 2,387 60,287
2007 £'’000s 6,781 261 187 44,736 3,434 223 37,377
business.
iShares plc Annual Report 49
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) Participating Shares - issued and fully paid
Balance at beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ‘000s 781,347 280,270 (122,245) 939,372
2007 No. of Shares ‘000s 561,492 302,685 (82,830) 781,347
The issued and fully paid redeemable participating share capital is at all times equal to the net asset value of the Company. Redeemable
Fund iShares FTSE/Xinhua China 25 iShares MSCI Far East ex Japan iShares MSCI Brazil iShares MSCI Eastern Europe 10/40 iShares MSCI Emerging Markets iShares MSCI Europe ex-UK iShares MSCI Japan iShares MSCI Korea iShares MSCI North America iShares MSCI Taiwan iShares MSCI World iShares S&P 500
% rate per annum 0.74 0.74 0.74 0.74 0.75 0.40 0.59 0.74 0.40 0.74 0.50 0.35
participating shares are redeemable at the shareholders' option and are 11. DIRECTORS’ FEES
classified as financial liabilities.
The Directors shall be entitled to a fee and remuneration for their 10. FEES
services at a rate to be determined from time to time by the
Management fees
Directors. Directors fees of for the year were GBP 99,102
The expense rates given in the table below, are expressed as a
(2007: GBP 94,368).
percentage per annum of the Fund's net asset value basis. The Funds pay the expenses to the Manager (BGIIL) who is responsible for
12. TAXATION
discharging from this amount all fees of the Investment Manager,
Under current law and practice, the Company qualifies as an
Administrator, and the Custodian, together with all reasonable out of
investment undertaking as defined in Section 739B of the Taxes
pocket expenses of such service providers (excluding transaction
Consolidation Act, 1997, (as amended). It is not chargeable to Irish
related charges of the Administrator and Custodian).
tax on its income or gains.
The iShares € Corporate Bond, iShares $ Corporate Bond, iShares FTSE 100 and iShares S&P 500 pay a fee to the Manager based on a percentage per annum of the funds' net asset values as shown in the table. In addition, the four funds will incur other costs up to a maximum of 0.05% per annum of the net asset value of the fund. Where the actual costs incurred exceeds this amount, the excess will be
However, Irish tax may arise on the occurance of a "chargeable event" in the Company. A chargeable event includes any distribution payments to shareholders
or
any encashment, redemption,
cancellation or transfer of shares. No Irish tax will arise on the Company in respect of chargeable events in respect of:
discharged by the Manager. a) A shareholder who is neither Irish resident nor ordinarily resident The Funds pay to the Manager a percentage fee of the net asset value
in Ireland for tax purposes, at the time of the chargeable event,
per annum as set out below:
provided in each case, that an appropriate valid declaration in accordance with the provisions of the Taxes Consolidation Act,
Fund iShares € Corporate Bond iShares € Government Bond 1-3 iShares € Inflation Linked Bond iShares £ Corporate Bond iShares $ Corporate Bond iShares $ Treasury Bond 1-3 iShares AEX iShares DJ Asia/Pacific Select Dividend iShares DJ Euro STOXX Growth iShares DJ Euro STOXX Midcap iShares DJ Euro STOXX Select Dividend iShares DJ Euro STOXX SmallCap iShares DJ Euro STOXX Value iShares FTSE 100 iShares FTSE 250 iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares FTSE/EPRA European Property iShares FTSE UK Dividend Plus 50 iShares plc Annual Report
% rate per annum 0.15 0.20 0.25 0.20 0.15 0.20 0.30 0.59 0.40 0.40 0.40 0.40 0.40 0.35 0.40 0.40 0.40 0.40 0.40
1997, as amended, is held by the Company. b) Certain exempted Irish shareholders who have provided the Company with the necessary signed statutory declarations. Dividends, interest and capital gains (if any) received on investments made by the Company may be subject to withholding taxes imposed by the country of origin, from which the investment income/gains are received and such taxes may not be recoverable by the Company or its shareholders. 13. SOFT COMMISSIONS Neither the Investment Manager, nor any investment advisor or affiliates, may retain the benefit of any cash commission or rebate paid or payable by any broker or dealer to the Investment Manager, www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) investment advisor or affiliate in respect of any business placed with
15. SECURITIES LENDING INCOME
such broker or dealer by any such person, for and on behalf of the
iShares plc lends securities to a number of different counterparties at
Company. There were no soft commissions received by the Investment
any one time. Given below is a list of counterparties approved by the
Manager, in relation to iShares, during the year ending 29 February
Investment Manager as part of the lending programme along with the
2008 (28 February 2007:Nil).
value of securities on loan at year end.
14. RELATED PARTY TRANSACTIONS In the opinion of the Directors, the following entities are related parties to the Company as at 29 February 2008: Manager:
Barclays
Global
Investors
Ireland
Limited Investment Manager:
Barclays Global Investors Limited
Counterparty for Derivatives:
Barclays Bank plc
Stock Lending Agent
Barclays Global Investors Limited
Goldman Sachs International Lehman Brothers International Deutsche Bank AG Morgan Stanley & Co International Barclays Bank PLC UBS Limited Merrill Lynch Credit Suisse JP Morgan
29 February 2008 162,471,744 4,406,893 46,187,187 22,220,222 321,595,903 22,744,294 38,168,062 192,401,276 22,532,771
28 February 2007 78,650,946 4,485,696 7,393,263 8,616,708 930,392,553 113,872,401 328,053,110 -
The Company receives either cash collateral, or securities, for a value in excess of the market value of the securities loaned. The collateral is
Fees payable during the year to the Manager were GBP45,919,000
registered and held in the name of Barclays Global Investors Limited on
(2007: GBP31,426,000) and amounts outstanding at the end of the
behalf of the Funds in any or all of the following central securities
year were GBP4,613,000 (2007: GBP3,714,000).
depositaries: JP Morgan Chase, Euroclear or in CREST, depending on the type of collateral the counterparty has to give in order to cover the
The Manager is responsible for discharging the fees of the Investment
required value of exposure. The Company monitors the fair value of the
Manager out of the Management Fee, see note 10.
securities loaned and additional collateral is obtained, if necessary. Securities lending fees received are reported as part of income in the
The value of derivative transactions held at year end with the
Profit and Loss account.
counterparty to derivatives, Barclays Bank PLC, are included within financial assets and liabilities at fair value in the Balance Sheet and
The securities lending income earned during the year, the value of
disclosed in note 10 of the financial statements of the relevant Funds.
securities on loan at the year end and the value of the collateral held at
The realised gains/(losses) and change in unrealised gain/(loss) on
the year end for the Funds engaged in securities lending is shown
derivative contracts during the year are included within net
below:
gains/(losses) on financial assets at fair value through the profit or loss in the Profit and Loss account. The amount of commission paid to the counterparty for derivatives during the year was GBP10,151 (2007: GBP11,903). Some Funds hold investments in related parties. These investments are
iShares € Corporate Bond
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares £ Corporate Bond
detailed in the individual Funds' Schedules of Investments. iShares MSCI World owns 5.4% of the units in iShares MSCI Japan.
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end
29 February 2008 EUR 8,242 22,532,771
28 February 2007 EUR 85,579 44,889,302
23,930,252
53,364,466
29 February 2008 GBP 2,013 2,850,190
28 February 2007 GBP 16,885 3,692,099
3,014,142
3,911,848
29 February 2008 EUR 231,933 19,525,514
28 February 2007 EUR 11,809 269,769
Details of the fees payable to Directors are included in note 11. iShares DJ Euro STOXX Growth
There is a 50/50 percentage split in securities lending income between the Funds and BGIL.
www.iShares.eu
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end
21,682,574
304,330
iShares plc Annual Report 51
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares DJ Euro STOXX MidCap
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares DJ Euro STOXX Select Dividend Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares DJ Euro STOXX SmallCap
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares FTSE 100
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares FTSE 250
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares FTSEurofirst 80
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares FTSEurofirst 100
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares FTSE/EPRA European Property Index Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end
52 iShares plc Annual Report
29 February 2008 EUR 406,573 20,614,686
28 February 2007 EUR 235,636 85,628,996
22,096,258
91,056,361
29 February 2008 EUR 2,466,599 46,049,805
28 February 2007 EUR 309,442 5,403,979
48,937,709
5,639,641
29 February 2008 EUR 592,626 39,612,942
28 February 2007 EUR 225,954 99,143,804
43,634,009
105,691,689
29 February 2008 EUR 72,708 6,412,721
28 February 2007 EUR 3,713 8,215,073
10,440,417
8,717,852
29 February 2008 EUR 46,899 192,401,276
28 February 2007 EUR 1,194 1,205,950
202,227,427
1,274,172
29 February 2008 EUR 432,016 12,913,036
28 February 2007 EUR 465,719 3,088,162
15,452,506
3,251,922
29 February 2008 EUR 148,120 3,775,334
28 February 2007 EUR 100,379 199,407
4,677,905
232,008
29 February 2008 EUR 644,351 41,434,019
28 February 2007 EUR 57,040 18,879,485
44,046,795
19,200,115
iShares FTSE UK Dividend Plus
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares FTSE/Xinhua China 25
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares MSCI Fae East ex Japan
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares MSCI Eastern Europe
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares MSCI Emerging Markets
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares MSCI Europe ex-UK
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares MSCI Japan
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end iShares MSCI World
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end
29 February 2008 USD 131,874 21,439,788 34,905,671
28 February 2007 USD -
29 February 2008 USD 2,608,925 127,527,614
28 February 2007 USD 2,040,538 102,409,673
135,522,409
106,317,949
29 February 2008 USD 15,817 2,626,727 2,804,923
28 February 2007 USD -
29 February 2008 USD 182,529 42,996,405
28 February 2007 USD 157,105 7,703,323
54,315,318
8,178,357
29 February 2008 USD 322,015 55,945,550
28 February 2007 USD 43,144 8,721,467
64,764,203
9,391,755
29 February 2008 USD 319,288 13,415,632
28 February 2007 USD -
14,309,699
-
29 February 2008 USD 1,001,747 615,889,765
28 February 2007 USD 396,536 1,756,803,272
658,077,232
1,869,252,899
29 February 2008 USD 336,523 18,503,406 23,202,609
28 February 2007 USD 10,452 438,789 455,534
www.iShares.eu
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) iShares S&P 500
29 February 2008 USD 2,137,853 -
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end
28 February 2007 USD 2,090,277 642,348,517
-
iShares DJ Euro STOXX Value
800,353,685
29 February 2008 USD 156,195 2,384,492
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end
28 February 2007 USD -
3,228,737
iShares AEX Tracker
-
29 February 2008 USD 27,997 754,167
Income earned during the year Value of securities on loan at year end Value of collateral held by the Fund at year end
28 February 2007 USD -
Fund iShares MSCI Europe ex-UK iShares MSCI North America iShares MSCI Taiwan iShares MSCI World iShares S&P 500
BOI £’000s 393 320 116 738 41,941 74,573
Barclays £’000s 280 391 6,491*
Bank overdrafts As at 29 February 2008 Fund iShares AEX iShares FTSE 250 iShares FTSE UK Dividend Plus iShares FTSE/Xinhua China 25 iShares MSCI Far East ex Japan iShares MSCI Brazil iShares MSCI Japan iShares MSCI Korea
BOI £’000s 78 9
Barclays £’000s -
169
173
-
173
-
679 1,021 399 741 3,269
£3,568,000). 16. CASH AND BANK BALANCES
As at 28 February 2007
-
The total income earned during the year was £7,349,000 (2007:
All cash is held with The Governor and Company of the Bank of Ireland (BOI), with the exception of cash held as collateral with the counterparty for futures contracts, Barclays Bank PLC (Barclays): As at 29 February 2008 Fund iShares € Corporate Bond iShares € Government Bond 1-3 iShares € Inflation Linked Bond iShares £ Corporate Bond iShares $ Corporate Bond iShares $ Treasury Bond 1-3 iShares DJ Asia/Pacific Select Dividend iShares DJ Euro STOXX Growth iShares DJ Euro STOXX MidCap iShares DJ Euro STOXX Select Dividend iShares DJ Euro STOXX SmallCap iShares DJ Euro STOXX Value iShares FTSE 100 iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares FTSE/EPRA European Property iShares MSCI Eastern Europe 10/40 iShares MSCI Emerging Markets www.iShares.eu
BOI £’000s 65
Barclays £’000s -
Total £’000s 65
81
-
81
33 1,681 173 62
-
33 1,681 173 62
64
-
64
111
-
111
88
-
88
15,567
-
15,567
185
-
185
165 10,347 742 263
33 5,446 252 89
198 15,793 994 352
197
-
197
329
-
329
912
-
912
Fund iShares € Corporate Bond iShares € Government Bond 1-3 iShares € Inflation Linked Bond iShares £ Corporate Bond iShares $ Corporate Bond iShares $ Treasury Bond 1-3 iShares AEX iShares DJ Asia/Pacific Select Dividend iShares DJ Euro STOXX Growth iShares DJ Euro STOXX MidCap iShares DJ Euro STOXX Select Dividend iShares DJ Euro STOXX SmallCap iShares DJ Euro STOXX Value iShares FTSE 100 iShares FTSE 250 iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares FTSE/EPRA European Property iShares FTSE UK Dividend Plus iShares FTSE/Xinhua China 25 iShares MSCI Far East ex Japan iShares MSCI Brazil
Total £’000s 78 9
169
679 1,021 399 741 3,269 *Cash is held as collateral and therefore is restricted cash.
801,162
Total £’000s 393 320 116 1,018 42,332 81,064
BOI £’000s 8,080
Barclays £’000s -
Total £’000s 8,080
18
-
18
29 2,975 260 394 3
-
29 2,975 260 394 3
416
-
416
133
-
133
458
-
458
568
-
568
567
-
567
20 38,577 746 1,813 527
3,423 233 44
20 42,000 746 2,046 571
205
-
205
1,314
-
1,314
468
-
468
186 91
-
186 91
iShares plc Annual Report 53
iShares plc Notes to the Financial Statements for the year ended 29 February 2008 (continued) As at 28 February 2007 (continued) BOI £’000s
Fund iShares MSCI Eastern Europe 10/40 iShares MSCI Emerging Markets iShares MSCI Europe ex-UK iShares MSCI Japan iShares MSCI North America iShares MSCI World iShares S&P 500
Barclays £’000s
Total £’000s
510
-
510
2,593 135 55,234 130 716 2,767 119,933
248 3,948
2,593 135 55,234 130 716 3,015 123,881
Change of Fund name: The iShares MSCI Eastern Europe Fund changed its name on 4 December 2007 to iShares MSCI Eastern Europe 10/40. Change to Board of Directors: Mr. Tim West was appointed to the Company Board of Directors effective 4 December 2007 and subsequently resigned effective 22 January 2008. Mr. Gerald Brady resigned from the Company Board of Directors effective 12 June 2007.
Bank overdrafts 19. SIGNIFICANT EVENTS SINCE YEAR END As at 28 February 2007
There have been no significant events since year end. BOI £’000s 53 54 107
Fund iShares MSCI Korea iShares MSCI Taiwan
Barclays £’000s -
Total £’000s 53 54 107
20. APPROVAL OF FINANCIAL STATEMENTS The Directors approved the financial statements on 20 June 2008.
17. EXCHANGE RATES The rates of exchange ruling at the 29 February 2008 were: EUR1= CHF DKK GBP
1.5846 7.4508 0.7632
NOK SEK USD
7.9189 9.3666 1.5181
GBP= EUR CHF USD
USD1= AUD BRL CAD CHF CLP CZK DKK EGP EUR GBP
1.0690 1.6849 0.9794 1.0438 455.12003 16.5364 4.9079 5.4863 0.6587 0.5027
HKD HUF IDR ILS INR JPY KRW MXN MYR NOK
7.7806 NZD 173.9675 PHP 9065.0006 PLN 3.6642 RUB 40.0150 SEK 104.1050 SGD 939.0500 THB 10.7183 TRY 3.1945 TWD 5.2162 ZAR
1.3103 2.0764 1.9820
1.2470 40.4650 2.3177 24.0266 6.1699 1.3944 31.4750 1.2082 30.9150 7.7661
The rates of exchange ruling at the 28 February 2007 were: EUR1= CHF DKK GBP
1.6132 7.4520 0.6741
NOK SEK USD
8.1150 9.2687 1.3210
GBP= EUR CHF USD
USD1= AUD BRL CAD CHF CLP CZK DKK EGP EUR GBP
3.1020 2.1142 1.1725 1.2212 539.2501 21.3793 5.6412 5.6950 0.7570 0.5103
HKD HUF IDR ILS INR JPY KRW MXN MYR NOK
7.8123 193.0656 9131.5006 4.2160 44.2750 118.4850 941.7001 11.1620 3.5030 6.1431
NZD PHP PLN RUB SEK SGD THB TRY TWD
1.4836 2.3833 1.9598
1.4277 48.5325 2.9615 26.1425 7.0165 1.5298 33.9500 1.4145 32.9500
18. SIGNIFICANT EVENTS DURING THE YEAR The Shareholders approved a proposal to convert the Company to a UCITS with segregated liability between the Funds on 30 July 2007.
54 iShares plc Annual Report
www.iShares.eu
iShares € Corporate Bond PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Operating income
3
31,220
34,701
Net losses on financial assets at fair value through profit or loss
4
(34,295)
(22,218)
(3,075)
12,483
Total investment (loss)/income Operating expenses
5
Net (deficit)/income
(1,045)
(1,603)
(4,480)
10,880
(26,590)
(40,542)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense (Loss) before tax Adjustment from bid market prices to last traded market prices
1
(Decrease) in net assets attributable to Redeemable Participating Shareholders
(541)
-
(31,611)
(29,662)
1,093
(117)
(30,518)
(29,779)
There are no recognised gains or losses arising in the year other than the decrease in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
871,460
822,149
Decrease in net assets attributable to Redeemable Participating Shareholders from operations
(30,518)
(29,779)
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares Net assets attributable to Redeemable Participating Shareholders at the end of the year
76,435
153,144
(272,168)
(74,054)
645,209
871,460
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
631,461
856,536
Debtors
7
166,595
310,224
86
11,988
798,142
1,178,748
8
(154,660)
(299,876)
11
-
(8,046)
(154,660)
(307,922)
643,482
870,826
1,727
634
645,209
871,460
5,580,000
7,200,000
€115.63
€121.04
Cash and bank balances Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions payable to Redeemable Participating Shareholders Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €000s 821,398) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 6,570,000) Net Asset Value per Redeemable Participating Share (2006: €125.14)
9
The accompanying notes form an integral part of the financial statements.
www.iShares.eu
iShares plc Annual Report 55
iShares € Corporate Bond SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
Aa3 Rating
Chemicals - Total
17,241,824
2.67
17,241,824
2.67
Commercial Banks
18,228,000
4.375% Banque Federative Du Cred Mutuel 31/05/2016
17,768,886
2.75
14,136,000
5.00% BASF Finance Europe NV 26/09/2014
14,591,743
2.26
16,678,000
4.375% Citigroup Incorporated 30/01/2017
15,153,109
2.35
14,818,000
6.605% Gaz Capital SA 13/02/2018
13,795,599
2.14
Aaa Rating 39,184,000 8,556,000
4.125% Rabobank Nederland 04/04/2012 4.125% Royal Bank of Canada 26/01/2010
A1 Rating 39,278,300 8,567,879
6.09 1.33
Aa1 Rating 13,020,000 9,858,000
3.375% Australia & New Zealand Bank Group 01/03/2011
12,674,306
1.96
4.875% National Australia Bank 21/01/2013
10,036,483
1.56
14,818,000
4.125% Wells Fargo & Company 03/11/2016
13,550,458
2.10
14,756,000
4.875% Westpac Banking Corporation 28/09/2012
14,948,719
2.32
Aa2 Rating 10,044,000
4.25% ABN Amro Bank NV 11/05/2016
9,812,882
1.52
16,988,000
4.25% BMW Finance NV 22/01/2014
16,560,935
2.57
11,098,000
4.45% Merrill Lynch & Company Incorporated 31/01/2014
10,103,050
1.57
25,854,000
5.125% GlaxoSmithKline Capital 13/12/2012
26,500,867
4.11
20,413,021
3.16
A2 Rating 19,840,000
5.50% E.On International Finance B.V. 02/10/2017 A3 Rating
17,918,000
4.50% Deutsche Telekom International Finance BV 25/10/2013
17,597,646
2.73
12,276,000
5.00% Volvo Treasury AB 31/05/2017
11,542,777
1.79
11,570,131
1.79
Baa3 Rating
17,360,000
6.00% Barclays Bank 23/01/2018**
17,530,437
2.72
10,664,000
5.431% BNP Paribas 07/09/2017
10,911,655
1.69
6.375% Heidelberg Cement Finance 25/01/2012
17,918,000
4.75% ING Groep NV 31/05/2017
17,147,316
2.66
N/A Rating
24,862,000
4.875% Unicredit SPA 12/02/2013
25,171,890
3.90
11,408,000
9,858,000
Aa3 Rating 5.757% Fortis Bank NV/SA 04/10/2017
9,963,077
1.54
20,150,000
5.375% Goldman Sachs Group Incorporated 15/02/2013
20,030,517
3.10
5.50% Morgan Stanley 02/10/2017
12,432,160
1.93
222,056,079
34.42
Commercial Banks - Total
4.875% Mediobanca Di Credito Finanz SPA 20/12/2012 Financial - Total
10,044,000
13,268,000
% OF FUND
Aa3 Rating
Chemicals 4.50% Procter & Gamble Company 12/05/2014
FAIR VALUE EUR
EUROPEAN UNION (cont)
EUROPEAN UNION
17,236,000
INVESTMENT
10,030,377
1.55
244,496,525
37.90
General Industry Baa1 Rating 15,996,000
4.75% Compagnie De St-Gobain 11/04/2017
14,239,455
2.21
General Industry - Total
14,239,455
2.21
4.125% Daimler North America Corporation 08/09/2009
17,447,623
2.70
Motors & Motor Companies Total
17,447,623
2.70
17,646,404
2.73
17,545,339
2.71
Electricity & Gas Utilities A2 Rating 17,236,000
5.25% Enel 20/06/2017 Electricity & Gas Utilities - Total
Motors & Motor Companies 17,266,149
2.68
17,266,149
2.68
Aa3 Rating 17,546,000
Financial Aaa Rating 19,778,000
4.75% GE Capital European Fund 28/09/2012
19,983,088
Telephone
3.10
A3 Rating
Aa1 Rating 12,028,000
13,516,000 12,834,000
18,352,000
4.50% Deutsche Telekom International Finance B.V 25/10/2013
12,310,359
1.91
4.75% Credit Suisse (London Branch) 24/09/2010
13,695,497
2.12
3.875% Total Capital SA 06/09/2011
12,879,440
2.00
4.75% France Telecom 21/02/2017 Baa1 Rating
17,360,000
5.375% OTE 14/02/2011 Baa2 Rating
15,252,000
5.00% Koninklijke KPN NV 13/11/2012
14,984,144
2.32
Telephone - Total
50,175,887
7.76
582,923,542
90.34
EUROPEAN UNION - TOTAL
56 iShares plc Annual Report
www.iShares.eu
iShares € Corporate Bond Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
12,462,000
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
INVESTMENT
% OF FUND
NORWAY
UNITED KINGDOM (cont)
Telephone
Telephone - Total
11,975,391
1.86
A2 Rating
UNITED KINGDOM - TOTAL
11,975,391
1.86
631,460,565
97.87
86,010
0.01
11,934,721
1.85
643,481,296
99.73
1,727,317
0.27
645,208,613
100.00
4.875% Telenor ASA 29/05/2017
11,582,931
1.80
Telephone - Total
11,582,931
1.80
TOTAL VALUE OF INVESTMENTS
NORWAY - TOTAL
11,582,931
1.80
AT BID PRICES CASH*
24,862,000
FAIR VALUE EUR
SWITZERLAND
OTHER NET ASSETS
Financial
TOTAL VALUE OF FUND AT BID
Aaa Rating
MARKET PRICES
4.875% UBS AG London 21/01/2013
Adjustment from bid market prices 24,978,701
3.87
Financial - Total
24,978,701
3.87
SWITZERLAND - TOTAL
24,978,701
3.87
UNITED KINGDOM
to last traded market prices TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* All cash holdings are held with The Governor & Company of the Bank of Ireland. ** Related Party.
Telephone Baa1 Rating 12,028,000
www.iShares.eu
5.25% British Telecommunications 22/01/2013
11,975,391
1.86
iShares plc Annual Report 57
iShares € Corporate Bond Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
4.25% Rabobank Nederland 16/01/2017
67,047,234
4.125% Rabobank Nederland 04/04/2012
68,059,870
3.75% Telefonica 02/02/2011
45,011,468
5.125% GlaxoSmithKline Capital 13/12/2012
26,500,867
4.125% GE Capital European Fund 27/10/2016
32,957,376
4.25% GE Capital European Fund 06/02/2014
25,349,813
4.125% Rabobank Nederland 04/04/2012
29,951,703
4.875% Unicredit SPA 12/02/2013
25,267,996
3.375% BASF AG 30/05/2012
27,758,803
4.875% UBS AG London 21/01/2013
25,000,979
3.375% Procter & Gamble Company 07/12/2012
26,893,852
4.75% GE Capital European Fund 28/09/2012
24,302,645
4.375% Morgan Stanley 12/10/2016
26,219,460
4.75% ING Groep NV 31/05/2017
23,924,427
4.25% GE Capital European Fund 06/02/2014
25,075,315
4.50% Procter & Gamble Company 12/05/2014
23,637,251
3.75% HSBC Finance Corporation 04/11/2015
23,306,659
5.50% E.On International Finance B.V. 02/10/2017
21,682,049
3.75% Goldman Sachs Group 04/02/2013
22,087,554
5.125% Goldman Sachs Group Incorporated 16/10/2014
21,454,232
4.00% ING Verzekeringen NV 18/09/2013
21,940,162
5.25% Enel 20/06/2017
20,288,751
5.125% Goldman Sachs Group 16/10/2014
21,105,623
5.375% Goldman Sachs Group Incorporated 15/02/2013
20,036,556
3.75% Portugal Telecom International Finance BV 26/03/2012
20,193,985
4.75% Compagnie De St-Gobain 11/04/2017
19,655,134
4.75% Bertelsmann 26/09/2016
19,972,377
4.875% Mediobanca Di Credito Finanz SPA 20/12/2012
18,319,925
4.75% Koninlijke KPN NV 17/01/2017
19,862,513
4.875% Westpac Banking Corporation 28/09/2012
18,176,111
4.375% Veolia Environment 16/01/2017
19,813,413
6.00% Barclays Bank 23/01/2018
17,586,201
4.125% Volkswagen Leasing 31/05/2011
19,783,120
5.375% OTE 14/02/2011
17,572,486
3.875% BAA 15/02/2012
19,352,307
4.75% Linde Finance 24/04/2017
16,272,839
4.56% Gaz Capital (Gazprom) 09/12/2012
18,889,875
4.75% Telstra Corporation Limited 21/03/2017
15,974,546
3.125% Credit Suisse (US) 14/09/2012
18,838,275
5.00% Volvo Treasury AB 31/05/2017
15,670,472
58 iShares plc Annual Report
COST EUR
www.iShares.eu
iShares € Corporate Bond NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Participating Shares – issued and fully paid
See pages 21 to 24.
OPERATING INCOME
Bond income Securities lending income Interest income Operating income
2008 €’000s 30,527 8 685 31,220
2007 €’000s 34,430 86 185 34,701
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 7,200 630 (2250) 5,580
2007 No. of Shares ’000s 6,570 1,260 (630) 7,200
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET LOSSES ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
10. FUTURES 2008 €’000s
Net fair value losses on sale of investments Net change in fair value appreciation on investments Fair value currency losses Net losses on financial assets at fair value through profit or loss
2007 €’000s
The Fund does not hold any open futures as at 29 February 2008 (2007: nil).
(37,139)
(19,632)
2,876 (32)
(2,584) (2)
(34,295)
(22,218)
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
5.
OPERATING EXPENSES
Management fees Operating expenses
6.
2008 €’000s 1,405 1,405
2007 €’000s 1,603 1,603
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the end of the year Fair value at the end the year
7.
2007 €’000s 809,941 866,250 802,127 856,536
2008 €’000s 11,602 7 154,986 166,595
2007 €’000s 13,573 2 137 296,512 310,224
Equalisation income Equalisation expense
2008 €’000s 7,475 7,146 6,887 7,335 28,843 (3,480) 1,277 26,590
2007 €’000s 7,611 8,506 7,520 7,568 8,046 39,251 (976) 2,267 40,542
* Outstanding at end of year
DEBTORS
Bond income receivable Securities lending income receivable Interest income receivable Sale of securities awaiting settlement Debtors
8.
2008 €’000s 866,250 638,299 856,536 631,461
Pay Date March June September December February March*
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities awaiting settlement Creditors (amounts falling due within one year)
www.iShares.eu
2008 €’000s 130
2007 €’000s 174
154,530
299,702
154,660
299,876
iShares plc Annual Report 59
iShares € Government Bond 1-3 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net gains/(losses) on financial assets at fair value through profit or loss
4
Total investment income Operating expenses
5
Net income
2008 €’000s
2007* €’000s
8,208
2,357
3,120
(626)
11,328
1,731
(413)
(146)
10.915
1,585
(6,979)
(3,097)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense Profit/(loss) before tax Adjustment from bid market prices to last traded market prices
1
Increase/(decrease) in net assets attributable to Redeemable Participating Shareholders
(74)
(2)
3,862
(1,514)
42
20
3,904
(1,494)
There are no recognised gains or losses arising in the year other than the decrease in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007* €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
88,126
-
Increase/(decrease) in net assets attributable to Redeemable Participating Shareholders from operations
3,904
(1,494)
304,241
104,324
(254,270)
(14,704)
142,001
88,126
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares Net assets attributable to Redeemable Participating Shareholders at the end of the year
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007* €’000s
Current assets Financial assets at fair value through profit or loss
6
140,072
86,974
Debtors
7
2,247
2,591
107
27
142,426
89,592
Cash and bank balances Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions payable to Redeemable Participating Shareholders
8
(487)
(23)
11
-
(1,463)
(487)
(1,486)
141,939
88,106
62
20
142,001
88,126
1,080,000
680,000
€131.48
€129.60
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue Net Asset Value per Redeemable Participating Share
9
The accompanying notes form an integral part of the financial statements. * For the period commencing 2 June 2006 and ending 28 February 2007.
60 iShares plc Annual Report
www.iShares.eu
iShares € Government Bond 1-3 SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
23,841,000
Government Fixed
4.00% Italy (Republic of) 01/03/2010*
4.00% France (Government of) 12/09/2009*
16,603,977
11.69
EUROPEAN UNION - TOTAL
17,955,000
4.00% Germany (Federal Republic of) 11/09/2009*
18,162,201
12.79
22,140,000
4.50% Germany (Federal Republic of) 12/06/2009*
TOTAL VALUE OF INVESTMENTS
22,439,333
15.80
AT BID PRICES
12,879,000
4.00% Germany (Federal Republic of) 11/12/2009*
18,711,000 22,059,000
4.00% Netherlands (Kingdom of) 15/01/2011*
% OF FUND
Government Fixed (cont)
Aaa Rating
4,320,000
FAIR VALUE EUR
EUROPEAN UNION (cont)
EUROPEAN UNION
16,443,000
INVESTMENT
13,060,851
9.20
CASH** OTHER NET ASSETS
4,401,130
3.10
TRADED MARKET PRICES
Government Fixed
Adjustment form bid market prices to last traded market prices 19,159,316
13.49
3.75% Italy (Republic of) 15/06/2009*
22,125,177
15.58
16.99 98.64
140,072,162
98.64
107,082
0.08
1,759,781
1.24
141,939,025
99.96
62,325
0.04
142,001,350
100.00
TOTAL VALUE OF FUND AT LAST
Aa2 Rating 4.50% Italy (Republic of) 01/08/2010*
24,120,177 140,072,162
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* Prices are sourced from Barclays Capital. ** All cash holdings are held with The Governor & Company of the Bank of Ireland.
www.iShares.eu
iShares plc Annual Report 61
iShares € Government Bond 1-3 Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
3.75% Germany (Federal Republic of) 13/03/2009
50,106,279
4.00% Italy (Republic of) 01/03/2010
63,556,891
2.75% Netherlands (Kingdom of) 15/04/2009
48,048,021
4.50% Germany (Federal Republic of) 12/06/2009
59,217,601
3.75% Germany (Federal Republic of) 12/12/2008
40,581,665
3.75% Germany (Federal Republic of) 13/03/2009
50,027,530
4.00% Italy (Republic of) 01/03/2010
39,527,782
3.75% Italy (Republic of) 15/06/2009
49,108,794
3.00% Italy (Republic of) 01/02/2009
39,311,442
4.00% France (Government of) 12/09/2009
47,282,254
3.75% Italy (Republic of) 15/06/2009
39,204,529
4.50% Italy (Republic of) 01/08/2010
44,749,265
4.50% Germany (Federal Republic of) 12/06/2009
37,195,861
4.00% Germany (Federal Republic of) 11/09/2009
42,957,553
4.00% France (Government of) 12/09/2009
31,142,015
2.75% Netherlands (Kingdom of) 15/04/2009
41,769,796
4.50% Italy (Republic of) 01/08/2010
26,158,747
3.75% Germany (Federal Republic of) 12/12/2008
32,625,400
4.00% Germany (Federal Republic of) 11/09/2009
25,184,795
3.00% Italy (Republic of) 01/02/2009
27,885,669
3.50% Germany (Federal Republic of) 12/09/2008
22,926,856
4.00% Germany (Federal Republic of) 11/12/2009
21,709,272
2.90% Spain (Kingdom of) 31/10/2008
20,142,360
3.50% Germany (Federal Republic of) 12/09/2008
12,697,156
3.50% France (Government of) 12/09/2008
18,728,859
2.90% Spain (Kingdom of) 31/10/2008
12,171,757
2.50% Italy (Republic of) 15/06/2008
12,815,753
3.50% France (Government of) 12/09/2008
9,756,874
3.25% Germany (Federal Republic of) 13/06/2008
11,325,130
4.00% Netherlands (Kingdom of) 15/01/2011
7,298,424
4.00% Germany (Federal Republic of) 11/12/2009
8,703,976
2.50% Italy (Republic of) 15/06/2008
712,233
4.00% Netherlands (Kingdom of) 15/01/2011
3,576,693
3.25% Germany (Federal Republic of) 13/06/2008
629,507
62 iShares plc Annual Report
COST EUR
www.iShares.eu
iShares € Government Bond 1-3 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Participating Shares – issued and fully paid
See pages 21 to 24.
OPERATING INCOME
Bond income Interest income Operating income
2008 €’000s 8,122 86 8,208
2007 €’000s 2,357 2,357
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 680 2,320 (1,920) 1,080
2007 No. of Shares ’000s 800 (120) 680
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified
4.
as financial liabilities.
NET GAINS/(LOSSES) ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Net fair value gains(losses) on sale of investments Net change in fair value appreciation/(depreciation) on investments Fair value currency (losses)/gains Net gains/(losses) on financial assets at fair value through profit or loss
5.
2007 €’000s
1,345
(290)
(2007: nil).
1,786 (11)
(346) 10
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE
3,120
(626)
2008 €’000s 413 413
2007 €’000s 146 146
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
Pay Date September February March*
2008 €’000s 87,193 138,505 86,974 140,072
2007 €’000s 87,193 86,974
2008 €’000s 2,247 2,247
2007 €’000s 1,080 1,511 2,591
2008 €’000s 3,634 2,421 6,055 (748) 1,672 6,979
2007 €’000s 667 1,463 2,130 (55) 1,022 3,097
* Outstanding at end of year
DEBTORS
Bond income receivable Sale of securities awaiting settlement Debtors
8.
PARTICIPATING SHAREHOLDERS
Equalisation income Equalisation expense
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
7.
The Fund does not hold any open futures as at 29 February 2008
OPERATING EXPENSES
Management fees Operating expenses
6.
10. FUTURES
2008 €’000s
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities payable awaiting settlement Interest expense payable Creditors (amounts falling due within one year)
www.iShares.eu
2008 €’000s 39
2007 €’000s 18
445 3
5
487
23
iShares plc Annual Report 63
iShares € Inflation Linked Bond PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net gains on financial assets at fair value through profit or loss
4
Total investment income Operating expenses
5
Net income
2008 €’000s
2007* €’000s
7,205
2,010
3,227
204
10,432
2,214
(376)
(265)
10,056
1,949
Finance costs Distributions to Redeemable Participating Shareholders
11
-
Interest expense
(172)
-
Profit before tax
9,884
1,949
2,107
746
11,991
2,695
Adjustment from bid market prices to last traded market prices
1
Increase in net assets attributable to Redeemable Participating Shareholders from operations
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
110,125
31,037
Increase in net assets attributable to Redeemable Participating Shareholders from operations
11,991
1,727
269,362
138,945
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares
(76,739)
(61,584)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
314,739
110,125
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
308,581
108,697
Debtors
7
105,753
2,621
9,280
43
423,614
111,361
(111,064)
(1,318)
(111,064)
(1,318)
312,550
110,043
2,189
82
Cash and bank balances Total current assets Current liabilities Creditors (amounts falling due within one year)
8
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €'000s 31,701) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 200,000) Net Asset Value per Redeemable Participating Share (€155.19)
9
314,739
110,125
1,900,000
700,000
€165.65
€157.32
The accompanying notes form an integral part of the financial statements.
64 iShares plc Annual Report
www.iShares.eu
iShares € Inflation Linked Bond SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE
% OF
EUR
FUND
HOLDING
EUROPEAN UNION
EUROPEAN UNION (cont)
Aa2 Rating
Aaa Rating
Government Index Linked Stocks 15,732,000
INVESTMENT
2.10% Italy (Republic of) Index Linked 15/09/2017*
FAIR VALUE
% OF
EUR
FUND
Government Index Linked Stocks 16,636,445
5,700,000
1.25% France (Government of) BTANEI 25/07/2010*
6,068,698
1.93
15,390,000
1.60% France (Government of) Indexed Linked OATEI 25/07/2015*
5.29
23,180,000
0.95% Italy (Republic of) Index Linked BTPI 15/09/2010*
24,815,975
7.88
20,235,000
2.15% Italy (Republic of) Index Linked BTPI 15/09/2014*
16,668,567
5.30
22,954,030
7.29
16,834,000
2.35% Italy (Republic of) Index Linked Senior BTPI 15/09/2035*
2.50% France (Government of) OATI 25/07/2013*
19,574,353
6.22
14,430,241
4.58
15,314,000
1.60% France (Government of) OATI 25/07/2011*
16,796,607
5.34
18,582,000
3.00% France (Government of) OATI 25/07/2009*
22,092,623
7.02
15,143,000
1.00% France (Government of) OATI 25/07/2017*
14,721,906
4.68
9,481,000
3.40% France (Government of) OATI 25/07/2029*
13,086,024
4.16
4,180,000
2.25% Germany (Federal Republic of) Index Linked 15/04/2013*
4,500,204
1.43
13,756,000
Aaa Rating Government Index Linked Stocks 23,522,000
3.00% France (Government of) OATEI 25/07/2012*
17,100,000
2.25% France (Government of) OATEI 25/07/2020*
11,362,000
3.15% France (Government of) OATEI 25/07/2032*
5,833,000
1.80% France (Government of) OATEI 25/07/2040*
14,687,000
1.50% Germany (Federal Republic of) Index Linked 15/04/2016*
28,720,033 19,547,272 15,210,846
9.12 6.21 4.83
5,542,870
1.76
15,236,292
4.84
Index Linked Stocks
A1 Rating
2.10% Agence France Tresor Index Linked 25/07/2023*
Government Index Linked Stocks
EUROPEAN UNION - TOTAL
8,645,000
2.30% Greece (Republic of) Index Linked 25/07/2030*
8,551,130
2.72
9,728,000
2.90% Greece (Republic of) Index Linked 25/07/2025*
11,562,351
3.67
3,230,000
1.91% Italy (Republic of) Index Linked BOT 15/09/2012*
2,304,371
0.73
308,580,622
98.04
308,580,622
98.04
TOTAL VALUE OF INVESTMENTS CASH** OTHER NET ASSETS
Government Index Linked Stocks 2.60% Italy (Republic of) Index Linked 15/09/2023*
2,280,000
AT BID PRICES
Aa2 Rating 5,795,000
N/A Rating
43,135
2.95
3,926,470
(1.69)
312,550,227
99.30
2,188,515
0.70
314,738,742
100.00
TOTAL VALUE OF FUND AT BID 6,178,035 3,381,749
1.97 1.07
MARKET PRICES Adjustment from bid market prices to last traded market prices TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* Prices are sourced from Barclays Capital. ** All cash holdings are held with The Governor & Company of the Bank of Ireland
www.iShares.eu
iShares plc Annual Report 65
iShares € Inflation Linked Bond Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES 1.65% Italy (Republic of) Index Linked BTPI 15/09/2008
PROCEEDS EUR 12,865,557
LARGEST PURCHASES
COST EUR
2.15% Italy (Republic of) Index Linked BTPI 15/09/2014
32,316,531
3.00% France (Government of) OATEI 25/07/2012
8,912,356
3.00% France (Government of) OATEI 25/07/2012
30,392,824
2.15% Italy (Republic of) Index Linked BTPI 15/09/2014
8,503,744
3.00% France (Government of) OATI 25/07/2009
24,402,760
2.50% France (Government of) OATI 25/07/2013
8,272,639
0.95% Italy (Republic of) Index Linked BTPI 15/09/2010
24,314,433
3.00% France (Government of) OATI 25/07/2009
7,793,602
2.25% France (Government of) OATEI 25/07/2020
19,675,590
0.95% Italy (Republic of) Index Linked BTPI 15/09/2010
6,403,622
2.50% France (Government of) OATI 25/07/2013
19,525,939
3.15% France (Government of) OATEI 25/07/2032
5,651,091
2.10% Italy (Republic of) Index Linked 15/09/2017
15,771,753
2.25% France (Government of) OATEI 25/07/2020
5,463,217
1.60% France (Government of) OATI 25/07/2011
15,624,170
2.35% Italy (Republic of) Index Linked Senior BTPI
1.60% France (Government of) Indexed Linked OATEI
15/09/2035
4,795,277
25/07/2015
15,352,610
3.40% France (Government of) OATI 25/07/2029
4,511,268
3.15% France (Government of) OATEI 25/07/2032
15,116,598
1.60% France (Government of) OATI 25/07/2011
4,366,511
1.50% Germany (Federal Republic) Indexed Linked
1.60% France (Government of) Indexed Linked OATEI 25/07/2015
15/04/2016 4,356,778
1.50% Germany (Federal Republic) Indexed Linked
15,007,546
2.35% Italy (Republic of) Index Linked Senior BTPI 15/09/2035
14,800,133
15/04/2016
3,723,214
3.40% France (Government of) OATI 25/07/2029
13,781,408
1.00% France (Government of) OATI 25/07/2017
3,720,179
1.00% France (Government of) OATI 25/07/2017
13,143,761
2.90% Greece (Republic of) Index Linked 25/07/2025
3,453,558
2.90% Greece (Republic of) Index Linked 25/07/2025
12,276,994
2.10% Italy (Republic of) Index Linked 15/09/2017
3,002,818
2.30% Greece (Republic of) Index Linked 25/07/2030
9,713,748
1.80% France (Government of) OATEI 25/07/2040
2,108,646
1.80% France (Government of) OATEI 25/07/2040
7,707,964
1.25% France (Government of) BTANEI 25/07/2010
1,563,607
2.60% Italy (Republic of) Index Linked 15/09/2023
7,536,337
2.60% Italy (Republic of) Index Linked 15/09/2023
1,434,728
1.65% Italy (Republic of) Index Linked BTPI 15/09/2008
5,670,223
1.25% France (Government of) BTANEI 25/07/2010
5,542,457
2.30% Greece (Republic of) Index Linked 25/07/2030
66 iShares plc Annual Report
886,155
www.iShares.eu
iShares € Inflation Linked Bond NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Bond income Interest income Operating income
2008 €’000s 7,082 123 7,205
2007 €’000s 1,987 23 2,010
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 700 1,700 (500) 1,900
2007 No. of Shares ’000s 200 900 (400) 700
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified
4.
as financial liabilities.
NET GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2008 €’000s
Net fair value gains on sale of investments Net change in fair value appreciation on investments Fair value currency losses Net gains on financial assets at fair value through profit or loss
2007 €’000s
(4,099)
41
7,331 (5)
163 -
3,227
204
10. FUTURES The Fund does not hold any open futures as at 29 February 2008 (2007: nil). 11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS The shares in the Fund are accumulating and, therefore it is not
5.
Management fees Operating expenses
6.
intended to distribute dividends to the shareholders. The income and
OPERATING EXPENSES 2008 €’000s 376 376
2007 €’000s 265 265
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
2007 €’000s 32,809 110,207 31,323 108,697
2008 €’000s 3,790 7 3,877 98,079 105,753
2007 €’000s 1,303 13 1,305 2,621
shareholders. Dividends, if paid on the shares, may be paid out of the net revenue of the Fund including interest and dividends earned by the Fund, realised and unrealised profits on the disposal/valuation of the investments less realised and unrealised losses of the Fund.
DEBTORS
Bond income receivable Interest income receivable Sale of securities awaiting settlement Subscriptions awaiting settlement Debtors
8.
2008 €’000s 110,207 308,670 108,697 308,581
other profits will be accumulated and reinvested on behalf of
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities awaiting settlement Interest expense payable Creditors
www.iShares.eu
2008 €’000s 54 111,000 10 111,064
2007 €’000s 27 1,291 1,318
iShares plc Annual Report 67
iShares £ Corporate Bond PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net losses on financial assets at fair value through profit or loss
4
Total investment (loss)/income Operating expenses
5
Net (deficit)/income
2008 £’000s
2007 £’000s
11,826
9,731
(25,986)
(6,983)
(14,160)
2,748
(405)
(357)
(14,565)
2,391
(11,484)
(12,057)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense
(240)
-
Loss before tax
(26,289)
(9,666)
654
222
(25,635)
(9,444)
Adjustment from bid market prices to last traded market prices
1
Decrease in net assets attributable to Redeemable Participating Shareholders from operations
There are no recognised gains or losses arising in the year other than the decrease in net assets attributable to Redeemable Participating Shareholders dealt within the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
207,512
130,948
Decrease in net assets attributable to Redeemable Participating Shareholders from operations
(25,635)
(9,444)
25,325
86,008
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares
(12,740)
-
Net assets attributable to Redeemable Participating Shareholders at the end of the year
194,462
207,512
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Current assets Financial assets at fair value through profit or loss
6
189,040
203,075
Debtors
7
41,955
36,270
1,681
2,975
232,676
242,320
8
(39,214)
(32,772)
11
-
(2,382)
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders)
(39,214)
(35,154)
Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: £000s 130,824)
193,462
207,166
1,000
346
194,462
207,512
1,600,000
1,500,000
£121.54
£138.34
Cash and bank balances Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 900,000) Net Asset Value per Redeemable Participating Share (2006: £145.50)
9
The accompanying notes form an integral part of the financial statements.
68 iShares plc Annual Report
www.iShares.eu
iShares £ Corporate Bond SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
HOLDING
Aaa Rating
4,032,000
6.25% Alliance & Leicester 27/09/2010
4.75% Rabobank Nederland 30/09/2009
3,803,910
1.96
7,630,881
3.92
7,008,000
4.625% Royal Bank of Canada 07/12/2010
8.162% Argon Capital 05/10/2012
6,869,993
3.53
4,489,108
2.31
7,600,000
Barclays Bank FRN 15/12/2049**
7,704,394
3.96
6,080,000
Norinchukin Finance (Cayman) Limited FRN 28/09/2016
5,725,459
2.94
5,728,000
Saphir Finance 2006-9 FRN 25/08/2049
4,997,315
2.57
Aa1 Rating 7,136,000
4.625% Wells Fargo & Company 02/11/2035
5,637,116
2.90
Aa2 Rating 5,680,000
4.75% HSBC Bank 24/03/2046
4,374,646
2.25
2,864,000
5.375% Svenska Handelsbanken 29/09/2049
2,618,452
1.35
Bank of Ireland Capital Funding No.4 FRN 29/09/2049
3,624,179
1.86
4,752,000
4.50% Citigroup Incorporated 03/03/2031
3,384,148
1.74
8,496,000
5.25% GlaxoSmithKline Capital 10/04/2042
7,329,723
3.77
2,880,000
A1 Rating
6.875% Goldman Sachs Group Incorporated 18/01/2038
2,796,480
1.44
ING Groep NV 29/03/2049
A2 Rating
Aa3 Rating Danske Bank AS FRN 29/12/2049
3,932,408
2.02
4,624,000
6.305% HBOS 18/10/2017
4,557,526
2.34
8,032,000
5.50% Intesa Sanpaolo 19/12/2016
7,731,839
3.98
4,725,848
2.43
2,895,513
1.48
A2 Rating 3,280,000
DNB Norbank ASA 29/03/2049 Baa1 Rating
5,568,000
A1 Rating 4,512,000
4,528,000
5,712,000
8.103% Standard Chartered Bank 11/05/2016 Commercial Banking - Total
5,557,799
2.87
54,151,136
27.85
5,232,000
MUFG Capital Finance 5 Limited FRN 25/01/2049
4,337,530
2.23
4,672,000
6.164% SMFG Preferred Capital 29/01/2049
3,856,654
1.98
A3 Rating 7,632,000
6.58% Gaz Capital SA 31/10/2013
7,156,854
3.68
4,544,000
5.50% Leaseplan Finance NV (Ireland) 01/12/2009
4,499,059
2.31
Electricity & Gas Utilities
N/A Rating
A2 Rating 5,312,000
5.75% Enel 22/06/2037
4,624,000 4,906,414
2.52
Baa1 Rating 2,880,000
% OF FUND
Aa3 Rating
Commercial Banking
4,544,000
FAIR VALUE GBP
EUROPEAN UNION (cont)
EUROPEAN UNION
7,664,000
INVESTMENT
Society of Lloyds (The) FRN 29/06/2049 Financial - Total
5.25% National Grid 02/06/2011
2,820,926
1.45
Electricity & Gas Utilities - Total
7,727,340
3.97
4,369,334
2.25
108,270,753
55.68
Insurance Baa1 Rating
Financial
6,320,000
Aaa Rating 2,880,000
4.625% Toyota Motor Credit Corporation 01/02/2011
2,862,526
1.47
5,248,000
4.625% Wellcome Trust Finance 25/07/2036
4,588,327
2.36
Aa1 Rating 4.50% Australian & New Zealand Bank Group 30/12/2009
4,642,657
2.39
4,112,000
5.75% BP Capital Markets 08/11/2010
4,194,878
2.16
6.50% General Electric Capital Corporation 15/09/2067
5,357,551
2.76
4,560,000
5.25% Shell International Finance B.V 15/01/2010
5,570,091
2.87
Insurance - Total
5,570,091
2.87
3,434,890
1.77
Supermarket & Stores A1 Rating 3,904,000
5.00% Tesco 24/03/2023 Aa2 Rating
4,720,000
5,568,000
6.772% AXA SA 29/10/2049
9,296,000
4.875% Wal-Mart Stores Incorporated 19/01/2039 Supermarket & Stores - Total
7,723,932
3.97
11,158,822
5.74
Telephone
4,599,216
2.37
5,648,000
4.875% Total Capital SA 23/12/2010
5,659,064
2.91
2,336,000
UBS AG Jersey FRN 19/11/2024
2,231,067
1.15
3,680,435
1.89
Baa2 Rating 2,352,000
6.00% Koninklijke KPN NV 29/05/2019
2,162,225
1.11
Telephone - Total
2,162,225
1.11
189,040,367
97.22
EUROPEAN UNION - TOTAL
Aa2 Rating 3,760,000
www.iShares.eu
6.75% Credit Suisse (London Branch) 18/01/2023
iShares plc Annual Report 69
iShares £ Corporate Bond Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
TOTAL VALUE OF INVESTMENTS AT BID PRICES
189,040,367
97.22
CASH*
1,681,420
0.86
OTHER NET ASSETS
2,739,867
1.41
193,461,654
99.49
1,000,165
0.51
194,461,819
100.00
TOTAL VALUE OF FUND AT BID MARKET PRICES Adjustment from bid market prices to last traded market prices TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* All cash holdings are held with The Governor & Company of the Bank of Ireland ** Related party
70 iShares plc Annual Report
www.iShares.eu
iShares £ Corporate Bond Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS GBP
LARGEST PURCHASES
COST GBP
Barclays Bank FRN 29/03/2049
8,165,285
5.25% GlaxoSmithKline Capital 10/04/2042
8,700,026
5.375% Telefonica Emisiones Sau 02/02/2018
7,474,157
Danske Bank AS FRN 29/12/2049
8,376,933
6.0884% HBOS 12/05/2015
7,036,569
6.58% Gaz Capital SA 31/10/2013
8,054,053
ABN Amro Bank 28/02/2049
6,751,087
Barclays Bank FRN 15/12/2049
7,741,132
4.875% General Electric Capital Corporation 18/09/2037
6,615,938
8.162% Argon Capital 05/10/2012
7,562,788
Standard Chartered Bank FRN 29/06/2049
6,084,338
6.772% AXA SA 29/10/2049
6,591,509
5.125% BAA 15/02/2023
5,873,360
8.103% Standard Chartered Bank 11/05/2016
6,287,085
5.50% Westfield Finance 27/06/2017
5,567,499
6.50% General Electric Capital Corporation 15/09/2067
5,971,817
Scottish Widows FRN 29/09/2049
5,238,121
5.75% Enel 22/06/2037
5,602,127
AXA SA FRN 29/07/2049
5,227,491
Society of Lloyds (The) FRN 29/06/2049
5,075,239
5.50% Goldman Sachs Group Incorporated 12/10/2021
4,866,862
6.305% HBOS 18/10/2017
4,870,676
5.25% Allied Irish Banks 10/03/2020
4,736,039
5.25% Shell International Finance B.V 15/01/2010
4,599,216
5.00% Unicredito Italiano 01/02/2016
4,291,347
5.50% Leaseplan Finance NV (Ireland) 01/12/2009
4,511,783
Danske Bank AS FRN 29/12/2049
4,176,274
4.625% Royal Bank of Canada 07/12/2010
4,489,108
5.75% Morgan Stanley 14/02/2017
3,773,871
Barclays Bank FRN 29/03/2049
4,414,139
Skandinaviska Enskilda FRN 30/11/2049
3,744,932
5.75% BP Capital Markets 08/11/2010
4,407,592
4.25% Alliance & Leicester 30/12/2008
3,696,843
6.25% Alliance & Leicester 27/09/2010
4,255,225
Old Mutual FRN 24/03/2020
3,585,291
6.164% SMFG Preferred Capital 29/01/2049
3,902,008
RBS Capital Trust FRN 08/12/2049
3,571,118
6.75% Credit Suisse (London Branch) 18/01/2023
3,808,090
5.25% France Telecom 05/12/2025
3,382,841
HBOS FRN 29/06/2049
3,239,998
www.iShares.eu
iShares plc Annual Report 71
iShares £ Corporate Bond NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 25 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Bond income Securities lending income Interest income Operating income
2008 £’000s 11,471 2 353 11,826
2007 £’000s 9,618 17 96 9,731
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 1,500 200 (100) 1,600
2007 No. of Shares ’000s 900 600 1500
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET LOSSES ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
10. FUTURES 2008 £’000s
Net fair value losses on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency losses Net losses on financial assets at fair value through profit or loss
5.
(2007: nil). (9,516)
(8,619)
(16,469) (1)
1,638 (2)
25,986
(6,983)
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE
2008 £’000s 405 405
2007 £’000s 357 357
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
2008 £’000s 200,069 202,503 203,075 189,040
2007 £’000s 125,539 200,069 126,849 203,075
2008 £’000s 4,513 8 37,434 41,955
2007 £’000s 4,204 1 62 32,003 36,270
Pay Date March June September December February March* Equalisation income Equalisation expense
2008 £’000s 2,979 2,658 2,868 3,324 11,829 (345) 11,484
2007 £’000s 1,616 1,834 2,319 2,465 2,382 10,616 1,441 12,057
* Outstanding at the year end
DEBTORS
Bond income receivable Securities lending income receivable Interest income receivable Sale of securities awaiting settlement Debtors
8.
The Fund does not hold any open futures as at 29 February 2008
OPERATING EXPENSES
Management fees Operating expenses
6.
2007 £’000s
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities awaiting settlement Creditors
72 iShares plc Annual Report
2008 £’000s 42 39,172 39,214
2007 £’000s 42 32,730 32,772
www.iShares.eu
iShares $ Corporate Bond PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 $’000s
2007 $’000s
Operating income
3
6,461
5,188
Net (losses)/gains on financial assets at fair value through profit or loss
4
(5,229)
597
1,232
5,785
(224)
(180)
1,088
5,605
(5,873)
(4,997)
(79)
-
(4,944)
608
49
902
(4,895)
1,510
Total investment income Operating expenses
5
Net income Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense (Loss)/Profit before tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/Increase in net assets attributable to Redeemable Participating Shareholders from operations
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 $’000s
2007 $’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
96,229
94,719
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(4,895)
1,510
Share transactions Proceeds from issue of Redeemable Participating Shares
31,337
-
Payments on redemption of Redeemable Participating Shares
(10,259)
-
Net assets attributable to Redeemable Participating Shareholders at the end of the year
112,412
96,229
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 $’000s
2007 $’000s
Current assets Financial assets at fair value through profit or loss
6
111,099
94,900
Debtors
7
23,899
8,118
344
509
135,342
103,527
8
(22,940)
(6,839)
11
-
(420)
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders)
(22,940)
(7,259)
Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: $000s 95,660)
112,402
96,268
10
(39)
112,412
96,229
1,100,000
900,000
$102.19
$106.92
Cash and bank balances Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 900,000) Net Asset Value per Redeemable Participating Share (2006: $105.24)
9
The accompanying notes form an integral part of the financial statements.
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iShares plc Annual Report 73
iShares $ Corporate Bond SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE USD
% OF FUND
HOLDING
UNITED STATES
UNITED STATES (cont)
Communication
Financial (cont)
FAIR VALUE USD
% OF FUND
Aa3 Rating (cont)
A2 Rating 3,487,000
INVESTMENT
6.50% AT&T Incorporated 01/09/2037
3,562,174
3.17
Communication - Total
3,562,174
3.17
3,300,000
5.30% Wachovia Corporation 15/10/2011
3,435,748
3.06
3,356,368
2.99
Aaa Rating 3,377,000
Electrical & Electronics Baa2 Rating 3,597,000
Baa1 Rating
6.95% Comcast Corporation 15/08/2037
3,656,704
3.25
Electrical & Electronics - Total
3,656,704
3.25
2,585,000
5.35% Bear Stearns Companies Incorporated 01/02/2012
2,529,898
2.25
2,585,000
6.40% Metlife Incorporated 15/12/2036
2,309,180
2.06
2,585,000
A1 Rating
6.625% Pemex Project Funding Master Trust 15/06/2035
5.625% Conocophillips 15/10/2016
Financial - Total
Energy 2,585,000
6.15% General Electric Capital Corporation 07/08/2037
2,696,489
2.40
6.125% Midamerican Energy Holdings Company 01/04/2036
3,473,254
3.09
Energy - Total
6,169,743
5.49
2,623,775
2.33
74,227,672
66.03
Baa1 Rating 3,520,000
Food & Kindred Products Baa2 Rating 3,080,000
Financial
6.50% Kraft Foods Incorporated 11/08/2017
3,185,228
2.84
Food & Kindred Products - Total
3,185,228
2.84
A1 Rating 3,135,000 3,080,000
6.15% American Express Company 28/08/2017 5.25% Lehman Brothers Holdings Incorporated 06/02/2012
Insurance 3,203,165
2.85
Aa2 Rating 2,585,000
3,057,307
2.72
A2 Rating 4,015,000
6.11% Merrill Lynch & Company Incorporated 29/01/2037
3,342,031
2.97
2,585,000
6.50% Target Corporation 15/10/2037
2,497,223
2.22
A3 Rating 3,135,000 2,893,000
2,967,181
2.64
7.625% CIT Group Incorporated 30/11/2012
2,919,384
2.60
4,166,522
3.71
2.25
5.70% IBM Corporation 14/09/2017
6,173,971
5.49
Machinery Except Electrical - Total
6,173,971
5.49
Medical A3 Rating
4,180,000
5.30% Bank of America 15/03/2017
4,972,000
6.00% JP Morgan Chase Bank New York 01/10/2017
5,129,133
4.56
4,895,000
4.375% Wells Fargo & Company 31/01/2013
4,949,298
4.40
3,476,000
2.90
3,363,414
2.99
Medical - Total
3,363,414
2.99
Aa2 Rating 5,379,000
3,263,227
5.95% Wyeth 01/04/2037
Supermarket & Stores
Aa2e Rating 6.00% Credit Suisse New York 15/02/2015
2.25
2,527,447
A1 Rating
Aa1 Rating
3,201,000
2,527,447
Insurance - Total Machinery Except Electrical 5,885,000
6.75% Capital One Financial Corporation 15/09/2017
5.45% American International Group Incorporated 18/05/2017
Aa3 Rating
6.50% Wal-Mart Stores Incorporated 15/02/2008
5,600,300
4.98
Supermarket & Stores - Total
5,600,300
4.98
6,996,000
6.125% Citigroup Incorporated 21/11/2017
7,263,850
6.46
4,521,000
6.25% Goldman Sachs Group Incorporated 01/09/2017
4,742,326
4.22
4,422,000
6.50% HSBC Holdings 15/09/2037
4,124,016
3.67
5.55% verizon Communications 15/02/2016
2,631,867
2.34
5,720,000
5.45% Morgan Stanley 09/01/2017
5,501,915
4.89
Telephone - Total
2,631,867
2.34
2,915,000
5.55% Procter & Gamble Company 05/03/2037
111,098,520
98.83
2,846,125
2.53
74 iShares plc Annual Report
Telephone A3 Rating 2,585,000
UNITED STATES - TOTAL
www.iShares.eu
iShares $ Corporate Bond Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE USD
% OF FUND
TOTAL VALUE OF INVESTMENTS AT BID PRICES
111,098,520
98.83
CASH*
344,258
0.31
OTHER NET ASSETS
958,964
0.85
112,401,742
99.99
9,967
0.01
112,411,709
100.00
TOTAL VALUE OF FUND AT BID MARKET PRICES Adjustment from bid market prices to last traded market prices TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* All cash holdings are held with The Governor & Company of the Bank of Ireland
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iShares plc Annual Report 75
iShares $ Corporate Bond Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS USD
LARGEST PURCHASES
COST USD
6.45% Comcast Corporation 15/03/2037
5,122,914
6.125% Citigroup Incorporated 21/11/2017
7,152,291
6.125% Citigroup Incorporated 25/08/2036
4,058,774
5.70% IBM Corporation 14/09/2017
7,065,408
5.125% Credit Suisse FB (USA) Incorporated 15/08/2015
3,965,204
6.00% JP Morgan Chase Bank New York 01/10/2017
6,940,480
4.875% Wells Fargo & Company 12/01/2011
3,456,610
6.25% Goldman Sachs Group Incorporated 01/09/2017
6,531,470
5.625% Vodafone Group 27/02/2017
2,921,184
5.45% Morgan Stanley 09/01/2017
6,153,111
6.00% JP Morgan Chase Bank New York 01/10/2017
1,927,071
6.50% Wal-Mart Stores Incorporated 15/02/2008
6,078,871
6.25% Goldman Sachs Group Incorporated 01/09/2017
1,788,611
6.50% HSBC Holdings 15/09/2037
5,468,067
7.995% Embarq Corporation 01/06/2036
1,384,033
4.375% Wells Fargo & Company 31/01/2013
4,943,461
5.25% Lehman Brothers Holdings Incorporated 06/02/2012
1,365,998
6.95% Comcast Corporation 15/08/2037
4,904,758
6.25% Canadian National Resources 15/03/2038
1,345,445
6.15% General Electric Capital Corporation 07/08/2037
4,855,647
5.35% Bear Stearns Companies Incorporated 01/02/2012
1,343,199
6.50% AT&T Incorporated 01/09/2037
4,726,195
5.00% General Electric Company 01/02/2013
1,339,721
5.95% Wyeth 01/04/2037
4,582,612
5.55% Verizon Communications 15/02/2016
1,328,461
5.30% Bank of America 15/03/2017
4,459,232
5.40% Western Union Company 17/11/2011
1,326,930
6.45% Comcast Corporation 15/03/2037
4,415,685
5.30% International Lease Finance Corporation 01/05/2012
1,325,478
5.125% Credit Suisse FB (USA) Incorporated 15/08/2015
3,954,456
5.30% Goldman Sachs Group Incorporated 14/02/2012
1,323,816
5.25% Lehman Brothers Holdings Incorporated 06/02/2012
3,566,437
5.875% Abbott Laboratories 15/05/2016
1,320,518
6.50% Kraft Foods Incorporated 11/08/2017
3,559,550
5.625% Shell International Finance 27/06/2011
1,319,459
6.15% American Express Company 28/08/2017
3,522,910
5.75% Wachovia Corporation 15/06/2017
1,311,301
6.125% Citigroup Incorporated 25/08/2036
3,469,404
5.60% Abbott Laboratories 15/05/2011
1,308,170
6.75% Capital One Financial Corporation 15/09/2017
3,422,854
76 iShares plc Annual Report
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iShares € Corporate Bond Notes to the Financial Statements for the thirteen month period ended 31 October 2007 (continued) 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 25 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Bond income Interest income Operating income
2008 $’000s 6,358 103 6,461
2007 $’000s 5,163 25 5,188
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 900 300 (100) 1,100
2007 No. of Shares ’000s 900 900
The issued and fully paid redeemable participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and
4.
are classified as financial liabilities.
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2008 $’000s
Net fair value losses on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency (losses)/gains Net gains on financial assets at fair value through profit or loss
5.
(2,871)
(2,540)
(2,644) 232
3,138 (1)
(5,229)
597
2008 $’000s 224 224
2007 $’000s 180 180
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
2008 $’000s 93,661 112,504 94,900 111,099
2007 $’000s 96,366 96,661 94,446 94,900
2008 $’000s 1,734 1 22,155 23,899
2007 $’000s 1,403 13 6,702 8,118
The Fund does not hold any open futures as at 29 February 2008 (2007: nil). 11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared monthly.
Pay Date April May June July August September October November December January February March* Equalisation income
2008 $’000s 395 382 582 484 486 575 492 596 544 544 1,085 6,165 (292) 5,873
2007 $’000s 489 351 641 376 382 432 362 374 319 392 459 420 4,997 4,997
* Outstanding at year end
DEBTORS
Bond income receivable Interest income receivable Sale of securities awaiting settlement Debtors
8.
10. FUTURES
OPERATING EXPENSES
Management fees Operating expenses
6.
2007 $’000s
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities awaiting settlement Creditors
www.iShares.eu
2008 $’000s 22 22,918 22,940
2007 $’000s 19 6,820 6,839
iShares plc Annual Report 77
iShares $ Treasury Bond 1-3 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net gains/(losses) on financial assets at fair value through profit or loss
4
Total investment income Operating expenses
5
Net income
2008 $’000s
2007* $’000s
5,821
5,144
5,138
(129)
10,959
5,015
(254)
(203)
10,705
4,812
(5,481)
(4,342)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense
(63)
Profit before tax Adjustment from bid market prices to last traded market prices
1
Increase in net assets attributable to Redeemable Participating Shareholders from operations
5,161
470
219
36
5,380
506
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 $’000s
2007* $’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
126,794
-
Increase in net assets attributable to Redeemable Participating Shareholders from operations
5,380
506
94,826
193,396
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares Net assets attributable to Redeemable Participating Shareholders at the end of the year
(109,988)
(67,108)
117,012
126,794
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 $’000s
2007* $’000s
Current assets Financial assets at fair value through profit or loss
6
115,989
125,604
Debtors
7
20,462
9,814
Cash and bank balances
124
772
136,575
136,190
8
(19,818)
(7,518)
11
Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
-
(1,914)
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders)
(19,818)
(9,432)
Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices)
116,757
126,758
255
36
Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue Net Asset Value per Redeemable Participating Share
9
117,012
126,794
920,000
1,040,000
$127.19
$ 121.92
The accompanying notes form an integral part of the financial statements. * For the period commencing 2 June 2006 and ending 28 February 2007.
78 iShares plc Annual Report
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iShares $ Treasury Bond 1-3 SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE USD
% OF FUND
HOLDING
6,821,297
4.00% US Treasury Notes 30/09/2009*
9,959,000
3.25% US Treasury Notes 31/12/2009*
7,015,000
4.875% US Treasury Notes 30/06/2009*
7,307,657
6.25
11,063,000
4.875% US Treasury Notes 15/08/2009*
11,566,020
9.88
8,280,000
4.00% US Treasury Notes 31/08/2009*
8,558,156
7.31
9,269,000
4.625% US Treasury Notes 15/11/2009*
9,715,071
8.30
8,671,000
3.125% US Treasury Notes 30/11/2009*
8,871,517
7.58
6,854,000
4.75% US Treasury Notes 15/02/2010*
7,243,821
6.19
2.00% US Treasury Notes 28/02/2010*
10,751,790
9.19
7,736,625 10,221,979
7,544,000
4.50% US Treasury Notes 15/05/2010*
7,987,210
6.83
8,418,000
3.625% US Treasury Notes 31/10/2009*
8,674,486
7.41
10,465,000
2.125% US Treasury Notes 31/01/2010*
10,533,676
9.00
UNITED STATES - TOTAL
115,989,305
99.12
TOTAL VALUE OF INVESTMENTS
115,989,305
99.12
CASH**
124,171
0.11
OTHER NET ASSETS
643,926
0.55
116,757,402
99.78
254,476
0.22
117,011,878
100.00
5.83
7,475,000
10,695,000
% OF FUND
N/A Rating (cont)
N/A Rating 4.625% US Treasury Notes 31/07/2009*
FAIR VALUE USD
UNITED STATES (cont)
UNITED STATES 6,555,000
INVESTMENT
6.61 8.74
TOTAL VALUE OF FUND AT BID Adjustment from bid market prices to last traded market prices TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* Prices are sources from Barclays Capital. ** All cash holdings are held with The Governor & Company of the Bank of Ireland
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iShares plc Annual Report 79
iShares $ Treasury Bond 1-3 Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited)
LARGEST SALES
PROCEEDS USD
LARGEST PURCHASES
COST USD
4.875% US Treasury Notes 15/05/2009
20,366,934
4.875% US Treasury Notes 31/05/2009
15,761,912
4.875% US Treasury Notes 31/05/2009
16,079,702
4.875% US Treasury Notes 30/06/2009
14,957,447
4.50% US Treasury Notes 15/02/2009
14,873,354
4.00% US Treasury Notes 31/08/2009
14,070,263
4.75% US Treasury Notes 28/02/2009
14,139,662
4.75% US Treasury Notes 28/02/2009
13,975,542
4.50% US Treasury Notes 30/04/2009
14,075,374
4.50% US Treasury Notes 15/05/2010
13,884,736
4.75% US Treasury Notes 31/12/2008
13,555,024
4.50% US Treasury Notes 30/04/2009
13,791,910
4.875% US Treasury Notes 31/01/2009
13,383,197
4.50% US Treasury Notes 31/03/2009
13,116,173
4.50% US Treasury Notes 31/03/2009
13,317,592
3.625% US Treasury Notes 31/10/2009
12,854,904
4.625% US Treasury Notes 30/09/2008
10,962,469
3.125% US Treasury Notes 30/11/2009
12,480,600
4.875% US Treasury Notes 31/10/2008
10,811,191
4.00% US Treasury Notes 30/09/2009
11,558,532
4.875% US Treasury Notes 31/08/2008
9,669,740
4.625% US Treasury Notes 31/07/2009
11,196,028
5.125% US Treasury Notes 30/06/2008
9,527,224
4.875% US Treasury Notes 15/05/2009
10,954,077
5.00% US Treasury Notes 31/07/2008
9,515,790
2.00% US Treasury Notes 28/02/2010
10,751,790
4.875% US Treasury Notes 31/05/2008
9,301,447
2.125% US Treasury Notes 31/01/2010
10,479,277
4.625% US Treasury Notes 30/11/2008
9,271,693
4.625% US Treasury Notes 15/11/2009
10,171,410
4.625% US Treasury Notes 15/11/2009
8,829,559
4.875% US Treasury Notes 15/08/2009
10,162,117
4.75% US Treasury Notes 15/02/2010
8,430,167
3.25% US Treasury Notes 31/12/2009
10,072,990
4.375% US Treasury Notes 15/11/2008
8,398,697
4.75% US Treasury Notes 31/12/2008
8,882,764
4.875% US Treasury Notes 30/06/2009
7,912,133
4.875% US Treasury Notes 31/01/2009
8,630,673
4.125% US Treasury Notes 15/08/2008
7,091,150
4.75% US Treasury Notes 15/02/2010
7,836,087
80 iShares plc Annual Report
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iShares $ Treasury Bond 1-3 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Bond income Interest income Operating income
2008 $’000s 5,742 79 5,821
2007 $’000s 5,133 11 5,144
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 1,040 760 (880) 920
2007 No. of Shares ’000s 1,600 (560) 1,040
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified
4.
as financial liabilities.
NET GAINS/(LOSSES) ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2008 $’000s
Net fair value losses on sale of investments Net change in fair value appreciation on investments Fair value currency gains Net gains/(losses) on financial assets at fair value through profit or loss
2007 $’000s
10. FUTURES The Fund does not hold any open futures as at 29 February 2008
2,751
(98)
(2007: nil).
2,389 (2)
(48) 17
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE
5,138
(129)
PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
5.
OPERATING EXPENSES
Management fees Operating expenses
6.
2008 $’000s 254 254
2007 $’000s 203 203
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
2007 $’000s 125,431 125,431
2008 $’000s 734 19,728 20,462
2007 $’000s 1,081 6 8,727 9,814
Equalisation income Equalisation expense
2008 $’000s 2,803 2,396 5,199 (434) 716 5,481
2007 $’000s 1,050 1,914 2,964 (327) 1,705 4,342
* Outstanding at the year end
DEBTORS
Bond income receivable Interest income receivable Sale of securities awaiting settlement Debtors
8.
2008 $’000s 125,431 113,427 125,604 115,989
Pay Date September December February March*
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities awaiting settlement Interest expense payable Creditors
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2008 $’000s 21 19,796 1 19,818
2007 $’000s 28 7,490 7,518
iShares plc Annual Report 81
iShares AEX PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net losses/gains on financial assets at fair value through profit or loss
4
Total investment (loss)/income Operating expenses
5
Net (deficit)/income
2008 €’000s
2007* €’000s
2,137
1,108
(9,475)
2,917
(7,338)
4,025
(228)
(111)
(7,566)
3,914
1,640
(729)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(2)
-
(9,208)
3,185
(266)
(269)
39
1
(9,435)
2,917
There are no recognised gains or losses arising in the year other than the decrease in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007* €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
58,729
27,510
(Decrease)/Increase in net assets attributable to Redeemable Participating Shareholders from operations
(9,435)
2,917
Share transactions Proceeds from issue of Redeemable Participating Shares
99,070
47,716
Payments on redemption of Redeemable Participating Shares
(45,937)
(19,414)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
102,427
58,729
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007* €’000s
Current assets Financial assets at fair value through profit or loss
6
102,346
58,701
Debtors
7
172
63
Bank overdraft
-
5
102,518
58,769
8
(30)
(17)
11
-
(25)
Cash and bank balances
(102)
-
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders)
(132)
(42)
102,386
58,727
41
2
Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €'000s 27,509) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 600,000) Net Asset Value per Redeemable Participating Share (2006: €45.85)
9
102,427
58,729
2,300,000
1,200,000
€44.53
€48.94
The accompanying notes form an integral part of the financial statements.
82 iShares plc Annual Report
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iShares AEX SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
Banks Fortis Com NPV
120,080
Fortis VVPR Strip Heineken NV Com EUR 1.60
5.94
196,622
1,201
-
84,452
45,909
2,487,041
2.43
404,747
0.39
Vedior Com EUR 0.05
764,385
0.75
7,979,533
7.79
3,233,410
3.16
Delivery Services 123,838
TNT NV Com EUR 0.48
9,756 126,137
Randstad Holdings NV Com EUR 0.10
Koninklijke Philips Electronic NV Com EUR 0.20
Koninklijke KPN NV Com EUR 0.24 Unilever NV CVA Com EUR 0.16
4,876,452
4.76
9,366,689
9.14
3,707,596
3.62
Food Retailers & Wholesalers 424,696 49,354 132,276
Koninklijke Ahold NV Com EUR 0.30
1.54
2,028,283
1.98
ASM Lithography Holding NV Com EUR 0.09
75,753
Akzo Nobel NV Com EUR 2.00
3,688,414
3.60
50,476
Koninklijke DSM NV Com EUR 1.50
1,471,375
1.44
12,579,506
12.28
65,035
0.06
Steel 248,656 1,284
ArcelorMittal Com NPV (Netherlands) ArcelorMittal Com NPV (France)
14,346
TomTom NV Com EUR 0.20
447,594
0.44
EUROPEAN UNION - TOTAL
102,345,526
99.92
TOTAL VALUE OF INVESTMENTS AT BID PRICES
102,345,526
99.92
Industrial Suppliers
BANK OVERDRAFT*
(102,072)
(0.10)
Corporate Express NV Com EUR 1.20
385,948
0.38
OTHER NET ASSETS
142,291
0.14
Hagemeyer Com EUR 1.20
636,248
0.62
Integrated Oil & Gas 777,464
1,576,082
Unibail-Rodamco Com EUR 5.00
Telecommunications Equipment
Food Products 456,244
1.41
Specialty Chemicals
Fixed Line Telecommunications 389,493
2.37
1,449,196
Semiconductors
Consumer Electronics 307,378
2,430,248
Wolters Kluwer Com EUR 0.12 Real Estate Investment Trusts
Business Training & Employment Agencies 16,055
Reed Elsevier NV Com EUR 0.07
Publishing 6,082,669
Brewers 66,534
% OF FUND
EUROPEAN UNION (cont)
EUROPEAN UNION 414,916
FAIR VALUE EUR
INVESTMENT
Royal Dutch Shell Class 'A' Com EUR 0.07 (Dutch Listing)
18,425,897
17.99
4,312,847
4.21
13,159,475
12.85
785,655
0.77
Life Insurance 433,452
Aegon NV Com EUR 0.12
591,703
ING Groep NV CVA Com EUR 0.24
TOTAL VALUE OF FUND AT BID MARKET PRICES
102,385,745
99.96
Adjustment from bid market prices to last traded market prices
40,873
0.04
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
102,426,618
100.00
* All cash holdings are held with The Governor & Company of the Bank of Ireland
Oil Equipment & Services 36,730
www.iShares.eu
SBM Offshore NV Com EUR 0.25
iShares plc Annual Report 83
iShares AEX Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
ABN-Amro (Assented Line RBS Offer)
9,439,910
Royal Dutch Shell Class 'A' Com EUR0.07 (Dutch Listing)
21,430,729
Royal Dutch Shell Class 'A' Com EUR0.07 (Dutch Listing)
8,269,577
ING Groep NV CVA Com EUR0.24
15,369,164
ING Groep NV CVA Com EUR0.24
6,707,059
Unilever NV CVA Com EUR0.16
9,679,374
Fortis Com NPV
6,254,885
Fortis Com NPV
8,202,695
Unilever NV CVA Com EUR0.16
4,507,349
Koninklijke Philips Electronic NV Com EUR0.20
8,152,554
Koninklijke Philips Electronic NV Com EUR0.20
4,438,352
ArcelorMittal Com NPV (France)
6,519,528
Koninklijke KPN NV Com EUR0.24
3,539,852
ArcelorMittal Com NPV (Netherlands)
5,661,064
ABN-Amro Holdings Com NPV
3,267,192
Aegon NV Com EUR0.12
5,103,627
ArcelorMittal Com NPV (Netherlands)
2,826,641
Koninklijke KPN NV Com EUR0.24
4,900,033
Aegon NV Com EUR0.12
2,450,380
Akzo Nobel NV Com EUR2.00
3,745,794
Numico (Koninklijke) Assented Line
1,811,315
ABN-Amro Holdings Com NPV
3,714,071
Akzo Nobel NV Com EUR2.00
1,759,009
Koninklijke Ahold NV Com EUR0.30
3,666,382
ArcelorMittal Com NPV (France)
1,711,961
TNT NV Com EUR0.48
3,331,766
Heineken NV Com EUR1.60
1,684,926
Heineken NV Com EUR1.60
3,200,207
TNT NV Com EUR0.48
1,539,995
ASM Lithography Holding NV Com EUR0.09
2,651,762
ASM Lithography Holding NV Com EUR0.09
1,125,103
Reed Elsevier NV Com EUR0.07
2,123,037
Koninklijke Ahold NV Com EUR0.30
912,531
Wolters Kluwer Com EUR0.12
1,687,335
Reed Elsevier NV Com EUR0.07
911,682
Koninklijke DSM NV Com EUR1.50
1,601,316
Wolters Kluwer Com EUR0.12
797,303
Unibail-Rodamco Com EUR5.00
1,090,408
Koninklijke DSM NV Com EUR1.50
782,052
Numico (KON) NV Com EUR0.25
1,008,916
84 iShares plc Annual Report
www.iShares.eu
iShares AEX NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Dividend income Securities lending income Interest income Operating income
2008 €’000s 2,096 28 13 2,137
2007 €’000s 1,106 2 1,108
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 1,200 2,000 (900) 2,300
2007 No. of Shares ’000s 600 1,000 (400) 1,200
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency losses Net fair value (losses)/gains on sale of futures contracts Net gains on financial assets at fair value through profit or loss
5.
2007 €’000s
5,149
2,021
(14,578) (5)
892 -
(41)
4
(9,475)
2,917
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE
2008 €’000s 228 228
2007 €’000s 111 111
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
2008 €’000s 55,469 113,692 58,701 102,346
2007 €’000s 25,158 55,469 27,498 58,701
2008 €’000s 165 7 172
2007 €’000s 62 1 63
PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
Pay Date June September December February March* Equalisation income Equalisation expense
2008 €’000s 635 721 235 144 1,735 (110) 15 1,640
2007 €’000s 303 299 81 25 708 (30) 51 729
* Outstanding at the year end
DEBTORS
Dividends receivable Securities lending income receivable Interest income receivable Debtors
8.
The Fund does not hold any open futures as at 29 February 2008 (2007: nil).
OPERATING EXPENSES
Management fees Operating expenses
6.
10. FUTURES 2008 €’000s
CREDITORS (amounts falling due within one year)
Accrued expenses Creditors
www.iShares.eu
2008 €’000s 30 30
2007 €’000s 17 17
iShares plc Annual Report 85
iShares DJ Asia/Pacific Select Dividend PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net gains on financial assets at fair value through profit or loss
4
Total investment income Operating expenses
5
Net income
2008 $’000s
2007* $’000s
7,238
1,236
4,082
7,869
11,320
9,105
(780)
(140)
10,540
8,965
(6,126)
(607)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense Profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
Increase in net assets attributable to Redeemable Participating Shareholders from operations
(33)
-
4,381
8,358
(176)
(40)
293
216
4,498
8,534
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 $’000s
2007* $’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
93,667
-
Increase in net assets attributable to Redeemable Participating Shareholders from operations
4,498
8,534
Share transactions Proceeds from issue of Redeemable Participating Shares
66,643
91,920
Payments on redemption of Redeemable Participating Shares
(51,528)
(6,787)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
113,550
93,667
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 $’000s
2007* $’000s
Current assets Financial assets at fair value through profit or loss
6
112,298
92,756
Debtors
7
681
580
Cash and bank balances Total current assets
127
814
113,106
94,150
Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
8
(65)
(50)
11
-
(649)
(65)
(699)
113,041
93,451
509
216
113,550
93,667
3,200,000
2,800,000
$35.48
$33.45
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid prices) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 600,000) Net Asset Value per Redeemable Participating Share
9
The accompanying notes form an integral part of the financial statements. * For the period commencing 1 June 2006 and ending 28 February 2007.
86 iShares plc Annual Report
www.iShares.eu
iShares DJ Asia/Pacific Select Dividend SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE USD
% OF FUND
HOLDING
Airlines Qantas Airways Com NPV Australia & New Zealand Bank Group Com NPV
2.41
524,000
Citic Pacific Com HKD 0.40
2,820,674
China Light & Power Holdings Com HKD 5.00
3,486,245
3.07
568,000
3,219,371
2.84
2,204,118
1.94
Hong Kong Electric Holdings Com HKD 1.00
131,357
National Australia Bank Com NPV
3,538,694
3.12
Telecommunications Equipment
110,796
St George Bank Limited Com NPV
2,462,453
2.17
247,893
Suncorp-Metway Limited Com NPV
3,225,438
2.84
116,508
Westpac Banking Corporation Com NPV
2,533,822
2.23
3,133,380
2.76
526,000
CSR Limited Ord NPV
3,708,964
3.27
4,141,416
3.65
Futuris Corporation Ord NPV Telstra Corporation Com NPV
3,156,040
2.78
4,404,663
3.88
4,589,989
4.04
Gambling 323,253
Tabcorp Holdings Limited Com NPV Perpetual Limited Com NPV Zinifex Com NPV
3,144,403
2.77
6,065,784
Insurance Australia Group Com NPV APN News & Media Ord NPV
4,089,144
3.60
4,156,997
3.66
Bluescope Steel Limited Com NPV
4,146,403
3.65
1,199,344 1,593,416
7.57
Singapore Petrol Company Com SGD0.50
2,977,624
2.62
SINGAPORE - TOTAL
2,977,624
2.62
AT BID PRICES
112,298,345
98.90
CASH*
127,236
0.11
OTHER NET ASSETS
615,611
0.54
113,041,192
99.55
508,770
0.45
113,549,962
100.00
MARKET PRICES Adjustment from bid market prices
Transportation Services 4,395,311
7.57
8,592,480
TOTAL VALUE OF FUND AT BID
Steel 410,061
8,592,480
NEW ZEALAND - TOTAL
TOTAL VALUE OF INVESTMENTS
Publishing 897,795
Telecom Corporation of New Zealand Com NPV
5.34
Property & Casualty Insurance 1,187,920
4.14
Integrated Oil & Gas 600,000
Nonferrous Metals 583,681
4.14
4,707,683
SINGAPORE
Investment Services 61,680
4,707,683
JAPAN - TOTAL
Fixed Line Telecommunications 2,768,773
Fixed Line Telecommunications 970,898
Takefuji Corporation Com NPV
NEW ZEALAND
Farming & Fishing 1,687,000
2.32 13.43
Consumer Finance 183,900
Diversified Industrials 1,329,558
2,636,541 15,242,728
JAPAN
Containers & Packaging Amcor Limited Ord NPV
Vtech Holdings Com USD 0.05 HONG KONG - TOTAL
Brewers
560,836
2.55
442,500 2.48
Commonwealth Bank of Australia Ord NPV
Lion Nathan Limited Com NPV
2,892,535
Electricity
55,970
359,804
% OF FUND
Diversified Industrials 2,736,862
Banks 137,067
FAIR VALUE USD
HONG KONG (cont)
AUSTRALIA 693,335
INVESTMENT
to last traded market prices
Babcock & Brown Infrastructure Group Stapled Units
4,892,535
4.31
MacQuarie Airports Com NPV Stapled Fully Paid
3,915,314
3.45
MacQuarie Infrastructure Group Com NPV Stapled
4,337,301
3.82
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* All cash holdings are held with The Governor & Company of the Bank of Ireland
Waste & Disposal Services 110,796
Sims Group Limited Com NPV AUSTRALIA - TOTAL
3,373,436
2.97
80,777,830
71.14
3,008,036
2.65
HONG KONG Banks 1,199,000
www.iShares.eu
BOC Hong Kong Holdings Limited Ord HKD 5.00
iShares plc Annual Report 87
iShares DJ Asia/Pacific Select Dividend Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
Alinta Limited Com NPV
9,976,439
Telecom Corporation of New Zealand Com NPV
7,767,108
Singapore Telecommunications Limited Com SGD0.15
5,911,029
Zinifex Com NPV
7,170,768
Sims Group Limited Com NPV
5,776,242
Alinta Limited Com NPV
6,703,877
Onesteel Com NPV
5,136,945
Singapore Petrol Company Com SGD0.50
6,626,672
Singapore Petrol Company Com SGD0.50
5,042,359
MacQuarie Airports Com NPV Stapled Fully Paid
4,819,321
Telstra Corporation Com NPV
4,917,468
APN News & Media Ord NPV
4,761,904
Orient Overseas International Limited Com USD0.10
4,370,619
Babcock & Brown Infrastructure Group Stapled Units
4,512,076
The Bank of East Asia Com HKD2.50
3,695,897
Takefuji Corporation Com NPV
4,175,798
Citic Pacific Com HKD0.40
3,619,836
Perpetual Limited Com NPV
4,057,476
Bluescope Steel Limited Com NPV
3,408,529
Insurance Australia Group Com NPV
3,856,968
Telecom Corporation of New Zealand Com NPV
3,205,875
MacQuarie Infrastructure Group Com NPV Stapled
3,586,831
Commonwealth Bank of Australia Ord NPV
3,124,483
Telstra Corporation Com NPV
3,406,295
Westpac Banking Corporation Com NPV
3,091,414
Sims Group Limited Com NPV
3,200,680
Lion Nathan Limited Com NPV
2,791,081
Bluescope Steel Limited Com NPV
3,045,646
Futuris Corporation Ord NPV
2,327,497
Tabcorp Holdings Limited Com NPV
2,957,724
Babcock & Brown Infrastructure Group Stapled Units
2,327,305
National Australia Bank Com NPV
2,937,501
Vtech Holdings Com USD0.05
2,244,962
Suncorp-Metway Limited Com NPV
2,810,513
Suncorp-Metway Limited Com NPV
1,901,015
CSR Limited Ord NPV
2,531,912
BOC Hong Kong Holdings Limited Ord HKD5.00
1,821,776
Vtech Holdings Com USD0.05
2,438,218
National Australia Bank Com NPV
1,800,155
Futuris Corporation Ord NPV
2,276,624
88 iShares plc Annual Report
www.iShares.eu
iShares DJ Asia/Pacific Select Dividend NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Dividends income Interest income Operating income
2008 $’000s 7,151 87 7,238
2007 $’000s 1,193 43 1,236
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 2,800 1,800 (1,400) 3,200
2007 No. of Shares ’000s 3,000 (200) 2,800
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders’ option and are classified
4.
as financial liabilities.
NET GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency (losses)/gains Net gains on financial assets at fair value through profit or loss
2008 $’000s
2007 $’000s
10. FUTURES
9,670
2,577
(2007: nil).
(5,509) (79)
5,217 75
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE
4,082
7,869
Dividends will normally be declared quarterly with a view to them
The Fund does not hold any open futures as at 29 February 2008
PARTICIPATING SHAREHOLDERS being paid in March, June, September and December of each year.
5.
OPERATING EXPENSES
Management fees Operating expenses
6.
2008 $’000s 780 780
2007 $’000s 140 140
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
2007 $’000s 87,539 92,756
2008 $’000s 681 681
2007 $’000s 550 30 580
Equalisation income Equalisation expense
2008 $’000s 2,235 1,312 2,336 719 6,602 (832) 356 6,126
2007 $’000s 68 588 649 1,305 (750) 52 607
* Outstanding at the year end
DEBTORS
Dividends receivable Interest income receivable Debtors
8.
2008 $’000s 87,539 112,590 92,756 112,298
Pay Date June September December February March*
CREDITORS (amounts falling due within one year)
Accrued expenses Creditors (amounts falling due within one year)
www.iShares.eu
2008 $’000s 65 65
2007 $’000s 50 50
iShares plc Annual Report 89
iShares DJ Euro STOXX Growth PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net (losses)/gains on financial assets at fair value through profit or loss
4
Total investment (loss)/income Operating expenses
5
Net (deficit)/income
2008 €’000s
2007 €’000s
2,356
1,579
(36,745)
4,414
(34,389)
5,993
(615)
(252)
(35,004)
5,741
(1,629)
(994)
(36,633)
4,747
(125)
(334)
328
(37)
(36,430)
4,376
Finance costs Distributions to Redeemable Participating Shareholders
11
(Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
There are no recognised gains or losses arising in the year other than the decrease in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
86,454
26,359
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(36,430)
4,376
247,995
74,417
Payments on redemption of Redeemable Participating Shares
(67,443)
(18,698)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
230,576
86,454
Share transactions Proceeds from issue of Redeemable Participating Shares
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
Debtors
7
230,198
86,433
23
6,074
146
198
230,367
92,705
8
(98)
(6,078)
11
-
(152)
(98)
(6,230)
230,269
86,475
307
(21)
230,576
86,454
8,400,000
3,000,000
€27.45
€28.82
Cash and bank balances Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €000's 26,343) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 1,000,000) Net Asset Value per Redeemable Participating Share (2006: €26.36)
9
The accompanying notes form an integral part of the financial statements.
90 iShares plc Annual Report
www.iShares.eu
iShares DJ Euro STOXX Growth SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
EUROPEAN UNION
77,753
Distillers & Vintners
European Aeronautic Defense Space Com EUR1.00
1,676,884
0.73
Safran Com EUR 0.20
1,031,782
0.45
51,795
Apparel Retailers 76,078
Inditex SA Com EUR 0.15
2,611,758
216,074
Anglo Irish Bank Corporation Ord EUR 0.16
941,586
Banco Comercial Portugues SA Com EUR 1.00 (Regd)
1,789,013
0.78
292,764
Banco De Sabadell SA Com EUR 0.125
1,785,860
0.77
274,199
0.12
Banco Espanol De Credito Com EUR 0.79
2,026,774
0.88
2,398,417
1.04
227,461
Banco Popular Espanol Com EUR 0.10 (Post Sudsidised)
2,367,869
1.03
22,329,200
9.68
375,600 91,915 279,484 2,691,166 128,411 142,060 14,594 191,621
Banca Monte Dei Paschi Di Siena Com EUR 0.67
1,124,922
0.49
1,755,577
0.76
Intesa Sanpaolo Di Risp Com EUR 0.52 (Non Convertible)
1,169,641
0.51
11,928,593
5.17
1,632,104
0.71
Mediobanca Di Credito Finanz SPA Com EUR 0.50 National Bank of Greece Com EUR 5.00 (Regd) Raiffeisen International Bank Holding AG Com NPV (Regd) UBI Banca Com EUR 2.50
5,142,572 1,241,220 2,962,461
2.23
58,654
Heineken NV Com EUR 1.60 Inbev Com NPV RTL Group Com NPV
2,744,963 3,519,240
1.19
Metro AG Ord NPV
1,003,476
0.44
36,096
Union Fenosa SA Com EUR 3.00
1,575,590
0.68
1,502,295
0.65
7,972,926
3.46
100,153
CRH Ord EUR 0.32
Groupe Danone Com EUR 0.25 Food Retailers & Wholesalers
163,040
Carrefour Com EUR 2.50
7,610,707
3.30
377,551
Koninklijke Ahold NV Com EUR 0.30
3,296,020
1.43
9,884,817
4.29
1,529,193
0.66
Full Line Insurance 348,425
Assic Generali SPA Com EUR 1.00 Gas Distribution
38,087
Gas Natural SDG SA Com EUR 1.00
6,058
351,727
0.15
Fresenius SE Non-Voting Pref NPV
1,285,148
0.56
55,692
Fresenius Medical Care AG & Company KGAA Com NPV
1,929,171
0.84
Heavy Construction 54,466
ACS Actividades de Construccion y Com EUR 0.50
1,846,942
0.80
83,127
Bouygues Com EUR 1.00
3,775,628
1.64
17,538
Grupo Ferrovial SA Com EUR 1.00
762,903
0.33
29,790
Sacyr Vallehermoso SA Com EUR 1.00
599,375
0.26
Industrial Machinery 29,231
Alstom Com EUR 14.00
4,108,125
1.78
15,904
Vallourec (Usin A T) Com EUR 4.00
2,199,046
0.95
326,986
0.14
6,232,746
2.70
265,971
0.12
Integrated Oil & Gas 4,777
360,963
0.16
1,693,392
0.73
Fresenius SE Com NPV
23,206
CIA Espanola De Petroleos Com EUR 1.00 Investment Services
59,798
Building Materials & Fixtures 162,194
Telekom Austria (TA) Com NPV (Br) Food Products
1.53
Broadline Retailers 30,633
2.21
1.28
Broadcasting & Entertainment 4,533
5,099,415
Oesterreichische Elektrizitats AG Class 'A' Com NPV
0.54
Brewers 73,434
Electricite De France Com EUR 0.50
20,400
Health Care Providers
EFG Eurobank Ergasias Com EUR2.75 (Cr)
Intesa Sanpaolo Com EUR 0.52
1.58
82,595
153,414
Banco Popolare Com EUR 3.60
Banco Santander SA Com EUR 0.50 (Regd)
3,645,850
Fixed Line Telecommunications
192,027
1,873,255
Pernod Ricard Com NPV Electricity
1.13
Banks
24,116
% OF FUND
EUROPEAN UNION (cont)
Aerospace 96,262
FAIR VALUE EUR
INVESTMENT
Deutsche Boerse AG Com NPV (Regd) Multiutilities
3,967,265
1.72
143,072
Clothing & Accessories
Edison SPA Com EUR 1.00 Nondurable Household Products
16,814
Christian Dior Com EUR 2.00
1,214,139
0.53
53,417
Henkel KGAA Non-Voting Pref NPV
1,559,776
0.68
22,150
Hermes International Com NPV
1,717,511
0.74
37,766
Henkel KGAA Com NPV (Br)
1,012,506
0.44
41,689
Luxottica Group Com EUR 0.06
759,990
0.33
77,240
LVMH Moet-Hennessy Com EUR 0.30
2,050,716
0.89
5,270,085
2.29
2,589,818
1.12
75,505
Commercial Vehicles & Trucks 29,625
Man AG Ord NPV
Oil Equipment & Services Personal Products 23,951
Beiersdorf AG Com NPV
1,265,571
0.55
76,128
L'Oreal Com EUR 0.20
5,992,796
2.60
289,952
0.13
Commodity Chemicals 71,389
Air Liquide Class 'L' Com EUR 5.50
Pharmaceuticals 6,705,569
2.91
Deutsche Post AG Com NPV (Regd)
5,503,580
2.39
TNT NV Com EUR 0.48
3,597,462
1.56
Delivery Services 251,305 137,781 www.iShares.eu
Saipem Com EUR 1.00
2,788
Bayer Schering Pharma AG Com NPV
iShares plc Annual Report 91
iShares DJ Euro STOXX Growth Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
4,341
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
INVESTMENT
EUROPEAN UNION (cont)
EUROPEAN UNION (cont)
Real Estate Holding & Development
EUROPEAN UNION - TOTAL
Metrovacesa SA Com EUR 1.50
359,435
0.16
Semiconductors
FAIR VALUE EUR
% OF FUND
230,197,688
99.84
230,197,688
99.84
TOTAL VALUE OF INVESTMENTS AT BID PRICES
129,302
ASML Holding NV Com EUR 0.09
2,079,176
0.90
CASH*
145,584
0.06
197,566
Stmicroelectronics Com EUR 1.04
1,574,601
0.68
OTHER NET LIABILITIES
(74,333)
(0.03)
8,379,368
3.63
MARKET VALUE
230,268,939
99.87
0.89
Adjustment from bid market prices to last traded market prices
306,856
0.13
230,575,795
100.00
Software 265,086
SAP AG Ord NPV
TOTAL VALUE OF FUND AT BID
Steel 140,167
Tenaris SA Com USD 1.00
2,057,652
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
Telecommunications Equipment 1,177,753
Nokia Oyj Com NPV
28,372,070
12.30 * All cash holdings are held with The Governor & Company of the Bank of Ireland
Transportation Services 94,551
Abertis Infraestructuras Series 'A' Com EUR 3.00
1,978,952
0.86
72,497
Atlantia Com EUR 1.00
1,528,237
0.66
92 iShares plc Annual Report
www.iShares.eu
iShares DJ Euro STOXX Growth Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES Total SA Com EUR2.50
PROCEEDS EUR
COST EUR
Banco Santander SA Com EUR0.50 (Regd)
32,859,666
Nokia Oyj Com NPV
7,804,539
Nokia Oyj Com NPV
31,755,507
Telefonica SA Com EUR1.00
7,497,341
Intesa Sanpaolo Com EUR0.52
17,937,519
Siemens AG Com NPV (Regd)
7,348,362
Assic Generali SPA Com EUR1.00
11,187,561
Unicredit SPA Com EUR0.50
5,788,882
SAP AG Ord NPV
10,309,235
Sanofi-Aventis Com EUR2.00
5,758,295
Groupe Danone Com EUR0.25
9,318,688
Banco Santander SA Com EUR0.50 (Regd)
5,744,923
Carrefour Com EUR2.50
8,216,481
Allianz AG Com NPV (Regd)
5,128,103
National Bank of Greece Com EUR5.00 (Regd)
7,951,651
Altadis SA Com EUR0.60 (Regd)
4,751,015
L'Oreal Com EUR0.20
7,175,078
Philips Electronic (KON) Com EUR0.20
3,254,553
Electricite De France Com EUR0.50
7,007,280
Intesa Sanpaolo Com EUR0.52
3,226,672
Air Liquide Class 'L' Com EUR5.50
6,972,338
Vivendi Com EUR5.50
3,169,578
Deutsche Boerse AG Com NPV (Regd)
6,733,479
Assic Generali SPA Com EUR1.00
3,083,883
Deutsche Post AG Com NPV (Regd)
6,668,866
SAP AG Ord NPV
2,704,295
LVMH Moet-Hennessy Com EUR0.30
6,537,439
Carrefour Com EUR2.50
2,495,712
Alstom Com EUR14.00
5,354,530
Groupe Danone Com EUR0.25
2,409,091
Bouygues Com EUR1.00
5,250,247
Vinci Com EUR2.50 (Post Subdivision)
2,352,164
TNT NV Com EUR0.48
4,818,872
Schneider Electric Com EUR8.00
2,078,122
Koninklijke Ahold NV Com EUR0.30
4,810,634
L'Oreal Com EUR0.20
2,017,399
Banco Popolare Com EUR3.60
4,570,705
Air Liquide Class 'L' Com EUR5.50
1,993,072
CRH Ord EUR0.32
4,343,079
www.iShares.eu
11,896,570
LARGEST PURCHASES
iShares plc Annual Report 93
iShares DJ Euro STOXX Growth NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Dividends Securities lending income Interest income Operating income
2008 €’000s 2,079 232 45 2,356
2007 €’000s 1,553 12 14 1,579
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 3,000 7,800 (2,400) 8,400
2007 No. of Shares ’000s 1,000 2,700 (700) 3,000
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
10. FUTURES 2008 €’000s
Net fair value gains on sale of investments Net change in fair value appreciation on investments Fair value currency losses Net (losses)/gains on financial assets at fair value through profit or loss
5.
(2007: nil). (130)
114
(36,608) (7)
4,301 (1)
(36,745)
4,414
2008 €’000s 615 615
2007 €’000s 252 252
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
2008 €’000s 80,526 260,899 86,433 230,198
2007 €’000s 24,734 80,526 26,340 86,433
2008 €’000s 22 1 23
2007 €’000s 5 6,061 8 6,074
Pay Date June September December February March* Equalisation income Equalisation expense
2008 €’000s 495 739 25 352 1,611 (79) 97 1,629
2007 €’000s 616 319 35 152 1,122 (177) 49 994
* Outstanding at the year end
DEBTORS
Securities lending income receivable Subscriptions awaiting settlement Interest income receivable Debtors
8.
The Fund does not hold any open futures as at 29 February 2008
OPERATING EXPENSES
Management fees Operating expenses
6.
2007 €’000s
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities awaiting settlement Redemptions awaiting settlement Creditors
94 iShares plc Annual Report
2008 €’000s 98 98
2007 €’000s 32 6,011 35 6,078
www.iShares.eu
iShares DJ Euro STOXX MidCap PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Operating income
3
4,379
3,721
Net (losses)/gains on financial assets at fair value through profit or loss
4
(29,205)
25,667
(24,826)
29,388
(828)
(570)
(25,654)
28,818
(3,459)
(2,578)
Total investment income Operating expenses
5
Net (deficit)/income Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(9)
-
(29,122)
26,240
(219)
(522)
303
(78)
(29,038)
25,640
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
181,114
128,173
(Decrease)/Increase in net assets attributable to Redeemable Participating Shareholders from operations
(29,038)
25,640
Share transactions Proceeds from issue of Redeemable Participating Shares
62,669
35,946
Payments on redemption of Redeemable Participating Shares
(43,970)
(8,645)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
170,775
181,114
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
Debtors
7
Cash and bank balances Total current assets
170,326
180,982
50
89
115
680
170,491
181,751
Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
8
(72)
(70)
11
-
(620)
(72)
(690)
170,419
181,061
356
53
170,775
181,114
4,000,000
3,700,000
€42.69
€48.95
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €000s 128,042) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 3,100,000) Net Asset Value per Redeemable Participating Share (2006: €41.35)
9
The accompanying notes form an integral part of the financial statements.
www.iShares.eu
iShares plc Annual Report 95
iShares DJ Euro STOXX MidCap SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
FAIR VALUE EUR
% OF FUND
A2A SPA Com EUR0.52
1,691,973
0.99
50,214
Public Power Corporation Com EUR4.60
1,416,035
0.83
48,302
Red Electrica De Espana SA Com EUR2.00
1,998,254
1.17
37,087
Solarworld AG Com NPV
1,115,577
0.65
565,739
Terna SPA Ord EUR0.22
1,619,428
0.95
Union Fenosa SA Com EUR3.00
2,328,815
1.36
985,113
0.58
HOLDING
EUROPEAN UNION (cont)
EUROPEAN UNION
Electricity
Aerospace 114,876
Safran Com EUR0.20
1,524,405
0.89
633,105
Airlines 95,193 102,352
Air France-KLM Com EUR8.50
1,704,907
1.00
Deutsche Lufthansa Ord NPV (Regd)
1,582,362
0.93
Banks 183,794
Banca Popolare Di Milano Com EUR4.00
1,436,350
0.84
53,352
110,201
Banco Espirito Santo Com EUR5.00 (Regd)
1,311,392
0.77
111,269
Bankinter SA Com EUR0.30 (Regd)
1,090,436
0.64
554,943
Banca Monte Dei Paschi Di Siena Com EUR0.67
1,662,054
0.97
2,327,920
1.36
136,284
EFG Eurobank Ergasias Com EUR2.75
2,603,024
1.52
189,670
Mediobanca Di Credito Finanz SPA Com EUR0.50
2,410,706
1.41
168,689 21,575
Natexis Banques Populaires Com EUR1.60 Raiffeisen International Bank Holding AG Com NPV (Regd)
Electronic Office Equipment 14,331 70,047
Belgacom SA Com NPV
2,219,439
1.30
65,970
Elisa Corporation Oyj Com NPV
1,333,913
0.78
Telekom Austria Ta Com NPV (Bearer)
2,219,040
1.30
1,852,066
1.08
147,936
Food Products 737,875
Heineken Holding Com EUR1.60
1,636,283 1,834,954
0.96 1.07
21,475
Casino Guichard-Perrachon Com EUR1.53
1,609,981
0.94
44,612
Delhaize Group Com NPV
2,244,876
1.31
2,019,167
1.18
Gambling 1,517,245
0.89
93,135
Broadcasting & Entertainment 317,937
Mediaset Com EUR0.52
158,380
SES Fiduciary DR Ea Rep 1 'A' Shares Com NPV
119,474
Thomson SA Com EUR3.75 Wienerberger AG Com NPV
1,894,905
1.11
68,684
Enagas SA Com EUR1.50
1,368,872
0.80
56,258
Gas Natural SDG SA Com EUR1.00
2,258,759
1.32
Gaz De France Com EUR1.00
3,358,268
1.97
Snam Rete Gas SPA Com EUR1.00
1,689,097
0.99
2,581,594
1.51
88,422
610,512
0.36
367,195
Health Care Providers 1,193,235
0.70
34,262
Fresenius SE Non-Voting Pref NPV
1,897,430
1.11
82,705
Fresenius Medical Care AG & Company Com NPV
2,864,901
1.68
Clothing & Accessories 24,846
Christian Dior Com EUR2.00
1,794,130
1.05
32,944
Hermes International Com NPV
2,554,478
1.50
61,529
Luxottica Group Com EUR0.06
1,121,674
0.66
29,024
Heavy Construction 11,324
Acciona SA Com EUR1.00
1,912,057
1.12
Commercial Vehicles & Trucks
24,014
Eiffage Com EUR4.00
1,396,174
0.82
Wartsila Oyj ABP Series 'B' Com EUR3.50
26,235
Grupo Ferrovial SA Com EUR1.00
1,141,223
0.67
20,131
Hochtief AG Com NPV
1,446,412
0.85
43,975
Sacyr Vallehermoso SA Com EUR1.00
884,777
0.52
1,315,077
0.77
Commodity Chemicals 37,429
OPAP SA Com EUR 0.30 Gas Distribution
Building Materials & Fixtures 37,184
Parmalat SPA Com EUR1.00 Food Retailers & Wholesalers
Brewers 45,183
Neopost Com EUR1.00 Fixed Line Telecommunications
Deutsche Postbank AG Com NPV (Regd)
36,317
INVESTMENT
Lanxess AG Com NPV
940,216
0.55
Industrial Machinery
Computer Services 24,605
Atos Origin Com EUR1.00
881,351
0.52
70,597
Gamesa Corporation Tecnologia Com EUR0.17
1,912,473
1.12
64,330
Cap Gemini Com EUR8.00
2,343,542
1.37
83,208
Kone Corporation Class 'B' Ord NPV
1,935,418
1.13
55,803
Metso Oyj Com NPV
1,930,784
1.13
1,334,039
0.78
Alleanza Assicuraz SPA Com EUR0.50
1,573,703
0.92
CNP Assurances Com EUR4.00
1,153,115
0.68
Irish Life & Permanent Ord EUR0.32
1,305,078
0.76
1,483,139
0.87
Defence 127,152 42,113
Finmeccanica SPA Com EUR4.40
2,578,643
1.51
Thales Com EUR3.00
1,708,524
1.00
Integrated Oil & Gas 57,378
Diversified Industrials 68,315
GEA Group AG Com NPV
Life Insurance 1,474,921
0.86
Drug Retailers 35,480
Celesio AG Com NPV (Regd)
Q-Cells AG Com NPV
96 iShares plc Annual Report
185,907 15,927
1,335,467
0.78
Electrical Components & Equipment 24,682
Neste Oil Com NPV
121,856
Media Agencies 61,849 1,332,828
Publicis Groupe SA Com EUR0.40
0.78
www.iShares.eu
iShares DJ Euro STOXX MidCap Schedule of investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
EUROPEAN UNION (cont)
89,874
Henkel KGAA Non-Voting Pref NPV
1,701,315
1.00
2,318,451
1.36
Eramet Com EUR3.05
2,123,251
12,246 1,473
Groupe Bruxelles Lambert VVPR Strip
111,513
1.17
29
-
3,028,693
1.77
SBM Offshore NV Com EUR0.25
1,335,356
0.78
47,484
Technip Com NPV
2,568,410
1.50
1,869,162
1.09
Elan Corporation Ord EUR0.05
3,151,173
1.85
28,610
Merck KGAA Com NPV
2,348,595
1.38
43,895
UCB SA Com NPV
1,375,230
0.81
2,360,015
1.38
Personal Products
159,652
1,588,536
0.93
TUI AG Com NPV (Regd)
1,409,964
0.83
170,325,934
99.73
170,325,934
99.73
88,677
CASH*
115,038
0.07
OTHER NET LIABILITIES
(21,463)
(0.01)
170,419,509
99.79
355,630
0.21
170,775,139
100.00
TOTAL VALUE OF FUND AT BID MARKET PRICES Adjustment from bid market prices to last traded market prices
Pharmaceuticals 207,314
1.33
AT BID PRICES 1,990,342
Saipem Com EUR1.00
Beiersdorf AG Com NPV
2,271,265
Brisa (Auto-Estrada De Portugal) Com EUR1.00 (Privatised)
TOTAL VALUE OF INVESTMENTS
62,429
35,374
Atlantia Com EUR1.00
1.24
Oil Equipment & Services Compagnie Generale De GeophysiqueVeritas Com EUR2.00
107,745
EUROPEAN UNION - TOTAL
Nonferrous Metals 4,220
% OF FUND
Transportation Services (cont)
Nondurable Household Products 79,399
FAIR VALUE EUR
EUROPEAN UNION (cont)
Mortgage Finance Hypo Real Estate Holdings AG Com NPV
INVESTMENT
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* All cash holdings are held with The Governor & Company of the Bank of Ireland.
Publishing 137,530
Wolters Kluwer Com EUR0.12 Real Estate Holding & Development
182,611
Immoeast AG Com NPV (Br)
1,084,709
0.64
205,635
Immofinanz AG Com NPV
1,470,290
0.86
132,944
Meinl European Land Com EUR5.00
1,103,435
0.65
1,823,788
1.07
1,659,847
0.97
2,142,062
1.25
Real Estate Investment Trusts 29,781
Corio NV Com EUR10.00 Restaurants & Bars
44,488
Sodexho Com EUR4.00 Soft Drinks
73,661
Coca-Cola Hellenic Bottling Company SA Com EUR0.50 Specialty Chemicals
15,153
K&S AG Com NPV
2,903,769
1.70
83,495
Koninklijke DSM NV Com EUR1.50
2,433,879
1.42
44,398
Rhodia SA Com EUR12.00 (Post Consolidation)
735,675
0.43
26,254
Solvay SA Com NPV
2,184,595
1.28
55,395
Umicore Com NPV
1,864,596
1.09
Specialty Finance 36,942
Groupe Bruxelles Lambert Com NPV
2,934,672
1.72
347,362
Marfin Financial Group Holdings SA Com EUR0.54
1,514,498
0.89
Wendel Com EUR4.00
1,081,488
0.63
14,416
Steel 37,421
Rautaruukki Oyj Class 'K' Com NPV
1,089,700
0.64
18,151
Salzgitter AG Ord NPV
2,112,958
1.24
48,664
Voest-Alpine AG Com NPV
2,020,529
1.18
2,923,126
1.71
Transportation Services 139,662
www.iShares.net
Abertis Infraestructuras Series 'A' Com EUR3.00
iShares Plc Annual Report 97
iShares DJ Euro STOXX MidCap Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
Hellenic Telecom Organisation (OTE) Com EUR2.39
5,005,456
Koninklijke DSM NV Com EUR1.50
4,131,288
Bank of Piraeus Com EUR4.77
4,983,941
OMV AG Com NPV
3,773,263
Infineon Technologies Ord NPV (Regd)
4,813,511
Hermes International Com NPV
3,295,426
Numico (KON) (Assented Line)
4,412,100
Compagnie Generale De Geophysique-Veritas Com
Rodamco Europe Finance BV Com EUR8.00
4,286,311
EUR2.00
2,442,078
Unibail Holding Com EUR5.00
4,209,669
Beiersdorf AG Com NPV
2,405,688
OMV AG Com NPV
4,049,270
K&S AG Com NPV
2,391,090
Porsche AG Non-Voting Pref NPV
4,040,315
Hochtief AG Com NPV
2,208,496
Ryanair Holdings Com EUR0.00635
3,918,163
Q-Cells AG Com NPV
2,189,212
Banca Popolare Di Milano Com EUR4.00
3,503,681
Abertis Infraestructuras Series 'A' Com EUR3.00
2,116,333
Assurance Generale De France Com NPV
3,299,563
Atlantia Com EUR1.00
2,049,779
Puma AG Com DEM5.00
1,981,397
Marfin Financial Group Holdings SA Com EUR0.54
2,028,229
Atlantia Com EUR1.00
1,979,189
GEA Group AG Com NPV
1,987,793
Business Objects Com EUR1.00 (Regd)
1,866,670
Rautaruukki Oyj Class 'K' Com NPV
1,930,966
Depfa Bank Com EUR0.30
1,437,715
Business Objects Com EUR1.00 (Regd)
1,853,558
TF1 - TV Francaise Com EUR0.21
1,291,159
Elisa Corporation Oyj Com NPV
1,798,157
Union Fenosa SA Com EUR3.00
1,288,137
Immoeast AG Com NPV (Br)
1,790,872
Gas Natural SDG SA Com EUR1.00
1,246,916
Hellenic Telecom Organisation (OTE) Com EUR2.39
1,765,688
Fomento de Construcciones y Contratas Com EUR1.00
1,227,480
Fomento de Construcciones y Contratas Com EUR1.00
1,697,635
Banca Popolare United Com EUR2.50
1,222,196
Air France-KLM Com EUR8.50
1,672,520
Rhodia SA Com EUR12.00 (Post Consolidation)
1,655,269
98 iShares plc Annual Report
www.iShares.eu
iShares DJ Euro STOXX MidCap NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Dividends Securities lending income Interest income Operating income
2008 €’000s 3,920 407 52 4,379
2007 €’000s 3,475 236 10 3,721
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 3,700 1,200 (900) 4,000
2007 No. of Shares ’000s 3,100 800 (200) 3,700
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
10. FUTURES 2008 €’000s
Net fair value gains on sale of investments Net change in fair value appreciation on investments Fair value currency losses Net (losses)/gains on financial assets at fair value through profit or loss
5.
(2007: nil). 16,641
14,179
(45,837) (9)
11,489 (1)
(29,205)
25,667
2008 €’000s 828 828
2007 €’000s 570 570
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
2008 €’000s 147,453 182,634 180,982 170,326
2007 €’000s 105,981 147,453 128,021 180,982
2008 €’000s 39 11 50
2007 €’000s 23 53 13 89
Pay Date June September December February March* Equalisation income Equalisation expense
2008 €’000s 1,256 1,988 32 372 3,648 (306) 117 3,459
2007 €’000s 1,048 962 620 2,630 (54) 2 2,578
* Outstanding at end of year
DEBTORS
Dividends receivable Securities lending income receivable Interest income receivable Debtors
8.
The Fund does not hold any open futures as at 29 February 2008
OPERATING EXPENSES
Management fees Operating expenses
6.
2007 €’000s
CREDITORS (amounts falling due within one year)
Accrued expenses Interest expenses payable Creditors
www.iShares.eu
2008 €’000s 69 3 72
2007 €’000s 70 70
iShares plc Annual Report 99
iShares DJ Euro STOXX Select Dividend PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
2008 €’000s
Notes
2007 €’000s
Operating income
3
34,934
Net (losses)/gains on financial assets at fair value through profit or loss
4
(125,802)
43,302
(90,868)
48,149
Total investment (loss)/income Operating expenses
5
Net (deficit)/income
4,847
(3,275)
(807)
(94,143)
47,342
(29,273)
(3,441)
(123,146)
43,901
(2,163)
(435)
349
937
(125,230)
44,403
Finance costs Distributions to Redeemable Participating Shareholders
11
(Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
605,682
101,655
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(125,230)
44,403
443,463
506,765
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares Net assets attributable to Redeemable Participating Shareholders at the end of the year
(333,265)
(47,141)
590,650
605,682
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
Debtors
7
568,696
604,277
421
14,512
20,397
843
589,514
619,632
8
(242)
(14,423)
11
-
(556)
(242)
(14,979)
589,272
604,653
1,378
1,029
590,650
605,682
19,700,000
17,100,000
€29.98
€35.42
Cash and bank balances Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €'000s 101,563) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 3,500,000) Net Asset Value per Redeemable Participating Share (2006: €29.04)
9
The accompanying notes form an integral part of the financial statements.
100
iShares plc Annual Report
www.iShares.eu
iShares DJ Euro STOXX Select Dividend SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
Banks Allied Irish Banks Ord EUR 0.32
1.90
Bank of Ireland (Governor & Company of) Ord EUR 0.64
10,439,800
1.77
284,246
BNP Paribas Com EUR 2.00
16,929,692
2.87
262,218
Deutsche Bank AG Com NPV (Regd)
19,356,933
3.28
Fortis Com NPV (Netherlands)
15,447,594
2.62
707,920 1,221,992 52,324 188,324 2,644,074
Fortis VVPR Strip Com NPV Natixis Com EUR 1.60 Societe Generale Com EUR 1.25 (Nil Paid Rights) Societe Generale Com EUR 1.25 Unicredit SPA Com EUR 0.50
4,960,798
Metropole Television-(M6) Com EUR 0.40
7,079
-
11,853,322
2.01
293,014
0.05
13,389,836
2.27
12,883,251
2.18
93,339
Wienerberger AG Com NPV Man AG Ord NPV
3.86
Vallourec (Usin A T) Com EUR 4.00
12,905,984
2.19
1,225,315
ENI Com EUR 1.00
27,937,182
4.73
10,131,831
1.71
Life Insurance 946,016
Irish Life & Permanent Ord EUR 0.32 Multiutilities
197,190
E.On AG Com NPV
24,461,420
4.14
425,111
RWE AG (New) Non-Voting Pref NPV
28,104,088
4.76
476,679
Suez Com EUR 2.00
20,106,320
3.40
12,848,806
2.18 3.64
Publishing 6,456,687 11,834,581
2.00
Independent News & Media Ord EUR 0.30 Real Estate Investment Trusts
10,644,413
1.80
Commercial Vehicles & Trucks 159,330
22,819,671
Integrated Oil & Gas
Building Materials & Fixtures 331,705
Snam Rete Gas SPA Com EUR 1.00 Industrial Machinery
Broadcasting & Entertainment 758,627
% OF FUND
Gas Distribution 11,211,784
1,126,192
1,053,724
FAIR VALUE EUR
EUROPEAN UNION (cont)
EUROPEAN UNION 829,274
INVESTMENT
13,928,629
2.36
24,241,940
4.10
36,760,574
6.22
350,911
Corio NV Com EUR 10.00
21,489,790
275,215
Wereldhave NV Com EUR 10.00
22,030,961
3.73
568,695,779
96.29
568,695,779
96.29
20,397,196
3.45
179,807
0.03
EUROPEAN UNION - TOTAL
Commodity Chemicals 289,456
Basf SE Com NPV
AT BID PRICES
Delivery Services 1,678,565
Deutsche Post AG Com NPV (Regd)
969,549
Thyssenkrupp AG Com NPV
16,768,872
2.84
MARKET PRICES
589,272,782
99.77
Adjustment from bid market prices to last traded market prices
1,377,677
0.23
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
590,650,459
100.00
Belgacom SA Com NPV
30,720,160
5.20
Deutsche Telekom Com NPV (Regd)
33,295,463
5.64
1,745,175
France Telecom Com EUR 4.00
38,882,499
6.58
Casino Guichard-Perrachon Pref EUR 1.53
21,237,688
3.60
Kesko Oyj Series 'B' Com EUR 2.00
15,732,602
2.66
Food Retailers & Wholesalers
520,258
www.iShares.eu
TOTAL VALUE OF FUND AT BID
Fixed Line Telecommunications 2,663,637
393,728
CASH* OTHER NET ASSETS
Diversified Industrials 440,938
TOTAL VALUE OF INVESTMENTS
* All cash holdings are held with The Governor & Company of the Bank of Ireland
iShares plc Annual Report 101
iShares DJ Euro STOXX Select Dividend Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
Endesa SA Com EUR1.20
394,345
Allianz SE Com NPV (Regd)
Assurance Generale De France Com NPV
247,129
E.On AG Com NPV
2,760,103 690,773
E.On AG Com NPV
191,952
BNP Paribas Com EUR2.00
664,513
ENI Com EUR1.00
191,944
ING Groep NV CVA Com EUR0.24
607,376
BNP Paribas Com EUR2.00
185,272
Michelin (CGDE) EUR2.00 (Regd)
587,410
ING Groep NV CVA Com EUR0.24
171,852
Societe Generale Com EUR1.25
576,189
Societe Generale Com EUR1.25
155,775
Iberdrola SA Com EUR3.00
574,942
AXA Com EUR2.29
140,433
ABN-Amro Holdings Com NPV
566,338
Suez Com EUR2.00
137,416
ENI Com EUR1.00
566,160
Allianz SE Com NPV (Regd)
134,668
Daimler AG Ord NPV (Regd)
525,630
ABN-Amro Holdings Com NPV
130,247
AXA Com EUR2.29
522,196
Basf SE Com NPV
119,656
Deutsche Bank AG Com NPV (Regd)
507,777
Deutsche Bank AG Com NPV (Regd)
119,057
Banco Comercial Portugues Com EUR1.00 (Regd)
495,176
Fortis Com NPV (Netherlands)
110,509
Porsche AG Non-Voting Pref NPV
479,577
Deutsche Telekom Com NPV (Regd)
107,874
Suez Com EUR2.00
429,565
Unilever NV CVA Com EUR0.16
107,587
Basf SE Com NPV
409,152
Daimler AG Ord NPV (Regd)
92,678
Fortis Com NPV (Netherlands)
384,985
ArcelorMittal Com NPV
90,519
Deutsche Telekom Com NPV (Regd)
364,285
RWE AG (New) Non-Voting Pref NPV
84,496
Bayer AG Ord NPV
359,031
Enel Com EUR1.00
82,964
Unilever NV CVA Com EUR0.16
349,571
102 iShares plc Annual Report
www.iShares.eu
iShares DJ Euro STOXX Select Dividend NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
SIGNIFICANT ACCOUNTING POLICES
8.
CREDITORS (amounts falling due within one year)
See pages 21 to 24. 2.
Accrued expenses Purchases of securities awaiting settlement Redemptions of units awaiting settlement Creditors
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
OPERATING INCOME
Dividends Securities lending income Interest income Other income Operating income
4.
2008 €’000s 31,168 2,467 1,128 171 34,934
2007 €’000s 4,507 309 31 4,847
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2008 €’000s
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency losses Net fair value losses on sale of futures contracts Net (losses)/gains on financial assets at fair value through profit or loss
5.
2007 €’000s
25,869
9,651
(151,619) (20)
33,653 (2)
(32)
-
(125,802)
43,302
9.
2008 €’000s 242
2007 €’000s 192
-
14,230
242
1 14,423
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 17,100 12,200 (9,600) 19,700
2007 No. of Shares ’000s 3,500 15,200 (1,600) 17,100
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities. 10. FUTURES The Fund does not hold any open futures as at 29 February 2008 (2007: nil).
OPERATING EXPENSES
Management fees Operating Expenses
2008 €’000s 3,275 3,275
2007 €’000s 807 807
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
6.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
7.
2008 €’000s 555,197 671,235 604,277 586,696
2007 €’000s 86,105 555,197 101,532 604,277
Equalisation income Equalisation expense
DEBTORS
Dividends receivable Securities lending income receivable Interest income receivable Subscriptions awaiting settlement Debtors
www.iShares.eu
Pay Date June September December February March*
2008 €’000s 340 45 36 421
2007 €’000s 183 42 32 14,255 14,512
2008 €’000s 15,897 12,328 656 1,032 29,913 (2,603) 1,963 29,273
2007 €’000s 1,630 1,647 114 556 3,948 (565) 59 3,441
* Outstanding at end of year
iShares plc Annual Report 103
iShares DJ Euro STOXX SmallCap PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net (losses)/gains on financial assets at fair value through profit or loss
4
Total investment income Operating expenses
5
Net (deficit)/income
2008 €’000s
2007 €’000s
6,203
3,725
(36,674)
27,157
(30,472)
30,882
(1,035)
(707)
(31,507)
30,175
(4,852)
(2,389)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(12)
-
(36,371)
27,786
(313)
(601)
175
99
(36,508)
27,284
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
264,669
120,445
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(36,508)
27,284
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares Net assets attributable to Redeemable Participating Shareholders at the end of the year
88,595
131,019
(154,896)
(14,079)
161,865
264,669
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
161,294
263,849
Debtors
7
34
98
Cash and bank balances Total current assets
242
842
161,570
264,789
Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
8
(68)
(101)
11
-
(207)
(68)
(308)
161,502
264,481
363
188
161,865
264,669
6,000,000
8,400,000
€26.98
€31.51
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €000s 120,356) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 4,500,000) (2005: 750,000) Net Asset Value per Redeemable Participating Share (2005: €26.77)
9
The accompanying notes form an integral part of the financial statements.
104 iShares plc Annual Report
www.iShares.eu
iShares DJ Euro STOXX SmallCap SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
Aerospace
38,361
Computer Services
MTU Aero Engines Holding AG Com NPV
1,510,114
0.93
Zodiac Com NPV
1,321,536
0.82
91,438
Indra Sistemas SA Series 'A' Com EUR 0.20
1,685,202
1.04
28,649
Wincor Nixdorg AG Com NPV
1,511,235
0.93
1,251,196
0.77
Airlines 562,988
Iberia Lineas Aereas de Espana Series 'A' Com EUR 0.78
% OF FUND
EUROPEAN UNION (cont)
EUROPEAN UNION 45,213
FAIR VALUE EUR
INVESTMENT
Distillers & Vintners 283,718 1,345,541
0.83
C&C Group Ord EUR 0.01 Electrical Components & Equipment
Auto Parts 31,173
Rheinmetall AG Com NPV
1,434,581
0.89
93,415
Legrand SA Com EUR 4.00
1,956,110
1.21
63,608
Valeo Com EUR 3.00
1,597,833
0.99
22,190
Nexans Com EUR 1.00
1,614,766
1.00
2,888,092
1.78
1,903,411
1.18
Banks
Electricity
616,822
Banca Carige SPA Com EUR 1.00
1,579,064
0.98
286,479
Banco BPI SA Com EUR 1.00
906,706
0.56
Oesterreichische Elektrizitats AG Class 'A' Com NPV
5,080
Banco De Valencia Com EUR 1.00
173,736
0.11
Fixed Line Telecommunications
50,632
Banco De Valencia Com EUR 1.00
1,773,133
1.10
58,713
54,680
Neuf Cegetel Com EUR 0.16 Food Products
99,696
Banco Pastor Com EUR 0.33
987,987
0.61
12,853
Bank of Greece Com EUR 5.60
1,167,052
0.72
51,702
CSM NV Com EUR 0.25
1,056,272
0.65
25,087
KBC Ancora Com NPV
1,654,739
1.02
109,665
IAWS Group Ord EUR 0.30
1,458,545
0.90
96,854
Okobank Osuuspankkien Series 'A' Com NPV
116,821
Kerry Group Series 'A' Ord EUR 0.125
2,406,513
1.49
1,114,790
0.69
Food Retailers & Wholesalers
Biotechnology 123,003
Grifols SA Com EUR 0.50
1,868,416
1.15
11,665
Colruyt SA Com NPV
1,889,147
1.17
161,291
Qiagen NV Com EUR 0.01
2,374,204
1.47
57,151
Kesko Oyj Series 'B' Com EUR 2.00
1,728,246
1.07
1,232,968
0.76
Footwear
Broadcasting & Entertainment 78,724
Gestevision Telecinco Com EUR 0.50
5,261 1,112,370
0.69
Puma AG Com NPV Full Line Insurance
70,765
Prosiebensat1 Media AG Pref NPV
997,079
0.62
567,828
Mapfre SA Com EUR 0.10
1,692,127
1.05
42,467
Sogecable SA Com EUR 2.00
1,177,610
0.73
789,332
Unipol Com NPV (Privatised)
1,382,120
0.85
105,511
TF1-TV Francaise Com EUR 0.21
1,655,468
1.02
154,790
Zon Multimedia SGPS Com EUR 0.01
1,263,086
0.78
1,475,367
0.91
978,110
0.60
1,427,922
0.88
Cimpor Cimentos De Com EUR 1.00 (Regd)
1,460,586
0.90
14,786
Heidelberg Cement Com NPV
1,545,285
0.95
25,698
Imerys Com EUR 2.00
1,426,239
0.88
Kingspan Group Ord EUR 0.13
1,048,550
Titan Cement Company Com EUR 2.00
1,478,184
Broadline Retailers 85,053
Arcandor AG Com NPV Building Materials & Fixtures
265,561
116,765 51,939
150,401
Randstad Holdings NV Com EUR 0.10 Vedior CVA Com EUR 0.05 Bulgari SPA Com EUR 0.07
52,594
Health Care Providers 75,233
Heavy Construction 1,689,632
1.04
Boskalis Westminster Groep NV CVA Com EUR 0.80
1,891,605
1.17
36,697
Fomento de Construcciones y Contratas Com EUR 1.00
1,470,816
0.91
0.65
96,189
Koninklijke Bam Groep NV Com EUR 0.10
1,404,359
0.87
0.91
109,887
YIT Corporation Com NPV
1,816,432
1.12
Industrial & Office REITS
1,399,432 2,504,177
0.86
1,007,384
17,044
Gecina Com EUR 7.50
1,633,667
1.01
59,563
Klepierre Com EUR 1.40
2,304,492
1.42
Industrial Machinery
1.55 0.62
36,366
0utotek Oyj Com NPV
1,339,360
0.83
33,320
Andritz AG Com NPV
1,244,502
0.77
53,442
Heidelberger Druck Ord NPV
860,416
0.53
55,280
SGL Carbon AG Ord NPV
2,042,596
1.26
Cargotec Corporation Class 'B' Ord NPV
1,110,309
0.69
72,597
Tognum AG Com NPV
1,169,538
0.72
Konecranes Oyj Com NPV
1,269,093
0.78
95,183
Zardoya-Otis Com EUR 0.10
1,567,664
0.97
1,156,023
0.71
Industrial Suppliers
Commodity Chemicals 46,810 www.iShares.eu
Rhoen-Klinikum AG Ord NPV Bilfinger Berger Com NPV
Commercial Vehicles & Trucks 33,748
Lottomatica SPA Com EUR 1.00
51,263
Clothing & Accessories 136,133
61,705
32,208
Business Training & Employment Agencies 55,511
Gambling
Arkema Com EUR 10.00
1,766,609
1.09
69,598
DCC Ord EUR 0.25
iShares plc Annual Report 105
iShares DJ Euro STOXX SmallCap Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
EUROPEAN UNION (cont)
507,029
1,021,021
0.63
Hagemeyer Com EUR 1.20
2,438,809
1.51
Galp Energia SGPS Com EUR 1.00
50,330
2,368,749
United Internet AG Com NPV (Regd)
1,516,193
0.94
Investment Services 57,647
Bolsas Y Mercados Espanoles Com EUR 3.23
1.19
Cattolica Assicurazioni Com EUR 3.00
Symrise AG Com NPV
1,718,474
1.06
Wacker Chemie AG Com NPV
2,140,754
1.32
Specialty Finance 28,734
Corporacion Financiera Alba Com EUR 1.00
1,156,256
0.71
28,069
Eurazeo Com NPV
2,246,081
1.39
Ifil Investments SPA Com EUR 1.00
1,337,844
0.83
Nationale A Portefeuille Com NPV
1,398,694
0.87
30,301
Steel 118,081 1,087,325
0.67
Acerinox SA Com EUR 0.25
1,964,868
1.21
40,266
Kloeckner & Company AG Com NPV (Regd)
1,252,675
0.77
94,461
Outokumpu Oyj Series 'A' Com NPV
2,386,085
1.47
1,348,994
0.83
1,583,068
0.98
ADP Com EUR 3.00
2,179,669
1.35
Cintra Concesiones De Infraestructuras De Transporte Com EUR 0.20
1,874,487
1.16
Fraport AG Com NPV
1,485,542
0.92
Nokian Renkaat Oyj Com EUR 0.20
2,445,274
1.52
Pirelli & Company Com EUR 0.52
1,414,022
0.87
161,294,486
99.65
161,294,486
99.65
Media Agencies 57,697
JC Decaux SA Com NPV
1,154,517
0.71
1,542,196
0.95
Telecommunications Equipment
Mobile Telecommunications 27,310
Mobistar Com NPV
43,237
Bourbon SA Com NPV
1,377,968
0.85
50,294
Fugro NV Com EUR 0.05
2,519,226
1.56
Pharmaceuticals
28,345
Faes Farma SA Com EUR 0.10 (Regd)
1,176,455
0.73
50,704
Stada Arzneimittel AG Ord NPV (Regd) (Vinkuliert)
2,347,595
1.45
178,014
30,311
Property & Casualty Insurance Fondiaria-Sai SPA Com EUR 1.00
Tyres 1,679,235
1.04
Publishing 109,835 89,513 4,081,101 55,289
1,352,069
0.84
Sanoma Wsoy Oyj Com NPV
1,493,972
0.92
793,366
0.49
1,553,621
0.96
Tele Atlas NV Com EUR 0.10
89,374 2,170,408
Pagesjaunes Groupe Com EUR 0.20 Seat-Pagine Gialle Com EUR 0.03
Ubisoft Entertainment Com NPV (Post Reconstruction) Transportation Services
27,080
123,189
TomTom NV Com EUR 0.20 Toys
Oil Equipment & Services 36,358
57,078
Real Estate Holding & Development
EUROPEAN UNION - TOTAL TOTAL VALUE OF INVESTMENTS AT BID PRICES CASH*
242,324
0.15
OTHER NET LIABILITIES
(34,178)
(0.02)
161,502,632
99.78
362,764
0.22
161,865,396
100.00
80,255
IVG Immobilien AG Com NPV
1,845,062
1.14
TOTAL VALUE OF FUND AT BID
12,424
Metrovacesa SA Com EUR 1.50
1,028,707
0.64
MARKET PRICES Adjustment from bid market prices to last traded market prices
Real Estate Investment Trusts 19,484 17,994
1.12
15,129
Life Insurance 35,732
1,816,913
96,327
260,281 1,918,492
Dassault Systemes Com EUR 1.00 Specialty Chemicals
1.46
Internet 120,620
% OF FUND
Software
Grafton Group Units (1 Ord & 1 'C' Ord & 3 'A' Ord) Integrated Oil & Gas
141,165
FAIR VALUE EUR
EUROPEAN UNION (cont)
Industrial Suppliers (cont) 190,845
INVESTMENT
Fonciere Des Regions Com EUR 3.00
1,884,882
1.16
TOTAL VALUE OF FUND AT LAST
Wereldhave NV Com EUR 10.00
1,440,420
0.89
TRADED MARKET PRICES
Hannover Rueckversicherung AG Ord NPV (Regd)
1,632,926
1.01
Scor SE Com EUR 7.876972 (Post Consolidation)
2,212,636
1.37
Reinsurance 52,004 147,019
106 iShares plc Annual Report
* All cash holdings are held with The Governor & Company of the Bank of Ireland.
www.iShares.eu
iShares DJ Euro STOXX SmallCap Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
Hermes International Com NPV
8,196,115
Hermes International Com NPV
7,005,187
Kali Und Salz AG Com NPV
6,529,223
Fonciere Des Regions Com EUR3.00
5,114,177
Q-Cells AG Com NPV
6,317,677
Legrand SA Com EUR4.00
4,339,376
Business Objects Com EUR1.00 (Regd)
6,050,053
Oesterreichische Elektrizitats AG Class 'A' Com NPV
3,962,412
GEA Group AG Com NPV
5,984,612
Nokian Renkaat Oyj Com EUR0.20
3,932,999
Hochtief AG Com NPV
5,903,532
Wacker Chemie AG Com NPV
3,853,356
Wartsila Oyj ABP Series 'B' Com EUR3.50
5,436,518
Iberia Lineas Aereas de Espana Series 'A' Com EUR0.78
3,804,268
Solarworld AG Com NPV
5,414,138
ADP Com EUR3.00
3,736,849
A2A AZ Com EUR0.52
5,396,434
Kloeckner & Company AG Com NPV (Regd)
3,663,070
Rautaruukki Oyj 'K' Com NPV
5,374,431
Eramet Com EUR3.05
3,653,066
Beiersdorf AG Series 'A B C' Com NPV
5,326,576
Faes Farma SA Com EUR0.10 (Regd)
3,646,030
Public Power Corporation Com EUR4.60
5,241,626
Arcandor AG Com NPV
3,485,464
Immoeast Immobilien Anlagen AG Com NPV (Br)
4,992,573
Grifols SA Com EUR0.50
3,442,784
Cosmote Mobile Telephone Com EUR0.47
4,534,147
Pagesjaunes Groupe Com EUR0.20
3,302,727
Fomento de Construcciones y Contratas Com EUR1.00
4,384,881
SGL Carbon AG Ord NPV
3,297,248
Rhodia Com EUR1.00
4,326,070
United Internet AG Com NPV (Regd)
3,271,013
Galp Energia SGPS Com EUR1.00
3,136,731
Compagnie Generale De Geophysique-Veritas Com EUR2.00
4,031,572
Scor SE Com EUR7.876972 (Post Consolidation)
3,106,759
Elisa Corporation Com EUR0.50
4,007,312
TomTom NV Com EUR0.20
3,092,398
Fastweb SPA Com EUR0.52
3,905,972
Immoeast Immobilien Anlagen AG Com NPV (Br)
3,087,969
Eramet Com EUR3.05
3,645,789
www.iShares.eu
iShares plc Annual Report 107
iShares DJ Euro STOXX SmallCap NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
9.
SIGNIFICANT ACCOUNTING POLICES
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
OPERATING INCOME
Dividends Securities lending income Interest income Other income Operating income
4.
2008 €’000s 5,514 593 96 6,203
2007 €’000s 3,455 226 43 1 3,725
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR 2008 €’000s
Net fair value gains on sale of investments Net change in fair value appreciation on investments Fair value currency losses Net gains on financial assets at fair value through profit or loss
2007 €’000s
15,429
13,846
(52,095) (7)
13,312 (1)
7.
(36,674)
27,157
2008 €’000s 1,035 1,035
2007 €’000s 707 707
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR
shares are redeemable at the shareholders option and are classified as financial liabilities.
The Fund does not hold any open futures as at 29 February 2008 (2007: nil).
PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
2008 €’000s 233,691 183,232 263,849 161,294
2007 €’000s 102,906 233,692 119,751 263,849
2008 €’000s 33 1 34
2007 €’000s 32 37 29 98
Pay Date June September December February March* Equalisation income Equalisation expense
2008 €’000s 2,876 1,592 96 109 4,673 (237) 416 4,852
* Outstanding at end of year
DEBTORS
Dividends receivable Securities lending income receivable Interest income receivable Debtors
8.
equal to the Net Asset Value of the Fund. Redeemable participating
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE
LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
2007 No. of Shares ’000s 4,500 4,350 (450) 8,400
The issued and fully paid participating share capital is at all times
OPERATING EXPENSES
Management fees Operating expenses
6.
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 8,400 2,700 (5,100) 6,000
10. FUTURES
VALUE THROUGH PROFIT OR LOSS
5.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
CREDITORS (amounts falling due within one year)
Accrued expenses Creditors
108 iShares plc Annual Report
2008 €’000s 68 68
2007 €’000s 101 101
www.iShares.eu
2007 €’000s 1,280 1,118 207 2,605 (226) 10 2,389
iShares DJ Euro STOXX Value PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Operating income
3
2,100
1,773
Net (losses)/gains on financial assets at fair value through profit or loss
4
(6,908)
4,633
(4,808)
6,406
(247)
(176)
(5,055)
6,230
(1,721)
(1,177)
(6,776)
5,053
(122)
(418)
103
(19)
(6,795)
4,616
Total investment (loss)/income Operating expenses
5
Net (deficit)/income Finance costs Distributions to Redeemable Participating Shareholders
11
(Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
48,274
34,235
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(6,795)
4,616
Share transactions Proceeds from issue of Redeemable Participating Shares
17,362
17,573
Payments on redemption of Redeemable Participating Shares
(8,942)
(8,150)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
49,899
48,274
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
Debtors
7
Cash and bank balances Total current assets
49,580
48,288
43
8
259
30
49,882
48,326
Current liabilities Financial liabilities at fair value through profit of loss Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
10
(12)
-
8
(55)
(19)
11
-
(14)
(67)
(33)
49,815
48,293
84
(19)
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €000's 34,235) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 1,200,000) Net Asset Value per Redeemable Participating Share (2006: €28.53)
9
49,899
48,274
1,700,000
1,500,000
€29.35
€32.18
The accompanying notes form an integral part of the financial statements.
www.iShares.eu
iShares plc Annual Report 109
iShares DJ Euro STOXX Value SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
260,315
0.52
EUROPEAN UNION (cont)
EUROPEAN UNION
Gas Distribution
Automobiles 6,854
Gaz De France Com EUR 1.00
33,902
Daimler AG Ord NPV (Regd)
1,886,985
3.78
5,646
Peugeot SA Com EUR 1.00
285,462
0.57
Porsche Automobil Holding SE NonVoting Pref NPV
84,996
ENI Com EUR 1.00
1,937,909
3.88
340,136
0.68
5,267
OMV AG Com NPV
251,815
0.50
6,951
Renault SA Com EUR 3.81
494,911
0.99
73,731
3,685,075
7.39
4,918
Volkswagen AG Ord NPV
736,667
1.48
3,631
Volkswagen AG Non-Voting Pref NPV
331,256
0.66
503,997
1.01
94,265
0.19
1,717,017
3.44
301
Banks 130,058 29,714 26,808 17,472 2,829
Life Insurance 50,653 1,302 77,204
1,769,766
3.55
22,861
E.On AG Com NPV
2,835,907
5.68
0.97
16,140
RWE AG (Neu) Com NPV
1,286,519
2.58
2.59
1,400
92,554
0.19
1,728,832
3.46
1,806,303
3.62
317,639
0.64
466,146
0.93
876,511
1.76
1,347,882
2.70
228,627
0.46
1,458,516
2.92
Credit Agricole SA Com EUR 3.00 Deutsche Bank AG Ord NPV (Regd) Deutsche Postbank AG Com NPV (Regd)
KBC Groep NV Com NPV
483,348 1,289,783 181,339
0.36
1,094,105
2.19
333
-
473,701
0.95
Societe Generale Com EUR 1.25 (Sub Rights 29/02/2008)
91,112
0.18
16,270
Societe Generale Com EUR 1.25
1,156,797
2.32
240,412
0.48
HeidelbergCement AG Com NPV Lafarge Com EUR 4.00
37,022
Basf SE Com NPV
17,627
Endesa SA Com EUR 1.20 (Regd)
2,881
1.15
63,229
0.13
568,297
1.14
1,414,789
2.84
100,171
0.20
Enel Com EUR 1.00
1,037,900
2.08
137,549
Iberdrola SA Com EUR 0.75
1,320,470
2.65
Fixed Line Telecommunications Belgacom SA Com NPV
Unibail-Rodamco Com EUR 5.00 Reinsurance
26,638 571,961
145,568
5,420
Sampo Oyj Series 'A' Com NPV
Muenchener Rueckversicherungs AG Com NPV (Regd) Specialty Chemicals
Electricity 3,041
Sanofi-Aventis Com EUR 2.00 Property & Casualty Insurance
7,579
Commodity Chemicals 16,893
Suez Com EUR 2.00 Pharmaceuticals
Building Materials & Fixtures Compagnie De St-Gobain Com EUR 4.00
RWE AG (Neu) Non-Voting Pref NPV
Real Estate Investment Trusts
Broadline Retailers PPR Com EUR 4.00
Multiutilities
40,987
16,270
605
ING Groep NV CVA Com EUR 0.24
BNP Paribas Com EUR 2.00
Fortis VVPR Strip Com NPV
4,943
CNP Assurances Com EUR 4.00
3.58
Fortis Com NPV
10,955
Aegon NV Com EUR 0.12
1,788,298
33,250
2,648
Total Com EUR 2.50
Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49
74,632 5,686
Integrated Oil & Gas
171,733
0.35
Bayer AG Ord NPV Specialty Finance
2,878
Groupe Bruxelles Lambert Com NPV Steel
28,796
ArcelorMittal Com NPV Tyres
5,057
Michelin (CGDE) Com EUR 2.00 EUROPEAN UNION - TOTAL
331,790
0.67
49,579,526
99.35
FUTURES 29
Liffe Fortis Future March 2008
(11,879)
(0.02)
FUTURES - TOTAL
(11,879)
(0.02)
49,567,647
99.33
103,939
Deutsche Telekom AG Com NPV (Regd)
1,299,238
2.60
66,089
France Telecom Com EUR 4.00
1,472,463
2.95
29,630
Portugal Telecom SGPS SA Com EUR 0.03
250,374
0.50
CASH*
259,275
0.52
2,795,830
5.60
OTHER NET LIABILITIES
(11,898)
(0.02)
1,219,441
2.44
49,815,024
99.83
84,379
0.17
49,899,403
100.00
145,389
Telefonica SA Com EUR 1.00
AT BID PRICES
Food Products 59,398
Unilever NV CVA Com EUR 0.16
TOTAL VALUE OF FUND AT BID
Food Retailers & Wholesalers 302 1,667 863
MARKET PRICES Adjustment from bid market prices to last traded market prices
Casino Guichard-Perrachon Com EUR 1.53
16,290
0.03
Casino Guichard-Perrachon Pref EUR 1.53
124,975
0.25
27,357
0.05
Kesko Oyj Series 'A' Com EUR 2.00
TOTAL VALUE OF INVESTMENTS
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
* *€215,386 is held with The Governor & Company of the Bank of Ireland. €43,889 is held with Barclays Bank plc.
Full Line Insurance 15,621
Allianz SE Com NPV (Regd)
1,823,908
3.66
63,599
AXA Com EUR 2.29
1,429,070
2.86
110 iShares plc Annual Report
www.iShares.eu
iShares DJ Euro STOXX Value Schedule of material Portfolio Changes for the year ended 29 February 2008 (uanudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
ABN-Amro Holdings Com NPV (assented line RBS offer)
2,665,942
Total Com EUR2.50
5,406,983
E.On AG Com NPV
1,176,411
Telefonica SA Com EUR1.00
3,400,354
Telecom Italia SPA Com EUR0.55
1,051,795
Allianz SE Com NPV (Regd)
3,073,199
Veolia Environnement Com EUR5.00
1,027,054
Sanofi-Aventis Com EUR2.00
2,682,527
Endesa SA Com EUR1.20 (Regd)
1,025,039
Banco Bilbao Vizcaya Argentaria SA Com EUR0.49
2,590,906
Total Com EUR2.50
1,004,174
E.On AG Com NPV
1,068,640
Koninklijke KPN NV Com EUR0.24
985,422
BNP Paribas Com EUR2.00
939,267
BNP Paribas Com EUR2.00
812,663
ING Groep NV CVA Com EUR0.24
926,010
Commerzbank AG Ord NPV
801,510
ENI Com EUR1.00
838,785
ENI Com EUR1.00
755,054
Daimler AG Ord NPV (Regd)
815,926
Allied Irish Banks Ord EUR0.32
727,084
Societe Generale Com EUR1.25
813,669
Thyssenkrupp AG Com NPV
723,408
AXA Com EUR2.29
781,938
Allianz SE Com NPV (Regd)
717,026
Deutsche Bank AG Ord NPV (Regd)
717,607
Akzo Nobel NV Com EUR2.00
691,845
ABN-Amro Holdings Com NPV
699,250
Deutsche Bank AG Ord NPV (Regd)
609,326
Iberdrola SA Com EUR0.75
661,493
Fiat SPA Com EUR5.00
606,599
Michelin (CGDE) Com EUR2.00
653,817
Daimler AG Ord NPV (Regd)
605,787
Suez Com EUR2.00
650,820
Basf SE Com NPV
586,011
KBC Groep NV Com NPV
650,622
AXA Com EUR2.29
583,667
Unibail-Rodamco Com EUR5.00
650,466
Telefonica SA Com EUR1.00
580,821
Basf SE Com NPV
613,936
www.iShares.eu
iShares plc Annual Report 111
iShares DJ Euro STOXX Value NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
8.
SIGNIFICANT ACCOUNTING POLICES
CREDITORS (amounts falling due within one year) 2008 €’000s 20
See pages 21 to 24. 2.
Accrued expenses Purchases of securities payable awaiting settlement Creditors (amounts falling due within one year)
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
2008 €’000s 1,917 22 156 5 2,100
2007 €’000s 1,765 8 1,773
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency losses Net fair value losses on sale of futures contracts Net change in fair value on futures Net (losses)/gains on financial assets at fair value through profit or loss
6.
2008 €’000s
2007 €’000s
3,181
1,496
55
19
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid. 2008 No. of Shares ’000s 1,500 500 (300) 1,700
2007 No. of Shares ’000s 1,200 600 (300) 1,500
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating
(10,025) (10)
3,137 -
(42) (12)
-
(6,908)
4,633
as financial liabilities. 10. FUTURES The Company enters into future contracts with Barclays Bank PLC, for the purpose of efficient portfolio management. These derivatives will
2008 €’000s 247 247
2007 €’000s 176 176
normally be traded on a recognised market. The net unrealised loss on open futures contracts at 29 February 2008 comprised:
FINANCIAL ASSETS AT FAIR VALUE THROUGHT PROFIT OF
No. of Contracts 29
LOSS
The Fund did not hold any open futures as at 28 Feb 2008.
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year*
2008 €’000s 40,944 52,261 48,288 49,568
2007 €’000s 30,026 40,934 34,232 48,288
* Includes unrealised loss on futures
7.
-
shares are redeemable at the shareholders option and are classified
OPERATING EXPENSES
Management fees Operating expenses
9.
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
VALUE THROUGH PROFIT OR LOSS
5.
35
OPERATING INCOME
Dividends Interest income Securities lending income Other income Operating income
4.
2007 €’000s 19
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their being paid in March, June, September and December of each year.
DEBTORS
Dividends receivable Interest income receivable Sale of securities awaiting settlement Debtors
Unrealised Loss EUR (11,879)
Futures Liffe Fortis Future March 2008
2008 €’000s 43 43
2007 €’000s 5 3 8
Pay Date June September December February March* Equalisation income Equalisation expense
2008 €’000s 726 922 3 131 1,782 (84) 23 1,721
2007 €’000s 623 480 14 14 1,131 (39) 85 1,177
* Outstanding at end of year
112 iShares plc Annual Report
www.iShares.eu
iShares FTSE 100 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Operating income
3
56,761
42,812
Net (losses)/gains on financial assets at fair value through profit or loss
4
(81,463)
86,916
(24,702)
129,728
(6,508)
(5,524)
(31,210)
124,204
(48,555)
(36,487)
Total investment (loss)/income Operating expenses
5
Net income Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(1)
-
(79,766)
87,717
(583)
(437)
211
187
(80,138)
87,467
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
1,486,973
1,048,677
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(80,138)
87,467
Proceeds from issue of Redeemable Participating Shares
241,441
350,829
Payments on redemption of Redeemable Participating Shares
(32,301)
-
1,615,975
1,486,973
Share transactions
Net assets attributable to Redeemable Participating Shareholders at the end of the year
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Current assets Financial assets at fair value through profit or loss
6
1,594,841
1,444,705
Debtors
7
6,450
5,562
Cash and bank balances
15,793
42,000
1,617,084
149,2267
10
(1,228)
(216)
8
(649)
(585)
11
-
(5,050)
(1,877)
(5,815)
1,615,207
1,486,416
768
557
1,615,975
1,486,973
275,619,707
241,619,707
£5.86
£6.15
Total current assets Current liabilities Financial liabilities at fair value through profit or loss Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: £000s 1,048,307) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 181,219,707) Net Asset Value per Redeemable Participating Share (2006: £5.79)
9
The accompanying notes form an integral part of the financial statements. www.iShares.eu
iShares plc Annual Report 113
iShares FTSE 100 SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
HOLDING
Aerospace Rolls Royce Group Ord GBP 0.20 British Airways Ord GBP 0.25
0.56
769,368
NEXT Ord GBP 0.10
3,388,517
0.21
194,293 78,532
Man Group Ord USD 0.03
3,019,611
0.19
10,891,709
0.67
Schroders Voting Shares Ord GBP 1.00
1,861,327
0.12
Schroders Non-Voting Shares Ord GBP 1.00
667,522
0.04
Alliance & Leicester Ord GBP 0.50
2,703,625
0.17
7,491,791
Barclays Ord GBP 0.25**
35,754,573
2.21
4,292,779
HBOS Ord GBP 0.25
25,885,457
1.60
103,720,782
6.42
13,540,572 6,448,703 11,537,364 1,601,829
HSBC Holdings Ord USD 0.50 (UK Regd)
Cairn Energy Ord GBP 0.0615
4,052,163
0.25
Tullow Oil Ord GBP 0.10
5,153,533
0.32
21,031,729
1.30
4,999,901
0.31
Fixed Line Telecommunications 9,275,294
BT Group Ord GBP 0.05
2,829,599
Cable & Wireless Ord GBP 0.25 Food Products Associated British Foods Ord GBP 0.0568
3,842,398
0.24
2,406,741
Cadbury Schweppes Ord GBP 0.125
13,549,952
0.84
1,499,653
Unilever Ord GBP 0.0311
23,934,462
1.48
9,148,074
0.57
Food Retailers & Wholesalers 3,077,569
Morrison (WM.) Supermarkets Ord GBP 0.10 Sainsbury (J) Ord GBP 0.28571428 Tesco Ord GBP 0.05
Lloyds TSB Group Ord GBP 0.25
29,212,625
1.81
1,986,904
Royal Bank of Scotland Group Ord GBP 0.25
44,390,008
2.75
9,011,875
Standard Chartered Ord USD 0.50
7,058,476
0.44
36,092,559
2.23
4,867,560
0.30
13,571,118
0.84
Anglo American Ord USD 0.54945
Full Line Insurance 26,782,581
1.66
Brewers
Royal & Sun Alliance Ord GBP 0.275
1,285,447
Sabmiller Ord USD 0.10
Gas Distribution
1,084,564
Scottish & Newcastle Ord GBP 0.20
13,535,757
0.84
8,557,210
0.53
4,454,713
3,690,341
4,204,839
Broadcasting & Entertainment 1,506,057
General Mining 1,518,151
49,066,640
3.04
8,554,404
0.53
450,855
Antofagasta Ord GBP 0.05
3,663,197
0.23
ITV Ord GBP 0.10
2,984,658
0.18
2,584,120
BHP Billiton Ord USD 0.50
42,121,156
2.61
211,385
Kazakhmys Ord GBP 0.20
3,265,898
0.20
65,567,906
4.06
3,598,966
0.22
33,018,507
2.04
Persimmon Ord GBP 0.10
2,549,312
0.16
Taylor Wimpey Ord GBP 0.255
2,118,346
0.13
3,519,269
0.22
2,602,570
0.16
4,684,451
0.29
2,273,854
0.14
1,004,421
Home Retail Group Ord GBP 0.10
1,950,194
Marks & Spencer Group Ord GBP 0.25
2,601,450 7,854,406
0.16 0.49
1,146,693
Vedanta Resources Ord USD 0.10
834,222
Xstrata Ord USD 0.50 Home Construction
Capita Group Ord GBP 0.020667
4,515,117
0.28
1,170,278
Experian Group Ord USD 0.10
4,985,384
0.31
1,461,964
G4S Ord GBP 0.25
3,194,391
0.20
2,073,505
Rentokil Initial Ord GBP 0.01
1,723,083
0.11
345,904 1,230,881
Home Improvement Retailers 2,684,416
Containers & Packaging Rexam Ord GBP 64.285714 BAE Systems Ord GBP 0.025
3,239,472
0.20
19,373,834
1.20
30,766,670
1.90
4,401,896
0.27
Distillers & Vintners 2,975,500
Diageo Ord GBP 28.935185
337,339
Smiths Group Ord GBP 0.375
1,722,467 980,083
6,640,751
0.41
International Power Ord GBP 0.50
6,549,681
0.40
Scottish & Southern Energy Ord GBP 0.50
114 iShares plc Annual Report
21,771,522
14,475,826
0.89
Admiral Group Ord GBP 0.001 Integrated Oil & Gas
3,857,692
British Energy Group Ord GBP 0.10
Wolseley Ord GBP 0.25 Insurance Brokers
224,025
Electricity 1,174,315
Intercontinental Hotels Ord GBP 0.13617 Industrial Suppliers
753,733
Diversified Industrials 443,516
Kingfisher Ord GBP 0.157142857 Hotels
Defence 4,017,384
Rio Tinto Ord GBP 0.10 (Regd)
163,962
Business Support Services
734,158
Centrica Ord GBP 0.061728395
British Sky Broadcasting Group Ord GBP 0.50 Broadline Retailers
688,280
0.16
822,591
452,846
Banks 481,072
2,621,621
149,196
Asset Managers 1,962,470
Alliance Trust Ord GBP 0.025 Exploration & Production
Apparel Retailers 234,260
% OF FUND
Equity Investment Instruments 8,990,961
Airlines 1,315,929
FAIR VALUE GBP
UNITED KINGDOM (cont)
UNITED KINGDOM 2,069,266
INVESTMENT
BG Group Ord GBP 0.10 BP Ord USD 0.25
45,945,112
2.84
118,763,653
7.35
4,112,732
Royal Dutch Shell Class 'A' Ord EUR 0.07
74,317,067
4.60
3,167,564
Royal Dutch Shell Class 'B' Ord EUR 0.07
56,382,639
3.49
www.iShares.eu
iShares FTSE 100 Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
HOLDING
Restaurants & Bars (cont)
Investment Services 552,270
ICAP Ord GBP 0.10
3,479,301
0.21
241,207
London Stock Exchange Ord GBP 0.06918604
3,270,767
0.20
18,172,759
1.12
3,271,187
0.20
Life Insurance
207,656
Whitbread Ord GBP 0.76797385
2,628,925
0.16
2,923,567
0.18
4,783,865
0.30
3,662,579
0.23
1,273,571
0.08
British American Tobacco Ord GBP 0.25
32,843,780
2.03
Imperial Tobacco Group Ord GBP 0.10
18,156,371
1.12
Software 1,480,287
Sage Group Ord GBP 0.01 Specialty Chemicals
2,971,833
Aviva Ord GBP 0.25
2,450,327
Friends Provident Ord GBP 0.10
7,274,914
Legal & General Group Ord GBP 0.025
9,057,268
0.56
6,277,879
Old Mutual Ord GBP 0.10
7,859,905
0.49
2,817,047
Prudential Ord GBP 0.05
17,183,987
1.06
773,342
Resolution Ord GBP 0.05
5,316,726
0.33
Carphone Warehouse Ord GBP 0.001
Standard Life Ord GBP 0.10
5,451,974
0.34
Tobacco
8,178,802
0.51
WPP Group Ord GBP 0.10 Smith & Nephew Ord USD 0.20 Vodafone Group Ord USD 0.11428571
6,753,754
0.42
97,924,526
6.06
Multiutilities 2,931,791
National Grid Ord GBP 0.11395
21,504,687
1.33
Nondurable Household Products 819,512
Reckitt Benck Group Ord GBP 0.10
Johnson Matthey Ord GBP 1.00
22,364,482
1.38
2,971,742
0.18
3i Group Ord GBP 0.738636 Specialty Retailers
414,844
776,245
Mobile Telecommunications 60,261,247
447,748
1,733,181
Medical Equipment 1,030,321
246,337
Specialty Finance
Media Agencies 1,371,132
% OF FUND
UNITED KINGDOM (cont)
UNITED KINGDOM (cont)
2,492,331
FAIR VALUE GBP
INVESTMENT
Travel & Tourism 497,227
Firstgroup Ord GBP 0.05
2,878,944
0.18
559,264
Thomas Cook Group Ord EUR 0.10
1,715,542
0.11
639,140
Tui Travel Ord GBP 0.10
1,720,884
0.11 0.23
Water 266,423
Severn Trent Ord GBP 0.9789
3,785,871
1,001,301
United Utilities Ord GBP 1.00
6,934,009
0.43
UNITED KINGDOM - TOTAL
1,594,841,266
98.69
Oil Equipment & Services 383,946
Amec Ord GBP 0.50
1,671,176 6,321,768
AstraZeneca Ord USD 0.25 GlaxoSmithKline Ord GBP 0.25
31,635,362
1.96
69,665,883
4.31
414,769
Liberty International Ord GBP 0.50
3,985,930
0.25
629,935
Shire Ord GBP 0.05
6,236,357
0.38
Lonmin Ord USD 1.00
5,872,571
TOTAL VALUE OF INVESTMENTS AT BID PRICES
OTHER NET ASSETS TOTAL VALUE OF FUND AT BID MARKET PRICES
Pearson Ord GBP 0.25
6,127,606
0.38
1,260,964
Reed Elsevier Ord GBP 0.1444
8,032,341
0.50
1,442,407
Reuters Group Ord GBP 0.25
8,618,382
0.53
Yell Group Ord GBP 0.01
1,940,671
0.12
886,151
FUTURES - TOTAL
0.36
Publishing 920,061
FTSE 100 Index Future March 2008
CASH*
Platinum & Precious Metals 177,580
FUTURES 345
Pharmaceuticals
Real Estate Investment Trusts 585,092
British Land Company Ord GBP 0.25
5,567,150
0.34
332,345
Hammerson Ord GBP 0.25
3,672,412
0.23
533,047
Land Securities Ord GBP 0.10
8,416,812
0.52
4,877,277
0.30
Adjustment from bid market prices to last traded market prices TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
(1,227,660)
(0.08)
(1,227,660)
(0.08)
1,593,613,606
98.61
15,792,595
0.98
5,801,548
0.36
1,615,207,749
99.95
767,640
0.05
1,615,975,389
100.00
* £10,346,727 is held with The Governor & Company of the Bank of Ireland. £5,445,868 is held with Barclays Bank PLC ** Related party
Recreational Services 243,742
Carnival Ord USD 1.66 Restaurants & Bars
2,174,649
Compass Group Ord GBP 0.10
7,100,229
0.44
581,041
Enterprise Inns Ord GBP 0.025
2,417,131
0.15
www.iShares.eu
iShares plc Annual Report 115
iShares FTSE 100 Schedule of material Portfolio Changes for the year ended 29 February 2008 (unudited) LARGEST SALES
PROCEEDS GBP
LARGEST PURCHASES
COST GBP
Scottish Power Ord GBP0.42
11,364,506
HSBC Holdings Ord USD0.50 (UK Regd)
23,361,945
Alliance Boots Group Ord GBP0.37179482
10,943,725
BP Ord USD0.25
22,142,930
Imperial Chemical Industries Ord GBP1.00
8,944,584
Vodafone Group Ord USD0.11428571
17,479,378
Hanson Ord GBP0.10
7,921,031
GlaxoSmithKline Ord GBP0.25
14,598,014
Imperial Tobacco Group Ord GBP0.10
7,244,779
Royal Bank of Scotland Group Ord GBP0.25
13,935,361
Kelda Group Com GBP0.2022222
5,935,259
Royal Dutch Shell Class 'A' Ord EUR0.07
13,458,175
Invesco ORD USD0.10
5,849,617
Royal Dutch Shell Class 'B' Ord EUR0.07
10,703,378
Bradford & Bingley Ord GBP0.25
5,331,086
Barclays Ord GBP0.25
8,813,624
Corus Group Ord GBP0.50
5,301,322
Rio Tinto Ord GBP0.10 (Regd)
7,977,789
GlaxoSmithKline Ord GBP0.25
4,697,976
AstraZeneca Ord USD0.25
7,152,281
BP Ord USD0.25
4,559,469
Tesco Ord GBP0.05
6,845,685
Royal Dutch Shell Class 'A' Ord EUR0.07
3,457,421
HBOS Ord GBP0.25
6,707,324
AstraZeneca Ord USD0.25
2,617,310
Anglo American Ord USD0.54945
6,379,789
Tate & Lyle Ord GBP0.25
2,418,161
BHP Billiton Ord USD0.50
6,378,876
Cairn Energy Ord GBP0.0615
2,343,108
British Energy Group Ord GBP0.10
6,367,328
Punch Taverns Ord GBP0.004786
2,338,250
Lloyds TSB Group Ord GBP0.25
6,022,211
Drax Group Com GBP0.1155172
2,287,795
BG Group Ord GBP0.10
5,891,879
Segro REIT GBP0.27083
2,279,801
Diageo Ord GBP28.935185
5,364,768
HSBC Holdings Ord USD0.50 (UK Regd)
2,268,721
Xstrata Ord USD0.50
5,267,907
BHP Billiton Ord USD0.50
2,170,105
British American Tobacco Ord GBP0.25
5,124,139
116 iShares plc Annual Report
www.iShares.eu
iShares FTSE 100 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
8.
SIGNIFICANT ACCOUNTING POLICES
CREDITORS (amounts falling due within one year)
See pages 21 to 24. 2.
Accrued expenses Creditors (amounts falling due within one year)
FINANCIAL RISK MANAGEMENT
2008 £’000s 649
2007 £’000s 585
649
585
See pages 24 to 48. 9. 3.
OPERATING INCOME
Dividends Securities lending income Interest income Operating income
4.
2008 £’000s 54,949 73 1,739 56,761
2007 £’000s 41,024 4 1,784 42,812
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2008 £’000s
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency gains/(losses) Net fair value profits on sale of futures contracts Net change in fair value on futures Net (losses)/gains on financial assets at fair value through profit or loss
5.
24,751
Redeemable Participating Shares – issued and fully paid.
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 241,620 39,000 (5,000) 275,620
2007 No. of Shares ’000s 181,220 60,400 241,620
2007 £’000s
The issued and fully paid participating share capital is at all times
12,548
shares are redeemable at the shareholders option and are classified
equal to the Net Asset Value of the Fund. Redeemable participating as financial liabilities.
(105,732) 7
73,196 (22)
522 (1,011)
2,031 (837)
(81,463)
86,916
10. FUTURES The Company enters into futures contracts with Barclays Bank PLC, for the purpose of efficient portfolio management. These derivatives will normally be traded on a recognised market. The net unrealised
OPERATING EXPENSES
Management fees Operating expenses
SHARE CAPITAL
2008 £’000s 6,508 6,508
2007 £’000s 5,524 5,524
gain on open futures contracts at 29 February 2008 comprised: No. of Contracts 345
Unrealised Gain GBP (1,227,660)
Futures FTSE 100 Index Future March 2008
The net unrealised gain on open futures contracts at 28 February 6.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR
2007 comprised:
LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year* Fair value at the end the year*
2008 £’000s 1,164,574 1,420,441 1,444,489 1,593,613
2007 £’000s 813,224 1,164,574 1,020,780 1,444,489
*Includes unrealised gain on futures
No. of Contracts 671
Unrealised Gain GBP (216,415)
Futures FTSE 100 Index March 2007
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their
7.
DEBTORS
Dividends receivable Securities lending income receivable Interest income receivable Debtors
being paid in March, June, September and December of each year. 2008 £’000s 6,404 13 33 6,450
2007 £’000s 4,447 1,115 5,562
Pay Date June September December February March* Equalisation income Equalisation expense
2008 £’000s 19,098 11,998 11,784 6,753 49,633 (1,386) 308 48,555
2007 £’000s 14,879 12,035 6,348 5,050 38,312 (1,856) 31 36,487
* Outstanding at end of year www.iShares.e
iShares plc Annual Report 117
iShares FTSE 250 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net (losses)/gains on financial assets at fair value through profit or loss
4
Total investment (loss)/income Operating expenses
5
Net (deficit)/income
2008 £’000s
2007 £’000s
7,184
5,105
(23,930)
41,957
(16,746)
47,062
(1,152)
(905)
(17,898)
46,157
(6,156)
(4,058)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(27)
-
(24,081)
42,099
-
-
(176)
217
(24,257)
42,316
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
320,616
142,730
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(24,257)
42,316
Share transactions Proceeds from issue of Redeemable Participating Shares
8,304
145,943
Payments on redemption of Redeemable Participating Shares
(96,602)
(10,373)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
208,061
320,616
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Current assets Financial assets at fair value through profit or loss
6
207,705
319,995
Debtors
7
305
320
Cash and bank balances
-
746
208,010
321,061
8
(212)
(127)
11
-
(766)
(9)
-
(221)
(893)
207,789
320,168
272
448
Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable Bank overdraft Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: £000s 142,499) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 15,250,000) Net Asset Value per Redeemable Participating Share (2006: £9.36)
9
208,061
320,616
21,000,000
29,250,000
£9.91
£10.96
The accompanying notes form an integral part of the financial statements.
118 iShares plc Annual Report
www.iShares.eu
iShares FTSE 250 SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
HOLDING
UNITED KINGDOM
635,976
Business Support Services (cont) 1,992,745
0.95
469,373
Serco Group Ord GBP 0.02
2,044,119
0.98
Meggitt Ord GBP 0.05
1,775,963
0.85
49,388
Speedy Hire Ord GBP 0.05
390,659
0.19
59,620
WSP Group Ord GBP 0.05
323,439
0.16
160,119
Xchanging Ord GBP 0.05
435,924
0.21
1,480,740
0.71
871,847
0.42
1,755,672
0.84
699,666
0.34
Easyjet Ord GBP 0.25
1,235,874
0.59
Business Training & Employment Agencies
Apparel Retailers 196,648 1,657,344 287,349
Brown (N) Group Ord GBP 0.1105263 Signet Group Ord USD 0.009 Sports Direct International Ord GBP 0.10
492,603
0.24
1,364,737
1,015,123
0.49
310,542
336,917
0.16
Asset Managers Aberdeen Asset Management Ord GBP 0.10
823,139
0.40
272,367
Ashmore Group Ord GBP 0.01
717,687
0.34
Bluebay Asset Management Limited Ord GBP 0.001
217,718
0.10
F&C Asset Management Ord GBP 0.001
325,043
0.16
136,410
Hargreaves Lansdown Ord GBP 0.004
268,046
0.13
690,271
Henderson Group Ord GBP 0.125
702,351
0.34
166,614
New Star Asset Management Group Ord GBP 0.25
159,116
0.08
Rathbone Brothers Ord GBP 0.05
400,969
0.19
152,184
GKN Ord GBP 0.50 Bradford & Bingley Ord GBP 0.25
402,600
Northern Rock Ord GBP 0.25
Dimension Data Holdings Ord USD 0.01
1,410,168
LogicaCmg Ord GBP 0.10
56,277
Genus Ord GBP 0.10
1,801,035
0.87
Debenhams Ord GBP 0.0001 Marshalls Group Ord GBP 0.25
353,839
Cattles Ord GBP 0.10
248,694
International Personal Finance Ord GBP 0.10
125,300
Provident Financial Ord GBP 20.727
379,204
0.65
31,380
-
-
474,351 64,647
407,320
0.20
427,219
0.21
365,104
0.18
Business Support Services 263,934
Aggreko Ord GBP 0.20
540,537
Ashtead Group Ord GBP 0.10
101,776
Atkins (WS) Ord GBP 0.005
221,995
Babcock International Group Ord GBP 0.60
1,258,712
0.60
317,294
Bunzl Ord GBP 0.3214857
2,209,953
1.06
120,725
Connaught Ord GBP 0.02
484,409
0.23
162,842
Davis Service Group Ord GBP 0.30
816,653
0.39
145,466
De La Rue Ord GBP 0.297619
1,317,195
0.63
179,676
Eaga Ord GBP 0.001
340,037
62,866
Homeserve Ord GBP 0.125
0.06
827,983
0.40
501,740
0.24
1,007,412
0.48
596,298
0.29
Chemring Group Ord GBP 0.05
768,810
0.37
Qinetiq Group Ord GBP 0.01
936,843
0.45
Smith (DS) Ord GBP 0.10
1,551,932
0.75
412,159
0.20
1,120,554
0.54
170,799
Ultra Electronics Holdings Ord GBP 0.05 VT Group Ord GBP 0.05
775,764
0.37
1,130,689
0.54
550,475
0.26
Diamonds & Gemstones 60,030
Gem Diamonds Ord USD 0.01 Diversified Industrials
204,369
Cookson Group Ord GBP 0.10
1,220,083
0.59
851,640
Tomkins Ord GBP 0.05
1,445,659
0.69
343,561
0.17
Durable Household Products 111,365
AGA Foodservice Group Ord GBP 0.28125 Electrical Components & Equipment
244,672
Chloride Group Ord GBP 0.25
436,128
0.21
170,812
Laird Group Ord GBP 0.28125
848,082
0.41
267,502
Morgan Crucible Company Ord GBP 0.25
557,742
0.27
0.16
202,642
PV Crystalox Solar Ord GBP 0.02
265,968
0.13
1,247,890
0.60
112,611
Spectris Ord GBP 0.05
882,307
0.42
500,205
0.24
1,910,555
0.92
117,626
Interserve Ord GBP 0.10
151,049
Intertek Group Ord GBP 0.01
1,357,175
0.65
303,699
Mitie Group Ord GBP 0.025
785,062
0.38
104,341
Mouchel Group Ord GBP 0.0025
429,102
0.21
361,984
Halma Ord GBP 0.10
712,769
Regus Group Ord GBP 0.05
604,072
0.29
772,436
Invensys Ord GBP 0.10
203,237
RPS Group Ord GBP 0.03
603,614
0.29
34,664
Renishaw Ord GBP 0.20
www.iShares.eu
0.63
133,236
Consumer Finance
1,349,834
Building Materials & Fixtures 136,743
0.38
Defence
Broadline Retailers 625,962
Telecity Group Ord GBP 0.002
763,060 1,311,456
Containers & Packaging
Biotechnology 57,735
UK Coal Ord GBP 0.01
1,481,669
Banks 599,926
Burberry Group Ord GBP 0.0005
Computer Services
Auto Parts 679,636
Michael Page International Ord GBP 0.01
Coal
185,474
41,337
Hays Ord GBP 0.01
Clothing & Accessories 417,272
611,999
72,092
% OF FUND
Cobham Ord GBP 0.025 Airlines
301,985
FAIR VALUE GBP
UNITED KINGDOM (cont)
Aerospace 1,096,421
INVESTMENT
Electricity 328,839
Drax Group Ord GBP 0.1155172 Electronic Equipment
749,307
0.36
1,985,161
0.95
241,088
0.12
iShares plc Annual Report 119
iShares FTSE 250 Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
HOLDING
UNITED KINGDOM (cont) Aberforth Smaller Companies Trust Ord GBP 0.01
566,290
0.27
Bankers Investment Trust Ord GPB0.25
441,904
0.21
285,053
British Assets Trust Ord GBP 0.25
365,580
0.18
153,794
British Empire Securities & General Trust Ord GBP 0.10
687,459
0.33
Caledonia Investments Ord GBP 0.05
841,328
0.40
21,171
Candover Investments Ord GBP 0.25
461,316
0.22
205,055
City of London Investment Trust Ord GBP 0.25
0.39 0.29
58,057
Fidelity European Values Ord GBP 0.25
731,518
0.35
1,966,260 475,270
0.95 0.23
291,559
0.14
1,038,081
0.50
101,997
JPMorgan Indian Investment Trust Ord GBP 0.25
410,028
0.20
102,835
Merchants Trust Ord GBP 0.25
436,792
0.21
154,302
Merrill Lynch World Mining Trust Ord GBP 0.05
1,044,625
0.50
259,608
Monks Investment Trust Ord GBP 0.05
867,091
0.42
61,951
Murray Income Trust Ord GBP 0.25
382,857
0.18
84,519
Murray International Trust Ord GBP 0.25
135,494
SVG Capital Ord GBP 1.00
129,208
Scottish Investment Trust Ord GBP 0.25
266,532
Scottish Mortgage Investment Trust Ord GBP 0.25
57,067
Temple Bar Investment Trust Ord GBP 0.25
460,500
Templeton Emerging Markets Investment Trust Ord GBP 0.25
221,496
Witan Investment Trust Ord GBP 0.25
127,150
Dairy Crest Group Ord GBP 0.25
671,988
0.32
475,054
Northern Foods Ord GBP 0.25
429,924
0.21
758,548
0.36
2,400,678
1.15
447,354
0.22
326,340
0.16
10,284
Dana Petroleum Ord GBP 0.15
50,049
Imperial Energy Corporation Ord GBP 0.025
110,775 80,300
JKX Oil & Gas Ord GBP 0.10 Premier Oil Ord GBP 0.50
120 iShares plc Annual Report
Greggs Ord GBP 0.20 Furnishings
83,197
Headlam Group Ord GBP 0.05
104,062
888 Holdings Ord GBP 0.005
145,687
0.07
597,249
Ladbrokes Ord GBP 0.28333
1,817,130
0.87
298,426
0.14
1,271,504
0.61
1,136,862 337,269
Partygaming Ord GBP 0.000015 William Hill Ord GBP 0.10 General Mining
1,035,003
Aricom Ord GBP 0.001
812,477
0.39
178,129
Ferrexpo Ord GBP 0.10
591,388
0.28
1,889,871
0.91
712,794
0.34
Gold Mining 72,520
Randgold Resources Ord USD 0.05 Health Care Providers
586,562
0.28
182,417
Southern Cross Healthcare Group Ord GBP 0.01 Heavy Construction
414,053
Balfour Beatty Ord GBP 0.50
1,842,536
0.89
383,174
Carillion Ord GBP 0.50
1,434,029
0.69
356,572
Galliford TRY Ord GBP 0.05
246,926
0.12
460,154
0.22
62,260
Keller Group Ord GBP 0.10
369,513
0.18
1,661,277
0.80
36,475
Kier Group Ord GBP 0.01
509,556
0.24
989,106
0.48
30,878
Morgan Sindall Ord GBP 0.05
335,644
0.16
1,381,013
0.66
884,014
0.42
Home Construction 613,738
0.29
1,620,515
0.78
395,474
0.19
1,995,116
0.96
337,038
Barratt Developments Ord GBP 0.10
110,640
Bellway Ord GBP 0.125
116,643
Berkeley Group Holdings Units (Each Comp New Ord & 'B' Shares)
1,217,753
0.59
115,771
Bovis Homes Group Ord GBP 0.50
674,945
0.32
154,456
Redrow Ord GBP 0.10
473,408
0.23
360,227
0.17
577,688
0.28
580,526
0.28
1,310,463
0.63
Home Improvement Retailers 961,293
0.46
49,618
Carpetright Ord GBP 0.01 Hotels
Exploration & Production 83,665
0.21
Food Products
Gambling
JPMorgan Fleming Mercantile Investment Trust Ord GBP 0.25
RIT Capital Partners Ord GBP 1.00
434,052
Colt Telecom Group SA Ord EUR 1.25
Food Retailers & Wholesalers
103,189
150,478
262,267
Tate & Lyle Ord GBP 0.25
605,555
Perpetual Income & Growth Investment Trust Ord GBP 0.10
0.14
Fixed Line Telecommunications
457,272
807,896
204,513
298,654
Paypoint Ord GBP 0.0033
0.50
Electra Private Equity Ord GBP 0.25
JP Morgan European Investment Trust Growth Shares Com GBP 0.05
49,487
1,038,282
35,579
137,204
0.48
Financial Administration
Premier Foods Ord GBP 0.01
Edinburgh Investment Trust Ord GBP 0.25
JP Morgan Emerging Markets Investment Trust Ord GBP 0.25
0.66
1,000,141
824,509
193,508
104,685
1,371,511
Venture Production Ord GBP 0.004
0.27
Dexion Absolute GBP Com NPV
Foreign & Colonial Investment Trust Ord GBP 0.25
139,005
554,674
632,135
669,365
Soco International Ord GBP 0.20
Exploration & Production (cont) 70,551
111,592
42,193
% OF FUND
UNITED KINGDOM (cont)
Equity Investment Instruments 95,335
FAIR VALUE GBP
INVESTMENT
1,113,581
0.54
707,693
0.34
512,334
0.25
1,118,579
0.54
142,727
Millennium & Copthorne Hotels Ord GBP 0.30 Industrial Machinery
309,614
Bodycote International Ord GBP 0.10
158,844
Charter Ord GBP 0.02 (Regd)
www.iShares.eu
iShares FTSE 250 Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
HOLDING
UNITED KINGDOM (cont)
% OF FUND
1,385,074
0.67
Paper
362,604
Enodis Ord GBP 0.10
584,699
0.28
564,477
FKI Ord GBP 0.10
413,479
0.20
161,369
Foseco Ord GBP 0.25
314,653
IMI Ord GBP 0.25
354,239
Mondi Ord EUR 0.20 Personal Products
466,356
0.22
203,924
PZ Cussons Ord GBP 0.01
358,906
0.17
1,222,427
0.59
184,374
SSL International Ord GBP 0.10
901,128
0.43
677,881
0.33
1,892,750
0.91
380,702
0.18
82,898
Rotork Ord GBP 0.05
822,763
0.40
380,435
Senior Ord GBP 0.10
376,631
0.18
83,910
Severfield-Rowen Ord GBP 0.025
258,862
0.12
72,833
Spirax-Sarco Engineering Ord GBP 0.25
684,630
0.33
1,560,748
0.75
Weir Group Ord GBP 0.125
FAIR VALUE GBP
UNITED KINGDOM (cont)
Industrial Machinery (cont)
201,647
INVESTMENT
Pharmaceuticals 136,189
Hikma Pharmaceuticals Ord GBP.10 Platinum & Precious Metals
249,210 87,317
Industrial Suppliers
Aquarius Platinum Limited Com USD 0.05 Hochschild Mining Ord GBP 0.25 Property & Casualty Insurance
115,748
BSS Group Ord GBP 0.05
420,165
0.20
459,196
Amlin Ord GBP 0.28125
1,274,269
0.61
425,816
Electrocomponents Ord GBP 0.10
748,372
0.36
352,146
Beazley Group Ord GBP 0.05
568,716
0.27
204,704
Filtrona Ord GBP 0.25
388,426
0.19
303,162
612,312
Galiform Ord GBP 0.10
502,096
0.24
Brit Insurance Holdings Ord GBP 0.75
706,367
0.34
351,560
Premier Farnell Ord GBP 0.05
526,461
0.25
244,762
Catlin Group Com USD 0.01
929,484
0.45
131,258
SIG Ord GBP 0.10
1,095,348
0.53
383,411
Hiscox Ord GBP 0.05
1,048,629
0.50
118,644
Travis Perkins Ord GBP 0.10
1,286,101
0.62
Insurance Brokers 159,621 154,590
Benfield Group Limited Ord GBP 0.01 Jardine Lloyd Thompson Group Ord GBP 0.05
429,780
0.21
Publishing 269,674
Daily Mail & General Trust Class 'A' Non-Voting Ord GBP 0.125
1,263,423
0.61
206,801
EMAP Ord GBP 0.30
1,910,841
0.92
30,321 561,162
0.27
Investment Services
Euromoney Institutional Investor Ord GBP 0.0025
407,685
Informa Ord GBP 0.001
108,777
0.05
1,407,532
0.68
141,544
Close Bros Group Ord GBP 0.25
929,944
0.45
276,197
Johnston Press Ord GBP 0.10
530,989
0.26
234,294
Collins Stewart Ord GBP 0.25
314,540
0.15
283,283
Trinity Mirror Ord GBP 0.10
807,357
0.39
234,464
United Business Media Ord GBP 0.33806
1,254,382
0.60
Capital & Regional Ord GBP 0.10
345,676
0.17
Daejan Holdings Ord GBP 0.25
164,030
0.08
Grainger Ord GBP 0.05
369,852
0.18
Great Portland Estates Ord GBP 0.125
866,647
0.42
Mapeley Ord NPV
207,299
0.10
124,523
Quintain Estates & Development Ord GBP 0.25
549,769
0.26
124,868
Savills Ord GBP 0.025
427,049
0.21
St. Modwen Properties Ord GBP 0.10
423,288
0.20
Unite Group Ord GBP 0.25
409,129
0.20
Big Yellow Group Ord GBP 0.10
360,232
0.17
Brixton Com GBP 0.25
860,385
0.41
1,398,940
0.67
405,375
Investec Ord GBP 0.0002
1,499,888
0.72
207,422
Tullet Prebon Ord GBP 0.25
1,042,296
0.50
489,029
0.24
Real Estate Holding & Development
Life Insurance 183,673
St James's Place Ord GBP 0.15 Media Agencies
1,101,547
Aegis Group Ord GBP 0.05
4,792 1,236,487
0.59
238,694
ITE Group Ord GBP 0.01
358,638
0.17
235,918
Moneysupermarket.Com Group Ord GBP 0.0002
322,618
0.16
Rightmove Ord GBP 0.01
317,314
0.15
Taylor Nelson Sofres Ord GBP 0.05
752,078
0.36
63,210 404,343
Medical Equipment 45,425
Primback Entitlement Units
67,647
-
92,463 173,503 11,453
86,562
Mobile Telecommunications 442,021
Inmarsat Ord EUR 0.0005
2,191,319
1.05
122,128
Real Estate Investment Trusts
Nonferrous Metals 106,957
Talvivaara Mining Company Limited Ord NPV
82,955 373,013
0.18
97,965
Oil Equipment & Services 220,001
Abbot Group Ord GBP 0.15
105,922
Expro International Group Ord GBP 0.10
262,713
Derwent London Ord GBP 0.05
852,504
0.41
281,341
F&C Commercial Property Trust Ord GBP 0.90
1,330,380
0.64
420,019
Segro Ord GBP 0.27083
283,451
0.14
2,175,698
1.05
124,164
Hunting Ord GBP 0.25
957,925
0.46
129,915
Shaftesbury Ord GBP 0.25
743,763
0.36
169,011
Petrofac Ord USD 0.025
934,631
0.45
248,931
Wellstream Holdings Ord GBP 0.01
927,104
0.45
TR Property Investment Trust Ord GBP 0.25
474,214
0.23
128,284
TR Property Investment Trust Sigma Ord GBP 0.125
117,701
0.06
72,430 378,905
www.iShares.eu
Wood Group (John) Ord GBP 0.033333
1,564,878
0.75
iShares plc Annual Report 121
iShares FTSE 250 Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
HOLDING
UK Commercial Property Trust Limited Ord GBP 0.25
191,981
0.09
Workspace Group Ord GBP 0.10
448,529
0.22
Recreational Services 381,723
Rank Group Ord GBP 0.1388888
345,459
0.17
Greene King Ord GBP 0.125
878,330
0.42
271,216
Marston's Ord GBP 0.07375
652,953
0.31
389,977
Mitchells & Butlers Com GBP 0.085416
1,737,348
0.84
256,538
Punch Taverns Ord GBP 0.0004786
1,654,670
0.80
186,468
Restaurant Group Ord GBP 0.28125
269,912
0.13
137,226
Wetherspoon (J.D) Ord GBP 0.02
420,255
0.20
1,132,471
0.54
399,481
0.19
689,851
0.33
Semiconductors 125,229
CSR Ord GBP 0.001 Soft Drinks
207,630
Britvic Ord GBP 0.20
HMV Group Ord GBP 0.01
493,937
0.24
450,115
Inchcape Ord GBP 0.25
1,765,576
0.85
514,193
Kesa Electricals Ord GBP 0.25
1,105,515
0.53
159,440
WH Smith Ord GBP 0.2209
599,096
0.29
420,051
0.20
459,415
0.22
368,466 785,324
Autonomy Corporation Ord GBP 0.003333
Spirent Communications Ord GBP 3.333 Transportation Services
397,034
BBA Aviation Ord GBP 0.2976
731,535
0.35
44,093
Forth Ports Ord GBP 0.50
864,222
0.42
115,979
Wincanton Ord GBP 0.10
420,133
0.20
1,305,594
0.63
754,726
0.36
Travel & Tourism 191,156 41,906
Arriva Ord GBP 0.05 Go-Ahead Group Ord GBP 0.10
147,665
National Express Group Ord GBP 0.05
1,671,567
0.80
689,272
Stagecoach Group Ord GBP 0.009824
1,731,795
0.83
455,172
0.22
1,169,974
0.56
524,634
0.25
0.63
Software 205,880
International Ferro Metals Com NPV Telecommunications Equipment
134,610
Arm Holdings Ord GBP 0.0005
388,927
Steel
Restaurants & Bars
1,247,902
Trucking 1,944,537
0.93
Aveva Group Ord GBP 0.0333
633,412
0.30
144,093
Micro Focus Ord GBP 0.10
289,987
0.14
337,655
Biffa Ord GBP 0.10
489,600
Misys Ord GBP 0.01
731,952
0.35
228,102
Shanks Group Ord GBP 0.10
64,208
68,447
Water
61,273
Dignity Ord GBP 0.09
446,374
0.21
33,367
Tradus Ord GBP 0.05
598,938
0.29
Specialty Chemicals 79,060
Northgate Ord GBP 0.05 Waste & Disposal Services
Specialized Consumer Services
130,987
% OF FUND
Specialty Retailers (cont)
Real Estate Investment Trusts (cont)
171,031
FAIR VALUE GBP
UNITED KINGDOM (cont)
UNITED KINGDOM (cont)
245,343
INVESTMENT
376,740
Northumbrian Water Group Ord GBP 0.10
1,316,705
338,783
Pennon Group Ord GBP 0.407
2,176,681
1.04
UNITED KINGDOM - TOTAL
207,705,014
99.83
207,705,014
99.83
Croda International Ord GBP 0.10
794,436
0.38
Victrex Ord GBP 0.01
588,997
0.28
561,961
0.27
TOTAL VALUE OF INVESTMENTS AT BID PRICES
Specialty Finance 501,751
3I Infrastructure Limited Ord NPV
133,966
Helphire Group Ord GBP 0.05
230,422
0.11
BANK OVERDRAFT*
(9,285)
-
319,093
IG Group Holdings Ord GBP 0.00005
1,115,230
0.54
OTHER NET ASSETS
92,678
0.04
83,317
Intermediate Capital Group Ord GBP 0.20
1,253,921
0.60
TOTAL VALUE OF FUND AT BID MARKET PRICES
207,788,407
99.87
Adjustment from bid market prices to last traded market prices
272,216
0.13
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
208,060,623
100.00
Specialty Retailers 1,731,310
1,099,382
0.53
Findel Ord GBP 0.05
431,566
0.21
327,600
Game Group Ord GBP 0.05
608,517
0.29
211,811
Halfords Group Ord GBP 0.01
589,894
0.28
83,718
DSG International Ord GBP 0.025
122 iShares plc Annual Report
* All cash holdings are held with The Governor & Company of the Bank of Ireland.
www.iShares.eu
iShares FTSE 250 Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited)
LARGEST SALES
PROCEEDS GBP
LARGEST PURCHASES
COST GBP
British Energy Group Ord GBP0.10
6,865,352
Bradford & Bingley Ord GBP0.25
3,470,910
London Stock Exchange Ord GBP4.44767441
5,510,919
British Energy Group Ord GBP0.10
3,176,284
Tullow Oil Ord GBP0.10
5,466,371
Cairn Energy Ord GBP0.061538
2,877,317
Barratt Developments Ord GBP0.10
4,602,350
Kelda Group Com GBP0.2022222
2,808,340
Firstgroup Ord GBP0.05
4,451,632
Drax Group Ord GBP0.1155172
2,589,737
Cairn Energy Ord GBP0.061538
4,426,363
Segro Ord GBP0.27083
2,587,164
Taylor Wimpey Ord GBP0.25
4,307,968
Mondi Ord EUR0.20
2,355,326
Punch Taverns Ord GBP0.0004786
4,137,866
Punch Taverns Ord GBP0.0004786
2,093,234
Rentokil Initial Ord GBP0.01
3,997,477
Tate & Lyle Ord GBP0.25
2,082,735
G4S Ord GBP0.25
3,950,986
Barratt Developments Ord GBP0.10
2,069,371
Mitchells & Butlers Com GBP0.085416
3,934,522
Mitchells & Butlers Com GBP0.085416
1,806,503
Kelda Group Com GBP0.2022222
3,481,109
DSG International Ord GBP0.025
1,788,287
AMEC Ord GBP0.50
3,478,214
London Stock Exchange Ord GBP4.44767441
1,363,832
Alliance Trust Ord GBP0.025
3,254,794
Daily Mail & General Trust Class 'A' Non-Voting Ord
Admiral Group Ord GBP0.001
2,859,365
GBP0.125
Daily Mail & General Trust Class 'A' Non-Voting Ord
1,356,839
Sports Direct International Ord GBP0.10
931,142
GBP0.125
2,771,772
Gem Diamonds Ord USD0.01
847,235
EMI Group Ord GBP0.14
2,703,506
New Star Asset Management Group Ord GBP0.25
834,395
Schroders Non-Voting Ord GBP1.00
2,575,765
Aricom Ord GBP0.001
827,820
Burren Energy Ord GBP0.20
2,187,895
Investec Ord GBP0.0002
806,161
Tui Travel Ord GBP0.10
1,833,164
Galliford TRY Ord GBP0.05
803,398
www.iShares.eu
iShares plc Annual Report 123
iShares FTSE 250 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
SIGNIFICANT ACCOUNTING POLICES
9.
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Dividends Securities lending income Interest income Operating income
2008 £’000s 7,084 47 53 7,184
2007 £’000s 5,089 1 15 5,105
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 29,250 750 (9,000) 21,000
2007 No. of Shares ’000s 15,250 15,000 (1,000) 29,250
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
10. FUTURES 2008 £’000s
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency gains Net (losses)/gains on financial assets at fair value through profit or loss
5.
14,567
(56,460) 1
27,390 -
(23,930)
41,957
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE
2008 £’000s 1,152 1,152
2007 £’000s 905 905
LOSS
7.
2008 £’000s 262,166 206,336 319,995 207,705
2007 £’000s 112,311 262,281 142,750 319,995
2008 £’000s 134 8 1 162 305
2007 £’000s 308 12 320
being paid in March, June, September and December of each year.
Pay Date June September December February March* Equalisation income Equalisation expense
2008 £’000s 2,204 1,602 1,466 657 5,929 (21) 248 6,156
2007 £’000s 1,147 1,248 1,296 766 4,457 (427) 28 4,058
* Outstanding at end of year
DEBTORS
Dividends receivable Securities lending income receivable Interest income receivable Sale of securities awaiting settlement Debtors
8.
PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
The Fund does not hold any open futures as at 29 February 2008 (2007: nil).
32,529
OPERATING EXPENSES
Management fees Operating expenses
6.
2007 £’000s
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities awaiting settlement Creditors
124 iShares plc Annual Report
2008 £’000s 83
2007 £’000s 127
129 212
127
www.iShares.eu
iShares FTSEurofirst 80 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Operating income
3
4,491
5,464
Net (losses)/gains on financial assets at fair value through profit or loss
4
(10,931)
18,765
(5,972)
24,229
(662)
(730)
(6,643)
23,499
(4,049)
(4,510)
Total investment (loss)/income Operating expenses
5
Net (deficit)/income Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expense (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(2)
-
(10,685)
18,989
(157)
(184)
287
(135)
(10,555)
18,670
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
170,700
181,334
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(10,555)
18,670
Share transactions Proceeds from issue of Redeemable Participating Shares
7,161
1,707
Payments on redemption of Redeemable Participating Shares
(28,148)
(31,011)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
139,158
170,700
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
137,750
167,723
Debtors
7
86
99
Cash and bank balances
1,302
3,035
139,138
170,857
10
(132)
(11)
8
(57)
(68)
(189)
(79)
138,949
170,778
209
(78)
Total current assets Current liabilities Financial liabilities at fair value through profit or loss Creditors (amounts falling due within one year) Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €000s 181,277) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 15,771,769) Net Asset Value per Redeemable Participating Share (2006: €11.50)
9
139,158
170,700
11,871,769
13,431,769
€11.72
€12.71
The accompanying notes form an integral part of the financial statements.
www.iShares.eu
iShares plc Annual Report 125
iShares FTSEurofirst 80 SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
INVESTMENT
EUROPEAN UNION
EUROPEAN UNION (cont)
Automobiles
Electrical Components & Equipment
17,377
Bayerische Motoren Werke Com EUR 1.00
58,972
Daimlerchrysler AG Ord Com NPV (Regd)
628,526
0.45
14,067
Schneider Electric Com EUR 8.00
FAIR VALUE EUR
% OF FUND
1,065,013
0.77
Electricity 3,282,382
2.36
14,729
909,368
0.65
9,759
Peugeot SA Com EUR 1.00
493,415
0.35
263,525
Enel Com EUR 1.00
1,878,933
1.35
11,743
Renault SA Com EUR 3.81
836,102
0.60
285,177
Iberdrola SA Com EUR 3.00
2,737,699
1.97
12,365
Volkswagen AG Com NPV
1,852,153
1.33
4,448,390
3.20
Banks 213,736 70,096 359,515
Banco Bilbao Vizcaya Argentaria Com EUR0.49 Banco Popular Espanol Com EUR0.10
729,699
2.11 0.52
Banco Santander Com EUR0.50 (Regd)
4,285,419
3.08
51,703
BNP Paribas Com EUR2.00
3,079,431
2.21
37,325
Commerzbank AG Ord NPV
746,500
0.54
37,434
Credit Agricole SA Com EUR3.00
674,935
0.49
30,129
Deutsche Bank AG Com NPV (Regd)
2,224,123
1.60
61,303
Fortis Com NPV (Netherlands)
898,702
0.65
61,303
Fortis Com NPV (Belgium)
898,089
0.65
49,200
Fortis VVPR Strip Com NPV
492
-
2,250,008
1.62
507,616
Intesa Sanpaolo Com EUR0.52
Electronic Equipment 52,334
2,938,870
Endesa SA Com EUR 1.20
Siemens AG Com NPV (Regd) Fixed Line Telecommunications
186,775
Deutsche Telekom Com NPV (Regd)
2,334,688
1.68
111,347
France Telecom Com EUR 4.00
2,480,811
1.78
110,489
Kon KPN NV Com EUR 0.24
1,383,322
0.99
542,000
0.39
64,142
Portugal Telecom SA Com EUR 1.30 (Regd)
342,207
Telecom Italia Di Risp Com EUR 0.55
436,314
0.31
764,900
Telecom Italia SPA Com EUR 0.55
1,272,029
0.91
273,219
Telefonica SA Com EUR 1.00
5,254,001
3.78
Food Products 29,333
Groupe Danone Com EUR 0.50
1,524,436
1.10
91,246
Unilever NV CVA Com EUR 0.16
1,873,280
1.35
1,878,030
1.35
Food Retailers & Wholesalers
10,205
KBC Group Com NPV
850,179
0.61
26,628
Societe Generale Com EUR1.25 (Nil Paid Rights)
149,117
0.11
Societe Generale Com EUR1.25
1,893,251
1.36
25,716
Allianz AG Com NPV (Regd)
3,002,600
2.16
Unicredit SPA Com EUR0.50
2,769,129
1.99
80,481
Assic Generali SPA EUR 1.00
2,283,246
1.64
AXA Com EUR 2.29
2,676,559
1.92
26,628 568,318
40,232
50,509
Mediaset Com EUR 0.52
66,513
Vivendi Com EUR 5.50
Full Line Insurance
119,117
Broadcasting & Entertainment 301,034
0.22
1,743,306
1.25
Broadline Retailers 9,312
Metro AG Ord NPV
514,767
0.37
5,455
PPR Com EUR 4.00
495,259
0.36
Heavy Construction 14,577
Bouygues Com EUR 1.00
27,659
Vinci Com EUR 5.00
9,852
13,222
CIE De St Gobain Com EUR 4.00
1,119,800
0.80
Lafarge Com EUR 4.00
1,132,684
0.81
LVMH Moet-Hennessy Com EUR 0.30
1,435,013
1.03
7,994
Air Liquide Class 'L' Com EUR 11.00
1,305,157
0.94
28,349
Basf AG Com NPV
2,374,229
1.71
614,284
65,369
Deutsche Post AG Com NPV
22,262
TNT NV Com EUR 0.48 Pernod Ricard Com NPV
126 iShares plc Annual Report
Alstom Com EUR14.00 (PostConsolidation)
1,123,477
0.81
3,618,109
2.60
Repsol YPF SA Com EUR 1.00
1,595,854
1.15
Total SA Com EUR 2.50
6,839,313
4.91
1,194,580
0.86
Investment Services 11,461
Deutsche Boerse AG Com NPV Life Insurance
93,252
Aegon NV Com EUR0.12 ING Groep NV CVA Com EUR0.24
927,857
0.67
2,800,016
2.01
1,696,979
1.22 37,652
E.On AG Com NPV
4,670,731
3.36
1,133,369
0.81
22,435
RWE AG (New) Series 'A' Com NPV
1,788,294
1.29
581,261
0.42
74,280
Suez Com EUR 2.00
3,133,130
2.25
Multiutilities
Distillers & Vintners 12,582
0.45
ENI SPA Com EUR 1.00 (Regd)
125,900
Delivery Services 51,752
624,607
69,871
0.44
Consumer Electronics Philips Electronic (KON) Com EUR 0.20
Accor Com EUR 3.00
158,689 136,841
13,895
Linde AG Com NPV
0.91
Integrated Oil & Gas
Commodity Chemicals
6,998
0.48
Industrial Machinery
Clothing & Accessories 21,032
662,087 1,271,208
Hotels
Building Materials & Fixtures 21,448
Carrefour Com EUR 2.50
Paper 885,647
0.64
35,253
Stora Enso Oyj Series 'R' Com NPV
292,600
0.21
29,936
Unipapel SA Com EUR 1.50
343,665
0.25
www.iShares.eu
iShares FTSEurofirst 80 Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
Water
Personal Products L'Oreal SA Com EUR 0.20
1,392,478
1.00
26,768
Pharmaceuticals 58,159
Sanofi-Aventis Com EUR 2.00
% OF FUND
EUROPEAN UNION (cont)
EUROPEAN UNION (cont) 17,689
FAIR VALUE EUR
INVESTMENT
Veolia Environnement Com EUR 5.00 EUROPEAN UNION - TOTAL
1,575,831
1.13
137,749,994
98.98
2,837,578
2.04
Lagardere SCA Com EUR 6.10 (Regd)
397,431
0.29
FTSEurofirst 80 Future March 2008
(132,130)
(0.09)
Reed Elsevier NV Com EUR 0.06
462,066
0.33
FUTURES-TOTAL
(132,130)
(0.09)
1,442,618
1.04
TOTAL VALUE OF INVESTMENTS AT BID PRICES
137,617,864
98.89
1,302,235
0.94
28,832
0.02
Publishing 7,618 37,384
FUTURES 18
Reinsurance 12,474
Muenchener Rueckversicherung AG Com NPV (Regd) Semiconductors
39,509
Stmicroelectronics Com EUR 1.04
CASH* 315,677
0.22
OTHER NET ASSETS
1.21
TOTAL VALUE OF FUND AT BID MARKET PRICES
Software 53,447
SAP AG Ord NPV
1,689,460
Specialty Chemicals 16,469
Akzo Nobel NV Com EUR 2.00
43,631
Bayer AG Ord NPV
801,876
0.57
2,207,729
1.58
3,153,672
2.26
495,569
0.35
5,298,451
3.80
138,948,931
99.85
Adjustment from bid market prices to last traded market prices
208,751
0.15
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
139,157,682
100.00
Steel 62,264
Arcelor Mittal Steel Company NV Ord EUR 0.01
* €972,227 is held with The Governor & Company of the Bank of Ireland. €330,008 is held with Barclays Bank PLC.
Telecommunications Equipment 126,744
Alcatel Series 'A' Com EUR 2.01
219,944
Nokia OYJ Com EUR 0.06
www.iShares.eu
iShares plc Annual Report 127
iShares FTSEurofirst 80 Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
ABN-Amro (Assented Line RBS offer)
3,889,237
Alstom Com EUR14.00 (Post-Consolidation)
1,245,056
Endesa SA Com EUR1.20
1,511,317
Deutsche Boerse AG Com NPV
1,129,938
Total SA Com EUR2.50
1,505,262
Electricite De France Com EUR0.50
1,122,451
Nokia Oyj Com NPV
1,301,675
Unicredit SPA Com EUR0.50
1,020,763
Endesa SA Com EUR1.20 (Assented Line)
1,214,157
Iberdrola SA Com EUR0.75
855,251
Dexia Com NPV
1,192,669
ArcelorMittal Com NPV
822,138
Telefonica SA Com EUR1.00
1,190,980
Total SA Com EUR2.50
721,013
Banco Santander Com EUR0.50 (Regd)
992,820
Allianz SE Com NPV (Regd)
562,703
E.On AG Com NPV
917,362
Siemens AG Com NPV (Regd)
552,949
BNP Paribas Com EUR2.00
893,642
Banco Bilbao Vizcaya Argentaria Com EUR0.49
515,199
Siemens AG Com NPV (Regd)
892,021
Telefonica SA Com EUR1.00
508,010
Altadis SA Com EUR0.60 (Regd)
872,666
Nokia Oyj Com NPV
492,449
Allianz SE Com NPV (Regd)
823,894
Banco Santander Com EUR0.50 (Regd)
481,520
ENI Com EUR1.00
797,082
E.On AG Com NPV
455,149
ING Groep NV CVA Com EUR0.24
793,765
Daimler AG Ord NPV (Regd)
432,007
Daimler AG Ord NPV (Regd)
765,122
BNP Paribas Com EUR2.00
415,546
AXA Com EUR2.29
748,062
ENI Com EUR1.00
366,210
Sanofi-Aventis Com EUR2.00
746,247
Sanofi-Aventis Com EUR2.00
349,997
Banco Bilbao Vizcaya Argentaria Com EUR0.49
733,856
ING Groep NV CVA Com EUR0.24
343,604
Societe Generale Com EUR1.25
623,063
AXA Com EUR2.29
320,904
128 iShares plc Annual Report
www.iShares.eu
iShares FTSEurofirst 80 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
SIGNIFICANT ACCOUNTING POLICES
9.
2.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24. FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
OPERATING INCOME
Dividend income Securities lending income Interest income Other income Operating income
2008 €’000s 4,387 432 111 11 4,941
2007 €’000s 4,897 466 101 5,464
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 13,432 520 (2,080) 11,872
2007 No. of Shares ’000s 15,772 130 (2,470) 13,432
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 2008 €’000s
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency losses Net fair value gains on sale of futures contracts Net change in fair value on futures Net (losses)/gains on financial assets at fair value through profit or loss
5.
12,195
(25,400) (26)
6,218 (5)
99 (121)
456 (99)
(10,913)
18,765
The Company enters into future contracts with Barclays Bank PLC, for the purpose of efficient portfolio management. These derivatives will
The net unrealised gain on open futures contracts at 29 February 2008 comprised: Unrealised Gain EUR (132,130)
No. of Contracts Futures 18 FTSEurofirst 80 Future March 2008
The net unrealised gain on open futures contracts at 28 February 2008 €’000s 662 662
2007 €’000s 730 730
FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year* Fair value at the end the year*
10. FUTURES
normally be traded on a recognised market.
OPERATING EXPENSES
Management fees Operating expenses
6.
14,535
2007 €’000s
2008 €’000s 119,576 115,003 167,712 137,618
2007 €’000s 137,607 119,576 179,624 167,712
2007 comprised: No. of Contracts 57
Futures FTSE Eurofirst 80 Index Future March 2007
Unrealised Gain EUR (11,315)
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared semi-annually with a view to their being paid in June and December of each year.
*Includes unrealised gain on futures
7.
DEBTORS
Dividends receivable Securities lending income receivable Interest income receivable Sales of securities awaiting settlement Debtors
8.
2008 €’000s 8 1 77 86
2007 €’000s 9 24 66 99
Pay Date June December Equalisation income Equalisation expense
2008 €’000s 1,891 2,023 3,914 (80) 215 4,049
2007 €’000s 2,458 1,956 4,414 (2) 98 4,510
CREDITORS (amounts falling due within one year)
Accrued expenses Creditors (amounts falling due within one year) www.iShares.eu
2008 €’000s 57 57
2007 €’000s 68 68 iShares plc Annual Report 129
iShares FTSEurofirst 100 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
Operating income
3
Net (losses)/gains on financial assets at fair value through profit or loss
4
Total investment (loss)/income Operating expenses
5
Net (deficit)/income
2008 €’000s
2007 €’000s
3,196
2,612
(9,999)
5,695
(6,803)
8,307
(403)
(328)
(7,206)
7,979
(2,543)
(2,219)
Finance costs Distributions to Redeemable Participating Shareholders
11
Interest Expense (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/Increase in net assets attributable to Redeemable Participating Shareholders from operations
(5)
-
(9,754)
5,760
(86)
(64)
112
8
(9,728)
5,704
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
88,657
77,108
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(9,728)
5,704
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares Net assets attributable to Redeemable Participating Shareholders at the end of the year
32,141
5,845
(22,749)
-
88,321
88,657
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
87,670
87,712
Debtors
7
172
166
Cash and bank balances
461
847
88,303
88,726
10
(43)
(18)
8
(36)
(35)
(79)
(53)
88,224
88,672
97
(15)
88,321
88,657
3,250,000
2,925,000
€27.18
€30.31
Total current assets Current liabilities Financial liabilities at fair value through profit or loss Creditors (amounts falling due within one year) Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €000s 77,131) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 2,730,000) Net Asset Value per Redeemable Participating Share (2006: €28.24)
9
The accompanying notes form an integral part of the financial statements.
130 iShares plc Annual Report
www.iShares.eu
iShares FTSEurofirst 100 SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
1,393,058
1.58
63,245
Renault SA Com EUR 3.81
355,858
0.40
5,292
Volkswagen AG Ord NPV
780,705
0.88
4,998 5,212 90,992 152,382 157,805
855,716
0.97
Pernod Ricard Com NPV
372,504
0.42
Electricity
Banks
111,179
Enel Com EUR 1.00
Banco Bilbao Vizcaya Argentaria Com EUR 0.49
121,568
Iberdrola SA Com EUR 0.75
1,251,140
1.42
Banco Santander Com EUR 0.50 (Regd)
1,816,393
2.06
Barclays Ord GBP 0.25**
22,050
1.11 1.48
Deutsche Bank AG Com NPV (Regd)
940,172
1.06
26,476
Fortis Com NPV (Netherlands)
388,138
0.44
26,052
Fortis Com NPV (Belgium)
381,662
0.43
19,536
Fortis VVPR Strip Com NPV
195
-
90,372
HBOS Ord GBP 0.25
713,073
0.81
51,103
2,879,381
3.26
12,346
12,736
HSBC Holdings Ord USD 0.50 (UK Regd)
0.90 1.32
Siemens AG Com NPV (Regd)
1,874,250
2.12
Fixed Line Telecommunications
985,484
BNP Paribas Com EUR 2.00
792,706 1,167,053
Electronic Equipment
1,309,724
21,990
287,268
Diageo Ord GBP 28.935185
Distillers & Vintners
Automobiles Daimler AG Ord NPV (Regd)
% OF FUND
EUROPEAN UNION (cont)
EUROPEAN UNION 25,028
FAIR VALUE EUR
INVESTMENT
195,094
BT Group Ord GBP 0.05
578,861
0.66
78,883
Deutsche Telekom Com NPV (Regd)
986,038
1.12
47,421
France Telecom Com EUR 4.00
1,056,540
1.20
536,076
0.61
2,223,700
2.52
Cadbury Schweppes Ord GBP 0.125
376,477
0.43
Groupe Danone Com EUR 0.25
641,622
0.73
322,355
Telecom Italia SPA Com EUR 0.55
115,637
Telefonica SA Com EUR 1.00 Food Products
214,479
Intesa Sanpaolo Com EUR 0.52
950,678
1.08
38,601
Unilever NV CVA Com EUR 0.16
792,479
0.90
135,729
Lloyds TSB Group Ord GBP 0.25
804,552
0.91
31,953
Unilever Ord GBP 0.031111
667,310
0.76
243,004
Royal Bank of Scotland Group Ord GBP 0.25
11,247
Societe Generale Com EUR 1.25 (Nil Paid Rights)
11,247
Societe Generale Com EUR 1.25
33,740
Standard Chartered Ord USD 0.50
242,161
Unicredit SPA Com EUR 0.50
Food Retailers & Wholesalers 1,223,419
1.39
62,983
0.07
799,662
0.91
738,184
0.84
1,179,929
1.33
Brewers 5,995 27,129
Heineken NV Com EUR 1.60
224,093
0.25
Sabmiller Ord USD 0.10
373,805
0.42
Broadcasting & Entertainment 32,156 28,368
British Sky Broadcasting Group Ord GBP 0.50 Vivendi SA Com EUR 5.50
238,998 743,525
0.27 0.84
16,945
Carrefour Com EUR 2.50
790,993
0.90
42,333
Sainsbury (J) Ord GBP 0.28571428
196,787
0.22
1,002,663
1.14
1,270,466
1.44
969,460
1.10
1,139,903
1.29
191,324
Full Line Insurance 10,881
Allianz SE Com NPV (Regd)
34,172
Assic Generali SPA Com EUR 1.00
50,730
AXA Com EUR 2.29 General Mining
31,971
Anglo American Com USD 0.54945
1,352,106
1.53
55,006
BHP Billiton Ord USD 0.50
1,173,223
1.33
24,317
Rio Tinto Ord GBP 0.10 (Regd)
1,819,438
2.06
17,565
Xstrata Ord USD 0.50
909,718
1.03
Bouygues Com EUR 1.00
283,830
0.32
Vinci Com EUR 2.50
534,423
0.61
100,658
0.11
256,088
0.29
BG Group Ord GBP 0.10
1,277,062
1.45
BP Ord USD 0.25
3,285,974
3.72
67,468
ENI Com EUR 1.00
1,538,270
1.74
671,268
0.76
Heavy Construction
Broadline Retailers 41,530 2,330
6,249
Marks & Spencer Group Ord GBP 0.25
218,867
0.25
PPR Com EUR 4.00
211,541
0.24
11,628
Home Improvement Retailers 58,676
Building Materials & Fixtures 9,005
CIE De St Gobain Com EUR 4.00
470,151
0.53
4,200
Lafarge Com EUR 4.00
482,874
0.55
LVMH Moet-Hennessy Com EUR 0.30
5,421
12,040
Air Liquide Class 'L' Com EUR 5.50 Basf SE Com NPV
81,944 605,678
0.69
460,348
550,524
0.62
29,390
Repsol YPF SA Com EUR 1.00
1,008,350
1.14
87,238
Royal Dutch Shell Class 'A' Ord EUR 0.07
2,067,541
2.34
67,122
Royal Dutch Shell Class 'B' Ord EUR 0.07
1,563,392
1.77
57,898
Total SA Com EUR 2.50
2,893,742
3.28
Consumer Electronics 27,385
Philips Electronic (KON) Com EUR 0.20
710,915
0.80
Delivery Services 21,883 9,632 ** Related party www.iShares.eu
Accor Com EUR 3.00 Integrated Oil & Gas
Commodity Chemicals 5,861
Kingfisher Ord GBP 0.157142857 Hotels
Clothing & Accessories 8,877
Tesco Ord GBP 0.05
Deutsche Post AG Com NPV
479,238
0.54
TNT NV Com EUR 0.48
251,492
0.28
Life Insurance 39,240
Aegon NV Com EUR 0.12
390,438
0.44
62,828
Aviva Ord GBP 0.25
502,728
0.57
iShares plc Annual Report 131
iShares FTSEurofirst 100 Schedule of Investments (continued) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or other Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
EUROPEAN UNION (cont) ING Groep NV CVA Com EUR 0.24
59,255
Prudential Ord GBP 0.05 WPP Group Ord GBP 0.10
1.34
472,975
0.54
219,300
0.25
Smith & Nephew Ord USD 0.20
181,592
0.21
Vodafone Group Ord USD 0.11428571 E.On AG Com NPV
61,890
National Grid Ord GBP 0.11395
9,463 31,511
RWE AG (New) Series 'A' Com NPV Suez Com EUR 2.00
3.07
Reckitt Benck Group Ord GBP 0.10
SAP AG Ord NPV
721,846
0.82
Bayer AG Ord NPV
941,818
1.07
25,645
ArcelorMittal Com NPV (Netherlands) ArcelorMittal Com NPV (France)
24,687
0.03
1,298,918
1.47
2,232,636
2.53
1.03
Telecommunications Equipment 1,982,071
2.24
594,024
0.67
754,296
0.85
1,329,134
1.50
Nondurable Household Products 17,122
0.15
Steel
Multiutilities 15,978
134,822
Specialty Chemicals
488 2,711,600
Stmicroelectronics Com EUR 1.04 Software
18,613
Mobile Telecommunications 1,275,232
16,874 22,836
Medical Equipment 21,171
% OF FUND
Semiconductors 1,182,812
Media Agencies 28,096
FAIR VALUE EUR
EUROPEAN UNION (cont)
Life Insurance (cont) 53,184
INVESTMENT
611,422
0.69
124,882
0.14
92,679
Nokia Oyj Com NPV Tobacco
36,581
British American Tobacco Ord GBP 0.25
907,084
16,401
Imperial Tobacco Ord GBP 0.10
501,976
0.57
87,670,384
99.27
EUROPEAN UNION - TOTAL
Paper 15,046 13,038
Stora Enso Oyj Series 'R' Com NPV UPM-Kymmene Corporation Com NPV
149,676
0.17
Personal Products 7,540
L'Oreal SA Com EUR 0.20
593,549
0.67
873,802
0.99
Pharmaceuticals 35,276 134,073 24,649
AstraZeneca Ord USD 0.25 GlaxoSmithKline Ord GBP 0.25 Sanofi-Aventis Com EUR 2.00
1,933,330 1,202,625
(0.05)
(43,010)
(0.05)
TOTAL VALUE OF INVESTMENTS AT BID PRICES
99.22
2.19
460,816
0.52
1.36
OTHER NET ASSETS
136,153
0.15
TOTAL VALUE OF FUND AT BID MARKET PRICES 170,700
0.19
19,599
Pearson Ord GBP 0.25
170,801
0.19
15,348
Reed Elsevier NV Com EUR 0.07
189,701
0.21
26,904
Reed Elsevier Ord GBP 0.1444
224,254
0.25
602,190
0.68
195,917
0.22
Reinsurance Muenchener Rueckversicherung AG Com NPV (Regd)
(43,010)
FUTURES - TOTAL
87,627,374
Lagardere SCA Com EUR 6.10 (Regd)
5,207
FTSEurofirst 100 Future March 2008
CASH*
Publishing 3,272
FUTURES 10
88,224,343
99.89
Adjustment from bid market prices to last traded market prices
97,019
0.11
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
88,321,362
100.00
* €344,090 is held with The Governor & Company of the Bank of Ireland. €116,726 is held with Barclays Bank PLC.
Restaurants & Bars 45,857
Compass Group Ord GBP 0.10
132 iShares plc Annual Report
www.iShares.eu
iShares FTSEurofirst 100 Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited)
LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
ABN-Amro Holdings Com NPV (Assented Line RBS Offer)
1,708,480
ArcelorMittal Com NPV
1,407,852
BP Ord USD0.25
1,077,252
HSBC Holdings Ord USD0.50 (UK Regd)
1,378,571
HSBC Holdings Ord USD0.50 (UK Regd)
887,178
BP Ord USD0.25
1,343,529
Total SA Com EUR2.50
832,842
Total SA Com EUR2.50
1,128,567
Vodafone Group Ord USD0.11428571
823,426
Vodafone Group Ord USD0.11428571
1,095,213
GlaxoSmithKline Ord GBP0.25
751,660
Volkswagen AG Ord NPV
962,497
Nokia Oyj Com NPV
739,485
Xstrata Ord USD0.50
941,287
Royal Dutch Shell Class 'A' Ord EUR0.07
724,982
GlaxoSmithKline Ord GBP0.25
914,082
Telefonica SA Com EUR1.00
697,227
Royal Dutch Shell Class 'A' Ord EUR0.07
863,577
Siemens AG Com NPV (Regd)
560,451
Telefonica SA Com EUR1.00
797,860
Banco Santander Com EUR0.50 (Regd)
556,722
Nokia Oyj Com NPV
785,102
E.On AG Com NPV
556,161
Unicredit SPA Com EUR0.50
779,879
Endesa SA Com EUR1.20 (Assented Line)
535,493
Siemens AG Com NPV (Regd)
767,342
Endesa SA Com EUR1.20
515,788
Banco Santander Com EUR0.50 (Regd)
751,560
Royal Dutch Shell Class 'B' Ord EUR0.07
489,104
Vinci Com EUR2.50
740,292
BNP Paribas Com EUR2.00
459,358
E.On AG Com NPV
710,085
Daimler AG Ord NPV (Regd)
441,077
Royal Dutch Shell Class 'B' Ord EUR0.07
663,513
Rio Tinto Ord GBP0.10 (Regd)
439,637
Allianz SE Com NPV (Regd)
654,234
ENI Com EUR1.00
437,006
Royal Bank of Scotland Group Ord GBP0.25
649,478
Allianz SE Com NPV (Regd)
419,406
BNP Paribas Com EUR2.00
637,779
www.iShares.eu
iShares plc Annual Report 133
iShares FTSEurofirst 100 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
SIGNIFICANT ACCOUNTING POLICES
9.
2.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24. FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
OPERATING INCOME
Dividends Securities lending income Interest income Other income Operating income
2008 €’000s 3,000 148 43 5 3,196
2007 €’000s 2,473 100 28 11 2,612
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 2,925 1,040 (715) 3,250
2007 No. of Shares ’000s 2,730 195 2,925
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR 10. FUTURES
VALUE THROUGH PROFIT OR LOSS
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency (losses)/gains Net fair value (losses)/gains on sale of futures contracts Net change in fair value on futures Net (losses)/gains on financial assets at fair value through profit or loss
5.
2007 €’000s
7,306
928
(17,247) (20)
4,729 21
(13) (25)
39 (22)
(9,999)
5,695
The Company enters into future contracts with Barclays Bank PLC, for the purpose of efficient portfolio management. These derivatives will normally be traded on a recognised market. The net unrealised gain on open futures contracts at 29 February 2008 comprised: No. of Contracts 10
2008 €’000s 403 403
2007 €’000s 328 328
2007 comprised: No. of Contracts 20
Futures FTSE Eurofirst 100 Future March 2007
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year* Fair value at the end the year*
2008 €’000s 66,217 83,422 87,694 87,627
2007 €’000s 59,911 66,217 76,681 87,694
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS Dividends will normally be declared semi-annually with a view to their being paid in June and December of each year.
*Includes unrealised gain on futures
DEBTORS
Dividends receivable Securities lending income receivable Interest income receivable Debtors
8.
Unrealised Gain EUR (18,270)
FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
7.
Unrealised Gain EUR (43,010)
Futures FTSEurofirst 100 Future March 2008
The net unrealised gain on open futures contracts at 28 February
OPERATING EXPENSES
Management fees Operating expenses
6.
2008 €’000s
2008 €’000s 170 2 172
2007 €’000s 140 4 22 166
Pay Date June December Equalisation income Equalisation expense
2008 €’000s 1,317 1,508 2,825 (344) 62 2,543
2007 €’000s 1,249 1,018 2,267 (48) 2,219
CREDITORS (amounts falling due within one year)
Accrued expenses Creditors (amounts falling due within one year) 134 iShares plc Annual Report
2008 €’000s 36 36
2007 €’000s 35 35 www.iShares.eu
iShares FTSE EPRA European Property Index Fund PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Operating income
3
10,424
3,572
Net (losses)/gains on financial assets at fair value through profit or loss
4
(73,926)
49,155
(63,502)
52,727
(1,111)
(583)
(64,613)
52,144
(8,323)
(2,267)
Total investment (loss)/income Operating expenses
5
Net (deficit)/income Finance costs Distributions to Redeemable Participating Shareholders
11
Interest expenses (Loss)/profit before tax Non-reclaimable withholding tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(20)
-
(72,956)
49,877
(727)
(739)
90
228
(73,593)
49,366
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
289,324
41,348
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(73,593)
49,366
Proceeds from issue of Redeemable Participating Shares
139,604
204,300
Payments on redemption of Redeemable Participating Shares
(60,937)
(5,690)
Net assets attributable to Redeemable Participating Shareholders at the end of the year
294,398
289,324
Share transactions
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 €’000s
2007 €’000s
Current assets Financial assets at fair value through profit or loss
6
293,808
289,076
Debtors
7
2,992
54
Cash and bank balances
258
304
297,058
289,434
8
(3,031)
(109)
11
-
(282)
(3,031)
(391)
294,027
289,043
371
281
Total current assets Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders) Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: €000's 41,295) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 1,500,000) Net Asset Value per Redeemable Participating Share (2006: €27.57)
9
294,398
289,324
10,200,000
7,700,000
€28.86
€37.57
The accompanying notes form an integral part of the financial statements.
www.iShares.eu
iShares plc Annual Report 135
iShares FTSE EPRA European Property Index Fund SCHEDULE OF INVESTMENTS (UNAUDITED) As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE EUR
% OF FUND
HOLDING
FAIR VALUE EUR
% OF FUND
2.32
EUROPEAN UNION (cont)
EUROPEAN UNION
Industrial & Office REITS (cont)
Real Estate Holding & Development 446,022
INVESTMENT
76,600
Silic Com EUR5.00
6,842,678
Tour Eiffel Com EUR48.00
2,413,390
0.82
Aedes SPA Com EUR0.26
1,074,913
0.37
29,902
4,510,554
Beni Stabili SPA Com EUR0.10
3,358,107
1.14
478,925
Unibail-Rodamco Com EUR5.00
77,490,065
26.32
1,012,878
Castellum AB Com NPV
8,246,163
2.80
124,102
Citycon Oyj Com NPV
3,834,111
1.30
Vastned Offices/Industrial Com EUR5.00
2,609,865
0.89
98,626
Vastned Retail Com EUR5.00
6,668,104
2.26
1,717,554
0.58
672,709
0.23
970,661 202,460
Deutsche Euroshop AG Com NPV (Regd)
5,089,844
1.73
37,957
Warehouses De Pauw Com NPV
113,396
Deutsche Wohnen AG Com NPV (Br)
2,453,889
0.83
12,574
Wereldhave Belgium Com NPV
125,896
Dic Asset AG Com NPV
2,536,804
0.86
122,395
Wereldhave NV Com EUR10.00
Fabege AB Com NPV
7,659,128
2.60
265,037
Gagfah SA Com EUR1.25
2,899,505
0.98
476,795
Hufvudstaden AB Series 'A' Com NPV
3,270,843
1.11
11,767,454
4.00
1,051,046
IVG Immobilien AG Com NPV
734,005
Klovern AB Com NPV
2,014,128
0.68
804,130
Kungsleden Com NPV
6,310,569
2.14
734,152
0.25
Sparkassen Immobilienanlagen AG Com NPV
1,244,184
0.42
489,422
Sponda Oyj Com NPV
4,174,770
1.42
259,785
Technopolis Oyj Com NPV
1,363,871
0.46
113,716
Vivacon AG Com NPV
1,730,758
0.59
226,208
Wihlborgs Fastigheter AB Com NPV
3,188,136
1.08
613,356
0.21
13,236
Renta Corporation Real Estate Com EUR1.00
465,900
23,753
Acanthe Development Com NPV
843,232
0.29
Alstria Office REIT AG Com NPV (Br)
1,933,450
0.66
76,917
Befimmo Sicafi Com NPV
5,941,838
2.02
46,980
Cofinimmo SA Com NPV
6,360,622
2.16
396,093
Corio NV Com EUR10.00
24,256,735
8.24
165,111
Affine Com NPV
Norgani Hotels ASA Com NOK 25
3,005,919
1.02
NORWAY - TOTAL
3,005,919
1.02
2,897,121
0.98
Real Estate Holding & Development 33,518
Allreal Holding AG Com CHF50.00
276,240
PSP Swiss Property AG Com CHF10.50 (Regd) (Subsidised)
11,171,526
3.79
113,316
Swiss Prime Site Com CHF25.60 (Regd)
4,518,312
1.53
200,603
Zueblin Immobilien Holding AG Com CHF7.75 (Regd)
1,227,657
0.42
Industrial & Office Reits 73,312
Gecina Com EUR7.50 SWITZERLAND - TOTAL TOTAL VALUE OF INVESTMENTS AT BID PRICES
0.09
OTHER NET LIABILITIES
122,458
Fonciere Des Regions Com EUR3.00
11,846,587
4.03
105,029
Icade REIT Com NPV (Post Merger)
9,820,212
3.34
TOTAL VALUE OF FUND AT BID MARKET PRICES
Intervest Offices Com NPV
1,132,542
0.38
624,844
0.22
Mercialys Com EUR1.00
4,851,237
1.65
210,703
Nieuwe Steen Investments NV Com EUR0.46
3,763,156
1.28
ProLogis European Properties International A1 Com EUR10.00
3,210,603
1.09
333,396
136 iShares plc Annual Report
99.79 (0.01)
2.58
171,786
293,807,650 (39,499)
7,598,332
Leasinvest Real Estate Com NPV
2.39 9.11
258,104
Eurocommercial Properties NV CVA Com EUR0.50 (Rep 10 Shares)
9,680
7,026,955 26,841,571
CASH*
207,775
40,886
89.66
SWITZERLAND
Industrial & Office REITS 255,565
3.33
263,960,160
NORWAY
511,851
58,968
EUROPEAN UNION - TOTAL
9,797,720
294,026,255
99.87
Adjustment from bid market prices to last traded market prices
371,444
0.13
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
294,397,699
100.00
* All cash holdings are held with The Governor & Company of the Bank of Ireland
www.iShares.eu
iShares FTSE EPRA European Property Index Fund Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited) LARGEST SALES
PROCEEDS EUR
LARGEST PURCHASES
COST EUR
Unibail-Rodamco Com EUR5.00
33,099,172
Unibail-Rodamco Com EUR5.00
43,501,854
Klepierre Com EUR1.40
19,430,437
IVG Immobilien AG Com NPV
14,881,569
Corio NV Com EUR10.00
8,164,104
Corio NV Com EUR10.00
12,011,096
Beni Stabili SPA Com EUR0.10
5,210,958
Fonciere Des Regions Com EUR3.00
9,420,479
Fabege AB Com NPV
4,747,613
Rodamco Europe NV Com EUR8.00
8,969,150
Rodamco Europe NV Com EUR8.00
4,734,753
Icade REIT Com NPV (Post Merger)
7,224,792
Risanamento SPA Com EUR1.03
4,240,994
Klepierre Com EUR1.40
6,009,648
Wereldhave NV Com EUR10.00
3,923,401
Wereldhave NV Com EUR10.00
5,826,678
Fonciere Des Regions Com EUR3.00
3,785,854
PSP Swiss Property AG Com CHF10.50 (Regd)
PSP Swiss Property AG Com CHF10.50 (Regd)
(Subsidised)
5,629,355
(Subsidised)
3,752,218
Fabege AB Com NPV
5,068,418
Castellum AB Com NPV
3,203,963
Mercialys Com EUR1.00
4,939,017
Silic Com EUR5.00
3,134,191
Castellum AB Com NPV
4,560,583
Gecina Com EUR7.50
3,111,270
Silic Com EUR5.00
4,414,260
Gecina Com EUR7.50
4,380,249
Eurocommercial Properties NV CVA Com EUR0.50 (Rep 10 Shares)
2,827,938
Gagfah SA Com EUR1.25
4,138,757
Kungsleden Com NPV
2,755,012
Norwegian Property AS Com NOK25.00
4,077,421
Vastned Retail Com EUR5.00
2,166,126
Eurocommercial Properties NV CVA Com EUR0.50 (Rep
Cofinimmo SA Com NPV
2,099,714
10 Shares)
Befimmo Sicafi Com NPV
1,950,220
ProLogis European Properties International A1 Com
Deutsche Euroshop AG Com NPV (Regd)
1,851,628
EUR10.00
3,976,206
Sponda Oyj Com NPV
1,739,760
Kungsleden Com NPV
3,952,759
Icade REIT Com NPV (Post Merger)
3,624,782
www.iShares.eu
4,015,261
iShares plc Annual Report 137
iShares FTSE EPRA European Property Index Fund NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008 1.
SIGNIFICANT ACCOUNTING POLICES
9.
2.
FINANCIAL RISK MANAGEMENT
See pages 24 to 48. 3.
SHARE CAPITAL
Redeemable Participating Shares – issued and fully paid.
See pages 21 to 24.
OPERATING INCOME
Dividends Securities lending income Interest income Operating income
2008 €’000s 9,712 644 68 10,424
2007 €’000s 3,471 57 44 3,572
Balance at the beginning of the year Issued during the year Redeemed during the year Balance at the end of the year
2008 No. of Shares ’000s 7,700 4,300 (1,800) 10,200
2007 No. of Shares ’000s 1,500 6,400 (200) 7,700
The issued and fully paid participating share capital is at all times equal to the Net Asset Value of the Fund. Redeemable participating shares are redeemable at the shareholders option and are classified as financial liabilities.
4.
NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Net fair value gains on sale of investments Net change in fair value (depreciation)/appreciation on investments Fair value currency gains Net (losses)/gains on financial assets at fair value through profit or loss
5.
2007 €’000s
1,758
8,727
(75,693) 9
40,416 12
(73,926)
49,155
11. FINANCE COSTS – DISTRIBUTIONS TO REDEEMABLE
2008 €’000s 1,111 1,111
2007 €’000s 583 583
Pay Date June September December February March*
2008 €’000s 243,760 324,185 289,076 293,808
2007 €’000s 36,381 243,760 41,281 289,076
2008 €’000s 58 5 2,929 2,992
2007 €’000s 20 34 54
2008 €’000s 4,990 2,328 490 674 8,482 (346) 187 8,323
2007 €’000s 1,436 633 416 282 2,767 (617) 117 2,267
* Outstanding at end of year
DEBTORS
Securities lending income receivable Interest income receivable Subscriptions awaiting settlement Debtors
8.
being paid in March, June, September and December of each year.
Equalisation income Equalisation expense
LOSS
7.
PARTICIPATING SHAREHOLDERS Dividends will normally be declared quarterly with a view to their
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR
Cost at the beginning of the year Cost at the end of the year Fair value at the beginning of the year Fair value at the end the year
The Fund does not hold any open futures as at 29 February 2008 (2007: nil).
OPERATING EXPENSES
Management fees Operating expenses
6.
10. FUTURES 2008 €’000s
CREDITORS (amounts falling due within one year)
Accrued expenses Purchases of securities payable awaiting settlement Creditors (amounts falling due within one year)
138 iShares plc Annual Report
2008 €’000s 108
2007 €’000s 109
2,923
-
3,031
109
www.iShares.eu
iShares FTSE UK Dividend Plus PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Operating income
3
12,757
5,155
Net (losses)/gains on financial assets at fair value through profit or loss
4
(61,423)
14,075
(48,666)
19,230
(1,061)
(509)
(49,727)
18,721
(11,652)
(4,556)
(61,379)
14,165
164
132
(61,215)
14,297
Total investment income Operating expenses
5
Net (deficit)/income Finance costs Distributions to Redeemable Participating Shareholders
11
(Loss)/profit before tax Adjustment from bid market prices to last traded market prices
1
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
There are no recognised gains or losses arising in the year other than the increase in net assets attributable to Redeemable Participating Shareholders dealt with in the Profit and Loss Account. Gains and losses arose solely from continuing operations.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS FOR THE YEAR ENDED 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Net assets attributable to Redeemable Participating Shareholders at the beginning of the year
230,423
53,501
(Decrease)/increase in net assets attributable to Redeemable Participating Shareholders from operations
(61,215)
14,297
80,337
167,013
Share transactions Proceeds from issue of Redeemable Participating Shares Payments on redemption of Redeemable Participating Shares Net assets attributable to Redeemable Participating Shareholders at the end of the year
(8,410)
(4,388)
241,135
230,423
BALANCE SHEET AS AT 29 FEBRUARY 2008
Notes
2008 £’000s
2007 £’000s
Current assets Financial assets at fair value through profit or loss
6
240,548
229,996
Debtors
7
497
425
Cash and bank balances Total current assets
-
1,314
241,045
231,735
(98)
(85)
Current liabilities Creditors (amounts falling due within one year) Distributions to Redeemable Participating Shareholders payable
8 11
-
(1,420)
Bank overdraft
(169)
-
Total current liabilities (excluding net assets attributable to Redeemable Participating Shareholders)
(267)
(1,505)
240,778
230,230
357
193
241,135
230,423
24,200,000
18,400,000
£9.96
£12.52
Net assets attributable to Redeemable Participating Shareholders at the end of the year (at bid market prices) (2006: £000's 53,440) Adjustment from bid market prices to last traded market prices Net assets attributable to Redeemable Participating Shareholders at the end of the year (at last traded market prices) Number of Redeemable Participating Shares in issue (2006: 4,800,000) Net Asset Value per Redeemable Participating Share (2006: £11.15)
9
The accompanying notes form an integral part of the financial statements.
www.iShares.eu
iShares plc Annual Report 139
iShares FTSE UK Dividend Plus SCHEDULE OF INVESTMENTS As at 29 February 2008 Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market
HOLDING
INVESTMENT
FAIR VALUE GBP
% OF FUND
HOLDING
3,699,967
1.53
395,272
Banks 617,686
Alliance & Leicester Ord GBP 0.50
3,471,395
1.44
910,103
Barclays Ord GBP 0.25 **
4,343,467
1.80
Bradford & Bingley Ord GBP 0.25
3,383,521
1.40
HSBC Holdings Ord USD 0.50 (UK Regd)
5,804,694
2.41
1,568,933
Lloyds TSB Group Ord GBP 0.25
7,107,266
2.95
1,008,084
Royal Bank of Scotland Group Ord GBP 0.25
3,878,603
1.61
1,503,787 757,793
Scottish & Newcastle Ord GBP 0.20 Rentokil Initial Ord GBP 0.01
9,218,076
3.82
3,967,476
1.65
Cattles Ord GBP 0.10
3,662,053
1.52
International Personal Finance Ord GBP 0.10
1,933,386
0.80
Provident Financial Ord GBP 20.727272
3,899,955
1.62
Consumer Finance 1,564,980 958,308 485,069
3,300,198
Smith (DS) Ord GBP 0.10
5,067,247
Tomkins Ord GBP 0.05
681,980
385,811
Drax Group Ord GBP 0.1155172 Scottish & Southern Energy Ord GBP 0.50 Halma Ord GBP 0.10
4,663,331
1.93
BT Group Ord GBP 0.05
5,510,986
2.29
3,770,501
6,060,359 5,698,428
2.51 2.36
4,654,076
1.93
5,258,573
2.18
2,527,182
Brit Insurance Holdings Ord GBP 0.75
5,875,703
2.44
1,370,801
Catlin Group Com USD 0.01
5,205,617
2.16
EMAP Ord GBP 0.30
7,862,159
3.26
Trinity Mirror Ord GBP 0.10
3,440,762
1.43
3,077,905
1.28
1,089,771
0.45
4,870,064
2.02
Publishing 850,883 1,207,285
Real Estate Holding & Development 170,050
Mapeley Ord NPV
1,204,167
Rank Group Ord GBP 0.1388888
1,491,597
Compass Group Ord GBP 0.10
4,288,100
DSG International Ord GBP 0.025
2,722,944
1.13
1,459,571
Halfords Group Ord GBP 0.01
4,064,905
1.69
5,484,140
HMV Group Ord GBP 0.01
6,964,858
2.89
1,642,912
Kesa Electricals Ord GBP 0.25
3,532,261
1.46
Water 1,967,248
Northumbrian Water Group Ord GBP 0.10
6,875,532
2.86
908,463
Pennon Group Ord GBP 0.4071
5,836,875
2.42 2.71
Severn Trent Ord GBP 0.9789
6,541,488
Northern Foods Ord GBP 0.25
3,412,303
1.42
1,268,843
United Utilities Ord GBP 1.00
8,786,739
3.64
UNITED KINGDOM - TOTAL
240,547,686
99.75
TOTAL VALUE OF INVESTMENTS AT BID PRICES
Royal & Sun Alliance Ord GBP 0.275
4,297,455
1.79
Centrica Ord GBP 0.061728395
3,990,746
1.65
240,547,686
99.75
BANK OVERDRAFT*
(169,092)
(0.07)
Carpetright Ord GBP 0.01
1.58
OTHER NET ASSETS
399,092
0.17
3,313,136
1.37
TOTAL VALUE OF FUND AT BID MARKET PRICES
Kingfisher Ord GBP 0.157142857
240,777,686
99.85
4,505,177
1.87
Adjustment from bid market prices to last traded market prices
357,289
0.15
TOTAL VALUE OF FUND AT LAST TRADED MARKET PRICES
241,134,975
100.00
3,821,141
FKI Ord GBP 0.10 Industrial Suppliers
3,839,838
Electrocomponents Ord GBP 0.10
6,748,515
2.80
4,045,665
Premier Farnell Ord GBP 0.05
6,058,383
2.51 * All cash holdings are held with The Governor & Company of the Bank of Ireland. ** Related party
Insurance Brokers 1,726,007
2.07
460,344
Industrial Machinery 6,150,412
5,002,323
1.82
Home Improvement Retailers 526,328
National Grid Ord GBP 0.11395
4,391,460
Gas Distribution 1,236,482
3.41
Dairy Crest Group Ord GBP 0.25 Full Line Insurance
3,258,116
8,234,276
Specialty Retailers
Food Products 830,929
Vodafone Group Ord USD 0.11428571
Restaurants & Bars
Fixed Line Telecommunications 2,319,106
1.70
Recreational Services
Electronic Equipment 2,248,346
4,108,747
2,521,761
Electricity 1,043,091
Legal & General Group Ord GBP 0.025
Multiutilities
Diversified Industrials 3,246,531
2.92
Mobile Telecommunications
Containers & Packaging 2,965,552
7,035,842
Property & Casualty Insurance
Business Support Services 4,774,339
Royal Dutch Shell Class 'B' Ord EUR 0.07 Life Insurance
Brewers 1,168,324
% OF FUND
Integrated Oil & Gas
Auto Parts GKN (New) Ord GBP 0.50
FAIR VALUE GBP
UNITED KINGDOM (cont)
UNITED KINGDOM 1,396,214
INVESTMENT
Jardine Lloyd Thompson Group Ord GBP 0.05
140 iShares plc Annual Report
6,265,405
2.60
www.iShares.eu
iShares FTSE UK Dividend Plus Schedule of material Portfolio Changes for the year ended 29 February 2008 (unaudited)
LARGEST SALES
PROCEEDS GBP
LARGEST PURCHASES
COST GBP
Premier Foods Ord GBP1.00
16,989,774
Vodafone Group Ord USD0.11428571
7,745,221
Alliance Boots Group Ord GBP0.37179482
15,009,748
Catlin Group Com USD0.01
7,160,112
JJB Sports Ord GBP0.05
5,664,959
Royal Dutch Shell Class 'B' Ord EUR0.07
7,038,173
Woolworths Group Ord GBP0.125
5,380,317
HMV Group Ord GBP0.01
6,981,780
Topps Tiles Ord GBP0.03334
4,473,709
EMAP Ord GBP0.30
6,894,500
GCAP Media Ord GBP0.025
3,466,452
Drax Group Ord GBP0.1155172
6,889,815
BBA Aviation Com GBP0.2976
3,439,040
BP Ord USD0.25
6,635,282
Northern Foods Ord GBP0.25
3,187,348
Royal Bank of Scotland Group Ord GBP0.25
6,625,775
Compass Group Ord GBP0.10
2,546,715
Trinity Mirror Ord GBP0.10
6,553,493
RHM Com GBP0.001
2,238,436
Electrocomponents Ord GBP0.10
5,186,668
Dairy Crest Group Ord GBP0.25
2,171,489
Tomkins Ord GBP0.05
5,172,069
Pennon Group Ord GBP0.4071
2,060,270
Premier Farnell Ord GBP0.05
4,269,185
National Grid Ord GBP0.11395
1,813,152
FKI Ord GBP0.10
3,861,975
Provident Financial Ord GBP20.727272
1,752,053
Severn Trent Ord GBP0.9789
3,391,748
Rank Group Ord GBP0.1388888
1,450,128
Bradford & Bingley Ord GBP0.25
3,358,115
BT Group Ord GBP0.05
1,389,770
Rentokil Initial Ord GBP0.01
3,342,652
Cattles Ord GBP0.10
1,373,215
United Utilities Ord GBP1.00
3,285,397
Biffa Ord GBP0.10
1,292,047
HSBC Holdings Ord USD0.50 (UK Regd)
3,186,784
Scottish & Southern Energy Ord GBP0.50
1,245,900
DSG International Ord GBP0.025
3,117,506
Kesa Electricals Ord GBP0.25
1,211,655
Lloyds TSB Group Ord GBP0.25
2,989,550
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iShares plc Annual Report 141
