legal&general usindextrust annualmanager’sreport

Legal & General US Index Trust

Annual Manager’s Reportfor the year ended5 December 2010

Distribution Number 11

1

Page Number

Manager’s Investment Report* 2

Authorised Status* 5

Directors’ Statement 5

Statement of the Manager’s Responsibilities 6

Statement of the Trustee’s Responsibilities 6

Report of the Trustee 7

Portfolio Statement* 8

Independent Auditors’ Report 23

Statement of Total Return 25

Statement of Change in Net Assetsattributable to Unitholders 25

Balance Sheet 26

Notes to the Financial Statements 27

Distribution Tables 39

Trust Facts 40

Performance Record 41

General Information* 43

* These collectively comprise the Manager’s Report.

Contents

2

Investment Objective and PolicyThe investment objective of this Trust is to track the capitalperformance of the US equity market, as represented by theFTSEWorld USA Index, by investment in a representative sampleof stocks selected from all economic sectors (including a stockor stocks reasonably expected to be shortly part of that Index).

Securities in the FTSEWorld USA Index will be held withweightings generally proportionate to their company’s marketcapitalisation.

From time to time non-index constituents may be held as aresult of corporate action and these holdings will be sold ortransferred as soon as reasonably practical.

Manager’s Investment ReportDuring the year under review, the bid price of the Trust’s R-Classdistribution units rose by 15.8%. This compares to a rise in theFTSEWorld USA Index of 16.3%, on a price return basis inSterling adjusted terms (Source: Bloomberg).

The tracking difference is primarily due to the Trust beingvalued using prevailing prices at 3pm UK time,whereas theIndex is valued using close of business US prices.

Past performance is not a guide to future performance.

The value of investments and income from them may go downas well as up.

Exchange rate changes may cause the value of any overseasinvestments to rise or fall.

The FTSE World USA Index is calculated by FTSE InternationalLimited (“FTSE”). FTSE does not sponsor, endorse or promotethis product.

All copyright in the index values and constituent list belongs toFTSE. Legal & General has obtained full licence from FTSE to usesuch copyright in the creation of this product.

“FTSETM”, “FT-SE®” and “Footsie®” are trade marks of the LondonStock Exchange Plc and The Financial Times Limited and areused by FTSE International Limited (“FTSE”) under licence.

Market/Economic ReviewThe global economy emerged from severe downward pressureduring 2009, after financial markets were left reeling from asystemic failure of the banking system and one of the sharpestrecessions on record. Throughout the course of 2009, policymakers undertook extraordinary measures to rebuild confidencein the financial system and stimulate economic activity.

A batch of economic releases at the end of the first quarter of2010 suggested the US economy was starting to recover. This,together with the pledge from the US Federal Reserve thatinterest rates would be set to remain at ‘exceptionally lowlevels’ for an extended period, invigorated the market.

Manager’s Investment Report

Fears over European fiscal deficits led to a sharp swing in themarket and a downward trend in May 2010. This drop waspartly mitigated for UK based investors, as Sterling continued toweaken against the US Dollar.

The second half of 2010 saw the equity market continue to riseon the back of improved earnings growth expectations and thisstrength saw the Index finish the year under review up at levelsnot seen since September 2008.

Trust ReviewThe quarterly review of the FTSE All-World USA Index inDecember 2009 saw 16 additions and 24 deletions,with twosignificant additions beingWestern Digital and Priceline.com.This resulted in two-way Index turnover of approximately 3%.

During the year the US Treasury gradually sold its stake inCitigroup resulting in an increase to 100% free float by the yearend. This meant several Index weight increases throughout theyear as the Index provider reflected these share sales. Othernotable events included the successful Initial Public Offering(IPO) of General Motors as it returned to public ownershipfollowing its bail-out by the US Government at the height of thefinancial crisis of 2008/2009.

There was one significant takeover during the review year,Merck’s acquisition of Schering-Plough in cash and stock worthapprox US$41 billion.

The quarterly review of the Index in March 2010 saw noadditions or deletions but a number of shares in issue changes.The largest weight increase wasWalt Disney and IBM saw areduction. The June 2010 Index review saw no additions ordeletions either but there were share in issue increases forBerkshire Hathaway B-Class shares and Citigroup. InSeptember 2010 there was again limited turnover, the mostsignificant event being the deletion of Transocean following itsreclassification from a US to a Swiss company.

There were several weight increases for banking stocks duringthe review year. The largest of these saw Bank of Americashareholders approve the conversion into common stock ofover US$19 billion worth of ‘common equivalent securities’.Other notable stocks that had Index share increases wereGoldman Sachs and JPMorgan Chase & Co.

Cadbury (UK) was acquired by Kraft Foods for stock and cashtotalling £11.5 billion. Berkshire Hathaway’s US$36 billionacquisition of Burlington Northern Santa Fe was completedwith a mixture of cash and stock.

The three largest Index constituents at the end of the year wereExxon Mobil (3.05%), Apple (2.44%) and Microsoft (1.96%).

Manager’s Investment Report continued

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4

OutlookMarket consensus appears to confirm the view that the USeconomy will continue to recover during 2011 supported byimproving company earnings. What’s more, the valuation gapthat now exists between equities and bonds suggests assetallocators may respond to this by moving out of bonds and intostocks. With the additional support of a continued loosemonetary policy,we believe that 2011 should produce positivereturns for US equities.

Legal & General Investment Management Limited(Investment Adviser)24 December 2010

Manager’s Investment Report continued

5

Authorised StatusThis Trust is an Authorised Unit Trust Scheme as defined insection 243 of the Financial Services and Markets Act 2000 andis a UCITS Retail Scheme within the meaning of the FSACollective Investment Schemes sourcebook.

Directors’ StatementWe hereby certify that this Manager’s Report has been preparedin accordance with the requirements of the FSA CollectiveInvestment Schemes sourcebook.

M. B. Boardman S. D.Thomas(Director) (Director)

Legal & General (Unit Trust Managers) Limited26 January 2011

Authorised Status

6

Statement of the Manager’s ResponsibilitiesThe Manager of the Trust is required by the FSA CollectiveInvestment Schemes sourcebook (COLL) to prepare financialstatements for each accounting period which give a true andfair view, in accordance with United Kingdom GenerallyAccepted Accounting Practice, of the net revenue and the netgains or losses on the Scheme property for the accountingperiod, and the financial position of the Trust at the end of thatperiod. In preparing these financial statements, the Manager isrequired to:

• select suitable accounting policies and then apply themconsistently;

• make judgements and estimates that are prudent andreasonable;

• state whether applicable Accounting Standards have beenfollowed, subject to any material departure disclosed andexplained in the financial statements; and

• prepare the financial statements on the basis that the Trustwill continue in operation unless it is inappropriate topresume this.

The Manager is also required to manage the Trust in accordancewith the Trust Deed, the Prospectus and the COLL,maintainproper accounting records to enable them to ensure that thefinancial statements comply with the Statement ofRecommended Practice for Authorised Funds issued by the IMAin October 2010 and the COLL and take in these respectsreasonable steps for the prevention and detection of fraud andother irregularities.

Statement of the Trustee’s ResponsibilitiesThe Trustee is responsible for the safekeeping of all theproperty of the Scheme (other than tangible moveableproperty) which is entrusted to it and for the collection ofrevenue that arises from that property.

It is the duty of the Trustee to take reasonable care to ensurethat the Scheme is managed in accordance with the FinancialServices Authority’s Collective Investment Schemes sourcebook(COLL), as amended, the Scheme’s Trust Deed and Prospectus, inrelation to the pricing of, and dealings in, units in the Scheme;the application of the revenue of the Scheme; and theinvestment and borrowing of the Scheme.

Statement of Responsibilities

7

Report of the Trustee

Report of the Trustee to the Unitholders ofLegal & General US Index Trust (“the Trust”)Having carried out such procedures as we considered necessaryto discharge our responsibilities as Trustee of the Scheme, it isour opinion, based on the information available to us and theexplanations provided, that, in all material respects, the Manager:

• has carried out the issue, sale, redemption and cancellation,and calculation of the price of the Scheme’s units and theapplication of the Scheme’s revenue in accordance with theCOLL, the Trust deed and Prospectus, and

• has observed the investment and borrowing powers andrestrictions applicable to the Scheme.

London The Royal Bank of Scotland Plc26 January 2011 Trustee and Depositary Services

8

Portfolio Statement as at 5 December 2010

All investments are in ordinary shares or common stocks unlessotherwise stated. The percentages in brackets show theequivalent sector holdings at 5 December 2009.

Holding/ Market % ofNominal Value NetValue Investment £ Assets

UNITED STATES— 96.82% (97.42%)

Oil & Gas Producers— 8.58% (8.89%)

91,448 Anadarko Petroleum 4,078,417 0.2967,902 Apache 4,960,137 0.35

122,535 Chesapeake Energy 1,700,486 0.12375,711 Chevron 20,283,123 1.44277,304 ConocoPhillips 11,270,781 0.80

5,900 Continental Resources 211,316 0.0180,675 Devon Energy 3,769,292 0.2747,098 EOG Resources 2,807,557 0.2028,443 EQT 766,945 0.05

949,814 Exxon Mobil 43,050,562 3.0560,134 Hess 2,847,161 0.20

130,954 Marathon Oil 2,939,784 0.2135,076 Murphy Oil 1,584,460 0.1153,650 Nabors Industries 793,117 0.0624,550 Newfield Exploration 1,088,623 0.0831,700 Noble Energy 1,716,814 0.12

152,307 Occidental Petroleum 8,826,618 0.6350,800 Petrohawk Energy 619,125 0.0422,160 Pioneer Natural Resources 1,191,807 0.0825,187 Plains Exploration & Production 482,055 0.0342,576 QEP Resources 1,001,676 0.0728,800 Range Resources 809,816 0.0664,300 Southwestern Energy Company 1,546,809 0.1120,769 Sunoco 529,424 0.0429,034 Ultra Petroleum 896,388 0.06

105,514 Valero Energy 1,391,600 0.10

121,163,893 8.58

Oil Equipment, Services &Distribution — 2.20% (1.83%)

79,206 Baker Hughes 2,744,932 0.1945,896 Cameron International 1,493,962 0.1113,540 Diamond Offshore Drilling 573,896 0.04

138,906 El Paso 1,231,373 0.0922,260 FMC Technologies 1,247,298 0.09

166,982 Halliburton 4,377,953 0.3177,501 National Oilwell Varco 3,092,132 0.2222,375 Patterson-UTI Energy 306,800 0.0230,808 Pride 636,201 0.0523,849 Rowan 487,323 0.03

253,532 Schlumberger 13,160,057 0.93108,121 Williams Companies 1,639,743 0.12

30,991,670 2.20

Chemicals — 1.91% (1.93%)39,701 Air Products & Chemicals 2,218,749 0.1612,261 Ashland 409,899 0.0319,132 Avery Dennison 484,401 0.03

Portfolio Statement

9

Chemicals — (cont.)215,414 Dow Chemical 4,554,193 0.32167,034 Du Pont de Nemours 5,219,812 0.3716,598 Eastman Chemical 858,587 0.0643,312 Ecolab 1,322,287 0.0915,812 International Flavors

& Fragrances 548,479 0.0499,219 Monsanto 3,921,302 0.2832,546 Mosaic 1,413,302 0.1030,650 PPG Industries 1,571,790 0.1158,523 Praxair 3,483,387 0.2522,116 Sigma Aldrich 919,478 0.07

26,925,666 1.91

Forestry & Paper— 0.18% (0.19%)

78,281 International Paper 1,292,535 0.09105,845 Weyerhaeuser 1,181,306 0.09

2,473,841 0.18

Industrial Metals & Mining— 0.34% (0.35%)

192,652 Alcoa 1,739,766 0.1219,396 Allegheny Technologies 670,201 0.0557,895 Nucor 1,476,175 0.1126,000 U.S. Steel 843,673 0.06

4,729,815 0.34

Mining — 0.99% (0.84%)41,874 CONSOL Energy 1,205,213 0.0887,195 Freeport-McMoRan

Copper & Gold 6,029,134 0.4389,648 Newmont Mining 3,517,884 0.2548,698 Peabody Energy 1,986,742 0.1446,606 Southern Copper 1,303,363 0.09

14,042,336 0.99

Construction & Materials— 0.42% (0.38%)

37,740 Fluor 1,467,239 0.1028,681 Fortune Brands 1,116,876 0.0822,094 Jacobs Engineering Group 572,077 0.0464,110 Masco 485,323 0.0434,347 MDU Resources Group 452,995 0.0323,553 Sherwin-Williams 1,149,110 0.0827,451 Vulcan Materials 734,944 0.05

5,978,564 0.42

Aerospace & Defence— 2.20% (2.29%)

6,161 Alliant Techsystems 302,706 0.02137,003 Boeing 5,791,173 0.4172,658 General Dynamics 3,137,083 0.2223,922 Goodrich 1,315,252 0.0922,280 L-3 Communications Holdings 1,044,091 0.0767,390 Lockheed Martin 2,970,661 0.2153,942 Northrop Grumman 2,189,674 0.16

Portfolio Statement continued


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Aerospace & Defence— (cont.)

25,871 Precision Castparts 2,326,245 0.1769,631 Raytheon 2,119,127 0.1528,370 Rockwell Collins 1,050,124 0.08

174,334 United Technologies 8,736,713 0.62

30,982,849 2.20

General Industrials— 2.97% (2.97%)

131,822 3M 7,263,661 0.5217,303 Ball 762,413 0.0520,517 Bemis 425,126 0.0334,866 Dover 1,282,348 0.0931,007 Eaton 1,962,261 0.14

1,988,620 General Electric 21,027,627 1.49143,014 Honeywell International 4,654,340 0.3337,681 ITT Industries 1,164,795 0.0831,566 MeadWestvaco 533,280 0.0427,180 Owens-Illinois 492,637 0.0425,999 Rockwell Automation 1,126,181 0.0831,103 Sealed Air 477,058 0.0350,776 Textron 761,316 0.05

41,933,043 2.97

Electronic & ElectricalEquipment — 1.05% (0.87%)

64,781 Agilent Technologies 1,525,328 0.1134,267 Amphenol (A) 1,156,730 0.0828,746 Arrow Electronics 610,852 0.0428,723 Avnet 596,991 0.04

120,580 Danaher 3,406,693 0.24140,810 Emerson Electric 5,101,668 0.3611,718 First Solar 976,525 0.0739,072 Jabil Circuit 396,451 0.0328,943 MEMC Electronic Materials 221,872 0.029,789 Molex 137,720 0.01

16,634 Molex (A) 194,452 0.0210,136 SPX 443,773 0.03

14,769,055 1.05

Industrial Engineering— 1.55% (1.17%)

21,325 Babcock & Wilcox 338,507 0.02116,249 Caterpillar 6,590,162 0.4737,358 Cummins 2,463,770 0.1878,913 Deere & Co 3,943,637 0.2893,262 Illinois Tool Works 2,873,397 0.2042,650 McDermott International 521,973 0.0469,723 Paccar 2,499,000 0.1822,448 Pall 675,587 0.0530,016 Parker-Hannifin 1,606,277 0.1117,662 Terex 297,370 0.02

21,809,680 1.55

Industrial Transportation— 1.75% (1.85%)

30,026 C.H. Robinson Worldwide 1,449,406 0.10



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Industrial Transportation— (cont.)

72,764 CSX 2,971,815 0.2138,741 Expeditors International

of Washington 1,368,783 0.1058,741 Fedex 3,552,182 0.2516,586 Hunt (JB) Transport Services 407,140 0.0372,939 Norfolk Southern 2,919,886 0.2114,083 Ryder Systems 406,683 0.0392,060 Union Pacific 5,514,793 0.39

134,111 United Parcel Service (B) 6,125,657 0.43

24,716,345 1.75

Support Services— 1.19% (1.36%)

8,851 Alliance Data Systems 380,796 0.0391,018 Automatic Data Processing 2,704,419 0.1916,565 CoreLogic 198,083 0.0135,965 Donnelley (RR) & Sons 378,688 0.0327,586 Fiserv 1,015,826 0.0738,232 Iron Mountain 570,310 0.0415,825 Manpower 593,538 0.0467,050 Paychex 1,261,036 0.0974,478 Republic Services 1,370,338 0.1030,883 Robert Half International 580,238 0.0493,400 Visa 4,585,416 0.3388,487 Waste Management 1,953,712 0.1414,176 WW Grainger 1,181,996 0.08

16,774,396 1.19

Automobiles & Parts— 1.03% (0.62%)

13,243 Autoliv 664,768 0.05621,392 Ford Motor Company 6,618,142 0.4782,532 General Motors 1,813,809 0.1329,011 Gentex 433,870 0.0330,306 Genuine Parts 956,147 0.0747,644 Harley-Davidson 1,003,319 0.07

122,994 Johnson Controls 3,049,749 0.21

14,539,804 1.03

Beverages — 2.44% (2.55%)17,329 Brown-Forman (B) 767,759 0.05

431,617 Coca-Cola 17,859,254 1.2773,379 Coca-Cola Enterprises 1,189,133 0.0935,000 Constellation Brands 479,241 0.0341,655 Dr Pepper Snapple Group 1,001,261 0.0729,105 Molson Coors 909,717 0.06

294,266 PepsiCo 12,286,732 0.87

34,493,097 2.44

Food Producers— 1.67% (1.61%)

122,439 Archer-Daniels-Midland 2,342,583 0.1725,149 Bunge 1,007,243 0.0749,907 Campbell Soup 1,083,440 0.0882,453 ConAgra Foods 1,150,556 0.0837,433 Dean Foods 174,035 0.01


Food Producers — (cont.)120,096 General Mills 2,734,329 0.1957,954 Heinz (HJ) 1,792,582 0.1332,349 Hershey Foods 971,089 0.0718,799 Hormel Foods 597,540 0.0422,980 JM Smucker 956,279 0.0752,909 Kellogg 1,660,492 0.12

322,951 Kraft Foods 6,250,997 0.4421,557 McCormick & Company 630,212 0.04

123,591 Sara Lee 1,186,253 0.0822,869 Smithfield Foods 262,235 0.0262,883 Tyson Foods (A) 673,746 0.056,801 Weight Watchers International 153,456 0.01

23,627,067 1.67

Household Goods & HomeConstruction — 2.00% (2.24%)

25,370 Clorox 1,008,652 0.0755,661 D.R. Horton 381,249 0.0313,145 Energizer Holdings 606,950 0.0430,622 Leggett & Platt 419,881 0.0319,383 Lennar 207,057 0.0216,113 Mohawk Industries 575,362 0.0449,115 Newell Rubbermaid 548,158 0.041,194 NVR 493,515 0.03

19,563 Pentair 422,201 0.03528,809 Procter & Gamble 21,007,342 1.4978,836 Pulte Homes 330,327 0.0230,767 Stanley Black & Decker 1,215,964 0.0920,904 Toll Brothers 244,635 0.0213,825 Whirlpool 697,157 0.05

28,158,450 2.00

Leisure Goods — 0.23% (0.27%)63,670 Electronic Arts 614,773 0.0432,233 GameStop 432,514 0.0312,655 Harman International 374,404 0.0325,041 Hasbro 779,816 0.0565,576 Mattel 1,074,392 0.08

3,275,899 0.23

Personal Goods— 1.21% (1.29%)

20,667 Alberto-Culver 491,105 0.0479,651 Avon Products 1,478,725 0.1023,523 Cintas 425,904 0.0355,567 Coach 2,002,255 0.1490,675 Colgate-Palmolive 4,492,114 0.3221,012 Estee Lauder 1,040,282 0.0775,113 Kimberly-Clark 2,973,862 0.2154,844 Nike (B) 3,058,392 0.2220,288 VF 1,093,585 0.08

17,056,224 1.21

Tobacco — 1.54% (1.51%)393,239 Altria Group 5,966,298 0.4228,075 Lorillard 1,460,330 0.10

341,948 Philip Morris International 12,602,790 0.90

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Tobacco — (cont.)80,174 Reynolds American 1,635,693 0.12

21,665,111 1.54

Health Care Equipment &Services — 4.13% (4.67%)

286,654 Abbott Laboratories 8,647,152 0.6175,837 Aetna 1,472,244 0.1016,718 Bard (C.R.) 921,089 0.07

107,092 Baxter International 3,403,996 0.2413,762 Beckman Coulter 512,652 0.0442,724 Becton Dickinson & Company 2,218,215 0.16

361,041 Boston Scientific 1,551,924 0.1138,537 Carefusion 560,605 0.0413,920 Cerner 814,782 0.0649,713 Cigna 1,201,292 0.0914,577 Community Health Systems 297,490 0.0227,255 Coventry Health Care 458,885 0.0319,367 DaVita 913,139 0.0627,526 Dentsply International 566,495 0.04

109,140 Express Scripts 3,737,071 0.2618,200 Henry Schein 689,348 0.0531,396 Humana 1,144,112 0.087,177 Intuitive Surgical 1,234,417 0.09

12,104 Kinetic Concepts 311,246 0.0218,588 LabCorp 989,029 0.0719,282 Lincare Holdings 318,989 0.0281,220 Medco Health Solutions 3,264,858 0.23

201,239 Medtronic 4,362,317 0.3120,325 Patterson 393,797 0.0333,390 Quest Diagnostics 1,072,398 0.0861,640 St Jude Medical 1,583,456 0.1155,268 Stryker 1,818,063 0.1375,295 Thermo Electron 2,513,355 0.18

208,416 United Health Group 4,993,743 0.3516,352 Universal Health Services (B) 435,080 0.0323,313 Varian Medical Systems 1,022,174 0.0716,572 Waters 834,624 0.0677,998 WellPoint 2,840,858 0.2038,046 Zimmer Holdings 1,216,598 0.09

58,315,493 4.13

Pharmaceuticals &Biotechnology — 6.10% (7.07%)

59,010 Allergan 2,572,279 0.18176,977 Amgen 6,092,614 0.4349,996 Biogen Idec 2,128,337 0.15

317,869 Bristol-Myers Squibb 5,242,406 0.3784,550 Celgene 3,256,901 0.2313,975 Cephalon 586,629 0.04

213,319 Eli Lilly 4,644,586 0.3352,217 Forest Laboratories 1,069,316 0.0847,946 Genzyme 2,169,495 0.15

160,846 Gilead Sciences 3,831,376 0.2730,559 Hospira 1,102,307 0.08

520,305 Johnson & Johnson 20,785,654 1.4754,428 King Pharmaceuticals 492,560 0.0433,663 Life Technologies 1,128,827 0.08


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Pharmaceuticals &Biotechnology — (cont.)

571,022 Merck & Co 12,807,936 0.9169,373 Mylan Laboratories 867,605 0.06

1,497,780 Pfizer 15,894,808 1.1340,100 Vertex Pharmaceuticals 856,473 0.0619,218 Watson Pharmaceuticals 605,342 0.04

86,135,451 6.10

Food & Drug Retailers— 1.44% (1.58%)

54,360 AmerisourceBergen 1,101,761 0.0863,374 Cardinal Health 1,498,666 0.11

256,393 CVS Caremark 5,270,119 0.37117,332 Kroger 1,591,615 0.1149,635 McKesson 2,095,559 0.1520,981 Omnicare 308,961 0.0273,283 Safeway 1,015,586 0.0741,515 Supervalu 226,108 0.02

109,092 Sysco 2,025,994 0.14180,259 Walgreen 4,263,907 0.3031,844 Whole Foods Market 984,971 0.07

20,383,247 1.44

General Retailers— 5.28% (5.26%)

16,405 Abercrombie & Fitch 580,766 0.0463,917 Amazon.com 7,115,250 0.5033,826 American Eagle Outfitters 337,181 0.0227,125 Apollo Group 631,417 0.0519,992 AutoNation 340,170 0.026,780 Autozone 1,136,082 0.08

52,156 Bed Bath & Beyond 1,509,464 0.1177,892 Best Buy 2,124,643 0.1559,169 Block (H & R) 499,616 0.0481,619 Costco Wholesale 3,577,598 0.2523,341 Dollar Tree 828,546 0.06

242,851 eBay 4,558,103 0.3223,933 Family Dollar Stores 766,222 0.0533,926 Fastenal 1,226,139 0.0923,979 Foot Locker 291,326 0.02

313,817 Home Depot 6,612,572 0.4757,243 Kohls 1,977,950 0.1464,418 Limited Brands 1,307,669 0.09

264,095 Lowes 4,128,169 0.2978,060 Macy’s 1,238,107 0.0939,462 Nordstrom 1,047,958 0.0745,472 Penney (JC) 996,730 0.0724,190 PETsMART 597,808 0.0422,840 Radioshack 277,634 0.0223,702 Ross Stores 982,393 0.0710,105 Sears 430,365 0.03

134,969 Staples 1,940,179 0.14133,337 Target 5,006,940 0.3691,265 The Gap 1,239,178 0.0926,285 Tiffany & Co 1,050,059 0.0874,107 TJX 2,102,692 0.1519,593 Urban Outfitters 473,081 0.03


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General Retailers — (cont.)506,760 Wal-Mart Stores 17,600,861 1.25

74,532,868 5.28

Media — 3.32% (3.03%)46,280 Cablevision Systems (A) 947,146 0.07

115,104 CBS (B) 1,268,493 0.09379,608 Comcast (A) 4,984,776 0.35148,700 Comcast (‘A’ Non-voting) 1,847,370 0.13163,555 DIRECTV 4,257,854 0.3024,916 Discovery Communications (A) 671,683 0.0528,316 Discovery Communications (C) 667,449 0.0534,054 DISH Network 402,654 0.039,401 Dun & Bradstreet 464,894 0.03

41,347 Gannett 372,861 0.03100,265 Interpublic Group 696,356 0.0511,451 Lamar Advertising 282,331 0.0223,323 Liberty Global (A) 528,040 0.0426,668 Liberty Global (C) 575,539 0.04

107,206 Liberty Media Interactive 1,088,469 0.088,748 Liberty Media-Starz 358,344 0.03

56,018 McGraw-Hill 1,261,477 0.09333,952 News Corporation 3,032,829 0.21113,070 News Corporation (B) 1,148,007 0.0854,644 Omnicom Group 1,629,214 0.1121,831 Scripps Networks Interactive 719,671 0.05

628,604 Sirius XM Radio 549,227 0.04361,426 The Walt Disney Company 8,604,613 0.61207,869 Time Warner 4,043,370 0.2965,535 Time Warner Cable Inc 2,709,170 0.19

102,230 Viacom (B) 2,603,996 0.1863,264 Virgin Media 1,064,352 0.07

451 Washington Post (B) 109,198 0.01

46,889,383 3.32

Travel & Leisure— 2.17% (1.66%)

87,687 Carnival 2,407,478 0.1725,445 Darden Restaurants 807,002 0.06

161,780 Delta Air Lines 1,400,099 0.1047,101 Expedia 813,453 0.0656,071 International Game Technology 558,922 0.0467,568 Las Vegas Sands 2,145,112 0.1511,445 Madison Square Garden 172,624 0.0170,043 Marriott International (A) 1,806,019 0.13

197,476 McDonald’s 10,002,260 0.7157,133 MGM Mirage 473,315 0.03

141,995 Southwest Airlines 1,195,366 0.08136,879 Starbucks 2,845,826 0.2033,961 Starwood Hotels & Resorts 1,260,759 0.0981,920 Wendy’s/Arby’s Group 249,731 0.0232,424 Wyndham Worldwide 628,008 0.0417,133 Wynn Resorts 1,142,164 0.0885,723 Yum! Brands 2,769,050 0.20

30,677,188 2.17


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Fixed Line Telecommunications— 2.54% (2.68%)

1,105,198 AT&T 19,911,890 1.4156,920 CenturyTel 1,568,204 0.11

200,709 Frontier CommunicationsCorporation 1,201,950 0.09

31,849 Leucadia National 554,717 0.04342,247 Level 3 Communications 214,341 0.01317,730 Qwest Communications 1,426,543 0.10529,353 Verizon Communications 10,958,417 0.78

35,836,062 2.54

Mobile Telecommunications— 0.20% (0.18%)

56,665 MetroPCS Communications 447,755 0.0331,328 NII 829,153 0.06

540,473 Sprint (FON) 1,337,395 0.108,338 Telephone and Data Systems 192,657 0.01

2,806,960 0.20

Electricity — 2.61% (2.84%)150,055 AES 1,077,563 0.0830,912 Allegheny Energy 458,949 0.0319,315 Alliant Energy 453,927 0.0345,217 Ameren 842,916 0.0687,625 American Electric Power 2,005,092 0.1454,527 Consolidated Edison 1,698,405 0.1237,202 Constellation Energy 684,014 0.05

109,272 Dominion Resources 2,931,807 0.2134,226 DTE Energy 992,510 0.0759,883 Edison International 1,444,754 0.1034,808 Entergy 1,611,424 0.11

122,413 Exelon 3,097,798 0.2256,029 FirstEnergy 1,272,802 0.0926,562 Mirant 169,062 0.0177,559 NextEra Energy 2,512,259 0.1833,300 Northeast Utilities 672,584 0.0549,002 NRG Energy 598,149 0.0421,969 NSTAR 587,755 0.0441,161 Pepco 489,837 0.0475,957 PG&E 2,316,495 0.1617,604 Pinnacle West 460,196 0.0387,917 PPL 1,437,622 0.1053,332 Progress Energy 1,488,738 0.112,300 Progress Energy (CVO) 220 —

93,561 Public Service 1,872,413 0.1361,435 RRI Energy 137,915 0.01

155,716 Southern Company 3,773,730 0.2737,289 Teco Energy 401,427 0.0388,507 Xcel Energy 1,334,943 0.10

36,825,306 2.61

Gas, Water & Multiutilities— 0.66% (0.69%)

75,979 Centerpoint Energy 765,120 0.05243,520 Duke Energy 2,742,706 0.2048,072 Nisource 521,189 0.0436,227 Questar 402,702 0.03


17


Gas, Water & Multiutilities— (cont.)

20,513 SCANA 537,158 0.0446,078 Sempra Energy 1,494,302 0.11

119,922 Spectra Energy 1,889,842 0.1323,483 Wisconsin Energy 893,642 0.06

9,246,661 0.66

Banks — 6.49% (6.69%)1,848,868 Bank of America 13,689,641 0.97

224,756 Bank of New York Mellon 3,947,564 0.28126,090 BB&T 1,953,269 0.14

4,803,814 Citigroup 13,418,817 0.958,908 City National 315,643 0.02

30,744 Comerica 762,326 0.0515,156 Commerce Bancshares 360,818 0.03

148,850 Fifth Third Bancorp 1,235,987 0.0943,980 First Horizon National 280,485 0.0297,542 Hudson City Bancorp 732,187 0.05

104,007 Huntington Bancshares 404,619 0.03743,295 JPMorgan Chase & Co 18,449,644 1.31199,796 Keycorp 1,024,464 0.0725,208 M&T Bank 1,273,422 0.09

100,823 Marshall & Ilsley 350,437 0.0299,675 New York Community Bank 1,088,288 0.0844,298 Northern Trust 1,479,237 0.1063,915 People’s United Financial 520,940 0.0497,978 PNC Financial Services 3,509,212 0.25

184,734 Popular 345,198 0.02242,657 Regions Financial 917,702 0.0792,101 SunTrust Banks 1,475,496 0.10

356,728 US Bancorp 5,619,376 0.4028,195 Valley National Bancorp 235,198 0.02

972,916 Wells Fargo & Co 17,832,657 1.2628,716 Zions Bancorporation 380,194 0.03

91,602,821 6.49

Nonlife Insurance— 2.89% (2.64%)

97,688 Allstate 1,865,916 0.1324,502 American International Group 667,867 0.0559,732 AON 1,611,393 0.1125,172 Axis Capital Holdings 587,561 0.04

137 Berkshire Hathaway (A) 10,598,278 0.75187,700 Berkshire Hathaway (B) 9,675,887 0.6924,471 Brown & Brown 369,406 0.0360,255 Chubb 2,245,728 0.1630,557 Cincinnati Financial 598,473 0.043,609 CNA Financial 62,099 —3,481 Erie Indemnity 139,196 0.01

16,565 First American Financial 157,938 0.0115,484 Gallagher (Arthur J)

& Company 283,709 0.0281,224 Hartford Financial Services 1,222,504 0.0977,466 Loews 1,886,752 0.131,772 Markel 404,633 0.03

101,398 Marsh & McLennan 1,702,685 0.126,015 Mercury General 169,786 0.01

50,164 Old Republic International 410,462 0.03


18


Nonlife Insurance — (cont.)120,403 Progressive 1,589,504 0.1191,077 The Travelers Companies 3,191,761 0.2312,238 Transatlantic Holdings 399,686 0.0330,106 W.R. Berkley 513,031 0.04

100 Wesco Financial 23,186 —1,876 White Mountains

Insurance Group 379,328 0.03

40,756,769 2.89

Life Insurance — 0.95% (0.94%)86,557 AFLAC 2,984,781 0.2119,991 Assurant 463,312 0.0389,759 Genworth Financial 706,967 0.0557,166 Lincoln National 909,625 0.07

147,396 Metlife 3,760,102 0.2715,110 Protective Life 239,756 0.0284,564 Prudential Financial 2,878,843 0.2014,930 Torchmark 571,491 0.0462,990 UnumProvident 903,473 0.06

13,418,350 0.95

Real Estate Investment &Services — 0.09% (0.10%)

114,300 Annaly Capital Management 1,328,154 0.09

Real Estate Investment Trusts— 1.45% (1.27%)

28,537 AMB Property 549,628 0.0415,627 Avalonbay Communities 1,128,074 0.0825,477 Boston Properties 1,390,349 0.1041,385 Duke Realty 301,942 0.0250,810 Equity Residential 1,668,823 0.1223,560 Forest City Enterprises (A) 235,600 0.0256,706 HCP 1,206,087 0.0922,336 Hospitality Properties 321,792 0.02

127,595 Host Hotels & Resorts 1,358,952 0.1079,307 Kimco Realty 863,880 0.0619,671 Liberty Property Trust 390,409 0.0327,966 Macerich 850,395 0.0626,747 Plum Creek Timber 637,971 0.0488,327 ProLogis 766,665 0.0523,330 Public Storage 1,460,357 0.1012,653 Regency Centers 334,723 0.0254,801 Simon Property Group 3,546,687 0.2516,321 St Joe Company (The) 190,897 0.0137,700 Ventas 1,210,824 0.0933,348 Vornado Realty Trust 1,746,942 0.1223,651 Weingarten Realty 361,100 0.03

20,522,097 1.45

Financial Services— 3.85% (3.97%)

225,174 American Express 6,407,694 0.4547,159 Ameriprise Financial 1,605,150 0.1115,990 Blackrock 1,733,712 0.1225,781 Broadridge Financial Solutions 359,750 0.0383,871 Capital One Financial 2,062,007 0.15

220,681 Charles Schwab 2,249,032 0.16


19



Financial Services — (cont.)12,502 CME Group 2,479,351 0.18

101,744 Discover Financial Services 1,216,645 0.0922,285 Equifax 506,955 0.0415,227 Federated Investors 237,728 0.0248,822 Fidelity National

Information Services 878,360 0.0631,586 Franklin Resources 2,384,864 0.1795,857 Goldman Sachs 9,849,184 0.7021,380 IAC/InterActiveCorp 412,192 0.0313,466 IntercontinentalExchange 1,018,023 0.0787,726 INVESCO 1,277,286 0.0926,087 Janus Capital Group 188,332 0.0129,403 Legg Mason 652,754 0.0516,789 Lender Processing Services 331,818 0.0221,915 MasterCard 3,443,786 0.2443,088 Moodys 741,674 0.05

272,721 Morgan Stanley 4,414,323 0.3116,067 NYSE Euronext (€) 294,071 0.0235,904 NYSE Euronext ($) 658,545 0.0560,457 Principal Financial Group 1,132,412 0.0828,482 SEI Investments 428,320 0.0391,896 SLM 710,319 0.0592,302 State Street Boston 2,654,860 0.1948,606 T Rowe Price Group 1,871,703 0.1355,924 TD Ameritrade 641,628 0.05

122,779 Western Union 1,432,161 0.10

54,274,639 3.85

Software & Computer Services— 8.03% (8.23%)

116,200 Activision Blizzard 904,848 0.0697,310 Adobe Systems 1,802,842 0.1330,391 Akamai Technologies 1,025,890 0.0738,812 Amdocs 666,834 0.0519,160 AOL 301,330 0.0239,238 Autodesk 944,415 0.0735,839 BMC Software 1,049,571 0.0770,423 CA Inc. 1,079,250 0.0837,026 Checkpoint Software

Technologies 1,052,218 0.0834,420 Citrix Systems 1,550,437 0.1154,952 Cognizant Technology Solutions 2,437,093 0.1729,921 Computer Sciences 892,287 0.0646,188 Compuware 320,488 0.029,919 DST Systems 279,225 0.02

44,609 Google 16,242,171 1.15233,751 IBM 21,662,218 1.5458,550 Intuit 1,746,045 0.1230,722 Mcafee 919,505 0.07

1,606,615 Microsoft 27,593,203 1.9666,528 NetApp 2,295,386 0.1697,508 Nvidia 901,700 0.06

933,524 Oracle 16,985,612 1.208,840 Priceline.com 2,274,158 0.16

17,420 Salesforce.com 1,597,907 0.11142,820 Symantec 1,568,470 0.1126,361 Synopsys 437,949 0.0332,800 Teradata 869,577 0.06

20

Software & Computer Services— (cont.)

35,230 Total System Services 346,908 0.0336,060 VeriSign 805,371 0.067,099 WebMD Health 231,442 0.02

250,477 Yahoo! 2,595,823 0.18

113,380,173 8.03

Technology Hardware &Equipment — 9.17% (8.90%)

121,558 Advanced Micro Devices 586,858 0.0456,144 Altera 1,340,223 0.0977,111 American Tower 2,565,613 0.1853,843 Analog Devices 1,284,265 0.09

170,281 Apple 34,492,762 2.44248,453 Applied Materials 2,051,956 0.1488,182 Broadcom 2,615,091 0.19

1,064,397 Cisco Systems 12,972,338 0.92289,314 Corning 3,459,590 0.2554,435 Crown Castle International 1,475,786 0.10

361,962 Dell 3,134,849 0.2212,147 Diebold 243,870 0.02

376,895 EMC 5,309,701 0.3822,928 Harris 662,251 0.05

427,407 Hewlett-Packard 11,720,983 0.831,034,072 Intel 14,324,008 1.01

96,192 Juniper Networks 2,124,444 0.1530,907 KLA-Tencor 781,545 0.0523,112 Lam Research 721,218 0.0542,857 Linear Technology 928,751 0.07

109,278 LSI Logic 414,671 0.03116,553 Marvell Technology Group 1,502,999 0.1142,492 Microchip Technology 959,322 0.07

207,901 Micron Technology 1,046,135 0.07433,095 Motorola 2,173,761 0.1542,623 National Semiconductor 394,154 0.0326,500 NCR 245,902 0.0217,820 Novellus Systems 361,401 0.0336,213 Pitney Bowes 523,333 0.04

298,466 Qualcomm 9,268,055 0.6644,907 Sandisk 1,392,174 0.10

220,428 Texas Instruments 4,615,211 0.3340,020 Western Digital 891,262 0.06

257,197 Xerox 1,945,380 0.1450,017 Xilinx 920,594 0.06

129,450,456 9.17

Futures — 0.02% (0.01%)61 S & P 500 Future

Expiry December 2010 316,948 0.02

LUXEMBOURG — 0.08% (0.08%)

Mobile Telecommunications— 0.08% (0.08%)

20,003 Millicom International Cellular 1,136,905 0.08

SWITZERLAND — 0.83% (1.08%)

Oil & Gas Producers— 0.00% (0.25%)



21



Oil Equipment, Services &Distribution — 0.25% (0.25%)

22,959 Foster Wheeler 447,173 0.0352,064 Noble 1,122,630 0.08

141,682 Weatherford 1,939,905 0.14

3,509,708 0.25


81,899 Tyco Electronics 1,722,595 0.1291,931 Tyco International 2,395,600 0.17

4,118,195 0.29

Health Care Equipment &Services — 0.12% (0.13%)

16,536 Alcon 1,695,362 0.12


61,387 ACE 2,327,851 0.17

LIBERIA — 0.05% (0.04%)

Travel & Leisure— 0.05% (0.04%)

27,528 Royal Caribbean Cruises 743,502 0.05

SINGAPORE — 0.05% (0.06%)


142,051 Flextronics International 675,829 0.05

BERMUDA — 0.19% (0.18%)


14,473 Everest Group 775,708 0.0514,141 PartnerRe 702,451 0.0510,312 Renaissancere Holdings 400,445 0.0366,681 XL Group 867,533 0.06

2,746,137 0.19

CAYMAN ISLANDS— 0.04% (0.00%)

Leisure Goods — 0.04% (0.00%)28,152 Garmin 551,011 0.04

IRELAND — 0.72% (0.64%)


30,156 Cooper Industries 1,061,037 0.08

Industrial Engineering— 0.11% (0.11%)

58,578 Ingersoll-Rand 1,586,612 0.11

Support Services— 0.24% (0.24%)

118,731 Accenture 3,346,882 0.24

22

Health Care Equipment& Services — 0.18% (0.21%)

92,984 Covidien 2,547,572 0.18


31,151 Willis Group Holdings 649,443 0.05

Technology Hardware &Equipment — 0.06% (0.00%)

91,477 Seagate Technology 865,764 0.06

Portfolio of investments 1,394,367,641 98.80

Net other assets 16,979,550 1.20

Net assets £1,411,347,191 100.00%

Total purchases for the year: £142,139,853.

Total sales for the year: £77,622,258.



23

Independent Auditors’ Report

Independent Auditors’ Report to the Unitholders ofLegal & General US Index Trust (“the Trust”)We have audited the financial statements of Legal & GeneralUS Index Trust for the year ended 5 December 2010 whichcomprise the statement of total return, the statement of changein net assets attributable to unitholders, the balance sheet, therelated notes and the distribution tables. These financialstatements have been prepared under the accounting policies setout therein.

Respective responsibilities of the Manager and AuditorsThe Manager’s responsibilities for preparing the annual reportand financial statements in accordance with applicable law andUnited KingdomAccounting Standards (United KingdomGenerally Accepted Accounting Practice) are set out in theStatement of the Manager’s Responsibilities.

Our responsibility is to audit the financial statements inaccordance with relevant legal and regulatory requirements andInternational Standards on Auditing (UK and Ireland) and therequirements of the FSA Collective Investment Schemessourcebook.

This report, including the opinion has been prepared for andonly for the unitholders of the Trust as a body in accordancewith paragraph 4.5.12 of the FSA Collective InvestmentSchemes sourcebook and for no other purpose. We do not, ingiving this opinion, accept or assume responsibility for anyother purpose or to any other person to whom this report isshown or into whose hands it may come save where expresslyagreed by our prior consent in writing.

We report to you our opinion as to whether the financialstatements give a true and fair view and are properly preparedin accordance with the Statement of Recommended Practice forAuthorised Funds issued by the IMA in October 2010, theFSA Collective Investment Schemes sourcebook and theTrust Deed. We also report to you whether, in our opinion,proper accounting records for the Trust have not been kept orwhether the financial statements are not in agreement withthose records, and whether the information given in theManager’s Report is consistent with the financial statements. Inaddition,we state whether we have obtained all the informationand explanations necessary for the purposes of our audit.

We read the other information contained in the annual reportand consider whether it is consistent with the audited financialstatements. This other information comprises only theManager’s Report and the other items set out on the contentspage. We consider the implications for our report if we becomeaware of any apparent misstatements or material inconsistencieswith the financial statements.

Our responsibilities do not extend to any other information.

24

Independent Auditors’ Report continued

Basis of audit opinionWe conducted our audit in accordance with InternationalStandards on Auditing (UK and Ireland) issued by the AuditingPractices Board. An audit includes examination, on a test basis,of evidence relevant to the amounts and disclosures in thefinancial statements. It also includes an assessment of thesignificant estimates and judgements made by the Manager inthe preparation of the financial statements, and of whether theaccounting policies are appropriate to the Trust’s circumstances,consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all theinformation and explanations which we considered necessary inorder to provide us with sufficient evidence to give reasonableassurance that the financial statements are free from materialmisstatement,whether caused by fraud or other irregularity orerror. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financialstatements.

OpinionIn our opinion the financial statements:

• give a true and fair view, in accordance with United KingdomGenerally Accepted Accounting Practice, of the financialposition of the Trust at 5 December 2010 and of the netrevenue and the net gains of the property of the Trust for theyear then ended; and

• have been properly prepared in accordance with theStatement of Recommended Practice for Authorised Fundsissued by the IMA in October 2010, the Collective InvestmentSchemes sourcebook and the Trust Deed.

We have obtained all the information and explanations weconsider necessary for the purposes of the audit.

In our opinion the information given in the Manager’s Report isconsistent with the financial statements.

London PricewaterhouseCoopers LLP26 January 2011 Chartered Accountants

& Statutory Auditors

The accounts are published at:http://www.legalandgeneral.com/investments/fund-information/managers-reports, which is a website maintained by the Manager.The maintenance and integrity of the Legal & General website is theresponsibility of the Manager; the work carried out by the auditorsdoes not involve consideration of these matters, and accordingly,the auditors accept no responsibility for any changes that may haveoccurred to the accounts since they were initially presented on thewebsite. Visitors to the website need to be aware that legislation inthe United Kingdom governing the preparation and dissemination ofthe accounts may differ from legislation in their jurisdiction.

Statement of Total Returnfor the year ended 5 December 2010

05/12/10 05/12/09

Notes £ £ £ £

Income

Net capital gains 2 188,954,507 135,053,263

Revenue 3 25,147,115 24,080,962

Expenses 4 (7,797,636) (5,940,921)

Finance costs:Interest 6 (9) (1,296)

Net revenuebefore taxation 17,349,470 18,138,745

Taxation 5 (3,747,784) (3,808,645)

Net revenue aftertaxation for the year 13,601,686 14,330,100

Total returnbefore distributions 202,556,193 149,383,363

Finance costs:Distributions 6 (13,601,686) (14,653,410)

Change in net assetsattributable to Unitholdersfrom investment activities £188,954,507 £134,729,953

Statement of Change in Net Assets attributable toUnitholders for the year ended 5 December 2010

05/12/10 05/12/09

£ £ £ £

Opening net assetsattributable to Unitholders 1,146,345,967 1,031,529,872

Amounts receivedon creation of units 190,288,713 169,243,706

In-specie creations — 58,662,288

Amounts paid oncancellation of units (121,259,534) (250,597,760)

In-specie cancellations — (4,828,757)

69,029,179 (27,520,523)

Change in net assetsattributable to Unitholdersfrom investment activities 188,954,507 134,729,953

Retained distributionon accumulation units 7,017,081 7,606,487

Unclaimed distributions 457 178

Closing net assetsattributable to Unitholders £1,411,347,191 £1,146,345,967

25

Financial Statements

26

Balance Sheet as at 5 December 2010

05/12/10 05/12/09

Notes £ £ £ £

ASSETS

Investment assets 1,394,367,641 1,140,606,678

Debtors 7 4,606,868 3,113,700

Cash andbank balances 8 17,228,585 8,656,255

Amounts held atbroker houses 8 618,312 189,689

Total other assets 22,453,765 11,959,644

Total assets 1,416,821,406 1,152,566,322

LIABILITIES

Investment liabilities — —

Creditors 9 (2,132,605) (3,292,187)

Distribution payableon distribution units (3,341,610) (2,928,168)

Total other liabilities (5,474,215) (6,220,355)

Total liabilities (5,474,215) (6,220,355)

Net assets attributableto Unitholders £1,411,347,191 £1,146,345,967

Financial Statements continued

27

Notes to the Financial Statements

1. Accounting policies

(a) Changes to accounting policiesThe financial statements have been prepared under thehistorical cost convention, as modified by the revaluation ofinvestments, and in accordance with the Statement ofRecommended Practice for Authorised Funds issued by theIMA in October 2010 (‘the IMA SORP 2010’).

Previously the financial statements were prepared inaccordance with the Statement of Recommended Practicefor Authorised Funds issued by the IMA in November 2008.

There has been no impact on the financial statements or ondisclosure for the year.

(b) Recognition of revenueRevenue from quoted equities and non-equity shares isrecognised net of attributable tax credits when the securityis quoted ex-dividend. Revenue from unquoted equityinvestments is recognised net of attributable tax creditswhen the dividend is declared. All other revenue isrecognised on an accruals basis.

Overseas revenue received after the deduction ofWithholding tax is shown gross of taxation,with thetaxation consequences shown within the taxation charge.

Special dividends are treated as either revenue or capitaldepending on the facts of each particular case.

Revenue from derivative instruments will be treated inaccordance with Note 1(h).

(c) Treatment of expensesAll expenses (other than those relating to the purchase andsale of investments and Stamp Duty Reserve Tax) arecharged against revenue on an accruals basis.

(d) Distribution policyThe policy is to distribute all available revenue, afterdeduction of those expenses which are chargeable incalculating the distribution. In order to conduct acontrolled dividend flow, interim distributions will be at theManager’s discretion, up to a maximum of the distributablerevenue for the year. All remaining revenue is distributed inaccordance with the COLL.

Distributions which have remained unclaimed byUnitholders for over six years are credited to the capitalproperty of the Trust.

28

Notes to the Financial Statements continued

(e) Basis of valuation of investmentsAll investments are valued at their fair value as at 3pm on3 December 2010, being the last working day of theaccounting year. The fair value for non-derivative securitiesis bid market price and the fair value for derivativeinstruments is the cost of closing out the contract at thebalance sheet date.

Where values cannot be readily determined, the securitiesare valued at the Manager’s best assessment of theirfair value.

(f) TaxationProvision is made for taxation at current rates on the excessof investment revenue over expenses,with relief foroverseas taxation taken where appropriate.

Deferred tax is provided for on all timing differences thathave originated but not reversed by the balance sheet date,other than those differences that are regarded aspermanent. Any liability to Deferred tax is provided for atthe average rate of tax expected to apply. Deferred taxassets and liabilities are not discounted to reflect the timevalue of money.

(g) Exchange ratesTransactions in foreign currencies are translated at the rateof exchange ruling on the date of the transaction. Whereapplicable, assets and liabilities denominated in foreigncurrencies are translated into Sterling at the rates ofexchange ruling at 3pm on 3 December 2010, being the lastworking day of the accounting year.

(h) Derivative instrumentsFinancial derivative instruments may be used by the Trustfor efficient portfolio management, for example to hedgeinvestment exposure or to adjust exposure in a costeffective manner. Derivative instruments held within theTrust have been accounted for and taxed in accordancewith the Statement of Recommended Practice forAuthorised Funds (SORP 2010). Derivative transactionshave been treated as either revenue or capital depending onthe motives and circumstances on acquisition.

29

2. Net capital gains

05/12/10 05/12/09

£ £

The net capital gainsduring the year comprise:

Non-derivative securities 187,912,969 134,306,468

Derivative contracts 1,330,399 1,059,458

Currency losses (275,928) (279,628)

Transaction charges (12,933) (33,035)

Net capital gains 188,954,507 135,053,263

3. Revenue

05/12/10 05/12/09

£ £

Overseas dividends 25,147,115 24,064,500

Term deposit interest — 910

Bank interest — 15,535

Margin interest — 17

25,147,115 24,080,962


30

4. Expenses

05/12/10 05/12/09

£ £

Payable to the Manager,associates of the Managerand agents of either of them:

Manager’s periodic fee 6,350,403 5,534,717

Registration fees 1,249,522 243,523

7,599,925 5,778,240

Payable to the Trustee,associates of the Trusteeand agents of either of them:

Trustee’s fees 127,560 102,978

Safe custody fees 63,304 53,219

190,864 156,197

Other expenses:

Audit fee 6,700 6,323

FSA fee 147 161

6,847 6,484

Total expenses 7,797,636 5,940,921


31

5. Taxation

(a) Analysis of taxation charge in year

05/12/10 05/12/09

£ £

Corporation tax — 2,097,857

Double taxation relief — (2,097,857)

Overseas tax 3,747,784 3,540,573

Current tax [note 5(b)] 3,747,784 3,540,573

Deferred tax [note 5(c)] — 268,072

Total taxation 3,747,784 3,808,645

(b) Factors affecting taxation charge for the yearThe Current tax charge excludes capital gains and losses forthe reason that Authorised Unit Trusts are not subject toCorporation tax on these items. Current tax differs fromtaxation assessed on net revenue before taxation as follows:

Net revenue before taxation 17,349,470 18,138,745

Net revenue before taxationmultiplied by the applicablerate of Corporation tax at20% (2009: 20%) 3,469,894 3,627,749

Effects of:

Double taxation relief — (2,097,857)

Overseas tax 3,747,784 3,540,573

Revenue not subject to taxation (5,029,423) (2,175,352)

Capitalised incomesubject to taxation — 55,238

Currency movement notsubject to taxation — 304

Movement in taxablerevenue accruals — 589,918

Movement in taxation losses 1,559,529 —

Current tax 3,747,784 3,540,573


32

5. Taxation continued

(c) Provision for Deferred tax

Provision at start of year — (268,072)

Deferred tax charge for year — 268,072

Provision at end of year — —

At the year end there is a potential Deferred tax asset of£1,559,529 (£nil as at 5 December 2009) due to surplusmanagement expenses. In the prior year there was anadditional potential Deferred tax asset of £1,353,695 due toexcess unutilised foreign tax (EUFT) which has beenwritten off. This is as a result of tax legislation changes in2010 and the abolition of EUFT.

It is unlikely the Trust will generate sufficient taxable profitsin the future to utilise these amounts and therefore noDeferred tax asset has been recognised(5 December 2009: same).


33


6. Finance costsDistributionsThe distributions take account of revenue received on thecreation of units and revenue deducted on the cancellationof units and comprise:

05/12/10 05/12/09

£ £

Interim distribution 6,605,226 8,834,476

Final distribution 7,072,023 6,002,009

13,677,249 14,836,485

Add: Revenue deductedon cancellation of units 423,507 984,968

Less: Revenue receivedon creation of units (499,070) (1,168,043)

Distributions for the year 13,601,686 14,653,410

Interest

Bank overdraft interest 9 1,296

Total finance costs 13,601,695 14,654,706

The differences between the net revenue after taxation andthe distributions for the year are as follows:

05/12/10 05/12/09

£ £

Net revenue after taxationfor the year 13,601,686 14,330,100

Add: Taxation on capital items — 55,238

Add: Movement in Deferred taxasset not distributed — 268,072

Distributions for the year 13,601,686 14,653,410

7. Debtors

05/12/10 05/12/09

£ £

Amounts receivable forcreation of units 740,845 391,082

Receivable for FX contracts 1,295,131 740,000

Accrued revenue 2,555,964 1,964,019

Recoverable overseas tax 9,093 14,128

Recoverable VAT 5,835 4,471

4,606,868 3,113,700

34

8. Cash and bank balances

05/12/10 05/12/09

£ £

Amount held at futuresclearing houses and brokers 618,312 189,689

Cash and bank balances 17,228,585 8,656,255

Net uninvested cash 17,846,897 8,845,944

9. Creditors

05/12/10 05/12/09

£ £

Amounts payable forcancellation of units 20,000 1,023,390

Purchases awaiting settlement — 859,395

Payable for FX contracts 1,300,000 742,180

Accrued expenses 812,605 667,222

2,132,605 3,292,187

10. Contingent liabilities and outstanding commitmentsThere were no contingent liabilities or outstandingcommitments at the balance sheet date(5 December 2009: Same).

11. Risk in relation to financial instrumentsThe Trust’s investment objective is stated on page 2. Inpursuing its objective, the Trust holds financial instrumentswhich expose it to various types of risk. The main risks, andthe Manager’s policy for managing these risks,which wereapplied consistently throughout the current and precedingyear, are set out below.

(a) Credit and liquidity riskCredit risk is the risk of suffering loss due to another partynot meeting its financial obligations. The primary source ofthis risk to the Trust is for trade counterparties to fail tomeet their transaction commitments. This risk is managedby appraising the credit profile of financial instruments andtrade counterparties.

Liquidity risk relates to the capacity to meet liabilities. Theprimary source of this risk to the Trust is the liability toUnitholders for any cancellation of units. This risk isminimised by holding cash and readily realisable securitiesand via access to overdraft facilities.


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(b) Market riskMarket risk arises mainly from uncertainty about futureprices. The primary source of this risk to the Trust is thepotential movement in the value of financial instrumentsheld as a result of price fluctuations. The Manager adheresto the investment guidelines and borrowing powersestablished in the Trust Deed, Prospectus and the COLL. Inthis way, the Manager monitors and controls the exposureto risk from any type of security, sector or issuer.

The Trust may also use derivative instruments to mitigaterisk and reduce costs. These instruments are not utilised forspeculative purposes. Derivative instruments were utilisedduring the current and preceding year.

(c) Foreign currency riskForeign currency risk is the risk of movements in the valueof overseas financial instruments as a result of fluctuationsin exchange rates. This risk is managed by the utilisation offorward currency contracts as necessary. Forwardcurrency contracts were not utilised during the current orpreceding year.

The foreign currency profile of the Trust’s net assets at thebalance sheet date was:

Net foreign currency assets

Monetary Non-monetary05/12/10 exposures exposures TotalCurrency £’000 £’000 £’000

Euro — 294 294US Dollar 15,832 1,393,757 1,409,589

Net foreign currency assets

Monetary Non-monetary05/12/09 exposures exposures TotaCurrency £’000 £’000 £’000

Euro — 243 243US Dollar 4,538 1,140,239 1,144,777

(d) Interest rate riskInterest rate risk is the risk of movements in the value offinancial instruments as a result of fluctuations in interestrates. The Trust’s only interest bearing financial instrumentswere its bank balances and overdraft facilities as disclosedin note 8. Cash is deposited, and overdraft facilities utilised,on normal commercial terms and earn or bear interestbased on LIBOR or its overseas equivalent.

Term depositis are utilised to cover the Trust’s exposures toderivatives and earn interest based on market deposit rates.

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(e) Derivative risk — Sensitivity analysisDerivative risk arises from uncertainty about future marketmovements. This risk is managed by the policies shownwithin Market risk.

During the year the Trust made use of the followingderivatives:

FuturesThe Manager,where he considers it appropriate, usesfutures contracts to gain market exposure with reduceddealing costs. The effect of these instruments was toincrease the exposure of the Trust by £11,850,845,representing 0.84% of the net assets (5 December 2009:0.19%). This results in an effective equity exposure at theyear end of 99.62% of net assets, which means the gain orlosses of the Trust will be 0.9962 times the gains or losses ifthe Trust was fully invested in equities.

(f) Fair valueThe fair value of a financial instrument is the amount forwhich it could be exchanged between knowledgeable,willing parties in an arm’s length transaction. There is nosignificant difference between the value of the financialassets and liabilities, as shown in the financial statements,and their fair value.

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12. Portfolio transaction costs

05/12/10 05/12/09£ £ £ £

Analysis of totalpurchase costs:

Purchases beforetransaction costs 142,093,908 207,299,196

Commissions 45,945 70,685

Taxes — —

Total purchase costs 45,945 70,685

Gross purchases total £142,139,853 £207,369,881

Analysis of totalsale costs:

Sales beforetransaction costs 77,743,491 224,084,091

Commissions (16,982) (60,568)

Futures commissions (1,230) (659)

Fees (103,021) (3,637)

Total sale costs (121,233) (64,864)

Total sales net oftransaction costs £77,622,258 £224,019,227

Included in purchases are investments acquired as part ofin-specie creations of £Nil (5 December 2009: £59,084,832)which are not subject to commission or tax. Included insales are investments sold as part of in-specie cancellationsof £Nil (5 December 2009: £4,580,908) which are notsubject to commission or tax.

13. Unit classesThe Trust currently has two unit classes: R-Class and I-Class.The annual management charge on each unit class can befound on page 43. The net asset value of each unit class, thenet asset value per unit and the number of units in eachclass are given in the comparative table on page 41. Thedistribution per unit class is given in the distribution tableon page 39. All classes have the same rights on winding up.

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14. Ultimate controlling party and related partytransactionsThe Manager and Trustee are regarded as controlling partiesof the Trust by virtue of having the ability to act in concertin respect of Trust operations. The ultimate controllingparties of the Manager and Trustee are Legal & GeneralGroup Plc and The Royal Bank of Scotland Plc, respectively.These entities and their subsidiaries are also related partiesof the Trust.

Legal & General (Unit Trust Managers) Limited acts asprincipal on all the transactions of units in the Trust. Theaggregate monies received through creations or paid oncancellations are disclosed in the Statement of Change inNet Assets attributable to Unitholders.

At the year end, the Manager and its associates held 39.90%(38.64% as at 5 December 2009) of the Trust’s units in issue.There were no units held by the Trustee or its associates.Details of all other material related party transactions duringthe year and any payment amounts outstanding at thebalance sheet date are disclosed in notes 4, 6, 7 and 9 to thefinancial statements and the Statement of Change in NetAssets attributable to Unitholders. Within note 9, accruedexpenses and bank overdraft interest (including amountsdue to associates and agents) of £26,962 (£22,849 as at5 December 2009) are due to the Trustee and £777,649(£636,970 as at 5 December 2009) are due to the Manager.

15. Post balance sheet market movementsAs at the close of business on the balance sheet date theNet Asset Value per unit of the R-Class distribution units was156.55p. The Net Asset Value per unit of the R-Classdistribution units at 3pm on 25 January 2011 was 164.20p.This represents an increase of 4.89% from the year endvalue.

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Distribution Tables

Distribution Tablesfor the year ended 5 December 2010

Group 1: units purchased prior to a distribution period

Group 2: units purchased during a distribution period

Equalisation is the average amount of revenue included in thepurchase price of all Group 2 units and is refunded to holdersof these units as a return of capital. As capital it is not liable toIncome tax but must be deducted from the cost of units forCapital Gains tax purposes.

Interim dividend distribution in pence per unit Period06/12/09 — 05/06/10

Net Equalisation Distribution DistributionRevenue 05/08/10 05/08/09

R-Class distributionGroup 1 0.6372 — 0.6372 0.9141Group 2 0.3491 0.2881 0.6372 0.9141

R-Class accumulationGroup 1 0.6837 — 0.6837 0.9832Group 2 0.3192 0.3645 0.6837 0.9832

I-Class distributionGroup 1 0.9849 — 0.9849 1.0991Group 2 0.5424 0.4425 0.9849 1.0991

I-Class accumulationGroup 1 1.0748 — 1.0748 1.1788Group 2 0.8832 0.1916 1.0748 1.1788

Final dividend distribution in pence per unit Period06/06/10 — 05/12/10

Net Equalisation Distribution DistributionRevenue 05/02/11 05/02/10

R-Class distributionGroup 1 0.6379 — 0.6379 0.5505Group 2 0.4314 0.2065 0.6379 0.5505

R-Class accumulationGroup 1 0.6875 — 0.6875 0.5888Group 2 0.3919 0.2956 0.6875 0.5888

I-Class distributionGroup 1 0.9749 — 0.9749 0.9120Group 2 0.4598 0.5151 0.9749 0.9120

I-Class accumulationGroup 1 1.0711 — 1.0711 0.9882Group 2 0.6002 0.4709 1.0711 0.9882

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Trust Facts

Total Expense Ratios

5 Dec 10 5 Dec 09

R-Class 0.82% R-Class 0.78%I-Class 0.35% I-Class 0.33%

The Total Expense Ratio is the ratio of the Trust’s operatingcosts (excluding overdraft interest), to the average net assets ofthe Trust.

41

Net Asset Values

Net Asset Net Asset Number OfAccounting Value Of Value Per UnitsDate Trust Unit In Issue

5 Dec 08R-ClassDistribution Units £445,300,575 119.67p 372,113,524Accumulation Units £114,775,233 126.85p 90,479,794I-ClassDistribution Units £114,391,648 119.63p 95,620,570Accumulation Units £357,062,416 128.45p 277,972,012



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TThhee pprriiccee ooff uunniittss aanndd iinnccoommee ffrroomm tthheemm mmaayy ggoo ddoowwnn aass wweellllaass uupp..

EExxcchhaannggee rraattee cchhaannggeess mmaayy ccaauussee tthhee vvaalluuee ooff aannyy oovveerrsseeaassiinnvveessttmmeennttss ttoo rriissee oorr ffaallll..

Performance Record

Unit Price Range and Net Revenue

R-Class Units

Highest Lowest NetYear Offer Bid Revenue

Distribution Units

2005 146.30p 117.30p 0.8610p2006 149.10p 131.30p 1.0731p2007 154.30p 136.10p 1.0972p2008 147.20p 102.40p 1.2922p2009 142.60p 98.10p 1.8156p2010(2) 160.90p 135.80p 1.1877p2011(3) — — 0.6379p

Accumulation Units

2005 150.20p 120.10p 0.8795p2006 153.70p 135.90p 1.0833p2007 160.30p 141.90p 1.1451p2008 154.10p 107.70p 1.3514p2009 153.00p 103.90p 1.9449p2010(2) 172.70p 145.70p 1.2725p2011(3) — — 0.6875p

I-Class Units

Highest Lowest NetYear Offer Bid Revenue

Distribution Units

2005(1) 144.10p 140.00p —2006 148.70p 131.00p 0.8695p2007 154.70p 136.60p 1.7669p2008 147.20p 102.50p 1.8700p2009 142.20p 97.63p 2.2014p2010(2) 161.20p 135.90p 1.8969p2011(3) — — 0.9749p

Accumulation Units

2005(1) 148.50p 144.30p —2006 153.20p 135.80p 0.8915p2007 161.40p 143.40p 1.8152p2008 155.50p 109.00p 2.0229p2009 155.20p 104.90p 2.3516p2010(2) 175.90p 148.90p 2.0630p2011(3) — — 1.0711p

(1) From 6 December 2005.(2) The above tables show highest offer and lowest bid prices to5 December 2010.

(3) The above tables show the net revenue per unit to 5 February 2011.

PPaasstt ppeerrffoorrmmaannccee iiss nnoott aa gguuiiddee ttoo ffuuttuurree ppeerrffoorrmmaannccee..

TThhee pprriiccee ooff uunniittss aanndd iinnccoommee ffrroomm tthheemm mmaayy ggoo ddoowwnn aass wweellllaass uupp..

EExxcchhaannggee rraattee cchhaannggeess mmaayy ccaauussee tthhee vvaalluuee ooff aannyy oovveerrsseeaassiinnvveessttmmeennttss ttoo rriissee oorr ffaallll..

42

Performance Record continued

43

General Information

ConstitutionLaunch date: 23 September 1992

Period end dates for distributions: 5 June, 5 December

Distribution dates: 5 August, 5 February

Minimum initial lumpsum investment: R-Class £500

I-Class £100,000

Minimum monthly contributions: R-Class £50I-Class N/A

Valuation point: 3pm

Management charges: R-Class Annual 0.65%I-Class Annual 0.30%

Initial charges: R-Class NilI-Class Nil

Pricing and DealingThe prices are published on the internet atwww.legalandgeneral.com/investments/daily-prices.htmlimmediately after they become available.

Dealing in units takes place on a forward pricing basis, from8:30am to 6:00pm, Monday to Friday.

Buying and Selling UnitsUnits may be bought on any business day from the Manager or through a financial adviser by telephoning, completing an application form or on the internet at www.legalandgeneral.com.Units may normally be sold back to the Manager on any businessday at the bid price calculated at the following valuation point.

ISA StatusThis Trust may be held within this tax advantaged savingsarrangement. The favourable tax treatment of ISAs may not bemaintained. For full written information, please contact yourusual financial adviser or ring 0370 050 0955.

Call charges will vary. We may record and monitor calls.

Stamp Duty Reserve TaxStamp Duty Reserve Tax suffered on the surrender of unitswhere applicable, has been charged against the capital assets ofthe Trust.

44

Prospectus and Manager’s ReportsThe Manager will send to all persons on the Unitholder Registerannual and interim short form reports.

Copies of the Prospectus and the most recent annual or interimreports are available free of charge by telephoning 0370 050 0955or by writing to the Manager or are available on the internet at:http://www.legalandgeneral.com/investments/managers-reports.

Do you have difficulty in reading information in print becauseof a disability? If so, we can help. We are able to produceinformation for our clients in large print and braille. If youwould like to discuss your particular requirements, pleasecontact us on 0370 050 0955.


General Information continued

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ManagerLegal & General (Unit Trust Managers) LimitedRegistered in England No. 01009418Registered office:One Coleman Street,London EC2R 5AATelephone: 0370 050 3350Authorised and regulated by the Financial Services Authority

Directors of the ManagerM. B. BoardmanS. C. EllisM. J. GregoryS. R. PistellS. D. Thomas

SecretaryA. Fairhurst

RegistrarLegal & General (Portfolio Management Services) Limited P.O. Box 6080 Wolverhampton WV1 9RB Authorised and regulated by the Financial Services Authority

Dealing: 0370 050 0956Enquiries: 0370 050 0955Registration: 0370 050 0955


TrusteeThe Royal Bank of Scotland PlcTrustee and Depositary ServicesGogarburnP.O. Box 1000Edinburgh EH12 1HQAuthorised and regulated by the Financial Services Authority

Independent AuditorsPricewaterhouseCoopers LLPHay’s Galleria1 Hay’s LaneLondon SE1 2RD

Investment AdviserLegal & General Investment Management LimitedOne Coleman Street, London EC2R 5AAAuthorised and regulated by the Financial Services Authority

General Information continued

Authorised and regulated by the Financial Services Authority

Legal & General (Unit Trust Managers) LimitedRegistered in England No. 01009418Registered office: One Coleman Street, London EC2R 5AAwww.legalandgeneral.com

legal&general usindextrust annualmanager’sreport

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