iShares plc Annual Report and Audited Financial Statements for the year ended 29 February 2012

General information Background Investment Manager’s report Directors’ report Custodian’s report to the shareholders Independent Auditors’ report Accounting policies Financial instruments and risks

3 4 7 14 25 26 28 32

Financial statements of the Company Income statement Statement of changes in net assets attributable to redeemable participating shareholders Balance sheet Notes to the financial statements

61 61 62 63

Fund primary statements and notes, schedules of investments and schedules of material purchases and sales: iShares AEX 69 iShares Barclays Capital Euro Government Bond 1-3 77 iShares Barclays Capital Euro Inflation Linked Bond 84 iShares Barclays Capital $ Treasury Bond 1-3 91 iShares DJ Asia/Pacific Select Dividend 30 97 iShares EURO STOXX Mid 104 iShares EURO STOXX Select Dividend 30 113 iShares EURO STOXX Small 121 iShares EURO STOXX Total Market Growth Large 131 iShares EURO STOXX Total Market Value Large 139 iShares FTSE 100 147 iShares FTSE 250 156 iShares FTSE China 25 168 iShares FTSE UK Dividend Plus 176 iShares FTSE/EPRA European Property Index Fund 184 iShares FTSEurofirst 80 192 iShares FTSEurofirst 100 201 iShares Markit iBoxx Euro Corporate Bond 210 iShares Markit iBoxx Euro High Yield Bond 220 iShares Markit iBoxx £ Corporate Bond 233 iShares Markit iBoxx £ Corporate Bond 1-5 242 iShares Markit iBoxx $ Corporate Bond 253 iShares MSCI AC Far East ex-Japan 261 iShares MSCI Brazil 279 iShares MSCI Eastern Europe 10/40 286 iShares MSCI Emerging Markets 294 iShares MSCI Europe ex-UK 312 iShares MSCI Japan 326 iShares MSCI Korea 338 iShares MSCI North America 347 iShares MSCI Taiwan 365 iShares MSCI World 373 iShares S&P 500 399 Disclaimers

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414

iShares plc Annual Report 1

This annual report and audited financial statements (the “Report and Accounts”) may be translated into other languages. Any such translation shall only contain the same information and have the same meaning as the English language Report and Accounts. To the extent that there is any inconsistency between the English language Report and Accounts and the Report and Accounts in another language, the English language Report and Accounts will prevail, except to the extent (and only to the extent) that it is required by law of any jurisdiction where the shares are sold, that in an action based upon disclosure in a Report and Accounts in a language other than English, the language of the Report and Accounts on which such action is based shall prevail. Any disputes as to the terms of the Report and Accounts, regardless of the language of the Report and Accounts, shall be governed by and construed in accordance with the laws of Ireland.

2 iShares plc Annual Report

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Board of Directors* William Roberts (Chairman) (British - Irish resident) John Donohoe (Irish) Nicholas C.D. Hall (British) Liam Miley (Irish) (Appointed 25 April 2012) Desmond Murray (Irish) Barry O'Dwyer (Irish) Dominic Pegler (British) (Appointed 3 June 2011) (Resigned 29 May 2012) Geoffrey D. Radcliffe (British - Luxembourg resident) Mark Stockley (British) *All Directors are non-executive Directors Manager BlackRock Asset Management Ireland Limited JPMorgan House International Financial Services Centre Dublin 1 Ireland Administrator State Street Fund Services (Ireland) Limited 78 Sir John Rogerson’s Quay Dublin 2 Ireland Registrar Computershare Investor Services (Ireland) Limited Heron House Corrig Road Sandyford Industrial Estate Dublin 18 Ireland Company Secretary Chartered Corporate Services Taney Hall Eglinton Terrace Dundrum Dublin 14 Ireland

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Investment Manager BlackRock Advisors (UK) Limited Registered office; 12 Throgmorton Avenue London EC2N 2DL England Custodian State Street Custodial Services (Ireland) Limited 78 Sir John Rogerson’s Quay Dublin 2 Ireland Registered Office JPMorgan House International Financial Services Centre Dublin 1 Ireland Legal Advisors to the Company as to Irish Law: William Fry Fitzwilton House, Wilton Place, Dublin 2, Ireland as to English Law: Hogan Lovells 65 Holborn Viaduct, London EC1A 2DY, England Independent Auditors PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm One Spencer Dock North Wall Quay Dublin 1 Ireland

iShares plc Annual Report 3

iShares public limited company (the "Company") is organised as an open-ended investment Company with variable capital. The Company was incorporated in Ireland on 21 January 2000 with limited liability and segregated liability between its Funds and is organised under the laws of Ireland as a Public Limited Company (“plc”) pursuant to the Companies Acts, 1963 to 2009 and the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations, 2011 (the “UCITS Regulations”). The Company is structured as an umbrella Fund and comprises separate Funds (“Funds”) of the Company. The term “Fund” shall be deemed to mean either a Fund of the Company, or if the context so requires, the Manager or its delegate acting for the account of the relevant Fund. The term “BlackRock” is used to represent BlackRock Advisors (UK) Limited. The investment objectives and policies of each Fund are set out in the prospectus and the relevant supplemental prospectus. Changes to the Company during the year Changes to the Board of Directors: On 3 June 2011, Dominic Pegler was appointed as a Director of the Company. iShares Markit iBoxx £ Corporate Bond 1-5 launched on 30 March 2011. An addendum to the Prospectus and a related simplified prospectus was issued on 26 September 2011. There were 33 Funds in existence at 29 February 2012. The Funds are tracking the Index attached to the Benchmarks in the table below. Fund iShares AEX iShares Barclays Capital Euro Government Bond 1-3 iShares Barclays Capital Euro Inflation Linked Bond iShares Barclays Capital $ Treasury Bond 1-3 iShares DJ Asia/Pacific Select Dividend 30 iShares EURO STOXX Mid iShares EURO STOXX Select Dividend 30 iShares EURO STOXX Small iShares EURO STOXX Total Market Growth Large iShares EURO STOXX Total Market Value Large iShares FTSE 100 iShares FTSE 250 iShares FTSE China 25 iShares FTSE UK Dividend Plus iShares FTSE/EPRA European Property Index Fund iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares Markit iBoxx Euro Corporate Bond iShares Markit iBoxx Euro High Yield Bond iShares Markit iBoxx £ Corporate Bond iShares Markit iBoxx £ Corporate Bond 1-5 iShares Markit iBoxx $ Corporate Bond 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 4 iShares plc Annual Report

Benchmark AEX- Index® Barclays Capital Euro Government Bond 1-3 Year Term Index Barclays Capital Euro Government Inflation-Linked Bond Index Barclays Capital US Treasury 1-3 Year Term Index Dow Jones Asia/Pacific Select Dividend 30 Index EURO STOXX® Mid Index EURO STOXX® Select Dividend 30 Index EURO STOXX® Small Index EURO STOXX® Total Market Growth Large Index EURO STOXX® Total Market Value Large Index FTSE 100 Index FTSE 250 Index FTSE China 25 Index FTSE UK Dividend + Index FTSE EPRA/NAREIT Developed Europe ex UK Dividend + Index FTSEurofirst 80 Index FTSEurofirst 100 Index Markit iBoxx Euro Liquid Corporate Index Markit iBoxx Euro Liquid High Yield Index Markit iBoxx Sterling Liquid Corporates Long-Dated Bond Index Markit iBoxx £ Corporate 1-5 Index Markit iBoxx USD Liquid Investment Grade Top 30 Index MSCI AC Far East ex-Japan Index MSCI Brazil Index MSCI Eastern Europe 10/40 Index MSCI Emerging Markets Index MSCI Europe ex-UK Index MSCI Japan Index MSCI Korea Index MSCI North America Index MSCI Taiwan Index MSCI World Index S&P 500 Index www.iShares.com

Stock exchange listings The Company maintained a primary listing on the London stock exchange (“LSE”). As at 29 February 2012, the Funds are traded on the following exchanges:

Fund iShares AEX iShares Barclays Capital Euro Government Bond 1-3 iShares Barclays Capital Euro Inflation Linked Bond iShares Barclays Capital $ Treasury Bond 1-3 iShares DJ Asia/Pacific Select Dividend 30 iShares EURO STOXX Mid iShares EURO STOXX Select Dividend 30 iShares EURO STOXX Small iShares EURO STOXX Total Market Growth Large iShares EURO STOXX Total Market Value Large iShares FTSE 100 iShares FTSE 250 iShares FTSE China 25 iShares FTSE UK Dividend Plus iShares FTSE/EPRA European Property Index Fund iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares Markit iBoxx Euro Corporate Bond iShares Markit iBoxx Euro High Yield Bond iShares Markit iBoxx £ Corporate Bond iShares Markit iBoxx £ Corporate Bond 1-5 iShares Markit iBoxx $ Corporate Bond 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

Base Currency* €

London Stock Exchange 3

Borsa Italiana -

Deutsche Börse** -

NYSE Euronext Amsterdam 3

NYSE Euronext Paris -

€ € $ $ € € € € € £ £ $ £ € € € € € £ £ $ $ $ $ $ € $ $ $ $ $ $

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

SIX Swiss SIC Exchange List*** 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

3 3 3 3 3 3 3 3 3 3 3

* All $ and £ base currency Funds are United States Dollar and British Pounds respectively. ** Funds trade on the Deutsche Börse Xetra XTF Funds Platform of the Frankfurt Stock Exchange. *** SIC list (Sistema Internacional de Cotizaciones) is an international platform of the Mexican Stock Exchange.

All figures relating to each Fund are shown in the relevant functional currency. The financial statements of the Company are presented in British Pounds. These Funds are Exchange Traded Funds (“ETFs”), which provide the flexibility of a share with the diversification of a Fund. They can be bought and sold like any other share listed on a stock exchange, but provide instant exposure to many companies or various financial instruments relevant to the Fund.

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iShares plc Annual Report 5

Total expense ratio and portfolio turnover rate The total expense ratio ("TER") shown below expresses the sum of all costs and commissions charged to each Fund’s assets as a percentage of the average Fund assets during the year. The portfolio turnover rate (“PTR”) is an indication of the level of trading conducted by the Fund based on a twelve month period ended 29 February 2012. Annual Unaudited TER (%)

Annual Unaudited PTR (%)

iShares AEX iShares Barclays Capital Euro Government Bond 1-3 iShares Barclays Capital Euro Inflation Linked Bond iShares Barclays Capital $ Treasury Bond 1-3 iShares DJ Asia/Pacific Select Dividend 30 iShares EURO STOXX Mid iShares EURO STOXX Select Dividend 30 iShares EURO STOXX Small iShares EURO STOXX Total Market Growth Large iShares EURO STOXX Total Market Value Large

0.30 0.20 0.25 0.20 0.59 0.40 0.40 0.40 0.40 0.40

16.54 258.28 52.92 202.97 78.15 68.97

iShares FTSE 100 iShares FTSE 250 iShares FTSE China 25 iShares FTSE UK Dividend Plus iShares FTSE/EPRA European Property Index Fund iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares Markit iBoxx Euro Corporate Bond iShares Markit iBoxx Euro High Yield Bond iShares Markit iBoxx £ Corporate Bond iShares Markit iBoxx £ Corporate Bond 1-5* iShares Markit iBoxx $ Corporate Bond

0.40 0.40 0.74 0.40 0.40 0.40 0.40 0.20 0.50 0.20 0.20 0.20

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

0.74 0.74 0.74 0.75 0.40 0.59 0.74 0.40 0.74 0.50 0.40

Fund

56.09 92.53 232.05 156.57 9.29 44.37 51.96 97.71 47.43 22.08 8.40 94.60 56.55 90.14 72.49 94.24 9.85 15.29 62.69 21.49 15.01 7.48 10.56 24.12 11.64 20.94 12.71

* As this Fund launched during the year, the TER and PTR is shown from launch date to the period end date.

6 iShares plc Annual Report

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FUND PERFORMANCE The performance of the Funds for the period under review is shown below:

Fund iShares AEX iShares Barclays Capital Euro Government Bond 1-3 iShares Barclays Capital Euro Inflation Linked Bond iShares Barclays Capital $ Treasury Bond 1-3 iShares DJ Asia/Pacific Select Dividend 30 iShares EURO STOXX Mid iShares EURO STOXX Select Dividend 30 iShares EURO STOXX Small iShares EURO STOXX Total Market Growth Large iShares EURO STOXX Total Market Value Large iShares FTSE 100 iShares FTSE 250 iShares FTSE China 25 iShares FTSE UK Dividend Plus iShares FTSE/EPRA European Property Index Fund** iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares Markit iBoxx Euro Corporate Bond iShares Markit iBoxx Euro High Yield Bond iShares Markit iBoxx £ Corporate Bond iShares Markit iBoxx £ Corporate Bond 1-5* iShares Markit iBoxx $ Corporate Bond 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 return for the year ended 29/02/2012 % (9.64) 4.34 4.38 1.30 13.18 (13.01) (12.18) (11.10) (4.56) (16.69) 1.20 1.15 (1.97) (0.88) (10.54) (12.30) (5.73) 7.00 4.54 10.58 3.51 9.70 2.96 (4.52) (12.71) (0.83) (8.37) (10.66) 5.46 3.01 (2.19) (2.30) 4.38

Benchmark return Fund return Benchmark return for the year ended for the period ended for the period ended 29/02/2012 28/02/2011*** 28/02/2011*** % % % (9.08) 14.63 15.04 4.55 (0.53) (0.40) 4.55 (0.59) (0.44) 1.51 0.78 0.91 12.54 25.85 25.92 (13.55) 17.79 17.90 (13.07) 14.26 14.27 (11.61) 19.33 19.28 (5.00) 16.38 16.52 (17.53) 14.09 14.08 1.63 17.79 18.12 1.42 21.61 22.03 (1.26) 8.14 8.82 (0.31) 16.48 17.10 (10.85) 26.97 27.50 (12.68) 15.65 15.76 (5.78) 15.28 15.51 7.08 0.72 0.91 4.92 6.23 5.74 10.95 2.81 3.98 3.37 N/A N/A 9.79 7.29 7.59 2.98 22.75 23.19 (3.80) 17.50 18.09 (11.00) 40.43 40.46 (0.11) 22.33 22.36 (8.60) 15.77 15.96 (10.16) 24.22 24.68 6.06 29.58 30.04 3.07 23.38 23.74 (1.60) 31.28 32.37 (1.69) 25.87 26.49 4.45 22.66 22.80

* As this Fund launched on 30 March 2011, the results are shown from the launch date to the year end date. ** Effective from 3 October 2011 this Fund changed its benchmark index from gross to total net index series. *** Prior period returns are shown from 12 June 2010 or the Fund launch date, if later, to 28 February 2011. Launch dates are listed in the income statements of the relevant Funds.

The Company was notified in January 2012 that FTSE had found it necessary to amend the FTSE EPRA/NAREIT Dividend + indices due to an issue with the yield screening formula used in the index review in September 2011. This issue resulted in a number of incorrect constituent deletions and missing constituent additions in the affected indices. In order to amend the affected indices to reflect the correct index membership, FTSE announced that it would rebalance the affected indices and would implement the rebalance in three stages so as to minimise transaction costs. The first stage was carried out on 20 January 2012, the second stage was carried out on 3 February 2012 and the third stage was carried out on 20 February 2012. The Fund of the Company affected by the index rebalances was the iShares FTSE/EPRA European Property Index Fund. Each time FTSE rebalanced their benchmark indices, the portfolio of the affected Fund was rebalanced accordingly to bring its portfolio in line with its benchmark index.

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iShares plc Annual Report 7

CALENDAR YEAR PERFORMANCE The performance of the Funds, on a calendar year basis, is shown below: Launch Date Fund iShares AEX iShares Barclays Capital Euro Government Bond 1-3 iShares Barclays Capital Euro Inflation Linked Bond iShares Barclays Capital $ Treasury Bond 1-3 iShares DJ Asia/Pacific Select Dividend 30 iShares EURO STOXX Mid iShares EURO STOXX Select Dividend 30 iShares EURO STOXX Small iShares EURO STOXX Total Market Growth Large iShares EURO STOXX Total Market Value Large iShares FTSE 100 iShares FTSE 250 iShares FTSE China 25 iShares FTSE UK Dividend Plus iShares FTSE/EPRA European Property Index Fund** iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares Markit iBoxx Euro Corporate Bond iShares Markit iBoxx Euro High Yield Bond* iShares Markit iBoxx £ Corporate Bond iShares Markit iBoxx £ Corporate Bond 1-5* iShares Markit iBoxx $ Corporate Bond 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

Nov-05

2012 01/01/2012 to 29/02/2012 Fund Benchmark (%) (%) 4.07 4.19

2011 01/01/2011 to 31/12/2011 Fund Benchmark (%) (%) (9.34) (8.80)

2010 01/01/2010 to 31/12/2010 Fund Benchmark (%) (%) 8.55 9.24

2009 01/01/2009 to 31/12/2009 Fund Benchmark (%) (%) 40.95 42.14

Jun-06

2.56

2.60

1.60

1.80

1.16

1.34

4.12

4.39

Nov-05

6.52

6.54

(1.12)

(0.94)

0.80

0.97

7.80

8.12

Jun-06

(0.08)

(0.04)

1.41

1.62

2.43

2.58

0.70

0.85

Jun-06 Oct-04

14.53 13.26

14.63 13.30

(0.49) (19.69)

(1.11) (20.15)

16.79 10.05

16.75 9.87

73.75 33.31

71.51 33.86

Oct-05 Oct-04

3.77 13.12

3.80 13.20

(11.48) (19.12)

(12.36) (19.65)

5.29 15.24

4.76 14.79

32.61 47.72

32.69 47.49

Nov-05

13.09

13.07

(13.62)

(14.01)

16.34

16.41

15.08

13.91

Nov-05 Apr-00 Mar-04 Oct-04 Nov-05

7.38 5.97 13.49 16.61 9.27

7.36 6.04 13.58 16.72 9.39

(14.32) (2.59) (10.28) (17.64) (6.30)

(15.12) (2.18) (10.06) (17.03) (5.79)

(9.31) 12.19 26.95 2.12 12.98

(9.68) 12.62 27.40 3.15 13.65

32.69 26.97 49.76 52.60 33.70

32.89 27.33 50.64 54.23 33.68

Nov-05 Dec-00 Oct-01

3.22 9.08 6.87

3.18 9.08 6.91

(12.40) (13.85) (6.88)

(12.61) (14.22) (6.94)

22.16 (0.30) 5.03

22.79 (0.39) 5.25

38.86 25.99 29.72

39.86 25.87 29.89

Mar-03

3.48

3.58

3.06

3.13

4.31

4.45

12.42

13.14

Sep-10 Mar-04

9.33 2.93

9.48 3.11

(1.43) 7.83

(1.15) 8.16

3.05 6.49

2.51 7.09

N/A 13.08

N/A 12.34

Mar-11 May-03 Oct-05 Nov-05 Nov-05 Nov-05 Jun-06 Oct-04 Nov-05 Jun-06 Oct-05 Oct-05 Mar-02

3.38 4.49 16.35 21.20 24.00 17.90 9.31 9.70 15.86 9.22 16.89 10.01 8.88

3.54 4.53 16.52 21.46 24.31 18.01 9.33 9.80 15.84 9.25 17.10 10.15 8.88

0.12 5.79 (14.82) (22.37) (24.90) (19.17) (12.23) (14.82) (12.57) (0.05) (21.31) (5.91) 1.40

(0.16) 5.91 (14.78) (21.85) (22.39) (18.42) (12.42) (14.33) (12.00) (0.07) (20.89) (5.54) 1.47

N/A 10.25 19.11 5.92 19.41 18.86 8.66 14.85 25.90 14.64 20.69 10.37 14.29

N/A 10.32 19.44 6.54 17.68 18.88 8.63 15.44 26.74 15.30 21.84 11.76 14.37

N/A 10.54 67.60 125.85 84.74 75.44 28.35 5.67 70.78 27.95 77.71 29.05 25.53

N/A 10.37 68.88 128.06 89.05 78.51 28.44 6.25 71.35 28.44 79.21 29.99 25.55

* For Funds launched this year or in prior periods, returns are shown from the launch date to the end of the reporting period. ** Effective from 3 October 2011 this Fund changed its benchmark index from gross to total net index series.

8 iShares plc Annual Report

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CALENDAR YEAR PERFORMANCE (continued) The Fund return figures are the aggregated net monthly returns and are based on the average published pricing net asset value (“NAV”) for the financial period under review. Due to accounting policy requirements under Irish accounting standards which apply to the financial statements, there may be slight differences between the NAV per share as recorded in the financial statements, and the published pricing NAV per share. The returns are net of management fees. Past performance may not necessarily be repeated and future performance may vary.

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iShares plc Annual Report 9

MARKET REVIEW Equities Global equities This market background summary covers iShares MSCI World. Global equities ended the Company’s review year largely unchanged, with early concerns over the outlook for economic growth in the developed markets partly offset by subsequent optimism that the Eurozone sovereign debt crisis could be contained. World stock markets began the Company’s review year on a relatively soft note, as fears over the impact of the deepening Eurozone sovereign debt crisis and the spread of unrest in the Middle East were partly offset by generally positive corporate earnings news. However, equities began a dramatic slide in late July amid concerns over weaker US economic data and an escalation of Europe’s debt crisis as bond yields in Italy and Spain began to rise sharply. Though the deepening crisis would subsequently push Greece to the brink as the stricken country sought a second bailout, investors took comfort from the European Central Bank’s ("ECB") efforts to avert a new credit crisis by providing banks with cheap loans of up to three years. Resilient US economic data further underpinned investors’ sentiment, with generally firm newsflow from emerging markets helping to offset concerns that Europe faces an extended period of sluggish economic activity. US equities This market background summary covers the iShares S&P 500 and iShares MSCI North America Funds. US equities ended the Company’s review year with modest positive returns. Following a relatively subdued start to the period as optimism over the outlook for corporate earnings was offset by concerns that the US was facing a protracted period of subdued economic growth, global equities slid sharply during the third quarter of 2011. The falls were triggered by a marked deterioration in economic data, particularly in the US, and fears that the Eurozone sovereign debt crisis was directly impacting on the larger ‘peripheral’ economies of Italy and Spain. Having grown at an annualised rate of 3.1% during the final quarter of 2010 and 1.8% during the first quarter of 2011, data showed that the US economy grew by just 1.3% during the second quarter, while investors were hit by revised data showing that growth had slumped to just 0.4% during the first quarter. Though market volatility remained high towards the end of 2011, investors increasingly drew reassurance from signs that the US economy was showing signs of resilience despite the uncertain global outlook, with the employment market gradually demonstrating signs of a recovery, while retail sales data also improved. In January 2012, the jobless rate fell to 8.3%, the lowest rate since February 2009. With comments from Federal Reserve officials confirming that interest rates were set to remain low for an extended period, sentiment towards US equities was boosted further in early 2012 by news that economic activity was picking up sharply. Data released in late February showed that growth rose to a very robust 3.0% during the final quarter of 2011. Coupled with further encouraging corporate earnings updates, optimism over the US economic outlook helped the S&P 500 index to hit its highest level since 2008. UK equities This market background summary covers the iShares FTSE 100, iShares FTSE 250 and iShares FTSE UK Dividend Plus Funds. The UK economic backdrop remained generally subdued during the Company’s review period, despite almost three years of ultra-low interest rates of just 0.5% and the Bank of England’s efforts to bolster the anaemic recovery with £325bn of quantitative easing. The UK economy grew by a revised 0.4% during the first quarter of 2011, largely offsetting the previous quarter’s shock contraction. Nevertheless, exacerbated by sterling’s earlier weakness, rising food and energy costs pushed inflation higher, with consumer price inflation rising steadily to peak at 5.2% in September, far above the official target of 2.0%. The combination of sub-inflation pay rises and the rising price of essential goods stretched consumer budgets, with flagging consumer confidence and poor retail sales piling pressure on sectors such as leisure and retail. Having fallen sharply alongside their overseas peers during the third quarter amid declining confidence over the sustainability of the global economic recovery, UK equities endured a further period of high volatility towards the end of 2011. With the domestic economic backdrop looking increasingly uncertain, speculation that the Bank of England would restart its quantitative easing programme was vindicated during the fourth quarter. Though data released in December showed that the economy had grown by 0.6% during the third quarter, unemployment rose steadily to a 16 year high during the final quarter of 2011 as austerity measures enforced public sector job cuts. With the ongoing Eurozone sovereign debt crisis adding to the mood of uncertainty, data subsequently showed that the UK economy contracted by 0.2% during the final quarter of 2011. Nevertheless, helped by the internationally diverse nature of the UK’s leading companies, the UK market enjoyed a strong start to 2012 amid optimism that the worst of the Eurozone crisis was over.

10 iShares plc Annual Report

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MARKET REVIEW (continued) Equities (continued) European equities This market background summary covers the iShares AEX, iShares Euro STOXX Mid, iShares Euro STOXX Select Dividend 30, iShares Euro STOXX Small, iShares Euro STOXX Total Market Growth Large, iShares Euro STOXX Total Market Value Large, iShares FTSEurofirst 80, iShares FTSEurofirst 100 and iShares MSCI Europe ex-UK Funds. Returns from European equities generally lagged behind those of other global markets during the Company’s review year, reflecting concerns over the impact of the Eurozone sovereign debt crisis on corporate earnings. Economic data released early in the review year continued to highlight the performance gulf between ‘core’ Eurozone economies, such as Germany, and struggling ‘peripheral’ economies, such as Greece and Spain. While export orientated Germany continued to capitalise on robust demand from the Far East, austerity measures increasingly weighed on struggling ‘Club Med’ countries’ economic prospects. With Portugal following Greece and Ireland by accepting an EU/IMF bailout, speculation grew that the former would require a further emergency loan, with the economy continuing to contract as spending cuts compounded Greece’s problems. European equities fell sharply during the third quarter as fears that the larger ‘peripheral’ economies of Spain and Italy were being dragged into the centre of the crisis. Having raised interest rates as recently as July to combat inflation, the ECB cut interest rates by 0.25 to 1.25% in November, while buying peripheral debt in an effort to keep borrowing costs low. As concerns grew over banks’ exposure to plunging peripheral bond markets, in the absence of political progress towards a solution to the crisis, the ECB offered unlimited low-cost loans to banks in an effort to avert a solvency crisis. By the end of the Company’s review period, the ECB had lent nearly €1 trillion to cashhungry institutions, while also lowering interest rates to 1.0% in an effort to support the flagging recovery. Despite some ongoing concerns over the lack of concrete political progress towards a comprehensive solution to end the crisis, European equities rose strongly over the final weeks of the review period. The gains were driven by reassuring company earnings newsflow and relief that the worst-case scenarios such as a disorderly Greek default or solvency crisis in the banking system had seemingly been averted. Japanese equities This market background summary covers iShares MSCI Japan. Japanese equities fell sharply in the immediate aftermath of the devastating earthquake and tsunami disaster that claimed well over 15,000 lives in March 2011. The tsunami also inflicted severe damage to infrastructure, with a radiation leak at the Fukushima nuclear power plant adding to the mood of uncertainty. Given the severe damage to power networks, rolling power cuts impact on industrial production, with the knock-on effect on supply chains pushing Japan’s already faltering economy back into recession. Though hopes remained that the sheer scale of the necessary rebuilding programme would help support sectors such as construction and engineering, Japanese equities fell sharply in tandem with their overseas peers early in the third quarter of 2011 amid concerns that the faltering global economic recovery would hit demand for Japanese exports. Political uncertainty also weighed on sentiment to Japanese stocks, with Prime Minister Kan resigning in late August following widespread criticism of his leadership in the aftermath of the disaster. Though the Japanese economy returned briefly to growth in the third quarter, the Bank of Japan’s cautious economic outlook was vindicated by news that the economy had contracted by 0.2% during the final quarter of 2011. Nevertheless, despite the uncertain prospects for the domestic economy, Japanese equities joined their international counterparts’ robust rally in early 2012 amid optimism that the global economic recovery could gradually reassert itself. Emerging markets equities This market background summary covers the iShares DJ Asia/Pacific Select Dividend 30, iShares FTSE China 25, iShares MSCI AC Far East ex Japan, iShares MSCI Brazil, iShares MSCI Eastern Europe 10/40, iShares MSCI Emerging Markets, iShares MSCI Korea and iShares MSCI Taiwan Funds. Although the rapidly developing emerging economies continued to set the pace of global economic growth over the Company’s review year, emerging market equities generally delivered disappointing returns. Despite some recovery in optimism over the global economic outlook during the final months of the review year, emerging markets’ returns over much of 2011 were impacted by investors’ cautious stance towards markets perceived as carrying greater risk given the uncertain outlook for global demand. While the Chinese economies continued to grow strongly, the authorities’ efforts to cool inflation and slow economic activity to a more sustainable level were largely successful during the review period. Having grown by a breakneck 9.7% during the first quarter of 2011 (compared to the first quarter of 2010), growth subsequently slowed slightly to 9.5%, 9.1% and 8.9% on the same basis over the second, third and fourth quarters respectively.

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iShares plc Annual Report 11

MARKET REVIEW (continued) Equities (continued) Emerging markets equities (continued) The fourth quarter figure represented the country’s slowest growth rate in two and a half years, with the property sector cooling rapidly, partly due to measures such as tighter lending directives imposed on banks. Other emerging economies experienced a similar slowdown in economic activity, with Brazil’s growth rate sliding to 1.4% during the fourth quarter (relative to a year earlier), compared to a rate of 4.2% during the first quarter of 2011, and a robust 9.3% in the first quarter of 2010. Property markets This market background summary covers iShares FTSE/EPRA European Property Index Fund. Following a brief setback in March 2011 as worries deepened over the spread of the Eurozone crisis to Portugal, European property assets generally delivered solid gains during the early months of the review period. The gains were driven primarily by optimism that the resilient economic performance of Europe’s major countries would continue to drive demand for office and retail space. However, property markets fell during the third quarter as concerns that the Eurozone crisis was spreading to larger peripheral countries, such as Italy and Spain, coupled with a batch of weaker global economic data, raised fears that the global recovery could falter. European property assets remained highly volatile into the fourth quarter of 2011 amid concerns that the turmoil in sovereign bond markets could threaten some parts of the banking sector, potentially impacting on the financing of some property deals. Though valuations staged a partial recovery in early 2012 after the ECB acted to address concerns over the near term liquidity crisis in the banking sector, European property assets nevertheless ended the Company’s review year with negative returns. This disappointing performance reflected concerns that a protracted period of subdued economic growth in Europe would weigh on demand for commercial property. Fixed income US government bonds This market background summary covers iShares Barclays Capital $ Treasury Bond 1-3. Short-dated US Treasuries generated modest positive returns over the Company’s review year. Though firm energy costs in early 2011 continued to stoke inflation, Treasury bonds generally benefitted from investors’ conviction that short term rates would remain low as the Federal Reserve continued to support the economic recovery. While political wrangling ahead of the eventual agreement to raise the US debt ceiling and the lack of progress on tackling the US’s deficits contributed to ratings agency S&P’s decision to downgrade the US’s AAA credit rating, US Treasuries remained a safe haven throughout the second half of 2011 amid uncertainty over the outcome of the Eurozone crisis. Though concerns over the resilience of energy prices remained high in early 2012, short dated Treasury bond prices were underpinned by Federal Reserve chief Bernanke’s commitment to keep rates low to help support the economic recovery. European government bonds This market background summary covers the iShares Barclays Capital Euro Government Bond 1-3 and iShares Barclays Capital Euro Inflation Linked Bond Funds. Short-dated euro-denominated government bonds made limited gains during the early months of the review year as the ECB raised interest rates in April and July in an effort to combat inflationary pressures. However, concerns increasingly focused on the deepening Eurozone sovereign debt crisis, with investors favouring safe haven German debt over debt issued by struggling peripheral Eurozone sovereigns, such as Greece. As Spanish and Italian finances increasingly came under scrutiny, 10 year Italian government bond yields soared to over 7%, prompting the ECB to step in with direct purchases in an effort to keep borrowing costs at more sustainable levels. Though progress towards a comprehensive political solution to the crisis remained limited, euro government bond prices rallied strongly during the final months of the review period, cheered by the ECB’s efforts to manage the crisis through a combination of lower interest rates and ultra-cheap loans to avert a crisis in the banking sector. Inflation-linked bonds delivered positive returns over the review year. Following a relatively steady first half of the period as Eurozone inflation climbed to nearly 3.0%, European inflation-linked bonds delivered solid gains in volatile trading during the second half of the review year. Having raised interest rates in April and July, the ECB subsequently cut interest rates during the final quarter of 2011 in an effort to support the weak recovery as the European sovereign debt crisis deepened. With energy prices climbing sharply towards the end of the Company’s review year, inflation-linked bonds prices rallied sharply, reflecting investors’ confidence in the ECB’s actions to support the banking sector and optimism that Italy’s recently installed technocrat government could steer the country away from the risk of a Greek style crisis.

12 iShares plc Annual Report

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MARKET REVIEW (continued) Fixed income (continued) Corporate bonds This market background summary covers the iShares Markit iBoxx Euro Corporate Bond, iShares Markit iBoxx Euro High Yield Bond, iShares Markit iBoxx £ Corporate Bond, iShares Markit iBoxx £ Corporate Bond 1-5 and iShares Markit iBoxx $ Corporate Bond Funds. Credit markets ended the Company’s review year higher, with dollar denominated corporate bonds generally outperforming sterling and euro-based issues. As corporate bonds continued to benefit from investors’ appetite for risk in return for the prospect of higher returns, yield spreads relative to government debt narrowed further during the first half of 2011, reflecting confidence in the outlook for corporate earnings. High yield bonds were among the main beneficiaries of positive market sentiment as investors sought out attractive levels of income. However, credit markets suffered during the third quarter as rising levels of global economic uncertainty weighed on investors’ appetite for credit risk. As the Eurozone sovereign debt crisis deepened during the third quarter, euro denominated issues performed particularly poorly as heightened levels of uncertainty saw investors favour safer havens, such as German government bonds and gilts, while higher risk assets lost value. Nevertheless, as the ECB sought to stabilise the situation, with banks taking full advantage of exceptionally supportive measures from the central bank, investors’ appetite for risk returned during the final weeks of the Company’s review period. Following a highly volatile few months, corporate bond markets delivered significant gains in early 2012. Bonds issued by financial institutions recovered very strongly from their earlier losses as confidence in the European banking sector returned, while high yield asset prices also ended the review year with a dramatic rally.

BlackRock Advisors (UK) Limited March 2012

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iShares plc Annual Report 13

The Directors present their report and financial statements for the year from 1 March 2011 to 29 February 2012. 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 2009 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (the "UCITS Regulations"). Irish Company law requires the Directors to prepare financial statements for each financial year which gives a true and fair view of the state of affairs of the Company for that year. In preparing these financial statements, the Directors are required to: select suitable accounting policies and apply them consistently; make judgements and estimates that are reasonable and prudent; prepare the financial statements on the going concern basis, unless it is appropriate to presume that the Company will not continue in business. The Directors confirm that they have complied with the above requirements in preparing the financial statements. 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 2009 and the UCITS Regulations. In this regard State Street Fund Services (Ireland) Limited have been appointed for the purpose of maintaining proper books of accounts. Accordingly, the books of accounts are kept at the following address: State Street Fund Services (Ireland) Limited 78 Sir John Rogerson’s Quay Dublin 2 Ireland The Directors 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. The Directors have entrusted the assets of the Company to the Custodian for safekeeping in accordance with the Memorandum and Articles of Association of the Company. In this regard the Directors have appointed State Street Custodial Services (Ireland) Limited as Custodian pursuant to the terms of a Custodian Agreement. The address at which this business is conducted is as follows: State Street Custodial Services (Ireland) Limited 78 Sir John Rogerson’s Quay Dublin 2 Ireland The financial statements are published on the www.iShares.com website. The Directors, together with the Manager and BlackRock Advisors (UK) Limited are responsible for the maintenance and integrity of the financial information included on this website. Legislation in the Republic of Ireland governing the presentation and dissemination of the financial statement may differ from legislation in other jurisdictions.

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Corporate Governance Statement Background The Board of iShares plc (the “Company”) is committed to maintaining the highest standards of corporate governance and is accountable to shareholders for the governance of the Company’s affairs. The Board has put in place a framework for corporate governance which it believes is appropriate for an Open Ended Investment Company (“OEIC”) and which will enable the Company to comply with the relevant provisions of the UK Corporate Governance Code (the “Code”) issued by the Financial Reporting Council in June 2010, which replaces the 2008 Combined Code and is applicable to the Company for the period under review. The Code is published by the FSA and is available to download from www.fsa.gov.uk. The Company is also subject to the United Kingdom Listing Authority Listing Rules (the “UKLA Listing Rules”) as they apply to overseas open-ended investment funds under Chapter 16 of the UKLA Listing Rules, and applicable chapters of the Disclosure Rules and Transparency Rules; available at http://www.fsa.gov.uk (the “DTR Rules”). The UKLA Listing Rules require the Company to disclose how the Company has applied the Main Principles set out in the Code in a manner that would enable shareholders to evaluate how the principles have been applied and to explain any areas and the reasons for non-compliance with the provisions of the Code. The Company is also subject to corporate governance practices imposed by the Central Bank of Ireland (the “Central Bank”) in their UCITS Notices and Guidance Notes which can be obtained from the Central Bank’s website at http://www.centralbank.ie/regulation/industry-sectors/funds/ucits/Pages/default.aspx and are available for inspection at the registered office of the Company. The Company is incorporated in Ireland as a public limited company pursuant to the Companies Acts 1963 to 2009 (the “Companies Acts”) and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (the “Regulations”). The Company is structured as an umbrella type fund and comprises a number of separate funds with segregated liability between each of the funds. The Company is regulated by the Central Bank. The Company is an exchange traded fund. The Company’s sole objective is the collective investment in transferable securities and/or other liquid financial assets referred to in Regulation 68 of the Regulations of capital raised from the public and which operates on the principle of risk spreading. The Articles of Association of the Company provide that the Company may offer separate classes of shares, each representing interests in a fund comprising a distinct portfolio of Investments. The shares of each fund are issued on different terms and conditions to those of the other funds. The specific investment objectives and policies of each fund will be formulated by the Directors at the time of the creation of the fund and any change to a fund’s investment objective and/or material change to the investment policy of a fund is subject to the prior consent of Shareholders evidenced by either a majority vote at a meeting of Shareholders of a fund or by written consent of all the Shareholders. The Board has considered the principles and recommendations of the Code in building a corporate governance framework which both adheres to best practice and takes account of the fact that the Company is an OEIC. This statement summarises the corporate governance structure and processes in place for the Company for the period under review, i.e. from 1 March 2011 to 29 February 2012. Compliance The Board has made the appropriate disclosures in this report to ensure the Company meets its continuing obligations pursuant to the UKLA Listing Rules and the DTR Rules. It should be noted that as an OEIC most of the Company’s day-to-day management and administration is delegated to BlackRock group companies such as the Manager and the Investment Manager and other third party service providers. The Company has no employees and the Directors are all non-executive. The Board recognises that the shareholders of the Company invest into a regulated open ended investment vehicle. The Board considers that the governance structure and operational processes in place for the Company are suitable for an OEIC and not all of the provisions of the Code are relevant to the Company. The Board considers that the Company has complied with the relevant provisions contained within the Code throughout this accounting period except, as explained below, where departure from the Code is considered appropriate given the Company’s position as an OEIC. This Corporate Governance Statement, together with the Statement of Directors’ Responsibilities set out on page 14, describes how the main principles of the Code are applied to the Company. The Code includes provisions relating to:(i) the appointment and role of the Chief Executive; (ii) executive Directors’ remuneration; (iii) the need to designate a Director as a Senior Independent Director; (iv) the re-election of Directors by shareholders; (v) the need for an internal audit function; and (vi) the need to establish Audit, Remuneration and Nominations Committees.

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iShares plc Annual Report 15

Corporate Governance Statement (continued) Compliance (continued) For the reasons already set out and which will be further explained herein, the Board does not consider these provisions appropriate to the Company. Therefore the Company was not compliant with these provisions during the period under review. The Board The Code requires that, apart from the Chairman, at least two members of the Board should be independent non-executive Directors as determined by the Board to be independent in character and judgement and free from relationships or circumstances which may affect, or could appear to affect, the Director’s judgement. The Board currently consists of eight non-executive Directors, three of whom (including the Chairman) are considered independent of the Company in that they are independent of the Investment Manager and other third party service providers such as the Administrator and Custodian. The Board has considered and is satisfied that that these Directors fulfil the independence provisions of the Code. The Board has also considered and is satisfied that the presence of two non-executive independent Directors (excluding the Chairman) is an appropriate balance for the Board. The Board has considered whether a Senior Independent Director should be appointed. As the Board comprises entirely of non-executive Directors, the Board consider that there are sufficient channels of communication within the governance framework such that a specifically appointed Senior Independent Director is not required. The Board plan to review this position at regular intervals. The Board believes that because the Company is an OEIC, it is not necessary to appoint a Chief Executive. The Directors’ biographies, on pages 22 to 24, collectively demonstrate a breadth of investment knowledge, business and financial skills which enables them to provide effective strategic leadership, oversight and proper governance of the Company. The Board has not established a Nominations Committee because the function of scrutinising candidates to fill any vacancies in the Board, which may arise from time to time, is performed by the Board. Appointments to the Board are subject to the approval of the Central Bank. The Company is an OEIC and the Board does not consider it necessary to engage an external search consultancy or openly advertise in order to fill vacancies in the board which may arise from time to time. Article 73 of the Articles of Association also provides that a Director appointed by the Directors to fill a casual vacancy or as an additional Director should seek re-appointment by the shareholders at the annual general meeting held subsequent to their appointment. A number of the Directors intend to seek re-appointment in accordance with Article 73 at the 2012 annual general meeting of the Company. The Board seeks to continue to have three independent non-executive Directors and to be in full compliance of section B1.2 of the UK Corporate Governance Code June 2010 in respect of the requirement for a minimum of two independent non-executive Directors for smaller companies. In line with the Articles of Association retiring Directors are eligible for re-appointment by the other Directors. The Board is committed to maintaining an appropriate balance of skills, experience, independence and knowledge of the company and supports a planned and progressive renewing of the Board. The composition of the Board was changed during the period when Mr Dominic Pegler was appointed as a non-executive Director on 3 June 2011. Post the year-end of the Company, Mr Liam Miley was appointed as a non-executive Director with effect from 25 April 2012 and due to his relocation to Asia, Mr Dominic Pegler resigned with effect from 29 May 2012. The Directors, who receive remuneration for their role as Directors of the Company, are in the process of either renewing or negotiating service contracts with the Company. The terms of the afore-mentioned service contracts will include an assessment of the time commitment expected of each Director. The Directors also have a continuing obligation to ensure they have sufficient time to discharge their duties. The detail of each Director’s, including the Chairman’s, other appointments and commitments are made available to the Board for inspection and all new appointments or significant commitments require the prior approval of the Investment Manager. The Board does not believe it is necessary for those Directors, who are also full time employees and executives of the BlackRock group to have service contracts in place. Once finalised, copies of the service contracts for each of the Directors will be made available to shareholders on request. Prior to his/her appointment, each new Director receives a full and formal tailored induction incorporating relevant information regarding the Company and his/her duties and responsibilities as a Director. In addition, a new Director is required to spend some time with representatives of the Investment Manager so that the new Director will become familiar with the various processes which the Investment Manager considers necessary for the performance of his/her duties and responsibilities to the Company. The Company’s policy is to encourage Directors to keep up to date with developments relevant to the Company. The Directors have attended and will continue to attend updates and briefings run by the Investment Manager and which are relevant to the Company. The Directors also receive regular briefings from, amongst others, the auditors, investment strategists, trustees and legal advisors regarding any proposed product developments or changes in laws or regulations that could affect the Company.

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Corporate Governance Statement (continued) The Board (continued) The Board is supplied with information in a timely manner and in a form and of a quality appropriate to enable it to discharge its duties. The training needs of the Directors are evaluated as part of the annual performance evaluation of the Board. Strategic issues and all operational matters of a material nature are determined by the Board. If the shareholders wish to engage on matters relating to the management of the Company then invariably they will wish to discuss these matters or meet with the Investment Manager. However, the Board will accept requests to make individual Directors available to major shareholders. The Company has maintained appropriate Directors’ and Officers’ liability insurance cover throughout the period. Board’s Responsibilities The Board of Directors is responsible for the long-term success of the company and recognises its responsibility to provide leadership, direction and control to the Company within a framework of prudent and effective controls which enables risk to be assessed and managed. The Board is effective in providing constructive challenge and helping to develop proposals on strategy. The Board, in addition, recognises its responsibility to shareholders for the overall management of the Company. It reserves to itself decisions relating to the determination of investment policy and objectives, any change in investment strategy, the appointment and removal of the Company Secretary and entering into any material contracts. The Board also approves the prospectus, circulars to shareholders, listing particulars and other relevant legal documentation. A formal schedule of matters specifically reserved for decision by the Board is maintained. The Chairman's main responsibility is to lead and manage the Board, encourage critical discussions and promote effective communication within the Board. In addition, he is responsible for promoting best practice corporate governance and effective communication with shareholders. The Chairman was considered independent on appointment. There were no significant changes to the Chairman’s commitments during the period. The Directors have access to the advice and services of the Company Secretary, external counsel and the resources of the Investment Manager should they be needed. Where necessary, in the furtherance of their duties, the Board and individual Directors may seek independent professional advice at the expense of the Company. Any Director who resigns his/her position is obliged to confirm to the Board and the Central Bank that the resignation is not connected with any issues with or claims against the Company. Furthermore, any Director who has concerns about the running of the Company or a proposed course of action may provide a written statement to the Chairman outlining his/her concerns for circulation to the Board or alternatively may have his/her concerns formally recorded in the minutes of a board meeting. The Board has responsibility for ensuring that the Company keeps proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and which enable it to ensure that the financial statements comply with the Companies Act and relevant accounting standards. It is the Board’s responsibility to present a balanced and understandable assessment of the Company’s financial position, which extends to interim financial statements and other reports made available to shareholders and the public. The Board is also responsible for safeguarding the assets of the Company and for taking reasonable steps in the prevention and detection of fraud and other irregularities. The Board meets monthly and also on an ad hoc basis as required. All Directors are expected to attend each meeting and the attendance at board and committee meetings during the period is set out below. Directors are provided with relevant papers in advance of each meeting. In addition, electronic copies of meeting papers and other relevant information are available to Directors. If a Director is unable to attend a meeting, they will still receive the supporting papers. During the period, many of the ad hoc meetings were arranged at short notice and it was not always possible for all Directors to attend. Performance Evaluation The Board formally reviews its performance on an annual basis and an appraisal system has been agreed for the evaluation of the Board, supporting Committees of the Manager and the individual Directors, including the Chairman. This evaluation process assists in identifying individual Directors training and development needs. The 2011 evaluation for the year ending 30 June 2011, took the form of detailed questionnaires, which were completed by each Director, followed by discussions by the Board to identify how the effectiveness of its activities, policies or processes might be enhanced. The appraisal system has been previously used by other iShares boards and the Board is satisfied with the robustness of the appraisal system and considers the current review and evaluation process adequate. The Board does not believe it is necessary for the Board to meet without the Chairman in attendance for the purposes of appraising his performance as an appraisal of the Chairman is built into the current appraisal system. The results of the current evaluation process were presented to and discussed by the Board. The results confirm that the Board of iShares plc continues to operate at a very high level of effectiveness and all Directors were considered to have discharged their respective duties and responsibilities effectively and have committed an appropriate amount of time to fulfil their duties as a board member.

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iShares plc Annual Report 17

Corporate Governance Statement (continued) Delegation of Responsibilities The Board has delegated the following areas of responsibility: Management and Administration The Board of the Company has delegated the investment management, distribution and administration of the Company and its Funds to the Manager. The Directors of the Manager, with the exception of Mr Gareth Juul, are the same as the Directors of the Company. The Manager has delegated the management of the investment portfolio to the Investment Manager. The Investment Manager operates under guidelines determined by the Board and as detailed in the Company’s prospectus and the various supplementary prospectuses relating to the Company’s Funds. The Investment Manager has direct responsibility for the decisions relating to the day-to-day running of the Company’s Funds and is accountable to the Board of the Manager and the Company for the investment performance of the Funds. The Board has also delegated the exercise of voting rights attaching to the securities held in the portfolio to the Investment Manager. The Manager has delegated its responsibilities as Administrator of the Company and its Funds to State Street Fund Services (Ireland) Limited. The Administrator has the responsibility for the administration of the Company’s affairs including the calculation of the net asset value and preparation of the accounts of the Company, subject to the overall supervision of the Directors and the Manager. The administrator is a subsidiary of State Street Bank & Trust Co. The Company has appointed State Street Custodial Services (Ireland) Limited as Custodian of its assets, which has responsibility for safe-keeping of such assets, pursuant to the Regulations. The custodian is a subsidiary of State Street Bank & Trust Co. The Manager has delegated share registration services to Computershare Investor Services (Ireland) Limited. Committees of the Board and of the Manager The Board has no executive Directors and has not appointed a Chief Executive as it has contractually delegated responsibility for the management of its investment portfolio, the arrangement of custodial services and the provision of accounting and company secretarial services. The Company has no employees. The Board has not constituted a Nominations Committee as this function is carried out directly by the Board. The Board performs the same functions as a Nominations Committee in that it scrutinises the suitability of candidates nominated to fill any vacancies which may arise from time to time. Candidates to the Board are initially identified and reviewed by the Investment Manager. All new appointments require the prior approval of the Central Bank. The Investment Manager applies a rigorous selection process in selecting candidates who might be suitable for presentation to the Board for consideration. Candidates are subject to interview before being submitted for approval to the Chairman. If the candidate is deemed suitable then he/she is presented to the Board for due consideration. The Board has, subject to the approval of the Central Bank, the final decision on the appointment of new Directors. For the period under review, the Board of the Manager operated certain sub-committees, the Financial Accounts and Review Committee (the “FARC”) and the Operations and Risk Committee (the “ORC”). With effect from 21 April 2011 these Committees merged to become the Audit and Risk Committee (the “ARC”). The ARC assumed the responsibilities previously assigned to the two committees. The ARC meets monthly in order to discharge its duties and it reports directly to the Board of the Manager. The ARC has been delegated responsibility for certain day-to-day matters relating to the Company’s business. Any matters which come before the ARC and which require the consideration or a decision of the Board are immediately escalated to the Board. During the period in question, at least two Directors of the Company and the Manager were also members of the ARC (previously the FARC and the ORC). The ARC currently consists of eight members, four of whom are non-executive Directors of the Company and the Manager and, of those, two are considered to be independent Directors. An independent non-executive Director currently acts as Chairman of the ARC. The other members of the ARC are executives of the Investment Manager. The terms of reference of the ARC are available to shareholders on request. The Board considers that all of the members of the ARC (and previously the FARC and ORC) are suitably qualified and have sufficient experience to discharge their responsibilities effectively. Furthermore, certain members of the ARC are qualified accountants with relevant experience in financial matters as they pertain to investment companies.

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Corporate Governance Statement (continued) Delegation of Responsibilities (continued) Committees of the Board and of the Manager (continued) Although the Company itself has not constituted an Audit Committee, the ARC (and previously the FARC) carried out the following principal activities during the period under review: (i) Considering and recommending to the Board of the Company for approval the interim and annual audited financial statements of the Company and reviewing the auditors’ reports thereon. (ii) Ensuring that any recommendations made by the auditors are dealt with and where appropriate implemented. (iii) Reviewing the appropriateness of the Company’s accounting policies. (iv) Ensuring the adequacy of the internal control and risk management systems and standards applicable to the Company which are relevant to financial reporting. (v) Considering and reviewing accounting standards applicable to the Company and any changes thereto. (vi) Reviewing the scope, results, cost effectiveness, independence and objectivity of the auditors. (vii) Reviewing the provision of non-audit services to ensure that the external auditor’s objectivity and independence is safeguarded. (viii) Reviewing and approving the auditor’s plan in respect of the audit of the financial statements of the Company for the following financial year. (ix) Considering and making recommendations to the Board of the Company in relation to the appointment, re-appointment and removal of the auditors. (x) Reviewing and, subject to the Articles of Association of the Company, approving the remuneration and terms of engagement of the auditor. (xi) Reviewing the Investment Manager’s internal audit reporting with regard to audit matters arising which impact on the Investment Manager and the services it provides to the Manager. Where the internal audit report relates to the Manager, then the report must be referred directly to the Board. The ARC (and previously the ORC) is also tasked with, amongst other matters, responsibility for the oversight of service providers to the Company, compliance reporting and the internal audit function of the Investment Manager as it relates to the Company. Membership of the FARC 1 March 2011 to 20 April 2011 John Donohoe - Chairman of the Committee and Independent Non-executive Director of the Company Desmond Murray - Independent Non-executive Director of the Company Barry O’Dwyer - Non-executive Director of the Company Sean Annetts - Member (Director, Corporate Accounting) Lynda Hall - Member (Director, Fund Administration)

Membership of the ORC 1 March 2011 to 20 April 2011 Barry O’Dwyer - Chairman of the Committee and Non-executive Director of the Company Geoffrey D. Radcliffe - Non-executive Director of the Company Stephen Crocombe - Member (Managing Director, Product Development and Range Management) Karen Prooth - Member (Managing Director, iShares Europe) Adrian Hilderly - Member (Director, Compliance)

Membership of the ARC – 21 April 2011 to 29 February 2012 John Donohoe Chairman of the Committee and Independent Non-executive Director of the Company Desmond Murray Independent Non-executive Director of the Company Barry O’Dwyer Non-executive Director of the Company Geoffrey D. Radcliffe Non-executive Director of the Company Sean Annetts Member (Director, Corporate Accounting) Dominic Critchley Member (Director, Fund Administration) Lynda Hall Member (Director, Fund Administration) Adrian Hilderly Member (Director, Compliance) Alan Sievewright Member (Director, Corporate Accounting) Patrick Boylan Member (Director, Financial Markets Advisory) Declan Cronin Member (Director, Fund Administration) Liam Miley Member (Managing Director, Financial Markets Advisory)

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iShares plc Annual Report 19

Corporate Governance Statement (continued) Attendance Record Board – 1 March 2011 to 29 February 2012 A* B* William Roberts (Chairman – Independent Nonexecutive Director) John Donohoe (Independent Non-executive Director) Desmond Murray (Independent Non-executive Director) Nicholas C.D. Hall (Non-executive Director) Barry O’Dwyer (Non-executive Director) Dominic Pegler (Non-executive Director) Geoffrey D. Radcliffe (Non-executive Director) Mark Stockley (Non-executive Director) Sean Annetts Dominic Critchley Stephen Crocombe Lynda Hall Adrian Hilderly Karen Prooth Alan Sievewright

FARC – 1 March 2011 to 20 April 2011 A* B*

ORC – 1 March 2011 to 20 April 2011 A* B*

ARC – 21 April 2011 to 29 February 2012 A* B*

16 16

16 15

1

1

-

-

11

11

16 16 16 12 16 16 -

15 15 15 11 13 13 -

1 1 1 1 -

1 1 1 1 -

1 1 1 1 1 -

1 1 1 1 1 -

11 11 11 1 11 11 11 10

11 11 10 1 9 10 11 9

*

Column A indicates the number of meetings held during the period the Director was a member of the Board or Committee and was eligible to attend. Column B indicates the number of meetings attended.

(1) (2) (3) (4) (5) (6)

There were 16 board meetings held during the period, of which 13 were scheduled meetings and 3 were ad hoc meetings. The FARC and ORC Committees of the Manager were combined into the ARC Committee of the Manager, effective 21 April 2011 Dominic Pegler was appointed as a non-executive Director of the Company on 3 June 2011 Sean Annetts resigned from the ARC Committee of the Manager in May 2011 Alan Sievewright was appointed to the ARC Committee of the Manager in May 2011 Patrick Boylan, Declan Cronin and Liam Miley were appointed to the ARC Committee of the Manager effective 28 February 2012. They were therefore not eligible to attend any ARC meetings held during the period

Internal Controls The Board is responsible for the risk management and internal controls of the Company and for reviewing their effectiveness, for ensuring that financial information published or used within the business is reliable, and for regularly monitoring compliance with regulations governing the operation of the Company. The Board is assisted in this regard by the ARC and together they review the effectiveness of the internal control and risk management systems on an on-going basis to identify, evaluate and manage the Company’s significant risks. As part of that process, there are procedures designed to capture and evaluate any failings or weaknesses. Should a case be categorised by the Board as significant, procedures exist to ensure that necessary action is taken to remedy the failings. The Trustee to the Company also reports into the Company on an annual basis and to the ARC on a quarterly basis. The Board is not aware of any significant failings or weaknesses in internal control arising in the period under review. The Board is also responsible for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial reporting process. Such systems are designed to manage rather than eliminate the risk of failure to achieve the Company’s financial reporting objectives. The Company has procedures in place to ensure all relevant accounting records are properly maintained and are readily available, including production of annual and half-yearly financial statements. These procedures include appointing the Administrator to maintain the accounting records of the Company independently of the Investment Manager and the Custodian. The annual and half-yearly financial statements of the Company are required to be approved by the Board of Directors of the Company and filed with the Central Bank and the London Stock Exchange. The financial statements are prepared in accordance with applicable Irish law and Generally Accepted Accounting Practice in Ireland. The accounting information given in the annual report is required to be audited. The Auditor’s report, including any qualifications, is reproduced in full in the annual report of the Company.

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Corporate Governance Statement (continued) Internal Controls (continued) The control processes over the risks identified, covering financial, operational, compliance and risk management, is embedded in the operations of the Manager, the Investment Manager and other third party service providers including the Administrator and the Custodian. There is a monitoring and reporting process to review these controls, which has been in place throughout the period under review and up to the date of this report, carried out by the Investment Manager’s corporate audit department. The Investment Manager’s internal audit and operational risk units report to the Board through the ARC on a quarterly basis. The ARC also receives a report from the Administrator and the Custodian on the internal controls of the administrative and custodial operations of the Company. It is not necessary for the Company to have its own internal audit function because all of the management and administration of the Company is delegated to the Manager, Investment Manager, Administrator and Custodian. The Board recognises that these control systems can only be designed to manage rather than eliminate the risk of failure to achieve fund objectives, and to provide reasonable, but not absolute, assurance against material misstatement or loss, and relies on the operating controls established by the service providers. The ARC conducts an annual review of independence of the external auditors and has in place a pre-approval policy on the engagement of the Auditor to supply non-audit services. The Company does not have any employees and therefore it does not have a “Whistleblowing” policy. However, the Investment Manager has a “Whistleblowing” policy under which its staff, in confidence, may raise concerns about possible improprieties in matters of financial reporting or other matters insofar as they may affect the Company. Financial Reporting The Statement of Directors’ Responsibilities in respect of the Financial Statements is set out on page 14, and in the Report of the Independent Auditors on pages 26 and 27. The Company prepares its financial statements under Irish GAAP on a going concern basis. Remuneration The Company is an OEIC and has no employees or executive Directors. The Board has not constituted a Nominations Committee as this function is carried out directly by the Board. The Board believes that the principles of Section D of the Code relating to remuneration do not apply to the Company, except as outlined below, as the Company has no executive Directors. No Director past or present has any entitlement to pensions, and the Company has not awarded any share options or long-term performance incentives to any of them. No element of Directors’ remuneration is performance-related. Those Directors who are also employees of the BlackRock group waive their right to a Director’s fee. All other Directors have fees paid to them which are agreed with the Investment Manager. The Board believes that the level of remuneration for those Directors who take a fee properly reflects the time commitment and responsibilities of their roles. The maximum amount of remuneration payable to the Directors is set out in the prospectus of the Company. Communication with Shareholders The Company is an OEIC and the shareholders invest in its range of Funds in order to, inter alia, gain exposure to the expertise of the Investment Manager and its investment strategies. Given the nature of the Company, it is not necessary or desirable for the Chairman or any of the other Directors to discuss investment strategy with shareholders. Furthermore, the Manager has appointed the Investment Manager as distributor and it is these entities which are tasked with actively managing the relationship between the Company and its shareholders. The ARC and the Board receive reports from the Investment Manager’s compliance function which include updates on shareholder communications including shareholder complaints. The Board is responsible for convening the annual general meeting (the “AGM”) and all other general meetings of the Company. All shareholders have the opportunity to attend and vote at general meetings. Notice of general meetings is issued in accordance with the Companies Acts and the Articles of Association of the Company and notice of the annual general meeting is sent out at least 20 business days in advance of the meeting and any item not of an entirely routine nature is explained in a covering circular. All substantive matters put before a general meeting are dealt with by way of separate resolution. Proxy voting figures are noted by the chairman of the general meeting and the results of each general meeting will be announced and made available on the iShares website shortly after the meeting.

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iShares plc Annual Report 21

Corporate Governance Statement (continued) Communication with Shareholders (continued) The proceedings of general meetings are governed by the Articles of Association of the Company and the Companies Acts. Although the Board may convene an extraordinary general meeting of the Company at any time, the Directors are required to convene the AGM within fifteen months of the date of the previous AGM, provided that an AGM is held once in each calendar year and within nine months of the financial year end. Shareholders, representing not less than one-tenth of the paid up share capital of the Company, may also requisition the Board to convene a shareholders’ meeting. General meetings are managed and run by the Company Secretary. However, one of the independent Directors is always available to attend general meetings if required. The Company has not constituted an Audit, Remuneration and Nominations Committees and therefore the provisions of the Code requiring the Chairman of these committees to attend shareholders’ meetings are not relevant to the Company. Two members present, either in person or by proxy, constitutes a quorum at a general meeting provided that the quorum for a general meeting convened to consider any alteration to the class rights of shares is two shareholders holding or representing by proxy at least one third of the issued shares of the relevant Fund or share class. Every holder of participating shares or non-participating shares present in person or by proxy who votes on a show of hands is entitled to one vote. On a poll, every holder of participating shares present in person or by proxy is entitled to one vote in respect of each share held by him and every holder of non-participating shares is entitled to one vote in respect of all non-participating shares held by him. The chairman of a general meeting or at least five members present in person or by proxy or any holder or holders of shares present in person or by proxy representing at least one tenth of the shares in issue having the right to vote at such meeting may demand a poll. Role of the Board of Directors The Directors control the affairs of the Company and are responsible for the overall investment policy which will be determined by them and provided to the Manager. The Directors have delegated certain duties and responsibilities to the Manager with regards to the day-to-day management of the Company. The Manager The Company has appointed BlackRock Asset Management Ireland Limited (“BAMIL”) as its Manager pursuant to the Management Agreement. Under the terms of the Management Agreement, the Manager has responsibility for the management and administration of the Company’s affairs and the distribution of the shares, subject to the overall supervision and control of the Directors. Results and Dividends The results and dividends for the year are set out in the income statement on page 61. Significant events since the year end The significant events which have occurred since the balance sheet date are set out in note 20 of the notes to the financial statements to the Company. Directors The Directors who served during the year are shown on page 3. William Roberts (Chairman), (British nationality, Irish resident): Mr Roberts was admitted as a lawyer in Scotland, Hong Kong, Bermuda and the Cayman Islands. From 1990 to 1999, he was Senior Assistant (1990-1994) and then Partner (1994-1999) with W.S. Walker & Company where he concentrated on collective investment vehicle formation and provided ongoing vehicle advice with particular focus on hedge and private equity funds. From 1996 to 1999 he served as a Director of the Cayman Islands Stock Exchange. Between 1998 and 2000, he was Secretary to the International Bar Associations' sub-committee on specialised investment funds. Currently Mr Roberts serves as a Director to several investment companies and investment management companies domiciled in Ireland.

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Corporate Governance Statement (continued) Directors (continued) John Donohoe (Irish): Mr Donohoe is CEO and Principal of Carne Global Financial Services Limited, a leading Funds Governance specialist within the global asset management industry. He has over twenty years experience in the financial services industry holding senior positions with Deutsche Bank (a Managing Director), State Street and KPMG. He has served as an executive/non-executive Director on various Deutsche Bank boards, including Deutsche International (Ireland) Limited, Morgan Grenfell & Co Limited (Deutsche's UK investment bank), Deutsche Trustees (UK) Limited and The WM Company Limited. Mr Donohoe spent 12 years with Deutsche Bank, where he rose to become CEO, Europe, Asia and Offshore, Deutsche Global Fund Services. Prior to establishing Carne, Mr Donohoe was a Senior Vice-President of State Street. Mr Donohoe qualified as a Chartered Accountant with KPMG. He is a Fellow of the Institute of Chartered Accountants and holds a First Class Honours Degree in Accounting & Finance from Dublin City University. Nicholas C.D. Hall (British): Mr Hall was, until he retired in May 2009, General Counsel of BlackRock International (previously known as Merrill Lynch Investment Managers International) based in London which position he held from his appointment in August 1998. He joined the Group in 1983. He was educated at St. Catharine's College, Cambridge graduating with a MA (Law) degree in 1975. He qualified as a solicitor in England and Wales in 1978 and in Hong Kong in 1987. He is a non-executive Director of BlackRock Investment Management (UK) Limited, BlackRock Advisors (UK) Limited, BlackRock International Limited, BlackRock Life Limited, Chairman of the Board of BlackRock Global Funds and serves on the Boards of a number of other BlackRock entities and sponsored funds. Liam Miley (Irish): Mr Miley joined BlackRock in January 2012 and is a Managing Director within the Financial Markets Advisory Group EMEA region, with a focus on BlackRock's business in Ireland. Prior to joining BlackRock, Mr Miley served with LBBW Asset Management (Ireland) plc for 12 years, initially as Head of Credit, and since 2002 as Managing Director. LBBWI, which was a MiFID authorised firm, was involved in the provision of investment management, risk analytics, valuations and administration services to funds and conduit structures. Prior to joining LBBWI Mr Miley held a variety of positions with Industrial Credit Corporation, Barclays Bank-BZW and Smurfit Paribas Bank over a period of 18 years. He is a Certified Accountant, a graduate of the Advanced Management Program of Harvard Business School and holds both a Certificate and Diploma in Company Direction from the Institute of Directors. Desmond Murray (Irish): Mr Murray is a company Director and business consultant based in Dublin. Mr Murray was educated at University College, Dublin, graduating with a Bachelor of Commerce degree in 1976. He is a Fellow of the Irish Institute of Chartered Accountants and the Hong Kong Society of Accountants. Mr Murray was an Audit Partner in PricewaterhouseCoopers Hong Kong from 1987 until June 2000, initially specialising in Financial Services, and he was the lead Partner of the firm's Internal Audit and Corporate Governance practice until the same date. Mr Murray previously worked with Price Waterhouse in Dublin from 1976 to 1984. Mr Murray is a Director of a number of other Irish and Jersey resident investment funds. He is also a Director of a number of Irish domiciled companies and two Hong Kong listed companies in which he acts as chairman of their audit committees and as an independent non-executive Director. Barry O’Dwyer (Irish): Mr O’Dwyer is a Managing Director of BlackRock and is responsible for oversight of Corporate Governance for BlackRock’s European open-ended Fund range. He is the Chief Operations Officer for BlackRock's Irish Business and serves as a Director on a number of BlackRock Corporate, Fund, Management and Life Companies in Ireland, Luxembourg, UK and Germany. He joined BlackRock Advisors (UK) Limited in 1999 as head of risk management and moved to his present role in 2006. Prior to joining the Investment Manager, Mr O’Dwyer worked as risk manager at Gartmore Investment Management and at HypoVereinsbank and National Westminster Bank. Mr O’Dwyer graduated from Trinity College Dublin with a degree in Business Studies and Economics in 1991. He holds a Chartered Association of Certified Accountants qualification and an MBA from City University Business School. Dominic Pegler (British): Mr Pegler is a Managing Director of BlackRock and a member of the Product Strategy Team within the Model-Based Fixed Income Portfolio Management Group. He leads the product strategy effort in EMEA and plays a leadership role in product strategy for Asia (ex-Japan) and Australia. Mr Pegler's service with the firm dates back to 2005, including his years with Barclays Global Investors (BGI), which merged with BlackRock in 2009. At BGI, he was the Co-Head of Global Fixed Income Strategy and was responsible for the fixed income team's relationships with clients, client Directors and consultants. He also designed new investment strategies. Prior to joining BGI, Mr Pegler was a fixed income product specialist at JP Morgan Investment Management and UBS Global Asset Management. Mr Pegler began his career as an economist and portfolio manager at the Bank of England. Mr Pegler holds BSc and MSc degrees in economics from the London School of Economics and an MSc degree in finance from London Business School.

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iShares plc Annual Report 23

Corporate Governance Statement (continued) Directors (continued) Geoffrey D. Radcliffe (British nationality, Luxembourg resident): Mr Radcliffe is a Managing Director of BlackRock and is based in Luxembourg. He is an Associate of The Institute of Chartered Accountants in England & Wales and an Associate of The Chartered Institute of Bankers. Mr Radcliffe has 30 years of banking, accounting and fund experience in the Isle of Man, London, Bermuda and Luxembourg. Mr Radcliffe joined the BlackRock Group in 1998. He is responsible for BlackRock EMEA and Asia Pacific Fund Administration and is also a Director of a number of BlackRock funds and group companies. Mark Stockley (British): Mr Stockley is a Managing Director of BlackRock. He joined the BlackRock Group in 2005 and is currently Head of International Cash Sales. He has 23 years of experience in the financial services industry and has held senior positions with major industry participants in London, Luxembourg and Hong Kong. He was previously the Treasurer and Deputy Chairman of the Institutional Money Market Funds Association and has attended executive development programs run by the International Institute for Management Development and Wharton University of Pennsylvania. Directors’ and Company Secretary’s Interests and Transactions The Directors and Company Secretary had no interest in the shares of the Company during the year ended 29 February 2012, other than those disclosed below. Dominic Pegler held the following redeemable participating shares; 12,260 in iShares FTSE 100; 7,524 in iShares FTSE 250; 13,937 in iShares FTSE UK Dividend Plus; and 633 in iShares Markit iBoxx £ Corporate Bond during the year. All shares were sold off on 20 December 2011. Mark Stockley held the following redeemable participating shares; 994 in iShares FTSE 250; 545 in iShares MSCI AC Far East ex-Japan; and 380 in iShares MSCI Europe ex-UK at the period. All shares were sold off subsequent to the year end on 2 March 2012. Barry O'Dwyer, Geoffrey D. Radcliffe, Dominic Pegler and Mark Stockley are Directors of the Company and also employees of the BlackRock Group. Nicholas C.D. Hall is a Director of the Company and also a non-executive Director of the Investment Manager. As at 29 February 2012, the Directors of the Company are also Directors of the Manager and also serve on the Boards of a number of BlackRock funds. No Director had at any time during the year, a material interest in any contract of significance, during or at the end of the year in relation to the business of the Company. Review of Business and Future Developments A review of market activities and market outlook can be found in the Investment Manager’s report on pages 7 to 13. Risk Management Objectives and Policies Please refer to the ‘Financial instruments and risks' on pages 32 to 60. Independent Auditors The auditors, PricewaterhouseCoopers, will be re-appointed in accordance with Section 160(2) of the Companies Acts, 1963. On behalf of the Board of Directors

____________________ Desmond Murray Director

_________________________ John Donohoe Director

Date: 27 June 2012

Date: 27 June 2012

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We have enquired into the conduct of iShares plc (‘the Company’) for the year ended 29 February 2012, in our capacity as Custodian to the Company. This report including the opinion has been prepared for and solely for the shareholders in the Company as a body, in accordance with the Central Bank’s UCITS Notice 4, 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. Responsibilities of the Custodian Our duties and responsibilities are outlined in the Central Bank’s UCITS Notice 4. One of those duties is to enquire into the conduct of the Company in each annual accounting period and report thereon to the shareholders. Our report shall state whether, in our opinion, the Company has been managed in that period in accordance with the provisions of the Company’s Memorandum and Articles of Association and the UCITS Regulations. It is the overall responsibility of the Company to comply with these provisions. If the Company has not so complied, we as Custodian must state why this is the case and outline the steps which we have taken to rectify the situation. Basis of Custodian opinion The Custodian conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its duties as outlined in UCITS Notice 4 and to ensure that, in all material respects, the Company has been managed: (i)

In accordance with the limitations imposed on its investment and borrowing powers by the provisions of its constitutional documentation and the appropriate Regulations; and

(ii)

Otherwise in accordance with the Company’s constitutional documentation and the appropriate Regulations.

Opinion In our opinion, the Company has been managed during the year, in all material respects: (i)

In accordance with the limitations imposed on the investment and borrowing powers of the Company by the Memorandum & Articles of Association and by the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, and

(ii)

Otherwise in accordance with the provisions of the Memorandum & Articles of Association and the Regulations.

For and on behalf of

__________________ State Street Custodial Services (Ireland) Limited 78 Sir John Rogerson’s Quay Dublin 2 Ireland Date: 27 June 2012

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iShares plc Annual Report 25

We have audited the Company’s and Funds' financial statements for the year ended 29 February 2012 which comprise the income statement, the statement of changes in net assets attributable to redeemable participating shareholders, the balance sheet, the schedule of investments and the related 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 Acts, 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 2009 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011. 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 is not disclosed and, where practicable, include such information in our report. We review whether the Corporate Governance Statement reflects the Company’s compliance with the nine provisions of the UK Corporate Governance Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control procedures. 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 and Funds' 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.

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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 as at 29 February 2012 and of their results for the year then ended; and • have been properly prepared in accordance with the Companies Acts, 1963 to 2009 and the European Communities (Undertakings For Collective Investment In Transferable Securities) Regulations, 2011. 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.

Marie O'Connor for and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm Dublin 27 June 2012

The financial statements are published at www.ishares.com. The Directors together with the Manager and Investment Manager are responsible for the maintenance and integrity of the website as far as it relates to iShares funds. The work carried out by the auditors does not involve consideration of the maintenance and integrity of the website and accordingly, the auditors accept no responsibility for any changes that have occurred to the financial statements presented on the website. Legislation in the Republic of Ireland governing the presentation and dissemination of the financial statements may differ from legislation in other jurisdictions.

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iShares plc Annual Report 27

The financial statements are prepared in accordance with accounting standards generally accepted in Ireland and Irish statute comprising the Companies Acts, 1963 to 2009 and the provisions of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011. Accounting standards generally accepted in Ireland in preparing financial statements which present a true and fair view are those published by Chartered Accountants Ireland (the “Institute”) and issued by the Accounting Standards Board. The financial statements are prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities held at fair value through profit or loss. The preparation of the financial statements in accordance with Irish Generally Accepted Accounting Policies (“Irish GAAP”) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amount of income and expenses during the period. Actual results could differ from those estimates. Details of any critical accounting estimates and judgements are set out in section b) on page 29. The information required by Financial Reporting Standard (“FRS”) 3, "Reporting Financial Performance", to be included in a statement of total recognised gains and losses and reconciliation of movements in shareholders' funds, is, in the opinion of the Directors, contained in the income statement on page 61 and the statement of changes in net assets attributable to redeemable participating shareholders on page 61. The Company has availed of the exemption available to open-ended investment funds under FRS 1 (revised) and is not presenting a cash flow statement.

Recognition/derecognition of investments Purchases and sales of investments are accounted for on the date the trade transaction takes place. Investments are derecognised when the rights to receive cashflows from the investments have expired or the risks and rewards of ownership have all been substantially transferred. Realised gains and losses on disposals are calculated using the average cost method and are reflected as net gains/(losses) on financial assets/liabilities at fair value through profit or loss in the income statement. Initial measurement of investments Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value. Gains and losses arising from changes in the fair value of the financial assets or financial liabilities are presented in the income statement in the period in which they arise. Transaction costs on purchases and sales of investments are included in the net gains/(losses) on investments in the income statement Valuation of investments The estimation of fair value, after initial recognition, is determined as follows: i) Listed investments Investments which are quoted, listed, traded or dealt on a market or exchange are based on quoted prices which, for the purpose of the financial statements, is the closing bid-market price for financial assets and the closing ask market price for financial liabilities, as at the year end date, on the relevant market or exchange which is normally the principal market or exchange for such investments. ii) Futures contracts

All references to net assets throughout this document refer to net assets attributable to redeemable participating shareholders unless otherwise stated. The significant accounting policies adopted by the Company are: a)

Investments

Classification of investments The Company classifies its investments as financial assets at fair value through profit or loss. The category of financial assets through profit or loss comprises financial instruments designated by the Investment Manager, at inception, as being at fair value through profit or loss. 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 documented investment strategy.

A futures contract is a contract, traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price. Initial margin deposits are made to the relevant brokers upon entering into future contracts and are generally made in margin cash. The cash balances held as margin at the reporting date are included in current assets/liabilities in the balance sheet. The changes in value of open futures contracts are recognised as unrealised gains or losses by marking-to-market the value of the contract at the balance sheet date. Changes in the futures contracts’ value are settled daily with the exchange by paying or receiving a variation margin amount. Changes in unrealised gains or losses are recognised in the income statement. When the contract is closed, the difference between the proceeds from (or cost of) the closing transactions and the original transaction is recorded as a realised gain or loss in the income statement.

* The accounting policies are an integral part of the notes to the financial statements. 28 iShares plc Annual Report

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b)

Critical accounting estimates and judgements

e)

Distributions

The preparation of financial statements in conformity with Irish GAAP requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The estimates and associated judgements are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Dividend expenses are accounted for as finance costs. The Directors may declare distributions on the shares of each Fund in respect of each financial period. Dividends will normally be declared quarterly or such other times as the Directors deems appropriate.

Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the actual results.

f)

c)

Income

i) Dividend income Dividend income is recognised when the securities are declared exdividend. UK franked investment income is shown net of any tax credits. Dividend income is shown gross of any non-reclaimable withholding tax, which is disclosed separately in the income statement. Dividends receivable in relation to securities on loan are 'manufactured dividends' under UK and Irish tax legislation, and no withholding tax is deducted from such receipts. ii) Bond income Bond interest income is accrued on a daily basis using the effective yield method. iii) Bank interest income Bank interest income is recognised as income on an effective yield basis. iv) Amortisation/accretion of premium/discounts on purchase of interest-bearing investments Premiums or discounts on the purchase of fixed and variable interest rate investments are amortised over the life of the investment on an effective yield basis. v) Securities lending income Securities lending income is earned from lending securities owned by the Fund to a number of third-party borrowers. Securities lending income is accounted for on an accruals basis. d)

Fees and expenses

Expenses are accounted for on an accruals basis with the exception of transaction charges relating to the acquisition and realisation of investments which are charged as incurred. Bank interest expense is accrued on a daily basis using the effective yield method.

With the exception of iShares Barclays Capital Euro Inflation Linked Bond Fund, all Funds are distributing. As of 29 February 2012, all of the Funds have adopted UK Reporting Fund Status. Redeemable participating shares

Subscriptions and redemptions are accounted for on the day the trade transaction takes place. Redeemable participating shares are redeemable at the option of the shareholders and are classified as financial liabilities. Any distributions on these shares are recognised in the income statement as finance costs. The redeemable participating shares can be redeemed for cash equal to a proportionate share of the NAV. The redeemable participating share is valued at the redemption amount that is payable at the balance sheet date if the shareholder exercised their right to put the shares back to the Company. The fair value of the financial liabilities for the redeemable participating shares is the redemption amount per share, calculated as the NAV per share less any associated duties and charges and any redemption fee which is payable on the shares redeemed. Any potential duties and charges are at the discretion of the Board of Directors. g)

Foreign currency

i) Functional and presentation currency The presentation currency of the Company's financial statements is British Pounds, foreign currency items included in the Funds' financial statements are measured in the Funds' functional currency which is shown on the table below. The presentation currency of the Funds' financial statements is the same as the functional currency. Fund iShares AEX iShares Barclays Capital Euro Government Bond 1-3 iShares Barclays Capital Euro Inflation Linked Bond iShares Barclays Capital $ Treasury Bond 1-3 iShares DJ Asia/Pacific Select Dividend 30 iShares EURO STOXX Mid iShares EURO STOXX Select Dividend 30 iShares EURO STOXX Small iShares EURO STOXX Total Market Growth Large

Currency € € € $ $ € € € €

* The accounting policies are an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 29

g)

Foreign currency (continued)

i)

i) Functional and presentation currency (continued) Fund iShares EURO STOXX Total Market Value Large iShares FTSE 100 iShares FTSE 250 iShares FTSE China 25 iShares FTSE UK Dividend Plus iShares FTSE/EPRA European Property Index Fund iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares Markit iBoxx Euro Corporate Bond iShares Markit iBoxx Euro High Yield Bond iShares Markit iBoxx £ Corporate Bond iShares Markit iBoxx £ Corporate Bond 1-5 iShares Markit iBoxx $ Corporate Bond 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

Currency € £ £ $ £ € € € € € £ £ $ $ $ $ $ € $ $ $ $ $ $

ii) Transactions and balances Transactions in foreign currencies are translated into the functional currency of each Fund at the foreign currency exchange rate in effect at the date of the transaction. Subscriptions and redemptions of shares in foreign currencies are translated at the foreign currency exchange rate in effect at the date of the transaction. Foreign currency assets and liabilities, including investments, are translated at the exchange rate prevailing at period end. The foreign exchange gain or loss based on the translation of the investments, as well as the gain or loss arising on the translation of other assets and liabilities, is included in gains or losses in the income statement. h)

Receivables

Receivables are recognised initially at fair value plus transaction costs that are directly attributable to their acquisition origination. They are subsequently measured at amortised cost using the effective interest method less provision for impairment. The carrying amount of receivables approximates to their fair value.

Payables

Payables are recognised initially at fair value and subsequently stated at amortised cost. The difference between proceeds and the amount payable is recognised over the period of the payable using the effective interest method. The carrying amount of payables approximates to their fair values. j)

Cash and cash equivalents

Cash and cash equivalents may include deposits held on call with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are classified as liabilities. k)

Adjustment to align to the valuation methodology as set out in the prospectus

The accounting policy of the Company, for the purpose of compliance with FRS 26, is to value its investments at the relevant fair value at the balance sheet date. Fair value is considered to be the relevant closing bid market price on the balance sheet date. Any difference between the valuation methodology stated in the financial statements and the valuation methodology indicated in the prospectus results in an adjustment between the net assets as per the financial statements and the dealing net asset value. Net assets attributable to redeemable participating shareholders represent a liability on the balance sheet, and are reflected at the redemption amount that would be payable at the balance sheet date, if the shareholder exercised their right to redeem shares in the Funds. The redemption amount is based on the number of shares in issue at the balance sheet date multiplied by the price per share. Consequently, the differences described above adjust the carrying amount of the net assets attributable to shareholders and the cumulative differences are included in “Adjustment to align to the valuation methodology as set out in the prospectus” on the balance sheet. Further details are set out in note 9 to the financial statements of the Company. l)

Equalisation on distributions

Equalisation arrangements are applied in the case of shares in the Company. These arrangements are intended to ensure that the income distribution per share is not affected by changes in the number of shares in issue during the period. To ensure that each shareholder receives the same rate of distribution per share, the buying price of each share contains an amount called equalisation. This is equivalent to the net of distributable income less expenses accrued in the Company at the time of purchase/sale.

* The accounting policies are an integral part of the notes to the financial statements. 30 iShares plc Annual Report

www.iShares.com

l)

Equalisation on distributions (continued)

As part of the distribution payment, the average amount of this equalisation is returned to shareholders who subscribed to or redeemed from the Company during the period. The equalisation element of the distribution is treated as a repayment of capital. For tax and accounting purposes, the Manager implements income and equalisation arrangements, to ensure that the level of income derived from investments is not affected by the issue, conversion or redemption of units during the accounting period. Equalisation income and/or expense amounts are included in note 6 in the notes to the financial statements of the Company. m)

Comparative period

Certain prior year figures have been reclassified to correspond to current year presentation.

* The accounting policies are an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 31

The Company's investment activities expose it to the various types of risk which are associated with the financial instruments and markets in which it invests. The following information is not intended to be a comprehensive summary of all risks and investors should refer to the prospectus and supplements for a more detailed discussion of the risks inherent in investing in the Company.

The Company is exposed to market price risk arising from its investments in equities, warrants, rights, corporate bonds, government bonds, ETFs and futures contracts. The movements in the prices of these investments result in movements in the performance of the Company. The investment concentrations within the portfolio are disclosed in the schedules of investments by investment type.

The Directors of the Company review quarterly investment performance reports and receive semi-annual presentations in person from the Investment Manager, which covers the Company’s performance and risk profile during the period. The Directors have delegated the day-to-day administration of the investment programme to the Investment Manager. The Investment Manager is also responsible for ensuring that the Company is managed within the terms of its investment guidelines and limits set out in the prospectus and supplements. The Board reserves to itself the investment performance and product risk monitoring and oversight and delegates to the Audit and Risk Committee (previously the Operations and Risk Committee) responsibility for the monitoring and oversight of regulatory and operational risk for the Company. On 21 April 2011 the Operations and Risk Committee and Financial Accounts and Review Committee amalgamated to create the Audit and Risk Committee. The Audit and Risk Committee includes at least two Directors of the Company and provides reports to the Directors of the Company on a monthly basis. The Directors have delegated the responsibility of the daily risk management to key management personnel of the Investment Manager.

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 is to provide investors with a total return, taking into account the capital and income returns, which reflect the total returns of the respective benchmark. The Fund’s performance is correlated to its benchmark. The correlation of the Funds’ performance against the benchmark is a metric monitored by key management personnel.

a)

Market risk

Market risk arises mainly from uncertainty about future values of financial instruments influenced by other price, currency and interest rate movements. It represents the potential loss the Company may suffer through holding market positions in the face of market movements. The Company is exposed to market risk by virtue of its investments in equities, warrants, rights, corporate bonds, government bonds, ETFs and futures contracts.

The sensitivity analysis for the Funds noted on the next page, assumes a change in the market price of the Funds while holding all other variables constant. In practice all other variables are unlikely to remain constant, and changes in some of the variables may be correlated. In 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 increase/(decrease) in the benchmark is based on the movement for the year ended 29 February 2012 and the period from 12 June 2010 to 28 February 2011. These movements may be different from the long-term volatility of the indices. As reflected in the table on the next page, the changes in the indices at 29 February 2012 and 28 February 2011, with all other variables held constant, would have resulted in an estimated increase/(decrease) in the net assets attributable to the shareholders. These estimated percentages do not constitute performance forecasts and actual performance results may vary.

There is no assurance that each index will continue to be calculated on the basis described in the prospectus or that they will not be amended significantly. The past performance of each index is not necessarily a guide to future performance. i)

Market risk arising from other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting similar financial instruments traded in the market.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 32 iShares plc Annual Report

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i)

Market risk arising from other price risk (continued) 2012

2011

Benchmark Movement (%)

Increase/ (decrease) in net assets ('000)

(9.08)

(€18,267)

15.04

€39,519

4.55

€26,088

(0.40)

(€2,977)

iShares Barclays Capital Euro Inflation Linked Bond

4.55

€24,271

(0.44)

(€3,170)

iShares Barclays Capital $ Treasury Bond 1-3

1.51

$11,089

0.91

$5,152

12.54

$37,463

25.92

$79,129

Sensitivity analysis: other price risk iShares AEX iShares Barclays Capital Euro Government Bond 1-3

iShares DJ Asia/Pacific Select Dividend 30

Benchmark Movement (%)

Increase/ (decrease) in net assets ('000)

iShares EURO STOXX Mid

(13.55)

(€18,949)

17.90

€29,615

iShares EURO STOXX Select Dividend 30

(13.07)

(€45,523)

14.27

€70,437

iShares EURO STOXX Small

(11.61)

(€25,612)

19.28

€59,558

(5.00)

(€2,382)

16.52

€17,304

(17.53)

(€6,867)

14.08

€8,776

1.63

£56,676

18.12

£674,587

iShares EURO STOXX Total Market Growth Large iShares EURO STOXX Total Market Value Large iShares FTSE 100 iShares FTSE 250

1.42

£7,328

22.03

£113,523

iShares FTSE China 25

(1.26)

($13,434)

8.82

$94,269

iShares FTSE UK Dividend Plus

(0.31)

(£1,535)

17.10

£94,870

iShares FTSE/EPRA European Property Index Fund

(10.85)

(€44,977)

27.50

€155,458

iShares FTSEurofirst 80

(12.68)

(€5,163)

15.76

€9,372

iShares FTSEurofirst 100

(5.78)

(€3,165)

15.51

€12,870

7.08

€228,223

0.91

€30,459

iShares Markit iBoxx Euro Corporate Bond iShares Markit iBoxx Euro High Yield Bond iShares Markit iBoxx £ Corporate Bond

4.92

€50,505

5.74

€32,251

10.95

£121,020

3.98

£43,140

iShares Markit iBoxx £ Corporate Bond 1-5*

3.37

£4,282

N/A

N/A

iShares Markit iBoxx $ Corporate Bond

9.79

$115,982

7.59

$64,213

iShares MSCI AC Far East ex-Japan iShares MSCI Brazil iShares MSCI Eastern Europe 10/40

2.98

$63,432

23.19

$454,935

(3.80)

($37,299)

18.09

$204,035

(11.00)

($40,891)

40.46

$217,799

iShares MSCI Emerging Markets

(0.11)

($7,302)

22.36

$1,453,206

iShares MSCI Europe ex-UK

(8.60)

(€43,849)

15.96

€105,594

iShares MSCI Japan

(10.16)

($207,527)

24.68

$567,455

iShares MSCI Korea

6.06

$37,284

30.04

$169,623

iShares MSCI North America

3.07

$65,529

23.74

$454,157

iShares MSCI Taiwan

(1.60)

($5,871)

32.37

$140,401

iShares MSCI World

(1.69)

($59,965)

26.49

$976,684

4.45

$449,614

22.80

$2,134,387

iShares S&P 500 * Fund launched on 30 March 2011.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 33

ii) Market risk arising from foreign currency risk Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

adverse effect on the value of the portion of the Company’s assets which are denominated in currencies other than its own currency. The Funds, in line with their benchmarks, are unhedged and are therefore exposed to foreign currency risk.

The Company may invest in securities denominated in currencies other than its reporting currency. Consequently, the Company is exposed to risks that the exchange rate of its reporting currency relative to other currencies may change in a manner which has an The tables below outline the foreign currency risk based on the fair value exposure as at 29 February 2012 and 28 February 2011. 29 February 2012

Foreign currency exposure iShares AEX USD Total exposure to foreign currencies Base currency: EUR Net asset value iShares DJ Asia/Pacific Select Dividend 30 AUD GBP HKD JPY NZD SGD Total exposure to foreign currencies Base currency: USD Net asset value iShares EURO STOXX Total Market Value Large USD Total exposure to foreign currencies Base currency: EUR Net asset value iShares FTSE 100 USD Total exposure to foreign currencies Base currency: GBP Net asset value

Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

€’000 474 474 212 686

€’000 200,533 200,533

€’000 474 474 200,745 201,219

€’000 -

€’000 474 474 200,745 201,219

$’000 2,713 4 760 300 307 618 4,702 (3,108) 1,594

$’000 128,460 71,915 18,229 29,406 48,670 296,680 296,680

$’000 131,173 4 72,675 18,529 29,713 49,288 301,382 (3,108) 298,274

$’000 -

$’000 131,173 4 72,675 18,529 29,713 49,288 301,382 (3,108) 298,274

€’000 6 6 35 41

€’000 39,114 39,114

€’000 6 6 39,149 39,155

€’000 -

€’000 6 6 39,149 39,155

£’000 7,345 7,345 17,186 24,531

£’000 3,461,371 3,461,371

£’000 7,345 7,345 3,478,557 3,485,902

£’000 -

£’000 7,345 7,345 3,478,557 3,485,902

** 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.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 34 iShares plc Annual Report

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ii) Market risk arising from foreign currency risk (continued) 29 February 2012 Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

iShares FTSE 250 EUR USD Total exposure to foreign currencies Base currency: GBP Net asset value

£’000 (3) (11) (14) 205 191

£’000 349 1,076 1,425 512,619 514,044

£’000 346 1,065 1,411 512,824 514,235

£’000 -

£’000 346 1,065 1,411 512,824 514,235

iShares FTSE China 25 GBP HKD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 3 1,383 1,386 (1,071) 315

$’000 1,060,104 1,060,104 1,060,104

$’000 3 1,061,487 1,061,490 (1,071) 1,060,419

$’000 -

$’000 3 1,061,487 1,061,490 (1,071) 1,060,419

iShares FTSE UK Dividend Plus USD Total exposure to foreign currencies Base currency: GBP Net asset value

£’000 198 198 1,507 1,705

£’000 486,429 486,429

£’000 198 198 487,936 488,134

£’000 -

£’000 198 198 487,936 488,134

iShares FTSE/EPRA European Property Index Fund CHF SEK Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 4 4 46 50

€’000 56,798 46,735 103,533 310,580 414,113

€’000 56,798 46,739 103,537 310,626 414,163

€’000 -

€’000 56,798 46,739 103,537 310,626 414,163

iShares FTSEurofirst 80 USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 58 58 189 247

€’000 40,448 40,448

€’000 58 58 40,637 40,695

€’000 -

€’000 58 58 40,637 40,695

iShares FTSEurofirst 100 GBP USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 115 69 184 200 384

€’000 23,643 23,643 30,768 54,411

€’000 23,758 69 23,827 30,968 54,795

€’000 -

€’000 23,758 69 23,827 30,968 54,795

Foreign currency exposure

** 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.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 35

ii) Market risk arising from foreign currency risk (continued) 29 February 2012 Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

iShares Markit iBoxx Euro Corporate Bond USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 1 1 3,213,716 3,213,717

€’000 -

€’000 1 1 3,213,716 3,213,717

€’000 -

€’000 1 1 3,213,716 3,213,717

iShares Markit iBoxx Euro High Yield Bond USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 1 1 1,026,527 1,026,528

€’000 -

€’000 1 1 1,026,527 1,026,528

€’000 -

€’000 1 1 1,026,527 1,026,528

iShares Markit iBoxx £ Corporate Bond USD Total exposure to foreign currencies Base currency: GBP Net asset value

£’000 3 3 1,099,642 1,099,645

£’000 -

£’000 3 3 1,099,642 1,099,645

£’000 -

£’000 3 3 1,099,642 1,099,645

iShares MSCI AC Far East ex-Japan GBP HKD IDR KRW MYR PHP SGD THB TWD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 10 300 66 4,469 135 1 219 165 38 5,403 (2,265) 3,138

$’000 849,109 85,569 477,466 100,783 22,013 163,739 65,478 344,890 2,109,047 13,517 2,122,564

$’000 10 849,409 85,635 481,935 100,918 22,014 163,958 65,643 344,928 2,114,450 11,252 2,125,702

$’000 -

$’000 10 849,409 85,635 481,935 100,918 22,014 163,958 65,643 344,928 2,114,450 11,252 2,125,702

iShares MSCI Brazil BRL GBP Total exposure to foreign currencies Base currency: USD Net asset value

$’000 5,602 8 5,610 39 5,649

$’000 974,966 974,966 974,966

$’000 980,568 8 980,576 39 980,615

$’000 -

$’000 980,568 8 980,576 39 980,615

Foreign currency exposure

** 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.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 36 iShares plc Annual Report

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ii) Market risk arising from foreign currency risk (continued) 29 February 2012 Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

iShares MSCI Eastern Europe 10/40 CZK GBP HUF PLN Total exposure to foreign currencies Base currency: USD Net asset value

$’000 3 1 103 107 513 620

$’000 22,863 17,397 69,066 109,326 261,465 370,791

$’000 22,863 3 17,398 69,169 109,433 261,978 371,411

$’000 -

$’000 22,863 3 17,398 69,169 109,433 261,978 371,411

iShares MSCI Emerging Markets BRL CZK EGP EUR GBP HKD HUF IDR KRW MXN MYR PHP PLN THB TRY TWD ZAR Total exposure to foreign currencies Base currency: USD Net asset value

$’000 4,220 (54) 386 (4) 32 (2) (43) (225) 7,477 (49) 216 66 (20) 181 1 (897) (645) 10,640 (4,534) 6,106

$’000 973,505 40,424 34,225 2,776 1,139,574 31,013 178,774 921,296 279,475 216,188 44,044 65,661 129,177 87,231 684,321 499,218 5,326,902 1,063,626 6,390,528

$’000 977,725 40,370 34,611 2,772 32 1,139,572 30,970 178,549 928,773 279,426 216,404 44,110 65,641 129,358 87,232 683,424 498,573 5,337,542 1,059,092 6,396,634

$’000 -

$’000 977,725 40,370 34,611 2,772 32 1,139,572 30,970 178,549 928,773 279,426 216,404 44,110 65,641 129,358 87,232 683,424 498,573 5,337,542 1,059,092 6,396,634

iShares MSCI Europe ex-UK CHF DKK NOK SEK USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 581 (31) 108 (25) 23 656 300 956

€’000 101,254 13,770 12,150 39,605 166,779 342,144 508,923

€’000 101,835 13,739 12,258 39,580 23 167,435 342,444 509,879

€’000 -

€’000 101,835 13,739 12,258 39,580 23 167,435 342,444 509,879

iShares MSCI Japan JPY Total exposure to foreign currencies Base currency: USD Net asset value

$’000 (5,046) (5,046) 5,547 501

$’000 2,038,855 2,038,855 2,038,855

$’000 2,033,809 2,033,809 5,547 2,039,356

$’000 -

$’000 2,033,809 2,033,809 5,547 2,039,356

Foreign currency exposure

** 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. * The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 37

ii) Market risk arising from foreign currency risk (continued) 29 February 2012 Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

iShares MSCI Korea KRW Total exposure to foreign currencies Base currency: USD Net asset value

$’000 4,928 4,928 (4,620) 308

$’000 612,538 612,538 1,613 614,151

$’000 617,466 617,466 (3,007) 614,459

$’000 -

$’000 617,466 617,466 (3,007) 614,459

iShares MSCI North America CAD GBP Total exposure to foreign currencies Base currency: USD Net asset value

$’000 265 6 271 3,104 3,375

$’000 192,136 192,136 1,939,894 2,132,030

$’000 192,401 6 192,407 1,942,998 2,135,405

$’000 -

$’000 192,401 6 192,407 1,942,998 2,135,405

iShares MSCI Taiwan GBP TWD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 3 (84) (81) 782 701

$’000 364,559 364,559 364,559

$’000 3 364,475 364,478 782 365,260

$’000 -

$’000 3 364,475 364,478 782 365,260

iShares MSCI World AUD CAD CHF DKK EUR GBP HKD ILS JPY NOK NZD SEK SGD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 (318) 227 (338) (257) (1,647) 2,479 (294) 235 540 (103) 1,277 (120) 1,681 1,994 3,675

$’000 129,473 183,060 128,667 19,012 423,237 341,455 44,835 9,699 322,753 15,562 524 47,610 26,584 1,692,471 1,841,621 3,534,092

$’000 129,155 183,287 128,329 18,755 421,590 343,934 44,541 9,934 323,293 15,459 524 48,887 26,464 1,694,152 1,843,615 3,537,767

$’000 -

$’000 129,155 183,287 128,329 18,755 421,590 343,934 44,541 9,934 323,293 15,459 524 48,887 26,464 1,694,152 1,843,615 3,537,767

iShares S&P 500 GBP Total exposure to foreign currencies Base currency: USD Net asset value

$’000 28 28 25,553 25,581

$’000 10,075,177 10,075,177

$’000 28 28 10,100,730 10,100,758

$’000 -

$’000 28 28 10,100,730 10,100,758

Foreign currency exposure

** 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. * The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 38 iShares plc Annual Report

www.iShares.com

ii) Market risk arising from foreign currency risk (continued) The following Funds had no foreign currency exposure for the year ended 29 February 2012 as all assets and liabilities of the Fund were held in the functional currency: iShares Barclays Capital Euro Government Bond 1-3, iShares Barclays Capital Euro Inflation Linked

Bond, iShares Barclays Capital $ Treasury Bond 1-3, iShares EURO STOXX Mid, iShares EURO STOXX Select Dividend 30, iShares EURO STOXX Small, iShares EURO STOXX Total Market Growth Large, iShares Markit iBoxx £ Corporate Bond 1-5, iShares Markit iBoxx $ Corporate Bond.

28 February 2011 Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

iShares DJ Asia/Pacific Select Dividend 30 AUD HKD JPY NZD SGD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 1,491 111 166 304 109 2,181 650 2,831

$’000 157,315 37,245 28,048 27,770 51,582 301,960 301,960

$’000 158,806 37,356 28,214 28,074 51,691 304,141 650 304,791

$’000 -

$’000 158,806 37,356 28,214 28,074 51,691 304,141 650 304,791

iShares EURO STOXX Mid USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 13 13 (12) 1

€’000 165,332 165,332

€’000 13 13 165,320 165,333

€’000 -

€’000 13 13 165,320 165,333

iShares FTSE 100 EUR USD Total exposure to foreign currencies Base currency: GBP Net asset value

£’000 2,328 79 2,407 15,932 18,339

£’000 3,705,001 3,705,001

£’000 2,328 79 2,407 3,720,933 3,723,340

£’000 -

£’000 2,328 79 2,407 3,720,933 3,723,340

iShares FTSE 250 EUR USD Total exposure to foreign currencies Base currency: GBP Net asset value

£’000 (3) 19 16 671 687

£’000 463 1,075 1,538 512,882 514,420

£’000 460 1,094 1,554 513,553 515,107

£’000 -

£’000 460 1,094 1,554 513,553 515,107

iShares FTSE China 25 HKD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 (17) (17) (2,324) (2,341)

$’000 1,069,351 1,069,351 1,069,351

$’000 1,069,334 1,069,334 (2,324) 1,067,010

$’000 -

$’000 1,069,334 1,069,334 (2,324) 1,067,010

Foreign currency exposure

** 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.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 39

ii) Market risk arising from foreign currency risk (continued) 28 February 2011 Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

iShares FTSE UK Dividend Plus USD Total exposure to foreign currencies Base currency: GBP Net asset value

£’000 213 213 660 873

£’000 553,663 553,663

£’000 213 213 554,323 554,536

£’000 -

£’000 213 213 554,323 554,536

iShares FTSE/EPRA European Property Index Fund CHF SEK Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 (6) (2) (8) 211 203

€’000 56,621 65,705 122,326 442,068 564,394

€’000 56,615 65,703 122,318 442,279 564,597

€’000 -

€’000 56,615 65,703 122,318 442,279 564,597

iShares FTSEurofirst 80 USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 53 53 249 302

€’000 59,166 59,166

€’000 53 53 59,415 59,468

€’000 -

€’000 53 53 59,415 59,468

iShares FTSEurofirst 100 GBP USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 109 65 174 306 480

€’000 33,214 33,214 49,305 82,519

€’000 33,323 65 33,388 49,611 82,999

€’000 -

€’000 33,323 65 33,388 49,611 82,999

iShares MSCI AC Far East ex-Japan HKD IDR INR KRW MYR PHP SGD THB TWD

$’000 (5,423) (1,608) 1,498 6,337 7 73 95 (286) 693 (1,643) (950)

$’000 803,156 71,799 420,670 89,088 13,951 151,734 52,174 342,580 1,945,152 14,917 1,960,069

$’000 797,733 70,191 1,498 427,007 89,095 13,951 151,807 52,269 342,294 1,945,845 13,274 1,959,119

$’000 -

$’000 797,733 70,191 1,498 427,007 89,095 13,951 151,807 52,269 342,294 1,945,845 13,274 1,959,119

Foreign currency exposure

Total exposure to foreign currencies Base currency: USD Net asset value

** 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.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 40 iShares plc Annual Report

www.iShares.com

ii) Market risk arising from foreign currency risk (continued) 28 February 2011 Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

iShares MSCI Brazil BRL Total exposure to foreign currencies Base currency: USD Net asset value

$’000 3,475 3,475 (3,282) 193

$’000 1,124,271 1,124,271 1,124,271

$’000 1,127,746 1,127,746 (3,282) 1,124,464

$’000 -

$’000 1,127,746 1,127,746 (3,282) 1,124,464

iShares MSCI Eastern Europe 10/40 CZK EUR HUF PLN Total exposure to foreign currencies Base currency: USD Net asset value

$’000 5 (1) 6 10 39 49

$’000 26,784 46,035 32,122 102,391 207,332 330,130 537,462

$’000 26,784 46,040 32,121 102,397 207,342 330,169 537,511

$’000 -

$’000 26,784 46,040 32,121 102,397 207,342 330,169 537,511

iShares MSCI Emerging Markets BRL CZK EGP EUR HKD HUF IDR KRW MXN MYR PHP PLN THB TRY TWD ZAR Total exposure to foreign currencies Base currency: USD Net asset value

$’000 3,061 2 396 11 2,986 998 (271) 7,842 64 311 49 6 2,381 3 4,745 472 23,056 (1,282) 21,774

$’000 1,040,751 44,869 33,120 62,941 1,122,075 41,262 152,810 863,268 304,207 204,051 28,353 87,091 108,981 89,620 724,557 499,668 5,407,624 1,060,227 6,467,851

$’000 1,043,812 44,871 33,516 62,952 1,125,061 42,260 152,539 871,110 304,271 204,362 28,402 87,097 111,362 89,623 729,302 500,140 5,430,680 1,058,945 6,489,625

$’000 -

$’000 1,043,812 44,871 33,516 62,952 1,125,061 42,260 152,539 871,110 304,271 204,362 28,402 87,097 111,362 89,623 729,302 500,140 5,430,680 1,058,945 6,489,625

iShares MSCI Europe ex-UK CHF DKK NOK SEK USD Total exposure to foreign currencies Base currency: EUR Net asset value

€’000 356 (471) (60) 538 5 368 63 431

€’000 119,439 15,903 13,824 47,589 196,755 463,985 660,740

€’000 119,795 15,432 13,764 48,127 5 197,123 464,048 661,171

€’000 -

€’000 119,795 15,432 13,764 48,127 5 197,123 464,048 661,171

Foreign currency exposure

** 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.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 41

ii) Market risk arising from foreign currency risk (continued) 28 February 2011 Monetary** exposure

Non-monetary*** exposure

Gross foreign currency exposure

Forward currency contracts at portfolio level

Net foreign currency exposure

iShares MSCI Japan GBP JPY Total exposure to foreign currencies Base currency: USD Net asset value

$’000 2 3,089 3,091 (1,208) 1,883

$’000 2,293,579 2,293,579 2,293,579

$’000 2 2,296,668 2,296,670 (1,208) 2,295,462

$’000 -

$’000 2 2,296,668 2,296,670 (1,208) 2,295,462

iShares MSCI Korea KRW Total exposure to foreign currencies Base currency: USD Net asset value

$’000 2,494 2,494 (1,527) 967

$’000 557,076 557,076 6,245 563,321

$’000 559,570 559,570 4,718 564,288

$’000 -

$’000 559,570 559,570 4,718 564,288

iShares MSCI North America CAD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 159 159 2,839 2,998

$’000 190,037 190,037 1,720,083 1,910,120

$’000 190,196 190,196 1,722,922 1,913,118

$’000 -

$’000 190,196 190,196 1,722,922 1,913,118

iShares MSCI Taiwan TWD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 239 239 (1,014) (775)

$’000 434,196 434,196 434,196

$’000 434,435 434,435 (1,014) 433,421

$’000 -

$’000 434,435 434,435 (1,014) 433,421

iShares MSCI World AUD CAD CHF DKK EUR GBP HKD ILS JPY NOK SEK SGD Total exposure to foreign currencies Base currency: USD Net asset value

$’000 924 202 (1,755) 4 3,682 986 38 (816) 269 7 3,541 2,185 5,726

$’000 142,364 203,945 131,191 20,541 504,655 361,500 45,230 9,531 367,735 14,376 51,642 24,035 1,876,745 1,805,623 3,682,368

$’000 143,288 204,147 129,436 20,545 508,337 362,486 45,230 9,569 366,919 14,645 51,642 24,042 1,880,286 1,807,808 3,688,094

$’000 -

$’000 143,288 204,147 129,436 20,545 508,337 362,486 45,230 9,569 366,919 14,645 51,642 24,042 1,880,286 1,807,808 3,688,094

Foreign currency exposure

** 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.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 42 iShares plc Annual Report

www.iShares.com

ii) Market risk arising from foreign currency risk (continued) The following Funds had no foreign currency exposure for the period ended 28 February 2011 as all assets and liabilities of the fund were held in the functional currency: iShares AEX, iShares Barclays Capital Euro Government Bond 1-3, iShares Barclays Capital Euro Inflation Linked Bond, iShares Barclays Capital $ Treasury Bond 1-3, iShares EURO STOXX Select Dividend 30, iShares EURO STOXX Small, iShares EURO STOXX Total Market Growth Large, iShares EURO STOXX Total Market Value Large, iShares Markit iBoxx Euro Corporate Bond, iShares Markit iBoxx Euro High Yield Bond, iShares Markit iBoxx £ Corporate Bond, iShares Markit iBoxx $ Corporate Bond and iShares S&P 500. The table below details the sensitivity of the Company to changes in foreign exchange rates. The analysis below is based on a change in foreign exchange rates, assuming that all other variables remain constant. In practice this is unlikely to occur and changes in some of the assumptions may be correlated. As the 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. A weakening of the individual functional currency of the respective Funds against all other currencies would have resulted in an equal and opposite effect on the financial statements, assuming 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 currency movements as expressed as a percentage to each Fund’s functional currency are considered ‘reasonably possible’ over a twelve month period. These estimated percentage changes do not constitute a performance forecast and actual performance results may vary.

Currency

%

2012 €’000

iShares AEX

USD

5%

24

-

-

iShares EURO STOXX Mid

USD

-

-

5%

1

USD**

5%

-

-

-

iShares FTSE/EPRA European Property Index Fund

CHF SEK

5% 5%

2,840 2,337

5% 5%

2,831 3,285

iShares FTSEurofirst 80

USD

5%

3

5%

3

iShares FTSEurofirst 100

GBP USD

5% 5%

1,188 3

5% 5%

1,666 3

Sensitivity analysis: foreign currency risk (EUR)

iShares EURO STOXX Total Market Value Large

%

2011 €’000

iShares Markit iBoxx Euro Corporate Bond

USD**

5%

-

-

-

iShares Markit iBoxx Euro High Yield Bond

USD**

5%

-

-

-

CHF DKK NOK SEK USD**

5% 5% 5% 5% 5%

5,092 687 613 1,979 1

5% 5% 5% 5% 5%

5,990 772 688 2,406 -

Currency

%

2012 £’000

%

2011 £’000

EUR USD

5%

367

5% 5%

116 4

iShares MSCI Europe ex-UK

Sensitivity analysis: foreign currency risk (GBP) iShares FTSE 100 ** Amounts which are less than €500 are rounded to zero.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 43

ii) Market risk arising from foreign currency risk (continued) Currency

%

2012 £’000

%

2011 £’000

iShares FTSE 250

EUR USD

5% 5%

17 53

5% 5%

23 55

iShares FTSE UK Dividend Plus

USD

5%

10

5%

11

iShares Markit iBoxx £ Corporate Bond

USD***

5%

-

-

-

%

2012 $’000

%

2011 $’000

Sensitivity analysis: foreign currency risk (GBP)

Sensitivity analysis: foreign currency risk (USD)

Currency

iShares DJ Asia/Pacific Select Dividend 30

AUD GBP** HKD JPY NZD SGD

5% 5% 5% 5% 5% 5%

6,559 3,634 926 1,486 2,464

5% 5% 5% 5% 5%

7,940 1,868 1,411 1,404 2,585

iShares FTSE China 25

GBP** HKD

5% 5%

53,074

5%

53,467

iShares MSCI AC Far East ex-Japan

GBP HKD IDR INR KRW MYR PHP SGD THB TWD

5% 5% 8% 12% 8% 5% 5% 7% 7%

1 42,470 6,851 57,832 8,073 1,101 8,198 4,595 24,145

5% 6% 8% 12% 10% 10% 5% 11% 11%

39,887 4,211 113 51,241 8,910 1,395 7,590 5,750 37,652

iShares MSCI Brazil

BRL GBP**

19% 5%

186,308 -

12% -

135,330 -

iShares MSCI Eastern Europe 10/40

CZK EUR** GBP** HUF PLN

21% 5% 5% 29% 25%

4,801 5,045 17,292

21% 5% 20% 21%

5,625 2,302 6,424 21,503

** Amounts which are less than $500 are rounded to zero. *** Amounts which are less than £500 are rounded to zero.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 44 iShares plc Annual Report

www.iShares.com

ii) Market risk arising from foreign currency risk (continued) Sensitivity analysis: foreign currency risk (USD) iShares MSCI Emerging Markets

iShares MSCI Japan

Currency

2012 %

BRL CZK EGP EUR GBP HKD HUF IDR KRW MXN MYR PHP PLN THB TRY TWD ZAR GBP** JPY

$’000

2011 %

$’000

19% 21% 5% 5% 5% 5% 29% 8% 12% 19% 8% 5% 25% 7% 21% 7% 23%

185,768 8,478 1,731 139 2 56,979 8,981 14,284 111,453 53,091 17,312 2,206 16,410 9,055 18,319 47,840 114,672

12% 21% 5% 5% 5% 20% 6% 12% 9% 10% 10% 21% 11% 13% 11% 17%

125,257 9,423 1,676 3,148 56,253 8,452 9,152 104,533 27,384 20,436 2,840 18,290 12,250 11,651 80,223 85,024

5% 5%

101,690

5% 5%

114,833

12%

74,096

12%

67,148

iShares MSCI Korea

KRW

iShares MSCI North America

CAD GBP**

5% 5%

9,620 -

5% -

9,510 -

iShares MSCI Taiwan

GBP** TWD

5% 7%

25,513

11%

47,788

iShares MSCI World

AUD CAD CHF DKK EUR GBP HKD ILS JPY NOK NZD SEK SGD

5% 5% 5% 5% 5% 5% 5% 13% 5% 5% 5% 5% 5%

6,458 9,164 6,416 938 21,080 17,197 2,227 1,291 16,165 773 26 2,444 1,323

5% 5% 5% 5% 5% 5% 5% 9% 5% 5% -5% 5%

7,164 10,207 6,472 1,027 25,417 18,124 2,262 861 18,346 732 2,582 1,202

iShares S&P 500

GBP

5%

1

-

-

** Amounts which are less than $500 are rounded to zero.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 45

iii) Market risk arising from interest rate risk

ETFs. The securities exposed to interest rate risk are detailed on the schedules of investments.

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Movements in the prices of these investments are derived from movements in market 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 of investment grade from a ratings agency as set out in the investment policy of the Funds.

The Funds, as listed in the table below and on the following pages, are exposed to interest rate risk through their cash holdings including margin cash held with brokers and 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 Funds that invest in ETFs have an indirect exposure to those investments that are held by the

The following tables outline the exposure to significant interest rate risk as at 29 February 2012 and 28 February 2011: 29 February 2012 Exposure to interest rate risk

Floating interest rate

Fixed interest rate

Non–interest bearing

Total

iShares Barclays Capital Euro Government Bond 1-3 Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

€’000 338 338

€’000 567,308 567,308

€’000 69,345 (63,977) 5,368

€’000 69,683 567,308 (63,977) 573,014

iShares Barclays Capital Euro Inflation Linked Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

€’000 376 376

€’000 525,702 525,702

€’000 6,077 (114) 5,963

€’000 6,453 525,702 (114) 532,041

iShares Barclays Capital $ Treasury Bond 1-3 Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

$’000 643 643

$’000 734,430 734,430

$’000 52,590 (51,596) 994

$’000 53,233 734,430 (51,596) 736,067

iShares Markit iBoxx Euro Corporate Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

€’000 81,614 81,614

€’000 103,698 2,986,724 3,090,422

€’000 128,746 (87,065) 41,681

€’000 314,058 2,986,724 (87,065) 3,213,717

iShares Markit iBoxx Euro High Yield Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

€’000 2,829 55,175 58,004

€’000 32,179 911,642 943,821

€’000 59,517 (34,814) 24,703

€’000 94,525 966,817 (34,814) 1,026,528

** Less than one year. *** Greater than one year. * The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 46 iShares plc Annual Report

www.iShares.com

iii) Market risk arising from interest rate risk (continued) 29 February 2012 Exposure to interest rate risk

Floating interest rate

Fixed interest rate

Non–interest bearing

Total

iShares Markit iBoxx £ Corporate Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

£’000 21,136 17,105 38,241

£’000 1,017,083 1,017,083

£’000 86,816 (42,495) 44,321

£’000 107,952 1,034,188 (42,495) 1,099,645

iShares Markit iBoxx £ Corporate Bond1-5 Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

£’000 1,678 30,325 32,003

£’000 91,203 91,203

£’000 10,907 (7,628) 3,279

£’000 12,585 121,528 (7,628) 126,485

iShares Markit iBoxx $ Corporate Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

$’000 19,522 17,532 37,054

$’000 5,633 1,116,652 1,122,285

$’000 104,621 (79,355) 25,266

$’000 129,776 1,134,184 (79,355) 1,184,605

Floating interest rate

Fixed interest rate

Non–interest bearing

Total

iShares Barclays Capital Euro Government Bond 1-3 Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

€’000 5,243 5,243

€’000 740,416 740,416

€’000 51,694 (53,508) (1,814)

€’000 56,937 740,416 (53,508) 743,845

iShares Barclays Capital Euro Inflation Linked Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

€’000 4,255 4,255

€’000 704,332 704,332

€’000 8,405 (3,761) 4,644

€’000 12,660 704,332 (3,761) 713,231

iShares Barclays Capital $ Treasury Bond 1-3 Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

$’000 2,740 2,740

$’000 562,986 562,986

$’000 53,648 (54,513) (865)

$’000 56,388 562,986 (54,513) 564,861

28 February 2011 Exposure to interest rate risk

** Less than one year. *** Greater than one year * The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 47

iii) Market risk arising from interest rate risk (continued) 28 February 2011 Exposure to interest rate risk

Floating interest rate

Fixed interest rate

Non–interest bearing

Total

iShares Markit iBoxx Euro Corporate Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

€’000 89,097 89,097

€’000 88,496 3,187,921 3,276,417

€’000 82,706 (90,220) (7,514)

€’000 260,299 3,187,921 (90,220) 3,358,000

iShares Markit iBoxx Euro High Yield Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

€’000 36,758 26,023 62,781

€’000 17,637 501,942 519,579

€’000 12,191 (32,691) (20,500)

€’000 66,586 527,965 (32,691) 561,860

iShares Markit iBoxx £ Corporate Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

£’000 17,327 87,880 105,207

£’000 955,659 955,659

£’000 42,676 (23,999) 18,677

£’000 60,003 1,043,539 (23,999) 1,079,543

iShares Markit iBoxx $ Corporate Bond Short term financial assets** Long term financial assets*** Short term financial liabilities** Long term financial liabilities*** Net asset value

$’000 10,755 10,755

$’000 832,096 832,096

$’000 44,733 (41,361) 3,372

$’000 55,488 832,096 (41,361) 846,223

** Less than one year. *** Greater than one year.

The following sensitivity analysis 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. 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. Although the movements in interest rates drive the value of the Funds, as listed, the performance of the Funds move in line with the benchmarks.

Management manage the Fund in line with its benchmark index rather than specifically managing interest rate risk. As detailed in the table overleaf a 1% increase in the overall yield of the respective benchmark with all other variables held constant, would have increased the net assets attributable to redeemable participating shareholders and the changes in net assets attributable to redeemable participating shareholders by the following:

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 48 iShares plc Annual Report

www.iShares.com

iii) Market risk arising from interest rate risk (continued) 2012 Increase in net assets

2011 Increase in net assets

('000)

('000)

iShares Barclays Capital Euro Government Bond 1-3 Barclays Capital Euro Government Bond 1-3 Year Term Index

€10,715

€13,167

iShares Barclays Capital Euro Inflation Linked Bond

Barclays Capital Euro Government Inflation-Linked Bond Index

€41,074

€56,218

iShares Barclays Capital $ Treasury Bond 1-3

Barclays Capital US Treasury 1-3 Year Term Index

$14,501

$10,849

Sensitivity analysis: interest rate risk

Benchmark Index

iShares Markit iBoxx Euro Corporate Bond

Markit iBoxx Euro Liquid Corporate Index

€135,297

€122,395

iShares Markit iBoxx Euro High Yield Bond

Markit iBoxx Euro Liquid High Yield Index

€4,311

€11,462

£92,810

£95,983

£3,643

N/A

$79,250

$53,397

iShares Markit iBoxx £ Corporate Bond

Markit iBoxx Sterling Liquid Corporates Long-Dated Bond Index

iShares Markit iBoxx £ Corporate Bond 1-5**

Markit iBoxx £ Corporate 1-5 Index

iShares Markit iBoxx $ Corporate Bond

Markit iBoxx USD Liquid Investment Grade Top 30 Index

** This Fund launched on 30 March 2011. b)

Credit/counterparty risk

Credit risk is the risk that the counterparty to a financial instrument will fail to fulfil an obligation or commitment that it has entered into with the Company. The Company is exposed to a credit risk from the parties with which it trades and will bear the risk of settlement default. Credit risk to the Company arises from its investments in futures contracts, equities, corporate bonds, government bonds, rights, warrants, ETFs (through their underlying holdings) and their cash balances and deposits. Credit risk is monitored and managed by BlackRock's Risk and Quantitative Analysis (RQA) Counterparty and Concentration Risk Team. The team is headed by BlackRock's Chief Credit Officer who reports to the Global Head of RQA. Credit authority resides with the Chief Credit Officer and selected team members to whom specific credit authority has been delegated. As such, credit approvals may be granted by the Chief Credit Officer, or by identified RQA Counterparty Credit Risk Officers who have been formally delegated authority by the Chief Credit Officer as deemed appropriate. All prospective and existing counterparties require the approval of the RQA Counterparty & Concentration Risk Team.

margin and variation with the clearing house to secure these financial instruments. A number of the Funds invest into sovereign and corporate debt. This exposes the Funds to the risk that the issuer of the bonds may default on interest or principal payments. To manage this risk, the Investment Manager invests in a wide range of securities, subject to investment objectives of each Fund and monitors the credit ratings of the investments as disclosed in the schedules of investments. The ratings of the debt securities are continually monitored by the RQA Counterparty & Concentration Risk Team. Analysts within the RQA Counterparty & Concentration Risk Team approve counterparties from whom the Funds may purchase securities and set position limits and maturity limits for each counterparty. The portfolio manager regularly compares the net positions in the Funds to the limits set by the RQA Counterparty & Concentration Risk Team for compliance. All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to meet its obligation.

RQA Counterparty & Concentration Risk completes a formal review of each new counterparty, monitors and reviews all approved counterparties on an ongoing basis and maintains an active oversight of counterparty exposures and the collateral management process.

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 position of the brokers used to further mitigate this risk.

The Company’s holdings in futures contracts expose the Company to credit risk. The Company’s exposure to credit risk is limited to those contracts in which it currently has a net gain position reduced by such margins received in cash from the daily mark-to-market mechanism on exchange-traded futures (variation margin). The exposure is limited by trading the contracts through a clearing house. The Company is required to maintain cash in the form of initial

The Company’s Custodian is State Street Custodial Services (Ireland) Limited (the "Custodian"). Substantially all of the investments are held by same at period end. Investments are segregated from the assets of the Custodian’s, with ownership rights remaining with the Company. Bankruptcy or insolvency of the Custodian may cause the Company’s rights with respect to its investment held by the Custodian to be delayed or limited.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 49

b)

Credit/counterparty risk (continued)

The maximum exposure to this risk is the amount of long investments disclosed in the schedule of investments. The Custodian has appointed State Street Bank and Trust Company (the “Sub-Custodian”) as its global Sub-Custodian. Substantially all of the cash of the Company is held with the Sub-Custodian. In respect of the cash held by the Sub-Custodian the Company will be exposed to the credit risk of the Sub-Custodian. In the event of the insolvency or bankruptcy of the Sub-Custodian, the Company will be treated as a general creditor. The long term credit rating of the parent company of the Custodian and Sub-Custodian, State Street Corporation, as at 29 February 2012, is A1 (28 February 2011: A1) (Moodys' rating). To mitigate the Company's exposure to the Custodian, the Investment Manager employs specific procedures to ensure that the Custodian is a reputable institution and that the credit risk is acceptable to the Company. The Funds' cash balances were held by the Sub-Custodian in its account together with its own cash balances and with those cash balances held on behalf of other clients. The Fund's cash balances were segregated within the records of the SubCustodian. 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. Computershare Investor Services (Ireland) Limited (the “Registrar”) is responsible for making dividend payments to Shareholders on the relevant dividend payment date and it will do so out of the monies held in client asset accounts. While dividend monies are held with the Registrar in the form of cash, the Company will have credit risk exposure to the Registrar and any depositary bank with which the Registrar maintains cash accounts for the benefit of the Company. The Company has sought to mitigate its credit risk exposure to the Registrar in terms of dividend monies by agreeing with the Registrar that the cash accounts held with the Registrar would be operated as client asset accounts in accordance with the requirements of the Central Bank of Ireland and the Registrar’s authorisation under the European Communities (Markets in Financial Instruments) Regulations 2007 (MiFID).

ring-fenced in segregated accounts, cash is usually held by depositary banks on a commingled basis and, in the event of insolvency of a depositary bank, a cash account holder would usually be treated as a general creditor of the depositary bank. The collective investment schemes with which dividend monies may be invested may comprise sub-funds in Institutional Cash Series plc which invest in money market instruments. Institutional Cash Series plc is a BlackRock umbrella fund and open-ended investment company with variable capital incorporated in Ireland and having segregated liability between its sub-funds. Institutional Cash Series plc is authorised as an undertaking for collective investment in transferable securities (UCITS). The Company engages in security lending activities which expose the Funds to credit risk. The maximum exposure to each Fund is equal to the value of the securities loaned in accordance with note 18 of the notes to the financial statements of the Company. To mitigate this risk, the Funds receive securities as collateral (financial instruments) equal to a certain percentage of the value of the securities loaned as disclosed in note 18. The carrying amount of financial assets best represents the Company’s gross maximum exposure to credit risk at the reporting date, before including the effect of ISDA master agreements and close-out netting, which would reduce the overall credit risk exposure. The Company’s futures contracts are governed by ISDA master agreements. ISDA master agreements provide for close-out netting which enables amounts owed under transactions, terminated as a result of an event of default or termination event, to be netted and replaced with a single net amount payable by one party or the other. Cash held as security by the counterparty to derivative contracts is subject to the credit risk of the counterparty. There were no past due or impaired assets as at 29 February 2012 and 28 February 2011.

In order to further mitigate the Company’s credit risk exposure to depositary banks with which dividend monies are held, the Company has put in place arrangements with the Registrar to invest some or all of the dividend monies in money market collective investment schemes (which may include collective investment schemes managed by the Manager and/or its affiliates) during part of the period in which dividend monies are held with the Registrar pending payment to Shareholders. These arrangements include the Registrar holding the units in the money market collective investment schemes for the benefit of the Company on a segregated basis, separate from the Registrar’s own assets. This is because, while securities may be * The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 50 iShares plc Annual Report

www.iShares.com

b)

Credit/counterparty risk (continued)

The following tables detail the credit rating profile of the debt securities held by the Funds as at 29 February 2012 and 28 February 2011. 29 February 2012

Currency

Above AA

Below AA

Total ‘000

iShares Barclays Capital Euro Government Bond 1-3

€

305,169

262,139

567,308

iShares Barclays Capital Euro Inflation Linked Bond

€

363,651

162,051

525,702

iShares Barclays Capital $ Treasury Bond 1-3

$

734,430

-

734,430

iShares Markit iBoxx Euro Corporate Bond

€

1,199,736

1,890,686

3,090,422

iShares Markit iBoxx Euro High Yield Bond

€

-

1,001,733

1,001,733

iShares Markit iBoxx £ Corporate Bond

£

211,186

823,002

1,034,188

iShares Markit iBoxx £ Corporate Bond 1-5**

£

21,015

100,513

121,528

iShares Markit iBoxx $ Corporate Bond

$

310,886

828,931

1,139,817

Currency

Above AA

Below AA

Total ‘000

iShares Barclays Capital Euro Government Bond 1-3

28 February 2011

€

740,416

-

740,416

iShares Barclays Capital Euro Inflation Linked Bond

€

704,332

-

704,332

iShares Barclays Capital $ Treasury Bond 1-3

$

562,986

-

562,986

iShares Markit iBoxx Euro Corporate Bond

€

1,521,035

1,755,382

3,276,417

iShares Markit iBoxx Euro High Yield Bond

€

-

545,602

545,602

iShares Markit iBoxx £ Corporate Bond

£

281,854

761,685

1,043,539

iShares Markit iBoxx $ Corporate Bond

$

275,945

556,151

832,096

** This Fund launched on 30 March 2011.

c)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulties in meeting obligations associated with financial liabilities. Liquidity risk to the Company arises from the redemption requests of investors and the liquidity of the underlying investments the Company is invested in. The Company’s shareholders may redeem their shares on the close of any daily dealing deadline for cash equal to a proportionate share of the Company’s net asset value. The Company is therefore potentially exposed to the liquidity risk of meeting the shareholders’ redemptions and may need to sell assets at prevailing market prices to meet liquidity demands. It is also exposed to the liquidity risk of daily margin calls on derivatives. Liquidity risk is minimised by holding sufficient liquid investments which can be readily realised to meet liquidity demands. To manage this risk 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 pro-rata. 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.

looking cash reports which project cash obligations. These reports allow them to manage their cash obligations. All financial liabilities of the Funds held at the periods ended 29 February 2012 and 28 February 2011 fall due within one month. d)

Valuation of Financial Instruments

FRS 29 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The Company’s accounting policies on fair value measurement are discussed in note a) on page 28. The fair value hierarchy has the following levels: Level 1 – Quoted market price in an active market for an identical instrument. These included active listed equities, exchange traded funds, exchange traded derivatives etc. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis.

The Company’s liquidity risk is managed on a daily basis by the Investment Manager in accordance with established policies and procedures in place. The portfolio managers review daily forward

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 51

d)

Valuation of Financial Instruments (continued)

Level 2 – Valuation techniques used to price securities based on observable inputs. This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. Valuation techniques used for non-standardised financial instruments such as over-the-counter derivatives, include the use of comparable recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on entity-specific inputs. Level 3 – Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs could have a significant impact on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable

adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. The determination of what constitutes observable requires significant judgement by the Investment Manager. The Investment Manager considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The following is an analysis of the Funds’ financial assets and liabilities measured at fair value as at 29 February 2012 and 28 February 2011: 29 February 2012 Level 1

Level 2

Level 3

Total

€‘000

€‘000

€‘000

€‘000

200,533 1 200,534

-

-

200,533 1 200,534

iShares Barclays Capital Euro Government Bond 1-3 Financial assets at fair value through profit or loss - Debt securities Total

€’000

€’000

€’000

€’000

-

567,308 567,308

-

567,308 567,308

iShares Barclays Capital Euro Inflation Linked Bond Financial assets at fair value through profit or loss - Debt securities Total

€’000

€’000

€’000

€’000

-

525,702 525,702

-

525,702 525,702

iShares Barclays Capital $ Treasury Bond 1-3 Financial assets at fair value through profit or loss - Debt securities Total

$‘000

$‘000

$‘000

$‘000

-

734,430 734,430

-

734,430 734,430

iShares DJ Asia/Pacific Select Dividend 30 Financial assets at fair value through profit or loss - Equity securities Total

$‘000

$‘000

$‘000

$‘000

296,680 296,680

-

-

296,680 296,680

iShares AEX Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 52 iShares plc Annual Report

www.iShares.com

d)

Valuation of Financial Instruments (continued)

29 February 2012

iShares EURO STOXX Mid Financial assets at fair value through profit or loss - Equity securities Total iShares EURO STOXX Select Dividend 30 Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares EURO STOXX Small Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares EURO STOXX Total Market Growth Large Financial assets at fair value through profit or loss - Equity securities Total iShares EURO STOXX Total Market Value Large Financial assets at fair value through profit or loss - Equity securities Total iShares FTSE 100 Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares FTSE 250 Financial assets at fair value through profit or loss - Equity securities Total Financial liabilities at fair value through profit or loss: - Futures contracts Total iShares FTSE China 25 Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total

Level 1

Level 2

Level 3

Total

€’000

€’000

€’000

€’000

139,146 139,146

-

-

139,146 139,146

€’000

€’000

€’000

€’000

345,867 1 345,868

-

-

345,867 1 345,868

€’000

€’000

€’000

€’000

220,282 1 220,283

-

-

220,282 1 220,283

€’000

€’000

€’000

€’000

47,640 47,640

-

-

47,640 47,640

€’000

€’000

€’000

€’000

39,114 39,114

-

-

39,114 39,114

£‘000

£‘000

£‘000

£‘000

3,461,371 46 3,461,417

-

-

3,461,371 46 3,461,417

£‘000

£‘000

£‘000

£‘000

514,044 514,044

-

-

514,044 514,044

(4) (4)

-

-

(4) (4)

$‘000

$‘000

$‘000

$‘000

1,060,104 21 1,060,125

-

-

1,060,104 21 1,060,125

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 53

d)

Valuation of Financial Instruments (continued)

29 February 2012 Level 1

Level 2

Level 3

Total

£‘000

£‘000

£‘000

£‘000

486,429 3 486,432

-

-

486,429 3 486,432

€’000

€’000

€’000

€’000

414,113 414,113

-

-

414,113 414,113

€’000

€’000

€’000

€’000

40,448 20 40,468

-

-

40,448 20 40,468

€’000

€’000

€’000

€’000

54,411 13 54,424

-

-

54,411 13 54,424

iShares Markit iBoxx Euro Corporate Bond Financial assets at fair value through profit or loss - Debt securities Total

€’000

€’000

€’000

€’000

-

3,090,422 3,090,422

-

3,090,422 3,090,422

iShares Markit iBoxx Euro High Yield Bond Financial assets at fair value through profit or loss - Debt securities Total

€’000

€’000

€’000

€’000

-

1,001,733 1,001,733

-

1,001,733 1,001,733

iShares Markit iBoxx £ Corporate Bond Financial assets at fair value through profit or loss - Debt securities Total

£‘000

£‘000

£‘000

£‘000

-

1,034,188 1,034,188

-

1,034,188 1,034,188

iShares Markit iBoxx £ Corporate Bond1-5 Financial assets at fair value through profit or loss - Debt securities Total

£‘000

£‘000

£‘000

£‘000

-

121,528 121,528

-

121,528 121,528

iShares Markit iBoxx $ Corporate Bond Financial assets at fair value through profit or loss - Debt securities Total

$‘000

$‘000

$‘000

$‘000

-

1,139,817 1,139,817

-

1,139,817 1,139,817

iShares FTSE UK Dividend Plus Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares FTSE/EPRA European Property Index Fund Financial assets at fair value through profit or loss - Equity securities Total iShares FTSEurofirst 80 Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares FTSEurofirst 100 Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 54 iShares plc Annual Report

www.iShares.com

d)

Valuation of Financial Instruments (continued)

29 February 2012

iShares MSCI AC Far East ex-Japan Financial assets at fair value through profit or loss - Equity securities Total iShares MSCI Brazil Financial assets at fair value through profit or loss - Equity securities Total iShares MSCI Eastern Europe 10/40 Financial assets at fair value through profit or loss - Equity securities Total iShares MSCI Emerging Markets Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares MSCI Europe ex-UK Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares MSCI Japan Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares MSCI Korea Financial assets at fair value through profit or loss - Equity securities Total iShares MSCI North America Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total

Level 1

Level 2

Level 3

Total

$‘000

$‘000

$‘000

$‘000

2,122,564 2,122,564

-

-

2,122,564 2,122,564

$‘000

$‘000

$‘000

$‘000

974,966 974,966

-

-

974,966 974,966

$‘000

$‘000

$‘000

$‘000

370,791 370,791

-

-

370,791 370,791

$‘000

$‘000

$‘000

$‘000

6,390,528 555 6,391,083

-

-

6,390,528 555 6,391,083

€’000

€’000

€’000

€’000

508,923 1 508,924

-

-

508,923 1 508,924

$‘000

$‘000

$‘000

$‘000

2,038,855 90 2,038,945

-

-

2,038,855 90 2,038,945

$‘000

$‘000

$‘000

$‘000

614,151 614,151

-

-

614,151 614,151

$‘000

$‘000

$‘000

$‘000

2,132,030 71 2,132,101

-

-

2,132,030 71 2,132,101

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 55

d)

Valuation of Financial Instruments (continued)

29 February 2012 Level 1

Level 2

Level 3

Total

$‘000

$‘000

$‘000

$‘000

364,559 14 364,573

-

-

364,559 14 364,573

$‘000

$‘000

$‘000

$‘000

3,281,752 252,340 407 3,534,499

-

-

3,281,752 252,340 407 3,534,499

$‘000

$‘000

$‘000

$‘000

10,075,177 630 10,075,807

-

-

10,075,177 630 10,075,807

Level 1

Level 2

Level 3

Total

€‘000

€‘000

€‘000

€‘000

261,833 261,833

-

-

261,833 261,833

(2) (2)

-

-

(2) (2)

iShares Barclays Capital Euro Government Bond 1-3 Financial assets at fair value through profit or loss - Debt securities Total

€’000

€’000

€’000

€’000

-

740,416 740,416

-

740,416 740,416

iShares Barclays Capital Euro Inflation Linked Bond Financial assets at fair value through profit or loss - Debt securities Total

€’000

€’000

€’000

€’000

-

704,332 704,332

-

704,332 704,332

iShares Barclays Capital $ Treasury Bond 1-3 Financial assets at fair value through profit or loss - Debt securities Total

$‘000

$‘000

$‘000

$‘000

-

562,986 562,986

-

562,986 562,986

iShares DJ Asia/Pacific Select Dividend 30 Financial assets at fair value through profit or loss - Equity securities Total

$‘000

$‘000

$‘000

$‘000

301,960 301,960

-

-

301,960 301,960

iShares MSCI Taiwan Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares MSCI World Financial assets at fair value through profit or loss - Equity securities - Exchange traded funds - Futures contracts - Total iShares S&P 500 Financial liabilities at fair value through profit or loss: - Equity securities - Futures contracts Total 28 February 2011

iShares AEX Financial assets at fair value through profit or loss - Equity securities Total Financial liabilities at fair value through profit or loss: - Futures contracts Total

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 56 iShares plc Annual Report

www.iShares.com

d)

Valuation of Financial Instruments (continued)

28 February 2011

iShares EURO STOXX Mid Financial assets at fair value through profit or loss - Equity securities Total iShares EURO STOXX Select Dividend 30 Financial assets at fair value through profit or loss - Equity securities Total iShares EURO STOXX Small Financial assets at fair value through profit or loss - Equity securities - Warrants Total iShares EURO STOXX Total Market Growth Large Financial assets at fair value through profit or loss - Equity securities Total iShares EURO STOXX Total Market Value Large Financial assets at fair value through profit or loss - Equity securities Total iShares FTSE 100 Financial assets at fair value through profit or loss - Equity securities Total Financial liabilities at fair value through profit or loss: - Futures contracts Total iShares FTSE 250 Financial assets at fair value through profit or loss - Equity securities Total iShares FTSE China 25 Financial assets at fair value through profit or loss - Equity securities Total iShares FTSE UK Dividend Plus Financial assets at fair value through profit or loss - Equity securities Total

Level 1

Level 2

Level 3

Total

€’000

€’000

€’000

€’000

165,332 165,332

-

-

165,332 165,332

€’000

€’000

€’000

€’000

493,290 493,290

-

-

493,290 493,290

€’000

€’000

€’000

€’000

308,463 49 308,512

-

-

308,463 49 308,512

€’000

€’000

€’000

€’000

104,626 104,626

-

-

104,626 104,626

€’000

€’000

€’000

€’000

62,358 62,358

-

-

62,358 62,358

£‘000

£‘000

£‘000

£‘000

3,705,001 3,705,001

-

-

3,705,001 3,705,001

(162) (162)

-

-

(162) (162)

£‘000

£‘000

£‘000

£‘000

514,420 514,420

-

-

514,420 514,420

$‘000

$‘000

$‘000

$‘000

1,069,351 1,069,351

-

-

1,069,351 1,069,351

£‘000

£‘000

£‘000

£‘000

553,663 553,663

-

-

553,663 553,663

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 57

d)

Valuation of Financial Instruments (continued)

28 February 2011 Level 1

Level 2

Level 3

Total

€’000

€’000

€’000

€’000

564,394 564,394

-

-

564,394 564,394

€’000

€’000

€’000

€’000

59,166 10 59,176

-

-

59,166 10 59,176

€’000

€’000

€’000

€’000

82,519 8 82,527

-

-

82,519 8 82,527

iShares Markit iBoxx Euro Corporate Bond Financial assets at fair value through profit or loss - Debt securities Total

€’000

€’000

€’000

€’000

-

3,276,417 3,276,417

-

3,276,417 3,276,417

iShares Markit iBoxx Euro High Yield Bond Financial assets at fair value through profit or loss - Debt securities Total

€’000

€’000

€’000

€’000

-

545,602 545,602

-

545,602 545,602

iShares Markit iBoxx £ Corporate Bond Financial assets at fair value through profit or loss - Debt securities Total

£‘000

£‘000

£‘000

£‘000

-

1,043,539 1,043,539

-

1,043,539 1,043,539

iShares Markit iBoxx $ Corporate Bond Financial assets at fair value through profit or loss - Debt securities Total

$‘000

$‘000

$‘000

$‘000

-

832,096 832,096

-

832,096 832,096

iShares MSCI AC Far East ex-Japan Financial assets at fair value through profit or loss - Equity securities - Rights Total

$‘000

$‘000

$‘000

$‘000

1,959,806 1,959,806

263 263

-

1,959,806 263 1,960,069

$‘000

$‘000

$‘000

$‘000

1,124,262 9 1,124,271

-

-

1,124,262 9 1,124,271

iShares FTSE/EPRA European Property Index Fund Financial assets at fair value through profit or loss - Equity securities Total iShares FTSEurofirst 80 Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares FTSEurofirst 100 Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total

iShares MSCI Brazil Financial assets at fair value through profit or loss - Equity securities - Rights Total

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 58 iShares plc Annual Report

www.iShares.com

d)

Valuation of Financial Instruments (continued)

28 February 2011

iShares MSCI Eastern Europe 10/40 Financial assets at fair value through profit or loss - Equity securities Total iShares MSCI Emerging Markets Financial assets at fair value through profit or loss - Equity securities - Rights Total Financial liabilities at fair value through profit or loss: - Futures contracts Total iShares MSCI Europe ex-UK Financial assets at fair value through profit or loss - Equity securities - Rights Total iShares MSCI Japan Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares MSCI Korea Financial assets at fair value through profit or loss - Equity securities Total iShares MSCI North America Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total iShares MSCI Taiwan Financial assets at fair value through profit or loss - Equity securities Total

Level 1

Level 2

Level 3

Total

$‘000

$‘000

$‘000

$‘000

537,462 537,462

-

-

537,462 537,462

$‘000

$‘000

$‘000

$‘000

6,434,734 12 6,434,746

29,472 29,472

3,648 3,648

6,467,854 12 6,467,866

(13) (13)

-

-

(13) (13)

€’000

€’000

€’000

€’000

660,725 660,725

15 15

-

660,725 15 660,740

$‘000

$‘000

$‘000

$‘000

2,293,458 121 2,293,579

-

-

2,293,458 121 2,293,579

$‘000

$‘000

$‘000

$‘000

563,321 563,321

-

-

563,321 563,321

$‘000

$‘000

$‘000

$‘000

1,910,120 45 1,910,165

-

-

1,910,120 45 1,910,165

$‘000

$‘000

$‘000

$‘000

434,196 434,196

-

-

434,196 434,196

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. www.iShares.com

iShares plc Annual Report 59

d)

Valuation of Financial Instruments (continued)

28 February 2011

iShares MSCI World Financial assets at fair value through profit or loss - Equity securities - Rights - Exchange traded funds - Futures contracts Total Financial liabilities at fair value through profit or loss: - Futures contracts Total iShares S&P 500 Financial assets at fair value through profit or loss - Equity securities - Futures contracts Total

Level 1

Level 2

Level 3

Total

$‘000

$‘000

$‘000

$‘000

3,395,935 286,416 72 3,682,423

16 16

-

3,395,935 16 286,416 72 3,682,439

(2) (2)

-

-

(2) (2)

$‘000

$‘000

$‘000

$‘000

9,351,917 79 9,351,996

-

-

9,351,917 79 9,351,996

Investments whose values are based on quoted market prices in active markets and therefore classified within level 1, include active listed equities, exchange traded funds and exchange traded derivatives. The Fund does not adjust the quoted price for these instruments. Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. These include corporate bonds, government bonds, listed equities and over-the-counter derivatives. As level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. Investments whose values are based on unobservable inputs are classified within level 3. These include equities quoted on suspended markets. The Fund has used specific valuation techniques to determine the fair value of these securities. The level 3 equities consist of securities with stale and/or suspended prices. The total market value of level 3 securities is deemed immaterial for the purposes of presenting a level 3 roll forward table.

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements. 60 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Operating income Net (losses)/gains on financial assets/liabilities at fair value through profit or loss

2 3

Year ended 29 February 2012 £’000 1,015,325 (834,951)

Total gains Operating expenses

4

180,374 (141,754)

4,357,638 (93,736)

38,620

4,263,902

(779,775) (289) (780,064)

(436,238) (155) (436,393)

8

(741,444) (53,395)

3,827,509 (31,151)

Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus 9 (Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(794,839) 11,939 (782,900)

3,796,358 (4,432) 3,791,926

Net operating profit Finance costs: Distributions to redeemable participating shareholders Interest expense Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax

6 7

Period ended 28 February 2011* £’000 521,099 3,836,539

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial year/period, all amounts relate to continuing operations. Approved on behalf of the Board of Directors

______________________ Director

______________________ Director

Date: 27 June 2012

Date: 27 June 2012

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Notional foreign exchange adjustment** (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 Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

Year ended 29 February 2012 £’000 31,786,703 450,977 (782,900)

Period ended 28 February 2011* £’000 25,577,143 (1,679,247) 3,791,926

7,741,306 (7,441,448) 299,858

6,785,571 (2,688,690) 4,096,881

31,754,638

31,786,703

* For the period from 12 June 2010 to 28 February 2011. ** The notional foreign exchange adjustment arises from the retranslation of the net assets at the beginning of the period using the exchange rate as at 29 February 2012. The average rate for the year/period is applied to income statement items (See note 16).

The accompanying notes form an integral part of these financial statements . www.iShares.com

iShares plc Annual Report 61

As at 29 February 2012 Notes

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables Financial assets at fair value through profit or loss Total current assets

11 12

CURRENT LIABILITIES Bank overdraft Margin cash account Payables Distributions to redeemable participating shareholders payable Financial liabilities at fair value through profit or loss

13 12

Total current liabiilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemablee participating shareholders at the end of the year/period

9

29 February 2012 £’000

28 February 2011 £’000

122,545 6,729 646,211 31,424,147 32,199,632

245,297 4,358 448,084 31,574,850 32,272,589

(9,796) (2,193) (313,057) (154,860) (4)

(1,845) (189) (372,859) (133,797) (173)

(479,910) 31,719,722

(508,863) 31,763,726

34,916 31,754,638

22,977 31,786,703

The accompanying notes form an integral part of these financial statements.

Approved on behalf of the Board of Directors

______________________ Director

______________________ Director

Date: 27 June 2012

Date: 27 June 2012

62 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES AND FINANCIAL INSTRUMENTS AND RISKS

5.

MANAGEMENT FEES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60.

Fees earned by the Manager during the period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

2.

Management fees (inclusive of investment management fees):

OPERATING INCOME

Deposit interest income Dividend income Bond interest income Securities lending income Other income Management fee rebate*

Year ended 29 February 2012 £’000 489 730,741 270,775 12,226 204 890 1,015,325

Period from 12 June 2010 to 28 February 2011 £’000 7,297 333,143 174,370 5,611 678 521,099

* The management fee rebate is calculated based on the amount invested by MSCI World multiplied by the management fee rate of the underlying Fund.

3.

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Net (losses)/gains on investments in securities held at fair value through profit or loss Net (losses)/gains on futures contracts Net losses on currency

4.

Year ended 29 February 2012 £’000

Period from 12 June 2010 to 28 February 2011 £’000

(814,844)

3,834,658

(17,051) (3,056) (834,951)

3,067 (1,186) 3,836,539

Year ended 29 February 2012 £’000 (141,741) (13) (141,754)

Period from 12 June 2010 to 28 February 2011 £’000 (93,729) (7) (93,736)

OPERATING EXPENSES

Management fees* Dividend payable

The Manager is entitled to an annual fee at rates not exceeding those set out below:

Fund iShares AEX iShares Barclays Capital Euro Government Bond 1-3 iShares Barclays Capital Euro Inflation Linked Bond iShares Barclays Capital $ Treasury Bond 1-3 iShares DJ Asia/Pacific Select Dividend 30 iShares EURO STOXX Mid iShares EURO STOXX Select Dividend 30 iShares EURO STOXX Small iShares EURO STOXX Total Market Growth Large iShares EURO STOXX Total Market Value Large iShares FTSE 100 iShares FTSE 250 iShares FTSE China 25 iShares FTSE UK Dividend Plus iShares FTSE/EPRA European Property Index Fund iShares FTSEurofirst 80 iShares FTSEurofirst 100 iShares Markit iBoxx Euro Corporate Bond iShares Markit iBoxx Euro High Yield Bond iShares Markit iBoxx £ Corporate Bond iShares Markit iBoxx £ Corporate Bond 1-5 iShares Markit iBoxx $ Corporate Bond 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

Maximum fee rate (% of NAV) 0.30 0.20 0.25 0.20 0.59 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.74 0.40 0.40 0.40 0.40 0.20 0.50 0.20 0.20 0.20 0.74 0.74 0.74 0.75 0.40 0.59 0.74 0.40 0.74 0.50 0.40

* Included in expenses are Directors fees of £25,958 (28 February 2011: £17,985) and fees payable to PricewaterhouseCoopers relating to the audit of the Annual accounts of £268,410 (28 February 2011: £274,122) and non audit fees of £4,326 (28 February 2011: £4,246). There were no fees other than the audit and non-audit fees disclosed paid to PricewaterhouseCoopers in Ireland as the Statutory Auditor of the Company as no other services were provided. www.iShares.com

iShares plc Annual Report 63

For the year ended 29 February 2012 5.

MANAGEMENT FEES (continued)

The Company employs an “all in one” fee structure for its Funds, with each Fund paying all of its fees, operating costs and expenses (and its due proportion of any costs and expenses of the Company allocated to it) as a single flat fee (the “Total Expense Ratio” or “TER”). Expenses paid out of the TER include, but are not limited to, fees and expenses paid to the Manager, regulators and auditors and certain legal expenses of the Company, but excludes transaction costs arising on portfolio rebalancing. The Total Expense Ratio is calculated and accrued daily from the current Net Asset Value of each Fund and shall be payable monthly in arrears. The Manager is responsible for discharging all operational expenses, including but not limited to fees and expenses of the Directors, Investment Manager, Custodian, Administrator, Transfer Agent and Registrar from the amounts received by the Manager from the TER. Such operational expenses include regulatory and audit fees. Directors’ fees will not exceed the sum of €40,000 per annum per Director without the approval of the Board of Directors. In the event a Fund’s costs and expenses in connection with the operation of the Fund which are intended to be covered by the TER exceed the stated TER, the Manager will discharge any excess amount out of its own assets. The establishment costs of the Company have been paid by the Manager. Whilst it is anticipated that the TER borne by a Fund shall not exceed the amounts set out above during the life of a Fund, such amounts may need to be increased. Any such increase will be subject to the prior approval of the shareholders of the relevant Fund evidenced either by a majority vote at a meeting of shareholders or by a written resolution of all of the shareholders. Save as disclosed above, no commissions, discounts, brokerages or other special terms have been granted or are payable by the Company in connection with the issue or sale of any shares of the Company. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay dividends on any distributing class of Shares in the Company.

May 2011 June 2011 August 2011 November 2011 January 2012 February 2012 Equalisation income Equalisation expense

7.

June 2010 August 2010 October 2010 November 2010 December 2010 January 2011 February 2011

64 iShares plc Annual Report

Period from 12 June 2010 to 28 February 2011 £’000 8,215 174,360 6,859 129,701 2,971 276 135,641

Year ended 29 February 2012 £’000 (289) (289)

Period from 12 June 2010 to 28 February 2011 £’000 (155) (155)

TAXATION

Under current law and practice, the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997, as amended. On that basis it is not chargeable to Irish tax on its income or gains. However, Irish tax may arise on the occurrence of a "chargeable event". A chargeable event includes any distribution payments to shareholders or any encashment, redemption, cancellation or transfer of shares and the holding of shares at the end of each eight year period beginning with the acquisition of such shares. No Irish tax will arise on the Company in respect of chargeable events in respect of: a)

A shareholder who is neither Irish resident nor ordinarily resident in Ireland for tax purposes, at the time of the chargeable event, provided appropriate valid declarations in accordance with the provisions of the Taxes Consolidation Act, 1997, as amended, are held by the Company; or the Company has been authorised by the Irish Revenue to make gross payments in the absence of appropriate declarations; and

b)

Certain exempted Irish tax resident shareholders who have provided the Company with the necessary signed Annual declarations; and

Distributions declared during the year were as follows: Year ended 29 February 2012 £’000 -

Period from 12 June 2010 to 28 February 2011 £’000 458,023 (28,939) 7,154 436,238

INTEREST EXPENSE

Bank interest

8.

Year ended 29 February 2012 £’000 209,845 13,680 240,536 147,910 9,106 156,769 777,846 (31,558) 33,487 779,775

www.iShares.com

For the year ended 29 February 2012 8. c)

TAXATION (continued)

Authorised

Any transaction (which might otherwise be a chargeable event) in relation to shares held in a recognised clearing system as designated by order of the Irish Revenue Commissioners (such as CREST) will not constitute a chargeable event. It is the current intention of the Directors that all the shares in the Company will be held in CREST or another recognised clearing system.

The authorised share capital of the Company is £30,000 divided into 30,000 subscriber shares of a par value of £1 each and 500 billion participating shares of no par value, initially designated as unclassified shares. Subscriber shares

Dividends, interest and capital gains (if any) received on investments made by the Company may be subject to taxes imposed by the country from which the investment income/gains are received and such taxes may not be recoverable by the Company or its shareholders.

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 this disclosure reflects the nature of the Company's investment business.

9.

11. RECEIVABLES

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the Prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 £’000 22,977

Period from 12 June 2010 to 28 February 2011 £’000 27,409

11,939

(4,432)

11,939 34,916

(4,432) 22,977

Further details are set out in the accounting policies note k) on page 30. 10. SHARE CAPITAL The issued and fully paid redeemable participating share capital is at all times equal to the net asset value of the Company. Redeemable participating shares are redeemable at the shareholders' option and are classified as financial liabilities. Participating shares - issued and fully paid Number of redeemable participating shares Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

www.iShares.com

29 February 2012 No. of Shares

28 February 2011 No. of Shares

2,302,973,606 422,434,559 (421,643,960)

2,051,141,476 396,767,130 (144,935,000)

2,303,764,205

2,302,973,606

Sale of securities awaiting settlement Subscription for shares awaiting settlement Deposit interest receivable Dividend income receivable Securities lending income receivable Bond income receivable Dividend tax reclaim receivable Management fee rebate receivable* Distributions payable held with Registrar** Other receivables

29 February 2012 £’000

28 February 2011 £’000

277,108

227,500

11,160 26 62,770

38,859 40 51,672

1,057 135,740 3,410

524 127,799 1,600

72

78

154,860 8 646,211

12 448,084

* The management fee rebate is calculated based on the amount invested by MSCI World multiplied by the management fee rate of the underlying fund. ** This relates to distribution monies that have been transferred from the Company’s accounts held with its custodian, State Street Custodian Services (Ireland) Limited, to client asset accounts held with its Registrar, Computershare Investor Services (Ireland) Limited (the “Registrar”) to fund distributions payable to holders of redeemable participating shares.

12. FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Investment in bonds Investment in rights Investment in warrants Unrealised gains on futures contracts

29 February 2012 £’000 24,751,962 6,670,986 -

28 February 2011 £’000 25,200,680 6,373,721 197 42

1,199 31,424,147

210 31,574,850

iShares plc Annual Report 65

For the year ended 29 February 2012 12.

FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)

Financial liabilities: Unrealised losses on futures contracts

13.

(173) (173)

29 February 2012 £’000

28 February 2011 £’000

(200,913)

(214,463)

(100,610) (20) (11,486) (28) (313,057)

(147,035) (8) (11,353) (372,859)

PAYABLES

Purchase of securities awaiting settlement Redemption of shares awaiting settlement Interest payable Management fees payable Other payables

14.

(4) (4)

DKK EGP EUR GBP HKD HUF IDR ILS INR JPY KRW MXN MYR NOK NZD PHP PLN RUB SEK SGD THB TRY TWD ZAR

SOFT COMMISSIONS

There were no soft commissions arrangements entered into by the Investment Manager on behalf of the Company during the year ended 29 February 2012 and period ended 28 February 2011. 15.

EXCHANGE RATES

GBP1=

USD1=

CHF DKK GBP NOK SEK USD

29 February 2012 1.2051 7.4346 0.8374 7.4346 8.7963 1.3377

28 February 2011 1.2838 7.4559 0.8492 7.7351 8.7427 1.3812

EUR CHF USD

1.1942 1.4391 1.5974

1.1776 1.5118 1.6265

AUD BRL CAD CHF CLP CZK

0.9255 1.7169 0.9850 0.9009 477.9000 18.6380

0.9820 1.6582 0.9746 0.9295 476.3500 17.6532

66 iShares plc Annual Report

GBP1=

17.

The rates of exchange ruling at the 29 February 2012 and 28 February 2011 were: EUR1=

28 February 2011 5.3981 5.8910 0.7240 0.6148 7.7892 196.0252 8,821.5000 3.6225 45.2650 81.9300 1,128.6500 12.0995 3.0505 5.6003 1.3308 43.5900 2.8702 28.8546 6.3298 1.2709 30.5750 1.6002 29.7470 6.9391

The average rates of exchange for the year ended 29 February 2012 and period ended 28 February 2011 were:

COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011, other than those disclosed in the financial statements of the Funds. 16.

29 February 2012 5.5578 6.0308 0.7476 0.6260 7.7557 215.2277 9,020.0000 3.7763 49.0100 80.9400 1,118.7250 12.7905 2.9955 5.5578 1.1860 42.7550 3.0746 29.2150 6.5757 1.2470 30.2650 1.7460 29.3960 7.4502

EUR USD

29 February 2012 1.1557 1.5987

28 February 2011 1.1820 1.5665

RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability to control the other party or is able to exercise significant influence over the other party, in making financial or operational decisions. The following entities are disclosed as related parties to the Company as at 29 February 2012: Board of Directors of the Company Manager: BlackRock Asset Management Ireland Limited Investment Manager: BlackRock Advisors (UK) Limited Securities Lending Agent: BlackRock Advisors (UK) Limited The ultimate holding Company of the Manager and Investment Manager is BlackRock Inc., a Company incorporated in Delaware USA. PNC Bank N.A. is a substantial voting shareholder in BlackRock Inc. The PNC group did not provide any services to the Company during the year ended 29 February 2012 and period ended 28 February 2011.

www.iShares.com

For the year ended 29 February 2012 17.

RELATED PARTY TRANSACTIONS (continued)

Fees paid to the Manager during the year, and balances outstanding at the year end, are disclosed in notes 4 (operating expenses note) and 13 (payables note) respectively. The Manager is responsible for discharging the fees and expenses of the Directors including the Directors’ fees. Income earned on securities lending is disclosed in note 2. Additional information surrounding the securities lending income can be found in note 18. Barry O’Dwyer, Dominic Pegler, Geoffrey D. Radcliffe and Mark Stockley are Directors of the Company and also employees of the BlackRock Group. Nicholas C.D. Hall is a non-executive Director of the Investment Manager. Mark Stockley held the following redeemable participating shares; 994 in iShares FTSE 250; 545 in iShares MSCI AC Far East ex-Japan; and 380 in iShares MSCI Europe ex-UK at the period. All shares were sold off subsequent to the year end on 2 March 2012. As at 29 February 2012, the Directors of the Company are also Directors of the Manager and also serve on the Boards of a number of BlackRock Funds. The Company invests in the following funds which are also managed by BlackRock Asset Management Ireland Limited/BlackRock Advisors (UK) Limited. The below table shows for each iShares Fund, the percentage holding of the underlying Fund: 29 February 2012: Fund name iShares MCSI World

Underlying Fund iShares MSCI Japan

% of Shares 12.30

Underlying Fund iShares MSCI Japan

% of Shares 12.41

Significant holdings The Company had no shareholders with holdings of voting shares greater than 20% as at 29 February 2012 or 28 February 2011. Investments in BlackRock Inc. and funds managed by BlackRock Asset Management Ireland Limited/BlackRock Advisors (UK) Limited are marked on the relevant Fund’s schedule of investments. 18.

The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 £’000

28 February 2011 £’000

12,226

5,611

3,855,028

1,772,919

4,256,219

1,921,929

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

19.

SIGNIFICANT EVENTS DURING THE YEAR

iShares Markit iBoxx £ Corporate Bond 1-5 launched on 30 March 2011.

28 February 2011: Fund name iShares MCSI World

The Company receives either cash collateral or securities as collateral, for a value in excess of the market value of the securities loaned.

SECURITIES LENDING

Dominic Pegler was appointed as a Director of the Company on 3 June 2011. An addendum to the Prospectus and a related simplified prospectus was issued on 26 September 2011. 20.

SUBSEQUENT EVENTS

An updated prospectus was issued on 1 March 2012. On 25 April 2012, Liam Miley was appointed as a Director of the Company.

During the year the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus.

www.iShares.com

iShares plc Annual Report 67

For the year ended 29 February 2012 20.

SUBSEQUENT EVENTS (continued)

Since May 2012 BlackRock provides the BAMIL funds with 1 indemnification against borrower default. BlackRock’s indemnity provides full replacement of securities lent and is underwritten by BlackRock Inc. The indemnity costs will be borne exclusively by BlackRock. The existing securities lending revenue sharing arrangements in place are not affected by this indemnity. More information on BlackRock’s indemnification commitments can be 2 found in the 10-Q statements . 1

BlackRock’s indemnity currently provides for the satisfaction of borrower’s obligations under a lending agreement. The indemnification does not cover the risks associated with the reinvestment of cash collateral. The indemnification arrangement is subject to change, and in some cases without notice. 2 http://www2.blackrock.com/global/home/InvestorRelations/ SECFilings/index.htm, page 72

The Key Investor Information Documents (KIIDS) are available on the iShares website since 28 May 2012. On 29 May 2012, Dominic Pegler resigned as a Director of the Company. Other than the above, there have been no material events subsequent to the period end, which, in the opinion of the Directors of the Company, may have had a material impact on the financial statements for the year ended 29 February 2012.

68 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

8,495

3,793

Net (losses)/gains on financial assets/liabilities at fair value through profit or loss

3

(32,935)

35,263

(24,440)

39,056

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(737)

(576)

(25,177)

38,480

Finance costs: Distributions to redeemable participating shareholders

6

(7,669)

(2,499)

Interest expense

7

(3)

(1)

(7,672)

(2,500)

(32,849)

35,980

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(300)

(269)

(33,149)

35,711

(47)

3

(33,196)

35,714

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

262,799

264,053

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(33,196)

35,714

158,232

32,667

(186,576)

(69,635)

Decrease in net assets resulting from share transactions

(28,344)

(36,968)

Net assets attributable to holders of redeemable participating shares at the end of the year/period

201,259

262,799

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 69

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

-

113

189

149

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

4,253

935

Financial assets at fair value through profit or loss

12

200,534

261,833

204,9 976

263,030

Total current assets CURRENT LIABILITIES Bank overdraft

(201)

-

13

(3,310)

(61)

Distributions to redeemable participating shareholders payable

6

(246)

(255)

Financial liabilities at fair value through profit or loss

12

-

(2)

(3,7 757)

(318)

201,219

262,712

40

87

201,259

262,799

Payables

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

70 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 €’000 5 7,991 499 8,495

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on futures contracts Net gains/(losses) on currency

4.

Period from 12 June 2010 to 28 February 2011 €’000

(32,384)

35,325

(553)

(59)

2 (32,935)

(3) 35,263

Year ended 29 February 2012 €’000 (737) (737)

Period from 12 June 2010 to 28 February 2011 €’000 (576) (576)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 €’000 3 3,608 182 3,793

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 €’000 1,353 809 255 2,417 (47) 129 2,499

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

Year ended 29 February 2012 €’000 4,027 1,905 949 246 7,127 (768) 1,310 7,669

Bank interest

Year ended 29 February 2012 €’000 (3) (3)

Period from 12 June 2010 to 28 February 2011 €’000 (1) (1)

Please refer to page 63 for each Fund’s management fee rate.

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iShares plc Annual Report 71

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 €’000 87

Period from 12 June 2010 to 28 February 2011 €’000 84

(47)

3

(47) 40

3 87

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

7,100,000 4,700,000 (5,600,000) 6,200,000

8,100,000 1,000,000 (2,000,000) 7,100,000

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 11. RECEIVABLES

Sale of securities awaiting settlement Dividend income receivable Securities lending income receivable Distributions payable held with Registrar*

No. of Shares 6,200,000 7,100,000 8,100,000 €’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

201,259 262,799 264,053

29 February 2012 €’000 3,248 742 17

28 February 2011 €’000 872 63

246 4,253

935

* Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Unrealised gains on futures contracts

29 February 2012 €’000 200,533 1 200,534

28 February 2011 €’000 261,833 261,833

-

(2) (2)

29 February 2012 €’000 (3,259) (51) (3,310)

28 February 2011 €’000 (61) (61)

Financial liabilities: Unrealised losses on futures contracts

13. PAYABLES

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€32.46 €37.01 €32.60

Redemptions awaiting settlement Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

72 iShares plc Annual Report

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For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Fund receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

499

182

36,891

32,916

40,662

36,278

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

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iShares plc Annual Report 73

As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Fair value €'000

% of net asset value

11,352

5.64

9,485

4.71

275

0.14

2,711 142,063

1.35 70.59

United Kingdom Integrated oil & gas 1,333,776 Royal Dutch Shell Plc Com EUR 0.07 Total United Kingdom

36,539 36,539

18.16 18.16

Total equitiees

200,533

99.64

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 329,044 Equities France Airlines 194,689 Air France-KLM Com EUR 1.00 Real estate investment trusts 69,993 Unibail-Rodamco SE Reits EUR 5.00 Total France Luxembourg Iron & steel 35,781 Aperam Com NPV 654,979 ArcelorMittal Com NPV Total Luxembourg

197,755 176,746 131,491 84,327

752,310

289,887 50,071

909,328 1,242,809 1,311,245 2,922,206 552,272 227,855 52,055 128,684 69,424

Netherlands Beverages Heineken NV Com EUR 1.60 Chemicals Akzo Nobel NV Com EUR 2.00 Koninklijke DSM NV Com EUR 1.50 Commercial services Randstad Holding NV Com EUR 0.10 Consumer electronics Koninklijke Philips Electronics NV Com EUR 0.20 Delivery services PostNL NV Com EUR 0.48 Engineering & construction Koninklijke Boskalis Westminster NV Com EUR 0.80 Food retailers and wholesalers Koninklijke Ahold NV Com EUR 0.30 Unilever NV CVS EUR 0.16 Insurance Aegon NV Com EUR 0.12 ING Groep NV CVS EUR 0.24 Media Reed Elsevier NV Com EUR 0.07 Wolters Kluwer NV Com EUR 0.12 Oil equipment & services Fugro NV CVS EUR 0.05 SBM Offshore NV Com EUR 0.25 Real estate investment trusts Corio NV Reits EUR 10.00

74 iShares plc Annual Report

1,165,950 864

0.43

10,149 11,013

5.04 5.47

553 10,365 10,918

0.27 5.15 5.42

76,289 289,887

Netherlands (cont) Semiconductors ASML Holding NV Com EUR 0.09 Telecommunications Koninklijke KPN NV Com EUR 0.24 Telecommunications equipment TomTom NV Com EUR 0.20 Transpo ortation TNT Express NV Com EUR 0.08 Total Netherlands

Financial Derivative Instruments 7,816

3.88

7,519 5,490

3.73 2.73

2,394

1.19

11,849

5.89

Total valuue of investments

1,288

0.64

1,438

0.71

Futures Contracts

9,439 30,983

4.69 15.40

5,152 19,453

2.56 9.67

5,112 3,184

2.54 1.58

2,869 1,753

1.43 0.87

2,501

1.24

No of contracts 11 AEX Index Futures March 2012 Total unrealised gainss on futures contracts

Unrealised % of net gain asset €’000 value 1 0.00 1

0.00

200,534

99.64

Bank overdraft†

(12)

(0.01)

Other net assets

697

0.35

201,219

99.98

Adjustment to align to the valuation methodology as set out in the prospectus

40

0.02

Net asset value attributable to redeemable participating shareh holders at the end of the year

201,259

100.00

Net assets attributable to redeemable participating shareholders

† Substantially all cash positions are held with State Street Bank and Trust Company other than €188,819 held as security by the counterparty for futures contracts.

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As at 29 February 2012 Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

www.iShares.com

Fair value €'000

% of total current assets

200,533

97.83

1 4,442 204,976

0.00 2.17 100.00

iShares plc Annual Report 75

For the year ended 29 February 2012 The 20 largest sales

The 20 largest purchases

Proceeds Holding Investments €‘000 1,392,720 Royal Dutch Shell Plc Com EUR 0.07 36,081 1,122,455 Unilever NV CVS EUR 0.16 26,391 2,639,248 ING Groep NV CVS EUR 0.24 19,899 678,954 Koninklijke Philips Electronics NV Com EUR 0.20 12,002 591,466 ArcelorMittal Com NPV 11,752 1,127,012 Koninklijke KPN NV Com EUR 0.24 11,204 63,172 Unibail-Rodamco SE Reits EUR 5.00 9,374 297,206 ASML Holding NV Com EUR 0.09 8,807 821,451 Koninklijke Ahold NV Com EUR 0.30 7,917 159,659 Akzo Nobel NV Com EUR 2.00 7,197 178,248 Heineken NV Com EUR 1.60 6,766 1,178,887 Aegon NV Com EUR 0.12 5,169 118,233 Koninklijke DSM NV Com EUR 1.50 4,936 497,551 Reed Elsevier NV Com EUR 0.07 4,428 205,507 Wolters Kluwer NV Com EUR 0.12 3,044 62,118 Corio NV Reits EUR 10.00 2,570 261,620 PostNL NV Com EUR 0.48 2,516 46,944 Fugro NV CVS EUR 0.05 2,498 76,081 Randstad Holding NV Com EUR 0.10 2,375 116,130 SBM Offshore NV Com EUR 0.25 1,965

Holding Investments 1,026,632 Royal Dutch Shell Plc Com EUR 0.07 965,374 Unilever NV CVS EUR 0.16 2,268,858 ING Groep NV CVS EUR 0.24 595,617 Koninklijke Philips Electronics NV Com EUR 0.20 510,788 ArcelorMittal Com NPV 893,072 Koninklijke KPN NV Com EUR 0.24 54,600 Unibail-Rodamco SE Reits EUR 5.00 254,850 ASML Holding NV Com EUR 0.09 702,289 Koninklijke Ahold NV Com EUR 0.30 161,735 Heineken NV Com EUR 1.60 136,421 Akzo Nobel NV Com EUR 2.00 1,140,240 Aegon NV Com EUR 0.12 114,020 Koninklijke DSM NV Com EUR 1.50 457,013 Reed Elsevier NV Com EUR 0.07 230,104 PostNL NV Com EUR 0.48 67,262 Corio NV Reits EUR 10.00 183,381 Wolters Kluwer NV Com EUR 0.12 67,559 Randstad Holding NV Com EUR 0.10 41,860 Fugro NV CVS EUR 0.05 101,969 SBM Offshore NV Com EUR 0.25

Cost €‘000 25,489 21,723 18,224 11,628 11,085 9,576 7,984 7,352 6,524 6,010 5,970 5,236 4,631 3,964 3,010 2,985 2,745 2,249 2,243 1,764

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

76 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

14,850

6,781

Net gains/(losses) on financial assets at fair value through profit or loss

3

12,470

(8,919)

27,320

(2,138)

Total gains/(losses) Operating expenses

4

Net operating profit/(loss)

(1,379)

(955)

25,941

(3,093)

Finance costs: Distributions to redeemable participating shareholders

6

(13,274)

(6,014)

Interest expense

7

(1)

-

(13,275)

(6,014)

12,666

(9,107)

101

(383)

12,767

(9,490)

Total finance costs Net profit/(loss) for the financial year/period Adjustment to align to the valuation methodology as set out in the prospectus

8

Increase/(decrease) in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase/(decrease) in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

743,908

548,857

12,767

(9,490)

310,397

443,832

(493,894)

(239,291)

(183,497)

204,541

573,178

743,908

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares (Decrease)/increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period * For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

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iShares plc Annual Report 77

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

CURRENT ASSETS Cash and cash equivalents

338

5,243

Receivables

11

69,345

51,694

Financial assets at fair value through profit or loss

12

567,308

740,416

636,991

797,353

Total current assets CURRENT LIABILITIES Payables

13

(57,886)

(48,798)

Distributions to redeemable participating shareholders payable

6

(6,091)

(4,710)

Total current liabilities

(63,977)

(53,508)

Net asseets attributable to redeemable participating shareholders

573,014

743,845

Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/ /period

8

164

63

573,178

743,908

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

78 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Bond interest income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 6 4 14,624 6,672 220 105 14,850 6,781

NET GAINS/(LOSSES) ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000

Net gains/(losses) on investments in securities held at fair value through profit or loss

4.

(8,919) (8,919)

OPERATING EXPENSES

Management fees

5.

12,470 12,470

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (1,379) (955) (1,379) (955)

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 February 2011 August 2011 February 2012 Equalisation income Equalisation expense

7.

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate.

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Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 1,661 4,710 5,971 6,091 12,062 6,371 (1,542) (909) 2,754 552 13,274 6,014

Bank interest

Year ended 29 February 2012 €’000 (1) (1)

Period from 12 June 2010 to 28 February 2011 €’000 -

iShares plc Annual Report 79

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 63 446

101

(383)

101 164

(383) 63

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

28 February 2011 No. of Shares 4,000,000 3,260,000 (1,760,000) 5,500,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€138.45 €135.26 €137.21

11. RECEIVABLES 29 February 2012 €’000

28 February 2011 €’000

58,009

45,950

-

2,704

23 5,222

14 3,026

6,091 69,345

51,694

Sale of securities awaiting settlement Subscription for shares awaiting settlement Securities lending income receivable Bond income receivable Distributions payable held with Registrar*

* Further details are set out on note 11 page 65.

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 are classified as financial liabilities. 29 February Number of redeemable participating 2012 shares: No. of Shares Balance at the beginning of year/period 5,500,000 Issued during year/period 2,300,000 Redeemed during year/period (3,660,000) Balance at the end of year/period 4,140,000

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

4,140,000 5,500,000 4,000,000

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in bonds

29 February 2012 €’000 567,308 567,308

28 February 2011 €’000 740,416 740,416

29 February 2012 €’000

28 February 2011 €’000

(57,793)

(2,703)

(93) (57,886)

(45,976) (119) (48,798)

13. PAYABLES

Purchase of securities awaiting settlement Redemption of shares awaiting settlement Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES €’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

573,178 743,908 548,857

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

80 iShares plc Annual Report

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For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives securities as collateral, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 €’000

28 February 2011 €’000

220

105

399,487

186,505

439,955

194,506

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

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iShares plc Annual Report 81

As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset valuee

Fair value €'000

% of net asset valuee

338

0.06

5,368

0.94

573,014

99.97

Adjustment to align to the valuation methodology as set out in the prospectus

164

0.03

Net asset value attributable to redeemable participating shareholders at the end of the year

573,178

100.00

Holding Investment Cash†

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

Other net assets Bonds France Government bonds - Aaa rating 50,301,000 French Treasury Note BTAN 2% 25/09/2013 Total France

43,884,000 24,840,000 61,479,000 56,718,000

59,616,000 55,062,000 40,572,000 55,476,000

Germany Government bonds - Aaa rating Bundesschatzanweisungen 0.25% 13/12/2013 Bundesschatzanweisungen 0.25% 14/03/2014 Bundesschatzanweisungen 0.75% 13/09/2013 Bundesschatzanweisungen 1.75% 14/06/2013 Total Germany Italy Government bonds - A3 rating Italy Buoni Poliennali Del Tesoro 2.25% 01/11/2013 Italy Buoni Poliennali Del Tesoro 3% 01/04/2014 Italy Buoni Poliennali Del Tesoro 4.25% 01/07/2014 Italy Buoni Poliennali Del Tesoro 6% 15/11/2014 Total Italy

Net assets attributable to redeemable participatingg shareholders 51,428 51,428

8.97 8.97

43,941

7.67

24,872

4.34

62,030

10.82

57,872 188,715

10.10 32.93

59,735

10.42

55,500

9.68

41,939

7.32

59,886 217,060

10.45 37.87

Netherlands Government bonds - Aaa raating 13,455,000 Netherlands Government Bond 0.75% 15/04/2015 50,922,000 Netherlands Government Bond 1% 15/01/2014 Total Netherlands

13,483

2.35

51,543 65,026

8.99 11.34

Spain Government bonds - A3 rating 44,091,000 Spain Government Bond 3.4% 30/04/2014 Total Spain

45,079 45,079

7.86 7.86

Total bonds

567,308

98.97

Total value of investments

567,308

98.97

82 iShares plc Annual Report

†

Substantially all cash positions are held with State Street Bank and Trust Company.

All credit ratings are shown as at 29 February 2012. Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

% of total current assets

Fair value €’000 567,308 69,683 636,991

89.06 10.94 100.00

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For the year ended 29 February 2012 The 20 largest sales Holding Investments 143,962,000 Italy Buoni Poliennali Del Tesoro 2% 15/12/2012 116,725,000 Netherlands Government Bond 1.75% 15/01/2013 117,437,000 Bundesschatzanweisungen 1% 14/12/2012 111,510,000 Bundesschatzanweisungen 1.5% 15/03/2013 108,220,000 Italy Buoni Poliennali Del Tesoro 2.25% 01/11/2013 98,035,000 Bundesschatzanweisungen 0.5% 15/06/2012 97,508,000 Bundesschatzanweisungen 0.75% 14/09/2012 92,077,000 French Treasury Note BTAN 0.75% 20/09/2012 88,160,000 Italy Buoni Poliennali Del Tesoro 2.5% 01/07/2012 75,881,000 Italy Buoni Poliennali Del Tesoro 2% 01/06/2013 57,673,000 Netherlands Government Bond 1% 15/01/2014 56,320,000 Bundesschatzanweisungen 1.75% 14/06/2013 43,186,000 Spain Government Bond 3.4% 30/04/2014 39,986,000 French Treasury Note BTAN 2% 25/09/2013 40,262,000 Italy Buoni Poliennali Del Tesoro 3% 01/04/2014 34,004,000 Bundesschatzanweisungen 0.75% 13/09/2013 19,779,000 Italy Buoni Poliennali Del Tesoro 4.25% 01/07/2014 9,712,000 Bundesschatzanweisungen 0.25% 13/12/2013 3,446,000 Italy Buoni Poliennali Del Tesoro 6% 15/11/2014 583,000 Netherlands Government Bond 0.75% 15/04/2015

Thee 20 largest purchases Proceeds €‘000 141,470 117,987 117,569 113,197 104,012 96,955 96,634 91,208 88,478 73,585 57,552 57,537 42,514 40,682 38,528 34,285 19,217 9,721 3,591 583

Holding Investments 113,038,000 Bundesschatzanweisungen 1.75% 14/06/2013 111,510,000 Bundesschatzanweisungen 1.5% 15/03/2013 107,170,000 Italy Buoni Poliennali Del Tesoro 2.25% 01/11/2013 95,483,000 Bundesschatzanweisungen 0.75% 13/09/2013 95,324,000 Italy Buoni Poliennali Del Tesoro 3% 01/04/2014 92,370,000 Netherlands Government Bond 1% 15/01/2014 87,803,000 French Treasury Note BTAN 2% 25/09/2013 85,207,000 Spain Government Bond 3.4% 30/04/2014 60,351,000 Italy Buoni Poliennali Del Tesoro 4.25% 01/07/2014 53,596,000 Bundesschatzanweisungen 0.25% 13/12/2013 51,012,000 Italy Buoni Poliennali Del Tesoro 2% 15/12/2012 47,559,000 Italy Buoni Poliennali Del Tesoro 2% 01/06/2013 42,362,000 Italy Buoni Poliennali Del Tesoro 6% 15/11/2014 42,750,000 Netherlands Government Bond 1.75% 15/01/2013 33,837,000 Bundesschatzanweisungen 1% 14/12/2012 14,802,000 French Treasury Note BTAN 0.75% 20/09/2012 11,554,000 Netherlands Government Bond 0.75% 15/04/2015 10,608,000 Bundesschatzanweisungen 0.75% 14/09/2012 4,560,000 Italy Buoni Poliennali Del Tesoro 2.5% 01/07/2012 4,260,000 Bundesschatzanweisungen 0.5% 15/06/2012

Cost €‘000 113,996 111,503 103,872 95,871 93,195 91,439 88,904 84,141 59,281 53,623 50,565 46,045 43,680 43,022 33,543 14,616 11,576 10,486 4,572 4,212

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

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iShares plc Annual Report 83

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

30,838

14,787

Net losses on financial assets at fair value through profit or loss

3

(10,062)

(19,235)

20,776

(4,448)

Total gains/(losses) Operating expenses

(1,804)

(1,257)

Net operating profit/(loss)

18,972

(5,705)

Net profit/(loss) for the financial year/period

18,972

(5,705)

520

334

19,492

(5,371)

Adjustment to align to the valuation methodology as set out in the prospectus

4

7

Increase/(decrease) in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase/(decrease) in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

714,339

667,488

19,492

(5,371)

388,404

106,936

(588,566)

(54,714)

(200,162)

52,222

533,669

714,339

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares (Decrease)/Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period * For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

84 iShares plc Annual Report

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As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

CURRENT ASSETS Cash and cash equivalents

376

4,255

Receivables

10

6,077

8,405

Financial assets at fair value through profit or loss

11

525,702

704,332

532,155

716,992

(114)

(3,761)

(114)

(3,761)

532,041

713,231

1,628

1,108

533,669

714,339

Total current assets CURRENT LIABILITIES Payables

12

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

7

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 9.

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iShares plc Annual Report 85

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Bond interest income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 14 2 30,405 14,508 419 277 30,838 14,787

Net losses on investments in securities held at fair value through profit or loss Net gains on currency

(10,063) 1 (10,062)

(19,235) (19,235)

Year ended 29 February 2012 €’000 (1,804) (1,804)

Period from 12 June 2010 to 28 February 2011 €’000 (1,257) (1,257)

OPERATING EXPENSES

Management fees

5.

6.

EQUALISATION

The shares in the Fund are accumulating and therefore it is not intended to distribute dividends to the shareholders. The income and other profits will be accumulated and reinvested on behalf of shareholders. Dividends, if paid on the shares, may be paid out of the net income excluding certain expenses.

NET LOSSES ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000

4.

shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets.

Equalisation income Equalisation expense

The equalisation income is included in the proceeds from issue of redeemable participating shares figure in the statement of changes. The equalisation expense is included in the payments on redemption of redeemable participating shares figure in the statement of changes. 7.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 12 respectively. Please refer to page 63 for each Fund’s management fee rate. The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the

86 iShares plc Annual Report

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (37,606) (7,262) 62,732 3,809 25,126 (3,453)

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 1,108 774

520

334

520 1,628

334 1,108

Further details are set out in the accounting policies note k) on page 30.

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For the year ended 29 February 2012 8.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period 9.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

3,940,000 2,140,000 (3,260,000) 2,820,000

3,660,000 580,000 (300,000) 3,940,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares

Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

2,820,000 3,940,000 3,660,000 €’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

533,669 714,339 667,488

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€189.24 €181.30 €182.37

10. RECEIVABLES

Securities lending income receivable Bond income receivable

29 February 2012 €’000

28 February 2011 €’000

34 6,043 6,077

27 8,378 8,405

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in bonds

29 February 2012 €’000 525,702 525,702

28 February 2011 €’000 704,332 704,332

29 February 2012 €’000

28 February 2011 €’000

(114) (114)

(3,625) (136) (3,761)

12. PAYABLES

Purchase of securities awaiting settlement Management fees payable

13. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 14. RELATED PARTIES The related parties are set out on pages 66 and 67. 15. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

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iShares plc Annual Report 87

For the year ended 29 February 2012 15.

SECURITIES LENDING (continued)

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 €’000

28 February 2011 €’000

419

277

289,886

324,272

319,579

334,152

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

16.

SIGNIFICANT EVENTS DURING THE YEAR

Please refer to note 19 on page 67. 17.

SUBSEQUENT EVENTS

Please refer to note 20 on pages 67 and 68.

88 iShares plc Annual Report

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As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

34,263,000 21,009,000 12,831,000 26,085,000 13,113,000 5,922,000 14,664,000 32,430,000 25,098,000 15,087,000 12,126,000 9,447,000

8,178,000

17,202,000

24,534,000 24,393,000

Bonds France Government bonds - Aaa rating France Government Bond OAT 1% 25/07/2017 France Government Bond OAT 1.1% 25/07/2022 France Government Bond OAT 1.3% 25/07/2019 France Government Bond OAT 1.6% 25/07/2015 France Government Bond OAT 1.8% 25/07/2040 France Government Bond OAT 1.85% 25/07/2027 France Government Bond OAT 2.1% 25/07/2023 France Government Bond OAT 2.25% 25/07/2020 France Government Bond OAT 2.5% 25/07/2013 France Government Bond OAT 3.15% 25/07/2032 France Government Bond OAT 3.4% 25/07/2029 French Treasury Note BTAN 0.45% 25/07/2016 Total France Germany Governm ment bonds - Aaa rating Bundesrepublik Deutschland Bundesobligation Inflation Linked Bond 0.75% 15/04/2018 Bundesrepublik Deutschland Bundesobligation Inflation Linked Bond 2.25% 15/04/2013 Deutsche Bundesrepublik Inflation Linked Bond 1.5% 15/04/2016 Deutsche Bundesrepublik Inflation Linked Bond 1.75% 15/04/2020 Total Germany

Italy Government bonds - A3 rating 10,998,000 Italy Buoni Poliennali Del Tesoro 2.1% 15/09/2016 22,137,000 Italy Buoni Poliennali Del Tesoro 2.1% 15/09/2017 21,009,000 Italy Buoni Poliennali Del Tesoro 2.1% 15/09/2021 www.iShares.com

Fair value €'000

% of net asset value

27,346

5.12

23,756

4.45

19,893

3.73

8,603

1.61

7.42

21,996,000

4.17

10,434,000

14,031

2.63

23,265,000

32,307

6.05

5,499,000

16,005

3.00

Italy (cont) Government bonds - A3 rating (cont)) Italy Buoni Poliennali Del Tesoro 2.15% 15/09/2014 Italy Buoni Poliennali Del Tesoro 2.35% 15/09/2019 Italy Buoni Poliennali Del Tesoro 2.35% 15/09/2035 Italy Buoni Poliennali Del Tesoro 2.55% 15/09/2041 Italy Buoni Poliennali Del Tesoro 2.6% 15/09/2023 Italy Buoni Poliennali Del Tesoro 3.1% 15/09/2026 Total Italy

6,625

1.24

Total bonds

525,702

98.50

17,443

3.27

Total value of investments

525,702

98.50

42,477

7.96

376

0.07

30,991

5.81

5,963

1.12

23,529

4.41

19,387

3.63

532,041

99.69

9,916 274,557

1.86 51.45

Adjustment to align to the valuation methodology as set out in the prospectus

1,628

0.31

Net asset value attributable to redeemable participating shareholders at the end of the year

533,669

100.00

22,842,000 23,547,000 39,601 22,245

9,042

Cash† Other net assets Net assets attributable to redeemable participating shareholders

1.69

22,812

4.27

5,138 162,051

0.96 30.36

†

19,744

3.70

30,290

5.68

30,018 89,094

5.62 16.69

Substantially all cash positions are held with State Street Bank and Trust Company.

All credit ratings are shown as at 29 February 2012.

11,192

2.10

23,944

4.49

19,367

3.63

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

% of total Fair value current €’000 assets 525,702 98.79 6,453 1.21 532,155 100.00

iShares plc Annual Report 89

For the year ended 29 February 2012 The 20 0 largest purchases

The 20 largest sales Proceeds €‘000

Holding Investments 42,035,000 France Government Bond OAT 3% 25/07/2012 39,451,000 France Government Bond OAT 2.25% 25/07/2020 40,434,000 France Government Bond OAT 1% 25/07/2017 33,220,000 Deutsche Bundesrepublik Inflation Linked Bond 1.5% 15/04/2016 32,841,000 France Government Bond OAT 1.6% 25/07/2015 31,774,000 France Government Bond OAT 2.5% 25/07/2013 33,415,000 Italy Buoni Poliennali Del Tesoro 1.85% 15/09/2012 27,744,000 Deutsche Bundesrepublik Inflation Linked Bond 1.75% 15/04/2020 28,855,000 Italy Buoni Poliennali Del Tesoro 2.15% 15/09/2014 19,595,000 France Government Bond OAT 3.15% 25/07/2032 29,441,000 Italy Buoni Poliennali Del Tesoro 2.1% 15/09/2017 28,799,000 Italy Buoni Poliennali Del Tesoro 2.35% 15/09/2019 29,055,000 Italy Buoni Poliennali Del Tesoro 2.6% 15/09/2023 22,548,000 Bundesrepublik Deutschland Bundesobligation Inflation Linked Bond 2.25% 15/04/2013 27,906,000 Italy Buoni Poliennali Del Tesoro 2.35% 15/09/2035 14,416,000 France Government Bond OAT 3.4% 25/07/2029 20,560,000 France Government Bond OAT 1.1% 25/07/2022 17,008,000 France Government Bond OAT 2.1% 25/07/2023 22,792,000 Italy Buoni Poliennali Del Tesoro 2.1% 15/09/2021 15,482,000 France Government Bond OAT 1.8% 25/07/2040

52,731 50,683

Holding 26,768,000 26,815,000 27,417,000 22,688,000

45,488

23,178,000

39,867

20,624,000 24,233,000 26,662,000 18,798,000 21,023,000 13,406,000 17,891,000 19,170,000 17,845,000 15,947,000 14,928,000

39,645 38,800 36,398 32,924 32,660 29,603

17,249,000 14,655,000

29,467 27,188

9,403,000 12,047,000

Investments France Government Bond OAT 2.25% 25/07/2020 France Government Bond OAT 1.6% 25/07/2015 France Government Bond OAT 1% 25/07/2017 Deutsche Bundesrepublik Inflation Linked Bond 1.5% 15/04/2016 Deutsche Bundesrepublik Inflation Linked Bond 1.75% 15/04/2020 France Government Bond OAT 2.5% 25/07/2013 France Government Bond OAT 1.1% 25/07/2022 Italy Buoni Poliennali Del Tesoro 2.1% 15/09/2021 Italy Buoni Poliennali Del Tesoro 2.15% 15/09/2014 Italy Buoni Poliennali Del Tesoro 2.35% 15/09/2019 France Government Bond OAT 3.15% 25/07/2032 Italy Buoni Poliennali Del Tesoro 2.1% 15/09/2017 Italy Buoni Poliennali Del Tesoro 2.35% 15/09/2035 Italy Buoni Poliennali Del Tesoro 2.6% 15/09/2023 France Government Bond OAT 1.3% 25/07/2019 Bundesrepublik Deutschland Bundesobligation Inflation Linked Bond 2.25% 15/04/2013 Italy Buoni Poliennali Del Tesoro 2.1% 15/09/2016 Bundesrepublik Deutschland Bundesobligation Inflation Linked Bond 0.75% 15/04/2018 France Government Bond OAT 3.4% 25/07/2029 France Government Bond OAT 1.8% 25/07/2040

Cost €‘000 34,130 32,272 30,661 26,849 26,603 25,123 24,960 24,291 21,706 20,462 20,236 18,775 17,694 17,429 17,059 17,000 16,861 15,291 14,709 14,101

26,758 25,754 23,913 22,724 21,105 19,856 19,378 18,099

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

90 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

4,332

3,765

Net gains on financial assets at fair value through profit or loss

3

4,890

1,053

9,222

4,818

(1,381)

(757)

7,841

4,061

(2,945)

(3,013)

(2,945)

(3,013)

4,896

1,048

(211)

(73)

4,685

975

Total gains Operating expenses

4

Net operating profit Finance costs: Distributions to redeemable participating shareholders

6

Total finance costs Net profit for the financial year/period Adjustment to align to the valuation methodology as set out in the prospectus

7

Increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

565,047

576,968

4,685

975

Share transactions: Proceeds from issue of redeemable participating shares

653,840

280,476

Payment on redemption of redeemable participating shares

(487,530)

(293,372)

Increase/(decrease) in net assets resulting from share transactions

166,310

(12,896)

Net assets attributable to redeemable participating shareholders at the end of the year/period

736,042

565,047

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

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iShares plc Annual Report 91

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

CURRENT ASSETS Cash and cash equivalents

643

2,740

Receivables

10

52,590

53,648

Financial assets at fair value through profit or loss

11

734,430

562,986

787,663

619,374

(50,253)

(52,376)

Total current assets CURRENT LIABILITIES Payables

12

Distributions to redeemable participating shareholders payable

6

(1,343)

(2,137)

Total current liabilities

(51,596)

(54,513)

Net assets attributable to redeemable participating shareholders

736,067

564,861

Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attrributable to redeemable participating shareholders at the end of the year/period

7

(25)

186

736,042

565,047

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 9.

92 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Bond interest income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 4,332 3,765 4,332 3,765

NET GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000

Net gains on investments in securities held at fair value through profit or loss

4.

6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

4,890 4,890

1,053 1,053

OPERATING EXPENSES

Management fees

5.

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (1,381) (757) (1,381) (757)

August 2010 February 2011 August 2011 February 2012 Equalisation income Equalisation expense

Year ended 29 February 2012 $’000 1,725 1,343 3,068 (626) 503 2,945

Period from 12 June 2010 to 28 February 2011 $’000 1,165 2,137 3,302 (573) 284 3,013

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 12 respectively. Please refer to page 63 for each Fund’s management fee rate.

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iShares plc Annual Report 93

For the year ended 29 February 2012 7.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 186 259

(211)

(73)

(211) (25)

(73) 186

Further details are set out in the accounting policies note k) on page 30. 8.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period 9.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

4,320,000 4,960,000 (3,700,000) 5,580,000

4,420,000 2,140,000 (2,240,000) 4,320,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares

Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

5,580,000 4,320,000 4,420,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

736,042 565,047 576,968

$’000 Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$131.91 $130.80 $130.54

10. RECEIVABLES 29 February 2012 $’000

28 February 2011 $’000

50,089 1,158

52,238 1,410

1,343 52,590

53,648

Sale of securities awaiting settlement Bond income receivable Distributions payable held with Registrar*

* Further details are set out on note 11 page 65.

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in bonds

29 February 2012 $’000 734,430 734,430

28 February 2011 $’000 562,986 562,986

29 February 2012 $’000

28 February 2011 $’000

(50,122) (131) (50,253)

(52,283) (93) (52,376)

12. PAYABLES

Redemption of shares awaiting settlement Management fees payable

13. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 14. RELATED PARTIES The related parties are set out on pages 66 and 67. 15. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 16. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

94 iShares plc Annual Report

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As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset valuue

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 22,320,000

24,273,000 23,994,000 19,251,000 23,994,000 25,947,000 25,389,000 23,157,000 23,436,000 24,273,000 23,157,000 25,389,000 24,831,000 23,994,000 22,878,000 25,389,000 22,041,000 22,599,000 23,436,000 22,599,000 25,389,000 29,853,000 22,878,000 22,320,000 22,878,000

www.iShares.com

Bonds United States Government bonds - Aaa rating United States Treasury Note/Bond 0.125% 31/08/2013 United States Treasury Note/Bond 0.125% 30/09/2013 United States Treasury Note/Bond 0.125% 31/12/2013 United States Treasury Note/Bond 0.25% 31/10/2013 United States Treasury Note/Bond 0.25% 30/11/2013 United States Treasury Note/Bond 0.25% 31/01/2014 United States Treasury Note/Bond 0.25% 15/09/2014 United States Treasury Note/Bond 0.25% 15/12/2014 United States Treasury Note/Bond 0.25% 15/01/2015 United States Treasury Note/Bond 0.375% 30/06/2013 United States Treasury Note/Bond 0.375% 31/07/2013 United States Treasury Note/Bond 0.375% 15/11/2014 United States Treasury Note/Bond 0.5% 31/05/2013 United States Treasury Note/Bond 0.5% 15/10/2013 United States Treasury Note/Bond 0.5% 15/11/2013 United States Treasury Note/Bond 0.5% 15/08/2014 United States Treasury Note/Bond 0.5% 15/10/2014 United States Treasury Note/Bond 0.625% 15/07/2014 United States Treasury Note/Bond 0.75% 15/08/2013 United States Treasury Note/Bond 0.75% 15/09/2013 United States Treasury Note/Bond 0.75% 15/12/2013 United States Treasury Note/Bond 0.75% 15/06/2014 United States Treasury Note/Bond 1% 15/07/2013 United States Treasury Note/Bond 1% 15/01/2014

24,831,000 24,552,000

4.69 99.77

Total bonds

734,430

99.77

Total value of investments

734,430

99.77

Cash†

643

0.09

994

0.14

3.29

23,941

3.25

19,193

2.61

23,986

3.26

25,933

3.52

25,368

3.45

23,081

3.14

23,339

3.17

24,169

3.28

Other net assets

23,198

3.15

25,435

3.46

Net assets attributable to redeemable participating shareholders

24,815

3.37

24,076

3.27

22,964

3.12

25,483

3.46

22,115

3.00

22,668

3.08

23,584

3.20 3.09

25,577

3.47

30,098

4.09

23,091

3.14

22,551

3.06

23,177

3.15

23,715,000 27,621,000 34,038,000

% of net asset valuue

United States (cont) Government bonds - Aaa rating (cont) United States Treasury Note/Bond 1% 15/05/2014 22,648 United States Treasury Note/Bond 1.125% 15/06/2013 25,115 United States Treasury Note/Bond 1.25% 15/02/2014 25,005 United States Treasury Note/Bond 1.25% 15/03/2014 24,167 United States Treasury Note/Bond 1.25% 15/04/2014 28,160 United States Treasury Note/Bond 1.375% 15/05/2013 34,507 Total United States 734,430

24,224

22,762

Fair value $'000

3.08 3.41 3.40 3.28 3.83

736,067 100.00

Adjustment to align to the valuation methodology as set out in the prospectus

(25)

Net asset value attributable to redeemable participating shareholders at the end of the year

0.00

736,042 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company.

All credit ratings are shown as at 29 February 2012.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

Fair value $'000

% of total current assets

734,430 53,233 787,663

93.24 6.76 100.00

iShares plc Annual Report 95

For the year ended 29 February 2012 The 20 largest sales Holding Investments 52,700,000 United States Treasury Note/Bond 0.75% 31/03/2013 45,374,000 United States Treasury Note/Bond 1.75% 15/04/2013 43,340,000 United States Treasury Note/Bond 1.375% 15/02/2013 43,340,000 United States Treasury Note/Bond 1.375% 15/03/2013 40,461,000 United States Treasury Note/Bond 1.375% 15/01/2013 35,999,000 United States Treasury Note/Bond 0.625% 30/04/2013 35,490,000 United States Treasury Note/Bond 0.625% 31/01/2013 34,965,000 United States Treasury Note/Bond 0.625% 31/12/2012 34,115,000 United States Treasury Note/Bond 1.125% 15/12/2012 30,671,000 United States Treasury Note/Bond 0.5% 31/05/2013 29,160,000 United States Treasury Note/Bond 1.375% 15/05/2012 27,448,000 United States Treasury Note/Bond 1.375% 15/11/2012 26,004,000 United States Treasury Note/Bond 0.625% 28/02/2013 25,571,000 United States Treasury Note/Bond 1.375% 15/10/2012 25,400,000 United States Treasury Note/Bond 1.75% 15/08/2012 25,414,000 United States Treasury Note/Bond 1.375% 15/09/2012 25,400,000 United States Treasury Note/Bond 0.375% 31/08/2012 25,223,000 United States Treasury Note/Bond 0.5% 15/10/2013 23,312,000 United States Treasury Note/Bond 1.5% 15/07/2012 22,970,000 United States Treasury Note/Bond 0.375% 31/07/2013

The 20 largest purchases Proceeds $‘000 53,044 46,258 43,961 43,960 41,045 36,206 35,669 35,130 34,489 30,800 29,518 27,844 26,129 25,911 25,859 25,749 25,429 25,292 23,649 23,027

Holding Investments 54,665,000 United States Treasury Note/Bond 0.5% 31/05/2013 52,700,000 United States Treasury Note/Bond 0.75% 31/03/2013 48,359,000 United States Treasury Note/Bond 0.375% 31/07/2013 42,464,000 United States Treasury Note/Bond 1.25% 15/04/2014 41,762,000 United States Treasury Note/Bond 0.75% 15/06/2014 39,932,000 United States Treasury Note/Bond 1.25% 15/02/2014 38,590,000 United States Treasury Note/Bond 1.25% 15/03/2014 38,153,000 United States Treasury Note/Bond 0.5% 15/10/2014 37,014,000 United States Treasury Note/Bond 0.25% 30/11/2013 35,999,000 United States Treasury Note/Bond 0.625% 30/04/2013 35,422,000 United States Treasury Note/Bond 0.375% 15/11/2014 35,061,000 United States Treasury Note/Bond 0.125% 31/08/2013 34,776,000 United States Treasury Note/Bond 0.625% 15/07/2014 34,362,000 United States Treasury Note/Bond 0.375% 30/06/2013 34,228,000 United States Treasury Note/Bond 0.25% 31/10/2013 34,274,000 United States Treasury Note/Bond 0.125% 30/09/2013 33,406,000 United States Treasury Note/Bond 1.375% 15/05/2013 33,200,000 United States Treasury Note/Bond 1% 15/05/2014 33,117,000 United States Treasury Note/Bond 0.25% 15/09/2014 32,333,000 United States Treasury Note/Bond 0.5% 15/10/2013

Cost $‘000 54,837 52,855 48,464 43,126 42,001 40,441 38,977 38,263 37,009 36,168 35,404 35,002 34,920 34,368 34,223 34,188 33,973 33,567 32,971 32,426

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

96 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

17,271

10,965

Net gains on financial assets at fair value through profit or loss

3

10,925

42,997

28,196

53,962

(1,676)

(1,074)

26,520

52,888

Total gains Operating expenses

4

Net operating profit Finance costs: Distributions to redeemable participating shareholders

6

(15,784)

(8,676)

Interest expense

7

(14)

(3)

(15,798)

(8,679)

10,722

44,209

(512)

(328)

10,210

43,881

51

(247)

10,261

43,634

Total finance costs Net profit for the financial year/period before tax Non-reclaimable withholding tax Net profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

Increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

305,252

176,828

10,261

43,634

166,788

93,544

Share transactions: Proceeds from issue of redeemable participating shares

(183,515)

(8,754)

(Decrease)/increase in net assets resulting from share transactions

Payments on redemption of redeemable participating shares

(16,727)

84,790

Net assets attributable to redeemable participating shareholders at the end of the year/period

298,786

305,252

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 97

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

CURRENT ASSETS Cash and cash equivalents

269

3,291

Receivables

11

7,199

2,272

Financial assets at fair value through profit or loss

12

296,680

301,960

304,148

307,523

Total current assets CURRENT LIABILITIES Bank overdraft

-

(200)

Payables

13

(3,270)

(141)

Distributions to redeemable participating shareholders payable

6

(2,604)

(2,391)

(5,874)

(2,732)

298,274

304,791

512

461

298,786

305,252

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

98 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 14 7 17,257 10,958 17,271 10,965

NET GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000

Net gains on investments in securities held at fair value through profit or loss Net losses on currency

4.

6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

43,005 (8) 42,997

OPERATING EXPENSES

Management fees

5.

10,988 (63) 10,925

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (1,676) (1,074) (1,676) (1,074)

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

7.

Period from 12 June 2010 to 28 February 2011 $’000 2,812 4,252 2,391 9,455 (858) 79 8,676

Year ended 29 February 2012 $’000 (14) (14)

Period from 12 June 2010 to 28 February 2011 $’000 (3) (3)

INTEREST EXPENSE

Please refer to page 63 for each Fund’s management fee rate.

Bank interest

www.iShares.com

Year ended 29 February 2012 $’000 3,639 4,761 4,869 2,604 15,873 (1,919) 1,830 15,784

iShares plc Annual Report 99

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 461 708

51

(247)

51 512

(247) 461

Further details are set out in the accounting policies note k) on page 30. 9.

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 are classified as financial liabilities.

10.

28 February 2011 No. of Shares 7,300,000 3,400,000 (300,000) 10,400,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares

Shares in issue As at 29 February 2012 As at 28 February 2011 As at 10 June 2010

9,500,000 10,400,000 7,300,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 10 June 2010

11.

$31.45 $29.35 $24.22

RECEIVABLES 29 February 2012 $’000

28 February 2011 $’000

3,101 1,494

1 2,271

2,604 7,199

2,272

Sale of securities awaiting settlement Deposit interest receivable Dividends income receivable Distributions payable held with Registrar*

* Further details are set out on note 11 page 65.

12.

SHARE CAPITAL

29 February Number of redeemable participating 2012 shares: No. of Shares Balance at the beginning of year/period 10,400,000 Issued during year/period 5,600,000 Redeemed during year/period (6,500,000) Balance at the end of year/period 9,500,000

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 10 June 2010

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities

13.

28 February 2011 $’000 301,960 301,960

29 February 2012 $’000 (3,127) (133) (10) (3,270)

28 February 2011 $’000 (141) (141)

PAYABLES

Redemptions awaiting settlement Management fees payable Other payables

14.

29 February 2012 $’000 296,680 296,680

COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15.

RELATED PARTIES

The related parties are set out on pages 66 and 67. 298,786 305,252 176,828

16.

SIGNIFICANT EVENTS DURING THE YEAR

Please refer to note 19 on page 67. 17.

SUBSEQUENT EVENTS

Please refer to note 20 on pages 67 and 68.

100 iShares plc Annual Report

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As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

444,976 181,615 399,007 470,770 2,612,718

861,388 12,262,167 599,724 2,137,011 670,314 4,860,714 3,621,632 2,943,375

Equities Australia Banks Australia & New Zealand Banking Group Ltd Com NPV Commonwealth Bank of Australia Com NPV National Australia Bank Ltd Com NPV Westpac Banking Corp Com NPV Clothing & accessories Billabong International Ltd Com NPV Containers & packaging Amcor Ltd Com NPV Electricity SP AusNet Com NPV Engineering & construction UGL Ltd Com NPV Food retailers and wholesalers Metcash Ltd Com NPV Insurance Suncorp Group Ltd Com NPV Retail David Jones Ltd Com NPV Telecommunications Telstra Corp Ltd Com NPV Transportation Sydney Airport Com NPV Total Australia

Bermuda Apparel retailers 9,028,971 Esprit Holdings Ltd Com HKD 0.10 1,838,500 Yue Yuen Industrial Holdings Ltd Com HKD 0.25 Telecommunications equipment 1,044,000 VTech Holdings Ltd Com USD 0.05 Total Bermuda Cayman Islands Real estate investment & services 12,038,000 Shimao Property Holdings Ltd Com HKD 0.10 13,178,500 Soho China Ltd Com HKD 0.02

www.iShares.com

10,548

3.53

9,697

3.25

10,204 10,626

3.41 3.56

8,694

2.91

6,599

2.21

13,116

4.39

7,938

2.66

14,180

4.74

11,886,000

12,874

4.31

2,902,000

8,300 128,460

2.78 43.00

839,800 4,406,000

11,758 38,296

3.94 12.82

4,837

1.62

7,056

2.36

6,336 18,229

2.12 6.10

19,088

6.39

10,319 29,407

3.45 9.84

9,246

3.10

7,354

2.46

7,442

2.49

10,318

3.45

7,844 6,466 48,670

2.63 2.16 16.29

Total equities

296,680

99.30

Total value of investments

296,680

99.30

269

0.09

1,325

0.44

New Zealand Fixed line telecommunications 10,602,689 Telecom Corp of New Zealand Ltd Com NPV Gambling 3,254,815 Sky City Entertainment Group Ltd Com NPV Total New Zealand

1.98

2.09

2.78 11.25

Japan Oil & gas 522,000 TonenGeneral Sekiyu KK Com NPV Pharmaceuticals 173,600 Eisai Co Ltd Com NPV 115,500 Ono Pharmaceutical Co Ltd Com NPV Total Japan

5,917

6,258

8,310 33,618

Cayman Islands (cont) Textile 7,538,000 Anta Sports Products Ltd Com HKD 0.10 Total Cayman Islands

3.27

6.79

% of net asset value

Holding Investment

9,767

20,280

Fair value $'000

4,042,000 4,647,000

Singapore Delivery services Singapore Post Ltd Com NPV Fixed line telecommunications Singapore Telecommunications Ltd Com NPV Holding companies - diversified operations Keppel Corp Ltd Com NPV Mobile telecommunications StarHub Ltd Com NPV Transportation SATS Ltd Com NPV SMRT Corp Ltd Com NPV Total Singapore

Cash†

15,708 9,600

5.26 3.21

Other net assets

iShares plc Annual Report 101

As at 29 February 2012

Holding Investment Nett assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the en nd of the year

Fair value $'000

% of net asset value

298,274

99.83

512

0.17

298,786 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

102 iShares plc Annual Report

% of total Fair value current $'000 assets

296,680 7,468 304,148

97.54 2.46 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest saless Holding Investments 23,789,384 SP AusNet Com NPV

The 20 largest purchases Proceeds $‘000

Cost $‘000

Hold ding Investments

21,981

10,364,700 Esprit Holdings Ltd Com HKD 0.10

15,413

6,077,209 Telstra Corp Ltd Com NPV

19,356

14,755,500 Shimao Property Holdings Ltd Com HKD 0.10

13,820

7,591,699 Telecom Corp of New Zealand Ltd Com NPV

12,857

6,648,380 Telecom Corp of New Zealand Ltd Com NPV

12,699

1,624,500 Power Assets Holdings Ltd Com HKD 1.00

11,930

4,370,814 David Jones Ltd Com NPV

12,389

5,378,000 StarHub Ltd Com NPV

11,902

12,257,469 SP AusNet Com NPV

12,388

1,461,893 Brambles Ltd Com NPV

10,355

16,154,500 Soho China Ltd Com HKD 0.02

11,512

1,181,000 CLP Holdings Ltd Com HKD 5.00

10,094

9,242,000 Anta Sports Products Ltd Com HKD 0.10

11,095 11,078

167,700 Ono Pharmaceutical Co Ltd Com NPV

8,794

3,331,869 Telstra Corp Ltd Com NPV

215,800 Eisai Co Ltd Com NPV

8,444

2,681,026 Billabong International Ltd Com NPV

9,231

338,406 National Australia Bank Ltd Com NPV

8,041

3,443,000 StarHub Ltd Com NPV

7,879

764,000 VTech Holdings Ltd Com USD 0.05

8,007

653,000 VTech Holdings Ltd Com USD 0.05

1,912,919 Metcash Ltd Com NPV

7,921

308,979 Australia & New Zealand Banking Group Ltd Com NPV 6,833

2,959,477 Sky City Entertainment Group Ltd Com NPV

7,906

266,199 National Australia Bank Ltd Com NPV

146,395 Commonwealth Bank of Australia Com NPV

7,198

995,712 Amcor Ltd Com NPV

7,095

634,000 TonenGeneral Sekiyu KK Com NPV

7,018

2,232,192 Sky City Entertainment Group Ltd Com NPV

6,431

330,914 Westpac Banking Corp Com NPV

6,965

1,456,305 Metcash Ltd Com NPV

6,341

6,886

8,497,000 Singapore Post Ltd Com NPV

6,787 6,718

293,268 Westpac Banking Corp Com NPV

6,548

2,178,800 David Jones Ltd Com NPV

6,463

118,848 Commonwealth Bank of Australia Com NPV

6,150

2,447,419 Chorus Ltd Com NPV

5,930

435,494 UGL Ltd Com NPV

5,835

136,200 Eisai Co Ltd Com NPV

5,514

281,210 Australia & New Zealand Banking Group Ltd Com NPV

5,927

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 103

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

4,729

1,640

Net (losses)/gains on financial assets at fair value through profit or loss

3

(26,957)

23,396

(22,228)

25,036

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(566)

(419)

(22,794)

24,617

Finance costs: Distributions to redeemable participating shareholders

6

(3,998)

(1,888)

Interest expense

7

(2)

-

(4,000)

(1,888)

(26,794)

22,729

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(95)

(136)

(26,889)

22,593

(62)

(44)

(26,951)

22,549

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

165,430

132,663

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(26,951)

22,549

23,944

20,274

(22,627)

(10,056)

1,317

10,218

139,796

165,430

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period * For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

104 iShares plc Annual Report

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As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

-

410

68

-

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

1,640

344

Financial assets at fair value through profit or loss

12

139,146

165,332

140,854

166,086

Total current assets CURRENT LIABILITIES Bank overdraft

(182)

-

Payables

13

(444)

(257)

Distributions to redeemable participating shareholders payable

6

(467)

(496)

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

(1,093)

(753)

139,761

165,333

35

97

139,796

165,430

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 105

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 3 21 4,439 1,470 287 149 4,729 1,640

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net gains on futures contracts

4.

23,396 23,396

OPERATING EXPENSES

Management fees

5.

(26,986) 29 (26,957)

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (566) (419) (566) (419)

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

106 iShares plc Annual Report

Period from 12 June 2010 to 28 February 2011 €’000 1,261 110 496 1,867 (74) 95 1,888

Year ended 29 February 2012 €’000 (2) (2)

Period from 12 June 2010 to 28 February 2011 €’000 -

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate.

Year ended 29 February 2012 €’000 1,302 2,183 60 467 4,012 (120) 106 3,998

Bank interest

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For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 97 141

(62)

(44)

(62) 35

(44) 97

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

4,400,000 800,000 (800,000) 4,400,000

4,100,000 600,000 (300,000) 4,400,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

4,400,000 4,400,000 4,100,000 €’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

139,796 165,430 132,663

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€31.77 €37.60 €32.36

11. RECEIVABLES 29 February 2012 €’000

28 February 2011 €’000

916

202

6 251

15 127

467 1,640

344

Sale of securities awaiting settlement Securities lending income receivable Dividend tax reclaim receivable Distributions payable held with Registrar*

* Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities

29 February 2012 €’000 139,146 139,146

28 February 2011 €’000 165,332 165,332

29 February 2012 €’000

28 February 2011 €’000

(401) (43) (444)

(206) (51) (257)

13. PAYABLES

Purchase of securities awaiting settlement Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

iShares plc Annual Report 107

For the year ended 29 February 2012 16.

SECURITIES LENDING

During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

287

149

11,031

16,914

12,153

18,637

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17.

SIGNIFICANT EVENTS DURING THE YEAR

Please refer to note 19 on page 67. 18.

SUBSEQUENT EVENTS

Please refer to note 20 on pages 67 and 68.

108 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

104,461 104,388 15,599 60,290 45,260 407,184

60,003 25,048 33,611 983,248 47,564 41,620 1,473

59,114

54,706 81,333 28,250 241,168 56,474 www.iShares.com

Equities Austria Banks Erste Group Bank AG Com NPV Fixed line telecommunications Telekom Austria AG Com NPV Industrial machinery Andritz AG Com NPV Integrated oil & gas OMV AG Com NPV Iron & steel Voestalpine AG Com NPV Real estate investment & services Immofinanz AG Com NPV Total Austria Belgium Banks KBC Groep NV Com NPV Chemicals Solvay SA Com NPV Food retailers and wholesalers Colruyt SA Com NPV Insurancee Ageas Com NPV Mining Umicore SA Com NPV Pharmaceuticals UCB SA Com NPV Specialty finance Groupe Bruxelles Lambert SA Com NPV* Telecommunications Belgacom SA Com NPV Total Belgium Finland Auto parts & equipment Nokian Renkaat Oyj Com NPV Banks Pohjola Bank Plc Com NPV Food retailers and wholesalers Kesko Oyj Class 'B' Com NPV Forest products & paper Stora Enso Oyj Com NPV Industrial machinery Metso Oyj Com NPV

1,970

1.41

908

0.65

1,156

0.82

1,694

1.21

1,213

0.87

1,075 8,016

0.77 5.73

Holding Investment Finland (cont) Auto parts & equipment 70,771 Wartsila Oyj Com NPV Telecommunication ns 58,990 Elisa Oyj Com NPV Total Finland

63,961 16,131 30,075 68,926 361,272 21,863 1,064

0.76

2,313

1.65

22,373 69,927 41,415

985

0.71

40,188

1,566

1.12

98,056

1,856

1.33

13,918

1,261

0.90

13,221 28,220

-

0.00

1,434 10,479

1.03 7.50

22,683

63,456 75,426

1,822

1.30

58,819

704

0.51

49,749

711

0.51

59,661

1,359

0.97

2,006

1.43

39,664

France Advertising Publicis Groupe SA Com EUR 0.40 Aerospace Zodiac Aerospace Com NPV Auto parts Valeo SA Com EUR 3.00 Automobiles Peugeot SA Com EUR 1.00 Banks Natixis Com EUR 1.60 Chemicals Arkema SA Com EUR 10.00 Commercial services Bureau Veritas SA Com EUR 0.12 Edenred Com EUR 2.00 Sodexo Com EUR 4.00 Defence Thales SA Com EUR 3.00 Electrical components & equipment Legrand SA Com EUR 4.00 Electronic office equipment Neopost SA Com EUR 1.00 Engineering & construction Aeroports de Paris Com EUR 3.00 Eiffage SA Com EUR 4.00 Food retailers and wholesalers Casino Guichard Perrachon SA Com EUR 1.53 Hotels Accor SA Com EUR 3.00 Insurance SCOR SE Com EUR 7.88 Insurance CNP Assurances Com EUR 1.00 Media Lagardere SCA Com EUR 6.10 Oil equipment & services Cie Generale de Geophysique Veritas Com EUR 0.40 Real estate investment trusts Klepierre Reits EUR 1.40

Fair value €'000

% of net asset value

1,829

1.31

1,007 9,438

0.72 6.75

2,622

1.88

1,166

0.83

1,214

0.87

1,037

0.74

980

0.70

1,504

1.08

1,384 1,400 2,390

0.99 1.00 1.71

1,088

0.78

2,663

1.90

726

0.52

784 840

0.56 0.60

1,657

1.19

1,675

1.20

1,498

1.07

635

0.45

1,135

0.81

1,382

0.99

960

0.69

iShares plc Annual Report 109

As at 29 February 2012

Holding Investment

26,553

13,875 39,812

195,313

111,682

20,771

96,724 33,520 13,926 35,155 46,935 16,992 13,400

71,323 25,365

16,129 26,268 36,030

42,111 27,304

France (cont) Software Dassault Systemes SA Com EUR 1.00 Specialty finance Wendel SA Com EUR 4.00 Telecommunications Eutelsat Communications SA Com EUR 1.00 Transportation Groupe Eurotunnel SA Com EUR 0.40 Water Suez Environnement Co Com EUR 4.00 Total France Germany Aerospace MTU Aero Engines Holding AG Com NPV Airlines Deutsche Lufthansa AG Com NPV Auto manufacturers Continental AG Com NPV Chemicals Brenntag AG Com NPV Lanxess AG Com NPV Symrise AG Com NPV Engineering & construction Bilfinger Berger SE Com NPV Hochtief AG Com NPV Holding companies - diversified operations GEA Group AG Com NPV Insurance Hannover Rueckversicherung AG Com NPV Iron & steel Salzgitter AG Com NPV Machinery — diversified MAN SE Com NPV Media Kabel Deutschland Holding AG Com NPV Personal products Beiersdorf AG Com NPV Pharmaceuticals Merck KGaA Com NPV Total Germany

110 iShares plc Annual Report

Fair value €'000

% of net asset value

1,679

1.20

877

0.63

1,114

0.80

1,271

0.91

1,220 34,901

0.87 24.97

1,189

0.85

1,006

0.72

2,299

1.64

1,224 1,979 1,025

0.87 1.42 0.73

Holding Investment Greece Banks 403,638 National Bank of Greece SA Com EUR 5.00 Beverages 81,910 Coca Cola Hellenic Bottling Co SA Com EUR 1.50 Entertainment 88,459 OPAP SA Com EUR 0.30 Total Greece Ireland Banks 266,948 Irish Bank Resolution Corp Ltd Com EUR 0.16* Food products 61,174 Kerry Group Plc Class 'A' Com EUR 0.125 Pharmaceuticals 202,449 Elan Corp Plc Com EUR 0.05 Total Ireland

651,314

321,109 2,459,532

1,246 700

0.89 0.50

1,809

1.29

1,057

0.76

738

0.53

745,127 202,753 381,005

133,239 165,053 84,959 2,268

1.62 548,848

1,629

1.17 63,227

1,980

1.42

2,113 22,262

1.51 15.92

298,906

Italy Alternative energy Enel Green Power SpA Com EUR 0.20 Automobiles Fiat SpA Com EUR 3.50 Banks Banca Monte dei Paschi di Siena SpA Com NPV Banco Popolare SC Com NPV Mediobanca SpA Com EUR 0.50 Unione di Banche Italiane SCPA Com EUR 2.50 Commercial services Atlantia SpA Com EUR 1.00 Defence Finmeccanica SpA Com EUR 4.40 Electrical components & equipment Prysmian SpA Com EUR 0.10 Electricity Terna Rete Elettrica Nazionale SpA Com EUR 0.22 Healthcare products Luxottica Group SpA Com EUR 0.06 Media Mediaset SpA Com EUR 0.52 Total Italy

Fair value €'000

% of net asset value

953

0.68

1,163

0.83

595 2,711

0.43 1.94

-

0.00

1,958

1.40

1,900 3,858

1.36 2.76

962

0.69

1,394

1.00

976 1,021 991

0.70 0.73 0.71

1,307

0.93

1,667

1.19

624

0.45

1,092

0.78

1,548

1.11

1,703

1.22

663 13,948

0.47 9.98

www.iShares.com

As at 29 February 2012

Holding Investment

42,667

48,095

32,112 29,519

98,736 25,035

127,458 29,297 72,318 24,657 278,697

148,611

Netherlands Beverages Heineken Holding NV Com EUR 1.60 Commercial services Randstad Holding NV Com EUR 0.10 Electronic equipment Gemalto NV Com EUR 1.00 Engineering & construction Koninklijke Boskalis Westminster NV Com EUR 0.80 Healthcaree products Qiagen NV Com EUR 0.01 Marine transportation Koninklijke Vopak NV Com EUR 0.50 Media Wolters Kluwer NV Com EUR 0.12 Oil equipment & services Fugro NV CVS EUR 0.05 SBM Offshore NV Com EUR 0.25 Real estate investment trusts Corio NV Reits EUR 10.00 Semiconductors STMicroelectronics NV Com EUR 1.04 Transportation TNT Express NV Com EUR 0.08 Total Netherlands

Portugal Food retailers and wholesalers 90,668 Jeronimo Martins SGPS SA Com EUR 1.00 Integrated oil & gas 85,760 Galp Energia SGPS SA Com EUR 1.00 Telecommunicationss 291,444 Portugal Telecom SGPS SA Com EUR 0.03 Total Portugal Spain Banks 647,941 Banco de Sabadell SA Com EUR 0.125 533,025 Banco Popular Espanol SA Com EUR 0.10 348,380 Bankia SA Com NPV

www.iShares.com

Fair value €'000

% of net asset value

Holding Investment

Fair value €'000

% of net asset value

1,062

0.76

1,733

1.24

1,349 1,645

0.96 1.17

1,164 1,685

0.83 1.21

1,715 14,616

1.23 10.45

1,048

0.75

Spain (cont) Banks (cont) CaixaBank Com EUR 1.00 Electricity Red Electrica Corp SA Com EUR 2.00 Engineering & construction ACS Actividades de Construccion y Servicios SA Com EUR 0.50 Ferrovial SA Com EUR 0.20 Gas distribution Enagas SA Com EUR 1.50 Gas Natural SDG SA Com EUR 1.00 Software Amadeus IT Holding SA Com EUR 0.01 Total Spain

1,781

1.27

Total equities

139,146

99.53

1,615 985

1.16 0.70

Total value of investments

139,146

99.53

Bank overdraft†

(114)

(0.08)

888

0.64 Other net assets

729

0.52

139,76 61

99.97

Adjustment to align to the valuation methodology as set out in the prospectus

35

0.03

Net asset value attributable to redeemable participating shareholders at the end of the year

139,796

100.00

299,841 1,429

1.02 45,723

1,366

0.98

1,377

0.98

60,373 173,185 847

0.61

1,137

0.81

75,652 132,656 119,954

1,547

1.11

1,390 15,410

0.99 11.02

1,253

Net assets attributable to redeemable participating shareholders

0.90

1,123

0.80

1,131 3,507

0.81 2.51

†

Substantially all cash positions are held with State Street Bank and Trust Company other than €68,220 held as security by the counterparty for futures contracts. * Investments which are less than €500 have been rounded to zero.

Fair value €’000

% of total current assets

Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets

139,146 1,708

98.79 1.21

Total current assets

140,854

100.00

Analysis of total current assets and gross of all liabilities (unaudited) 1,568

1.12

1,638 1,057

1.17 0.76

iShares plc Annual Report 111

For the year ended 29 February 2012 The 20 largest sales Holding 72,716 1,880,368 356,483 53,593 132,624 30,140 867,096 153,378 57,656 43,465 146,796 271,768 236,730 402,455 18,533 4,956 12,241 27,079 9,437 12,579

Investments Porsche Automobil Holding SE Pref NPV Commerzbank AG Com NPV Fiat Industrial SpA Com EUR 1.50 Fresenius SE & Co KGaA Com NPV Safran SA Com EUR 0.20 Christian Dior SA Com EUR 2.00 Parmalat SpA Com EUR 1.00 Banca Popolare dell'Emilia Romagna Scrl Com EUR 3.00 Rhoen Klinikum AG Com NPV Verbund AG Com NPV Banca Popolare di Sondrio SCARL Com EUR 3.00 Dexia SA Com NPV Banco Espirito Santo SA Com NPV Iberdrola Renovables SA Com EUR 0.50 Bekaert SA Com NPV Hermes International Com NPV Hochtief AG Com NPV OMV AG Com NPV Wacker Chemie AG Com NPV Sodexo Com EUR 4.00

The 20 largest purchases Procceeds €‘000 3,477 3,433 3,421 3,347 3,284 2,709 1,703 990 955 953 842 792 769 752 751 728 693 663 651 646

Holding Investments 808,097 Commerzbank AG Com NPV 1,354,641 Ageas Com NPV 78,557 ACS Actividades de Construccion y Servicios SA Com EUR 0.50 376,704 Unione di Banche Italiane SCPA Com EUR 2.50 156,708 Wolters Kluwer NV Com EUR 0.12 149,267 Amadeus IT Holding SA Com EUR 0.01 330,960 Portugal Telecom SGPS SA Com EUR 0.03 187,888 TNT Express NV Com EUR 0.08 43,607 Kabel Deutschland Holding AG Com NPV 26,470 MAN SE Com NPV 89,573 Edenred Com EUR 2.00 48,784 Rhodia SA Com EUR 1.00 802,180 Enel Green Power SpA Com EUR 0.20 620,501 Parmalat SpA Com EUR 1.00 103,087 Jeronimo Martins SGPS SA Com EUR 1.00 105,265 Erste Group Bank AG Com NPV 351,061 Bankia SA Com NPV 19,700 Continental AG Com NPV 45,424 Legrand SA Com EUR 4.00 17,663 Andritz AG Com NPV

Cost €‘000 2,872 2,652 2,408 2,360 2,259 1,978 1,892 1,788 1,758 1,667 1,642 1,542 1,515 1,483 1,323 1,297 1,269 1,238 1,193 1,169

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

112 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

24,330

7,389

Net (losses)/gains on financial assets at fair value through profit or loss

3

(81,988)

49,938

(57,658)

57,327

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(1,524)

(1,209)

(59,182)

56,118

Finance costs: Distributions to redeemable participating shareholders

6

(22,557)

(8,138)

Interest expense

7

(4)

-

Total finance costs

(22,561)

(8,138)

Net (loss)/profit for the financial year/period before tax

(81,743)

47,980

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(230)

(675)

(81,973)

47,305

(287)

(212)

(82,260)

47,093

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

493,746

376,622

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(82,260)

47,093

104,354

75,341

(167,640)

(5,310)

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares (Decrease)/increase in net assets resulting from share transactions

(63,286)

70,031

Net assets attributable to redeemable participating shareholders at the end of the year/period

348,200

493,746

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 113

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

1

1,366

CURRENT ASSETS Cash and cash equivalents Margin cash account

286

Receivables

11

5,738

562

Financial assets at fair value through profit or loss

12

345,868

493,290

351,893

495,218

Total current assets CURRENT LIABILITIES Bank overdraft

(1,148)

-

Payables

13

(1,727)

(151)

Distributions to redeemable participating shareholders payable

6

(814)

(1,604)

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

(3,689))

(1,755)

348,204

493,463

(4)

283

348,200

493,746

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

114 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 6 16 23,622 6,521 702 852 24,330 7,389

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on futures contracts Net gains on currency

4.

49,938 49,938

OPERATING EXPENSES

Management fees

5.

(81,791) (201) 4 (81,988)

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (1,524) (1,209) (1,524) (1,209)

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 €’000 5,041 1,706 1,604 8,351 (252) 39 8,138

Year ended 29 February 2012 €’000 (4) (4)

Period from 12 June 2010 to 28 February 2011 €’000 -

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate. Bank interest

www.iShares.com

Year ended 29 February 2012 €’000 10,624 7,551 2,269 814 21,258 (881) 2,180 22,557

iShares plc Annual Report 115

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 283 495

(287)

(212)

(287) (4)

(212) 283

Further details are set out in the accounting policies note k) on page 30. 9.

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 are classified as financial liabilities. 28 February 2011 No. of Shares 21,600,000 4,000,000 (300,000) 25,300,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

21,500,000 25,300,000 21,600,000 €’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

116 iShares plc Annual Report

€16.20 €19.52 €17.44

11. RECEIVABLES 29 February 2012 €’000

28 February 2011 €’000

3,841 86

88

50 947

20 454

814 5,738

562

Sales of securities awaiting settlement Dividend income receivable Securities lending income receivable Dividend tax reclaim receivable Distributions payable held with Registrar*

* Further details are set out on note 11 page 65.

SHARE CAPITAL

29 February Number of redeemable participating 2012 shares: No. of Shares Balance at the beginning of year/period 25,300,000 Issued during year/period 6,100,000 Redeemed during year/period (9,900,000) Balance at the end of year/period 21,500,000

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

348,200 493,746 376,622

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Unrealised gains on futures contracts

29 February 2012 €’000 345,867 1 345,868

28 February 2011 €’000 493,290 493,290

29 February 2012 €’000 (1,619) (1) (107) (1,727)

28 February 2011 €’000 (151) (151)

13. PAYABLES

Redemptions awaiting settlement Interest payable Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

www.iShares.com

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

702

852

23,315

31,915

25,719

35,140

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 117

As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market Equities Belgium Telecommunications 744,505 Belgacom SA Com NPV Total Belgium Finland Food retailers and wholesalers 305,618 Kesko Oyj Class 'B' Com NPV Industrial machinery 257,133 Metso Oyj Com NPV 312,420 Wartsila Oyj Abp Com NPV Total Finland

852,030 132,922 483,963 1,431,010 769,087 601,404 101,162

73,721

155,252 169,032 105,285 1,634,482 699,283 408,626

France Broadcasting & entertainmen nt Vivendi SA Com EUR 5.50 Building materials and fixtures Lafarge SA Com EUR 4.00 Engineering & construction Bouygues SA Com EUR 1.00 Fixed line telecommunications France Telecom SA Com EUR 4.00 Insurance AXA SA Com EUR 2.29 SCOR SE Com EUR 7.88 Real estate investment trusts Unibail-Rodamco SE Reits EUR 5.00 Retail PPR Com EUR 4.00 Total France Germany Chemicals BASF SE Com NPV Heavy construction Bilfinger Berger SE Com NPV Insurance Allianz SE Com NPV Mobile telecommuniccations Deutsche Telekom AG Com NPV Multiutilities E.ON AG Com NPV RWE AG Pref NPV

118 iShares plc Annual Report

18,054 18,054

5.18 5.18

7,695

2.21

9,136 8,073 24,904

2.62 2.32 7.15

13,730

3.94

Fair value €'000

% of net asset value

Germany (cont) Reinsurance 111,609 Muenchener Rueckversicherungs AG Com NPV Total Germany

12,199 83,644

3.50 24.02

Ireland Building materials and fixtures 705,690 CRH Plc Com EUR 0.32 Total Ireland

11,309 11,309

3.25 3.25

13,153

3.78

13,494 26,647

3.87 7.65

12,796

3.68

12,005

3.45

Holding Investment

Italy Gas distribution 3,623,407 Snam SpA Com EUR 1.00 Integrated oil & gas 780,004 ENI SpA Com EUR 1.00 Total Italy Netherlands Fixed line telecommunications Koninklijke KPN NV Com EUR 0.24 Food retailers and wholesalers Unilever NV CVS EUR 0.16 Media Wolters Kluwer NV Com EUR 0.12 Oil equipment & services Fugro NV CVS EUR 0.05 Total Netherlands

9,306

2.67

6,761 40,868

1.94 11.74

Portugal Electricity 5,671,923 EDP - Energias de Portugal SA Com EUR 1.00 Total Portugal

12,422 12,422

3.57 3.57

9,283

2.67

9,375

2.69

17,724 36,382

5.09 10.45

345,867

99.33

1,572,963 4,640

1.33 481,527

11,552

3.32

16,385

4.71

9,310 11,944

2.68 3.43

665,903 122,661

14,669

4.21

9,407 91,637

2.70 26.32

10,222

2.94

12,390

3.56

9,549

2.74

14,305

4.11

12,038 12,941

3.46 3.71

Spain Banks 3,836,079 Banco de Sabadell SA Com EUR 0.125 3,050,673 Banco Popular Espanol SA Com EUR 0.10 2,847,223 Banco Santander SA Com EUR 0.50 Totall Spain Total equities

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Financial Derivative Instruments Futures contracts No. of contracts 4 Euro Stoxx 50 Index Futures March 2012 Total unrealised gains on futures contracts

Unrealised % of net gain asset €'000 value 1

0.00

1

0.00

345,868

99.33

Bank overdraft†

(861)

(0.25)

Other net assets

3,197

0.92

348,204

100.00

Adjustment to align to the valuation methodology as set out in the prospectus

(4)

0.00

Net asset value attributable to redeemable participating shareholders at the end of the year

348,,200

100.00

Total value of investments

Net assets attributablle to redeemable participating shareholders

†

Substantially all cash positions are held with State Street Bank and Trust other than €285,556 held as security by the counterparty for futures contracts.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

www.iShares.com

Fair value €'000

% of total current assets

345,867 1 6,025 351,893

98.29 0.00 1.71 100.00

iShares plc Annual Report 119

For the year ended 29 February 2012 The 20 largest sales Holding Investments 7,872,363 Enel SpA Com EUR 1.00 617,088 Wartsila Oyj Abp Com NPV 1,376,363 Deutsche Telekom AG Com NPV 184,518 Fugro NV CVS EUR 0.05 723,363 France Telecom SA Com EUR 4.00 173,472 BASF SE Com NPV 1,405,054 Banco Santander SA Com EUR 0.50 380,353 Belgacom SA Com NPV 3,411,131 Banco de Sabadell SA Com EUR 0.125 149,406 Bilfinger Berger SE Com NPV 477,308 SCOR SE Com EUR 7.88 247,655 Erste Group Bank AG Com NPV 2,255,707 Snam SpA Com EUR 1.00 78,000 PPR Com EUR 4.00 92,350 Allianz SE Com NPV 539,682 Wolters Kluwer NV Com EUR 0.12 801,756 Koninklijke KPN NV Com EUR 0.24 107,120 Vallourec Com EUR 2.00 470,000 ENI SpA Com EUR 1.00 1,244,325 Credit Agricole SA Com EUR 3.00

The 20 largest purchases Proceeds €‘000 28,468 15,110 13,459 10,156 10,024 9,818 9,739 9,154 9,143 9,078 8,823 8,533 8,440 8,411 8,204 8,012 7,994 7,850 7,420 7,092

Holding 8,295,000 147,948 2,221,304 883,808 487,223 308,011 738,323 412,483 295,778 1,758,392 665,557 439,571 375,594 221,624 481,789 1,064,929 37,615 1,395,990 229,184 177,171

Investments EDP - Energias de Portugal SA Com EUR 1.00 Unibail-Rodamco SE Reits EUR 5.00 Banco Santander SA Com EUR 0.50 Vivendi SA Com EUR 5.50 Bouygues SA Com EUR 1.00 RWE AG Pref NPV France Telecom SA Com EUR 4.00 E.ON AG Com NPV Belgacom SA Com NPV Banco Popular Espanol SA Com EUR 0.10 Koninklijke KPN NV Com EUR 0.24 AXA SA Com EUR 2.29 CRH Plc Com EUR 0.32 Unilever NV CVS EUR 0.16 Deutsche Telekom AG Com NPV Snam SpA Com EUR 1.00 Muenchener Rueckversicherungs AG Com NPV Banco de Sabadell SA Com EUR 0.125 ENI SpA Com EUR 1.00 SCOR SE Com EUR 7.88

Cost €‘000 22,344 21,559 17,434 14,361 12,323 11,913 10,490 8,166 7,342 6,928 6,898 5,914 5,703 5,035 4,723 4,031 3,919 3,868 3,732 3,333

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

120 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

8,772

3,050

Net (losses)/gains on financial assets at fair value through profit or loss

3

(42,158)

54,020

(33,386)

57,070

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(1,008)

(933)

(34,394)

56,137

Finance costs: Distributions to redeemable participating shareholders

6

(7,433)

(4,322)

Interest expense

7

(8)

(1)

(7,441)

(4,323)

(41,835)

51,814

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(299)

(354)

(42,134)

51,460

(218)

(181)

(42,352)

51,279

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

308,953

341,015

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(42,352)

51,279

150,950

42,725

(196,967)

(126,066)

Decrease in net assets resulting from share transactions

(46,017)

(83,341)

Net assets attributable to redeemable participating shareholders at the end of the year/period

220,584

308,953

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 121

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

-

2,289

70

-

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

905

247

Financial assets at fair value through profit or loss

12

220,283

308,512

221,258

311,048

Total current assets CURRENT LIABILITIES Bank overdraft

(490)

-

Payables

13

(69)

(2,387)

Distributions to redeemable participating shareholders payable

6

(362)

(173)

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

(921)

(2,560)

220,337

308,488

247

465

220,584

308,953

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10. .

122 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 4 23 8,275 2,701 493 326 8,772 3,050

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net gains on futures contracts Net gains on currency

4.

54,020 54,020

OPERATING EXPENSES

Management fees

5.

(42,176) 12 6 (42,158)

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (1,008) (933) (1,008) (933)

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 October 2010 November 2010 January 2011 February 2011 June 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 €’000 3,380 262 25 326 173 4,166 (95) 251 4,322

Year ended 29 February 2012 €’000 (8) (8)

Period from 12 June 2010 to 28 February 2011 €’000 (1) (1)

INTEREST EXPENSE

Please refer to page 63 for each Fund’s management fee rate. Bank interest

www.iShares.com

Year ended 29 February 2012 €’000 2,641 3,089 315 362 6,407 1,404 (378) 7,433

iShares plc Annual Report 123

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 465 646

(218)

(181)

(218) 247

(181) 465

Further details are set out in the accounting policies note k) on page 30. 9.

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 are classified as financial liabilities.

10.

11.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

12,000,000 6,150,000 (8,250,000) 9,900,000

15,600,000 1,800,000 (5,400,000) 12,000,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS

9,900,000 12,000,000 15,600,000 Share class €’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

124 iShares plc Annual Report

220,584 308,953 341,015

29 February 2012 €’000 12

28 February 2011 €’000 -

28 503

25 222

362 905

247

* Further details are set out on note 11 page 65.

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Unrealised gains on futures contracts

13.

Purchase of securities awaiting settlement Management fees payable

14.

29 February 2012 €’000 220,282

28 February 2011 €’000 308,463

1 220,283

49 308,512

29 February 2012 €’000

28 February 2011 €’000

(69) (69)

(2,288) (99) (2,387)

PAYABLES

No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€22.28 €25.75 €21.86

RECEIVABLES

Dividend income receivable Securities lending income receivable Dividend tax reclaim receivable Distributions payable held with Registrar*

12.

SHARE CAPITAL

Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15.

RELATED PARTIES

The related parties are set out on pages 66 and 67.

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For the year ended 29 February 2012 16.

SECURITIES LENDING

During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

493

326

43,310

38,338

47,719

42,312

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17.

SIGNIFICANT EVENTS DURING THE YEAR

Please refer to note 19 on page 67. 18.

SUBSEQUENT EVENTS

Please refer to note 20 on pages 67 and 68.

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iShares plc Annual Report 125

As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

66,468

185,270 104,132 60,565

1,013,803 1,011,237

88,069

57,285 233,102 44,569 22,115 35,404 29,454

176,436 79,156 201,768 192,017 72,236

Equities Austria Banks Raiffeisen Bank International AG Com NPV Building materials and fixtures Wienerberger AG Com NPV Electricity Verbund AG Com NPV Insurance Vienna Insurance Group AG Wiener Versicherung Gruppe Com NPV Real estate investment & services Immoeast AG Com NPV* Immofinanz AG Com NPV* Total Austria Belgium Broadcasting & entertainment Telenet Group Holding NV Com NPV Diversified industrials Bekaert SA Com NPV Mining Nyrstar Com NPV Mobile telecommunications Mobistar SA Com NPV Real estate investment trusts Cofinimmo Reits NPV Specialty finance Ackermans & van Haaren NV Com NPV Sofina SA Com NPV Total Belgium Finland Engineering & construction YIT Oyj Com NPV Hand & machine tools Konecranes Oyj Com NPV Integrated oil & gas Neste Oil Oyj Com NPV Leisure time Amer Sports Oyj Com NPV Machinery, construction & mining Outotec Oyj Com NPV

126 iShares plc Annual Report

1,813

0.82

1,711

0.78

2,205

1.00

2,017

0.91

7,746

0.00 0.00 3.51

Holding Investment Finland (cont) Media 160,438 Sanoma Oyj Com NPV Pharmaceuticals 151,555 Orion Oyj Class 'B' Com EUR 0.65 Specialty chemicals 160,506 Kemira Oyj Com NPV Total Finland

82,482 399,129 11,368 74,048 33,082 88,983

2,644

1.20

1,432

0.65

1,651

0.75

1,626

0.74

2,002

0.90

51,693 82,479 63,594

35,880 121,523

2,204 1,746 13,305

1.00 0.79 6.03

81,453 41,123 27,285

2,918

1.32

1,881

0.85

1,865

0.85

1,955

0.89

3,323

1.51

189,591

83,705 22,379 43,363

France Advertising JCDecaux SA Com NPV Airlines Air France-KLM Com EUR 1.00 Apparel retailers Hermes International Com NPV Auto parts & equipment Faurecia Com EUR 7.00 Beverages Remy Cointreau SA Com EUR 1.60 Broadcasting & entertainment Metropole Television SA Com EUR 0.40 Building materials and fixtures Imerys SA Com EUR 2.00 Computer services AtoS Com EUR 1.00 Ingenico SA Com EUR 1.00 Electrical compo onents & equipment Nexans SA Com EUR 1.00 Electronics Rexel SA Com EUR 5.00 Energy - alternate sources Areva SA Com EUR 3.80 Home furnishings SEB SA Com EUR 1.00 Internet Iliad SA Com NPV Media Societe Television Francaise 1 Com EUR 0.20 Media agencies Teleperformance SA Com EUR 2.50 Medical equipment BioMerieux Com NPV Nonduurable household products Societe BIC SA Com EUR 3.82

Fair value €'000

% of net asset value

1,575

0.71

2,449

1.11

1,724 17,690

0.78 8.02

1,716

0.78

1,771

0.80

3,184

1.44

1,554

0.71

2,431

1.10

1,171

0.53

2,345

1.06

3,524 2,284

1.60 1.04

1,865

0.85

2,008

0.91

1,588

0.72

2,585

1.17

2,716

1.23

1,697

0.77

1,678

0.76

1,402

0.64

3,265

1.48

www.iShares.com

As at 29 February 2012

Holding Investment

10,576 122,173

65,875 42,196 33,048 35,951 49,221

52,199 27,561 148,356 46,956 55,394

101,963 5,914 190,937 149,052 151,985 62,482 64,665 141,541 53,194 55,981 121,783 92,673 www.iShares.com

France (cont) Nonferrous metals Eramet Com EUR 3.05 Oil & gas Etablissements Maurel et Prom Com EUR 0.77 Oil equipment & services Bourbon SA Com NPV Real estate investment trusts Fonciere Des Regions Reits EUR 3.00 Gecina SA Reits EUR 7.50 ICADE Reits NPV Specialty finance Eurazeo Com NPV Total France Germany Chemicals SGL Carbon SE Com NPV Wacker Chemie AG Com NPV Commercial services Wirecard AG Com NPV Computer services Wincor Nixdorf AG Com NPV Engineering & construction Fraport AG Frankfurt Airport Services Worldwide Com NPV Food products Suedzucker AG Com NPV Footwear Puma SE Com NPV Health care providers Rhoen Klinikum AG Com NPV Industrial metals & mining Kloeckner & Co SE Com NPV Internet United Internet AG Com NPV Machinery — diversified Rheinmetall AG Com NPV Media Axel Springer AG Com EUR 1.00 ProSiebenSat.1 Media AG Pref NPV Nonferrous metals Aurubis AG Com NPV Oil & gas Fuchs Petrolub AG Pref NPV Pharmaceuticals Celesio AG Com NPV Stada Arzneimittel AG Com NPV

Fair value €'000

% of net asset value

1,281

0.58

1,739

0.79

1,795

0.81

2,292 2,372 2,236

1.04 1.08 1.01

1,750 52,249 9

0.79 23.69

Holding Investment Germany (cont) Real estate investment & services 69,332 Deutsche Euroshop AG Com NPV Semiconductors 147,830 Aixtron SE NA Com NPV Software 96,638 Software AG Com NPV Total Germany Greece Telecommunications 386,107 Hellenic Telecommunications Organization SA Com EUR 2.39 Total Greece

27,563,850 1,900 2,043

0.86 0.93

515,741

2,193

0.99

130,965

1,917

0.87

71,912

2,556

1.16

2,214

1.00

1,534

0.69

1,154,848 523,953 4,265,330

2,795

1.27 486,242

1,724

0.78

2,201

1.00

2,846

1.29

2,312 2,754

1.05 1.25

70,131

2,371

1.07

20,775

2,227

1.01

341,528

1,688 2,128

0.77 0.96

449,017

1,979,829

Ireland Banks Governor & Co of the Bank of Ireland Com EUR 0.05 Beverages C&C Group Plc Com EUR 0.01 Business support services DCC Plc Com EUR 0.25 Entertainment Paddy Power Plc Com EUR 0.01 Total Ireland Italy Banks Banca Carige SpA Com NPV Banca Popolare dell'Emilia Romagna Scrl Com EUR 3.00 Banca Popolare di Milano Scarl Com NPV Banca Popolare di Sondrio Scarl Com EUR 3.00 Distillers and vintners Davide Campari-Milano SpA Com EUR 0.10 Electricity A2A SpA Com EUR 0.52 Holding companies - diversified operations Exor SpA Com EUR 1.00 Textile Tod's SpA Com Eur 2.00 Tyres Pirelli & C SpA Com NPV Total Italy

Fair value €'000

% of net asset value

1,790

0.81

1,845

0.84

2,751 43,789

1.25 19.85

915 915

0.41 0.41

3,722

1.69

1,880

0.85

2,515

1.14

3,214 11,331

1.46 5.14

1,328

0.60

3,288

1.49

2,069

0.94

2,995

1.36

2,496

1.13

1,495

0.68

1,297

0.59

1,603

0.73

2,657 19,228

1.20 8.72

iShares plc Annual Report 127

As at 29 February 2012

Holding Investment Luxembourg Media 21,477 RTL Group SA Com NPV Total Luxembourg

586,154 138,924 106,648 48,799 138,242 147,958

56,336 34,250

Netherlands Delivery services PostNL NV Com EUR 0.48 Engineering & construction Imtech NV Com EUR 0.80 Food products CSM Com EUR 0.25 Nutreco NV Com EUR 0.24 Insurrance Delta Lloyd NV Com EUR 0.20 Miscellaneous manufacturers Aalberts Industries NV Com EUR 0.25 Real estate investment trusts Eurocommercial Properties NV Reits EUR 0.50 Wereldhave NV Reits EUR 10.00 Total Netherlands

Portugal Banks 8,194,350 Banco Comercial Portugues SA Com EUR 1.00 1,372,018 Banco Espirito Santo SA Com NPV Total Portugal

379,859 155,282 132,610 49,529

970,721 121,672 69,987 42,530 1,089,922

Spain Banks Bankinter SA Com EUR 0.30 Computer services Indra Sistemas SA Com EUR 0.20 Electricity Endesa SA Com EUR 1.20 Engineering & construction Tecnicas Reunidas SA Com EUR 0.10 Food Distribuidora Internacional de Alimentacion SA Com NPV Ebro Foods SA Com EUR 0.60 Viscofan SA Com EUR 0.70 Heavy construction Acciona SA Com EUR 1.00 Insurance Mapfre SA Com EUR 0.10

128 iShares plc Annual Report

Fair value €'000

1,635 1,635

% of net asset value

0.74 0.74

Holding Investment

109,537

164,417 2,604

1.18

226,467

3,487

1.58

265,486

1,507 2,744

0.68 1.25

236,794

1,925

0.87

2,243

1.02

1,521 1,920 17,951

0.69 0.87 8.14

Spain (cont) Investment services Bolsas y Mercados Espanoles SA Com EUR 3.23 Iron & steel Acerinox SA Com EUR 0.25 Machinery — diversiified Zardoya Otis SA Com EUR 0.10 Media Mediaset Espana Comunicacion SA Com EUR 0.50 Pharmaceuticals Grifols SA Com EUR 0.50 Total Spain Total equities

Fair value €'000

% of net asset value

2,195

0.99

1,759

0.80

2,290

1.04

1,189

0.54

3,694 30,797

1.67 13.96

220,282

99.8 86

Financial Derivative Instruments Futures Contracts

1,393 2,253 3,646

0.63 1.02 1.65

1,763

0.80

1,482

0.67

2,042

0.93

1,496

0.68

3,563 1,835 2,166

1.62 0.83 0.98

2,511

1.14

2,812

1.27

Unrealised gain €’000

% of net asset value

1

0.00

1

0.00

220,283

99.86

Bank overdraft†

(420)

(0.19)

Other net assets

474

0.22

220,337

99.89

Adjustment to align to the valuation methodology as set out in the prospectus

247

0.11

Net asset value attributable to redeemable participating shareholders at the end of the year

220,584

100.00

No of contracts 2 Euro Stoxx 50 Index Futures March 2012 Total unrealised gainss on futures contracts Total value off investments

Net assets attributable to redeemable participating shareholders

† Substantially all cash positions are held with State Street Bank and Trust other than €69,594 held as security by the counterparty for futures contracts. * Investments which are less than €500 are rounded to zero.

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As at 29 February 2012 Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

www.iShares.com

Fair value €'000

% of total current assets

220,282

99.56

1 975 221,258

0.00 0.44 100.00

iShares plc Annual Report 129

For the year ended 29 February 2012 The 20 largest sales Holding Investments 272,557 Rhodia SA Com EUR 1.00 3,767,273 Enel Green Power SpA Com EUR 0.20

The 20 largest purchases Proceeds €‘000 8,352 7,262

571,577 Jeronimo Martins SGPS SA Com EUR 1.00

7,243

171,560 Kabel Deutschland Holding AG Com NPV

Cost €‘000

Holding Investments 3,767,273 Enel Green Power SpA Com EUR 0.20

6,947

171,560 Kabel Deutschland Holding AG Com NPV

6,430

2,015,176 Banco Espirito Santo SA Com NPV

4,895

7,098

379,170 Bulgari SpA Com EUR 0.07

4,661

93,093 Brenntag AG Com NPV

6,814

259,761 Rhoen Klinikum AG Com NPV

4,227

99,359 Andritz AG Com NPV

6,629

1,558,718 Dexia SA Com NPV

4,183

132,297 MTU Aero Engines Holding AG Com NPV

6,401

108,847 Zodiac Aerospace Com NPV

6,374

171,794 Koninklijke Vopak NV Com 0.50

6,282

259,468 Aalberts Industries NV Com EUR 0.25

3,993

308,445 Edenred Com EUR 2.00

5,729

661,364 Banca Popolare Di Sondrio Scarl Com EUR 3.00

3,782

88,376 Wendel Com EUR 4.00

5,475

555,001 Banca Popolare dell' Emilia Romagna Scrl Com EUR 3.00

3,372

364,487 Amadeus IT Holding SA EUR 0.001

4,825

711,295 Dragon Oil Plc Com EUR 0.10

4,048

252,903 Bulgari SpA Com EUR 0.07

3,090

70,714 Software AG Com NPV

3,086

47,431 Axel Springer AG Com EUR 1.00

4,117

1,278,472 Distribuidora Internacional de Alimentacion SA Com NPV

4,102

20,131 Hermes International Com NPV

3,275

43,520 Brenntag AG Com NPV

3,259

4,753,827 Kenmare Resources Plc Com EUR 0.06 13,702,298 Governor & Co Bank of Ireland Com EUR 0.05

3,199 2,918

129,071 Imtech NV Com EUR 0.80

3,053

315,938 Nyrstar Com NPV

2,889

81,949 SGL Carbon SE Com NPV

3,043

164,212 Rexel SA Com EUR 5.00

2,598

3,018

67,017 Bekaert SA Com NPV

2,506

225,958 United Internet AG Com NPV 56,306 Rheinmetall AG Com NPV

2,961

102,161 Imtech NV Com EUR 0.80

2,474

74,343 Atos Com EUR 1.00

2,879

123,546 Exor Spa Com EUR 1.00

2,460

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

130 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

2,563

354

Net (losses)/gains on financial assets at fair value through profit or loss

3

(8,798)

7,309

(6,235)

7,663

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(292)

(162)

(6,527)

7,501

Finance costs: (2,226)

(334)

Total finance costs

Distributions to redeemable participating shareholders

6

(2,226)

(334)

Net (loss)/profit for the financial year/period before tax

(8,753)

7,167

(71)

(17)

(8,824)

7,150

(28)

-

(8,852)

7,150

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

7

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period (Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

104,719

34,260

(8,852)

7,150

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares (Decrease)/increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

40,299

67,910

(88,506)

(4,601)

(48,207)

63,309

47,660

104,719

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

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iShares plc Annual Report 131

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

-

300

24

-

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

10

219

42

Financial assets at fair value through profit or loss

11

47,640

104,626

47,883

104,968

Total current assets CURRENT LIABILITIES Bank overdraft

(44)

-

Payables

12

(15)

(27)

Distributions to redeemable participating shareholders payable

6

(183)

(269)

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

(242)

(296)

47,641

104,672

7

19

47

47,660

104,719

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 9.

132 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 2 2 2,419 335 142 17 2,563 354

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on futures contracts Net gains on currency

4.

7,309 7,309

OPERATING EXPENSES

Management fees

5.

(8,796) (3) 1 (8,798)

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (292) (162) (292) (162)

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

Year ended 29 February 2012 €’000 1,138 474 98 183 1,893 (140) 473 2,226

Period from 12 June 2010 to 28 February 2011 €’000 229 269 498 (169) 5 334

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 12 respectively. Please refer to page 63 for each Fund’s management fee rate.

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iShares plc Annual Report 133

For the year ended 29 February 2012 7.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 47 47

(28)

-

(28) 19

47

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€21.66 €23.27 €20.15

10. RECEIVABLES

Dividend income receivable Securities lending income receivable Dividend tax reclaim receivable Interest receivable Distributions payable held with Registrar*

29 February 2012 €’000 1

28 February 2011 €’000 24

3 32 -

9 7 2

183 219

42

Further details are set out in the accounting policies note k) on page 30.

* Further details are set out on note 11 page 65.

8.

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period 9.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

4,500,000 1,900,000 (4,200,000) 2,200,000

1,700,000 3,000,000 (200,000) 4,500,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares

Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

2,200,000 4,500,000 1,700,000

Financial assets: Investment in equities

29 February 2012 €’000 47,640 47,640

28 February 2011 €’000 104,626 104,626

29 February 2012 €’000 (15) (15)

28 February 2011 €’000 (27) (27)

12. PAYABLES

Management fees payable

13. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 14. RELATED PARTIES The related parties are set out on pages 66 and 67.

€’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

134 iShares plc Annual Report

47,660 104,719 34,260

www.iShares.com

For the year ended 29 February 2012 15. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

142

17

150

178

165

195

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

16. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 17. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

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iShares plc Annual Report 135

As at 29 February 2012

Holding Investtment

Fair value €'000

% of net asset value

64,896 13,544 13,364

2,941 2,941

6.17 0.00 6.17

16,378 9,084

4,881

4,372 564 15,679 22,305

43,065

48,081 16,725

20,971

16,164 18,707

16,427 25,229 6,230 69,954 4,173

301,078

France Apparel retailers Christian Dior SA Com EUR 2.00 Hermes International Com NPV Beverages Pernod-Ricard SA Com EUR 1.55 Chemicals Air Liquide SA Com EUR 5.50 Electrical components & equipment Schneider Electric SA Com EUR 4.00 Food Danone Com EUR 0.25 Healthcare products Cie Generale d'Optique Essilor International SA Com EUR 0.18 Holding companies - diversified operations LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 Machinery — diversified Alstom SA Com EUR 7.00 Personal products L'Oreal SA Com EUR 0.20 Total France Germany Apparel retailers Adidas AG Com NPV Auto manufacturers Bayerische Motoren Werke AG Com EUR 1.00 Continental AG Com NPV Daimler AG Com NPV Automobiles Bayerische Motoren Werke AG Pref EUR 1.00 Banks Commerzbank AG Com NPV

136 iShares plc Annual Report

67,740 508 158

1.07 0.33

1,218

2.55

2,175

4.56

9,674 13,989 7,824 72,540

2,197

4.61

2,441

5.12

1,000

2.10

2,687

5.64

523

1.10

1,600 14,507

3.36 30.44

967

1,744 427 3,175

% of net asset value

3,594 505 1,666

7.54 1.06 3.49

861

1.81

706

1.48

421

0.88

5,060

10.61

395 683

0.83 1.43

368

0.77

3,663 24,986

7.69 52.42

315

0.66

750 1,065

1.58 2.24

720

1.51

1,161

2.44

1,107 2,988

2.32 6.27

1,153 1,153

2.42 2.42

Total equities

47,640

99.96

Total value of investments

47,640

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market Equities Belgium Beverages 58,369 Anheuser-Busch InBev NV Com NPV 19,528 Anheuser-Busch InBev NV NPV WPR Strip* Total Belgium

Fair value €'000

Germany (cont) Chemicals Bayer AG Com NPV K&S AG Com NPV Linde AG Com NPV Health care providers Fresenius Medical Care AG & Co KGaA Com NPV Fresenius SE & Co KGaA Com NPV Machinery — diversified MAN SE Com NPV Miscellaneous manufacturers Siemens AG Com NPV Nondurable household products Henkel AG & Co KGaA Com NPV Henkel AG & Co KGaA Pref NPV Personal products Beiersdorf AG Com NPV Software SAP AG Com NPV Total Germany

Italy Healthcare products 11,700 Luxottica Group SpA Com EUR 0.06 Oil equipment & services 19,773 Saipem SpA Com EUR 1.00 Total Italy Netherlands Beverages 18,201 Heineken NV Com EUR 1.60 Electronics 73,720 Koninklijke Philips Electronics NV Com EUR 0.20 Semiconductors 32,097 ASML Holding NV Com EUR 0.09 Total Netherlands

2.03

3.66 0.90 6.66

185

0.39

566

1.19

Spain Apparel retailers 16,636 Inditex SA Com EUR 0.15 Total Spain

99.96

www.iShares.com

As at 29 February 2012 Fair value €'000

% of net asset value

Bank overdraft†

(20)

(0.04 4)

Other net assets

21

0.04 4

47,641

99.96

19

0.04

Holding Investment

Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

47,660 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company other than €24,409 held as security by the counterparty to futures contracts. * Investments which are less than €500 are rounded to zero.

Fair value €’000

% of total current assets

Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets

47,640 243

99.49 0.51

Total current assets

47,883

100.00

Analysis of total current assets and gross of all liabilities (unaudited)

www.iShares.com

iShares plc Annual Report 137

For the year ended 29 February 2012 The 20 largest sales Holding 172,382 449,095 186,064 200,564 207,982 167,349 64,008 51,792 122,357 56,291 386,400 4,721,189 47,608 228,902 33,604 64,258 175,869 344,684 47,692 240,497

Investments Siemens AG Com NPV Unilever NV CVS EUR 0.16 Bayer AG Com NPV Daimler AG Com NPV SAP AG Com NPV Anheuser-Busch Inbev NV Com NPV Schneider Electric SA Com EUR 4.00 LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 Danone Com EUR 0.25 Air Liquide SA Com EUR 5.50 Assicurazioni Generali SpA Com EUR 1.00 Unicredit SpA Com EUR 0.50 L'Oreal SA Com EUR 0.20 Koninklijke Philips Electronics NV Com EUR 0.20 Linde AG Com NPV Bayerische Motoren Werke AG Com EUR 1.00 Carrefour SA Com EUR 2.50 Koninklijke Ahold NV Com EUR 0.30 Inditex SA Com EUR 0.15 Deutsche Post AG Com NPV

The 20 largest purchases Proceeds €‘000 15,202 10,202 9,411 9,150 8,418 6,560 5,899 5,575 5,398 5,075 4,811 4,764 3,745 3,670 3,639 3,590 3,562 3,031 2,970 2,741

Holding Investm ments 117,881 Siemens AG Com NPV 4,721,189 Unicredit SpA Com EUR 0.50 133,802 Bayer AG Com NPV 144,223 Daimler AG Com NPV 149,558 SAP AG Com NPV 229,095 Unilever NV CVS EUR 0.16 120,395 Anheuser-Busch Inbev NV Com NPV 36,285 LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 83,673 Danone Com EUR 0.25 38,750 Air Liquide SA Com EUR 5.50 162,972 Koninklijke Philips Electronics NV Com EUR 0.20 68,806 Schneider Electric SA Com EUR 4.00 240,497 Deutsche Post AG Com NPV 197,199 Assicurazioni Generali SpA Com EUR 1.00 89,567 Carrefour SA Com EUR 2.50 43,912 Bayerische Motoren Werke AG Com EUR 1.00 32,554 L'Oreal SA Com EUR 0.20 23,202 Linde AG Com NPV 635,159 Alcatel-Lucent Com EUR 2.00 80,900 Safran SA Com EUR 0.20

Cost €‘000 8,633 7,922 6,974 6,569 6,146 4,963 4,789 4,122 3,743 3,436 3,306 3,302 2,947 2,871 2,637 2,508 2,458 2,425 2,290 2,039

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

138 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

2,587

902

Net (losses)/gains on financial assets at fair value through profit or loss

3

(13,621)

6,351

(11,034)

7,253

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(183)

(144)

(11,217)

7,109

Finance costs: Distributions to redeemable participating shareholders

6

(2,293)

(1,386)

Interest expense

7

(2)

-

(2,295)

(1,386)

(13,512)

5,723

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(114)

(91)

(13,626)

5,632

14

(41)

(13,612)

5,591

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period (Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

62,348

54,194

(13,612)

5,591

20,713

20,547

Share transactions: Proceeds from issue of redeemable participating shares

(30,270)

(17,984)

(Decrease)/increase in net assets resulting from share transactions

Payments on redemption of redeemable participating shares

(9,557)

2,563

Net assets attributable to redeemable participating shareholders at the end of the year/period

39,179

62,348

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

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iShares plc Annual Report 139

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

-

124

48

-

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

407

112

Financial assets at fair value through profit or loss

12

39,114

62,358

39,569

62,594

Total current assets CURRENT LIABILITIES Bank overdraft

(186)

-

Payables

13

(13)

(19)

Distributions to redeemable participating shareholders payable

6

(215)

(237)

Totaal current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable particip pating shareholders at the end of the year/period

8

(414)

(256)

39,155

62,338

24

10

39,179

62,348

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

140 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 2 1 2,515 869 70 32 2,587 902

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on futures contracts

4.

6,351 6,351

OPERATING EXPENSES

Management fees

5.

(13,614) (7) (13,621)

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (183) (144) (183) (144)

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 October 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 €’000 788 91 178 237 1,294 (113) 205 1,386

INTEREST EXPENSE

Please refer to page 63 for each Fund’s management fee rate. Bank interest

www.iShares.com

Year ended 29 February 2012 €’000 944 740 335 215 2,234 (120) 179 2,293

Year ended 29 February 2012 €’000 (2) (2)

Period from 12 June 2010 to 28 February 2011 €’000 -

iShares plc Annual Report 141

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 10 51

14

(41)

14 24

(41) 10

Further details are set out in the accounting policies note k) on page 30. 9.

11.

Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

2,900,000 1,100,000 (1,700,000) 2,300,000

2,800,000 1,000,000 (900,000) 2,900,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares

Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

2,300,000 2,900,000 2,800,000

€17.03 €21.50 €19.36

RECEIVABLES

Dividend income receivable Dividend tax reclaim receivable Distributions payable held with Registrar*

29 February 2012 €’000 190 2

28 February 2011 €’000 6 106

215 407

112

* Further details are set out on note 11 page 65.

12.

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

SHARE CAPITAL

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 are classified as financial liabilities.

10.

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

Financial assets: Investment in equities

13.

28 February 2011 €’000 62,358 62,358

29 February 2012 €’000 (13) (13)

28 February 2011 €’000 (19) (19)

PAYABLES

Management fees payable

14.

29 February 2012 €’000 39,114 39,114

COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15.

RELATED PARTIES

The related parties are set out on pages 66 and 67.

€’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

142 iShares plc Annual Report

39,179 62,348 54,194

www.iShares.com

For the year ended 29 February 2012 16.

SECURITIES LENDING

During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

70

32

-

1,763

-

1,943

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17.

SIGNIFICANT EVENTS DURING THE YEAR

Please refer to note 19 on page 67. 18.

SUBSEQUENT EVENTS

Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 143

As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market Equities Austria Integrated oil & gas 6,073 OMV AG Com NPV Total Austria Belgium Specialty finance 3,427 Groupe Bruxelles Lambert SA Com NPV Telecommunications 5,954 Belgacom SA Com NPV Total Belgium Finland Electricity 18,545 Fortum Oyj Com EUR 3.40 Property & casualty insurance 20,574 Sampo Oyj Com NPV Telecommunications 159,379 Nokia Oyj Com NPV Total Finland

8,796 42,488 46,854 33,029

52,625 18,453 7,892 11,903 56,726 10,567 81,228

78,914 5,915

France Automobiles Renault SA Com EUR 3.81 Banks BNP Paribas SA Com EUR 2.00 Credit Agricole SA Com EUR 3.00 Societe Generale SA Com EUR 1.25 Broadcasting & entertainment Vivendi SA Com EUR 5.50 Building materials and fixtures Cie de St-Gobain Com EUR 4.00 Lafarge SA Com EUR 4.00 Electricity EDF SA Com EUR 0.50 GDF Suez Com EUR 1.00 Engineering & construction Bouygues SA Com EUR 1.00 Fixed line telecommunications France Telecom SA Com EUR 4.00 Insurance AXA SA Com EUR 2.29 CNP Assurances Com EUR 1.00

144 iShares plc Annual Report

171 171

0.44 0.44

Holding Investment France (cont) Integrated oil & gas 94,506 Total SA Com EUR 2.50 Real estate investment trusts 3,883 Unibail-Rodamco SE Reits EUR 5.00 Total France

1,234 6,123 193

0.49

144 337

0.37 0.86

39,634 19,251 126,792 345

0.88

435

1.11

628 1,408

1.60 3.59

349

0.89

1,557 225

3.97 0.58

801

2.04

848

2.17

85,160 20,590 1,657 6,851

Ireland Building materials and fixtures 30,874 CRH Plc Com EUR 0.32 Total Ireland

594,554 39,625 658 275

1.68 0.70

223 1,104

0.57 2.82

252

0.64

271,223 441,620 256,066

67,526 930

2.37

955 64

2.44 0.16

Germany Auto manufacturers Volkswagen AG Com NPV Volkswagen AG Pref NPV Banks Deutsche Bank AG Com NPV Insurance Allianz SE Com NPV Mobile telecommunications Deutsche Telekom AG Com NPV Multiutilities E.ON AG Com NPV RWE AG Com NPV RWE AG Pref NPV Reinsurance Muenchener Rueckversicherungs AG Com NPV Total Germany

112,799

Italy Banks Intesa Sanpaolo SpA Com EUR 0.52 Intesa Sanpaolo SpA (Non CNV) Com EUR 0.52 Electricity Enel SpA Com EUR 1.00 Fixed line telecommunications Telecom Italia SpA Com EUR 0.55 Telecom Italia SpA Com EUR 0.55 Non-Voting Gas distribution Snam Rete Gas SpA Com EUR 1.00 Integrated oil & gas ENI SpA Com EUR 1.00

Fair value €'000

% of net asset value

3,968

10.13

563 12,772

1.44 32.60

156 859

0.40 2.19

1,389

3.55

1,746

4.46

1,110

2.83

1,466 702 53

3.74 1.79 0.14

749 8,230

1.91 21.01

495 495

1.26 1.26

868

2.22

47

0.12

816

2.08

382

0.97

180

0.46

245

0.63

1,952

4.98

www.iShares.com

As at 29 February 2012

Holding Investment Italy (cont) Transportation services 13,420 Atlantia SpA Com EUR 1.00 Total Italy Luxembourg Industrial metals & mining 39,314 ArcelorMittal Com NPV Media 580 RTL Group SA Com NPV Total Luxembourg

9,859 62,881

73,837 164,355

Netherlands Chemicals Akzo Nobel NV Com EUR 2.00 Fixed line telecommunications Koninklijke KPN NV Com EUR 0.24 Insurance Aegon NV Com EUR 0.12 ING Groep NV CVS EUR 0.24 Total Netherlands

Portugal Electricity 93,793 EDP - Energias de Portugal SA Com EUR 1.00 Total Portugal

205,337 364,749 30,215 15,091

3,572 155,772 169,375 13,341

6,072

www.iShares.com

Spain Banks Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 Banco Santander SA Com EUR 0.50 CaixaBank Com EUR 1.00 Commercial services Abertis Infraestructuras SA Com EUR 3.00 Electricity Endesa SA Com EUR 1.20 Iberdrola SA Com EUR 0.75 Fixed line telecommunications Telefonica SA Com EUR 1.00 Gas distribution Gas Natural SDG SA Com EUR 1.00 Heavy construction ACS Actividades de Construccion y Servicios SA Com EUR 0.50

Fair value €'000

168 4,658 8

% of net asset value

Holding Investment

Fair value €'000

% of net asset value

682 7,856

1.74 20.05

39,114

99.83

Spain (cont) Integrated oil & gas 34,827 Repsol YPF SA Com EUR 1.00 Total Spain

0.43 11.89

Total equities 622

1.59

Financial Derivative Instruments

44 666

0.11 1.70

Futures contracts

419

No of contracts 1 Euro Stoxx 50 Index Futures March 2012* Tottal unrealised gains on futures contracts

1.07

Unrealised % of net gain assets €'000 value -

0.00

-

0.00

39,114

99.83

512

1.31

Total value of investments

290 1,094 2,315

0.74 2.79 5.91

Bank overdraft†

(138)

(0.35)

Other net assets

179

0.46

39,155

99.94

24

0.06

39,179

100.00

Net assets attributable to redeemable participating shareholders 206 206

0.52 0.52

1,382

3.53

2,270 107

5.79 0.27

193

0.49

55 692

0.14 1.77

2,170

5.54

169

0.43

136

0.35

Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year †

Substantially all cash positions are held with State Street Bank and Trust Company other than €48,012 held as security by the counterparty for futures contracts. * Investments which are less than €500 are rounded to zero.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

Fair value €'000

% of total current assets

39,114 455 39,569

98.85 1.15 100.00

iShares plc Annual Report 145

For the year ended 29 February 2012 The 20 largest sales Holding Investments 92,096 113,150 247,529 519,748 69,176 283,375 128,527 50,864 23,048 101,949 184,920 118,452 396,388 43,332 67,911 115,344 47,447 245,417 700,901 232,468

Sanofi-Avensis Com EUR 2.00 Total SA Com EUR 2.50 Telefonica SA Com EUR 1.00 Banco Santander SA Com EUR 0.50 BASF SE Com NPV Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 ENI SpA Com EUR 1.00 BNP Paribas Com EUR 2.00 Allianz SE Com NPV E.ON AG Com NPV Deutsche Telekom AG Com NPV France Telecom SA Com EUR 4.00 Enel SpA Com EUR 1.00 Vinci SA Com EUR 2.50 GDF Suez Com EUR 1.00 AXA SA Com EUR 2.29 Deutsche Bank AG Com NPV Iberdrola SA Com EUR 0.75 Intesa Sanpaolo SpA Com EUR 0.52 Nokia Oyj Com NPV

The 20 largest puurchases Proceeds €‘000 4,540 4,155 4,108 4,054 3,523 2,298 1,931 1,921 1,827 1,804 1,756 1,713 1,546 1,535 1,527 1,526 1,502 1,388 1,380 1,288

Cost €‘000

Holding Investments 69,176 94,293 213,735 459,293 42,386 116,919 19,206 34,969 84,952 259,098 39,539 56,590 12,440 160,003 164,379 102,490 31,912 7,890 342,234 99,580

BASF SE Com NPV Total SA Com EUR 2.50 Telefonica SA Com EUR 1.00 Banco Santander SA Com EUR 0.50 BNP Paribas Com EUR 2.00 ENI SpA Com EUR 1.00 Allianz SE Com NPV Sanofi-Avensis Com EUR 2.00 E.ON AG Com NPV Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 Deutsche Bank AG Com NPV GDF Suez EUR Com 1.00 Volkswagen AG Pref NPV Deutsche Telekom AG Com NPV ING Groep NV CVS EUR 0.24 France Telecom SA Com EUR 4.00 Societe Generale SA Com EUR 1.25 Unibail Rodamco SE Reits EUR 5.00 Enel SpA Com EUR 1.00 AXA SA Com EUR 2.29

4,012 3,790 3,046 2,746 2,031 1,934 1,793 1,754 1,753 1,578 1,514 1,443 1,404 1,391 1,328 1,258 1,250 1,158 1,097 1,000

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

146 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Year ended 29 February 2012 £’000

Period ended 28 February 2011* £’000

Operating income

2

134,975

67,411

Net (losses)/gains on financial assets/liabilities at fair value through profit or loss

3

(94,271)

529,400

40,704

596,811

(13,805)

(10,291)

26,899

586,520

Total gains Operating expenses

4

Net operating profit Finance costs: Distributions to redeemable participating shareholders

6

(114,077)

(56,883)

Interest expense

7

(19)

(26)

(114,096)

(56,909)

(87,197)

529,611

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(1,182)

(789)

(88,379)

528,822

1,360

(1,378)

(87,019)

527,444

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period (Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 £’000

Period ended 28 February 2011* £’000

3,722,763

3,239,853

(87,019)

527,444

-

70,718

(149,059)

(115,252)

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Decrease in net assets resulting from share transactions

(149,059)

(44,534)

Net assets attributable to redeemable participating shareholders at the end of the year/period

3,486,685

3,722,763

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

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iShares plc Annual Report 147

As at 29 February 2012 Notes

29 February 2012 £’000

28 February 2011 £’000

Cash and cash equivalents

3,974

17,062

Margin cash account

1,223

1,346

CURRENT ASSETS

Receivables

11

36,245

15,341

Financial assets at fair value through profit or loss

12

3,461,417

3,705,001

3,502,859

3,738,750

Total current assets CURRENT LIABILITIES Payables

13

(1,108)

(1,167)

Distributions to redeemable participating shareholders payable

6

(15,849)

(14,081)

Financial liabilities at fair value through profit or loss

12

-

(162)

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

(16,957)

(15,410)

3,485,902

3,723,340 0

783

(577)

3,486,685

3,722,763

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

148 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, TAX, SOFT COMMISSIONS AND EXCHANGE RATES

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 £’000 £’000 52 42 134,130 67,242 793 127 134,975 67,411

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 £’000 £’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net (losses)/gains on futures contracts Net gains on currency

4.

528,253

(4,703) 92 (94,271)

1,007 140 529,400

OPERATING EXPENSES

Management fees

5.

(89,660)

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 £’000 £’000 (13,805) (10,291) (13,805) (10,291)

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Please refer to page 63 for each Fund’s management fee rate.

www.iShares.com

Period from 12 June 2010 to 28 February 2011 £’000 21,950 20,647 14,081 56,678 (267) 472 56,883

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

Year ended 29 February 2012 £’000 39,389 34,061 23,594 15,849 112,893 1,184 114,077

Bank interest

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 £’000 £’000 (19) (26) (19) (26)

iShares plc Annual Report 149

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 £’000 £’000 (577) 801

1,360

(1,378)

1,360 783

(1,378) (577)

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

622,419,707 (26,600,000) 595,819,707

627,819,707 14,000,000 (19,400,000) 622,419,707

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 11. RECEIVABLES

Deposit interest receivable Dividend income receivable Securities lending income receivable Distributions payable held with Registrar*

No. of Shares 595,819,707 622,419,707 627,819,707 £’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

150 iShares plc Annual Report

3,486,685 3,722,763 3,239,853

29 February 2012 £’000 4 20,117 275

28 February 2011 £’000 2 15,313 26

15,849 36,245

15,341

* Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Unrealised gains on futures contracts

29 February 2012 £’000 3,461,371 46 3,461,417

28 February 2011 £’000 3,705,001 3,705,001

-

(162) (162)

29 February 2012 £’000 (1,108) (1,108)

28 February 2011 £’000 (1,167) (1,167)

Financial liabilities: Unrealised losses on futures contracts

13. PAYABLES

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

£5.85 £5.98 £5.16

Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

www.iShares.com

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 £’000

28 February 2011 £’000

793

127

74,181

19,122

81,658

21,219

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 151

As at 29 February 2012

Holding Investment

Fair value £'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 3,526,940 Equities Guernsey Specialty finance 3,131,956 Resolution Ltd Com NPV Total Guernsey Ireland Building materials and fixtures 1,610,656 CRH Plc Com EUR 0.32 Total Ireland

2,864,114 2,275,717 642,477 3,150,968 653,193 206,889

589,141 1,272,961

Jersey Advertising WPP Plc Com GBP 0.10 Commercial services Experian Plc Com USD 0.10 Distribution & wholesale Wolseley Plc Com GBP 0.10 Mining Glencore International Plc Com USD 0.01 Polymetal International Plc Com NPV Randgold Resources Ltd Com USD 0.05 Oil & gas services Petrofac Ltd Com USD 0.02 Pharmaceuticals Shire Plc Com GBP 0.05 Total Jersey

Spaain Airlines 4,221,401 International Consolidated Airlines Group SA Com EUR 0.50 Total Spain

1,766,158 4,259,776

997,561 395,110

United Kingdom Aerospace Meggitt Plc Com GBP 0.05 Rolls-Royce Holdings Plc Com GBP 0.20 Apparel retailers Burberry Group Plc Com GBP 0.0005 Next Plc Com GBP 0.10

152 iShares plc Annual Report

27,720,181 40,548,808 8,406 8,406

0.24 0.24

91,405,115 40,436,497

21,647 21,647

0.62 0.62

5,410,552

5,732,140 2,707,828 23,013

0.66

21,494

0.62

15,651

0.45

13,609

0.39

7,080

0.20

14,886

0.43

9,368

0.27

27,967 133,068

0.80 3.82

3,610,537

488,563

603,546 746,761 1,395,473 3,204,787 361,198 1,130,759 1,992,071 7,383,024 806,692 12,580,569

6,932 6,932

0.20 0.20

3,456,327 2,120,109

6,824

0.20

34,675

0.99

14,086 10,948

0.41 0.31

539,732 4,201,526 128,297 385,789

United Kingdom (cont) Auto parts GKN Plc Com GBP 0.10 Banks Barclays Plc Com GBP 0.25 HSBC Holdings Plc Com USD 0.50 Lloyds Banking Group Plc Com GBP 0.10 Royal Bank of Scotland Group Plc Com GBP 0.25 Standard Chartered Plc Com USD 0.50 Beverages Diageo Plc Com GBP 0.29 SABMiller Plc Com USD 0.10 Broadline retailers Marks & Spencer Group Plc Com GBP 0.25 Chemicals Johnson Matthey Plc Com GBP 1.00 Commercial services Aggreko Plc Com GBP 0.14 Bunzl Plc Com GBP 0.32 Capita Plc Com GBP 0.02 G4S Plc Com GBP 0.25 Intertek Group Plc Com GBP 0.01 Serco Group Plc Com GBP 0.02 Containers & packaging Rexam Plc Com GBP 0.64 Defence BAE Systems Plc Com GBP 0.03 Diversified financial services Ashmore Group Plc Com GBP 0.0001 Old Mutual Plc Com GBP 0.10 Electricity International Power Plc Com GBP 0.005 SSE Plc Com GBP 0.50 Financial services Hargreaves Lansdown Plc Com GBP 0.004 Man Group Plc Com USD 0.03 Schroders Plc Com GBP 1.00 Non-Voting Schroders Plc Com GBP 1.00 Voting

Fair value £'000

% of net asset value

7,717

0.22

67,914

1.95

225,168

6.46

31,914

0.91

11,290

0.32

87,516

2.51

86,125 68,982

2.47 1.98

13,099

0.38

11,276

0.32

13,356 7,184 10,703 9,268 8,355 6,276

0.38 0.21 0.31 0.26 0.24 0.18

8,257

0.24

23,057

0.66

3,112 20,016

0.09 0.57

11,924 27,328

0.34 0.79

2,311 5,496

0.07 0.16

1,566

0.04

5,957

0.17

www.iShares.com

As at 29 February 2012

Holding Investment

901,224 4,277,337 4,246,136 1,060,473 18,097,603 2,981,678 5,862,546

8,100,078 11,725,092 3,017,630 897,452 4,806,692 879,206 487,244 3,286,627 301,538 5,060,326 2,020,198

659,947 399,880 728,429 477,907 457,930 6,611,385 13,339,703 5,743,520 8,021,394 5,356,356 7,667,736 42,882,505 www.iShares.com

United Kingdom (cont) Food Associated British Foods Plc Com GBP 0.057 Compass Group Plc Com GBP 0.10 J Sainsbury Plc Com GBP 0.29 Tate & Lyle Plc Com GBP 0.25 Tesco Plc Com GBP 0.05 Unilever Plc Com GBP 0.03 WM Morrison Supermarkets Plc Com GBP 0.10 Gas National Grid Plc Com GBP 0.11 Gass distribution Centrica Plc Com GBP 0.06 General mining Anglo American Plc Com USD 0.55 Antofagasta Plc Com GBP 0.05 BHP Billiton Plc Com USD 0.50 Eurasian Natural Resources Corp Plc Com USD 0.20 Kazakhmys Plc Com GBP 0.20 Rio Tinto Plc Com GBP 0.10 Vedanta Resources Plc Com USD 0.10 Xstrata Plc Com USD 0.50 Healthcare products Smith & Nephew Plc Com USD 0.20 Hotels Intercontinental Hotels Group Plc Com GBP 0.14 Whitbread Plc Com GBP 0.77 Industrial machinery IMI Plc Com GBP 0.25 Weir Group Plc Com GBP 0.13 Insurance Admiral Group Plc Com GBP 0.001 Aviva Plc Com GBP 0.25 Legal & General Group Plc Com GBP 0.025 Prudential Plc Com GBP 0.05 RSA Insurance Group Plc Com GBP 0.28 Standard Life Plc Com GBP 0.10 Integrated oil & gas BG Group Plc Com GBP 0.10 BP Plc Com USD 0.25

Fair value £'000 0

% of net asset value

Holding Investment

8,286,878 10,797

Fair value £'000 0

0.31 6,114,349

26,926 12,666 7,397 57,197 60,528

0.77 0.36 0.21 1.64 1.74

1,488,526

16,996

0.49

488,580

51,962

1.49

2,991,864

35,633

1.02

8,850,954 1,850,470 2,767,314

79,952 11,927 97,936

2.29 0.34 2.81

6,159 5,404 117,793

0.18 0.16 3.38

4,342 60,724

0.12 1.74

12,475

0.36

9,464 6,778

0.27 0.20

7,058 10,065

0.20 0.29

4,904 24,350

0.14 0.70

16,101 40,923

0.46 1.17

8,759 12,454

0.25 0.36

116,281 211,153

3.33 6.06

912,470

489,638 892,208 114,954,553

1,649,635

1,252,848 889,638 2,056,992 754,494 2,967,402 11,565,201

2,013,554 1,466,275 1,610,314 1,772,015

5,330,783 3,060,352

United Kingdom (cont) Integrated oil & gas (cont) Royal Dutch Shell Plc Com EUR 0.07 Class 'A' Royal Dutch Shell Plc Com EUR 0.07 Class 'B' Investment services ICAP Plc Com GBP 0.10 Iron & steel Evraz Plc Com USD 1.00 Leisure time Carnival Plc Com USD 1.66 Media British Sky Broadcasting Group Plc Com GBP 0.50 ITV Plc Com GBP 0.10 Pearson Plc Com GBP 0.25 Reed Elsevier Plc Com GBP 0.14 Mining Fresnillo Plc Com USD 0.50 Miscellaneous manufacturers Smiths Group Plc Com GBP 0.38 Mobile telecommunications Vodafone Group Plc Com USD 0.11 Nondurable household products Reckitt Benckiser Group Plc Com GBP 0.10 Oil & gas Cairn Energy Plc Com GBP 0.01 Essar Energy Plc Com GBP 0.05 Tullow Oil Plc Com GBP 0.10 Oil equipment & services AMEC Plc Com GBP 0.50 Pharmaceuticals AstraZeneca Plc Com USD 0.25 GlaxoSmithKline Plc Com GBP 0.25 Real estate investment trusts British Land Co Plc Reits GBP 0.25 Capital Shopping Centres Group Plc Reits GBP 0.50 Hammerson Plc Reits GBP 0.25 Land Securities Group Plc Reits GBP 0.10 Retail Kingfisher Plc Com GBP 0.16 Semiconductors ARM Holdings Plc Com GBP 0.0005

% of net asset value

189,480

5.43

142,434

4.09

5,722

0.16

3,863

0.11

9,024

0.26

20,031 7,607 22,169 15,220

0.57 0.22 0.63 0.44

9,313

0.27

9,698

0.28

194,618

5.58

57,391

1.65

4,312 932 30,341

0.13 0.03 0.87

8,337

0.24

83,280

2.39

160,409

4.60

9,468

0.27

4,878 6,309

0.14 0.18

11,961

0.35

15,150

0.43

17,429

0.50

iShares plc Annual Report 153

As at 29 February 2012

Holding Investment

3,010,912 17,598,968 4,482,514 2,313,797

536,025 1,551,646

United Kingdom (cont) Software Sage Group Plc Com GBP 0.01 Telecommunications BT Group Plc Com GBP 0.05 Tobacco British American Tobacco Plc Com GBP 0.25 Imperial Tobacco Group Plc Com GBP 0.10 Water Severn Trent Plc Com GBP 0.98 United Utilities Group Plc Com GBP 0.05 Total United Kingdom Total equities

Fair value £'000 0

% of net asset value

9,352

0.27

37,820

1.08

142,409

4.09

57,637

1.65

8,432

0.24

9,488 3,291,318

0.27 94.40

3,461,371

99.28

Analysis of totall current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

Fair value £'000

% of total current assets

3,461,371

98.82

46 41,442 3,502,859

0.00 1.18 100.00

Financial Derivative Instruments Futuures contracts No. of contracts 430 FTSE 100 Index Futures March 2012 Total unrealised gains on futures contracts Total value of investments Cash† Other net assets Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

Unrealised % of net gain asset £'000 value 46

0.00

46

0.00

3,461,417

99.28

5,197

0.15

19,288

0.55

3,485,902

99.98

783

0.02

3,486,685 100.00

†

Substantially all cash positions are held with State Street Bank and Trust other than £1,222,534 held as security by the counterparty for futures contracts.

154 iShares plc Annual Report

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For the year ended 29 February 2012 The 20 largest sales Holding 9,533,719 371,726 1,001,831 2,225,716 421,037 2,356,154 479,575 409,798 310,910 394,222 421,289 808,098 1,920,506 1,573,983 865,533 2,297,141 484,894 1,103,936 165,762 291,236

Proceeds Investments £‘000 Vodafone Group Plc Com USD 0.11 16,348 Rio Tinto Plc Com GBP 0.10 13,502 GlaxoSmithKline Plc Com GBP 0.25 13,192 HSBC Holdings Plc Com USD 0.50 12,533 AstraZeneca Plc Com USD 0.25 12,274 BP Plc Com USD 0.25 10,660 BHP Billiton Plc Com USD 0.50 10,353 Royal Dutch Shell Plc Com EUR 0.07 8,953 British American Tobacco Plc Com GBP 0.25 8,888 Royal Dutch Shell Plc Com EUR 0.07 8,723 BG Group Plc Com GBP 0.10 5,813 Bunzl Plc Com GBP 0.32 5,780 Invensys Plc Com GBP 0.10 5,633 Alliance Trust Plc Com GBP 0.025 5,424 John Wood Group Plc Com GBP 0.03333 4,947 3i Group Plc Com GBP 0.74 4,847 Lonmin Plc Com USD 1.00 4,657 Inmarsat Plc Com EUR 0.0005 4,461 Anglo American Plc Com USD 0.55 4,286 Standard Chartered Plc Com USD 0.50 4,265

The 20 largest purchases Holding Investments 1,610,656 CRH Plc Com EUR 0.32 3,222,460 Glencore International Plc Com USD 0.01 9,321,241 ITV Plc Com GBP 0.10 1,098,533 Tate & Lyle Plc Com GBP 0.25 1,126,282 John Wood Group Plc Com GBP 0.03333 653,193 Polymetal International Plc Com NPV 1,829,552 Meggitt Plc Com GBP 0.05 773,571 Bunzl Plc Com GBP 0.32 250,394 Royal Dutch Shell Plc Com EUR 0.07 849,449 HSBC Holdings Plc Com USD 0.50 568,411 Hargreaves Lansdown Plc Com GBP 0.004 912,470 Evraz Plc Com USD 1.00 835,650 Ashmore Group Plc Com GBP 0.0001 148,524 Standard Chartered Plc Com USD 0.50 294,551 National Grid Plc Com GBP 0.11 374,617 BP Plc Com USD 0.25 901,542 Vodafone Group Plc Com USD 0.11 89,667 GlaxoSmithKline Plc Com GBP 0.25 39,701 British American Tobacco Plc Com GBP 0.25 52,278 SABMiller Plc Com USD 0.10

Cost £‘000 18,792 15,247 8,105 7,206 7,133 6,794 6,150 6,116 5,429 5,130 3,566 3,366 3,362 2,249 1,796 1,552 1,520 1,206 1,115 1,104

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

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iShares plc Annual Report 155

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 £’000

Period ended 28 February 2011* £’000

Operating income

2

15,634

7,757

Net (losses)/gains on financial assets at fair value through profit or loss

3

(16,495)

77,938

(861)

85,695

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(1,992)

(1,275)

(2,853)

84,420

Finance costs: Distributions to redeemable participating shareholders

6

(13,871)

(6,646)

Interest expense

7

(9)

(8)

Total finance costs

(13,880)

(6,654)

Net (loss)/profit for the financial year/period before tax

(16,733)

77,766

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(9)

(5)

(16,742)

77,761

521

(247)

(16,221)

77,514

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 £’000

Period ended 28 February 2011* £’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

515,329

378,047

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(16,221)

77,514

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

79,806

64,760

(63,936)

(4,992)

15,870

59,768

514,978

515,329

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

156 iShares plc Annual Report

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As at 29 February 2012 Notes

29 February 2012 £’000

28 February 2011 £’000

1

1,373

235

676

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

8,482

824

Financial assets at fair value through profit or loss

12

514,044

514,420

522,762

517,293

Total current assets CURRENT LIABILITIES Bank overdraft

(440)

(9)

13

(5,817)

(159)

Distributions to redeemable participating shareholders payable

6

(2,266)

(2,018)

Financial liabilities at fair value through profit or loss

12

(4)

-

(8,527)

(2,186)

514,235

515,107

743

222

514,978

515,329

Payables

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus

8

Net asset value attributable to redeemable participating shareholders at the end of the year/period

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 157

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 £’000 7 14,882 745 15,634

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 £’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on futures contracts Net (losses) gains on currency

4.

Period from 12 June 2010 to 28 February 2011 £’000

(16,351) (143) (1) (16,495)

77,930 8 77,938

Year ended 29 February 2012 £’000 (1,992) (1,992)

Period from 12 June 2010 to 28 February 2011 £’000 (1,275) (1,275)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 £’000 5 7,290 462 7,757

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 £’000 1,832 3,031 2,018 6,881 (252) 17 6,646

Year ended 29 February 2012 £’000 (9) (9)

Period from 12 June 2010 to 28 February 2011 £’000 (8) (8)

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate. Bank interest

158 iShares plc Annual Report

Year ended 29 February 2012 £’000 4,342 3,657 3,593 2,266 13,858 (304) 317 13,871

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 £’000 222

Period from 12 June 2010 to 28 February 2011 £’000 469

521

(247)

521 743

(247) 222

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

45,250,000 7,000,000 (6,250,000) 46,000,000

39,750,000 6,000,000 (500,000) 45,250,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 11. RECEIVABLES

Subscription for shares awaiting settlement Dividend income receivable Securities lending income receivable Distributions payable held with Registrar*

46,000,000 45,250,000 39,750,000

514,978 515,329 378,047

28 February 2011 £’000

5,665 497

73 693

54

58

2,266 8,482

824

12. FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities

Financial liabilities: Unrealised losses on futures contracts

29 February 2012 £’000 514,044 514,044

28 February 2011 £’000 514,420 514,420

29 February 2012 £’000

28 February 2011 £’000

(4) (4)

-

29 February 2012 £’000

28 February 2011 £’000

(5,659) (158) (5,817)

(159) (159)

13. PAYABLES

Purchases of securities awaiting settlement Management fees payable

£’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

29 February 2012 £’000

* Further details are set out on note 11 page 65.

No. of shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

£11.20 £11.39 £9.51

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

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iShares plc Annual Report 159

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 £’000

28 February 2011 £’000

745

462

448,240

477,664

495,107

525,523

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

160 iShares plc Annual Report

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As at 29 February 2012

Holding Investment

Fair value £'000

% of net asset value

Fair value £'000

% of net asset value

1,708

0.33

1,371

0.27

1,009

0.19

573

0.11

934 15,146

0.18 2.94

Ireland Mining 5,243,374 Kenmare Resources Plc Com EUR 0.06 Total Ireland

2,960 2,960

0.57 0.57

Isle of Man Oil & gas 264,300 Exillon Energy Plc Com NPV 425,470 Lamprell Plc Com GBP 0.05 Total Isle of Man

627 1,446 2,073

0.12 0.28 0.40

1,125

0.22

2,840

0.55

1,703

0.33

5,650 3,090

1.10 0.60

2,154

0.42

775

0.15

896

0.17

1,619

0.32

1,706 21,558

0.33 4.19

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 1,437,861

1,032,337 780,169 842,022 343,985

Equities Bermuda Platinum & precious metalls Aquarius Platinum Ltd Com NPV Property & casualty insurance Catlin Group Ltd Com USD 0.01 Hiscox Ltd Com GBP 0.05 Lancashire Holdings Ltd Com USD 0.50 Total Bermudaa

British Virgin Islands Mining 301,053 Gem Diamonds Ltd Com USD 0.01 Total British Virgin Islands Cayman Islands Insurance 380,680 Phoenix Group Holdings Com EUR 0.0001 Total Cayman Islands Finland Mining 401,213 Talvivaara Mining Co Plc Ord NPV Total Finland Gibraltar Entertainment 1,376,331 Bwin.Party Digital Entertainment Plc Com GBP 0.00015 Total Gibraltar

33,225 86,956 85,628 21,168 67,074 1,083,984 654,086 1,113,645 294,474 www.iShares.com

Guernsey Equity investment instruments BH Global Ltd Com NPV (USD) BH Global Ltd Com NPV (GBP) BH Macro Ltd Com NPV (GBP) BH Macro Ltd Com NPV (EUR) BH Macro Ltd Com NPV (USD) Bluecrest Allblue Fund Ltd Com NPV Dexion Absolute Ltd Com GBP 0.0001 F&C Commercial Property Trust Ltd Com GBP 0.01 Genesis Emerging Markets Fund Ltd Com NPV

1,165,645 1,416

0.28

3,248 3,452

0.63 0.67

2,628 10,744

0.51 2.09

763 763

2,086 2,086

1,125 1,125

0.15 0.15

0.40 0.40

0.22 0.22

921,269 783,747

759,977

257,645 2,382,924

1,402,420

2,180 2,180

0.42 0.42

247 1,034 1,742 349 829

0.05 0.20 0.34 0.07 0.16

1,783

0.35

1,130,569

916

0.18

1,541,507

1,143

0.22

1,508

0.29

1,308,658 530,098 2,378,337 424,579 190,433

Guernsey (cont) Equity investment instruments (cont) HICL Infrastructure Co Ltd Com GBP 0.0001 International Public Partnerships Ltd Com GBP 0.0001 John Laing Infrastructure Fund Ltd Ord GBP 0.01 UK Commercial Property Trust Ltd Com GBP 0.25 Transportation services Stobart Group Ltd Com GBP 0.10 Total Guernsey

Jersey Commercial services Cape Plc Com GBP 0.25 Diversified financial services Henderson Group Plc Com GBP 0.125 Equity investment instruments 3i Infrastructure Plc Com NPV Media Informa Plc Com GBP 0.001 UBM Plc Com GBP 0.10 Mining Centamin Plc Com NPV Oil & gas Heritage Oil Plc Com NPV Oil & gas services Kentz Corp Ltd Com NPV Property & casuualty insurance Beazley Plc Com GBP 0.05 Real estate Regus Plc Com GBP 0.01 Total Jersey

iShares plc Annual Report 161

As at 29 February 2012

Holding Investment Luxembourg Chemicals 831,113 AZ Electronic Materials SA Com NPV Telecommunications 778,056 Colt Group SA Com EUR 0.50 Total Luxembourg

2,540,033 423,978 2,347,923 149,387

130,649 701,744 1,494,400 402,600

450,966 195,552 230,165

1,098,203 219,304 782,012 374,882 214,771 3,031,035 711,059 272,721 658,418 289,325 1,427,118 3,936,127 474,689 250,407 240,620

United Kingdom Advertising Aegis Group Plc Com GBP 0.055 Aerospace Chemring Group Plc Com GBP 0.01 Cobham Plc Com GBP 0.025 Ultra Electronics Holdings Plc Com GBP 0.05 Agriculture Genus Plc Com GBP 0.10 Airlines easyJet Plc Ord GBP 0.25 Banks Bradford & Bingley Plc Com GBP 0.25* Northern Rock Asset Management Plc Com GBP 0.25* Chemicals Filtrona Plc Com GBP 0.25 Coal Bumi Plc Com GBP 0.01 New World Resources Plc Com EUR 0.40 Commercial services Ashtead Group Plc Com GBP 0.10 Atkins WS Plc Com GBP 0.005 Babcock International Group Plc Com GBP 0.60 Berendsen Plc Com GBP 0.30 De La Rue Plc Com GBP 0.448 Hays Plc Com GBP 0.01 Homeserve Plc Com GBP 0.025 Interserve Plc Com GBP 0.10 Michael Page International Plc Com GBP 0.01 Northgate Plc Com GBP 0.50 QinetiQ Group Plc Com GBP 0.01 Rentokil Initial Plc Com GBP 0.01 RPS Group Plc Com GBP 0.03 Computer serviices Computacenter Plc Com GBP 0.06 Domino Printing Sciences Plc Com GBP 0.05

162 iShares plc Annual Report

Fair value £'000

% of net asset value

2,346

0.46

778 3,124

0.15 0.61

Holding Investment

3,475,164 247,075 999,450 1,289,092 2,492,338

4,384

0.85

530,839

1,860 4,391

0.36 0.85

318,450

2,519

0.49

1,779

0.35

3,076

0.60

1,161,030 782,308 865,105 561,222 748,990

-

0.00 444,669

-

0.00 651,237

2,029

0.39

1,516

0.29

110,401 297,718

1,259

0.25

94,157 115,846

2,700 1,654

0.52 0.32

5,889 1,893 2,046 2,440 1,580 832

1.14 0.37 0.40 0.47 0.31 0.16

2,983 715 2,156 3,068 1,067

0.58 0.14 0.42 0.60 0.21

802,792 79,420 188,298 250,948

999

0.19

1,569

0.31

1,481,755 935,568 177,885

670,372 469,612 946,943 818,604 575,308 120,430

United Kingdom (cont) Computer services (cont) Logica Plc Com GBP 0.10 Distribution & wholesale Diploma Plc Com GBP 0.05 Inchcape Plc Com GBP 0.10 SIG Plc Com GBP 0.10 Diversified financial services Aberdeen Asset Management Plc Com GBP 0.10 Brewin Dolphin Holdings Plc Com GBP 0.01 Close Brothers Group Plc Com GBP 0.25 F&C Asset Management Plc Com GBP 0.001 IG Group Holdings Plc Com GBP 0.00005 Intermediate Capital Group Plc Com GBP 0.20 International Personal Finance Plc Com GBP 0.10 Jupiter Fund Management Plc Com GBP 0.02 London Stock Exchange Group Plc Com GBP 0.069 Paragon Group of Cos Plc Com GBP 1.00 PayPoint Plc Com GBP 0.0033 Provident Financial Plc Com GBP 0.207 Rathbone Brothers Plc Com GBP 0.05 Securities Trust of Scotland Com GBP 0.25* SVG Capital Plc Com NPV Tullett Prebon Plc Com GBP 0.25 Electronics Electrocomponents Plc Com GBP 0.10 Halma Plc Com GBP 0.10 Laird Plc Com GBP 0.281 Oxford Instruments Plc Com GBP 0.05 Premier Farnell Plc Com GBP 0.05 Renishaw Plc Com GBP 0.20 Rotork Plc Com GBP 0.05 Spectris Plc Com GBP 0.05 Engineering & construction Balfour Beatty Plc Com GBP 0.50 Carillion Plc Com GBP 0.50 Galliford Try Plc Com GBP 0.50

Fair value £'000

% of net asset value

2,990

0.58

980 3,742 1,500

0.19 0.73 0.29

5,992

1.16

825

0.16

2,342

0.46

821

0.16

3,454

0.67

2,338

0.45

1,388

0.27

1,866

0.36

4,006

0.78

1,214 635

0.24 0.12

3,361

0.65

1,167

0.23

1,810 1,505

0.00 0.35 0.29

2,285 3,211 998

0.44 0.62 0.20

1,391 1,745 1,140 3,879 4,369

0.27 0.34 0.22 0.75 0.85

4,113 3,041 1,051

0.80 0.59 0.20

www.iShares.com

As at 29 February 2012

Holding Investment

228,959 196,758 210,263 1,305,360 243,554 388,116 638,449 349,278 95,077 500,874 428,331 428,085 77,669 1,432,205 98,225 1,302,095 174,362 644,647 99,501 367,050 249,389

89,375 253,072 120,773 256,852 215,160 226,393 www.iShares.com

United Kingdom (cont) Entertainment Betfair Group Plc Com NPV Perform Group Plc Com GBP 0.028 Equity investment instruments Aberforth Smaller Companies Trust Plc Com GBP 0.01 Alliance Trust Plc Com GBP 0.025 Bankers Investment Trust Plc Com GBP 0.25 BlackRock World Mining Trust Plc Com GBP 0.05** British Assets Trust Plc Com GBP 0.25 British Empire Securities and General Trust Plc Com GBP 0.10 Caledonia Investments Plc Com NPV City of London Investment Trust Plc Com NPV Edinburgh Dragon Trust Plc Com GBP 0.20 Edinburgh Investment Trust Plc Com GBP 0.25 Electra Private Equity Plc Com GBP 0.25 Fidelity China Special Situations Plc Com GBP 0.01 Fidelity European Values Plc Com GBP 0.25 Foreign & Colonial Investment Trust Plc Com GBP 0.25 Herald Investment Trust Plc Com NPV Impax Environmental Markets Plc Com GBP 0.10 JPMorgan American Investment Trust Plc Com GBP 0.25 JPMorgan Asian Investment Trust Plc Com GBP 0.25 JPMorgan Emerging Markets Investment Trust Plc Com GBP 0.25 JPMorgan Eur Smaller Companies Trust Plc Com GBP 0.25 JPMorgan Indian Investment Trust Plc Com GBP 0.25 JPMorgan Russian Securities Plc Com GBP 0.01 Law Debenture Corp Plc Com GBP 0.05 Mercantile Investment Trust Plc Com GBP 0.25 Merchants Trust Plc Com NPV

Fair value £'000

1,978 519

% of net asset value

0.39 0.10

Holding Investment

569,507 141,150

1,320 4,836

0.26 0.94

1,011

0.20

2,891 815

0.56 0.16

1,584

0.31

1,476

0.29

1,482 1,074

0.29 0.21

240,191 464,931

2,610 277,392 337,276 250,200 561,568 129,826 720,293

2,098

0.41

1,268

0.24

561,837

1,239

0.24

272,564

1,102

0.21

420,444

4,048

0.78

910

0.18

665

0.13

922

0.18

747

0.14

1,419

0.27

659

0.13

974

0.19

1,961,746 1,516,749

715

0.14

268,429

981

0.19

409,890

2,165 864

0.42 0.17

120,727

103,285 288,797 359,238 3,410,991 221,341 905,243 2,000,112

United Kingdom (cont) Equity investment instruments (cont) Monks Investment Trust Plc Com GBP 0.25 Murray Income Trust Plc Com GBP 0.25 Murray International Trust Plc Com GBP 0.25 Perpetual Income and Growth Investment Trust Plc Com GBP 0.10 Personal Assets Trust Plc Ord GBP 12.50 Polar Capital Technology Trust Plc Com GBP 0.25 RIT Capital Partners Plc Com GBP 1.00 Scottish Investment Trust Plc Com NPV Scottish Mortgage Investment Trust Plc Com NPV Temple Bar Investment Trust Plc Com GBP 0.25 Templeton Emerging Markets Investment Trust Plc Com GBP 0.25 TR Property Investment Trust Plc Com Ordinary Shares GBP 0.25 TR Property Investment Trust Plc Com Sigma Shares GBP 0.125 Witan Investment Trust Plc Com GBP 0.25 Food products Cranswick Plc Com GBP 0.10 Dairy Crest Group Plc Com GBP 0.25 Devro Plc Com GBP 0.10 Food retailers and wholesalers Booker Group Plc Com GBP 0.01 Greggs Plc Com GBP 0.02 Ocado Group Plc Com GBP 0.02 Forest products & paper DS Smith Plc Com GBP 0.10 Gambling Ladbrokes Plc Com GBP 0.28 William Hill Plc Com GBP 0.10 Gold mining African Barrick Gold Plc Com GBP 0.10 Petropavlovsk Plc Com GBP 0.01 Health care providers Synergy Health Plc Com GBP 0.00625

Fair value £'000

% of net asset value

1,953

0.38

930

0.18

2,348

0.45

1,240

0.24

914

0.18

1,073

0.21

4,118

0.80

1,218

0.24

3,903

0.76

1,206

0.23

4,455

0.86

854

0.16

190

0.04

2,042

0.40

806

0.16

929 1,129

0.18 0.22

2,560 1,210 842

0.50 0.24 0.16

3,368

0.65

2,939 3,400

0.57 0.66

1,261 2,945

0.25 0.57

1,024

0.20

iShares plc Annual Report 163

As at 29 February 2012

Holding Investment

84,578

794,083 780,440 2,096,331 262,182 285,643 290,485 659,504 671,386 6,974,863 1,382,265

110,944 174,551 344,188

417,130 168,940

382,390 352,036 428,246 1,286,532 1,214,668 540,911 555,471 235,970 445,673 238,104

United Kingdom (cont) Heavy construction Kier Group Plc Com GBP 0.01 Holding companies - diversified operations Drax Group Plc Com GBP 0.115 Mitie Group Plc Com GBP 0.03 Home construction Barratt Developments Plc Com GBP 0.10 Bellway Plc Com GBP 0.125 Berkeley Group Holdings Plc Com GBP 0.05 Bovis Homes Group Plc Com GBP 0.50 Persimmon Plc Com GBP 0.10 Redrow Plc Com GBP 0.10 Taylor Wimpey Plc Com GBP 0.01 Home furnishings Howden Joinery Group Plc Com GBP 0.10 Home improvement retailers Carpetright Plc Com GBP 0.01 Dunelm Group Plc Com GBP 0.01 Hotels Millennium & Copthorne Hotels Plc Com GBP 0.30 Industrial machiinery Bodycote Plc Com GBP 0.172 Spirax-Sarco Engineering Plc Com GBP 0.25 Industrial metals & mining Ferrexpo Plc Com GBP 0.10 Insurance Jardine Lloyd Thompson Group Plc Com GBP 0.05 St James's Place Plc Com GBP 0.15 Investment services Investec Plc Com GBP 0.0002 Leisure time TUI Travel Plc Com GBP 0.001 Media agencies ITE Group Plc Com GBP 0.010 Moneysupermarket.com Group Plc Com GBP 0.0002 Rightmove Plc Com GBP 0.01 Mining Allied Gold Mining Plc Com GBP 0.10 Anglo Pacific Group Plc Com GBP 0.02

164 iShares plc Annual Report

Fair value £'000

1,045

% of net asset value

0.20

Holding Investment

368,833 440,199

4,121 2,075

0.80 0.40

3,086 2,136

0.60 0.41

600,222 419,081 1,755,266 850,273 595,460

3,965

0.77

869,103

1,468 4,448 849 3,454

0.29 0.86 0.17 0.67

1,602

0.31

733 901

0.14 0.18

742,518

1,659

0.32

319,134 804,467

1,752

0.34

3,472

0.67

1,227

0.24

975,129 2,325,804 1,308,257 597,815 1,151,766 337,177

351,459 799,377 464,486

2,470 1,580

0.48 0.31

5,141

1.00

2,405

0.47

1,234

0.24

703 3,412

0.14 0.66

709,854 315,179

1,074,881 594,085 78,850

1,486,974 492

0.10

786

0.15

10,670 679,047 287,196

United Kingdom (cont) Mining (cont) Hochschild Mining Plc Com GBP 0.25 Lonmin Plc Com USD 1.00 Miscellaneous manufacturers Cookson Group Plc Com GBP 1.00 Fenner Plc Com GBP 0.25 Invensys Plc Com GBP 0.10 Melrose Plc Com GBP 0.0025 Morgan Crucible Co Plc Com GBP 0.25 Senior Plc Com GBP 0.10 Mobile telecommunications Inmarsat Plc Com EUR 0.0005 Oil & gas Afren Plc Com GBP 0.01 EnQuest Plc Com GBP 0.02 Ophir Energy Plc Com NPV Premier Oil Plc Com GBP 0.125 Salamander Energy Plc Com GBP 0.10 Soco International Plc Com GBP 0.05 Oil & gas services Hunting Plc Com GBP 0.25 John Wood Group Plc Com GBP 0.042857 Packaging & containers RPC Group Plc Com GBP 0.05 Paper Mondi Plc Com EUR 0.20 Personal products PZ Cussons Plc Com GBP 0.01 Pharmaceuticals BTG Plc Com GBP 0.10 Hikma Pharmaceuticals Plc Com GBP 0.10 Property & casualty insurance Amlin Plc Com GBP 0.281 Publishing Daily Mail & General Trust Plc Com GBP 0.125 Euromoney Institutional Investor Plc Com GBP 0.0025 Real estate investment & services Capital & Counties Properties Plc Com GBP 0.25 Daejan Holdings Plc Com GBP 0.25 Grainger Plc Com GBP 0.05 Savills Plc Com GBP 0.025

Fair value £'000

% of net asset value

1,872 4,855

0.36 0.94

4,055 1,982 3,653 3,321

0.79 0.38 0.71 0.65

2,102 1,700

0.41 0.33

4,674

0.91

3,112 1,659 2,532 5,073

0.60 0.32 0.49 0.99

828

0.16

2,502

0.49

2,626

0.51

6,094

1.18

1,367

0.27

4,704

0.91

1,437

0.28

2,505

0.48

2,299

0.45

3,762

0.73

2,554

0.50

565

0.11

2,830 305 745 1,040

0.55 0.06 0.15 0.20

www.iShares.com

As at 29 February 2012

Holding Investment

347,307 284,958 221,182 682,215 1,393,868 1,181,575 1,613,784 545,398 254,628 263,000 466,857 287,081 1,243,830 665,987 435,012

2,807,676 1,791,266 31,592 463,811 375,174 70,024 522,529 437,226 566,012

84,661 519,982 147,230 80,068 356,618 727,451 www.iShares.com

Fair value £'000

United Kingdom (cont) Real estate investment & services (cont) Unite Group Plc Com GBP 0.25 Real estate investment trusts Big Yellow Group Plc Reits GBP 0.10 Derwent London Plc Reits GBP 0.05 Great Portland Estates Plc Reits GBP 0.125 Hansteen Holdings Plc Reits GBP 0.10 London & Stamford Property Plc Reits GBP 0.10 Segro Plc Reits GBP 0.10 Shaftesbury Plc Reits GBP 0.25 Recreational services Rank Group Plc Com GBP 0.138 Restaurants & bars Domino's Pizza UK & IRL Plc Com GBP 0.0156 Greene King Plc Com GBP 0.125 JD Wetherspoon Plc Com GBP 0.02 Marston's Plc Com GBP 0.0737 Mitchells & Butlers Plc Com GBP 0.0854 Restaurant Group Plc Com GBP 0.28125 Retail Debenhams Plc Com GBP 0.0001 Home Retail Group Plc Com GBP 0.10 JD Sports Fashion Plc Com GBP 0.05 N Brown Group Plc Com GBP 0.11 Sports Direct International Plc Com GBP 0.10 SuperGroup Plc Com GBP 0.05 Travis Perkins Plc Com GBP 0.10 Semiconductors CSR Plc Com GBP 0.001 Imagination Technologies Group Plc Com GBP 0.10 Soft drinks A.G.BARR Plc Com GBP 0.125 Britvic Plc Com GBP 0.20 Software Aveva Group Plc Com GBP 0.03 Fidessa Group Plc Com GBP 0.10 Micro Focus International Plc Com GBP 0.113636 Misys Plc Com GBP 0.0114

% of net asset value

641

0.12

826

0.16

3,734

0.72

Holding Investment

172,051 119,470 293,630 974,080 181,978 557,857

2,409

0.47

1,032

0.20

1,347 3,791 2,672

0.26 0.74 0.52

349

0.07

1,164 2,337 1,152 1,218

0.23 0.45 0.22 0.24

1,747

0.34

1,118,331 1,477,796

1,207

0.23

432,216

2,072

0.40

1,466,906

1,827

0.36

114,371

261 1,102

0.05 0.21

1,252,501

1,103 378 5,612

0.22 0.07 1.09

1,032,431

1,113

0.21

3,484

0.68

1,010 1,972

0.20 0.38

2,518 1,326

0.49 0.26

1,605 2,368

0.31 0.46

2,097,378 7,908,823 440,121 1,155,430 303,767 5,516,101 5,843,136

1,050,945 93,019 1,108,401

857,919 780,911

Fair value £'000

% of net asset value

1,221

0.24

987

0.19

6,322 1,614 2,410 1,194

1.23 0.31 0.47 0.23

3,975

0.77

1,181 1,389 861 1,614

0.23 0.27 0.17 0.31

1,905

0.37

1,624 777

0.32 0.15

2,136 2,978

0.41 0.58

2,054 696

0.40 0.13

3,359

0.65

2,080

0.40

3,091 1,193

0.60 0.23

2,587

0.50

United Kingdom (cont) Software (cont) SDL Plc Com GBP 0.01 Specialiseed consumer services Dignity Plc Com GBP 0.105 Specialty chemicals Croda International Plc Com GBP 0.10 Elementis Plc Com GBP 0.05 Victrex Plc Com GBP 0.01 Yule Catto & Co Plc Com GBP 0.10 Specialty finance 3i Group Plc Com GBP 0.74 Specialty retailers Dixons Retail Plc Com GBP 0.025 Halfords Group Plc Com GBP 0.01 Kesa Electricals Plc Com EUR 0.30 WH Smith Plc Com GBP 0.22 Telecommunications Cable & Wireless Communications Plc Com USD 0.05 Cable & Wireless Worldwide Plc Com GBP 0.05 Kcom Group Plc Com GBP 0.10 TalkTalk Telecom Group Plc Com GBP 0.001 Telecity Group Plc Com NPV Telecommunications equipment Spirent Communications Plc Com GBP 0.033 Telecom Plus Plc Com GBP 0.05 Transportation Stagecoach Group Plc Com GBP 0.005482 Transportation seervices BBA Aviation Plc Com GBP 0.297 Travel & tourism Firstgroup Plc Com GBP 0.05 Go-Ahead Group Plc Com GBP 0.10 National Express Group Plc Com GBP 0.05 Waste & disposal services Shanks Group Plc Com GBP 0.10 Water Pennon Group Plc Com GBP 0.407 Total United Kingdom

902

0.18

5,607 452,285

1.09 87.83

Total equities

514,044

99.82

iShares plc Annual Report 165

As at 29 February 2012 Fair value £'000

Holding Investment

% of net asset value

Financial Derivative Instruments Futures contracts Unrealised % of net loss asset £'000 value

No. of contracts 7 FTSE 100 Index Futures March 2012 Total unrealised losses on futures contracts

(4)

0.00

(4)

0.00

514,040

99.82

Bank oveerdraft†

(204)

(0.04))

Other net assets

399

0.08

514,235

99.86

Adjustment to align to the valuation methodology as set out in the prospectus

743

0.14

Net asset valuee attributable to redeemable participating shareholders at the end of the year

514,978

100.00

Total value of investments

Net assets attributable to redeemable participating shareholders

†

Substantially all cash positions are held with State Street Bank and Trust other than £235,390 held as security by the counterparty for futures contracts. * Investments which are less than £500 are rounded to zero. **Investment in related party.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

166 iShares plc Annual Report

Fair value £'000

% of total current assets

514,044 8,718 522,762

98.33 1.67 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest sales Proceeds Holding Investments £‘000 8,596,363 ITV Plc Com GBP 0.10 7,481 1,093,873 Tate & Lyle Plc Com GBP 0.25 7,126 1,902,847 Meggitt Plc Com GBP 0.05 6,389 790,771 Bunzl Plc Com GBP 0.32 6,227 875,185 John Wood Group Plc Com GBP 0.0003333 5,533 420,793 Charter international Plc Com GBP 0.0002 3,979 703,980 Ashmore Group Plc Com GBP 0.0001 2,799 314,031 Hargreaves Lansdown Plc Com GBP 0.004 1,967 358,356 Alliance Trust Plc Com GBP 0.025 1,233 641,220 Cobham Plc Com GBP 0.025 1,190 62,190 Croda International Plc Com GBP 0.10 1,091 160,116 Pennon Group Plc Com GBP 0.407 1,069 498,743 Aberdeen Asset Management Plc Com GBP 0.10 1,006 150,016 Babcock International Group Plc Com GBP 0.60 977 262,345 Informa Plc Com GBP 0.001 961 386,507 Mitchells & Butlers Plc Com GBP 0.0854 933 104,865 Travis Perkins Plc Com GBP 0.10 883 622,078 Dexion Absolute Ltd Com GBP 0.0001 876 296,154 Foreign & Colonial Investment Trust Plc 862 Com GBP 0.25 67,883 RIT Capital Partners Plc Com GBP 1.00 849

The 20 largest purchases Cost Holding Investments £‘000 2,021,967 Invensys Plc Com GBP 0.10 5,858 1,663,716 Alliance Trust Plc Com GBP 0.025 5,788 790,771 Bunzl Plc Com GBP 0.32 5,675 897,191 John Wood Group Plc Com GBP 0.042857 5,174 2,340,493 3i Group Plc Com GBP 0.74 4,892 1,311,426 Investec Plc Com GBP 0.0002 4,316 449,032 Lonmin Plc Com USD 1.00 4,269 994,709 Inmarsat Plc Com EUR 0.0005 3,978 1,398,497 TUI Travel Plc Com GBP 0.001 2,999 263,024 New World Resources Plc Com EUR 0.40 2,376 636,641 Ophir Energy Plc Com NPV 2,026 200,409 Bumi Plc Com GBP 0.01 1,859 961,362 Bwin.Party Digital Entertainment Plc Com GBP 0.00015 1,803 312,148 African Barrick Gold Plc Com GBP 0.10 1,619 286,831 Cape Plc Com GBP 0.25 1,473 157,402 Betfair Group Plc Com NPV 1,327 956,644 TalkTalk Telecom Group Plc Com GBP 0.001 1,294 489,315 AZ Electronic Materials SA Com NPV 1,260 274,927 Premier Oil Plc Com GBP 0.125 1,189 1,345,077 Hansteen Holdings Plc Reits GBP 0.10 1,176

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 167

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

26,659

8,936

Net (losses)/gains on financial assets at fair value through profit or loss

3

(32,170)

73,720

(5,511)

82,656

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(7,125)

(5,897)

(12,636)

76,759

Finance costs: Distributions to redeemable participating shareholders

6

(16,659)

(12,818)

Interest expense

7

(21)

(9)

Total finance costs

(16,680)

(12,827)

Net (loss)/profit for the financial year/period before tax

(29,316)

63,932

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(2,220)

(763)

(31,536)

63,169

805

718

(30,731)

63,887

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

1,068,470

989,331

(30,731)

63,887

Proceeds from issue of redeemable participating shares

112,997

116,662

Payments on redemption of redeemable participating shares

(88,052)

(101,410)

24,945

15,252

1,062,684

1,068,470

Net assets attributable to redeemable participating shareholders at the beginning of the year/period (Decrease)/increase in net assets attributable to redeemable participating shareholders from operations Share transactions:

Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period * For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

168 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

1,339

-

26

-

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

91

29,358

Financial assets at fair value through profit or loss

12

1,060,125

1,069,351

1,061,581

1,098,709

Total current assets CURRENT LIABILITIES Bank overdraft Payables

13

Total current liabilitiess Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participatin ng shareholders at the end of the year/period

8

(554)

(1,626)

(608)

(30,073)

(1,162)

(31,699)

1,060,419

1,067,010

2,265

1,460

1,062,684

1,068,470

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 169

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 $’000 5 25,953 701 26,659

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net gains on futures contracts Net losses on currency

4.

Period from 12 June 2010 to 28 February 2011 $’000

(32,247) 108 (31) (32,170)

73,739 (19) 73,720

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 $’000 3 7,997 936 8,936

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (7,125) (5,897) (7,125) (5,897)

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 October 2010 May 2011 August 2011 November 2011 Equalisation income Equalisation expense

7.

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Bank interest

170 iShares plc Annual Report

Period from 12 June 2010 to 28 February 2011 $’000 9,957 3,229 13,186 (368) 12,818

Year ended 29 February 2012 $’000 (21) (21)

Period from 12 June 2010 to 28 February 2011 $’000 (9) (9)

INTEREST EXPENSE

MANAGEMENT FEES

Please refer to page 63 for each Fund’s management fee rate.

Year ended 29 February 2012 $’000 1,212 12,657 2,909 16,778 (133) 14 16,659

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 $’000 1,460

Period from 12 June 2010 to 28 February 2011 $’000 742

805

718

805 2,265

718 1,460

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 11.

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period 10.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

8,900,000 1,050,000 (750,000) 9,200,000

8,800,000 950,000 (850,000) 8,900,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares

Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

9,200,000 8,900,000 8,800,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

RECEIVABLES

Sale of securities awaiting settlement Securities lending income receivable

12.

28 February 2011 $’000

-

29,281

91 91

77 29,358

29 February 2012 $’000 1,060,104

28 February 2011 $’000 1,069,351

21 1,060,125

1,069,351

29 February 2012 $’000

28 February 2011 $’000

(608) (608)

(29,445) (626) (2) (30,073)

PAYABLES

Redemption of shares awaiting settlement Management fees payable Interest payable

14.

29 February 2012 $’000

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Unrealised gains on futures contracts

13.

$115.51 $120.05 $112.42

COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15.

RELATED PARTIES

The related parties are set out on pages 66 and 67.

1,062,684 1,068,470 989,331

iShares plc Annual Report 171

For the year ended 29 February 2012 16.

SECURITIES LENDING

During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 $’000

28 February 2011 $’000

701

936

168,493

177,708

185,503

195,523

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17.

SIGNIFICANT EVENTS DURING THE YEAR

Please refer to note 19 on page 67. 18.

SUBSEQUENT EVENTS

Please refer to note 20 on pages 67 and 68.

172 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 8,720,400 Equities Hong Kong Mobile telecommunications 9,435,910 China Mobile Ltd Com HKD 0.10 17,883,074 China Unicom Hong Kong Ltd Com HKD 0.10 Oil & gas 35,056,000 CNOOC Ltd Com HKD 0.02 Total Hong Kong

11,466,000 85,183,000 150,459,400 43,994,850 56,101,600 115,352,320 18,480,946 20,744,000 121,157,175

6,532,000

20,641,000 8,453,500 9,844,000

60,578,000

19,824,000 30,199,000

14,540,000 www.iShares.com

People's Republic of China Airlines Air China Ltd Com CNY 1.00 Banks Agricultural Bank of China Ltd Com CNY 1.00 Bank of China Ltd Com CNY 1.00 Bank of Communications Co Ltd Com CNY 1.00 China Citic Bank Corp Ltd Com CNY 1.00 China Construction Bank Corp Com CNY 1.00 China Merchants Bank Co Ltd Com CNY 1.00 China Minsheng Banking Corp Ltd Com CNY 1.00 Industrial & Commercial Bank of China Com CNY 1.00 Buildin ng & construction materials Anhui Conch Cement Co Ltd Com CNY 1.00 Coal China Coal Energy Co Ltd Com CNY 1.00 China Shenhua Energy Co Ltd Com CNY 1.00 Yanzhou Coal Mining Co Ltd Com CNY 1.00 Fixed line telecommunications China Telecom Corp Ltd Com CNY 1.00 Industrial metals & mining Aluminum Corp of China Ltd Com CNY 1.00 Zijin Mining Group Co Ltd Com CNY 0.10 Insurance China Life Insurance Co Ltd Com CNY 1.00

5,199,000 100,632

9.47

32,240

3.03

35,044,000 30,624,000 80,288 213,160

7.56 20.06

8,635

0.81

42,292 65,388

3.98 6.15

36,310

3.42

36,752

3.46

97,137

9.14

42,231

3.97

20,144

1.90

88,745

8.35

Fair value $'000

18,480,000

People's Republic of China (cont) Insurance (cont) China Pacific Insurance Group Co Ltd Com CNY 1.00 Ping An Insurance Group Co Com CNY 1.00 Integrated oil & gas China Petroleum & Chemical Corp Com CNY 1.00 PetroChina Co Ltd Com CNY 1.00 Property & casualty insurance PICC Property & Casualty Co Ltd Com CNY 1.00 Total People's Republic of China Total equities

% of net asset value

31,432

2.96

45,389

4.27

39,950 46,284

3.76 4.36

25,976 846,944

2.44 79.70

1,060,104

99.76

Financial Derivative Instruments Futures contracts No. of contracts 2 Hang Seng Index Future March 2012 Total unrealised gains on futures contracts Total value of investments Cash† Other net liabilities 22,701

2.14

26,458

2.49

38,973

3.67

24,577

2.31

36,873

Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

3.47

Unrealised % of net gain assets value $'000 21

0.00

21

0.00

1,060,125

99.76

811

0.08

(517)

(0.05)

1,060,419

99.79

2,265

0.21

1,062,684 100.00

†

10,967

1.03

14,448

1.36

45,282

4.26

Substantially all cash positions are held with State Street Bank and Trust other than $25,828 held as security by the counterparty for futures contracts.

iShares plc Annual Report 173

As at 29 February 2012 Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

174 iShares plc Annual Report

Fair value $'000

% of total current assets

1,060,104

99.86

21 1,456 1,061,581

0.00 0.14 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest sales Proceeds Holding Investments $‘000 16,122,000 China Unicom Hong Kong Ltd Com HKD 0.10 30,170 21,860,000 PetroChina Co Ltd Com CNY 1.00 27,096 2,740,000 China Mobile Ltd Com HKD 0.10 26,656 12,000,000 CNOOC Ltd Com HKD 0.02 25,450 22,364,000 China Communications Construction Co Ltd Com CNY 1.00 19,860 32,070,000 China Telecom Corp Ltd Com CNY 1.00 19,856 5,839,000 China Life Insurance Co Ltd Com CNY 1.00 19,847 40,891,000 Agricultural Bank of China Ltd Com CNY 1.00 17,955 18,250,000 China Petroleum & Chemical Corp Com CNY 1.00 17,951 21,390,000 China Construction Bank Corp Com CNY 1.00 17,014 39,179,000 Bank of China Ltd Com CNY 1.00 16,039 22,088,000 Industrial & Commercial Bank of China Com CNY 1.00 15,990 3,434,500 Byd Co Ltd Com CNY 1.00 13,223 2,349,500 China Shenhua Energy Co Ltd Com CNY 1.00 10,480 14,042,000 China COSCO Holdings Co Ltd Com CNY 1.00 7,204 2,836,500 China Merchants Bank Co Ltd Com CNY 1.00 6,331 6,958,000 Air China Ltd Com CNY 1.00 6,223 22,627,000 China Railway Group Ltd Com CNY 1.00 5,979 619,000 Ping An Insurance Group Co Com CNY 1.00 5,736 6,453,000 Bank of Communications Co Ltd Com CNY 1.00 5,484

The 20 largest purchases Holding 103,139,000 11,150,000 18,652,000 48,789,000 6,962,000 17,388,000 23,363,000 10,097,000 27,038,000

Investments Bank of China Ltd Com CNY 1.00 Yanzhou Coal Mining Co Ltd Com CNY 1.00 PICC Property & Casualty Co Ltd Com CNY 1.00 Agricultural Bank of China Ltd Com CNY 1.00 Anhui Conch Cement Co Ltd Com CNY 1.00 PetroChina Co Ltd Com CNY 1.00 China Minsheng Banking Corp Ltd Com CNY 1.00 CNOOC Ltd Com HKD 0.02 Industrial & Commercial Bank of China Com CNY 1.00 21,561,000 China Construction Bank Corp Com CNY 1.00 1,584,000 China Mobile Ltd Com HKD 0.10 1,765,000 Ping An Insurance Group Co Com CNY 1.00 5,264,000 China Life Insurance Co Ltd Com CNY 1.00 5,795,500 China Merchants Bank Co Ltd Com CNY 1.00 8,387,000 Bank of Communications Co Ltd Com CNY 1.00 11,242,000 China Telecom Corp Ltd Com CNY 1.00 5,962,000 China Petroleum & Chemical Corp Com CNY 1.00 3,080,000 China Unicom Hong Kong Ltd Com HKD 0.10 8,790,000 China Citic Bank Corp Ltd Com CNY 1.00 1,425,000 China Pacific Insurance Group Co Ltd Com CNY 1.00

Cost $‘000 44,729 34,987 26,114 25,162 22,783 22,467 20,539 18,837 17,710 17,187 15,428 14,995 14,247 12,891 6,969 6,553 6,215 6,127 5,269 4,939

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 175

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 £’000

Period ended 28 February 2011* £’000

Operating income

2

27,727

12,797

Net (losses)/gains on financial assets at fair value through profit or loss

3

(28,899)

41,307

(1,172)

54,104

(1,968)

(1,051)

(3,140)

53,053

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit Finance costs: Distributions to redeemable participating shareholders

6

(24,897)

(12,374)

Interest expense

7

(7)

(3)

Total finance costs

(24,904)

(12,377)

Net (loss)/profit for the financial year/period before tax

(28,044)

40,676

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(88)

(1)

(28,132)

40,675

246

-

(27,886)

40,675

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 £’000

Period ended 28 February 2011* £’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

554,698

290,773

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(27,886)

40,675

83,905

223,250

Share transactions: Proceeds from issue of redeemable participating shares

(122,175)

-

(Decrease)/increase in net assets resulting from share transactions

Payments on redemption of redeemable participating shares

(38,270)

223,250

Net assets attributable to redeemable participating shareholders at the end of the year/period

488,542

554,698

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

176 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notes

29 February 2012 £’000

28 February 2011 £’000

1

4,547

189

-

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

5,800

6,069

Financial assets at fair value through profit or loss

12

486,432

553,663

492,422

564,279

Total current assets CURRENT LIABILITIES Bank overdraft

(157)

-

Payables

13

(156)

(4,716)

Distributions to redeemable participating shareholders payable

6

(3,975)

(5,027)

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

(4,288)

(9,743)

488,134

554,536

408

162

488,542

554,698

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 177

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 £’000 9 27,635 83 27,727

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 £’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on futures contracts Net losses on currency

4.

Period from 12 June 2010 to 28 February 2011 £’000

(28,737) (158) (4) (28,899)

41,309 (2) 41,307

Year ended 29 February 2012 £’000 (1,968) (1,968)

Period from 12 June 2010 to 28 February 2011 £’000 (1,051) (1,051)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 £’000 10 12,758 29 12,797

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 £’000 5,089 4,382 5,027 14,498 (2,124) 12,374

Year ended 29 February 2012 £’000 (7) (7)

Period from 12 June 2010 to 28 February 2011 £’000 (3) (3)

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate. Bank interest

178 iShares plc Annual Report

Year ended 29 February 2012 £’000 6,574 7,641 5,890 3,975 24,080 (584) 1,401 24,897

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 £’000 162

Period from 12 June 2010 to 28 February 2011 £’000 162

246

-

246 408

162

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

£7.31 £7.77 £6.92

11. RECEIVABLES 29 February 2012 £’000

28 February 2011 £’000

1 1,820

4,574 1 1,492

4

2

3,975 5,800

6,069

Subscription for shares awaiting settlement Deposit Interest receivable Dividend income receivable Securities lending income receivable Distributions payable held with Registrar*

Further details are set out in the accounting policies note k) on page 30.

* Further details are set out on note 11 page 65.

9.

12.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period 10.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

71,400,000 11,600,000 (16,200,000) 66,800,000

42,000,000 29,400,000 71,400,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares

Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

66,800,000 71,400,000 42,000,000 £’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

488,542 554,698 290,773

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Unrealised gains on futures contracts

13.

28 February 2011 £’000 553,663

3 486,432

553,663

29 February 2012 £’000

28 February 2011 £’000

(156) (156)

(4,568) (148) (4,716)

PAYABLES

Purchase of securities awaiting settlement Management fees payable

14.

29 February 2012 £’000 486,429

COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

iShares plc Annual Report 179

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 £’000

28 February 2011 £’000

83

29

26,019

6,397

28,779

7,092

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

180 iShares plc Annual Report

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As at 29 February 2012

Holding Investment

Fair value £'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 297,631 Equities Bermuda Insurance 3,131,408 Catlin Group Ltd Com USD 0.01 Total Bermuda

13,036 13,036

2.67 2.67

Guernsey Specialty finance 5,280,138 Resolution Ltd Com NPV Total Guernsey

14,172 14,172

2.90 2.90

Jersey Media 1,902,393 UBM Plc Com GBP 0.10 Total Jersey

9,960,705

2,765,296

1,031,157 15,914,888 3,673,700 3,236,273 1,410,860 1,608,712 5,400,136 848,754

720,811 5,725,218

3,522,738 2,241,453 2,792,483 1,050,084 www.iShares.com

United Kingdom Banks Bradford & Bingley Plc Com GBP 0.25* Broadline retailers Marks & Spencer Group Plc Com GBP 0.25 Commercial services De La Rue Plc Com GBP 0.448 Hays Plc Com GBP 0.01 Defence BAE Systems Plc Com GBP 0.03 Diversified financial services Aberdeen Asset Management Plc Com GBP 0.10 ICAP Plc Com GBP 0.10 IG Group Holdings Plc Com GBP 0.00005 Man Group Plc Com USD 0.03 Provident Financial Plc Com GBP 0.207 Electricity SSE Plc Com GBP 0.50 Electronics Premier Farnell Plc Com GBP 0.05 Engineering & construction Balfour Beatty Plc Com GBP 0.50 Carillion Plc Com GBP 0.50 Food J Sainsbury Plc Com GBP 0.29 Tate & Lyle Plc Com GBP 0.25

7,756,392 2,693,083 2,754,614 1,530,099

1,579,659 3,809,122 4,301,616 12,361,066

11,091 11,091

2.27 2.27

11,469,421 5,402,153

-

0.00

1,913,294 384,440

10,032

2.05

8,976,375

9,822 12,811

2.01 2.62

1,384,831

11,473

2.35

2,033,428 5,329,434

7,780 5,423

1.59 1.11

347,057 625,412

7,103 7,063

1.46 1.45

1,343,073

9,583

1.96

3,241,078

9,291

1.90

8,212,879

12,447

2.55

2,862,108

9,779 7,285

2.00 1.49

1,832,425

8,330 7,324

1.70 1.50

4,184,227

United Kingdom (cont) Food (cont) Unilever Plc Com GBP 0.03 Gambling Ladbrokes Plc Com GBP 0.28 William Hill Plc Com GBP 0.10 Gas Centrica Plc Com GBP 0.06 National Grid Plc Com GBP 0.11 Holding companies - diversified operations Drax Group Plc Com GBP 0.115 Insurance Amlin Plc Com GBP 0.281 Aviva Plc Com GBP 0.25 Legal & General Group Plc Com GBP 0.025 RSA Insurance Group Plc Com GBP 0.28 Standard Life Plc Com GBP 0.10 Integrated oil & gas BP Plc Com USD 0.25 Royal Dutch Shell Plc Com EUR 0.07 Class 'B' Leisure time TUI Travel Plc Com GBP 0.001 Media Reed Elsevier Plc Com GBP 0.14 Mobile telecommunications Inmarsat Plc Com EUR 0.0005 Vodafone Group Plc Com USD 0.11 Pharmaceuticals AstraZeneca Plc Com USD 0.25 GlaxoSmithKline Plc Com GBP 0.25 Real estate investment trusts British Land Co Plc Reits GBP 0.25 Segro Plc Reits GBP 0.10 Retail Home Retail Group Plc Com GBP 0.10 Soft drrinks Britvic Plc Com GBP 0.20 Software Micro Focus International Plc Com GBP 0.113636 Specialty retailers Halfords Group Plc Com GBP 0.01

Fair value £'000

% of net asset value

6,042

1.24

11,619 6,038

2.38 1.24

8,371 9,816

1.71 2.01

8,198

1.68

13,332 15,843

2.73 3.24

14,920

3.06

12,524 12,560

2.56 2.57

9,421

1.93

8,956

1.83

17,773

3.64

7,617

1.56

9,746

1.99

9,023

1.85

9,740

1.99

8,675

1.78

6,315 7,613

1.29 1.56

8,377

1.72

10,856

2.22

8,246

1.69

13,205

2.70

iShares plc Annual Report 181

As at 29 February 2012

Holding Investment

4,289,191 30,819,395

347,773

2,804,688 937,094 501,833 1,380,051

United Kingdom (cont) Telecommunications BT Group Plc Com GBP 0.05 Cable & Wireless Worldwide Plc Com GBP 0.05 Tobacco Imperial Tobacco Group Plc Com GBP 0.10 Transportation Firstgroup Plc Com GBP 0.05 Water Pennon Group Plc Com GBP 0.407 Severn Trent Plc Com GBP 0.98 United Utilities Group Plc Com GBP 0.05 Total United Kingdom Total equities

Fair value £'000

% of net asset value

9,217

1.89

8,568

1.75

8,663

1.77

8,249

1.69

6,728 7,894

1.38 1.61

8,439 448,130

1.73 91.73

486,429

99.57

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

Fair value £'000

% of total current assets

486,429

98.78

3 5,990 492,422

0.00 1.22 100.00

Financial Derivative Instruments Futures contracts No. of contracts 29 FTSE 100 Index Futures March 2012 Total unrealiseed gains on futures contracts Total value of investments Cash† Other net assets Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

Unrealised % of net gain asset £'000 value 3

0.00

3

0.00

486,432

99.57

33

0.01

1,669

0.35

488,134

99.92

408

0.08

488,542 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company other than £189,279 held as security by the counterparty for futures contracts. * Investments which are less than £500 are rounded to zero.

182 iShares plc Annual Report

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For the year ended 29 February 2012 The 20 largest sales Holding Investments 3,331,629 Northumbrian Water Group Plc Com GBP 0.10 2,824,194 Drax Group Plc Com GBP 0.115 28,122,619 Cable & Wireless Communications Plc Com USD 0.05 4,617,691 Intermediate Capital Group Plc Com GBP 0.20 8,376,712 Ladbrokes Plc Com GBP 0.28 2,413,743 Greene King Plc Com GBP 0.13 427,023 British American Tobacco Plc Com GBP 0.25 2,726,948 Rexam Plc Com GBP 0.64 884,343 Provident Financial Plc Com GBP 0.207 2,378,487 Hiscox Ltd Com GBP 0.05 6,672,097 TalkTalk Telecom Group Plc Com GBP 0.001 4,176,607 Aberdeen Asset Management Plc Com GBP 0.10 6,604,546 Kesa Electricals Plc Com EUR 0.30 1,353,497 National Grid Plc Com GBP 0.11 377,059 Royal Dutch Shell Plc Com EUR 0.07 1,400,078 Tate & Lyle Plc Com GBP 0.25 620,484 GlaxosmithKline Plc Com GBP 0.25 2,383,064 Balforour Beatty Plc Com GBP 0.50 586,600 SSE Plc Com GBP 0.50 4,185,999 BT Group Plc Com GBP 0.05

The 20 largest purchases Proceeds £‘000 14,965 14,200 13,609 11,637 10,733 10,623 9,958 9,783 9,023 8,948 8,889 8,626 8,361 8,325 8,182 8,159 8,114 7,928 7,805

Cost £‘000

Holding Investments 4,548,810 1,733,097 4,513,949 1,869,253 3,494,912 7,495,464 3,395,092 2,351,162 3,664,283 2,072,264 8,036,645 5,831,655 5,626,557 3,338,987 2,440,859 9,890,086 7,422,514 18,630,790 2,675,370 3,903,800

Amlin Plc Com GBP 0.281 Provident Financial Plc Com GBP 0.207 Catlin Group Ltd Com USD 0.01 De La Rue Plc Com GBP 0.448 Britvic Plc Com GBP 0.20 Thomas Cook Group Plc Com EUR 0.10 Halfords Group Plc Com GBP 0.01 IG Group Holdings Plc Com GBP 0.00005 Micro Focus International Plc Com GBP 0.113636 Inmarsat Plc Com EUR 0.0005 Ladbrokes Plc Com GBP 0.28 Premier Farnel Plc Com GBP 0.05 TUI Travel Plc Com GBP 0.001 Resolution Ltd Com NPV Aviva Plc Com GBP 0.25 Hays Plc Com GBP 0.01 Legal & General GP Com GBP 0.025 Cable & Wireless Worldwide Plc Com GBP 0.05 Man Group Plc Com USD 0.03 Home Retail Group PLC Com GBP 0.10

17,286 16,914 16,608 15,069 13,294 12,875 11,783 11,313 11,308 10,609 10,250 9,527 9,224 8,761 8,000 7,675 7,567 7,140 6,100 6,067

7,625

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 183

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

23,854

3,622

Net (losses)/gains on financial assets at fair value through profit or loss

3

(84,152)

93,013

(60,298)

96,635

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(2,121)

(1,379)

(62,419)

95,256

Finance costs: Distributions to redeemable participating shareholders

6

(20,780)

(4,068)

Interest expense

7

(63)

(3)

Total finance costs

(20,843)

(4,071)

Net (loss)/profit for the financial year/period before tax

(83,262)

91,185

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(863)

(339)

(84,125)

90,846

(437)

260

(84,562)

91,106

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

565,233

327,150

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(84,562)

91,106

159,941

291,629

Share transactions: Proceeds from issue of redeemable participating shares

(226,250)

(144,652)

(Decrease)/increase in net assets resulting from share transactions

Payments on redemption of redeemable participating shares

(66,309)

146,977

Net assets attributable to redeemable participating shareholders at the end of the year/period

414,362

565,233

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

184 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

CURRENT ASSETS Cash and cash equivalents

159

636

Receivables

11

354

2,673

Financial assets at fair value through profit or loss

12

414,113

564,394

414,626

567,703

-

(5)

Total current assets CURRENT LIABILITIES Bank overdraft Payables

13

(134)

(2,836)

Distributions to redeemable participating shareholders payable

6

(329)

(265)

(463)

(3,106)

414,163

564,597

199

636

414,362

565,233

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributab ble to redeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 185

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 €’000 21 22,577 1,256 23,854

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net gains on currency

4.

Period from 12 June 2010 to 28 February 2011 €’000

(84,183) 31 (84,152)

92,963 50 93,013

Year ended 29 February 2012 €’000 (2,121) (2,121)

Period from 12 June 2010 to 28 February 2011 €’000 (1,379) (1,379)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 €’000 8 3,424 190 3,622

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

Year ended 29 February 2012 €’000 15,351 4,025 615 329 20,320 (538) 998 20,780

Period from 12 June 2010 to 28 February 2011 €’000 2,953 1,323 265 4,541 (710) 237 4,068

Year ended 29 February 2012 €’000 (63) (63)

Period from 12 June 2010 to 28 February 2011 €’000 (3) (3)

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

7.

INTEREST EXPENSE

Please refer to page 63 for each Fund’s management fee rate. Bank interest

186 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the investment valuation methodology as set out in the Prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 €’000 636

Period from 12 June 2010 to 28 February 2011 €’000 376

(437)

260

(437) 199

260 636

Further details are set out in the accounting policies note k) on page 30.

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€23.41 €27.04 €21.52

11. RECEIVABLES 29 February 2012 €’000

28 February 2011 €’000

19

2,669 -

6

2

329 354

2 2,673

Sale of securities awaiting settlement Dividend income receivable Securities lending income receivable Distributions payable held with Registrar* Other receivables

* Further details are set out on note 11 page 65.

9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

20,900,000 6,000,000 (9,200,000) 17,700,000

15,200,000 11,300,000 (5,600,000) 20,900,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

17,700,000 20,900,000 15,200,000 €’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

414,362 565,233 327,150

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities

29 February 2012 €’000 414,113 414,113

28 February 2011 €’000 564,394 564,394

29 February 2012 €’000

28 February 2011 €’000

(1) (133) (134)

(2,665) (171) (2,836)

13. PAYABLES

Purchase of securities awaiting settlement Interest payable Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

iShares plc Annual Report 187

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

1,256

190

58,271

27,657

64,177

30,527

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

188 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holdingg Investment

Fair valuue €'000

% of net asset value

Holdingg Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market Equities Austria Real estate investment & services 680,448 CA Immobilien Anlagen AG Com NPV 628,054 Conwert Immobilien Invest SE Com NPV Total Austria

134,977 108,412 53,760 12,431 76,585 16,518

Belgium Real estate investment trusts Befimmo SCA Sicafi Reits NPV Cofinimmo Reits NPV Intervest Offices & Warehouses Reits NPV Leasinvest Real Estate SCA Reits NPV Warehouses De Pauw SCA Reits NPV Wereldhave Belgium NV Reits NPV Total Belgium

Finland Real estate investm ment & services 1,613,742 Citycon Oyj Com NPV 2,192,427 Sponda Oyj Com NPV 490,918 Technopolis Plc Com NPV Total Finland

34,861 212,697 145,487 168,165 734,415 356,153 44,428 100,724

707,175

www.iShares.com

France Real estate investment trusts Affine SA Reits NPV Fonciere Des Regions Reits EUR 3.00 Gecina SA Reits EUR 7.50 ICADE Reits NPV Klepierre Reits EUR 1.40 Mercialys SA Reits EUR 1.00 Societe de la Tour Eiffel Reits EUR 5.00 Societe Immobiliere de Location pour l'Industrie et le Commerce Reits EUR 4.00 Unibail-Rodamco SE Reits EUR 5.00 Total France

399,887 792,316 265,570 317,953 5,358

1.29

5,341 10,699

1.29 2.58

6,499 9,811

1.57 2.37

1,058

0.25

826

0.20

2,939 1,132 22,265

0.71 0.27 5.37

4,083 6,906 1,914 12,903

0.98 1.67 0.46 3.11

500

0.12

11,554 10,445 10,458 17,769 9,272

2.79 2.52 2.52 4.29 2.24

1,738

0.42

7,785

1.88

102,540 172,061

24.75 41.53

554,543 301,716

Germany Real estate investment & services Deutsche Euroshop AG Com NPV Deutsche Wohnen AG Com NPV DIC Asset AG Com NPV GSW Immobilien AG Com NPV Real estate investment trusts Alstria Office REIT-AG Reits NPV Prime Office REIT-AG Reits NPV Total Germany

Fair valuue €'000

% of net asset value

10,323 7,812 1,771 7,466

2.49 1.89 0.43 1.80

4,669 1,210 33,251

1.13 0.29 8.03

Italy Real estate investment trusts 7,418,744 Beni Stabili SpA Reits EUR 0.10 924,052 Immobiliare Grande Distribuzione Reits EUR 1.00 Total Italy

3,059

0.74

745 3,804

0.18 0.92

Luxembourg Real estate investment & services 697,053 GAGFAH SA Com EUR 1.25 Total Luxembourg

2,956 2,956

0.71 0.71

25,754

6.21

8,527

2.06

4,141 4,806 9,413 52,641

1.00 1.16 2.27 12.70

714,804 315,816 466,787 143,246 167,910

Netherlands Real estate investment trusts Corio NV Reits EUR 10.00 Eurocommercial Properties NV Reits EUR 0.50 Nieuwe Steen Investments NV Reits EUR 0.46 Vastned Retail NV Reits EUR 5.00 Wereldhave NV Reits EUR 10.00 Total Netherlands Sweden Real estate holding and development Klovern AB Pref NPV Kungsleden AB Com NPV Wihlborgs Fastigheter AB Com NPV Real estaate investment & services Castellum AB Com NPV Fabege AB Com NPV Hufvudstaden AB Com NPV Klovern AB Com SEK 5.00 Total Sweden

199 5,925 6,192

0.05 1.43 1.49

13,176 8,665 9,839 2,739 46,735

3.18 2.09 2.38 0.66 11.28

Switzerland Reall estate investment & services 52,899 Allreal Holding AG Com CHF 50.00

6,361

1.54

12,712 1,057,233 595,257 1,332,197 1,280,962 1,179,162 967,417

iShares plc Annual Report 189

As at 29 February 2012 Fair valuue €'000

% of net asset value

8,576

2.07

23,346

5.63

18,515 56,798

4.47 13.71

414,113

99.94

-

0.00 0.00 0.00

414,113

99.94

159

0.04

(109)

(0.03)

414,163

99.95

Adjustment to align to the valuation methodology as set out in the prospectus

199

0.05

Net asset value attributable to redeemable participating shareholders at the end of the year

414,362

100.00

Holdingg Investment Switzerland (cont) Real estate investment & services (cont) 47,689 Mobimo Holding AG Com CHF 38.00 358,392 PSP Swiss Property AG Com CHF 0.10 315,815 Swiss Prime Site AG Com CHF 15.30 Total Switzerland Total equities Warrants Netherlands 182,020 Nieuwe Steen Investments NV 01/04/2013* Total Netherlands Totall Warrants Total value of investments Cash† Other net liabilities Net assets attributable to redeemable participating shareholders

†

Substantially all cash positions are held with State Street Bank and Trust Company. * Investments which are less than €500 are rounded to zero

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

190 iShares plc Annual Report

Fair value €'000

% of total current assets

414,113 513 414,626

99.88 0.12 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest sales Holding Investments 520,602 2,220,631 520,564 263,823 1,923,896 232,539 540,681 2,087,789 1,736,008 156,486 945,072 121,633 105,603 294,349 121,825 78,127 262,258 229,576 998,981 74,151

Unibail-Rodamco SE Reits EUR 5.00 Castellum AB Com NPV Corio NV Reits EUR 10.00 PSP Swiss Property AG Com CHF 0.10 Hufvudstaden AB Com NPV Swiss Prime Site AG Com CHF 15.30 Klepierre Reits EUR 1.40 Fabege AB Com NPV Kungsleden AB Com NPV Fonciere Des Regions Reits EUR 3.00 Wihlborgs Fastigheter AB Com NPV ICADE Reits NPV Gecina SA Reits EUR 7.50 Deutsche Euroshop AG Com NPV Wereldhave NV Reits EUR 10.00 Cofinimmo Reits NPV Mercialys SA Reits EUR 1.00 Eurocommercial Properties NV Reits EUR 0.50 TAG Immobilien AG Com NPV Societe Immobiliere de Location pour l'Industrie et le Commerce Reits EUR 4.00

The 20 largest purchases Proceeds €‘000 74,655 20,981 20,048 17,098 14,273 13,804 12,907 12,490 9,454 9,159 8,967 8,361 8,355 7,644 7,250 7,176 7,046 6,740 6,074

Cost €‘000

Holding Investments 305,031 1,814,583 315,687 1,602,361 1,747,020 1,022,465 52,721 411,896 154,576 1,413,703 722,483 316,777 896,872 136,231 82,765 625,974 91,727 66,373 51,766 74,711

Unibail-Rodamco SE Reits EUR 5.00 Castellum AB Com NPV Corio NV Reits EUR 10.00 Hufvudstaden AB Com NPV Fabege AB Com NPV Deutsche Wohnen AG Com NPV Mobimo Holding AG Com CHF 38.00 GSW Immobilien AG Com NPV PSP Swiss Property AG Com CHF 0.10 Kungsleden AB Com NPV Wihlborgs Fastigheter AB Com NPV Klepierre Reits EUR 1.40 CA Immobilien Anlagen AG Com NPV Swiss Prime Site AG Com CHF 15.30 ICADE Reits NPV Alstria Office REIT-AG Reits NPV Fonciere Des Regions Reits EUR 3.00 Gecina SA Reits EUR 7.50 Cofinimmo Reits NPV Wereldhave NV Reits EUR 10.00

44,821 18,834 14,017 13,589 12,630 10,540 9,501 9,412 9,362 8,878 8,788 8,450 8,174 7,653 6,618 6,528 6,384 6,031 5,049 5,046

6,072

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 191

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

2,034

870

Net (losses)/gains on financial assets/liabilities at fair value through profit or loss

3

(8,769)

8,313

(6,735)

9,183

(176)

(175)

(6,911)

9,008

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit Finance costs: Distributions to redeemable participating shareholders

6

(1,824)

(959)

Interest expense

7

(1)

-

Total finance costs

(1,825)

(959)

Net (loss)/profit for the financial year/period before tax

(8,736)

8,049

(71)

(89)

(8,807)

7,960

2

(50)

(8,805)

7,910

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

59,479

58,707

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(8,805)

7,910

Share transactions: Proceeds from issue of redeemable participating shares

907

1,099

(10,873)

(8,237)

Decrease in net assets resulting from share transactions

(9,966)

(7,138)

Net assets attributable to redeemable participating shareholders at the end of the year/period

40,708

59,479

Payments on redemption of redeemable participating shares

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

192 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

CURRENT ASSETS Cash and cash equivalents Margin cash account

54

53

103

171

Receivables

11

176

103

Financial assets at fair value through profit or loss

12

40,468

59,176

40,801 1

59,503

(93)

(17)

Total current assets CURRENT LIABILITIES Bank overdraft Payables

13

Total current liabilities Net assets attributable to redeemable participatin ng shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

(13)

(18)

(106)

(35)

40,695

59,468

13

11

40,708

59,479

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 193

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 €’000

Period from 12 June 2010 to 28 February 2011 €’000

(8,592)

8,263

(179) 2 (8,769)

57 (7) 8,313

Year ended 29 February 2012 €’000 (176) (176)

Period from 12 June 2010 to 28 February 2011 €’000 (175) (175)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 €’000 1 842 27 870

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Net (losses)/gains on investments in securities held at fair value through profit or loss Net (losses)/gains on futures contracts Net gains/(losses) on currency

4.

Year ended 29 February 2012 €’000 1 1,965 68 2,034

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

November 2010 May 2011 November 2011 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 €’000 909 909 (2) 52 959

Year ended 29 February 2012 €’000 (1) (1)

Period from 12 June 2010 to 28 February 2011 €’000 -

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

Year ended 29 February 2012 €’000 875 864 1,739 (18) 103 1,824

Bank interest

Please refer to page 63 for each Fund’s management fee rate.

194 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year Period from ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 11 61

2

(50)

2 13

(50) 11

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 11. RECEIVABLES

Dividend income receivable Securities lending income receivable Dividend tax reclaim receivable

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

6,281,769 130,000 (1,300,000) 5,111,769

7,061,769 130,000 (910,000) 6,281,769

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

5,111,769 6,281,769 7,061,769

29 February 2012 €’000 11

28 February 2011 €’000 16

3 162 176

2 85 103

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Further details are set out in the accounting policies note k) on page 30. 9.

€7.96 €9.47 €8.31

Financial assets: Investment in equities Unrealised gains on futures contracts

29 February 2012 €’000 40,448

28 February 2011 €’000 59,166

20 40,468

10 59,176

29 February 2012 €’000 (13) (13)

28 February 2011 €’000 (18) (18)

13. PAYABLES

Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

€’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

40,708 59,479 58,707

iShares plc Annual Report 195

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 201 €’000

28 February 2011 €’000

68

27

248

1,471

273

1,622

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

196 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holding Investmen nt

Fair value €'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 4,657 Equities Belgium Beverages 17,479 Anheuser-Busch InBev NV Com NPV Total Belgium Finland Electricity 9,740 Fortum Oyj Com EUR 3.40 Insurance 12,222 Sampo Oyj Com NPV Telecommunications 82,070 Nokia Oyj Com NPV Total Finland

932 4,842 22,764 21,772 16,946

5,754 11,636 4,668 6,215

12,059

5,791 36,973 5,168 12,401 14,866 14,239

www.iShares.com

France Apparel retailers Hermes International Com NPV Automobiles Renault SA Com EUR 3.81 Banks BNP Paribas SA Com EUR 2.00 Credit Agricole SA Com EUR 3.00 Societe Generale SA Com EUR 1.25 Beverages Pernod-Ricard SA Com EUR 1.55 Building materials and fixtures Cie de St-Gobain Com EUR 4.00 Lafarge SA Com EUR 4.00 Chemicals Air Liquide SA Com EUR 5.50 Electrical components & equipment Schneider Electric SA Com EUR 4.00 Electricity EDF SA Com EUR 0.50 GDF Suez Com EUR 1.00 Engineering & construction Bouygues SA Com EUR 1.00 Vinci SA Com EUR 2.50 Food Carrefour SA Com EUR 2.50 Danone Com EUR 0.25

8,054 881 881

2.16 2.16

4,939 50,949

181

0.44

258

0.63

324 763

0.80 1.87

48,979 6,466 6,614 28,541

261

0.64

192

0.47

834 104

2.05 0.26

411

1.01

447

1.10

415 163

1.02 0.40

606

1.49

1,997

2,073 43,626 27,146 11,320

4,570 6,594

615

1.51

108 720

0.27 1.77

123 485

0.30 1.19

284 723

0.70 1.77

23,264 3,741 85,186 20,448 20,244 18,126 4,216 2,797

France (cont) Healthcare products Cie Generale d'Optique Essilor International SA Com EUR 0.18 Holding companies - diversified operations LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 Hotels Accor SA Com EUR 3.00 Insurance AXA SA Com EUR 2.29 Integrated oil & gas Total SA Com EUR 2.50 Machinery — diversified Alstom SA Com EUR 7.00 Personal products L'Oreal SA Com EUR 0.20 Pharmaceuticals Sanofi Com EUR 2.00 Real estate investment trusts Unibail-Rodamco SE Reits EUR 5.00 Retail PPR Com EUR 4.00 Telecommunications France Telecom SA Com EUR 4.00 Vivendi SA Com EUR 5.50 Water Veolia Environnement SA Com EUR 5.00 Total France Germany Apparel retailers Adidas AG Com NPV Auto manufacturers Bayerische Motoren Werke AG Com EUR 1.00 Daimler AG Com NPV Volkswagen AG Pref NPV Banks Commerzbank AG Com NPV Deutsche Bank AG Com NPV Chemicals BASF SE Com NPV Bayer AG Com NPV K&S AG Com NPV Linde AG Com NPV

Fair value €'000

% of net asset value

278

0.68

1,032

2.54

130

0.32

617

1.52

2,057

5.05

209

0.51

566

1.39

1,584

3.89

290

0.71

265

0.65

500 437

1.23 1.07

104 14,560

0.26 35.77

269

0.66

456 1,056 524

1.12 2.59 1.29

160 717

0.39 1.76

1,333 1,004 157 349

3.27 2.46 0.39 0.86

iShares plc Annual Report 197

As at 29 February 2012

Holding Investment

3,604 4,900

9,983 4,137

4,299 8,484 20,045 71,624 41,742 12,648 20,149 19,727

254,896 94,777 153,905 34,018

59,570 7,128 292,368

Germany (cont) Food retailers and wholesalers Metro AG Com NPV Health care providers Fresenius Medical Care AG & Co KGaA Com NPV Insurance Allianz SE Com NPV Muenchener Rueckversicherungs AG Com NPV Investment services Deutsche Boerse AG Com NPV Iron & steel ThyssenKrupp AG Com NPV Miscellaneous manufacturers Siemens AG Com NPV Mobiile telecommunications Deutsche Telekom AG Com NPV Multiutilities E.ON AG Com NPV RWE AG Com NPV Software SAP AG Com NPV Transportation Deutsche Post AG Com NPV Total Germany Italy Banks Intesa Sanpaolo SpA Com EUR 0.52 UniCredit SpA Com NPV Electricity Enel SpA Com EUR 1.00 Insurance Assicurazioni Generali SpA Com EUR 1.00 Integrated oil & gas ENI SpA Com EUR 1.00 Oil equipment & services Saipem SpA Com EUR 1.00 Telecommunications Telecom Italia SpA Com EUR 0.55 Total Italy

Luxembourg Industrial metals & mining 25,689 ArcelorMittal Com NPV Total Luxembourg

198 iShares plc Annual Report

Fair value €'000

% of net asset value

Holding Investment

6,286

107

0.26

258

0.63

906

2.23

452

1.11

25,050

214

0.53

33,984

171

0.42

41,670 84,781

1,497

3.68

627

1.54

719 431

1.77 1.06

1,017

2.50

260 12,684

0.64 31.16

5,104 22,133

15,900 9,461

372 369

0.91 0.91

463

1.14

411

1.01

1,030

2.53

270

0.66

253 3,168

0.62 7.78

33,503

Netherlands Beverages Heineken NV Com EUR 1.60 Chemicals Akzo Nobel NV Com EUR 2.00 Electronics Koninklijke Philips Electronics NV Com EUR 0.20 Food retailers and wholesalers Koninklijke Ahold NV Com EUR 0.30 Unilever NV CVS EUR 0.16 Insurance Aegon NV Com EUR 0.12 ING Groep NV CVS EUR 0.24 Media Reed Elsevier NV Com EUR 0.07 Semiconductors ASML Holding NV Com EUR 0.09 Telecommunications Koninklijke KPN NV Com EUR 0.24 Total Netherland ds

Portugal Telecommunications 19,447 Portugal Telecom SGPS SA Com EUR 0.03 Total Portugal

5,469 107,393 191,793

97,892 25,338 100,692

Spain Apparel retailers Inditex SA Com EUR 0.15 Banks Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 Banco Santander SA Com EUR 0.50 Electricity Iberdrola SA Com EUR 0.75 Integrated oil & gas Repsol YPF SA Com EUR 1.00 Telecommunications Telefonica SA Com EUR 1.00 Total Spain Total equities

406 406

Fair value €'000

% of net asset value

249

0.61

217

0.53

349

0.86

260 847

0.64 2.08

164 564

0.40 1.39

147

0.36

326

0.80

273 3,396

0.67 8.34

75 75

0.19 0.19

379

0.93

722

1.78

1,194

2.93

435

1.06

496

1.22

1,289 4,515

3.17 11.09

40,448

99.36

1.00 1.00

www.iShares.com

As at 29 February 2012 Fair value €'000

Holding Investment

% of net asset value

Financial Derivative Instruments Futures contracts No. of contracts 10 Euro Stoxx 50 Index Futures March 2012 Total unrealised gains on futures contracts

Unrealised % of net gain asset €'000 value

Total value of investments

20

0.05

20

0.05

40,468

99.41

64

0.16

163

0.40

40,695

99.97

13

0.03

Cash† Other net assets Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

40,708 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company €102,856 held as security by the counterparty for futures contracts.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

www.iShares.com

Fair value €'000

% of total current assets

40,448

99.13

20 333 40,801

0.05 0.82 100.00

iShares plc Annual Report 199

For the year ended 29 February 2012 The 20 largest purchases

The 20 largest sales Holding 14,352 5,829 28,934 58,153 8,181 60,576 5,938 18,682 6,754 6,637 5,352 2,337 10,599 2,765 5,852 12,390 10,582 223,944 9,809 5,883

Invesstments Total SA Com EUR 2.50 Siemens AG Com NPV Telefonica SA Com EUR 1.00 Banco Santander SA Com EUR 0.50 Sanofi Com EUR 2.00 Iberdrola SA Com EUR 0.75 BASF SE Com NPV ENI SpA Com EUR 1.00 Daimler AG Com NPV BNP Paribas SA Com EUR 2.00 Bayer AG Com NPV LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 GDF Suez Com EUR 1.00 Allianz SE Com NPV SAP AG Com NPV E.ON AG Com NPV Repsol YPF SA Com EUR 1.00 Unicredit SpA Com NPV Unilever NV CVS EUR 0.16 Deutsche Bank AG Com NPV

Proceeds €‘000 557 497 465 420 416 354 339 297 295 288 273 263 258 244 244 242 239 236 223 213

Holding 10,330 5,007 7,808 19,699 30,309 3,741 11,581 9,282 1,537 3,045 2,087 589 2,583 732 1,497 629 744 2,253 5,461 555

Investments ASML Holding NV Com EUR 0.09 Adidas AG Com NPV Saipem SpA Com EUR 1.00 Banco Santander SA Com EUR 0.50 Commerzbank AG Com NPV RWE AG Com NPV Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 Iberdrola SA Com EUR 0.75 Total SA Com EUR 2.50 ENI SpA Com EUR 1.00 Repsol YPF SA Com EUR 1.00 Siemens AG Com NPV Telefonica SA Com EUR 1.00 Sanofi Com EUR 2.00 GDF Suez Com EUR 1.00 BASF SE Com NPV Vinci SA Com EUR 2.50 AXA SA Com EUR 2.29 Aegon NV Com EUR 0.12 Bayer AG Com NPV

Cost €‘000 275 247 236 124 115 99 76 53 52 46 45 43 37 36 36 31 28 26 26 25

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

200 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

2,951

1,303

Net (losses)/gains on financial assets/liabilities at fair value through profit or loss

3

(9,953)

10,438

(7,002)

11,741

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(261)

(229)

(7,263)

11,512

Finance costs: Distributions to redeemable participating shareholders

6

(2,612)

(1,041)

Interest expense

7

(1)

-

Total finance costs

(2,613)

(1,041)

Net (loss)/profit for the financial year/period before tax

(9,876)

10,471

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(69)

(90)

(9,945)

10,381

13

(54)

(9,932)

10,327

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

82,996

76,908

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(9,932)

10,327

(18,259)

(4,239)

(18,259)

(4,239)

54,805

82,996

Share transactions: Payments on redemption of redeemable participating shares Decrease in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period * For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 201

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

4

163

122

89

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

313

246

Financial assets at fair value through profit or loss

12

54,424

82,527

54,863

83,025

Total current assets CURRENT LIABILITIES Bank overdraft Payables

13

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus

8

(50)

-

(18)

(26)

(68)

(26)

54,795

82,999

10

(3)

54,805

82,996

Net asset value attributable to redeemable participating shareholders at the end of the year/period

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

202 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 2 1 2,888 1,277 61 25 2,951 1,303

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net (losses)/gains on futures contracts Net (losses)/gains on currency

4.

10,407

(171) (7) (9,953)

28 3 10,438

Year ended 29 February 2012 €’000 (261) (261)

Period from 12 June 2010 to 28 February 2011 €’000 (229) (229)

OPERATING EXPENSES

Management fees

5.

(9,775)

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

November 2010 May 2011 November 2011 Equalisation income Equalisation expense

7.

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 996 1,282 1,057 2,339 996 273 45 2,612 1,041

Bank interest

Year ended 29 February 2012 €’000 (1) (1)

Period from 12 June 2010 to 28 February 2011 €’000 -

Please refer to page 63 for each Fund’s management fee rate.

www.iShares.com

iShares plc Annual Report 203

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 €’000 (3)

Period from 12 June 2010 to 28 February 2011 €’000 51

13

(54)

13 10

(54) (3)

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 11. RECEIVABLES

Dividend income receivable Securities lending income receivable Dividend tax reclaim receivable

SHARE CAPITAL

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 are classified as financial liabilities. 29 February Number of redeemable participating 2012 shares: No. of Shares Balance at the beginning of year/period 3,575,000 Issued during year/period Redeemed during year/period (975,000) Balance at the end of year/period 2,600,000

28 February 2011 No. of Shares 3,770,000 (195,000) 3,575,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

2,600,000 3,575,000 3,770,000

29 February 2012 €’000 185

28 February 2011 €’000 178

2 126 313

5 63 246

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Further details are set out in the accounting policies note k) on page 30. 9.

€21.08 €23.22 €20.40

Financial assets: Investment in equities Unrealised gains on futures contracts

29 February 2012 €’000 54,411

28 February 2011 €’000 82,519

13 54,424

8 82,527

29 February 2012 €’000 (18) (18)

28 February 2011 €’000 (26) (26)

13. PAYABLES

Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

€’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

204 iShares plc Annual Report

54,805 82,996 76,908

www.iShares.com

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

61

25

1,651

703

1,819

775

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

.

www.iShares.com

iShares plc Annual Report 205

As at 29 February 2012

Holding Investmeent

Fair value €'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 5,111 Equities Belgium Beverages 13,702 Anheuser-Busch InBev NV Com NPV Total Belgium Finland Telecommunications 64,697 Nokia Oyj Com NPV Total Finland

3,782 17,892 13,322

4,532 9,170 3,723 4,888 9,461

28,957 4,058 9,735 11,737 11,120

6,313

3,985 40,081 38,431

France Automobiles Renault SA Com EUR 3.81 Banks BNP Paribas SA Com EUR 2.00 Societe Generale SA Com EUR 1.25 Beverages Pernod-Ricard SA Com EUR 1.55 Building materials and fixtures Cie de St-Gobain Com EUR 4.00 Lafarge SA Com EUR 4.00 Chemicals Air Liquide SA Com EUR 5.50 Electrical components & equipment Schneider Electric SA Com EUR 4.00 Electricity GDF Suez Com EUR 1.00 Engineering & construction Bouygues SA Com EUR 1.00 Vinci SA Com EUR 2.50 Food Carrefour SA Com EUR 2.50 Danone Com EUR 0.25 Holding companies - diversified operations LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 Hotels Accor SA Com EUR 3.00 Insurance AXA SA Com EUR 2.29 Integrated oil & gas Total SA Com EUR 2.50

206 iShares plc Annual Report

5,160

690 690

1.26 1.26

22,410 1,580

1,640 255 255

0.47 0.47

150

0.27

656

1.20

323

0.59

352

0.64

327 130

0.59 0.24

477

0.87

483

0.88

564

1.03

97 380

0.18 0.69

224 565

0.41 1.03

34,316 21,363

18,238 2,942 16,083 15,883 14,285 2,199 7,848 3,224

15,715 56,505 32,917 9,824 15,799 15,465

809

1.48

105

0.19

485

0.89

1,614

2.94

France (cont) Machinery — diversified Alstom SA Com EUR 7.00 Personal products L'Oreal SA Com EUR 0.20 Pharmaceuticals Sanofi Com EUR 2.00 Real estate investment trusts Unibail-Rodamco SE Reits EUR 5.00 Retail PPR Com EUR 4.00 Telecommunications France Telecom SA Com EUR 4.00 Vivendi SA Com EUR 5.50 Total France Germany Auto manufacturers Daimler AG Com NPV Volkswagen AG Pref NPV Banks Deutsche Bank AG Com NPV Chemicals BASF SE Com NPV Bayer AG Com NPV Linde AG Com NPV Insurance Allianz SE Com NPV Muenchener Rueckversicherungs AG Com NPV Miscellaneous manufacturers Siemens AG Com NPV Mobile telecommunications Deutsche Telekom AG Com NPV Multiutilities E.ON AG Com NPV RWE AG Com NPV Software SAP AG Com NPV Transportation Deutsche Post AG Com NPV Total Germany

Italy Banks 200,835 Intesa Sanpaolo SpA Com EUR 0.52 75,225 UniCredit SpA Com NPV

Fair value €'000

% of net asset value

165

0.30

441

0.81

1,244

2.27

229

0.42

209

0.38

393 344 10,766

0.71 0.63 19.64

828 412

1.51 0.75

564

1.03

1,046 791 274

1.91 1.44 0.50

712

1.30

352

0.64

1,174

2.14

494

0.90

567 335

1.04 0.61

798

1.46

204 8,551

0.37 15.60

293 293

0.54 0.53

www.iShares.com

As at 29 February 2012

Holding Investment

121,101 26,776

46,689 230,952

Italy (cont) Electricity Enel SpA Com EUR 1.00 Insurance Assicurazioni Generali SpA Com EUR 1.00 Integrated oil & gas ENI SpA Com EUR 1.00 Teleecommunications Telecom Italia SpA Com EUR 0.55 Total Italy

Jersey Advertising 21,563 WPP Plc Com GBP 0.10 Pharmaceuticals 9,665 Shire Plc Com GBP 0.05 Total Jersey Luxeembourg Industrial metals & mining 20,172 ArcelorMittal Com NPV Total Luxembourg

4,977 3,963 17,379

26,639 19,783

33,219 66,716 12,501 7,459 26,400

Netherlands Beverages Heineken NV Com EUR 1.60 Chemicals Akzo Nobel NV Com EUR 2.00 Electronics Koninklijke Philips Electronics NV Com EUR 0.20 Food Unilever NV CVS EUR 0.16 Food retailers and wholesalers Koninklijke Ahold NV Com EUR 0.30 Insurance Aegon NV Com EUR 0.12 ING Groep NV CVS EUR 0.24 Media Reed Elsevier NV Com EUR 0.07 Semiconductors ASML Holding NV Com EUR 0.09 Telecommunications Koninklijke KPN NV Com EUR 0.24 Total Netherlands

Fair value €'000

% of net asset value

364

0.67

323

0.59

Holding Investment

4,306 84,509 152,434

808

1.47

200 2,281

0.36 4.16

77,018 19,965 79,072

207

0.38

253 460

0.46 0.84

319 319

0.58 0.58

32,233

210,417 306,780 693,837 41,071

197

0.36

168

0.31

274

0.50

664

1.21

55,683

205

0.37

32,154 136,674 22,633

131 444

0.24 0.81

61,384

116

0.21

89,019

257

0.47

215 2,671

0.39 4.87

22,791 36,327 24,854 38,411

43,314 20,555 27,402

50,062 www.iShares.com

Spain Apparel retailers Inditex SA Com EUR 0.15 Banks Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 Banco Santander SA Com EUR 0.50 Electricity Iberdrola SA Com EUR 0.75 Integrated oil & gas Repsol YPF SA Com EUR 1.00 Telecommunications Telefonica SA Com EUR 1.00 Total Spain United Kingdom Aerospace Rolls-Royce Holdings Plc Com GBP 0.20 Banks Barclays Plc Com GBP 0.25 HSBC Holdings Plc Com USD 0.50 Lloyds Banking Group Plc Com GBP 0.10 Standard Chartered Plc Com USD 0.50 Beverages Diageo Plc Com GBP 0.29 SABMiller Plc Com USD 0.10 Broadline retailers Marks & Spencer Group Plc Com GBP 0.25 Defence BAE Systems Plc Com GBP 0.03 Food J Sainsbury Plc Com GBP 0.29 Tesco Plc Com GBP 0.05 Unilever Plc Com GBP 0.03 Gas National Grid Plc Com GBP 0.11 Gas distribution Centrica Plc Com GBP 0.06 General mining Anglo American Plc Com USD 0.55 BHP Billiton Plc Com USD 0.50 Rio Tinto Plc Com GBP 0.10 Xstrata Plc Com USD 0.50 Insurance Aviva Plc Com GBP 0.25

Fair value €'000

% of net asset value

298

0.55

569

1.04

949

1.73

342

0.62

391

0.71

1,013 3,562

1.85 6.50

313

0.57

615 2,034

1.12 3.71

289

0.53

793

1.45

777 625

1.42 1.14

119

0.22

208

0.38

115 516 548

0.21 0.94 1.00

470

0.86

323

0.59

721 884 1,063 550

1.32 1.61 1.94 1.00

220

0.40

iShares plc Annual Report 207

As at 29 February 2012

Holding Investment

43,597 58,010 324,540 61,089 46,315

22,710 14,002 20,989 869,972 12,435

22,401 87,454 32,469 133,589 33,928 17,446

United Kingdom (cont) Insurance (cont) Prudential Plc Com GBP 0.05 Integrated oil & gas BG Group Plc Com GBP 0.10 BP Plc Com USD 0.25 Royal Dutch Shell Plc Class ‘A’ Com EUR 0.07 Royal Dutch Shell Plc Class 'B' Com EUR 0.07 Media British Sky Broadcasting Group Plc Com GBP 0.50 Pearson Plc Com GBP 0.25 Reed Elsevier Plc Com GBP 0.14 Mobile telecommunications Vodafone Group Plc Com USD 0.11 Nondurable household products Reckitt Benckiser Group Plc Com GBP 0.10 Pharmaceuticals AstraZeneca Plc Com USD 0.25 GlaxoSmithKline Plc Com GBP 0.25 Restaurants & bars Compass Group Plc Com GBP 0.10 Telecommunications BT Group Plc Com GBP 0.05 Tobacco British American Tobacco Plc Com GBP 0.25 Imperial Tobacco Group Plc Com GBP 0.10 Total United Kingdom Total equities

Fair value €'000

% of net asset value

371

0.68

1,050 1,908

1.92 3.48

1,673

3.05

1,288

2.35

Fair value €'000

% of net asset value

54,795

99.98

Adjustment to align to the valuation methodology as set out in the prospectus

10

0.02

Net asset value attributable to redeemable participating shareholders at the end of the year

54,805

100.00

Holding Investment Net assets attributable to redeemable participating shareholders

†

181 200 138 1,758

0.33 0.37 0.25 3.21

516

0.94

750 1,448

1.37 2.64

244

0.45

343

0.62

1,286

2.35

519 24,856

0.94 45.36

54,411

99.28

Substantially all cash positions are held with State Street Bank and Trust Company other than €121,529 held as security by the counterparty for futures contracts.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

Fair value €'000

% of total current assets

54,411

99.18

13 439 54,863

0.02 0.80 100.00

Financial Derivative Instruments Futures contracts No. of contracts 15 DJ Stoxx 50 Future March 2012 Total unrealised gains on futures contracts Total value of investments Cash† Other net assets 208 iShares plc Annual Report

Unrealised % of net gain asset €'000 value 13 0.02 13

0.02

54,424

99.30

76

0.14

295

0.54 www.iShares.com

For the year ended 29 February 2012 The 20 largest sales Proceeds Holding Investments €‘000 119,536 HSBC Holdings Plc Com USD 0.50 729 372,124 Vodafone Group Plc Com USD 0.11 717 126,311 BP Plc Com USD 0.25 613 37,935 GlaxoSmithKline Plc Com GBP 0.25 567 23,791 Royal Dutch Shell Plc Class 'A' Com EUR 0.07 564 15,008 Total SA Com EUR 2.50 522 11,690 Rio Tinto Plc Com GBP 0.10 485 6,160 Siemens AG Com NPV 449 18,691 Royal Dutch Shell Plc Class 'B' Com EUR 0.07 447 13,844 British American Tobacco Plc Com GBP 0.25 446 8,735 Sanofi Com EUR 2.00 434 30,797 Telefonica SA Com EUR 1.00 433 16,481 BHP Billiton Plc Com USD 0.50 382 11,351 AstraZeneca Plc Com USD 0.25 369 59,193 Banco Santander SA Com EUR 0.50 362 22,607 BG Group Plc Com GBP 0.10 343 6,197 BASF SE Com NPV 322 57,612 Iberdrola SA Com EUR 0.75 316 2,480 LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 286 19,737 ENI SpA Com EUR 1.00 280

The 20 largest purchases Holding 100,137 10,872 1,775 12,665 2,700 8,590 5,000 5,715 1,250 1,643 4,119 515 1,109 589 744 2,101 554 1,313 4,650 3,699

Investments Centrica Plc Com GBP 0.06 Shire Plc Com GBP 0.05 Unibail-Rodamco SE REIT EUR 5.00 Banco Santander SA Com EUR 0.50 RWE AG Com NPV Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 HSBC Holdings Plc Com USD 0.50 Iberdrola SA Com EUR 0.75 Repsol YPF SA Com EUR 1.00 ENI SpA Com EUR 1.00 Aegon NV Com EUR 0.12 Vinci SA Com EUR 2.50 Standard Chartered Plc Com USD 0.50 GDF Suez Com EUR 1.00 AXA SA Com EUR 2.29 Aviva Plc Com GBP 0.25 Societe Generale SA Com EUR 1.25 National Grid Plc Com GBP 0.11 Intesa Sanpaolo SpA Com EUR 0.52 Ageas Com NPV

Cost €‘000 346 249 245 81 71 58 37 34 28 27 21 21 20 16 10 9 9 9 8 7

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

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iShares plc Annual Report 209

For the year ended 29 February 2012 Notes

Operating income

2

Net gains/(losses) on financial assets at fair value through profit or loss

3

Total gains Operating expenses

4

Net operating profit

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

112,610

95,887

90,326

(69,132)

202,936

26,755

(6,083)

(5,210)

196,853

21,545

Finance costs: Distributions to redeemable participating shareholders

6

(104,560)

(97,293)

Interest expense

7

-

(1)

(104,560)

(97,294)

92,293

(75,749)

3,737

(2,014)

96,030

(77,763)

Total finance costs Net profit/(loss) for the financial year/period Adjustment to align to the valuation methodology as set out in the prospectus

8

Increase/(decrease) in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable redeemable participating shareholders at the beginning of the year/period Increase/(decrease) in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

3,362,506

3,320,219

96,030

(77,763)

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares

512,376

572,262

(748,952)

(452,212)

(Decrease)/increase in net assets resulting from share transactions

(236,576)

120,050

Net assets attributable to redeemable participating shareholders at the end of the year/period

3,221,960

3,362,506

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

210 iShares plc Annual Report

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As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

CURRENT ASSETS Cash and cash equivalents

81,614

89,097

Receivables

11

128,746

82,706

Financial assets at fair value through profit or loss

12

3,090,422

3,276,417

3,300,782

3,448,220

Total current assets CURRENT LIABILITIES Payables

13

(60,238)

(60,092)

Distributions to redeemable participating shareholders payable

6

(26,827)

(30,128)

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareho olders at the end of the year/period

8

(87,065 5)

(90,220)

3,213,717

3,358,000

8,243

4,506

3,221,960

3,362,506

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

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iShares plc Annual Report 211

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Bond interest income Securities lending income

3.

Year ended 29 February 2012 €’000

Period from 12 June 2010 to 28 February 2011 €’000

90,326 90,326

(69,132) (69,132)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 €’000 122 95,743 22 95,887

NET GAINS/(LOSSES) ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Net gains/(losses) on investments in securities held at fair value through profit or loss

4.

Year ended 29 February 2012 €’000 133 112,391 86 112,610

Year ended 29 February 2012 €’000 (6,083) (6,083)

Period from 12 June 2010 to 28 February 2011 €’000 (5,210) (5,210)

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

7.

INTEREST EXPENSE

Please refer to page 63 for each Fund’s management fee rate.

Bank interest

212 iShares plc Annual Report

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 35,042 33,635 30,128 27,117 25,061 25,669 26,827 104,674 98,805 (2,740) (2,882) 2,626 1,370 104,560 97,293

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (1) (1)

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 4,506 6,520

3,737

(2,014)

3,737 8,243

(2,014) 4,506

Further details are set out in the accounting policies note k) on page 30. 9.

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 are classified as financial liabilities. 29 February 2012 No. of Shares

28 February 2011 No. of Shares

28,260,000 4,230,000 (6,300,000) 26,190,000

27,360,000 4,680,000 (3,780,000) 28,260,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS

11. RECEIVABLES

Sale of securities awaiting settlement Deposit Interest receivable Securities lending income receivable Bond income receivable Distributions payable held with Registrar*

26,190,000 28,260,000 27,360,000 €’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

29 February 2012 €’000

28 February 2011 €’000

25,731 12

4,949 39

9 76,167

1 77,717

26,827 128,746

82,706

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in bonds

3,221,960 3,362,506 3,320,219

29 February 2012 €’000 3,090,422 3,090,422

28 February 2011 €’000 3,276,417 3,276,417

29 February 2012 €’000

28 February 2011 €’000

(59,754) (484) (60,238)

(59,571) (521) (60,092)

13. PAYABLES

Purchase of securities awaiting settlement Management fees payable

No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€123.02 €118.98 €121.35

* Further details are set out on note 11 page 65.

SHARE CAPITAL

Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

iShares plc Annual Report 213

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 €’000

28 February 2011 €’000

86

22

93,228

6,264

108,954

6,666

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

214 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holdingg Investment

Fair value €'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

20,079,000 29,100,000 29,100,000 14,550,000 24,444,000

Bonds Australia Corporate bonds - Aa2 rating Commonwealth Bank of Australia 4.25% 10/11/2016 Commonwealth Bank of Australia 4.25% 06/04/2018 National Australia Bank Ltd 3.5% 23/01/2015 National Australia Bank Ltd 3.75% 06/01/2017 National Australia Bank Ltd 5.5% 20/05/2015 Total Australia

21,483

0.67

31,059

0.96

30,291

0.94

15,224

0.47

26,912 124,969

0.84 3.88

Holding Investment Germany (cont) Corporate bonds - Ba3 rating 29,100,000 Thyssenkrupp AG 4.375% 28/02/2017 Corporate bonds - Baa2 rating 46,560,000 Merck Financial Services GmbH 4.5% 24/03/2020 Total Germany

14,550,000 7,275,000 29,100,000 14,550,000

7,275,000 7,275,000 14,550,000 14,550,000 31,719,000 14,550,000 51,507,000 14,550,000

21,782,000

21,825,000 36,375,000

14,550,000 7,275,000 14,550,000 29,100,000 29,100,000

www.iShares.com

France Corporate bonds - A1 rating GDF Suez 2.75% 18/10/2017 GDF Suez 6.875% 24/01/2019 Corporate bonds - A2 rating Sanofi 3.125% 10/10/2014 Sanofi 3.5% 17/05/2013 Sanofi 4.5% 18/05/2016 Corporate bonds - Aa3/*- rating BNP Paribas SA 3.5% 07/03/2016 BNP Paribas SA 3.75% 25/11/2020 BNP Paribas SA 4.125% 14/01/2022 Corporate bonds - Baa1 rating Veolia Environnement SA 5.25% 24/04/2014 Total France Germany Corporate bonds - A2/*- rating Commerzbank AG 3.625% 10/07/2017 Commerzbank AG 3.875% 22/03/2017 Corporate bonds - A3 rating Daimler AG 1.75% 21/05/2015 Daimler AG 4.125% 19/01/2017 Daimler AG 4.625% 02/09/2014 Volkswagen Financial Services AG 6.875% 15/01/2014 Volkswagen Leasing GmbH 2.25% 10/11/2014

7,537 9,260

0.23 0.29

15,235 14,960 35,513

0.47 0.47 1.10

15,112

0.47

52,480

1.63

15,148

0.47

23,317 188,562

0.72 5.85

21,958

0.68

37,200

1.16

14,671 7,995 15,672

0.45 0.25 0.49

32,010

0.99

29,659

0.92

74,496,000 29,100,000 7,820,000 58,200,000 25,608,000 24,444,000

Ireland Corporate bonds - Aa2 rating GE Capital European Funding 3.75% 04/04/2016 GE Capital European Funding 4.75% 30/07/2014 GE Capital European Funding 4.875% 06/03/2013 GE Capital European Funding 5.25% 18/05/2015 Total Ireland Italy Corporate bonds - A2 rating Assicurazioni Generali SpA 5.125% 16/09/2024 ENI SpA 4.25% 03/02/2020 Corporate bonds - A3 rating Atlantia SpA 4.5% 08/02/2019 Atlantia SpA 5.625% 06/05/2016 Enel SpA 5.25% 20/06/2017 Terna Rete Elettrica Nazionale SpA 4.75% 15/03/2021 Total Italy

Luxembourg Corporate bonds - Aa2 rating 44,232,000 Novartis Finance SA 4.25% 15/06/2016 Corporate bonds - Baa3 rating 14,550,000 ArcelorMittal 8.25% 03/06/2013 14,550,000 ArcelorMittal 9.375% 03/06/2016 Total Luxembourg Netherlands Corporate bonds - A1 rating 14,550,000 BASF Finance Europe NV 5% 26/09/2014 14,550,000 Schlumberger Finance BV 2.75% 01/12/2015

Fair value €'000

% of net asset value

29,859

0.93

52,033 241,057

1.61 7.48

15,475

0.48

7,789

0.24

30,165

0.94

16,034 69,463

0.50 2.16

71,872 30,417

2.23 0.94

7,976

0.25

63,551 27,163

1.97 0.84

24,975 225,954

0.78 7.01

49,288

1.53

15,585

0.48

17,253 82,126

0.54 2.55

15,903

0.50

15,233

0.47

iShares plc Annual Report 215

As at 29 February 2012

Holding Investment

14,550,000

46,560,000

14,550,000 21,534,000

16,005,000 52,962,000 14,550,000 7,275,000 14,550,000 7,275,000 98,067,000 14,550,000 14,550,000

45,687,000 29,100,000

14,550,000 56,745,000 29,100,000 29,100,000

14,550,000

7,275,000

14,550,000

Netherlands (cont) Corporate bonds - A1 rating (cont) Siemens Financieringsmaatschappij NV 5.125% 20/02/2017 Siemens Financieringsmaatschappij NV 5.625% 11/06/2018 Corporate bonds - A2 rating BMW Finance NV 2.125% 13/01/2015 Nederlandse Gasunie NV 6% 30/10/2013 Corporate bonds - A3 rating Bayer Capital Corp BV 4.625% 26/09/2014 Daimler International Finance BV 7.875% 16/01/2014 Diageo Capital BV 5.5% 01/07/2013 E.ON International Finance BV 4.875% 28/01/2014 E.ON International Finance BV 5.5% 19/01/2016 E.ON International Finance BV 5.5% 02/10/2017 Enel Finance International NV 5% 14/09/2022 RWE Finance BV 5% 10/02/2015 RWE Finance BV 6.625% 31/01/2019 Corporate bonds - Aa1 rating Shell International Finance BV 4.375% 14/05/2018 Shell International Finance BV 4.5% 09/02/2016 Corporate bonds - Aa3/*-- rating ABN Amro Bank NV 2.75% 29/10/2013 Fortis Bank Nederland NV 4% 03/02/2015 ING Bank NV 3.375% 03/03/2015 ING Bank NV 3.875% 24/05/2016 Corporate bonds - Aaa/*-- rating Cooperatieve Centrale RaiffeisenBoerenleenbank BA 3.375% 21/04/2017 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 3.5% 17/10/2018 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 3.875% 20/04/2016

216 iShares plc Annual Report

Fair value €'000

% of net asset value

Holding Investment

29,100,000 16,819

0.52 80,025,000

56,006

1.74 21,825,000

14,845

0.46

23,117

0.72

14,550,000 37,830,000

17,349

0.54

59,221

1.84

15,310

0.47

7,751

0.24

16,589

0.51

8,563

0.27

100,532 16,000

3.12 0.50

18,128

0.56

30,846,000

51,995

1.61

32,414

1.01

14,550,000 14,550,000 39,285,000 24,153,000

29,973,000 29,100,000 14,715

0.46

59,491

1.85

30,006

0.93

30,280

0.94

14,550,000 29,100,000

14,550,000 14,974

0.46

45,687,000 29,100,000

7,451

0.23

15,306

0.47

19,206,000 14,550,000

Fair value €'000

Nettherlands (cont) Corporate bonds - Aaa/*-- rating (cont) Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4.125% 04/04/2012 29,180 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4.375% 22/01/2014 84,101 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4.375% 05/05/2016 23,419 Corporate bonds - Baa1 rating Deutsche Telekom International Finance BV 4.875% 22/04/2025 16,347 Deutsche Telekom International Finance BV 5.75% 14/04/2015 42,325 Deutsche Telekom International Finance BV 6% 20/01/2017 36,114 Total Netherlands 889,484 Norway Corporate bonds - Aa2 rating Statoil ASA 4.375% 11/03/2015 Statoil ASA 5.625% 11/03/2021 Corporate bonds - Aa3/*-- rating DNB Bank ASA 4.5% 29/05/2014 DNB Bank ASA 5.875% 20/06/2013 Total Norway Sweden Corporate bonds - A2 rating Vattenfall AB 4.25% 19/05/2014 Corporate bonds - Aa2/*-- rating Nordea Bank AB 2.75% 11/08/2015 Nordea Bank AB 3% 06/08/2012 Nordea Bank AB 4.5% 12/05/2014 Total Sweden Switzerland Corporate bonds - Aa1/*-- rating Credit Suisse AG 2.875% 24/09/2015 Credit Suisse AG 4.75% 05/08/2019 Credit Suisse AG 5.125% 18/09/2017 Corporate bonds - Aa3/*-- rating UBS AG 3.5% 15/07/2015 UBS AG 4.875% 21/01/2013

% of net asset value

0.91

2.61

0.73

0.51 1.31 1.12 27.61

15,869 18,218

0.49 0.57

41,743

1.29

25,502 101,332

0.79 3.14

31,826

0.99

30,023 14,672

0.93 0.46

30,935 107,456

0.96 3.34

14,787

0.46

49,214

1.53

32,104

0.99

19,804 14,952

0.62 0.46

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value €'000

Switzerland (cont) Corporate bonds - Aa3/*-- rating (cont) 14,550,000 UBS AG 5.625% 19/05/2014 15,560 14,550,000 UBS AG 6% 18/04/2018 16,638 Total Switzerland 163,059

18,915,000 29,100,000 14,550,000

14,550,000 47,433,000 6,969,000 15,423,000 47,433,000

17,751,000

14,550,000 29,100,000 21,825,000

29,100,000 14,550,000

14,550,000

14,550,000 14,550,000 36,375,000 46,560,000

www.iShares.com

United Kingdom Corporate bonds - A1 rating GlaxoSmithKline Capital Plc 3.875% 06/07/2015 GlaxoSmithKline Capital Plc 5.125% 13/12/2012 GlaxoSmithKline Capital Plc 5.625% 13/12/2017 Corporate bonds - A1/*-- rating Bank of Scotland Plc 5.625% 23/05/2013 HSBC Holdings Plc 6% 10/06/2019 Lloyds TSB Bank Plc 4.625% 02/02/2017 Lloyds TSB Bank Plc 5.375% 03/09/2019 Lloyds TSB Bank Plc 6.375% 17/06/2016 Corporate bonds - A2 rating BP Capital Markets Plc 3.83% 06/10/2017 Corporate bonds - A2/*-- rating Royal Bank of Scotland Plc 4.875% 15/07/2015 Royal Bank of Scotland Plc 4.875% 20/01/2017 Royal Bank of Scotland Plc 5.375% 30/09/2019 Corporate bonds - A3 rating Vodafone Group Plc 4.65% 20/01/2022 Vodafone Group Plc 5.375% 06/06/2022 Corporate bonds - A3/*-- rating Royal Bank of Scotland Group Plc 5.25% 15/05/2013 Corporate bonds - Aa2/*-- rating HSBC Bank Plc 4% 15/01/2021 Corporate bonds - Aa3/*-- rating Barclays Bank Plc 4% 20/01/2017 Barclays Bank Plc 4.125% 15/03/2016 Barclays Bank Plc 5.25% 27/05/2014

% of net asset value

0.48 0.52 5.06

0.64

30,054

0.93

48,306,000

17,408

0.54

14,550,000

15,067

0.47

14,550,000

51,867

1.61

7,031

0.22

15,926

0.49

51,532

1.60

50,925,000 14,550,000

36,375,000 14,550,000

15,076

0.47

29,357

0.91

21,940

0.68

33,237

1.03

17,358

0.54

14,914

0.46

15,422

0.48

15,227

0.47

38,137

1.19

49,638

1.54

44,372 523,120

1.38 16.24

14,999

0.47

52,916

1.64

56,030

1.74

19,148

0.59

15,178

0.47

56,431

1.75

14,841

0.46

35,723

1.11

14,636

0.45

14,839 15,147

0.46 0.47

42,453

1.32

21,499 373,840

0.67 11.60

Total bonds

3,090,422

95.92

Total value of investments

3,090,422

95.92

Cash†

81,614

2.53

Other net assets

41,681

1.29

3,213,717

99.74

8,243

0.26

United Kingdom (cont) Corporate bonds - Baa3 rating 36,375,000 Imperial Tobacco Finance Plc 8.375% 17/02/2016 Total United Kingdom

20,434

0.59

% of net asset value

Holding Investment

14,550,000 51,025,000

19,123

Fair value €'000

14,550,000 14,550,000 36,375,000

19,497,000

United States Corporate bonds - A1 rating Pfizer Inc 3.625% 03/06/2013 Roche Holdings Inc 4.625% 04/03/2013 Roche Holdings Inc 5.625% 04/03/2016 Roche Holdings Inc 6.5% 04/03/2021 Corporate bonds - A1/*-- rating Goldman Sachs Group Inc 5.125% 16/10/2014 Corporate bonds - A2 rating BMW US Capital LLC 5% 28/05/2015 BMW US Capital LLC 6.375% 23/07/2012 Corporate bonds - A2/*-- rating Morgan Stanley 4.5% 23/02/2016 Morgan Stanley 5.5% 02/10/2017 Corporate bonds - A3/*-- rating Citigroup Inc 4% 26/11/2015 Citigroup Inc 5% 02/08/2019 Citigroup Inc 7.375% 04/09/2019 Corporate bonds - Aa3 rating Merck & Co Inc 5.375% 01/10/2014 Total United States

Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus

iShares plc Annual Report 217

As at 29 February 2012

Holding Investment Net asset value attributable to redeemable participating shareholders at the end of the year

Fair value €'000

% of net asset value

3,221,960 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company.

All credit ratings are shown as at 29 February 2012.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

218 iShares plc Annual Report

Fair value €'000

3,090,422 210,360 3,300,782

% of total current assets

93.63 6.37 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest sales Holding 100,832,000 83,838,000 79,174,000 73,704,000 66,882,000 63,607,000 63,009,000 61,544,000 58,212,000 49,484,000 44,096,000 46,158,000 40,707,000 44,226,000 40,552,000 39,814,000 32,630,000 32,950,000 35,482,000 33,031,000

Investments Roche Holdings Inc 4.625% 04/03/2013 BNP Paribas SA 3.25% 27/03/2012 Royal Bank of Scotland Group Plc 5.25% 15/05/2013 GlaxoSmithKline Capital Plc 5.125% 13/12/2012 France Telecom SA 4.75% 21/02/2017 RWE Finance BV 5% 10/02/2015 Westpac Banking Corp 4.25% 22/09/2016 UniCredit SpA 4.875% 12/02/2013 Citigroup Inc 6.4% 27/03/2013 Credit Suisse AG 6.125% 05/08/2013 Tesco Plc 5.875% 12/09/2016 Svenska Handelsbanken AB 3% 20/08/2012 Bundesrepublik Deutschland 3.25% 04/07/2021 Goldman Sachs Group Inc 5.375% 15/02/2013 UBS AG 4.875% 21/01/2013 Australia & New Zealand Banking Group Ltd 5.25% 20/05/2013 E.ON International Finance BV 5.5% 02/10/2017 Merck & Co Inc 5.375% 01/10/2014 Barclays Bank Plc 6% 23/01/2018 GE Capital European Funding 4.75% 28/09/2012

The 20 largest purchases Proceeds €‘000 104,765 84,870 81,682 76,696 70,864 69,092 65,835 62,941 60,864 52,742 49,993 46,586 45,542 45,003 42,000

Holding 58,096,000 54,179,000 49,650,000 41,193,000 48,267,000 45,261,000 40,707,000 44,648,000 40,888,000 43,494,000 35,911,000 35,092,000 34,600,000 34,300,000 32,232,000 29,100,000 31,400,000

Investments Commerzbank AG 3.875% 22/03/2017 Merck Financial Services GmbH 4% 24/03/2020 ING Bank NV 3.375% 03/03/2015 Citigroup Inc 7.375% 04/09/2019 BNP Paribas SA 3.75% 25/11/2020 Barclays Bank Plc 4.125% 15/03/2016 Bundesrepublik Deutschland 3.25% 04/07/2021 Enel Finance International NV 5% 14/09/2022 HSBC Holdings Plc 6% 10/06/2019 Morgan Stanley 4.5% 23/02/2016 Credit Suisse AG 4.75% 05/08/2019 Vattenfall AB 4.25% 19/05/2014 Royal Bank of Scotland Plc 4.875% 20/01/2017 ING Bank NV 3.875% 24/05/2016 Barclays Bank Plc 5.25% 27/05/2014 Vodafone Group Plc 4.65% 20/01/2022 Commonwealth Bank of Australia 4.25% 06/04/2018 30,461,000 DNB Bank ASA 4.5% 29/05/2014 30,600,000 Volkswagen Leasing GmbH 2.25% 10/11/2014 29,100,000 ENI SpA 4.25% 03/02/2020

Cost €‘000 58,113 56,723 49,684 47,276 46,692 45,223 44,473 43,988 43,462 43,272 37,202 36,713 34,626 34,346 33,899 33,173 32,746 32,014 30,612 29,955

41,871 36,685 35,601 35,545 33,948

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 219

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000 8,523

Operating income

2

52,478

Net (losses)/gains on financial assets at fair value through profit or loss

3

(3,104)

2,984

49,374

11,507

Total gains Operating expenses

4

Net operating profit

(3,613)

(639)

45,761

10,868

Finance costs: Distributions to redeemable participating shareholders

6

(47,309)

(7,466)

Interest expense

7

–

(2)

(47,309)

(7,468)

(1,548)

3,400

(1,548)

3,400

Total finance costs Net (loss)/profit for the financial year/period (Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period (Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

561,860

-

(1,548)

3,400

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

616,348

558,460

(150,132)

-

466,216

558,460

1,026,528

561,860

* For the period from 3 September 2010 (launch date) to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

220 iShares plc Annual Report

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As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

CURRENT ASSETS Cash and cash equivalents

92

36,758

Receivables

10

59,517

12,191

Financial assets at fair value through profit or loss

11

1,001,733

545,602

1,061,342

594,551

Total current assets CURRENT LIABILITIES Payables

12

(1,696)

(17,262)

Distributions to redeemable participating shareholders payable

6

(33,118)

(15,429)

Total current liabilities

(34,814)

(32,691)

Net assets atttributable to redeemable participating shareholders

1,026,528

561,860

Net asset value attributable to redeemable participating shareholders at the end of the year/period

1,026,528

561,860

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 9.

www.iShares.com

iShares plc Annual Report 221

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Bond interest income Securities lending income Other income

3.

Period from Year ended 3 September 2010 29 February to 28 February 2012 2011 €’000 €’000 37 9 52,043 8,514 162 236 52,478 8,523

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 3 September 2010 29 February to 28 February 2012 2011 €’000 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss

4.

2,984 2,984

OPERATING EXPENSES

Management fees

5.

(3,104) (3,104)

Period from Year ended 3 September 2010 29 February to 28 February 2012 2011 €’000 €’000 (3,613) (639) (3,613) (639)

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

February 2011 August 2011 February 2012 Equalisation income Equalisation expense

7.

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 are disclosed in note 4 and note 12 respectively.

Period from Year ended 3 September 2010 29 February to 28 February 2012 2011 €’000 €’000 15,429 19,211 33,118 52,329 15,429 (7,961) (7,963) 2,941 47,309 7,466

Bank interest

Period from Year ended 3 September 2010 29 February to 28 February 2012 2011 €’000 €’000 (2) (2)

Please refer to page 63 for each Fund’s management fee rate.

222 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 8.

SHARE CAPITAL

12. PAYABLES

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period 9.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

5,477,130 6,284,900 (1,535,086) 10,226,944

5,477,130 5,477,130

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS

Purchase of securities awaiting settlement Management fees payable

29 February 2012 €’000

28 February 2011 €’000

(1,310) (386) (1,696)

(17,069) (193) (17,262)

13. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 14. RELATED PARTIES The related parties are set out on pages 66 and 67.

No. of Shares 15.

Shares in issue As at 29 February 2012 As at 28 February 2011

10,226,944 5,477,130 €’000

Net asset value As at 29 February 2012 As at 28 February 2011

1,026,528 561,860

Net asset value per share As at 29 February 2012 As at 28 February 2011

€100.37 €102.58

10. RECEIVABLES

Securities lending income receivable Deposit Interest receivable Bond income receivable Distributions payable held with Registrar* Other receivables

29 February 2012 €’000

28 February 2011 €’000

60 1 26,338

12,187

33,118 59,517

4 12,191

* Further details are set out on note 11 page 65.

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in bonds www.iShares.com

29 February 2012 €’000 1,001,733 1,001,733

28 February 2011 €’000 545,602 545,602

SECURITIES LENDING

During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Fund receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 €’000

28 February 2011 €’000

162

-

173,815

-

191,799

-

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

iShares plc Annual Report 223

For the year ended 29 February 2012 16. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 17. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

224 iShares plc Annual Report

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As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market Bonds Australia Corporate bonds - Ba1 rating 2,750,000 Fairfax Media Group Finance Pty Ltd FRN 15/06/2012 Total Austrralia Austria Corporate bonds - Ba1/* rating 1,900,000 Wienerberger AG 4.875% 07/07/2014 Corporate bonds - Ba2 rating 3,050,000 PE Paper Escrow GmbH 11.75% 01/08/2014 2,100,000 Sappi Papier Holding GmbH 6.625% 15/04/2018 Total Austria Belgium Corporate bonds - B1 rating 2,750,000 Ontex IV SA 7.5% 15/04/2018 1,750,000 Ontex IV SA FRN 15/04/2018 Corporate bonds - Caa1 rating 1,850,000 Ideal Standard International SA 11.75% 01/05/2018 Total Belgium Bermuda Corporate bonds - B3 rating 3,100,000 Central European Media Enterprises Ltd 11.625% 15/09/2016 Total Bermuda Canada Corporate bonds - Ba2 rating 6,250,000 Bombardier Inc 7.25% 15/11/2016 Total Canada Cayman Islands Corporate bonds - B2 rating 5,750,000 Dubai Holding Commercial Operations MTN Ltd 4.75% 30/01/2014 Corporrate bonds - Ba3 rating 6,000,000 UPCB Finance II Ltd 6.375% 01/07/2020 www.iShares.com

Holding Investment Cayman Islands (cont) Corporate bonds - Ba3 rating (cont) 3,825,000 UPCB Finance Ltd 7.625% 15/01/2020 Total Cayman Islands

Fair value €'000

% of net asset value

4,040 15,105

0.39 1.47

0.27 0.27

Croatia Corporate bonds - B2 rating 4,150,000 Agrokor DD 10% 07/12/2016 Total Croatia

4,323 4,323

0.42 0.42

1,959

0.19

Denmark Corporate bonds - Caa1 rating 4,725,000 ISS A/S 8.875% 15/05/2016 Total Denmark

4,823 4,823

0.47 0.47

3,328

0.32

2,001 7,288

0.20 0.71

3,914

0.38

7,710 2,130 13,754

0.75 0.21 1.3 34

4,536

0.44

3,605 4,274

0.35 0.42

1,998

0.19

3,746

0.37

4,065

0.39

4,401

0.43

5,747 2,473 52 3,968 4,413 9,052 4,519

0.56 0.24 0.01 0.39 0.43 0.88 0.44

2,737 2,737

2,555 1,509

1,043 5,107

0.25 0.15

0.10 0.50

Finland Corporate bonds - B3 rating 3,800,000 M-real Oyj 8.75% 01/04/2013 Corporate bonds - Ba2 rating 7,325,000 Stora Enso Oyj 5.125% 23/06/2014 2,000,000 Stora Enso Oyj FRN 07/10/2016 Total Finland

4,325,000

3,500,000

2,724 2,724

0.27 0.27

4,175,000 2,700,000

4,190,000 4,150,000 6,625 6,625

0.65 0.65

4,100,000 6,250,000

5,125

0.50

5,940

0.58

2,450,000 50,000 3,950,000 4,250,000 8,550,000 4,500,000

France Corporate bonds - B1 rating Tereos Europe SA 6.375% 15/04/2014 Corporate bonds - B2 rating Alcatel-Lucent 6.375% 07/04/2014 Alcatel-Lucent 8.5% 15/01/2016 PagesJaunes Finance & Co SCA 8.875% 01/06/2018 Corporate bonds - B3 rating Labco SAS 8.5% 15/01/2018 Corporate bonds - Ba1 rating Ciments Francais SA 4.75% 04/04/2017 Crown European Holdings SA 7.125% 15/08/2018 Italcementi Finance SA 6.625% 19/03/2020 Lafarge SA 4.25% 23/03/2016 Lafarge SA 5% 16/07/2014 Lafarge SA 5.375% 26/06/2017 Lafarge SA 5.448% 04/12/2013 Lafarge SA 6.125% 28/05/2015 Lafarge SA 6.25% 13/04/2018

iShares plc Annual Report 225

As at 29 February 2012

Holding Investment

6,450,000 4,200,000 8,200,000 5,450,000 2,600,000 5,750,000 5,400,000 3,700,000 4,500,000 5,425,000 7,050,000 1,400,000 4,000,000 6,550,000 3,800,000 5,800,000 3,900,000 5,433,000 2,300,000 2,650,000 5,400,000 3,550,000 5,750,000 1,900,000 3,600,000

3,350,000

2,650,000

France (cont) Corporate bonds - Ba1 rating (cont) Lafarge SA 6.625% 29/11/2018 Lafarge SA 6.75% 16/12/2019 Lafarge SA 8.875% 27/05/2014 Lafarge SA 8.875% 24/11/2016 Nexans SA 5.75% 02/05/2017 Peugeot SA 4% 28/10/2013 Peugeot SA 5% 28/10/2016 Peugeot SA 5.625% 29/06/2015 Peugeot SA 6.875% 30/03/2016 Peugeot SA 8.375% 15/07/2014 Renault SA 4.375% 24/05/2013 Renault SA 4.5% 16/04/2012 Renault SA 4.625% 25/05/2016 Renault SA 5.625% 30/06/2015 Renault SA 5.625% 22/03/2017 Renault SA 6% 13/10/2014 Corporate bonds - Ba2 rating Rexel SA 7% 17/12/2018 Rexel SA 8.25% 15/12/2016 Corporate bonds - Ba3 rating Cegedim SA 7% 27/07/2015 Faurecia 9.375% 15/12/2016 Wendel SA 4.875% 04/11/2014 Wendel SA 4.875% 21/09/2015 Wendel SA 4.875% 26/05/2016 Wendel SA 6.75% 20/04/2018 Corporate bonds - Caa1 rating Europcar Groupe SA FRN 15/05/2013 Corporate bonds - Caa2 rating Europcar Groupe SA 9.375% 15/04/2018 Corporate bonds - Caa2/*-- rating CMA CGM SA 8.875% 15/04/2019 Total France

Fair value €'000

% of net asset value

6,461 4,207 9,179 6,206 2,649 5,850 5,528 3,873 4,810 5,971 7,187 1,403 4,069 6,879 3,996 6,186

0.63 0.41 0.89 0.60 0.26 0.57 0.54 0.38 0.47 0.58 0.70 0.14 0.40 0.67 0.39 0.60

4,122 5,983

0.40 0.58

Holding Investment

3,700,000 2,650,000 2,200,000 3,700,000

2,700,000 2,450,000 3,700,000 5,250,000

4,450,000 5,650,000 6,475,000

2,134 2,981 5,553 3,604 5,756 1,943

0.21 0.29 0.54 0.35 0.56 0.19

3,900,000 1,500,000 7,300,000 2,250,000

3,096

2,169

1,524 180,168

0.30

0.21

0.15 17.55

3,950,000

2,200,000

2,350,000 5,600,000

6,700,000 3,250,000 11,975,000

2,750,000

Germany Corporate bonds - B1 rating Kabel BW GmbH 7.5% 15/03/2019 Kabel BW GmbH FRN 15/03/2018 Unitymedia Hessen GmbH & Co KG/Unitymedia NRW GmbH 8.125% 01/12/2017 Corporate bonds - B2 rating Grohe Holding GmbH FRN 15/01/2014

226 iShares plc Annual Report

1,900,000 7,194 3,250

0.70 0.32

12,919

1.26

2,712

0.27

2,300,000

Germany (cont) Corporate bonds - B2 rating (ccont) Grohe Holding GmbH FRN 15/09/2017 Kinove German Bondco GmbH 10% 15/06/2018 Nordenia International AG 9.75% 15/07/2017 Styrolution Group GmbH 7.625% 15/05/2016 Corporate bonds - B3 rating ATU Auto-Teile-Unger Handels GmbH & Co KG 11% 15/05/2014 Grohe Holding GmbH 8.625% 01/10/2014 Hapag-Lloyd AG 9% 15/10/2015 Unitymedia GmbH 9.625% 01/12/2019 Corporate bonds - Ba1 rating Deutsche Lufthansa AG 4.625% 06/05/2013 Deutsche Lufthansa AG 6.5% 07/07/2016 Deutsche Lufthansa AG 6.75% 24/03/2014 Franz Haniel & Cie GmbH 5.875% 01/02/2017 Franz Haniel & Cie GmbH 6.25% 08/02/2018 Franz Haniel & Cie GmbH 6.75% 23/10/2014 Gerresheimer AG 5% 19/05/2018 Corporate bonds - Ba2 rating Kabel Deutschland Vertrieb und Service GmbH 6.5% 29/06/2018 Corporate bonds - Ba3 rating Hornbach Baumarkt AG 6.125% 15/11/2014 Corporate bonds - Caa1 rating Heidelberger Druckmaschinen AG 9.25% 15/04/2018 Kabel BW Musketeer GmbH 9.5% 15/03/2021 TUI AG 5.125% 10/12/2012 Corporate bonds - Caa2 rating Heckler & Koch GmbH 9.5% 15/05/2018 Total Germany

Fair value €'000

% of net asset value

3,635

0.35

2,711

0.26

2,351

0.23

3,211

0.31

2,370

0.23

2,462 3,797

0.24 0.37

5,723

0.56

4,598

0.45

6,371

0.62

7,020

0.69

4,095

0.40

1,576

0.15

7,928 2,372

0.77 0.23

4,207

0.41

2,244

0.22

1,628

0.16

6,104 1,931

0.59 0.19

1,525 103,934

0.15 10.13

www.iShares.com

As at 29 February 2012

Holding Investment Hungary Corporate bonds - Ba1 rating 6,275,000 MOL Hungarian Oil and Gas Plc 3.875% 05/10/2015 5,525,000 MOL Hungarian Oil and Gas Plc 5.875% 20/04/2017 Corporate bonds - Ba2 rating 4,050,000 OTP Bank Plc 5.27% 19/09/2016 Total Hungary

7,390,000

2,750,000 3,650,000

4,250,000 3,900,000

5,800,000 2,000,000 6,650,000

2,680,000

Ireland Corporate bonds - B1 rating Nara Cable Funding Ltd 8.875% 01/12/2018 Corporate bonds - B3 rating Ardagh Glass Finance Plc 7.125% 15/06/2017 Ardagh Packaging Finance Plc 9.25% 15/10/2020 Corporate bonds - Ba1 rating Smurfit Kappa Acquisitions 7.25% 15/11/2017 Smurfit Kappa Acquisitions 7.75% 15/11/2019 Corporate bonds - Ba3 rating Allied Irish Banks Plc 5.625% 12/11/2014 Ardagh Glass Finance Plc 9.25% 01/07/2016 Ardagh Packaging Finance Plc 7.375% 15/10/2017 Corporate bonds - Caa1 ratting Ono Finance II Plc 11.125% 15/07/2019 Total Ireland

Fair value €'000

% of net asset value

5,757

0.56

5,028

0.49

3,321 14,106

0.32 1.37

7,081

0.69

2,645

0.26

3,718

0.36

4,547

0.44

4,190

0.41

4,976

0.49

2,195

0.21

7,028

0.68

2,450 38,830

0.24 3.78

Fair value €'000

% of net asset value

2,299 27,461

0.22 2.68

Japan Corporate bonds - Ba2 rating 8,000,000 Tokyo Electric Power Co Inc 4.5% 24/03/2014 Total Japan

7,440 7,440

0.72 0.72

Jersey Corporate bonds - Ba2/*-- rating 3,750,000 ProSecure Funding LP 4.668% 30/06/2016 Total Jersey

3,084 3,084

0.30 0.30

Kazakhstan Corporate bonds - B2 rating 3,100,000 Kazkommertsbank JSC 6.875% 13/02/2017 Total Kazakhstan

2,643 2,643

0.26 0.26

Liberia Corporate bonds - Ba2 rating 7,000,000 Royal Caribbean Cruises Ltd 5.625% 27/01/2014 Total Liberia

7,082 7,082

0.69 0.69

2,294 4,150

0.22 0.41

5,161

0.50

2,375

0.23

2,039

0.20

2,297

0.23

5,390 160 2,562

0.52 0.02 0.25

4,675

0.45

Holding Investment Italy (cont) Corporate bonds - Caa1 rating 3,800,000 Seat Pagine Gialle SpA FRN 31/01/2017 Total Italy

2,200,000 4,300,000

2,550,000 3,000,000 3,500,000

2,400,000

4,200,000 4,500,000 5,350,000

www.iShares.com

Italy Corporate bonds – Ba1 rating Banca Monte dei Paschi di Siena SpA 4.875% 31/05/2016 Buzzi Unicem SpA 5.125% 09/12/2016 Banca Popolare di Milano Scarl 7.125% 01/03/2021 Corporate bonds - Ba2 rating Gruppo Editoriale L'Espresso SpA 5.125% 27/10/2014 Corporate bonds - Baa3/*-- rating Edison SpA 3.25% 17/03/2015 Edison SpA 3.875% 10/11/2017 Edison SpA 4.25% 22/07/2014

5,200,000 2,355

0.23

2,500,000

2,938

0.29

2,000,000

3,287

0.32

2,500,000

2,434 4,189 4,476 5,483

0.24 0.41 0.44 0.53

5,600,000 150,000 2,400,000 4,400,000

Luxembourg Corporate bonds - B1 rating Bormioli Rocco Holdings SA 10% 01/08/2018 Lecta SA FRN 15/02/2014 Corporate bond ds - B2 rating Codere Finance Luxembourg SA 8.25% 15/06/2015 KION Finance SA 7.875% 15/04/2018 OXEA Finance & Cy SCA 9.625% 15/07/2017 Zinc Capital SA 8.875% 15/05/2018 Corporate bonds - B3 rating Cirsa Funding Luxembourg SA 8.75% 15/05/2018 Picard Bondco SA 9% 01/10/2018 Picard Bondco SA 9% 01/10/2018 Sunrise Communications Holdings SA 8.5% 31/12/2018

iShares plc Annual Report 227

As at 29 February 2012

Holding Investment

10,150,000

4,625,000 4,500,000

7,700,000 9,550,000 1,400,000 2,450,000 2,500,000 3,250,000

2,350,000 6,050,000 6,400,000 7,850,000 9,550,000 3,300,000 5,950,000 3,750,000 2,900,000 2,200,000 3,600,000 4,050,000 13,650,000 2,550,000 3,750,000

Luxembourg (cont) Corporate bonds - B3 rating (cont) Wind Acquisition Finance SA 11.75% 15/07/2017 Corporate bonds - Ba1 rating Clariant Finance Luxembourg SA 4.375% 05/04/2013 Clariant Finance Luxembourg SA 5.625% 24/01/2017 Corporate bonds - Ba2 rating Fiat Industrial Finance Europe SA 5.25% 11/03/2015 Fiat Industrial Finance Europe SA 6.25% 09/03/2018 FMC Finance VI SA 5.5% 15/07/2016 FMC Finance VII SA 5.25% 15/02/2021 FMC Finance VIII SA 5.25% 31/07/2019 FMC Finance VIII SA 6.5% 15/09/2018 Corporate bonds - Ba3 3 rating ConvaTec Healthcare E SA 7.375% 15/12/2017 Fiat Finance & Trade SA 6.125% 08/07/2014 Fiat Finance & Trade SA 6.375% 01/04/2016 Fiat Finance & Trade SA 6.625% 15/02/2013 Fiat Finance & Trade SA 6.875% 13/02/2015 Fiat Finance & Trade SA 7.375% 09/07/2018 Fiat Finance & Trade SA 7.625% 15/09/2014 Fiat Finance & Trade SA 9% 30/07/2012 Sunrise Communications International SA 7% 31/12/2017 Telenet Finance III Luxembourg SCA 6.625% 15/02/2021 Telenet Finance IV Luxembourg SCA FRN 15/06/2021 Telenet Finance Luxembourg SCA 6.375% 15/11/2020 Wind Acquisition Finance SA 7.375% 15/02/2018 Xefin Lux SCA 8% 01/06/2018 Corporate bonds - Caa1 rating Beverage Packaging Holdings Luxembourg II SA 8% 15/12/2016

228 iShares plc Annual Report

Fair value €'000

9,947

% of net asset value

0.97

4,725

0.46

4,830

0.47

7,758

0.76

9,580

0.93

1,522

0.15

2,562

0.25

2,683 3,589

0.26 0.35

Holding Investment Luxembourg (cont) Corporate bonds - Caa1 rating (cont) 3,650,000 Beverage Packaging Holdings Luxembourg II SA 9.5% 15/06/2017 2,500,000 Capsugel FinanceCo SCA 9.875% 01/08/2019 Corporaate bonds - Caa1 rating 1,950,000 ConvaTec Healthcare E SA 10.875% 15/12/2018 Total Luxembourg

2,650,000 8,250,000 5,000,000 3,600,000 1,000,000

2,421

0.23

6,118

0.59

6,304

0.61

8,078

0.79

9,872

0.96

3,259

0.32

6,233

0.61

2,550,000 5,175,000

3,840

0.37

3,450,000

3,078

0.30

2,226

0.22

10,050,000 3,300,000

2,150,000 2,700,000

7,350,000 2,000,000 3,567

0.35

4,070

0.40

13,104 2,554

1.28 0.25

7,650,000

2,950,000 4,650,000

3,545

0.34

4,300,000

Netherlands Corporate bonds - B1 rating Clondalkin Acquisition BV FRN 15/12/2013 GMAC International Finance BV 7.5% 21/04/2015 Refresco Group BV 7.375% 15/05/2018 Schaeffler Finance BV 7.75% 15/02/2017 Schaeffler Finance BV 8.75% 15/02/2019 Corporate bonds - B1/ /*+ rating Ziggo Bond Co BV 8% 15/05/2018 Corporate bonds - B1/*-- rating Hertz Holdings Netherlands BV 8.5% 31/07/2015 Corporate bonds - B2 rating InterXion Holding NV 9.5% 12/02/2017 Magyar Telecom BV 9.5% 15/12/2016 UPC Holding BV 8% 01/11/2016 UPC Holding BV 8.375% 15/08/2020 UPC Holding BV 9.75% 15/04/2018 Corporate bonds - B3 rating Cemex Finance Europe BV 4.75% 05/03/2014 New World Resources NV 7.375% 15/05/2015 NXP BV / NXP Funding LLC FRN 15/10/2013 Corporate bonds - Ba1 rating Brenntag Finance BV 5.5% 19/07/2018 Fresenius Finance BV 5% 31/01/2013 Fresenius Finance BV 5.5% 31/01/2016

Fair value €'000

% of net asset value

3,175

0.31

2,719

0.26

1,911 164,373

0.19 16.01

2,489

0.24

8,498

0.83

4,925

0.48

3,769

0.37

1,078

0.10

10,678

1.04

3,564

0.35

2,367

0.23

2,201 2,650

0.21 0.26

5,330

0.52

3,683

0.36

6,664

0.65

2,025

0.20

2,832

0.27

3,108

0.30

4,776

0.46

4,471

0.44

www.iShares.com

As at 29 February 2012

Holding Investment

600,000 350,000

5,950,000

850,000 1,500,000 2,150,000 3,370,000 9,450,000 7,750,000 5,591,000 8,550,000 5,396,000 3,900,000 3,355,000 3,399,000

4,600,000 5,275,000 8,025,000 5,875,000 4,450,000 3,750,000

2,100,000

www.iShares.com

Fair value €'000

Netherlands (cont) Corporate bonds - Ba1 rating (cont) Portugal Telecom International Finance BV 4.375% 24/03/2017 495 Portugal Telecom International Finance BV 5.625% 08/02/2016 307 Corporate bonds - Ba1/*+ rating Ziggo Finance BV 6.125% 15/11/2017 6,188 Corporate bonds - Ba2 rating Elster Finance BV 6.25% 15/04/2018 858 Elster Finance BV 6.25% 15/04/2018 1,521 Goodyear Dunlop Tires Europe BV 6.75% 15/04/2019 2,154 HeidelbergCement Finance BV 6.5% 03/08/2015 3,652 HeidelbergCement Finance BV 6.75% 15/12/2015 10,289 HeidelbergCement Finance BV 7.5% 31/10/2014 8,478 HeidelbergCement Finance BV 7.5% 03/04/2020 6,014 HeidelbergCement Finance BV 8% 31/01/2017 9,587 HeidelbergCement Finance BV 8.5% 31/10/2019 6,091 HeidelbergCement Finance BV 9.5% 15/12/2018 4,628 OI European Group BV 6.75% 15/09/2020 3,552 OI European Group BV 6.875% 31/03/2017 3,504 Corporate bonds - Ba3 rating Conti-Gummi Finance BV 6.5% 15/01/2016 4,817 Conti-Gummi Finance BV 7.125% 15/10/2018 5,585 Conti-Gummi Finance BV 7.5% 15/09/2017 8,500 Conti-Gummi Finance BV 8.5% 15/07/2015 6,455 New World Resources NV 7.875% 01/05/2018 4,528 Phoenix PIB Finance BV 9.625% 15/07/2014 4,146 Corporate bonds - Caa1 rating Carlson Wagonlit BV FRN 01/05/2015 1,987 Total Netherlands 178,444

% of net asset value

0.05

Holding Investment Norway Corporate bonds - Caa1 rating 3,875,000 Norske Skogindustrier ASA 7% 26/06/2017 Total Norway

Fair value €'000

% of net asset value

2,507 2,507

0.24 0.24

5,126

0.50

6,059

0.59

14,107

1.37

10,474

1.02

7,525

0.73

7,246

0.71

3,600 54,137

0.35 5.27

2,922

0.28

2,707 7,206

0.26 0.70

2,959

0.29

3,160

0.31

2,414 21,368

0.24 2.08

3,450

0.34

5,922

0.58

3,551

0.34

0.03

0.60

0.08 0.15 0.21 0.36 1.00 0.83

5,050,000 7,450,000 15,850,000 11,300,000

10,000,000 8,450,000 4,000,000

0.59 0.93 0.59 2,875,000 0.45 0.35 0.34

0.47

2,950,000 8,097,000 3,050,000

3,675,000

0.55 0.83 0.63 0.44 0.40

0.19 17.38

2,900,000

Portugal Corporate bonds - Ba1/*-- rating REN - Redes Energeticas Nacionais SA 7.875% 10/12/2013 Banco Espirito Santo SA 3.875% 21/01/2015 Banco Espirito Santo SA 5.625% 05/06/2014 Caixa Geral de Depositos SA 5.125% 19/02/2014 Corporate bonds - Ba3/*-- rating Banco Comercial Portugues SA FRN 09/05/2014 Banco Comercial Portugues SA 5.625% 23/04/2014 Banco Comercial Portugues SA 9.25% 13/10/2014 Total Portugal South Africa Corporate bonds - B1 rating Consol Glass Pty Ltd 7.625% 15/04/2014 Corporate bonds - B2 rating Edcon Pty Ltd 9.5% 01/03/2018 Edcon Pty Ltd FRN 15/06/2014 Foodcorp Pty Ltd 8.75% 01/03/2018 Corporate bonds - B3 rating Peermont Global Pty Ltd 7.75% 30/04/2014 Corporate bonds - Caa1 rating Edcon Holdings Pty Ltd FRN 15/06/2015 Total South Africa

Spain Corporate bonds - B2 rating 3,650,000 Inaer Aviation Finance Ltd 9.5% 01/08/2017 Corporate bonds – Ba2 rating 5,800,000 Obrascon Huarte Lain SA 7.375% 28/04/2015 3,350,000 Obrascon Huarte Lain SA 8.75% 15/03/2018

iShares plc Annual Report 229

As at 29 February 2012

Holding Investment

4,300,000 2,300,000 3,875,000

4,000,000

Spain (cont) Corporate bonds - Ba3 rating Abengoa SA 8.5% 31/03/2016 Abengoa SA 9.625% 25/02/2015 Campofrio Food Group SA 8.25% 31/10/2016 Corporate bonds - Baa3/*-- rating Banco de Sabadell SA 6.25% 26/04/2020 Total Spain

Fair value €'000

% of net asset value

4,372 2,450

0.43 0.24

4,049

0.39

3,343 27,137

0.32 2.64

4,000,000

2,750,000 2,600,000 2,500,000

0.41

2,750 2,542

0.27 0.25

2,650,000 3,950,000 4,200,000 2,575 12,094

0.25 1.18 3,325,000

7,250,000 3,500,000 4,750,000 3,200,000 3,150,000

2,500,000 6,275,000 4,250,000 8,350,000 4,350,000 4,700,000 2,550,000 2,650,000

1,000,000

United Kingd dom Corporate bonds - B2 rating OTE Plc 4.625% 20/05/2016 OTE Plc 7.25% 08/04/2014 OTE Plc FRN 12/02/2015 R&R Ice Cream Plc 8.375% 15/11/2017 Thomas Cook Group Plc 6.75% 22/06/2015 Corporate bonds - B3 rating EC Finance Plc 9.75% 01/08/2017 Kerling Plc 10.625% 01/02/2017 Corporate bonds - Ba1 rating FCE Bank Plc 4.75% 19/01/2015 FCE Bank Plc 7.125% 15/01/2013 FCE Bank Plc 7.25% 15/07/2013 FCE Bank Plc 9.375% 17/01/2014 Corporate bonds - Ba3 rating Boparan Finance Plc 9.75% 30/04/2018 Ineos Finance Plc 9.25% 15/05/2015 Corporate bonds - Ba3e rating Ineos Finance Plc FRN 15/02/2019

230 iShares plc Annual Report

9,480

0.92

2,025 64,742

0.20 6.31

1,819

0.18

2,343

0.23

2,504

0.24

3,516

0.34

3,528

0.34

2,585

0.25

2,528

0.25

2,833

0.28

4,736

0.46

3,305 29,697

0.32 2.89

Total bonds

1,001,733

97.58

Total value of investments

1,001,733

97.58

92

0.01

24,703

2.41

1,026,528

100.00

United Kingdom (cont) Corporate bonds - Caa1 rating 10,750,000 Ineos Group Holdings Ltd 7.875% 15/02/2016 Corporate bonds - WR rating 2,000,000 CEVA Group Plc 8.5% 01/12/2014 Total United Kingdom

2,325,000 4,227

% of net asset value

Holding Investment

1,800,000 Sweden Corporate bonds - B1 rating TVN Finance Corp II AB 10.75% 15/11/2017 Corporate bonds - Ba3 rating Cyfrowy Polsat Finance AB 7.125% 20/05/2018 Stena AB 6.125% 01/02/2017 Corporate bonds - Caa1 rating Norcell Sweden Holding 2 AB 10.75% 29/09/2019 Total Sweden

Fair value €'000

2,175,000

4,835 2,585 3,373

0.47 0.25 0.33

3,232

0.32

4,850,000

1,701

0.17

3,125,000

2,284 6,112

0.22 0.60

4,367 8,636 4,578 5,193

0.42 0.84 0.45 0.51

2,750,000

United States Corporate bonds - B1 rating Rockwood Specialties Group Inc 7.625% 15/11/2014 Corporate bonds - B2 rating Levi Strauss & Co 7.75% 15/05/2018 Corporate bonds - B3 rating Cemex Finance LLC 9.625% 14/12/2017 Springleaf Finance Corp 3.25% 16/01/2013 Springleaf Finance Corp 4.125% 29/11/2013 Corporate bonds - B3/*-- rating CEDC Finance Corp International Inc 8.875% 01/12/2016 Corporate bonds - Ba1 rating Fresenius US Finance II Inc 8.75% 15/07/2015 Corporate bonds - Ba3 rating Chesapeake Energy Corp 6.25% 15/01/2017 Fiat Finance North America Inc 5.625% 12/06/2017 Reynolds Group Issuer Inc / Reynolds Group Issuer LLC / Reynolds Group Issuer Lu 8.75% 15/10/2016 Total United States

Cash† 2,522

0.24

2,819

0.27

Other net assets

1,000

0.10

Net asset value attributable to redeemable participating shareholders at the end of the year

www.iShares.com

As at 29 February 2012 †

Substantially all cash positions are held with State Street Bank and Trust Company. All credit ratings are shown as at 29 February 2012. Fair value €’000

% of total current assets

Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets

1,001,733 59,609

94.38 5.62

Total current assets

1,061,342

100.00

Analysis of total current assets and gross of all liabilities (unaudited)

www.iShares.com

iShares plc Annual Report 231

For the year ended 29 February 2012 The 20 largest sales Holding Investments

The 20 largest purchases Proceeds €‘000

10,500,000 Pernod-Ricard SA 4.875% 18/03/2016 12,650,203 8,200,000 Evonik Degussa GmbH 5.125% 10/12/2013 12,633,468 7,200,000 Pernod-Ricard SA 5% 15/03/2017 11,157,872 6,100,000 Pernod-Ricard SA 7% 15/01/2015 10,340,641 6,200,000 Fiat Finance & Trade Ltd SA 9% 30/07/2012 9,971,344 5,550,000 FCE Bank Plc 7.125% 15/01/2013 9,603,600 5,250,000 Deutsche Lufthansa AG 4.625% 06/05/2013 9,152,295 5,800,000 Wind Acquisition Finance SA 7.375% 15/02/2018 9,077,709 5,200,000 Unitymedia Hessen GmbH & Co KG/Unitymedia NRW GmbH 8.125% 01/12/2017 8,886,374 4,750,000 Evonik Industries AG 7% 14/10/2014 8,759,561 5,100,000 Pernod-Ricard SA 4.625% 06/12/2013 8,293,375 4,950,000 Conti-Gummi Finance BV 7.5% 15/09/2017 8,115,340 4,400,000 Renault SA 4.5% 16/04/2012 7,497,260 4,200,000 Kabel BW GmbH 7.5% 15/03/2019 7,167,732 4,000,000 NXP BV/NXP Funding LLC 8.625% 15/10/2015 7,101,575 3,450,000 Rhodia SA 7% 15/05/2018 7,028,137 3,625,000 Mondi Finance Ltd 5.75% 03/04/2017 6,865,534 3,400,000 Prologis International Funding SA 1% 23/10/2014 8,300,000 Lighthouse International Co SA 8% 30/04/2014 3,650,000 Ineos Group Holdings Ltd 7.875% 15/02/2016

Cost €‘000

Holding Investments 15,850,000 Banco Espirito Santo SA 5.625% 05/06/2014 13,050,000 Fiat Industrial Finance Europe SA 6.25% 09/03/2018 10,900,000 Kabel BW GmbH 7.5% 15/03/2019 11,300,000 Caixa Geral De Depositos SA 5.125% 19/02/2014 9,475,000 Unitymedia Hessen GmbH & Co KG/Unitymedia NRW GmbH 8.125% 01/12/2017 9,000,000 Lafarge SA 8.875% 27/05/2014 9,250,000 Fiat Industrial Finance Europe SA 5.25% 11/03/2015 8,775,000 Conti-Gummi Finance BV 7.5% 15/09/2017 9,450,000 Wind Acquisition Finance SA 7.375% 15/02/2018 8,550,000 Lafarge SA 6.125% 28/05/2015 8,000,000 Deutsche Lufthansa AG 4.625% 06/05/2013 9,550,000 Tokyo Electric Power Co Inc 4.5% 24/03/2014 7,200,000 FCE Bank Plc 7.125% 15/01/2013 7,200,000 Pernod-Ricard SA 5% 15/03/2017 7,000,000 Peugeot SA 6.875% 30/03/2016 6,450,000 HeidelbergCement Finance BV 8% 31/01/2017 6,450,000 HeidelbergCement Finance BV 6.75% 15/12/2015 6,350,000 Kabel BW Musketeer GmbH 9.5% 15/03/2021 6,100,000 Wind Acquisition Finance SA 11.75% 15/07/2017 10,000,000 Banco Comercial Portugues SA 1.626% 09/05/2014

12,650,203 12,633,468 11,157,872 10,340,641 9,971,344 9,603,600 9,152,295 9,077,709 8,886,374 8,759,561 8,293,375 8,115,340 7,497,260 7,167,732 7,101,575 7,028,137 6,865,534 6,535,853 6,448,928 6,395,100

6,535,853 6,448,928 6,395,100

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

232 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Operating income

2

Net gains/(losses) on financial assets/liabilities at fair value through profit or loss

3

Total gains Operating expenses

4

Net operating profit

Year ended 29 February 2012 £’000

Period ended 28 February 2011* £’000

55,231

46,863

54,341

(17,044)

109,572

29,819

(2,137)

(1,671)

107,435

28,148

(52,735)

(47,488)

(52,735)

(47,488)

54,700

(19,340)

856

1,562

55,556

(17,778)

Finance costs: Distributions to redeemable participating shareholders

6

Total finance costs Net profit/(loss) for the financial year/period Adjustment to align to the valuation methodology as set out in the prospectus

7

Increase/(decrease) in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase/(decrease) in net assets attributable to redeemable participating shares/units from operations

Year ended 29 February 2012 £’000

Period ended 28 February 2011* £’000

1,084,550

1,075,307

55,556

(17,778)

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares (Decrease)/increase in net assets resulting from share transactions Net assets attributable to holders of redeemable participating shares at the end of the year/period

94,224

166,877

(128,822)

(139,856)

(34,598)

27,021

1,105,508

1,084,550

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

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iShares plc Annual Report 233

As at 29 February 2012 Notes

29 February 2012 £’00 00

28 February 2011 £’000

CURRENT ASSETS Cash and cash equivalents

21,136

17,327

Receivables

10

86,816

42,676

Financial assets at fair value through profit or loss

11

1,034,188

1,043,539

1,142,140

1,103,542

Total current assets CURRENT LIABILITIE ES Payables

12

(29,864)

(9,290)

Distributions to redeemable participating shareholders payable

6

(12,631)

(14,709)

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

7

(42,495)

(23,999)

1,099,645

1,079,543

5,863

5,007

1,105,508

1,084,550

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 9.

234 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Bond interest income Securities lending income

3.

Year ended 29 February 2012 £’000

Period from 12 June 2010 to 28 February 2011 £’000

54,341 54,341

(17,044) (17,044)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 £’000 28 46,819 16 46,863

NET GAINS/(LOSSES) ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Net gains/(losses) on investments in securities held at fair value through profit or loss

4.

Year ended 29 February 2012 £’000 55 55,155 21 55,231

Year ended 29 February 2012 £’000 (2,137) (2,137)

Period from 12 June 2010 to 28 February 2011 £’000 (1,671) (1,671)

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 £’000 £’000 17,230 16,263 14,709 14,337 13,076 12,586 12,631 52,630 48,202 (597) (1,626) 702 912 52,735 47,488

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 12 respectively. Please refer to page 63 for each Fund’s management fee rate.

www.iShares.com

iShares plc Annual Report 235

For the year ended 29 February 2012 7.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 £’000 £’000 5,007 3,445

856

1,562

856 5,863

1,562 5,007

Further details are set out in the accounting policies note k) on page 30. 8.

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 are classified as financial liabilities.

9.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

9,400,000 800,000 (1,100,000) 9,100,000

9,200,000 1,400,000 (1,200,000) 9,400,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS

10. RECEIVABLES

Sale of securities awaiting settlement Deposit interest receivable Securities lending income receivable Bond income receivable Distributions payable held with Registrar*

9,100,000 9,400,000 9,200,000 £’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

236 iShares plc Annual Report

29 February 2012 £’000

28 February 2011 £’000

45,528 9

8,859 1

2 28,646

2 33,814

12,631 86,816

42,676

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in bonds

1,105,508 1,084,550 1,075,307

29 February 2012 £’000 1,034,188 1,034,188

28 February 2011 £’000 1,043,539 1,043,539

29 February 2012 £’000

28 February 2011 £’000

(29,691) (173) (29,864)

(9,121) (169) (9,290)

12. PAYABLES

Purchase of securities awaiting settlement Management fees payable

No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

£121.48 £115.38 £116.88

* Further details are set out on note 11 page 65.

SHARE CAPITAL

Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

13. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 14. RELATED PARTIES The related parties are set out on pages 66 and 67.

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For the year ended 29 February 2012 15. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 £’000

28 February 2011 £’000

21

16

15,564

21,221

20,374

22,261

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

16. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 17. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 237

As at 29 February 2012

Holding Investment

Fair value £'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market Bonds Australia Corporate bonds - Aa2 rating 23,023,000 Westpac Banking Corp 5% 21/10/2019 4,550,000 National Australia Bank Ltd 5.125% 09/12/2021 12,831,000 National Australia Bank Ltd 5.375% 08/12/2014 Total Australia

24,780

2.24

4,789

0.43

13,894 43,463

1.26 3.93

Holding Investment Mexico Corporate bonds - A2 rating 9,373,000 America Movil SAB de CV 5.75% 28/06/2030 Total Mexico

11,284,000 4,550,000 5,460,000

17,927,000

France Corporate bonds - A3 rating France Telecom SA 5% 12/05/2016 France Telecom SA 7.25% 10/11/2020 France Telecom SA 8% 20/12/2017 Corporate bonds - Aa1 rating Total Capital SA 3.875% 14/12/2018 Total France

Ireland Corporate bonds - Aa2 rating 16,016,000 GE Capital UK Funding 6.75% 06/08/2018 Total Ireland Italy Corporate bonds - A3 rating 18,837,000 Enel SpA 5.75% 22/06/2037 Total Italy Jersey Corporate bonds - A3 rating 15,106,000 BAA Funding Ltd 6.75% 03/12/2026 Total Jersey

238 iShares plc Annual Report

2.90 2.90

12,379

1.12

5,750

0.52

6,943

0.63

19,339 44,411

18,724 18,724

16,299 16,299

18,088 18,088

1.75 4.02

1.69 1.69

1.48 1.48

1.64 1.64

10,956 10,956

0.99 0.99

29,097

2.63

9,126

0.83

26,555

2.40

7,167

0.65

11,290

1.02

31,891 115,126

2.88 10.41

Norway Corporate bonds - Aa2 rating 28,483,000 Statoil ASA 6.875% 11/03/2031 Total Norway

39,059 39,059

3.53 3.53

31,514

2.85

42,361

3.83

31,599 105,474

2.86 9.54

16,385

1.48

13,978

1.26

31,692

2.87

28,483,000

9,100,000

7,007,000 32,061 32,061

% of net asset value

Netherlands Corporate bonds - A2e rating BMW Finance NV 3.375% 14/12/2018 Corporate bonds - A3 rating Daimler International Finance BV 3.5% 06/06/2019 Enel Finance International NV 5.75% 14/09/2040 Corporate bonds - Aaa/*-- rating Cooperatieve Centrale RaiffeisenBoerenleenbank BA 3.25% 01/11/2017 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4% 10/09/2015 Corporate bonds - Baa2 rating Koninklijke KPN NV 5.75% 17/09/2029 Total Netherlands

30,849,000 Belgium Corporate bonds - Baa1 rating 26,845,000 Anheuser-Busch InBev NV 6.5% 23/06/2017 Total Belgium

Fair value £'000

10,738,000

30,121,000

Sweden Corporate bonds - A1/*-- rating 28,847,000 Skandinaviska Enskilda Banken AB 6.625% 09/07/2014 Corporate bonds - A2 rating 31,304,000 Vattenfall AB 6.875% 15/04/2039 Corporate bonds - Aa2/*-- rating 30,212,000 Nordea Bank AB 3.875% 15/12/2015 Total Sweden n United Kingdom Corporate bonds - A1 rating 14,378,000 Unilever Plc 4.75% 16/06/2017 Corporate bonds - A1/*-- rating 14,196,000 Abbey National Treasury Services Plc 4.125% 14/09/2017 31,850,000 HSBC Holdings Plc 6% 29/03/2040

www.iShares.com

As at 29 February 2012

Holding Investment

35,399,000

26,572,000 9,100,000 4,550,000 24,843,000

11,102,000 10,192,000 9,100,000

21,112,000 9,100,000 22,204,000 13,832,000 16,380,000 6,370,000 4,550,000 4,550,000 14,014,000 8,736,000

7,917,000 17,563,000 12,194,000

35,854,000 4,004,000

7,280,000 4,550,000 7,826,000 www.iShares.com

United Kingdom (cont) Corporate bonds - A1/*-- rating (cont) Lloyds TSB Bank Plc 6.5% 17/09/2040 Corporate bonds - A2 rating BG Energy Capital Plc 5.125% 01/12/2025 Motability Operations Group Plc 5.25% 28/09/2016 Motability Operations Group Plc 5.375% 28/06/2022 Nationwide Building Society 5.625% 09/09/2019 Corporate bonds - A2/*-- rating Royal Bank of Scotland Plc 6.625% 17/09/2018 Royal Bank of Scotland Plc 6.875% 17/05/2025 Royal Bank of Scotland Plc 7.5% 29/04/2024 Corporate bonds - A3 rating Aviva Plc FRN 20/05/2058 Centrica Plc 6.375% 10/03/2022 Centrica Plc 7% 19/09/2033 Coventry Building Society 5.875% 28/09/2022 National Grid Gas Plc 6% 13/05/2038 SSE Plc 5% 01/10/2018 SSE Plc 5.75% 05/02/2014 SSE Plc 8.375% 20/11/2028 United Utilities Water Plc 6.125% 29/12/2015 Vodafone Group Plc 4.625% 08/09/2014 Corporate bonds - A3/*-- rating Tesco Plc 6.125% 24/02/2022 Corporate bonds - Baa1 rating BAT International Finance Plc 6% 24/11/2034 Eastern Power Networks Plc 6.25% 12/11/2036 Corporate bonds - Baa1/*-- rating Barclays Bank Plc 10% 21/05/2021 Barclays Bank Plc 5.75% 14/09/2026 Corporate bonds - Baa3 3 rating Firstgroup Plc 8.75% 08/04/2021 Firstgroup Plc 6.875% 18/09/2024 Imperial Tobacco Finance Plc 9% 17/02/2022

Fair value £'000

% of net asset value

34,273

3.10

30,160

2.73

10,201

0.92

5,143

0.47

26,629

2.41

Fair value £'000

% of net asset value

5,996 455,215

0.54 41.18

29,723

2.69

23,152

2.10

17,393

1.57

25,276

2.28

15,491

1.40

24,277 135,312

2.20 12.24

Total bonds

1,034,188

93.55

Total value of investments

1,034,188

93.55

Cash†

21,136

1.91

44,321

4.01

1,099,645

99.47

Adjustment to align to the valuation methodology as set out in the prospectus

5,863

0.53

Net asset value attributable to redeemable participating shareholders at the end of the year

1,105,508

100.00

Holding Investment United Kingdom (cont) Corporate bonds - Baa3 rating (cont) 4,550,000 Imperial Tobacco Finance Plc 8.125% 15/03/2024 Total United Kingdom

21,749,000

18,837,000 15,652,000

United States Corporate bonds - A2 rating Cellco Partnership / Verizon Wireless Capital LLC 8.875% 18/12/2018 Corporate bonds - Aa2 rating Wal-Mart Stores Inc 5.625% 27/03/2034 Wal-Mart Stores Inc 4.875% 19/01/2039 Corporate bonds - Baa1 rating Comcast Corp 5.5% 23/11/2029 Corporate bo onds - Baa2 rating Kraft Foods Inc 7.25% 18/07/2018 Time Warner Cable Inc 5.75% 02/06/2031 Total United States

12,107

1.10

10,774

0.97

10,137

0.92

17,104 10,890 28,942

1.55 0.98 2.62

13,595

1.23

19,585 7,091 4,882 6,550

1.77 0.64 0.44 0.59

15,981

1.45

Other net assets

9,360

0.85

9,167

0.83

Net assets attributable to redeemable participating shareholders

20,916

1.89

14,390

1.30

41,034

3.71

3,424

0.31

9,060

0.82

5,043

0.46

10,726

0.97

22,386,000 12,558,000 22,113,000

†

Substantially all cash positions are held with State Street Bank and Trust Company.

All credit ratings are shown as at 29 February 2012.

iShares plc Annual Report 239

As at 29 February 2012 Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

240 iShares plc Annual Report

Fair value £'000

1,034,188 107,952 1,142,140

% of total current assets

90.55 9.45 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest sales Holding Investments 33,271,000 UBS AG 6.625% 11/04/2018 30,366,000 ING Bank NV FRN 29/05/2023 23,014,000 Imperial Tobacco Finance Plc 9% 17/02/2022 23,039,000 Tesco Plc 6.125% 24/02/2022 23,532,000 GE Capital UK Funding 6.25% 05/05/2038 19,380,000 Goldman Sachs Group Inc 7.25% 10/04/2028 21,572,000 Citigroup Inc 6.8% 25/06/2038 24,318,000 AXA SA FRN 29/10/2049 26,304,000 Societe Generale SA FRN 29/06/2049 19,859,000 Royal Bank of Scotland Plc 6.625% 17/09/2018 15,348,000 Cellco Partnership/Verizon Wireless Capital LLC 8.875% 18/12/2018 19,190,000 GlaxoSmithKline Capital Plc 5.25% 10/04/2042 16,251,000 America Movil SAB de CV 5.75% 28/06/2030 13,959,000 France Telecom SA 8.125% 20/11/2028 17,500,000 United Kingdom Gilt 3.75% 07/09/2020 11,451,000 SSE Plc 8.375% 20/11/2028 14,010,000 Vodafone Group Plc 4.625% 08/09/2014 12,154,000 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4% 10/09/2015 10,869,000 Eastern Power Networks Plc 6.25% 12/11/2036 11,374,000 Marks & Spencer Plc 6.125% 02/12/2019

The 20 largest purchases Proceeds £‘000 37,557 32,082 31,281 26,536 25,295 21,703 21,399 21,360 20,990 20,182 19,975 19,302 18,777 18,611 18,127 16,031 15,019

Holding Investments 37,097,000 Cellco Partnership / Verizon Wireless Capital LLC 8.875% 18/12/2018 31,901,000 Nordea Bank AB 3.875% 15/12/2015 28,483,000 BMW Finance NV 3.375% 14/12/2018 24,855,000 Westpac Banking Corp 5% 21/10/2019 24,354,000 Comcast Corp 5.5% 23/11/2029 23,941,000 Time Warner Cable Inc 5.75% 02/06/2031 22,900,000 Aviva Plc FRN 20/05/2058 20,030,000 BG Energy Capital Plc 5.125% 01/12/2025 17,348,000 GE Capital UK Funding 6.75% 06/08/2018 17,500,000 United Kingdom Gilt 3.75% 07/09/2020 15,106,000 BAA Funding Ltd 6.75% 03/12/2026 13,617,000 Kraft Foods Inc 7.25% 18/07/2018 12,441,000 Eastern Power Networks Plc 6.25% 12/11/2036 11,408,000 France Telecom SA 5% 12/05/2016 10,751,000 Royal Bank of Scotland Plc 6.625% 17/09/2018 11,210,000 Cooperatieve Centrale Raiffeisen-Boerenleenbank BA 4% 10/09/2015 11,170,000 Total Capital SA 3.875% 14/12/2018 7,862,000 Centrica Plc 7% 19/09/2033 10,304,000 Royal Bank of Scotland Plc 6.875% 17/05/2025 7,920,000 Firstgroup Plc 8.75% 08/04/2021

Cost £‘000 49,261 33,142 29,099 25,612 24,899 24,031 21,982 20,176 19,971 18,164 18,116 16,275 13,915 12,274 11,607 11,433 11,228 10,115 10,049 9,927

12,446 11,724 11,626

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 241

For the period ended 29 February 2012 Notes

Period ended 29 February 2012** £’000

Operating income

2

3,764

Net losses on financial assets at fair value through profit or loss

3

(2,881)

Total gains Operating expenses

883 4

Net operating profit

(177) 706

Finance costs: Distributions to redeemable participating shareholders

6

Total finance costs

(3,533)

Net loss for the financial period Adjustment to align to the valuation methodology as set out in the prospectus

(3,533) (2,827)

7

592

Decrease in net assets attributable to redeemable participating shareholders from operations

(2,235)

There are no recognised gains or losses arising in the period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the period ended 29 February 2012 Period ended 29 February 2012** £’000 Net assets attributable to redeemable participating shareholders at the beginning of the period Decrease in net assets attributable to redeemable participating shareholders from operations

(2,235)

Share transactions: Proceeds from issue of redeemable participating shares

189,202

Payments on redemption of redeemable participating shares

(59,890)

Increase in net assets resulting from share transactions

129,312

Net assets attributable to redeemable participating shareholders at the end of the period

127,077

* This Fund launched on 30 March 2011. ** For the period from 30 March 2011 (launch date) to 29 February 2012. The accompanying notes form an integral part of these financial statements.

242 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notees

29 February 2012 £’000

CURRENT ASSETS Cash and cash equivalents

1,678

Receivables

10

10,907

Financial assets at fair value through profit or loss

11

121,528

Total current assets

134,113

CURRENT LIABILITIES Payables

12

(5,178)

Distributions to redeemable participating shareholders payable

6

(2,450)

Total current liabilities

(7,628)

Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the period

126,485 7

592 127,077

* This Fund launched on 30 March 2011. The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 9.

www.iShares.com

iShares plc Annual Report 243

For the period ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Bond interest income

3.

Period from 30 March 2011 to 29 February 2012 £’000 4 3,760 3,764

NET LOSSES ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from 30 March 2011 to 29 February 2012 £’000

Net losses on investments in securities held at fair value through profit or loss

4.

6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the period were as follows:

August 2011 February 2012 Equalisation income Equalisation expense

OPERATING EXPENSES

Management fees

5.

(2,881) (2,881)

The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets.

Period from 30 March 2011 to 29 February 2012 £’000 (177) (177)

7.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

MANAGEMENT FEES

Fees earned by the Manager during the period and balances outstanding as at 29 February 2012 and are disclosed in note 4 and note 12 respectively. Please refer to page 63 for each Fund’s management fee rate. The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). 244 iShares plc Annual Report

Period from 30 March 2011 to 29 February 2012 £’000 1,943 2,450 4,393 (1,195) 335 3,533

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the period Balance carried forward

Period from 30 March 2011 to 29 February 2012 £’000 592 592 592

Further details are set out in the accounting policies note k) on page 30.

www.iShares.com

For the period ended 29 February 2012 8.

SHARE CAPITAL

12. PAYABLES

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of period Issued during period Redeemed during period Balance at the end of period 9.

29 February 2012 No. of Shares 1,889,659 (613,874) 1,275,785

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares

Shares in issue As at 29 February 2012

Purchase of securities awaiting settlement Interest payable Management fees payable

(5,148) (13) (17) (5,178)

13. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 14. RELATED PARTIES The related parties are set out on pages 66 and 67.

1,275,785 £’000

Net asset value As at 29 February 2012

29 February 2012 £’000

15. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67.

127,077 16. SUBSEQUENT EVENTS

Net asset value per share As at 29 February 2012

Please refer to note 20 on pages 67 and 68. £99.61

10. RECEIVABLES 29 February 2012 £’000 Subscription for shares awaiting settlement Bond income receivable Distributions payable held with Registrar*

5,494 2,963 2,450 10,907

* Further details are set out on note 11 page 65.

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in bonds

www.iShares.com

29 February 2012 £’000 121,528 121,528

iShares plc Annual Report 245

As at 29 February 2012

Holding Investment

Fair value £'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

375,000

375,000

200,000 1,000,000 375,000

1,000,000 875,000

725,000 380,000

275,000 425,000 250,000

225,000

450,000 425,000

525,000

1,000,000

Bonds Australia Corporate bonds - A1 rating Suncorp-Metway Ltd 5.125% 27/10/2014 Corporate bonds - A2/*-- rating Telstra Corp Ltd 6.125% 06/08/2014 Corporate bonds - A3 rating Insurance Australia Group Ltd FRN 21/12/2026 QBE Insurance Group Ltd 6.125% 28/09/2015 QBE Insurance Group Ltd 10% 14/03/2014 Corporate bonds - Aa2 rating Commonwealth Bank of Australia 3.875% 14/12/2015 National Australia Bank Ltd 5.375% 08/12/2014 Corporate bonds - Aa3 rating Australia & New Zealand Banking Group Ltd FRN 07/12/2018 Westpac Banking Corp FRN 29/04/2018 Total Australia Cayman Islands Corporate bonds - A1 rating Monumental Global Funding Ltd 6% 30/01/2014 Pacific Life Funding LLC 5.125% 20/01/2015 Pacific Life Funding LLC 6% 16/08/2013 Corporate bonds - Aa1 rating MassMutual Global Funding LLC 6.125% 14/05/2013 Corporate bonds - Aa3 rating Principal Financial Global Funding LLC 5.625% 24/09/2013 Principal Financial Global Funding LLC 6% 23/01/2014 Corporate bonds - Aaa rating New York Life Funding 5.125% 03/02/2015 Corporate bonds - Ba1 rating MUFG Capital Finance 5 Ltd FRN 31/12/2049

246 iShares plc Annual Report

385

0.30

412

0.33

164

0.13

1,063

0.83

415

0.33

1,050

0.83

948

0.74

714

0.56

384 5,535

0.31 4.3 36

Holding Investment Cayman Islands (cont) Corporate bonds - Ba1 ratingg 400,000 Southern Water Services Finance Ltd FRN 31/03/2038 Total Cayman Islands

Finland Corporate bonds - A2/*-- rating 525,000 Nordea Bank Finland Plc FRN 31/12/2049 Total Finland

520 520

0.41 0.41

639

0.50

1,454

1.14

692

0.55

607

0.48

580 182

0.46 0.14

240 4,394

0.19 3.46

285 285

0.22 0.22

650,000

0.35

550,000

261

0.20

0.35

569

0.45

990

0.78

0.56

0.57 1.64

448

447

709

727 2,083

850,000

0.37

0.33 3.25

0.51

0.23

466

426 4,130

647

288

0.19

% of net asset value

Denmark Corporate bonds - A2/*-- rating 700,000 Danske Bank A/S FRN 09/12/2015 Corporate bonds - Baa2 rating 550,000 Carlsberg Breweries A/S 7.25% 28/11/2016 Corporate bonds - Baa3 rating 900,000 Danske Bank A/S FRN 31/12/2049 Total Denmark

1,325,000

235

Fair value £'000

850,000 250,000 350,000

France Corporate bonds - A1/*-- rating Societe Generale SA 3.875% 17/12/2015 Corporate bonds - A3 rating France Telecom SA 5% 12/05/2016 Corporate bonds - Baa1 ratingg AXA SA FRN 29/07/2049 Corporate bonds - Baa2 rating Cie de St-Gobain 5.625% 15/12/2016 Corporate bonds - Baa3/*-- rating BNP Paribas SA FRN 31/12/2049 BNP Paribas SA FRN 31/12/2049 Credit Agricole SA FRN 31/12/2049 Total France

Guernsey Corporate bonds - Baa1/*-- rating 275,000 Credit Suisse Group Capital Guernsey III Ltd FRN 29/06/2049 Total Guernsey

www.iShares.com

As at 29 February 2012

Hold ding Investment

650,000 700,000 800,000 950,000

Ireland Corporate bonds - Aa2/*-- rating GE Capital UK Funding 4.625% 18/01/2016 GE Capital UK Funding 5.125% 03/03/2015 GE Capital UK Funding 5.625% 12/12/2014 GE Capital UK Funding 6% 11/04/2013 Total Ireland

Italy Corporate bonds - A2 rating 325,000 Mediobanca SpA FRN 11/10/2018 Corporate bonds - A3/*-- rating 650,000 UniCredit SpA FRN 16/10/2018 Corporate bonds - Baa2 rating 900,000 Telecom Italia SpA 5.625% 29/12/2015 Total Italy

650,000

775,000 550,000

900,000

450,000

Jersey Corporate bonds - A2 rating ASIF III Jersey Ltd 5.375% 14/10/2016 Corporatee bonds - A3 rating BAA Funding Ltd 5.85% 27/11/2013 BAA Funding Ltd 12.45% 31/03/2016 Corporate bonds - A3/*-- rating HSBC Capital Funding LP FRN 31/12/2049 Corporate bonds - Baa3 rating UBM Plc 6.5% 23/11/2016 Total Jersey

Fair value £'000

% of net asset value

Hold ding Investment

450,000 696

0.55 425,000

754

0.59 1,175,000

870

0.68 1,300,000

990 3,310

0.78 2.60

450,000

400,000 275 542

0.21 0.43

2,550,000

500,000 901 1,718

0.71 1.35 467,000 600,000

661

815

0.52

0.64

738

0.58

950

0.75

500,000 450,000 1,250,000

500,000 450,000

488 3,652

0.38 2.87 475,000

Luxembourg Corporate bonds - Baa1 rating 1,350,000 Gazprom OAO Via Gaz Capital SA 6.58% 31/10/2013 Total Luxembourg Netherlands Corporate bonds - A2 rating 550,000 BMW Finance NV 5.25% 21/11/2013 Corporate bonds - A3 rating 500,000 Daimler International Finance BV 2.125% 10/12/2013 www.iShares.com

1,417 1,417

1.12 1.12

584

0.46

501

0.39

Netherlands (cont) Corporate bonds - A3 rating (cont) E.ON International Finance BV 5.125% 27/01/2014 Linde Finance BV 6.5% 29/01/2016 RWE Finance BV 6.375% 03/06/2013 Siemens Financieringsmaatschappij NV FRN 14/09/2066 Volkswagen Financial Services NV 2.5% 07/10/2013 Corporate bonds - Aaa/*-- rating Cooperatieve Centrale RaiffeisenBoerenleenbank BA 2.25% 09/12/2014 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4% 10/09/2015 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 5.125% 27/10/2014 Corporate bonds - Baa1 rating Akzo Nobel NV 8% 06/04/2016 British American Tobacco Holdings The Netherlands BV 5.5% 15/09/2016 Deutsche Telekom International Finance BV 4.875% 23/09/2014 Deutsche Telekom International Finance BV 5.625% 19/07/2013 Generali Finance BV FRN 31/12/2049 Corporate bonds - Baa2 rating Koninklijke KPN NV 5.75% 18/03/2016 Linde Finance BV FRN 14/07/2066 Corporate bonds - Baa2/*-- rating Barclays SLCSM Funding BV FRN 29/06/2049 Total Netherlands

New Zealand Corporate bonds - A1 rating 450,000 Fonterra Cooperative Group Ltd 4.875% 11/04/2013 Corporate bonds - Aa3 rating 400,000 ASB Finance Ltd 3.25% 09/12/2013 Total New Zealand

Fair value £'000

% of net asset value

480

0.38

500

0.39

1,240

0.98

1,372

1.08

455

0.36

404

0.32

2,681

2.11

541

0.42

558

0.44

678

0.54

535

0.42

472

0.37

866

0.68

553

0.44

502

0.39

431 13,353

0.34 10.51

464

0.37

410 874

0.32 0.69

iShares plc Annual Report 247

As at 29 February 2012

Hold ding Investment Norway Corporate bonds - A1/*-- rating 725,000 DNB Bank ASA FRN 23/06/2020 Total Norway

Fair value £'000

753 753

% of net asset value

0.59 0.59

Hold ding Investment

600,000 1,150,000

450,000 300,000 1,300,000

850,000

450,000

1,250,000

1,375,000

550,000

1,450,000 1,050,000

125,000

Spain Corporate bonds - A2/*-- rating BBVA Subordinated Capital SAU FRN 11/03/2018 Santander Issuances SAU FRN 31/01/2018 Santander Issuances SAU FRN 27/07/2019 Corporate bonds - Baa1 rating Telefonica Emisiones SAU 5.888% 31/01/2014 Corporate bonds - Baa2 rating BBVA International Preferred SAU FRN 31/12/2049 Corporate bonds - Baa2/*-- rating Santander Finance Preferred SAU FRN 31/12/2049 Total Spain Sweden Corporate bonds - A1/*-- rating Skandinaviska Enskilda Banken AB 6.625% 09/07/2014 Corporate bonds - A3/*-- ratiing Svenska Handelsbanken AB FRN 29/09/2049 Corporate bonds - Aa2/*-- rating Nordea Bank AB 3.875% 15/12/2015 Svenska Handelsbanken AB 5.5% 26/05/2016 Corporate bonds - Baa2/*-- rating Svenska Handelsbanken AB FRN 31/12/2049 Total Sweden

Switzerland Corporate bonds - A1/*-- rating 550,000 UBS AG FRN 21/06/2021 Corporate bonds - Aa3/*-- rating 900,000 UBS AG 6.375% 20/07/2016 Total Switzerland United Kingdom Corporate bonds - A1 rating 400,000 Aviva Plc 9.5% 20/06/2016 248 iShares plc Annual Report

160,000 0.29

450,000

225

0.18

900,000

1,199

0.94

363

875,000 884

0.70

850,000 400,000

399

1,235 4,305

0.31

0.97 3.39

975,000 1,675,000

500,000 250,000 1,502

1.18

549

0.43

1,516

1.20

1,160

0.91

121 4,848

0.10 3.82

525

0.41

375,000 700,000 350,000 450,000 175,000 400,000 275,000 225,000 550,000 1,375,000 1,100,000 350,000 750,000

1,005 1,530

496

0.79 1.20

0.39

1,600,000

250,000 250,000

United Kingdom (cont) Corporate bonds - A1 rating (cont) Unilever Plc 4% 19/12/2014 Corporate bonds - A1/*-- rating Abbey National Treasury Services Plc 5.5% 18/06/2014 Credit Suisse International FRN 31/12/2049 HSBC Holdings Plc FRN 08/04/2018 Lloyds TSB Bank Plc 6.375% 15/04/2014 Corporate bonds - A2 rating BP Capital Markets Plc 4% 29/12/2014 Motability Operations Group Plc 5.25% 28/09/2016 Standard Chartered Plc 6.5% 28/04/2014 Corporate bonds - A2/*-- rating HSBC Bank Plc FRN 29/09/2020 Royal Bank of Scotland Plc 6.375% 29/04/2014 Corporate bonds - A3 rating Anglian Water Services Financing Plc 5.25% 30/10/2015 Anglian Water Services Financing Plc 12.375% 07/01/2014 Centrica Plc 5.125% 10/12/2014 Centrica Plc 5.5% 24/10/2016 Rolls-Royce Plc 7.375% 14/06/2016 Safeway Ltd 6% 10/01/2017 Safeway Ltd 6.5% 05/08/2014 Scottish Power UK Plc 8.375% 20/02/2017 Segro Plc 5.25% 21/10/2015 Segro Plc 6.25% 30/09/2015 Society of Lloyd's FRN 17/11/2025 SSE Plc 5.75% 05/02/2014 Standard Chartered Bank FRN 31/12/2049 Thames Water Utilities Finance Ltd 4.9% 30/06/2015 United Utilities Water Plc 6.125% 29/12/2015 Vodafone Group Plc 4.625% 08/09/2014 Corporate bonds - A3/*-- rating HFC Bank Ltd 7% 05/10/2015 Santander UK Plc 11.5% 04/01/2017

Fair value £'000

% of net asset value

646

0.51

1,193

0.94

166

0.13

481

0.38

957

0.75

929

0.73

953

0.75

438

0.35

966

0.76

1,775

1.40

558

0.44

295 409 791

0.23 0.32 0.62

429 519 192

0.34 0.41 0.15

500 291 245

0.40 0.23 0.19

554 1,475

0.44 1.16

1,167

0.92

384

0.30

855

0.67

1,714

1.35

278

0.22

278

0.22

www.iShares.com

As at 29 February 2012

Hold ding Investment

1,050,000 500,000

500,000 200,000

275,000 200,000 400,000 425,000 414,000 625,000 575,000 550,000 450,000 650,000 275,000 850,000 450,000 550,000 350,000 750,000 725,000 775,000 300,000 350,000

375,000

www.iShares.com

United Kingdom (cont) Corporate bonds - A3/*-- rating (cont) Tesco Plc 5% 24/02/2014 Corporate bonds - Aa3/*-- rating Scotland Gas Networks Plc 4.75% 21/02/2017 Corporate bonds - Ba1 rating FCE Bank Plc 4.825% 15/02/2017 Corporate bonds - Ba2 rating CPUK Finance Ltd 4.811% 28/02/2017 Corporate bonds - Ba3 rating F&C Finance Plc 9% 20/12/2016 Corporate bonds - Baa1 rating BAT International Finance Plc 5.75% 09/12/2013 Compass Group Plc 7% 08/12/2014 CRH Finance UK Plc 8.25% 24/04/2015 EGG Banking Plc FRN 29/12/2021 Experian Finance Plc 5.625% 12/12/2013 Hutchison Ports UK Finance Plc 6.75% 07/12/2015 London Power Networks Plc 5.375% 11/11/2016 National Grid Plc 5.5% 24/07/2013 National Grid Plc 6.125% 15/04/2014 Nationwide Building Society FRN 12/02/2018 Old Mutual Plc 7.125% 19/10/2016 Pearson Funding One Plc 6% 15/12/2015 Pearson Plc 7% 27/10/2014 Portman Building Society FRN 23/11/2020 Reed Elsevier Investments Plc 5.625% 20/10/2016 RL Finance Bonds Plc FRN 31/12/2049 RSA Insurance Group Plc FRN 31/12/2049 Smiths Group Plc 7.25% 30/06/2016 Wales & West Utilities Finance Plc 5.125% 02/12/2016 Corporate bonds - Baa1/*-- rating EGG Banking Plc FRN 09/12/2049

Fair value £'000

1,117

% of net asset value

0.88

Hold ding Investment

175,000 1,025,000

539

0.42

502

0.39

300,000

0.16

400,000 130,000

202 281

0.22

1,225,000 600,000

213

0.17

175,000

453

0.36

350,000

486 398

0.38 0.31

500,000

663

0.52

653 613

0.51 0.48

472

0.37

706

0.56

269

0.21

957

0.75

510 619

0.40 0.49

324

0.26

843

0.66

517

0.41

806

0.63

345

0.27

386

0.31

361

0.28

550,000 400,000 400,000 400,000 1,250,000 675,000

380,000 200,000 230,000 725,000 1,400,000 850,000

450,000 100,000 250,000 200,000

Fair value £'000

United Kingdom (cont) Corporate bonds - Baa1/*-- rating (cont) Santander UK Plc FRN 31/12/2049 Scottish Widows Plc FRN 29/09/2049 Corporate bonds - Baa2 rating Aggregate Industries Plc 7.25% 31/05/2016 Amlin Plc FRN 19/12/2026 BAE Systems Plc 10.75% 24/11/2014 British Telecommunications Plc 8.5% 07/12/2016 BUPA Finance Plc 7.5% 04/07/2016 Co-Operative Bank Plc FRN 02/04/2019 Co-Operative Bank Plc FRN 16/11/2021 ENW Capital Finance Plc 6.75% 20/06/2015 Hammerson Plc 5.25% 15/12/2016 Intercontinental Hotels Group Plc 6% 09/12/2016 London Stock Exchange Group Plc 6.125% 07/07/2016 Next Plc 5.875% 12/10/2016 SSE Plc FRN 31/12/2049 Stagecoach Group Plc 5.75% 16/12/2016 Corporate bonds - Baa2/*-- rating Bank of Scotland Plc 11% 17/01/2014 Barclays Bank Plc FRN 31/12/2049 Lloyds TSB Bank Plc 5.875% 20/06/2014 Lloyds TSB Bank Plc 6.625% 30/03/2015 Lloyds TSB Bank Plc FRN 29/05/2020 Lloyds TSB Bank Plc FRN 16/12/2021 Corporate bonds - Baa3 rating Allied Domecq Financial Services Ltd 6.625% 12/06/2014 Anglian Water Services Financing Plc FRN 11/06/2024 Beazley Group Ltd FRN 17/10/2026 Coventry Building Society FRN 29/06/2049

% of net asset value

124

0.10

774

0.61

337 331

0.27 0.26

156

0.12

1,508

1.19

678

0.53

146

0.11

250

0.20

554

0.44

590

0.46

440

0.35

431 438 1,234

0.34 0.34 0.97

727

0.57

413

0.33

179

0.14

232

0.18

744

0.59

1,148

0.90

895

0.70

486

0.38

107

0.09

207

0.16

166

0.13

iShares plc Annual Report 249

As at 29 February 2012

Hold ding Investment

500,000 450,000 850,000 750,000 600,000 80,000 875,000 330,000 575,000 175,000

570,000 530,000 100,000

200,000 1,600,000

1,075,000 600,000

1,350,000 350,000

525,000 1,200,000 750,000

United Kingdom (cont) Corporate bonds - Baa3 rating (cont) Firstgroup Plc 6.875% 15/04/2013 Friends Life Group Plc FRN 31/12/2049 Imperial Tobacco Finance Plc 5.5% 22/11/2016 Marks & Spencer Plc 5.625% 24/03/2014 National Express Group Plc 6.25% 13/01/2017 Nationwide Building Society FRN 29/03/2049 Nationwide Building Society FRN 29/01/2049 Nationwide Building Society FRN 29/09/2049 Rentokil Initial Plc 5.75% 31/03/2016 Tullett Prebon Group Holdings Plc 7.04% 06/07/2016 Corporate bonds - Baa3/*-- rating National Westminster Bank Plc 7.875% 09/09/2015 Royal Bank of Scotland Plc 9.625% 22/06/2015 Royal Bank of Scotland Plc 10.5% 01/03/2013 Total United Kingdom United States Corporate bonds - A1 rating Northern Trust Co 5.375% 11/03/2015 Roche Holdings Inc 5.5% 04/03/2015 Corporate bonds - A1/*-- rating Goldman Sachs Group Inc 5.25% 15/12/2015 Goldman Sachs Group Inc 6.125% 14/02/2017 Corporate bonds - A2 rating American Express Credit Corp 5.375% 01/10/2014 Mellon Capital III FRN 05/09/2066 Corporate bonds - A2/*-- rating Morgan Stanley 5.125% 30/11/2015 Morgan Stanley 5.375% 14/11/2013 Morgan Stanley 5.75% 14/02/2017

250 iShares plc Annual Report

Fair value £'000

% of net asset value

519

0.41

317

0.25

943

0.74

500,000 1,050,000 550,000 750,000

0.62

660

0.52

66

0.05

602

0.48

600,000

0.26

100,000

0.48

900,000

169

0.13

375,000

592

0.47

700,000

575

0.45

106 52,742

0.08 41.50

607

% of net asset value

539

0.42

1,107

0.87

242

0.19

789

0.62

527

0.41

530

0.42

93

0.07

953

0.75

395

0.31

757

0.60

673

0.53

543

0.43

883 16,079

0.70 12.65

Total bonds

121,528

95.63

121,528

95.63

Hold ding Investment

791

331

Fair value £'000

500,000

645,000

500,000

900,000

United States (cont) Corporate bonds - A3/*-- rating Citigroup Inc 5.5% 18/11/2015 Corporate bonds - Aa2/*-- rating General Electric Capital Corp 5.25% 10/12/2013 General Electric Capital Corp 6.44% 15/11/2022 JPMorgan Chase Bank NA 5.375% 28/09/2016 Corporate bonds - Aa3 rating Metropolitan Life Global Funding I 5.25% 09/01/2014 Corporate bonds - Aa3/*-- rating GE Capital Trust V FRN 15/09/2066 General Electric Capital Corp FRN 15/09/2066 JPMorgan Chase & Co 4.25% 25/01/2017 JPMorgan Chase & Co 5.375% 18/10/2013 Corporate bonds - Baa1 rating Pemex Project Funding Master Trust 7.5% 18/12/2013 Corporate bonds - Baa1/*-- rating Merrill Lynch & Co Inc 5.75% 12/12/2014 Corporate bonds - Baa2 rating Kraft Foods Inc 5.375% 11/12/2014 Corporate bonds - Baa2/*-- rating Bank of America Corp 5.25% 09/11/2016 Total United States

210

0.16

1,791

1.41

1,120

0.88

Total value of investments

637

0.50

Cash†

1,678

1.32

1,441

1.13

Other net assets

3,279

2.58

312

0.25

126,485

99.53 3

592

0.47

534

0.42

1,237

0.98

766

0.60

Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus

www.iShares.com

As at 29 February 2012

Hold ding Investment

Fair value £'000

% of net asset value

127,077

100.00

Net asset value attributable to redeemable participating shareholders at the end of the period †

Substantially all cash positions are held with State Street Bank and Trust Company.

All credit ratings are shown as at 29 February 2012. Analysis of total current assets and gross of all liabilities (unaudited)

Fair value £'000

% of total current assets

Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

121,528 12,585 134,113

90.62 9.38 100.00

www.iShares.com

iShares plc Annual Report 251

For the period ended 29 February 2012 The 20 largest sales

The 20 largest purchases Proceeds £‘000 2,021

Holding Investments 1,800,000 Roche Holdings Inc 5.5% 04/03/2015 1,600,000 Virgin Media Secured Finance Plc 7% 15/01/2018 1,550,000 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4% 10/09/2015 1,300,000 United Kingdom Gilt 3.75% 07/09/2019 1,300,000 GE Capital UK Funding 5.875% 01/11/2012 1,250,000 United Kingdom Gilt 2.250% 07/03/2014 1,200,000 Wal-Mart Stores Inc 4.75% 29/01/2013 1,200,000 Santander Issuances SAU FRN 27/07/2019 1,100,000 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4.625% 31/05/2012 1,050,000 GE Capital UK Funding 5.125% 03/03/2015 1,050,000 Carrefour SA 5.375% 19/12/2012 1,000,000 United Kingdom Gilt 4.5% 07/03/2013 950,000 Nordea Bank AB 3.875% 15/12/2015 950,000 Australia & New Zealand Banking Group Ltd FRN 31/12/2049 850,000 SSE Plc 5.750% 05/02/2014 825,000 UBS AG 6.375% 20/07/2016 850,000 Vodafone Group Plc 4.625% 08/09/2014 825,000 Skandinaviska Enskilda Banken AB 6.625% 09/07/2014 850,000 General Electric Capital Corp 5.250% 10/12/2013 1,125,000 HBOS Plc 6.31% 18/10/2017

1,734 1,635 1,495 1,351 1,283 1,252 1,144 1,131 1,122 1,083 1,063 990 960 920 913 911 895

Holding Invesstments 4,100,000 Cooperatieve Centrale Raiffeisen-Boerenleenbank BA 4% 10/09/2015 3,400,000 Roche Holdings Inc 5.5% 04/03/2015 2,525,000 Royal Bank of Scotland Plc 6.375% 29/04/2014 2,450,000 Vodafone Group Plc 4.625% 08/09/2014 2,500,000 Santander Issuances SAU FRN 27/07/2019 2,400,000 Nordea Bank AB 3.875% 15/12/2015 2,200,000 Skandinaviska Enskilda Banken AB 6.625% 09/07/2014 2,225,000 SSE Plc 5.75% 05/02/2014 2,125,000 France Telecom SA 5% 12/05/2016 2,100,000 Gazprom OAO Via Gaz Capital SA 6.58% 31/10/2013 2,100,000 American Express Credit Corp 5.375% 01/10/2014 2,050,000 Morgan Stanley 5.375% 14/11/2013 2,200,000 Lloyds TSB Bank Plc FRN 29/05/2020 2,075,000 SSE Plc FRN 31/12/2049 1,900,000 General Electric Capital Corp 5.25% 10/12/2013 1,850,000 Santander Finance Preferred SAU FRN 31/12/2049 1,850,000 Standard Chartered Bank FRN 31/12/2049 1,725,000 UBS AG 6.375% 20/07/2016 1,775,000 RWE Finance BV 6.375% 03/06/2013 1,800,000 Abbey National Treasury Services Plc 5.5% 18/06/2014

Cost £‘000 4,257 3,739 2,695 2,596 2,493 2,468 2,424 2,399 2,281 2,230 2,225 2,145 2,113 2,046 2,013 1,978 1,977 1,932 1,918 1,892

890 888

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

252 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

44,635

29,724

Net gains on financial assets at fair value through profit or loss

3

48,189

27,190

92,824

56,914

(2,049)

(1,265)

90,775

55,649

Total gains Operating expenses

4

Net operating profit Finance costs Distributions to redeemable participating shareholders

6

(41,899)

(30,000)

Interest expense

7

(1)

(5)

(41,900)

(30,005)

48,875

25,644

Total finance costs Increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

846,223

777,068

48,875

25,644

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

526,295

230,259

(236,788)

(186,748)

289,507

43,511

1,184,605

846,223

* For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 253

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

CURRENT ASSETS Cash and cash equivalents

19,522

10,755

Receivables

10

104,621

44,733

Financial assets at fair value through profit or loss

11

1,139,817

832,096

1,263,960

887,584

Total currrent assets CURRENT LIABILITIES Payables

12

(68,225)

(32,017)

Distributions to redeemable participating shareholders payable

6

(11,130)

(9,344)

(79,355)

(41,361)

1,184,605

846,223

Total current liabilities Net asset value attributable to redeemab ble participating shareholders at the end of the year/period

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 9.

254 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Bond interest income Securities lending income

3.

Year ended 29 February 2012 $’000

Period from 12 June 2010 to 28 February 2011 $’000

48,189 48,189

27,190 27,190

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 $’000 5 29,718 1 29,724

NET GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Net gains on investments in securities held at fair value through profit or loss

4.

Year ended 29 February 2012 $’000 15 44,615 5 44,635

Year ended 29 February 2012 $’000 (2,049) (2,049)

Period from 12 June 2010 to 28 February 2011 $’000 (1,265) (1,265)

expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 $’000 11,462 10,507 9,344 31,313 (1,967) 654 30,000

Year ended 29 February 2012 $’000 (1) (1)

Period from 12 June 2010 to 28 February 2011 $’000 (5) (5)

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

Year ended 29 February 2012 $’000 10,692 10,535 11,608 11,130 43,965 (2,818) 752 41,899

Bank interest

Please refer to page 63 for each Fund’s management fee rate. The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and

www.iShares.com

iShares plc Annual Report 255

For the year ended 29 February 2012 8.

SHARE CAPITAL

12.

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period 9.

29 February 2012 No. of Shares

28 February 2011 No. of Shares

8,200,000 5,000,000 (2,300,000) 10,900,000

7,800,000 2,200,000 (1,800,000) 8,200,000

NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS

PAYABLES

Purchase of securities awaiting settlement Management fees payable

13.

29 February 2012 $’000

28 February 2011 $’000

(68,042) (183) (68,225)

(31,889) (128) (32,017)

COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 14.

RELATED PARTIES

The related parties are set out on pages 66 and 67.

No. of Shares 15.

Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

10,900,000 8,200,000 7,800,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

1,184,605 846,223 777,068

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 10.

$108.68 $103.20 $99.62

RECEIVABLES

Sale of securities awaiting settlement Bond income receivable Distributions payable held with Registrar*

29 February 2012 $’000

28 February 2011 $’000

80,493 12,998

33,203 11,530

11,130 104,621

44,733

* Further details are set out on note 11 page 65.

11.

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in bonds 256 iShares plc Annual Report

29 February 2012 $’000 1,139,817 1,139,817

28 February 2011 $’000 832,096 832,096

SECURITIES LENDING

During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 $’000

28 February 2011 $’000

5

1

3,711

3,233

5,011

3,391

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

www.iShares.com

For the year ended 29 February 2012 16.

SIGNIFICANT EVENTS DURING THE YEAR

Please refer to note 19 on page 67. 17.

SUBSEQUENT EVENTS

Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 257

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 13,625,000 Bonds Cayman Isslands Corporate bonds - A3 rating 38,150,000 Petrobras International Finance Co - Pifco 5.375% 27/01/2021 5,450,000 Petrobras International Finance Co - Pifco 5.75% 20/01/2020 Total Cayman Islands Germanyy Corporate bonds - Aa3/*-- rating 10,900,000 Deutsche Bank AG 3.25% 11/01/2016 5,450,000 Deutsche Bank AG 3.45% 30/03/2015 8,175,000 Deutsche Bank AG 4.875% 20/05/2013 Total Germany Netherlandss Corporate bonds - Aaa/*-- rating 10,900,000 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 3.875% 08/02/2022 15,914,000 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4.2% 13/05/2014 Total Netherlands

13,625,000

41,069

3.47

5,450,000

5,997 47,066

0.50 3.97

28,558,000

10,900,000 11,095

0.94

5,594

0.47

8,415 25,104

0.71 2.12

35,316,000 10,900,000 7,739,000 10,900,000

10,754

0.91

5,450,000 3,052,000

16,791 27,545

1.42 2.33 5,450,000

Switzerland Corporate bonds - Aa2/*-- rating 10,900,000 Credit Suisse 5.4% 14/01/2020 27,141,000 Credit Suisse 6% 15/02/2018 Total Switzerland

10,900,000 10,900,000

5,450,000 8,175,000 5,450,000

United Kingdom Corporate bonds - A1/*-- rating HSBC Holdings Plc 6.5% 15/09/2037 Lloyds TSB Bank Plc 6.375% 21/01/2021 Corporate bonds - A2 rating BP Capital Markets Plc 2.248% 01/11/2016 BP Capital Markets Plc 3.125% 01/10/2015 BP Capital Markets Plc 3.561% 01/11/2021

258 iShares plc Annual Report

10,955 28,481 39,436

0.93 2.40 3.33

6,431,000 9,810,000 38,150,000 5,450,000 16,350,000 5,450,000

11,979

1.01

11,760

0.99

5,450,000

10,900,000 5,634

0.48

8,757

0.74

5,807

0.49

21,800,000 5,450,000

United Kingdom (cont) Corporate bonds - A2/*-- rating Royal Bank of Scotland Plc 3.95% 21/09/2015 Royal Bank of Scotland Plc 4.375% 16/03/2016 Corporate bonds - Aa2/*-- rating HSBC Holdings Plc 5.1% 05/04/2021 Corporate bonds - Aa3/*-- rating Barclays Bank Plc 5.125% 08/01/2020 Corporate bonds - Baa1/*-- rating Barclays Bank Plc 6.05% 04/12/2017 Total United Kingdom United States Corporate bonds - A1/*-- rating ConocoPhillips 6.5% 01/02/2039 Goldman Sachs Group Inc 5.25% 27/07/2021 Goldman Sachs Group Inc 5.375% 15/03/2020 Goldman Sachs Group Inc 5.75% 24/01/2022 Goldman Sachs Group Inc 6% 15/06/2020 Goldman Sachs Group Inc 6.25% 01/09/2017 Corporate bonds - A2 rating American Express Credit Corp 2.75% 15/09/2015 AT&T Inc 2.5% 15/08/2015 AT&T Inc 5.35% 01/09/2040 AT&T Inc 5.55% 15/08/2041 Wachovia Corp 5.75% 01/02/2018 Wells Fargo & Co FRN 15/06/2016 Wells Fargo & Co 4.375% 31/01/2013 Wells Fargo & Co 5.625% 11/12/2017 Corporate bonds - A2/*-- rating Morgan Stanley 5.5% 26/01/2020 Morgan Stanley 5.625% 23/09/2019 Morgan Stanley 5.75% 25/01/2021

Fair value $'000

% of net asset value

13,714

1.16

13,897

1.17

5,971

0.50

30,231

2.55

10,836 118,586

0.92 10.01

49,502

4.18

10,891

0.92

7,889

0.67

11,344

0.96

5,739

0.48

3,351

0.28

5,677 6,727 11,132 44,625

0.48 0.57 0.94 3.77

6,313

0.53

17,532

1.48

5,633

0.47

6,303

0.53

10,733

0.91

21,650

1.83

5,376

0.45

www.iShares.com

As at 29 February 2012

Holding Investment

16,677,000 10,900,000 5,450,000 26,487,000

47,524,000

22,345,000 11,336,000 10,900,000 2,725,000 5,450,000 40,221,000

23,653,000

40,330,000

7,630,000 36,297,000 33,245,000 2,943,000

18,857,000 72,485,000

www.iShares.com

United States (cont) Corporate bonds - A3 rating American Express Co 6.15% 28/08/2017 Hewlett-Packard Co 4.3% 01/06/2021 Hewlett-Packard Co 4.375% 15/09/2021 Verizon Communications Inc 8.75% 01/11/2018 Corporate bonds - A3/*-- rating Citigroup Inc 6.125% 21/11/2017 Corporate bonds - Aa2 rating Berkshire Hathaway Inc 3.2% 11/02/2015 General Electric Capital Corp 1.875% 16/09/2013 General Electric Capital Corp 4.65% 17/10/2021 General Electric Capital Corp 6.15% 07/08/2037 Wal-Mart Stores Inc 4.25% 15/04/2021 Wal-Mart Stores Inc 6.5% 15/08/2037 Corpo orate bonds - Aa3 rating International Business Machines Corp 5.7% 14/09/2017 Corporate bonds - Aa3/*-- rating JPMorgan Chase & Co 3.45% 01/03/2016 Corporate bonds - Baa1 rating American International Group Inc 5.85% 16/01/2018 American International Group Inc 8.25% 15/08/2018 Anheuser-Busch InBev Worldwide Inc 7.75% 15/01/2019 Comcast Corp 6.95% 15/08/2037 Corporate bonds - Baa1/*-- rating HSBC Finance Corp 6.676% 15/01/2021 Merrill Lynch & Co Inc 6.875% 25/04/2018

Fair value $'000

% of net asset value

Holding Investment

35,970,000 19,683

1.66 16,350,000

11,459

0.97 22,781,000

5,779

0.49 27,250,000

36,549

3.08 18,530,000

53,152

Fair value $'000

4.49 2,725,000

United States (cont) Corporate bonds - Baa2 rating Kraft Foods Inc 5.375% 10/02/2020 Kraft Foods Inc 6.125% 01/02/2018 NBC Universal Media LLC 4.375% 01/04/2021 Time Warner Cable Inc 6.75% 01/07/2018 Time Warner Inc 4.875% 15/03/2020 Corporate bonds A3e rating Citigroup Inc 4.45% 10/01/2017 Total United States

% of net asset value

42,104

3.55

19,649

1.66

25,068

2.12

33,470

2.83

20,883

1.76

2,874 882,080

0.24 74.46

Total bonds

1,139,817

96.22

1,139,817

96.22

23,881

2.01

11,494

0.97

11,817

1.00

Total value of investments

3,156

0.27

Cash†

19,522

1.6 65

6,258

0.53

Other net assets

25,266

2.13

55,389

4.67

28,727

2.43

Net asset value attributable to redeemable participating shareholders at the end of the year

1,184,605 100.00

†

41,877

3.54

Substantially all cash positions are held with State Street Bank and Trust Company.

All credit ratings are shown as at 29 February 2012. 8,209

0.69

43,346

3.66

Analysis of total current assets and gross of all liabilities (unaudited)

43,902

3.70

Transferable securities admitted to an official stock exchange listing or traded on a regulated market

3,868

0.33

Other assets Total current assets

20,216

1.71

78,853

6.65

Fair value $’000

% of total current assets

1,139,817

90.18

124,143

9.82

1,263,960

100.00

iShares plc Annual Report 259

As at 29 February 2012 The 20 largest sales Holding Investments

The 20 largest purchases Proceeds $‘000

43,907,000 Dow Chemical Co 8.55% 15/05/2019 39,039,000 Pfizer Inc 4.45% 15/03/2012 33,107,000 Gazprom Via Gaz Capital SA 9.25% 23/04/2019 32,785,000 Shell International Finance BV 6.375% 15/12/2038 33,388,000 Goldman Sachs Group Inc 6.25% 01/09/2017 33,806,000 Wells Fargo & Co 4.375% 31/01/2013 22,874,000 PepsiCo Inc 7.9% 01/11/2018 25,064,000 Metropolitan Life Global Funding I 5.125% 10/04/2013 22,250,000 JPMorgan Chase Bank NA 6% 01/10/2017 22,157,000 AT&T Inc 2.5% 15/08/2015 20,829,000 HSBC Holdings Plc 6.5% 15/09/2037 19,559,000 General Electric Capital Corp 6.15% 07/08/2037 16,628,000 Citigroup Inc 6.125% 21/11/2017 17,676,000 Deutsche Bank AG 2.375% 11/01/2013 16,558,000 Cooperatieve Centrale RaiffeisenBoerenleenbank BA 4.2% 13/05/2014 16,279,000 Morgan Stanley 5.45% 09/01/2017 15,500,000 General Electric Capital Corp 1.875%

55,872 40,444

16/09/2013 15,295,000 Merrill Lynch & Co Inc 6.875% 25/04/2018 11,782,000 Anheuser-Busch InBev Worldwide Inc 5.375% 15/01/2020 8,445,000 Wal-Mart Stores Inc 6.5% 15/08/2037

15,682

39,829 39,599 36,542 35,211 30,957 26,472 24,358 22,657 20,926 19,847 17,894 17,673 17,467 16,676

Cost $‘000

Holding Investments 39,514,000 Anheuser-Busch InBev Worldwide Inc 7.75% 15/01/2019 44,200,000 AT&T Inc 5.55% 15/08/2041 43,250,000 Petrobras International Finance Co - Pifco 5.375% 27/01/2021 40,190,000 JPMorgan Chase & Co 3.45% 01/03/2016 33,836,000 American International Group Inc 8.25% 15/08/2018 33,250,000 Merrill Lynch & Co Inc 6.875% 25/04/2018 26,836,000 General Electric Capital Corp 1.875% 16/09/2013 24,300,000 Citigroup Inc 6.125% 21/11/2017 19,556,000 Wal-Mart Stores Inc 6.5% 15/08/2037 16,200,000 ConocoPhillips 6.5% 01/02/2039 18,900,000 Wells Fargo & Co 3.676% 15/06/2016 18,292,000 HSBC Finance Corp 6.676% 15/01/2021 16,500,000 Kraft Foods Inc 5.375% 10/02/2020 14,396,000 Time Warner Cable Inc 6.75% 01/07/2018 16,125,000 Royal Bank of Scotland Plc 4.375% 16/03/2016 12,150,000 Verizon Communications Inc 8.75% 01/11/2018 15,725,000 Royal Bank of Scotland Plc 3.95% 21/09/2015 12,009,000 Dow Chemical Co 8.55% 15/05/2019 14,030,000 Credit Suisse 6% 15/02/2018 11,049,000 Gazprom Via Gaz Capital SA 9.25% 23/04/2019

49,506 47,363 46,065 40,451 39,590 35,781 26,967 26,746 24,606 20,798 20,022 19,157 18,491 16,960 16,387 16,230 15,750 15,416 14,856 13,721

15,268 12,755 10,620

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

260 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

60,536

33,695

Net gains on financial assets at fair value through profit or loss

3

15,397

362,302

75,933

395,997

(14,787)

(10,699)

61,146

385,298

Total gains Operating expenses

4

Net operating profit Finance costs: Distributions to redeemable participating shareholders

6

(39,540)

(24,823)

Interest expense

7

(35)

(29)

Total finance costs

(39,575)

(24,852)

Net profit for the financial year/period before tax

21,571

360,446

Non-reclaimable withholding tax

(6,325)

(4,344)

Net profit for the financial year/period after tax

15,246

356,102

2,229

(2,211)

17,475

353,891

Adjustment to align to the valuation methodology as set out in the prospectus

8

Increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

1,961,415

1,611,794

17,475

353,891

590,751

231,159

(439,414)

(235,429)

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase/(decrease) in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

151,337

(4,270)

2,130,227

1,961,415

* For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 261

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

CURRENT ASSETS Cash and cash equivalents

1,162

27,803

Receivables

11

7,559

30,512

Financial assets at fair value through profit or loss

12

2,122,564

1,960,069

2,131,285

2,018,384

Total current assets CURRENT LIABILITIES Bank overdraft

(1,130)

-

Payables

13

(1,249)

(56,803)

Distributions to redeemable participating shareholders payable

6

(3,204)

(2,462)

(5,583)

(59,265)

2,125,702

1,959,119

4,525

2,296

2,130,227

1,961,415

Totaal current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to reedeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

262 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 17 7 59,474 33,073 1,045 615 60,536 33,695

NET GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000

Net gains on investments in securities held at fair value through profit or loss Net losses on currency

4.

362,801 (499) 362,302

OPERATING EXPENSES

Management fees Dividend Payable

5.

16,564 (1,167) 15,397

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (14,787) (10,696) (3) (14,787) (10,699)

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 $’000 15,126 7,941 2,462 25,529 (916) 210 24,823

Year ended 29 February 2012 $’000 (35) (35)

Period from 12 June 2010 to 28 February 2011 $’000 (29) (29)

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate. Bank interest

www.iShares.com

Year ended 29 February 2012 $’000 7,389 21,978 7,827 3,204 40,398 (1,763) 905 39,540

iShares plc Annual Report 263

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 $’000 2,296

2,229 2,229 4,525

Period from 12 June 2010 to 28 February 2011 $’000 4,507

(2,211) (2,211) 2,296

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

44,000,000 14,200,000 (10,800,000) 47,400,000

43,800,000 5,400,000 (5,200,000) 44,000,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

47,400,000 44,000,000 43,800,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

2,130,227 1,961,415 1,611,794

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$44.94 $44.58 $36.80

11. RECEIVABLES 29 February 2012 $’000

28 February 2011 $’000

1 4,240

26,747 3,701

114

64

3,204 7,559

30,512

Sale of securities awaiting settlement Dividend income receivable Securities lending income receivable Distributions payable held with Registrar*

* Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Investment in rights

29 February 2012 $’000 2,122,564 2,122,564

28 February 2011 $’000 1,959,806 263 1,960,069

29 February 2012 $’000

28 February 2011 $’000

-

(11,457)

(1,249) (1,249)

(44,150) (1,185) (11) (56,803)

13. PAYABLES

Purchase of securities awaiting settlement Redemption of shares awaiting settlement Management fees payable Overdraft interest

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

264 iShares plc Annual Report

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For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 $’000

28 February 2011 $’000

1,045

615

295,517

196,210

325,494

216,126

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 265

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

594,000

1,934,000

1,050,000

1,422,000 1,086,000

1,280,000

2,231,727 649,500 377,000 1,334,000

1,731,999 237,000

2,351,000

571,000

2,256,000

711,000

2,320,000

Equities Bermuda Apparel retailers Yue Yuen Industrial Holdings Ltd Com HKD 0.25 Automobiles Brilliance China Automotive Holdings Ltd Com USD 0.01 Chemicals Huabao International Holdings Ltd Com HKD 0.10 Commercial services COSCO Pacific Ltd Com HKD 0.10 Food China Yurun Food Group Ltd Com HKD 0.10 Forest products & paper Nine Dragons Paper Holdings Ltd Com HKD 0.10 Holding companies - diversified operations Noble Group Ltd Com HKD 0.25 NWS Holdings Ltd Com HKD 1.00 Home furnishinggs Haier Electronics Group Co Ltd Com HKD 0.10 Skyworth Digital Holdings Ltd Com HKD 0.10 Hotels Shangri-La Asia Ltd Com HKD 1.00 Marine transportation Orient Overseas International Ltd Com USD 0.10 Oil & gas Kunlun Energy Co Ltd Com HKD 0.01 Pharmaceuticals Sihuan Pharmaceutical Holdings Group Ltd Com HKD 0.01 Pipelines China Gas Holdings Ltd Com HKD 0.01 Real estate investment & services Kerry Properties Ltd Com HKD 1.00 Specialty chemicals Sinofert Holdings Ltd Com HKD 0.10

266 iShares plc Annual Report

2,022

2,244

Holding Investment Bermuda (cont) Specialty retailers 8,055,300 GOME Electrical Appliances Holding Ltd Com HKD 0.025 Textile 4,398,000 Li & Fung Ltd Com HKD 0.0125 Total Bermuda

0.11

0.03

2,149

0.10

5,671,721

1,151,000

2,690,000 0.08 495,000 1,155

2,542 1,075

0.05

0.12 0.05

1,091,500

952,000 1,073,000

468

0.02

745

0.04

4,332

0.20

660,000 51,000 37,800 1,630

0.08 1,422,000

3,941

% of net asset value

2,461

0.12

10,128 42,629

0.48 2.00

1,945

0.09

217

0.01

1,186

0.06

612

0.03

1,295

0.06

802

0.04

996

0.04

676

0.03

57

0.00

634

0.03

4,025

0.19

4,119

0.19

4,191

0.20

834

0.04

6,018 2,617

0.28 0.13

1,961

0.09

0.09

742

1,644

Fair value $'000

0.18

1,392,000 4,238,000

227

0.01

1,082

0.05

3,351

0.16

1,604,000 994,800

691

0.03

1,150,800

914,000

Cayman Islands Alternative energy GCL-Poly Energy Holdings Ltd Com HKD 0.10 Apparel retailers China Dongxiang Group Co Com HKD 0.01 Automobiles Geely Automobile Holdings Ltd Com HKD 0.02 Broadline retailers Intime Department Store Group Co Ltd Com USD 0.00001 Parkson Retail Group Ltd Com HKD 0.02 Building & construction materials China Resources Cement Holdings Ltd Com HKD 0.10 China Shanshui Cement Group Ltd Com USD 0.01 Chemicals Dongyue Group Com HKD 0.10 Commodity chemicals Yingde Gases Com USD 0.000001 Electronics TPK Holding Co Ltd Com TWD 10.00 Food products China Mengniu Dairy Co Ltd Com HKD 0.10 Tingyi Cayman Islands Holding Corp Com USD 0.005 Want Want China Holdings Ltd Com USD 0.02 Heavy construction China State Construction International Holdings Ltd Com HKD 0.025 Hotels Sands China Ltd Com USD 0.01 Wynn Macau Ltd Com HKD 0.001 Internet Alibaba.com Ltd Com HKD 0.0001

www.iShares.com

As at 29 February 2012

Holding Investment

933,400

1,258,000 319,000

918,000

1,266,000

467,000

2,016,000 1,604,200 4,326,000 3,902,000 378,000

5,300,000 1,764,000 2,390,500 1,399,000 3,545,000 2,012,000 440,500 222,000 476,000 1,636,000 229,000

Cayman Islands (cont) Internet (cont) Tencent Holdings Ltd Com HKD 0.0001 Machinery, construction & mining Lonking Holdings Ltd Com HKD 0.10 Sany Heavy Equipment International Holdings Co Ltd Com HKD 0.10 Metal fabricate/ hardware China Zhongwang Holdings Ltd Com HKD 0.10 Paper Lee & Man Paper Manufacturing Ltd Com HKD 0.025 Personal products Hengan International Group Co Ltd Com HKD 0.10 Real estate Agile Property Holdings Ltd Com HKD 0.10 China Resources Land Ltd Com HKD 0.10 Country Garden Holdings Co Ltd Com HKD 0.10 Evergrande Real Estate Group Ltd Com USD 0.01 Longfor Properties Co Ltd Com HKD 0.10 Real estate investment & services Renhe Commercial Holdings Co Ltd Com HKD 0.01 Shimao Property Holdings Ltd Com HKD 0.10 Shui On Land Ltd Com USD 0.0025 Soho China Ltd Com HKD 0.02 Retail Belle International Holdings Ltd Com HKD 0.01 Bosideng International Holdings Ltd Com USD 0.00001 China ZhengTong Auto Services Holdings Ltd Com HKD 0.10 Daphne International Holdings Ltd Com HKD 0.10 Golden Eagle Retail Group Ltd Com HKD 0.10 Hengdeli Holdings Ltd Com HKD 0.005 Zhongsheng Group Holdings Ltd Com HKD 0.0001

Fair value $'000

% of net asset value

Holding Investment

237,000 24,335

1.14 81,724

509

281

0.03

13,872,000

0.01 482,000

402

0.02 508,000

669

0.03 2,484,000

4,221

0.20 573,000

2,709

0.13

3,057

0.14

1,958

0.09

2,470

0.12

547

0.02

629

0.03

2,302 1,029 1,019

0.11 0.05 0.04

548,000

1,091,000

1,401,000

257,000

1,524,620 5,841

0.27

623

0.03

542

0.03

277

0.01

1,176

0.06

705

0.03

442

0.02

3,416,500 701,400 231,000

2,410,000

4,744,000 940,500

www.iShares.com

Cayman Islands (cont) Semiconductors ASM Pacific Technology Ltd Com HKD 0.10 MStar Semiconductor Inc Com TWD 10.00 Semiconductor Manufacturing International Corp Com USD 0.0004 Shipping China Rongsheng Heavy Industries Group Holdings Ltd Com HKD 0.10 Specialty chemicals Kingboard Chemical Holdings Ltd Com HKD 0.10 Telecommunications equipment Foxconn International Holdings Ltd Com USD 0.04 Textile Anta Sports Products Ltd Com HKD 0.10 Utilities — electric & gas ENN Energy Holdings Ltd Com HKD 0.10 Total Cayman Islaands Hong Kong Agriculture China Agri-Industries Holdings Ltd Com HKD 0.10 Airlines Cathay Pacific Airways Ltd Com HKD 0.20 Auto manufacturers Dah Chong Hong Holdings Ltd Com HKD 0.15 Banks Bank of East Asia Ltd Com HKD 2.50 BOC Hong Kong Holdings Ltd Com HKD 5.00 Hang Seng Bank Ltd Com HKD 5.00 Wing Hang Bank Ltd Com HKD 1.00 Coal Shougang Fushan Resources Group Ltd Com HKD 0.10 Computer hardware Lenovo Group Ltd Com HKD 0.025 Diversified financial services Hong Kong Exchanges and Clearing Ltd Com HKD 1.00

Fair value $'000

% of net asset value

3,340

0.16

519

0.03

724

0.03

175

0.01

1,880

0.09

1,733

0.08

632

0.03

1,865 98,796

0.09 4.64

822

0.04

2,764

0.13

363

0.02

6,104

0.29

9,559

0.45

9,794

0.46

2,185

0.10

1,022

0.05

4,190

0.20

17,511

0.82

iShares plc Annual Report 267

As at 29 February 2012

Holding Investment

1,336,000 1,991,000 750,500 1,526,962 1,545,600 1,655,500 1,377,500

305,000 4,763,931

754,000 1,563,279 6,023,000 627,000

1,286,000 940,000

836,000

5,340,500 5,771,222

16,069,200 1,327,000 711,000

1,327,000 4,266,000 1,238,000

Hong Kong (cont) Diversified industrials China Merchants Holdings International Co Ltd Com HKD 0.10 Hutchison Whampoa Ltd Com HKD 0.25 Swire Pacific Ltd Com HKD 0.60 Wharf Holdings Ltd Com HKD 1.00 Electricity China Resources Power Holdings Co Ltd Com HKD 1.00 CLP Holdings Ltd Com HKD 5.00 Power Assets Holdings Ltd Com HKD 1.00 Gas diistribution Beijing Enterprises Holdings Ltd Com HKD 0.10 Hong Kong & China Gas Co Ltd Com HKD 0.25 Hotels Galaxy Entertainment Group Ltd Com HKD 0.10 SJM Holdings Ltd Com HKD 1.00 Insurance AIA Group Ltd Com USD 1.00 China Taiping Insurance Holdings Co Ltd Com HKD 0.05 Iron & steel Citic Pacific Ltd Com HKD 0.40 Mining Minmetals Resources Ltd Com HKD 0.05 Miscellaneous manufacturers Fosun International Ltd Com HKD 0.10 Mobile telecommunications China Mobile Ltd Com HKD 0.10 China Unicom Hong Kong Ltd Com HKD 0.10 Oil & gas CNOOC Ltd Com HKD 0.02 Real estate Poly Hong Kong Investments Ltd Com HKD 0.50 Shanghai Industrial Holdings Ltd Com HKD 0.10 Real estate investment & services Cheung Kong Holdings Ltd Com HKD 0.50 China Overseas Land & Investment Ltd Com HKD 0.10 Franshion Properties China Ltd Com HKD 1.00

268 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

100,000 4,617

0.22 2,320,000

19,806 8,520 9,509

0.93 0.40 0.44

948,000 937,000

3,029 14,611

0.14 0.69

10,284

0.48

1,927

0.09

12,174

0.57

1,859 3,269

0.09 0.15

22,832

1.07

1,455

0.07

2,418

0.11

533

0.03

520

0.03

56,946

2.67

10,403

0.49

36,797

1.73

847

0.04

2,576

0.12

897,000 3,634,500 1,766,200 3,071,500 1,341,000 2,682,000

2,521,500 1,422,000 394,000

1,012,000

1,518,500 2,844,000

397,500

11,857,400 4,267,938 8,971,421

19,368

0.91

2,880,000

8,933

0.42

11,431,600

329

0.02

Fair value $'000

Hong Kong (cont) Real estate investment & servicess (cont) Hang Lung Group Ltd Com HKD 1.00 674 Hang Lung Properties Ltd Com HKD 1.00 8,720 Henderson Land Development Co Ltd Com HKD 2.00 5,928 Hopewell Holdings Ltd Com HKD 2.50 2,845 Hysan Development Co Ltd Com HKD 5.00 3,903 New World Development Co Ltd Com HKD 1.00 4,996 Sino Land Co Ltd Com HKD 1.00 3,152 Sino-Ocean Land Holdings Ltd Com HKD 0.80 1,766 Sun Hung Kai Properties Ltd Com HKD 0.50 20,679 Yuexiu Property Co Ltd Com HKD 0.10 533 Real estate investment trusts Link REIT Reits NPV 9,412 Retail China Resources Enterprise Ltd Com HKD 1.00 5,299 Sun Art Retail Group Ltd Com HKD 0.30 525 Specialty finance China Everbright Ltd Com HKD 1.00 1,905 Travel & tourism MTR Corp Com HKD 1.00 5,365 Water Guangdong Investment Ltd Com HKD 0.50 1,866 Total Hong Kong 385,444 Indonesia Agriculture Gudang Garam Tbk PT Com IDR 500.00 Banks Bank Central Asia Tbk PT Com IDR 62.50 Bank Danamon Indonesia Tbk PT Com NPV Bank Mandiri Persero Tbk PT Com IDR 500.00 Bank Negara Indonesia Persero Tbk PT Com IDR 7500.00 Bank Rakyat Indonesia Persero Tbk PT Com IDR 250.00

% of net asset value

0.03 0.41 0.28 0.13 0.18 0.23 0.15 0.08 0.97 0.03 0.44

0.25 0.02

0.09 0.25

0.09 18.10

2,490

0.12

9,991

0.47

2,082

0.10

6,366

0.30

1,197

0.05

8,681

0.41

www.iShares.com

As at 29 February 2012

Holding Investment

546,000 1,051,000

8,224,000 16,256,900 195,000 235,000

9,827,000

5,724,000 5,212,000

11,275,500

2,504,500

1,658,042

2,957,717 1,757,000

2,892,000

1,896,500

305,000

Indonesia (cont) Building maaterials and fixtures Indocement Tunggal Prakarsa Tbk PT Com IDR 500.00 Semen Gresik Persero Tbk PT Com IDR 100.00 Coal Adaro Energy Tbk PT Com IDR 100.00 Bumi Resources Tbk PT Com IDR 500.00 Indo Tambangraya Megah Tbk PT Com IDR 500.00 Tambang Batubara Bukit Asam Persero Tbk PT Com IDR 500.00 SER 'B' Fixed line telecommunications Telekomunikasi Indonesia Persero Tbk PT Com IDR 250.00 Food products Charoen Pokphand Indonesia Tbk PT Com IDR 10.00 Indofood Sukses Makmur Tbk PT Com IDR 100.00 Gas distribution Perusahaan Gas Negara Persero Tbk PT Com IDR 100.00 General mining Vale Indonesia Tbk PT Com IDR 25.00 Machinery, construction & mining United Tractors Tbk PT Com IDR 250.00 Mobile telecommunications Indosat Tbk PT Com IDR 100.00 Personal products Unilever Indonesia Tbk PT Com IDR 10.00 Pharmaceuticals Kalbe Farma Tbk PT Com IDR 50.00 Retail Astra International Tbk PT Com IDR 500.00 Telecommunications XL Axiata Tbk PT Com IDR 100.00 Total Indonesia

Isle of Man Hotels 5,064,400 Genting Singapore Plc Com USD 0.10 Total Isle of Man www.iShares.com

Fair value $'000

% of net asset value

1,047

0.05

1,305

0.06

Holding Investment

678,600 1,021,750 4,673,300

1,750

0.08

1,089,360

4,371

0.21

3,582,327

936

0.04

1,250,700 1,605,500

538

0.03

7,626

0.36

1,698

0.08

2,918

0.14

4,656

0.22

251,522

619,100

681,600 135,000 571,600 2,821,500 1,689,787

1,007

0.05 94,200

5,312

0.25

1,771

0.08

3,730

0.17

1,114

0.05

14,823

0.69

160 85,569

0.01 4.02

4,422,953 67,200

1,184,800

1,016,814

2,589,400

4,861,600 2,353,700 3,528,600

6,539 6,539

0.31 0.31

737,600

Malaysia Airlines AirAsia BHD Com MYR 0.10 Banks AMMB Holdings Bhd Com MYR 1.00 Bumiputra-Commerce Holdings Bhd Com MYR 1.00 Hong Leong Bank Bhd Com MYR 1.00 Malayan Banking Bhd Com MYR 1.00 Public Bank Bhd Com MYR 1.00 RHB Capital Bhd Com MYR 1.00 Broadline retailers Parkson Holdings Bhd Com MYR 1.00 Chemicals Petronas Chemicals Group Bhd Com MYR 0.10 Diversified industrials Berjaya Corp Bhd Com MYR 1.00 IJM Corp Bhd Com MYR 1.00 MMC Corp Bhd Com MYR 0.10 Sime Darby Bhd Com MYR 0.50 Electricityy Tenaga Nasional Bhd Com MYR 1.00 Exploration & production Petronas Gas Bhd Com MYR 1.00 Farming & fishing IOI Corp Bhd Com MYR 0.10 Kuala Lumpur Kepong Bhd Com MYR 1.00 Fixed line telecommunications Telekom Malaysia Bhd Com MYR 1.00 Gambling Berjaya Sports Toto Bhd Com MYR 0.10 Heavy construction Gamuda Bhd Com MYR 1.00 Holding companies - diversified operations YTL Corp Bhd Com MYR 0.10 Hotels Genting Bhd Com MYR 0.10 Genting Malaysia Bhd Com MYR 0.10 Investment services Bursa Malaysia Bhd Com MYR 0.50

Fair value $'000

% of net asset value

820

0.04

2,091

0.10

11,170

0.52

4,386

0.21

10,452 5,695 4,261

0.49 0.27 0.20

470

0.02

1,385

0.07

218 265 521 9,118

0.01 0.01 0.03 0.43

3,543

0.17

528

0.02

7,973

0.37

526

0.03

2,045

0.10

1,487

0.07

3,155

0.15

2,840

0.13

8,329

0.39

4,559

0.21

1,817

0.09

iShares plc Annual Report 269

As at 29 February 2012

Holding Investment

1,177,840 2,661,300 101,000

2,455,800 97,000

165,000

Malaysia (cont) Marine transportation MISC Bhd Com MYR 1.00 Mobile telecommunications Axiata Group Bhd Com MYR 1.00 Oil & gas services Malaysia Marine and Heavy Engineering Holdings Bhd Com MYR 0.50 Real estate SP Setia Bhd Com MYR 0.75 UEM Land Holdings Bhd Com MYR 0.50 Tobacco British American Tobacco Malaysia Bhd Com MYR 0.50 Total Malaysia

Mauritius Agriculture 4,710,086 Golden Agri-Resources Ltd Com USD 0.025 Total Mauritius

644,000

2,836,000 1,934,000

471,000 2,940,000 705,750 2,770,588

323,000

9,948,000 54,169,600 7,853,065 4,764,600 46,330,140

People's Republic of China Aerospace & defence AviChina Industry & Technology Co Ltd Com CNY 1.00 Airlines Air China Ltd Com CNY 1.00 China Southern Airlines Co Ltd Com CNY 1.00 Auto manufacturers Byd Co Ltd Com CNY 1.00 Dongfeng Motor Group Co Ltd Com CNY 1.00 Great Wall Motor Co Ltd Com CNY 1.00 Guangzhou Automobile Group Co Ltd Com CNY 1.00 Auto parts & equipment Weichai Power Co Ltd Com CNY 1.00 Banks Agricultural Bank of China Ltd Com CNY 1.00 Bank of China Ltd Com CNY 1.00 Bank of Communications Co Ltd Com CNY 1.00 China Citic Bank Corp Ltd Com CNY 1.00 China Construction Bank Corp Com CNY 1.00

270 iShares plc Annual Report

Fair value $'000

2,202 4,575

% of net asset value

Holding Investment

0.10

3,845,124

0.21

662,000 50,072,930

180

0.01 192,000

3,222

0.15

75

0.00

2,875 100,,783

0.13 4.73

1,440,000 297,000 2,712,000

336,000 3,318,000 2,739 2,739

0.13 0.13

3,378,000 2,974,500 2,052,000

330

0.02

2,135

0.10

973

0.05

2,370,000

905,000 1,542

0.07

5,747

0.27

1,414

0.07

3,262

0.15

1,782

0.08

480,800 343,000

4,740,000 3,752,000

1,896,000 4,938 23,538

0.23 1.11

6,480

0.30

3,121

0.15

39,008

1.83

14,778,000

786,000

People's Republic of China (cont) Banks (cont) China Merchants Bank Co Ltd Com CNY 1.00 Chongqing Rural Commercial Bank Com CNY 1.00 Industrial & Commercial Bank of China Com CNY 1.00 Beverages Tsingtao Brewery Co Ltd Com CNY 1.00 Building & construction materials Anhui Conch Cement Co Ltd Com CNY 1.00 BBMG Corp Com CNY 1.00 China National Building Material Co Ltd Com CNY 1.00 Chemicals China BlueChemical Ltd Com HKD 1.00 Sinopec Shanghai Petrochemical Co Ltd Com CNY 1.00 Coal China Coal Energy Co Ltd Com CNY 1.00 China Shenhua Energy Co Ltd Com CNY 1.00 Yanzhou Coal Mining Co Ltd Com CNY 1.00 Commercial services Zhejiang Expressway Co Ltd Com CNY 1.00 Electrical components & equuipment China Longyuan Power Group Corp Com CNY 1.00 Dongfang Electric Corp Ltd Com CNY 1.00 Zhuzhou CSR Times Electric Co Ltd Com CNY 1.00 Electricity Datang International Power Generation Co Ltd Com CNY 1.00 Huaneng Power International Inc Com CNY 1.00 Engineering & construction Beijing Capital International Airport Co Ltd Com CNY 1.00 Fixed line telecommunications China Telecom Corp Ltd Com CNY 1.00 Gold mining Zhaojin Mining Industry Co Ltd Com CNY 1.00

Fair value $'000

% of net asset value

8,785

0.41

407

0.02

36,672

1.72

1,035

0.05

5,004 314

0.24 0.01

3,916

0.18

263

0.01

1,266

0.06

4,330

0.20

13,711

0.65

5,122

0.24

1,788

0.08

781

0.04

1,292

0.06

942

0.04

1,711

0.08

2,390

0.11

939

0.04

8,994

0.42

1,614

0.08

www.iShares.com

As at 29 February 2012

Holding Investment

6,407,700

1,180,000 559,600

4,523,000 2,174,100 3,545,000

3,760,300 1,685,800

7,255,000 792,000 1,473,500

15,995,700 19,650,800 1,396,660

953,000 3,296,000

708,680

5,069,150 1,896,000

1,153,000

3,327,410 www.iShares.com

People's Republic of China (cont) Gold mining (cont) Zijin Mining Group Co Ltd Com CNY 0.10 Healthcare products Shandong Weigao Group Medical Polymer Co Ltd Com CNY 0.10 Sinopharm Group Co Ltd Com CNY 1.00 Heavy construction China Communications Construction Co Ltd Com CNY 1.00 China Railway Construction Corp Ltd Com CNY 1.00 China Railway Group Ltd Com CNY 1.00 Industrial metals & mining Aluminum Corp of China Ltd Com CNY 1.00 Jiangxi Copper Co Ltd Com CNY 1.00 Insurance China Life Insurance Co Ltd Com CNY 1.00 China Pacific Insurance Group Co Ltd Com CNY 1.00 Ping An Insurance Group Co Com CNY 1.00 Integrated d oil & gas China Petroleum & Chemical Corp Com CNY 1.00 PetroChina Co Ltd Com CNY 1.00 Iron & steel Angang Steel Co Ltd Com CNY 1.00 Machinery — diversified CSR Corp Ltd Com CNY 1.00 Shanghai Electric Group Co Ltd Com CNY 1.00 Machinery, construction & mining Zoomlion Heavy Industry Science and Technology Co Ltd Com CNY 1.00 Marine transportation China Shipping Container Lines Co Ltd Com CNY 1.00 China Shipping Development Co Ltd Com CNY 1.00 Oil equipment & services China Oilfield Services Ltd Com CNY 1.00 Property & casualty insurance PICC Property & Casualty Co Ltd Com CNY 1.00

Fair value $'000

% of net asset value

3,065

0.14

1,169

0.06

1,515

0.07

Holding Investment

1,143,200

43,800 308,000 2,242,000

4,613

0.21

1,701

0.08

1,431

0.07

2,080

0.10

4,619

0.22

22,591

1.06

2,854

0.14

12,862

0.60

772,996 2,744,975 1,896,000

1,699,012

215,966

1,236,000 463,000 18,232 29,695

0.86 1.39

1,081

0.05

743

0.04

1,768

0.08

358,180 61,000

1,162,000 2,520,000 101,400

1,093

0.05 59,250

1,732

0.08

1,420

0.07

2,019

0.10

4,676

0.22

6,217,420 9,982,995

People's Republic of China (cont) Real estate investment & services Guangzhou R&F Properties Co Ltd Com CNY 0.25 Retail Shanghai Pharmaceuticals Holding Co Ltd Com CNY 1.00 Wumart Stores Inc Com CNY 1.00 Telecommunications China Communications Services Corp Ltd Com CNY 1.00 ZTE Corp Com CNY 1.00 Transportation China COSCO Holdings Co Ltd Com CNY 1.00 Jiangsu Expressway Co Ltd Com CNY 1.00 Total People's Republic of China Philippines Banks Bank of the Philippine Islands Com PHP 10.00 Broadline retailers SM Investments Corp Com PHP 10.00 Electricity Aboitiz Power Corp Com PHP 1.00 Energy Development Corp Com PHP 1.00 Manila Electric Co Com PHP 10.00 Food Universal Robina Corp Com PHP 1.00 Holding companies - diversified operations Aboitiz Equity Ventures Inc Com PHP 1.00 Alliance Global Group Inc Com PHP 1.00 San Miguel Corp Com PHP 5.00 Mobile telecommunications Philippine Long Distance Telephone Co Com PHP 5.00 Real estate investment & services Ayala Land Inc Com PHP 1.00 SM Prime Holdings Inc Com PHP 1.00 Total Philippines

Fair value $'000

% of net asset value

1,495

0.07

81 622

0.00 0.03

1,151 2,307

0.05 0.11

1,787

0.09

1,985 325,933

0.09 15.30

2,651

0.12

3,197

0.15

924

0.04

59 2,206

0.00 0.11

74

0.00

1,294

0.06

674 267

0.03 0.02

3,916

0.18

2,945

0.14

3,806 22,013

0.18 1.03

iShares plc Annual Report 271

As at 29 February 2012

Holding Investment

24,580

104,879 44,889

61,778 7,203 5,707 31,750 141,986 220,219

17,330 123,220

39,534 21,447 18,679 10,196 7,683

96,160 14,894 5,776 18,980 44,023 12,006 6,420 99,684

35,871

Republic of South Korea Aerospace & defence Korea Aerospace Industries Ltd Com KRW 5000.00 Agriculture KT&G Corp Com KRW 5000.00 Airlines Korean Air Lines Co Ltd Com KRW 5000.00 Auto parts Hyundai Mobis Com KRW 5000.00 Hyundai Wia Corp Com KRW 5000.00 Mando Corp Com KRW 5000.00 Automobiles Hyundai Motor Co Pref KRW 5000.00 Hyundai Motor Co Com KRW 5000.00 Kia Motors Corp Com KRW 5000.00 Banks Industrial Bank of Korea Com KRW 5000.00 Korea Exchange Bank Com KRW 5000.00 Biotechnology Celltrion Inc Com KRW 500.00 Broadline retailers E-Mart Co Ltd Com KRW 5000.00 Hyundai Department Store Co Ltd Com KRW 5000.00 Lotte Shopping Co Ltd Com KRW 5000.00 Shinsegae Co Ltd Com KRW 5000.00 Commodity chemicals Hanwha Chem Corp Com KRW 5000.00 Honam Petrochemical Corp Com KRW 5000.00 KCC Corp Com KRW 5000.00 KP Chemical Corp Com KRW 5000.00 LG Chem Ltd Com KRW 5000.00 OCI Co Ltd Com KRW 5000.00 Computer services SK C&C Co Ltd Com KRW 200.00 Consumer electronics LG Electronics Inc Com KRW 5000.00 Distribution & wholesale Hanwha Corp Com KRW 5000.00

272 iShares plc Annual Report

Fair value $'000

% of net asset value

660

0.03

6,853

0.32

Holding Investment

13,885 123,625

207,231 2,119 15,711 889 854

1,799 27,351 13,917

0.10

212,836

0.74

163,210

0.04 0.04

147,896

0.09 1.28 0.65

154,269 286,371 45,806 24,444 63,090

201

0.01

896

0.04

1,237

0.06

5,176

0.24

2,789

0.13

3,436

0.16

331,400 159,270 125,613

7,379

1,799

0.09

2,398

0.11

4,706 1,854

0.22 0.09

283 15,681 2,882 717

0.01 0.74 0.13

4,519 49,810

253,210

95,367 35,438

167,150

0.03 49,780

7,601

0.36 47,466

1,133

Republic of South Korea (cont) Distribution & wholesale (cont) Hyosung Corp Com KRW 5000.00 Samsung C&T Corp Com KRW 5000.00 Diversified financial services BS Financial Group Inc Com KRW 5000.00 Daewoo Securities Co Ltd Com KRW 5000.00 DGB Financial Group Inc Com KRW 5000.00 Hana Financial Group Inc Com KRW 5000.00 Hyundai Securities Co Ltd Com KRW 5000.00 KB Financial Group Inc Com KRW 5000.00 Korea Investment Holdings Co Ltd Com KRW 5000.00 Mirae Asset Securities Co Ltd Com KRW 5000.00 Samsung Securities Co Ltd Com KRW 5000.00 Shinhan Financial Group Co Ltd Com KRW 5000.00 Woori Finance Holdings Co Ltd Com KRW 5000.00 Woori Investment & Securities Co Ltd Com KRW 5000.00 Diversified industrials Doosan Corp Com KRW 5000.00 Electrical components & equipment LG Innotek Co Ltd Com KRW 5000.00 Samsung Electro-Mechanics Co Ltd Com KRW 5000.00 Electricity Korea Electric Power Corp Com KRW 5000.00 Electronic equipment Samsung Electronics Co Ltd Com KRW 5000.00 Samsung SDI Co Ltd Com KRW 5000.00 Electronics LG Display Co Ltd Com KRW 5000.00 Environmental control Woongjin Coway Co Ltd Com KRW 500.00 Exploration & production S-Oil Corp Com KRW 2500.00

Fair value $'000

% of net asset value

824

0.04

8,509

0.40

2,584

0.12

2,645

0.13

2,188

0.10

5,215

0.25

1,517

0.07

10,546

0.50

1,853

0.09

872

0.04

3,434

0.16

12,812

0.60

1,744

0.08

1,578

0.07

1,131

0.05

387

0.02

4,172

0.19

5,670

0.27

102,722

4.82

4,371

0.21

4,423

0.21

1,664

0.08

5,325

0.25

0.05 www.iShares.com

As at 29 February 2012

Holding Investment

50,836

4,215 52,181 9,479 950 948 31,806 157,426

38,785 62,285 49,636

31,560

26,402 63,798 49,620 12,590 36,209 59,606 53,189 52,280

1,870

10,068 38,965

www.iShares.com

Republic of South Korea (cont) Exploration & production (cont) SK Innovation Co Ltd Com KRW 5000.00 Fixed line telecommunications KT Corp ADR NPV KT Corp Com KRW 5000.00 Food products CJ CheilJedang Corp Com KRW 5000.00 Lotte Confectionery Co Ltd Com KRW 5000.00 Orion Corp Com KRW 5000.00 Heavy construction Daelim Industrial Co Ltd Com KRW 5000.00 Daewoo Engineering & Construction Co Ltd Com KRW 5000.00 GS Engineering & Construction Corp Com KRW 5000.00 Hyundai Development Co Com KRW 5000.00 Hyundai Engineering & Construction Co Ltd Com KRW 5000.00 Samsung Engineering Co Ltd Com KRW 5000.00 Holding companies - diversified operations LS Corp Com KRW 5000.00 Home furnishings LG Corp Com KRW 5000.00 Industrial metals & mining Dongkuk Steel Mill Co Ltd Com KRW 5000.00 Hyundai Hysco Co Ltd Com KRW 5000.00 Hyundai Steel Co Com KRW 5000.00 POSCO Com KRW 5000.00 Industrial suppliers Daewoo International Corp Com KRW 5000.00 SK Networks Co Ltd Com KRW 2500.00 Insurance Samsung Life Insurance Co Ltd Com KRW 500.00 Internet NCSoft Corp Com KRW 500.00 NHN Corp Com KRW 500.00

Fair value $'000

% of net asset value

Holding Investment

26,292 8,429

0.40

62 1,518

0.00 0.07

78,590

2,724

0.13

85,250

1,535 601

0.07 0.03

35,736 6,680

3,582

1,492

0.17

0.07

3,352

0.16

1,375

0.06

3,754

0.18

6,672

0.31

11,700 164,720 91,000

48,580 6,527

454 181,232

2,037

0.10

3,986

0.19

1,115

0.05

429

0.02

3,388

0.18 1.04

9,531

3,706 22,165

33,010 27,501

9,742 1,671

0.08

503

0.02

10,150 19,380

153

0.01

2,488 8,098

0.12 0.38

37,420

116,110

Republic of South Ko orea (cont) Machinery — diversified Doosan Heavy Industries & Construction Co Ltd Com KRW 5000.00 Machinery, construction & mining Doosan Infracore Co Ltd Com KRW 5000.00 Marine transportation Daewoo Shipbuilding & Marine Engineering Co Ltd Com KRW 5000.00 Hyundai Heavy Industries Co Ltd Com KRW 5000.00 Hyundai Merchant Marine Co Ltd Com KRW 5000.00 Hyundai Mipo Dockyard Com KRW 5000.00 Samsung Heavy Industries Co Ltd Com KRW 5000.00 STX Pan Ocean Co Ltd Com KRW 1000.00 Miscellaneous manufacturers Cheil Industries Inc Com KRW 5000.00 Korea Kumho Petrochemical Com KRW 5000.00 Mobile telecommunications SK Telecom Co Ltd Com KRW 500.00 SK Telecom Co Ltd ADR KRW 500.00 Oil & gas GS Holdings Com KRW 5000.00 SK Holdings Co Ltd Com KRW 5000.00 Personal products Amorepacific Corp Com KRW 5000.00 LG Household & Health Care Ltd Com KRW 5000.00 Platinum & precious metals Korea Zinc Co Ltd Com KRW 5000.00 Property & casualty insurancee Dongbu Insurance Co Ltd Com KRW 500.00 Hyundai Marine & Fire Insurance Co Ltd Com KRW 500.00 Samsung Fire & Marine Insurance Co Ltd Com KRW 500.00 Recreational services Kangwon Land Inc Com KRW 500.00

Fair value $'000

% of net asset value

1,659

0.08

1,591

0.07

2,739

0.13

10,829

0.51

187

0.01

1,632

0.07

6,000

0.28

617

0.03

4,147

0.20

913

0.04

59

0.00

2,617

0.12

1,906

0.09

4,167

0.19

3,089

0.14

4,370

0.21

3,814

0.18

442

0.02

559

0.03

7,041

0.33

2,673

0.12

iShares plc Annual Report 273

As at 29 February 2012

Holding Investment

414,790 17,715 37,268

4,490 87,480

1,109,000 492,800 1,628,500 2,368,000 1,165,000

127,000

1,185,000 1,668,000

7,378,150

971,600

1,482,300 612,000 1,008,000 948,000 1,134,500 862,200

Republic of South Korea (cont) Semiconductors Hynix Semiconductor Inc Com KRW 5000.00 Samsung Electronics Co Ltd Pref KRW 5000.00 Samsung Techwin Co Ltd Com KRW 5000.00 Transportation services Glovis Co Ltd Com KRW 500.00 Tyres Hankook Tire Co Ltd Com KRW 500.00 Total Republic of South Korea Singapore Agriculture Wilmar International Ltd Com NPV Airlines Singapore Airlines Ltd Com NPV Banks DBS Group Holdings Ltd Com NPV Oversea-Chinese Banking Corp Ltd Com NPV United Overseas Bank Ltd Com NPV Distribution & wholesale Jardine Cycle & Carriage Ltd Com NPV Engineering & construction SembCorp Industries Ltd Com NPV Singapore Technologies Engineering Ltd Com NPV Fixed line telecommunications Singapore Telecommunications Ltd Com NPV Food products Olam International Ltd Com NPV Holding companies - diversified operations Keppel Corp Ltd Com NPV Hotels City Developments Ltd Com NPV Investment services Singapore Exchange Ltd Com NPV Marine transportation COSCO Corp Singapore Ltd Com NPV Neptune Orient Lines Ltd Com NPV SembCorp Marine Ltd Com NPV

Fair value $'000

% of net asset value

Holding Investment

1,859,000 11,197

0.53

11,101

0.52

2,132

0.10

742

0.03

2,117,000 1,185,000 1,513,600 2,205,000

3,347 480,145

0.16 22.54

4,536

0.21

4,351

0.20

18,545

0.87

17,034

0.80

16,845

0.79

2,364,000 1,120,000

3,355,617

1,646,862

4,864

0.23

5,018

0.23

4,200

0.20

18,698

0.88

1,847

0.09

73,000

4,954,040

220,940

2,244,978 3,556,560

2,850,332 0.62

3,872,348

5,463

0.26

4,602,462

5,820

0.27

912 1,215 3,699

0.04 0.06 0.17

13,136

2,565,059 538,617 659,134 7,421,696 258,970

274 iShares plc Annual Report

Singapore (cont) Publishing Singapore Press Holdings Ltd Com NPV Real estate CapitaLand Ltd Com NPV Fraser and Neave Ltd Com NPV Real estate investment trusts Ascendas Real Estate Investment Trust Reits NPV CapitaMall Trust Reits NPV Transportation ComfortDelgro Corp Ltd Com NPV Hutchison Port Holdings Trust Unit NPV Total Singapore Taiwan Apparel retailers Far Eastern New Century Corp Com TWD 10.00 Auto parts & equipment Cheng Shin Rubber Industry Co Ltd Com TWD 10.00 Automobiles Yulon Motor Co Ltd Com TWD 10.00 Banks Chang Hwa Commercial Bank Com TWD 10.00 Broadline retailers Far Eastern Department Stores Co Ltd Com TWD 10.00 Building materials and fixtures Asia Cement Corp Com TWD 10.00 Taiwan Cement Corp Com TWD 10.00 Commodity chemicals Formosa Chemicals & Fibre Corp Com TWD 10.00 Formosa Plastics Corp Com TWD 10.00 Nan Ya Plastics Corp Com TWD 10.00 Computer hardware Acer Inc Com TWD 10.00 Advantech Co Ltd Com TWD 10.00 Asustek Computer Inc Com TWD 10.00 AU Optronics Corp Com TWD 10.00 Chicony Electronics Co Ltd Com TWD 10.00

Fair value $'000

% of net asset value

5,635

0.26

5,212 6,358

0.24 0.30

2,476 3,165

0.12 0.15

2,891

0.14

891 152,811

0.04 7.17

4,304

0.20

4,056

0.19

154

0.01

3,033

0.14

305

0.01

2,872

0.14

4,561

0.21

8,911

0.42

12,093

0.56

11,241

0.53

3,922 1,812

0.18 0.09

6,189

0.29

4,014

0.19

533

0.02

www.iShares.com

As at 29 February 2012

Holding Investment

4,460,554 4,149,949 679,235 3,050,429 1,695,483 105,695 2,436,151 1,398,570 2,100,686 1,276,933 9,849,793 9,536,118 4,401,157 6,346,029 5,224,736 5,448,054 1,136,909 7,837,920 7,135,458 5,661,107 6,520,521

70,543 3,555,000 1,873,277 379,000 8,154,171 182,000 www.iShares.com

Taiwan (cont) Computer hardware (cont) Chimei Innolux Corp Com TWD 10.00 Compal Electronics Inc Com TWD 10.00 Foxconn Technology Co Ltd Com TWD 10.00 Inventec Corp Com TWD 10.00 Lite-On Technology Corp Com TWD 10.00 Phison Electronics Corp Com TWD 10.00 Quanta Computer Inc Com TWD 10.00 Synnex Technology International Corp Com TWD 10.00 Tatung Co Ltd Com TWD 10.00 Wistron Corp Com TWD 10.00 Diverssified financial services China Development Financial Holding Corp Com TWD 10.00 Chinatrust Financial Holding Co Ltd Com TWD 10.00 E.Sun Financial Holding Co Ltd Com TWD 10.00 First Financial Holding Co Ltd Com TWD 10.00 Fubon Financial Holding Co Ltd Com TWD 10.00 Hua Nan Financial Holdings Co Ltd Com TWD 10.00 KGI Securities Co Ltd Com TWD 10.00 Mega Financial Holding Co Ltd Com TWD 10.00 SinoPac Financial Holdings Co Ltd Com TWD 10.00 Taishin Financial Holding Co Ltd Com TWD 10.00 Yuanta Financial Holding Co Ltd Com TWD 10.00 Electrical components & equipment Simplo Technology Co Ltd Com TWD 10.00 Walsin Lihwa Corp Com TWD 10.00 Electronics Delta Electronics Inc Com TWD 10.00 E Ink Holdings Inc Com TWD 10.00 Hon Hai Precision Industry Co Ltd Com TWD 10.00 Kinsus Interconnect Technology Corp Com TWD 10.00

Fair value $'000

% of net asset value

Holding Investment

247,654 2,397

0.11

4,899

0.23

1,442,414 76,000

3,131 1,448

0.15 0.07

158,683 483,000

2,301

0.11

840

0.04

6,025

0.28

3,535 708 2,124

0.17 0.03 0.10

1,044,433 715,546 241,497

259,000

4,351,783 3,334

0.16

6,472

0.30

2,403

0.11

6,550,898

4,059

0.19

4,193,515

6,132

0.29

3,234

0.15

509

0.02

6,092

0.29

1,581,005

2,658

0.13

711,000

2,311

0.11

3,837

0.18

1,277,633 2,063,711

505 1,379

0.02 0.07

2,828,963

10,839,379 1,908,000

553,586

71,070 5,143 567

0.24 0.03

69,360

28,294

1.33

327,016

647

0.03

Taiwan (cont) Electronics (cont) Nan Ya Printed Circuit Board Corp Com TWD 10.00 Pegatron Corp Com TWD 10.00 Radiant Opto-Electronics Corp Com TWD 10.00 Tripod Technology Corp Com TWD 10.00 Unimicron Technology Corp Com TWD 10.00 Wintek Corp Com TWD 10.00 WPG Holdings Ltd Com TWD 10.00 Ya Hsin Industrial Co Ltd Com TWD 10.00* Fixed line telecommunications Chunghwa Telecom Co Ltd Com TWD 10.00 Food products Uni-President Enterprises Corp Com TWD 10.00 Footwear Pou Chen Corp Com TWD 10.00 Insurance Cathay Financial Holding Co Ltd Com TWD 10.00 Shin Kong Financial Holding Co Ltd Com TWD 10.00 Iron & steel China Steel Corp Com TWD 10.00 Machinery — diversified Teco Electric and Machinery Co Ltd Com TWD 10.00 Marine transportation Evergreen Marine Corp Taiwan Ltd Com TWD 10.00 U-Ming Marine Transport Corp Com TWD 10.00 Wan Hai Lines Ltd Com TWD 10.00 Yang Ming Marine Transport Corp Com TWD 10.00 Metal fabricate/ hardware Catcher Technology Co Ltd Com TWD 10.00 Miscellaneous manufacturers Hiwin Technologies Corp Com TWD 10.00 Largan Precision Co Ltd Com TWD 10.00 Mobile telecommunications Chunghwa Telecom Co Ltd ADR NPV

Fair value $'000

% of net asset value

622 1,960

0.03 0.09

337

0.02

493

0.02

632 922 1,019

0.03 0.04 0.05

-

0.00

796

0.04

6,662

0.31

2,507

0.12

7,700

0.36

1,419

0.07

11,228

0.53

1,347

0.06

1,105

0.05

1,239 743

0.06 0.03

1,197

0.06

4,049

0.19

793

0.04

1,555

0.07

9,948

0.47

iShares plc Annual Report 275

As at 29 February 2012

Holding Investment

1,705,867

1,177,590

138,000

678,392

5,157,955 462,872 218,462 2,152,507 3,480,055 873,076 290,745 482,390 383,045 489,201 105,840 2,629,243 18,482 21,437,491

232,940 11,956,817

370,500 820,000

670,973

Taiwan (cont) Mobile telecommunications (cont) Taiwan Mobile Co Ltd Com TWD 10.00 Oil & gas Formosa Petrochemical Corp Com TWD 10.00 Real estate investment & services Farglory Land Development Co Ltd Com TWD 10.00 Retail President Chain Store Corp Com TWD 10.00 Semiconductors Advanced Semiconductor Engineering Inc Com TWD 10.00 Epistar Corp Com TWD 10.00 Everlight Electronics Co Ltd Com TWD 10.00 Inotera Memories Inc Com TWD 10.00 Macronix International Com TWD 10.00 MediaTek Inc Com TWD 10.00 Motech Industries Inc Com TWD 10.00 Novatek Microelectronics Corp Com TWD 10.00 Powertech Technology Inc Com TWD 10.00 Realtek Semiconductor Corp Com TWD 10.00 Richtek Technology Corp Com TWD 10.00 Siliconware Precision Industries Co Com TWD 10.00 Sino-American Silicon Products Inc Com TWD 10.00 Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 Transcend Information Inc Com TWD 10.00 United Microelectronics Corp Com TWD 10.00 Specialty chemicals China Petrochemical Development Corp Com TWD 10.00 Taiwan Fertilizer Co Ltd Com TWD 10.00 Telecommunications HTC Corp Com TWD 10.00 Total Taiwan

276 iShares plc Annual Report

Fair value $'000

% of net asset value

5,234

0.24

3,874

0.18

Holding Investment

475,700 856,200 1,407,900 4,583,800 1,327,700

293

0.01 1,654,347

3,577

0.17

899,444 642,545

Thailand Banks Bangkok Bank PCL Com THB 10.00 Bangkok Bank PCL Com THB 10.00 Kasikornbank PCL Com THB 10.00 Krung Thai Bank PCL Com THB 5.15 Siam Commercial Bank PCL Com THB 10.00 Broadcasting & entertainment BEC World PCL Com THB 1.00 Chemicals Indorama Ventures PCL Com THB 1.00 PTT Global Chemical PCL Com THB 10.00 Coal Banpu PCL Com THB 10.00 Commodity chemicals IRPC PCL Com THB 1.00 Exploration & production PTT Exploration & Production PCL Com THB 1.00 PTT PCL Com THB 10.00 Thai Oil PCL Com THB 10.00 Food products Charoen Pokphand Foods PCL Com THB 1.00 Holding companies - diversified operations Siam Cement PCL Com THB 1.00 Mobile telecommunications Advanced Info Service PCL Com THB 1.00 Retail CP ALL PCL Com THB 1.00 Total Thailand

Fair value $'000

% of net asset value

3,018 5,432 6,861

0.14 0.26 0.32

2,620

0.12

5,681

0.27

2,405

0.11

1,189

0.06

1,576

0.07

4,075

0.19

1,580

0.07

6,686 10,286 278

0.32 0.48 0.01

1,520

0.07

5,247

0.25

5,082

0.24

1,942 65,478

0.09 3.07

5,045 1,211

0.24 0.06

489

0.02

589

0.03

10,130,972

1,474 8,940

0.07 0.42

1,099,703

601

0.03

860,001 111,000

1,444

0.07

1,277,400

878

0.04

1,037

0.05

632

0.03

3,090

0.14

38

0.00

59,143

2.78

Totaal equities

2,122,564

99.64

697

0.03

Total value of investments

2,122,564

99.64

6,284

0.29

32

0.00

475

0.02

Other net assets

3,106

0.15

2,296

0.11

15,087 353,685

0.71 16.60

Net assets attributable to redeemable participating shareholders

2,125,702

99.79

190,925

379,900 964,264

887,200

Cash†

www.iShares.com

As at 29 February 2012

Holding Investment Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

Fair value $'000

4,525

% of net asset value

0.21

2,130,227 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company. * Investments less that $500 are rounded to zero. Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

www.iShares.com

Fair value $’000

% of total current assets

2,122,564 8,721 2,131,285

99.59 0.41 100.00

iShares plc Annual Report 277

For the year ended 29 February 2012 The 20 largest sales Holding Investments 25,983 Samsung Electronics Co Ltd Com KRW 5000.00 1,418,000 China Mobile Ltd Com HKD 0.10 5,376,000 Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 4,079,000 CNOOC Ltd Com HKD 0.02 10,069,000 China Construction Bank Corp Com CNY 1.00 2,382,000 Hon Hai Precision Industry Co Ltd Com TWD 10.00 5,430,000 PetroChina Co Ltd Com CNY 1.00 11,340,000 Industrial & Commercial Bank of China Com CNY 1.00 34,785 Hyundai Motor Co Com KRW 5000.00 407,000 Sun Hung Kai Properties Ltd Com HKD 0.50 1,896,000 China Life Insurance Co Ltd Com CNY 1.00 288,500 Hong Kong Exchanges and Clearing Ltd Com HKD 1.00 2,619,630 Taiwan Mobile Co Ltd Com TWD 10.00 14,420 POSCO Com KRW 5000.00 391,000 Cheung Kong Holdings Ltd Com HKD 0.50 220,800 Tencent Holdings Ltd Com HKD 0.0001 12,276,000 Bank of China Ltd Com CNY 1.00 494,000 Hutchison Whampoa Ltd Com HKD 0.25 16,409 Hyundai Mobis Com KRW 5000.00 3,962,000 China Petroleum & Chemical Corp Com CNY 1.00

The 20 largest purchases Proceeds $‘000 22,279 13,770 13,175 8,249 7,662 7,373 7,351 7,338 6,375 5,641 5,536 5,375 5,347 5,227 5,178 5,022 4,916 4,707

Cost $‘000

Holding Investmentss 28,913 Samsung Electronics Co Ltd Com KRW 5000.00 6,500,000 Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 1,625,000 China Mobile Ltd Com HKD 0.10 4,701,800 AIA Group Ltd Com USD 1.00 17,393,000 China Construction Bank Corp Com CNY 1.00 14,910,000 Industrial & Commercial Bank of China Com CNY 1.00 4,824,000 CNOOC Ltd Com HKD 0.02 42,258 Hyundai Motor Co Com KRW 5000.00 5,946,000 PetroChina Co Ltd Com CNY 1.00 2,405,000 Hon Hai Precision Industry Co Ltd Com TWD 10.00 17,748 POSCO Com KRW 5000.00 277,600 Tencent Holdings Ltd Com HKD 0.0001 16,123,000 Bank of China Ltd Com CNY 1.00 11,234,000 Agricultural Bank of China Ltd Com CNY 1.00 2,144,000 China Life Insurance Co Ltd Com CNY 1.00 426,000 Sun Hung Kai Properties Ltd Com HKD 0.50 2,201,000 Singapore Telecommunications Ltd Com NPV 18,569 Hyundai Mobis Com KRW 5000.00 426,000 Cheung Kong Holdings Ltd Com HKD 0.50 2,636,000 Li & Fung Ltd Com HKD 0.0125

24,126 15,922 15,900 15,760 12,765 9,727 9,562 8,405 7,780 6,730 6,531 6,303 6,298 6,013 5,979 5,740 5,530 5,487 5,435 5,416

4,393 4,257

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

278 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

40,838

19,093

Net (losses)/gains on financial assets at fair value through profit or loss

3

(110,088)

149,204

(69,250)

168,297

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(7,042)

(5,634)

(76,292)

162,663

Finance costs: Distributions to redeemable participating shareholders

6

(30,294)

(13,655)

Interest expense

7

(34)

(13)

(30,328)

(13,668)

(106,620)

148,995

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(3,057)

(1,965)

(109,677)

147,030

(2,387)

2,962

(112,064)

149,992

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

1,127,980

941,599

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(112,064)

149,992

132,590

36,389

Share transactions: Proceeds from issue of redeemable participating shares

(166,762)

-

(Decrease)/increase in net assets resulting from share transactions

Payments on redemption of redeemable participating shares

(34,172)

36,389

Net assets attributable to redeemable participating shareholders at the end of the year/period

981,744

1,127,980

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements .

www.iShares.com

iShares plc Annual Report 279

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

CURRENT ASSETS Cash and cash equivalents

2,075

2,873

Receivables

11

8,986

3,692

Financial assets at fair value through profit or loss

12

974,966

1,124,271

986,027

1,130,836

-

(217)

Total current assets CURRENT LIABILITIES Bank overdraft Payables

13

(572)

(628)

Distributions to redeemable participating shareholders payable

6

(4,840)

(5,527)

(5,412)

(6,372)

980,615

1,124,464

1,129

3,516

981,744

1,127,980

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

280 iShares plc Annual Report

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For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income

3.

Year ended 29 February 2012 $’000 10 40,828 40,838

NET LOSSES/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on currency

4.

(108,952) (1,136) (110,088)

Period from 12 June 2010 to 28 February 2011 $’000

Year ended 29 February 2012 $’000 (7,042) (7,042)

6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

149,254 (50) 149,204

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 $’000 19,093 19,093

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets.

Period from 12 June 2010 to 28 February 2011 $’000 (5,634) (5,634)

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

7.

Period from 12 June 2010 to 28 February 2011 $’000 3,615 4,605 5,527 13,747 (92) 13,655

INTEREST EXPENSE

Please refer to page 63 for each Fund’s management fee rate.

Bank interest

www.iShares.com

Year ended 29 February 2012 $’000 12,876 4,597 7,547 4,840 29,860 (714) 1,148 30,294

Year Period from ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (34) (13) (34) (13)

iShares plc Annual Report 281

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the investment valuation methodology as set out in the Prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 3,516 554

(2,387) (2,387) 1,129

2,962 2,962 3,516

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

18,800,000 2,600,000 (3,700,000) 17,700,000

18,200,000 600,000 18,800,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

17,700,000 18,800,000 18,200,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

282 iShares plc Annual Report

981,744 1,127,980 941,599

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$55.47 $60.00 $51.74

11. RECEIVABLES

Dividend income receivable Distributions payable held with Registrar*

29 February 2012 $’000 4,146

28 February 2011 $’000 3,692

4,840 8,986

3,692

* Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Investment in rights

29 February 2012 $’000 974,966 974,966

28 February 2011 $’000 1,124,262 9 1,124,271

29 February 2012 $’000 (572) (572)

28 February 2011 $’000 (628) (628)

13. PAYABLES

Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67. 16. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 17. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transsferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 452,674

925,100 166,500 125,900 204,100 204,100 3,185,548 952,991 301,900 1,081,528 3,800,500 1,251,965

528,249 413,700 544,000

206,200 1,470,500 409,190 281,100 184,800 263,700 3,234,500 316,899

560,500 168,300 377,300 www.iShares.com

Equities Brazil Aerospace Embraer SA Com NPV Airlines Gol Linhas Aereas Inteligentes SA Pref NPV TAM SA Pref NPV Apparel retailers Cia Hering Com NPV Lojas Renner SA Com NPV Banks Banco Bradesco SA Pref NPV Banco do Brasil SA Com NPV Banco do Estado do Rio Grande do Sul Pref NPV Banco Santander Brasil SA Unit NPV Itau Unibanco Holding SA Pref NPV Beverages Cia de Bebidas das Americas Pref NPV Broadlline retailers Lojas Americanas SA Pref NPV Building materials and fixtures Duratex SA Com NPV Chemicals Ultrapar Participacoes SA Com NPV Commercial services Anhanguera Educacional Participacoes SA Com NPV CCR SA Com NPV Cielo SA Com NPV EcoRodovias Infraestrutura e Logistica SA Com NPV Localiza Rent a Car SA Com NPV Commodity ch hemicals Braskem SA Pref NPV Diversified financial services BM&FBovespa SA Com NPV CETIP SA - Mercados OrganizadosCETIP SA - Mercados Organizados Com NPV Redecard SA Com NPV Electricity AES Tiete SA Pref NPV Centrais Eletricas Brasileiras SA Pref NPV

52,181 6,897

0.70

639,882 262,600

1,453 2,933 5,483 7,721

0.15 0.30 0.56 0.79

170,800 321,900 131,900 160,160

57,703 15,347

5.88 1.56

3,598

0.37

11,622 81,416

1.19 8.29

50,315

5.13

433,809 93,300

5,630

0.57

385,900

2,304

0.24

12,341

1.26

120,100 217,900 111,400

63,100 1,089,943 173,803 203,383

2,709 11,725 14,579

0.28 1.19 1.48

2,268 3,414

0.23 0.35

2,393

0.24

21,646

2.20

5,884 11,655

0.60 1.19

2,492

0.25

5,724

0.58

1,274,882 289,750

211,600 391,500

291,100 1,214,266 1,431,745 458,200

Brazil (cont) Electricity (cont) Centrais Eletricas Brasileiras SA Com NPV Cia de Transmissao de Energia Electrica Paulista Pref NPV Cia Energetica de Minas Gerais Pref BRL 5.00 Cia Energetica de Sao Paulo Pref NPV Cia Paranaense de Energia Pref NPV CPFL Energia SA Com NPV EDP - Energias do Brasil SA Com NPV Eletropaulo Metropolitana Eletricidade de Sao Paulo SA Pref NPV Light SA Com NPV Tractebel Energia SA Com NPV Engin neering & construction Multiplan Empreendimentos Imobiliarios SA Com NPV Fixed line telecommunications Brasil Telecom SA Pref NPV Tele Norte Leste Participacoes SA Com NPV Tele Norte Leste Participacoes SA Pref NPV Telemar Norte Leste SA Pref NPV Food BRF - Brasil Foods SA Com NPV Cia Brasileira de Distribuicao Grupo Pao de Acucar Pref NPV Cosan SA Industria e Comercio Com NPV JBS SA Com NPV Forest products & paper Suzano Papel e Celulose SA Pref NPV Health care providers Amil Participacoes SA Com NPV Diagnosticos da America SA Com NPV Home construction Rossi Residencial SA Com NPV Industrial metals & mining Cia Siderurgica Nacional SA Com NPV Gerdau SA Pref NPV Metalurgica Gerdau SA Pref NPV

Fair value $'000

% of net asset value

4,909

0.50

1,758

0.18

14,665

1.50

5,745

0.59

4,279 5,180

0.44 0.53

3,223

0.33

3,449 1,902 3,856

0.35 0.19 0.39

2,528

0.26

2,931

0.30

1,254

0.13

4,187 1,581

0.42 0.16

22,663

2.31

8,039

0.82

3,643 5,413

0.37 0.55

1,387

0.14

2,439

0.25

3,648

0.37

1,743

0.18

12,384 14,960 6,090

1.26 1.52 0.62

iShares plc Annual Report 283

As at 29 February 2012

Holding Investment

414,200 294,500 762,250 2,169,874 3,336,629 147,500 192,400 185,000 8,100 2,154,530 4,958,800 6,998,485 350,754 753,500 288,200 469,800 746,137

673,900 424,427 493,200

484,300 1,871,600

304,000 185,200 379,200 3,849,435

Brazil (cont) Industrial metals & mining (cont) MMX Mineracao e Metalicos SA Com NPV Usinas Siderurgicas de Minas Gerais SA Com NPV Usinas Siderurgicas de Minas Gerais SA Pref NPV Vale SA Com NPV Vale SA Pref NPV Insurance Odontoprev SA Com NPV Porto Seguro SA Com NPV Sul America SA Unit NPV Integrated oil & gas HRT Participacoes em Petroleo SA Com NPV OGX Petroleo e Gas Participacoes SA Com NPV Petroleo Brasileiro SA Com NPV Petroleo Brasileiro SA Pref NPV Paper Fibria Celulose SA Com NPV Klabin SA Pref NPV Personal products Natura Cosmeticos SA Com NPV Pharmaceuticals Hypermarcas SA Com NPV Railroads All America Latina Logistica SA Com NPV Real estate investment & services BR Malls Participacoes SA Com NPV Brookfield Incorporacoes SA Com NPV Cyrela Brazil Realty SA Empreendimentos e Participacoes Com NPV MRV Engenharia e Participacoes SA Com NPV PDG Realty SA Empreendimentos e Participacoes Com NPV Retail Raia Drogasil SA Com NPV Software Totvs SA Com NPV Specialty finance Bradespar SA Pref NPV Itausa - Investimentos Itau SA Pref NPV

284 iShares plc Annual Report

Fair value $'000

% of net asset value

2,326

0.24

2,642

0.27

5,172 55,040 82,575

0.53 5.61 8.41

2,563 2,408 2,030

0.26 0.25 0.21

3,202

0.33

21,321 74,141 99,093

2.17 7.55 10.09

3,177 3,735

0.32 0.38

6,792

0.69

3,059

0.31

4,320

0.44

8,639

0.88

1,607

0.16

4,976

0.51

3,904

0.40

8,001

0.81

2,955

0.30

3,439

0.35

7,984

0.81

26,883

2.74

Holding Investment

495,693 1,403,698 636,500 189,732

Fair value $'000

% of net asset value

14,782 8,405

1.50 0.86

Brazil (cont) Telecommunications Telefonica Brasil SA Pref NPV Tim Participacoes SA Com NPV Tobacco Souza Cruz SA Com NPV Water Cia de Saneamento Basico do Estado de Sao Paulo Com NPV Total Braziil

9,531

0.97

7,156 974,966

0.73 99.32

Total equities

974,966

99.32

Total value of investments

974,966

99.32

Cash†

2,075

0.21

Other net assets

3,574

0.36

980,615

99.89

Adjustment to align to the valuation methodology as set out in the prospectus

1,129

0.11

Net asset value attributable to redeemable participating shareholders at the end of the year

981,744

100.00

Net assets attributable to redeemable participating shareholders

†

Substantially all cash positions are held with State Street Bank and Trust Company.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

Fair value $'000

% of total current assets

974,966 11,061 986,027

98.88 1.12 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest sales Holding 860,300 1,669,300 979,000 1,221,600 559,300 821,300 315,200 991,700 280,500 830,800 553,900 359,800 244,600 348,000 165,000 120,300 179,700 786,600 121,100 275,300

Proceeds Investments $‘000 Vale SA Pref NPV 19,898 Petroleo Brasileiro SA Pref NPV 19,156 Itau Unibanco Holding SA Pref NPV 17,420 Petroleo Brasileiro SA Com NPV 15,563 Vale SA Com NPV 14,003 Banco Bradesco SA Pref NPV 13,536 Cia de Bebidas das Americas Pref NPV 10,024 Itausa - Investimentos Itau SA Pref NPV 5,767 BRF - Brasil Foods SA Com NPV 5,152 BM&FBovespa SA Com NPV 4,610 OGX Petroleo e Gas Participacoes SA Com NPV 4,206 Cia Siderurgica Nacional SA Com NPV 3,464 Banco do Brasil SA Com NPV 3,463 Gerdau SA Pref NPV 2,824 Cia Energetica de Minas Gerais Pref BRL 5.00 2,647 Cielo SA Com NPV 2,589 Vale Fertilizantes SA Pref NPV 2,430 Gafisa SA Com NPV 2,415 CCR SA Com NPV 2,358 Banco Santander Brasil SA Unit NPV 2,312

The 20 largest purchases Holding 1,080,900 574,600 505,400 749,700 9,200 482,300 328,400 191,100 574,900 390,000 721,000 583,200 165,200 275,200 487,600 326,300 92,802 139,200 256,600 75,000

Investments Petroleo Brasileiro SA Pref NPV Itau Unibanco Holding SA Pref NPV Vale SA Pref NPV Petroleo Brasileiro SA Com NPV HRT Participacoes em Petroleo SA Com NPV Banco Bradesco SA Pref NPV Vale SA Com NPV Cia de Bebidas das Americas Pref NPV Gerdau SA Pref NPV CETIP SA - Mercados Organizados Com NPV Tim Participacoes SA Com NPV Itausa - Investimentos Itau SA Pref NPV BRF - Brasil Foods SA Com NPV BR Malls Participacoes SA Com NPV BM&FBovespa SA Com NPV OGX Petroleo e Gas Participacoes SA Com NPV Telecomunicacoes De Sao Paulo Pref NPV Ultrapar Participacoes SA Com NPV CCR SA Com NPV Telefonica Brasil SA Pref NPV

Cost $‘000 14,615 11,562 11,524 10,994 9,383 8,582 7,817 6,943 6,400 5,770 4,063 3,838 3,258 2,983 2,872 2,803 2,738 2,601 2,418 2,117

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 285

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

15,099

2,957

Net (losses)/gains on financial assets at fair value through profit or loss

3

(106,033)

117,010

(90,934)

119,967

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(3,435)

(1,865)

(94,369)

118,102

Finance costs: Distributions to redeemable participating shareholders

6

(10,178)

(3,149)

Interest expense

7

(23)

(15)

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(10,201)

(3,164)

(104,570)

114,938

(1,107)

(199)

(105,677)

114,739

(489)

267

(106,166)

115,006

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period (Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

538,341

276,608

(106,166)

115,006

113,370

176,528

Share transactions: Proceeds from issue of redeemable participating shares

(173,793)

(29,801)

(Decrease)/increase in net assets resulting from share transactions

Payments on redemption of redeemable participating shares

(60,423)

146,727

Net assets attributable to redeemable participating shareholders at the end of the year/period

371,752

538,341

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements.

286 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

715

3,838

114

29

CURRENT ASSETS Cash and cash equivalents Receivables

11

Financial assets at fair value through profit or loss

12

Total current assets

370,791

537,462

371,620

541,329

-

(18)

(209)

(3,800)

CURRENT LIABILITIES Bank overdraft Payables

13

Total current liabilities Net assetts attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus

8

Net asset value attributable to redeemable participating shareholders at the end of the year/ /period

(209)

(3,818)

371,411

537,511

341

830

371,752

538,341

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 287

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 $’000 6 14,444 649 15,099

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net (losses)/gains on currency

4.

Period from 12 June 2010 to 28 February 2011 $’000

(105,964) (69) (106,033)

117,005 5 117,010

Year ended 29 February 2012 $’000 (3,435) (3,435)

Period from 12 June 2010 to 28 February 2011 $’000 (1,865) (1,865)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 $’000 20 2,803 134 2,957

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 October 2010 November 2010 May 2011 August 2011 November 2011 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 $’000 2,510 128 265 2,903 246 3,149

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate. Bank interest

288 iShares plc Annual Report

Year ended 29 February 2012 $’000 2,342 3,122 4,090 9,554 (179) 803 10,178

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (23) (15) (23) (15)

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 830 563

(489)

267

(489) 341

267 830

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

14,700,000 3,100,000 (5,900,000) 11,900,000

10,500,000 5,100,000 (900,000) 14,700,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

11,900,000 14,700,000 10,500,000

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$31.24 $36.62 $26.34

11. RECEIVABLES

Sale of securities awaiting settlement Securities lending income receivable Dividend tax reclaim receivable

29 February 2012 $’000

28 February 2011 $’000

-

8

10 104 114

18 3 29

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities

29 February 2012 $’000 370,791 370,791

28 February 2011 $’000 537,462 537,462

29 February 2012 $’000

28 February 2011 $’000

(209) (209)

(3,525) (275) (3,800)

13. PAYABLES

Purchase of securities awaiting settlement Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

$’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

371,752 538,341 276,608

iShares plc Annual Report 289

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 $’000

28 February 2011 $’000

649

134

46,342

63,069

51,015

69,474

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

290 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market Equities Czech Republic Banks 21,355 Komercni Banka AS Com CZK 500.00 Electricity 336,035 CEZ AS Com CZK 100.00 Fixed line telecommunications 189,296 Telefonica Czech Republic AS Com CZK 100.00 Total Czech Republic

329,774 704,232

61,018

22,391

Hungary Banks OTP Bank Plc Com HUF 100.00 Fixed line telecommunications Magyar Telekom Telecommunications Plc Com HUF 100.00 Integrated oil & gas MOL Hungarian Oil and Gas Plc Com HUF 1000.00 Pharmaceuticalls Richter Gedeon Nyrt Com HUF 1000.00 Total Hungary

Luxembourg Agriculture 46,923 Kernel Holding SA Com NPV Total Luxembourg

54,323 719,555 189,150 23,058 977,267

252,001 372,912 31,385

www.iShares.com

Poland Banks Bank Handlowy w Warszawie SA Com PLN 4.00 Bank Millennium SA Com PLN 1.00 Bank Pekao SA Com PLN 1.00 BRE Bank SA Com PLN 4.00 Powszechna Kasa Oszczednosci Bank Polski SA Com PLN 1.00 Broaadcasting & entertainment TVN SA Com PLN 0.20 Chemicals Synthos SA Com PLN 0.03 Coal Jastrzebska Spolka Weglowa SA Com PLN 5.00

148,832 790,110 1,155,900

4,171

1.12

14,582

3.92

1,031,484

82,122 509,701 4,110 22,863

1.11 6.15

1,900,931

165,540 6,120

1.65

1,930

0.52

5,300

1.42

4,047 17,397

1,104 1,104

1.09 4.68

0.30 0.30

188,335

57,739

89,351

110,792

1,700,437

2,009,559 1,846,058 1,348 1,004 9,487 2,242

0.36 0.27 2.55 0.60

10,807

2.91

888

0.24

631

0.17

1,057

0.28

311,080 226,592 666,890 129,862 358,871 100,234 2,631,354 529,076 2,130,993

Poland (cont) Electricity Enea SA Com PLN 1.00 PGE SA Com PLN 10.00 Tauron Polska Energia SA Com PLN 5.00 Fixed line telecommunications Telekomunikacja Polska SA Com PLN 3.00 Integrated oil & gas Grupa Lotos SA Com PLN 1.00 Polski Koncern Naftowy Orlen SA Com PLN 1.25 Polskie Gornictwo Naftowe i Gazownictwo SA Com PLN 1.00 Media Cyfrowy Polsat SA Com PLN 0.04 Mining KGHM Polska Miedz SA Com PLN 10.00 Property & casualty insurance Powszechny Zaklad Ubezpieczen SA Com PLN 1.00 Real estate holding and development Globe Trade Centre SA Com PLN 0.10 Software Asseco Poland SA Com PLN 1.00 Total Poland Russian Federation Alternative energy Federal Hydrogenerating Co JSC ADR NPV Banks Sberbank of Russia ADR NPV VTB Bank OJSC GDR NPV Food retailers and wholesalers Magnit OJSC GDR NPV Industrial metals & mining Mechel ADR NPV MMC Norilsk Nickel OJSC ADR NPV Novolipetsk Steel OJSC GDR NPV Severstal OAO GDR NPV TMK OAO GDR NPV Integrated oil & gas Gazprom OAO ADR NPV Lukoil OAO ADR RUB 0.03 Rosneft Oil Co GDR NPV

Fair value $'000

% of net asset value

800 5,086

0.22 1.37

1,917

0.51

5,650

1.52

740

0.20

5,860

1.58

2,251

0.60

743

0.20

9,023

2.43

6,248

1.68

252

0.07

1,928 67,962

0.52 18.28

7,013

1.89

27,571 9,332

7.42 2.51

9,158

2.46

2,515 13,211 3,109 5,527 1,445

0.68 3.55 0.83 1.49 0.39

34,865 33,940 16,483

9.38 9.13 4.43

iShares plc Annual Report 291

As at 29 February 2012

Holding Investment

591,093 1,369,100 829,021 292,197 204,167 132,551 336,025 628,920 356,967

Fair value $'000

% of net asset value

4,002 14,513

1.08 3.90

15,113 8,734 4,432

4.07 2.35 1.19

19,233 13,431

5.18 3.61

Russian Federation (cont) Integrated oil & gas (cont) Surgutneftegas OJSC ADR Pref NPV Surgutneftegas OJSC ADR NPV Mobile telecommunicationss Mobile Telesystems OJSC ADR NPV Rostelecom OJSC ADR NPV Sistema JSFC GDR NPV Oil & gas NovaTek OAO GDR NPV Tatneft ADR NPV Real estate LSR Group GDR RUB 0.25 Specialty chemicals Uralkali OJSC GDR NPV Total Russian Federation

3,327

0.90

14,511 261,465

3.90 70.34

Total equities

370,791

99.75

Total value of investments

370,791

99.75

Cash†

715

0.19

Other net liabilities

(95)

(0.03)

371,411

99.91

Adjustment to align to the valuation methodology as set out in the prospectus

341

0.09

Net asset value attributable to redeemable participating shareholders at the end of the year

371,752

100.00

Net assets attributable to redeemable participating shareholders

†

Substantially all cash positions are held with State Street Bank and Trust Company.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

292 iShares plc Annual Report

Fair value $'000

% of total current assets

370,791 829 371,620

99.78 0.22 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest purchases

The 20 largest sales Holding Investments 1,048,048 MMC Norilsk Nickel OJSC ADR NPV 366,761 Lukoil OAO ADR RUB 0.03 1,781,615 Sberbank of Russia ADR NPV 1,338,087 Gazprom OAO ADR NPV 88,036 NovaTek OAO GDR NPV 201,384 Uralkali OJSC GDR NPV 231,929 Tatneft ADR NPV 1,030,339 Rosneft Oil Co GDR NPV 797,577 Surgutneftegas OJSC ADR NPV 231,578 Polyus Gold OJSC ADR NPV 57,168 MOL Hungarian Oil and Gas Plc Com HUF 1000.00 373,658 Mobile Telesystems OJSC ADR NPV 132,084 CEZ AS Com CZK 100.00 475,589 Powszechna Kasa Oszczednosci Bank Polski SA Com PLN 1.00 292,800 Polymetal JSC GDR NPV 90,686 KGHM Polska Miedz SA Com PLN 10.00 91,258 Bank Pekao SA Com PLN 1.00 863,281 VTB Bank OJSC GDR NPV 149,955 Magnit OJSC GDR NPV 164,874 OTP Bank Plc Com HUF 100.00

Proceeds $‘000 24,149 20,839 20,641 15,996 11,642 8,764 7,926 7,430 6,762 6,695 6,011 5,868 5,734 5,477 4,956 4,662 4,291 4,154 3,455 3,324

Holding Investments 385,999 Rostelecom OJSC ADR NPV 269,387 Uralkali OJSC GDR NPV 182,206 Lukoil OAO ADR RUB 0.03 635,669 Gazprom OAO ADR NPV 115,618 Sberbank of Russia ADR NPV 151,892 CEZ AS Com CZK 100.00 273,664 MMC Norilsk Nickel OJSC ADR NPV 987,202 VTB Bank OJSC GDR NPV 188,104 Magnit OJSC GDR NPV 614,994 Rosneft Oil Co GDR NPV 41,331 Powszechny Zaklad Ubezpieczen SA Com PLN 1.00 37,243 NovaTek OAO GDR NPV 273,704 Mobile Telesystems OJSC ADR NPV 774,131 LSR Group GDR RUB 0.25 96,778 Tatneft ADR NPV 1,709,523 Tauron Polska Energia SA Com PLN 5.00 381,332 Surgutneftegas OJSC ADR NPV 263,453 Powszechna Kasa Oszczednosci Bank Polski SA Com PLN 1.00 749,900 Surgutneftegas OJSC ADR Pref NPV 52,425 KGHM Polska Miedz SA Com PLN 10.00

Cost $‘000 14,639 12,472 12,103 11,540 11,313 6,994 6,984 6,153 5,515 5,305 5,305 5,191 5,080 4,614 4,072 3,939 3,917 3,878 3,872 3,216

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 293

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

187,297

71,529

Net (losses)/gains on financial assets/liabilities at fair value through profit or loss

3

(378,517)

806,850

(191,220)

878,379

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(45,628)

(28,089)

(236,848)

850,290

Finance costs: Distributions to redeemable participating shareholders

6

(122,320)

(47,231)

Interest expense

7

(60)

(37)

Total finance costs

(122,380)

(47,268)

Net (loss)/profit for the financial year/period before tax

(359,228)

803,022

(18,307)

(8,015)

(377,535)

795,007

1,563

3,026

(375,972)

798,033

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

6,498,693

3,611,418

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(375,972)

798,033

1,843,087

2,174,891

(1,558,543)

(85,649)

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

284,544

2,089,242

6,407,265

6,498,693

* For the period from 12 June 2010 to 28 February 2011.

The accompanying notes form an integral part of these financial statements .

294 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

3,122

2,358

311

364

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

20,199

103,339

Financial assets at fair value through profit or loss

12

6,391,083

6,467,866

6,414,715

6,573,927

Total current assets CURRENT LIABILITIES Bank overdraft

(816)

(895)

13

(9,169)

(75,773)

Distributions to redeemable participating shareholders payable

6

(8,096)

(7,621)

Financial liabilities at fair value through profit or loss

12

-

(13)

Payables

Total current liabilities Net assets attributablee to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/perio od

(18,081)

(84,302)

6,396,634

6,489,625

8

10,631

9,068

6,407,265

6,498,693

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 295

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 $’000 61 183,838 3,398 187,297

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on futures contracts Net losses on currency

4.

Period from 12 June 2010 to 28 February 2011 $’000 20 70,147 1,362 71,529

Period from 12 June 2010 to 28 February 2011 $’000

(365,265) (11,642) (1,610) (378,517)

808,881 (440) (1,591) 806,850

Year ended 29 February 2012 $’000 (45,628) (45,628)

Period from 12 June 2010 to 28 February 2011 $’000 (28,085) (4) (28,089)

OPERATING EXPENSES

Management fees Dividend Payable

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7. 5.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

296 iShares plc Annual Report

Period from 12 June 2010 to 28 February 2011 $’000 27,121 17,766 7,621 52,508 (5,331) 54 47,231

INTEREST EXPENSE

MANAGEMENT FEES

Please refer to page 63 for each Fund’s management fee rate.

Year ended 29 February 2012 $’000 34,837 51,004 27,388 8,096 121,325 (5,542) 6,537 122,320

Bank interest

Year ended 29 February 2012 $’000 (60) (60)

Period from 12 June 2010 to 28 February 2011 $’000 (37) (37)

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 9,068 6,042

1,563

3,026

1,563 10,631

3,026 9,068

Further details are set out in the accounting policies note k) on page 30. 9.

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 are classified as financial liabilities. 28 February 2011 No. of Shares 100,600,000 51,000,000 (2,000,000) 149,600,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$42.21 $43.44 $35.90

11. RECEIVABLES

Sale of securities awaiting settlement Dividend income receivable Securities lending income receivable Dividend tax reclaim receivable Distributions payable held with Registrar* Other receivables

29 February 2012 $’000

28 February 2011 $’000

11,725

91,810 11,394

292 74

134 1

8,096 12 20,199

103,339

* Further details are set out on note 11 page 65.

SHARE CAPITAL

29 February Number of redeemable participating 2012 shares: No. of Shares Balance at the beginning of year/period 149,600,000 Issued during year/period 43,000,000 Redeemed during year/period (40,800,000) Balance at the end of year/period 151,800,000

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

12. FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Investment in rights Unrealised gains on futures contracts

Financial liabilities: Unrealised losses on futures contracts

29 February 2012 $’000 6,390,528 -

28 February 2011 $’000 6,467,854 12

555 6,391,083

6,467,866

29 February 2012 $’000

28 February 2011 $’000

-

(13) (13)

151,800,000 149,600,000 100,600,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

6,407,265 6,498,693 3,611,418

iShares plc Annual Report 297

For the year ended 29 February 2012 17.

13. PAYABLES

Purchase of securities awaiting settlement Redemption of shares awaiting settlement Management fees payable

14.

29 February 2012 $’000

28 February 2011 $’000

(5,497)

(29,035)

(3,672) (9,169)

(42,936) (3,802) (75,773)

SIGNIFICANT EVENTS DURING THE YEAR

Please refer to note 19 on page 67. 18.

SUBSEQUENT EVENTS

Please refer to note 20 on pages 67 and 68.

COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67. 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 $’000

28 February 2011 $’000

3,398

1,362

470,379

228,437

518,061

251,428

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively. 298 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Offficial Stock Exchange Listing or traded on a Regulated Market 224,900

4,350,000

767,000

3,096,000 866,000

4,354,000

7,030,000

7,730,000

4,460,000

22,562,260

2,122,200 517,200 456,500 4,096,729 4,630,700 1,727,527

78,800 380,800

www.iShares.com

Equities Bermuda Automobiles Brilliance China Automotive Holdings Ltd Com USD 0.01 Chemicals Huabao International Holdings Ltd Com HKD 0.10 Commercial services COSCO Pacific Ltd Com HKD 0.10 Food China Yurun Food Group Ltd Com HKD 0.10 Forest products & paper Nine Dragons Paper Holdings Ltd Com HKD 0.10 Oil & gas Kunlun Energy Co Ltd Com HKD 0.01 Pipelines China Gas Holdings Ltd Com HKD 0.01 Specialty chemicals Sinofert Holdings Ltd Com HKD 0.10 Specialty retailers GOME Electrical Appliances Holding Ltd Com HKD 0.025 Total Bermuda Brazil Aerospace Embraer SA Com NPV Apparel retailers Cia Hering Com NPV Lojas Renner SA Com NPV Banks Banco Bradesco SA Pref NPV Itau Unibanco Holding SA Pref NPV Beverages Cia de Bebidas das Americas Pref NPV Broadline retailers Lojas Americanas SA Pref NPV Chemicals Ultrapar Participacoes SA Com NPV

275,600 184,000 1,356,400 5,048

0.08

542

0.01

1,960,800 50,400

4,678

0.07

242,400

1,311

0.02

1,340,237 1,319,835 3,930

0.06

11,783

0.18

3,708

0.06

1,140,900 1,235,000

1,328

0.02

6,895 39,223

0.11 0.61

1,229,480 1,010,500

833,700 6,200

426,800 744,800

15,822

0.25

929,700

13,893 17,269

0.22 0.27

2,252,300

74,208 99,201

1.16 1.55

2,029,400 46,500 982,300 1,679,900

69,427

1.08

840

0.01

2,406,200 3,724,538 402,000

8,639

Brazil (cont) Commercial services Anhanguera Educacional Participacoes SA Com NPV CCR SA Com NPV Cielo SA Com NPV EcoRodovias Infraestrutura e Logistica SA Com NPV Diversified financial services BM&FBovespa SA Com NPV CETIP SA - Mercados Organizados Com NPV Redecard SA Com NPV Electricity Centrais Eletricas Brasileiras SA Com NPV Cia Energetica de Minas Gerais Pref BRL 5.00 Tractebel Energia SA Com NPV Exploration & production OGX Petroleo e Gas Participacoes SA Com NPV Fixed line telecommunications Brasil Telecom SA Pref NPV Tele Norte Leste Participacoes SA Pref NPV Food BRF - Brasil Foods SA Com NPV Cia Brasileira de Distribuicao Grupo Pao de Acucar Pref NPV Health care providers Amil Participacoes SA Com NPV Diagnosticos da America SA Com NPV Home construction Rossi Residencial SA Com NPV Industrial metals & mining Cia Siderurgica Nacional SA Com NPV Gerdau SA Pref NPV Metalurgica Gerdau SA Pref NPV MMX Mineracao e Metalicos SA Com NPV Usinas Siderurgicas de Minas Gerais SA Pref NPV Vale SA Com NPV Vale SA Pref NPV Insurance Odontoprev SA Com NPV

Fair value $'000

% of net asset value

2,955 2,197 6,556

0.05 0.03 0.10

10,942

0.17

13,122

0.21

936 5,040

0.01 0.08

14,535

0.23

30,249 20,188

0.47 0.31

12,221

0.19

8,307

0.13

10,965

0.17

17,335

0.27

287

0.00

4,919

0.08

6,941

0.11

5,567

0.09

22,970 21,205 618

0.36 0.33 0.01

5,516

0.08

11,399 61,035 92,175

0.18 0.95 1.44

6,984

0.11

0.13

iShares plc Annual Report 299

As at 29 February 2012

Holding Investment

6,100 5,148,900 7,274,000 602,908 25,700 1,202,800

1,416,600 5,600

3,092,400

395,000 1,375,479

697,578 2,354,144 23,200

10,549,196

7,848,000

605,000

109,000 241,500

120,000

Brazil (cont) Integrated oil & gas HRT Participacoes em Petroleo SA Com NPV Petroleo Brasileiro SA Com NPV Petroleo Brasileiro SA Pref NPV Paper Fibria Celulose SA Com NPV Personal products Natura Cosmeticos SA Com NPV Railroads All America Latina Logistica SA Com NPV Real estate investment & services BR Malls Participacoes SA Com NPV Cyrela Brazil Realty SA Empreendimentos e Participacoes Com NPV PDG Realty SA Empreendimentos e Participacoes Com NPV Software Totvs SA Com NPV Specialty finance Itausa - Investimentos Itau SA Pref NPV Telecommunications Telefonica Brasil SA Pref NPV Tim Participacoes SA Com NPV Tobacco Souza Cruz SA Com NPV Total Brazil Cayman Islands Alternative energy GCL-Poly Energy Holdings Ltd Com HKD 0.10 Apparel retailers China Dongxiang Group Co Com HKD 0.01 Automobiles Geely Automobile Holdings Ltd Com HKD 0.02 Broadline retailers Intime Department Store Group Co Ltd Com USD 0.00001 Parkson Retail Group Ltd Com HKD 0.02 Building & construction materials China Resources Cement Holdings Ltd Com HKD 0.10

300 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

2,151,000 2,411 76,983 102,995

0.04 1.20 1.61

5,461

0.09

606

0.01

6,964

0.11

18,160

0.28

57

0.00

13,220

0.21

7,334

0.11

3,774,000

4,038,000 3,286,000 12,485,000

1,951,300

5,898,000

1,725,000

6,582,000 9,606

0.15

20,803 14,095

0.32 0.22

4,154,000 2,503,000 2,717,000

347 973,505

0.01 15.19

21,300,000 7,285,000

3,618

0.06

5,576,000 6,370,000

1,477

0.02

267

0.00

135

0.00

286

0.01

104,000 3,956,000

5,646,000

78,500 101

Fair value $'000

Cayman Islands (cont) Building & construction materials (cont) China Shanshui Cement Group Ltd Com USD 0.01 Commercial vehicles & trucks Lonking Holdings Ltd Com HKD 0.10 Food products China Mengniu Dairy Co Ltd Com HKD 0.10 Tingyi Cayman Islands Holding Corp Com USD 0.005 Want Want China Holdings Ltd Com USD 0.02 Internet Tencent Holdings Ltd Com HKD 0.0001 Paper Lee & Man Paper Manufacturing Ltd Com HKD 0.025 Personal products Hengan International Group Co Ltd Com HKD 0.10 Real estate Agile Property Holdings Ltd Com HKD 0.10 China Resources Land Ltd Com HKD 0.10 Evergrande Real Estate Group Ltd Com USD 0.01 Longfor Properties Co Ltd Com HKD 0.10 Renhe Commercial Holdings Co Ltd Com HKD 0.01 Shimao Property Holdings Ltd Com HKD 0.10 Retail Belle International Holdings Ltd Com HKD 0.01 Bosideng International Holdings Ltd Com USD 0.00001 Golden Eagle Retail Group Ltd Com HKD 0.10 Hengdeli Holdings Ltd Com HKD 0.005 Semiconductors Semiconductor Manufacturing International Corp Com USD 0.0004 Specialty chemicals Kingboard Chemical Holdings Ltd Com HKD 0.10

% of net asset value

1,997

0.03

1,528

0.02

11,428

0.18

9,724

0.15

12,347

0.19

50,873

0.79

3,118

0.05

15,591

0.24

8,843

0.14

7,916

0.12

1,585

0.03

3,931

0.06

2,526

0.04

9,506

0.15

9,188

0.14

1,971

0.03

257

0.01

1,704

0.03

295

0.01

291

0.01

0.00

www.iShares.com

As at 29 February 2012

Holding Investment Cayman Islands (cont) Utilities — electric & gas 384,000 ENN Energy Holdings Ltd Com HKD 0.10 Total Cayman Islands

Fair value $'000

1,307 161,810

% of net asset value

0.02 2.53

Holding Investment

712,872

167,185

734,300 228,400 115,502 270,570

317,683 770,865 393,450

Chile Airlines Lan Airlines SA ADR NPV Banks Banco Santander Chile ADR NPV Corpbanca ADR NPV Brewers Cia Cervecerias Unidas SA ADR NPV Electricity Empresa Nacional de Electricidad SA ADR NPV Enersis SA ADR NPV Specialty chemicals Sociedad Quimica y Minera de Chile SA ADR NPV Total Chile

Colombia Banks 405,080 BanColombia SA ADR NPV Oil & gas 544,200 Ecopetrol SA ADR NPV Total Colombia Czech Republic Banks 50,838 Komercni Banka AS Com CZK 500.00 Electricity 452,450 CEZ AS Com CZK 100.00 Fixed line telecommunicatio ons 500,207 Telefonica Czech Republic AS Com CZK 100.00 Total Czech Republic Egypt Banks 2,629,435 Commercial International Bank Egypt SAE Com EGP 10.00 42,393 National Societe Generale Bank SAE Com EGP 10.00 Heavy construction 235,016 Orascom Construction Industries Com EGP 5.00 www.iShares.com

6,108,560 19,760

0.31

18,505 2,429

0.29 0.04

19,451

0.30

6,108,560

7,610,000 16,771 15,587

0.26 0.25

23,288 115,791

0.36 1.81

16,782,000 2,972,000 4,530,000 13,662,000

25,893

0.40

31,678 57,571

0.50 0.90

2,981,000

3,142,000

124,000 9,929

0.15

19,634

0.31

10,861 40,424

0.17 0.63

3,775,000 10,980,000 8,572,000

31,726,000 11,177,760

10,843 191

0.17

132,000

0.00

7,168,000 5,218,000

10,756

0.17

Egypt (cont) Investment services Egyptian Financial Group-Hermes Holding Com EGP 5.00 Mobile telecommunications Egyptian Co for Mobile Services Com EGP 10.00 Orascom Telecom Holding SAE Com EGP 1.00 Telecommunications Orascom Telecom Media And Technology Holding SAE Total Egypt Hong Kong Coal Shougang Fushan Resources Group Ltd Com HKD 0.10 Computer hardware Lenovo Group Ltd Com HKD 0.025 Diversified industrials China Merchants Holdings International Co Ltd Com HKD 0.10 China Resources Enterprise Ltd Com HKD 1.00 Guangdong Investment Ltd Com HKD 0.50 Shanghai Industrial Holdings Ltd Com HKD 0.10 Electricity China Resources Power Holdings Co Ltd Com HKD 1.00 Gas distribution Beijing Enterprises Holdings Ltd Com HKD 0.10 Iron & steel Citic Pacific Ltd Com HKD 0.40 Mobile telecommunications China Mobile Ltd Com HKD 0.10 China Unicom Hong Kong Ltd Com HKD 0.10 Oil & gas CNOOC Ltd Com HKD 0.02 Real estate investment & services China Overseas Land & Investment Ltd Com HKD 0.10 Dah Chong Hong Holdings Ltd Com HKD 0.15 Sino-Ocean Land Holdings Ltd Com HKD 0.80 Yuexiu Property Co Ltd Com HKD 0.10

Fair value $'000

% of net asset value

1,718

0.03

4,853

0.07

4,254

0.07

1,610 34,225

0.02 0.53

3,228

0.05

14,822

0.23

10,270

0.16

16,880

0.26

8,966

0.14

10,801

0.17

6,158

0.10

783

0.01

7,097

0.11

117,081

1.83

15,452

0.24

72,650

1.14

23,406

0.37

186

0.00

4,122

0.06

1,036

0.02

iShares plc Annual Report 301

As at 29 February 2012

Holding Investment Hong Kong (cont) Retail 596,500 Sun Art Retail Group Ltd Com HKD 0.30 Total Hong Kong Hungary Banks 498,686 OTP Bank Plc Com HUF 100.00 Integrated oil & gas 127,513 MOL Hungarian Oil and Gas Plc Com HUF 1000.00 Pharmaceuticals 59,108 Richter Gedeon Nyrt Com HUF 1000.00 Total Hungary

821,708 1,878,304 1,306,080 305,511 1,127,783 1,153,074 2,236,097 1,161,365 1,484,412

1,620,208 438,650 1,872,891

India Banks Axis Bank Ltd GDR NPV HDFC Bank Ltd ADR NPV ICICI Bank Ltd ADR NPV State Bank of India GDR NPV Commercial vehicles & trucks Tata Motors Ltd ADR USD 0.10 Computer services Infosys Ltd ADR NPV Wipro Ltd ADR NPV Heavy construction Larsen & Toubro Ltd GDR NPV Mining Sterlite Industries India Ltd ADR NPV Oil & gas Reliance Industries Ltd GDR NPV Pharmaceuticals Dr Reddy's Laboratories Ltd ADR NPV Ranbaxy Laboratories Ltd GDR NPV Total India

Indonesia Agriculture 1,155,500 Gudang Garam Tbk PT Com IDR 500.00 Banks 27,329,000 Bank Central Asia Tbk PT Com IDR 62.50 12,589,487 Bank Danamon Indonesia Tbk PT Com NPV

302 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

20,409,759 795 313,733

0.01 4.90

1,548,500 28,083,000

9,254

0.14

11,076

0.17

10,683 31,013

0.17 0.48

210,000 548,500

1,623,000 30,367,500

13,410,500 19,852 64,520 47,411 27,695

0.31 1.01 0.74 0.43

30,788

0.48

66,509 24,530

1.04 0.38

5,393,323

31,229

0.49

6,828,783

14,711

0.23

53,305

0.83

14,726 16,481 411,757

0.23 0.26 6.43

7,238

0.11

23,027

0.36

6,141

0.10

1,943,500

26,610,500

7,547,000

6,382,000

4,414,000

Indonesia (cont) Banks (cont) Bank Mandiri Tbk Persero PT Com IDR 500.00 Bank Negara Indonesia Persero Tbk PT Com IDR 7500.00 Bank Rakyat Indonesia Persero Tbk PT Com IDR 250.00 Building materials and fixtures Indocement Tunggal Prakarsa Tbk PT Com IDR 500.00 Semen Gresik Persero Tbk PT Com IDR 100.00 Coal Adaro Energy Tbk PT Com IDR 100.00 Bumi Resources Tbk PT Com IDR 500.00 Fixed line telecommunications Telekomunikasi Indonesia Tbk PT Com IDR 250.00 Food products Charoen Pokphand Indonesia Tbk PT Com IDR 50.00 Gas distribution Perusahaan Gas Negara PT Com IDR 100.00 Machinery, construction & mining United Tractors Tbk PT Com IDR 250.00 Mobile telecommunications Indosat Tbk PT Com IDR 100.00 Personal products Unilever Indonesia Tbk PT Com IDR 10.00 Pharmaceuticals Kalbe Farma Tbk PT Com IDR 50.00 Retail Astra International Tbk PT Com IDR 500.00 Total Indonesia

Luxembourg Agriculture 177,086 Kernel Holding SA Com NPV Total Luxembourg Malaysia Banks 7,133,200 AMMB Holdings Bhd Com MYR 1.00

Fair value $'000

% of net asset value

14,481

0.23

644

0.01

21,327

0.33

403

0.01

681

0.01

346

0.01

8,164

0.12

10,407

0.16

576

0.01

10,989

0.17

17,280

0.27

4,088

0.06

16,023

0.25

2,459

0.04

34,500 178,774

0.54 2.79

4,164 4,164

0.06 0.06

14,598

0.23

www.iShares.com

As at 29 February 2012

Holding Investment

7,133,300 1,977,640

15,203,410 7,666,340 2,274,521 7,289,573 2,125,050

2,984,500 4,118,436

11,343,400 6,977,500 10,256,500

3,036,800 1,634,120 12,531,575 784,000

887,000 3,652,500

6,250,000 16,216,100

16,457,158

www.iShares.com

Malaysia (cont) Banks (cont) Bumiputra-Commerce Holdings Bhd Com MYR 1.00 Hong Leong Bank Bhd Com MYR 1.00 Construction & materials YTL Corp Bhd Com MYR 0.10 Diversified d industrials IJM Corp Bhd Com MYR 1.00 Sime Darby Bhd Com MYR 0.50 Farming & fishing IOI Corp Bhd Com MYR 0.10 Kuala Lumpur Kepong Bhd Com MYR 1.00 Food prod ducts PPB Group Bhd Com MYR 1.00 Gambling Berjaya Sports Toto Bhd Com MYR 0.10 Heavy construction Gamuda Bhd Com MYR 1.00 Hotels Genting Bhd Com MYR 0.10 Genting Malaysia Bhd Com MYR 0.10 Investment services Bursa Malaysia Bhd Com MYR 0.50 Marine transportation MISC Bhd Com MYR 1.00 Real estate investment & services SP Setia Bhd Com MYR 0.75 Tobacco British American Tobacco Malaysia Bhd Com MYR 0.50 Total Malaysia Mexico Banks Compartamos SAB de CV Com MXN 1.00 Grupo Financiero Banorte SAB de CV Com NPV Broadcasting & entertainment Grupo Televisa SAB Com NPV Broadline retailers Wal-Mart de Mexico SAB de CV Com NPV Building materials and fixtures Cemex SAB de CV Unit NPV

Fair value $'000

% of net asset value

17,050

0.27

7,962

0.12

8,882

0.14

15,049 7,350

0.24 0.11

Holding Investment

16,614

0.26

17,117

0.27

92,324

1.44

859

0.01

Morocco Telecommunications 167,191 Maroc Telecom SA Com MAD 6.00 Total Morocco

2,776 2,776

0.04 0.04

6,946

0.11

1,026

0.01

3,915

0.06

11,982

0.19

3,475

0.05

10,018

0.16

6,474 44,965

0.10 0.70

13,615

0.21

16,548

0.26

70,876

1.11

6,809

0.11

70,724

1.10

3,489

0.06

0.21

24,691

0.38

13,250

0.21

7,482

0.12

3,055

0.05

1,195,500 6,130,000

16,441

0.26

1,734,250

13,662 216,188

0.21 3.37

9,224,000 2,040,000

8,509,422

13,042,000 103,483,000 16,499,340

1,001

0.02

25,264,400

14,852

0.23

84,179,160

26,797

0.42

2,980,000 96,568,880

0.20

0.06

0.11 4.36

13,822

12,610

4,003

6,867 279,475 5

79,275

0.09

0.79

0.43

0.65

184,300

6,022

50,713

27,696

41,753

8,834,112 80,880

5,656,000 0.20

% of net asset value

Mexico (cont) Mining Grupo Mexico SAB de CV Com NPV Industrias Penoles SAB de CV Com NPV Mobile telecommunications America Movil SAB de CV Com NPV Soft drinks Arca Continental SAB de CV Com NPV Fomento Economico Mexicano SAB de CV Unit NPV Specialty retailers Grupo Elektra SA de CV Com NPV Total Mexico

76,531,082

13,141

Fair value $'000

1,004,000

People's Republic of China Airlines Air China Ltd Com CNY 1.00 China Southern Airlines Co Ltd Com CNY 1.00 Auto manufacturers Byd Co Ltd Com CNY 1.00 Dongfeng Motor Group Co Ltd Com CNY 1.00 Great Wall Motor Co Ltd Com CNY 1.00 Guangzhou Automobile Group Co Ltd Com CNY 1.00 Banks Agricultural Bank of China Ltd Com CNY 1.00 Bank of China Ltd Com CNY 1.00 Bank of Communications Co Ltd Com CNY 1.00 China Citic Bank Corp Ltd Com CNY 1.00 China Construction Bank Corp Com CNY 1.00 China Merchants Bank Co Ltd Com CNY 1.00 Industrial & Commercial Bank of China Com CNY 1.00 Buildiing & construction materials Anhui Conch Cement Co Ltd Com CNY 1.00

iShares plc Annual Report 303

As at 29 February 2012

Holding Investment

7,650,000

19,196,000

2,333,000 5,409,500 4,506,000

2,023,600 1,352,000

21,224,000 15,100,000

34,560,000

2,039,000 11,716,500

156,000 86,800

9,809,000

10,636,000

8,956,000

15,542,000 720,800 2,912,500

Fair value $'000

People's Republic of China (cont) Building & construction materials (cont) China National Building Material Co Ltd Com CNY 1.00 Chemicals Sinopec Shanghai Petrochemical Co Ltd Com CNY 1.00 Coal China Coal Energy Co Ltd Com CNY 1.00 China Shenhua Energy Co Ltd Com CNY 1.00 Yanzhou Coal Mining Co Ltd Com CNY 1.00 Electrical components & equipment Dongfang Electric Corp Ltd Com CNY 1.00 Zhuzhou CSR Times Electric Co Ltd Com CNY 1.00 Electricity Datang International Power Generation Co Ltd Com CNY 1.00 Huaneng Power International Inc Com CNY 1.00 Fixed line telecommunications China Telecom Corp Ltd Com CNY 1.00 Gold mining Zhaojin Mining Industry Co Ltd Com CNY 1.00 Zijin Mining Group Co Ltd Com CNY 0.10 Healthcare products Shandong Weigao Group Medical Polymer Co Ltd Com CNY 0.10 Sinopharm Group Co Ltd Com CNY 1.00 Heavy con nstruction China Communications Construction Co Ltd Com CNY 1.00 Industrial machinery Shanghai Electric Group Co Ltd Com CNY 1.00 Industrial metals & mining Aluminum Corp of China Ltd Com CNY 1.00 Insurance China Life Insurance Co Ltd Com CNY 1.00 China Pacific Insurance Group Co Ltd Com CNY 1.00 Ping An Insurance Group Co Com CNY 1.00

304 iShares plc Annual Report

% of net asset value

Holding Investment

34,380,000 11,047

0.17 43,486,000

7,326

0.11

21,230,300 5,584,000

2,990

0.05

24,935

0.39

11,248

0.17

40,000 1,131,200 5,440

0.08

3,713

0.06

7,662

0.12

9,618

0.15

8,749,000

21,033

0.33

13,662,000

4,185

0.06

5,605

0.09

155

0.00

235

0.01

10,004

0.16

5,705

0.09

4,954

0.08

48,395

0.75

2,598

0.04

25,423

0.40

5,454,000

182,400

People's Repub blic of China (cont) Integrated oil & gas China Petroleum & Chemical Corp Com CNY 1.00 PetroChina Co Ltd Com CNY 1.00 Marine transportation China Shipping Container Lines Co Ltd Com CNY 1.00 China Shipping Development Co Ltd Com CNY 1.00 Oil equipment & services China Oilfield Services Ltd Com CNY 1.00 Property & casualty insurance PICC Property & Casualty Co Ltd Com CNY 1.00 Real estate investment & services Guangzhou R&F Properties Co Ltd Com CNY 0.25 Telecommunications ZTE Corp Com CNY 1.00 Transportation China COSCO Holdings Co Ltd Com CNY 1.00 Transportation services Zhejiang Expressway Co Ltd Com CNY 1.00 Total People's Republic of China

Peru Gold mining 440,871 Cia de Minas Buenaventura SA ADR NPV Total Peru

4,344,089

17,030

106,000

778,484 5,894,000 203,800

Philippines Banks Metropolitan Bank & Trust Com PHP 20.00 Broadline retailers SM Investments Corp Com PHP 10.00 Commercial services International Container Terminal Services Inc Com PHP 1.00 Diversified industrials Ayala Corp Com PHP 50.00 Electricity Aboitiz Power Corp Com PHP 1.00 Food Universal Robina Corp Com PHP 1.00

Fair value $'000

% of net asset value

39,186 65,714

0.61 1.03

7,254

0.11

4,183

0.07

70

0.00

1,590

0.02

7,131

0.11

544

0.01

5,697

0.09

10,305 624,807

0.16 9.75

17,670 17,670 0

0.28 0.28

8,230

0.13

252

0.00

144

0.00

7,283

0.11

4,405

0.07

248

0.00

www.iShares.com

As at 29 February 2012

Holding Investment

1,339,000 46,200 98,598 60,720

12,455,140 24,354,474

219,280 1,180,539

115,497 186,775 25,573 610,666 1,389,657

760,715

323,733

12,224

30,163

Philippines (cont) Holding companies - diversified operations Aboitiz Equity Ventures Inc Com PHP 1.00 San Miguel Corp Com PHP 5.00 Mobile telecommunications Globe Telecom Inc Com PHP 50.00 Philippine Long Distance Telephone Co Com PHP 5.00 Real estate investment & services Ayala Land Inc Com PHP 1.00 SM Prime Holdings Inc Com PHP 1.00 Total Philippines Poland Banks Bank Pekao SA Com PLN 1.00 Powszechna Kasa Oszczednosci Bank Polski SA Com PLN 1.00 Broadcasting & entertainment TVN SA Com PLN 0.20 Chemicals Synthos SA Com PLN 0.03 Con nventional electricity PGE SA Com PLN 10.00 Electricity Enea SA Com PLN 1.00 Fixed line telecommunications Telekomunikacja Polska SA Com PLN 3.00 Integrated oil & gas Polski Koncern Naftowy Orlen SA Com PLN 1.25 Mining KGHM Polska Miedz SA Com PLN 10.00 Property & casualty insurance Powszechny Zaklad Ubezpieczen SA Com PLN 1.00 Real estate holding and development Globe Trade Centre SA Com PLN 0.10 Total Poland

Republic of South Korea Aerospace & defence 45,560 Korea Aerospace Industries Ltd Com KRW 5000.00 www.iShares.com

Fair value $'000

% of net asset value

Holding Investment

213,717 1,491 121

0.03 0.00

2,673

0.04

4,013

0.07

75,181

134,499 9,889 7,669

5,899

0.09

9,285 44,044

0.15 0.69

292,542 85,560 507,109

10,998

0.17

13,055

0.21

46,689

0.01

58,694 8,154

316

0.00

22,075

165

0.00

3,281

0.05

407

7,611

8,746

0.12

0.14

20,776

58,570 12,762 97,124 16,214 371,870

15,510

0.24 45,540

1,323

85 61,497

0.02

0.00 0.96

234,366

446,407 327,776 525,295

1,224

0.02

Fair value $'000

503,047

Republic of South Korea (cont) Agriculturre KT&G Corp Com KRW 5000.00 Airlines Korean Air Lines Co Ltd Com KRW 5000.00 Auto parts Hyundai Mobis Com KRW 5000.00 Hyundai Wia Corp Com KRW 5000.00 Mando Corp Com KRW 5000.00 Automobiles Hyundai Motor Co Com KRW 5000.00 Hyundai Motor Co Pref KRW 5000.00 Kia Motors Corp Com KRW 5000.00 Biotechnology Celltrion Inc Com KRW 500.00 Broadline retailers E-Mart Co Ltd Com KRW 5000.00 Hyundai Department Store Co Ltd Com KRW 5000.00 Lotte Shopping Co Ltd Com KRW 5000.00 Shinsegae Co Ltd Com KRW 5000.00 Commodity chemicals Hanwha Chem Corp Com KRW 5000.00 Honam Petrochemical Corp Com KRW 5000.00 LG Chem Ltd Com KRW 5000.00 OCI Co Ltd Com KRW 5000.00 Computer hardwarre LG Display Co Ltd Com KRW 5000.00 Computer services SK C&C Co Ltd Com KRW 200.00 Consumer electronics LG Electronics Inc Com KRW 5000.00 Diversified financial services Daewoo Securities Co Ltd Com KRW 5000.00 Hana Financial Group Inc Com KRW 5000.00 Hyundai Securities Co Ltd Com KRW 5000.00 KB Financial Group Inc Com KRW 5000.00

% of net asset value

13,965

0.22

3,548

0.06

34,204

0.53

1,220 1,148

0.02 0.02

56,352

0.88

4,849

0.07

32,048

0.50

1,461

0.02

14,165

0.22

1,217

0.02

7,439

0.12

4,866

0.07

1,461

0.02

4,033 34,596 3,891

0.07 0.54 0.06

9,839

0.15

5,088

0.08

17,870

0.28

5,547

0.09

11,559

0.18

5,165

0.08

18,526

0.29

iShares plc Annual Report 305

As at 29 February 2012

Holding Investment

215,099 546,564 53,440 309,295

6,343

85,174 26,554 129,307

699,860

189,135 85,117

9,800

102,749 118,464

234,630 38,574 4,474 2,243 91,674 251,011

55,368 172,467

Republic off South Korea (cont) Diversified financial services (cont) Samsung Securities Co Ltd Com KRW 5000.00 Shinhan Financial Group Co Ltd Com KRW 5000.00 Woori Finance Holdings Co Ltd Com KRW 5000.00 Woori Investment & Securities Co Ltd Com KRW 5000.00 Diversified industrials Doosan Heavy Industries & Construction Co Ltd Com KRW 5000.00 LG Corp Com KRW 5000.00 Electrical components & equipm ment LG Innotek Co Ltd Com KRW 5000.00 Samsung Electro-Mechanics Co Ltd Com KRW 5000.00 Electricity Korea Electric Power Corp Com KRW 5000.00 Electronic equipment Samsung Electronics Co Ltd Com KRW 5000.00 Samsung SDI Co Ltd Com KRW 5000.00 Environmental control Woongjin Coway Co Ltd Com KRW 500.00 Exploration & production S-Oil Corp Com KRW 2500.00 SK Innovation Co Ltd Com KRW 5000.00 Fixed line telecommunications KT Corp Com KRW 5000.00 KT Corp ADR NPV Food products CJ CheilJedang Corp Com KRW 5000.00 Orion Corp Com KRW 5000.00 Heavy construction Daelim Industrial Co Ltd Com KRW 5000.00 Daewoo Engineering & Construction Co Ltd Com KRW 5000.00 GS Engineering & Construction Corp Com KRW 5000.00 Hyundai Development Co Com KRW 5000.00

Fair value $'000

% of net asset value

Holding Investment

105,704 11,709

0.18

21,130

0.33

310,954

585

0.01

53,270

3,884

0.06 45,743 133,852

400 5,322

0.01 0.08

2,274

0.03

10,830

0.17

100,679

16,728 93,716 5,940

15,671

0.24 281,910

203,721 10,500

3.18 0.16

77,844 22,005

328

0.01

11,526

0.18

19,643

0.31

6,827 567

0.11 0.01

419,470

48,880 5,873

757,385 1,286 1,421

10,325

0.02 0.02

0.16

15,890 72,365

2,365 8,969

2,378

0.04

4,786

0.07

3,808

0.06

2,285

4,820 306 iShares plc Annual Report

Republic of South Korea (cont) Heavy construction (cont) Hyundai Engineering & Construction Co Ltd Com KRW 5000.00 Samsung C&T Corp Com KRW 5000.00 Samsung Engineering Co Ltd Com KRW 5000.00 Industrial metals & mining Hyundai Steel Co Com KRW 5000.00 POSCO Com KRW 5000.00 Industrial suppliers Daewoo International Corp Com KRW 5000.00 Internet NCSoft Corp Com KRW 500.00 NHN Corp Com KRW 500.00 Machinery, construction & mining Doosan Infracore Co Ltd Com KRW 5000.00 Marine transportation n Daewoo Shipbuilding & Marine Engineering Co Ltd Com KRW 5000.00 Hyundai Heavy Industries Co Ltd Com KRW 5000.00 Hyundai Mipo Dockyard Com KRW 5000.00 Samsung Heavy Industries Co Ltd Com KRW 5000.00 Miscellaneous manufacturers Cheil Industries Inc Com KRW 5000.00 Korea Kumho Petrochemical Com KRW 5000.00 Mobile telecommunications SK Telecom Co Ltd ADR NPV Oil & gas GS Holdings Com KRW 5000.00 SK Holdings Co Ltd Com KRW 5000.00 Personal products Amorepacific Corp Com KRW 5000.00 LG Household & Health Care Ltd Com KRW 5000.00 Platinum & precious metals Korea Zinc Co Ltd Com KRW 5000.00 Property & casualty insurance Hyundai Marine & Fire Insurance Co Ltd Com KRW 500.00

Fair value $'000

% of net asset value

7,994

0.13

21,402

0.33

11,261

0.18

4,682 49,773

0.07 0.78

3,163

0.05

4,134 19,477

0.07 0.30

120

0.00

9,059

0.14

23,589

0.37

3,069

0.05

15,279

0.24

4,173

0.07

821

0.01

10,937

0.17

918

0.02

10,964

0.17

2,156

0.03

4,113

0.07

895

0.01

139

0.00

www.iShares.com

As at 29 February 2012

Holding Investment

95,928

402,250

649,170 43,631 70,604

6,580 83,110

2,720,529

3,918,951 447,222 218,544 586,199 327,554 8,938,079 884,942 940,652 2,403,621 222,200 822,582 964,899 242,708 345,359 201,295 570,354 59,220 www.iShares.com

Republic of South Korea (cont) Property & casualty insurance (cont) Samsung Fire & Marine Insurance Co Ltd Com KRW 500.00 Recreational services Kangwon Land Inc Com KRW 500.00 Semiconductors Hynix Semiconductor Inc Com KRW 5000.00 Samsung Electronics Co Ltd Pref KRW 5000.00 Samsung Techwin Co Ltd Com KRW 5000.00 Transportation services Glovis Co Ltd Com KRW 500.00 Tyres Hankook Tire Co Ltd Com KRW 500.00 Total Republic of South Korea Russian Federation Alternative energy Federal Hydrogenerating Co JSC ADR NPV Banks Sberbank of Russia ADR NPV VTB Bank OJSC GDR NPV Food retailerrs and wholesalers Magnit OJSC GDR NPV Industrial metals & mining Mechel ADR NPV Novolipetsk Steel OJSC GDR NPV Integrated oil & gas Gazprom OAO ADR NPV Lukoil OAO ADR RUB 0.03 Rosneft Oil Co GDR NPV Surgutneftegas OJSC ADR NPV Metal fabricate/ hardware TMK OAO GDR NPV Mining MMC Norilsk Nickel OJSC ADR NPV Mobile telecommunications Mobile Telesystems OJSC ADR NPV Rostelecom OJSC ADR NPV Sistema JSFC GDR NPV Oil & gas NovaTek OAO GDR NPV Tatneft ADR NPV Real estate LSR Group GDR RUB 0.25

Fair value $'000

% of net asset value

18,050

0.28

9,259

0.14

17,524

0.27

27,340

0.43

4,039

0.06

1,088

0.02

3,180 932,800

0.05 14.56

Holding Investment Russian Federation (cont) Specialty chemicals 351,939 Uralkali OJSC GDR NPV Total Russian Federation

1,137,277 70,996

6,747,206 622,669 2,491,374

764,611 433,664 3,962,503

11,220

0.18

1,010,063

53,768 2,261

0.84 0.03

1,096,435

6,434

0.10

6,507 7,842

0.10 0.12

118,430 56,769 7,276 25,478

1.85 0.89 0.11 0.40

3,204

0.05

16,295

0.25

17,590 7,254 7,498

0.28 0.11 0.12

2,655,747

984,128 624,159

674,499 51,408 376,773 1,507,623 2,248,540

29,208 22,797

0.46 0.35

313

0.01

535,299 1,059,015 895,164

South Africa Apparel retailers Foschini Ltd Com ZAR 0.013 Truworths International Ltd Com ZAR 0.00015 Banks FirstRand Ltd Com ZAR 0.01 Nedbank Group Ltd Com ZAR 1.00 Standard Bank Group Ltd Com ZAR 0.10 Broadcasting & entertainment Naspers Ltd Com ZAR 0.02 Broadline retailers Massmart Holdings Ltd Com ZAR 0.01 Woolworths Holdings Ltd Com ZAR 0.0015 Building & co onstruction materials Pretoria Portland Cement Co Ltd Com ZAR 0.10 Chemicals Sasol Ltd Com NPV Diversified financial services African Bank Investments Ltd Com ZAR 0.03 Diversifiied industrials Bidvest Group Ltd Com ZAR 0.05 Imperial Holdings Ltd Com ZAR 0.04 Fixed line telecommunications Telkom SA Ltd Com ZAR 10.00 Food retailers and wholesalers Spar Group Ltd Com ZAR 0.0006 Tiger Brands Ltd Com ZAR 0.10 Forest products & paper Sappi Ltd Com ZAR 1.00 Furnishings Steinhoff International Holdings Ltd Com ZAR 0.005 General mining AngloGold Ashanti Ltd Com ZAR 0.25 Gold Fields Ltd Com ZAR 0.50 Harmony Gold Mining Co Ltd Com ZAR 0.50

Fair value $'000

% of net asset value

14,306 414,450

0.22 6.47

17,955

0.28

767

0.01

21,645 13,423

0.34 0.21

36,948

0.57

42,769

0.67

10,216

0.16

23,998

0.37

4,245

0.07

58,845

0.92

13,995

0.22

23,224

0.36

12,315

0.19

2,336

0.04

795 13,164

0.01 0.21

5,300

0.08

8,088

0.13

23,373 16,887

0.36 0.26

11,895

0.19

iShares plc Annual Report 307

As at 29 February 2012

Holding Investment

607,768

6,132,663 3,307,880 656,243 166,661 1,066,373

South Africa (cont) Industrial metals & mining ArcelorMittal South Africa Ltd Com NPV Insurance Sanlam Ltd Com ZAR 0.01 Mobile telecommunications MTN Group Ltd Com ZAR 0.0001 Vodacom Group Ltd Com ZAR 0.01 Platinum & precious metals Anglo American Platinum Ltd Com ZAR 0.10 Impala Platinum Holdings Ltd Com ZAR 0.03 Total South Africa

Fair value $'000

5,311

% of net asset value

0.08

Holding Investment

22,289,414 14,967,350

25,386

0.40 16,804,203

60,073 9,117

0.94 0.14

14,247,700 15,167,272

13,245

0.21

23,903 499,218

0.37 7.79

21,770,720 17,428,280 13,579,144

10,158,868

14,912,480

6,191,419

7,561,561 9,419,369 11,400,629

6,147,352 1,182,480 17,166,939 9,323,560 11,583,163 2,415,879 3,918,616 729,078 6,572,789

20,087,136

Taiwan Apparel retailers Far Eastern New Century Corp Com TWD 10.00 Banks Chang Hwa Commercial Bank Com TWD 10.00 Building materials and fixtures Taiwan Cement Corp Com TWD 10.00 Commodity chemicals Formosa Chemicals & Fibre Corp Com TWD 10.00 Formosa Plastics Corp Com TWD 10.00 Nan Ya Plastics Corp Com TWD 10.00 Computer hardware Acer Inc Com TWD 10.00 Asustek Computer Inc Com TWD 10.00 AU Optronics Corp Com TWD 10.00 Chimei Innolux Corp Com TWD 10.00 Compal Electronics Inc Com TWD 10.00 Foxconn Technology Co Ltd Com TWD 10.00 Lite-On Technology Corp Com TWD 10.00 Phison Electronics Corp Com TWD 10.00 Quanta Computer Inc Com TWD 10.00 Diversified financial services China Development Financial Holding Corp Com TWD 10.00

308 iShares plc Annual Report

15,715,485 13,029

0.20 3,892,057

9,131

0.14

16,995,711

7,940

0.12

3,023,097 4,083,100

23,640

0.37

29,415

0.46

27,846

0.43

9,400

0.15

11,103

0.17

7,282,740

4,658,614 1,429,197

13,353,488 16,648,729

9,286

0.15

5,011

0.08

13,673

0.21

11,136

0.18

5,319

0.08

531,950

5,791

0.09

6,376,720

16,255

0.25

25,585,826 139,773

809,000 6,799

Taiwan (cont) Diversified financial services (cont) Chinatrust Financial Holding Co Ltd Com TWD 10.00 E.Sun Financial Holding Co Ltd Com TWD 10.00 First Financial Holding Co Ltd Com TWD 10.00 Fubon Financial Holding Co Ltd Com TWD 10.00 Hua Nan Financial Holdings Co Ltd Com TWD 10.00 Mega Financial Holding Co Ltd Com TWD 10.00 SinoPac Financial Holdings Co Ltd Com TWD 10.00 Taishin Financial Holding Co Ltd Com TWD 10.00 Yuanta Financial Holding Co Ltd Com TWD 10.00 Electronics Delta Electronics Inc Com TWD 10.00 Hon Hai Precision Industry Co Ltd Com TWD 10.00 Pegatron Corp Com TWD 10.00 Wintek Corp Com TWD 10.00 Food products Uni-President Enterprises Corp Com TWD 10.00 Footwear Pou Chen Corp Com TWD 10.00 Industrial machinery Catcher Technology Co Ltd Com TWD 10.00 Insurance Cathay Financial Holding Co Ltd Com TWD 10.00 Shin Kong Financial Holding Co Ltd Com TWD 10.00 Iron & steel China Steel Corp Com TWD 10.00 Miscellaneous manufacturers Largan Precision Co Ltd Com TWD 10.00 Mobile teleccommunications Chunghwa Telecom Co Ltd ADR NPV Taiwan Mobile Co Ltd Com TWD 10.00 Real estate investment & services Farglory Land Development Co Ltd Com TWD 10.00

Fair value $'000

% of net asset value

15,127

0.24

8,172

0.13

10,747

0.17

16,721

0.26

9,004

0.14

16,923

0.26

6,492

0.10

5,543

0.09

9,249

0.14

10,685

0.17

58,973 4,108 3,604

0.92 0.06 0.06

11,149

0.17

4,128

0.07

10,453

0.16

15,695

0.24

5,635

0.09

26,503

0.41

3,133

0.05

16,182

0.25

19,567

0.31

1,720

0.03

0.11 www.iShares.com

As at 29 February 2012

Holding Investment

97,311

14,115,166 1,631,849 6,889,541 44,184,038

28,910,154

1,351,109

2,440,900 3,109,100 293,700

9,690,300 778,700 3,606,755 793,800

736,100 2,804,700 1,517,100 1,978,700

1,817,600

1,317,400

Fair value $'000

Taiwan (contt) Real estate investment & services (cont) Ruentex Development Co Ltd Com TWD 10.00 130 Semiconductors Advanced Semiconductor Engineering Inc Com TWD 10.00 13,805 MediaTek Inc Com TWD 10.00 16,709 Siliconware Precision Industries Co Com TWD 10.00 8,098 Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 121,898 United Microelectronics Corp Com TWD 10.00 15,195 Telecommunications HTC Corp Com TWD 10.00 30,381 Total Taiwan 700,503 Thailand Banks Bangkok Bank PCL Com THB 10.00 Kasikornbank PCL Com THB 10.00 Siam Commercial Bank PCL Com THB 10.00 Broadcasting & entertainment BEC World PCL Com THB 1.00 Building materials and fixtures Siam Cement PCL Com THB 1.00 Chemicals Indorama Ventures PCL Com THB 1.00 PTT Global Chemical PCL Com THB 10.00 Coal Banpu PCL Com THB 10.00 Exploration & production PTT Exploration & Production PCL Com THB 1.00 PTT PCL Com THB 10.00 Food products Charoen Pokphand Foods PCL Com THB 1.00 Mobile telecommunications Advanced Info Service PCL Com THB 1.00 Retail CP ALL PCL Com THB 1.00 Total Thailand

% of net asset value

0.00

Holding Investment

2,867,828 5,057,676 2,462,441

0.21 0.26

739,704

0.13 35,414 1.90 0.24

932,469

0.48 10.93

3,043,704

1,162,764

15,485 15,152

0.24 0.24

261,401

1,257

0.02

1,701,659

14,088

0.22

10,755

0.17

4,767

0.07

1,947

0.03

15,712

0.25

17,051 18,146

0.27 0.28

2,354

0.04

9,579

0.15

2,884 129,177

0.04 2.02

1,575,066

Turkey Banks Akbank TAS Com TRY 1.00 Turkiye Garanti Bankasi AS Com TRY 1.00 Turkiye Is Bankasi Com TRY 1.00 Beverages Anadolu Efes Biracilik Ve Malt Sanayii AS Com TRY 1.00 Food retailers and wholesalers BIM Birlesik Magazalar AS Com TRY 1.00 Home furnishings Arcelik AS Com TRY 1.00 Iron & steel Eregli Demir ve Celik Fabrikalari TAS Com TRY 1.00 Mobile telecommunications Turkcell Iletisim Hizmetleri AS Com TRY 1.00 Oil & gas Tupras Turkiye Petrol Rafinerileri AS Com TRY 1.00 Specialty finance Haci Omer Sabanci Holding AS Com TRY 1.00 KOC Holding AS Com TRY 1.00 Total Turkey

United States Mining 581,884 Southern Copper Corp Com USD 0.01 Total United States Total equities

% of net asset value

11,498

0.18

19,235 5,853

0.30 0.09

11,185

0.17

1,247

0.02

4,283

0.07

7,148

0.11

6,393

0.10

6,453

0.10

7,368 6,568 87,231

0.12 0.10 1.36

18,702 18,702

0.29 0.29

6,390,52 28

99.73

Financial Derivative Instruments Futures contracts No. of contracts 99 MSCI Emerging Market EMINI Future March 2012 Total unrealised gains on futures contracts Total value of investments Cash†

www.iShares.com

Fair value $'000

Unrealised % of net gain asset $'000 value 555

0.01

555

0.01

6,391,083

99.74

2,617

0.04

iShares plc Annual Report 309

As at 29 February 2012

Holding Investment Other net assets Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

Fair value $'000

% of net asset value

2,934

0.05

6,396,634

99.83

10,631

0.17

6,407,265 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company other than $310,993 held as security by the counterparty for futures contracts.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

310 iShares plc Annual Report

Fair value $'000

% of total current assets

6,390,528

99.62

555 23,632 6,414,715

0.01 0.37 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest purchases

The 20 largest sales Holding Investments 69,041 Samsung Electronics Co Ltd Com KRW 5000.00 3,047,541 Gazprom OAO ADR NPV 1,186,100 Cia de Bebidas das Americas Pref NPV 1,254,400 Vale SA Pref NPV 2,404,700 Petroleo Brasileiro SA Pref NPV 1,549,000 Itau Unibanco Holding SA Pref NPV 2,958,000 China Mobile Ltd Com HKD 0.10 11,832,000 Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 20,465,300 America Movil SAB de CV Com NPV 1,281,841 MMC Norilsk Nickel OJSC ADR NPV 829,700 Vale SA Com NPV 121,665 Hyundai Motor Co Com KRW 5000.00 433,256 Sasol Ltd Com NPV 1,436,400 Petroleo Brasileiro SA Com NPV 1,101,600 Banco Bradesco SA Pref NPV 317,746 Infosys Ltd ADR NPV 57,388 Hyundai Mobis Com KRW 5000.00 8,963,000 CNOOC Ltd Com HKD 0.02 486,333 Larsen & Toubro Ltd GDR NPV 412,184 ICICI Bank Ltd ADR NPV

Proceedss $‘000 52,665 35,906 34,472 30,509 30,119 28,765 28,567 27,519 27,068 26,650 23,426 23,413 20,744 19,885 18,535 17,350 17,229 16,667 16,449 16,364

Holding 55,295 2,669,860 12,464,000 2,115,100 3,114,500 1,081,600 1,334,400 18,221,000 1,461,400 1,747,434 1,160,400 26,078,000 9,024,000 27,287,000 687,400 327,347 531,927 86,697 995,400 935,644

Investments Samsung Electronics Co Ltd Com KRW 5000.00 Gazprom OAO ADR NPV Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 Petroleo Brasileiro SA Pref NPV China Mobile Ltd Com HKD 0.10 Vale SA Pref NPV Itau Unibanco Holding SA Pref NPV America Movil SAB de CV Com NPV Petroleo Brasileiro SA Com NPV Sterlite Industries India Ltd ADR NPV Banco Bradesco SA Pref NPV China Construction Bank Corp Com CNY 1.00 CNOOC Ltd Com HKD 0.02 Industrial & Commercial Bank of China Com CNY 1.00 Vale SA Com NPV Infosys Ltd ADR NPV Dr Reddy's Laboratories Ltd ADR NPV Hyundai Motor Co Com KRW 5000.00 BRF - Brasil Foods SA Com NPV MTN Group Ltd Com ZAR 0.01

Cost $‘000 48,196 37,628 31,945 30,978 29,947 28,835 28,732 27,261 23,514 21,865 21,844 21,143 20,222 20,117 19,858 19,759 18,324 18,287 18,284 18,196

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 311

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Operating income

2

21,081

5,541

Net (losses)/gains on financial assets at fair value through profit or loss

3

(92,396)

79,797

(71,315)

85,338

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(2,245)

(1,605)

(73,560)

83,733

Finance costs: Distributions to redeemable participating shareholders

6

(18,463)

(6,483)

Interest expense

7

(4)

(2)

Total finance costs

(18,467)

(6,485)

Net (loss)/profit for the financial year/period before tax

(92,027)

77,248

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(395)

(431)

(92,422)

76,817

(23)

(292)

(92,445)

76,525

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 €’000

Period ended 28 February 2011* €’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

661,420

482,898

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(92,445)

76,525

Share transactions: Proceeds from issue of redeemable participating shares

134,829

106,066

(193,699)

(4,069)

(Decrease)/increase in net assets resulting from share transactions

(58,870)

101,997

Net assets attributable to redeemable participating shareholders at the end of the year/period

510,105

661,420

Payments on redemption of redeemable participating shares

* For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

312 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notes

29 February 2012 €’000

28 February 2011 €’000

7

1,180

390

-

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

4,342

14,074

Financial assets at fair value through profit or loss

12

508,924

660,740

513,663

675,994

(1,052)

(1)

(276)

-

Total current assets CURRENT LIABILITIES Bank overdraft Margin cash account Payables

13

(1,115)

(13,581)

Distributions to redeemable participating shareholders payable

6

(1,341)

(1,241)

(3,784)

(14,823)

509,879

661,171

226

249

510,105

661,420

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus

8

Net asset value attributable to redeemable participating shareholders at the end of the year/period The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 313

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 €’000 18 20,056 1,007 21,081

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 €’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net losses on futures contracts Net gains on currency

4.

Period from 12 June 2010 to 28 February 2011 €’000

(90,914) (1,492) 10 (92,396)

79,794 3 79,797

Year ended 29 February 2012 €’000 (2,245) (2,245)

Period from 12 June 2010 to 28 February 2011 €’000 (1,605) (1,605)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 €’000 9 5,263 269 5,541

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 €’000 4,508 1,016 1,241 6,765 (312) 30 6,483

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate. Bank interest

314 iShares plc Annual Report

Year ended 29 February 2012 €’000 9,379 6,185 1,407 1,341 18,312 (1,082) 1,233 18,463

Year Period from ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 (4) (2) (4) (2)

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 €’000 €’000 249 541

(23)

(292)

(23) 226

(292) 249

Further details are set out in the accounting policies note k) on page 30. 9.

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 are classified as financial liabilities.

11. RECEIVABLES

Sale of securities awaiting settlement Dividend income receivable Securities lending income receivable Dividend tax reclaim receivable Distributions payable held with Registrar*

29 February 2012 No. of Shares

28 February 2011 No. of Shares

29,000,000 6,400,000 (10,200,000) 25,200,000

24,200,000 5,000,000 (200,000) 29,000,000

No. of Shares 25,200,000 29,000,000 24,200.000 €’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

29 February 2012 €’000

28 February 2011 €’000

1,430 501

13,090 517

10 1,060

29 438

1,341 4,342

14,074

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Investment in rights Unrealised gains on futures contracts

510,105 661,420 482,898

29 February 2012 €’000 508,923 -

28 February 2011 €’000 660,725 15

1 508,924

660,740

29 February 2012 €’000

28 February 2011 €’000

(954) (161) (1,115)

(13,378) (203) (13,581)

13. PAYABLES

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

€20.24 €22.81 €19.95

* Further details are set out on note 11 page 65.

SHARE CAPITAL

Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

Purchase of securities awaiting settlement Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements.

iShares plc Annual Report 315

For the year ended 29 February 2012 15. RELATED PARTIES The related parties are set out on pages 66 and 67. 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 €’000

28 February 2011 €’000

1,007

269

30,693

42,401

33,931

46,726

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

316 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value €'000

% of net asset value

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

29,262 7,563

10,544 51,423 5,944

25,331 17,000 68,387 145,457

24,933 123,502

9,173 5,984 11,719 15,722 342,458 17,640 4,642 15,609 12,485

www.iShares.com

Equities Austria Banks Erste Group Bank AG Com NPV Raiffeisen Bank International AG Com NPV Electtricity Verbund AG Com NPV Fixed line telecommunications Telekom Austria AG Com NPV Insurance Vienna Insurance Group AG Wiener Versicherung Gruppe Com NPV Integrated oil & gas OMV AG Com NPV Iron & steel Voestalpine AG Com NPV Real estate investment & services Immoeast AG Com NPV* Immofinanz AG Com NPV Total Austria Belgium Banks KBC Groep NV Com NPV Beverages Anheuser-Busch InBev NV Com NPV Chemicals Solvay SA Com NPV Diversified industrials NV Bekaert SA Com NPV Food retailers and wholesalers Colruyt SA Com NPV Delhaize Group SA Com NPV Insurance Ageas Com NPV Mining Umicore SA Com NPV Mobile telecommunications Mobistar SA Com NPV Pharmaceuticals UCB SA Com NPV Specialty finance Groupe Bruxelles Lambert SA Com NPV

552

0.11

206

0.04

223

0.04

447

0.09

198

0.04

712

0.14

456

0.09

384 3,178

0.00 0.07 0.62

Holding Investment Belgium (cont) Telecommunications 23,546 Belgacom SA Com NPV Total Belgium Bermuda Oil & gas 50,816 Seadrill Ltd Com USD 2.00 Total Bermuda

31,536

100,946 16,557 35,791 3,523 3,610

3,769 442

0.09 85

6,222

1.22

847

0.17

150

0.03

344 648

0.07 0.12

546

0.11

688

0.13

169

0.03

473

0.09

704

0.14

204

65,418 76,215 28,620

17,031 21,662 68,749 10,355

Denmark Alternative energy Vestas Wind Systems A/S Com DKK 1.00 Banks Danske Bank A/S Com DKK 10.00 Beverages Carlsberg A/S Com DKK 20.00 Biotechnology Novozymes A/S Com DKK 2.00 Healthcare products Coloplast A/S Class 'B' Com DKK 5.00 William Demant Holding A/S Com DKK 1.00 Insurance Tryg A/S Com DKK 25.00 Marine transportation AP Moeller - Maersk A/S Class 'A' Com DKK 1000.00 AP Moeller - Maersk A/S Class 'B' Com DKK 1000.00 Pharmaceuticals Novo Nordisk A/S Com DKK 1.00 Telecommunications TDC A/S Com DKK 1.00 Transportation DSV A/S Com DKK 1.00 Total Denmark Finland Auto parts & equipment Nokian Renkaat Oyj Com NPV Banks Pohjola Bank Plc Com NPV Electricity Fortum Oyj Com EUR 3.40 Food retailers and wholesalers Kesko Oyj Class 'B' Com NPV

Fair value €'000

% of net asset value

571 11,804

0.11 2.31

1,584 1,584

0.31 0.31

243

0.05

1,359

0.26

974

0.19

799

0.16

434

0.08

251

0.05

152

0.03

491

0.10

1,233

0.24

6,881

1.35

453

0.09

500 13,770

0.10 2.70

567

0.11

188

0.04

1,279

0.25

261

0.05

iShares plc Annual Report 317

As at 29 February 2012

Holding Investment

90,051 81,440 24,096 19,780 25,953 20,180 12,823 14,599 65,024 21,883 575,794

10,403 22,185 25,822 8,436 27,797

23,550 29,754 148,637 155,411 144,062 101,848

30,667 192,598 62,036 5,252 31,030

Finland (cont) Forest products & paper Stora Enso Oyj Com NPV UPM-Kymmene Oyj Com NPV Industrial machinery Kone Oyj Com NPV Metso Oyj Com NPV Wartsila Oyj Abp Com NPV Integrated oil & gas Neste Oil Oyj Com NPV Media Sanoma Oyj Com NPV Pharmaceuticals Orion Oyj Class 'B' Com EUR 0.65 Property & casualty insurance Sampo Oyj Com NPV Telecommunications Elisa Oyj Com NPV Nokia Oyj Com NPV Total Finland France Advertising JCDecaux SA Com NPV Publicis Groupe SA Com EUR 0.40 Aerospace Safran SA Com EUR 0.20 Apparel retailers Christian Dior SA Com EUR 2.00 Auto parts & equipment Cie Generale des Etablissements Michelin Com EUR 2.00 Automobiles Peugeot SA Com EUR 1.00 Renault SA Com EUR 3.81 Banks BNP Paribas SA Com EUR 2.00 Credit Agricole SA Com EUR 3.00 Natixis Com EUR 1.60 Societe Generale SA Com EUR 1.25 Beverages Pernod-Ricard SA Com EUR 1.55 Broadcasting & entertainment Vivendi SA Com EUR 5.50 Building materials and fixtures Cie de St-Gobain Com EUR 4.00 Imerys SA Com EUR 2.00 Lafarge SA Com EUR 4.00

318 iShares plc Annual Report

Fair value €'000

% of net asset value

Holding Investment

507 842

0.10 0.16

43,650 8,564

1,074 703 670

0.21 0.14 0.13

8,455 24,471 14,598

187

0.04

7,653 22,907

126

0.02

236

0.05

1,374

0.27

34,663 75,303

373 2,269 10,656

0.07 0.45 2.09

37,470 190,546

15,667

5,102 217 909

0.04 0.18

650

0.13

5,365 29,129 6,275 69,704

981

0.19

285,225

1,439

0.28

89,365 89,834

354 1,181

0.07 0.23

8,563

5,445 747 391

1.07 0.15 0.08

31,124

2,469

0.48

2,382

0.47

22,823

3,104

0.61

2,211 238 1,083

0.43 0.05 0.21

267,590 22,989 26,835

39,044

326,536

France (cont) Chemicals Air Liquide SA Com EUR 5.50 Arkema SA Com EUR 10.00 Commercial services Bureau Veritas SA Com EUR 0.12 Edenred Com EUR 2.00 Sodexo Com EUR 4.00 Computer services AtoS Com EUR 1.00 Cap Gemini SA Com EUR 8.00 Defence Thales SA Com EUR 3.00 Electrical components & equipment Legrand SA Com EUR 4.00 Schneider Electric SA Com EUR 4.00 Electricity EDF SA Com EUR 0.50 GDF Suez Com EUR 1.00 Electronic office equipment Neopost SA Com EUR 1.00 Engineering & construction Aeroports de Paris Com EUR 3.00 Bouygues SA Com EUR 1.00 Eiffage SA Com EUR 4.00 Vinci SA Com EUR 2.50 Fixed line telecommunications France Telecom SA Com EUR 4.00 Food Carrefour SA Com EUR 2.50 Danone Com EUR 0.25 Food retailers and wholesalers Casino Guichard Perrachon SA Com EUR 1.53 Healthcare products Cie Generale d'Optique Essilor International SA Com EUR 0.18 Holding companies - diversified operations LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 Hotels Accor SA Com EUR 3.00 Insurance AXA SA Com EUR 2.29 CNP Assurances Com EUR 1.00 SCOR SE Com EUR 7.88 Integrated oil & gas Total SA Com EUR 2.50

Fair value €'000

% of net asset value

4,257 589

0.83 0.12

523 490 842

0.10 0.10 0.16

327 756

0.06 0.15

424

0.08

942

0.19

3,841

0.75

701 3,709

0.14 0.72

266

0.05

318 695 187 2,724

0.06 0.14 0.04 0.53

3,266

0.64

1,707 4,561

0.34 0.89

626

0.12

1,860

0.36

5,004

0.98

603

0.12

3,239 248 533

0.64 0.05 0.10

13,711

2.69

www.iShares.com

As at 29 February 2012

Holding Investment

2,968 31,899 18,264 18,164

17,549 4,506 22,329 15,355 36,980 174,973 4,247 3,390 3,607 16,141 14,200

11,780 9,016

4,890 5,083 20,334

359,130 83,670

43,514 56,575

www.iShares.com

France (cont) Internet Iliad SA Com NPV Machinery — diversified Alstom SA Com EUR 7.00 Media Lagardere SCA Com EUR 6.10 Societe Television Francaise 1 Com EUR 0.20 Metal products Vallourec SA Com EUR 2.00 Nondurable household products Societe BIC SA Com EUR 3.82 Oil equipment & services Cie Generale de Geophysique Veritas Com EUR 0.40 Technip SA Com EUR 0.76 Personal products L'Oreal SA Com EUR 0.20 Pharmaceuticals Sanofi Com EUR 2.00 Real estate investment trusts Fonciere Des Regions Reits EUR 3.00 Gecina SA Reits EUR 7.50 ICADE Reits NPV Klepierre Reits EUR 1.40 Unibail-Rodamco SE Reits EUR 5.00 Retail PPR Com EUR 4.00 Software Dassault Systemes SA Com EUR 1.00 Specialty finance Eurazeo Com NPV Wendel SA Com EUR 4.00 Telecommuniications Eutelsat Communications SA Com EUR 1.00 Telecommunications equipment Alcatel-Lucent Com EUR 2.00 Transportation Groupe Eurotunnel SA Com EUR 0.40 Water Suez Environnement Co Com EUR 4.00 Veolia Environnement SA Com EUR 5.00 Total France

Fair value €'000

% of net asset value

Holding Investment

295

0.06

35,447

1,032

0.20

32,384

417

0.08

50,932

162

0.03

927

0.18

12,382 139,449 23,698

339

0.07

4,568 22,247

517 1,257

0.10 0.25

8,078

3,164

0.62

553,866 142,986

9,713

1.90 21,768

231 243 224 391

0.05 0.05 0.04 0.08

2,059

0.40

1,503

0.30

141,290 127,210 7,136 26,661 12,877 26,269 2,423 5,687

570

0.11

6,553

174 321

0.04 0.06

10,259 20,063

569

0.11

676

0.13

17,603

544

0.11

27,025

475

0.10

69,918 9,331

520 107,073

0.10 20.99

32,323

16,659

Germany Airlines Deutsche Lufthansa AG Com NPV Apparel retailers Adidas AG Com NPV Auto manufactturers Bayerische Motoren Werke AG Com EUR 1.00 Continental AG Com NPV Daimler AG Com NPV Porsche Automobil Holding SE Pref NPV Volkswagen AG Com NPV Volkswagen AG Pref NPV Automobiles Bayerische Motoren Werke AG Pref EUR 1.00 Banks Commerzbank AG Com NPV Deutsche Bank AG Com NPV Building materials and fixtures HeidelbergCement AG Com NPV Chemicals BASF SE Com NPV Bayer AG Com NPV Brenntag AG Com NPV K&S AG Com NPV Lanxess AG Com NPV Linde AG Com NPV Wacker Chemie AG Com NPV Engineering & construction Fraport AG Frankfurt Airport Services Worldwide Com NPV Hochtief AG Com NPV Food products Suedzucker AG Com NPV Food retailers and wh holesalers Metro AG Com NPV Health care providers Fresenius Medical Care AG & Co KGaA Com NPV Fresenius SE & Co KGaA Com NPV Holding companies - diversified operations GEA Group AG Com NPV Insurance Allianz SE Com NPV Hannover Rueckversicherung AG Com NPV Internet United Internet AG Com NPV

Fair value €'000

% of net asset value

369

0.07

1,906

0.37

3,521 849 6,328

0.69 0.17 1.24

1,158 579 3,120

0.23 0.11 0.61

358

0.07

1,041 5,012

0.21 0.98

878

0.17

9,302 7,045 627 995 725 3,274 180

1.82 1.38 0.12 0.20 0.14 0.64 0.04

263 342

0.05 0.07

223

0.04

596

0.12

1,700 1,369

0.33 0.27

686

0.14

6,341

1.24

389

0.08

241

0.05

iShares plc Annual Report 319

As at 29 February 2012

Holding Investment

30,176 6,044 59,725 9,815 6,127 13,932 12,009 126,570 432,090 277,035 80,937 44,038 15,610 13,165 10,003 27,702

168,202 141,543 130,995

147,980

28,371

34,569 38,022

Germany (cont) Investment services Deutsche Boerse AG Com NPV Iron & steel Salzgitter AG Com NPV ThyssenKrupp AG Com NPV Machinery — diversified MAN SE Com NPV Media Axel Springer AG Com EUR 1.00 Kabel Deutschland Holding AG Com NPV ProSiebenSat.1 Media AG Pref NPV Miscellaneous manufacturers Siemens AG Com NPV Mobile telecommunications Deutsche Telekom AG Com NPV Multiutilities E.ON AG Com NPV RWE AG Com NPV Nondurable household products Henkel AG & Co KGaA Pref NPV Personal products Beiersdorf AG Com NPV Pharmaceuticals Celesio AG Com NPV Merck KGaA Com NPV Reinsurance Muenchener Rueckversicherungs AG Com NPV Semiconductors Infineon Technologies AG Com NPV Software SAP AG Com NPV Transportation Deutsche Post AG Com NPV Total Germany Greece Banks National Bank of Greece SA Com EUR 5.00 Beverages Coca Cola Hellenic Bottling Co SA Com EUR 1.50 Entertainment OPAP SA Com EUR 0.30 Telecommunications Hellenic Telecommunications Organization SA Com EUR 2.39 Total Greece

320 iShares plc Annual Report

Fair value €'000

1,500

% of net asset value

0.30

Holding Investment

29,478

277 1,205

0.05 0.24

847

0.17

219

0.04

630 233

0.12 0.05

9,452

1.85

3,782

0.74

4,769 2,761

0.94 0.54

2,149

0.42

734

0.14

100,051 764,667

182 774

0.04 0.15

272,956 1,549,193

112,390

110,881 21,733

77,183

270,865

118,383

144,667 3,028

0.59

1,275

0.25

7,148

1.40

1,728 102,110

0.34 20.02

79,967 622,328 126,032

118,355 62,635 31,524

349

0.07

403

0.08

233

0.04

90 1,075

0.02 0.21

172,142 1,016,908 187,467

1,452,528 932,722

248,734

Ireland Airlines Ryanair Holdings Plc Com EUR 0.00635 Banks Irish Bank Resolution Corp Com EUR 0.16* Building materials and fixtures CRH Plc Com EUR 0.32 Food products Kerry Group Plc Class 'A' Com EUR 0.125 Pharmaceuticals Elan Corp Plc Com EUR 0.05 Total Ireland Italy Alternative energy Enel Green Power SpA Com EUR 0.20 Automobiles Fiat SpA Com EUR 3.50 Banks Banca Carige SpA Com NPV Banca Monte dei Paschi di Siena SpA Com NPV Banco Popolare SC Com NPV Intesa Sanpaolo SpA Com EUR 0.52 Intesa Sanpaolo SpA Com EUR 0.52 Mediobanca SpA Com EUR 0.50 UniCredit SpA Com NPV Unione di Banche Italiane SCPA Com EUR 2.50 Commercial vehicles & trucks Fiat Industrial SpA Com EUR 1.50 Defence Finmeccanica SpA Com EUR 4.40 Electrical components & eq quipment Prysmian SpA Com EUR 0.10 Electricity A2A SpA Com EUR 0.52 Enel SpA Com EUR 1.00 Terna Rete Elettrica Nazionale SpA Com EUR 0.22 Fixed line telecommunications Telecom Italia SpA Com EUR 0.55 Telecom Italia SpA Com EUR 0.55 Non-Voting Gas distribution Snam SpA Com EUR 1.00

Fair value €'000

% of net asset value

121

0.02

-

0.00

1,777

0.35

696

0.14

724 3,318

0.14 0.65

400

0.08

514

0.10

115

0.02

303 374

0.06 0.07

2,262

0.44

173 391 2,420

0.03 0.08 0.48

432

0.09

936

0.18

237

0.05

405

0.08

130 3,061

0.03 0.60

528

0.10

1,255

0.24

657

0.13

903

0.18

www.iShares.com

As at 29 February 2012

Holding Investment

18,061

9,935 179,532

369,689 109,695 40,982 17,979 48,776 37,313

46,385 131,996 73,090 43,556 11,816

63,327

17,833 40,127 35,853 23,867

Italy (cont) Healthcare products Luxottica Group SpA Com EUR 0.06 Holding companies - diversified operations Exor SpA Com EUR 1.00 Insurance Assicurazioni Generali SpA Com EUR 1.00 Integrated oil & gas ENI SpA Com EUR 1.00 Media Mediaset SpA Com EUR 0.52 Oil equipment & services Saipem SpA Com EUR 1.00 Retail Autogrill SpA Com EUR 0.52 Transportation services Atlantia SpA Com EUR 1.00 Tyres Pirelli & C SpA Com NPV Total Italy Luxembourg Broadcasting & entertainment SES SA Receipt NPV Industrial metals & mining ArcelorMittal Com NPV Metal fabricate/ hardware Tenaris SA Com USD 1.00 Oil & gas services Subsea 7 SA Com USD 2.00 Telecommunications Millicom International Cellular SA Receipt USD 1.50 Total Luxembourg Netherlands Aerospace European Aeronautic Defence and Space Co NV Com EUR 1.00 Beverages Heineken Holding NV Com EUR 1.60 Heineken NV Com EUR 1.60 Chemicals Akzo Nobel NV Com EUR 2.00 Koninklijke DSM NV Com EUR 1.50

Fair value €'000

% of net asset value

Holding Investment

18,515 486

0.09

184

0.04

2,169

0.42

6,396

1.25

228,224

244

0.05

179,833

1,555

0.30

250,590

136

0.03

36,185

610

0.12

290 27,566

0.06 5.40

266,015 15,853 589,191

155,131

10,932

839

0.16

2,089

0.41

1,066

0.21

786

0.15

995 5,775

0.20 1.13

10,883

106,469 46,799 10,716 26,511 9,290 66,311 98,640

54,538

1,727

0.34

597 1,586

0.12 0.31

28,968

1,525 997

0.30 0.19

25,482

151,255

144,111 www.iShares.com

Netherlands (cont) Commercial services Randstad Holding NV Com EUR 0.10 Electronics Koninklijke Philips Electronics NV Com EUR 0.20 Engineering & construcction Koninklijke Boskalis Westminster NV Com EUR 0.80 Fixed line telecommunications Koninklijke KPN NV Com EUR 0.24 Food retailers and wholesalers Koninklijke Ahold NV Com EUR 0.30 Unilever NV CVS EUR 0.16 Healthcare products Qiagen NV Com EUR 0.01 Insurance Aegon NV Com EUR 0.12 Delta Lloyd NV Com EUR 0.20 ING Groep NV CVS EUR 0.24 Marinee transportation Koninklijke Vopak NV Com EUR 0.50 Media Reed Elsevier NV Com EUR 0.07 Wolters Kluwer NV Com EUR 0.12 Oil equipment & services Fugro NV CVS EUR 0.05 SBM Offshore NV Com EUR 0.25 Real estate investment trusts Corio NV Reits EUR 10.00 Semiconductors ASML Holding NV Com EUR 0.09 STMicroelectronics NV Com EUR 1.04 Transportation TNT Express NV Com EUR 0.08 Total Netherlands Norway Banks DNB ASA Com NOK 10.00 Chemicals Yara International ASA Com NOK 1.70 Engineering & construction Aker Solutions ASA Com NOK 1.66 Industrial metals & mining Norsk Hydro ASA Com NOK 1.10

Fair value €'000

% of net asset value

526

0.10

2,443

0.48

314

0.06

1,856

0.36

1,867 6,247

0.37 1.22

417

0.08

1,045 221 3,922

0.21 0.04 0.77

455

0.09

985 654

0.19 0.13

591 361

0.12 0.07

335

0.07

2,288

0.45

552

0.11

510 32,021

0.10 6.28

1,455

0.29

1,068

0.21

332

0.06

651

0.13

iShares plc Annual Report 321

As at 29 February 2012

Holding Investment

30,985

171,675 119,441 112,157

Norway (cont) Insurance Gjensidige Forsikring ASA Com NOK 2.00 Integrated oil & gas Statoil ASA Com NOK 2.50 Miscellaneous manufacturers Orkla ASA Com NOK 1.25 Mobile telecommunications Telenor ASA Com NOK 6.00 Total Norway

Fair value €'000

% of net asset value

Holding Investment

60,240 278

0.05

3,692

0.72

15,238

746

0.15

590,608 16,746

1,558 9,780

0.31 1.92 56,767

112,493 31,699

295,405

34,087

35,811

104,075

Portugal Banks Banco Espirito Santo SA Com NPV Building materials and fixtures Cimpor Cimentos de Portugal SGPS SA Com EUR 1.00 Electricity EDP - Energias de Portugal SA Com EUR 1.00 Food retailers and wholesalers Jeronimo Martins SGPS SA Com EUR 1.00 Integrated oil & gas Galp Energia SGPS SA Com EUR 1.00 Telecommunications Portugal Telecom SGPS SA Com EUR 0.03 Total Portugal

631,875 185

0.04 89,489

161

0.03 27,716 53,542

647

0.13 3,936 21,920

471

0.09 7,899

469

0.09 119,567

404 2,337

0.08 0.46

122,014 15,702

143,583

34,220 33,543 717,194 223,687 151,811 1,321,701 134,080 32,974 116,847

Spain Airlines International Consolidated Airlines Group SA Com EUR 0.50 Alternative energy EDP Renovaveis SA Com EUR 5.00 Apparel retailers Inditex SA Com EUR 0.15 Banks Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 Banco de Sabadell SA Com EUR 0.125 Banco Popular Espanol SA Com EUR 0.10 Banco Santander SA Com EUR 0.50 Bankia SA Com NPV Bankinter SA Com EUR 0.30 CaixaBank Com EUR 1.00

322 iShares plc Annual Report

22,712 283

0.05

134

0.03

2,325

0.46

4,826

0.95

541

0.11

157,284

466

0.09

404,466 218,322

8,228 407 153 414

1.61 0.08 0.03 0.08

21,431 48,354

75,746 125,296

Spain (cont) Commercial services Abertis Infraestructuras SA Com EUR 3.00 Computer services Indra Sistemas SA Com EUR 0.20 Electricity Iberdrola SA Com EUR 0.75 Red Electrica Corp SA Com EUR 2.00 Engineering & construction Ferrovial SA Com EUR 0.20 Fixed line telecommunications Telefonica SA Com EUR 1.00 Food Distribuidora Internacional de Alimentacion SA Com EUR 0.01 Gas distribution Enagas SA Com EUR 1.50 Gas Natural SDG SA Com EUR 1.00 Heavy construction Acciona SA Com EUR 1.00 ACS Actividades de Construccion y Servicios SA Com EUR 0.50 Fomento de Construcciones y Contratas SA Com EUR 1.00 Insurance Mapfre SA Com EUR 0.10 Integrated oil & gas Repsol YPF SA Com EUR 1.00 Iron & steel Acerinox SA Com EUR 0.25 Machinery — diversified Zardoya Otis SA Com EUR 0.10 Pharmaceuticals Grifols SA Com EUR 0.50 Software Amadeus IT Holding SA Com EUR 0.01 Totall Spain Sweden Apparel retailers Hennes & Mauritz AB Com NPV Banks Nordea Bank AB Com NPV Skandinaviska Enskilda Banken AB Com NPV Svenska Handelsbanken AB Com NPV Swedbank AB Com NPV

Fair value €'000

% of net asset value

773

0.15

145

0.03

2,623

0.51

634

0.13

539

0.11

8,094

1.59

328

0.06

427 680

0.09 0.13

232

0.04

490

0.10

150

0.03

309

0.06

2,388

0.47

168

0.03

230

0.04

334

0.06

691 37,012

0.14 7.26

4,252

0.83

2,931

0.57

1,229

0.24

1,912 1,611

0.38 0.32

www.iShares.com

As at 29 February 2012

Holding Investment

48,472 49,527 214,497 39,247 8,185 89,348

155,088 30,979 61,894

37,194 65,390 3,108 24,218 103,242 60,395 7,477 48,623 60,414 42,333 52,264 34,469 18,516 31,827 70,496 29,568 49,071 463,265 www.iShares.com

Sweden (cont) Commercial services Securitas AB Com SEK 1.00 Commercial vehicles & trucks Scania AB Class 'B' Com NPV Volvo AB Com NPV Diversified industrials Hexagon AB Com SEK 2.00 Forest products & paper Holmen AB Class 'B' Com NPV Svenska Cellulosa AB Class 'B' Com NPV Hand & machine tools Sandvik AB Com NPV Healthcare products Getinge AB Class 'B' Com NPV Heavy construction Skanska AB Com NPV Household goods & home construction Electrolux AB Com NPV Husqvarna AB Class 'B' Com NPV Husqvarna AB Com NPV Iron & steel SSAB AB Com NPV Machinery, construction & mining Atlas Copco AB Com NPV Atlas Copco AB Class 'B' Com NPV Media Modern Times Group AB Com NPV Metal fabricate/ hardware Assa Abloy AB Com NPV SKF AB Com SEK 1.25 Mining Boliden AB Com SEK 2.11 Miscellaneous manufacturers Alfa Laval AB Com NPV Oil & gas Lundin Petroleum AB Com NPV Specialty finance Industrivarden AB Com NPV Investment AB Kinnevik Class 'B' Com NPV Investor AB Com NPV Ratos AB Com NPV Telecommunications Tele2 AB Class 'B' Com NPV Telecommunications equipment Telefonaktiebolaget LM Ericsson Com NPV

Fair value €'000

% of net asset value

Holding Investment Sweden (cont) Telecommunications equipment (cont) 335,103 TeliaSonera AB Com NPV Tobacco 32,966 Swedish Match AB Com NPV Total Sweden

351

0.07

747 2,354

0.15 0.46

593

0.12

178

0.03

175,513

1,199

0.24

31,982

1,783

0.35

559,850

665

0.13

7,773

849

0.17

6,046 37,978 313

614 296 14

0.12 0.06 0.00

191

0.04

2,026 1,052

0.40 0.20

275

1,283 14,552 20,508 846 2,068

0.05 337,207

1,109 1,149

0.22 0.22

557

0.11

808

0.16

605

0.12

210

0.04

545 1,180 288

0.11 0.23 0.05

751

0.15

3,500

0.69

30,421 13,082 280 139 17 507,642 7,520 3,337

7,607 1,209

Switzerland Banks Credit Suisse Group AG Com CHF 0.04 Julius Baer Group Ltd Com CHF 0.02 UBS AG Com CHF 0.10 Biotechnology Lonza Group AG Com CHF 1.00 Building materials and fixtures Geberit AG Com CHF 0.10 Holcim Ltd Com CHF 2.00 Sika AG Com CHF 0.60 Chemicals Givaudan SA Com CHF 10.00 Syngenta AG Com CHF 0.10 Commercial services Adecco SA Com CHF 1.00 SGS SA Com CHF 1.00 Diversified financial services Partners Group Holding AG Com CHF 0.01 Engineering & construction ABB Ltd Com CHF 1.03 Financial services GAM Holding AG Com CHF 0.05 Food products Aryzta AG Com CHF 0.02 Barry Callebaut AG Com CHF 24.20 Lindt & Spruengli AG Com CHF 10.00 Lindt & Spruengli AG Com CHF 100.00 Nestle SA Com CHF 0.10 Hand & machine tools Schindler Holding AG Com CHF 0.10 Schindler Holding AG Com CHF 0.10 Healthcare products Sonova Holding AG Com CHF 0.05 Straumann Holding AG Com CHF 0.10

Fair value €'000

% of net asset value

1,839

0.36

947 38,610

0.18 7.57

3,541

0.69

941 5,877

0.19 1.15

303

0.06

974 1,860 512

0.19 0.37 0.10

910 3,562

0.18 0.70

771 1,190

0.15 0.23

289

0.06

5,182

1.02

299

0.06

486 206

0.09 0.04

320

0.06

461 23,295

0.09 4.57

695

0.14

304

0.06

637

0.12

144

0.03

iShares plc Annual Report 323

As at 29 February 2012

Holding Investment

7,354 4,721 53,330 22,690

8,359

3,716 53,170 17,126 359,014 108,079 80,298 4,771 6,722 4,184

3,599

Switzerland (cont) Insurance Baloise Holding AG Com CHF 0.10 Swiss Life Holding AG Com CHF 5.10 Swiss Re AG Com CHF 0.10 Zurich Financial Services AG Com CHF 0.10 Marine transportation Kuehne + Nagel International AG Com CHF 1.00 Miscellaneous manufacturers Sulzer AG Com CHF 0.01 Oil & gas Transocean Ltd Com CHF 15.00 Pharmaceuticals Actelion Ltd Com CHF 0.50 Novartis AG Com CHF 0.50 Roche Holding AG Com NPV Retaill Cie Financiere Richemont SA Com CHF 1.00 Swatch Group AG Com CHF 2.25 Swatch Group AG Com CHF 0.45 Specialty finance Pargesa Holding SA Com CHF 20.00 Telecommunications Swisscom AG Com CHF 1.00 Total Switzerland

Fair value €'000

% of net asset value

Holding Investment

Fair value €'000

% of net asset value

Financial Derivative Instruments 435

0.08

409 2,374

0.08 0.47

4,287

0.84

826

0.16

400

0.08

2,128

0.42

485 14,681 14,126

0.09 2.88 2.77

3,698 1,624 400

0.72 0.32 0.08

233

0.04

1,076 99,941

0.21 19.59

Futures contracts No. of contracts 1 Euro Stoxx 50 Index Futures March 2012* 1 OMX 30 Index Futures March 2012 1 Swiss Market Index Futures March 2012 Total unrealised gains on futures contracts

Unrealised % of net gain asset €'000 value -

0.00 0.00

1

0.00

1

0.00

508,924

99.77

Bank overdraft†

(931))

(0.18))

Other net assets

1,886

0.37

509,879

99.96

Adjustment to align to the valuation methodology as set out in the prospectus

226

0.04

Net asset value attributable to redeemable participating shareholders at the end of the year

510,105

100.00

Total value of investments

Net assets attributable to redeemable participating shareholders

†

United States Healthcare products 10,106 Synthes Inc Com CHF 0.001 Total United States Total equities

1,313 1,313

0.26 0.26

508,923

99.77

Substantially all cash positions are held with State Street Bank and Trust Company other than €114,140 held as security by the counterparty for futures contracts. * Investments less than €500 are rounded to zero.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

324 iShares plc Annual Report

Fair value €'000

% of total current assets

508,923

99.08

1 4,739 513,663

0.00 0.92 100.00

www.iShares.com

For the year ended 29 February 2012 The 20 largest purchases

The 20 larrgest sales Holding 256,881 152,018 47,223 146,913 57,078 279,847 77,081 559,367 61,672 201,753 55,517 109,363 244,243 61,853 60,843 64,576 30,456 29,636 146,724 120,924

Investments Nestle SA Com CHF 0.10 Novartis AG Com CHF 0.50 Roche Holding AG Com CHF NPV Total SA Com EUR 2.50 Siemens AG Com NPV Telefonica SA Com EUR 1.00 Sanofi Com EUR 2.00 Banco Santander SA Com EUR 0.50 BASF SE Com NPV ENI SpA Com EUR 1.00 Bayer AG Com NPV Unilever NV CVS EUR 0.16 UBS AG Com CHF 0.10 SAP AG Com NPV Daimler AG Com NPV BNP Paribas SA Com EUR 2.00 Allianz SE Com NPV Novo Nordisk A/S Com DKK 1.00 ABB Ltd Com CHF 1.03 E.ON AG Com NPV

Proceeds €‘000 10,947 6,235 5,594 5,341 4,496 4,134 3,941 3,689 3,416 3,050 2,710 2,531 2,507 2,504 2,486 2,455 2,447 2,394 2,219 2,114

Holding Investments 138,698 Nestle SA Com CHF 0.10 129,920 Novartis AG Com CHF 0.50 91,708 Total SA Com EUR 2.50 62,636 Sanofi Com EUR 2.00 28,410 Roche Holding AG Com CHF NPV 35,042 Siemens AG Com NPV 376,717 Banco Santander SA Com EUR 0.50 169,835 Telefonica SA Com EUR 1.00 37,072 BASF SE Com NPV 48,310 SAP AG Com NPV 44,563 Anheuser-Busch InBev NV Com NPV 40,091 BNP Paribas SA Com EUR 2.00 33,369 Bayer AG Com NPV 146,794 UBS AG Com CHF 0.10 239,020 Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 37,306 Daimler AG Com NPV 18,394 Allianz SE Com NPV 101,218 ENI SpA Com 1.00 19,443 Novo Nordisk A/S Com DKK 1.00 65,735 Unilever NV CVS EUR 0.16

Cost €‘000 5,929 5,588 3,656 3,384 3,333 3,072 2,788 2,731 2,260 2,076 1,853 1,815 1,798 1,744 1,742 1,725 1,697 1,693 1,635 1,545

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

www.iShares.com

iShares plc Annual Report 325

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

51,015

19,793

Net (losses)/gains on financial assets/liabilities at fair value through profit or loss

3

(307,584)

406,590

(256,569)

426,383

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(12,220)

(8,014)

(268,789)

418,369

Finance costs: Distributions to redeemable participating shareholders

6

(35,319)

(24,274)

Interest expense

7

(28)

(19)

(35,347)

(24,293)

(304,136)

394,076

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax profit for the financial year/period after tax Net (loss)/p Adjustment to align to the valuation methodology as set out in the prospectus

8

(2,892)

(1,286)

(307,02 28)

392,790

746

1,135

(306,282)

393,925

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

2,298,846

1,774,206

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(306,282)

393,925

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

413,899

312,920

(362,977)

(182,205)

50,922

130,715

2,043,486

2,298,846

* For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

326 iShares plc Annual Report

www.iShares.com

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

Cash and cash equivalents

5,381

964

Margin cash account

1,323

442

CURRENT ASSETS

Receivables

11

5,821

13,419

Financial assets at fair value through profit or loss

12

2,038,945

2,293,579

2,051,470

2,308,404

Total current assets CURRENT LIABILITIES Margin cash account Payables

(1,245)

(306)

(10,869)

(12,636)

(12,114)

(12,942)

2,039,356

2,295,462

4,130

3,384

2,043,486

2,298,846

13

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

www.iShares.com

iShares plc Annual Report 327

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 $’000 7 50,645 363 51,015

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net (losses)/gains on futures contracts Net gains on currency

4.

Period from 12 June 2010 to 28 February 2011 $’000

(305,845)

405,687

(1,759) 20 (307,584)

727 176 406,590

Year ended 29 February 2012 $’000 (12,220) (12,220)

Period from 12 June 2010 to 28 February 2011 $’000 (8,014) (8,014)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 $’000 4 19,514 275 19,793

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

June 2010 October 2010 December 2010 June 2011 January 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 $’000 12,861 6,914 4,651 24,426 (424) 272 24,274

Year ended 29 February 2012 $’000 (28) (28)

Period from 12 June 2010 to 28 February 2011 $’000 (19) (19)

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

Year ended 29 February 2012 $’000 18,218 14,558 32,776 2,543 35,319

Bank interest

Please refer to page 63 for each Fund’s management fee rate.

328 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the investment valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 $’000 3,384

Period from 12 June 2010 to 28 February 2011 $’000 2,249

746

1,135

746 4,130

1,135 3,384

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

200,400,000 40,200,000 (37,800,000) 202,800,000

189,600,000 29,400,000 (18,600,000) 200,400,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

202,800,000 200,400,000 189,600,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

www.iShares.com

2,043,486 2,298,846 1,774,206

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$10.08 $11.47 $9.36

11. RECEIVABLES

Sale of securities awaiting settlement Dividends income receivable Securities lending income receivable Other receivables

29 February 2012 $’000

28 February 2011 $’000

3,240 2,547

11,043 2,354

34 5,821

6 16 13,419

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 29 February 2012 Financial assets: $’000 Investment in equities 2,038,855 Unrealised gains on futures contracts 90 2,038,945

28 February 2011 $’000 2,293,458 121 2,293,579

13. PAYABLES

Purchase of securities awaiting settlement Redemption of shares awaiting settlement Interest payable Management fees payable Other payables

29 February 2012 $’000

28 February 2011 $’000

(9,902)

(4,781)

(1) (932) (34) (10,869)

(6,836) (1,019) (12,636)

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

iShares plc Annual Report 329

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 $’000

28 February 2011 $’000

363

275

237,651

183,339

261,615

201,889

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

330 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Officiall Stock Exchange Listing or traded on a Regulated Market

756,000

136,000 48,200 20,100 235,000 1,079,000 174,000 441,800 202,100 88,000 142,000 133,000 94,400 130,800 685,300 59,100 59,700 162,800 175,000 533,000 1,481,100 1,375,000 3,522,000 2,258,900 305,800 2,506,100 254,200 525,000 293,000 1,113,000 692,000 158,000 703,000 352,000 379,000 www.iShares.com

Equities Japan Airlines All Nippon Airways Co Ltd Com NPV Apparel retailers Asics Corp Com NPV Fast Retailing Co Ltd Com NPV Shimamura Co Ltd Com NPV Auto manufacturers Hino Motors Ltd Com NPV Isuzu Motors Ltd Com NPV Auto parts Aisin Seiki Co Ltd Com NPV Denso Corp Com NPV JTEKT Corp Com NPV Koito Manufacturing Co Ltd Com NPV NGK Spark Plug Co Ltd Com NPV NHK Spring Co Ltd Com NPV NOK Corp Com NPV Stanley Electric Co Ltd Com NPV Sumitomo Electric Industries Ltd Com NPV Toyoda Gosei Co Ltd Com NPV Toyota Boshoku Corp Com NPV Toyota Industries Corp Com NPV Automobiles Daihatsu Motor Co Ltd Com NPV Fuji Heavy Industries Ltd Com NPV Honda Motor Co Ltd Com NPV Mazda Motor Corp Com NPV Mitsubishi Motors Corp Com NPV Nissan Motor Co Ltd Com NPV Suzuki Motor Corp Com NPV Toyota Motor Corp Com NPV Yamaha Motor Co Ltd Com NPV Banks Aozora Bank Ltd Com NPV Bank of Kyoto Ltd Com NPV Bank of Yokohama Ltd Com NPV Chiba Bank Ltd Com NPV Chugoku Bank Ltd Com NPV Fukuoka Financial Group Inc Com NPV Gunma Bank Ltd Com NPV Hachijuni Bank Ltd Com NPV

454,000 1,138,000

2,326

0.11

1,605 10,016 2,203

0.08 0.49 0.11

221,000 593,000 11,572,680 20,728,400 615,000 1,713,739 541,000 1,249,000 529,000 1,220,400

1,675 6,079

0.08 0.30

6,144 14,656 2,290

0.30 0.72 0.11

1,510 1,921 1,375 1,890 2,219

0.07 0.09 0.07 0.09 0.11

8,932 1,110 749 5,091

0.44 0.05 0.04 0.25

55,500 745,000

3,358

0.16

103,000

4,037 56,543 2,276 4,221 23,192 7,269 103,569 3,652

0.20 2.77 0.11 0.21 1.13 0.35 5.07 0.18

545,400 340,680

1,524 2,588 5,377 4,377 2,108

0.08 0.13 0.26 0.21 0.10

3,066 1,905 2,224

0.15 0.09 0.11

2,830,000 164,000 192,000

351,500

1,579

438,200 684,540 240,000 916,000 213,000 241,800 821,000 29,600 270,000 190,800

Japan (cont) Banks (cont) Hiroshima Bank Ltd Com NPV Hokuhoku Financial Group Inc Com NPV Iyo Bank Ltd Com NPV Joyo Bank Ltd Com NPV Mitsubishi UFJ Financial Group Inc Com NPV Mizuho Financial Group Inc Com NPV Nishi-Nippon City Bank Ltd Com NPV Resona Holdings Inc Com NPV Seven Bank Ltd Com NPV Shinsei Bank Ltd Com NPV Shizuoka Bank Ltd Com NPV Sumitomo Mitsui Financial Group Inc Com NPV Sumitomo Mitsui Trust Holdings Inc Com NPV Suruga Bank Ltd Com NPV Yamaguchi Financial Group Inc Com NPV Beverages Asahi Group Holdings Ltd Com NPV Coca-Cola West Co Ltd Com NPV Kirin Holdings Co Ltd Com NPV Broadcasting & entertainment Jupiter Telecommunications Co Ltd Com NPV Toho Co Ltd Com NPV Broadline retailers Aeon Co Ltd Com NPV Isetan Mitsukoshi Holdings Ltd Com NPV J Front Retailing Co Ltd Com NPV Seven & I Holdings Co Ltd Com NPV Takashimaya Co Ltd Com NPV Building materials and fixtures Asahi Glass Co Ltd Com NPV Daikin Industries Ltd Com NPV JS Group Corp Com NPV Nippon Sheet Glass Co Ltd Com NPV Rinnai Corp Com NPV TOTO Ltd Com NPV Business support serrvices Secom Co Ltd Com NPV

Fair value $'000

% of net asset value

2,098

0.10

2,207 2,007 2,682

0.11 0.10 0.13

59,908

2.93

34,573

1.69

1,740 8,215 1,190 1,605 5,392

0.09 0.40 0.06 0.08 0.26

41,509

2.03

9,825 1,522

0.48 0.08

1,755

0.09

7,717 946 8,781

0.38 0.04 0.43

1,545 1,829

0.08 0.09

6,941

0.34

3,843 2,214

0.18 0.11

18,970 1,844

0.93 0.09

8,239 6,332 5,073

0.40 0.31 0.25

1,369 2,150 2,048

0.07 0.10 0.10

9,064

0.44

iShares plc Annual Report 331

As at 29 February 2012

Holding Investment

508,000 313,000 850,000 1,147,000 437,000 351,000 743,000 1,360,000 1,429,000 464,000 917,000 1,693,000 25,600 92,000 1,146 14,400 111,900 215,500 2,005,700 908,000 912,600 137,700 71,300 134,800 1,200,000

214,300 578,000 319,000 60,900 4,107,000 21,700

Japan (cont) Business support services (cont) Toppan Printing Co Ltd Com NPV Chemicals Kuraray Co Ltd Com NPV Clothing & accessories Teijin Ltd Com NPV Commodity chemicals Asahi Kasei Corp Com NPV Denki Kagaku Kogyo KK Com NPV Mitsubishi Gas Chemical Co Inc Com NPV Mitsui Chemicals Inc Com NPV Showa Denko KK Com NPV Sumitomo Chemical Co Ltd Com NPV Tosoh Corp Com NPV Ube Industries Ltd Com NPV Computerrs Fujitsu Ltd Com NPV Itochu Techno-Solutions Corp Com NPV Nomura Research Institute Ltd Com NPV NTT Data Corp Com NPV Otsuka Corp Com NPV TDK Corp Com NPV Consumer electronics Casio Computer Co Ltd Com NPV Panasonic Corp Com NPV Sharp Corp Com NPV Sony Corp Com NPV Containers & packaging Toyo Seikan Kaisha Ltd Com NPV Diversified financial services Aeon Credit Service Co Ltd Com NPV Credit Saison Co Ltd Com NPV Diversified industrials IHI Corp Com NPV Electricaal components & equipment Brother Industries Ltd Com NPV Furukawa Electric Co Ltd Com NPV GS Yuasa Corp Com NPV Hamamatsu Photonics KK Com NPV Hitachi Ltd Com NPV Mabuchi Motor Co Ltd Com NPV

332 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

0.20

1,756,000

4,521

0.22

98,900 95,100

2,846

0.14

7,284

0.36

1,755

0.09

2,229 2,543 3,075

0.11 0.12 0.15

6,214 1,364 2,651

0.30 0.07 0.13

682,300

9,203

0.45

165,800

1,142

0.05

411,200

2,197 3,872 1,068 5,855

0.11 0.19 0.05 0.29

1,313,900

1,486 18,783 6,394 19,562

0.07 0.92 0.31 0.96

2,023

0.10

1,033 2,700

0.05 0.13

3,039

0.15

4,004

2,780

0.14

1,685 1,718

0.08 0.08

2,177 23,950 1,011

0.11 1.17 0.05

619,800 269,700 105,920 166,300 152,900

366,200

136,000 184,600 609,000 29,100 395,200 109,600 37,619 139,000 184,200 2,366,000 230,000 362,000 3,657,000 195,000 195,200

142,000 188,000

Fair value $'000

Japan (cont) Electrical components & equipment (cont) Mitsubishi Electric Corp Com NPV 15,751 Nidec Corp Com NPV 9,347 Ushio Inc Com NPV 1,415 Electricity Chubu Electric Power Co Inc Com NPV 11,402 Chugoku Electric Power Co Inc Com NPV 4,898 Electric Power Development Co Ltd Com NPV 2,713 Hokkaido Electric Power Co Inc Com NPV 2,459 Hokuriku Electric Power Co Com NPV 2,853 Kansai Electric Power Co Inc Com NPV 11,330 Kyushu Electric Power Co Inc Com NPV 5,402 Shikoku Electric Power Co Inc Com NPV 4,574 Tohoku Electric Power Co Inc Com NPV 4,842 Tokyo Electric Power Co Inc Com NPV 3,652 Electronic equipment Advantest Corp Com NPV 1,922 Omron Corp Com NPV 4,090 Electronic office equipment Ricoh Co Ltd Com NPV 5,613 Electronics Hirose Electric Co Ltd Com NPV 2,995 Hoya Corp Com NPV 9,223 Ibiden Co Ltd Com NPV 2,644 Keyence Corp Com NPV 9,886 Kyocera Corp Com NPV 12,313 Murata Manufacturing Co Ltd Com NPV 11,015 NEC Corp Com NPV 4,619 NGK Insulators Ltd Com NPV 3,168 Nippon Electric Glass Co Ltd Com NPV 3,390 Toshiba Corp Com NPV 16,085 Yaskawa Electric Corp Com NPV 1,879 Yokogawa Electric Corp Com NPV 1,862 Engineering & construction Chiyoda Corp Com NPV 1,823 JGC Corp Com NPV 5,458

% of net asset value

0.77 0.46 0.07

0.56 0.24 0.13 0.12 0.14 0.56 0.26 0.22 0.24 0.18 0.09 0.20 0.27 0.15 0.45 0.13 0.48 0.60 0.54 0.23 0.15 0.17 0.79 0.09 0.09 0.09 0.27

www.iShares.com

As at 29 February 2012

Holding Investment

102,600

586,000 143,000 62,382 156,000 171,200 53,300 81,000 87,900 110,000

57,700 54,700 23,900 89,800 774,000 48,800 1,703,000 372,000 2,236,000 509,000 101,800 49,000 109,400 768,000 121,000 590,000 537,000 932,000 436,000 392,000 523,000

www.iShares.com

Japan (cont) Environmental control Kurita Water Industries Ltd Com NPV Food products Ajinomoto Co Inc Com NPV Kikkoman Corp Com NPV MEIJI Holdings Co Ltd Com NPV Nippon Meat Packers Inc Com NPV Nisshin Seifun Group Inc Com NPV Nissin Foods Holdings Co Ltd Com NPV Toyo Suisan Kaisha Ltd Com NPV Yakult Honsha Co Ltd Com NPV Yamazaki Baking Co Ltd Com NPV Food retaillers and wholesalers FamilyMart Co Ltd Com NPV Lawson Inc Com NPV Footwear ABC-Mart Inc Com NPV Forest products & paper Nippon Paper Group Inc Com NPV OJI Paper Co Ltd Com NPV Gambling Sankyo Co Ltd Com NPV Gas distribution Osaka Gas Co Ltd Com NPV Toho Gas Co Ltd Com NPV Tokyo Gas Co Ltd Com NPV Hand & machine to ools Fuji Electric Co Ltd Com NPV Makita Corp Com NPV SMC Corp Com NPV THK Co Ltd Com NPV Heavy construction Kajima Corp Com NPV Kinden Corp Com NPV Obayashi Corp Com NPV Shimizu Corp Com NPV Taisei Corp Com NPV Home construction Daiwa House Industry Co Ltd Com NPV Sekisui Chemical Co Ltd Com NPV Sekisui House Ltd Com NPV

Fair value $'000

% of net asset value

Holding Investment

33,800 2,643

0.13

6,921 1,583 2,651

0.34 0.08 0.13

324,000 174,100 97,700 2,758,000

2,012

0.10

2,054

0.10

2,009 2,085 2,726

0.10 0.10 0.13

1,485

0.07

2,260 3,227

0.11 0.16

845

0.04

87,000 215,000 502,000

257,000 150,000 418,700 2,264,000 4,638,000 632,000 3,056,000 38,200

1,931 3,854

0.09 0.19

2,351

0.12

6,544 2,174 10,221

0.32 0.11 0.50

1,367,900 1,499,609 1,276,900 1,578,700 1,022,600 8,176 158,070

1,321 4,245 8,378 2,322

0.07 0.21 0.41 0.11

2,382 961 2,660 2,176 2,476

0.11 0.05 0.13 0.11 0.12

5,640

0.28

3,371 4,969

0.16 0.24

526,200 539,000 171,200 89,080 84,100 6,595 20,330 95,600 13,214 1,510,000 3,298,900

Japan (cont) Home improvement retailers Nitori Holdings Co Ltd Com NPV Industrial machinery Amada Co Ltd Com NPV Fanuc Corp Com NPV Hitachi Construction Machinery Co Ltd Com NPV Mitsubishi Heavy Industries Ltd Com NPV Nabtesco Corp Com NPV Shimadzu Corp Com NPV Sumitomo Heavy Industries Ltd Com NPV Industrial metals & mining Daido Steel Co Ltd Com NPV Hitachi Metals Ltd Com NPV JFE Holdings Inc Com NPV Kobe Steel Ltd Com NPV Nippon Steel Corp Com NPV Nisshin Steel Co Ltd Com NPV Sumitomo Metal Industries Ltd Com NPV Yamato Kogyo Co Ltd Com NPV Industrial suppliers ITOCHU Corp Com NPV Marubeni Corp Com NPV Mitsubishi Corp Com NPV Mitsui & Co Ltd Com NPV Sumitomo Corp Com NPV Insurance Dai-ichi Life Insurance Co Ltd Com NPV Sony Financial Holdings Inc Com NPV T&D Holdings Inc Com NPV Integrated oil & gas Cosmo Oil Co Ltd Com NPV Showa Shell Sekiyu KK Com NPV Internet Dena Co Ltd Com NPV Gree Inc Com NPV Rakuten Inc Com NPV SBI Holdings Inc Com NPV Trend Micro Inc Com NPV Yahoo Japan Corp Com NPV Investment services Daiwa Securities Group Inc Com NPV Nomura Holdings Inc Com NPV

Fair value $'000

% of net asset value

2,865

0.14

2,282 31,662

0.11 1.55

2,048

0.10

12,982 2,033 1,865

0.63 0.10 0.09

2,766

0.14

1,696 1,881 9,048 3,916 13,351 1,093

0.08 0.09 0.44 0.19 0.66 0.06

6,343 1,207

0.31 0.06

15,599 10,746 31,378 27,228 15,186

0.76 0.53 1.54 1.33 0.74

10,768

0.53

2,900 6,157

0.14 0.30

1,571 1,155

0.08 0.05

2,902 2,637 6,567 1,967 2,798 4,194

0.14 0.13 0.32 0.10 0.14 0.20

6,269 15,243

0.31 0.74

iShares plc Annual Report 333

As at 29 February 2012

Holding Investment

287,000 193,500

1,291,000 1,052,000 862,000 164,300 21,180

65,500 155,300 42,700 435,000 401,000 1,015,000 476,000

420,800 434,500 309,600 197,200 2,649 13,879 805,100 1,029,950 118,000 20,000 1,993 26,000 2,040,410 257,000

Japan (cont) Iron & steel Japan Steel Works Ltd Com NPV Leisure time Sega Sammy Holdings Inc Com NPV Machinery — diversified Kawasaki Heavy Industries Ltd Com NPV Kubota Corp Com NPV Machinery, construction & mining Komatsu Ltd Com NPV Media agencies Dentsu Inc Com NPV Hakuhodo DY Holdings Inc Com NPV Medical equipment Sysmex Corp Com NPV Terumo Corp Com NPV Metal fabricate/ hardware Maruichi Steel Tube Ltd Com NPV NTN Corp Com NPV Metal products NSK Ltd Com NPV Mining Mitsubishi Materials Corp Com NPV Sumitomo Metal Mining Co Ltd Com NPV Miscellaneous manufacturers FUJIFILM Holdings Corp Com NPV Konica Minolta Holdings Inc Com NPV Nikon Corp Com NPV Olympus Corp Com NPV Mobile telecommunications KDDI Corp Com NPV NTT DoCoMo Inc Com NPV Softbank Corp Com NPV Office & business equipment Canon Inc Com NPV Seiko Epson Corp Com NPV Oil & gas Idemitsu Kosan Co Ltd Com NPV Inpex Corp Com NPV Japan Petroleum Exploration Co Com NPV JX Holdings Inc Com NPV TonenGeneral Sekiyu KK Com NPV

334 iShares plc Annual Report

Fair value $'000

% of net asset value

2,127

0.10

3,677

0.18

4,051 10,372

0.20 0.51

25,762

1.26

5,120

0.25

1,295

0.06

Holding Investment

478,100 327,100 103,400 35,400 403,914 203,400 611,909 144,600 229,000 56,200 236,000

2,362 7,502

0.11 0.37

954 1,897

0.05 0.09

3,171

0.16

133,300 50,500 204,000 74,900 228,000 67,255

3,273

0.16

7,075

0.35

10,674

0.53

3,677 8,411 3,306

0.18 0.41 0.16

271,100 64,000 32,800 717,400 54,700 517,836 339,800 657,800

16,888 23,749 24,051

0.83 1.16 1.18

46,764 1,601

2.29 0.08

2,063 14,183

0.10 0.69

1,264 12,831

0.06 0.63

65,800 1,137,000

0.12

761,000

509,000

65,900

2,382

Japan (cont) Personal products Kao Corp Com NPV Shiseido Co Ltd Com NPV Unicharm Corp Com NPV Pharmaceuticals Alfresa Holdings Corp Com NPV Astellas Pharma Inc Com NPV Chugai Pharmaceutical Co Ltd Com NPV Daiichi Sankyo Co Ltd Com NPV Dainippon Sumitomo Pharma Co Ltd Com NPV Eisai Co Ltd Com NPV Hisamitsu Pharmaceutical Co Inc Com NPV Kyowa Hakko Kirin Co Ltd Com NPV Medipal Holdings Corp Com NPV Miraca Holdings Inc Com NPV Mitsubishi Tanabe Pharma Corp Com NPV Ono Pharmaceutical Co Ltd Com NPV Otsuka Holdings Co Ltd Com NPV Santen Pharmaceutical Co Ltd Com NPV Shionogi & Co Ltd Com NPV Suzuken Co Ltd Com NPV Taisho Pharmaceutical Holdings Co Ltd Com NPV Takeda Pharmaceutical Co Ltd Com NPV Tsumura & Co Com NPV Property & casualty insurance MS&AD Insurance Group Holdings Com NPV NKSJ Holdings Inc Com NPV Tokio Marine Holdings Inc Com NPV Publishing Dai Nippon Printing Co Ltd Com NPV Real estate Daito Trust Construction Co Ltd Com NPV Real estate investment & services Aeon Mall Co Ltd Com NPV Mitsubishi Estate Co Ltd Com NPV Mitsui Fudosan Co Ltd Com NPV

Fair value $'000

% of net asset value

12,263 5,698 5,365

0.60 0.28 0.26

1,561 16,618

0.08 0.81

3,340 11,279

0.16 0.55

1,504 9,308

0.07 0.46

2,545

0.13

2,531 1,606 1,931

0.12 0.08 0.10

2,795

0.14

4,109

0.20

6,422

0.31

2,655 3,765 1,890

0.13 0.18 0.09

2,634

0.13

32,484 1,583

1.59 0.08

11,139 7,998

0.55 0.39

18,204

0.89

5,251

0.26

5,813

0.28

1,475

0.07

20,608 14,479

1.01 0.71

www.iShares.com

As at 29 February 2012

Holding Investment

86,500 1,046 324,000 388,000 617 494 1,709 553 250

68,200 143,400 45,400 60,400

238,700 202,600 234,400 87,550 105,400 155,900 84,700 34,600 57,600

61,500 134,000 265,000 94,700 162,700 254,000

www.iShares.com

Fair value $'000

Japan (cont) Real estate investment & services (cont) Nomura Real Estate Holdings Inc Com NPV 1,502 NTT Urban Development Corp Com NPV 841 Sumitomo Realty & Development Co Ltd Com NPV 7,586 Tokyu Land Corp Com NPV 1,869 Real estate investment trusts Japan Prime Realty Investment Corp Reits NPV 1,636 Japan Real Estate Investment Corp Reits NPV 4,364 Japan Retail Fund Investment Corp Reits NPV 2,553 Nippon Building Fund Inc Reits NPV 5,274 Nomura Real Estate Office Fund Inc Reits NPV 1,452 Recreational products Shimano Inc Com NPV 3,969 Yamaha Corp Com NPV 1,373 Recreational services Oriental Land Co Ltd Com NPV 4,712 Restaurants & bars McDonald's Holdings Co Japan Ltd Com NPV 1,581 Retail Citizen Holdings Co Ltd Com NPV 1,475 Marui Group Co Ltd Com NPV 1,654 Semiconductors Elpida Memory Inc Com NPV 20 Rohm Co Ltd Com NPV 4,418 Sumco Corp Com NPV 1,137 Tokyo Electron Ltd Com NPV 8,687 Software Konami Corp Com NPV 2,335 Oracle Corp Japan Com NPV 1,251 Square Enix Holdings Co Ltd Com NPV 1,128 Specialiseed consumer services Benesse Holdings Inc Com NPV 2,827 Specialty chemicals Air Water Inc Com NPV 1,745 Daicel Corp Com NPV 1,729 Hitachi Chemical Co Ltd Com NPV 1,752 JSR Corp Com NPV 3,421 Kaneka Corp Com NPV 1,462

% of net asset value

0.08 0.04 0.37 0.09

Holding Investment

198,000 1,231,500 150,000 373,000 238,000

0.08

52,910

0.21

95,160

0.13 0.26

19,920 74,630

0.07

104,000

0.19 0.07

396,500

0.23

0.08 0.07 0.08 0.00 0.22 0.06 0.42 0.11 0.06 0.06 0.14 0.08 0.08 0.09 0.17 0.07

1,334,000 4,088 177,650 90,100 40,500 1,367 308,900 661,000 426,000 526,000 251,000 1,477,000 1,041,000 772,000 1,390,000 569,000 928,000 1,033,000 154,460

Japan (cont) Specialty ch hemicals (cont) Kansai Paint Co Ltd Com NPV Mitsubishi Chemical Holdings Corp Com NPV Nitto Denko Corp Com NPV Shin-Etsu Chemical Co Ltd Com NPV Taiyo Nippon Sanso Corp Com NPV Specialty finance Mitsubishi UFJ Lease & Finance Co Ltd Com NPV ORIX Corp Com NPV Specialty retailers USS Co Ltd Com NPV Yamada Denki Co Ltd Com NPV Storage & warehousing Mitsubishi Logistics Corp Com NPV Telecommunications Nippon Telegraph & Telephone Corp Com NPV Textile Toray Industries Inc Com NPV Tobacco Japan Tobacco Inc Com NPV Toys Namco Bandai Holdings Inc Com NPV Nintendo Co Ltd Com NPV Sanrio Co Ltd Com NPV Transportation Central Japan Railway Co Com NPV East Japan Railway Co Com NPV Kawasaki Kisen Kaisha Ltd Com NPV Keikyu Corp Com NPV Keio Corp Com NPV Keisei Electric Railway Co Ltd Com NPV Kintetsu Corp Com NPV Mitsui OSK Lines Ltd Com NPV Nippon Express Co Ltd Com NPV Nippon Yusen KK Com NPV Odakyu Electric Railway Co Ltd Com NPV Tobu Railway Co Ltd Com NPV Tokyu Corp Com NPV West Japan Railway Co Com NPV

Fair value $'000

% of net asset value

1,876

0.09

7,105 6,181

0.35 0.30

20,023

0.98

1,573

0.08

2,262 9,194

0.11 0.45

1,956 4,841

0.09 0.24

1,222

0.06

18,786

0.92

9,510

0.47

21,794

1.07

2,484 13,347 1,659

0.12 0.66 0.08

11,231 19,845

0.55 0.97

1,397 3,800 3,782

0.07 0.19 0.18

1,848 5,621 4,733 3,033 4,139

0.09 0.27 0.23 0.15 0.20

5,448 4,838 4,990 6,317

0.27 0.24 0.24 0.31

iShares plc Annual Report 335

As at 29 February 2012

Holding Investment

361,400

224,000 591,000 155,300

56,300 1,137,000 193,000

Japan (cont) Transportation (cont) Yamato Holdings Co Ltd Com NPV Transportation services Kamigumi Co Ltd Com NPV Tyres Bridgestone Corp Com NPV Sumitomo Rubber Industries Ltd Com NPV Wholesale trade Hitachi High-Technologies Corp Com NPV Sojitz Corp Com NPV Toyota Tsusho Corp Com NPV Total Japan Total equities

Fair value $'000

% of net asset value

5,720

0.28

1,929

0.09

14,260

0.70

1,961

0.09

1,293 2,107 3,885 2,038,855

0.07 0.10 0.19 99.77

2,038,855

99.77

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

Fair value $'000

% of total current assets

2,038,855

99.39

90 12,525 2,051,470

0.00 0.61 100.00

Financial Derivative Instruments Futures contracts

No. of contracts 13 Topix Index Futures March 2012 Total unrealised gains on futures contracts Total value of investments Cash† Other net liabilities Net assets attributable to redeem mable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

Unrealised gain $'000 90

% of net asset valuee 0.01

90

0.01

2,038,945

99.78

5,459

0.27

(5,048)

(0.25)

2,039,356

99.80

4,130

0.20

2,043,486 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company other than $77,561 held as security by the counterparty for futures contracts.

336 iShares plc Annual Report

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For the year ended 29 February 2012 The 20 largest sales Proceeds Holding Investments $‘000 470,900 Toyota Motor Corp Com NPV 16,925 2,149,000 Mitsubishi UFJ Financial Group Inc Com NPV 9,609 280,200 Honda Motor Co Ltd Com NPV 9,298 189,800 Canon Inc Com NPV 8,486 227,800 Sumitomo Mitsui Financial Group Inc Com NPV 6,628 131,300 Takeda Pharmaceutical Co Ltd Com NPV 5,938 118,400 Nippon Telegraph & Telephone Corp Com NPV 5,664 3,672,300 Mizuho Financial Group Inc Com NPV 5,402 231,500 Mitsubishi Corp Com NPV 5,143 145,700 Softbank Corp Com NPV 5,009 31,700 Fanuc Corp Com NPV 4,895 2,650 NTT DoCoMo Inc Com NPV 4,721 297,200 Mitsui & Co Ltd Com NPV 4,608 1,119,400 Hankyu Hanshin Holdings Inc Com NPV 4,323 158,500 Komatsu Ltd Com NPV 4,277 20,700 Nintendo Co Ltd Com NPV 3,979 760,000 Hitachi Ltd Com NPV 3,979 170,900 Sony Corp Com NPV 3,948 424,900 Nissan Motor Co Ltd Com NPV 3,839 367,400 Panasonic Corp Com NPV 3,806

The 20 largest purchases Holding 513,100 306,600 2,358,200 208,200 179,100 223,700 249,200 294,300 4,511,400 616,900 320,700 34,500 171,700 186,800 2,810 273,000 22,000 823,000 458,600 87,700

Investments Toyota Motor Corp Com NPV Honda Motor Co Ltd Com NPV Mitsubishi UFJ Financial Group Inc Com NPV Canon Inc Com NPV Takeda Pharmaceutical Co Ltd Com NPV Softbank Corp Com NPV Sumitomo Mitsui Financial Group Inc Com NPV Mitsubishi Corp Com NPV Mizuho Financial Group Inc Com NPV Panasonic Corp Com NPV Mitsui & Co Ltd Com NPV Fanuc Corp Com NPV Komatsu Ltd Com NPV Sony Corp Com NPV NTT DoCoMo NPV Inc Com NPV Mitsubishi Estate Co Ltd Com NPV Nintendo Co Ltd Com NPV Hitachi Ltd Com NPV Nissan Motor Co Ltd Com NPV Nippon Telegraph & Telephone Corp Com NPV

Cost $‘000 20,665 11,570 11,419 9,482 8,471 8,276 7,857 7,496 7,483 7,358 5,606 5,474 5,239 5,187 5,075 4,850 4,752 4,539 4,357 4,121

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

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iShares plc Annual Report 337

For the year ended 29 February 2012 Notes

Operating income

2

Net gains on financial assets at fair value through profit or loss

3

Total gains Operating expenses

4

Net operating profit

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

8,044

5,408

9,066

104,860

17,110

110,268

(4,415)

(2,597)

12,695

107,671

Finance costs: Distributions to redeemable participating shareholders

6

(3,264)

(1,521)

Interest expense

7

(15)

(14)

Total finance costs Net profit for the financial year/period before tax Non-reclaimable withholding tax Net profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(3,279)

(1,535)

9,416

106,136

(1,071)

(761)

8,345

105,375

223

(29)

8,568

105,346

Increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

564,676

306,132

8,568

105,346

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

291,800

264,765

(249,974)

(111,567)

41,826

153,198

615,070

564,676

* For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

338 iShares plc Annual Report

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As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

CURRENT ASSETS Cash and cash equivalents

10

224

Receivables

11

8,230

5,168

Financial assets at fair value through profit or loss

12

614,151

563,321

622,391

568,713

(4,304)

-

Total current assets CURRENT LIABILITIES Bank overdraft Payables

13

(1,023)

(2,979)

Distributions to redeemable participating shareholders payable

6

(2,605)

(1,446)

(7,932)

(4,425)

614,459

564,288

611

388

615,070

564,676

Total current liabilities Net assets attriibutable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

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iShares plc Annual Report 339

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit Interest Income Dividend income Securities lending income

3.

Year ended 29 February 2012 $’000 2 7,747 295 8,044

NET GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net gains on investments in securities held at fair value through profit or loss Net (losses)/gains on currency

4.

Period from 12 June 2010 to 28 February 2011 $’000

9,622 (556) 9,066

104,637 223 104,860

Year ended 29 February 2012 $’000 (4,415) (4,415)

Period from 12 June 2010 to 28 February 2011 $’000 (2,597) (2,597)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 $’000 3 5,147 258 5,408

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 February 2011 August 2011 February 2012 Equalisation income Equalisation expense

7.

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Bank interest

340 iShares plc Annual Report

Period from 12 June 2010 to 28 February 2011 $’000 65 1,446 1,511 (229) 239 1,521

INTEREST EXPENSE

MANAGEMENT FEES

Please refer to page 63 for each Fund’s management fee rate.

Year ended 29 February 2012 $’000 530 2,605 3,135 184 (55) 3,264

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (15) (14) (15) (14)

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For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the investment valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 $’000 388

Period from 12 June 2010 to 28 February 2011 $’000 417

223

(29)

223 611

(29) 388

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. 29 February Number of redeemable participating 2012 shares: No. of Shares Balance at the beginning of year/period 15,700,000 Issued during year/period 8,300,000 Redeemed during year/period (7,700,000) Balance at the end of year/period 16,300,000

28 February 2011 No. of Shares 11,000,000 7,800,000 (3,100,000) 15,700,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 11. RECEIVABLES

Sale of securities awaiting settlement Dividend income receivable Securities lending income receivable Distributions payable held with Registrar*

16,300,000 15,700,000 11,000,000

29 February 2012 $’000

28 February 2011 $’000

701 4,884

1,258 3,881

40

29

2,605 8,230

5,168

* Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities

29 February 2012 $’000 614,151 614,151

28 February 2011 $’000 563,321 563,321

29 February 2012 $’000

28 February 2011 $’000

(667) (2) (354) (1,023)

(2,644) (335) (2,979)

13. PAYABLES

Purchase of securities awaiting settlement Interest payable Management fees payable

No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$37.73 $35.97 $27.83

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements.

$’000 Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

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15. RELATED PARTIES 615,070 564,676 306,132

The related parties are set out on pages 66 and 67.

iShares plc Annual Report 341

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 $’000

28 February 2011 $’000

295

258

37,169

20,413

40,954

22,472

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

342 iShares plc Annual Report

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As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 54,070

48,210

120,489 39,567

74,751 12,734 14,023 41,350 24,840 169,152 263,406

180,130 283,670

76,887 22,969 16,728 11,177 8,122

18,778 92,583 15,728 4,626

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Equities Republic of South Korea Aerospace & defence Korea Aerospace Industries Ltd Com KRW 5000.00 Agriculture KT&G Corp Com KRW 5000.00 Airlines Korean Air Lines Co Ltd Com KRW 5000.00 Auto parts Hyundai Mobis Com KRW 5000.00 Hyundai Wia Corp Com KRW 5000.00 Mando Corp Com KRW 5000.00 Automobiles Hyundai Motor Co 2nd Pref KRW 5000.00 Hyundai Motor Co Pref KRW 5000.00 Hyundai Motor Co Com KRW 5000.00 Kia Motors Corp Com KRW 5000.00 Banks Industrial Bank of Korea Com KRW 5000.00 Korea Exchange Bank Com KRW 5000.00 Biotechnology Celltrion Inc Com KRW 500.00 Broadline retailers E-Mart Co Ltd Com KRW 5000.00 Hyundai Department Store Co Ltd Com KRW 5000.00 Lotte Shopping Co Ltd Com KRW 5000.00 Shinsegae Co Ltd Com KRW 5000.00 Business support services S1 Corp Com KRW 500.00 Commodity chemicals Hanwha Chem Corp Com KRW 5000.00 Honam Petrochemical Corp Com KRW 5000.00 KCC Corp Com KRW 5000.00

50,890 8,380 17,006 1,295

0.21

7,873

1.28

16,490 112,876 1,867

0.30 47,334

19,010

3.09

1,571 2,099

0.26 0.34

49,455 25,101 137,098

2,343

0.38

1,388

0.22

32,584

5.30

16,646

2.71

202,012 197,116 147,420 239,970

2,085

0.34

130,544

2,064

0.33

402,645

2,406

0.39

42,892

0.90

25,312

0.41

62,892

0.61

468,180

1,902

0.31

397,890

908

0.15

2,309

0.38

4,970 1,485

0.81 0.24

5,543 2,497 3,767

142,077

11,034

9,976

Republic of South Korea (cont) Commodity chemicals (cont) KP Chemical Corp Com KRW 5000.00 LG Chem Ltd Com KRW 5000.00 LG Chem Ltd Pref KRW 5000.00 OCI Co Ltd Com KRW 5000.00 Computer services SK C&C Co Ltd Com KRW 200.00 Consumer electronics LG Electronics Inc Com KRW 5000.00 Consumer finance Samsung Card Co Com KRW 5000.00 Distribution & wholesale Hanwha Corp Com KRW 5000.00 Hyosung Corp Com KRW 5000.00 Samsung C&T Corp Com KRW 5000.00 Divversified financial services BS Financial Group Inc Com KRW 5000.00 Daewoo Securities Co Ltd Com KRW 5000.00 DGB Financial Group Inc Com KRW 5000.00 Hana Financial Group Inc Com KRW 5000.00 Hyundai Securities Co Ltd Com KRW 5000.00 KB Financial Group Inc Com KRW 5000.00 Korea Investment Holdings Co Ltd Com KRW 5000.00 Mirae Asset Securities Co Ltd Com KRW 5000.00 Samsung Securities Co Ltd Com KRW 5000.00 Shinhan Financial Group Co Ltd Com KRW 5000.00 Woori Finance Holdings Co Ltd Com KRW 5000.00 Woori Investment & Securities Co Ltd Com KRW 5000.00 Diversified industrials Doosan Corp Com KRW 5000.00 Electrical components & equipment LG Innotek Co Ltd Com KRW 5000.00

Fair value $'000

% of net asset value

807 18,127 921 4,082

0.13 2.95 0.15 0.66

1,843

0.30

8,607

1.40

1,792

0.29

1,563

0.25

1,490

0.24

9,436

1.54

2,519

0.41

2,449

0.40

1,977

0.32

8,462

1.37

1,283

0.21

14,828

2.41

1,735

0.28

903

0.15

3,424

0.56

18,100

2.94

4,357

0.71

1,784

0.29

1,692

0.27

854

0.14

iShares plc Annual Report 343

As at 29 February 2012

Holding Investment

16,497 65,650

282,120

121,192 37,484

255,520

59,360

49,476 65,933

37,244 191 8,620 783 3,935 25,521

30,616 114,275

39,261 62,178 73,405

32,960

Republic of South Korea (cont) Electrical components & equipment (cont) LS Industrial Systems Co Ltd Com KRW 5000.00 Samsung Electro-Mechanics Co Ltd Com KRW 5000.00 Electricity Korea Electric Power Corp Com KRW 5000.00 Electronic equipment Samsung Electronics Co Ltd Com KRW 5000.00 Samsung SDI Co Ltd Com KRW 5000.00 Electronics LG Display Co Ltd Com KRW 5000.00 Environm mental control Woongjin Coway Co Ltd Com KRW 500.00 Exploration & production S-Oil Corp Com KRW 2500.00 SK Innovation Co Ltd Com KRW 5000.00 Fixed line telecommunications KT Corp Com KRW 5000.00 KT Corp ADR NPV Food products CJ CheilJedang Corp Com KRW 5000.00 Lotte Confectionery Co Ltd Com KRW 5000.00 Orion Corp Com KRW 5000.00 Gas distribution Korea Gas Corp Com KRW 5000.00 Heavy construction Daelim Industrial Co Ltd Com KRW 5000.00 Daewoo Engineering & Construction Co Ltd Com KRW 5000.00 GS Engineering & Construction Corp Com KRW 5000.00 Hyundai Development Co Com KRW 5000.00 Hyundai Engineering & Construction Co Ltd Com KRW 5000.00 Samsung Engineering Co Ltd Com KRW 5000.00

Fair value $'000

% of net asset value

1,006

0.16

5,499

0.90

6,317

1.03

Holding Investment

15,935 19,476 104,269 40,800 35,300

130,538

21.22

4,624

0.75

6,761

1.10

60,925 71,734 39,700 122,820

1,985

0.32

5,550

0.90

10,933

1.78

1,083 3

0.18 0.00

2,477

0.40

1,266 2,494

0.21 0.40

191,040 54,930

16,812 44,877 46,563

111,220

887

0.14

105,220

3,448

0.56

45,855

1,083

0.18

47,270 12,097 3,393

0.55 177,560

1,373

0.23 113,190

5,551

0.90

6,968

1.13

51,850 13,945

344 iShares plc Annual Report

Republic of South Korea (ccont) Holding companies - diversified operations CJ Corp Com KRW 5000.00 LS Corp Com KRW 5000.00 Home furnishings LG Corp Com KRW 5000.00 Industrial metals & mining Dongkuk Steel Mill Co Ltd Com KRW 5000.00 Hyundai Hysco Co Ltd Com KRW 5000.00 Hyundai Steel Co Com KRW 5000.00 POSCO Com KRW 5000.00 Industrial suppliers Daewoo International Corp Com KRW 5000.00 SK Networks Co Ltd Com KRW 2500.00 Insurance Korea Life Insurance Co Ltd Com KRW 5000.00 Samsung Life Insurance Co Ltd Com KRW 500.00 Internet NCSoft Corp Com KRW 500.00 NHN Corp Com KRW 500.00 Machinery — diversified Doosan Heavy Industries & Construction Co Ltd Com KRW 5000.00 Machinery, construction & mining Doosan Infracore Co Ltd Com KRW 5000.00 Marine transportation Daewoo Shipbuilding & Marine Engineering Co Ltd Com KRW 5000.00 Hyundai Heavy Industries Co Ltd Com KRW 5000.00 Hyundai Merchant Marine Co Ltd Com KRW 5000.00 Hyundai Mipo Dockyard Com KRW 5000.00 Samsung Heavy Industries Co Ltd Com KRW 5000.00 STX Pan Ocean Co Ltd Com KRW 1000.00 Miscellaneous manufacturers Cheil Industries Inc Com KRW 5000.00 Kumho Petrochemical Ltd Com KRW 5000.00

Fair value $'000

% of net asset value

1,181 1,502

0.19 0.25

6,515

1.06

917

0.15

1,202

0.20

6,236 26,674

1.01 4.34

1,248

0.20

1,180

0.19

1,247

0.20

4,483

0.73

4,155 9,327

0.67 1.52

2,939

0.48

2,252

0.37

3,381

0.55

13,895

2.26

1,322

0.22

1,687

0.27

6,468

1.05

768

0.12

4,426

0.72

1,951

0.32

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As at 29 February 2012

Holding Investment

254,773 9,667 111,419 56,180 28,335

3,532 10,280

9,198 9,338

46,740 68,820 38,978

105,890

571,010 22,544 40,900

14,440 100,400

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Republic of South Korea (cont) Mobile telecommunications LG Uplus Corp Com KRW 5000.00 SK Telecom Co Ltd Com KRW 500.00 SK Telecom Co Ltd ADR NPV Oil & gas GS Holdings Com KRW 5000.00 SK Holdings Co Ltd Com KRW 5000.00 Personal products Amorepacific Corp Com KRW 5000.00 LG Household & Health Care Ltd Com KRW 5000.00 Pharmaceuticals Yuhan Corp Com KRW 5000.00 Platinum & precious metals Korea Zinc Co Ltd Com KRW 5000.00 Property & casualty insurance Dongbu Insurance Co Ltd Com KRW 500.00 Hyundai Marine & Fire Insurance Co Ltd Com KRW 500.00 Samsung Fire & Marine Insurance Co Ltd Com KRW 500.00 Recreational services Kangwon Land Inc Com KRW 500.00 Semiconductors Hynix Semiconductor Inc Com KRW 5000.00 Samsung Electronics Co Ltd Pref KRW 5000.00 Samsung Techwin Co Ltd Com KRW 5000.00 Transportation services Glovis Co Ltd Com KRW 500.00 Tyres Hankook Tire Co Ltd Com KRW 500.00 Total Republic of South Korea

Fair value $'000

% of net asset value

1,441

0.24

1,253 1,609

0.20 0.26

3,244

0.53

4,293

0.70

3,220

0.52

4,714

0.77

Fair value $'000

% of net asset value

Bank overdraft†

(4,294 4)

(0.70)

Other net assets

4,602 2

0.75

614,459

99.90

611

0.10

615,070

100.00

Holding Investment

Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemaable participating shareholders at the end of the year †

978

3,656

0.16

0.59

2,037

0.33

1,984

0.33

7,334

1.19

2,437

0.40

15,414

2.50

14,126

2.30

2,340

0.38

2,388

0.39

3,841 614,151

0.62 99.85

Total equities

614,151

99.85

Total value of investments

614,151

99.85

Substantially all cash positions are held with State Street Bank and Trust Company.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Other assets Total current assets

Fair value $'000

% of total current assets

614,151 8,240 622,391

98.68 1.32 100.00

iShares plc Annual Report 345

For the year ended 29 February 2012 The 20 largest sales Holding 61,593 85,955 36,436 37,987 130,693 25,848 214,520 183,230 11,472 22,835 277,920 33,491 279,432 22,809 69,666 61,237 122,090 19,799 16,677 53,469

Proceeds Investments $‘000 Samsung Electronics Co Ltd Com KRW 5000.00 48,151 Hyundai Motor Co Com KRW 5000.00 16,073 POSCO Com KRW 5000.00 12,160 Hyundai Mobis Com KRW 5000.00 10,538 Kia Motors Corp Com KRW 5000.00 7,986 LG Chem Ltd Com KRW 5000.00 7,882 Shinhan Financial Group Co Ltd Com KRW 5000.00 7,416 KB Financial Group Inc Com KRW 5000.00 6,074 Samsung Electronics Co Ltd Pref KRW 5000.00 5,901 Hyundai Heavy Industries Co Ltd Com KRW 5000.00 5,783 Hynix Semiconductor Inc Com KRW 5000.00 5,463 SK Innovation Co Ltd Com KRW 5000.00 4,788 SK Telecom Co Ltd ADR NPV 4,672 NHN Corp Com KRW 500.00 4,461 Samsung C&T Corp Com KRW 5000.00 4,122 KT&G Corp Com KRW 5000.00 3,881 Hana Financial Group Inc Com KRW 5000.00 3,756 Samsung Fire & Marine Insurance Co Ltd Com KRW 500.00 3,745 Samsung Engineering Co Ltd Com KRW 5000.00 3,224 LG Electronics Inc Com KRW 5000.00 3,209

The 20 largest purchases Holding Investments 62,387 Samsung Electronics Co Ltd Com KRW 5000.00 87,063 Hyundai Motor Co Com KRW 5000.00 36,906 POSCO Com KRW 5000.00 38,476 Hyundai Mobis Com KRW 5000.00 243,420 Shinhan Financial Group Co Ltd Com KRW 5000.00 27,277 Hyundai Heavy Industries Co Ltd Com KRW 5000.00 227,980 KB Financial Group Inc Com KRW 5000.00 26,181 LG Chem Ltd Com KRW 5000.00 135,019 Kia Motors Corp Com KRW 5000.00 302,130 Hynix Semiconductor Inc Com KRW 5000.00 11,620 Samsung Electronics Co Ltd Pref KRW 5000.00 33,922 SK Innovation Co Ltd Com KRW 5000.00 23,103 NHN Corp Com KRW 500.00 70,564 Samsung C&T Corp Com KRW 5000.00 123,670 Hana Financial Group Inc Com KRW 5000.00 20,054 Samsung Fire & Marine Insurance Co Ltd Com KRW 500.00 62,026 KT&G Corp Com KRW 5000.00 19,093 Kumho Petro chemical Co Ltd Com KRW 5000.00 54,412 LG Electronics Inc Com KRW 5000.00 16,942 Samsung Engineering Co Ltd Com KRW 5000.00

Cost $‘000 51,214 16,937 13,114 11,473 9,738 8,738 8,723 8,648 8,595 6,478 6,228 5,175 4,505 4,504 4,225 4,004 3,990 3,760 3,711 3,454

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

346 iShares plc Annual Report

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For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

41,355

22,699

Net gains on financial assets/liabilities at fair value through profit or loss

3

33,657

311,054

75,012

333,753

Total gains Operating expenses

4

Net operating profit

(7,611)

(4,248)

67,401

329,505

Finance costs: Distributions to redeemable participating shareholders

6

(27,480)

(14,691)

Interest expense

7

(3)

(2)

(27,483)

(14,693)

Net profit for the financial year/period before tax

39,918

314,812

Non-reclaimable withholding tax

(5,600)

(3,491)

Net profit for the financial year/period after tax

34,318

311,321

957

(564)

35,275

310,757

Total finance costs

Adjustment to align to the valuation methodology as set out in the prospectus

8

Increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

1,912,926

1,130,245

35,275

310,757

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

564,659

638,616

(376,690)

(166,692)

187,969

471,924

2,136,170

1,912,926

* For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 347

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

-

17,066

1,861

521

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

12,431

3,973

Financial assets at fair value through profit or loss

12

2,132,101

1,910,165

2,146,393

1,931,725

(1,948)

-

(38)

-

Total current assets CURRENT LIABILITIES Bank overdraft Margin cash account Payables

13

(676)

(11,910)

Distributions to redeemable participating shareholders payable

6

(8,326)

(6,697)

(10,988)

(18,607)

2,135,405

1,913,118

765

(192)

2,136,170

1,912,926

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

348 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 $’000 9 40,815 531 41,355

NET GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net gains on investments in securities held at fair value through profit or loss Net gains on futures contracts Net losses on currency

4.

Period from 12 June 2010 to 28 February 2011 $’000

33,570 107 (20) 33,657

310,935 127 (8) 311,054

Year ended 29 February 2012 $’000 (7,611) (7,611)

Period from 12 June 2010 to 28 February 2011 $’000 (4,248) (4,248)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 $’000 3 22,644 52 22,699

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 $’000 4,982 4,154 6,697 15,833 (1,509) 367 14,691

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate. Bank interest

www.iShares.com

Year ended 29 February 2012 $’000 6,064 6,856 6,500 8,326 27,746 (1,458) 1,192 27,480

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (3) (2) (3) (2)

iShares plc Annual Report 349

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the investment valuation methodology as set out in the Prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (192) 372

957

(564)

957 765

(564) (192)

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

71,800,000 22,400,000 (15,200,000) 79,000,000

51,800,000 26,800,000 (6,800,000) 71,800,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

79,000,000 71,800,000 51,800,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

350 iShares plc Annual Report

2,136,170 1,912,926 1,130,245

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$27.04 $26.64 $21.82

11. RECEIVABLES

Sale of securities awaiting settlement Dividend income receivable Securities lending income receivable Distributions payable held with Registrar*

29 February 2012 $’000

28 February 2011 $’000

4,067

764 3,200

38

9

8,326 12,431

3,973

* Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Unrealised gains on futures contracts

29 February 2012 $’000 2,132,030

28 February 2011 $’000 1,910,120

71 2,132,101

45 1,910,165

29 February 2012 $’000

28 February 2011 $’000

(676) (676)

(11,325) (585) (11,910)

13. PAYABLES

Purchase of securities awaiting settlement Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

www.iShares.com

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund. 29 February 2012 $’000

28 February 2011 $’000

531

52

76,160

7,301

83,883

7,957

Income earned during the year/period* Value of securities on loan at the year/period end Value of collateral held by the Company at the year/period end

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 351

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transsferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

22,682 70,484 17,523 8,169 9,665 7,900

47,410

18,471

79,465

26,091 32,404 95,592 161,713 61,113 24,519 216,188 133,707 62,934

17,404 14,219

30,551 75,952

Equities Bermuda Agriculture Bunge Ltd Com USD 0.01 Diversified financial services Invesco Ltd Com USD 0.20 Insurance Arch Capital Group Ltd Com USD 0.01 Everest Re Group Ltd Com USD 0.01 PartnerRe Ltd Com USD 1.00 RenaissanceRe Holdings Ltd Com USD 1.00 Oil & gas Nabors Industries Ltd Com USD 0.001 Property & casualty insurance Axis Capital Holdings Ltd Com USD 0.0125 Semiconductors Marvell Technology Group Ltd Com USD 0.002 Total Bermuda Canada Aerospace CAE Inc Com NPV Auto parts & equipment Magna International Inc Com NPV Banks Bank of Montreal Com NPV Bank of Nova Scotia Com NPV Canadian Imperial Bank of Commerce Com NPV National Bank of Canada Com NPV Royal Bank of Canada Com NPV Toronto-Dominion Bank Com NPV Broadcasting & entertainment Shaw Communications Inc Com NPV Clothing & accessories Gildan Activewear Inc Com NPV Commercial vehicles & trucks Ritchie Bros Auctioneers Inc Com NPV Computers CGI Group Inc Com NPV Research In Motion Ltd Com NPV

352 iShares plc Annual Report

23,711 17,695 11,110 1,527

0.07

1,746

0.08

32,508

28,012 38,299 649

0.03

717 613

0.03 0.03

569

0.03

1,032

0.05

570

0.03

1,191 8,614

0.05 0.40

37,275 34,004 18,577 18,561

281

0.01

1,547

0.07

5,629 8,756

0.27 0.41

4,759 1,917 12,210 10,943

0.22 0.09 0.57 0.51

4,303 7,762 16,685 15,235 29,877 27,778 150,050 24,852 81,975 18,962 122,374 56,159 167,946 61,745 44,720 112,107 25,613 22,972

1,295

0.06

437

0.02

349

0.02

656 1,080

0.03 0.05

42,855 12,751 18,159 269,290 56,106 39,510 89,807

Canada (cont) Diversified financial services CI Financial Corp Com NPV IGM Financial Inc Com NPV TMX Group Inc Com NPV Drug retailers Shoppers Drug Mart Corp Com NPV Electricity Fortis Inc Com NPV TransAlta Corp Com NPV Fixed line telecommunications BCE Inc Com NPV Telus Corp Com NPV Food products Saputo Inc Com NPV Food retailers and wholesalers Alimentation Couche Tard Inc Com NPV Empire Co Ltd Com NPV George Weston Ltd Com NPV Loblaw Cos Ltd Com NPV Metro Inc Com NPV Forest products & paper Sino-Forest Corp Com NPV* Gold mining Agnico-Eagle Mines Ltd Com NPV Barrick Gold Corp Com NPV Centerra Gold Inc Com NPV Eldorado Gold Corp Com NPV Franco-Nevada Corp Com NPV Goldcorp Inc Com NPV Iamgold Corp Com NPV Kinross Gold Corp Com NPV New Gold Inc Com NPV Osisko Mining Corp Com NPV Yamana Gold Inc Com NPV Hand & machine tools Finning International Inc Com NPV Heavy construction SNC-Lavalin Group Inc Com NPV Insurance Great-West Lifeco Inc Com NPV Industrial Alliance Insurance & Financial Services Inc Com NPV Intact Financial Corp Com NPV Manulife Financial Corp Com NPV Power Corp of Canada Com NPV Power Financial Corp Com NPV Sun Life Financial Inc Com NPV

Fair value $'000

% of net asset value

527 817 485

0.03 0.04 0.02

1,385

0.07

926 811

0.04 0.04

1,533 1,961

0.07 0.09

769

0.04

571 245 501 586 789

0.03 0.01 0.02 0.03 0.04

-

0.00

1,013 7,194 500 1,258 841 5,958 852 1,864 724 568 1,952

0.05 0.34 0.02 0.06 0.04 0.28 0.04 0.09 0.03 0.02 0.09

745

0.04

872

0.04

999

0.05

349 1,099 3,382 1,423 1,102 1,980

0.01 0.05 0.16 0.07 0.05 0.09

www.iShares.com

As at 29 February 2012

Holding Investment

49,895 45,488 240,371 60,102 71,653 7,818 39,102 89,431 214,857 62,880

13,098 42,486 39,103 19,225 21,443 168,427 72,607 113,109 39,351 114,198 23,199 16,140 79,489 4,711 37,966 63,004 70,845 35,158 27,648 160,484 18,249 23,087 13,693 42,625

www.iShares.com

Canada (cont) Integrated oil & gas Husky Energy Inc Com NPV Imperial Oil Ltd Com NPV Suncor Energy Inc Com NPV Mining Cameco Corp Com NPV First Quantum Minerals Ltd Com NPV Inmet Mining Corp Com NPV Ivanhoe Mines Ltd Com NPV Teck Resources Ltd Com NPV Miscellaneous manufacturers Bombardier Inc Com NPV Mobile telecommunications Rogers Communications Inc Com NPV Multiutilities Canadian Utilities Ltd Com NPV Oil & gas ARC Resources Ltd Com NPV Athabasca Oil Sands Corp Com NPV Baytex Energy Corp Com NPV Bonavista Energy Corp Com NPV Canadian Natural Resources Ltd Com NPV Canadian Oil Sands Ltd Com NPV Cenovus Energy Inc Com NPV Crescent Point Energy Corp Com NPV Encana Corp Com NPV Enerplus Corp Com NPV MEG Energy Corp Com NPV Nexen Inc Com NPV Niko Resources Ltd Com NPV Pacific Rubiales Energy Corp Com NPV Pengrowth Energy Corp Com NPV Penn West Petroleum Ltd Com NPV Precision Drilling Corp Com NPV Progress Energy Resources Corp Com NPV Talisman Energy Inc Com NPV Tourmaline Oil Corp Com NPV Ultra Petroleum Corp Com NPV Vermilion Energy Inc Com NPV Pharmaceuticals Valeant Pharmaceuticals International Inc Com NPV

Fair value $'000

% of net asset value

Holding Investment

1,350 2,180 8,674

0.06 0.10 0.41

110,543 25,190 103,831

1,480

0.07

10,393 53,091

1,638 528 681 3,587

0.08 0.02 0.03 0.17

1,034

0.05

3,185

60,363 68,867 2,417

0.11

874

0.04

1,101

0.05

484 1,115 499

0.02 0.05 0.02

6,271 1,738 4,405

0.29 0.08 0.21

1,867 2,337 559 712 1,627 224

0.09 0.11 0.03 0.03 0.08 0.01

1,103 645 1,554 425

0.05 0.03 0.07 0.02

303 2,216 477 576 675

0.02 0.11 0.02 0.03 0.03

2,263

0.11

25,307

87,591 45,527

11,587 18,448

24,105 8,624 25,015 129,897

14,154 11,725 11,180 48,336

Canada (cont) Pipelines Enbridge Inc Com NPV Pembina Pipeline Corp Com NPV TransCanada Corp Com NPV Platinum & precious metals Pan American Silver Corp Com NPV Silver Wheaton Corp Com NPV Property & casualty insurance Fairfax Financial Holdings Ltd Com NPV Publishing Thomson Reuters Corp Com NPV Railroads Canadian National Railway Co Com NPV Canadian Pacific Railway Ltd Com NPV Real estate investment & services Brookfield Asset Management Inc Com NPV Brookfield Office Properties Inc Com NPV Real estate investment trusts H&R Real Estate Investment Trust Reits NPV RioCan Real Estate Investment Trust Reits NPV Retail Tim Hortons Inc Com NPV Software Open Text Corp Com NPV Specialty chemicals Agrium Inc Com NPV Potash Corp of Saskatchewan Inc Com NPV Specialty finance Onex Corp Com NPV Specialty retailers Canadian Tire Corp Ltd Com NPV Telecommunications Bell Aliant Inc Com NPV Transportation Viterra Inc Com NPV Total Canada

Cayman Islands Pharmaceuticals 17,782 Herbalife Ltd Com USD 0.002 Total Cayman Islands

Fair value $'000

% of net asset value

4,282 717 4,588

0.20 0.03 0.22

261 2,040

0.01 0.10

1,319

0.06

1,756

0.08

5,325

0.25

1,896

0.09

2,748

0.13

793

0.04

278

0.01

507

0.03

1,308

0.06

528

0.02

2,137

0.10

6,068

0.28

522

0.02

746

0.04

311

0.01

523 192,712

0.02 9.02

1,177 1,177

0.06 0.06

iShares plc Annual Report 353

As at 29 February 2012

Holding Investment Curacao Oil & gas services 203,668 Schlumberger Ltd Com USD 0.01 Total Cuuracao

96,770 63,032

74,134 25,682 40,444 24,306 47,795 20,936

Irelland Computers Accenture Plc Com USD 0.0000225 Seagate Technology Plc Com USD 0.00001 Health care services Covidien Plc Com USD 0.20 Insurance Willis Group Holdings Plc Com USD 0.000115 XL Group Plc Com USD 0.01 Miscellaneous manufacturers Cooper Industries Plc Com USD 0.01 Ingersoll-Rand Plc Com USD 1.00 Pharmaceuticals Warner Chilcott Plc Com USD 0.01 Total Ireland

Liberia Leisure time 18,260 Royal Caribbean Cruises Ltd Com USD 0.01 Total Liberia

Fair value $'000

15,809 15,809

% of net asset value

0.74 0.74

5,760

0.27

1,655

0.08

3,873

0.18

920 841

0.04 0.04

1,487 1,906

0.07 0.09

350 16,792

0.02 0.79

520 520

0.02 0.02

Holding Investment Singapore (cont) Semiconductors 33,193 Avago Technologies Ltd Com NPV Total Singapore

18,588 67,748 69,765

38,054 113,347

50,748

104,581 18,863 23,213 129,712

101,664

31,776 Netherlands Chemicals 42,639 LyondellBasell Industries NV Com USD 0.01 Media 9,096 Nielsen Holdings NV Com EUR 0.07 Total Netherlands Panama Leisure time 71,478 Carnival Corp Com USD 0.01 Total Panama Singapore Electronics 127,649 Flextronics International Ltd Com NPV

30,196 1,840 268 2,108

0.09 0.01 0.10

2,163 2,163

0.10 0.10

900

0.04

12,421

14,722 43,426 57,886 40,117 39,939 55,165 26,140 9,592 36,697 114,628 13,839 49,147

354 iShares plc Annual Report

Switzerland Electronic equipment Garmin Ltd Com CHF 10.00 TE Connectivity Ltd Com CHF 1.37 Tyco International Ltd Com CHF 6.70 Oil & gas Noble Corp Com CHF 3.28 Weatherford International Ltd Com USD 1.16 Property & casualty insurance ACE Ltd Com CHF 30.57 Total Switzerland United States Aerospace Boeing Co Com USD 5.00 Goodrich Corp Com USD 5.00 Rockwell Collins Inc Com USD 0.01 United Technologies Corp Com USD 1.00 Agriculture Archer-Daniels-Midland Co Com NPV Airlines Delta Air Lines Inc Com USD 0.0001 Southwest Airlines Co Com USD 1.00 United Continental Holdings Inc Com 0.01 Apparel retailers Abercrombie & Fitch Co Com USD 0.01 Coach Inc Com USD 0.01 Gap Inc Com USD 0.05 Kohl's Corp Com USD 0.01 Ltd Brands Inc Com USD 0.50 NIKE Inc Com NPV Nordstrom Inc Com NPV Ralph Lauren Corp Com USD 0.01 Ross Stores Inc Com USD 0.01 TJX Cos Inc Com USD 1.00 VF Corp Com NPV Auto manufacturers Paccar Inc Com USD 1.00

Fair value $'000

% of net asset value

1,248 2,148

0.06 0.10

877 2,477

0.04 0.11

3,616

0.17

1,528

0.07

1,809

0.09

3,639 13,946

0.17 0.65

7,835 2,376 1,376

0.37 0.11 0.06

10,879

0.51

3,172

0.15

311

0.02

271

0.01

256

0.01

674 3,250 1,352 1,993 1,859 5,955 1,402 1,666 1,957 4,197 2,022

0.03 0.15 0.06 0.09 0.09 0.28 0.07 0.08 0.09 0.20 0.09

2,261

0.11

www.iShares.com

As at 29 February 2012

Holding Investment

13,324 17,006 36,760 102,267 20,988 13,538

531,963 117,472 35,535 1,514,958 189,431 104,932 70,023 28,492 435,718 30,343 136,644 72,189 85,949 585,814 143,208 16,882 217,251 73,268 34,817 67,834 79,861 181,282 80,766 293,563 754,207 21,153 www.iShares.com

United States (cont) Auto parts & equipment Autoliv Inc Com USD 1.00 BorgWarner Inc Com USD 0.01 Goodyear Tire & Rubber Co Com NPV Johnson Controls Inc Com USD 0.01388 O'Reilly Automotive Inc Com USD 0.01 TRW Automotive Holdings Corp Com USD 0.01 Automobiles Ford Motor Co Com USD 0.01 General Motors Co Com USD 0.01 Harley-Davidson Inc Com USD 0.01 Banks Bank of America Corp Com USD 0.01 Bank of New York Mellon Corp Com USD 0.01 BB&T Corp Com USD 5.00 Capital One Financial Corp Com USD 0.01 CIT Group Inc Com USD 0.01 Citigroup Inc Com USD 0.01 Comerica Inc Com USD 5.00 Fifth Third Bancorp Com NPV Goldman Sachs Group Inc Com USD 0.01 Hudson City Bancorp Inc Com USD 0.01 JPMorgan Chase & Co Com USD 1.00 KeyCorp Com USD 1.00 M&T Bank Corp Com USD 0.50 Morgan Stanley Com USD 0.01 New York Community Bancorp Inc Com USD 0.01 Northern Trust Corp Com USD 1.67 People's United Financial Inc Com USD 0.01 PNC Financial Services Group Inc Com USD 5.00 Regions Financial Corp Com USD 0.01 SunTrust Banks Inc Com USD 1.00 US Bancorp Com USD 0.01 Wells Fargo & Co Com USD 1.67 Beverages Beam Inc Com USD 3.13

Fair value $'000

887 1,408

% of net asset value

0.04 0.07

Holding Investment

12,588

472

0.02

308,728 50,656

3,337

0.16

28,654

1,816

0.08

33,966

619 6,580 3,056 1,655

0.03

19,577

0.31 0.14 0.08

24,266 22,625 238,338

12,074

0.57

4,188 3,069

0.20 0.14

3,544 1,161 14,505 901 1,858

0.17 0.05 0.68 0.04 0.09

8,315

0.39

588

0.03

22,993 1,160 1,378 4,026

1.08 0.05 0.06 0.19

953

0.04

1,546

0.07

854

0.04

4,753

0.22

1,044 1,855 8,631 23,599

0.05 0.09 0.40 1.11

1,165

0.05

27,042 119,241 35,538 68,931 115,908 18,684 26,532 29,202

32,476 94,012 311,424 97,668 110,921 17,983 31,203 21,555 16,602 276,975 71,566 13,212 48,853 156,978 78,614

United States (cont) Beverages (cont) Brown-Forman Corp Com USD 0.15 Coca-Cola Co Com USD 0.25 Coca-Cola Enterprises Inc Com USD 1.00 Constellation Brands Inc Com USD 0.01 Dr Pepper Snapple Group Inc Com USD 0.01 Green Mountain Coffee Roasters Inc Com USD 0.10 Molson Coors Brewing Co Com USD 0.01 Monster Beverage Corp Com USD 0.005 PepsiCo Inc Com USD 0.02 Biotechnology Alexion Pharmaceuticals Inc Com USD 0.0001 Amgen Inc Com USD 0.0001 Biogen Idec Inc Com USD 0.0005 Celgene Corp Com USD 0.01 Gilead Sciences Inc Com USD 0.001 Illumina Inc Com USD 0.01 Life Technologies Corp Com USD 0.01 Vertex Pharmaceuticals Inc Com USD 0.01 Broadcasting & entertainment Cablevision Systems Corp Com USD 0.01 CBS Corp Com USD 0.001 Comcast Corp Com USD 1.00 Comcast Corp Com USD 1.00 DirecTV Com USD 0.01 Discovery Communications Inc Com USD 0.01 DISH Network Corp Com USD 0.01 Liberty Global Inc Class 'A' Com USD 0.01 Liberty Global Inc Com USD 0.01 News Corp Com USD 0.01 News Corp Class 'B' Com USD 0.01 Scripps Networks Interactive Inc Com USD 0.01 Time Warner Cable Inc Com USD 0.01 Time Warner Inc Com USD 0.01 Viacom Inc Com USD 0.001

Fair value $'000

% of net asset value

1,028 21,549

0.05 1.01

1,464

0.07

626

0.03

1,292

0.06

1,272

0.06

1,066

0.05

1,294 14,989

0.06 0.70

2,263 8,102 4,139 5,054

0.11 0.38 0.19 0.24

5,273 958

0.25 0.04

1,255

0.06

1,136

0.05

462 2,811 9,150 2,792 5,138

0.02 0.13 0.43 0.13 0.24

839 910

0.04 0.04

1,081 796 5,501

0.05 0.04 0.26

1,452

0.07

597

0.03

3,876 5,841 3,744

0.18 0.27 0.18

iShares plc Annual Report 355

As at 29 February 2012

Holding Investment

45,839 264,911 65,050 19,064 24,037 64,202 6,205 96,386 18,958 286,327 6,880 46,803 22,514 7,647 23,427 28,213 38,711 32,126 11,946 23,709 177,471 21,946 141,745 80,120 45,958 45,341 13,611

14,873

28,146 32,055 31,996

United States (cont) Broadcasting & entertainment (cont) Virgin Media Inc Com USD 0.01 Walt Disney Co Com USD 0.01 Broadline retailers Costco Wholesale Corp Com USD 0.005 Dollar Tree Inc Com USD 0.01 JC Penney Co Inc Com USD 0.50 Macy's Inc Com USD 0.01 Sears Holdings Corp Com USD 0.01 Target Corp Com USD 0.0833 Urban Outfitters Inc Com USD 0.0001 Wal-Mart Stores Inc Com USD 0.10 Building materials and fixtures Martin Marietta Materials Inc Com USD 0.01 Masco Corp Com USD 1.00 Toll Brothers Inc Com USD 0.01 Business support services Alliance Data Systems Corp Com USD 0.01 Iron Mountain Inc Com USD 0.01 RR Donnelley & Sons Co Com USD 1.25 SAIC Inc Com USD 0.0001 Chemicals Air Products & Chemicals Inc Com USD 1.00 Airgas Inc Com USD 0.01 Celanese Corp Com USD 0.0001 Dow Chemical Co Com USD 2.50 Eastman Chemical Co Com USD 0.01 EI du Pont de Nemours & Co Com USD 0.30 Monsanto Co Com USD 0.01 Mosaic Co Com USD 0.01 Praxair Inc Com USD 0.01 Sherwin-Williams Co Com USD 1.00 Clothing & accessories Lululemon Athletica Inc Com USD 0.01 Coal Alpha Natural Resources Inc Com USD 0.01 Arch Coal Inc Com USD 0.01 Consol Energy Inc Com USD 0.01

356 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

1,154 11,124

0.05 0.52

42,291

5,599 1,687 952 2,438

0.26 0.08 0.04 0.11

19,165 73,572

432 5,455

0.02 0.26

538 16,933

0.03 0.79

9,231

9,819 45,975 35,105 12,326 49,043 31,166 20,665

591 556 528

0.03 0.03 0.02

15,116 24,789 19,239

928 726

0.04 0.04

390 473

0.02 0.02

2,898 983 1,127 5,947

0.14 0.05 0.05 0.28

1,187

0.05

7,206 6,200 2,653 4,943

0.34 0.29 0.12 0.23

1,406

0.07

997

0.05

23,214

139,290 45,596 246,697 315,357 311,631 6,332 179,429 53,806 35,943 21,597 25,314 35,043

164,265

522 435 1,146

0.02 0.02 0.05

81,450 16,575 78,405

Unitted States (cont) Coal (cont) Peabody Energy Corp Com USD 0.01 Walter Energy Inc Com USD 0.01 Commercial services Apollo Group Inc Com NPV Automatic Data Processing Inc Com USD 0.10 DeVry Inc Com USD 0.01 H&R Block Inc Com NPV Hertz Global Holdings Inc Com USD 0.01 Manpower Inc Com USD 0.01 Paychex Inc Com USD 0.01 Quanta Services Inc Com USD 0.00001 Robert Half International Inc Com USD 0.001 SEI Investments Co Com USD 0.01 Total System Services Inc Com USD 0.10 Verisk Analytics Inc Com USD 0.001 Computer serrvices Computer Sciences Corp Com USD 1.00 Computers Apple Inc Com NPV Cognizant Technology Solutions Corp Com USD 0.01 Dell Inc Com USD 0.01 EMC Corp Com USD 0.01 Hewlett-Packard Co Com USD 0.01 IHS Inc Com USD 0.01 International Business Machines Corp Com USD 0.20 NetApp Inc Com USD 0.001 SanDisk Corp Com USD 0.001 Synopsys Inc Com USD 0.01 Teradata Corp Com USD 0.01 Western Digital Corp Com USD 0.01 Consumer finance American Express Co Com USD 0.20 Discover Financial Services Com USD 0.01 Mastercard Inc Com USD 0.0001 SLM Corp Com USD 0.20

Fair value $'000

% of net asset value

1,473 598

0.07 0.03

817

0.04

3,996 349 749

0.19 0.02 0.03

502 531 1,535

0.02 0.02 0.07

652

0.03

587 298

0.03 0.01

542

0.03

837

0.04

737

0.03

75,435

3.53

3,235 4,265 8,732 7,891 600

0.15 0.20 0.41 0.37 0.03

35,301 2,313 1,778 658 1,685

1.65 0.11 0.08 0.03 0.08

1,375

0.07

8,683

0.41

2,444 6,956 1,235

0.11 0.33 0.06

www.iShares.com

As at 29 February 2012

Holding Investment

78,065 94,304 21,822 26,517 23,651 412,880

46,202 17,802 44,448 41,370 55,718 33,578 45,827 110,597

14,944 40,094 7,778 25,531 9,083 17,778 75,812 39,114 29,833

101,300 50,009 1,587,673 17,391 24,396 112,764 www.iShares.com

United States (cont) Consumer finance (cont) Visa Inc Com USD 0.0001 Western Union Co Com USD 0.01 Containers & packaging Ball Corp Com NPV Owens-Illinois Inc Com USD 0.01 Sealed Air Corp Com USD 0.10 Cosmetics & personal care Procter & Gamble Co Com USD 1.00 Defence General Dynamics Corp Com USD 1.00 L-3 Communications Holdings Inc Com USD 0.01 Lockheed Martin Corp Com USD 1.00 Northrop Grumman Corp Com USD 1.00 Raytheon Co Com USD 0.01 Delivery services Expeditors International of Washington Inc Com USD 0.01 FedEx Corp Com USD 0.10 United Parcel Service Inc Com USD 0.01 Distribution & wholesale Arrow Electronics Inc Com USD 1.00 Fastenal Co Com USD 0.01 Fossil Inc Com USD 0.01 Genuine Parts Co Com USD 1.00 WW Grainger Inc Com USD 0.50 Diversified financial services Eaton Vance Corp Com USD 0.00390625 State Street Corp Com USD 1.00 T Rowe Price Group Inc Com USD 0.20 TD Ameritrade Holding Corp Com USD 0.01 Diversified industrials 3M Co Com USD 0.01 Eaton Corp Com USD 0.50 General Electric Co Com USD 0.06 Drug retailers Omnicare Inc Com USD 1.00 Electrical components & equipment AMETEK Inc Com USD 0.01 Emerson Electric Co Com USD 0.50

Fair value $'000

% of net asset value

Holding Investment

9,081 1,647

0.42 0.08

10,554

875 634 463

0.04 0.03 0.02

99,920 14,405 72,299

27,894

1.31

40,448 43,479

3,384

0.16

1,251

0.06

3,930

0.18

2,474 2,816

0.12 0.13

1,465 4,123

0.07 0.19

8,504

0.40

600 2,111 948 1,601 1,885

0.03 0.10 0.04 0.07 0.09

512 3,201

0.02 0.15

31,976

2,409

0.11

557

0.03

8,871 2,610 30,245

0.41 0.12 1.42

611

0.03

1,161

0.05

5,671

0.27

86,837 25,333 204,616 49,015 26,793 98,965 62,805 61,313 22,955 41,316 13,470 29,279 57,737 14,156 86,800 44,263 78,719 128,864 72,860 52,317 26,104 19,849 24,001 113,451 57,448 13,728 24,454 18,176 19,683 11,976

Fair value $'000

United States (cont) Electrical components & equipment (cont) Energizer Holdings Inc Com USD 0.01 807 Electricity AES Corp Com USD 0.01 1,353 Alliant Energy Corp Com USD 0.01 614 American Electric Power Co Inc Com USD 6.50 2,718 Calpine Corp Com USD 0.001 619 Consolidated Edison Inc Com USD 0.10 2,525 Constellation Energy Group Inc Com NPV 1,159 Dominion Resources Inc Com NPV 4,384 DTE Energy Co Com NPV 1,368 Duke Energy Corp Com USD 0.001 4,281 Edison International Com NPV 2,052 Entergy Corp Com USD 0.01 1,785 Exelon Corp Com NPV 3,867 FirstEnergy Corp Com USD 0.10 2,782 NextEra Energy Inc Com USD 0.01 3,649 Northeast Utilities Com USD 5.00 824 NRG Energy Inc Com USD 0.01 706 NSTAR Com USD 1.00 632 Pepco Holdings Inc Com USD 0.01 569 PG&E Corp Com NPV 2,408 Pinnacle West Capital Corp Com NPV 666 PPL Corp Com USD 0.01 2,477 Progress Energy Inc Com NPV 2,350 Public Service Enterprise Group Inc Com NPV 2,424 Southern Co Com USD 5.00 5,694 Xcel Energy Inc Com USD 2.50 1,929 Electronics Agilent Technologies Inc Com USD 0.01 2,280 Amphenol Corp Com USD 0.001 1,461 Avnet Inc Com USD 1.00 709 FLIR Systems Inc Com USD 0.01 628 Honeywell International Inc Com USD 1.00 6,754 Thermo Fisher Scientific Inc Com USD 1.00 3,253 Waters Corp Com USD 0.01 1,223 Engineering & construction Fluor Corp Com USD 0.01 1,479 Jacobs Engineering Group Inc Com USD 1.00 840 KBR Inc Com USD 0.001 715 URS Corp Com USD 0.01 523

% of net asset value

0.04 0.06 0.03 0.13 0.03 0.12 0.05 0.21 0.06 0.20 0.10 0.08 0.18 0.13 0.17 0.04 0.03 0.03 0.03 0.11 0.03 0.12 0.11 0.11 0.27 0.09

0.11 0.07 0.03 0.03 0.31 0.15 0.06 0.07 0.04 0.03 0.03

iShares plc Annual Report 357

As at 29 February 2012

Holding Investment

7,911 45,585

45,935 12,366 71,056

14,204 22,387

890,550 92,438 149,259 29,436 423,248

33,000 62,287 97,235 26,426 49,838 22,082 17,860 40,037 252,404 90,329 15,687 6,601 52,586 88,329 89,049 39,992 22,193 62,416 29,781

64,517

United States (cont) Entertainmen nt Dolby Laboratories Inc Com USD 0.001 International Game Technology Com USD 0.00015625 Environmental control Republic Services Inc Com USD 0.01 Stericycle Inc Com USD 0.01 Waste Management Inc Com USD 0.01 Financial services BlackRock Inc Com USD 0.01** Franklin Resources Inc Com USD 0.10 Fixed line telecommunications AT&T Inc Com USD 1.00 CenturyLink Inc Com USD 1.00 Frontier Communications Corp Com USD 0.25 Leucadia National Corp Com USD 1.00 Verizon Communications Inc Com USD 0.10 Food Campbell Soup Co Com USD 0.04 ConAgra Foods Inc Com USD 5.00 General Mills Inc Com USD 0.10 Hershey Co Com USD 1.00 HJ Heinz Co Com USD 0.25 Hormel Foods Corp Com USD 0.06 JM Smucker Co Com NPV Kellogg Co Com USD 0.25 Kraft Foods Inc Com NPV Kroger Co Com USD 1.00 McCormick & Co Inc Com NPV Ralcorp Holdings Inc Com USD 0.01 Safeway Inc Com USD 0.01 Sara Lee Corp Com USD 0.01 Sysco Corp Com USD 1.00 Tyson Foods Inc Com USD 0.10 Whole Foods Market Inc Com NPV Forest products & paaper International Paper Co Com USD 1.00 MeadWestvaco Corp Com USD 0.01 Gas distribution CenterPoint Energy Inc Com USD 0.01

358 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

32,765 301

0.02

684

0.03

1,368 1,073

0.06 0.05

2,486

0.12

2,826

0.13

2,638

0.13

27,215 3,721

1.27 0.17

682

0.03

839

0.04

16,134

0.76

1,100 1,634 3,725 1,604 2,627 629 1,345 2,096 9,602 2,149 791

0.05 0.08 0.18 0.08 0.12 0.03 0.06 0.10 0.45 0.10 0.04

492 1,128 1,788 2,618 756 1,791

0.02 0.05 0.08 0.12 0.04 0.08

2,194

0.10

902

0.04

45,874 15,185 98,086

24,032

53,156 43,032 6,123 22,239 14,687 20,866 25,062 15,225 25,615 161,695 54,187 87,707 33,022 225,314 17,064 6,066 159,453 49,505 44,675 42,732 11,380 235,031 189,396 54,863

1,257

0.06

42,416

United States (cont) Gas distribution (cont) MDU Resources Group Inc Com USD 1.00 NiSource Inc Com USD 0.01 Oneok Inc Com USD 0.01 Spectra Energy Corp Com USD 0.001 Hand & machine tools Stanley Black & Decker Inc Com USD 2.50 Health care providers Aetna Inc Com USD 0.01 Cigna Corp Com USD 0.25 Covance Inc Com USD 0.01 Coventry Health Care Inc Com USD 0.01 DaVita Inc Com USD 0.001 HCA Holdings Inc Com USD 0.01 Humana Inc Com USD 0.17 Laboratory Corp of America Holdings Com USD 0.10 Quest Diagnostics Inc Com USD 0.01 UnitedHealth Group Inc Com USD 0.01 WellPoint Inc Com USD 0.01 Healthcare products Baxter International Inc Com USD 1.00 Becton Dickinson and Co Com USD 1.00 Boston Scientific Corp Com USD 0.01 Edwards Lifesciences Corp Com USD 1.00 Intuitive Surgical Inc Com USD 0.001 Medtronic Inc Com USD 0.10 St Jude Medical Inc Com USD 0.10 Stryker Corp Com USD 0.10 Home construction DR Horton Inc Com USD 0.01 Home furnishings Whirlpool Corp Com USD 1.00 Home improvement retailers Home Depot Inc Com USD 0.05 Lowe's Cos Inc Com USD 0.50 Hotels Las Vegas Sands Corp Com USD 0.001 Marriott International Inc Com USD 0.01

Fair value $'000

% of net asset value

711 1,100 1,255

0.03 0.05 0.06

3,079

0.15

1,844

0.09

2,486 1,898 292

0.12 0.09 0.01

727 1,270 557 2,184

0.03 0.06 0.03 0.10

1,368

0.06

1,487

0.07

9,015 3,555

0.42 0.17

5,098

0.24

2,517

0.12

1,402

0.07

1,247

0.06

3,104 6,072 2,084 2,396

0.14 0.28 0.10 0.11

612

0.03

860

0.04

11,181 5,373

0.52 0.25

3,051

0.14

1,496

0.07

www.iShares.com

As at 29 February 2012

Holding Investment

44,465 28,757 12,028

58,868 43,427

14,497 8,343 14,606 7,687 151,740 72,925 71,238 44,179 14,211 136,255 31,930 63,735 64,427 47,857 82,079 155,655 51,339 70,517 15,603 49,919 17,894 300,938 195,972 730,517 16,146 45,134 107,452 www.iShares.com

United States (cont) Hotels (cont) MGM Resorts International Com USD 0.01 Starwood Hotels & Resorts Worldwide Inc Com USD 0.01 Wynn Resorts Ltd Com USD 0.01 Household goods & home construction Kimberly-Clark Corp Com USD 1.25 Newell Rubbermaid Inc Com USD 1.00 Industrial maachinery AGCO Corp Com USD 0.01 Flowserve Corp Com USD 1.25 Pentair Inc Com USD 0.17 SPX Corp Com USD 10.00 Industrial metals & mining Alcoa Inc Com USD 1.00 Insurrance Aflac Inc Com USD 0.10 American International Group Inc Com USD 2.50 AON Corp Com USD 1.00 Assurant Inc Com USD 0.01 Berkshire Hathaway Inc Com USD 0.0033 Fidelity National Financial Inc Com USD 0.0001 Genworth Financial Inc Com USD 0.001 Hartford Financial Services Group Inc Com USD 0.01 Lincoln National Corp Com NPV Marsh & McLennan Cos Inc Com USD 1.00 MetLife Inc Com USD 0.01 Principal Financial Group Inc Com USD 0.01 Prudential Financial Inc Com USD 0.01 Torchmark Corp Com USD 1.00 Unum Group Com USD 0.10 WR Berkley Corp Com USD 0.20 Integrated oil & gas Chevron Corp Com USD 0.75 ConocoPhillips Com USD 0.01 Exxon Mobil Corp Com NPV Helmerich & Payne Inc Com USD 0.10 Hess Corp Com USD 1.00 Marathon Oil Corp Com USD 1.00

Fair value $'000

% of net asset value

Holding Investment

54,275 612 1,550 1,426

0.03 0.07 0.07

27,646 16,410 53,932 176,315 12,406 12,159 38,226 91,064

4,290

0.20

795

0.04

748 984 566 562

0.03 0.04 0.03 0.03

1,543

0.07

7,912 7,406 105,880 26,039 180,211

3,446

0.16

35,472

2,079 2,068 604

0.10 0.10 0.03

157,130

10,693

0.50

551

0.03

21,364 18,623

579

0.03

43,105

1,335 1,189

0.06 0.06

16,575

2,562 6,000

0.12 0.28

1,419

0.07

4,314 756 1,151 640

0.20 0.03 0.05 0.03

32,847 15,006 63,204

1.54 0.70 2.96

989 2,930 3,643

0.05 0.14 0.17

9,871 11,051

20,468 49,441 21,481

27,804 63,803 21,412 14,161

97,147 16,554 25,212

United States (cont) Integrated oil & gas (cont) Marathon Petroleum Corp Com USD 0.01 Murphy Oil Corp Com USD 1.00 Rowan Cos Inc Com USD 0.125 Internet Amazon.com Inc Com USD 0.01 eBay Inc Com USD 0.001 Expedia Inc Com USD 0.001 F5 Networks Inc Com NPV Google Inc Com USD 0.001 Liberty Interactive Corp Com USD 0.01 Netflix Inc Com USD 0.001 priceline.com Inc Com USD 0.008 Symantec Corp Com USD 0.01 VeriSign Inc Com USD 0.001 Yahoo! Inc Com USD 0.001 Investment services Ameriprise Financial Inc Com USD 0.01 Charles Schwab Corp Com USD 0.01 CME Group Inc Com USD 0.01 IntercontinentalExchange Inc Com USD 0.01 Legg Mason Inc Com USD 0.10 NASDAQ OMX Group Inc Com USD 0.01 NYSE Euronext Com USD 0.01 Iron & steel Allegheny Technologies Inc Com USD 0.10 Cliffs Natural Resources Inc Com USD 0.13 Nucor Corp Com USD 0.40 United States Steel Corp Com USD 1.00 Machinery — diversified Cummins Inc Com USD 2.50 Deere & Co Com USD 1.00 Rockwell Automation Inc Com USD 1.00 Roper Industries Inc Com USD 0.01 Machinery, construction & mining Caterpillar Inc Com USD 1.00 Joy Global Inc Com USD 1.00 Xylem Inc Com USD 0.01

Fair value $'000

% of net asset value

2,256 1,767 605

0.10 0.08 0.03

9,685 6,301 422 1,519 23,619

0.45 0.29 0.02 0.07 1.11

1,708 876 4,642 1,889 962 2,671

0.08 0.04 0.22 0.09 0.05 0.12

1,978

0.09

2,182 2,858

0.10 0.14

1,525 586

0.07 0.03

490 1,283

0.02 0.06

727

0.03

1,298 2,151

0.06 0.10

584

0.03

3,353 5,288

0.15 0.25

1,712

0.08

1,301

0.06

11,090 1,439 654

0.52 0.07 0.03

iShares plc Annual Report 359

As at 29 February 2012

Holding Investment

18,284 16,319 564,128

63,652 41,966 30,888 13,960 18,498 9,969 17,975 28,752

13,751 39,362 21,424 142,596 74,580 19,431 87,548 27,872 67,049 21,274 17,499 24,668 41,404 32,468 25,030 431,594 39,510 11,764

United States (cont) Media Discovery Communications Inc Com USD 0.01 Liberty Media Corp - Liberty Capital Com USD 0.01 Sirius XM Radio Inc Com USD 0.001 Media agencies Interpublic Group of Cos Inc Com USD 0.10 Omnicom Group Inc Com USD 0.15 Medical equipment CareFusion Corp Com USD 0.01 CR Bard Inc Com USD 0.25 Dentsply International Inc Com USD 0.01 Patterson Cos Inc Com USD 0.01 Varian Medical Systems Inc Com USD 1.00 Zimmer Holdings Inc Com USD 0.01 Medical supplies Henry Schein Inc Com USD 0.01 Hologic Inc Com USD 0.01 Metal products Precision Castparts Corp Com NPV Mining Freeport-McMoRan Copper & Gold Inc Com USD 0.10 Newmont Mining Corp Com USD 1.60 Vulcan Materials Co Com USD 1.00 Miscellaneous manufacturers Danaher Corp Com USD 0.01 Dover Corp Com USD 1.00 Illinois Tool Works Inc Com USD 0.01 Leggett & Platt Inc Com USD 0.01 Pall Corp Com USD 0.10 Parker Hannifin Corp Com USD 0.50 Textron Inc Com USD 0.125 Mobile telecommunications MetroPCS Communications Inc Com USD 0.0001 NII Holdings Inc Com USD 0.001 Sprint Nextel Corp Com USD 2.00 Multiutilities Ameren Corp Com USD 0.01 Integrys Energy Group Inc Com USD 1.00

360 iShares plc Annual Report

Fair value $'000

% of net asset value

794

0.03

1,466

0.07

1,269

0.06

Holding Investment

15,804 35,900 35,228

21,326 19,754

746 2,074

0.03 0.10

797 1,306

0.04 0.06

715 318

0.03 0.01

1,173

0.06

1,746

0.08

1,018 816

0.05 0.04

3,586

0.17

56,259

6,066

0.28

60,640 10,974

4,428 866

0.21 0.04

4,622 1,784

0.22 0.08

3,735 481 1,108

0.18 0.02 0.05

34,384 209,315 75,579 58,356 27,165 93,850 12,662 14,191 6,763

10,660 39,510 22,232 31,245 20,216 26,261 121,538 15,759

2,215 1,138

334 448 1,066

0.11 0.05

0.02 0.02 0.05

1,267

0.06

612

0.03

21,277 26,910 22,905 52,923 21,601 89,782 15,368

United States (cont) Multiutilities (cont) Scana Corp Com NPV Sempra Energy Com NPV Wisconsin Energy Corp Com USD 0.01 Nondurable household products Church & Dwight Co Inc Com USD 1.00 Clorox Co Com USD 1.00 Office & business equipment Pitney Bowes Inc Com USD 1.00 Xerox Corp Com USD 1.00 Oil & gas Anadarko Petroleum Corp Com USD 0.10 Apache Corp Com USD 0.63 Cabot Oil & Gas Corp Com USD 0.10 Chesapeake Energy Corp Com USD 0.01 Cimarex Energy Co Com USD 0.01 Concho Resources Inc Com USD 0.001 Continental Resources Inc Com USD 0.01 Denbury Resources Inc Com USD 0.001 Devon Energy Corp Com USD 0.10 Diamond Offshore Drilling Inc Com USD 0.01 Energen Corp Com USD 0.01 EOG Resources Inc Com USD 0.01 EQT Corp Com NPV HollyFrontier Corp Com USD 0.01 Newfield Exploration Co Com USD 0.01 Noble Energy Inc Com USD 3.33 Occidental Petroleum Corp Com USD 0.20 Pioneer Natural Resources Co Com USD 0.01 Plains Exploration & Production Co Com USD 0.01 QEP Resources Inc Com USD 0.01 Range Resources Corp Com USD 0.01 Southwestern Energy Co Com USD 0.01 Sunoco Inc Com USD 1.00 Valero Energy Corp Com USD 0.01 Whiting Petroleum Corp Com USD 0.001

Fair value $'000

% of net asset value

711 2,127

0.03 0.10

1,201

0.06

1,018 1,336

0.05 0.06

623 1,725

0.03 0.08

6,354 6,296

0.30 0.30

946

0.04

2,346 1,022

0.11 0.05

1,515

0.07

613

0.03

1,120 4,445

0.05 0.21

751 567 4,496 1,179 1,019

0.04 0.03 0.21 0.06 0.05

727 2,565

0.03 0.12

12,687

0.59

1,725

0.08

937 919

0.04 0.04

1,458

0.07

1,750 835 2,199

0.08 0.04 0.10

902

0.04

www.iShares.com

As at 29 February 2012

Holding Investment

64,876 37,112 36,983 136,566 62,962 23,346

20,241 10,699 68,831 73,096 37,226

234,308 47,460 40,452 256,275 51,775 157,130 69,870 42,771 24,917 412,981 37,014 30,638 57,954 465,485 65,046 12,409 1,172,242 19,805

117,704 16,278 13,536 84,969 www.iShares.com

United States (cont) Oil & gas services Baker Hughes Inc Com USD 1.00 Cameron International Corp Com USD 0.01 FMC Technologies Inc Com USD 0.01 Halliburton Co Com USD 2.50 National Oilwell Varco Inc Com USD 0.01 Superior Energy Services Inc Com USD 0.005 Packaging & containers Crown Holdings Inc Com USD 5.00 Rock-Tenn Co Com USD 0.01 Personal products Avon Products Inc Com USD 0.25 Colgate-Palmolive Co Com USD 1.00 Estee Lauder Cos Inc Com USD 0.01 Pharmaceuticals Abbott Laboratories Com NPV Allergan Inc Com USD 0.01 AmerisourceBergen Corp Com USD 0.01 Bristol-Myers Squibb Co Com USD 0.10 Cardinal Health Inc Com NPV Eli Lilly & Co Com NPV Express Scripts Inc Com USD 0.01 Forest Laboratories Inc Com USD 0.10 Hospira Inc Com USD 0.01 Johnson & Johnson Com USD 1.00 McKesson Corp Com USD 0.01 Mead Johnson Nutrition Co Com USD 0.01 Medco Health Solutions Inc Com USD 0.01 Merck & Co Inc Com USD 0.50 Mylan Inc Com USD 0.50 Perrigo Co Com NPV Pfizer Inc Com USD 0.05 Watson Pharmaceuticals Inc Com USD 0.003 Pipelines El Paso Corp Com USD 3.00 Kinder Morgan Inc Com USD 0.01 Kinder Morgan Management LLC Com NPV Williams Cos Inc Com USD 1.00

Fair value $'000

% of net asset value

3,263

0.15

2,067

0.10

1,865 4,994

0.09 0.24

5,193

0.24

684

0.03

Holding Investment

77,644 42,967 20,146 48,548 91,160 64,464 10,310 7,280

748 754

0.03 0.04

45,300

1,285

0.06

756

6,814

0.32

2,179

0.10

13,267 4,249

0.62 0.20

1,511

0.07

8,247 2,152 6,163 3,726

0.39 0.10 0.29 0.17

1,391 887 26,848 3,090

0.07 0.04 1.26 0.15

2,382

0.11

3,915 17,768 1,525 1,279 24,746

0.18 0.83 0.07 0.06 1.16

170,853 52,251 73,330 43,460

1,155

0.05

3,272 573

0.15 0.03

1,085 2,536

0.05 0.12

59,355 142,072 14,068 21,332 14,933 38,010 43,539 9,832 65,450 61,184 28,513 100,536 61,679 17,404 19,845 24,192

United States (cont) Property & casualty insurance Allstate Corp Com USD 0.01 Chubb Corp Com USD 1.00 Cincinnati Financial Corp Com USD 2.00 Loews Corp Com USD 0.01 Progressive Corp Com USD 1.00 Travelers Cos Inc Com NPV Publishing Avery Dennison Corp Com USD 1.00 Dun & Bradstreet Corp Com USD 0.01 McGraw-Hill Cos Inc Com USD 1.00 Washington Post Co Com USD 1.00 Railroads CSX Corp Com USD 1.00 Norfolk Southern Corp Com USD 1.00 Union Pacific Corp Com USD 2.50 Real estate CBRE Group Inc Com USD 0.01 Real estate investment trusts American Tower Corp Reits USD 0.01 Annaly Capital Management Inc Reits USD 0.01 AvalonBay Communities Inc Reits USD 0.01 Boston Properties Inc Reits USD 0.01 Digital Realty Trust Inc Reits USD 0.01 Duke Realty Corp Reits USD 0.01 Equity Residential Reits USD 0.01 Federal Realty Investment Trust Reits USD 0.01 General Growth Properties Inc Reits USD 0.01 HCP Inc Reits USD 1.00 Health Care REIT Inc Reits USD 1.00 Host Hotels & Resorts Inc Reits USD 0.01 Kimco Realty Corp Reits USD 0.01 Liberty Property Trust Reits USD 0.001 Macerich Co Reits USD 0.01 Plum Creek Timber Co Inc Reits USD 0.01

Fair value $'000

% of net asset value

2,440 2,919

0.11 0.14

708 1,900 1,953 3,735

0.03 0.09 0.09 0.18

314

0.01

601

0.03

2,109

0.10

298

0.01

3,588

0.16

3,600 8,083

0.17 0.38

796

0.04

3,714

0.17

2,358

0.11

1,823

0.09

2,165

0.10

1,083 528 2,475

0.05 0.03 0.12

937

0.04

1,064 2,417

0.05 0.11

1,552

0.07

1,589 1,134

0.07 0.05

591 1,071

0.03 0.05

947

0.04

iShares plc Annual Report 361

As at 29 February 2012

Holding Investment

68,960 21,813 18,171 13,507 44,065 40,899 24,596 80,941 22,549 155,021 112,095 69,772 4,068 33,616 4,637 204,458 25,674 137,909 102,014 46,053 44,970 196,126 72,324 14,227 5,613 794,845 24,975 21,539 34,249 86,112 44,274 31,813 135,821 87,502

United States (cont) Real estate investment trusts (cont) ProLogis Inc Reits USD 0.01 Public Storage Reits USD 0.10 Rayonier Inc Reits NPV Regency Centers Corp Reits USD 0.01 Simon Property Group Inc Reits USD 0.0001 Ventas Inc Reits USD 0.25 Vornado Realty Trust Reits USD 0.04 Weyerhaeuser Co Reits USD 1.25 Restaurants & bars Darden Restaurants Inc Com NPV McDonald's Corp Com USD 0.01 Starbucks Corp Com USD 0.001 Yum! Brands Inc Com NPV Retail AutoZone Inc Com USD 0.01 CarMax Inc Com USD 0.50 Chipotle Mexican Grill Inc Com USD 0.01 CVS Caremark Corp Com USD 0.01 Dollar General Corp Com USD 0.875 Walgreen Co Com USD 0.08 Semiconductors Advanced Micro Devices Inc Com USD 0.01 Altera Corp Com USD 0.001 Analog Devices Inc Com USD 0.17 Applied Materials Inc Com USD 0.01 Broadcom Corp Com USD 0.0001 Cree Inc Com USD 0.00125 First Solar Inc Com USD 0.001 Intel Corp Com USD 0.001 KLA-Tencor Corp Com USD 0.001 Lam Research Corp Com USD 0.001 Linear Technology Corp Com USD 0.001 LSI Corp Com USD 0.01 Maxim Integrated Products Inc Com USD 0.001 Microchip Technology Inc Com USD 0.001 Micron Technology Inc Com USD 0.10 NVIDIA Corp Com USD 0.001

362 iShares plc Annual Report

Fair value $'000

2,321 2,925 809

% of net asset value

0.11 0.14 0.04

Holding Investment

251,965 176,682 39,171

577

0.03

5,970 2,285

0.28 0.11

2,009 1,690

0.09 0.08

1,150 15,393 5,443 4,622

0.05 0.72 0.26 0.22

78,405

1,522 1,032

0.07 0.05

1,810

0.09

27,421 34,380 26,528 60,712 20,869 28,243 49,569 39,915 22,462 45,548 1,132,924 36,777

9,211 1,079 4,574

0.43 0.05 0.21

604,356 28,490 18,657 12,367

750 1,769 1,763

0.04 0.08 0.08

2,399 2,686 431 181 21,365 1,208

0.11 0.13 0.02 0.01 1.00 0.06

898

0.04

1,146 740

0.05 0.04

10,638 45,067 10,688 12,153 24,585 18,139 15,951 33,655 9,783 37,453

1,234

0.06

1,147

0.05

50,042 16,468

1,161 1,326

0.05 0.06

15,381 15,309

United States (cont) Semiconductors (cont) Qualcomm Inc Com USD 0.0001 Texas Instruments Inc Com USD 1.00 Xilinx Inc Com USD 0.01 Software Adobe Systems Inc Com USD 0.0001 Akamai Technologies Inc Com USD 0.01 Autodesk Inc Com USD 0.01 BMC Software Inc Com USD 0.01 CA Inc Com USD 0.10 Cerner Corp Com USD 0.01 Citrix Systems Inc Com USD 0.001 Electronic Arts Inc Com USD 0.01 Fidelity National Information Services Inc Com USD 0.01 Fiserv Inc Com USD 0.01 Intuit Inc Com USD 0.01 Microsoft Corp Com USD 0.00000625 Nuance Communications Inc Com USD 0.001 Oracle Corp Com USD 0.01 Red Hat Inc Com USD 0.0001 Salesforce.com Inc Com USD 0.001 VMware Inc Com USD 0.01 Specialty chemicals CF Industries Holdings Inc Com USD 0.01 Ecolab Inc Com USD 1.00 FMC Corp Com USD 0.10 International Flavors & Fragrances Inc Com USD 0.13 PPG Industries Inc Com USD 1.67 Sigma-Aldrich Corp Com USD 1.00 Specialty finance Equifax Inc Com USD 1.25 Moody's Corp Com USD 0.01 Specialty retailers Advance Auto Parts Inc Com USD 0.0001 Bed Bath & Beyond Inc Com USD 0.01 Best Buy Co Inc Com USD 0.10 Family Dollar Stores Inc Com USD 0.10 GameStop Corp Com USD 0.001 PetSmart Inc Com USD 0.0001

Fair value $'000

% of net asset value

15,660

0.73

5,892 1,446

0.28 0.07

2,579

0.12

987 1,302 993 1,640 1,541 2,110 809

0.05 0.06 0.05 0.08 0.07 0.10 0.04

1,265 1,489 2,633

0.06 0.07 0.12

35,948

1.68

953 17,683 1,408

0.04 0.83 0.06

2,668 1,223

0.12 0.06

1,979 2,705 1,057

0.09 0.13 0.05

693 2,242 1,301

0.03 0.11 0.06

670 1,299

0.03 0.06

835

0.04

2,236 1,236

0.10 0.06

889 350 853

0.04 0.02 0.04

www.iShares.com

As at 29 February 2012

Holding Investment

106,549 19,086 833,676 235,362 43,540 16,636 78,405 22,231 43,906 46,397 14,956 87,597

17,755 8,643

311,589 20,805 263,908 54,752

77,263 16,072 52,153 26,121 16,502

14,457

22,815

www.iShares.com

United Statees (cont) Specialty retailers (cont) Staples Inc Com USD 0.0006 Tiffany & Co Com USD 0.01 Telecommunications Cisco Systems Inc Com USD 0.001 Corning Inc Com USD 0.50 Crown Castle International Corp Com USD 0.01 Harris Corp Com USD 1.00 Juniper Networks Inc Com USD 0.00001 Level 3 Communications Inc Com USD 0.01 Motorola Mobility Holdings Inc Com USD 0.01 Motorola Solutions Inc Com USD 0.01 SBA Communications Corp Com USD 0.01 Windstream Corp Com USD 0.0001 Textile Cintas Corp Com NPV Mohawk Industries Inc Com USD 0.01 Tobacco Altria Group Inc Com USD 0.33 Lorillard Inc Com USD 0.01 Philip Morris International Inc Com NPV Reynolds American Inc Com USD 0.0001 Toys Activision Blizzard Inc Com USD 0.000001 Hasbro Inc Com USD 0.50 Mattel Inc Com USD 1.00 Transportation CH Robinson Worldwide Inc Com USD 0.10 Kansas City Southern Com USD 0.01 Trucking JB Hunt Transport Services Inc Com USD 0.01 Water American Water Works Co Inc Com USD 0.01 Total United States Total equities

Fair value $'000

% of net asset value

Fair value $'000

Holding Investment

% of net asset value

Financcial Derivative Instruments 1,561 1,241

0.07 0.06

16,565 3,067

0.78 0.14

2,255 726

0.11 0.03

1,784

0.08

540

0.03

1,744

0.08

2,310

Futures contracts Unrealised % of net gain asset $'000 value

No. of contracts 46 S&P 500 E Mini Index Futures March 2012 2 S&P TSE 60 Index Futures March 2012 Total unrealised gains on futures conttracts

69

0.00

2

0.00

71

0.00

2,132,101

99.80

Bank overdraft†

(125)

0.00

0.11

Other net assets

3,429

0.16

702

0.03

1,057

0.05

Net assets attributable to redeemable participating shareholders

2,135,405

99.96

684

0.03

549

0.03

Adjustment to align to the valuation methodology as set out in the prospectus

765

0.04

9,382 2,727

0.44 0.13

Net asset value attributable to redeemable participating shareholders at the end of the year

2,136,170

100.00

22,055

1.03

2,294

0.11

923 567 1,692

0.04 0.03 0.08

1,728

0.08

1,147

0.05

740

0.03

782 1,876,041

0.04 87.82

2,132,030

99.80

Total value of investments

†

Substantially all cash positions are held with State Street Bank and Trust Company other than $1,823,369 held as security by the counterparty for futures contracts. * Investments which are less than $500 are rounded to zero. ** Investment in related party.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

Fair value $’000

% of total current assets

2,132,030

99.33

71 14,292

0.00 0.67

2,146,393

100.00

iShares plc Annual Report 363

For the period ended 31 August 2011 The 20 largest purchases

The 20 largest sales Holding 47,887 54,083 20,321 29,415 20,206 17,633 14,936 18,498 17,847 9,909 21,695 13,229 19,724 28,608 29,631 23,900 12,986 8,293 21,726 13,908

Investments DirecTV Com USD 0.01 Time Warner Inc Com USD 0.01 Mead Johnson Nutrition Co Com USD 0.01 Noble Corp Com CHF 3.28 Beam Inc Com USD 3.13 Accenture Plc Com 0.0000225 Time Warner Cable Inc Com USD 0.01 Covidien Plc Com USD 0.20 Tyco International Ltd Com USD 6.70 Monster Beverage Corp Com USD 0.005 Cenovus Energy Inc Com NPV Motorola Solutions Inc Com USD 0.01 General Motors Co Com USD 0.01 WPX Energy Inc Com USD 1.00 Seagate Technology Plc Com USD 0.00001 Foster Wheeler AG Com CHF 3.00 TE Connectivity Ltd Com CHF 1.37 Tim Hortons Inc Com NPV Weatherford International Ltd Com USD 1.16 Canadian Oil Sands Ltd Com NPV

Proceeds $‘000 2,268 1,874 1,306 1,249 1,210 977 976 894 811 770 756 586 503 483 479 468 419 396 377 349

Holding Investments 65,614 General Motors Co Com USD 0.01 32,599 Accenture Plc Com USD 0.0000225 46,654 Time Warner Inc Com USD 0.01 60,374 Coca-Cola Enterprises Inc Com USD 1.00 24,794 Cooper Industries Plc Com USD 0.01 33,898 DirecTV Com USD 0.01 53,515 Canadian Oil Sands Ltd Com NPV 11,416 Ralph Lauren Corp Com USD 0.01 33,964 CIT Group Inc Com USD 0.01 50,618 ARC Resources Ltd Com NPV 16,811 Liberty Media Corp - Liberty Capital Com USD 0.01 51,810 CBRE Group Inc Com USD 0.01 20,074 HollyFrontier Corp Com USD 0.01 21,355 Baytex Energy Corp Com NPV 73,329 General Growth Properties Inc Reits USD 0.01 31,994 Cenovus Energy Inc Com NPV 46,054 XL Group Plc Com USD 0.01 27,028 Dollar General Corp Com USD 0.875 14,972 Time Warner Cable Inc Com USD 0.01 20,632 Tyco International Ltd Com USD 6.70

Cost $‘000 1,895 1,823 1,641 1,592 1,590 1,576 1,548 1,477 1,432 1,425 1,290 1,240 1,229 1,203 1,186 1,109 1,064 1,048 1,039 957

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

364 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

19,336

10,882

Net (losses)/gains on financial assets at fair value through profit or loss

3

(27,650)

81,667

(8,314)

92,549

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit

(2,753)

(1,979)

(11,067)

90,570

Finance costs: Distributions to redeemable participating shareholders

6

(12,393)

(6,557)

Interest expense

7

(25)

(6)

Total finance costs

(12,418)

(6,563)

Net (loss)/profit for the financial year/period before tax

(23,485)

84,007

Non-reclaimable withholding tax Net (loss)/profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(3,839)

(2,203)

(27,324)

81,804

273

78

(27,051)

81,882

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

433,729

250,169

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(27,051)

81,882

Share transactions: Proceeds from issue of redeemable participating shares

61,500

149,889

(102,337)

(48,211)

(Decrease)/increase in net assets resulting from share transactions

(40,837)

101,678

Net assets attributable to redeemable participating shareholders at the end of the year/period

365,841

433,729

Payments on redemption of redeemable participating shares

* For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 365

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

890

2,085

84

-

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

1,257

6,941

Financial assets at fair value through profit or loss

12

364,573

434,196

366,804

443,222

Total current assets CURRENT LIABILITIES Payables

13

(522)

(7,336)

Distributions to redeemable participating shareholders payable

6

(1,022)

(2,465)

(1,544)

(9,801)

365,260

433,421

581

308

365,841

433,729

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus

8

Net asset vaalue attributable to redeemable participating shareholders at the end of the year/period The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

366 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68.

2.

OPERATING INCOME

Deposit interest income Dividend income

3.

Year ended 29 February 2012 $’000 4 19,332 19,336

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net (losses)/gains on investments in securities held at fair value through profit or loss Net gains on futures contracts Net losses on currency

4.

Period from 12 June 2010 to 28 February 2011 $’000

(27,148) 7 (509) (27,650)

82,131 (464) 81,667

Year ended 29 February 2012 $’000 (2,753) (2,753)

Period from 12 June 2010 to 28 February 2011 $’000 (1,975) (4) (1,979)

OPERATING EXPENSES

Management fees Dividend Payable

5.

Period from 12 June 2010 to 28 February 2011 $’000 10,882 10,882

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets.

6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 February 2011 August 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 $’000 5,117 2,465 7,582 (1,279) 254 6,557

Year ended 29 February 2012 $’000 (25) (25)

Period from 12 June 2010 to 28 February 2011 $’000 (6) (6)

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

Year ended 29 February 2012 $’000 10,596 1,022 11,618 (151) 926 12,393

Bank interest

Please refer to page 63 for each Fund’s management fee rate.

www.iShares.com

iShares plc Annual Report 367

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 308 230

273

78

273 581

78 308

Further details are set out in the accounting policies note k) on page 30.

9.

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

11. RECEIVABLES

Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of Shares

28 February 2011 No. of Shares

11,900,000 1,900,000 (3,200,000) 10,600,000

8,800,000 4,400,000 (1,300,000) 11,900,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

10,600,000 11,900,000 8,800,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

365,841 433,729 250,169

29 February 2012 $’000

28 February 2011 $’000

235

6,941

1,022 1,257

6,941

Sale of securities awaiting settlement Distributions payable held with Registrar*

* Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

SHARE CAPITAL

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 are classified as financial liabilities.

$34.51 $36.45 $28.43

Financial assets: Investment in equities Unrealised gains on futures contracts

29 February 2012 $’000 364,559

28 February 2011 $’000 434,196

14 364,573

434,196

29 February 2012 $’000

28 February 2011 $’000

(319) (6) (197) (522)

(7,061)

13. PAYABLES

Purchase of securities awaiting settlement Interest payable Management fees payable

(275) (7,336)

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements.

15. RELATED PARTIES The related parties are set out on pages 66 and 67.

16. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67.

17. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68. 368 iShares plc Annual Report

www.iShares.com

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market 407,340 Equities Cayman Islands Electronics 82,250 TPK Holding Co Ltd Com TWD 10.00 Semiconductors 324,890 MStar Semiconductor Inc Com TWD 10.00 Total Cayman Islands

2,243,071 1,434,367 2,580,425

1,410,086 412,524

492,000 762,678

3,564,460 2,491,283

815,837

1,656,239 2,917,497 806,228

388,552

667,060

www.iShares.com

Taiwan Airlines China Airlines Ltd Com TWD 10.00 Eva Airways Corp Com TWD 10.00 Apparel retailers Far Eastern New Century Corp Com TWD 10.00 Auto parts & equipment Cheng Shin Rubber Industry Co Ltd Com TWD 10.00 Nan Kang Rubber Tire Co Ltd Com TWD 10.00 Automobiles China Motor Corp Com TWD 10.00 Yulon Motor Co Ltd Com TWD 10.00 Banks Chang Hwa Commercial Bank Com TWD 10.00 Taiwan Business Bank Com TWD 10.00 Broadline retailers Far Eastern Department Stores Co Ltd Com TWD 10.00 Building materials and fixtures Asia Cement Corp Com TWD 10.00 Taiwan Cement Corp Com TWD 10.00 Taiwan Glass Industry Corp Com TWD 10.00 Chemicals LCY Chemical Corp Com TWD 10.00 Clothing & accessories Formosa Taffeta Co Ltd Com TWD 10.00

2,496,514 1,380

0.38

3,496,333 4,139,977

2,061 3,441

0.56 0.94

440,600 2,255,878 241,742

1,061 976

3,309

0.29 0.27

0.90

595,428 6,592,999 399,674 4,496,125

3,473

0.95

686

0.19

395,960 3,670,188 617,698

546

0.15

1,606

0.44

1,990,135 1,815,003 110,136

2,182

0.60

2,194,681

840

0.23

1,164,194

1,125

0.31

2,118

0.58

3,742 987

1.02 0.27

1,752,389 1,738,725 7,906,237 8,478,854 3,429,539 5,048,362

719

667

0.20

0.18

4,351,626 4,332,728

Taiwan (cont) Clothing & accessories (cont) Ruentex Industries Ltd Com TWD 10.00 Commodity chemicals Formosa Chemicals & Fibre Corp Com TWD 10.00 Formosa Plastics Corp Com TWD 10.00 Nan Ya Plastics Corp Com TWD 10.00 TSRC Corp Com TWD 10.00 Computer hardware Acer Inc Com TWD 10.00 Advantech Co Ltd Com TWD 10.00 Asustek Computer Inc Com TWD 10.00 AU Optronics Corp Com TWD 10.00 Chicony Electronics Co Ltd Com TWD 10.00 Chimei Innolux Corp Com TWD 10.00 Clevo Co Com TWD 10.00 Compal Electronics Inc Com TWD 10.00 Foxconn Technology Co Ltd Com TWD 10.00 Inventec Co Ltd Com TWD 10.00 Lite-On Technology Corp Com TWD 10.00 Phison Electronics Corp Com TWD 10.00 Quanta Computer Inc Com TWD 10.00 Synnex Technology International Corp Com TWD 10.00 Tatung Co Ltd Com TWD 10.00 Wistron Corp Com TWD 10.00 Diversified financial services China Development Financial Holding Corp Com TWD 10.00 Chinatrust Financial Holding Co Ltd Com TWD 10.00 E.Sun Financial Holding Co Ltd Com TWD 10.00 First Financial Holding Co Ltd Com TWD 10.00 Fubon Financial Holding Co Ltd Com TWD 10.00 Hua Nan Financial Holdings Co Ltd Com TWD 10.00

Fair value $'000

% of net asset value

838

0.23

7,805

2.13

10,918

2.99

10,112 1,126

2.76 0.31

3,449

0.94

813

0.22

5,590

1.53

3,566

0.98

823

0.23

2,417 710

0.66 0.19

4,332

1.18

2,847 944

0.78 0.26

2,464

0.67

875

0.24

5,428

1.48

2,943 591 2,892

0.81 0.16 0.79

2,676

0.73

5,754

1.57

1,872

0.51

3,229

0.88

5,107

1.40

2,572

0.70

iShares plc Annual Report 369

As at 29 February 2012

Holding Investment

2,594,242 6,941,800 5,158,035 4,465,205 3,478,841 7,039,347

197,577 2,872,000

333,762 1,583,992 716,000 7,983,129 234,875 172,602 1,493,038 365,000 367,699 1,154,749 1,307,002 1,186,482 605,789

3,337,850

186,000

3,394,937

Taiwan (cont) Diversified financial services (cont) KGI Securities Co Ltd Com TWD 10.00 Mega Financial Holding Co Ltd Com TWD 10.00 SinoPac Financial Holdings Co Ltd Com TWD 10.00 Taishin Financial Holding Co Ltd Com TWD 10.00 Taiwan Cooperative Financial Holding Com TWD 0.10 Yuanta Financial Holding Co Ltd Com TWD 10.00 Electrical components & equipment Simplo Technology Co Ltd Com TWD 10.00 Walsin Lihwa Corp Com TWD 10.00 Electronics Cheng Uei Precision Industry Co Ltd Com TWD 10.00 Delta Electronics Inc Com TWD 10.00 E Ink Holdings Inc Com TWD 10.00 Hon Hai Precision Industry Co Ltd Com TWD 10.00 Kinsus Interconnect Technology Corp Com TWD 10.00 Nan Ya Printed Circuit Board Corp Com TWD 10.00 Pegatron Corp Com TWD 10.00 Radiant Opto-Electronics Corp Com TWD 10.00 Tripod Technology Corp Com TWD 10.00 Unimicron Technology Corp Com TWD 10.00 Wintek Corp Com TWD 10.00 WPG Holdings Ltd Com TWD 10.00 Ya Hsin Industrial Co Ltd Com TWD 10.00* Fixed line telecommunications Chunghwa Telecom Co Ltd Com TWD 10.00 Food Standard Foods Corp Com TWD 10.00 Food products Uni-President Enterprises Corp Com TWD 10.00

370 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

1,919,501 1,161

0.32

5,396

1.48

1,921

0.53

1,823

0.50

2,278

0.62

4,143

1.13

350,000

30,758

646,611

5,911,248 1,457,465

1,415

0.39

1,114

0.30

5,211,683

1,570,025 799

0.22

4,349

1.19

1,072

0.29

27,700

7.57

835

0.23

433 2,029

0.12 0.56

1,620

0.44

1,143

0.31

1,511 1,154

0.41 0.32

1,689

0.46

-

0.00

10,265

2.80

9,920,334 386,520

261,753

1,460,000

1,222,038 382,000 977,851 1,245,773

493,074

144,650 88,341

658

0.18 1,402,017

5,197

1.42

1,473,304

Taiwan (cont) Footwear Pou Chen Corp Com TWD 10.00 Heavy construction Highwealth Construction Corp Com TWD 10.00 Hotels Formosa International Hotels Corp Com TWD 10.00 Industriall metals & mining Tung Ho Steel Enterprise Corp Com TWD 10.00 Insurance Cathay Financial Holding Co Ltd Com TWD 10.00 China Life Insurance Co Ltd Com TWD 10.00 Shin Kong Financial Holding Co Ltd Com TWD 10.00 Investment services Capital Securities Corp Com TWD 10.00 Iron & steel China Steel Corp Com TWD 10.00 Feng Hsin Iron & Steel Co Com TWD 10.00 Leisure time Giant Manufacturing Co Ltd Com TWD 10.00 Machinery — diversified Teco Electric and Machinery Co Ltd Com TWD 10.00 Marine transportation Evergreen Marine Corp Taiwan Ltd Com TWD 10.00 U-Ming Marine Transport Corp Com TWD 10.00 Wan Hai Lines Ltd Com TWD 10.00 Yang Ming Marine Transport Corp Com TWD 10.00 Metal fabricate/hardware Catcher Technology Co Ltd Com TWD 10.00 Miscellaneous manufacturers Hiwin Technologies Corp Com TWD 10.00 Largan Precision Co Ltd Com TWD 10.00 Mobile telecommunications Far EasTone Telecommunications Co Ltd Com TWD 10.00 Taiwan Mobile Co Ltd Com TWD 10.00

Fair value $'000

% of net asset value

1,701

0.46

655

0.18

490

0.13

668

0.18

6,948

1.90

1,515

0.41

1,764

0.48

692

0.19

10,276

2.81

679

0.18

1,122

0.31

1,031

0.28

854

0.23

665

0.18

569

0.16

723

0.20

3,606

0.99

1,614

0.44

1,980

0.54

2,938

0.80

4,521

1.24

www.iShares.com

As at 29 February 2012

Holding Investment

1,001,470

275,000 516,906

217,000 503,728

4,150,660 677,912 314,299 1,628,559 2,983,995 908,308 273,338 449,000 634,932 364,391 124,104 2,598,696 331,271 21,642,198

171,806 10,915,709

1,569,900

614,275 648,000

www.iShares.com

Taiwan (cont) Oil & gas Formosa Petrochemical Corp Com TWD 10.00 Real estate investment & services Farglory Land Development Co Ltd Com TWD 10.00 Ruentex Development Co Ltd Com TWD 10.00 Retail Hotai Motor Co Ltd Com TWD 10.00 President Chain Store Corp Com TWD 10.00 Semiconductors Advanced Semiconductor Engineering Inc Com TWD 10.00 Epistar Corp Com TWD 10.00 Everlight Electronics Co Ltd Com TWD 10.00 Inotera Memories Inc Com TWD 10.00 Macronix International Com TWD 10.00 MediaTek Inc Com TWD 10.00 Motech Industries Inc Com TWD 10.00 Novatek Microelectronics Corp Com TWD 10.00 Powertech Technology Inc Com TWD 10.00 Realtek Semiconductor Corp Com TWD 10.00 Richtek Technology Corp Com TWD 10.00 Siliconware Precision Industries Co Com TWD 10.00 Sino-American Silicon Products Inc Com TWD 10.00 Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 Transcend Information Inc Com TWD 10.00 United Microelectronics Corp Com TWD 10.00 Specialty chemicals China Petrochemical Development Corp Com TWD 10.00 Eternal Chemical Co Ltd Com TWD 10.00 Taiwan Fertilizer Co Ltd Com TWD 10.00

Fair value $'000

% of net asset value

3,294

0.90

585

0.16

687

0.19

Holding Investment Taiwan (cont) Telecommunications 643,712 HTC Corp Com TWD 10.00 Total Taiwan Total equities

Fair value $'000

% of net asset value

14,475 361,118

3.96 98..71

364,559

99.65

Financial Derivative Instruments Futures contracts

1,473

0.40

2,656

0.73

4,060 1,773

1.11 0.48

704

0.19

445

0.12

Cash†

1,264 9,301

0.35 2.54

Other net liabilities

565

0.15

1,344

0.37

1,456

0.40

772

0.21

741

0.20

3,054

0.84

686

0.19

59,708

16.32

514

0.14

5,737

1.57

2,013

0.55

551

0.15

1,814

0.50

Unrealised % of net gain assets $'000 value

No. of contracts 20 MSCI Taiwan index futures March 2012 Total unrealised gains on futures contracts Total value of investments

Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

14

0.01

14

0.01

364,573

99.66

974

0.26

(287)

(0.08)

365,260

99.84

581

0.16

365,841 100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company other than $83,547 held as security by the counterparty for futures contracts. * Investments less than $500 are rounded to zero.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

Fair value $'000

% of total current assets

364,559

99.39

14 2,231 366,804

0.00 0.61 100.00

iShares plc Annual Report 371

For the year ended 29 February 2012 The 20 largest sales

The 20 largest purchases Proceeds $‘000

Holding Investments 7,111,000 Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 16,739 3,016,000 Hon Hai Precision Industry Co Ltd Com TWD 10.00 8,386 206,000 HTC Corp Com TWD 10.00 5,307 1,094,000 Chunghwa Telecom Co Ltd Com TWD 10.00 3,656 1,151,000 Formosa Plastics Corp Com TWD 10.00 3,397 3,159,000 China Steel Corp Com TWD 10.00 3,239 1,364,000 Nan Ya Plastics Corp Com TWD 10.00 3,145 292,000 MediaTek Inc Com TWD 10.00 2,866 1,942,000 Cathay Financial Holding Co Ltd Com TWD 10.00 2,428 1,835,000 Fubon Financial Holding Co Ltd Com TWD 10.00 2,399 818,000 Formosa Chemicals & Fibre Corp Com TWD 10.00 2,380 1,946,000 Advanced Semiconductor Engineering Inc Com TWD 10.00 2,022 2,702,000 Chinatrust Financial Holding Co Ltd Com TWD 10.00 1,885 2,268,000 Mega Financial Holding Co Ltd Com TWD 10.00 1,738 207,000 Asustek Computer Inc Com TWD 10.00 1,685 1,102,000 Uni-President Enterprises Corp Com TWD 10.00 1,540 513,000 Delta Electronics Inc Com TWD 10.00 1,455 722,000 Quanta Computer Inc Com TWD 10.00 1,430 3,497,000 United Microelectronics Corp Com TWD 10.00 1,429 484,000 Taiwan Mobile Co Ltd Com TWD 10.00 1,309

Holding Investments 3,886,000 Taiwan Semiconductor Manufacturing Co Ltd Com TWD 10.00 1,421,000 Hon Hai Precision Industry Co Ltd Com TWD 10.00 256,000 MediaTek Inc Com TWD 10.00 114,000 HTC Corp Com TWD 10.00 2,329,000 China Steel Corp Com TWD 10.00 591,000 Chunghwa Telecom Co Ltd Com TWD 10.00 627,000 Formosa Plastics Corp Com TWD 10.00 743,000 Nan Ya Plastics Corp Com TWD 10.00 439,000 Formosa Chemicals & Fibre Corp Com TWD 10.00 1,056,000 Cathay Financial Holding Co Ltd Com TWD 10.00 221,000 Hotai Motor Co Ltd Com TWD 10.00 444,000 Cheng Shin Rubber Industry Co Ltd Com TWD 10.00 371,000 Radiant Opto-Electronics Corp Com TWD 10.00 1,527,000 Chinatrust Financial Holding Co Ltd Com TWD 10.00 1,243,000 Mega Financial Holding Co Ltd Com TWD 10.00 783,000 Fubon Financial Holding Co Ltd Com TWD 10.00 1,945,000 United Microelectronics Corp Com TWD 10.00 113,000 Asustek Computer Inc Com TWD 10.00 606,000 Uni-President Enterprises Corp Com TWD 10.00 399,000 Quanta Computer Inc Com TWD 10.00

Cost $‘000 9,768 4,232 2,772 2,632 2,364 1,916 1,911 1,728 1,320 1,245 1,201 1,129 1,111 1,007 920 902 885 878 852 849

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

372 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

94,158

50,018

Net (losses)/gains on financial assets/liabilities at fair value through profit or loss

3

(161,708)

709,049

(67,550)

759,067

(16,689)

(11,476)

(84,239)

747,591

Total (losses)/gains Operating expenses

4

Net operating (loss)/profit Finance costs: Distributions to redeemable participating shareholders

6

(69,133)

(37,705)

Interest expense

7

(13)

(7)

(69,146)

(37,712)

(153,385)

709,879

Total finance costs Net (loss)/profit for the financial year/period before tax Non-reclaimable withholding tax Net loss for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

(6,074)

(4,901)

(159,459)

704,978

1,206

(2,578)

(158,253)

702,400

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year ended 29 February 2012 Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Net assets attributable to redeemable participating shareholders at the beginning of the year/period

3,687,208

2,854,070

(Decrease)/increase in net assets attributable to redeemable participating shareholders from operations

(158,253)

702,400

473,430

443,706

(464,298)

(312,968)

9,132

130,738

3,538,087

3,687,208

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period * For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 373

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

646

10,727

1,816

416

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

29,676

11,408

Financial assets at fair value through profit or loss

12

3,534,499

3,682,439

3,566,637

3,704,990

Bank overdraft

(1,335)

(2)

Margin cash account

(1,851)

-

Total current assets CURRENT LIABILITIES

Payables

13

(12,405)

(5,824)

Distributions to redeemable participating shareholders payable

6

(13,279)

(11,068)

Financial liabilities at fair value through profit or loss

12

Total current liabilities Net assetss attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

-

(2)

(28,870)

(16,896)

3,537,767

3,686,0 094

8

320

(886)

3,538,087

3,687,208

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

374 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income Management fee rebate*

Year ended 29 February 2012 $’000 38 90,981 1,716 1,423 94,158

Period from 12 June 2010 to 28 February 2011 $’000 26 48,457 473 1,062 50,018

* The Fund received a management fee rebate in relation to its investment in iShares MSCI Japan Fund.

3.

NET (LOSSES)/GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Net (losses)/gains on investments in securities held at fair value through profit or loss Net( losses)/gains on futures contracts Net gains on currency

4.

(160,110)

708,814

(1,632) 34 (161,708)

130 105 709,049

Year ended 29 February 2012 $’000 (16,669) (20) (16,689)

Period from 12 June 2010 to 28 February 2011 $’000 (11,476) (11,476)

6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012

OPERATING EXPENSES

Management fees Other fees

5.

Year ended 29 February 2012 $’000

Period from 12 June 2010 to 28 February 2011 $’000

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets.

Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 $’000 16,782 10,642 11,068 38,492 (1,631) 844 37,705

Year ended 29 February 2012 $’000 (13) (13)

Period from 12 June 2010 to 28 February 2011 $’000 (7) (7)

INTEREST EXPENSE

MANAGEMENT FEES

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively.

Year ended 29 February 2012 $’000 22,630 20,483 12,549 13,279 68,941 (1,705) 1,897 69,133

Bank interest

Please refer to page 63 for each Fund’s management fee rate. www.iShares.com

iShares plc Annual Report 375

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Year ended 29 February 2012 $’000 (886)

Period from 12 June 2010 to 28 February 2011 $’000 1,692

1,206

(2,578)

1,206 320

(2,578) (886)

Further details are set out in the accounting policies note k) on page 30. 9.

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010 11. RECEIVABLES

Sale of securities awaiting settlement Dividend income receivable Securities lending income receivable Dividend tax reclaim receivable Management fee rebate receivable* Distributions payable held with Registrar**

SHARE CAPITAL

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

29 February 2012 No. of shares

28 February 2011 No. of shares

128,400,000 18,400,000 (18,000,000) 128,800,000

123,600,000 17,200,000 (12,400,000) 128,400,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS

$27.47 $28.72 $23.09

29 February 2012 $’000

28 February 2011 $’000

6,942 8,114

4,247 6,469

78 1,148

48 517

115

127

13,279 29,676

11,408

* The fund received a management fee rebate in relation to its investment in iShares MSCI Japan fund. ** Further details are set out on note 11 page 65.

12. FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Investment in exchange traded funds Investment in rights Unrealised gains on futures contracts

29 February 2012 $’000 3,281,752

28 February 2011 $’000 3,395,935

252,340 -

286,416 16

407 3,534,499

72 3,682,439

-

(2) (2)

29 February 2012 $’000

28 February 2011 $’000

(11,018) (1,387) (12,405)

(4,421) (1,403) (5,824)

No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

128,800,000 128,400,000 123,600,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

376 iShares plc Annual Report

3,538,087 3,687,208 2,854,070

Financial liabilities: Unrealised losses on futures contracts

13. PAYABLES

Purchase of securities awaiting settlement Management fees payable

www.iShares.com

For the year ended 29 February 2012 14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67. 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 $’000

28 February 2011 $’000

1,716

473

138,055

151,320

152,198

166,585

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 377

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market

418,617 69,655 232,610 321,836 439,776 44,029 97,525 329,219 217,196 52,974 181,502 54,987 65,011 21,820 27,798 87,444 234,630 46,706 110,105 30,704 5,333 153,811 97,667

Equities Australia Banks Australia & New Zealand Banking Group Ltd Com NPV Bendigo and Adelaide Bank Ltd Com NPV Commonwealth Bank of Australia Com NPV National Australia Bank Ltd Com NPV Westpac Banking Corp Com NPV Biotechnology CSL Ltd Com NPV Building materials and fixtures Boral Ltd Com NPV Commercial services Brambles Ltd Com NPV Transurban Group Com NPV Computers Computershare Ltd Com NPV Containers & packaging Amcor Ltd Com NPV Diversified financial services Macquarie Group Ltd Com NPV Electricity AGL Energy Ltd Com NPV Engineering & construction Leighton Holdings Ltd Com NPV WorleyParsons Ltd Com NPV Entertainment Tabcorp Holdings Ltd Com NPV Food retailers and wholesalers Woolworths Ltd Com NPV General mining OZ Minerals Ltd Com NPV Gold mining Newcrest Mining Ltd Com NPV Health care services Ramsay Health Care Ltd Com NPV Healthcare products Cochlear Ltd Com NPV Home improvement retailers Wesfarmers Ltd Com NPV Hotels Echo Entertainment Group Ltd Com NPV

378 iShares plc Annual Report

277,067 356,187 186,887 9,923

0.28

582

0.02

12,420

0.35

8,231 9,926

0.23 0.28

457,028 480,048 74,427 353,401 70,639 81,107

1,559

0.04

157,233

464

0.01

108,328 92,008

2,575 1,314

0.07 0.04

443

0.01

1,390

0.04

1,590

0.04

740,830 978,147 467,624 518,711 275,691 400,671 400,671

979

0.03

147,733

602 882

0.02 0.02

288,316

257

0.01

6,416

0.18

551

0.02

357,767

3,984

0.11

609

0.02

140,296 242,807

28,678 17,689 351

0.01 92,214

4,836

0.14 22,368

454

0.01

18,014

Australiaa (cont) Insurance QBE Insurance Group Ltd Com NPV Suncorp Group Ltd Com NPV Iron & steel Fortescue Metals Group Ltd Com NPV Mining Alumina Ltd Com NPV BHP Billiton Ltd Com NPV Iluka Resources Ltd Com NPV Lynas Corp Ltd Com NPV Orica Ltd Com NPV Rio Tinto Ltd Com NPV Multiutilities Origin Energy Ltd Com NPV Oil & gas Santos Ltd Com NPV Woodside Petroleum Ltd Com NPV Real estate investment trusts Dexus Property Group Reits NPV Goodman Group Reits NPV GPT Group Reits NPV GPT Group Reits NPV* Stockland Reits NPV Westfield Group Reits NPV Westfield Retail Trust Reits NPV Specialty chemicals Incitec Pivot Ltd Com NPV Specialty finance AMP Ltd Com NPV Telecommunications Telstra Corp Ltd Com NPV Transportation Asciano Ltd Com NPV QR National Ltd Com NPV Total Australia Austria Banks Erste Group Bank AG Com NPV Electricity Verbund AG Com NPV Fixed line telecommunications Telekom Austria AG Com NPV Integrated oil & gas OMV AG Com NPV Iron & steel Voestalpine AG Com NPV

Fair value $'000

% of net asset value

3,482 3,144

0.10 0.09

1,125

0.03

676 18,724 1,343 466 2,071 5,910

0.02 0.53 0.04 0.01 0.06 0.17

2,312

0.07

1,688 3,702

0.05 0.10

713 724 1,576 944 3,805 1,087

0.02 0.02 0.04 0.00 0.03 0.11 0.03

519

0.01

1,249

0.04

1,272

0.04

750 1,026 128,6 646

0.02 0.03 3.64

723

0.02

501

0.01

1,073

0.03

841

0.02

646

0.02

www.iShares.com

As at 29 February 2012

Holding Investment Austria (cont) Real estate investment & services 267,282 Immofinanz AG Com NPV Total Austria

34,776 114,307

25,123 2,461

12,648

336,005 26,924 189

911,000 100,000 59,608 51,139 678,000

36,651 14,209 99,805 154,250 www.iShares.com

Belgium Banks KBC Groep NV Com NPV Beverages Anheuser-Busch InBev NV Com NPV Chemicals Solvay SA Com NPV Diversified industrials Bekaert SA Com NPV Holdin ng companies - diversified operations Groupe Bruxelles Lambert SA Com NPV Insurance Ageas Com NPV Mining Umicore SA Com NPV Specialty finance Groupe Bruxelles Lambert SA Com NPV* Total Belgium Bermuda Holding companies - diversified operations Noble Group Ltd Com HKD 0.25 Hotels Shangri-La Asia Ltd Com HKD 1.00 Oil & gas Nabors Industries Ltd Com USD 0.001 Seadrill Ltd Com USD 2.00 Textile Li & Fung Ltd Com HKD 0.0125 Total Bermuda Canada Aerospace CAE Inc Com NPV Auto parts & equipment Magna International Inc Com NPV Banks Bank of Montreal Com NPV Bank of Nova Scotia Com NPV

Fair value $'000

% of net asset value

944 4,728

0.03 0.13

825

0.02

7,703

0.22

3,104

0.09

82

0.00

Holding Investment

64,842 23,493 198,960 128,266 20,029 30,924

32,962 80,612 62,517

954

0.03

30,116

716

0.02

33,012

1,405

0.04

9,084

14,789

0.00 0.42

1,038

0.03

250

0.01

1,297 2,132

0.04 0.06

1,561 6,278

0.04 0.18

16,331 23,459 140,849 34,400 139,326 23,200 119,003 51,721 173,803 49,800 93,204 28,791 17,052 4,992

395

0.01

678

0.02

5,877 8,352

0.17 0.23

305,343 59,933 72,252 128,695 62,616 225,577

Canada (cont) Banks (cont) Canadian Imperial Bank of Commerce Com NPV National Bank of Canada Com NPV Royal Bank of Canada Com NPV Toronto-Dominion Bank Com NPV Clothing & accessories Gildan Activewear Inc Com NPV Commercial vehicles & trucks Ritchie Bros Auctioneers Inc Com NPV Computers CGI Group Inc Com NPV Research In Motion Ltd Com NPV Diversified financial services TMX Group Inc Com NPV Electricity TransAlta Corp Com NPV Food products Saputo Inc Com NPV Food retailers and wholesalers Metro Inc Com NPV Forest products & paper Sino-Forest Corp Com NPV* Gold mining Agnico-Eagle Mines Ltd Com NPV Barrick Gold Corp Com NPV Centerra Gold Inc Com NPV Eldorado Gold Corp Com NPV Franco-Nevada Corp Com NPV Goldcorp Inc Com NPV Iamgold Corp Com NPV Kinross Gold Corp Com NPV Osisko Mining Corp Com NPV Yamana Gold Inc Com NPV Hand & machine tools Finning International Inc Com NPV Heavy constructtion SNC-Lavalin Group Inc Com NPV Insurance Industrial Alliance Insurance & Financial Services Inc Com NPV Manulife Financial Corp Com NPV Power Corp of Canada Com NPV Power Financial Corp Com NPV Sun Life Financial Inc Com NPV Integrated oil & gas Imperial Oil Ltd Com NPV Suncor Energy Inc Com NPV

Fair value $'000

% of net asset value

5,049 1,837 11,237 10,498

0.14 0.05 0.32 0.30

503

0.02

758

0.02

708 1,146

0.02 0.03

2,731

0.08

638

0.02

1,367

0.04

471

0.01

-

0.00

855 6,752 693 2,139 1,029 5,793 785 1,929 633 1,623

0.02 0.19 0.02 0.06 0.03 0.16 0.02 0.06 0.02 0.05

838

0.02

648

0.02

137 3,835 1,520 2,014 2,838

0.00 0.11 0.04 0.06 0.08

3,001 8,140

0.09 0.23

iShares plc Annual Report 379

As at 29 February 2012

Holding Investment

45,669 75,540 107,590 105,596 153,507 115,828

26,773 40,350 15,100 17,500 167,294 38,472 147,082 46,348 146,949 17,700 60,995 6,589 68,700 34,600 88,610 36,105 221,476 42,700 13,872 11,695 35,171

106,586 102,919 11,671 65,457 3,658

Canada (cont) Mining Cameco Corp Com NPV First Quantum Minerals Ltd Com NPV Ivanhoe Mines Ltd Com NPV Teck Resources Ltd Com NPV Miscellaneous manufacturers Bombardier Inc Com NPV Mobile teleco ommunications Rogers Communications Inc Com NPV Oil & gas ARC Resources Ltd Com NPV Athabasca Oil Sands Corp Com NPV Baytex Energy Corp Com NPV Bonavista Energy Corp Com NPV Canadian Natural Resources Ltd Com NPV Canadian Oil Sands Ltd Com NPV Cenovus Energy Inc Com NPV Crescent Point Energy Corp Com NPV Encana Corp Com NPV MEG Energy Corp Com NPV Nexen Inc Com NPV Niko Resources Ltd Com NPV Pacific Rubiales Energy Corp Com NPV Pengrowth Energy Corp Com NPV Penn West Petroleum Ltd Com NPV Progress Energy Resources Corp Com NPV Talisman Energy Inc Com NPV Tourmaline Oil Corp Com NPV Ultra Petroleum Corp Com NPV Vermilion Energy Inc Com NPV Pharmaceuticals Valeant Pharmaceuticals International Inc Com NPV Pipelines Enbridge Inc Com NPV TransCanada Corp Com NPV Platinum & precious metals Pan American Silver Corp Com NPV Silver Wheaton Corp Com NPV Property & casualty insurance Fairfax Financial Holdings Ltd Com NPV

Fair value $'000

% of net asset value

Holding Investment

1,125

0.03

121,465

1,727 1,873 4,235

0.05 0.05 0.12

98,829

739

0.02

4,452

0.13

694

0.02

17,195

500 876 407

0.01 0.02 0.01

13,960

6,228 921 5,728

0.18 0.03 0.16

2,199 3,008 781 1,248 313

0.06 0.08 0.02 0.04 0.01

1,996 354 1,944

0.06 0.01 0.05

396 3,058 1,115 346 577

0.01 0.09 0.03 0.01 0.02

88,082

4,595

1,867

0.05

4,128 4,548

0.12 0.13

293 2,515

0.01 0.07

1,515

0.04

23,022 127,642

43,670

84,000

347,200 173,200 28,300

Cayman Islands Broadline retailers Lifestyle International Holdings Ltd Com HKD 0.005 Hotels Sands China Ltd Com USD 0.01 Wynn Macau Ltd Com HKD 0.001 Semiconductors ASM Pacific Technology Ltd Com HKD 0.10 Total Cayman Islands

Curacao Oil & gas services 179,435 Schlumberger Ltd Com USD 0.01 Total Cuuracao

29,110

86,000 19,173 48,118

380 iShares plc Annual Report

Canada (cont) Publishing Thomson Reuters Corp Com NPV Railroads Canadian National Railway Co Com NPV Real estate investment & services Brookfield Asset Management Inc Com NPV Real estate investment trusts RioCan Real Estate Investment Trust Reits NPV Retail Tim Hortons Inc Com NPV Software Open Text Corp Com NPV Specialty chemicals Agrium Inc Com NPV Potash Corp of Saskatchewan Inc Com NPV Transportation Viterra Inc Com NPV Total Canada

Denmark Alternative energy Vestas Wind Systems A/S Com DKK 1.00 Banks Danske Bank A/S Com DKK 10.00 Beverages Carlsberg A/S Com DKK 20.00 Biotechnology Novozymes A/S Com DKK 2.00

Fair value $'000

% of net asset value

3,534

0.10

7,642

0.22

2,763

0.08

126

0.00

933

0.03

854

0.02

1,967

0.05

5,962

0.17

473 183,407

0.01 5.18

230

0.01

1,303 455

0.04 0.01

399 2,387

0.01 0.07

13,928 13,928

0.39 0.39

301

0.01

1,549

0.05

1,510

0.04

1,436

0.04

www.iShares.com

As at 29 February 2012

Holding Investment

3,266 4,889

2,129 65,358 95,850 281 37,615

17,419 136,013 198,233 8,442 46,740 20,768 30,201 610,128

14,739 25,840

47,288 135,275 131,870 96,298

Denmark (cont) Healthcare products Coloplast A/S Class 'B' Com DKK 5.00 William Demant Holding A/S Com DKK 1.00 Insurance Tryg A/S Com DKK 25.00 Pharmaceuticals Novo Nordisk A/S Com DKK 1.00 Telecommunications TDC A/S Com DKK 1.00 Transportation AP Moeller - Maersk A/S Class 'B' Com DKK 1000.00 DSV A/S Com DKK 1.00 Total Denmark Finland Auto parts & equipment Nokian Renkaat Oyj Com NPV Electricity Fortum Oyj Com EUR 3.40 Forest products & paper Stora Enso Oyj Com NPV Industrial machinery Metso Oyj Com NPV Insurance Sampo Oyj Com NPV Integrated oil & gas Neste Oil Oyj Com NPV Telecommunications Elisa Oyj Com NPV Nokia Oyj Com NPV Total Finland France Aerospace Safran SA Com EUR 0.20 Auto parts & equipment Cie Generale des Etablissements Michelin Com EUR 2.00 Automobiles Renault SA Com EUR 3.81 Banks BNP Paribas SA Com EUR 2.00 Credit Agricole SA Com EUR 3.00 Societe Generale SA Com EUR 1.25

Fair value $'000

% of net asset value

Holding Investment

44,250 538

0.02

455

0.01

114

0.00

9,196

0.26

761

0.02

2,273 879 19,012

0.06 0.03 0.54

776

0.02

3,386

0.10

1,495

0.04

401

0.01

1,321

0.04

257

0.01

689 3,216 11,541

0.02 0.09 0.33

88,668 37,655 56,843 5,434 6,777 34,609 9,364 13,878 96,733

35,449 183,736 104,851 103,243 116,374 30,415

37,155

27,064 255,534 293,571

496

0.01

1,789

0.05

2,510

0.07

6,629 848

0.19 0.02

29,577

3,123

0.09

15,828

4,231 30,273 10,052

47,267 www.iShares.com

France (cont) Beverages Pernod-Ricard SA Com EUR 1.55 Building materials and fixtures Cie de St-Gobain Com EUR 4.00 Lafarge SA Com EUR 4.00 Chemicals Air Liquide SA Com EUR 5.50 Arkema SA Com EUR 10.00 Commercial services Bureau Veritas SA Com EUR 0.12 Edenred Com EUR 2.00 Computer services AtoS Com EUR 1.00 Cap Gemini SA Com EUR 8.00 Electrical components & equipment Schneider Electric SA Com EUR 4.00 Electricity EDF SA Com EUR 0.50 GDF Suez Com EUR 1.00 Engineering & construction Vinci SA Com EUR 2.50 Food Carrefour SA Com EUR 2.50 Danone Com EUR 0.25 Healthcare products Cie Generale d'Optique Essilor International SA Com EUR 0.18 Holding companies - diversified operations LVMH Moet Hennessy Louis Vuitton SA Com EUR 0.30 Hotels Accor SA Com EUR 3.00 Insurance AXA SA Com EUR 2.29 Integrated oil & gas Total SA Com EUR 2.50 Internet Iliad SA Com NPV Machinery — diversified Alstom SA Com EUR 7.00 Metal products Vallourec SA Com EUR 2.00 Oil equipment & services Cie Generale de Geophysique Veritas Com EUR 0.40 Technip SA Com EUR 0.76 Personal products L'Oreal SA Com EUR 0.20

Fair value $'000

% of net asset value

4,597

0.13

4,227 1,758

0.12 0.05

7,416 500

0.21 0.01

561 927

0.01 0.03

535 613

0.01 0.02

6,601

0.19

888 4,784

0.02 0.14

5,481

0.16

2,638 7,903

0.08 0.22

2,431

0.07

6,369

0.18

956

0.03

4,138

0.12

16,490

0.47

563

0.02

1,310

0.04

711

0.02

917 1,733

0.03 0.05

5,409

0.15

iShares plc Annual Report 381

As at 29 February 2012

Holding Investment

159,497 17,784

6,378 5,240

5,833 277,673 174,410 349,183 89,512

49,669 117,070

34,228 31,254 49,616 4,932 141,274 23,098 9,455 17,618 494,500 126,687 6,370 141,104 127,334 6,207

France (cont) Pharmaceuticals Sanofi Com EUR 2.00 Real estate investment trusts Unibail-Rodamco SE Reits EUR 5.00 Retail PPR Com EUR 4.00 Software Dassault Systemes SA Com EUR 1.00 Specialty finance Wendel SA Com EUR 4.00 Telecommunications France Telecom SA Com EUR 4.00 Vivendi SA Com EUR 5.50 Telecommunications equipment Alcatel-Lucent Com EUR 2.00 Transportation Groupe Eurotunnel SA Com EUR 0.40 Water Suez Environnement Co Com EUR 4.00 Veolia Environnement SA Com EUR 5.00 Total France Germany Airlines Deutsche Lufthansa AG Com NPV Apparel retailers Adidas AG Com NPV Auto manufacturers Bayerische Motoren Werke AG Com EUR 1.00 Continental AG Com NPV Daimler AG Com NPV Porsche Automobil Holding SE Pref NPV Volkswagen AG Com NPV Volkswagen AG Pref NPV Banks Commerzbank AG Com NPV Deutsche Bank AG Com NPV Building materials and fixtures HeidelbergCement AG Com NPV Chemicals BASF SE Com NPV Bayer AG Com NPV Brenntag AG Com NPV

382 iShares plc Annual Report

Fair value $'000

% of net asset value

11,844

0.33

3,449

0.10

1,089

0.03

443

0.01

493

0.01

Holding Investment

10,925 4,619 22,012 288,924 82,156 28,667 28,960 6,532

4,253 3,760

0.12 0.11

879

0.02

17,454 68,613 37,027 779

0.02

726

0.02

1,438 135,004

0.04 3.82

26,007 30,477 112,199 19,000 476

0.01

2,461

0.07

4,588 453 8,576

0.13 0.01 0.24

1,510 1,602 3,305

0.04 0.05 0.10

1,243 5,940

0.03 0.17

344

0.01

12,428 9,433 730

0.35 0.27 0.02

12,938 22,682 126,590 432,068 24,974 114,735 128,034 210,794

Germany (cont) Chemicalls (cont) K&S AG Com NPV Lanxess AG Com NPV Linde AG Com NPV Electricity E.ON AG Com NPV RWE AG Com NPV Food retailers and wholesalers Metro AG Com NPV Health care providers Fresenius Medical Care AG & Co KGaA Com NPV Fresenius SE & Co KGaA Com NPV Holding companies - diversified operations GEA Group AG Com NPV Insurance Allianz SE Com NPV Muenchener Rueckversicherungs AG Com NPV Internet United Internet AG Com NPV Investment services Deutsche Boerse AG Com NPV Iron & steel ThyssenKrupp AG Com NPV Machinery — diversified MAN SE Com NPV Media Kabel Deutschland Holding AG Com NPV ProSiebenSat.1 Media AG Pref NPV Miscellaneous manufacturers Siemens AG Com NPV Mobile telecommunications Deutsche Telekom AG Com NPV Nondurable household products Henkel AG & Co KGaA Pref NPV Semiconductors Infineon Technologies AG Com NPV Softwaare SAP AG Com NPV Transportation Deutsche Post AG Com NPV Total Germany

Greece Banks 168,696 National Bank of Greece SA Com EUR 5.00

Fair value $'000

% of net asset value

545 348 3,670

0.02 0.01 0.10

6,654 3,748

0.19 0.10

1,140

0.03

2,037 680

0.06 0.02

592

0.02

8,325

0.24

5,414

0.15

504

0.01

2,027

0.06

3,029

0.09

2,194

0.06

782 591

0.02 0.02

12,646

0.36

5,058

0.14

1,630

0.05

1,163

0.03

8,649

0.24

3,721 128,236

0.10 3.62

532

0.01

www.iShares.com

As at 29 February 2012

Holding Investment Greece (cont) Entertainment 42,175 OPAP SA Com EUR 0.30 Telecommunications 55,755 Hellenic Telecommunications Organization SA Com EUR 2.39 Total Greece

610,500 124,100

161,000

436,000 223,500 215,000 317,000 1,458,000 1,600,485

280,000 317,969 1,132,293 311,000 119,000 279,000 82,000 322,000

316,500 21,630

www.iShares.com

Hong Kong Banks BOC Hong Kong Holdings Ltd Com HKD 5.00 Hang Seng Bank Ltd Com HKD 5.00 Diversified financial services Hong Kong Exchanges and Clearing Ltd Com HKD 1.00 Diversified industrials Hutchison Whampoa Ltd Com HKD 0.25 Swire Pacific Ltd Com HKD 0.60 Wharf Holdings Ltd Com HKD 1.00 Electricity CLP Holdings Ltd Com HKD 5.00 Fixed line telecommunications PCCW Ltd Com HKD 0.25 Gas distribution Hong Kong & China Gas Co Ltd Com HKD 0.25 Hotels Galaxy Entertainment Group Ltd Com HKD 0.10 SJM Holdings Ltd Com HKD 1.00 Insurance AIA Group Ltd Com USD 1.00 Real estate inveestment & services Cheung Kong Holdings Ltd Com HKD 0.50 Hang Lung Group Ltd Com HKD 1.00 Hang Lung Properties Ltd Com HKD 1.00 Hysan Development Co Ltd Com HKD 5.00 Sun Hung Kai Properties Ltd Com HKD 0.50 Real estate investment trusts Link REIT Reits NPV Telecommunications HKT Trust & HKT Com HKD 0005 Total Hong Kong

Fair value $'000

% of net asset value

380

0.01

177 1,089

0.01 0.03

Holding Investment

104,063 104,428

124,118 32,237

1,708

0.05

1,733

0.05

2,998

0.08

14,330

64,552 5,457 100,271

4,337 2,537 1,339

0.12 0.07 0.04

2,798

0.08

540

0.02

4,090

0.12

690 665

0.02 0.02

4,292

0.12

82,429

Isle of Man Hotels 1,183,000 Genting Singapore Plc Com USD 0.10 Total Isle of Man

11,741 37,389 25,054

4,539

0.13

802

0.02

1,049

0.03

357

0.01

4,965

0.14

63,849

1,181

0.03

16 40,636

0.00 1.15

Ireland Building mateerials and fixtures CRH Plc Com EUR 0.32 James Hardie Industries SE Receipt EUR 0.59 Computers Accenture Plc Com USD 0.0000225 Seagate Technology Plc Com USD 0.00001 Food pro oducts Kerry Group Plc Class 'A' Com EUR 0.125 Health care services Covidien Plc Com USD 0.20 Miscellaneous manufacturers Cooper Industries Plc Com USD 0.01 Ingersoll-Rand Plc Com USD 1.00 Pharmaceuticals Elan Corp Plc Com EUR 0.05 Total Ireland

157,113

55,836

18,032 28,181

Israel Aerospace & defence Elbit Systems Ltd Com ILS 1.00 Banks Israel Discount Bank Ltd Com ILS 0.10 Mizrahi Tefahot Bank Ltd Com ILS 0.10 Chemicals Israel Chemicals Ltd Com ILS 1.00 Pharmaceutticals Teva Pharmaceutical Industries Ltd Com ILS 0.10 Telecommunications Bezeq The Israeli Telecommunication Corp Ltd Com ILS 1.00 Cellcom Israel Ltd Com ILS 0.01 NICE Systems Ltd Com ILS 1.00 Total Israel

Fair value $'000

% of net asset value

2,231

0.06

827

0.03

7,387

0.21

847

0.02

614

0.02

3,372

0.09

334 3,999

0.01 0.11

1,034 20,645

0.03 0.58

1,527 1,527

0.04 0.04

431

0.01

47

0.00

198

0.01

676

0.02

7,048

0.20

93 245 961 9,699

0.00 0.01 0.02 0.27

iShares plc Annual Report 383

As at 29 February 2012

Holding Investment

162,150 1,718,305 257,939 632,065 126,015

182,216 162,150 1,073,118 172,877

339,290 29,164 1,563,698 1,856,776

19,000 2,300 38,400 3,000 4,000 57,200 78,800 100,600 428,500 608,880 95,276 6,000 37,256

Italy Automobiles Fiat SpA Com EUR 3.50 Banks Intesa Sanpaolo SpA Com EUR 0.52 Mediobanca SpA Com EUR 0.50 UniCredit SpA Com NPV Unione di Banche Italiane SCPA Com EUR 2.50 Commercial services Atlantia SpA Com EUR 1.00 Commercial vehicles & trucks Fiat Industrial SpA Com EUR 3.50 Electricity Enel SpA Com EUR 1.00 Insurance Assicurazioni Generali SpA Com EUR 1.00 Integrated oil & gas ENI SpA Com EUR 1.00 Oil equipment & services Saipem SpA Com EUR 1.00 Telecommunications Telecom Italia SpA Com EUR 0.55 Telecom Italia SpA Com EUR 0.55 Non-Voting Total Italy Japan Apparel retailers Asics Corp Com NPV Auto parts Aisin Seiki Co Ltd Com NPV Denso Corp Com NPV Koito Manufacturing Co Ltd Com NPV NHK Spring Co Ltd Com NPV Automobiles Honda Motor Co Ltd Com NPV Nissan Motor Co Ltd Com NPV Toyota Motor Corp Com NPV Banks Mitsubishi UFJ Financial Group Inc Com NPV Mizuho Financial Group Inc Com NPV Resona Holdings Inc Com NPV Shizuoka Bank Ltd Com NPV Sumitomo Mitsui Financial Group Inc Com NPV

384 iShares plc Annual Report

Fair value $'000

942

% of net asset value

0.03

Holding Investment

378,000

3,356 1,686 3,287

0.09 0.05 0.09

70,300 25,600

578

0.02

72,000 30,300

3,049

0.09

1,716

0.05

4,321

0.12

2,794

0.08

7,852

0.22

1,480

0.04

1,807

0.05

1,750 34,618

0.05 0.98

237,000 56,000 18,800 13,000 3,200 32,600 8,000 31,700 27,000 69,000 3,100 21,800 224

0.01

31,200

81 1,274

0.00 0.04

32,900

52 41

0.00 0.00

2,184 809 4,157

0.06 0.02 0.12

2,218

0.06

1,016 457 61

0.03 0.01 0.00

1,267

0.04

42,800

6,000 1,200 330 1,500 2,000 280,000 9,000 18,900 16,000

Japan (cont) Banks (cont) Sumitomo Mitsui Trust Holdings Inc Com NPV Broadline retailers Aeon Co Ltd Com NPV Seven & I Holdings Co Ltd Com NPV Building materials and fixtures Asahi Glass Co Ltd Com NPV Daikin Industries Ltd Com NPV Commodity chemicals Asahi Kasei Corp Com NPV Computer hardware Fujitsu Ltd Com NPV TDK Corp Com NPV Computer services Itochu Techno-Solutions Corp Com NPV Otsuka Corp Com NPV Consumer electronics Panasonic Corp Com NPV Sharp Corp Com NPV Sony Corp Com NPV Electrical components & equipment Hitachi Ltd Com NPV Mitsubishi Electric Corp Com NPV Ushio Inc Com NPV Electricity Chubu Electric Power Co Inc Com NPV Kansai Electric Power Co Inc Com NPV Kyushu Electric Power Co Inc Com NPV Tokyo Electric Power Co Inc Com NPV Electronic office equipment Ricoh Co Ltd Com NPV Electronics Hoya Corp Com NPV Keyence Corp Com NPV Kyocera Corp Com NPV Murata Manufacturing Co Ltd Com NPV NEC Corp Com NPV Yaskawa Electric Corp Com NPV Yokogawa Electric Corp Com NPV Engineering & construction Chiyoda Corp Com NPV

Fair value $'000

% of net asset value

1,312

0.04

895

0.03

709

0.02

647 901

0.02 0.02

1,505

0.04

304 984

0.01 0.03

580 237

0.01 0.01

305 56 680

0.01 0.00 0.02

157 619 46

0.00 0.02 0.00

401

0.01

518

0.02

485

0.01

119

0.00

55

0.00

28 87 133

0.00 0.00 0.00

120 546 87 180

0.00 0.02 0.00 0.01

205

0.01

www.iShares.com

As at 29 February 2012

Holding Investment

4,384

6,500 241,682 35,000 6,700 110,000 16,000 43,000 10,700 58,400 61,200 34,200 69,100 7,100 15,100 282,000 293,500 43,000 55,000 174,000 262,000 31,400 22,900 4,200 67,500 43,700 30,200 23 www.iShares.com

Japan (cont) Fixed line telecommunications Nippon Telegraph & Telephone Corp Com NPV Footweear ABC-Mart Inc Com NPV Gas distribution Tokyo Gas Co Ltd Com NPV Hand & machine tools Fuji Electric Co Ltd Com NPV Industrial machinery FANUC Corp Com NPV Mitsubishi Heavy Industries Ltd Com NPV Nabtesco Corp Com NPV Industrial metals & mining Nippon Steel Corp Com NPV Yamato Kogyo Co Ltd Com NPV Industrial suppliers Mitsubishi Corp Com NPV Mitsui & Co Ltd Com NPV Sumitomo Corp Com NPV Insurance T&D Holdings Inc Com NPV Internet Dena Co Ltd Com NPV Gree Inc Com NPV Investment services Daiwa Securities Group Inc Com NPV Nomura Holdings Inc Com NPV Iron & steel Japan Steel Works Ltd Com NPV Machinery, construction & mining Komatsu Ltd Com NPV Marine traansportation Mitsui OSK Lines Ltd Com NPV Nippon Yusen KK Com NPV Medical equipment Terumo Corp Com NPV Metal fabricate/ hardware Maruichi Steel Tube Ltd Com NPV Miscellaneo ous manufacturers FUJIFILM Holdings Corp Com NPV Konica Minolta Holdings Inc Com NPV Nikon Corp Com NPV Olympus Corp Com NPV Mobile telecommunications KDDI Corp Com NPV

Fair value $'000

% of net asset value

Holding Investment

208

0.01

638 31,500

230

0.01

31,800

1,105

0.03

91

0.00

9 220,900

1,218

0.03

518 374

0.02 0.01

124 338

0.00 0.01

1,435 1,056 508

0.04 0.03 0.02

22,000 30,600

809

0.02

231 474

0.01 0.01

39,000 29,000 1,100

5,000 57,200 61,100 47,500

3,200

42,000 28,000

1,171 1,356

0.03 0.04

319

0.01

1,644

0.05

791 780

0.02 0.02

1,517

0.04

512

0.01

107

0.00

170,000

571 1,187 506

0.02 0.03 0.02

35,100

146

0.00

109 44

300 27,500 9,800 1,900

16,600 3,610

Japan (cont) Mobile telecommunications (cont) NTT DoCoMo Inc Com NPV Softbank Corp Com NPV Office & business equipment Canon Inc Com NPV Oil & gas Inpex Corp Com NPV JX Holdings Inc Com NPV Personal products Kao Corp Com NPV Pharmaceuticals Astellas Pharma Inc Com NPV Daiichi Sankyo Co Ltd Com NPV Takeda Pharmaceutical Co Ltd Com NPV Property & casualty insurance MS&AD Insurance Group Holdings Com NPV NKSJ Holdings Inc Com NPV Tokio Marine Holdings Inc Com NPV Real estate investment & services Mitsubishi Estate Co Ltd Com NPV Mitsui Fudosan Co Ltd Com NPV Nomura Real Estate Holdings Inc Com NPV Sumitomo Realty & Development Co Ltd Com NPV Tokyu Land Corp Com NPV Real estate investment truusts Japan Prime Realty Investment Corp Reits NPV Nomura Real Estate Office Fund Inc Reits NPV Semiconductors Rohm Co Ltd Com NPV Tokyo Electron Ltd Com NPV Soft drinks Coca-Cola West Co Ltd Com NPV Software Square Enix Holdings Co Ltd Com NPV Specialty chemicals Mitsubishi Chemical Holdings Corp Com NPV Shin-Etsu Chemical Co Ltd Com NPV Specialty finance ORIX Corp Com NPV Specialty retailers USS Co Ltd Com NPV

Fair value $'000

% of net asset value

1,092 941

0.03 0.03

1,444

0.04

64 1,389

0.00 0.04

128

0.00

2,353 1,126

0.07 0.03

2,151

0.06

69 518

0.00 0.02

847

0.02

707 552

0.02 0.02

19

0.00

983 135

0.03 0.00

289

0.01

256

0.01

15 1,532

0.00 0.04

167

0.01

37

0.00

981

0.03

1,884

0.05

1,604

0.05

355

0.01

iShares plc Annual Report 385

As at 29 February 2012

Holding Investment

10,470 139 30,200 800 13 8,952 5,100

355,696 301,876 66,709 14,204

37,287 64,657

Japan (cont) Specialty retailers (cont) Yamada Denki Co Ltd Com NPV Tobacco Japan Tobacco Inc Com NPV Toys Namco Bandai Holdings Inc Com NPV Nintendo Co Ltd Com NPV Transportation Central Japan Railway Co Com NPV East Japan Railway Co Com NPV Tyres Sumitomo Rubber Industries Ltd Com NPV Total Japan Jersey Advertising WPP Plc Com GBP 0.10 Commercial services Experian Plc Com USD 0.10 Distribution & wholesale Wolseley Plc Com GBP 0.10 Mining Randgold Resources Ltd Com USD 0.05 Oil & gas services Petrofac Ltd Com USD 0.02 Pharmaceuticals Shire Plc Com GBP 0.05 Total Jersey

Liberia Leisure time 3,572 Royal Caribbean Cruises Ltd Com USD 0.01 Total Liberia

171,638 34,106 40,459 7,545

Luxembourg Iron & steel ArcelorMittal Com NPV Metal fabricate/ hardware Tenaris SA Com USD 1.00 Oil & gas services Subsea 7 SA Com USD 2.00 Telecommunications Millicom International Cellular SA Receipt USD 1.50 Total Luxembourg

386 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment Mauritius Agriculture 953,000 Golden Agri-Resources Ltd Com USD 0.025 Total Mauritius

679

0.02

741

0.02

422 119

0.01 0.01

46,886

107 575

0.00 0.02

55,878 179,516

64 70,413

0.00 1.99

299,429 233,060

4,565

0.13

4,555

0.13

2,596

0.07

15,855 247,081 550,638 12,980

1,633

0.05

947

0.03

2,269 16,565

0.06 0.47

9,030

5,845 21,592 75,614 16,111

102 102

0.00 0.00

354,030 63,701

3,633

0.10

666

0.02

977

0.03

850 6,126

0.02 0.17

Netherlands Aerospace European Aeronautic Defence and Space Co NV Com EUR 1.00 Chemicals Akzo Nobel NV Com EUR 2.00 Electronics Koninklijke Philips Electronics NV Com EUR 0.20 Food retailers and wholesalers Koninklijke Ahold NV Com EUR 0.30 Unilever NV CVS EUR 0.16 Healthcare products Qiagen NV Com EUR 0.01 Insurance Aegon NV Com EUR 0.12 ING Groep NV CVS EUR 0.24 Marine transportation Koninklijke Vopak NV Com EUR 0.50 Media Nielsen Holdings NV Com EUR 0.07 Oil equipment & services Fugro NV CVS EUR 0.05 SBM Offshore NV Com EUR 0.25 Semiconductors ASML Holding NV Com EUR 0.09 STMicroelectronics NV Com EUR 1.04 Telecommunications Koninklijke KPN NV Com EUR 0.24 Transp portation TNT Express NV Com EUR 0.08 Total Netherlands

New Zealand Fixed line telecommunications 290,828 Telecom Corp of New Zealand Ltd Com NPV Total New Zealand

Fair value $'000

% of net asset value

554 554

0.02 0.02

1,710

0.05

3,180

0.09

3,782

0.11

4,158 7,772

0.12 0.22

244

0.01

1,299 4,903

0.03 0.14

727

0.02

266

0.01

431 393

0.01 0.01

3,489

0.10

121

0.00

3,853

0.11

797 37,125

0.02 1.05

524 524

0.02 0.02

www.iShares.com

As at 29 February 2012

Holding Investment

187,413 46,600 333,007 168,115 128,088

Norw way Banks DNB ASA Com NOK 10.00 Engineering & construction Aker Solutions ASA Com NOK 1.66 Industrial metals & mining Norsk Hydro ASA Com NOK 1.10 Integrated oil & gas Statoil ASA Com NOK 2.50 Mobile telecommunications Telenor ASA Com NOK 6.00 Total Norway

Panama Leisure time 96,365 Carnival Corp Com USD 0.01 Total Panama Portugal Building materials and fixtures 76,131 Cimpor Cimentos de Portugal SGPS SA Com EUR 1.00 Food retailers and wholesalers 37,902 Jeronimo Martins SGPS SA Com EUR 1.00 Telecommunications 314,293 Portugal Telecom SGPS SA Com EUR 0.03 Total Portugal

Fair value $'000

% of net asset value

Holding Investment

2,411

0.07

128,000

811

0.02

55,000 219,000

2,013

0.06

4,837

0.13

353,000

2,381 12,453

0.07 0.35

390,500 220,000 38,000 393,000

2,916 2,916

0.08 0.08

422,000 17,000 378,000

518

0.01

701

0.02

1,632 2,851

0.05 0.08

270,000

105,342 19,212

240,866 283,000 468,000 210,000

235,569

1,257,000

243,000

309,000

www.iShares.com

Singapore Airlines Singapore Airlines Ltd Com NPV Banks DBS Group Holdings Ltd Com NPV Oversea-Chinese Banking Corp Ltd Com NPV United Overseas Bank Ltd Com NPV Electronics Flextronics International Ltd Com NPV Fixed line telecommunications Singapore Telecommunications Ltd Com NPV Food products Olam International Ltd Com NPV Holding companies - diversified operations Keppel Corp Ltd Com NPV

684,536 2,127

0.06 141,847

3,223

0.09

3,367

0.09

3,036

0.09

128,916 1,201,527

14,052 1,661

0.05 838,461 21,601

3,185

0.09

462

0.01

2,738

0.08

47,731 668,008

Singapore (cont) Investment services Singapore Exchange Ltd Com NPV Marine transportation SembCorp Marine Ltd Com NPV Yangzijiang Shipbuilding Holdings Ltd Com NPV Mobile telecommunications StarHub Ltd Com NPV Real estate investment & services CapitaLand Ltd Com NPV Keppel Land Ltd Com NPV UOL Group Ltd Com NPV Real estate investment trusts Ascendas Real Estate Investment Trust Reits NPV CapitaMall Trust Reits NPV Semiconductors Avago Technologies Ltd Com NPV Transportation Hutchison Port Holdings Trust Unit NPV ComfortDelgro Corp Ltd Com NPV Total Singapore Spain Alternative energy EDP Renovaveis SA Com EUR 5.00 Apparel retailers Inditex SA Com EUR 0.15 Banks Banco Bilbao Vizcaya Argentaria SA Com EUR 0.49 Banco de Sabadell SA Com EUR 0.125 Banco Popular Espanol SA Com EUR 0.10 Banco Santander SA Com EUR 0.50 Computer services Indra Sistemas SA Com EUR 0.20 Electricity Iberdrola SA Com EUR 0.75 Red Electrica Corp SA Com EUR 2.00 Engineering & construction Ferrovial SA Com EUR 0.20 Fixed line telecommunications Telefonica SA Com EUR 1.00

Fair value $'000

% of net asset value

739

0.02

236

0.00

239

0.01

827

0.02

961 603 143

0.03 0.02 0.00

643 606

0.02 0.02

639

0.02

300 330 26,065

0.01 0.01 0.74

551

0.02

1,781

0.05

6,162

0.18

459

0.01

530

0.02

10,005

0.28

179

0.01

4,981

0.14

1,095

0.03

607

0.02

11,447

0.32

iShares plc Annual Report 387

As at 29 February 2012

Holding Investment

99,334

99,713

110,529 25,076 34,681

198,081 527,226 296,353 70,929 114,875 298,749 19,800 83,097

133,570

92,678 64,244 122,662 55,449 77,900 65,481 177,800 406,636

Spain (cont) Food Distribuidora Internacional de Alimentacion SA Com EUR 0.01 Heavy construction ACS Actividades de Construccion y Servicios SA Com EUR 0.50 Integrated oil & gas Repsol YPF SA Com EUR 1.00 Pharmaceuticals Grifols SA Com EUR 0.50 Sofftware Amadeus IT Holding SA Com EUR 0.01 Total Spain Sweden Apparel retailers Hennes & Mauritz AB Com NPV Banks Nordea Bank AB Com NPV Skandinaviska Enskilda Banken AB Com NPV Svenska Handelsbanken AB Com NPV Swedbank AB Com NPV Commercial vehicles & trucks Volvo AB Com NPV Diversified industrials Hexagon AB Com SEK 2.00 Forest products & paper Svenska Cellulosa AB Class 'B' Com NPV Hand & machine tools Sandvik AB Com NPV Household goods & home construction Electrolux AB Com NPV Husqvarna AB Class 'B' Com NPV Machinery, construction & mining Atlas Copco AB Com NPV Metal fabricate/ hardware SKF AB Com SEK 1.25 Mining Boliden AB Com SEK 2.11 Specialty finance Investor AB Com NPV Ratos AB Com NPV Telecommunications equipment Telefonaktiebolaget LM Ericsson Com NPV

388 iShares plc Annual Report

Fair value $'000

488

% of net asset value

0.01

2,979

0.08

2,894

0.08

523

0.01

Holding Investment Sweden (cont) Telecommunications equipment (cont) 315,695 TeliaSonera AB Com NPV Tobacco 23,522 Swedish Match AB Com NPV Total Sweden

170,093 31,277

664 45,345

0.02 1.28

578,605 3,244 4,559 44,255 226

7,163

0.20

5,111

0.14

2,231

0.06

2,396 1,976

0.07 0.06

4,386

0.12

400

0.01

57,452 62,296

1,491

0.04

361,803

2,054

0.06

31,277

2,046 389

0.06 0.01

3,220

0.09

1,411

0.04

1,372

0.04

1,466 2,317

0.04 0.07

4,109

0.12

660 20,519 11,529 531

53,904 48 23 503,868 5,823

6,022 1,116

5,149

Switzerland Banks Credit Suisse Group AG Com CHF 0.04 Julius Baer Group Ltd Com CHF 0.02 UBS AG Com CHF 0.10 Biotechnology Lonza Group AG Com CHF 1.00 Building materials and fixtures Geberit AG Com CHF 0.10 Holcim Ltd Com CHF 2.00 Sika AG Com CHF 0.60 Chemicals Givaudan SA Com CHF 10.00 Syngenta AG Com CHF 0.10 Commercial services Adecco SA Com CHF 1.00 SGS SA Com CHF 1.00 Electronic equipment TE Connectivity Ltd Com CHF 1.37 Tyco International Ltd Com CHF 6.70 Engineering & construction ABB Ltd Com CHF 1.03 Financial services GAM Holding AG Com CHF 0.05 Food products Aryzta AG Com CHF 0.02 Lindt & Spruengli AG Com CHF 10.00 Lindt & Spruengli AG Com CHF 100.00 Nestle SA Com CHF 0.10 Hand & machine tools Schindler Holding AG Com CHF 0.10 Healthcare products Sonova Holding AG Com CHF 0.05 Straumann Holding AG Com CHF 0.10 Insurance Swiss Life Holding AG Com CHF 5.10

Fair value $'000

% of net asset value

2,318

0.06

904 46,760

0.03 1.32

4,590

0.13

1,231 8,125

0.03 0.23

169

0.01

983 2,899 494

0.03 0.08 0.01

626 6,719

0.02 0.19

580 999

0.01 0.03

2,100

0.06

3,229

0.09

7,438

0.21

412

0.01

2,681

0.08

148

0.00

833 30,931

0.02 0.88

720

0.02

675

0.01

178

0.01

596

0.02

www.iShares.com

As at 29 February 2012

Holding Investment

55,737 27,381

1,992

4,121 96,267 47,015 178,215

11,928 308,962 105,614 78,136 76,512 4,056

272,160

95,647

1,658,066 2,496,302 6,226,577 2,823,650 323,480

374,745 178,977 325,389

37,330 www.iShares.com

Switzerland (cont) Insurance (cont) Swiss Re AG Com CHF 0.10 Zurich Financial Services AG Com CHF 0.10 Marine transportation Kuehne + Nagel International AG Com CHF 1.00 Miscellaneous manufacturers Sulzer AG Com CHF 0.01 Oil & gas Noble Corp Com CHF 3.28 Transocean Ltd Com CHF 15.00 Weatherford International Ltd Com USD 1.16 Pharmaceuticals Actelion Ltd Com CHF 0.50 Novartis AG Com CHF 0.50 Roche Holding AG Com NPV Property & casualty insurance ACE Ltd Com CHF 30.57 Retail Cie Financiere Richemont SA Com CHF 1.00 Swatch Group AG Com CHF 2.25 Total Switzerland United Kingd dom Aerospace Rolls-Royce Holdings Plc Com GBP 0.20 Apparel retailers Burberry Group Plc Com GBP 0.0005 Banks Barclays Plc Com GBP 0.25 HSBC Holdings Plc Com USD 0.50 Lloyds Banking Group Plc Com GBP 0.10 Royal Bank of Scotland Group Plc Com GBP 0.25 Standard Chartered Plc Com USD 0.50 Beverages Diageo Plc Com GBP 0.29 SABMiller Plc Com USD 0.10 Broadline retailers Marks & Spencer Group Plc Com GBP 0.25 Commercial services Aggreko Plc Com GBP 0.14

Fair value $'000

% of net asset value

Holding Investment

3,319

0.09

58,129

6,921

0.20

24,911

263

0.01

594

0.02

3,866 2,517

0.11 0.07

2,844

0.08

452 16,901 18,465

0.01 0.48 0.52

5,603

0.16

130,893 826,866 820,849 139,260 261,625 145,759 233,332 1,193,769 218,152 712,316 4,714 1,846 145,661

0.14 0.05 4.12

3,539

0.10

1,216,892 192,819 327,104 197,290 275,329 31,010

2,157

0.06

6,489 22,144

0.18 0.63

3,473

0.10

1,260

0.03

529,424 2,518,162 498,036

8,358

0.24

376,673

8,995 7,283

0.25 0.21

1,886

0.05

404,294 920,848 450,403

75,292 37,218 16,023

1,320

United Kingdom (cont) Commercial services (cont)) Babcock International Group Plc Com GBP 0.60 Intertek Group Plc Com GBP 0.01 Containers & packaging Rexam Plc Com GBP 0.64 Defence BAE Systems Plc Com GBP 0.03 Diversified d financial services Old Mutual Plc Com GBP 0.10 Electricity SSE Plc Com GBP 0.50 Financial services Man Group Plc Com USD 0.03 Food Compass Group Plc Com GBP 0.10 J Sainsbury Plc Com GBP 0.29 Tesco Plc Com GBP 0.05 Unilever Plc Com GBP 0.03 Gas National Grid Plc Com GBP 0.11 Gas distribution Centrica Plc Com GBP 0.06 General mining Anglo American Plc Com USD 0.55 BHP Billiton Plc Com USD 0.50 Rio Tinto Plc Com GBP 0.10 Xstrata Plc Com USD 0.50 Industrial machinery Weir Group Plc Com GBP 0.13 Insurance Aviva Plc Com GBP 0.25 Legal & General Group Plc Com GBP 0.025 Prudential Plc Com GBP 0.05 Integrated oil & gas BG Group Plc Com GBP 0.10 BP Plc Com USD 0.25 Royal Dutch Shell Plc Com EUR 0.07 Class 'A' Royal Dutch Shell Plc Com EUR 0.07 Class 'B' Leisure time Carnival Plc Com USD 1.66 Lodging Intercontinental Hotels Group Plc Com GBP 0.14 Whitbread Plc Com GBP 0.77

Fair value $'000

% of net asset value

699 920

0.02 0.02

867

0.02

4,125

0.12

2,086

0.06

2,868

0.08

547

0.02

1,466 1,112 6,027 7,074

0.04 0.03 0.17 0.20

7,300

0.21

5,908

0.17

8,161 10,647 11,295 5,278

0.23 0.30 0.32 0.15

1,043

0.03

2,379

0.07

1,776 5,126

0.05 0.14

12,826 19,807

0.36 0.56

18,191

0.51

14,017

0.40

2,221

0.06

852 434

0.03 0.01

0.04 iShares plc Annual Report 389

As at 29 February 2012

Holding Investment

303,668 473,221 441,038 18,927 119,563 81,812 7,671,101 116,473

121,029 59,610 211,745 765,831 128,801 310,978

358,191 199,064

139,239 1,155,959 283,228 205,928

39,545

United Kingdom (cont) Media British Sky Broadcasting Group Plc Com GBP 0.50 ITV Plc Com GBP 0.10 Reed Elsevier Plc Com GBP 0.14 Mining Fresnillo Plc Com USD 0.50 Miscellaneous manufacturers Invensys Plc Com GBP 0.10 Mobile telecommunications Inmarsat Plc Com EUR 0.0005 Vodafone Group Plc Com USD 0.11 Nondurable household products Reckitt Benckiser Group Plc Com GBP 0.10 Oil & gas Tullow Oil Plc Com GBP 0.10 Oil equipment & services AMEC Plc Com GBP 0.50 Pharmaceuticals AstraZeneca Plc Com USD 0.25 GlaxoSmithKline Plc Com GBP 0.25 Real estate investment trusts British Land Co Plc Reits GBP 0.25 Land Securities Group Plc Reits GBP 0.10 Retail Kingfisher Plc Com GBP 0.16 Semiconductors ARM Holdings Plc Com GBP 0.0005 Software Sage Group Plc Com GBP 0.01 Telecommunications BT Group Plc Com GBP 0.05 Tobacco British American Tobacco Plc Com GBP 0.25 Imperial Tobacco Group Plc Com GBP 0.10 Water Severn Trent Plc Com GBP 0.98 Total United Kingdom

United States Aerospace 97,815 Boeing Co Com USD 5.00 130,462 United Technologies Corp Com USD 1.00 390 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

96,390 3,247 650 3,875

0.09 0.02 0.11

10,574

575

0.02

397

0.01

627 20,746

0.02 0.58

6,473

0.18

46,993 127,440 77,015 25,573 71,010 12,216 5,383 19,757 60,602

2,852

0.08

88,216

1,052

0.03

9,493 16,968

0.27 0.48

5,202 13,524 40,940 158,319

968

0.03

3,353

0.09

1,626

0.05

1,811

0.05

691

0.02

3,968

0.11

14,374

0.41

8,194

0.23

994 324,890

0.03 9.18

13,647 9,286

437,009 104,868 72,806 1,444,889 172,262 96,099 61,759 18,000 405,848 102,249 72,524 566,622

7,328

0.21

10,942

0.31

159,914 181,375 77,493

United States (cont) Agriculture Archer-Daniels-Midland Co Com NPV Apparel retailers Abercrombie & Fitch Co Com USD 0.01 Coach Inc Com USD 0.01 Gap Inc Com USD 0.05 Kohl's Corp Com USD 0.01 Ltd Brands Inc Com USD 0.50 NIKE Inc Com NPV Nordstrom Inc Com NPV Ralph Lauren Corp Com USD 0.01 Ross Stores Inc Com USD 0.01 TJX Cos Inc Com USD 1.00 Auto manufacturerrs Paccar Inc Com USD 1.00 Auto parts & equipment Autoliv Inc Com USD 1.00 BorgWarner Inc Com USD 0.01 Goodyear Tire & Rubber Co Com NPV Johnson Controls Inc Com USD 0.01388 O'Reilly Automotive Inc Com USD 0.01 TRW Automotive Holdings Corp Com USD 0.01 Automobiles Ford Motor Co Com USD 0.01 General Motors Co Com USD 0.01 Harley-Davidson Inc Com USD 0.01 Banks Bank of America Corp Com USD 0.01 Bank of New York Mellon Corp Com USD 0.01 BB&T Corp Com USD 5.00 Capital One Financial Corp Com USD 0.01 CIT Group Inc Com USD 0.01 Citigroup Inc Com USD 0.01 Fifth Third Bancorp Com NPV Goldman Sachs Group Inc Com USD 0.01 JPMorgan Chase & Co Com USD 1.00 KeyCorp Com USD 1.00 Morgan Stanley Com USD 0.01 PNC Financial Services Group Inc Com USD 5.00

Fair value $'000

% of net asset value

3,007

0.09

484 3,517 2,977 3,826 1,190 7,665 655 935 1,054 2,219

0.01 0.10 0.08 0.11 0.03 0.22 0.02 0.03 0.03 0.06

4,059

0.11

346 1,120

0.01 0.03

526

0.02

5,166

0.15

1,180

0.03

425

0.01

5,406 2,728 3,390

0.15 0.08 0.10

11,516

0.32

3,809 2,811

0.11 0.08

3,126 733 13,511 1,390

0.09 0.02 0.38 0.04

8,353

0.24

22,240 1,295 3,361

0.63 0.04 0.09

4,612

0.13

www.iShares.com

As at 29 February 2012

Holding Investment

226,637 75,955 288,018 706,807 58,357 312,244 46,351 55,087 17,945 16,850 227,344 25,392 151,282 44,393 57,680 138,472 14,249 23,276

17,064 96,392 254,380 157,562 138,458 16,890 254,871 143,853 47,675 199,732 96,392 28,246 276,651 64,853

www.iShares.com

United States (cont) Banks (cont) Regions Financial Corp Com USD 0.01 SunTrust Banks Inc Com USD 1.00 US Bancorp Com USD 0.01 Wells Fargo & Co Com USD 1.67 Beverages Beam Inc Com USD 3.13 Coca-Cola Co Com USD 0.25 Coca-Cola Enterprises Inc Com USD 1.00 Dr Pepper Snapple Group Inc Com USD 0.01 Green Mountain Coffee Roasters Inc Com USD 0.10 Monster Beverage Corp Com USD 0.005 PepsiCo Inc Com USD 0.02 Biotechnology Alexion Pharmaceuticals Inc Com USD 0.0001 Amgen Inc Com USD 0.0001 Biogen Idec Inc Com USD 0.0005 Celgene Corp Com USD 0.01 Gilead Sciences Inc Com USD 0.001 Illumina Inc Com USD 0.01 Vertex Pharmaceuticals Inc Com USD 0.01 Broadcasting & entertainment Cablevision Systems Corp Com USD 0.01 CBS Corp Com USD 0.001 Comcast Corp Com USD 1.00 Comcast Corp Com USD 1.00 DIRECTV Com USD 0.01 Liberty Global Inc Class 'A' Com USD 0.01 News Corp Com USD 0.01 News Corp Class 'B' Com USD 0.01 Time Warner Cable Inc Com USD 0.01 Time Warner Inc Com USD 0.01 Viacom Inc Com USD 0.001 Virgin Media Inc Com USD 0.01 Walt Disney Co Com USD 0.01 Broadline retailers Costco Wholesale Corp Com USD 0.005

Fair value $'000

1,305 1,745 8,468 22,116

% of net asset value

0.04 0.05 0.24 0.62

3,214 21,795

0.09 0.62

1,339

0.04

2,096

0.06

1,166

0.03

964 14,298

0.03 0.40

2,125 10,280 5,171 4,229

0.06 0.29 0.15 0.12

6,299 730

0.18 0.02

905

0.02

243 2,882 7,474 4,505 6,413

0.01 0.08 0.21 0.13 0.18

847 5,062

0.02 0.14

2,919

0.08

3,783 7,432 4,590 711 11,616

0.11 0.21 0.13 0.02 0.33

5,582

0.16

Holding Investment

13,259 33,156 111,716 5,022 104,819 11,599 268,671 160,994 19,285 8,146 19,867 128,873

54,698 22,302 170,400 130,504 87,887 27,160 63,462 17,336

18,172 15,449 20,813 61,483 3,519 37,868 97,246 5,142 139,336 12,329 3,742 86,695

United States (cont) Broadline retailers (cont) Dollar Tree Inc Com USD 0.01 JC Penney Co Inc Com USD 0.50 Macy's Inc Com USD 0.01 Sears Holdings Corp Com USD 0.01 Target Corp Com USD 0.0833 Urban Outfitters Inc Com USD 0.0001 Wal-Mart Stores Inc Com USD 0.10 Building materials and fixtures Masco Corp Com USD 1.00 Toll Brothers Inc Com USD 0.01 Business support services Alliance Data Systems Corp Com USD 0.01 Iron Mountain Inc Com USD 0.01 RR Donnelley & Sons Co Com USD 1.25 Chemicals Air Products & Chemicals Inc Com USD 1.00 Celanese Corp Com USD 0.0001 Dow Chemical Co Com USD 2.50 EI du Pont de Nemours & Co Com USD 0.30 Monsanto Co Com USD 0.01 Mosaic Co Com USD 0.01 Praxair Inc Com USD 0.01 Clothing & accessories Lululemon Athletica Inc Com USD 0.01 Coal Alpha Natural Resources Inc Com USD 0.01 Arch Coal Inc Com USD 0.01 Consol Energy Inc Com USD 0.01 Peabody Energy Corp Com USD 0.01 Walter Energy Inc Com USD 0.01 Commercial services Apollo Group Inc Com NPV Automatic Data Processing Inc Com USD 0.10 DeVry Inc Com USD 0.01 H&R Block Inc Com NPV Hertz Global Holdings Inc Com USD 0.01 Manpower Inc Com USD 0.01 Paychex Inc Com USD 0.01

Fair value $'000

% of net asset value

1,173 1,313 4,242

0.03 0.03 0.12

350 5,932

0.01 0.17

329 15,889

0.01 0.45

1,913 452

0.06 0.01

989 615

0.03 0.02

1,781

0.05

4,935 1,061 5,710

0.14 0.03 0.16

6,635 6,801 1,567 6,918

0.19 0.19 0.04 0.20

1,162

0.03

337 210 745

0.01 0.01 0.02

2,142 228

0.05 0.01

1,614

0.05

5,281 183 2,271

0.15 0.01 0.06

176 161 2,714

0.00 0.00 0.08

iShares plc Annual Report 391

As at 29 February 2012

Holding Investment

71,249 20,216 19,800

132,814 28,947 242,027 322,424 302,061 6,248 181,784 57,475 51,156 13,125 20,236 13,790

159,866 83,988 12,155 131,035 67,913 127,740 390,951

65,346 65,094 82,591 117,613 9,559 63,462 96,943

22,605 57,011

United States (cont) Commercial services (cont) Robert Half International Inc Com USD 0.001 Total System Services Inc Com USD 0.10 Verisk Analytics Inc Com USD 0.001 Computers Apple Inc Com NPV Cognizant Technology Solutions Corp Com USD 0.01 Dell Inc Com USD 0.01 EMC Corp Com USD 0.01 Hewlett-Packard Co Com USD 0.01 IHS Inc Com USD 0.01 International Business Machines Corp Com USD 0.20 NetApp Inc Com USD 0.001 SanDisk Corp Com USD 0.001 Synopsys Inc Com USD 0.01 Teradata Corp Com USD 0.01 Western Digital Corp Com USD 0.01 Consumer finance American Express Co Com USD 0.20 Discover Financial Services Com USD 0.01 Mastercard Inc Com USD 0.0001 SLM Corp Com USD 0.20 Visa Inc Com USD 0.0001 Western Union Co Com USD 0.01 Cosmetics & person nal care Procter & Gamble Co Com USD 1.00 Defence General Dynamics Corp Com USD 1.00 Lockheed Martin Corp Com USD 1.00 Northrop Grumman Corp Com USD 1.00 Raytheon Co Com USD 0.01 Delivery services Expeditors International of Washington Inc Com USD 0.01 FedEx Corp Com USD 0.10 United Parcel Service Inc Com USD 0.01 Distribution & wholesale Fastenal Co Com USD 0.01 Genuine Parts Co Com USD 1.00

392 iShares plc Annual Report

Fair value $'000

% of net asset value

2,026

0.06

442

0.01

861

0.02

71,928

2.03

2,054 4,184 8,928 7,648 591

0.06 0.12 0.25 0.22 0.02

35,764 2,471 2,531 400 1,347

1.01 0.07 0.07 0.01 0.04

541

0.01

8,451

0.24

2,520 5,101 2,064 7,900 2,230

0.07 0.15 0.06 0.22 0.06

Holding Investment

95,810 98,069 88,462 1,550,246 12,451 129,016

107,730 72,210 28,061 96,832 128,119 297,497 97,445 32,204 120,737 47,125 97,259 56,510 59,287 129,972 129,093 64,324

26,413

0.75

32,001 10,083 129,271

4,786

0.14

62,907

5,756

0.16

5,067

4,940 5,943

0.14 0.17

21,191 8,130 11,540

417 5,710

0.01 0.16

7,454

0.21

1,190 3,575

0.03 0.10

20,721

9,476 158,813

United States (cont) Diversified financial services State Street Corp Com USD 1.00 Diversified industrials 3M Co Com USD 0.01 Eaton Corp Com USD 0.50 General Electric Co Com USD 0.06 Electrical components & equipment AMETEK Inc Com USD 0.01 Emerson Electric Co Com USD 0.50 Electricityy AES Corp Com USD 0.01 American Electric Power Co Inc Com USD 6.50 Calpine Corp Com USD 0.001 Consolidated Edison Inc Com USD 0.10 Dominion Resources Inc Com NPV Duke Energy Corp Com USD 0.001 Edison International Com NPV Entergy Corp Com USD 0.01 Exelon Corp Com NPV FirstEnergy Corp Com USD 0.10 NextEra Energy Inc Com USD 0.01 PG&E Corp Com NPV PPL Corp Com USD 0.01 Public Service Enterprise Group Inc Com NPV Southern Co Com USD 5.00 Electronics Agilent Technologies Inc Com USD 0.01 Amphenol Corp Com USD 0.001 FLIR Systems Inc Com USD 0.01 Honeywell International Inc Com USD 1.00 Thermo Fisher Scientific Inc Com USD 1.00 Waters Corp Com USD 0.01 Engineering & construction Fluor Corp Com USD 0.01 Jacobs Engineering Group Inc Com USD 1.00 KBR Inc Com USD 0.001 Entertainment International Game Technology Com USD 0.00015625 Environmental control Stericycle Inc Com USD 0.01 Waste Management Inc Com USD 0.01

Fair value $'000

% of net asset value

4,046

0.11

8,588 4,617 29,532

0.24 0.13 0.84

593

0.02

6,488

0.18

1,459

0.04

2,714 429

0.08 0.01

5,624 6,467 6,224 4,080 2,146 4,717 2,087 5,789 2,357 1,692

0.16 0.18 0.18 0.12 0.06 0.13 0.06 0.16 0.07 0.05

4,002 5,705

0.11 0.16

2,804 1,791 264

0.08 0.05 0.01

7,695

0.22

3,562 451

0.10 0.01

1,281

0.04

376 419

0.01 0.01

311

0.01

822

0.02

5,557

0.16

www.iShares.com

As at 29 February 2012

Holding Investment

13,207 38,002

879,696 60,095 100,010 419,204

183,035 131,364 68,310 256,884 99,801 34,962 129,587 10,648 123,798

59,310

94,749

87,622 71,214 5,807 23,195 173,599 65,373 108,627 66,845 292,928 10,671 3,623 163,569 81,348 www.iShares.com

United States (cont) Financial services BlackRock Inc Com USD 0.01** Franklin Resources Inc Com USD 0.10 Fixed line telecommunications AT&T Inc Com USD 1.00 CenturyLink Inc Com USD 1.00 Frontier Communications Corp Com USD 0.25 Verizon Communications Inc Com USD 0.10 Food ConAgra Foods Inc Com USD 5.00 General Mills Inc Com USD 0.10 HJ Heinz Co Com USD 0.25 Kraft Foods Inc Com NPV Kroger Co Com USD 1.00 Sara Lee Corp Com USD 0.01 Sysco Corp Com USD 1.00 Whole Foods Market Inc Com NPV Forest products & paper International Paper Co Com USD 1.00 Gas CenterPoint Energy Inc Com USD 0.01 Gas distribution Spectra Energy Corp Com USD 0.001 Health care providers Aetna Inc Com USD 0.01 Cigna Corp Com USD 0.25 Covance Inc Com USD 0.01 Quest Diagnostics Inc Com USD 0.01 UnitedHealth Group Inc Com USD 0.01 WellPoint Inc Com USD 0.01 Healthcare products Baxter International Inc Com USD 1.00 Becton Dickinson and Co Com USD 1.00 Boston Scientific Corp Com USD 0.01 Edwards Lifesciences Corp Com USD 1.00 Intuitive Surgical Inc Com USD 0.001 Medtronic Inc Com USD 0.10 St Jude Medical Inc Com USD 0.10

Fair value $'000

% of net asset value

2,628

0.07

4,478

0.13

26,883 2,419

0.76 0.07

457

0.01

15,980

0.45

Holding Investment

39,944 3,732 27,413

4,803 5,032 3,601 9,772 2,374 708 3,810 859

0.14 0.14 0.10 0.28 0.07 0.02 0.11 0.02

4,351

0.12

1,156

0.03

201,193 198,521 37,218 12,795 53,402 59,133 9,229 65,448

6,971 3,114 4,016 178,873

2,974

0.08

4,097 3,141 277

0.12 0.09 0.01

71,584 63,409 119,375 69,523

1,347

0.04 64,134

9,678 4,289

0.27 0.12

6,314

0.18

5,095

0.14

39,007 160,881 150,728 46,943 87,373

1,822

0.05

780

0.02

1,854 6,229 3,425

0.05 0.18 0.10

287,446 196,607 712,381 14,453

United States (cont) Healthcare products (cont) Stryker Corp Com USD 0.10 Synthes Inc Com CHF 0.001 Home construction DR Horton Inc Com USD 0.01 Home improvement retailers Home Depot Inc Com USD 0.05 Lowe's Cos Inc Com USD 0.50 Hotels Las Vegas Sands Corp Com USD 0.001 Marriott International Inc Com USD 0.01 MGM Resorts International Com USD 0.01 Starwood Hotels & Resorts Worldwide Inc Com USD 0.01 Wynn Resorts Ltd Com USD 0.01 Household products Kimberly-Clark Corp Com USD 1.25 Industrial machinery AGCO Corp Com USD 0.01 Flowserve Corp Com USD 1.25 SPX Corp Com USD 10.00 Industrial metals & mining Alcoa Inc Com USD 1.00 Insurancce Aflac Inc Com USD 0.10 American International Group Inc Com USD 2.50 Berkshire Hathaway Inc Com USD 0.0033 Genworth Financial Inc Com USD 0.001 Hartford Financial Services Group Inc Com USD 0.01 Lincoln National Corp Com NPV Marsh & McLennan Cos Inc Com USD 1.00 MetLife Inc Com USD 0.01 Principal Financial Group Inc Com USD 0.01 Prudential Financial Inc Com USD 0.01 Integrated oil & gas Chevron Corp Com USD 0.75 ConocoPhillips Com USD 0.01 Exxon Mobil Corp Com NPV Helmerich & Payne Inc Com USD 0.10

Fair value $'000

% of net asset value

2,143 649

0.06 0.02

393

0.01

9,571 5,632

0.27 0.16

2,070

0.06

451

0.01

735

0.02

3,187 1,094

0.09 0.03

4,770

0.13

360 367 294

0.01 0.01 0.01

1,819

0.05

3,382

0.10

1,851

0.05

9,368

0.26

632

0.02

1,329 969

0.04 0.03

5,021 5,811

0.14 0.16

1,297

0.04

5,345

0.15

31,375 15,054 61,635

0.89 0.43 1.74

886

0.02

iShares plc Annual Report 393

As at 29 February 2012

Holding Investment

44,441 130,607 65,725 18,999 55,186 134,025 9,976 11,738 34,812 133,032 7,372 6,179 54,452 28,825 171,277 32,563 148,852 9,129 21,559

11,334 11,927 46,873 9,490

14,460 65,196 26,755 5,083

96,282 8,840 512,632

46,037

United States (cont) Integrated oil & gas (cont) Hess Corp Com USD 1.00 Marathon Oil Corp Com USD 1.00 Marathon Petroleum Corp Com NPV Rowan Cos Inc Com USD 0.125 Internet Amazon.com Inc Com USD 0.01 eBay Inc Com USD 0.001 Expedia Inc Com USD 0.001 F5 Networks Inc Com NPV Google Inc Com USD 0.001 Liberty Interactive Corp Com USD 0.01 Netflix Inc Com USD 0.001 priceline.com Inc Com USD 0.008 Symantec Corp Com USD 0.01 VeriSign Inc Com USD 0.001 Yahoo! Inc Com USD 0.001 Investment services Ameriprise Financial Inc Com USD 0.01 Charles Schwab Corp Com USD 0.01 CME Group Inc Com USD 0.01 IntercontinentalExchange Inc Com USD 0.01 Iron & steel Allegheny Technologies Inc Com USD 0.10 Cliffs Natural Resources Inc Com USD 0.13 Nucor Corp Com USD 0.40 United States Steel Corp Com USD 1.00 Machinery — diversified Cummins Inc Com USD 2.50 Deere & Co Com USD 1.00 Rockwell Automation Inc Com USD 1.00 Roper Industries Inc Com USD 0.01 Machinery, construction & mining Caterpillar Inc Com USD 1.00 Joy Global Inc Com USD 1.00 Media Sirius XM Radio Inc Com USD 0.001 Media agencies Interpublic Group of Cos Inc Com USD 0.10

394 iShares plc Annual Report

Fair value $'000

% of net asset value

2,886 4,428

0.08 0.12

2,731 700

0.08 0.02

9,910 4,790 339 1,467 21,509

0.28 0.14 0.01 0.04 0.61

2,496 816 3,873 971 1,065 2,538

0.07 0.02 0.11 0.03 0.03 0.07

1,816

0.05

2,067 2,643

0.06 0.08

Holding Investment

63,462 32,384 63,022

55,941 10,284 116,002 92,915 11,656 131,380 8,903 111,242 11,862 10,398 20,224 55,811

2,974

0.08 36,812

497

0.01

757 2,039

0.02 0.06

258

0.01

1,744 5,403

0.05 0.15

2,140

0.06

467

0.02

10,992 768

0.31 0.02

16,350 387,087 97,606 333,473 80,962 63,534 23,840 98,701 5,510 12,565 55,375

1,153

0.03

540

0.01

65,211 37,761 11,104

United States (cont) Media agencies (cont) Omnicom Group Inc Com USD 0.15 Medical equipment CareFusion Corp Com USD 0.01 Zimmer Holdings Inc Com USD 0.01 Medical supplies Hologic Inc Com USD 0.01 Metal prod ducts Precision Castparts Corp Com NPV Mining Freeport-McMoRan Copper & Gold Inc Com USD 0.10 Newmont Mining Corp Com USD 1.60 Vulcan Materials Co Com USD 1.00 Miscellaneous manufacturers Danaher Corp Com USD 0.01 Dover Corp Com USD 1.00 Illinois Tool Works Inc Com USD 0.01 Leggett & Platt Inc Com USD 0.01 Pall Corp Com USD 0.10 Parker Hannifin Corp Com USD 0.50 Textron Inc Com USD 0.125 Mobile telecommunications MetroPCS Communications Inc Com USD 0.0001 NII Holdings Inc Com USD 0.001 Sprint Nextel Corp Com USD 2.00 Office & business equipment Pitney Bowes Inc Com USD 1.00 Xerox Corp Com USD 1.00 Oil & gas Anadarko Petroleum Corp Com USD 0.10 Apache Corp Com USD 0.63 Cabot Oil & Gas Corp Com USD 0.10 Chesapeake Energy Corp Com USD 0.01 Cimarex Energy Co Com USD 0.01 Concho Resources Inc Com USD 0.001 Denbury Resources Inc Com USD 0.001 Devon Energy Corp Com USD 0.10 EOG Resources Inc Com USD 0.01 EQT Corp Com NPV

Fair value $'000

% of net asset value

3,136

0.09

836

0.02

3,826

0.11

1,160

0.03

1,721

0.05

4,935

0.14

5,516 519

0.16 0.01

6,936 570

0.20 0.02

6,196 268 659

0.17 0.01 0.02

1,816 1,534

0.05 0.04

379 293 956

0.01 0.01 0.03

1,769 2,748

0.05 0.08

6,806 6,854

0.19 0.19

831

0.02

2,468 445

0.07 0.01

1,341

0.04

1,102 4,780 4,297 589

0.03 0.13 0.12 0.02

www.iShares.com

As at 29 February 2012

Holding Investment

5,789 10,116 123,945 7,079 13,192 13,700 17,171 37,506 8,944 68,109 8,479

85,176 28,234 30,557 130,329 52,845

11,903 6,847 131,398 76,398 16,560

225,954 68,616 270,889 64,818 130,938 64,983 392,912 63,178 15,849 70,335 437,702 www.iShares.com

United States (cont) Oil & gas (cont) Newfield Exploration Co Com USD 0.01 Noble Energy Inc Com USD 3.33 Occidental Petroleum Corp Com USD 0.20 Pioneer Natural Resources Co Com USD 0.01 Plains Exploration & Production Co Com USD 0.01 QEP Resources Inc Com USD 0.01 Range Resources Corp Com USD 0.01 Southwestern Energy Co Com USD 0.01 Sunoco Inc Com USD 1.00 Valero Energy Corp Com USD 0.01 Whiting Petroleum Corp Com USD 0.001 Oil & gas services Baker Hughes Inc Com USD 1.00 Cameron International Corp Com USD 0.01 FMC Technologies Inc Com USD 0.01 Halliburton Co Com USD 2.50 National Oilwell Varco Inc Com USD 0.01 Packaging & containers Crown Holdings Inc Com USD 5.00 Rock-Tenn Co Com USD 0.01 Personal products Avon Products Inc Com USD 0.25 Colgate-Palmolive Co Com USD 1.00 Estee Lauder Cos Inc Com USD 0.01 Pharmaceuticals Abbott Laboratories Com NPV Allergan Inc Com USD 0.01 Bristol-Myers Squibb Co Com USD 0.10 Cardinal Health Inc Com NPV Eli Lilly & Co Com NPV Express Scripts Inc Com USD 0.01 Johnson & Johnson Com USD 1.00 McKesson Corp Com USD 0.01 Mead Johnson Nutrition Co Com USD 0.01 Medco Health Solutions Inc Com USD 0.01 Merck & Co Inc Com USD 0.50

Fair value $'000

% of net asset value

208 988

0.01 0.03

12,939

0.37

775

0.02

581 468

0.02 0.01

1,093

0.03

1,240 346 1,668

0.04 0.01 0.05

497

0.01

Holding Investment

7,224 1,141,908 207,920 140,974 95,967 75,471 131,167 84,691 90,098

201,875 57,664 89,039

4,283

0.12

1,572

0.05

1,541 4,766

0.04 0.14

4,359

0.12

440 482

0.01 0.02

20,756

2,453

0.07

55,341 86,805 8,780

7,121

0.20

33,804 58,841 124,153 13,417

40,413 970

0.03

12,794 6,143

0.36 0.17

8,717 2,694 5,135 3,466 25,543 5,275

0.25 0.08 0.15 0.10 0.72 0.15

1,232 4,752 16,707

57,125 102,310 57,684 18,710 23,672 51,087 20,908 11,905

0.04

65,850

0.13 0.47

23,396

United States (cont) Pharmaceuticals (cont) Perrigo Co Com NPV Pfizer Inc Com USD 0.05 Pipelines El Paso Corp Com USD 3.00 Williams Cos Inc Com USD 1.00 Property & casualty insurance Allstate Corp Com USD 0.01 Chubb Corp Com USD 1.00 Progressive Corp Com USD 1.00 Travelers Cos Inc Com NPV Publishing McGraw-Hill Cos Inc Com USD 1.00 Railroads CSX Corp Com USD 1.00 Norfolk Southern Corp Com USD 1.00 Union Pacific Corp Com USD 2.50 Real estate CBRE Group Inc Com USD 0.01 Real estate investment trusts American Tower Corp Reits USD 0.01 Annaly Capital Management Inc Reits USD 0.01 AvalonBay Communities Inc Reits USD 0.01 Boston Properties Inc Reits USD 0.01 Duke Realty Corp Reits USD 0.01 Equity Residential Reits USD 0.01 Federal Realty Investment Trust Reits USD 0.01 General Growth Properties Inc Reits USD 0.01 HCP Inc Reits USD 1.00 Host Hotels & Resorts Inc Reits USD 0.01 Kimco Realty Corp Reits USD 0.01 Liberty Property Trust Reits USD 0.001 Macerich Co Reits USD 0.01 ProLogis Inc Reits USD 0.01 Public Storage Reits USD 0.10 Regency Centers Corp Reits USD 0.01 Simon Property Group Inc Reits USD 0.0001 Vornado Realty Trust Reits USD 0.04

Fair value $'000

% of net asset value

744 24,106

0.02 0.68

5,780 4,208

0.16 0.12

3,016 5,127 2,810 4,907

0.09 0.14 0.08 0.14

4,193

0.12

4,239

0.12

3,973 9,815

0.11 0.28

619

0.02

3,682

0.10

2,061

0.06

1,739

0.05

2,106 768 4,935

0.06 0.02 0.14

837

0.02

657 2,256

0.02 0.06

1,616 1,060

0.05 0.03

635 1,278 1,720 2,804

0.02 0.04 0.05 0.08

509

0.02

8,922

0.25

1,911

0.05

iShares plc Annual Report 395

As at 29 February 2012

Holding Investment

175,209 163,078 138,892 70,957 25,169 4,487 215,000 155,312 134,334 25,386 78,689 288,365 95,936 9,433 3,681 771,964 59,419 14,120 33,175 61,322 227,570 220,747 85,889 123,778 44,482 33,670 15,106 104,875 8,564 19,261 95,446 8,137 84,676 1,110,416 21,816

United States (cont) Real estate investment trusts (cont) Weyerhaeuser Co Reits USD 1.25 Restaurants & bars McDonald's Corp Com USD 0.01 Starbucks Corp Com USD 0.001 Yum! Brands Inc Com NPV Retail CarMax Inc Com USD 0.50 Chipotle Mexican Grill Inc Com USD 0.01 CVS Caremark Corp Com USD 0.01 Walgreen Co Com USD 0.08 Semiconductors Advanced Micro Devices Inc Com USD 0.01 Altera Corp Com USD 0.001 Analog Devices Inc Com USD 0.17 Applied Materials Inc Com USD 0.01 Broadcom Corp Com USD 0.0001 Cree Inc Com USD 0.00125 First Solar Inc Com USD 0.001 Intel Corp Com USD 0.001 LSI Corp Com USD 0.01 Maxim Integrated Products Inc Com USD 0.001 Micron Technology Inc Com USD 0.10 NVIDIA Corp Com USD 0.001 Qualcomm Inc Com USD 0.0001 Texas Instruments Inc Com USD 1.00 Xilinx Inc Com USD 0.01 Software Adobe Systems Inc Com USD 0.0001 Akamai Technologies Inc Com USD 0.01 Autodesk Inc Com USD 0.01 BMC Software Inc Com USD 0.01 CA Inc Com USD 0.10 Cerner Corp Com USD 0.01 Citrix Systems Inc Com USD 0.001 Electronic Arts Inc Com USD 0.01 Fiserv Inc Com USD 0.01 Intuit Inc Com USD 0.01 Microsoft Corp Com USD 0.00000625 Nuance Communications Inc Com USD 0.001

396 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

3,658

0.10

550,512 24,164 15,741

16,194 6,744 4,700

0.46 0.19 0.13

772

0.02

6,648

1,751

0.05

40,538

9,686 5,152

0.27 0.15

78,400

8,337

8,190 65,482

987 975 3,085

0.03 0.03 0.09

3,527 3,563 286 119 20,750 510

0.10 0.10 0.01 0.00 0.59 0.01

12,773 13,223 174,952 11,881

394

0.01

806,976 256,730 29,233

284 929 14,144

0.01 0.02 0.40

7,362 3,171

0.21 0.09

82,892 13,163

11,590 82,799 43,814 50,407

0.11

27,644

1,601 1,275 566 2,834 632 1,439 1,558 539 4,894

0.04 0.04 0.02 0.08 0.02 0.04 0.04 0.02 0.14

39,630

35,233

1.00

565

0.02

4,071

38,230

319,270 270,704

2,946

United States (cont) Software (cont) Oracle Corp Com USD 0.01 Red Hat Inc Com USD 0.0001 Salesforce.com Inc Com USD 0.001 VMware Inc Com USD 0.01 Specialty chemicals CF Industries Holdings Inc Com USD 0.01 Ecolab Inc Com USD 1.00 Specialty finance Moody's Corp Com USD 0.01 Specialty retailers Advance Auto Parts Inc Com USD 0.0001 Bed Bath & Beyond Inc Com USD 0.01 Best Buy Co Inc Com USD 0.10 Family Dollar Stores Inc Com USD 0.10 GameStop Corp Com USD 0.001 PetSmart Inc Com USD 0.0001 Staples Inc Com USD 0.0006 Tiffany & Co Com USD 0.01 Telecommunications Cisco Systems Inc Com USD 0.001 Corning Inc Com USD 0.50 Crown Castle International Corp Com USD 0.01 Harris Corp Com USD 1.00 Juniper Networks Inc Com USD 0.00001 Motorola Mobility Holdings Inc Com USD 0.01 Motorola Solutions Inc Com USD 0.01 SBA Communications Corp Com USD 0.01 Windstream Corp Com USD 0.0001 Texttile Mohawk Industries Inc Com USD 0.01 Tobacco Altria Group Inc Com USD 0.33 Philip Morris International Inc Com NPV Trucking JB Hunt Transport Services Inc Com USD 0.01 Total United States

Fair value $'000

% of net asset value

16,108 1,195

0.46 0.03

2,251 824

0.06 0.02

1,237 2,432

0.03 0.07

3,025

0.09

699

0.02

3,909 2,048

0.11 0.06

711 291 737 2,563 772

0.02 0.01 0.02 0.07 0.02

16,035 3,345

0.45 0.10

1,514 506

0.04 0.02

1,885

0.05

1,740

0.05

2,509

0.07

1,297

0.04

478

0.01

2,427

0.07

9,613

0.27

22,623

0.64

151 1,787,232

0.00 50.52

www.iShares.com

As at 29 February 2012

Holding Investment Total equities Exchange Traded Funds Ireland 24,945,068 iShares MSCI Japan** Total Ireland Total exchange traded funds

Fair value $'000

% of net asset value

3,281,752

92.76

252,340 252,340 252,340

7.13 7.13 7.13

Financiaal Derivative Instruments Futures contracts No. of contracts 59 S&P 500 E Mini Index Futures March 2012 Total unrealised gains on futures contracts

Unrealised % of net gain assets $'000 value 407

0.01

407

0.01

3,534,499

99.90

Bank overdraft†

(724)

(0.03)

Other net assets

3,992

0.12

3,537,767

99.99

Adjustment to align to the valuation methodology as set out in the prospectus

320

0.01

Net asset value attributable to redeemable participating shareholders at the end of the year

3,538,087

100.00

Total value of investmentss

Net assets attributable to redeemable participating shareholders

†

Substantially all cash positions are held with State Street Bank and Trust Company other than ($34,611) due as security to the counterparty for futures contracts. * Investments which are less than $500 are rounded to zero. ** Investments in related party.

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

www.iShares.com

Fair value $'000

% of total current assets

3,534,092

99.09

407 32,138 3,566,637

0.01 0.90 100.00

iShares plc Annual Report 397

For the year ended 29 February 2012 The 20 largest purchases

The 20 largest sales Holding Investments 3,473,888 iShares MSCI Japan 139,694 Exxon Mobil Corp Com NPV 54,856 International Business Machines Corp Com USD 0.20 21,057 Apple Inc Com NPV 284,057 Microsoft Corp Com NPV 107,152 Nestle SA Com CHF 0.10 87,268 Philip Morris International Inc Com NPV 55,995 Chevron Corp Com USD 0.75 238,177 Intel Corp Com NPV 78,023 Norfolk Southern Corp Com USD 1.00 64,371 Genzyme Corp Com NPV 57,689 Anadarko Petroleum Corp Com USD 0.10 98,420 Suncor Energy Inc Com NPV 80,193 Danaher Corp Com USD 0.01 94,917 BHP Billiton Ltd Com NPV 34,853 Novo Nordisk A/S Com DKK 1.00 62,018 Johnson & Johnson Com USD 1.00 72,569 Bed Bath & Beyond Inc Com USD 0.01 19,517 Amazon.com Inc Com USD 0.01 31,075 Franklin Resources Inc Com USD 0.10

Proceeds $‘000 34,184 11,021 9,347 7,826 7,151 6,388 6,091 5,597 5,286 5,139 4,891 4,493 4,208 4,115 4,065 4,027 4,005 3,971 3,931 3,891

Holding Investments 3,555,774 iShares MSCI Japan 101,868 Exxon Mobil Corp Com NPV 19,050 Apple Inc Com NPV 26,473 International Business Machines Corp Com USD 0.20 73,831 Nestle SA Com CHF 0.10 41,110 Chevron Corp Com USD 0.75 159,723 Microsoft Corp Com NPV 220,926 General Electric Co Com USD 0.06 125,542 AT&T Inc Com USD 1.00 56,061 Johnson & Johnson Com USD 1.00 55,712 Procter & Gamble Co Com USD 1.00 163,298 Pfizer Inc Com USD 0.05 44,917 Coca-Cola Co Com USD 0.25 356,162 Hsbc Holdings Plc Com USD 0.50 1,099,853 Vodafone Group Plc Com USD 0.11 629,482 Citigroup inc Com NPV 81,048 JPMorgan Chase & Co Com USD 1.00 4,968 Google Inc Com NPV 39,729 Philip Morris International Inc Com NPV 68,667 BHP Billiton Ltd Com NPV

Cost $‘000 34,502 8,106 7,464 4,780 4,376 4,256 4,222 3,805 3,689 3,637 3,579 3,256 3,079 3,063 2,999 2,943 2,933 2,931 2,848 2,767

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

398 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 Notes

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

Operating income

2

201,389

110,631

Net gains on financial assets at fair value through profit or loss

3

239,516

1,461,619

440,905

1,572,250

4

(37,288)

(21,052)

403,617

1,551,198

Total gains Operating expenses Net operating profit Finance costs: Distributions to redeemable participating shareholders

6

(132,372)

(73,661)

Interest expense

7

(8)

(9)

(132,380)

(73,670)

Net profit for the financial year/period before tax

271,237

1,477,528

Non-reclaimable withholding tax

(28,848)

(15,971)

242,389

1,461,557

3,799

(3,791)

246,188

1,457,766

Total finance costs

Net profit for the financial year/period after tax Adjustment to align to the valuation methodology as set out in the prospectus

8

Increase in net assets attributable to redeemable participating shareholders from operations

There are no recognised gains or losses arising in the year/period other than those dealt with in the income statement. In arriving at the results of the financial period, all amounts relate to continuing operations.

For the year 29 February 2012

Net assets attributable to redeemable participating shareholders at the beginning of the year/period Increase in net assets attributable to redeemable participating shareholders from operations

Year ended 29 February 2012 $’000

Period ended 28 February 2011* $’000

9,362,786

6,606,241

246,188

1,457,766

2,342,036

1,826,178

Share transactions: Proceeds from issue of redeemable participating shares Payments on redemption of redeemable participating shares Increase in net assets resulting from share transactions Net assets attributable to redeemable participating shareholders at the end of the year/period

(1,848,166)

(527,399)

493,870

1,298,779

10,102,844

9,362,786

* For the period from 12 June 2010 to 28 February 2011. The accompanying notes form an integral part of these financial statements.

www.iShares.com

iShares plc Annual Report 399

As at 29 February 2012 Notes

29 February 2012 $’000

28 February 2011 $’000

6,638

52,579

958

1,492

CURRENT ASSETS Cash and cash equivalents Margin cash account Receivables

11

159,418

73,950

Financial assets at fair value through profit or loss

12

10,075,807

9,351,996

10,242,821

9,480,017

Total current assets CURRENT LIABILITIES Payables

13

(104,137)

(83,041)

Distributions to redeemable participating shareholders payable

6

(37,926)

(32,477)

(142,063)

(115,518)

10,100,758

9,364,499

2,086

(1,713)

10,102,844

9,362,786

Total current liabilities Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year/period

8

The accompanying notes form an integral part of these financial statements. Details of the NAV per share are set out in note 10.

400 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 1.

ACCOUNTING POLICIES, FINANCIAL INSTRUMENTS AND RISKS, SOFT COMMISSIONS, EXCHANGE RATES AND TAX

The accounting policies are set out on pages 28 to 31. The financial instruments and risks are set out on pages 32 to 60. The notes relating to tax, exchange rates and soft commissions are set out in the notes on pages 63 to 68. 2.

OPERATING INCOME

Deposit interest income Dividend income Securities lending income

3.

Year ended 29 February 2012 $’000 39 200,702 648 201,389

NET GAINS ON FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 29 February 2012 $’000

Net gains on investments in securities held at fair value through profit or loss Net (losses)/gains on futures contracts

4.

Period from 12 June 2010 to 28 February 2011 $’000

240,416

1,458,972

(900) 239,516

2,647 1,461,619

Year ended 29 February 2012 $’000 (37,288) (37,288)

Period from 12 June 2010 to 28 February 2011 $’000 (21,052) (21,052)

OPERATING EXPENSES

Management fees

5.

Period from 12 June 2010 to 28 February 2011 $’000 16 110,206 409 110,631

MANAGEMENT FEES

The Manager is responsible for discharging, from this fee, all fees of the Investment Manager, the Administrator and the Custodian and any distributing agent appointed by the distributor through whom the shares will be marketed, together with all reasonable out of pocket expenses of such service providers, (including sub-custodial fees and expenses, (which will be at normal commercial rates) and transaction related charges of the Administrator and Custodian). The Manager will also be responsible for discharging from its fee for each share class an attributable proportion of the organisational and operating expenses, including audit and Directors fees, of the Company. The fee will be accrued daily based on the daily net asset value of the share classes and will be paid monthly in arrears. Where the actual fees and costs incurred exceed the amount paid to the Manager, the excess will be discharged by the Manager from its own assets. 6.

DISTRIBUTIONS TO REDEEMABLE PARTICIPATING SHAREHOLDERS

The Company may declare and pay distributions to Redeemable Participating Shareholders on any distributing class of Shares in the Company. The Company intends to declare distributions to redeemable participating shareholders on the shares of each Fund, in respect of each financial period, which are generally equal to the total income of the Fund net of expenses for that financial period. Distributions declared during the year/period were as follows:

August 2010 November 2010 February 2011 May 2011 August 2011 November 2011 February 2012 Equalisation income Equalisation expense

7.

Period from 12 June 2010 to 28 February 2011 $’000 25,599 19,594 32,477 77,670 (5,525) 1,516 73,661

Year ended 29 February 2012 $’000 (8) (8)

Period from 12 June 2010 to 28 February 2011 $’000 (9) (9)

INTEREST EXPENSE

Fees earned by the Manager during the year/period and balances outstanding as at 29 February 2012 and 28 February 2011 are disclosed in note 4 and note 13 respectively. Please refer to page 63 for each Fund’s management fee rate. Bank interest

www.iShares.com

Year ended 29 February 2012 $’000 30,805 33,499 31,643 37,926 133,873 (6,643) 5,142 132,372

iShares plc Annual Report 401

For the year ended 29 February 2012 8.

ADJUSTMENT TO ALIGN TO THE VALUATION METHODOLOGY AS SET OUT IN THE PROSPECTUS

The adjustment between the financial statements net asset value and the valuation methodology set out in the prospectus is shown below:

Balance brought forward Adjustment to align to the valuation methodology as set out in the prospectus Total adjustment for the year/period Balance carried forward

Period from Year ended 12 June 2010 29 February to 28 February 2012 2011 $’000 $’000 (1,713) 2,078

3,799

(3,791)

3,799 2,086

(3,791) (1,713)

Further details are set out in the accounting policies note k) on page 30. 9.

SHARE CAPITAL

29 February 2012 No. of Shares

28 February 2011 No. of Shares

708,250,000 182,200,000 (147,650,000) 742,800,000

607,000,000 147,750,000 (46,500,000) 708,250,000

10. NET ASSETS ATTRIBUTABLE TO REDEEMABLE PARTICIPATING SHAREHOLDERS No. of Shares Shares in issue As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

742,800,000 708,250,000 607,000,000 $’000

Net asset value As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

$13.60 $13.22 $10.88

11. RECEIVABLES

Sale of securities awaiting settlement Subscription for shares awaiting settlement Dividend income receivable Securities lending income receivable Distributions payable held with Registrar*

29 February 2012 $’000

28 February 2011 $’000

100,494

5,615

20,880

52,030 16,276

118

29

37,926 159,418

73,950

* Further details are set out on note 11 page 65.

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 are classified as financial liabilities. Number of redeemable participating shares: Balance at the beginning of year/period Issued during year/period Redeemed during year/period Balance at the end of year/period

Net asset value per share As at 29 February 2012 As at 28 February 2011 As at 11 June 2010

10,102,844 9,362,786 6,606,241

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets: Investment in equities Unrealised gains on futures contracts

29 February 2012 $’000 10,075,177

28 February 2011 $’000 9,351,917

630 10,075,807

79 9,351,996

29 February 2012 $’000

28 February 2011 $’000

-

(80,222)

(100,941) (3,196) (104,137)

(2,819) (83,041)

13. PAYABLES

Purchase of securities awaiting settlement Redemption of shares awaiting settlement Management fees payable

14. COMMITMENTS AND CONTINGENT LIABILITIES There were no significant commitments or contingent liabilities at the year ended 29 February 2012 and period ended 28 February 2011 other than those disclosed in the financial statements. 15. RELATED PARTIES The related parties are set out on pages 66 and 67.

402 iShares plc Annual Report

www.iShares.com

For the year ended 29 February 2012 16. SECURITIES LENDING During the year/period the Company engaged in securities lending, subject to the conditions and within the limits from time to time laid down by the Central Bank of Ireland and the prospectus. The Company receives cash collateral or securities, for a value in excess of the market value of the securities loaned. The collateral is registered and held in the name of State Street Custodial Services (Ireland) Limited on behalf of the Funds in any or all of the following collateral agents and central securities depositaries: JPMorgan Chase, Bank of New York, Euroclear or CREST, depending on the type of collateral the counterparty has to give in order to cover the required value of exposure. The Investment Manager monitors the fair value of the securities loaned and additional collateral is obtained, if necessary. The securities lending agent appointed pursuant to the stock lending agreement is BlackRock Advisors (UK) Limited. Securities lending income was split equally between the securities lending agent and the Fund until 31 October 2010. With effect from 1 November 2010 the ratio changed to 60:40 in favour of the Fund.

Income earned during the year/period* Value of securities on loan at year/period end Value of collateral held by the Company at year/period end

29 February 2012 $’000

28 February 2011 $’000

648

409

2,229,396

17,239

2,453,994

18,973

* Periods from 1 March 2011 to 29 February 2012 and 12 June 2010 to 28 February 2011 respectively.

17. SIGNIFICANT EVENTS DURING THE YEAR Please refer to note 19 on page 67. 18. SUBSEQUENT EVENTS Please refer to note 20 on pages 67 and 68.

www.iShares.com

iShares plc Annual Report 403

As at 29 February 2012

Holding Investment

Fair value $'000

% of net asset value

Holding Investment

Transferable Securities Admitted to an Official Stock Exchange Listing or traded on a Regulated Market Equities Bermuda Diversified financial services 365,798 Invesco Ltd Com USD 0.20 Oil & gas 233,222 Nabors Industries Ltd Com USD 0.001 Total Bermuda Curacao Oil & gas services 1,091,744 Schlumberger Ltd Com USD 0.01 Total curacao

521,888

399,164 266,344 133,783 253,239

Ireland Computers Accenture Plc Com USD 0.0000225 Health care services Covidien Plc Com USD 0.20 Insurance XL Group Plc Com USD 0.01 Miscellaneous manufacturers Cooper Industries Plc Com USD 0.01 Ingersoll-Rand Plc Com USD 1.00 Total Ireland

Panama Leisure time 373,494 Carnival Corp Com USD 0.01 Total Panama

349,910 375,636

204,484 273,418

Switzerland Electronic equipment TE Connectivity Ltd Com CHF 1.37 Tyco International Ltd Com CHF 6.70 Oil & gas Noble Corp Com CHF 3.28 Property & casuaalty insurance ACE Ltd Com CHF 30.57 Total Switzerland

United States Aerospace 605,888 Boeing Co Com USD 5.00 404 iShares plc Annual Report

101,004 124,659 738,662 9,060

0.09 546,506

5,075 14,135

0.05 0.14

645,837

70,531 84,741 84,741

0.84 0.84

31,063

0.31

20,852

0.21

5,535

0.05

8,185 10,099 75,734

0.08 0.10 0.75

237,898 281,455 206,621 203,551 302,369 132,809 52,512 183,872 620,288 69,943 295,212 89,441 198,241 549,735

11,302 11,302

0.11 0.11

103,954

3,097,902 190,353 12,793

0.13

8,262,913

19,469

0.19

997,275

8,212

0.08

563,188 371,471

19,607 60,081

0.19 0.59

45,393

0.45

2,383,463 163,033 746,199 213,855

United States (cont) Aerospace (cont) Goodrich Corp Com USD 5.00 Rockwell Collins Inc Com USD 0.01 United Technologies Corp Com USD 1.00 Agriculture Archer-Daniels-Midland Co Com NPV Airlines Southwest Airlines Co Com USD 1.00 Apparel retailers Abercrombie & Fitch Co Com USD 0.01 Coach Inc Com USD 0.01 Gap Inc Com USD 0.05 Kohl's Corp Com USD 0.01 Limited Brands Inc Com USD 0.50 NIKE Inc Com NPV Nordstrom Inc Com NPV Ralph Lauren Corp Com USD 0.01 Ross Stores Inc Com USD 0.01 TJX Cos Inc Com USD 1.00 VF Corp Com NPV Auto manufacturers PACCAR Inc Com USD 1.00 Auto parts & equipment BorgWarner Inc Com USD 0.01 Goodyear Tire & Rubber Co Com NPV Johnson Controls Inc Com USD 0.01388 O'Reilly Automotive Inc Com USD 0.01 Automobiles Ford Motor Co Com USD 0.01 Harley-Davidson Inc Com USD 0.01 Banks Bank of America Corp Com USD 0.01 Bank of New York Mellon Corp Com USD 0.01 BB&T Corp Com USD 5.00 Capital One Financial Corp Com USD 0.01 Citigroup Inc Com USD 0.01 Comerica Inc Com USD 5.00 Fifth Third Bancorp Com NPV First Horizon National Corp Com USD 0.625

Fair value $'000

% of net asset value

12,720 7,390

0.13 0.07

61,952

0.61

17,051

0.17

5,793

0.06

3,230 17,804 6,575 10,265 9,473 32,638 7,122 9,123 9,806 22,709 10,220

0.03 0.18 0.07 0.10 0.09 0.32 0.07 0.09 0.10 0.23 0.10

13,583

0.13

7,405

0.07

2,547

0.03

17,938

0.18

8,992

0.09

38,321 8,865

0.38 0.09

65,855

0.65

22,050 16,473

0.22 0.16

18,800 79,346 4,841 10,148

0.19 0.78 0.05 0.10

2,008

0.02

www.iShares.com

As at 29 February 2012

Holding Investment

401,337 427,473 701,326 3,097,588 773,005 101,824 1,200,615 195,331 305,613 425,917 1,019,291 435,554 1,555,012 4,299,087 149,169 125,310 81,175 1,851,573 258,759 141,227 174,609 131,891 1,274,505 646,658 198,012 361,875 612,346 146,400

182,536 541,393 2,225,953 575,207 www.iShares.com

United States (cont) Banks (cont) Goldman Sachs Group Inc Com USD 0.01 Hudson City Bancorp Inc Com USD 0.01 Huntington Bancshares Inc Com USD 0.01 JPMorgan Chase & Co Com USD 1.00 KeyCorp Com USD 1.00 M&T Bank Corp Com USD 0.50 Morgan Stanley Com USD 0.01 Northern Trust Corp Com USD 1.67 People's United Financial Inc Com USD 0.01 PNC Financial Services Group Inc Com USD 5.00 Regions Financial Corp Com USD 0.01 SunTrust Banks Inc Com USD 1.00 US Bancorp Com USD 0.01 Wells Fargo & Co Com USD 1.67 Zions Bancorporation Com NPV Beverages Beam Inc Com USD 3.13 Brown-Forman Corp Com USD 0.15 Coca-Cola Co Com USD 0.25 Coca-Cola Enterprises Inc Com USD 1.00 Constellation Brands Inc Com USD 0.01 Dr Pepper Snapple Group Inc Com USD 0.01 Molson Coors Brewing Co Com USD 0.01 PepsiCo Inc Com USD 0.02 Biotechnology Amgen Inc Com USD 0.0001 Biogen Idec Inc Com USD 0.0005 Celgene Corp Com USD 0.01 Gilead Sciences Inc Com USD 0.001 Life Technologies Corp Com USD 0.01 Broadcasting & entertainment Cablevision Systems Corp Com USD 0.01 CBS Corp Com USD 0.001 Comcast Corp Com USD 1.00 DirecTV Com USD 0.01

Fair value $'000

46,226

% of net asset value

0.46

Holding Investment

222,048 1,787,703 80,045

2,924

0.03

4,096

0.04

262,934

121,580 6,261 8,312 22,247

1.20 0.06 0.08 0.22

815,952 450,160 1,464,547

8,671

0.09

53,181 354,415

3,848

0.04

25,351

0.25

5,871 10,005 45,717 134,518 2,834

0.06 0.10 0.45 1.33 0.03

6,902

0.07

6,628 129,240

0.06 1.28

7,478

0.07

3,083

0.03

6,644

0.07

97,024 115,946 344,886 31,476 546,640 90,124 1,423,007 290,348 150,599 152,351 224,072 172,233

5,796 80,154

0.06 0.79

43,940 23,062 26,533

0.43 0.23 0.26

27,856

0.28

6,926

0.07

2,597 16,188 65,398 26,644

0.03 0.16 0.65 0.26

55,221 963,430 113,780 755,187 436,499 241,009 244,623 70,965

183,410 182,573 219,707

United States (cont) Broadcasting & entertainment (cont) Discovery Communications Inc Com USD 0.01 News Corp Com USD 0.01 Scripps Networks Interactive Inc Com USD 0.01 Time Warner Cable Inc Com USD 0.01 Time Warner Inc Com USD 0.01 Viacom Inc Com USD 0.001 Walt Disney Co Com USD 0.01 Broadline retailers Big Lots Inc Com USD 0.01 Costco Wholesale Corp Com USD 0.005 Dollar Tree Inc Com USD 0.01 JC Penney Co Inc Com USD 0.50 Macy's Inc Com USD 0.01 Sears Holdings Corp Com USD 0.01 Target Corp Com USD 0.0833 Urban Outfitters Inc Com USD 0.0001 Wal-Mart Stores Inc Com USD 0.10 Building materials and fixtures Masco Corp Com USD 1.00 Business support services Iron Mountain Inc Com USD 0.01 RR Donnelley & Sons Co Com USD 1.25 SAIC Inc Com USD 0.0001 Chemicals Air Products & Chemicals Inc Com USD 1.00 Airgas Inc Com USD 0.01 Dow Chemical Co Com USD 2.50 Eastman Chemical Co Com USD 0.01 EI du Pont de Nemours & Co Com USD 0.30 Monsanto Co Com USD 0.01 Mosaic Co Com USD 0.01 Praxair Inc Com USD 0.01 Sherwin-Williams Co Com USD 1.00 Coal Alpha Natural Resources Inc Com USD 0.01 Consol Energy Inc Com USD 0.01 Peabody Energy Corp Com USD 0.01

Fair value $'000

% of net asset value

10,356 35,504

0.10 0.35

3,618

0.04

20,864 30,362 21,437 61,496

0.21 0.30 0.21 0.61

2,331

0.02

30,505 8,588 4,591 13,095

0.30 0.08 0.05 0.13

2,191 30,934

0.02 0.31

2,558 84,157

0.03 0.83

3,449

0.03

4,666

0.04

2,105 2,738

0.02 0.03

15,539 4,545 32,285

0.15 0.05 0.32

6,155

0.06

38,394 33,776 13,911 26,666

0.38 0.34 0.14 0.26

7,329

0.07

3,402 6,538

0.03 0.06

7,655

0.08

iShares plc Annual Report 405

As at 29 February 2012

Holding Investment

94,280 396,229 49,961 247,697 261,158 172,174 115,875 132,853

757,667 245,569 125,781 1,254,677 1,672,049 1,619,797 960,842 58,259 297,494 194,072 136,532 189,178

823,776 448,091 86,889 417,222 414,210 509,221 132,681 83,887 132,911 156,536 2,242,921

292,701

United States (cont) Commercial services Apollo Group Inc Com NPV Automatic Data Processing Inc Com USD 0.10 DeVry Inc Com USD 0.01 H&R Block Inc Com NPV Paychex Inc Com USD 0.01 Quanta Services Inc Com USD 0.00001 Robert Half International Inc Com USD 0.001 Total System Services Inc Com USD 0.10 Computers Apple Inc Com NPV Cognizant Technology Solutions Corp Com USD 0.01 Computer Sciences Corp Com USD 1.00 Dell Inc Com USD 0.01 EMC Corp Com USD 0.01 Hewlett-Packard Co Com USD 0.01 International Business Machines Corp Com USD 0.20 Lexmark International Inc Com USD 0.01 NetApp Inc Com USD 0.001 SanDisk Corp Com USD 0.001 Teradata Corp Com USD 0.01 Western Digital Corp Com USD 0.01 Consumer finance American Express Co Com USD 0.20 Discover Financial Services Com USD 0.01 Mastercard Inc Com USD 0.0001 SLM Corp Com USD 0.20 Visa Inc Com USD 0.0001 Western Union Co Com USD 0.01 Containers & packaging Ball Corp Com NPV Bemis Co Inc Com USD 0.10 Owens-Illinois Inc Com USD 0.01 Sealed Air Corp Com USD 0.10 Cosmetics & personal care Procter & Gamble Co Com USD 1.00 Defence General Dynamics Corp Com USD 1.00

406 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

4,019

0.04

81,020

21,519 1,775 4,038 8,174

0.21 0.02 0.04 0.08

216,286

3,600

0.04

3,295

0.03

2,904

0.03

410,330

4.06

17,423

0.17

3,995 21,693 46,299 41,013

0.04 0.21 0.46 0.41

189,036

1.87

2,148 12,789 9,601 9,086

0.02 0.13 0.10 0.09

7,425

0.07

43,545

0.43

13,447 36,467 6,571 48,181 8,891

0.13 0.36 0.07 0.48 0.09

5,319 2,630 3,177 3,068

0.05 0.03 0.03 0.03

151,532

1.50

21,440

0.21

210,964 285,744 238,176 126,296 49,333 80,989 75,298 118,510 407,552 207,031

532,426 389,923 204,264 236,721 162,032 460,772 137,367 1,077,875 264,315 143,410 536,405 338,108 341,688 143,501 195,665 183,649 330,877 88,347 466,980 237,831 408,847 702,646 175,006 393,093

United States (cont) Defence (cont) L-3 Communications Holdings Inc Com USD 0.01 Lockheed Martin Corp Com USD 1.00 Northrop Grumman Corp Com USD 1.00 Raytheon Co Com USD 0.01 Distribution & wholesale Fastenal Co Com USD 0.01 Genuine Parts Co Com USD 1.00 WW Grainger Inc Com USD 0.50 Diversified financial services BlackRock Inc Com USD 0.01* Federated Investors Inc Com NPV Franklin Resources Inc Com USD 0.10 State Street Corp Com USD 1.00 T Rowe Price Group Inc Com USD 0.20 Electricity AES Corp Com USD 0.01 American Electric Power Co Inc Com USD 6.50 CMS Energy Corp Com USD 0.01 Consolidated Edison Inc Com USD 0.10 Constellation Energy Group Inc Com NPV Dominion Resources Inc Com NPV DTE Energy Co Com NPV Duke Energy Corp Com USD 0.001 Edison International Com NPV Entergy Corp Com USD 0.01 Exelon Corp Com NPV FirstEnergy Corp Com USD 0.10 NextEra Energy Inc Com USD 0.01 Northeast Utilities Com USD 5.00 NRG Energy Inc Com USD 0.01 Pepco Holdings Inc Com USD 0.01 PG&E Corp Com NPV Pinnacle West Capital Corp Com NPV PPL Corp Com USD 0.01 Progress Energy Inc Com NPV Public Service Enterprise Group Inc Com NPV Southern Co Com USD 5.00 TECO Energy Inc Com USD 1.00 Xcel Energy Inc Com USD 2.50

Fair value $'000

% of net asset value

5,692

0.06

19,124

0.19

12,618 14,438

0.13 0.14

12,540 7,919 10,236

0.12 0.08 0.10

16,117 1,543

0.16 0.01

13,964 17,211

0.14 0.17

12,749

0.13

7,209

0.07

14,657 4,373

0.15 0.04

13,749

0.14

5,874 23,260 7,418 22,549 11,067 9,557 20,957 14,975 20,337 5,152 3,346 3,570 13,797

0.06 0.23 0.07 0.22 0.11 0.09 0.21 0.15 0.20 0.05 0.03 0.04 0.14

4,155 13,328 12,629

0.04 0.13 0.13

12,588 31,050 3,140 10,405

0.12 0.31 0.03 0.10

www.iShares.com

As at 29 February 2012

Holding Investment

281,490 137,844 602,921 129,583 633,615 147,832 110,966 91,900 308,698 74,108 140,042 103,476

242,072

259,639 69,871 381,622

4,830,924 498,707 807,389

145,829 336,345 148,236 523,266 125,461 259,465 112,734 92,351 201,601 1,440,290 488,691 107,307 283,935 477,741 172,154 479,030 www.iShares.com

United States (cont) Electronics Agilent Technologies Inc Com USD 0.01 Amphenol Corp Com USD 0.001 Emerson Electric Co Com USD 0.50 FLIR Systems Inc Com USD 0.01 Honeywell International Inc Com USD 1.00 Jabil Circuit Inc Com USD 0.001 Molex Inc Com USD 0.05 PerkinElmer Inc Com USD 1.00 Thermo Fisher Scientific Inc Com USD 1.00 Waters Corp Com USD 0.01 Engineering & construction Fluor Corp Com USD 0.01 Jacobs Engineering Group Inc Com USD 1.00 Entertainment International Game Technology Com USD 0.00015625 Environmental control Republic Services Inc Com USD 0.01 Stericycle Inc Com USD 0.01 Waste Management Inc Com USD 0.01 Fixed line telecommunications AT&T Inc Com USD 1.00 CenturyLink Inc Com USD 1.00 Frontier Communications Corp Com USD 0.25 Food Campbell Soup Co Com USD 0.04 ConAgra Foods Inc Com USD 5.00 Dean Foods Co Com USD 0.01 General Mills Inc Com USD 0.10 Hershey Co Com USD 1.00 HJ Heinz Co Com USD 0.25 Hormel Foods Corp Com USD 0.06 JM Smucker Co Com NPV Kellogg Co Com USD 0.25 Kraft Foods Inc Com NPV Kroger Co Com USD 1.00 McCormick & Co Inc Com NPV Safeway Inc Com USD 0.01 Sara Lee Corp Com USD 0.01 Supervalu Inc Com USD 1.00 Sysco Corp Com USD 1.00

Fair value $'000

% of net asset value

12,270 7,714

0.12 0.08

30,321 3,391

0.30 0.03

37,719 3,817 3,006 2,480

0.37 0.04 0.03 0.03

17,479 6,605

0.17 0.07

8,468

0.08

4,784

0.05

3,634

0.04

7,735 6,060

0.08 0.06

13,353

0.13

147,633 20,073

1.46 0.20

3,690

0.04

Holding Investment

240,503 127,933 352,709 138,474

92,071 345,474

227,651 83,324 525,807

136,580

297,778 231,519 120,521 75,785 134,750 82,135 128,406 352,340 871,369

4,859 8,826 1,816 20,046 7,615 13,676 3,210 6,954 10,556 54,789 11,626 5,414 6,088 9,669 1,124 14,083

0.05 0.09 0.02 0.20 0.08 0.14 0.03 0.07 0.10 0.54 0.11 0.05 0.06 0.10 0.01 0.14

283,562 459,977 175,723 1,241,754 93,256 31,705 860,348 267,309 266,711

United States (cont) Food (cont) Tyson Foods Inc Com USD 0.10 Whole Foods Market Inc Com NPV Forest products & paper International Paper Co Com USD 1.00 MeadWestvaco Corp Com USD 0.01 Gas AGL Resources Inc Com USD 5.00 CenterPoint Energy Inc Com USD 0.01 Gas distribution NiSource Inc Com USD 0.01 Oneok Inc Com USD 0.01 Spectra Energy Corp Com USD 0.001 Hand & machine tools Stanley Black & Decker Inc Com USD 2.50 Health care providers Aetna Inc Com USD 0.01 Cigna Corp Com USD 0.25 Coventry Health Care Inc Com USD 0.01 DaVita Inc Com USD 0.001 Humana Inc Com USD 0.17 Laboratory Corp of America Holdings Com USD 0.10 Quest Diagnostics Inc Com USD 0.01 Tenet Healthcare Corp Com USD 0.05 UnitedHealth Group Inc Com USD 0.01 WellPoint Inc Com USD 0.01 Healthcare products Baxter International Inc Com USD 1.00 Becton Dickinson and Co Com USD 1.00 Boston Scientific Corp Com USD 0.01 Edwards Lifesciences Corp Com USD 1.00 Intuitive Surgical Inc Com USD 0.001 Medtronic Inc Com USD 0.10 St Jude Medical Inc Com USD 0.10 Stryker Corp Com USD 0.10

Fair value $'000

% of net asset value

4,548 10,327

0.04 0.10

12,398

0.12

4,193

0.04

3,668

0.03

6,733

0.07

5,459 6,885

0.06 0.07

16,505

0.16

10,483

0.10

13,924 10,210

0.14 0.10

3,940 6,555 11,743

0.04 0.07 0.12

7,382

0.07

7,456

0.07

1,991

0.02

48,579 18,602

0.48 0.18

26,739

0.27

13,395

0.13

7,724

0.08

6,817

0.07

16,221 32,762 11,254 14,306

0.16 0.32 0.11 0.14

iShares plc Annual Report 407

As at 29 February 2012

Holding Investment

160,719 2,307,964

225,602 130,454 273,329 47,209 56,592 61,808 1,256,710 1,020,460 216,336 155,892 123,807 64,440

236,408

321,307

858,008 67,820

377,768 354,344 263,738 76,636 1,433,201 397,319 358,320 250,142 437,693

United States (cont) Holding companies - diversified operations Leucadia National Corp Com USD 1.00 Verizon Communications Inc Com USD 0.10 Home construction DR Horton Inc Com USD 0.01 Lennar Corp Com USD 0.10 PulteGroup Inc Com USD 0.01 Snap-On Inc Com USD 1.00 Home furnishings Harman International Industries Inc Com USD 0.01 Whirlpool Corp Com USD 1.00 Home improvement retailers Home Depot Inc Com USD 0.05 Lowe's Cos Inc Com USD 0.50 Hotels Marriott International Inc Com USD 0.01 Starwood Hotels & Resorts Worldwide Inc Com USD 0.01 Wyndham Worldwide Corp Com USD 0.01 Wynn Resorts Ltd Com USD 0.01 Household goods & home construction Newell Rubbermaid Inc Com USD 1.00 Household products Kimberly-Clark Corp Com USD 1.25 Industrial metals & mining Alcoa Inc Com USD 1.00 Titanium Metals Corp Com USD 0.01 Insurance Aflac Inc Com USD 0.10 American International Group Inc Com USD 2.50 AON Corp Com USD 1.00 Assurant Inc Com USD 0.01 Berkshire Hathaway Inc Com USD 0.0033 Genworth Financial Inc Com USD 0.001 Hartford Financial Services Group Inc Com USD 0.01 Lincoln National Corp Com NPV Marsh & McLennan Cos Inc Com USD 1.00

408 iShares plc Annual Report

Fair value $'000

4,579

% of net asset value

0.05

87,979

0.87

3,230 3,049 2,408 2,886

0.03 0.03 0.02 0.03

2,782 4,671

0.03 0.04

59,782 28,950

0.59 0.29

7,632

0.08

8,401

0.08

5,446 7,639

0.05 0.08

4,326

0.04

23,417

0.23

8,726

0.09

994

0.01

17,850

0.18

10,343 12,346 3,255

0.10 0.12 0.03

112,478

1.11

3,612

0.04

7,424 6,214

0.07 0.06

13,660

0.14

Holding Investment

862,190 254,317 384,803 85,054 246,184 1,623,480 1,082,408 3,907,509 86,798 244,519 577,268 287,698 156,989 103,375 116,728 296,586 936,615 77,385 65,487 205,925 44,840 40,271 605,091 76,523 134,991 1,021,043 184,465 869,927 54,037 205,911 59,598 100,910 103,430 212,384 86,129

United States (cont) Insurance (cont) MetLife Inc Com USD 0.01 Principal Financial Group Inc Com USD 0.01 Prudential Financial Inc Com USD 0.01 Torchmark Corp Com USD 1.00 Unum Group Com USD 0.10 Integrated oil & gas Chevron Corp Com USD 0.75 ConocoPhillips Com USD 0.01 Exxon Mobil Corp Com NPV Helmerich & Payne Inc Com USD 0.10 Hess Corp Com USD 1.00 Marathon Oil Corp Com USD 1.00 Marathon Petroleum Corp Com USD 0.01 Murphy Oil Corp Com USD 1.00 Rowan Cos Inc Com USD 0.125 Tesoro Corp Com USD 0.17 Internet Amazon.com Inc Com USD 0.01 eBay Inc Com USD 0.001 Expedia Inc Com USD 0.001 F5 Networks Inc Com NPV Google Inc Com USD 0.001 Netflix Inc Com USD 0.001 priceline.com Inc Com USD 0.008 Symantec Corp Com USD 0.01 TripAdvisor Inc Com USD 0.001 VeriSign Inc Com USD 0.001 Yahoo! Inc Com USD 0.001 Investment services Ameriprise Financial Inc Com USD 0.01 Charles Schwab Corp Com USD 0.01 CME Group Inc Com USD 0.01 E*Trade Financial Corp Com USD 0.01 IntercontinentalExchange Inc Com USD 0.01 Legg Mason Inc Com USD 0.10 NASDAQ OMX Group Inc Com USD 0.01 NYSE Euronext Com USD 0.01 Iron & steel Allegheny Technologies Inc Com USD 0.10

Fair value $'000

% of net asset value

33,237

0.33

7,029

0.07

23,538 4,120 5,677

0.23 0.04 0.06

177,203 82,880 338,078

1.75 0.82 3.35

5,319 15,876 19,569

0.05 0.16 0.19

11,957 10,033 3,809 3,096

0.12 0.10 0.04 0.03

53,258 33,475 2,633 8,183 127,235 4,962 25,240 10,795 2,463 4,988 15,132

0.53 0.33 0.02 0.08 1.26 0.05 0.25 0.11 0.02 0.05 0.15

10,286

0.10

12,083 15,643

0.12 0.15

1,981

0.02

8,222 2,766

0.08 0.03

2,724 6,323

0.03 0.06

3,779

0.04

www.iShares.com

As at 29 February 2012

Holding Investment

118,456 255,400 116,818

157,364 335,143 45,248 115,476 77,811

527,138 85,261 150,794 388,256 225,501 181,288 70,293 114,655 75,923 95,103 145,350

116,527 772,747 403,401 104,833 574,511 460,528 150,772 275,676 8,606,577 397,516 114,860 94,338 www.iShares.com

United States (cont) Iron & steel (cont) Cliffs Natural Resources Inc Com USD 0.13 Nucor Corp Com USD 0.40 United States Steel Corp Com USD 1.00 Machinery — diversified Cummins Inc Com USD 2.50 Deere & Co Com USD 1.00 Flowserve Corp Com USD 1.25 Rockwell Automation Inc Com USD 1.00 Roper Industries Inc Com USD 0.01 Machinery, construction & mining Caterpillar Inc Com USD 1.00 Joy Global Inc Com USD 1.00 Xylem Inc Com USD 0.01 Media agencies Interpublic Group of Cos Inc Com USD 0.10 Omnicom Group Inc Com USD 0.15 Medical equipment CareFusion Corp Com USD 0.01 CR Bard Inc Com USD 0.25 Dentsply International Inc Com USD 0.01 Patterson Cos Inc Com USD 0.01 Varian Medical Systems Inc Com USD 1.00 Zimmer Holdings Inc Com USD 0.01 Metal products Precision Castparts Corp Com NPV Mining Freeport-McMoRan Copper & Gold Inc Com USD 0.10 Newmont Mining Corp Com USD 1.60 Vulcan Materials Co Com USD 1.00 Miscellaneous manufacturers 3M Co Com USD 0.01 Danaher Corp Com USD 0.01 Dover Corp Com USD 1.00 Eaton Corp Com USD 0.50 General Electric Co Com USD 0.06 Illinois Tool Works Inc Com USD 0.01 Leggett & Platt Inc Com USD 0.01 Pall Corp Com USD 0.10

Fair value $'000

% of net asset value

Holding Investment

125,159 7,514 11,110

0.07 0.11

224,985

3,177

0.03

237,852

18,975 27,777 5,334

0.19 0.28 0.05

9,234

0.09

7,148

0.07

60,178 7,411 3,909

0.60 0.07 0.04

4,551 11,144

0.05 0.11

4,679 6,579

0.05 0.07

4,433 2,422

0.04 0.02

533,965

6,204

0.06

326,406

8,824

0.09

329,284 56,424

19,502

0.19

2,429,216 196,050 63,210 93,153 194,159 188,259

105,844 163,988 1,132,033 405,938 313,074 171,560

32,873

0.32

217,397 121,173 107,313

23,950 4,671

0.24 0.05

142,528 661,772

50,310 24,311 9,648 14,388 163,955

0.50 0.24 0.10 0.14 1.62

99,774 143,563 130,660

22,142 2,598 5,975

0.22 0.03 0.06

87,582 464,141 155,020

280,935

United States (cont) Miscellaneous manuffacturers (cont) Parker Hannifin Corp Com USD 0.50 Textron Inc Com USD 0.125 Mobile telecommunications MetroPCS Communications Inc Com USD 0.0001 Sprint Nextel Corp Com USD 2.00 Multiutilities Ameren Corp Com USD 0.01 Integrys Energy Group Inc Com USD 1.00 Scana Corp Com NPV Sempra Energy Com NPV Wisconsin Energy Corp Com USD 0.01 Nondurable household products Clorox Co Com USD 1.00 Office & business equipment Pitney Bowes Inc Com USD 1.00 Xerox Corp Com USD 1.00 Oil & gas Anadarko Petroleum Corp Com USD 0.10 Apache Corp Com USD 0.63 Cabot Oil & Gas Corp Com USD 0.10 Chesapeake Energy Corp Com USD 0.01 Denbury Resources Inc Com USD 0.001 Devon Energy Corp Com USD 0.10 Diamond Offshore Drilling Inc Com USD 0.01 EOG Resources Inc Com USD 0.01 EQT Corp Com NPV Newfield Exploration Co Com USD 0.01 Noble Energy Inc Com USD 3.33 Occidental Petroleum Corp Com USD 0.20 Pioneer Natural Resources Co Com USD 0.01 QEP Resources Inc Com USD 0.01 Range Resources Corp Com USD 0.01 Southwestern Energy Co Com USD 0.01 Sunoco Inc Com USD 1.00 Valero Energy Corp Com USD 0.01 WPX Energy Inc Com USD 1.00

Fair value $'000

% of net asset value

11,240 6,185

0.11 0.06

2,450 6,000

0.02 0.06

6,287

0.06

3,289 4,192 11,504

0.03 0.04 0.12

6,416

0.06

7,157

0.07

2,973 9,328

0.03 0.09

34,127 33,774

0.34 0.34

5,977

0.06

13,349

0.13

6,499 24,136

0.06 0.24

3,862 24,738 6,426

0.04 0.25 0.06

3,861 13,924

0.04 0.14

69,082

0.68

10,919 4,900

0.11 0.05

8,318

0.08

9,291 3,385 11,367 2,818

0.09 0.03 0.11 0.03

iShares plc Annual Report 409

As at 29 February 2012

Holding Investment

352,890 198,817 193,873 744,512 342,966

349,423 393,906 182,569

1,269,941 248,853 210,621 1,380,957 278,355 830,585 394,857 221,024 133,750 2,226,245 199,171 165,406 315,614 2,484,709 345,804 75,947 6,266,552 101,997

622,861 465,059 419,096 226,686 132,352 252,162 502,723 338,779

United States (cont) Oill & gas services Baker Hughes Inc Com USD 1.00 Cameron International Corp Com USD 0.01 FMC Technologies Inc Com USD 0.01 Halliburton Co Com USD 2.50 National Oilwell Varco Inc Com USD 0.01 Personal products Avon Products Inc Com USD 0.25 Colgate-Palmolive Co Com USD 1.00 Estee Lauder Cos Inc Com USD 0.01 Pharmaceuticals Abbott Laboratories Com NPV Allergan Inc Com USD 0.01 AmerisourceBergen Corp Com USD 0.01 Bristol-Myers Squibb Co Com USD 0.10 Cardinal Health Inc Com NPV Eli Lilly & Co Com NPV Express Scripts Inc Com USD 0.01 Forest Laboratories Inc Com USD 0.10 Hospira Inc Com USD 0.01 Johnson & Johnson Com USD 1.00 McKesson Corp Com USD 0.01 Mead Johnson Nutrition Co Com USD 0.01 Medco Health Solutions Inc Com USD 0.01 Merck & Co Inc Com USD 0.50 Mylan Inc Com USD 0.50 Perrigo Co Com NPV Pfizer Inc Com USD 0.05 Watson Pharmaceuticals Inc Com USD 0.003 Pipelines El Paso Corp Com USD 3.00 Williams Cos Inc Com USD 1.00 Property & casualty insurance Allstate Corp Com USD 0.01 Chubb Corp Com USD 1.00 Cincinnati Financial Corp Com USD 2.00 Loews Corp Com USD 0.01 Progressive Corp Com USD 1.00 Travelers Cos Inc Com NPV

410 iShares plc Annual Report

Fair value $'000

% of net asset value

Holding Investment

17,747

0.17

85,757

11,072

0.11

39,903

9,775 27,227

0.10 0.27

195,343 227,386

28,288

0.28

4,052

6,524

0.06

36,716

0.36

10,687

0.11

395,184

71,904 22,280

0.71 0.22

263,736

7,869

0.08

44,439 11,568 32,576 21,058

0.44 0.11 0.32 0.21

7,190 4,763 144,728 16,629

0.07 0.05 1.43 0.16

12,860

0.13

21,323 94,841 8,109 7,827 132,287

0.21 0.94 0.08 0.08 1.31

855,952 274,011

324,386 98,004 76,290 118,622 239,612 328,965 169,671 572,859 329,776 131,411 370,885 114,517 239,520

5,945

0.06

232,469 148,922

17,316 13,882

0.17 0.14

433,784

13,172 15,399

0.13 0.15

4,655 9,867 10,768 19,629

0.05 0.10 0.11 0.19

109,187 835,286 604,078 375,847 23,447 183,564

United States (cont) Publishing Avery Dennison Corp Com USD 1.00 Dun & Bradstreet Corp Com USD 0.01 Gannett Co Inc Com USD 1.00 McGraw-Hill Cos Inc Com USD 1.00 Washington Post Co Com USD 1.00 Railroads CSX Corp Com USD 1.00 Norfolk Southern Corp Com USD 1.00 Union Pacific Corp Com USD 2.50 Real estate CBRE Group Inc Com USD 0.01 Real estate investment trusts American Tower Corp Reits USD 0.01 Apartment Investment & Management Co Reits USD 0.01 AvalonBay Communities Inc Reits USD 0.01 Boston Properties Inc Reits USD 0.01 Equity Residential Reits USD 0.01 HCP Inc Reits USD 1.00 Health Care REIT Inc Reits USD 1.00 Host Hotels & Resorts Inc Reits USD 0.01 Kimco Realty Corp Reits USD 0.01 Plum Creek Timber Co Inc Reits USD 0.01 ProLogis Inc Reits USD 0.01 Public Storage Reits USD 0.10 Simon Property Group Inc Reits USD 0.0001 Ventas Inc Reits USD 0.25 Vornado Realty Trust Reits USD 0.04 Weyerhaeuser Co Reits USD 1.25 Restaurants & bars Darden Restaurants Inc Com NPV McDonald's Corp Com USD 0.01 Starbucks Corp Com USD 0.001 Yum! Brands Inc Com NPV Retail AutoZone Inc Com USD 0.01 CarMax Inc Com USD 0.50

Fair value $'000

% of net asset value

2,614

0.03

3,295 2,899

0.03 0.03

10,583

0.10

1,597

0.02

17,975

0.18

18,877 43,561

0.19 0.43

4,832

0.05

20,300

0.20

2,433

0.02

9,887

0.10

12,038 13,622 12,994

0.12 0.14 0.13

9,234

0.09

9,051 6,061

0.09 0.06

5,146 12,484 15,356

0.05 0.12 0.15

32,453 12,990

0.32 0.13

12,161 9,057

0.12 0.09

5,567 82,944 29,334 24,896

0.05 0.82 0.29 0.25

8,773 5,634

0.09 0.06

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As at 29 February 2012

Holding Investment

25,431 1,061,124 732,937 471,118 262,841 242,852 1,064,066 395,475 47,609 4,151,089 135,466 184,929 463,295 154,580 814,461 56,352 489,772 1,370,316 151,231 935,509 213,436 398,733 149,575 185,631 142,393 307,072 117,091 152,014 268,893 201,077 113,938 245,412 6,103,403 3,207,715 156,591 www.iShares.com

United States (cont) Retail (cont) Chipotle Mexican Grill Inc Com USD 0.01 CVS Caremark Corp Com USD 0.01 Walgreen Co Com USD 0.08 Semiconductors Advanced Micro Devices Inc Com USD 0.01 Altera Corp Com USD 0.001 Analog Devices Inc Com USD 0.17 Applied Materials Inc Com USD 0.01 Broadcom Corp Com USD 0.0001 First Solar Inc Com USD 0.001 Intel Corp Com USD 0.001 KLA-Tencor Corp Com USD 0.001 Linear Technology Corp Com USD 0.001 LSI Corp Com USD 0.01 Microchip Technology Inc Com USD 0.001 Micron Technology Inc Com USD 0.10 Novellus Systems Inc Com NPV NVIDIA Corp Com USD 0.001 Qualcomm Inc Com USD 0.0001 Teradyne Inc Com USD 0.13 Texas Instruments Inc Com USD 1.00 Xilinx Inc Com USD 0.01 Software Adobe Systems Inc Com USD 0.0001 Akamai Technologies Inc Com USD 0.01 Autodesk Inc Com USD 0.01 BMC Software Inc Com USD 0.01 CA Inc Com USD 0.10 Cerner Corp Com USD 0.01 Citrix Systems Inc Com USD 0.001 Electronic Arts Inc Com USD 0.01 Fidelity National Information Services Inc Com USD 0.01 Fiserv Inc Com USD 0.01 Intuit Inc Com USD 0.01 Microsoft Corp Com USD 0.00000625 Oracle Corp Com USD 0.01 Red Hat Inc Com USD 0.0001

Fair value $'000

% of net asset value

Holding Investment

109,409 9,925

0.10

47,804 24,311

0.47 0.24

3,463 10,096 9,522

0.03 0.10 0.09

13,013 14,688 1,535 111,581 6,554

0.13 0.15 0.02 1.10 0.07

6,186 3,980

0.06 0.04

5,572

0.06

6,964 2,619 7,420 85,165 2,482

0.07 0.03 0.07 0.84 0.02

31,199 7,880

0.31 0.08

53,034 242,850 58,132 65,607 127,186 99,035 99,301 163,269 40,209 197,664 243,817 97,549 112,830 572,085 103,252 4,382,504 1,271,134 97,521 185,019 431,975

13,114

0.13

5,383 7,028 5,331 8,297 8,645 11,359 4,388

0.05 0.07 0.05 0.08 0.09 0.11 0.04

6,374 7,552 14,185

0.06 0.08 0.14

193,661 93,858 7,742

1.92 0.93 0.08

213,311 231,235 467,065

90,474 1,676,940 111,749 1,415,999 273,034

98,108 276,338

United States (cont) Software (cont) Salesforce.com Inc Com USD 0.001 Specialty chemicals CF Industries Holdings Inc Com USD 0.01 Ecolab Inc Com USD 1.00 FMC Corp Com USD 0.10 International Flavors & Fragrances Inc Com USD 0.13 PPG Industries Inc Com USD 1.67 Sigma-Aldrich Corp Com USD 1.00 Specialty finance Equifax Inc Com USD 1.25 Moody's Corp Com USD 0.01 Specialty retailers AutoNation Inc Com USD 0.01 Bed Bath & Beyond Inc Com USD 0.01 Best Buy Co Inc Com USD 0.10 Family Dollar Stores Inc Com USD 0.10 GameStop Corp Com USD 0.001 Staples Inc Com USD 0.0006 Tiffany & Co Com USD 0.01 Telecommunications Cisco Systems Inc Com USD 0.001 Corning Inc Com USD 0.50 Harris Corp Com USD 1.00 JDS Uniphase Corp Com USD 0.001 Juniper Networks Inc Com USD 0.00001 Motorola Mobility Holdings Inc Com USD 0.01 Motorola Solutions Inc Com USD 0.01 Windstream Corp Com USD 0.0001 Textile Cintas Corp Com NPV Tobacco Altria Group Inc Com USD 0.33 Lorillard Inc Com USD 0.01 Philip Morris International Inc Com NPV Reynolds American Inc Com USD 0.0001 Toys Hasbro Inc Com USD 0.50 Mattel Inc Com USD 1.00

Fair value $'000

% of net asset value

15,644

0.16

9,866 14,574 5,750

0.10 0.14 0.06

3,740 11,599 7,105

0.04 0.11 0.07

4,176 6,300

0.04 0.06

1,370

0.01

11,801 6,022

0.12 0.06

5,267 2,570 8,381 6,711

0.05 0.03 0.08 0.07

87,080 16,563 4,255

0.86 0.17 0.04

2,411

0.02

9,832

0.10

8,471

0.08

11,511

0.11

5,637

0.06

3,489

0.03

50,493 14,648

0.50 0.15

118,335

1.17

11,440

0.11

3,463 8,965

0.03 0.09

iShares plc Annual Report 411

As at 29 February 2012

Holding Investment

133,782 171,007 256,567 41,516 786,683

United States (cont) Transportation CH Robinson Worldwide Inc Com USD 0.10 Expeditors International of Washington Inc Com USD 0.01 FedEx Corp Com USD 0.10 Ryder System Inc Com USD 0.50 United Parcel Service Inc Com USD 0.01 Total United States Total equities

Fair value $'000

% of net asset value

8,849

0.09

7,459 23,083 2,210

0.07 0.23 0.02

60,488 9,829,184

0.60 97.29

10,075,177

99.72

Analysis of total current assets and gross of all liabilities (unaudited) Transferable securities admitted to an official stock exchange listing or traded on a regulated market Exchange traded financial derivative instruments Other assets Total current assets

Fair value $'000

% of total current assets

10,075,177

98.36

630 167,014 10,242,821

0.01 1.63 100.00

Financial Derivative Instruments Futures contracts No. of contracts 348 S&P 500 E Mini Index Futures March 2012 Total unrealised gains on futures contraacts Total value of investments Cash† Other net assets Net assets attributable to redeemable participating shareholders Adjustment to align to the valuation methodology as set out in the prospectus Net asset value attributable to redeemable participating shareholders at the end of the year

Unrealised % of net gain asset $'000 value 630

0.01

630

0.01

10,075,807

99.73

7,596

0.08

17,355

0.17

10,100,758

99.98

2,086

0.02

10,102,844

100.00

†

Substantially all cash positions are held with State Street Bank and Trust Company other than $957,939 held as security by the counterparty for futures contracts. * Investment in related party.

412 iShares plc Annual Report

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For the year ended 29 February 2012 The 20 largest purchases

The 20 largest sales Holding 978,690 157,328 241,080 1,365,344 345,213 1,825,732 504,829 472,371 1,514,381 1,022,174 778,405 415,895 1,223,644 470,198 910,764 42,730 341,258 332,086 298,956 672,835

Investments Exxon Mobil Corp Com NPV Apple Inc Com NPV International Business Machines Corp Com USD 0.20 Microsoft Corp Com USD 0.000006250 Chevron Corp Com USD 0.75 General Electric Co Com USD 0.06 Procter & Gamble Co Com USD 1.00 Johnson & Johnson Com USD 1.00 Pfizer Inc Com USD 0.05 AT&T Inc Com USD 1.00 JPMorgan Chase & Co Com USD 1.00 Coca-Cola Co Com USD 0.25 Intel Corp Com USD 0.001 Wal-Mart Stores Inc Com USD 0.10 Wells Fargo & Co Com USD 1.67 Google Inc Com USD 0.001 Philip Morris International Inc Com NPV ConocoPhillips Com USD 0.01 Berkshire Hathaway Inc Com USD 0.0033 Oracle Corp Com USD 0.01

Proceeds $‘000 78,104 60,703 42,008 35,780 35,150 32,459 32,083 30,031 30,002 29,956 28,727 27,619 27,604 25,508 25,060 24,754 23,967 23,539 22,908 20,423

Holding 981,130 204,531 1,638,133 410,195 239,754 2,180,653 1,276,303 579,979 571,866 599,044 848,630 1,145,157 1,578,306 469,380 55,572 391,562 883,477 352,472 1,055,791 603,070

Investments Exxon Mobil Corp Com NPV Apple Inc Com NPV Microsoft Corp Com USD 0.000006250 Chevron Corp Com USD 0.75 International Business Machines Corp Com USD 0.20 General Electric Co Com USD 0.06 AT&T Inc Com USD 1.00 Procter & Gamble Co Com USD 1.00 Johnson & Johnson Com USD 1.00 Accenture Plc Com USD 0.0000225 JPMorgan Chase & Co Com USD 1.00 Wells Fargo & Co Com USD 1.67 Pfizer Inc Com USD 0.05 Coca-Cola Co Com USD 0.25 Google Inc Com USD 0.001 Berkshire Hathaway Inc Com USD 0.0033 Oracle Corp Com USD 0.01 Philip Morris International Inc Com NPV Intel Corp Com USD 0.001 Verizon Communications Inc USD 0.10

Cost $‘000 80,669 76,990 43,449 42,639 41,981 40,569 38,413 37,053 36,816 36,569 33,972 32,590 32,120 31,711 31,471 30,402 27,405 24,629 24,115 22,576

UCITS 8.2 requires a Schedule of Portfolio changes during the period. These are defined as aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate disposals greater than one per cent of the total value of sales. At a minimum the largest 20 purchases and 20 sales must be given or all purchases and sales if less than 20. A full listing of the portfolio changes for the period is available, upon request, at no cost from the Administrator.

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iShares plc Annual Report 413

Risk Warnings iShares may not be suitable for all investors. BlackRock Advisors (UK) Limited does not guarantee the performance of the shares or funds. The price of the investments (which may trade in limited markets) may go up or down and the investor may not get back the amount invested. Your income is not fixed and may fluctuate. Past performance is not a reliable indicator of future results. The value of the investment involving exposure to foreign currencies can be affected by exchange rate movements. We remind you that the levels and bases of, and reliefs from, taxation can change. Affiliated companies of BlackRock Advisors (UK) Limited may make markets in the securities mentioned in this document. Further, BlackRock Advisors (UK) Limited and/or its affiliated companies and/or their employees from time to time may hold shares or holdings in the underlying shares of, or options on, any security included in this document and may as principal or agent buy or sell securities. In addition, investing in emerging markets involves certain risks and special considerations not typically associated with investing in other markets. Index Disclaimers Barclays Capital' is a trade mark of Barclays Capital, the investment banking division of Barclays Bank PLC ('Barclays Capital'), and is used by BlackRock Advisors (UK) Limited under licence. With a distinctive business model, Barclays Capital provides corporates, financial institutions, governments and supranational organisations with solutions to their financing and risk management needs. Barclays Capital compiles, maintains and owns rights in and to the Barclays Capital US Treasury 1-3 Year Term Index, Barclays Capital Euro Government Bond 1-3 Year Term Index and Barclays Capital Euro Government Inflation-Linked Bond Index (together the 'indices'). iShares Barclays Capital $ Treasury Bond 1-3, iShares Barclays Capital Euro Government Bond 1-3 and iShares Barclays Capital Euro Inflation Linked Bond ('the funds') are not sponsored, endorsed, sold or promoted by Barclays Capital and Barclays Capital makes no representation regarding the advisability of investing in the funds. 'STOXX', 'EURO STOXX® Mid', 'EURO STOXX® Select Dividend 30', 'EURO STOXX® Small', 'EURO STOXX® Total Market Growth Large' and 'EURO STOXX® Total Market Value Large' are proprietary and copyrighted material and trade marks and/or service marks of STOXX Limited and have been licensed for use for certain purposes by BlackRock Advisors (UK) Limited. iShares EURO STOXX Mid, iShares EURO STOXX Select Dividend 30, iShares EURO STOXX Small, iShares EURO STOXX Total Market Growth Large and iShares EURO STOXX Total Market Value Large are not sponsored, endorsed, sold or promoted by STOXX, and STOXX makes no representation regarding the advisability of investing in such funds. 'Dow Jones' and 'Dow Jones Asia/Pacific Select Dividend 30 Index' are service marks of Dow Jones & Company, Inc. and have been licensed for use for certain purposes by BlackRock Advisors (UK) Limited. The iShares DJ Asia Pacific Select Dividend is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation regarding the advisability of investing in the fund. Euronext Indices B.V. has all proprietary rights with respect to the AEX-index® (the 'Index'). In no way Euronext Indices B.V. sponsors, endorses or is otherwise involved in the issue and offering of the product. Euronext Indices B.V. disclaims any liability to any party for any inaccuracy in the data on which the Index is based, for any mistakes, errors, or omissions in the calculation and/or dissemination of the Index, or for the manner in which it is applied in connection with the issue and offering thereof. 'AEX®' and 'AEX-index®' are registered trademarks of Euronext N.V. or its subsidiaries. 'FTSE®' is a trade mark jointly owned by the London Stock Exchange plc and the Financial Times Limited (the 'FT') and is used by FTSE International Limited ('FTSE') under licence. The FTSE 100 Index, FTSE 250 Index, FTSE China 25 Index and FTSE UK Dividend + Index are calculated by or on behalf of FTSE International Limited ('FTSE'). None of the Exchange, the FT nor FTSE sponsors, endorses or promotes iShares FTSE 100, iShares FTSE 250, iShares FTSE China 25 and iShares FTSE UK Dividend Plus nor is in any way connected to the funds or accepts any liability in relation to their issue, operation and trading. All copyright and database rights within the index values and constituent list vest in FTSE. BlackRock Advisors (UK) Limited has obtained full licence from FTSE to use such copyright and database rights in the creation of these products. 'FTSE®' is a trade mark jointly owned by the London Stock Exchange plc and the Financial Times Limited (the 'FT'), 'NAREIT®' is a trade mark of the National Association of Real Estate Investment Trusts ('NAREIT') and 'EPRA®' is a trade mark of the European Public Real Estate Association ('EPRA') and all are used by FTSE under licence. The FTSE EPRA/NAREIT Developed Europe ex UK Dividend+ Index is calculated by FTSE International Limited ('FTSE'). None of the Exchange, the FT, FTSE, Euronext N.V., NAREIT nor EPRA sponsors, endorses or promotes iShares FTSE/EPRA European Property Index Fund nor is in any way connected to the fund or accepts any liability in relation to its issue, operation and trading. All copyright and database rights within the index values and constituent list vest in FTSE, Euronext N.V., NAREIT and EPRA. BlackRock Advisors (UK) Limited has obtained full licence from FTSE to use such copyright and database rights in the creation of this product.

414 iShares plc Annual Report

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'FTSE®' is a trade mark jointly owned by the London Stock Exchange plc and the Financial Times Limited (the 'FT'). 'FTSEurofirst®' is a trademark jointly owned by FTSE International Limited ('FTSE') and Euronext N.V ('Euronext'). The FTSEurofirst 100 Index and FTSEurofirst 80 Index are compiled and calculated by or on behalf of FTSE. None of the Exchange, the FT, FTSE or Euronext sponsors, endorses or promotes iShares FTSEurofirst 100 and iShares FTSEurofirst 80 nor is in any way connected to the funds or accepts any liability in relation to their issue, operation and trading. All copyright and database rights within the index values and constituent list vest in FTSE and Euronext. BlackRock Advisors (UK) Limited has obtained full licence from FTSE to use such copyright and database rights in the creation of these products. Markit iBoxx is a registered trade mark of Markit Indices Limited and has been licensed for use by BlackRock Advisors (UK) Limited. Markit Indices Limited does not approve, endorse or recommend BlackRock Advisors (UK) Limited or iShares plc. These products are not sponsored, endorsed or sold by Markit Indices Limited and Markit Indices Limited makes no representation regarding the suitability of investing in these products.

iShares funds are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or any index on which such funds are based. The Prospectus contains a more detailed description of the limited relationship that MSCI has with BlackRock Advisors (UK) Limited and any related funds. 'Standard & Poor’s®', 'S&P®', 'S&P 500' are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by BlackRock Advisors (UK) Limited.iShares S&P 500 is not sponsored, endorsed, sold or promoted by S&P and S&P makes no representation regarding the advisability of investing in this product. iShares® and BlackRock® are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. © 2012 BlackRock Advisors (UK) Limited. Registered Company No. 00796793. All rights reserved. Calls may be monitored or recorded. © 2012 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, ALADDIN, iSHARES, LIFEPATH, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, and BUILT FOR THESE TIMES are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

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iShares plc Annual Report 415

Contact us For more information on all iShares ETFs, please visit our website on www.iShares.com. Alternatively, please call us on: „ „ „ „

From Switzerland: 0800 33 66 88 „ From the Netherlands: 0800 0233 466 „ From the UK: 0845 357 7000 From Germany and Austria: +49 (0) 89 42729 5858 „ From Luxembourg: +31 20 560 09 33 „ From Italy: 800 898085 From France: 0800 940 299 „ From Spain: +34 91 788 94 00 „ From the UAE: +971 4 450 0700 „ From Israel: +44 207 668 2117 From Denmark: 80 88 48 45 „ From Finland: 0800 918 277 „ From Norway: 800 14 324 „ From Sweden: 020 79 62 38

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