iShares, Inc.
Attachment for N-SAR Item 77E
N-SAR filing 8/31/2002

LEGAL PROCEEDINGS

In April 2002, the judge overseeing an ongoing action in the U.S. District Court
for the  Northern  District  of  Illinois  granted  leave  for a  United  States
patentholder named MOPEX, Inc. to amend its complaint to add the Company,  along
with  seven  other  parties,  as a  defendant.  There  are now a total of twenty
defendants,  including the Company's  investment advisor,  other exchange traded
funds,  various fund service providers and market makers,  and the Chicago Stock
Exchange,  Inc. In the action,  the  plaintiff  alleges  that the actions of the
parties,  now including the Company,  infringed their patent.  In addition,  the
plaintiff alleges that the parties engaged in a "conspiracy"  amongst themselves
to infringe the patent.  Although this is the only case to which the Company has
been named as a party, this action is one of two involving  related issues.  The
Company  believes  that  it has  valid  defenses  to all  claims  raised  by the
patentholder.  However,  a resolution of this case may impose increased costs on
the C ompany and thus raise the expense ratios of the Funds, adversely affecting
performance.