ANNUAL FINANCIAL REPORT
30 June 2014
BlackRock Investment Management (Australia) Limited
13 006 165 975
Australian Financial Services Licence No 230523
BlackRock Wholesale Funds
BlackRock Wholesale Balanced Fund
088 051 889
BlackRock Wholesale International Bond Fund
088 174 494
BlackRock Wholesale Managed Income Fund
088 196 801
BlackRock Wholesale Australian Share Fund
088 174 056
BlackRock Australian Bond Fund
088 173 611
BlackRock Wholesale Funds
Annual Financial Report - 30 June 2014
Contents
Page
Directors' Report
1
Auditor's Independence Declaration
7
Statements of Comprehensive Income
8
Balance Sheets
11
Statements of Changes in Equity
14
Statements of Cash Flows
16
Notes to the Financial Statements
19
Directors' Declaration
84
Independent Auditor's Report to the Unitholders of BlackRock Wholesale Funds
85
BlackRock Wholesale Funds
Directors' Report
For the year ended 30 June 2014
Directors' Report
The directors of BlackRock Investment Management (Australia) Limited (the 'Responsible Entity'), the Responsible Entity of
BlackRock Wholesale Funds (the 'Funds'), present their report together with the financial statements of the Funds, for the
year ended 30 June 2014 and the auditor's report thereon. The BlackRock Wholesale Funds comprise BlackRock Wholesale
Balanced Fund, BlackRock Wholesale International Bond Fund, BlackRock Wholesale Managed Income Fund, BlackRock
Wholesale Australian Share Fund and BlackRock Australian Bond Fund.
Fund Objectives
BlackRock Wholesale Balanced Fund
The investment objective of the Fund is to provide investors with the highest possible returns consistent with a 'balanced'
investment strategy.
BlackRock Wholesale International Bond Fund
The primary aim of the Fund is to generate capital and income returns for those investors seeking exposure to
international fixed income markets, including Australia. The Fund aims to outperform the Barclays Capital Global
Aggregate 500 Index (AUD hedged) over rolling three years periods.
BlackRock Wholesale Managed Income Fund
The primary aim of the Fund is to provides investors with regular monthly income and some capital growth. The Fund aims
to achieve this goal by outperforming the benchmark asset allocation returns over rolling three year periods.
BlackRock Wholesale Australian Share Fund
The Fund has two aims: to achieve capital growth over the long-term through investments in Australian shares and other
securities, and to provide investors with some tax-effective income through the distribution of franking credits. Overall,
the Fund aims to achieve this goal by out performing the S&P/ASX 200 Accumulation Index over rolling five year periods.
BlackRock Australian Bond Fund
The Fund aims to capture returns superior to those available from the Fund's benchmark (the UBS Australia Fixed Interest
Index (All Maturities)) by accessing a broad array of value-enhancing strategies.
Principal Activities
The Funds invested in accordance with the provisions of the Funds' Constitutions.
The Funds did not have any employees during the year.
There were no significant changes in the nature of the Funds' activities during the year.
Directors
The following persons held office as directors of the Responsible Entity during the year or since the end of the year and up
to the date of this report:
Director
Date appointed
M S McCorry
Appointed 2 December 2009
J Arter
Appointed 19 September 2012
L McMahon
Appointed 13 February 2013
A Landman
Appointed 8 May 2013
K Miller
Appointed 8 May 2013
A Telfer
Appointed 12 December 2013
-1-
BlackRock Wholesale Funds
Directors' Report
For the year ended 30 June 2014
Directors' Report (continued)
Review and Results of Operations
During the year, the Funds continued to invest funds in accordance with target asset allocations as set out in the
governing documents of the Funds and in accordance with the provisions of the Funds' Constitutions.
Results
The performance of the Funds, as represented by the results of their operations, were as follows:
BlackRock Wholesale
Balanced Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
BlackRock Wholesale
International Bond Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Operating profit/(loss) before finance costs
attributable to unitholders
Distributions paid and payable
116,143
157,669
5,529
3,258
63,839
90,247
32
6,242
BlackRock Wholesale
Managed Income Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
BlackRock Wholesale
Australian Share Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Operating profit/(loss) before finance costs
attributable to unitholders
3,665
5,713
34,461
58,384
Distributions paid and payable
1,483
2,962
32,716
44,868
BlackRock Australian Bond
Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Operating profit/(loss) before finance costs
attributable to unitholders
8,573
1,272
Distributions paid and payable
6,054
5,258
-2-
BlackRock Wholesale Funds
Directors' Report
For the year ended 30 June 2014
Directors' Report (continued)
Returns
The table below demonstrates the performance of the Funds as represented by the total return.
Returns*
1 Year
% p.a.
3 Year
% p.a.
5 Year
% p.a.
BlackRock Wholesale Balanced Fund returns
13.32
10.86
9.82
BlackRock Wholesale International Bond Fund returns
9.12
8.22
8.47
BlackRock Wholesale Managed Income Fund returns
9.30
7.01
8.14
BlackRock Wholesale Australian Share Fund returns
15.79
8.78
8.95
7.02
7.77
7.84
BlackRock Australian Bond Fund returns
Class X
* Returns (after fees) are calculated on the assumption that all distributions are reinvested in the Funds, and include the
effect of compounding.
Reconciliation of Net Asset Value for Unit Pricing Purposes to Financial Reporting Purposes
The key differences between net assets for unit pricing and net assets attributable to unitholders as reported in the
financial statements prepared under Australian Accounting Standards have been outlined below:
BlackRock Wholesale
Balanced Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
890,392
Net Assets for Unit Pricing Purposes
Permanent Differences
Difference between net market value (for unit
pricing) and fair value (for financial statements)
of financial assets held at fair value through
profit or loss
Timing Differences
Distribution payable
Other
Net assets attributable to unitholders as at 30
June
-
-3-
940,999
(1,881)
(57,303)
(532)
(77,296)
334
832,557
862,156
BlackRock Wholesale
International Bond Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
63,820
(32)
63,788
63,745
(69)
(5,786)
(1)
57,889
BlackRock Wholesale Funds
Directors' Report
For the year ended 30 June 2014
Directors' Report (continued)
Reconciliation of Net Asset Value for Unit Pricing Purposes to Financial Reporting Purposes (continued)
BlackRock Wholesale
Managed Income Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
$'000
37,342
Net Assets for Unit Pricing Purposes
Permanent Differences
Difference between net market value (for unit
pricing) and fair value (for financial statements)
of financial assets held at fair value through
profit or loss
Timing Differences
Distribution payable
Other
Net assets attributable to unitholders as at 30
June
(466)
1
36,877
BlackRock Wholesale
Australian Share Fund
Year ended
30 June
30 June
2014
2013
43,500
$'000
213,730
-
(51)
255,237
(559)
(1,313)
-
(30,784)
(74)
(38,936)
-
42,136
182,872
215,742
BlackRock Australian Bond
Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
125,870
Net Assets for Unit Pricing Purposes
Permanent Differences
Difference between net market value (for unit
pricing) and fair value (for financial statements)
of financial assets held at fair value through
profit or loss
Timing Differences
Distribution payable
Other
Net assets attributable to unitholders as at 30
June
(2,248)
1
123,623
89,136
(107)
(4,070)
(3)
84,956
In accordance with the Funds' offering documents, listed investments are stated at the last traded price on the valuation
day for the purpose of determining net asset value per unit for applications and redemptions.
The Funds have adopted AASB 13 on 1 July 2013 and have changed their valuation inputs for listed investments to the last
traded prices and unlisted unit trusts investments to net asset value per unit, as reported by the Responsible Entity. The
change allows for consistency with the inputs prescribed in the Funds' offering documents for the calculation of unit prices
for applications and redemptions. As a result, this change eliminated the difference between the net assets for unit
pricing purposes and net assets as reported in the financial statements as at 30 June 2014. In the prior year, the Funds
utilised bid and ask prices for their listed financial assets and financial liabilities respectively in accordance with AASB 139
which resulted in a difference with the per unit trading value calculated by the Funds using last traded prices. The
difference of $1,880,446 for BlackRock Wholesale Balanced Fund, $69,442 for BlackRock Wholesale International Bond
Fund, $51,316 for BlackRock Wholesale Managed Income Fund, $558,614 for BlackRock Wholesale Australian Share Fund
and $106,914 for BlackRock Australian Bond Fund, as at 30 June 2013 are recorded as a fair value movement through
profit or loss.
-4-
BlackRock Wholesale Funds
Directors' Report
For the year ended 30 June 2014
Directors' Report (continued)
Significant Changes in State of Affairs
In the opinion of the directors, there were no significant changes in the state of affairs of the Funds that occurred during
the financial year under review.
Matters Subsequent to the End of the Financial Year
Except as disclosed in the financial statements, no matter or circumstance has arisen since 30 June 2014 that has
significantly affected, or may significantly affect:
(i)
the operations of the Funds in future financial years, or
(ii)
the results of those operations in future financial years, or
(iii) the state of affairs of the Funds in future financial years.
Likely Developments and Expected Results of Operations
The Funds will continue to be managed in accordance with the investment objectives and guidelines as set out in the
governing documents of the Funds and in accordance with the provisions of the Funds' Constitutions.
The results of the Funds' operations will be affected by a number of factors, including the performance of investment
markets in which the Funds invest. Investment performance is not guaranteed and future returns may differ from past
returns. As investment conditions change over time, past returns should not be used to predict future returns.
Further information on likely developments in the operations of the Funds and the expected results of those operations
have not been included in this report because the Responsible Entity believes it would be likely to result in unreasonable
prejudice to the Funds.
Indemnification and Insurance of Officers and Auditor
No insurance premiums are paid for out of the assets of the Funds in regards to insurance cover provided to either the
officers of the Responsible Entity or the auditor of the Funds. So long as the officers of the Responsible Entity act in
accordance with the Funds' Constitutions and the Law, officers remain indemnified out of the assets of the Funds against
losses incurred while acting on behalf of the Funds. The auditor of the Funds is in no way indemnified out of the assets of
the Funds.
Fees Paid and Interests Held in the Funds by the Responsible Entity or its Associates
Fees paid to the Responsible Entity and its associates out of Funds' property during the year are disclosed in Note 12 of the
financial statements.
No fees were paid out of Funds' property to the directors of the Responsible Entity during the year (2013: Nil). Pursuant to
ASIC Class Order relief, the Responsible Entity may individually negotiate fees with certain sophisticated or professional
investors.
The number of interests in the Funds held by the Responsible Entity and its associates as at the end of the financial year
are also disclosed in Note 12 of the financial statements.
Interests in the Funds
The movement in units on issue in the Funds during the year is disclosed in Note 6 of the financial statements.
Value of Assets
The value of the Funds' assets and liabilities is disclosed on the Balance Sheets and derived using the basis set out in Note
2 of the financial statements.
-5-
BlackRock Wholesale Funds
Directors' Report
For the year ended 30 June 2014
Directors' Report (continued)
Environmental Regulation
The operations of the Funds are not subject to any particular or significant environmental regulations under either
Commonwealth, State or Territory law.
Rounding of Amounts to the Nearest Thousand Dollars
The Funds are registered schemes of a kind referred to in Class Order 98/100 (as amended), issued by the Australian
Securities and Investments Commission relating to the ''rounding off'' of amounts in the directors' report and financial
statements. Amounts in the directors' report and financial statements have been rounded to the nearest thousand dollars
in accordance with that Class Order, unless otherwise indicated.
Additional Disclosures
The Funds have applied the relief available in Class Order 06/441 issued by the Australian Securities and Investments
Commission in the preparation of this report. This class order allows registered Schemes with a common responsible entity
to include multiple financial statements in adjacent columns in a financial report.
The Funds have applied the relief available in Class Order 98/2395 issued by the Australian Securities and Investments
Commission in the preparation of this report. Accordingly, the additional information otherwise required to be included in
the directors’ report has been disclosed in Notes 5, 6 and 12 to the financial statements.
Auditor's Independence Declaration
A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001 is set out
on page 7.
The financial statements were authorised for issue by the directors on 24 September 2014.
This report is made in accordance with a resolution of the directors.
Director
L McMahon
Sydney
24 September 2014
-6-
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②
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BlackRock Wholesale Funds
Statements of Comprehensive Income
For the year ended 30 June 2014
Statements of Comprehensive Income
BlackRock Wholesale Balanced
Fund
Year ended
30 June
30 June
2014
2013
Notes
Investment income
Interest income
Distributions from related schemes
Net gains/(losses) on financial instruments
held at fair value through profit or loss
(including FX gains/(losses))
Fee rebates from related schemes
Other operating income
$'000
$'000
$'000
71
51,748
127
61,295
379
72,377
251
517
105,152
146
19
5,497
-
(2,983)
-
124,964
166,739
5,876
3,617
8,808
13
-
8,885
181
4
-
345
2
-
359
-
8,821
9,070
347
359
116,143
157,669
5,529
3,258
5
(63,839)
(90,247)
(32)
6
(52,304)
(67,422)
(5,497)
12
4
12
Total net investment income/(loss)
Expenses
Responsible Entity's fees
Transaction costs
Custody movement fees
Other operating expenses
$'000
BlackRock Wholesale
International Bond Fund
Year ended
30 June
30 June
2014
2013
12
Total operating expenses
Operating profit/(loss)
6,600
Finance costs attributable to unitholders
Distributions to unitholders
(Increase)/decrease in net assets
attributable to unitholders
(6,242)
2,984
Profit/(loss) for the year
-
-
-
-
Other comprehensive income
-
-
-
-
Total comprehensive income for the year
-
-
-
-
The above Statements of Comprehensive Income should be read in conjunction with the accompanying notes.
-8-
BlackRock Wholesale Funds
Statements of Comprehensive Income
For the year ended 30 June 2014
Statements of Comprehensive Income
BlackRock Wholesale Managed
Income Fund
Year ended
30 June
30 June
2014
2013
Notes
Investment income
Interest income
Distributions from related schemes
Net gains/(losses) on financial instruments
held at fair value through profit or loss
(including FX gains/(losses))
Fee rebates from related schemes
Other operating income
$'000
$'000
$'000
$'000
1,756
2,831
9
23,099
51
26,379
2,223
13
-
3,282
5
-
13,179
51
317
34,678
68
2
3,992
6,118
36,655
61,178
321
6
-
404
1
-
2,188
6
-
2,789
3
2
-
327
405
2,194
2,794
3,665
5,713
34,461
58,384
5
(1,483)
(2,962)
(32,716)
(44,868)
6
(2,182)
(2,751)
(1,745)
(13,516)
12
4
12
Total net investment income/(loss)
Expenses
Responsible Entity's fees
Transaction costs
Custody movement fees
Other operating expenses
BlackRock Wholesale
Australian Share Fund
Year ended
30 June
30 June
2014
2013
12
Total operating expenses
Operating profit/(loss)
Finance costs attributable to unitholders
Distributions to unitholders
(Increase)/decrease in net assets
attributable to unitholders
Profit/(loss) for the year
-
-
-
-
Other comprehensive income
-
-
-
-
Total comprehensive income for the year
-
-
-
-
The above Statements of Comprehensive Income should be read in conjunction with the accompanying notes.
-9-
BlackRock Wholesale Funds
Statements of Comprehensive Income
For the year ended 30 June 2014
Statements of Comprehensive Income
BlackRock Australian Bond
Fund
Year ended
30 June
30 June
2014
2013
Notes
Investment income
Interest income
Distributions from related schemes
Net gains/(losses) on financial instruments
held at fair value through profit or loss
(including FX gains/(losses))
Fee rebates from related schemes
Other operating income
$'000
2
4,903
6
2,681
3,604
66
3
(1,457)
54
-
8,578
1,284
5
-
10
1
1
5
12
8,573
1,272
5
(6,054)
(5,258)
6
(2,519)
3,986
12
4
12
Total net investment income/(loss)
Expenses
Responsible Entity's fees
Transaction costs
Custody movement fees
Other operating expenses
$'000
12
Total operating expenses
Operating profit/(loss)
Finance costs attributable to unitholders
Distributions to unitholders
(Increase)/decrease in net assets
attributable to unitholders
Profit/(loss) for the year
-
-
Other comprehensive income
-
-
Total comprehensive income for the year
-
-
The above Statements of Comprehensive Income should be read in conjunction with the accompanying notes.
- 10 -
BlackRock Wholesale Funds
Balance Sheets
As at 30 June 2014
Balance Sheets
BlackRock Wholesale Balanced
Fund
As at
Notes
Assets
Cash and cash equivalents
Receivables
Financial assets held at fair value through
profit or loss
Cash held on collateral
30 June
2014
$'000
30 June
2013
$'000
1,779
100,267
12,661
36,185
110
387
5,899
9
794,862
2,478
883,419
10,526
63,433
-
57,806
-
899,386
942,791
63,930
63,705
57,303
8,302
77,296
733
32
110
5,786
30
782
442
2,606
-
-
-
66,829
80,635
142
5,816
832,557
862,156
63,788
57,889
14(b)
5
10
11
Total liabilities (excluding net assets
attributable to unitholders)
Net assets attributable to unitholders liability
30 June
2013
$'000
14(b)
7
Total assets
Liabilities
Bank overdraft
Distribution payable
Payables
Financial liabilities held at fair value
through profit or loss
Cash held on collateral
30 June
2014
$'000
BlackRock Wholesale
International Bond Fund
As at
6
The above Balance Sheets should be read in conjunction with the accompanying notes.
- 11 -
BlackRock Wholesale Funds
Balance Sheets
As at 30 June 2014
Balance Sheets
BlackRock Wholesale Managed
Income Fund
As at
Notes
Assets
Cash and cash equivalents
Receivables
Financial assets held at fair value through
profit or loss
Cash held on collateral
9
409
45,778
28,876
22,350
37,080
-
42,122
-
168,753
-
203,653
-
37,644
43,478
214,940
254,879
466
301
1,313
29
30,784
1,284
38,936
201
-
-
-
-
767
1,342
32,068
39,137
36,877
42,136
182,872
215,742
14(b)
5
10
11
6
30 June
2013
$'000
532
824
Total liabilities (excluding net assets
attributable to unitholders)
Net assets attributable to unitholders liability
30 June
2014
$'000
30 June
2013
$'000
20
544
14(b)
7
Total assets
Liabilities
Bank overdraft
Distribution payable
Payables
Financial liabilities held at fair value
through profit or loss
Cash held on collateral
30 June
2014
$'000
BlackRock Wholesale
Australian Share Fund
As at
The above Balance Sheets should be read in conjunction with the accompanying notes.
- 12 -
BlackRock Wholesale Funds
Balance Sheets
As at 30 June 2014
Balance Sheets
BlackRock Australian Bond
Fund
As at
Notes
Assets
Cash and cash equivalents
Receivables
Financial assets held at fair value through
profit or loss
Cash held on collateral
247
10,849
69
1,737
9
123,168
-
87,400
681
134,264
89,887
1
2,248
8,262
4,070
2
130
-
859
-
10,641
4,931
123,623
84,956
14(b)
5
10
11
Total liabilities (excluding net assets
attributable to unitholders)
Net assets attributable to unitholders liability
6
The above Balance Sheets should be read in conjunction with the accompanying notes.
- 13 -
30 June
2013
$'000
14(b)
7
Total assets
Liabilities
Bank overdraft
Distribution payable
Payables
Financial liabilities held at fair value
through profit or loss
Cash held on collateral
30 June
2014
$'000
BlackRock Wholesale Funds
Statements of Changes in Equity
For the year ended 30 June 2014
Statements of Changes in Equity
BlackRock Wholesale Balanced
Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
BlackRock Wholesale
International Bond Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Total equity at the beginning of the financial year
-
-
-
-
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
-
-
-
-
Transactions with owners in their capacity as owners
Total equity at the end of the financial year
-
-
-
-
BlackRock Wholesale Managed
Income Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
BlackRock Wholesale
Australian Share Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Total equity at the beginning of the financial year
-
-
-
-
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
-
-
-
-
Transactions with owners in their capacity as owners
Total equity at the end of the financial year
-
-
-
-
The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.
- 14 -
BlackRock Wholesale Funds
Statements of Changes in Equity
For the year ended 30 June 2014
Statements of Changes in Equity
BlackRock Australian Bond
Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Total equity at the beginning of the financial year
-
-
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
-
-
Transactions with owners in their capacity as owners
Total equity at the end of the financial year
-
-
Under Australian Accounting Standards, net assets attributable to unitholders are classified as a liability rather than
equity. As a result there was no equity at the start or end of the year.
The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.
- 15 -
BlackRock Wholesale Funds
Statements of Cash Flows
For the year ended 30 June 2014
Statements of Cash Flows
BlackRock Wholesale
Balanced Fund
Year ended
30 June
30 June
2014
2013
Notes
Cash flows from operating activities
Proceeds from sale of financial instruments held
at fair value through profit or loss
Purchase of financial instruments held at fair
value through profit or loss
Transaction costs
Interest received
Interest paid
Distributions received from related schemes
Fee rebates from related schemes received
Other income received
Responsible Entity's fees paid
Operating expenses paid
$'000
BlackRock Wholesale
International Bond Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
$'000
645,827
603,951
7,788
7,764
(492,703)
4,344
(1,900)
237
517
(8,030)
(10)
(511,378)
(181)
30,372
(1,749)
2,792
146
19
(8,925)
(4)
(2,887)
912
(316)
(1)
(2,917)
1
(362)
-
148,282
115,043
5,496
4,486
Cash flows from financing activities
Proceeds from applications by unitholders
Payments for redemptions by unitholders
Distributions paid
56,249
(168,567)
(46,753)
160,477
(244,808)
(31,409)
3,031
(7,506)
(911)
2,892
(6,970)
(408)
Net inflow/(outflow) from financing activities
(159,071)
(115,740)
(5,386)
(4,486)
(10,789)
(697)
Net inflow/(outflow) from operating activities
14(a)
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the year
Effects of foreign currency exchange rate
changes on cash and cash equivalents
12,661
(93)
110
-
12,997
-
-
361
-
-
Cash and cash equivalents at the end of the
year
14(b)
1,779
12,661
110
-
Non-cash operating activities
14(a)
48,913
40,534
4,980
3,025
Non-cash financing activities
14(c)
37,079
26,705
4,875
2,266
The above Statements of Cash Flows should be read in conjunction with the accompanying notes.
- 16 -
BlackRock Wholesale Funds
Statements of Cash Flows
For the year ended 30 June 2014
Statements of Cash Flows
BlackRock Wholesale Managed
Income Fund
Year ended
30 June
30 June
2014
2013
Notes
$'000
Cash flows from operating activities
Proceeds from sale of financial instruments held
at fair value through profit or loss
Purchase of financial instruments held at fair
value through profit or loss
Transaction costs
Interest received
Interest paid
Distributions received from related schemes
Fee rebates from related schemes received
Other income received
Responsible Entity's fees paid
Operating expenses paid
BlackRock Wholesale
Australian Share Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
$'000
20,808
26,158
52,718
259,429
(11,506)
10
(297)
(5)
(7,874)
783
5
(405)
(1)
(4,930)
9
48
317
(2,027)
(5)
(99,024)
(3)
50
3,693
69
2
(2,745)
(5)
9,010
18,666
46,130
161,466
Cash flows from financing activities
Proceeds from applications by unitholders
Payments for redemptions by unitholders
Distributions paid
1,792
(9,644)
(1,670)
1,020
(17,248)
(1,749)
14,477
(57,349)
(31,725)
38,342
(158,882)
(19,515)
Net inflow/(outflow) from financing activities
(9,522)
(17,977)
(74,597)
(140,055)
Net inflow/(outflow) from operating activities
14(a)
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the year
Effects of foreign currency exchange rate
changes on cash and cash equivalents
(512)
689
(28,467)
21,411
532
(157)
28,876
7,465
-
-
-
-
Cash and cash equivalents at the end of the
year
14(b)
20
532
409
28,876
Non-cash operating activities
14(a)
2,037
2,332
25,859
7,967
Non-cash financing activities
14(c)
660
989
9,143
7,005
The above Statements of Cash Flows should be read in conjunction with the accompanying notes.
- 17 -
BlackRock Wholesale Funds
Statements of Cash Flows
For the year ended 30 June 2014
Statements of Cash Flows
BlackRock Australian Bond
Fund
Year ended
30 June
30 June
2014
2013
Notes
Cash flows from operating activities
Proceeds from sale of financial instruments held
at fair value through profit or loss
Purchase of financial instruments held at fair
value through profit or loss
Transaction costs
Interest received
Interest paid
Distributions received from related schemes
Fee rebates from related schemes received
Other income received
Responsible Entity's fees paid
Operating expenses paid
$'000
$'000
51,345
152,145
(88,897)
1,168
63
3
(5)
(196,659)
(10)
1,365
52
(2)
(36,323)
(43,109)
Cash flows from financing activities
Proceeds from applications by unitholders
Payments for redemptions by unitholders
Distributions paid
38,935
(2,403)
-
45,658
(2,658)
-
Net inflow/(outflow) from financing activities
36,532
43,000
14(a)
Net inflow/(outflow) from operating activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the year
Effects of foreign currency exchange rate
changes on cash and cash equivalents
209
(109)
69
154
(32)
24
Cash and cash equivalents at the end of the
year
14(b)
246
69
Non-cash operating activities
14(a)
5,150
1,048
Non-cash financing activities
14(c)
7,876
4,674
The above Statements of Cash Flows should be read in conjunction with the accompanying notes.
- 18 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
1 General Information
These financial statements cover BlackRock Wholesale Balanced Fund, BlackRock Wholesale International Bond Fund,
BlackRock Wholesale Managed Income Fund, BlackRock Wholesale Australian Share Fund and BlackRock Australian Bond
Fund ("the Funds") as individual entities. The Funds were constituted on 30 June 1992. The Funds will terminate on the
eightieth anniversary of the day the Funds commenced, unless terminated in accordance with the provisions of the Funds'
Constitutions.
The Responsible Entity of the Funds is BlackRock Investment Management (Australia) Limited (the 'Responsible Entity').
The Responsible Entity's registered office is Level 26, 101 Collins Street, Melbourne, VIC 3000.
The financial statements were authorised for issue by the directors on 24 September 2014. The directors of the
Responsible Entity have the power to amend and reissue the financial statements.
The financial statements are presented in the Australian currency.
2 Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These
policies have been consistently applied to all years presented, unless otherwise stated in the following text.
(a) Statement of Compliance and Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Accounting Standards Board and the Corporations Act 2001 in Australia. The Funds are forprofit unit trusts for the purpose of preparing the financial statements.
The financial statements are prepared on the basis of fair value measurement of assets and liabilities except where
otherwise stated.
Certain prior year numbers have been reclassified in the financial statements to conform to current year presentation.
The Balance Sheets are presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity
and are not distinguished between current and non-current. All balances are expected to be recovered or settled within
twelve months, except for investments in financial assets at fair value through profit or loss and net assets attributable to
unitholders. The amount expected to be recovered or settled within twelve months after the end of each reporting period
cannot be reliably determined.
(i) Compliance with International Financial Reporting Standards
The financial statements of the Funds also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
(ii) New and amended standards adopted by the Funds
The Funds have applied the following standards and amendments for the first time in their annual reporting period
commencing on 1 July 2013.
AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve the consistency and reduce complexity by providing a precise definition
of fair value and a single source of fair value measurement and disclosure requirements for use across Australian
Accounting Standards. The requirements do not extend to the use of fair value accounting but provide guidance on how it
should be applied where its use is already required or permitted by other Australian Accounting Standards.
If a financial asset or a liability measured at fair value has a bid price and an ask price, the standard requires valuation to
be based on a price within the bid-ask spread that is most representative of fair value and allows the use of mid-market
pricing or other pricing conventions that are used by market participants as a practical expedient for fair value
measurement within a bid-ask spread.
- 19 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of Significant Accounting Policies (continued)
(a) Statement of Compliance and Basis of Preparation (continued)
(ii) New and amended standards adopted by the Funds (continued)
On adoption of the standard, the Funds changed their valuation inputs to last traded prices for listed financial assets and
liabilities and net asset value per unit, as reported by the Responsible Entity, for investments in unlisted unit trusts. The
change allows for consistency with the inputs prescribed in the Funds' offering documents for the calculation of unit prices
for applications and redemptions. The use of last traded prices and net asset value per unit is recognised as a standard
pricing convention within the industry. In the prior year, the Funds utilised bid and ask prices for their listed financial
assets and liabilities respectively, and redemption value for their investments in unlisted unit trusts. As required under
the standard, the change to the fair value of the financial assets and liabilities is applied prospectively in the same way as
a change in an accounting estimate. As a result, the fair value of the financial assets and liabilities increased by
$1,880,446 for BlackRock Wholesale Balanced Fund, increased by $69,442 for BlackRock Wholesale International Bond
Fund, increased by $51,316 for BlackRock Wholesale Managed Income Fund, increased by $558,614 for BlackRock
Wholesale Australian Share Fund and increased by $106,914 for BlackRock Australian Bond Fund, as at 1 July 2013. The
differences have been recorded as fair value movements through profit or loss. Comparative amounts have not been
restated.
AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interest in Other Entities,
revised AASB 127 Separate Financial Statements, AASB 2011-7 Amendments to Australian Accounting Standards arising
from the Consolidation and Joint Arrangements Standards (effective 1 January 2013) and AASB 2013-5 Amendments to
Australian Accounting Standards – Investment Entities (effective 1 January 2014)
AASB 10 replaces all of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial
Statements, and Interpretation 12 Consolidation – Special Purpose Entities. The core principle that a consolidated entity
presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of
consolidation. However the standard introduces a single definition of control and focuses on the need to have both power
and rights or exposure to variable returns before control is present. The amendments made to AASB 10 by AASB 2013-5
introduce an exception from the consolidation requirements for investment entities provided that the investments in
subsidiaries are measured at fair value through profit or loss.
AASB 127 is renamed Separate Financial Statements and is amended to deal solely with separate financial statements. The
amendments to AASB 127 outline that consolidated financial statements are no longer required to be prepared, the
standard requires an investment entity as defined in AASB 10 to present separate financial statements as its only financial
statements in the case where it measures all of its subsidiaries at fair value through profit or loss and to disclose that fact,
as is the case with the Funds. Going forward only separate financial statements are required.
AASB 12 sets out the required disclosures for entities reporting under the two new standards, AASB 10 and AASB 11 and
replaces the disclosure requirements currently found in AASB 127 and AASB 128. The standard requires entities to disclose
significant judgments and assumptions made in determining whether the entity controls, jointly controls, significantly
influences or has some other interests in other entities. Entities are also required to provide more disclosures around
certain 'structured entities'. The amendments also introduce new disclosure requirements related to investment entities.
Adoption of the standard has impacted the Funds' level of disclosures in certain of the above noted areas, but has not
impacted the Funds’ financial position or performance.
The Funds have elected to early adopt amendments made to AASB 10, AASB 12 and revised AASB 127 by AASB 2013-5
Amendments to Australian Accounting Standards – Investment Entities. On adoption of the amendments, the Funds have
determined that they meet the definition of an investment entity. The Funds do not control any entities providing services
to the investment entity. They have therefore changed their accounting policy with respect to their controlled entities.
The subsidiaries, which were previously consolidated, are now accounted for at fair value through profit or loss in their
separate financial statements.
The Funds' policy has and continues to be, to measure their investment in controlled entities at fair value through profit
or loss in accordance with AASB 139, in their separate financial statements. As both the consolidated and the separate
financial statements have been previously disclosed, in which their subsidiaries were accounted for at fair value through
profit or loss, not at cost. As such, no further information is presented on the impact of the above change, as the separate
financial statements show the financial position of the Funds as required by the investment entities exception. This
change in accounting standards has been applied retrospectively in accordance with AASB 108 Accounting Policies,
Changes in Accounting Estimates and Errors as required by the transitional provisions of AASB 10 and the amendments to
AASB 10.
- 20 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of Significant Accounting Policies (continued)
(a) Statement of Compliance and Basis of Preparation (continued)
(ii) New and amended standards adopted by the Funds (continued)
AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial
Liabilities (effective 1 January 2013) and AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting
Financial Assets and Financial Liabilities (effective 1 January 2014)
This standard requires additional disclosures to enable users of financial statements to evaluate the effect or the potential
effects of netting arrangements, including rights of set-off, associated with an entity’s recognised financial assets and
recognised financial liabilities, on the entity's financial position. The disclosure requirements are also applicable to
derivative financial instruments that are subject to enforceable master netting arrangements or similar agreements,
irrespective of whether the financial instruments are currently offset. The Funds have elected to early adopt amendments
made by AASB 2012-3, the amendments clarify the offsetting criteria in AASB 132 and address inconsistencies in their
application. This includes clarifying the meaning of 'currently has a legally enforceable right of set-off' and that some
gross settlement arrangements may be considered equivalent to net settlement.
Except for AASB 2013-5 and AASB 2012-3 which were early adopted, and AASB 2012-2 which became effective on 1 January
2013, there are no other standards, interpretations or amendments to existing standards that are effective for the first
time for the financial year beginning 1 July 2013 that would be expected to have a material impact on the Funds.
(b) Financial Instruments
(i) Classification
The Funds' investments are classified as at fair value through profit or loss. They comprise:
!
Financial instruments held for trading
Derivative financial instruments such as futures, forward foreign exchange contracts, options and swaps are included
under this classification. The Funds do not designate any derivatives as hedges in a hedging relationship.
!
Financial instruments designated at fair value through profit or loss upon initial recognition
These include financial assets that are not held for trading purposes and which may be sold. These are investments in
listed equity, listed unit trusts, unlisted unit trusts, interest bearing securities and money market securities.
Financial assets and financial liabilities designated at fair value through profit or loss upon initial recognition are those
that are managed and their performance evaluated on a fair value basis in accordance with the Funds' documented
investment strategy. The Funds' policy is for the Responsible Entity to evaluate the information about these financial
instruments on a fair value basis together with other related financial information.
Short sales are classified as financial liabilities at fair value through profit or loss. Short sales are where borrowed
securities are sold in anticipation of a decline in the market value of those securities and are made or may be used for
various arbitrage transactions.
(ii) Recognition/derecognition
The Funds recognise financial assets and financial liabilities on the date they become party to the contractual agreement
(trade date) and recognise changes in fair value of the financial assets or financial liabilities from this date.
Investments are derecognised when the right to receive cash flows from the investments have expired or the Funds have
transferred substantially all risks and rewards of ownership.
- 21 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of Significant Accounting Policies (continued)
(b) Financial Instruments (continued)
(iii) Measurement
Financial assets and liabilities held at fair value through profit or loss
Financial assets and liabilities held at fair value through profit or loss are measured initially at fair value excluding any
transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
Transaction costs on financial assets and financial liabilities at fair value through profit or loss are expensed immediately.
Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with
changes in their fair value recognised in the Statements of Comprehensive Income.
!
Fair value in an active market
The fair value of financial assets and liabilities traded in active markets is based on their quoted market prices at the
end of the reporting date without any deduction for estimated future selling costs. Prior to 1 July 2013, the quoted
market price used for financial assets held by the Funds was the current bid price and the quoted market price for
financial liabilities was the current ask price. On adoption of AASB 13, the Funds changed their fair valuation input to
utilise the last traded market prices for both financial assets and financial liabilities.
!
Fair value in an inactive or unquoted market
The fair value of financial assets and liabilities that are not traded in an active market is determined using valuation
techniques. These include the use of recent arm's length market transactions, reference to the current fair value of a
substantially similar instrument, discounted cash flow techniques, option pricing models or any other valuation
technique that provides a reliable estimate of prices obtained in actual market transactions.
Accordingly, there may be a difference between the fair value at initial recognition and amounts determined using a
valuation technique. If such a difference exists, the Funds recognise the difference in the Statements of
Comprehensive Income to reflect a change in factors, including time, that market participants would consider in
setting a price.
Investments in other unlisted unit trusts are recorded at the net asset value per unit as reported by the Responsible
Entity of such funds.
(c) Offsetting financial instruments
Financial assets and liabilities are reported on a gross basis in the Balance Sheet. Where there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the
liability simultaneously on default or in the ordinary course of business, the financial assets and liabilities will be offset
and reported on a net basis in notes to the financial statements.
(d) Net Assets Attributable to Unitholders
Units are redeemable at the unitholders' option and are therefore classified as financial liabilities. The units can be put
back to the Funds at any time for cash equal to a proportionate share of the Funds' net asset value. The fair value of
redeemable units is the residual interest that is payable at the end of the reporting date if unitholders exercised their
right to redeem units in the Funds. The Funds' redemption unit price is based on the last traded market price for the
purpose of determining the net asset value per unit for applications and redemptions.
(e) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown as
liabilities on the Balance Sheets.
Payments and receipts relating to the purchase and sale of investment securities are classified as cash flows from
operating activities as movements in the fair value of these securities represent the Funds' main income generating
activity.
- 22 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of Significant Accounting Policies (continued)
(f) Margin Accounts
Margin accounts comprise of cash held for derivative transactions and short sales. The cash is held by the broker and is
only available to meet margin calls. Unrestricted margin account balances and restricted margin accounts balances, where
the derivative transactions’ original maturities are within three months, are classified as cash and cash equivalents.
Restricted margin accounts where the derivative transactions’ original maturities are not within three months are
classified as cash held on collateral.
(g) Investment Income and Expenses
Interest income and expenses are recognised in the Statements of Comprehensive Income for all interest bearing
securities using the effective interest method. Interest income on assets held at fair value through profit or loss is
included in the net gains/(losses) on financial instruments. Other changes in fair value for such instruments are recorded
in accordance with the policies described in Note 2(b).
The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of
allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or
a shorter period where appropriate, to the net carrying amount of the financial asset or liability. When calculating the
effective interest rate, the Funds estimate cash flows, considering all contractual terms of the financial instrument (for
example, prepayment options), but do not consider future credit losses.
The calculation includes all fees and points paid or received between the parties to the contract that are an integral part
of the effective interest rate, transaction costs and all other premiums or discounts.
Dividend income is recognised on the ex-dividend date. The Funds may incur withholding tax imposed by certain countries
on investment income. Such income is recorded net of withholding tax in the Statements of Comprehensive Income. If a
portion of the foreign withholding taxes is reclaimable, it is recorded as an asset.
Trust distributions are recognised on an entitlements basis.
Dividends declared on securities sold short are recorded as a dividend expense on the ex-dividend date.
(h) Expenses
All expenses, including Responsible Entity's fees, are recognised in the Statements of Comprehensive Income on an
accruals basis.
(i) Income Tax
Under current legislation, the Funds are not subject to income tax provided the taxable income of the Funds is distributed
either by way of cash or reinvestment (i.e. unitholders are presently entitled to the income of the Funds).
The benefit of imputation credits and foreign tax paid are passed on to unitholders.
(j) Distributions
In accordance with the Funds' Constitutions, the Funds distribute their distributable (taxable) income, and any other
amounts determined by the Responsible Entity, to unitholders by cash or reinvestment. The distributions are recognised in
the Statements of Comprehensive Income as finance costs attributable to unitholders.
(k) Increase/Decrease in Net Assets Attributable to Unitholders
Non-distributable income is included in net assets attributable to unitholders. Movements in net assets attributable to
unitholders are recognised in the Statements of Comprehensive Income as financing costs.
- 23 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of Significant Accounting Policies (continued)
(l) Foreign Currency Translation
(i) Functional and presentation currency
Items included in the Funds' financial statements are measured using the currency of the primary economic
environment in which it operates (the "functional currency"). This is the Australian Dollar, which reflects the currency
of the economy in which the Funds compete for capital and are regulated. The Australian Dollar is also the Funds'
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translations at year end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the Statements of Comprehensive Income.
The Funds do not isolate that portion of gains or losses on securities and derivative financial instruments which is due
to changes in foreign exchange rates from that which is due to changes in the market price of securities. Such
fluctuations are included with the net gains or losses on financial instruments at fair value through profit or loss.
Non monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at
the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss.
(m) Receivables
Receivables may include amounts for dividends, interest, trust distributions, amounts due from brokers and applications
receivable. Dividends and trust distributions are accrued when the right to receive payment is established. Interest is
accrued at the end of the reporting date from the time of the last payment using the effective interest rate method.
Amounts due from brokers represent receivables for securities that have been contracted for but not yet delivered by the
end of the reporting date. Applications receivable are recorded when the applications are made for units in the Funds
with the consideration yet to be received as at the end of the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written
off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used
when there is objective evidence that the Funds will not be able to collect all amounts due according to the original terms
of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or
financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators
that the trade receivable is impaired. The amount of the impairment allowance is the difference between the asset's
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in the Statements of Comprehensive Income within other expenses. When
a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period,
it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited
against other expenses in the Statements of Comprehensive Income.
(n) Payables
Payables include liabilities and accrued expenses owing by the Funds and redemptions payable which are unpaid as at the
end of the reporting period.
Trades are recorded on trade date, and normally settled within three business days. Purchases of financial instruments
that are unsettled at reporting date are included in payables. Redemptions payable are recognised when the unitholder
returns their holdings back into the Funds, foregoing all rights associated with the units, with the payment yet to be
released.
The distribution amount payable to unitholders as at reporting date is recognised separately on the Balance Sheets when
unitholders are presently entitled to the distributable income under the Funds' Constitution.
- 24 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of Significant Accounting Policies (continued)
(o) Applications and Redemptions
Applications received for units in the Funds are recorded net of any entry fees payable prior to the issue of units in the
Funds. Redemptions from the Funds are recorded gross of any exit fees payable after the cancellation of units redeemed.
Unit redemption prices are determined by reference to the net assets for unit pricing purposes of the Funds, divided by
the number of units on issue at or immediately prior to close of business each day. Applications and redemptions of units
are processed simultaneously.
(p) Goods and Services Tax (GST)
The GST incurred on the costs of various services provided to the Funds by third parties such as custodial services and
investment management fees have been passed onto the Funds. The Funds qualify for Reduced Input Tax Credits (RITC)
hence, investment management fees, custodial fees and other expenses have been recognised in the Statements of
Comprehensive Income net of the amount of GST recoverable from the Australian Taxation Office (ATO). Accounts payable
and accrued expenses are inclusive of GST. The net amount of GST recoverable from the ATO is included in receivables in
the Balance Sheets. Cash flows relating to GST are included in the Statements of Cash Flows on a gross basis.
(q) New Accounting Standards and Interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2014
reporting period and have not been early adopted by the Funds. The directors' assessment of the impact of these new
standards (to the extent relevant to the Funds) and interpretations is set out below:
(i) Amendments made to AASB 124 by AASB 2014-1 (Annual improvements 2010-2012 cycle), which confirm that the Funds
must disclose the fees paid for management personnel services received from a third party such as the responsible
entity, but not the compensation paid by the responsible entity to its employees or directors.
The amendments do not have any impact on the Funds' financial position or performance.
(ii) AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9
and AASB 2010-7 Amendment to Australian Accounting Standards arising from AASB 9 (December 2010) and AASB 20126 Amendments to Australian Accounting Standards - Mandatory Effective Date of AASB 9 and Transition Disclosures
and AASB 2013-9 Amendments to Australian Accounting Standards - Conceptual Framework, Materiality and Financial
Instruments (effective from 1 January 2018)
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and
financial liabilities. It has now also introduced revised rules around hedge accounting. The standard is not applicable
until 1 January 2018 but is available for early adoption.
The derecognition rules have not been changed from the previous requirements, and the Funds do not apply hedge
accounting.
The Funds have not yet decided when to adopt AASB 9. Management does not expect this to have a significant impact
on the recognition and measurement of the Funds' financial instruments as they are carried at fair value through profit
or loss.
There are no other standards that are not yet effective and that are expected to have a material impact on the Funds
in the current or future reporting periods and on foreseeable future transactions.
(r) Use of Estimates
The Funds make estimates and assumptions that affect the reported amounts of assets and liabilities within the next
financial year. Estimates are continually evaluated and based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
For the majority of the Funds' financial instruments, quoted market prices are readily available. However, certain
financial instruments, for example, over-the-counter derivatives or unquoted securities are fair valued using valuation
techniques. Where valuation techniques (for example, pricing models) are used to determine fair values, they are
validated and periodically reviewed by experienced personnel of the Responsible Entity, independent of the area that
created them. Models are calibrated by back-testing to actual transactions to ensure that outputs are reliable.
- 25 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of Significant Accounting Policies (continued)
(r) Use of Estimates (continued)
Models use observable data, to the extent practicable. However, areas such as credit risk (both own and counterparty),
volatilities and correlations require management to make estimates. Changes in assumptions about these factors could
affect the reported fair value of financial instruments.
For certain other financial instruments, including amounts due from/to brokers and payables, the carrying amounts
approximate fair value due to the immediate or short-term nature of these financial instruments.
(s) Rounding of Amounts
The Funds are registered schemes of a kind referred to in Class Order 98/100 (as amended), issued by the Australian
Securities and Investments Commission relating to the ''rounding off'' of amounts in the directors' report and financial
statements. Amounts in the directors' report and financial statements have been rounded to the nearest thousand dollars
in accordance with that Class Order, unless otherwise indicated.
(t) Cash Held on Collateral
Cash held on collateral includes restricted margin accounts where the derivative transactions’ original maturities are not
within three months as well as restricted cash for short sales. Short positions are taken on securities which have relatively
poor return expectations. To facilitate settlement, securities are borrowed with collateral requirements. These
requirements are satisfied with cash and/or other securities. Cash used to satisfy collateral requirements are disclosed in
cash held on collateral.
3 Financial Risk Management
The Funds' activities expose them to a variety of financial risks: credit risk, liquidity risk, and market risk (including price
risk, currency risk and interest rate risk). The Funds' overall risk management program focuses on ensuring compliance
with the Funds' Product Disclosure Statements and seeks to maximise the returns derived for the level of risk to which the
Funds are exposed. The Funds may use derivative financial instruments to moderate and create certain risk exposures.
Financial risk management is carried out by the Investment Risk Management Committee (IRMC) under policies approved
by the Board of Directors of the Responsible Entity ('the Board').
The Funds use different methods to measure different types of risk to which they are exposed. These methods include
Value at Risk ('VaR') analysis in the case of interest rate, foreign exchange and other price risks and ratings analysis for
credit risk. VaR analysis is explained in Note 3(b).
(a) Market Risk
(i) Price Risk
The Funds are exposed to price risk. This arises from investments held by the Funds for which prices in the future are
uncertain. They are classified on the Balance Sheets as fair value through profit or loss. Where non monetary financial
instruments are denominated in currencies other than the Australian Dollar, the price in the future will also fluctuate
because of changes in foreign exchange rates. Note 3(a)(ii) below sets out how this component of price risk is managed and
measured. Investments are classified in the Balance Sheets as at fair value through profit or loss. All securities investments
present a risk of loss of capital. Except for equities sold short and derivative instruments, the maximum risk resulting from
financial instruments is determined by the fair value of the financial instruments. Possible losses from equities sold short
can be unlimited.
Market risk is managed and monitored by the Responsible Entity on a portfolio basis, with risks managed through ensuring
that investment activities are undertaken in accordance with the Funds' investment model which is reviewed and updated
regularly.
The Responsible Entity continuously monitors the Funds' holdings relative to the recommended portfolio, and the exposure
of the Funds are monitored to ensure that it remains within designated ranges or asset allocation constraints, taking into
account any derivative position being used to manage risks.
- 26 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(i) Price Risk (continued)
In addition, the IRMC regularly reviews the Funds to ensure the Funds are following the appropriate investment model, its
portfolio is in accordance with its stated guidelines and restrictions, and the performance of the Funds remains in expected
bounds.
The summarised VaR analysis in Note 3(b) explains how the risk is measured and summarises the potential exposure of the
Funds’ net assets attributable to unitholders.
At the reporting date, the notional principal amounts of derivative financial instruments held by the Funds were as
follows:
BlackRock Wholesale Balanced Fund
30 June 2014
$'000
30 June 2013
$'000
Notional Principal Amount
Asset
Futures - Domestic
Futures - International
Forward foreign
exchange contracts
Swaps - Domestic
Swaps - International
Liability
Fair Value
Net
Notional Principal Amount
Asset
Liability
Fair Value
Net
29,952
13,625
(8,834)
(22,956)
21,118
(9,331)
459
(4)
54,790
-
(89,779)
(37,538)
(34,989)
(37,538)
123,428
104,398
17,607
(123,478)
(104,398)
(17,607)
(50)
-
(50)
(291)
391
117,477
135,630
20,539
(117,604)
(135,630)
(20,539)
(127)
-
1,111
204
(127)
2,655
(2,026)
BlackRock Australian Bond Fund
30 June 2014
$'000
30 June 2013
$'000
Notional Principal Amount
Asset
Futures - Domestic
Futures - International
Forward foreign
exchange contracts
Options - Domestic
Options - International
Swaps - Domestic
Swaps - International
Liability
Fair Value
Net
Notional Principal Amount
Asset
Liability
Fair Value
Net
9,374
3,038
(13,714)
9,374
(10,676)
188
(22)
211,645
-
(154,046)
(6,821)
57,599
(6,821)
(192)
72
13,728
1,805
30,325
722,715
11,858
(13,705)
(5)
(14,789)
(722,715)
(11,858)
23
1,800
15,536
-
23
3
6
262
(13)
1,730
7,519
3,002
9,015
32,225
(1,717)
(6,501)
(9,015)
(32,225)
13
1,018
3,002
-
13
30
8
276
25
- 27 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(ii) Foreign Exchange Risk
BlackRock Wholesale International Bond Fund, BlackRock Wholesale Managed Income Fund and BlackRock Wholesale
Australian Share Fund
The direct investments held by the Funds do not have any direct exposure to foreign exchange risk. This disclosure has not
been made on a look through basis for investments held indirectly through underlying investments. The disclosure of
foreign exchange risk may not present the true foreign exchange risk profile of the Funds where the underlying
investments have significant exposure to foreign exchange risk.
The summarised VaR analysis in Note 3(b) explains how the risk is measured and summarises the potential exposure of the
Funds’ net assets attributable to unitholders.
BlackRock Wholesale Balanced Fund and BlackRock Australian Bond Fund
The Funds hold monetary and non monetary assets denominated in currencies other than the Australian Dollar. The foreign
exchange risk relating to non monetary assets and liabilities is a component of price risk. Foreign exchange risk arises as
the value of monetary securities denominated in other currencies will fluctuate due to changes in exchange rates. The
summarised VaR analysis in Note 3(b) explains how the risk is measured and summarises the potential exposure of the
Funds’ net assets attributable to unitholders.
Foreign exchange risk is managed using forward foreign exchange contracts and other derivatives in accordance with Fund
guidelines and restrictions. Daily monitoring is undertaken to ensure instruments used and exposures created are
consistent with the investment strategies and objectives of the Funds. For accounting purposes, the Funds do not
designate any derivatives as hedges in a hedging relationship, and hence these derivative financial instruments are
classified as at fair value through profit or loss.
This disclosure for the Funds has not been made on a look through basis for investments held indirectly through underlying
funds. The disclosure of foreign exchange risk may not present the true foreign exchange risk profile of the Funds where
the underlying fund has a significant exposure to foreign exchange risk.
- 28 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(ii) Foreign Exchange Risk (continued)
The following tables summarise the Funds' assets and liabilities, monetary and non-monetary, which are denominated in
different currencies.
BlackRock Wholesale Balanced Fund
30 June 2014
Assets
Cash and cash equivalents
Receivables
Financial assets held for trading**
Financial assets designated at fair
value through profit or loss*
Cash held on collateral***
Total assets
United
States
Dollar
A$'000
European
Euro
A$'000
British
Pound
A$'000
Japanese Australian
Other
Yen
Dollar
Currencies
A$'000
A$'000
A$'000
Total
A$'000
1,369
467
-
3
8
46
410
100,259
768
3
1,779
100,267
1,287
58,080
59,916
780
780
212
215
891
945
735,495
433
837,365
207
210
793,575
2,523
899,431
-
-
-
-
57,303
8,302
-
57,303
8,302
6
137
109
-
6
-
10
-
650
350
1
-
782
487
143
109
6
10
66,605
1
66,874
Net assets
59,773
671
209
935
770,760
209
832,557
Increase/(decrease) in exposure
from currency derivatives
(3,161)
6,521
4,079
4,059
(15,073)
3,575
-
Total foreign currency exposure
56,612
7,192
4,288
4,994
755,687
3,784
832,557
Liabilities
Distribution payable
Payables
Financial liabilities held for
trading**
Cash held on collateral***
Total liabilities (excluding net
assets attributable to unitholders)
* Includes unit trust holdings.
** Includes derivatives, forward foreign exchange contracts which have been classified as Australian Dollar exposure in
the above analysis.
*** Where margin calls on margin accounts and cash held on collateral can only be made to counterparties in Australian
Dollar, the balances are disclosed separately in the currency exposure tables and are aggregated in the Balance Sheet.
- 29 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(ii) Foreign Exchange Risk (continued)
BlackRock Wholesale Balanced Fund
30 June 2013
Assets
Cash and cash equivalents
Receivables
Financial assets held for trading**
Financial assets designated at fair
value through profit or loss*
Cash held on collateral***
Total assets
Liabilities
Distribution payable
Payables
Financial liabilities held for
trading**
Cash held on collateral***
Total liabilities (excluding net
assets attributable to unitholders)
Net assets
United
States
Dollar
A$'000
European
Euro
A$'000
British
Pound
A$'000
Japanese
Yen
A$'000
Australian
Other
Dollar
Currencies
A$'000
A$'000
Total
A$'000
46
408
88
44
5
12,615
36,185
3,878
-
12,661
36,185
4,423
28,460
28,914
128
216
44
1,288
1,293
850,536
10,393
913,607
-
878,996
11,809
944,074
-
-
-
-
77,296
733
-
77,296
733
2,430
1,259
1
-
2
24
2
-
171
-
-
2,606
1,283
3,689
1
26
2
78,200
-
81,918
25,225
215
18
1,291
835,407
-
862,156
Increase/(decrease) in exposure
from currency derivatives
(17,813)
2,759
1,386
1,266
12,402
-
-
Total foreign currency exposure
7,412
2,974
1,404
2,557
847,809
-
862,156
* Includes unit trust holdings.
** Includes derivatives, forward foreign exchange contracts which have been classified as Australian Dollar exposure in
the above analysis.
*** Where margin calls on margin accounts and cash held on collateral can only be made to counterparties in Australian
Dollar, the balances are disclosed separately in the currency exposure tables and are aggregated in the Balance Sheet.
- 30 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(ii) Foreign Exchange Risk (continued)
BlackRock Australian Bond Fund
30 June 2014
Assets
Cash and cash equivalents
Receivables
Financial assets held for trading**
Financial assets designated at fair
value through profit or loss*
Total assets
Liabilities
Bank overdraft
Margin accounts***
Distribution payable
Payables
Financial liabilities held for
trading**
Total liabilities (excluding net
assets attributable to unitholders)
Net assets
Increase/(decrease) in exposure
from currency derivatives
Total foreign currency exposure
United
States
Dollar
A$'000
European
Euro
A$'000
British
Pound
A$'000
Japanese Australian
Other
Yen
Dollar
Currencies
A$'000
A$'000
A$'000
Total
A$'000
84
80
-
-
-
198
7,888
489
4
2,961
8
286
10,849
577
2,911
3,075
-
-
-
118,344
126,919
1,336
4,309
122,591
134,303
-
-
24
-
15
-
2,248
8,262
1
-
1
39
2,248
8,262
97
-
6
2
11
14
130
97
-
30
17
10,521
15
10,680
2,978
-
(30)
(17)
116,398
4,294
123,623
(2,917)
-
(1)
7,240
(4,322)
-
(18)
123,638
(28)
123,623
61
-
-
(30)
* Includes unit trust holdings and interest bearing securities.
** Includes derivatives, forward foreign exchange contracts which have been classified as Australian Dollar exposure in
the above analysis.
*** Where margin calls on margin accounts and cash held on collateral can only be made to counterparties in Australian
Dollar, the balances are disclosed separately in the currency exposure tables and are aggregated in the Balance Sheet.
- 31 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(ii) Foreign Exchange Risk (continued)
BlackRock Australian Bond Fund
30 June 2013
Assets
Cash and cash equivalents
Receivables
Financial assets held for trading**
Financial assets designated at fair
value through profit or loss*
Cash held on collateral***
Total assets
United
States
Dollar
A$'000
European
Euro
A$'000
British
Pound
A$'000
Japanese
Yen
A$'000
Australian
Other
Dollar
Currencies
A$'000
A$'000
Total
A$'000
47
107
-
8
3
30
1,737
863
110
77
1,737
1,091
23
177
8
8
8
3
86,309
646
89,585
4
114
86,309
681
89,895
-
-
-
8
-
4,070
2
-
8
4,070
2
24
-
-
-
750
85
859
24
-
-
8
4,822
85
4,939
Net assets
153
8
8
(5)
84,763
29
84,956
Increase/(decrease) in exposure
from currency derivatives
141
(425)
(500)
-
300
484
-
Total foreign currency exposure
294
(417)
(492)
(5)
85,063
513
84,956
Liabilities
Bank overdraft
Margin accounts***
Distribution payable
Payables
Financial liabilities held for
trading**
Total liabilities (excluding net
assets attributable to unitholders)
* Includes unit trust holdings and interest bearing securities.
** Includes derivatives, forward foreign exchange contracts which have been classified as Australian Dollar exposure in
the above analysis.
*** Where margin calls on margin accounts and cash held on collateral can only be made to counterparties in Australian
Dollar, the balances are disclosed separately in the currency exposure tables and are aggregated in the Balance Sheet.
- 32 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(iii) Interest Rate Risk
The Funds' interest bearing financial assets and liabilities expose them to risks associated with the effects of fluctuations
in the prevailing levels of market interest rates on their financial position and cash flows.
The Funds are exposed to cash flow interest rate risk on financial instruments with variable interest rates. Financial
instruments with fixed rates expose the Funds to fair value interest rate risk.
Interest rate risk is mitigated through ensuring activities are transacted in accordance with mandates, overall investment
strategy and within approved limits. The summarised VaR analysis in Note 3(b) explains how the risk is measured and
summarises the potential exposure of the Funds' net assets attributable to unitholders.
The disclosure for the Funds has not been made on a look through basis for investments held indirectly through the
underlying funds. The disclosure of interest rate risk may not present the true interest rate risk profile of the Funds where
the underlying fund has significant exposure to interest rate risk.
The following tables summarise the Funds' exposure to interest rate risks. They include the Funds' assets and liabilities at
fair values.
BlackRock Wholesale Balanced Fund
30 June 2014
Floating
interest rate
$'000
Fixed
interest rate
$'000
1,779
-
-
100,267
1,779
100,267
-
-
584
312
391
584
312
391
2,478
4,257
-
793,575
895,129
793,575
2,478
899,386
-
-
57,303
8,302
57,303
8,302
442
-
129
362
291
-
129
362
291
442
442
-
66,387
66,829
-
-
832,557
832,557
Financial assets
Cash and cash equivalents
Receivables
Financial assets held for trading
Futures
Forward foreign exchange contracts
Swaps
Financial assets designated at fair value through profit
or loss
Units in related schemes
Cash held on collateral
Total assets
Financial liabilities
Distribution payable
Payables
Financial liabilities held for trading
Futures
Forward foreign exchange contracts
Swaps
Cash held on collateral
Total liabilities (excluding net assets attributable to
unitholders)
Net assets attributable to unitholders - liability
- 33 -
Non interest
bearing
$'000
Total
$'000
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(iii) Interest Rate Risk (continued)
BlackRock Wholesale Balanced Fund
30 June 2013
Floating
interest rate
$'000
Financial assets
Cash and cash equivalents
Receivables
Financial assets held for trading
Futures
Forward foreign exchange contracts
Swaps
Financial assets designated at fair value through profit
or loss
Units in related schemes
Cash held on collateral
Total assets
Financial liabilities
Distribution payable
Payables
Financial liabilities held for trading
Futures
Forward foreign exchange contracts
Swaps
Cash held on collateral
Total liabilities (excluding net assets attributable to
unitholders)
Net assets attributable to unitholders - liability
Fixed
interest rate
$'000
Non interest
bearing
$'000
Total
$'000
12,661
-
-
36,185
12,661
36,185
2,655
-
1,405
363
-
1,405
363
2,655
10,526
25,842
-
878,996
916,949
878,996
10,526
942,791
-
-
77,296
733
77,296
733
2,026
-
-
90
490
-
90
490
2,026
-
2,026
-
78,609
80,635
-
-
862,156
862,156
BlackRock Wholesale International Bond Fund
The Fund's exposure to cash flow interest rate risk is limited to its cash and cash equivalents which are floating rate
interest bearing investments. As at 30 June 2014 the total investment in cash accounts of the Fund was $110,008 (2013:
Nil).
Interest rate risk is mitigated through ensuring activities are transacted in accordance with mandates, overall investment
strategy and within approved limits. The summarised VaR analysis in Note 3(b) explains how the risk is measured and
summarises the potential exposure of the Fund's net assets attributable to unitholders.
The disclosure for the Fund has not been made on a look through basis for investments held indirectly through the
underlying funds. The disclosure of interest rate risk may not present the true interest rate risk profile of the Fund where
the underlying fund has significant exposure to interest rate risk.
- 34 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(iii) Interest Rate Risk (continued)
BlackRock Wholesale Managed Income Fund
30 June 2014
Floating
interest rate
$'000
Fixed
interest rate
$'000
20
-
-
544
20
544
20
-
37,080
37,624
37,080
37,644
-
-
466
301
466
301
-
-
767
767
-
-
36,877
36,877
Financial assets
Cash and cash equivalents
Receivables
Financial assets designated at fair value through profit
or loss
Units in related schemes
Interest bearing securities
Total assets
Financial liabilities
Bank overdraft
Distribution payable
Payables
Total liabilities (excluding net assets attributable to
unitholders)
Net assets attributable to unitholders - liability
30 June 2013
Floating
interest rate
$'000
Financial assets
Cash and cash equivalents
Receivables
Financial assets designated at fair value through profit
or loss
Units in related schemes
Interest bearing securities
Total assets
Financial liabilities
Distribution payable
Payables
Total liabilities (excluding net assets attributable to
unitholders)
Net assets attributable to unitholders - liability
- 35 -
Fixed
interest rate
$'000
Non interest
bearing
$'000
Non interest
bearing
$'000
Total
$'000
Total
$'000
532
-
-
824
532
824
532
1,543
1,543
40,579
41,403
40,579
1,543
43,478
-
-
1,313
29
1,313
29
-
-
1,342
1,342
-
-
42,136
42,136
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(iii) Interest Rate Risk (continued)
BlackRock Wholesale Australian Share Fund
The Fund's exposure to cash flow interest rate risk is limited to its cash and cash equivalents which are floating rate
interest bearing investments. As at 30 June 2014 the total investment in cash accounts of the Fund was $409,041 (2013:
$28,875,844).
Interest rate risk is mitigated through ensuring activities are transacted in accordance with mandates, overall investment
strategy and within approved limits. The summarised VaR analysis in Note 3(b) explains how the risk is measured and
summarises the potential exposure of the Fund's net assets attributable to unitholders.
The disclosure for the Fund has not been made on a look through basis for investments held indirectly through the
underlying funds. The disclosure of interest rate risk may not present the true interest rate risk profile of the Fund where
the underlying fund has significant exposure to interest rate risk.
BlackRock Australian Bond Fund
30 June 2014
Floating
interest rate
$'000
Fixed
interest rate
$'000
247
-
-
10,849
247
10,849
8
264
199
33
73
-
199
33
73
272
3,006
3,261
25,112
25,376
94,473
105,627
94,473
28,118
134,264
1
-
-
2,248
8,262
1
2,248
8,262
-
23
33
10
64
-
33
10
64
23
1
23
10,617
10,641
9,143
-
-
-
123,623
123,623
Financial assets
Cash and cash equivalents
Receivables
Financial assets held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Financial assets designated at fair value through profit
or loss
Units in related schemes
Interest bearing securities
Total assets
Financial liabilities
Bank overdraft
Distribution payable
Payables
Financial liabilities held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total liabilities (excluding net assets attributable to
unitholders)
Buy/(sell) notional exposure to interest rate swaps
(9,143)
-
Net assets attributable to unitholders - liability
- 36 -
Non interest
bearing
$'000
Total
$'000
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(a) Market Risk (continued)
(iii) Interest Rate Risk (continued)
BlackRock Australian Bond Fund
30 June 2013
Floating
interest rate
$'000
Financial assets
Cash and cash equivalents
Receivables
Financial assets held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Financial assets designated at fair value through profit
or loss
Units in related schemes
Interest bearing securities
Cash held on collateral
Total assets
Financial liabilities
Distribution payable
Payables
Financial liabilities held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total liabilities (excluding net assets attributable to
unitholders)
Buy/(sell) notional exposure to interest rate swaps
Fixed
interest rate
$'000
Total
$'000
69
-
-
1,737
69
1,737
143
267
128
13
540
-
128
13
540
410
1,950
681
2,843
8,555
8,822
75,804
78,222
75,804
10,505
681
89,887
-
-
4,070
2
4,070
2
85
24
248
502
-
248
502
109
85
24
4,822
4,931
11,515
-
-
-
84,956
84,956
(11,515)
-
Net assets attributable to unitholders - liability
Non interest
bearing
$'000
The Responsible Entity uses interest rate swaps as part of the overall investment strategy and to manage the Fund within
its limits. The gross notional value of these swaps at 30 June 2014 was $14,573,000 (30 June 2013: $35,187,202) resulting in
an asset at fair value on the Balance Sheet of $243,377 (30 June 2013: an asset of $300,136). The Fund can hold a variety
of swaps including interest rate swaps. The exposure figures above do not reflect the impact of these swaps.
(b) Summarised VaR Analysis
Value at Risk (VaR) is a risk model used to estimate the potential losses that could occur on the Funds' net asset value
position due to movements in interest rates, currency and market prices over a given period and for a specified degree of
confidence.
- 37 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(b) Summarised VaR Analysis (continued)
BlackRock uses VaR analysis and/or tracking error estimates to measure and manage risk as these are commonly used and
understood models, are easily interpreted and are consistent across different types, asset classes and types of funds. For
the purpose of these accounts VaR analysis has been presented. The objective in all cases is to estimate potential losses
and manage the downside risk.
The following tables summarise the outputs of the VaR model in relation to interest rate, currency and price risk
exposures. The total VaR figures are not the sum of individual risk components as this does not include correlations
between different risk factors.
BlackRock calculates the VaR relative to the Funds' benchmarks. The analysis implies that the Manager can be 95%
confident that the value of the portfolio will not decrease by any more than the figures in the table below relative to a
portfolio of the same value as the Funds' portfolios which replicates the composition of the benchmark over the 5 day
period from 30 June.
BlackRock Wholesale Balanced Fund
2014
$'000^
Total Portfolio Risk
2013
%
12,072
$'000^
1.45
%
2,845
0.33
BlackRock Wholesale International Bond Fund
2014
$'000^
2013
%
357
Total Portfolio Risk
$'000^
0.56
%
139
0.24
BlackRock Wholesale Managed Income Fund
2014
$'000^
2013
%
254
Total Portfolio Risk
$'000^
0.69
%
147
0.35
BlackRock Wholesale Australian Share Fund
2014
$'000^
2013
%
3,657
Total Portfolio Risk
$'000^
2.00
%
1,143
0.53
BlackRock Australian Bond Fund
2014
$'000^
927
Total Portfolio Risk
2013
%
$'000^
0.75
^ VaR has been calculated on Net Assets Attributable to Unitholders before rounding.
- 38 -
%
93
0.11
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(b) Summarised VaR Analysis (continued)
Detailed information about the models
There are a number of different VaR models used within the Funds Management industry. BlackRock uses one or more of
ex-ante and ex-post estimates of portfolio risk and the Monte Carlo simulation model depending on the fund type. Models
are calculated using historical data and a covariance matrix where applicable.
The models used by BlackRock have the following features:
!
VaR is calculated to a 95 per cent confidence level. VaR at a confidence level identifies the maximum expected loss
under that confidence level;
!
VaR is calculated for a 5 day holding period. The time horizon of five days is selected to coincide with the period used
to analyse the portfolio positions. The risk data is examined in various daily, weekly and monthly forums; and
!
The portfolio VaR is not the simple sum of individual asset stand alone VaRs; the correlations among assets in the
portfolio are considered.
Although VaR is a valuable risk management tool it should be interpreted, as with all predictive models, with consideration
to its assumptions and limitations. The main assumptions and limitations are listed below:
!
Some modelling assumes certain financial variables are normally distributed: The normality assumption allows
BlackRock to scale portfolio risk estimates to the appropriate confidence levels. The normality assumption is derived
from statistical analysis for examining sample populations of observations and the implications of not assuming
normality would preclude the use of most statistical tools including mainstream commercial models for risk
measurement.
!
The use of historical returns and correlations between assets would not take into account future potential events: It is
a commonly stated and well-recognised limitation that past performance is not a reliable indicator of future
performance.
!
Model risk, in general terms, is a known limitation that includes: the quality or accuracy of the underlying data, where
significant events occur within the data, the changing sensitivity of the Funds' assets to external market factors over
time, and appreciating that using only one model may be limiting in itself to obtaining the best understanding of a
Funds’ risk position.
BlackRock acknowledges these limitations and thus compares ex-ante and ex-post risk estimates to review expectations
versus actual outcomes. Should ex-post values differ significantly from ex-ante returns, an assessment of the reasons for
this will be made.
The Funds’ risk is managed with constant review of both performance and risk numbers by the investment professionals
within the business. These reviews consist of:
!
Weekly meetings between the global members of Risk & Quantitative Analysis (RQA). These meetings include RQA
Australia.
!
Monthly meetings between RQA and the Fund Managers.
!
Monthly meetings between RQA and the Chief Investment Officer.
!
Ad hoc presentations to the Investment Risk Management Committee (IRMC) to keep IRMC abreast of RQA processes
and latest updates.
!
Daily report of performance figures along with a comparison of ex-ante versus ex-post returns sent to RQA London.
!
RQA professionals sitting and working closely with the Fund Managers every day.
- 39 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(c) Credit Risk Exposure
Credit risk is the risk that a counterparty will fail to perform contractual obligations, either in whole or in part, when
they fall due.
Credit risk primarily arises from the Funds' investment in debt instruments and from trading derivative products. Other
credit risk arises from cash and cash equivalents, deposits with banks and other financial institutions, amounts due from
brokers and other receivables. None of these assets are impaired nor past due but not impaired.
Market prices generally incorporate credit risk assessments into valuations and risk of loss is implicitly provided for in the
carrying value of financial assets and liabilities as they are marked to market.
(i) Interest Bearing Securities
The Funds invest in interest bearing securities which have credit ratings by well-known rating agencies. For unrated
interest bearing securities a rating is assigned by the Responsible Entity using an approach that is consistent with the
approach used by rating agencies.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets. None of the
financial assets are impaired nor past due but not impaired. An analysis of the directly held interest bearing securities by
rating is set out in the tables below:
BlackRock Wholesale Managed Income Fund
30 June
2014
% Portfolio
Rating
30 June
2013
% Portfolio
-
AA
Total
100.00
100.00
BlackRock Australian Bond Fund
30 June
2014
% Portfolio
Rating
44.74
42.74
1.83
5.40
5.29
100.00
AAA
AA+
AAA+
ANon-rated
Total
30 June
2013
% Portfolio
28.85
52.58
4.78
13.78
0.01
100.00
(ii) Derivatives
All exchange traded derivatives are executed through brokers, and cleared through a clearing broker and approved by the
IRMC. Over the counter derivative transactions are conducted only with approved counterparties, who meet the
applicable specific Funds' requirements and where trading documentation is in place.
To minimise credit risk, the Funds only transact with counterparties of investment grade quality (BBB- or above as rated
by Standard & Poor’s). BlackRock has a process in place to assess the creditworthiness of counterparties and assess that
the risk is evenly distributed. Matters arising in relation to counterparties are reviewed regularly by the IRMC.
- 40 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(c) Credit Risk Exposure (continued)
(iii) Settlement of Securities Transactions
All transactions 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.
(iv) Other Credit Risk
The exposure to credit risk for cash and cash equivalents, deposits with banks and other financial institutions is
considered to be minimal due to the high credit rating of the relevant financial institution. VaR analysis is also used to
manage and measure the credit risk of the Funds.
The Funds are not materially exposed to credit risk on other financial assets.
The maximum exposure to credit risk at the reporting date is the carrying amount of cash and cash equivalents and other
financial assets. None of these assets are impaired nor past due but not impaired.
The clearing and depository operations for the Funds' security transactions are mainly concentrated with one
counterparty, namely JP Morgan Chase Bank NA ('J.P. Morgan'). J.P. Morgan is a member of a major securities exchange,
and at 30 June 2014 had a credit rating of A-1 (2013: A-1). At 30 June 2014, substantially all cash and cash equivalents,
balances due from brokers and investments are held in custody by J.P. Morgan.
(d) Liquidity and Cash Flow Risk
Liquidity risk is the risk that the Funds may not be able to generate sufficient cash resources to settle their obligations in
full as they fall due or can only do so on terms that are materially disadvantageous.
The Funds are exposed to daily cash redemptions of redeemable units and daily margin calls on derivatives. The liquidity
risks associated with the need to satisfy unitholders’ requests for redemptions are mitigated by maintaining adequate
liquidity to satisfy usual redemption volumes and restricting the investment activities of the Funds to securities that are
actively traded and highly liquid. The Funds also maintain continuous monitoring of forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities. The Responsible Entity considers and maintains the
liquidity of the Funds, in the context of the investment objectives and liquidity requirements of the Funds. Operational
procedures are in place to review margin requirements on futures contracts. IRMC reviews liquidity reports to ensure the
Funds have sufficient liquidity to pay client redemptions and meet margin calls as required.
- 41 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(d) Liquidity and Cash Flow Risk (continued)
The following tables analyse the Funds’ financial assets and financial liabilities and derivative financial instruments (as
appropriate) into relevant maturity groupings based on the remaining period at the reporting date to the contractual
maturity date. The amounts in the tables are contractual undiscounted cash flows.
BlackRock Wholesale Balanced Fund
At 30 June 2014
Assets
Cash and cash equivalents
Receivables
Financial assets held for
trading
Inflows
Outflows
Financial assets designated
at fair value through profit
or loss
Cash held on collateral
Total assets
Liabilities
Distribution payable
Payables
Financial liabilities held for
trading
Inflows
Outflows
Cash held on collateral
Net assets attributable to
unitholders
Total liabilities
Net total
Less than 1
month
$'000
1-3 months
$'000
3-6 months
$'000
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
1,779
100,231
36
-
-
-
-
49,219
(48,906)
975
(1)
-
-
-
-
793,575
895,898
2,478
3,488
-
-
-
-
(57,303)
(6,851)
(1,451)
-
-
-
-
74,209
(74,571)
-
(420)
(442)
-
-
-
-
(832,557)
(897,073)
(2,313)
-
-
-
-
1,175
-
-
-
-
(1,175)
- 42 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(d) Liquidity and Cash Flow Risk (continued)
BlackRock Wholesale Balanced Fund
At 30 June 2013
Assets
Cash and cash equivalents
Receivables
Financial assets held for
trading
Inflows
Outflows
Financial assets designated
at fair value through profit
or loss
Cash held on collateral
Total assets
Liabilities
Distribution payable
Payables
Financial liabilities held for
trading
Inflow
Outflow
Net assets attributable to
unitholders
Total liabilities
Net total
Less than 1
month
$'000
12,661
36,163
39,750
(39,386)
878,996
928,184
1-3 months
$'000
3-6 months
$'000
22
4,154
(95)
10,526
14,607
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(77,296)
-
(733)
77,728
(78,220)
(88)
(2,026)
-
-
-
(862,156)
(939,944)
(821)
(2,026)
-
-
-
(2,026)
-
-
-
(11,760)
13,786
The Responsible Entity uses total return swaps as part of the overall investment strategy and to manage the Fund within
its limits. The gross notional value of these swaps at 30 June 2014 was $122,005,059 (30 June 2013: $156,169,006),
resulting in an asset at fair value on the Balance Sheet of $99,896 (30 June 2013: an asset of $628,146).
- 43 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(d) Liquidity and Cash Flow Risk (continued)
BlackRock Wholesale International Bond Fund
At 30 June 2014
Assets
Cash and cash equivalents
Receivables
Financial assets designated
at fair value through profit
or loss
Total assets
Liabilities
Distribution payable
Payables
Net assets attributable to
unitholders
Total liabilities
Net total
At 30 June 2013
Assets
Cash and cash equivalents
Receivables
Financial assets designated
at fair value through profit
or loss
Total assets
Liabilities
Distribution payable
Payables
Net assets attributable to
unitholders
Total liabilities
Net total
Less than 1
month
$'000
1-3 months
$'000
3-6 months
$'000
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
110
387
-
-
-
-
-
63,433
63,930
-
-
-
-
-
(32)
(51)
(59)
-
-
-
-
(63,788)
(63,871)
(59)
-
-
-
-
(59)
-
-
-
-
59
Less than 1
month
$'000
1-3 months
$'000
3-6 months
$'000
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
5,899
-
-
-
-
-
57,806
63,705
-
-
-
-
-
(5,786)
-
(30)
-
-
-
-
(57,889)
(63,675)
(30)
-
-
-
-
(30)
-
-
-
-
30
- 44 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(d) Liquidity and Cash Flow Risk (continued)
BlackRock Wholesale Managed Income Fund
At 30 June 2014
Assets
Cash and cash equivalents
Receivables
Financial assets designated
at fair value through profit
or loss
Total assets
Liabilities
Bank overdraft
Distribution payable
Payables
Net assets attributable to
unitholders
Total liabilities
Net total
At 30 June 2013
Assets
Cash and cash equivalents
Receivables
Financial assets designated
at fair value through profit
or loss
Total assets
Liabilities
Bank overdraft
Distribution payable
Payables
Net assets attributable to
unitholders
Total liabilities
Net total
Less than 1
month
$'000
1-3 months
$'000
3-6 months
$'000
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
20
541
3
-
-
-
-
37,080
37,641
3
-
-
-
-
(466)
(249)
(52)
-
-
-
-
(36,877)
(37,592)
(52)
-
-
-
-
(49)
-
-
-
-
49
Less than 1
month
$'000
1-3 months
$'000
3-6 months
$'000
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
532
824
-
-
-
-
-
42,122
43,478
-
-
-
-
-
(1,313)
-
(29)
-
-
-
-
(42,136)
(43,449)
(29)
-
-
-
-
(29)
-
-
-
-
29
- 45 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(d) Liquidity and Cash Flow Risk (continued)
BlackRock Wholesale Australian Share Fund
At 30 June 2014
Assets
Cash and cash equivalents
Receivables
Financial assets designated
at fair value through profit
or loss
Total assets
Liabilities
Distribution payable
Payables
Net assets attributable to
unitholders
Total liabilities
Net total
At 30 June 2013
Assets
Cash and cash equivalents
Receivables
Financial assets designated
at fair value through profit
or loss
Total assets
Liabilities
Distribution payable
Payables
Net assets attributable to
unitholders
Total liabilities
Net total
Less than 1
month
$'000
1-3 months
$'000
3-6 months
$'000
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
409
45,770
8
-
-
-
-
168,753
214,932
8
-
-
-
-
(30,784)
(931)
(353)
-
-
-
-
(182,872)
(214,587)
(353)
-
-
-
-
(345)
-
-
-
-
345
Less than 1
month
$'000
1-3 months
$'000
3-6 months
$'000
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
28,876
22,345
5
-
-
-
-
203,653
254,874
5
-
-
-
-
(38,936)
-
(201)
-
-
-
-
(215,742)
(254,678)
(201)
-
-
-
-
(196)
-
-
-
-
196
- 46 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(d) Liquidity and Cash Flow Risk (continued)
BlackRock Australian Bond Fund
At 30 June 2014
Assets
Cash and cash equivalents
Receivables
Financial assets held for
trading
Inflows
Outflows
Financial assets designated
at fair value through profit
or loss
Total assets
Liabilities
Bank overdraft
Distribution payable
Payables
Financial liabilities held for
trading
Inflows
Outflows
Net assets attributable to
unitholders
Total liabilities
Net total
Less than 1
month
$'000
1-3 months
$'000
3-6 months
$'000
27
10,840
220
9
10,494
(10,456)
266
(1)
94,473
105,378
494
6-12 months
$'000
-
1,523
(1,259)
1-3 years
$'000
3+ years
$'000
-
-
1
(1)
4
(3)
52
(43)
264
988
988
506
507
26,624
26,633
-
(1)
(2,248)
(8,261)
(1)
-
-
-
3,239
(3,251)
1,071
(1,188)
-
-
(1)
(123,623)
(134,145)
(118)
-
-
(1)
(28,767)
376
264
988
- 47 -
-
506
10
(10)
26,633
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(d) Liquidity and Cash Flow Risk (continued)
BlackRock Australian Bond Fund
At 30 June 2013
Assets
Cash and cash equivalents
Receivables
Financial assets held for
trading
Inflows
Outflows
Financial assets designated
at fair value through profit
or loss
Cash held on collateral
Total assets
Less than 1
month
$'000
1-3 months
$'000
69
1,731
3-6 months
$'000
6-12 months
$'000
1-3 years
$'000
3+ years
$'000
6
-
-
-
1,940
(1,416)
103
-
25
-
29
-
75,804
78,128
681
790
25
29
1,461
1,495
9,044
9,420
-
-
-
-
-
554
(520)
-
4,519
(4,143)
Liabilities
Bank overdraft
Distribution payable
Payables
Financial liabilities held for
trading
Inflow
Outflow
Net assets attributable to
unitholders
Total liabilities
300
(300)
(750)
-
-
558
(643)
3,026
(3,050)
(84,956)
(89,028)
(750)
-
-
(85)
(24)
Net total
(10,900)
40
25
29
(4,070)
(2)
1,410
9,396
The Responsible Entity uses credit default swaps as part of the overall investment strategy and to manage the Fund
within its limits. There were no credit default swaps held by the Fund at 30 June 2014. The gross notional value was Nil
(30 June 2013: $6,052,330), resulting in a Nil fair value on the Balance Sheet (30 June 2013: an asset of $722).
The Responsible Entity uses index swaps as part of the overall investment strategy and to manage the Fund within its
limits. The gross notional value of these swaps at 30 June 2014 was $720,000,000 (30 June 2013: Nil), resulting in an asset
at fair value on the Balance Sheet of $5,962 (30 June 2013: Nil).
(e) Fair Values of Financial Assets and Liabilities
The carrying amounts of the Funds' assets and liabilities at the end of each reporting period approximate their fair values.
Financial assets and liabilities held at fair value through profit or loss are measured initially at fair value. Transaction
costs on financial assets and financial liabilities at fair value through profit or loss are expensed immediately. Subsequent
to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with changes in
their fair value recognised in the Statements of Comprehensive Income.
The carrying value less impairment provision of other receivables and payables are assumed to approximate their fair
value. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the Funds for similar financial instruments.
- 48 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(e) Fair Values of Financial Assets and Liabilities (continued)
(i) Fair value in an active market
The fair value of financial assets and liabilities traded in active markets is based on their last traded prices at the end of
the reporting period without any deduction for estimated future selling costs.
The Funds value their investments in accordance with the accounting policies set out in Note 2(b). For the majority of
their investments, the Funds rely on information provided by independent pricing services for the valuation of its
investments.
Prior to 1 July 2013, the quoted market price used for financial assets held by the Funds was the current bid price and
the quoted market price for financial liabilities was the current ask price. The Funds have adopted AASB 13 from 1 July
2013 and changed their fair valuation input to utilise the last traded market prices for both financial assets and financial
liabilities. Where the last traded price does not fall within the bid-ask spread, an assessment is performed by the
Responsible Entity to determine the appropriate valuation price to use that is most representative of fair value.
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
regularly occurring market transactions on an arm’s length basis.
(ii) Fair value in an inactive or unquoted market
The fair value of financial assets and liabilities that are not traded in an active market is determined using valuation
techniques. These include the use of recent arm's length market transactions, reference to the current fair value of a
substantially similar other instrument, discounted cash flow techniques, option pricing models or any other valuation
technique that provides a reliable estimate of prices obtained in actual market transactions.
Where discounted cash flow techniques are used, estimated future cash flows are based on management's best estimates
and the discount rate used is a market rate at the end of the reporting period applicable for an instrument with similar
terms and conditions.
For other pricing models, inputs are based on market data at the end of the reporting period. Fair values for unquoted
equity investments are estimated, if possible, using applicable price/earnings ratios for similar listed companies adjusted
to reflect the specific circumstances of the issuer.
The fair value of derivatives that are not exchange traded is estimated at the amount that the Funds would receive or
pay to terminate the contract at the end of the reporting period taking into account current market conditions (volatility
and appropriate yield curve) and the current creditworthiness of the counterparties. The fair value of a forward foreign
exchange contract is determined as a net present value of estimated future cash flows, discounted at appropriate market
rates as at the valuation date.
Investments in other unlisted unit trusts are recorded at the net asset value per unit as reported by the Responsible
Entity of such funds.
(f) Fair Value Hierarchy
The Funds classify fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used in
making the measurements. The fair value hierarchy has the following levels:
!
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
!
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices) (level 2).
!
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
- 49 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(f) Fair Value Hierarchy (continued)
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
judgment, considering factors specific to the asset or liability.
The determination of what constitutes 'observable' requires significant judgment by the Responsible Entity. The
Responsible Entity 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 tables present the Funds' financial assets and liabilities (by class) measured at fair value according to the fair
value hierarchy at 30 June 2014 and 30 June 2013.
BlackRock Wholesale Balanced Fund
At 30 June 2014
Level 1
$'000
Financial assets
Financial assets held for trading
Futures
Forward foreign exchange contracts
Swaps
Financial assets designated at fair value through profit
or loss
Units in related schemes
Total
Financial liabilities
Financial liabilities held for trading
Futures
Forward foreign exchange contracts
Swaps
Total
- 50 -
Level 2
$'000
Level 3
$'000
Total
$'000
584
-
312
391
-
584
312
391
584
793,575
794,278
-
793,575
794,862
129
129
362
291
653
-
129
362
291
782
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(f) Fair Value Hierarchy (continued)
BlackRock Wholesale Balanced Fund
At 30 June 2013
Level 1
$'000
Financial assets
Financial assets held for trading
Futures
Forward foreign exchange contracts
Swaps
Financial assets designated at fair value through profit
or loss
Units in related schemes
Total
Level 2
$'000
Level 3
$'000
Total
$'000
1,405
-
363
2,655
-
1,405
363
2,655
1,405
878,996
882,014
-
878,996
883,419
90
90
490
2,026
2,516
-
90
490
2,026
2,606
Financial liabilities
Financial liabilities held for trading
Futures
Forward foreign exchange contracts
Swaps
Total
BlackRock Wholesale International Bond Fund
At 30 June 2014
Level 1
$'000
Financial assets
Financial assets designated at fair value through profit
or loss
Units in related schemes
Total
At 30 June 2013
Level 2
$'000
Level 1
$'000
Financial assets
Financial assets designated at fair value through profit
or loss
Units in related schemes
Total
- 51 -
63,433
63,433
Level 2
$'000
-
Level 3
$'000
57,806
57,806
Total
$'000
Level 3
$'000
63,433
63,433
Total
$'000
-
57,806
57,806
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(f) Fair Value Hierarchy (continued)
BlackRock Wholesale Managed Income Fund
At 30 June 2014
Level 1
$'000
Financial assets
Financial assets designated at fair value through profit
or loss
Units in related schemes
Total
At 30 June 2013
Level 2
$'000
Level 1
$'000
Financial assets
Financial assets designated at fair value through profit
or loss
Units in related schemes
Interest bearing securities
Total
37,080
37,080
Level 2
$'000
-
Level 3
$'000
Total
$'000
Level 3
$'000
40,579
1,543
42,122
37,080
37,080
Total
$'000
-
40,579
1,543
42,122
BlackRock Wholesale Australian Share Fund
At 30 June 2014
Level 1
$'000
Financial assets
Financial assets designated at fair value through profit
or loss
Units in related schemes
Total
At 30 June 2013
Level 2
$'000
Level 1
$'000
Financial assets
Financial assets designated at fair value through profit
or loss
Units in related schemes
Total
- 52 -
168,753
168,753
Level 2
$'000
-
Level 3
$'000
203,653
203,653
Total
$'000
Level 3
$'000
168,753
168,753
Total
$'000
-
203,653
203,653
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(f) Fair Value Hierarchy (continued)
BlackRock Australian Bond Fund
At 30 June 2014
Level 1
$'000
Financial assets
Financial assets held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Financial assets designated at fair value through profit
or loss
Units in related schemes
Interest bearing securities
Total
Financial liabilities
Financial liabilities held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total
- 53 -
Level 2
$'000
Level 3
$'000
Total
$'000
199
-
33
73
272
-
199
33
73
272
199
94,473
28,118
122,969
-
94,473
28,118
123,168
33
33
10
64
23
97
-
33
10
64
23
130
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(f) Fair Value Hierarchy (continued)
BlackRock Australian Bond Fund
At 30 June 2013
Level 1
$'000
Financial assets
Financial assets held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Financial assets designated at fair value through profit
or loss
Units in related schemes
Interest bearing securities
Total
Financial liabilities
Financial liabilities held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total
Level 2
$'000
Level 3
$'000
Total
$'000
128
-
13
540
410
-
128
13
540
410
128
75,804
10,505
87,272
-
75,804
10,505
87,400
248
248
502
109
611
-
248
502
109
859
Investments whose values are based on quoted market prices in active markets, and therefore classified within level 1,
include active listed equities, trusts, exchange traded derivatives, semi-government securities and money market
securities.
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 investment-grade corporate bonds, certain listed equities, certain unlisted unit trusts, 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 classified as level 2 are debt and derivative instruments and units in related schemes. The fair value of debt
and derivative instruments is derived from industry standard valuation models with published or observable market data.
The fair value of the units in related schemes is determined by the unit price released as at the reporting date by the
Responsible Entity for the related schemes.
Investments classified within level 3 have significant unobservable inputs, as they are infrequently traded. As observable
prices are not available for these securities, the Responsible Entity has used valuation techniques to derive fair value.
Except for cash and cash equivalents which are classified as level 1, the Funds' assets and liabilities not measured at fair
value at 30 June 2014 and 2013 have been classified as level 2. The carrying amounts of these assets and liabilities
approximate their fair values as at the end of the reporting date.
The Funds did not hold any level 3 instruments during the year ended 30 June 2014.
There were no transfers between levels for recurring fair value measurements during the year ended 30 June 2014 (30
June 2013: Nil).
- 54 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(f) Fair Value Hierarchy (continued)
The following tables present the movement in level 3 instruments for the year ended 30 June 2013 by class of financial
instrument.
BlackRock Wholesale Balanced Fund
30 June 2013
Units in Unit Schemes
$'000
Opening balance
Purchases
Sales
Gains/(losses) recognised in the Statement of Comprehensive Income
Closing balance
5,611
(5,858)
247
-
Total unrealised gains/(losses) for the year included in the Statement of Comprehensive
Income for financial assets and liabilities held at the end of the year
-
BlackRock Wholesale Managed Income Fund
Interest bearing
securities
$'000
30 June 2013
Opening balance
Purchases
Sales
Gains/(losses) recognised in the Statement of Comprehensive Income
Closing balance
Total unrealised gains/(losses) for the year included in the Statement of
Comprehensive Income for financial assets and liabilities held at the end of the
year
Units in Unit
Schemes
$'000
1,003
(987)
(16)
-
-
5,239
(5,469)
230
-
-
(g) Offsetting Financial Assets and Financial Liabilities
Financial assets and liabilities are reported on a gross basis in the Balance Sheet. BlackRock Wholesale International Bond
Fund, BlackRock Wholesale Managed Income Fund and BlackRock Wholesale Australian Share Fund have no derivatives
subject to master netting arrangements. The gross and net positions of financial assets and liabilities are disclosed in the
following tables.
- 55 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(g) Offsetting Financial Assets and Financial Liabilities (continued)
BlackRock Wholesale Balanced Fund
Gross amounts not offset on the Balance Sheet
30 June 2014
Gross amounts of
financial
Amounts
instruments
subject to master
presented in the
netting
Balance Sheet
arrangements
$'000
$'000
Net amount
excluding
collateral
$'000
Cash Collateral
received/posted
$'000
Net amount
$'000
Financial assets
Derivatives
1,287
312
975
-
975
Total
1,287
312
975
-
975
Derivatives
782
312
470
442
912
Total
782
312
470
442
912
Financial liabilities
Gross amounts not offset on the Balance Sheet
Gross amounts of
financial
instruments
presented in the
Balance Sheet
$'000
Amounts
subject to master
netting
arrangements
$'000
Derivatives
4,423
363
4,060
2,760
6,820
Total
4,423
363
4,060
2,760
6,820
Derivatives
2,606
363
2,243
-
2,243
Total
2,606
363
2,243
-
2,243
30 June 2013
Net amount
excluding
collateral
$'000
Cash Collateral
received/posted
$'000
Net amount
$'000
Financial assets
Financial liabilities
- 56 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial Risk Management (continued)
(g) Offsetting Financial Assets and Financial Liabilities (continued)
BlackRock Australian Bond Fund
Gross amounts not offset on the Balance Sheet
30 June 2014
Gross amounts of
financial
Amounts
instruments
subject to master
presented in the
netting
Balance Sheet
arrangements
$'000
$'000
Net amount
excluding
collateral
$'000
Cash Collateral
received/posted
$'000
Net amount
$'000
Financial assets
Derivatives
577
18
559
-
559
Total
577
18
559
-
559
Derivatives
130
18
112
-
112
Total
130
18
112
-
112
Financial liabilities
Gross amounts not offset on the Balance Sheet
Gross amounts of
financial
instruments
presented in the
Balance Sheet
$'000
Amounts
subject to master
netting
arrangements
$'000
Derivatives
1,091
337
754
-
754
Total
1,091
337
754
-
754
Derivatives
859
337
522
-
522
Total
859
337
522
-
522
30 June 2013
Net amount
excluding
collateral
$'000
Cash Collateral
received/posted
$'000
Net amount
$'000
Financial assets
Financial liabilities
Agreements with the derivative counterparties are based on the ISDA Master Agreement. Under the terms of these
arrangements, if on any date amounts would otherwise be payable in the same currency and in respect to the same
transaction with the counterparty, the obligation may be automatically satisfied and discharged if the party with the
larger aggregate amount pays to the other party the excess of the larger aggregate amount over the smaller aggregate
amount. In the event of default, the aggregation into a net position owing/receivable to a single counterparty is subject
to the terms of the arrangements and the insolvency laws of the relevant jurisdiction of the party in default.
- 57 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
4 Net Gains/(Losses) on Financial Instruments Held at Fair Value Through Profit or Loss
The net gains/(losses) recognised in relation to financial assets and financial liabilities held at fair value through profit or
loss:
BlackRock Wholesale Balanced
Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Financial assets and liabilities
Net gain/(loss) on financial assets and
liabilities held for trading
Net gain/(loss) on financial assets and
liabilities designated at fair value through
profit or loss
Net gains/(losses) on financial instruments
held at fair value through profit or loss
BlackRock Wholesale
International Bond Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
21,503
43,435
-
50,874
61,717
5,497
(2,983)
72,377
105,152
5,497
(2,983)
BlackRock Wholesale Managed
Income Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Financial assets and liabilities
Net gain/(loss) on financial assets and
liabilities held for trading
Net gain/(loss) on financial assets and
liabilities designated at fair value through
profit or loss
Net gains/(losses) on financial instruments
held at fair value through profit or loss
-
(24)
-
BlackRock Wholesale
Australian Share Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
-
1,721
2,223
3,306
13,179
32,957
2,223
3,282
13,179
34,678
BlackRock Australian Bond
Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
Financial assets and liabilities
Net gain/(loss) on financial assets and
liabilities held for trading
Net gain/(loss) on financial assets and
liabilities designated at fair value through
profit or loss
Net gains/(losses) on financial instruments
held at fair value through profit or loss
356
- 58 -
163
3,248
(1,620)
3,604
(1,457)
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
5 Distributions to Unitholders
The distributions during the year were as follows:
BlackRock Wholesale Balanced Fund
Year ended
30 June
2014
$'000
Distributions paid - 31 December
Distributions paid/payable - 30 June
30 June
2013
CPU
6,536
57,303
63,839
$'000
1.25
11.81
CPU
12,951
77,296
90,247
2.25
14.59
BlackRock Wholesale International Bond Fund
Year ended
30 June
30 June
2014
2013
$'000
CPU
$'000
CPU
32
32
Distributions paid - 30 September
Distributions paid - 31 March
Distributions paid/payable - 30 June
0.05
293
163
5,786
6,242
0.46
0.25
9.27
BlackRock Wholesale Managed Income Fund
Year ended
30 June
2014
$'000
Distributions paid - 31 July
Distributions paid - 31 August
Distributions paid - 30 September
Distributions paid - 31 October
Distributions paid - 30 November
Distributions paid - 31 December
Distributions paid - 31 January
Distributions paid - 28 February
Distributions paid - 31 March
Distributions paid - 30 April
Distributions paid - 31 May
Distributions paid/payable - 30 June
59
61
199
55
30
211
32
28
284
29
29
466
1,483
- 59 -
30 June
2013
CPU
$'000
0.12
0.12
0.42
0.12
0.07
0.47
0.07
0.06
0.65
0.07
0.07
1.12
165
108
305
97
115
379
74
69
202
94
41
1,313
2,962
CPU
0.25
0.17
0.48
0.16
0.19
0.66
0.13
0.12
0.37
0.18
0.08
2.63
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
5 Distributions to Unitholders (continued)
BlackRock Wholesale Australian Share Fund
Year ended
30 June
2014
$'000
Distributions paid - 30 September
Distributions paid - 31 December
Distributions paid - 31 March
Distributions paid/payable - 30 June
30 June
2013
CPU
378
1,193
361
30,784
32,716
$'000
0.24
0.80
0.25
22.66
1,225
1,068
3,639
38,936
44,868
BlackRock Australian Bond Fund - Class X
Year ended
30 June
30 June
2014
2013
$'000
CPU
$'000
Distributions paid - 30 September
Distributions paid - 31 December
Distributions paid - 31 March
Distributions paid/payable - 30 June
1,021
1,302
1,483
2,248
6,054
0.74
0.94
1.05
1.70
CPU
287
575
326
4,070
5,258
0.60
0.60
2.16
24.68
CPU
0.60
1.20
0.67
4.37
6 Net Assets Attributable to Unitholders
As stipulated within the Funds' Constitutions, each unit represents a right to an individual share in the Funds and does not
extend to a right to the underlying assets of the Funds. All units and unit classes have the same rights and restrictions as
provided in the Funds' Constitutions. The difference between unit classes relates to the obligation to pay fees to the
Manager. The fee rate varies from unit class to unit class with the exception of X class for which no management fees are
charged.
Movements in number of units and net assets attributable to unitholders during the year were as follows:
30 June
2014
No. '000
Opening balance
Applications
Redemptions
Units issued upon reinvestment of distributions
Increase/(decrease) in net assets attributable to
unitholders
Closing balance
BlackRock Wholesale Balanced Fund
30 June
30 June
2013
2014
No. '000
$'000
30 June
2013
$'000
529,761
32,297
(99,272)
22,569
561,042
96,140
(144,641)
17,220
862,156
56,436
(175,418)
37,079
852,360
160,477
(244,808)
26,705
485,355
529,761
52,304
832,557
67,422
862,156
- 60 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
6 Net Assets Attributable to Unitholders (continued)
BlackRock Wholesale International Bond Fund
30 June
30 June
30 June
30 June
2014
2013
2014
2013
No. '000
No. '000
$'000
$'000
Opening balance
Applications
Redemptions
Units issued upon reinvestment of distributions
Increase/(decrease) in net assets attributable to
unitholders
Closing balance
62,427
3,165
(7,844)
5,250
64,150
2,838
(6,864)
2,303
57,889
3,033
(7,506)
4,875
62,685
2,892
(6,970)
2,266
62,998
62,427
5,497
63,788
(2,984)
57,889
BlackRock Wholesale Managed Income Fund
30 June
30 June
30 June
30 June
2014
2013
2014
2013
No. '000
No. '000
$'000
$'000
Opening balance
Applications
Redemptions
Units issued upon reinvestment of distributions
Increase/(decrease) in net assets attributable to
unitholders
Closing balance
50,006
2,045
(11,283)
773
67,795
1,205
(20,182)
1,188
42,136
1,792
(9,893)
660
54,624
1,020
(17,248)
989
41,541
50,006
2,182
36,877
2,751
42,136
BlackRock Wholesale Australian Share Fund
30 June
30 June
30 June
30 June
2014
2013
2014
2013
No. '000
No. '000
$'000
$'000
Opening balance
Applications
Redemptions
Units issued upon reinvestment of distributions
Increase/(decrease) in net assets attributable to
unitholders
Closing balance
157,782
9,571
(38,144)
6,626
232,133
23,568
(102,913)
4,994
215,742
14,522
(58,280)
9,143
315,761
38,342
(158,882)
7,005
135,835
157,782
1,745
182,872
13,516
215,742
- 61 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
6 Net Assets Attributable to Unitholders (continued)
BlackRock Australian Bond Fund - Class X
30 June
30 June
30 June
30 June
2014
2013
2014
2013
No. '000
No. '000
$'000
$'000
Opening balance
Applications
Redemptions
Units issued upon reinvestment of distributions
Increase/(decrease) in net assets attributable to
unitholders
Closing balance
93,088
42,185
(11,293)
8,602
43,782
47,124
(2,762)
4,944
84,956
38,935
(10,663)
7,876
41,268
45,658
(2,658)
4,674
132,582
93,088
2,519
123,623
(3,986)
84,956
Capital Risk Management
The Funds manage their net assets attributable to unitholders as capital, notwithstanding net assets attributable to
unitholders are classified as a liability. The amount of net assets attributable to unitholders can change significantly on a
daily basis as the Funds are subject to daily applications and redemptions at the discretion of unitholders.
The Funds monitor the level of daily applications and redemptions relative to the liquid assets in the Funds. As of 30 June
2014 the capital of the Funds is represented in the net assets attributable to unitholders table.
In the event of a significant redemption, the Funds' Constitution allows the delay of payment beyond the usual
redemption timeframe but no later than the maximum number of days specified in the Constitution for satisfying
redemption requests. Further, in certain circumstances such as disrupted markets, the Constitution allows payment to be
delayed beyond the maximum number of days.
7 Receivables
BlackRock Wholesale Balanced
Fund
As at
30 June
30 June
2014
2013
$'000
$'000
Settlements receivable
Applications receivable
Interest receivable
Distributions from related schemes receivable
Fee rebates from related schemes receivable
Other receivables
Total
61,110
187
1
38,831
36
102
100,267
- 62 -
2
35,996
22
165
36,185
BlackRock Wholesale
International Bond Fund
As at
30 June
30 June
2014
2013
$'000
$'000
2
379
6
387
5,892
7
5,899
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
7 Receivables (continued)
BlackRock Wholesale Managed
Income Fund
As at
30 June
30 June
2014
2013
$'000
$'000
537
3
4
544
Settlements receivable
Applications receivable
Interest receivable
Distributions from related schemes receivable
Fee rebates from related schemes receivable
Other receivables
Total
818
6
824
BlackRock Wholesale Australian
Share Fund
As at
30 June
30 June
2014
2013
$'000
$'000
26,150
45
1
19,536
8
38
45,778
1
22,296
5
48
22,350
BlackRock Australian Bond Fund
As at
30 June
30 June
2014
2013
$'000
$'000
9,356
1,484
9
10,849
Settlements receivable
Applications receivable
Interest receivable
Distributions from related schemes receivable
Fee rebates from related schemes receivable
Other receivables
Total
- 63 -
1,731
6
1,737
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
8 Investments in Subsidiaries
The below controlled entity is accounted for at fair value through profit or loss in accordance with the accounting policy
described in Note 2.
BlackRock Wholesale Balanced Fund
Name of Entity
Country of
Domicile
Fair Value
30 June
30 June
2014
2013
$'000
$'000
Units Held
30 June
30 June
2014
2013
%
%
BlackRock Australian Bond Fund
Australia
112,179,451
73,800,623
90.74
86.82
BlackRock Australian Core Plus Bond
Fund
Australia
-
55,179,820
-
100.00
BlackRock Global Fixed Interest Plus
Fund
Australia
-
12,066,953
-
61.00
BlackRock Institutional Liquidity
Fund*
Australia
14,987,932
67,068,134
21.39
65.63
127,167,383
208,115,530
Total
* The BlackRock Institutional Liquidity Fund is not considered a controlled entity as at 30 June 2014 in accordance with
the accounting policy described in note 2.
BlackRock Wholesale International Bond Fund
Name of Entity
BlackRock Global Diversified Bond
Fund (AUD Hedged)
Total
Country of
Domicile
Australia
Fair Value
30 June
30 June
2014
2013
$'000
$'000
63,433,091
57,805,903
63,433,091
57,805,903
- 64 -
Units Held
30 June
30 June
2014
2013
%
%
81.70
82.22
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
9 Financial Assets Held at Fair Value Through Profit or Loss
BlackRock Wholesale Balanced
Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
Held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total held for trading
BlackRock Wholesale
International Bond Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
$'000
$'000
584
312
391
1,287
1,405
363
2,655
4,423
-
-
Designated at fair value through profit or loss
Units in related schemes
Interest bearing securities
Total designated at fair value through profit or loss
793,575
793,575
878,996
878,996
63,433
63,433
57,806
57,806
Total financial assets held at fair value through
profit or loss
794,862
883,419
63,433
57,806
BlackRock Wholesale Managed
Income Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
Held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total held for trading
BlackRock Wholesale
Australian Share Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
$'000
$'000
-
-
-
-
Designated at fair value through profit or loss
Units in related schemes
Interest bearing securities
Total designated at fair value through profit or loss
37,080
37,080
40,579
1,543
42,122
168,753
168,753
203,653
203,653
Total financial assets held at fair value through
profit or loss
37,080
42,122
168,753
203,653
- 65 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
9 Financial Assets Held at Fair Value Through Profit or Loss (continued)
BlackRock Australian Bond Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
Held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total held for trading
$'000
199
33
73
272
577
128
13
540
410
1,091
Designated at fair value through profit or loss
Units in related schemes
Interest bearing securities
Total designated at fair value through profit or loss
94,473
28,118
122,591
75,804
10,505
86,309
Total financial assets held at fair value through
profit or loss
123,168
87,400
An overview of the risk exposures relating to financial assets held at fair value through profit or loss is included in Note 3.
10 Payables
BlackRock Wholesale Balanced
Fund
As at
30 June
30 June
2014
2013
$'000
$'000
Settlements payable
Redemptions payable
Responsible Entity's fees payable
Custody fees payable
Other payables
Total
6,851
1,448
3
8,302
- 66 -
733
733
BlackRock Wholesale
International Bond Fund
As at
30 June
30 June
2014
2013
$'000
$'000
51
58
1
110
30
30
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
10 Payables (continued)
BlackRock Wholesale Managed
Income Fund
As at
30 June
30 June
2014
2013
$'000
$'000
249
51
1
301
Settlements payable
Redemptions payable
Responsible Entity's fees payable
Custody fees payable
Other payables
Total
29
29
BlackRock Wholesale Australian
Share Fund
As at
30 June
30 June
2014
2013
$'000
$'000
931
352
1
1,284
201
201
BlackRock Australian Bond Fund
As at
30 June
30 June
2014
2013
$'000
$'000
8,260
1
1
8,262
Settlements payable
Redemptions payable
Responsible Entity's fees payable
Custody fees payable
Other payables
Total
- 67 -
2
2
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
11 Financial Liabilities Held at Fair Value Through Profit or Loss
BlackRock Wholesale Balanced
Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
$'000
BlackRock Wholesale
International Bond Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
$'000
Held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total held for trading
129
362
291
782
90
490
2,026
2,606
-
-
Total financial liabilities held at fair value
through profit or loss
782
2,606
-
-
BlackRock Wholesale Managed
Income Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
$'000
BlackRock Wholesale
Australian Share Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
$'000
Held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total held for trading
-
-
-
-
Total financial liabilities held at fair value
through profit or loss
-
-
-
-
- 68 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
11 Financial Liabilities Held at Fair Value Through Profit or Loss (continued)
BlackRock Australian Bond Fund
As at
30 June
30 June
2014
2013
Fair Value
Fair Value
$'000
$'000
Held for trading
Futures
Forward foreign exchange contracts
Options
Swaps
Total held for trading
33
10
64
23
130
248
502
109
859
Total financial liabilities held at fair value
through profit or loss
130
859
An overview of the risk exposures relating to financial liabilities held at fair value through profit or loss is included in Note
3.
12 Related Party Transactions
Responsible Entity
The Responsible Entity of the Funds is BlackRock Investment Management (Australia) Limited (ABN 13 006 165 975, AFSL
230523) whose ultimate holding company is BlackRock, Inc.
BlackRock Investment Management (Australia) Limited is incorporated in Australia and BlackRock, Inc. is incorporated in
the United States of America.
Key management personnel
Directors
Key management personnel include persons who were directors of the Responsible Entity at any time during the financial
year as follows:
Director
Date appointed
M S McCorry
Appointed 2 December 2009
J Arter
Appointed 19 September 2012
L McMahon
Appointed 13 February 2013
A Landman
Appointed 8 May 2013
K Miller
Appointed 8 May 2013
A Telfer
Appointed 12 December 2013
- 69 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Other key management personnel
No other person had authority and responsibility for planning, directing and controlling the activities of the Funds, directly
or indirectly during the financial year.
30 June 2013
Name
R J Maddox (Resigned 31 October 2012)
Position
Managing Director and Co/Chief
Investment Officer
Employer
BlackRock Investment Management
(Australia) Limited
Key management personnel unitholdings
At 30 June 2014 no key management personnel held units in the Funds (30 June 2013: Nil).
Key management personnel compensation
Key management personnel are paid by the Responsible Entity. Payments made from the Funds to the Responsible Entity
do not include any amounts attributable to the compensation of key management personnel.
Key management personnel loan disclosures
The Funds have not made, guaranteed or secured, directly or indirectly, any loans to the key management personnel or
their personally related entities at any time during the reporting period.
Responsible Entity's fees and other transactions
In accordance with the Funds' Constitutions, the Responsible Entity was entitled to receive fees for the provision of
services to the Funds.
Responsible
Fee rebates
Entity's
from related
fees
schemes
30 June 2014
$
$
BlackRock Wholesale
Balanced Fund
8,807,758
250,611
BlackRock Wholesale
International Bond Fund
344,837
-
BlackRock Wholesale
Managed Income Fund
321,003
12,546
BlackRock Wholesale
Australian Share Fund
2,187,840
51,138
-
66,386
BlackRock Australian Bond
Fund
Responsible
Entity's fees
$
30 June 2013
BlackRock Wholesale
Balanced Fund
BlackRock Wholesale
International Bond Fund
- 70 -
Fee rebates
from related
schemes
$
8,884,587
146,485
358,635
-
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Responsible Entity's fees and other transactions (continued)
Fee rebates
from related
schemes
$
Responsible
Entity's fees
$
30 June 2013
BlackRock Wholesale
Managed Income Fund
403,370
4,958
BlackRock Wholesale
Australian Share Fund
2,788,806
67,623
-
54,095
BlackRock Australian Bond
Fund
Investments
The Funds held investments in the following schemes which were also managed by the Responsible Entity or its related
parties:
BlackRock Wholesale Balanced Fund
30 June 2014
BlackRock Global
Allocation Fund (Aust)
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
Value of units Value of units
purchased
sold during the
during the year
year
$
$
Interest
held at
year end
%
Distribution
received/
receivable
during the
year
$
125,702,517
166,563,628
1,202,738
16,520,564
15.30
6,354,094
BlackRock Australian
Core Plus Bond Fund
-
-
1,443,267
57,259,521
-
86,105
BlackRock Australian
Bond Fund
120,310,518
112,179,451
44,427,725
8,260,281
90.74
5,499,215
15,045,587
14,987,932
333,803,204
385,846,411
21.39
1,808,332
124,130,514
100,812,473
23,738,685
16,435,760
22.62
24,716,308
50,654,039
72,877,992
-
-
22.65
-
107,677,823
176,994,776
12,302,423
133,726,532
5.45
11,902,862
80
684
1,403,832
13,025,762
100.00
834,623
BlackRock Institutional
Liquidity Fund
BlackRock Equitised
Long Short Fund
BlackRock Global Ascent
Fund
BlackRock Wholesale
Indexed Australian
Equity Fund
BlackRock Global Fixed
Interest Plus Fund
- 71 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Investments (continued)
BlackRock Wholesale Balanced Fund
30 June 2014
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
Value of units Value of units
purchased
sold during the
during the year
year
$
$
Interest
held at
year end
%
Distribution
received/
receivable
during the
year
$
BlackRock Fixed Income
GlobalAlpha Fund
(Dublin)
10,982
29,063,315
-
-
1.12
-
BlackRock Diversified
Fixed Income Absolute
Return Fund
52,990
65,907,063
24,384,419
-
17.92
-
BlackRock Asian Dragon
Fund
778,715
29,016,698
26,979,934
-
4.40
-
28,758,242
25,171,284
25,000,000
-
4.19
546,036
BlackRock Wholesale
Indexed Australian
Listed Property Fund
30 June 2013
Number of
units held at
year end
Fair value of
units held at
year end
Fair value of
units held at
year end
Value of units
sold during the
year
Interest
held at
year end
Distribution
received/
receivable
during the
year
Units
$
$
$
%
$
BlackRock Australian
Core Plus Cash Fund
-
-
3,539,945
37,060,065
-
946,223
BlackRock Australian
Government Inflation
Linked Bond Fund
-
-
273,603
16,543,408
-
185
BlackRock Money
Market Fund
-
-
243,299,204
253,736,605
-
1,789,875
BlackRock Property
Trust (Aust)
-
-
-
4,869,882
-
568,558
BlackRock Global
Allocation Fund (Aust)
136,735,750
161,935,738
13,366,457
29,460,000
16.86
1,202,739
BlackRock Asset
Allocation Alpha Fund
-
-
4,453,719
52,882,039
-
24,163
BlackRock Australian
Core Plus Bond Fund
62,347,965
55,179,820
12,543,104
-
100.00
2,364,596
BlackRock Australian
Bond Fund
80,816,904
73,800,623
45,513,662
-
86.82
4,501,616
- 72 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Investments (continued)
BlackRock Wholesale Balanced Fund
30 June 2013
Number of
units held at
year end
Fair value of
units held at
year end
Fair value of
units held at
year end
Value of units
sold during the
year
Interest
held at
year end
Distribution
received/
receivable
during the
year
Units
$
$
$
%
$
BlackRock Australian
Equity Index Fund
-
-
16,298,802
280,105,762
-
11,888,370
67,173,798
67,068,134
87,385,665
20,294,833
65.63
328,470
113,250,377
98,292,267
7,526,734
-
23.87
23,738,686
50,654,039
74,002,613
24,913,584
-
25.11
-
BlackRock Wholesale
Indexed Australian
Equity Fund
181,450,905
268,961,229
291,157,221
42,480,322
9.50
13,253,112
iShares UBS
Government Inflation
Index Fund
-
-
-
5,238,468
-
22,970
11,774,268
12,066,953
1,460,018
3,895,155
61.00
665,630
10,982
28,460,438
1,683,863
-
1.09
-
-
-
-
63,020,989
-
-
32,757
39,229,022
35,993,826
-
12.27
-
BlackRock Institutional
Liquidity Fund
BlackRock Equitised
Long Short Fund
BlackRock Global Ascent
Fund
BlackRock Global Fixed
Interest Plus Fund
BlackRock Fixed Income
GlobalAlpha Fund
(Dublin)
BlackRock Portable
Alpha Investment
Strategies, L.P. Alpha
Plus Global Equity A
Series
BlackRock Diversified
Fixed Income Absolute
Return Fund
BlackRock Wholesale International Bond Fund
30 June 2014
BlackRock Global
Diversified Bond Fund
Number of
units held at
year end
Units
81,143,775
Fair value of
units held at
year end
$
Value of units Value of units
purchased
sold during the
during the year
year
$
$
63,433,091
7,919,029
- 73 -
7,788,256
Interest
held at
year end
%
81.70
Distribution
received/
receivable
during the
year
$
379,332
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Investments (continued)
BlackRock Wholesale International Bond Fund
30 June 2013
BlackRock Global
Diversified Bond Fund
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
80,746,569
Value of units
purchased
during the year
$
Value of units
sold during the
year
$
Interest
held at
year end
%
5,942,365
7,763,622
82.22
57,805,903
Distribution
received/
receivable
during the
year
$
6,600,221
BlackRock Wholesale Managed Income Fund
30 June 2014
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
Value of units Value of units
purchased
sold during the
during the year
year
$
$
Interest
held at
year end
%
Distribution
received/
receivable
during the
year
$
BlackRock Money
Market Fund
1,908,841
1,908,841
10,337,813
12,509,783
0.08
75,094
BlackRock Monthly
Income Fund
9,651,609
7,880,616
494,691
8,247,696
2.46
461,292
BlackRock Australian
Bond Fund
12,271,776
11,442,401
2,383,272
2,402,508
9.26
554,851
BlackRock Wholesale
Indexed Australian
Equity Fund
4,520,340
7,430,282
446,804
4,498,471
0.23
448,663
BlackRock Wholesale
Indexed Australian
Listed Property Fund
1,235,811
1,081,671
1,051,275
-
0.18
53,304
85,704
1,109,608
1,021,435
-
0.03
28,135
6,250,193
6,226,242
6,236,696
-
8.89
134,271
BlackRock Wholesale
Indexed International
Equity Fund
Blackrock Institutional
Liquidity Fund
- 74 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Investments (continued)
BlackRock Wholesale Managed Income Fund
30 June 2013
BlackRock Money
Market Fund
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
Value of units
purchased
during the year
$
Value of units
sold during the
year
$
Interest
held at
year end
%
Distribution
received/
receivable
during the
year
$
4,080,811
4,080,811
20,319,199
17,128,877
0.45
61,597
-
-
-
4,546,414
-
530,793
BlackRock Monthly
Income Fund
19,469,196
14,920,394
1,018,088
6,825,415
4.35
983,811
BlackRock Australian
Bond Fund
12,270,600
11,205,303
4,601,135
-
13.18
740,151
BlackRock Wholesale
Indexed Australian
Equity Fund
6,997,714
10,372,578
512,972
5,483,746
0.37
514,252
BlackRock Property
Trust (Aust)
BlackRock Wholesale Australian Share Fund
30 June 2014
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
Value of units Value of units
purchased
sold during the
during the year
year
$
$
Interest
held at
year end
%
Distribution
received/
receivable
during the
year
$
BlackRock Equitised
Long Short Fund
83,653,287
67,938,933
20,027,966
33,720,872
15.24
16,656,665
BlackRock Wholesale
Indexed Australian
Equity Fund
61,332,142
100,814,340
10,760,373
45,146,332
3.10
6,442,700
30 June 2013
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
Value of units
purchased
during the year
$
Value of units
sold during the
year
$
Interest
held at
year end
%
Distribution
received/
receivable
during the
year
$
BlackRock Equitised
Long Short Fund
94,605,924
82,110,374
86,827,981
73,069,828
19.94
19,830,577
BlackRock Wholesale
Indexed Australian
Equity Fund
81,997,287
121,543,020
19,283,383
99,338,092
4.29
6,523,828
BlackRock Cash Fund
-
-
879,583
85,659,954
-
-
- 75 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Investments (continued)
BlackRock Australian Bond Fund
30 June 2014
BlackRock Enhanced
Australian Bond Fund
BlackRock Institutional
Liquidity Fund
30 June 2013
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
Value of units Value of units
purchased
sold during the
during the year
year
$
$
Interest
held at
year end
%
Distribution
received/
receivable
during the
year
$
82,609,909
87,533,047
30,944,507
5,876,445
24.43
4,443,832
6,966,468
6,939,772
27,444,916
35,511,232
9.90
459,086
Number of
units held at
year end
Units
Fair value of
units held at
year end
$
Value of units
purchased
during the year
$
Value of units
sold during the
year
$
Interest
held at
year end
%
Distribution
received/
receivable
during the
year
$
BlackRock Enhanced
Australian Bond Fund
58,550,893
60,779,165
63,225,000
-
19.53
1,662,515
BlackRock Institutional
Liquidity Fund
15,048,361
15,024,690
91,635,638
99,796,178
14.71
1,018,370
Related party schemes' unit holdings
Parties related to the Funds including the Responsible Entity, its related parties or other schemes managed by the
Responsible Entity held units in the Funds as follows:
BlackRock Wholesale Balanced Fund
Unitholder
Number of
units held
opening
Units
Number of
units held
closing
Units
BlackRock Balanced Fund
17,820,574
16,725,580
3.45
1,154,822
2,249,816
2,193,787
BlackRock Income Fund
2,405,949
-
-
92,182
2,498,131
-
BlackRock Professional Investor
Balanced Fund
2,813,055
-
-
124,457
2,937,512
-
30 June 2014
Interest
held at
year end
%
- 76 -
Number of
units
acquired
Units
Number of
units
disposed
Units
Distributions
paid/payable
by the Funds
$
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Related party schemes' unit holdings (continued)
BlackRock Wholesale Balanced Fund
30 June 2013
Unitholder
BlackRock Balanced Fund
Number of
units held
opening
Units
Number of
units held
closing
Units
Interest
held at
Number of
Number of
year end units acquired units disposed
%
Units
Units
Distributions
paid/payable
by the Funds
$
19,833,281
17,820,574
3.36
1,556,437
3,569,144
3,030,835
BlackRock Income Fund
2,515,902
2,405,949
0.45
168,718
278,671
406,068
BlackRock Non Tax Paying
Balanced Fund
4,886,855
-
-
344,511
5,231,366
107,584
BlackRock Professional Investor
Balanced Fund
3,273,309
2,813,055
0.53
252,316
712,570
475,148
-
-
-
40,204,773
40,204,773
834,419
BlackRock Balanced Pooled
Super Fund
BlackRock Wholesale Managed Income Fund
Unitholder
Number of
units held
opening
Units
Number of
units held
closing
Units
BlackRock Managed Income Fund
11,717,269
10,671,525
25.69
510,277
1,556,021
371,704
1,268,566
-
-
36,932
1,305,498
3,138
Interest
held at
Number of
Number of
year end units acquired units disposed
%
Units
Units
Distributions
paid/payable
by the Funds
$
30 June 2014
BlackRock Professional Investor
Managed Income Fund
30 June 2013
Unitholder
BlackRock Managed Income Fund
BlackRock Professional Investor
Managed Income Fund
Number of
units held
opening
Units
Interest
held at
year end
%
Number of
units held
closing
Units
Number of
units
acquired
Units
Number of
units
disposed
Units
Distributions
paid/payable
by the Funds
$
13,255,826
11,717,269
23.43
748,805
2,287,362
658,599
1,302,151
1,268,566
2.54
70,409
103,994
69,385
BlackRock Wholesale Australian Share Fund
30 June 2014
Unitholder
BlackRock Professional Investor
Australian Share Fund
Number of
units held
opening
Units
5,035,271
Number of
units held
closing
Units
4,701,985
- 77 -
Interest
held at
year end
%
3.46
Number of
units
acquired
Units
551,991
Number of
units
disposed
Units
885,277
Distributions
paid/payable
by the Funds
$
1,133,785
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
12 Related Party Transactions (continued)
Related party schemes' unit holdings (continued)
BlackRock Wholesale Australian Share Fund
30 June 2013
Unitholder
BlackRock Professional Investor
Australian Share Fund
Number of
units held
opening
Units
Number of
units held
closing
Units
Interest
held at
Number of
Number of
year end units acquired units disposed
%
Units
Units
Distributions
paid/payable
by the Funds
$
5,927,882
5,035,271
3.19
593,490
1,486,101
1,426,442
-
-
-
13,200,090
13,200,090
-
BlackRock Australian Equities
Pooled Superannuation Trust
BlackRock Australian Bond Fund
Unitholder
Number of
units held
opening
Units
BlackRock Wholesale Balanced
Fund
80,816,904
120,310,518
90.74
48,200,497
8,706,883
5,499,215
BlackRock Wholesale Managed
Income Fund
12,270,600
12,271,776
9.26
2,587,181
2,586,005
554,851
Number of
units held
opening
Units
Number of
units held
closing
Units
Interest
held at
Number of
Number of
year end units acquired units disposed
%
Units
Units
Distributions
paid/payable
by the Funds
$
30 June 2014
30 June 2013
Unitholder
BlackRock Wholesale Balanced
Fund
Number of
units held
closing
Units
Interest
held at
year end
%
Number of
units
acquired
Units
Number of
units
disposed
Units
Distributions
paid/payable
by the Funds
$
33,747,499
80,816,904
86.82
47,069,405
-
4,501,616
BlackRock Balanced Pooled
Super Fund
2,531,231
-
-
231,012
2,762,243
16,602
BlackRock Wholesale Managed
Income Fund
7,503,001
12,270,600
13.18
4,767,599
-
740,151
Other transactions with the Funds
Apart from those details disclosed in this note, no key management personnel have entered into a material contract with
the Funds since the end of the previous financial year and there were no material contracts involving key management
personnel interests subsisting at year end.
- 78 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
13 Remuneration of Auditor
During the year the following fees were paid or payable for services provided by the auditors of the Funds:
BlackRock Wholesale Balanced
Fund
BlackRock Wholesale
International Bond Fund
Year ended
30 June
30 June
2014
2013
Year ended
30 June
30 June
2014
2013
$
$
$
$
Deloitte Touche Tohmatsu
Audit and review of the financial statements
10,321
8,424
6,132
5,424
784
650
785
650
11,105
9,074
6,917
6,074
Other services
Total
BlackRock Wholesale Managed
Income Fund
BlackRock Wholesale
Australian Share Fund
Year ended
30 June
30 June
2014
2013
Year ended
30 June
30 June
2014
2013
$
$
$
$
Deloitte Touche Tohmatsu
Audit and review of the financial statements
Other services
Total
5,432
4,724
6,769
4,694
785
650
784
650
6,217
5,374
7,553
5,344
BlackRock Australian Bond
Fund
Year ended
30 June
30 June
2014
2013
$
$
Deloitte Touche Tohmatsu
Audit and review of the financial statements
Other services
Total
5,432
4,724
785
650
6,217
5,374
Other services relate to the audit of the Funds' compliance plans. The audit fees paid or payable are discharged by the
Responsible Entity from the fees earned from the Funds.
- 79 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
14 Reconciliation of Profit/(Loss) to Net Cash Inflow/(Outflow) from Operating Activities
BlackRock Wholesale Balanced
Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
(a) Reconciliation of operating profit/(loss) to net
cash inflow/(outflow) from operating activities
Operating profit/(loss) for the year
Net (gains)/losses on financial instruments held at
fair value through profit or loss (including FX
(gains)/losses)
Proceeds from sale of financial instruments held at
fair value through profit or loss
Purchases of financial instruments held at fair
value through profit or loss
Distributions from related schemes reinvested
Net change in receivables and other assets
Net change in accounts payable and accrued
liabilities
Interest received from debt securities
Net cash inflow/(outflow) from operating
activities
BlackRock Wholesale
International Bond Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
116,143
157,669
5,529
3,258
(72,377)
(105,152)
(5,497)
2,983
645,827
603,951
7,788
7,764
(492,703)
(48,913)
(2,785)
(511,378)
(40,534)
(17,993)
(2,887)
(4,980)
5,514
(2,917)
(3,025)
(3,575)
718
2,372
(18)
28,498
29
-
(2)
-
148,282
115,043
5,496
4,486
Cash
Margin accounts
Cash and cash equivalents
Bank overdraft
1,779
1,779
-
12,661
12,661
-
110
110
-
-
Total cash
1,779
12,661
110
-
37,079
26,705
4,875
2,266
(b) Components of cash and cash equivalents
Cash as at the end of the financial year as shown in
the Statements of Cash Flows is reconciled to the
Balance Sheets as follows:
Margin accounts comprise of restricted cash held
for derivative transactions.
(c) Non-cash financing activities
During the year, the following distribution
payments were satisfied by the issue of units under
the distribution reinvestment plan
- 80 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
14 Reconciliation of Profit/(Loss) to Net Cash Inflow/(Outflow) from Operating Activities
(continued)
BlackRock Wholesale Managed
Income Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
(a) Reconciliation of operating profit/(loss) to net
cash inflow/(outflow) from operating activities
Operating profit/(loss) for the year
Net (gains)/losses on financial instruments held at
fair value through profit or loss (including FX
(gains)/losses)
Proceeds from sale of financial instruments held at
fair value through profit or loss
Purchases of financial instruments held at fair
value through profit or loss
Distributions from related schemes reinvested
Net change in receivables and other assets
Net change in accounts payable and accrued
liabilities
Interest received from debt securities
Net cash inflow/(outflow) from operating
activities
BlackRock Wholesale
Australian Share Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
3,665
5,713
34,461
58,384
(2,223)
(3,282)
(13,179)
(34,678)
20,808
26,158
52,718
259,429
(11,506)
(2,037)
280
(7,874)
(2,332)
294
(4,930)
(25,859)
2,767
(99,024)
(7,967)
(14,565)
23
-
(11)
-
152
-
(113)
-
9,010
18,666
46,130
161,466
Cash
Margin accounts
Cash and cash equivalents
Bank overdraft
20
20
-
511
21
532
-
409
409
-
28,876
28,876
-
Total cash
20
532
409
28,876
660
989
9,143
7,005
(b) Components of cash and cash equivalents
Cash as at the end of the financial year as shown in
the Statements of Cash Flows is reconciled to the
Balance Sheets as follows:
Margin accounts comprise of restricted cash held
for derivative transactions.
(c) Non-cash financing activities
During the year, the following distribution
payments were satisfied by the issue of units under
the distribution reinvestment plan
- 81 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
14 Reconciliation of Profit/(Loss) to Net Cash Inflow/(Outflow) from Operating Activities
(continued)
BlackRock Australian Bond
Fund
Year ended
30 June
30 June
2014
2013
$'000
$'000
(a) Reconciliation of operating profit/(loss) to net
cash inflow/(outflow) from operating activities
Operating profit/(loss) for the year
Net (gains)/losses on financial instruments held at
fair value through profit or loss (including FX
(gains)/losses)
Proceeds from sale of financial instruments held at
fair value through profit or loss
Purchases of financial instruments held at fair
value through profit or loss
Distributions from related schemes reinvested
Net change in receivables and other assets
Net change in accounts payable and accrued
liabilities
Interest received from debt securities
Net cash inflow/(outflow) from operating
activities
8,573
1,272
(3,604)
1,457
51,345
152,145
(88,897)
(5,150)
244
(196,659)
(1,048)
(1,635)
1,166
1,359
(36,323)
(43,109)
(b) Components of cash and cash equivalents
Cash as at the end of the financial year as shown in
the Statements of Cash Flows is reconciled to the
Balance Sheets as follows:
Cash
Margin accounts
Cash and cash equivalents
Bank overdraft
27
220
247
(1)
69
69
-
Total cash
246
69
7,876
4,674
Margin accounts comprise of restricted cash held
for derivative transactions.
(c) Non-cash financing activities
During the year, the following distribution
payments were satisfied by the issue of units under
the distribution reinvestment plan
As described in Note 2(k), income not distributed is included in net assets attributable to unitholders. The change in this
amount each year (as reported in (a) above) represents a non-cash financing cost as it is not settled in cash until such time
as it becomes distributable (i.e. taxable).
- 82 -
BlackRock Wholesale Funds
Notes to the Financial Statements
For the year ended 30 June 2014
15 Events Occurring After the Reporting Period
No significant events have occurred since the end of the reporting period up to the date of signing of the Annual Financial
Report which would impact on the financial position of the Funds disclosed in the Balance Sheets as at 30 June 2014 or on
the results and cash flows of the Funds for the year ended on that date.
16 Contingent Assets, Contingent Liabilities and Commitments
There are no outstanding contingent assets, contingent liabilities or commitments as at 30 June 2014 (30 June 2013: Nil).
- 83 -
BlackRock Wholesale Funds
Directors' Declaration
For the year ended 30 June 2014
Directors' Declaration
In the opinion of the directors of the Responsible Entity:
(a) the financial statements and notes set out on pages 8 to 83 are in accordance with the Corporations Act 2001,
including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of the Funds' financial positions as at 30 June 2014 and of their performance, as
represented by the results of their operations; changes in equity and their cash flows, for the financial year
ended on that date;
(b) the financial statements also comply with International Financial Reporting Standards as disclosed in Note 2(a); and
(c) there are reasonable grounds to believe that the Funds will be able to pay their debts as and when they become
due and payable.
Signed in accordance with a resolution of the Responsible Entity made pursuant to s.295(5) of the Corporations Act
2001.
Director
L McMahon
Sydney
24 September 2014
- 84 -
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Hewitt EnnisKnupp

BlackRock Rowena Kwok Phone: (+852) 3903 2913 Email: rowena

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