ANNUAL report

BlackRock Authorised Contractual Scheme

For the period from 27 June 2014 to 31 December 2014 About the Fund Manager BlackRock ACS US Equity Tracker Fund

Nimish Patel, Managing Director and senior portfolio manager, is a member of This Annual Report covers the period from 27 June 2014 to 31 December 2014. BlackRock’s Institutional Index Equity team. Performance Table Mr. Patel’s service with the firm dates back to 2006, including his years with Barclays Global Investors (“BGI”), which merged with BlackRock in 2009. At BGI, Since Launch he served as a senior portfolio manager in the Institutional Index Equity team. 27.6.2014 In this role, he was responsible for overseeing all strategic client portfolios. Prior to 31.12.2014 to joining BGI, Mr. Patel was a portfolio manager in the Quantitative Management TOTAL Return (with net income reinvested) Group at Global Investments (“NTGI”) where he managed a broad Class T1A Accumulation Units range of portfolios including global index equity, global enhanced equity and indexed fixed income. Mr. Patel joined NTGI in 2003 following its acquisition of Deutsche Asset Management’s (“DeAM”)’s BlackRock ACS US Equity Tracker Fund +16.6% Quant and Index business. FTSE USA Index* +16.5%

Mr. Patel joined DeAM (formerly Morgan Grenfell Asset Management) in 1997. During his tenure at All Fund figures quoted are based on bid-to-bid dealing prices (the price at which units are sold) and are calculated net of fees. Performance returns are cumulative. All returns are in Sterling. DeAM, Mr. Patel initially served as a Fund Manager’s assistant for UK Active Equity before transitioning * Figures from FTSE. to the Quantitative Investment Group where he served as a Transition Manager and Portfolio Manager.

Mr. Patel is an Affiliate of The Association of Chartered Certified Accountants (“ACCA”). All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and the return of your initial investment amount cannot be guaranteed. Changes in exchange rates may cause the value of an investment to fluctuate. Past performance is Investment Objective & Policy not a guide to future performance and should not be the sole factor of consideration when selecting a product. The aim of the BlackRock ACS US Equity Tracker Fund (the “Fund”) is to seek to achieve capital growth for investors by tracking closely the performance of the FTSE USA Index by investing in companies Distribution Payable in the Benchmark Index. Investment will be made directly into constituent companies and via other transferable securities giving exposure to such companies. The Fund may also invest in permitted T1A Accumulation The final accumulation distribution payable on 28 February 2015 is 1.0374p net per accumulation unit. money-market instruments, permitted deposits and units in collective investment schemes. Derivatives and forward transactions may be used for the purposes of efficient portfolio management.

The Fund is the UK’s first tax transparent fund (“TTF”) and is a Fund of the BlackRock Authorised Contractual Scheme, a Co-Ownership Scheme constituted as a UCITS scheme under the Financial Conduct Authority’s (“FCA”) Collective Investment Schemes Sourcebook (“the Sourcebook”). The Fund was authorised by the FCA on 13 June 2014 and was established on 27 June 2014. A TTF is a collective investment scheme structure in accordance with the Finance Act 2012.

Copies of Manager’s Reports and Prospectus are available on request.

Dealing and Investor Services: 0800 44 55 22 .co.uk

1 BlackRock Authorised Contractual Scheme 2 ACS US Equity Tracker Fund continued

Tracking Difference Tracking Error Tracking difference is defined as the difference in returns between a fund and its benchmark index. Realised tracking error is the annualised standard deviation of the difference in monthly returns between a fund and its benchmark index. Tracking error shows the consistency of the returns relative Cash management, efficient portfolio management techniques including securities lending and to the benchmark index over a defined period of time. transaction costs from rebalancing can have an impact on tracking difference. Anticipated tracking error is based on the expected volatility of differences between the returns of A fund’s tracking difference may be affected if the times at which a fund and its benchmark index a fund and the returns of its benchmark index. are priced are different. As the Fund is valued at midday, but the benchmark index is valued at the time the relevant markets close for business, the tracking difference of the Fund at its valuation point may Cash management, efficient portfolio management techniques including securities lending and appear to be higher than if the Fund and the benchmark index were priced at the same time. transaction costs from rebalancing can have an impact on tracking error as well as the return differential between the Fund and the benchmark index. Importantly, these impacts can be either The table below compares the realised Fund performance against the performance of the relevant positive or negative depending on the underlying circumstances. benchmark index during the period from 27 June 2014 to 31 December 2014. An explanation for the difference is provided: A fund’s tracking error may be affected if the times at which a fund and its benchmark index are priced are different. As the Fund is valued at midday, but the benchmark index is valued at the time Fund return Benchmark return the relevant markets close for business, the tracking error of the Fund at its valuation point may for the period for the period appear to be higher than if the Fund and the benchmark index were priced at the same time. 27.6.2014 27.6.2014 Tracking to 31.12.2014 to 31.12.2014 difference Explanation of the tracking difference The table below shows the anticipated tracking error of the Fund (disclosed in the prospectus Before costs and after adjusting for the on an ex ante basis) against the realised tracking error of the Fund as at 31 December 2014. Realised difference in valuation point of the Fund tracking error is annualised and calculated using data since inception as the Fund has been trading for and the pricing point of the benchmark fewer than 36 months. A return history fewer than 36 months is not considered statistically significant. index, the performance of the Fund relative to the benchmark index has Anticipated Realised +16.6%* +16.5% +0.1% been in line with expectations. Tracking Error Tracking Error Explanation for difference * Performance is calculated net of fees and reported for the Fund’s class T1A Accumulation Units. The Fund has tracked its benchmark index within its anticipated Up to 2.50%* +2.41%* tracking error.

* Figures represent the anticipated tracking error and realised tracking error for the Fund’s class T1A Accumulation Units.

3 BlackRock Authorised Contractual Scheme 4 Performance Record

Net Asset Value Annualised Ongoing Charges Detailed in the following table are the charges used to meet the costs of running the Fund, which include the costs of marketing and distribution. These charges reduce the potential growth of your Net Asset Value per Unit investments. The charges may vary from year to year. The charges exclude portfolio trade-related costs, Unit Class Units in Issue £ p except costs paid to the custodian/depositary and entry/exit charges paid to an underlying collective 31 December 2014* T1A Accumulation 367,361,940 424,174,751 115.5 investment scheme (if any). * Fund launched on 27 June 2014. 27.6.2014 Unit Class to 31.12.2014†* Income (Net Accumulations) T1A Accumulation 0.17%

T1A Accumulation Units † Ongoing charges figures are based on annualised expenses for the period ended 31 December 2014. Calendar Year Pence per Unit * Fund launched on 27 June 2014. 2015†* 1.0374

† To 28 February. * Fund launched on 27 June 2014.

Capital (Unit Prices)

T1A Accumulation Units

Highest Lowest Offer Price Bid Price Calendar Year p p 2014†* 117.7 98.96

† To 31 December. * Fund launched on 27 June 2014.

Risk and Reward Profile

Lower risk Higher risk Typically lower rewards Typically higher rewards Unit Class T1A Accumulation 1 2 3 4 5 6 7

`` The risk indicator was calculated incorporating historical or simulated historical data and may not be a reliable indication of the future risk profile of the unit class.

`` The risk category shown is not guaranteed and may change over time.

`` The lowest category does not mean risk free.

For more information on this, please see the Fund’s Key Investor Information Documents (KIIDs), which are available at www.blackrock.com.

5 BlackRock Authorised Contractual Scheme 6 Investment Report Portfolio Statement at 31 December 2014

Summary of Performance over the Period Holding or Market % of During the period from 27 June 2014 to 31 December 2014, the Fund was up 16.6%*, compared with its Nominal Value Total Net benchmark, the FTSE USA Index, which was up by 16.5%. Value Investment £ Assets – 99.79% Fund Manager’s Commentary Stock market volatility increased in the third quarter of 2014 as high valuations started to worry Aerospace & Defence – 2.29% investors because of potential interest rate rises and mounting geopolitical risks. In this environment, 3,800 B/E Aerospace 141,399 0.03 US large-cap stocks benefited from the fact they are perceived as being more stable than their smaller 22,161 Boeing 1,846,786 0.44 peers. US stock markets regained their strength in the middle of the quarter however, driven largely 10,970 General Dynamics 968,357 0.23 by, albeit temporary, suggestions that geopolitical risks had abated and a period in which investors 1,900 KLX 50,265 0.01 treated bad economic news as good. For example, softer-than-expected retail sales data would 2,788 L-3 Communications 225,561 0.05 ordinarily be a bad thing, but as it theoretically reduced the chances of an early increase in short-term 10,846 Lockheed Martin 1,339,569 0.32 rates it was received more positively. 6,857 647,902 0.15 4,849 Precision Castparts 748,909 0.18 Then, with economic indicators signalling improving growth going into September 2014, investors 10,700 Raytheon 742,361 0.17 stepped back from stocks given the greater likelihood the US Federal Reserve (the “Fed”) would 4,442 Rockwell Collins 240,667 0.06 increase short-term interest rates earlier than expected. High valuations and rising volatility also 9,332 Textron 252,025 0.06 played a part. Positive sentiment for US growth outweighed any drag from the Fed winding down 1,584 Transdigm 199,385 0.05 its asset purchase programs in October 2014 and expectations for higher short-term rates in 2015. 31,043 United Technologies 2,289,527 0.54 Despite a lacklustre December, US stocks closed out 2014 with solid gains as the economy gathered 9,692,713 2.29 steam, due in part to better-than-expected job growth, improved consumer confidence and healthier Automobiles & Parts – 1.29% business spending. Continued monetary policy accommodation and strength in corporate America 3,027 Autoliv 206,032 0.05 further underpinned stock outperformance versus other major markets. 7,616 BorgWarner 268,251 0.06 10,246 Delphi Automotive 477,917 0.11 All told, the broad-market S&P 500 Index added nearly 5% in the fourth quarter to end the year up 129,744 Ford Motor 1,288,911 0.30 13.7%. It was the third consecutive year of double-digit returns for the Index, with stocks repeatedly 44,324 General Motors 992,084 0.23 hitting record highs. The absolute return understates the level of recent market volatility, however, 5,200 Gentex 120,491 0.03 as weakening global economic growth, shifting expectations about Fed policy, geopolitical flare-ups 5,207 Genuine Parts 355,916 0.08 and the collapse in oil prices all tested investor resolve. While these factors failed to derail the market 7,328 Harley-Davidson 309,710 0.07 uptrend, the flight-to-quality environment they fomented was to the benefit of defensive stock sectors, 22,291 Johnson Controls 690,782 0.16 as well as US Treasuries. 10,000 LKQ 180,343 0.04 3,032 Tesla Motors 432,326 0.10 The Fund is designed to closely track the FTSE USA Index, so its portfolio is positioned in a way that 3,618 TRW Automotive 238,601 0.06 ensures its risk characteristics are similar to those of the FTSE USA Index. 5,561,364 1.29 January 2015 Banks – 6.02% 360,947 Bank of America 4,141,313 0.98 * Performance figures quoted are based on bid-to-bid dealing prices (the price at which units are sold) and are not the same as the net asset value reported in the financial statements which is at close of business. Performance is calculated net of fees and reported for 24,844 BB&T 619,646 0.15 the Fund’s T1A Accumulation Units. 103,894 Citigroup 3,606,056 0.85 1,800 City National 93,299 0.02 5,750 Comerica 172,730 0.04 3,465 Commerce Bancshares 96,644 0.02 28,787 Fifth Third 376,073 0.09 16,000 Hudson City Bancorp 103,845 0.02 26,227 Huntington Bancshares 176,781 0.04 128,462 JP Morgan Chase 5,156,605 1.22

7 BlackRock Authorised Contractual Scheme 8 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £ Assets Value Investment £ Assets 28,999 KeyCorp 258,513 0.06 10,081 Praxair 837,837 0.20 4,100 M&T Bank 330,209 0.08 4,011 Sigma-Aldrich 353,061 0.08 15,300 New York Community Bancorp 156,999 0.04 1,279 Westlake Chemical 50,118 0.01 11,200 People’s United Financial 109,037 0.03 8,472,328 1.99 17,806 PNC Financial Services 1,041,809 0.25 46,253 Regions Financial 313,248 0.07 Construction & Materials – 0.34% 15,200 SLM 99,335 0.02 3,544 Chicago Bridge & Iron 95,370 0.02 17,432 SunTrust Banks 468,431 0.11 5,308 Fluor 206,397 0.05 61,185 US Bancorp 1,763,839 0.42 5,028 Fortune Brands 145,914 0.03 178,319 Wells Fargo 6,269,327 1.48 4,800 Jacobs Engineering 137,481 0.03 6,700 Zions Bancorporation 122,506 0.03 11,455 Masco 185,058 0.04 6,900 MDU Resources 103,948 0.02 25,476,245 6.02 2,736 Sherwin-Williams 461,676 0.11 Beverages – 2.04% 4,207 Vulcan Materials 177,346 0.04 4,280 Brown-Forman class ‘B’ shares 241,031 0.06 1,513,190 0.34 142,622 Coca-Cola 3,861,793 0.91 8,175 Coca-Cola Enterprises 231,736 0.05 Electricity – 2.34% 5,393 Constellation Brands 339,369 0.08 24,000 AES 211,948 0.05 6,631 Dr Pepper Snapple 304,833 0.07 4,000 Alliant Energy 170,390 0.04 4,900 Molson Coors Brewing 234,088 0.06 16,702 American Electric Power 650,299 0.15 4,599 Monster Beverage 319,578 0.08 11,042 Calpine 156,645 0.04 51,390 PepsiCo 3,116,523 0.73 9,700 CMS Energy 216,178 0.05 9,771 Consolidated Edison 413,587 0.10 8,648,951 2.04 20,053 Dominion Resources (Virginia) 988,728 0.23 Chemicals – 1.99% 5,844 DTE Energy 323,599 0.08 7,309 Air Products & Chemicals 675,798 0.16 11,066 Edison International 464,570 0.11 2,000 Airgas 147,712 0.03 5,933 Entergy 332,636 0.08 2,458 Ashland 188,774 0.04 29,702 Exelon 706,333 0.17 3,400 Avery Dennison 113,104 0.03 14,024 FirstEnergy 350,679 0.08 5,055 Celanese 194,387 0.05 15,015 Nextera Energy 1,023,437 0.24 1,738 CF Industries 303,672 0.07 10,458 Northeast Utilities 358,828 0.08 39,853 Dow Chemical 1,164,983 0.27 12,200 NRG Energy 210,786 0.05 30,948 Du Pont de Nemours 1,466,966 0.35 9,000 Pepco 155,382 0.04 5,002 Eastman Chemical 243,259 0.06 15,763 PG&E 538,019 0.13 9,080 Ecolab 608,769 0.14 3,900 Pinnacle West Capital 170,807 0.04 4,800 FMC 175,469 0.04 22,600 PPL 526,427 0.12 2,613 International Flavors & Fragrances 169,809 0.04 17,144 Public Service Enterprise 454,974 0.11 14,339 LyondellBasell Industries 730,077 0.17 30,330 Southern 955,076 0.23 11,533 Mosaic 337,503 0.08 7,800 Teco Energy 102,449 0.02 4,798 PPG Industries 711,030 0.17 17,800 Xcel Energy 409,825 0.10 9,891,602 2.34

9 BlackRock Authorised Contractual Scheme 10 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £ Assets Value Investment £ Assets Electronic & Electrical Equipment – 0.89% 13,532 Navient 187,543 0.04 11,059 Agilent Technologies 290,297 0.07 7,921 Northern Trust 342,392 0.08 3,500 Allegion 124,467 0.03 4,600 SEI Investments 118,005 0.03 8,033 AMETEK 271,090 0.06 14,132 State Street 711,472 0.17 10,630 Amphenol 366,775 0.09 4,811 Synchrony Financial 91,700 0.02 3,600 Arrow Electronics 133,703 0.03 8,623 T Rowe Price 474,825 0.11 5,000 Avnet 137,887 0.03 7,800 TD Ameritrade 178,886 0.04 23,618 Emerson Electric 934,723 0.22 16,837 Visa 2,831,272 0.67 2,600 First Solar 74,352 0.02 6,895 Voya Financial 187,404 0.04 18,351 Flextronics International 131,461 0.03 17,292 Western Union 198,621 0.05 6,800 Jabil Circuit 95,115 0.02 21,165,788 5.00 6,000 Keysight Technologies 130,063 0.03 3,351 Roper Industries 335,906 0.08 Fixed Line Telecommunications – 2.17% 14,248 TE Connectivity 578,144 0.14 178,492 AT&T 3,844,003 0.91 9,500 Trimble Navigation 161,700 0.04 19,857 CenturyLink 503,923 0.12 35,900 Frontier Communications 153,339 0.04 3,765,683 0.89 9,651 Level 3 Communications 305,576 0.07 Financial Services – 5.00% 141,108 Verizon Communications 4,231,656 1.00 1,807 Affiliated Managers 245,812 0.06 21,900 Windstream Communications 115,592 0.03 14,149 Ally Financial 214,243 0.05 9,15 4 ,0 8 9 2.17 30,749 American Express 1,834,390 0.43 6,275 Ameriprise Financial 532,223 0.13 Food & Drug Retailers – 1.85% 38,786 Bank of New York Mellon 1,009,170 0.24 7,659 AmerisourceBergen 442,716 0.10 4,265 BlackRock* 977,592 0.23 11,287 Cardinal Health 584,456 0.14 17,223 Capital One 911,822 0.21 39,157 CVS Caremark 2,418,606 0.57 37,457 Charles Schwab 724,997 0.17 15,761 Kroger 649,039 0.15 6,101 CIT 187,070 0.04 7,902 McKesson 1,052,080 0.25 10,966 CME 623,464 0.15 3,600 Omnicare 168,381 0.04 15,257 Discover Financial Services 640,809 0.15 8,300 Safeway 186,893 0.04 3,917 Equifax 203,179 0.05 19,712 Sysco 501,634 0.12 9,900 FNF 218,667 0.05 30,516 Walgreen 1,488,371 0.35 3,299 FNFV 33,302 0.01 11,199 Whole Foods Market 362,132 0.09 14,081 Franklin Resources 500,026 0.12 7,854,308 1.85 13,986 Goldman Sachs 1,738,596 0.41 Food Producers – 1.95% 3,901 IntercontinentalExchange 548,679 0.13 22,414 Archer Daniels Midland 747,349 0.18 14,725 373,118 0.09 4,868 Bunge 283,635 0.07 3,161 Legg Mason 108,114 0.03 6,600 Campbell Soup 186,286 0.04 2,600 Liberty TripAdvisor 44,788 0.01 14,096 ConAgra Foods 327,890 0.08 4,960 Liberty Ventures 119,956 0.03 20,803 General Mills 711,244 0.17 34,119 MasterCard class ‘A’ shares 1,885,763 0.44 2,694 Herbalife 65,119 0.02 9,353 McGraw-Hill 533,497 0.13 5,492 Hershey Foods 365,887 0.09 7,271 Moody’s 446,682 0.11 5,000 Hormel Foods 167,003 0.04 47,718 Morgan Stanley 1,187,709 0.28

11 BlackRock Authorised Contractual Scheme 12 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £ Assets Value Investment £ Assets 3,209 JM Smucker 207,800 0.05 General Retailers – 5.20% 8,286 Kellogg 347,648 0.08 2,600 Advance Auto Parts 265,661 0.06 4,215 Keurig Green Mountain 357,799 0.08 12,785 Amazon 2,544,701 0.60 19,883 Kraft Foods class ‘A’ shares 798,890 0.19 2,533 AutoNation 98,087 0.02 11,600 Leucadia National 166,644 0.04 1,123 AutoZone 446,125 0.11 3,787 McCormick & Co 180,406 0.04 6,321 Bed Bath & Beyond 308,783 0.07 6,911 Mead Johnson 445,531 0.10 9,800 Best Buy 244,929 0.06 57,838 Mondelez International 1,347,235 0.32 7,440 CarMax 317,640 0.07 16,578 Monsanto 1,269,678 0.30 15,043 Costco Wholesale 1,367,545 0.32 10,100 Tyson Foods 259,552 0.06 9,660 Dollar General 437,883 0.10 8,235,596 1.95 6,827 Dollar Tree 308,063 0.07 38,178 eBay 1,373,845 0.32 Forestry & Paper – 0.12% 3,400 Family Dollar Stores 172,677 0.04 14,770 International Paper 507,347 0.12 5,300 Foot Locker 190,994 0.04 298 Veritiv 9,911 0.00 4,200 GameStop 90,936 0.02 517,258 0.12 8,211 Gap 221,751 0.05 Gas, Water & Multiutilities – 0.99% 9,800 H&R Block 211,618 0.05 8,600 Ameren 254,318 0.06 45,011 Home Depot 3,029,312 0.71 6,400 American Water Works 218,731 0.05 6,244 Kohl’s 244,434 0.06 15,300 CenterPoint Energy 229,807 0.05 7,316 L Brands 405,905 0.10 24,321 Duke Energy 1,302,891 0.31 33,497 Lowe’s 1,477,585 0.35 10,365 Nisource 281,851 0.07 11,993 Macy’s 505,640 0.12 7,400 ONEOK 236,297 0.06 1,901 Netflix 416,483 0.10 6,400 Questar 103,722 0.02 5,200 Nordstrom 264,727 0.06 4,600 SCANA 178,129 0.04 3,536 O’Reilly Automotive 436,770 0.10 8,344 Sempra Energy 595,759 0.14 3,600 PetSmart 187,659 0.04 22,873 Spectra Energy 532,346 0.13 7,269 Ross Stores 439,427 0.10 8,000 Wisconsin Energy 270,489 0.06 2,884 Signet Jewellers 243,297 0.06 21,110 Staples 245,183 0.06 4,204,340 0.99 21,396 Target 1,041,498 0.25 General Industrials – 2.86% 3,922 Tiffany 268,635 0.06 21,889 3M 2,306,891 0.54 23,709 TJX 1,042,633 0.25 4,497 Ball 196,579 0.05 3,288 Tractor Supply Company 166,145 0.04 3,700 Bemis 107,233 0.03 3,900 Urban Outfitters 87,842 0.02 20,394 Danaher 1,120,902 0.26 55,271 Wal-Mart Stores 3,044,557 0.72 16,136 Eaton 703,082 0.17 22,148,970 5.20 342,661 General Electric 5,553,339 1.31 26,643 Honeywell International 1,707,510 0.40 Healthcare Equipment & Services – 3.69% 6,100 MeadWestvaco 173,738 0.04 12,019 Aetna 684,719 0.16 6,000 Owens-Illinois 103,858 0.02 18,423 Baxter International 865,943 0.20 6,809 Sealed Air 185,198 0.04 6,638 Becton Dickinson 592,428 0.14 44,772 Boston Scientific 380,171 0.09 12,158,330 2.86 6,802 CareFusion 258,775 0.06

13 BlackRock Authorised Contractual Scheme 14 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £ Assets Value Investment £ Assets 8,981 Cigna 592,686 0.14 Industrial Engineering – 1.50% 15,463 Covidien 1,014,504 0.24 4,100 Babcock & Wilcox 79,673 0.02 2,466 CR Bard 263,451 0.06 20,543 Caterpillar 1,205,374 0.28 7,174 DaVita 348,336 0.08 3,921 Colfax 129,631 0.03 5,200 Dentsply International 177,619 0.04 6,330 Cummins 585,279 0.14 3,482 Edwards Lifesciences 284,299 0.07 11,707 Deere 664,166 0.16 25,072 Express Scripts 1,361,293 0.32 5,491 Dover 252,567 0.06 11,080 HCA 521,579 0.12 5,000 Flowserve 191,855 0.05 2,801 Henry Schein 244,577 0.06 11,817 Illinois Tool Works 717,698 0.17 5,219 Humana 480,747 0.11 9,175 Ingersoll-Rand 372,943 0.09 1,232 Intuitive Surgical 417,928 0.10 3,600 Joy Global 107,359 0.03 2,730 Laboratory Corporation of America 188,933 0.04 12,187 Paccar 531,640 0.13 33,434 Medtronic 1,547,924 0.36 3,592 Pall 233,062 0.05 2,398 Patterson 73,943 0.02 5,095 Parker-Hannifin 421,259 0.10 4,697 Quest Diagnostics 201,948 0.05 6,430 Pentair 273,736 0.06 9,523 St. Jude Medical 397,105 0.09 4,748 Rockwell Automation 338,488 0.08 9,755 Stryker 589,898 0.14 1,600 SPX 88,124 0.02 13,662 Thermo Fisher Scientific 1,097,867 0.26 5,778 Xylem 140,999 0.03 32,743 UnitedHealth 2,122,809 0.50 6,333,853 1.50 3,300 Universal Health Services class ‘B’ shares 235,365 0.06 Industrial Metals – 0.37% 3,357 Varian Medical Systems 186,188 0.04 40,538 Alcoa 410,515 0.10 2,560 Waters 184,967 0.04 4,000 Allegheny Technologies 89,145 0.02 5,744 Zimmer 417,782 0.10 34,921 Freeport McMoRan Copper & Gold class ‘B’ shares 522,947 0.12 15,733,784 3.69 10,674 Nucor 335,708 0.08 Household Goods & Home Construction – 2.09% 6,200 Southern Copper 112,091 0.03 9,100 Anthem 733,603 0.17 5,500 United States Steel 94,286 0.02 4,389 Church & Dwight 221,836 0.05 1,564,692 0.37 4,306 Clorox 287,674 0.07 Industrial Transportation – 1.81% 10,200 DR Horton 165,372 0.04 3,008 AerCap Holdings 74,850 0.02 2,200 Energizer 181,404 0.04 4,869 CH Robinson Worldwide 233,856 0.05 1,687 Halyard Health 49,206 0.01 34,433 CSX 799,848 0.19 5,000 Leggett & Platt 136,540 0.03 6,363 Expeditors International of Washington 182,045 0.04 6,100 Lennar class ‘A’ shares 175,303 0.04 9,005 FedEx 1,002,519 0.24 2,200 Mohawk 219,132 0.05 2,933 JB Hunt Transport Services 158,477 0.04 8,951 Newell Rubbermaid 218,544 0.05 3,689 Kansas City Southern 288,614 0.07 145 NVR 118,419 0.03 10,468 Norfolk Southern 735,798 0.17 92,837 Procter & Gamble 5,424,646 1.28 1,900 Ryder System 113,141 0.03 11,100 Pulte Homes 152,698 0.04 30,702 Union Pacific 2,345,304 0.55 5,188 Stanley Black & Decker 319,548 0.08 24,233 United Parcel Service class ‘B’ shares 1,727,587 0.41 5,700 Toll Brothers 125,241 0.03 2,586 Whirlpool 321,183 0.08 7,662,039 1.81

8,850,349 2.09

15 BlackRock Authorised Contractual Scheme 16 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £ Assets Value Investment £ Assets Leisure Goods – 0.32% 13,600 News Corporation class ‘A’ shares 136,850 0.03 22,334 Activision Blizzard 288,476 0.07 3,722 News Corporation class ‘B’ shares 35,973 0.01 9,876 Electronic Arts 297,753 0.07 10,800 Nielsen 309,610 0.07 2,400 Harman International 164,202 0.04 8,622 Omnicom 428,432 0.10 4,200 Hasbro 148,067 0.03 2,477 Scripps Networks Interactive 119,573 0.03 12,200 Mattel 242,083 0.06 98,168 Sirius XM 220,355 0.05 2,200 Polaris Industries 213,390 0.05 3,112 Starz - Liberty Capital 59,276 0.01 1,353,971 0.32 28,573 Time Warner 1,564,941 0.37 9,358 Time Warner Cable 912,604 0.21 Life Insurance – 0.90% 45,877 Twenty-First Century class ‘A’ shares 1,129,823 0.27 15,121 Aflac 592,427 0.14 14,443 Twenty-First Century class ‘B’ shares 341,704 0.08 2,600 Assurant 114,055 0.03 12,036 Viacom New class ‘B’ non-voting shares 580,862 0.14 17,100 Genworth Financial class ‘A’ shares 93,218 0.02 57,888 Walt Disney 3,495,741 0.82 8,850 Lincoln National 327,267 0.08 17,287,856 4.09 31,336 MetLife 1,087,038 0.26 9,960 Principal Financial 331,713 0.08 Mining – 0.10% 15,636 Prudential Financial 907,023 0.21 7,512 Consol Energy 162,838 0.04 4,500 Torchmark 156,277 0.04 16,159 Newmont Mining 195,659 0.05 8,188 Unum Provident 183,163 0.04 9,900 Peabody Energy 49,143 0.01 3,792,181 0.90 407,640 0.10 Media – 4.09% Mobile Telecommunications – 0.13% 5,595 Cablevision Systems 73,990 0.02 4,078 SBA Communications 289,573 0.07 16,461 CBS class ‘B’ shares 584,119 0.14 30,100 Sprint 80,112 0.02 2,600 Chartermmunications 277,734 0.07 9,300 T-Mobile 160,562 0.04 14,494 Comcast 535,049 0.13 530,247 0.13 73,556 Comcast class ‘A’ shares 2,735,618 0.64 17,178 DirecTV class ‘A’ shares 955,049 0.23 Non-Life Insurance – 3.47% 5,200 Discovery Communications class ‘A’ shares 114,789 0.03 11,466 ACE 844,774 0.20 9,569 Discovery Communications class ‘C’ shares 206,937 0.05 47,820 AIG 1,717,748 0.40 7,000 DISH Network 327,138 0.08 518 Alleghany 154,339 0.04 1,300 Dun & Bradstreet 100,848 0.02 14,426 Allstate 649,760 0.15 8,300 Gannett 169,912 0.04 9,804 Aon 596,131 0.14 2,400 IHS 175,269 0.04 4,400 Arch Capital 166,716 0.04 13,454 Interpublic 179,128 0.04 5,600 Arthur J Gallagher 169,015 0.04 850 Liberty Broadband ‘A’ shares 27,273 0.01 2,934 Axis Capital 96,191 0.02 1,700 Liberty Broadband ‘C’ shares 54,317 0.01 37,822 Berkshire Hathaway convertible class ‘A’ shares 3,642,119 0.86 510 Liberty Broadband Rights 3,107 0.00 17 Berkshire Hathaway convertible class ‘B’ shares 2,459,535 0.58 7,400 Liberty Global class ‘A’ shares 238,243 0.06 4,400 Brown & Brown 92,840 0.02 21,849 Liberty Global class ‘B’ shares 676,804 0.16 7,978 Chubb 529,411 0.12 15,222 Liberty Interactiv 287,112 0.07 5,100 Cincinnati Financial 169,526 0.04 6,800 Liberty Media 152,768 0.04 1,470 Everest Re 160,477 0.04 3,400 Liberty Media Liberty Capital 76,908 0.02 14,287 Hartford Financial Services 381,995 0.09

17 BlackRock Authorised Contractual Scheme 18 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £ Assets Value Investment £ Assets 10,085 Loews 271,779 0.06 6,000 Range Resources 205,637 0.05 436 Markel 191,054 0.04 11,641 Southwestern Energy 203,741 0.05 18,433 Marsh & McLennan 676,556 0.16 5,400 Ultra Petroleum 45,610 0.01 8,800 Old Republic International 82,455 0.02 17,956 Valero Energy 569,917 0.13 1,800 PartnerRe 131,636 0.03 4,230 Whiting Petroleum 89,524 0.02 18,349 Progressive 317,379 0.07 7,500 WPX Energy 55,940 0.01 1,400 Renaissance 87,300 0.02 26,211,818 6.20 11,258 The Travelers Companies 764,324 0.18 6,400 Willis 183,924 0.04 Oil Equipment, Services & Distribution – 1.97% 3,800 WR Berkley 124,949 0.03 14,950 Baker Hughes 537,500 0.13 8,668 XL 191,066 0.04 6,621 Cameron International 212,059 0.05 1,600 Core Laboratories 123,464 0.03 14,852,999 3.47 1,937 Diamond Offshore Drilling 45,579 0.01 Oil & Gas Producers – 6.20% 8,500 Ensco 163,213 0.04 16,989 Anadarko Petroleum 898,780 0.21 7,879 FMC Technologies 236,635 0.06 2,200 Antero Resources 57,284 0.01 28,535 Halliburton 719,208 0.17 12,636 Apache 507,790 0.12 3,407 Helmerich & Payne 147,314 0.03 14,381 Cabot Oil & Gas 273,002 0.06 60,893 Kinder Morgan 1,651,931 0.39 10,882 California Resources 38,454 0.01 10,200 Nabors Industries 84,910 0.02 8,309 Cheniere Energy 376,323 0.09 14,751 National Oilwell Varco 619,840 0.15 23,147 Chesapeake Energy 290,367 0.07 9,300 Noble 98,771 0.02 64,565 Chevron 4,645,119 1.10 4,200 NOW 69,306 0.02 2,867 Cimarex Energy 194,903 0.05 3,700 Oceaneering International 139,505 0.03 12,200 Cobalt International Energy 69,480 0.02 3,100 Paragon Offshore 5,487 0.00 3,906 Concho Resources 249,879 0.06 5,400 Patterson-UTI Energy 57,420 0.01 41,746 ConocoPhillips 1,848,417 0.44 4,500 Rowan Companies class ‘A’ shares 67,273 0.02 3,400 Continental Resources 83,624 0.02 43,953 Schlumberger 2,407,020 0.57 12,900 Denbury Resources 67,344 0.02 1,764 Seventy Seven Energy 6,109 0.00 14,139 Devon Energy 554,951 0.13 26,676 Weatherford International 195,889 0.05 18,545 EOG Resources 1,094,919 0.26 25,690 Williams Companies 740,096 0.17 5,079 EQT 246,515 0.06 8,328,529 1.97 144,618 Exxon Mobil 8,572,738 2.02 8,894 Hess 421,014 0.10 Personal Goods – 1.50% 6,253 Hollyfrontier 150,305 0.04 15,700 Avon 94,447 0.02 22,586 Marathon Oil 409,641 0.10 9,800 Coach 235,942 0.06 9,354 Marathon Petroleum 541,293 0.13 31,255 Colgate-Palmolive 1,386,505 0.33 5,446 Murphy Oil 176,451 0.04 7,549 Estee Lauder class ‘A’ shares 368,917 0.09 5,100 Newfield Exploration 88,704 0.02 1,700 Fossil 120,736 0.03 12,522 Noble Energy 380,739 0.09 3,530 Hanesbrands 252,675 0.06 26,490 Occidental Petroleum 1,369,138 0.32 12,809 Kimberly Clark 948,651 0.22 19,241 Phillips 66 884,771 0.21 3,050 Lululemon Athletica 109,129 0.03 4,860 Pioneer Natural Resources 463,917 0.11 6,600 Michael Kors 317,841 0.07 6,600 QEP Resources 85,587 0.02 19,379 Nike class ‘B’ shares 1,194,495 0.28

19 BlackRock Authorised Contractual Scheme 20 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £ Assets Value Investment £ Assets 1,900 Nu Skin Enterprises 53,226 0.01 5,070 Boston Properties 418,444 0.10 2,800 PVH 230,159 0.05 11,513 Crown Castle International 581,095 0.14 1,981 Ralph Lauren class ‘A’ shares 235,268 0.06 4,797 Digital Realty Trust 203,909 0.05 6,166 Under Armour 268,429 0.06 11,800 Duke Realty 152,868 0.04 11,710 VF 562,501 0.13 12,235 Equity Residential 563,865 0.13 6,378,921 1.50 2,254 Essex Property Trust 298,683 0.07 2,400 Federal Realty 205,422 0.05 Pharmaceuticals & Biotechnology – 9.22% 16,636 General Growth Properties 300,126 0.07 51,465 Abbott Laboratories 1,485,942 0.35 15,514 HCP 438,083 0.10 54,612 AbbVie 2,291,305 0.54 11,292 Health Care REIT 547,998 0.13 9,073 Actavis 1,498,987 0.35 5,000 Hospitality Properties 99,407 0.02 6,752 Alexion Pharmaceuticals 801,190 0.19 25,574 Host Hotels & Resorts 390,027 0.09 10,177 Allergan 1,388,262 0.33 14,700 Kimco 236,916 0.06 25,931 Amgen 2,648,895 0.62 5,300 Liberty Property Trust 127,907 0.03 8,017 Biogen Idec 1,745,770 0.41 4,604 Macerich 246,167 0.06 4,820 BioMarin Pharmaceutical 279,509 0.07 6,300 Plum Creek Timber 172,970 0.04 56,131 Bristol-Myers Squibb 2,124,284 0.50 17,372 Prologis 479,297 0.11 27,500 Celgene 1,972,840 0.47 4,889 Public Storage 579,751 0.14 33,914 Eli Lilly 1,500,546 0.35 3,300 Rayonier 59,111 0.01 4,870 Endo International 225,252 0.05 7,195 Realty Income 220,153 0.05 51,981 Gilead Sciences 3,142,029 0.74 3,300 Regency Centers 135,026 0.03 6,000 Hospira 235,690 0.06 10,744 Simon Property 1,255,930 0.30 4,700 Illumina 556,253 0.13 3,360 SL Green Realty 256,517 0.06 4,291 Incyte 201,086 0.05 10,030 Ventas 461,280 0.11 1,932 Jazz Pharmaceuticals 202,784 0.05 5,591 Vornado Realty Trust 422,108 0.10 93,789 Johnson & Johnson 6,289,893 1.48 4,200 Weingarten Realty Investors 94,061 0.02 97,045 Merck & Co 3,534,511 0.83 17,424 Weyerhaeuser 401,057 0.09 12,420 Mylan Laboratories 449,008 0.11 11,236,102 2.64 4,400 Perrigo 471,393 0.11 215,191 Pfizer 4,298,990 1.01 Software & Computer Services – 7.81% 2,701 Regeneron Pharmaceuticals 710,324 0.17 16,979 Adobe Systems 791,537 0.19 8,000 Vertex Pharmaceuticals 609,473 0.14 5,594 Akamai Technologies 225,841 0.05 17,193 Zoetis 474,138 0.11 5,800 Amdocs 173,526 0.04 39,138,354 9.22 3,100 Ansys 163,027 0.04 7,568 Autodesk 291,508 0.07 Real Estate Investment & Services – 0.05% 10,835 CA 211,593 0.05 10,100 CBRE 221,853 0.05 5,766 CDK Global 150,728 0.04 Real Estate Investment Trusts – 2.64% 9,991 Cerner 414,313 0.10 12,800 American Capital 179,204 0.04 4,813 Check Point Software Technologies 242,340 0.06 32,371 American Realty Capital Properties 187,884 0.04 5,408 Citrix Systems 221,280 0.05 13,413 American Tower class ‘A’ shares 850,415 0.20 20,243 Cognizant Technology 683,530 0.16 30,749 Annaly Capital Management 213,177 0.05 4,587 Computer Sciences 185,480 0.04 4,363 Avalonbay Communications 457,244 0.11

21 BlackRock Authorised Contractual Scheme 22 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £ Assets Value Investment £ Assets 1,051 DST Systems 63,468 0.01 2,900 Stericycle 243,792 0.06 1,842 Equinix 267,845 0.06 5,800 Total System Services 126,285 0.03 72,150 Facebook 3,610,161 0.85 2,500 Towers Watson 181,257 0.04 9,666 Google class ‘A’ shares 3,289,199 0.78 14,737 Tyco International 414,536 0.10 9,628 Google class ‘C’ shares 3,250,334 0.77 3,077 United Rentals 201,423 0.05 2,600 IAC Interactive 101,365 0.02 4,495 Verisk Analytics 184,528 0.04 34,057 IBM 3,504,316 0.83 16,003 Waste Management 526,711 0.12 8,882 Intuit 525,145 0.12 2,035 WW Grainger 332,556 0.08 253,855 Microsoft 7,562,331 1.78 39,315 Xerox 349,467 0.08 9,300 Nuance Communications 85,052 0.02 8,335,571 1.98 116,413 Oracle 3,357,443 0.79 4,000 Rackspace Hosting 120,058 0.03 Technology Hardware & Equipment – 8.85% 6,225 Red Hat 275,988 0.07 3,700 3D Systems 77,951 0.02 18,856 Salesforce.com 716,994 0.17 10,290 Altera 243,779 0.06 1,558 Servicenow 67,776 0.02 10,627 Analog Devices 378,394 0.09 23,199 Symantec 381,629 0.09 200,293 Apple 14,178,830 3.34 5,600 Synopsys 156,121 0.04 41,559 Applied Materials 664,198 0.16 4,926 Teradata 137,963 0.03 8,560 Avago Technologies 552,166 0.13 14,600 Twitter 335,774 0.08 18,670 Broadcom 518,821 0.12 4,069 VeriSign 148,720 0.04 175,612 Cisco Systems 3,132,127 0.74 2,700 VMware 142,874 0.03 44,793 Corning 658,716 0.16 3,378 Workday 176,780 0.04 4,100 Cree 84,669 0.02 29,835 Yahoo 966,468 0.23 70,115 EMC 1,337,772 0.32 8,500 Yandex class ‘A’ shares 97,852 0.02 2,396 F5 Network 200,377 0.05 4,000 Garmin 135,501 0.03 33,096,359 7.81 3,363 Harris 154,837 0.04 Support Services – 1.98% 64,312 Hewlett-Packard 1,655,593 0.39 21,437 Accenture 1,227,859 0.29 165,136 Intel 3,843,377 0.91 6,300 ADT 146,303 0.03 15,405 Juniper Networks 220,417 0.05 2,203 Alliance Data Systems 404,134 0.10 5,519 KLA-Tencor 248,899 0.06 16,361 Auto Data Process 874,790 0.21 5,409 Lam Research 275,124 0.06 4,400 Broadridge Financial Solutions 130,286 0.03 7,749 Linear Technology 226,618 0.05 3,155 Cintas 158,716 0.04 15,200 Marvell Technology 141,350 0.03 9,026 Fastenal 275,310 0.06 10,300 Maxim Integrated Products 210,525 0.05 9,645 Fidelity National Information Services 384,748 0.09 6,432 Microchip Technology 185,999 0.04 8,441 Fiserv 384,196 0.09 36,900 Micron Technology 828,519 0.20 2,500 FleetCor Technologies 238,432 0.06 8,100 Motorola Solutions 348,260 0.08 6,541 Iron Mountain 162,135 0.04 6,200 NCR 115,789 0.03 3,621 Linkedin class ‘A’ shares 533,240 0.13 10,836 Network Appliance 287,987 0.07 2,900 Manpower 126,787 0.03 17,308 Nvidia 222,448 0.05 10,971 Paychex 324,785 0.08 8,065 NXP Semiconductors 395,168 0.09 9,629 Republic Services 248,498 0.06 56,788 Qualcomm 2,706,740 0.64 4,133 Robert Half International 154,797 0.04 7,693 SanDisk 483,412 0.11

23 BlackRock Authorised Contractual Scheme 24 Portfolio Statement continued

Holding or Market % of Holding or U underlying Market % of Nominal Value Total Net nominal E exposure Value Total Net Value Investment £ Assets Value Investment £ £ Assets 10,595 Seagate Technology 451,795 0.11 DERIVATIVES – 0.00% 6,155 Skyworks Solutions 287,016 0.07 Futures – 0.00% 36,014 Texas Instruments 1,234,766 0.29 14 S&P 500 E-Mini Index March 2015 921,392 16,354 0.00 7,683 Western Digital 545,410 0.13 8,745 Xilinx 242,734 0.06 Portfolio of investments 423,295,136 99.79 37,476,084 8.85 Net other assets 879,615 0.21 Tobacco – 1.37% Total net assets £424,174,751 100.00 67,720 Altria 2,139,418 0.50 Unless otherwise stated, all holdings are quoted in ordinary shares and listed on a recognised exchange. 12,607 Lorillard 508,808 0.12 Note: Fund launched on 27 June 2014, therefore no comparatives have been given. * Related party to the Fund. 53,189 Philip Morris International 2,778,074 0.65 Underlying exposure has been calculated according to the guidelines issued by the European Securities and Markets Authority (“ESMA”) 10,594 Reynolds American 436,533 0.10 and represents the market value of an equivalent position in the assets underlying each financial derivative instrument. 5,862,833 1.37 Travel & Leisure – 2.39% 6,419 American Airlines 220,739 0.05 14,323 Carnival 416,302 0.10 1,040 Chipotle Mexican Grill 456,279 0.11 4,800 Darden Restaurants 180,518 0.04 6,905 Delta Air Lines 217,745 0.05 3,323 Expedia 181,915 0.04 14,750 Hertz Global 235,735 0.06 14,296 239,115 0.06 7,299 International Game Technology 80,749 0.02 13,984 Las Vegas Sands 521,513 0.12 7,716 Marriott International 386,134 0.09 33,243 McDonald’s 1,997,671 0.47 13,200 MGM Mirage 180,741 0.04 1,792 Priceline.com 1,310,651 0.31 5,137 Royal Caribbean 271,535 0.06 6,300 Southwest Airlines 170,909 0.04 24,712 Starbucks 1,300,381 0.31 5,899 Starwood Hotels & Resorts Worldwide 306,669 0.07 3,600 TripAdvisor 172,306 0.04 2,890 United Continental Holdings 123,903 0.03 4,109 Wyndham Worldwide 225,998 0.05 2,900 Wynn Resorts 276,562 0.07 14,726 Yum! Brands 687,922 0.16 10,161,992 2.39

25 BlackRock Authorised Contractual Scheme 26 Statement of Total Return Balance Sheet for the period from 27 June 2014 to 31 December 2014 at 31 December 2014

For the period 31.12 .2014 from 27.6.2014 Notes £ £ to 31.12.2014 Assets: Notes £ £ Investment assets 423,295,136 Income – Debtors 7 561,818 Net capital gains during the period 2 55,813,209 – Cash and bank balances 8 498,049 Revenue 3 4,176,708 Total other assets 1,059,867 Expenses 4 (344,921) Total assets 424,355,003 Finance costs: Interest 6 (311) Liabilities: Net revenue before taxation 3,831,476 – Creditors 9 (180,252) Taxation 5 (10,741) Total other liabilities (180,252) Net revenue after taxation for the period 3,820,735 Total liabilities (180,252) Total return before distributions 59,633,944 Net assets £424,174,751 Distributions 6 (3,810,916) Change in unitholders’ funds from investment activities £55,823,028 Unitholders’ funds £424,174,751

Note: Fund launched on 27 June 2014, therefore, no comparatives have been given. Statement of Change in Unitholders’ Funds for the period from 27 June 2014 to 31 December 2014 E E Tracey (Director) For the period A M Lawrence (Director) from 27.6.2014 BlackRock Fund Managers Limited to 31.12.2014 19 February 2015 £ £ Opening net assets – Amounts received on creation of units 392,746,956 Amounts paid on cancellation of units (28,206,149) 364,540,807 Change in unitholders’ funds from investment activities 55,823,028 Retained distribution on accumulation units 3,810,916 Closing net assets £424,174,751

Note: Fund launched on 27 June 2014, therefore, no comparatives have been given.

27 BlackRock Authorised Contractual Scheme 28 Notes to Financial Statements for the period from 27 June 2014 to 31 December 2014

1. Accounting and Distribution Policies (h) The investments of the Fund have been valued at market values, defined as fair value, which Accounting Policies is usually bid value at close of business on the last business day of the accounting period. In (a) The financial statements have been prepared in accordance with the Statement of the case of an investment which is not quoted, listed or dealt in on a recognised market, or Recommended Practice (“SORP”) for Authorised Funds issued by the in respect of which a listed, traded or dealt price or quotation is not available at the time of Association (subsequently The Investment Association) in October 2010. valuation, the fair value of such investment shall be estimated with care and in good faith by a Fund units are puttable instruments unless they meet all three of the following conditions, in competent professional person, body, firm or corporation including the Investment Manager’s this event they are classified as equity: pricing committee and such fair value shall be determined on the basis of the probable realisation value of the investment. The Investment Manager, in agreement with the Directors – the Fund is a stand-alone fund or is the sole sub-fund of an umbrella; of the Manager, shall be entitled to adopt an alternative method of valuing any particular asset – the Fund has only a single class of units; and if it considers that the methods of valuation set out above do not provide a fair valuation of a – the Fund is not obliged to distribute by way of cash (where, for example, only accumulation particular asset. units are in issue) any part of the total return to unitholders. (i) Any transactions in foreign currencies are translated into Sterling at the rates of exchange The Fund meets these three conditions and therefore the accounts have been prepared to ruling on the date of any such transaction. Assets and liabilities in foreign currencies are reflect the classification of the Fund’s units as equity. translated into Sterling at the exchange rates ruling at the close of business on the last (b) Dividends on quoted ordinary shares and preference shares are recognised when the business day of the accounting period. Revenue items in foreign currencies are translated securities are quoted ex-dividend. Where such securities are not quoted, dividends are into Sterling at the exchange rate when the revenue is received. recognised when they are declared. (j) Where appropriate, certain permitted financial instruments such as derivatives or forward US REIT dividend revenue is accounted for partly as revenue and partly as capital, depending currency contracts are used for efficient portfolio management. on the underlying REIT distribution. Distribution Policies All revenue is recognised at a gross amount that includes any withholding taxes but excludes (k) The ordinary element of stock dividends is treated as revenue but does not form part of the any other taxes such as attributable tax credits. distribution. Bank interest is recognised on an accruals basis. (l) All of the net revenue available for distribution at the final accounting period end will be (c) Ordinary stock dividends are recognised wholly as revenue and are based on the market value retained within the Fund, as all unitholders are accumulation unitholders. Although the income of the shares on the date they are quoted ex-dividend. Where an enhancement is offered, the is accumulated it is still deemed to arise directly to the investor. Should expenses and taxation amount by which the market value of the shares (on the date they are quoted ex-dividend) together exceed revenue, there will be no distribution and the shortfall will be met from capital. exceeds the cash dividend is taken to capital. (d) The underlying circumstances behind both special dividends and share buy backs are reviewed on a case by case basis in determining whether the amount is revenue or capital in nature. Amounts recognised as revenue form part of the distribution. Any tax treatment will follow the accounting treatment of the principal amount. (e) Underwriting commission is wholly recognised as revenue when the issue takes place, except where the Fund is required to take up some or all of the shares underwritten, in which case an appropriate proportion of the commission received is deducted from the cost of those shares. (f) All expenses, except those relating to the purchase and sale of investments are charged against revenue. All expenses are recognised on an accruals basis. (g) No provision for corporation tax is made due to the tax transparent nature of the Fund, in accordance with section 1121 of Corporation Tax Act 2010. Instead, the unitholders of the Fund are treated as if they owned the underlying assets directly, and are taxed on their share of the income derived from the underlying assets.

29 BlackRock Authorised Contractual Scheme 30 Notes to Financial Statements continued

2. net Capital Gains During the Period 5. Taxation

For the period (a) Analysis of tax charge in the period from 27.6.2014 For the period to 31.12.2014 from 27.6.2014 £ to 31.12.2014 The net capital gains comprise: £ Gains on non-derivative securities 55,724,902 Overseas tax 10,741 Gains on derivative contracts 52,107 Total current tax charge for the period £10,741 Currency gains 38,742 Custodian transaction costs (2,542) 6. Finance Costs Net capital gains £55,813,209 For the period from 27.6.2014 3. Revenue to 31.12.2014 £ For the period Final distribution 3,810,916 from 27.6.2014 to 31.12.2014 Net distribution for the period 3,810,916 £ Finance costs: Interest 311 Interest from UK bank deposits 65 Finance costs £3,811,227 Overseas dividends 4,166,824 Stock dividends 9,819 Net revenue after taxation for the period 3,820,735 Total revenue £4,176,708 Less: Non distributable stock dividends (9,819) Net distribution for the period £3,810,916 4. Expenses Details of the final distribution per unit is set out in the table on page 38. For the period from 27.6.2014 7. Debtors to 31.12.2014 £ 31.12 .2014 Payable to the Manager or associates of the Manager: £ – Manager’s service charge 313,637 Accrued revenue 561,818 – Registrar’s fees 3 Total debtors £561,818 313,640 8. Cash and Bank Balances Payable to the Depositary or associates of the Depositary: – Depositary’s fees 16,296 31.12 .2014 £ 16,296 Amounts held at futures clearing houses and brokers 32,426 Other expenses: Cash and bank balances 465,623 – Audit fee 6,691 Total cash and bank balances £498,049 – FCA fee 105 – Safe custody fees 8 ,18 9 14,985 Total expenses £344,921

31 BlackRock Authorised Contractual Scheme 32 Notes to Financial Statements continued

9. Creditors Risk Impact of risk 31.12 .2014 Liquidity The risk of low market liquidity, through reduced trading volumes, affecting the £ ability of the Fund to trade financial instruments at values previously indicated by Accrued Audit fee 6,691 financial brokers. Accrued FCA fee 105 All stocks are valued daily. Stocks identified as being illiquid are reviewed Accrued Manager’s service charge 161,843 for pricing accuracy as the need arises and on a formal monthly basis by the Accrued Registrar’s fee 3 BlackRock Pricing Committee. Accrued Safe custody fees 2,766 The Fund invests primarily in companies based in the US which is typically Accrued Depositary’s fee 8,451 considered to be a territory operating with high levels of liquidity. From time to Custodian transaction costs 393 time, however, market liquidity may be affected by economic events. A security may be deemed illiquid due to a lack of trading volume in the security or if the Total creditors £180,252 security is privately placed and not traded in any public market or is otherwise restricted from trading. 10. Derivatives and Other Financial Instruments (a) The Fund’s financial instruments comprise securities and other investments, cash balances and To manage the risk, the Investment Manager undertakes research of investment debtors and creditors that arise directly from its operations, for example, in respect of sales and opportunities to select opportunities congruent with the Fund’s investment purchases awaiting settlement, amounts receivable for creations and payable for cancellation of objective. units and debtors for accrued revenue. Counterparty The risk of entering an arrangement with a counterparty, which is itself subject to The Manager shall take the risks it deems reasonable to meet the investment objective. These financial risks which may affect its ability to trade as a going concern. risks include the following: The Manager maintains a list of approved counterparties. This list is regularly monitored and revised for changes based on the counterparty’s credit- Risk Impact of risk worthiness, market reputation and expectations of future financial performance. Foreign currency The risk of changes to foreign currency rates materially affecting the Sterling Transactions will only be opened with financial intermediaries on the approved equivalent value of non-Sterling denominated assets and liabilities accounted for counterparties list. by the Fund. The Fund’s use of exchange traded derivatives are considered to be free of The Fund is accounted for in Sterling and holds financial assets and financial counterparty risk if the derivative is traded on an exchange where the clearing liabilities denominated in other international currencies. house is backed by an appropriate performance guarantee and it is characterised To manage the risk, the Fund may enter into forward currency contracts for the by a daily mark-to-market valuation of the derivative position and at least daily purposes of efficient portfolio management. At 31 December 2014, the Fund has margining. no open forward currency contracts. At 31 December 2014, the market value of the exchange traded derivatives held Market price The valuation of the Fund’s investments is calculated with reference to market by the Fund was £16,354. Exchange traded derivatives are primarily traded with prices quoted by financial agencies and brokers. Movements to those market the following counterparty: Goldman Sachs. prices may materially affect the value of the Fund’s investments, which may move At 31 December 2014, the Fund had provided margin of £32,426 to counterparties down as well as up. relating to derivatives. To manage the risk, the Manager undertakes research in order to achieve the best These risks are monitored by the Manager in pursuance of the investment objective and policy as price for any transactions entered into on behalf of the Fund. set out in the Contractual Scheme Deed. Adherence to investment guidelines and to investment and borrowing powers set out in the Contractual Scheme Deed, the Prospectus and in the rules of the Collective Investment Schemes Sourcebook mitigates the risk of excessive exposure to any particular type of security or issuer. Further information on the investment portfolio is set out in the Investment Report and Portfolio Statement.

33 BlackRock Authorised Contractual Scheme 34 Notes to Financial Statements continued

(b) Currency Exposures 13. Investment Management A proportion of the net assets of the Fund are denominated in currencies other than Sterling, The Manager has delegated to its associate, BlackRock Investment Management (UK) Limited, with the effect that the Balance Sheet and Statement of Total Return can be affected by currency responsibility for day-to-day investment management of the Fund. movements. The currency profile held at 31 December 2014 was as follows: 14. Related Parties Parties are considered to be related if one party has the ability to control the other party or Currency Net Assets/(Liabilities) exercise significant influence over the other party in making financial or operational decisions. Monetary Non-monetary The following entities were related parties of the Fund during the period ended 31 December 2014: Exposures Exposures Total Manager/Registrar: BlackRock Fund Managers Limited 31.12 .2014 31.12 .2014 31.12 .2014 Investment Manager: BlackRock Investment Management (UK) Limited Currency £ £ £ Depositary: BNY Mellon Trust & Depositary (UK) Limited UK sterling 29,321 (180,252) (150,931) The ultimate holding company of the Manager and Investment Manager is BlackRock Inc. US dollar 468,728 423,856,954 424,325,682 (“BlackRock”), a company incorporated in Delaware, USA. PNC Financial Services Group Inc. (“PNC”) Total £498,049 £423,676,702 £424,174,751 is a substantial shareholder in BlackRock. The Manager acts as either principal or agent for the Depositary in respect of all transactions of (c) Interest Rate Risk Profile of Financial Assets and Liabilities units of the Fund. The aggregate monies received through creation and paid through cancellation The interest rate risk profile of financial assets and liabilities as at 31 December 2014 was of units are disclosed in the Statement of Change in Unitholders’ Funds. Any amounts due to as follows: or from the Manager at the period end are disclosed in Notes 7 and 9. Management fees and registration fees paid to BlackRock Fund Managers Limited and Depositary’s fees paid to BNY Floating Rate Fixed Rate Financial Assets Mellon Trust & Depositary (UK) Limited are shown in Note 4. The balances due at the period end in Financial Financial not Carrying Assets Assets Interest Total respect of these fees are shown in Note 9. Currency £ £ £ £ BlackRock Investment Management (UK) Limited, in accordance with the Contractual Scheme UK sterling 29,321 – – 29,321 Deed, may enter into commission sharing arrangements with related parties (including, without US dollar 468,728 – 423,856,954 424,325,682 limitation, brokers who are affiliated with the BlackRock Group), which may result in the Fund Total £498,049 £0 £423,856,954 £424,355,003 benefiting from research or execution services which BlackRock Investment Management (UK) Limited believes are useful in the investment decision-making or trade execution process. Such research or execution services may include, without limitation and to the extent permitted by Floating Rate Financial applicable law: research reports on companies, industries and securities; and the provision of Financial Liabilities not economic and financial information and analysis. Due to the bundled nature of these services and Liabilities Carrying Interest Total Currency £ £ £ the application of such benefits across a range of BlackRock managed funds, it is not feasible to quantify the benefit to the Fund. UK sterling – (180,252) (180,252) Total £0 £(180,252) £(180,252) The Fund’s investments in other BlackRock related products are detailed on the Portfolio Statement. There are no material amounts of non-interest bearing financial assets, other than equities, which do not have maturity dates. Material Unitholders The following investor held more than 20% of the voting units in issue in the Fund and as a result is 11. Contingent Assets and Liabilities considered to be a related party of the Fund. There were no contingent assets or liabilities at the balance sheet date. As at 31 December 2014:

12. Efficient Portfolio Management Techniques % of voting units The Fund may engage in derivative transactions for the purpose of efficient portfolio management. Held by: in issue No. of units held Please see further disclosures in Note10 (a). Zurich Assurance Limited 100% 367,361,940 There were no securities on loan or collateral outstanding at the balance sheet date. All related party transactions were carried out at arm’s length in the ordinary course of business.

35 BlackRock Authorised Contractual Scheme 36 Notes to Financial Statements continued Distribution Table for the period from 27 June 2014 to 31 December 2014

15. Portfolio Transaction Costs Final Distribution in Pence per Unit Summary of total purchase costs: T1A Accumulation Units For the period For the period Net revenue 1.0374 from 27.6.2014 from 27.6.2014 to 31.12.2014 to 31.12.2014 Distribution payable 1.0374 £ £ Purchases before transaction costs 397,071,963 Commissions and other costs (including stamp duty) 801 Total purchase costs 801 Gross purchases total £397,072,764

Summary of total sale costs:

For the period For the period from 27.6.2014 from 27.6.2014 to 31.12.2014 to 31.12.2014 £ £ Gross sales before transaction costs 29,411,539 Commissions and other costs (4,232) Total sale costs (4,232) Total sales net of transaction costs £29,407,307

16. Non Adjusting Post Balance Sheet Event Since the last business day of the accounting period, the Fund’s quoted bid price has risen as shown below:

Bid price as at Bid price as at Rise Class 13.2.2015 31.12 .2014 (%) T1A Accumulation 119.1p 115.4p 3.2

37 BlackRock Authorised Contractual Scheme 38 Authorised Status Statement of Manager’s and Depositary’s Responsibilities

BlackRock ACS US Equity Tracker Fund is a fund of the ACS umbrella which is an Authorised The Manager is required by the rules of the Sourcebook to prepare the financial statements for each Contractual Scheme under Section 243 of the Financial Services and Markets Act 2000 and is financial period. These financial statements must be prepared in accordance with generally accepted established as a UCITS institutional Scheme under the Financial Conduct Authority’s Collective accounting standards in the United Kingdom to give a true and fair view of the state of affairs of the Investment Schemes Sourcebook (the “Sourcebook”). Scheme at the period end and of the net revenue for the period.

The financial statements should comply with the disclosure requirements of the Statement of Recommended Practice (the “SORP”) for Authorised Funds issued by the Investment Management Association (subsequently The Investment Association) and must comply with any relevant provisions of the Contractual Scheme Deed.

The Manager is responsible for keeping such accounting records as are necessary to enable it to ensure that the financial statements comply with the Sourcebook, the SORP and the Contractual Scheme Deed.

The Depositary is responsible for the safekeeping of all the property of the Authorised Contractual Scheme (the “Scheme”) (other than tangible moveable property) which is entrusted to it and for the collection of revenue that arises from that property.

It is the duty of the Depositary to take reasonable care to ensure that the Scheme is managed in accordance with the Sourcebook, the Scheme’s Contractual Scheme Deed and Prospectus, in relation to the pricing of, and dealings in, units in the Scheme; the application of revenue of the Scheme; and the investment and borrowing powers of the Scheme.

Report of the Depositary

Having carried out such procedures as we considered necessary to discharge our responsibilities as Depositary of the Scheme, it is our opinion, based on the information available to us and the explanations provided, that, in all material respects, the Manager:

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Scheme’s units and the application of the Scheme’s revenue in accordance with the Sourcebook, the Contractual Scheme Deed and Prospectus, and

(ii) has observed the investment and borrowing powers and restrictions applicable to the Scheme.

BNY Mellon Trust & Depositary London (UK) Limited 19 February 2015

39 BlackRock Authorised Contractual Scheme 40 Independent Auditor’s Report to the Unitholders of BlackRock Authorised Contractual Opinion on financial statements Scheme In our opinion the financial statements: We have audited the financial statements of BlackRock Authorised Contractual Scheme (the “Scheme”) for the period ended 31 December 2014 which comprise the Statement `` give a true and fair view of the financial position of the Scheme as at 31 December 2014 of Total Return, the Statement of Change in Unitholders’ Funds, the Balance Sheet, the and of the net revenue and the net gains on the scheme property of the Scheme for the related notes 1 to 16 and the Distribution Table. The financial reporting framework that period then ended; and has been applied in their preparation is applicable law and United Kingdom Accounting `` have been properly prepared in accordance with United Kingdom Generally Accepted Standards (United Kingdom Generally Accepted Accounting Practice). Accounting Practice.

This report is made solely to the unitholders of the Scheme, as a body, pursuant to Paragraph 4.5.12 of the rules of the Collective Investment Schemes Sourcebook of the Opinion on other matters prescribed by the rules of the Collective Investment Schemes Financial Conduct Authority. Our audit work has been undertaken so that we might state Sourcebook of the Financial Conduct Authority to the unitholders those matters we are required to state to them in an auditor’s report In our opinion: and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Scheme and the unitholders as a body, `` the financial statements have been properly prepared in accordance with the for our audit work, for this report, or for the opinions we have formed. Statement of Recommended Practice relating to Authorised Funds, the rules of the Collective Investment Schemes Sourcebook of the Financial Conduct Authority and Respective responsibilities of the Manager and auditor the Contractual Scheme Deed; As explained more fully in the Manager’s responsibilities statement set out on page 40, `` the information given in the Manager’s report for the financial period for which the the Manager is responsible for the preparation of the financial statements and for being financial statements are prepared is consistent with the financial statements; satisfied that they give a true and fair view. `` there is nothing to indicate that proper accounting records have not been kept or Our responsibility is to audit and express an opinion on the financial statements in that the financial statements are not in agreement with those records; and accordance with applicable law and International Standards on Auditing (UK and `` we have received all the information and explanations which, to the best of our Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical knowledge and belief, are necessary for the purposes of our audit. Standards for Auditors.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Scheme’s Ernst & Young LLP Edinburgh circumstances and have been consistently applied and adequately disclosed; the Statutory Auditor 19 February 2015 reasonableness of significant accounting estimates made by the Manager; and the overall presentation of the financial statements. In addition, we read all the financial and non financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

41 BlackRock Authorised Contractual Scheme 42 Notes General Information

Manager & Registrar BlackRock Fund Managers Limited 12 Throgmorton Avenue, London EC2N 2DL Telephone: 020 7743 3000 Dealing and Investor Services: 0800 44 55 22

Member of The Investment Association (formerly the Investment Management Association) and authorised and regulated by the Financial Conduct Authority.

Directors of the Manager G D Bamping R A Damm N C D Hall* R A R Hayes A M Lawrence A J Stenning E E Tracey * Non-executive Director.

Depositary BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street, London EC4V 4LA

Authorised and regulated by the Financial Conduct Authority.

Investment Manager BlackRock Investment Management (UK) Limited 12 Throgmorton Avenue, London EC2N 2DL

Authorised and regulated by the Financial Conduct Authority.

Auditor Ernst & Young LLP 1 More London Place, London SE1 2AF

Custodian The Bank of New York Mellon (International) Limited 1 Canada Square, London E14 5AL

BlackRock’s proxy voting agent is ISS (Institutional Shareholder Services).

This Report relates to the packaged products of and is issued by: BlackRock Fund Managers Limited 12 Throgmorton Avenue, London EC2N 2DL Telephone: 020 7743 3000 Dealing and Investor Services: 0800 44 55 22 blackrock.co.uk

For your protection, telephone calls are usually recorded.

43 BlackRock Authorised Contractual Scheme 44 ABOUT US BlackRock is a premier provider of asset management, risk management, and advisory services to institutional, intermediary, and individual clients worldwide. As of 31 December 2014, the fi rm manages £2.99 trillion across asset classes in separate accounts, mutual funds, other pooled investment vehicles, and the industry-leading iShares® exchange-traded funds.

Through BlackRock Solutions®, the fi rm offers risk management and advisory services that combine capital markets expertise with proprietarily-developed analytics, systems, and technology. Through BlackRock Solutions, the fi rm provides risk management and enterprise investment services for over 175 clients.

BlackRock serves clients in North and South America, Europe, Asia, Australia, Africa, and the Middle East. Headquartered in New York, the fi rm maintains offi ces in over 30 countries around the world.

For more information 0800 44 55 22 blackrock.co.uk