UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21197
811-21300
Name of Fund: WCMA Government Securities Fund
Master Government Securities Trust
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, WCMA Government Securities Fund and Master Government Securities
Trust, 800 Scudders Mill Road, Plainsboro, NJ 08536. Mailing address:
P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 03/31/07
Date of reporting period: 04/01/06 - 03/31/07
Item 1 - Report to Stockholders
Annual Report
March 31, 2007
WCMA Government
Securities Fund
WCMA Government Securities Fund
Important Tax Information
The following information is provided with respect to the ordinary income
distributions paid by WCMA Government Securities Fund for the fiscal year ended
March 31, 2007:
- --------------------------------------------------------------------------------
Federal Obligation Interest
- --------------------------------------------------------------------------------
Months Paid: April 2006 - March 2007 ........................ 18.22%*
- --------------------------------------------------------------------------------
Interest-Related Dividends for Non-U.S. Residents
- --------------------------------------------------------------------------------
Months Paid: April 2006 - December 2006 ..................... 99.99%**
January 2007 - March 2007 ...................... 97.99%**
- --------------------------------------------------------------------------------
Qualified Short-Term Capital Gains for Non-U.S. Residents
- --------------------------------------------------------------------------------
Months Paid: April 2006 - March 2007 ........................ 0.01%**
- --------------------------------------------------------------------------------
* The law varies in each state as to whether and what percentage of dividend
income attributable to federal obligations is exempt from state income
tax. We recommend that you consult your tax adviser to determine if any
portion of the dividends you received is exempt from state income taxes.
** Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for nonresident aliens and foreign
corporations.
2 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
A Letter to Shareholders
Dear Shareholder
For most financial markets, 2007 opened just as 2006 ended -- on a positive
trajectory. At the end of February and into March, however, global equity
markets registered their first significant decline since last summer. The market
jitters were triggered by a significant setback in the Chinese market and were
exacerbated by several concerns, notably a weakening economy, some disappointing
corporate earnings announcements, escalating geopolitical concerns in the Middle
East and increasing delinquencies in the subprime mortgage market. Despite the
recent spate of volatility, underlying stock market fundamentals appear quite
sound, supported by a generally favorable global economic backdrop, tame
inflation, relatively low interest rates and attractive valuations.
Not unlike the equity market, the bond market also has seen volatility recently
as observers have attempted to interpret mixed economic signals. A bond market
rally late last year reversed itself early in 2007 as economic data
strengthened. Prices improved (and yields fell) again in February as equities
struggled, but retrenched slightly in March. Notably, the Treasury curve
remained inverted for much of 2006 and into 2007. The 30-year Treasury yield
stood at 4.84% at the end of March 2007, while the one-month Treasury offered
the highest yield on the curve at 5.07%.
For its part, the Federal Reserve Board (the Fed) has left the target short-term
interest rate on hold at 5.25% since first pausing in its interest rate-hiking
campaign on August 8, 2006. Although the central bankers continue to express
concern about potential inflationary pressures, they also have made reference to
signs of economic weakness in their public statements. Most observers expect the
Fed to keep interest rates on hold for now.
Notwithstanding some recent volatility, most major market indexes managed to
post positive returns for the annual and semi-annual reporting periods ended
March 31, 2007:
Total Returns as of March 31, 2007 6-month 12-month
========================================================================================================
U.S. equities (Standard & Poor's 500 Index) + 7.38% +11.83%
- --------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) +11.02 + 5.91
- --------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) +14.85 +20.20
- --------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers Aggregate Bond Index) + 2.76 + 6.59
- --------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 1.93 + 5.43
- --------------------------------------------------------------------------------------------------------
High yield bonds (Credit Suisse High Yield Index) + 7.59 +11.82
- --------------------------------------------------------------------------------------------------------
If recent market movements are any guide, 2007 could be a year of enhanced
market volatility. As you navigate the uncertainties of the financial markets,
we encourage you to review your investment goals with your financial
professional and to make portfolio changes, as needed. For more reflection on
the markets, please ask your financial professional for the latest issue of
"What's Ahead in 2007: First Quarter Update," or view it online at
www.blackrock.com/funds. We thank you for trusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the months
and years ahead.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
Fund/Trust President and Trustee
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 3
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses related
to transactions, including sales charges, redemption fees and exchange fees; and
(b) operating expenses, including advisory fees, distribution fees including
12b-1 fees, and other Fund expenses. The following example (which is based on a
hypothetical investment of $1,000 invested on October 1, 2006 and held through
March 31, 2007) is intended to assist shareholders both in calculating expenses
based on an investment in the Fund and in comparing these expenses with similar
costs of investing in other mutual funds.
The first table below provides information about actual account values and
actual expenses. In order to estimate the expenses a shareholder paid during the
period covered by this report, shareholders can divide their account value by
$1,000 and then multiply the result by the number in the first line under the
heading entitled "Expenses Paid During the Period."
The second table below provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses. In order to assist
shareholders in comparing the ongoing expenses of investing in this Fund and
other funds, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders' ongoing
costs only and do not reflect any transactional expenses, such as sales charges,
redemption fees or exchange fees. Therefore, the second table is useful in
comparing ongoing expenses only, and will not help shareholders determine the
relative total expenses of owning different funds. If these transactional
expenses were included, shareholder expenses would have been higher.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value October 1, 2006 to
October 1, 2006 March 31, 2007 March 31, 2007
====================================================================================================================================
Actual
====================================================================================================================================
Class 1 $1,000 $1,018.10 $8.00
- ------------------------------------------------------------------------------------------------------------------------------------
Class 2 $1,000 $1,020.90 $5.19
- ------------------------------------------------------------------------------------------------------------------------------------
Class 3 $1,000 $1,022.50 $3.58
- ------------------------------------------------------------------------------------------------------------------------------------
Class 4 $1,000 $1,022.50 $3.58
====================================================================================================================================
Hypothetical (5% annual return before expenses)**
====================================================================================================================================
Class 1 $1,000 $1,016.97 $8.00
- ------------------------------------------------------------------------------------------------------------------------------------
Class 2 $1,000 $1,019.76 $5.19
- ------------------------------------------------------------------------------------------------------------------------------------
Class 3 $1,000 $1,021.36 $3.58
- ------------------------------------------------------------------------------------------------------------------------------------
Class 4 $1,000 $1,021.36 $3.58
- ------------------------------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (1.59% for Class 1, 1.03% for Class 2, .71% for Class
3 and .71% for Class 4), multiplied by the average account value over the
period, multiplied by 182/365 (to reflect the one-half year period shown).
Because the Fund is a feeder fund, the expense table example reflects the
expenses of both the feeder fund and the master trust in which it invests.
** Hypothetical 5% annual return before expenses is calculated by pro-rating
the number of days in the most recent fiscal half year divided by 365.
4 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Statement of Assets and Liabilities WCMA Government Securities Fund
As of March 31, 2007
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investment in Master Government Securities Trust (the "Trust"), at value
(identified cost -- $461,365,140) ............................................ $ 461,075,604
Prepaid expenses ............................................................... 41,275
---------------
Total assets ................................................................... 461,116,879
---------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Payables:
Administrator .............................................................. $ 93,838
Distributor ................................................................ 82,298 176,136
---------------
Accrued expenses and other liabilities ......................................... 35,317
---------------
Total liabilities .............................................................. 211,453
---------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ..................................................................... $ 460,905,426
===============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Class 1 Shares of beneficial interests, $.10 par value, unlimited number
of shares authorized ......................................................... $ 1,113,530
Class 2 Shares of beneficial interests, $.10 par value, unlimited number
of shares authorized ......................................................... 8,273,689
Class 3 Shares of beneficial interests, $.10 par value, unlimited number
of shares authorized ......................................................... 15,847,370
Class 4 Shares of beneficial interests, $.10 par value, unlimited number
of shares authorized ......................................................... 20,884,745
Paid-in capital in excess of par ............................................... 415,074,001
Undistributed realized capital gains on investments allocated
from the Trust -- net ........................................................ 1,627
Unrealized depreciation allocated from the Trust -- net ........................ (289,536)
---------------
Total accumulated losses -- net ................................................ (287,909)
---------------
Net Assets ..................................................................... $ 460,905,426
===============
===================================================================================================================================
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------------
Class 1 -- Based on net assets of $11,122,024 and 11,135,300 shares of
beneficial interests outstanding ............................................. $ 1.00
===============
Class 2 -- Based on net assets of $82,654,898 and 82,736,893 shares of
beneficial interests outstanding ............................................. $ 1.00
===============
Class 3 -- Based on net assets of $158,327,396 and 158,473,697 shares of
beneficial interests outstanding ............................................. $ 1.00
===============
Class 4 -- Based on net assets of $208,801,108 and 208,847,447 shares of
beneficial interests outstanding ............................................. $ 1.00
===============
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 5
Statement of Operations WCMA Government Securities Fund
For the Year Ended March 31, 2007
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Interest from affiliates ....................................................... $ 119,405
Net investment income allocated from the Trust:
Interest and amortization of premium and discount earned ................... 22,921,041
Expenses ................................................................... (1,148,731)
---------------
Total income ................................................................... 21,891,715
---------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Administration fees ............................................................ $ 1,126,607
Service and distribution fees -- Class 4 ....................................... 682,308
Service and distribution fees -- Class 2 ....................................... 624,480
Service and distribution fees -- Class 3 ....................................... 592,354
Registration fees .............................................................. 353,579
Service and distribution fees -- Class 1 ....................................... 143,953
Printing and shareholder reports ............................................... 39,152
Professional fees .............................................................. 24,274
Transfer agent fees -- Class 4 ................................................. 9,143
Transfer agent fees -- Class 3 ................................................. 7,947
Transfer agent fees -- Class 2 ................................................. 4,637
Transfer agent fees -- Class 1 ................................................. 730
Other .......................................................................... 10,529
---------------
Total expenses before waiver ................................................... 3,619,693
Waiver of expenses ............................................................. (1,151,494)
---------------
Total expenses after waiver .................................................... 2,468,199
---------------
Investment income -- net ....................................................... 19,423,516
---------------
===================================================================================================================================
Realized & Unrealized Gain Allocated from the Trust -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain on investments -- net ............................................ 2,576
Change in unrealized depreciation on investments -- net ........................ 151,984
---------------
Total realized and unrealized gain -- net ...................................... 154,560
---------------
Net Increase in Net Assets Resulting from Operations ........................... $ 19,578,076
===============
See Notes to Financial Statements.
6 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Statements of Changes in Net Assets WCMA Government Securities Fund
For the Year Ended
March 31,
-----------------------------------
Increase (Decrease) in Net Assets: 2007 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ....................................................... $ 19,423,516 $ 12,127,085
Realized gain -- net ........................................................... 2,576 2,296
Change in unrealized depreciation -- net ....................................... 151,984 67,316
-----------------------------------
Net increase in net assets resulting from operations ........................... 19,578,076 12,196,697
-----------------------------------
===================================================================================================================================
Dividends & Distributions to Shareholders
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net:
Class 1 .................................................................... (511,697) (329,350)
Class 2 .................................................................... (3,778,640) (2,663,391)
Class 3 .................................................................... (7,008,543) (5,571,023)
Class 4 .................................................................... (8,124,636) (3,563,321)
Realized gain -- net:
Class 1 .................................................................... (38) (94)
Class 2 .................................................................... (219) (642)
Class 3 .................................................................... (332) (1,150)
Class 4 .................................................................... (360) (410)
-----------------------------------
Net decrease in net assets resulting from dividends and distributions
to shareholders .............................................................. (19,424,465) (12,129,381)
-----------------------------------
===================================================================================================================================
Beneficial Interests Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from beneficial
interests transactions ....................................................... (40,234,908) 89,944,441
-----------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................................ (40,081,297) 90,011,757
Beginning of year .............................................................. 500,986,723 410,974,966
-----------------------------------
End of year .................................................................... $ 460,905,426 $ 500,986,723
===================================
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 7
Financial Highlights WCMA Government Securities Fund
Class 1
-------------------------------------------------------------------
For the
Period
The following per share data For the Year Ended March 20,
and ratios have been derived March 31, 2003+
from information provided in --------------------------------------------------- to March 31,
the financial statements. 2007 2006 2005 2004 2003
================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------
Investment income -- net ................. .0351 .0199 .0027 .0004 .0003
Realized and unrealized gain (loss) -- net .0003 .0001 (.0012) (.0002) .0002
-------------------------------------------------------------------
Total from investment operations ......... .0354 .0200 .0015 .0002 .0005
-------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ............. (.0351) (.0199) (.0027) (.0004) (.0003)
Realized gain -- net ................. --** --** --** (.0001) --
-------------------------------------------------------------------
Total dividends and distributions ........ (.0351) (.0199) (.0027) (.0005) (.0003)
-------------------------------------------------------------------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================================================================
Total investment return .................. 3.55% 2.01% .27% .05% .05%
===================================================================
================================================================================================================
Ratios to Average Net Assets*
- ----------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver
and/or reimbursement ................... 1.59% 1.59% 1.41% 1.09% .02%
===================================================================
Total expenses ........................... 1.59% 1.59% 1.60% 1.58% .02%
===================================================================
Total investment income and
realized gain -- net ................... 3.51% 1.99% .24% .04% .03%
===================================================================
================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 11,122 $ 18,837 $ 16,718 $ 22,260 $ 25
===================================================================
Class 2
-------------------------------------------------------------------
For the
Period
The following per share data For the Year Ended March 20,
and ratios have been derived March 31, 2003+
from information provided in --------------------------------------------------- to March 31,
the financial statements. 2007 2006 2005 2004 2003
================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------
Investment income -- net ................. .0407 .0259 .0070 .0015 .0003
Realized and unrealized gain (loss) -- net .0004 .0001 (.0011) (.0001) .0002
-------------------------------------------------------------------
Total from investment operations ......... .0411 .0260 .0059 .0014 .0005
-------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ............. (.0407) (.0259) (.0070) (.0015) (.0003)
Realized gain -- net ................. --** --** --** (.0001) --
-------------------------------------------------------------------
Total dividends and distributions ........ (.0407) (.0259) (.0070) (.0016) (.0003)
-------------------------------------------------------------------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================================================================
Total investment return .................. 4.13% 2.63% .70% .16% .05%
===================================================================
================================================================================================================
Ratios to Average Net Assets*
- ----------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver
and/or reimbursement ................... 1.03% .99% .98% .97% .02%
===================================================================
Total expenses ........................... 1.28% 1.27% 1.28% 1.26% .02%
===================================================================
Total investment income and
realized gain -- net ................... 4.07% 2.58% .68% .15% .03%
===================================================================
================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 82,655 $ 115,872 $ 119,718 $ 137,566 $ 25
===================================================================
* Includes the Fund's share of the Trust's allocated expenses and/or
investment income and realized gain.
** Amount is less than $(.0001) per share.
+ Effective date of the Fund's registration.
See Notes to Financial Statements.
8 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Financial Highlights (concluded) WCMA Government Securities Fund
Class 3
-------------------------------------------------------------------
For the
Period
The following per share data For the Year Ended March 20,
and ratios have been derived March 31, 2003+
from information provided in --------------------------------------------------- to March 31,
the financial statements. 2007 2006 2005 2004 2003
================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------
Investment income -- net ................. .0439 .0291 .0102 .0047 .0003
Realized and unrealized gain (loss) -- net .0004 .0001 (.0010) (.0001) .0002
-------------------------------------------------------------------
Total from investment operations ......... .0443 .0292 .0092 .0046 .0005
-------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ............. (.0439) (.0291) (.0102) (.0047) (.0003)
Realized gain -- net ................. --** --** --** (.0001) --
-------------------------------------------------------------------
Total dividends and distributions ........ (.0439) (.0291) (.0102) (.0048) (.0003)
-------------------------------------------------------------------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================================================================
Total investment return .................. 4.47% 2.96% 1.03% .48% .05%
===================================================================
================================================================================================================
Ratios to Average Net Assets*
- ----------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver
and/or reimbursement ................... .71% .67% .66% .65% .02%
===================================================================
Total expenses ........................... .98% .97% .98% .96% .02%
===================================================================
Total investment income and
realized gain -- net ................... 4.41% 2.88% 1.01% .48% .03%
===================================================================
================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 158,327 $ 158,500 $ 193,195 $ 224,278 $ 25
===================================================================
Class 4
-------------------------------------------------------------------
For the
Period
The following per share data For the Year Ended March 20,
and ratios have been derived March 31, 2003+
from information provided in --------------------------------------------------- to March 31,
the financial statements. 2007 2006 2005 2004 2003
================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------
Investment income -- net ................. .0439 .0291 .0102 .0047 .0003
Realized and unrealized gain (loss) -- net .0003 .0002 (.0012) --++ .0002
-------------------------------------------------------------------
Total from investment operations ......... .0442 .0293 .0090 .0047 .0005
-------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ............. (.0439) (.0291) (.0102) (.0047) (.0003)
Realized gain -- net ................. --** --** --** --** --
-------------------------------------------------------------------
Total dividends and distributions ........ (.0439) (.0291) (.0102) (.0047) (.0003)
-------------------------------------------------------------------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================================================================
Total investment return .................. 4.47% 2.96% 1.03% .47% .05%
===================================================================
================================================================================================================
Ratios to Average Net Assets*
- ----------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver
and/or reimbursement ................... .71% .67% .66% .65% .02%
===================================================================
Total expenses ........................... .98% .98% .97% .96% .02%
===================================================================
Total investment income and
realized gain -- net ................... 4.41% 3.10% .91% .48% .03%
===================================================================
================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 208,801 $ 207,778 $ 81,344 $ 157,203 $ 25
===================================================================
* Includes the Fund's share of the Trust's allocated expenses and/or
investment income and realized gain.
** Amount is less than $(.0001) per share.
+ Effective date of the Fund's registration.
++ Amount is less than $.0001 per share.
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 9
Notes to Financial Statements WCMA Government Securities Fund
1. Significant Accounting Policies:
WCMA Government Securities Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a no load, diversified, open-end management
investment company. The Fund seeks to achieve its investment objective by
investing all of its assets in Master Government Securities Trust (the "Trust"),
which has the same investment objective and strategies as the Fund. The value of
the Fund's investment in the Trust reflects the Fund's proportionate interest in
the net assets of the Trust. The performance of the Fund is directly affected by
the performance of the Trust. The financial statements of the Trust, including
the Schedule of Investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statements. The Fund's financial
statements are prepared in conformity with U.S. generally accepted accounting
principles, which may require the use of management accruals and estimates.
Actual results may differ from these estimates. The percentage of the Trust
owned by the Fund at March 31, 2007 was 47.8%. The Fund is divided into four
classes, designated Class 1, Class 2, Class 3 and Class 4. Each Class 1, Class
2, Class 3 and Class 4 share represents interests in the same assets of the Fund
and has identical voting, dividend, liquidation and other rights and the same
terms and conditions, except that each class bears certain expenses related to
account maintenance and the distribution of such shares and the additional
incremental transfer agency costs resulting from the conversion of shares and
has exclusive voting with respect to matters relating to such shareholder
servicing and distribution expenditures. Income, expenses (other than expenses
attributed to a specific class) and realized and unrealized gains and losses on
investments are allocated daily to each class based on its relative net assets.
The following is a summary of significant accounting policies followed by the
Fund.
(a) Valuation of investments -- The Fund records its investments in the Trust at
fair value. Valuation of securities held by the Trust is discussed in Note 1(a)
of the Trust's Notes to Financial Statements, which are included elsewhere in
this report.
(b) Investment income and expenses -- The Fund records daily its proportionate
share of the Trust's income, expenses and realized and unrealized gains and
losses. In addition, the Fund accrues its own income and expenses.
(c) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(d) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(e) Dividends and distributions to shareholders -- The Fund declares dividends
daily and reinvests daily such dividends (net of non-resident alien tax and
backup withholding tax withheld) in additional fund shares at net asset value.
Dividends are declared from the total of net investment income. Distributions of
net realized gain, if any, on investments are paid at least annually.
(f) Investment transactions -- Investment transactions in the Trust are
accounted for on a trade date basis.
(g) Recent accounting pronouncements -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet in
connection with accounting for uncertainties in income tax positions taken or
expected to be taken by an entity, including mutual funds, before being measured
and recognized in the financial statements. Adoption of FIN 48 is required for
the last net asset value calculation in the first required financial statement
reporting period for fiscal years beginning after December 15, 2006. The impact
on the Fund's financial statements, if any, is currently being assessed.
In September 2006, "Statement of Financial Accounting Standards No. 157, Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS 157
and its impact on the Fund's financial statements, if any, has not been
determined.
In addition, in February 2007, FASB issued "Statement of Financial Accounting
Standards No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), which is effective for fiscal years beginning after
November
10 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Notes to Financial Statements (continued) WCMA Government Securities Fund
15, 2007. Early adoption is permitted as of the beginning of a fiscal year that
begins on or before November 15, 2007, provided the entity also elects to apply
the provisions of FAS 157. FAS 159 permits entities to choose to measure many
financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. FAS 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between entities that choose different measurement attributes for similar types
of assets and liabilities. At this time, management is evaluating the
implications of FAS 159 and its impact on the Fund's financial statements, if
any, has not been determined.
2. Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including Fund Asset
Management L.P. ("FAM"), with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. has
approximately a 34% economic and voting interest. The new company operates under
the BlackRock name and is governed by a board of directors with a majority of
independent members.
On August 31, 2006, shareholders of the Fund approved a new Investment Advisory
Agreement for the Trust with BlackRock Advisors, Inc., an indirect, wholly owned
subsidiary of BlackRock, Inc., which was reorganized into a limited liability
company and renamed BlackRock Advisors, LLC. The Investment Advisory Agreement
became effective on September 29, 2006. Prior to September 29, 2006, FAM was the
Trust's manager. The general partner of FAM is Princeton Services, Inc. ("PSI"),
an indirect, wholly owned subsidiary of Merrill Lynch, which is the limited
partner.
The Fund has entered into an Administration Agreement with BlackRock Advisors,
LLC. The Fund pays a monthly fee at an annual rate of .25% of the Fund's average
daily net assets for the performance of administrative services (other than
investment advice and related portfolio activities) necessary for the operation
of the Fund. Prior to September 29, 2006, FAM acted as the Fund's administrator
and was compensated at the same fee rate.
The Fund has adopted Distribution Plans in compliance with Rule 12b-1 under the
Investment Company Act of 1940, pursuant to which Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("MLPF&S"), a wholly owned subsidiary of Merrill Lynch,
receives service fees and distribution fees from the Fund. The fees are accrued
daily and paid monthly at annual rates based upon the average daily net assets
of the shares of the Fund as follows:
- --------------------------------------------------------------------------------
Service Distribution
Fee Fee
- --------------------------------------------------------------------------------
Class 1 .................................. .25% .75%
Class 2 .................................. .25% .425%
Class 3 .................................. .25% .125%
Class 4 .................................. .25% .125%
- --------------------------------------------------------------------------------
The ongoing service fee compensates MLPF&S for providing shareholder services to
respective shareholders. The ongoing distribution fee compensates MLPF&S for
providing shareholder and distribution related services to respective
shareholders. The Fund has entered into a contractual arrangement with the
Manager and MLPF&S to waive and/or reimburse a portion of the Fund's fees and
expenses to ensure that the net expenses for the Fund's Class 2 Shares is .32%
higher than that of CMA Government Fund, and Class 3 and Class 4 Shares is equal
to that of CMA Government Fund. The fee/expense waiver or reimbursement includes
servicing fees and distribution fees. This arrangement has a one-year term and
is renewable. The Distributor has voluntarily agreed to waive a portion of its
distribution fees in order to ensure that each class of shareholders receives a
positive yield on each daily dividend. For the year ended March 31, 2007, MLPF&S
earned fees of $2,043,095 of which $1,151,494 was waived.
Financial Data Services, Inc. ("FDS"), a wholly owned subsidiary of Merrill
Lynch, is the Fund's transfer agent. Interest is earned by the Fund from FDS
based on the difference, if any, between estimated and actual daily beneficial
share activity, which results in uninvested net proceeds from sales of Fund
shares.
Prior to September 29, 2006, certain officers and/or trustees of the Fund were
officers and/or directors of MLIM, FAM, PSI, FDS, and/or Merrill Lynch.
Commencing September 29, 2006, certain officers and/or trustees of the Fund are
officers and/or directors of BlackRock, Inc. or its affiliates.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 11
Notes to Financial Statements (concluded) WCMA Government Securities Fund
3. Beneficial Interests Transactions:
Net increase (decrease) in net assets derived from beneficial interests
transactions was $(40,234,908) and $89,944,441 for the years ended March 31,
2007 and March 31, 2006, respectively.
Transactions in shares of beneficial interests for each class were as follows:
- -------------------------------------------------------------------------------
Class 1 Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 185,188,568 $ 185,188,568
Shares issued to shareholders
in reinvestment of dividends
and distributions .................... 511,728 511,728
------------------------------------
Total issued ........................... 185,700,296 185,700,296
Shares redeemed ........................ (193,419,437) (193,419,437)
------------------------------------
Net decrease ........................... (7,719,141) $ (7,719,141)
====================================
- -------------------------------------------------------------------------------
Class 1 Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 182,059,852 $ 182,059,852
Shares issued to shareholders
in reinvestment of dividends
and distributions .................... 329,450 329,450
------------------------------------
Total issued ........................... 182,389,302 182,389,302
Shares redeemed ........................ (180,272,683) (180,272,683)
------------------------------------
Net increase ........................... 2,116,619 $ 2,116,619
====================================
- -------------------------------------------------------------------------------
Class 2 Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 551,349,244 $ 551,349,244
Shares issued to shareholders
in reinvestment of dividends
and distributions .................... 3,778,866 3,778,866
------------------------------------
Total issued ........................... 555,128,110 555,128,110
Shares redeemed ........................ (588,378,499) (588,378,499)
------------------------------------
Net decrease ........................... (33,250,389) $ (33,250,389)
====================================
- -------------------------------------------------------------------------------
Class 2 Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 588,622,879 $ 588,622,879
Shares issued to shareholders
in reinvestment of dividends
and distributions .................... 2,664,034 2,664,034
------------------------------------
Total issued ........................... 591,286,913 591,286,913
Shares redeemed ........................ (595,145,880) (595,145,880)
------------------------------------
Net decrease ........................... (3,858,967) $ (3,858,967)
====================================
- -------------------------------------------------------------------------------
Class 3 Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ........................ 1,183,649,416 $ 1,183,649,416
Shares issued to shareholders
in reinvestment of dividends
and distributions ................ 7,008,875 7,008,875
------------------------------------
Total issued ....................... 1,190,658,291 1,190,658,291
Shares redeemed .................... (1,190,888,128) (1,190,888,128)
------------------------------------
Net decrease ....................... (229,837) $ (229,837)
====================================
- -------------------------------------------------------------------------------
Class 3 Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ........................ 1,389,779,817 $ 1,389,779,817
Shares issued to shareholders
in reinvestment of dividends
and distributions ................ 5,572,173 5,572,173
------------------------------------
Total issued ....................... 1,395,351,990 1,395,351,990
Shares redeemed .................... (1,430,071,226) (1,430,071,226)
------------------------------------
Net decrease ....................... (34,719,236) $ (34,719,236)
====================================
- -------------------------------------------------------------------------------
Class 4 Shares for the Year Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ........................ 1,149,612,238 $ 1,149,612,238
Shares issued to shareholders
in reinvestment of dividends
and distributions ................ 8,124,996 8,124,996
------------------------------------
Total issued ....................... 1,157,737,234 1,157,737,234
Shares redeemed .................... (1,156,772,775) (1,156,772,775)
------------------------------------
Net increase ....................... 964,459 $ 964,459
====================================
- -------------------------------------------------------------------------------
Class 4 Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ........................ 1,016,806,849 $ 1,016,806,849
Shares issued to shareholders
in reinvestment of dividends
and distributions ................ 3,563,731 3,563,731
------------------------------------
Total issued ....................... 1,020,370,580 1,020,370,580
Shares redeemed .................... (893,964,555) (893,964,555)
------------------------------------
Net increase ....................... 126,406,025 $ 126,406,025
====================================
4. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended March 31,
2007 and March 31, 2006 were as follows:
- --------------------------------------------------------------------------------
3/31/2007 3/31/2006
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income ............................ $19,424,465 $12,129,381
----------------------------
Total taxable distributions .................. $19,424,465 $12,129,381
============================
As of March 31, 2007, there were no significant differences between the book and
tax components of net assets.
12 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Report of Independent Registered Public Accounting Firm
WCMA Government Securities Fund
To the Shareholders and Board of Trustees of WCMA Government Securities Fund:
We have audited the accompanying statement of assets and liabilities of WCMA
Government Securities Fund as of March 31, 2007, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the respective periods then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of WCMA
Government Securities Fund as of March 31, 2007, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and its financial highlights for each of the
respective periods then ended, in conformity with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
May 21, 2007
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 13
Portfolio Information Master Government Securities Trust
Portfolio Composition as a Percent of Net Assets
As of
------------------------
3/31/07 9/30/06
- --------------------------------------------------------------------------------
Repurchase Agreements ............................... 78.4% 78.8%
U.S. Government Obligations ......................... 21.4 20.8
Other Assets Less Liabilities ....................... 0.2 0.4
------------------------
Total ............................................... 100.0% 100.0%
========================
14 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Schedule of Investments Master Government Securities Trust (in Thousands)
Face Interest Maturity
Issue Amount Rate Date Value
================================================================================
U.S. Government Obligations* -- 21.4%
================================================================================
U.S. Treasury Bills $36,328 5.126-
5.14 % 4/05/2007 $36,297
61,456 5.087-
5.145 4/12/2007 61,342
3,200 5.07 4/16/2007 3,192
20,000 5.13 4/26/2007 19,923
25,000 5.05 5/03/2007 24,887
51,405 5.035-
5.045 5/10/2007 51,127
4,033 4.905 6/07/2007 3,997
6,000 4.915 6/21/2007 5,935
- --------------------------------------------------------------------------------
Total U.S. Government Obligations
(Cost -- $206,672) ................................................. 206,700
- --------------------------------------------------------------------------------
Face
Amount Issue
================================================================================
Repurchase Agreements -- 78.4%
================================================================================
$47,600 Banc of America Securities LLC, purchased on
3/28/2007 to yield 5.22% to 4/04/2007,
repurchase price $47,648, collateralized by
GNMA, 6% due 8/15/2035 - 5/20/2036 ...................... 47,600
- --------------------------------------------------------------------------------
48,300 Barclays Capital Inc., purchased on 3/30/2007
to yield 5.10% to 4/02/2007, repurchase price
$48,321, collateralized by U.S. Treasury Bill,
0% due 9/20/2007 ........................................ 48,300
- --------------------------------------------------------------------------------
48,300 Bear Stearns & Co. Inc., purchased on
3/30/2007 to yield 5.05% to 4/02/2007,
repurchase price $48,320, collateralized by
U.S. Treasury Note, 5.125% due 6/30/2008
and U.S. Inflation Index Bond, 3.625%
due 4/15/2028 ........................................... 48,300
- --------------------------------------------------------------------------------
47,600 Citigroup Global Markets Inc., purchased on
3/28/2007 to yield 5.25% to 4/04/2007,
repurchase price $47,649, collateralized by
GNMA, 6% due 7/15/2035 .................................. 47,600
- --------------------------------------------------------------------------------
49,500 Countrywide Securities Corporation,
purchased on 3/27/2007 to yield 5.19%
to 4/03/2007, repurchase price $49,550,
collateralized by GNMA, 5% - 6% due
9/15/2020 - 3/15/2037 ................................... 49,500
- --------------------------------------------------------------------------------
49,500 Credit Suisse Securities (USA) LLC,
purchased on 3/27/2007 to yield 5.25%
to 4/3/2007, repurchase price $49,551,
collateralized by GNMA, 5% - 6%
due 1/15/2020 - 3/20/2037 ............................... 49,500
- --------------------------------------------------------------------------------
47,600 Deutsche Bank Securities Inc., purchased
on 3/28/2007 to yield 5.24% to
4/04/2007, repurchase price $47,648,
collateralized by GNMA, 5.50% - 7%
due 3/15/2033 - 1/15/2037 ............................... 47,600
- --------------------------------------------------------------------------------
49,200 Goldman Sachs & Company, purchased
on 3/29/2007 to yield 5.23% to
4/26/2007, repurchase price $49,400,
collateralized by GNMA, 5.50% - 6.50%
due 12/15/2032 - 2/20/2037 .............................. 49,200
- --------------------------------------------------------------------------------
47,600 Greenwich Capital Markets, Inc., purchased
on 3/28/2007 to yield 5.25% to
4/04/2007, repurchase price $47,649,
collateralized by GNMA, 4.5% - 10.5%
due 10/15/2007 - 3/20/2037 .............................. 47,600
- --------------------------------------------------------------------------------
48,220 HSBC Securities (USA) Inc., purchased
on 3/30/2007 to yield 5.33% to
4/02/2007, repurchase price $48,241,
collateralized by GNMA, 5.5% - 6.5%
due 11/15/2021 - 1/15/2037 .............................. 48,220
- --------------------------------------------------------------------------------
49,500 J.P. Morgan Securities Inc., purchased
on 3/27/2007 to yield 5.23% to
4/03/2007, repurchase price $49,550,
collateralized by GNMA, 5.72% - 6.5%
due 10/20/2031 - 4/15/2046 .............................. 49,500
- --------------------------------------------------------------------------------
49,500 Lehman Brothers Inc., purchased on
3/27/2007 to yield 5.17% to
4/03/2007, repurchase price $49,550,
collateralized by GNMA, 4% - 11%
due 2/20/2009 - 3/20/2037 ............................... 49,500
- --------------------------------------------------------------------------------
48,900 Merrill Lynch Government Securities Inc.,
purchased on 3/28/2007 to yield 5.23%
to 4/04/2007, repurchase price $48,950,
collateralized by GNMA, 4% - 15%
due 5/15/2007 - 8/15/2047 (a) ........................... 48,900
- --------------------------------------------------------------------------------
29,500 Mizuho Securities USA Inc., purchased on
3/28/2007 to yield 5.08% to 4/04/2007,
repurchase price $29,529, collateralized by
U.S. Treasury Bill, due 9/6/2007 and U.S.
Treasury Note, 3.625% due 5/15/2013 ..................... 29,500
- --------------------------------------------------------------------------------
47,600 Morgan Stanley & Co. Inc., purchased
on 3/28/2007 to yield 5.21% to
4/04/2007, repurchase price $47,648,
collateralized by GNMA, 5% - 5.5%
due 11/15/2032 - 12/15/2035 ............................. 47,600
- --------------------------------------------------------------------------------
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 15
Schedule of Investments (concluded)
Master Government Securities Trust (in Thousands)
Face
Amount Issue Value
================================================================================
Repurchase Agreements (concluded)
================================================================================
$47,600 UBS Securities LLC, purchased on
3/28/2007 to yield 5.26% to
4/04/2007, repurchase price $47,649,
collateralized by GNMA, 4% - 15%
due 5/15/2007 - 3/15/2037 .............................. $ 47,600
- --------------------------------------------------------------------------------
Total Repurchase Agreements
(Cost -- $756,020) ................................................. 756,020
- --------------------------------------------------------------------------------
Total Investments
(Cost -- $962,692**) -- 99.8% ...................................... 962,720
Other Assets Less Liabilities -- 0.2% .............................. 1,693
--------
Net Assets -- 100.0% ............................................... $964,413
========
- --------------------------------------------------------------------------------
* U.S. Treasury Bills are traded on a discount basis; the interest rates
shown are the range of discount rates paid at the time of purchase.
** Cost for federal income tax purposes.
(a) Investments in companies considered to be an affiliate of the Trust, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
- --------------------------------------------------------------------------------
Net Interest
Affiliate Activity Income
- --------------------------------------------------------------------------------
Merrill Lynch Government Securities Inc. $1,400 $2,386
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
16 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Statement of Assets and Liabilities Master Government Securities Trust
As of March 31, 2007
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in repurchase agreements, at value (identified cost -- $756,020,000) $ 756,020,000
Investments in unaffiliated securities, at value (identified
cost -- $157,772,469) ........................................................ 157,800,300
Investments in affiliated securities, at value (identified cost -- $48,900,000) 48,900,000
Cash ........................................................................... 8,601
Receivables:
Contributions .............................................................. $ 1,759,413
Interest (including $14,208 from affiliates) ............................... 198,761 1,958,174
---------------
Prepaid expenses ............................................................... 9,021
---------------
Total assets ................................................................... 964,696,096
---------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Payables:
Investment adviser ......................................................... 168,973
Other affiliates ........................................................... 9,084 178,057
---------------
Accrued expenses ............................................................... 105,378
---------------
Total liabilities .............................................................. 283,435
---------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ..................................................................... $ 964,412,661
===============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Investors' capital ............................................................. $ 964,384,830
Unrealized appreciation -- net ................................................. 27,831
---------------
Net Assets ..................................................................... $ 964,412,661
===============
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 17
Statement of Operations Master Government Securities Trust
For the Year Ended March 31, 2007
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Interest (including $2,386,247 from affiliates) and amortization of premium and
discount earned .............................................................. $ 47,410,515
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ....................................................... $ 2,003,404
Accounting services ............................................................ 214,355
Custodian fees ................................................................. 59,653
Trustees' fees and expenses .................................................... 37,735
Professional fees .............................................................. 34,978
Pricing fees ................................................................... 3,804
Printing and shareholder reports ............................................... 386
Other .......................................................................... 20,672
---------------
Total expenses ................................................................. 2,374,987
---------------
Investment income -- net ....................................................... 45,035,528
---------------
===================================================================================================================================
Realized & Unrealized Gain -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain on investments -- net ............................................ 4,743
Change in unrealized appreciation/depreciation on investments -- net ........... 319,061
---------------
Total realized and unrealized gain -- net ...................................... 323,804
---------------
Net Increase in Net Assets Resulting from Operations ........................... $ 45,359,332
===============
See Notes to Financial Statements.
18 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Statements of Changes in Net Assets Master Government Securities Trust
For the Year Ended
March 31,
------------------------------------
Increase (Decrease) in Net Assets: 2007 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ....................................................... $ 45,035,528 $ 29,759,366
Realized gain -- net ........................................................... 4,743 5,304
Change in unrealized appreciation -- net ....................................... 319,061 121,542
-----------------------------------
Net increase in net assets resulting from operations ........................... 45,359,332 29,886,212
-----------------------------------
===================================================================================================================================
Capital Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions .................................................... 5,153,023,736 5,154,701,941
Fair value of withdrawals ...................................................... (5,202,779,172) (5,152,345,637)
-----------------------------------
Net increase (decrease) in net assets derived from capital transactions (49,755,436) 2,356,304
-----------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................................ (4,396,104) 32,242,516
Beginning of year .............................................................. 968,808,765 936,566,249
-----------------------------------
End of year .................................................................... $ 964,412,661 $ 968,808,765
===================================
See Notes to Financial Statements.
Financial Highlights Master Government Securities Trust
For the Year Ended For the Period
March 31, February 13, 2003+
The following ratios have been derived from -------------------------------------------------------- to March 31,
information provided in the financial statements. 2007 2006 2005 2004 2003
==================================================================================================================================
Total Investment Return
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment return .................. 4.90% 3.37% 1.44% .94% .75%*
========================================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ................................. .26% .26% .25% .22% .26%*
========================================================================
Investment income and realized gain -- net 4.84% 3.31% 1.39% .94% 1.08%*
========================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 964,413 $ 968,809 $ 936,566 $ 1,194,238 $ 1,585,194
========================================================================
* Annualized.
+ Commencement of operations.
See Notes to Financial Statements.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 19
Notes to Financial Statements Master Government Securities Trust
1. Significant Accounting Policies:
Master Government Securities Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, and is organized as a Delaware
statutory trust. The Declaration of Trust permits the Trustees to issue
nontransferable interests in the Trust, subject to certain limitations. The
Trust's financial statements are prepared in conformity with U.S. generally
accepted accounting principles, which may require the use of management accruals
and estimates. Actual results may differ from these estimates. The following is
a summary of significant accounting policies followed by the Trust.
(a) Valuation of investments -- Portfolio securities with remaining maturities
of greater than sixty days, for which market quotations are readily available,
are valued at market value. As securities transition from sixty-one to sixty
days to maturity, the difference between the valuation existing on the
sixty-first day before maturity and maturity value is amortized on a
straight-line basis to maturity. Securities maturing sixty days or less from
their date of acquisition are valued at amortized cost, which approximates
market value. Effective April 2, 2007, securities purchased with a maturity
greater than 60 days may be valued at amortized cost. For the purpose of
valuation, the maturity of a variable rate security is deemed to be the next
coupon date on which the interest rate is to be adjusted. Other investments and
assets for which market quotations are not available are valued at fair value as
determined in good faith by or under the direction of the Trust's Board of
Trustees.
(b) Repurchase agreements -- The Trust may invest in U.S. government securities
pursuant to repurchase agreements. Under such agreements, the counterparty
agrees to repurchase the security at a mutually agreed upon time and price. The
Trust takes possession of the underlying securities, marks-to-market such
securities and, if necessary, receives additional securities daily to ensure
that the contract is fully collateralized. If the counterparty defaults and the
fair value of the collateral declines, liquidation of the collateral by the
Trust may be delayed or limited.
(c) Income taxes -- The Trust is classified as a partnership for federal income
tax purposes. As such, each investor in the Trust is treated as owner of its
proportionate share of the net assets, income, expenses and realized and
unrealized gains and losses of the Trust. Therefore, no federal income tax
provision is required. It is intended that the Trust's assets will be managed so
an investor in the Trust can satisfy the requirements of Subchapter M of the
Internal Revenue Code.
(d) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Interest income (including amortization of premium and
discount) is recognized on the accrual basis.
(e) Recent accounting pronouncements -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet in
connection with accounting for uncertainties in income tax positions taken or
expected to be taken by an entity, including mutual funds, before being measured
and recognized in the financial statements. Adoption of FIN 48 is required for
the last net asset value calculation in the first required financial statement
reporting period for fiscal years beginning after December 15, 2006. The impact
on the Trust's financial statements, if any, is currently being assessed.
In September 2006, "Statement of Financial Accounting Standards No. 157, Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS 157
and its impact on the Trust's financial statements, if any, has not been
determined.
In addition, in February 2007, FASB issued "Statement of Financial Accounting
Standards No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), which is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FAS 157. FAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is evaluating
the implications of FAS 159 and its impact on the Trust's financial statements,
if any, has not been determined.
20 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Notes to Financial Statements (concluded) Master Government Securities Trust
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including Fund Asset
Management, L.P. ("FAM"), with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. has
approximately a 34% economic and voting interest. The new company operates under
the BlackRock name and is governed by a board of directors with a majority of
independent members.
The shareholders of each of the investors approved on August 31, 2006 and
September 15, 2006, respectively, a new Investment Advisory Agreement for the
Trust with BlackRock Advisors, Inc. (the "Manager"), an indirect, wholly owned
subsidiary of BlackRock, Inc., which was reorganized into a limited liability
company and renamed BlackRock Advisors, LLC. The new advisory agreement between
the Trust and the Manager became effective on September 29, 2006. Prior to
September 29, 2006, FAM was the Trust's manager. The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect, wholly owned subsidiary of
Merrill Lynch, which is the limited partner.
The Manager is responsible for the management of the Trust's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Trust. For such services, the Trust
pays a monthly fee based upon the average daily value of the Trust's net assets
at the following annual rates: .25% of the Trust's average daily net assets not
exceeding $500 million; .175% of the average daily net assets in excess of $500
million but not exceeding $1 billion; and .125% of the average daily net assets
in excess of $1 billion. In addition, the Manager has entered into a
Sub-Advisory Agreement with BlackRock Institutional Management Corporation, an
affiliate of the Manager, under which the Manager pays the Sub-Adviser for
services it provides a monthly fee that is a percentage of the management fee
paid by the Trust to the Manager.
For the year ended March 31, 2007, the Trust reimbursed FAM and the Manager
$10,015 and $9,084, respectively, for certain accounting services.
Prior to September 29, 2006, certain officers and/or trustees of the Trust were
officers and/or directors of FAM, PSI, and/or Merrill Lynch.
Commencing September 29, 2006, certain officers and/or directors of the Trust
are officers and/or directors of BlackRock, Inc. or its affiliates.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 21
Report of Independent Registered Public Accounting Firm
Master Government Securities Trust
To the Investors and Board of Trustees of Master Government Securities Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Master Government Securities Trust (the "Trust")
as of March 31, 2007, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the respective
periods then ended. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Trust
is not required to have, nor were we engaged to perform, an audit of internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Trust's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of March 31, 2007, by correspondence with the custodian and
brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Master
Government Securities Trust as of March 31, 2007, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and its financial highlights for each of the
respective periods then ended, in conformity with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
May 21, 2007
22 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Officers and Trustees
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund/Trust Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Interested Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Robert C. P.O. Box 9011 President 2005 to Vice Chairman and Director of BlackRock, Inc., 122 Funds None
Doll, Jr.* Princeton, NJ and present Global Chief Investment Officer for Equities, 168 Portfolios
08543-9011 Trustee Chairman of the BlackRock Retail Operating
Age: 52 Committee, and member of the BlackRock Executive
Committee since 2006; President of the funds
advised by Merrill Lynch Investment Managers, L.P.
("MLIM") and its affiliates ("MLIM/FAM-advised
funds") from 2005 to 2006 and Chief Investment
Officer thereof from 2001 to 2006; President of
MLIM and Fund Asset Management, L.P. ("FAM") from
2001 to 2006; Co-Head (Americas Region) thereof
from 2000 to 2001 and Senior Vice President from
1999 to 2001; President and Director of Princeton
Services, Inc. ("Princeton Services") and
President of Princeton Administrators, L.P.
("Princeton Administrators") from 2001 to 2006;
Chief Investment Officer of OppenheimerFunds, Inc.
in 1999 and Executive Vice President thereof from
1991 to 1999.
- ------------------------------------------------------------------------------------------------------------------------------------
* Mr. Doll is a director, trustee or member of an advisory board of certain other investment companies for which
BlackRock Advisors, LLC and its affiliates act as investment adviser. Mr. Doll is an "interested person," as
defined in the Investment Company Act, of the Fund/Trust based on his positions with BlackRock, Inc. and its
affiliates. Trustees serve until their resignation, removal or death, or until December 31 of the year in which
they turn 72. As Fund/Trust President, Mr. Doll serves at the pleasure of the Board of Trustees.
====================================================================================================================================
Independent Trustees*
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald W. P.O. Box 9095 Trustee 2002 to Professor Emeritus of Finance, School of Business, 47 Funds None
Forbes** Princeton, NJ present State University of New York at Albany since 2000 49 Portfolios
08543-9095 and Professor thereof from 1989 to 2000;
Age: 66 International Consultant, Urban Institute,
Washington, D.C. from 1995 to 1999.
- ------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. P.O. Box 9095 Trustee 2002 to Professor, Harvard Business School since 1989; 47 Funds Newell
Montgomery+ Princeton, NJ present Associate Professor, J.L. Kellogg Graduate School 49 Portfolios Rubbermaid,
08543-9095 of Management, Northwestern University from 1985 Inc.
Age: 54 to 1989; Associate Professor, Graduate School of (manufacturing)
Business Administration, University of Michigan
from 1979 to 1985; Director, Harvard Business
School Publishing since 2005; Director, McLean
Hospital since 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 23
Officers and Trustees (continued)
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund/Trust Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Independent Trustees* (concluded)
- ------------------------------------------------------------------------------------------------------------------------------------
Jean Margo P.O. Box 9095 Trustee 2004 to Self-employed consultant since 2001; Counsel of 47 Funds None
Reid Princeton, NJ present Alliance Capital Management (investment adviser) 49 Portfolios
08543-9095 in 2000; General Counsel, Director and Secretary
Age: 61 of Sanford C. Bernstein & Co., Inc. (investment
adviser/broker-dealer) from 1997 to 2000;
Secretary, Sanford C. Bernstein Fund, Inc. from
1994 to 2000; Director and Secretary of SCB, Inc.
since 1998; Director and Secretary of SCB
Partners, Inc. since 2000; and Director of Covenant
House from 2001 to 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Roscoe S. P.O. Box 9095 Trustee 2002 to President, Middle East Institute from 1995 to 2001; 47 Funds None
Suddarth Princeton, NJ present Foreign Service Officer, United States Foreign 49 Portfolios
08543-9095 Service, from 1961 to 1995 and Career Minister from
Age: 71 1989 to 1995; Deputy Inspector General, U.S.
Department of State, from 1991 to 1994; U.S.
Ambassador to the Hashemite Kingdom of Jordan from
1987 to 1990.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard R. P.O. Box 9095 Trustee 2002 to Professor of Finance from 1984 to 1995, Dean from 47 Funds Bowne & Co.,
West Princeton, NJ present 1984 to 1993 and since 1995 Dean Emeritus of 49 Portfolios Inc. (financial
08543-9095 New York University's Leonard N. Stern School of printers);
Age: 69 Business Administration. Vornado Realty
Trust (real
estate company);
Alexander's,
Inc. (real
estate company)
------------------------------------------------------------------------------------------------------------------------
* Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.
** Chairman of the Board of Trustees and the Audit Committee.
+ Chair of the Nominating Committee.
- ------------------------------------------------------------------------------------------------------------------------------------
24 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
Officers and Trustees (concluded)
Position(s) Length of
Held with Time
Name Address & Age Fund/Trust Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 2002 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill Lynch
Burke Princeton, NJ President present Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P. ("FAM") in 2006;
08543-9011 and First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer thereof from
Age: 46 Treasurer 1999 to 2006; Vice President of MLIM and FAM from 1990 to 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
John Ng P.O. Box 9011 Vice 2002 to Director of BlackRock, Inc. since 2006; Director of MLIM from 2000 to 2006; Vice
Princeton, NJ President present President of MLIM from 1984 to 2000.
08543-9011
Age: 53
- ------------------------------------------------------------------------------------------------------------------------------------
Jeffrey P.O. Box 9011 Fund/Trust 2004 to Managing Director of BlackRock, Inc. and Fund Chief Compliance Officer since 2006;
Hiller Princeton, NJ Chief present Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President
08543-9011 Compliance and Chief Compliance Officer of MLIM (Americas Region) from 2004 to 2006; Chief
Age: 55 Officer Compliance Officer of the IQ Funds since 2004; Global Director of Compliance at
Morgan Stanley Investment Management from 2002 to 2004; Managing Director and
Global Director of Compliance at Citigroup Asset Management from 2000 to 2002;
Chief Compliance Officer at Soros Fund Management in 2000; Chief Compliance
Officer at Prudential Financial from 1995 to 2000; Senior Counsel in the
Securities and Exchange Commission's Division of Enforcement in Washington, D.C.
from 1990 to 1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Alice A. P.O. Box 9011 Secretary 2004 to Director of BlackRock, Inc. since 2006; Director (Legal Advisory) of MLIM from 2002
Pellegrino Princeton, NJ present to 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with MLIM
08543-9011 from 1997 to 1999; Secretary of MLIM, FAM, FAM Distributors, Inc. and Princeton
Age: 47 Services from 2004 to 2006.
------------------------------------------------------------------------------------------------------------------------
* Officers of the Fund/Trust serve at the pleasure of the Board of Trustees.
------------------------------------------------------------------------------------------------------------------------
Further information about the Fund's Officers and Trustees is available in the Fund's Statement of Additional
Information, which can be obtained without charge by calling 1-800-441-7762.
- ------------------------------------------------------------------------------------------------------------------------------------
Custodian Transfer Agent
State Street Bank and Trust Company Financial Data Services, Inc.
P.O. Box 351 4800 Deer Lake Drive East
Boston, MA 02101 Jacksonville, FL 32246-6484
800-221-7210*
* For inquiries regarding your WCMA account,
call 800-262-4636.
- --------------------------------------------------------------------------------
Effective January 1, 2007, Edward D. Zinbarg retired as a Trustee of WCMA
Government Securities Fund and Master Government Securities Trust. The
Fund's/Trust's Board of Trustees wishes Mr. Zinbarg well in his retirement.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Effective April 13, 2007, Jeffrey Hiller resigned his position as Chief
Compliance Officer of the Fund/Trust. Also effective April 13, 2007, Karen Clark
was appointed Chief Compliance Officer of the Fund/Trust. Ms. Clark has been a
Managing Director of BlackRock, Inc. since 2007. She was a Director thereof from
2005 to 2007. Prior to that, Ms. Clark was a principal and senior compliance
officer at State Street Global Advisors from 2001 to 2005. Ms. Clark was a
principal consultant with PricewaterhouseCoopers, LLP from 1998 to 2001. From
1993 to 1998, Ms. Clark was Branch Chief, Division of Investment Management and
Office of Compliance Inspections and Examinations, with the U.S. Securities and
Exchange Commission.
- --------------------------------------------------------------------------------
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 25
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisers, banks or brokerages may offer this service.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
26 WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their nonpublic personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic
personal information about its Clients, except as permitted by law or as is
necessary to service Client accounts. These nonaffiliated third parties are
required to protect the confidentiality and security of this information and to
use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to nonpublic
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the nonpublic
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
WCMA GOVERNMENT SECURITIES FUND MARCH 31, 2007 27
This report is transmitted to shareholders only. It is not authorized for use as
an offer of sale or a solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. An investment in the
Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although the Fund seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose money by investing in
the Fund. Past performance results shown in this report should not be considered
a representation of future performance, which will fluctuate. Statements and
other information herein are as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web site
at http://www.sec.gov. Information about how the Fund voted proxies relating to
securities held in the Fund's portfolio during the most recent 12-month period
ended June 30 is available (1) at www.blackrock.com and (2) on the Securities
and Exchange Commission's Web site at http://www.sec.gov.
WCMA Government Securities Fund
P.O. Box 9011
Princeton, NJ 08543-9011
#WCMAGS -- 3/07
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of the
end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial officer
and principal accounting officer, or persons performing similar
functions. A copy of the code of ethics is available without charge at
www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of directors
has determined that (i) the registrant has the following audit
committee financial experts serving on its audit committee and (ii)
each audit committee financial expert is independent: (1) Ronald W.
Forbes, (2) Richard R. West, and (3) Edward D. Zinbarg (retired as of
December 31, 2006).
Item 4 - Principal Accountant Fees and Services
WCMA Government Securities Fund
(a) Audit Fees - Fiscal Year Ending March 31, 2007 - $6,600
Fiscal Year Ending March 31, 2006 - $6,600
(b) Audit-Related Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 2006 - $0
(c) Tax Fees - Fiscal Year Ending March 31, 2007 - $6,100
Fiscal Year Ending March 31, 2006 - $6,000
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 2006 - $0
Master Government Securities Trust
(a) Audit Fees - Fiscal Year Ending March 31, 2007 - $28,500
Fiscal Year Ending March 31, 2006 - $28,500
(b) Audit-Related Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 2006 - $0
(c) Tax Fees - Fiscal Year Ending March 31, 2007 - $9,200
Fiscal Year Ending March 31, 2006 - $9,200
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending March 31, 2007 - $0
Fiscal Year Ending March 31, 2006 - $0
(e)(1) The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the
registrant's affiliated service providers that relate directly to the
operations and the financial reporting of the registrant. Certain of
these non-audit services that the Committee believes are a) consistent
with the SEC's auditor independence rules and b) routine and recurring
services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a
specific case-by-case basis ("general pre-approval"). However, such
services will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any proposed
services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject
to general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ended March 31, 2007 - $3,016,200
Fiscal Year Ended March 31, 2006 - $3,754,550
(h) The registrant's audit committee has considered and determined that
the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,739,500, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
Item 8 - Portfolio Managers of Closed-End Management Investment Companies - Not
Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - The registrant's
Nominating Committee will consider nominees to the Board recommended
by shareholders when a vacancy becomes available. Shareholders who
wish to recommend a nominee should send nominations which include
biographical information and sets forth the qualifications of the
proposed nominee to the registrant's Secretary. There have been no
material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
WCMA Government Securities Fund and Master Government Securities Trust
By: /s/ Robert C. Doll, Jr.
--------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
WCMA Government Securities Fund and Master Government Securities Trust
Date: May 21, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Robert C. Doll, Jr.
--------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
WCMA Government Securities Fund and Master Government Securities Trust
Date: May 21, 2007
By: /s/ Donald C. Burke
--------------------------
Donald C. Burke,
Chief Financial Officer of
WCMA Government Securities Fund and Master Government Securities Trust
Date: May 21, 2007