1695 小麦ＥＴＦ 2019-04-01 10:00:00
平成30年12月期 決算短信（平成30年1月1日～平成30年12月31日） [pdf]
平成30年12月期 決算短信（平成30年1月1日～平成30年12月31日）
平成31年4月1日
上場取引所 東京証券取引所
銘柄名 コード番号 連動対象指標 主要投資資産 売買単位
ETFS総合上場投資信託 1684 ブルームバーグ総合商品指数 （注1） 10
天然ガス、原油、ガソリ
ETFSエネルギー上場投資信託 1685 ブルームバーグエネルギー商品指数 10
ン、灯油
アルミニウム、銅、ニッ
ETFS産業用金属上場投資信託 1686 ブルームバーグ産業用金属商品指数 10
ケル、亜鉛
ETFS農産物上場投資信託 1687 ブルームバーグ農産物商品指数 （注2） 10
小麦、とうもろこし、大
ETFS穀物上場投資信託 1688 ブルームバーグ穀物商品指数 10
豆
ETFS天然ガス上場投資信託 1689 ブルームバーグ天然ガス商品指数 天然ガス 100
ETFSWTI原油上場投資信託 1690 ブルームバーグ原油商品指数 WTI原油 10
ETFSガソリン上場投資信託 1691 ブルームバーグガソリン商品指数 ガソリン 10
ブルームバーグアルミニウム商品指
ETFSアルミニウム上場投資信託 1692 アルミニウム 100
数
ETFS銅上場投資信託 1693 ブルームバーグ銅商品指数 銅 10
ETFSニッケル上場投資信託 1694 ブルームバーグニッケル商品指数 ニッケル 10
ETFS小麦上場投資信託 1695 ブルームバーグ小麦商品指数 小麦 100
ブルームバーグとうもろこし商品指
ETFSとうもろこし上場投資信託 1696 とうもろこし 100
数
ETFS大豆上場投資信託 1697 ブルームバーグ大豆商品指数 大豆 10
（注1） 天然ガス、WTI原油、ブレンド原油、ガソリン、灯油、アルミニウム、銅、亜鉛、ニッケル、金、銀、生体牛、赤身豚肉、
小麦、トウモロコシ、大豆、砂糖、綿花、コーヒー、大豆油
（注2） 小麦、トウモロコシ、大豆、砂糖、綿花、コーヒー、大豆油
外 国 投 資 法 人 イーティーエフエス・コモディティ・セキュリティーズ・リミテッド
代 表 者 名 ヒラリー・ジョーンズ
管 理 会 社 ETFセキュリティーズ・マネジメント・カンパニー・リミテッド
https://www.wisdomtree.eu/en-gb/resource-library/prospectus-and-regulatory-reports#tab-2A942D42-5AA1-4008-9080-3C2DADB050A7
代 表 者 名 ヒラリー・ジョーンズ
問合せ先責任者 ＴＭＩ総合法律事務所 （中川秀宣） TEL 03-6438-5660
有価証券報告書提出予定日 平成31年6月28日提出(予定）
分配金支払い開始予定日 該当なし
Ⅰファンドの運用状況
1. 2018年12月決算期の運用状況（平成30年1月1日～平成30年12月31日）
(1)資産内訳 （百万円未満切捨て）
主要投資資産 合計（資産）
構成比
金額 金額 構成比
百万円 ％ 百万円 ％
ETFS総合上場投資信託 2018年12月決算期 23,702 (100) 23,702 (100)
2017年12月決算期 42,902 (100) 42,902 (100)
百万円 ％ 百万円 ％
ETFSエネルギー上場投資信託 2018年12月決算期 4,229 (100) 4,229 (100)
2017年12月決算期 9,974 (100) 9,974 (100)
百万円 ％ 百万円 ％
ETFS産業用金属上場投資信託 2018年12月決算期 20,476 (100) 20,476 (100)
2017年12月決算期 18,712 (100) 18,712 (100)
百万円 ％ 百万円 ％
ETFS農産物上場投資信託 2018年12月決算期 35,228 (100) 35,228 (100)
2017年12月決算期 29,866 (100) 29,866 (100)
百万円 ％ 百万円 ％
ETFS穀物上場投資信託 2018年12月決算期 2,358 (100) 2,358 (100)
2017年12月決算期 2,372 (100) 2,372 (100)
百万円 ％ 百万円 ％
ETFS天然ガス上場投資信託 2018年12月決算期 3,731 (100) 3,731 (100)
2017年12月決算期 5,963 (100) 5,963 (100)
百万円 ％ 百万円 ％
ETFSWTI原油上場投資信託 2018年12月決算期 55,878 (100) 55,878 (100)
2017年12月決算期 77,428 (100) 77,428 (100)
百万円 ％ 百万円 ％
ETFSガソリン上場投資信託 2018年12月決算期 315 (100) 315 (100)
2017年12月決算期 572 (100) 572 (100)
百万円 ％ 百万円 ％
ETFSアルミニウム上場投資信託 2018年12月決算期 7,853 (100) 7,853 (100)
2017年12月決算期 16,075 (100) 16,075 (100)
百万円 ％ 百万円 ％
ETFS銅上場投資信託 2018年12月決算期 19,037 (100) 19,037 (100)
2017年12月決算期 29,437 (100) 29,437 (100)
百万円 ％ 百万円 ％
ETFSニッケル上場投資信託 2018年12月決算期 46,722 (100) 46,722 (100)
2017年12月決算期 13,350 (100) 13,350 (100)
百万円 ％ 百万円 ％
ETFS小麦上場投資信託 2018年12月決算期 7,006 (100) 7,006 (100)
2017年12月決算期 10,541 (100) 10,541 (100)
百万円 ％ 百万円 ％
ETFSとうもろこし上場投資信託 2018年12月決算期 3,413 (100) 3,413 (100)
2017年12月決算期 4,401 (100) 4,401 (100)
百万円 ％ 百万円 ％
ETFS大豆上場投資信託 2018年12月決算期 1,827 (100) 1,827 (100)
2017年12月決算期 1,605 (100) 1,605 (100)
（注１）主要投資資産は、平成31年3月12日午前零時（ロンドン時間2019年3月11日午後4時）現在のものとしてブルームバーグに
よって表示される為替レート（スポット・レート）（1米ドル＝111.205円）に基づいて円換算しています。(以下同じ）
(2)設定・償還実績
前営業期間末 設定口数 償還口数 当営業期間末
発行済口数 発行済口数
(①) (②) (③) （①+②-③）
千口 千口 千口 千口
ETFS総合上場投資信託 2018年12月決算期 43,430 17,051 33,429 27,052
2017年12月決算期 43,990 37,822 38,382 43,430
千口 千口 千口 千口
ETFSエネルギー上場投資信 2018年12月決算期 23,222 43,372 55,401 11,193
託
2017年12月決算期 21,496 36,046 34,320 23,222
千口 千口 千口 千口
ETFS産業用金属上場投資信 2018年12月決算期 12,592 45,201 40,689 17,104
託
2017年12月決算期 18,119 34,862 40,388 12,592
千口 千口 千口 千口
ETFS農産物上場投資信託 2018年12月決算期 58,057 67,958 49,143 76,872
2017年12月決算期 41,658 48,512 32,114 58,057
千口 千口 千口 千口
ETFS穀物上場投資信託 2018年12月決算期 6,536 2,635 2,261 6,910
2017年12月決算期 9,617 3,504 6,586 6,536
千口 千口 千口 千口
ETFS天然ガス上場投資信託 2018年12月決算期 1,572,719 426,629 1,043,450 955,899
2017年12月決算期 1,069,024 1,485,890 982,195 1,572,719
千口 千口 千口 千口
ETFSWTI原油上場投資信託 2018年12月決算期 81,244 106,379 114,826 72,797
2017年12月決算期 99,899 129,660 148,314 81,244
千口 千口 千口 千口
ETFSガソリン上場投資信託 2018年12月決算期 188 477 522 142
2017年12月決算期 215 736 763 188
千口 千口 千口 千口
ETFSアルミニウム上場投資 2018年12月決算期 40,973 42,001 58,473 24,501
信託
2017年12月決算期 33,526 39,343 31,895 40,973
千口 千口 千口 千口
ETFS銅上場投資信託 2018年12月決算期 8,530 13,283 14,886 6,927
2017年12月決算期 7,247 13,420 12,137 8,530
千口 千口 千口 千口
ETFSニッケル上場投資信託 2018年12月決算期 9,958 40,149 9,348 40,759
2017年12月決算期 9,974 13,495 13,512 9,958
千口 千口 千口 千口
ETFS小麦上場投資信託 2018年12月決算期 158,778 128,339 184,919 102,198
2017年12月決算期 129,663 169,973 140,858 158,778
千口 千口 千口 千口
ETFSとうもろこし上場投資 2018年12月決算期 46,816 53,594 61,993 38,418
信託
2017年12月決算期 39,349 38,404 30,937 46,816
千口 千口 千口 千口
ETFS大豆上場投資信託 2018年12月決算期 715 1,786 1,578 923
2017年12月決算期 642 1,111 1,039 715
（注１）上記の設定・償還実績については、営業期末時点の未決済上場投信を含んでいません。
(3)基準価額
売買単位当たり基準価額
（注）
総資産 負債 資産 （（③/当営業期間末
発行済口数）×売買単位）
百万円 百万円 百万円 円
ETFS総合上場投資信
託 2018年12月決算期 23,702 - 23,702 8,761
2017年12月決算期 42,902 - 42,902 9,878
百万円 百万円 百万円 円
ETFSエネルギー上場 2018年12月決算期 4,229 - 4,229 3,778
投資信託
2017年12月決算期 9,974 - 9,974 4,295
百万円 百万円 百万円 円
ETFS産業用金属上場 2018年12月決算期 20,476 - 20,476 11,971
投資信託
2017年12月決算期 18,712 - 18,712 14,859
百万円 百万円 百万円 円
ETFS農産物上場投資
2018年12月決算期 35,228 - 35,228 4,582
信託
2017年12月決算期 29,866 - 29,866 5,144
百万円 百万円 百万円 円
ETFS穀物上場投資信
2018年12月決算期 2,358 - 2,358 34,134
託
2017年12月決算期 2,372 - 2,372 36,302
百万円 百万円 百万円 円
ETFS天然ガス上場投
2018年12月決算期 3,731 - 3,731 390
資信託
2017年12月決算期 5,963 - 5,963 379
百万円 百万円 百万円 円
ETFSWTI原油上場投
2018年12月決算期 55,878 - 55,878 7,675
資信託
2017年12月決算期 77,428 - 77,428 9,530
百万円 百万円 百万円 円
ETFSガソリン上場投
2018年12月決算期 315 - 315 22,096
資信託
2017年12月決算期 572 - 572 30,353
百万円 百万円 百万円 円
ETFSアルミニウム上
2018年12月決算期 7,853 - 7,853 32,054
場投資信託
2017年12月決算期 16,075 - 16,075 39,233
百万円 百万円 百万円 円
ETFS銅上場投資信託 2018年12月決算期 19,037 - 19,037 27,478
2017年12月決算期 29,437 - 29,437 34,506
百万円 百万円 百万円 円
ETFSニッケル上場投 2018年12月決算期 46,722 - 46,722 11,463
資信託
2017年12月決算期 13,350 - 13,350 13,405
百万円 百万円 百万円 円
ETFS小麦上場投資信
2018年12月決算期 7,006 - 7,006 6,855
託
2017年12月決算期 10,541 - 10,541 6,638
百万円 百万円 百万円 円
ETFSとうもろこし上
2018年12月決算期 3,413 - 3,413 8,885
場投資信託
2017年12月決算期 4,401 - 4,401 9,402
百万円 百万円 百万円 円
ETFS大豆上場投資信
2018年12月決算期 1,827 - 1,827 19,800
託
2017年12月決算期 1,605 - 1,605 22,446
（注1） 売買単位は、総合商品指数、エネルギー商品指数、産業用金属商品指数、農産物商品指数、原油、ガソリン、銅、
ニッケル、及び大豆については10口、穀物商品指数、天然ガス、アルミニウム、小麦及びとうもろこしについて
は100口となります。
（注2） 商品上場投資信託1単位当たりの資産は、商品上場投資信託1単位当たりの基準価額に基づいたものとなってい
ます。商品上場投資信託1単位当たりの基準価額は、相応する商品上場投資信託1単位当たりの商品契約の価
格に相当するものとなります。各々の商品上場投資信託の裏付けとなっている商品契約の総価値は、相応する商
品上場投資信託の残高と等しくなります。このために、純資産額は零となり、総資産額は、商品上場投資信託の
裏付けとなる商品契約の総額と等しくなります。
［参考］外国投資法人の財政状態
総資産額 総負債額 投資主持分額
百万円 百万円 百万円
2018年12月決算期 347,082 350,322 -3,239
2017年12月決算期 397,310 394,649 2,661
(注1) 商品上場投資信託は、期限の定めのない、請求権の限定されている発行体による債務です。全出資口は、親会社
であるイーティーエフ・セキュリティーズ・リミテッドにより保有されています。投資主持分額は、総資産額か
ら総負債額を差し引いたものです。
2. 会計方針の変更
① 会計基準等の改正に伴う変更 有・無
② ①以外の変更 有・無
ご参考： 会計基準等の改正
以下の新規及び改訂後の基準ならびに解釈指針が当年度に適用されました。但し、当財務諸表に影響を与えた可能性は軽微
でした。
・ IFRS第9号「金融商品」
・ IFRS第15号「収益」
IAS第39号では、商品証券および商品契約は純損益を通じて公正価値で測定する金融商品として指定され、貸付金および債
権は償却原価で測定されていました。 IFRS第9号の適用後、当社が保有する金融資産または金融負債の分類または測定に変
更はありません。
ETFS Commodity Securities Limited
Registered No: 90959
Report and Financial Statements for the
Year ended 31 December 2018
ETFS Commodity Securities Limited
Contents
Management and Administration 1
Directors’ Report 2-6
Statement of Directors’ Responsibilities 7
Independent Auditor’s Report 8-12
Statement of Profit or Loss and Other Comprehensive Income 13
Statement of Financial Position 14
Statement of Cash Flows 15
Statement of Changes in Equity 16
Notes to the Financial Statements 17-29
www.wisdomtree.eu
ETFS Commodity Securities Limited
Management and Administration
Directors Administrator
Gregory Barton R&H Fund Services (Jersey) Limited
Steven Ross Ordnance House
Peter Ziemba PO Box 83
Hilary Jones 31 Pier Road
St Helier
Jersey, JE4 8PW
Registered Office Registrar
Ordnance House Computershare Investor Services (Jersey) Limited
31 Pier Road Queensway House
St Helier Hilgrove Street
Jersey, JE4 8PW St Helier
Jersey, JE1 1ES
Manager Trustee
ETFS Management Company (Jersey) Limited The Law Debenture Trust Corporation plc
Ordnance House Fifth Floor
31 Pier Road 100 Wood Street
St Helier London, EC2V 7EX
Jersey, JE4 8PW United Kingdom
Commodity Contract Counterparty Commodity Contract Counterparty
Merrill Lynch International Citigroup Global Markets Limited
2 King Edward Street Citigroup Centre
London, EC1A 1HQ Canada Square, Canary Wharf
United Kingdom London, EC14 5LB
United Kingdom
Auditor Jersey Legal Advisers
KPMG Channel Islands Limited Mourant Ozannes
37 Esplanade 22 Grenville Street
St Helier St Helier
Jersey, JE4 8WQ Jersey, JE4 8PX
Company Secretary
R&H Fund Services (Jersey) Limited
Ordnance House
31 Pier Road
St Helier
Jersey, JE4 8PW
-1- www.wisdomtree.eu
ETFS Commodity Securities Limited
Directors’ Report
The directors of ETFS Commodity Securities Limited (“CSL” or the “Company”) submit herewith the annual
report and financial statements of the Company for the year ended 31 December 2018.
Directors
The names and particulars of the directors of the Company during and since the end of the financial year are:
Gregory Barton (Appointed 11 April 2018)
Christopher Foulds (Resigned 2 November 2018)
Steven Ross
Joseph Roxburgh (Resigned 11 April 2018)
Graham Tuckwell (Resigned 11 April 2018)
Peter Ziemba (Appointed 11 April 2018)
Hilary Jones (Appointed 2 November 2018)
Directors’ Interests
No director has an interest in the Ordinary Shares of the Company as at the date of this report.
Prior to the change in ownership (described below) Graham Tuckwell held an interest in the Ordinary Shares
of the Company as the majority shareholder of ETFS Capital Limited (formerly ETF Securities Limited).
Principal Activities
The Company’s principal activity is the issue and listing of commodity securities (“Commodity Securities”). The
Company’s portfolio of Commodity Securities includes Classic, Longer Dated, Short and Leveraged
Commodity Securities.
Commodity Securities are financial instruments designed to track the price of commodity futures, and give
investors an exposure similar to that which could be achieved by managing a fully cash-collateralised position
in near-term futures contracts. However, unlike managing a futures position, Commodity Securities involve no
need to roll from one futures contract to another, no margin calls, and no other brokerage or other costs in
holding or rolling futures contracts (although security holders incur costs in holding Commodity Securities). No
trading or management of futures contracts is required by the Company.
Commodity Securities are backed by commodity contracts (“Commodity Contracts”) with terms corresponding
to the terms of Commodity Securities. The Company entered into two facility agreements, one with Citigroup
Global Markets Limited (“Citigroup”) and one with Merrill Lynch International (“Merrill Lynch”) (together the
“Commodity Contract Counterparties”) on 3 July 2017, enabling the Company to create and cancel Commodity
Contracts on an ongoing basis.
UBS Securities AG, London Branch (“UBS”) and Merrill Lynch Commodities, Inc (“MLCI”) were commodity
contract counterparties and had entered into agreements with the Company on similar terms to the current
facility agreements with the existing Commodity Contract Counterparties. The facility agreements with UBS
and MLCI were terminated on 24 October 2017 and the Commodity Contracts outstanding thereunder were
replaced by equivalent Commodity Contracts with Merrill Lynch and Citigroup, respectively.
The Company earns a management fee and a licence allowance based upon the number of Commodity
Securities in issue. These fees are expressed as an annual percentage, calculated on a daily basis and
reflected in the Net Asset Value (“NAV”) of the Commodity Securities on a daily basis, and paid monthly in
arrears.
-2- www.wisdomtree.eu
ETFS Commodity Securities Limited
Directors’ Report (Continued)
Principal Activities (continued)
The Company has entered into a service agreement with ETFS Management Company (Jersey) Limited
(“ManJer” or the “Manager”), whereby ManJer is responsible for supplying or procuring the supply of all
management and administration services required by the Company, (including marketing) as well as the
payment of costs relating to the listing and issue of Commodity Securities. In return for these services, the
Company pays ManJer an amount equal to the aggregate of the management fee, licence allowance and the
creation and redemption fees (the “ManJer Fee”). As a result, amounts in respect of the management fee and
licence allowance are transferred directly to ManJer by the Commodity Contract Counterparties under the
terms of the Commodity Contracts and ManJer receives creation and redemption fees directly from Authorised
Participants. Accordingly there are no cash flows through the Company.
Review of Operations
The most recent Prospectuses were issued on 26 September 2018 (Classic and Longer Dated) and 22 August
2018 (Short and Leveraged). As at 31 December 2018, the Company had the following number of classes, in
aggregate, of Commodity Securities in issue and admitted to trading on the following exchanges:
London NYSE- Tokyo
Stock Borsa Deutsche Euronext Stock
Exchange Italiana Börse Paris Exchange
Classic & Longer Dated
Commodity Securities 55 34 41 9 14
Short & Leveraged
Commodity Securities 86 86 27 4 -
Total Commodity Securities 141 120 68 13 14
As at 31 December 2018, the fair value of assets under management amounted to USD 3,092.0 million (2017:
USD 3,530.4 million). The Company recognises its financial assets (Commodity Contracts) and financial
liabilities (Commodity Securities) at fair value in the Statement of Financial Position.
During the year, the Company generated income from creation and redemption fees, management fees and
licence allowance as follows:
2018 2017
USD USD
Creation and Redemption Fees 654,809 371,319
Management Fees and Licence Allowance 21,474,131 21,981,494
Total Fee Income 22,128,939 22,352,813
Under the terms of the service agreement with ManJer, the Company accrued expenses equal to the
management fee and licence allowance and creation and redemptions fees, which, after taking into account
other operating income and expenses, resulted in an operating result for the year of USD Nil (2017: USD Nil).
The gain or loss on Commodity Securities and Commodity Contracts is recognised in the Statement of Profit
or Loss and Other Comprehensive Income in line with the Company’s accounting policy.
The Company has entered into contractual obligations to issue and redeem Commodity Securities at set prices
on each trading day. These prices are based on agreed formulae published in the Prospectuses, and are
equal to the published NAV of each class of Commodity Security.
-3- www.wisdomtree.eu
ETFS Commodity Securities Limited
Directors’ Report (Continued)
Review of Operations (continued)
IFRS 13 requires the Company to identify the principal market and to utilise the available market price within
that principal market. The directors consider that the stock exchanges where the Commodity Securities are
listed to be the principal market and as a result the fair value of the Commodity Securities is the on-exchange
price as quoted on those stock exchanges demonstrating active trading. As a result of the difference in
valuation methodology between Commodity Contracts and Commodity Securities there is a mis-match
between accounting values, and the results of the Company reflect a gain or loss on the difference between
the agreed formula price of the Commodity Contracts and the market price of Commodity Securities. This gain
or loss would be reversed on a subsequent redemption of the Commodity Securities and cancellation of the
corresponding Commodity Contracts. This is presented in more detail in note 8 to these financial statements.
Going Concern
The nature of the Company’s business dictates that the outstanding Commodity Securities may be redeemed
at any time by the holder and in certain circumstances may be compulsorily redeemed by the Company. As
the redemption of Commodity Securities will always coincide with the cancellation of an equal amount of
Commodity Contracts, no liquidity risk is considered to arise. All other expenses of the Company are met by
ManJer; therefore the directors consider the Company to be a going concern.
Change of Ownership
On 11 April 2018 WisdomTree Investments, Inc (an exchange-traded product sponsor and asset manager)
acquired ETFS Capital Limited’s (formerly ETF Securities Limited) European exchange-traded product
business as a going concern, which includes the Company. Following completion of the acquisition, the
Company continues as a going concern.
Future Developments
Referendum of the United Kingdom's (“UK’s”) membership of the European Union (the “EU Referendum”)
Pursuant to the European Referendum Act 2015, a referendum on the United Kingdom’s membership of the
EU was held on 23 June 2016 with the majority voting to leave the EU. On 29 March 2017, the UK Government
exercised its right under Article 50 of the Treaty of the European Union. The UK is due to leave the EU on 29
March 2019. This departure may be subject to a withdrawal agreement between the UK and the other EU
member states which provides for a transition period lasting until December 2020 during which EU law
continues to apply to the UK as if it were a member state may take place without any transitional arrangements
in place.
The Company is domiciled in Jersey, outside of the EU, and the Commodity Securities are distributed in the
EU under the EU Prospectus Directive which requires their offering to the public to be approved by an EU
Member State regulator. To date, the Company has chosen the UK Financial Conduct Authority (“FCA”) as
its member state regulator for these purposes. Request is then made to the FCA, as the chosen Member
State regulator, for the passporting of the offering across the EU, once again, under the Prospectus Directive.
The Company is working with an alternate EU Member State regulator to obtain approval of its prospectus and
request passporting for its offering to maintain the Company's access to relevant markets post the departure
of the UK from the EU. This is hoped to take effect as soon as possible after 29 March 2019 if no withdrawal
agreement is in place or after any agreed transition period. As the Commodity Securities already comply with
the European wide requirements of the Prospectus Directive, this is not expected to cause any disruption or
alteration to the terms or nature of the Commodity Securities.
The Commodity Securities continue to comply with all applicable laws and regulations. The directors regularly
assess the impact on the Company of the ongoing withdrawal process and consider that the decision to select
an alternate EU Member State regulator substantially mitigates the key risks to the Company.
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ETFS Commodity Securities Limited
Directors’ Report (Continued)
Future Developments (Continued)
The board of directors (the “Board”) are not aware of any other developments that might have a significant
effect on the operations of the Company in subsequent financial periods not already disclosed in this report or
the attached financial statements.
Risk Management
Each Commodity Security is a debt instrument whose redemption price is linked directly to the performance of
the underlying commodity index. The Commodity Securities are issued under limited recourse arrangements
whereby the holders have recourse only to the value of the Commodity Contracts attributable to the class of
security they hold and not to the Company. In addition, since any such price movements are wholly attributable
to the Commodity Security holders, the Company has no residual exposure to price movements of the
Commodity Contracts. From a commercial perspective, the gains or losses on the liability represented by the
Commodity Securities are matched economically by corresponding losses or gains attributable to the
Commodity Contracts (see detail on page 4 regarding the accounting mis-match). The Company does not
retain any net gains or losses or net risk exposures. Further details surrounding the value of Commodity
Securities and the Commodity Contracts are disclosed in note 12.
Movements in the price of the underlying commodity, and thus the value of the Commodity Securities, may
vary widely which could have an impact on the demand for the Commodity Securities issued by the Company.
These movements are shown in notes 7 and 8.
Dividends
There were no dividends declared or paid in the year (2017: USD Nil). It is the Company’s policy that dividends
will only be declared when the directors are of the opinion that there are sufficient distributable reserves.
Employees
The Company does not have any employees. It is the Company’s policy to use the services of specialist
subcontractors or consultants as far as possible.
Directors’ Remuneration
No director has a service contract with the Company. The directors of the Company who are employees within
the ETFS Capital Limited (formerly ETF Securities Limited) group or within the WisdomTree Investments, Inc
group do not receive separate remuneration in their capacity as directors of the Company. R&H Fund Services
(Jersey) Limited (“R&H” or the “Administrator”) receives a fee in respect of the directors of the Company who
are employees of R&H.
The following directors’ fees have been paid by ManJer on behalf of the Company for the year:
2018 2017
GBP GBP
Graham Tuckwell (Resigned 11 April 2018) Nil Nil
Christopher Foulds (Resigned 2 November 2018) Nil Nil
Steven Ross 8,000 8,000
Joseph Roxburgh (Resigned 11 April 2018) Nil Nil
Gregory Barton (Appointed 11 April 2018) Nil N/a
Peter Ziemba (Appointed 11 April 2018) Nil N/a
Hilary Jones (Appointed 2 November 2018) 1,315 N/a
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ETFS Commodity Securities Limited
Directors’ Report (Continued)
Auditor
Following the change in ownership of the Company it is intended to appoint the auditor responsible for the
WisdomTree group as auditor of the Company. A resolution to appoint Ernst & Young LLP as the auditor of
the Company will be proposed at the next Board meeting of the directors.
Corporate Governance
There is no standard code of corporate governance in Jersey. The operations, as previously described in the
directors’ report, are such that the directors do not consider the Company is required to voluntarily apply the
UK Corporate Governance Code.
As the Board is small, there is no nomination committee and appointments of new directors are considered by
the Board as a whole. The Board does not consider it appropriate that directors should be appointed for a
specific term. Furthermore, the structure of the Board is such that it is considered unnecessary to identify a
senior non-executive director.
The constitution of the Board is disclosed on page 2. The Board meets regularly as required by the operations
of the Company, but at least quarterly to review the overall business of the Company and to consider matters
specifically reserved for its review.
Internal Control
During the year the Company did not have any employees or subsidiaries, and there is no intention that this
will change. The Company, being a special purpose company established for the purpose of issuing
Commodity Securities, has not undertaken any business, save for issuing and redeeming Commodity
Securities, entering into the required documents and performing the obligations and exercising its rights in
relation thereto, since its incorporation. The Company does not intend to undertake any business other than
issuing and redeeming Commodity Securities and performing the obligations and exercising its rights in relation
thereto.
The Company is dependent upon ManJer to provide management and administration services to it. ManJer
is licensed under the Financial Services (Jersey) Law 1998 to conduct classes U and Z of Fund Services
Business (ManJer was also licensed to conduct class V of Fund Services Business until 11 April 2018). ManJer
outsources the administration services in respect of the Company to R&H. Documented contractual
arrangements are in place with the Administrator which define the areas where the authority is delegated to
them. The performance of the Manager and Administrator are reviewed on an ongoing basis by the Board,
through their review of periodic reports.
ManJer provides management and other services to both the Company and other companies issuing
commodity and index tracking securities.
The Board, having reviewed the effectiveness of the internal control systems of the Manager and R&H, and
having a regard to the role of its external auditor, does not consider that there is a need for the Company to
establish its own internal audit function.
Audit Committee
The Board has not established a separate audit committee; instead the Board meets to consider the financial
reporting by the Company, the internal controls, and relations with the external auditor. In addition the Board
reviews the independence and objectivity of the auditors.
Steven Ross
Director
Jersey
11 March 2019
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ETFS Commodity Securities Limited
Statement of Directors’ Responsibilities
The directors are responsible for preparing the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law
they have elected to prepare the financial statements in accordance with International Financial Reporting
Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”) and applicable law.
Under company law the directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that
period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
• assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law
1991. They are responsible for such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the
Company and to prevent and detect fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in Jersey governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
With regard to Regulation 2004/109/EC of the European Union (the "EU Transparency Directive"), the directors
confirm that to the best of their knowledge that:
• the financial statements for the year ended 31 December 2018 give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company as required by law and in accordance
with IFRS as issued by the IASB; and
• the Directors’ Report gives a fair view of the development of the Company’s business, financial position
and the important events that have occurred during the year and their impact on these financial
statements.
The principal risks and uncertainties faced by the Company are disclosed in note 12 of these financial
statements.
By order of the Board
Steven Ross
Director
11 March 2019
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Independent Auditor’s Report to the Members of
ETFS Commodity Securities Limited
Our opinion is unmodified
We have audited the financial statements of ETFS Commodity Securities Limited (the
“Company”), which comprise the statement of financial position as at 31 December 2018,
the statements of profit or loss and other comprehensive income, cash flows and changes
in equity for the year then ended, and notes, comprising significant accounting policies and
other explanatory information.
In our opinion, the accompanying financial statements:
— give a true and fair view of the financial position of the Company as at 31 December
2018, and of the Company’s financial performance and cash flows for the year then
ended;
— are prepared in accordance with International Financial Reporting Standards; and
— have been properly prepared in accordance with the requirements of the Companies
(Jersey) Law, 1991.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities are described below. We have fulfilled our
ethical responsibilities under, and are independent of the Company in accordance with, UK
ethical requirements including FRC Ethical Standards as applied to listed entities. We
believe that the audit evidence we have obtained is a sufficient and appropriate basis for our
opinion.
Key Audit Matters: our assessment of the risks of material
misstatement
Key audit matters are those matters that, in our professional judgment, were of most
significance in the audit of the financial statements and include the most significant
assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, we do not provide a separate opinion on these matters. In
arriving at our audit opinion above, the key audit matters, were as follows:
8
The risk Our response
Valuation of Basis: Our audit procedures included:
Commodity Contracts
Commodity Contracts represent 99% of Internal Controls: Assessed the
USD3,091,983,052; the Company’s total assets at 31 design and implementation of
(2017: USD3,530,411,481) December 2018 (2017: 99%). controls over the valuation of
Commodity Contracts.
Refer to the accounting Commodity Contracts are used to back
policy in note 2, and to Commodity Securities issued by the Evaluation of fair value methodology:
disclosures in notes 7 Company. Commodity Contracts are Assessed the appropriateness of the
and 12. accounted for at fair value. methodology used to determine fair
value, and considered whether
In the absence of a quoted price in an Contractual Value represents fair
active market for the Commodity value in accordance with IFRS.
Contracts, the Company determines fair
value by revaluing the Commodity Independent confirmation: Obtained
Contracts entered into at the reporting independent confirmation from the
date to their Contractual Value, as Commodity Contract Counterparty of
described in notes 2(ii) and 12(g). the Contractual Value of Commodity
Contracts entered into by the
Contractual Value is calculated, in Company at the reporting date.
accordance with the formula set out in
the prospectus, to reflect the change in Independent evaluation: Recalculated
the relevant commodity index, taking the Contractual Value for a selection
into account the payment of a of Commodity Contracts, selected
management fee and a daily spread. based on the most significant classes
of Commodity Securities in issue at
the reporting date by value, using
Risk: index data obtained from a third party
The reported fair value of Commodity source. Compared the recalculated
Contracts may be materially misstated. Contractual Values to those
determined by the Company.
Assessing disclosures: Assessed the
fair value disclosures in the financial
statements for compliance with IFRS
requirements.
9
The risk Our response
Valuation of Basis: Our audit procedures included:
Commodity
Securities The issuance of Commodity Securities Internal Controls: Assessed the
is central to the Company’s principal design and implementation of
USD3,121,116,614; activity. Commodity Securities allow controls over the valuation of
(2017: USD3,506,478,237) investors to gain long or short exposure Commodity Securities.
to movements in commodity indices.
Refer to the accounting Independent evaluation: Assessed
policy in note 2, and to Commodity Securities are accounted for the appropriateness of the pricing
disclosures in notes 8 at fair value. source and considered whether the
and 12. market price represents fair value in
The Company determines fair value by accordance with IFRS. Performed an
revaluing the Commodity Securities in independent evaluation of fair value
issue at the reporting date to prices based on published market prices,
quoted for the Commodity Securities in and compared to those determined by
active markets. the Company.
Risk: Assessing disclosures: Assessed the
fair value disclosures in the financial
The reported fair value of Commodity statements for compliance with IFRS
Securities may be materially misstated. requirements.
10
Our application of materiality and an overview of the scope of our audit
Materiality for the financial statements as a whole was set at USD15.6 million, determined
with reference to a benchmark of total assets of USD3,121,103,273 as at 31 December
2018, of which it represents 0.5% (2017: 0.5%).
We reported to the Board of Directors any corrected or uncorrected misstatements
identified exceeding USD780,000, in addition to other identified misstatements that
warranted reporting on qualitative grounds.
Our audit of the Company was undertaken to the materiality level specified above, which
has informed our identification of significant risks of material misstatement and the
associated audit procedures performed in those areas as detailed above.
We have nothing to report on going concern
We are required to report to you if we have concluded that the use of the going concern
basis of accounting is inappropriate or there is an undisclosed material uncertainty that may
cast significant doubt over the use of that basis for a period of at least twelve months from
the date of approval of the financial statements. We have nothing to report in these
respects.
We have nothing to report on the other information in the Directors’
Report
The directors are responsible for the other information presented in the Directors’ Report
together with the financial statements. Our opinion on the financial statements does not
cover the other information and we do not express an audit opinion or any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether,
based on our financial statements audit work, the information therein is materially
misstated or inconsistent with the financial statements or our audit knowledge. Based
solely on that work we have not identified material misstatements in the other information.
We have nothing to report on other matters on which we are required to
report by exception
We have nothing to report in respect of the following matters where the Companies
(Jersey) Law, 1991 requires us to report to you if, in our opinion:
• proper accounting records have not been kept by the Company;
• the financial statements are not in agreement with the accounting records; or
• we have not received all the information and explanations we require for our audit.
11
Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 7, the directors are responsible
for: the preparation of the financial statements including being satisfied that they give a true
and fair view; such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or
error; and assessing the Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going concern basis of
accounting unless they either intend to liquidate the Company or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but
does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website
at www.frc.org.uk/auditorsresponsibilities.
The purpose of this report and restrictions on its use by persons other
than the Company’s members as a body
This report is made solely to the Company’s members, as a body, in accordance with Article
113A of the Companies (Jersey) Law, 1991. Our audit work has been undertaken so that
we might state to the Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Steven Hunt
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognized Auditors, Jersey
11 March 2019
12
ETFS Commodity Securities Limited
Statement of Profit or Loss and Other Comprehensive Income
Year ended 31 December
2018 2017
Notes USD USD
Revenue 3 22,128,939 22,352,813
Expenses 3 (22,128,939) (22,352,813)
Operating Result 3 - -
Net (loss)/Gain Arising on Contractual and Fair
Value of Commodity Contracts 7 (543,940,397) 187,122,918
Net Gain/(Loss) Arising on Fair Value of
Commodity Securities 8 490,873,591 (158,203,363)
Result and Total Comprehensive Income for
the Year 8 (53,066,806) 28,919,555
1
Adjustment from Market Value to Contractual
Value (as set out in the Prospectus) of Commodity
Securities 2 53,066,806 (28,919,555)
Adjusted Result and Total Comprehensive
Income for the Year - -
The directors consider the Company’s activities as continuing.
1An explanation of the non-statutory adjustment is set out on page 20. This represents the movement in the difference
between the Contractual Value of the Commodity Contracts and the market price of Commodity Securities.
The notes on pages 17 to 29 form part of these financial statements
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ETFS Commodity Securities Limited
Statement of Financial Position
As at 31 December
2018 2017
Notes USD USD
Current Assets
Trade and Other Receivables 6 3,286,424 1,891,450
Commodity Contracts 7 3,091,983,052 3,530,411,481
Amounts Receivable on Commodity Contracts
Awaiting Settlement 7 11,959,380 29,819,343
Amounts Receivable on Commodity Securities
Awaiting Settlement 8 13,874,417 10,655,830
Total Assets 3,121,103,273 3,572,778,104
Current Liabilities
Commodity Securities 8 3,121,116,614 3,506,478,237
Amounts Payable on Commodity Securities
Awaiting Settlement 8 11,959,380 29,819,343
Amounts Payable on Commodity Contracts
Awaiting Settlement 7 13,874,417 10,655,830
Trade and Other Payables 9 3,286,422 1,891,448
Total Liabilities 3,150,236,833 3,548,844,858
Equity
Stated Capital 10 2 2
Revaluation Reserve (29,133,562) 23,933,244
Total Equity (29,133,560) 23,933,246
Total Equity and Liabilities 3,121,103,273 3,572,778,104
The financial statements on pages 13 to 29 were approved and authorised for issue by the board of directors
and signed on its behalf on 11 March 2019.
Steven Ross
Director
The notes on pages 17 to 29 form part of these financial statements
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ETFS Commodity Securities Limited
Statement of Cash Flows
Year ended 31 December
2018 2017
USD USD
Operating Result for the Year - -
Changes in Operating Assets and Liabilities
(Increase)/Decrease in Receivables (1,394,974) 46,808
Increase/(Decrease) in Payables 1,394,974 (46,808)
Cash Generated from Operating Activities - -
Net Increase in Cash and Cash Equivalents - -
Cash and Cash Equivalents at the Beginning of the
Year - -
Net Increase in Cash and Cash Equivalents - -
Cash and Cash Equivalents at the End of the Year - -
Commodity Securities are issued through a receipt of cash directly with the Commodity Contract
Counterparties or redeemed by the transfer of cash directly by the Commodity Contract Counterparties. Cash
flows in respect of the issue and redemption of Commodity Securities and the creation and cancellation of
Commodity Contract have been netted off in the Statement of Cash Flows.
The notes on pages 17 to 29 form part of these financial statements
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ETFS Commodity Securities Limited
Statement of Changes in Equity
Stated Retained Revaluation Total Adjusted
Capital Earnings Reserve 2 Equity Total Equity
Notes USD USD USD USD USD
Opening Balance at 1 January 2017 2 - (4,986,311) (4,986,309) 2
Result and Total Comprehensive Income for the Year - 28,919,555 - 28,919,555 28,919,555
Transfer to Revaluation Reserve 8 - (28,919,555) 28,919,555 - -
3 Adjustment from Market Value to Contractual Value
(as set out in the Prospectus) of Commodity Securities 8 - - - - (28,919,555)
Balance at 31 December 2017 2 - 23,933,244 23,933,246 2
Opening Balance at 1 January 2018 2 - 23,933,244 23,933,246 2
Result and Total Comprehensive Income for the Year - (53,066,806) - (53,066,806) (53,066,806)
Transfer to Revaluation Reserve 8 - 53,066,806 (53,066,806) - -
3 Adjustment from Market Value to Contractual Value
(as set out in the Prospectus) of Commodity Securities 8 - - - - 53,066,806
Balance at 31 December 2018 2 - (29,133,562) (29,133,560) 2
2 This represents the difference between the Contractual Value of the Commodity Contracts and the market price of Commodity Securities.
3 An explanation of the non-statutory adjustment is set out on page 20.
The notes on pages 17 to 29 form part of these financial statements
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ETFS Commodity Securities Limited
Notes to the Financial Statements
1. General Information
ETFS Commodity Securities Limited (the “Company”) is a company incorporated in Jersey. The address of
the registered office is Ordnance House, 31 Pier Road, St. Helier, Jersey, JE4 8PW.
The purpose of the Company is to provide a vehicle that permits trading of Commodity Securities. The
Company does not make gains from trading in the underlying Commodity Contracts themselves. The
Commodity Securities are issued under limited recourse arrangements whereby the Company has no residual
exposure to price movements of the underlying assets, therefore from a commercial perspective gains and
losses in respect of Commodity Contracts will always be offset by a corresponding loss or gain on the
Commodity Securities. Further details regarding the risks of the Company are disclosed in note 12.
Exchange-traded products are not typically actively managed, are significantly lower in cost when compared
to actively managed mutual funds and are easily accessible to investors. No trading or management of futures
contracts is required of the Company because the Company has entered into arrangements to acquire an
equivalent asset exposure to the underlying assets from third parties which fully hedges the exposure of the
Company.
The Company is entitled to:
(1) a management fee and a licence allowance which are calculated by applying a fixed percentage to
the contractual value of Commodity Securities in issue on a daily basis; and
(2) creation and redemption fees on the issue and redemption of the Commodity Securities.
No creation or redemption fees are payable to the Company when investors trade in the Commodity Securities
on a listed market such as the London Stock Exchange. Creation and redemption fees may also be waived
with certain approved persons where applicable.
The Company has entered into a service agreement with ETFS Management Company (Jersey) Limited
(“ManJer” or the “Manager), whereby ManJer is responsible for supplying or procuring the supply of all
management and administration services required by the Company (including marketing), as well as the
payment of costs relating to the listing and issuance of Commodity Securities. In return for these services the
Company pays ManJer an amount equal to the management fee, licence allowance and the creation and
redemption fees earned (the “ManJer Fee”). As a result there are no operating profits or losses recognised
through the Company.
2. Accounting Policies
The main accounting policies of the Company are described below.
Basis of Preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRSs”) as issued by the International Accounting Standards Board (“IASB”), and interpretations issued by
the International Financial Reporting Interpretations Committee of the IASB. The financial statements have
been prepared under the historical cost convention, as modified by the revaluation of financial assets and
financial liabilities held at fair value through profit or loss.
Going Concern
The nature of the Company’s business dictates that the outstanding Commodity Securities may be redeemed
at any time by the holder and in certain circumstances may be compulsorily redeemed by the Company.
Generally only security holders who have entered into an authorised participant agreement with the Company
(“Authorised Participant”) can submit applications and redemptions directly with the Company. As the
redemption of Commodity Securities will always coincide with the cancellation of an equal amount of
Commodity Contracts, no net liquidity risk is considered to arise. All other expenses of the Company are met
by ManJer; therefore the directors consider the Company to be a going concern for the foreseeable future and
have prepared the financial statements on this basis.
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
2. Accounting Policies (continued)
Going Concern (continued)
On 11 April 2018 WisdomTree Investments, Inc (an exchange-traded product sponsor and asset manager)
acquired ETFS Capital Limited’s (formerly ETF Securities Limited) European exchange-traded product
business as a going concern, which includes the Company. Following completion of the acquisition, the
Company continues as a going concern.
Critical Accounting Estimates and Judgements
The presentation of financial statements in conformity with IFRSs requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Company’s
accounting policies.
The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities.
Estimates are continually evaluated and based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. The only key
accounting judgement required to prepare these financial statements is in respect of the valuation of
Commodity Contracts and Commodity Securities held at fair value through profit or loss as disclosed in notes
7 and 8. Actual results could vary from these estimates.
Accounting Standards
(a) Standards, amendments and interpretations adopted in the year:
In preparing the financial statements the Company has adopted all new or revised Standards and
Interpretations, including:
• IFRS 9 Financial Instruments
• IFRS 15 Revenues
Under IAS 39 Commodity Securities and Commodity Contracts were designated as financial instruments
at fair value through profit or loss and loans and receivables were measured at amortised cost. Following
the adoption of IFRS 9 there has been no change in the classification or measurement of any financial
assets or liabilities held by the Company.
Of those Standards and Interpretations adopted in the current year, none have resulted in any significant
effect on these financial statements.
The Company has not applied the following new and revised IFRSs that have been issued but are not
yet effective:
• IFRS 16 Leases (effective for annual periods beginning on or after 1 January 2019)
• IFRS 17 Insurance Contracts (effective for annual periods beginning on or after 1 January 2021)
• IAS 28 Investments in Associates and Joint Ventures (effective for annual periods beginning on or
after 1 January 2019)
• Annual Improvements to IFRS
The directors do not expect the adoption of the above standards, amendments and interpretations that
are in issue but not yet effective will have a material impact on the financial statements of the Company
in future periods.
The directors have considered other standards and interpretations in issue but not effective and concluded
that they would not have a material impact on the future financial periods when they become available.
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
2. Accounting Policies (continued)
Commodity Securities and Commodity Contracts
i) Issue and Redemption
The Company has entered into facility agreements with Citigroup Global Markets Limited (“Citigroup”) and
Merrill Lynch International (“Merrill Lynch”) (collectively the “Commodity Contract Counterparties”). The facility
agreements permit the Company to create and cancel Commodity Contracts at prices equivalent to Commodity
Securities issued or redeemed on the same day. Each time a Commodity Security is issued or redeemed by
the Company a corresponding number and value of Commodity Contracts are created or cancelled with the
Commodity Contract Counterparties.
Financial assets and liabilities are recognised and de-recognised on the transaction date.
UBS Securities AG, London Branch (“UBS”) and Merrill Lynch Commodities, Inc (“MLCI”) were commodity
contract counterparties and had entered into agreements with the Company on similar terms to the current
facility agreements with the existing Commodity Contract Counterparties. The facility agreements with UBS
and MLCI were terminated on 24 October 2017 and the Commodity Contracts outstanding thereunder were
replaced by equivalent Commodity Contracts with Merrill Lynch and Citigroup, respectively.
ii) Pricing
The Commodity Contracts are priced by reference to the value of the commodity indices calculated and
published by Bloomberg L.P. or Bloomberg Finance L.P. (together “Bloomberg”) and a multiplier calculated by
the Company and agreed with the Commodity Contract Counterparties. The multiplier takes into account the
daily accrual of the management fee and licence allowance and swap spread as well as the capital adjustment
component of the Commodity Security, and is the same across all Commodity Securities of the same type (i.e.
all Classic Commodity Securities use the same multiplier). This price is calculated based on the formula set
out in the Prospectus, and is referred to as the ‘Contractual Value’ and is considered to be the fair value of the
Commodity Transactions.
IFRS 13 requires the Company to identify the principal market and to utilise the available market price within
that principal market. The directors consider that the stock exchanges where the Commodity Securities are
listed to be the principal market and as a result the fair value of the Commodity Securities is the on-exchange
price as quoted on those stock exchanges demonstrating active trading. The Commodity Securities are priced
using the closing mid-market price on the Statement of Financial Position date.
Consequently a difference arises between the value of Commodity Contracts (at Contractual Value) and
Commodity Securities (at market value) presented in the Statement of Financial Position. This difference is
reversed on a subsequent redemption of the Commodity Securities and cancellation of the corresponding
Commodity Contracts.
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
2. Accounting Policies (continued)
Commodity Securities and Commodity Contracts (continued)
iii) Designation at fair value through Profit or Loss
Each Commodity Security and Commodity Contract comprises a financial instrument whose redemption or
cancellation price is linked to the performance of the relevant commodity index adjusted by the applicable fees
and expenses.
These instruments are designated at fair value through profit or loss upon initial recognition. This is in order
to enable gains or losses on both the Commodity Securities and Commodity Contracts to be recorded in the
Statement of Profit or Loss and Other Comprehensive Income.
Through the mis-matched accounting values, the results of the Company reflect a gain or loss which represents
the movement in the cumulative difference between the Contractual Value (based on the formula set out in the
Prospectus) of the Commodity Contracts and the market price of Commodity Securities. This gain or loss is
transferred to a Revaluation Reserve which is non-distributable. The results of the Company are adjusted
through the presentation of a non-statutory movement entitled ‘Adjustment from Market Value to Contractual
Value (as set out in the Prospectus) of Commodity Securities’.
Commodity Contracts and Securities Awaiting Settlement
The issue or redemption of Commodity Securities, and the creation or cancellation of Commodity Contracts,
is accounted for on the transaction date. Where settlement pricing is applied, the transaction will not settle
until two days after the transaction date. Where transactions are awaiting settlement at the year end, the
monetary value of the Commodity Contracts and the Commodity Securities due to be settled is separately
disclosed within the relevant assets and liabilities on the Statement of Financial Position.
Revenue Recognition
Revenue is recognised to the extent that the economic benefits will flow to the Company and the revenue can
be reliably measured. Revenue is measured at the fair value of the consideration received, excluding
discounts, rebates, and other sales taxes or duty.
Fees received for the issue and redemption of Commodity Securities are recognised at the date on which the
transaction becomes legally binding. All other income and expenses are recognised on an accruals basis.
Loans and Receivables
The loans and receivables are non-derivative financial assets with a fixed payment amount and are not quoted
in an active market. After initial measurement the loans and receivables are carried at amortised cost using
the effective interest method less any allowance for expected credit losses. The effective interest method is a
method of calculating the amortised cost of an instrument and of allocating interest over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees paid
or received that form an integral part of the effective interest rate, transaction costs and other premiums or
discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net
carrying amount on initial recognition. Impairment losses, including reversals of impairment losses and
impairment gains, are presented in the statement of profit or loss and other comprehensive income.
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
2. Accounting Policies (continued)
Foreign Currency Translation
The financial statements of the Company are presented in the currency of the primary economic environment
in which it operates (its functional currency). For the purpose of the financial statements, the results and
financial position of the Company are expressed in United States Dollars, which is the functional currency of
the Company, and the presentational currency of the financial statements.
Monetary assets and liabilities denominated in foreign currencies at the year end date are translated at rates
ruling at that date. Creation and redemption fees are translated at the average rate for the month in which
they are incurred. The resulting differences are accounted for through profit or loss.
Segmental Reporting
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the
Company that are regularly reviewed by the Chief Operating Decision Maker (“CODM”) in order to allocate
resources to the segments and to assess their performance. The CODM has been determined as the board
of directors. A segment is a distinguishable component of the Company that is engaged either in providing
products or services (business segment), or in providing products and services within a particular economic
environment (geographical segment), which is subject to risks and rewards that are different from those of
other segments.
The Company reports information on its operations for each of the Company’s business segments only, as the
Company only has one geographic segment which is Europe. In addition the Company has no single major
customer from which greater than 10% of revenue is generated. The directors believe that there are two
segments comprising Classic & Longer Dated and Short & Leveraged – results of each are disclosed
separately in note 5.
3. Operating Result
Operating result for the year comprised:
Year ended 31 December
2018 2017
USD USD
Management Fees 19,677,422 20,172,029
Licence Allowance 1,796,708 1,809,465
Creation and Redemption Fees 654,809 371,319
Total Revenue 22,128,939 22,352,813
ManJer Fees (22,128,939) (22,352,813)
Total Operating Expenses (22,128,939) (22,352,813)
Operating Result - -
Audit Fees for the year of GBP 24,450 will be met by ManJer (2017: GBP 23,000).
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
4. Taxation
The Company is subject to Jersey Income Tax. During the year the Jersey Income Tax rate applicable to the
Company is zero percent (2017: zero percent).
5. Segmental Reporting
The Company has two operating segments; Classic & Longer Dated and Short & Leveraged Commodity
Securities in issue. The Company earns revenues from each of these sources.
For the year ended Classic & Short &
31 December 2018: Longer Dated Leveraged Total
USD USD USD
Management Fees 15,379,915 4,297,507 19,677,422
Licence Allowance 1,577,447 219,261 1,796,708
Creation and Redemption Fees 339,973 324,836 654,809
Total Revenue 17,297,335 4,841,604 22,138,939
Total Operating Expenses (17,297,335) (4,841,604) (22,138,939)
Segmental Result - - -
For the year ended Classic & Short &
31 December 2017: Longer Dated Leveraged Total
USD USD USD
Management Fees 15,293,481 4,878,548 20,172,029
Licence Allowance 1,560,559 248,906 1,809,465
Creation and Redemption Fees 186,479 184,875 371,354
Total Revenue 17,040,519 5,312,329 22,352,848
Total Operating Expenses (17,040,519) (5,312,329) (22,352,848)
Segmental Result - - -
Additional information relating to the assets and liabilities associated with these Commodity Securities is
disclosed in notes 7 and 8.
6. Trade and Other Receivables
As at 31 December
2018 2017
USD USD
Management Fees and Licence Allowance 3,011,359 1,683,078
Creation and Redemption Fees 275,063 208,370
Receivable from Related Party 2 2
3,286,424 1,891,450
The fair value of these receivables is equal to the carrying value.
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
7. Commodity Contracts
31 December 2018 Change in
Fair Value Fair Value
USD USD
Classic & Longer Dated Commodity Contracts (494,149,012) 2,735,862,976
Short & Leveraged Commodity Contracts (49,791,385) 356,120,076
Total Commodity Contracts (543,940,397) 3,091,983,052
31 December 2017 Change in
Fair Value Fair Value
USD USD
Classic & Longer Dated Commodity Contracts 193,069,698 3,008,284,802
Short & Leveraged Commodity Contracts (5,946,780) 522,126,679
Total Commodity Contracts 187,122,918 3,530,411,481
As at 31 December 2018, there were certain Commodity Contracts awaiting settlement in respect of the
creation or redemption of Securities with transaction dates before the year end and settlement dates in the
following year:
• The amount receivable on Commodity Contracts as a result of unsettled redemptions of Commodity
Securities is USD 11,959,380 (2017: USD 29,819,343).
• The amount payable on Commodity Contracts as a result of unsettled creations of Commodity
Securities is USD 13,874,417 (2017: USD 10,655,830).
8. Commodity Securities
Whilst the Commodity Securities are quoted on the open market, the Company’s liability relates to its
contractual obligations to issue and redeem Commodity Securities at set prices on each trading day. These
prices are based on agreed formulae, and are equal to the published net asset values (“NAV”) of each class
of Commodity Security. Therefore, the actual contractual issue and redemption of Commodity Securities occur
at a price that corresponds to gains or losses on the Commodity Contracts. As a result the Company has no
net exposure to gains or losses on the Commodity Securities and Commodity Contracts.
The Company measures the Commodity Securities at their market value in accordance with IFRS 13 rather
than their Contractual Value (as described in the Prospectus). The market value is deemed to be the prices
quoted on stock exchanges or other markets where the Commodity Securities are listed or traded. However
Commodity Contracts are valued based on the agreed formulae set out in the Prospectus.
The fair values and changes thereof during the year based on prices available on the open market as
recognised in the financial statements are:
31 December 2018 Change in
Fair Value Fair Value
USD USD
Classic & Longer Dated Commodity Securities 449,891,837 2,761,492,515
Short & Leveraged Commodity Securities 40,981,754 359,624,100
Total Commodity Securities 490,873,591 3,121,166,614
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
8. Commodity Securities (continued)
The contractual redemption values and changes thereof during the year based on the contractual settlement
values are:
31 December 2018 Change in
Contractual
Contractual
Redemption Redemption
Value Value
USD USD
Classic & Longer Dated Commodity Securities 494,149,012 2,735,862,976
Short & Leveraged Commodity Securities 49,791,385 356,120,076
Total Commodity Securities 543,940,397 3,091,983,052
The gain or loss on the difference between the agreed Contractual Value of the Commodity Contracts and the
market price of Commodity Securities would be reversed on a subsequent redemption of the Commodity
Securities and cancellation of the corresponding Commodity Contracts.
The mismatched accounting values are as shown below and represent the non-statutory adjustment presented
in the Statement of Profit or Loss and Other Comprehensive Income:
Year ended 31 December
2018 2017
USD USD
Net (Loss) / Gain Arising on Contractual and Fair Value of
Commodity Contracts (543,940,397) 187,122,918
Net Gains / (Loss) Arising on Fair Value of Commodity
Securities 490,873,591 (158,203,363)
(53,066,806) 28,919,555
As at 31 December 2018, there were certain Commodity Securities awaiting settlement in respect of creations
or redemptions with transaction dates before the year end and settlement dates in the following year:
• The amount receivable as a result of unsettled creations of Commodity Securities is USD 13,874,417
(2017: USD 10,655,830).
• The amount payable as a result of unsettled redemptions of Commodity Securities is USD 11,959,380
(2017: USD 29,819,343).
31 December 2017 Change in
Fair Value Fair Value
USD USD
Classic & Longer Dated Commodity Securities (171,682,256) 2,989,657,166
Short & Leveraged Commodity Securities 13,478,893 516,821,071
Total Commodity Securities (158,203,363) 3,506,478,237
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
8. Commodity Securities (continued)
31 December 2017 Change in
Contractual
Contractual
Redemption Redemption
Value Value
USD USD
Classic & Longer Dated Commodity Securities (193,069,698) 3,008,284,802
Short & Leveraged Commodity Securities 5,946,780 522,126,679
Total Commodity Securities (187,122,918) 3,530,411,481
9. Trade and Other Payables
As at 31 December
2018 2017
USD USD
ManJer Fees Payable 3,286,422 1,891,448
The fair value of these payables is equal to the carrying value.
10. Stated Capital
As at 31 December
2018 2017
USD USD
2 Shares of Nil Par Value, Issued at GBP 1 Each 2 2
The Company can issue an unlimited capital of nil par value shares in accordance with its Memorandum of
Association.
All Shares issued by the Company carry one vote per Share without restriction and carry the right to dividends.
All Shares are held by ETFS Holdings (Jersey) Limited (“HoldCo”). ETFS Capital Limited (formerly ETF
Securities Limited) was the parent company of HoldCo until completion of the acquisition by WisdomTree
Investments, Inc (“WisdomTree”) on 11 April 2018, on which date, WisdomTree became the ultimate parent.
11. Related Party Disclosures
Entities and individuals which have a significant influence over the Company, either through the ownership or
by virtue of being a director of the Company, are related parties.
Fees charged by ManJer during the year:
Year ended 31 December
2018 2017
USD USD
ManJer Fees 22,128,939 22,352,813
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
11. Related Party Disclosures (continued)
The following balances were due to ManJer at year end:
As at 31 December
2018 2017
USD USD
ManJer Fees Payable 3,286,424 1,891,450
At 31 December 2018, USD 2 is receivable from ManJer (2017: USD 2) in relation to unpaid share capital.
As disclosed in the Directors’ Report, ManJer paid Directors’ Fees in respect of the Company of GBP 9,315
(2017: GBP 8,000).
Steven Ross and Hilary Jones are directors of R&H Fund Services (Jersey) Limited (“R&H” or the
“Administrator”) and Steven Ross is a partner of Rawlinson & Hunter, Jersey Partnership, which wholly owns
R&H. Christopher Foulds was the Compliance Officer of ManJer, and was an employee of ETFS Capital
Limited (formerly ETF Securities Limited) until 11 April 2018. On 11 April 2018 Christopher Foulds joined R&H
and he resigned on 2 November 2018. During the year, R&H charged ManJer administration fees in respect
of the Company of GBP 321,121 (2017: GBP 300,984), of which GBP 83,250 (2017: GBP 70,750) was
outstanding at the year end.
Gregory Barton and Peter Ziemba are executive officers of WisdomTree Investments, Inc.
Graham Tuckwell is a director of ETFS Capital Limited (formerly ETF Securities Limited) and was a director of
ManJer and HoldCo until 11 April 2018. Joseph Roxburgh was a director of ManJer and HoldCo and the
Company Secretary of the Company until 11 April 2018.
12. Financial Risk Management
The Commodity Securities are subject to normal market fluctuations and other risks inherent in investing in
securities and other financial instruments. There can be no assurance that any appreciation in the value of
securities will occur, and the capital value of an investor’s original investment is not guaranteed. The value of
investments may go down as well as up, and an investor may not get back the original amount invested.
The Company is exposed to a number of risks arising from its activities. The information provided below is not
intended to be a comprehensive summary of all the risks associated with the Commodity Securities and
investors should refer to the most recent Prospectus for a detailed summary of the risks inherent in investing
in the Commodity Securities. Any data provided should not be used or interpreted as a basis for future forecast
or investment performance.
The risk management policies employed by the Company to manage these are discussed below.
(a) Credit Risk
Credit risk primarily refers to the risk that Authorised Participants or the Commodity Contract Counterparty will
default on its contractual obligations resulting in financial loss.
The value of Commodity Securities and the ability of the Company to repay the redemption price is dependent
on the receipt of such amount from the Commodity Contract Counterparties and may be affected by the credit
rating attached to each Commodity Contract Counterparty.
To cover the credit risk under the Commodity Contracts, the Commodity Contract Counterparties are obliged
to place an equivalent amount of collateral into a pledge account with the Bank of New York Mellon based on
the total outstanding value of the Commodity Contracts at the end of the previous trading day. In the event of
default by a Commodity Contract Counterparty, the Company has rights which it can exercise over the amounts
placed in this pledge account.
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
12. Financial Risk Management (continued)
(b) Credit Risk – continued
The Board monitors credit risk exposure in to ensure the Company’s exposure is managed.
(c) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities as they fall due.
Generally, there is no liquidity risk to the Company because the maturity profiles of the Commodity Securities
and Commodity Contracts are matched, therefore the Company does not have to wait for a longer-term
contract to mature in order to pay its debts to ex-security holders. Furthermore, while the agreements with the
Commodity Contract Counterparties include limits (both daily and in the aggregate) on the issue and
cancellation of Commodity Contracts, the Company is not obliged to issue and redeem Commodity Securities
in excess of those limits under the terms of the security agreement.
(d) Settlement Risk
Settlement risk primarily refers to the risk that an Authorised Participant or the Commodity Contract
Counterparty will default on its contractual obligations resulting in financial loss.
The directors believe that settlement risk would only be caused by the risk of the Company’s trading
counterparty not delivering cash, Commodity Contracts or Commodity Securities on the settlement date. The
directors feel that this risk is mitigated as a result of the cash or Commodity Securities settling through the
CREST system. The system ensures that the transaction does not settle until both parties have fulfilled their
contractual obligations.
Amounts outstanding in respect of positions yet to settle are disclosed in notes 7 and 8.
(e) Capital Management
The Company’s principal activity is the issue and listing of Commodity Securities. These Commodity Securities
are issued and redeemed as demand requires. The Company holds a corresponding number of Commodity
Contracts which matches the total liability of the Commodity Securities issued. ManJer supplies or arranges
for the supply of all management and administration services to the Company and pays all management and
administration costs of the Company. In return for these services the Company pays ManJer a fee, which
under the terms of the service agreement is equal to the aggregate of the management fee, licence allowance
and creation and redemption fees earned. The Company is not subject to any capital requirements imposed
by a regulator and there were no changes in the Company’s approach to capital management during the year.
As all Commodity Securities in issue are supported by an equivalent number of Commodity Contracts held
with the Commodity Contract Counterparties and the running costs of the Company are paid by ManJer, the
directors of the Company consider the capital management and its current capital resources are adequate to
maintain the ongoing listing and issue of Commodity Securities.
(f) Sensitivity Analysis
IFRS 7 requires disclosure of a sensitivity analysis for each type of market risk to which the Company is
exposed to at the reporting date, showing how profit or loss and equity would have been affected by a
reasonably possible change to the relevant risk variable.
The Company’s rights and liability in respect of Commodity Contracts and Commodity Securities, respectively,
relates to its contractual obligations to issue and redeem Commodity Securities at set prices on each trading
day. As a result the Company’s contractual and economic liability in connection with the issue and redemption
of Commodity Securities is matched by movements in corresponding Commodity Contracts. Consequently,
the Company does not have any net exposure to market price risk. Therefore, in the directors’ opinion, no
sensitivity analysis is required to be disclosed.
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
12. Financial Risk Management (continued)
(g) Market Risk
Market risk is the risk that changes in market prices (such as foreign exchange rates, interest rates and equity
prices) will affect the Company’s income or the value of its financial instruments held or issued.
i) Price Risk
The value of the Company’s liability in respect of the Commodity Securities fluctuates according to the
performance of the underlying commodity index and the risk of such change in price is managed by the
Company by entering into Commodity Contracts with the Commodity Contract Counterparties which match
the liability. The Company therefore bears no financial risk from a change in the price of a commodity,
commodity index or currency by reference to the futures price. Refer to note 8 for the further details
regarding fair values.
However there is an inherent risk from the point of view of investors as the price of commodities, and thus
the value of the Commodity Securities, may vary widely due to, amongst other things, changing supply or
demand, government and monetary policy or intervention and global or regional political, economic or
financial events.
The market price of Commodity Securities is a function of supply and demand amongst investors wishing
to buy and sell Commodity Securities and the bid-offer spread that the market makers are willing to quote.
This is highlighted in note 8, and below under the Fair Value Hierarchy.
ii) Interest Rate Risk
The multiplier used in the pricing of the Commodity Contracts or the Commodity Securities takes into
account the incremental capital enhancement component of the Commodity Security, which includes the
impact of interest rates. As a result the Company does not have significant exposure to interest rate risk.
iii) Currency Risk
The directors do not consider the Company to have a significant exposure to currency risk arising from the
current economic uncertainties facing a number of countries around the world as the gains or losses on
the liability represented by the Commodity Securities are matched economically by corresponding losses
or gains attributable to the Commodity Contracts.
(h) Fair Value Hierarchy
The levels in the hierarchy are defined as follows:
• Level 1 fair value based on quoted prices in active markets for identical assets.
• Level 2 fair values based on valuation techniques using observable inputs other than quoted prices
within level 1.
• Level 3 fair values based on valuation techniques using inputs that are not based on observable
market data.
Categorisation within the hierarchy is determined on the basis of the lowest level input that is significant to the
fair value measurement of each relevant asset/liability.
The Company is required to utilise the available market price as the Commodity Securities are quoted and
actively traded on the open market. Therefore Commodity Securities are classified as level 1 financial
liabilities.
The Company’s rights in respect of Commodity Contracts relate to its contractual obligations to issue and
redeem Commodity Securities at set prices on each trading day. These prices are based on an agreed formula
(set out in the Prospectus), and are equal to the published NAV’s of each class of Commodity Security.
Therefore, Commodity Contracts are classified as level 2 financial assets, as the value is calculated using third
party pricing sources supported by observable, verifiable inputs.
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ETFS Commodity Securities Limited
Notes to the Financial Statements (Continued)
12. Financial Risk Management (continued)
(g) Fair Value Hierarchy (continued)
The categorisation of the Company’s assets and (liabilities) are as shown below:
Fair Value as at 31 December
2018 2017
USD USD
Level 1
Commodity Securities (3,121,166,614) (3,506,478,237)
Level 2
Commodity Contracts 3,091,983,052 3,530,411,481
The Commodity Securities and the Commodity Contracts are recognised at fair value through profit or loss
upon initial recognition in line with the Company’s accounting policy. There are no assets or liabilities classified
in level 3. There were no reclassifications during the year.
13. Ultimate Controlling Party
The immediate parent company is HoldCo, a Jersey registered company. Following completion of the
acquisition which included HoldCo on 11 April 2018 the ultimate controlling party is WisdomTree Investments,
Inc. Prior to 11 April 2018 Graham Tuckwell was the ultimate controlling party of HoldCo through his majority
shareholding in ETFS Capital Limited (formerly ETF Securities Limited).
The value of the Commodity Contracts backing the Commodity Securities is wholly attributable to the holders
of the Commodity Securities.
14. Events Occurring After the Reporting Period
No significant events have occurred since the end of the reporting period up to the date of signing the Financial
Statements which would impact on the financial position of the Company disclosed in the Statement of
Financial Position as at 31 December 2018 or on the results and cash flows of the Company for the year ended
on that date.
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The intelligent
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