Half-yearly Results

LONDON--(BUSINESS WIRE)--

COMPANY ANNOUNCEMENT

Immediate Release 28 August 2015

DB ETC plc (the Issuer)

incorporated and registered in Jersey under the Companies (Jersey)

Law 1991 (as amended) with registered number 103781

Publication of Management Report and condensed unaudited interim Financial Statements for the half year ended 30 June 2015.

This Report shall be available at the following website: www.etc.db.com

Enquiries to:

[e-mail]

DB ETC plc

db ETC Plc

Management report and Condensed unaudited interim financial statements

For the half year ended 30 June 2015

Registered number : 103781

db ETC Plc
Contents
	Page (s)
Directors and other information	1
Interim management report	2
Responsibility statement	3
Condensed statement of comprehensive income	4
Condensed statement of financial position	5
Condensed statement of changes in equity	6
Condensed statement of cash flows	7
Notes to the condensed interim financial statements	8 - 14

db ETC Plc
			Page 1
Directors and other information
Directors	Elian Corporate Director 3 Limited (Formerly Ogier Corporate Director (Jersey) 3 Limited)
	Elian Corporate Director 4 Limited (Formerly Ogier Corporate Director (Jersey) 4 Limited)
	Carl McConnell
Registered Office	St Paul's Gate
	New Street
	St Helier
	Jersey JE4 8ZB
	Channel Islands
Administrator, Determination Agent &	Deutsche International Corporate Services Limited
Company Secretary	St Paul's Gate
	New Street
	St Helier
	Jersey JE4 8ZB
	Channel Islands
Authorised Participant, Arranger,	Deutsche Bank AG
Issuing and Paying Agent, Programme	London Branch
Counterparty and Metal Agent	Winchester House
	1 Great Winchester Street
	London EC2N 2DB
	United Kingdom
Custodian	(As from 17 August 2015)	(Until 16 August 2015)
	JPMorgan Chase Bank, N.A., London Branch	Deutsche Bank AG
	25 Bank Street	London Branch
	London E14 5JP	Winchester House
	Uniked Kingdom	1 Great Winchester Street
		London EC2N 2DB
		United Kingdom
Note Trustee	Deutsche Trustee Company Limited
	Winchester House
	1 Great Winchester Street
	London EC2N 2DB
	United Kingdom

db ETC Plc
		Page 2
Interim management report
The directors present their interim report and the unaudited financial statements of db ETC Plc (the “Company”) for the half year ended 30 June 2015.
Principal activities and business review
The Company was incorporated on 6 August 2009 as a public limited company in Jersey under the Companies (Jersey) Law 1991 with Company number 103781.
The principal activity of the Company, under the Secured ETC Precious Metal Securities Programme (the “Programme”), is to issue from time to time Series of secured precious metal linked securities (“ETC Securities”), where recourse in respect of each Series is limited to the proceeds of enforcement of the security over each respective Series' assets.
With respect to each Series (each a "Series") of ETC Securities, the Company’s main assets are its holdings of underlying metal and its interests under the related Balancing Agreement. The obligations of the Company under the ETC Securities of a Series will be secured in favour of the Trustee by an assignment by way of security of all the Company’s rights, title, interest and benefit present and future against the Secured Account Custodian, the Subscription Account Custodian and any Sub-Custodian relating to the underlying metal in respect of this Series of ETC Securities.
The net proceeds from the issue of a Series of ETC Securities are used to purchase an amount of unallocated metal which, in accordance with the Custody Agreement for secured accounts will, to the extent possible, be allocated to physical metal bars or other metal shapes and be held in the secured allocated account. Any remaining metal is held in the secured unallocated account. Such underlying metal is used to meet the Company’s obligations under the relevant Series of ETC Securities and the relevant Balancing Agreement.
During the half year ended:
---	the Company made a profit of EUR Nil (30 June 2014: EUR Nil);
---	the net fair value loss on inventories amounted to EUR 13,485,001 (30 June 2014: net fair value gain of EUR 150,345,036); and
---	the net fair value gain on financial liabilities designated at fair value through profit or loss amounted to EUR 13,485,001 (30 June 2014: net fair value loss of EUR 150,345,036).
As at 30 June 2015:
---	the Company’s total fair value of financial liabilities designated at fair value through profit or loss was EUR 1,867,892,250 (31 December 2014: EUR 1,655,948,151); and
---	the net assets of the Company was EUR 30,002 (31 December 2014: EUR 30,002).
Future developments
The directors expect that the present level of activity will be sustained for the foreseeable future. The Board will continue to seek new opportunities for the Company and will continue to ensure proper management of the current portfolio of Series of the Company.
Credit events
There was no credit event noted during the period.
Subsequent event
Subsequent events are disclosed under note 17 to the financial statements.
Results and dividends for the period
The results for the period are set out on page 4. The directors do not recommend the payment of a dividend for the period under review (30 June 2014: Nil).
Changes in directors, secretary and registered office
There has been no changes in directors, secretary and registered office during the period.
Directors, secretary and their interests
The directors who held office on 30 June 2015 did not hold any share in the Company at that date, or during the half year. There were no contracts of any significance in relation to the business of the Company in which the directors had any interest, as defined in the Companies (Jersey) Act 1991, at any time during the half year.
On behalf of the board
Director
Date:

db ETC Plc
		Page 3
Responsibility statement
The Company’s directors are responsible for preparing the management report and the interim financial statements in accordance with applicable law and regulations. The directors confirm that, to the best of their knowledge:
•	the condensed financial statements, which have been prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and results of the Company, and
•	the Interim Management Report includes a fair review of:
	• important events that have occurred during the first six months of the year;
	• the impact of those events on the condensed financial statements; and
	• a description of the principal risks and uncertainties for the remaining six months of the financial year.
The directors further indicate that such interim financial statements for the half year ended 30 June 2015 have not been audited.
On behalf of the board
Director: Carl McConnell
Date:

db ETC Plc
			Page 4
Condensed statement of comprehensive income
For the half year ended 30 June 2015
		Period ended	Period ended
		30-Jun-15	30-Jun-14
	Notes	EUR	EUR
Net fair value (loss)/gain on inventories	4, 9	(13,485,001)	150,345,036
Net fair value gain/(loss) on financial liabilities designated at fair value through profit or loss	5, 10	13,485,001	(150,345,036)
Operating profit before taxation		-	-
Taxation	6	-	-
Total comprehensive income for the financial period		-	-

db ETC Plc
			Page 5
Condensed statement of financial position
As at 30 June 2015
		30-Jun-15	31-Dec-14
	Notes	EUR	EUR
Assets
Cash and cash equivalents	7	2	2
Other receivables	8	30,000	30,000
Inventories held at fair value	9	1,867,892,250	1,655,948,151
Total assets		1,867,922,252	1,655,978,153
Liabilities and equity
Liabilities
Financial liabilities designated at fair value through profit or loss	10	1,867,892,250	1,655,948,151
Total liabilities		1,867,892,250	1,655,948,151
Equity
Share capital – equity	11	2	2
Retained earnings		30,000	30,000
Total equity		30,002	30,002
Total liabilities and equity		1,867,922,252	1,655,978,153
The condensed interim financial statements on pages 4 to 14 were approved by the Board and authorised for issue on ………2015
On behalf of the board
Director
Date:

db ETC Plc
			Page 6
Condensed statement of changes in equity
For the half year ended 30 June 2015
		Retained earnings
	Share capital		Total equity
	EUR	EUR	EUR
Balance as at 1 January 2014	2	30,000	30,002
Comprehensive income for the period
Profit for the period	-	-	-
Total comprehensive income for the period	-	-	-
Balance as at 30 June 2014	2	30,000	30,002
Comprehensive income for the period
Profit for the period	-	-	-
Total comprehensive income for the period	-	-	-
Balance as at 31 December 2014	2	30,000	30,002
Balance as at 1 January 2015	2	30,000	30,002
Comprehensive income for the period
Profit for the period	-	-	-
Total comprehensive income for the period	-	-	-
Balance as at 30 June 2015	2	30,000	30,002

db ETC Plc
			Page 7
Condensed statement of cash flows
For the half year ended 30 June 2015
		Period ended	Period ended
		30-Jun-15	30-Jun-14
	Notes	EUR	EUR
Cash flows from operating activities
Profit before taxation		-	-
Adjustments for:
Net fair value loss/(gain) on inventories	4,9	13,485,001	(150,345,036)
Net fair value (gain)/loss on financial liabilities designated at fair value through profit or loss	5,10	(13,485,001)	150,345,036
Net cash generated from operating activities		-	-
Cash flows from investing activities
Purchase of inventories	9	(401,806,649)	(334,828,130)
Proceeds from disposal of inventories	9	176,377,549	233,187,837
Net cash used in investing activities		(225,429,100)	(101,640,293)
Cash flows from financing activities
Issue of financial liabilities designated at fair value through profit or loss	10	401,806,649	334,828,130
Redemption of financial liabilities designated at fair value through profit or loss	10	(176,377,549)	(233,187,837)
Net cash generated from financing activities		225,429,100	101,640,293
Movement in cash and cash equivalents		-	-
Cash and cash equivalents at start of the period		2	2
Cash and cash equivalents at end of the period	7	2	2

db ETC Plc
			Page 8
Notes to the condensed interim financial statements
For the half year ended 30 June 2015
1	General information
	The Company was incorporated on 6 August 2009 as a public limited company in Jersey under the Companies (Jersey) Law 1991, as amended, with company number 103781.
	The principal activity of the Company, under the Secured ETC Precious Metal Securities Programme (the “Programme”), is to issue from time to time Series of secured precious metal linked securities (“ETC Securities”), where recourse in respect of each Series is limited to the proceeds of enforcement of the security over each respective Series' assets.
2	Basis of preparation
	The condensed interim financial statements for the half year ended 30 June 2015 have been prepared in accordance with International Accounting Standard (IAS) 34 ‘Interim Financial Reporting’. The condensed interim unaudited financial statements should be read in conjunction with the annual audited financial statements for the year ended 31 December 2014 and condensed interim unaudited financial statements for the period ended 30 June 2014.
3	Significant accounting policies
	The same accounting policies, presentation and methods of computation are followed in these condensed interim financial statements as were applied in the preparation of the Company’s financial statements for the year ended 31 December 2014.
4	Net fair value (loss)/gain on inventories	Period ended	Period ended
		30-Jun-15	30-Jun-14
		EUR	EUR
	Net fair value (loss)/gain on inventories	(13,485,001)	150,345,036
		(13,485,001)	150,345,036
5	Net fair value gain/(loss) on financial liabilities designated at fair value through profit or loss	Period ended	Period ended
		30-Jun-15	30-Jun-14
		EUR	EUR
	Net fair value gain/(loss) on ETC Securities	13,485,001	(150,345,036)
		13,485,001	(150,345,036)
6	Taxation
	The Company is not a regulated financial service company from a Jersey Income Tax perspective. Therefore, the Company is liable to Jersey Income Tax at 0%.
7	Cash and cash equivalents	30-Jun-15	31-Dec-14
		EUR	EUR
	Cash at bank	2	2
		2	2
8	Other receivables	30-Jun-15	31-Dec-14
		EUR	EUR
	Corporate benefit receivable due from Arranger	30,000	30,000
		30,000	30,000
9	Inventories held at fair value	30-Jun-15	31-Dec-14
		EUR	EUR
	Inventories	1,867,892,250	1,655,948,151
	Movement in inventories	30-Jun-15	31-Dec-14
		EUR	EUR
	At beginning of the period/year	1,655,948,151	1,594,872,060
	Additions during the period/year	401,806,649	612,892,882
	Disposals during the period/year	(176,377,549)	(638,736,737)
	Net changes in fair value during the period/year	(13,485,001)	86,919,946
	At end of period/year	1,867,892,250	1,655,948,151
	Series 14 was fully redeemed following a call redemption event on 17 April 2015.

db ETC Plc
							Page 9
Notes to the condensed interim financial statements (continued)
For the half year ended 30 June 2015
10	Financial liabilities designated at fair value through profit or loss
				30-Jun-15		31-Dec-14
				Nominal	Fair value	Nominal	Fair value
				units	Amount	units	Amount
				issued	EUR	issued	EUR
	ETC Securities issued			20,609,000	1,867,892,250	18,624,000	1,655,948,151
	Movement in financial liabilities					30-Jun-15	31-Dec-14
						EUR	EUR
	At beginning of the period/year					1,655,948,151	1,594,872,060
	Issue of financial liabilities during the period/year					401,806,649	612,892,882
	Redemption of financial liabilities during the period/year					(176,377,549)	(638,736,737)
	Net changes in fair value during the period/year					(13,485,001)	86,919,946
	At end of period/year					1,867,892,250	1,655,948,151
	The ETC Securities issued are listed on various exchanges, including London, Switzerland, Milan and Frankfurt. Refer to note 15 for a description of the key risks regarding the issue of these instruments.
	The financial liabilities in issue at 30 June 2015 are as follows:
	Series	Description	CCY	Maturity	30-Jun-15	30-Jun-15	30-Jun-15
					Units	NAV per unit	Fair value
					Outstanding	(CCY)	EUR
	Series 1	db Physical Gold ETC	USD	15-Jun-60	5,280,000	115.38	546,983,777
	Series 2	db Physical Gold Euro Hedged ETC	EUR	15-Jun-60	5,865,000	89.87	527,079,544
	Series 3	db Physical Silver ETC	USD	15-Jun-60	295,000	153.43	40,640,151
	Series 4	db Physical Silver Euro Hedged ETC	EUR	15-Jun-60	570,000	115.70	65,946,681
	Series 5	db Physical Platinum ETC	USD	15-Jun-60	575,000	105.38	54,409,204
	Series 6	db Physical Platinum Euro Hedged ETC	EUR	15-Jun-60	355,000	79.01	28,048,123
	Series 7	db Physical Palladium ETC	USD	15-Jun-60	595,000	66.18	35,358,302
	Series 8	db Physical Palladium Euro Hedged ETC	EUR	15-Jun-60	255,000	48.77	12,437,175
	Series 9	db Physical Gold ETC (EUR)	EUR	15-Jun-60	3,960,000	103.08	408,210,310
	Series 10	db Physical Silver ETC (EUR)	EUR	15-Jun-60	405,000	137.31	55,610,844
	Series 11	db Physical Rhodium ETC	USD	19-May-61	809,000	78.81	57,247,065
	Series 12	db Physical Rhodium ETC (EUR)	EUR	19-May-61	285,000	70.45	20,079,240
	Series 13	db Physical Gold GBP Hedged ETC	GBP	19-May-61	1,335,000	7.07	13,310,984
	Series 16	db Physical Gold CHF Hedged ETC	CHF	05-Dec-62	25,000	105.52	2,530,850
					20,609,000		1,867,892,250
	Series 14 was fully redeemed following a call redemption event on 17 April 2015.

db ETC Plc
							Page 10
Notes to the condensed interim financial statements (continued)
For the half year ended 30 June 2015
10	Financial liabilities designated at fair value through profit or loss (continued)
	The financial liabilities in issue at 31 December 2014 are as follows:
	Series	Description	CCY	Maturity	31-Dec-14	31-Dec-14	31-Dec-14
					Units	NAV per unit	Fair value
					outstanding	(CCY)	EUR
	Series 1	db Physical Gold ETC	USD	15-Jun-60	5,230,000	118.33	511,558,970
	Series 2	db Physical Gold Euro Hedged ETC	EUR	15-Jun-60	4,815,000	92.64	446,047,578
	Series 3	db Physical Silver ETC	USD	15-Jun-60	275,000	156.42	35,556,687
	Series 4	db Physical Silver Euro Hedged ETC	EUR	15-Jun-60	520,000	118.99	61,874,470
	Series 5	db Physical Platinum ETC	USD	15-Jun-60	475,000	118.56	46,549,474
	Series 6	db Physical Platinum Euro Hedged ETC	EUR	15-Jun-60	255,000	89.39	22,794,724
	Series 7	db Physical Palladium ETC	USD	15-Jun-60	775,000	78.19	50,088,773
	Series 8	db Physical Palladium Euro Hedged ETC	EUR	15-Jun-60	380,000	57.93	22,012,327
	Series 9	db Physical Gold ETC (EUR)	EUR	15-Jun-60	2,905,000	97.63	283,603,141
	Series 10	db Physical Silver ETC (EUR)	EUR	15-Jun-60	405,000	128.81	52,166,242
	Series 11	db Physical Rhodium ETC	USD	19-May-61	809,000	118.78	79,430,323
	Series 12	db Physical Rhodium ETC (EUR)	EUR	19-May-61	285,000	97.76	27,862,036
	Series 13	db Physical Gold GBP Hedged ETC	GBP	19-May-61	1,335,000	7.27	12,496,238
	Series 14	db Physical Silver GBP Hedged ETC	GBP	19-May-61	135,000	9.42	1,638,200
	Series 16	db Physical Gold CHF Hedged ETC	CHF	05-Dec-62	25,000	109.03	2,268,968
					18,624,000		1,655,948,151
	Movement in fair values by Series for the half year ended 30 June 2015
	Series	Description	Opening balance	Issuances	Redemptions	Net changes in fair values	Closing
							balance
			01-Jan-15				30-Jun-15
			EUR	EUR	EUR	EUR	EUR
	Series 1	db Physical Gold ETC	511,558,970	83,305,066	(79,288,547)	31,408,288	546,983,777
	Series 2	db Physical Gold Euro Hedged ETC	446,047,578	139,139,311	(37,354,043)	(20,753,302)	527,079,544
	Series 3	db Physical Silver ETC	35,556,687	2,885,104	-	2,198,360	40,640,151
	Series 4	db Physical Silver Euro Hedged ETC	61,874,470	6,640,830	-	(2,568,619)	65,946,681
	Series 5	db Physical Platinum ETC	46,549,474	9,344,883	-	(1,485,153)	54,409,204
	Series 6	db Physical Platinum Euro Hedged ETC	22,794,724	8,535,882	-	(3,282,483)	28,048,123
	Series 7	db Physical Palladium ETC	50,088,773	1,345,216	(13,528,676)	(2,547,011)	35,358,302
	Series 8	db Physical Palladium Euro Hedged ETC	22,012,327	1,461,515	(8,644,117)	(2,392,550)	12,437,175
	Series 9	db Physical Gold ETC (EUR)	283,603,141	149,148,842	(35,814,328)	11,272,655	408,210,310
	Series 10	db Physical Silver ETC (EUR)	52,166,242	-	-	3,444,602	55,610,844
	Series 11	db Physical Rhodium ETC	79,430,323	-	-	(22,183,258)	57,247,065
	Series 12	db Physical Rhodium ETC (EUR)	27,862,036	-	-	(7,782,796)	20,079,240
	Series 13	db Physical Gold GBP Hedged ETC	12,496,238	-	-	814,746	13,310,984
	Series 14	db Physical Silver GBP Hedged ETC	1,638,200	-	(1,747,838)	109,638	-
	Series 16	db Physical Gold CHF Hedged ETC	2,268,968	-	-	261,882	2,530,850
			1,655,948,151	401,806,649	(176,377,549)	(13,485,001)	1,867,892,250

db ETC Plc
							Page 11
Notes to the condensed interim financial statements (continued)
For the half year ended 30 June 2015
10	Financial liabilities designated at fair value through profit or loss (continued)
	Movement in fair values by Series for the year ended 31 December 2014
	Series	Description	Opening balance	Issuances	Redemptions	Net changes in fair values	Closing
							balance
			01-Jan-14				31-Dec-14
			EUR	EUR	EUR	EUR	EUR
	Series 1	db Physical Gold ETC	389,365,984	182,082,495	(108,588,862)	48,699,353	511,558,970
	Series 2	db Physical Gold Euro Hedged ETC	478,194,401	178,340,539	(195,486,736)	(15,000,626)	446,047,578
	Series 3	db Physical Silver ETC	50,962,371	5,890,947	(17,578,531)	(3,718,100)	35,556,687
	Series 4	db Physical Silver Euro Hedged ETC	73,523,322	6,550,991	(3,056,109)	(15,143,734)	61,874,470
	Series 5	db Physical Platinum ETC	56,903,022	49,006,338	(55,876,142)	(3,483,744)	46,549,474
	Series 6	db Physical Platinum Euro Hedged ETC	27,890,652	7,667,922	(9,047,852)	(3,715,998)	22,794,724
	Series 7	db Physical Palladium ETC	50,163,234	27,792,543	(41,172,873)	13,305,869	50,088,773
	Series 8	db Physical Palladium Euro Hedged ETC	10,428,122	21,426,699	(11,576,900)	1,734,406	22,012,327
	Series 9	db Physical Gold ETC (EUR)	293,328,615	94,279,597	(138,312,321)	34,307,250	283,603,141
	Series 10	db Physical Silver ETC (EUR)	76,025,251	16,760,019	(35,677,808)	(4,941,220)	52,166,242
	Series 11	db Physical Rhodium ETC	52,927,625	18,069,618	(16,375,268)	24,808,348	79,430,323
	Series 12	db Physical Rhodium ETC (EUR)	18,881,747	5,025,174	(5,620,485)	9,575,600	27,862,036
	Series 13	db Physical Gold GBP Hedged ETC	12,135,149	-	(366,850)	727,939	12,496,238
	Series 14	db Physical Silver GBP Hedged ETC	1,887,612	-	-	(249,412)	1,638,200
	Series 16	db Physical Gold CHF Hedged ETC	2,254,953	-	-	14,015	2,268,968
			1,594,872,060	612,892,882	(638,736,737)	86,919,946	1,655,948,151
11	Share capital – equity					30-Jun-15	31-Dec-14
	Authorised:					GBP	GBP
	10,000 ordinary shares of GBP 1 each					10,000	10,000
	Issued and fully paid					EUR	EUR
	2 ordinary shares of GBP 1 each					2	2
						2	2
	As at 30 June 2015 and 31 December 2014, the ordinary share capital was held by the following non-beneficial nominees:
						30-Jun-15	31-Dec-14
						GBP	GBP
	Elian Nominees (Jersey) Limited					1	1
	Naile Nominees (Jersey) Limited					1	1
						2	2
	The authorised share capital of the Company is GBP 10,000 out of which 2 ordinary shares have been issued and fully paid. The nominees have no beneficial interest in and derives no benefit from its holding of the shares. There are no other rights that pertain to the shares and the shareholders.

db ETC Plc
			Page 12
Notes to the condensed interim financial statements (continued)
For the half year ended 30 June 2015
12	Capital risk management
	The Company views the share capital as its capital. The Company is a special purpose vehicle set up to issue ETC Securities for the purpose of making investments as defined under the programme memorandum and in each of the Series memorandum agreements. Share capital of GBP 2 was issued in line with Jersey Company Law and is not used for financing the investment activities of the Company. The Company is not subject to any other externally imposed capital requirements.
	The Company can issue further series of ETC Securities to meet the demand of its investors.
13	Related Party Transactions
	Elian Corporate Director 3 Limited (Formerly Ogier Corporate Director (Jersey) 3 Limited) and Elian Corporate Director 4 Limited (Formerly Ogier Corporate Director (Jersey) 4 Limited) act solely in the capacity as directors of Jersey companies, pursuant to the Companies (Jersey) Law 1991, as amended. Elian Corporate Director (Jersey) 3 Limited changed its name from Ogier Corporate Director (Jersey) 3 Limited, and Elian Corporate Director (Jersey) 4 Limited changed its name from Ogier Corporate Director (Jersey) 4 Limited on 26 September 2014. Subsequent to this, Elian Corporate Director (Jersey) 3 Limited was renamed as Elian Corporate Director 3 Limited, and Elian Corporate Director (Jersey) 4 Limited was renamed as Elian Corporate Director 4 Limited with effect from 15 April 2015. Both are part of the Elian group of companies. No fee was charged or paid to the Elian Group during the period under review by the Company for the provision of directors. Most expenses of the Company are borne by the Arranger, Deutsche Bank AG, London Branch, including fees paid to Elian.
	Product fees accrued for the period ended 30 June 2015 due to Deutsche Bank AG, London branch in its capacity as Arranger amounted to EUR 4,273,987 (31 December 2014: EUR 9,565,644).
	Carl McConnell, acting as director for the Company is an employee of Deutsche Bank International Limited. Deutsche International Corporate Services Limited, which acts as administrator to the Company, is a subsidiary of Deutsche Bank International Limited and is part of Deutsche Bank AG, London Branch.
	As at 30 June 2015, corporate benefit fees amounting to EUR 30,000 (31 December 2014: EUR 30,000) were receivable from the Arranger, Deutsche Bank AG, London Branch.
	As at 30 June 2015, the number of ETC Securities held by Deutsche Bank AG, London Branch, as authorised participant was 1,544,356 units (EUR 104,611,491) (31 December 2014: EUR 114,533,726 for 1,688,239 units).
14	Ultimate controlling party
	The directors of the Company consider Elian Corporate Trustee (Jersey) Limited (formerly Ogier Corporate Trustee (Jersey) Limited) as trustee of the db ETC Charitable Trust (the beneficial owner of the issued share capital of the Company) to be the ultimate controlling party of the Company.
15	Financial risk management
	Introduction
	The principal activity of the Company, under the Secured ETC Precious Metal Securities Programme (the “Programme”), is to issue from time to time Series of secured precious metal linked securities (“ETC Securities”), where recourse in respect of each Series is limited to the proceeds of enforcement of the security over each respective Series' assets.
	With respect to each Series (each a "Series") of ETC Securities, the Company’s main assets are its holdings of underlying metal and its interests under the related Balancing Agreement. The obligations of the Company under the ETC Securities of a Series are secured in favour of the Trustee by an assignment by way of security of all the Company’s rights, title, interest and benefit present and future against the Secured Account Custodian, the Subscription Account Custodian and any Sub-Custodian relating to the underlying metal in respect of this Series of ETC Securities.
	Risk management framework
	The Company, and ultimately the holders of the ETC securities, have exposure to the following risks from its use of financial instruments:
	---	Operational risk;
	---	Credit risk;
	---	Market risk; and
	---	Liquidity and cash flow risk.
	This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk.

db ETC Plc
								Page 13
Notes to the condensed interim financial statements (continued)
For the half year ended 30 June 2015
15	Financial risk management (continued)
	Operational risk
	Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company’s processes and infrastructure, and from external factors other than credit, markets and liquidity issues such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour.
	Operational risks arise from all of the Company’s operations. The Company was incorporated with the purpose of engaging in those activities outlined in note 1. All management and administration functions are outsourced to Deutsche International Corporate Services Limited. Deutsche Bank AG, London Branch acts as the Company’s authorised participant, arranger, issuing and paying agent.
	Credit risk
	Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company’s principal financial assets are cash and cash equivalents, other receivables and inventories which represents the Company's maximum exposure to credit risk. All credit risk are ultimately borne by the ETC Securities holders.
	Market risk
	Market risk comprises three types of risk: interest rate risk, currency risk and other price risk as described below.
	(i)	Interest rate risk
		Interest rate risk is the risk that the fair value or future cash flows of financials instruments will fluctuate as a result of a change in interest rates. The ETC Securities do not bear interest. As such, the Company and ETC Securities holders have limited exposure to interest rate risk.
	(ii)	Currency risk
		Currency risk is the risk which arises where the assets and liabilities of the Company that are denominated in currencies other than its functional currency, those assets and liabilities being denominated in US Dollars (USD), Pound Sterling (GBP) and Swiss Franc (CHF).
		The Company is not exposed to net currency risk since the foreign exchange movements in its financial liabilities will be offset by the foreign exchange movements in its inventories. Any net foreign currency risk is borne by the ETC security holders.
		The following significant exchange rates have been applied at the following period ends:
			Average rate - year ended			Closing rate
			30-Jun-15	31-Dec-14	30-Jun-14	30-Jun-15	31-Dec-14	30-Jun-14
		USD-EUR	0.8523	0.7772	0.7496	0.8979	0.8266	0.7305
		GBP- EUR	1.3287	1.2461	1.2093	1.4103	1.2876	1.2493
		CHF-EUR	0.9479	0.8236	0.8186	0.9594	0.8324	0.8235
	(iii)	Price risk
		Price risk is the risk that changes in market prices of metals will affect the Company’s income, expense, inventories and financial liabilities designated at fair value through profit or loss. The Company’s liabilities are exposed to the market prices of the metals. However, the risk is mitigated by holding the relevant quantities of inventory for each Series of ETC Securities issued. The ETC Security holders are exposed to the market price risk of their metal entitlement under the ETC Securities.
		Any changes in the metal spot prices on the inventories held by the Company would not have any net effect on the equity or Condensed statement of comprehensive income of the Company since changes in the fair value of inventories would be offset by corresponding changes in the fair value of the ETC Securities and as such any price risk is ultimately borne by the ETC Security holders.
	Liquidity and cash flow risk
	Liquidity risk is the risk that the Company will not be able to meet its obligations as they fall due. The Company limits its exposure to liquidity risk through the purchase of inventory. All liquidity risk associated with the inventories are ultimately borne by the ETC Securities holders.

db ETC Plc
		Page 14
Notes to the condensed interim financial statements (continued)
For the half year ended 30 June 2015
15	Financial risk management (continued)
	Fair values
	The Company’s inventories and financial liabilities designated at fair value through profit or loss are carried at fair value in the condensed statement of financial position.
	The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.
	• Level 1: Quoted prices (unadjusted) in active market for an identical instrument.
	• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
	• Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
	The objective of valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date that would have been determined by market participants acting at arm’s length.
	The Company does not have any financial instruments at Level 1 or 3 and there has not been any transfer between Levels during the half year ended 30 June 2015.
16	Operating expenses
	All costs associated with the Company are paid by Deutsche Bank AG London Branch, the Arranger.
17	Subsequent events
	There has been no significant events that require disclosure to the condensed interim financial statement since the period end and up to the date of approving the interim report.
18	Comparatives
	In line with IAS 34, the comparative information for the Condensed statement of comprehensive income, Condensed statement of cash flows and Condensed statement of changes in equity are for the period ended 30 June 2014 and the comparative information for the Statement of financial position is as at 31 December 2014.
19	Approval of financial statements
	The board of directors approved these condensed interim financial statements on .........................................2015
This announcement has been issued through the Companies Announcement Service of
The London Stock Exchange.

Category Code: IR

Sequence Number: 482278

Time of Receipt (offset from UTC): 20150901T115507+0100