Gold Bullion Securities Limited
Registered No: 87322
Annual Report and Audited Financial Statements for the
Year ended 31 December 2024
Gold Bullion Securities Limited
www.wisdomtree.eu
Contents
Management and Administration 1
Directors' Report 2 - 8
Statement of Directors' Responsibilities 9
Independent Auditor's Report 10 - 16
Statement of Profit or Loss and Other Comprehensive Income 17
Statement of Financial Position 18
Statement of Changes in Equity 19
Statement of Cash Flows 20
Notes to the Financial Statements 21 - 39
Gold Bullion Securities Limited
Management and Administration
Registered Office
(As from 14 June 2024)
IFC 5
St Helier
Jersey, JE1 1ST
(Up to 14 June 2024)
WisdomTree Management Jersey Limited
Ordnance House
31 Pier Road
St Helier
Jersey, JE4 8PW
(Up to 14 June 2024)
Ordnance House
31 Pier Road
St Helier
Jersey, JE4 8PW
Administrator
(As from 14 June 2024)
Apex Financial Services (Alternative Funds) Limited
IFC 5
St Helier
Jersey, JE1 1ST
Registrar
Computershare Investor Services (Jersey) Limited
13 Castle Street
St Helier
Jersey, JE1 1ES
(Up to 14 June 2024)
R&H Fund Services (Jersey) Limited
Ordnance House
PO Box 83
31 Pier Road
St Helier
Jersey, JE4 8PW
Custodian
HSBC Bank plc
8 Canada Square
London, E14 5HQ
United Kingdom
Company Secretary
(As from 14 June 2024)
Apex Financial Services (Secretaries) Limited
IFC 5
St Helier
Jersey, JE1 1ST
Trustee
The Law Debenture Trust Corporation plc
8th Floor
100 Bishopsgate
London, EC2N 4AG
United Kingdom
(Up to 14 June 2024)
R&H Fund Services (Jersey) Limited
Ordnance House
31 Pier Road
St Helier
Jersey, JE4 8PW
Jersey Legal Advisers
Mourant Ozannes (Jersey) LLP
22 Grenville Street
St Helier
Jersey, JE4 8PX
- 1 - www.wisdomtree.eu
Manager
(As from 14 June 2024)
WisdomTree Management Jersey Limited
IFC 5
St Helier
Jersey, JE1 1ST
Directors
Vinod Rajput (Appointed on 09 August 2024)
Olivia Vuillemin (Appointed on 14 June 2024)
Peter Ziemba
Bryan Governey
David Middleton (Appointed on 14 June 2024
and Resigned on 09 August 2024)
Christopher Foulds (Resigned on 14 June 2024)
Steven Ross (Resigned on 14 June 2024)
Auditor
Ernst
&
Young
LLP
Royal Chambers
St Julian's Avenue
St
Peter Port
Guernsey
GY1 4AF
- 2 - www.wisdomtree.eu
Directors’ Report
The directors of Gold Bullion Securities Limited (“GBS” or the “Company”) submit herewith the annual report and financial statements of the
Company for the year ended 31 December 2024.
Directors
The directors of the Company during and since the end of the financial year are:
Vinod Rajput (Appointed on 09 August 2024)
Olivia Vuillemin (Appointed on 14 June 2024)
Peter Ziemba
Bryan Governey
David Middleton (Appointed on 14 June 2024 and Resigned on 09 August 2024)
Christopher Foulds (Resigned on 14 June 2024)
Steven Ross (Resigned on 14 June 2024)
The Company earns a management fee by reducing the Gold Entitlement on a daily basis by an agreed amount (the “Gold Sales Charge” or
“Management Fee”) as set out below.
The Company has entered into a service agreement with WisdomTree Management 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 Gold Securities. In return for these services, the
Company has an obligation to remunerate ManJer with an amount equal to the Management Fee and the creation and redemption fees earned
(the “ManJer Fee”). The Gold Bullion in respect of the Management Fee is transferred in the form of Gold Bullion on a monthly basis (in
arrears) following agreement with the Trustee from the Company’s custodian accounts directly to ManJer. In addition, creation and
redemption fees are transferred directly to ManJer and there are no cash flows through the Company.
Gold
Bullion
Securities
Limited
Directors’
Interests
No
director
has
an
interest in
the
Shares
of
the
Company as
at the
date
of
this
report.
Principal
Activities
The
Company’s
principal
activity
is
the
issue
and
listing
of
Gold
Bullion
securities
(“Gold
Securities”).
These
Gold
Securities allow
investors
to gain exposure to gold without needing to take physical delivery of Gold Bullion (“Gold Bullion”).
It also allows investors to buy and
sell
that
interest
through
the
trading
of
a
security
on
the
London
Stock
Exchange
and
any
other
exchange
to
which
that
security
may
be
admitted
to
trading from time to time.
A Gold Security
is
a
secured,
undated
zero
coupon
note
of
the
Company,
constituted
by
a
trust
instrument,
with
a
face
value
of
USD 0.00001.
Under the terms of this trust instrument the Gold Securities are secured on an amount of Gold Bullion equivalent to the entitlement of each
Gold Security (referred
to as
the “Gold Entitlement”), which
is calculated
in
accordance with an agreed
formula published
in
the Prospectus.
This Gold Bullion
is held in
custody by designated custodians or their
sub-custodians and
is the subject of
a first legal mortgage in favour of
the Trustee.
Gold Bullion, once deposited, may only be removed after approval from the
Trustee.
Generally
only
security
holders
who
have
entered
into
an
approved
applicant
agreement
with
the
Company
(“Approved
Applicant”)
can
submit applications and redemptions directly with the Company.
A
holder
of
a
Gold
Security
is
entitled
to
require
the
redemption
of
that
Gold
Security
and
receive
an
amount
of
Gold
Bullion
equal
to
the
Gold
Entitlement on the date of redemption (and subject to applicable redemption fees).
This redemption may occur:
•
through
an
appropriate
counterparty
(such
as
an
Approved
Applicant
as
described above);
or
•
through
a
transfer
of
physical
Gold
Bullion
to
the
security
holders’
own
allocated bullion
account.
Gold Bullion Securities Limited
Directors’ Report (Continued)
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Gold Bullion
The Company’s exposure to risk is disclosed in note 15 to the financial statements.
The Company is entitled to:
•
A Management Fee (at a rate of 0.40% per annum) which reduces the Gold Entitlement of the Gold Securities on a daily basis; and
•
Creation and redemption fees on the issue and redemption of the Gold Securities.
During the year, the Company generated income from Management Fees and Creation and Redemption fees as follows:
2024
2023
USD
USD
Management Fees
11,648,912
12,096,401
Creation and Redemption Fees
10,250
16,750
Total Fee Income
The change in Gold Entitlement of the Gold Securities reduces the value of the Gold Securities. This reduction equates to the Management
Fee amount in Gold Bullion, that is recognised for that day per Gold Security in issue on that day. The Management Fees are accrued and
recognised on a daily basis until invoiced and settled by transfer of the Gold Bullion. The amount recognised as income is calculated by
applying the average LBMA Price to the total Management Fee accrued on a monthly basis.
2024
2023
Troy Ounces
USD
Troy Ounces
USD
1,128,224.103
2,945,623,898
1,331,439.125
2,745,960,081
2,945,623,898
2,745,960,081
11,659,162
12,113,151
Review
of
Operations
The
most
recent
Prospectus
was
issued
on
15
July
2024.
The
Gold
Securities
are
listed
on
the
London
Stock
Exchange,
the
Deutsche
Börse,
the Borsa Italiana and the NYSE Euronext Paris.
The
Company holds Gold
Bullion
to
support
the
Gold Securities as
determined by
the
Gold
Entitlement.
Gold
Bullion
is marked
to
fair
value
using
the
latest
price
published
by
the
London
Bullion
Market
Association
(“LBMA”).
The
Company
has
entered
into
contractual
obligations
to issue and redeem Gold Securities in exchange for Gold Bullion as determined by the Gold Entitlement on each trading day.
The Gold
Bullion
in
respect of each creation and redemption
is recorded
using
the
price published
by
the
LBMA on
the
transaction date.
The fair value
of the Gold Bullion as at 31 December 2024 amounted to:
The Company has a loan facility with HSBC Bank USA, N.A. giving the Company the rights, interest and title to a gold bar that
is used to
ensure all Gold Bullion Securities are supported by holdings of gold in allocated form.
IFRS 13 requires the Company to identify the principal market for the Gold Securities and to utilise the available price within that principal
market.
The
directors
consider
the
stock
exchanges
where
the
Gold
Securities
are
listed
to
be
the
principal
market
and
as
a
result
the
fair
value
of
the
Gold
Securities
is
the
on-exchange
price
as
quoted
on
the
stock
exchange
demonstrating
active
trading
with
the
highest
trading
volume
on each day that the price is obtained.
As a result of the difference in valuation between Gold Bullion and Gold Securities there is a
mis-
match between the values recognised, and the results of the Company reflect a gain or loss on the difference between the value of the Gold
Bullion
(through
the
application
of
the
price
published
by
the
LBMA
against
the
Gold
Entitlement
referred
to
within
these
financial
statements
as the “Contractual Value”) and the price of Gold Securities.
The
gain
or
loss
on
Gold
Securities
and
Gold
Bullion
is
recognised
through
profit
or
loss
in
line
with
the
Company’s
accounting
policy.
This
is presented in more detail in notes 8 and 9 to these financial statements.
Gold Bullion Securities Limited
Directors’ Report (Continued)
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Review of Operations (continued)
Non-GAAP Performance Measures
Under the terms of the service agreement with ManJer, the Company accrued expenses equal to the management fees and the creation and
redemptions fees, which, after taking into account other operating income and expenses, resulted in a result before fair value movements for
the year of USD Nil (2023: USD Nil).
As the difference in the valuation of Gold Bullion (held to support the Gold Securities) and Gold Securities would be reversed on a subsequent
redemption of the Gold Securities and transfer of the corresponding Gold Bullion (as decsribed further in note 9), the Company presents an
adjusted Statement of Profit or Loss and Total Comprehensive Income and an adjusted Statement of Changes in Equity in note 18 of the
financial statements.
Future Developments
The Board members are not aware of any 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.
Directors’ Remuneration
No director has a service contract with the Company. The directors of the Company who are employees within the WisdomTree, Inc. group do
not receive separate remuneration in their capacity as directors of the Company. The directors of the Company who are employees of Apex
Financial Services (Secretaries) Limited ("Apex" or the "Administrator") and R&H Fund Services (Jersey) Limited do not receive separate
remuneration in their capacity as directors of the Company, however Apex receives a fee from ManJer which includes services in respect of
the Company, including for the provision of directors who are employees of Apex.
Gold Bullion Securities Limited
Directors’ Report (Continued)
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Dividends
There were no dividends declared or paid in the year (2023: 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.
Corporate Social Responsibility
Sustainability and corporate responsibility are embedded throughout the business of the WisdomTree, Inc and its subsidiaries (the
"WisdomTree group") as it is believed this benefits shareholders and employees of the WisdomTree group, investors in WisdomTree's
products as well as wider society.
Environmental, Social and Governance (“ESG”) investing is guided at the WisdomTree group level by an ESG Steering Committee, which
includes senior leaders from across the WisdomTree group business, and which includes several sub-committees focused on particular ESG
considerations, such as improving data and transparency into the ESG attributes of WisdomTree’s products. Particular ESG considerations
relevant to the Company’s products are overseen by the directors, leveraging the work undertaken by the ESG Steering Committee. More
information on WisdomTree’s corporate social responsibility strategy can be found on the WisdomTree group website
(https://www.wisdomtree.eu/en-gb/wisdomtree-corporate-responsibility).
The Board acknowledges that climate change and its impact on the global economy is of increasing interest and focus for stakeholders and
that, where relevant, stakeholders will seek information from companies regarding how climate change is expected to impact the operations of
the business and how climate change risk has been considered in the context of reported results.
In acknowledging the above, the Board has considered the Company’s exposure to climate change and determined that due to the nature of the
Company and its operations there are no directly observed impacts of climate change on the business. As a result, the Board concluded that
there is no basis on which to provide extended information of analysis relating to climate change, including as part of the basis of accounting
or individual accounting policies adopted by the Company.
Going
Concern
The
directors
continue
to
monitor
and
assess
the
impact
of
geopolitical
conflicts
on
the
assets
under
management
of
the
Company
and
will
take
any potential actions needed or as required under the terms of the prospectus, as facts and circumstances are subject to change and may be
specific
to
investments
and
jurisdictions.
The
nature
of
the
Company’s
business
dictates
that
the
outstanding
Gold
Securities
may
be
redeemed
at
any
time
by
Authorised
Participants
and
in
certain
circumstances
by
individual
holders
and
also,
in
certain
circumstances,
may
be
compulsorily redeemed by
the Company.
As
the redemption
of Gold Securities
will always coincide with
the
transfer of an equal
amount
(contractual
value) of Gold Bullion, liquidity risk is mitigated such that there is no material residual risk.
All other expenses of the
Company are met by
ManJer.
The
directors
closely
monitor
the
financial
position
and
performance
of
ManJer,
its
assets
under
management,
and
therefore
its
related
revenue
streams, in respect of fulfilling the obligations under the services agreement.
The net reported position on statement of financial position,
including
in
instances
where
a
deficit
is
reported,
is
not
considered
to
impact
the
going
concern
position
of
the
Company
as
this
position
results
solely
due
to
the
unrealised
gains
or
losses
on
Gold
Bullion
and
Gold
Securities
due
to
the
accounting
measurement
basis
applied
in
accordance
with IFRS.
As Gold Bullion is held
to support Gold Securities, any deficit or surplus reported on unrealised positions would be
reversed
on
a subsequent redemption of
the
Gold
Securities
and
the
related
transferred
of Gold
Bullion.
A reported
deficit
is
not considered
indicative
of
any
issues
relating
to
solvency
of
the
Company
and
the
directors
are
satisfied
that
any
obligations
arising
in
respect
of
the
Gold
Securities
can
be managed in accordance with the
terms of the applicable Prospectus. The
directors consider
the operations of the Company
to
be ongoing,
with
a
reasonable
expectation
that
the
Company
has
adequate
resources
to
continue
in
operational
existence
until
30
April
2026,
and
accordingly these financial statements have been prepared on the going concern basis.
Gold Bullion Securities Limited
Directors’ Report (Continued)
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Corporate Social Responsibility (continued)
In the above determination, the Board has concluded specifically that climate change, including physical and transition risks, does not have a
material impact on the recognition and separate measurement considerations of the assets and liabilities in these financial statements as at 31
December 2024.
This conclusion is based on the fact that assets are reported at fair value under International Financial Reporting Standards, and as set out in
note 15 are categorised as level 2 of the fair value hierarchy due to the use of observable, verifiable inputs and third party information sources.
The liabilities are valued utilising listed market prices at the reporting date. These observable inputs and market prices will reflect wider
market sentiment, which inherently includes market perspectives relating to the impact of climate change.
The Board recognises that government and societal responses to climate change risks are still developing and the future impact cannot be
predicted. Future valuations of assets and liabilities may therefore differ as the market responds to these changing impacts or assesses the
impact of current requirements differently.
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.
Auditor
The Independent Auditor is Ernst & Young LLP. A resolution to re-appoint Ernst & Young LLP will be proposed at the next Board meeting of
the director on behalf of the sole shareholder.
Principal Risks and Uncertainties
The Gold Securities provide investors with exposure to gold. Each Gold Security is a debt instrument whose redemption price is linked to the
value of the underlying Gold Bullion. The Gold Securities are issued under a limited recourse arrangement whereby the holders have recourse
only to the Gold Bullion held to support the Gold Securities and not to the Company.
Any movements in the value of the Gold Bullion are wholly attributable to the holders of the Gold Securities, therefore the Company has no
residual exposure to movements in the value of the Gold Bullion. From a commercial perspective the Company does not retain any net gains
or losses or net risk exposures, as (with the exception of the impact of management fees) the gains or losses on the liability represented by the
Gold Securities are matched economically by corresponding losses or gains attributable to the Gold Bullion (see detail on page 3 regarding the
accounting mis-match).
Furthermore, the Company has an obligation to remunerate ManJer with the ManJer Fee, which results in the Company recognising a result
before fair value movements of nil at each reporting date. As a result, the principal risks and uncertainties to which the Company is exposed
has not materially changed during the year ended 31 December 2024.
Gold Bullion Securities Limited
Directors’ Report (Continued)
- 7 - www.wisdomtree.eu
The fair value of the Gold Securities as at 31 December amounted to:
2024
2023
Number
USD
Number
USD
Gold Securities
LBMA Price USD
Movement
2024
2023
%
Future Outlook
12,278,039
2,945,440,166
14,431,538
2,752,599,400
Principal
Risks and
Uncertainties
(continued)
There is an inherent risk from the point of view of investors as the value of gold, and thus the value of the Gold Securities, may vary widely
due
to, amongst other
things, changing supply and
demand
for
gold, government and monetary policy or
intervention, interest rate
levels and
global or regional political, economic or financial events.
The market price of Gold Securities is (and will remain) a function of supply and
demand amongst investors wishing to buy and sell Gold Securities and the bid or offer spread that the market makers are willing to quote.
Movements
in
the
value
of
the
underlying
Gold
Bullion,
and
thus
the
value
of
the
Gold
Securities,
may
vary
widely
which
could
have
an
impact on the demand for the Gold Securities issued by the Company.
These movements are shown in notes 8 and 9.
We
believe
that
geopolitical
risks
remain
high,
with
various
ceasefires
and
peace
talks
remaining
very
fragile.
The
erosion
of
military
and
strategic
bonds
between
U.S.
and
Europe
is
a
source
of
concern
that
could
continue
to
support
gold
prices.
Additional
information
on
other
financial
and
operational
risks
and
uncertainties
faced
by
the
Company,
including
further
details
surrounding
the value of Gold Bullion and Gold Securities are disclosed in note 15 of these financial statements.
2,945,440,166
2,752,599,400
Further
information
on
the
contractual
value
of
the
Gold
Bullion
on
a
daily
basis
can
be
found
on
the
WisdomTree
website
(https://www.wisdomtree.eu/en-gb/products).
Movements
in
the
value
of
the
underlying
Gold
Bullion
may
vary
widely
which could
have
an
impact
on
the
demand
for
the
Gold
Bullion
issued by the Company.
The movement in the price of the Gold Bullion as at 31 December are:
Gold
Bullion
2,610.85
2,062.40
26.59%
Additional
information
on
other
financial
and
operational
risks
and
uncertainties
faced
by
the
Company,
including
further
details
surrounding
the value of Gold Securities and the Gold Bullion are disclosed in note 15 of these financial statements.
2024
Review
On
30
October
2024,
gold
reached,
what
was
at
the
time, an
all-time
high
of
$2,777.80/oz
(a
35%
year-to-date
gain).
The
metal
had
seemed
to
defy bond and dollar headwinds. However, shortly after gold fell. The main trigger appeared to be the US presidential election which saw
President
Trump
return
for
a
second
term.
Markets
interpreted
the
news
as
growth
positive,
diminishing
the
need
for
gold
as
a
financial/economic hedge. From that peak to the end of 2024, gold prices fell 6% (leaving gold up 27% for the year). However,
in March
2025, gold has surpassed the October 2024 peak by a considerable margin, to $3,083/oz (28 March 2025, up 17% year to date). Gold has
gained on the back of a trade
war that has broken out after President Trump raised tariffs on several countries (and been met with retaliatory
measures). His withdrawal of military
support for
Europe has also led gold prices rising as the defensive asset has gained allure. Also, all the
U.S.
Dollar
appreciation
since
the election
has
been
wiped
out, removing
one
of
the
headwinds
on
the
metal.
Gold Bullion Securities Limited
Directors’ Report (Continued)
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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 have determined that the Company is not required to apply, and has elected not 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 corporate governance
framework implemented and constitution of the Board is such that it is considered unnecessary to identify a senior non-executive director.
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 Gold Securities, has not undertaken any business, save for issuing and
redeeming Gold Securities, entering into the required documents, 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 Gold 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 outsources the administration services in respect of
the Company to the Administrator. 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 related party companies issuing exchange-traded
products.
The Board, having reviewed the effectiveness of the internal control systems of the Manager and the Administrator, does not
consider that there is a need for the Company to establish its own internal audit function.
Vinod Rajput
Director
Jersey
Date: 28 April 2025
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 auditor.
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.
Gold Bullion Securities Limited
- 9 - www.wisdomtree.eu
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:
•
•
•
•
•
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 Directive 2004/109/EC, amended by Directive 2013/50/EU (collectively the Transparency Directive), the Central
Bank (Investment Market Conduct) Rules of the Central Bank of Ireland and the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority, the directors confirm that to the best of their knowledge that:
•
the financial statements for the year ended 31 December 2024 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 and performance of the Company’s business, including financial
position and the important events that have occurred during the year, and their impact on these financial statements, together with a
description of the principal risks and uncertainties they face.
By order of the Board
Vinod Rajput
Director
Jersey
Date: 28 April 2025
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.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GOLD BULLION SECURITIES LIMITED
- 10 -
Opinion
We have audited the financial statements of Gold Bullion Securities Limited (the “company”) for the year
ended 31 December 2024 which comprise the Statement of Profit or Loss and Other Comprehensive
Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of
Cash Flows and the related notes 1 to 18, including material accounting policy information. The
financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards as issued by the International Accounting Standards Board
(“IFRS”).
In our opinion, the financial statements:
► give a true and fair view of the state of the company’s affairs as at 31 December 2024 and of its
profit for the year then ended;
► have been properly prepared in accordance with IFRS;
► 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 under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
company in accordance with the ethical requirements that are relevant to our audit of the financial
statements, including the UK FRC’s Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the company’s ability to continue to adopt the going concern basis of
accounting included:
► We obtained an understanding of management’s rationale for using the going concern basis of
accounting and confirmed our understanding of management’s Going Concern assessment process
including the process they adopted to capture all key factors in their assessment;
► We obtained management’s board approved going concern assessment covering the period of
assessment from the date of signing to 30 April 2026. Management’s assessment has focused on
a combination of;
► Assessing the ongoing viability of the company through continued involvement of its Custodian
and Authorised Participants;
► Assessing the ongoing ability of WisdomTree Management Jersey Limited (“ManJer”) to
continue to meet its obligations as manager and pay all expenses of the company. This
includes consideration of the assets under management of all managed issuer entities (“Issuer
Platform”) which includes this company. In assessing this ability management considered the
fixed and variable operating costs that could be supported under varying levels of total assets
under management for the Issuer Platform.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GOLD BULLION SECURITIES LIMITED (continued)
- 11 -
► Using our understanding of the business, we evaluated whether the considerations and method
adopted by management in assessing going concern was appropriate.
► We performed reverse stress testing on the forecasts to understand how severe the downside
scenarios would have to be, and the reduction in platform assets under management, to result in
the platform generating insufficient management fees to cover operating costs. We observed
significant headroom in management fee income, at current Assets Under Management (“AUM”)
levels, in excess of fixed and AUM based costs which supports management’s assumption that the
Issuer Platform is able to absorb heightened levels of volatility in AUM.
► We considered whether management’s disclosures, in the Annual Report and financial statements,
sufficiently and appropriately discloses information required in respect of the going concern
assumption applied through consideration of relevant disclosure standards.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the company’s ability
to continue as a going concern for a period to 30 April 2026.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report. However, because not all future events or conditions can be
predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.
Overview of our audit approach
Key audit
matters
► Valuation of Financial Liabilities at fair value through profit and loss – Gold
Securities
Materiality ► Overall materiality of US$29.5m which represents 1% of total assets.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality
determine our audit scope for the company. This enables us to form an opinion on the financial
statements. We take into account size, risk profile, the organisation of the company and effectiveness of
controls, changes in the business environment and the potential impact of climate change when
assessing the level of work to be performed. All audit work was performed directly by the audit
engagement team.
Changes from the prior year There were no scoping changes compared to the prior year.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies.
The company has determined that there are no directly observed impacts of climate change on the
business due to the nature of the company and its operations. This is explained on page 5 in the
corporate social responsibility section, which form part of the “Other information,” rather than the
audited financial statements. Our procedures on these disclosures therefore consisted solely of
considering whether they are materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appear to be materially misstated.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GOLD BULLION SECURITIES LIMITED (continued)
- 12 -
Our audit effort in considering climate change was focused on evaluating management’s assessment of
the impact of climate risk, physical and transition, the adequacy of the company’s disclosures in the
financial statements as set out in note 2 and conclusion that there was no further impact of climate
change to be taken into account as the material assets and liabilities are valued based on market
pricing as required by IFRS.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) that we identified. These matters included
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 our opinion thereon, and we do not provide a
separate opinion on these matters.
Risk Our response to the risk
Key observations
communicated to the Board
Valuation of Financial
Liabilities at fair value through
profit or loss – Gold Securities
USD 2,945,440,166
(2023: USD 2,752,599,400)
Refer to the Accounting policies
(page 24); and Note 9 of the
Financial Statements (pages 29-
30)
Risk that values of securities in
issue are misstated or that
valuations are incorrectly
captured.
The Gold Securities in issue
comprise a financial instrument
that provide holders of issued
securities with exposure to
movements in prices of Gold
without needing to take physical
delivery.
The Gold Securities are carried
at fair value as a Financial
Liability.
The risk comprises the risk of
errors in both the valuation
methodology applied and, in the
source, and timing of valuation
inputs utilised.
Our response to the risk
comprised:
We walked through the
company’s systems, controls
and process implemented in
respect of the valuation of Gold
Securities.
We assessed the design of the
company’s systems and controls
implemented in respect of Gold
Securities valuation.
In executing our strategy, we
adopted a fully substantive
approach.
We assessed the
appropriateness of the valuation
methodology applied,
comprising the use of traded
security prices to value the Gold
Securities, against relevant
IFRS requirements.
We independently obtained
security prices using external
pricing sources at the balance
sheet date.
There were no matters identified
during our audit work on
valuation of Gold Securities that
we brought to the attention of
the Board of Directors of the
company.
Based on our testing we are
satisfied that the valuation of
Gold Securities is not materially
misstated.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GOLD BULLION SECURITIES LIMITED (continued)
- 13 -
Risk Our response to the risk Key observations
communicated to the Board
The balance of Gold Securities
represents in excess of 99% of
the company’s total liabilities as
at 31 December 2024 (2023:
99%) and therefore any error in
valuation approach could be
significant.
The risk has remained
consistent with that observed in
the prior year.
We recalculated the value of
Gold Securities held at
31 December 2024, by
multiplying the security price by
the confirmed security balance
in issue. This represented 100%
of the total value of Gold
Securities in issue.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of
identified misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably
be expected to influence the economic decisions of the users of the financial statements. Materiality
provides a basis for determining the nature and extent of our audit procedures.
We determined materiality for the company to be US$29.5 million (2023: US$27.5 million), which is 1%
(2023: 1%) of Total Assets. We believe that Total Assets provides us with an appropriate basis for audit
materiality as Total Assets reflects the relevant exposure of holders of issued securities to the
underlying asset base.
There has been no change in the basis of materiality used compared to the prior year.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce
to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the company’s overall control
environment, our judgement was that performance materiality was 50% (2023: 50%) of our planning
materiality, namely US$14.8m (2023: US$13.8m). We have set performance materiality in both periods
at this percentage in response to the value of errors identified and corrected in the financial statement
close process.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Board that we would report to them all uncorrected audit differences in excess of
US$1.5m (2023: US$1.4m), which is set at 5% of materiality, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality
discussed above and in light of other relevant qualitative considerations in forming our opinion.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GOLD BULLION SECURITIES LIMITED (continued)
- 14 -
Other information
The other information comprises the information included in the annual report set out on pages 1 to 9 ,
other than the financial statements and our auditor’s report thereon. The directors are responsible for
the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of the other information, we are required
to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which 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, or proper returns adequate for our
audit have not been received from branches not visited by us; or
► the financial statements are not in agreement with the company’s accounting records and returns;
or
► we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 9, the directors
are responsible for the preparation of the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the directors are responsible for 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 the directors either intend to liquidate the company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
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 an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a 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 the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GOLD BULLION SECURITIES LIMITED (continued)
- 15 -
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The
risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those
charged with governance of the company and management.
► We obtained an understanding of the legal and regulatory frameworks that are applicable to the
company and determined that the most significant are those that relate to the reporting framework,
comprising IFRS and the Companies (Jersey) Law 1991. In addition, we concluded that there are
certain significant laws and regulations that may have an effect on the presentation and disclosure
of the financial statements being the applicable Listing Rules of the Central Bank of Ireland
(Investment Market Conduct) and UK Listing Authority Rules;
► We understood how Gold Bullion Securities Limited is complying with those frameworks by making
enquiries of the directors and key management of the administrative service provider. We
corroborated our enquiries through our review of minutes of Board meetings, papers provided to the
board and correspondence received from regulatory bodies and noted no contradictory evidence;
► We assessed the susceptibility of the company’s financial statements to material misstatement,
including how fraud might occur by understanding the investment objectives of the Company and
discussing with management to understand where reporting was considered susceptible to fraud.
Where this risk was considered to be higher, we performed audit procedures in response to the
identified fraud risk. These procedures included testing of transactions to supporting
documentation, testing of specific accounting journal entries, and focussed testing, including that
referred to in the key audit matters section above. These procedures were designed to provide
reasonable assurance that the financial statements were free from fraud or error;
► Based on this understanding we designed our audit procedures to identify non-compliance with
such laws and regulations. Our procedures involved reading board minutes to identify any non-
compliance with laws and regulations, a review of any associated reporting submitted to the board
on compliance with laws and regulations and enquiries of members of management of the
appointed administrative service provider;
► As the Company operates in the asset management industry the Audit Partner assessed the
experience of the engagement team and concluded that the team had the appropriate competence
and capabilities.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matters we are required to address
► Following the recommendation from those charged with governance, we were appointed by the
company on 3 December 2019 to audit the financial statements for the year ending 31 December
2019 and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments is 6
years, covering the years ending 31 December 2019 to 31 December 2024.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GOLD BULLION SECURITIES LIMITED (continued)
- 16 -
► The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the company
and we remain independent of the company in conducting the audit. The audit opinion is
consistent with the additional report to those charged with governance.
Use of our report
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.
Ove Toennes Svejstrup
for and on behalf of Ernst & Young LLP
Guernsey, Channel Islands
Date: 28 April 2025
Gold Bullion Securities Limited
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2024
Year ended
Year ended
31 December
31 December
2024
2023
Notes
USD
USD
Income
Expenses
Result Before Fair Value Movements
Change in Fair Value of Gold Bullion
Change in Fair Value of Gold Securities
Profit for the Year
1,
2
Note: The Directors consider the Company's activities as continuing.
1 A non-statutory and non-GAAP Statement of Profit or Loss and Other Comprehensive Income reflecting adjustments representing the movement in the
difference between the value of Gold Bullion and the price of Gold Securities is set out in note 18.
2
There are no items of Other Comprehensive Income, therefore the Profit/(Loss) for the Year also represents the Total Comprehensive Income for the Year.
The notes on pages 21 to 39 form part of these financial statements
- 17 - www.wisdomtree.eu
3
11,659,162
12,113,151
3
(11,659,162)
(12,113,151)
-
-
8
680,398,995
426,319,646
9
(673,575,944)
(414,694,331)
6,823,051
11,625,315
Gold Bullion Securities Limited
Gold Bullion
Gold Swing Bar
Gold Bullion Held in Respect of Securities Awaiting Settlement
Gold Bullion Held in Respect of Management Fees
Trade and Other Receivables
8
2,945,623,898
2,745,960,081
5
1,122,666
886,832
8
-
665,947
6
1,003,428
936,818
7
145,570
154,820
Statement of Financial Position
For the year ended 31 December 2024
As at
As at
31 December
31 December
2024
2023
Notes
USD
USD
Assets
Total Assets
Liabilities
Total Liabilities
Equity
Total Equity
Total Equity and Liabilities
Vinod Rajput
Director
The notes on pages 21 to 39 form part of these financial statements
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Gold Securities
Gold Loan
Amounts Payable on Gold Securities Awaiting Settlement
Trade and Other Payables
9
2,945,440,166
2,752,599,400
11
1,122,666
886,832
8
-
665,947
10
1,007,178
949,818
Capital
Share Premium
Revaluation Reserve
12
142
142
13
141,678
141,678
18
183,732
(6,639,319)
2,947,895,562
2,748,604,498
2,947,570,010
2,755,101,997
325,552
(6,497,499)
2,947,895,562
2,748,604,498
The
assets
and
liabilities
in
the
above Statement
of
Financial Position
are
presented
in
order
of
liquidity
from
most
to
least
liquid.
The
financial
statements
on
pages
17
to 39
were
approved
and
authorised
for issue
by
the
Board of
Directors
and signed
on
its
behalf
on 28
April 2025.
Gold Bullion Securities Limited
Stated
Share
Retained
Revaluation
Total
Capital
Premium
Earnings
Reserve
Equity
Notes
USD
USD
USD
USD
USD
Opening Balance at 1
January 2023
Result and Total
Comprehensive Income for
Transfer to Revaluation
Reserve
18
-
-
(11,625,315)
11,625,315
-
Balance at 31 December
2023
3
Opening Balance at 1
January 2024
Result and Total
Comprehensive Income for
Transfer to Revaluation
Reserve
18
-
-
(6,823,051)
6,823,051
-
Balance at 31 December
2024
3
3
A non-statutory and non-GAAP Statement of Changes in Equity reflecting adjustments representing the difference between the value of
Gold Bullion and the price of Gold Securities is set out in note 18.
The notes on pages 21 to 39 form part of these financial statements
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Statement of Changes in Equity
For the year ended 31 December 2024
142
141,678
-
(18,264,634)
(18,122,814)
-
-
11,625,315
-
11,625,315
142
141,678
-
(6,639,319)
(6,497,499)
142
141,678
-
(6,639,319)
(6,497,499)
-
-
6,823,051
-
6,823,051
142
141,678
-
183,732
325,552
Gold Bullion Securities Limited
Non-cash Reconciling Items
Change in Fair Value of Gold Bullion
Change in Fair Value of Gold Securities
Revaluation of Gold Swing Bar
Increase/decrease in Gold Loan Due to Change in Gold Price
(680,398,995)
(426,319,646)
673,575,944
414,694,331
(235,834)
(107,521)
235,834
107,521
Year ended
Year ended
31 December
31 December
2024
2023
USD
USD
Profit/(Loss) for the Year
Cash Generated from Operating Activities
Net Movement in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of the year
Net Movement in Cash and Cash Equivalents
Cash and Cash Equivalents at the end of the year
Gold Securities are issued through a direct transfer of Gold Bullion from the Approved Applicants to the Custodian or redeemed by the direct
transfer of Gold Bullion by the Custodian to the Approved Applicants. As such the Company is not a party to any cash transactions. The
creations and redemptions of Gold Securities and additions and disposals of Gold Bullion, which are non-cash transactions for the Company,
are disclosed in notes 8 and 9 in the reconciliation of opening to closing Gold Securities and Gold Bullion.
The Company has entered into a service agreement with WisdomTree Management 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 Gold Securities. In return for these services, the
Company has an obligation to remunerate ManJer with an amount equal to the Management Fee and the creation and redemption fees earned,
less expenses (the “ManJer Fee”). The Gold Bullion in respect of the Management Fee is transferred by the Trustee from the Company’s
custodian accounts to ManJer’s custodian accounts. In addition, amounts in respect of the creation and redemption fees are transferred directly
from the Approved Applicants to ManJer and there are no cash flows through the Company. These fees are disclosed in note 3.
The notes on pages 21 to 39 form part of these financial statements
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Statement of Cash Flows
For the year ended 31 December 2024
6,823,051
11,625,315
-
-
-
-
-
-
-
-
-
-
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Gold Bullion Securities Limited
Notes to the Financial Statements
1.
General Information
Gold Bullion Securities Limited (the “Company”) is a company incorporated and domiciled in Jersey. The address of the registered office is
IFC 5, St Helier, Jersey, JE1 1ST.
The Company’s principal activity is the issue and listing of Gold Bullion securities (“Gold Securities”). These Gold Securities allow investors
to gain exposure to gold without needing to take physical delivery of Gold Bullion (“Gold Bullion”). It also allows investors to buy and sell
that interest through the trading of a security on the London Stock Exchange and any other exchange to which that security may be admitted to
trading from time to time. A Gold Security is a secured, undated zero coupon note of the Company, constituted by a trust instrument, with a
face value of USD 0.00001. Under the terms of this trust instrument the Gold Securities are secured on an amount of Gold Bullion equivalent
to the entitlement of each Gold Security (referred to as the “Gold Entitlement”), which is calculated in accordance with an agreed formula
published in the Prospectus.
The Company holds Gold Bullion to support the Gold Securities as determined by the Gold Entitlement. The Company does not make gains
from trading in the underlying Gold Bullion. The Gold Securities are issued under limited recourse arrangements whereby the holders have
recourse only to the Gold Bullion held to support the Gold Securities and not to the Company. As a result (and with the exception of the impact
of Management Fees), from a commercial perspective gains and losses in respect of Gold Bullion will always be offset by corresponding loss
or gain on the Gold Securities and therefore commercially the Company does not retain any net gains or losses or net risk exposures. However,
the difference in valuation between Gold Bullion and Gold Securities creates a mis-match between the values reported within these financial
statements. This difference in valuation would be reversed on a subsequent redemption of the Gold Securities and transfer of the corresponding
Gold Bullion. Further details are disclosed within the Accounting Policies and in note 18, with additional information regarding the risks of
the Company disclosed in note 15. Furthermore, the Company presents an adjusted Statement of Profit or Loss and Other Comprehensive
Income and an adjusted Statement of Changes in Equity in note 18 of the financial statements to reflect the economic results of the Company
through the reversal of the difference in valuation between Gold Bullion and Gold Securities given the gain or loss would be reversed on a
subsequent redemption of the Gold Securities and transfer of the corresponding Gold Bullion, and therefore will not be realised.
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 active trading of Gold Bullion is required of the Company because the Company only receives or
delivers Gold Bullion on the issue and redemption of Gold Securities, and only holds Gold Bullion as determined by the Gold Entitlement to
support the Gold Securities.
The Company is entitled to:
(1)
A management fee (at a rate of 0.40% per annum) which reduces the Gold Entitlement on a daily basis by an agreed amount, (the “Gold
Sales Charge” or the “Management Fee”); and
(2)
Creation and redemption fees on the issue and redemption of the Gold Securities.
No creation or redemption fees are payable to the Company when investors trade in the Gold 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 WisdomTree Management 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 Gold Securities. In return for these services, the
Company pays ManJer an amount equal to the Management Fee and the creation and redemption fees earned (the “ManJer Fee”). As a result,
the Company recognises a result before fair value movements of nil for each period.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
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Significant Estimates
The directors do not consider that any significant estimates have been applied in the preparation of these financial statements.
2.
Accounting
Policies
The
material
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, except for Gold Bullion and
financial liabilities held at fair value through profit or loss.
The
Board
has
considered
the
Company’s
exposure
to
climate
change
and
determined
that
due
to
the
nature
of
the
Company
and
its
operations
there are no directly observed impacts of climate change on the business. As a result, the Board concluded that there is no basis on which to
provide extended information of analysis relating to climate change, including as part of the basis of accounting or individual accounting
policies adopted by the Company.
In
the
above
determination,
the
Board
has concluded
specifically
that climate
change,
including
physical and transition
risks, does not have a
material impact on
the recognition and separate
measurement considerations of the assets and liabilities in these financial statements as at 31
December
2024.
This
conclusion
is
based
on
the
fact
that assets are
reported
at
fair
value
under IFRS, and
as
set
out
in
note
15
are
categorised
as
level
2
due
to
the
use
of observable, verifiable
inputs and
third party information
sources.
The liabilities are valued utilising
listed market prices at the year
end.
These
observable
inputs
and
market prices
will
reflect
wider
market sentiment,
which
inherently
includes
market
perspectives
relating
to
the impact of climate change.
The
financial statements
are
presented
in
the
United
States Dollars
(USD)
and
all
values
are rounded
to the
nearest USD,
except when
otherwise
indicated.
Critical
Accounting
Estimates
and
Judgements
The
presentation
of
financial
statements
in
conformity
with
IFRS
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.
Significant
Judgements
The
key accounting
judgements
required
to
prepare
these
financial
statements
are:
1. In
respect
of the
presentation
of
non-statutory
and
non-GAAP
adjustments
to
the
Statement
of
Profit
or
Loss
and
Other
Comprehensive
Income
and
the
Statement
of
Changes
in
Equity,
as
disclosed
in
note
18.
2.
The determination of the appropriate accounting policy to be applied to Gold Bullion. Under IFRS there is no standard treatment for the
classification of Gold Bullion (as they do not meet the definition of a financial asset, cash, inventory or property, plant or equipment)
therefore
the
election
of
how
to
treat Gold
Bullion
is
left
to
some
interpretation for companies
which
hold
these
assets.
The
Gold
Bullion
is
held
to
provide
the
security holders
with
the exposure
to
changes
in
the fair value of
Gold
Bullion and
therefore
the
Directors consider
that
carrying
the
Gold
Bullion
at
fair
value
through
profit
or
loss,
(consistent
with
the
treatment
that
would
be
applicable
to
a
financial
instrument),
reflects
the
objectives
and
the
purpose
of
holding
the
asset.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 23 - www.wisdomtree.eu
2.
Accounting Policies (continued)
There were no other new standards, amendments and interpretations adopted in the current year that resulted in a significant effect on
these financial statements.
(b)
New and revised IFRSs in issue but not yet effective:
The Company has not applied the following new and revised IFRSs that have been issued but are not yet effective:
•
IAS 7 and IFRS 7 - Supplier Finance Arrangements (effective for annual periods beginning on or after 1 January 2025)
•
IFRS 18 - Presentation and disclosure in financial statements (effective for annual periods beginning on or after 1 January 2027)
•
IFRS 19 - Subsidiaries without public accountability: disclosures (effective for annual periods beginning on or after 1 January 2027)
•
IFRS 9 and IFRS 7 (amendments) - Classification and measurement of financial instruments (effective for annual periods beginning
on or after 1 January 2026)
•
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback (effective for annual periods beginning on or after 1 January 2025)
•
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: lack of exchangeability (effective for annual periods
beginning on or after 1 January 2025)
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.
Accounting
Standards
(a)
Standards,
amendments
and
interpretations
considered
by
the
Company:
The
following
are
standards
and
amendments
effective
for
accounting
periods
beginning
on
or
after
1
January
2024
but
which
did
not
have any effect on the financial statements of the Company.
•
Amendments
to
IAS
1
-
Classification
of
Liabilities
as
current
or
non-current
•
Amendments
to
IFRS
16
-
Lease
liability
in a
sale
and
leaseback
transaction
Going
Concern
The
directors
continue
to
monitor
and
assess
the
impact
of
geopolitical
conflicts
on
the
assets
under
management
of
the
Company
and
will
take
any potential actions needed or as required under the terms of the prospectus, as facts and circumstances are subject to change and may be
specific
to
investments
and
jurisdictions.
The
nature
of
the
Company’s
business
dictates
that
the
outstanding
Gold
Securities
may
be
redeemed
at
any time
only
by holders
of
Gold Securities
who
have
entered into
an authorised
applicant
agreement with the
Company
(“Approved
Applicants”) and, in certain circumstances,
by individual holders and also, in certain circumstances, may be compulsorily redeemed by
the
Company.
As
the
redemption
of
Gold
Securities
will
always
coincide
with
the
transfer
of
an
equal
amount
(contractual
value)
of
Gold
Bullion
,
liquidity
risk
is mitigated
such
that
there
is
no
material
residual risk.
All
other
expenses are
met by
ManJer.
The
directors closely
monitor
the
financial
position
and
performance
of
ManJer,
its
assets
under
management,
and
therefore
its
related
revenue
streams,
in
respect
of
fulfilling
the
obligations
under
the
services
agreement.
The
net
reported
position
on
statement
of
financial
position,
including
in
instances
where
a
deficit
is
reported, is not considered to impact the going concern position of the Company as this position results solely due to the
unrealised gains or
losses on Gold Bullion and Gold Securities due to the accounting measurement basis applied
in accordance with IFRS.
As Gold Bullion
are
held to support Gold Securities, any deficit or surplus reported on unrealised positions would be reversed on a
subsequent redemption of the
Gold
Securities
and
the related transfer
of
Gold Bullion.
A
reported
deficit
is
not
considered
indicative
of
any
issues
relating
to
solvency
of
the
Company
and
the
directors
are
satisfied
that
any
obligations
arising
in
respect
of
the
Gold
Securities
can
be
managed
in
accordance
with
the
terms
of
the
applicable
Prospectus.
The
directors
consider
the
operations
of
the
Company
to
be
ongoing,
with
a
reasonable
expectation
that
the
Company
has
adequate
resources
to
continue
in
operational
existence
until
at
least
30
April
2026,
and
accordingly these financial statements have been prepared on the going concern basis.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 24 - www.wisdomtree.eu
2.
Accounting Policies (continued)
Gold Securities
i)
Issue and Redemption
Each time a Gold Security is issued or redeemed by the Company a
corresponding amount of Gold Bullion
is
transferred
into
or
from
the relevant
secured
account held
by the Custodian.
Upon initial
recognition,
the
fair value is
recorded
using the
market
close
price
published
by
the London
Bullion Market Association (“LBMA”) applied to the underlying Gold Bullion transferred.
Financial
liabilities
are
recognised
and
de-recognised
on
the
transaction
(trade)
date.
ii)
Classification at
fair
value
through
Profit
or
Loss
Gold Securities comprise a financial instrument whose redemption price is linked to the value of
the underlying Gold Bullion.
Gold
Securities are
classified as
liabilities measured at fair value
through profit or
loss under
IFRS
9 due
to
an embedded
derivative.
This also
significantly
reduces
a
measurement
or
recognition
inconsistency
that
would
otherwise
arise
from
measuring
assets
or
liabilities,
or
recognising the gains and losses on them, on different bases.
iii)
Pricing
IFRS
13
requires
the
Company
to
identify
the
principal
market
and
to
utilise
the
available
price
within
that
principal
market.
The
directors
consider the stock exchanges where the Gold Securities are listed to be the principal market and as a result the fair value of the
Gold
Securities
is
the
on-exchange
price
as
quoted
on
the
stock exchange
demonstrating
active
trading
with
the
highest
trading
volume
on
each
day that the price is obtained.
The Gold Securities are priced using the latest traded mid-market price on (or before) the Statement of
Financial Position date.
A difference
arises
between
the
value
of
Gold
Bullion
(held
to
support
the
Gold
Securities)
and
Gold
Securities
(at
market value)
presented
in
the
Statement
of
Financial
Position.
This
difference
is
reversed
on
a
subsequent
redemption
of
the
Gold
Securities
and
transfer
of
the
corresponding Gold Bullion.
Gold
Bullion
The
Company
holds
Gold
Bullion
equal
to
the redemption
amount
due
to
holders
of
Gold
Securities
solely
for
the
purpose
of
meeting
its
obligations
under
the Gold Securities.
As described above, under IFRS
there
is no
standard
treatment for
the classification of Gold Bullion.
The Gold Bullion
is held to provide
the
security holders with the exposure to changes in the fair value of Gold Bullion and therefore the Directors consider that carrying the Gold
Bullion
at
fair
value
through
profit
or
loss,
consistent
with
the
treatment
that
would
be
applicable
to
a
financial
instrument,
reflects
the
objectives and the purpose of holding the asset.
Gold Bullion
is priced on a
daily basis based on
the amount of Gold
Bullion
held using
the
latest fixing price published by
the
LBMA, and is
considered to be the fair value of the Gold Bullion. Also on a daily basis an amount is transferred to Gold Bullion held in respect of the
Management Fee.
The
valuation
of
the
Gold
Bullion
is
equivalent
to
the
LBMA fixing
price
being
applied
to
the
total Gold
Entitlement of
the
Gold Securities, and is referred to as the ‘Contractual Value’.
Gold
Bullion
and
Gold Securities
Awaiting
Settlement
The
issue
and
redemption
of
Gold
Securities,
and
the
transfer
in
and
out
of
Gold
Bullion,
is
accounted
for
on
the
transaction
date.
The
transaction
will
not
settle
until
two
days after
the
transaction
date.
Where
transactions are
awaiting
settlement at
the
year end,
the
value
of
the
Gold Bullion and the Gold Securities due to be settled is separately disclosed within the relevant assets and liabilities on
the Statement of
Financial Position. Gold Bullion and Gold Securities awaiting settlement are recorded at fair value using the latest prices published by the
LBMA.
Changes
in
fair
value
are
recognised
through
profit and
loss.
The
fair
value
of
these
receivables
and
payables
is
considered
equivalent
to their carrying value.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 25 - www.wisdomtree.eu
2.
Accounting Policies (continued)
Gold Bullion Held in Respect of Management Fees and ManJer Fee Payable in Gold Bullion
Management Fee income is accrued by reducing the Gold Entitlement of the Gold Securities on a daily basis by an agreed amount. These fees
are recognised in Gold Bullion, recorded at fair value through profit or loss in accordance with the accounting judgement set out above in
respect of Gold Bullion. The amount recognised at the Statement of Financial Position date is revalued using the latest price published by the
LBMA.
Management Fees payable are also accrued based on the income accrued in accordance with the agreement with ManJer. These fees are
payable in Gold Bullion are classified as financial liabilities measured at fair value through profit or loss under IFRS 9 due to an embedded
derivative. This also significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets
or liabilities, or recognising the gains and losses on them on different bases. The payable at the Statement of Financial Position date is revalued
using the latest price published by the LBMA.
Gold Swing Bar
The Company has a loan facility with HSBC Bank USA, N.A. giving the Company the rights, interest and title to a gold bar that is held for the
purpose of facilitating the allocation of gold to holders of Gold Securities (the “Gold Swing Bar”). The Gold Swing Bar is denominated in
gold ounces. Under IFRS there is no standard treatment for the classification of Gold Bullion. The Directors however consider that the
measurement of the Gold Bullion, including the Gold Swing Bar, at fair value through profit or loss is the most appropriate treatment as it most
accurately reflects the substance of the asset.
The fair value is calculated using the latest price published by the LBMA.
Gold Loan
The Gold Loan with HSBC Bank USA, N.A. associated with the Gold Swing Bar is also denominated in gold ounces. It's classified as liability
measured at fair value through profit or loss under IFRS 9 due to an embedded derivative. This also significantly reduces a measurement or
recognition inconsistency that would otherwise arise from measuring assets and laibilities, or recognising the gains and losses on them, on
different bases.
The fair value is calculated using the latest price published by the LBMA applied to the amount in gold ounces of the Gold Loan.
Other Financial Assets and Liabilities
Other financial assets and liabilities are non-derivative financial assets and liabilities including trade and other receivables and trade and other
payables (primarily Creation and Redemption Fees) with a fixed payment amount and are not quoted in an active market. After initial
measurement the other financial assets and liabilities are subsequently measured at amortised cost using the effective interest method less any
allowance for expected credit losses (in respect of financial assets only). 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 recorded through profit or loss.
Reserves
A revaluation reserve and a retained earnings reserve are maintained within equity. All profit or loss is taken to the retained earnings reserve at
the end of the accounting period to which it relates and the gain or loss relating to the mis-match of accounting values is transferred to the non-
distributable revaluation reserve as the balance relates to unrealised gains and losses on Gold Bullion (held to support the Gold Securities) and
Gold Securities, which will be reversed on a subsequent redemption of the Gold Securities and the related transfer of Gold Bullion and will
therefore not be realised.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 26 - www.wisdomtree.eu
2.
Accounting Policies (continued)
ii)
Foreign Currency
The financial statements of the Company are presented in the currency in which the majority of the Gold Securities issued by the Company
are denominated (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 and the presentation currency of the Company.
Transactions in foreign currencies are initially recorded at the spot rate at the date of the transaction. 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.
Income
The
Company
derives
its
income
over
time
(in
respect
of
Management
Fees),
and
at
a
point
in
time
(in
respect
of
creation
and
redemption
fees) as follows:
i)
Management
Fees
Management
Fees
are
calculated
by
applying
a
fixed
percentage
of
0.40%
per
annum
to
reduce
the
Gold
Entitlement
of
the
Gold
Securities
on a daily basis in accordance with the terms of
the Securities issued. The change in the Gold
Entitlement reduces the value of
the
Gold
Securities.
This
reduction
equates
to
the Management Fee
amount
in
Gold
Bullion,
that
is
recognised
for
that
day
per
each
Gold
Security
in issue on
that day. The Management Fees are accrued and recognised on a daily
basis until invoiced and settled by a transfer of
Gold
Bullion. The amount recognised as income is calculated by applying the average LBMA fixing price to the
total Management Fee
accrued
on
a
monthly
basis.
Creation
and
Redemption
Fees
Fees
for
the
issue
and
redemption
of
Gold
Securities
are
recognised
at
the
fair
value
of
the
consideration
expected
to
be
received,
on
the
date on which the
transaction becomes legally binding. Accrued creation and
redemption fees are invoiced and settled on a quarterly
basis.
The
Company
has
not
provided
segmental
information
as
the
Company
has
only
one
business
or
product
group,
issuing
Gold
Securities,
and
one geographical segment which
is
Europe.
In addition, the Company has no
single major customer from
which greater than 10% of
income is
generated.
All information relevant to
the understanding of
the
Company’s activities
is included in
these financial statements.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
Management Fees
Creation and Redemption Fees
11,648,912
12,096,401
10,250
16,750
- 27 - www.wisdomtree.eu
3.
Result Before Fair Value Movements
Result Before Fair Value Movements for the year comprised:
Year ended
Year ended
31 December
31 December
2024
2023
USD
USD
Total Income
ManJer Fees
Total Operating Expenses
Result Before Fair Value Movements
Audit Fees for the year of GBP 45,683 will be met by ManJer (2023: GBP 36,874).
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 (2023:
zero percent).
5.
Gold Swing Bar
As at
As at
31 December
31 December
2024
2023
USD
USD
Gold Swing Bar
The 430 (2023: 430) ounce gold bar held by the Company is used to ensure all Gold Bullion Securities are supported by holdings of gold in
allocated form.
6.
Gold Bullion Held in Respect of Management Fees
As at
As at
31 December
31 December
2024
2023
USD
USD
Management Fees
Management Fees recognised in Gold Bullion and are recorded at fair value.
11,659,162
12,113,151
(11,659,162)
(12,113,151)
(11,659,162)
(12,113,151)
-
-
1,122,666
886,832
1,003,428
936,818
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
Creation and Redemption Fees
Receivable from Related Party
3,750
13,000
141,820
141,820
Opening Gold Bullion
Additions
Disposals
Gold Bullion Transferred to Gold Bullion Held in Respect of Management Fees
Change in Fair Value
2,745,960,081
3,405,281,671
107,015,308
164,040,369
(576,101,574)
(1,237,585,204)
(11,648,912)
(12,096,401)
680,398,995
426,319,646
- 28 - www.wisdomtree.eu
7.
Trade and Other Receivables
As at
As at
31 December
31 December
2024
2023
USD
USD
145,570
154,820
The fair value of the receivables is equal to the carrying value. The Creation and Redemption Fees are due to be recovered within 12 months
of the year end.
8.
Gold Bullion
As at
As at
31 December
31 December
2024
2023
USD
USD
Change in Fair Value of Gold Bullion
Gold Bullion Held at Fair Value
As at the year end, there can be certain amounts of Gold Bullion awaiting settlement in respect of the creation or redemption of Gold
Securities with transaction dates before the year end and settlement dates in the following year:
•
The amount payable on Gold Securities awaiting settlement is USD NIL (2023: USD 665,947).
All Gold Bullion assets have been valued using the AM fix on 31 December 2024 as published by the LBMA being the last fix price available
for the year.
The below reconciliation of changes in the Gold Bullion includes only non-cash changes.
As at
As at
31 December
31 December
2024
2023
USD
USD
Closing Gold Bullion
680,398,995
426,319,646
2,945,623,898
2,745,960,081
2,945,623,898
2,745,960,081
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 29 - www.wisdomtree.eu
9.
Gold Securities
Gold Securities are secured, undated zero coupon notes with a face value of USD 0.00001. As at 31 December 2024, there were 12,278,039
(2023: 14,431,538) Gold Securities outstanding, with a face value, in aggregate, of USD 123 (2023: USD 144).
Whilst the Gold Securities are quoted on the open market, the Company’s ultimate liability relates to its contractual obligations to issue and
redeem Gold Securities in exchange for Gold Bullion as determined by the Gold Entitlement on each trading day. The fair value of each
creation and redemption of Gold Securities is recorded using the price published by the LBMA on the transaction date, and is the “Contractual
Value”.
The issue and redemption of Gold Securities is recorded at a value that corresponds to the value of the Gold Bullion transferred in respect of
the issue and redemption. As a result, the Company has no net exposure to gains or losses on the Gold Securities and Gold Bullion. The
Company measures the Gold Securities at their fair value in accordance with IFRS 13 rather than at the Contractual Value described above.
The fair value is the price quoted on stock exchanges or other markets where the Gold Securities are listed or traded.
The fair values and changes thereof during the year based on prices available on the open market as recognised in the financial statements are:
As at
31 December
2024
USD
As at
31 December
2023
USD
Change in Fair Value of Gold Securities
(673,575,944)
(414,694,331)
Gold Securities at Fair Value
2,945,440,166
2,752,599,400
The contractual values and changes thereof during the year based on the contractual settlement values are:
As at
As at
31 December
31 December
2024
USD
2023
USD
Change in Contractual Value for the Year
(680,398,995)
(426,319,646)
Gold Securities at Contractual Value
2,945,623,898
2,745,960,081
The gain or loss on the difference between the value of the Gold Bullion and the fair value of Gold Securities would be reversed on a subsequent
redemption of the Gold Securities and transfer of the corresponding Gold Bullion. Refer to note 18 for the non-statutory and non- GAAP
adjustments which reflect the results of this reversal.
As at the year end, there can be certain amounts of Gold Bullion awaiting settlement in respect of the creation or redemption of Gold Securities
with transaction dates before the year end and settlement dates in the following year:
•
The amount of Gold Bullion held in respect of Gold Securities awaiting settlement is USD NIL (2023: USD 665,947).
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 30 - www.wisdomtree.eu
9.
Gold Securities (continued)
The below reconciliation of changes in the Gold Securities, being liabilities arising from financing activities, includes only non-cash changes.
Opening Gold Securities
Securities Created
Securities Redeemed
Management Fee
Change in Fair Value
Closing Gold Securities at fair value
10.
Trade and Other Payables
ManJer Fees Payable
As at
As at
31 December
31 December
2024
2023
USD
USD
2,752,599,400
3,423,546,305
107,015,308
164,040,369
(576,101,574)
(1,237,585,204)
(11,648,912)
(12,096,401)
673,575,944
414,694,331
2,945,440,166
2,752,599,400
As at
As at
31 December
31 December
2024
2023
USD
USD
1,007,178
949,818
Management Fees payable by transfer of Gold Bullion are recorded at fair value. The fair value of the remaining payables is equal
to the carrying value. The ManJer Fee Payable is due to be settled within 12 months after the year end.
11.
Gold Loan
As at
As at
31 December
31 December
2024
2023
USD
USD
Gold Loan
The loan is denominated in gold ounces and marked to fair value at the year end with movements recognised in the Statement of Profit of Loss
and Other Comprehensive Income. The loan is repayable on demand. The Company intends to maintain the loan as long as the Company
continues to operate.
12.
Share Capital
As at
As at
31 December
31 December
2024
2023
USD
USD
100 Shares, Issued and Fully Paid
The Company has an authorised capital of 10,000 Ordinary Shares of GBP 1 each.
All Shares issued by the Company carry one vote per Share without restriction and carry the right to dividends.
All Shares are held by WisdomTree Holdings Jersey Limited (“HoldCo”).
1,122,666
886,832
142
142
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 31 - www.wisdomtree.eu
13.
Share Premium
As at
As at
31 December
31 December
2024
2023
USD
USD
100 Shares of GBP 1 Each, Issued at GBP 1,000 Each and Fully Paid
14.
Related Party Disclosures
Entities and individuals which have a significant influence over the Company, either through ownership or by virtue of being a director of the
Company, are considered to be related parties. In addition, entities with common ownership to the Company and entities with common
directors are also considered as related parties.
Fees charged by ManJer during the year:
As at
As at
31 December
31 December
2024
2023
USD
USD
ManJer Fees
11,659,162
12,113,151
The following balances were due to ManJer at the year end:
As at
As at
31 December
31 December
2024
USD
2023
USD
ManJer Fees Payable
1,007,178
949,818
At 31 December 2024, USD 141,820 is receivable from ManJer (2023: USD 141,820).
No director has a service contract with the Company. The Directors of the Company who are employees within the WisdomTree, Inc. group
do not receive separate remuneration in their capacity as directors of the Company. The directors of the Company who are employees of Apex
Financial Services (Alternative Funds) Limited (“Apex” or the “Administrator”) do not receive separate remuneration in their capacity as
directors of the Company, however Apex receives a fee from ManJer which includes services in respect of the Company, including for the
provision of directors who are employees of Apex.
On 14th June 2024 R&H Fund Services (Jersey Limited (“R&H”) resigned as Administrator, and Apex Financial Services (Alternative Funds)
Limited were appointed as Administrator. Vinod Rajput, Olivia Vuillemin and David Middleton (up to his date of resignation) are employees
of Apex. During the year, R&H and Apex charged ManJer administration fees which include the company and other entities for which the
ManJer is the Manager and R&H and Apex is the Administrator. Total fee amounting GBP 1,647,534 (31 December 2023: GBP 1,221,529)
translated in USD 2,114,712 (31 December 2023: USD 1,560,381), of which GBP 471,388 (31 December 2023: GBP 291,402) translated in
USD 590,885 (31 December 2023: USD 372,237) was outstanding at the period end.
Peter Ziemba is an executive officer of WisdomTree, Inc. and Bryan Governey is European General Counsel for the WisdomTree, Inc. group.
141,678
141,678
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 32 - www.wisdomtree.eu
15.
Financial Risk Management
The Company is exposed to a number of risks arising from its activities, including credit risk, settlement risk, liquidity risk and market risk.
The Board is responsible for the overall risk management approach and for approving the risk management strategies and principles. The
Board meets frequently to consider the risk exposures of the Company and to determine appropriate management policies. The risk
management policies employed by the Company to manage these are discussed below.
The Gold Securities are subject to normal market fluctuations and other risks inherent to 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 information provided below is not intended to be a comprehensive summary of all the risks associated with the Gold Securities and
investors should refer to the most recent Prospectus for a detailed summary of the risks inherent to investing in the Gold Securities. Any data
provided should not be used or interpreted as a basis for future forecast or investment performance.
(a)
Credit Risk
•
Unallocated: Unlike Bullion held in an allocated account, bullion in an unallocated account does not entitle the customer to a
particular bar of bullion and the customer’s holding is not segregated from that of other customers or the custodian. Instead, the books
and records of the custodian record that the customer is entitled to a specific amount of bullion. As the bullion is not segregated, the
customer has a credit risk exposure to the custodian. Bullion in unallocated form is easier to transfer as it simply requires an update of
the custodian’s books and records rather than movements of physical bullion and for this reason transfers in connection with creation
and redemption of Gold Securities are carried out in unallocated form.
Credit risk
primarily refers
to
the risk
that
Approved
Applicants
or
the
Custodian
will
default on
their contractual obligations resulting in
financial loss. The Gold Securities are issued under limited recourse arrangements whereby the holders have recourse only to
the Gold
Bullion
(held
to
support
the
Gold
Securities)
and
not
to
the
Company,
therefore
limiting
the
credit
risk
of
the Company
in
connection
with
the
issue
of
the
Gold Securities.
The
total carrying
amounts
of
the
Gold
Bullion, Gold
Swing
Bar,
amounts receivable
awaiting
settlement and
trade
and other
receivables
best
represent
the
maximum
credit
risk
exposure
at
the
Statement
of
Financial
Position
date.
At
the
reporting
date
the
Company’s
amounts
receivable awaiting settlement and trade and other receivables are detailed on the Statement of Financial Position.
Credit risk
is managed
by
the
Company by
only
dealing with
Approved
Applicants who are
believed
to
be
creditworthy.
In
the
event
the
Approved
Applicants
fail
to
complete
their
obligation, no
Gold
Securities
will
be
created
therefore
the
Company
does
not
have
the
risk
of
loss of the amount expected to be received.
Credit risk also includes custodial risk.
Gold Bullion is the subject of a fixed charge or legal mortgage in favour of The Law Debenture
Trust Corporation p.l.c (the “Trustee”) pursuant to security deeds entered
into by
the Trustee and the Company to secure the obligations
owed by the Company to the Trustee and the holders of the relevant Gold Securities (the “Security”).
However, there is no exposure
to
credit risk of
the
Trustee
by
virtue of
the existence
of
the
Security.
Under
the custodian agreements the
relevant custodian acknowledges
the Security created in favour of
the
Trustee and agrees that once Gold Bullion is deposited in
the secured gold accounts, it may only be
removed after approval from the Trustee.
Gold Bullion
held
with
the
custodian is
held
either
in
allocated
or
unallocated
form.
• Allocated:
An
allocated
account
evidences
that
uniquely
identifiable
bars
of
bullion
have
been
“allocated”
to
the
security
holder
and
are
segregated
from
other
gold
held
in
the
custodian’s
vault.
An
allocated
account
is
held
in
the
customer’s
name
(which, for the Gold Securities, means in the name of the Trustee as legal mortgagee pursuant to the Security and in its capacity as
trustee
for
the
Security
Holders).
The
customer has
full
title
to
the
bullion
held
in
the
allocated
account.
As
a
result,
allocated
Bullion
does
not
entail
any
credit
risk
exposure
to
the
custodian,
and
the
credit
exposure
to
the
custodian
is
therefore
limited
to the
amounts
held
in
unallocated
accounts.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 33 - www.wisdomtree.eu
15.
Financial Risk Management (continued)
(a)
Credit Risk (continued)
The Gold Bullion held at the custodian to back the Gold Securities is audited twice a year by an independent metal audit firm - Inspectorate
International - who inspect the Gold Bullion held at the custodian to ensure that it matches in all respects the Gold Bullion disclosed as
held on the Bar List. The first audit takes place at the start of each year in respect of the Gold Bullion held at the end of the previous year
and then a second audit is carried out at random at a later point in the year.
The custodian is not required to take out insurance and neither is the Trustee. Accordingly, there is a risk that the secured Gold Bullion
could be lost, stolen or damaged and the Company would not be able to satisfy its obligations in respect of the Gold Securities. Currently
HSBC Bank PLC is the only custodian. The Board monitors credit risk exposure, including through an assessment of the credit rating of
the custodian ((HSBC: AA- (2023: AA-) (Fitch, 12 June 2024)), to ensure the Company's exposure is managed, and has continued to do
so more closely with a focus on any potential impact of, or developments relating to the Ukraine Crisis.
When the Gold Securities are redeemed, the Company returns the corresponding amount of Gold Bullion determined by the Gold
Entitlement of those Gold Securities, therefore any redemption of Gold Securities would not impact the liquidity of the Company.
Consequently, the Company has not presented any tabular information in respect of liquidity risk of the Company. Consequently, the
Company has not presented any tabular information in respect of liquidity risk.
The Gold Securities are backed by physical Gold Bullion in allocated accounts to the extent possible. A small portion may be
held in
unallocated
form
on
a
short
term
basis
when
Gold
Bullion
is
in
the
process
of
being
allocated
or
de-allocated
for
a
creation
or
redemption,
where
it cannot be held
in
whole bars.
Once the
level of Gold Bullion
in an unallocated account reaches an amount equal
to
one bar,
that
bar can be transferred to an allocated account.
The
gold
swing
bar
held
by
the
Company
is
used
to
ensure
all
Gold
Bullion
Securities
are
supported
by
holdings
of
gold
in
allocated
form.
As a result the gold held in unallocated
gold form is generally less than 1 physical
gold bar and immaterial in value,
however a small
portion
may
be
held
in
unallocated
form on a
short
term
basis
when
in
the
process
of
being
allocated
or
de-allocated
for
a
creation
or
redemption.
(b)
Settlement
Risk
Settlement
risk
primarily
refers
to
the
risk
that
an
Approved
Applicant
or
the
Custodian
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
Gold
Bullion or
Gold Securities on
the
settlement
date.
The
Gold
Securities
settle
through
the
CREST
system.
The
directors
feel
that
this
risk
is mitigated as Gold Securities are
not issued until the required amount of Gold Bullion has been received
in
the Custodian account,
and Gold
Bullion is not transferred until the relevant Gold Securities have been delivered in CREST. As a result, each 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
8 and
9.
(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.
The
Company’s payables are
all payable
on
demand and generally settled on
a
short-term
basis.
Liquidity risk
in
respect
of
payables
related
to
expenses
is reduced by
the
Gold
Bullion
as Management Fee is
secured
by
the
Company
on
a
daily basis,
in
order
for
the
related ManJer
expense accumulated (for
the
month,
in
arrears)
to
be
settled (in Gold
Bullion)
once invoiced, and amounts in respect
of
the
creation
and redemption
fees
are
transferred
from
the
relevant counterparties
directly
to
ManJer
and
there are
no
related
cash
flows
through the Company.
The Gold Securities do not have a contractual maturity date and will only be redeemed at the request of
the holder
of the security, which
may be requested at
any time, with the transaction settling through
the transfer of
Gold
Bullion
two
days
after
the
transaction
date,
or
in
the
case
of
a
compulsory
redemption
by
either
transferring
the
Gold
Bullion,
or
by
realising
the
Gold
Bullion
for
cash and
settling
the
cash
proceeds
to
holders
on
a
short-term
basis.
Generally,
only
Approved
Applicants
can
submit
applications
and
redemptions
directly
with the Company.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 34 - www.wisdomtree.eu
15.
Financial Risk Management (continued)
(d)
Capital Management
The primary objective of the Company’s capital management policy is to ensure that it maintains sufficient resources for operational
purposes. The capital being managed is the Share Capital and Share Premium, as presented in the Statement of Changes in Equity.
Retained Earnings and the Revaluation Reserve, as presented in the Statement of Changes in Equity, are not considered managed
capital as these balances relate to unrealised gains and losses on Gold Bullion (held to support the Gold Securities) and Gold Securities,
which are reversed on a subsequent redemption of the Gold Securities and the related transfer of Gold Bullion and will therefore not be
realised. 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.
The Company’s principal activity is the issue and listing of Gold Securities. These securities are issued and redeemed as demand requires.
The Company holds a corresponding amount of Gold Bullion which matches the total contractual liability of the Gold 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, including Trustee and Custodian Fees. 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 and Creation and Redemption fees
earned.
As all Gold Securities in issue are supported by an equivalent amount of Gold Bullion held by the Custodian 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 Gold Securities.
(e)
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 liabilities in respect of Gold Securities, relate to its contractual obligations to issue and redeem Gold Securities
in exchange for Gold Bullion as determined by the Gold Entitlement on each trading day. The fair value of each creation and redemption
of Gold Securities is recorded using the price published by the LBMA on the transaction date. However, under IFRS 13, the liability is
recorded at fair value (being the on-exchange price) which results in a mismatch. As described in note 18 this mismatch is reversed on the
redemption of Gold Securities.
As a result, the Company’s contractual and economic liability in connection with the issue and redemption of Gold Securities is matched
by movements in the corresponding Gold Bullion. Whilst sensitivity analysis could be performed on this mismatch, the Company does not
ultimately have economic exposure to the on-exchange price, but to the contractual liability of the Gold Securities and consequently, the
Company does not have any net exposure to market price risk. Furthermore, the result of the numeric sensitivity is considered not material
by the directors and in their opinion, no sensitivity analysis is required to be disclosed.
(f)
LBMA Price USD
Movement
2024
202
%
Gold Bullion
2,610.85
2,062.4
26.59%
Market
Risk
Market
risk
is
the
risk
that
changes
in
market
prices
(such
as
equity
and
bullion
prices,
interest
rates
and
foreign
exchange
rates)
will
affect the Company’s income, or the value of its financial instruments
held or issued.
i)
Price
Risk
As
described
above,
Gold
Securities
provide
investors
with
exposure
to
gold.
Movements in
the
value
of
the
underlying
Gold
Bullion
may
vary
widely
which
could
have an
impact on
the
demand
for
the
Gold Bullion
issued
by
the
Company.
The
movement
in
the
price
of
the
Gold Bullion are:
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 35 - www.wisdomtree.eu
15.
Financial Risk Management (continued)
(f)
Market Risk (continued)
i)
Price Risk (continued)
The value of the Company’s liability in respect of the Gold Securities fluctuates according to Gold Bullion prices and the risk of such
change in price is managed by the Company by holding Gold Bullion in the same quantity as its liability. Whilst the Gold Securities are
quoted on the open market, the Company’s ultimate liability relates to its contractual obligations to issue and redeem Gold Securities in
exchange for Gold Bullion as determined by the Gold Entitlement on each trading day. The Company measures the Gold Securities at
their fair value in accordance with IFRS 13 rather than at the Contractual Value (as described in the Prospectus). The gain or loss on the
difference between the value of the Gold Bullion and the fair value of Gold Securities would be reversed on a subsequent redemption of
the Gold Securities and transfer of the corresponding Gold Bullion. Refer to note 9 for the further details regarding fair values.
The Company therefore bears no residual financial risk from a change in the price of Gold Bullion. Furthermore, the impact of
price sensitivity is considered immaterial to these financial statements. However, there is an inherent risk from the point of view of
investors as the price of Gold Bullion and the value of the Gold Securities may vary widely due to, amongst other things, changing supply
or demand for Gold Bullion, government and monetary policy or intervention and global or regional political, economic or financial
events. The market price of Gold Securities is (and will remain) a function of supply and demand amongst investors wishing to buy and
sell Gold Securities and the bid-offer spread that the market makers are willing to quote. This is highlighted further in note 18, and below
under the Fair Value Hierarchy.
ii)
Interest Rate Risk
The Company does not have significant exposure to interest rate risk since none of its assets or liabilities bear any interest.
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 Gold Securities are matched
economically by corresponding losses or gains attributable to the Gold Bullion.
(g) 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.
•
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 on-market price as the Gold Securities are quoted and actively traded on the open market.
Therefore, Gold Securities are classified as Level 1 financial liabilities.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
Level 2
Gold Bullion
Gold Swing Bar
Gold Loan
2,945,623,898
2,745,960,081
1,122,666
886,832
(1,122,666)
(886,832)
- 36 - www.wisdomtree.eu
15.
Financial Risk Management (continued)
The Company holds Gold Bullion to support the Gold Securities as determined by the Gold Entitlement (which is calculated in accordance
with an agreed formula published in the Prospectus). Gold Bullion is marked to fair value using the latest price published by the LBMA.
The Company has contractual obligations to issue and redeem Gold Securities in exchange for Gold Bullion as determined by the Gold
Entitlement on each trading day. The fair value of each creation and redemption of Gold Securities is recorded using the price published
by the LBMA on the transaction date applied to that Gold Entitlement. Therefore, Gold Bullion is classified as a level 2 asset, as the value
is calculated using third party pricing sources supported by observable, verifiable inputs.
The categorisation of the Company’s assets and (liabilities) are as shown below:
2,945,623,898
2,745,960,081
The Gold Securities and the Gold Bullion are recognised at fair value upon initial recognition and revalued to fair value in line with the
Company’s accounting policy. There are no assets or liabilities classified in level 3. Transfers between levels are recognised in the primary
market on which the Gold Securities prices are quoted and was determined to be inactive at the relevant reporting date. The Company considers
both the last trade date and trading volumes during the 5 trading days leading up to each reporting date to determine if the market for a
particluar Gold Security is active. Transfers, as a result of the analysis levels of the market, are identifed and recognised at each reporting date.
Fair Value
As at
As at
31 December
31 December
2024
2023
USD
USD
Level 1
Gold Securities
(2,945,440,166)
(2,752,599,400)
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
Change in Fair Value of Gold Bullion
Change in Fair Value of Gold Securities
680,398,995
426,319,646
(673,575,944)
(414,694,331)
- 37 - www.wisdomtree.eu
16.
Ultimate Controlling Party
In accordance with the disclosure requirements of IFRS the directors have determined that no entity meets the definition of immediate parent
or ultimate controlling party. The holder of issued equity shares is Electra Target HoldCo Limited, a Jersey registered company.
WisdomTree, Inc (formerly WisdomTree Investments, Inc) is the ultimate controlling party of HoldCo.
17. Events Occurring After the Reporting Date
There have been no significant events that have occurred since the end of the reporting date 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 2024 or on
the results and cash flows of the Company for the year then ended.
18. Non GAAP and Non Statutory Information
As a result of the mis-match in the accounting valuation of Gold Bullion (held to support the Gold Securities) and Gold Securities (as disclosed
in notes 8 and 9) the profits and losses and comprehensive income of the Company presented in the Statement of Profit or Loss and Other
Comprehensive Income reflect gains and losses which represent the movement in the cumulative difference between the value of the Gold
Bullion and the price of Gold Securities. The Statement of Changes in Equity also reflects the fair value movements on both the Gold Bullion
(held to support the Gold Securities) and the Gold Securities.
These gains or losses on the difference between the value of the Gold Bullion (held to support the Gold Securities) and the price of Gold
Securities would be reversed on a subsequent redemption of the Gold Securities and transfer of the corresponding Gold Bullion.
Furthermore, the Gold Securities are issued under limited recourse arrangements whereby the holders have recourse only to the relevant Gold
Bullion (held to support the Gold Securities) and not to the Company. As a result, the Company does not make gains from trading in the
underlying Gold Bullion (held to support the Gold Securities) and, from a commercial perspective (with the exception of the impact of
Management Fees) gains and losses in respect of Gold Bullion (held to support the Gold Securities) will always be offset by a corresponding
loss or gain on the Gold Securities and the Company does not retain any net gains or losses.
The mismatched accounting values are as shown below:
Year ended
Year ended
31 December
31 December
2024
2023
USD
USD
6,823,051
11,625,315
To reflect the commercial results, the Company has presented below a non-GAAP and non-Statutory Statement of Profit or Loss and
Other Comprehensive Income and Statement of Changes in Equity for the period which reflect an Adjustment from Market Value to
Contractual Value (as set out in the Prospectus) of Gold Securities, together with those gains or losses being transferred to a separate reserve
which is deemed non-distributable.
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 38 - www.wisdomtree.eu
18.
Non GAAP and Non Statutory Information (continued)
(a)
Non GAAP and Non Statutory Statement of Profit or Loss and Other Comprehensive Income
Year ended
Year ended
31 December
31 December
2024
2023
USD
USD
Income
Expenses
Result Before Fair Value Movements
Change in Fair Value of Gold Bullion
Change in Fair Value of Gold Securities
Profit for the Year
Adjustment from Market Value to Contractual Value (as set out in the
Prospectus) of Gold Securities
Adjusted Result
(b)
Non GAAP and Non Statutory Condensed Statement of Changes in Equity
Opening Balance at
1 January 2023
Result and Total
Comprehensive Income for
the Year
-
-
11,625,315
-
11,625,315
11,625,315
Transfer to Revaluation
Reserve
-
-
(11,625,315)
11,625,315
-
-
Adjustment from Market
Value to Contractual Value
(as set out in the Prospectus)
of Gold Securities
-
-
-
-
-
(11,625,315)
Balance at
31 December 2023
142
141,678
-
(6,639,319)
(6,497,499)
141,820
11,659,162
12,113,151
(11,659,162)
(12,113,151)
-
-
680,398,995
426,319,646
(673,575,944)
(414,694,331)
6,823,051
11,625,315
(6,823,051)
(11,625,315)
-
-
Share Capital
Share
Premium
Retained
Earnings
Revaluation
Reserve
4
Total
Equity
Adjusted
Total Equity
USD
USD
USD
USD
USD
USD
142
141,678
-
(18,264,634)
(18,122,814)
141,820
Gold Bullion Securities Limited
Notes to the Financial Statements (continued)
- 39 - www.wisdomtree.eu
18.
Non GAAP and Non Statutory Information (continued)
(b)
Non GAAP and Non Statutory Condensed Statement of Changes in Equity (continued)
Share Capital
Share
Premium
Retained
Earnings
Revaluation
Reserve
4
Total
Equity
Adjusted
Total Equity
USD
USD
USD
USD
USD
USD
Opening Balance at
1 January 2024
142
141,678
-
(6,639,319)
(6,497,499)
141,820
Result and Total
Comprehensive Income for
the Year
-
-
6,823,051
-
6,823,051
6,823,051
Transfer to Revaluation
Reserve
-
-
(6,823,051)
6,823,051
-
-
Adjustment from Market
Value to Contractual Value
(as set out in the Prospectus)
of Gold Securities
-
-
-
-
-
(6,823,051)
Balance at
31 December 2024
142
141,678
-
183,732
325,552
141,820
4
This represents the difference between the value of Gold Bullion and the price of Gold Securities.