Xtrackers (Jersey) ETC PLC

Directors' report and audited financial statements

For the period from the date of incorporation

18 October 2022 to 31 December 2023

Registered number : 145739

Xtrackers (Jersey) ETC PLC

Contents Page

Directors and other information ................................................................................................................................................................................... 1

Directors' report .......................................................................................................................................................................................................... 2

Statement of Directors' responsibilities ........................................................................................................................................................................ 5

Independent auditor's report........................................................................................................................................................................................ 6

Statement of comprehensive income ........................................................................................................................................................................ 12

Statement of financial position ................................................................................................................................................................................. 13

Statement of changes in equity ................................................................................................................................................................................. 14

Statement of cash flows ............................................................................................................................................................................................ 15

Notes to the financial statements .............................................................................................................................................................................. 16

Xtrackers (Jersey) ETC PLC

Directors and other information

Directors

Paul Michael Monahan

Vinod Kumar Rajput

Registered Office

IFC 5

St Helier

Jersey

JE1 1ST

Channel Islands

Corporate Services Provider and

Carbon Accounts Administrator

Apex Financial Services (Corporate) Limited

IFC 5, St Helier

Jersey

JE1 1ST

Channel Islands

Company Secretary

Apex Financial Services (Secretaries) Limited

IFC 5, St Helier

Jersey

JE1 1ST

Channel Islands

Determination Agent and Issuing Agent

Apex Fund Services (Ireland) Limited

Floor, Block 5

Irish Life Centre

Abbey Street Lower

Dublin

D01 P767

Ireland

Programme Administrator

DWS Investments UK Limited

21 Moorfields

London

EC2Y 9DB

United Kingdom

Listing Agent

Arthur Cox Listing Services Limited

Ten Earlsfort Terrace

Dublin

D02 T380

Ireland

Trustee

Apex Corporate Trustees (UK) Limited

6th Floor, 125 London Wall

London

EC2Y 5AS

United Kingdom

Paying Agent

Citibank, N.A., London Branch

Citigroup Centre

Canada Square

London

E14 5LB

United Kingdom

Custodian

European Depositary Bank S.A.

3, Rue Gabriel Lippmann

L-5365 Munsbach

R.C.S. Luxembourg B 10700

Carbon Counterparty

Standard Chartered Bank

1 Basinghall Avenue

London

EC2V 5DD

United Kingdom

Authorised Participants

Jane Street Financial Limited

30th Floor, 20 Fenchurch Street

London EC3M 3BY

United Kingdom

Flow Traders B.V.

Jacob Bontiusplaats 9

1018 LL Amsterdam

Netherlands

Independent Auditors

KPMG Channel Islands Limited

Chartered Accountants and Recognised Auditors

37 Esplanade

St Helier

Jersey JE4 8QW

Channel Islands

Xtrackers (Jersey) ETC PLC

Directors' report

The Board of Directors (the "Directors" or the “Board”)) present the Directors' report and audited financial statements of Xtrackers (Jersey) ETC

PLC (the “Company”) for the period from the date of incorporation 18 October 2022 to 31 December 2023.

Principal activities and business review

The Company was incorporated on 18 October 2022 as a public limited liability company in Jersey under the Companies (Jersey) Law 1991 with

registration number 145739. It has been established as a special purpose vehicle for the purpose of issuing asset backed securities. The Company was

dormant until the launch of the programme in quarter four of 2023 described below.

The principal activity of the Company, under the Secured Xtrackers (Jersey) ETC PLC Carbon Linked Securities Programme (the “Programme”),

is to issue from time to time series (each a "Series") of carbon ETC securities (the “Carbon ETC Securities”), where recourse in respect of each

Series is limited to the proceeds of enforcement of the security over each respective Series' assets.

The Company has established this Programme for the issue of Carbon ETC Securities whose return is linked to the price of specified allowances,

credits, permits, rights or similar assets which represent a volume of carbon dioxide equivalent or other greenhouse gas, which is issued, allocated,

created or recognised in accordance with the rules and regulations governing participation in a trading scheme for the transferring of such allowances,

credits, permits, rights, or similar assets (the “Allowance(s)”). As at the date of this approval, the only type of Allowance(s) that Carbon ETC

Securities issued under this Programme may be linked to is EU allowances (the “EUA(s)”). The Company may hold either (or a combination of)

EUAs allocated in Phase III (1 January 2013 to 31 December 2020) of the EU ETS or EUAs allocated in Phase IV (1 January 2021 to 31 December

2030) of the EU ETS.

The main assets of the Company in respect of a Series of Carbon ETC Securities are the EUAs held by the Company via the Custodian, and cash

held by the Company. The EUAs backing each Series of Carbon ETC Securities may be sold by the Company to service any payment due and payable

on the Carbon ETC Securities and to fund the payment of product fee to the Programme Administrator, which in turn shall be used by the Programme

Administrator to pay certain costs of the Programme and the Company more generally.

The Carbon ETC Securities are designed to provide purchasers with exposure to Allowance(s) of a specified type, without having to take delivery of

them. Each Series of Carbon ETC Securities relates to a number of Allowance(s) and each tranche of Carbon ETC Securities (the “Tranche”) has

an Allowance(s) entitlement per Carbon ETC Security specified in the relevant final terms (the “Final Terms”). On any particular day, the Carbon

ETC Security can be viewed as giving an exposure to a number of Allowance(s) – the amount payable to securityholders on final redemption or early

redemption of the relevant Carbon ETC Securities is linked to the value of the Allowance(s). In addition, the value per Carbon ETC Security is

similarly linked to the value of such Allowance(s). In order to back its obligations under the Carbon ETC Securities, the Company will seek to hold

enough Allowance(s) to meet its obligations under the Carbon ETC Securities. The precise number it holds at any time may be more or less than the

aggregate number of the Allowance(s) entitlement per Carbon ETC Security, reflecting the periodic payment of Product Fees.

Because the Company obtains its exposure to the Allowance(s) by investing directly in the relevant Allowance(s), these types of Carbon ETC

Securities are known as a replication exchange traded commodities. Upon maturity, the Carbon ETC Securities will pay an amount linked to the

performance of such Allowance(s) (being proceeds from the disposal of the relevant Underlying Allowance(s), subject to deduction of Product Fees).

In connection with a subscription of Carbon ETC Securities, the relevant number of Allowance(s) shall be delivered by the seed authorised participant

or an authorised participant (as applicable) to the secured series carbon account (the “Series Carbon Account”), on the original series issue date (in

respect of an initial issuance of a Series of Carbon ETC Securities). The obligations of the Company under the Carbon ETC Securities of a Series

will be secured in favour of the Trustee by an assignment by way of security of all the Company’s rights, title, interest and benefit present and future

against the Custodian. Subscription and redemption terms of the Carbon ETC Securities are disclosed in the notes of the financial statements.

A Series of Carbon ETC Securities may be listed on the official list of one or more of the following stock exchanges and be admitted to trading on

the regulated market or other main market thereof: Euronext Dublin, the Frankfurt Stock Exchange and/or such other stock exchanges and regulated

markets or main markets as may be agreed between the Company and the Programme Administrator. As of the date of approval of these financial

statements, the Carbon ETC Securities are listed on the Frankfurt Stock Exchange. The Carbon ETC Securities were admitted on the exchange as of

23 November 2023.

Key performance indicators

The Company is a Special Purpose Vehicle (the ''SPV'') whose sole business is the issue of asset-backed securities. The Company has established

a programme for the issue of Carbon ETC Securities whose return is linked to the performance of Allowance(s). Each series of Carbon ETC Securities

will be separate (or ‘ring-fenced’) from each other series of Carbon ETC Securities. The best benchmark is the price of the relevant Allowances in

which the proceeds of the Carbon ETC Securities are invested in. For all Series, the performance closely follows the movement in the Allowances

linked to the Series. To date only one Series has been issued and the relevant Allowances are EUAs.

The Directors confirm that the key performance indicators as disclosed below are those that are used to assess the performance of the Company.

Xtrackers (Jersey) ETC PLC

Directors' report (continued)

Key performance indicators (continued)

During the period:

 the net fair value gain on EUAs at fair value amounted to EUR 46,585;

 the net fair value loss on financial liabilities designated at fair value through profit or loss amounted to EUR 42,795; and

 there were two subscriptions in the following new Series of Carbon ETC Securities:

Maturity

date

CCY

Nominal

Series

Carbon ETC Securities

Sep

2100

EUR

,941

The prices of Allowance(s) are as follows:

Series

Allowance

CCY

Price per

EUA

as at

31 Dec 2023

Price per

EUA

as at

17 Nov 2023 -

date of

Series issue

Series 1 EUA EUR 77.25 76.28

The price of the EUAs have increased during the period.

As at 31 December 2023:

 The Company’s total Carbon ETC Securities issued had a fair value of EUR 3,858,710;

 The Company has invested in EUAs with a fair value of EUR 3,862,500 (includes EAUs in relation to the Product Fee);

 The net assets were EUR 2; and

 The Company had the following Carbon ETC Securities in issue:

Series

Description

Maturity

date

Ccy

Nominal

(in

units)

Allowances

held

Number of

Allowances

Carbon ETC Securities 30-Sep-2100

EUR

2,941 EUA 50,000

Future developments

The Directors expect that the present level of activity will be sustained for the foreseeable future. The Board will continue to seek new opportunities

for the Company and will continue to ensure proper management of the current portfolio of Series of the Company.

Going concern

The Company’s financial statements for the period ended 31 December 2023 have been prepared on a going concern basis. The Series of Carbon

ETC Securities is referenced to a specific asset and any loss derived from the asset will be ultimately borne by the relevant Carbon ETC

Securityholders. The Directors anticipate that assets are readily realisable and hence, will continue to generate enough cash flows on an ongoing basis

to meet the financial liabilities as they fall due. The Carbon ETC Securities in issue as at 31 December 2023 have a final maturity of 30 September

2100. The Directors do not foresee any material net redemptions in the next twelve months that would trigger going concern issues.

A high-level analysis was made on the liquidity and performance of the Company following the financial period end 31 December 2023. The Directors

note that there has been a positive change in the value of the EUAs since the launch of the Programme and the level of activity has remained stable

post the financial period end. The Directors have also noted that the Programme Administrator has taken measures to ensure business continuity.

Russia-Ukraine conflict

Russia began an invasion of Ukraine on 24 February 2022. None of the Authorised Participants in the primary market are Russian entities and hence

would not be subject to the Russian sanctions. The Directors also assessed that none of the operations of the counterparties are based in Ukraine. The

Directors will continue to monitor the situation and appropriate steps will be taken for the smooth running of the Companies' business. There is no

impact on the ability of investors to redeem due to the sanctions. No other geopolitical matters have been noted to have an impact on the going concern.

Business risks and principal uncertainties

The Company is subject to various risks. The key risks facing the Company relate to their use of financial instruments, their exposure to EUAs and

other risks (i.e. market risk, credit risk, liquidity risk, operational risk and climate risk) arising from the EUAs which are set out in note 15 to the

financial statements.

Xtrackers (Jersey) ETC PLC

Directors' report(continued)

Business risks and principal uncertainties (continued)

Climate risk

The Directors acknowledge that climate change is an emerging risk impacting the global economy and will continue to be of interest to all stakeholders

with a focus on how climate change is expected to impact the societal response and the regulatory environment in the future. However, having

considered such factors relating to climate change. While the demand for the Allowances will be correlated to climate change, the Directors have

determined that there are no immediate impacts of climate change on the business operations of the Company. Further details are provided in note

15 to the financial statements.

Results and dividends for the period

The results for the period are set out on page 12. The Directors do not recommend the payment of a dividend for the period under review.

Changes in Directors, Secretary and Registered Office

There has been no change in Directors, Company Secretary and Registered Office during the period.

Directors, Secretary and their interests

None of the Directors or the Company Secretary who held office on 31 December 2023 held any shares or Carbon ETC Securities in the Company

at that date, or during the period. There were no contracts of any significance in relation to the business of the Company in which the Directors had

any interest. As disclosed in note 19, Related Party Transactions, Paul Michael Monahan and Vinod Kumar Rajput, directors of the Company are

employees of the Corporate Services Provider. Apex Financial Services (Nominees) Limited and Apex Financial Services (Nominees 2) Limited are

affiliates of the Corporate Services Provider and Carbon Accounts Administrator. See note 19 for full details of the relationships entered into between

the Company and its related parties.

Shares and shareholders

The issued share capital of the Company is GBP 2 divided into 2 ordinary shares of GBP 1 each (the "Shares"). The Company is owned by two

nominee companies, which hold the issued share capital for the benefit of a purpose trust established pursuant to a declaration of trust on 18 January

2023. The trustee of the purpose trust is Apex Financial Services (Trustees) Limited, and the enforcer is Apex (EP) Limited (“AEPL”). As the issued

ordinary shares are beneficially held by the purpose trust, AEPL is considered to be the ‘controller’ of the Company as the purpose trust gives them

the ability to appoint and/or remove Apex Financial Services (Trustees) Limited. AEPL is a subsidiary of Apex Financial Services Jersey Limited,

which is regulated by the Jersey Financial Services Commission.

Subsequent events

Subsequent events have been disclosed in note 22 to the financial statements.

Independent auditors

In accordance with the Companies (Jersey) Law 1991, KPMG Channel Islands Limited, Chartered Accountants and Recognised Auditors have been

appointed as the Company’s independent auditors and, have expressed their willingness to continue in office.

On behalf of the Board

Director

Date: 24 April 2024

Xtrackers (Jersey) ETC PLC

Statement of Directors' responsibilities

The Directors are responsible for preparing the Directors’ report and financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial period. Under that law they are required to prepare the

financial statements in accordance with International Financial Reporting Standards as adopted by the EU 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 its profit or loss for that period. In preparing these financial statements, the Directors are required to:

 select suitable accounting policies and then apply them consistently;

 make judgements and estimates that are reasonable, relevant and reliable;

 state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the

financial statements;

 assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

 use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic

alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose

with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its 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 also required by the Transparency (Directive 2004/109/EC) (Amendment) (No. 2) Regulations 2015 (the ''Regulations'') to

include a Directors’ report containing a fair review of the business and a description of the principal risks and uncertainties facing the Company.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Programme Administrator’s

website. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement of the Directors in respect of the Directors’ Report

We confirm that to the best of our knowledge:

 the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets,

liabilities, financial position and profit or loss of the Company; and

 the Directors’ report includes a fair review of the development and performance of the business and the position of the Company, together

with a description of the principal risks and uncertainties that they face. The principal risks facing the Company are outlined in note 15 of

the financial statements.

We consider the Directors’ report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information

necessary for shareholders to assess the Company’s position and performance, business model and strategy.

On behalf of the Board

Director

Date: 24 April 2024

Independent Auditor's Report to the Members of Xtrackers

(Jersey) ETC PLC

Our opinion is unmodified

We have audited the financial statements of Xtrackers (Jersey) ETC PLC (the “Company”), which comprise the statement

of financial position as at 31 December 2023, the statements of comprehensive income, changes in equity and cash flows

for the period from 18 October 2022 (date of incorporation) to 31 December 2023, and notes, comprising material

accounting policies and other explanatory information.

In our opinion, the accompanying financial statements:

• give a true and fair view of the financial position of the Company as at 31 December 2023, and of the Company’s

financial performance and cash flows for the period from 18 October 2022 (date of incorporation) to 31 December

2023.

• are prepared in accordance with International Financial Reporting Standards as adopted by the EU; and

• have been properly prepared in accordance with the Companies (Jersey) Law, 1991.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.

Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of

the Company in accordance with, UK ethical requirements including the FRC Ethical Standard as required by the Crown

Dependencies' Audit Rules and Guidance. We believe that the audit evidence we have obtained is a sufficient and

appropriate basis for our opinion.

Key audit matters: our assessment of the risks of material misstatement

Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of

the financial statements and include the most significant assessed risks of material misstatement (whether or not due to

fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of

resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of

our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate

opinion on these matters. In arriving at our audit opinion above, the key audit matters were as follows:

The risk

Our response

Valuation of EU

Allowances at fair value

(EUAs)

€3,858,710

Refer to note 3(e)

accounting policy and note

9 disclosures

Basis:

EUAs at fair value represent 99.9% of the

Company’s total assets.

The EUAs act as collateral for the financial

liabilities designated at fair value through

profit or loss (“the Carbon Securities”)

issued by the Company. The EUAs are

accounted for at fair value.

The Company determines fair value by

revaluing the quantity of EUAs held at the

reporting date to the last market prices

published by the sources described in the

financial statements.

Risk:

The reported fair value of EUAs held may

be materially misstated and is a significant

Our audit procedures included:

• Assessed the design and

implementation of controls over

valuation of EUAs.

• Engaged our valuation specialists

(

iRadar) to independently price the

EUAs to a third party pricing

source, recalculate the value

taking into consideration quantity

held and, compared the

recalculated values to those

determined by the Company.

• Assessed the fair value

sclosures in the financial

statements for compliance with

IFRS requirements.