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Name | Symbol | Market | Type |
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Wt Wticruoil3x | LSE:3LOI | London | Exchange Traded Fund |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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-98.50 | -3.04% | 3,140.50 | 3,111.00 | 3,170.00 | 3,177.50 | 3,063.50 | 3,083.00 | 424 | 16:29:59 |
TIDM3LOI Boost Issuer plc Financial statements For the Year Ended 31 December 2016 Registered Number: 515981 BOOST ISSUER plc FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER 2016 CONTENTS PAGE DIRECTORS AND OTHER INFORMATION 2 - 3 DIRECTORS' REPORT 4 - 10 DIRECTORS' RESPONSIBILITIES STATEMENT 11 INDEPENT AUDITOR'S REPORT 12 - 13 STATEMENT OF COMPREHENSIVE INCOME 14 STATEMENT OF FINANCIAL POSITION 15 STATEMENT OF CHANGES IN EQUITY 16 STATEMENT OF CASH FLOWS 17 NOTES TO THE FINANCIAL STATEMENTS 18 - 39 BOOST ISSUER plc DIRECTORS AND OTHER INFORMATION DIRECTORS John Walsh (Irish) (Independent and Non-Executive) Lisa Hand (Irish) (Independent and Non-Executive) (appointed 15 November 2016) David Abner (American) (Independent and Non-Executive) (appointed 4 July 2016) Hector McNeil (Brittish) (Independent and Non-Executive) (resigned 4 July 2016) Marion Walsh (Irish) (Independent and Non-Executive) (resigned 15 November 2016) REGISTERED OFFICE 2 Grand Canal Square Grand Canal Harbour Dublin 2 TRUSTEE AND SECURITY TRUSTEE The Law Debenture Trust Corporation plc Fifth Floor, 100 Wood Street London EC2V 7EX United Kingdom ISSUING & PAYING AGENT ("IPA") Capita International Financial Services (Ireland) Limited 2 Grand Canal Square Grand Canal Harbour Dublin 2 MANAGER Boost Management Limited 12 Castle Street St. Helier Jersey JE2 3RT SECRETARY Capita International Financial Services (Ireland) Limited 2 Grand Canal Square Grand Canal Harbour Dublin 2 REGISTRAR Capita IRG Trustees Limited The Registry, 34 Beckenham Road Beckenham Kent BR3 4TU United Kingdom INDEPENT AUDITORS Ernst & Young Ernst & Young Building Harcourt Centre Harcourt Street Dublin 2 BOOST ISSUER plc DIRECTORS AND OTHER INFORMATION (continued) BANKERS Allied Irish Banks plc Bankcentre Ballsbridge Dublin 4 SOLICITORS Matheson 70 Sir John Rogerson's Quay Dublin 2 INITIAL SWAP PROVIDER ("Swap Provider") BNP Paribas Arbitrage S.N.C. 160-162 Boulevard Macdonald 75019 Paris France CUSTODIAN The Bank of New York Mellon One Canada Square London E14 5AL Registered Number: 515981 BOOST ISSUER plc DIRECTORS' REPORT The Directors present their annual report and audited financial statements of Boost Issuer PLC (the "Company" or the "Issuer") for the year ended 31 December 2016. PRINCIPAL ACTIVITIES AND BUSINESS REVIEW The Company is a limited liability company, incorporated in Ireland on 30 July 2012 under Irish Company Law. The Company is an orphan vehicle, with the shares held for the benefit of a charitable trust (see note 9). The Company is registered in Ireland as a Section 110 vehicle. The Company has been established as a special purpose vehicle for the purpose of issuing exchange traded securities. The Company commenced trading on 5 December 2012. The Company established a Collateralised ETP Securities Programme (the "Programme") under which the Company issues, on an ongoing basis, collateralised exchange traded securities (the "ETPs") of different classes (each a "Class") linked to indices providing exposure to a range of asset classes including equities, commodities, fixed income and currencies. The ETP Securities may have long or short, and leveraged or unleveraged, exposure to the daily performance of the referenced index. Each Class constitutes limited recourse obligations of the Company, secured on and payable solely from the assets constituting the ETP in respect of such Class. Each Class of ETPs may comprise one or more tranches. The ETPs have been listed for trading on the London Stock Exchange, Frankfurt Stock Exchange and/or Borsa Italiana and applications may be made to other European Stock Exchanges. The Company uses the net proceeds of the issuance of ETPs to enter into Total Return Swap Transactions ("TRS") to hedge its payment obligations in respect of each Class of the ETPs with one or more Swap Providers once the Swap Provider has delivered eligible collateral. The TRS for each Class of ETPs will produce cash flows to service all of the Company's payment obligations in respect of that Class. Cash flows are only as a result of subscriptions and redemptions of ETPs and expenses incurred. A movement in collateral does not generate a cash flow. The proceeds of the issuance of a tranche of ETPs of a Class will be paid by the Issuer to one or more of the Swap Providers with whom the Issuer has entered into a TRS in connection with that Class, in order to increase the aggregate number of Index Units in respect of the TRS entered into by the Issuer in relation to that Class in proportion to the increase in the number of ETPs of that Class then outstanding. The Issuer's payment obligations in respect of the ETPs of a Class will be covered entirely from payments received by the Issuer from the Swap Provider(s) in respect of such TRS(s). Pursuant to the terms of each Credit Support Document, the Issuer will be obliged to pay amounts equal to each distribution made on collateral held by it to the relevant Swap Provider upon receipt. The ETPs do not bear interest at a prescribed rate. The return (if any) on the ETPs shall be calculated in accordance with the redemption provisions. Four new products were launched during 2016, namely Boost Emerging Markets 3x Leverage Daily ETP, Boost Emerging Markets 3x Short Daily ETP, Boost S&P 500 VIX Short-term Futures 2.25x Leverage Daily ETP and Boost FTSE MIB Banks ETP. BOOST ISSUER plc DIRECTORS' REPORT (continued) The following Classes of ETPs were in issue at 31 December 2016: ETP ISIN Launch Date BOOST FTSE 100 3X LEVERAGE DAILY ETP IE00B88D2999 06 December 2012 BOOST FTSE 100 3X SHORT DAILY ETP IE00B7VB3908 06 December 2012 BOOST EURO STOXX 50 3X LEVERAGE DAILY ETP IE00B7SD4R47 12 December 2012 BOOST EURO STOXX 50 3X SHORT DAILY ETP IE00B8JF9153 12 December 2012 BOOST LEVDAX 3X DAILY ETP IE00B878KX55 12 December 2012 BOOST SHORTDAX 3X DAILY ETP IE00B8GKPP93 12 December 2012 BOOST US LARGE CAP 3X LEVERAGE DAILY ETP IE00B7Y34M31 12 December 2012 BOOST US LARGE CAP 3X SHORT DAILY ETP IE00B8K7KM88 12 December 2012 BOOST NASDAQ 100 3X LEVERAGE DAILY ETP IE00B8W5C578 12 December 2012 BOOST NASDAQ 100 3X SHORT DAILY ETP IE00B8VZVH32 12 December 2012 BOOST WTI OIL 3X LEVERAGE DAILY ETP IE00B7ZQC614 20 December 2012 BOOST WTI OIL 3X SHORT DAILY ETP IE00B7SX5Y86 20 December 2012 BOOST GOLD 3X LEVERAGE DAILY ETP IE00B8HGT870 20 December 2012 BOOST GOLD 3X SHORT DAILY ETP IE00B6X4BP29 20 December 2012 BOOST COPPER 3X LEVERAGE DAILY ETP IE00B8JVMZ80 20 December 2012 BOOST COPPER 3X SHORT DAILY ETP IE00B8KD3F05 20 December 2012 BOOST NATURAL GAS 3X LEVERAGE DAILY ETP IE00B8VC8061 20 December 2012 BOOST NATURAL GAS 3X SHORT DAILY ETP IE00B76BRD76 20 December 2012 BOOST SILVER 3X LEVERAGE DAILY ETP IE00B7XD2195 20 December 2012 BOOST SILVER 3X SHORT DAILY ETP IE00B8JG1787 20 December 2012 BOOST FTSE 100 2X SHORT DAILY ETP IE00B94QKF15 05 July 2013 BOOST FTSE 100 1X SHORT DAILY ETP IE00B94QKG22 05 July 2013 BOOST FTSE 100 2X LEVERAGE DAILY ETP IE00B94QKC83 05 July 2013 BOOST FTSE 250 1X SHORT DAILY ETP IE00BBGBF313 05 July 2013 BOOST FTSE 250 2X LEVERAGE DAILY ETP IE00B94QKJ52 05 July 2013 BOOST TOPIX 1X SHORT DAILY ETP IE00BBGBF420 05 July 2013 BOOST TOPIX 2X LEVERAGE DAILY ETP IE00BBGBF537 05 July 2013 BOOST PALLADIUM 1X SHORT DAILY ETP IE00B94QLR02 05 July 2013 BOOST PALLADIUM 2X LEVERAGE DAILY ETP IE00B94QLN63 05 July 2013 BOOST NATURAL GAS 2X SHORT DAILY ETP IE00B94QL251 05 July 2013 BOOST NATURAL GAS 2X LEVERAGE DAILY ETP IE00B94QKX96 05 July 2013 BOOST GOLD 2X SHORT DAILY ETP IE00B94QKT50 05 July 2013 BOOST GOLD 1X SHORT DAILY ETP IE00B94QKW89 05 July 2013 BOOST GOLD 2X LEVERAGE DAILY ETP IE00B94QKS44 05 July 2013
BOOST SILVER 2X SHORT DAILY ETP IE00B94QL921 05 July 2013 BOOST SILVER 2X LEVERAGE DAILY ETP IE00B94QL699 05 July 2013 BOOST FTSE MIB 3X LEVERAGE DAILY ETP IE00B8NB3063 31 October 2013 BOOST ISSUER plc DIRECTORS' REPORT (continued) ETP ISIN Launch Date BOOST FTSE MIB 3X SHORT DAILY ETP IE00B873CW36 31 October 2013 BOOST BTP 10Y 3X SHORT DAILY ETP IE00BKS8QM96 01 August 2014 BOOST BUND 10Y 3x SHORT DAILY ETP IE00BKS8QN04 01 August 2014 BOOST US TREASURIES 10Y 3X SHORT DAILY ETP IE00BKS8QT65 01 August 2014 BOOST GILTS 10Y 3X SHORT DAILY ETP IE00BKS8QQ35 05 August 2014 BOOST GILTS 10Y 3X LEVERAGE DAILY ETP IE00BKT09479 25 November 2014 BOOST 5X LONG USD SHORT EUR DAILY ETP IE00BLNMQS92 09 December 2014 BOOST 5X SHORT USD LONG EUR DAILY ETP IE00BLNMQT00 09 December 2014 BOOST EURO STOXX BANKS 3X LEVERAGE DAILY ETP IE00BLS09N40 09 December 2014 BOOST EURO STOXX BANKS 3X SHORT DAILY ETP IE00BLS09P63 09 December 2014 BOOST BTP 10Y 3X LEVERAGE DAILY ETP IE00BKT09149 09 December 2014 BOOST BUND 10Y 3X LEVERAGE DAILY ETP IE00BKT09255 09 December 2014 BOOST US TREASURIES 10Y 3X LEVERAGE DAILY ETP IE00BKT09032 09 December 2014 BOOST WTI OIL ETC IE00BVFZGC04 09 April 2015 BOOST BRENT OIL ETC IE00BVFZGD11 09 April 2015 BOOST GOLD ETC IE00BVFZGK87 09 April 2015 BOOST NATURAL GAS ETC IE00BVFZGL94 09 April 2015 BOOST WTI OIL 1X SHORT DAILY ETP IE00BVFZGF35 09 April 2015 BOOST WTI OIL 2X LEVERAGE DAILY ETP IE00BVFZGG42 09 April 2015 BOOST WTI OIL 2X SHORT DAILY ETP IE00BVFZGH58 09 April 2015 BOOST BTP 10Y 5X SHORT DAILY ETP IE00BYNXNS22 15 July 2015 BOOST BUND 10Y 5X SHORT DAILY ETP IE00BYNXPH56 15 July 2015 BOOST US TREASURIES 10Y 5X SHORT DAILY ETP IE00BYNXPJ70 15 July 2015 BOOST LONG USD SHORT EUR 4X DAILY ETP IE00BYNXPK85 15 July 2015 BOOST SHORT USD LONG EUR 4X DAILY ETP IE00BYNXPM00 15 July 2015 BOOST BRENT OIL 3X LEVERAGE DAILY ETP IE00BYTYHS72 16 October 2015 BOOST BRENT OIL 3X SHORT DAILY ETP IE00BYTYHR65 16 October 2015 BOOST EMERGING MARKETS 3X LEVERAGE DAILY ETP IE00BYTYHN28 15 March 2016 BOOST EMERGING MARKETS 3X SHORT DAILY ETP IE00BYTYHM11 15 March 2016 BOOST S&P 500 VIX SHORT-TERM FUTURES 2.25X LEVERAGE IE00BYTYHQ58 15 March DAILY ETP 2016 BOOST FTSE MIB BANKS ETP IE00BYMB4Q22 24 November 2016 At 31 December 2016, the total fair value of ETPs in issue was EUR 605,550,151 (2015: EUR 412,182,915). At 31 December 2016, the total fair value of TRS instruments entered into was EUR 605,550,151 (2015: EUR 412,182,915). BOOST ISSUER plc DIRECTORS' REPORT (continued) INVESTMENT MANAGER'S REPORT Listings During the year, the Company had the following number of Classes, in aggregate, in issue, in the following exchanges: 2016 London Stock Frankfurt Stock Classes Exchange Borsa Italiana Exchange Total Commodity ETPs 28 23 17 28 Equity ETPs 19 15 12 24 Fixed Income ETPs 3 9 2 11 FX ETPs 0 4 2 4 Other ETPs 1 1 1 1 Total Classes Listed 51 52 34 68 2015 London Stock Frankfurt Stock Classes Exchange Borsa Italiana Exchange Total Commodity ETPs 28 23 12 28 Equity ETPs 19 12 10 21 Fixed Income ETPs 3 9 2 11 FX ETPs 0 4 2 4 Total Classes Listed 51 48 26 64 AUM As at 31 December 2016 the total assets under management amounted to EUR 605,550,151 (2015: EUR 412,182,915). Fees During the period ended 31 December 2016, the Company generated income as follows: 2016 2015 EUR EUR Management Fees 4,132,907 2,711,529 Order Fees 19,850 19,600 Boost Management Limited Fees 2,107 1,836 Total Fee Income 4,154,864 2,732,965 Under the terms of the agreement with Boost Management Limited, the Company accrued expenses equal to the management fees and, after taking into account other operating expenses, the Company's operating profit before tax for the year ended 31 December 2016 was EUR 1,000 (2015: EUR 1,000). FUTURE DEVELOPMENTS The Directors expect the current level of activity to continue to grow into the foreseeable future. The Directors are satisfied that the derivative financial instruments in place appropriately manage the risk exposure of the Company as detailed in note 11. BOOST ISSUER plc DIRECTORS' REPORT (continued) RESULTS AND DIVIDS FOR THE PERIOD The results for the year are set out on page 14. DIVIDS The Directors do not recommend the payment of a dividend (2015: nil). DIRECTORS AND SECRETARY Mr. Hector McNeil resigned as a director on 4 July 2016 and was replaced by Mr. David Abner with effect from 4 July 2016. Ms. Marion Walsh resigned as a director on 15 November 2016 and was replaced by Ms. Lisa Hand with effect from 15 November 2016. There have been no other appointments or resignations of Directors during or subsequent to the year. DIRECTORS, SECRETARY AND THEIR INTERESTS As at 31 December 2016 or at any time during the year, the Directors and the secretary did not hold any interests in the shares and ETPs of the Company (2015: none). PRINCIPAL RISKS AND UNCERTAINTIES The key risks to the business relate to the use of financial instruments. A summary of these risks are set out in note 11 to the financial statements. POST BALANCE SHEET EVENTS The post balance sheet events are disclosed in note 12 to the financial statements. ACCOUNTING RECORDS The Directors are responsible for ensuring that accounting records, as outlined in Section 281 to 285 of the Companies Act 2014 are kept by the Company. To achieve this, the Directors have appointed professionally qualified accounting personnel with appropriate expertise and have provided adequate resources to the finance function who ensure that the requirements of Sections 281-285 of the Companies Act 2014 are complied with. The books of account are maintained at the Company's registered office at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2. GOING CONCERN The Directors believe the Company is a going concern. The nature of the Company's business dictates that the outstanding ETPs may be
redeemed at any time by the holders thereof and in certain circumstances may be redeemed by the Company. As the redemption of ETPs will coincide with the termination of an equal amount of TRS, no liquidity risk is considered to arise. All other liabilities of the Company are being met by Boost Management Ltd; therefore the Directors consider the Company to be a going concern and have prepared the financial statements on this basis. BOOST ISSUER plc DIRECTORS' REPORT (continued) CORPORATE GOVERNANCE STATEMENT INTRODUCTION The Company is subject to and complies with the Irish statute comprising the Companies Act 2014 and the listing rules of the London Stock Exchange, Frankfurt Stock Exchange and Borsa Italiana which are applicable to companies listing instruments like the ETPs. No Director has a significant direct or indirect holding of securities in the Company. No Director has any special rights of control over the Company's share capital. There are no restrictions on voting rights. Appointment and replacement of Directors and Amendments in the Articles of Association With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association and Irish Statute comprising the Companies Act 2014. The Articles of Association themselves may be amended by special resolution of the shareholders. Powers of Directors The Board is responsible for managing the business affairs of the Company in accordance with the Articles of Association. The Directors may delegate certain functions to the Issuing and Paying Agent ("IPA") and other parties, subject to the supervision and direction of the Directors. The Directors have delegated the day to day administration of the Company to the IPA. Financial Reporting Process The Board of Directors (the "Board") is responsible for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial reporting process. Such systems are designed to manage rather than eliminate the risk of failure to achieve the Company's financial reporting objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The Board has established processes regarding internal control and risk management systems to ensure its effective oversight of the financial reporting process. These include appointing the IPA to maintain the accounting records of the Company independently of the Manager. The IPA is contractually obliged to maintain proper books and records as required by the Corporate Administration agreement. The IPA is also contractually obliged to prepare for review and approval by the Board the annual report including financial statements intended to give a true and fair view. The Board evaluates and discusses significant accounting and reporting issues as the need arises. From time to time the Board also examines and evaluates the IPA's financial accounting and reporting routines and monitors and evaluates the external auditors' performance, qualifications and independence. The IPA has operating responsibility for internal control in relation to the financial reporting process and the IPA's report to the Board. Risk Assessment The Board is responsible for assessing the risk of irregularities whether caused by fraud or error in financial reporting and ensuring the processes are in place for the timely identification of internal and external matters with a potential effect on financial reporting. The Board has also put in place processes to identify changes in accounting rules and recommendations and to ensure that these changes are accurately reflected in the Company's financial statements. Control Activities The IPA is contractually obliged to design and maintain control structures to manage the risks which the Board judges to be significant for internal control over financial reporting. These control structures include appropriate division of responsibilities and specific control activities aimed at detecting or preventing the risk of significant deficiencies in financial reporting for every significant account in the financial statements and the related ETPs' in the Company's annual report. BOOST ISSUER plc DIRECTORS' REPORT (continued) Transfer of shares The instrument of transfer of any share shall be executed by or on behalf of the transferor and, in cases where the share is not fully paid, by or on behalf of the transferee. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered on the register in respect thereof. The Directors in their absolute discretion and without assigning any reason therefore may decline to register any transfer of a share. If the Directors refuse to register a transfer they shall, within two months after the date on which the transfer was lodged with the Company, send to the transferee notice of the refusal. Audit Committee The sole business of the Company relates to the issuance of exchange traded securities. Given the functions performed by the IPA and the limited recourse nature of the securities issued by the Company, the Board of Directors has concluded that there is currently no need for the Company to have a separate audit committee in order for the Board to perform effective monitoring and oversight of the internal controls and risk management systems of the Company in relation to the financial reporting process. Accordingly the Company has availed itself of the exemption under 91(9) (d) of S.I. No. 220/2010 - European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010. AUDITORS In accordance with Section 383 (2) of the Companies Act, 2014, the auditors, Ernst & Young, Chartered Accountants and registered Auditors have expressed their willingness to continue in office. RELEVANT AUDIT INFORMATION As at the date this Directors' Report was approved and signed each Director is satisfied that: 1. there is no relevant audit information of which the Company's statutory auditors are unaware; 2. s/he has taken all the steps that he or she ought to have taken as a director in order to make herself or himself aware of any relevant audit information and to establish that the Company's statutory auditors are aware of that information; and 3. where "relevant audit information" means information needed by the Company's statutory auditors in connection with preparing their report. DIRECTORS COMPLIANCE STATEMENT The Directors are responsible for securing the company's compliance with its "relevant obligations" undersection 225 of the Companies Act 2014 (as defined in section 225(1) thereof). As required under section 225(3), the Directors confirm that: 1. a compliance policy statement has been drawn up setting out the Company's policies (that, in the Directors' opinion, are appropriate to the Company) respecting compliance by the Company with its relevant obligations'; 2. appropriate arrangements or structures are in place that, in the Directors' opinion, are designed to secure material compliance with the Company's relevant obligations; and 3. a review has been conducted during the financial year ending 31 December 2016 of the arrangements or structures referred to in paragraph (b) above. Approved and authorised for issue on behalf of the Board: ________________________ _______________________ John Walsh Lisa Hand Director Director Date: 27 April 2017 BOOST ISSUER plc DIRECTORS' RESPONSIBILITIES STATEMENT The Directors are responsible for preparing the Directors' Report and financial statements, in accordance with applicable law and regulations. Irish Company law requires the Directors to prepare financial statements giving a true and fair view of the state of affairs of the Company and the profit or loss of the Company for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU. 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 assets, liabilities and financial position, of the Company, and otherwise comply with the Companies Act 2014. ln preparing the financial statements, the Directors are required to: -- select suitable accounting policies and then apply them consistently; -- make judgements and estimates that are reasonable and prudent; -- state whether the financial statements have been prepared in accordance with IFRS and ensure that they contain the additional information required by the Companies Act 2014; and -- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors are responsible for ensuring that the Company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the Company, enable at any time the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy, enable them to ensure that the financial statements and Directors' Report comply with the Companies Act 2014 and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are also responsible for preparing a Directors' Report that complies with the requirements of the Companies Act 2014. Approved and authorised for issue on behalf of the Board: ________________________ _______________________ John Walsh Lisa Hand Director Director Date: 27 April 2017 INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF BOOST ISSUER PLC We have audited the financial statements of Boost Issuer plc for the year ended 31 December 2016 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flow and the related notes 1 to 15. The financial reporting framework that has been applied in their preparation is Irish law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2014. This report is made solely to the company's members, as a body, in accordance with section 391 of the Companies Act 2014. 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. Respective responsibilities of directors and auditors As explained more fully in the Directors' Responsibilities Statement set out on page 11, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014. Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Directors' Report and the Directors' Responsibilities Statement to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Continued /... INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF BOOST ISSUER PLC (Continued) Opinion on financial statements In our opinion the financial statements: -- give a true and fair view of the assets, liabilities and financial position of the company as at 31 December 2016 and of its profit for the year then ended; -- have been properly prepared in accordance with IFRSs as adopted by the European Union as applied in accordance with the provisions of the Companies Act 2014; and -- have been properly prepared in accordance with the requirements of the Companies Act 2014. Matters on which we are required to report by the Companies Act 2014 -- We have obtained all the information and explanations which we consider necessary for the purposes of our audit. -- In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and properly audited. -- The financial statements are in agreement with the accounting records. -- In our opinion, the information given in the directors' report is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of sections 305 to 312 of the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of directors' remuneration and transactions specified by law are not made. Lisa Kealy for and on behalf of Ernst & Young Chartered Accountants and Statutory Audit Firm Dublin Date BOOST ISSUER plc STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31 DECEMBER 2016 Year Year Note ended ended 31 Dec 2016 31 Dec 2015 EUR EUR Revenue 3 4,154,864 2,732,965 Realised gains on financial liabilities designated at FV through the profit or loss 155,335,883 68,537,123 Realised (losses) on financial assets designated at FV through profit or loss (155,335,883) (68,537,123) Unrealised (depreciation) / appreciation on financial liabilities designated at FV through the profit or loss (175,771,465) 160,199,037 Unrealised appreciation / (depreciation) on financial assets designated at FV through the profit or loss 175,771,465 (160,199,037) Operating expenses 4 (4,153,864) (2,731,965) Other comprehensive income - - Operating Profit before Tax 1,000 1,000 Tax on profit on ordinary activities 5 (250) (250) Total Comprehensive Income 750 750 All of the items dealt with in arriving at the profit for the year are from continuing operations. The accompanying Notes form an integral part of the Statement of Comprehensive Income BOOST ISSUER plc STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 As at As at Note 31 Dec 2016 31 Dec 2015 EUR EUR Assets Cash and cash equivalents 11,084 10,611 Financial Assets at Fair Value through profit or loss 6 605,550,151 412,182,915 Debtors: (Amounts falling due within one year) 7 460,743 320,589 Total assets 606,021,978 412,514,115 Liabilities Financial Liabilities at Fair Value through profit or loss 8 6 605,550,151 412,182,915 Other Payables 7 8 458,839 318,962 Total liabilities 606,008,990 412,501,877 Total assets less total liabilities 12,988 12,238 Share capital and Retained earnings Share capital - equity 9 10,000 10,000 Retained earnings 2,988 2,238 Total shareholders' funds 12,988 12,238 The financial statements were approved by the Board of Directors on 27 April 2017 and signed on its behalf by: ___________________________ ___________________________ John Walsh Lisa Hand Director Director The accompanying Notes form an integral part of the Statement of Financial Position BOOST ISSUER plc STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 DECEMBER 2016 Share capital Retained earnings Total equity EUR EUR EUR As at 31 December 2015 10,000 2,238 12,238 Total comprehensive income - 750 750 Balance at 31 December 2016 10,000 2,988 12,988 Share capital Retained earnings Total equity EUR EUR EUR As at 31 December 2014 10,000 1,488 11,488 Total comprehensive income - 750 750 Balance at 31 December 2015 10,000 2,238 12,238
The accompanying Notes form an integral part of these financial statements BOOST ISSUER plc STATEMENT OF CASH FLOWS FOR THE YEARED 31 DECEMBER 2016 Note Year ended Year ended 31 Dec 2016 31 Dec 2015 EUR EUR Adjustments to reconcile total comprehensive income to net cash used in operating activities Total Comprehensive Income 750 750 Realised gains on financial liabilities designated at fair value through the profit or loss (155,335,883) (68,537,123) Realised losses on financial assets designated at fair value through profit or loss 155,335,883 68,537,123 Unrealised depreciation on financial liabilities designated at fair value through the profit or loss (175,771,465) 160,199,037 Unrealised appreciation on financial assets designated at fair value through the profit or loss 175,771,465 (160,199,037) Executions during the period (1,827,888,828) (1,812,355,061) Terminations during the period 1,656,081,875 1,317,177,789 Increase in debtors (140,154) (205,137) Increase in creditors 139,877 202,216 Net cash used in operating activities (171,806,480) (495,179,443) Cash flows from financing activities Issued during the period 1,827,888,828 1,812,355,061 Redemptions during the period (1,656,081,875) (1,317,177,789) Net cash provided in financing activities 171,806,953 495,177,272 Net Increase/(Decrease) in cash and cash equivalents 473 (2,171) Cash and cash equivalents at beginning of the period 10,611 12,782 Cash and cash equivalents at end of the period 11,084 10,611 The accompanying Notes form an integral part of these financial statements BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 1. GENERAL INFORMATION Boost Issuer plc (the "Company") was incorporated on 30 July 2012 in the Republic of Ireland with registered number 515981. The registered office of the Company is 2 Grand Canal Square, Grand Canal Harbour, Dublin 2. The Company commenced trading on 5 December 2012. The Company is a special purpose company which has been established for the purpose of issuing exchange traded securities linked to different indices providing exposure to a range of asset classes including equities, commodities, currencies and fixed income. The Company has no direct employees (2015: Nil). The Company established a Collateralised ETP Securities Programme under which the Company issues on an ongoing basis collateralised exchange traded securities (the "ETPs") of different classes (each a "Class") linked to indices providing exposure to a range of asset classes including equities, commodities, fixed income and currencies. The ETP Securities may have long or short, and leveraged or unleveraged, exposure to the daily performance of the referenced index. During the year the Company issued ETPs under the terms of the Collateralised ETP Securities Programme prospectus. The Company's principal activity is the listing and issue of ETPs. These securities are issued as demand requires. The Company purchases a matching TRS from swap provider(s) to hedge its liabilities and ensure the assets can service its liabilities. The number and terms of ETP Securities outstanding will match the number and terms of ETP Swap Contracts so that the obligations of Boost and the Swap Provider (the "SP") match. The SP will use the same pricing formulae as the Determination Agent (DA) so both the DA and the SP should be able to calculate the same price independently of each other - the price of an ETP Swap Contract will equal the price of an ETP Security. Boost Management Limited supplied and/or arranged for the supply of all administrative services to the Company and paid all management and administration costs of the Company, in return for which the Company pays Boost Management Limited a Management Fee. The Company considers the capital management and its current capital resources to be adequate to maintain the on-going listing and issue of ETPs. ETPs had been issued through series in Euro, US Dollar, Pound Sterling and Japanese Yen. All ETPs in issue at 31 December 2016 are listed on the main market of the London Stock Exchange, Frankfurt Stock Exchange and/or on the Borsa Italiana. 2. SIGNIFICANT ACCOUNTING POLICIES (a) Going Concern The nature of the Company's business dictates that the outstanding ETPs may be redeemed at any time by the holders thereof and in certain circumstances may be redeemed by the Company. As the redemption of ETPs will coincide with the termination of an equal amount of TRS, no liquidity risk is considered to arise. All other liabilities of the Company are being met by Boost Management Ltd. Management have confirmed that the business is running in accordance with its business plan therefore the Directors consider the Company to be a going concern and have prepared the financial statements on this basis. (b) Basis of preparation The financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, and comply with those parts of the Companies Act, 2014 applicable to Companies reporting under IFRS. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (c) Basis of measurement The financial statements have been prepared on the historical cost basis except financial assets and liabilities designated at fair value through profit or loss which are measured at fair value. Standards issued but not yet effective The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are disclosed below. IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Company is assessing the standard's full impact. Impairment: IFRS 9 requires the Company to record expected credit losses on all of its debt securities, loans and trade receivables, either on a 12 month or lifetime basis. The company does not expect a significant impact as a result of applying this aspect of IFRS 9. Hedge Accounting: IFRS 9 does not change the principles of how an entity accounts for effective hedges. The Company does not have any existing hedge relationships and does not expect a significant impact as a result of applying this aspect of IFRS 9. IFRS 9 is effective for all accounting periods beginning on or after 1 January 2018, however, all aspects of the above, except "Hedge Accounting" can be early adopted. (d) Functional and presentation currency These financial statements are presented in Euro (EUR) which is the Company's functional currency. The Directors have elected to present the Company's financial statements in Euro. Functional currency is the currency of the primary economic environment in which the entity operates. The Directors of the Company believe that Euro (EUR) most faithfully represents the economic effects of the underlying investing and financing activities of the Company. Transactions in currencies other than Euro are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currency are retranslated at the rates prevailing at the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary items that are denominated in foreign currencies are recognised in profit or loss in the period. Foreign exchange gains and losses on financial assets and financial liabilities are included in the net foreign exchange gain/(loss). BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 1. SIGNIFICANT ACCOUNTING POLICIES (continued) (e) Use of estimates and judgements The preparation of the financial statements requires management to make judgements, estimates and assumptions that may affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and in future periods affected. Key sources of estimation uncertainty: Fair value of financial instruments Determining fair values The determination of fair value for financial assets and liabilities for which there is no observable market price requires the use of valuation techniques as described in accounting policy (f) "Financial Instruments". For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument. Fair values of ETPs are calculated on a daily basis using predetermined formula, where prices of underlying indices and swap costs are used as inputs to the formula. These prices are compared to prior day prices and any variation results in either an unrealised gain or loss. (f) Financial instruments Classification The Company classifies its financial assets and financial liabilities as financial assets and liabilities at fair value through profit or loss at initial recognition in accordance with IAS 39 Financial Instruments: Recognition and Measurement. The category of financial assets and liabilities at fair value through the profit or loss is sub-divided into: Financial assets and liabilities held for trading: Financial assets are classified as held for trading if they are acquired for the purpose of selling and/or repurchasing in the near term. These assets are acquired principally for the purpose of generating a profit from short-term fluctuations in price. The Company's policy is not to apply hedge accounting. Financial instruments designated as at fair value through profit or loss upon initial recognition: these comprise financial assets designated upon initial recognition on the basis that they are part of a group of financial assets which are managed and have their performance evaluated on a fair value basis, in accordance with risk management and investment strategies of the Company, as set out in the Company's offering document. The Company has designated its investments in the total return swaps, as well as the ETPs, as financial assets and liabilities at fair value through profit or loss respectively. Recognition The Company initially recognises all financial assets and liabilities on the trade date at which the Company becomes a party to the contractual provisions of the instruments. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Financial instruments (continued) Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset. Initial measurement Financial assets and financial liabilities at fair value through profit or loss are recorded in the statement of financial position at fair value. All transaction costs for such instruments are recognised directly in profit or loss. Financial liabilities (other than those classified as held for trading or designated at fair value) are measured initially at their fair value plus any directly attributable incremental costs of acquisition or issue. For financial assets and liabilities where the fair value at initial recognition does not equal the transaction price, the Company recognises the difference in the Statement of Comprehensive Income, unless specified otherwise. Subsequent measurement After initial measurement, the Company measures financial instruments which are classified as at fair value through profit or loss, at fair value. Subsequent changes in the fair value of those financial instruments are recorded in net gain or loss on financial assets and liabilities at fair value through profit or loss. Interest and dividend earned or paid on these instruments are recorded separately in interest revenue or expense and dividend revenue or expense. Total return swaps are valued at fair value utilising predefined formulae and market prices consistent with the ETP valuation process. In the absence of readily available market prices the Swap Provider will provide the inputs for the valuation. Where possible the Company independently calculates the fair value and verifies the Swap Providers valuation with any variation investigated. The valuation determined by the swap counterparty may be based on assumptions of market conditions at the time of valuation, similar arms' length market transactions if available, reference to the current fair value of similar instruments and a variety of different valuation techniques such as the discounted cash flow techniques, option pricing models or any other valuation technique that provides a reliable estimate of prices obtained in actual market transactions. All total return swaps are carried as assets when fair value is positive and as liabilities when fair value is negative. Derecognition A financial asset is derecognised where the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement and either the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its right to receive cash flows from an asset (or has entered into a pass-through arrangement), and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company's continuing involvement in the asset. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Financial instruments (continued) Offsetting Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Company has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted by the accounting standards, or for gains and losses arising from a group of similar transactions. (g) Interest income and expense Interest income and expense are recognised using the effective interest rate method. (h) Taxation Corporation tax is provided on taxable profits at current rates applicable to the Company's activities in accordance with Section 110 of the Taxes Consolidation Act 1997. Deferred taxation is accounted for, without discounting, in respect of all temporary differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the Statement of Financial Position date. Provision is made at the tax rates which are expected to apply in the periods in which the timing differences reverse. Deferred tax assets are recognised only to the extent that it is considered more likely than not that they will be recovered. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that related tax benefit will be realised. Withholding tax is a generic term used for the amount of withholding tax deducted at source of the income and is not significant for the Company. When applicable, the Company will present the withholding tax separately from the gross investment income in the Statement of Comprehensive Income. For the purpose of the Statement of Cash Flows, cash inflows from investments are presented net of withholding taxes, when applicable. (j) Revenue and Operating Expenses The Company is entitled to receive a management fee calculated by reference to a management fee rate under the specified terms of each relevant TRS and is calculated by the Manager by charging the applicable fee rate on the daily market value of each security. The Company pays a management fee to the Manager calculated based on the amount of fees received from the Swap Provider. The management fees are accrued on a daily basis and are recorded in the Statement of Comprehensive Income. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (continued) (k) Net gain/loss on financial assets and liabilities at fair value through profit or loss This item includes changes in the fair value of financial assets and liabilities held for trading or designated upon initial recognition as 'at fair value through profit or loss' and excludes interest and dividend income and expense. Unrealised gains and losses comprise changes in the fair value of financial instruments for the period. Realised gains and losses on disposals of financial instruments are calculated and classified as 'at fair value through profit or loss'. They represent the difference between an instrument's initial carrying amount and disposal amount, or cash payments or receipts made on derivative contracts (excluding payments or receipts on collateral margin accounts for such instruments). (l) Segmental reporting The standard on segmental reporting puts emphasis on the "management approach" to reporting on operating segments. An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses. The Company is engaged as one segment in a Collateralised ETP Securities Programme under which the Company issues on an ongoing basis ETP Securities of different classes linked to indices providing exposure to a range of asset classes including equities, commodities, fixed income and currencies. (m) Share Capital The Authorised Share capital of the Company is EUR100,000 divided into 100,000 ordinary shares of EUR1 each. The Issued and called-up Share Capital is EUR10,000 divided into 40,000 Ordinary Shares of EUR0.25 each. The Issued and called-up Share Capital is presented under Equity in the Statement of Financial Position. 3. REVENUE Year ended Year ended 31 Dec 2016 31 Dec 2015 EUR EUR Management Fee Income 4,132,907 2,711,529 Order Fees 19,850 19,600 Boost Management Ltd. Annual Corporate Benefit Fee 2,107 1,836 4,154,864 2,732,965 The Company is entitled to receive a management fee under the terms of each TRS. The Swap Provider will pay the Company variable amounts by way of payments under the terms of the relevant TRS, calculated by reference to the management fee rate as specified in Note 6 and in the manner specified in note 2(j). BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 4. OPERATING EXPENSES Year ended Year ended 31 Dec 2016 31 Dec 2015 EUR EUR Management Fee Expense 4,132,907 2,711,529 Order fees payable to Boost Management Ltd. 19,850 19,600 Other Expenses 1,107 836 4,153,864 2,731,965 The Company pays a management fee under the terms of a management agreement entered into between the Manager and the Company, calculated based on the management fees received from the Swap Provider (current annual management fee rates outlined in note 6) plus any order form fees received by the Company. General operational expenses such as IPA fees, Determination Agent fees, Registrar fees, Trustee fees, London Stock Exchange (LSE) and Regulatory News Service (RNS) fees, audit fees, tax fees and legal fees are borne by Boost Management Limited on behalf of the Company. The auditor's remuneration for 2016 was EUR10,200 (2015: EUR10,200). There was no directors' remuneration during 2016 (2015: nil). The Company had no employees during the year. 5. TAX ON PROFIT ON ORDINARY ACTIVITIES Corporation tax has been calculated based on results for the period at a rate of 25%. Please refer to Note 2 (h) for further information. There were no deferred tax assets or liabilities at 31 December 2016. 6. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Financial assets designated at fair value through profit or loss - Total Return Swaps All unrealised appreciation/depreciation on assets are attributable to market risk arising from price, commodity, currency and interest rate risk. The Company enters into a derivative contract with the Swap Provider (BNP Paribas as at 31 December 2016 and 31 December 2015) each time ETPs are issued or redeemed to eliminate its exposure to market risk, interest rate risk and currency risk within the Company. The TRS entered into as at 31 December 2016 and 31 December 2015 have a value equal but opposite in sign to the value of the ETPs in issue as at 31 December 2016 and 31 December 2015, as disclosed in the table on pages 25 - 28. Financial liabilities designated at fair value through profit or loss - Exchange Traded Products All unrealised appreciation/depreciation on liabilities are attributable to market risk arising from price, commodity and interest rate risk. All ETPs in issue are listed on either the London Stock Exchange, Frankfurt Stock Exchange or the Borsa Italiana. All ETPs in issue have a maturity date as at 30 November 2062. "Subscription Amount" means, in relation to a Subscription Order, an amount per ETP Security equal to: (A) an amount calculated by the Determination Agent equal to the product of (i) the Price per ETP Security as at the relevant Subscription Trade Date; and (ii) one (1) plus the Swap Execution Rate; or BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 6. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (continued) (B) such other amount as may be agreed in relation to such subscription between the Authorised Participant subscribing for ETP Securities in accordance with the terms of the Operating Manual, and one or more of the Swap Providers for the ETP Securities who have agreed to provide hedging to the Issuer in respect of such newly issued ETP Securities. "Redemption Amount" means an amount per ETP Security calculated by the Determination Agent equal to the greater of: (A) the Principal Amount of such ETP Security; and (B) the product of (i) the Weighted Average Price per ETP Security and (ii) one (1) minus the Swap Execution Rate, provided that, where the ETP Securities have fallen for redemption following the delivery of an Event of Default Redemption Notice or a Connected Class Acceleration Notice, the Redemption Amount shall be an amount equal to the most recently published Price per ETP Security as at the date of delivery of the Event of Default Redemption Notice or Connected Class Acceleration Notice, as the case may be. The ETPs in Issue at 31 December 2016 are as follows: Market Value Management Fee ETP ISIN Notional Amount EUR Rate BOOST LEVDAX 3X DAILY ETP IE00B878KX55 8,423,857 8,423,857 0.75% BOOST SHORTDAX 3X DAILY ETP IE00B8GKPP93 4,140,358 4,140,358 0.80% BOOST EURO STOXX 50 3X LEVERAGE DAILY ETP IE00B7SD4R47 11,692,765 11,692,765 0.75% BOOST EURO STOXX 50 3X SHORT DAILY ETP IE00B8JF9153 16,414,373 16,414,373 0.80% BOOST FTSE MIB 3X LEVERAGE DAILY ETP IE00B8NB3063 40,409,845 40,409,845 0.75% BOOST FTSE MIB 3X SHORT DAILY ETP IE00B873CW36 22,649,101 22,649,101 0.80% BOOST BUND 10Y 3X SHORT DAILY ETP IE00BKS8QN04 48,583,999 48,583,999 0.30% BOOST BUND 10Y 3X LEVERAGE DAILY ETP IE00BKT09255 685,343 685,343 0.30% BOOST BTP 10Y 3X SHORT DAILY ETP IE00BKS8QM96 6,798,979 6,798,979 0.60% BOOST BTP 10Y 3X LEVERAGE DAILY ETP IE00BKT09149 1,479,691 1,479,691 0.60% BOOST 5X SHORT USD LONG EUR DAILY ETP IE00BLNMQT00 1,950,736 1,950,736 0.89% BOOST 5X LONG USD SHORT EUR DAILY ETP IE00BLNMQS92 717,694 717,694 0.89% BOOST EURO STOXX BANKS 3X LEVERAGE DAILY ETP IE00BLS09N40 15,143,160 15,143,160 0.89% BOOST EURO STOXX BANKS 3X SHORT DAILY ETP IE00BLS09P63 7,793,032 7,793,032 0.89% BOOST BTP 10Y 5X SHORT DAILY ETP IE00BYNXNS22 2,783,451 2,783,451 0.99% BOOST BUND 10Y 5X SHORT DAILY ETP IE00BYNXPH56 1,692,773 1,692,773 0.49% BOOST LONG USD SHORT EUR 4X DAILY ETP IE00BYNXPK85 242,356 242,356 0.69% BOOST SHORT USD LONG EUR 4X DAILY ETP IE00BYNXPM00 677,072 677,072 0.69% BOOST FTSE 100 3X LEVERAGE DAILY ETP IE00B88D2999 4,635,601 5,430,606 0.75% BOOST FTSE 100 3X SHORT DAILY ETP IE00B7VB3908 4,875,849 5,712,058 0.80% BOOST FTSE 100 2X LEVERAGE DAILY ETP IE00B94QKC83 1,000,616 1,172,222 0.49% BOOST FTSE 100 2X SHORT DAILY ETP IE00B94QKF15 2,157,687 2,527,730 0.55% BOOST FTSE 100 1X SHORT DAILY ETP IE00B94QKG22 2,146,757 2,514,926 0.49% BOOST FTSE 250 1X SHORT DAILY ETP IE00BBGBF313 14,320,816 16,776,836 0.65% BOOST ISSUER plc
NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 6. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (continued) Market Value Management Fee ETP ISIN Notional Amount EUR Rate BOOST FTSE 250 2X LEVERAGE DAILY ETP IE00B94QKJ52 6,220,328 7,287,114 0.60% BOOST GILTS 10Y 3X LEVERAGE DAILY ETP IE00BKT09479 110,394 129,327 0.30% BOOST GILTS 10Y 3X SHORT DAILY ETP IE00BKS8QQ35 6,838,461 8,011,257 0.30% BOOST TOPIX 2X LEVERAGE DAILY ETP IE00BBGBF537 125,111,850 1,013,406 0.75% BOOST TOPIX 1X SHORT DAILY ETP IE00BBGBF420 68,910,153 558,172 0.75% BOOST NASDAQ 100 3X LEVERAGE DAILY ETP IE00B8W5C578 6,259,005 5,934,163 0.75% BOOST NASDAQ 100 3X SHORT DAILY ETP IE00B8VZVH32 13,366,662 12,672,932 0.80% Boost S&P 500 3x Leverage Daily ETP IE00B7Y34M31 2,896,533 2,746,203 0.75% Boost S&P 500 3x Short Daily ETP IE00B8K7KM88 37,842,758 35,878,719 0.80% BOOST WTI OIL 3X LEVERAGE DAILY ETP IE00B7ZQC614 154,535,966 146,515,549 0.99% BOOST WTI OIL 3X SHORT DAILY ETP IE00B7SX5Y86 24,021,583 22,774,863 0.99% BOOST GOLD 3X LEVERAGE DAILY ETP IE00B8HGT870 10,384,365 9,845,416 0.99% BOOST GOLD 3X SHORT DAILY ETP IE00B6X4BP29 2,664,188 2,525,916 0.99% BOOST COPPER 3X LEVERAGE DAILY ETP IE00B8JVMZ80 2,927,289 2,775,362 0.99% BOOST COPPER 3X SHORT DAILY ETP IE00B8KD3F05 1,275,169 1,208,988 0.99% BOOST NATURAL GAS 3X LEVERAGE DAILY ETP IE00B8VC8061 28,012,878 26,559,010 0.99% BOOST NATURAL GAS 3X SHORT DAILY ETP IE00B76BRD76 18,911,095 17,929,609 0.99% BOOST SILVER 3X LEVERAGE DAILY ETP IE00B7XD2195 15,756,562 14,938,796 0.99% BOOST SILVER 3X SHORT DAILY ETP IE00B8JG1787 2,507,317 2,377,187 0.99% BOOST PALLADIUM 1X SHORT DAILY ETP IE00B94QLR02 461,241 437,302 0.95% BOOST PALLADIUM 2X LEVERAGE DAILY ETP IE00B94QLN63 1,042,374 988,275 0.95% BOOST NATURAL GAS 2X SHORT DAILY ETP IE00B94QL251 697,364 661,171 0.70% BOOST NATURAL GAS 2X LEVERAGE DAILY ETP IE00B94QKX96 625,178 592,732 0.44% BOOST GOLD 2X SHORT DAILY ETP IE00B94QKT50 150,126 142,335 0.70% BOOST GOLD 1X SHORT DAILY ETP IE00B94QKW89 735,668 697,487 0.44% BOOST GOLD 2X LEVERAGE DAILY ETP IE00B94QKS44 457,077 433,354 0.44% BOOST SILVER 2X SHORT DAILY ETP IE00B94QL921 1,283,293 1,216,690 0.70% BOOST SILVER 2X LEVERAGE DAILY ETP IE00B94QL699 1,373,428 1,302,147 0.44% BOOST US TREASURIES 10Y 3X LEVERAGE DAILY ETP IE00BKT09032 255,231 241,985 0.30% BOOST US TREASURIES 10Y 3X SHORT DAILY ETP IE00BKS8QT65 12,302,903 11,664,383 0.30% BOOST GOLD ETC IE00BVFZGK87 2,531,101 2,399,737 0.25% BOOST NATURAL GAS ETC IE00BVFZGL94 1,275,055 1,208,879 0.25% BOOST WTI OIL ETC IE00BVFZGC04 3,798,650 3,601,500 0.25% BOOST BRENT OIL ETC IE00BVFZGD11 4,100,590 3,887,770 0.25% BOOST WTI OIL 1X SHORT DAILY ETP IE00BVFZGF35 3,339,435 3,166,119 0.49% BOOST WTI OIL 2X LEVERAGE DAILY ETP IE00BVFZGG42 844,025 800,220 0.65% BOOST WTI OIL 2X SHORT DAILY ETP IE00BVFZGH58 671,724 636,861 0.65% BOOST US TREASURIES 10Y 5X SHORT DAILY ETP IE00BYNXPJ70 2,296,850 2,177,643 0.50% BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 6. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (continued) Notional Market Value Management ETP ISIN Amount EUR Fee Rate BOOST BRENT OIL 3X LEVERAGE DAILY ETP IE00BYTYHS72 4,190,026 3,972,563 0.99% BOOST BRENT OIL 3X SHORT DAILY ETP IE00BYTYHR65 2,488,781 2,359,613 0.99% BOOST EMERGING MARKETS 3X LEVERAGE DAILY ETP IE00BYTYHN28 830,108 787,026 0.99% BOOST EMERGING MARKETS 3X SHORT DAILY ETP IE00BYTYHM11 710,276 673,413 0.99% BOOST S&P 500 VIX SHORT-TERM FUTURES 2.25X LEVERAGE DAILY ETP IE00BYTYHQ58 6,513,547 6,175,494 0.99% BOOST FTSE MIB BANKS ETP IE00BYMB4Q22 7,230,500 7,230,500 0.35% 810,173,018 605,550,151 The ETPs in Issue at 31 December 2015 are as follows: Market Value Management ETP ISIN Notional Amount EUR Fee Rate BOOST LEVDAX 3X DAILY ETP IE00B878KX55 16,736,603.37 16,736,603.37 0.75% BOOST SHORTDAX 3X DAILY ETP IE00B8GKPP93 6,388,003.27 6,388,003.27 0.80% BOOST EURO STOXX 50 3X LEVERAGE DAILY ETP IE00B7SD4R47 13,230,550.67 13,230,550.67 0.75% BOOST EURO STOXX 50 3X SHORT DAILY ETP IE00B8JF9153 6,054,134.34 6,054,134.34 0.80% BOOST FTSE MIB 3X LEVERAGE DAILY ETP IE00B8NB3063 38,267,763.48 38,267,763.48 0.75% BOOST FTSE MIB 3X SHORT DAILY ETP IE00B873CW36 10,109,492.07 10,109,492.07 0.80% BOOST BUND 10Y 3X SHORT DAILY ETP IE00BKS8QN04 3,340,446.51 3,340,446.51 0.30% BOOST BUND 10Y 3X LEVERAGE DAILY ETP IE00BKT09255 731,084.78 731,084.78 0.30% BOOST BTP 10Y 3X SHORT DAILY ETP IE00BKS8QM96 3,890,446.97 3,890,446.97 0.60% BOOST BTP 10Y 3X LEVERAGE DAILY ETP IE00BKT09149 1,062,258.92 1,062,258.92 0.60% BOOST 5X SHORT USD LONG EUR DAILY ETP IE00BLNMQT00 1,949,077.65 1,949,077.65 0.89% BOOST 5X LONG USD SHORT EUR DAILY ETP IE00BLNMQS92 3,613,167.12 3,613,167.12 0.89% BOOST EURO STOXX BANKS 3X LEVERAGE DAILY ETP IE00BLS09N40 3,251,502.54 3,251,502.54 0.89% BOOST EURO STOXX BANKS 3X SHORT DAILY ETP IE00BLS09P63 999,733.99 999,733.99 0.89% BOOST BTP 10Y 5X SHORT DAILY ETP IE00BYNXNS22 702,852.96 702,852.96 0.99% BOOST BUND 10Y 5X SHORT DAILY ETP IE00BYNXPH56 717,972.85 717,972.85 0.49% BOOST LONG USD SHORT EUR 4X DAILY ETP IE00BYNXPK85 320,297.19 320,297.19 0.69% BOOST SHORT USD LONG EUR 4X DAILY ETP IE00BYNXPM00 283,990.27 283,990.27 0.69% BOOST FTSE 100 3X LEVERAGE DAILY ETP IE00B88D2999 13,173,758.84 17,874,156.00 0.75% BOOST FTSE 100 3X SHORT DAILY ETP IE00B7VB3908 2,900,986.77 3,936,058.85 0.80% BOOST FTSE 100 2X LEVERAGE DAILY ETP IE00B94QKC83 548,912,.31 744,764.23 0.49% BOOST FTSE 100 2X SHORT DAILY ETP IE00B94QKF15 1,217,726.31 1,652,211.05 0.55% BOOST FTSE 100 1X SHORT DAILY ETP IE00B94QKG22 517,937.31 702,737.34 0.49% BOOST FTSE 250 2X LEVERAGE DAILY ETP IE00B94QKJ52 3,784,271.97 5,134,500.20 0.60% BOOST FTSE 250 1X SHORT DAILY ETP IE00BBGBF313 966,615.63 1,311,504.09 0.65% BOOST GILTS 10Y 3X LEVERAGE DAILY ETP IE00BKT09479 296,223.14 401,915.56 0.30% BOOST GILTS 10Y 3X SHORT DAILY ETP IE00BKS8QQ35 426,607.27 578,820.74 0.30% BOOST TOPIX 2X LEVERAGE DAILY ETP IE00BBGBF537 218,056,293.06 1,679,033.46 0.75% BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 6. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (continued) Market Value Management ETP ISIN Notional Amount EUR Fee Rate BOOST TOPIX 1X SHORT DAILY ETP IE00BBGBF420 74,543,976.19 573,988.62 0.75% BOOST NASDAQ 100 3X LEVERAGE DAILY ETP IE00B8W5C578 3,812,241.50 3,509,549.53 0.75% BOOST
NASDAQ 100 3X SHORT DAILY ETP IE00B8VZVH32 8,503,740.85 7,828,543.83 0.80% Boost S&P 500 3x Leverage Daily ETP IE00B7Y34M31 1,857,365.69 1,709,890.85 0.75% Boost S&P 500 3x Short Daily ETP IE00B8K7KM88 5,649,876.12 5,201,275.95 0.80% BOOST WTI OIL 3X LEVERAGE DAILY ETP IE00B7ZQC614 144,206,629.67 132,756,623.27 0.99% BOOST WTI OIL 3X SHORT DAILY ETP IE00B7SX5Y86 10,166,341.29 9,359,133.79 0.99% BOOST GOLD 3X LEVERAGE DAILY ETP IE00B8HGT870 8,804,643.47 8,105,554.78 0.99% BOOST GOLD 3X SHORT DAILY ETP IE00B6X4BP29 2,324,923.30 2,140,324.39 0.99% BOOST COPPER 3X LEVERAGE DAILY ETP IE00B8JVMZ80 15,436,894.48 14,211,205.06 0.99% BOOST COPPER 3X SHORT DAILY ETP IE00B8KD3F05 1,796,087.97 1,653,478.58 0.99% BOOST NATURAL GAS 3X LEVERAGE DAILY ETP IE00B8VC8061 43,472,317.02 40,020,615.05 0.99% BOOST NATURAL GAS 3X SHORT DAILY ETP IE00B76BRD76 4,228,175.34 3,892,458.22 0.99% BOOST SILVER 3X LEVERAGE DAILY ETP IE00B7XD2195 9,626,676.20 8,862,318.11 0.99% BOOST SILVER 3X SHORT DAILY ETP IE00B8JG1787 1,531,180.69 1,409,604.94 0.99% BOOST PALLADIUM 1X SHORT DAILY ETP IE00B94QLR02 401,105.50 369,257.72 0.95% BOOST PALLADIUM 2X LEVERAGE DAILY ETP IE00B94QLN63 650,135.73 598,514.96 0.95% BOOST NATURAL GAS 2X SHORT DAILY ETP IE00B94QL251 943,237.23 868,344.19 0.70% BOOST NATURAL GAS 2X LEVERAGE DAILY ETP IE00B94QKX96 468,052.43 430,889.06 0.44% BOOST GOLD 2X SHORT DAILY ETP IE00B94QKT50 190,521.99 175,394.54 0.70% BOOST GOLD 1X SHORT DAILY ETP IE00B94QKW89 86,428.11 79,565.72 0.44% BOOST GOLD 2X LEVERAGE DAILY ETP IE00B94QKS44 412,082.05 379,362.74 0.44% BOOST SILVER 2X SHORT DAILY ETP IE00B94QL921 343,004.03 315,769.51 0.70% BOOST SILVER 2X LEVERAGE DAILY ETP IE00B94QL699 201,219.66 185,242.82 0.44% BOOST US TREASURIES 10Y 3X LEVERAGE DAILY ETP IE00BKT09032 256,991.93 236,586.77 0.30% BOOST US TREASURIES 10Y 3X SHORT DAILY ETP IE00BKS8QT65 14,502,556.99 13,351,053.96 0.30% BOOST GOLD ETC IE00BVFZGK87 266,757.66 245,577.11 0.25% BOOST NATURAL GAS ETC IE00BVFZGL94 1,347,490.42 1,240,499.68 0.25% BOOST WTI OIL ETC IE00BVFZGC04 1,502,995.75 1,383,657.89 0.25% BOOST BRENT OIL ETC IE00BVFZGD11 896,605.87 825,415.36 0.25% BOOST WTI OIL 1X SHORT DAILY ETP IE00BVFZGF35 1,286,249.28 1,184,121.09 0.49% BOOST WTI OIL 2X LEVERAGE DAILY ETP IE00BVFZGG42 712,113.76 655,571.93 0.65% BOOST WTI OIL 2X SHORT DAILY ETP IE00BVFZGH58 937,986.96 863,510.80 0.65% BOOST US TREASURIES 10Y 5X SHORT DAILY ETP IE00BYNXPJ70 601,112.68 553,384.33 0.50% BOOST BRENT OIL 3X LEVERAGE DAILY ETP IE00BYTYHS72 585,307.89 538,834.45 0.99% BOOST BRENT OIL 3X SHORT DAILY ETP IE00BYTYHR65 871,946.65 802,714.08 0.99% 716,963,684 412,182,915 BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 6. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (continued) The net proceeds of issuance of ETPs are paid to the Swap Provider under the swap transactions entered into by the Company to hedge its obligations in connection with the ETPs, provided that prior to payment the Swap Provider has delivered eligible collateral to the collateral administrator on behalf of the Issuer. Any increase in the Issuer's exposure to the Swap Provider resulting from the entry into, or increase in the size of, a swap transaction must be collateralised by delivering eligible collateral meeting the relevant requirements. 7. DEBTORS: (Amounts falling due within one year) Year ended Year ended 31 Dec 2016 30 Dec 2015 EUR EUR Management fees receivable 403,486 283,453 Order fees receivable 55,150 35,300 Other receivables 2,107 1,836 460,743 320,589 The Company earns a management fee on each swap transaction from the Swap Provider. The swap management fee is calculated as defined in each swap transaction supplement which is entered into between the Swap Provider and the Company. 8. OTHER PAYABLES Year ended Year ended 31 Dec 2016 31 Dec 2015 EUR EUR Management fees payable 403,489 283,455 Order fees payable to Boost Management Ltd. 55,350 35,500 Corporation tax payable - 7 458,839 318,962 9. SHARE CAPITAL - EQUITY Year ended Year ended 31 Dec 2016 31 Dec 2015 EUR EUR Authorised 100,000 Ordinary Shares @ EUR 1 each 100,000 100,000 Issued 40,000 Shares @ EUR 0.25 each 10,000 10,000 The principal shareholder of the Company is Capita Nominee Services Limited, holding 39,994 shares in the Company. Capita Trustee Services Limited, Capita Nominee Services 2 Limited, Capita Nominee Services 3 Limited, Forbrit Corporate Director 3 Limited, Forbrit Corporate Director 4 Limited and Capita Foundations Services Limited hold one share each in the Company. All Shares are held in trust for charity under the terms of the declaration of trust. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 9. SHARE CAPITAL - EQUITY (continued) The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings. No dividends were paid during the year or proposed by the Directors at the Statement of Financial Position date. 10. COLLATERAL RECEIVED ON TRS Year Ended Year Ended 31 Dec 2016 31 Dec 2015 Assets EUR EUR Bonds (Market Value) 297,157,973 101,619,232 Equities (Market Value) 340,095,594 321,544,543 Total Market Value 637,253,567 423,163,775 The Swap Provider transfers collateral to the Issuer in respect of its obligations under a relevant swap agreement. Collateral is in the form of government bonds or listed equities. The Bank of New York Mellon, as collateral administrator determines the market value of the collateral held on behalf of the Company. Collateral consists of equities and/or bonds satisfying certain criteria and subject to certain margin percentages and concentration limits. All collateral as at 31 December 2016 consists of listed equities and Government bonds (minimum rating Fitch AA and S&P BBB) (2015: Fitch AA) meeting the following required criteria: Equities All equity positions provided as collateral by the Swap Provider must be listed within one of the following indices: STOXX Europe Large 200 (LCXP) Nikkei 225 (NKY) CAC 40 (CAC) German Stock Index (DAX) S&P 500 (SPX) FTSE 100 (UKX) Nasdaq 100 Stock (NDX) STOXX Europe 600 (SXXP) Russell 1000 (RIY) Russell 2000 (RTY) S&P/TSX Composite (SPTSX) IBEX 35 (IBEX) FTSE MIB (FTSEMIB) AEX (AEX) Swiss Market Index (SMI) Hang Seng (HSI) Hang Seng China Enterprises (HSCEI) S&P /ASX 200 (AS51) Bonds Money Market Companies: AAA Government or Treasury money market companies only with no asset backed securities or collateralised debt obligations. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 10. COLLATERAL RECEIVED ON TRS (continued) Sovereign Fixed income: Stripped and unstripped national bonds issued by one of the following countries: -- Stripped and unstripped national bonds issued by USA, G10 and other European government bonds with minimal rating of AA -- Supranational bonds with a L-T issuer rating not lower than AAA -- US Agencies 100 per cent backed by the US Government 11. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (a) Fair value of financial instruments Fair Value Measurement Principles of ETPs The price per ETP is calculated daily to reflect the daily change in the relevant Index of the ETP, and will take into account all applicable
fees and adjustments. On the issue date of the class, the price per ETP will be equal to its Issue Price. On any Valuation Date thereafter, the price per ETP is calculated according to a formula which reflects the price per ETP on the immediately preceding valuation date, and adjusted by: 1. the change in the level of the Index since such preceding valuation date, 2. Index Adjustments (if applicable), and 3. Fees. "Index Adjustments" reflect any cash borrowing costs, cash lending revenues, stock borrowing costs, revenues on collateral or costs of transaction taxes, which are not already reflected in the Index. Costs and revenues such as these would be incurred by a hypothetical investor seeking to gain a leveraged or a short exposure to a Benchmark Index. Derivatives Derivatives comprise TRSs and are valued at fair value utilising predefined formulae and market prices consistent with the ETP valuation process. In the absence of readily available market prices the Swap Provider will provide the inputs for the valuation. Where possible management independently calculate the fair value and verify to the Swap Providers valuation and any variation is investigated. The valuation determined by the swap counterparty may be based on assumptions of market conditions at the time of valuation, similar arms' length market transactions if available, reference to the current fair value of similar instruments and a variety of different valuation techniques such as the discounted cash flow techniques, option pricing models or any other valuation technique that provides a reliable estimate of prices obtained in actual market transactions. The fair value of financial instruments carried at fair value is determined according to the following hierarchy: (i) Level 1: Financial instruments, whose values are based on quoted market prices in active markets, and therefore classified within level 1, include active listed equities and exchange traded derivatives. Quoted prices for these instruments are not adjusted. (ii) Level 2: Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. These include investment-grade corporate bonds and over-the-counter derivatives. As level 2 financial instruments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 11. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (continued) (a) Fair value of financial instruments (continued) (iii) Level 3: Financial instruments classified within level 3 have significant unobservable inputs, as they trade infrequently. Pricing inputs are unobservable for the financial instrument and include situations where there is little, if any, market activity for the financial instrument. As observable prices are not available for these securities, the Company has used valuation techniques to derive the fair value, if applicable. The Company's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the last day of the accounting period. There were no transfers during the year between levels of the fair value hierarchy for financial assets which are recorded at fair value. At the reporting date the TRS and ETPs are classed as level 2 as all inputs are observable. Level 1 Level 2 Level 3 Net Total Quoted price Valuation Valuation 31 December 2016 EUR EUR EUR EUR Financial Assets at Fair Value TRS - Commodities - 275,955,453 - 275,955,453 TRS - Equities - 235,582,517 - 235,582,517 TRS - Fixed Income - 84,248,830 - 84,248,830 TRS - FX - 3,587,857 - 3,587,857 TRS - Other - 6,175,494 - 6,175,494 Total - 605,550,151 - 605,550,151 Level 1 Level 2 Level 3 Net Total Quoted price Valuation Valuation 31 December 2016 EUR EUR EUR EUR Financial Liabilities at Fair Value ETPs - Commodities - (275,955,453) - (275,955,453) ETPs - Equities - (235,582,517) - (235,582,517) ETPs - Fixed Income - (84,248,830) - (84,248,830) ETPs - FX - (3,587,857) - (3,587,857) ETPs - Other - (6,175,494) - (6,175,494) Total - (605,550,151) - (605,550,151) There have been no transfers between levels 1 and 2 during the year ended 31 December 2016. Level 1 Level 2 Level 3 Net Total Quoted price Valuation Valuation 31 December 2015 EUR EUR EUR EUR Financial Assets at Fair Value TRS - Commodities - 233,553,560 - 233,553,560 TRS - Equities - 146,895,998 - 146,895,998 TRS - Fixed Income - 25,566,825 - 25,566,825 TRS - FX - 6,166,532 - 6,166,532 Total - 412,182,915 - 412,182,915 BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 11. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (continued) (a) Fair value of financial instruments (continued) Level 1 Level 2 Level 3 Net Total Quoted price Valuation Valuation 31 December 2015 EUR EUR EUR EUR Financial Liabilities at Fair Value ETPs - Commodities - (233,553,560) - (233,553,560) ETPs - Equities - (146,895,998) - (146,895,998) ETPs - Fixed Income - (25,566,825) - (25,566,825) ETPs - FX - (6,166,532) - (6,166,532) Total - (412,182,915) - (412,182,915) There have been no transfers between levels 1 and 2 during the year ended 31 December 2015. (b) Risk management The Company is exposed to a variety of financial risks as a result of its activities. These risks include interest rate risk, credit /counterparty risk, market risk, price risk, currency risk and liquidity risk. The Company has attempted to match the properties of its financial liabilities to its financial assets, to avoid significant elements of risk generated by mismatches of investment performance against its obligations together with any maturity or interest rate risk. The Company uses the net proceeds of the issuance of ETPs to enter into a TRS transaction to hedge its payment obligations in respect of each Class of the ETPs with one or more Swap Providers once the Swap Provider has delivered eligible collateral. The TRS for each Class of ETPs will produce net cash flows to service all of the Company's payment obligations in respect of that Class. This provides a hedge for the Company against market risk, price risk, currency risk and liquidity risk. This hedge is executed through the company's activities as described above and through its agreements with its counterparties, including in particular the Swap Providers, the Collateral Administrator and Authorised Participants. Certain of the Company's daily operational activities and processes are outsourced to Capita International Financial Service (Ireland) Limited. See "Operational Risk" section below. The risk profile of the Company is such that market, credit, liquidity and other risks of the investment securities are borne fully by the
holders of ETPs issued. The ETPs issued are initially recorded at the value of the net proceeds received and are carried as financial liabilities at fair value through profit or loss. The ultimate amount to be repaid to the ETP holders will depend on the proceeds from the related TRS. All substantial risks and rewards associated with the performance of the TRS are ultimately borne by the ETP holders. Therefore any change in risk variables would not affect the equity or the results of the Company. Following on below is an analysis and description of the risk types. (c) Operational Risk Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company's processes, personnel and infrastructure, and from external factors other than credit, markets and liquidity issues such as those arising from legal and regulatory requirements and generally accepted standards to corporate behaviour. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 11. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (continued) (c) Operational Risk (continued) Operational risks arise from all of the Company's operations. The Company was incorporated with the purpose of engaging in those activities outlined in the preceding paragraphs. Certain management and administration functions are outsourced to Capita International Financial Services (Ireland) Limited and Boost Management Limited. The Company is also exposed to operational risks such as custody risk. Custody risk is the risk of loss of collateral held in custody occasioned by the insolvency or negligence of the collateral administrator. Although an appropriate legal framework is in place that eliminates the risk of loss of value of the securities held by the custodian, in the event of its failure, the ability of the Company to transfer the securities might be temporarily impaired. (d) Credit risk Credit/Counterparty risk refers to the risk that each counterparty to a Swap Agreement will default on its contractual obligations as Swap Provider resulting in the Company being unable to make payment of amounts due to the ETP holders. Accordingly, the Company and the ETP holders are exposed to the creditworthiness of each relevant Swap Provider. In order to mitigate this risk the Swap Provider will collateralise its obligations to the Issuer with eligible collateral being delivered with respect to the Issuer's net exposure to the Swap Provider in respect of all swap transactions entered into. Collateral is monitored on a daily basis with the aggregate euro market value of eligible collateral required to be transferred to the Issuer by the relevant Swap Provider in respect of any London Business Day calculated based on the Issuer's net exposure to the Swap Provider in respect of each swap transaction entered into with that Swap Provider daily (converted, if applicable, into euros at the prevailing currency exchange rate). At the reporting date, the Company's investment securities at fair value through profit or loss were concentrated in the following asset types: 2016 2015 EUR EUR TRS - BNP Arbitrage S.N.C. 605,550,151 412,182,915 (credit rating as at date of signing of financial statements S&P: A (2015: A)) The Collateral Administrator for all collateral held on 31 December 2016 is The Bank of New York Mellon (credit rating as at date of signing of financial statements S&P: A (2015: A)). The Company's cash is held at Allied Irish Banks Plc (credit rating as at date of signing of financial statements S&P: BBB- (2015: BB+)) in Ireland. The Directors feel that there is minimal risk to the Company by holding the Company cash with the one bank, as the Company has minimal cash held in the bank account at any given time. BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 11. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (continued) (e)(i) Market risk The Company's liabilities in respect of the ETPs issued is referenced to various equity and commodity indices and is managed by the Company by entering into a TRS with swap providers which exactly match the liability created by the issue of ETPs. If the price of an underlying index has gone up/down 5%, the prices of the ETPs and TRSs tracking that index will go up/down depending on the "Product Leverage Factor" (as defined in the base prospectus), in accordance with the formula for the price of the ETP in the base prospectus. For example, if the Product Leverage Factor is +3 then if the price of the underlying index has gone up/down by 5% over a period of one day, then both the ETP's price and the price of the matching TRS will go up/down respectively by 15% on that day (neglecting fees and funding and borrowing adjustments as detailed in the base prospectus). Any movement in the value of the ETPs issued will be offset by an equal movement in the matching TRS. Therefore the Company's sensitivity to market movements is fully hedged. (e)(ii) Interest rate risk As the Company has entered into TRS to match the ETPs in issue there is deemed to be no interest rate risk to the Company. The Company holds a current account at Allied Irish Banks Plc in Ireland. Due to the level of cash held in the account the Directors do not believe that any move in interest rates would affect the operations of the Company. (e)(iii) Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. As the Company has entered into TRS to match the ETPs in issue there is deemed to be no currency risk to the Company. (e)(iv) Price risk Price risk is the risk that the value of financial instruments will fluctuate as a result of changes in market prices, whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. The Company does not consider price risk to be a significant risk to the Company as any fluctuation in the value of financial assets designated at fair value through profit or loss held by the Company will be offset by movements in the fair value of the issued ETPs. Sensitivity Analysis Any changes in the values of the TRS held by the Company would not have any effect on the equity or profit or loss of the Company as any fair value fluctuations are ultimately borne by either the swap counterparties or the holders of the ETPs issued by the Company. A change of 100 basis points in the underlying index of ETPs in issue at the reporting date would have increased or (decreased) the fair value of financial liabilities by EUR2,569,970 (2015: EUR6,302,772). A change of 100 basis points in the underlying index of TRSs entered into at the reporting date would have increased (or decreased) the fair value of financial assets by EUR2,569,970 (2015: EUR6,302,772). BOOST ISSUER plc NOTES FOR THE YEARED 31 DECEMBER 2016 (continued) 11. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (continued) (f) Liquidity risk Liquidity risk is the risk that the Company may be unable to fulfil its obligations (by delivery of cash) whether expected or unexpected. The legal maturity of the ETPs is 30 November 2062. ETPs cannot be issued without a matching TRS being in place. The maturity profile of the TRS is a minimum of two years with one year rolling contracts thereafter. Should the swap counterparty wish to terminate there is a requirement for one year notice of termination to be issued to the Company. This allows the Company the time to obtain a new Swap Provider. If no replacement Swap Provider can be identified the Issuer would redeem all outstanding ETPs. ETPs can be issued and redeemed daily. The following are the contractual maturities of financial assets as at 31 December 2016: Carrying Less than One to More than 31 December 2016 Amount one year five years five years EUR EUR EUR EUR Cash and cash equivalents 11,084 11,084 - - Due from Swap Provider 403,486 403,486 - - Financial Assets at fair value through profit or loss 605,550,151 - 605,550,151 - Other debtors 57,257 57,257 - - 606,021,978 471,827 605,550,151 - Carrying Less than One to More than 31 December 2015 Amount one year five years five years EUR EUR EUR EUR Cash and cash equivalents 10,611 10,611 - - Due from Swap Provider 283,453 283,453 - - Financial Assets at fair value through profit or loss 412,182,915 - 412,182,915 - Other debtors 37,136 37,136 - - 412,514,115 320,589 412,182,915 - The following are the contractual maturities of financial liabilities: Less Carrying than One to More than one five 31 December 2016 Amount year years five years EUR EUR EUR EUR
Due to Manager 403,489 403,489 - - Financial Liabilities at fair value through profit or loss 605,550,151 - - 605,550,151 Other creditors 55,349 55,349 - - 606,008,990 458,838 - 605,550,151 BOOST ISSUER plc NOTES FOR THE YEAR ENDED 31 DECEMBER 2016 (continued) 11. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (continued) (f) Liquidity risk (continued) Less One Carrying than to More than one five 31 December 2015 Amount year years five years EUR EUR EUR EUR Due to Manager 283,455 283,455 - - Financial Liabilities at fair value through profit or loss 412,182,915 - - 412,182,915 Other creditors 35,507 35,507 - - 412,501,877 318,962 - 412,182,915 (g) Offsetting Financial Assets and Financial Liabilities The Company does not offset Financial Assets and Financial Liabilities. These are presented separately in the Statement of Financial Position. Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Company has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted by the accounting standards, or for gains and losses arising from a group of similar transactions. Financial assets and liabilities subject to offsetting, enforceable master netting agreements and similar agreements: As at 31 December 2016: Gross Amount of recognised Net Amount of Financial financial Amount of recognised financial assets set recognized financial instruments assets off in the statement of financial position assets set off in the statement of financial position received Net Amount EUR EUR EUR EUR EUR Financial Assets at fair value through profit or loss 605,550,151 - 605,550,151 605,550,151 - Gross Amount of recognised Amount of recognised Net Amount of Financial financial financial liabilities set recognized financial instruments liabilities off in the statement of financial position assets presented in the statement of financial position pledged Net Amount EUR EUR EUR EUR EUR Financial Liabilities at fair value through profit or loss 605,550,151 - 605,550,151 - 605,550,151 BOOST ISSUER plc NOTES FOR THE YEAR ENDED 31 DECEMBER 2016 (continued) 11. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (continued) (g) Offsetting Financial Assets and Financial Liabilities (continued) As at 31 December 2015: Gross Amount of recognised Net Amount of Financial financial Amount of recognised financial assets set recognized financial instruments assets off in the statement of financial position assets set off in the statement of financial position received Net Amount EUR EUR EUR EUR EUR Financial Assets at fair value through profit or loss 412,182,915 - 412,182,915 412,182,915 - Gross Amount of recognised Amount of recognised Net Amount of Financial financial financial liabilities set recognized financial instruments liabilities off in the statement of financial position assets presented in the statement of financial position pledged Net Amount EUR EUR EUR EUR EUR Financial Liabilities at fair value through profit or loss 412,182,915 - 412,182,915 - 412,182,915 12. POST BALANCE SHEET EVENTS There were no significant events since 31 December 2016. 13. COMMITMENTS AND CONTINGENCIES The Company had no commitments or contingencies as at 31 December 2016. 14. RELATED PARTY TRANSACTIONS Boost Management Limited provides management services to the Company. The Company paid fees for such services amounting to EUR4,012,874 (2015: EUR2,528,912) to Boost Management Limited during the year ended 31 December 2016. In addition, Boost Management Limited pays directly to Monte Titoli (Borsa Italiana) the Italian Financial Transaction Tax ("FTT") due from the Company in respect of the ETPs listed in the Borsa Italiana. The Company reimburses Boost Management Limited upon receipt of the FTT from the Authorised Participants. Capita International Financial Services (Ireland) Limited ("Capita") provides services such as Accounting and Reporting, Company Secretarial, Issuing and Paying Agent and other administration services to the Company. John Walsh and Lisa Hand are both employees of Capita and directors of the Company. Boost Management Limited, in respect of the aforementioned services, paid fees amounting to EUR140,400 (2015: EUR128,373) to Capita during the year ended 31 December 2016. Other than the above, there were no related party transactions during the year under review. BOOST ISSUER plc NOTES FOR THE YEAR ENDED 31 DECEMBER 2016 (continued) 15. APPROVAL OF FINANCIAL STATEMENTS The Directors authorised the financial statements for issue on 27 April 2017. This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Boost Issuer PLC via Globenewswire http://www.boostetp.com/
(END) Dow Jones Newswires
April 28, 2017 07:40 ET (11:40 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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