2. Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Trust.

2.1. Valuation of Bullion

Bullion is held by JPMorgan Chase Bank, N.A. (the “Custodian”), on behalf of the Trust, at its London, England vaulting premises on a segregated basis. The allocated platinum and palladium is held by UBS AG (the “Zurich Sub-Custodian”) at its Zurich, Switzerland vaulting Premises on a segregated basis. The Trust’s Bullion is valued, per individual metal type, for financial statement purposes, at the lower of cost or market. The cost of Bullion is determined according to the average cost method and the market value is based on the London Fix for each metal held by the Trust used to determine the NAV of the Trust. Realized gains and losses on transfers of Bullion to pay the remuneration due to the Sponsor (the “Sponsor’s Fee”), or Bullion distributed for the redemption of Shares, are calculated on a trade date basis using average cost.

Once the value of Bullion has been determined, the NAV is computed by the Trustee by deducting all accrued fees and other liabilities of the Trust, including the Sponsor’s Fee, from the fair value of the Bullion and all other assets held by the Trust. The table below summarizes the unrealized gains or realized losses on the Trust’s Bullion holdings as of December 31, 2013 and 2012:



	December 31, 2013
		Gold		Silver		Platinum		Palladium		Total
(Amounts in 000's of US$)
Investment in Bullion - average cost	$	162,839	$	108,001	$	21,956	$	15,984	$	308,780
Realized loss on investment in Bullion		(23,109)		(24,850)		(899)		-		(48,858)
Investment in Bullion - lower of cost or market value		139,730		83,151		21,057		15,984		259,922
Unrealized gain on investment in Bullion		-		-		-		554		554
Investment in Bullion - market value	$	139,730	$	83,151	$	21,057	$	16,538	$	260,476


	December 31, 2012
		Gold		Silver		Platinum		Palladium		Total

Investment in Bullion - average cost	$	96,337	$	68,563	$	12,213	$	8,314	$	185,427
Unrealized gain on investment in Bullion		12,101		3,002		1,020		796		16,919
Investment in Bullion - market value	$	108,438	$	71,565	$	13,233	$	9,110	$	202,346

The Trust recognizes the diminution in value of the investment in Bullion which arises from market declines on an interim basis. Increases in the value of the investment in Bullion through market price recoveries in later interim periods of the same fiscal year are recognized in the later interim period. Increases in value recognized on an interim basis may not exceed the previously recognized diminution in value. At December 31, 2013 the market value of gold, silver and platinum had fallen below the average cost therefore a loss was realized on gold, silver and platinum.

The per Share amount of Bullion exchanged for a purchase or redemption is calculated daily by the Trustee, using the London Fix for each metal held by the Trust to calculate the Bullion amount in respect of any liabilities for which covering Bullion sales have not yet been made, and represents the per-Share amount of Bullion held by the Trust, after giving effect to its liabilities, to cover expenses and liabilities and any losses that may have occurred.

2.2. Bullion Receivable and Payable

Bullion receivable or payable represents the quantity of Bullion covered by contractually binding orders for the creation or redemption of Shares respectively, where the Bullion has not yet been transferred to or from the Trust’s account. Generally, ownership of the Bullion is transferred within three days of the trade date.

There was no Bullion payable or receivable at December 31, 2013.

2.3. Creations and Redemptions of Shares

The Trust expects to create and redeem Shares from time to time, but only in one or more Baskets (a Basket equals a block of 50,000 Shares). The Trust issues Shares in Baskets to Authorized Participants on an ongoing basis. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. An Authorized Participant is a person who (1) is registered as a broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions, (2) is a participant in The Depository Trust Company, (3) has entered into an Authorized Participant Agreement with the Trustee, and (4) has established an Authorized Participant Unallocated Account with the Trust’s Custodian. An Authorized Participant Agreement is an agreement entered into by each Authorized Participant, the Sponsor and the Trustee which provides the procedures for the creation and redemption of Baskets and for the delivery of the Bullion required for such creations and redemptions. An Authorized Participant Unallocated Account is an unallocated Bullion account, either loco London or loco Zurich, established with the Custodian or a Bullion clearing bank by an Authorized Participant.

The creation and redemption of Baskets is only made in exchange for the delivery to the Trust or the distribution by the Trust of the amount of Bullion and any cash represented by the Baskets being created or redeemed, the amount of which is based on the combined NAV of the number of Shares included in the Baskets being created or redeemed determined on the day the order to create or redeem Baskets is properly received.

Authorized Participants may, on any business day, place an order with the Trustee to create or redeem one or more Baskets. The typical settlement period for Shares is three business days. In the event of a trade date at period end, where a settlement is pending, a respective account receivable and/or payable will be recorded. When Bullion is exchanged in settlement of redemption, it is considered a sale of Bullion for financial statement purposes.

The amount of bullion represented by the Baskets created or redeemed can only be settled to the nearest 1/1000th of an ounce. As a result, the value attributed to the creation or redemption of Shares may differ from the value of bullion to be delivered or distributed by the Trust. In order to ensure that the correct metal is available at all times to back the Shares, the Sponsor accepts an adjustment to its management fees in the event of any shortfall or excess. For each transaction, this amount is not more than 1/1000th of an ounce.

The Shares of the Trust are classified as “Redeemable Capital Shares” for financial statement purposes, since they are subject to redemption at the option of Authorized Participants. Outstanding Shares are reflected at redemption value, which represents the maximum obligation (based on NAV per Share), with the difference from historical cost recorded as an offsetting amount to retained earnings.

Changes in the Shares for the years ended December 31, 2013, 2012 and 2011 are set out below:



	Year		Year		Year
	Ended		Ended		Ended
	December 31, 2013		December 31, 2012		December 31, 2011
(Amounts in 000's of US$, except for Share and per Share data)
Number of redeemable Shares
Opening balance		2,200,000		2,100,000		1,900,000
Creations		2,050,000		250,000		1,450,000
Redemptions		(300,000)		(150,000)		(1,250,000)
Closing balance		3,950,000		2,200,000		2,100,000

Redeemable Shares
Opening balance	$	202,243	$	182,586	$	166,379
Creations		149,235		24,100		143,112
Redemptions		(20,607)		(13,644)		(120,762)
Adjustment to redemption value		(70,513)		9,201		(6,143)
Closing balance	$	260,358	$	202,243	$	182,586

Redemption value per Share at period end	$	65.91	$	91.93	$	86.95

2.4. Revenue Recognition Policy

Revenues consist of realized gains / losses resulting from the transfer of Bullion for Share redemptions and / or to pay expenses. Realized gains / losses are recognized on a trade date basis.

The primary expense of the Trust is the Sponsor’s Fee, which is paid by the Trust through in-kind transfers of Bullion to the Sponsor. With respect to expenses not otherwise assumed by the Sponsor, the Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s Bullion as necessary to pay these expenses. When selling Bullion to pay expenses, the Trustee will endeavor to sell the smallest amounts of Bullion needed to pay these expenses in order to minimize the Trust’s holdings of assets other than Bullion.

Unless otherwise directed by the Sponsor, when selling Bullion the Trustee will endeavor to sell at the price established by the London Fix for each metal held by the Trust. The Trustee will place orders with dealers (which may include the Custodian) through which the Trustee expects to receive the most favorable price and execution of orders. The Custodian may be the purchaser of such Bullion only if the sale transaction is made at the London Fix for each metal held by the Trust used by the Trustee to value the Trust’s Bullion. A gain or loss is recognized based on the difference between the selling price and the average cost of the Bullion sold. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any sale.

2.5. Income Taxes

The Trust is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Trust itself will not be subject to U.S. federal income tax. Instead, the Trust’s income and expenses will “flow through” to the Shareholders, and the Trustee will report the Trust’s proceeds, income, deductions, gains, and losses to the Internal Revenue Service on that basis.

The Trust has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740-10, Income Taxes. The Sponsor has evaluated the application of ASC 740 to the Trust, to determine whether or not there are uncertain tax positions that require financial statement recognition. Based on this evaluation, the Sponsor has determined no reserves for uncertain tax positions are required to be recorded as a result of the application of ASC 740. As a result, no income tax liability or expense has been recorded in the accompanying financial statements.

2.6. Investment in Bullion

The following represents the changes in ounces of Bullion and the respective values for the years ended December 31, 2013 and 2012:



	December 31, 2013
(Amounts in 000's of US$, except for ounces data)		Gold		Silver		Platinum		Palladium		Total
Ounces of Bullion:
Opening balance		65,167.3		2,389,467.4		8,689.0		13,033.4		2,476,357.1
Creations		60,409.7		2,215,021.8		8,054.6		12,081.9		2,295,568.0
Redemptions		(8,837.9)		(324,057.5)		(1,178.4)		(1,767.6)		(335,841.4)
Transfers of Bullion to pay expenses		(443.2)		(16,250.2)		(59.1)		(88.6)		(16,841.1)
Closing balance		116,295.9		4,264,181.5		15,506.1		23,259.1		4,419,242.6

Investment in Bullion (lower of cost or market):
Opening balance	$	96,337	$	68,562	$	12,213	$	8,315	$	185,427
Creations		80,050		48,772		11,510		8,904		149,236
Redemptions		(12,888)		(8,869)		(1,683)		(1,177)		(24,617)
Transfers of Bullion to pay expenses		(660)		(464)		(84)		(58)		(1,266)
Realized loss on investment in Bullion		(23,110)		(24,849)		(899)		-		(48,858)
Closing balance	$	139,729	$	83,152	$	21,057	$	15,984	$	259,922


	December 31, 2012
		Gold		Silver		Platinum		Palladium		Total
Ounces of Bullion:
Opening balance		65,564.1		2,404,018.4		8,741.9		13,112.8		2,491,437.2
Creations		7,415.9		271,916.7		988.8		1,483.2		281,804.6
Redemptions		(7,437.6)		(272,714.5)		(991.7)		(1,487.6)		(282,631.4)
Transfers of Bullion to pay expenses		(375.1)		(13,753.2)		(50.0)		(75.0)		(14,253.3)
Closing balance		65,167.3		2,389,467.4		8,689.0		13,033.4		2,476,357.1

Investment in Bullion (lower of cost or market):
Opening balance	$	95,032	$	67,745	$	12,072	$	8,340	$	183,189
Creations		12,647		8,902		1,582		969		24,100
Redemptions		(10,795)		(7,695)		(1,372)		(947)		(20,809)
Transfers of Bullion to pay expenses		(547)		(390)		(69)		(47)		(1,053)
Closing balance	$	96,337	$	68,562	$	12,213	$	8,315	$	185,427

2.7. Expenses

The Trust will transfer Bullion to the Sponsor to pay the Sponsor’s Fee that will accrue daily at an annualized rate equal to 0.60% of the adjusted daily net asset value (the “ANAV) of the Trust, paid monthly in arrears.

The Sponsor has agreed to assume administrative and marketing expenses incurred by the Trust, including the Trustee’s monthly fee and out of pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses, exchange listing fees, United States Securities and Exchange Commission (the “SEC”) registration fees, printing and mailing costs, audit fees and certain legal expenses.

For the year ended December 31, 2013 the Sponsor’s Fee was $1,201,105 (December 31, 2012: $1,168,126; December 31, 2011: $1,402,637).

As of December 31, 2013, $116,994 was payable to the Sponsor (December 31, 2012: $103,116).

2.8 Recent Accounting Pronouncement

In June 2013, the Financial Accounting Standards Board issued ASU 2013-08, Financial Services – Investments Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements. ASU 2013-08 changes the approach to the investment company assessment, requires non-controlling ownership interests in other investment companies to be measured at fair value, and requires additional disclosures about the investment company's status as an investment company. The amendments are effective for interim and annual reporting periods beginning after December 15, 2013. The Trust is currently evaluating the impact, if any, this pronouncement would have on the financial statements.

2.9. Subsequent Events

In accordance with the provisions set forth in FASB ASC 855-10, Subsequent Events, the Trust’s management has evaluated the possibility of subsequent events existing in the Trust’s financial statements through the issuance. Management has determined that there were no material events that would require adjustment to or disclosure in the Trust’s financial statements through this date.