Graniteshares December 2023 FS Signed (1)

DIRECTORS' REPORT FOR THE PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023

The directors present the Directors’ Report and the audited financial statements of Graniteshares Financial Public

Limited (the "Company") for the financial period ended 31 December 2023.

PRINCIPAL ACTIVITIES

The Company is a public limited company, incorporated in Ireland on 17 July 2017, in accordance with the laws of

Ireland with a registration number 608059.

The Company has been formed for the purpose of issuing collateralised exchange traded products (“ETP Securities” or

(“ETPs”)) and entering into a fully funded Swap agreements. Commercial activity commenced in September 2019 with

the ETP Securities initially listed on the London Stock Exchange for trading on the secondary market.

The Company established a Collateralised ETP Securities Programme under which the Company issues, on an ongoing

basis, collateralised exchange traded products of different classes (each a “Class”) linked into indices providing exposure

to a range of asset classes including equities, commodities, fixed income and currencies. The ETP Securities may have

long or short, 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 Securities in respect of such Class. Each Class of ETP Securities may comprise one or more

tranches.

The ETP Securities have been listed for trading on the London Stock Exchange, Borsa Italiana S.p.A. (the “Italian Stock

Exchange”), Euronext Paris and Deutsche Borse (the "Frankfurt Stock Exchange"). The Company uses the net proceeds

of the issuance of the ETP Securities to enter into Total Return Swap Transactions (“TRSs”) to hedge its payment

obligations in respect of each Class of the ETP with one or more Swap Providers once the Swap Provider has delivered

eligible collateral. The TRS for each Class of ETP Securities will produce cash flows to service all of the Company’s

payment obligations in respect of that Class.

As at financial period ended 31 December 2023, there were 109 ETPs in issuance (2022: 106 ETPs). The purchases

over the financial period amounted to €419,503,164 (2022: €317,268,102) with sales of €263,021,724 (2022:

€202,073,273).

Cash flows are a result of subscriptions and redemptions of ETP securities and expenses incurred. A movement on

collateral does not generate a cash flow. The proceeds of the issuance of a tranche of ETP Securities of a Class will be

paid by the Company to one or more of the Swap Providers with whom the Company has entered by the Company in

relation that Class in proportion to the increase in the number of ETP Securities of that Class then outstanding.

The Company’s payment obligations in respect of the ETP Securities of a Class will be covered entirely from payments

received by the Company from the Swap Providers in respect of such TRS. Pursuant to the terms of each credit support

document, the Company will be obliged to pay amounts equal to each distribution made on collateral held by it to the

relevant Swap Provider upon receipt.

The ETP Securities do not bear interest at a prescribed rate. The return (if any) on the ETP Securities shall be calculated

in accordance with the redemption provisions. The Classes of ETP Securities are disclosed in note 11.

There were no acquisitions of own shares by the Company during the financial period (2022:nil).

The Company does not have any branches.

The principal financial risks and uncertainties facing the Company during the financial period relate to the financial

instruments held by it and are set out in note 14 to the financial statements and the Company expects the nature of these

risks and uncertainties to remain the same for the foreseeable future.

FUTURE DEVELOPMENTS

The plan for the foreseeable future is to continue with the issuance of ETPs under the programme mentioned above

which may include listings on other stock exchanges.

RESULTS AND DIVIDENDS

The results for the financial period and the Company’s financial position at the end of the financial period are set out on

page 15 and 16, respectively. Profit on ordinary activities before taxation amounted to €1,000 (2022: €1,000). The

corporation tax charge for the financial period is €250 (2022: €250).

No dividends were recommended to be paid for the financial period ended 31 December 2023 (2022: €nil).

GRANITESHARES FINANCIAL PUBLIC LIMITED

DIRECTORS' REPORT FOR THE PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023 (CONTINUED)


	Financial year ended	Financial year ended
	31 December 2023	30 June 2023
	€	€
Key performance indicators
(a) Net losses on financial assets at FVTPL	(20,223,507)	(35,822,145)
(b) Net gains on financial liabilities at FVTPL	20,223,507	35,822,145
(c) Financial assets at FVTPL	183,242,651	165,698,150
(d) Financial liabilities at FVTPL	(183,242,651)	(165,698,150)

PRINCIPAL RISKS AND UNCERTAINTIES

The operations of the Company are subject to various risks. Information about the financial risk management objectives

and policies of the Company, along with exposure of the Company to market risk, currency risk, liquidity risk,

concentration risk and operational risk, are disclosed in note 14 to the financial statements.

The ETP Securities continued to perform in line with their relevant benchmarks each disclosed in the programme’s base

prospectus as well as each ETP Securities’ final terms (both set of documents available at www.graniteshares.com/

ETPS).

In the second half of 2023, main financial benchmarks were up for the period, the S&P 500 gaining 7.05% while the

technology-oriented NASDAQ 100 finished up 9.41%. After reaching a low point in October 2023, the market gained

momentum on the expectations that the US federal Reserve might reduce its interest rates in 2024.

The indices providing long exposure and used as benchmarks to price the ETP Securities reflected the overall trend with

the technology names performing well at the end of the period, while value-oriented names, in particular European

stocks, were less sensitive to the hypothetical change in interest rates policy.

GOING CONCERN

The directors have assessed the ability of the Company to continue in operational existence for twelve months from the

date of approval of the financial statements (‘the period of assessment’) and have concluded that it is appropriate to

prepare the financial statements on a going concern basis.

In making this assessment the directors have considered the impact of Ukraine-Russia war on the Company’s business.

The nature of the Company’s business dictates that the outstanding ETPs may be redeemed at any time by any

authorised participant who has entered into an authorised participant agreement with the Company. As the redemption of

ETPs will coincide with the sale of an equal amount of the TRS’s, no liquidity risk is considered to arise. The Company

has entered into its primary service contracts with service providers on a non-recourse basis and these costs are being

met by GraniteShares Jersey Limited. Therefore, the directors are confident that the Company will have the ability to

continue to pay its operating costs and any redemptions that may arise within the period of assessment.

Based on the above, the directors have concluded that the Company has no material uncertainties which would cast a

significant doubt on the Company’s ability to continue as a going concern over the period of assessment.

DIRECTORS AND COMPANY SECRETARY

The Directors and the company secretary are listed oon page 1. Raja Gul and Aileen Mannion are the current active

directors. During the financial year Romira Hoxha resigned as a director. The directors and the company secretary had

no material interest in any contract of significance in relation to the business of the Company. The directors and

company secretary who held office on 31 December 2023 did not hold any shares, debentures or loan stock of the

Company on that date or during the financial period (2022: same).

POWERS OF DIRECTORS

The Board is responsible for managing the business affairs of the Company in accordance with the Company’s

Constitution. The directors may delegate certain functions to TMF Administration Services Limited (the “Administrator”)

and other parties, subject to the supervision and direction of the directors.

GRANITESHARES FINANCIAL PUBLIC LIMITED

DIRECTORS' REPORT FOR THE PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023 (CONTINUED)

DIRECTORS’ COMPLIANCE STATEMENT

The directors, in accordance with Section 225(2)(a) of the Companies Act 2014 (the “Act”), acknowledge that they are

responsible for securing the Company’s compliance with its relevant obligations. Relevant obligations, in the context of

the Company, are the Company’s obligations under:

(a) the Act, where a breach of the obligations would be a category 1 or category 2 offence;

(b) the Act, where a breach of the obligation would be a serious Market Abuse or Prospectus offence; and

Pursuant to Section 225(2)(b) of the Act, the directors confirm that:

(i) a compliance policy statement has been drawn up as required by Section 225(3)(a) of the Act 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;

(ii) appropriate arrangements and structures have been put in place that, in their opinion, secure material compliance

with the Company’s relevant obligations; and

(iii) a review has been conducted, in the financial year, of the arrangements and structures referred to in paragraph (ii).

CORPORATE GOVERNANCE STATEMENT

The directors have established processes regarding internal controls and risk management systems to ensure effective

oversight of the financial reporting process. These include appointing the Administrator to maintain the accounting

records of the Company. The Administrator is contractually obliged to maintain adequate accounting records and to that

end the Administrator performs reconciliations of its records to those of Graniteshares Jersey Limited (“the Arranger”).

The Administrator is also contractually obliged to prepare the annual report including financial statements for review and

approval by the directors. The directors evaluate and discuss significant accounting and reporting issues as the need

arises.

From time to time the directors also examine and evaluate the Administrator’s financial accounting and reporting routines

and monitor and evaluate the external auditors’ performance, qualifications and independence. The Administrator has

operating responsibility for internal control in relation to the financial reporting process and reports to the directors. The

directors are 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 directors have 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.

The Administrator is contractually obliged to design and maintain control structures to manage the risks which the

directors judge to be significant for internal control over financial reporting. These control structures include appropriate

segregation 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 notes in the

Company’s financial statements. The directors delegate the asset valuation function to the Arranger who operates a

sophisticated system of controls to ensure appropriate valuation. All the values for the financial instruments held by the

Company have been provided by the Arranger and in our opinion, they are the most appropriate and reliable source of

such fair values in its capacity as Arranger. We are satisfied that the amounts as stated in the Company's financial

statements represent a reasonable approximation of those values.

The Company’s policies and the directors’ instructions with relevance for financial reporting are updated and

communicated via appropriate channels, such as e-mail, correspondence and meetings to ensure that all financial

reporting information requirements are met in a complete and accurate manner. The directors have an annual process to

ensure that appropriate measures are taken to consider and address any shortcomings identified and measures

recommended by the independent auditors. Given the contractual obligations of the Administrator, the directors have

concluded that there is currently no need for the Company to have a separate audit committee or internal audit function

in order for the directors to perform effective monitoring and oversight of the internal controls and risk management

systems of the Company in relation to the financial reporting process. Therefore, the Company has taken the exemption

available for Section 110 companies as set out under Section 1551 of the Companies Act 2014 S 11 (c) not to have a a

separate audit committee.

No director has a significant direct or indirect holding of securities in the Company. No person has any special rights of

control over the Company’s share capital. There are no restrictions on voting rights.

The directors are responsible for managing the business affairs of the Company in accordance with the Company

Constitution. The directors may delegate certain functions to the Administrator and other parties, subject to the

supervision and direction by the directors. The Board consists of three directors.

GRANITESHARES FINANCIAL PUBLIC LIMITED

DIRECTORS' REPORT FOR THE PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023 (CONTINUED)

ACCOUNTING RECORDS

The Directors are responsible for ensuring that adequate accounting records, as outlined in Section 281 to 285 of the

Companies Act 2014, are kept by the Company. The measures are taken by the directors to ensure compliance with the

Company’s obligation to keep adequate accounting records are the use of appropriate systems and procedures and

ensuring that a competent service provider is responsible for the preparation and maintenance of the accounting records.

The accounting records are kept at the Company’s registered office at TMF Administration Services Limited, Ground

Floor, Two Dockland Central, Guild Street, North Dock, Dublin, Ireland.

SHAREHOLDER MEETINGS

The shareholder’s rights and the operations of the shareholders meetings are defined in the Company’s Constitution and

complies with the Companies Act 2014.

RELATED PARTY TRANSACTIONS

The related party transactions in relation to the Company are disclosed in note 16.

SIGNIFICANT SUBSEQUENT EVENTS

The significant subsequent events in relation to the Company are disclosed in note 17.

POLITICAL DONATIONS

The Company did not make any political donations during the financial period (2022: nil).

RESEARCH AND DEVELOPMENT

The Company did not engage in any research and development activity during the financial period (2022: nil).

INDEPENDENT AUDITOR

Grant Thornton, Chartered Accountants and Statutory Audit Firm is the independent auditor for the Company and will

continue in office in accordance with section 383(2) of the Companies Act 2014.

RELEVANT AUDIT INFORMATION

The directors believe that they have taken all the steps necessary to make themselves aware of any relevant audit

information and have established that the Company’s statutory auditor is aware of that information. In so far as they are

aware, there is no relevant audit information of which the Company’s statutory auditor is unaware.

This report was approved by the Board on 27 March 2024 and signed on its behalf by:

GRANITESHARES FINANCIAL PUBLIC LIMITED

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with

applicable Irish company law and regulations.

Irish company law, requires the directors to prepare financial statements for each financial year. Under that law, they

have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS)

as adopted by the European Union and applicable Irish law.

Under Irish 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 of its profit or loss for that financial

year and otherwise comply with Companies Act 2014. In preparing these financial statements, the directors are required

to:

• select suitable accounting policies and then apply them consistently;

• make judgments and estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRS as adopted by the European Union;

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

concern; and

•use the going concern basis of accounting, unless they either intend to liquidate the Company or to cease operations,

or have no realistic alternative, but to do so.

•ensure the management report includes a fair review of the development and performance of the business and

the option of the issuer, together with a description of the principal risks and uncertainties the Company faces.

The directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any

time the assets, liabilities, financial position and profit or loss of the Company and enable them to ensure that the

financial statements comply with the Companies Act 2014. They are responsible for such internal controls as they

determine is necessary to enable the preparation of financial statements that are free from material misstatement,

whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to

safeguard the assets of the Company and to prevent and detect fraud and other irregularities. The directors are also

responsible for preparing a Directors’ Report that complies with the requirements of the Companies Act 2014.

This report was approved by the Board on 27 March 2024 and signed on its behalf by:

GRANITESHARES FINANCIAL PUBLIC LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023


		Financial period ended 31 December 2023	Financial period ended 31 December 2022
	Note	€	€
Net gain on financial assets at fair value through profit and loss	3	20,223,507	9,256,07
Net (loss)/gain on financial liabilities at fair value through profit or loss	4	(20,223,507)	(9,256,074)
Net operating Income		-	-
Other income	5	1,142,937	1,055,392
Administrative expenses	6	(1,141,937)	(1,054,392)
Profit for the financial period before taxation		1,000	1,000
Taxation	7	(250)	(250)
Profit for the financial period after taxation		750	750
Other comprehensive income		-	-
Total comprehensive income for the financial period		750	750

All amounts relate to continuing operations.

The accompanying notes on pages 11 to 33 form an integral part of these financial statements.

GRANITESHARES FINANCIAL PUBLIC LIMITED

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2023


		As at 31 December 2023	As at 30 June 2023
	Note	€	€
Assets Financial assets at fair value through profit or loss	8	183,242,65 1	165,698,15 0
Cash and cash equivalents	10	1,659,46	1,354,11
Other receivables	9	620,148	135,290
		185,522,262	167,187,559
Liabilities Financial liabilities at fair value through profit or loss	11	183,242,65 1	165,698,15 0
Other payables	12	2,250,861	1,461,409
		185,493,51 2	167,159,55 9
Equity
Share capital	13	25,00	25,00
Retained earnings		3,75	3,00
Total equity		28,75 0	28,00 0
Total equity and liabilities		185,522,262	167,187,559

The accompanying notes on pages 11 to 33 form an integral part of these financial statements.

The audited financial statements were approved and authorised for issue by the Board on 27 March 2024 and signed on

its behalf by:

GRANITESHARES FINANCIAL PUBLIC LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023


For the financial year ended 31 December 2022	Share Capital	Retained earnings	Total
	€	€	€
As at 1 July 2022	25,000	3,000	28,000
Total comprehensive income for the financial year		75	75
As at 31 December 2022	25,00 0	3,75 0	28,75 0


For the financial year ended 30 June 2022	Share Capital	Retained earnings	Total
	€	€	€
As at 1 July 2021	25,000	2,250	27,250
Total comprehensive income for the financial year		75	75
As at 30 June 2022	25,00 0	3,00 0	28,000

The accompanying notes on pages 11 to 33 form an integral part of these audited financial statements.

GRANITESHARES FINANCIAL PUBLIC LIMITED

STATEMENT OF CASH FLOWS

FOR THE FINANCIAL PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023


		Financial period ended 31 December 2023	Financial year ended 30 June 2023
	Note	€	€
Cash flows from operating activities Profit on ordinary activities before taxation		1,000	1,000
Adjustments:
Net losses on financial assets at fair value through profit or loss	3	65,301,726	35,822,145
Net gains on financial liabilities at fair value through profit or loss	4	(65,301,726)	(35,822,145)
Movement in other receivables		(484,858)	114,165
Movement in other payables		789,452	202,475
		305,594	317,640
Taxation paid		(250)	(250)
Net cash flows generated from operating activities		305,344	317,390
Cash flows from investing activities
TRS purchases	11	(17,544,501)	(240,977,908)
TRS sales	11	(171,973,220)	231,042,886
Net cash used in investing activities		(189,517,721)	(9,935,022)
Cash flows from financing activities
Issuance of ETP Securities	11	17,544,501	240,977,908
Repayment of ETP Securities	11	171,973,220	(231,042,886)
Net cash flows generated from financing activities		189,517,721	9,935,022
Net increase in cash and cash equivalents		305,344	317,390
Cash and cash equivalents at the beginning of financial period		1,354,119	1,036,729
Cash and cash equivalents at the end of financial period	10	1,659,463	1,354,119

The accompanying notes on pages 11 to 33 form an integral part of these financial statements.

GRANITESHARES FINANCIAL PUBLIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023

1 GENERAL INFORMATION

The Company was incorporated on 17 July 2017 in accordance with the laws applicable in Ireland under registration

number 608059. The Company is a public limited company and qualifies for the regime contained in Section 110 of the

Irish Taxes Consolidation Act, 1997 (the “TCA, 1997”). This provides that a qualifying company will be liable to

corporation tax at the rate of 25% under Case III of Schedule D of the TCA in respect of taxable profits. The Company’s

registered office is at 3rd Floor, Kilmore House, Park Lane, Spencer Dock, Dublin 1, D01 YE64, Ireland.

The Company has been formed for the purpose of issuing collateralised ETP Securities and entering into a fully funded

Swap agreement. Commercial activity commenced in September 2019 with the ETP Securities initially listed on the

London Stock Exchange for trading on the secondary market.

The Company established a Collateralised ETP Securities Programme under which the Company issues, on an ongoing

basis, collateralised exchange traded products of different classes (each a “Class”) linked into indices providing exposure

to a range of asset classes including equities, commodities, fixed income and currencies. The ETP Securities may have

long or short, leveraged or unleveraged, exposure to the daily performance of the referenced index.

The ETP Securities have been listed for trading on the London Stock Exchange, Borsa Italiana S.p.A. (the “Italian Stock

Exchange”), Euronext Paris and Deutsche Boerse (the "Frankfurt Stock Exchange"). The Company uses the net

proceeds of the issuance of the ETP Securities 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 ETP Securities will produce cash flows to service all of the

Company’s payment obligations in respect of that Class.

The Company’s principal activity is the listing and issue of ETPs. The securities are issued as demand requires. The

Company purchases a matching TRS from swap providers to hedge its liabilities and ensure the assets can service its

liabilities. The number and terms of ETPs outstanding will match the number and terms of ETP Swap Contracts so that

the obligations of the Company and the Swap Provider Match. The price of an ETP Swap Contract will equal the price of

an ETP. GraniteShares Jersey Limited (the “Arranger”) 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 the Arranger an arranger fee.

The Company considers the capital management and its current capital resources to be adequate to maintain the

ongoing listing and issue of the ETPs.

2 Accounting policies

2.1 Statement of compliance

The audited financial statements have been prepared in accordance with International Financial Reporting Standards

(IFRS) as adopted by the European Union and those parts of Companies Act 2014 applicable to companies reporting

under IFRS. The accounting policies adopted by the Company have been applied consistently. The audited financial

statements have been prepared on a going concern basis.

2.2 Basis of preparation

The financial statements have been prepared on a going concern basis and under the historical cost convention except

for the Company’s financial assets and liabilities at fair value through profit and loss.

2.3 New and amended standards and interpretations

Standards, amendments, and interpretations are not yet effective and have not been adopted early by the Company.

At the date of authorisation of these financial statements, the Company has not applied the following new and revised

IFRS Standards that have been issued but are not yet effective:

GRANITESHARES FINANCIAL PUBLIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023 (CONTINUED)

2 Accounting policies (continued)

2.3 New and amended standards and interpretations (continued)


Standard IFRS 17 and Amendments to IFRS 17	Title of Standard or Interpretation IFRS 17 Insurance Contracts and Amendments to IFRS 17	Effective date 1 January 2023
Amendments to IAS 1	Classification of Liabilities as Current or Non-current	1 January 2023
Amendments to IAS 12	Deferred Tax related to Assets and Liabilities arising from a Single Transaction	1 January 2023
Amendments to IAS 8	Definition of Accounting Estimates	1 January 2023

The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial

statements of the Company in future periods.

The following standards are effective for financial periods beginning on or after 1 January 2024.


Standard	Title of Standard or Interpretation Classification of Liabilities as Current or Non-current and	Effective date
Amendments to IAS 1	Non-current Liabilities with Covenants	1 January 2024
Amendments to IFRS 16	Lease Liability in a Sale and Leaseback	1 January 2024
Amendments to IAS 7 and IFRS 7	Disclosures: Supplier Finance Arrangements	1 January 2024
Amendments to IAS 21	Lack of exchangeability	1 January 2025
Amendments to IFRS 10 and IAS 28	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	Note 2

Note 2: In December 2015, the IASB postponed the effetive date of this amendment indefinitely pending the outcome of

its research project on the equity method of accounting.

2.4 Use of estimates and judgements

The preparation of the audited financial statements requires the directors to make judgments, estimates and

assumptions that may affect the application of accounting policies and the reported amounts of assets, liabilities, income

and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions will be reviewed on an ongoing basis. Revisions to accounting estimates will be

recognised in the period in which the estimates are revised and in any future periods affected.

The principal application of judgement and sources of estimation of uncertainty arise with respect to determining the

business model (see note 2(f)), determining the functional currency (see note 2(e)) and financial instruments at fair

value. See note 14 for further discussion on how the fair values of the assets and liabilities are determined.

2.5 Functional and presentation currency

These audited financial statements are presented in Euro (“EUR” or “€”) which is the Company’s presentation currency.

The Directors of the Company believe that Euro is the appropriate presentation currency as it reports to the Central Bank

of Ireland in Euro.

Functional currency is the currency of the primary economic environment in which the entity operates. The ETP

Securities issued by the Company and swap transactions entered into by the Company are denominated in Euro (“EUR”

or “€”), Pound Sterling (“GBP” or “£”) and US Dollars (US or “$). The Directors of the Company believe that Euro most

faithfully represents the economic effects of the underlying transactions, events and conditions.

GRANITESHARES FINANCIAL PUBLIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023 (CONTINUED)

2 Accounting policies (continued)

2.6 Financial instruments

Classification

The Company has adopted the following classifications for financial instruments:

Financial assets:

• At fair value through profit or loss: TRS.

• Amortised cost: Cash and cash equivalents and other receivables.

Financial liabilities:

• At fair value through profit or loss: ETP Securities.

• Amortised cost: other payables.

The classification is determined by both:

• The Company’s business model for managing the financial asset and financial liability.

• The contractual cash flow characteristics of the financial assets and financial liability.

Recognition

Purchases and sales of financial instruments are recognised using trade date accounting, the day that the Company

commits to purchase or sell the asset. From this date any gains and losses arising from changes in fair value of the

financial assets or financial liabilities are recorded through the Statement of Comprehensive Income.

Measurement

Financial instruments that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’

are categorised at fair value through profit or loss. Financial instruments are measured initially at fair value (transaction

price) plus, in case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that

are directly attributable to the acquisition or issue of the financial asset or financial liability. Subsequent to initial

recognition, all instruments classified as at fair value through profit or loss, are measured at fair value with changes in

their fair value recognised in profit or loss in the Statement of Comprehensive Income.Transaction costs on financial

assets and financial liabilities at fair value through profit or loss are expensed immediately.

Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date.

The price per ETP Securities is calculated daily to reflect the daily change in the relevant index of the ETP Securities,

and will take into account all applicable fees and adjustments. On the issue date of the class, the price per ETP

Securities 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.

The TRSs are valued at fair value utilising predefined formula 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 arm’s 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 TRSs are carried as assets when fair value is positive and as liabilities when fair value is negative.

GRANITESHARES FINANCIAL PUBLIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023 (CONTINUED)

2 Accounting policies (continued)

2.6 Financial instruments (continued)

Transfer between levels of the fair value hierarchy

There were no transfers between levels of the fair value hierarchy in the financial year.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position where the

Company currently has a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a net

basis or realise the asset and settle the liability simultaneously.

Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset

expire, or when it transfers the financial asset in a transaction in which substantially all the risks and rewards of

ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all the risks

and rewards of ownership and does not retain control of the financial asset.

Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Company is

recognised as a separate asset or liability in the Statement of Financial Position.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated

to the portion of the asset derecognised), and the consideration received (including any new asset obtained less any new

liability assumed) is recognised in the Statement of Comprehensive Income.

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.

Net gain/(loss) on financial instruments at fair value through profit or loss

Realised gain/(loss) on financial assets are recorded as part of net gain/(loss) on financial assets (or liabilities) at fair value

through profit or loss within the Statement of Comprehensive Income.

Unrealised gain/(loss) relates to gains and losses arising from changes in fair value of financial instruments during the financial

year. Unrealised gain/(loss) on financial instruments are recognised within net gain/(loss) on financial assets (or liabilities) at

fair value through profit or loss within the Statement of Comprehensive Income.

Expected credit losses

Under IFRS 9, the classification of financial assets is generally based on the business model in which a financial asset is

managed and it’s contractual cashflow characteristics. The impairment model applies to financial assets measured at

amortised cost and debt investments at FVOCI, but not to investments in equity instruments.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at

FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

•It’s contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on

the principal amount outstanding.

These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced

by impairment losses. The financial assets at amortised cost consist of cash and cash equivalents and other receivables.

Loss allowances are measured on either of the following bases:

•12-month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date;

and

•lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial

instrument.

The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured

as 12-month ECLs:

GRANITESHARES FINANCIAL PUBLIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL PERIOD FROM 1 JULY 2023 TO 31 DECEMBER 2023 (CONTINUED)

2 Accounting policies (continued)

2.6 Financial instruments (continued)

• debt securities that are determined to have low credit risk at the reporting date; and

•other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of

the financial instrument) has not increased significantly since initial recognition.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when

estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue

cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical

experience and informed credit assessment and including forward-looking information.

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is

exposed to credit risk.

See note 14.2 further discussion on credit risk.

2.7 Cash and cash equivalents

Cash and cash equivalents includes cash held with banks which is subject to insignificant risk in terms of changes of fair value

with original maturities of three months or less, and are used by the Company in the management of its short-term

commitments.

2.8 Other receivables and payables

Other receivables and payables with no stated interest rate and receivable within one year are recorded at transaction price.

2.9 Ordinary share capital presented as equity

Ordinary shares are not redeemable and do not participate in the net income of the Company are classified as equity as per

the Company’s Constitution.

2.10 Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Statement of

Comprehensive Income except to the extent that it relates to items recognised directly in equity, in which case it is recognised

in equity.

Current tax is the expected tax payable on the taxable income for the financial period using the tax rates applicable to the

Company’s activities enacted or substantively enacted at the reporting date, and adjustments to tax payable in respect of

previous financial years, if any.

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 have not been reversed by the financial year end date

except as otherwise required by IAS 12 ‘Deferred Tax’. Provision is made at the tax rates that are expected to apply in the

financial year in which the temporary 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 the related tax benefit will be realised.

2.11 Other income

The Company is entitled to receive a management fee which is calculated and paid by the Swap Provider by reference to a

management fee rate under the specified terms of each relevant TRS by charging the applicable fee rate on the daily market

value of each security.

The Company receives income from the Arranger to cover any expenses that are incurred. This is classified as ‘other income’

in the Statement of Comprehensive Income.

GRANITESHARES FINANCIAL PUBLIC LIMITED


Company Information	1
Directors' Report	2 - 5
Directors' Responsibility Statement	6
Statement of Comprehensive Income	7
Statement of Financial Position	8
Statement of Changes in Equity	9
Statement of Cash Flows	10
Notes to the Financial Statements	11 - 33