Untitled document

GRANITESHARES FINANCIAL PUBLIC LIMITED COMPANY

COMPANY INFORMATION

DIRECTORS

Aileen Mannion

Raja Gul

Jerrick Sy (appointed 30 June 2023 and resigned 3 July 2023)

Deirdre Brennan (appointed 25 October 2024 and resigned 25 October

2024)

COMPANY REGISTRATION NUMBER

608059

COMPANY SECRETARY AND

ADMINISTRATOR

TMF Administration Services Limited

Ground Floor

Two Dockland Central

Guild Street, North Dock

Dublin

D01 K2C5

Ireland

NOTE TRUSTEE, PRINCIPAL

PAYING AGENT, SWAP COLLATERAL

CUSTODIAN AND ACCOUNT BANK

The Bank of New York

Chartered Accountants and Statutory Auditors

One Canada Square

London E14 5AL

England

D02 ED70

SWAP COUNTERPARTY AND

CALCULATION AGENT

Natixis S.A.

30 Avenue

Pierre Mendes-France 75013

Paris

France

ARRANGER

GraniteShares Jersey Limited

28 Esplanade

St. Helier Jersey

JE2 3QA

Channel Islands

INDEPENDENT AUDITORS

Grant Thornton

Chartered Accountants and Statutory Audit Firm

13 – 18 City Quay

Dublin 2, D02 ED70

Ireland

LEGAL ADVISERS

Irish Law Advisers/Irish Listing Agent

Matheson

70 Sir John Rogerson’s Quay

Grand Canal Dock

Dublin 2, D02 R296

Ireland

English Law Advisers

Linklaters LLP

One Silk Street

London, EC2Y 8HQ

United Kingdom

Jersey Law Advisers

Carey Olsen

47 Esplanade

St Helier

Jersey JE1 0BD

Channel Islands

Page 1

GRANITESHARES FINANCIAL PUBLIC LIMITED COMPANY

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024

The directors present the Annual Report and the audited financial statements of Graniteshares Financial Public Limited

Company (the "Company") for the financial year ended 30 June 2024.

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 year ended 30 June 2024, there were 109 ETPs in issuance (2023: 109 ETPs). The purchases over the

financial year amounted to €201,188,492 (2023: €240,977,908) with sales of €264,002,053 (2023: €231,042,886).

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 year (2023:nil).

The Company does not have any branches.

The principal financial risks and uncertainties facing the Company during the financial year 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 year and the Company’s financial position at the end of the financial year are set out on page 15

and 16, respectively. Profit on ordinary activities before taxation amounted to €1,000 (2023: €1,000). The corporation tax

charge for the financial year is €250 (2023: €250).

No dividends were recommended to be paid for the financial year ended 30 June 2024 (2023: €nil).

Page 2

GRANITESHARES FINANCIAL PUBLIC LIMITED COMPANY

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 (CONTINUED)

Key performance indicators

Financial year

ended

30 June

2024

€

Financial year

ended

30 June

2023

€

(a) Net gain on financial assets at FVTPL

142,193,957

35,822,145

(b) Net loss on financial liabilities at FVTPL

(142,193,957)

(35,822,145)

245,078,546

165,698,150

(d) Financial liabilities at FVTPL

(245,078,546)

(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

prospectusaswellaseachETPSecurities’finalterms(bothsetofdocumentsavailableat

www.graniteshares.com/ETPS).

Financial markets performed very well during the 01 July 2023 to 30 June 2024 fiscal year. According to Bloomberg and

during that period, the S&P 500 gained 24.6% while the technology-oriented NASDAQ-100 finished up 30.9%. The

development in activity related to artificial intelligence positively impacted some of the largest US public companies. In

addition the reduction in the US Federal Reserve interest rate benchmarks resulted in an overall increase in valuation across

the U.S. equity market. European markets also finished the period in positive territory, with the Eurostoxx 50 Index up by

15.0% over the period according to Bloomberg. European markets were affected by political uncertainties and a lesser

exposure to the technology sector.

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.

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 TRSs, 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 Secretary of the company is TMF Administration Services Limited. The directors and the company secretary are listed

on page 1. Raja Gul and Aileen Mannion are the current active directors. During the financial year Jerrick Sy served as

alternative 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 30 June 2024 did not hold

any shares, debentures or loan stock of the Company on that date or during the financial year (2023: same).

POWERS OF DIRECTORS

The directors are 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.

Page 3

GRANITESHARES FINANCIAL PUBLIC LIMITED COMPANY

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 (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 two directors.

Page 4

GRANITESHARES FINANCIAL PUBLIC LIMITED COMPANY

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 (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 Ground Floor, Two Dockland Central, Guild Street, North

Dock, Dublin, D01 KC25, 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 EVENTS DURING THE YEAR

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

SIGNIFICANT SUBSEQUENT EVENTS

The significant subsequent events in relation to the Company are disclosed in note 18.

POLITICAL DONATIONS

The Company did not make any political donations during the financial year (2023: nil).

RESEARCH AND DEVELOPMENT

The Company did not engage in any research and development activity during the financial year (2023: 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

Each of the persons who are directors at the time when this Directors’ report is approved has confirmed that:

•so far as that director is aware, there is no relevant audit information of which the Company’s auditors are unaware;

and

•that director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant

audit information and to establish that the Company’s auditors are aware of that information.

This report was approved by the Board on 25 October 2024 and signed on its behalf by:

.........................................

Raja Gul

Director

.........................................

Deirdre Brennan

Director (alternate)

Page 5

GRANITESHARES FINANCIAL PUBLIC LIMITED COMPANY

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;

• 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; and

• ensure the annual report and financial statements include 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 25 October 2024 and signed on its behalf by:

.........................................

Raja Gul

Director

.........................................

Deirdre Brennan

Director (alternate)

Page 6