Eleving Group S.A. — Annual Report (ESEF) 2023

Jun 20, 2024

Eleving Group S.A.

General information

• Name of the Parent Company: Eleving Group
• Legal status of the Parent Company: Société Anonyme
• Unified registration number, place and date of registration: B 174.457, Luxembourg, 18 December 2012
• Registered office: 8-10, Avenue de la Gare, L-1610 Luxembourg

Major shareholders

Shareholder	Percentage
SIA ALPPES Capital (Latvia)	43.67%
AS Novo Holdings (Latvia)	14.56%
SIA EMK Ventures (Latvia)	14.56%
AS Obelo Capital (Latvia)	14.56%
Other shareholders	12.65%
TOTAL	100.00%

Directors

• Māris Kreics (type A) from 25.07.2018
• Modestas Sudnius (type A) from 09.03.2019
• Sébastien Jean-Jacques J. François (type B) from 01.11.2022
• Delphine Glessinger (type B) from 15.10.2023

• Attila Senig (type B) till 15.10.2023

• Financial year: January - December 2023

• Previous financial year: January - December 2022
• Auditors: BDO AUDIT Société Anonyme Cabinet de révision agréé 1 rue Piret, L-2350 Luxembourg

Consolidated Financial Statements

Consolidated Statement of Profit and Loss and Other Comprehensive Income

Notes	2023 EUR	2022 EUR (restated)*
Continuing operations
Interest revenue	176,297,775	162,516,856
Interest expense	(37,499,444)	(31,131,649)
Net interest income	138,798,331	131,385,207
Fee and commission income related to finance lease activities	8,968,142	7,743,433
Impairment expense	(39,846,624)	(43,281,650)
Net gain/(loss) from de-recognition of financial assets measured at amortized cost	1,159,323	1,993,591
Expenses related to peer-to-peer platform services	(987,970)	(883,424)
Revenue from leases	4,067,111	5,421,567
Revenue from car sales	1,936,451	174,152
Expenses from car sales	(1,789,166)	(171,752)
Selling expense	(6,426,852)	(7,840,117)
Administrative expense	(63,246,010)	(57,344,869)
Other operating income	2,368,739	1,342,726
Other operating expense	(10,133,640)	(9,654,742)
Net foreign exchange result	(6,385,833)	(7,422,727)
Profit before tax	28,482,002	21,461,395
Corporate income tax	(8,324,461)	(9,004,133)
Deferred corporate income tax	1,758,559	2,151,290
Profit from continuing operations	21,916,100	14,608,552
Discontinued operations
Profit from discontinued operation, net of tax	2,538,954	3,966,571
Profit for the period	24,455,054	18,575,123
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss:
Translation of financial information of foreign operations to presentation currency	(4,582,333)	4,943,030
Other comprehensive income/(loss)	(4,582,333)	4,943,030
Total profit and loss for the year	19,872,721	23,518,153

Profit is attributable to:

	2023 EUR	2022 EUR
Equity holders of the Parent Company	20,098,665	15,263,678
Non-controlling interests	4,356,389	3,311,445
Net profit for the year	24,455,054	18,575,123

Other comprehensive income/(loss) is attributable to:

	2023 EUR	2022 EUR
Equity holders of the Parent Company	(4,355,896)	4,699,889
Non-controlling interests	(226,437)	243,141
Other comprehensive income/(loss) for the year	(4,582,333)	4,943,030

• Information regarding the reclassifications made in the financial statements is disclosed in Note 2.

Consolidated Statement of Financial Position

ASSETS

NON-CURRENT ASSETS	Notes	31.12.2023 EUR	31.12.2022 EUR
Intangible assets
Goodwill	21	6,807,055	4,659,049
Internally generated intangible assets	21	10,263,919	8,641,438
Other intangible assets	21	5,393,463	2,411,258
Total intangible assets		22,464,437	15,711,745
Tangible assets
Right-of-use assets	22, 23	10,559,286	9,934,629
Rental fleet	22	7,085,928	10,008,495
Property, plant and equipment	22	2,089,283	2,202,034
Leasehold improvements	22	782,859	575,721
Total tangible assets		20,517,356	22,720,879
Non-current financial assets
Finance lease receivables	24	59,798,508	72,102,729
Loans and advances to customers	25	95,055,945	67,832,121
Loans to related parties	26, 44	-	3,153,617
Equity‑accounted investees	27	580,714	420,622
Other loans and receivables	29	175,783	267,629
Deferred tax asset	18	8,877,839	5,282,533
Total non-current financial assets		164,488,789	149,059,251
TOTAL NON-CURRENT ASSETS		207,470,582	187,491,875

CURRENT ASSETS	Notes	31.12.2023 EUR	31.12.2022 EUR
Inventories
Finished goods and goods for resale	28	4,818,099	2,480,988
Total inventories		4,818,099	2,480,988
Receivables and other current assets
Finance lease receivables	24	52,204,095	61,875,661
Loans and advances to customers	25	106,145,607	81,144,183
Other loans and receivables	29	198,574	697,177
Prepaid expense	30	3,124,744	2,108,329
Trade receivables	31	1,606,770	2,662,513
Other receivables	32	8,267,676	7,296,159
Cash and cash equivalents	33	27,470,468	13,834,837
Total receivables and other current assets		199,017,934	169,618,859
Assets of subsidiary held for sale or under liquidation	34	9,556,863	378,656
Assets held for sale	35	452,055	1,080,351
Total assets held for sale		10,008,918	1,459,007
TOTAL CURRENT ASSETS		213,844,951	173,558,854
TOTAL ASSETS		421,315,533	361,050,729

Consolidated Statement of Financial Position

EQUITY AND LIABILITIES

EQUITY	Notes	31.12.2023 EUR	31.12.2022 EUR
Share capital	36	1,000,500	1,000,500
Reserve	36	4,287,631	1,122,204
Foreign currency translation reserve		532,762	4,888,658
Retained earnings		47,773,110	38,167,599
brought forward		27,674,445	22,903,921
for the period		20,098,665	15,263,678
Total equity attributable to equity holders of the Parent Company		53,594,003	45,178,961
Non-controlling interests		11,841,222	8,894,339
TOTAL EQUITY		65,435,225	54,073,300
LIABILITIES
Non-current liabilities
Borrowings	38	225,944,140	212,717,106
Subordinated borrowings	38	16,462,354	18,477,014
Total non-current liabilities		242,406,494	231,194,120
Provisions	37	157,316	152,109
Total provisions for liabilities and charges		157,316	152,109
Current liabilities
Borrowings	38	96,180,026	60,114,233
Liabilities associated with the assets held for sale or under liquidation	34	2,045,004	107,292
Prepayments and other payments received from customers	39	1,083,554	450,097
Trade and other payables		2,224,874	1,646,248
Current corporate income tax payable	17	729,149	3,934,652
Taxes payable	40	3,374,002	2,367,101
Other liabilities	41	1,902,392	1,953,236
Accrued liabilities	42	5,777,497	5,018,766
Other current financial liabilities	43	-	39,575
Total current liabilities		113,316,498	75,631,200
TOTAL LIABILITIES		355,880,308	306,977,429
TOTAL EQUITY AND LIABILITIES		421,315,533	361,050,729

Consolidated Statement of Changes in Equity

	Share capital EUR	Reserve EUR	Foreign currency translation reserve EUR	Retained earnings EUR	Total equity attributable to Equity holders of the Parent Company EUR	Non-controlling interest EUR	Total EUR
Balance at 01.01.2022	1,000,000	188,769	22,265,753	812,785	24,267,307	7,122,787	31,390,094
Profit for the financial year	-	-	-	15,263,678	15,263,678	3,311,445	18,575,123
Other comprehensive income	-	4,699,889	-	-	4,699,889	243,141	4,943,030
Total comprehensive income	-	4,699,889	-	15,263,678	19,963,567	3,554,586	23,518,153
Change in share capital	500	-	-	-	500	(97,282)	(96,782)
Change in NCI without change in control	-	-	968,743	-	968,743	(1,055,960)	(87,217)
Dividends	-	-	-	-	-	(629,792)	(629,792)
Reserve (Note 36)	-	(330,575)	309,419	-	(21,156)	-	(21,156)
Balance at 31.12.2022	1,000,500	4,888,658	38,167,599	1,122,204	45,178,961	8,894,339	54,073,300
Balance at 01.01.2023	1,000,500	4,888,658	38,167,599	1,122,204	45,178,961	8,894,339	54,073,300
Profit for the financial year	-	-	-	20,098,665	20,098,665	4,356,389	24,455,054
Other comprehensive income	-	(4,355,896)	-	-	(4,355,896)	(226,437)	(4,582,333)
Total comprehensive income	-	(4,355,896)	-	20,098,665	15,742,769	4,129,952	19,872,721
## Cash flows to/from operating activities
Notes	2023 EUR	2022 EUR (restated)*
---	---	---
Profit before tax from continuing operations	28,482,002	21,461,395
Profit from discontinued operation, net of tax	2,538,954	3,966,571
Adjustments for:
Amortization and depreciation	9,442,554	8,063,484
Interest expense	37,499,444	28,915,885
Interest income	(176,297,775)	(162,516,856)
Loss from disposal of property, plant and equipment	3,374,819	3,174,202
Impairment expense	39,846,624	43,281,650
(Gain)/loss from fluctuations of currency exchange rates	10,968,166	2,479,697
Operating profit before working capital changes	(44,145,212)	(51,173,972)
Decrease/(increase) in inventories	(2,332,279)	1,282,746
Increase in finance lease receivables, loans and advances to customers and other current assets	(69,245,456)	(72,817,252)
(Decrease)/increase in accrued liabilities	(318,380)	828,475
Increase in trade payable, taxes payable and other liabilities	705,706	(1,887,222)
Cash generated to/from operations	(115,335,621)	(123,767,225)
Interest received	176,297,775	162,541,919
Interest paid	(33,269,320)	(29,137,634)
Corporate income tax paid	(10,545,511)	(10,188,627)
Net cash flows to/from operating activities	17,147,323	(551,567)

Cash flows to/from investing activities

	2023 EUR	2022 EUR
Purchase of property, plant and equipment and intangible assets	(7,956,761)	(5,070,401)
Purchase of rental fleet	(1,108,735)	(4,978,257)
Disposal of discontinued operation, net of cash disposed of	(104,578)	(469,619)
Received payments for sale of shares in subsidiaries	7,601	-
Made payments for acquisition of minority interest shares	(290,485)	-
Cash acquired from integration of EC Finance	4,379,262	-
Loan repayments received	4,857,599	5,662,807
Loans issued	(11,714)	(48,461)
Net cash flows to/from investing activities	(227,811)	(4,903,931)

Cash flows to/from financing activities

	2023 EUR	2022 EUR
Proceeds from issue of share capital	-	500
Repayments of share capital to minority interest	(147,239)	-
Proceeds from borrowings	288,281,493	189,892,932
Repayments for borrowings	(275,592,907)	(176,917,062)
Payments made for acquisition costs of borrowings	(2,915,882)	(932,800)
Dividends paid	(10,007,731)	(629,792)
Repayment of liabilities for right-of-use assets	(2,855,262)	(2,350,758)
Net cash flows to/from financing activities	(3,237,528)	9,063,020

Effect of exchange rates on cash and cash equivalents

	2023 EUR	2022 EUR
	(46,353)	100,228

Change in cash

	2023 EUR	2022 EUR
	13,635,631	3,707,750

Cash at the beginning of the year

	2023 EUR	2022 EUR
	13,834,837	10,127,087

Cash at the end of the year

Notes	2023 EUR	2022 EUR
33	27,470,468	13,834,837

The Group has elected to present a statement of cash flows that includes an analysis of all cash flows in total - including both continuing and discontinued operations. Amounts related to discontinued operations by operating, investing and financing activities are disclosed in Note 20.

• Information regarding the reclassifications made in the financial statements is disclosed in Note 2.

Notes to the Consolidated Financial Statements

1. Corporate information

Eleving Group S.A. (hereinafter “the Parent Company”) is a Luxembourg company incorporated on December 18, 2012 as a Société Anonyme for an unlimited duration, subject to the Company Law in Luxembourg. The Parent Company is registered in Luxembourg trade register under number B174457.

The consolidated financial statements include Eleving group S.A. and its affiliated undertakings (hereinafter “the Group”):

Subsidiary name	Country of incorporation	Registration number	Principal activities	% equity interest 2023	% equity interest 2022
Mogo Balkans and Central Asia AS	Latvia	40203150045	Management services	100.00%	100.00%
Mogo Leasing d.o.o. (under liquidation)	Bosnia	4202540500009	Financing	100.00%	100.00%
Eleving Vehicle Finance AS	Latvia	42103088260	Management services	98.86%	99.98%
Mogo Peru S.A.C.	Peru	20609973618	Financing	98.86%	-
Mogo UCO LLC	Armenia	42	Financing	98.86%	99.98%
Eleving Finance AS	Latvia	40203150030	Management services	98.70%	98.70%
Primero Finance OU	Estonia	12401448	Financing	91.19%	99.98%
Mogo LLC	Georgia	404468688	Financing	91.19%	99.98%
Eleving Georgia LLC (Longo Georgia)	Georgia	402095166	Retail of motor vehicles	91.19%	99.98%
Eleving AM LLC (Longo LLC)	Armenia	286.110.1015848	Retail of motor vehicles	91.19%	99.98%
Mogo OY	Finland	3263702-2	Financing	91.19%	99.98%
Mogo IFN SA	Romania	35917970	Financing	91.19%	90.42%
Eleving Stella AS	Latvia	40103964830	Management services	91.19%	90.42%
Eleving Stella LT UAB	Lithuania	305018069	Management services	91.19%	90.42%
Rocket Leasing OOO	Belarus	193553071	Financing	91.19%	90.42%
Renti AS	Latvia	40203174147	Rent services	89.37%	88.61%
Mogo AS	Latvia	50103541751	Financing	89.37%	88.61%
MOGO FINANCE LLC JE	Uzbekistan	310380440	Financing	89.37%	-
Mogo Loans SRL	Moldova	10086000260223	Financing	88.40%	87.65%
Mogo LT UAB	Lithuania	302943102	Financing	88.28%	90.42%
Renti UAB	Lithuania	305653232	Financing	88.28%	90.42%
Autotrade OOO	Belarus	192846476	Other services	87.18%	90.42%
MOGO Kredit LLC	Belarus	192981714	Financing	87.18%	86.44%
SIA EC Finance Group	Latvia	40203082656	Management services	87.00%	-
EC finance branch in Botswana	Botswana	BW00004103567	Management services	87.00%	-
AS ExpressCredit Holding	Latvia	40203169911	Management services	87.00%	-
YesCash Group Ltd	Mauritius	137426 C1/GBL	Financing	87.00%	-
ExpressCredit Ltd	Lesotho	TRMBS:68483	Financing	87.00%	-
ExpressCredit Ltd	Eswatini	R7/55063	Financing	87.00%	-
ExpressCredit Proprietary Ltd	Botswana	BW00000115487	Financing	87.00%	-
Eleving Solis AS	Latvia	40203182962	Management services	84.84%	87.19%
Eleving Solis UAB	Lithuania	304991028	Management services	84.84%	87.19%
MOGO LOANS SMC LIMITED	Uganda	80020001522601	Financing	84.84%	87.19%
Mogo Auto Ltd	Kenya	PVT-AJUR7BX	Financing	84.84%	87.19%
Green Power Trading LTD ( Mogo Kenya Ltd)	Kenya	PVT-BEU3ZKD	Financing	84.84%	87.19%
Mogo Lend LTD	Uzbekistan	305723654	Financing	82.38%	86.40%
Eleving Consumer Finance Holding, AS	Latvia	40203249386	Management services	81.74%	81.72%
FINTEK DOO Skopje (TIGO Finance DOOEL)	North Macedonia	7229712	Financing	79.41%	79.35%
Kredo Finance SHPK	Albania	L71610009A	Financing	78.16%	78.24%
Eleving Consumer Finance AS	Latvia	54103145421	Management services	78.12%	78.62%
Insta Finance LLC	Ukraine	43449827	Financing	78.12%	78.62%
Next Fin LLC	Ukraine	42273138	Financing	78.12%	78.62%
OCN SE Finance SRL	Moldova	1020600028773	Financing	77.54%	75.68%
OCN Sebo Credit SRL	Moldova	1017600000371	Financing	77.30%	75.46%
SIA Spaceship	Latvia	40203300224	Car sharing services	59.16%	51.00%
YesCash Zambia LTD*	Zambia	120180003452	Financing	43.50%	-
ExpressCredit Cash Advance Ltd*	Namibia	2016/0767	Financing	42.63%	-
EL Investments OOO (till 01.11.2022.)	Russia	7707457806	Financing	0.00%	100.00%
Mogo Albania SHA (till 30.09.2022.)	Albania	NUIS L71528013A	Financing	0.00%	100.00%
Mogo Sp. z o.o. (till 12.12.2023.)	Poland	7010514253	Financing	0.00%	100.00%
Pocco Finance sp. z o. o. (till 25.10.2023.)	Poland	830343	Management services	0.00%	100.00%
Eleving Luna AS (till 08.11.2023)	Latvia	40203145805	Management services	0.00%	99.98%
Rentiplus OU (till 31.12.2023)	Estonia	16455100	Rent services	0.00%	99.98%
Hima Finance (till 19.10.2023.)	Armenia	286.110.1121811	Management services	0.00%	78.62%
Hima UCO LLC (till 03.05.2023.)	Armenia	53	Financing	0.00%	78.62%
Mogo Iberia (till 11.11.2022.)	Spain	B87587754	Financing	0.00%	0.00%

• • The Group (i) exercises effective power over the subsidiary, (ii) is exposed to variable returns from involvement with the subsidiary and (iii) has the ability to use power over the subsidiary to affect the amount of those returns. Changes in equity interest percentages are mainly driven by vesting of share option plans for key management employees.

The core business activity of the Group comprises of providing finance lease services, leaseback financing services and loans and advances to customers as well as car retail.

These Consolidated financial statements were authorized for issue by decision of the Board of directors on 29 April 2024. Shareholders have the financial statements' approval rights after approval by the Board of Directors.

2. Material accounting policy information

a) Basis of preparation

These consolidated financial statements as at and for the year ended 31 December 2023 are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). The Group’s consolidated financial statements and its financial result are affected by accounting policies, assumptions, estimates and management judgement (Note 3), which necessarily have to be made in the course of preparation of the annual consolidated financial statements. The Group's management makes estimates and assumptions that affect the reported amounts of assets and liabilities within the current and next financial period. All estimates and assumptions required in conformity with IFRS are best estimates undertaken in accordance with the applicable standard. Estimates and judgements are evaluated on a continuous basis, and are based on past experience and other factors, including expectations with regard to future events. Accounting policies and management’s judgements for certain items are especially critical for the Group’s results and financial situation due to their materiality. Future events may occur which cause the assumptions used in arriving at the estimates to change.# 2. Material accounting policy information

The effect of any changes in estimates will be recorded in the financial statements, when determinable. The consolidated financial statements are prepared on a historical cost basis as modified by the recognition of financial instruments measured at fair value, and except for inventory which is accounted in lower of cost or net realizable value and contingent consideration that has been measured at fair value. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated. When necessary amounts reported by subsidiaries have been adjusted to conform to the Group’s accounting policies. The Group's presentation and functional currency is euro (EUR). The financial statements cover the period from 1 January 2023 till 31 December 2023. Accounting policies and methods are consistent with those applied in the previous years, except as described below.

The consolidated financial statements comprise the financial statements of Eleving Group S.A. (Parent company) and entities controlled by the Parent Company (its subsidiaries) as at 31 December 2023. The financial statements of the subsidiaries are prepared for the same reporting period as for the Parent company, using consistent accounting policies. Control is achieved when the Parent Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.

The financial statements of the Parent Company and its subsidiaries are consolidated in the Group’s consolidated financial statements by adding together like items of assets and liabilities as well as income and expense. All intercompany transactions, balances and unrealized gains and losses on transactions between controlled members of the Group are eliminated in full on consolidation. The equity and net income attributable to non-controlling interests are shown separately in the statement of financial position and the statement of profit and loss and other comprehensive income.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. The acquisition of an additional ownership interest in a subsidiary without a change of control is accounted for as an equity transaction in accordance with IFRS 10. Any excess or deficit of consideration paid over the carrying amount of the non-controlling interests is recognized in equity of the parent in transactions where the non-controlling interests are acquired or sold without loss of control. The Group recognizes this effect in retained earnings. If the subsidiary to which these non-controlling interests relate contain accumulated components recognized in other comprehensive income/ (loss), those are reallocated within equity of the Parent.

If the Group loses control over a subsidiary, it:
* Derecognizes the related assets (including goodwill) and liabilities of the subsidiary;
* Derecognizes the carrying amount of any non-controlling interests;
* Derecognizes the cumulative translation differences recorded in equity;
* Recognizes the fair value of the consideration received;
* Recognizes the fair value of any investment retained;
* Recognizes any surplus or deficit in the profit and loss;
* Reclassifies the Group’s share of components previously recognized in other comprehensive income to profit and loss or retained earnings, as appropriate.

Going concern

As the global economy is entering a third year of non-zero key interest rates environment, the Group has managed to post its strongest ever financial results in years 2022 and 2023. The Group’s product structure allows a significant equity build up during the periods of stable growth. Although the Group largely operates with borrowed capital, the interest expense forms only 21.27% (in 2022: 19.15%) from its interest revenue.

As at 31 December 2023, the principal of Group’s total borrowings amounted to EUR 339.85 million of which EUR 97.14 million is due for renewal over the following 12 months. The Group’s current assets are EUR 209.56 million, effectively exceeding the principal of borrowings due next 12 months by more than two times. The Group has a track record of successful cash generation and ability to access funding from debt capital markets as well as other sources during protracted periods of economic uncertainty (tested in both 2020 and 2022), hence the Group is expected to meet its funding requirements for the foreseeable future.

Although exposed to external economic environment and indicators, the Group’s portfolio quality is substantially at the control of Group itself as it has the ability to adjust the underwriting standards on a local basis by geographies and individual products. The result of that is evidenced by substantially improved cost of risk expenses during 2023 indicated by decreasing impairment expenses by 7.94% if compared against 2022 results and that has been achieved despite having higher portfolio by 9% in 2023 versus 2022.

Given the regional diversification of the Group’s business across three continents and Eastern European region being one of them, it is important to highlight that the Group is not a sanctions target and does not maintain business relations with sanctioned entities. Additionally, two of its subsidiaries in Ukraine and Belarus have been substantially scaled down without a substantial impact on the overall Group results.

1. In Ukraine the Group is focused on collection activities only. The collected funds are being partially repatriated with remainder temporarily being housed in the country. The funds collected as well as temporarily housed in country are not material for the Group and its going concern operations.
2. In January 2024, the Group received all the necessary approval from Belarusian government authorities with respect to sale of entities in Belarus. The sale is expected to be finished with 2024 once all aspects of the transaction, including asset refinance, will be implemented. For reporting purposes, Mogo Belarus is classified as a discontinued operation.

These consolidated financial statements are prepared on a going concern basis.

2. Material accounting policy information (continued)

b) Changes in accounting policy and disclosures

The accounting policies adopted are consistent with those of the previous financial year.

c) New standards, interpretations and amendments adopted from 1 January 2023

The following amendments are effective for the period beginning 1 January 2023:

• IFRS 17 Insurance Contracts;
• Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements);
• Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors);
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes); and
• International Tax Reform - Pillar Two Model Rules (Amendment to IAS 12 Income Taxes) (effective immediately upon the issue of the amendments and retrospectively).

These amendments to various IFRS Accounting Standards are mandatorily effective for reporting periods beginning on or after 1 January 2023. See the applicable notes for further details on how the amendments affected the Group.

IFRS 17 Insurance Contracts

IFRS 17 was issued by the IASB in 2017 and replaces IFRS 4 for annual reporting period beginning on or after 1 January 2023. IFRS 17 introduces an internationally consistent approach to the accounting for insurance contracts. Prior to IFRS 17, significant diversity has existed worldwide relating to the accounting for and disclosure of insurance contracts, with IFRS 4 permitting many previous accounting approaches to be followed. Since IFRS 17 applies to all insurance contracts issued by an entity (with limited scope exclusions), its adoption may have an effect on non-insurers such as Eleving Group. The Group carried out an assessment of its contracts and operations and concluded that the adoption of IFRS 17 has had no effect on the consolidated financial statements of the Group.

Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements)

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2. The amendments aim to make accounting policy disclosures more informative by replacing the requirement to disclose ‘significant accounting policies’ with ‘material accounting policy information’. The amendments also provide guidance under what circumstance, the accounting policy information is likely to be considered material and therefore requiring disclosure. These amendments have no effect on the measurement or presentation of any items in the Consolidated financial statements of the Group but affect the disclosure of accounting policies of the Group.

Definition of Accounting Estimates (Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors)

The amendments to IAS 8, which added the definition of accounting estimates, clarify that the effects of a change in an input or measurement technique are changes in accounting estimates, unless resulting from the correction of prior period errors. These amendments clarify how entities make the distinction between changes in accounting estimate, changes in accounting policy and prior period errors. These amendments had no effect on the consolidated financial statements of the Group.# 2. Material accounting policy information (continued)

d) New standards, interpretations and amendments not yet effective

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early. The following amendments are effective for the period beginning 1 January 2024:

• Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases);
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial Statements);
• Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements); and
• Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures)

The following amendments are effective for the period beginning 1 January 2025:

• Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)

The Group is currently assessing the impact of these new accounting standards and amendments. The Group does not believe that the amendments to IAS 1 will have a significant impact on the classification of its liabilities. The Group does not expect any other standards issued by the IASB, but are yet to be effective, to have a material impact on the Group.

e) Reclassification of comparative indicators

As described in Note 20, in 2024 the Group sold all its subsidiaries in Belarus therefore has reclassified their results to discontinued operations. This resulted in change in Consolidated Statement of Profit and Loss and Other Comprehensive Income as well as in Consolidated Statement of Cash Flows. The Group also identified that in 2022 it had misstated the deferred tax asset. This also was amended in restated figures of 2022.

Consolidated Statement of Profit and Loss and Other Comprehensive Income

	Balance at 31.12.2022 in annual report for 2022	Reclassifications	Balance at 31.12.2022 after restatement
	EUR	EUR	EUR
Interest revenue	170,495,222	(7,978,366)	162,516,856
Interest expense	(31,979,711)	848,062	(31,131,649)
Net interest income	138,515,511	(7,130,304)	131,385,207
Fee and commission income related to finance lease activities	8,002,643	(259,210)	7,743,433
Impairment expense	(43,442,576)	160,926	(43,281,650)
Net gain/(loss) from de-recognition of financial assets measured at amortized cost	1,993,591	-	1,993,591
Expenses related to peer-to-peer platform services	(967,626)	84,202	(883,424)
Revenue from leases	5,421,567	-	5,421,567
Revenue from car sales	174,152	-	174,152
Expenses from car sales	(171,752)	-	(171,752)
Selling expense	(7,965,676)	125,559	(7,840,117)
Administrative expense	(59,207,103)	1,862,234	(57,344,869)
Other operating income	1,343,730	(1,004)	1,342,726
Other operating expense	(9,792,392)	137,650	(9,654,742)
Net foreign exchange result	(6,350,962)	(1,071,765)	(7,422,727)
Profit before tax	27,553,107	(6,091,712)	21,461,395
Corporate income tax	(9,617,748)	613,615	(9,004,133)
Deferred corporate income tax	2,686,438	(535,148)	2,151,290
Profit from continuing operations	20,621,797	(6,013,245)	14,608,552
Discontinued operations
Profit/(loss) from discontinued operation, net of tax	(1,735,696)	5,702,267	3,966,571
Profit for the period	18,886,101	(310,978)	18,575,123
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss:
Translation of financial information of foreign operations to presentation currency	4,943,030	-	4,943,030
Other comprehensive income/(loss)	4,943,030	-	4,943,030
Total profit and loss for the year	23,829,131	(310,978)	23,518,153

Profit is attributable to:

Equity holders of the Parent Company	13,926,825	1,336,853	15,263,678
Non-controlling interests	4,959,276	(1,647,831)	3,311,445
Net profit for the year	18,886,101	(310,978)	18,575,123

Other comprehensive income/(loss) is attributable to:

Equity holders of the Parent Company	4,699,889		4,699,889
Non-controlling interests	243,141	-	243,141
Other comprehensive income/(loss) for the year	4,943,030	-	4,943,030

Consolidated Statement of Cash Flows

	Balance at 31.12.2022 in annual report for 2022	Reclassifications	Balance at 31.12.2022 after restatement
	EUR	EUR	EUR
Profit before tax from continuing operations	27,553,107	(6,091,712)	21,461,395
Profit from discontinued operation, net of tax	(1,735,696)	5,702,267	3,966,571
Adjustments for:
Amortization and depreciation	8,226,509	(163,025)	8,063,484
Interest expense	28,915,885	-	28,915,885
Interest income	(170,495,222)	7,978,366	(162,516,856)
Loss from disposal of property, plant and equipment	3,174,195	7	3,174,202
Impairment expense	43,442,576	(160,926)	43,281,650
(Gain)/loss from fluctuations of currency exchange rates	1,407,932	1,071,765	2,479,697
Operating profit before working capital changes	(59,510,714)	8,336,742	(51,173,972)
Decrease/(increase) in inventories	1,282,746	-	1,282,746
Increase in finance lease receivables, loans and advances to customers and other current assets	(72,763,888)	(53,364)	(72,817,252)
(Decrease)/increase in accrued liabilities	828,475	-	828,475
Increase in trade payable, taxes payable and other liabilities	(1,887,222)	-	(1,887,222)
Cash generated to/from operations	(132,050,603)	8,283,378	(123,767,225)
Interest received	170,520,285	(7,978,366)	162,541,919
Interest paid	(29,137,634)	-	(29,137,634)
Corporate income tax paid	(10,188,627)	-	(10,188,627)
Net cash flows to/from operating activities	(856,579)	305,012	(551,567)
Cash flows to/from investing activities
Purchase of property, plant and equipment and intangible assets	(5,070,401)	-	(5,070,401)
Purchase of rental fleet	(4,978,257)	-	(4,978,257)
Disposal of discontinued operation, net of cash disposed of	(164,607)	(305,012)	(469,619)
Loan repayments received	5,662,807	-	5,662,807
Loans issued	(48,461)	-	(48,461)
Net cash flows to/from investing activities	(4,598,919)	(305,012)	(4,903,931)
Cash flows to/from financing activities
Proceeds from issue of share capital	500	-	500
Proceeds from borrowings	189,892,932	-	189,892,932
Repayments for borrowings	(176,917,062)	-	(176,917,062)
Payments made for acquisition costs of borrowings	(932,800)	-	(932,800)
Dividends paid to non-controlling shareholders	(629,792)	-	(629,792)
Repayment of liabilities for right-of-use assets	(2,350,758)	-	(2,350,758)
Net cash flows to/from financing activities	9,063,020	-	9,063,020
Effect of exchange rates on cash and cash equivalents	100,228	-	100,228
Change in cash	3,707,750	-	3,707,750
Cash at the beginning of the year	10,127,087	-	10,127,087
Cash at the end of the year	13,834,837	-	13,834,837

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes)

In May 2021, the IASB issued amendments to IAS 12, which clarify whether the initial recognition exemption applies to certain transactions that result in both an asset and a liability being recognised simultaneously (e.g. a lease in the scope of IFRS 16). The amendments introduce an additional criterion for the initial recognition exemption, whereby the exemption does not apply to the initial recognition of an asset or liability which at the time of the transaction, gives rise to equal taxable and deductible temporary differences. These amendments had no effect on the consolidated financial statements of the Group.

International Tax Reform - Pillar Two Model Rules (Amendment to IAS 12 Income Taxes)

In December 2021, the Organisation for Economic Co-operation and Development (OECD) released a draft legislative framework for a global minimum tax that is expected to be used by individual jurisdictions. The goal of the framework is to reduce the shifting of profit from one jurisdiction to another in order to reduce global tax obligations in corporate structures. In March 2022, the OECD released detailed technical guidance on Pillar Two of the rules. Stakeholders raised concerns with the IASB about the potential implications on income tax accounting, especially accounting for deferred taxes, arising from the Pillar Two model rules. The IASB issued the final Amendments (the Amendments) International Tax Reform - Pillar Two Model Rules, in response to stakeholder concerns on 23 May 2023. The Amendments introduce a mandatory exception to entities from the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two model rules. The exception is effective immediately and retrospectively. The Amendments also provide for additional disclosure requirements with respect to an entity’s exposure to Pillar Two income taxes. Management of the Group has determined that the Group is not within the scope of OECD’s Pillar Two Model Rules and the exception to the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two income taxes is not applicable to the Group since it does not exceed threshold of revenue of 750 million EUR.

Foreign currency translation

The consolidated financial statements are presented in euro (EUR), which is the presentation currency of the Group. EUR is the monetary unit of Luxembourg, where the Parent Company is established. Transactions in foreign currencies are translated into the euro at the reference exchange rate fixed by the European Central Bank at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into EUR applying the reference exchange rate established by the European Central Bank at the last day of the reporting year. The differences arising on settlements of transactions or on reporting foreign currency transactions at rates different from those at which these transactions have originally been recorded in the profit and loss and presented within finance costs.Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. The non-monetary items are carried at historical cost and no further retranslation is performed. For the purpose of presenting consolidated financial statements, the assets and liabilities of foreign operations except non-monetary items, valued at historical exchange rate are translated into euros at the rate of exchange prevailing at the reporting date and their statements of profit and loss and other comprehensive income are translated at exchange rates prevailing at the dates of transactions. If subsidiary’s functional currency differs from the presentation currency of the Group, income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during the period, in which case the currency exchange rates at the date of the transactions are applied. The exchange differences arising on translation for consolidation are recognized in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is reclassified in profit or loss. Currency exchange rates used for translation of foreign operations into euros:

Currency	31.12.2023	31.12.2022	2023 average	2022 average
1 EUR	1 EUR	1 EUR	1 EUR
GEL	2.9753	2.8844	2.8436	3.0667
PLN	4.3480	4.6808	4.5437	4.6861
RON	4.9746	4.9474	4.9464	4.9312
ALL	103.88	114.23	108.75	118.92
MDL	19.3574	20.3792	19.6431	19.8982
BYR	3.5363	2.9156	3.2544	2.7691
UAH	42.2079	38.9510	39.5619	33.9954
UZS	13,731.82	11,961.85	12,694.06	11,650.09
AMD	447.90	420.06	424.59	459.48
MKD	61.4950	61.4932	61.5570	61.6219
BAM	1.95583	1.95583	1.95583	1.95583
KEL	173.7800	131.2700	151.3074	124.1681
UGX	4,172.28	3,979.15	4,029.01	3,883.09
BWP	14.8588	-	14.4545	-
ZMW	28.3798	-	21.8612	-
LSL	20.2064	-	19.9753	-
SZL	20.2064	-	19.9753	-
NAD	20.2064	-	19.9807	-

Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, including contingent consideration, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in other operating expense in the statement of profit and loss.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date and any difference is recognized in profit and loss.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Group will retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. During the measurement period, the Group will also recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends as soon as the Group receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. However, the measurement period shall not exceed one year from the acquisition date.

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability will be recognized in accordance with IFRS 9 in profit or loss. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of IFRS 9, it is remeasured at fair value at each reporting date and subsequent changes in fair value are recognized in profit or loss.

2. Material accounting policy information (continued)

Discontinued operations

A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:
- represents a separate major line of business or geographic area of operations;
- is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
- is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale. When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation had been discontinued from the start of the comparative year.

Goodwill

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the gain is recognized in profit or loss statement immediately.

Goodwill is carried at cost less accumulated impairment losses, if any. The Group tests goodwill for impairment at least annually and whenever there are indications that goodwill may be impaired. Goodwill is allocated to the cash-generating units. Such units represent the smallest groups of assets that generate cash inflows from continuing use that are largely independent of the cash flows of other assets or CGUs. Measurement of gains or losses on disposal of an operation within a cash generating unit to which goodwill has been allocated include the carrying amount of goodwill associated with the disposed operation, generally measured on the basis of the relative values of the disposed operation and the portion of the cash-generating unit which is retained.

Impairment is recognized whenever the carrying value of CGU to which goodwill is allocated is above the recoverable value of such CGU. The recoverable amount of cash generating units has been determined based on value in use calculations. These calculations require the use of estimates as disclosed in Note 21.

Internally generated intangible assets

Internally generated intangible assets primarily include the development costs of the Group's information management systems. These costs are capitalized only if they satisfy the criteria as defined by IAS38 and described below.

Internal and external development costs on management information systems arising from the development phase are capitalized. Significant maintenance and improvement costs are added to the initial cost of assets if they specifically meet the capitalization criteria. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. Internally generated intangible assets cost value is increased by Group's information technology costs - salaries and social security contribution capitalization. All other expenditure is recognised in profit or loss as incurred.

Asset useful life is reassessed by management at each year end and amortization periods adapted accordingly. Internally generated intangible assets are amortized over their useful lives of 7 years. The main internally generated intangible assets are CRM systems.

According to IAS38, development costs shall be capitalized if, and only if, the Group can meet all of the following criteria:
- the project is clearly identified and the related costs are itemized and reliably monitored;
- the technical and industrial feasibility of completing the project is demonstrated;
- there is a clear intention to complete the project and to use or sell the intangible asset arising from it;
- the Group has the ability to use or sell the intangible asset arising from the project;
- the Group can demonstrate how the intangible asset will generate probable future economic benefits;
- the Group has adequate technical, financial and other resources to complete the project and to use or sell the intangible asset.

When these conditions are not satisfied, development costs generated by the Group are recognized as an expense when incurred. Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is completed and the asset is available for use. Additional information is included in Notes 3 and 21.

Amortization is calculated on a straight-line basis over the estimated useful life of the asset as follows:
IT systems - over 7 years.# 2. Material accounting policy information (continued)

Other intangible assets Other intangible non-current assets are stated at cost and amortized over their estimated useful lives on a straight-line basis. The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Losses from impairment are recognized where the carrying value of intangible non-current assets exceeds their recoverable amount. Other intangible assets mainly consists of acquired computer software products. Amortization is calculated on a straight-line basis over the estimated useful life of the asset as follows: Concessions, patents, licences and similar rights - over 1 year; Internally developed intangible assets - over 7 years; Other intangible assets - over 2 to 7 years. Trademarks, licenses and customer contracts (if separable) acquired in a business combination are recognized at fair value at the acquisition date. Trademarks are used to identify and distinguish specific brand names of companies. The rights to use brand names have a set expiry date, however it is renewable at a notional cost. The group intends to renew the trademark continuously and past evidence supports its ability to do so. An analysis of future cash flows provides evidence that the brands will generate net cash inflows for the group for an indefinite period. Therefore, the trademarks are considered to have infinite useful lives and are measured at cost less accumulated impairment losses if the recoverable amount is lower than carrying value. Such impairment testing is done annually by allocating trademarks to relevant CGUs and estimating their value in use (VIU). Please see Note 21 for further details.

Property, plant and equipment

Equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as described below. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items:

• Computers - over 3 years
• Furniture - over 5 years
• Vehicles - over 5 years
• Leasehold improvements - over lease term
• Other equipment - over 2 years

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only then when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The carrying values of equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount. The recoverable amount of equipment is the higher of an asset’s fair value less cost to sell and its value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in the statement of profit and loss in the impairment expense caption. An item of equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the statement of profit and loss in the year the item is derecognized. Depreciation methods, useful lives and residual values of property, plant and equipment are reviewed at each reporting date and adjusted if appropriate.

Rental fleet

Rental fleet includes assets leased by the Group (as lessor) under operating leases. Group accounts for the underlying assets in accordance with IAS 16. Depreciation policy for the underlying assets subject to operating leases is consistent with the Group’s depreciation policy for similar assets (vehicles) and amounts to 7 years. Group adds initial direct costs, including The Global Positioning System (GPS) costs and dealership commissions, incurred in obtaining the operating lease to the carrying amount of the underlying asset and recognizes those costs as an expense over the lease term on the same basis as the lease income. The Group applies the general principles described under ‘Significant accounting judgments, estimates and assumptions’ (Note 3) to determine whether an underlying asset subject to an operating lease may have residual value unrecoverable and impairment loss may need to recognized.

Financial assets

Financial instruments - initial recognition

Date of recognition

Loans and advances to customers are recognized when funds are transferred to the customers’ accounts. Other assets are recognized on the date when Group enters into the contract giving rise to the financial instruments.

Initial measurement of financial instruments

The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments, as described further in the accounting policies. Financial instruments are initially measured at their fair value (which is generally equal to the transaction price) adjusted for transaction costs that are directly attributable to its acquisition or issue, except in the case of financial assets and financial liabilities recorded at FVPL.

Classification of financial assets

The Group measures Loans and advances to customers, Loans to related parties, Receivables from related parties, cash equivalents and Other loans and receivables at amortized cost if both of the following conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

All financial assets not classified as measured at amortised cost as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Business model assessment

The Group determines its business model at the level that best reflects how it manages groups of financial assets to achieve its business objective - the risks that affect the performance of the business model (and the financial assets held within that business model) and the way those risks are managed. The frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectations about future sales activity are also important aspects of the Group’s assessment. However, information about sales activity is not considered in isolation, but as part of an overall assessment of how the Group’s stated objective for managing the financial assets is achieved and how cash flows are realised. The business model assessment is based on reasonably expected scenarios without taking 'worst case' or 'stress case’ scenarios into account. If cash flows after initial recognition are realized in a way that is different from the Group's original expectations, the Group does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward. The assessed business model is with the intention to hold financial assets in order to collect contractual cash flows. Sales that take place from these portfolios relate to credit events. Loans from portfolios might be sold to debt collector agencies when underlying debtors have defaulted on their obligations. When, and only when, an entity changes its business model for managing financial assets it shall reclassify all affected financial assets. No financial liability reclassifications take place.

SPPI test

As a second step of its classification process the Group assesses, where relevant, the contractual terms of the financial assets to identify whether they meet the SPPI test. Financial assets subject to SPPI testing are loans and advances to customers (including financial assets arising from sales and leaseback transactions, as discussed in a separate section of this note) and loans to related parties that solely include payments of principal and interest. ‘Principal’ for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset (for example, if there are repayments of principal or amortization of the premium/discount). The most significant elements of interest within a lending arrangement are typically the consideration for the time value of money and credit risk. In assessing whether the contractual cash flows are SPPI, the Group considers the contractual terms of the instrument.This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making the assessment, the Group principally considers: - contingent events that would change the amount and timing of cash flows; - prepayment and extension terms; and - terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse loans). In general, the loan contracts stipulate that in case of default and collateral repossession the claim is not limited to the collateral repossession and if the collateral value does not cover the remaining debt, additional resources can still be claimed from the borrower to compensate for credit risk losses. Accordingly, this aspect does not create obstacles to passing SPPI test. However, in some cases, loans made by the Group that are secured by collateral of the borrower limit the Group’s claim to cash flows of the underlying collateral (non-recourse loans). The group applies judgment in assessing whether the non-recourse loans meet the SPPI criterion. The Group typically considers the following information when making this judgement: - whether the contractual arrangement specifically defines the amounts and dates of the cash payments of the loan; - the fair value of the collateral relative to the amount of the underlying loan; - the ability and willingness of the borrower to make contractual payments, notwithstanding a decline in the value of collateral; - the Group’s risk of loss on the asset relative to a full-recourse loan; and - whether the Group will benefit from any upside from the underlying assets. According to the judgement made the non-recourse loans that are secured by collateral of the borrower meet the SPPI criterion.

Embedded derivatives

The Group has certain call and put option agreements that can accelerate repayment of the issued bonds. These options arise out of bond (host contract) prospectus and individual agreements with certain bondholders and meet the definition of an embedded derivative in accordance with IFRS 9. An embedded derivative is a component of a hybrid instrument that also includes a non-derivative host contract with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided that, in the case of a non-financial variable, it is not specific to a party to the contract. A derivative that is attached to a financial instrument, but is contractually transferable independently of that instrument, or has a different counterparty from that instrument, is not an embedded derivative, but a separate financial instrument.

The Group accounts for an embedded derivative separately from the host contract when:
- the host contract is not an asset in the scope of IFRS 9;
- the host contract is not itself carried at FVPL;
- the terms of the embedded derivative would meet the definition of a derivative if they were contained in a separate contract; and
- the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract.

Separated embedded derivatives are measured at fair value, with all changes in fair value recognised in profit or loss (unless they form part of a qualifying cash flow or net investment hedging relationship) and presented in the statement of financial position together with the host contract. The Group has derivatives embedded in financial liabilities and non-financial host contracts, see further information under 'Separation of embedded derivatives from the host contract' (Note 3).

Financial assets are classified based on the business model and SPPI assessments as outlined above. Please refer to Note 3 for further discussion on embedded derivative details and considerations of separability. The Group also has receivables recognized at fair value due to them containing a derivative element. When measuring the fair value of an asset, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques.

Reclassification of financial assets

The Group does not reclassify its financial assets subsequent to their initial recognition, apart from the exceptional circumstances in which the Group acquires, disposes of, or terminates a business line and changes its business model for managing financial assets. Financial liabilities are never reclassified. The Group did not reclassify any of its financial assets or liabilities in 2023 nor 2022.

2. Material accounting policy information (continued)

Derecognition of financial assets and finance lease receivables

Derecognition provisions below apply to all financial assets measured at amortized cost.

Derecognition due to substantial modification of terms and conditions

The Group derecognizes a loan to a customer or a finance lease receivable when the terms and conditions have been renegotiated to the extent that, substantially, it becomes a new loan or lease, with the difference recognized as a derecognition gain or loss, to the extent that an impairment loss has not already been recorded. The newly recognized loans are classified as Stage 1 for ECL measurement purposes, unless the new financial asset is deemed to be purchased or originated credit impaired (POCI). When assessing whether or not to derecognize a financial asset, the Group evaluates whether the cash flows of the modified asset are substantially different and the Group considers the following qualitative factors:
- Change in currency of the loan
- Change in counterparty
- If the modification is such that the instrument would no longer meet the SPPI criterion for financial asset
- Whether legal obligations have been extinguished.

• Furthermore, for loans to customers and financial lease receivables the Group specifically considers the purpose of the modification for increase in loan principal. It is evaluated whether modification was entered into for commercial reasons upon customer initiative or for credit restructuring reasons. Management has performed analysis of the changes being made due to business reasons and evaluated that changes due to business reasons result in substantial modification of terms and conditions. This is in line with the objective of this modification that is to originate a new asset with substantially different present value of expected cash flows. If the customer was not in delay, and the principal was increase on a mutual agreement, the respective modification is considered to occur for a commercial reasons and results in derecognition of the initial lease/loan receivable. Other modifications to the agreement terms are treated as modifications that do not result in derecognition (see section on Modifications below).

Derecognition other than for substantial modification

A financial asset or finance lease receivable (or, where applicable, a part of a financial asset or finance lease receivable or part of a group of similar financial assets or finance lease receivables) is derecognized when the rights to receive cash flows from the financial asset or finance lease receivable have expired. The Group also derecognizes the financial asset or finance lease receivable if it has both transferred the financial asset or finance lease receivable and the transfer qualifies for derecognition. The Group has transferred the financial asset or finance lease receivable if the Group has transferred its contractual rights to receive cash flows from the financial asset or finance lease receivable. The Group has transferred the asset if, and only if, either:
- The Group has transferred its contractual rights to receive cash flows from the asset or
- It retains the rights to the cash flows, but has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement.

Pass-through arrangements are transactions when Group retains the contractual rights to receive the cash flows of a financial asset (the 'original asset'), but assumes a contractual obligation to pay those cash flows to one or more entities (the 'eventual recipients'), when all of the following three conditions are met:
- Group has no obligation to pay amounts to the eventual recipients unless it has collected equivalent amounts from the original asset, excluding short-term advances by the entity with the right of full recovery of the amount lent plus accrued interest at market rates;
- Group cannot sell or pledge the original asset other than as security to the eventual recipients for the obligation to pay them cash flows;
- Group has to remit any cash flows it collects on behalf of the eventual recipients without material delay.

In addition, the Group is not entitled to reinvest such cash flows, except for investments in cash or cash equivalents during the short settlement period from the collection date to the date of required remittance to the eventual recipients, and interest earned on such investments is passed to the eventual recipients.

A transfer only qualifies for derecognition if either:
- The Group has transferred substantially all the risks and rewards of the asset, or
- The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.# 2. Material accounting policy information (continued)

Modifications

The Group sometimes makes modifications to the original terms of loans/lease as a response to the borrower’s financial difficulties, rather than taking possession or to otherwise enforce collection of collateral. The Group considers a lease/loan restructured when such modifications are provided as a result of the borrower’s present or expected financial difficulties and the Group would not have agreed to them if the borrower had been financially healthy. Indicators of financial difficulties include default or DPDs prior to the modifications. Such modifications may involve extending the payment arrangements and the agreement of new loan conditions. If the modification does not result in cash flows that are substantially different, as set out in the preceding section, the modification does not result in derecognition. Based on the change in cash flows discounted at the original EIR, the Group records a modification gain or loss in interest revenue/expenses calculated using the effective interest method (Note 4, 5) in the consolidated statements of profit and loss, to the extent that an impairment loss has not already been recorded (Note 7). Further information on modified financial assets and finance lease receivables is disclosed in the following section on impairment.

Further, as described in section on 'Derecognition due to substantial modification of terms and conditions' if modification is performed for commercial reasons, then it is considered to result in derecognition of the initial lease/loan receivable. Such modifications include increase in the lease amount and increase in lease term, which are agreed upon with customers for commercial reasons (i.e.-, customers and the Group are both interested in substantially modifying the scope of the lease/loan transaction). Whenever such an agreement to modify is reached the old agreement and respective receivable is derecognized.

Treatment of non-substantial modifications

If expectations of fixed rate financial assets’ cash flows (such assets present core part of Group' s financial asset base) are revised for reasons other than credit risk, then changes to future contractual cash flows are discounted at the original EIR with a consequential adjustment to the carrying amount. The difference from the previous carrying amount is booked as a positive or negative adjustment to the carrying amount of the financial asset on the consolidated statement of financial position with a corresponding increase or decrease in Interest revenue/expense calculated using the effective interest method. The carrying amount of the financial asset or financial liability is adjusted if the Group revises its estimates of payments or receipts. If modification of a financial asset or liability measured at amortized cost does not result in the derecognition a modification gain/loss is calculated. The adjusted carrying amount is calculated based on the revised effective interest rate and the change in carrying amount is recorded as interest income or expense. Changes in the contractual cash flows of the asset are recognized in statement of profit and loss and any costs or fees incurred adjust the carrying amount of the modified financial asset and are amortized over the remaining term of the modified instrument. Therefore, the original EIR determined at initial recognition is revised on modification to reflect any costs or fees incurred.

Overview of the expected credit loss principles

The Group recognizes the allowance for expected credit losses for all loans and other debt financial assets not held at FVPL and finance lease receivables (as due to lease contract specifics lease receivable does not contain any unguaranteed residual value, IFRS 9 provisions apply to full finance lease receivable balance). In this section all referred to as ‘financial instruments’. If there has been no significant increase in credit risk since origination, the ECL allowance is based on the 12 months’ expected credit loss (12mECL) as outlined in below. If there has been a significant increase in credit risk since initial recognition, the ECL allowance is based on the credit losses expected to arise over the life of the asset (the lifetime expected credit loss or LTECL). The Group’s policies for determining if there has been a significant increase in credit risk are set out in below. The 12mECL is the portion of LTECLs that represent the ECLs that result from default events on a financial instrument that are possible within the 12 months after the reporting date. Both LTECLs and 12mECLs are calculated on either an individual basis or a collective basis, depending on the nature of the underlying portfolio of financial instruments. The Group has established a policy to perform an assessment, at the end of each reporting period, of whether a financial instrument’s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. This is further explained in section on Significant increase in credit risk (Note 3).

Impairment of finance lease receivables and loans and advances to customers

Defining credit rating

The Group’s core business assets - financial lease receivables and loans and advances to customers - are of retail nature, they are therefore grouped per countries and products (finance lease receivables and loans and advances to customers) for a collective ECL calculation that is modelled based on DPD (days past due) classification. Specifically, the Group analyzes its portfolio of finance lease receivables and loans and advances to customers by segregating receivables in categories according to: country, product group, days past due and presence of underlying collateral (for secured products). Financial lease receivables and secured loans (more specifically vehicle secured loans) are combined together due to similar nature of the products. The Group continuously monitors all assets subject to ECLs. In order to determine whether an instrument or a portfolio of instruments is subject to 12m ECL or LTECL, the Group assesses whether there has been a significant increase in credit risk since initial recognition. When estimating ECLs on a collective basis for a group of similar assets, the Group applies the same principles for assessing whether there has been a significant increase in credit risk since initial recognition across the portfolios within the country based on product type - lease or loan product.

The Group segregates finance lease receivables and loans and advances to customers in the following categories:

Finance lease receivables and secured loans (mature countries*):

1. Not past due
2. Days past due up to 30 days
3. Days past due 31 up to 60 days
4. Days past due over 60 days

5. Unsecured (general definition: days past due over 90 or collateral is not available, i.e. lost or sold).

6. • Matured countries - Operations in Latvia, Estonia, Lithuania, Georgia, Armenia, Romania, Moldova. Operations in these countries are the longest, with the smoothest processes, therefore consistent lending practices in these countries have a long enough track record. Refer to Eleving Vehicle Finance only.

Finance lease receivables and secured loans (non-mature countries*):

1. Not past due
2. Days past due up to 25 days (up to 30 days for Africa region)
3. Days past due 26 up to 34 days (31 - 34 days for Africa region)
4. Days past due over 35 days

5. Unsecured (general definition: days past due over 90 or collateral is not available, i.e. lost or sold).

6. • Non-matured countries - Operations in Kenya, Uganda and Uzbekistan. Refer to Eleving Vehicle Finance only.

Loans and advances to customers (unsecured loans, refer to Eleving Vehicle Finance only):

1. Not past due
2. Days past due up to 30 days
3. Days past due 31 up to 60 days
4. Days past due over 60 days

Loans and advances to customers (unsecured loans, acquired businesses*):

1. Not past due
2. Days past due up to 30 days
3. Days past due 31 up to 60 days
4. Days past due 61 up to 90 days

5. Days past due over 90 days

6. • Businesses acquired during 2020 and 2023 - the term refers to unsecured consumer lending companies acquired in 2020 and 2023; acquired companies operate in Moldova, Ukraine, North Macedonia, Albania, Namibia, Botswana, Zambia and Lesotho. Term is introduced to distinguish unsecured consumer lending operations in these countries from Eleving greenfield investments into unsecured consumer lending operations in Latvia, Estonia, Armenia and Lithuania as there are differences in product set up and processes. Before the acquisition of consumer unsecured portfolios, the Group made due diligence on the impairment of respective portfolios. It was concluded that applied methodology is inline with the IFRS9 standard, it is well aligned with debt collections and other critical business processes and it is quite prudent. Although methodology differed from the one applied for Mogo unsecured portfolios it was decided to keep the applied methodology.

Based on the above process, the Group groups its leases and loans into Stage 1, Stage 2, and Stage 3, as described below:

The Group defines staging predominantly based on DPD and aligns it with the debt collections processes. For more accurate ECL assessment, split by stages is enhanced by healing bucket concept to reflect on cases when DPD is not a sufficient indicator of credit risk. This is applicable to lease portfolios and car loans (unsecured consumer loan where clients borrow a sum of money in order to purchase a car). The Group’s experience in lending suggests that DPD is a strong predictor of a credit default, thus DPD is the main quantitative factor for the backstop identification for Stage 2.Data from the Groups active vehicle operations (active 3+ years) shows that probability to reach default status over the next 12 months horizon is quite low for accounts which have 0 DPD and merely low for accounts with delay up to 30 DPD. Respective probabilities are higher for immature markets due to very strict default definition at 35 DPD. Additionally, debt collection process is structured in such way that the Group actively works with delaying clients at least 30 days. Recovery results show ~90% cure rate within 30 days for regular invoices. However, accounts with DPD 30 and more demonstrate probability to default within the next 12 months above 50% and thus based on the Group’s management judgement clearly have signs of SICR. The Group applies the rule that not more than 30 DPD should trigger backstop and transfer to Stage 2. It is set 30 DPD for matured countries lease portfolios, for African countries lease portfolios and consumer loan portfolios. For the sake of alignment with default definition for immature countries lease portfolios backstop is 25 DPD. Additionally, to reflect on significant increase in credit risk (SICR) in the case when DPD is not a sufficient indicator the Group have introduced Healing state. Healing state concept is applied for lease assets and car loans, and it is applied in the case of: - Lease contract recoveries during middle DC stage - after 30 delay days for matured counties and after 26 delay days for immature (2 months period from reporting date is observed). - Lease contract delaying 26-30 days for immature countries. - Lease contract renewal after termination or theoretical renewal (returning to active portfolio without terminating the agreement) after default (including countries without termination functionality). In these cases, 2 months period from reporting date is observed. - Only for immature Africa’s countries - restructurings due to credit reasons. In 2021 year, the Group decided to supplement healing bucket definition for Africa’s countries as a reaction on massive usage of such amendments as an effective DC tool. At current stage the Group cannot evaluate increase in credit risk for such cases due to insufficient history, therefor uses more prudent approach for balance staging. In such cases the exposures are included in Stage 2 for a period of two months. Afterwards SICR related to the event is settled and exposure is allocated to the stage based on DPD.

2. Material accounting policy information (continued)

Stage 1

When loans/leases are first recognized, the Group recognizes an allowance based on 12mECLs. The Group considers leases and loans that are current or with DPD up to 30 (up to 25 DPD in non-mature countries) as Stage 1. A healing period of 2 months is applied before an exposure previously classified as Stage 2 can be transferred to Stage 1 and such an exposure must meet the general Stage 1 DPD criteria above. Healing period concept is applicable to lease portfolios and car loans. Exposures are classified out of Stage 1 if they no longer meet the criteria above.

Stage 2

When a loan/lease has shown a significant increase in credit risk since origination, the Group records an allowance for the LTECLs. The Group generally considers leases, secured loans and car loans that have a status of 31-60 DPD (matured countries) and 26-34 DPD (non-matured countries) to being Stage 2. An unsecured loan is considered Stage 2 if DPD is in the range of 30 to 60 or 30 to 90 days for acquired businesses. Lease exposures remain in Stage 2 for a healing period of 2 months, even if they otherwise would meet Stage 1 criteria above during this period.

Stage 3

Leases and loans considered credit-impaired and at default. The Group records an allowance for the LTECLs. The Group considers a finance lease agreement, secured loan and car loans agreement defaulted and therefore Stage 3 in all cases when the borrower becomes 61 DPD (matured countries) or 35 DPD (non-matured countries) on its contractual payments or the lease/ loan agreement is terminated. The Group considers an unsecured loan agreement defaulted and therefore Stage 3 in all cases when the borrower becomes 91 days past due for acquired businesses on its contractual payments. The difference in default definition for unsecured consumer loan agreements is driven by different business processes, product set up and development history in greenfield and acquired operations. Debt collections practices applied in Latvia, Estonia, Armenia and Lithuania for leases and secured loans were transferred to unsecured operations, thus active in-house debt collections process runs until DPD 60. After that exposure is either sold, or legal execution starts, or settlement process is enabled. Acquired businesses have active in-house debt collections process running until DPD 90. After that exposure is transferred to external agencies for the debt collections. Later it is either sold or legal execution starts.

Macroeconomic shocks, geopolitical crisis, and other unpredictable situations: business adoption and reflection in Impairment, impact on SICR.

The first years of this decade have heralded a particularly disruptive period in human history. The return to a “new normal” following the COVID-19 pandemic was quickly disrupted by the outbreak of war in Ukraine, ushering in a fresh series of crises in food and energy - triggering problems that decades of progress had sought to solve. Majority of Group Countries returned to “older” risks as inflation, cost-of-living crises, widespread social unrest, geopolitical confrontation which negatively impacted Group’s operations and caused increase in credit risk. Analysing and evaluating Group’s responses to such non-standard situations in past, management decided to keep and maintain introduced during Covid-19 pandemic so-called TDR (temporary debt restructuring) program. Forbearance tools (TDR and restructuring, i.e., change of the original payment schedule) is almost the only feasible solution to reduce financial burden on customers crisis circumstances, thus fact of the forbearance as such does not lead to the recognition of SICR if customer pays according to new terms and later returns to the original schedule or close to it. Following the crisis situation Group’s management might decide to activate TDR program for certain market for defined period (from 3 to 6 months). In mentioned situation - cases where the Group has sound grounds to expect customer to return to the regular discipline not longer than in 12-month time should not be classified as SICR even if customer has been granted forbearance tool.

Temporary debt restructuring (TDR) and other forbearance tools:

1. Alternative schedule (AS) - a temporary reduction of monthly payment, typically not more than 50%. Customers use this option for several, e.g. 3-6 months in row.
2. Extension - is a payment holiday for 1 month. Customer pays extension fee (in some cases free extensions are possible) and returns to the original schedule in next 1-3 months.
3. Restructurings - permanent amendment of the schedule (term end increase, monthly payment decrease, interest decrease).

TDR is granted upon customer’s request. Customer is on TDR program if he complies with agreed terms (no SICR is recognized). If terms are breached customer returns to the original schedule and his credit risk is assessed as per actual DPD.

The calculation of ECLs

The Group calculates ECLs based on probability-weighted scenarios to measure the expected cash shortfalls, discounted at an approximation to the EIR. A cash shortfall is the difference between the cash flows that are due to the Group in accordance with the contract and the cash flows that the Group expects to receive. Key elements of the model are, as follows:

• PD The Probability of Default is an estimate of the likelihood of default over a 12 month or lifetime horizon (time horizon depends on ECL type - i.e. 12mECL or LTECL);
• the Default distribution vector (DDV) is the estimate of the time to default, more specifically it provides distribution of PD over the course of a 12 month or lifetime horizon; Specifically, how many defaulted loans during 12 months/ lifetime defaulted during 1st, 2nd, 3rd etc. month started from certain moment of time (evaluation starting point);
• EAD The Exposure at Default is an estimate of the exposure at a future default date, considering expected changes in the exposure after the reporting date, including repayments, whether scheduled by contract or otherwise;
• LGD The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the cash flows due at the moment of default and those that the lender would expect to receive, including from the realization of any collateral and deducting expenses related to cash collections or collateral realization processes. It is usually expressed as a percentage of the defaulted balance;
• lifetime period is estimated as average remaining contractual term of respective portfolio.

The Group may choose to use actual balance instead of EAD and do not apply DDV for the segments with the elevated credit risk. Significant judgments used for determining PD and LGD are described in Note 3. The Group employs multiplication model across all Stages for the ECL calculation: ECL=EADPDLGD*[DDV] Given that DDV is a multidimensional vector (generally 12 or 13 dimensions, but can be shorter if representative historical data is available for s a shorter period ) it is aggregated into one value before multiplication - [DDV]. DDV aggregated value is obtained as follows:

• each value of the DDV is multiplied with discount factor;
• discount factor is calculated in a regular way (e.g.# NPV formula), where discount is calculated on EIR of the portfolio and number of periods corresponds to the dimension of the respective DDV value; - [DDV] is the sum of all respective multiplications of DDV values with respective discount factors.

2. Material accounting policy information (continued)

Depending on the Stage the following specifics are applied to the general ECL model:

• Stage 1: The 12mECL is calculated. The Group calculates the 12mECL allowance using 12 months (or shorter if lifetime of the product is less than 12 months) PDs and DDV over the 12-month horizon. These 12-month default probabilities are applied to an estimated EAD and multiplied by the expected LGD and discounted by an approximation to the original EIR using DDV, in this way incorporating time to default into model.
• Stage 2: When a loan has shown a significant increase in credit risk since origination, the Group records an allowance for the LTECLs. The mechanics are like those explained above, but PDs and DDV are estimated over the lifetime of the instrument. The expected cash shortfalls are discounted by an approximation to the original EIR using DDV.
• Stage 3: For loans considered credit-impaired, the Group recognizes the LTECLs for these loans. The method is similar to that for Stage 2 assets, with the PD set at 100%.

ECL on restructured and modified loans

Some types of modifications performed to customers that serve to renegotiate terms of an agreement that was previously in default result in continued Stage 3 treatment during the one month healing period for mature countries followed by 2 months of healing period in Stage 2. For immature countries due to the nature of the default definition and lack of ability to renew terminated agreements, exposure enters Stage 2 directly. In case of modification for credit reasons prior to default (generally term extension), exposure is moved to Stage 2 for a healing period of 2 months.

Write off of unrecoverable debts

The Group considers any kind of receivable completely unrecoverable and writes off the receivable from balance sheet entirely if all legal actions have been performed to recover the receivable and the Group has no reasonable expectations of recovering the exposure.

Impairment of contract assets and financial assets other than lease receivables and loans and advances to customers

Further financial assets where the Group calculates ECL on an individual basis or collective basis are:

• Other receivables from customers/contract assets - on collective basis;
• Loans and advance payments to related parties - on individual basis;
• Trade receivables - on collective basis;
• Cash and cash equivalents - on individual basis;
• Deposits - on individual basis.

Financial assets are aggregated in categories considering the similarities of key risk characteristics and nature of each of these. The Group assesses the impairment for other receivables from customers/contract assets on a collective basis at country level. For the rest of financial assets other than finance lease receivables and loans and advances to customers the Group calculates ECL on an individual basis.

Impairment of other receivables from customers/contract assets

During the course of business, the Group may have other type of claims against its leasing customers. In such cases, considering the portfolio features, the ECL methodology of the related lease receivable is mirrored and the ECL mirrors the impairment of the lease receivable. The Group considers other receivables from customers/contract assets that are current or with DPD up to 25 as Stage 1. A healing period of 5 days is applied before an exposure previously classified as Stage 2 can be transferred to Stage 1. The Group generally considers other receivables from customers/contract assets that have a status of 26-34 DPD to be Stage 2 loans. The Group considers financial assets defaulted and therefore Stage 3 in all cases when the borrower becomes 35 DPD.

For other receivables and contract assets that are not related to lease portfolio receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The ECL recorded is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

Impairment for loans and advance payments to related parties, trade receivables

Receivables from related parties inherently are subject to the Group’s credit risk. Therefore, a benchmarked PD and LGD rate - based on Standard & Poor's corporate statistics studies has been applied in determining the ECLs. For related party exposures Stage 2 and lifetime ECL calculation is applied based on 30 day back stop and 90 day back stop is applied to Stage 3 determination. Further qualitative factors evaluated include extension of the payment terms granted, previous arrears in the last 12 months and significant adverse changes in business.

Impairment of cash and cash equivalents and deposits

For cash and cash equivalents default is considered as soon as balances are not cleared beyond conventional banking settlement timeline, ie., a few days. Therefore, transition is straight from Stage 1 to Stage 3 given the low number of days that it would take the exposure to reach Stage 3 classification, meaning default. For cash and cash equivalents no Stage 2 is applied given that any past due days would result in default. When calculating the impairment for a bank deposit, any loans or other credit facilities granted by the credit institution to the Group is being set off against the deposits if the bank has a contractual right to offset in case of resolution. Hence, the ECL is recognized on the net amount.

2. Material accounting policy information (continued)

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL or other financial liabilities that are measured at amortized cost. All financial liabilities are recognized initially at fair value plus, for an item not at FVTPL, directly attributable transaction costs. The Group’s financial liabilities include trade and other payables and loans and borrowings, including funding attracted through peer-to-peer platforms as well as subordinated borrowings.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

A financial liability is classified at FVTPL if it is classified as held for trading, it is a derivative or it is designated as such upon initial recognition. Net gains or losses, including any interest expense, on liabilities held at FVTPL are recognized in the statement of profit and loss. The Group has not designated any financial liability as at fair value through profit or loss.

Loans and borrowings

This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized; interest expense is recognized through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss. This category generally applies to interest-bearing loans and borrowings.

Subordinated borrowings

The Group recognizes liabilities as subordinated borrowings if it is an unsecured loan or bond that ranks below other, more senior loans or securities, and have lower payment priority than more senior debt. Accordingly, the claims of more senior debt holders must be satisfied before the holders of subordinated debt can be paid. In the case of default, creditors who own subordinated debt will not be paid out until after more senior creditors are paid in full. Borrowings are calssified as subordinated only if respective agreements contain dedicated clauses defining the borrowing as subordinated.

Modification of financial liabilities

For financial liabilities, the Group considers a modification substantial based on qualitative factors and if it results in a difference between the adjusted discounted present value and the original carrying amount of the financial liability of, or greater than, ten percent. If the modification is substantial, then a derecognition gain or loss is recorded on derecognition. If the modification does not result in cash flows that are substantially different the modification does not result in derecognition. Based on the change in cash flows discounted at the original EIR, the Group records a modification gain or loss.

Treatment of non-substantial modifications

If expectations of fixed rate financial liabilities’ cash flows are revised, then changes to future contractual cash flows are discounted at the original EIR with a consequential adjustment to the carrying amount. The difference from the previous carrying amount is booked as a positive or negative adjustment to the carrying amount of the financial liability on the consolidated statement of financial position with a corresponding increase or decrease in Interest revenue/expense calculated using the effective interest method. The carrying amount of the financial liability is adjusted if the Group revises its estimates of payments or receipts. If modification of a financial liability measured at amortized cost does not result in the derecognition a modification gain/loss is calculated. The adjusted carrying amount is calculated based on the original effective interest rate and the change in carrying amount is recorded as interest income or expense (Note 5).Changes in the contractual cash flows of the asset are recognized in statement of profit and loss and any costs or fees incurred adjust the carrying amount of the modified financial asset or liability and are amortized over the remaining term of the modified instrument. Therefore, the original EIR determined at initial recognition is revised on modification to reflect any costs or fees incurred.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss. The Group considers a modification substantial based on qualitative factors and if it results in a difference between the adjusted discounted present value and the original carrying amount of the financial liability of, or greater than, ten percent.

Equity - accounted investees

The Group interests in equity-accounted investees comprise investment in associate. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Interests in associates are accounted for using the equity method. They are initially recognized as cost, which includes transaction costs. As the Group gained significant influence over its associate after losing control over the investee, the deemed cost is the fair value of the interest retained subsequent to the loss of control. Subsequent to initial recognition, the consolidated financial statements include the Group's share of the profit or loss and other comprehensive income of the associate, until the date on which significant influence ceases. Unrealised gain arising from transactions with associate are eliminated against the investments to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

2. Material accounting policy information (continued)

Group as a Lessor - Finance lease

Whilst financial lease receivables that represent financial instruments and to which IFRS 16 applies are within the scope of IAS 32 and IFRS 7, they are only within the scope of IFRS 9 to the extent that they are (1) subject to the derecognition provisions, (2) ‘expected credit loss’ requirements, (3) the relevant provisions that apply to derivatives embedded within leases, and (4) relate to sale and leaseback transactions as outlined in this note under the title Sale and Leaseback Transactions.

Group is engaged in financial lease transactions by selling vehicles to its customers through financial lease contracts. The Group earns its profits predominantly from finance income over the lease term and not from initial selling profit.

At inception of a contract, the Group assesses whether the contract is, or contains, a lease. The inception of the lease is the earlier of the date of the lease agreement and the date of commitment by the parties to the principal provisions of the lease. As of this date:

• a lease is classified as a finance lease; and
• the amounts to be recognized at the commencement of the lease term are determined.

The commencement of the lease is the date from which the lessee is entitled to exercise its right to use the leased asset. It is the date of initial recognition of the lease (i.e. the recognition of the assets, liabilities, income or expenses resulting from the lease, as appropriate).

A lease is classified as a finance lease at the inception of the lease if it transfers substantially all the risks and rewards incidental to ownership. The inception of the lease is the earlier of the date of the lease agreement and the date of commitment by the parties to the principal provisions of the lease. As of this date:

• the lease transfers ownership of the asset to the lessee by the end of the lease term;
• the lessee has the option to purchase the asset at a price which is expected to be sufficiently lower than fair value at the date the option becomes exercisable that, at the inception of the lease, it is reasonably certain that the option will be exercised;
• the lease term is for the major part of the economic life of the asset, even if title is not transferred;
• at the inception of the lease, the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset.

Further indicators that individually or in combination would also lead to a lease being classified as a finance lease are:

• the lessee can cancel the lease, the lessor’s losses associated with the cancellation are borne by the lessee;
• gains or losses from the fluctuation in the fair value of the residual accrue to the lessee.

Initial measurement

At lease commencement, the Group accounts for a finance lease, as follows:

• derecognizes the carrying amount of the underlying asset; and
• recognizes the net investment in the lease.

Upon commencement of finance lease, the Group records the net investment in leases, which consists of the sum of the minimum lease payments receivable by a lessor under a finance lease, discounted at the interest rate implicit in the lease. The contracts with the customers stipulate that the title to the lease object passes to the lessee at the end of the lease term; hence, no unguaranteed residual value accrues to the lessor. The difference between the gross investment and the net investment is recorded as unearned finance lease income.

Initial direct costs, such as client commissions and commissions paid by the Group to car dealers, are included in the initial measurement of the lease receivables. Based on contractual provisions, prepayments and other payments received from customers are normally recorded in statement of financial position upon receipt and settled against respective client’s finance lease receivables agreement at the moment of issuing next monthly invoice according to the agreement schedule.

Subsequent measurement

Finance lease income consists of the amortization of unearned finance lease income. Finance lease income is recognized based on a pattern reflecting a constant periodic rate of return on the net investment according to effective interest rate in respect of the finance lease.

Group applies the lease payments relating to the period against the gross investment in the lease to reduce both the principal and the unearned finance income. The Group recognizes income from variable payments that are not included in the net investment in the lease (e.g. performance based variable payments, such as penalties or debt collection income) separately in the period in which the income is earned. The lease term does not reflect the lessee exercising an option to terminate the lease due to high termination fees and resulting low probability of option exercise. Such income is recognized under “Fee and commission income” (Note 6).

After lease commencement, the net investment in a lease is not remeasured unless the lease is modified and the modified lease is not accounted for as a separate contract or the lease term is revised when there is a change in the non-cancellable period of the lease. Group applies derecognition and impairment requirements in IFRS 9 to the net investment in the lease.

Group as a Lessor - Operating lease

Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit and loss. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned. No maintenance fee is charged to the customers.

2. Material accounting policy information (continued)

Group as a Lessee

Lease liability

Initial recognition

At the commencement date of the lease the Group measures the lease liability at the present value of the lease payments that are not paid at that date in accordance with lease term. Lease payments included in the measurement of the lease liability comprise:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
• amounts expected to be payable by the Group under residual value guarantees;
• the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising an option to terminate the lease.

The Group has elected for all classes of underlying assets not to separate non-lease components from lease components in lease payments. Instead Group accounts for each lease component and any associated non-lease components as a single lease component.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the incremental borrowing rate.# 2. Material accounting policy information

Lease term

Lease term is the non-cancellable period for which the Group has the right to use an underlying asset, together with both: (a) Periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and (b) Periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option. At the commencement date, the Group assesses whether it is reasonably certain to exercise an option to extend the lease or to purchase the underlying asset, or not to exercise an option to terminate the lease.

Subsequent measurement

After the commencement date, the Group measures the lease liability by:
- increasing the carrying amount to reflect interest on the lease liability;
- reducing the carrying amount to reflect the lease payments made; and
- remeasuring the carrying amount to reflect any reassessment or lease modifications specified, or to reflect revised in-substance fixed lease payments.

Right-of-use assets

Initial recognition

At the commencement date of the lease, the Group recognizes right-of-use asset at cost. The cost of a right-of-use asset comprises:
- the amount of the initial measurement of the lease liability;
- any lease payments made at or before the commencement date, less any lease incentives received;
- any initial direct costs incurred by the Group; and
- an estimate of costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are to produce inventories.

Subsequent measurement

Group measures the right-of-use asset at cost, less any accumulated depreciation and accumulated impairment losses; and adjusted for the remeasurement of the lease liability (which may take place when there is a change in future lease payments arising from a change in an index or rate, when there is change in estimated amounts payable under residual value guarantee or there is a change of assessment of extension, purchase or termination option). Depreciation of the right-of-use asset is recognized on a straight-line basis in profit or loss. If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

Group involvement with the underlying asset before the commencement date

If a Group incurs costs relating to the construction or design of an underlying asset, the lessee accounts for those costs applying other IFRS, such as IAS 16. Costs relating to the construction or design of an underlying asset do not include payments made by the lessee for the right to use the underlying asset. Group applies IAS 36 to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Initial recognition exemptions applied

As a recognition exemption the Group elects not to apply the recognition requirements of right-of-use asset and lease liability to:
(a) Short term leases - for all classes of underlying assets; and
(b) Leases of low-value assets - on a lease-by-lease basis.

For leases qualifying as short-term leases and/or leases of low-value assets, the Group does not recognize a lease liability or right-of-use asset. The Group recognizes the lease payments associated with those leases as an expense on either a straight-line basis over the lease term.

(a) Short term leases

A short-term lease is a lease that, at the commencement date, has a lease term of 3 months or less. A lease that contains a purchase option is not a short-term lease. This lease exemption is applied for all classes of underlying assets.

(b) Leases of low-value assets

The Group defines a low-value asset as one that:
1) has a value, when new of 5 000 EUR or less. Group assesses the value of an underlying asset based on the value of the asset when it is new, regardless of the age of the asset being leased.
2) the Group can benefit from use of the assets on its own, or together with, other resources that are readily available to the Group; and
3) the underlying asset is not dependent on, or highly interrelated with, other assets.

Sale and leaseback transactions

Group also engages in financing of vehicles already owned by the customers. Under such leaseback transactions the Group purchases the underlying asset and then leases it back to the same customer. Vehicle serves as a collateral to secure all leases. The Group applies the requirements for determining when a performance obligation is satisfied in IFRS 15 to determine whether the transfer of an asset is accounted for as a sale of that asset. If the transfer of an asset by the seller-lessee does not satisfy the requirements of IFRS 15 to be accounted for as a sale of the asset, the buyer-lessor shall not recognise the transferred asset and shall recognise a financial asset equal to the transfer proceeds. It shall account for the financial asset as loans and advances to customers by applying IFRS 9. The Group has performed SPPI test for its sale and leaseback arrangements. Vehicle serves as a collateral to secure all of such loans. Sale and leaseback contracts include contractual terms that can vary the contractual cash flows in a way that is unrelated to a basic lending arrangement. Such cash flows arise in the case or borrowers' default and are related to repossessed car sales for which any excess gains can be retained by the Group in certain jurisdictions and commissions and other fees charged to the customer that are not directly linked to outstanding principal/interest (e.g. external debt recovery costs being charged to clients with mark-up). Other contract elements relevant to SPPI assessment for components in certain jurisdictions include the leased asset repurchase options, where the option value is below the car market value at the moment of exercise and significant termination penalties for certain non-recourse contracts. The Group has made relevant judgements and concluded that SPPI test is met in all above circumstances as 1) repossession commissions and fees charged by the Group are intended to cover the costs incurred by the Group in the debt servicing process under regular lending model, 2) the fact that in certain jurisdictions the Group maintains proceeds from sale of repossessed car in excess of recovered exposure (if applicable) is not an evidence that the risk taken up by the Group is in fact the price risk of the car and not the credit risk. The Group is able to sell the collateral and keep any surplus only on default and the occasional trivial gains from the transaction are not the purpose of the core business model (which is to earn interest income from the loan asset) and are not the focus of the business, but instead are just an instrument to minimise the credit losses, 3) termination penalties for non-recourse sale and leaseback transactions charged to the customers in certain jurisdictions are also contractual elements intended to compensate for credit risk and do not result in any notable net gains to the Group.

Inventories

Inventories are valued at the lower of cost and net realizable value. Net realizable value represents the estimated selling price for inventories in the ordinary course of business less estimated costs necessary to make the sale. Inventories contain only vehicles which are purchased for the sole purpose of selling them to customers. Value of inventories is measured by using specific identification of individual unit cost. Disposal of each individual stock item is performed on sale of respective individual stock item.

Accrued revenue or expenses from currency trading

The Group recognizes accrued income or expenses from transactions of trading currency based on currency rates agreed for each currency hedging transaction. The difference between hedging rate and currency rate at year end is recognized as accrued income or expenses depending from mathematical result.

Assets held for sale

The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Assets held for sale includes vehicles which are obtained by enforcement of repossession in case clients default on existing lease agreements. Such repossessed collaterals are classified as held for sale and measured at the lower of their carrying amount and fair value less costs to sell (FVLCTS). Costs to sell are the incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense. Once classified as held-for-sale, vehicles are no longer depreciated. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification. Assets classified as held for sale are presented separately as current items in the statement of financial position.

Share premium

Share premium represents the amount subscribed for share capital in excess of nominal value.# Reserves

Luxembourg companies are required to allocate to a legal reserve a minimum of 5% of its annual net profit until this reserve equals 10% of the subscribed share capital. This reserve may not be distributed.

Lithuania companies are required to allocate to a legal reserve a minimum of 10% of its annual net profit until this reserve equals 10% of the subscribed share capital. This reserve may not be distributed.

Moldavian companies are required to allocate to a reserve capital amount in proportion of at least 5% of its annual net profit, until reserve capital equals 10% the amount of the share capital. The reserve capital of the company may be used only to cover losses or to increase its share capital.

Macedonian companies are required to allocate to a reserve capital amount in proportion of at least 5% of its annual net profit, until reserve capital equals 10% the amount of the share capital. The reserve capital of the company may be used only to cover losses or to increase its share capital. Reserve may be increased above 5% in order to meet capital adequacy ratio.

Romanian companies are required to allocate to a reserve capital amount in proportion of at least 5% of its annual net profit, until reserve capital equals 20% the amount of the share capital. The reserve capital of the company may be used only to cover losses or to increase its share capital.

Foreign currency translation reserve is used to record exchange differences arising from the translation of assets and liabilities of foreign operations.

Transactions with peer-to-peer platforms

Background

Certain subsidiaries, as loan originators, have signed cooperation agreements with operator of a peer-to-peer (P2P) investment internet-based platform. Cooperation agreements and the related assignment agreements are in force until parties agree to terminate. Purpose of the cooperation agreement for the Group is to attract funding through the P2P platform. The P2P platform makes it possible for individual and corporate investors to obtain a fully proportionate interest cash flows and the principal cash flows from debt instruments (finance lease receivables or loans and advances to customers) issued by the Group in exchange for an upfront payment. These rights are established through assignment agreements between investors and P2P platform, who is acting as an agent on behalf of the Group.

Assignment agreements are of two types:
1) Agreements with recourse rights which require the Group to guarantee full repayment of invested funds by the investor in case of default of Group’s customer (buy back guarantee);
2) Agreements without recourse rights which do not require the Group to guarantee repayment of invested funds by the investor in case of default of the customer (no buy back guarantee).

The Group retains the legal title to its debt instruments (including payment collection), but transfers a part of equitable title and interest to investors through P2P platform.

Receivables and payables from/to P2P platform

The P2P platform is acting as an agent in transferring cash flows between the Group and investors. The receivable for attracted funding from investors through the P2P platform corresponds to the due payments from the P2P platform. Receivable is arising from assignments made through P2P platform where the related investment is not yet transferred to the Group (Note 32). P2P platform commissions and service fees incurred by the Group are fees charged by P2P platform for servicing the funding attracted through peer-to-peer platform and are disclosed in Note 9.

2. Material accounting policy information (continued)

Funding attracted through peer-to-peer platform

Liabilities arising from assignments with or without recourse rights are initially recognized at cost, being the fair value of the consideration received from investors net of issue costs associated with the loan. Liabilities to investors are recognized in statement of financial position caption Funding attracted through peer-to-peer platform (Note 38) and are treated as loans received. After initial recognition the funding attracted through peer-to-peer platform is subsequently measured at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses are recognized in the statement of profit and loss as interest income/ expense when the liabilities are derecognized. The Group must repay to the investor the proportionate share of the attracted funding for each debt instrument according to the conditions of the respective individual agreement with the Group’s client, which can be up to 72 months.

Assignments with recourse rights (buy back guarantee)

Assignments with recourse rights provide for direct recourse to the Group, thus do not meet the requirements to be classified as pass-through arrangement in accordance with IFRS 9. Specifically, neither investors, nor the P2P platform bear any risks in relation to creditworthiness of the Group's borrower. The Group is obliged, on first demand of the P2P platform, to repay all monies due if loan agreement with borrower defaults . Additionally, the Group retains the risks and rewards of ownership of the financial asset. Therefore, the Group’s respective debt instruments do not qualify to be considered for partial derecognition and interest expense paid to investors is shown in gross amount under Interest expense calculated using effective interest method (Note 5).

Assignments without recourse rights (no buy back guarantee)

On the contrary, assignments without recourse rights (the Group is not obliged to reimburse neither to investors nor to P2P platform if the borrower defaults) are arrangements that transfer to investors substantially all the risks and rewards of ownership equal to a fully proportionate share of the cash flows to be received from Group’s debt instruments. Therefore such arrangements are classified as pass-through arrangements in accordance with IFRS 9. As such, a fully proportionate share, equal to investor’s claim in relation to the related debt instrument, is derecognized. The derecognized part is accounted as an off-balance sheet item (Note 38) and interest income is recognized to the extent of being the residual interest. Residual interest is the difference between the interest earned on the respective debt instrument by the Group and the respective share of interest earned by the investor.

Provisions

In accordance with IAS 37, provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of provisions to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as finance cost. The key provisions the Group recognizes are provisions for tax positions disputed with tax authorities.

Contingent assets and contingent liabilities

Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognized in the financial statements but disclosed when an inflow of economic benefits is probable.

Share-based payments

The Group may grant share options of Subsidiaries to its employees. Share options are generally awarded on the first day of employment. A share-based payment is primarily a payment in equity instruments of the entity. Under certain circumstances there are cash settlement alternatives which are subject to cash settlement events occurring or entity’s choice in certain scenarios. Given absence of an ongoing sale of subsidiaries or Eleving Group S.A., any listing process initiated and any other relevant cash settlement events, the cash settlement is considered not to be probable. The Group does not have a present obligation to settle in cash, therefore awards are classified as equity settled. The Group does not have a past practice of cash settlement for these awards.

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognized in employee benefits expense, together with a corresponding increase in equity (other capital reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit and loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

2. Material accounting policy information (continued)

No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met.# 2. Material accounting policy information

Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense, measured as at the date of modification, is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.

Expenses are recognized as incurred.

Expenses are recognized net of the amount of value added tax. In certain situations value added tax incurred on a services received or calculated in accordance with legislation requirements is not recoverable in full from the taxation authority. In such cases value added tax is recognized as part of the related expense item as applicable. The same principles is applied if value added tax is not recoverable on acquisition an asset.

Revenue is recognized in accordance with the related standard’s requirements and to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.

The effective interest rate method

For all financial instruments measured at amortized cost interest income or expense is recorded at the effective interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability. The calculation takes into account all contractual terms of the financial instrument and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. When a financial asset becomes credit-impaired and is regarded as ‘Stage 3’, the Group calculates interest income by applying the EIR to the net amortized cost of the financial asset. If the financial asset cures and is no longer credit-impaired, the Group reverts to calculating interest income on a gross basis.

Income from cession of bad debt

Gain or loss from sale of doubtful financial lease receivables and loans and advances to customers is presented on net basis under ” Net loss from de-recognition of financial assets measured at amortized cost”. Gains or losses arising on cession deals are recognized in the statement of profit and loss at transaction date as the difference between the proceeds received and the carrying amount of derecognized lease receivables assigned through cession agreements.

Expenses related to attracting funding

Expenses related to attracting funding consists of administration fee for using peer-to-peer platform. Expenses are charged monthly and recognized in Group's statement of profit and loss when they occur.

Revenues and expenses from contracts with customers

Revenue from contracts with customers in scope of IFRS 15 encompasses sold goods or services provided as output of the Group’s ordinary activities. The Group uses the following criteria to identify contracts with customers:
- the parties in the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and are committed to perform their respective obligations;
- can be identified each party’s rights regarding the goods or services to be transferred;
- can be identified the payment terms for the goods or services to be transferred;
- the contract has commercial substance (i.e. the risk, timing or amount of the entity’s future cash flows is expected to change as a result of the contract);
- it is probable that the Group will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Performance obligations are promises in the contracts (either explicitly stated or implied) with Group’s customers to transfer to the customers distinct goods or services. Promised goods or services represent separate performance obligations if the goods or services are distinct. A promised good or service is considered distinct if the customer can benefit from the good or service on its own or with other readily available resources (i.e. distinct individually) and the good or service is separately identifiable from other promises in the contract (distinct within the context of the contract). Both of these criteria must be met to conclude that the good or service is distinct. The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated.

In determining the transaction price for the sale of equipment, the Group considers the effects of variable consideration, the existence of significant financing components, noncash consideration, and consideration payable to the customer (if any).

The Group recognizes revenue when (or as) it satisfies a performance obligation to transfer a promised good or service to a customer. Revenue is recognized when customer obtains control of the respective good or service. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

Revenue from satisfied performance obligations is recognized over time, if one of the following criteria is met:
- customer simultaneously receives and consumes the benefits;
- customer controls the asset as it is created or enhanced;
- the Group’s performance creates an asset and has a right to payment for performance completed.

Payment terms for goods or services transferred to customers according to contract terms are within 45 to 60 days from the provision of services or sale of goods. The transaction price is generally determined by the contractually agreed conditions. Invoices typically are issued after the goods have been sold or service provided.

Key revenue streams the Group generates relate to provision of goods or services provided directly to end customer with no third party service/product provider involved. In such transactions the Group acts as a principal. However, for certain services, where other parties are involved, as described below, the Group performs assessment whether it acts as an agent or a principal. Such revenue streams include income from debt collection activities, income from providing registration services and income from agency services as described below.

When another party is involved in providing goods or services to the Group's customers, the Group considers that it is a principal, if it obtains control of any one of the following:
a) a good or another asset from the other party that it then transfers to the customer;
b) a right to a service to be performed by the other party, which gives the entity the ability to direct that party to provide the service to the customer on the entity's behalf - relevant for car registration income to conclude on principal presentation;
c) a good or service from the other party that it then combines with other goods or services in providing the specified good or service to the customer - relevant for debt collection income to conclude on agent presentation.

Fee and commission income (Note 6)

Income from debt collection activities and earned penalties (point in time)

Fee and commission income arises from contracts with customers. Accordingly, it results in a recognized financial instrument in the Group's financial statements that is partially in scope of IFRS 9 and partially in scope of IFRS 15. Therefore, the Group first applies IFRS 9 to separate and measure the part of the contract that is in the scope of IFRS 9 and then applies IFRS 15 to the residual.

Income from debt collection activities and penalties is recognized in Group's statement of profit and loss at the moment when the likelihood of consideration being settled for such services is high, therefore income is recognized only when actual payment for provided services is actually received.

Income from penalties arise in case customers breach the contractual terms of financial lease receivables and loans and advances to customers agreements, such as exceeding the payment date. In those situations Group is entitled to charge the customers in accordance with the agreement terms. The Group recognizes income from penalties at the moment of cash receipt as likelihood and timing of settlement is uncertain. In case customers do not settle the penalty amount, the Group is entitled to enforce repossession of the collateral.

Debt collection activities revenue typically arises when customers delay the payments due. As a lessor, the Group has protective rights in the lease agreements with customers that require the customers to safeguard and maintain the condition of the vehicle, as it serves as a collateral to the lease. Group’s revenue encompasses a compensation of internal and external costs incurred by the Group in relation to debt management, legal fees as well as repossession of vehicle in case of lease agreement termination and are recharged to the customers in accordance with the agreement terms. The performance obligation is satisfied when respective service has been provided.

Income from commissions (point in time)

Income from commissions arises from additional services provided by the Group to its customers.## 2. Material accounting policy information (continued)

Revenue from providing registration services (point in time)

In certain countries, the Group provides vehicle registration services to its customers. The Group organizes the registration of the leased vehicles in with the state authorities on behalf of the customer, which is a separate service provided by the Group. Typically these services are performed before customers enter the finance lease agreements. Income from providing these services is recognized at the moment of providing the services. In majority of countries such services are not provided by the Group, as the customers perform registration procedures themselves and costs are covered by the customers directly without the need for such services from the Group. The performance obligation is satisfied when the respective service has been provided.

Revenue from car sales and other goods (Note 11)

Sale of motor vehicles and other goods (point in time)

The Group earns part of its revenues from the sales of used vehicles that were either bought from third parties or repossessed from its non-performing leasing customers. The Group is calculating minimum sales price based on initial cost or value after repossession plus additional cost incurred (e.g. repairs) and a margin added in order to make profit from the deal. The performance obligation is satisfied when the car is registered on client’s name. Similarly the Group is selling mobile phones in Africa region.

Other operating income (Note 14)

Income from management services (over time)

The Group provides management services to its related parties. Income is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for providing these services. The performance obligation is satisfied as the respective service is being provided.

Revenue from agency services (point in time)

Agency services consist of different services, such as settlement of costs on behalf of 3rd parties and recharging those costs to customers. The Group is acting as an agent in provision of these services to the customers. Such services are provided with the intention to realize the economies of scale of purchasing power for a service that is both used by the Group and the 3rd party. The Group recognises revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specified services to be provided by the other party. The performance obligation is satisfied when the respective service has been provided.

Variable consideration revenue from client acquisition (point in time)

The Group has entered into a contract with JSC Primero Finance on providing commercial client acquisition services with the variable component of the contract on 26 September, 2019. The fee is paid on all concluded agreements with clients. The fee consists of two elements - fixed and variable. Fixed fee is set as % from total loan amount and is invoiced every month based on concluded agreement list for previous month. Variable fee part is an additional fee and is set as percentage dependant on the specific annual percentage rate (APR) threshold for each individual concluded agreement. The fixed and variable part of client acquisition fee is calculated and invoiced monthly. The revenue from the fixed part of the fee is recognized at point in time as the corresponding performance obligations are satisfied, and there is no significant judgement applied to determine the transaction price or the satisfaction of the performance obligations. The additional client acquisition fee is determined to be a variable consideration as it is based on the individual APR of each concluded agreement. In the case of loan defaults, the parties agreed to measure the default loss. In the cases when not all outstanding debt has been covered after the collateral sale, the Group returns part (proportional to the uncovered debt) of the additional fee, which has been invoiced to JSC Primero Finance.

Contract balances

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration. As at 31 December 2023 the Group did not have any contract assets in its consolidated statement of financial position.

Trade receivables

A receivable represents the Group’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). These receivables are disclosed in balance sheet caption 'Trade receivables' (Note 31). Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days. Accounting policies applicable to financial assets measured using amortized cost are applicable as described above in Note 2.

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are extinguished and revenue is recognized when the Group performs under the contract. As at 31 December 2023 the Group does not have any contract liabilities in its consolidated statement of financial position.

Income taxes

Income taxes include current and deferred taxes. Income taxes are recognized in profit and loss except to the extent that they are related to a business combination, or items recognized directly in equity or other comprehensive income. Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes. It is measured using tax rates enacted or substantively enacted at the reporting date in the countries where the Group and the Parent Company operates. Current corporate income tax rate for the Parent company is applied at the statutory rate of 24.94%. Current corporate income tax rates for the foreign subsidiaries are:

Country	Tax rate	Country	Tax rate
Estonia*	20%	Moldova	12%
Latvia*	20%	Albania	15%
Lithuania	15%	Belarus	20%
Georgia*	15%	Ukraine	18%
Poland	19%	Uzbekistan	7.5%
Romania	16%	North Macedonia	10%
Kenya	30%	Bosnia&Herzegovina	10%
Uganda	30%	Lesotho	25%
Botswana	22%	Eswatini	27.5%
Zambia	30%	Namibia	32%
Mauritius	15%

• • as described further below corporate income tax in these countries is paid on distributed profits and deemed profit distributions only.

Deferred tax assets and liabilities

Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of transaction affects neither accounting nor taxable profit / loss. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. In Latvia, Estonia and Georgia deferred tax assets and liabilities are not recognized starting from 2017 or before in accordance with local legislation. Accordingly, deferred tax assets and liabilities which were calculated and recognized previously have been reversed through the statement of profit and loss and other comprehensive income in the year when the legislation was amended (for Latvia: 2017). In Latvia legal entities are not required to pay income tax on earned profits starting from 1 January 2018 in accordance with amendments made to the Corporate Income Tax Law of the Republic of Latvia. Corporate income tax is paid on distributed profits and deemed profit distributions. Consequently, current and deferred tax assets and liabilities are measured at the tax rate applicable to undistributed profits. Starting from 1 January 2018, both distributed profits and deemed profit distributions are subject to the tax rate of 20 per cent of their gross amount, or 20/80 of net expense.# Corporate income tax on dividends is recognized in the statement of profit and loss and other comprehensive income as expense in the reporting period when respective dividends are declared, while, as regards to other deemed profit items, at the time when expense is incurred in the reporting year. Similar accounting policies are adopted in Estonia and Georgia.

Related parties

The parties are considered related when one party has a possibility to control the other one or has significant influence over the other party in making financial and operating decisions. Related parties of the Group are shareholders who could control or who have significant influence over the Group in accepting operating business decisions, key management personnel of the Group including members of Supervisory body - Audit committee and close family members of any above-mentioned persons, as well as entities over which those persons have a control or significant influence. The Group has defined that a person or a close member of that person’s family is related to a reporting entity if that person:

- has control or joint control of the reporting entity;

- has significant influence over the reporting entity; or

- is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

2. Material accounting policy information (continued)

An entity is related to a reporting entity if any of the following conditions applies:

- The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

- One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

- Both entities are joint ventures of the same third party;

- One entity is a joint venture of a third entity and the other entity is an associate of the third entity;

- The entity is a post‑employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity;

- The entity is controlled or jointly controlled by a person identified in (a);

- A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity);

- The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.

Non-controlling interest

Non-controlling interest is that part of the net results and of the equity of a subsidiary attributable to interests which are not owned, directly or indirectly, by the Group. Non-controlling interest forms a separate component of the Group’s equity. Non-controlling interest are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.

Dividend distribution

Dividend distribution to the shareholders of the Group is recognized as a liability and as distribution of retained earnings in the financial statements in the period in which the dividends are approved by the shareholders as the Group has the obligations to pay the dividend which cannot be withdrawn.

Subsequent events

Post-period-end events that provide additional information about the Group’s position at the statement of financial position date (adjusting events) are reflected in the consolidated financial statements. Post-period-end events that are not adjusting events are disclosed in the notes when material.

3. Significant accounting judgments, estimates and assumptions

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses, and disclosure of contingencies. The most significant areas of estimation and judgement used in the preparation of the consolidated financial statements include assumptions used in Goodwill and other non-financial asset impairment tests, Impairment of financial assets, Determination of fair values and judgements around Going concern and military conflict in Ukraine impact assessment. They are described below among other estimates and judgements used in the preparation of these consolidated financial statements. Although these estimates and conclusions are based on the management’s best knowledge of current events and actions, the actual results may ultimately differ from those estimates.

Principal versus agent assessment

In provision of agency services (Note 14) the Group has assessed that it does not obtain control of these services before they are transferred to customers, as these services or goods are acquired on their behalf. Therefore, it is considered agent in these transactions. The Group is also acting as an agent in purchasing specific goods and services from 3rd parties on behalf of customers - mainly legal, recruitment and similar services, as it does not obtain control of the service, does not incur inventory risk nor has discretion in determining the sales price. For all other revenue streams the Group concluded that it acts as a principal. Other revenue streams where the Group involves third parties in the provision of services include income from debt collection activities (Group acts as an agent as it does not control the service before it is provided to the customer) and income from car registration services (Group acts as a principal as it controls the asset being registered for the prospective customer).

3. Significant accounting judgments, estimates and assumptions (continued)

Goodwill and other non-financial asset impairment tests

The calculation of value in use for cash generating units among other is sensitive to the assumptions of discount rate and growth rates. These assumptions and their sensitivity are outlined in Note 21.

Determination of the FVLCTS of assets held for sale

Determination of the FVLCTS for repossessed vehicles is performed on an individual basis at the moment of the repossession. Management's estimate is based on available data from historical sales transactions for such assets in previous reporting periods. The Group also considers factors such as historical actual average loss (if any) from the previous years. Management considers whether also events after the reporting year indicate a decline in the sales prices of such assets. See further information in Note 35.

Estimation of the residual value of rental fleet

The Group assesses at each reporting date whether there is an indication that the expected residual value of the rental fleet asset at the end of the current rental period may not be recoverable. The residual value is an estimate of the amount that could be received from disposal of the vehicle at the reporting date if the asset were already of the age and in the condition that it will be in when Group expects to dispose of it (i.e. after expiration of the ultimate lease period, if any). Therefore, if any indication exists, in order to determine the recoverable amount for rental fleet assets, the management uses valuation models based on two methods primarily depending from the status of the lease agreement:

1) value in use (VIU) - for assets with active lease agreements; and

2) fair value less costs of disposal (FVLCOD) - for assets with inactive lease agreements.

VIU is the present value of the future cash flows expected to be derived from an asset or cash generating unit, both from its continuing use and ultimate disposal. In assessing VIU, the estimated future cash flows are discounted to their present value using WACC. In measuring VIU the Group bases its cash flow projections on reasonable and supportable assumptions that represent management’s best estimate of the range of economic conditions that will exist over the remaining useful life of the asset covering in total 7-year period. For assets with an inactive lease agreement the Group applies probability-weighted scenario in determining the possible future use of vehicles - secondary rent or disposal. The outcome of the probability-weighted scenario has been determined based on the Group’s/Company’s historical data. According to management assessment, the carrying amount of secondary rent assets is expected to be recovered principally through a continuing use of it rather than sale transactions, therefore VIU method has been applied. For assets with an inactive agreement, for which the carrying amount is expected to be recovered principally through disposal, the Group determines the residual value based on FVLCOD method. Assumptions applied for determination of the FVLCOD of assets are based on making a reliable estimate of the price at which a transaction to sell the asset would take place between market participants at the measurement date under current market conditions and on available data from historical sales transactions. The market price is being adjusted for car repair costs, which are estimated based on historical data for an average vehicle repair expenses occurred in 2022. In addition, management considers whether events after the reporting year indicate a decline in the sales prices of such assets. Costs of disposal are incremental costs directly attributable to the disposal of an asset or cash generating unit, excluding finance costs and income tax expense. For assets an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased.# 3. Significant accounting judgments, estimates and assumptions (continued)

Impairment of finance lease receivables and loans and advances to customers

The Probability of Default (PD)

The Probability of Default is an estimate of the likelihood of default over a given time horizon, where default is defined as:
1. 61 DPD (Finance lease receivables and secured loans, matured countries)
2. 35 DPD (Finance lease receivables and secured loans, non-matured countries)
3. 61 DPD Loans and advances to customers (unsecured loans, car loans)
4. 91 DPD Loans and advances to customers (unsecured loans, acquired businesses).

In order to estimate PDs the Group utilizes Markov chains methodology. This methodology employs statistical analysis of historical transitions between delinquency buckets to estimate the probability that loan will eventually end up in default state which is set as absorbing state. The Group uses 12-months continuous horizon window (or smaller if actual lifetime of the product is shorter), and estimation over lifetime is defined as nth power of 12-months matrix (n - depends on the estimated lifetime, e.g., if lifetime is 36-months then n=3). Exposures are grouped into buckets of days past due (DPD) loans/leases.

Forward-looking macroeconomic indicators model for portfolio

Guided by IFRS 9, the Group assesses forward looking information and incorporates it into impairment model. Impairment change is modelled given expected future changes of macroeconomic factors’ (hereinafter macro model). In 2021 the Group changed Hierarchical Bayes model approach to simplified approached based on relation analysis between changes in input variables and changes in PD and the Group expert’s opinion. Macro model uses several assumptions which were agreed by group of experts. Model assumptions and historical periods for macroeconomic factors are reviewed and analyzed once per year considering available macroeconomic outlooks.

General description of the model

Macro model uses expected changes in macroeconomic indicators and assumes the same or similar change to Stage 1 PD. Model incorporates three macro indicators - unemployment rate, inflation rate and GDP annual growth rate, as more relevant for private individuals’ financial stability evaluation. The model is based on actual and forecasted data points. Recalculated in December 2023 model includes macroeconomic indicators as of 2023 Q4 and average of all four 2024 quarter forecasts to predict the effect on Stage 1 PD. Data points average is taken to avoid significant indicator fluctuations due to forecast volatility. The Group built macroeconomic models for each country and business (vehicle/consumer) individually - LV, LT, EE, GE, AM, UZ, KE, UG, MD, RO, BY, MK, AL, LES, ZM, NM, BOT. Data for all cases is taken from the source: https://tradingeconomics.com/indicators. Forecasts are validated by National Banks forecasts. For each macro indicator three scenarios are obtained - base, best and worse. Base scenario is based on actual data and forecasts. Worse and best scenario is obtained from base scenario increasing or decreasing base scenario by confidence interval of given macro indicator forecast. For each scenario is applied probability of occurring. The impact on PD from each macro indicator is calculated as weighted output across all three scenarios. As for all input macro indicators are applied weights according to their significance to the default rates of the Group customers then the final model output is obtained as sum of weighted output across all macro indicators.

Model’s variables and assumptions

The model includes indicators which, based on the Group experts’ opinion and used practice in industry, might have a significant impact on finance products default rates. Such indicators are also widely used by banking and non-banking industry across the world:
1. GDP growth
2. unemployment rate (UR) change
3. inflation rate (IR) change.

There are several assumptions made in the model to accommodate the Group customer specifics.

Assumption 1. UR is one of the main variables in the model, and it significantly affects Stage 1 PD.
Assumption 2. Okun’s law holds in macro environment affected by macro-economic shocks.
Assumption 3. Typically, reasonably increasing inflation rate positively affects consumption and economy in general, and therefore reduces PD. However, the Groups customers rather suffers from increase in prices than benefit from income increase. Thus, the Group arrived at the assumption 3: increase in inflation in will affect customers negatively.

Determination of impact on PD based on macro indicator change

The model assumes relation between changes in macro indicators and Stage 1 PD change. If there is strong correlation between Stage 1 PD and macro indicator change then used linear regression equation to determine the impact on PD due to macro indicator changes. If there is no visible correlation between Stage 1 PD and macro indicators change then impact on PD is evaluated based on qualitative analysis of available data and reasonable experts’ assumptions:
1. For each macro indicator chosen 25 data points, one 0 point and another 24 points that reflects indicator change - 12 points with negative change and 12 data points with positive change. The distance between 2 adjacent points is the same for all 24 points and is evaluated considering historical changes in macro indicators.
2. For PD impact determination relational table is built that describes linear or piecewise smooth function and its direction changes at 0 point. At 0 point assumed 0 PD impact. For other macro indicator change points impact on PD is evaluated individually based on historical PD rates and PD change in time, as well taking into account each country and product specifics. Then evaluated PD impacts on each macro indicator change point are summarized in table. This table remains fixed until the next year when impact on PD will be reviewed.

3. Significant accounting judgments, estimates and assumptions (continued)

Weighted scenarios approach

To take into account possible economic fluctuations and uncertainty, three scenarios are considered and used for final calculation to arrive at weighted average probability:
1. base case scenario - based on actual data and forecasts by external source.
2. worst case scenario - based on expert judgement of potential worsening of macroeconomic indicators.
3. best case scenario - based on expert judgement of potential improvement of macroeconomic indicators.

Worse and best scenario is obtained from base scenario increasing or decreasing base scenario by confidence interval of given macro indicator forecast. Confidence intervals are available for each macroeconomic indicator forecast. Each scenario also has a specific probability of occurring, which is configurable for each country separately to account for potential differences in macroeconomic outlooks. The Group’s experts analyse Europe and World macroeconomic projections and opinions (for example [1], [2], [3]). The global economy is experiencing several turbulent challenges. Inflation higher than seen in several decades, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook. Normalization of monetary and fiscal policies that delivered unprecedented support during the pandemic is cooling demand as policymakers aim to lower inflation back to target. But a growing share of economies are in a growth slowdown or outright contraction. The global economy’s future health rests critically on the successful calibration of monetary policy, the course of the war in Ukraine, and the possibility of further pandemic-related supply-side disruptions. Considering mentioned information, the Group applies at least 15% probability for worst-case scenario and only 5% for best-case. Last updated forecasts for macroeconomic indicators already reflect actual trends, for example - increase in inflation rate. At this stage base-case scenario is considered as a most possible but should be reviewed for Q2. Sensitivity test was done to evaluate impact from scenarios probability change.Changing worst-case scenario probability till 50%, no major effect on macro coefficient noticed. But, considering uncertainty in projections, macro coefficient was increased by 2pp for Eurozone countries.

Macro model results

To obtain final effect on PD from macro indicator change, applied weights for each macro indicator and the final result is taken as a weighted average of macro indicator PD effect. Weights are changed based on their significance in affecting default rate overall. Considering model main assumptions, the Group’s experts evaluate historical relationship and chooses weights for each country individually. In most of the countries UR (unemployment rate) and IR (inflation rate) chosen as main macro indicators and higher weights are applied for them. To account for future uncertainty in case the model yields positive PD correction, the Group decided to be prudent and not to apply improving PD effect for impairment correction.

Illustration of example: UR impact evaluation on PD:

Scenarios	Current rate	2Y forecast	Difference (p.p.)	Likelihood of the scenario	Impact on PD
Worst case scenario	7.400%	8.50%	1.1pp	15%	109.6%
Base case scenario	7.400%	7.40%	0pp	80%	100.0%
Best case scenario	7.400%	6.30%	-1.1pp	5%	93.7%
Final macroeconomic correction				100%	101.1%

Loss Given Default

Group closely following recoveries from defaulted finance lease receivables and revises LGD rates every month for portfolios based on actual recoveries received.

• The sample used for LGD calculation consists of all the finance lease receivables that have been defaulted historically. If termination of the contract happens before default state is reached, then loan is considered defaulted (early default) and it is considered in LGD sample. Subsequent recoveries on such loans are monitored on a monthly basis. Recoveries from regular collections process, car sales, cessions and legal process are followed.
• Renewed leases (restored payments capacity after termination) also affect the LGD rate by incorporating recovered cash after renewal of the agreement and comparing it to the exposure at default of the agreements subsequently renewed, implying the cure rate. Cure rate from renewals is calculated over a three-year period. For the 31 December 2023 impairment purposes recovery rate for renewed cases were applied in range of 76% to 98% depending on the market.

Above described LGD rate is used for all portfolio groups except for unsecured portfolio part. For unsecured portfolio part LGD is estimated using triangular recovery matrix on all unsecured cases. Received recovery is discounted with effective interest rate depending on the number of months between the date account got unsecured status and the date when recovery was received. Given that majority of the car sales happen before unsecured status, the LGD for unsecured portfolio is higher than for other buckets - as of 31 December 2023 Group average LGD unsecured for portfolios with DPD less than 360 DPD was 66%, respective LGD for portfolio older than 360 DPD was 94%.

Loans and advances to customers (unsecured loans, car loans)

For unsecured loans LGD is determined based on debt sales market activity and offered prices or based on historical recoveries. For the later stages (DPD 360) LGD is set to 100%.

Loans and advances to customers (unsecured loan, businesses acquired in 2020 and 2023)

LGD is calculated using the triangle recovery matrix built on all defaulted loans. Received recovery is discounted with effective interest rate depending on the number of months between the date account got into default and the date when recovery was received. For later stages (DPD 360) LGD is set to 100%.

3. Significant accounting judgments, estimates and assumptions (continued)

Exposure at default (EAD) modelling

Exposure at default is modelled by adjusting the unpaid balance of lease and loan receivables as at the reporting date by expected future repayments during the next 12 months. As of 31 December 2023, it is applied for Stage 1 exposures only. This is performed based on contractual repayment schedules, adjusted for historical prepayment rate observed. Historical prepayment patterns are assumed to be a reliable estimate for future prepayment activity.

Loans and advances to customers (unsecured loan, businesses acquired in 2020 and 2023)

EAD is calculated using the sample of defaulted loans. Outstanding balance of defaulted loans is divided by outstanding balance of the same accounts 12 months ago. Observation window can be shortened; however, it cannot exceed 12 months to avoid overestimation of EAD which may lead to underestimation of ECL. As of 31 December 2023, EAD is applied for Stage 1 and Stage 2.

Impairment for loans to and receivables from related parties

Receivables from related parties inherently are subject to the Group’s credit risk. Therefore, a benchmarked PD and LGD rate - based on Standard & Poor's corporate statistics studies has been applied in determining the ECLs. Significant increase in credit risk for related party transactions is determined based on information available in the Group about the financial performance of the related parties. Financial position of related parties as at impairment assessment date is compared to that when the exposure was originated. Further 30 days past due back stop indicator is utilized to transfer exposures to Stage 2.

Recoverability of deferred tax asset

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The deferred tax assets are recognized based on profitability assumptions over 3 year horizon. In developing these assumptions the Group considers both positive and negative evidence of past performance and future development plans to ensure that assumptions used are reasonable, realistic and achievable. The future taxable profit of 2024-2025 has been approved by the Management Board, while 2026 is considered as plausible taxable profit of the Group. Budgeting models used are the same as the ones used in goodwill impairment tests. At each reporting date, the Group’s management analyses the recoverability of deferred tax and reduces the deferred tax asset if it is no longer probable that during the period of utilization of tax losses future taxable profits will be available against which unused tax losses can be utilized (Note 18).

Capitalization of development costs

For capitalization of expenses in process of developing Group's enterprise resource planning (ERP) system and other IT systems management uses certain assumptions. Capitalization of salary expenses of IT personnel is based on employee time sheets and personnel involved in development dedicate up to 80% of their time on developing new functionality. Therefore up to 80% of salary expenses of involved personnel are capitalized under Other intangible assets while remaining 20% are recognized as salary expenses in Statement of profit and loss. Expenses from amortization of capitalized development costs are included in statement of profit and loss caption "Administrative expense". See further information in Note 21.

Separation of embedded derivatives from the host contract

The Group has certain call and put option arrangements that can accelerate repayment of the issued bonds. These options arise out of bond (host contract) prospectus and meet the definition of an embedded derivative in accordance with IFRS 9. Call option, which is included in Latvian bond prospectus, gives the Group the right, but not the obligation to carry out early redemption, either in full or partially, of the issued bonds with a 1% premium. There is also a put option possibility in case (i) certain financial covenants are breached (ii) Interest and/or Nominal Amount payments have not been missed and (iii) the Issuer has been declared insolvent or has submitted an application for liquidation, then each bondholder has the right to request that all, or only some, of its Latvian bonds are repurchased at the nominal amount plus accrued unpaid interests and Default Interest. There are also call and put options included in Eurobond prospectus. The Group may redeem all of the outstanding Eurobonds in full prior to the their maturity date, at the make whole amount if the call is exercised before 18 October 2023; 104.75 percent of the nominal amount if such redemption right is exercised after the first call date up to 18 October 2024; at 102.375 percent of the nominal amount if is exercised after the second call date up to up to 18 October 2025; and 100% of the Nominal Amount if the call option is exercised after 18 October 2025. There is also a put option possibility in case of change of control event, breach of certain financial covenants, ultimate beneficial owner of the Group being included into a sanction list of the European Union and the USE, then each bondholder has the right to request that all, or only some, of its Eurobonds are repurchased at a price of 101.00 percent of the nominal amount plus accrued unpaid interests. The Group’s management has evaluated that the embedded derivatives are not contractually separable, not contractually transferrable independently and have the same counterparty. Each option’s exercise price is approximately equal on each exercise date to the amortized cost of bond, therefore these embedded derivatives are not separated from the host contract.

3. Significant accounting judgments, estimates and assumptions (continued)

Fair value of employee share options

The Group’s employees have entered a share option agreement with the Parent Company or the Parent Company’s shareholders and Subsidiaries.# 3. Significant accounting judgments, estimates and assumptions (continued)

Under the agreements respective employees obtain rights to acquire Parent company’s or certain subsidiaries’ shares under several graded vesting scenarios. The respective option would be classified as an equity-settled share-based payment transaction in Group’s consolidated financial statements in accordance with IFRS 2. There are cash settlement alternatives. Given absence of an ongoing sale of any of Subsidiaries or the Parent or any listing process initiated and other relevant cash settlement events, then cash settlement is considered not to be probable and the Group does not have a present obligation to settle in cash. The Group’s management has estimated that fair value of the options would not be materially different than zero. If it were, the Group would have to record expenses related to this transaction and recognize a respective component of equity. In estimating fair value for the share option the most appropriate valuation model would depend on the terms and conditions of the grant. In 2019 fair value of employee share options has been estimated by first establishing the fair value at the grant date of the relevant issuer company/group applying discounted cash flow valuation methodology and same assumptions as the ones used in value in use estimation (refer to Goodwill impairment tests). Subsequently, the estimate is adjusted by the number of options granted, vesting period and the employee turnover rates in the respective grade. Management has considered that the financial position of the Subsidiaries that have issued share options (in particular for General Employee Share Option Plan described in Note 48), the particular features mentioned in the option agreements, such as buy-back options, non-competition clauses embedded in the agreements, restrictions of sales of shares, as well as dividend policy of the Parent Company (for both of the plans described in Note 48) effectively indicate that fair value of the employee options would not be material.

Deferred Tax Liability on unremitted earnings

In Latvia, Estonia and Georgia legal entities are required to pay income tax on earned profits in accordance with local legislation on Corporate Income Tax. Corporate income tax would be paid on distributed profits and deemed profit distributions. Corporate income tax on dividends would be recognized in the statement of profit and loss as expense in the reporting period when respective dividends are declared, while, as regards other deemed profit items, at the time when expense is incurred in the reporting year. The Group has decided to use these beneficial tax regimes to reinvest profits in further development of respective subsidiaries, therefore it does not plan to distribute dividends from subsidiaries in these countries in the next 5 years. The Group controls the process of dividend distribution and does not plan to distribute dividends from subsidiaries of these countries for year 2023 and after in the foreseeable future: 5 year horizon is considered appropriate given the Group's planning cycle. Due to above mentioned reason, the Group has not recognized deferred tax liabilities. See further information in Note 17.

Provisions

Significant management judgement is used for estimating provisions in relation to tax amounts disputed with tax authorities. For more details see Note 37.

Lease term determination under IFRS 16 (Group as a Lessee)

IFRS 16 requires that in determining the lease term and assessing the length of the non-cancellable period of a lease, an entity shall determine the period for which the contract is enforceable. In assessment of lease term determination the Group considers the enforceable rights and obligations of both parties. If both the lessee and the lessor can terminate the contract without more than an insignificant penalty at any time at or after the end of the non-cancellable term, then there are no enforceable rights and obligations beyond the non-cancellable term. For lease agreements without a fixed term and agreements that are “rolled over” on monthly basis until either party gives notice the Group considers that it does have enforceable rights and obligations under such agreements, therefore a reasonable estimate of the lease term assessment is made. When determining the lease term, the Group considers all relevant facts and circumstances that create an economic incentive for the lessee to exercise an option to renew or not to exercise an option to terminate early. When assessing whether the Group is reasonably certain to exercise an option to extend, or not to exercise an option to terminate early, the economic reasons underlying the Group's past practice regarding the period over which it has typically used particular types of assets (whether leased or owned) are considered. Furthermore, the following factors are considered: level of rentals in any secondary period compared with market rates, contingent payments, renewal and purchase options, costs relating to the termination of the lease and the signing of a new replacement lease, costs to return the underlying asset, nature and the level of specialization of the leased assets, asset location, availability of suitable alternatives and existence of significant leasehold improvements. See Note 23.

Lease liability incremental borrowing rate determination under IFRS 16 (Group as a Lessee)

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group has used market rates in each of the countries as its incremental borrowing rate. The discount rate applied is obtained from official state government institutions as the average market rate available at the beginning of the lease agreement for loans over a similar term, security, value and applied in similar economic environment. The Group considers market rates used as an appropriate measure for incremental borrowing rates as they correctly reflect the ability the respective subsidiary to finance a specific asset purchase in each of the jurisdictions given the Group’s wide geographical coverage, its track record in ability to raise public debt and the overall financial results of the Group and each subsidiary individually. As additional factor considered is the way how local lenders would approach the asset financing at each subsidiary level. The two most important factors assessed would be the potential borrower’s (in this case Group’s subsidiary’s) financial position and the asset that is being financed (i.e. the quality of the security). As per Group’s assessment each of the Group’s subsidiaries would qualify as a good quality borrower in the local markets in the context of overall Group results.

Lease classification for rental fleet (Group as a Lessor)

The Group has entered into vehicle leases on its rental fleet (Note 22). These lease agreements have a non-cancellable term of 6 months and an optional term of up to 72 months. After the non-cancellable term of 6 months the lessee can return the leased asset to the Group and losses associated with the cancellation are borne by the Group. The leased asset is not transferred to lessee at the end of lease term. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the leased assets and the present value of the minimum lease payments not amounting to substantially all of the fair value of the leased asset, that it retains all the significant risks and rewards of ownership of these assets and accounts for the contracts as operating leases.

Sale and leaseback transactions

Under sale and leaseback transactions the Group purchases the underlying asset and then leases it back to the same customer. To determine how to account for a sale and leaseback transaction, the Group first considers whether the initial transfer of the underlying asset from the seller-lessee (Customer) to the buyer-lessor (the Group) is a sale. The Group applies IFRS 15 to determine whether a sale has taken place. The key indicators that control has passed to the Group include the Group having:
- a present obligation to pay;
- physical possession (of the purchased asset);
- a legal title (to the purchased asset);
- the risks and rewards of ownership (of the purchased asset);
- the Group has accepted the asset;
- the borrower can or must repurchase the asset for an amount that is less than the original selling price of the asset.

In assessing whether the contractual cash flows are SPPI, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making the assessment, the Group considers:
- contingent events that would change the amount and timing of cash flows;
- leverage features;
- prepayment and extension terms;
- terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse loans); and
- features that modify consideration of the time value of money (e.g. periodical reset of interest rates).

Please refer to Note 2 for further detailed descriptions of the judgements made by management to assess whether regular loan, non-recourse loan and sale and leaseback financing arrangement contracts meet SPPI criteria.

Measurement of fair values

Trademarks obtained in business combinations during 2023

The Relief-from-royalty method was used for measuring the fair value of trademarks obtained.The relief from-royalty method considers the discounted estimated royalty payments that are expected to be avoided as a result of the patents or trademarks being owned. Management’s key assumptions used to determine the value of trademarks were as follows: Average cash flow forecast (5 Year) revenue growth rate is 19% per year (range 10% - 37%) Long term revenue growth rate is 0% as a matter of prudence for fair value estimation. Average trademark royalty rate is 0.9% (range 0.9% - 1.1%) Average discount rate is 25.4% (range 22.2% - 32.0%)

Property, plant and equipment obtained in business combinations

Depreciated replacement cost technique was used for measuring the fair value of Property, plant and equipment obtained. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence of assets obtained.

Other intangible assets obtained in business combinations

The With and Without Method (WWM) was used for measuring fair value of DAS Access asset acquired. The WWM estimates an intangible asset’s value by calculating the difference between two discounted cash-flow models: one that represents the status quo for the business enterprise with the asset in place, and another without it.

Management’s key assumptions used to determine the value of DAS Asset were as follows:

• Loan issuance growth rate is 18%
• Long term growth rate is 0% as a matter of prudence for fair value estimation.
• Expected Loss (EL) for DAS loans issued: With asset is 8.0%; Without asset is 25.0%
• Discount rate is 32%

Depreciated replacement cost technique was used for measuring the fair value of Intangible assets obtained (excluding Trademarks and DAS Access Asset). Depreciated replacement cost reflects adjustments for functional and economic obsolescence of assets obtained.

Please refer to Note 47 for disclosure of and relevant inputs for fair value techniques applied to financial assets and liabilities.

Obtaining control over obtained entities

During 2023 the Group obtained several new subsidiaries in a transaction where legal ownership of the companies was obtained through obtaining of a holding entity EC Finance Group SIA. The Group assumed full control over the newly obtained entities from the moment of signing the agreements since they include clauses granting the Group the power to govern the obtained entities from day of signing the share obtaining agreements. Accordingly, the Group concluded that control in accordance with IFRS 10 was exercised and commenced consolidation of the subsidiaries.

The management of Eleving Group S.A. evaluated whether the acquisition of EC Finance Group SIA is considered as “transaction under common control”, whereas such transactions are outside of the scope of IFRS 3 “Business combinations”. Such evaluation was performed due to the fact that CI Holding AS and Eleving Group S.A. has overlapping shareholders. However, after careful consideration and interpretation of IFRS Accounting Policies, the management determined that the transaction should not be treated as under common control. This determination was made due to the impact of the transaction on minority shareholders, leading the management to conclude that the acquisition method prescribed by IFRS 3 should be applied. Consequently, the transaction falls within the scope of IFRS 3 for business combinations.

1. Significant accounting judgments, estimates and assumptions (continued)

Disposal groups and discontinued operations

At the end of 2021 the Group made a decision to fully exit the Balkan region with its car financing business as well as in late 2023 the Group decided to exit also from Belarus. As a result of these decisions some entities have been sold or were in sales negotiations at the end of 2023, but for some entities the process of liquidation has been initiated with a plan to complete the liquidation in nearest future. Due to these reasons all of the following group subsidiaries as at 31 December 2023 are classified as subsidiaries held for sale or under liquidation and discontinued operations:

• Mogo Leasing d.o.o. (Bosnia&Herzegovina) - under liquidation;
• Mogo Albania SHA - sold in 2022;
• Rocket Leasing OOO - sold in early 2024;
• Autotrade OOO - sold in early 2024;

• MOGO Kredit LLC - sold in early 2024.

• Interest revenue

	2023	2022 (restated)
Interest income from finance lease receivables*	98,735,235	102,552,368
Interest income from loans and advances to customers according to effective interest rate method	76,785,582	59,378,886
Other interest income according to effective interest rate method	776,958	585,602
Total interest income calculated using effective interest method for financial assets that are measured at amortised cost	77,562,540	59,964,488
TOTAL:	176,297,775	162,516,856

* Interest income contains earned interest on portfolio derecognized from Group's assets due to being listed on P2P platform and having no buy back obligation (see Note 24).

Gross and net earned interest are as follows:

	2023	2022
Gross interest income	176,298,402	162,565,418
Interest derecognized due to derecognition of portfolio from Group's assets	(627)	(48,562)
TOTAL NET INTEREST:	176,297,775	162,516,856

Interest income from impaired Stage 3 finance lease receivables/loans amounts to EUR 1 898 445.

1. Interest expense

	2023	2022 (restated)
Interest expenses on financial liabilities measured at amortised cost:
Interest expenses for loans from P2P platform investors	9,399,425	6,801,039
Interest expense on issued bonds	23,807,651	21,648,273
Interest expenses for bank liabilities and related parties	2,952,186	2,158,720
Interest expenses for lease liabilities	727,919	523,617
Interest expenses for other borrowings	612,263	-
TOTAL:	37,499,444	31,131,649

1. Fee and commission income related to finance lease activities

Revenue from contracts with customers recognized point in time:

	2023	2022 (restated)
Income from penalties received	7,754,726	7,215,154
Income from commissions	3,663,653	3,011,086
TOTAL:	11,418,379	10,226,240

Revenue from contracts with customers recognized point in time related to debt collection activities:

	2023	2022
Gross income from debt collection activities	2,423,808	1,990,878
Gross expenses from debt collection activities	(4,874,045)	(4,473,685)
TOTAL:	(2,450,237)	(2,482,807)

Total fees and commissions income:

	2023	2022
	8,968,142	7,743,433

1. Impairment expense

	2023	2022 (restated)
Change in impairment of intangible assets (Notes 21)	65,640	365,033
Change in impairment in rental fleet (Note 22)	(61,895)	(524,996)
Change in impairment in finance lease (Note 24)	2,429,326	6,138,501
Change in impairment in loans and advances to customers (Note 25)	5,050,495	10,566,588
Change in impairment in loans to related parties (Note 26)	(49,727)	(45,045)
Change in impairment of finished goods and goods for resale (Notes 28)	297,207	-
Change in impairment in trade receivables (Note 31)	381,300	(892,523)
Change in impairment in other receivables (Note 32)	(612,092)	724,826
Change in impairment in assets held for sale (Note 35)	241,165	52,690
Impairment of sold receivables	9,030,123	7,565,109
Written off debts	23,075,082	19,331,467
TOTAL:	39,846,624	43,281,650

1. Net gain/(loss) from de-recognition of financial assets measured at amortized cost

Financial lease

	2023	2022
Income arising from cession of financial lease receivables to non related parties	3,378,994	5,366,232
Loss arising from cession of financial lease receivables to non related parties	(2,988,192)	(4,340,974)
TOTAL:	390,802	1,025,258

Loans and advances to customers

	2023	2022
Income arising from cession of loans and advances to customers receivables to non related parties	2,399,689	3,302,359
Loss arising from cession of loans and advances to customers receivables to non related parties	(1,638,090)	(2,446,820)
TOTAL:	761,599	855,539

Receivables from rent contracts

	2023	2022
Income arising from cession of customers receivables to non related parties	54,653	244,099
Loss arising from cession of customers receivables to non related parties	(47,731)	(131,305)
TOTAL:	6,922	112,794

Net gain/(loss) arising from cession of financial lease receivables, loans and advances to customers and rent contracts

	2023	2022
	1,159,323	1,993,591

During 2022 and 2023 the Group performed cessions of doubtful finance lease receivables as well as doubtful loans and advances to customers receivables to non related parties. The Group uses opportunities to sell receivables in cession to improve cash flow and reduce debt collection related expenses associated of recovering of doubtful debts. When financial lease receivables or loans and advances to customers portfolio is sold in cession the Group reverses the respective part of impairment allowance of the ceded assets (Note 24 and 25). The Group then separately recognizes net losses arising from derecognition of the ceded portfolio, which is reduced by the respective cession income.

1. Expenses related to peer-to-peer platform services

	2023	2022 (restated)
Service fee for using P2P platform	987,970	883,424
TOTAL:	987,970	883,424

1. Revenue from leases

	2023	2022
Revenue from operating lease	4,067,111	5,421,567
TOTAL:	4,067,111	5,421,567

1. Revenue from car sales and other goods

Revenue from contracts with customers recognized point in time:

	2023	2022
Income from sale of vehicles and other goods	1,936,451	174,152
TOTAL:	1,936,451	174,152

Expenses from contracts with customers recognized point in time:

	2023	2022
Expenses from sale of vehicles and other goods	(1,789,166)	(171,752)
TOTAL:	(1,789,166)	(171,752)

Total Net revenue from contracts with customers recognized point in time

	2023	2022
	147,285	2,400

During 2023 the Group has started car sale and mobile phone sale business in Kenya which has resulted in significant increase in revenue from this business line.

12.## 13. Administrative expense

	2023	2022 (restated)
EUR	EUR	EUR
Employees' salaries	34,814,751	32,102,520
Amortization and depreciation	9,442,554	8,063,484
IT services	3,220,247	2,245,842
Office and branches' maintenance expenses	2,928,259	2,616,476
Professional services	2,802,696	2,694,716
GPS tracking service expenses	1,649,342	2,009,159
Communication expenses	1,450,133	1,233,126
Business trip expenses	1,060,195	697,283
Bank commissions	927,972	989,303
Credit database expenses	757,986	809,565
Transportation expenses	667,357	424,768
Other personnel expenses	545,930	361,093
Insurance expenses	503,786	456,972
Low value equipment expenses	182,197	180,374
Employee recruitment expenses	126,863	185,901
Expenses from disposal of rental fleet and other fixed assets	39,093	766,199
Donations	23,990	163,834
Real estate tax	132	200
Other administration expenses*	2,102,527	1,344,054
TOTAL:	63,246,010	57,344,869

Audit fees for Group’s entities’ 2023 financial statements audit amounts to 549 930 EUR, the Parent Company - 80 430 EUR (2022: EUR 350 100; the Parent Company - 76 600 EUR). In 2023 the audit company also provided services related to interim dividend distribution in total amount of EUR 25 200 (2022: 0). No other permitted non-audit-services were provided to the Group by the auditor and member firms of its network during the year. Amounts included in 'Professional services' line.

• • During the financial year 2023 the Group detected discrepancies in the fund movements within the accounts of one of its subsidiaries. Subsequently, an extensive investigation encompassing financial years 2022 and 2023 was conducted to ascertain the extent of transactions under the review. The investigation concluded with the assessment that the misappropriation of funds in the amount of slightly more than EUR 500 000 had taken place and funds were deemed to be largely irrecoverable for the time being, thus expensed within the respective periods in the subsidiary's financial records with the effect to Group’s Consolidated Statement of Profit and Loss amounting to EUR 191 190. This amount has been duly reflected in the Group's Consolidated Financial Statements. Furthermore, the Group has taken a necessary legal action, which is presently ongoing under the jurisdiction of the relevant local authorities.

13. Administrative expense (continued)

Key management personnel compensation

Members of the Management	2023	2022
EUR	EUR	EUR
Remuneration*	4,376,041	4,219,850
Social security contribution expenses	631,353	657,152
TOTAL:	5,007,394	4,877,002

Key management personnel is considered to be all Group top management employees, regional management employees and country managers.

• • Including vacation accruals.

There are no amounts receivable or payable as of 31 December 2023 with members of the Group’s Management (none at 31 December 2022) for any past transactions. There are no emoluments granted for current and for former members of the management and commitments in respect of retirement pensions for former members of the management.

In 2023 the Group employed 2 817 employees (in 2022: 2 573).

Country	2023	2022	Country	2023	2022
EUR	EUR	EUR	EUR	EUR	EUR
Albania	231	231	Lithuania	74	75
Armenia	72	72	Mauritius	3	-
Belarus	61	69	Moldova	195	223
Bosnia&Hercegovina	2	8	Namibia	139	-
Botswana	73	-	North Macedonia	163	141
Estonia	21	20	Romania	57	64
Georgia	75	74	Uganda	355	244
Kenya	833	1009	Ukraine	59	74
Latvia	257	225	Uzbekistan	50	44
Lesotho	11	-	Zambia	86	-

14. Other operating income

	2023	2022 (restated)
EUR	EUR	EUR
Supplementary services income*	1,003,605	216,468
Income from management services	476,572	430,661
Income from associates accounted under equity method	-	76,098
Other operating income	888,562	619,499
TOTAL:	2,368,739	1,342,726

• • the Group started to provide additional supplementary services to its clients in Moldova in last querter of 2022. The increase in income this year is due to the services being provided during full year 2023.

Revenue from contracts with customers recognized point in time where the Group acted as an agent *

	2023	2022
EUR	EUR	EUR
Gross revenue from agency services	271,600	635,297
Gross expenses from agency services	(271,600)	(635,297)
TOTAL:	-	-

• • Revenue associated with these transactions is presented as revenue in net amount in these consolidated financial statements.

15. Other operating expense

	2023	2022 (restated)
EUR	EUR	EUR
Withholding tax expenses	3,594,500	4,380,443
Non-deductible VAT from management services	3,083,292	2,649,683
Credit default swap expenses*	1,352,161	1,063,634
Expense from associates accounted under equity method	623,908	-
Other operating expenses	1,479,779	1,560,982
TOTAL:	10,133,640	9,654,742

• • a subsidiary of the Parent company - Mogo LT UAB, has signed a credit default swap agreement with a former company of the Group - Risk Management Services OU. Based on this contract the Group incurs credit default swap expenses in return for an insurance of the default of Mogo LT UAB finance lease receivables and loans and advances to customers portfolio.

16. Net foreign exchange result

	2023	2022 (restated)
EUR	EUR	EUR
Currency exchange gain	(2,737,620)	(7,545,675)
Currency exchange loss	9,123,453	14,968,402
TOTAL:	6,385,833	7,422,727

17. Corporate income tax

	2023	2022 (restated)
EUR	EUR	EUR
Current corporate income tax charge for the reporting year	8,324,461	9,004,133
Deferred corporate income tax due to changes in temporary differences	(1,758,559)	(2,151,290)
Corporate income tax charged to the income statement:	6,565,902	6,852,843

Unrecognized deferred tax liability for undistributed dividends as described in Note 3 comprises 9 406 035 EUR. (2022: 8 781 299 EUR)

	31.12.2023	31.12.2022
EUR	EUR	EUR
Current corporate income tax liabilities	729,149	3,934,652
TOTAL:	729,149	3,934,652

18. Deferred corporate income tax

	Balance sheet 31.12.2023	Balance sheet 31.12.2022	Income statement 2023	Income statement 2022
EUR	EUR	EUR	EUR	EUR
(restated)
Deferred corporate income tax liability
Accelerated depreciation for tax purposes	251,308	59,502	(64,391)	(57,061)
Other	229,918	46,615	137,428	(303,396)
Gross deferred tax liability	481,226	106,117	73,037	(360,457)
Deferred corporate income tax asset
Tax loss carried forward	(2,846,009)	(1,103,048)	(76,945)	927,365
Unused vacation accruals	(196,978)	(228,881)	54,514	(102,845)
Impairment	(4,720,754)	(5,585,574)	289,392	(2,835,301)
Currency fluctuation effect	-	-	1,198,508	(120,483)
Other	(1,595,324)	1,528,853	(2,098,557)	219,948
Gross deferred tax asset	(9,359,065)	(5,388,650)	(633,088)	(1,911,316)
Net deferred tax liability/ (asset)	(8,877,839)	(5,282,533)	(560,051)	(2,271,773)
Increase in net deferred tax asset:
In the statement of profit and loss	-	-	(1,758,559)	(2,151,290)
Net deferred corporate income tax assets	(8,877,839)	(5,282,533)
Net deferred corporate income tax expense/ (benefit)			(1,758,559)	(2,151,290)

The Group believes that tax asset arising from tax losses will be utilized in nearest few years with future profits as well as asset arising due to temporary impairment cost recognition when low performing portfolio will be sold to third parties. For all countries the asset is deemed recoverable based on trends of historical performance and estimates of future results.

Deferred tax asset has been recognized in subsidiaries in following countries:

Deferred tax asset	2023	2022
Country	EUR	EUR
Mogo Auto Ltd	2,998,449	2,762,172
MOGO LOANS SMC LIMITED	2,062,902	944,523
YesCash Group Ltd	1,876,026	-
YesCash Zambia LTD	531,251	-
ExpressCredit Proprietary Ltd	438,623	-
Green Power Trading LTD	311,281	313,876
Kredo Finance SHPK	271,449	165,718
ExpressCredit Cash Advance Ltd	145,978	-
Mogo Lend LTD	142,836	110,194
Mogo UCO LLC	-	483,774
MOGO Kredit LLC	-	294,332
Other	99,044	207,944
TOTAL:	8,877,839	5,282,533

Recognition of deferred taxes mainly is driven from accumulated tax losses from entities in Mauritius and Uganda as well as temporary differences in taxable impairment in Kenya. Deferred tax assets have not been recognized mainly in respect to tax losses arisen in Luxembourg and Ukraine as there may be no future taxable profits available in the foreseeable future. Subsidiaries in Ukraine have been loss-making and there are no other tax planning opportunities or other evidence of recoverability in the near future. Recoverability of deferred tax asset in Luxembourg in nearest future is also unlikely. Deferred tax asset not recognized due to the above reason in amount of 8 548 066 EUR. (2022: 10 413 879 EUR).

The potential income tax consequence attached to the payment of dividends in 2023 amounts to 624 736 EUR. (2022: 1 350 317 EUR.)

18. Deferred corporate income tax (continued)

Tax losses for which no deferred tax assets are recognized by the Group may be utilized as follows for carry forward:

Tax loss	Expiry term	EUR
Tax loss for 2018	2024	353,728
Tax loss for 2019	2024-2025	3,852,603
Tax loss for 2020	2025-2026	6,787,321
Tax loss for 2021	2026-2027	20,813,333
Tax loss for 2022	2027-2028	3,703,855
Tax loss for 2023	2028-2029	3,121,390
TOTAL:		38,632,230

Tax losses for which no deferred tax assets were recognized by the Group for previous reporting period consisted of EUR 42 152 024.# Notes to the Consolidated Financial Statements (Continued)

18. Income Tax (Continued)

Actual corporate income tax charge for the reporting year, if compared with theoretical calculations:

	2023 EUR	2022 EUR
Profit before tax	28,482,002	21,461,395
Tax at the applicable tax rate*	7,103,411	5,352,472
Undistributed earnings taxable on distribution**	(2,534,833)	(2,460,093)
Unrecognized deferred tax asset	354,482	1,439,233
Effect of different tax rates of subsidiaries operating in other jurisdictions	(3,146,455)	(2,956,793)
Non-temporary differences: Business not related expenses (donations, penalties and similar expenses)	(807,112)	(649,702)
Other	5,596,409	6,127,726
Actual corporate income tax for the reporting year:	6,565,902	6,852,843
Effective income tax rate	23.05%	31.93%

* - Tax rate for the Parent company for year 2023 - 24,94% (2022 - 24,94%)
** - In Latvia, Estonia and Georgia corporate income tax expenses are not recognized starting from 2017 or before in accordance with local legislation. See further information in Note 2.

19. Business combinations and acquisition of non-controlling interest

Obtaining of EC Finance Group SIA (Latvia)

On 14 July 2023, the Group obtained a 88,15% control over the shares of EC Finance Group SIA, a non-listed holding company based in Latvia and specialising in financial services. The Group obtained EC Finance Group SIA as part of equity increase of one of its subsidiaries Eleving Finance AS. It enlarges the range of products in its core business of geographies providing financing services in Africa region. For convenience purposes fair value caluculation was performed on information as at 30 June 2023. The Group measures the interests in EC Finance Group SIA at fair value.

Assets	Carrying value as at 30.06.2023 EUR	Adjustments EUR	Fair value recognized on obtaining EUR
Internally generated intangible assets	1,702,136	-	1,702,136
Other intangible assets	14,480	2,892,000	2,906,480
Right-of-use assets	701,071	-	701,071
Property, plant and equipment	273,818	-	273,818
Other loans and receivables	554,060	-	554,060
Leasehold improvements	147,177	-	147,177
Deferred tax asset	3,329,589	-	3,329,589
Finished goods and goods for resale	4,832	-	4,832
Loans and advances to customers	26,045,906	-	26,045,906
Prepaid expense	1,085,857	-	1,085,857
Trade receivables	21,420	-	21,420
Other receivables	270,147	-	270,147
Cash and cash equivalents	4,379,262	-	4,379,262
Total assets	41,421,755	-	41,421,755
Liabilities
Borrowings	37,289,278	-	37,289,278
Prepayments and other payments received from customers	935,050	-	935,050
Trade and other payables	281,010	-	281,010
Taxes payable	1,092,048	-	1,092,048
Other liabilities	962,999	-	962,999
Accrued liabilities	1,082,318	-	1,082,318
Total liabilities	41,642,703	-	41,642,703
Total identifiable net assets at fair value of obtained company	(220,948)
Increase in reserves as a result of obtaining the company		1,927,058
Goodwill arising on obtaining the company		2,148,006

The gross contractual amounts receivable from loans and advances to customers were 30 913 603 EUR. The contractual cash flows not expected to be collected are estimated to be 4 867 697 EUR.

19. Business combinations and acquisition of non-controlling interest (continued)

The amount of revenue the Group generated from obtained entities after the date of obtaining included in the consolidated statement of comprehensive income for the reporting period consisted of 10 413 675 EUR. Profit generated after the acquisition consisted of 1 152 196 EUR. Total revenue of obtained entities for the year was 22 380 936 EUR and loss of 1 097 091 EUR. Non-controlling interest of obtained entities consists of 11,85% and is calculated as proportion of EC Finance Group SIA shares owned by minority interest shareholders. When obtaining EC Finance Group SIA (Latvia) the Group also obtained its subsidiaries. The ownership structure of the EC Finance Group SIA is following:

• YesCash Zambia Ltd (Zambia) - 50% ownership of EC Finance Group SIA
• ExpressCredit Holding AS (Latvia) - 100% ownership of EC Finance Group SIA
• YesCash Group Ltd (Mauritius) - 100% ownership of EC Finance Group SIA
• ExpressCredit Ltd (Lesotho) - 100% ownership of YesCash Group Ltd (Mauritius)
• ExpressCredit Limited (Eswatini) - 100% ownership of YesCash Group Ltd (Mauritius)
• ExpressCredit (Botswana) - 100% ownership of YesCash Group Ltd (Mauritius)
• ExpressCredit Cash Advance (Namibia) - 49% ownership of YesCash Group Ltd (Mauritius)

20. Discontinued operations

As of end of 2022 the Group had either sold or was in active negotiation process of selling its vehicle business operations in the Balkan region. The Group had decided to fully exit from the Balkan region as a geographical market with its vehicle financing business line while retaining its consumer financing business lines in the region. Due to this reason the Group had decided to classify the vehicle financing operations in Bosnia-Herzegovina and Albania as well as Poland as discontinued operation and present their results separately. The sales process of subsidiary in Albania was completed by end of September 2022. The subsidiary in Bosnia-Herzegovina is in final stages of liquidation. Also in 2023 the Group decided to exit Belarus as a geographical market therefore several subsidiaries in Belarus are also classified as discontinued operations. All following entities are classified as discontinued operations in these consolidated financial statements:

• Mogo Leasing d.o.o. (Bosnia&Herzegovina), liquidation process finished in Q1 of 2024
• Mogo Albania SHA, company sold in 2021
• Rocket Leasing OOO, company sold in January 2024
• Autotrade OOO, company sold in January 2024
• MOGO Kredit LLC, company sold in January 2024
• Pocco Finance sp. z o. o. (Poland), liquidated in October 2023
• Mogo Sp.z o.o. (Poland), liquidated in December 2023

Results of discontinued operation

	2023 EUR	2022 EUR
Interest income	4,894,168	8,358,364
Other debt collection income/(expense)	301,050	449,121
External revenue	5,195,218	8,807,485
Expenses	(3,745,069)	(6,464,349)
Elimination of expenses related to inter‑segment sales	1,104,241	2,691,515
External expenses	(2,640,828)	(3,772,834)
Results from operating activities	2,554,390	5,034,651
Income tax	(291,447)	(389,444)
Results from operating activities, net of tax	2,262,943	4,645,207
Gain on sale of discontinued operation/(loss) on measurement to fair value less costs to sell of the disposal group	276,011	(678,636)
Profit (loss) from discontinued operations, net of tax	2,538,954	3,966,571

Cash flows from discontinued operation

	2023 EUR	2022 EUR
Net cash used in operating activities	5,078,806	(11,868,456)
Net cash from investing activities	253,509	(191,407)
Net cash from financing activities	(14,875,734)	11,969,827
Net cash flows for the year	(9,543,419)	(90,036)

Effect of disposal on the financial position of the Group

	2023 EUR	2022 EUR
Intangible assets	-	-
Tangible assets	(405,104)	(6,307)
Deferred tax asset	(290,860)	-
Loans and advances to customers	(145,140)	(24,836)
Finance Lease Receivables	(8,050,101)	(161,974)
Other receivables	(561,080)	(20,932)
Cash and cash equivalents disposed of	(104,578)	(164,607)
Total disposed assets	(9,556,863)	(378,656)
Other liabilities	2,045,004	107,292
Net assets and liabilities	2,045,004	(271,364)
Net cash outflows	(104,578)	(164,607)

21. Intangible assets

	Internally generated intangible assets EUR	Other intangible assets EUR	Other intangible assets EUR	SUBTOTAL EUR	Goodwill EUR	Trademarks EUR	TOTAL EUR
Cost
As at 1 January 2022	4,207,155	11,796,382	2,151,085	718,310	2,869,395	18,872,932
2022
Additions	-	3,882,908	-	(63,105)	(63,105)	3,819,803
Reclassified from assets held for sale (cost)	451,894	21,005	-	4,691	4,691	477,590
Disposals (cost)	-	(726,938)	-	(256,248)	(256,248)	(983,186)
Exchange difference, net	-	(183,725)	-	6,345	6,345	(177,380)
Cost as at 31 December 2022	4,659,049	14,789,632	2,151,085	409,993	2,561,078	22,009,759
2023
Additions	-	2,474,926	-	1,060,536	1,060,536	3,535,462
Acquisition of a subsidiary through business combination	2,148,006	7,798,508	1,072,000	1,860,778	2,932,778	12,879,292
Reclassification	-	904,566	-	(904,566)	(904,566)	-
Reclassified from assets held for sale (cost)	-	(366,717)	-	(2,144)	(2,144)	(368,861)
Disposals (cost)	-	(75,263)	-	(37,423)	(37,423)	(112,686)
Exchange difference, net	-	9,555	-	(6,455)	(6,455)	3,100
Cost as at 31 December 2023	6,807,055	25,535,207	3,223,085	2,380,719	5,603,804	37,946,066
Accumulated amortization
As at 1 January 2022	-	(4,265,806)	-	(134,981)	(134,981)	(4,400,787)
2022
Amortization charge	-	(1,883,396)	-	(44,274)	(44,274)	(1,927,670)
Disposals (amortization)	-	344,032	-	36,125	36,125	380,157
Reclassified from assets held for sale (amortization)	-	(21,005)	-	(1,428)	(1,428)	(22,433)
Impairment	-	(365,033)	-	-	-	(365,033)
Exchange difference, net	-	43,014	-	(5,262)	(5,262)	37,752
Accumulated amortization as at 31 December 2022	-	(6,148,194)	-	(149,820)	(149,820)	(6,298,014)
2023
Amortization charge	-	(3,081,502)	-	(55,817)	(55,817)	(3,137,319)
Disposals (amortization)	-	76,879	-	15,177	15,177	92,056
Acquisition of a subsidiary through business combination	-	(6,096,372)	-	(26,298)	(26,298)	(6,122,670)
Reclassified from assets held for sale (amortization)	-	62,254	-	1,902	1,902	64,156
Impairment	-	(65,640)	-	-	-	(65,640)
Exchange difference, net	-	(18,713)	-	4,513	4,515	(14,200)
Accumulated amortization as at 31 December 2023	-	(15,271,288)	-	(210,343)	(210,341)	(15,481,631)
As at 31 December 2022	4,659,049	8,641,438	2,151,085	260,173	2,411,258	15,711,745
As at 31 December 2023	6,807,055	10,263,919	3,223,085	2,170,376	5,393,463	22,464,435

Amortization costs are included in the caption "Administrative expense".# Split of goodwill per cash generating unit: 31.12.2023 31.12.2022

Name	EUR	EUR
TIGO Finance DOOEL Skopje (North Macedonia)	3,000,276	3,000,276
EC Finance Group SIA	2,148,006	-
UAB mogo (Lithuania)	646,063	646,063
OU Primero Finance (Estonia)	451,894	451,894
AS mogo (Latvia)	298,738	298,738
Mogo UCO (Armenia)	182,028	182,028
Mogo LLC (Georgia)	80,050	80,050
Total	6,807,055	4,659,049

Each cash generating unit represents a subsidiary of the Group.

Goodwill and trademarks impairment test

As at 31 December 2023, goodwill and trademarks were tested for impairment. The impairment test was performed for each cash generating unit separately. The recoverable amounts for each unit were calculated based on their value in use, determined by discounting the future cash flows expected to be generated from the continuing activities of the units. No impairment losses were recognized because the recoverable amounts of these units including the goodwill allocated were determined to be higher than their carrying amounts. The calculations of value-in-use were based on free cash flow to equity approach to each unit respectively, discounted by estimated cost of equity. The value-in-use calculations are most sensitive to projected operating cash-flow, terminal growth rates used to extrapolate cash flows beyond the budget period, and discount rates. Projected operating cash-flow figures were based on detailed financial models.

Recoverable amount for the subsidiaries are estimated to be:

Name	Amount
TIGO Finance DOOEL Skopje (North Macedonia)	15.4 million EUR
EC Finance Group SIA	19.5 million EUR
UAB mogo (Lithuania)	32.2 million EUR
OU Primero Finance (Estonia)	16.5 million EUR
AS mogo (Latvia)	18.7 million EUR
Mogo UCO (Armenia)	5.7 million EUR
Mogo LLC (Georgia)	15.3 million EUR

2023 actual figures were used as a starting point in these models, and took into account management's expectations of the future performance of each unit. Five years of cash flows were included in the discounted cash flow model. A long-term terminal growth rate into perpetuity was determined to be 1%. The rate was estimated by management based on historical trends observed in existing markets, and expected Group and industry developments. Discount rates reflect the current market assessment of the risk specific to each unit.

Discount rates applied are:

Name	Amount
TIGO Finance DOOEL Skopje (North Macedonia)	43.7%
EC Finance Group SIA	28.6%
UAB mogo (Lithuania)	13.6%
OU Primero Finance (Estonia)	12.7%
AS mogo (Latvia)	14.4%
Mogo UCO (Armenia)	41.8%
Mogo LLC (Georgia)	38.9%

Sensitivity analysis was performed to assess changes to key assumptions that could influence whether the carrying value of the units exceeded their recoverable amounts. The results of this analysis indicate that for all units, the recoverable amount would not be below the carrying amount including goodwill (i.e. goodwill would not become impaired), if terminal growth rates decreased by 0.5% and discount rates increased by 5%.

The recoverable amounts after stress test exceed the carrying amounts for:

Name	Amount
TIGO Finance DOOEL Skopje (North Macedonia)	10.9 million EUR
EC Finance Group SIA	14.0 million EUR
UAB mogo (Lithuania)	21.4 million EUR
OU Primero Finance (Estonia)	10.7 million EUR
AS mogo (Latvia)	17.1 million EUR
Mogo UCO (Armenia)	4.8 million EUR
Mogo LLC (Georgia)	13.1 million EUR

The following table shows currently applied terminal growth and discount rates and their adjusted values which would result in carrying value to be equal to recoverable value:

Name	Currently applied values	Adjusted values
	Terminal growth rate	Discount rate
TIGO Finance DOOEL Skopje (North Macedonia)	1.0%	43.7%
EC Finance Group SIA	1.0%	28.6% - 75.1%
UAB mogo (Lithuania)	1.0%	13.6%
OU Primero Finance (Estonia)	1.0%	12.7%
AS mogo (Latvia)	1.0%	14.4%
Mogo UCO (Armenia)	1.0%	41.8%
Mogo LLC (Georgia)	1.0%	38.9%

• Other intangible assets mainly consist of Group's developed ERP systems. Carrying amount of ERP systems at reporting year end was EUR 10,114,854. Expected amortization period is 7 years with year 2029 end date. Carrying amount has significantly increased as the Group continued to make investments in further development of the systems. Amortization costs are included in the caption "Administrative expense".

22. Property, plant and equipment and Right-of-use assets

	Other property, plant and equipment	Right-of-use premises	Right-of-use motor vehicles	SUBTOTAL	Right-of-use assets	Car sharing rental fleet	Long term rental fleet	SUBTOTAL	TOTAL
	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
Cost
13,062,785	248,210	13,310,995	-	14,993,423	14,993,423	6,254,610	34,559,028
Accumulated depreciation	(4,125,973)	(89,327)	(4,215,300)	-	(4,293,285)	(4,293,285)	(3,136,316)	(11,644,901)
As at 1 January 2022	8,936,812	158,883	9,095,695	-	10,700,138	10,700,138	3,118,294	22,914,127
2022
Additions	5,391,457	146,069	5,537,526	761,550	4,216,707	4,978,257	1,250,598	11,766,381
Disposals (cost)	(3,618,915)	(93,616)	(3,712,531)	(10,803)	(5,953,499)	(5,964,302)	(768,485)	(10,445,318)
Reclassified to assets held for sale (cost)	104,970	27,840	132,810	-	-	-	78,400	211,210
Exchange difference, net	157,315	(1,118)	156,197	-	-	-	132,100	288,297
Depreciation charge	(2,909,860)	(76,177)	(2,986,037)	(25,375)	(1,900,562)	(1,925,937)	(1,386,864)	(6,298,838)
Disposals (depreciation)	1,762,935	88,418	1,851,353	(18)	1,695,361	1,695,343	524,328	4,071,024
Reclassified to assets held for sale (depreciation)	(49,321)	(6,116)	-	-	-	-	(61,406)	(61,406)
Impairment release	-	-	-	-	524,996	-	-	524,996
Exchange difference, net	(85,211)	264	(84,947)	-	-	-	(109,210)	(194,157)
Cost	15,097,612	327,385	15,424,997	750,747	13,256,631	14,007,378	6,947,223	36,379,598
Accumulated depreciation	(5,407,430)	(82,938)	(5,490,368)	(25,393)	(3,973,490)	(3,998,883)	(4,169,468)	(13,658,719)
As at 31 December 2022	9,690,182	244,447	9,934,629	725,354	9,283,141	10,008,495	2,777,755	22,720,879
2023
Additions	4,976,220	15,508	4,991,728	3,013,359	1,108,735	4,122,094	1,407,939	10,521,761
Disposals (cost)	(2,485,573)	(48,757)	(2,534,330)	(38,651)	(7,640,331)	(7,678,982)	(478,011)	(10,691,323)
Acquisition of a subsidiary through business combination	1,850,387	-	1,850,387	-	-	-	1,600,186	3,450,573
Reclassified from assets held for sale (cost)	(190,949)	(16,945)	(207,894)	-	-	-	(82,394)	(290,288)
Exchange difference, net	(1,069,714)	(2,302)	(1,072,016)	-	-	-	(589,262)	(1,661,278)
Depreciation charge	(2,341,327)	(84,902)	(2,426,229)	(179,198)	(1,299,276)	(1,478,474)	(1,213,667)	(5,118,370)
Disposals (depreciation)	686,550	27,105	713,655	5,236	2,045,664	2,050,900	231,922	2,996,477
Acquisition of a subsidiary through business combination (depreciation)	(1,149,316)	-	(1,149,316)	-	-	-	(1,179,191)	(2,328,507)
Reclassified to assets held for sale (depreciation)	108,952	10,407	119,359	-	-	-	74,047	193,406
Impairment release	-	-	-	-	61,895	61,895	-	61,895
Exchange difference, net	337,906	1,407	339,313	-	-	-	322,818	662,131
Cost	18,177,983	274,889	18,452,872	3,725,455	6,725,035	10,450,490	8,805,681	37,709,043
Accumulated depreciation	(7,764,665)	(128,921)	(7,893,586)	(199,355)	(3,165,207)	(3,364,562)	(5,933,539)	(17,191,687)
As at 31 December 2023	10,413,318	145,968	10,559,286	3,526,100	3,559,828	7,085,928	2,872,142	20,517,356

Operating leases maturity analysis

	Contractual cash flows	Carrying value	Up to 1 year	1-5 years	More than 5 years	Total
	EUR	EUR	EUR	EUR	EUR	EUR
Long term rental fleet	3,559,828	2,288,207	3,253,736	-	5,541,944

Impairment test of non-financial assets (long term rental fleet)

As of 31 December 2023, non-financial assets of long term rental fleet were tested for impairment. An impairment indication existed as Renti AS has been loss making since its establishment and only in year 2022 started generating the profit. Out of total rental fleet with the acquisition cost of EUR 6,725,035, impairment was identified for the total rental fleet with an acquisition cost of EUR 525,571. For those cars recoverable amount is estimated to EUR 169,742. The recoverable amount was estimated based on the value in use method discounting the cash-flow using a WACC of 12.6%. The cash-flow was projected based on rental agreements probabilities of default and early repayments. As a result, impairment loss was recognized in previous years and remaining impairment amount as at 31 December is EUR 75,398. For the remaining rental fleet with the acquisition value of EUR 6,199,464, the recoverable amount was estimated as EUR 3,390,086. Sensitivity analysis was performed to assess changes to key assumptions that could influence whether the carrying value of the rental fleet assets exceeded their recoverable amounts. If WACC would have increased by 2%, all other assumptions remaining the same including the rental income, acquisition cost would increase to EUR 546,116 and the recoverable amount of impaired assets would equal to EUR 178,637, additional impairment of EUR 1,580 would need to be recognized. For detailed description of impairment testing refer to ‘Impairment of non-financial assets (rental fleet) (Note 3).

Impairment test of non-financial assets (car sharing rental fleet)

As of 31 December 2023, non-financial assets of car sharing rental fleet were tested for impairment. The Group did not identify any indicators requiring recognition of any impairment.

23.# Right-of-use assets and lease liabilities

Right-of-use assets and lease liabilities are shown as follows in the statement of financial position and statement of profit and loss:

	31.12.2023	31.12.2022
ASSETS
Non-current assets
Right-of-use assets - premises	10,413,318	9,690,182
Right-of-use assets - motor vehicles	145,968	244,447
TOTAL:	10,559,286	9,934,629
EQUITY AND LIABILITIES
Non-current liabilities
Lease liabilities	7,247,159	7,293,992
Current liabilities
Lease liabilities	4,553,929	2,802,500
TOTAL:	11,801,088	10,096,492

Leases in the statement of profit and loss

	2023
Revenue from contracts with customers
Operating lease income	4,067,111
Total cash inflow from leases	4,067,111
Administrative expense
Expense relating to leases of low-value assets and short-term leases	(446,549)
Depreciation	(3,578,774)
Net finance costs
Interest expense on lease liabilities	(608,212)
Total cash outflow from lease liabilities
Principal payments for finance lease liabilities	(2,247,050)
Interest payments for lease liabilities	(608,212)
Total cash outflow from leases	(2,855,262)

In 2023 the Group incurred expenses for lease agreements which did not qualify for recognition of Right-of-use assets in total amount of EUR 446 549. The cost relating to variable lease payments that do not depend on an index or a rate amounted to EUR nil for the year ended December 31, 2023. There were no leases with residual value guarantees or leases not yet commenced to which the Group is committed.

24. Finance Lease Receivables

The table below shows the credit quality and the maximum exposure to credit risk based on the Group’s internal credit rating system and year-end stage classification. The amounts presented are gross of impairment allowances.

| | 2023 | 2022 |
| :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- |
| Finance lease receivables | Stage 1 | Stage 2 | Stage 3 | TOTAL | Stage 1 | Stage 2 | Stage 3 | TOTAL |
| EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR |
| Not past due | 66,392,549 | 6,471,891 | 162,383 | 73,026,823 | 86,776,105 | 11,392,383 | 279,281 | 98,447,769 |
| Days past due up to 30 days | 18,339,482 | 12,902,628 | 134,436 | 31,376,546 | 18,218,588 | 11,570,698 | 154,056 | 29,943,342 |
| Days past due up to 60 days | - | 1,668,308 | 3,855,483 | 5,523,791 | - | 1,328,648 | 4,209,849 | 5,538,497 |
| Days past due over 60 days | - | - | 19,327,408 | 19,327,408 | - | 3,212 | 20,475,117 | 20,478,329 |
| TOTAL, GROSS: | 84,732,031 | 21,042,827 | 23,479,710 | 129,254,568 | 104,994,693 | 24,294,941 | 25,118,303 | 154,407,937 |

24. Finance Lease Receivables (continued)

An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to finance lease receivables are, as follows:

	Stage 1	Stage 2	Stage 3	Total
Finance lease receivables	EUR	EUR	EUR	EUR
Balance at 1 January 2023	104,994,692	24,294,942	25,118,303	154,407,937
Transfer to Stage 1*	4,174,640	(3,732,015)	(442,625)	-
Transfer to Stage 2*	(9,828,541)	10,168,828	(340,287)	-
Transfer to Stage 3*	(12,911,149)	(9,049,023)	21,960,172	-
New financial assets acquired	52,490,936	9,398,015	8,645,651	70,534,602
Receivables settled	(11,805,498)	(1,411,229)	(1,887,066)	(15,103,793)
Receivables partly settled	(18,640,457)	(3,862,696)	(12,398,531)	(34,901,684)
Receivables written off	(1,311,774)	(629,396)	(9,152,162)	(11,093,332)
Receivables sold	(1,874,613)	(333,152)	(2,009,057)	(4,216,822)
Foreign exchange movements	1,488,534	258,791	(113,610)	1,633,715
Reclassified to assets held for sale	(12,438,757)	(185,534)	(1,734,343)	(14,358,634)
Currency conversion effect	(9,605,982)	(3,874,704)	(4,166,735)	(17,647,421)
Balance at 31 December 2023	84,732,031	21,042,827	23,479,710	129,254,568

An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to finance lease receivables are, as follows:

	Stage 1	Stage 2	Stage 3	Total
Impairment allowance	EUR	EUR	EUR	EUR
Balance at 1 January 2023	2,977,453	2,546,067	14,429,796	19,953,316
Transfer to Stage 1*	482,324	(354,803)	(127,521)	-
Transfer to Stage 2*	(383,939)	472,708	(88,769)	-
Transfer to Stage 3*	(577,303)	(1,024,034)	1,601,337	-
Impairment for new financial assets acquired	1,752,479	1,147,436	3,953,002	6,852,917
Reversed impairment for partly settled receivables	(635,618)	(139,942)	(215,150)	(990,710)
Reversed impairment for written off receivables	(439,744)	(548,161)	(10,430,759)	(11,418,664)
Reversed impairment for sold receivables	(65,066)	(30,484)	(1,421,641)	(1,517,191)
Net remeasurement of loss allowance	(99,198)	974,363	8,834,607	9,709,772
Foreign exchange movements	44,040	(426)	(250,412)	(206,798)
Reclassified to assets held for sale	(91,131)	(18,510)	(1,410,457)	(1,520,098)
Currency conversion effect	(376,419)	(506,428)	(2,427,579)	(3,310,426)
Balance at 31 December 2023	2,587,878	2,517,786	12,446,454	17,552,118
Change in impairment excluding impact from asset reclassification to assets held for sale and foreign exchange convertion impact	77,975	496,657	1,854,694	2,429,326

• • Amounts presented as changes in finance lease receivables and impairment allowance due to transfer among stages include only movement of opening balances as at 1 January. Information about transfers among stages does not include new financial assets acquired and impairment calculated during the year.

On the 1 January 2017 the subsidiary in Lithuania ' Mogo LT UAB' entered into a Credit Default Swap (CDS) agreement with another subsidiary in Estonia 'Risk Management Services OU'. On the basis of CDS all leasing and loan agreements issued by the Lithuanian subsidiary are secured by the CDS and are transferred to 'Risk Management Services OU' if the client of leasing or loan agreement is late in paying the debt for more than 125 days. Due to this reason, in 2017 impairment was reversed and no impairment is calculated onwards for Lithuanian subsidiary. Due to the signed Credit Default Swap agreement with Risk Management Services OU the loan agreements are insured and in case of customer insolvency and Mogo LT UAB receives a payment from Risk Management Services OU. During 2021 also Renti LT UAB signed the same type of agreement with the same conditions. As of 1 January 2022 'Risk Management Services OU' is no longer considered a related party since it has been disposed from the group in 2020.

24. Finance Lease Receivables (continued)

	Minimum lease payments	Net investment in the lease	Minimum lease payments	Net investment in the lease
	31.12.2023	31.12.2023	31.12.2022	31.12.2022
Finance lease receivables	EUR	EUR	EUR	EUR
Up to one year	114,738,180	65,819,206	130,897,899	78,542,316
Years 2 through 5 combined	111,486,163	61,557,384	119,795,107	72,348,120
More than 5 years	2,303,125	1,877,978	3,985,791	3,517,501
TOTAL, GROSS:	228,527,468	129,254,568	254,678,797	154,407,937

	31.12.2023	31.12.2022
Unearned finance income	EUR	EUR
Up to one year	48,918,974	52,355,583
Years 2 through 5 combined	49,928,779	47,446,987
More than 5 years	425,147	468,290
TOTAL, GROSS:	99,272,900	100,270,861

	Non-Current	Current	Non-Current	Current
Finance lease receivables, net	31.12.2023	31.12.2023	31.12.2022	31.12.2022
EUR	EUR	EUR	EUR	EUR
Finance lease receivables	63,435,363	56,494,550	75,865,620	68,550,352
Accrued interest and handling fee	-	9,324,655	-	9,991,965
Fees paid and received upon lease disbursement	158,762	141,391	(250,177)	(226,054)
Impairment allowance	(3,795,617)	(13,756,501)	(3,512,714)	(16,440,602)
TOTAL, NET:	59,798,508	52,204,095	72,102,729	61,875,661

Transactions with peer-to-peer platforms

From year 2016 the Group started placing lease agreement receivables on peer-to-peer lending platform. Agreements were offered with buy back guarantee, which means that all risks of such agreements remain with the Group and in case of client default the Group has the liability to repay the whole remaining principal and accrued interest to P2P investor. By using the same platform the Group also offered loans without buy back guarantee, which means that all risks related to client default were transferred to P2P investor. Portions of agreements purchased by investors are therefore considered as financial assets eligible for derecognition from the Group's statement of financial position. Total gross portfolio and associated liabilities for the portfolio derecognized from Group financial assets were:

	31.12.2023	31.12.2022
	EUR	EUR
Non-current
Finance lease receivable	-	15,618
Associated liabilities	-	(15,618)
NET POSITION:	-	-
Current
EUR	EUR	EUR
Finance lease receivable	-	16,169
Associated liabilities	-	(16,169)
NET POSITION:	-	-
Total gross portfolio derecognized from Group's financial assets	-	31,787
Total associated liabilities	-	(31,787)
TOTAL NET POSITION:	-	-

Information about liabilities for attracted funding through P2P platform where derecognition of portfolio was not applicable are disclosed in Note 38.

25. Loans and advances to customers

The table below shows the credit quality and the maximum exposure to credit risk based on the Group’s internal credit rating system and year-end stage classification. The amounts presented are gross of impairment allowances.

| | 2023 | 2022 |
| :---------------------------------- | :-------------------- | :-------------------- | :-------------------- |
| Loans and advances to customers | Stage 1 | Stage 2 | Stage 3 | TOTAL | TOTAL |
| EUR | EUR | EUR | EUR | EUR | EUR |
| Not past due | 179,338,126 | 2,677,719 | 110,036 | 182,125,881 | 133,918,993 |
| Days past due up to 30 days | 17,604,819 | 3,550,434 | 128,841 | 21,284,094 | 15,562,370 |
| Days past due up to 60 days | - | 6,002,942 | 1,336,807 | 7,339,749 | 6,190,935 |
| Days past due over 60 days | - | 1,366,066 | 65,489,215 | 66,855,281 | 60,562,443 |
| TOTAL, GROSS: | 196,942,945 | 13,597,161 | 67,064,899 | 277,605,005 | 216,234,741 |

An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to loans and advances to customers are, as follows:

	Stage 1	Stage 2	Stage 3	Total
Loans and advances to customers	EUR	EUR	EUR	EUR
Balance at 1 January 2023	144,046,576	11,077,119	61,111,046	216,234,741
Transfer to Stage 1	2,348,528	(1,970,071)	(378,457)	-
Transfer to Stage 2	(6,298,750)	6,465,887	(167,137)	-
Transfer to Stage 3	(13,812,512)	(4,228,364)	18,040,876	-
New financial assets acquired	113,533,094	6,078,306	9,921,214	129,532,614
New financial assets acquired through obtained subsidiaries

Non current

	31.12.2023	31.12.2022
EUR	EUR
Loans to related parties	-	3,203,344
Impairment allowance	-	(49,727)
TOTAL:	-	3,153,617

Current

	31.12.2023	31.12.2022
EUR	EUR
Loans to related parties	-	-
Accrued interest	-	-
TOTAL:	-	-

An analysis of Loans to related parties staging and the corresponding ECL allowances at the year end are as follows:

31.12.2023

	Stage 1	Stage 2	Stage 3	Total
Loans to related parties	-	-	-	-
Accrued interest	-	-	-	-
Total	-	-	-	-
Total ECL calculated	-	-	-	-

31.12.2022

	Stage 1	Stage 2	Stage 3	Total
Loans to related parties	3,203,344	-	-	3,203,344
Accrued interest	-	-	-	-
Total	3,203,344	-	-	3,203,344
Total ECL calculated	(49,727)	-	-	(49,727)

27. Equity‑accounted investees

	31.12.2023	31.12.2022
EUR	EUR
Investments in associates	580,714	420,622
TOTAL:	580,714	420,622

In September 2019 the Group sold 51% of its previously wholly owned investment in its subsidiary Primero Finance AS. As a result the Group lost the control over the subsidiary and recognizes this investment in the statement of financial position as equity-accounted investees. During 2021 the Group established a new holding company - Primero Holding AS together with majority shareholder of Primero Finance AS. Group's shareholding also is 49% in the new entity. At the same time ownership of Primero Finance AS was transferred to Primero Holding AS. Through 49% shareholding in Primero Holding AS, the Group continues to have investment in Primero Finance AS at the same level. Also during 2021 Primero Holding AS established a new company in Lithuania - Primero Finance UAB and plans to expand its activities in this market. In 2022 Primero Holding AS also established a subsidiary 'Primero SV1 OU' and also will expand its activities in Estonia. Further information on entities performance disclosed below:

	31.12.2023
Name of the company	Country	Total Equity	Interest in affiliate equity	Net value according to equity method
		EUR	EUR	EUR
Primero Holding AS (Latvia)	Latvia	2,150,000	1,642,011	49

	31.12.2022
Name of the company	Country	Total Equity	Interest in affiliate equity	Net value according to equity method
		EUR	EUR	EUR
Primero Holding AS (Latvia)	Latvia	550,000	867,020	49

27. Equity‑accounted investees (continued)

Changes in investments in associates

	2023	2022
EUR	EUR
Balance as at 1 January	420,622	149,872
Increase in share capital	784,000	-
Elimination of unrealised gain	-	193,339
Income/(loss) from associates accounted under equity method	(623,908)	77,411
Balance as at 31 December	580,714	420,622

Consolidated statement of profit and loss of affiliate (unaudited)

	2023	2022
EUR	EUR
Interest revenue	3,518,858	3,826,015
Interest expense	(58,269)	(377)
Net interest income	3,460,589	3,825,638
Fee and commission income	26,027	77,158
Impairment expense	(741,965)	(326,161)
Net loss from de-recognition of financial assets measured at amortized cost	(583,487)	(1,384,076)
Selling expense	(281,298)	(113,806)
Administrative expense	(1,163,099)	(846,818)
Other operating income	197,485	110,775
Other operating expense	(2,176,750)	(1,176,120)
Profit before tax	(1,262,498)	166,590
Corporate income tax	(10,155)	(9,237)
Deferred income tax	(628)	628
Net profit	(1,273,281)	157,981

Consolidated statement of financial position at year end of affiliate

	31.12.2023	31.12.2022
EUR	EUR
ASSETS
Other intangible assets	11,897	26,313
Right-of-use assets	5,877	8,175
Property, plant and equipment	990	2,290
Deferred tax assets	-	628
Loans and advances to customers	12,976,121	9,931,567
Finance lease receivables	4,433,900	3,373,329
TOTAL NON-CURRENT ASSETS	17,428,785	13,342,302
Loans and advances to customers	3,454,399	3,336,447
Finance lease receivables	6,352,553	704,754
Prepaid expense	67,820	64,515
Trade receivables	260,988	357,137
Other receivables	102,841	36,914
Cash and cash equivalents	2,037,451	1,214,906
Assets held for sale	77,103	67,905
TOTAL CURRENT ASSETS	12,353,155	5,782,578
TOTAL ASSETS	29,781,940	19,124,880
EQUITY
Share capital	2,150,000	550,000
Retained earnings/(losses)	(507,989)	198,020
brought forward	765,292	40,039
for the period	(1,273,281)	157,981
TOTAL EQUITY	1,642,011	748,020
LIABILITIES
Non-current liabilities
Borrowings	26,814,699	16,639,173
Total non-current liabilities	26,814,699	16,639,173
Current liabilities
Borrowings	53,787	4,419
Trade and other payables	1,048,317	1,575,590
Taxes payable	33,675	22,551
Other liabilities	55,043	35,180
Accrued liabilities	134,408	99,947
Total current liabilities	1,325,230	1,737,687
TOTAL LIABILITIES	28,139,929	18,376,860
TOTAL EQUITY AND LIABILITIES	29,781,940	19,124,880

28. Finished goods and goods for resale

	31.12.2023	31.12.2022
EUR	EUR
Advance payments to vehicle dealerships	2,517,439	2,069,211
Acquired vehicles for purpose of selling them to customers	2,220,088	196,808
Other inventory	377,779	214,969
Impairment allowance	(297,207)	-
TOTAL:	4,818,099	2,480,988

Income and expenses from sale of vehicles and other goods during the reporting year were EUR 1 936 451 and EUR 1 789 166 respectively. (2022: EUR 174 152 and EUR 171 752 respectively. Note 11).

29. Other loans and receivables

Interest rate per annum (%) | Maturity | Non-current

| :---------------------------------------- | :----------- | :----------- |
| | 31.12.2023 | 31.12.2022 |
| EUR | EUR |
| Long term receivable for sold finance lease portfolio to associated entities | 175,783 | 267,629 |
| TOTAL: | 175,783 | 267,629 |

Interest rate per annum (%) | Maturity | Current

| :---------------------------------------- | :----------- | :----------- |
| | 31.12.2023 | 31.12.2022 |
| EUR | EUR |
| Receivable for sold finance lease portfolio to associated entities | 124,638 | 377,177 |
| Deposit in bank in Albania | 29,054 | 320,000 |
| Other short term loans to non-related parties | 44,882 | - |
| TOTAL: | 198,574 | 697,177 |

An analysis of other loans and receivables staging and the corresponding ECL allowances at the year end are as follows:

31.12.2023

	Stage 1	Stage 2	Stage 3	Total
Receivable for sold finance lease portfolio to associated entities	300,421	-	-	300,421
Deposit in bank in Albania	29,054	-	-	29,054
Other short term loans to non-related parties	44,882	-	-	44,882
Total	374,357	-	-	374,357
Total ECL calculated	-	-	-	-

31.12.2022

	Stage 1	Stage 2	Stage 3	Total
Receivable for sold finance lease portfolio to associated entities	644,806	-	-	644,806
Deposit in bank in Albania	320,000	-	-	320,000
Total	964,806	-	-	964,806
Total ECL calculated	-	-	-	-

30. Prepaid expense

	31.12.2023	31.12.2022
EUR	EUR
Advances paid for services	647,299	260,363
Prepaid insurance expenses	557,675	206,612
Prepaid Mintos service fee	1,667	2,500
Other prepaid expenses	1,918,103	1,638,854
TOTAL:	3,124,744	2,108,329

	31.12.2023	31.12.2022
EUR	EUR	EUR
Other receivables
Overpaid VAT from subsidiary in Latvia	461,158	447,134
Impairment allowance for overpaid VAT	(461,158)	(447,134)
Net overpaid VAT*	-	-
CIT paid in advance	1,610,554	4,174,686
Accrued income from currency hedging transactions**	1,960,166	434,696
Receivables from P2P platform for attracted funding	1,016,629	-
Disputed tax audit measurement in Georgia***	911,322	940,041
Overpaid VAT in other subsidiaries	566,688	689,126
Security deposit for office lease (more information in Note 23).	358,706	364,348
Receivables for payments received from customers through online payment systems	320,394	255,909
Advance payments for other taxes	287,472	-
Advances to employees	34,454	19,461
Other debtors	1,376,598	1,205,291
Impairment allowance	(175,307)	(787,399)
TOTAL:	8,267,676	7,296,159

1. Other receivables (continued)

* - All receivables are due within the following year, except VAT overpayment where the date of settlement is unclear due to ongoing litigation process in Latvia. This resulted in full settlement of payable VAT and recognition of VAT overpayment. Considering the uncertainty disclosed in Note 37, the Group has decided to recognize the impairment provision in full amount for VAT receivable in the statement of financial position and additional provisions in amount of VAT payable settled by VAT return adjustment and related penalties (see Note 37).

** - The Group enters into currency exchange transactions where it tries to limit its foreign currency rate fluctuation loss. The transaction requires the Group to reserve the a cash deposit with its currency transaction partners. At year end the Group recognizes accrued income based on year end currency rates versus agreed currency transaction rates and recognizes income if the estimated result is expected to be profitable.

*** - The Georgian tax administration has initiated a transfer pricing audit for Mogo LLC (Georgia). The audit covers the financial years 2016, 2017 and 2018. Additional audit has been initiated for financial years 2019 and 2020. Audit decisions have been issued for respective year. The Georgian tax administration has challenged that interest rate applied by Eleving Group S.A. on loan issued to Mogo LLC complies with arm’s lengths principle. According to the decisions additional tax amount of EUR 911 322 has been assessed. The amount has been withheld by the Georgian tax administration from a tax overpayment of Mogo LLC, and part of the amount has been transferred to the Georgian state budget by Mogo LLC. Mogo LLC has appealed the decisions. The tax audit decisions for have been appealed within Tbilisi City Court. Group’s management has made a decision to apply for a mutual agreement procedure according to the double tax treaty concluded between Georgia and Luxembourg. In 2022 the Group has submitted the application within the Luxembourg tax administration to initiate mutual agreement procedure. The tax administration is assessing the application. The management of the Group considers that the interest rate applied by Eleving Group S.A. on loans issued to related parties fully complies with the arm’s length principle. The applied interest rate is justified by transfer pricing policies held by the Group. The management of the Group considers that the approach of the Georgian tax administration does not comply with basic loan pricing principles and international guidelines. In order to determine the market interest rate for the Eleving Group S.A. loan issued to the Mogo LLC, Georgian tax administration has used coupon rate of bonds issued by credit institutions as a comparable source. The coupon rates of such bonds are not comparable as represents lower risk market comparing with that where the Group operates. Additionally, when issuing the decision Georgian tax administration has not considered borrowing costs of Eleving Group S.A. The interest rate applied by the Georgian tax administration in the decisions is significantly lower than the borrowing costs of Eleving Group S.A. The Group is in a position to use all available local and international measures to justify its transfer pricing policies and to achieve the result that the decisions are fully cancelled. According to management’s best estimate no significant economical outflows in relation to the transfer pricing audit is expected in the future as the possibility of such has been assessed as remote. The Group management expects to fully recover paid tax.

1. Cash and cash equivalents

	31.12.2023	31.12.2022
EUR	EUR	EUR
Cash at bank	26,754,625	13,132,865
Cash on hand*	715,843	701,972
TOTAL:	27,470,468	13,834,837

* - The Group provides the possibility to its customers to pay their monthly receivables in cash, therefore it holds cash on hand at period end.

An analysis of cash and cash equivalent staging and the corresponding ECL allowances at the year end are as follows:

31.12.2023

	Stage 1	Stage 2	Stage 3	Total
EUR	EUR	EUR	EUR	EUR
Cash at bank	26,754,625	-	-	26,754,625
Cash on hand	715,843	-	-	715,843
Total	27,470,468	-	-	27,470,468
Total ECL calculated	-	-	-	-

31.12.2022

	Stage 1	Stage 2	Stage 3	Total
EUR	EUR	EUR	EUR	EUR
Cash at bank	13,132,865	-	-	13,132,865
Cash on hand	701,972	-	-	701,972
Total	13,834,837	-	-	13,834,837
Total ECL calculated	-	-	-	-

The Group has not calculated an ECL allowance for cash and cash equivalents on the basis that placements with banks are of short term nature and the lifetime of these assets under IFRS 9 is so short that the low probability of default would result in immaterial ECL amounts (2022: EUR 0). The Group cooperates with banks with credit ratings no less than BBB-. The Group also does not keep large amounts of funds in one specific bank to limit concentration risk and high exposure to small amount of banks.

1. Disposal groups held for sale

In latter part of 2021, management committed to a plan to sell parts of its vehicle finance business operations in Balkan countries and liquidate subsidiary in Bosnia&Herzegovina. Accordingly, several entities were presented as a disposal group held for sale. In 2021 management decided to also initiate the liquidation of several additional entities in Poland. Also in 2024 the Group has sold its subsidiaries in Belarus, therefore respective entities are disclosed as disposal groups in these consolidated financial statements. As at 31 December 2023 following companies were classified as held for sale or under liquidation:

• Mogo Leasing d.o.o., Bosnia&Herzegovina
• Rocket Leasing OOO, Belarus
• Autotrade OOO, Belarus
• MOGO Kredit LLC, Belarus

Assets and liabilities of disposal groups held for sale

	31.12.2023	31.12.2022
EUR	EUR	EUR
ASSETS
Mogo Leasing d.o.o., Bosnia&Herzegovina	35,172	362,262
Rocket Leasing OOO, Belarus	856	-
Autotrade OOO, Belarus	2,464	-
MOGO Kredit LLC, Belarus	9,518,371	-
Mogo Sp. z o.o., Poland (liquidated in 2023)	-	16,173
Pocco Finance Sp. z o.o., Poland (liquidated in 2023)	-	221
TOTAL ASSETS OF DISPOSAL GROUPS HELD FOR SALE	9,556,863	378,656
LIABILITIES
Mogo Leasing d.o.o., Bosnia&Herzegovina	4,086	12,515
Rocket Leasing OOO, Belarus	382	-
Autotrade OOO, Belarus	110	-
MOGO Kredit LLC, Belarus	2,040,426	-
Mogo Sp. z o.o., Poland (liquidated in 2023)	-	94,698
Pocco Finance Sp. z o.o., Poland (liquidated in 2023)	-	79
TOTAL LIABILITIES DIRECTLY ASSOCIATED WITH THE ASSETS HELD FOR SALE	2,045,004	107,292

Mogo Sp. z o.o., Poland

At 31 December 2023, the entity was stated at fair value less costs to sell and comprised the following assets and liabilities.

	31.12.2023	31.12.2022
EUR	EUR	EUR
ASSETS
Property, plant and equipment	-	641
TOTAL NON-CURRENT ASSETS	-	641
Prepaid expense	-	479
Other receivables	-	11,152
Cash and cash equivalents	-	3,825
Assets held for sale	-	76
TOTAL CURRENT ASSETS	-	15,532
TOTAL ASSETS	-	16,173
LIABILITIES
Current liabilities
Advances received	-	8,164
Trade and other payables	-	1,649
Taxes payable	-	3,978
Other liabilities	-	15
Accrued liabilities	-	80,892
Total current liabilities	-	94,698
TOTAL LIABILITIES	-	94,698

The company was liquidated in 2023.

1. Disposal groups held for sale (continued)

Mogo Leasing d.o.o., Bosnia&Herzegovina

At 31 December 2023, the entity was stated at fair value less costs to sell and comprised the following assets and liabilities.34. Disposal groups held for sale

Pocco Finance Sp. z o.o., Poland
At 31 December 2023, the entity was stated at fair value less costs to sell and comprised the following assets and liabilities.

31.12.2023	31.12.2022	EUR	EUR
ASSETS
Cash and cash equivalents		-	221
TOTAL CURRENT ASSETS		-	221
TOTAL ASSETS		-	221
LIABILITIES
Current liabilities
Trade and other payables		-	79
Total current liabilities		-	79
TOTAL LIABILITIES		-	79

The company was liquidated in 2023.

1. Disposal groups held for sale (continued)

Rocket Leasing OOO, Belarus
At 31 December 2023, the entity was stated at fair value less costs to sell and comprised the following assets and liabilities.

31.12.2023	EUR
ASSETS
Other intangible assets	463
TOTAL NON-CURRENT ASSETS	463
Prepaid expense	13
Other receivables	153
Cash and cash equivalents	227
TOTAL CURRENT ASSETS	393
TOTAL ASSETS	856
LIABILITIES
Current liabilities
Advances received	303
Other liabilities	79
Total current liabilities	382
TOTAL LIABILITIES	382

Autotrade OOO, Belarus
At 31 December 2023, the entity was stated at fair value less costs to sell and comprised the following assets and liabilities.

31.12.2023	EUR
ASSETS
Other receivables	1,433
Cash and cash equivalents	1,031
TOTAL CURRENT ASSETS	2,464
TOTAL ASSETS	2,464
LIABILITIES
Current liabilities
Other liabilities	110
Total current liabilities	110
TOTAL LIABILITIES	110

MOGO Kredit LLC, Belarus
At 31 December 2023, the entity was stated at fair value less costs to sell and comprised the following assets and liabilities.

31.12.2023	EUR
ASSETS
Other intangible assets	304,241
Right-of-use assets	88,535
Property, plant and equipment	8,347
Deferred tax asset	290,860
Loans and advances to customers	54,013
Finance lease receivables	4,458,218
TOTAL NON-CURRENT ASSETS	5,204,214
Loans and advances to customers	93,269
Prepaid expense	31,849
Other receivables	4,094,941
Cash and cash equivalents	94,098
TOTAL CURRENT ASSETS	4,314,157
TOTAL ASSETS	9,518,371
LIABILITIES
Non-current liabilities
Borrowings	957,552
Total non-current liabilities	957,552
Current liabilities
Borrowings	750,030
Advances received	2,262
Trade and other payables	6,889
Taxes payable	214,200
Other liabilities	49,484
Accrued liabilities	60,009
Total current liabilities	1,082,874
TOTAL LIABILITIES	2,040,426

1. Assets held for sale

Other assets held for sale	31.12.2023	31.12.2022	EUR	EUR
Repossessed collateral			745,910	1,133,041
Impairment allowance			(293,855)	(52,690)
			452,055	1,080,351

Changes in other assets held for sale
| Net changes during the year | 31.12.2022 | 31.12.2023 | |
| :-------------------------- | :--------- | :--------- | :-- |
| Repossessed collateral | 1,080,351 | (628,296) | 452,055 |
| TOTAL: | 1,080,351 | (628,296) | 452,055 |

Repossessed collaterals are vehicles taken over by the Group in case of default by the Group's clients on the related lease agreements. After the default of the client, the Group has the right to repossess the vehicle and sell it to third parties. The Group does not have the right to repossess, sell or pledge the vehicle in the absence of default by Group's clients. The Group usually sells the repossessed vehicles within 90 days after repossession. There are no balances left unsold from previous reporting period.

1. Share capital and reserves

Share capital
The subscribed share capital of the Group amounts to EUR 1 000 500 and is divided into 100 050 000 shares fully paid up.
The movements on the Share capital caption during the year are as follows:

Share capital EUR	Number of regular Shares	Total number of Shares
Opening balance as at 1 January 2022	1,000,000	100,000,000
Subscriptions	500	50,000
Redemptions	-	-
Closing balance as at 31 December 2022	1,000,500	100,050,000
Opening balance as at 1 January 2023	1,000,500	100,050,000
Subscriptions	-	-
Redemptions	-	-
Closing balance as at 31 December 2023	1,000,500	100,050,000

Foreign currency translation reserve
As explained in Note 2, foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Reserves

	31.12.2023	31.12.2022	EUR	EUR
Mandatory reserves in TIGO Finance DOOEL Skopje (North Macedonia)**	1,938,924	700,555
Reserve in Eleving Finance AS*	1,927,058	-
Mandatory reserves in OCN Sebo Credit SRL (Moldova)**	258,187	258,187
Mandatory reserves in Eleving Group S.A. (Luxembourg)**	100,050	100,050
Mogo IFN SA (Romania)**	52,940	52,940
Mandatory reserves in Mogo Loans SRL (Moldova)**	4,733	4,733
Mandatory reserves in Mogo LT UAB (Lithuania)**	2,897	2,897
Mandatory reserves in Next Fin LLC (Ukraine)**	2,842	2,842
TOTAL:	4,287,631	1,122,204

* - Reserve in Eleving Finance AS consists of 1 927 058 EUR. It was obtained during the integration of EC Finance Group SIA into the Groups equity. Additional information about the obtaining of EC Finance Group SIA is disclosed in Note 19.
** - further information disclosed in Note 2.

1. Provisions

Non-current

	31.12.2023	31.12.2022	EUR	EUR
Provision for VAT liabilities in Latvia*	123,798	130,824
Provision for taxes and duties in Latvia*	33,518	21,285
TOTAL:	157,316	152,109

* Provision for taxes and duties in Latvia are calculated based on rates applied by tax body of Republic of Latvia and discounted with rate of 0.42% for estimated litigation process period of 2 years. See Note 32 for more information.

Changes in provisions

	01.01.2023	Additional provisions recognized	Unused provisions reversed	Provisions used	Unwinding of discount	31.12.2023
Provision for VAT liabilities in Latvia	130,824	-	-	-	(7,026)	123,798
Provision for taxes and duties in Latvia	21,285	12,233	-	-	-	33,518
	152,109	12,233	-	-	(7,026)	157,316

1. Borrowings

Non-current

Subordinated borrowings

	Interest rate per annum (%)	Maturity	31.12.2023	31.12.2022	EUR	EUR
Eleving Group S.A. subordinated bonds nominal value3)	12%+6m Euribor	29/12/2031	16,850,000	18,956,000
Bonds acquisition costs			(387,647)	(478,986)
TOTAL:			16,462,353	18,477,014

Bonds

	Interest rate per annum (%)	Maturity	31.12.2023	31.12.2022	EUR	EUR
Eleving Group S.A. bonds nominal value1)	9.5%	18.10.2026	144,916,000	149,680,000
Eleving Group S.A. bonds nominal value8)	13%	31/10/2028	46,667,200	-
Mogo AS 30m bonds nominal value2)			-	29,196,000
Bond additional interest accrual			171,461	86,833
Bonds acquisition costs			(5,538,601)	(4,831,596)
TOTAL:			186,216,060	174,131,237

Other borrowings

	Interest rate per annum (%)	Maturity	31.12.2023	31.12.2022	EUR	EUR
Long term loan from banks4)	6%+16%	up to December 2026	3,054,777	1,191,007
Lease liabilities for rent of premises5)	2%-12%	up to 10 years	6,466,463	7,115,543
Lease liabilities for rent of vehicles5)	2%-12%	up to 3 years	780,696	178,449
Financing received from P2P investors6)	4.5% - 15.5%	up to June 2033	21,077,011	27,727,346
Lease liabilities for acquired rental fleet			-	2,307,245
Long term borrowings in Kenya9)	9.5%-15.5%	21/06/2027	6,302,336	-
Other borrowings7)	8.3%-15.5%	up to December 2026	2,198,622	198,184
Loan acquisition costs			(151,824)	(131,905)
TOTAL:			39,728,081	38,585,869

TOTAL NON CURRENT BORROWINGS: 242,406,494 231,194,120

Current

	Interest rate per annum (%)	Maturity	31.12.2023	31.12.2022	EUR	EUR
Other borrowings
Financing received from P2P investors6)	4.5% - 15.5%	up to June 2033	42,798,405	39,919,916
Mogo AS 30m bonds nominal value2)	11%	31/03/2024	17,481,000	-
Accrued interest for bonds			3,675,421	2,930,892
Lease liabilities for rent of premises5)	2%-12%	up to 10 years	3,763,479	2,659,706
Accrued interest for financing received from P2P investors			312,643	489,376
Lease liabilities for rent of vehicles5)	2%-12%	up to 3 years	790,450	142,794
Short term loans from banks4)	7.5% - 14%	October 2024	3,029,560	4,304,951
Accrued interest for loans from banks			15,906	60,914
Short term loans from non related parties	9.5%-20%	up to December 2024	12,428,261	1,462,811
Accrued interest for loans from non related parties			264,992	32,516
Other borrowings7)	8.3%-15.5%	up to December 2024	11,244,485	7,289,026
Accrued interest for borrowings in Kenya			375,424	188,268
Lease liabilities for acquired rental fleet			-	633,063
TOTAL:			96,180,026	60,114,233

1. Borrowings (continued)

1) On 18 October 2021, Eleving Group successfully issued a 5-year senior secured corporate bond (XS2393240887), listed on the Regulated Market (General Standard) of the Frankfurt Stock Exchange in 2023 for EUR 150 million at par with an annual interest rate of 9.5%. The bond will mature on 18 October 2026.
2) On 11 February 2021 subsidiary in Latvia - Mogo AS registered with the Latvian Central Depository a bond facility through which it can raise up to EUR 30 million. With the purpose to refinance the previous bond issuance. The notes are issued at par, have a maturity at 31 of March, 2024 and carry a fixed coupon of 11% per annum, paid monthly in arrears. The note type on 11 March 2021 was changed to "publicly issued notes" and were listed on the regulated market of NASDAQ OMX Baltic.
3) On 29 December 2021 Eleving Group S.A. registered with the Latvian Central Depository a bond facility through which it can raise up to EUR 25 million (XS2427362491). The notes are issued at par, have a maturity at 29 of December, 2031 and carry a coupon of 12% + 6 month Euribor per annum, paid monthly in arrears.# 38. Borrowings

On 7 March 2022 the bonds were listed on the First North unregulated bond market of NASDAQ OMX Baltic.

4) Loans from banks comprise loans received by:
* Mogo Armenia from Ardshinbank CJSC (Armenia). The loans are denominated in local currency with an interest rate of 7.5%-14%.
* OCN Sebo Credit SRL from bank in Moldova. The loan is denominated in local currency with an interest rate of 16%.
* Kredo Finance SHPK (Albania) from Union Bank JSC (Albania) in amount of ALL 150 million and from Tirana Bank JSC (Albania) in the amount of ALL 120 million and interest rate of 10%.
* SIA Spaceship from AS Industra Bank (Latvia) in the amount of EUR 1,8 million and interest rate 6%+6M EURIBOR.

5) Group has entered into several lease agreements for office premises and branches as well as several vehicle rent agreements, which are accounted under IFRS 16.

6) Attracted funding from P2P platform non-current/ current split is aligned with the related non-current/ current split of the lease or loan agreement which is assigned to investors through the P2P platform. Funds are transferred to Group's bank accounts once per week.

7) In June 2022, Mogo Auto Limited entered into an agreement for short term note program with Dry Associates Limited, where the later was to manage the placement of funds. The average rate of interest is 15.5% for notes issued in local currency (KES), while EUR and USD notes are issued at 8.3% and 9.3% respectively.

8) On 31 October 2023, Eleving Group successfully issued a 5-year senior secured corporate bond (DE000A3LL7M4), admitted to trading on Frankfurt Stock Exchange’s and Nasdaq Riga Stock Exchange’s regulated market, for EUR 50 million at par with an annual interest rate of 13%. The bond will mature on 31 October 2028.

9) On 21 June 2023 Mogo Auto Limited (Kenya) has attracted from VERDANT CAPITAL HYBRID FUND I GMBH & CO. a USD 7 million loan facility consisting of USD 5.5 million senior secured tranche and USD 1.5 million unsecured subordinated tranche. The senior secured tranche has an interest rate of 9.5% + 3m SOFR and the unsecured subordinated tranche of 15.5% + 3m SOFR. The loan facility matures on the fourth anniversary of the agreement.

Subordinated borrowings

	01.01.2023	Cash flows	Foreign exchange effect	Other	31.12.2023
Eleving Group S.A. subordinated bonds	18,956,000	(2,106,000)	-	-	16,850,000
TOTAL SUBORDINATED BORROWINGS PRINCIPAL:	18,956,000	(2,106,000)	-	-	16,850,000

Other borrowings

	01.01.2023	Cash flows	Foreign exchange effect	Other	31.12.2023
Bonds nominal value	178,876,000	30,188,200	-	-	209,064,200
Financing received from P2P investors	67,647,262	(15,266,084)	399,824	11,094,414	63,875,416
Loans from banks	5,495,958	830,421	(242,042)	-	6,084,337
Borrowings in Kenya	7,289,026	13,829,173	(3,571,378)	-	17,546,821
Lease liabilities for acquired rental fleet	2,940,308	(2,939,818)	(490)	-	-
Other borrowings	198,184	2,318,173	(317,735)	-	2,198,622
Short term loans from non related parties	1,462,811	(14,165,479)	5,112	25,125,817	12,428,261
Lease liabilities	10,096,492	(2,855,262)	(768,670)	5,328,528	11,801,088
TOTAL OTHER BORROWINGS PRINCIPAL:	274,006,041	11,939,324	(4,495,379)	41,548,759	322,998,745

| TOTAL BORROWINGS PRINCIPAL: | 292,962,041 | 9,833,324 | (4,495,379) | 41,548,759 | 339,848,745 |

Total cash flow of borrowings of EUR 9,833,324 consists of cash inflows EUR 288,281,493, cash outflows of EUR 275,592,907 and payments for lease liabilities in amount of EUR 2,855,262.

Acquisition costs and accrued interest

	01.01.2023	Cash flows	Foreign exchange effect	Other	31.12.2023
Bonds acquisition costs	(5,310,582)	(2,740,283)	54,123	2,070,494	(5,926,248)
Loan acquisition costs	(131,905)	(175,599)	4,380	151,300	(151,824)
Acquisition costs of borrowings	(5,442,487)	(2,915,882)	58,503	2,221,794	(6,078,072)
Accrued interest for loans from non related parties	32,516	(1,640,802)	(2,997)	1,876,275	264,992
Accrued interest for financing received from P2P investors	489,376	(6,358,270)	17,670	6,163,867	312,643
Accrued interest for short term borrowings in Kenya	188,268	267,847	(80,691)	-	375,424
Additional bond interest accrual	3,017,725	(22,952,765)	-	23,781,922	3,846,882
Accrued interest for loan from bank	60,914	(605,537)	(4,507)	565,036	15,906
TOTAL ACQUISITION COSTS AND ACCRUED INTEREST:	3,788,799	(31,289,527)	(70,525)	32,387,100	4,815,847

| TOTAL BORROWINGS: | 291,308,353 | (24,372,085) | (4,507,401) | 76,157,653 | 338,586,520 |

Subordinated borrowings

	01.01.2022	Cash flows	Foreign exchange effect	Other	31.12.2022
Eleving Group S.A. subordinated bonds	-	18,956,000	-	-	18,956,000
Bonds acquisition costs	(428,262)	-	(50,724)	-	(478,986)
TOTAL SUBORDINATED BORROWINGS PRINCIPAL:	-	18,956,000	-	-	18,956,000

Other borrowings

	01.01.2022	Cash flows	Foreign exchange effect	Other	31.12.2022
Bonds nominal value	172,100,000	6,776,000	-	-	178,876,000
Financing received from P2P investors	62,008,307	4,278,100	1,360,855	-	67,647,262
Loans from banks	7,484,236	(3,041,825)	1,053,547	-	5,495,958
Short term borrowings in Kenya	-	7,705,929	(416,903)	-	7,289,026
Lease liabilities for acquired rental fleet	-	(3,367,670)	171	6,307,807	2,940,308
Lease liabilities	9,207,380	(2,350,758)	55,517	3,184,353	10,096,492
Short term loans from non related parties	1,818,887	(371,441)	15,365	-	1,462,811
Other borrowings	833,485	(658,985)	23,684	-	198,184
TOTAL OTHER BORROWINGS PRINCIPAL:	253,452,295	8,969,350	2,092,236	9,492,160	274,006,041

| TOTAL BORROWINGS PRINCIPAL: | 253,452,295 | 27,925,350 | 2,092,236 | 9,492,160 | 292,962,041 |

Total cash flow of borrowings of EUR 27,925,350 consists of cash inflows EUR 189,892,932, cash outflows of EUR 176,917,062 and payments for lease liabilities in amount of EUR 2,350,758.

Acquisition costs and accrued interest

	01.01.2022	Cash flows	Foreign exchange effect	Other	31.12.2022
Bonds acquisition costs	(5,790,824)	(825,096)	-	1,305,338	(5,310,582)
Loan acquisition costs	(88,370)	(107,704)	(1,485)	65,654	(131,905)
Acquisition costs of borrowings	(5,879,194)	(932,800)	(1,485)	1,370,992	(5,442,487)
Accrued interest for loans from non related parties	42,255	(419,325)	306	409,280	32,516
Accrued interest for financing received from P2P investors	265,480	(5,611,045)	3,159	5,831,782	489,376
Accrued interest for short term borrowings in Kenya	-	199,036	(10,768)	-	188,268
Additional bond interest accrual	2,776,880	(22,223,458)	-	22,464,303	3,017,725
Accrued interest for loan from bank	66,895	(861,093)	10,772	844,340	60,914
TOTAL ACQUISITION COSTS AND ACCRUED INTEREST:	3,151,510	(28,915,885)	3,469	29,549,705	3,788,799

| TOTAL BORROWINGS: | 250,724,611 | (1,923,335) | 2,094,220 | 40,412,857 | 291,308,353 |

39. Prepayments and other payments received from customers

	31.12.2023	31.12.2022
Unallocated payments received*	785,587	200,851
Received deposits from customers	253,587	202,401
Overpayments from historical customers	36,926	37,239
Advances for sold cars	2,524	4,285
Payments received from ceased receivables	4,930	5,321
TOTAL:	1,083,554	450,097

* - Unallocated payments are payments received from former clients after contractual terms are ended and payments received which cannot be identified and allocated to a respective finance lease or loan and advance to customer balance at 31 December 2023.

40. Taxes payable

	31.12.2023	31.12.2022
Value added tax	917,821	753,111
Withholding tax	1,271,185	961,040
Social security contributions	503,980	458,259
Personal income tax	227,822	165,579
Other taxes	453,194	29,112
TOTAL:	3,374,002	2,367,101

41. Other liabilities

	31.12.2023	31.12.2022
Liabilities against employees for salaries	664,049	669,062
Deferred income	643,591	635,631
Liabilities for unpaid dividends to minority interest holders	-	94,269
Other liabilities	594,752	554,274
TOTAL:	1,902,392	1,953,236

42. Accrued liabilities

	31.12.2023	31.12.2022
Accrued unused vacation	1,895,772	1,658,599
Accruals for bonuses	2,174,311	1,425,036
Other accrued liabilities for received services	1,707,414	1,935,131
TOTAL:	5,777,497	5,018,766

43. Other financial liabilities

On 16 January 2020, the Group acquired an additional 2% interest in the shares of Mogo LLC (Georgia), increasing its ownership interest to 100%. As part of the purchase agreement with the previous non-controlling interest holder of Mogo LLC (Georgia), a contingent consideration has been agreed. There will be additional cash payments to the previous non-controlling interest holder of:
1) 2% of the net profit earned by Mogo LLC for the years 2019 through 2021;
2) Additional annual amounts of GEL 82,836 for the years 2019-2021.

As at the additional interest acquisition date, the fair value of the contingent consideration was estimated to be 212,988 EUR based on the expected probable outcome. During 2020, 2021 and 2022 the Group settled part of the liabilities. Value of remaining amount was reassessed and additional income was recognized in 2022. The significant unobservable inputs used in the fair value measurement of the contingent consideration are disclosed in Note 3. The contingent consideration liability is due for yearly measurement and payment to the former non-controlling interest holder after issuance of the respective year’s annual report. Contingent consideration liability is recognized as follows:

	31.12.2023	31.12.2022
Current contingent consideration liability	-	39,575
TOTAL OTHER FINANCIAL LIABILITIES:	-	39,575

44. Related party disclosures

All ultimate beneficial shareholders and entities controlled or jointly controlled by these individuals or close family members of these individuals are deemed as related parties of the Group. All shareholders have equal rights in making decisions proportional to their share value. As at 31 December 2023 and 31 December 2022 none of the ultimate beneficial owners individually controls the Group. All transactions between related parties are performed according to market rates. Receivables and payables incurred are not secured with any kind of pledge.## 44. Related party disclosures

More detailed information about transactions with related parties is provided in Notes 36 and 38. Other related parties are entities which are under control or joint control of the shareholders of the Group, but not part of the Group. The information related to remuneration of the Group`s Management Board and council members is provided in Note 13.

The income and expense items with related parties for 2023 were as follows:

Related party	Shareholder controlled companies	Other related parties
EUR	EUR	EUR
Interest income	221,079	-
Interest expenses	-	-
Sale of finance lease receivables to associated entities	-	1,008,330
Management services provided to associated entities	-	408,422

The income and expense items with related parties for 2022 were as follows:

Related party	Shareholder controlled companies	Other related parties
EUR	EUR	EUR
Interest income	331,650	-
Interest expenses	(7,776)	-
Sale of finance lease receivables to associated entities	-	1,643,137
Management services provided to associated entities	-	219,599

The receivables and liabilities with related parties as at 31.12.2023 and 31.12.2022 were as follows:

	31.12.2023	31.12.2022
EUR	EUR	EUR
Amounts owed by related parties
Loans to related parties	-	3,153,617
Trade receivables*	424,589	180,899
Total	424,589	3,334,516
Amounts owed to related parties
Unpaid dividends	-	94,269
Payables to related parties	275,584	350,625
Total	275,584	444,894

* Other short term receivables from related parties contain receivables for provided management services to equity accounted investees and subsidiaries in the process of acquisition.

Movement in amounts owed by related parties

Amounts owed by related parties	EUR
Amounts owed by related parties as of 01 January 2022	6,735,013
Receivables repaid in period	(3,400,497)
Amounts owed by related parties as of 31 December 2022	3,334,516
Amounts owed by related parties as of 01 January 2023	3,334,516
Receivables repaid in period	(2,909,927)
Amounts owed by related parties as of 31 December 2023	424,589

Movement in amounts owed to related parties

Amounts owed to related parties	EUR
Amounts owed to related parties as of 01 January 2022	17,606,094
Loans received in period	1,777,816
Loans repaid/settled in period	(19,078,054)
Interest calculated in period	7,776
Interest repaid in period	(7,776)
Change in other payables	44,769
Dividends calculated for minority shareholders	629,792
Dividends paid to minority shareholders	(535,523)
Amounts owed to related parties as of 31 December 2022	444,894
Amounts owed to related parties as of 01 January 2023	444,894
Change in other payables	(75,041)
Dividends calculated for shareholders	10,007,731
Dividends paid to minority shareholders	(10,102,000)
Amounts owed to related parties as of 31 December 2023	275,584

45. Commitments and contingencies

Externally imposed regulatory capital requirements

The Group considers both equity capital as well as borrowings a part of its overall capital risk management strategy. The Group is subject to externally imposed capital requirements in several countries. The main requirements are listed below:

• Albania
  Acquired license on performing financing activities requires to maintain amount of equity at all times not lower than 10% of the total assets of the entity. Management of the Group monitors and increases the share capital if needed to satisfy this requirement.
• Armenia
  Acquired license on performing financing activities require:
  1) To maintain minimum amount of statutory capital of 150mln AMD;
  2) To maintain minimum amount of total capital of 150mln AMD;
  3) To maintain minimum ratio of amounts of total capital and risk-weighted assets at 10%.
  Management of the Group monitors and increases the share capital if needed to satisfy this requirement.
• Romania
  Acquired license on performing financing activities require to ensure the level of equity is not less than company's finance receivables portfolio divided 15 times. Management of the Group monitors and increases the share capital or issues subordinated loans l if needed to satisfy this requirement.
• North Macedonia
  Acquired license on performing financing activities require to ensure that the loan portfolio limit is set as share capital multiplied by 10.

Moldova

The non-bank credit organization is required to hold and maintain its own capital in relation to the value of the assets at any date in the amount of at least 5%.

Botswana

In terms of Regulation 6 of the Micro-Lending Regulations, any person applying to carry on a business as a micro lender shall have and maintain at all times a minimum financial balance of P20,000 (Twenty Thousand Pula)

Cooperation agreement with P2P platforms

Cooperation agreements with P2P platforms require to maintain positive amount of equity at all times in Albania, Armenia, Estonia, Georgia, Kenya, Latvia, Lithuania, Moldova, North Macedonia and Romania. Management of the Group monitors and increases the share capital if needed to satisfy this requirement.

The Group is subject to additional financial covenants relating to its attracted funding through P2P platform. Group is regularly monitoring respective indicators and ensures that covenants are satisfied. The Group is in compliance with these covenants at 31 December 2023 and 31 December 2022 and during the years.

Eleving Group S.A. bonds

There are restrictions in the prospectus for the bonds issued on the Frankfurt Stock exchange (ISIN (XS2393240887 and DE000A3LL7M4)). These financial covenants are the following:
(a) the Interest Coverage Ratio for the Relevant Period is at least 1.25;
(b) the Capitalization Ratio for the Relevant Period is at least 15%; and
(c) the Consolidated Net Leverage Ratio for the Relevant Period does not exceed 6.00x.
There are other limitations regarding additional and permitted debt, restricted and permitted payments, permitted loans and securities. The Group is in compliance with all covenants during the entire reporting period.

Mogo AS bonds

There are restrictions in the prospectus for the bonds issued on the Nasdaq Baltic (ISIN: LV0000802452), namely, until the date of repayment thereof, Eleving Group shall undertake to maintain the following financial covenants:
(a) The Capitalization Ratio shall in any case be at least 15.00 per cent;
(b) The Interest Coverage Ratio shall be at least 1.25, calculated on twelve (12) consecutive calendar months.

During the reporting period the Group complied with all externally imposed capital requirements to which it was subjected to.

Other contingent liabilities and commitments

1) On 29 September 2017 the subsidiary in Armenia - Mogo UCO LLC entered into a pledge agreement over deposit and right of claim with Ardshinbank CJSC, establishing a pledge over the funds in the bank accounts of Mogo UCO LLC in favour of Ardshinbank CJSC, in order to secure Mogo UCO LLC obligations towards Ardshinbank CJSC deriving from credit contract dated 29 September 2017.
2) On 2 November 2017 the subsidiary in Armenia Mogo UCO LLC entered into a pledge agreement over deposit and right of claim with Ardshinbank CJSC, establishing a pledge over the funds in the bank accounts of Mogo UCO LLC in favour of Ardshinbank CJSC, in order to secure Mogo UCO LLC obligations towards Ardshinbank CJSC deriving from credit contract dated 2 November 2017.
3) On 26 February 2018 the subsidiary in Latvia mogo AS entered into a surety agreement with Ardshinbank CJSC and Mogo LLC, in order to secure Mogo LLC obligations towards Ardshinbank CJSC deriving from loan agreement concluded between Ardshinbank CJSC and Mogo LLC on 26 February 2018. The principal amount of the loan agreement is EUR 1 000 000.
4) Starting from 14 October 2021 Eleving Group and certain of its Subsidiaries entered into several pledge agreements with TMF Trustee Services GmbH, establishing pledge over shares of those Subsidiaries, pledge over present and future loan receivables of those Subsidiaries, pledge over trademarks of those Subsidiaries, general business pledge over those Subsidiaries, pledge over primary bank accounts if feasible, in order to secure Eleving Group obligations towards bondholders deriving from Eleving Group bonds (ISIN: XS2393240887). Subsequently additional pledgors were added who became material (subsidiaries with net portfolio of more than EUR 7 500 000 and represents at least 3% of the Net Loan Portfolio) according to terms and conditions of the bonds.
5) Starting from 14 October 2021 Eleving Group as Issuer and certain of its Subsidiaries (subsidiaries with net portfolio of more than EUR 7 500 000 and represents at least 3% of the Net Loan Portfolio) as Guarantors have entered into a guarantee agreement dated 14 October 2021 (as amended and restated from time to time) according to which the guarantors unconditionally and irrevocably guaranteed by way of an independent payment obligation to each holder of the Eleving Group bonds (ISIN: XS2393240887) the due and punctual payment of principal of, and interest on, and any other amounts payable under the Eleving Group bonds (ISIN: XS2393240887) offering memorandum.
6) On 27 November 2018 the subsidiary in Armenia Mogo UCO LLC entered into an agreement on pledge of right of claim and funds with Ardshinbank CJSC, pledging Mogo UCO LLC right of claim and funds, in order to secure Mogo UCO LLC obligations towards Ardshinbank CJSC deriving from credit contract dated 27 November 2017.
7) On 15 April 2019 Eleving Group S,A. as the guarantor and the subsidiary in Armenia - Mogo UCO LLC entered into a surety agreement with Ardshinbank CJSC, in order to secure Mogo UCO LLC obligations towards Ardshinbank CJSC deriving from credit contract dated 2 November 2017.8) On 31 July 2019 the subsidiary in Latvia - mogo AS entered into a commercial pledge agreement with Citadele banka AS, establishing a pledge over rights of claim arising from certain agreements concluded between mogo AS and its clients, to secure mogo AS, mogo OÜ and UAB mogo LT obligations towards Citadele banka AS deriving from the Credit line agreement dated 8 July 2019.
9) On 9 August 2019 the subsidiary in Estonia - mogo OÜ entered into a claims pledge agreement with Citadele banka AS, establishing a pledge over all present and future claims arising from certain agreements concluded between mogo OÜ and its clients, to secure mogo AS, mogo OÜ and UAB mogo LT obligations towards Citadele banka AS deriving from the Credit line agreement dated 8 July 2019.
10) On 9 September 2019 the subsidiary in Lithuania - UAB mogo LT entered into a contractual pledge agreement with Citadele banka AS, establishing a pledge over rights of claim arising from certain agreements concluded between UAB mogo LT and its clients, to secure mogo AS, mogo OÜ and UAB mogo LT obligations towards Citadele banka AS deriving from the Credit line agreement dated 8 July 2019.
11) On 26 September 2019 the subsidiary in Armenia - Mogo UCO LLC entered into a pledge agreement over right of claim with Ardshinbank CJSC, establishing a pledge over certain receivables of Mogo UCO LLC in favour of Ardshinbank CJSC, in order to secure Mogo UCO LLC obligations towards Ardshinbank CJSC deriving from credit contract dated 2 November 2017.
12) On 22 July 2020 O.C.N. Sebo Credit issued guarantee favour of private individual Tamara Paun to secure repayment of the loan issued by Tamara Paun to Rodica Paun. The loan was used to provide a subordinated loan to O.C.N. Sebo Credit.
13) On 26 January 2021, Eleving Group S,A. signed a guarantee whereby Eleving Group S.A. undertook to guarantee the fulfilment of AS mogo obligations towards its creditors under AS mogo Bonds (ISIN: LV0000802452) and their Terms and Conditions.
14) The Group has signed Covenant Agreements with P2P platform companies AS Mintos Marketplace and Mintos Finance OU according to which the Group secures P2P platform's claims towards the subsidiaries if certain subsidiaries cooperating with P2P platform fail to perform their obligations. The claims are limited by amounts borrowed by each subsidiary.
15) The Group has signed Guarantee Agreements with P2P platform companies AS Mintos Marketplace, SIA Mintos Finance No.1 and Mintos Finance Estonia OU according to which the Group secures P2P platform's claims towards the subsidiaries if certain subsidiaries cooperating with P2P platform fail to perform their obligations. The claims are limited by amounts borrowed by each subsidiary.
16) Certain subsidiaries of the Group have entered into a commercial pledge agreements with SIA Mintos Finance No.1 and/or Mintos Finance Estonia OU, in order to secure those Group subsidiary obligations towards AS Mintos Marketplace, SIA Mintos Finance No.1 and Mintos Finance Estonia OU deriving from cooperation agreements entered into between the respective subsidiary and AS Mintos Marketplace, SIA Mintos Finance No.1 and/or Mintos Finance Estonia OU.
17) The Group has signed Guarantee Agreement with AS Citadele Banka according to which the Group secures AS Mogo, Primero Finance OU, and UAB Mogo LT liabilities towards AS Citadele Banka under Credit Line Agreement entered into with AS Citadele Banka on 8 July 2019 (as amended from time to time).
18) The Group's subsidiaries AS Renti (Latvia) and UAB Renti LT (Lithuania) have entered into commercial pledge agreements and guarantee agreements with AS Citadele Banka in order to secure AS Mogo, Primero Finance OU and UAB Mogo LT liabilities towards AS Citadele Banka under Credit Line Agreement entered into with AS Citadele Banka on 8 July 2019 (as amended from time to time).
19) The Group's subsidiary AS Eleving Vehicle Finance (Latvia) has entered into a put option agreement with Ropat Trust Company Limited according to which AS Eleving Vehicle Finance undertakes to purchase Mogo Auto Limited (Kenya) secured revolving loan notes up to two billion Kenya Shillings in case of default of Mogo Auto Limited under the terms and conditions of the short term notes programme and Mogo Auto Limited (Kenya) secured revolving loan notes up to two billion Kenya Shillings in case of default of Mogo Auto Limited under the terms and conditions of the medium term notes programme.
20) The Group's subsidiary AS Eleving Stella (Latvia) has entered into a guarantee agreement with SIA Citadele Leasing in order to secure SIA Citadele Leasing claims towards AS Renti under several financial leasing agreements entered between AS Renti and SIA Citadele Leasing.
21) The Group's subsidiary Mogo Auto Limited (Kenya) has entered into a deed of assignment and Ropat Trust Company Limited (acting on behalf of the noteholders) in order to secure Mogo Auto Limited (Kenya) liabilities towards the noteholders under the terms and conditions of Mogo Auto Limited (Kenya) secured revolving short term notes and medium term notes programmes.
22) Eleving Group has provided a guarantee to VERDANT CAPITAL HYBRID FUND I GMBH & CO. KG with the aim to secure punctual performance by Mogo Auto Limited (Kenya) of all Mogo Auto Limited (Kenya) obligations under the Finance Documents relating to USD 7 000 000 loan facility provided by VERDANT CAPITAL HYBRID FUND I GMBH & CO.
23) Mogo Auto Limited has entered into an account charge agreement creating a security interest over the accounts of Mogo Auto Limited and a fixed and floating charge agreement creating a security interest over specified receivable assets of Mogo Auto Limited in order to secure Mogo Auto Limited (Kenya) obligations under the Finance Documents relating to USD 7 000 000 loan facility provided by VERDANT CAPITAL HYBRID FUND I GMBH & CO.
45. Commitments and contingencies (continued)
24) The Group's subsidiary AS Eleving Vehicle Finance (Latvia) has entered into a guarantee agreement with AS Industra Bank according to which AS Eleving Vehicle Finance guarantees SIA Spaceship loan liabilities against AS Industra Bank in the total amount of for 918 825 EUR.
25) On 30 March 2023 Express Credit Cash Advance (Proprietary) Limited, registered in Namibia, has entered into Pledge and Cession Agreement (Account Pledge) establishing a pledge over the funds in the bank accounts of Express Credit Cash Advance (proprietary) Limited, and in Cession in Security agreement ceding the rights over Loan book and insurance, in favour of trustees of Private Capital Trust, in order to secure Express Credit Cash Advance (Proprietary) Limited obligations towards Private Capital Trust trustees deriving from Loan Agreement dated 30 March 2023.
26) On 6 May 2022 ExpressCredit (Pty) Limited, registered in Botswana, has signed Cession in Security Agreement No. LVMM/06-07-2021-125 with P2P platform company SIA Mintos Finance No. 8, ceding the rights over loan agreement portfolio (loan agreements entered into between ExpressCredit (Pty) Limited and its customers, book debts and loan receivables) to ensure timely and proper performance of obligations by ExpressCredit (Pty) Limited towards SIA Mintos Finance No. 8 derived from Cooperation Agreement dated 6 May 2022.
27) On 22 December 2021 ExpressCredit (Pty) Limited, registered in Botswana, has entered into Cession in Security agreement with Norsad Finance Limited, ceding the rights over book debts to ensure timely and proper performance of obligations by ExpressCredit (Pty) Limited towards Norsad Finance Limited derived from the Credit Facility Agreement dated 20 December 2020. In addition, with the Credit Facility Agreement simultaneously is also guarantee established by YesCash Group Limited (now - Eleving Consumer Finance Mauritius Ltd) to ensure proper performance of obligations by ExpressCredit (Pty) Limited in favour of Norsad Finance Limited.
28) Starting from 31 October 2023 Eleving Group and certain of its Subsidiaries entered into several pledge agreements with TMF Trustee Services GmbH, establishing pledge over shares of those Subsidiaries, pledge over present and future loan receivables of those Subsidiaries, pledge over trademarks of those Subsidiaries, general business pledge over those Subsidiaries, pledge over primary bank accounts if feasible, in order to secure Eleving Group obligations towards bondholders deriving from Eleving Group bonds (ISIN: DE000A3LL7M4).
29) Starting from 31 October 2023 Eleving Group as Issuer and certain of its Subsidiaries (subsidiaries with net portfolio of more than EUR 7 500 000 and represents at least 3% of the Net Loan Portfolio) as Guarantors have entered into a guarantee agreement dated 31 October 2023 according to which the guarantors unconditionally and irrevocably guaranteed by way of an independent payment obligation to each holder of the Eleving Group bonds (ISIN: DE000A3LL7M4) the due and punctual payment of principal of, and interest on, and any other amounts payable under the Eleving Group bonds (ISIN: DE000A3LL7M4).
30) On 18 December 2023 ACP CREDIT I SCA SICAV-RAIF has made available to MOGO IFN S.A. (Romania) a facility amounting to EUR 10 000 000. The ACP Facility has a 48-month maturity with an amortised loan repayment schedule and carries an interest rate of 11.6% in the first year, 10.8% in second year and 8% + 3m EURIBOR thereafter. The ACP Facility is secured with a movable mortgage on loan receivables and separate bank account of MOGO IFN S.A. (Romania), a commercial pledge over AS Eleving Stella subordinated loan receivables from MOGO IFN S.A. (Romania) and a guarantee from AS Eleving Vehicle Finance.
31) On the date of approval of these consolidated financial statements, one of the Group’s companies located in Central Europe is subject to a tax audit by the relevant local body of authority, in order to verify the tax base for the period 2017-2022.# 46. Financial risk management

The risk management function within the Group is carried out in respect of financial risks, operational risks and legal risks. Financial risk comprises market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The primary objectives of the financial risk management function are to establish risk limits, and then ensure that exposure to risks stays within these limits. The operational and legal risk management functions are intended to ensure proper functioning of internal policies and procedures, in order to minimize operational and legal risks.

Operational risks

The Group takes on exposure to certain operational risks, which result from general and specific market and industry requirements.

Compliance risk

Compliance risk refers to the risk of losses or business process disruption resulting from inadequate or failed internal processes systems, that have resulted in a breach of applicable law or other regulation currently in place.

Regulatory risks

Group’s operations are subject to regulation by a variety of consumer protection, financial services and other state authorities in various jurisdictions, including, but not limited to, laws and regulations relating to consumer loans and consumer rights protection, debt collection and personal data processing. Formal licences issued by respective regulators are required in all countries where the Group operates in, except for Lithuania, Georgia, Belarus, Moldova, Uzbekistan, Kazakhstan and Poland. The Group closely monitors all the changes in regulatory framework for each of the countries it operates in. The Group employs both in-house as well as outsourced legal specialists to assist in addressing any current or future regulatory developments that might have an impact on Group’s business activities. See further information on regulatory matters in Note 45.

Anti-money laundering and Know Your Customer laws compliance risk

The Group is subject to anti-money laundering laws and related compliance obligations in most of the jurisdictions in which it does business. The Group has put in place local anti-money laundering policies in those jurisdictions where it is required under local law to do so and in certain other jurisdictions. As a financial institution, the Group is required to comply with anti-money laundering regulations that are generally less restrictive than those that apply to banks. As a result, the Group often relies on anti-money laundering and know your customer checks performed by our customers’ banks when such customers open new bank accounts, however Group has implemented further internal policies to minimise these risks. Group has put in place internal control framework to identify and report all suspicious transactions with a combination of IT based solutions and human involvement. Internal policies of the Group typically include customers’ background check against sanctioned lists and other public sources as required by each local law.

Privacy, data protection compliance risk

The Group’s business is subject to a variety of laws and regulations internationally that involve user privacy, data protection, advertising, marketing, disclosures, distribution, electronic contracts and other communications, consumer protection and online payment services. The Group has put in place an internal control framework consisting from a combination of IT based solutions and business procedures that are designed to capture any potential non-compliance matter before it has occurred and to ensure compliance with these requirements.

Market risks

The Group takes on exposure to market risks, which are the risks that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks arise from open positions in interest rate and currency products, all of which are exposed to general and specific market movements and changes in the level of volatility or market rates or prices such as interest rates and foreign exchange rates.

Financial risks

The main financial risks arising from the Group’s financial instruments are foreign currency risk, interest rate risk, liquidity risk, and credit risk.

Foreign currency risk

The Group accepts the currency risk by issuing loans in local currencies and funding local operations mostly with EUR. Further currency risk is managed transaction wise by avoiding unnecessary conversions back and forth to settle payments and invoices in EUR. Also Group is constantly looking for ways to fund local country operations with local currency funds. The currency risk is defined as the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Group is exposed to the effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. The most significant foreign currency exposure comes from Armenia, Georgia, Moldova, Kenya, Uganda, and Uzbekistan, where Group has evaluated potential hedging options, but due to the costs associated with it, has decided not to pursue hedging strategy for now and assume potential short to mid-term currency fluctuations with retaining potential upside from strengthening in those currencies. The Group has always operated with a forex loss being a legitimate and always present cost item that was adequately priced within each non-EUR country's product portfolio. It is expected that Group’s exposure to volatile foreign currencies will be continuing to decrease in future with Group’s divestment of several of its subsidiaries. Additionally, the Group has started to proactively manage to foreign currency exposure risk towards USD, since in several of Group’s largest markets local loan portfolios are linked to USD. The proactive management of USD exposure can be observed by forward contract purchases that have started already in 2020 and continued to do so in 2021, 2022 and 2023.

Assets and liabilities exposed to foreign currencies fluctuation risk as at 31 December 2023:

	Foreign exchange contracts	Net assets exposed to currency risk	Assets in EUR	Equity and liabilities in EUR
ALL (Albania)*	-	16,795,280	38,142,013	(21,346,733)
AMD (Armenia)	-	5,553,623	14,299,457	(8,745,835)
BYR (Belarus)	-	703,895	1,431,951	(728,057)
GEL (Georgia)	-	1,993,186	21,436,604	(19,443,418)
KEL (Kenya)	-	14,280,749	32,364,407	(18,083,658)
MDL (Moldova)	-	25,005,768	40,113,979	(15,108,211)
MKD (North Macedonia)*	-	14,714,447	25,785,315	(11,070,868)
RON (Romania)*	-	31,591,278	34,578,737	(2,987,459)
UAH (Ukraine)	-	3,198,515	2,956,528	241,987
UGX (Uganda)	-	24,005,567	29,242,422	(5,236,855)
USD (Group)	(71,350,000)	(50,293,638)	35,436,845	(14,380,483)
UZS (Uzbekistan)	-	11,549,640	13,054,932	(1,505,292)
BWP (Botswana)	-	9,366,176	17,365,335	(7,999,159)
ZMW (Zambia)	-	1,961,483	5,007,424	(3,045,941)
LSL (Lesotho)	-	2,291,408	2,305,927	(14,519)
SZL (Eswatini)	-	84	2,366	(2,281)
NAD (Namibia)	-	7,039,156	9,588,106	(2,548,951)
TOTAL:	(71,350,000)	119,756,616	323,112,348	(132,005,732)
excluding currencies with currency rate fluctuations below 5% over the last three years	(71,350,000)	56,655,611	224,606,284	(96,600,673)

Assets and liabilities exposed to foreign currencies fluctuation risk as at: 31 December 2022:

	Foreign exchange contracts	Net assets exposed to currency risk	Assets in EUR	Equity and liabilities in EUR
ALL (Albania)*	-	22,224,169	31,573,312	(9,349,144)
AMD (Armenia)	-	6,460,323	14,439,159	(7,978,836)
BYR (Belarus)	-	1,291,094	2,628,647	(1,337,553)
GEL (Georgia)	-	1,920,700	18,689,286	(16,768,586)
KEL (Kenya)	-	13,937,136	38,210,405	(24,273,270)
MDL (Moldova)	-	27,724,586	38,935,104	(11,210,518)
MKD (North Macedonia)*	-	8,852,753	18,422,794	(9,570,040)
PLN (Poland)	-	965,882	16,394	949,488
RON (Romania)*	-	27,870,464	30,535,024	(2,664,561)
UAH (Ukraine)	-	3,791,628	4,021,395	(229,767)
UGX (Uganda)	-	22,185,346	24,637,543	(2,452,197)
USD (Group)	(79,183,826)	(36,451,914)	45,925,246	(3,193,334)
UZS (Uzbekistan)	-	6,437,021	9,391,474	(2,954,453)
TOTAL:	(79,183,826)	107,209,187	277,425,785	(91,032,772)
excluding currencies with currency rate fluctuations below 5% over the last three years	(79,183,826)	48,261,801	196,894,654	(69,449,027)

• • currency has not fluctuated more than 5% during last 3 years.

Among the other matters, one of the Group’s product (sale in installment with a financing element), which was active over the period of 2016 - 2020 (total sales volume 29 mEUR where the potential VAT effect under discussion is from zero (in positive scenario) and up to 10 million EUR (worst case scenario)) is analyzed, and more specifically, its treatment under relevant VAT legislation. Despite the high level of certainty that the selected tax treatment is correct and according to local legislation with no adverse fiscal implications, in 2016 the subsidiary of the Group has applied for the Binding Tax Ruling, to which the answer was received on July 2020. The Management of the Group has analysed the commentary and conditions disclosed in the mentioned Binding Tax Ruling, and decided that the actually applied VAT regime is fully compliant to VAT regulations and the possibility of cash outflows is remote. The tax audit was suspended on October 2023 for a period up to 6 months and is still on hold as at the reporting date, consequently, the Group does not have any tax audit conclusions. As at the reporting date, the Management of the Company believes that the outcome of the currently open tax audit is highly uncertain, thus the disclosure under Contingent liabilities selected.# 46. Financial risk management (continued)

An analysis of sensitivity of the Group’s net assets to changes in foreign currency exchange rates based on positions existing as at 31 December 2023 and 31 December 2022 and a simplified scenario of a +/- 5% change in respective currency to EUR exchange rates (which is considered a reasonable historical approximation of average currency fluctuations) is as follows*:

Foreign currency rate risk exposure	31.12.2023	31.12.2022
in EUR	in EUR
ALL currency	+/- 839,764	+/- 818,458
AMD currency*	+/- 555,362	+/- 220,919
BYR currency*	+/- 70,389	+/- 861,165
GEL currency*	+/- 199,319	+/- 185,824
KEL currency*	+/- 1,428,075	+/- 2,167,958
MDL currency	+/- 1,250,288	+/- 820,158
MKD currency	+/- 735,722	+/- 453,450
RON currency	+/- 1,579,564	+/- 752,241
UAH currency*	+/- 319,851	+/- 336,761
UGX currency*	+/- 2,400,557	+/- 1,120,150
USD currency	+/- 2,514,682	+/- 1,822,596
UZS currency*	+/- 1,154,964	+/- 588,600
BWP currency*	+/- 936,618	-
ZMW currency*	+/- 196,148	-
LSL currency*	+/- 229,141	-
SZL currency*	+/- 8	-
NAD currency*	+/- 703,916	-
TOTAL:	+/- 15,114,368	+/- 10,148,280

• • Due to historical fluctuations and higher risk of future significant fluctuations a higher sensitivity rate of 10% has been used for these currencies.

An analysis of sensitivity of the Group’s net profit to changes in foreign currency exchange rates based on positions existing as at 31 December 2023 and 31 December 2022 and a simplified scenario of a +/- 5% change in respective currency to EUR exchange rates (which is considered a reasonable historical approximation of average currency fluctuations) is as follows:

Foreign currency rate risk exposure	31.12.2023	31.12.2022
in EUR	in EUR
ALL currency	+/- 424,505	+/- 448,651
AMD currency	+/- 65,185	+/- 106,203
BWP currency	+/- 71,373	-
BYR currency	+/- 66,112	+/- 194,513
GEL currency	+/- 180,765	+/- 201,016
KEL currency	+/- 145,000	+/- 77,528
LSL currency	+/- 6,415	-
MDL currency	+/- 370,080	+/- 188,867
MKD currency	+/- 130,780	+/- 234,138
NAD currency	+/- 17,144	-
PLN currency	-	+/- 54,196
RON currency	+/- 8,719	+/- 75,068
SZL currency	+/- 4	-
UAH currency	+/- 27,118	+/- 160,591
UGX currency	+/- 138,308	+/- 102,425
UZS currency	+/- 30,127	+/- 81,535
ZMW currency	+/- 31,824	-
TOTAL:	+/- 1,713,459	+/- 1,924,732

The Group is not exposed to currency risk in Bosnia&Herzegovina since currency rate is fixed by national bank.

Interest rate risk

The Company is exposed to interest rate risk through its issued subordinated bond which carries a coupon of 12% plus 6 month Euribor and floating coupon notes in Kenya. However, due to its relatively low size in terms of total borrowings (5% from total borrowings as at end of 2023), which in turn are fixed rate, the Company believes its revenue will be sufficient to cover the increased borrowings costs from subordinated bonds.

Financial risks

Capital risk management

The Group considers both equity capital as well as borrowings a part of overall capital risk management strategy. The Group manages its capital to ensure that it will be able to continue as going concern. In order to maintain or adjust the capital structure, the Group may attract new credit facilities or increase its share capital. The Group fulfils externally imposed equity capital requirements as stated in Note 45. The Group monitors equity capital on the basis of the capitalization ratio as defined in Eurobond prospectus. This ratio is calculated as Net worth (the sum of paid in capital, retained earnings, reserves and shareholder loan) divided by Net Loan portfolio. In order to maintain or adjust the overall capital structure, the Group may issue new bonds, borrow in P2P platform or sell assets to reduce debt. The management of the borrowings is driven by monitoring and complying the lender imposed covenants as well as planning the further borrowing needs to ensure business development of the Group.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages its liquidity risk by arranging an adequate amount of committed credit facilities with related parties, P2P investors and by issuing bonds. The Group monitors daily cash flows and plans for milestone dates for cash outflows to cover major liabilities like semi-annual interest payments for Eurobonds. The Group regulates its issuances of new loans to ensure the adequate funds are available when upcoming larger settlement of liabilities is approaching.

The table below presents the cash flows payable by the Group and to the Group under non-derivative financial liabilities and assets held for managing liquidity risk by remaining contractual maturities at the date of the statement of financial position. The amounts disclosed in the table are the contractual undiscounted cash flow. Cash flow payable for borrowings includes estimated interest payments assuming principal is paid in full at maturity date.

As at 31.12.2023	On demand	Up to 1 year	1-5 years	More than 5 years	Total
EUR	EUR	EUR	EUR	EUR	EUR
Assets
Cash in bank	27,470,468	27,470,468	-	-	-
Loans and advances to customers	201,201,552	-	218,357,460	205,275,806	20,309,858
Loans to related parties	-	-	-	-	-
Loans to non-related parties	-	-	-	-	-
Trade receivables	1,606,770	-	1,606,770	-	-
Other loans and receivables	374,357	-	180,096	27,826	-
Finance lease receivables	112,002,603	-	113,255,620	109,952,408	2,014,583
Total undiscounted financial assets	342,655,750	27,470,468	333,399,946	315,256,040	22,324,441
Liabilities
Borrowings*	(322,124,166)	-	(114,282,330)	(293,195,656)	(6,626,662)
Other current liabilities	(10,988,315)	-	(10,988,315)	-	-
Total undiscounted financial liabilities	(333,112,481)	-	(125,270,645)	(293,195,656)	(6,626,662)
Net undiscounted financial assets/ (liabilities)	9,543,269	27,470,468	208,129,301	22,060,384	15,697,779

• • borrowings contain balances from P2P lenders which might require earlier repayment due to 'buy back' guarantee. Carrying amount of such liabilities is 63 875 416 EUR. See Note 2 for further information on 'buy back' guarantee.

As at 31.12.2022	On demand	Up to 1 year	1-5 years	More than 5 years	Total
EUR	EUR	EUR	EUR	EUR	EUR
Assets
Cash in bank	13,834,837	13,834,837	-	-	-
Loans and advances to customers	148,976,304	-	164,614,790	139,622,939	3,398,383
Loans to related parties	3,153,617	-	68,386	3,425,653	-
Trade receivables	2,662,513	-	2,662,513	-	-
Other loans and receivables	964,807	-	977,100	134,987	-
Finance lease receivables	133,978,390	-	124,597,759	118,383,869	3,985,790
Total undiscounted financial assets	303,570,468	13,834,837	292,920,548	261,567,448	7,384,173
Liabilities
Borrowings*	(272,831,339)	-	(86,431,807)	(263,873,080)	(25,724,272)
Other current liabilities	(9,107,922)	-	(9,107,922)	-	-
Total undiscounted financial liabilities	(281,939,261)	-	(95,539,729)	(263,873,080)	(25,724,272)
Net undiscounted financial assets/ (liabilities)	21,631,207	13,834,837	197,380,819	(2,305,632)	(18,340,099)

• • borrowings contain balances from P2P lenders which might require earlier repayment due to 'buy back' guarantee. Carrying amount of such liabilities is 67 647 262 EUR. See Note 2 for further information on 'buy back' guarantee.

Credit risk

The Group is exposed to credit risk through its finance lease receivables, loans and advances to customers, loans to related parties, trade and other receivables as well as cash and cash equivalents. Maximum credit risk exposure is represented by the gross carrying value of the respective financial assets. The key areas of credit risk policy cover lease granting process (including solvency check of the lease), monitoring methods, as well as decision making principles.

	31.12.2023	31.12.2022
EUR	EUR	EUR
Finance lease receivables	129,254,568	154,407,937
Loans and advances to customers	277,605,005	216,234,741
Loans to related parties	-	3,203,344
Trade and other receivables	4,694,748	5,088,519
Cash and cash equivalents	27,470,468	13,834,837
TOTAL:	439,024,789	392,769,378

The Group collateralizes the finance lease assets it finances and provides loans in amount of no more than 85% of the market values of the collateral. The Group operates by applying a clear set of finance lease granting criteria. This criteria includes assessing the credit history of customer, means of lease repayment and understanding the lease object. The Group takes into consideration both quantitative and qualitative factors when assessing the creditworthiness of the customer. Based on this analysis, the Group sets the credit limit for each and every customer. When the lease agreement has been signed, the Group monitors the lease object and customer’s solvency. The Group has developed lease monitoring process so that it helps to quickly spot any possible non-compliance with the provisions of the agreement. The receivable balances are monitored on an ongoing basis to ensure that the Group’s exposure to bad debts is minimized, and, where appropriate, provisions are being made. The Group does not have a significant credit risk exposure to any single counterparty, but has risk to group of counterparties having similar characteristics.# 47. Fair value of financial assets and liabilities

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 fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Instruments within Level 1 include highly liquid assets and standard derivative financial instruments traded on the stock exchange. Fair value for such financial instruments as Financial assets at fair value through profit and loss is mainly determined based on publicly available quoted prices (bid price, obtainable from Bloomberg system).

Instruments within Level 2 include assets, for which no active market exists, such as over the counter derivative financial instruments that are traded outside the stock exchange, bonds, as well as balances on demand with the central banks, balances due from banks and other financial liabilities. Bonds fair value is observable in Frankfurt Stock Exchange public information. Fair value of bank loans is based on effective interest rate which represents current market rate to similar companies. The management recognizes that cash and cash equivalents' fair value is the same as their carrying value therefore the risk of fair value change is insignificant.

Instruments within Level 3 include loans and receivables. Fair value of finance lease receivables and loans and advances to customers is determined using discounted cash flow model consisting of contractual lease and loan cash flows that are adjusted by expectations about possible variations in the amount and timings of cash flows using methodology consistent with the expected credit loss determination as at 31 December 2023 to determine the cash flows expected to be received net of impairment losses. The pre-tax weighted average cost of capital (WACC) of the entity holding the respective financial assets is used as the basis for the discount rate. The WACC is based on the actual estimated cost of equity and cost of debt that reflect any other risks relevant to the leases and loans that have not been taken into consideration by the impairment loss adjustment described above and also includes compensation for the opportunity cost of establishing a similar lease or loan. An additional 1.5 to 4.1% is added to the discount rate as an adjustment to consider service costs of the portfolio that are not captured by the cash flow adjustments. The annual discount rate was determined between 11.04% and 20.82% depending on the Group’s component holding the respective financial asset. Impairment loss is estimated by applying PD and LGD rates, which are in line with ECL methodology described under 'The calculation of ECLs' (Note 2).

The table below summarizes the carrying amounts and fair values of those financial assets and liabilities not presented on the Group’s statement of financial position at their fair value:

	Carrying value 31.12.2023	Fair value 31.12.2023	Carrying value 31.12.2022	Fair value 31.12.2022
EUR	EUR	EUR	EUR
Assets for which fair value is disclosed
Loans to related parties	-	-	3,153,617	3,153,617
Finance lease receivables	112,002,603	157,744,869	133,978,390	182,498,425
Loans and advances to customers	201,201,552	306,081,274	148,976,304	200,197,412
Other loans and receivables	374,357	374,357	964,806	964,806
Trade receivables	1,606,770	1,606,770	2,662,513	2,662,513
Other receivables	8,267,676	8,267,676	7,296,159	7,296,159
Cash and cash equivalents	27,470,468	27,470,468	13,834,837	13,834,837
Total assets for which fair value is disclosed	350,923,426	501,545,414	310,866,626	410,607,769
Liabilities for which fair value is disclosed
Borrowings
Eleving Group S.A. bonds	189,720,020	177,572,764	147,875,287	136,875,000
Mogo AS bonds	171,461	17,470,317	29,282,833	30,177,500
Lease liabilities for right-of-use assets	11,801,088	11,801,088	10,096,492	10,096,492
Long term loan from banks	6,084,337	6,084,337	5,495,958	5,495,958
Financing received from P2P investors	63,723,592	63,723,592	67,515,357	67,515,357
Other borrowings	50,623,668	50,623,668	12,565,412	12,565,412
Trade payables	2,224,874	2,224,874	1,646,248	1,646,248
Other liabilities	1,902,392	1,902,392	1,953,236	1,953,236
Total liabilities for which fair value is disclosed	326,251,432	331,403,032	276,430,823	266,325,203
Liabilities measured at fair value
Other financial liabilities	-	-	39,575	39,575
Total liabilities measured at fair value and liabilities for which fair value is disclosed	326,251,432	331,403,032	276,470,398	266,364,778

47. Fair value of financial assets and liabilities (continued)

The table below specified analysis by fair value levels as at 31 December 2023 (based on their fair values):

	Level 1 31.12.2023	Level 2 31.12.2023	Level 3 31.12.2023	Level 1 31.12.2022	Level 2 31.12.2022	Level 3 31.12.2022
EUR	EUR	EUR	EUR	EUR	EUR	EUR
Assets for which fair value is disclosed
Loans to related parties	-	-	-	-	-	3,153,617
Finance lease receivables	-	-	157,744,869	-	-	182,498,425
Loans and advances to customers	-	-	306,081,274	-	-	200,197,412
Other loans and receivables	-	-	374,357	-	-	964,806
Trade receivables	-	-	1,606,770	-	-	2,662,513
Other receivables	-	-	8,267,676	-	-	7,296,159
Cash and cash equivalents	27,470,468	-	-	13,834,837	-	-
Total assets for which fair value is disclosed	27,470,468	-	474,074,946	13,834,837	-	396,772,932
Liabilities for which fair value is disclosed
Borrowings
Loan from related parties	-	-	-	-	-	-
Eleving Group S.A.

General Employee Share Option Plan

The Group may grant share options of Subsidiaries to its employees. Share options are generally awarded on the first day of employment. The share options vest within four years time with front loaded vesting of 25% of the granted shares after one year of employment. The maximum term of options granted is 4 years.

Fair value of the respective share options

The fair value of share options granted is estimated at the date of grant. Group’s management has assessed that the fair value of the respective share options, due to reasons described in Note 3 is not material. Accordingly, no expense and liability arising from these equity-settled share-based payment transactions is recognized.

The exercise price of the share options under typical circumstances is equal to the nominal price of the underlying shares. The contractual maximum term of the share options are till 2025. There are cash settlement alternatives. Given absence of an ongoing sale of subsidiaries or Eleving Group S.A. or any listing process initiated and any other relevant cash settlement events, cash settlement is considered not to be probable. The Group does not have a past practice of cash settlement for these awards and the Group does not have a present obligation to settle in cash.

48. Share-based payments (continued)

The following table illustrates the number and weighted average exercise prices of the General Employee share option plan:

	2023	2022
	Number	Weighted average exercise price, EUR
Outstanding at 1 January	66	0.1
Granted during the year	4	0.1
Fully vested during the year	-45	0.1
Terminated due to failed vesting conditions	-2	-
Outstanding at 31 December	23	0.1
Exercisable at the end of the period	-	-

Several employee share options have been exercised, expired and/or forfeited in accordance with the terms and conditions of the General Share Option plan, while a several other employee share options remain outstanding and may be exercised, expired and/or forfeited in the future. The table above does not include employee share options that have been granted during the year and exercised during the year or shares provided to the employees. Refer to note 1 for Eleving Group equity Interest percentage in the Group subsidiaries.

The exercise price for options outstanding at the end of the year was 0.1 EUR (2022: 0.1 EUR). The weighted average remaining contractual life for the share options outstanding as at 31 December 2023 is less than a year (2022: 1). The main purpose of both share option plans is to attract and retain highly experienced employees for extensive period of time and build strong management team.

49. Segment information

For management purposes, the Group is organized into business units based on their geographical locations and on internal management structure, which is the basis for reporting system. During reporting year the Group reorganized Eleving Luna holding therefore its subsidiaries were transferred to Eleving Stella operating segments. These consolidated financial statements provide information on the following operating segments. Comparative figures reflect segments according to previous years structure.

• Eleving Stella. This is the major segment of the Group representing entities performing car financing activities in Latvia, Lithuania, Romania, Moldova, Georgia, Armenia and Estonia.
• Eleving Solis. This is the major segment of the Group representing entities performing car financing activities in Uzbekistan, Kenya and Uganda.
• Entities performing consumer loan financing activities. This is the major segment of the Group representing entities performing activities in Moldova, Albania, Ukraine, Botswana, Namibia, Zambia, Lesotho, Mauritius and Eswatini.
• Discontinued operations. This group includes entities from countries where the group has decided to exit from geographical markets. Countries include Bosnia&Herzegovina, Albania, Poland and Belarus.
• Other segments. This segment comprises Group’s business lines with aggregate unconsolidated revenue below 10% of the total unconsolidated revenue of all operating segments.
• Other. The Group’s financing (including finance costs, finance income and other income) and income taxes are managed on a Group basis and are not allocated to operating segments hence these are presented in “Other”.

Management monitors mainly the following indicators of operating segments for the purpose of making decisions about resource allocation and performance assessment: net revenue, profit before tax, gross portfolio and impairment. Other segment is not monitored on segment level but on comprising subsidiaries level. The Groups Chief operating decision maker is Groups CEO. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties. No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Group’s total revenue in 2022 or 2023. Segment information below shows main income and expense items of profit and loss statement. Other smaller income and expense items are summarized and shown under 'Other income/(expense)' column.

49. Segment information (continued)

Segment information for the period ended on 31 December 2023 is presented below:

Operating segment	Interest income	Interest expenses	Impairment expense*	Other operating income	Other operating expense	Corporate income tax	Segment profit/(loss) for the period	Total assets	Total liabilities
Eleving Stella	45,721,926	(12,786,195)	(8,197,387)	8,000,373	(26,851,637)	(985,228)	4,901,852	197,861,294	143,052,784
Eleving Solis	58,952,956	(13,641,605)	(15,222,425)	4,205,343	(33,725,804)	(446,184)	122,281	103,835,772	106,286,739
Entities performing consumer loan financing	68,272,605	(8,088,821)	(15,222,530)	5,140,774	(25,160,192)	(4,745,215)	20,196,621	122,521,648	75,281,520
Discontinued operations	4,912,144	(1,296,305)	(137,513)	322,033	(2,350,208)	(291,447)	1,158,704	9,597,949	9,432,078
Other segments	(254,985)	(2,883,929)	(11,093,219)	11,440,883	(8,708,678)	(499)	(11,500,427)	27,812,078	20,526,637
Total segments	177,604,646	(38,696,855)	(49,873,074)	29,109,406	(96,796,519)	(6,468,573)	14,879,031	461,628,741	354,579,758
Other	18,434,908	(18,793,579)	(619,429)	7,531,774	(1,634,539)	(97,329)	4,821,806	214,687,811	207,017,742
Total	196,039,554	(57,490,434)	(50,492,503)	36,641,180	(98,431,058)	(6,565,902)	19,700,837	676,316,552	561,597,500
Adjustments and eliminations	(19,741,779)	19,990,990	11,805,202	(19,300,737)	9,461,587	-	2,215,263	(255,001,019)	(205,717,192)
Consolidated	176,297,775	(37,499,444)	(38,687,301)	17,340,443	(88,969,471)	(6,565,902)	21,916,100	421,315,533	355,880,308

• - includes net gain/(loss) from de-recognition of financial assets measured at amortized cost.

Inter-segment revenues are eliminated upon consolidation and reflected in the ‘adjustments and eliminations’ line. All other adjustments and eliminations are part of detailed reconciliations presented further below.

Revenue 2023 EUR

External customers	167,671,536
Inter-segment	39,042,516
TOTAL:	206,714,052

Reconciliation of profit 2023 EUR

Segment profit	14,879,031
Profit from other	4,821,806
Elimination of inter-segment revenue	(39,042,516)
Elimination of intragroup interest income	(20,025,671)
Elimination of intragroup income from dividends	(9,470,579)
Elimination of intragroup management services	(7,787,025)
Elimination of intragroup other income	(1,687,008)
Elimination of intragroup income from dealership commissions	(72,233)
Elimination of inter-segment expenses	41,257,779
Elimination of intragroup interest expenses	19,990,990
Elimination of intragroup management services	7,791,873
Elimination of intragroup other expenses	1,669,714
Elimination of impairment expenses	11,805,202
Consolidated profit for the period	21,916,100

Reconciliation of assets 31.12.2023 EUR

Segment operating assets	461,628,741
Loans to subsidiaries (assets of Other)	195,461,113
Other short term receivables (assets of Other)	19,226,698
Elimination of intragroup loans	(204,762,773)
Elimination of other intragroup receivables	(50,238,246)
Total assets	421,315,533

Reconciliation of liabilities

	31.12.2023
Segment operating liabilities	354,579,758
Borrowings (liabilities of Other)	190,139,431
Other liabilities (liabilities of Other)	16,878,311
Elimination of intragroup borrowings	(204,762,772)
Elimination of other intragroup accounts payable	(954,420)
Total liabilities	355,880,308

Segment information for the period ended on 31 December 2022 is presented below:

	Eleving Luna	Eleving Stella	Eleving Solis	Entities performing consumer loan financing	Discontinued operations	Other segments	Total segments	Other	Total
Interest income	17,415,966	29,816,651	60,058,372	57,056,572	379,996	(108,514)	164,619,043	20,601,038	185,220,081
Interest expenses	(2,125,014)	(9,981,813)	(11,554,301)	(5,517,390)	(482,770)	(3,743,296)	(33,404,584)	(20,184,534)	(53,589,118)
Impairment expense*	(1,846,290)	(3,228,349)	(14,033,572)	(21,817,413)	231,945	(421,145)	(41,114,824)	(288,513)	(41,403,337)
Other operating income	1,725,491	7,299,677	2,007,801	1,996,930	(120,883)	8,852,658	21,761,674	2,031,859	23,793,533
Other operating expense	(6,814,332)	(21,365,869)	(32,162,136)	(20,709,909)	(1,925,737)	(8,011,183)	(90,989,166)	(2,015,362)	(93,004,528)
Corporate income tax	(867,905)	(1,328,382)	(2,201,246)	(2,446,095)	-	(4,400)	(6,848,028)	(4,815)	(6,852,843)
Segment profit for the period	7,487,916	1,211,915	2,114,918	8,562,695	(1,917,449)	(3,435,880)	14,024,115	139,673	14,163,788
Total assets	57,732,507	124,402,945	105,008,164	84,750,466	1,727,252	44,378,729	418,000,063	167,039,960	585,040,023
Total liabilities	33,111,321	96,259,253	106,171,884	52,203,107	1,285,107	41,407,825	330,438,497	168,935,518	499,374,015

* - includes net gain/(loss) from de-recognition of financial assets measured at amortized cost.

Revenue 2022 EUR

External customers (interest income and other income)	154,565,837
Inter-segment (interest income and other income)	31,814,880
TOTAL:	186,380,717

Reconciliation of profit 2022 EUR

Segment profit	14,024,115
Profit from other	139,673
Elimination of inter-segment revenue	(31,814,880)
Elimination of intragroup interest income	(22,447,811)
Elimination of intragroup income from dividends	(921,845)
Elimination of intragroup management services	(6,866,107)
Elimination of intragroup other income	(1,584,726)
Elimination of intragroup income from dealership commissions	5,609
Elimination of inter-segment expenses	32,259,645
Elimination of intragroup interest expenses	22,457,469
Elimination of intragroup management services	7,208,923
Elimination of intragroup other expenses	2,477,975
Elimination of impairment expenses	115,278
Consolidated profit for the period	14,608,553

49. Segment information (continued)

Reconciliation of assets 31.12.2022 EUR

Segment operating assets	418,000,063
Loans to subsidiaries (assets of Other)	161,319,003
Loans to non related parties (assets of Other)	3,114,230
Other short term receivables (assets of Other)	2,606,727
Elimination of intragroup loans	(191,634,833)
Elimination of other intragroup receivables	(32,354,461)
Total assets	361,050,729

Reconciliation of liabilities

	31.12.2022
Segment operating liabilities	330,438,497
Borrowings (liabilities of Other)	150,235,344
Other liabilities (liabilities of Other)	18,700,174
Elimination of intragroup borrowings	(191,640,390)
Elimination of other intragroup accounts payable	(756,196)
Total liabilities	306,977,429

50. Events after balance sheet date

Since the last day of the reporting year several significant events took place:

1. The Group successfully settled its liabilities for its 30 million EUR bonds issued in Latvia on 2 April 2024.
2. On 10 April 2024, the Group listed its 2021/2026 bonds (ISIN XS2393240887) with a coupon rate of 9.5% and maturity in 2026 on Nasdaq Riga regulated bond market.
3. In January and February, 2024 Eleving Solis AS (Parent entity to operating entities in Kenya and Uganda) entered into currency hedging agreements with FOREX service provider MFX Solutions, Inc. Exposure to EUR/KES and EUR/UGX currency pairs amounting to EUR 30M was hedged with 6 to 12 month non-deliverable forward contracts.
4. In January 2024, the Group received all the necessary approvals from Belarusian government authorities with respect to the sale of entities in Belarus. The sale is expected to be finished within 2024 once all aspects of the transaction, including asset refinance, will be implemented. As at the moment of the signing of these consolidated financial statements 5.2 million EUR worth of assets have already been refinanced and respective liabilities against the Group settled. Outstanding amount of the liabilities against the Group to be settled in future are 0.7 million EUR.

As of the last day of the reporting year until the date of signing these integrated consolidated financial statements there have been no other events requiring adjustment of or disclosure in the statements or Notes thereto.

51. Alternative performance measures (unaudited)

This Integrated report provides, as incorporated in these consolidated financial statements, alternative performance measures (APMs) which are not defined or specified under the requirements of International Financial Reporting Standards as adopted by the EU. We believe these APMs provide readers with important additional information on our business. To support this, we have included, a reconciliation of the APMs we use where relevant and a glossary indicating the APMs that we use, an explanation of how they are calculated. These numbers are unaudited.

APM	Definition
Capitalization ratio	Total equity (incl. subordinated loans/bonds)/net loan portfolio (excl. rental fleet)
EBITDA	Profit from continuing operations for the period before corporate income tax and deferred corporate income tax, interest expense, amortization and depreciation, and net foreign exchange result
Interest coverage ratio	Last twelve-month Adjusted EBITDA/interest expense less Eurobonds acquisitions costs and subordinated loans/bonds interest expense
Net leverage	Sum of non-current and current borrowings (excl. lease liabilities for rent of vehicles and premises and subordinated debt/bonds) less cash and cash equivalents / last twelve-month Adjusted EBITDA
Net loan portfolio	Sum of rental fleet, non-current and current finance lease receivables and loans and advances to customers
Net profit before FX	Net profit for the period before net foreign exchange result
Revenue	Sum of interest revenue, fee and commission income related to financing activities and revenue from leases

Capitalization ratio

	2023	2022	2021	2020	2019
Total Equity	65,435,225	54,073,300	31,390,094	22,238,223	20,469,430
Subordinated loans/bonds	16,462,353	18,477,014	17,300,238	12,126,467	6,782,061
Net loan portfolio	313,204,155	282,954,694	234,851,859	186,890,484	180,086,142
Capitalization ratio	26.1%	25.6%	20.7%	18.4%	15.1%

EBITDA

	2023	2022	2021	2020	2019
Profit from continuing operations	21,916,100	14,608,552	11,205,675	1,647,029	487,970
Corporate income tax	(8,324,461)	(9,004,133)	(6,932,013)	(709,012)	(1,331,785)
Deferred corporate income tax	1,758,559	2,151,290	815,335	1,012,121	679,531
Net foreign exchange result	(6,385,833)	(7,422,727)	1,095,031	(11,061,815)	(275,386)
Amortization and depreciation	9,442,554	8,063,484	7,399,657	5,347,054	3,295,383
Interest expense	(37,499,444)	(31,131,649)	(29,022,570)	(24,877,404)	(19,795,373)
EBITDA	81,809,833	68,079,255	52,649,549	42,630,193	24,506,366
(Gain)/Loss from subsidiary sale	-	805,957	-	(2,270,197)	-
Loss from cancelled acquisition in Kosovo	-	-	960,237	-	-
Amortization of acquisitions’ fair value gain	-	-	3,183,838	3,365,103	-
Bonds refinancing expense	-	-	5,667,930	-	-
Warrant repurchase from Mezzanine Management	-	-	-	2,546,353	-
Gain from acquisitions	-	-	-	(11,473,296)	-
Non-controlling interests	(4,356,389)	(3,311,445)	(5,002,715)	426,199	(222,254)
Adjusted EBITDA	77,453,444	65,573,767	57,458,839	35,224,355	24,284,112

Interest coverage ratio

	2023	2022	2021	2020	2019
Interest expense	37,499,444	31,131,649	29,022,570	24,877,404	19,795,373
Interest expense from subordinated loans/bonds	2,774,925	2,233,276	1,735,481	344,406	229,978
Bonds issuance costs	1,259,773	1,079,908	2,142,668	1,938,791	1,323,571
Interest coverage ratio	2.3	2.4	2.3	1.6	1.3

Net leverage

	2023	2022	2021	2020	2019
Non-current borrowings, less:	242,406,494	231,194,120	229,757,374	166,696,463	187,478,935
Subordinated loans/bonds	16,462,353	18,477,014	17,300,238	12,126,467	6,782,061
Non-current lease liabilities for rent of premises	6,466,463	7,115,543	6,612,744	5,682,880	6,520,497
Non-current lease liabilities for rent of vehicles	780,696	178,449	93,446	42,135	78,085
Current borrowings, less:	96,180,026	60,114,233	38,267,475	76,537,465	34,770,910
Current lease liabilities for rent of premises	3,763,479	2,659,706	2,443,778	2,013,871	1,263,024
Current lease liabilities for rent of vehicles	790,450	142,794	57,412	56,425	83,937
Cash and cash equivalents	(27,470,468)	(13,834,837)	(10,127,087)	(9,315,430)	(8,656,530)
Net leverage	3.7	3.8	4.0	6.1	8.2

Net loan portfolio

	2023	2022	2021	2020	2019
Rental fleet	7,085,928	10,008,495	10,700,138	14,549,784	13,492,048
Non-current finance lease receivables	59,798,508	72,102,729	64,417,410	60,433,229	78,213,431
Non-current loans and advances to customers	95,055,945	67,832,121	54,708,877	37,935,401	40,077,725
Current finance lease receivables	52,204,095	61,875,661	47,942,305	34,025,363	37,938,035
Current loans and advances to customers	106,145,607	81,144,183	67,783,267	54,496,491	23,856,951
Net loan portfolio	320,290,083	292,963,189	245,551,997	201,440,268	193,578,190

Net profit after FX

	2023	2022	2021	2020	2019
Profit from continuing operations	21,916,100	14,608,552	11,205,675	1,647,029	487,970
Net profit after FX	21,916,100	14,608,552	11,205,675	1,647,029	487,970
(Gain)/Loss from subsidiary sale	-	805,957	960,237	(2,270,197)	-
Amortization of acquisitions’ fair value gain	-	-	3,183,838	3,365,103	-
Bonds refinancing expense	-	-	5,667,930	-	-
Warrant repurchase from Mezzanine Management	-	-	-	2,546,353	-
Gain from acquisitions	-	-	-	(11,473,296)	-
One off solidarity tax payment in North Macedonia	1,151,000	-	-	-	-
Adjusted Net profit after FX	23,067,100	15,414,509	21,017,680	(6,185,008)	487,970

Net profit before FX

	2023	2022	2021	2020	2019
Profit from continuing operations	21,916,100	14,608,552	11,205,675	1,647,029	487,970
Net foreign exchange result	(6,385,833)	(7,422,727)	1,095,031	(11,061,815)	(275,386)
Net profit before FX	28,301,933	22,031,279	10,110,644	12,708,844	763,356
(Gain)/Loss from subsidiary sale	-	805,957	960,237	(2,270,197)	-
Amortization of acquisitions’ fair value gain	-	-	3,183,838	3,365,103	-
Bonds refinancing expense	-	-	5,667,930	-	-
Warrant repurchase from Mezzanine Management	-	-	-	2,546,353	-
Gain from acquisitions	-	-	-	(11,473,296)	-
One off solidarity tax payment in North Macedonia	1,151,000	-	-	-	-
Adjusted Net profit before FX	29,452,933	22,837,236	19,922,649	4,876,807	763,356

Revenue

	2023	2022	2021	2020	2019
Interest revenue	176,297,775	162,516,856	139,857,244	73,685,522	57,513,922
Fee and commission income related to financing activities	8,968,142	7,743,433	7,317,048	5,040,256	3,788,912
Revenue from leases	4,067,111	5,421,567	6,549,933	6,247,484	3,992,485
Revenue	189,333,028	175,681,856	153,724,225	84,973,262	65,295,319
Amortization of acquisitions’ fair value gain	-	-	3,183,838	3,365,103	-
Adjusted revenue	189,333,028	175,681,856	156,908,063	88,338,365	65,295,319