Quarterly Report • Oct 6, 2021
Quarterly Report
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Eleving Group S.A. Société anonyme
Unaudited interim financial statements for the period ended June 30, 2021
Registered office: 9, Allee Scheffer, L-2520, Luxembourg Luxembourg Trade and Companies Register number: B 174.457
| Page | |
|---|---|
| Management report | 3 |
| Statement of Financial Position | 5 |
| Statement of Comprehensive Income | 6 |
| Notes to the interim accounts | 7 |
| Director's statement | 14 |
The Directors of the Company present the report on the interim accounts for the period ended 30 June 2020. All the figures are presented in EUR (euro).
Eleving Group S.A. - previosuly Mogo Finance S.A. (hereinafter referred to as – the Company) and its subsidiaries (hereinafter together referred to as – the Group) is an international and fast-growing Financial Technology company with a vast reach across the globe. Operating in 3 continents, the Groups companies recognize the niche underserved by conventional lenders and provide financial inclusion by disruptively changing the used car and consumer financing industry. Founded in 2012 in Latvia, the Group revolutionized the way people acquire used cars. Having expanded to all the Baltic region within a year after its launch, the Group continued its further expansion, operating in a total of 14 active markets as of the end of 2020. Mogo Finance Group has disrupted the used vehicle market as well as the way how a person's social mobility can be elevated through the access to a convenient and responsible lending. Group's main car financing products are financial leasing, where Eleving Group's services are used by customers to acquire the vehicles, and leaseback financing, where the customer sells his/her vehicle and leases it back. The Groups consumer finance business offers flexible financial products starting with a credit line and ending with an instalment loan with a focus to provide an accessibility to a substantial amount of money in a most convenient way. Innovative financial solutions, transparency provided by the presence in the international capital markets and a talented team of more than 1 000 people makes the Group a one of the top fastest growing companies in the industry.
Despite the headwinds from a global pandemic, 2021 so far has been a succesful year while the Company continued investments in its subsidiaries as well as supporting them with the necessary financing. The Company's financial performance mainly depends on the performance of the Group as majority of the Company's assets relate to affiliated undertakings and the Company's financial performance should be considered in the context of the Group's financial performance. The Company's financial standing as it relates to going concern is largely dependent from the dividends to be distributed by its subsidiaries, which has been a consistent practice also during 2021. The same will be undertaken also in future with the expected dividend payments from its subsidiaries.
Total assets of the Company grew up to 158 million euro (2.5% increase, compared to 154.3 million EUR in 31.12.2020). During the year 2021 the Group continues to optimize its product and country portfolio by deliberately focusing on the highest yielding products and countries with the greatest growth and profitability prospects. Further, on the Group is in process of finalizing several sale transactions all of which are expected to release capital to be deployed in other markets as well as direct Group's management focus to a narrower set of countries than before.
In 2021 the Group continues to cooperate with continental Europe's leading peer-to-peer lending marketplace Mintos ( www.mintos.com ). Currently the Group is the company with the largest loan portfolio listed in the platform and it offers investors to invest in Group's loans originated in sixteen operational entities.
During 2021 the Group managed to sustain its B- issuer as well as senior secured bond rating by Fitch.
The Company does not have any branches and does not intend to establish any in the nearest future.
On 27 January 2021 the Group received a broad approval from its bondholders to amend the terms and conditions of its EUR 2022 bonds. The proposals included the replacement of the bondholders'
representative, the amendment of financial conditions and the amendment of the definition of permitted debt.
On 1 March 2021, AS "mogo" (Latvian operational entity) issued bonds in the amount of EUR 30 million, thus, successfully completing the largest bond issue in recent years by a private company on Nasdaq Riga Stock Exchange. With an annual coupon rate of 11%, 3-year maturity and minimum subscription amount of EUR 1 000, the bonds were offered to existing AS "mogo" bondholders and other retail and institutional investors from the Baltic region. The public offering consisted of two parts – subscription by new investors and exchange offer to existing bondholders. Bond issue demonstrates the investors' confidence in the Group.
While the high uncertainty remains, the Company does not intend to invest resources in research or development activities.
The Company has not and does not expect to acquire own shares.
The Company's activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk management focuses on financial markets and seeks to minimize potential adverse effects on the Company's financial performance. The Company uses derivative financial instruments to hedge certain risk exposures which carried out by the central treasury department (Company's treasury).
Financial risks
The Company controls its liquidity by managing the amount of funding it attracts through peer-to-peer platforms, which provides management greater flexibility to manage the level of borrowings and available cash balances. Also, the Company manages its longer-term liquidity need by issuing bonds.
The Company is exposed to credit risk through its finance lease receivables, loans, and advances, as well as cash and cash equivalents. The key areas of credit risk policy cover lease and loan granting process (including solvency check of the lessee or borrower), monitoring methods, as well as decision making principles. The Company uses financed vehicles as collaterals to significantly reduce the credit risk.
The Company operates by applying a clear set of finance lease and loan granting criteria. These criteria include assessing the credit history of the customer, means of lease and loan repayment and understanding the lease object. The Company takes into consideration both quantitative and qualitative factors when assessing the creditworthiness of the customer. Based on this analysis, the Company sets the credit limit for each and every customer. When the lease agreement has been signed, the Company monitors the lease object and customer's solvency. The Company has developed a lease monitoring process that 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 Company's exposure to bad debts is minimized, and, where appropriate, sufficient provisions are being made. The Company does not have a significant credit risk exposure to any single counterparty, but instead is exposed to risks towards counterparties having similar characteristics.
The Company 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.
The currency risk is defined as the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company 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 Georgia and Belarus, where the Company 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 of the mentioned currencies. However the Company is making substantial progress in issuing as much as possible of loans in EUR and USD currencies. The USD loan issuances are linked to Belarus, Kenya and Uganda. Having now a significant amount of USD loan and lease portfolio, the Company has started to proactively manage to the foreign currency exposure risk towards USD. The proactive management of USD exposure can be observed by forward contract purchases that have started already in 2020 and continues to do so in 2021.
It is expected that the Company's exposure to volatile foreign currencies will be continuing to decrease in the future with the Company's divestment of several of its subsidiaries.
The Company is not exposed to interest rate risk because all of its liabilities are interest bearing borrowings with a fixed interest rate.
In the light of events related to Covid-19, the Company's management has assessed the impacts of the coronavirus outbreak on the Company's ability to continue as a going concern.
While the economic environment remains uncertain, the Company and its subsidiaries enter 2021 with improved operations and a strong funding position, and our employees, partners and customers have proven resilient to the challenges posed by the pandemic. The business model is highly relevant to the lives of many thousands of customers and plays an important role in enhancing the lives of people of modest means. We are confident that we will continue to serve our customers well and maintain high profitability and long-term growth.
Going further in to 2021 the Company and its subsidiaries intend to:
Continue to develop its current set of 14 active markets with particular focus on productive lending in the fastest growing markets.
Develop premium car financing solution by engaging in mutually beneficial strategic partnerships with local banks.
Continue further digitalization across the key business areas. - Maintain stricter underwriting policies in place.
Launch of several of ESG friendly products.
Corporate Governance Statement Eleving Group S.A. Corporate Governance Statement has been included in the Management report included in the Eleving Group S.A. consolidated annual report for the year ended 31 December 2020, and it is also available to the public electronically on the Eleving Group webpage www.eleving.com.
Signed on behalf of the Company on 30 September 2021 by:
Type A director Type B director Māris Kreics Delphine Glessinger
4
Statement of Financial Position
| 30.06.2021 | 31.12.2020 | ||
|---|---|---|---|
| ASSETS | Notes | EUR | EUR |
| Financial assets | |||
| Shares in affiliated undertakings Loans to affiliated undertakings |
4 5 |
54 154 256 81 719 569 |
53 595 268 72 293 627 |
| Other loans | 6 | 13 580 266 | 8 298 279 |
| CURRENT ASSETS | 149 454 091 | 134 187 174 | |
| Debtors Amounts owed by affiliated undertakings |
|||
| becoming due and payable within one year | 5 | 4 935 352 | 6 223 545 |
| becoming due and payable after more than one year | - | - | |
| Other debtors | |||
| becoming due and payable within one year | 7 | 742 074 | 8 710 991 |
| becoming due and payable after more than one year | - 5 677 426 |
- 14 934 536 |
|
| Cash at bank and in hand | 23 757 | 2 010 687 | |
| PREPAYMENTS | 8 | 2 880 818 | 3 120 442 |
| TOTAL ASSETS | 158 036 092 | 154 252 839 | |
| 30.06.2021 | 31.12.2020 | ||
| CAPITAL, RESERVES AND LIABILITIES | Notes | EUR | EUR |
| CAPITAL AND RESERVES | |||
| Subscribed capital | 9 | 1 000 000 | 1 000 000 |
| Reserves | |||
| Legal reserve | 3 104 | 3 104 | |
| Profit or loss brought forward | 137 922 | (305 779) | |
| Profit or loss for the financial year | 92 806 1 233 832 |
443 701 1 141 026 |
|
| PROVISIONS | |||
| Provisions for taxation | 15 614 | 17 765 | |
| Other provisions | 10 | 131 498 | 179 766 |
| 147 112 | 197 531 | ||
| CREDITORS | |||
| Debenture loans | |||
| - Non convertible loans becoming due and payable within one year |
11 | (278 392) | 4 440 863 |
| becoming due and payable after more than one year | 11 | 99 028 049 | 98 963 049 |
| Trade creditors | |||
| becoming due and payable within one year | 62 754 | 49 601 | |
| becoming due and payable after more than one year | - | - | |
| Amounts owed to affiliated undertakings | |||
| becoming due and payable within one year | 12 | 1 238 497 | 13 385 912 |
| becoming due and payable after more than one year | 12 | 38 200 803 | 23 823 035 |
| Others creditors | |||
| Other creditors | |||
| becoming due and payable within one year | 13 | 1 120 614 | 125 355 |
| becoming due and payable after more than one year | 13 | 17 282 823 | 12 126 467 |
| 156 655 148 | 152 914 282 | ||
5
TOTAL CAPITAL, RESERVES AND LIABILITIES 158 036 092 154 252 839
| Notes | 01.01.2021 - 30.06.2021 |
01.01.2020 - 30.06.2020 |
|
|---|---|---|---|
| Net turnover | - | - | |
| Variation in stocks of finished goods and in work in progress | - | - | |
| Work performed by the undertaking for its own purposes and capitalised | - | - | |
| Other operating income | - | - | |
| Raw materials and consumables and other external expenses | 14 | (2 025 809) | (1 563 207) |
| Staff costs | - | - | |
| Value adjustments | - | - | |
| Other operating expenses | - | - | |
| Income from other investments and loans forming part of the fixed assets | 15 | 5 283 906 | 4 333 792 |
| Income from participating interests | 15 | 4 500 004 | 3 943 217 |
| Other interest receivable and smilar income | 16 | 527 763 | 811 384 |
| Share of profit or loss of undertakings accounted for under the equity method |
- | - | |
| Value adjustment in respect of financial assets and of investment held as current assets |
- | - | |
| Interest payable and similar expenses | 17 | (7 947 936) | (6 768 378) |
| Tax on profit or loss | (245 122) | (85 859) | |
| Profit or loss after taxation | 92 806 | 670 949 | |
| Other taxes not shown under items 1 to 16 | - | - | |
| Profit or loss for the financial year | 92 806 | 670 949 |
Eleving Group S.A., (hereinafter the "Company"), was incorporated on December 18, 2012 as a société anonyme for an unlimited period. The Company is organised under the laws of Luxembourg, in particular the law of 10 August, 1915 on commercial companies, as amended.
The registered office of the Company is established in Avenue de la GARE 8-10,Luxembourg 1610 and is registered at the Trade and Companies register in Luxembourg under the number B174457.
The financial year of the Company starts on 1 January and ends on 31 December of each year.
The principal activity of the Company is to invest, acquire and take participations and interests, in any form whatsoever, in Luxembourg or foreign companies or entities having a purpose similar to the purpose of the Company and to acquire through participations, contributions, purchases, options or in any other way any securities, rights, interests, patents, trademarks and licenses or other property as the Company shall deem fit, and generally to hold, manage, develop, encumber, sell or dispose of the same, in whole or in part, for such consideration that is in the corporate interest of the Company.
The Company may also enter into any financial, commercial or other transactions and grant to any company or entity that forms part of the same group of companies as the Company or is affiliated in any way with the Company, including companies or entities in which the Company has a direct or indirect financial or other kind of interest, any assistance, loan, advance or grant in favor of third parties any security or guarantee to secure the obligations of the same, as well as borrow and raise money in any manner and secure by any means the repayment of any money borrowed.
Finally the Company may take any action and perform any operation which is, directly related to its purpose in order to facilitate the accomplishment of such purpose.
In accordance with the legal requirements of title II of the law 19 December 2002 as amended, these interim accounts have been drawn up on a standalone basis and subject to approval of the Company's General Meeting scheduled for 17 September 2021. In application of section XVI of the law of 10 August 1915 as amended, the Company represents the ultimate parent of a group of undertakings – also prepares consolidated financial statements which are prepared under IFRS as adopted by the EU and which are lodged with the Luxembourg trade register and are available for inspection on Company's corporate address. The consolidated financial statements of the Company are available as well on its corporate website.
These interim accounts have been prepared in accordance with Luxembourg legal and regulatory requirements under the historical cost convention. Figures are rounded to whole amounts. Accounting policies and valuation rules are, besides the ones laid down by the law of 19 December, 2002, determined and applied by the Board of Directors.
The preparation of interim accounts requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise its judgement in the process of applying the accounting policies. Changes in assumptions may have a significant impact on the interim accounts in the period in which the assumptions changed. Management believes that the underlying assumptions are appropriate and that the interim accounts therefore present the financial position and results fairly.
The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities in the next financial year. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
These interim accounts are prepared on a going concern basis.
The Group decided, in the early stages of the COVID-19 pandemic, to limit lending activities to higher risk customers across all product segments. After having revised its loan policies and scoring algorithms in Q2 2020, to improve underwriting in times of high volatility and general uncertainty, the Group found itself in Q3 2020 in a healthy position to actively target customers that were in a stable financial situation despite the ongoing pandemic. The adjusted algorithms and scoring policies helped the Group to improve the payment behaviour during Q2 2020, and this healthy payment behaviour has been maintained during following quarters up to now, while disbursement rates have increased as demand has returned in most of the markets. The Group continues to tightly monitor its underwriting performance for any early indications of deteriorating payment behaviour and properly judge the impact of governmental measures. Due to this combination of tighter monitoring and a better understanding of the economic impacts of COVID-19-related lockdowns, The Group has maintained a healthy portfolio quality through the pandemic and has not seen any significant impact on materialised credit losses. The Group manages its risk provisioning in accordance with IFRS 9, that relies on a forward oriented methodology. Based on future macroeconomic indicators and previously recorded correlations, the reserving model is adjusted in accordance with the macroeconomic outlook.
The Group does not foresee any difficulties related with the liquidity during the second quarter of 2021 as the main liquidity sources - positive cash flow before investments into loan portfolios and funding from P2P platform Mintos - remain solid. The Group has posted its highest ever net profit for the first six month period since inception, and is currently borrowing at historically lowest overall funding rate in P2P marketplace Mintos - approximately 9.5%. Additionally the Group's Eurobond is trading above par during the Q2 of 2021 and also after the balance sheet date. All of which are indicators of the Group's ability to raising both internal and external funds on as needed basis. Moreover on 16th of August 2021 the Group's credit rating by Fitch was improved from negative to stable outlook as well as rating watch was removed, this can be considered as additional external validation of the Group's resilience through pandemic and recognition of improved financial performance.
Consequently, considering the Company's dependancy from the performance of the whole group, the managment is confident that the Company will also successfully continue its operations and there are no risks of going concern.
The main valuation rules applied by the Company are the following:
Shares in affiliated undertakings and investments held as fixed assets as well as loans to affiliated undertakings and other loans are valued respectively at purchase price / nominal value (loans and claims) including the expenses incidental thereto. In the case of durable depreciation in value according to the opinion of the Board of Directors, value adjustments are made in respect of financial fixed assets, so that they are valued at the lower figure to be attributed to them at the balance sheet date. These value adjustments are not continued if the reasons for which value adjustments were made have ceased to apply.
Debtors are valued at their nominal value. They are subject to value adjustments where their recovery is compromised. These value adjustments are not continued if the reasons for which value adjustments were made have ceased to apply.
The Company maintains its books and records in EUR.
Transactions expressed in currencies other than EUR are translated into EUR at the exchange rate effective at the time of the transaction. Formation expenses and long-term assets expressed in currencies other than EUR are translated into EUR at the exchange rate effective at the time of the transaction. At the balance sheet date, these assets remain translated at historical exchange rates. Cash at bank is translated at the exchange rate effective at the balance sheet date. Exchange losses and realized gains are recorded in the profit and loss account of the year.
Other assets and liabilities are translated separately respectively at the lower between the value converted at the historical exchange rate or the value determined on the basis of the exchange rates effective at the balance sheet date. Solely the unrealised exchange losses are recorded in the profit and loss account. The exchange gains are recorded in the profit and loss account at the moment of their realisation.
This asset item includes expenditures incurred during the financial year but relating to subsequent financial years.
Provisions are intended to cover losses or debts, the nature of which is clearly defined and which, at the date of the balance sheet are either likely to be incurred or certain to be incurred but uncertain as to their amount or the date on which they will arise.
Provisions may also be created to cover charges that have originated in the financial year under review or in a previous financial year, the nature of which is clearly defined and which at the date of the balance sheet are either likely to be incurred or certain to be incurred but uncertain as to their amount or the date on which they will arise.
Provisions for pensions and similar obligations
The Company does not offer its employees a defined benefit plan and/or a defined contribution plan.
Provisions for taxation corresponding to the tax liability estimated by the Company for the financial years for which the tax return has not yet been filed are recorded under the caption "Other creditors a) Tax authorities". The advance payments are shown in the assets of the balance sheet under the caption "Other debtors", if applicable.
Creditors are recorded at their reimbursement value. Where the amount repayable on account is greater than the amount received, the difference is shown as an asset and is written off over the period of the debt based on a linear/actuarial method.
Contingent liabilities are recognized in the interim accounts only if the related outflows is deemed probable. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognized in the interim accounts but is disclosed when an inflow of economic benefits is probable.
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 Company are shareholders who could control or who have significant influence over the Company in accepting operating business decisions, key management personnel of the Company and close family members of any above-mentioned persons, as well as entities over which those persons have a control or significant influence, including subsidiaries and asscociates.
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 Company's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. 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.
In the process of applying the Company's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the interim accounts: The preparation of the interim accounts requires management to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses, and disclosure of contingencies. The significant areas of estimation used in the preparation of the interim accounts relate to fair value of employee share options and measurement of contingent consideration. Although these estimates are based on the management's best knowledge of current events and actions, the actual results may ultimately differ from those estimates.
The carrying amounts of the Company's financial assets are reviewed at each reporting date by the Company's management to determine whether there is a durable depreciation in value and value adjustments need to be made in respect of the financial assets. Company's management has assessed that the Company's assets do not have a durable depreciation in value as at 31 December 2019.
Employees of Company's subsidiaries have entered a share option agreements with the Company or Company's shareholders. Under the agreements respective employees obtain rights to acquire 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 Company's interim accounts. Company's management has estimated that fair value of the options, due to the specifics of the share option agreements, would not be materially different than zero. If it were, the Company 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.
Management has considered that the particular features mentioned in the option agreements, such as buy-back options, dividend policy of the Company and related pledges posed upon the borrowings effectively indicate that the fair value of the employee options would not be materially different than zero.
The Company has acquired an additional 2% interest in the shares of Mogo LLC (Georgia), increasing its ownership interest to 100%. In accordance with the share purchase agreement an additional cash payments to the previous non-controlling interest holder will be made on the basis of Mogo LLC net profit for 2019 – 2021.
The Company has determined that it has a contractual obligation to deliver cash to the sellers and therefore it has assessed it to be a financial liability. Consequently, the Company is required to remeasure that liability at fair value at each reporting date with changes in fair value recognized in profit or loss statement.
The fair value is based on management approved budgets of Mogo OU and Mogo LLC and determined using probability-weighted cash flow under DCF method, based on the expected probable outcome. The fair value of the contingent consideration determined at 30 June 2020 reflects management best estimate.
8
However, the calculation of the fair value among other is sensitive to the assumptions of discount rate which is estimated as 12% and the precision of budgets approved by the Company's management.
| a) The movements for the year are as follows: | Shares in affiliated undertakings / Participating interests EUR |
Total 2021 EUR |
|---|---|---|
| Gross book value - opening balance | 53 595 268 | 53 595 268 |
| Additions for the year* Gross book value - closing balance |
558 988 54 154 256 |
558 988 54 154 256 |
| Value adjustments | - | - |
| Net book value - closing balance | 54 154 256 | 54 154 256 |
| Net book value - opening balance | 53 595 268 | 53 595 268 |
| * Additions for the year consisted of new investments in following subsidiaries: |
| Percentage of | ||
|---|---|---|
| investment in | ||
| Name of undertaking (legal form) | shares | 2021 |
| Mogo Balkans and Central Asia | 100% | 558 988 |
| Total | 558 988 |
Net equity at
9
b) Undertakings in which the Company holds at least 20% of the share capital or in which it is a general partner are as follows:
| the balance | |||||||
|---|---|---|---|---|---|---|---|
| sheet date of | |||||||
| Ownership as at | the company | Profit or loss for the | Net book value | Net book value | |||
| 30 June 2021; | Last balance | concerned | last financial year | 2021 | 2020 | ||
| Name of undertaking (legal form) | Registered office | % | sheet date | EUR | EUR | (EUR) | (EUR) |
| Mogo Baltics and Caucasus AS | Republic of Latvia | 100% | 31.12.2020 | 16 440 208 | - 229 858 |
16 712 860 | 16 712 860 |
| Mogo Central Asia AS | Republic of Latvia | 100% | 31.12.2020 | 13 737 956 | - 93 886 |
13 638 501 | 13 638 501 |
| Mogo Balkans and Central Asia AS | Republic of Latvia | 100% | 31.12.2020 | 7 325 698 | - 665 150 |
8 363 468 | 7 804 480 |
| Eleving Vehicle Finance AS | Republic of Latvia | 100% | 31.12.2020 | 8 072 693 | - 28 777 |
8 131 576 | 8 131 576 |
| Mogo Albania SHA | Republic of Albania | 100% | 31.12.2020 | 1 653 973 | - 376 093 |
4 030 153 | 4 030 153 |
| Mogo LT UAB | Republic of Lithuania | 100% | 31.12.2020 | 7 547 536 | 4 946 277 | 2 499 827 | 2 499 827 |
| Mogo Bulgaria EOOD | Republic of Bulgaria | 25.1% | 31.12.2020 | 1 083 932 | - 110 643 |
774 844 | 774 844 |
| Mogo Finance S.L. | Kingdom of Spain | 100% | 31.12.2020 | 3 000 | - | 3 000 | 3 000 |
| OCN SE Finance S.R.L. | Republic of Ukraine | 0.0333% | 31.12.2020 | - | - | 22 | 22 |
| OCN SEBO CREDIT SRL | Republic of Moldova | 0.0002% | 31.12.2020 | - | - | 5 | 5 |
| Total | 54 154 256 | 53 595 268 |
The figures of net equity at the balance sheet date and profit or loss for the last financial year are based on the preliminary financial information extracted from the consolidation table that the Company has used to prepare its consolidated financial statements for the year ended 31 December 2020.
In the opinion of the Board of Directors there is no impairment effect for shares in affiliated undertakings.
Amounts owed by affiliated undertakings are detailed as follows:
| Net book value | Net book value | |||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Name | Interest rate | Maturity | EUR | EUR |
| Mogo Auto Limited (previously Longo cars Limited) - loan | 13.0% | 15.02.2024 | 19 745 500 | 10 588 500 |
| Mogo LT UAB - loan | 13.00% | 27.04.2023 | 11 008 143 | 8 488 143 |
| Mogo Africa UAB (previously HUB 5 LT UAB) - loan | 13.0% | 15.02.2024 | 1 882 500 | 1 311 500 |
| Mogo Africa UAB (previously HUB 5 LT UAB) - loan | 13.0% | 01.07.2028 | 7 883 500 | 6 489 500 |
| Mogo Eastern Europe AS (previously HUB 3 AS) - loan | 12.0% | 27.04.2023 | - | 7 418 118 |
| Mogo Poland Sp. z o.o. - loan | 8.5% | 27.04.2023 | 7 110 508 | 7 110 508 |
| Mogo Poland Sp. z o.o. - impairment allowance | - 7 110 508 |
- 7 110 508 |
||
| Mogo Kredit OOO - loan | 14.5% | 19.03.2023 | 7 919 000 | 7 069 000 |
| Mogo Africa AS (previously HUB 5 AS) - loan | 13.0% | 29.01.2024 | 2 634 331 | 1 247 831 |
| Mogo Africa AS (previously HUB 5 AS) - loan | 13.0% | 05.09.2023 | 2 150 000 | 2 150 000 |
| Mogo Africa AS (previously HUB 5 AS) - loan | 13.0% | 15.02.2024 | 1 300 000 | 1 300 000 |
| Mogo Africa AS (previously HUB 5 AS) - loan | 13.0% | 29.03.2024 | 600 000 | 600 000 |
| Instafinance LLC - loan | 11.0% | 29.07.2025 | 3 629 607 | 4 054 607 |
| Mogo Lend OOO - loan | 13.0% | 05.09.2023 | 3 635 000 | 3 785 000 |
| Mogo loans SRL - loan | 11.0% | 27.04.2025 | 5 229 000 | 3 319 000 |
| Mogo Balkans and Central Asia AS (previously HUB 2 AS) - loan | 12.0% | 01.04.2025 | 2 466 700 | 3 181 700 |
| Mogo Bulgaria EOOD - loan | 12.0% | 27.04.2023 | 2 416 486 | 2 946 486 |
| Mogo Kenya Limited - loan | 13.0% | 29.03.2024 | 1 980 407 | 2 582 000 |
| Mogo Kazakhstan - loan | 12.0% | 21.09.2023 | - | 2 378 209 |
| Mogo Baltics and Caucasus AS (previously HUB 1 AS) - loan | 12.0% | 31.07.2023 | ||
| - | 1 947 759 | |||
| Mogo DOOEL Skopje - loan - payable after more than one year | 0.0% | 30.06.2022 | - | 201 773 |
| Mogo DOOEL Skopje - impairment allowance | - | - 162 568 |
||
| Mogo Loans DOOEL Skopje - loan - payable after more than one year | 0.0% | 30.06.2022 | - | 154 937 |
| Mogo Loans DOOEL Skopje - impairment allowance | - | - 13 903 |
||
| Mogo D.o.o. Sarajevo - loan | 12.0% | 03.09.2023 | - | 689 000 |
| Mogo Baltics and Caucasus AS (previously HUB 1 AS) - loan | 12.0% | 31.07.2023 | 2 215 759 | 260 000 |
| Mogo Albania - loan | 0.0% | 15.03.2023 | 827 646 | - |
| Funderly Group AS | 12.0% | 08.06.2025 | 1 020 000 | - |
| Mogo UCO - loan | 12.0% | 22.11.2023 | 3 133 035 | 472 035 |
| Longo LLC - loan | 12.0% | 27.11.2023 | 95 000 | 95 000 |
| Mogo Lend OOO - accrued interest | 1 208 438 | 959 404 | ||
| Mogo Africa UAB (previously HUB 5 LT UAB) - accrued interest | 679 567 | 384 279 | ||
| Mogo Auto Limited (previously Longo cars Limited) - accrued interest | 578 492 | 338 348 | ||
| Mogo Africa AS (previously HUB 5 AS) - accrued interest | 564 631 | 147 489 | ||
| Mogo Kenya Limited - accrued interest | 543 489 | 417 202 | ||
| Mogo Balkans and Central Asia AS (previously HUB 2 AS) - accrued interest | 516 768 | 348 209 | ||
| Mogo Poland Sp. z o.o. - accrued interest | 152 777 | 52 045 | ||
| Mogo Poland Sp. z o.o. - impairment allowance | - 52 045 |
- 52 045 |
||
| Accrued interest from other parties | 691 190 | 1 075 573 | ||
| Mogo Kazakhstan - accrued interest | - | 1 096 809 | ||
| Mogo DOOEL Skopje - loan - payable within one year | - | 1 095 349 | ||
| Mogo DOOEL Skopje - impairment allowance | - | - 882 519 |
||
| Mogo Loans DOOEL Skopje - loan - payable within one year | - | 841 093 | ||
| Mogo Loans DOOEL Skopje - impairment allowance | - | - 75 472 |
||
| Mogo Balkans and Central Asia AS (previously HUB 2 AS) - receivables | - | 217 781 | ||
| Becoming due and payable after more than one year | 81 771 614 | 72 553 627 | ||
| Becoming due and payable within one year | 4 883 307 | 5 963 545 | ||
| Total | 86 654 921 | 78 517 172 |
| Net book value | Net book value | ||||
|---|---|---|---|---|---|
| 2021 | 2020 | ||||
| Name | Type | Interest rate | Maturity | (EUR) | (EUR) |
| Mogo Kazakhstan - loan | Loan | 12.0% | 21.09.2023 | 3 310 234 | - |
| AK Family Treasury SIA | Loan | 10.5% | 27.04.2023 | 3 249 127 | 3 084 162 |
| AK Family Treasury SIA | Loan | 12.5% | 27.04.2023 | 2 045 822 | 1 923 063 |
| AK Family Treasury SIA | Loan | 3.0% | 31.03.2022 | 1 399 048 | 1 132 331 |
| KM Invest AS | Loan | 3.0% | 31.03.2022 | 486 259 | 367 390 |
| Novo Holding AS | Loan | 3.0% | 31.03.2022 | 488 563 | 313 375 |
| Avole Holdings AS | Loan | 3.0% | 31.03.2022 | 488 833 | 313 375 |
| Mogo SH.P.K - loan | Loan | 0.0% | 30.09.2023 | 1 378 461 | 1 053 787 |
| Mogo SH.P.K - impairment allowance | Loan | - 43 619 |
- 43 619 |
||
| Mogo DOOEL Skopje - loan | Loan | 0.0% | 30.06.2022 | 1 153 571 | - |
| Mogo DOOEL Skopje - impairment allowance | - 1 045 087 |
- | |||
| Mogo Loans DOOEL Skopje - loan | Loan | 0.0% | 30.06.2022 | 759 582 | - |
| Mogo Loans DOOEL Skopje - impairment allowance | - 89 375 |
- | |||
| Other loans | Loan | 3.0% | 31.03.2022 | - | 155 569 |
| Impairment allowance for loan receivable | Loan | - 1 154 |
- 1 154 |
||
| Total | 13 580 266 | 8 298 279 |
| Note 7 - Other debtors | |
|---|---|
| ------------------------ | -- |
| Net book value | Net book value | ||||
|---|---|---|---|---|---|
| 2021 | 2020 | ||||
| Name | Type | Interest rate | Maturity | (EUR) | (EUR) |
| AK Family Treasury SIA | Short-term balance of loan | 3.0% | 15.01.2021 | - | 3 522 966 |
| KM Invest AS | Short-term balance of loan | 3.0% | 15.01.2021 | - | 1 143 041 |
| Avole Holdings AS | Short-term balance of loan | 3.0% | 15.01.2021 | - | 974 989 |
| Novo Holding AS | Short-term balance of loan | 3.0% | 15.01.2021 | - | 974 989 |
| Other debtors | Short-term balance of loan | 0.0% | 30.09.2023 | - | 866 428 |
| Other debtors | Accrued interest on other loans | 671 752 | 220 468 | ||
| Other debtors | VAT overpayment | 46 981 | 46 981 | ||
| Other debtors | Investment in Mintos platform | - | 119 586 | ||
| Other debtors | Investment in FX platform* | - | 787 521 | ||
| Other debtors | Other debtors | 23 341 | 54 022 | ||
| Total | 742 074 | 8 710 991 |
| Net book value | Net book value | ||
|---|---|---|---|
| 2021 | 2020 | ||
| Name | Type | (EUR) | (EUR) |
| Prepaid expenses | Deferred bonds acquisition costs | 2 827 434 | 3 113 336 |
| Prepaid expenses | Prepaid expenses other | 53 384 | 7 106 |
| Total | 2 880 818 | 3 120 442 |
The subscribed capital of the Company amounts to EUR 1 000 000 and is divided into 100 000 000 shares fully paid.
| The movements on the "Subscribed capital " caption during the year 2021 are as follows: | Share capital | Number of | Number of | Total number |
|---|---|---|---|---|
| EUR | class A Shares | class B Shares | of Shares | |
| Opening balance | 1 000 000 | 100 000 000 | - | 100 000 000 |
| Subscriptions for the year/period | - | - | - | - |
| Redemptions for the year/period | - | - | - | - |
| Closing balance | 1 000 000 | 100 000 000 | - | 100 000 000 |
As of and for the period ended 30 June 2020, the Company does not hold any of its own shares.
The movements on the "Subscribed capital " caption during the year 2020 are as follows:
| Share capital | Number of | Number of | Total number | |
|---|---|---|---|---|
| EUR | class A Shares | class B Shares | of Shares | |
| Opening balance | 1 000 000 | 100 000 000 | - | 100 000 000 |
| Subscriptions for the year/period | - | - | - | - |
| Redemptions for the year/period | - | - | - | - |
| Closing balance | 1 000 000 | 100 000 000 | - | 100 000 000 |
Legal reserve
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.
The movements on the "Legal reserve" caption during the year 2021 are as follows:
| EUR | |
|---|---|
| Opening balance | 3 104 |
| Additional reserve recognised | - |
| Closing balance | 3 104 |
Note 10 - Other provisions
| Nominal value as | Nominal value as | ||
|---|---|---|---|
| at 30.06.2021 | at 31.12.2020 | ||
| Name | Type | EUR | EUR |
| Private individual | Current contingent consideration liability | 131 498 | 179 766 |
| Total | 131 498 | 179 766 |
1) 2% of the net profit earned by Mogo LLC for the years 2019 through 2021; 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 noncontrolling 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:
2) Aditional annual amounts of GEL 82 836 for the years 2019-2021.
| Name | Maturity date | Interest rate | Borrowing/ (reimbursement) |
Nominal value as at 30.06.2021 EUR |
Nominal value as at 31.12.2020 EUR |
|---|---|---|---|---|---|
| Non-current Bond holders |
10.07.2022 | 9.5% | 65 000 | 99 028 049 | 98 963 049 |
| Current Accrued interest |
(4 719 255) | - 278 392 |
4 440 863 |
On 13 November 2019, Eleving Group S.A. successfully placed a EUR 25 million tap issue of its 9.50% corporate bond 2018/2022 (XS1831877755) at 95% plus accrued interest. Listing of the bonds on the Frankfurt Stock Exchange's regulated market (General Standard) is based on the securities prospectus approved by the CSSF (Luxembourg supervisory authority).
The total amount outstanding of Eleving Group's 9.50% corporate bonds 2018/2022 (XS1831877755) amounts to EUR 100 million. The bond will mature in July 2022.
Starting from 9 July 2018 Eleving Group S.A. and its subsidiaries entered into several pledge agreements with Greenmarck Restructuring Solutions GmbH, establishing pledge over shares of the subsidiaries, pledge over present and future loan receivables of the subsidiaries, pledge over trademarks of the subsidiaries, general business pledge over the subsidiaries, pledge over primary bank accounts if feasible, in order to secure Eleving Group S.A. obligations towards bondholders deriving from Eleving Group S.A. bonds. Subsequently additional pledgors were added who became material (subsidiaries with net portfolio of more than EUR 7 500 000) according to terms and conditions of the bonds. As at 31 December 2019 Company has pledged its shares in subsidiaries, all intercompany receivables as well as receivables from 100x Treasury SIA and Novo Holding AS in favor of the bond liabilities.
On 9 July 2018 the Group as Issuer and its subsidiaries as Guarantors signed a guarantee agreement, as amended and restated on 13 November 2018, 31 January 2019, 31 May 2019, 11 November 2019, 15 November 2019, 31 January 2020, 23 June 2020, 29 September 2020 and 30 November 2020 according to which the guarantors unconditionally and irrevocably guaranteed by way of an independent payment obligation to each holder of the Eleving Group S.A. bonds the due and punctual payment of principal of, and interest on, and any other amounts payable under the Eleving Group S.A. bonds prospectus.
| Nominal value as | Nominal value as | ||||
|---|---|---|---|---|---|
| Borrowing/ | at 30.06.2021 | at 31.12.2020 | |||
| Name | Maturity date | Interest rate | (reimbursement) | EUR | EUR |
| Non-current | |||||
| Mogo AS | 27.04.2023 | 12.50% | (3 256 632) | 19 916 403 | 23 173 035 |
| Mogo OU | 12.09.2026 | 12.75% | 12 144 400 | 12 144 400 | - |
| Mogo Central Asia AS | 25.05.2022 | 3.00% | 3 950 000 | 3 950 000 | - |
| YC Group AS | 09.07.2024 | 3.00% | 1 990 000 | 1 990 000 | - |
| Kredo Finance Shpk | 06.10.2025 | 12.63% | (170 000) | 150 000 | 320 000 |
| Tigo Finance Dooel Skopje | 06.10.2025 | 12.00% | (150 000) | 50 000 | 200 000 |
| Funderly Group AS | 24.11.2025 | 12.00% | (130 000) | - | 130 000 |
| 14 377 768 | 38 200 803 | 23 823 035 | |||
| Current | |||||
| Mogo OU | 11.09.2021 | 13.50% | (11 149 401) | - | 11 149 401 |
| YC Group AS | 09.07.2021 | 3.00% | (1 950 000) | - | 1 950 000 |
| Accrued interest | 376 926 | 376 926 | - | ||
| Other payables to related parties | 575 060 | 861 571 | 286 511 | ||
| (12 147 415) | 1 238 497 | 13 385 912 |
During 2021 Eleving Group S.A. enterred into loan agreements with its subsidiary Mogo Central Asia AS (Latvia).
| Borrowing/ | Nominal value as at 30.06.2021 |
Nominal value as at 31.12.2020 |
|||
|---|---|---|---|---|---|
| Name | Maturity date | Interest rate | (reimbursement) | EUR | EUR |
| Non-current | |||||
| Subordinated loans | |||||
| AK Family Treasury SIA Other |
11.07.2022 11.07.2022 |
12% 12% |
4 353 680 802 676 |
11 847 236 5 435 587 |
7 493 556.00 4 632 911.00 |
| 5 156 356 | 17 282 823 | 12 126 467 | |||
| Current | |||||
| Accrued expenses from currency transactions | 940 082 | 940 082 | - | ||
| Other payables | 55 177 | 180 532 | 125 355 | ||
| 995 259 | 1 120 614 | 125 355 | |||
| Note 14 - Other external expenses | |||||
| 2021 | 2020 | ||||
| EUR | EUR | ||||
| Brokerage fees | 1 225 290 | 1 036 160 | |||
| Professional services | 240 911 | 266 655 | |||
| Subsidiary acquisition expenses | - | 212 988 | |||
| Bank fees Other administrative expenses |
19 824 539 784 |
28 310 19 094 |
|||
| Total | 2 025 809 | 1 563 207 | |||
| Note 15 - Income from participating interests and loans forming part of the fixed assets | 2021 | 2020 | |||
| EUR | EUR | ||||
| Income from participating interests | |||||
| Dividends income | 4 500 004 | 3 943 217 | |||
| Total | 4 500 004 | 3 943 217 | |||
| Income from other investments and loans forming part of the fixed assets derived from affiliated undertakings | |||||
| Interest income on loans issued to related parties | 5 283 906 | 4 333 792 | |||
| Total | 5 283 906 | 4 333 792 |
| Note 16 - Other interest receivable and similar income | ||
|---|---|---|
| 2021 | 2020 | |
| EUR | EUR | |
| Interest income on loans issued | 527 763 | 676 471 |
| Income from transactions with bonds | - | 126 149 |
| Refundable VAT from previous years | - | 8 764 |
| Total | 527 763 | 811 384 |
| Note 17 - Interest payable and similar expenses | ||
| 2021 | 2020 | |
| EUR | EUR | |
| Interest payable and similar expenses concerning affiliated undertakings | ||
| Interest expenses on loans from related parties | 2 588 217 | 1 754 509 |
| Total | 2 588 217 | 1 754 509 |
| Other interest and similar expenses | ||
| Interest expenses on bonds | 4 680 498 | 4 832 732 |
| Interest expenses on loans from non related parties | 679 221 | 181 137 |
| Total | 5 359 719 | 5 013 869 |
Related parties are all shareholders of the Group. All shareholders have equal rights in making decisions proportional to their share value. Receivables and payables incurred are not secured with any kind of pledge. The management of the Company considers all transactions with related parties to be according to arm's length principal.
Please refer to to notes 4, 5, 6, 7, 11, 14 and 15 for more details on transactions with related parties.
Note 19 - Staff costs and number of employees
| 2021 | 2020 | |
|---|---|---|
| Members of the Management | EUR | EUR |
| Remuneration | 3 000 | 2 500 |
The fair value of share options granted is estimated at the date of the grant. Company'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 till 2023 for General Employee Share Option Plan and there are cash settlement alternatives. Given absence of an ongoing sale of subsidiaries or Eleving Group S.A. or any listing process initiated, then cash settlement is considered not to be probable. The Company does not have a past practice of cash settlement for these awards and does not have a present obligation to settle in cash.
The following table illustrates the number and weighted average exercise prices of General Employee share option plan:
| 2021 | 2020 | |||
|---|---|---|---|---|
| Weighted | Weighted | |||
| average | average | |||
| exercise price, | exercise price, | |||
| Number | EUR | Number | EUR | |
| Outstanding at 1 January | 79 | 0.1 | 63 | 0.1 |
| Granted during the year | - | - | 65 | 0.1 |
| Terminated during the year | - | - | -49 | - |
| Outstanding at 30 June/31 December | 79 | 0.1 | 79 | 0.1 |
| Exercisable at the end of the period | - | - | - | - |
There have been no forfeited, exercised or expired share options during the year. The Company's subsidiaries launched this share option plan in 2018 and it involves shares in certain Company's subsidiaries. The plan involves granting of option on shares in Company's subsidiaries.
The exercise price for options outstanding at the end of the year was 0.1 EUR (2020: 0.1 EUR). The weighted average remaining contractual life for the share options outstanding as at 30 June 2021 is 1.5 years (2020: 2).
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.
The Company has issued guarantees to peer-to-peer lending platform Mintos in respect of the credit facilities of subsidiaries of the Company. The maximum amount the Company is exposed to is 75 million EUR.
On 13 August 2021, Fitch Ratings has affirmed Eleving Group`s Long-Term Issuer Default Rating at "B-"; Outlook Stable. The affirmation reflects Eleving Group's lower leverage and progress in refinancing its EUR100 million bond maturing in July 2022.
As of the last day of the reporting period until the date of signing these interim accounts there have been no other events requiring adjustment of or disclosure in the interim accounts or Notes thereto.
| - | |
|---|---|
Māris Kreics 30.09.2020 Delphine Glessinger Director type A Director type B
The undersigned Mogo Finance, а public limited liability company (societe anonyme), governed by laws of the Grand-Duchy of Luxembourg, having its registered office at 8-10 Avenue de la Gаrе, L-1610, Luxembourg and registered with the Luxembourg Тrаdе and Companies Register under the number В 174457 (the "Company''),
Неrеbу formally and expressly declares the following:
The standalone interim report of the Company for the period ended 30 June 2021 is, to the best of Directors' knowledge, рrераrеd in accordance with the applicable set of accounting standards and gives а true and fair view of the assets, liabilities, financial position and profit оr loss of the Company.
Director type A Director type B
Māris Kreics 30.09.2020 Delphine Glessinger
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