MIR LIMITED UK LTD (CONSOLIDATED AND PARENT COMPANY)
AUDITED ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
COMPANY INFORMATION
___________________________________________________________________________
Directors
Israel Rosenthal
Christian Mark Sperring
Company Number
10417552
Registered Office
Signature by Regus Berkeley Square
Berkeley Square House
2nd Floor, London
England
W1J 6BD
Auditor
KPMG Audit LLC
Heritage Court
41 Athol Street
Douglas
Isle of Man
IM1 1LA
Business Address
Signature by Regus Berkeley Square
Berkeley Square House
2nd Floor, London
England
W1J 6BD
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
CONTENTS
___________________________________________________________________________
Page
Strategic report
1 – 3
Directors' report
4 – 5
Independent auditor's report
6 – 9
Consolidated statement of profit or loss and other comprehensive income
10
Company statement of profit or loss and other comprehensive income
11
Consolidated statement of financial position
12
Company statement of financial position
13
Consolidated statement of changes in equity
14
Company statement of changes in equity
15
Consolidated statement of cash flows
16
Company statement of cash flows
17
Notes to the financial statements
18 - 45
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
STRATEGIC REPORT
The Directors of MIR Limited UK Ltd (“the Company”) and its subsidiaries (“the Group”) present their Strategic Report for the year ended 31 December 2023.
Review of the business
The principal activity of the Company and Group is the provision of digital wallet services to end user consumers. The Company is registered as an Authorised Electronic Money Institute (AEMI) supervised and regulated by the Financial Conduct Authority (“FCA”). The e-wallet product enables customers to make online payments conveniently and securely, and to send and receive money transfers cost effectively. There were no significant changes in the nature of the activities of the Company during the year.
It is anticipated that the Company and the Group will continue to operate its core businesses in the same way over the forthcoming year to further grow its market share for existing business and increase revenue and operating activities.
Business review
The Company and the Group continued to deliver positive cash flows and the focus remains to achieve the right balance between continuing to meet the needs and expectations of our customers, shareholder, and other stakeholders while making sufficient returns to support our growth plans by controlling our costs and managing our cash efficiently. The Directors continue to lead the Company, in line with strategic objectives.
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Revenue
10,000
9,240
22,091
13,090
Gross profit
7,021
6,318
14,783
5,955
Gross profit margin
70%
68%
67%
45%
During the year revenue for the Company decreased by £3.8 million to £9.2 million (2022: increase of £2.6 million). The revenue for the Group decreased by £12.1 million to £10 million (2022: increase of £1.6 million).
Principal risks and uncertainties
The Group's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board of Directors has established a group wide audit, risk and compliance committee who are responsible for development and monitoring of the Groups procedures, policies and risk appetite. The committee reports regularly to the board of directors on its activities.
The Group uses financial instruments as detailed in note 19. The Group does not use derivative financial instruments. The main purpose of these financial instruments is to present users of the financial statement's useful information for the assessment of the Group's operations.
One of the main risks that the Group's financial instruments incurred within 2023 are commercial risks around supplier and banking partners within current markets. The Group also incurs credit risk, market risk, liquidity risk and risk of customer fraud. In addition, the Group continues to have increased commercial risks surrounding competition, suppliers and technology.
1
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
STRATEGIC REPORT
Principal risks and uncertainties (continued)
The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group audit committee oversees how management monitors compliance with the Group's risk management policies and procedure and reviews the adequacy of the risk management framework in relation to risks faced by the Group. The Group audit committee is assisted in its oversight role by an internal audit. Internal audit undertakes both regular and ad-hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee. Key risk is summarised below:
Supplier and Banking Partner risk
The nature of the Group's business requires it to enter numerous commercial and contractual relationships with payment service providers and accredited banks, card networks, card issuers and other financial institutions. The Group's success depends on these relationships to operate on a day-to-day basis to enable the efficient delivery of its services. This risk is mitigated through maintaining a broad network of banking and payment partners. Reviews over banking partners are undertaken periodically.
The board are responsible for securing alternative banking solutions and are continuously seeking a wide range of banking facilities to accommodate the growth and risk appetite of the Group. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted.
Credit risk
Credit risk is the risk of financial loss to the Group if a consumer or merchant counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's cash and cash equivalents and trade and other receivables.
In order to mitigate this risk, cash and cash equivalents and restricted cash in respect of customer accounts, are deposited with different banking partners with a variety of credit ratings and credit exposure are regularly monitored and managed by the Group's safeguarding and treasury function. Management considers low risk of losses from these financial instruments.
Receivables held on behalf of payment service providers are closely monitored on a regular basis and are not considered to arise in material credit risk. Having a significant number of payment service providers which are geographically widespread helps mitigate the exposure to concentration risk.
Market risk
Market risk is the risk that changes in market prices – e.g., foreign exchange rates and interest rates – will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
The Group's primary exposure to market risk is in the form of foreign exchange risk explained below.
Foreign exchange risk
The Group's is exposed to currency risk due to financial assets and liabilities denominated in a currency other than the functional currency. The Group's policy is, where possible, to settle liabilities denominated in their functional currency with the cash generated from their own operations in that currency. The Group manages the exposure to currency risk by limiting the use of other currencies for operating expenses, wherever possible, thereby minimising the realised and unrealised foreign exchange gain or loss.
2
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
STRATEGIC REPORT
Liquidity risk
Liquidity risk is the risk that the Company and the Group will be unable to meet its financial obligations as they fall due. Management controls and monitors the Company's and the Group's cash flow on a regular basis, including forecasting future cash flows. The Group's objective to managing liquidity is to ensure that, as far as possible, it will always have sufficient liquidity to meet the liabilities when they become due. Liquidity risk is monitored on a daily basis and is maintained in accordance with FCA requirements for e-money issuers.
Customer fraud risk
The Group is vulnerable to the compliance and fraud threats faced by all businesses. Management is aware of the importance of having robust KYC procedures and on-going monitoring of suspicious transactions in place. Fraud risk is
mitigated by both the compliance and internal security and risk department utilising fraud detection technologies in tandem with robust procedures relating to customer fraud risk.
Technology risk
The availability of the Group's services depends on the continuing operation of its information technology and communication systems. The systems may be subject to damage or interruption, some of which may not be covered by the Group's extensive disaster recovery planning. In order to mitigate these risks, the Company has separate server
locations with and replicates transactional data in real time to databases in separate sites. This allows for services to be switched over from the primary data centre to the disaster recovery site.
Regulatory Compliance risk
There is a risk that the Group may not comply with all applicable laws or regulatory requirements or have adequate controls in place to manage or prevent breaches of applicable laws and regulatory requirements. A breach of compliance or a regulatory requirement may require the Group to pay significant penalties if it fails to maintain or follow adequate procedures in relation to safeguarding of assets, on-boarding of clients or to detect and prevent money laundering, financing of terrorism, breaches anti-bribery laws or contravention of sanctions regulations globally. The Group has a range of system and process controls in place to mitigate this risk and invests significant resources in risk management and compliance.
Future developments
The Group continues to make significant investments to broaden the functionality and jurisdictions offered by its platform and regularly introduces new product features as part of its strategy to enter adjacent markets using its digital wallet technology. The Directors believe that the Group is well positioned to grow current market share and improve its profitability in the future.
On behalf of the board
Date:
3
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
DIRECTORS' REPORT
___________________________________________________________________________
The Directors present their annual report and audited Consolidated and Company financial statements (the “financial statements”) of MIR Limited UK Ltd (“the Company”) and its subsidiaries (collectively, “the Group”) for the year ended 31 December 2023. The prior period of account was for the year ended 31 December 2022.
Principal activities
The principal activity of the Company and the Group is that of the provision of a digital wallets service.
Results and dividends
The Group and Company's results for the year ended 31 December 2023 are set out on pages 10 to 11. The Directors do not recommend the payment of a dividend. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis in preparing the annual financial statements.
Further details regarding the adoption of the going concern basis can be found in note 2 to the financial statements.
Directors
The Directors who held office during the year and up to the date of signature of the financial statements were as follows:
Israel Rosenthal
Christian Mark Sperring
Auditor
KPMG Audit LLC, being eligible, has expressed their willingness to continue in office as the Company's and Group's auditor in accordance with section 485 of the Companies Act 2006.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law.
The Directors are required to prepare financial statements for each financial year.  They have elected to prepare the financial statements in accordance with UK-adopted International Accounting Standards.
The Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the situation of Company and of their profit or loss for that year. In preparing the Group's financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable UK-adopted International Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
assess the Group's and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006.  They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
4
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
DIRECTORS' REPORT
___________________________________________________________________________
Statement of disclosure to auditor
So far as each of the Directors are aware, there is no relevant audit information of which the auditor of the Company and the Group is unaware. Additionally, each Director individually has taken all the necessary steps that they ought to have taken as a Director in order to make themselves aware of all relevant audit information and to establish that the auditor of the Company is aware of that information.
Post reporting date event
Since the end of the reporting period, the following adjusting event have occurred:
Impairment of investment in MIR MuchBetter EDE S.L
In 2020, the Company invested an amount of EUR 350,000 (£315,730) into the establishment of its subsidiary MIR MuchBetter EDE S.L. The Company initiated proceedings to dissolve the subsidiary in November 2023. The Company finalised dissolution proceedings in April 2024, and received a partial refund of its investment on 30th April 2024, leaving an amount of EUR 58,578 (£50,073) unrecovered.
As this event provides further evidence of conditions that existed at the reporting date, the parent company has recognized an impairment for the unrecoverable amount in the current financial statements. This impairment reflects the permanent loss of these funds, which are no longer recoverable.
Management has reviewed the situation, and no additional recoveries are expected beyond the refunded amount.
No other events occurred after the reporting period that would have a material impact on the financial statements for the reporting period.
Political and charitable donations
No political or charitable donations were made during the reporting period.
On behalf of the board
Date:
5
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MIR LIMITED UK LTD
___________________________________________________________________________
Our opinion
We have audited the consolidated financial statements and company financial statements of MIR Limited UK Ltd (the “Company”) and its subsidiaries (together, the "Group"), which comprise the consolidated and company statements of financial position as at 31 December 2023, the consolidated and company statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising material accounting policies and other explanatory information.
In our opinion, the accompanying financial statements:
  • *
give a true and fair view of the state of the Group's and of the Company's affairs as at 31 December 2023 and of the Group's and company's profit for the year then ended;
are properly prepared in accordance with UK-adopted international accounting standards; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company and Group in accordance with, UK ethical requirements including FRC Ethical Standards. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Other matter - prior period consolidated financial statements
As explained in note 2 the Company did not previously prepare consolidated financial statements. Consequently ISAs (UK) require the auditor to state that the corresponding figures contained within the consolidated financial statements are unaudited. Our opinion is not modified in respect of this matter.
Going concern
The directors have prepared the consolidated financial statements and company financial statements on the going concern basis as they do not intend to liquidate the Group or the Company or to cease their operations, and as they have concluded that the Group and the Company's financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the consolidated financial statements and company financial statements (the “going concern period").
In our evaluation of the directors' conclusions, we considered the inherent risks to the Group and the Company's business model and analyzed how those risks might affect the Group and the Company's financial resources or ability to continue operations over the going concern period.
Our conclusions based on this work:
we consider that the directors' use of the going concern basis of accounting in the preparation of the consolidated financial statements and company financial statements is appropriate; and
we have not identified, and concur with the directors' assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group and the Company's ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group and the Company will continue in operation.
6
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MIR LIMITED UK LTD
___________________________________________________________________________
Independent Auditor's Report to the Members of MIR Limited UK Ltd (continued)
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
enquiring of management as to the Group's policies and procedures to prevent and detect fraud as well as enquiring whether management have knowledge of any actual, suspected or alleged fraud;
reading minutes of meetings of those charged with governance; and
using analytical procedures to identify any unusual or unexpected relationships.
As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because the Group's revenue streams are simple in nature with respect to accounting policy choice, and are easily verifiable to external data sources or agreements with little or no requirement for estimation from management. We did not identify any additional fraud risks.
We performed procedures including
Identifying journal entries and other adjustments to test based on risk criteria and comparing any identified entries to supporting documentation; and
incorporating an element of unpredictability in our audit procedures.
Use of data analytics to recalculate Revenue transactions and vouching of a sample of revenue transactions to appropriate supporting documents.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the consolidated financial statements and company financial statements from our sector experience and through discussion with management (as required by auditing standards), and from inspection of the Group's regulatory and legal correspondence, if any, and discussed with management the policies and procedures regarding compliance with laws and regulations. As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity's procedures for complying with regulatory requirements.
The Group is subject to laws and regulations that directly affect the consolidated financial statements and company financial statements including financial reporting legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
The Group is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the consolidated financial statements and company financial statements, for instance through the imposition of fines or litigation or impacts on the Group and the Company's ability to operate. We identified financial services regulation as being the area most likely to have such an effect, recognising the regulated nature of the Group's activities and its legal form. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the consolidated financial statements and company financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the consolidated financial statements and company financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
7
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MIR LIMITED UK LTD
___________________________________________________________________________
Independent Auditor's Report to the Members of MIR Limited UK Ltd (continued)
In addition, as with any audit, there remains a higher risk of non-detection of fraud, as this may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
The directors' report and strategic report
The directors are responsible for the strategic report and the directors' report.  Our opinion on the consolidated financial statements and company financial statements does not cover those reports and we do not express an audit opinion thereon.
Our responsibility is to read the strategic report and the directors' report and, in doing so, consider whether, based on our consolidated financial statements and company financial statements audit work, the information therein is materially misstated or inconsistent with the consolidated financial statements and company financial statements or our audit knowledge.  Based solely on that work:
we have not identified material misstatements in the strategic report and the directors' report;
in our opinion the information given in those reports for the financial year is consistent with the consolidated financial statements and company financial statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 4, the directors are responsible for: the preparation of the consolidated financial statements and company financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of consolidated financial statements and company financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements and company financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor's report. Reasonable assurance is a high level of assurance but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements and company financial statements.
A fuller description of our responsibilities is provided on the FRC's website at www.frc.org.uk/auditorsresponsibilities.
8
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MIR LIMITED UK LTD
___________________________________________________________________________
Independent Auditor's Report to the Members of MIR Limited UK Ltd (continued)
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company's member, in accordance with chapter 3 of part 16 of the Companies Act 2006.  Our audit work has been undertaken so that we might state to the Company's member those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and its member, as a body, for our audit work, for this report, or for the opinions we have formed.
​Nicholas Quayle (Senior Statutory Auditor)
For and on behalf of KPMG Audit LLC (Statutory Auditor)
Chartered Accountants
Heritage Court, 41 Athol Street
Douglas, Isle of Man
IM1 1LA
December 2024
9
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023
___________________________________________________________________________
2023
Unaudited
2022
Notes
£
£
000's
000's
Revenue
5
10,000
22,091
Cost of sales
(2,979)
(7,308)
Gross profit
7,021
14,783
Impairment loss on trade receivables and contract assets
19
(334)
(1,982)
Operating expenses
6
(8,357)
(12,686)
Operating (loss)/profit
(1,670)
115
Finance costs
9
-
(9)
Other finance income
10
1,982
-
Profit before taxation
312
106
Income tax expense
11
(53)
(23)
Profit for the year
259
83
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Exchange gain/(loss) arising on translation of foreign operations
10
(6)
Total comprehensive income
269
77
The consolidated statement of profit or loss and other comprehensive expense has been prepared on the basis that all operations are continuing operations.
The notes on pages 18 to 45 are an integral part of these financial statements.
10
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023
___________________________________________________________________________
Year ended 2023
Year ended 2022
Notes
£
£
000's
000's
Revenue
5
9,240
13,090
Cost of sales
(2,922)
(7,135)
Gross profit
6,318
5,955
Impairment loss on trade receivables and contract assets
19
(334)
(1,982)
Impairment loss on investments in subsidiary undertakings
14
(50)
-
Operating expenses
6
(5,819)
(3,857)
Operating profit
115
116
Finance costs
9
-
(5)
Profit before taxation
115
111
Income tax expense
11
(27)
(21)
Profit for the year
88
90
Other comprehensive income
-
-
Total comprehensive income
88
90
The company statement of profit or loss and other comprehensive income has been prepared on the basis that all operations are continuing operations.
The notes on pages 18 to 45 are an integral part of these financial statements.
11
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT
31 DECEMBER 2023
31 December 2023
___________________________________________________________________________
Unaudited
Unaudited
2023
2023
2022
2022
Notes
£
£
£
£
000's
000's
000's
000's
Non-current assets
Right of use asset
13
10
26
Property and equipment
12
2
3
Other receivables
15
-
1
12
30
Current assets
Trade and other receivables
15
13,318
20,894
Cash and cash equivalents
16
20,291
26,652
33,609
47,546
Current liabilities
Lease liability
13
(10)
(23)
Trade and other payables
17
(31,203)
(45,403)
(31,213)
(45,426)
Net current assets
2,396
2,120
Non-current liabilities
Lease liabilities
13
-
(11)
Net assets
2,408
2,139
Capital and reserves
Share capital
18
2,000
2,000
Retained earnings
404
145
Translation reserve
4
(6)
Equity shareholder's funds
2,408
2,139
The financial statements were approved and signed by the Directors and authorised for issue on
Director
Date:
The notes on pages 18 to 45 are an integral part of these financial statements.
12
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
COMPANY STATEMENT OF FINANCIAL POSITION AS AT
31 DECEMBER 2023
31 December 2023
___________________________________________________________________________
2023
2023
2022
2022
Notes
£
£
£
£
000's
000's
000's
000's
Non-current assets
Right of use asset
13
10
26
Investment in subsidiary undertakings
14
309
318
Other receivables
15
-
1
319
345
Current assets
Trade and other receivables
15
14,737
20,606
Cash and cash equivalents
16
19,979
24,725
34,716
45,331
Current liabilities
Lease liability
13
(10)
(15)
Trade and other payables
17
(32,767)
(43,480)
(32,777)
(43,495)
Net current assets
1,939
1,836
Non-current liabilities
Lease liability
13
-
   (11)
Net assets
2,258
2,170
Capital and reserves
Share capital
18
2,000
2,000
Retained earnings
258
170
Equity shareholder's funds
2,258
2,170
The financial statements were approved and signed by the Directors and authorised for issue on
Director
Date:
The notes on pages 18 to 45 are an integral part of these financial statements.
13
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 DECEMBER 2023
___________________________________________________________________________
Share capital
Retained earnings
Translation reserve
Total
£
£
£
£
000's
000's
000's
000's
Balance at 1 January 2022 - unaudited
  2,000
   62
          ─
      2,062
Total comprehensive income for the year
Profit for the year - unaudited
-
83
-
83
Other comprehensive income - unaudited
-
-
(6)
(6)
Balance at 31 December 2022 - unaudited
2,000
145
(6)
2,139
Share capital
Retained earnings
Translation reserve
Total
Balance at 1 January 2023
  2,000
   145
          (6)
      2,139
Total comprehensive income for the year
Profit for the year
-
   259
-
259
Other comprehensive income
-
-
10
       10
Balance at 31 December 2023
2,000
404
4
2,408
The notes on pages 18 to 45 are an integral part of these financial statements.
14
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
COMPANY STATEMENT OF CHANGES IN EQUITY AS AT 31 DECEMBER 2023
___________________________________________________________________________
Share
capital
Retained earnings
Total
£
£
£
000's
000's
000's
Balance as at 1 January 2022
          2,000
               80
          2,080
Comprehensive income for the year
Profit for the year
                 -
              90
90
Balance at 31 December 2022
          2,000
170
2,170
Balance as at 1 January 2023
2,000
170
2,170
Comprehensive income for the year
Profit for the year
-
88
88
Balance at 31 December 2023
          2,000
258
2,258
The notes on pages 18 to 45 are an integral part of these financial statements.
15
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
CONSOLIDATED STATEMENT OF CASH FLOWS AS AT 31 DECEMBER 2023
___________________________________________________________________________
Group
Unaudited
Unaudited
2023
2023
2022
2022
Notes
£
£
£
£
000's
000's
000's
000's
Cash flows from operating activities
Cash (used in)/generated from operations
21
(6,294)
326
Income tax paid
53
23
Net cash (used in)/generated from operating activities
(6,241)
349
Investing activities
Acquisition of investment in subsidiary undertaking
14
(58)
-
Finance expense
9
-
(9)
Net cash used in investing activities
(58)
(9)
Financing activities
Payments of lease liabilities
13
(16)
(23)
Net cash used from financing activities
(16)
(23)
Net (decrease)/increase in cash and cash equivalents
(6,315)
317
Effect of movement in exchange rates on cash held
(46)
-
Cash and cash equivalents at beginning of year
26,652
26,335
Cash and cash equivalents at end of year
20,291
26,652
Cash and cash equivalents at the end of the year comprise of
Own cash and cash equivalents
16
4,141
18,146
Cash held at banks in respect of customers
16
16,150
8,506
Cash and cash equivalents at end of year
20,291
26,652
The notes on pages 18 to 45 are an integral part of these financial statements.
16
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
COMPANY STATEMENT OF CASH FLOWS AS AT 31 DECEMBER 2023
___________________________________________________________________________
Company
2023
2023
2022
2022
Notes
£
£
£
£
000's
000's
000's
000's
Cash flows from operating activities
Cash generated from operations
21
(4,763)
6,176
Income tax paid
27
21
Net cash (used in)/from operating activities
(4,736)
6,197
Investing activities
Acquisition of investment in subsidiary undertaking
14
(58)
-
Finance cost
9
-
(5)
Net cash used in investing activities
(58)
(5)
Financing activities
Payments of lease liabilities
13
(16)
(15)
Net cash used in financing activities
(16)
(15)
Net (decrease)/increase in cash and cash equivalents
(4,810)
6,177
Effect of movement in exchange rates on cash held
64
-
Cash and cash equivalents at beginning of year
24,725
18,548
Cash and cash equivalents at end of year
19,979
24,725
Cash and cash equivalents at the end of the year comprise of
Own cash and cash equivalents
16
3,829
16,219
Cash held at banks in respect of customers
16
16,150
8,506
Cash and cash equivalents at end of year
19,979
24,725
The notes on pages 18 to 45 are an integral part of these financial statements.
17
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
18
Company information
MIR Limited UK Ltd (“the Company”) is a private company limited by shares and incorporated in the United Kingdom. The registered office is Signature by Regus Berkley Square, Berkely Square House, 2nd Floor, London, England, W1J 6BD.
The period of account for these financial statements is the year ended 31 December 2023. The prior period of account was the year ended 31 December 2022.
These consolidated and company financial statements (the “financial statements”) comprise the Company and its subsidiaries (together referred to as the “Group”).
The principal activity of the Company is that of the provision of a digital wallets service.
19
Material accounting policies
The material accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.
These financial statements have been prepared in accordance with UK-adopted International accounting standards and UK Companies Act 2006.
The financial statements of the Company are prepared in Pound Sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest thousand, unless otherwise stated.
Basis of preparation
The financial statements have been prepared under the historical cost convention.
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.
Going concern
The directors continue to have a reasonable expectation that the Group and Company has adequate resources to continue in operation for at least the next 12 months from the date of approval of these financial statements. Based on a profit before tax for the year ended 31 December 2023 of £312,087 (2022: £105,756) for the Group, and a profit before tax of £114,963 (2022: £111,413) for the Company, the financial statements have been prepared on a going concern basis which the Directors consider to be appropriate.
As at 31 December 2023, the Group had cash balances of £20,291,000 (2022: £26,652,000), is in a net asset position of £2,408,000 (2022: £2,139,000), and is in a net current asset position of £2,396,000 (2022: £2,120,000). As at 31 December 2023 the Company had cash balances of £19,979,000 (2022: £24,725,000), is in a net asset position of £2,258,000 (2022: £2,170,000) and is a net current asset position of £1,939,000 (2022: £1,836,000). The Group and the Company therefore have sufficient liquid assets to provide liquidity support as required to enable the Group to meet its obligations as they fall due.
18
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
2
Material accounting policies (continued)
Consolidated financial statements
This year ended 31 December 2023 marks the first time the Group has presented consolidated financial statements. In the prior year, the Group took advantage of the exemption available under IFRS 10 Consolidated Financial Statements, from the requirement to prepare consolidated financial statements in accordance with IFRS. The ultimate parent of the Company and the Group produced Financial Statements that were available for public use and complied with IFRS, in which subsidiaries are consolidated or are measured at fair value through profit or loss in accordance with its IFRS. As a result, last year's financial statements were presented on a standalone basis for the parent entity.
The consolidated financial statements for the current year include the financial information of the subsidiary undertakings detailed in note 13.
Basis of consolidation
The financial statements incorporate the assets, liabilities, and the results of the Company and all its subsidiaries made up to 31 December. Control is achieved when the Group:
has the power over the investee
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Group reassess whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of the subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the date the Company gains control until the date when the Company ceases to control the subsidiary.
All financial statements are made up to 31 December 2023. All intra-group transactions, balances, and unrealised gains on transactions between Group Companies are eliminated on consolidation.
Foreign exchange
The individual financial statements of each entity of the Group are prepared in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the financial statements, the results and the financial position is expressed in Pound Sterling, which is the functional currency of the Company, and the presentational currency of the financial statements of the Group.
In preparing the financial statements, transactions in currencies other than the entity's functional currency are recorded at the rates of exchange prevailing on the date of the transactions. At each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the statement of financial position date. Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement of profit or loss and other comprehensive income.
19
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
2
Material accounting policies (continued)
Foreign exchange (continued)
For the purpose of the presenting the financial statements, the assets and liabilities of the Group's foreign operations are expressed in Pounds Sterling using exchange rates prevailing at the statement of financial position date. Income and expenses items are translated using the average exchange rates for the year, unless exchange rates fluctuated significantly during the year, in which case the exchange rates at the dates of transactions are used. Exchange differences arising, if any, are classified as other comprehensive income and transfers to the Group's translation reserve. Such translation differences are recognised in profit and loss in the year in which the foreign operation is disposed of.
Goodwill and fair value adjustments arising on acquisition of foreign operations are treated as assets and liabilities of the foreign operation and translated at the closing rate.
Leases
Group and Company for policies applicable to both and only Company for Company only facilities and Group only
for Group policies acts as a lessee. It assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right of use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease.
If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise:
Fixed lease payments (including in-substance fixed payments) less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; and
Payments of penalties for terminating the lease if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The lease term has changed, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The lease payments change due to changes in an index or rate, in which case the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
The right-of-use assets are presented as a separate line in the statement of financial position. They comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. To the extent that the costs relate to a right of use asset, the costs are included in the related right of use asset.
20
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
20
Material accounting policies (continued)
Leases (continued)
Right of use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The Group applies IAS 36 to determine whether a right of use asset is impaired and accounts for any identified impairment loss as described in the Impairment policy.
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within trade and other payables.
Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay the amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Pensions
The Group and Company operates a defined contribution plan for its employees. Payments to defined contribution plans are recognised as an expense when employees have rendered the service entitling them to the contributions.
Cost of Sales
Cost of sales primarily relate to fees incurred by the Group in the processing and settlement of transactions.
Digital Wallets:
Cost of sales is primarily composed of the costs the Group incurs to accept a customer's funding source of payment and subsequent withdrawals from the wallet. These costs include fees paid to payment processors and other financial institutions in order to draw funds from a customer's credit or debit card, bank account, or other funding source, they have stored in their digital wallet. Cost of Sales also includes expenses relating to the issuance of cards and wearable technology, offered as part of the digital wallets service.
Segregated cash in respect of customer accounts
The Group and Company regulatory requirements require customer funds that have been received either in exchange for electronic money (“e  money”) issued or within the transaction settlement cycle to merchants to be safeguarded.
Depending on the underlying regulations, the Group may satisfy these safeguarding requirements by either placing qualifying liquid assets in a segregated bank account, by insuring the funds with an authorized insurer or by obtaining guarantees from authorized credit institutions. The Group's safeguarding requirement that is met by placing qualifying liquid assets into segregated bank accounts are presented as segregated cash in respect of customer accounts in note 16.
Funds payable to customers and merchants
The Group and Company recognises a liability upon the issuance of electronic money to its members and merchants equal to the amount of electronic money that has been issued. In addition, where the Group is in the flow of funds in the transaction settlement cycle, a liability is recognised for the amount to be settled to merchants.
These amounts are presented as Funds payable to customers and merchants within trade and other payables in the statement of financial position.
21
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
2
Material accounting policies (continued)
Financial instruments
The Group and Company classifies its financial assets at either fair value through profit of loss or at amortised cost.
Financial assets measured at amortised cost are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently measured at amortised cost using the effective interest rate method, less expected credit loss allowances as stipulated in IFRS 9. Financial assets at amortised cost include cash and cash equivalents and other receivables.
Financial liabilities that are not measured at fair value through profit or loss are classified as at amortised cost. Financial liabilities designated as at amortised cost are initially measured at their fair value (net of issue costs in the case of loans and borrowings) and subsequently measured at their amortised cost using the effective interest rate method and mainly comprise trade and other payables. Financial liabilities are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Finance costs are charged to the statement of profit or loss and other comprehensive income using the effective interest rate method.
Impairment of financial instruments
In accordance with IFRS 9, the Company recognises impairment loss allowances for excepted credit losses (“ECLs”) on financial assets that are measured at amortised cost. These include trade and other receivables and cash and cash equivalents.
There are three approaches to recognising ECL provisions under IFRS 9:
The Simplified Approach – which applies on a mandatory basis to trade receivables and contract assets that do not contain a significant financing component. It may also be applied on an optional basis to trade receivables and contract assets that do contain a significant financing component or to lease receivables;
The Credit Adjusted Approach – which applies to assets that are credit impaired on initial recognition (i.e. origination or acquisition); and
The General Approach – which applies to all loans and receivables not eligible for the above two approaches.
All the Company's loans and receivables apply the general approach to impairment which follows a three-stage model and which requires these financial assets to be assigned to one of the following three stages:
Stage 1 - Financial assets which have not experienced a significant increase in credit risk since initial recognition, against which an expected credit loss provision is required for expected credit losses resulting from default events expected within the next 12 months (a "12-month ECL") is required on initial recognition - when a financial asset is first recognised it is assigned to Stage 1;
Stage 2 - Financial assets which have experienced a significant increase in credit risk since initial recognition, against which a lifetime ECL provision is required; and
Stage 3 - Financial assets which are credit impaired, for which objective evidence of an impairment exists, and which also requires a lifetime ECL provision.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group's historical experience and informed credit assessment and including forward-looking information.
22
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
21
Material accounting policies (continued)
Impairment of financial instruments (continued)
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due, or where the Group considers it unlikely that the obliger will be able to pay its obligations. The Company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Group to actions such as realising security (if any is held); or the financial asset is more than 90 days past due.
The carrying amounts of the Group's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the Group performs impairment tests at least annually or whenever events or changes in circumstances indicate that the carrying values may not be recoverable.
For purposes of assessing impairment, assets that cannot be tested individually are grouped together into the smallest group of assets for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Subject to an operating segment ceiling test, the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit ("CGU") exceeds its estimated recoverable amounts. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell.
Impairment losses are recognised in the consolidated statement of profit or loss and other comprehensive income. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in estimates used to determine the recoverable amount, but only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Offsetting of financial statements
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legally enforceable right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Income and expenses are presented on a net basis only when permitted by the accounting standards.
Equity
Equity comprises the following:
Share capital represents the nominal value of equity shares.
Retained earnings represents retained profits.
Translation reserve represents exchange differences on translation of foreign subsidiaries recognised in other comprehensive income.
23
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
22
Material accounting policies (continued)
Accounting policies included elsewhere in the financial statements
The following accounting policies are included within the relevant note to the financial statements:
Revenue from contracts with customer (note 5)
Taxation, including deferred tax (note 10)
Property and equipment (note 11)
Investment in subsidiary undertakings (note 13)
23
Adoption of new and revised Standards
New and amended IFRS Standards that are effective for the current year
The Company applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2023 (unless otherwise stated). The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. The adoption of the below standards has not had a material impact on the financial statements of the Company.
IFRS 17 Insurance Contracts – New international accounting standard for insurance contracts, replacing IFRS 4.
Effective date: Effective for annual periods beginning on or after 1 January 2023
IAS 1 Presentation of Financial Statements – Amendments regarding the disclosure of accounting policies
Effective date: Effective for annual periods beginning on or after 1 January 2023
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors – Amendments regarding the definition of accounting estimates
Effective date: Effective for annual periods beginning on or after 1 January 2023
IAS 12 Income Taxes – Amendments regarding deferred tax on leases and decommissioning obligations
Effective date: Effective for annual periods beginning on or after 1 January 2023
IFRS 2 Practice Statement 2 – Amendments regarding the disclosure of accounting policies
Effective date: Effective for annual periods beginning on or after 1 January 2023
New and revised IFRS Standards in issue but not yet effective
IAS 1 Presentation of Financial Statements – Amendments regarding non-current liabilities and the classification of liabilities as current or non-current
Effective date: Effective for annual periods beginning on or after 1 January 2024
IFRS 7 Leases – Amendments regarding supplier finance arrangements
Effective date: Effective for annual periods beginning on or after 1 January 2024
IFRS 16 Leases – Amendments regarding the lease liability in a Sale and Leaseback
Effective date: Effective for annual periods beginning on or after 1 January 2024
24
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
24
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the Company's and the Group's financial statements requires management to make estimates and judgements that affect the reported amounts of assets, liabilities, contingencies and the accompanying disclosures at the date of the financial statements, and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimated. By their nature, these estimates and judgements are subject to estimation uncertainty and the effect on the financial statements of changes in estimates in future periods could be significant.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key accounting estimates and assumptions
Information about significant judgements and assumptions at the reporting date are included in note 2, note 15 and note 20 of these financial statements.
25
Revenue from contracts with customers
Main revenue streams
The Group provides payment services through the provision of its Digital Wallet service. The Digital Wallets revenue streams are comprised of revenues from charging customers on a transactional basis for using the Group's digital wallets offering, revenues from currency exchanges and merchant revenues. The Group has individual and corporate customers.
As a result of these concentrations, the Group does not disaggregate revenue below this level. The Group acts as the principal in all of its contracts with customers.
Contracts with customers have different durations depending on the business line and whether the contracts are with consumers or merchants. The Group's primary consumer facing revenue stream is the Digital Wallets business line. In this business the consumer facing contracts are online terms and conditions that the consumers agree on as terms of business; these are typically open ended and can be terminated without penalty by either party. Therefore, contracts in this business line are essentially defined at the transaction level and there is no commitment to provide further services beyond the services already provided. Merchant contracts in the Digital
Wallets business are formal written contractual agreements with merchants who use the Digital Wallets service. These contracts are longer-term relationships structured as open-ended contracts and are typically cancellable by either party within 90 days written notice.
The Group has determined that the primary services offered to its customers comprise a series of distinct performance obligations, that are substantially similar with the same pattern of transfer. Hence, these services are considered a single performance obligation. The Group recognises revenue as it satisfies a performance obligation by transferring control over the service to a customer for which the timing and quantity of transactions to be processed is not determinable at the inception of the contract.
The majority of the Group's payment services are priced as a percentage of transaction value or a specified fee per transaction. The Group also charges other fixed fees based on specific services that may be unrelated to the number of transactions or transaction value. Given the nature of the promise and those the underlying transaction fees are based on unknown quantities of transactions or outcomes of services to be performed over the contract term, the total consideration for each primary source of revenue is determined to be variable. The Group allocates the variable fees to the individual day in which the services were wholly performed, and for which it has the contractual right to bill those wholly performed services under the contract. Therefore, revenue for our payment service is measured daily based on the services that are performed on that day.
25
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
26
Revenue from contracts with customers (continued)
Other income
Other income includes interchange income received on automated teller machine (ATM) transactions occurred at point of sale, e-voucher commission income received for % of sales voucher issued and income from the sale of wearables, such as fobs, and prepaid cards issued to customers.
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Revenue from contracts with customers
Digital Wallets
9,961
9,201
21,811
12,810
Other revenue
Other income
39
39
280
280
39
39
280
280
Revenue
10,000
9,240
22,091
13,090
The Group has no single customer contributing 10% or more of the Group's revenue in the year.
Disaggregation from contracts with customers
In the following table, revenue from contracts with customers is disaggregated by primary geographical market and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Group's reportable segments.
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
Disaggregation of revenue
000's
000's
000's
000's
Primary geographical markets
UK and rest of world
9,047
9,240
13,091
13,090
Europe
953
-
9,000
-
10,000
9,240
22,091
13,090
All revenues of the Group, aside from some elements of other income, are generated through the provision of Digital wallet services being the Group's primary activity.
All revenues generated by the Group relate to services transferred at a point in time and as such no contract receivables, assets or liabilities have been recognised as at 31 December 2023.
The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about the remaining performance obligations that have original expected durations of one year or less.
26
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
27
Operating expenses
The Group's profit from operating activities is stated after charging:
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Staff costs (note 8)
747
708
           737
           637
Marketing and promotion
63
63
           180
           180
Auditor's renumeration (note 7)
70
51
             58
             46
Professional and government fees
259
181
             42
             32
Licences and subscriptions
80
72
            85
             59
Commissions paid
52
52
             95
             95
Office and rental costs
9
7
            50
            46
Depreciation of tangible assets (note 12)
1
-
2
-
Deprecation of right of use assets (note 13)
16
16
23
15
Net foreign exchange losses
1,138
1,030
1,241
1,205
Customer bad debt
852
536
299
299
Management recharges (note 20)
4,648
2,695
9,428
859
Bank charges and sundry expenses
422
408
446
384
8,357
5,819
12,686
3,857
28
Auditor's renumeration
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Fees payables to the Group and Company's auditor and their associates
For audit services
Audit of financial statements of the
Company and the Group
70
51
58
46
70
             51
58
46
29
Staff costs
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
The average monthly number of employees
(including executive directors) was:
9
9
11
11
27
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
30
Staff costs (continued)
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Their aggregate remuneration comprised:
Wages and salaries
640
          615
          633
558
Social security costs
77
            66
            93
70
Other pension costs
27
            27
             11
9
Other staff costs
3
-
-
-
Total
747
708
737
637
Directors renumeration comprised:
000's
000's
000's
000's
Wages and salaries
100
100
100
100
Social security costs
35
35
42
42
Other pension costs
-
-
3
3
Total
         135
         135
145
145
Other pension costs within aggregate remuneration relate to the Group's contribution to the Group's defined contribution plan.
31
Finance costs
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Interest expense on lease liabilities
-
-
1
1
Bank interest paid
-
              -
              8
              4
Total finance costs
-
            -
            9
            5
32
Other finance income
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Other finance income
1,982
-
-
-
Total other finance income
1,982
            -
            -
            -
The amount in 2023 for the Group relates to the release of estimated net provision amounts held following a review of the Group's EEA digital wallet activity.
28
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
33
Taxation
The income tax expense represents the sum of current and deferred income tax expenses.
The taxation charge recognised in the consolidated statement of profit or loss and other comprehensive income relates to the financial results of UAB MIR Lithuania, a subsidiary within the Group, and whose profits are chargeable to corporation tax of 15% (2022: 15%) and MIR Limited UK Ltd, which is subject to a blended corporation tax rate of 23.5% (2022: 19%).
Group
Unaudited
2023
2022
£
£
000's
000's
Profit before tax from continuing operations
312
106
Tax using Company's domestic tax rate
23.5%
27
19%
21
Tax effect of foreign jurisdictions
13.33%
26
2.35%
2
17.09%
53
21.75%
23
During the year ended 31 December 2023, the prevailing rate of corporation tax in the United Kingdom was 23.5% (2022: 19%).
Company
2023
2022
£
£
000's
000's
Profit before tax from continuing operations
115
111
Tax using Company's domestic tax rate
23.5%
27
19%
21
23.5%
27
19%
21
Current tax
Current tax and deferred tax are recognised in the statement of profit or loss and other comprehensive income except to the extent that they relate to a business combination, or items recognised directly in equity or in other comprehensive income.
The current tax charge is calculated on the tax laws enacted or substantively enacted at the reporting date in the countries where the Company and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate, based on amounts expected to be paid to the tax authorities.
Taxable profit differs from net profit as reported in the statement of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable, or deductible and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
29
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
34
Taxation (continued)
Deferred tax
Deferred tax is recognized for temporary differences, except for those arising from initial recognition of goodwill or assets and liabilities in transactions that are not business combinations and do not affect accounting or taxable profit at the time of the transaction.
Deferred tax assets for unused tax losses, tax credits, and deductible temporary differences are recognized to the extent that future taxable profit is probable. These assets are reviewed at each reporting date and reduced if it is not probable that the related tax benefit will be realized.
Deferred tax liabilities on taxable temporary differences from investments in subsidiaries are provided except when the Company controls the timing of the reversal, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets on deductible temporary differences from investments in subsidiaries are recognized only if there is sufficient taxable profit available for utilization.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and they relate to taxes levied by the same authority on the same or different entities with an intention to settle on a net basis.
The Company is incorporated and tax resident in the United Kingdom, with taxation for other jurisdictions calculated at the prevailing rates in those jurisdictions.
Impact of tax rate changes
Changes in tax rates that affect deferred tax balances are recognized in the period in which the changes are substantively enacted. The impact of any tax rate changes during the period is included in the reconciliation of the effective tax rate.
Tax rate changes
On 03.03.2021, the UK government enacted a change in the corporate tax rate from 19% to 25%, effective from 01.04.2023. The impact of this rate change on the deferred tax balances has been reflected in the Company's financial statements for the year ended 31 December 2023.
35
Property and equipment
Property and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their estimated residual values using a straight line method over the useful lives on the following bases:
Computers
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is recognised in the statement of profit or loss and other comprehensive income.
During the year ended 31 December 2023, the UAB MIR Lithuania, the Group's subsidiary recorded depreciation expenses related to its property, plant, and equipment. The subsidiary's depreciation aligns with the accounting policies of the Group, and the amounts have been appropriately recognized in the consolidated financial statements.
30
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
36
Property and equipment (continued)
Group - Computers
Unaudited
2023
2022
£
£
000's
000's
Cost
At 1 January 2023
              5
5
Additions
              -
-
At 31 December 2023
              5
5
Accumulated depreciation
At 1 January 2023
                 (2)
-
Depreciation charged in the year
            (1)
(2)
At 31 December 2023
            (3)
(2)
Carrying amount
At 31 December 2023
             2
3
The Company did not incur any depreciation expenses during the years ended 31 December 2023 and 31 December 2022.
37
Right of use asset
The Group has operating leases for offices and considers the lease term to establish the right-of-use assets and lease liabilities. The Group's lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group's treasury function.
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£ £
000's
000's
000's
Right of use asset
Balance brought forward
        26
             26
              41
41
Additions
-
-
8
-
Depreciation charge for the year
(16)
(16)
            (23)
(15)
Balance at year end
       10
             10
              26
26
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Amounts recognised in profit and loss
Interest on lease liabilities
-
             -
1
1
Depreciation of right of use assets
16
            16
             23
15
Total profit or loss charges
16
            16
             24
16
Amounts recognised in statement of
cashflows
Payments of lease liabilities
(16)
          (16)
             (23)
(15)
Total cash outflow for leases
(16)
          (16)
(23)
(15)
31
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
38
Right of use asset (continued)
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Lease liability
Current
10
             10
              23
15
Non-current
-
              -
             11
11
Total lease liabilities
10
             10
             34
26
Maturity analysis of lease liabilities is a follows:
Year 1
10
             10
              23
15
Year 2
-
-
            11
11
Total undiscounted lease liabilities at
year end
10
             10
            34
26
39
Investments in subsidiary undertakings
The Company has control in the financial and operating policy decisions of other entities during the year. Investment in Subsidiary's are recognised in the statement of financial position at cost less accumulated impairment. The balance of investments within the Company represents the 100% share holdings of MIR MuchBetter EDE S.L., UAB MIR Lithuania, MIR MuchBetter Australia PTY Ltd during the year. The principal subsidiaries of the Company are as follows:
Name of subsidiary
Registered
Shareholding
Company
Company
office
2023
2022
£
£
000's
000's
UAB MIR Lithuania
Lithuania
100%
2
2
MIR-MuchBetter EDE S.L
Spain
100%
249
316
MIR MuchBetter Australia PTY Ltd
Australia
100%
58
-
309
318
During the reporting period, the Company has made a cash investment into a new subsidiary in Australia to enhance its operational capabilities, expand market reach, and diversify its product portfolio. This investment was executed in alignment with the Company's strategic objectives to foster growth and improve shareholder value.
During the financial year ended 31 December 2023, the Company impaired its investment in its wholly owned subsidiary MIR-MuchBetter EDE S.L. The Company initiated proceedings to dissolve the subsidiary in November 2023. The Company finalised dissolution proceedings in April 2024, the Company received a partial refund of its investment on 30th April 2024, leaving an amount of EUR 58,578 (GBP 50,073) unrecovered. The subsidiary was dissolved as part of the Company's decision to streamline its operations.
32
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
40
Investments in subsidiary undertakings (continued)
Company
Company
2023
2022
£
£
Investment in subsidiary
000's
000's
Balance as at 1 January
318
318
Acquisition of investment in subsidiary undertaking
58
-
Net foreign exchange loss on impairment
(17)
-
Impairment loss
(50)
-
Balance as at 31 December
309
318
41
Trade and other receivables
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Amounts falling due within one year:
Trade receivables
               24
24
                  9
9
Other receivables
3,333
         3,333
         17,710
17,535
Prepayments and accrued income
            225
              225
             705
446
Amounts owed from group undertakings (note 20)
9,736
11,155
2,470
2,616
        13,318
        14,737
         20,894
20,606
Other receivables
              -
               -
-
1
Total trade and other receivables
13,318
14,737
20,894
20,607
The carrying value of trade and other receivables are classified at amortised cost approximates fair value. Amounts owed from group undertakings are unsecured, interest free and repayable upon demand.
42
Cash and cash equivalents
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Cash at bank
        4,141
3,829
18,146
16,219
Cash held in segregated accounts
      16,150
16,150
8,506
8,506
Total cash and cash equivalents
20,291
        19,979
26,652
24,725
Cash held in segregated accounts comprises cash held in segregated bank accounts on behalf of end users. These bank accounts are segregated from operational funds in line with the requirements of the safeguarding provisions of the Electronic Money Regulations 2011 and Payment Services Regulations 2017 issued by the Financial Conduct authority (“FCA”) (together, the ‘Regulations).
33
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
43
Cash and cash equivalents (continued)
Under the UK Regulations, the Company is required to hold qualifying liquid assets in segregated bank accounts at least equal to the amount of electronic money (e-money) that has been issued to the Company's customers. The safeguarding process follows the recommendations of the last safeguarding audit undertaken in June 2023, and the corresponding Company's safeguarding policy.
44
Trade and other payables
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Trade payables
       243
        223
      108
37
Amounts owed to group undertakings
(note 19)
3,415
12,753
1,979
24,095
Payable to clients and merchants and
other payables
27,447
19,718
      42,980
19,030
Accruals and deferred income
          98
          73
336
318
Total trade and other payables
31,203
32,767
45,403
43,480
The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value. Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
Included under payables to clients and merchants and other payables, are other payables of £4,935,836 (2022: £ nil) due to Quickpay Limited, a company outside the Group that is controlled by one of the directors of the company. The payables are unsecured, interest free and repayable on demand.
45
Share capital
Group and company
2023
2022
£
£
000's
000's
Ordinary share capital
2,000,000 ordinary shares of £1
  2,000
2,000
Ordinary shares
Holders of these allotted, called up and fully paid shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company.
46
Financial instruments
Measurement of fair value
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Directors assess the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of the Standards, including the level in the fair value hierarchy in which the valuations should be classified.
34
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
47
Financial instruments (continued)
Measurement of fair value (continued)
When measuring the fair value of an asset or a liability, 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 as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
The Group has not disclosed the fair values of financial instruments such as short-term trade receivables and payables, because their carrying amounts are a reasonable approximation of fair value.
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Carrying
Carrying
Carrying
Carrying
Value
Value
Value
Value
Financial assets not
measured at fair value
Trade and other receivables
  3,357
3,357
17,719
17,545
Cash and cash equivalents
20,291
19,979
26,652
24,725
Amounts owed from group undertakings
9,736
     11,155
2,470
2,616
33,384
34,491
46,841
44,886
Financial liabilities not
measured at fair value
Trade payables
243
223
108
37
Payable to clients and merchants and
other payables
27,447
19,718
42,980
19,030
Amounts owed to group undertakings
3,415
   12,753
1,979
24,095
31,105
32,694
45,067
43,162
Due to their short-term nature, the carrying value of cash and cash equivalents, other receivables, and trade and other payables approximates their fair value.
35
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
48
Financial instruments (continued)
Measurement of fair value (continued)
The Group is exposed through its operations to the following financial risks:
Credit risk
Market risk
Liquidity risk
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Company's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
Financial instruments by category
000's
000's
000's
Amortised
cost
Amortised
cost
Amortised
cost
Amortised
cost
Financial assets
Other receivables
15
13,318
14,737
20,894
20,606
Cash and cash equivalents
16
20,291
         19,979
         26,652
         24,725
33,609
         34,716
         47,546
         45,331
Financial liabilities
Trade and other payables
17
31,203
32,767
         45,403
         43,480
General objectives, policies and processes
The Board has overall responsibility for the determination of the Company's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Company's finance function. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company's competitiveness and flexibility. Further details regarding these policies are set out below:
Credit risk
Credit risk is the risk of financial loss to the Company if a consumer or merchant counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company's cash and cash equivalents and other receivables.
The cash and cash equivalents and restricted cash in respect of customer accounts are deposited with different banking partners with a variety of credit ratings and credit exposure are regularly monitored and managed by the Company's safeguarding and treasury function. Management considers low risk of losses from these financial instruments.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted.
The carrying amounts of trade and other receivables and cash and cash equivalents represents the Company's maximum exposure to credit risk.
36
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
49
Financial instruments (continued)
Trade and other receivable
Trade and other receivables comprise of receivables held on with payment service providers. These receivables are closely monitored on a regular basis and are not considered on a normal basis to arise in any material credit risk.
During the financial year ended 31 December 2023, the Company identified that the outstanding balance receivable from the payment service providers Sofort and PIX amounting £0.33 million in total was no longer collectible. The write-off was necessitated due to the lack of recoverability to retrieve the funds. After thorough investigation, it was determined that the amount would not be settled. The write-off has been recognized in accordance with IFRS 9 as bad debt.
Impairment loss on other receivables arising from contracts with payment service providers was as follows:
Company and Group
2023
2022
£
£
000's
000's
Other irrecoverable receivable (bad debt)
(334)
(1,982)
(334)
(1,982)
Credit quality analysis
The following table sets out information about the credit quality of Other Receivables, which comprise receivables held with payment service providers. The amounts of the financial assets in the table represent gross carrying amounts.
Explanations of the terms ‘Stage 1', ‘Stage 2' and ‘Stage 3' are included in note 2. The Company and the Group do not consider a significant credit risk on its Stage 1 assigned receivables.
Group
At 31 December 2023
Stage 1
Stage 2
Stage 3
Total
Amounts in £'000s
Other receivables
13,318
-
-
13,318
Loss allowance
-
-
-
-
Carrying amount
13,318
-
-
13,318
Company
At 31 December 2023
Stage 1
Stage 2
Stage 3
Total
Amounts in £'000s
Other receivables
14,737
-
-
14,737
Loss allowance
-
-
-
-
Carrying amount
14,737
-
-
14,737
37
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
50
Financial instruments (continued)
Credit quality analysis (continued)
Group - unaudited
At 31 December 2022
Stage 1
Stage 2
Stage 3
Total
Amounts in £'000s
Other receivables
11,642
-
11,234
22,876
Loss allowance
-
-
(1,982)
(1,982)
Carrying amount
11,642
-
9,252
20,894
Company
At 31 December 2022
Stage 1
Stage 2
Stage 3
Total
Amounts in £'000s
Other receivables
11,316
-
11,272
22,588
Loss allowance
-
-
(1,982)
(1,982)
Carrying amount
11,316
-
9,290
20,606
Financial instruments Geographical region
Having a significant number of payment service providers which are geographically widespread helps mitigate the exposure to concentration risk. Whilst this does not mitigate risk in its entirety, having a diverse range of payment service providers helps mitigate reliance on one main provider.
Management considers the factors that may influence the credit risk of its supplier base, including the default risks associated with the industry and country in which the suppliers operate.
The exposure to credit risk for other receivables by geographic region was as follows:
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Credit risk by geographic region
European Union
442
442
2,002
2,001
UK and Rest of World
12,876
      14,295
18,892
18,605
13,318
        14,737
20,894
20,606
38
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
51
Financial instruments (continued)
Credit quality analysis (continued)
As at 31 December 2023, the exposure to credit risk for other receivables and contract assets by type of counter party was a follows:
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Credit risk by type of counter party
End-user customers
170
196
597
439
Tax authorities
53
              27
23
20
Payment service providers
3,357
3,357
17,719
17,453
Group undertakings
9,736
11,155
2,470
2,616
Other
2
                2
85
78
13,318
14,737
20,894
20,606
The following table provides information on the ageing of the trade receivables as at 31 December 2023:
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Current (not past due)
5
5
-
-
1 – 30 days past due
17
17
-
-
31 – 60 days past due
-
-
9
9
61 – 90 days past due
-
-
-
-
More than 90 days past due
2
2
-
-
24
  24
9
9
Market risk
Market risk is the risk that changes in market prices – e.g. foreign exchange rates and interest rates – will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Group's primary exposure to market risk is in the form of foreign exchange risk explained below.
Foreign exchange risk
The Group operates in various international markets and engages in transactions denominated in foreign currencies. As a result, it is exposed to currency risk due to financial assets and liabilities denominated in a currency other than the functional currency. The Group's policy is, where possible, to settle liabilities denominated in their functional currency with the cash generated from their own operations in that currency. The Group manages the exposure to currency risk by limiting the use of other currencies for operating expenses, wherever possible, thereby minimising the realised and unrealised foreign exchange gain or loss. The Group's exposure to foreign currency at the reporting date was as follows:
39
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
52
Financial instruments (continued)
Foreign exchange risk (continued)
Group
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net foreign currency financial assets/liabilities
2023
2023
2023
2023
£
£
£
£
000's
000's
000's
000's
AED
-
-
24
24
AUD
               57
              -
          -
                        57
BRL
               -
        182
          (120)
                     62
CAD
        807
          3,156
     (2,155)
                     1,808
CHF
               -
           -
         (3)
                       (3)
EUR
        2,953
1,605
   (18,243)
(13,685)
GBP
        16,282
        7,117
(2,224)
21,175
JPY
               -
59
   (87)
                     (28)
NOK
               -
           -
(4)
                   (4)
PLN
               -
        233
     (419)
                    (186)
RUB
-
-
(179)
(179)
USD
192
741
(7,695)
(6,762)
20,291
13,093
(31,105)
2,279
Company
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net foreign currency financial assets/liabilities
2023
2023
2023
2023
£
£
£
£
000's
000's
000's
000's
AED
-
-
24
24
AUD
               -
              -
          -
                        -
BRL
               -
        114
          (120)
                     (6)
CAD
        807
          3,166
     (2,155)
                     1,818
CHF
               -
           -
         (3)
                       (3)
EUR
        2,698
2,324
   (19,540)
(14,518)
GBP
        16,282
        7,867
(2,517)
21,632
JPY
               -
59
   (87)
                     (28)
NOK
               -
           -
(4)
                   (4)
PLN
               -
        233
     (419)
                    (186)
RUB
-
-
(179)
(179)
USD
192
749
(7,694)
(6,753)
19,979
14,512
(32,694)
1,797
40
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
53
Financial instruments (continued)
Foreign exchange risk (continued)
Group
Unaudited
Unaudited
Unaudited
Unaudited
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net foreign currency financial assets/liabilities
2022
2022
2022
2022
£
£
£
£
000's
000's
000's
000's
AUD
-
14
-
14
BRL
-
120
(6)
114
CAD
491
919
(1,370)
40
CHF
-
65
(30)
35
DKK
-
3
-
3
EUR
12,230
14,423
(9,476)
17,177
GBP
13,406
2,786
(25,664)
(9,472)
JPY
-
127
(100)
27
NOK
-
-
(4)
(4)
PLN
-
754
(143)
611
RUB
-
-
(310)
(310)
SEK
-
13
-
13
USD
525
965
(7,964)
(6,474)
26,652
20,189
(45,067)
1,774
Company
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net foreign currency financial assets/liabilities
2022
2022
2022
2022
£
£
£
£
000's
000's
000's
000's
AUD
-
14
-
14
BRL
-
120
(6)
114
CAD
491
919
(1,370)
40
CHF
-
65
(30)
35
DKK
-
3
-
3
EUR
10,303
14,425
(7,571)
17,157
GBP
13,406
2,756
(25,664)
(9,502)
JPY
-
127
(100)
27
NOK
-
-
(4)
(4)
PLN
-
754
(143)
611
RUB
-
-
(310)
(310)
SEK
-
13
-
13
USD
525
965
(7,964)
(6,474)
24,725
20,161
(43,162)
1,724
41
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
54
Financial instruments (continued)
Foreign exchange risk (continued)
The following significant exchange rates have been applied:
Year end
GBP 1 = 1
Average rate
spot rate
AED
0.215088
0.213858
AUD
0.529018
0.534437
BRL
0.161264
0.161825
CAD
0.589074
0.593014
CHF
0.913509
0.933496
DKK
0.115609
0.116315
EUR
0.861985
0.866992
INR
0.009489
0.009441
JPY
0.005492
0.005570
NOK
0.075045
0.076538
PLN
0.199010
0.199505
RUB
0.008677
0.008788
SEK
0.077074
0.077911
USD
0.789909
0.785392
ZAR
0.042423
0.042916
As at 31 December 2023, had Pound Sterling strengthened by 10% in relation to all the other currencies, with all other variables held constant, the net assets of the Group would have been decreased in both profit and equity by £3,033 (2022: £2,041). Conversely, a 10% decrease in the value of the functional currency would lead to an increase in revenue and expenses when translated into the functional currency by £3,688 (2022: £2,041).
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its financial obligations as they fall due. Management controls and monitors the Group's cash flow on a regular basis, including forecasting future cash flows. The Group's objective to managing liquidity is to ensure that, as far as possible, it will always have sufficient liquidity to meet the liabilities when they become due.
The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments using the year-end spot rate for all items denominated in a foreign currency.
Group
Less
Carrying amount
On demand
than 1 year
1 to 5 years
£
£
£
£
000's
000's
000's
000's
Payable to clients and merchants and other payables
27,447
27,447
    -
-
Trade payables
243
  -
   243
  -
Amounts owed to group undertakings
3,415
3,415
-
-
As at 31 December 2023
31,105
30,862
243
-
42
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
55
Financial instruments (continued)
Liquidity risk (continued)
Company
Less
Carrying amount
On demand
than 1 year
1 to 5 years
£
£
£
£
000's
000's
000's
000's
Payable to clients and merchants and other payables
19,718
19,718
    -
-
Trade payables
223
  -
   223
  -
Amounts owed to group undertakings
12,753
12,753
-
-
As at 31 December 2023
32,694
  32,471
223
-
Group - unaudited
Less
Carrying amount
On demand
than 1 year
1 to 5 years
£
£
£
£
000's
000's
000's
000's
Payable to clients and merchants and other payables
42,980
42,980
-
-
Trade payables
108
  -
108
  -
Loan from group undertakings
1,979
1,979
-
-
As at 31 December 2022
45,067
  44,959
108
-
Company
Less
Carrying amount
On demand
than 1 year
1 to 5 years
£
£
£
£
000's
000's
000's
000's
Payable to clients and merchants and other payables
19,030
19,030
-
-
Trade payables
37
  -
37
  -
Loan from group undertakings
24,095
24,095
-
-
As at 31 December 2022
43,162
  43,125
37
-
At year ending 31 December 2023 the Company holds cash and cash equivalents and a supplier receivable totalling £23.3 million (2022: £42.3 million), while the Group holds £23.7m (2022: £44.4m). Given the Company's and Group's available liquid resources as compared to the timing of the payments of liabilities, management assesses the Company's and Group's liquidity risk to be moderate.
Capital disclosure
The Group's capital structure is comprised of share capital, retained earnings and revaluation reserve. The Group's objective when managing its capital structure is to finance internally generated growth while safeguarding the Group's ability to continue as a going concern so it can provide returns to shareholders and benefits to other stakeholders. To manage its capital structure the Group may adjust capital spending and issue or acquire short-term financing.
43
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
56
Related party transactions
In accordance with International Financial Reporting Standards (IFRS), the Group and the Company discloses transactions with related parties. Related parties include the Company's subsidiaries, associates, joint ventures, key management personnel, and their close family members, as well as entities controlled or significantly influenced by such individuals.
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Balances receivable at the year end:
Rtekk Holdings Limited
7,224
7,031
2,168
2,279
MIR Canada Financial Ltd
2,512
2,512
302
302
MIR MuchBetter EDE S.L.
-
-
-
31
MIR MuchBetter Australia Pty Ltd
-
4
-
4
UAB MIR Lithuania
-
1,608
-
-
Amounts owed from group undertakings
9,736
11,155
        2,470
        2,616
Balances payable at the year end:
Rtekk Holdings Limited
2,078
1,166
1,979
-
MIR Canada Ltd
1,337
1,338
-
-
UAB MIR Lithuania
-
10,249
-
24,095
Amounts owed to group undertakings
        3,415
        12,753
           1,979
           24,095
The loans to and from subsidiary undertakings are unsecured, interest free and repayable on demand.
The Company also has other payables of £4,935,836 (2022: nil) due to Quickpay Limited, a company outside the Group that is controlled by one of the directors of the Company.
Transactions with related parties
The Company's revenue includes a management recharge to its parent of £3,130,000 (2022: £859,000) for the year ended 31 December 2023. The Group's expenses include recharges from the Company's parent of £5,399,000 (2022: £9,428,000).
Controlling party
At the reporting date the Company's immediate parent is Rtekk Holdings Limited, a company incorporated in the Isle of Man. The Company's ultimate controlling party is Manatee Holdings Limited incorporated in the Cayman Islands with the registered office of Century Yard, Cricket Square, PO Box 1111, Grand Cayman, KY1-1102, Cayman Islands.
44
MIR LIMITED UK LTD
YEAR ENDED 31 DECEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
___________________________________________________________________________
57
Cash generated from operations
Unaudited
Group
Company
Group
Company
2023
2023
2022
2022
£
£
£
£
000's
000's
000's
000's
Profit before taxation for the year
      312
115
106
111
Adjustments for:
Depreciation of property and equipment
12
1
-
2
-
Depreciation of right of use assets
13
16
              16
23
15
Impairment loss on investment in subsidiary undertakings
-
(50)
-
-
Finance cost
9
-
                -
-
5
Change in other receivables
7,576
5,869
(758)
(785)
Change in trade and other payables
(14,199)
(10,713)
953
6,830
Cash from operations
(6,294)
(4,763)
326
6,176
58
Events after reporting date
Adjusting events
In 2020, the Company invested an amount of EUR 350,000 (£315,730) into the establishment of its subsidiary MIR MuchBetter EDE S.L. The Company initiated proceedings to dissolve the subsidiary in November 2023. The Company finalised dissolution proceedings in April 2024 and received a partial refund of its investment on 30th April 2024, leaving an amount of EUR 58,578 (£50,073) unrecovered.
As this event provides further evidence of conditions that existed at the reporting date, the parent company has recognized an impairment for the unrecoverable amount in the current financial statements. This impairment reflects the permanent loss of these funds, which are no longer recoverable.
Management has reviewed the situation, and no additional recoveries are expected beyond the refunded amount.
45
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