Contents of the Financial Statements

for the Period Ended 31 December 2022

Directors' report period ended 31 December 2022

The directors present their report with the financial statements of the company for the period ended 31 December 2022

Directors

The directors shown below have held office during the whole of the period from
1 January 2022 to 31 December 2022

The above report has been prepared in accordance with the special provisions in part 15 of the Companies Act 2006

This report was approved by the board of directors on
29 September 2023

And signed on behalf of the board by:
Name: Doron Rosenblum
Status: Director

Profit And Loss Account

for the Period Ended 31 December 2022

Balance sheet

As at 31 December 2022

The notes form part of these financial statements

Balance sheet statements

For the year ending 31 December 2022 the company was entitled to exemption under section 477 of the Companies Act 2006 relating to small companies.

The members have not required the company to obtain an audit in accordance with section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These accounts have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The notes form part of these financial statements

Notes to the Financial Statements

for the Period Ended 31 December 2022

• 1. Accounting policies

  Basis of measurement and preparation

  These financial statements have been prepared in accordance with the provisions of Financial Reporting Standard 101

  Turnover policy

  Revenues earned by the Company are recognised on the following bases:Interchange and Card IncomeRevenue is recognised when the right to receive payment is established. Interchange and Card Income represents transactional related income including interchange fees receivable from the Company’s card issuing Schemes, fair usage fees for cash withdrawals as per the customer’s club, and foreign exchange fee charged on foreign currency transactions and is recognised at the time of the transaction settlement or completed basis.

  Tangible fixed assets depreciation policy

  Property and equipment are stated at cost, less accumulated depreciation, and accumulated impairment losses, if any. These assets are depreciated using the straight-line method over their estimated useful life as per the below:Computers, software and peripheral equipment – three years.Furniture and office equipment – fourteen yearsRight-of-use assets Right-of-use assets are depreciated by the straight-line method over the term of the lease (including reasonably certain options periods) or the estimated useful life of the improvements, whichever is shorterThe useful life, depreciation method and residual value of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate.

  Intangible fixed assets amortisation policy

  Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.Research and development costsResearch costs are expensed as incurred. Development expenditures on an individual project arerecognised as an intangible asset when the Company can demonstrate:The technical feasibility of completing the intangible asset so that the asset will be available for use or saleIts intention to complete and its ability and intention to use or sell the assetHow the asset will generate future economic benefitsThe availability of resources to complete the assetThe ability to measure reliably the expenditure during developmentFollowing initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete, and the asset is available for use. It is amortised over the period of expected future benefit. During the period of development, the asset is tested for impairment annually.These assets are amortized using the straight-line method over their estimated useful life as per the below:Development Cost – three years;

  Other accounting policies

  2.1 Basis of presentation of the financial statementsThe Company’s financial statements have been prepared on a historical cost basis as modified by the revaluation of assets and liabilities held at fair value based on the Company’s accounting policies.These financial statements have been prepared in accordance with UK adopted International Accounting Standards.The preparation of the financial statements requires management to make estimates and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities, expenses and income. These estimates and underlying assumptions are reviewed regularly. Changes in accounting estimates are reported in the period of the change in estimate.In the Directors’ view, other than the estimate for the capital reserve for share-based payments (refer to note 14.2), there are no other areas of significant judgment or estimate in the current or prior periods.2.2 Functional and foreign currenciesThe financial statements are presented in British pound sterling, which is the Company’s functional currency. The functional currency is the currency that best reflects the economic environment in which the Company operates and conducts its transactions and is used to measure its financial position and operating results.Transactions denominated in foreign currency (other than the functional currency) are recorded on initial recognition at the exchange rate at the date of the transactions. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date.Non-monetary assets and liabilities measured at cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when fair value was determined. The USDGBP rate used as at December 31, 2022 was 1.20 (as at December 31, 2021 was 1.35).2.3 Current versus noncurrent classificationThe entity presents assets and liabilities in the statement of financial position based on currentnon-current classification. An asset is current when it is:Expected to be realised or intended to be sold or consumed in the normal operating cycleHeld primarily for the purpose of tradingExpected to be realised within twelve months after the reporting periodOrCash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting periodAll other assets are classified as noncurrent.A liability is current when:It is expected to be settled in the normal operating cycleIt is held primarily for the purpose of tradingIt is due to be settled within twelve months after the reporting periodOrThere is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting periodThe terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.The entity classifies all other liabilities as non-current.Deferred tax assets and liabilities are classified as non-current assets and liabilities.2.5 Cash and cash equivalentsCash and cash equivalents are considered as highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of acquisition.2.8 InventoriesInventories are eToro Money cards held for distribution and are stated at the lower of cost adjusted for the loss of service potential (if applicable) and replacement cost.Cost is determined using the cost to produce, including taxes, duties, transport, and handling directly attributable to bringing the inventory to its present location and condition. The cost is calculated using the FIFO (first in, first out) methodInventories are recognised as an expense in the period in which the related cards are issued.2.9 ProvisionsProvisions are liabilities involving uncertainties in the amount or timing of payments. Provisions are recognised if there is a present obligation to transfer economic benefits such as cash flows as a result of past events and if a reliable estimate can be made at the balance sheet date. Provisions are estimated based on all relevant factors and information existing at the balance sheet date and are typically discounted at the risk-free rate.2.10 Sharebased payment transactionseToro Group Limited, the Company’s parent company, issues share options to employees and directors of the Company and accordingly, the Company recognises the expense in its financial statements in accordance with the provisions of IFRS 2, ShareBased Payments.The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at grant date. The fair value is determined using the Black-Scholes option pricing model, taking into account, the terms and conditions upon which the instruments were granted.The cost of equity-settled transactions is recognised together with a corresponding increase in capital reserve, over the period during which the relevant employees and directors become entitled to the award (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest.2.11 Current income and deferred taxTax is recognised in profit or loss, except to the extent that it relates to items recognised directly in other comprehensive income or equity, in which case, it is also recognised directly in other comprehensive income or equity. The current income tax charge is calculated on the basis of the tax laws enacted at the statement of financial position date in countries where the Company operates and has a taxable presence.Deferred income tax is recognised in full, using the liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority and where there is an intention to settle the balances on a net basis.2.12 Adoption and impact of new accounting standards and interpretationsDuring the current year, the Company adopted all the new and revised UK adopted InternationalAccounting Standards that were relevant to its operation and were effective for periods beginning on 1 January 2022.2.13 Assessment of the impact regarding future changes to accounting standardsNo new major standards or amendments were applicable for the period ended 31 December 2022.There were however several narrow scope amendments to IFRS accounting standards for periods beginning on or after 1 January 2022. The narrow scope amendments are however not applicable to the Company.2.14 Financial assetsThe Company classifies its financial assets as loans and receivables and comprise cash and cash equivalents, amounts due from related parties and other receivables. The Company applies IFRS 9 to the classification and recognition of its financial assets. These assets are initially recognised at their fair value being the costs to complete the transaction. Subsequent to initial recognition, financial assets are recognised at amortised cost using the effective interest rate method, less any impairment losses.Under IFRS 9, impairment of a financial asset measured at amortised cost is calculated using the expected credit loss (ECL) model. The ECL allowance is based on the credit losses expected to arise over the life of the asset. Subsequent recoveries of amounts previously written off are credited in the statement of comprehensive income.2.15 Financial liabilitiesThe Company classifies its financial liabilities as either financial liabilities at amortised cost or financial liabilities at fair value through profit or loss. Financial liabilities at amortised cost are comprised of accounts payable, accrued expenses and amounts due to related parties. Financial liabilities at fair value through profit and loss include five years bonus recorded under non-current accounts payable and accrued expenses.Subsequent to initial recognition, financial liabilities at amortised cost are measured using the effective interest rate method, with gains and losses recognised in finance income and expenses respectively.Changes in the value of financial liabilities at fair value are recorded in the statement of comprehensive income, within administrative and operating expenses.Financial liabilities are derecognised when the obligation under the liability is discharged, cancelled or expires.2.16 LeasesThe Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.Company as a lesseeThe Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities representing obligations to make lease payments and right-of-use assets representing the right to use the underlying assets. In measuring the lease liability, the Company has elected to separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in a single contract.i) Right-of-use assetsThe company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assetsIf ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36. ii) Lease liabilitiesAt the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.The lease payments also include the exercise price of a purchase option reasonably certain to beexercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate.In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

Notes to the Financial Statements

for the Period Ended 31 December 2022

• 2. Employees

  	2022	2021
  Average number of employees during the period	10	10