Annual Report &Financial Statements
For the year ended
31 December 2021

One app,all thingsmoney

Contents

03 Strategic report
34

Board of Directors

36 Directors’ Report
44

Independent auditor’s report to the membersof Revolut Ltd

48

Financial statements

57

Notes to the consolidated financial statements

127 Company Information

Annual Report & Financial Statements 2021

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Strategic report

2021 Highlights$800m
raised in Series
E funding round

Reached£7.4bnin customer liabilities

Our customers donated£6.5m

through Revolut’s donations platform

5m

new retail customers
added

50%

increase in weekly
active users

75%

increase in numberof users paying
subscriptions£636m
in Revenue£26m
in Net Profit

Annual Report & Financial Statements 2021

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Strategic Report

Chairman’s statement
In 2021 we made considerable progress in meeting our ambitious goals, notably, hitting our first full year of
profitability. This is an important milestone for Revolut and proves the strength and success of the business modelthat we’ve been building over the last seven years.
We continued to focus relentlessly on improving our offering to customers through innovative new products,
excellent service and highly competitive pricing, with particularly strong growth in the UK, Ireland, the European
Economic Area (EEA) and the US.
Financial performance
When profitability often plays second fiddle to growth for FinTechs,
we showed that a company as young as Revolut can continue toaccelerate its growth while also being profitable. Our Revenue
increased nearly threefold, resulting in £59.1 million profit fromoperations for 2021. Such strong financial performance andprofitability demonstrates Revolut efficiently moving from the‘start-up’ that is only focused on growth, to the ‘scale-up’ looking togrow profitably.
In July 2021, we raised $800 million in Series E funding, valuing
the business at $33 billion. We were also pleased to gain theconfidence of a number of new major investors. The Series E
funding demonstrates investors’ confidence that we can deliver a
best-in-class digital banking experience for customers around theworld. The investment strengthens our ability to continue to build
products that exceed customers’ everyday financial needs andexpectations, continuing to drive fast growth, particularly in the US
and international markets.

Board and governanceWe further strengthened the Board in August 2021 with theappointment of John Sievwright as a Non-Executive Director andChair of the Board Risk & Compliance Committee.

CHAIRMAN

Martin Gilbert“When profitability often
plays second fiddle to growthfor FinTechs, we showedthat a company as young
as Revolut can continue toaccelerate its growth while
also being profitable.”John brings a wealth of experience in both Executive and NonExecutive roles within the financial services sector. He joined
us following a 20 year career with Merrill Lynch holding global
leadership positions, latterly Chief Operating Officer - International.
John has been a Director of Burford Capital (a leading global
finance and asset management firm) since May 2020 and serves
on its Audit and Compensation Committees, having previously
been a senior independent director and Chairman of the Audit andRisk Committee at ICAP plc (later NEX Group), an inter-broker
dealer focused on electronic financial markets and post-tradebusiness for financial institutions.
We welcome John’s deep knowledge, passion and experience of thefinancial services industry. We continue to develop our approachto governance across the organisation. Our Board and committee
structures continue to mature, supported by our Global Corporate
Governance Framework. The Board is committed to ensuring that
Revolut continues to develop and embed governance best practiceacross all of its legal entities.

Annual Report & Financial Statements 2021

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Chairman’s statement

OutlookAs we emerged from the global pandemic, and life returned
to normal - or at least to the new normal - we were all closely
watching to see how society had changed for good.

It’s difficult to think of a company as well-positioned for successas we are. Revolut’s adaptability, ambition, innovation, and pace of
product roll-out means that we are prepared to do amazing things.

There has been a huge evolution in consumer behaviours includingin the new world of hybrid or remote work and the accelerated
trend away from cash to contactless and online payments, andmore recently with the rising cost of living and customers’ efforts
to make their money work harder. Many people are keenly watching
the FinTech sector to see which companies have adapted.

Annual Report & Financial Statements 2021

Martin Gilbert
Chair
27 February 2023

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Chief Executive
Officer’s review
2021 was a pivotal point in Revolut’s journey - a year marked by three key themes: our business model proving its
profitability through revenue growth, expanding our product range and continued global expansion.
Landmark achievements in profitability, product and expansion in 2021 saw our transition from a high-growth
FinTech to an established leader in the new era of banking.
But before anything else, I need to acknowledge and thank ourpeople - our dream team - that enable Revolut to achieve its goals.
We would not be where we are today without the talent, experienceand intellect of our hard-working team. Our rapid growth,
expansion and rate of innovation means that every Revoluter rises
to new challenges every day. I and the executive team thank themfor their incredible contribution.

Profitability
On the first theme, I am delighted to report that we were profitable
for the full year of 2021 (net profit 2021: £26.3 million). This is a
key metric for fast-growth start-ups in the FinTech and banking
sectors, and shows that our business model works and is resilient.
Our revenue nearly tripled, from £220 million in 2020 to over £636
million in 2021 and our Gross Margin improved from 33% in 2020 tonearly 70% in 2021. This strong revenue growth came from acrossall business lines including Payments, Revolut Business and Wealth& Trading, proving our diversified model, and was a significant
factor in us becoming profitable.
Our profitability in 2021 was despite the economy suffering asignificant prolonged shock from global lockdowns, continued
travel bans and COVID-19 effects. But at the same time, theaccelerated shift to digital services and remote working boosted
our number of customers and the amount that they used our app.

Annual Report & Financial Statements 2021

CHIEF EXECUTIVE OFFICER

Nik Storonsky“The accelerated shift todigital services and remote
working boosted our numberof customers and the amountthat they used our app.”

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Chief Executive Officer’s review

Expanding our product range

Global expansion

Secondly, we have continued to grow our product portfolio withanother strong year of innovative product launches.

And thirdly, in our quest to become a global financial super app,we have continued to grow our international footprint - with morepresence and customers in the countries we’re already in, and new
countries too.

We entered the travel vertical with Stays, enabling customers tobenefit from up to 10% cashback on bookings at over 750,000
hotels and locations. We provided greater choice in how and whenpeople are paid with On-Demand Pay, which allows customers towithdraw up to half of their earned salary up to a month before
their scheduled payday.

We also increased both deposit and electronic money (e-money)
balances and transaction sizes. We have seen rapid growth incustomer engagement and satisfaction, with higher monthly
and daily active users. As our customers’ trust and confidence in
Revolut continues to grow, they are weaving us even more into thefabric of their financial lives.

Revolut’s Wealth & Trading platform, where customers can securely
trade equities and crypto assets, has continued to grow too. In
response to customer demand, we strengthened considerably our
crypto offering. Customers saw a significant rise in the number oftokens available to buy or sell. At the start of 2021, 10 tokens wereavailable. This increased to 60 cryptocurrencies by the end of theyear. Customers can view real-time price charts and market data
to show current rates and historical performance, and can set pricealerts at their chosen thresholds. As we expand our crypto offering,
this is increasingly within a robust regulatory framework, which
we welcome.

Despite the FinTech sector taking a knock in recent months withfunding down rounds and some job cuts, Revolut continues to growand to hire. Our Series E funding in July 2021 is a significant capital
investment that positions us well to withstand financial headwinds.
We rolled out banking services to 18 European countries in 2021
and closed the year with almost two million customers signed
up to Revolut Bank UAB, more than ten times the number theprevious year.
We expanded our footprint in the US where our app meets theneeds of the modern US consumer with a low cost US/Mexico
remittance corridor and fee-free pricing on ATM withdrawals,
international transfers, Revolut <18 (formerly Junior) subscriptions
and crypto trading.

The number of Revolut Business customers continued to grow withbusinesses from family-owned SMEs to technology decacorns. In
2021 we launched multiple new services for businesses, including
enabling online card payments acceptance for businesses throughour acquiring product. We also enabled WooCommerce andPrestashop plugins to accept payments from these eCommercesites and acquired Nobly, an ePOS business, to expand services tothe hospitality sector.

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Chief Executive Officer’s review

In September 2021, our US broker-dealer licence application wasapproved and in January 2022 we launched our commission-freestock trading platform in the US with more than 1,100 NASDAQand NYSE-listed securities, including more than 200 exchangetraded funds (ETFs). Revolut retail investors can see real-time
market data and charts showing current rates and historicalperformance, and can set price alerts at their chosen thresholds.

Fintech as a force for goodWe’ve been busy in other areas too - using the power of financeto be a force for good in the world. The more successful we are,the more we can make a positive difference to our customers andwithin our communities.
In March 2022 we launched a free payments services offer forrefugees fleeing Ukraine following the Russian invasion. This
service can be used to send and receive money, as well as
exchange currency. We ensured individuals displaced by theinvasion had quick and easy access to their money, as well as
waiving a number of foreign exchange and top-up fees. We havehelped more than 250,000 refugees gain access to money andpayments services, in multiple currencies, when they needed
it most. Thanks to the generosity of our customers, and in
partnership with the British Red Cross, we were also able to raiseover €10 million for the British Red Cross’s Ukraine Crisis Appeal.

We continue to receive an enthusiastic reception in other global
expansion markets.
In India we acquired Arvog Forex, a local foreign exchange
business, as part of our multi-million dollar investment into
India. We also hired seasoned individuals to lead our expansion
in India, as well as in two of our other strategic growth markets,
Mexico and Brazil. In Australia, we received authorisation to offer
securities trading and formally submitted an application to the
local prudential regulator to become an authorised deposit-taking
institution in Australia.

I look forward to continuing to grow and develop Revolut into theworld’s first financial super app.
And if you’re reading this and haven’t already downloaded Revolut,
what are you waiting for…?

Nikolay Storonsky
Chief Executive Officer & Co-founder
27 February 2023

Annual Report & Financial Statements 2021

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Chief Financial
Officer’s review
We had a strong year in 2021, growing across the board and achieving our first year of profitability.
These financial results were driven by a more than 50% expansion in our weekly active retail customer base, as wellas growth across all of our major product lines and margin expansion driven by product mix and cost control.
As the post-COVID-19 environment provided us with greatercertainty and with the added capital of our Series E $800 million
fundraising in the summer of 2021, we decided to refocus ourefforts on the growth of our customer base, expanding ourmarketing spend beyond our historical referrals channel andentering performance marketing where we saw a good returnon investment.
We expect our improved financial resilience to continue to allow
for greater and faster growth in the future. Additionally, looking
forward, we expect to be able to generate a steady income basedon the low-cost funding provided by our customer liabilities.
Keen management of our balance sheet, alongside improvements
to financial systems, processes and controls, stand as the twopriorities of the finance and treasury teams. Within the treasury
we have built teams in order to meet a bank-grade standard at
the group level and across our relevant entities. Our focus has
been to develop the infrastructure and monitoring capabilities toensure compliance with capital and liquidity requirements while
also developing a treasury management strategy and execution
capability to optimise our balance sheet.
We have made improvements to our financial controlling functionin order to continue to match and support the fast growth of thebusiness. The team is working hard to continue to develop worldclass and real-time accounting and control technology in order toprovide this support, which we expect to bear fruit for the FY22
audit cycle.

CHIEF FINANCIAL OFFICER

Mikko Salovaara“We expect our improved
financial resilience tocontinue to allow for
greater and faster growthin the future.”

Finally, the Group has for the first time produced its financial
information under International Financial Reporting Standards(IFRS). This is in line with the ambitions of the Group allowing for
more transparency and the ability to compare the Group’s results
against its peers.

Mikko Salovaara
Chief Financial Officer
27 February 2023

Annual Report & Financial Statements 2021

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Our businessmodel and strategy
Who we are
Revolut is building the world’s first global financial super app. We give people andbusinesses more control over their finances, and offer data-driven insights andpersonalisation that empower our customers to make smarter decisions about how
they spend, save or grow their money.
Revolut was established in 2015 in the UK, offering transfers and foreign exchange that are faster andcheaper than legacy banks. Seven years later, over 25 million retail customers in over 35 countries(as at November 2022) around the world now use Revolut to manage their finances across an evergrowing suite of powerful and easy-to-use products.

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Our business model and strategy

Our values
Revolut’s unique culture is built on five core values. By working to thesevalues every day, we create a fertile environment for success. Our
values define ‘the Revolut way’, and we put them into practice every
day across our organisation. They keep us on the right path, motivate
us and ensure we hire the best people. Our values are:Dream team
We are like a professional sports team. We hire, develop, and retain talent like elitesports teams train top athletes - we place them in the right spots to win.

Never settle
Revolut is for those who always strive for excellence, for those who want to become
the best in the world at what they do, for those who would never settle for less.
Revolut is making financial services 10x easier for customers.

Think deeper
Logic, reason, and common sense prevail over everything else in decision-making at
Revolut. We are open-minded, we listen, and we are always in search of the truth.

Get it done
Revoluters always push through. We don’t care for excuses - we care about results.
We believe that grit, determination, skill, smartness and courage can break throughalmost any wall.

Deliver WOW
We love building great products, we love delighting our customers, we love turning
the complexity of a chaotic world into the simplicity of a beautiful solution that truly
solves customer needs.

Our Code of Conduct
We introduced Revolut’s Group Code of Conduct which emphasises
the expectation that our employees act with integrity and in the bestinterests of our customers, colleagues and wider stakeholders.
We believe that brilliant people, working together in an honest, high-achieving
culture, are the key to delivering amazing products that delight our customers. We
know that our behaviour towards one another is critical to that success. Our Codeof Conduct sets out the principles that guide the ways we behave and the decisions
we make and ensure we act with integrity and in the best interests of our customers,
people, communities and stakeholders, at all times.

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Our history and progress2021• $800 million Series E funding• Licensed as a bank in Europe• Launched banking across 18 EEA countries (as of November 2022 live in 30 EEA countries)• Laid foundations for expansion into India, Mexico, New Zealand and Brazil• Launched Stays, a travel and accommodation booking feature• Launched On-Demand Pay early salary withdrawals• Launched first out-of-app services with Web App and Google Chrome ‘Shopper’ extension

2020• Launched Revolut Insurance• Launched in US and Japan• Launched Open Banking in UK and EEA• Launched Revolut banking services in Lithuania and Poland• Launched Merchant Acquiring for Revolut Business customers• $580 million Series D fundraising

2019
2018
2017

• First expansion to Australia and Singapore• Launched Trading - offering access to fractional shares to millions of customers• Launched Donations - partnering with international charities to support global causes• First Banking licence granted by Bank of Lithuania• Launched Revolut Metal• $250 million Series C fundraising• Launched Revolut Business• Launched Crypto Trading across EEA• Launched Revolut Premium• $66 million Series B fundraising

2016
2015

• 100,000 personal customers• $15 million Series A fundraising• Revolut founded in the UK

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Business model and strategy
Our ambition is to become a global financial super app.
By offering retail and business customers an ever-expanding range of financial services that are superior to legacy
banks in both speed and quality, we give our customers greater control over their finances. With a service that isboth data-driven and personalised, we empower customers to achieve financial independence and security throughsmarter, more informed decisions about how they spend, save or grow their money.
Our products and services

Our customers

Revolut was founded in 2015 in the UK, offering transfers andforeign exchange services that were faster and cheaper thanlegacy banks. Seven years later, millions of customers around theworld use Revolut to manage their finances across an ever-growing
suite of simple-to-use yet sophisticated products.

At the beginning of 2021 we had 11 million customers. Despiteextended COVID-19 restrictions on travel and socialising, we
continued to drive growth of daily users. Over the course of 2021,
we added more than five million retail customers (more than
15,000 per day on average) and thousands of business customers.
In 2022, we reached the milestone of 25 million retail customers.

Revolut is a virtual, app-based financial service. We offer retailcustomers e-money or bank accounts, which they use for their
daily spending and financial management. With four tiers, startingfrom our free Standard plan, customers can choose the plan
which best suits their financial lifestyle. We offer a broad rangeof financial products including - but not limited to - instantpeer-to-peer payments, low-cost foreign exchange and multicurrency cards, junior accounts, investment services for equities,
commodities and crypto assets, savings, budgeting and analytics,
donations, insurance for travel, purchase protection, and missed
event and ticket cover.

As Revolut was built to solve a customer need (high bank fees),customer-centricity is in our DNA. The customer is at the centreof everything we do. Their requests are the genesis of many of ourmajor products, their feedback has shaped how products evolve,
and their satisfaction is our ultimate objective.
During the course of 2021, our customers developed a deeper
engagement with Revolut. They put more money into their Revolut
accounts, they spent more using Revolut, and used Revolut to growtheir money, via investing, budgeting and savings vaults.

Revolut also provides business users with everything they need to
run the day-to-day finances of their organisation - with the speed
and ease they have come to know and love from our retail product.
As the retail and business ecosystems grow, we continue to add
value at the touchpoints and relationships between the two, suchas the business-employer relationship (with Early Salary and OnDemand Pay) and the business-customer relationship where weoffer rewards and discounts to Revolut customers.

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Business performance
Despite the ongoing impact of the COVID-19 pandemic, 2021 was another year of continued innovation and growthin which we made progress towards our goal of delivering the first truly global financial services super app.

Customers
Total retail customers

2020

Change16.42 million

11.27 million+46%

Product innovation

Customer growth in the year was strong. We grew from 11 million
customers globally to more than 16 million customers by yearend. The number of users engaging more deeply with Revolut
through commitment to our paid plans - Plus, Premium and Metal- increased significantly during the year. The total number ofusers on paid plans increased by 75% throughout 2021 - signalling
customers’ eagerness to access more of our features and benefits.

In 2021, we continued to rapidly deploy customer-centric products
and expanded our services in line with our customers’ growing
needs. In addition to the multiple feature and design enhancements
rolled out throughout the year, the following landmark products
were launched:
Stays: Stays builds on the travel-centric origins of Revolut, byenabling users to book hotels and accommodation in the Revolut
app and earn up to 10% cashback on their booking. In February2022, Stays was updated to enable ‘book now, pay at property’bookings, positioning Stays as a true alternative to other booking
services in the travel-tech sector.

The number of weekly active users grew by 50%. This increase,combined with the increase in average spend per user, which grewby 10%, indicates a deeper integration into our customers’ daily
spending habits and financial lives.
From a customer experience perspective, we continued to enhance
our in-app navigation and our out-of-app features, launching abrowser extension that helps users find discounts when shopping
online and quickly verifies Revolut card purchases.

On-Demand Pay: On-Demand Pay is Revolut’s new earned-wageaccess product that gives Revolut users the power to instantly
access a portion of their salary as they earn it. It is easy to
use and gives employees more control and flexibility over theirfinances. On-Demand Pay is an exciting example of the potential
and opportunity that Revolut has by offering a business productalongside a retail product. In this instance, we can add value toboth employer and consumer, as well as at other touchpoints
where businesses and customers interact.

Customer protection
Revolut has dedicated more resources to detecting and preventing
fraud, as well as educating our customers on how they can protect
themselves from scammers of all types, in accordance withregulatory requirements and industry recognised best practice.
Where our customers are at risk of being vulnerable to exploitation
by fraudsters, Revolut has introduced additional controls to alert
us to such activity, via the deployment of sophisticated machinelearning models, and to interact with the customer to break thespell of such scams occuring.

Annual Report & Financial Statements 2021

2021

Vaults with interest: In the context of a high-inflationary economy,users are increasingly diligent about where they store their savings.
As it is our mission to help people achieve financial independence
and get the most out of their money, we continue to improve ourinterest rate offering on savings vaults by teaming up with selected
partner banks. Having first launched vaults with interest in the US
in 2020, in 2021 we rolled out interest offers to customers in the
UK and Poland.

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Business performance

Expenses: In March we launched Expenses, an expense
management tool for Revolut Business users. By using Expenses,
business owners can have full visibility over their business financesand outgoings. They can receive spending notifications in realtime, set up spending limits, block and freeze company cards, andexpenses can be reviewed in-app.

Crypto2021 was the year in which crypto asset investing transitioned fromearly adopters to mainstream investors. We saw increased interest
and crypto activity in financial media, financial markets andinstitutions, and of course from our own users. During the courseof the 2021, we increased the number of tradeable tokens we offerfrom 10 to 60, offering users the opportunity to invest in a diverse
set of crypto tokens.

Alongside more control and visibility, Expenses also reduces theadministrative load of expense management: employees receive
automatic reminders to submit receipts after each transaction,
and Revolut can read the receipt and automatically attach it to
the matching expense. Expenses can also categorise expenses forease of review. Business owners can also use Revolut’s automatedbookkeeping tools and can set custom categories and tax rates.
This tool can reduce the hours accountants and finance managers
spend on a company’s books, and files can be quickly exported
as a CSV file to use on any external accounting platform orsoftware. Xero users can easily connect their profile to a Revolut
Business account allowing them to better manage their accounting
and finances.

Global expansion
As part of our vision to become a truly global financial super app,
global expansion is key. We took our first steps in 2019, expanding
our services to Australia and Singapore. We followed suit, in
2020, opening up our US and Japan operations. This has not only
widened the addressable market for our offering but also enhanced
our offering in our core markets by opening up corridors andnetwork effects with countries that are highly complementary to
our core geographies. We’re currently focusing on expanding ourservices to India, Brazil and Mexico, while strengthening our coreoffering in the jurisdictions in which we’re already live.

Revolut Shopper: To build on our out-of-app offering, we launched

United States
The US market remains one of our key strategic focuses and is apriority market for growth opportunities. It is perhaps the mostcompetitive market globally, with many major mature and local
FinTechs operating in the region with large customer bases.

a free Revolut Shopper Google Chrome extension. Once installed,
Shopper will automatically find and apply discount codes at online
stores’ checkouts. When shopping with reward partners, customers
can also receive cashback to their Revolut account, on top of any
discount codes applied by the extension, when shopping with
our partners.

In spite of these challenges, we made great headway growing ourcustomer base in the US during 2021. We also managed to growthe product offering; as noted above, we secured a broker-dealer
licence from FINRA (Q2 2021), enabling us to launch equity tradingin the US (which we subsequently launched in Q1 2022).

The Shopper extension can securely store card details using
Revolut’s single-use virtual cards, which delete card details after asingle purchase, and will auto-populate at checkout for an easier
shopping experience.

Latin America
In 2021 we started to lay the foundations for the rollout of Revolutin Latin America. The increasing penetration of digital payments,
the intricacies of the regional foreign exchange markets, the rising
attractiveness of crypto and lack of banking penetration make Latin
America a very attractive market opportunity for Revolut, and Brazil
and Mexico both stood out as clear markets for the region due to thehigh synergies with our current geographic footprint.
Over the course of the year, we incorporated Revolut Tecnologia
Brasil LTDA and Revolut de Mexico S.A. de C.V., and built teams inboth countries to be led by Glauber Mota (CEO Brazil) and Juan
Miguel Guerra (CEO Mexico) respectively.

Wealth & Trading
Our ambition is to be the safest and simplest place to trade, use
and learn about shares and cryptocurrencies. 2021 saw a numberof key accomplishments and developments in the Wealth & Trading
function of our business. In December, our application for our
MiFID licence was approved by the financial market supervisioncommittee of the Bank of Lithuania, which enables us to offer
trading services to all EEA customers.
We also received trading authorisations in Australia and Singapore,with trading services launching in Australia in February 2022 andlater in 2022 in Singapore.
In the US, our broker-dealer licence application was approved by
the Financial Industry Regulatory Authority (FINRA) in September
2021, and we subsequently launched trading services for our US
customers in January 2022.
In the UK, we launched our new Social Trading feature, whichenables users to see what other top traders are investing in.
Trading customers can use the Social Trading feature to learn fromother top stock traders and inform their own investment strategies.

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Business performance

Singapore
Throughout 2021, our Singapore customer base nearly tripled
while our daily active users more than doubled. In January 2021
we applied for a Capital Markets Services licence to enable our
Trading product in Singapore, and were awarded this licence inNovember 2021. In October 2021, we joined the Singapore FinTech
Association (SFA) and were elected Chair of its Payments Group(PG) subcommittee. Through this key industry body, continue tostrengthen industry engagement with the Monetary Authority ofSingapore regarding the Payment Services Act.

Asia-Pacific
Australia
Australia continues to be a high-growth, high-potential market for
Revolut. In 2021, we continued to strengthen our product offeringby securing the authorisation to offer a trading feature (we havesince launched trading in 2022). We also laid the foundations
for our ambition to become a bank in Australia, appointing an
Advisory Board, building out key members of the local teamincluding Head of Technology and Head of Lending, before formallysubmitting an application with the Australian Prudential Regulatory
Authority (APRA) in September 2021. We were also granted an
Australian Credit Licence from the Australian Securities Investment
Commission (ASIC) in 2022.

EuropeAfter launching Revolut Bank in Lithuania and Poland in 2020, werolled out to a total of 18 EEA countries by the end 2021. In 2022
we added additional new EEA countries taking the total to 30. In
December 2021, the European Central Bank granted Revolut afull banking licence, upgrading it from the previous specialisedbanking licence. This allowed us to complete the merger during2022 between our Payments (e-money) and Bank entities to offer
banking services to all our EEA customers. Revolut Bank UAB
also grew its credit business in Lithuania and Poland, followed bylaunches in Ireland and Romania in 2022.

India
During 2021, we started our rollout in India by establishing Revolut
Payments India Private Limited and hiring the initial team, led byParoma Chatterjee as CEO. In line with our ambitions, in February2022, Revolut announced the acquisition of Arvog Forex, a moneytransfer firm regulated by the Reserve Bank of India (RBI), as afirst step to service the Indian market. Over the course of theyear, in parallel to working on localising the product and securing
the relevant regulatory authorisations, we have started to build aTechnology and Operations hub in India. Our Indian tech entity will
also serve as a technology and operations hub for Revolut’s global
and Indian businesses.
Japan2021 was about expanding our product offering in Japan, andcontinuing to build the foundation of the business by improving
product localisation, operational efficiency, and regulatory
relationships. Our customer base doubled by the end of theyear thanks to our continued growth effort. During 2022, wehave continued to enrich product lineups to enhance customer
satisfaction in Japan and bring the product line closer to parity
with the UK.

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Financial performance
Our financial performance during 2021 reflects a continuation of the sequential improvements made in 2020,
culminating in our first year of profitability. We maintained customer growth and strength in core products, while
reaping the benefits of diversifying into new capabilities. We chose to reinvest profits in our marketing function,
supported by improved unit economics.
Financial highlights

Balance sheet strength

Revenue grew by 190% year on year, to £636 million (2020: £220
million). Revenue was driven by continued customer growth acrossboth our Retail and Business ecosystems, with 46% increase inretail customers year-on-year. Acquisition through marketingand sales, for the Retail and Business ecosystems respectively,
complemented continued organic growth. Revenue growth wasachieved across all revenue streams, with particular acceleration in
Foreign Exchange and Wealth, and Other Income.

Customer deposit balances continue to grow significantly year-onyear, totalling £7.4 billion as of December 2021 (2020: £4.6 billion),
as we onboarded 5 million customers. Loans and advances tocustomers grew to £17.8 million (2020: £1.4 million), following thelaunch of our credit card and consumer loan products in Lithuania
and Poland in 2021.
In July 2021, we closed our $800 million Series E equity funding.
This round of funding supports our growth, geographic expansion
and new product development, as well as continued investment inour systems, people and infrastructure. Our ratio of Equity to Total
Assets has increased from 7.9% at 31 December 2020 to 12.5% as
at 31 December 2021. The Group is well capitalised as of December
2021 with £1 billion of total equity.

Gross Margin increased to almost 70%, compared to 33% in
2020, as a result of increased share of revenue from higher
margin products, such as Foreign Exchange and Wealth, as wellas improved margins across our payments operations due tocost optimisation initiatives. Our business continued to observe
operating leverage due to execution on cost discipline, with
operating expenses increasing by 37% from 2020, while Gross
Profit increased by 512% year-on-year. We chose to reinvest
profit in customer growth by scaling our marketing function
through the launch of digital marketing and referral campaigns.
Due to improvement in Gross Margin and operating leverage, we
achieved profitability for the first time in 2021, reporting £59.1
million of profit from operations in 2021, and £19.7 million of total
comprehensive income for the year.

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Engaging with stakeholders
As a fast-growing company, as of the date of publication operating in over 35 countries, with over 25 million users
and over 5,000 staff, Revolut has numerous critical stakeholders around the world. These include our customers,
regulators, investors, partners, suppliers, our own staff and beyond.
Fraud prevention and customer safety

Revolut’s success depends on building and maintaining successful
relationships with our stakeholders. When making businessdecisions, the Board is mindful of its responsibilities under s172(1)of the Companies Act 2006 to promote the long-term successof the company having regard to its range of stakeholders, as
discussed in this section and in our Directors’ Report below.

Fraud is an endemic issue on a global scale. It is corrosive and has
a harmful effect on all parts of the economy and society. At Revolut
we are strongly committed to working collaboratively with industry,law enforcement, regulators, governments and consumer groups
to combat fraud. Revolut has invested significantly in 2021 toprotect customers from fraud through a combination of advanced
machine learning technologies, in-app warnings and customer
education campaigns.

Customers
Revolut distinguishes itself from competitors by taking a customercentric approach and providing customers with a best-in-classexperience. Revolut has developed new technology to solve
old problems.

Revolut has taken an active role in advocacy efforts to reduce
the threat of fraud, for example by campaigning for fraud to be
included in the Online Safety Bill and for powers which allow
financial services companies to share intelligence. Revolut’s
senior management has met with Government Ministers andofficials to share insights on our efforts to address fraud throughour investment in personnel and machine learning technologies.
Revolut’s Chief Risk Officer Pierre Decote attended the Economic
Crime Strategic Board - the most senior forum for tackling
economic crime chaired by the United Kingdom’s Chancellor of
the Exchequer and Home Secretary - to share Revolut’s expertise.
Revolut also joined the Joint Money Laundering Intelligence
Taskforce, a partnership between law enforcement and thefinancial sector to exchange and analyse information relating tomoney laundering and wider economic threats.

In 2021 we initiated the Deliver WOW project to provide positive
memorable interactions for customers when they need support.
We are also building a new team of Customer Experience Managers
who will listen to customer feedback through all support and social
media channels. They work closely with Product and Services
teams to prioritise improvements and future developments andoptimise the customer journey.

Partners and suppliersWith the increasing complexity of the FinTech sector, there
is a growing importance on cross-industry partnerships andcollaborations. As our network of global third-party providers
continues to grow, we take a very deliberate approach tovendor/partner relationships - conducting thorough due
diligence to mitigate risks, while fostering a mutually beneficial
relationship that always has the potential to grow into further
commercial opportunities.

Our employees
At Revolut, we want every member of our dream team to feel as if
they belong, and to be able to reach their ultimate potential.
In 2021 we instituted two paid wellbeing days to employees toacknowledge their hard work over a challenging year, supported byour move to permanent flexible working.

Our investors
Our investors are key stakeholders in Revolut’s success to date.
Their capital has enabled us to grow quickly. With the benefit of asolid and stable capital base Revolut is well positioned to withstandthe challenging global economic headwinds.

We are also building our diversity and inclusion (D&I) programme
because we know it’s critical in our mission to become the world’s
first truly global financial super app. More information on Revolut’s
approach and progress on diversity and inclusion is available on
pages 32 of the report.

We value their trust, confidence and insights and provide
regular updates on financial performance, strategy, culture andbusiness developments.
In July 2021, we raised ​​$800 million in Series E funding, valuing
the business at $33 billion. The investment was an endorsement ofour mission to create a global financial super app, and has enabled
the company to further growth plans, in particular ongoing productinnovation aimed at meeting customers’ everyday financial needs
and aspirations.

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Engaging with stakeholders

Donations

Community engagement

While 2021 was yet another challenging year for charities aroundthe world (being largely restricted to virtual fundraising only), we
made it easier than ever for customers looking to donate to theirfavourite charities to do so using Revolut’s Donations feature.
During 2021, we continued to enhance our charity partnerships,
offering customers the opportunity to donate seamlessly to 17 newcharities from the app, with 100% of each donation going directly
to the relevant organisation.

We have also engaged with a range of community organisations
and advocates to gather insight on the financial services needsof our communities around the US, and complement our efforts
towards our US bank charter.
In 2021, Revolut’s first work experience programme, in partnershipwith ‘Work in FinTech’, provided students from diverse backgroundswith a day of immersive learning at our London HQ. Students
met employees from across the business and saw first hand how
Revolut’s products and services are built and deployed.

We continued our partnership with the Royal British Legion to
support the Poppy Appeal. In 2021 we released a limited edition
poppy card with the support of Visa. The card prominently featured
the Royal British Legion’s red poppy and was made from recycledmaterials - it was available to all UK customers who donatedat least £5 to the Royal British Legion. The campaign was wellreceived by customers and the limited edition order of 8,000
cards were fulfilled in record time and raised £80,000 in Octoberand November.

Impact of operations on the community
and the environment
Revolut investigated the impact of our operations on theenvironment in 2021.
This is why we have partnered with Watershed to help measure
our global carbon footprint, establish clear strategies to reduce theimpact of our activities, and report on those emissions.

In Ireland, Revolut partnered with the RTÉ Toy Show appeal,enabling customers across Ireland, the UK and Europe to donate

Revolut also set up more sustainability-oriented office policies at
a global level. This includes clear waste management procedures

instantly through the Revolut app to support children’s charities
across Ireland. This partnership with Ireland’s biggest televised
charity event saw customers donate more than €2 million via
Revolut, with Revolut Co-Founder Vlad Yatsenko personally giving
an additional €1 million in matched donations.

allowing for sorting and recycling of general waste across locations,and strict E-waste management (meaning discarded electricaland electronic technologies). As such, whenever possible, Revolut
donates or refurbishes any redundant electronic equipment when
it reaches its end-of-life and when the equipment is not yet at theend of its useful life, Revolut relies on the services of a trusted
global partner to recycle E-waste and ensure none of it goesto landfill.

Revolut’s support for the Disaster Emergency Committee in theirefforts to support the people of India at the peak of COVID-19
enabled our customers to donate £200,000 in a single week.

Revolut also introduced a sustainable business travel policy
to reduce and compensate emissions linked to travel. All UK
employees also have access to the Cycle to Work scheme toencourage the use of environmentally friendly transport. Also,
we closed one floor of our London head office to reduce energy
consumption while the energy used at our London and Vilnius
offices is from 100% renewable sources.

And as part of our ongoing support for humanitarian efforts in
Ukraine, Revolut enabled millions of its customers worldwide to
instantly donate to the British Red Cross Ukraine Crisis Appeal,targeted at supporting victims of the war in Ukraine. We also
matched our customers’ donations and contributed £1.5 million to
the appeal.

In 2021, Revolut also joined the Tech Zero initiative, an initiative
gathering British and global tech companies ready to fight theclimate crisis through technology, data and science.
We continued to run sustainability-oriented charity partnerships on
our Donations platform. During 2021, Revolut customers donated£400,000 to the NGO WWF, and £160,000 in partnership with theRainforest Alliance to protect rainforests.

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Engaging with stakeholders

Maintain a reputation for high standards ofbusiness conduct
Revolut takes a world-class global approach to standards andbusiness conduct.

We also educate employees on what to do if they observe or
suspect any wrongdoing in the organisation. We provide training on
whistleblower reporting and protections, and have a whistleblower
champion to assist any employees who do not feel comfortable
reporting to line managers.

In our view, customer trust is the most valuable asset a financial
institution can have. Banks consistently score the lowest in
consumer trust ratings, so trust is a differentiator and can provide
a competitive edge in the banking and financial sector.

From a third-party perspective, Revolut is committed to complying
with all applicable anti-bribery and corruption laws and regulations
and does not tolerate bribery or corruption in any form. We requiretransparency and integrity in all our business dealings to avoid any
improper advantage or the appearance of questionable conduct by
our employees or associated third parties. All material third parties
with whom Revolut proposes to contract are subject, prior tocontracting, to stringent due diligence assessments by our thirdparty risk team and these assessments are refreshed at regularintervals. Third parties associated with Revolut are prohibited fromoffering, promising, giving or authorising any form of solicitation,agreement to receive, or accepting anything that constitutes or
could be perceived as constituting bribery or corruption and, as
noted above, all employees are provided with training on how to
identify this behaviour.

With this in mind, we maintain the highest possible standards
for every aspect of our business, in all regions. It is no longer
acceptable for companies to simply meet the regulatory minimums
in each operating country. We take a global approach to businessconduct, taking the best practices from each region and using
them to inform best-in-class policies that earn the trust of all of
our stakeholders.
From a regulatory perspective, we engage collaboratively withregulators and governments around the world. With trusting
relationships and open dialogue, we exchange information andideas on how customers and citizens can best be protected.
By sharing knowledge and data-driven insights, we can assist
regulators in shaping policies in a rapidly changing environment.
From the beginning of the pandemic we provided governmentswith real-time spending data on their local economies, which
served as a valuable data point for fiscal interventions and criticalbusiness support throughout the pandemic.

And lastly, from a customer perspective, we aim to provide
the best service, robust protections, and the most relevant,actionable insights that can assist customers in achieving
financial independence. It is by consistently serving, protecting
and educating our customers that we can build a long-term
trusting relationship.

From an internal and employee perspective, we continue to invest
in compliance training and initiatives for all of our staff - no matter
what department they sit in. We have built bespoke educational
programmes for our internal ‘RevoLearn’ platform, and both thecompletion and regular renewal of training certificates is tied to
employee Key Performance Indicators (KPIs) and rewards. This
includes educating employees on Anti-Bribery and Corruption,
Treating Customers Fairly, Internal Fraud Awareness, Conflicts ofInterest and Anti-Harassment and Bullying.

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Risk & ComplianceManagement
Risk & Compliance is at the core of Revolut, working across functions, products and regions to monitor performanceand ensure that our business can perform and grow on a safe footing. Last year we reported a significant expansion
and upskilling of our Risk & Compliance function in terms of people, processes, tools and infrastructure, which wascommensurate with Revolut’s customer and commercial development. Over the course of 2021, we continued thisjourney, increasing the function’s headcount from 147 to 206, further enhancing our risk technology platform andadding to our set of risk identification, assessment and monitoring tools.
Risk & Compliance culture

Our annual Risk & Compliance Strategic Programme focuses on
improving and enhancing our capabilities in respect of identifying,assessing and monitoring our key strategic risks, improving risk
culture and engagement, maintaining and ensuring a robust control
environment is in place and continuing to evolve a world-class andinnovative set of risk tools, systems and processes.

We define our Risk & Compliance culture as the shared beliefs
and values concerning risk that affect and are affected by ourrisk taking and control decisions and the outcome of thesedecisions. Revolut believes that a strong Risk & Complianceculture is supported by an understanding of individuals’ roles andresponsibilities within the three lines of defence, and an alignment
with the company goals and values.

Elements of our approach to risk management
Revolut operates a comprehensive Enterprise Risk Management
Framework (ERMF), which establishes our approach to identifying,measuring, monitoring, mitigating and reporting risks of all types.
It documents the methods, tools and governance structures within
our ‘three lines of defence’ operating model. The ERMF clearly
articulates roles and responsibilities across the Group, while setting
the ground rules applied to measuring, reporting and escalatingrisk matters.

Activities undertaken by the Risk & Compliance function topositively influence Revolut’s Risk & Compliance culture include:• Training and awareness building; considering specific and datadriven training needs (e.g. informed by reporting and resolutionof risk incidents, engagement with governance processes, etc.)• Investment in improving risk processes and tooling to ensure
they are accessible, engaging and easy to use

We evolved the ERMF during 2021 to reflect the risk management
implications of growth and complexity in our corporate structure,geographical reach and product breadth. We designed andincorporated additional tools and approaches to strengthen ourgrip on our risk profile. Examples of this include:• Incentivisation through positive reinforcement and consequence
management through specific KPIs aligned to our ‘Trust and
Reputation’ company goal, as well as our ‘Karma’ awards
mechanism, a points-based system driven by an evaluation ofindividuals’ engagement with Second Line processes, whichconverts into a portion of departmental bonus remuneration• Risk & Compliance management augmented by connected-data
that links risk and control events (such as Key Risk Indicators(KRIs) and incidents) to core risk assets (such as risk and control
registers) in real time, enabling quick remediations of control
failures and gaps to keep risk profile healthy and within appetite• Embedding risk management discipline through our growing
network of Business Risk Officers situated in our key productand service teams• A ‘Watchlist’ framework used to identify areas of the businessthat warrant a heightened level of oversight from the Risk &Compliance function

Operating the Karma mechanism for over a year has given us avast and granular data set which informs our view on risk culture
and where attention is needed to strengthen it.

• Strengthening and broadening of our emerging risk identification,
management and reporting process to capture a broader set of
emerging risks and derive more insight from the business on
how our risk profile may change in the future

In 2021, we also introduced Revolut’s Group Code of Conduct
which emphasises the expectations that employees act withintegrity and in the best interests of our customers, colleagues andwider stakeholders.

• A new approach to regulatory obligation and policy management(Aurora) enabled by technology allowing mapping of externallysourced, up-to-date and granular obligations to internal policies
and underlying process and control data

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Risk & Compliance Management

Risk strategy and appetite

Risk and control assessment and monitoring

Our risk strategy is the bridge between the Group’s strategy
and our Group risk appetite. It is based on the following
guiding principles:

Risk assessment provides management with a view of events that
could impact the achievement of its objectives. It is integrated into
management processes and conducted using a top-down approach(see principal risks and uncertainties, below) that is complemented
by a bottom-up assessment process. Our three-level risk taxonomy
ensures adequate coverage and enables risk data aggregation at
multiple levels. This assessment process combines probability(from almost certain to unlikely/rare) with impact, using aframework that incorporates metrics that assess financial impact,
impact on customers, regulators and employees as well as themedia and other external stakeholders.

• Responsible, controlled and sustainable growth• Prioritising our prudential risk obligations by maintaining
adequate capital and liquidity resources to support growth in asafe and appropriate manner• Complying with regulatory requirements across all of
our jurisdictions• Building and maintaining confidence of all our businessstakeholders (internal and external)

Business Risk Officers conduct First Line risk and control
assessment within our Product and Service Lines. These
assessments are dynamic so that our view of risks and controls
keeps pace with changes to our organisation, product offeringand the risks we face. While assessment of risks and controls is
first and foremost the responsibility of our First Line teams, theoutputs of those are subject to oversight by Second Line Risk
& Compliance. We gain additional assurance over our control
environment through conducting dedicated Compliance Assurance
reviews and through our Third Line Internal Audit reviews.

• Developing and retaining people with a growth and mature risk
mindset who are committed to balancing speed and quality ofdelivery with sound governance processes
This strategy is supported by the Group Risk Appetite Statement,
where Revolut’s Board determines the significant risks andaggregate risk levels that it is willing to accept in order to achieve
its objectives. In some cases, we are not willing to accept exposure
to certain risks and a strategy of full risk reduction is adopted.
In other cases, we are willing to accept a moderate level of risk
inherent in our chosen business model as long as the risk is taken
rationally and is subject to appropriate levels of internal control.

Scenario analysis and stress testing
Scenario analysis refers to the quantification and explanation of the
impact of the risks contained within a scenario which allows theGroup and its entities to assess the risks and propose appropriate
mitigating actions. Revolut conducts this analysis as part of its
various stress testing activities whereby analysis is performed
based on quantitative techniques, supplemented with qualitative
overlays, to provide quantitative assessments of a defined
scenario. In addition to the standard stress testing exercises, wedeployed ad-hoc scenario analyses on a series of high impact / low
probability (‘black swan’) events that could derail our strategy.

Revolut expresses risk appetite using qualitative statements andquantitative limits for KRIs. Qualitative statements are articulated
for each risk type in our risk taxonomy. These are set and approved
at least annually by the Board, taking into account the risk andreward trade-off of business activities. KRIs act as automatedpreventive and detective controls. Board level KRIs are supported
by executive level monitoring KRIs across the risk spectrum.

Risk governance and policies
Revolut’s risk governance approach defines governance as the
combination of processes and structures implemented by the
Board and management to inform, direct, manage and monitor
Revolut’s activities to achieve its objectives for the benefit of
its stakeholders. Oversight of risk and strategic operations isconducted through the committee structure illustrated in the
Directors’ report on page 36.
Our policy framework ensures that each risk across the risktaxonomy is addressed through appropriate policies andprocedures that act as directive controls for the operation of thebusiness. These are established in a hierarchy including: i) tier
1, Board approved policies; ii) tier 2, executive-level committee
approved policies; and iii) tier 3, departmental management
approved policies. In 2021, we invested heavily in the technology
deployed to manage our policy library and enable linkage between
regulations, policies and underlying processes and controls tomonitor and ensure compliance.

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Risk & Compliance Management

Principal risks and uncertainties
The table below enumerates our main risks, aligned to the risk taxonomy, with commentary on how these risks are managed and aforward-looking view on how they may evolve.

Principal Risk

Mitigants and Controls

OutlookStrategic Risk
Strategic Risks are those risks thatthreaten to disrupt the assumptions
underpinning Revolut’s business model andstrategy, thereby materially affecting theachievement of our strategic objectives.
Revolut approaches Strategic Risk
management from two perspectives:
1. Strategic planning
2. Strategic execution
The top Strategic Risks Revolut is most
focussed on include:• External factors, such as the inability
to identify, assess and manage
macroeconomic, regulatory, politicaland societal factors that may hinder the
execution of our strategy• This additionally entails our ability toplan for or prevent high impact and low
probability events

Revolut’s strategy is defined by the Boardand overseen by the Executive Committee.
The strategy is articulated throughcompany goals and measured by (KPIs).
Threats to our strategy are monitored
through KRIs and other automatedmonitoring tools with formal processes
to investigate and remediate potential or
actual breaches to appetite.

Revolut closely monitors changes to themacroeconomic, political and regulatory
landscapes to ensure the impact on ouroperations are understood and contained.

Revolut’s top Strategic Risks are definedwith the Group CEO and executive teamand regularly analysed and reviewed.
A report which details the top Strategic
Risks, their impact on company goals,
their mitigants and future developments
is presented on a quarterly basis to theGroup Executive Risk Committee and
Board Risk & Compliance Committee.

Our approach to monitoring andacting upon reputation risks has beensignificantly enhanced in the past year
where internal and external data is acted
upon to improve products and processes
and mitigate reputation risk.

• Skills and competency, due to rapid
growth of headcount and talentmanagement, to ensure we hire, develop
and retain a high-performing team to
execute our ambitious strategy• Reputation risk from the perspectiveof our various stakeholder groups,
which arises often as a second-order
impact of risks emanating from ourchosen strategy• Sustainability of growth initiatives
entailing the risk of short-term
gains coming at the expense oflong-term detriment• Bottlenecks slowing down theoperationalisation of our productofferings and entity structure; and• Inability to adapt and iterate our productoffering to fit several target markets

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23

Multiple work streams are underway
to ensure our framework for talentmanagement and internal culture is robust
and facilitates the achievement of ourstrategic objectives.

Regarding sustainable growth, we areconscious of the significant pace at which
the business is growing and we continue
to invest in building our processes andgovernance that serve as a guard against
uncontrolled growth.

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Principal Risk

Risk & Compliance Management

Mitigants and Controls

Outlook

Capital Risk
Capital Risk is the risk that Revolut does
not hold adequate capital to support its
business activities based on its regulatory
requirements and risk profile.
Revolut identifies the following risks as the
top risks related to capital:• Capital adequacy in an idiosyncratic
or market stress scenario or to
support growth• Ability to raise funds on commerciallyacceptable terms based on dynamic
market conditions, such as periods ofhigh interest rates or recession

Capital Risk is mitigated using KRIs thattrigger immediate intervention if theGroup’s capital position deteriorates. The
Group holds capital buffers, ensuringthat it has sufficient capital based on its
risk profile to mitigate the impact of astress. Capital requirements for the Groupare set on an annual basis through theInternal Capital Adequacy Assessment
Process (ICAAP). Recovery planning is also
performed on an annual basis.
With respect to the top Capital Risks, theGroup is mitigating them by:• Having a well established process tomonitor the capital position at a grouplevel, including quarterly forecastingtaking into account planned growth andlaunch of new entities, with a range ofcapital KRIs and a detailed Recovery
Plan to manage scenarios where there isa risk of any capital shortfall• Establishing macroeconomic
monitoring and incorporating this
into the Recovery Plan framework,
to allow appropriate actions to betaken in response to changes in themacroeconomic environment

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Revolut has, and expects to have in the
future, sufficient capital to support its
risk profile.

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Principal Risk

Risk & Compliance Management

Mitigants and Controls

Outlook

Liquidity Risk
Liquidity Risk is the risk that Revolut
cannot meet its financial obligations when
they fall due.
Funding Risk is the risk that Revolut does
not have sufficient stable sources offunding to meet its financial obligations
when they fall due or can do so only at
excessive cost. Risk arises when assets
maturing during a particular period
are lower than corresponding liabilities
maturing during the same period. An
unexpected increase in assets or adecrease in liabilities can also create
Liquidity Risk.

Revolut’s key liquidity policy is to maintaina portfolio of unencumbered, high-quality
cash instruments and securities that arereadily convertible to cash to ensure thatit can meet all its financial obligations inbusiness-as-usual circumstances and instress conditions. Liquidity requirements
for the Group are set on an annual basis
through the Internal Liquidity Adequacy
Assessment Process (ILAAP).

Revolut has, and expects to have in the
future, sufficient excess unencumberedliquidity to support its business-as-usual
and contingent financial obligations.

Revolut’s Market Risk is managed bymonitoring its exposures using KRIs forthe key risk drivers, setting appropriate
risk limits and using hedging transactions
where appropriate.

Foreign exchange, commodity andcryptocurrency exposure is maintained atrelatively low levels through a standard
hedging policy. Revolut maintains somestructural foreign exchange positions
which are managed and monitored using
the existing Market Risk metrics. Revolut
expects an increase in fair value risk
arising from specific assets in the Treasury
portfolio which are used to back e-money
deposits, but monitors and manages thisrisk through the use of dedicated risk
metrics and limits.

Revolut’s approach for timely identification,measurement, monitoring and control
of IRRBB is set out in specific policies
and procedures.

Revolut began formally monitoring IRRBB
during 2021. Revolut’s balance sheet is
expected to evolve as clients migrate frompayments entities to banks, the credit
offering is increased and the investment
portfolio is developed. These changes will
influence the interest rate risk to which
Revolut is exposed.

Market Risk
Market Risk is the risk that Revolut’s
earnings, capital or ability to meetbusiness objectives could be adversely
affected by changes in the level orvolatility of market variables, whichmight include changes in interest rates,
credit spreads, commodity prices, equity
prices, cryptocurrency prices and foreignexchange rates.
Revolut provides foreign exchange,commodity and cryptocurrency services
to its customers via multi-currency wallets
that allow spending in different currencies,
creating exposure to various market
risk drivers. Revolut is also exposed toforeign exchange risk arising from various
corporate activities and stemming fromrevaluation of contractual cash flows
or assets and liabilities denominated inforeign currencies. Interest rates andforeign exchange rate movements canaffect the market value of some assets
which exposes Revolut to fair value risks.

Interest Rate Risk in the Banking Book
Interest Rate Risk in the Banking
Book (IRRBB) refers to the current orprospective risk to Revolut’s capital andearnings arising from adverse movements
in interest rates that affect our banking
book positions.
Revolut is exposed to IRRBB to theextent that there is a structural repricing
mismatch between assets and liabilities.
Revolut uses client deposits and equity tofund lending activity with excess funding
being held in the form of cash and liquid
securities, generating interest income withvarious repricing profiles.

Annual Report & Financial Statements 2021

Revolut monitors its IRRBB exposure on
an ongoing basis by reviewing metrics
for sensitivity of net interest income andeconomic value of equity.

Revolut will continue to monitor its IRRBB
and manage it through the design of its
products and the asset selection within its
investment portfolio.

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Principal Risk

Risk & Compliance Management

Mitigants and Controls

OutlookCredit Risk
Revolut is exposed to wholesale, retailand business Credit Risk. The majority of
its wholesale Credit Risk arises throughthe placement of corporate funds andsafeguarded client funds with financial
institutions, plus exposure to high-quality
sovereign and corporate counterparties
through the Treasury asset portfolio.
Revolut’s retail and business credit
portfolios comprise lending to individuals,
primarily unsecured personal loans andcredit cards, and credit exposure toindividual businesses due to Revolut’s
merchant acquiring services, both in arange of countries.

Revolut’s Credit Risk is governed by a suiteof policies and procedures covering thedifferent sources of Credit Risk.
All wholesale counterparties giving rise
to Credit Risk are assessed at least
annually and assigned a Credit Risk limit
commensurate with their risk profile,
subject to approved materiality thresholds.
Exposure to individual financial institutions
is gradually being diversified through thegrowth of the Treasury asset portfolio.
Retail and business credit products are
subject to appropriate underwriting
procedures and monitoring, and governedby relevant Group-level and entity-levelrisk committees.

Revolut’s exposure to financial institutions
is expected to evolve over time with theGroup’s intention to obtain bank licences in
the UK, US and Australia, alongside plansto grow a high-quality liquid asset portfolio
to support compliance with regulatory
large exposure requirements.
Revolut intends to continue scaling up its
product offering for retail and businesscustomers in a controlled manner, which
will result in growth in retail and businesscredit exposure during the coming year.

Model Risk
Revolut uses models for a variety ofreasons, including for example predictionof expected customer support headcountcapacity, meeting accounting andregulatory requirements (e.g. Expected
Credit Loss) provisions, detectionof fraud among customers, stresstesting exposures to simulate severemarket stress conditions, identificationof control indicators for measuring
Conduct Risk, and detection of money
laundering/terrorism financing.

The Group has a detailed and robust Model
Risk Framework, which is periodicallyrefined to reflect industry developments
and align with regulatory pronouncements.
The Model Risk team is independentof revenue-producing units, model
developers, model owners and model
users, and reports directly to the Chief
Risk Officer. It has primary responsibility
for assessing, monitoring and managing
Model Risk through oversight across
Revolut’s businesses.

The extensive use of models exposes
Revolut to the potential for adverse
consequences from decisions wemake based on incorrect or misusedmodel outputs.

The Model Risk Committee (a subcommittee of the Group Executive Risk
Committee) is the primary governancebody overseeing this risk. It provides
oversight and challenge to theidentification, analysis and validation ofmaterial models.
Revolut continues to increase the use ofmodels for business decision-making,customer onboarding, monitoring ofcustomer accounts using automated alerts
and preventing and detecting fraud andmoney laundering.

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Model Risk management is integral
to our risk management strategy as
we will intensify our use of machinelearning models and data analytics to
responsibly grow our businesses, improve
our customers’ experience and comply
with regulations.

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Principal Risk

Risk & Compliance Management

Mitigants and Controls

OutlookConduct Risk
Revolut is a customer-focused company
that operates in a highly regulatedindustry. Revolut is exposed to many risks
related to compliance with a wide rangeof laws and regulations in different global
jurisdictions. These include the Conduct
Risks associated with customer outcomes,
business practices and incentives, market
stability and effective competition.

Revolut mitigates Conduct Risk throughits Enterprise Risk Management
Framework. Key controls, processes andgovernance oversight exist throughout
the product life-cycle and customer
journeys to mitigate potential risks, withclear roles, responsibilities and oversightarrangements defined at operational andorganisation levels as well as mechanisms
to incentivise good conduct.

Revolut is seeing an increase in theinherent risks associated with Conduct
Risk, which are directly aligned to the
expansion of products, jurisdictions andvolume of customers.
We continue to mitigate this through ourEnterprise Risk Management Framework.

Governance is exercised through theCompliance, Operational & Conduct Risk
Committee, with clear escalation lines to
the Group Executive Risk Committee &Board Risk & Compliance Committee.

Regulatory Risk
Revolut is committed to comply withthe relevant regulatory requirementsin the jurisdictions in which it operates
and to provide accurate, reliable andtimely reports to external stakeholders,authorities and regulators.

Revolut mitigates Regulatory Risk
through its Enterprise Risk Management
Framework. Regulatory Risk management
is enhanced by comprehensive policies
and procedures underpinned by anextensive mandatory training programme.
Governance is exercised through theCompliance, Operational & Conduct Risk
Committee, with clear escalation lines to
the Group Executive Risk Committee &Board Risk & Compliance Committee.
Revolut has a well established Horizon
Scanning process to detect early signs ofimportant regulatory, legislative and policy
developments and / or changes. Revolut
actively contributes and provides inputs to
consultation papers issued by regulators.

Annual Report & Financial Statements 2021

27

We seek to operate within all relevantlaws and regulations and establish strong
working relationships with regulators.
Regulatory requirements may be complex
and require careful interpretation, including
consideration of their underlying spirit
and intent. We are committed to comply
with applicable laws, rules and regulations
and monitor for changes to the regulatory
landscapes and will maintain robust
systems and controls.

Strategic report

Principal Risk

Risk & Compliance Management

Mitigants and Controls

OutlookFinancial Crime Risk
Financial Crime Risk is the risk of failingto effectively mitigate criminal or illegal
activity through Revolut’s products andservices, third parties and employees.
This includes money laundering, violationsof sanctions, bribery and corruption,
fraud, tax evasion, and terrorist andproliferation financing.
Revolut may be adversely impacted
if it fails to appropriately identify andmitigate the risk that employees or
third parties facilitate, or that Revout’s
products and services are used to facilitate
financial crime.
Non-compliance may lead to enforcement
action including fines, public censure,suspensions, restrictions, conditions,limitations and disciplinary prohibitions,which could result in a material financial
and reputational impact to the business.

Revolut takes its responsibility to preventand detect financial crime seriously.
Revolut mitigates these risks by ensuring
it has robust governance, effective risk
management procedures and a strong
control framework to manage Financial
Crime Risk.
We continue to improve the effectivenessof our financial crime systems andcontrols, including real-time monitoringof transactions, daily screening of all
customers for sanctions and adverse
media, and enhanced staff mandatory
training on Financial Crime Risk.

Financial institutions remain undersignificant regulatory scrutiny regarding
their ability to prevent and detect financial
crime. As Revolut continues to expand into
new jurisdictions, products and services,
this increases and introduces new risks
that require continued focus to manage
Financial Crime Risks effectively.
Changes concerning virtual assets,
particularly with regards to the scope of
regulation and an increasing focus on
customer harm linked to these assets,continues to be an area of significant focus
and speed of change.

Revolut continues to invest significant
attention and resources to strengthen theoverall financial crime framework, systems
and controls.

Revolut continues to evaluate, monitor
and strengthen the effectiveness of
its Financial Crime framework and iscommitted to maintaining a risk andcontrol environment that enables it torespond promptly and effectively toemerging financial crime threats.

Revolut aims to minimise External
Fraud Risk by maintaining robust, riskbased, systems and controls which aredesigned to meet prevailing legislativeand regulatory requirements and to deter,prevent, identify, manage and reportoccurrences of External Fraud.

Revolut aims to minimise External
Fraud Risk by maintaining robust, riskbased, systems and controls which aredesigned to meet prevailing legislativeand regulatory requirements and to deter,prevent, identify, manage and reportoccurrences of External Fraud.

Where fraud does occur, Revolut has apolicy of investigating all events in orderto learn and take the necessary steps
to further strengthen its systems andcontrols, therefore protecting Revolut andits customers from future fraud risk(s) andto protect Revolut’s reputation.

Revolut continues to evaluate, monitor andstrengthen the effectiveness of its External
Fraud Framework and is committed tomaintaining a risk and control environmentthat enables it to respond promptly andeffectively to any emerging fraud threats
and advanced technology.

External Fraud Risk
Revolut defines External Fraud risk as
losses due to acts of a type intended
to defraud, misappropriate property or
circumvent the law, by a third-party.
Significant External Fraud Risks for Revolut
include Acquiring Fraud, Issuing Fraud(Card / Payment / Lending). AccountTakeover Fraud and Application Fraud(Identity Fraud). Revolut has a low appetite
for External Fraud Risk.
In particular, Revolut focuses on managing
the risk that customers are victims of
Account Takeover Fraud, Authorised Push
Payments Fraud, lost or stolen Card Fraud.
Revolut is committed to comply with therelevant regulatory requirements andrecommendations, furthermore failing to
be compliant may lead to enforcement
action including fines, public censure,suspensions, restrictions, conditions,limitations and disciplinary prohibitions.

In addition, the group is mitigating thespecific top risks through mandatory
training for all employees and specific KRIs
to identify trends in fraud events.

Annual Report & Financial Statements 2021

28

Strategic report

Principal Risk

Risk & Compliance Management

Mitigants and Controls

Outlook

Third Party Risk
Revolut relies on third parties andoutsourcing service providers across anumber of channels, including payment
processing, regulatory compliance, foreign& crypto exchange, trading services, KYC/
AML and other business services.
A significant portion of the services
provided to Revolut customers
depend on third-party arrangements.
Consequently, this presents operational
and, sometimes, concentration risk, forwhich we have a defined risk appetite andmonitoring procedures.

The Group mitigates this risk throughits third-party and outsourcing risk
management framework. This includes
ongoing monitoring of outsourced services,
Service Level Agreements and contingency
planning efforts. We work closely withthird parties to ensure we are resilient andcan continue to deliver our services withminimal disruption.

As our network of third parties grows as aresult of our business growth, we continue
to closely monitor this risk. As a regulated
institution, we review our procedures andprocesses regularly. In 2021, our thirdparty due diligence process has evolved
and will continue to do so going forward.

We continue to reduce our dependencies
on third parties via diversification andbuilding products and processes in-house
where practical.

Furthermore, a number of our third parties
rely on a large number of staff withdedicated training required to support
our services.

Cyber and Data Security Risk
As a global financial super app provider,cyber security threats which might
attempt to access Revolut systems
or customer and payment data are asignificant risk.
Revolut handles significant amounts ofpersonal data provided by its customers,
as well as employee data and confidential
corporate information, and must comply
with strict data protection and privacy laws
and regulations in global jurisdictions inwhich it operates, while protecting its own
reputation and corporate position.
The top Cyber and Data Security Risks that
Revolut is focussed on are unauthorised
access to Revolut’s data and systems andthe risk of inadequate processes arounddata privacy.

Alongside the advanced security features
it provides to customers, Revolut has
implemented technical and organisational
controls to reduce these risks. These
include dedicated internal team-led
application security testing, vulnerability
management, a company-wide training
and phishing threat simulation programme,
logical access controls, advanced endpoint
threat protection, a dedicated cyber threat
intelligence team, monitoring and alerting
across our key infrastructure and systems,
security due-diligence and monitoring ofthird parties as well as regular external
penetration testing and audits.
Revolut also implements industry-leading
security features into its customer
offerings, including location-based card
security features and 3D Secure push
notifications and contextual multi-factor
authentication, to ensure that customers
can trust the service provided.
Revolut continues to invest in its digitalplatforms and security posture, and builds
resilient and secure technologies andprocesses to minimise the risk of breaches
of data security.

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29

As a cloud-based fully digital company,
Revolut operated with minimal disruption
throughout COVID-19 and its aftermath,with employees able to work fully remotely.
The cyber risks that follow a remoteworking model, an innovative digital andgrowing company, and the continuing
opportunism and motivation of criminals
have been closely monitored withadditional controls implemented both forcustomer, staff and data protection.
Revolut operates a continuous
improvement approach to security
controls, adapting to the threat landscapeas it evolves, and as a result of on-going
testing and audit activities.
Revolut will continue to mature its
governance in this area and look toalign to external Information Security
standards, e.g. SOC2, to provide assurance
on Revolut’s control environment forcustomers, partners and vendors utilising
Revolut’s services.

Strategic report

Principal Risk

Risk & Compliance Management

Mitigants and Controls

Outlook

Change Management Risk
Inherent in our strategy is rapid andcomplex business change, throughproduct innovation, geographic andmarket expansion and to support
technological enhancement. This riskarises from organisational change,
product introduction/enhancement andchanges to our technology platform andsupporting infrastructure.

While all business areas and staff manage
continued change and development as
part of the normal course of business,
projects of significant materiality andrequiring cross-functional and/or crossdivisional coordination are managed
through dedicated governance processes,
including a robust New Initiatives Approval
Process (‘NIAP’) to ensure that changes
are effectively managed and delivered withexecutive and, where appropriate, Board
oversight, and that the risks associatedwith changes are reviewed & approvedby control owners (e.g. InfoSec, Finance,
Credit, and Risk).
Revolut’s approach to managing change
has matured significantly over the past
year. The roll-out and embedding of thechange policy, change risk assessment to
mitigate change risks, increased awarenessof departmental interdependencies andcontinued development of programmemanagement and helped to reduce changerisk. Improving maturity of these processes
and formal training has helped in driving
accountability within Revolut to managechange more effectively.
Revolut has developed a robust
mechanism for governance around logging
and resolving bugs as part of the resilientchange management process. More
broadly, Revolut has established strong
governance around managing remediation
activity to ensure any control gap is
properly addressed, through a dedicatedcommittee (‘PHIX’) and company-wide
Control Enhancement Programmes (CEPs).

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30

The pace and volume of change at
Revolut will continue as we roll out new
products and features, establish newentities in expansion territories, andcontinue organisational changes suchas corporate restructuring to better
enable internal group service delivery. Ourchange management policies, processes
and governance will ensure that thesechanges are effected in a controlled andconsistent manner.

Strategic report

Principal Risk

Risk & Compliance Management

Mitigants and Controls

Outlook

Availability and Continuity Risk
Operational Resilience is an outcome
which Revolut strives to achieve byeffectively managing its Availability
and Continuity Risk and responding tooperational disruptions in a timely manner.
Operational disruptions can have manycauses including, for example, technology
failures or when making changes tosystems. Some disruptions may also be
caused by matters outside of a firm’s
control, such as a cyber-attack or wider
telecommunications or power failure.
Operational disruptions always remaina risk, however as Revolut continues togrow, launching new products and entering
new markets, the risk of an operational
disruption occurring is likely to increase.
As our customer base grows, the potential
impacts may also increase.
Maintaining Operational Resilience isimportant for Revolut to protect its
customers, and achieve its growth goals.

Annual Report & Financial Statements 2021

The Group has established an Operational
Resilience Framework which sets out
the policy, procedures and governancestructures to enable us to monitor
and manage the resiliency of ourmost Important Business Services
for customers.
The Operational Resilience Framework
is formed of nine capability pillars which
cover a variety of potential sources ofoperational disruption and support us
in defining ‘resilience practices’ undereach pillar.
Revolut maintains a suite of BusinessContinuity Plans and Disaster Recovery
Plans which contain recovery measuresfor business processes and technology
to enable services to be resumed withina timely manner. These plans are tested
regularly to ensure they remain fit
for purpose.
A dedicated Operational Resilience
Manager is in-place to maintain oversightof the framework across the Group andlocal entities.

31

Our Operational Resilience Framework
has identified our most Important
Business Services for customers, andset tolerance limits for their disruption
in a major incident. We will continuallywork to enhance the resiliency ofthese important services, by investingin additional technology, people andthird-party resources.
The aim of this is to limit the likelihood ofa major disruption occurring, and also tolimit the harm to customers and Revolutshould a disruption impact the Group. We
are establishing a robust testing regime tomonitor the effectiveness of our resiliency
measures across the Group.

Strategic report

Our people
We place a high value on attracting, retaining and developing talented people throughout our business and promoting
a diverse and inclusive culture. Our team is key to our success and we work hard to develop our colleagues’ skills andtalents and to improve their experience in the workplace.
Diversity and inclusion

Like many in 2021, we enhanced our focus on employee well-being,
recognition, strategic centric communications and promotions.
We introduced two additional paid days’ leave to our employees
for well-being purposes, with nearly 4,000 booked globally. Tocelebrate our employees’ commitment to our goals we launched acustom recognition programme that highlights and acknowledges
their dedication.

At Revolut, we want every member of our dream team to feel as
if they belong, and to be able to reach their ultimate potential. We
prioritise D&I because we know it’s a critical component of our
mission to become the world’s first truly global financial super app.
In 2021, Revolut also introduced the following initiatives in supportof D&I:In 2021, we also accelerated our commitment to a more agile global
workforce. To build on our hybrid and work-from-home options,
we launched a 60-day work-from-anywhere policy, enabling our
employees to temporarily work from a different location to theiremployment country.

• We began to collect diversity data from our colleagues to makebetter informed decisions on our D&I strategy• We set recruitment targets for diverse hires across all of
our functions• We released our first UK Gender Pay Gap report and will continue
to hold ourselves accountable for progress on gender equality

We launched a new real estate policy in 2021 in light of COVID-19.
We moved towards a hybrid model, repurposing all our offices as
flexible collaborative spaces. In response to employees’ clearly
expressed preferences, we now enable the vast majority of ouremployees to choose when and how often they would like to workfrom-home or visit the workplace.

• We launched five inclusive guilds: Women, Pride, Parents andCarers, BAME and Wellbeing, to provide opportunities forcolleagues to connect with like-minded peers, and to drive
positive change initiatives. Each inclusive guild has executive
sponsorship to provide leadership and support

Our internal surveys showed that our employees responded
positively to remote working - with over 56% confirming theywould prefer to work-from-home between two and four times aweek, while 36% would like a 100% remote policy. Only 2% of all
respondents would prefer to work from the office everyday. 95% ofRevolut employees responding to the surveys consider that working
from home didn’t impact personal productivity or the change waspositive, same for team performance, with 97% mentioning nochange or positive change. Team collaboration was also unchangedor the change was positive according to 89% of respondents.

Despite the advancements made in support of D&I, we recognisethat we still have plenty of work to do. In late 2021, we launched
our inaugural D&I Framework, aimed at accelerating our progresson this important topic. The framework is made up of eightstrategic pillars, which include ‘Tone from the Top’ and ‘Inclusive
Workplace’. Our progress is reported to our Group Board and Group
Executive Committee as well as on our website. Successes since
we launched our D&I Framework include the following:• Implemented a company-wide female representation target of
30% of women in leadership roles by the end of 2025
• Attended our first ever in-person Pride event in New York Cityand held parties in offices across the world during Pride Month• Held D&I training for Executive Committee• Supported the career development of diverse Revoluters throughsuccessful Reverse Mentoring, Speed Mentoring and Yes You
Can initiatives

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Strategic report

Engagement with employees

Employing people with disabilities

Our in-house engagement product ‘Revolut Voices’ captures
employee feedback on a weekly basis to assess employee
engagement and satisfaction. The data is closely monitored within
the talent department to ensure necessary action is taken tocontinue to drive positive employee engagement within Revolut.
The data is discussed with the Board at every scheduled Board
meeting and also regularly with Heads of Departments and theirteams by our dedicated HR people partners.

We’re committed to employing and supporting colleagues in linewith the Equality Act 2010 and our Equal Opportunities policy. We
make reasonable adjustments to support all disabled job applicantsand colleagues.

Reward and employee share ownership
Revolut encourages employee share ownership and a proportion of
employees’ total reward package (including performance bonuses)
is paid in Revolut share-based awards. Historically, these awards
have been made in the form of share options.

Revolut has a variety of communication mechanisms to ensure
staff stay abreast of key company information. The CEO runs
quarterly town halls and regularly shares newsletters updating
progress against our company goals and KPIs, as well as focus forthe next quarter. Key company announcements are shared throughdedicated slack channels and our weekly newsletter provides aroundup of key company and product news for all our Revoluters.

The Revolut Partner programme
In 2021 we were pleased to launch the Revolut’s global Partner
programme, a dedicated bonus scheme designed to reward
exceptionally high-performing employees, who have demonstrated
an exceptional personal character and integrity, a track recordof contribution to the business, and a consistent commitment to
Revolut’s mission and values as a culture champion.

Equal opportunities
All employees and job applicants must be treated equally without
any discrimination and be given the same set of opportunities.
By ‘Equal’ we mean fair treatment of each other and by‘Discrimination’ we mean unfair treatment based on age, gender,
race, disability, pregnancy, marital status, sexual orientation, gender
reassignment, culture, or religious background, and any otherpersonal characteristic that might be discriminated against as
well as any other protected characteristics under applicable laws
in your location of work. We also believe that we should treat eachother with mutual respect at all times.

This partnership lays the foundation for senior leaders to propel
our business forward in the years to come. Our partners are asmall group of highly-talented colleagues, elected based on theircontribution to the entire organisation and ongoing commitment toour core values.
In this first year, we elected just 17 people to the partnership
across the group. Election to the partnership is extremely difficult
and we would like to acknowledge the hard work of many whowere not selected this year. We look forward to others joining ourpartners in future years and intend this to be a partnership towhich every colleague can aspire.

Revolut strives to achieve a harmonious work environment free ofharassment, bullying and victimisation so that everyone is treatedwith dignity and respect. It is an important aspect of ensuring
equal opportunities in our employment. To support this, we haveseparate policies on anti-harassment and bullying.

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33

Board of Directors

Board of Directors
CHAIRMAN

Martin Gilbert
Martin Gilbert co-founded Aberdeen Asset Management in 1983, leading the company for
34 years and overseeing its 2017 merger with Standard Life. Until November 2019 he waschairman of the UK’s Prudential Regulation Authority’s Practitioner Panel and was Deputy
Chairman of the Board of Sky PLC until 2018. Before this he was the Chairman of FirstGroup.
In 2015 he was ranked no. 22 of the Harvard Business Review’s 900 top performing CEOs in
the world. Martin holds an LLB from the University of Aberdeen and an MA in accountancy. He
qualified as a chartered accountant with Deloitte.

CEO & CO-FOUNDER

Nik Storonsky
Nik Storonsky launched Revolut in 2015 to transform the way we spend and transfer money
abroad. Since then, he has put Revolut on the path to becoming a global financial superapp. Before founding Revolut he was an emerging markets equity derivatives trader at
Credit Suisse and Lehman Brothers, where he traded more than $2 billion across various
options, swaps and foreign exchange instruments. Nik holds an MS in Applied Physics andMathematics from the Moscow Institute of Physics and Technology and an MA in Economics
from the New Economic School, Moscow.

CTO & CO-FOUNDER

Vlad Yatsenko
Vlad Yatsenko co-founded Revolut with Nik Storonsky in 2015 and is its Chief Technology
Officer. His software engineering experience spans industries including travel and finance andincludes creating real-time billing systems at Comarch and booking engines for Sabre Airline
Solutions. Having built financial software systems at tier one investment banks including
UBS, Deutsche Bank and Credit Suisse, he realised that to deliver a next-generation digitalbanking service he would need to build it himself. He holds a MS in Computer Science fromthe National University of Kyiv, Mohyla Academy.

NON-EXECUTIVE DIRECTORCHAIR, GROUP REMUNERATION COMMITTEE

Michael Sherwood
Michael Sherwood retired as Vice Chairman of Goldman Sachs and Co-Chief Executive Officer
of Goldman Sachs International in 2016, after 31 years with the company and 22 years as
a partner. He is a Board Member of Moscot Inc and of Credit Benchmark Ltd, a Trustee ofGreenhouse Sports, Chair of Grenada Schools, and a former Trustee of the Mayor’s Fund for
London and the Serpentine Galleries. He was a founding sponsor of Harefield Academy and amember of the Westminster Abbey Development Board.

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34

Board of Directors

NON-EXECUTIVE DIRECTORCHAIR, GROUP AUDIT COMMITTEE

Caroline Britton
Caroline Britton was at Deloitte LLP for 30 years until 2018 and was an audit partner
for 18 years. She is a Non-Executive Director and Chair of the Audit Committee at both
MoneySupermarket Group and Sirius Real Estate Limited. She is also a member of the Audit,
Finance Risk and Investment Committee for Make-A-Wish International and a Trustee andChair of the Audit and Risk committee at the Royal Opera House. Caroline holds an MA in
Economics from the University of Cambridge. She is a fellow of the Institute of Chartered
Accountants of England and Wales.

NON-EXECUTIVE DIRECTOR(CHAIR, GROUP RISK & COMPLIANCE COMMITTEE FROM 21/02/21 TO 1/07/21)

Ian Wilson
Ian Wilson spent much of his career with Royal Bank of Scotland, latterly as Director of
Credit, retail banking. Later executive roles included Managing Director business banking
at Santander UK, Chief Risk Officer for GE Money UK, Tesco Bank, Charter Court Financial
Services and Monzo Bank, Strategic Risk Director for Virgin Money and Executive Director
for Charter Court Financial Services. He is a chartered banker, a fellow and former Vice
President of the Chartered Banker Institute in Scotland and a fellow of the Institute of
Financial Services.

NON-EXECUTIVE DIRECTORCHAIR, GROUP RISK & COMPLIANCE COMMITTEE FROM 1/07/21

John SievwrightJohn Sievwright joined the Revolut Board in August 2021. He had a 20 year career with Merrill
Lynch holding global leadership positions, latterly Chief Operating Officer - International.
He earlier worked in finance and accounting roles at Bankers Trust and Bank of Tokyo
International, having begun his career as an auditor at Ernst & Young where he qualified asa Chartered Accountant. While at Merrill Lynch he was President of the Futures Industry
Association. He has been a Director of Burford Capital since May 2020 and serves on its
Audit and Compensation Committees. He is a former Senior Independent Director (SID) and
Chairman of the Audit and Risk Committee at ICAP plc (later NEX Group) and former SID
and Chairman of the Audit Committee of FirstGroup plc. He has an MA in Accountancy andEconomics from the University of Aberdeen.

COMPANY SECRETARYTom HambrettTom is Revolut’s Group General Counsel and Company Secretary. He joined Revolut in 2017and is responsible for defining and executing the group’s legal, regulatory, corporate affairs &investor strategy. This includes the structuring of investments, navigating complex regulatoryand government environments in multiple markets and working with policymakers to facilitate
innovation in financial services. Before joining Revolut, Tom was a solicitor at Herbert Smith
Freehills, where he advised clients on a wide range of corporate and securities law matters.

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35

Board of Directors

Directors’ Report
The Directors present their report and the audited financial statements of the Group and Company for the year
ended 31 December 2021.
Matters covered in the Directors’ Report

Group Corporate Governance Framework

The Directors have addressed the following matters in the relevant
sections of the Strategic Report:

The Board is ultimately responsible for the Group’s corporate
governance arrangements, policies and practices. In August 2021,
the Board established a Revolut Corporate Governance Framework(RCGF) which sets out the Group’s corporate governancearrangements, systems and controls operated throughout
Revolut. The RCGF details the Group’s internal control framework,
including, but not limited to, the Group’s: (i) legal entity structure;(ii) decision-making processes; (iii) Three Lines of Defence model;and (iv) subsidiary governance framework. The RCGF underpins
effective decision-making and embeds a culture of accountability
throughout the Group.

• Review of the business performance: Business Performance andFinancial Performance• Strategy and future developments: Our Business Modeland Strategy• Engagement with suppliers, customers and others in a business
relationship with the Group: Engaging with stakeholders• Employee engagement• Employing people with disabilities

Legal Entity Structure• Principal risks and uncertainties: Risk management

As Revolut expands into new markets and incorporates additional
legal entities, a more efficient legal entity structure has been
designed, with a number of those legal entity changes having
taken place during 2021. The legal entity structure has continued to
evolve during 2022 and will be kept under review by the Board as
Revolut continues to expand, to ensure that it remains effective.

Results and dividends
The Total Comprehensive Income for the year amounted to£19.7 million (2020 - loss £185.2 million). No dividend was
paid in 2021 (2020: nil).

Political donations

Revolut Group Board of Directors

The Group has not made any political donations to, nor incurred
any political expenses in relation to, any registered political parties,
organisations or candidates.

The Board is appointed by the Company’s shareholders and iscollectively responsible for promoting the long-term successof the Group and delivering sustainable value to shareholders
and customers. The Board establishes and oversees the Group’s
strategic direction, following due consideration of strategies
proposed by executive management. The Board is responsible
for embedding an organisational culture which promotes
accountability, integrity, transparency and diversity by leading thetone from the top through organisational values and behaviours.

Corporate governanceCorporate Governance Standards
Whilst Revolut is not subject to the provisions of the UK Corporate
Governance Code 2018 (CG Code’), it is acknowledged as industry
best practice and the spirit of the principles are applied throughout
the Group’s corporate governance arrangements. Information
contained within this Governance section demonstrates how
Revolut embeds the principles within the CG Code in its corporate
governance arrangements, processes and practices.

The Board is chaired by Mr Martin Gilbert, who promotes andfacilitates open and constructive challenge and debate at Board
meetings. There is a clear division of responsibilities between
the leadership of the Board and the executive leadership of theCompany’s business, which is led by Mr Nik Storonsky as theGroup CEO.

Revolut operates in accordance with all corporate governancelegislative and regulatory requirements applicable to the Group, in
addition to the expectations set by its regulators.

We further strengthened the Board of Revolut Ltd in August 2021
with the appointment of John Sievwright as a Non-Executive
Director and Chair of the Board Risk & Compliance Committee.
John brings a wealth of experience in both Executive and NonExecutive roles within the financial services sector.
Bruce Wallace stepped down from the Revolut Board in February
2021 on his appointment as prospective CEO of Brex Bank.
Profiles for each of the current Board members are set out in the
Board of Directors section.

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36

Board of Directors

Directors’ Report

The Board performs an annual self-assessment of the individualand collective skills held by the Board, which is used to informthe Board’s Succession Plan and Board Training Programme. The
Board continues to operate with an appropriate balance of skills,
knowledge and experience to collectively lead the Group now andinto the future. In addition, there is an appropriate balance ofindependence which is demonstrated at Board and sub-committee
meetings through objective thought and constructive challenge.

Group Board Meeting Arrangements & Reporting
The Chair leads the agenda setting process for each Board meetingand is supported by the Group CEO and Company Secretary. In
addition, the Chair is guided by a work programme which details
the calendar of reporting to the Board. The Board receives regular
updates on strategic and operational matters from Executive
Management and the Heads of Internal Control functions,enabling the Board to monitor and challenge the Group’s strategic
performance and the management of the Group’s operations.
Throughout meeting deliberations, the Board considers theviews and interests of Revolut’s stakeholders such as customers,
employees, shareholders and regulators.

Time Commitment
Non-Executive Directors are required to devote the appropriate
time as is necessary for them to discharge their duties
in an effective manner. The minimum time commitment
for Non-Executive Directors is 36 days per annum, which
includes preparation for and attendance at meetings of theBoard and its Sub-Committees and each director’s ongoingprofessional development.

Meetings of the Group Board are held at intervals of six weeks, orconvened ad hoc as required. In 2021, there were 11 meetings ofthe Group Board convened, of which three were ad-hoc.

Board Sub-Committees

Effectiveness

The Board maintains effective oversight of the Group throughsub-committees which were established to assist the Board
in discharging its duties. The Board has established four subcommittees: (i) Board Risk & Compliance Committee; (ii)
Board Audit Committee; (iii) Nominations Committee; and (iv)
Remuneration Committee. The sub-committees operate underdelegated authority from the Group Board, in each case as definedin the respective Committee’s Terms of Reference. The subcommittee Chairs provide a high-level overview of Committee
deliberations at each scheduled meeting of the Board.

An evaluation is conducted on an annual basis to review andconsider the performance and effectiveness of the Board and its
sub-committees and to identify their strengths and developmentareas. An internal effectiveness evaluation was undertaken in the
fourth quarter of 2021. The overall sentiment of the evaluation
was positive and demonstrated the strength of the Board and its
sub-committees. However, a number of actions were agreed tofurther enhance the performance and effectiveness of the Boardand its sub-committees which are being implemented. The Board
intends for an external Board evaluation to be conducted once
every three years.

Key
Board Committee

Group Board

Executive Committee
Executive Sub-Committee

Group Audit Committee

Group Risk &Compliance Committee

Group Executive Risk
Committee

Financial Crime
Committee

Compliance,
Operational &Conduct Risk
Committee

Annual Report & Financial Statements 2021

Group Renumeration
Committee

Group Nominations
Committee

Group Asset &Liabilities Committee

Group Executive
Committee

New Initiatives
Committee

Model Risk
Committee

37

Retail Credit Risk
Committee

Investment
Committee

Board of Directors

Directors’ Report

Group Risk & Compliance Committee

Group Audit Committee

The Group Risk & Compliance Committee is responsible forsupporting the Board in fulfilling its duties with regards to risk
and compliance management, which includes but is not limited to,the following:

The Group Audit Committee is responsible for supporting theBoard in fulfilling its duties with regards to oversight of prudential,
financial and audit matters which includes but is not limited to,the following:• Reviewing and recommending the Group’s Enterprise Risk
Management Framework (ERMF) and risk appetite statement to
the Board for approval, and monitoring the Group’s performanceagainst the ERMF and risk appetite profile• Monitoring the integrity of the Group’s financial statements
and disclosures• Approving the Group’s suite of risk and compliance policies
considered ‘tier 1’• Monitoring the performance and independence of the Internal
Audit function• Reviewing matters pertaining to the Group’s material andemerging risks which includes a strong control environment• Overseeing and leading the engagement with the Group’s
external auditor• Overseeing the implementation of the ERMF, with the purpose ofembedding a risk-aware culture throughout the Group• Reviewing the whistleblowing arrangements by which staff
may raise concerns about possible improprieties in mattersof financial reporting, internal controls in relation to financial
reporting and other systems or auditing• Reviewing the effectiveness of the Group’s internal system offinancial controls• Monitoring the performance and independence of the Second
Line of Defence function;• Reviewing the capital and liquidity positions of the Group

Group Nominations Committee• Reviewing and recommending to the Board the Group’s
wind-down plan

The Group Nominations Committee is responsible for supporting
the Board in fulfilling its duties with regards to the assessment,
selection and nomination of candidates for Board and Executive
Management positions, which includes, but is not limited to,the following• Reviewing matters pertaining to stress testing activity and any
actions from regulatory engagements;• Defining and implementing the Group’s risk culture that iscommunicated effectively and supported with appropriate
metrics and indicators embedded within the business• Reviewing the structure, size, composition and independence of
the Board and its sub-committees and making recommendations
with regard to any changes it considers necessary• Advise the Remuneration Committee and advise on whether the
proposed incentive and remuneration plans are consistent withrisk culture expectations• Overseeing the succession planning process for the Board andExecutive Management positions• Ensuring the Group maintains an open and transparent dialogue
with its regulators and governmental bodies• Ensuring that a Board appointment procedure is establishedwhich includes the completion of robust due diligence to assesscandidates considered for nomination• Considering any potential conflicts of interest in accordance with
the Company’s Act 2006 and the Group’s Articles of Association• Approving Non-Executive Director appointments to major
regulated subsidiaries• Arranging periodic assessments of its own performanceand periodically reviews its and other sub-committee termsof references

Group Remuneration Committee
The Group Remuneration Committee is responsible for supporting
the Board in fulfilling its duties with regards to the remuneration
arrangements for the Group and ensuring that they align withrisk strategy in terms of incentivisation, which includes, but is not
limited to, the following:• Consider external advice and/or assurance on risk andcompliance matters where appropriate to challenge risk andcompliance functions’ analysis and assessments• Setting the remuneration for the Group Chairman, Executive
Directors, Executive Committee members and Material
Risk Takers• Agreeing the policy for authorising claims for expenses from
Directors on the Board• Establishing the Group’s Remuneration Policy, ensuring that it isbenchmarked appropriately• Overseeing any major changes in employee benefits structures

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Board of Directors

Directors’ Report

Executive Sub-Committees

Assets and Liability Committee

Executive Governance

The Board delegates authority for the day-to-day financial asset
and liability management of the Group to the Group CFO and/or Head of Treasury. The Group CFO and/or Head of Treasury aresupported by an Asset and Liability Committee (ALCO), operated
under delegated authority from the Group Risk & Compliance
Committee who are responsible for the following;

The Board delegates authority for the day-to-day management of
the Group to the Group CEO. The Group CEO is supported by an
Executive Committee, operating under delegated authority fromthe Board, who are responsible for developing the Group’s strategic
direction and proposing the same to the Board for approval.

• Management and optimisation of the balance sheet and firm’s
financial asset investments in line with Board approved appetite

Executive Risk Committee• The Board delegates authority for the day-to-day risk andcompliance management of the Group to the Group Chief
Risk Officer. The Group Chief Risk Officer is supported by an
Executive Risk Committee (ERC), operating under delegatedauthority from the Group Risk & Compliance Committee who areresponsible for the following;• Reviewing and monitoring the controls in relation tosafeguarding obligations• Reviewing and monitoring the capital (ICAAP) and liquidity(ILAAP) adequacy of the Group• Reviewing contingency funding plans (CFP) and recovery andresolution plans• Monitoring the risk profile of the Group against the ERMF, RAS
and KRIs and reviewing and approving risk mitigation plans incase of any breaches• Reviewing and monitoring the RAS with respect to financial risks• Reviewing and monitoring the liquidity risk profile of the Group• Setting, allocating and periodically reviewing limits and controlsthat are supplementary to the RAS and help managing risks on amore granular level• Reviewing the credit risk and market risk limit utilisations• Reviewing and approving liquidity transfer pricing and capital
allocation frameworks and policies• Reviewing and monitoring the implementation of the ERMF
across Revolut• Reviewing and approving forward-looking capitalisation andfunding plans• Evaluating the risk and compliance awareness and maturity ofeach department or risk-taking unit

• Reviewing and approving future business plans with respect tocapital adequacy and liquidity risk profile• Monitoring the timely closure of risk, control andcompliance issues

Culture and people• Considering and approving proposed changes to ‘tier 2’ Executive
management policies and reviewing ‘tier 1’ policies for the
Board’s approval

A corporate culture that prioritises good governance, risk
management and transparency is essential for ensuring that
Revolut delivers the best customer outcomes and stable longterm growth. The Revolut Board ensures that a strong and healthy
corporate culture cascades from the top down, enabling Revolut toexcel in the highly regulated environment in which it operates.

• Exercising oversight with regard to risk assessments
and risk management of change activities that impact
cross-functional areas• Reviewing and deciding on matters escalated from the ERC subcommittees or Revolut’s subsidiaries

This culture is fostered by Revolut’s people, who are the heart ofour business. We place a lot of importance on the hiring process,making sure that we hire and retain employees of the highest
calibre and integrity, with values consistent with Revolut’s. We
believe that brilliant people operating in a great culture willproduce the best outcomes. Our company values, found on our
website at www.revolut.com/our-culture, set the foundation for ourcompany culture.
By nurturing our employees and by enabling them to develop
and offer the best-in-class products within an environment thatprioritises regulatory compliance, internal controls and strong risk
management, we deliver the best outcomes for our customers
and, by extension, for our shareholders, the community andour regulators.

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Board of Directors

Directors’ Report

Revolut has obtained a number of other regulatory permissions
across the globe so as to be able to operate in different countries
and work towards achieving Revolut’s long-term goal of becoming
an international, multi-currency exchange and electronic payments
processing bank. In 2021 Revolut received the following licences:

Directors’ liabilities
Revolut indemnifies Company directors against third-party liability,
subject to the conditions set out in section 234 of the Companies
Act 2006. This qualifying third-party indemnity provision was inforce during the 2021 financial year.

Research and development
The Group undertakes research and development activities inrespect of the development and enhancement of its technology
platform. Revolut incurred research and development costs during2021 of £58.7 million and these are recognised in the statement ofcomprehensive income (2020: £31.1 million).

Financial instruments
Revolut enters into a series of material financial instruments forthe purposes of its business operations. Details of the Group’s
financial instruments are set out in notes 29 of the consolidated
financial statements.

Country

Trading

US, Lithuania, Australia,
Singapore

Bank Licence*

Lithuania* Upgrading from the existing specialised licence to a full banking licence

The Group also has a number of subsidiaries which are regulated
and provide similar services in non-UK and non-EEA jurisdictions.
These include Revolut Securities Inc, which in January 2022
launched its trading product to Revolut’s US customers, as well
as Revolut Payments Australia Pty Ltd which holds an AustralianFinancial Services Licence issued by the Australian Securities &Investments Commission (ASIC). Full details are listed in the notes
to the consolidated financial statements.

The Group’s financial risk management objectives and policies are
set out in the Risk Management section of the Strategic Report,
along with the Group’s exposure to price risk, credit risk, liquidity
risk and cash flow risk.

Licences and authorisations
Revolut Ltd offers e-money services to UK customers acting under
its e-money licence, issued by the FCA. Revolut is in the advanced
stages of its application to the PRA for a UK banking licence.

Branches outside the UK
The Group operates through a number of branches outside the UK,
the details of which are disclosed in note 14 of the consolidated
financial statements.

During 2021, Revolut provided payments and banking services tocustomers in the EEA through Revolut Payments UAB, which wasincorporated in Lithuania and authorised and regulated by the Bankof Lithuania as an EMI, and Revolut Bank UAB, which has a banking
licence and is regulated by the Bank of Lithuania and the European
Central Bank. During 2022, Revolut Payments UAB and Revolut
Bank UAB merged into a single combined entity, Revolut Bank UAB.
Revolut’s EEA customers are now customers of Revolut Bank UAB.
In 2021, Revolut Bank UAB deposit passporting was granted in thefollowing countries: Austria, Belgium, Denmark, Finland, France,
Germany, Iceland, Italy, Liechtenstein, Luxembourg, Netherlands,
Norway, Portugal, Spain, Sweden and Revolut Bank UAB credit
passporting was granted in Ireland and Romania.

Annual Report & Financial Statements 2021

Licence Type40

Board of Directors

Directors’ Report

Energy usage and greenhouse gas emissions

Year ended
31 December 2021

Year ended
31 December 2020

UK and offshore

Global(excluding UK and offshore)

UK and offshore

Energy consumption used
to calculate emissions(Scope 1 & 2)

679,900 kWh

761,191 kWh

687,869 kWh

Emissions from combustion ofgas tCO2e (Scope 1)

0 tCO2e

0 tCO2e

0 tCO2e

Emissions from combustionof fuel for transport purposes(Scope 1)

0 tCO2e

0 tCO2e

0 tCO2e

Emissions from business travel 0 tCO2e
in rental cars or employeeowned vehicles where company
is responsible for purchasing
the fuel (Scope 3)

0 tCO2e

0 tCO2e

Emissions from purchased
electricity, heat, steam, andcooling (Scope 2, locationbased)

144.4 tCO2e

337.9 tCO2e

160.4 tCO2e

Total gross tCO2e based on
above fields

144.4 tCO2e

337.9 tCO2e

160.4 tCO2e

UK and offshore

Global(including UK and offshore)

UK and offshore

0.23

0.76

0.72

Intensity ratio: tCO2e per£ million of revenue

Methodology

Energy efficiency actions

Emissions were calculated following the GHG Reporting Protocol(Corporate Standard) using the Watershed platform. Energy usage
data was collected or estimated based on building square-footage
for all facilities, and was combined with emissions factors fromthe US EPA, Ecoinvent, TCR and other data sources to calculate
GHG emissions. Electricity emissions factors are chosen basedon geography to reflect the emissions intensities of the facilities’
local grid.

We have taken a number of steps to reduce its carbon footprint.
This includes clear waste management procedures allowing for
sorting and recycling of general waste across locations, and strict
E-waste management (meaning discarded electrical and electronic
technologies). As such, whenever possible we donate or refurbish
any redundant electronic equipment when it reaches its end-of-lifeand when it is not, Revolut relies on the services of a trusted global
partner to recycle E-waste and ensure none of it is directed tolandfill. Revolut also introduced a sustainable business travel policy
to reduce and compensate emissions linked to these travels. All
United Kingdom employees also have access to the Cycle to Work
scheme to encourage the use of environmentally friendly transport.
Also, the energy used at our London and Vilnius offices is from
100% renewable sources. We expect our policy to expand to otherareas as we grow.
For more details on Revolut’s sustainability efforts, please refer tothe Impact of operations on the community and the environment
section of this report.

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41

Board of Directors

Directors’ Report

COVID-19

Crypto authorisations

Employees and employee safety

In September 2022, we received registration as a crypto asset
firm in the UK with the FCA. Additionally, to prepare for future
regulation of crypto asset firms in Europe, in August we wereawarded the first crypto authorisation from the Cyprus Securities
and Exchange Commission (CYSEC). This entity will act as a new
European crypto asset hub to provide additional crypto services toour European customers.

Revolut operated during the pandemic with no disruption toservices to customers. The vast majority of Revolut employees
worked from home for the duration of the pandemic, supportedby the company throughout. From February 2020, Revolut actively
monitored the COVID-19 situation around the world and provided
daily updates, information and instructions to employees focussed
on their safety and wellbeing. From February and early March
2020 onwards Revolut required employees returning from high-risk
jurisdictions to quarantine at home. Revolut required employees
to work-from-home, in most cases, before government-mandated
lockdowns, making arrangements for employees to receive
desktops and other office equipment at their homes within the firstweek of home-working.

Refer also to Note 34 to the financial statements.

Going concern
After reviewing the Group and Company’s annual budget, businessplan and forecast and the financial arrangements as well as the
economic situation in the context of the COVID-19 pandemic
discussed in note 3 to the consolidated financial statements,
the directors are satisfied that the Group and the Company haveadequate resources to continue to operate for the foreseeable
future and for at least twelve months from the date of signing of
the balance sheet and confirm that the Group and Company area going concern. For this reason, both the Group and Company
continue to adopt the going concern basis in the preparation ofthese financial statements.

As countries prepared to lift certain lockdown restrictions andencourage workers to return to offices, Revolut developed an
office booking tool and check-in app to ensure that numbers
visiting the office were monitored and controlled, subject to daily
limits, and attendance tracked. Workstations and communal
areas were adapted to ensure that the office infrastructure andall office employees and contractors complied with government
safety guidelines.

The Group continued during 2021 to successfully navigate themacroeconomic challenges arising from the COVID-19 pandemic,
the market volatility arising from the pandemic being a core driverof increased client activity. Having raised $580 million during2020 at a valuation of $5.5 billion, Revolut was rewarded for our
resilience, innovation, vision and focus during the pandemic byraising $800 million in July 2021 at a valuation of $33 billion,
representing a 6x valuation growth on the 2020 valuation.

Post balance sheet events
Australian Licence
In February 2022, Revolut was granted an Australian Credit Licenseby the Australian Securities and Investments Commission (ASIC) tooffer credit and personal lending products to the Australian Market.

Arvog Forex acquisition
In February 2022, Revolut acquired Arvog Forex, the international
money transfers and currency exchange company, as part of its
multi-million dollar investment into India. The acquisition will
strengthen Revolut’s foundation in India and accelerate its plans
to offer a best-in-class remittance service and multi-currency
accounts to Indian customers, building on the strengths of its corebusiness around the world.
In March 2022, following the Russian invasion of Ukraine inlate February 2022, Revolut focused first on safeguarding our
employees in Ukraine and on supporting them and their families.
Revolut offered relocation support to all of our Ukraine-based
employees and engaged a global security solutions partner toprovide us with guidance, emergency logistical support and thelatest security updates in the country. We also offered relocation
services to our employees in Russia.

The Group has continued to demonstrate its ability to continue
to operate successfully despite the requirements at different
times of the year and in different locations in which the Group has
employees for a significant proportion of its workforce to continue
to work from home. The Group has prioritised the safety of its
employees, the continuity of service to the Group’s customers
and the compliance with the Group’s regulatory requirements.
This has been achieved through ensuring that the Group has theappropriate IT infrastructure in place to enable employees towork effectively from home, assessing the risk and monitoring theperformance of the Group’s third-party suppliers to address therisks of customer service interruption arising from failures in theprovision of services to the Group, regular assessment of employee
wellbeing and working preferences and actively monitoring a
number of KPIs and KRIs to ensure that issues are appropriately
identified and addressed on a timely basis.

Revolut also supported people in Ukraine impacted by the war.
Revolut waived transfer fees for customers sending money to orfrom banks in Ukraine. Revolut supported humanitarian relief with
our long-standing charity partner, the British Red Cross.

The significant equity funding raised during 2021 has provided theGroup with additional capital and liquidity to invest in the Group’s
product growth and international expansion as well as to withstandfuture business stresses.

War in Ukraine

As a UK business operating globally, regulated by the FCA andmany others, Revolut operates in compliance with all applicablesanctions, laws and legislation. Revolut will continue to monitor thesituation carefully and will take further action as necessary.

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Board of Directors

Directors’ Report• The directors are responsible for safeguarding the assets ofthe company and hence for taking reasonable steps for theprevention and detection of fraud and other irregularities. The
directors are responsible for the maintenance and integrityof the corporate and financial information on the company’s
website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.

Group reorganisation
As noted in the Legal Entity Structure section, Revolut has
been undertaking a restructuring of its corporate group, withrestructuring beginning in 2021. As part of this, during 2022,
Revolut inserted a new holding company, Revolut Group Holdings
Ltd, which now sits as the top company of the Revolut group andholds 100% of the shares of Revolut Ltd. From the 2022 financial
year onwards, Revolut Group Holdings Ltd will report through its
annual report on the Revolut group’s consolidated financials.

Financial Reporting Council’s Audit Quality Review

In addition, in July 2022 we completed the successful merger of
our Lithuanian e-money institution, Revolut Payments UAB, with
our Lithuanian bank, Revolut Bank UAB. As a result of the merger,
all of our e-money institution customers across the EEA became
customers of Revolut Bank UAB, which has a full banking licencegranted by the European Central Bank and is supervised by the
Bank of Lithuania.

During the year the Financial Reporting Council’s Audit Quality
Review team (AQR) reviewed BDO’s audit of the Group’s 31
December 2020 financial statements as part of its annual
inspection of audit firms. The Audit Committee received andreviewed the final report from the FRC in March 2022. The Audit
Committee was satisfied that the matters raised by the AQR wereappropriately incorporated into the 2021 audit plan, and having
considered the areas identified and changes made to the audit
strategy and approach, the Audit Committee concluded that it was
satisfied with the response from the external auditor, the audit was
effective and that none of the matters raised brought into question
the integrity of the prior year financial statements.

Directors’ responsibilities statement
Revolut Ltd’s directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with applicablelaw and regulations.
The directors have chosen to prepare the Group Financial
Statements in accordance with the International Financial
Reporting Standards (‘IFRS’) as adopted by the United Kingdom(“UK”) and the Companies Act 2006 and the Company Financial
Statements in accordance with Financial Reporting Standard 101,
‘Reduced Disclosure Framework’ (FRS 101) and the Companies
Act 2006.

Disclosure of information to auditors
Each of the Revolut Ltd directors as of the date of approval of thisDirectors’ Report has confirmed that:• so far as the directors are aware, there is no relevant audit
information of which the Company and the Group’s auditors areunaware, andThe law provides that the directors may only approve the financial
statements if they are satisfied that they give a true and fair viewof the state of affairs of the Group and Company and of the profit
or loss of the Group and Company for the financial year to which
they relate.

• each of the directors has taken all of the steps that ought
to have been taken as a director in order to be aware of any
relevant audit information and to establish that the Company
and the Group’s auditors are aware of that information.

AuditorIn preparing the financial statements, the directors are required to:

BDO LLP have indicated their willingness to be reappointed asauditors for another term and appropriate arrangements will be put
in place for them to be deemed reappointed.

• Maintain appropriate accounting records which enable thedirectors to understand the Company’s and Group’s transactions
and financial position;

This report was approved by the Board on 27 February 2023 andsigned on its behalf.

• Select appropriate accounting policies and apply
them consistently;• Present information, including accounting policies, in amanner that provides relevant, reliable, comparable andunderstandable information;

Nikolay Storonsky
Director• Make judgements and accounting estimates that are reasonable
and prudent;

27 February 2023

• Provide additional disclosures in certain circumstances to ensurethat readers of the financial statements can understand theimpact of particular transactions and matters on the Group andCompany’s financial position and financial performance;• Ensure that the financial statements comply with therequirements of the Companies Act 2006;• Make an assessment of the Group and Company’s ability tocontinue as a going concern.

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Financial statements

Independent auditor’sreport to the membersof Revolut Ltd
Opinion on the financial statements
In our opinion, except for the possible effects of the matters described in the basis for qualified opinion section of our report:• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December
2021 and of the Group’s profit for the year then ended;• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting; and• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Revolut Limited (“the Parent Company”) and its subsidiaries (“the Group”) for the year ended
31 December 2021 which comprise the Consolidated statement of comprehensive income, Consolidated statement of financial position,
Consolidated statement of changes in equity, Consolidated statement of cash flows, Company statement of financial position, Company
statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies. The
financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK adopted
international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent Company
financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced
Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

Basis for qualified opinion
The Group’s activities are digital and IT dependent. The Group’s control environment continues to develop but for the year ending 31
December 2021 the IT systems were not designed in such a way that would allow for IT or business process controls to be effectively
tested throughout the year.
Certain transactions are initiated by users directly into the Group’s IT environment, and are then processed, executed and settled within
the Group’s IT systems. Where an entity conducts activities using IT and no reliable documentary evidence of those activities is produced
or maintained outside of the IT system, substantive procedures alone cannot provide sufficient appropriate audit evidence at the assertionlevel, except for the accuracy of processing, recording and settlement of those activities within that IT system. Verification procedures are
not able to provide sufficient appropriate assurance over Subscription, Card Delivery and Foreign Exchange and Wealth revenue streams.
As a result we were unable to satisfy ourselves by the execution of such procedures or by alternative means concerning the completenessand occurrence of revenue within these streams totalling £476,856k which is included in the Statement of Comprehensive Income
and Note 6 of the financial statements for the year ended 31 December 2021. Consequently, we were unable to determine whether any
adjustments to this amount or related amounts were necessary.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Independence
We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of thefinancial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordancewith these requirements.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparationof the financial statements is appropriate.

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Financial statements

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individuallyor collectively, may cast significant doubt on the Group or Parent Company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of
this report.

Other information
The directors are responsible for the other information. The other information comprises the information included in the annual reportand consolidated financial statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the otherinformation is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the completenessand occurrence of certain revenues for the year ended 31 December 2021. We have concluded that where the other information refers torevenue or related balances these may be materially misstated for the same reason.

Other Companies Act 2006 reporting
Except for the possible effects of the matters described in the basis for qualified opinion section of our report, in our opinion, based on thework undertaken in the course of the audit:• the information given in the Strategic report and Directors’ report for the financial year for which the financial statements are preparedis consistent with the financial statements; and• the Strategic Report and Directors’ report have been prepared in accordance with applicable legal requirements.
Except for the possible effects of the matters described in the basis for qualified opinion section of our report, in the light of theknowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the Strategic Report or the Directors’ report.
Arising solely from the limitation on the scope of our work relating to the completeness and occurrence of certain revenues, referred
to above:• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and• we were unable to determine whether adequate accounting records have been kept by the Parent Company.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if,
in our opinion:• 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.

Responsibilities of Directors
As explained more fully in the Directors’ responsibility statement, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group and Parent Company’s ability to continue asa going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or Parent Company or to cease operations, or have no realistic alternative but to do so.

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Financial statements

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a 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 the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which ourprocedures are capable of detecting irregularities, including fraud is detailed below.

Identifying and assessing potential risks related to irregularities.
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws
and regulations, we considered the following:• The legal and regulatory framework applicable to Revolut Limited and the industry in which it operates and considered the risk of acts
by Revolut Limited which would be contrary to applicable laws and regulations, including fraud. These included but were not limited
to compliance with the Financial Conduct Authority (“FCA”) regulations, other relevant regulatory bodies, pension legislation and tax
legislation. We focused on laws and regulations that could give rise to a material misstatement in the Group and Parent Company
financial statements.
• The susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur, by considering thenature of the industry, sector and control environment and controls established by the Group to address risks identified by the Group orthat otherwise seek to prevent, deter or detect fraud.
• Due to the acute dependency of the Group on its IT infrastructure we performed an assessment of the IT landscape, performed
bidirectional data flow assessments across product cycles identified as key, and assessed the design of the IT environment and relevant
activity level controls across the customer lifecycle for those products and services.

Audit response to the risks identified
As a result of assessing the above we identified the underdeveloped financial control environment as the key risk in respect of how theaudit was capable of detecting irregularities including fraud.
As we were unable place reliance on relevant IT and business process controls we designed our audit procedures to obtain evidence fromsubstantive procedures and due to the nature of operations focused our procedures on the existence of own cash balances, the existenceof cash and commodities held in client designated bank accounts, and the completeness of client liabilities associated with those cash andcommodities balances held in third party bank accounts.

Risk - Existence of own and client cash and commodities held by the entity as at the year end
Our procedures included the following:
We obtained independent confirmation of 100% of cash balances held on behalf of customers with third parties.
We obtained independent confirmation of 100% of commodities held with third parties.
We obtained independent confirmation of 99.99% of own cash, other high quality liquid assets (HQLAs), and short term financial assets
held with third parties, with appropriate rationalisation and alternative procedures performed on the remaining immaterial 0.01%.

Risk - Completeness of customer liabilities recognised as at the year end
Our procedures included the following:
We performed a reconciliation of brought forward and year end client liabilities via recalculation of transactional e-money activity inthe year.
We used data analytics techniques to independently recalculate total e-money in issue at an individual user level by direct interrogation of
the entity’s IT environment for evidence of understatement of customer liabilities.
We performed analytics over e-money transactional revenues to identify anomalies and outliers in fees levied for indications of fraudulent
revenue recognition.
We performed analytics over certain third party internet review sites for customer sentiment.
We performed analytics of customer account activity behaviours and tested a sample based on risk criteria for evidence of misallocation
and/or misappropriation of customer liabilities.
We reviewed available external complaints data including that recorded by the Bank of Lithuania and compared to internal data source(s)to assess potential incompleteness of customer complaints recorded by the entity.
We reviewed and performed analytics over customer complaints and tested a sample based on a number of risk criteria for indications ofsystemic evidence of understatement of customer liabilities.

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Financial statements

We included as part of our substantive procedures in respect of the revenue and treasury cycles verification of customer existence
procedures (onboarding) for indicators of fictitious customers and accounts.
As we were unable to rely on reconciliation controls, we identified certain reconciliation processes with the entity’s IT systems as a basis toperform substantive procedures in respect of the operation of those reconciliations and interactions with third parties including verification
to cash settlements recorded in the entity’s third party bank accounts.
We obtained confirmations over a number of customer balances and year end transactions direct from customers based on specific risk
criteria and characteristics.
Certain BDO team members opened accounts for the purposes of the audit to initiate customer transactions which we then verified in theentity’s systems to identify contra-indicators in respect of the completeness and accuracy of transactional behaviours in Revolut’s internal
systems and the completeness, accuracy and existence of transactional flows initiated in the app.
In addition to the above our procedures to response to risks included, but were not limited to:
Review of correspondence with and reports to the regulators, including the FCA, the Bank of Lithuania, and other regulatory bodies;• Review of management’s reporting to the Board Audit and Risk Committee in respect of compliance and legal matters;• Enquiring of management and review of internal audit reports in so far as they related to the financial statements;• Identifying and testing journal entries, including those posted with double entries to unusual account combinations;• Reviewing dispute logs, breaches/incidents log, legal expenses and whistleblowing reports.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remainedalert to any indications of fraud or non-compliance with laws and regulations.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the riskof not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflectedin the financial statements, the less likely we are to become aware of it. In addition, the extent to which the audit was capable of detecting
irregularities, including fraud was limited by the matters described in the basis for qualified opinion section of our report.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report
This report is made solely to the Parent Company’s members, as a body, 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 Parent Company’s members 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.

Matthew Hopkins (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
27 February 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Annual Report & Financial Statements 2021

47

Financial statements

Financial statements
Consolidated statement of comprehensive income
For the year ended 31 December 2021

Note

2021
£000

2020
(restated)£000

6636,205

219,931

Cost of sales(196,015)(148,063)

Gross profit

440,190

71,8688(367,478)(274,701

12,13(9,079)(9,629)Impairment (loss) / credit(1,034)

220

Other operating (expense) / income

3,508)

6,781

Profit / (loss) from operations

59,091(205,461)

Revenue

Administrative expenses
Depreciation and amortisation expense

Interest expense

7(21,026)(17,373)

Interest income

7

1,726

2,129

39,791(220,705)(13,451)(2,917)

26,340(223,622)-

38,659Currency translation differences(9,237)(328)

Fair value gain on financial assets held at fair value through comprehensive income

2,602

-

Other comprehensive (loss)/income, net of tax(6,635)38,331

Total comprehensive income / (loss) for the year

19,705(185,291)

Profit / (loss) before tax

Tax (expense) / credit

11

Net profit / (loss) for the year

Other comprehensive income
Items that will not be reclassified to profit or loss
Revaluation gain on intangible assets (cryptocurrencies)
Items that are or may be reclassified subsequently to profit or loss

The accompanying notes form an integral part of these financial statements.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement ofComprehensive Income in these financial statements.
The Company profit for the year ended 31 December 2021 amounted to £19.7m (2020 (restated): loss -£201.6m)

Annual Report & Financial Statements 2021

48

Financial statements

Consolidated Statement of Financial Position
As at 31 December 2021

Note

31 December 2021£000

31 December 2020
(restated)£000

1 January 2020
(restated)£000

Cash and cash equivalents

20

7,052,609

5,055,023

2,462,986

Financial assets at FVOCI

18

1,236,481--

Investment in commodities at FVTPL

1966,35650,366-

Trade and other receivables

16

206,880

153,242

209,825

Inventories

15

7,396

11,282

13,042

7,291

3,856

1,693

AssetsCurrent assets

Current tax assets
Loans and advances to customers

17

4,870

415

-

Derivative financial assets

29

9,294

121

-

8,591,177

5,274,305

2,687,546

Total current assets
Non-current assets
Property, equipment and right-of-use assets

13

25,12837,49738,424

Intangible assets

12

721

411

93,927Loans and advances to customers

17

12,946

961-

Deferred tax assets

11

1,783

345

42

40,57839,214132,393

8,631,755

5,313,519

2,819,939

Total non-current assets
Total assets

Liabilities and equity
Current liabilities
Trade and other payables

22

165,248

143,663

203,830

Loans at amortised cost

24

122

81,812972

Customer liabilities

21

7,361,196

4,637,230

2,367,200

Current tax liabilities

9,374

1,670

-

Lease liability

5,161

5,985

3,593

2,454

1,970

-

7,543,555

4,872,330

2,575,595

Derivative financial liabilities

29

Total current liabilities

Annual Report & Financial Statements 2021

49

Financial statements

Note

31 December 2021£000

31 December 2020
(restated)£000

1 January 2020
(restated)£000

Loans at amortised costs

24

-

-

119,546

Provisions for liabilities

23

1,812

1,788

1,775

9,085

18,943

23,104243

18-

11,14020,749144,425

7,554,695

4,893,079

2,720,020

Non-current liabilities

Lease liability
Deferred tax liabilities

11

Total non-current liabilities
Total liabilities
EquityShare capital

25

-

-

-

Share premium

26

1,287,452

697,444248,814(317,960)(344,300)(159,337)

107,568

67,296

10,442

Total equity

1,077,060

420,440

99,919Total liabilities and equity

8,631,755

5,313,519

2,819,939

Accumulated deficit
Other reserves

26

The accompanying notes form an integral part of these financial statements. The financial statements on pages 51 to 123 were approved and authorisedfor issue by the Board and were signed on its behalf on 27 February 2023.

Nikolay Storonsky
Director
Registered Company number: 08804411

Annual Report & Financial Statements 2021

50

Financial statements

Company Statement of Financial Position
As at 31 December 2021

Note

31 December 2021£000

31 December 2020
(restated)£000

Cash and cash equivalents

20

3,984,868

2,562,779

Financial assets at FVOCI

18

383,670-

Investment in commodities at FVTPL

1966,35650,366

Trade and other receivables

16

200,228

119,043

Inventories

15

7,101

11,161

6,427

3,856

16,255

3,707

4,664,905

2,750,912

AssetsCurrent assets

Current tax assets
Derivative financial assets

29

Total current assets
Non-current assets
Property, equipment and right-of-use assets

13

23,16432,762Intangible assets

12

204

351

Deferred tax assets

11

470

186

Investment in subsidiaries

14

264,886

90,875

288,724

124,174

4,953,629

2,875,086

Total non-current assets
Total assets
Liabilities and equity
Current liabilities
Trade and other payables

22

320,135

198,593

Loans at amortised cost24-

81,812Customer liabilities

21

3,516,981

2,121,085

432

1,178

Lease liability

4,798

5,030

Derivative financial liabilities

6,434

2,139

3,848,780

2,409,837

Current tax liabilities

Total current liabilities

Annual Report & Financial Statements 2021

51

Financial statements

Note

31 December 2021£000

31 December 2020
(restated)
£000

23

1,801

1,788

7,916

15,037

240

-

9,957

16,825

3,858,737

2,426,662

Non-current liabilities
Provisions for liabilities
Lease liability
Deferred tax liabilities

11

Total non-current liabilities
Total liabilities
EquityShare capital

25

-

-

Share premium

26

1,287,452

697,444(306,830)(316,543)

114,270

67,523

Total equity

1,094,892

448,424

Total liabilities and equity

4,953,629

2,875,086

Accumulated losses
Other reserves

26

The accompanying notes form an integral part of these financial statements. The financial statements on pages 51 to 123 were approved and authorisedfor issue by the Board and were signed on its behalf on 27 February 2023.

Nikolay Storonsky
Director
Registered Company number: 08804411

Annual Report & Financial Statements 2021

52

Financial statements

Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
SharecapitalSharepremium

Other
reserves

Retained
lossesTotalequity

£000

£000

£000

£000

£000

As at 1 January 2020 (restated)-

248,814

10,442(159,337)

99,919Loss for the year

-

-

-

(223,622)(223,622)

Other comprehensive income for the year

-

-

(328)

38,65938,331

Total comprehensive loss for the year

-

-

(328)

(184,963)(185,291)--

57,182-

57,182448,535--

448,535

Transactions with owners
Equity-settled share-based compensation
Shares issued during the year
Exercise of share options

-

95

-

-

95

Total transactions with owners-

448,630

57,182-505,812

As at 31 December 2020 (restated)-

697,444

67,296(344,300)

420,440

As at 1 January 2021-

697,444

67,296(344,300)

420,440

Profit for the year

-

-

-

26,34026,340

Other comprehensive loss for the year--

(6,635)-(6,635)

Total comprehensive income for the year--

(6,635)

26,34019,705

Shares issued during the year-

590,008--

590,008

Equity-settled share-based compensation--

47,352-47,352

Transactions with owners

Employee Benefit Trust purchase of own shares

(445)

(445)

Total transactions with owners-

590,008

46,907-

636,915

As at 31 December 2021-

1,287,452

107,568(317,960)

1,077,060

The accompanying notes form an integral part of these financial statements.

Annual Report & Financial Statements 2021

53

Financial statements

Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
SharecapitalSharepremium

Other
reserves

Retained
lossesTotalequity

£000

£000

£000

£000

£000

As at 1 January 2020 (restated)-

248,814

10,456(153,126)

106,144

Loss for the year

-

-

-

(202,076)(202,076)

Other comprehensive income for the year

-

-

(115)

38,65938,544

Total comprehensive loss for the year

-

-

(115)

(163,417)(163,532)

Equity-settled share-based compensation--

57,182-

57,182

Shares issued during the year-

448,630--

448,630

Total transactions with owners-

448,630

57,182-505,812

As at 31 December 2020 (restated)-

697,444

67,523(316,543)

448,424

As at 1 January 2021-

697,444

67,523(316,543)

448,424

Profit for the year

-

-

-

9,713

9,713

Other comprehensive income for the year

-

-

(149)

-

(149)

Total comprehensive income for the year

-

-

(149)

9,713

9,564

Shares issued during the year-

590,008--

590,008

Equity-settled share-based compensation--

47,341-47,341

Transactions with owners

Transactions with owners

Employee Benefit Trust purchase of own shares

(445)

(445)

Total transactions with owners-

590,008

46,896-

636,904

As at 31 December 2021-

1,287,452

114,270(306,830)

1,094,892

The accompanying notes form an integral part of these financial statements.

Annual Report & Financial Statements 2021

54

Financial statements

Consolidated statement of cash flows
for the year ended 31 December 2021
2021

2020

£000

£000

39,791(220,705)Interest expense

21,026

17,373

Interest income(1,726)(2,129)Operating profit/(loss)

59,091(205,461)

Amortisation of intangible assets

176

174

Depreciation of tangible assets

8,903

9,455

Impairment of intangible assets

7,278

-

Impairment of financial assets

1,034

(220)

Share based payment expense

47,351

57,182-38,6596,913

10,625

Net fair value (gains)/losses on derivative financial instruments(8,689)1,850

Operating cash flows before changes in customer balances and hedging arrangements
and changes in working capital

122,057(87,736)• Decrease in inventories

3,886

1,760

• Loans extended to directors(3,200)-• Loans settled by directors

3,216

-

(69,468)(27,337)• Increase/(decrease) in trade and other payables

94,489(1,147)

Operating cash flows before changes in customer balances and hedging arrangements

150,980(114,460)

2,174,430

2,263,427(8,186)(7,687)(63,979)

17,447• Increase in customer liability in respect of cryptocurrencies-

136,142• Increase in cryptocurrencies-(135,970)

15,54349,904• Increase in investment in commodities at FVTPL(15,990)(50,366)• Net increase in loans and advances to customers(16,440)(1,389)• Net increase in customer deposits

533,970

49,8752,770,328

2,206,923

Cash flows from operating activities
Profit / (loss) before tax
Adjustments for non-cash items:

Fair value losses on customer liabilities in respect of cryptocurrencies
Increase in provisions net of payments madeWorking capital movements:• Increase in trade and other receivables

Cashflows from customer balances and hedging activities:• Net increase in e-money in issue• Increase in negative customer balances• (Increase)/decrease in net settlement balances• Increase in customer liability in respect of commodities

Annual Report & Financial Statements 2021

55

Financial statements

R&D Credit Received

3,856

1,342

Tax paid(9,901)(301)

2,764,283

2,207,964

Purchases of property and equipments(1,684)(6,326)

Payments to develop or acquire intangible assets(5,168)

(6)

1,726

2,129

Purchase of financial assets at FVOCI(1,242,842)-

Net cash used in investing activities(1,247,968(4,203)

601,878448,535-

95

Interest paid (including interest paid on lease liabilities)(19,213)(18,329)

Principal payments on lease liabilities(4,740)(3,759)Loans repaid(81,690)(37,734)

Net cash from financing activities

496,235

388,808

Net increase in cash and cash equivalents

2,012,550

2,592,568

Cash and cash equivalents at beginning of year

5,055,023

2,462,986(14,964)(531)

7,052,609

5,055,023

Own cash and cash equivalents

1,572,726

486,743

Cash held at central banks and other banks in respect of customers

5,479,883

4,568,280

Cash and cash equivalents at end of year

7,052,609

5,055,023

Net cash flows from operating activities

Cash flows from investing activities

Interest received

Cash flows from financing activities
Proceeds from issue of ordinary shares net of transaction costs
Proceeds from exercise of share options

Effect of exchange rates on cash and cash equivalents
Cash and cash equivalents at end of year

Cash and Cash equivalents at the end of the year comprise of

The accompanying notes form an integral part of these financial statements.

Annual Report & Financial Statements 2021

56

Financial statements

Notes to the consolidated
financial statement
1.

General information

Revolut Ltd (the “Company”) and its subsidiaries (together, the “Group”) provides electronic money and payment services through a
prepaid card, currency exchange, peer to peer payments, cryptocurrency and commodity exposures, share trading and consumer loans
and credit cards for retail users. It also offers a similar proposition to business customers encompassing multi-currency exchange,
prepaid corporate cards, and international and domestic bank transfers to freelancers, and Small and Medium Enterprises.
The Company is a private company limited by shares and incorporated in England & Wales. The registered office and the principal placeof business is 7 Westferry Circus, Canary Wharf, London E14 4HD.

2.

Basis of preparation

The consolidated financial statements of the Group have been prepared in compliance with the International Financial ReportingStandard (“IFRS”) as adopted by the United Kingdom (“UK”) and the Companies Act 2006. The individual financial statements ofRevolut Ltd have been prepared in accordance with Financial Reporting standard 101, ‘Reduced Disclosure Framework’ (FRS 101) andthe Companies Act 2006.
The consolidated and individual financial statements are prepared on a going concern basis (as disclosed in note 3), under the historicalcost convention, as modified by the recognition of certain financial assets at fair value, namely financial assets at fair value throughother comprehensive income (‘FVOCI’) and Investment in commodities at fair value through profit and loss (‘FVTPL’).
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management toexercise its judgement in the process of applying the Group and Company accounting policies. The areas involving a higher degree ofjudgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 5.
The Company has taken advantage of the exemption in section 408 of the Companies Act from presenting its individual profit andloss account.

2.1

Separate financial statement of the Company Exemption under FRS 101
The following exemptions from the requirements of IFRS have been applied in the preparation of individual financial statementsof Revolut Ltd, in accordance with FRS 101:
• IAS 7, ‘Statement of Cash flows’.
• Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management compensation).
• The requirements in IAS 24, ‘Related party disclosures’, to disclose related party transactions entered into between two or moremembers of a group.

3.

Going concern

The financial statements are prepared on a going concern basis as the Directors are satisfied that the Group has the available resources
to continue in business for a period of at least 12 months from the date of approval of the financial statements.
The going concern assessment is based on the detailed forecast prepared by management and approved by the Board. As part of
the going concern review, the Directors have considered severe, but plausible, downside scenarios to stress test the viability of thebusiness. These downside scenarios covered reduction in revenues, profitability, cash position and liquidity as well as the Group’s ability
to meet its regulatory capital and liquidity requirements.
Appropriate assumptions have been made in respect to revenue growth and profitability, based on the economic outlook over theforecast period. Appropriate sensitivities have been applied in order to stress test the base plan, considering situations in which future
costs are substantially higher than the forecast and future trading is less than forecasted. Management expects that sufficient liquidity
and regulatory capital requirement headroom is maintained throughout the forecast period.
The Directors have made inquiries of management and considered forecasts for the Group and have, at the time of approving thesefinancial statements, a reasonable expectation that the Group has adequate resources to continue in operations for a period of at least
12 months from the date of approval of the financial statements.

Annual Report & Financial Statements 2021

57

Financial statements

4.

Notes to the consolidated financial statement

Significant accounting policies

The principal accounting policies applied in the preparation of these consolidated and separate financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.

4.1

Adoption of new and revised standards
a. Changes in accounting policy
The Group consolidated financial statements were historically presented under Financial Reporting Standard 102, ‘The Financial
Reporting Standard applicable in the United Kingdom and the Republic of Ireland’ (“FRS 102”). As of 1 January 2020, the Grouptransitioned to IFRS and Revolut Ltd adopted FRS 101 as its accounting framework for individual financial statements.
The historical information previously reported was restated as of the ‘date of transition’ being 1 January 2020, as well as in thecomparative period i.e. 31 December 2020. The impact of the change in policy on the financial statements of the Group andthe Company is presented in note 4.24. The Company has taken the disclosure exemption available under FRS 101 and has notpresented a statement of financial position at the date of transition.
b. New standards, interpretations, and amendments adopted from January 1, 2021
New standards impacting the Group that have been adopted in the financial statements for the year ended December 31,
2021 are:• Interest Rate Benchmark Reform – Phase 2 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16.
• The adoption of the new standards listed above have not had a significant impact on the consolidated financial statements of
the Group for the year ended December 31, 2021.
c. New standards, interpretations, and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided not to adopt early.

Effective for annual periods
beginning on or after

New standards or amendments
COVID-19-Related Rent Concessions beyond 30 June 2021 - Amendments to IFRS 16

1-Apr-21

Onerous Contracts – Cost of Fulfilling a Contract - Amendments to IAS 37

1-Jan-22

Annual Improvements to IFRS Standards 2018–2020 – Amendments to IFRS 1, IFRS 9, IFRS 16
and IAS 41

1-Jan-22

Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16

1-Jan-22

Reference to the Conceptual Framework - Amendments to IFRS 3

1-Jan-22

Classification of Liabilities as Current or Non-current - Amendments to IAS 1

1-Jan-23

IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts

1-Jan-23

Disclosure of Accounting Policy - Amendments to IAS 1 and IFRS Practice Statement 2

1-Jan-23

Definition of Accounting Estimate - Amendments to IAS 8

1-Jan-23

Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction – Amendments
to IAS 12 and IFRS 1

1-Jan-23

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Amendments to IFRS 10 and IAS 28

Deferred indefinitely

Management does not expect that the adoption of the standards listed above will have a material impact on the annual
financial statements of the Group in future periods.

Annual Report & Financial Statements 2021

58

Financial statements

4.2

Notes to the consolidated financial statement

Basis of consolidation
The Group consolidated financial statements include the financial statements of the Company and all of its subsidiary
undertakings made up to 1 January 2020, 31 December 2020 and 31 December 2021.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when it is exposed to, or has rights to,variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and are de-consolidated from thedate that control ceases. Inter-company transactions, balances and unrealised gains on transactions between companies within
the Group are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset. Group accounting policies are consistently applied to all entities and transactions.
Where a subsidiary has different accounting policies to the group, adjustments are made to those subsidiary financial statements
to apply the group’s accounting policies when preparing the consolidated financial statements.
All intra-group transactions, balances, income and expenses are eliminated on consolidation. Adjustments are made to eliminate
the profit or loss arising on transactions with associates and equity accounted joint ventures to the extent of the Group’s interestin the entity.

4.3

Foreign currency translation
Functional and presentation currency
The Group consolidated financial statements are presented in pound sterling. The Company’s functional and presentation
currency is the pound sterling.

Transactions and balances
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured athistorical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fairvalue are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit and loss. Non-monetary assets
and liabilities carried at fair value and denominated in foreign currencies are translated at the rates prevailing at the date when
the fair value was determined.

Translation
On consolidation, the results of overseas operations are translated into sterling at the average exchange rates for the year. All
assets and liabilities of overseas operations are translated at the exchange rate ruling at the statement of financial position date.
Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at
actual rate are recognised in other comprehensive income.

4.4

Revenue
The Group recognises revenue according to the principles of IFRS 15 using the five-step model:
1.

Identify the contracts with customers

2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction to the performance obligations in the contract
5. Recognise the revenue when (or as) the entity satisfies the performance obligation
The group derives its revenue from contracts with customers by transferring the following services:

Card and interchange fees
Card and payments revenue represents transactional related fees, including interchange fees receivable from the Group’s card
issuing partners, merchant acquiring fees, fair usage fees for cash withdrawals outside of customer plans allowances and top
up fees.
Card and interchange revenue is deemed to include a single performance obligation under IFRS 15 ‘Revenue from contracts
with customers’, namely the completion of a card transaction for a customer and as such, revenue is recognised at the time of
the transaction.

Annual Report & Financial Statements 2021

59

Financial statements

Notes to the consolidated financial statement

Subscription fees
Subscription revenue represents monthly and annual subscription fees charged to retail and business customers. Subscription
service has two distinct performance obligations: a card delivery service and an ongoing payment processing service. Revenue forthe card delivery is recognised on the day the card is ordered by the customer. Revenue for the subscription service is recognisedin the month to which the subscription relates. Where subscription fees are received in advance (namely annual subscriptionfees) they are initially recognised as contract liabilities and are recognised as revenue in the income statement on a straight-line
basis over the period of the subscription.
Any termination fees for existing subscriptions services ending early are recognised upon the termination date.

Foreign exchange fees
Foreign exchange revenue represents mark ups fees charged on market exchange rates for weekend transactions and lessfrequently traded currencies, and fair usage fees where customers undertake additional exchange transaction volumes outsideof their plan allowances. It also includes the fair value movements on derivative financial instruments used to hedge the Group’s
foreign exchange exposure as a result of its customer foreign exchange activities.
Foreign exchange revenue has a single performance obligation namely the exchange of one currency for another between
customer’s currency pockets. The revenue is recognised at the point of this exchange.

WealthWealth comprises revenues from the Group’s cryptocurrency, commodities, trading and vault products. Where the Group acts
as an agent on behalf of its customers to buy or sell cryptocurrencies and listed company shares, the revenue represents any
exchange markup/commission charged, and any applicable fair usage fees.
Buying or selling cryptocurrencies or listed company shares has a single performance obligation, namely the execution of acustomer’s order and as a result, revenue is recognised at the time of the transaction.
Prior to 27 July 2020 the Group had exposure to cryptocurrencies and the underlying commodities when entering into contracts
with customers.
When entering into these contracts with customers the Group charges a markup on the market exchange rate for the exchange of
E-Money, and similarly when the customer settles the contract and receives E-Money.
Entering into or closing commodities contracts (and cryptocurrency contracts prior to 27 July 2020) comprises two performanceobligations, namely one when the contract is entered into and one when it is settled. Each of these obligations incurs a separate
fee and as such the relevant markup is recognised as revenue when the contract is entered into and when it is settled.
While open, the customer contracts are accounted for at fair value through profit or loss within revenue. The policies andmethodologies associated with the determination of fair value are included in note 29.2.
The Group hedges its exposure to these customer contracts through holding its own investments in commodities (andcryptocurrencies prior to 27 July 2020). The net amount representing the change in fair value of the contracts with customers
and the associated hedging investments are presented net in the Wealth revenue line. The policies and methodologies associatedwith the determination of fair value are included in note 29.2.
The exception to this is fair value gains on cryptocurrencies above their original cost (prior to 27 July 2020) which is recognised inother comprehensive income (see note 4.14).

Other
Other revenue mainly comprises:• commission earned on the sale of insurance products to customers and is recognised at the time of the transaction.
• fees charged to customers in respect of remittances facilitated at customers request.
• Remaining performance obligations• IFRS 15 allows the Group to exclude from its remaining performance obligations disclosure any performance obligations which
are part of a contract with an original expected duration of one year or less. Additionally, any variable consideration, for which
it is probable that a significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty
associated with the variable consideration is subsequently resolved, is not subject to the remaining performance obligations
disclosure because such variable consideration is not included in the transaction price (e.g. investment management fees).

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4.5

Notes to the consolidated financial statement

Cost of sales
Cost of sales primarily relates to fees incurred by the Group in the processing and settlement of transactions, the costsof providing cards to customers and the costs of any redress payments made to customers who have been the subject offraudulent transactions.

Processing and settlement of transactions
These are costs primarily payable to the card schemes of which Revolut is a member. Processing and settlement of transaction
costs are presented net of rebates received from payment scheme providers for scheme fee costs.

Providing cards to customers
These are the costs incurred by the Group to purchase, personalise and distribute cards to customers. Card stock is initiallyrecognised as inventory until the card is shipped to a customer at which point it is expensed.

Redress payments
These are amounts that the Group incurs where customers have been subject to fraudulent transactions or where charges havecaused a customer’s account to have a negative balance.

4.6

Employee benefits
The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements, defined
contribution pension plans and share-based payments.

Short term benefits
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period
in which the service is received. A liability is recognised for the amount expected to be paid if the Group has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.

Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which
the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further
payment obligations.
The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due.
Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held
separately from the Group in independently administered funds.

Share-based paymentsGroup
The Group operates two share option plans, a Company Share Option Plan (“CSOP”) and an Unapproved Option Plan (“UOP”)
and a share scheme, the Growth Shares scheme. The purpose of these plans is to incentivise and remunerate the Group’s
employees. Further details on these schemes are out in note 27. These schemes meet the definition of equity settled share-based
payment schemes.
Estimating fair value for share-based compensation transactions requires determination of the most appropriate valuation
model, which depends on the terms and conditions of the grant. This estimate also requires determination of the mostappropriate inputs to the valuation model including the expected life of the share awards, volatility and dividend yield and making
assumptions about them. The Group measures the fair value of equity-settled transactions with employees at the grant dateusing a Black-Scholes Model.
The fair value of the awards is recognised as an expense in the Consolidated Statement of Comprehensive Income over thevesting period. The cumulative expense at each reporting date is based on the total number of awards that are expected to vest,
taking into account the service conditions and any non-market performance conditions such that the total cumulative amountrecognised as an expense over the vesting period is based on the number of options that eventually vest. The Group has toestimate the expected yearly percentage of employees that will stay within the Group at the end of the vesting period of theshare awards in order to determine the amount of share-based compensation expense charged to the statement of operations.
Where the terms and conditions of options are modified before they vest, to the extent that there is an increase in the fair valueof the options, measured immediately before and after the modification, this increase is also recognised as an expense in theConsolidated Statement of Comprehensive Income over the remaining vesting period.

Share based payments - Company
Where the Company grants share options to employees of subsidiary companies, the relevant charge is recognised as an increasein cost of investment in subsidiaries.

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4.7

Notes to the consolidated financial statement

Interest expense
Interest expenses are charged to interest expense in the Consolidated Statement of Comprehensive Income over the term of
the debt using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash
payments through the expected life of the financial instrument.
Issue costs are initially recognised as a reduction in the proceeds of the associated instrument, when considered incremental anddirectly attributable to the instrument issued.

4.8

Interest income
Interest income using the Effective Interest Rate method
Interest income is recognised using the effective interest rate on: credit cards and loans arrangements entered into withcustomers; financial assets held at fair value through other comprehensive income; safeguarded funds and cash andcash equivalents.
The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of thefinancial instrument to the gross carrying amount of the financial asset (before adjusting for expected credit losses).
Interest income from non-credit impaired financial assets is recognised by applying the effective interest rate to the grosscarrying amount of the asset; for credit impaired financial assets, the effective interest rate is applied to the net carrying amountafter deducting the allowance for expected credit losses.

4.9

Current and deferred taxation
The tax charge/(credit) comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive
Income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an
item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax credit is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by
the Statement of Financial Position date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the statementof financial position date, except that:• The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversalof deferred tax liabilities or other future taxable profits;• Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and• Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and theGroup can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations,when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions
available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed fortax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the Statement of
Financial Position date.

4.10 Property, equipment and right of use assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location andcondition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using thestraight-line method.
Depreciation is provided on the following basis:
Fixtures and fittings		

- 10% straight line

Office equipment		

- 25% straight line

Computer equipment		

- 33% straight line

The assets’ residual values, useful lives and depreciation methods are reviewed annually, and adjusted prospectively if
appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in
Administrative expenses in the Consolidated Statement of Comprehensive Income.

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Notes to the consolidated financial statement

4.11 Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right tocontrol the use of an identified asset for a period of time in exchange for consideration. As at December 31, 2021 and 2020, andJanuary 1, 2020, the Group is a lessee in its lease arrangements, and is not a lessor.
The Group applies a single recognition and measurement approach for all lessee leases, except for short-term leases (defined asleases with a lease term of 12 months or less) and leases of low-value assets (defined as leased assets, when new, with a value offive thousand pounds or less). The Group recognizes lease liabilities representing obligations to make lease payments and rightof-use assets representing the right to use the underlying assets.

Right-of-use assets
The Group recognizes 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 recognized,
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 assets. If ownership of the leased asset transfers to the Group 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, otherwise the right of use asset isamortised over the duration of the lease agreement. The depreciation starts at the commencement date of the lease.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in note 4.13 , Impairment of
non-financial assets.
The right-of-use assets are presented as along with property and equipment in the consolidated statement of financial position.

Lease liabilities
At the commencement date of the lease, the Group recognizes 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 anylease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid underresidual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising theoption to terminate.
Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-ofuse asset. The related payments are recognized as an expense in the period in which the event or condition that triggers thosepayments occurs and are included in the line general and administrative expense in the statement of operations (unless they are
incurred to produce inventories, whereby they will be included as part of cost of goods sold).
In calculating the present value of lease payments, the Group uses the rate implicit in the lease if it is readily determinable.
However, if the rate implicit in the lease is not readily determinable, the Group uses its Incremental Borrowing Rate (IBR) at thelease commencement date. After the commencement date, the amount of lease liabilities is increased to reflect the accretionof 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 achange in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase theunderlying asset.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease andassociated non-lease components as a single arrangement. The Group has elected this practical expedient and will not separate
lease and non-lease components.

Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to those leases that have a lease term of 12 months or lessfrom the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition
exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets arerecognized as expense on a straight-line basis over the lease term unless another systematic basis is more representative of thetime pattern in which economic benefits from the leased assets are consumed. The Group recognised £0.9m in lease expense
related to short-term and low-value assets for the period (2020:£1.7m). The Company had nil expense for short-term and low
value leases in the same period (2020:£0.4m).

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Notes to the consolidated financial statement

4.12 Intangible assets
Cryptocurrencies
Pre-27 July 2020
Prior to 27 July 2020, the legal and beneficial ownership of the cryptocurrencies were held by Revolut Ltd, and they were
determined to meet the definition of cryptocurrencies included in the FCA policy statement issued on 22 July 2019 and wererecognised on the Group’s Statement of Financial Position applying the following accounting policy.
There remains limited guidance in respect of the treatment of cryptocurrencies under IFRS.
The International Financial Reporting Interpretations Committee (“IFRIC” or “the Committee”) reached an agenda decisionin June 2019 in respect of the recognition and measurement of cryptocurrencies under IFRS. The agenda paper “Holdings ofCryptocurrencies” concluded that where cryptocurrencies are not held for sale in the ordinary course of business an entity
applies IAS 38 (Intangible Assets). Consistent with the tentative agenda decision of March 2019, the Committee concluded thatcryptocurrencies do not meet the criteria of financial assets, or cash and cash equivalents.
Therefore, in the absence of a specific standard, the Group recognised its cryptocurrencies as intangible assets.
The cryptocurrencies that the Group held are subject to significant trading volume on a number of cryptocurrency exchanges,
including trading to and from fiat currencies, and therefore an active market had been identified for all the cryptocurrencies heldby the Group.
Therefore, up to 27 July 2020 cryptocurrencies were recognised at fair value using the revaluation model under IAS 38. Any
revaluation gains and losses above the assets’ original cost were recognised in other comprehensive income, with the revaluation
gains and losses below the assets’ original cost being recognised in profit or loss. The corresponding fair value movements on thecustomer liability were recognised in profit or loss as set out in accounting policy 4.21 below.
The Group’s cryptocurrencies, subject to annual review, were considered to have indefinite lives and as such were not subject
to amortisation.

Post-27 July 2020
On 27 July 2020, the contractual arrangements with the Group’s customers were amended such that from that date Revolut Ltd isacting as an agent and nominee on behalf of the customer to facilitate the purchase of cryptocurrencies in the customer’s name.
As a result, the customer holds the beneficial interest in the cryptocurrencies and therefore is subject to the risks and rewardsof the asset. As Revolut Ltd is no longer exposed to the risks and rewards of the cryptocurrencies, they have been derecognisedfrom the Group’s statement of financial position, along with the corresponding liability to the customer in relation to the assets.

Intangible assets acquired separately - Computer software
Computer software is stated at cost less accumulated amortisation and accumulated impairment losses. Computer software isamortised on a straight-line basis over its estimated useful life, which is assessed to be 3 years.

Intangible assets acquired in the business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are recognised initially at their fairvalue at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Derecognition of intangible asset
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains orlosses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and thecarrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

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Notes to the consolidated financial statement

4.13 Impairment of non-financial assets
At each statement of financial position date non-financial assets not carried at fair value are assessed to determine whether
there is an indication that the asset (or asset’s cash generating unit) may be impaired. If there is such an indication therecoverable amount of the asset (or asset’s cash generating unit) is compared to the carrying amount of the asset (or asset’s
cash generating unit).
The recoverable amount of the asset (or asset’s cash generating unit) is the higher of the fair value less costs to sell and value
in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of theasset’s (or asset’s cash generating unit’s) continued use. These cash flows are discounted using a pre-tax discount rate that
represents the current market risk free rate and the risks inherent in the asset.
If the recoverable amount of the asset (or asset’s cash generating unit) is estimated to be lower than the carrying amount, thecarrying amount is reduced to its recoverable amount. An impairment loss is recognised in the profit and loss account, unlessthe asset has been revalued when the amount is recognised in other comprehensive income to the extent of any previously
recognised revaluation. Thereafter any excess is recognised in profit or loss.
If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset’s cash generating unit) is increased
to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed thecarrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised
in prior periods. A reversal of an impairment loss is recognised in the profit and loss account.

4.14 Financial instruments
Recognition of financial assets
Financial assets are recognised when the Group enters into a contract that results in current or future economic value to theGroup. Financial assets are initially measured at fair value and are accounted for on a trade date basis.

Classification and measurement of financial assets
The Group classifies its financial assets at either amortised cost, fair value through profit or loss or fair value through othercomprehensive income.
In order to determine the appropriate classification of non-derivative financial assets, the Group assesses the objective of thebusiness model in which the financial asset is held, and for those measured at amortised cost whether the contractual cash flowsof the financial asset are “solely payments of principal and interest” (SPPI).
The Group assesses its business models at a portfolio level based on its objective for the relevant portfolio, how performanceof the portfolio is measured and reported, how management are compensated and the frequency and reasons for asset sales
from the portfolio. Financial assets are reclassified when, and only when, the Group changes its business model for managing
the assets.

Financial assets at amortised cost
Financial assets in portfolios where the business model is to hold the assets to collect the contractual cash flows, and where
those cash flows represent solely payments of principal and interest, are measured 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 (with the exception of trade and other receivables with an expected term of less than
one year where the Group applies the practical expedient to recognise these amounts at transaction price), 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, loans and advances to customers, trade and otherreceivables, settlement receivables and amounts recoverable under long term contracts.

Financial assets at fair value through other comprehensive income
Financial assets in portfolios where the business model is to hold the assets to collect the contractual cash flow or to be sold andwhere those cash flows represent solely payments of principal and interest.
Financial assets measured at fair value through other comprehensive income are initially recognised at fair value plus transaction
costs that are directly attributable to their acquisition and are subsequently measured at fair value.
Unrealised gains or losses, other than loss allowances for expected credit losses, arising from financial investments measured
at fair value through other comprehensive income are reported in equity (in the financial investment reserve) and in othercomprehensive income in the Statement of Comprehensive Income, until such investments are sold, collected or otherwise
disposed of.
On disposal of an investment, the accumulated unrealised gain or loss included in equity is recycled to the Income Statement forthe period and reported in Other operating (expense)/income. Gains and losses on disposal are determined using the fair value ofthe investment at the date of derecognition.

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Notes to the consolidated financial statement

Financial assets at fair value through profit or loss
Financial assets that do not meet the criteria to be measured at amortised cost or fair value through other comprehensive income
are measured at fair value, with changes in fair value recognised in profit or loss in the consolidated statement of comprehensive
income. These financial instruments include derivative financial instruments.

Derecognition
Financial assets are derecognised when the contractual right to receive cash flows has expired or when the Group has transferred
its contractual right to receive the cash flows from the assets and either (i) substantially all of the risks and rewards of ownershiphave been transferred; or (ii) the Group has neither retained nor transferred substantially all of the risks and rewards but has
transferred control.

Impairment of financial assets
In accordance with IFRS 9, the Group recognises impairment loss allowances for expected credit losses (“ECLs”) on financial
assets that are measured at amortised cost or fair value through other comprehensive income. These include loans andadvances to customers, trade and other receivables, settlement receivables, debt securities and amounts recoverable under longterm contracts.
Changes to the IFRS 9 model for impairment of financial assets are approved by the Group Credit Risk Committee or Group
Model Risk Committee depending on the nature of the change. Material changes are escalated to the Group Asset and Liability
Committee and to the Board where applicable.
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 asignificant financing component. It may also be applied on an optional basis to trade receivables and contract assets that docontain 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 of the Group’s trade receivables are considered to qualify for the simplified approach (as they have terms of less than
one year and therefore do not contain a significant financing component), and therefore on initial recognition an impairment
provision is required for expected credit losses arising from default events expected to occur over the life of the financial asset(“lifetime ECL”).
The Group currently does not have any purchased or originated credit impaired financial assets.
For loans and advances to customers, amounts recoverable on long term contracts, and amounts due from other Group
companies in the Company financial statements, the general approach to impairment is applied. This follows a three-stage modeland 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 thenext 12 months (a “12-month ECL”) is required on initial recognition - when a financial asset is first recognised it is assigned toStage 1;
• Stage 2 – Financial assets which have experienced a significant increase in credit risk since initial recognition, against which alifetime 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.
Interest income on assets in Stages 1 and 2 is recognised using the effective interest rate method on the gross carrying value ofthe assets. For assets in Stage 3 interest income is recognised using the effective interest rate method on the carrying value ofthe assets net of the ECL provisions.

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Notes to the consolidated financial statement

Significant increase in credit risk
Stage 2 includes financial assets that have had a significant increase in credit risk since initial recognition, but that do not have
objective evidence of being credit impaired.
For retail credit risks, Stage 2 includes assets for which any of the following SICR indicators are present as at the reporting date,that were not present at initial recognition:
1.

Obligors on watchlist status;

2. Obligors on forborne performing status (i.e., forbearance with material concession);
3. Obligors not eligible for forbearance measures based on their risk assessment;
4. Facilities more than 30 days past due;
5. Facilities with a significant increase in lifetime point-in-time forward looking PD compared to initial recognition.
This occurs if:
a. The PD has increased by more than 2.5 times (this would be equivalent to downgrade by approximately 2 or more notches
according to Revolut’s internal rating scale)b. The PD has increased by more than 0.5% in absolute terms (to avoid classification as Stage 2 of obligors still being withlow risk despite a relative PD change exceeding 2.5 times).
SICR indicators in points 1 to 3 above are evaluated at obligor level, while the ones in points 4 and 5 are evaluated at individual
financial instrument level.
For wholesale credit risks, a low-risk exemption applies, such that all investment grade obligors will be allocated to Stage 1.
Stage 2 assets will include non-investment grade exposures which have experienced a downgrade by 2 or more notches based
Revolut’s internal rating scale as at the reporting date compared to initial recognition and this results in a PD increase of morethan 0.5% in absolute terms.
Transfers from Stage 2 back to Stage 1 will be performed when none of SICR indicators are present as of the reporting date.
Any changes in the criteria used to determine SICR follow the same approval pathway described for the overall IFRS 9 model.

Definition of default and credit impaired asset
Assets which are past due by more than 90 days, or where the Group considers it unlikely that the obligor will be able to pay its
obligations, are considered to be in default for IFRS 9. Events that trigger inclusion in default include:• the customer filing for bankruptcy or Individual Voluntary Agreement• the customer is deceased• tthe overdraft or loan has been renegotiated because the customer’s condition has deteriorated. As an example, this includes
cases where a specific repayment plan has been agreed and interest has been frozen• the customer has requested ‘breathing space’ i.e. when the Bank agrees to give the customer some time in which they won’t becontacted about their arrears at all and fees or interest is frozen.
Default status will be applied at an obligor level such that where any one facility is in default, all facilities of that obligor will beconsidered in default.

Calculation of expected credit losses
The expected credit loss provision is calculated using the three following inputs:• Probability of default (“PD”) – the likelihood of default within a given time frame, either 12-months (for Stage 1 assets) or thelife of a financial asset (for Stages 2 and 3 assets). PD is determined with reference to internal and external scorecards basedon customer characteristics at origination and are subsequently measured based on client behaviour;• Loss given default (“LGD”) – the net value of loss in the event of a default; and• Expected balance at default (“EAD”) – the gross value of loss in the event of a default. EAD is determined as the gross carrying
amount for drawn balances and a fraction of the available credit based on the utilisation of credit lines for undrawn balances.
The expected credit loss provision on the outstanding financial assets at the statement of financial position date is calculated
by multiplying the PD (dependent on the stage of the asset) by the LGD and EAD, taking into account the contractual period ofcredit risk exposure from initial recognition in the case of loans. For credit cards, where the exposure to credit risk is not limited
to the contractual period, the expected life is calculated based on the estimated life of the loan and undrawn facility.
The measurement of the ECL provisions also takes into account all reasonable and supportable information, including forward
looking economic scenarios to calculate a probability weighted forward looking estimate.
Economic scenarios are currently derived from macro forecasts sourced from external providers and weightings determinedaccording to expert judgement.
Details on the ECL calculation approach are contained in jurisdiction specific methodologies, respectively for wholesale and retailcredit exposures.

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Notes to the consolidated financial statement

Modification of contractual terms
Where the contractual terms of financial assets are renegotiated or modified and the financial asset was not derecognised, its
gross carrying value is adjusted to reflect the new contractual cash flows discounted at the original effective interest rate with again or loss recognised in the consolidated statement of comprehensive income.

Write offs
Financial assets will be written off, either partially or in full, against the related allowance once there is no realistic prospect ofrecovery and the amount of the loss has been determined. Subsequent recovery of amounts written off are recognised against
the amount of impairment losses recognised in the consolidated statement of comprehensive income.

Recognition and measurement of financial liabilities
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 fair value (net of issue costs in the case of loans and borrowings) andsubsequently measured at their amortised cost using the effective interest rate method. They include loans and borrowings, tradeand other payables, and customer liabilities for E-Money in issue and customer deposits.
Non-derivative financial liabilities that are measured at fair value through profit or loss are measured at fair value with changes
in fair value recognised in the Consolidated Statement of Comprehensive Income . These financial instruments include financial
liabilities initially designated as fair value through profit or loss to avoid an accounting mismatch including customer liabilities inrespect of cryptocurrencies (prior to 27 July 2020) and commodities, where the associated assets are accounted for at fair value.
Derivatives, including foreign currency and precious metals swaps and foreign currency forward contracts are measured at fairvalue through profit or loss. Derivatives are initially recognised at fair value on the date a derivative contract is entered into andare subsequently re-measured at their fair value.
Interest expense is charged to the Consolidated Statement of Comprehensive Income using the effective interest rate method.
Financial liabilities are derecognised when the Group has either discharged the liability through settlement, or where it has beenlegally released from primary responsibility for the liability by process of law or by the creditor.

Offsetting of financial instruments
Financial assets and liabilities are offset, and the net amount is reported in the Statement of Financial Position when, andonly when, there is a legally enforceable right to offset the recognised amounts with an intention to settle on a net basis, oralternatively to realise the asset and settle the corresponding liability simultaneously.
Income and expenses are presented on a net basis only when permitted by the accounting standards.

Hedge accounting
The Group hedges its net investment in foreign operations. To achieve this the Group enters into derivative currency contracts
to hedge changes in the net investment of foreign operations arising from movements in the forward exchange rate. To theextent that the hedge is effective, gains and losses arising on the derivative are recognised in other comprehensive income. The
ineffective portion of such hedges is recognised in profit or loss.

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Notes to the consolidated financial statement

4.15 Investments in subsidiaries
Investments in subsidiaries which are stated in the accounts of the Company are measured at cost less accumulated impairment.

4.16 Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than
24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition
and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In Europe client funds are held in segregated accounts with authorised credit institutions as part of the Group’s safeguarding
policy. In other jurisdictions the funds are held separately from the Group’s own cash resources and are safeguarded through theprovision of a bank guarantee from a third party authorised credit institution.
In the US, E-Money services are provided through partnerships with authorised credit institutions to provide the consumer
protection, and the client funds and the associated customer liability are held on the statement of financial position of therelevant financial institution, and therefore are not recognised on the Group’s Statement of Financial Position.

4.17 Investment in commodities
These investments represent holdings in precious metals that are held to hedge the Group’s exposure to movements incommodity prices on its customer contracts. As these investments are not held for sale in the ordinary course of business, in theprocess of production for such sale, or in the form of materials or supplies to be consumed in the production process or in therendering of services they are not considered to meet the definition of inventory.
Accordingly, they are classified as other current asset investments in the Statement of Financial Position, and as they are highly
liquid assets, which are frequently traded in an active market, with an observable market price, the Group’s accounting policy is toaccount for these investments at fair value through profit or loss. The fair value gains and losses on investments in commodities
are recognised in revenue along with the corresponding fair value gains and losses on the associated customer liability (seenote 4.21).

4.18 Settlement receivables
Settlement receivables include balances arising from timing differences in the Group’s settlement process between the cash
settlement of a transaction and the recognition of the associated liability (for example, customer liabilities – E-Money in issue).
When customers fund their E-Money account using their bank account, or a credit or debit card, or sell stocks or cryptocurrencies
via our trading and cryptocurrency exchange partners, there is a clearing period before the cash is received or settled. This period
is usually within 5 business days.

4.19 Inventories
Inventories are stocks of Basic, Premium and Metal plan cards for new and existing users held at the Group’s fulfilment partner
warehouses and are stated at the lower of cost (adjusted for loss of service potential if applicable) and net realisable value (NRVor replacement cost). Inventories are recognised as an expense when the card is shipped to a customer.
Cost is determined using the weighted average cost to produce, including taxes and duties and transport and handling directly
attributable to bringing the inventory to its present location and condition.
At each statement of financial position date, inventories are assessed for impairment. If inventory is impaired, the carrying
amount is reduced to its selling price less costs to complete and sell and the impairment loss is recognised immediately in profit
or loss. Where a reversal of the impairment charge is required the impairment charge is reversed, up to the original impairment
loss, and is recognised as a credit in profit or loss.

4.20 Provisions and contingencies
Provisions
Provisions are made where an event has taken place that gives rise for the Group to a legal or constructive obligation thatprobably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of
the obligation.
Provisions are charged as an expense to the Consolidated Statement of Comprehensive Income in the year that the Group
becomes aware of the obligation and are measured at the present value of the expenditures expected to be required to settle theobligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. The increase in the provision due to passage of time is recognised as an interest expense.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.

Contingencies
Contingent liabilities are not recognised, except those acquired in a business combination. Contingent liabilities arise as aresult of past events when (i) it is not probable that there will be an outflow of resources or that the amount cannot be reliably
measured reliably at the reporting date or (ii) when the existence will be confirmed by the occurrence or non-occurrence of
uncertain future events not wholly within the group’s control.
Contingent liabilities are disclosed in the financial statements unless the probability of an outflow of resources is remote.
Contingent assets are not recognised, but might be disclosed in the notes to the financial statements.

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Financial statements

Notes to the consolidated financial statement

4.21 Customer liabilities
E-Money in issue
The Group recognises a liability upon the issue of electronic money to its customers equal to the amount of electronic moneythat has been issued.

Customer deposits
The Group recognises a liability to customers when a customer makes a deposit. This liability is initially recognised at fair value
and subsequently measured at amortised cost using the effective interest rate method.

Cryptocurrencies
Prior to the amendment to the terms and conditions relating to cryptocurrencies on 27 July 2020, the customer liabilities inrespect of cryptocurrencies are financial liabilities with an embedded derivative. The Group’s accounting policy was not toseparate the embedded derivative and to measure the entire instrument at fair value through profit or loss.

Commodities
Customer liabilities in respect of contracts relating to the commodities offering are financial liabilities with an embedded
derivative. The Group’s accounting policy is not to separate the embedded derivative and to measure the entire instrument
at fair value through profit or loss.

4.22 Share capital
Ordinary shares are classified as equity. Incremental costs that are directly attributable to the issue of new ordinary sharesor options are shown in equity as a deduction, net of tax, from the proceeds.

4.23 Reserves
The Group and Company reserves are as follows:• The share premium account includes the premium on issue of equity shares, net of any issue cost.
• Other Reserves represent the cost of shares held for options granted to employees and revaluation of foreign currency
at the statement of financial position date.
• Profit and loss account represents cumulative profits or losses, net of dividends paid, and any other adjustments.

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Financial statements

Notes to the consolidated financial statement

4.24 First time adoption of IFRS
These financial statements, for the year ended 31 December 2021, are the first Group financial statements prepared inaccordance with IFRS (UK). Revolut Ltd has adopted FRS 101 for the first time to prepare its individual financial statements. For
periods up to and including the year ended 31 December 2020, the Group and Company prepared its financial statements inaccordance with FRS 102, and had chosen to apply the recognition and measurement provisions of IFRS 9 Financial Instruments
and the presentation and disclosure requirements of Sections 11 and 12 of the FRS 102.
Accordingly, the Group and Company have prepared financial statements that comply with IFRS (UK) and FRS 101 respectively
applicable as at 31 December 2021, together with the comparative period data for the year ended 31 December 2020, as
described in the summary of significant accounting policies. In preparing the financial statements, the Group’s opening
statement of financial position was prepared as at 1 January 2020, the Group and Company’s date of transition to IFRS (UK).
This note explains the principal adjustments made by the Group and Company in restating its FRS 102 financial statements,
including the statement of financial position as at 1 January 2020 and the financial statements as of, and for, the year ended 31
December 2020.
IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS. The
Group and the Company has applied the following exemptions:• IFRS 2 Share-based Payment has not been applied to equity instruments in share-based payment transactions that were
granted on or before 7 November 2002, nor has it been applied to equity instruments granted after 7 November 2002 thatvested before 1 January 2020. For cash settled share-based payment transactions, the Group has not applied IFRS 2 toliabilities that were settled before 1 January 2020.
• The Group assessed all contracts existing at 1 January 2020 to determine whether a contract contains a lease based upon theconditions in place as at 1 January 2020.
• Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental
borrowing rate at 1 January 2020. Right-of-use assets were measured at the amount equal to the lease liabilities, adjusted by
the amount of any prepaid or accrued lease payments relating to that lease recognized in the statement of financial position
immediately before 1 January 2020. The lease payments associated with leases for which the lease term ends within 12 monthsof the date of transition to IFRS (UK) and leases for which the underlying asset is of low value have been recognized as an
expense on either a straight-line basis over the lease term or another systematic basis.
• Cumulative currency translation differences for all foreign operations are deemed to be zero as at 1 January 2020.
• The Group has applied the transitional provisions in IFRS 15.C5 Revenue from Contracts with Customers and will not restate
contracts that were completed before the 1 January 2020.

Estimates
The estimates at 1 January 2020 and at 31 December 2020 are consistent with those made for the same dates in accordancewith FRS 102 (after adjustments to reflect any differences in accounting policies):• Share-based payment transactions• Investments in equity instruments - unquoted equity shares IFRS 1.14
• The estimates used by the Group to present these amounts in accordance with IFRS reflect conditions at 1 January 2020,
the date of transition to IFRS and as at 31 December 2020.

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Financial statements

Notes to the consolidated financial statement

Group reconciliation of equity as at 1 January 2020 (date of transition to IFRS)
Notes

FRS 102

Reclassification andremeasurement

IFRS

£000

£000

£000

2,462,986-

2,462,986-

209,825

209,825

13,042-

13,042

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables

C,D

Inventories
Current tax assets

D

-

1,693

1,693

DebtorsD

211,560(211,560)-

2,687,588(42)

2,687,546-

38,42438,424

93,927-

93,927

Total current assets
Non-current assets
Property, equipment and right-of-use assets

B, D

Intangible assets
Deferred tax asset

D

-

42

42

Tangible assets

D

11,940(11,940)-

105,867

26,526132,393

2,793,455

26,484

2,819,939

Total non-current assets
Total assets

Liabilities and equity
Current liabilities
Trade and other payables

D-

203,830

203,830

Loans

D

-

972

972

2,367,200-

2,367,200

Customer liabilities
Lease liability

B

-

3,593

3,593

Creditors

D

206,163(206,163)-

2,573,363

2,232

2,575,595

Total current liabilities
Non-current liabilities
Loans

D

-

119,546

119,546

Provisions for liabilities

B

904

871

1,775

Lease liability

B-

23,104

23,104Creditors: amounts falling due after more than one yearD123,247(123,247)-

124,151

20,274144,425

2,697,514

22,5062,720,020

Total non-current liabilities
Total liabilities

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Financial statements

Notes to the consolidated financial statement

FRS 102

Reclassification andremeasurement

IFRS

£000

£000

£000

-

-

-

248,814-

248,814

B,C,C-(159,337)(159,337)

Other reserves

D

10,37072

10,442Foreign exchange reserve

D

73

(73)

-

Profit and loss accountD(163,316)

163,316-

95,941

3,978

99,9192,793,455

26,484

2,819,939

Notes

EquityShare capital
Share premium
Accumulated deficit

Total equity
Total liabilities and equity

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Financial statements

Notes to the consolidated financial statement

Group reconciliation of equity as at 31 December 2020
FRS 102

Reclassification andremeasurement

IFRS

£000

£000

£000

Cash and cash equivalents

5,055,023-

5,055,023

Investment in commodities

50,366-50,366-

153,242

153,242

11,282-

11,282

3,856

3,856

Notes

AssetsCurrent assets

Trade and other receivables

C,D

Inventories
Current tax assets

D

Loan and advances to customers

D

-

415

415

Derivative financial assets

D

-

121

121

DebtorsD

156,432(156,432)-

5,273,103

1,202

5,274,305-

37,49737,497

411

-

411

Total current assets
Non-current assets
Property, equipment and right-of-use assets

B,D

Intangible assets
Loans and advances to customers

D

-

961

961

Deferred tax assets

D

-

345

345

Tangible assets

D

15,004(15,004)-

15,41523,79939,214

5,288,518

25,001

5,313,519

Total non-current assets
Total assets
Liabilities and equity
Current liabilities
Trade and other payables

D-

143,663

143,663

Loans

D

-

81,812

81,812

4,637,230-

4,637,230

Customer liabilities
Current tax liabilities

D

-

1,670

1,670

Lease liability

B

-

5,985

5,985

Derivative financial liabilities

D

-

1,970

1,970

Creditors

D

230,507(230,507)-

4,867,737

4,593

4,872,330

Total current liabilities

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Financial statements

Notes to the consolidated financial statement

Notes

FRS 102

Reclassification andremeasurement

IFRS

£000

£000

£000

Non-current liabilities
Provisions for liabilities

B

858

930

1,788

Lease liability

B-

18,943

18,943

Deferred tax liabilities

D

-

18

18

Creditors: amount falling due after more than one year

D

2,716

(2,716)-

3,574

17,17520,7494,871,311

21,7684,893,079---

697,444-

697,444

A,B,C,D-(344,300)(344,300)

A,D

50,81916,477

67,296

Foreign exchange reserve

D

(366)

366

-

Profit and loss accountD(330,690)

330,690-417,2073,233

420,440

5,288,518

25,001

5,313,519

Total non-current liabilities
Total liabilities
EquityShare capital
Share premium
Accumulated deficit
Other reserves

Total equity
Total liabilities and equity

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Financial statements

Notes to the consolidated financial statement

Group reconciliation of total comprehensive income for the year ended
31 December 2020
Notes

FRS 102

Reclassification andremeasurement

IFRS

C

222,142(2,211)

219,931

Cost of sales(152,412)

4,349(148,063)

Gross profit

69,7302,138

71,868A,B(266,159)(8,542)(274,701)

B-(9,629)(9,629)

220

-

220

(4,440)

11,221

6,781(200,649)(4,812)(205,461)

Revenue

Administrative expenses
Depreciation and amortisation expense
Impairment reversal
Other operating (expense) / income

D

Loss from operations
Interest expense

B,D(9,254)(8,119)(17,373)

Interest income

D

2,028

101

2,129

(207,875)(12,830)(220,705)

1,843(4,760)(2,917)(206,032)(17,590)(223,622)

38,659-38,659

(439)

111

(328)

Other comprehensive income, net of tax

38,220111

38,331

Total comprehensive loss for the year

(167,812)(17,479)(185,291)

Loss before tax
Tax credit

A,B,C

Net loss for the year

Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Revaluation gain on intangible assets (cryptocurrencies)
Currency translation differences

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B

76

Financial statements

Notes to the consolidated financial statement

Company reconciliation of equity as at 31 December 2020
FRS 102

Reclassification andremeasurement

IFRS

£000

£000

£000

Cash and cash equivalents

2,562,779-

2,562,779

Investment in commodities

50,366-50,366

124,809(5,766)

119,043

11,161-

11,161

Notes

AssetsCurrent assets

Trade and other receivables

C,D

Inventories
Current tax assets

D

-

3,856

3,856

Derivative financial assets

D

-

3,707

3,707

2,749,115

1,797

2,750,912-

32,762

32,762

351

-

351

Total current assets
Non-current assets
Property, equipment and right-of-use assets

B,D

Intangible assets
Deferred tax assets

D

-

186

186

Investment in subsidiaries

A

87,8583,017

90,875

Tangible assets

D

14,344(14,344)-

102,553

21,621

124,174

2,851,668

23,4182,875,086

Total non-current assets
Total assets

Liabilities and equity
Current liabilities
Trade and other payables

D

285,119(86,526)

198,593

Loans

D

-

81,812

81,812

2,121,085-

2,121,085

Customer liabilities
Current tax liabilities

D

-

1,178

1,178

Lease liability

B

-

5,030

5,030

Derivative financial liabilities

D

-

2,139

2,139

2,406,204

3,633

2,409,837

Total current liabilities
Non-current liabilities
Provisions for liabilities

B

560

1,228

1,788

Lease liability

B-

15,037

15,037

Creditors: amount falling due after more than one year

D

2,716

(2,716)-

3,276

13,54916,8252,409,480

17,182

2,426,662

Total non-current liabilities
Total liabilities

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Financial statements

Notes to the consolidated financial statement

FRS 102

Reclassification andremeasurement

IFRS

£000

£000

£000

-

-

-

697,444-

697,444

A,B,C,D(305,981)(10,562)(316,543)

Other reservesA

50,817

16,70667,523Foreign exchange reserves

A

(92)

92

-

442,1886,236

448,424

2,851,668

23,4182,875,086

Notes

EquityShare capital
Share premium
Accumulated deficit

Total equity
Total liabilities and equity

A. Share based compensation
Under FRS 102, the Group elected to apply the “straight-line” method to account for share-based payment awards subject to gradedvesting based on a service condition only. Under IFRS, the accelerated method is used i.e. ‘front loading’ of the rewards’ costs resulting
from their graded features. At the date of transition to IFRS, the Group applied the “accelerated” method under IFRS 2 to all unvested
share-based payment awards subject to graded vesting. This resulted in the acceleration of compensation cost from what had beenoriginally reported under UK GAAP, with increase of the share based payment reserve of £16.0m, and an decrease in accumulated
deficit of the same amount at January 1, 2020. At December 31, 2020 The higher share based payments charge had a corresponding
impact on profit before tax and the share based payments charge shown in the cash flow statement.

B. Leases
Under IFRS, as explained in Note 4.11, a lessee applies a single recognition and measurement approach for all leases, except for shortterm leases and leases of low-value assets and recognizes lease liabilities to make lease payments and right-of-use assets representing
the right to use the underlying assets.
At the date of transition to IFRS, the Group applied the transitional provision and measured lease liabilities at the present value of theremaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of transition to IFRS. Right-of-use
assets were measured at the amount equal to the lease liabilities adjusted by the amount of any prepaid or accrued lease payments.
As a result, the Group recognized an increase in lease liabilities of £26.7m and £24.9m as at January 1, 2020 and December 31, 2020,
respectively; an increase in right-of-use assets of £26.5m and £22.5m as at January 1, 2020 and December 31, 2020, respectively. The
difference between lease liabilities and right-of-use assets has been recognized in equity.
Under IFRS, right-of-use assets are presented on the same financial statement line item as property and equipment for respectively£26.5m and £22.5m as at January 1, 2020 and December 31, 2020. Additionally, depreciation increased by £6.1m and was included ingeneral and administrative expenses) and interest expenses increased by £1.5m for the year ended December 31, 2020.
Cash flows arising from operating lease payments are classified as operating activities whereas cash flows related to finance leases areshown as a component of financing activities. Under IFRS 16 ‘Leases’, a lessee generally applies a single recognition and measurement
approach for all leases and recognizes lease liabilities. Cash flows arising from payments of principal portion of lease liabilities areclassified as financing activities. Therefore, cash outflows from operating activities decreased by £5.3m and cash outflows fromfinancing activities increased by the same amount for the year ended December 31, 2020. Note that the interest component related tothese lease liabilities are shown under previous GAAP as well as under IFRS as a component of operating activities.

C. Revenue recognition
As part of the transition to IFRS 15, under FRS 102 the physical card delivery fee was bundled as part of the subscription fee forpremium and metal subscription plans, and as this is a separate performance obligation, under IFRS 15, the amount is unbundled fromthe subscription fee and recognised upfront while the remaining balance is spread over the life of the contract as the performanceobligation is satisfied. As a result, the Group recognized a decrease in contract liabilities of £1.23m and £2.1m as at 1 January 2020 and
31 December 2020, respectively; a decrease in accumulated deficit of £1.2m as at 1 January 2020 and an increase in revenue of £0.9m
as at 31 December 2020. This transition amount has impacted the profit before tax and trade and other payables in the statement ofcash flows.

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Financial statements

Notes to the consolidated financial statement

D. Reclassification
As part of IFRS transition, balances under the following line items of the statement of financial position were reclassified into either
new line items reflecting the taxonomy used by IFRS or disaggregated into new items for better presentation and relevance; The
Debtors and Creditors reclassifications have impacted the classification of movements within the statement of cash flows.
Under UK GAAP

Under IFRS

Tangible assets

Property, equipment and right of use assets

Debtors

Deferred tax asset

Debtors

Derivative assets

Creditors

Derivative liability

Creditors

Loans

Foreign exchange reserves

Other reserves

5.

Judgments in applying accounting policies and key sources of estimation uncertainty

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.

Critical judgments in applying the Group’s accounting policies
Recognition of deferred tax asset
The Company has substantial carried forward tax losses. Where carried forward tax losses can be utilised against future taxable profits,a deferred tax asset should only be recognised to the extent that it is probable that there will be sufficient taxable profits against which
it can be recovered.
Whilst the directors are forecasting the Group to reach sustained profitability from 2022, as deferred tax assets are recognised on an
entity basis in order for the Company to reach consistent profitability further monetisation of its intellectual property and services via
new product offerings or expansion into new territories (thus requiring regulatory licence approvals for banking and EMI authorised
entities) is required.
As a result, the directors have concluded that the criteria to recognise a deferred tax asset in the Company in relation to the carriedforward losses has not yet been met, and therefore no deferred tax asset has been recognised as at 31 December 2021 in respect of thecarried forward losses in the Company.

Key accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are addressed below.

Share-based payments
The estimate of share-based payments costs requires management to select an appropriate valuation model and make decisions about
various inputs into the model, including volatility of its own share price, the probable life of the options, the vesting date of options
where non-market performance conditions have been set and the risk-free interest rate. The key assumptions used in the models, and asensitivity analysis of the impact of varying those assumptions, are disclosed in note 27.

Investment in subsidiaries (Company only)
The carrying value of investments in subsidiaries requires management to select an appropriate discount rate for the valuation of future
cash flows in assessing each investment for impairment. The key assumptions used in making this assessment and the sensitivity
analysis of the impact of varying these assumptions are disclosed in note 14.

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Financial statements

6.

Notes to the consolidated financial statement

Revenue

The following table shows the disaggregation of revenue recognized during the reporting period:
Group
2021

2020
(restated)

£000

£000

Cards and interchange revenue

149,354

95,465

Subscription revenue

107,268

70,866

Foreign exchange and wealth348,733

40,541

Card delivery

20,855

12,724

Others9,995

335

636,205

219,931Transferred at a point in time528,241

148,872

Transferred over time

107,964

71,059Total revenue

636,205

219,931

United Kingdom

195,885

62,091

Europe (excluding UK)

432,865

154,603

7,455

3,237

636,205

219,931

Disaggregation of revenue
Type of service

Total revenue

Type of service

Geographical markets

Rest of the world
Total revenue

The Group determines the disaggregation of Total Revenue by major geographical area based on customer address.
There were no material net impairment losses on contract receivables in 2021 (2020: nil). The Group did not recognize any contract
assets during 2021 (2020: nil).
Prior to 27 July 2020 the Group hedged its exposure to cryptocurrencies contracts with customers. Therefore, of the £40.5m of Foreignexchange and wealth revenue reported for the year ended 31 December 2020, there is a £38.7m charge (2021:nil) in respect of the fairvalue remeasurment of cryptoassets liability to customers deducted from the gross revenue of £79.2m under IFRS15 for that revenue
stream. Refer also to note 4.12 for the change in accounting for cryptoassets.

Capitalised costs
During the year, the Group capitalised £19.1m (2020: nil) as cost to obtain customer contracts out of which £2.4m was released (2020:
nil). The capitalised cost to obtain customer contracts is amortised over three years.

Remaining performance obligations
Due to the nature of its commercial arrangements, the Group does not have any material remaining performance obligations related tocontracts with duration over one year.

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Financial statements

7.

Notes to the consolidated financial statement

Interest income and expense

Interest income and expense for the year ended 31 December 2021 are as follows:
Group
2021
£000

2020
(restated)
£000

14

-

Interest accretion on financial investments

692-

Interest on loans and advances to customers

564

24

Interest income on safeguarded funds

329

113

Total interest income using EIR method

1,599

137

127

1,992

1,726

2,129

Interest expense on customer deposits

7-

Negative interest on safeguarded funds(16,984)(6,563)

Other borrowed funds(3,190)(9,254)

Interest expense on lease liabilities(859)(1,543)(21,026)(17,360)

Interest income
Cash and bank balances

Other interest income

Interest expense

Total interest expense using EIR method
Other interest expense(13)

Net interest expense(21,026)(17,373)(19,300)(15,244)

Interest expense is charged on the outstanding balance of lease liabilities. The interest rate charged is the proxy for the incremental
borrowing rate used to calculate the lease liability at the inception of the lease.
The other loan interest payable for 2021 of £3.1m (2020: 9.3m) represents the interest cost on the loan facility as detailed in note 24.

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Financial statements

8.

Notes to the consolidated financial statement

Administrative expenses

2021
£000

2020
(restated)£000

Total staff costs

204,320

186,636

Other costs

163,158

88,061

367,478

274,701

In addition, the profit/(loss) from operations is stated after charging/(crediting) the following items which are to be disclosed separately:

2021
£000

2020
(restated)£000

58,72031,106176

174

Depreciation of property, equipment and right-of-use assets

8,903

9,456

Impairment of other financial assets held at amortised cost

12,097

9,029

Fair value changes in intangible assets below original cost-

(38,961)

Inventory recognised as expense

16,156

15,596

Foreign exchange differences

3,574(2,021)

Operating lease costs

4,665

2,333

Other expense - impairment of acquired intangible assets*

7,278

-

Research and development charged as an expense
Amortisation (included in administration costs)*During 2021, Revolut Ltd acquired all the issued share capital of Global Retail Technology Limited (“Nobly”) a developer of theelectronic point of sale (ePOS) system for the total consideration of £7.4 million, including £2.6 million as a non-cash element. The
Group has not treated this as a business combination, instead it recognised acquired software and subsequently impaired the related
cost to nill due to the delays with integration of the acquired technology into the existing Group’s infrastructure.
During the year the Group (including its overseas subsidiaries) obtained the following services from the Company’s auditors:

2021
£000

2020
(restated)
£000

3,351

650

Fees payable for the audit of the company’s subsidiaries

776

128

Fees payable to the company’s auditors with respect of the prior year

225

185

Fees payable to the company’s auditor for other assurance services

111-

Fees payable for the audit of the parent company and the group’s consolidated financial statements

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Financial statements

9.

Notes to the consolidated financial statement

Total staff costs

Total staff costs, including directors’ remuneration, were as follows:

Group
2021
£000

Group
2020
(restated)£000

Company2021£000

Company
2020(restated)£000

Wages & Salaries

136,742

115,191

105,578

93,010Share based payments

47,351

57,182

41,581

48,595Social Security Costs

16,494

12,85013,547

11,385

Cost of defined contribution scheme

3,733

1,413

2,861

863

204,320

186,636

163,567

153,853

The average monthly number of employees, including the executive directors, during the year was as follows:

Group
2021
No.

Group
2020
No.

Company2021
No.

Company
2020
No.

Product

799

670

579

551

Service

3,854

1,486

1,756

1,246

Staff

4,653

2,156

2,335

1,797

2

2

2

2

4,655

2,158

2,337

1,799

Executive directors

The increase in headcount reflects the continued investment in growth and capability throughout the business, including enhancing theGroup’s Risk, Compliance and Control functions.

Annual Report & Financial Statements 2021

83

Financial statements

10.

Notes to the consolidated financial statement

Directors’ remuneration

2021
£000

2020
(restated)£000

Director emoluments

652

211

Share based payments

3,084

366

Company contributions to defined contribution pension schemes

32Social security cost and other benefits

-

1

3,739

580

From April 2020, the non-executive directors agreed to forego their cash remuneration in exchange for compensation in the form ofshares in the company. From May 2021, all the directors were fully remunerated in cash. During the year five (2020: five) of the directors
received shares under this arrangement. See note 27 for further details.
During the year the company made nil contributions to a defined contribution pension scheme for directors (2020: two directors), andno directors (2020: none) exercised share options during the year.

2021
£000

2020
(restated)
£000

200

65

-

1

200

66

Highest paid director
Director emoluments
Company contributions to defined contribution pension schemes

Key management personnel include all directors and a number of senior managers across the group who together have authority
and responsibility for planning, directing and controlling the activities of the group. The total compensation paid to key management
personnel for services provided to the group was £9.2m (2020: £2.5m).

Annual Report & Financial Statements 2021

84

Financial statements

11.

Notes to the consolidated financial statement

Taxation

Income tax expense
11.1

Income tax expense
Group
2021
£000

2020
£000

14,535

3,207

138

-

14,673

3,207

(924)

61

-

(351)

Impact of change in tax rates

(298)

-

Total deferred tax (credit)(1,222)(290)

Total tax charge / (credit) on continuing operations

13,451

2,917

UK corporation tax
Current tax at 19% (2020: 19%) on the profit/ loss for the year
Adjustment in respect of previous years
Total current tax

Deferred tax
Current year credit recognised
Adjustments in respect of previous periods

11.2 Reconciliation of effective tax rate
The tax assessed in each year differs from the standard rate of corporation tax in the UK for the relevant year. The differences are
explained below:
Group
2020
£000

2019
(restated)£000

Profit/(Loss) before tax

39,791(220,705)

Profit/(Loss) before tax at the standard UK tax rate of 19% (2020:19%)

7,560(41,934)

Expenses not deductible for tax purposes

6,322

6,402

Adjustments in respect of previous periods

138

(350)

Difference in overseas tax rates and overseas tax credits(3,190)528

Impact of change in tax rates

(299)

-

Losses and other timing differences(4,031)

-

-

7,345

Unrecognised deferred tax

6,951

30,926

Total tax charge / (credit)

13,451

2,917

Effects of:Movements in other comprehensive income

Annual Report & Financial Statements 2021

85

Financial statements

Notes to the consolidated financial statement

11.3 Deferred tax
Composition of deferred tax balance
The group’s deferred tax asset consists of the following as of 31 December:
Incomestatement

EquityTotal

Net Deferred tax asset/(liability) as at 1 January 2021

327

-

327

Fixed asset differences

(113)

-

(113)

Short term timing differences

190

-

190

Share options

-

-

-

Capital gains/ (losses)

-

-

-

Losses and other deductions

1,145

-

1,145

Losses and other deductions

(9)

-

(9)

1,540

-

1,540

Incomestatement

Equity

Total

186

-

186

Fixed asset differences

(189)

-

(189)

Short term timing differences

242

-

242

Share options

-

-

-

Capital gains/ (losses)

-

-

-

Losses and other deductions

-

-

-

Foreign exchange movements

(9)

-

(9)

Net Deferred tax asset/(liability) at 31 December 2021

230

-

230

Group

Net Deferred tax asset/(liability) at 31 December 2021

The company’s deferred tax asset consists of the following as of 31 December:Company
Net Deferred tax asset/(liability) as at 1 January 2021

Unrecognised deferred tax asset and tax losses carried forward
Deferred tax assets have not been recognised in respect of the group tax losses carried forward totalling £215m (2020: £244m)
and Company tax losses carried forward totalling £185m (2020: £221m) as there is insufficient evidence as to their recoverability.
See note 4 for further details on the consideration of the recognition of deferred tax assets in relation to carried forward losses.
There is no expiry date to utilise unused tax losses.

Factors that may affect future tax changes
In March 2021, the UK Government stated in its Budget announcement that the main UK corporation tax rate would increase
to 25% from 1 April 2023. This was legislated for in the Finance Act 2021, which received Royal Assent on 10 June 2021. On 14
October 2022, and again on 17 November 2022 in the Chancellor’s Autumn Statement, the UK Government reiterated that themain UK corporation tax rate will increase to 25% from 1 April 2023 as already legislated for. As at 31 December 2021, the Group
did not hold any deferred tax assets that have been valued using the 25% UK corporation tax rate.

Annual Report & Financial Statements 2021

86

Financial statements

12.

Notes to the consolidated financial statement

Intangible assets
Cryptocurrencies£000

Purchased
software
£’000

Total
£000

At 1 January 2020 (restated)132,311590

132,901

Additions

338,026

6

338,032

Disposals(470,337)-(470,337)

Foreign exchange movements

-

5

5

At 31 December 2020 (restated)

-

601

601

At 1 January 2021

-

601

601

Additions

-

7,736

7,736

Disposals---

Foreign exchange movements

-

-

-

At 31 December 2021

-

8,337

8,337

(38,961)(13)(38,974)

77,620(174)

77,446(38,659)-(38,659)

Foreign exchange movements

-

(3)

(3)

At 31 December 2020 (restated)

-

(190)

(190)

At 1 January 2021

-

(190)

(190)

Charge for the year-

(7,426)(7,426)

Disposals---

Foreign exchange movements

-

-

-

At 31 December 2021-

(7,616)(7,616)

At 31 December 2021

-

721

721

At 31 December 2020 (restated)

-

411

411

93,350577

93,927Group
Cost

Accumulated amortisation and impairment losses
At 1 January 2020 (restated)
Charge for the year
Disposals

Carrying amountAt 1 January 2020 (restated)

Annual Report & Financial Statements 2021

87

Financial statements

Notes to the consolidated financial statement

Intangible assets (continued)
Cryptocurrencies£000

Purchased
software
£’000

Total
£000

At 1 January 2020 (restated)132,311510

132,821Additions

338,026-

338,026

Disposals(470,337)-(470,337)

Foreign exchange movements

-

-

-

At 31 December 2020 (restated)

-

510

510

At 1 January 2021

-

510

510

Additions---

Disposals---

Foreign exchange movements

-

-

-

At 31 December 2021

-

510

510

(38,961)(12)(38,973)

77,620(147)

77,473(38,659)-(38,659)

Foreign exchange movements

-

-

-

At 31 December 2020 (restated)

-

(159)

(159)

At 1 January 2021

-

(159)

(159)

Charge for the year

-

(147)

(147)

Disposals---

Foreign exchange movements

-

-

-

At 31 December 2021

-

(306)

(306)

At 31 December 2021

-

204

204

At 31 December 2020 (restated)

-

351

351

93,350498

93,848Company
Cost

Accumulated amortisation and impairment losses
At 1 January 2020 (restated)
Charge for the year
Disposals

Carrying amountAt 1 January 2020 (restated)

Up until 27 July 2020, at which time the contractual arrangements related to the cryptocurrency product were amended, thecryptocurrencies were recognised as intangible assets at fair value, which was based upon the quoted prices in their respective active
markets. Upon the amendment to the legal arrangements Revolut Ltd is now acting as agent on behalf of its customers and therefore
no longer recognises the cryptocurrencies, nor the corresponding customer liability, in its Statement of Financial Position.
The historical cost less impairment of the intangible assets at 31 December 2021 was therefore nil (2020: nil) (2019: £93.4m).

Annual Report & Financial Statements 2021

88

Financial statements

13.

Notes to the consolidated financial statement

Property, equipment and right of use assets

Group’s property, equipment and right-of-use assets consisted of the following as of 31 December:
Fixtures &fittings£000

Officeequipment£'000

Computerequipment£000

Right-of-use
assets
£000

Total
£000

At 1 January 2020 (restated)

7,573

1,553

4,737

26,48340,346

Additions

4,322

158

1,846

1,633

7,959

Foreign exchange movements

(24)

(16)

(26)

426

360

At 31 December 2020 (restated)

11,871

1,695

6,557

28,542

48,665

At 1 January 2021

11,871

1,695

6,558

28,542

48,666

108

79

1,497

302

1,986

-

-

-

(6,677)(6,677)

Foreign exchange movements

(136)

(272)

(145)

(246)

(799)

At 31 December 2021

11,843

1,502

7,910

21,921

43,176

At 1 January 2020 (restated)

(612)

(136)

(1,174)-(1,922)

Charge for the year

(1,148)(320)(1,897)(6,090)(9,455)

58

16

94

41

209

At 31 December 2020 (restated)(1,702)(440)(2,977)(6,049)(11,168)

At 1 January 2021

(1,702)(440)(2,977)(6,049)(11,168)

Charge for the year

(1,188)(351)(2,196)(5,168)(8,903)

Disposal/ Derecognition

-

-

-

1,733

1,733

Foreign exchange movements

8

80

90

112

290

(2,882)(711)(5,083)(9,372)(18,048)

At 31 December 2021

8,961

791

2,827

12,54925,128At 31 December 2020 (restated)

10,169

1,255

3,580

22,49337,497

At 1 January 2020 (restated)

6,961

1,417

3,563

26,48338,424Group
Cost

Additions
Disposal/ Derecognition

Accumulated depreciation and impairment losses

Foreign exchange movements

At 31 December 2021

Carrying value

Annual Report & Financial Statements 2021

89

Financial statements

13.

Notes to the consolidated financial statement

Property, equipment and right of use assets (continued)

Company property, equipment and right-of-use assets consisted of the following as of 31 December:
Fixtures &fittings£000

Officeequipment£'000

Computerequipment£000

Right-of-use
assets
£000

Total
£000

At 1 January 2020

7,495

1,202

3,871

21,20033,768Additions

4,294

205

1,792

1,633

7,924

19

3

(28)

576

570

At 31 December 2020

11,808

1,410

5,635

23,40942,262

At 1 January 2021

11,808

1,410

5,635

23,40942,262

108

9

1,268

104

1,489

-

-

-

(3,103)(3,103)

(62)

(149)

(169)

(535)

(915)

11,854

1,270

6,734

19,87539,733

At 1 January 2020

(611)

(116)

(880)

-

(1,607)

Charge for the year on owned assets(1,178)(333)(1,626)(4,973)(8,110)

89

25

121

(18)

217

At 31 December 2020

(1,700)(424)(2,385)(4,991)(9,500)

At 1 January 2021

(1,700)(424)(2,385)(4,991)(9,500)Charge for the year on owned assets(1,188)(297)(1,910)(4,656)(8,051)

Disposal/ Derecognition

-

-

-

629

629

Foreign exchange movements

2

63

130

158

353

(2,886)(658)(4,165)(8,860)(16,569)

At 31 December 2021

8,968

612

2,569

11,01523,164

At 31 December 2020

10,108986

3,250

18,41832,762

At 1 January 2020

6,884

1,086

2,991

21,20032,161Company
Cost

Foreign exchange movements

Additions
Disposal/ Derecognition
Foreign exchange movements
At 31 December 2021

Accumulated depreciation and impairment losses

Foreign exchange movements

At 31 December 2021

Carrying value

Annual Report & Financial Statements 2021

90

Financial statements

14.

Notes to the consolidated financial statement

Investments in subsidiaries

Company
Investments in subsidiary companies£000

Cost or valuation
At 1 January 2020 (restated)

15,554

Additions

75,321

At 31 December 2020 (restated)

90,875Additions

174,011

At 31 December 2021

264,886

Net book value
At 31 December 2021

264,886

At 31 December 2020 (restated)

90,875

At 1 January 2020 (restated)

15,554The increase in investments in subsidiaries represents £10m (2020: £5.6m) related to share-based payments where the Company has
issued share options to employees of its subsidiaries. In 2021, the Company invested additional equity funding of £164m (2020:£66.7m)
to the Group’s overseas subsidiaries in order to meet local regulatory requirements and/or fund local expansion.
When the Company’s investments in subsidiary companies are not supported by their net assets, the Company assesses the netpresent value of the future cash flows of the subsidiary. Where this occurs, management forecasts of the subsidiaries financial
performance are extrapolated to produce a terminal value. Financial performance over the first five years are consistent with theforecasts prepared by management. Terminal values are calculated with reference to growth rates applied in years one through five anda pre-tax discount rate of 14%. The directors do not consider the net present values of future cash flows to be materially sensitive tothe assumptions applied in the calculation.
Other than the write down of Revolut Securities Europe Ltd and Revolut Technologies Ltd during the year, the Directors consider the
carrying value of the Company’s investments to be supported by either the net assets or net present value of future cash flows.There
was an impairment charge in the year ended 31 December 2021 of £537,000 (year ended 31 December 2020: £nil).
The list of subsidiary undertakings of the Company is set out below. All trading subsidiary undertakings are included in
the consolidation.

Annual Report & Financial Statements 2021

91

Financial statements

Notes to the consolidated financial statement

Effective interest held

CompanyClassof share

Revolut Travel Ltd

Revolut Trading LtdPaidup capital

Principal activity

Registered address

2021

2020

1 Jan
2020

Ordinary

Insurance Intermediary

7 Westferry Circus, Canary
Wharf, London, England,
E14 4HD

100%

100%

100%

Ordinary

Security dealing activities

7 Westferry Circus, Canary
Wharf, London, England,
E14 4HD

100%

100%

100%

OOO Revolut Technologies*** Ordinary

Software development

125047, Moscow, Butyrskiy
Val street, bld. 10, office05-155 Total

100%

100%

100%

Revolut Bank UAB (formerly
Revolut Technologies UAB)

Ordinary

Deposits acceptance andconsumer lending

Konstitucijos ave. 21B,
Vilnius, LT-08130

100%

100%

100%

Revolut Payments UAB***

Ordinary

Payments services,e-money issuance andinsurance brokerage

Konstitucijos ave. 21B,
Vilnius, LT-08130

100%

100%

100%

Revolut Technologies
Singapore Pte. Ltd

Ordinary

Payments services,e-money issuance andinsurance brokerage

30 Cecil Street, #19-08,
Prudential Tower, S049712

100%

100%

100%

Revolut Technologies Ltd

Ordinary

Technology Services,
payments services
through Metropolitan
Commercial Bank

Suite 2300, Bentall 5, 550
Burrard Street Vancouver,
British Columbia V6C 2B5

100%

100%

100%

Revolut Technologies S.A.

Ordinary

Dormant at reporting date

19 rue du Bitbourg
1273 Luxembourg

100%

100%

100%

Revolut Technologies Limited Ordinary

Dormant at reporting date

13/F, Gloucester Tower, The
Landmark, 15 Queen’s Road
Central, Central, Hong Kong

100%

100%

100%

Revolut Technologies Poland
Sp z o.oOrdinary

Inactive, to be dissolved

Podium Park, Jana Pawła, 43a,
Krakow, 31-864

100%

100%

100%

Revolut Technologies
Japan, Inc.

Ordinary

Payments services,e-money issuance andinsurance brokerage

Roppongi 7-7-7, Minato-ku,
Tokyo 1060032

100%

100%

100%

Revolut Securities Japan, Inc

Ordinary

Payments services,e-money issuance andinsurance brokerage

Roppongi 7-7-7, Minato-ku,
Tokyo 1060032

100%

100%

100%

Revolut Payments
Ireland Limited

Ordinary

Financial Services

Matheson, 70 Sir John
Rogerson’s Quay, Dublin
2, Ireland

100%

100%

100%

Revolut Securities
Europe Limited

Ordinary

Payments services,e-money issuance andinsurance brokerage

Matheson, 70 Sir John
Rogerson’s Quay, Dublin
2, Ireland

100%

100%

100%

Revolut Holdings US Inc.

Ordinary

Technology Services,
payments services

1209 Orange Street, Wilmington
DE, 19801, County of New
Castle, Delaware

100%

100%

100%

Revolut Securities Inc.*

Ordinary

Anticipates licenceas broker-dealer for
trading services

1209 Orange Street, Wilmington
DE, 19801, County of New
Castle, Delaware

100%

100%

100%

Revolut Technologies Inc*

Ordinary

Business Development

1209 Orange Street, Wilmington
DE, 19801, County of New
Castle, Delaware

100%

100%

100%

Revolut Australia NOHC
Pty Ltd

Ordinary

Financial Services

Level 6, 152 Elizabeth Street,
Melbourne VIC 3000

100%

100%

100%

Revolut Payments Australia
Pty Ltd*

Ordinary

Financial services

Level 6, 152 Elizabeth Street,
Melbourne VIC 3000

100%

100%

100%

Revolut HoldingsInternational Ltd

Ordinary

Holding company

7 Westferry Circus, Canary
Wharf, London, England,
E14 4HD

100%

100%

100%

Annual Report & Financial Statements 2021

92

Financial statements

Notes to the consolidated financial statement

Effective interest held

CompanyClassof share

Revolut NewCo UK Ltd**Paid
up capital

Principal activity

Registered address

2021

2020

1 Jan
2020

Ordinary

Dormant at reporting date

7 Westferry Circus, Canary
Wharf, London, England,
E14 4HD

100%

100%

100%

Revolut Payments New
Zealand Pty Ltd*

Ordinary

Dormant at reporting date

Level 6, 152 Elizabeth Street,
Melbourne VIC 3000

100%

100%

100%

Revolut Holdings
Europe Limited

Ordinary

Holding company

Matheson, 70 Sir John
Rogerson’s Quay, Dublin
2, Ireland

100%

100%

100%

Global Retail Technology LLC

Ordinary

Software development

The Corporation Trust Company
1209 Orange Street Wilmington,
DE 19801

100%

-

-

Revolut Tecnologia
Brasil LTDA

Ordinary

Business Development

Av Dra Ruth Cardoso 8501 Sala 1750 Andar 17 - Pinheiros,São Paulo - SP, 05425-070, Sao
Paulo, Brazil

100%

-

-

Revolut Payments India
Private Limited

Ordinary

Business Development

1B - 1003, Parinee Crescenzo
G Block BKC, Bandra Kurla
Comple, Bandra East Mubai,
Maharashtra MH400051

100%

-

-

Revolut Securities Singapore
Pte. Ltd.

Ordinary

Anticipates licence fortrading services

1 Marina Boulevard #2800 One Marina Boulevard,
Singapore, 018989

100%

-

-

Revolut de Mexico SA de CV

Ordinary

Business Development“Avenida Paseo de las Palmas
405, Int. 1702 Miguel Hidalgo
Lomas de Chapultepec 11000,
Ciudad de Mexico”

100%

-

-

Revolut Holdings Europe UAB Ordinary

Holding company

Konstitucijos ave. 21B,
Vilnius, LT-08130

100%

-

-

Revolut Insurance
Europe UAB

Ordinary

Insurance Intermediary

Konstitucijos ave. 21B,
Vilnius, LT-08130

100%

-

-

Revolut Securities UAB

Ordinary

Security dealing activities

Konstitucijos ave. 21B,
Vilnius, LT-08130

100%

-

-

Revolut Technologies
Ukraine LLC

Ordinary

Software development

Ukraine, 03038, Kyiv city,
Mykola Hrinchenko str., House 4

100%

-

-

Global RetailTechnology Limited

Ordinary

Software development

7 Westferry Circus, Canary
Wharf, London, England,
E14 4HD

100%

-

-

Revolut FIC Ltd (formerly
Revolut Digital Assets Ltd)

Ordinary

Dormant at reporting date

7 Westferry Circus, Canary
Wharf, London, England,
E14 4HD

100%

-

-

Revolut Trading
Nominees Ltd

Ordinary

Dormant at reporting date

7 Westferry Circus, Canary
Wharf, London, England,
E14 4HD

100%

-

-

Branches
Revolut Ltd conducts business through branches in Germany, Lithuania, Poland and Portugal.
• Revolut Limited (Sp z o.o.) Oddzial w Polsce. Registered address - Podium Park, Jana Pawła, 43a, Krakow, 31-864, Polska• Revolut Ltd - Sucursal em Portugal. Registered address - Rua Roberto Ivens, n.1353 4450-208 Matosinhos, Porto, Portugal• Revolut Ltd filialas. Registered address - Vilniaus m. sav. Vilniaus m. Lvovo g. 105A
• Revolut Ltd Zweigniederlassung Deutschland. Registered address - Friedrichstrasse 76, c/o WeWork, 10117 Berlin, Germany* Held indirectly** See note 34 Post balance sheet events for further details regarding this subsidiary.

Annual Report & Financial Statements 2021

93

Financial statements

15.

Notes to the consolidated financial statement

Inventories
Group

Inventory - Cards

Company

31 December 31 December
2021
2020
(restated)
£000
£000

1 January
2020(restated)£000

11,282

13,042

7,396

31 December 31 December
2021
2020
(restated)
£000
£000
7,101

11,161Inventories comprise prepaid cards not yet distributed to customers.The difference between purchase price of inventories and theirreplacement cost is not material. Inventory recognised in cost of sales during the year as an expense was £16.3m (2020 - £15.6m).
There were no impairment losses recognised in cost of sales during the year in respect of obsolete inventory (2020 - nil).

16.

Trade and other receivables
Group

Company

31 December 31 December
2021
2020
(restated)
£000
£000

1 January
2020(restated)£000

31 December 31 December
2021
2020
(restated)
£000
£000

5,409

359

4,290

419

810

-

-

-

30,76130,747

Settlement receivables

64,74173,666150,860

48,372

23,768

Negative customer balances

3,105

1,808

4,815

1,058

1,067

Other receivables*

107,343

53,057

25,106

93,87638,721

Amounts recoverable on long term contracts**

21,48821,48821,452

21,48821,488202,086

150,378

206,523

195,974

116,601

4,794

2,864

3,302

4,254

2,442

4,794

2,864

3,302

4,254

2,442

206,880

153,242

209,825

200,228

119,043

Amounts falling due within one year
Financial assets:
Trade receivables
Amounts owed by group undertakings

Non-financial assets:
Prepayments and accrued income

Total debtors* Other receivables primarily represent balances due from card schemes as part of the existing contractual agreements andcollateral balances.
** Amount recoverable on long term contracts represents the collateral held with our partners for the settlement process.
Management assessed that the carrying amounts of debtors approximate their fair values.
Debtors are stated after provision for impairment. The following tables show movement in the ECL provision for trade receivables andnegative customer balances. The provision for impairment recorded for other Debtor balances is nil (2020: nil).

Annual Report & Financial Statements 2021

94

Financial statements

Notes to the consolidated financial statement

Group
Trade
receivables

Company
Negativecustomerbalances

Trade
receivables

Negativecustomerbalances

At 1 January 2020 (restated)

8

Charged-13,270-

10,327

Written-off

-

-

-

-

(8)

-

(8)

-

At 31 December 2020 (restated)-

13,270-

10,327

Charged

-

9,296

-

1,0699(2,407)-(70)

Unused amount reversed

Written-off

8Unused amount reversed

-

-

-

-

At 31 December 2021-

20,159-11,32531 December 31 December
2021
2020
(restated)

1 January
2020(restated)

17.

Loans and advances to customers

Group

£000

£000

£000

Loans and advances to customers

18,1871,380-

Less: impairment loss allowance

(371)

(4)

-

Net loans and advance to customers

17,816

1,376-

Non-current assets

12,946961-

Current assets

4,870

415

-

Net loans and advance to customers

17,816

1,376-

Analysed into:

The Company does not have any loans and advances to customers (2020: £nil).

18.

Financial instruments at FVOCI
GroupRestricted bonds held in respect of customers

Company

31 December 31 December
2020
2021
(restated)
£000
£000

1 January
2020(restated)£000

31 December 31 December
2021
2020
(restated)
£000
£000

1,236,481--

383,670-

1,236,481--

383,670-

Financial investment represents holdings in investment in High Quality Liquid Assets (“HQLA”). These investments are accounted for at
Fair Value through Other Comprehensive Income (“FVOCI”). Restricted bonds held in respect of customers represent safeguarded funds
related to the Group’s regulated E-Money services.

Annual Report & Financial Statements 2021

95

Financial statements

19.

Notes to the consolidated financial statement

Investment in commodities at FVTPL
Group

Commodities

Company

31 December 31 December
2021
2020
(restated)
£000
£000

1 January
2020(restated)£000

31 December 31 December
2021
2020
(restated)
£000
£000

66,35650,366-

66,35650,366

66,35650,366-

66,35650,366

Investments in commodities represent holdings in precious metals that are held to hedge the Group’s exposure to commodity price risk
on its customer liabilities related to precious metals. These investments are accounted for at fair value through profit or loss.

20.

Cash and cash equivalents
Group

Company

31 December 31 December
2021
2020
(restated)
£000
£000

1 January
2020(restated)£000

31 December 31 December
2021
2020
(restated)
£000
£000

Own cash and cash equivalents

1,572,726

486,743

403,102787,244502,871

Restricted cash held at central banks and other banks
in respect of customers

5,479,883

4,568,280

2,059,884

3,197,624

2,059,908

7,052,609

5,055,023

2,462,986

3,984,868

2,562,779

Own cash and cash equivalents represent the Group’s own funds held for liquidity requirements, including cash from customer deposits,
and its own operating cash balances for general corporate purposes.
Restricted cash held at central banks and other banks in respect of customers represents safeguarded funds related to the Group’s
regulated E-Money services. In EEA territories client funds are held in segregated accounts with authorised credit institutions as partof the Group’s safeguarding policy. In other jurisdictions the funds are held separately from the Group’s own cash resources and aresafeguarded through the provision of a bank guarantee from a third-party authorised credit institution.
Not included in restricted cash held at central banks and other banks in respect of customers are balances related to the provision of
E-Money services in the US. These services are provided through partnerships with authorised credit institutions to provide consumer
protection. In this arrangement, the client funds and the associated customer liability are not recognised on the Group’s Statement of
Financial Position and rather are held on the statement of financial position of the relevant partnership credit institution. There is no
impairment recognised on the carrying value of cash and cash equivalents as amounts placed are with institutions rated A or above
having immaterial probability of default.

21.

Customer liabilities
Group

Company

31 December 31 December
2021
2020
(restated)
£000
£000

1 January
2020(restated)£000

6,711,889

4,537,459

2,274,008

3,451,682

2,071,260-(23)

93,177-(23)

Customer liabilities in respect of commodities

65,462

49,91814

65,29949,898Customer liabilities in respect of deposits

583,845

49,8761-(50)

7,361,196

4,637,230

2,367,200

3,516,981

2,121,085

E-Money in issue
Customer liabilities in respect of cryptocurrencies

Annual Report & Financial Statements 2021

96

31 December 31 December
2021
2020
(restated)
£000
£000

Financial statements

22.

Notes to the consolidated financial statement

Trade and other payables
Group

Company

31 December 31 December
2021
2020
(restated)
£000
£000

1 January
2020(restated)
£000

6,441

2,438

17,778

4,908

2,273

-

-

-

188,054

68,110

Settlement payables

30,312103,216

163,189

26,41398,190

Other taxation and social security

12,002

5,433

3,906

10,262

5,182

Other creditors

22,411735

3,333

21,290

1,367

Contract liabilities

22,44913,817

8,548

8,729

11,072

Accruals

71,63318,024

7,076

60,47912,399165,248

143,663

203,830

320,135

198,593

Trade creditors
Amounts owed to group undertakings

31 December 31 December
2021
2020
(restated)
£000
£000

Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

23.

Provisions for liabilities

The Group and the Company provision consists of dilapidation provision as of 31 December:Group

Company

£000

£000

At 1 January 2020 (restated)

1,775

1,775

Provided during the year

338

338

Other movements

(325)

(325)

As 31 December 2020 (restated)

1,788

1,788

At 1 January 2021

1,788

1,788

24

13

1,812

1,801

Provided during the year
As 31 December 2021

The property dilapidation provision is based on a calculation of the best estimate for the leases the Group is party to. Uncertainty
associated with these factors may result in the ultimate liability being different from the reported provision. Dilapidation provisions
are expected to be utilised in 1 to 5 years.

Annual Report & Financial Statements 2021

97

Financial statements

24.

Notes to the consolidated financial statement

Loans at amortised cost
31 December 31 December
2021
2020
(restated)

1 January
2020(restated)

£000

£000

£000

Secured---Unsecured122

81,812

120,518

Loans at amortised cost122

81,812

120,518--

119,546

Current assets

122

81,812972

Loans at amortised cost122

81,812

120,518

Group

Analysed into:
Non-current assets

31 December 31 December
2021
2020
(restated)
Company

£000

£000

Secured--Unsecured-

81,812Loans at amortised cost-

81,812

Non-current assets--

Current assets-

81,812Loans at amortised cost-

81,812Analysed into:

In 2019 the Company entered into a €200m facility agreement which bears interest at 10% per annum and is repayable on or before
November 2021.In April 2021 the Company fully repaid the €200m facility agreement entered in 2019. Interest charged in the year was£1.6m (2020: £9.3m). In the same month the Company entered into a £100M revolving credit facility agreement which subsequently
was terminated in November 2021. Interest charged in the year was £1.5m.

Annual Report & Financial Statements 2021

98

Financial statements

25.

Notes to the consolidated financial statement

Share capital
31 December 31 December
2021
2020
(restated)££

1 January
2020(restated)
£

3.23

1.38

1.37

Nil (2020 ‑ 18,051,576) A Ordinary shares

-

1.81

0.62

Nil (2020 ‑ Nil) B Ordinary shares

-

-

0.50

Nil (2020 ‑ Nil) C Ordinary shares

-

-

0.69

6,044,294 (2020 - 6,085,463) D Ordinary shares

0.60

0.61

0.59

4,828,923 (2020 - 4,833,694) E Ordinary shares

0.48

0.48

-

1,695,374 (2020 - nil) F Ordinary shares

0.17

-

-

1,770,754 (2020 - nil) G Ordinary shares

0.18

-

-

12,508,401 (2020 - nil) H Ordinary shares

1.25

-

-

5.91

4.28

3.77

Allotted, called up and fully paid
32,330,225 (2020 ‑ 13,827,741) Ordinary shares

The movements in the number of shares during the year can be summarised as follows:
1 Jan 2020
(restated)

SharesissuedSharesconverted

Share
options
exercised

31 Dec2020(restated)

SharesissuedSharesconverted

Share
options
exercised

31 Dec2021

In ‘000In ‘000In ‘000In ‘000In ‘000In ‘000In ‘000In ‘000In ‘000

Ordinaryshares

13,664

-

(53)

217

13,828-18,150283

32,261

Ordinaryshares A

6,187-

11,865-18,052-(18,052)--

Ordinaryshares B

4,989-(4,989)

-

-

-

-

-

-

Ordinaryshares C

6,879-(6,879)

-

-

-

-

-

-

Ordinaryshares D

5,890

195

-

-

6,085

-

(41)

-

6,044

Ordinaryshares E

-

4,778

56

-

4,834

-

(5)

-

4,829

Ordinaryshares F

-

-

-

-

-

1,312

384

-

1,696

Ordinaryshares G

-

-

-

-

-

1,783

(12)

-

1,771

Ordinaryshares H

-

-

-

-

-

12,934(426)-

12,50837,609

4,973

-

217

42,79916,029(2)283

59,109Total

All shares have a nominal value of £0.0000001 each. The G Shares and H Shares were issued to fulfil the Group’s growthshares scheme.

Rights attaching to the shares – Income
All Eligible Shares shall rank pari passu in respect of dividends and dividends shall be paid to the Eligible Shareholders pro rata
according to the number of Eligible Shares held by each Eligible Shareholder respectively. The G Shares and H Shares shall not confer
any rights to participate in dividends.

Annual Report & Financial Statements 2021

99

Financial statements

Notes to the consolidated financial statement

Rights attaching to the shares - Capital
On a return of capital, on a liquidation, reduction of capital or otherwise (including following an Asset Sale), the surplus assets of theCompany remaining after payment of its liabilities:
First, (i) £1 in aggregate to the holders of G Shares (as a class), (ii) £1 in aggregate to the holders of H Shares (as a class) and (iii) £1 inaggregate to the holders of Deferred Shares (as a class), in each case on a pro rata basis; andSecondly, pro rata to the holders of Ordinary Shares and Ordinary Series Shares according to the number of Shares held by each
Shareholder respectively (in the case of the Ordinary Series Shares, as though they had been fully converted into Ordinary Shares,
which shall apply, mutatis mutandis.
In the event of a Sale, the proceeds of such Sale (net of any costs associated with such Sale) (“Net Sale Proceeds”) shall, save inrespect of any Shares not sold in connection with that Sale, be distributed between the Shareholders as follows:First, to each Ordinary F Shareholder, in priority to all other Shareholders, an amount equal to the Subscription Price for each Ordinary
F Share held (as if the Ordinary F Shares constituted the same class of Shares) plus any arrears or accruals of dividend (if any) on
the Ordinary F Shares (as the case may be) due or declared but unpaid down to the date of the proceeds of such Sale being returned,
provided that if there are insufficient Net Sale Proceeds to pay such amounts to all Ordinary F Shareholders, in full, the available Net
Sale Proceeds shall be distributed to the Ordinary F Shareholders in proportion to the Subscription Price of the Ordinary F Shares heldby them and arrears or accruals of dividend due to them respectively;
Second, to each Ordinary D/E Shareholder, in priority to all other Shareholders other than Ordinary F Shareholders, an amount equal to:1.

the Subscription Price for each Ordinary D/E Share held (as if the Ordinary D/E Shares constituted the same class of
Shares) plus

2. any arrears or accruals of dividend (if any) on the Ordinary D/E Shares (as the case may be) due or declared but unpaid down
to the date of the proceeds of such Sale being returned, provided that
3. if there are insufficient Net Sale Proceeds to pay such amounts to all Ordinary D/E Shareholders, in full, the available Net
Sale Proceeds shall be distributed to the Ordinary D/E Shareholders in proportion to the Subscription Price of the Ordinary
D/E Shares held by them and arrears or accruals of dividend due to them respectively ((i) and (ii), or (iii), as the case may be,
being the “Price Protection Proceeds”);
Third, to each Ordinary Shareholder including any Ordinary Shares arising from conversion of the Ordinary Series Shares, and Vested
In-The-Money H Shareholder in proportion to the number of Ordinary Shares and Vested In-The-Money H Shares held by them,
respectively, as if such Ordinary Shares, and Vested In-The-Money H Shares constituted the same class of Shares up to such amount of
the remaining Net Sale Proceeds as is less than or equal to the First Hurdle Amount;
Fourth, any amount of the Net Sale Proceeds which exceeds the First Hurdle Amount and is less than or equal to the Second Hurdle
Amount (for the avoidance of doubt, if there is no Second Hurdle Amount, this paragraph (c) shall not apply, and instead paragraph (e)below shall apply) shall be distributed among the Ordinary Shareholders (including any Ordinary Shares arising from conversion of theOrdinary Series Shares), the Vested G First Hurdle Shareholders and the Vested In-The-Money H Shareholders in the proportion thatthe aggregate number of Ordinary Shares, Vested G First Hurdle Shares and Vested In-The-Money H Shares held by each holder bears
to all of the Ordinary Shares, Vested G First Hurdle Shares and Vested In-The-Money H Shares then in issue;
Then, the following step to be applied for each Nth Hurdle Amount which has been set in respect of the tranche of G Shares, startingwith the Second Hurdle Amount (if any): any amount of the Net Sale Proceeds which exceeds the Nth Hurdle Amount and is less thanor equal to the N+1th Hurdle Amount shall be distributed among the Ordinary Shareholders (including any Ordinary Shares arising fromconversion of the Ordinary Series Shares), Vested G First Hurdle Shareholders to Vested G Nth Hurdle Shareholders (inclusive), andVested In-The-Money H Shareholders in the proportion that the aggregate number of Ordinary Shares, Vested G First Hurdle Shares to
Vested G Nth Hurdle Shares, and Vested In-The-Money H Shares held by each holder bears to all of the Ordinary Shares, Vested G First
Hurdle Shares to Vested G Nth Hurdle Shares, and Vested In-The-Money H Shares then in issue;
Next, any amount of the Net Sale Proceeds which exceeds the Maximum Hurdle Amount (which, for the avoidance of doubt, shall be
the First Hurdle Amount if no other Hurdle Amounts have been set) shall be distributed among the Ordinary Shareholders (including
any Ordinary Shares arising from conversion of the Ordinary Series Shares), Vested G Shareholders and Vested In-The-Money H
Shareholders in the proportion that the aggregate number of Ordinary Shares, Vested G Shares, and Vested In-The-Money H Shares
held by each holder bears to all of the Ordinary Shares, Vested G Shares, and Vested In-The-Money H Shares then in issue; andFinally, nothing, unless the holders of each Ordinary Share (including any Ordinary Shares arising from conversion of the Ordinary
Series Shares), Vested G Share, and Vested In-The-Money H Share receive proceeds of £1,000,000 or more per share, in which case theholders of the Deferred Shares (as a class) shall be entitled to receive £1 in aggregate, on a pro rata basis.

Rights attaching to the shares - Conversion of Ordinary Series Shares
Immediately on the request in writing, at any time, by an Ordinary Series Shareholder, such number of his Ordinary Series Sharesas such Ordinary Series Shareholder shall specify on the date of such request automatically be converted into and re-designated as
Ordinary Shares at the rate of one Ordinary Share for every Ordinary Series Share (as adjusted from time to time as provided herein,
the “Conversion Rate”).

Annual Report & Financial Statements 2021

100

Financial statements

Notes to the consolidated financial statement

Rights attaching to the shares - Conversion of Ordinary D Shares
All of the fully paid Ordinary D Shares then in issue shall automatically be converted into and re-designated as Ordinary Shares at theConversion Rate immediately upon the request in writing.

Rights attaching to the shares - Conversion of Ordinary E Shares
All of the fully paid Ordinary E Shares then in issue shall automatically be converted into and re-designated as Ordinary Shares at theConversion Rate immediately upon the request in writing.

Rights attaching to the shares - Conversion of Ordinary F Shares
All of the fully paid Ordinary F Shares then in issue shall automatically be converted into and re-designated as Ordinary Shares at theConversion Rate immediately upon the request in writing.

Rights attaching to the shares - Conversion of G Shares
Unless otherwise determined by the Board at any time prior thereto, all of the fully paid G Shares then in issue shall automatically beconverted into and re-designated as Ordinary.

Rights attaching to the shares - Conversion of H Shares
Unless otherwise determined by the Board at any time prior thereto, all of the fully paid H Shares then in issue shall automatically beconverted into and re-designated as Ordinary.
The Board shall, in such circumstances as are stated in any particular Award Letter pursuant to which H Shares have been awarded(and subsequently subscribed for or the beneficial interest therein acquired), have the right to determine that the H Shares (or relevant
number thereof) held by an H Shareholder (and/or his Permitted Transferees, if applicable) shall convert into Deferred Shares (on thebasis of one Deferred Share for each applicable H Share). Upon such conversion into Deferred Shares, which shall take place on thedate of the Board’s determination (the “H Share Conversion Date”), the Company shall be entitled to enter the H Shareholder (and/or his
Permitted Transferees, if applicable) on the register of members of the Company as the holder of the appropriate number of Deferred
Shares as from the H Share Conversion Date. Upon the H Share Conversion Date, the H Shareholder (and/or his Permitted Transferees,
if applicable) shall deliver to the Company at its registered office the shares certificate(s) (to the extent not already in the possessionof the Company) or an indemnity for lost certificate in a form acceptable to the Board for the H Shares so converting, and upon suchdelivery the Company shall be entitled to either (a) effect a transfer from the relevant H Shareholder to the Employee Trustee of all
such Deferred Shares in consideration for an aggregate sum of one penny and, upon such transfer becoming effective the relevant
Deferred Shares shall be automatically re-designated as H Shares shall apply mutatis mutandis to such transfer); or (b) issue to such
H Shareholders (and/or their Permitted Transferees, if applicable) share certificate(s) for the number of Deferred Shares resulting fromthe relevant conversion and any remaining H Shares.

Rights attaching to the shares - Conversion of Deferred Shares
Unless otherwise determined by the Board at any time prior thereto, all of the Deferred Shares then in issue shall automatically beconverted into and re-designated as Ordinary.

Rights attaching to the shares - Votes in general meeting and written resolutions
The Ordinary Series Shares shall confer on each holder of Ordinary Series Shares the right to receive notice of and to attend, speak andvote at all general meetings of the Company.
The Ordinary Shares shall confer on each holder of Ordinary Shares the right to receive notice of and to attend, speak and vote at all
general meetings of the Company and to receive and vote on proposed written resolutions of the Company.
The G Shares and H Shares shall not entitle the holders of them to receive notice of, to attend, to speak or to vote at any general
meeting of the Company nor to receive or vote on, or otherwise constitute an eligible member for the purposes of, proposed written
resolutions of the Company.
The Deferred Shares (if any) shall not entitle the holders of them to receive notice of, to attend, to speak or to vote at any general
meeting of the Company nor to receive or vote on, or otherwise constitute an eligible member for the purposes of, proposed written
resolutions of the Company.
On 12 February 2020, a bonus issue of 195,586 D Ordinary shares were issued at par from the share premium account.
In February and July 2020, the company completed a fundraising round and an extension thereto, raising $500m and $80m, with
4,118,566 E Ordinary shares allotted and fully paid at $121.4015 per share on 24 February 2020 and 658,970 E Ordinary shares allottedand fully paid at $121.4015 per share on 7 July 2020.
On 21 February 2020, 4,989,071 B Ordinary shares and 6,879,002 C Ordinary shares were redesignated as A Ordinary shares. On 5 June
2020, 48,239 Ordinary shares and 3,706 A Ordinary shares were redesignated as E Ordinary shares. On 19 June 2020, 4,213 Ordinary
shares were redesignated as E Ordinary shares.
In 2020, 18,790 Ordinary Shares were allotted and fully paid at £0.0000001 each; 57,220 Ordinary Shares were allotted and fully paid
at £0.03 each; 56,527 Ordinary Shares were allotted and fully paid at £0.10 each; 19,319 Ordinary Shares were allotted and fully paid
at £0.32 each; 62,522 Ordinary Shares were allotted and fully paid at £0.50 each; 9,474 Ordinary Shares were allotted and fully paid at£0.75 each; and 2,587 Ordinary shares were allotted and fully paid at £13.93 each; and 342 Ordinary shares were allotted and fully paidat £22.34 each to employees as they exercised their share options under the Group’s share option schemes. Proceeds of £95k (2019:£137k) were received from the employees.

Annual Report & Financial Statements 2021

101

Financial statements

Notes to the consolidated financial statement

In May 2021, all 18.1m A Ordinary shares were converted into Ordinary shares. Later between August-September, as part of capital
structuring 41.2 thousand of D Ordinary shares, 4.8 thousand of E Ordinary shares, 383.4 thousand of F Ordinary shares, 11.9 thousandof G Ordinary shares and 425.8 thousand of H Ordinary shares were also converted into Ordinary shares.
All shares have full voting and dividend rights. On a return of assets, capital distributions will be made to holders of A Ordinary, D
Ordinary and E Ordinary Shares in priority to all other Shareholders.

26.

Reserves

Group
Share premium account£000
At 1 January 2020 (restated)

248,814

Premium arising on issue of ordinary shares

448,630

Expense of issue of equity shares-

As 31 December 2020 (restated)

697,444

At 1 January 2021

697,444

Premium arising on issue of ordinary shares

601,878

Expense of issue of equity shares(11,870)

As 31 December 2021

1,287,452

Other reserves
Foreignexchangereserve

Shareoptions
reserveNet
investment
in foreign
operation
reserve

Financialinvestment
reserve

Own shares
held in
Employee
Benefit
Trusts*

Total

£000

£000

£000

£000

£000

£000

At 1 January 2020 (restated)

73

10,369---10,442Equity settled share-based payment charge-

57,182---

57,182Foreign currency translation adjustment

(328)

-

-

-

-

(328)

As 31 December 2020 (restated)(255)

67,551---

67,296

At 1 January 2021

(255)

67,551---

67,296-47,352---47,352Foreign currency translation adjustment(9,237)

-

-

-

-

(9,237)

Revaluation loss on finance investment

-

-

-

(763)

-

(763)

Cumulative hedge effectiveness reserve

-

-

3,365

-

-

3,365

Employee Benefit Trust purchase of own shares

-

-

-

-

(445)

(445)

(9,492)

114,903

3,365

(763)

(445)

107,568

Equity settled share-based payment charge

As 31 December 2021

Annual Report & Financial Statements 2021

102

Financial statements

Notes to the consolidated financial statement

Company
Share premium account£000
At 1 January 2020 (restated)

248,814

Premium arising on issue of ordinary shares

448,630

Expense of issue of equity shares-

As 31 December 2020 (restated)

697,444

At 1 January 2021

697,444

Premium arising on issue of ordinary shares

601,878

Expense of issue of equity shares(11,870)

As 31 December 2021

1,287,452

Other reserves
Foreignexchangereserve

Shareoptions
reserve

Financialinvestment
reserve

£000

£000

£000

At 1 January 2020 (restated)

87

10,369--10,456Equity settled share-based payment charge-

57,182--

57,182Foreign currency translation adjustment

(115)

-

-

-

(115)

As 31 December 2020 (restated)(28)

67,551--

67,523

At 1 January 2021

(28)

67,551--

67,523-47,341--47,341

Foreign currency translation adjustment

109

-

-

-

109

Revaluation loss on finance investment

-

-

(258)

-

(258)

Employee Benefit Trust purchase of own shares

-

-

-

(445)

(445)

As 31 December 2021

81

114,892

(258)

(445)

114,270

Equity settled share-based payment charge

Own shares
held in
Employee
Benefit
Trusts*

Total

£000

The following describes the nature and purpose of the other reserves within equity:
Foreign exchange reserve

The foreign exchange reserves represent the cumulative foreign currencytranslation movement on the assets and liabilities of the Group’s international
operations at year-end exchange rates.

Share options reserve

This records the fair value of equity-settled share options issued.

Net investment in foreign operation reserve

The net investment in foreign operation reserve represents the effective portionof the gains or losses on the retranslation of investments into foreign operations
due to exchange rate risks.

Financial investment reserve

The fair value through other comprehensive income reserve includes unrealised
gains or losses in respect of financial instruments at FVOCIThe Group consolidates one share trust. The Group’s own share reserve represents the cost of shares in the Revolut Group Employee
Benefit Trust (Fiduchi) which are held for the purposes of fulfilling obligations in respect of the Group’s share awards.

Annual Report & Financial Statements 2021

103

Financial statements

27.

Notes to the consolidated financial statement

Share-based payments

The Group issues equity-settled share-based payment awards to certain employees. Equity-settled share-based payments aremeasured at fair value (excluding the effect of non-market performance vesting conditions) at the date of grant. The fair value
determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period,
based on the Group’s estimate of the number of awards that will eventually vest and adjusted for the effect of non-market-based
vesting conditions.

2021 scheme and modification
In 2021, the Group introduced growth shares scheme to replace the Company Stock Option Scheme (“CSOP”) and Unapproved Options
Plan (“UOP”) prospectively. Employees having stock options under CSOP and UOP were eligible to voluntarily exchange their existingholdings in growth shares.
Unlike Options, Growth Shares entitle the shareholder to a capital return once the value of the Company exceeds a pre-set value pershare (the “Hurdle Price”) set by independent valuers. Shares granted will be held in the company-held trust until exercised.
Growth shares granted as a performance bonus vest according to a schedule with 50% vesting on the grant date and 25% vesting
annually on the anniversary of the grant date for the next two years. Growth shares granted as a sign-on bonus or promotion will vest
on an annual basis over four years i.e., 25% at each year-end.

CSOP and Unapproved share option schemes
In 2019 the Group operated two share options schemes, the first is an HMRC approved Company Share Option Scheme (“CSOP”), forUK employees, and the second one, is an Unapproved Options Plan (“UOP”), for the non-UK employees.
In 2020, the Group issued share options under the unapproved options plan for both UK and non-UK employees of the Group and issued
no share options under the CSOP plan.
The options are granted with a fixed exercise price, are exercisable after they have vested, and expire after 10 years.
Under both plans, options may have the following vesting periods: (i) a 4-year vesting period with the first 25% vested on the firstyear anniversary of the vesting commencement date, and the remaining 75% vesting monthly over the subsequent 36 months; or (ii) a
2-year vesting period with options vesting monthly over the 2 years. Employees are required to remain in employment with the Group
until the vesting period has elapsed, otherwise the awards lapse.
The fair value of the options granted during the year was determined by first valuing the total equity of the Group at the grant date. The
valuation of the Group was undertaken using both a price per user basis and a revenue multiple basis using ranges of multiples basedon a cohort of comparable companies to determine a range of possible equity values for the Group.
The mid-point of this range was used as an input to a Monte-Carlo simulation to determine the fair value of an ordinary share byrunning a large number of scenarios and attributing the resulting values to the classes of shares based on their economic rights.
The Black-Scholes option pricing model was then used to value the equity-settled share-based payment awards as the model isinternationally recognised as being appropriate to value employee share schemes similar to the UOP.
In addition to awards described above, a number of employees were granted share options in exchange for a temporary reduction insalary for a twelve-month period under the UOP. These options vest monthly over a 12-month vesting period, during which time theemployees must remain in employment with the Group. The options have a fixed exercise price and a maximum term of 10 years after
which they expire.
In accordance with IFRS 2, equity settled awards should be valued by measuring the fair value of services received directly where
possible. In this case it was possible to measure the fair value of the employee services directly by reference to the value of thesalary foregone.
Additional agreements are in place to grant up to 6,057,025 (2020: 6,057,025) additional nil cost options over ordinary shares tomembers of senior management at the CEO’s discretion if certain conditions are met, including the completion of a qualifying
fundraising or initial public offering on a recognised investment exchange, with certain share price, earnings, and operational
performance targets. Such awards would be granted and vest immediately upon meeting all the required conditions, except for certain
awards which may also be subject to time-based vesting requirements. No share-based payment charge has been recognised in
the year ended 31 December 2021 (2020: £nil) in relation to these options as it is currently not considered to be probable that these
conditions will be met.

Shares awarded to non-executive directors
Until May 2021, the non-executive directors of the Company agreed to forego a proportion of their cash salaries in exchange forpayment in shares. In May 2021, all of the Company’s non-executive directors’ salaries returned to being paid in cash. As at 31
December 2021, the non-executive directors held shares previously granted under the salary sacrifice agreement.

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Financial statements

Notes to the consolidated financial statement

Reconciliation of outstanding share-based payment awards
A reconciliation of share option movements over the year to 31 December 2021 is shown below:
Weighted average
exercise price2021

Number2021

Weighted average
exercise price2020

Number2020

Outstanding at the beginning of the year

0.45

2,446,706£0.69

891,765

Granted during the year

0.77

422,368£0.60

1,973,009

Exercised during the year

0.41

(250,399)£0.44(216,583)

Expired/sold during the year

0.00

(168,852)£3.04(201,485)

Outstanding at the end of the year

0.54

2,449,823£0.45

2,446,706

Exercisable at the end of the year

0.79

2,404,513£0.31

1,759,322

A reconciliation of growth share movements over the year to 31 December 2021 is shown below:
Weighted average
exercise price2021

Number2021

Weighted average
exercise price2020

Number
2020

-

-

-

-

Granted during the year

1,833.64

12,429,814--

Exercised during the year

-

-

-

-

Expired/sold during the year

-

-

-

-

1,833.64

12,429,814--

Outstanding at the beginning of the year

Outstanding at the end of the year

The options outstanding at 31 December 2021 had an exercise price of £0 and £22.34 (2020: £0 and £22.34), and a weighted averageremaining contractual life of 8.39 years (2020: 9.28 years).
The growth shares outstanding at 31 December 2021 had an exercise price;
Weighted average exercise price2021

Weighted average exercise price
2020

Pool 1

11.94-

Pool 2303.50-Pool 3303.50-Pool 4

1,187.50-

Pool 5

1,187.50-

Pool 6

2,093.75-

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105

Financial statements

Notes to the consolidated financial statement

Measurement of fair values
The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payment awards was as follows:

Model
Weighted average fair value
Expected volatility
Expected term (years)
Risk-free rate
Expected dividend yields

2021

2020

Black Scholes Model

Black Scholes Model£63.00 - £330.00£50.920% - 45.00%

0%-37.00%

0-4

0-4

(0.59)% - 0.63%(0.31)% - 0.57%

0%0%Measurement of fair values
The total share-based payment expense recognised in Administrative expenses in the Statement of Comprehensive Income isas follows:
2021

2020

Group

£000

£000

Equity settled schemes

47,34056,426

Sensitivity analysis
The Group has conducted an analysis of the sensitivity of the share-based payment charge recognised in the profit and loss to changes
in the key assumptions used to determine the fair value of the share options granted. The fair value is most sensitive to the ordinary
equity value used in the Monte-Carlo simulation, which is derived from the enterprise value determined at the grant date. The fair value
is not considered sensitive to reasonable changes in volatility or other assumptions used.
A 10% increase in the equity value at the valuation date for the share options granted in the year (which are not valued by reference tothe salary foregone) would result in an increase in the total share-based payment expense for the year by £4.7m (2020: £3.6m), with allother assumptions remaining unchanged. A 10% decrease in equity value assumption would result in decrease in the total share-based
payment expense for the year by £4.7m (2020: £3.6m), with all other assumptions remaining unchanged.

28.

Pension commitments

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in
an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted
to £3.7m (2020: £1.4m). Contributions totalling £1.2m (2020: £0.3m) were payable to the fund at the statement of financial position
date and are included in creditors.

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Financial statements

29.

Notes to the consolidated financial statement

Financial instruments

29.1 Financial instrument by category
The following table shows the carrying amount of each of the categories of financial instruments as at the end of thereporting period.

£000

31 December
2020(restated)£000

1,236,481

-

9,294

121

1,245,775

121

7,052,609

5,055,023

17,816

1,376

202,086

150,378

7,272,511

5,206,777(2,454)(1,970)(2,454)(1,970)(7,361,196)(4,637,230)

Trade and other payables – excluding lease liabilities(59,163)(120,206)

Lease liabilities(14,244)(24,928)(122)(81,812)(7,434,725)(4,864,176)

Group

31 December
2021

Financial assets measured at fair value
Financial instruments at FVOCI
Derivative financial assets

Financial assets measured at amortised cost
Cash and cash equivalent
Loans and advances to customers
Trade and other receivables

Financial liabilities measured at fair value
Derivative financial liabilities

Financial liabilities measured at amortised cost
Customer liabilities

Loans

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107

Financial statements

Notes to the consolidated financial statement£000

31 December
2020(restated)£000

383,670-

16,255

3,707

399,925

3,707

Cash and cash equivalent

3,984,868

2,562,779

Trade and other receivables

195,974

116,601

4,180,842

2,679,380(6,434)(2,139)(6,434)(2,139)Customer liabilities(3,516,981)(2,121,085)

Trade and other payables – excluding lease liabilities(309,874)(181,012)(12,714)(20,068)-(81,812)(3,839,569)(2,403,977)

Company

31 December
2021

Financial assets measured at fair value
Financial investment
Derivative financial assets

Financial assets measured at amortised cost

Financial liabilities measured at fair value
Derivative financial liabilities

Financial liabilities measured at amortised cost

Lease liabilities
Loans

Customer liabilities at fair value through profit and loss consists of customer liabilities in respect of contracts relating to thecommodities offering and cryptocurrencies.
Customer liabilities at amortised cost consists of customer liabilities in respect of electronic money (Group and Company) andcustomer deposits (Group).

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Financial statements

Notes to the consolidated financial statement

29.2 Financial instruments measured at fair value
The following table analyses financial instruments measured at fair value at the reporting date, by the level in the fair value
hierarchy into which the fair value measurement is categorised. The amounts are based on the values recognised in thestatement of financial position. There was no financial asset or liability measured at fair value as at 1 January 2020.
Group
As 31 December 2021

Total

Level 1

Level 2

Level 3

1,236,481

1,236,481

-

-

9,294

-

9,294

-

(2,454)-(2,454)-

1,243,321

1,236,481

6,840

-

Total

Level 1

Level 2

Level 3

-

-

-

-

121

-

121

-

(1,970)-(1,970)-(1,849)-(1,849)-

Total

Level 1

Level 2

Level 3

383,670

383,670--

16,255-

16,255-(6,434)-(6,434)-393,491

383,670

9,821

-

Total

Level 1

Level 2

Level 3

-

-

-

-

3,707

-

3,707

-

(2,139)-(2,139)

-

1,568

-

1,568

-

Financial assets measured at fair value
Financial investment
Derivative financial assets
Financial liabilities measured at fair value
Derivative financial liabilities

As 31 December 2020
Financial assets measured at fair value
Financial investment
Derivative financial assets
Financial liabilities measured at fair value
Derivative financial liabilities

Company
As 31 December 2021
Financial assets measured at fair value
Financial investment
Derivative financial assets
Financial liabilities measured at fair value
Derivative financial liabilities

As 31 December 2020
Financial assets measured at fair value
Financial investment
Derivative financial assets
Financial liabilities measured at fair value
Derivative financial liabilities

For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Group determines
whether transfers have occurred between levels in the fair value hierarchy by re-assessing categorization (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were notransfers between the different levels during the current reporting or prior period.

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109

Financial statements

Notes to the consolidated financial statement

Valuation techniques
Derivative financial instruments are valued using valuation techniques that utilise observable inputs. The key inputs used in
valuing the derivatives are the relevant forward exchange rates for the currencies involved. All derivative financial instruments
between the Company and its subsidiaries represent foreign currency swap contracts valued using direct and indirect
observable inputs.
There were no changes to the valuation techniques during the period.

Financial instruments not measured at fair value
The carrying values of financial instruments not measured at fair value are a reasonable approximation of their fair value. The
following table sets out the fair values of financial instruments not measured at fair value and analyses them by the level in thefair value hierarchy into which each fair value measurement is categorised. If the carrying amount of the financial instruments
are a reasonable approximation of fair value, they are not valued at fair value and have thus been excluded from the table below.
Additionally, the fair value disclosure of lease liabilities is not required.
Group
At 31 December 2021

Total

Level 1

Level 2

Level 3

7,052,609-

7,052,609-

17,816--

17,816

202,086-

202,086-

7,254,695

17,816

Financial assets measured at amortised cost
Cash and cash equivalent
Loans and advances to customers
Trade and other receivables

7,272,511

Financial liabilities measured at amortised cost
Customer liabilities(7,361,196)-(7,361,196)-

Trade and other payables – excluding lease liabilities(59,193)-(59,193)-

Lease liabilities(14,244)--(14,244)

(122)

-

-

(122)

(7,420,389)(14,366)

Loans(7,434,755)

At 31 December 2020

Total

Level 1

Level 2

Level 3

5,055,023-

5,055,023

-

1,376

-

-

1,376

150,378-

150,378-

5,206,777-

5,205,401

1,376(4,637,230)-(4,637,230)-

Trade and other payables – excluding lease liabilities(120,206)-(120,206)-

Lease liabilities(24,928)--(24,928)

Loans(81,812)-(81,812)-(4,864,176)-(4,839,248)(24,928)

Financial assets measured at amortised cost
Cash and cash equivalent
Loans and advances to customers
Trade and other receivables

Financial liabilities measured at amortised cost
Customer liabilities

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110

Financial statements

Notes to the consolidated financial statement

Total

Level 1

Level 2

Level 3

Cash and cash equivalent

2,462,986-

2,462,986-

Trade and other receivables

206,523-

206,523-

2,669,509-

2,669,509-(2,367,200)-(2,367,200)-

Trade and other payables – excluding lease liabilities(192,848)-(192,848)-

Lease liabilities(26,697)--(26,697)

Loans(120,518)-(120,518)-(2,707,263)-(2,680,566)(26,697)

Total

Level 1

Level 2

Level 3

Cash and cash equivalent

3,984,868-

3,984,868-

Trade and other receivables

195,974-

195,974-

4,180,842-

4,180,842-

Customer liabilities(3,516,981)-(3,516,981)

Trade and other payables – excluding lease liabilities(309,874)-(309,874)(12,714)-(3,839,569)-(3,826,855)(12,714)

Total

Level 1

Level 2

Level 3

Cash and cash equivalent

2,562,779-

2,562,779-

Trade and other receivables

116,601-

116,601-

2,679,380-

2,679,380-(2,121,085)-(2,121,085)-

Trade and other payables – excluding lease liabilities(181,012)-(181,012)-

Lease liabilities(20,068)--(20,068)

Loans(81,812)-(81,812)(2,403,977)-(2,383,909)

At 1 January 2020
Financial assets measured at amortised cost

Financial liabilities measured at amortised cost
Customer liabilities

Company
At 31 December 2021
Financial assets measured at amortised cost

Financial liabilities measured at amortised cost

Lease liabilities

At 31 December 2020

(12,714)

Financial assets measured at amortised cost

Financial liabilities measured at amortised cost
Customer liabilities

Annual Report & Financial Statements 2021

111

(20,068)

Financial statements

29.3

Notes to the consolidated financial statement

Derivative financial instruments

Group

At 31 December 2020

At 31 December 2021
Carrying
amountassetsCarrying
amountliabilities

Notional
amountCarrying
amountassetsCarrying
amountliabilities

Notional
amount

£000

£000

£000

£000

£000

£000

2,171

-

172,257

-

-

-

6,394

2,143

783,771

121

1,970

290,464

Foreign exchange forward contracts

729

311

107,130---

Total derivatives not in hedge accounting relationships

7,123

2,454

890,901

121

1,970

290,464

Total derivative financial instruments

9,294

2,454

1,063,158

121

1,970

290,464

Total derivatives in hedge accounting relationships
Derivatives not in hedge accounting relationships:
Foreign currency swaps

Company

At 31 December 2020

At 31 December 2021
Carrying
amountassetsCarrying
amountliabilities

Notional
amountCarrying
amountassetsCarrying
amountliabilities

Notional
amount

£000

£000

£000

£000

£000

£000

-

-

-

-

-

-

15,526

6,123

956,028

3,707

2,139

290,464

729

311

107,130---

Total derivatives not in hedge accounting relationships

16,255

6,434

1,063,158

3,707

2,139

290,464

Total derivative financial instruments

16,255

6,434

1,063,158

3,707

2,139

290,464

Total derivatives in hedge accounting relationships
Derivatives not in hedge accounting relationships:
Foreign currency swaps
Foreign exchange forward contracts

30.

Financial risk management

The Group is exposed to financial risks in the ordinary course of business. The Group divides these risks into thecredit risk, liquidity risk and funding management, market risk and capital risk management.

following categories:

30.1 Credit risk
Credit risk is the risk of financial loss should the Group’s borrowers or counterparties fail to fulfil their contractual obligations
in full and on time. The Group is exposed to various credit risks in the course of its operations, the majority of which arise fromthe placements of corporate and client safeguarded funds with financial institutions. These are typically investment grade rated
institutions. The Group also has short dated credit exposure for receivables due from card schemes and merchant acquirers used
to process user card top-ups, as well as credit exposures to Crypto counterparties used to facilitate trading.
The Group has retail credit risk relating to its consumer credit products. These products comprise of loans and credit cards in
Lithuania and Poland.
To manage credit risk appetite, the Group’s credit risk management policies and procedures require all counterparties giving riseto credit risk to be assessed at least annually and assigned a credit risk limit commensurate with their risk profile, subject toapproved materiality thresholds. The Group’s Credit Risk function monitors adherence to limits and appropriate management ofcredit risks where deterioration is identified. Key decisions are subject to review and approval by the ALCO.

Annual Report & Financial Statements 2021

112

Financial statements

Notes to the consolidated financial statement

The Group’s exposure to financial institutions is expected to evolve over time alongside the Group’s intention to obtain banklicences in the US and UK, with expectations that a high-quality liquid assets portfolio will be established to support meeting
regulatory large exposure thresholds alongside licence approvals. The Group also expects substantial growth within the retailcredit portfolio over the coming year.
Group

Company

31 December
2021

31 December
2020(restated)

1 January 2020
(restated)

31 December
2021

31 December
2020(restated)

£000

£000

£000

£000

£000

Cash and cash equivalent

7,052,609

5,055,023

2,462,986

3,984,868

2,562,779

Derivative financial assets

9,294

121

-

16,255

3,707

1,236,481--

383,670-

Loans and advances to customers

17,816

1,376

-

-

-

Other Assets

214,276

164,524

222,867

179,329

130,204

7,963

1,155

-

-

-

8,538,439

5,222,199

2,685,853

4,564,122

2,696,690

Financial investment

Undrawn commitment
Gross credit risk exposure

Undrawn commitment relates to credit card and personal loan against which a 12-month expected credit loss provision of £8k(2020: £4k) has been recognised.

Credit quality analysis
The following tables set out information about the credit quality of financial investments and loans and advances to customers
without taking into account collateral or other credit enhancement. The amounts of the financial assets in the table represent
gross carrying amounts.
Explanation of the terms ‘Stage 1’, ‘Stage 2’ and ‘Stage 3’ is included in note 4.14.
Group
At 31 December 2021

12 months PD

Stage 1

Stage 2

Stage 3

Total

Grades 1-4

0%-0.5%

1,236,748--

1,236,748

Grades 5-6

0.5%-1.3%

Grade 7-8

1.3%-3%

Grade 93%-5%Grade 105%-8%Grade 11+8%-100%Financial investment:

Gross carrying amount

1,236,748

1,236,748

(267)

(267)

Carrying amount

1,236,481

1,236,481

ECL coverage %

0.02%

0.02%

Loss allowance

Annual Report & Financial Statements 2021

113

Financial statements

Loans and advances to customers:

Notes to the consolidated financial statement

12 months PD

Stage 1

Stage 2

Stage 3

Total

Grades 1-4

0%-0.5%

5,356

33

10

5,399

Grades 5-6

0.5%-1.3%

3,941

61

4

4,006

Grade 7-8

1.3%-3%

2,741

198

16

2,955

Grade 9

3%-5%

1,232

137

5

1,374

Grade 10

5%-8%

384

49

1

434

Grade 11+8%-100%

493

186

17

696

Gross carrying amount

14,147664

53

14,864

Loss allowance

(131)

(43)

(34)

(208)

Carrying amount

14,016621

19

14,656

ECL coverage %

0.93%

6.48%

64.15%

1.40%

Credit cards:
Grades 1-4

0%-0.5%

689

3

2

694

Grades 5-6

0.5%-1.3%

875

16

3

894

Grade 7-8

1.3%-3%

812

14

11

837

Grade 9

3%-5%

452

44

7

503

Grade 10

5%-8%

120

44

0

164

Grade 11+8%-100%

68

149

15

232

Gross carrying amount

3,016

270

38

3,324

Loss allowance

(79)

(63)

(22)

(164)

Carrying amount

2,937

207

16

3,160

ECL coverage %2.62%

23.33%

57.89%

4.93%

12 months PD

Stage 1

Stage 2

Stage 3

Total

Grades 1-4

0%-0.5%

616

-

-

616

Grades 5-6

0.5%-1.3%

382

-

-

382

Grade 7-8

1.3%-3%

160

-

-

160

Grade 9

3%-5%

33

-

-

33

Grade 10

5%-8%

0

-

-

0

Grade 11+8%-100%

0

-

-

0

1,191

-

-

1,191

Loss allowance

(4)

-

-

(4)

Carrying amount

1,187

-

-

1,187

ECL coverage %

0.34%

-

-

0.34%

Group
At 31 December 2020
Loans and advances to customers:

Gross carrying amount

Annual Report & Financial Statements 2021

114

Financial statements

Notes to the consolidated financial statement

Credit cards:
Grades 1-4

0%-0.5%

65

-

-

65

Grades 5-6

0.5%-1.3%

70

-

-

70

Grade 7-8

1.3%-3%

54

-

-

54

Grade 9

3%-5%

8

-

-

8

Grade 10

5%-8%

-

-

-

-

Grade 11+8%-100%

-

-

-

-

Gross carrying amount

197

-

-

197

Loss allowance

(5)

-

-

(5)

Carrying amount

192

-

-

192

ECL coverage %

2.54%

-

-

2.54%

12 months PD

Stage 1

Stage 2

Stage 3

Total

Grades 1-4

0%-0.5%

383,774--

383,774

Grades 5-6

0.5%-1.3%

-

-

-

-

Grade 7-8

1.3%-3%

-

-

-

-

Grade 90%-0.5%

-

-

-

-

Grade 10

0.5%-1.3%

-

-

-

-

Grade 11+

1.3%-3%

-

-

-

-

383,774--

383,774

(104)

-

-

(104)

Carrying amount383,670--

383,670

ECL coverage %

0.03%

-

-

0.03%

Company
At 31 December 2020
Financial investment:

Gross carrying amount
Loss allowance

Credit risk concentration
An analysis of the Group’s credit risk concentrations per class of financial asset is provided in the following tables. Unlessspecifically indicated, for financial assets, the amounts in the table represent gross carrying amounts.

At 31 December 2021

Corporate

Customers(Retail andBusiness)

Corporate

Europe excluding the UK

852,811--

UK

383,670--

17,816

-

1,380

-

-

-

17,816

-

1,380

Group

Financial investment

Loans and advances tocustomers

At 31 December 2020

Europe excluding the UK
UK

Total

Annual Report & Financial Statements 2021

1,236,481

115

Customers(Retail andBusiness)

Financial statements

Notes to the consolidated financial statement

At 31 December 2021

Corporate

Customers(Retail andBusiness)

Corporate

Customers(Retail andBusiness)

-

-

-

-

383,670---

Europe excluding the UK

-

-

-

-

UK

-

-

-

-

383,670---

Company

Financial investment

Europe excluding the UK
UK

Loans and advances tocustomers

At 31 December 2020

Total

Loss allowance
The following tables show reconciliations from the opening to the closing balance of the loss allowance by financial instruments.
Group
Stage 1

Stage 2

Stage 3

Total

Balance at 1 January 2020

-

-

-

-

Transfer to Stage 1

-

-

-

-

Transfer to Stage 2

-

-

-

-

Transfer to Stage 3

-

-

-

-

Net remeasurement of loss allowance

-

-

-

-

New financial assets originated or purchased

4

-

-

4

Financial assets that have been derecognised

-

-

-

-

Write-offs

-

-

-

-

Other movements

-

-

-

-

Balance at 31 December 2020

4

-

-

4

Balance at 1 January 2021

4

-

-

4

Transfer to Stage 1

-

-

-

-

Transfer to Stage 2

(1)

1

-

-

Transfer to Stage 3

-

-

-

-

Net remeasurement of loss allowance

(1)

1

11

11

New financial assets originated or purchased

134

43

24

201

Financial assets that have been derecognised

(1)

-

-

(1)

Write-offs

-

-

-

-

Other movements

(5)

(2)

(1)

(8)

Balance at 31 December 2021

130

43

34

207

Loans and advances to customers

Annual Report & Financial Statements 2021

116

Financial statements

Notes to the consolidated financial statement

Credit cards
Balance at 1 January 2020

-

-

-

-

Transfer to Stage 1

-

-

-

-

Transfer to Stage 2

-

-

-

-

Transfer to Stage 3

-

-

-

-

Net remeasurement of loss allowance

-

-

-

-

New financial assets originated or purchased

5

-

-

5

Financial assets that have been derecognised

-

-

-

-

Write-offs

-

-

-

-

Other movements

-

-

-

-

Balance at 31 December 2020

5

-

-

5

Balance at 1 January 2021

5

-

-

5

Transfer to Stage 1

0

-

-

-

Transfer to Stage 2

(1)

1

-

-

Transfer to Stage 3

-

-

-

-

Net remeasurement of loss allowance

(3)

7

10

14

New financial assets originated or purchased

79

59

14

152

Financial assets that have been derecognised

(1)

-

-

(1)

Write-offs

-

-

-

-

Other movements

-

(3)

(1)

(4)

Balance at 31 December 2021

79

64

23

166

Annual Report & Financial Statements 2021

117

Financial statements

Notes to the consolidated financial statement

Company
Stage 1

Stage 2

Stage 3

Total

Balance at 1 January 2020

-

-

-

-

Transfer to Stage 1

-

-

-

-

Transfer to Stage 2

-

-

-

-

Transfer to Stage 3

-

-

-

-

Net remeasurement of loss allowance

-

-

-

-

New financial assets originated or purchased

-

-

-

-

Financial assets that have been derecognised

-

-

-

-

Write-offs

-

-

-

-

Unwind of discount

-

-

-

-

Other movements

-

-

-

-

Balance at 31 December 2020

-

-

-

-

Balance at 1 January 2021

-

-

-

-

Transfer to Stage 1

-

-

-

-

Transfer to Stage 2

-

-

-

-

Transfer to Stage 3

-

-

-

-

Net remeasurement of loss allowance

-

-

-

-

New financial assets originated or purchased

104

-

-

104

Financial assets that have been derecognised

-

-

-

-

Write-offs

-

-

-

-

Unwind of discount

-

-

-

-

Other movements

-

-

-

-

104

-

-

104

Financial investment

Balance at 31 December 2021

There were no significant changes in the gross carrying amount of financial instruments during the period that contributed tochanges in the loss allowance.

30.2 Liquidity risk and funding management
Liquidity risk is the risk that the Group cannot meet its financial obligations when they fall due or is only able to do so atexcessive cost. Funding risk is the risk that Revolut does not have sufficient stable sources of funding to meet its financial
obligations when they fall due or can do so only at excessive cost. Risk arises when assets maturing during a particular period arelower than corresponding liabilities maturing during the same period. An unexpected increase in assets or a decrease in liabilities
can also create liquidity risk. The group is, or may in the future be, exposed to a number of liquidity and funding risks, including
retail funding run-off, wholesale funding reduction, pre-funding, marketable and non-marketable assets, contingent off-balance
sheet exposures and commitment drawdowns, intraday requirements, collateral requirements, funding concentration, and foreignexchange. These risks are managed by the Treasury Function, with control and oversight provided by the Risk Management
Function, the Assets and Liabilities Management Committee and the Management Board. The group’s key liquidity policy is tomaintain a portfolio of unencumbered, high-quality cash instruments and securities that are readily convertible to cash to ensurethat it can meet all of its financial obligations in business-as-usual circumstances and in stress conditions. The group complies
with this policy by holding surplus cash in the form of overnight deposits with banks.

Maturity analysis for financial assets and financial liabilities
The table below summarises the maturity profile of the Group’s financial assets and liabilities based on contractual
undiscounted payments:

Annual Report & Financial Statements 2021

118

Financial statements

Group at
31 December 2021

Notes to the consolidated financial statement

Carrying
amount£000

Total

On demand

3-12
months£000

1-5 Years

£000

Up to
3 months
£000

£000

Over 5
years
£000

£000

Cash and cash equivalents

7,052,609

7,052,609

7,052,609

-

-

-

-

Financial investment

1,236,481

1,236,481--

1,236,481--

Loans and advances tocustomers

17,817

17,817

-

3,200

449

7,767

6,401

Derivative financial assets

9,294

9,294

-

9,294

-

-

-

Trade and other receivables

206,880

206,880

3,105

203,775---

8,523,081

8,523,081

7,055,714

216,269

1,236,930

7,767

6,401

Customer liabilities

7,361,196

7,361,196

7,361,196

-

-

-

-

Trade and other payables

165,248

165,248-

165,248---

Lease liabilities

14,244

15,196

-

1,261

4,391

9,403

141

Derivative financial liabilities

2,454

2,454

2,454

-

-

-

-

Current tax liability

9,374

9,374

-

9,374

-

-

-

7,552,516

7,553,468

7,363,650

175,883

4,391

9,403

141

Carrying
amount£000

Total

On demand
£000

3-12
months£000

1-5 Years

£000

Up to
3 months
£000

£000

Over
5 years£000

Cash and cash equivalents

5,055,023

5,055,023

5,055,023

-

-

-

-

Derivative financial assets

121

121

-

121

-

-

-

1,376

1,381

-

849

34

498

-

153,242

153,242

1,808

151,434---

5,209,762

5,209,767

5,056,831

152,404

34

498

0

(4,637,230)(4,637,230)(4,637,230)

-

-

-

-

(1,970)(1,970)-(1,970)---Trade and other payable(143,663)(143,663)-(143,663)---

Lease liabilities(24,928)(27,894)-(1,387)(5,843)(19,963)

(701)

Loans

(81,812)(81,812)--(81,812)--Current tax liability(1,670)(1,670)-(1,670)---(4,891,273)(4,894,239)(4,637,230)(148,690)(87,655)(19,963)(701)

Financial assets

Financial liabilities

Group at
31 December 2020
Financial assets

Loans and advances tocustomers
Trade and other receivables

Financial liabilities
Customer liabilities
Derivative financial liabilities

Annual Report & Financial Statements 2021

119

Financial statements

Group at
1 January 2020

Notes to the consolidated financial statement

Carrying
amount£000

Total

On demand

3-12
months£000

1-5 Years

£000

Up to
3 months
£000

£000

Over
5 years£000£000

Cash and cash equivalents

2,462,986

2,462,986

2,462,986

-

-

-

-

Trade and other receivables

209,825

209,825

4,815

205,010---

2,672,811

2,672,811

2,467,801

205,0100

0

0Customer liabilities(2,367,200)(2,367,200)(2,367,200)

-

-

-

-

Trade and other payables(203,830)(203,830)-(203,830)---

Lease liabilities(26,697)(30,724)-(639)(4,425)(24,795)

(865)

Loans

(120,518)(120,518)

-

-

(972)

(119,546)

-

-

-

-

-

-

-

-

(2,718,245)(2,722,272)(2,367,200)(204,469)(5,397)(144,341)(865)

Carrying
amount£000

Total

On demand
£000

3-12
months£000

1-5 Years

£000

Up to
3 months
£000

£000

Over
5 years£000

Cash and cash equivalents

3,984,868

3,984,868

3,984,868

-

-

-

-

Derivative financial assets

16,255

16,255-

16,255---

Financial investment

383,670

383,670-

383,670--

Trade and other receivables

200,228

200,228

1,058

199,170---

4,585,021

4,585,021

3,985,926

215,425

383,670--(3,516,981)(3,516,981)(3,516,981)

-

-

-

-

(6,434)(6,434)-(6,434)---(320,135)(320,135)-(320,135)---(12,714)(13,453)-(1,196)(4,068)(8,189)

(432)

(432)

-

(432)

-

-

-

(3,856,698)(3,857,437)(3,516,981)(328,199)(4,068)(8,189)-Financial assets

Financial liabilities

Current tax liability

Company at
31 December 2021
Financial assets

Financial liabilities
Customer liabilities
Derivative financial liabilities
Trade and other payables
Lease liabilities
Current tax liability

Annual Report & Financial Statements 2021

120

Financial statements

Company at
31 December 2020

Notes to the consolidated financial statement

Carrying
amount£000

Total

On demand

3-12
months£000

1-5 Years

£000

Up to
3 months
£000

£000

Over
5 years£000£000

Cash and cash equivalents

2,562,779

2,562,779

2,562,779

-

-

-

-

Derivative financial assets

3,707

3,707

-

3,707

-

-

-

Trade and other receivables

119,043

119,043

1,067

117,976---

2,685,529

2,685,529

2,563,846

121,683---(2,121,085)(2,121,085)(2,121,085)

-

-

-

-

(2,139)(2,139)-(2,139)---Trade and other payables(198,593)(198,593)-(198,593)---

Lease liabilities(20,068)(22,328)-(1,243)(4,761)(15,623)

(701)

Loans

(81,812)(81,812)

-

-

-

-

-

(1,178)(1,178)

-

-

-

-

-

(2,424,875)(2,427,135)(2,121,085)(201,975)(4,761)(15,623)(701)

Financial assets

Financial liabilities
Customer liabilities
Derivative financial liabilities

Current tax liability

The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will besignificantly earlier, nor expect the actual cash flow amount will be significantly different.

30.3 Market risk
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market
variables such as in interest rates, credit spreads, commodity prices, equity prices and foreign exchange rates.
The Group’s market risk management policies and procedures provide effective and robust mitigation. The Group monitors its
exposures continually, using automated KRIs and associated processes reviewing metrics such as Value at Risk, FX stress tests
for crypto currencies, FX profit and losses and interest rate risk. The Group makes hedging transactions as appropriate. Keydecisions are subject to review and approval by the Asset and Liability Committee (“ALCO”).
The market risks for the Group have remained stable and well contained. While The Group has grown significantly, the processes
have remained robust, accurate and reliable. The Group expects the processes and market risk exposures to remain broadly
consistent over the next year, although the Group anticipates that market risk will grow over time as the Group further rolls out its
credit offering, increasing its exposure to interest rate risk, and as its investment portfolio grows and includes more types of liquid
assets. The Group is exposed to the below market risks.

Foreign exchange risk
The Group provides foreign exchange and cryptocurrency services to its customers via multi-currency wallets that allow spending
in different currencies. It is thus exposed to currency exchange rate fluctuations. The Group is exposed to foreign exchange
risk arising from various corporate activities and stemming from revaluation of contractual cash-flows or assets and liabilities
denominated in foreign currencies.
The Group is exposed to the risk that its earnings, capital or ability to meet business objectives could be adversely affected bychanges in the level or volatility of market variables, which might include changes in interest rates, credit spreads, commodity
prices, equity prices and foreign exchange rates. The Group monitors its exposures continually, using automated KRIs andassociated processes reviewing metrics such as FX profit and losses. The company makes hedging transactions as appropriate.
Key decisions are subject to review and approval by the ALCO.
The risk management objective in relation to this hedge is to mitigate the exposure arising from retranslating the EUR net assets
of Revolut Payments UAB (RPUAB) and Revolut Bank UAB (RBUAB) in the Group’s GBP consolidated financial statements.
Based on the current business model, the foreign exchange risk related with user balances kept in non-base currencies results
in a low foreign exchange risk for RBUAB. The exposure is monitored on a daily basis to ensure the effective management of
this risk. The foreign exchange exposure of the banking book arises from the Treasury Function activities. This includes profit
on the banking products, interest earned on nostro balances and various costs (all in non-functional currency). A limited foreignexchange exposure is allowed as defined per RBUAB’s Risk Appetite Statement. Any material foreign exchange risk arising fromTreasury Function activities is hedged on a day-to-day basis and is subject to ongoing monitoring. As of 31 December 2021,
RBUAB had no material unhedged exposures to foreign exchange risk.

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121

Financial statements

Notes to the consolidated financial statement

The carrying amounts of the Group’s foreign currency denominated monetary assets, monetary liabilities and derivative
instruments at the reporting date are as follows:Group

Monetary assets£000

Monetary liabilities£000

Net position
£000

GBP

2,340,409(1,918,135)

422,274EUR

4,484,902(3,537,844)

947,058

USD

970,028(1,060,768)(90,740)

Others

737,748(965,712)(227,964)

GBP

1,641,700(1,376,272)

265,428EUR

2,129,492(2,020,895)

108,597

USD

644,852(765,478)(120,626)

Others865,941(716,162)

149,779

Monetary assets£000

Monetary liabilities£000

Net position
£000

GBP

1,966,093(1,729,411)

236,682

EUR

1,288,665(837,436)

451,229

USD

665,522(640,741)

24,781Others532,688(451,377)

81,311GBP

1,043,847(1,204,825)(160,978)EUR

613,005(569,675)

43,330USD

363,195(355,119)

8,076

Others1,955,112(1,401,002)

554,110

At 31 December 2021

At 31 December 2020

Company
At 31 December 2021

At 31 December 2020

Foreign currency sensitivity analysis
The Group’s foreign currency risk is managed centrally by the Group’s Treasury team and the Market Making execution desk.
FX risk is monitored on an ongoing basis by using a stress testing approach broadly equivalent to Value at Risk but focused onrisk drivers specific to Revolut’s business model:• FX risk arising from open non-GBP currency positions that include both fiat and crypto currencies, and,• Interest rate risk arising from instruments that are accounted for at fair value.
Under the severe stress test, a loss of £19.4m (2020: 5.8m) would arise if the USD depreciates by 5.5%, EUR appreciates by 5.1%
and CHF appreciates by 3.9% against GBP.

Hedge on net investment in foreign operations
The Group hedges the currency risk of its net investment in its euro denominated foreign operations in Lithuania using GBP: EUR
foreign currency swaps entered into with a third party.
The effective portion of the gains or losses on the retranslation of this borrowing due to exchange rate risks is transferred toequity to offset any gains or losses on translation of the net investments in the subsidiaries. The ineffectiveness in these hedges
was nil both in 2021 and 2020, respectively.

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122

Financial statements

Notes to the consolidated financial statement

The following table shows the maturity of the hedging instruments:
Group

Carrying
amount£000

On demand

3-12
months£000

1-5 Years

£000

Up to
3 months
£000

£000

Over
5 years
£000

2,404

-

2,404

-

-

-

-

-

-

-

-

-

At 31 December 2021
Derivative financial assets
Derivative financial liabilities

Average GBP: EUR exchange rate 0.8521

The table below summarises the amounts that have affected the statement of comprehensive income as a result of applying net
investment hedging:
Carrying value

Changes in fair value of hedging instruments used for measuring
hedge ineffectiveness
Effective
portionHedge
ineffectivenessrecognised in profit
or loss into

Reclassified
into profit orloss into

Other operating
income/ (expense)
£000

Other
revenue£000--

Notional
amount£000

AssetsLiabilities

Total

£000

£000

£000

Recognisedin OCI£000

174,680

2,404

-

2,404

(3,365)

At 31 December
2021
FX Swaps

Due to the short-term nature of the hedges, as well as the low interest rate environment the Group is in, any fair value changes
due to anything other than the spot rate is expected to be minimal and as such the cost of hedging is deemed to be immaterial.
At 31 December 2020, the Group had no hedges on net investments in foreign operations.

IInterest rate risk
The Group’s interest rate risk relates to its banking subsidiary, Revolut Bank UAB (“RBUAB”). Interest rate risk in the banking
book (“IRRBB”) is the risk that RBUAB’s statement of financial position and profitability is structurally exposed to unexpectedmovements in interest rates. This risk stems from maturity and repricing mismatches between assets and liabilities, which would
materialise with changes in the shape of the yield curve (“gap risk”), or from interest rate related options embedded in those thatmight affect future cash flows (“option risk”), or with changes in the relationship between various yield curves (“basis risk”).
To quantify the IRRBB, RBUAB uses two metrics: net interest income (“NII”) sensitivity and economic value of equity (“EVE”)
sensitivity. NII is computed as the impact of parallel shock in interest rates on the net interest income generated by the banking
book items based on their repricing profiles. EVE is assessed through a measurement of changes in the net present value of theinterest rate sensitive instruments (excluding Common Equity Tier 1 (“CET1”) instruments and other perpetual own funds) overtheir remaining life resulting from interest rate movements assuming six different shock scenarios.
In line with regulatory guidelines and internal judgment, a floor is prescribed for downward shocks to stop the simulated interest
rates from being unrealistically negative.
Both metrics are managed against a control framework, which is defined with set limits in place. The Treasury Function is
responsible for IRRBB management on an on-going basis using mitigation approaches such as the use of hedging and dynamic
adjustment of in-app rate offerings to influence uptake behaviour. Interest rate characteristics of funding are matched as far as
possible to lending and investments into securities. The Risk Management Function closely monitors IRRBB exposures, proposes
limits and calculation assumptions, and performs stress testing. Any breach of the limit is escalated to the senior managementwith mitigating actions taken.
Following table shows the sensitivities under NII and EVE approach at the group consolidated position. The exposure to interest
rate risk is not material for the Group.

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123

Financial statements

Notes to the consolidated financial statement

Group

2021

2020

Net interest income based approach

£000

£000

200 bps parallel increase

42,9001,600

200 bps parallel decrease(14,700)(500)

200 bps parallel increase

22,6002,100

200 bps parallel decrease(10,100)(500)

Economic value of equity based approach

30.4 Capital risk management
Capital Risk is the risk that the Group and its individual entities do not hold adequate capital to support their business activities
based on its regulatory requirements and risk profile.
Capital risk is mitigated using KRIs that trigger immediate intervention if the capital runway falls below 12 months. Revolut Ltd
holds capital buffers, ensuring that the entity has sufficient capital based on its risk profile and to mitigate the impact of a stresson the firm’s financial position.
The Group has and its individual entities have, and both expect to have in the future, sufficient capital to support its risk profile.
The Group’s banking subsidiary, Revolut Bank UAB (“RBUAB”/ “Revolut Bank”), which is an EEA regulated bank, has regulatory
capital requirements.
RBUAB’s regulatory eligible capital consists exclusively of Common Equity Tier 1 (“CET1”). capital, which comprises share capital,
reserves and retained earnings (including current year losses), less intangible assets and deferred tax assets.
RBUAB maintains an actively managed capital base to cover risks inherent in the business and comply with the regulatory
capital adequacy requirements, which are calculated following the EU Capital Requirements Regulation (“CRR”) and the Capital
Requirements Directive (“CRD”).
In accordance with the regulatory capital requirements, banks are expected to operate with their capital being equivalent to atleast the sum of the minimum Pillar 1 requirements, Pillar 2 requirement (“P2R”), Combined Buffer Requirement (“CBR”) and Pillar
2 guidance (“P2G”).
As of 31 December 2021, the total capital requirement of RBUAB (in accordance with the regulatory requirements) is equal to10.2% for CET1 capital ratio and 13.7% for total capital ratio.
The main objectives of RBUAB in managing its capital are as follows:• The capital planning, and the capital held by RBUAB at any time, are consistent with RBUAB’s strategy and support
its implementation;• Ensuring that RBUAB’s capital level appropriately covers all material risks to which RBUAB is exposed and enables it to pursue
its business objectives;• RBUAB complies with the regulatory capital requirements;• RBUAB shall meet its internally determined capitalisation targets, which envisage appropriate additional capital resources
above the regulatory required capital in order to ensure capital adequacy in case of material deviations of RBUAB’s performancefrom the financial plan or the severe adverse scenarios (both bank-specific and systemic); and• RBUAB shall have a range of available and feasible management actions to restore its capitalisation in case of its deterioration.
• The optimization of the capital in order to maximise shareholder value, including usag of internal capital allocation to businessand its consideration in risk adjusted pricing so that the bank is able to deliver the level of return on risk adjusted capitalrequired by shareholders.
• RBUAB manages its capital structure and makes adjustments to it according to changes in economic conditions and the risk
characteristics of its activities. In order to maintain or adjust the capital structure, RBUAB may take such actions as adjustmentof the amount of dividend payment to shareholders, return of capital to shareholders, issue capital securities or make structuralchanges to its statement of financial position ensuring optimal usage of capital. The objectives, policies and processes relatedwith the RBUAB’s capital management are reviewed at least annually to keep them up to date.

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124

Financial statements

Notes to the consolidated financial statement

ActualRequired

ActualRequired

2021

2021

2020

2020

Actual common equity Tier 1 (CET1 ) capital

77

2

11

2

Other Tier 2 capital instruments

-

-

-

-

Total capital

77

2

11

2

Risk weighted assets

21

23

5

CET1 capital ratio

372.77%47.70%

Total capital ratio

372.77%47.70%£m

The RBUAB has complied in full with all of its externally imposed capital requirements during 2021 and 2020.

31.

Notes to the cash flow statement

Significant non-cash transactions from investing and financing activities are as follows:Group

Acquisition of right-of-use assets

Reconciliation of movements of liabilities to cash flows arising from financing activities
Group reconciliation of movements of liabilities to cash flows arising from financing activities as of 31 December:

Annual Report & Financial Statements 2021

125

2021
£000

2020
£000

302

1,633

Financial statements

Notes to the consolidated financial statement

Loans
£000

Lease
liabilities
£000

£000

120,517

26,697

147,214

Changes to existing lease agreements

-

2

2

New leases entered into during the year

-

1,631

1,631

Lease payments made in the year-

(5,640)(5,640)

Unwinding of discount

-

1,542

1,542

Interest paid

(972)

-

(972)

Impact of movement of foreign exchange rates

5,631

697

6,328

(43,365)-(43,365)-22

As at 31 December 2020

81,811

24,931

106,742

As at 1 January 2021

81,812

24,927

106,739

Changes to existing lease agreements

-

(206)

(206)

New leases entered into during the year

-

232

232

Existing leases derecognised-(5,520)(5,520)

Lease payments made in the year-

(5,640)(5,640)

Unwinding of discount

-

900

900

Impact of movement of foreign exchange rates(2,401)(449)(2,850)Loans repaid(79,410)-(79,410)Loans included in acquisitions

122

-

122

As at 31 December 2021

123

14,244

14,367As at 1 January 2020

Loans repaid
Other

32.

Total

Capital and other commitments

As at 31 December 2021, total committed but undrawn facilities in respect of consumer credit cards and loans were £7.7m(2020: £1.2m).
The Group and the Company does not have any other material commitments, capital commitments or contingencies as at 31 December
2021 and 31 December 2020.

33.

Transactions with related parties

Related parties of the Group and the Company include subsidiaries and key management personnel (“KMP”). Key management
personnel include all directors who together have authority and responsibility for planning, directing and controlling the activities of
the group.
Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note. Information for key management compensation and particulars of transactions with related parties
are tabulated below, in accordance with IAS 24 Related party disclosures requirements.

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126

Financial statements

Notes to the consolidated financial statement

2021
£000

2020
£000

652

210

3,084

366

Social security cost and other benefits-

1

Cost of defined contribution scheme

3

2

3,739

579

2021

2020

£000

£000

1 January
2020
£000

Loan receivable – N Storonsky

-

6

6

Loan receivable – V Yatsenko

-

9

9

-

15

15

Wages and salaries
Share based payments

Other related party transactions
The aggregate value of transactions and outstanding balances related to other related parties were:During the year a loan of £3.2m was made to the chief executive officer, Nikolay Storonsky, to fund the purchase of the Growth Shares.
The loan was repaid in full prior to 31 December 2021
During the financial years ended 31 December 2021 and 31 December 2020 there were no other material transactions with relatedparties of the Group.

34.

Events after the balance sheet date

Australian Licence
In February 2022, Revolut was granted an Australian Credit License by the Australian Securities and Investments Commission (ASIC) tooffer credit and personal lending products to the Australian Market.

Acquisition of Avrog Forex Private Limited
Subsequent to the year-end, on 11 February 2022, Revolut acquired 100% share capital of Avrog Forex Private Limited (“Avrog”),
a company registered in India. Avrog provides international money transfers and currency exchange services in India and serves
over 15,000 customers for a total consideration of £3.2 million. The acquisition will help Revolut expand in India as part of its global
expansion strategy.

War in Ukraine
On 24 February 2022, Russian troops started invading Ukraine. The ongoing military attack has led and continues to lead to significant
casualties, dislocation of population, damage to infrastructure and disruption to economic activity in Ukraine. Revolut has taken several
steps to support its employees and their families affected from the war in Ukraine and donated over £1.5 million to support those in
need. As a regulated business, Revolut also ensured continuity of its services and made arrangements to ensure uninterrupted provisionof goods and services sourced from Ukraine.
To safeguard Revolut staff and their families, the Group offered relocation support to all Ukraine-based employees and engaged a global
security solutions partner to provide them with guidance, emergency logistical support and the latest security updates in the country.
Furthermore, in March 2022 the Group made a decision and as at the date of these financial statements is in the process of winding
down its Russian entity operations. Total investment of Revolut UK Ltd in OOO Revolut Technologies as at 31 December 2021
is £5.5million.
Revolut’s management and the board of developing are closely monitoring the impact of this situation on the wider group and arecommitted to take further actions as necessary. Based on their assessment the board of directors believe that as of the date of signingthese financial statements there is no material impact on the group and its operations.

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Financial statements

Notes to the consolidated financial statement

Merger of PUAB and BUAB.
Considering the significant growth and expansion in recent years, the Group formalised a reorganisation plan inline with its futureplans. The Group started to implement its reorganisation plan in 2022 by creating new holding and intermediate holding companies.
On 28 April 2022, Revolut Group Holdings ltd, a UK incorporated private company limited by shares and registered in England andWales, acquired 100% share capital of Revolut Ltd in a share for share exchange transaction with the shareholders of the Company andbecame the new ultimate parent company of the Group. On 18 July 2022, Revolut Ltd undertook a reduction of issued share capital of£1,200m to facilitate further steps in the reorganisation plan.
In December 2021, the Bank of Lithuania (BOL) granted Revolut Bank UAB (the ‘Bank’) a full banking licence which enables the Bank
to process payments independently of Revolut Payments UAB. This eliminates the need to maintain a dual entity structure in Lithuania
and provides an opportunity to simplify operations by merging Revolut Payments UAB with the Bank.
The Bank and Revolut Payments UAB completed reorganisation by way of merger in Q3 2022. As a result, Revolut Payments UAB
migrated its customers to the Bank. Post-merger, Revolut Payments UAB ceased its payment services activities and will be dissolved
without liquidation proceedings. The Bank will continue to provide the payments services previously offered by Revolut Payments UAB
to customers post-merger.

35.

Controlling party

The company is owned by a number of private shareholders and companies, none of whom own more than 25% of the issued sharecapital of the company. Accordingly, there is no parent entity nor ultimate controlling party.

36.

Capital (unaudited)

As an authorised EMI, Revolut Ltd is required by the Electronic Money Regulations 2011 (EMRs) to hold a minimum amount of capitalat all times to enable absorption of losses as they might arise. The capital requirement is met through Revolut Ltd’s own holdings ofcapital resources, which is formed of Own Funds as defined by Article 4(1)(118) of the Capital Requirements Regulation.
As at 31 December 2021 Revolut Ltd had total capital resources, all of which is Common Equity Tier 1 (“CET1”), of £912.0m (2020:£398.2m), which represented a surplus of £603.2m (2020: £63.1m) over the total regulatory capital requirement.

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128Company
information
Company name
Directors

Revolut Ltd
Martin Gilbert (Chairman)
Nikolay Storonsky (CEO & Co-Founder)
Vlad Yatsenko (CTO & Co-Founder)
Michael Sherwood (Non-Executive Director and Chair,
Remuneration Committee)
Caroline Britton (Non-Executive Director and Chair,
Audit Committee)
Ian Wilson (Non-Executive Director)
John Sievwright (Appointed Non-Executive Director andChair, Risk & Compliance Committee on 01/08/2021)

Company Secretary

Thomas Bruce Hambrett

Registered number

08804411

Registered office

Independent auditors

7 Westferry Circus
Canary Wharf
LondonE14 4HDBDO LLP
55 Baker Street
LondonW1U 7EU

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7 Westferry Circus,
Canary Wharf,
London,England,E14 4HDrevolut.com