MBA Community Loans PLC
Directors' report and audited financial statements
For the financial year ended 7 January 2025
Registered Number 486917
MBA Community Loans PLC
Page(s)
Directors and other information 1
Directors' report 2 - 5
Directors' responsibilities statement 6
Independent auditor's report to the members of MBA Community Loans plc 7 - 13
Statement of comprehensive income 14
Statement of financial position 15
Statement of changes in equity 16
Statement of cash flows 17
Notes to the financial statements 18 - 39
Contents
MBA Community Loans PLC
Page 1
2nd Floor, Block 5
Irish Life Centre
Abbey Street Lower
Dublin 1
Ireland
2nd Floor, Block 5
Irish Life Centre
Abbey Street Lower
Dublin 1
Ireland
PricewaterhouseCoopers
1 Spencer Dock
North Wall Quay
IFSC
Dublin 1
Ireland
Bank
HSBC Bank Plc Barclays Bank Plc
City of London Commercial Centre PO Box 299
28 Borough High Street Birmingham B1 3PF
London SE1 1YB United Kingdom
United Kingdom
Trustee
Apex Corporate Trustees (UK) Limited
4th Floor, 140Aldersgate street
Registered Office
Secretary and Corporate
Service Provider
Apex IFS Limited
Directors and other information
Directors
Ciaran Connolly (Irish) (Independent)
Rhys Owens (Irish) (Independent)
Maria Dawson (Irish) (Alternate) (Appointed as Alternate Director 29 April 2024 and 12 August 2024)
Stephen McQuaid (Irish) (Alternate) (Appointed as Alternate Director on 12 August 2024, 20 August 2024 and 03 January
London, W1W 7LT
United Kingdom
Ireland
Legal Advisors and
Listing Agent
McCann Fitzgerald
Riverside One
Sir John Rogerson's Quay
Dublin 2
London EC1A AHY
United Kingdom
Loan Servicer, Manager,
Transfer Agent and
Calculation Agent
Prodigy Finance LTD
85 Great Portland Street,
Independent Auditor and
statutory audit firm
Page 2
Key performance indicators
During the financial year:
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•
•
As at 7 January 2025:
•
•
• the Notes that the Company has in issue in respect of each Series are included in note 13 to the financial statements; and
•
Future developments
Going concern
the ECL metrics as disclosed in note 15(a) have increased reflecting that as the student loan portfolio matures a higher number of student loans may be
in arrears and become non-performing loans which are specifically impaired (default).
No significant changes in the principal activities of the Company are anticipated.
The Company recognises loss allowances for expected credit loss on financial assets measured at amortised cost including Loans and Receivables.
The audited financial statements of the Company have been prepared in accordance with International Financial Reporting Standards as adopted by the
European Union ("IFRS") and have been prepared on a going concern basis. The Directors of the Company believe that it remains appropriate to prepare the
financial statements of the Company on a going concern basis and, therefore, to continue realising its assets and discharging its liabilities in the normal course
of business.
the impairment credit on Loans and Receivables was EUR 216,948 (financial period ended 7 January 2024: Impairment credit of: EUR 58,567);
the finance expense on the Company's Notes issued was EUR 6,820,278 (financial period ended 7 January 2024: EUR 5,098,124); and
the Company’s Notes in issue amounted to EUR 58,355,094 (7 January 2024: EUR 84,499,644);
the net asset carrying value of the Company was EUR 52,683 (7 January 2024: EUR 52,683);
MBA Community Loans PLC
The Company did not have any employees during the financial year ended 7 January 2025 (2024: none).
The principal risks for the Company are dealt with in this report and in note 15 to the financial statements. Each Series of Notes is segregated from each other.
The Company is a special purpose vehicle (the ''SPV'') and its principal activity is to issue Notes and make investments.
The Directors confirm that the key performance indicators as disclosed below in the financial statements are those that are used to assess the performance of
the Company.
Directors' report
The Board of Directors (or the "Directors") present their annual report and the audited financial statements of MBA Community Loans PLC (the "Company")
for the financial year ended 7 January 2025.
Principal activities and business review
The principal activity of the Company is to invest in student loan assets (the ''Loans and Receivables''), the acquisition of which is funded by the issue of notes
(the ''Notes'') to investors. These Notes are issued in separate series (the ''Series''). The Company does not undertake any business other than the acquisition,
holding, financing, selling and granting of security over its assets.
The net proceeds of the issue of the Notes will be used by the Company to acquire relevant student loans (the "Student Loans") from Prodigy Finance LTD,
the loan originator (the "Loan Originator") in accordance with the terms of the respective agreements and to pay for permitted expenses.
Each Note provides for one or more alternative payment schedules because the Company is obligated to make payments on a Note only to the extent that it
receives payments on the Student Loans, less the discharge of certain fees and expenses. Each Note is expected to provide a return at the target interest rate,
which is a fixed margin above a variable rate of return, to the noteholders (the ''Noteholders''). The terms of the Note will specify payment dates pursuant to
which an amount of principal and interest will be payable in respect of the Note on an available funds basis from funds received by the Company from the
Student Loans. Interest will be payable following the payment of certain fees and expenses and will be payable up to the accrued interest balance. The Notes
issued by the Company are limited recourse in nature.
the profit after taxation of the Company was EUR Nil (financial period ended 7 January 2024: EUR Nil);
the finance income earned by the Company was EUR 8,180,881 (financial period ended 7 January 2024: EUR 5,529,323);
The Directors expect that the present level of activity will be sustained for the foreseeable future. The Directors will continue to seek new opportunities for the
Company and will continue to ensure proper management of the current portfolio of Series of the Company.
Page 3
Early repayment and reinvestment risk
Operational risk exposure
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•
•
•
•
Shares and shareholders
MBA Community Loans PLC
On 20 August 2024, Stephen McQuaid was appointed as alternate director for Ciaran Connolly and resigned on 21 August 2024.
On 3 January 2025, Stephen McQuaid was appointed alternate director for Rhys Owens and resigned on the same date.
The Notes will be subject to early repayment risk. Due to the limited recourse nature of the notes, the timing of principal payments in respect of the Notes will
depend entirely on payments received by the Company from the relevant Student Loans. Investors in Notes bear the risk that, if and when they receive a
principal payment in respect of the Notes, they will not be able to reinvest the amount of the principal payment in alternative investments that bear a yield or
return equal to or greater than the interest rate on the Notes.
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company's processes, infrastructure, and from
external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of
corporate behaviour. Operational risk arises from all the Company's operations.
The results for the financial year/period are set out on page 14. The Directors do not recommend the payment of a dividend for the financial year (2024: EUR
nil).
The Electoral Act, 1997 (as amended by the Electoral Amendment Political Funding Act, 2012) requires companies to disclose all political donations over
EUR 200 in aggregate made during a financial year. The Directors, on enquiry, have satisfied themselves that no such donations in excess of this amount have
been made by the Company during the financial year ended 7 January 2025 (2024: EUR nil).
Directors' report (continued)
Business risks and principal uncertainties
The underlying business of the Company, being the purchase of student loan assets and the issuance of Notes to investors, is expected to continue in an
orderly, consistent manner over the coming financial period. The principal risk exposures for the Company relate to default by the borrowers, credit risk in
dealings with counterparties and interest rate movements. The loan platform has been designed and developed to minimise the risk of arrears and default rates
for loans to international students and a risk management framework is in place in order to manage and mitigate remaining risks. The principal risks and
uncertainties are discussed in more detail in note 15 to the financial statements.
The Directors have engaged competent service providers and put in place a Directors' Compliance Policy to review the structures and arrangements of the
Company annually, and to take any remedial steps if required.
Results and dividends for the financial year
Directors, secretary and their interests
The authorised share capital of the Company is EUR 40,000 which has been fully issued and paid. The issued shares are held in trust by Apex Trust
Nominees No. 1 Limited (the "Share Trustee") under the terms of a declaration of trust (the "Declaration of Trust“) under which the Share Trustee hold the
benefit of the shares on trust for charitable purposes. The Share Trustee has no beneficial interest in and derive no benefit from their holding of the shares.
There are no other rights that pertain to the shares and the shareholders.
None of the Directors and secretary who held office from 8 January 2024 to 7 January 2025 held any shares in the Company at that date or during the financial
year. Except for the Corporate Services agreement entered into by the Company with Apex IFS Limited, there were no contracts of any significance in relation
to the business of the Company in which the Directors had material interest, as defined in Section 309 of the Companies Act 2014, at any time during the
financial year. Directors remuneration is disclosed in note 3 to the financial statements. Further information are set out in note 17 to the financial statements.
Changes in Directors, secretary and registered office during the financial year
There were no other changes in Directors, secretary and registered office during the financial year.
On 29 April 2024, Maria Dawson was appointed as alternate director for Ciaran Connolly and resigned on 8 May 2024.
On 12 August 2024, Stephen McQuaid was appointed as alternate director for Ciaran Connolly and resigned on 16 August 2024.
On 12 August 2024, Maria Dawson was appointed as alternate director for Rhys Owens and resigned on 16 August 2024.
Accounting records
The Directors believe that they have complied with the requirements of Sections 281 to 285 of the Companies Act 2014 with regard to adequate accounting
records by engaging a service provider who employs accounting personnel with the appropriate expertise and by providing adequate resources to the finance
function. The accounting records of the Company are maintained at 2nd Floor, Block 5, Irish Life Centre, Abbey Street Lower, Dublin 1, Ireland.
Political donations
Page 4
The Board is responsible for managing the business affairs of the Company in accordance with the Constitution. The Directors may delegate certain functions
to the Administrator and other parties, subject to the supervision and direction by the Directors. The Directors have delegated the day to day administration of
the Company to the Administrator. The Constitution provides that the Directors may exercise all the powers of the Company to borrow money or to mortgage
or charge its undertaking, property and uncalled capital or any part thereof and, subject to Section 20 of the 1983 Act, to issue debentures, debenture stock or
other security whether outright or as security for any debt, liability or obligation of the Company or of any third party without limitation.
The Board has established processes regarding internal control and risk management systems to ensure its effective oversight of the financial reporting
process. These include appointing Apex IFS Limited (the ''Corporate Service provider''), to maintain the accounting records of the Company independently of
Prodigy Finance LTD (the ''Loan Servicer'') and Apex Corporate Trustees (UK) Limited (the ''Trustee''). The Administrator is contractually obliged to maintain
proper books and records as required by the Corporate Administration Agreement. To that end the Administrator performs reconciliations of its records to
those of the Loan Servicer and Trustee.
The Administrator is also obliged to prepare for review and approval by the Board the annual and semi-annual reports including financial statements intended
to give a true and fair view.
100% of the issued shares in the Company are held by Apex Trust Nominees No. 1 Limited, which is a company incorporated in England and Wales. The
Share Trustee holds the benefit of the shares on trust for charity. The Share Trustee has no beneficial interest in and derives no benefit other than its fees for
acting as Share Trustee, from its holding of the shares. With regard to the appointment and replacement of Directors, the Company is governed by its
Constitution, Irish Statute comprising the Companies Act 2014 and the Listing Rules of the Euronext Dublin. The Constitution themselves may be amended
by special resolution of the shareholders.
Capital Structure
The Board evaluates and discusses significant accounting and reporting issues as the need arises. The Board also reviews significant judgements and
assumptions used in assessing the impairment provision on an ongoing basis. On a semi annual basis, the Board also examines and evaluates the
Administrator’s financial accounting and reporting routines and monitors and evaluates the external auditors’ performance, qualifications and independence.
The Administrator has operating responsibility for internal control in relation to the financial reporting process and the Administrator’s report to the Board.
Risk Assessment and Risk Management
The Board is responsible for assessing the risk of irregularities whether caused by fraud or error in financial reporting and ensuring the processes are in place
for the timely identification of internal and external matters with a potential effect on financial reporting. The Board has also put in place procedures and
processes to identify changes in accounting rules and recommendations and to ensure that these changes are accurately reflected in the Company’s financial
statements. These procedures have been in place since incorporation and are regularly reviewed by the Board. More specifically, the Administrator has a
review procedure in place to ensure errors and omissions in the financial statements are identified and corrected and regular training on accounting rules and
recommendations is provided to the accountants employed by the Administrator.
Control Activities
The Administrator is contractually obliged to design and maintain control structures to manage the risks which the Board judges to be significant for internal
control over financial reporting. These control structures include appropriate division of responsibilities and specific control activities aimed at detecting or
preventing the risk of significant deficiencies in financial reporting for every significant account in the financial statements and the related notes in the
Company’s annual report.
Powers of Directors
Corporate Governance Statement
The Board is responsible for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial
reporting process. Such systems are designed to manage rather than eliminate the risk of failure to achieve the Company’s financial reporting objectives and
can only provide reasonable and not absolute assurance against material misstatement or loss.
MBA Community Loans PLC
Directors' report (continued)
Financial Reporting Process
The Company is subject to and complies with Irish Statute comprising the Companies Act 2014 and the listing rules of the Euronext Dublin which are
applicable to debt listed companies. The Company does not apply additional requirements in addition to those required by the above. Each of the service
providers engaged by the Company is subject to their own corporate governance requirements.
Introduction
Monitoring
The Board has an annual process to ensure that appropriate measures are taken to consider and address the shortcomings identified and measures
recommended by the independent auditors. Given the contractual obligations on the Administrator, the Board has concluded that there is currently no need for
the Company to have a separate internal audit function in order for the Board to perform effective monitoring and oversight of the internal control and risk
management systems of the Company in relation to the financial reporting process.
The Notes are admitted to trading on the regulated market of the Euronext Dublin pursuant to the base prospectus dated 14 August 2017 ("Base Prospectus").
The Central Bank of Ireland approved the Base Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive
2003/71/EC (as amended, including by Directive 2010/73/EU).
Page 5
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Research and development costs
The Company did not incur any research and development costs during the financial year (2024: EUR nil).
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Russia-Ukraine and Israel-Palestine conflicts
Responsibility statement in accordance with the Transparency Regulation
Each of the persons whose names and functions appear on page 1 confirm to the best of their knowledge:
Director
Statement on relevant audit information
Audit committee
Pursuant to the requirements set out in the Companies Act 2014, Section 167(1) & (3), as the sole business of the Company relates to the issuing of asset-
backed Notes, the Company has availed of an exemption from the requirements to establish an audit committee under Section 115(10) of SI 312/2016
(European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016).
The Board has concluded that there is currently no need for the Company to have an audit committee in order for the Board to perform effective monitoring
and oversight of the internal control and risk management systems of the Company in relation to the financial reporting process.
Independent auditor and statutory audit firm
they acknowledge that they are responsible for securing the Company's compliance with its relevant obligations and have, to the best of their knowledge,
complied with its relevant obligations as defined in Section 225 of the Companies Act 2014;
Subsequent events
Events after reporting date has been disclosed in note 19 to the financial statements.
So far as the Directors are aware, each Director at the date of approval of this report and financial statements confirms that:
the financial statements, prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Company; and
the management report, which is incorporated into the Directors’ report, includes a fair review of the development and performance of the business and
the position of the Company, together with a description of the principal risks and uncertainties that it faces.
Directors' report (continued)
Corporate Governance Statement (continued)
MBA Community Loans PLC
PricewaterhouseCoopers, Chartered Accountants and Statutory Audit Firm, have signified their willingness to continue in office. Annual audit fee amounts
are disclosed in note 7 to the financial statements.
relevant arrangements and structures have been put in place that provide a reasonable assurance of compliance in all material respects by the Company
with its relevant obligations, which arrangements and structures may, if the Directors so decide, include reliance on the advice of one or more than one
person employed by the Company or retained by it under a contract for services, being a person who appears to the Directors to have the requisite
knowledge and experience to advise the Company on compliance with its relevant obligations; and
there is no relevant audit information of which the Company’s auditor are unaware; and
the arrangements and structures in place are reviewed on an annual basis.
as per Section 330 of the Companies Act 2014, the Directors have taken all steps that they ought to have taken as a Director in order to make themselves
aware of any relevant audit information and to establish that the Company’s auditor are aware of this information.
As the war in Ukraine and Palestine continues, the Directors have assessed the impact this may have on borrowers ability to repay their loans. The total
exposure to Russian citizens based on outstanding balance is immaterial. The Company has reached out to affected borrowers (with a Russian, Ukrainian or
Belarussian nexus) to establish their circumstances, and has offered forbearance. Response has been limited with a small number requesting forbearance. The
conflicts in Palestine have no direct impact on the Company.
Approved by the Board and signed on its behalf by
Rhys OwensCiaran Connolly
Director
Directors' compliance policy statement
they have drawn up a compliance policy statement setting out the Company's policies (that, in the Directors' opinion, are appropriate to the Company)
respecting compliance by the Company with its relevant obligations;
The Directors confirm that:
Date: 6 May 2025
Page 6
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Rhys OwensCiaran Connolly
DirectorDirector
Date: 6 May 2025
Directors' responsibilities statement
On behalf of the Board
state whether applicable Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial
Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets,
liabilities and financial position of the Company and of its profit or loss for that financial year. In preparing these financial statements, the Directors are
required to:
select suitable accounting policies and then apply them consistently;
The Directors are responsible for preparing the Directors' report and financial statements, in accordance with applicable law and regulations.
assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to
do so.
make judgements and estimates that are reasonable and prudent;
Company law requires the Directors to prepare financial statements for each financial year. Under the law, the Directors have elected to prepare the financial
statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU").
The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial
position and profit or loss of the Company and enable them to ensure that the financial statements comply with the Companies Act 2014. They are responsible
for such internal controls as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities. The Directors are also responsible for preparing a Directors' report that complies with the requirements of the
Companies Act 2014.
MBA Community Loans PLC
Independent auditors’ report to the members of MBA
Community Loans PLC
Report on the audit of the financial statements
Opinion
In our opinion, MBA Community Loans PLC’s financial statements:
● give a true and fair view of the company’s assets, liabilities and financial position as at 7 January 2025
and of its result and cash flows for the year then ended;
●
have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”)
as adopted by the European Union; and
●
have been properly prepared in accordance with the requirements of the Companies Act 2014.
We have audited the financial statements, included within the Directors' report and audited financial statements,
which comprise:
● the Statement of financial position as at 7 January 2025;
●
the Statement of comprehensive income for the year then ended;
●
the Statement of cash flows for the year then ended;
●
the Statement of changes in equity for the year then ended; and
●
the notes to the financial statements, which include a description of the accounting policies.
Our opinion is consistent with our reporting to the Board of Directors.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (“ISAs (Ireland)”) and
applicable law.
Our responsibilities under ISAs (Ireland) are further described in the Auditors’ 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 opinion.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in Ireland, which includes IAASA’s Ethical Standard as applicable to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by IAASA’s Ethical Standard
were not provided to the company.
We have provided no non-audit services to the company in the period from 8 January 2024 to 7 January 2025.
Our audit approach
Overview
Overall materiality
● €0.6 million (2024: €0.9 million)
● Based on 1% of Total Assets.
Performance materiality
● €0.5 million (2024: €0.7 million)
Audit scope
● The Company is a private company incorporated in the Republic of Ireland and
engages Prodigy Finance Limited (the "Loan Servicer") as Manager of the
Company's loan portfolio.
●
The Company targets investments in student loan assets ("loans and receivables").
These are funded through the issue of loan notes that are listed on the main
market of Euronext Dublin.
● We tailored the scope of our audit to ensure that we performed enough work to be
able to give an opinion on the financial statements as a whole, taking into account
the structure of the company, the accounting processes and controls, and the
industry in which it operates.
Key audit matters
● Impairment of loans and receivables.
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgements, for example in
respect of significant accounting estimates that involved making assumptions and considering future events that are
inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that represented a risk of material
misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. This is not a complete list of all risks identified by our audit.
Key audit matter How our audit addressed the key audit matter
Impairment of loans and receivables
As detailed in Note 2 (n), Note 9 and Note 15 (a), loans and
receivables are measured at amortised cost.
IFRS 9 requires the recognition of a loss allowance for
expected credit losses (‘ECL’) using the Company’s forward-
looking expectation of credit risk.
As described in the notes to the financial statements,
significant management judgement is required in the
calculation of the ECL.
With the assistance of our expert, we understood and
evaluated processes and assumptions used in the ECL
model.
- We evaluated the methodology documentation for the
development of the ECL model for compliance with
IFRS 9 methodology;
- We evaluated the definition of default and the criteria
applied in the classification of loans as Stage 1, 2 or 3,
including the identification of significant increase in
Key audit matter How our audit addressed the key audit matter
We focused on what we considered to be the key areas of
management judgement in estimating the provision for
ECL:
- The determination by management of the assumptions
used in estimating ECL particularly determination of
significant increase in the credit risk (“SICR”) of a
borrower as well as collection profiles;
- The consideration, selection, and application of
forward-looking macro-economic information.
credit risk (‘SICR’). We assessed the reasonability of
the criteria as well as assessed the level of the
thresholds compared to benchmark metrics, and
considered the effect of forward-looking information;
- We tested the completeness and accuracy over data
input to the model;
- We evaluated the methodology for estimating the
expected loss parameters (probability of default,
exposure at default and loss given default) and tested
the calculation of these parameters by reference to
historical data on the portfolio;
- We considered the appropriateness of forward looking
prospective information by reference to external data
where applicable;
- We reperformed the ECL calculation and compared
our output to management's estimate;
- We agreed the year end provision calculation output
from the ECL model to the financial statements.
We concluded that the provision for ECL was within an
acceptable range of reasonable estimates.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the company, the accounting processes and
controls, and the industry in which it operates.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgements, for example in
respect of significant accounting estimates that involved making assumptions and considering future events that are
inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality €0.6 million (2024: €0.9 million).
How we determined it 1% of Total Assets.
Rationale for benchmark
applied
We believe total assets to be the appropriate basis for determining benchmark
materiality since the primary consideration for members of the Company is asset
value.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions
and disclosures, for example in determining sample sizes. Our performance materiality was 75% of overall materiality,
amounting to €0.5 million.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with the Board of Directors that we would report to them misstatements identified during our audit above
€0.06 million (2024: €0.09 million) as well as misstatements below that amount that, in our view, warranted reporting
for qualitative reasons.
Conclusions relating to going concern
The Company is a public limited company special purpose vehicle whose principal activity is to issue Notes and make
investments. The Notes issued by the Company are listed on the main market of Euronext Dublin. As noted in Note 2
(c) to the financial statements, the financial statements have been prepared on a going concern basis as the directors
are of the view that the company can continue in operational existence for the foreseeable future.
Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of
accounting included:
- Obtaining an understanding of the key indicators that are monitored with respect to the going concern
assumption and future plans for the Company over the going concern period (being 12 months from the date of
approval of the financial statements). This assessment of going concern considered: 1) intent with regard to the
structure, 2) the obligations and the purpose of the structure, 3) the liquidity of the underlying investment
portfolio; and 4) the nature of the notes;
- Reviewing available board minutes during the period under audit and those available up to the date of this report;
- Considering post period end activity as recorded in the underlying records.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going
concern for a period of at least twelve months from the date on which the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Directors' report and audited financial statements other
than the financial statements and our auditors’ report thereon. The directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an
audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material
misstatement of the financial statements or a material misstatement of the other information. 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. We have nothing to report based on these responsibilities.
With respect to the Directors’ report, we also considered whether the disclosures required by the Companies Act 2014
have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (Ireland) and
the Companies Act 2014 require us to also report certain opinions and matters as described below.
● In our opinion, based on the work undertaken in the course of the audit, the information given in the
Directors’ report for the year ended 7 January 2025 is consistent with the financial statements and has
been prepared in accordance with applicable legal requirements.
●
Based on our knowledge and understanding of the company and its environment obtained in the course
of the audit, we have not identified any material misstatements in the Directors’ report.
● In our opinion, based on the work undertaken in the course of the audit of the financial statements, the
description of the main features of the internal control and risk management systems in relation to the
financial reporting process included in the Corporate Governance Statement, is consistent with the
financial statements and have been prepared in accordance with section 1373(2)(c).
●
Based on our knowledge and understanding of the company and its environment obtained in the course
of the audit of the financial statements, we have not identified material misstatements in the description
of the main features of the internal control and risk management systems in relation to the financial
reporting process included in the Corporate Governance Statement.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ responsibilities statement set out on page 6, the directors are responsible for
the preparation of the financial statements in accordance with the applicable framework and for being satisfied that
they give a true and fair view.
The directors are also responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a
going concern, disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the company or to cease operations or have no realistic
alternative but to do so.
Auditors’ 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 auditors’ 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 (Ireland) 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.
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 our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of the Companies Act 2014, and we considered the extent to which non-
compliance might have a material effect on the financial statements. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and
determined that the principal risks were related to the risk of management override of controls.
Audit procedures performed by the engagement team included:
- Enquiry of management to identify any instances of non-compliance with laws and regulations;
-
Identifying and testing journal entries, where any such journal entries, that met our specific risk based criteria,
were identified;
-
Testing material accounting estimates and judgements and considered potential for management bias;
-
Designing audit procedures to incorporate unpredictability; and
-
Reviewing minutes of the meetings of the board of directors.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of 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 or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the IAASA website at:
https://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-
a98202dc9c3a/Description_of_auditors_responsibilities_for_audit.pdf
This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in
accordance with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2014 opinions on other matters
● We have obtained all the information and explanations which we consider necessary for the purposes of
our audit.
●
In our opinion the accounting records of the company were sufficient to permit the financial statements
to be readily and properly audited.
●
The financial statements are in agreement with the accounting records.
Other exception reporting
Directors’ remuneration and transactions
Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors’
remuneration and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions
to report arising from this responsibility.
Appointment
We were appointed by the directors on 7 July 2020 to audit the financial statements for the year ended 7 July 2020 and
subsequent financial periods. The period of total uninterrupted engagement is 5 and a half years, covering the years
ended 7 July 2020 to 7 January 2025.
Declan Murphy
for and on behalf of PricewaterhouseCoopers
Chartered Accountants and Statutory Audit Firm
Dublin
6 May 2025
Page 14
07-Jan-25 07-Jan-24
Note EUR EUR
Interest income on EIR basis 5 8,180,881 5,529,323
Other income 4 124,369
149,000
Operating income
8,305,250
5,678,323
Operating expenses 7 (1,697,284) (636,257)
Finance expense 6 (6,820,278) (5,098,124)
Interest expense on loan from Prodigy Finance Ltd (4,636) (2,509)
Impairment reversal of Loans and Receivables 9 216,948 58,567
Profit before taxation
-
-
Tax expense 8 -
-
Profit after taxation
-
-
Other comprehensive income
-
-
Total comprehensive profit for the financial year/period
-
-
The income and expense activity of the company arose solely from continuing activities. There were no income or expense activities other than those dealt
with in the statement of comprehensive income
Financial year
ended
Financial
period ended
The notes to the financial statements on pages 18 to 39 form an integral part of these financial statements.
MBA Community Loans PLC
Statement of comprehensive income
For the financial year ended 7 January 2025
Page 15
07-Jan-2407-Jan-25
EURNote EUR
53,089,8669
75,973,949
5,170,26910
5,308,693
3,474,55911
6,143,713
61,734,694
87,426,355
58,355,09413
84,499,644
3,326,91712
2,874,028
61,682,011
87,373,672
40,00014
40,000
12,683
12,683
52,683
52,683
61,734,694
87,426,355
Director
Equity
Rhys OwensCiaran Connolly
Called up share capital presented as equity
Retained earnings
Total equity
Total liabilities and equity
Date: 6 May 2025
Other payables
Total assets
Liabilities and equity
As at 7 January 2025
Assets
Loans and Receivables
Other receivables
MBA Community Loans PLC
Notes issued
Cash and cash equivalents
Statement of financial position
Total liabilities
Liabilities
Director
On behalf of the Board
The notes to the financial statements on pages 18 to 39 form an integral part of these financial statements.
Page 16
EUR EUR EUR
40,000 12,683
52,683
Total comprehensive expense for the financial period
Profit for the financial period
-
-
-
Total comprehensive income for the financial period - -
-
40,000 12,683
52,683
Balance at 8 January 2024
40,000 12,683
52,683
Total comprehensive income for the financial year
Profit for the financial year
-
-
-
Total comprehensive income for the financial year - -
-
40,000 12,683
52,683
As at 7 January 2025
MBA Community Loans PLC
Balance at 8 July 2023
Statement of changes in equity
Balance at 7 January 2025
Balance at 7 January 2024
Retained
earnings
Total
The notes to the financial statements on pages 18 to 39 form an integral part of these financial statements.
Share capital
Page 17
07-Jan-25 07-Jan-24
Note EUR EUR
Cash flows from operating activities
Profit before taxation -
-
Adjustments for:
Net impairment gain on Loans and Receivables (216,948) (58,567)
Foreign exchange movements 7 (44,585) (198,720)
Interest income 5 (8,180,881) (5,529,323)
Finance expense 6 6,820,278
5,098,124
Movements in working capital
Increase in other receivables (1,432)
-
Decrease/(increase) in other payables 508,403 (96,789)
Net cash used in operating activities
(1,115,165) (785,275)
Cash flows from investing activities
Principal payments received from Loans and Receivables 9 25,252,773
18,030,146
Interest received 8,320,737
5,904,138
Net cash generated from investing activities
33,573,510
23,934,284
Cash flows from financing activities
Principal repayments on Notes issued 13 (26,635,746) (19,709,534)
Interest payments (8,591,514) (5,218,218)
Net cash used in financing activities
(35,227,260) (24,927,752)
Net decrease in cash and cash equivalents during the financial year (2,768,915) (1,778,743)
Cash and cash equivalents at the start of the financial year 6,143,713
7,941,864
Unrealised foreign exchange movements on cash balance 99,761 (19,408)
Cash and cash equivalents at the end of the financial year
3,474,559
6,143,713
Statement of cash flows
For the financial year ended 7 January 2025
Financial year
ended
Financial
period ended
MBA Community Loans PLC
The notes to the financial statements on pages 18 to 39 form an integral part of these financial statements.
Page 18
1
2
(a) Basis of preparation
(b) Basis of measurement
(c) Going concern
(d) Significant judgements and estimates
(e) New standards, amendments or interpretations
(i) New and amended standards and interpretations during the year
•
Amendment to IFRS 16 – Leases on sale and leaseback;
•
Amendment to IAS 1 – Classification of Liabilities as Current or Non-Current and Non-current liabilities with covenants; and
•
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures – Supplier Finance Arrangements.
There have been no other adoption of interpretations and standards except as per the above.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the financial year
in which the estimate is revised if the revision affects only the financial year or in the financial year of the reviews and future financial years if the
revision affects both current and future financial years.
Corporate information
The Company's financial assets, Loans and Receivables, financial liabilities and Notes issued are measured at amortised cost.
The Company is a public limited company incorporated under the laws of Ireland with the registered office address 2nd Floor, Block 5, Irish Life Centre,
Abbey Street Lower, Dublin 1, Ireland and company number 486917. The Company was incorporated on 22 July 2010 and is domiciled in the Republic
of Ireland. The Notes issued by the Company are listed on the main market of the Euronext Dublin.
The sole shareholder is Apex Trust Nominees No. 1 Limited (the Share Trustee), which is a company incorporated in England and Wales who owns
100% of the issued shares (7 January 2024: 100%).
Material accounting policies
The financial statements are prepared on the historical cost basis.
MBA Community Loans PLC
The Company has adopted the new interpretations and revised standards effective for the year ended 7 January 2025. New standards that
have been adopted in the annual financial statements for the year ended 7 January 2025 but have not had a significant effect on the
Company are:
The Company's financial statements have been prepared in accordance with IFRS and its interpretations as adopted by the EU and as applied in
accordance with the Companies Act 2014. The accounting policies set out below have, unless otherwise stated, been applied consistently to all
periods presented in these financial statements. The comparative information relates to the financial period ended 7 January 2024. The comparative
financial information relates to a six-month period from 8 July 2023 to 7 January 2024. The reason for the change in the Financial Reporting date is
to allign with the Servicer and Irish SPVs so that the work on the Loans could be completed all together. Due to the difference in the duration and
scope of the comparative period, the financial information presented is not fully comparable to the current period. Users are advised to consider this
when analysing the financial statements.
The financial statements have been prepared on a going concern basis because the Directors consider that this is a fair basis for presenting the
results of the accounting period and the state of the affairs at the end of the financial year. Having considered the Company's future cash flows and
its business plans, the Directors confirm they have a reasonable expectation that the Company has adequate resources to continue in operational
existence for the next 12 months, and that the financial statements have been properly prepared on a going concern basis. Also, the Notes issued by
the Company are limited recourse in nature and the ultimate risk is borne by the Noteholders and not the Company. The Directors have not
identified any material uncertainties in relation to going concern.
The preparation of the financial statements in conformity with IFRS and its interpretations as adopted by the EU requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates. The main area where judgement and estimates are utilised is in relation
to the expected credit losses on the Loans and Receivables.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the entity's financial
statements relate to the IFRS 9 expected credit loss (“ECL”) calculation and are disclosed in note 2 n (vi) and note 15 (a) to the financial
statements.
Notes to the financial statements
For the financial year ended 7 January 2025
Page 19
2
(e) New standards, amendments or interpretations (continued)
(ii) Accounting standards issued but not yet effective
The following amendments are effective for the period beginning 1 January 2025:
•
Amendments to IAS 21- The Effects of changes in Foreign Exchange Rates: Lack of Exchangeability.
The following amendments are effective for the period beginning 1 January 2026:
•
The following amendments are effective for the period beginning 1 January 2026:
•
IFRS 18 Presentation and Disclosure in Financial Statements to replace IAS 1.
(f) Finance income and finance expense
(g) Operating expenses
(h) Other receivables
(i) Functional and presentation currency
(j) Foreign currencies
(k) Other payables
The operating expenses of the Company are recognised in the financial statements on an accruals basis. The expenses include administration fees
(calculated on Note originations at 0.75%) and annual management fees (calculated on a monthly basis as 2% per annum of the total performing
loan outstanding) charged by the Loan Servicer. The remaining expenses are listed in note 7 to the financial statements.
Finance expense includes interest expense and any impact of revision of cash flows on the Notes issued. Interest expense is calculated using the
effective interest rate on gross carrying amount. Interest expense is payable following the payment of certain fees and expenses out of income
received on the loans and is payable up to the accrued interest balance.
Foreign currency differences arising on retranslation are recognised through profit or loss in the statement of comprehensive income and are
included under net foreign exchange gain/loss, as appropriate.
Other payables are classified as financial liabilities and are subsequently measured at amortised cost.
Other receivables include interest receivable and are measured at amortised cost.
These financial statements are presented in Euro (EUR) which is the Company’s functional currency. Functional currency is the currency of the
primary economic environment in which the entity operates. The issued share capital of the Company is denominated in EUR and the Directors of
the Company believe that EUR most faithfully represents the economic effects of the underlying transactions, events and conditions.
The amounts in these financial statements are rounded to the nearest EUR.
Impact of revision of cash flows on Notes issued relates to changes in estimated future cashflow arising on the liabilities. The loan asset impairment
is now based on an expected credit loss model in line with the requirements of IFRS 9 and therefore the Company has used the ECL estimates as
part of the calculation of the amortised cost carrying amount of the loan liabilities.
For Stage 1 and Stage 2 loans, the finance income is calculated using the effective interest rate on gross carrying amount while for Stage 3 loans,
the finance income is based on the effective interest rate on gross carrying amount less loss allowance.
For the financial year ended 7 January 2025
Accounting policies (continued)
Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange
rate at that date.
MBA Community Loans PLC
Notes to the financial statements (continued)
A number of new standards and amendments to existing standards, listed below, have been published which are mandatory, but are not effective
for the year ended 7 January 2025. The Directors do not anticipate that the adoption of these revised standards and interpretations will have a
significant impact on the figures included in the financial statements in the period of initial application.
Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - classification and measurement of financial
instruments.
Page 20
2
(l) Taxation
(m) Cash and cash equivalents
(n) Financial instruments
(i) Initial recognition of financial instruments
(ii) Classification and subsequent measurement of financial assets
Classification of financial assets
●
●
●
●
At initial recognition, financial assets are classified into three categories: financial assets measured at amortised cost, financial assets
measured at fair value through other comprehensive income (“FVOCI”) and financial assets measured at fair value through profit or loss
(“FVTPL”).
The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash
flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at FVOCI or at FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing
financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in
the business model.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial
assets; and
Income tax expense comprises current and deferred tax. Income tax expense, when arising, is recognised through profit or loss, in other
comprehensive income or directly in equity consistent with the accounting for the item to which it is related. Current tax is the expected tax
payable on the taxable income for the financial year, using tax rates applicable to the Company’s activities enacted or substantively enacted at the
reporting date, and adjustment to tax payable in respect of previous financial years.
Deferred tax is provided for temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences arising on the initial recognition of assets or
liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit. Deferred tax is measured at the
tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
At initial recognition, financial liabilities are classified into two categories: financial liabilities measured at FVTPL and other financial
liabilities.
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
Cash and cash equivalents include deposits held on call with banks, other short term highly liquid investments with original maturities of less than
three months which are subject to insignificant risk of changes in their fair value, and are used by the Company for the management of its short
term commitments. Cash and cash equivalents are carried at amortised cost in the statement of financial position.
Notes to the financial statements (continued)
For the financial year ended 7 January 2025
Accounting policies (continued)
MBA Community Loans PLC
For financial assets and financial liabilities measured at FVTPL, any related directly attributable transaction costs are charged to profit or
loss; for other categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their
initial costs.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
Page 21
2
Accounting policies (continued)
(n) Financial instruments (continued)
(ii) Classification and subsequent measurement of financial assets (continued)
Classification of financial assets (continued)
Subsequent measurement of financial assets
Financial assets measured at amortised cost
(iii) Classification and subsequent measurement of financial liabilities
Financial liabilities at amortised cost
(iv) Presentation of financial instruments
●
● the Company intends either to settle on a net basis, or to realise the financial asset and settle the financial liability simultaneously.
Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not offset. However,
a financial asset and a financial liability are offset and the net amount is presented in the statement of financial position when both the
following conditions are satisfied:
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial
recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised
cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Classification and measurement of financial assets depends on the results of the SPPI (Solely Payments of Principal and Interest) and the
business model test. The Company determines the business model at a level that reflects how groups of financial assets are managed
together to achieve a particular business objective. This assessment includes judgement reflecting all relevant evidence including how the
performance of the assets is evaluated and their performance measured, the risks that affect the performance of the assets and how these are
managed.
Monitoring is part of the Company's continuous assessment of whether the business model for which the remaining financial assets are held
continues to be appropriate and if it is not appropriate whether there has been a change in business model and so a prospective change to the
classification of those assets. No such changes were required during the periods presented.
These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial asset that is
measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when the financial asset is
derecognised, through the amortisation process or in order to recognise impairment gains or losses.
Financial liabilities are classified as measured at FVTPL or amortised cost. Based on IFRS 9 assessment, the Company has classified its
liabilities at amortised cost.
Financial liabilities at amortised cost are subsequently measured at amortised cost adjusted for the impact of revision of cash flows on Notes
issued.
Notes to the financial statements (continued)
The business model refers to how the Company manages its financial assets in order to generate cash flows. That is, the Company’s
business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. The
Company determines the business model for managing the financial assets according to the facts and based on the specific business
objective for managing the financial assets determined by the Company’s key management personnel.
MBA Community Loans PLC
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms
of the instrument. For the purposes of this assessment, ‘principal’ is defined as the fair value of the student loans on initial recognition.
‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding
during a particular period of time and for other basic lending risks and costs, as well as a profit margin. The Company also assesses whether
the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet
this condition.
the Company currently has a legally enforceable right to set off the recognised amounts; and
For the financial year ended 7 January 2025
Page 22
2
Accounting policies (continued)
(n) Financial instruments (continued)
(v) Derecognition of financial assets and liabilities
Financial assets
●
●
●
Financial liabilities
(vi) Impairment of assets
● Impairment of financial assets
Significant Increase in Credit Risk ("SICR")
Under IFRS 9, student loans which fall into arrears of 90+ days are considered, non-performing loans, and are specifically
impaired (default). The arrears analysis of non-performing loans include interest charges. Expected credit losses provisions are
calculated using a forward-looking expectation of deterioration of credit risk. Management along with its Loan Servicer will
continue to monitor historical trends, current economic factors and layer in future economic data to update its impairment
provision model accordingly.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company
expects to receive).
Impairment of financial assets is accounted for using the following principles:
The Company recognises loss allowances for ECL on financial assets measured at amortised cost including Loans and
Receivables.
Under IFRS 9, impairments on Loans and Receivables classified as stages 2 and 3 are based on lifetime expected credit losses,
using a forward-looking expectation of deterioration of credit risk. At each reporting date, an impairment loss equal to 12-month
expected credit losses (allocated to stage 1) is recognised for all financial assets for which there is no significant increase in credit
risk since initial recognition. For financial assets for which there is a significant increase in credit risk since their initial
recognition (allocated to stage 2), and that are credit impaired (allocated to stage 3) an impairment loss equal to lifetime expected
credit losses will be recognised. The Loan Servicer impairs its loan book according to the status of each loan’s credit risk.
MBA Community Loans PLC
Notes to the financial statements (continued)
For the financial year ended 7 January 2025
Financial asset is derecognised when one of the following conditions is met:
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount
of the asset and the maximum amount of consideration that the Company could be required to repay.
The Company derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
the Company’s contractual rights to the cash flows from the financial asset expire;
the financial asset has been transferred and the Company transfers substantially all of the risks and rewards of ownership of the
financial asset; or
the financial asset has been transferred, although the Company neither transfers nor retains substantially all of the risks and
rewards of ownership of the financial asset, it does not retain control over the transferred asset.
Where the Company has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash flows from the
asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the conditions of the transfer of
financial assets, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the
asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset.
When the terms and conditions of a loan have been significantly modified due to arrangements with the borrowers, the Company
derecognises the initial and records a new asset in accordance with the new terms of the loan.
The Loan Servicer holds lifetime impairments for loans where we can identify that a significant increase in credit risk has
occurred. This will include loans that are delinquent, loans that have been granted payment arrangements and loans that have
defaulted. If an up-to-date loan is expected to become delinquent within 12 months (if they are in repayment) or delinquent in the
first 12 months of repayment (if they are in grace), the Loan Servicer will hold lifetime impairments now instead of only after the
delinquency occurs. This ensures a forward-looking approach. It will make use of the 12-month delinquency rate to set thresholds
to identify if an increase in credit risk is significant. Loans are grouped into risk bands based on their 12-month PDs. Separate
thresholds are calculated for each risk group. To calculate the thresholds, first it looks at the through-the-cycle average proportion
of loans that become delinquent (bucket 2 or worse) within the next 12-months (loans in repayment) or first 12 months (loans in
grace). It then groups loans according to their percentage increase in lifetime PD. This is done by comparing the current lifetime
PD to the lifetime PD at origination. Then it uses the above delinquency rates to find a threshold above which it expects accounts
to become delinquent.
Page 23
2
Accounting policies (continued)
(n) Financial instruments (continued)
(vi) Impairment of assets (continued)
Macro-Economic Forecast
●
●
● Upside – 10%
● Base – 60%
● Downside – 30%
The macro scenarios are as follows:
Upside Base Downside Weighted No FLI
Weighting 10% 60% 30% N/A N/A
GDP 10,476 - 73,028 8,012 - 66,065 4,194 - 55,966 7,113 - 63,732 N/A
Inflation 0.12% - 2.992% 2.73% - 4.39% 8.42% - 11.80% 4.18% - 6.47% N/A
Unemployment 3.02% - 3.54% 4.46% - 8.14% 8.99% - 11.44% 5.68% - 8.67% N/A
Grace/Ahead/On-Schedule SICR % 5.41% 5.41% 5.41% 5.41% 5.41%
Total Loans 4,042 4,042 4,042 4,042 4,042
Total Balance 86,022,051 86,022,051 86,022,051 86,022,051 86,022,051
12-Month PD % 34.66% 34.76% 35.07% 34.83% 34.32%
Lifetime PD % 45.52% 46.40% 49.15% 46.98% 42.52%
EAD % 80.69% 80.84% 80.96% 81.03% 80.91%
LGD % 54.44% 54.44% 54.44% 54.44% 54.44%
IFRS 9 Impairment 22,073,258 22,124,872 22,245,302 22,150,678 21,944,225
Coverage ratio 25.66% 25.72% 25.86% 25.75% 25.51%
Notes to the financial statements (continued)
For the financial year ended 7 January 2025
Upside – consider the best 10th percentile point (GDP/Inflation/Unemployment). The difference between this and
the 50th percentile is applied to the base case forecast to design the upside scenario.
Downside – consider the worst 10th percentile point (GDP/Inflation/Unemployment). The difference between
this and the 50th percentile is applied to the base case forecast to design the downside scenario. It will use this
weighting when calculating impairments:
The base case for forward-looking macroeconomic information is sourced from the International Monetary Fund (IMF) World
Economic Outlook. The IMF update their World Economic Outlook twice per year – once in April, and once in October. This
ensures that the Loan Servicer has forward-looking macroeconomic data for most of the countries in the portfolio. It will use this
information to adjust the previously calculated lifetime default curves, to introduce a forward-looking macroeconomic effect to
the IFRS 9 expected credit losses. Since the nature of the client base is to move around internationally, it can happen that they do
not always update their residence country. They estimate their residence based on additional information, such as the country
where they are making payments from and the location of the IP address where they log in to the Prodigy Finance app.
The Loan Servicer will group residence by continent so that it has sufficient data points in each group. Macroeconomic variables
from the largest geographies within each continent will be used, so that the Loan Servicer is using metrics that are representative
within each continent. The 12- and 24-month PD models will be adjusted with macroeconomic data separately. Logistic
regression models are used, based on the 12- or 24-month PD’s together with the macroeconomic variables described above.
These models are deemed reasonable if the macroeconomic variables result in intuitive changes in the PD values (for example, an
improved GDP leading to improved credit risk) as well as not resulting in a worse r-squared (we prefer an improved r-squared,
but where this is not the case, the Loan Servicer will ensure that the r-square does not deteriorate significantly when incorporating
macroeconomic variables). The IMF World Economic Outlook is used as the Base forecast. The Loan Servicer has created 2
additional scenarios using data from the year 2020 onwards:
MBA Community Loans PLC
Impairment of financial assets is accounted for using the following principles (continued):
The Loan Servicer needs to use macroeconomic variables that are readily available and expected to be available in the future. The
Loan Servicer has therefore chosen GDP, Inflation and Unemployment Rate. Variables such as Debt to Income might make more
sense in the case of unsecured debt, but this variable (and others who might also be intuitive) is not populated/forecast for each
country in the IMF World Economic Outlook.
Page 24
2
Accounting policies (continued)
(n) Financial instruments (continued)
(vi) Impairment of assets (continued)
Impairment of financial assets is accounted for using the following principles (continued)
● Measurement of ECLs
The status of the loans are defined below:
Grace and Ahead
Delinquency and Default
Forbearance
Impairments are calculated differently for each stage of credit risk:
● Measurement of ECLs (continued)
Stage Allocation Impairment
Stage 1 Grace
Ahead
On-Schedule
Stage 2 More than 30 days past due (delinquent)
Significant Increase in Credit Risk
Stage 3 More than 90 days past due (default)
Settled with Outstanding Balance
Arrangements
Post-Term Loans
Stage 1
Stage 2
Stage 3
● Presentation of allowance for ECL
For the financial year ended 7 January 2025
MBA Community Loans PLC
Cash and cash equivalents and other receivables (excluding finance income receivable) are low risk assets. The Company has
determined that the application of IFRS 9's impairment requirements at 8 July 2023 and 7 January 2024 did not result in any
material impairment allowance.
Loans that are in grace, ahead or on-schedule that have not triggered SICR are classified as stage 1.
Loans that are more than 30 days past due are defined to be delinquent. Delinquency buckets are based on the amount of days
past due. The non-performing loan book consists of all loans where objective evidence of credit impairment (default) is observed.
Loans are defined to be in default once they are more than 90 days past due.
Borrowers can request temporary payment arrangements if they are experiencing temporary financial difficulty, which means
their loan status will be ‘Arrangement’. These requests are either approved/declined based on the Credit Risk Operational
Committee decision. Arrangements as well as loans that are post-term are considered to be in forbearance. All forbearance loans
are defined to be in stage 3.
Loan Status
12-Month Expected Credit Losses
ECLs are remeasured at the end of each reporting period to reflect changes in the financial instrument’s credit risk since initial
recognition. Any change in the ECL amount is recognised as an impairment in profit or loss. The Company recognises an
impairment gain or loss for financial instruments measured at amortised cost with a corresponding adjustment to their carrying
amount through a loss allowance account. The Company recognises loss allowances for Loans and Receivables.
Loans in stage 3 are impaired based on expected credit losses over specific impairment.
Loans that are delinquent or that have triggered SICR are classified as stage 2.
Loans in stage 2 are impaired based on expected credit losses over the entire lifetime of the loan.
Loans that are in default, in arrangement, post term or settled but still have an outstanding balance are classified
as stage 3.
During the grace period, or when borrowers are ahead of schedule with repayments, no repayments are required. Borrowers are
said to be in grace while they are studying, and this period can be either 1 or 2 years depending on the length of the course.
Notes to the financial statements (continued)
Loans in stage 1 are impaired based on expected credit losses over the next 12 months.
Lifetime Expected Credit Losses
Specific Impairment on expected
credit loss basis
Page 25
2
Accounting policies (continued)
(n) Financial instruments (continued)
(vi) Impairment of assets (continued)
● Write-off
(vii) Offsetting of financial instruments
(o) Segmental reporting
EUR EUR
EUR EUR
1,971,881 18,147,963 (5,160,170) 1,075,978
USA 215,628 2,640,274 (739,658) 142,049
United Kingdom 427,233 4,798,709 (1,400,407) 172,976
Brazil 980,638 9,673,011 (2,765,928) 607,637
Russia 95,887 1,372,592 (737,044) 97,055
Ukraine 41,957 568,776 (357,286) 70,532
Others 4,447,657 43,651,889 (16,602,855) 3,002,610
8,180,881 80,853,214 (27,763,348) 5,168,837
EUR EUR
EUR EUR
India 1,364,867 23,595,802 (4,871,771) 1,151,703
USA 148,152 3,347,460 (701,694) 109,303
United Kingdom 306,894 5,967,891 (1,458,261) 186,636
Brazil 648,555 9,691,235 (3,017,687) 599,416
Russia 73,719 1,711,756 (634,993) 100,074
Ukraine 27,206 684,155 (368,043) 72,547
Others 2,959,930 58,955,946 (16,839,162) 3,089,014
5,529,323 103,954,245 (27,891,611) 5,308,693
Notes to the financial statements (continued)
For the financial year ended 7 January 2025
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the
liabilities simultaneously. This policy is applicable for both financial year ended 7 January 2025 and for the financial period ended 7
January 2024.
MBA Community Loans PLC
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss in the
period in which the recovery occurs.
07-Jan-24
Finance income
Loan principal
Interest
receivable
The book value of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of
recovery. A write-off constitutes a derecognition event. This is generally the case when the Company determines that the debtor
does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
However, financial assets that are written off could still be subject to enforcement activities in order to comply with the
Company’s procedures for recovery of amounts due. No such event occurred during the financial year ended 7 January 2025 and
financial period ended 7 January 2024.
Loan principal
The Company has applied IFRS 8 Operating Segments which puts emphasis on the "management approach" to reporting on operating segments. An
operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses. The
Company is engaged in one segment, which involves the packaging of student loans for international students, purchased from Prodigy Finance
LTD, on behalf of investors.
Financial results of operating in this segment encompass total assets of EUR 59,460,560 and total liabilities of EUR 59,407,877 (financial period
ended 7 January 2024: EUR 87,373,672 and EUR 87,462,355). The segment also generated a profit after taxation for the financial year ended 7
January 2025 of EUR Nil (financial period ended 7 January 2024: profit of EUR Nil). The Directors are considered to be the chief operating
decision makers.
Impairment
provision
Interest
receivable
India
Impairment
provision
The following is a geographical analysis of the income from Loans and Receivables by the students' current country of residence:
07-Jan-25
Finance income
Page 26
3
Directors and employees
4
Other income
07-Jan-25 07-Jan-24
EUR EUR
124,369
149,000
124,369
149,000
5
Interest income on EIR basis
07-Jan-25 07-Jan-24
EUR EUR
- 6,953,609
4,449,205
- income on non-performing Loans and Receivables 1,227,272
1,080,118
8,180,881
5,529,323
6
Finance expense
07-Jan-25 07-Jan-24
EUR EUR
8,484,682
5,213,655
(1,664,404) (115,531)
6,820,278
5,098,124
7
Operating expenses
07-Jan-25 07-Jan-24
EUR EUR
992,756
679,581
492,662
155,396
96,698
-
93,333
-
61,808
-
4,612
-
(44,585) (198,720)
1,697,284
636,257
07-Jan-25 07-Jan-24
EUR EUR
96,698
87,350
-
-
96,698
87,350
Impact of revision of cash flows on Notes issued
Coupon expense on Notes issued
Financial year
ended
Financial
period ended
Other expenses
Financial year
ended
Financial
period ended
Enforcement costs
Audit fees
Tax fees
Administration fees
Foreign exchange gain
No remuneration was paid to the Directors of the Company in respect of the financial year ended 7 January 2025 (financial period ended 7 January
2024: EUR nil). The Company has no employees (2024: none) during the financial year and the Directors who are also employees of Apex Group
received no remuneration during the financial year (2024: EUR nil). The terms of the corporate services agreement provide for a single fee for the
provision of corporate services (including making available of individuals to act as Directors of the Company). The Company has allocated an amount of
1% of the total administration fees paid to Apex IFS Limited for the provision of the services of a Director. The individuals acting as Directors do not
(and will not), in their personal capacity or any other capacity, receive any fee for acting or having acted as Directors of the Company. As a result, the
allocation of fees between the different services provided is a subjective and approximate calculation.
*The Reimbursement by Loan Servicer relates to the funding of certain operating expenses of the Company by the Loan Servicer.
Interest income on Loans and Receivables
income on performing Loans and Receivables
Notes to the financial statements (continued)
MBA Community Loans PLC
Other non-audit services
Auditors' remuneration for work carried out relate to fees payable to PWC, the Statutory audit firm. Fees are exclusive of VAT and include expenses.
Financial year
ended
Financial
period ended
Auditor's remuneration for work carried out for the Company in respect of the
financial year is as follows:
For the financial year ended 7 January 2025
Management fees - annual fee 2%
Financial year
ended
Financial
period ended
Reimbursement by Loan Servicer*
Financial year
ended
Financial
period ended
Audit of individual company accounts
Page 27
8
Tax expense
07-Jan-25 07-Jan-24
EUR EUR
Current tax
-
-
Deferred tax
-
-
Total tax charge
-
-
Reconciliation of effective tax rate
Profit on ordinary activities before tax -
-
-
-
Total tax charge for the year/period -
-
Tax losses
Unused tax losses for which no deferred tax asset has been recognised -
-
Potential tax benefit at 25% -
-
9
Loans and Receivables
07-Jan-25 07-Jan-24
EUR EUR
103,954,245
122,435,034
(25,252,773) (18,030,146)
2,151,742 (450,643)
80,853,214
103,954,245
07-Jan-25 07-Jan-24
EUR EUR
(27,980,296) (28,038,863)
Impairment (charge)/reversal of student loans during the financial year/period (330,550)
792,140
547,498 (733,573)
(27,763,348) (27,980,296)
53,089,866
75,973,949
Unrealised foreign exchange movement
Balance at end of financial year/period
Impairment of student loans
Balance at beginning of financial year/period
Foreign exchange gain/(loss) on impairment of student
Balance at end of financial year/period
Net book value
Less principal repayments
For the financial year ended 7 January 2025
MBA Community Loans PLC
Notes to the financial statements (continued)
During the financial year, the Company acquired EUR Nil and sold EUR Nil (financial period ended 7 January 2024: acquired EUR Nil and sold EUR
Nil) of loan assets. These assets consist of portfolios of student loans. Please refer to note 13 to the financial statements.
At Cost
Loans and Receivables
Balance at beginning of financial year/period
Profit on ordinary activities multiplied by higher rate of corporation tax in Ireland of 25% (2024: 25%).
Effects of:
Financial
period ended
Financial year
ended
The reconciliation of current tax on profit on ordinary activities to the total tax charge for the financial year 7 January 2025 is shown as follows:
Page 28
9
Loans and Receivables (continued)
07-Jan-25 07-Jan-24
EUR EUR
< 1 year 9,347,938
12,748,410
1 to 2 years 9,347,938
12,748,410
2 to 5 years 18,695,876
25,496,820
> 5 years 15,698,114
24,980,309
53,089,866
75,973,949
10
Other receivables
07-Jan-25
07-Jan-24
EUR EUR
Interest income receivable 5,168,837
5,308,693
VAT receivable 1,432
-
5,170,269
5,308,693
11
Cash and cash equivalents
07-Jan-25
07-Jan-24
EUR EUR
3,434,559
6,103,713
40,000
40,000
3,474,559
6,143,713
12
Other payables
07-Jan-25 07-Jan-24
EUR EUR
1,663,337
1,718,851
132,038
165,932
Loan from Prodigy Finance Ltd 70,117
169,098
Payable to loan Servicer 1,358,531
820,147
102,894
-
3,326,917
2,874,028
For the financial year ended 7 January 2025
Student loans which fall into arrears of 90+ days are considered, non-performing loans, and are specifically impaired (default). The arrears analysis of
non-performing loans include interest charges after the loan is considered a non-performing loan. Expected credit losses provisions are provided for
student loans that fall into arrears less than or equal to 90 days (ahead, grace, on-schedule and delinquencies) and also for performing and grace period
loans. Expected credit losses provisions are calculated using a forward-looking expectation of deterioration of credit risk. Management along with its
Loan Servicer will continue to monitor historical trends, current economic factors and layer in future economic data to update its impairment provision
model accordingly.
MBA Community Loans PLC
Notes to the financial statements (continued)
Management fees payable to Loan Servicer
Operating expenses payable
The Notes bear interest at a rate based on a margin plus three-month Euribor (some Notes have a floor on Euribor of 0%), three-month CME Term SOFR
(for Series 10, 19, 27, 35, 37, 38, 39, 40, 41, 42, 43, 44, 45, 47, 48, 49, 52, 54, 55, 58, 59, 60, 61, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 80, 82, 83, 84,
85, 86, 87, 89, 90, 92, 93, 95, 98, 100, 101, 105, 108, 109, 110, 111, 113, 114, 115, 117, 118, 121, 122, 126, 134, 160, 170, 186, 189 and 195), three-
month ICE Term SONIA (for Series 15, 17, 23, 24, 29, 31, 32, 34, 36, 51, 53, 56, 62, 75, 76, 77, 88, 97, 102, 147, 150, 151, 152, 153, 164, 167, 183,
184 and 193) and GBP BOE (as denoted at note 13 to the financial statements) as determined on the relevant Euribor and ICE Term SONIA
determination date which is paid subject to available cashflows from the student loans. There is a spread on each Series between the rate on the student
loans and the relevant Notes, where the student loans accrue at a higher rate than the Notes. Due to cessation of ‘synthetic’ 3-month USD LIBOR on 30
September 2024`and the cessation of LIBOR on 31 March 2024, all USD notes were transferred to three-month CME Term SOFR and GBP notes to ICE
Term SONIA.
Maturity analysis
Interest payable on Notes issued (Note 13)
HSBC Bank Plc
Barclays Bank Plc
The Company's cash balances are held with HSBC Bank Plc and Barclays Bank Plc at their London and Coventry branches.
The Company’s cash is held mainly with HSBC Bank Plc and Barclays Bank Plc which have a short term credit rating of A-1 and A-1 respectively from
Standard and Poor’s as at 7 January 2025 (2024: A-1 and A-1).
Each Series of loans and Notes in issue has a separate bank account with HSBC Bank Plc, through which all transactions for the specific Series are
made. The paid up share capital of the Company, amounting to EUR 40,000 is held in a segregated bank account with Barclays Bank Plc.
Page 29
13
Notes issued
07-Jan-25 07-Jan-24
EUR EUR
Balance at beginning of financial year/period 84,499,644
104,987,342
Cash transactions
Issuance of Notes -
-
Principal repayment on Notes (26,635,746) (19,709,534)
(157,384)
791,217
Unrealised foreign exchange movement 2,155,600 (662,633)
Excess (loss)/gain transferred to the Noteholders (1,507,020) (906,748)
Balance at end of financial year/period 58,355,094
84,499,644
Reconciliation of finance expense:
Opening interest payable on Notes issued 1,718,851 1,729,552
Interest payments during the financial year/period (8,591,514) (5,218,218)
Coupon expense on Notes issued 8,484,682 5,213,655
Unrealised foreign exchange movement 51,318 (6,138)
Closing interest payable on Notes issued 1,663,337
1,718,851
Ccy 07-Jan-25 07-Jan-24
EUR EUR EUR EUR EUR
9* EUR 2,908,600 (2,908,600) - -
21,162
10 USD 852,950 (644,232) (64,813) 143,905
159,657
11 EUR 2,979,417 (2,708,241) (252,386) 18,790
5,845
15 GBP 440,205 (401,048) (21,079) 18,078
37,937
17 GBP 3,708,731 (3,601,894) (84,841) 21,996
12,861
18 EUR 3,883,130 (3,883,130) 3,606 3,606
2,547
19 USD 3,661,896 (2,962,344) (464,640) 234,912
368,641
21 EUR 3,505,931 (3,505,930) 3,538 3,539
100
22* GBP 403,957 (403,957) 1,324 1,324
99
23 GBP 998,362 (998,362) 4,837 4,837
6,279
24 GBP 451,492 (451,492) 1,766 1,766
99
25* EUR 3,403,502 (3,403,504) 5,344 5,342
2,681
27 USD 1,066,188 (866,690) (159,863) 39,635
83,200
28 EUR 4,715,793 (4,627,430) (45,810) 42,553
46,710
29 GBP 1,805,968 (1,689,395) (113,096) 3,477
6,083
30* GBP 919,915 (919,915) 7,403 7,403
9,036
31 GBP 327,332 (327,332) 103 103
99
32 GBP 231,954 (231,954) 102 102
99
34* GBP 500,027 (500,027) 1,669 1,669
98
35 USD 1,066,188 (1,047,405) (12,324) 6,459
66,419
36 GBP 1,241,603 (1,117,443) (113,699) 10,461
14,271
37 USD 1,279,425 (1,277,270) 38,578 40,733
97,268
38 USD 980,893 (790,608) (157,295) 32,990
87,501
39 USD 1,066,188 (908,606) (121,144) 36,438
43,693
40 USD 2,558,850 (1,777,848) (700,156) 80,846
103,892
41 USD 1,765,607 (1,416,626) (256,077) 92,904
158,727
42 USD 1,279,425 (1,087,524) (98,270) 93,631
163,236
48,003,529 (44,458,807) (2,597,223) 947,499
1,498,240
The outstanding balance of the Notes in issue at 7 January 2025 and 7 January 2024 are as follows:
Series
Original nominal
Cumulative
issuances/
payments
Cumulative
impact of
revision of cash
flows
Sub total
Impact of revision of cash flows on Notes issued
For the financial year ended 7 January 2025
MBA Community Loans PLC
Notes to the financial statements (continued)
Page 30
13
Ccy 07-Jan-25 07-Jan-24
EUR EUR EUR EUR EUR
Sub total 48,003,529 (44,458,807) (2,597,223) 947,499
1,498,240
43 USD 2,558,850 (1,677,362) (747,561) 133,927
203,834
44 USD 6,104,347 (3,304,607) (2,534,164) 265,576
344,560
45 USD 1,748,548 (1,292,495) (420,140) 35,913
45,426
46 EUR 3,274,879 (3,197,854) (73,019) 4,006
5,545
47 USD 2,737,970 (2,076,551) (472,783) 188,636
239,879
48 USD 2,558,850 (1,647,376) (802,312) 109,162
157,571
49 USD 7,036,838 (5,007,667) (1,722,083) 307,088
508,826
50 EUR 3,765,753 (3,365,112) (334,931) 65,710
144,678
51 GBP 2,504,910 (2,262,974) (115,385) 126,551
190,058
52 USD 5,670,784 (4,983,499) (513,246) 174,039
314,690
53 GBP 919,915 (797,587) (102,213) 20,115
32,237
54 USD 3,625,038 (3,120,342) (415,451) 89,245
137,874
55 USD 4,264,750 (3,609,992) (445,493) 209,265
286,402
56 GBP 507,929 (448,794) (21,855) 37,280
64,525
57 USD 200,443 (190,288) 6,560 16,715
20,722
58 USD 2,132,375 (1,175,645) (818,357) 138,373
204,525
59 USD 682,360 (634,890) (3,803) 43,667
78,669
60 USD 1,705,900 (1,355,426) (241,463) 109,011
169,298
61 USD 1,450,015 (1,111,833) (244,968) 93,214
117,198
62 GBP 959,421 (911,226) (45,252) 2,943
16,426
63 EUR 3,403,294 (3,161,269) (186,773) 55,252
119,032
64 USD 1,194,130 (939,112) (58,016) 197,002
271,118
65 USD 938,245 (879,317) (20,147) 38,781
56,329
66 USD 1,172,806 (856,231) (214,091) 102,484
158,985
67 USD 1,492,663 (1,195,774) (248,188) 48,701
64,090
68 USD 3,838,275 (2,694,420) (932,630) 211,225
289,462
69 USD 712,213 (712,213) 2,805 2,805
13,131
70 USD 852,950 (629,148) (203,477) 20,325
22,421
71 USD 426,475 (419,359) (3,265) 3,851
29,812
72 USD 2,670,586 (2,024,815) (492,512) 153,259
233,442
73 USD 758,614 (758,614) 1,537 1,537
47,035
75 GBP 5,951,762 (5,051,599) (539,619) 360,544
550,265
76 GBP 406,401 (303,228) (55,652) 47,521
64,193
77 GBP 665,189 (490,164) (150,091) 24,934
79,518
79 EUR 4,863,176 (4,486,770) (278,764) 97,642
263,189
80 USD 1,445,750 (1,279,286) (124,547) 41,917
68,923
81 EUR 2,286,757 (1,841,103) (93,949) 351,705
585,553
82 USD 1,093,260 (1,001,860) (8,238) 83,162
112,795
83 USD 1,088,229 (746,514) (160,286) 181,429
233,009
84 USD 639,713 (463,841) (68,457) 107,415
137,028
85 USD 1,647,983 (1,240,018) (238,548) 169,417
218,232
86 USD 315,592 (183,846) (83,605) 48,141
61,477
87 USD 1,108,922 (807,571) (227,977) 73,374
166,331
88 GBP 1,155,956 (914,276) (168,581) 73,099
162,213
89 USD 4,714,117 (3,547,920) (741,682) 424,515
548,723
90 USD 3,642,096 (2,505,927) (666,054) 470,115
607,370
92 USD 504,093 (478,567) 30,172 55,698
72,262
93 USD 597,065 (575,668) 6,511 27,908
56,095
95 USD 3,061,238 (2,428,736) (379,414) 253,088
317,292
96 EUR 4,500,000 (3,074,225) (803,273) 622,502
875,035
97 GBP 1,643,432 (807,573) (681,117) 154,742
238,905
98 USD 2,636,084 (2,421,439) (107,668) 106,977
187,772
100 USD 997,564 (821,243) (107,515) 68,806
114,235
164,838,034 (136,371,973) (20,668,253) 7,797,808
11,806,455
The outstanding balance of the Notes in issue at 7 January 2025 and 7 January 2024 are as follows (continued):
Sub total
Cumulative
impact of
revision of cash
flows
MBA Community Loans PLC
Notes to the financial statements (continued)
For the financial year ended 7 January 2025
Notes issued (continued)
Series
Original nominal
Cumulative
issuances/
payments
Page 31
13
Ccy 07-Jan-25 07-Jan-24
EUR EUR EUR EUR EUR
164,838,034 (136,371,973) (20,668,253) 7,797,808
11,806,455
101 USD 776,185 (646,920) (56,378) 72,887
138,054
102 GBP 564,365 (448,269) (91,643) 24,453
84,214
103 EUR 4,000,001 (3,468,334) (350,579) 181,088
479,101
EUR 2,977,862 (2,374,713) (167,114) 436,035
679,259
USD 1,591,204 (1,197,278) (174,532) 219,394
347,137
USD 439,798 (354,657) (73,326) 11,815
18,394
USD 478,228 (400,827) (35,592) 41,809
47,049
USD 251,032 (202,504) (34,310) 14,218
41,854
USD 865,744 (536,915) (233,891) 94,938
113,221
USD 648,754 (199,401) (311,641) 137,712
176,910
USD 589,559 (538,343) (17,794) 33,422
38,895
USD 8,219,047 (5,976,569) (1,466,759) 775,719
1,110,260
EUR 6,054,423 (5,415,576) (332,105) 306,742
535,716
USD 2,611,905 (2,611,905) 138,826 138,826
168,115
USD 3,207,924 (2,358,948) (489,111) 359,865
489,554
USD 618,389 (505,028) (67,830) 45,531
54,690
USD 852,950 (852,950) 5,099 5,099
28,323
USD 1,288,381 (1,045,968) (176,917) 65,496
86,436
USD 1,375,177 (1,285,996) (65,648) 23,533
33,182
EUR 5,945,036 (5,502,667) (115,692) 326,677
589,737
EUR 3,250,000 (2,276,581) (496,779) 476,640
683,676
EUR 2,395,108 (1,753,783) (111,758) 529,567
759,421
EUR 4,014,558 (3,337,259) (117,038) 560,261
872,218
EUR 750,000 (701,383) (6,661) 41,956
47,032
GBP 3,483,838 (3,126,126) (145,652) 212,060
379,854
EUR 4,627,825 (3,774,521) (330,452) 522,852
656,501
GBP 547,321 (422,178) (78,864) 46,279
83,221
GBP 564,365 (525,843) (11,063) 27,459
58,040
GBP 614,368 (571,836) 1,726 44,258
98,079
153 GBP 557,970 (445,924) (12,067) 99,979
145,046
154 EUR 1,000,000 (841,441) (509) 158,050
263,289
156 EUR 5,830,921 (4,759,279) (89,321) 982,321
1,461,910
157 EUR 1,200,000 (1,072,720) (2,360) 124,920
171,733
158 EUR 1,000,000 (802,519) (31,519) 165,962
329,409
159 EUR 2,786,000 (1,861,011) (345,006) 579,983
881,725
160 USD 3,415,585 (2,692,697) (646,917) 75,971
129,399
161 EUR 1,000,000 (700,181) (77,325) 222,494
403,711
164 GBP 3,567,276 (3,015,811) (148,055) 403,410
538,370
166 EUR 885,000 (748,457) (115,370) 21,173
27,993
167 GBP 1,860,769 (1,647,356) (129,764) 83,649
62,778
180 EUR 3,605,000 (3,241,859) (34,460) 328,681
531,198
170 USD 3,336,138 (2,925,912) (291,610) 118,616
120,062
181 EUR 4,819,656 (4,001,518) (4,999) 813,139
1,213,556
182 EUR 4,959,470 (3,482,012) (268,692) 1,208,766
1,826,397
183 GBP 569,166 (395,501) (58,293) 115,372
127,298
184 GBP 3,414,993 (2,312,029) (248,690) 854,274
1,203,153
185 EUR 2,530,289 (1,948,766) (29,405) 552,118
776,556
274,779,614 (225,680,244) (28,616,093) 20,483,277
30,918,181
113
114
116
126
134
141
142
144
145
146
147
148
104
105
108
109
110
111
Sub total
For the financial year ended 7 January 2025
Notes issued (continued)
The outstanding balance of the Notes in issue at 7 January 2025 and 7 January 2024 are as follows (continued):
Series
Original nominal
Cumulative
issuances/
payments
Cumulative
impact of
revision of cash
flows
MBA Community Loans PLC
Notes to the financial statements (continued)
117
118
115
121
122
150
151
152
Sub total
Page 32
13
Ccy 07-Jan-25 07-Jan-24
EUR EUR EUR EUR EUR
274,779,614 (225,680,244) (28,616,093) 20,483,277
30,918,181
186 USD 10,645,899 (8,159,054) (38,836) 2,448,009
2,799,369
188 EUR 2,301,213 (1,416,523) (21,029) 863,661
1,306,954
189 USD 712,736 (283,461) (88,819) 340,456
373,230
192 EUR 1,000,000 (352,989) (37,154) 609,857
742,239
193 GBP 228,273 (170,578) (26,216) 31,479
63,169
195 USD 321,738 (101,830) (70,240) 149,668
226,148
196 EUR 750,515 - (30,360) 720,155
1,316,917
199 EUR 18,385,866 - 836,126 19,221,992
26,246,704
200 GBP 16,127,247 285,654 (35,683) 16,377,218
22,467,056
201 USD 1,729,000 (1,266,724) (185,037) 277,239
665,276
326,982,101 (237,145,749) (28,313,341) 61,523,011
87,125,243
14
07-Jan-25
07-Jan-24
EUR EUR
40,000
40,000
40,000
40,000
Called up share capital presented as equity 40,000
40,000
15
All the issued shares in the Company are owned by Apex Trust Nominees No. 1 Limited, which is a company incorporated in England and Wales. The
Share Trustee holds the benefit of the shares on trust for charity. The Share Trustee has no beneficial interest in and derives no benefit other than its fees
for acting as Share Trustee, from its holding of the shares.
Introduction and overview
As at 7 January 2025, the Company had its principal amount of Notes in issue amounting to EUR 58,355,094 (financial period ended 7 January 2024:
EUR 84,499,644).
The principal activity of the Company is to invest in Loans and Receivables, the acquisition of which is funded by the issue of Notes to investors. The
net proceeds of the issue of the Notes will be used by the Company to acquire relevant Student Loans from the Loan Originator in accordance with the
terms of the respective agreements and to pay for permitted expenses.
*These notes has been fully redeemed during the financial year.
Each Series of Notes is backed by a diversified pool of loans to international students. Interest payment will be referenced to three-month Euribor, three-
month CME Term SOFR, three-month ICE Term SONIA and GBP BOE (i.e. the reference rate plus a margin). The Noteholders are also affected by the
grace period. During the grace period, or when borrowers are ahead of schedule with repayments, no repayments are required. Borrowers are said to be
in grace while they are studying, and this period can be either 1 or 2 years depending on the length of the course. During this period, no payment will be
made by the Company in respect of Notes. The currency that each Note is issued is in the same currency that the loans to students is issued.
Total
The outstanding balance of the Notes in issue at 7 January 2025 and 7 January 2024 are as follows (continued):
Series
Original nominal
Cumulative
issuances/
payments
MBA Community Loans PLC
Notes to the financial statements (continued)
For the financial year ended 7 January 2025
Cumulative
impact of
revision of cash
flows
Notes issued (continued)
Sub total
Authorised share capital:
40,000 Ordinary shares of EUR 1 each
Allotted, called up and fully paid:
40,000 Ordinary shares of EUR 1 each
Presented as follows:
Financial risk management
Due to cessation of ‘synthetic’ 3-month USD LIBOR on 30 September 2024`and the cessation of LIBOR on 31 March 2024, all USD notes were
transferred to three-month CME Term SOFR and GBP notes to ICE Term SONIA.
Share capital
Page 33
(a)
07-Jan-25 07-Jan-24
EUR EUR
Loans and Receivables 53,089,866
75,973,949
Other receivables 5,170,269
5,308,693
Cash and cash equivalents 3,474,559
6,143,713
61,734,694
87,426,355
Loans and Receivables
On schedule 31 - 90 Days 90+ Days
EUR EUR EUR
Student Loans 46,983,951 6,374,748 36,026,742
(Principal & Interest)
On schedule 31 - 90 Days 90+ Days
EUR EUR EUR
Student Loans 62,672,274 11,400,375 38,477,045
(Principal & Interest)
Loans and Receivables (continued)
Impairment policy
Student loans which fall into arrears of 90+ days are considered, non-performing loans, and are specifically impaired (default). The arrears analysis
of non-performing loans include interest charges after the loan is considered a non-performing loan. Expected credit losses allowances are provided
for student loans that fall into arrears less than or equal to 90 days (ahead, grace, on-schedule and delinquencies) and also for performing and grace
period loans. Expected credit losses allowances are calculated using a forward-looking expectation of deterioration of credit risk. Management
along with its Loan Servicer will continue to monitor historical trends, current economic factors and layer in future economic data to update its
impairment allowance model accordingly.
The Loan Servicer holds lifetime impairments for loans where the Loan Servicer can identify that a significant increase in credit risk has occurred.
This will include loans that are delinquent, loans that have been granted payment arrangements and loans that have defaulted. This ensures a
forward-looking approach. The Loan Servicer makes use of the 12-month delinquency rate to set thresholds to identify if an increase in credit risk
is significant. Separate thresholds are calculated for each loan status as well as each risk bucket grouping.
Risk management framework
The Directors have overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company is exposed
to a variety of financial risks as a result of its activities. The principal risks arising from the Company's financial instruments are credit risk, market risk
(including interest rate risk and foreign exchange risk) and liquidity risk. The principal nature of such risks is summarised below.
7 January 2025
7 January 2024
Credit risk
Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The
Company’s principal financial assets are cash and cash equivalents, other receivables and Loans and Receivables, which represents the Company’s
maximum exposure to credit risk.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to the credit risk at the reporting date
was:
No loan payment is required during the study period.
Once the loan is disbursed, the loan is managed in line with the Loan Management Policy and is loaded to the Loan Servicer's loan management
system. After the grace period, the loans are monitored for payment performance. Any arrears are flagged and borrowers are contacted to
understand the reason for missed payments. The collections tools to improve payment performance include temporary forbearance and escalation
through enforcement stages.
The portfolio is also analysed monthly, by the Loan Servicer, to identify spikes in delinquency and investigate root causes. This allows the Loan
Servicer's credit team to propose management actions.
Notes to the financial statements (continued)
MBA Community Loans PLC
Default risk refers to the risk that a loan counterparty will default on its contractual obligations resulting in financial loss to the Company. The
ability of the Company to meet its payment obligations under the Notes will be affected by defaults in the underlying students loans. The loan
platform has been designed and developed to minimise the risk of arrears and default rates for loans to international students. The Loan Servicer,
Prodigy Finance LTD, has developed comprehensive risk and background vetting procedures that are used to screen every applicant as well as a
proprietary scorecard which assesses each applicant's expected ability (post-graduation) to repay the loan.
For the financial year ended 7 January 2025
Page 34
15
(a)
Credit risk (continued)
Impairment policy (continued)
Cash and cash equivalents
Other receivables
Quality of Loans and Receivables
Stage 1
Stage 2
Stage 3
Total
EUR EUR EUR EUR
Opening balance 62,672,274 11,400,375 38,477,045
112,549,694
Transfer to stage 1 12,487,161 (8,982,416) (3,504,745)
-
Transfer to stage 2 (3,746,751) 5,323,229 (1,576,478)
-
Transfer to stage 3 (1,844,618) (971,171) 2,815,789
-
Net remeasurement of loss allowance (existing assets) (23,460,005) (542,018) (1,340,435) (25,342,458)
Foreign currency translation 875,890 146,749 1,155,566
2,178,206
Closing balance 46,983,951 6,374,748 36,026,742
89,385,442
Stage 1
Stage 2
Stage 3
Total
EUR EUR EUR EUR
Opening balance 78,253,448 13,135,605 40,041,238
131,430,291
Transfer to stage 1 13,464,995 (10,749,307) (2,715,688)
-
Transfer to stage 2 (10,123,825) 10,971,411 (847,586)
-
Transfer to stage 3 (1,976,672) (793,326) 2,769,998
-
Net remeasurement of loss allowance (16,707,130) (1,114,979) (625,440) (18,447,549)
New financial assets originated or purchased (238,542) (49,029) (145,477) (433,048)
Closing balance 62,672,274 11,400,375 38,477,045
112,549,694
Movements in the allowance for impairment in respect of Loans and Receivables
07-Jan-25 07-Jan-24
EUR EUR
Opening balance under IFRS 9 (27,980,296) (28,038,863)
Net remeasurement of loss allowance 216,948
58,567
Closing balance (27,763,348) (27,980,296)
The movement in the allowance for impairment in respect of Loans and Receivables during the financial year was as follows:
Where there are insufficient funds available from a Series to cover the obligations due to that Series' Noteholders, this ultimate loss will be borne
by the Noteholders for a default on their respective Series.
Impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and reflects the short maturities of the exposures.
The Company considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.
07-Jan-24
Notes to the financial statements (continued)
Financial risk management (continued)
The ECL impact on cash and cash equivalents is immaterial.
For the financial year ended 7 January 2025
MBA Community Loans PLC
As at the reporting date, the credit risk exposures of the Company’s Loans and Receivables (including interest income receivable) are listed as
below:
Cash and cash equivalents are not perceived as being exposed to significant credit risk as they are held in reputable banks or financial institutions.
The S&P's credit long term rating of the banks in which the Company has held cash deposits is A+ (2024: A+) for HSBC Bank Plc and A (2024: A)
for Barclays Bank plc.
07-Jan-25
Impairment on other receivables (not including interest income receivable) has been measured on a 12-month expected loss basis and reflects the
short maturities of the exposures. The Company considers that its other receivables have low credit risk based on the external credit ratings of the
counterparties.
Page 35
15
(a)
Credit risk (continued)
Movements in the allowance for impairment in respect of Loans and Receivables (continued)
Stage 1 Stage 2 Stage 3 Total
EUR EUR EUR EUR
Balance at the beginning of the year (587,945) (994,345) (26,398,007) (27,980,296)
Transfer to/(from) stage 1 (2,528,945) 635,342 1,893,603 -
Transfer to/(from) stage 2 74,264 (555,242) 480,977 -
Transfer to/(from) stage 3 44,250 185,268 (229,518) -
Net Remeasurement of ECL (existing assets) 2,477,700 (168,880) (1,216,685) 1,092,135
-
Foreign currency translation (10,819) (20,759) (843,609) (875,187)
Balance at the End of the Year (531,495) (918,615) (26,313,239) (27,763,348)
Stage 1 Stage 2 Stage 3 Total
EUR EUR EUR EUR
Balance at the beginning of the year (855,176) (945,227) (26,238,459) (28,038,863)
Transfer to/(from) stage 1 (2,030,186) 644,947 1,385,239 -
Transfer to/(from) stage 2 188,219 (645,323) 457,104 -
Transfer to/(from) stage 3 40,200 136,387 (176,586) -
Net Remeasurement of ECL (existing assets) 2,066,704 (189,507) (1,905,547) (28,350)
-
Foreign currency translation 2,295 4,379 80,243 86,917
Balance at the End of the Year (587,945) (994,345) (26,398,007) (27,980,296)
Three Risk Stages
Average PD Average EAD ECL ratio Ccy
ECL
ECL
Ccy EUR
Stage 1 8.79% 171.04% 91.17% 13.71% USD 102,232
98,367
Stage 2 48.80% 176.29% 91.17% 78.44% USD 128,541
123,683
Stage 3 201.23% 205.69% 174.10% 720.62% USD 14,708,318
14,152,344
Stage 1 6.33% 157.54% 87.72% 8.74% EUR 274,439
274,439
Stage 2 46.82% 163.46% 87.72% 67.14% EUR 408,202
408,202
Stage 3 182.06% 194.67% 137.12% 485.97% EUR 6,747,921
6,747,921
Stage 1 4.91% 134.22% 72.73% 4.79% GBP 131,572
158,688
Stage 2 38.14% 132.88% 72.73% 36.86% GBP 320,645
386,730
Stage 3 157.74% 163.14% 107.77% 277.33% GBP 4,487,996
5,412,974
27,763,348
Average LGD
Expected credit loss assessment for Loans and Receivables as at 7 January 2025:
Financial risk management (continued)
For the financial year ended 7 January 2025
MBA Community Loans PLC
Notes to the financial statements (continued)
07-Jan-24
07-Jan-25
Page 36
15
(a)
Credit risk (continued)
Three Risk Stages
Average PD Average EAD ECL ratio Ccy
ECL
ECL
Ccy EUR
Stage 1 2.80% 79.51% 43.59% 0.97% USD 93,612
85,721
Stage 2 32.20% 75.87% 43.59% 10.65% USD 168,846
154,612
Stage 3 96.32% 99.08% 82.51% 78.74% USD 14,866,630
13,613,373
Stage 1 2.67% 78.66% 43.59% 0.92% EUR 311,179
311,179
Stage 2 29.17% 64.50% 43.59% 8.20% EUR 472,702
472,702
Stage 3 92.30% 98.84% 67.55% 61.62% EUR 7,665,166
7,665,166
Stage 1 2.82% 78.09% 43.59% 0.96% GBP 164,694
191,045
Stage 2 29.57% 68.03% 43.59% 8.77% GBP 316,403
367,027
Stage 3 90.04% 98.86% 65.69% 58.48% GBP 4,413,335
5,119,471
27,980,296
Sensitivity analysis
(b)
(i)
EUR
EUR
USD
29,487,819
+/- 1,474,391
GBP
21,107,801
+/- 1,055,390
EUR
EUR
USD
21,188,062
+/- 1,059,403
GBP
22,048,721
+/- 1,102,436
Market risk
Management considers applying an adjustment for significant increase of credit risk event ("SICR") to be an appropriate methodology for
evaluating the sensitivity and risk to the Company. If the Manager's SICR was adjusted by 10 basis points, which management consider to be a
reasonable possible shift, with all other variables remaining constant, the change in ECL on loans and receivables at amortised cost in the year
would be EUR 309,037 (2024: EUR 336,463).
The loans and Notes are denominated in EUR, GBP and USD, as indicated at note 9 and 13 to the financial statements respectively. The currency
that each Note is issued in is the same currency that the loan to students is issued in.
+/-5% movement in foreign
exchange rate
At 7 January 2025, the Directors are of the view that a movement of 5% in foreign exchange rates was a reasonable threshold to use.
Total Loans amount exposed to
currency fluctuation
+/-5% movement in foreign
exchange rate
Currency risk
Expected credit loss assessment for Loans and Receivables as at 7 January 2024:
Average LGD
Total Notes issued amount
exposed to currency fluctuation
MBA Community Loans PLC
Notes to the financial statements (continued)
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other pricing effects will affect the
Company's income or the value of its holding of financial instruments.
If the underlying foreign exchange rate on the United States Dollar and Great British Pound closing balances for the financial year ended 7 January
2025 were to increase or decrease by 5%, the resulting increase or decrease on the value of the Notes issued in those respective currencies is shown
above.
For the financial year ended 7 January 2025
Financial risk management (continued)
At 7 January 2025, the Directors are of the view that a movement of 5% in foreign exchange rates was a reasonable threshold to use.
If the underlying foreign exchange rate on the United States Dollar and Great British Pound closing balances for the financial year ended 7 January
2025 were to increase or decrease by 5%, the resulting increase or decrease on the value of the loan balances in those respective currencies is
shown above.
Page 37
15
(b)
Market risk (continued)
(ii)
Amount Amount
EUR % EUR %
53,089,866 10.12% 75,973,949 5.32%
3,474,559 0.00% 6,143,713 0.00%
58,355,094 7.74% 84,499,644 4.53%
(c)
EUR EUR EUR
EUR
EUR EUR
58,355,094 83,427,560 16,429,938 16,397,748 31,820,650 18,779,224
Other payables 3,326,917 3,326,917 3,326,917 - -
-
61,682,011 86,754,477 19,756,855 16,397,748 31,820,650 18,779,224
EUR EUR EUR EUR EUR EUR
84,499,644 122,986,336 20,349,215 20,296,879 44,754,991 37,585,251
Other payables 2,874,028 2,874,028 2,874,028 - -
-
87,373,672 125,860,364 23,223,243 20,296,879 44,754,991 37,585,251
Notes issued
The following are the contractual maturities of financial liabilities, assuming no early repayments, including interest payments:
07-Jan-25
At 7 January 2025, the directors are of the view that, considering the trend of the weighted average rate year by year, a movement of 10% in
rates was a reasonable threshold to use, as the 10% movement was representative based on interest rate variances that the Company
considered to be reasonably possible at the reporting date.
If the underlying interest rate on the closing balance for the financial year ended 7 January 2025 were to increase or decrease by 10%, the
interest income would increase/decrease by EUR 5,308,987 and the interest expense would increase or decrease by EUR 5,835,509.
07-Jan-24
Weighted
Average Rate
For the financial year ended 7 January 2024
MBA Community Loans PLC
Weighted
Average Rate
Interest rate risk
Two to five
years
More than five
years
Notes issued
07-Jan-24
Carrying amount
Gross contractual
cashflows
Less than one
year
One to two years
Carrying amount
Gross contractual
cashflows
Less than one
year
Two to five
years
More than five
years
The Company’s obligation to the Noteholders of a particular Series is limited to the net proceeds upon realisation of the assets of that Series or it
having any funds to make the repayment. Should the net proceeds be insufficient to make all payments, the other assets of the Company will not be
available for payment and the deficit is instead borne by the Noteholders according to the established priorities of payment.
Loans and Receivables
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of financial
instruments. Interest rate risk exists where assets and liabilities have interest rates under a different basis or which reset at a different time.
The Notes bear interest at a rate based on a margin plus three-month Euribor (some Notes have a floor on Euribor of 0%), three-month CME
Term SOFR, three-month ICE Term SONIA and GBP BOE (as denoted at note 13 to the financial statements) as determined on the relevant
Euribor and GBP Libor determination date which is paid subject to available cashflows from the student loans. There is a spread on each
Series between the rate on the Student Loans and the relevant Notes, where the student loans accrue at a higher rate than the Notes.
According to a sensitivity analysis, if the underlying interest rate on the closing balance for the financial year ended 7 January 2024 were to
increase or decrease by 10%, the interest income would increase/decrease by EUR 7,597,395 and the interest expense would increase or
decrease by EUR 8,449,964.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they fall due. The Company matches the properties of its
financial liabilities to its assets to avoid significant elements of risk generated by mismatches of investment performance against its obligations.
Cash and cash equivalents
Notes issued
Financial risk management (continued)
One to two years
Notes to the financial statements (continued)
The Notes are tradable and are listed on the Euronext Dublin but no established secondary market exists for the Notes. Also the amortizing nature
of the Notes and the fact that many borrowers repay early means that the majority of principal may be repaid before final maturity.
07-Jan-25
Page 38
15
Financial risk management (continued)
(d)
Concentration risk
EUR
EUR EUR EUR
26,653,730 (8,590,336) 1,644,371 19,707,765
27,339,163 (8,241,622) 1,702,370 20,799,911
14,648,021 (4,830,403) 810,802 10,628,420
10,990,616 (5,706,902) 961,173 6,244,887
1,221,684 (394,085) 50,121 877,720
80,853,214 (27,763,348) 5,168,837 58,258,703
EUR
EUR EUR EUR
35,320,855 (8,831,855) 1,631,213 28,120,213
37,018,456 (8,111,017) 1,866,150 30,773,589
16,496,285 (4,719,620) 822,953 12,599,618
13,082,792 (5,980,395) 925,775 8,028,172
2,035,857 (337,409) 62,602 1,761,050
103,954,245 (27,980,296) 5,308,693 81,282,642
(e)
16
17
During the financial year ended 7 January 2025, fees of EUR 144,583 (financial period ended 7 January 2024: EUR 93,255) were earned by Apex
Group, the corporate secretary, the corporate service provider and the security trustee, in respect of corporate secretary, administration fees and trustee
services and received the payment of EUR 143,000 (financial period ended 7 January 2024: EUR 93,255). As at 7 January 2025, there was an amount
of EUR 1,583 (financial period ended 7 January 2024: EUR Nil) owed by the Company.
Australasia
Interest
receivable
Total
Europe
Americas
Asia
Europe
Africa
Australasia
07-Jan-24
Fair value
The Company's financial instruments not measured at fair value through profit or loss consist of cash and cash equivalents, Loans and Receivables,
other receivables, Notes issued and other payables. The carrying values of the financial instruments approximate their fair values.
Ownership of the Company
Apex Trust Nominee No.1 Limited, which is a company incorporated in England and Wales, is the sole shareholder of the Company.
Stephen McQuaid, Rhys Owens, Maria Dawson and Ciaran Connolly who acted as Directors of the Company during the financial year, are employed by
the corporate secretary and the corporate service provider. The corporate secretary, the corporate service provider and the security trustee are all
companies whose ultimate parent is the Apex Group. These operating companies provide company administration, trustee and secretarial services to the
Company at an arm's length basis, at normal commercial rates.
The Company has no employees (2024: none) and the Directors who are also employees of Apex Group received no remuneration during the financial
year (2024: EUR nil). The terms of the corporate services agreement provide for a single fee for the provision of corporate services (including making
available of individuals to act as Directors of the Company). As a result, the allocation of fees between the different services provided is a subjective and
approximate calculation. The Company has allocated an amount of 1% of the total fees paid to Apex IFS Limited for the provision of the services of a
Director. The individuals acting as Directors do not (and will not), in their personal capacity or any other capacity, receive any fee for acting or having
acted as Directors of the Company. Directors remuneration is disclosed in note 3 to the financial statements.
Asia
The following is a geographical analysis of the Loans and Receivables by the students' current country of residence:
07-Jan-25
Loan principal
Interest
receivable
Africa
For the financial year ended 7 January 2025
Americas
Loan principal
Total
Impairment
allowance
All shares are held in trust for charity under the terms of declaration of trust. The trustee has appointed a Board of Directors to run the day-to-day
activities of the Company. The Board of Directors have considered the issue as to who is the controlling party of the Company. It has determined that the
control of the day-to-day activities of the Company rests with the Board and there is no single controlling party.
Related party transactions
Transactions with the Administrator
Impairment
allowance
All of the loans are issued to students which presents a concentration risk to the Company. However, controls are in place by Prodigy Finance LTD
as it relates to the vetting and on going monitoring procedures to mitigate this risk.
MBA Community Loans PLC
Notes to the financial statements (continued)
Page 39
17
18
19
Subsequent events
20
Approval of financial statements
Related party transactions (continued)
There is no subsequent event which require disclosure in the Financial Statements.
Transactions with the Loan Servicer
The Company has received a loan from Prodigy Finance LTD to settle its 2019 tax liability. As at 7 January 2025, the remaining loan balance amounts to
EUR 151,098 (financial period ended 7 January 2024: EUR 169,098).
The Loan Servicer, Prodigy Finance LTD provides loan servicing, transfer agent and collection agent services to the Company. Management fees
charged by Prodigy Finance LTD amounted to EUR 974,358 (financial period ended 7 January 2024: EUR 679,581) and 'Administration fees -
origination fees', split between Prodigy Finance LTD and Prodigy Services Limited, amounting to EUR Nil (financial period ended 7 January 2024: EUR
Nil). As at 7 January 2025, Prodigy Investments Limited held EUR 2,303,349 (financial period ended 7 January 2024: EUR 2,152,537) of the
Company's Notes with accrued interest of EUR 34,351 (financial period ended 7 January 2024: EUR 32,800). As at 7 January 2025, there were
outstanding balances of EUR 132,038 (financial period ended 7 January 2024: EUR 165,932) owed by the Company in respect of management fee and
EUR Nil (financial period ended 7 January 2024: EUR nil) owed by the Company in respect of administration-origination fees respectively.
Prodigy Finance LTD pays also certain expenses on behalf of the Company. During the financial year, Prodigy Finance LTD paid expenses amounted to
EUR 466,439 from which EUR 384,963 is outstanding at the year end.
The Board of Directors have approved these audited financial statements on 6 May 2025.
For the financial year ended 7 January 2025
Capital management
Notes to the financial statements (continued)
MBA Community Loans PLC
The Company view the share capital as its capital. The board reviews the Company’s management accounts and financial statements periodically to
ensure the capital structure is maintained. Share capital of EUR 40,000 was issued in line with Irish Company Law and is not used for financing the
investment activities of the Company. The Company is not subject to any other externally imposed capital requirements.
An amount of EUR 118,687 (financial period ended 7 January 2024: EUR 149,000) was reimbursed by the Loan Servicer during the financial year
ended 7 January 2025 relating to the funding of certain operating expenses of the Company by the Loan Servicer.