Audit fees for the years ended December 31, 2021 and 2020 were related to the audit of our Consolidated financial statements and other audit or interim review services provided in connection with statutory and regulatory filings or engagements.

Audit-related fees for the year ended December 31, 2020 were related to services in connection with our financing activities.

All other fees in the years ended December 31, 2021 and 2020 were related to services in connection with non-audit compliance and review work.

The advance approval of the Audit Committee or members thereof, to whom approval authority has been delegated, is required for all audit and non-audit services provided by our auditors.

All services provided by our auditors are approved in advance by either the Audit Committee or members thereof, to whom authority has been delegated, in accordance with the Audit Committee's pre-approval policy.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We are a “foreign private issuer” (as such term is defined in Rule 3b–4 under the Exchange Act), and our Class A ordinary shares are listed on the NYSE. We believe the following to be the significant differences between our corporate governance practices and those applicable to U.S. companies under the NYSE listing standards. Under the NYSE rules, NYSE-listed companies that are foreign private issuers are permitted to follow home country practice in-lieu of the corporate governance provisions specified by the NYSE, with limited exceptions. Accordingly, we follow certain corporate governance practices of our home country, the Cayman Islands, in-lieu of certain of the corporate governance requirements of the NYSE. In addition, under the NYSE rules, listed companies of which more than 50% of the voting power for the election of Directors is held by an individual, group or other entity are not required to have a majority of independent Directors, as defined by NYSE rules, or to comply with certain other requirements. Because Mr. Neves beneficially owns more than 50% of our voting power, we are a “controlled company” within the meaning of the rules of the NYSE.

Under the NYSE rules, U.S. domestic listed, non-controlled companies are required to have a majority independent board, which is not required under the Companies Act (as amended) of the Cayman Islands, our home country. In addition, the NYSE rules require U.S. domestic listed, non-controlled companies to have a Compensation Committee and a Nominating and Corporate Governance Committee, each composed entirely of independent Directors, which are not required under our home country laws.

We currently follow and intend to continue to follow the foregoing governance practices and not avail ourselves of the exemptions afforded to foreign private issuers or controlled companies under the NYSE rules. We may in the future, however, decide to use other foreign private issuer exemptions with respect to some or all of the other NYSE listing requirements. Following our home country governance practices may provide less protection than is accorded to investors under the NYSE listing requirements applicable to domestic issuers.

The NYSE also requires that a listed company obtain, in specified circumstances, (1) shareholder approval to adopt or materially revise equity compensation plans, as well as (2) shareholder approval prior to an issuance (a) of more than 1% of its common stock (including derivative securities thereof) in either number or voting power to related parties, (b) of more than 20% of its outstanding common stock (including derivative securities thereof) in either number or voting power or (c) that would result in a change of control, none of which require shareholder approval under Cayman Islands law. We intend to follow home country law in determining whether shareholder approval is required.

Due to our status as a foreign private issuer and our intent to follow certain home country corporate governance practices, our shareholders do not have the same protections afforded to shareholders of companies that are subject to all the NYSE corporate governance standards and shareholder approval requirements.

~~The advance approval of the Audit Committee or members thereof, to whom approval authority has been delegated, is required for all audit and non-audit services provided by our auditors.~~

~~Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers~~

Our Class A ordinary shares are listed on the NYSE. We believe the following to be the significant differences between our corporate governance practices and those applicable to U.S. companies under the NYSE listing standards. In general, under the NYSE, foreign private issuers, as defined under the Exchange Act, are permitted to follow home country corporate governance practices instead of the corporate governance practices of the New York Stock Exchange. Accordingly, we follow certain corporate governance practices of our home country, the Cayman Islands, in lieu of certain of the corporate governance requirements of the NYSE.

We are a “foreign private issuer” (as such term is defined in Rule 3b–4 under the Exchange Act), and our Class A ordinary shares are listed on the NYSE. Under the NYSE rules, NYSE listed companies that are foreign private issuers are permitted to follow home country practice in lieu of the corporate governance provisions specified by the NYSE with limited exceptions. In addition, under the NYSE rules, listed companies of which more than 50% of the voting power for the election of directors is held by an individual, group or other entity are not required to have a majority of independent directors, as defined by NYSE rules, or to comply with certain other requirements. Because Mr. Neves beneficially owns more than 50% of the voting power of the Company, the Company is a “controlled company” within the meaning of the rules of the NYSE.

Under the NYSE rules, U.S. domestic listed, non-controlled companies are required to have a majority independent board, which is not required under the Companies Law of the Cayman Islands, our home country. In addition, the NYSE rules require U.S. domestic listed, non-controlled companies to have a compensation committee and a nominating and corporate governance committee, each composed entirely of independent directors, which are not required under our home country laws.

The NYSE rules also require shareholder approval for certain matters, such the opportunity to vote on equity compensation plans and material revisions to those plans, which is not required under the Cayman Islands law. We intend to follow home country law in determining whether shareholder approval is required.

The audited consolidated financial statements as required under Item 18 are attached hereto starting on page F-1 of this Annual Report. The audit report of PricewaterhouseCoopers LLP, independent registered public accounting firm, is included herein preceding the audited consolidated financial statements.

~~List all exhibits filed as part of the registration statement or annual report, including exhibits incorporated by reference.~~

The audited Consolidated financial statements as required under Item 18 are attached hereto starting on page F-1 of this Annual Report. The audit report of PricewaterhouseCoopers LLP, independent registered public accounting firm, is included herein preceding the audited Consolidated financial statements.

~~† This document has been identified as a management contract or compensatory plan or arrangement.~~

Certain agreements filed as exhibits to this report contain representations and warranties that the parties thereto made to each other. These representations and warranties have been made solely for the benefit of the other parties to such agreements and may have been qualified by certain information that has been disclosed to the other parties to such agreements and that may not be reflected in such agreements. In addition, these representations and warranties may be intended as a way of allocating risks among parties if the statements contained therein prove to be incorrect, rather than as actual statements of fact. Accordingly, there can be no reliance on any such representations and warranties as characterizations of the actual state of facts. Moreover, information concerning the subject matter of any such representations and warranties may have changed since the date of such agreements.

~~The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.~~

† This document has been identified as a management contract or compensatory plan or arrangement.

Certain agreements filed as exhibits to this Annual Report contain representations and warranties that the parties thereto made to each other. These representations and warranties have been made solely for the benefit of the other parties to such agreements and may have been qualified by certain information that has been disclosed to the other parties to such agreements and that may not be reflected in such agreements. In addition, these representations and warranties may be intended as a way of allocating risks among parties if the statements contained therein prove to be incorrect, rather than as actual statements of fact. Accordingly, there can be no reliance on any such representations and warranties as characterizations of the actual state of facts. Moreover, information concerning the subject matter of any such representations and warranties may have changed since the date of such agreements.

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statement of financial position of Farfetch Limited and its subsidiaries (the “Group”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, comprehensive (loss)/income, changes in equity/(deficit) and cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Group’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Group as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Group did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because a material weakness in internal control over financial reporting existed as of that date related to the implementation and consistent operation of internal control over financial reporting at the New Guards business.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness referred to above is described in Management’s Report on Internal Control over Financial Reporting appearing under Item 15. We considered this material weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2021 consolidated financial statements, and our opinion regarding the effectiveness of the Group’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

The Group’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in management's report referred to above. Our responsibility is to express opinions on the Group’s consolidated financial statements and on the Group’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our

audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded JBUX Limited, Allure Systems Corp. and Upteam Corporation Limited from its assessment of internal control over financial reporting as of December 31, 2021, because they were acquired by the Group in purchase business combinations during 2021. Management has also excluded Alanui srl from its assessment of internal control over financial reporting as of December 31, 2021 as it was acquired by the Group in a step acquisition during 2021. We have also excluded JBUX Limited, Allure Systems Corp., Upteam Corporation Limited and Alanui srl from our audit of internal control over financial reporting. JBUX Limited, Allure Systems Corp., Upteam Corporation Limited and Alanui srl are subsidiaries whose total assets and total revenue excluded from management’s assessment and our audit of internal control over financial reporting collectively represent less than 1% of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Accounting for the Strategic Investment in Farfetch China and Acquisition of Palm Angels

As described in Notes 3, 16, 28 and 33 to the consolidated financial statements, the Group signed an agreement to enter into a strategic arrangement with Taobao China Holding Limited (“Alibaba”) and Richemont International Holding S.A (“Richemont”) in 2021. As part of the arrangement, Alibaba and Richemont invested $500 million in return for a combined 25% stake in Farfetch China Holdings Limited and its subsidiaries. In 2021, the Group also completed the acquisition of 60% of Palm Angels S.r.l. for consideration of $131 million. As part of this agreement and this acquisition, the Group entered into option agreements over the non-controlling interests of 25% and 40% of the share capital of Farfetch China Holdings Limited and Palm Angels S.r.l., respectively. These option agreements are separately recognised as liabilities with a combined value of $648 million as of December 31, 2021. The valuation of these option agreements involves significant management assumptions. Management applied significant judgment in accounting for this agreement and this acquisition, which involved developing its accounting policies for (i) accounting for a non-controlling interest which is created through a transaction other than a business combination; and (ii) accounting for the initial recognition of a non-controlling interest arising from an asset

acquisition using the proportionate share method. Management also applied significant judgment in estimating the present value of the option agreements, which involved the use of complex modeling and significant assumptions with respect to the (i) risk free rate; (ii) credit spread and (iii) revenue compound annual growth rate.

The principal considerations for our determination that the accounting for the strategic investment in Farfetch China Holdings Limited and acquisition of Palm Angels S.r.l. is a critical audit matter are there was significant judgment and estimation by management in determining the appropriate accounting for the transactions and the methodology and valuation models to be used for each option agreement, including the related assumptions. This in turn resulted in a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate the accounting for the transactions and the methodology and valuation models to be used for each option agreement, including significant assumptions, specifically the risk free rate, credit spread and revenue compound annual growth rate.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, reading the related agreements; evaluating management’s assessment of the accounting for the strategic investment in Farfetch China Holdings Limited as a partial disposal of a subsidiary without a loss of control and the acquisition of 60% of Palm Angels S.r.l. as an asset acquisition; assessing the appropriateness of the methodologies used in the valuation models; agreeing relevant data used in the models to the executed agreements as applicable; assessing the reasonableness of significant assumptions used by management in the valuation models; and evaluating the sufficiency of the Group’s disclosures in the consolidated financial statements. Professionals with specialized skill and knowledge were used in assessing the appropriateness of the valuation models and the reasonableness of significant assumptions, including the risk free rate and expected volatility. In assessing the reasonableness of significant assumptions used by management, professionals with specialized skill and knowledge developed an independent range to value each option agreement and compared management’s estimate to the independently developed ranges.

As described in Notes 3, 23 and 28 to the consolidated financial statements, the Group issued convertible senior notes amounting to $250.0 million, $400.0 million and $600.0 million on February 5, 2020, April 30, 2020 and November 17, 2020, respectively. Each arrangement contains certain conversion options which are bifurcated from the notes and separately valued. The embedded derivative liabilities are collectively valued at $872 million as of December 31, 2021. Management applied judgment in estimating the fair value of these embedded derivatives, which involved the use of complex modeling and significant assumptions with respect to the risk free rate and expected volatility.

The principal considerations for our determination that the valuation of the embedded derivative is a critical audit matter are there was significant judgment and estimation by management in determining the methodology and valuation models to be used for each instrument, including the related assumptions. This in turn resulted in a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate the methodology and valuation models and the significant assumptions, specifically the risk free rate and expected volatility.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, assessing the appropriateness of the methodologies used in the valuation models; agreeing relevant data used in the models to the executed agreements as applicable; and assessing the reasonableness of significant assumptions used by management. Professionals with specialized skill and knowledge were used in assessing the appropriateness of the valuation models and the reasonableness of significant assumptions, including the risk free rate and expected volatility. In assessing the reasonableness of significant assumptions used by management, professionals with specialized skill and knowledge developed an independent range to value each embedded derivative and compared management’s estimate to the independently developed ranges.

As described in Notes 3 and 16 to the consolidated financial statements, the Group capitalizes costs relating to the development of internal software and the Farfetch websites. Management applied judgment in assessing whether the

assets met the required criteria for initial capitalization, including the assessment of expected future benefits from the projects to be capitalized, technical feasibility and commercial viability. The value of development costs capitalized during the year ended December 31, 2021 was $119 million.

The principal considerations for our determination that capitalized development costs is a critical audit matter are there was significant judgment by management in assessing whether the assets met the required criteria for initial capitalization, including assessment of expected future benefits from the projects to be capitalized, technical feasibility and commercial viability. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate management’s judgment in assessing the capitalization criteria.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, (i) assessing whether the capitalization criteria, including expected future benefits and feasibility and viability of projects, had been met through review of project budgets and roadmaps, consideration of historic unsuccessful projects, corroborating information with the IT project leads and employees working on the projects, and interviewing project supervisors and development personnel on the nature of each project and the time spent on projects by development team members; and (ii) testing directly attributable costs to bring the asset to the condition necessary for it to be capable of operating in the manner intended by management.

⁽¹⁾ Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

The accompanying notes are an integral part of these Consolidated financial statements

⁽¹⁾ Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

The accompanying notes are an integral part of these Consolidated financial statements

⁽¹⁾ Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

The accompanying notes are an integral part of these Consolidated financial statements

⁽¹⁾ Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

The accompanying notes are an integral part of these Consolidated financial statements

Farfetch Limited (the “Company”) is an exempted company incorporated with limited liability under the Companies Act (as amended) of the Cayman Islands, as amended and restated from time to time (the “Companies Act”). The principal place of business is The Bower, 211 Old Street, London, EC1V 9NR, United Kingdom. Farfetch Limited and its subsidiary undertakings (the “Group”) is principally engaged in the following:

•

providing an online marketplace at Farfetch.com (and related suffixes) as well as the Farfetch app for retailers and brands to be able to offer their products for sale to the public (including associated services such as ‘production’, logistics, customer services and payment processing);

•

web design, build, development and ~~development~~retail distribution for retailers and brands to enable them to offer their products to the public; ~~and~~

~~operation of~~

•

operating the ~~Browns London fashion boutique.~~

~~Summary of impact of Group restructure and Initial Public Offering (IPO)~~

~~On September 21, 2018, the Company commenced trading its shares on the~~company-owned stores (Browns, New York Stock Exchange. In preparation for this Initial Public Offering, “IPO” the Group was restructured. The steps to restructure the Group had the effect of Farfetch Limited being inserted above Farfetch.com Limited as the holder of the Farfetch.com Limited share capital. The reorganization transactions have been treated as a capital reorganization. In accordance with International Financial Reporting Standards, historic earnings per share calculationsGuards, Stadium Goods) and the ~~balance sheet as of December 31, 2017 have been restated retrospectively to reflect the capital structure of the new parent rather than that of the former parent, Farfetch.com Limited.~~branded (Off-White, Ambush) stores;

The Group is presented as if Farfetch Limited has always owned Farfetch.com Limited. The comparative statement of operations and statement of financial position are presented in line with the previously presented Farfetch.com Limited position. The comparative and current period consolidated reserves of the Group are adjusted to reflect the statutory share capital and share premium of Farfetch Limited. A merger reserve arose as

•

providing a ~~result of the restructuring of the Group and represents the difference between the equity of the acquired company (Farfetch.com Limited) and the investment by the acquiring company (Farfetch Limited).~~

The steps taken to restructure the Group were as follows. On September 18, 2018, all holders of warrants over Farfetch.com shares, except a holder of 189,995 warrants that remains outstanding, exercised their warrants into the applicable class of shares and the outstanding shares of Farfetch.com and were exchanged for shares of Farfetch Limited with equivalent rights. Following the exchange, the £0.10 British Pound Sterling dominated ordinary shares and the preference shares held by the shareholders of Farfetch Limited were converted into United States Dollar denominated $0.20 ordinary shares of Farfetch Limited and subsequently exchanged, one for five, for $0.04 Class A ordinary shares and Class B ordinary shares, as applicable. Outstanding options of Farfetch.com were released in exchangeplatform for the ~~grant~~development of ~~options with equivalent rights over Class A ordinary shares~~global luxury fashion brands.

Effects of the COVID-19 pandemic

Since early 2020, the world has been, and continues to be, impacted by COVID-19 and its variants. The extent of these impacts on our financial and operating results will be dictated by the length of time that the pandemic and the related counter-measures continue for, in addition to individuals’ and companies’ risk tolerance regarding health matters going forward.

The impact of the COVID-19 pandemic and actions taken in response to it had varying effects on our 2020 operating results. Since the onset of the pandemic, there has been an acceleration in the shift of consumer demand to online, which the Group has partially benefited from. This has continued during the year ended December 31, 2021. In 2020, this also resulted in Digital Platform revenue growth. This growth in revenue was partially offset by the performance in Brand Platform revenue which has been impacted by Brand Platform customers having to close at various times during 2020.

In light of the COVID-19 pandemic, the Group has considered the impact on the Consolidated financial statements and where appropriate any impacts have been reflected in the financial statements.

These financial statements were authorized for issue by the Board on March 4, 2022.

2.	Significant accounting policies

2.1.	Basis of ~~Farfetch Limited~~preparation ~~These financial statements were authorized for issue on March~~

The Consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These Consolidated financial statements have been prepared under the historical cost convention, except as modified by the revaluation of certain financial assets and financial liabilities at fair value through profit and loss and fair value through other comprehensive income.

The Directors have made an assessment of the Group’s ability to continue in operational existence for the foreseeable future and are satisfied that it is appropriate to continue to adopt the going concern basis of accounting in preparing the Consolidated financial statements.

The Consolidated financial statements are presented in U.S. dollars (“U.S. dollars” or “USD” or “$”). All values are rounded to the nearest 1,000 dollars, except where indicated. The tables in these notes are shown in USD thousands, except where indicated.

Effective January 1, 2019, we adopted the requirements of IFRS 16 - Leases (“IFRS 16”).

F-11

Notes to the Consolidated financial statements (continued)

Correction of a misstatement in calculating interest expense

During the preparation of the Group’s condensed Consolidated financial statements for the three months ended March 31, 2021, an overstatement of $17.4 million was identified in relation to the accounting for interest expense reported in our results for the year ended December 31, 2020, relating to a calculation error.

As compared to what was previously reported, the correction to reduce the Finance costs line item by $17.4 million also results in a $17.4 million decrease in loss after tax, and a decrease in the basic and diluted loss per share of $0.06 for the annual period ended December 31, 2020. The correction also resulted in the reduction by $17.4 million of the Non-current borrowings line in the Consolidated statement of financial position on December 31, 2020. The results for the year ended December 31, 2019 were not impacted by this correction.

This revision had no impact on gross profit or operating loss in the periods mentioned, and had no impact on total assets, total deficit and liabilities, or total cash flows in the periods mentioned. The Company evaluated these amounts and concluded that while they are immaterial to reissue the previously reported Consolidated financial statements, they should be corrected by revising the previously reported financial information when such amounts are presented for comparative purposes.

Correction of a misstatement in calculating share-based payment expense

During the preparation of the Group’s Consolidated financial statements for the year ended December 31, 2021, an understatement of $19.8 million was identified in relation to the accounting for share-based compensation expense reported in our results for the year ended December 31, 2019.

This non-cash equity-based compensation error related to the incorrect timing of recognition of expense for certain awards granted to Stadium Goods and NGG employees when those businesses were acquired. The expense was initially recognized on a straight-line attribution basis. Upon further review, management determined that the non-cash equity-based compensation expense for such awards should have been recognized on a tranche-by-tranche basis ("graded vesting model") because the awards can only be exercised at certain periods if the employee remains employed with the Company. The impact of correcting the attribution shifts the non-cash equity-based compensation expense to earlier reporting periods, while the total cumulative expense expected to be recognized over the service period will remain the same.

As compared to what was previously reported, the correction to increase share-based compensation expenses recorded within the Selling, general and administrative expenses line item by $19.8 million also results in a $19.8 million increase in operating loss, loss after tax, and an increase in the basic and diluted loss per share of $0.06 for the annual period ended December 31, 2019. The correction also resulted in offsetting increases by $19.8 million of both Other reserves and Accumulated losses within equity within the Consolidated statement of financial position on December 31, 2019. The impacts on the results for the years ended December 31, 2021 and 2020 were insignificant individually and in the aggregate for adjustment.

This revision had no impact on gross profit, total assets, total equity and liabilities, or total cash flows as of and for the years ended December 31, 2021, 2020, and 2019. The Company evaluated these amounts and concluded that while they are immaterial to reissue the previously reported Consolidated financial statements, they should be corrected by revising the previously reported financial information when such amounts are presented for comparative purposes.

The error has been corrected by revising each of the affected financial statement line items for the 2019 comparative periods presented.

F-12

Notes to the Consolidated financial statements (continued)

The tables below detail the impact of both revisions on the impacted financial statement line items for the comparative periods presented.

Year ended December 31, 2020

The impact on our Consolidated statement of financial position was as follows:

2.

December 31,
2020
(as previously
reported)

Share
Based
Payment
expense
Adjustment

Interest
expense
Adjustment

December 31,
2020 (revised)

Non-current liabilities

Borrowings

$
635,237

$
-

$
(17,448
)

$
617,789

Total non-current liabilities

4,488,214

-

(17,448
)

4,470,766

Total liabilities

5,266,961

-

(17,448
)

5,249,513

Other reserves

447,753

19,812

-

467,565

Accumulated losses

(4,010,756
)

(19,812
)

17,448

(4,013,120
)
Total deficit

(1,676,090
)

-

17,448

(1,658,642
)
Total deficit and liabilities

$
3,590,871

$
-

$
-

$
3,590,871

The impact on our Consolidated statement of operations was as follows:

~~Significant accounting policies~~

~~2.1.~~

~~Basis of preparation~~

~~The consolidated~~

Year ended December
31,
2020
(as previously
reported)

Share
Based
Payment
expense
Adjustment

Interest
expense
Adjustment

Year ended December
31,
2020 (revised)

Finance costs

$
(108,742
)

$
-

$
17,448

$
(91,294
)
Loss before tax

(3,347,505
)

-

17,448

(3,330,057
)
Income tax benefit

14,434

-

-

14,434

Loss after tax

$
(3,333,071
)

$
-

$
17,448

$
(3,315,623
)
(Loss)/profit after tax attributable to:

Equity holders of the parent

(3,350,619
)

-

17,448

(3,333,171
)
Non-controlling interests

$
17,548

$
-

$
-

$
17,548

The impact on our Basic and Diluted earnings per share was as follows:

	Year ended December 31, 2020 (as previously reported)			Share Based Payment expense Adjustment		Interest expense Adjustment		Year ended December 31, 2020 (revised)
Loss per share attributable to owners of the parent
Basic		(9.75	)		-		0.06		(9.69	)
Diluted		(9.75	)		-		0.06		(9.69	)

F-13

Notes to the Consolidated financial statements (continued)

Year ended December 31, 2019

The impact on our Consolidated statement of financial position was as follows:

	December 31, 2019 (as previously reported)			Share based Payment expense Adjustment			December 31, 2019 (revised)
Total liabilities	$	890,047		$	-		$	890,047
Other reserves		349,463			19,812			369,275
Accumulated losses		(826,135	)		(19,812	)		(845,947	)
Total equity		1,337,832						1,337,832
Total equity and liabilities	$	2,227,879		$	-		$	2,227,879

The impact on our Consolidated statement of operations was as follows:

	Year ended December 31, 2019 (as previously reported)			Share based Payment expense Adjustment			Year ended December 31, 2019 (revised)
Selling, general and administrative expenses	$	(869,609	)	$	(19,812	)	$	(889,421	)
Loss before tax		(372,526	)		(19,812	)		(392,338	)
Income tax benefit		(1,162	)		-			(1,162	)
Loss after tax	$	(373,688	)	$	(19,812	)	$	(393,500	)
(Loss)/profit after tax attributable to:
Equity holders of the parent		(385,297	)		(19,812	)		(405,109	)
Non-controlling interests	$	11,609		$	-		$	11,609

The impact on our Basic and Diluted earnings per share was as follows:

	Year ended December 31, 2019 (as previously reported)			Share based Payment expense Adjustment			Year ended December 31, 2019 (revised)
Loss per share attributable to owners of the parent
Basic		(1.21	)		(0.06	)		(1.27	)
Diluted		(1.21	)		(0.06	)		(1.27	)

2.2.

Basis of ~~the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).~~consolidation

~~The consolidated financial statements have been prepared under the historical cost convention unless otherwise stated.~~

~~F-7~~

~~Notes to the consolidated financial statements (continued)~~

The consolidated financial statements are presented in United States dollars (“United States Dollars” or “USD” or “$”). All values are rounded to the nearest thousand dollars, except where indicated. The tables in these notes are shown in USD thousands, except where indicated.

~~The consolidated financial statements provide comparative information in respect of the previous periods.~~

~~2.2.~~

~~Basis of consolidation~~

~~The consolidated~~

The Consolidated financial statements comprise the Consolidated financial statements of the Group and its subsidiaries. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

•

The contractual arrangement with the other vote holders of the investee;

•

Rights arising from other contractual arrangements; and

•

The Group’s voting rights and potential voting rights.

F-14

Notes to the Consolidated financial statements (continued)

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Consolidated financial statements from the date the Group gains control until the date control ceases. Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group and to the non-controlling interests. When necessary, adjustments are made to the consolidated financial statement of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group and to the non-controlling interests. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

~~2.3.~~

~~Summary of significant accounting policies~~

a)	~~Business combinations and goodwill~~

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Group measures the non-controlling interests in the acquiree at the proportionate share of the acquiree’s identifiable net assets.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.

Any contingent consideration to be transferred by the Group is recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and is measured at fair value with changes in fair value recognized in profit or loss.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests over the net identifiable assets acquired and liabilities assumed which are measured at fair value at the date of acquisition.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated

~~F-8~~

~~Notes to the consolidated financial statements (continued)~~

to each of the Group’s cash-generating units (“CGU”) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Annual impairment testing is performed at every reporting date being December 31. Refer to note 2.3 m) for the Group’s policy on the impairment of non-financial assets.

b)	~~Investment in associates~~

The Group recognizes an associate when the Group has a significant influence over that entity. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies. The Group’s investment in its associate, Farfetch Finance Limited, is accounted for using the equity method.

Under the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other comprehensive income of the investee in other comprehensive income.

c)2.3.

Summary of significant accounting policies

a)	Business combinations

When the Group acquires a business, it assesses the financial assets and liabilities assumed for classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.

Any contingent consideration to be transferred by the Group is recognized at fair value at the acquisition date and is subsequently measured at fair value with changes in fair value recognized in profit or loss.

Refer to Note 5, Business Combinations for additional information.

b)	Investment in associates

The Group recognizes an investment in associate when the Group has a significant influence over that entity. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies. The Group’s investments in its associates, Farfetch Finance Limited and Alanui S.r.l (“Alanui”) (up until March 1, 2021 – refer to Note 5. Business Combinations for additional information), are accounted for using the equity method.

c)	Current versus non-current classification

The Group presents assets and liabilities in the Consolidated statement of financial position based on current/non-current classification.

An asset is current when it is:

•

Expected to be realized or intended to be sold or consumed in the normal operating cycle;

•

Held primarily for the purpose of trading;

•

Expected to be realized within twelve months after the reporting period; or

•

Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

F-15

Notes to the Consolidated financial statements (continued)

All other assets are classified as non-current.

A liability is current when:

•

It is expected to be settled in the normal operating cycle;

•

It is held primarily for the purpose of trading;

•

It is due to be settled within twelve months after the reporting period; or

•

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current.

~~The Group classifies all other liabilities as non-current.~~

d)	Fair value measurement

This section outlines the Group policies applicable to financial instruments that are recognized and measured at fair value in the Consolidated financial statements.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

•

In the principal market for the asset or liability; or

•

In the absence of a principal market, in the most advantageous market for the asset or liability.

~~F-9~~

~~Notes to the consolidated financial statements (continued)~~

~~The principal or the most advantageous market must be accessible by the Group.~~

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

~~The Group uses valuation techniques that are appropriate~~

The principal or the most advantageous market must be accessible by the Group.

The Group uses valuation techniques that are applicable in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the Consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

•

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

•

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

•

Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

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

F-16

Notes to the Consolidated financial statements (continued)

e)	Revenue recognition

Revenue is recognized in accordance with the five-step model under IFRS 15:

identifying the contracts with customers;

identifying the separate performance obligations;

determining the transaction price;

allocating the transaction price to the ~~fair value measurement as a whole) at the end of each reporting period.~~separate performance obligations; and

e)	~~Revenue recognition~~

~~Revenue is recognized in accordance with the five-step model under IFRS 15, which was early adopted by the Group on January 1, 2017 on a fully retrospective basis:~~

~~identifying the contracts with customers;~~

~~identifying the separate performance obligations;~~

~~determining the transaction price;~~

~~allocating the transaction price to the separate performance obligations; and~~

recognizing revenue when each ~~performance obligation is satisfied.~~

~~Retailing of goods~~

~~Revenue, where the Group acts as a principal, is recognized when the~~ performance obligation is satisfied which is when the goods are received by the customer. Included within sales of goods is a provision for expected returns, discounts and rebates. Where these are not known, the Group uses historical data and patterns to calculate an estimate.satisfied.

Retailing of goods

Revenue, where the Group acts as a principal, is recognized when the performance obligation is satisfied which is when the goods are received by the consumer. Included within sales of goods is a provision for expected returns, discounts and rebates. Where these are not known, the Group uses historical data and patterns to calculate an estimate.

Rendering of services

The Group primarily acts as a commercial intermediary between sellers, being the brands and retailers, and end consumers and earns a commission for this service.

For these arrangements, the sellers determine the transaction price of the goods sold on the website, being the purchase price paid by the consumer, with the Group acting as an agent for the sellers and the related revenue is recognized on a net basis. The Group also charges fees to sellers for activities related to providing this service, such as packaging, credit card processing, settlement of duties, and other transaction processing activities. These activities are not considered separate promises to the consumer, and the related fees are therefore recognized concurrently with commissions at the time the performance obligation to facilitate the transaction between the seller and end consumer is satisfied, which is when the goods are dispatched to the end consumer by the seller. A provision is made for commissions that would be refunded if the end consumer returns the goods, and the Group uses historical data and patterns to estimate its return provision. There are no significant payment terms, with the Group taking payment in full from the consumer’s chosen payment method at the time the goods are ready for dispatch by the seller.

The Group also provides delivery services to end consumers, with the Group setting the transaction price, being the price paid by the consumer for goods purchased on its platform. For these services, the Group acts as the principal and recognizes as revenue amounts charged to end consumers net of any promotional incentives and discounts. Revenue for these services is recognized on delivery of goods to the end consumer, which represents the point in time at which the Group’s performance obligation is satisfied. No provision for returns is made as delivery revenue is not subject to refund. Promotional incentives, which include basket promo-code discounts, may periodically be offered to end consumers. These are treated as a deduction to revenue. Cash is collected by the Group from the end consumer using payment service providers. Within two months of the transactions, this is remitted to the relevant seller (net of commission and recoveries). Such amounts are presented within trade and other payables, unless the relevant seller is in a net receivable position and is therefore classified within trade and other receivables.

~~Rendering of services~~f)

~~The Group primarily acts as a commercial intermediary between sellers, being the brands and boutiques, and end consumers and earns a commission for this service.~~

~~F-10~~

~~Notes to the consolidated financial statements (continued)~~

and end consumer is satisfied, which is when the goods are dispatched to the end consumer by the seller. A provision is made for commissions that would be refunded if the end consumer returns the goods, and the Group uses historical data and patterns to estimate its return provision. There are no significant payment terms with the Group taking payment in full from the consumer’s chosen payment method at the time the goods are dispatched by the seller.

The Group also provides delivery services to end consumers, with the Group setting the transaction price, for goods purchased on its platform. For these services, the Group acts as the principal and recognizes as revenue amounts charged to end consumers net of any promotional incentives and discounts. Revenue for these services is recognized on delivery of goods to the end consumer, which represents the point in time at which the Group’s performance obligation is satisfied. No provision for returns is made as delivery revenue is not subject to refund. Promotional incentives, which include basket promo-code discounts, may periodically be offered to end consumers. These are treated as a deduction to revenue. Cash is collected by the Group from the end consumer using payment service providers. Within two months of the transactions, this is remitted to the relevant seller (net of commission and recoveries). Such amounts are presented within trade and other payables, unless the relevant seller is in a net receivable position and is therefore classified within trade and other receivables.

f)	~~Current and deferred tax~~

Current tax is the expected tax payable based on the taxable profit for the period, and the tax laws that have been enacted or substantively enacted by the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Current and deferred tax is charged or credited in the statement of operations, except when it relates to items charged or credited directly to equity, in which case the current or deferred tax is also recognized directly in equity.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates and in accordance with laws that are expected to apply in the period/jurisdiction when/where the liability is settled or the asset is realized.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities and where there is an intention to settle the balances on a net basis.

g)	~~Foreign currencies~~

The Group’s consolidated financial statements are presented in United States Dollars. For each entity the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. The functional currency of the Company is United States Dollars.

h)	~~Foreign currency translation~~

~~F-11~~

~~Notes to the consolidated financial statements (continued)~~

denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in OCI or profit or loss, respectively).

On consolidation, the assets and liabilities of foreign operations are translated into United States Dollars at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at average exchange rates. The exchange differences arising on translation for consolidation are recognized in OCI.

i)	~~Property, plant and equipment~~

Current tax is the expected tax payable based on the taxable profit for the period, and the tax laws that have been enacted or substantively enacted by the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where required on the basis of amounts expected to be paid to the tax authorities.

F-17

Notes to the Consolidated financial statements (continued)

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Consolidated financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that there are sufficient suitable deferred tax liabilities or future taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Current and deferred tax is charged or credited in the Consolidated statement of operations, except when it relates to items charged or credited directly to equity, in which case the current or deferred tax is also recognized directly in equity.

Uncertainty over Income Tax Treatment: The Group operates across a large number of jurisdictions and could be subject to periodic audit by local tax authorities on a range of tax matters during the normal course of business, including transfer pricing, indirect taxes and transaction related issues. Where the amount of tax payable or recoverable is uncertain, the Group establishes provisions based on either: the Group’s judgment of the most likely amount of the liability or recovery; or, when there is a wide range of possible outcomes, a probability weighted average approach.

g)	Foreign currencies

The Group’s Consolidated financial statements are presented in U.S. dollars. For each entity the Group determines the functional currency and items included in the Consolidated financial statements of each entity are measured using that functional currency. The functional currency of the Company is U.S. dollars.

h)	Foreign currency translation

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.

On consolidation, the assets and liabilities of foreign operations are translated into U.S. dollars at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at average exchange rates. The exchange differences arising on translation for consolidation are recognized in OCI.

F-18

Notes to the Consolidated financial statements (continued)

i)	Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. All repair and maintenance costs are recognized in profit or loss as incurred.

Items of property, plant and equipment are depreciated with an expense recognized in depreciation and amortization expense on a straight-line basis over their useful life.

The useful lives of these items are assessed as follows:

Leasehold improvements

~~Leasehold improvements~~	~~Over~~	Shorter of the life of the lease or useful life
Fixtures and fittings	Three to ten years
Motor vehicles	Four to eight years
Plant, machinery and equipment	Three to ten years
~~Motor vehicles~~	~~Four to eight years~~

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if necessary.

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

j)	Intangible assets
~~Computer equipment~~		~~Three to ten years~~

~~The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.~~

j)	~~Intangible assets~~

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of operations in the expense category that is consistent with the function of the intangible assets. Other than goodwill, there are no intangible assets with indefinite useful lives.

~~F-12~~

~~Notes to the consolidated financial statements (continued)~~

Goodwill is not amortized but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to the relevant CGUs which are tested for impairment annually. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Refer to note 2.3 m) for the Group’s policy on the impairment of non-financial assets.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the Consolidated statement of operations in the expense category that is consistent with the function of the intangible assets. Other than goodwill, there are 0 intangible assets with indefinite useful lives.

Goodwill is not amortized but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to the relevant Cash Generating Units (“CGUs”) which are tested for impairment annually. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Refer to Note 2.3 (n), Summary of significant accounting policies – Impairment of non-financial assets for the Group’s policy on the impairment of non-financial assets.

F-19

Notes to the Consolidated financial statements (continued)

Research and development costs

Research costs are expensed as incurred. Development expenditures on an individual project are recognized as an intangible asset when the Group can demonstrate:

•

The technical feasibility of completing the intangible asset so that the asset will be available for use or sale;

•

Its intention to complete and its ability and intention to use or sell the asset;

•

How the asset will generate future economic benefits;

•

The availability of resources to complete the asset; and

•

The ability to measure reliably the expenditure during development.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected future benefit. Amortization is recorded in administrative expenses. Development intangible assets under the course of construction are tested for impairment annually or more frequently if events or changes in circumstance indicate that they might be impaired. Once placed into service the asset is tested for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable.

Subsequent costs

Subsequent costs are only capitalized when there is an increase in the anticipated future economic benefit attributable to the assets in question. All other subsequent costs are recorded in the Consolidated statement of operations for the year in which they are incurred.

Acquisition of Palm Angels S.r.l (Palm Angels)

During the year ended December 31, 2021, the Group completed the acquisition of 60 percent of the ordinary share capital of Palm Angels for upfront cash and share consideration. As IFRS does not directly address the accounting for a partial acquisition of an asset, management have applied the principles of IFRS 3 - Business Combinations and IAS 38 - Intangible Assets in order to determine the accounting treatment for this transaction. Applying the requirements of IFRS 3 - Business Combinations, management have concluded that this transaction represents the acquisition of an asset rather than a business combination. Given the additional complexity of accounting for an asset that is 60 percent owned, management have applied both the principles of IFRS 3 - Business Combinations and IAS 38 - Intangible Assets in order to initially account for this asset purchase. On initial recognition, the asset has been recognized at cost along with a non-controlling interest in the Consolidated statement of financial position to represent the portion of the asset that the Group does not own. Subsequently, amortization of the asset will be recognized in the Consolidated statement of operations over its useful economic life. For further information, refer to Note 16, Intangible assets.

Amortization

Amortization is charged to depreciation and amortization expense on a straight-line basis over the estimated useful life of the intangible assets, from the time that the assets are available for use. The useful lives of these items are assessed as follows:

Development costs

~~Development costs~~	~~Three years~~
~~Brand, trademarks & domain names~~	~~Five to ten~~	Three years
Brand, trademarks & domain names	Five to sixteen years
Customer relationships	Three to five years

Acquired software

Three to ten years

F-20

Notes to the Consolidated financial statements (continued)

k)Leases

At the inception date of the lease (i.e. the date when the underlying asset is available for use), a lessee recognizes a liability for the present value of the lease payments payable over the lease term and a right of use asset that represents the right to use the underlying asset over the term of the lease. Right of use assets are measured at cost less accumulated depreciation and impairment losses, and are adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of initial direct costs incurred and lease payments made before the commencement date less incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the estimated useful life of the underlying asset and the lease term.

The Group does not recognize non-lease components separately from lease components for those classes of assets in which non-lease components are significant with respect to the total value of the arrangement.

Lease payments include fixed payments (including in-substance fixed payments) less any lease incentive receivable, variable lease payments that depend on an index or rate, and amounts expected to be paid as residual value guarantees. Similarly, the measurement of the lease liability includes the exercise price of a purchase option, if the lessee is reasonably certain to exercise that option, and payments of penalties for early termination, if the lease term reflects the lessee exercising such cancellation option. For the calculation of the present value of the lease payments, the Group uses the incremental borrowing rate at the start date of the lease. After the commencement date, the amount of the lease liabilities is increased to reflect the accrual of interest and reduced for the payment made. In addition to this, the carrying amount of the lease liability is remeasured in certain cases, such as changes in the lease term, changes in future lease payments resulting from a change in an index or rate used to determine those payments. The amount of such remeasurements is generally recognized against an adjustment to the right of use asset.

The standard includes two recognition exemptions: “low value” asset leases and short-term leases (the Group uses this exemption for all leases with a term of twelve months or less). In such cases, lease payments are recognized as an expense on a straight-line basis over the lease term.

The Group determines the lease term as the non-cancellable term of the contract, together with any period covered by an extension (or termination) option whose exercise is discretionary for the Group, if there is reasonable certainty that it will be exercised (or it will not be exercised). In its assessment, the Group considers all available information by asset class in the industry and evaluates all relevant factors (technology, regulation, competition, business model) that create an economic incentive to exercise or not a renewal/cancellation option. In particular, the Group takes into consideration the time horizon of the strategic planning of its operations. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control that may affect its ability to exercise (or not to exercise) an option to extend or terminate (for example, a change in business strategy).

Lessors classify all leases using the classification principles in IFRS 16 – Leases and distinguishing between operating and finance leases. Leases in which the lessor retains a significant portion of the risks and rewards of ownership of the leased asset are treated as operating leases. Otherwise, the lease is a finance lease.

l)	Inventories

Inventories are carried at the lower of cost and the net realizable value based on market performance, including the relative ancillary selling costs. The cost of inventories is calculated according to the First In, First Out (“FIFO”) method for each category of goods and includes purchase costs and costs incurred to bring the inventories to their present location and condition. In order to represent the value of inventories in the Consolidated statement of financial position, and to take into account impairment losses due to obsolete materials and slow inventory movement, obsolescence provisions have been directly deducted from the carrying amount of the inventories.

Financial instruments—initial recognition and the net realizable value based on market performance, including the relative ancillary selling costs. The cost of inventories, calculated according to the weighted average cost method for each category of goods, includes purchase costs and costs incurred to bring the inventories to their present location and condition. In order to represent the value of inventories appropriately in the statement of financial position, and to take into account impairment losses due to obsolete materials and slow inventory movement, obsolescence provisions have been directly deducted from the carrying amount of the inventories.

~~F-13~~

~~Notes to the consolidated financial statements (continued)~~

l)	~~Financial instruments—initial recognition and~~ subsequent measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

F-21

Notes to the Consolidated financial statements (continued)

Financial assets

The Groups financial assets comprise cash and cash equivalents, receivables and derivative financial instruments. Derivative financial instruments are comprised of forward exchange contracts and foreign exchange option contracts, which are measured at fair value through profit or loss, unless they are formally designated and measured as cash flow hedges.

Trade receivables are generally accounted for at amortized cost. The Group assesses on a forward-looking basis the expected credit losses associated with its trade receivables carried at amortized cost.

Financial assets measured at fair value through profit or loss are measured initially at fair value with transaction costs taken directly to the Consolidated statement of operations. Subsequently, the financial assets are remeasured, and gains and losses are recognized in the Consolidated statement of operations.

Financial assets measured at fair value through other comprehensive income are measured initially at fair value. Subsequently, the financial assets are remeasured, and gains and losses are recognized in other comprehensive income.

Financial liabilities

The Group’s financial liabilities comprise trade and other payables, interest bearing loans and borrowings, contingent consideration, derivative instruments on convertible notes (embedded derivatives), put and call option liabilities and foreign exchange contracts.

Trade and other payables are held at amortized cost.

All interest bearing loans and borrowings are initially recognized at fair value net of issue costs associated with the borrowing. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method.

Foreign exchange contracts are measured initially at fair value through profit or loss with transaction costs taken directly to the consolidated statement of operations, unless they are formally designated and measured as cash flow hedges. Subsequently, the fair values are remeasured and gains and losses from changes therein are recognized in the consolidated statement of operations.

Derivatives and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period.

Where the derivative is not designated as a cash-flow hedge, subsequent changes in the fair value are recognized in profit or loss.

The group designates certain derivatives as cash flow hedges to hedge particular risks associated with the cash flows of highly probable forecast transactions.

At inception of the hedge relationship, the Group documents the relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge transactions. Currently the Group has only designated cash flow hedges.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in the cash flow hedge reserve or time value reserve within equity. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

Any gains or losses held in the cash flow hedge reserve are recycled to the Consolidated statement of operations or inventory in the Consolidated statement of financial position when the related hedged item is recognized.

F-22

Notes to the Consolidated financial statements (continued)

If a hedge no longer meets the criteria for hedge accounting, or the forecast transaction is no longer highly probable, the cumulative gain or loss reported in equity is immediately reclassified to profit or loss.

Embedded derivatives

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and host contract are not carried at fair value, with unrealized gains or losses reported in the Consolidated statement of operations. Embedded derivatives are carried on the Consolidated statement of financial position at fair value from the inception of the host contract. Changes in fair value are recognized in the Consolidated statement of operations during the period in which they arise.

The Company’s convertible notes embedded derivatives are accounted as financial instruments at fair value through profit and loss (“FVTPL”). The embedded derivatives were recorded at fair value on the date of debt issuance. They are subsequently remeasured at fair value at each reporting date, and the changes in the fair value are recorded in the Consolidated statement of operations within gain/(loss) on items at held at fair value and remeasurements. The fair values of the embedded derivatives are determined using an option pricing model, using assumptions based on market conditions at the reporting date.

Put and call option liabilities

The Group has put and call option liabilities relating to the non-controlling interests arising from the transactions with Palm Angels and Chalhoub Group (“Chalhoub”) as well as the strategic arrangement with Alibaba Group Holding Limited (“Alibaba”) and Compagnie Financière Richemont SA (“Richemont”).

Put and call option liabilities are initially recognized at present value in other reserves within equity at inception of the option deed. Subsequently, at the end of the reporting period, the liabilities are revalued to present value with remeasurement gains and losses recognized in the Consolidated statement of operations.

Conversion of convertible notes

When the conversion of the Company’s convertible notes are settled through the issuance of shares in the Company, the carrying amount of the non-current borrowings and the fair value of the related embedded derivative at the conversion date are derecognized and reclassified to equity.

n)	Impairment of non-financial assets

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s, CGU’s or group of CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account.

The Group bases its impairment calculation on detailed budgets which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations cover a period of five to eight years, according to the nature and maturity of each CGU. Impairment losses of continuing

F-23

Notes to the Consolidated financial statements (continued)

operations, are recognized in the Consolidated statement of operations in expense categories consistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount, and reverses the previously recognized impairment loss to the extent the recoverable amount equals the carrying amount. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. On disposal of a CGU, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Goodwill and intangible assets are tested for impairment annually as at December 31 and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. If the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.

o)	Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

p)	Share-based payments

Employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration. The consideration is either equity or cash settled, depending on the scheme.

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using a valuation model. That cost is recognized, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The Consolidated statement of operations expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

No expense is recognized for awards that do not ultimately vest.

Cash-settled transactions

For cash-settled share-based payments, a liability is recognized for the goods or services acquired, measured initially at the fair value of the liability. At each balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognized in profit or loss for the year.

Employment related taxes

Where the Group has an obligation to settle employment related taxes on share-based payments received by employees, these are provided for based on the intrinsic value of the vested and un-vested share options at the end of the reporting period.

F-24

Notes to the Consolidated financial statements (continued)

q)	Cash and cash equivalents

For the purpose of presentation in the Consolidated statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.

The Group has classified amounts held in money market funds as cash equivalents because those funds are short term in nature, highly liquid, readily convertible to known amounts of cash, and subject to an insignificant risk of changes in value. The Group has concluded on this classification because each of these EU-regulated funds have the highest credit rating available.

From time to time the Group holds amounts of restricted cash. Restricted cash amounting to $2.3 million (2020: $nil) is classified outside of cash and cash equivalents within trade and other receivables. For further information, refer to Note 15, Trade and other receivables.

2.4.

Changes in accounting policies and derivative financial instruments. Derivative financial instruments are comprised of forward exchange contracts, which are measured at fair value through profit or loss, unless they are formally designated and measured as cash flow hedges.

Trade receivables are generally accounted for at amortized cost. The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost.

Financial assets through profit or loss are measured initially at fair value with transaction costs taken directly to the consolidated statement of operations. Subsequently, the financial assets are remeasured, and gains and losses are recognized in the consolidated statement of operations.

~~Financial liabilities~~

~~The Group’s financial liabilities comprise trade and other payables, interest bearing loans and borrowings, contingent consideration and foreign exchange contracts.~~

~~Trade and other payables are held at amortized cost.~~

Contingent consideration and foreign exchange contracts are measured initially at fair value through profit or loss with transaction costs taken directly to the consolidated statement of operations. Subsequently, the fair values are remeasured and gains and losses from changes therein are recognized in the consolidated statement of operations.

~~Derivatives and hedging activities~~

~~Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period.~~

~~Where the derivative is not designated as a hedge, subsequent changes in the fair value are recognized in profit or loss. Such derivatives are classified as a current asset or liability.~~

~~The group designates certain derivatives as cash flow hedges to hedge particular risks associated with the cash flows of recognized assets and liabilities and highly probable forecast transactions.~~

At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge transactions. Currently the Group has only designated cash flow hedges.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

~~When a hedging instrument matures, any gains or losses held in the cash flow hedge reserve are recycled to profit or loss.~~

~~F-14~~

~~Notes to the consolidated financial statements (continued)~~

If the a hedge no longer meets the criteria for hedge accounting, or the forecast transaction is no longer likely to occur, the cumulative gain or loss reported in equity is immediately reclassified to profit or loss.

m)	~~Impairment of non-financial assets~~

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

The Group bases its impairment calculation on detailed budgets which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations cover a period of five years. Impairment losses of continuing operations, are recognized in the statement of operations in expense categories consistent with the function of the impaired asset.

Goodwill and intangible assets are tested for impairment annually as at December 31 and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.

n)	~~Provisions~~

o)	~~Share based payments~~

Employees (including senior executives) of the Group receive remuneration in the form of share based payments, whereby employees render services as consideration. The consideration is either equity or cash settled depending on the scheme.

~~Equity-settled transactions~~

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognized, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The statement of operations expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

~~No expense is recognized for awards that do not ultimately vest.~~

~~F-15~~

~~Notes to the consolidated financial statements (continued)~~

~~Cash-settled transactions~~

~~Employment related taxes~~

Where the Group has an obligation to settle employment related taxes on share based payments received by employees, these are provided for based on the intrinsic value of the vested share options at the end of the reporting period.

p)	~~Cash and cash equivalents~~

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.

As of December 31, 2018 the Group’s cash and cash equivalents balance consists of $49,935,000 of cash held in banks (2017: $38,904,000) and $994,851,000 of cash equivalents (2017: $345,098,000). Cash and cash equivalent consists of $739,330,000 money market funds (2017: $274,971,000), $225,209,000 of short-term deposits (2017: $45,415,000) and $30,312,000 held by payment service providers ($24,712,000). The Group has classified amounts held in money market funds as cash equivalents because those funds are short term in nature, highly liquid, readily convertible to known amounts of cash, and subject to an insignificant risk of changes in value. The Group has determined this classification is appropriate because each of these EU-regulated funds are valued on a Constant Net Asset Value basis and have the highest credit rating available.

~~2.4.~~

~~Changes in accounting policies and~~ disclosures

~~Amendments to IFRSs that are mandatorily effective for the current year~~

In the year ended December 31, 2018, the Group has applied the below amendments to IFRSs issued by the IASB that are mandatorily effective for an accounting period that began on or after January 1, 2018. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

~~IFRS 9~~ ~~Financial Instruments~~

The Group has adopted IFRS 9 for the first time in the current year. The application of the standard has had no material impact on the Group’s consolidated financial statements. Due to the nature of the Group’s financial assets and liabilities there has been no material changes to the Group’s accounting policies as a result of adopting IFRS 9.


~~IFRS 2 (amendments)~~ ~~Classification and Measurement of Share-based Payment Transactions~~		The Group has adopted the amendments to IFRS 2 for the first time in the current year. The amendments address the measurement of cash-settled share-based payments, the classification of share-based payments settled net of tax withholdings, and the accounting for a modification of a share-based payment from cash-settled to equity-settled. The application of these amendments has had no impact on the Group’s consolidated

The accounting policies applied by the Group in these Consolidated financial statements are the same as those applied by the Group in its Consolidated financial statements for the year ended December 31, 2020, except for the accounting for the early conversion of convertible loan notes (refer to Note 9, Items held at fair value and remeasurements, Note 28, Financial instruments and financial risk management and Note 23, Borrowings respectively), the accounting for short term investments (refer to Note 21, Short-term investments), the accounting for the acquisition of Palm Angels (refer to Note 16, Intangible assets), the accounting for the investment by Alibaba and Richemont into Farfetch China Holdings Limited and its subsidiaries (refer to Note 31, Other reserves and Note 33, Non-controlling interests) and the adoption of new and amended standards as set out below. Given that the conversions in May, 2021, August 2021, October 2021 and the short-term investments are new transactions for the Group during the year ended December 31, 2021, the related accounting policies are new in the year ended December 31, 2021.

Amendments to IFRSs that are mandatorily effective for the current year

The Group applied the following new and revised IFRS standards from January 1, 2021:

• Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) (effective January 1, 2021)

“Interest Rate Benchmark Reform – Phase 2” includes amendments that address issues that might affect financial reporting after the reform of an interest rate benchmark, including its replacement with alternative benchmark rates. The changes relate to the modification of financial assets, financial liabilities and lease liabilities, specific hedge accounting requirements, and disclosure requirements applying IFRS 7 - Financial Instruments: Disclosures to accompany the amendments regarding modifications and hedge accounting. This amendment did not have a material impact on the Consolidated financial statements.

• COVID-19-Related Rent Concessions (Amendment to IFRS 16)

In May 2020, the IASB published “COVID-19-Related Rent Concessions (Amendment to IFRS 16)” amending the standard to provide lessees with an exemption from assessing whether a COVID-19 related rent concession is a lease modification. This amendment did not have a material impact on the Consolidated financial statements.

F-25

Notes to the Consolidated financial statements (continued)

New and revised IFRSs in issue but not yet effective

~~At the date of authorization of these financial statements, the Group has not applied the following new~~•Deferred Tax related to Assets and ~~revised IFRSs that have been issued but are not yet effective:~~

~~IFRS 16~~

~~Leases (effective January 1, 2019)~~

~~F-16~~

~~Notes~~Liabilities arising from a Single Transactions (Amendments to ~~the consolidated financial statements (continued)~~IAS 12)

IFRS 16 was issued in January 2016. It will result in almost all leases being recognized on the balance sheet by lessees as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases.

The Group has set up a project team which has reviewed all of the Group’s leasing arrangements over the last year in light of the new lease accounting rules in IFRS 16. The standard will affect primarily the accounting for the Group’s operating leases. The Group does not act as a lessor and therefore no impact is expected in relation to lessor accounting.

As at the reporting date, the Group has non-cancellable operating lease commitments of $103,034,000, see note 26. The Group expects to recognize right-of-use assets of approximately $75,908,000 on 1 January 2019, and lease liabilities of $77,385,000 (after adjustments for prepayments and accrued lease payments recognized as at 31 December 2018).

The Group will apply the standard from its mandatory adoption date of 1 January 2019. The Group intends to apply the modified retrospective transition approach and will not restate comparative amounts for the year prior to first-time adoption. All right-of-use assets will be measured at the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease expenses).

3.	~~Critical accounting judgments and key sources of estimation uncertainty~~

The preparation of the Group’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Below is a summary of the critical measurement processes and the key assumptions used by management in applying accounting policies with regard to the future, and which could have significant effects on carrying amounts stated in the consolidated financial statements, or for which there is a risk that significant adjustments may be made to the carrying amount of assets and liabilities in subsequent years.

~~Critical judgements in applying group accounting policies~~

~~Intangible assets—development costs~~

~~a) Cost capitalization~~

Amounts capitalized include the total cost of any external products or services and internal labor costs directly attributable to the development of the asset. Management judgment is involved in determining the appropriate internal costs to capitalize and the amounts involved.

~~b) Useful life~~

The useful life is determined by management at the time the asset is brought into its intended use and is regularly reviewed for appropriateness. The useful life represents management’s view of the expected period over which the Group will receive benefits.

~~Recognition of a deferred tax asset~~

The Group has accumulated significant unutilized trading tax losses (note 25). A deferred tax asset in respect of these losses can only be recognized when it is probable that future taxable profits will be available to utilize these against. No net deferred tax asset has been recognized in respect of these trading losses because there is uncertainty on the timing of future profitability in the near future. The Group reviews this assessment on an annual basis.

~~F-17~~

~~Notes to the consolidated financial statements (continued)~~

~~Key sources of estimation uncertainty~~

~~Impairment of non-financial assets~~

Impairment exists when the carrying value of an asset CGU exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow (“DCF”) model. The cash flows are derived from the budget for the next five years. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash inflows and outflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill recognized by the Group.

~~Share based payments~~

Estimating the fair value of share options requires the determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. The Group uses the Black Scholes Valuation Model to estimate the fair value of each grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield. These inputs, and the volatility assumption in particular, are considered to be highly complex and subjective. Because the Group’s shares have been publicly traded for a short period of time, it lacks sufficient company-specific historical and implied volatility information for its shares. Therefore, it estimates expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. .

~~Inventory provisions~~

Inventory is carried at the lower of cost and net realizable value which requires an estimation of the products’ future selling prices. Judgment is required in determining any write-down for slow-moving or obsolete inventory.

4.	~~Revenue~~

~~Revenue by type of good or service~~

In May 2021, the IASB issued an amendment to IAS 12, Income Taxes, requiring companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. The amendment is effective for annual reporting periods beginning on or after January 1, 2023, with early adoption permitted. We are currently evaluating the impact of adoption on our Consolidated financial statements.

2016

2017

2018

In-store revenue

12,668

15,434

15,595

Platform services revenue

180,937

296,350

488,995

Platform fulfilment revenue

48,511

74,182

97,794

242,116

385,966

602,384

~~In-store~~•

~~The Group has a single performance obligation in respect in-store revenue, which is~~COVID-19-Related Rent Concessions beyond June 30, 2021 (Amendment to IFRS 16)

In March 2021, the ~~sale of finished goods.~~

~~Platform services~~

~~Within platform services,~~IASB extended the Group primarily acts as a commercial intermediary between sellers and end consumers and earns a commission for this service. Commission revenue is recognized on a net basis in the statement of operations because the Group acts as an agent in these arrangements. Revenue in relation to these obligations within Platform Services Revenue which have not been satisfied at the endapplication period of the ~~reporting period is $1,651,000 (2017: 1,067,000, 2016: $330,000) and is expected~~practical expedient in IFRS 16 - Leases, to ~~be recognized in under 90 days from~~help lessees accounting for COVID 19-related rent concessions. We do not expect the ~~end~~impact of ~~the reporting period. In 2018, $1,067,000 (2017: $330,000, 2016: $165,000) of revenue deferred in 2017 (2016, 2015) was recognized as revenue.~~

~~F-18~~

~~Notes~~adoption to ~~the consolidated financial statements (continued)~~

In other arrangements, the Group sells its own goods on the platform where the Group is the principal, and therefore related revenues are recognized on a gross basis. Revenue on the sale of these goods is recognized when the goods are received by the end consumer. For finished goods that have been ordered on the platform but not yet delivered to the end consumer at the end of the reporting period, revenue is deferred until delivery. At December 31, 2018, these deferred amounts were $2,015,000 (2017: $1,135,000, 2016: $741,000), which the Group expects to recognize within 30 days of period end. In 2018, $1,135,000 (2017: $741,000, 2016: $nil) of revenue deferred in 2017 (2016, 2015) was recognized as revenue.

~~Platform service revenue also includes fees charged to sellers for other activities, such as packaging, credit card processing, and other transaction processing activities.~~

At checkout, end consumers are charged for delivery, if applicable, in addition to the price of goods in their basket (refer to Platform fulfilment below for a discussion of delivery services). The Group is responsible for the collection of cash from end consumers with payment typically taken in advance of completing its performance obligations.

~~In arrangements where the Group acts as an agent, cash collections are remitted net to the sellers generally within two months of collection.~~

~~Platform fulfilment~~

The Group also provides delivery services for products sold on the platform, for which revenues are recognized when the products are delivered to the end consumers. Revenues for delivery services are stated net of promotional incentives and discounts. Platform fulfilment revenue also includes fees charged to sellers for the settlement of duties which are recognized concurrently with commissions.

As discussed above, the promise with respect to delivery services is satisfied only when the goods are delivered. Within Platform Fulfilment Revenue, where the delivery performance obligation has not been satisfied at the end of the reporting period, revenue of $479,000 (2017: $436,000, 2016: $407,000) has been deferred and is expected to be recognized in under 90 days from the end of the reporting period. The transaction price for this performance obligation is the delivery costs charged to the consumer as described above. In 2018 $436,000 (2017: $407,000, 2016: $153,000) of revenue deferred in 2017 (2016, 2015) was recognized as revenue.

~~There were no receivables from contracts with customers (2016 and 2017: none).~~

~~Further detail can be found in note 2.3 e) to the financial statements.~~

5.	~~Business combinations~~

~~Acquisition in 2016~~

~~There were no business combinations in 2016.~~

~~Acquisitions in 2017~~

~~Fashion Concierge UK Limited~~

On October 31, 2017, Farfetch UK Limited, a wholly owned subsidiary of the Parent, acquired 100% of the issued share capital of Fashion Concierge UK Limited and its subsidiary F&C Fashion Concierge, LDA (“Fashion Concierge UK Limited”). The primary reason for the acquisition is for the Group to enhance its private client offering. Details of the purchase consideration, the net assets acquired and goodwill are as follows:

	~~2017~~
~~Purchase consideration~~
~~Ordinary shares issued~~		~~2,183~~
~~Total purchase consideration~~		~~2,183~~

~~F-19~~

~~Notes to the consolidated financial statements (continued)~~

The fair value of the 45,000 shares issued as 100% of the consideration paid for Fashion Concierge UK Limited ($2,183,000) was estimated based upon the Company’s most recent funding round as of the date of the acquisition.

~~Net cash inflow arising on acquisition~~

	~~2017~~
~~Cash and cash equivalent balances acquired~~		~~195~~
~~Cash consideration~~		-
~~Net cash inflow~~		~~195~~

~~The ordinary shares issued are non-cash investing activities~~

~~The Group recognized the following assets and liabilities upon the Fashion Concierge UK Limited acquisition:~~

	~~2017~~
~~Intangible assets~~		1
~~Tangible assets~~		4
~~Trade receivables~~		~~301~~
~~Cash and cash equivalents~~		~~195~~
~~Trade payables~~		~~(1,341~~	)
~~Total net identified liabilities acquired~~		~~(840~~	)
~~Goodwill~~		~~3,023~~
~~Total goodwill acquired~~		~~3,023~~
~~Net assets acquired~~		~~2,183~~

~~The goodwill represents the synergies that Farfetch is expected to generate.~~

~~Revenues and profit contribution~~

The results of operations for each of the acquisitions have been included in the Group’s consolidated statements of operations since the respective dates of acquisitions. Actual and pro forma revenue and results of operations for the acquisitions have not been presented because they do not have a material impact on our Consolidated financial statements.

•

Definition of Accounting Estimates (Amendments to IAS 8)

In February 2021, the IASB issued an amendment to IAS 8, Accounting Polices, Changes in Accounting Estimates and Errors, in order to clarify the difference between accounting policies and accounting estimates. The changes to IAS 8 focus entirely on accounting estimates and clarify the following:

The definition of a change in accounting estimates is replaced with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”.

Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty.

A change in accounting estimate that results from new information or new developments is not the correction of an error. In addition, the effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors.

A change in an accounting estimate may affect only the current period’s profit or loss, or the profit or loss of both the current period and future periods. The effect of the change relating to the ~~consolidated revenue~~current period is recognized as income or expense in the current period. The effect, if any, on future periods is recognized as income or expense in those future periods.

The amendment is effective for annual reporting periods beginning on or after January 1, 2023, with early adoption permitted. We are currently evaluating the impact of adoption on our Consolidated financial statements.

Certain other new accounting standards and interpretations issued by the IASB that are mandatorily effective for an accounting period that began on or after January 1, 2021 have not had and are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

3.	Critical accounting judgments and ~~results~~key sources of estimation uncertainty

Certain accounting policies are considered to be critical to the Group. An accounting policy is considered to be critical if, in the Directors’ judgement, its selection or application materially affects the Group’s financial position or results. The application of the Group’s accounting policies also requires the use of estimates and assumptions that affect the Group’s financial position or results.

F-26

Notes to the Consolidated financial statements (continued)

Below is a summary of areas in which estimation is applied primarily in the context of applying critical accounting judgements.

Critical judgements in applying group accounting policies

Intangible assets – development costs capitalization

Assessing whether assets meet the required criteria for initial capitalization requires judgement. This requires an assessment of the expected future benefits from the projects to be capitalized, technical feasibility and commercial viability. In particular, internally generated intangible assets must be assessed during the development phase to identify whether the Group has the ability and intention to complete the development successfully.

Determining the costs of assets to be capitalized also requires judgement. Specifically, judgement and estimation is required in determining the directly attributable costs to be allocated to the asset to enable the asset to be capable of operating in the manner intended by management.

Recognition of a deferred tax asset

The Group has accumulated significant unutilized trading tax losses (Note 26, Deferred tax). Deferred tax assets are recognized to the extent that it is probable that there are sufficient suitable deferred tax liabilities or future taxable profits will be available against which deductible temporary differences can be utilized. The key area of judgement in respect of deferred tax accounting is the assessment of the expected timing and manner of realization or settlement of the carrying amounts of assets and liabilities held at the reporting date. In particular, assessment is required of whether it is probable that there will be suitable future taxable profits against which any deferred tax assets can be utilized. The Group reviews this assessment on an annual basis.

Non-controlling interest – Strategic arrangement with Alibaba and Richemont

During the year ended December 31, 2021, the Group formally signed an agreement to enter into a strategic arrangement with Alibaba and Richemont. As part of the agreement, Alibaba and Richemont invested $500 million in return for a combined 25% stake in Farfetch China Holdings Ltd. Management have concluded that most appropriate method to measure the non-controlling interest created from this transaction is to use the proportionate net assets method. The difference between the investment proceeds received and the non-controlling interest valuation is recorded within other reserves. For further information, refer to Note 31, Other reserves and Note 33, Non-controlling interests.

Acquisition of Palm Angels S.r.l (“Palm Angels”)

During the year ended December 31, 2021, the Group completed the acquisition of 60 percent of the ordinary share capital of Palm Angels for cash and share consideration. Applying the requirements of IFRS 3 - Business Combinations, management have concluded that this transaction represents the acquisition of an asset rather than a business combination. As IFRS does not directly address the accounting for the initial recognition of non-controlling interest on an asset acquisition, management have applied the principles of IFRS 3 – Business Combinations and recognized the non-controlling interest using the proportionate share of net assets acquired method. For further information, refer to Note 31, Other reserves and Note 33, Non-controlling interests.

Identification of embedded derivative in borrowing arrangements

During the year ended December 31, 2020, the Group issued senior convertible notes for amounts of $250.0 million, $400.0 million and $600.0 million. Each arrangement contains certain conversion options that are bifurcated from the contract and valued separately. For each senior convertible note, there is significant judgement in determining the options to be bifurcated and valued separately, the valuation model and valuation methodology.

F-27

Notes to the Consolidated financial statements (continued)

Key sources of estimation uncertainty

Business combinations

We use our best estimates and assumptions to accurately assign fair value to the intangible assets acquired at the acquisition date. The estimation is primarily due to the judgmental nature of the inputs to the valuation models used to measure the fair value of these intangible asset, as well as the sensitivity of the respective fair values to the underlying significant assumptions. Where material, we use a discounted cash flow method of the income approach to measure the fair value of these intangible assets, and use specialists to assist us to develop certain estimates and assumptions. The significant estimates and assumptions used are in respect of (i) expected future revenue growth rates; (ii) anticipated operating margins; (iii) the useful lives of the acquired brand names; (iv) the discount rates to be applied to the estimated future cash flows; and (v) royalty rates used in estimating income savings.

During the measurement period, which may be up to one year from the date of acquisition, the Group may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. The Group continues to collect information and reevaluates these estimates and assumptions as deemed reasonable by management. The Group records any adjustments to these estimates and assumptions against goodwill provided they arise within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Consolidated statement of operations.

We also use our best estimates and assumptions to accurately account for the value of put options over non-controlling interests, when applicable.

For details of business combinations refer toNote 5, Business combinations.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset CGU or group of CGU exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow (“DCF”) model. The cash flows arederived from the budget and projections for the next five to eight years,according to the development and maturity of each CGU. The significant judgements and assumptions used in calculating the recoverable amount are (i) the expected future revenue growth rates, including the terminal growth rate (ii) the anticipated operating margin and (iii) the discount rates applied to the future cash flows of the CGUs. These estimates are most relevant to goodwill recognized by the Group.

See Note 16, Intangible assets for further details on the assumptions and associated sensitivities.

Fair value of financial instruments, including embedded derivatives

Where the fair value of financial assets and liabilities recorded in the financial statements cannot be derived from active markets, their fair value is determined using valuation techniques including the Black Scholes option pricing model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The judgements include considerations of inputs such as the risk-free rate and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

F-28

Notes to the Consolidated financial statements (continued)

When measuring the fair value of an asset or liability, the Group uses observable market data to the greatest extent possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

For more information, including further details on assumptions and associated sensitivities, please refer to Note 28, Financial instruments and financial risk management.

2021 CEO Performance-Based Restricted Stock Unit (“PSU”) Award

On May 24, 2021, the Board of Directors (the “Board”) of the Company unanimously approved the recommendation of the Compensation Committee of the board to grant a long-term PSU under the Company’s 2018 Farfetch Employee Equity Plan (the “2018 Plan”) to José Neves, the Company’s Founder, Chief Executive Officer and Chairman of the Board (the “CEO”). The grant is 8,440,000 PSUs, which only vest, if at all, based on the Company’s achievement of pre-determined increases in the Company’s stock price over an eight-year period. For further information on the stock price targets, refer to Note 29, Employee Benefit Obligations.

Given that the vesting of these awards are subject to the performance against a market-based performance measure, management have used the Monte Carlo simulation model to calculate the grant date fair value of this award in line with the requirements of IFRS 2 - Share-based Payment. The requirements of IFRS 2 - Share-based Payment requires management to estimate the length of the expected vesting period both for the purposes of calculating the fair value of the award but also to determine the period over which to recognize the expense in the Consolidated statement of operations. A separate vesting period was developed for each of the 8 tranches of PSUs using the Monte Carlo simulation and set of separate assumptions that were used to estimate the fair value of the PSUs. The expected vesting period equals the median time needed for the target stock price to be attained in the iterations of the Monte Carlo simulation in which the tranche of PSUs was earned. The iterations of the Monte Carlo simulation in which the target stock price was not attained have been excluded from the analysis of the expected vesting period.

Management have valued the related employers tax liability for these awards using the intrinsic value method. The intrinsic value method is calculated by reference to the number of awards expected to vest and the stock price at December 31, 2021. Given that the stock price at December 31, 2021 was $33.43 and the first target stock price is $75.00, management have concluded that as at the end of the reporting period the number of awards expected to vest is nil, and therefore the value of the employer tax liability is also $nil.

Revenue

Revenue by type of good or service (in thousands)

	2019		2020		2021
Digital Platform Services third-party revenue	$	496,040	$	637,568	$	845,941
Digital Platform Services first-party revenue		205,206		395,588		539,737
Digital Platform Services Revenue		701,246		1,033,156		1,385,678
Digital Platform Fulfilment Revenue		127,960		213,228		332,504
Brand Platform Revenue		164,210		390,014		467,505
In-Store Revenue		27,621		37,524		70,921
Total Revenue	$	1,021,037	$	1,673,922	$	2,256,608

F-29

Notes to the Consolidated financial statements (continued)

Digital Platform services

Digital Platform Services Revenue includes commissions on third-party sales and revenue from first-party sales.

Commission revenue is recognized on a net basis in the Consolidated statement of operations because the Group acts as an agent in these arrangements. The Group primarily acts as a commercial intermediary between sellers and end consumers and earns a commission for this service. Commission revenue is recognized when the goods are dispatched by the seller.

In first-party sales arrangements, the Group sells inventory directly purchased or created by the Group on the Digital Platform where the Group is the principal, and therefore related revenues are recognized on a gross basis. Revenue on the sale of these goods is recognized when the goods are received by the end consumer. For finished goods that have been ordered on the Digital Platform but not yet delivered to the end consumer at the end of the reporting period, revenue is deferred until delivery. At December 31, 2021, these deferred amounts were $1.1 million (2020: $1.0 million, 2019: $1.8 million), which the Group expects to recognize within thirty days of reporting period end. The Group expects to fulfill any remaining performance obligations outstanding at December 31, 2021 within the next ninety days from the reporting period. In 2021, $1 million (2020: $1.8 million, 2019: $2.0 million) of revenue deferred in 2020 (2019 and 2018 respectively) was recognized as revenue.

Digital Platform Service Revenue also includes fees charged to sellers for other activities, such as packaging, credit card processing and other transaction processing activities.

At checkout, end consumers are charged for delivery, if applicable, in addition to the price of goods in their basket (refer to Digital Platform Fulfilment Revenue below for a discussion of delivery services). The Group is responsible for the collection of cash from end consumers with payment typically taken in advance of completing its performance obligations.

In arrangements where the Group acts as an agent, cash collections are remitted net to the sellers generally within two months of collection.

Digital Platform Fulfilment Revenue

The Group provides delivery services for goods sold on the Digital Platform, for which revenues are recognized when the goods are delivered to the end consumers. Revenues for delivery services are stated net ofpromotional incentives and discounts. Digital Platform Fulfilment Revenue also includes fees charged to sellers for the settlement of duties which are recognized concurrently with commissions.

As discussed above, the promise with respect to delivery services is satisfied only when the goods are delivered to the end consumer. Within Digital Platform Fulfilment Revenue, where the delivery services performance obligation has not been satisfied by December 31, 2021, revenue of $7.7 million (2020: $5.4 million, 2019: $2.7 million) has been deferred and is expected to be recognized within ninety days of reporting period end. The transaction price for this performance obligation is the delivery costs charged to the consumer as described above. In 2021, $5.4 million (2020: $2.7 million, 2019: $0.5 million) of revenue deferred in 2020 (2019 and 2018 respectively) was recognized as revenue. As at December 31, 2021, there were 0 receivables from contracts with customers (2020 and 2019: NaNne).

Further detail can be found in Note 2.3 (e), Summary of significant accounting policies – Revenue recognition.

Brand Platform Revenue

Brand Platform Revenue includes revenue generated by New Guards operations less revenue from New Guards’: (i) owned e-commerce websites, (ii) direct-to-consumer channel via our Marketplaces and (iii) directly

F-30

Notes to the Consolidated financial statements (continued)

operated stores. Sales are made in the form of first-party sales arrangements to retailers, and therefore related revenues are recognized on a gross basis. Brand Platform revenue is recognized when the goods are transferred to the retailer. For finished goods that have been ordered and produced, but not yet delivered to the retailer at the end of the reporting period, revenue is deferred until delivery. At December 31, 2021, these deferred amounts were $6.5 million (2020: $2.1 million, 2019: $2.9 million). In 2021, $2.1 million (2020: $2.9 million, 2019: $nil) of revenue deferred in 2020 (2019 and 2018 respectively) was recognized as revenue.

In-store

The Group has a single performance obligation in respect to In-Store Revenue, which is the sale of finished goods.

5.	Business combinations

Acquisitions in 2021

Luxclusif

On December 6, 2021, Farfetch UK Limited, an indirect wholly owned subsidiary of Farfetch Limited, acquired 100% of the issued share capital of Upteam Corporation Limited (“Luxclusif”), and its 4 fully owned subsidiaries, together a Business to Business (“B2B”) technology-enabled seller of pre-owned luxury goods.

Purchase consideration of $26.8 million was comprised of $7.8 million of cash, $5.9 million of deferred cash or share consideration and $13.1 million of deferred share consideration based on the Farfetch Limited share price as at the acquisition date. The share consideration includes a service condition for certain members of the Luxclusif management team and has been accounted for as post combination remuneration. This did not form part of the purchase price allocation and is expensed.

The transaction is being treated as a business combination under IFRS 3 and the purchase price is subject to the finalization of completion accounts. This investment is part of the Group’s strategy of expanding into new categories and offerings. The primary reason for the acquisition was for the Group to further enhance the Farfetch Marketplace by continuing to invest in expanding the pre-owned offering.

Details of the purchase consideration, the assets acquired and goodwill are as follows (in thousands):

	2021
Cash	$	7,682
Deferred payments		135
Total cash consideration	$	7,817

	2021
Net cash outflow arising on acquisition
Cash and cash equivalent balances acquired	$	803
Cash consideration		(7,682	)
Net cash outflow	$	(6,879	)

F-31

Notes to the Consolidated financial statements (continued)

	2021
Development Costs	$	2,205
Customer relationships		1,611
Tangible assets		73
Net working capital		3,461
Net debt		(2,671	)
Deferred tax liability		(725	)
Total net identified assets acquired		3,954
Goodwill		3,863
Total net identified assets acquired and goodwill	$	7,817

Goodwill consists of expected synergies to be achieved by combining the operations of Luxclusif with the Group, as well as other intangible assets that do not qualify for separate recognition under IFRS 3. Goodwill is expected to be fully deductible for tax purposes. The Development costs and Customer relationships are amortized over three years and five years respectively.

Acquisition-related costs totaled $1.5 million and are included in Selling, general and administrative expenses. These costs were recorded in the year ending December 31, 2021.

Allure

On 20 December 2021, Farfetch US Holdings, Inc. acquired 100% of the issued share capital of Allure Systems Corp (“Allure US”) and its fully owned subsidiary, Allure Systems Research France (“Allure France”) (together, “Allure”). Allure was established in 2017 and uses artificial intelligence (“A.I.”) to create high-quality on-model images via 360 degrees renderings, allowing retailers and brands to scale quality imagery with automation.

Purchase consideration of $21.7 million comprised of deferred payments of $1.5 million, cash consideration of $15.9 million and share consideration of $4.4 million based on the Farfetch Limited share price at the acquisition date. There is 0 contingent consideration.

This investment is part of the Group’s strategy of accelerating the digitization of the global luxury industry. The primary reason for the acquisition was to provide an enhanced customer experience on Farfetch Marketplace and drive efficiency in our operational processes. The transaction has been accounted for as a business combination under IFRS 3 and the purchase price allocation is subject to finalization of completion accounts adjustments.

Details of the purchase consideration, the assets acquired and goodwill are as follows (in thousands):

	2021
Cash	$	15,858
Ordinary shares issued	$	4,380
Deferred payments		1,465
Total purchase consideration	$	21,703

	2021
Net cash outflow arising on acquisition
Cash and cash equivalent balances acquired	$	1,840
Cash consideration		(15,858	)
Net cash outflow	$	(14,018	)

F-32

Notes to the Consolidated financial statements (continued)

	2021
Development costs	$	5,412
Tangible assets		77
Net working capital		118
Net debt		(1,609	)
Deferred tax liability		(3,364	)
Total net identified assets acquired		634
Goodwill		21,069
Total net identified assets acquired and goodwill	$	21,703

Goodwill consists of expected synergies to be achieved by combining the operations of Allure with the Group, as well as other intangible assets that do not qualify for separate recognition under IFRS 3. Goodwill is expected to be deductible for tax purposes. Development costs are amortized over three years.

Acquisition-related costs totaled $0.6 million and are included in Selling, general and administrative expenses. These costs were recorded in the year ending December 31, 2021.

JBUX

On September 14, 2021, Farfetch UK Limited, an indirect wholly owned subsidiary of Farfetch Limited, acquired 100% of the issued share capital of JBUX Limited, which trades under the name “Jetti”, which provides marketplace technology to multi-vendor online businesses via a cloud-based Software as a Service (“SaaS”) platform. Purchase consideration comprised cash of $4.0 million as well as post combination remuneration including deferred payments based on employment conditions and earnout payments based on employment conditions and earnout targets. The latter two are accounted for as equity-settled share-based payments. This investment is part of the Group’s vertical integration strategy of accelerating the digitization of the global luxury industrybyacquiring and developing brands and the Group expect to benefit from Jetti's technology platform and employee skills. This acquisition will also allow the Group to enhance its marketplace offering.

The transaction was accounted for as a business combination under IFRS 3 and the purchase price allocation has been finalized. Farfetch UK Limited acquired a 100% shareholding and voting rights of the company from the previous owners.

Details of the cash paid, the assets acquired and goodwill are as follows (in thousands):

	2021
Cash	$	4,000
Total cash consideration	$	4,000

	2021
Net cash outflow arising on acquisition
Cash and cash equivalent balances acquired	$	48
Cash consideration		(4,000	)
Net cash outflow	$	(3,952	)

F-33

Notes to the Consolidated financial statements (continued)

	2021
Development costs	$	2,282
Tangible assets		2
Net working capital		(10	)
Net debt		(17	)
Deferred tax liability		(331	)
Total net identified assets acquired		1,926
Goodwill		2,074
Total net identified assets acquired and goodwill	$	4,000

Goodwill consists of expected synergies to be achieved by combining the operations of Jetti with the Group, as well as other intangible assets that do not qualify for separate recognition under IFRS 3. The full goodwill is expected to be deductible for tax purposes.

Acquisition-related expenses of $0.7 million were recorded in the year ending December 31, 2021, which are included in Selling, general and administrative costs.

Alanui

On March 16, 2021, New Guards Group Holding, a subsidiary of Farfetch Limited, completed the acquisition of Alanui, for $nil consideration. The acquisition and control was achieved through the removal of a shareholder veto from the agreement between New Guards and Alanui’s other shareholders that had previously prevented the Group from obtaining control of Alanui. New Guards owns 53% of the voting equity interests of Alanui. Alanui deals with wholesale and retail distribution, as well as sales through their e-commerce platform of apparel and accessories.

The Group expects continue to benefit from the Alanui brand bringing with them knowledge and creativity of original solutions for apparel and accessories collections. The transaction was accounted for as a business combination under IFRS 3 and the purchase price allocation has been finalized.

Details of the purchase consideration and the net assets acquired are as follows (in thousands):

	2021
Intangible assets	$	81
Brand name		7,279
Tangible assets		55
Other non-current assets		291
Inventory		830
Net working capital (excluding inventory)		(1,070	)
Non-current liabilities		(28	)
Deferred tax liability		(2,041	)
Total net identified assets acquired	$	5,397
Fair value of previously held equity interest		(2,963	)
Non-controlling interest		(2,434	)
Purchase consideration	$	-

The non-controlling interest acquired is measured at a value equal to the non-controlling interests’ share of the identifiable net assets acquired. Refer to Note 27, Related party disclosure, for further information on the control of Alanui.

F-34

Notes to the Consolidated financial statements (continued)

Revenue and profit contribution of the acquisition made in 2021

The results of operations of Luxclusif, Allure, Jetti and Alanui have been included in the Group’s consolidated Statement of operations since the date of acquisition. Actual and pro forma revenue and results of operations for the acquisition have not been presented because they do not have a material impact to the consolidated revenue and results of operations.

Acquisitions in 2020

Ambush

On February 5, 2020, New Guards, a subsidiary of Farfetch Limited, completed the acquisition of 70% of the outstanding shares of Ambush Inc., the jewelry and apparel line, for cash consideration of $12.1 million. The Group expects to benefit from Ambush’s brand bringing with them a strong passion for and knowledge of luxury jewelry and ready-to-wear apparel. This acquisition will also allow the Group to enhance its marketplace and stores offering. The transaction was accounted for as a business combination under IFRS 3, and the purchase price allocation was finalized in January 2021.

Details of the purchase consideration, the assets acquired, and goodwill are as follows (in thousands):

	2020
Cash consideration	$	12,142
Purchase consideration	$	12,142

	2020
Net cash outflow arising on acquisition
Cash and cash equivalent balances acquired	$	126
Cash consideration		(12,142	)
Net cash outflow	$	(12,016	)

	2020
Intangible assets	$	127
Brand name		4,699
Tangible assets		1,365
Right-of-use assets		858
Other non-current assets		720
Inventory		3,374
Net working capital (excluding inventory)		(2,175	)
Non-current liabilities		(5,224	)
Deferred tax liability		(1,311	)
Total net identified assets acquired		2,433
Goodwill		10,674
Total net identified assets acquired and goodwill		13,107
Non-controlling interest		(965	)
Net assets acquired	$	12,142

Goodwill consists of expected synergies to be achieved by combining the operations of Ambush with the Group, as well as other intangible assets that do not qualify for separate recognition under IFRS 3 (amended). Goodwill is expected to be deductible for tax purposes.

The non-controlling interest acquired is measured at a value equal to the non-controlling interests’ share of the identifiable net assets acquired.

Acquisition-related expenses of $0.7 million were recorded in 2020, which are included in Selling, general and administrative costs.

F-35

Notes to the Consolidated financial statements (continued)

Revenue and profit contribution of the acquisition made in 2020

The results of operations of Ambush have been included in the Group’s consolidated statement of operations since the date of acquisition. Actual and pro forma revenue and results of operations for the acquisition have not been presented because they do not have a material impact to the consolidated revenue and results of operations.

Acquisitions in 2019

Stadium Goods

On January 4, 2019, Farfetch Limited completed the acquisition of 100% of the outstanding shares of Stadium Goods, the sneaker and streetwear marketplace, for total consideration of $230.9 million. The Group expects to benefit from Stadium Goods’ brand, access to supply, and a team who have joined the Group, bringing with them a strong passion for, and knowledge of, luxury streetwear, further enhancing the company’s marketplace and stores offering. The consideration payable by the Group was in the form of cash consideration and Farfetch Limited shares. The consideration payable was split as $150.2 million of cash, and 4,641,554 Class A Ordinary Shares with a value of $80.7 million based on the Farfetch Limited share price as at the acquisition date.

The transaction is accounted for as a business combination under IFRS 3 and the purchase price allocation accounting has been finalized. Of the $80.7 million share consideration, $52.1 million includes a service condition for certain members of the Stadium Goods management team remaining with the Group over a four-year period. This does not satisfy the IFRS 3 definition of consideration and will be recognized as an expense in the Consolidated statement of operations over the four-year service period as a share-based payment expense. Therefore, under IFRS 3, the consideration is $178.8 million consisting of $150.2 million cash consideration and $28.6 million share consideration, none of which is contingent on future performance or service conditions.

Details of the purchase consideration, the assets acquired and goodwill are as follows (in thousands):

	2019
Cash consideration	$	150,200
Ordinary shares issued		28,600
Total purchase consideration	$	178,800

	2019
Net cash outflow arising on acquisition
Cash and cash equivalent balances acquired	$	1,678
Cash consideration		(150,200	)
Net cash outflow	$	(148,522	)

F-36

Notes to the Consolidated financial statements (continued)

The ordinary shares issued are non-cash investing activities.

The Group finalized its purchase price allocation in the first quarter 2019. The Group recognized the following assets and liabilities upon acquisition of Stadium Goods (in thousands):

	2019
Intangible assets	$	2,049
Brand name		117,300
Tangible assets		319
Right-of-use assets		2,802
Other non-current assets		243
Inventory		541
Net working capital (excluding inventory)		(3,642	)
Non-current liabilities		(14,465	)
Total net identified assets acquired		105,147
Goodwill		73,653
Net assets acquired	$	178,800

Goodwill consists of expected synergies to be achieved by combining the operations of Stadium Goods with the Group, as well as other intangible assets that do not qualify for separate recognition under IFRS 3. Goodwill is expected to be deductible for tax purposes. NaN deferred tax has been recognized however on the basis that management did not consider there to be sufficient evidence at the time of the acquisition that suitable taxable profits were expected to arise to support recognition.

As the transaction has been treated as an asset purchase for tax purposes, 0 deferred tax has been recognized in respect of the brand name as there is no difference between the tax base and carrying amount at acquisition, as it is expected that the brand name will be deductible for tax purposes.

Acquisition-related costs of $4.0 million were recorded in 2019, and comprised $2.5 million, which are included in Selling, general and administrative expenses, and $1.5 million, which are included in the merger relief reserve.

Toplife

On May 28, 2019, Farfetch (Shanghai) E-commerce Co., Ltd, a wholly owned subsidiary of Farfetch Limited, acquired 100% of the business of Toplife, a luxury e-commerce platform, from JD Group. The transaction is being treated as a business combination. The primary reason for the acquisition was for the Group to leverage the JD App Level 1 Access Button (Farfetch has replaced the Toplife JD Store with level 1 access being a prominent position on JD App’s homepage) to further enhance the Group’s marketplace business.

Details of the purchase consideration, the assets acquired, and goodwill are as follows (in thousands):

	2019
Cash consideration	$	48,503
Total purchase consideration	$	48,503

NaN cash or cash equivalents were acquired.

F-37

Notes to the Consolidated financial statements (continued)

The Group performed its purchase price allocation, which was finalized in 2020. Details of the purchase price allocation is as below (in thousands):

	2019
Tangible assets	$	17
Inventory		131
Current liabilities		(1,605	)
Level 1 access button		9,058
Total net identified assets acquired		7,601
Goodwill		40,902
Net assets acquired	$	48,503

Goodwill consists of expected synergies to be achieved by combining the operations of Toplife with the Group, as well as other intangible assets that do not qualify for separate recognition under IFRS 3. Goodwill is not deductible for tax purposes. The Level 1 access button is amortized over four years.

Acquisition-related costs totaled $0.7 million and are included in Selling, general and administrative expenses. These costs were recorded in the year ending December 31, 2019.

In November 2020, the Group fully impaired the Level 1 access button due to the closure of our direct consumer-facing channels on JD.com. At that time, the carrying amount of the intangible asset was $5.8 million. Refer to Note 16, Intangible assets for more information.

CuriosityChina

On April 3, 2019, Farfetch China (HK Holdings) Limited, a wholly owned subsidiary of Farfetch Limited, completed the acquisition of 78% of the outstanding shares of CuriosityChina with total cash consideration of $9.0 million. The Group benefits from CuriosityChina's expertise in the China market, including its customer base and technological capabilities. Upon initial acquisition the Group had an obligation to acquire the remaining 22% of outstanding shares that it did not initially acquire. On acquisition, the present value of the obligation amounted to $4.3 million and was accounted for separately from the business combination as a call option liability. In connection to the purchase obligation, the Group recognized a $0.9 million present value revaluation loss in the Consolidated statement of operations for the year ended December 31, 2020 and present value revaluation loss of $1.6 million for the year ended December 31, 2019. In connection with the initial acquisition agreement, in 2020, 3% of the outstanding shares in CuriosityChina were transferred to Farfetch China (HK Holdings) Limited on May 8, 2020, taking the non-controlling interest from 22% to 19% as of that date. The aggregate carrying value related to the remaining non-controlling interest in CuriosityChina, recognized on the Consolidated statement of financial position and classified within trade and other payables as at December 31, 2021, is $5.7 million (2020: $6.9 million classified within put and call option liabilities and trade and other payables).

The transaction has been accounted for as a business combination under IFRS 3.

Details of the total purchase consideration, the net assets acquired and goodwill are as follows (in thousands):

	2019
Cash consideration	$	9,000
Total purchase consideration	$	9,000

F-38

Notes to the Consolidated financial statements (continued)

	2019
Net cash outflow arising on acquisition
Cash and cash equivalent balances acquired	$	409
Cash consideration		(9,000	)
Net cash outflow	$	(8,591	)

The Group finalized its purchase price allocation in the fourth quarter of 2019. The Group recognized the following assets and liabilities upon acquisition of CuriosityChina (in thousands):

	2019
Tangible assets	$	78
Current assets		1,879
Current liabilities		(1,005	)
Customer relationships		3,878
Backlog		202
Technology		2,059
Deferred tax liability		(921	)
Total net identified assets acquired		6,170
Goodwill		3,039
Total net identified assets acquired and goodwill		9,209
Non-controlling interest		(209	)
Net assets acquired	$	9,000

Goodwill consists of expected synergies to be achieved by combining the operations of CuriosityChina with the Group, as well as other intangible assets that do not qualify for separate recognition under IFRS 3. Goodwill is not deductible for tax purposes.The Customer relationships, Backlog and Technology are amortized over ten, two and ten years respectively.

Acquisition-related costs totaled $0.4 million and are included in Selling, general and administrative expenses. These costs were recorded in the year ending December 31, 2019.

New Guards

On August 2, 2019, Farfetch Italia S.R.L, a wholly owned subsidiary of Farfetch Limited, completed the acquisition of 100% of the outstanding shares of New Guards and took control of New Guards on the same date. The acquisition complements the Group's strategy to be the global technology platform for luxury fashion. The consideration payable by the Group was in the form of cash and Farfetch Limited shares. The total consideration payable was $704.1 million, split as $358.9 million of cash, and 17,710,526 Class A Ordinary Shares with a value of $345.2 million based on the Farfetch Limited share price as at the acquisition date. With respect to the share consideration, 3,554,855 of the shares reflected an estimate at the acquisition date of the shares expected to be issued based on Farfetch Limited's volume adjusted average share price for the ten-day period ended September 18, 2019 and classified as a liability. In the third quarter of 2020, as part of the post-acquisition working capital adjustments included in the purchase agreement, the Group transferred an additional consideration of 181,870 Class A Ordinary Shares with a value of $4.8 million. This resulted in an additional $4.8 million of goodwill being recognized as a result of the additional consideration transferred.

The transaction was accounted for as a business combination under IFRS 3 and the purchase price allocation accounting has been completed.

F-39

Notes to the Consolidated financial statements (continued)

Details of the total purchase consideration, the assets acquired, and goodwill are as follows (in thousands):

	2019
Cash consideration	$	358,910
Ordinary shares issued		280,705
Ordinary shares to be issued		69,284
Total purchase consideration	$	708,899

	2019
Net cash outflow arising on acquisition
Cash and cash equivalent balances acquired	$	102,835
Cash consideration		(358,910	)
Net cash outflow	$	(256,075	)

The ordinary shares issued are non-cash investing activities.

The ordinary shares to be issued reflected the Group's best estimate of the shares it expected to issue as at the acquisition date as noted above. These shares were issued on September 23, 2019, with a $21.5 million debit recognized in profit or loss on issue reflecting the fair value remeasurement of the shares on the date they were issued.

The Group recognized the following assets and liabilities upon acquisition of New Guards (in thousands):

	2019
Intangible assets	$	1,382
Brand name		830,150
Tangible assets		2,714
Right-of-use assets		10,727
Deferred tax assets		3,451
Other non-current assets		2,694
Inventory		36,757
Net working capital (excluding inventory)		32,027
Non-current liabilities		(13,698	)
Deferred tax liabilities		(231,729	)
Total net identified assets acquired		674,475
Goodwill		192,831
Total net identified assets acquired and goodwill		867,306
Non-controlling interest		(158,407	)
Net assets acquired	$	708,899

Goodwill consists of expected synergies to be achieved by combining the operations of New Guards with the Group, as well as other intangible assets that do not qualify for separate recognition under IFRS 3. Goodwill is not expected to be deductible for tax purposes.

Acquisition-related costs totaled $4.1 million and comprised $2.1 million, which are included in Selling, general and administrative expenses, and $2.0 million, which are included in the merger relief reserve. These costs were recorded in the year ending December 31, 2019.

Revenue and profit contribution of acquisitions made in 2019

The results of operations for each of the 2019 acquisitions have been included in the Group’s consolidated statement of operations since the date of acquisition. Actual and pro forma revenue and results of operations for the

F-40

Notes to the Consolidated financial statements (continued)

acquisitions of Stadium Goods, CuriosityChina and Toplife have not been presented because they do not have a material impact to the consolidated revenue and results of operations, either individually or in aggregate. Actual revenue and results of operations for the acquisition of New Guards for the period between the acquisition date and December 31, 2019, were $183.0 million and $23.1 million respectively. Pro forma revenue and results of operations for the acquisition of New Guards as though the acquisition date had been the beginning of 2019 is impracticable because of the lack of financial information at the end of the reporting periods, as the acquired entity’s reporting periods were misaligned with Farfetch's reporting periods.

6.	Segmental and geographical information

Segmental information

The Group’s Chief Operating Decision Maker, which is deemed to be the Chief Executive Officer, examines segmental performance and resource allocation from an omni-channel service and product offering perspective, across the digital and physical realms.

The Group has identified 3 reportable operating segments:

(A) Digital Platform - comprised of the Farfetch Marketplace, FPS, BrownsFashion.com, StadiumGoods.com, Farfetch Future Retail, including Connected Retail, (which was previously called Farfetch Store of the Future), and any other online sales channel operated by the Group, including the respective websites of the brands in the New Guards portfolio. Revenues are derived mostly from transactions between sellers and consumers conducted on our technology platforms.

(B) Brand Platform - comprised of business-to-business activities of the brands in the New Guards portfolio and includes design, production, brand development and wholesale distribution of brands owned and licensed by New Guards, including the franchised store operations. Revenues are derived from wholesale sales of goods.

(C) In-Store - comprised of Group-operated stores including Browns, Stadium Goods and certain brands in the New Guards portfolio. Revenues are derived from sales made in the physical stores.

There are no intersegment transactions that require elimination. All revenues are revenues from external consumers. NaN operating segments have been aggregated to form a reportable operating segment. Order Contribution is used to assess the performance and allocate resources between the segments.

NaN single consumer accounted for more than 10% of Group revenues (2020: NaN, 2019: NaN).

The results of our three reportable operating segments are as follows (in thousands):

	Year ended December 31,
	2019			2020			2021
Digital Platform:	(in thousands)
Services third-party revenue	$	496,040		$	637,568		$	845,941
Services first-party revenue		205,206			395,588			539,737
Services Revenue		701,246			1,033,156			1,385,678
Fulfilment Revenue		127,960			213,228			332,504
Revenue		829,206			1,246,384			1,718,182
Less: Cost of revenue		(457,293	)		(686,178	)		(987,929	)
Gross profit		371,913			560,206			730,253
Less: Demand generation expense		(151,350	)		(198,787	)		(291,821	)
Order contribution	$	220,563		$	361,419		$	438,432

F-41

Notes to the Consolidated financial statements (continued)

	Year ended December 31,
	2019			2020			2021
Brand Platform:	(in thousands)
Revenue	$	164,210		$	390,014		$	467,505
Less: Cost of revenue		(89,203	)		(199,208	)		(225,989	)
Gross profit or order contribution	$	75,007		$	190,806		$	241,516

	Year ended December 31,
	2019			2020			2021
In-Store:	(in thousands)
Revenue	$	27,621		$	37,524		$	70,921
Less: Cost of revenue		(14,695	)		(17,608	)		(26,179	)
Gross profit or order contribution	$	12,926		$	19,916		$	44,742

	2019 ⁽¹⁾			2020 ⁽¹⁾			2021
Group:
Revenue	$	1,021,037		$	1,673,922		$	2,256,608
Less: Cost of revenue		(561,191	)		(902,994	)		(1,240,097	)
Gross profit		459,846			770,928			1,016,511
Less: Demand generation expense		(151,350	)		(198,787	)		(291,821	)
Order contribution		308,496			572,141			724,690
Selling, general and administrative expenses (excluding demand generation expense) ⁽¹⁾		(738,071	)		(1,152,696	)		(1,189,147	)
Impairment losses on tangible assets		-			(2,991	)		-
Impairment losses on intangible assets		-			(36,269	)		(11,779	)
Operating loss		(429,575	)		(619,815	)		(476,236	)
Gain/(loss) on items held at fair value and remeasurements		21,721			(2,643,573	)		2,023,743
Share of results of associates		366			(74	)		(52	)
Finance income		34,382			24,699			12,599
Finance costs⁽¹⁾		(19,232	)		(91,294	)		(86,441	)
(Loss)/profit before tax	$	(392,338	)	$	(3,330,057	)	$	1,473,613

(1) Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

Geographical information

The Group believes it is relevant to disclose geographical revenue information on both a demand basis, determined by the billing location of the consumer, and on a supply basis, determined by location of the Farfetch legal entity which earned the revenue.

The Group is domiciled in the Cayman Islands. For the year ended December 31, 2021, the Cayman Islands generated revenue from external consumers of $81,000 (2020: $37,000, 2019: $16,000) on a demand basis and $nil (2020: $nil, 2019: $nil) on a supply basis and is included within Other Countries in the revenue from external consumers detail below. As at December 31, 2021, the Cayman Islands had $nil non-current assets excluding deferred tax assets (2020: $nil).

F-42

Notes to the Consolidated financial statements (continued)

The Group’s revenue from external consumers on a demand basis, based on the billing location of the consumer, is detailed below (in thousands):

	2019		2020		2021
Revenue from external consumers (demand basis)
United States	$	210,482	$	314,596	$	475,684
United Kingdom		78,628		151,875		221,264
Other Countries		731,927		1,207,451		1,559,660
Revenue	$	1,021,037	$	1,673,922	$	2,256,608

The Group’s revenue from external consumers on a supply basis, based on the location of the Farfetch legal entity which earned the revenue, is detailed below (in thousands):

	2019		2020		2021
Revenue from external consumers (supply basis)
United Kingdom	$	728,321	$	1,021,240	$	1,363,167
Italy		180,988		485,882		624,585
Other Countries		111,728		166,800		268,856
Revenue	$	1,021,037	$	1,673,922	$	2,256,608

The Group’s non-current assets other than deferred tax assets, broken down by geographic location of the assets, are detailed below (in thousands):

	2020		2021
Non-current assets excluding deferred tax assets
Italy	$	915,553	$	917,646
United Kingdom		338,015		372,889
United States		225,137		249,529
Other Countries		137,610		161,436
Total	$	1,616,315	$	1,701,500

7.	Employees and directors

Included within employees and directors expenses are (in thousands):

	2019 ⁽¹⁾			2020		2021
Wages and salaries	$	206,092		$	307,527	$	344,587
Social security costs		36,314			42,972		56,277
Other pension costs		2,569			4,161		6,393
Share-based payments (equity-settled) ⁽¹⁾		170,145			168,347		219,933
Share-based payments (cash-settled)		10,675			28,041		(9,265	)
Share-based payments (employment related taxes)		(2,586	)		95,245		(14,501	)
Total employees and directors expenses	$	423,209		$	646,293	$	603,424

These amounts are included within Selling, general and administrative expenses in the Consolidated statement of operations.

(1)

Refer to Note 2, Significant accounting policies, within our Consolidated financial statements included elsewhere in ~~aggregate.~~this Annual Report for detail on this revision oof prior year comparatives.

F-43

Notes to the Consolidated financial statements (continued)

~~Acquisition related costs~~8.

~~Acquisition-related costs of $123,000 are included in selling,~~Selling, general and administrative ~~expenses.~~expenses

Included within Selling, general and administrative expenses are (in thousands):

	2019		2020		2021
Demand generation expenses	$	151,350	$	198,787	$	291,821
Technology expenses		84,207		115,227		131,408
Depreciation and amortization		113,591		217,223		251,198
Share-based payments ⁽¹⁾		178,234		291,633		196,167
General and administrative		345,665		504,346		591,644
Other items		16,374		24,267		18,730
Selling, general and administrative expenses	$	889,421	$	1,351,483	$	1,480,968

~~F-20~~(1)

~~Notes~~Refer to Note 2, Significant accounting policies, for detail on the ~~consolidated financial statements (continued)~~revision of prior year comparatives.

Demand generation expense is primarily comprised of fees that the Group pays its various media and affiliate partners. Technology expense primarily relates to maintenance and operations of Farfetch platform features and services, as well as hosting and infrastructure expenses. General and administrative expenses consist primarily of office and warehousing costs, non-technology headcount, marketing and other digital platform operations costs. Other items primarily consist of transaction-related legal and advisory costs.

9. Items held at fair value and remeasurements

Included within gain/(loss) on items held at fair value and remeasurements are (in thousands):

	2019			2020			2021
Change on remeasurement of put and call option and contingent consideration liabilities	$	43,247		$	(288,853	)	$	384,122
Change in fair value of convertible note embedded derivatives		-			(2,354,720	)		1,638,837
Change in fair value of acquisition related consideration		(21,526	)		-			-
Fair value remeasurement of previously held equity interest		-			-			784
Gains/(losses) on items held at fair value and remeasurements	$	21,721		$	(2,643,573	)	$	2,023,743

Change on remeasurement of put and call option and contingent consideration liabilities

The change on remeasurement of put and call option and contingent consideration liabilities during the year ended December 31, 2021 includes a $156.1 million gain on the remeasurement of liabilities arising as a result of the partnership with the Chalhoub, and a $246.1 million gain on remeasurement of the put and call option resulting from the strategic agreement with Alibaba and Richemont and a $3.9 million loss on remeasurement of the put option relating to the shares that the Company does not own in Alanui.

In addition, during the year ended December 31, 2021, as a result of the acquisition of 60 percent of Palm Angels S.r.l. (“Palm Angels”) ordinary share capital, the Company entered into an option agreement over the 40 percent of the share capital that it does not own. As a result, the change on remeasurement of put and call option and contingent consideration liabilities during the year ended December 31, 2021 also includes a $11.3 million loss on the remeasurement of the put and call option over the 40 percent of the share capital in Palm Angels that New Guards does not own. There is also a $2.8 million loss on remeasurement of the contingent consideration relating to this transaction.

The change on remeasurement of put and call option and contingent consideration liabilities during the year ended December 31, 2020 includes a $287.9 million loss on the remeasurement of put and call option liabilities arising as a result of the partnership with Chalhoub and a $0.9 million loss on the remeasurement of put and call option liabilities arising as a result of the acquisition of CuriosityChina.

F-44

Notes to the Consolidated financial statements (continued)

The change on remeasurement of put and call option and contingent consideration liabilities during the year ended December 31, 2019 includes a $44.8 million gain on the remeasurement of liabilities arising as a result of the partnership with Chalhoub and a $1.6 million loss on the remeasurement of put and call option liabilities arising as a result of the acquisition of CuriosityChina.

The valuation of the Chalhoub liability is based on the Monte Carlo simulation, in which the share price of Farfetch is the significant variable. The valuation of the put and call option liability relating to the strategic agreement with Alibaba and Richemont is calculated using the present value of future expected payments method, with the Farfetch share price as the significant variable. The valuations of the put and call option liability relating to Palm Angels and the contingent consideration liabilities are calculated using the present value of future expected payments method, with management's internal forecasts and the relevant weighted average cost of capital as the significant variables. For further information regarding the valuation of these instruments, refer to Note 28, Financial instruments and financial risk management.

Fair value remeasurement of previously held equity interest

The fair value remeasurement of previously held equity interest relates to New Guards step-acquisition of Alanui (see Note 5, Business combinations for further detail).

Change in fair value of convertible note embedded derivatives

The change in fair value of convertible note embedded derivatives during the year ended December 31, 2021 includes a $484.5 million gain on remeasurement of the embedded derivative on the $250.0 million convertible senior notes issued in February 2020 (“February 2020 Notes”), a $724.7 million gain on remeasurement of the embedded derivative on the $400.0 million convertible senior notes issued in April 2020 (“April 2020 Notes”) and a $429.6 million gain on remeasurement of the embedded derivative on the $600.0 million convertible senior notes issued in November 2020 to Alibaba and Richemont. The $484.5 million gain on remeasurement of the embedded derivative on the $250.0 million convertible note includes a $78.5 million gain on remeasurement relating to the early conversion of these notes. The valuations of derivatives relating to the February 2020 Notes and April 2020 Notes are based on the Black Scholes model. The valuation of the derivative related to the $600.0 million convertible senior notes issued in November 2020 is based on the Binomial model. In both the Black Scholes and Binomial models, the share price is the significant variable. The other assumptions in the Black Scholes and Binomial models are the risk-free rate and volatility.

The change in fair value of convertible note embedded derivatives during the year ended December 31, 2020 includes a $978.3 million loss on remeasurement of the embedded derivative on the $250.0 million convertible senior notes issued in February 2020 (“February 2020 Notes”), a $1,104.0 million loss on remeasurement of the embedded derivative on the $400.0 million convertible senior notes issued in April 2020 (“April 2020 Notes”) and a $272.4 million loss on remeasurement of the embedded derivative on the $600.0 million convertible senior notes issued in November 2020 to Alibaba and Richemont. The valuations of derivatives relating to the February 2020 Notes and April 2020 Notes are based on the Black Scholes model. The valuation of the derivative related to the $600.0 million convertible senior notes issued in November 2020 is based on the Binomial model. In both the Black Scholes and Binomial models, the share price is the significant variable. The other assumptions in the Black Scholes and Binomial models are the risk-free rate and volatility. For further information regarding the valuation of these instruments, refer to Note 28, Financial instruments and financial risk management.

On May 17, 2021, one of the private investors of the $250.0 million convertible senior notes issued in February 2020 converted $39.1 million of their total $125.0 million convertible notes. This equated to 31 percent of their overall convertible notes holding. This early conversion was settled in shares in line with the indenture agreement. As a result, the embedded derivative relating to the portion of notes that were converted was revalued to a fair value of $90.6 million on the conversion date and the gain on revaluation was recognized within Gain/(loss) on items held at fair value and remeasurements in the Consolidated statement of operations, this amounted to $41.7 million.

F-45

Notes to the Consolidated financial statements (continued)

On August 6, 2021, the same private investor converted the remaining $85.9 million of their total $125.0 million convertible notes. This early conversion was settled in shares in line with the indenture agreement. As a result, the embedded derivative relating to the portion of notes that were converted was revalued to a fair value of $241.6 million on the conversion date and the gain on revaluation was recognized within Gain/(loss) on items held at fair value and remeasurements in the Consolidated statement of operations, this amounted to $30.1 million.

On October 1, 2021, the other private investor of the convertible senior notes issued in February 2020 converted $75.0 million of their total $125.0 million convertible notes. This equated to 60 percent of their overall convertible notes holding. This early conversion was settled in shares in line with the indenture agreement. As a result, the embedded derivative relating to the portion of notes that were converted was revalued to a fair value of $152.8 million on the conversion date and the gain on revaluation was recognized within Gain/(loss) on items held at fair value and remeasurements in the Consolidated statement of operations, this amounted to $6.7 million.

For further information regarding the valuation of these instruments, refer to Note 28, Financial instruments and financial risk management.

10.	~~Style.com~~Finance income and costs

Included within Finance income and Finance costs are (in thousands):

	2019			2020 ⁽¹⁾			2021
Unrealized exchange gains	$	22,856		$	19,729		$	9,289
Interest on cash and cash equivalents		11,526			4,970			3,310
Finance income		34,382			24,699			12,599

Unrealized exchange losses		(10,977	)		(39,940	)		(9,135	)
Interest on leases		(3,472	)		(6,684	)		(9,137	)
Convertible note interest ⁽¹⁾		-			(41,851	)		(67,638	)
Other interest expense		(4,783	)		(2,819	)		(531	)
Finance costs		(19,232	)		(91,294	)		(86,441	)

Net finance income/(costs)	$	15,150		$	(66,595	)	$	(73,842	)

~~On June 12, 2017, Farfetch UK Limited, a wholly owned subsidiary~~(1)

Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

F-46

Notes to the Consolidated financial statements (continued)

11.	Material gain or loss

The Group has identified a number of items which are material due to the significance of their nature and/or amount. These are listed separately here to provide a better understanding of the financial performance of the group (in thousands):

	Note		2019			2020			2021
Research and development costs expensed				(15,777	)		(22,484	)		(13,599	)
Amortization - Intangible assets		16		(85,055	)		(177,857	)		(201,634	)
Depreciation - Property, plant and equipment		17		(8,972	)		(12,094	)		(15,533	)
Depreciation - Right-of-use assets		18		(19,564	)		(27,272	)		(34,031	)
Impairment losses on intangible assets		16		-			(36,269	)		(11,779	)
Impairment losses on right-of-use assets		18		-			(2,234	)		-
Transaction related legal and advisory expenses				(15,374	)		(24,598	)		(18,596	)
(Losses)/gains on items at present value remeasurements		9		(43,247	)		288,853			384,122
Gains related to conversion of convertible notes				-			-			78,467
(Losses)/gains from fair value remeasurements of convertible note embedded derivatives		9		-			(2,354,720	)		1,560,370
Change in fair value of acquisition related consideration		9		(21,526	)		-			-

12.

Taxation

a)	Income tax expense/(benefit) (in thousands)

	2019			2020			2021
Current tax:
Corporate tax	$	15,676		$	32,430		$	33,105
Prior year adjustments		(1,652	)		(96	)		3,567
Total current tax		14,024			32,334			36,672
Total deferred tax benefit, net		(12,862	)		(46,768	)		(33,670	)
Income tax expense/(benefit)	$	1,162		$	(14,434	)	$	3,002

b)	Reconciliation of the ~~Parent, acquired 100%~~effective tax rate

The tax on the Group’s (loss)/profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profit of the consolidated entities as follows (in thousands):

	2019 ⁽¹⁾⁽²⁾			2020 ⁽¹⁾⁽²⁾			2021
(Loss)/profit before tax ⁽¹⁾	$	(392,338	)	$	(3,330,057	)	$	1,473,613
Tax at the UK tax rate of 19.00% (2020: 19.00%, 2019:19.00%)		(74,544	)		(632,711	)		279,986
Tax effects of:
Sundry non-taxable income		(4,414	)		(9,555	)		(45,567	)
Sundry non-taxable expense		6,338			22,262			20,493
Non-taxable items evaluated at fair value		-			548,524			(311,379	)
Taxes paid overseas and rate difference		3,853			5,816			(6,260	)
Adjustments in respect of change in tax rates		-			-			(937	)
Adjustments in respect of prior year		(1,652	)		(96	)		3,567
Unrecognized deferred tax assets		71,581			51,326			63,099
Income tax expense/(benefit)	$	1,162		$	(14,434	)	$	3,002

(2)	Refer to Note 2, Significant accounting policies, for detail on the revision of ~~the business of Style.com, a luxury e-commerce retailer, from Conde Nast. The primary reason~~prior year comparatives.

(3)

Previously reported comparatives for the acquisition was for the Group to leverage customer relationships, the Style.com domain name authority and content to enhance the Group’s marketplace business. Details of the purchase consideration, the assets acquired and goodwill are as follows:

	~~2017~~
~~Purchase consideration~~
~~Ordinary shares issued~~		~~12,411~~
~~Total purchase consideration~~		~~12,411~~

The fair value of the 258,265 shares issued as 100% of the consideration paid for Style.com Limited ($12,411,000) was estimated based upon the Company’s most recent funding round as of the date of the acquisition. The ordinary shares issued are non-cash investing activities.

~~The Group recognized the following assets and liabilities upon acquisition:~~

	~~2017~~
~~Inventories~~		~~1,856~~
~~Total net identified assets acquired~~		~~1,856~~
~~Goodwill~~		~~7,050~~
~~Customer relationships~~		~~1,178~~
~~Trademarks and domain name~~		~~3,046~~
~~Deferred tax liability~~		~~(719~~	)
~~Total goodwill and identifiable intangible assets acquired~~		~~10,555~~
~~Net assets acquired~~		~~12,411~~

~~The trademarks and domain name are amortized over ten~~ years ~~and the customer relationships are amortized over three years.~~

~~The goodwill is attributable to the Style.com reputation and the expected synergies and efficiencies generated by the business combination. It will not be deductible for tax purposes.~~

~~There was no cashflow impact with purchase consideration being the issue of shares and there being no cash acquired.~~

~~Acquisition related costs~~

~~Acquisition-related costs of $557,000 are included in selling, general and administrative expenses.~~

~~Acquisitions in 2018~~

~~There were no business combinations in 2018.~~

~~F-21~~

~~Notes to the consolidated financial statements (continued)~~

6.	~~Segmental and geographical information~~

The Group has identified four operating segments. This assessment is based on information reported to the Group’s Chief Executive for the purpose of assessing segmental performance and resource allocation.

These are the Marketplace (which operates the Farfetch.com marketplace website and app), Farfetch Black & White Solutions (a white label website solution for luxury brands), Stores (operation of the Browns luxury boutiques) and Store of the Future (provision of technology solutions to retail outlets). The Marketplace represents over 90% of the Group’s revenue, results and assets. As such the Group has presented only one reportable segment.

~~Geographical information~~

The Group operates a platform that connects retailers and brands, which provide supply, with consumers, who provide demand. Therefore, the Group believes it is relevant to disclose geographical revenue information on both a supply basis, determined by location of the Farfetch contracting entity, and on a demand basis, determined by location of consumer.

~~The Group’s UK revenue, based on location of the Farfetch contracting entity, was $492,495,000 (2017: $335,345,000, 2016: $208,857,000).~~

~~The Group’s revenue from external customers, based on consumer ship-to location, and information about its segment assets by geographical location are detailed below:~~

2016

2017

2018

Revenue from external customers

Americas

77,608

111,349

175,060

Europe, Middle East and Africa

92,885

156,507

240,662

Asia Pacific

71,623

118,110

186,662

242,116

385,966

602,384

2017

2018

Non-current assets

Americas

4,046

6,089

United Kingdom

53,594

118,374

Europe, Middle East and Africa

45,596

21,500

Asia Pacific

7,030

6,020

110,266

151,983

~~For the year~~ ended December 31, ~~2018, the Group revised its methodology~~2020 and 2019 have been re-presented for determining the geographical location of revenue from being based on customer shipping location to customer billing location. In addition, the Group previously disclosed first-party sales based on the location of the seller. The Group has revised this to being based on the customer billing location which is consistentcomparability with ~~third-party based sales. Revenue by geographical location~~condensed disclosure for the year ended December 31, ~~2016 and 2017 has been revised to reflect this change in methodology.~~2021.

~~No single customer amounted for more than 10% of Group revenues (2017: none, 2016: none).~~

~~F-22~~

F-47

Notes to the Consolidated financial statements (continued)

During the preparation of the Group’s condensed Consolidated financial statements for the three months ended March 31, 2021, a misstatement of $17.4 million was identified in relation to the accounting for interest expense reported in our results for the year ended December 31, 2020, relating to a calculation error. During the preparation of the Group’s Consolidated financial statements for the year ended December 31, 2021, an understatement of $19.8 million was identified in relation to the accounting for share-based compensation expense reported in our results for the year ended December 31, 2019, relating to a calculation error. The tax impact of both misstatements have been reflected in the reconciliation table above.

The UK corporation tax rate applicable from April 1, 2020 is 19% therefore, the Group has used a tax rate of 19% for the 2021 financial year. An increase in the main UK corporation tax rate to 25% from fiscal year 2023, announced in the Budget on March 3, 2021, has been substantially enacted therefore, in calculating UK unrecognized deferred tax assets on tax losses, the calculation has used the enacted tax rates.

The tax on items presented within other comprehensive (loss)/income is $nil (2020 and 2019: $nil)

F-48

Notes to the Consolidated financial statements (continued)

13.	Loss per share

Basic (loss)/earnings per share is computed using the weighted-average number of outstanding shares during the year. Diluted loss per share is computed using the weighted-average number of outstanding shares and excludes all potential shares outstanding during the year, as their inclusion would be anti-dilutive. The Group’s potential shares consist of incremental shares issuable upon the assumed exercise of share options and warrants, the incremental shares issuable upon the assumed vesting of unvested share awards, potential shares issuable on the conversion of the convertible loan notes and potential shares issuable on the conversion of certain put-call options. The calculation of basic (loss)/earnings per share and diluted loss per share is as follows (in thousands):

	2019 ⁽¹⁾			2020 ⁽¹⁾			2021
In $ thousands, except share and per share data
Diluted (loss)/income
(Loss)/profit after tax attributable to equity holders of the parent:
Used in calculating basic (loss)/earnings per share	$	(405,109	)	$	(3,333,171	)	$	1,466,487
Adjustments:
Convertible note interest		-			-			67,638
Gain on items held at fair value and remeasurements		-			-			(2,041,013	)
Loss after tax attributable to equity holders of the parent used in calculating diluted loss per share	$	(405,109	)	$	(3,333,171	)	$	(506,888	)

Weighted average number of basic shares		318,843,239			343,829,481			364,696,712
Dilutive securities:
Options		-			-			20,257,787
Restricted Stock Units (RSUs)		-			-			8,014,788
Other awards		-			-			1,200,105
Acquisition related deferred shares								180,369
February 2020 notes		-			-			14,216,896
May 2020 notes		-			-			24,794,680
November 2020 notes		-			-			18,583,620
Chalhoub liability		-			-			3,984,014
Farfetch China Holdings Ltd liability		-			-			16,429,024
Weighted average number of dilutive shares		318,843,239			343,829,481			472,357,995

(Loss)/earnings per share attributable to equity holders of the parent:
Basic	$	(1.27	)	$	(9.69	)	$	4.02
Diluted	$	(1.27	)	$	(9.69	)	$	(1.07	)

(1) Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

Potential ordinary shares excluded from Diluted earnings per share as their conversion would have an antidilutive effect are as follows (in thousands):

	2019		2020		2021
Convertible Notes		-		63,758		-
Employee options & RSU's		9,105		40,890		1,114
Contingent consideration		-		-		136
Put Call options		-		-		3,786

In the year ended December 31, 2019, all warrants above were exercised.

F-49

Notes to the Consolidated financial statements (continued)

Refer to Note 9, Items held at fair value and remeasurements for further detail on the Put Call options and Convertible Notes included above.

14.	Inventories

Inventories as at December 31 comprised the following (in thousands):

	2020			2021
Finished goods	$	167,225		$	278,345
Obsolete stock provision		(21,916	)		(22,681	)
Total inventories	$	145,309		$	255,664

The total cost of inventory recognized as an expense in the consolidated statement of operations was $516.2 million for the year ended December 31, 2021 (2020: $411.7 million, 2019: $232.6 million).The total provision against inventory in order to write down the balance to net recoverable value was $22.7 million for the year ended December 31, 2021 (2020: $ 21.9 million).

15.	Trade and other receivables

Trade and other receivables comprised the following at December 31 (in thousands):

	2020			2021
Non-current
Other receivables	$	58,081		$	31,225
Non-current other receivables	$	58,081		$	31,225
Current
Trade receivables	$	49,833		$	63,046
Other current receivables		123,492			179,964
Sales taxes		26,642			117,234
Allowance for expected credit losses		(4,062	)		(5,208	)
Prepayments and accrued income		14,041			19,670
Current trade and other receivables	$	209,946		$	374,706

Non-current other receivables is primarily comprised of withholding tax relating to share-based compensation, deposits for office leases and services and operations-related deposits, which the Group is not expecting to recover within the next twelve months.

Other current receivables primarily relate to advances to boutique partners, first-party product suppliers and other suppliers. Included within Other current receivables is $2.3 million of restricted cash (2020: $nil).

Sales tax receivables relate to recoverable VAT arising on indirect exports, including between UK and Europe, where we have adapted our transactional flows in response to the formal withdrawal of the United Kingdom from the European Union on January 31, 2020.

The Group has assessed its expected credit loss (“ECL”) estimate in line with the requirements of IFRS 9 – Financial instruments (“IFRS 9”). As part of this assessment, the Group has performed a recoverability assessment of its outstanding Trade and other receivables at the reporting date and, where appropriate, made suitable adjustments to allowances and provisions. In the year ended December 31, 2021, the charge relating to expected credit losses included within the sales, general and administration in the Consolidated statement of operations is $0.9 million (2020: $4.3 million).

F-50

Notes to the Consolidated financial statements (continued)

16.	Intangible assets

Intangible assets consist of the following (in thousands):

	Goodwill			Brand, trademarks & domain names			Customer relationships			Development costs			Total
Cost
At January 1, 2020	$	341,067		$	965,317		$	6,010		$	163,933		$	1,476,327
Additions		-			14,000			-			89,282			103,282
Additions acquired through business combinations ⁽¹⁾		15,474			4,826			-			-			20,300
Foreign exchange movements		(20	)		4,265			850			216			5,311
At December 31, 2020		356,521			988,408			6,860			253,431			1,605,220
Additions		-			131,161			395			118,661			250,217
Additions acquired through business combinations ⁽¹⁾		27,006			7,279			1,692			9,899			45,876
Disposals		-			(3	)		-			(11	)		(14	)
Foreign exchange movements		(1,242	)		(2,116	)		(52	)		(122	)		(3,532	)
At December 31, 2021		382,285			1,124,729			8,895			381,858			1,897,767
Accumulated amortization and impairment
At January 1, 2020		-			(57,014	)		(1,786	)		(54,560	)		(113,360	)
Amortization for year		-			(125,325	)		(34	)		(52,498	)		(177,857	)
Impairment for year		-			(36,269	)		-			-			(36,269	)
Foreign exchange movements		-			1,593			(1,806	)		1,807			1,594
At December 31, 2020		-			(217,015	)		(3,626	)		(105,251	)		(325,892	)
Amortization for year		-			(132,592	)		(451	)		(68,591	)		(201,634	)
Impairment for year	-				(11,779	)		-		-				(11,779	)
Disposals		-			3			-			(30	)		(27	)
Foreign exchange movements	-				1,115			(64	)		171			1,222
At December 31, 2021		-			(360,268	)		(4,141	)		(173,701	)		(538,110	)
Net book value
At December 31, 2020		356,521			771,393			3,234			148,180			1,279,328
At December 31, 2021	$	382,285		$	764,461		$	4,754		$	208,157		$	1,359,657

(1)

Refer to Note 5, Business combinations.

Intangible assets with definite useful lives

Included within Development costs is $37.8 million (2020: $36.6 million) of assets that are under the course of construction. Amortization of these assets will commence once they are available for use.

As of December 31, 2021, Brands, Trademarks and domain names primarily include: Off-White brand with a net carrying amount of $415.1 million and a remaining life of 4 years, Stadium Goods brand with a net carrying amount of $93.8 million and a remaining life of 12 years, Marcelo Burlon County of Milan brand with a net carrying amount of $59.3 million and a remaining life of 13.6 years, Palm Angels brand with a net carrying amount of $125.3 million and a remaining life of 9.6 years, Palm Angels license with a net carrying amount of $25.6 and a remaining life of 4.6 years, Ambush brand with a net carrying amount of $4.1 million and a remaining life of 8.3 years and Heron Preston brand with a net carrying amount of $21.3 million and a remaining life of 5.6 years. New Guards Group owned the license to Palm Angels license since 2019, however the Brand was acquired in 2021. Refer to Note 3 Critical accounting judgments and key sources of estimation uncertainty for more information on the Palm Angels Brand acquisition.

F-51

Notes to the Consolidated financial statements (continued)

Development costs relate to development expenses that meet the capitalization criteria under IAS 38 - Intangible Assets, acquired software in business combinations, and includes the development of internal software and technologies related to the enhancement of the Group's Digital Platform.

Amortization for all intangible assets is recognized in Selling, general and administrative expenses within the Consolidated statement of operations.

During the year ended December 31, 2021 impairment expense of $11.8 million was recognized primarily relating to a reduction in forecasted sales, which decreased the value-in-use of one of the smaller intangible brand assets within the New Guards portfolio and is associated with the Brand Platform reportable operating segment.

The impairment charge of $36.3 million on intangible assets for the year ended December 31, 2020, is primarily comprised of a $30.5 million charge related to a reduction in the carrying value of one of the smaller intangible brand assets within New Guards portfolio. The remaining $5.8 million impairment charge on intangible assets related to the closure of our direct consumer-facing channels on JD.com and the associated intangible asset held for the Farfetch Level 1 access button.

Intangible assets with indefinite useful lives

Goodwill reflects the amount of consideration in excess of the fair value of net assets acquired in business combinations. The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. Goodwill has been allocated to the following CGUs or group of CGUs. New acquisitions Allure and Luxclusif have been allocated to the Marketplace CGU. JBUX has been allocated to Farfetch Platform Solutions. For details regarding additions to goodwill refer to Note 5, Business combinations.

The goodwill amounts for each CGU or group of CGU consists of the following at December 31 (in thousands):

	2020		2021
CGU
Marketplace (FF.com)	$	153,086	$	176,776
Browns - Platform		19,015		19,015
CuriosityChina		3,039		3,039
Brand Platform - New Guards		181,381		181,381
Farfetch Platform Solutions		—		2,074
Total Goodwill	$	356,521	$	382,285

In finalizing the purchase price allocation of the New Guards acquisition, we determined a portion of the goodwill ($17.7 million) should be allocated to the Marketplace CGU as synergies arising from the acquisition will benefit the Group’s digital business. Similarly, when finalizing the Ambush acquisition, we allocated $4.4 million of the goodwill to the Marketplace CGU and $6.3 million to the Brand Platform.

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use include (i) expected future revenue growth rates, including the terminal growth rate; (ii) anticipated gross profit margins (iii) anticipated operating margins; and (iv) the discount rates to be applied to the estimated future cash flows. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs and the group of units. The growth rates are based on revenue growth and cost of revenue forecasts.

The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next three years. Forecasts are extended to five or eight years using management’s best estimates, according to the nature and maturity of each CGU. The Group believes this period range is appropriate to capture the high growth rates seen in the markets in which our CGUs operate.

The key assumptions for the value in use calculations are the revenue growth rates and the pre-tax discount rates, plus gross profit margin for selected CGUs. The Group extrapolates the cash flows in the fifth or eighth year

F-52

Notes to the Consolidated financial statements (continued)

based on an estimated growth rate of 2% (2020: 2%). This rate does not exceed the average long-term growth rate for the relevant markets. The pre-tax discount rate used to discount the forecast cash flows ranges from 8.9% to 10.9% (2020: 9.6% to 11.2%). The pre-tax discount rate applied is derived from a market participant’s estimated weighted average cost of capital.

The assumptions used in the calculation of the Group’s weighted average cost of capital are benchmarked to externally available data.

Management has performed sensitivities on key assumptions and based upon these believe that there are no indicators of impairment.

The recoverable amount of each CGU would equal its carrying amount if the key assumptions were to change as follows:

	Marketplace (FF.com)			Browns – Platform			CuriosityChina			Brand Platform – New Guards
Budgeted annual revenue growth (change in pp)		(5.4	)		(3.3	)		(0.7	)		(13.6	)
Post-tax discount rate (change in pp)		1.4			1.2			0.2			3.8
Budgeted gross profit margin (change in pp)		(1.1	)		(0.5	)		(3.5	)		(11.9	)
Long term growth rate (change in pp)		(1.4	)		(3.6	)		(0.3	)		(3.7	)

F-53

Notes to the Consolidated financial statements (continued)

17.	Property, plant and equipment

Property, plant and equipment comprised the following (in thousands):

	Freehold land			Leasehold improvements			Fixtures and fittings			Motor vehicles			Plant, machinery and equipment			Totals
Cost
At January 1, 2020	$	17,818		$	43,135		$	12,968		$	193		$	16,944		$	91,058
Additions		-			18,039			4,799			-			4,228			27,066
Additions acquired through business combinations ⁽¹⁾		-			1,052			-			-			313			1,365
Disposals		-			-			(80	)		-			(212	)		(292	)
Transfers		-			(174	)		513			-			(533	)		(194	)
Foreign exchange movements		1,751			3,396			995			8			1,146			7,296
At December 31, 2020		19,569			65,448			19,195			201			21,886			126,299
Additions		-			12,264			8,167			108			7,895			28,434
Additions acquired through business combinations ⁽¹⁾		-			6			43			-			159			208
Disposals		-			(3,219	)		(1,045	)		-			(1,037	)		(5,301	)
Transfers		-			(2,383	)		85			-			2,305			7
Foreign exchange movements		(1,545	)		(2,851	)		(1,370	)		(7	)		(991	)		(6,764	)
At December 31, 2021		18,024			69,265			25,075			302			30,217			142,883
Accumulated depreciation and impairment
At January 1, 2020		-			(10,517	)		(4,660	)		(100	)		(7,782	)		(23,059	)
Depreciation for year		-			(5,175	)		(2,605	)		(22	)		(4,293	)		(12,094	)
Impairment for year		-			(620	)		(135	)		-			(2	)		(757	)
Disposals		-			-			83			-			189			272
Transfers		-			77			(14	)		-			150			212
Foreign exchange movements		-			(792	)		(369	)		(8	)		(621	)		(1,791	)
At December 31, 2020		-			(17,027	)		(7,701	)		(130	)		(12,359	)		(37,217	)
Depreciation for year		-			(6,615	)		(3,589	)		(29	)		(5,300	)		(15,533	)
Disposals		-			3,095			1,008			-			998			5,101
Foreign exchange movements		-			919			446			7			457			1,829
At December 31, 2021		-			(19,628	)		(9,836	)		(152	)		(16,204	)		(45,820	)
Net book value
At December 31, 2020		19,569			48,421			11,494			71			9,527			89,082
At December 31, 2021	$	18,024		$	49,637		$	15,239		$	150		$	14,013		$	97,063

⁽¹⁾ See Note 5, Business combinations for details

Included within Leasehold improvementsis $9.2 million (2020: $1.7 million)of assets that are under the course of construction. Depreciation will commence once they are available for use.

Depreciation for all property, plant and equipment is recorded in Selling, general and administrative expenses within the Consolidated statement of operations.

The impairment charge of $0.8 million during the year ended December 31, 2020, primarily related to a reduction in the carrying value of Leasehold improvements, Fixtures and fittings, and Plant, machinery and equipment at one of our smaller retail locations and is associated with the In-Store reportable segment. There were 0 impairment losses in the year ended December 31, 2021.

F-54

Notes to the Consolidated financial statements (continued)

18.Right-of-use assets and lease liabilities

The Group's leasing activities:

The Group leases various offices, retail stores and cars. Lease contracts are typically made for fixed periods of three to twelve years but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

Low-value assets comprise IT-equipment and small items of office furniture.

Right-of-use assets comprised the following (in thousands):

	Property			Vehicles			Totals
2020
At January 1, 2020	$	114,618		$	558		$	115,176
Additions		90,240			162			90,402
Remeasurements		13			(8	)		5
Depreciation charge for the year		(27,048	)		(224	)		(27,272	)
Impairment charge for the year		(2,234	)		-			(2,234	)
Foreign exchange		3,149			1			3,150
At December 31, 2020	$	178,738		$	489		$	179,227
2021
At January 1, 2021	$	178,738		$	489		$	179,227
Additions		42,931			300			43,231
Remeasurements		15,242			1			15,243
Depreciation charge for the year		(33,727	)		(304	)		(34,031	)
Foreign exchange		(8,095	)		(26	)		(8,121	)
At December 31, 2021	$	195,089		$	460		$	195,549

During the year ended December 31, 2021, there was 0 impairment charge recognized in relation to right-of-use assets. During the year ended December 31, 2020, the impairment charge of $2.2 million was primarily comprised of a $1.5 million reduction in the carrying value of the right-of-use assets at 1 of our smaller retail locations and is associated with the In-Store reportable operating segment. The remaining $0.7 million relates to a reduction in the carrying value of corporate right-of-use assets associated with the impairment of a smaller intangible brand asset within the New Guards portfolio, and is associated with the Brand Platform reportable operating segment.

Lease liabilities comprised the following as at December 31 (in thousands):

	2020		2021
Current lease liabilities	$	26,128	$	33,594
Non-current lease liabilities		165,275		180,915
Total lease liabilities	$	191,403	$	214,509

During the year ended December 31, 2021, the Group paid $26.3 million (2020: $19.1 million) in principal elements of lease payments.

During the year ended December 31, 2021, a charge of $6.7 million (2020: $6.4 million) was recognized in relation to short-term and low value leases.

F-55

Notes to the Consolidated financial statements (continued)

19.Investments

In the year ended December 31, 2021, the investments of the Group were comprised of minority equity interests and convertible loan notes. In the year ended December 31, 2020, the investments of the Group were comprised of minority equity interests, convertible loan notes and senior secured promissory loan notes. During the year ended December 31, 2021, the Group made a $9.0 million investment in The Diem Association. The details of investments are as follows (in thousands):

	Investments - held at fair value through other comprehensive income (FVTOCI)			Investments - held at amortized cost			Investments - held at fair value through profit or loss (FVTPL)
At January 1, 2020	$	5,141		$	10,588		$	500
Additions		372			-			2,500
Impairment		(235	)		-			-
Acquisition of intangible asset		-			(10,588	)		-
At December 31, 2020		5,278			-			3,000
Additions		40			-			9,787
Impairment		(168	)		-			-
At December 31, 2021	$	5,150		$	-		$	12,787

Investments in associates

The table below (in thousands) illustrates the summarized financial information of the Group’s investments in Farfetch Finance Limited and Alanui (up to March 1, 2021). The Group’s shareholdings in Alanui and its principal activities can be found in Note 32, Group information. In addition, for further detail on Alanui refer to Note 5, Business Combinations.


At January 1, 2020	$	2,466
Dividends received from associate		(60	)
Share of loss after tax		(74	)
Foreign exchange		(13	)
At December 31, 2020		2,319
Step acquisition		(2,198	)
Share of loss after tax		(52	)
At December 31, 2021	$	69

At December 31, 2021, no impairment indicators were identified.

F-56

Notes to the Consolidated financial statements (continued)

20.	Cash and cash equivalents

For the purpose of presentation in the Consolidated statement of cash flows and Consolidated statement of financial position, cash and cash equivalents includes cash held in banks, money market funds such as call deposits held with financial institutions, short-term deposits including highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and cash amounts held by payment service providers. Cash and cash equivalents consist of the following at December 31 (in thousands):

	2020		2021
Cash held in banks	$	173,206	$	141,130
Money market funds		1,011,330		810,453
Short-term deposits		333,353		353,539
Amounts held by payment service providers		55,532		58,006
Cash and cash equivalents	$	1,573,421	$	1,363,128

21.	Short-term investments

The short-term investment entered into during the year ended December 31, 2021 relates to variable Net Asset Value (“NAV”) investments, representing cash investments in variable money market instruments on the basis of a mark-to-market valuation of an underlying portfolio of money market instruments. These do not meet the definition of cash and cash equivalents as they are not readily convertible into known amounts of cash and are subject to significant risk of changes in value. All changes in fair value of these investments are recognized in the Consolidated statement of operations. Short-term investments consist of the following at December 31 (in thousands):

	2020		2021
Short-term investments	$	-	$	99,971
Short-term investments	$	-	$	99,971

22.	Trade and other payables

Trade and other payables consisted of the following at December 31 (in thousands):

	2020		2021
Trade payables	$	277,827	$	342,938
Other payables		16,642		22,208
Social security and other taxes		76,820		69,053
Deferred revenue		30,957		60,486
Accruals		263,898		311,721
Trade and other payables	$	666,144	$	806,406

Trade Payables primarily relates to supplier invoices for marketing, shipping, inventory, software and hosting related expenses.

23.Borrowings

Convertible Notes

On February 5, 2020, the Group issued $250.0 million total aggregate principal amount of 5.00% convertible senior notes due December 31, 2025 (“February 2020 Notes”) in a private placement to private investors. On April 30, 2020, the Group issued $400.0 million total aggregate principal amount of 3.75% convertible senior notes due May 1, 2027 (“April 2020 Notes”) in a private placement to qualified institutional investors

F-57

Notes to the Consolidated financial statements (continued)

pursuant to Rule 144A of the Securities Act of 1933, as amended. On November 17, 2020, the Group issued $600.0 million total aggregate principal amount of 0.00% convertible senior notes due November 15, 2030 (“November 2020 Notes”) to Alibaba and Richemont. The total net proceeds from these offerings were $1,240.4 million, after deducting $9.6 million of debt issuance costs in connection with these notes.

The February 2020, April 2020 and November 2020 Notes represent senior unsecured obligations of the Group. With respect to the February 2020 Notes, the interest rate is fixed at 5.00% per annum and is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, and commenced on March 31, 2020. For the April 2020 Notes, the interest rate is 3.75% per annum and is payable bi-annually in advance on May 1 and November 1 of each year, and commenced on November 1, 2020. For the November 2020 Notes, the interest rate is 0.00% per annum.

On May 17, 2021, a total of 3,190,345 shares were issued on conversion of $39.1 million principal amount of February 2020 Notes. NaN gain or loss was recognized on conversion. On conversion, non-current borrowings with a carrying value of $28.4 million and non-current derivative financial liabilities with a fair value of $90.6 million were reclassified to equity. The increase in equity resulted in an increase to share capital of $0.1 million and to share premium of $118.9 million.

On August 6, 2021, a total of 7,013,405 shares were issued on conversion of $85.9 million principal amount of February 2020 Notes. NaN gain or loss was recognized on conversion. On conversion, non-current borrowings with a carrying value of $63.1 million and non-current derivative financial liabilities with a fair value of $241.6 million were reclassified to equity. The increase in equity resulted in an increase to share capital of $0.3 million and to share premium of $304.4 million.

On October 1, 2021, a total of 6,122,250 shares were issued on conversion of $75.0 million principal amount of February 2020 Notes. NaN gain or loss was recognized on conversion. On conversion, non-current borrowings with a carrying value of $55.2 million and non-current derivative financial liabilities with a fair value of $152.8 million were reclassified to equity. The increase in equity resulted in an increase to share capital of $0.2 million and to share premium of $207.7 million.

February 2020 Notes

Each $1,000 of principal of the February 2020 Notes will initially be convertible into 81.63 shares of the Group’s common stock, which is equivalent to an initial conversion price of $12.25 per share, in each case, subject to adjustment upon the occurrence of specified events set forth in the indenture governing such series. Holders of these notes may convert their notes at their option at any time until the maturity date of December 31, 2025.

Upon conversion of these notes, the Group will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Group’s election. If the Group satisfies its conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of its common stock, the amount of cash and shares of common stock, if any, due upon conversion of the February 2020 Notes, as applicable, will be based on a daily conversion value (as defined in the indenture governing the applicable series of Convertible Notes) calculated on a proportionate basis for each trading day in the applicable observation period.

If a change of control (as defined in the indenture) occurs prior to the applicable maturity date, holders of the February 2020 Notes, as applicable, may require the Group to repurchase all of their notes for cash at a 50% premium and any unpaid interest, or an equity equivalent based on a pre-set make whole calculation based on the prevailing share price at the time.

The Group may redeem the February 2020 Notes, in whole, at any time on or after February 5, 2024 at a price equal to 165% of the principal amount of the February 2020 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

In accordance with the accounting guidance in IFRS 9 on embedded conversion features, the Group valued and bifurcated the conversion option associated with the February 2020 Notes from the respective host debt

F-58

Notes to the Consolidated financial statements (continued)

instrument, which is referred to as a debt discount, and initially recorded the conversion option at $81.9 million as a derivative financial liability. The resulting debt discount on the notes is amortized to interest expense at an effective interest rate of 13.2% over the contractual terms of these notes. The Group allocated $0.8 million of debt issuance costs to the derivative financial liability component which was expensed immediately to the Consolidated statement of operations and the remaining $1.7 million of debt issuance costs are amortized to finance costs under the effective interest rate method over the contractual terms of these notes.

April 2020 Notes

Each $1,000 of principal of the April 2020 Notes will initially be convertible into 61.99 shares of the Group’s common stock, which is equivalent to an initial conversion price of $16.13 per share, in each case, subject to adjustment upon the occurrence of specified events set forth in the indenture governing such series. Holders of these notes may convert their notes after September 30, 2020, if the share price exceeds 130% of the conversion price consecutively for thirty days prior.

Upon conversion of these notes, the Group will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Group’s election. If the Group satisfies its conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of its common stock, the amount of cash and shares of common stock, if any, due upon conversion of the April 2020 Notes, as applicable, will be based on a daily conversion value (as defined in the indenture governing the applicable series of Convertible Notes).

If a fundamental change (as defined in the indenture governing these Convertible Notes) occurs prior to the applicable maturity date, holders of these notes, as applicable, may require the Group to repurchase all of the April 2020 Notes for cash at a repurchase price equal to the principal amount of the April 2020 Notes to be repurchased, plus accrued and unpaid interest, if any, up to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events occur prior to the applicable maturity date of the April 2020 Notes, the Group may redeem the April 2020 Notes in whole, at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, up to but excluding, the redemption date. Further, calling any April 2020 Notes for redemption will be subject to a “make-whole” premium and therefore the conversion rate applicable to the conversion of that note will be increased in certain circumstances if it is converted during a specified period after it is called for redemption.

In accordance with the accounting guidance in IFRS 9 on embedded conversion features, the Group valued and bifurcated the conversion option associated with the April 2020 Notes from the host debt instrument, which is referred to as a debt discount, and initially recorded the conversion option of $113.5 million as a derivative financial liability. The resulting debt discount on the April 2020 Notes is amortized to finance costs at an effective interest rate of 9.7% over the contractual terms of these notes. The Group allocated $3.0 million of debt issuance costs to the derivative financial liability component which was expensed immediately to the Consolidated statement of operations and the remaining $7.6 million of debt issuance costs are amortized to finance costs under the effective interest method over the contractual terms of these notes.

The Group may redeem the April 2020 Notes, in whole, at any time on or after May 6, 2024, only if the share price is 130% of the note conversion price for thirty consecutive trading days prior, in addition to the principal being subject to “make-whole” conversion rate adjustments. If the Group experiences a fundamental change triggering event (as defined in the Indenture), the Group might be required by the holders of the April 2020 Notes to repurchase their notes at a cash repurchase price equal to the principal amount of the April 2020 Notes to be repurchased, plus accrued and unpaid interest, if any, up to, but excluding, the fundamental change repurchase date.

November 2020 Notes

Each $1,000 of principal of the November 2020 Notes will initially be convertible into 30.97 shares of the Group’s common stock, which is equivalent to an initial conversion price of $32.29 per share, in each case, subject to adjustment upon the occurrence of specified events set forth in the indenture governing such series. Holders of

F-59

Notes to the Consolidated financial statements (continued)

these notes may convert their notes at their option at any time until prior to the close of business on the second scheduled trading day immediately preceding the maturity date of November 15, 2030.

Upon conversion of these shares, depending on the identity of the holder, the Group will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Group’s election. If the Group satisfies its conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of its common stock, the amount of cash and shares of common stock, if any, due upon conversion of the notes, as applicable, will be based on a daily conversion value (as defined in the indenture governing the applicable series of Convertible Notes).

If certain events occur that constitute a “fundamental change” (as defined in the indenture governing the terms of the November 2020 Notes), holders of the November 2020 Notes will have the right to require the Group to repurchase all or some of their November 2020 Notes for cash at a repurchase price equal to 100% of their principal amount, plus all accrued and unpaid special interest, if any, up to, and including, the maturity date. The Group will, under certain circumstances, increase the conversion rate for holders who convert November 2020 Notes in connection with a fundamental change.

Alibaba and Richemont may require the Group to repurchase all or part of their respective November 2020 Notes on June 30, 2026 at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any, up to, but excluding, such repurchase date.

The Group will not be able to redeem the November 2020 Notes prior to November 15, 2023, except in the event of certain tax law changes. On or after November 15, 2023, the Group may redeem, for cash, all or part of the relevant November 2020 Notes if the last reported sale price of its Class A ordinary shares has been at least 130% (or 200%, if over 5% of the relevant November 2020 Notes are held at the time by Alibaba or Richemont) of the conversion price then in effect for at least twenty trading days (whether or not consecutive) during any thirty consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Group provides notice of the redemption, at a redemption price equal to 100% of the principal amount of the November 2020 Notes to be redeemed, plus accrued and unpaid special interest, if any, up to, but excluding, the redemption date.

In accordance with the accounting guidance in IFRS 9 on embedded conversion features, the Group valued and bifurcated the conversion option associated with the November 2020 Notes from the host debt instrument, which is referred to as a debt discount, and initially recorded the conversion option of $446.0 million as a derivative financial liability. The resulting debt discount on the November 2020 Notes is amortized to finance costs at an effective interest rate of 14.9% over the contractual terms of these notes. The effective interest rate previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2020, was updated as a result of the revision referred to in Note 2, Significant accounting policies. The Group allocated $12.2 million of debt issuance costs to the derivative financial liability component which was expensed immediately to the Consolidated statement of operations and the remaining $4.2 million of debt issuance costs are amortized to finance costs under the effective interest method over the contractual terms of these notes.

The convertible borrowings are presented in the Consolidated statement of financial position as follows (in thousands):

	2020 ⁽¹⁾			2021

At January 1	$	-		$	617,789
Face value of notes issued		1,250,000			-
Value of embedded derivatives		(641,448	)		-
		608,552			617,789
Transaction costs		(13,539	)		-
Interest expense		41,851			67,638
Interest paid		(19,075	)		(22,950	)
Conversion of February 2020 Notes		-			(146,673	)
Total non-current borrowings	$	617,789		$	515,804

F-60

Notes to the Consolidated financial statements (continued)

(1) Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

The value of the three conversion options discussed above are subsequently remeasured at fair value at each reporting date, and the changes in the fair value are recorded in the Consolidated statement of operations within the gain/(loss) on items held at fair value and remeasurements line. The fair values of the embedded derivatives are determined using an option pricing model, using assumptions based on market conditions at the reporting date. For further details refer to Note 28, Financial instruments and financial risk management. For the year ended December 31, 2021, the Group recorded a fair value gain on remeasurement of $1,638.8 million (2020: loss on remeasurement of $2,354.7 million) related to the decrease in the fair value of these conversion options mainly as a result of the share price decreasing from $63.81 to $33.43.

24.	Provisions

Provisions consist of the following (in thousands):

	Dilapidations provision			Share-based payments employment taxes provision			Provision for withholding taxes			Other provisions			Total
Current liabilities
At January 1, 2020	$	-		$	-		$	-		$	-		$	-
Additional provision in the year		-			-			-			12,498			12,498
Release of provision in the year		-			-			-			(800	)		(800	)
Utilized provision in the year		-			-			-			(1,630	)		(1,630	)
Transfer from non-current provisions		-			12,105			4,100			873			17,078
At December 31, 2020		-			12,105			4,100			10,941			27,146
Additional provision in the year		178			2			-			3,606			3,786
Release of provision in the year		-			(4,427	)		-			(584	)		(5,011	)
Utilized provision in the year		(308	)		-			(3,500	)		(9,233	)		(13,041	)
Transfer from non-current provisions		277			-			1,901			-			2,178
Foreign exchange		(5	)		-			-			(468	)		(473	)
At December 31, 2021	$	142		$	7,680		$	2,501		$	4,262		$	14,585

Non-current liabilities
At January 1, 2020	$	3,352		$	7,979		$	11,500		$	873		$	23,704
Additional provision in the year		3,039			131,836			-			1,011			135,886
Transfer to current provisions		-			(12,105	)		(4,100	)		(873	)		(17,078	)
Release of provision in the year		(757	)		(945	)		-			-			(1,702	)
Utilized provision in the year		-			(11,758	)		-			-			(11,758	)
Foreign exchange		36			25			-			-			61
At December 31, 2020		5,670			115,032			7,400			1,011			129,113
Additional provision in the year		2,125			2,135			-			-			4,260
Transfer to current provisions		(277	)		-			(1,901	)		-			(2,178	)
Release of provision in the year		(284	)		(45,987	)		(500	)		(168	)		(46,939	)
Utilized provision in the year		(4	)		(22,516	)		-			(841	)		(23,361	)
Foreign exchange		(292	)		(60	)		-			2			(350	)
At December 31, 2021	$	6,938		$	48,604		$	4,999		$	4		$	60,545

The dilapidations provision reflects the best estimate of the cost to restore leasehold property in line with the Group’s contractual obligations. Based on a detailed analysis the Group has estimated a liability of $7.1 million (2020: $5.7 million). In estimating the liability, the Group has made assumptions which are based on past experience. Assuming the leases are not extended, the Group expects the economic outflows to match the

F-61

Notes to the Consolidated financial statements (continued)

contractual end date of the leases. The leases have an average lease term of eight years with an average of five years remaining.

The share-based payments employment taxes provision reflects the best estimate of the cost to settle employment related taxes in connection with the Group's share-based payments. This is based on the most recent share price and the number of share options vested and un-exercised, or expected to vest where the Group has a future obligation to settle employment related taxes. The Group has estimated a liability of $56.3 million at December 31, 2021 (2020: $127.1 million). When a share option is exercised, the liability for employment related taxes becomes due to the relevant tax authority. During 2021, $22.5 million (2020: $11.8 million) was transferred from provisions to trade and other payables. We expect the provision to be fully utilized in 8.11 years (2020: 8.94 years), being the weighted average remaining contracted life of options outstanding at December 31, 2021. It is likely that this provision will be utilized over a shorter period, however, this is dependent on when the option holder decides to exercise, which the Group is not in control of.

25.	Contracted commitments, contingencies and guarantees

Contingent liabilities

Litigation

From time to time we are engaged in disputes and claims. We believe that the ultimate outcome of these proceedings will not have a material adverse impact on our consolidated financial position or results of operations, but the outcome of these proceedings is inherently difficult to predict. There can be no assurance that we will prevail in any such litigation. Liabilities for material claims against us are recognized as a provision when an outflow of economic resources is considered probable and can be reasonably estimated. Legal costs associated with claims are expensed as incurred.

26.Deferred tax

As a result of the acquisition of New Guards and CuriosityChina, the Group in 2019 recognized a deferred tax liability of $232.6 million on acquired intangibles. The cumulative deferred tax release is equal to $84.2 million of which $32.2 million in 2021 is the effect of the impairment of the carrying value of the intangible asset associated with the New Guards brand portfolio.

As a result of the purchase price allocation exercise arising from the acquisition of Ambush, a deferred tax liability of $1.3 million has been recognized in 2020 as a temporary difference. The cumulative deferred tax release is equal to $0.4 million, of which $0.3 million is during 2021.

As a result of the purchase price allocation exercise arising from 2021 acquisitions, a deferred tax liability of $6.5 million was recognized in 2021 as a temporary difference. The deferred tax release in 2021 is equal to $0.2 million.

Deferred tax assets of $12.0 million (2020: $5.7 million) mainly relate to inventory write off provision and differences between Italian GAAP and IFRS GAAP in New Guards that can be carried forward indefinitely. New Guards calculates the tax due for financial statements purposes according to Italian GAAP. Deferred tax assets of $1.3 million (2020: $4.1 million) are related to tax incentives credits available for Farfetch Portugal due to research and development activity and fixed assets investments, which can be carried forward for ten and eight years, respectively. The Group has estimated that deferred tax assets will be recoverable using the future taxable incomes based on the business plans of the Italian and Portuguese subsidiaries.

F-62

Notes to the Consolidated financial statements (continued)

Deferred tax assets and liabilities consist of the following at December 31 (in thousands):

	Note		Deferred tax assets			Deferred tax liabilities
At January 1, 2020			$	5,324		$	219,789
Deferred tax released to profit or loss⁽¹⁾		5		7,682			(39,087	)
Foreign exchange				614			(4	)
Reclassifications to balance sheet				(64	)		-
Deferred tax recognized on acquisitions to balance sheet		5		-			1,765
At December 31, 2020			$	13,556		$	182,463
Deferred tax released to profit or loss				393			(33,275)
Foreign exchange				(913	)		(296	)
Reclassifications to balance sheet				298			672
Deferred tax recognized on acquisitions to balance sheet		5		-			6,461
At December 31, 2021			$	13,334		$	156,025

Deferred tax, net liability at December 31, 2021						$	142,691

(1)

Previously reported comparatives for the years ended December 31, 2020 and 2019 have been re-presented for comparability with condensed disclosure for the year ended December 31, 2021

Unrecognized deferred tax assets

Unutilized trading tax losses

The Group has accumulated unutilized tax losses carried forward as at December 31, 2021 of $1,487.7 million (2020: $953.1 million). Deferred tax assets are recognized to the extent that it is probable that there are sufficient suitable deferred tax liabilities or future taxable profits that will be available against which deductible temporary differences can be utilized. Subject to specific legislation regarding changes in ownership and the nature of trade, trading losses are available to be either carried forward indefinitely or for a significant time period.

	Local currency	2020		2020		2021		2021
		Local ’000		$’000		Local ’000		$’000
UK trading losses	GBP		709,446		739,879		882,753		1,191,629
US Net Operating Losses (“NOL”)	USD		195,565		195,565		276,649		276,649
Brazil trading losses	BRL		72,760		14,107		74,570		13,377
Japan trading losses	JPY		301,340		2,902		525,141		4,560
Hong Kong trading losses	HKD		5,149		664		11,795		1,512
					953,117				1,487,727

UK trading losses are available to be carried forward indefinitely. Legislation has been introduced with effect from April 1, 2017, whereby losses arising after April 1, 2017 can be set against total profits of the Company. The amount of total profits that can be offset by brought forward losses is restricted to the first £5.0 million of profits, and an additional 50% of profits that exceed £5.0 million.

US NOL as at December 31, 2021 of $(276.6) million (2020: $(195.6) million) are available to be carried forward for a period of twenty years. The carry forward NOLs start to expire in different years, the first of which is December 31, 2030. NOLs generated after January 1, 2018 have an indefinite carry forward period but are subject to an 80% limitation per year. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (i) removes the 80% limitation on the use of NOLs enacted by the Tax Cuts and Jobs Act of 2017 (the “TCJA”) with respect to NOLs carried to any taxable year beginning before January 1, 2021, and thus, NOLs (whether carried forward or carried back) can generally be used to offset fully taxable income in these taxable years; and (ii) provides for a carryback of any NOL arising in a taxable year beginning after December 31, 2017 and before January 1, 2021, to each of the five taxable years preceding the taxable year in which the NOL arose.

F-63

Notes to the Consolidated financial statements (continued)

Brazilian and Hong Kong trading losses as at December 31, 2021 are available to be carried forward indefinitely but utilization of losses in respect of Brazil are restricted to 30% against taxable income in future taxable periods.

Japanese NOL carry forward incurred before April 1, 2018 can be carried forward for nine years, incurred during fiscal years starting on or after April 1, 2018 can be carried forward for ten years and utilization of losses are restricted to 50% against taxable income in future taxable periods.

Unutilized future tax deductions on employee share option gains

The Group has an unrecognized gross deferred tax asset of approximately $872.8 million (2020: $1,638.8 million) in respect of a future tax deduction on share options that are unexercised as at December 31, 2021 that, when exercised, will result in a gain and a potential deduction for corporation tax purposes. A net deferred tax asset of approximately $214.7 million (2020: $319.1 million) will be recognized to the extent that there are sufficient suitable deferred tax liabilities available.

Unutilized future tax deductions on Goodwill

The Group has an unrecognized deferred tax asset of approximately $5.3 million (2020: $5.3 million) in respect of goodwill recognized on the acquisition of Stadium Goods. The unrecognized deferred tax asset results from the future tax deductions available in relation to this item of goodwill exceeding its statements of financial position value. A net deferred tax asset is only recognized where it can be shown that it is probable that future taxable profits will be available against which the Group can utilize the asset.

27.	Related party disclosures

Platforme International Limited is a related party of J M F Neves. The Group generated commission of $0.4 million and made purchases of $0.1 million from Platforme International Limited during the year ended December 31, 2021 (2020: commission of $0.6 million). The Group had a $0.2 million receivable as at the end of December 31, 2021 (2020: $0.2 million payable).

In prior periods, Alanui S.r.L. (“Alanui”) was a related party of New Guards Group Holding S.p.A, due to it being an associate of the Group. New Guards still owns a stake of 53% and gained control over the entity on March 16, 2021 following a change in the shareholder agreement. The Group recognized sales of $0.2 million to Alanui in the two months up until consolidation on March 1, 2021. The impact of consolidating Alanui’s results from March 1, 2021 rather than March 16, 2021 was immaterial. We recognized sales of $1.1 million during the year ended December 31, 2020. As at December 31, 2020, we had trade receivables of $0.5 million and trade payables of $0.4 million. Refer to Note 5, Business combinations for further detail.

Key management includes members of the Company’s senior management and the board of directors. The disclosure amounts below (in thousands) are based on the expense recognized in the Consolidated statement of operations in the respective year.

	2020		2021
Short-term employee benefits	$	1,676	$	2,456
Termination benefits		32		36
Share-based compensation		26,300		37,742
	$	28,008	$	40,234

Other than disclosed above, there were no other transactions or outstanding balances, including commitments, with related parties.

The Group’s ultimate controlling party is J M F Neves by virtue of holding the majority of voting rights in the Group.

F-64

Notes to the Consolidated financial statements (continued)

28.	Financial instruments and financial risk management

Fair value and present value measurement of financial instruments is presented through the use of a three-level fair value hierarchy that prioritizes the inputs used in each of the valuation techniques for fair value and present value calculations.

The Group maintains policies and procedures to value instruments using the most relevant data available. The Group recognizes the following financial instruments at fair value:

•

Short-term investments, being the cash investments in variable net asset value funds, measured using Level 1 valuation inputs.

•

Derivative financial instruments, being forward foreign currency and option contracts, measured using Level 2 valuation inputs and valued using discounted cash flows and suitable option pricing models respectively; and

•

Derivative financial instruments, being the embedded derivatives relating to the February 2020 Notes, April 2020 Notes and November 2020 Notes, measured using Level 2 valuation inputs.

The Group recognizes the following financial liabilities at present value:

•

Put and call option liabilities, associatedwith the non-controlling interests arising from the transactions with Chalhoub, measured using Level 2 valuation inputs; and

•

Put and call option liability, associated with the strategic arrangement with Alibaba and Richemont, measured using Level 2 valuation inputs.

•

Put and call option liabilities, associated with the non-controlling interests arising from transactions with Alanui and Palm Angels using Level 3 valuation inputs.

The forward foreign currency and option contracts are measured using Level 2 inputs with the key ones being quoted foreign currency exchange rates.

The embedded derivatives relating to the February 2020 Notes, April 2020 Notes and November 2020 Notes are measured using an option pricing model with Level 2 inputs, with the key ones being the Group’s share price at the end of the reporting period, the risk-free rate of treasury bonds with similar terms to maturity and the volatility of the Group’s share price.

The put and call option liability associated with the non-controlling interests arising from the transactions with Chalhoub and the put and call option associated with the strategic arrangement with Alibaba and Richemont are measured using appropriate option valuation models. This is a Level 2 measurement with the key inputs being the Group’s share price at the end of the reporting period, the risk-free rate and credit spread.

The put and call option liability associated with the non-controlling interests arising from the transactions with Alanui and Palm Angels are measured using appropriate option valuations with Level 3 inputs, with the key one being future forecast information.

There have been no significant changes in the measurement and valuation techniques used to value instruments in existence at December 31, 2020, or transfers between levels of the fair value hierarchy used in measuring the fair value of financial instruments, or changes in the classification of financial assets and liabilities. The embedded derivatives relating to the February 2020 Notes and April 2020 Notes recognized during the period ended December 31, 2020 were valued using the Black Scholes option pricing model and the embedded derivative relating to the November 2020 Notes was valued using the Binomial option pricing model. For both of these models, the key inputs are the Group’s closing share price at December 31, 2021, share price volatility and the risk free rate of US treasury bonds of similar terms to maturity.

F-65

Notes to the Consolidated financial statements (continued)

February 2020 Notes assumptions

	2020			2021
Embedded derivative
Closing share price	$	63.81		$	33.43
Risk free rate		0.36	%		1.12	%
Expected volatility		36.93	%		38.46	%
Remaining life (years)		5.00			4.00

February 2020 Notes – sensitivity analysis

Assumption	Increase/(decrease) in profit or loss			Increase/(decrease) in profit or loss
	2020			2021
Share Price increases by $1	$	(20,259	)	$	(3,931	)
Risk free rate increases by 1%		(11,366	)		(1,516	)
Expected volatility increases by 1%		(633	)		(228	)

April 2020 Notes assumptions

	2020			2021
Embedded derivative
Closing share price	$	63.81		$	33.43
Risk free rate		0.65	%		1.29	%
Expected volatility		37.22	%		36.68	%
Remaining life (years)		6.33			5.33

April 2020 Notes – sensitivity analysis

Assumption	Increase/(decrease) in profit or loss			Increase/(decrease) in profit or loss
	2020			2021
Share Price increases by $1	$	(24,215	)	$	(25,113	)
Risk free rate increases by 1%		(20,233	)		(13,104	)
Expected volatility increases by 1%		(2,296	)		(2,898	)

November 2020 Notes assumptions

	2020			2021
Embedded derivative
Closing share price	$	63.81		$	33.43
Risk free rate		0.92	%		1.56	%
Expected volatility		36.89	%		35.97	%
Credit spread (basis points)		344.47			350.00

F-66

Notes to the Consolidated financial statements (continued)

November 2020 Notes – sensitivity analysis

Assumption	Increase/(decrease) in profit or loss			Increase/(decrease) in profit or loss
	2020			2021
Share Price increases by $1	$	(13,673	)	$	(10,044	)
Credit spread increases by 50 basis points		(2,504	)		(5,469	)
Expected volatility increases by 1%		(5,203	)		(2,451	)

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns. At December 31, 2021, the capital structure consisted of equity and debt, and the Group was not subject to any externally imposed capital requirements.

The Group has identified 2 principal risks, being market risk (foreign exchange) and liquidity risk.

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measurement and the bases for recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in Note 2, Significant accounting policies.

Categories of financial instruments

Financial assets (in thousands)

	Amortized cost		Amortized cost
	2020		2021
Current
Trade receivables	$	49,833	$	63,046
Other receivables		123,492		179,964
Cash and cash equivalents		1,573,421		1,363,128
Non-current
Other receivables		58,081		31,225
Total	$	1,804,827	$	1,637,363

	Fair value		Fair value
	2020		2021
Foreign currency derivatives - held at FVTPL	$	1,260	$	410
Foreign currency derivatives - held as cash flow hedges		28,982		7,600
Derivative financial assets	$	30,242	$	8,010

	Fair value		Fair value
	2020		2021
Short term investments - held at FVTPL	$	-	$	99,971
Short term investments	$	-	$	99,971

F-67

Notes to the Consolidated financial statements (continued)

Financial liabilities (in thousands)

	Amortized cost		Amortized cost
	2020		2021
Trade payables	$	277,827	$	342,938
Other payables		16,642		22,208
Total	$	294,469	$	365,146

	Fair value		Fair value
	2020		2021
Foreign currency derivatives - held at FVTPL	$	238	$	35
Foreign currency derivatives - held as cash flow hedges		17,189		21,083
Current derivative financial liabilities	$	17,427	$	21,118

	Fair value		Fair value
	2020		2021
$250.0 million 5% convertible note embedded derivative - held at FVTPL	$	1,060,167	$	90,682
$400.0 million 3.75% convertible note embedded derivative - held at FVTPL		1,217,491		492,801
$600.0 million 0.00% convertible note embedded derivative - held at FVTPL		718,562		288,945
Non-current derivative financial liabilities	$	2,996,220	$	872,428

	Present value		Present value
	2020		2021
Put and call option liabilities - non-current	$	348,937	$	836,609
Put and call option liabilities - current		-		8,321
Total Put and call option liabilities	$	348,937	$	844,930

	2020 ⁽¹⁾		2020		2021		2021
	Carrying value		Fair value		Carrying value		Fair value
At December 31
Non-current borrowings	$	617,789	$	1,058,306	$	515,804	$	859,132

(1) Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

With the exception of the Group’s non-current borrowings, the carrying amount of the Group’s financial assets and financial liabilities approximate their fair value.

The notional amounts of the Group’s outstanding foreign currency derivatives at year end are:

	Notional		Notional
	2020		2021
Foreign currency derivatives	$	1,120,038	$	1,616,383

The average exchange rate for GBP:USD forward exchange contracts is 1.37 (2020: 1.31), for EUR:USD forward exchange contracts is 1.13 (2020: 1.19), for GBP:USD forward currency call option contracts is n/a (2020: 1.35) and for GBP:USD forward currency put option contracts is n/a (2020: 1.28). As at December 31, 2021, these foreign exchange contracts were in a net liability position.

Financial risk management objectives

F-68

Notes to the Consolidated financial statements (continued)

Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

The Group seeks to minimize the effects of these risks, where appropriate, by using derivative financial instruments to hedge these risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk and the use of derivatives. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Market risk

The Group’s activities expose it primarily to the financial risk of changes in foreign currency exchange rates (see table below, in thousands). The Group enters into derivative financial instruments to manage its exposure to foreign currency risk.

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

The Group uses forward currency contracts and foreign exchange option contracts to hedge its foreign currency risks. Where the criteria for hedge accounting are not met, derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value with movements recorded in the Consolidated statement of operations. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Where all relevant criteria are met, hedge accounting is applied to minimize earnings volatility.

	Fair value through profit or loss
	Asset				Liability
	2020		2021		2020		2021
Forward foreign exchange contracts	$	1,260	$	410	$	238	$	35
Total	$	1,260	$	410	$	238	$	35

	Cashflow hedges
	Asset				Liability
	2020		2021		2020		2021
Forward foreign exchange contracts	$	28,982	$	7,600	$	17,189	$	21,083
Total	$	28,982	$	7,600	$	17,189	$	21,083

Liquidity risk

The Group monitors its liquidity risk to maintain a balance between continuity of funding and flexibility. This helps the Group achieve timely fulfilment of its obligations while sustaining the growth of the business. We have policies in place for managing liquidity risk, which our finance department implements and periodically review.

The table below (in thousands) analyses the Group’s financial liabilities into relevant groupings based on the remaining period from the reporting date to the contractual maturity date. Amounts due within twelve months equal their carrying balances, as the impact of discounting is not significant.

	Less than one year		Less than one year
	2020		2021
Trade and other payables	$	294,469	$	365,146
Put and call option liabilities		-		8,321
Total current	$	294,469	$	373,467

F-69

Notes to the Consolidated financial statements (continued)

	More than one year		More than one year
	2020 ⁽¹⁾		2021
Put and call option liabilities	$	348,937	$	836,609
Borrowings		617,789		515,804
Total non-current	$	966,726	$	1,352,413

(1) Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

The following table analyses the Group’s non-derivative financial liabilities and gross and net settled derivative financial instruments into relevant maturity groupings, based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contracted cash flows and may therefore not reconcile to the amounts disclosed in the Consolidated statement of financial position for borrowings and derivative financial instruments.

	Less than twelve months			Between one and three years		Between three and five years		More than five years
At December 31, 2021
Non derivative financial liabilities
Convertible bonds - $250.0 million	$	-		$	-	$	50,000	$	-
Convertible bonds - $400.0 million		-			-		-		400,000
Convertible bonds - $600.0 million		-			-		-		600,000
Put and call option liabilities		8,321			188,261		656,640		-
Contingent consideration		8,822			9,064		-		-
Obligations under leases		54,216			73,685		51,124		90,801
Trade and other payables		434,199			-		-		-
Net settled derivatives
Outflow		1,219			-		-		-
Gross settled derivatives
Inflow		(1,570,026	)		-		-		-
Outflow		1,590,865			-		-		-

	Less than twelve months			Between one and three years		Between three and five years		More than five years
At December 31, 2020
Non derivative financial liabilities
Convertible bonds - $250.0 million	$	12,500		$	25,000	$	275,000	$	-
Convertible bonds - $400.0 million		15,000			30,000		30,000		422,500
Convertible bonds - $600.0 million		-			-		-		600,000
Put and call option liabilities		-			348,937		-		-
Obligations under leases		33,703			61,296		50,800		61,430
Trade and other payables		371,289			-		-		-
Net settled derivatives
Outflow		1,900			-		-		-
Gross settled derivatives
Inflow		(1,375,542	)		-		-		-
Outflow		1,366,819			-		-		-

Comparative amounts for gross settled derivatives inflow and outflows were previously disclosed on a net basis and have been represented on a gross basis. Previously these were disclosed as financial assets of $30.2 million and financial liabilities of $15.5 million.

F-70

Notes to the Consolidated financial statements (continued)

In the tables above, trade and other payables comprises of trade payables amounting to $342.9 million (2020: $277.8 million), other payables amounting to $22.2 million (2020: $16.6 million) and social security and other taxes of $69.1 million (2020: $76.8 million).

The put and call option liabilities relate to non-controlling interests arising from the transactions with Palm Angels and Chalhoub, as well as the strategic agreement with Alibaba and Richemont. The non-current liabilities are comprised of $150.3 million (2020: $nil) relating to Palm Angels, $188.3 million (2020: $344.4 million) relating to Chalhoub and $498.0 million (2020: $nil) relating to the strategic agreement with Alibaba and Richemont. The liability relating to Chalhoub is expected to mature in 2022 and will be settled in the first quarter of 2023. The latest maturity of the liability relating to Palm Angels is in 2026. The latest maturity of the liability relating to the strategic agreement with Alibaba and Richemont is in 2026. See Note 33, Non-controlling interests for further information relating to the movements in the non-controlling interest.

Credit risk

Credit risk is the risk that financial loss arises from the failure of a consumer to meet its obligations under a contract. Due to the nature of operations the Group does not have significant exposure to credit risk. The trade receivables balance is spread across a large number of different customers. The Group has policies in place to ensure that wholesale sales are made to customers with an appropriate credit history. Sales to retail customers are made in cash or via credit cards. In addition, receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant and default rates have been historically low. A customer is deemed to have defaulted when the Group considers that it will not be able to make contractual payments when due.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. The Group applies a loss allowance to trade and other receivables. As at December 31, 2021 all trade and other receivables were considered current being due within thirty days. The expected loss rate the Group applies for trade and other receivables is 1.0% (2020: 1.0%).The expected loss rates are reviewed annually, or when there is a significant change in external factors potentially impacting credit risk, and are updated where management’s expectations of credit losses change.

The expected loss rates are based on the payment profiles of sales up to a period of thirty-six months before December 31, 2021 or January 1, 2021, respectively, and the corresponding historical credit losses experienced within this period which were not significant. The historical loss rates are adjusted to reflect current and forward looking information on macroeconomic factors affecting the ability of the consumers to settle the receivables. In addition, certain individual customers (where there is objective evidence of credit impairment) have been identified as having a significantly elevated credit risk and have been provided for on a specific basis.

The majority of the Group’s cash and cash equivalents balance is held in money market funds which are regulated by securities and market authorities. These consist of highly rated mutual investment funds which are permitted to diversify portfolio investments through high quality debt securities meeting regulatory mandated requirements. As such, the Group is not exposed to any material credit risk in relation to the cash and cash equivalents balance.

Interest rate risk

The Group is not subject to significant interest rate risk as currently all of its borrowings are subject to a fixed rate of interest (refer to Note 23, Borrowings for further information).

Capital risk management

The Group’s objective when managing capital is to safeguard the Group’s ability to provide returns for members and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Group manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Group. The Group raises finance through the issuance of equity and convertible senior notes to private and public investors.

F-71

Notes to the Consolidated financial statements (continued)

In line with the Group’s objectives, during the year ended December, 31, 2020, the Group issued the February 2020 Notes, April 2020 Notes and November 2020 Notes for total net proceeds of $1,241.9 million.

At December 31, 2021, the Group holds restricted cash of $2.3 million (2020: $nil million).

The Group is not subject to any externally imposed capital requirements. The capital structure is as follows (in thousands):

	2020 ⁽¹⁾			2021

Total borrowings ⁽¹⁾	$	3,805,412		$	1,602,741
Less: cash and cash equivalents		(1,573,421	)		(1,363,128	)
Net debt ⁽¹⁾		2,231,991			239,613
Total (deficit)/equity ⁽¹⁾		(1,658,642	)		270,616
Total	$	573,349		$	510,229

(1) Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

The table below reconciles the movements in our financing liabilities during the year:

						Non-cash movements
	As at December 31, 2020 ⁽¹⁾		Cash movement			Early conversion of February 2020 Notes			Foreign exchange movement			Finance costs		Fair value changes & other			As at December 31, 2021
Borrowings - leases	$	191,403	$	(35,388	)	$	-		$	(8,111	)	$	9,137	$	57,468		$	214,509
Non-current borrowings - convertible notes		617,789		(22,949	)		(146,673	)		-			67,638		-			515,805
Borrowings-related derivative financial instruments		2,996,220		-			(484,956	)		1			-		(1,638,837	)		872,428
Financing liabilities	$	3,805,412		(58,337	)		(631,629	)		(8,110	)	$	76,775		(1,581,369	)	$	1,602,742

						Non-cash movements
	As at December 31, 2019		Cash movement			Bifurcation of embedded derivative			Foreign exchange movement		Finance costs		Fair value changes & other			As at December 31, 2020 ⁽¹⁾
Borrowings - leases	$	119,318	$	(25,808	)	$	-		$	4,539	$	6,757	$	86,597		$	191,403
Non-current borrowings - convertible notes ⁽¹⁾		-		1,223,042			(641,448	)		-		41,851		(5,656	)		617,789
Borrowings-related derivative financial instruments		-		-			641,448			-		-		2,354,772			2,996,220
Financing liabilities	$	119,318	$	1,197,234		$	-		$	4,539	$	48,608	$	2,435,713		$	3,805,412

(1) Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

Mainly as a result of the gains on items held at fair value and remeasurements during the year, the Company’s total equity increased from $(1,658.6) million as at December 31, 2020 (refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives) to $270.6 million as at December 31, 2021. The total equity previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2020, was updated as a result of the revision referred to in Note 2.1, Basis of preparation. The gains on items held at fair value and remeasurements during the year is mainly driven by the year end revaluation of the embedded derivatives relating to the convertible senior notes discussed in Note 23, Borrowings. Unless earlier converted, redeemed or repurchased in accordance with their terms, the notes may be settled, at Farfetch’s election and subject

F-72

Notes to the Consolidated financial statements (continued)

to certain exceptions and conditions, in Class A ordinary shares of Farfetch, cash, or a combination of cash and Class A ordinary shares of Farfetch.

The main purpose of the Group’s financial instruments is to finance the Group’s operations.

The main risks from the Group’s financial instruments are currency risk and liquidity risk. The Board reviews and approves policies, which have remained substantially unchanged for the year under review, for managing these risks.

Hedge accounting classification and impact

The Group designates certain forward foreign exchange contracts and foreign exchange option contracts as cash flow hedges of forecast foreign currency revenue and costs. During the current year, gains of $9.9 million (2020: losses of $16.4 million) were removed from the cash flow hedge reserve. $nil million (2020: gain of $0.1 million) was taken to revenue, a loss of $1.4 million (2020: gain of $0.8 million) was taken to cost of revenue and a gain of $13.4 million (2020: a loss of $18.5 million) was taken to selling, general and administration expenses. A loss of $2.1 million (2020: a gain of $1.2 million) was added to inventories in the Consolidated statement of financial position.

The Group uses a qualitative method for assessing hedge effectiveness. The hedge is assessed at inception and throughout the life of the hedge. Effectiveness between the hedged item and hedging instrument is tested by comparing the critical terms of both items and concluding that they are offsetting. The key sources of risk that could result ineffectiveness include credit risk, a change in the economic relationship between the hedged item and the hedging instrument, a potential change in timing in relation to the hedged item, the currency basis risk, exchange rate volatility and a substantial reduction in the market liquidity for the hedging instrument.

Under the Group’s hedging policy, the critical terms of the foreign currency derivatives must align with the hedged items. The contracts are denominated in the same currency as the highly probable future sales and purchases, which are expected to occur within a maximum 24-month period, which determines the hedge relationship to be 1:1.

For further information on the Group’s risk management strategy and hedging activities, refer to Item 3D. “Risk Factors”.

Fair value hierarchy

The Group recognizes at fair value the derivative financial instruments, measured using a Level 2 valuation method.

There have been no significant changes in the measurement and valuation techniques, or transfers between levels of the fair value hierarchy used in measuring the fair value of financial instruments, or changes in the classification of financial assets and liabilities.

Put and call option liabilities

There have been no significant changes in the measurement and valuation techniques used to value instruments in existence at December 31, 2020.

The Group records the value of put and call option liabilities at the present value of probability-weighted future cash flows related to certain performance criteria and the fair value of our common stock at each reporting date. Further details of the Group’s put and call option liabilities are detailed below:

Chalhoub

The put and call option relating to Chalhoub is over the 20% shareholding in Farfetch International Limited (“IOM”) that the Company does not already own. The put and call options become exercisable on the earlier of December 31, 2022 and the date the agreement between Chalhoub and the Company is terminated. The options

F-73

Notes to the Consolidated financial statements (continued)

expire on the 10^th day after they become exercisable. The exercise of the options can be settled in cash or shares at the election of the Company. The estimated value of the put and call option liability related to Chalhoub is based on the present value of probability-weighted future cash flows related to certain performance criteria and the fair value of our common stock at each reporting date. Changes in the value of the put and call option liability subsequent to the acquisition date, such as changes in the probability assessment and the fair value of our common stock, are recognized in earnings in the period when the change in the estimated present value occurs. During the year ended December 31, 2019, we recognized initially put and call option liabilities of $105.6 million. Subsequently we recognized a decrease in the present value of our put and call option liabilities of $43.2 million, in gains on items held at fair value and remeasurements in our consolidated statement of operations, primarily due to a decrease in the fair value of our common stock. During the year ended December 31, 2020, we recognized an increasein the present value of our put and call option liabilities of $288.9 million, primarily due to an increase in the fair value of our common stock. During the year ended December 31, 2021, we recognized a decrease in the present value of our put and call option liabilities of $156.1 million, primarily due to a decrease in the fair value of our common stock.

Assumption	Increase/(decrease) in profit or loss			Increase/(decrease) in profit or loss
	2020			2021
Share Price increases by $1	$	(11,196	)	$	(6,521	)
Expected volatility increases by 1%		(1,776	)		(826	)
Credit spread increases by 50 basis points		3,413			939

Palm Angels

The put and call option relating to Palm Angels is over the 40% shareholding in Palm Angels that the Company does not already own. The options are exercisable on the fifth anniversary of the acquisition date or in the event of a certain bad leaver event. The exercise of the option can be settled in cash or shares at the Company’s election. The estimated value of the put and call option liability related to Palm Angels is based on the present value of expected revenue for Palm Angels in financial year 2025 and probability-weighted future revenue growth for Palm Angels between financial year 2021 and 2025. Changes in the value of the put and call option liability subsequent to the acquisition date, such as changes in the probability assessment and the expected future revenue growth, are recognized in earnings in the period when the change in the estimated present value occurs. During the year ended December 31, 2021, we recognized initially put and call option liabilities of $144.6 million. Subsequently we recognized an increase in the present value of our put and call option liabilities of $11.4 million, in losses on items held at fair value and remeasurements in our consolidated statement of operations, primarily due to an improvement in expected performance against the performance criteria.

Palm Angels – Sensitivity analysis

If expected revenue in financial year 2025 increased by 10%, the value of the put and call option would increase and the related present value remeasurement loss in the consolidated statement of operations would increase by $15.1 million.

Strategic arrangement with Alibaba and Richemont

The put-call option related to the strategic arrangement with Alibaba and Richemont allows the holder to either purchase a further 12.5% of Farfetch China after the third year of operations, and an additional option to potentially convert or require the conversion of the investment in Farfetch China to shares in Farfetch Limited, under specific conditions. Management have concluded that the fair value of the option to purchase a further 12.5% of Farfetch China is $nil as the exercise price is at fair market value as at the date of exercise.

The estimated value of the put and call option liability related to the strategic agreement with Alibaba and Richemont is based on the present value of future cash flows related to the fair value of our common stock at each reporting date. Changes in the value of the put and call option liability subsequent to the acquisition date, such as changes in the fair value of our common stock, are recognized in earnings in the period when the change in the estimated present value occurs. During the year ended December 31, 2021, we recognized initially put and call option liabilities of $744.2 million. Subsequently we recognized a decrease in the present value of our put and call

F-74

Notes to the Consolidated financial statements (continued)

option liabilities of $246.1 million, in gains on items held at fair value and remeasurements in our consolidated statement of operations, primarily due to a decrease in the fair value of our common stock.

Strategic arrangement with Alibaba and Richemont – Sensitivity analysis

Assumption	Increase/ (decrease) in profit or loss		Increase/ (decrease) in profit or loss
	2020		2021
Share Price increases by $1	$	-	$	(14,899	)
Risk free rate increases by 1%		-		(468	)
Credit spread increases by 50 basis points		-		6,075

Financial instruments sensitivity analysis

In managing currency risk the Group aims to reduce the impact of short term fluctuations on its earnings. At the end of each reporting year, the effects of hypothetical changes in currency are as follows.

Foreign exchange rate sensitivity analysis

The table below (in thousands) shows the Group’s sensitivity to U.S. dollars strengthening/weakening by 10%:

	Increase/ (decrease) in profit or loss			Increase/ (decrease) in profit or loss
	2020			2021
10% appreciation of U.S. dollars	$	24,118		$	(7,684	)
10% depreciation of U.S. dollars		(29,478	)		9,392

	Increase/ (decrease) in reserves			Increase/ (decrease) in reserves
	2020			2021
10% appreciation of U.S. dollars	$	(133	)	$	(55,374	)
10% depreciation of U.S. dollars		4,920			67,679

This analysis reflects the impact on the Consolidated statement of operations due to financial assets and liabilities held at the balance sheet date and is based on foreign currency exchange rate variances that the Group considers to be reasonably possible at the end of the reporting year. The analysis assumes that all other variables, in particular interest rates, remain constant.

	Increase/ (decrease) in profit or loss			Increase/ (decrease) in profit or loss
	2020			2021
10% appreciation of GBP	$	(21,372	)	$	2,906
10% depreciation of GBP		17,486			(3,552	)

	Increase/ (decrease) in reserves			Increase/ (decrease) in reserves
	2020			2021
10% appreciation of GBP	$	38,430		$	80,726
10% depreciation of GBP		(27,550	)		(67,223	)

F-75

Notes to the Consolidated financial statements (continued)

	Increase/ (decrease) in profit or loss			Increase/ (decrease) in profit or loss
	2020			2021
10% appreciation of EUR	$	(17,234	)	$	2,987
10% depreciation of EUR		14,101			(1,858	)

	Increase/ (decrease) in reserves			Increase/ (decrease) in reserves
	2020			2021
10% appreciation of EUR	$	(3,570	)	$	31,134
10% depreciation of EUR		2,921			(24,887	)

F-76

Notes to the Consolidated financial statements (continued)

29.	Employee benefit obligations

Other non-current liabilities consist of the following at December 31 (in thousands):

	2020		2021
Cash-settled awards liability	$	24,295	$	10,404
Employee severance liability		1,821		2,544
Total non-current liabilities	$	26,116	$	12,948

The employee severance liability relates to a severance indemnity obligation under Italian law in respect of employees of the Group’s Italian subsidiaries.

Current employee benefit obligations of $8.3 million (2020: $38.3 million) relates to employers tax liability on share based payments (2021: $7.7 million) (2020: $37.3) and cash-settled share based payments due to vest in less than one year from December 31, 2021 ($0.5 million) (2020: $1.0 million).

The Group has 4 equity settled share option plans (section a) and a cash settled share option plan (section b).

a. Equity-settled

During the year ended December 31, 2021, the Group had 4 equity-settled share-based payment plans which are described below.

Type of arrangement

EMI approved share

option plan

Unapproved share

option plan

LTIP 2015 plan

LTIP 2018 plan

Date of first grant

November 1, 2011

July 1, 2011

September 9, 2015

September 20, 2018

Number granted

5,505,600

11,332,835

38,174,980

50,669,762

Contractual life

10 years

Vesting conditions

Varying tranches of options vesting upon defined years of service

Varying tranches of options vesting upon defined years of service with certain awards having non-market conditions

Varying tranches of options and Restricted Stock Units (RSU) vesting upon defined years of service

Movements on the share options were as follows:

	2019			2020			2021
	Number of options & RSUs			Number of options & RSUs			Number of options & RSUs
Options & RSUs at beginning of year		44,218,814			39,583,858			43,063,713
Options & RSUs granted		13,585,502			19,685,173			13,933,172
Options & RSUs exercised		(7,503,814	)		(11,817,074	)		(8,677,510	)
Options & RSUs forfeited		(10,716,644	)		(4,388,244	)		(2,011,549	)
Options & RSUs at end of year		39,583,858			43,063,713			46,307,826
Options & RSUs exercisable at end of year		10,360,642			11,944,576			18,293,805

F-77

Notes to the Consolidated financial statements (continued)

Weighted average exercise prices were as follows:

	2019		2020		2021
Options & RSUs at beginning of year	$	6.15	$	8.23	$	8.00
Options & RSUs granted	$	8.94	$	5.38	$	8.72
Options & RSUs forfeited	$	5.70	$	7.02	$	5.33
Options & RSUs exercised	$	1.25	$	5.63	$	4.37
Options & RSUs at end of year	$	8.23	$	8.00	$	9.01
Options & RSUs exercisable at year end	$	6.40	$	8.96	$	11.43
Weighted average remaining contracted life of options & RSUs outstanding at year end	9.79 years		8.94 years		8.11 years

	2019		2020		2021
	Number of options & RSUs		Number of options & RSUs		Number of options & RSUs
Exercise price of options & RSUs outstanding at year end
$0.00 to $0.08		8,545,400		11,878,888		18,050,469
$0.09 to $0.56		27,340		27,340		27,340
$0.57 to $3.52		629,730		320,944		184,823
$3.53 to $5.73		3,225,120		2,020,354		1,293,101
$5.74 to $7.39		5,873,001		3,385,770		2,386,536
$7.40 to $20.00		17,402,097		21,965,750		19,389,418
$20.01 to $27.09		3,881,170		3,423,111		3,028,881
$27.10 to $40.00		-		41,556		71,784
$40.01 to $67.99		-		-		1,875,474
		39,583,858		43,063,713		46,307,826
Weighted average fair value of options & RSUs granted in year	$	15.54	$	8.81	$	23.33

Weighted average share price at the date of exercise for options exercised during the year ended December 31, 2021 was $43.36 (2020: $34.66, 2019: $22.62).

Inputs in the Black Scholes model for share options granted during the year and prior year were as follows:

	2019		2020		2021
Black Scholes model
Weighted average share price	$	21.73	$	12.44	$57.40
Weighted average exercise price	$	8.94	$	5.38	$22.80
Average expected volatility	36%		40%		40%
Expected life	4 years		4 years		4 years
Risk free rate	2.15%		1.05%		0.51%
Expected dividends	$nil		$nil		$nil

Expected volatility was determined with reference to historical volatility of publicly traded peer companies.

The expected life in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations.

The Group recognized total expenses of $219.9 million, $168.3 million and $170.1 million related to equity-settled share-based payment transactions in 2021, 2020 and 2019, respectively. In 2019, as part of the New Guard’s acquisition, we recorded a $12.1 million liability for equity settled awards.

2021 CEO Performance Based Restricted Stock Unit (“PSU”) Award

F-78

Notes to the Consolidated financial statements (continued)

On May 24, 2021, the Board of Directors (the “Board”) of the Company unanimously approved the recommendation of the Compensation Committee of the Board to grant a long-term PSU under the Company’s 2018 Farfetch Employee Equity Plan (the “2018 Plan”) to José Neves, the Company’s Founder, Chief Executive Officer and Chairman of the Board (the “CEO”). The grant is 8,440,000 PSUs, which will only vest, if at all, based on the Company’s achievement of pre-determined increases in the Company’s stock price over an eight-year period, as further described below:

The PSUs are divided into 8 tranches that are eligible to vest based on the achievement of stock price hurdles during each performance period, measured based on the average of our closing share price over a ninety-day trailing average (“the Average Closing Price”). Each tranche will be earned and vest if the Average Closing Price exceeds the stock price hurdle on any date within the applicable performance period as follows, subject to the CEO’s continued employment with the Company:

Tranche	Performance Period	Number of PSUs Eligible To be Earned	Stock Price Hurdle
1	1st - 5th anniversary of the grant	5% of Total Number of PSUs	$	75
2	1st - 5th anniversary of the grant	5% of Total Number of PSUs	$	100
3	2nd - 6th anniversary of the grant	10% of Total Number of PSUs	$	125
4	2nd - 6th anniversary of the grant	10% of Total Number of PSUs	$	150
5	3rd - 7th anniversary of the grant	10% of Total Number of PSUs	$	175
6	3rd - 7th anniversary of the grant	20% of Total Number of PSUs	$	200
7	4th - 8th anniversary of the grant	20% of Total Number of PSUs	$	225
8	4th - 8th anniversary of the grant	20% of Total Number of PSUs	$	250

Share-based compensation under the 2021 CEO PSU Award represents a non-cash expense and is recognized as a selling, general and administrative expense in our Consolidated statement of operations. In each quarter since the grant of the 2021 CEO PSU Award, we have recognized expense, generally on a pro-rata basis, for only the number of tranches that corresponds to the number of share price milestones that have been determined probable of being achieved in the future, in accordance with the following principles.

In order to calculate the equity-settled share based payments expense for this award, on the grant date, a Monte Carlo simulation was used to determine for each tranche (i) a fixed amount of expense for such tranche and (ii) the expected vesting period for each tranche based on the expected time taken to achieve the share price milestone. The grant date fair value of this award amounted to $99.0 million. In the year ended December 31, 2021, we recognized an equity-settled share based payments expense of $15.1 million in selling, general and administrative expense related to the PSU award in our Consolidated statement of operations.

b. Cash-settled

Since 2016, the Group issues to certain employees share appreciation rights (“SARs”) that require the Group to pay the intrinsic value of the SAR to the employee at the date of exercise. The Group has recorded liabilities of $10.5 million in 2021 (2020: $25.3 million) through the grant of 49,000 SARs (2020: 92,000 SARs).

The fair value of the SARs is determined by using the Black Scholes model using the same assumptions noted in the above table for the Group’s equity-settled share-based payments. The fair value of the liability is then reassessed at each reporting date. Included in the 2021 credit of $9.3 million (2020: $28.0 million, 2019: $10.7 million), is a revaluation loss of $1.2 million (2020: loss of $28.0 million). The total intrinsic value at December 31, 2021 was $12.7 million (2020: $36.4 million) of which $9.4 million is fully vested (2020: $17.2 million).

F-79

Notes to the Consolidated financial statements (continued)

30.	Share capital and share premium

Ordinary shares issued and fully paid as at December 31, 2021 (in thousands, except number of shares):

Number of shares		Class	Par value $		Share capital		Share premium		Merger reserve		Total
	337,923,238	Class A ordinary shares		0.04	$	13,517	$	1,596,165	$	783,529	$	2,393,211
	42,858,080	Class B ordinary shares		0.04		1,714		45,509		-		47,223
	380,781,318				$	15,231	$	1,641,674	$	783,529	$	2,440,434

During 2021, 26,571,174 shares were issued. All were fully paid and newly issued Class A ordinary shares. The nominal value of all shares issued is $0.04 each. The total Class A ordinary shares issued in respect of share options that were exercised and RSUs that have vested was 8,328,356.

On May 17, 2021, a total of 3,190,345 Class A ordinary shares were issued on conversion of $39.1 million principal amount of February 2020 Notes.

On August 6, 2021, a total of 7,013,405 Class A ordinary shares were issued on conversion of $85.9 million principal amount of February 2020 Notes.

On October 1, 2021, a total of 6,122,250 Class A ordinary shares were issued on conversion of $75.0 million principal amount of February 2020 Notes.

The total Class A ordinary shares issued in respect of acquisitions made during the year was 1,916,818.

Ordinary shares issued and fully paid as at December 31, 2020 (in thousands, except number of shares):

Number of shares		Class	Par value $		Share capital		Share premium		Merger reserve		Total
	311,352,064	Class A ordinary shares		0.04	$	12,454	$	882,422	$	783,529	$	1,678,405
	42,858,080	Class B ordinary shares		0.04		1,714		45,509		-		47,223
	354,210,144				$	14,168	$	927,931	$	783,529	$	1,725,628

During 2020, 14,611,136 shares were issued. All were fully paid and newly issued Class A ordinary shares. The nominal value of all shares issued is $0.04 each. The total Class A ordinary shares issued in respect of share options that were exercised and RSUs that have vested was 12,721,798.

On November 17, 2020, the Company issued 1,889,338 Class A ordinary shares to Artemis representing 0.5% of existing issued share capital, for total gross proceeds of $50.0 million.

F-80

Notes to the Consolidated financial statements (continued)

31.	Other Reserves

Otherreserves consist of the following (in thousands):


	Warrant reserve			Changes in ownership			Share based payments			Cashflow hedge reserve			Merger relief reserve		Time value reserve			Other			Total other reserves
At January 1, 2019	$	747		$	(8,666	)	$	72,796		$	436		$	2,161	$	—		$	—		$	67,474
Shares issued - acquisition of a subsidiary		-			-			-			-			393,853		-			-			393,853
Movement in cash flow hedge reserve		-			-			-			(3,527	)		-		-			-			(3,527	)
Loss transferred to the cost of inventory		-			-			-			142			-		-			-			142
Share-based payments - equity-settled		-			-			76,383			-			-		-			-			76,383
Share-based payments - reverse vesting shares⁽¹⁾		-			-			(62,834	)		-			-		-			-			(62,834	)
Exercise of warrants		(747	)		-			-			-			-		-			-			(747	)
Transaction with non-controlling interests		-			-			-			-			-		-			(101,311	)		(101,311	)
Impairment loss on revaluation of investments		-			-			-			-			-		-			(100	)		(100	)
Remeasurement loss on legally required severance plan		-			-			-			-			-		-			(58	)		(58	)
At December 31, 2019		-			(8,666	)		86,345			(2,949	)		396,014		-			(101,469	)		369,275
Movement in cash flow hedge reserve		-			-			-			13,385			-		2,552			-			15,937
Gain transferred to the cost of inventory		-			-			-			(1,213	)		-		-			-			(1,213	)
Shares issued - acquisition of a subsidiary		-			-			-			-			4,808		-			-			4,808
Remeasurement loss on severance plan		-			-			-			-			-		-			(24	)		(24	)
Share-based payment - reverse vesting shares		-			-			26,092			-			-		-			-			26,092
Share-based payment - equity-settled		-			-			52,690			-			-		-			-			52,690
At December 31, 2020		-			(8,666	)		165,127			9,223			400,822		2,552			(101,493	)		467,565
Movement in cash flow hedge reserve		-			-			-			(24,776	)		-		(2,552	)		-			(27,328	)
Loss transferred to the cost of inventory		-			-			-			2,066			-		-			-			2,066
Share-based payment - reverse vesting shares		-			-			(24,486	)		-			-		-			-			(24,486	)
Share-based payment - equity-settled		-			-			61,282			-			-		-			-			61,282
Non-controlling interest put option		-			-			-			-			-		-			(150,070	)		(150,070	)
Farfetch China Holdings Limited put call option		-			-			-			-			-		-			(744,163	)		(744,163	)
Capital contribution from non-controlling interests		-			-			-			-			-		-			488,863			488,863
Acquisition of non-controlling interest		-			-			-			-			-		-			(11,613	)		(11,613	)
Other		-			-			-			-			-		-			(2,596	)		(2,596	)
At December 31, 2021	$	-		$	(8,666	)	$	201,923		$	(13,487	)	$	400,822	$	-		$	(521,072	)	$	59,520

⁽¹⁾ Refer to Note 2, Significant accounting policies, for detail on the revision of prior year comparatives.

The warrant reserve represents the cumulative expense of the shares to be issued where the Group has issued warrants. On exercise, the cumulative warrant expense is reclassified to accumulated losses. During 2019, all the warrants were exercised.

The changes in ownership reserve represents transactions with former non-controlling interests of the Group.

F-81

Notes to the Consolidated financial statements (continued)

The share-based payments reserve represents the Group’s cumulative equity-settled share option expense. On exercise, the cumulative share option expense is reclassified to accumulated losses.

The cash flow hedge reserve and time value reserve are used to recognize the effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges.

The merger relief reserve represents the excess over nominal share capital where there has been share consideration as part of a business combination.

Included in other reserves as at December 31, 2021, the transaction with non-controlling interests represents the initial recognition of the Chalhoub partnership, the non-controlling put option relates to the initial recognition of the gross liability relating to the put and call options entered into as part of the acquisition of Palm Angels for the purchase of the remaining 40 percent that New Guards does not already own and the Farfetch China Holdings Ltd put call option relates to the initial recognition of the gross liability relating to the put and call options entered into as part of the strategic arrangement with Alibaba and Richemont, net of transaction costs.

32.	Group information

Direct Holdings

Legal name of subsidiary

Country of

incorporation

% equity

interest

Principal activities

2020

2021

Farfetch Holdings plc (previously Hulk Finco plc)

United Kingdom

100

Holding company

F-82

Notes to the Consolidated financial statements (continued)

7.	~~Employees and directors~~

2016

2017

2018

Wages and salaries

60,455

88,164

140,298

Social security costs

9,626

12,783

24,976

Other pension costs

360

898

1,391

Share based payments (equity settled)

17,256

16,667

34,668

Share based payments (cash settled)

1,178

3,807

10,355

Share based payments (employment related taxes)

1,414

1,012

8,796

90,289

123,331

220,484

8.	~~Selling, general and administrative expenses~~

~~Included within selling, general and administrative expenses are:~~

2016

2017

2018

Demand generation expenses

48,381

69,202

97,295

Technology

12,269

31,611

68,224

Depreciation and amortization

6,897

10,980

23,537

Share based payments

19,848

21,486

53,819

9.	~~Finance income and costs~~

2016

2017

2018

Unrealised exchange gains

7,643

-

9,143

Deposit account interest

1,359

2,510

6,859

Other interest income

278

323

4,401

Finance income

9,280

2,833

20,403

Unrealised exchange losses

-

(18,902
)

-

Interest on borrowings

(1,473
)

(1,572
)

-

Other interest expense

(29
)

(1
)

(537
)
Warrants issued

(376
)

-

Finance costs

(1,878
)

(20,475
)

(537
)
Net finance income/ (costs)

7,402

(17,642
)

19,866

~~10.~~

~~Loss before tax~~

~~Loss before tax items include:~~

Note

2016

2017

2018

Employee benefits

7

90,289

123,331

220,484

Operating leases

12,322

18,162

19,244

Research and development costs expensed

4,972

5,102

12,455

Loss on disposal of non-current assets

261

42

1,028

Depreciation—Property, plant & equipment (note 16)

2,451

3,648

7,338

Amortization—Intangible assets (note 15)

4,446

7,332

16,199

Auditors’ remuneration

411

1,095

2,152

~~F-23~~

~~Notes to the consolidated~~
Indirect Holdings

Legal name of subsidiary

Country of
incorporation

% equity
interest

Principal activities

2020

2021

Alanui S.r.l.

Italy

53

53

Retail
Allure Systems Corp.

Delaware (USA)

-

100

E-commerce services
Allure Systems Research France S.A.S.

France

-

100

E-commerce services
Ambush (Shanghai) Trading Co., Ltd

People's Republic of China

-

70

Retail
Ambush Inc.

Japan

70

70

Retail
Ambush Italy S.r.l.

Italy

70

70

Retail
APA S.r.l.

Italy

100

100

Retail
Beijing Qizhi Ruisi Information Consulting Co., Ltd

People's Republic of China

81

81

E-commerce services
Browns (South Molton Street) Limited

United Kingdom

100

100

Retail
County S.r.l.

Italy

100

100

Retail
F Concierge France S.A.S.

France

-

100

Retail
F.F.B.R. Importacao e Exportação LTDA*

Brazil

100

100

Import & Export Agent for Farfetch
Fafaqi (Shanghai) Network Technology Development Co., Ltd

People's Republic of China

-

100

E-commerce services
Farfetch (Shanghai) E-Commerce Co. Ltd

People's Republic of China

100

75

E-commerce services
Farfetch Australia Pty Ltd

Australia

100

100

Back office support
Farfetch Brasil China Exportacao Ltda

Brazil

-

75

E-commerce services
Farfetch Canada Limited

Canada

100

100

Retail
Farfetch China (HK Holdings) Limited

Hong Kong

100

75

Holding company
Farfetch China Holdings Ltd

United Kingdom

100

75

Retail
Farfetch China Ltd

United Kingdom

100

75

Retail
Farfetch China US LLC

Delaware (USA)

-

75

E-commerce services
Farfetch Europe Trading B.V.

The Netherlands

100

100

Retail
Farfetch HK Holdings Limited

Hong Kong

100

100

Holding company
Farfetch HK Production Limited

Hong Kong

100

100

E-commerce and marketing
Farfetch India Private Limited****

India

100

100

Back office support
Farfetch International Limited

Isle of Man

80

80

Holding company
Farfetch Italia S.r.l.

Italy

100

100

Back office support
Farfetch Japan Co Ltd

Japan

100

100

E-commerce and marketing
Farfetch Mexico, S.A. de C.V.***

Mexico

100

100

Back office support
Farfetch Middle East FZE

UAE

80

80

Back office support
Farfetch Platform Solutions Limited (previously Farfetch Black & White Limited)

United Kingdom

100

100

E-commerce services

F-83

Notes to the Consolidated financial statements (continued)

~~11.~~

~~Taxation~~

a)	~~Income tax expense~~

2016

2017

2018

Current tax:

Corporate tax

182

805

2,208

Prior year adjustments

17

132

(50
)
Total current tax

199

937

2,158

Total deferred tax

-

(767
)

-

Income tax expense

199

170

2,158

b)	~~Reconciliation of income tax expense to tax payable~~

~~The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profit of the consolidated entities as follows:~~

2016

2017

2018

Loss before tax

(81,260
)

(112,105
)

(153,417
)
Tax at the UK tax rate of 19.00% (2017: 19.25%, 2016: 20.00%)

(16,252
)

(21,580
)

(29,149
)
Tax effects of:

Impairment of intangible assets

46

-

-

Sundry temporary differences

268

(599
)

-

Sundry permanent differences

1,945

1,965

4,355

Entertaining

272

27

37

Loss utilisation

-

(85
)

(334
)
Taxes paid overseas and rate difference

42

(144
)

(599
)
Foreign exchange rate differences

306

192

(6
)
Unrecognized deferred tax asset arising from timing differences
relating to:

Share based payment

2,913

3,722

(4,327
)
Non-current assets

208

463

361

Prior year adjustments

17

132

(50
)
Losses carried forward

10,434

16,077

31,870

Income tax expense

199

170

2,158

The Finance Act 2015 reduced the main rate of UK Corporation Tax, “CT” from 20% to 19% for the 2017 tax year, with the rate set at 19% for the 2018 and 2019 tax years. The Finance Act 2016 has set the CT rate for the 2020 tax year as 17%. Consequently the Group has used a tax rate of 19.00% for the 2018 financial year.

~~There is no income tax relating to the components presented within other comprehensive income.~~

~~F-24~~

~~Notes to the consolidated~~
Farfetch Portugal-Unipessoal LDA

Portugal

100

100

Back office support
Farfetch RU LLC

Russian Federation

100

100

E-commerce services and back office support
Farfetch Store of the Future Limited

United Kingdom

100

100

Dormant company
Farfetch UK FINCO Limited

United Kingdom

100

100

Holding company
Farfetch UK Limited

United Kingdom

100

100

Marketing, providing editorial and merchant services
Farfetch US Holdings, Inc.

Delaware (USA)

100

100

Holding company
Farfetch.com Brasil Serviços LTDA**

Brazil

100

100

E-commerce, marketing and editorial services
Farfetch.com Limited

Isle of Man

100

100

Holding company
Farfetch.com US LLC

California (USA)

100

100

E-commerce and marketing
Fashion Concierge HK Limited

Hong Kong

100

100

E-commerce services
Fashion Concierge Powered By Farfetch LLC

Delaware (USA)

100

100

E-commerce services
Fashion Concierge UK Limited

United Kingdom

100

100

E-commerce services
Heron Preston S.r.l.

Italy

80

80

Retail
Heron Preston Trademark S.r.l.

Italy

51

51

Retail
JBUX Limited

United Kingdom

-

100

Retail
Kicks Lite, LLC

New York (USA)

100

100

E-commerce services
KPG S.r.l.

Italy

75

75

Retail
Laso. Co. Ltd

Japan

100

100

E-commerce and marketing
Luxclusif, Unipessoal Lda.

Portugal

-

100

E-commerce services
Luxi (Shanghai) Trading Co., Ltd

People's Republic of China

-

100

Trading company
Luxis Baltic OÜ

Estonia

-

100

E-commerce services
M.A. Alliance Ltd.

Japan

-

100

E-commerce services
New Guards Group Holding S.p.A.

Italy

100

100

Retail
NGG Beauty S.r.l.

Italy

-

100

Retail
OC Italy S.r.l.

Italy

100

100

Retail
Off White (Shanghai) Trading Co., Ltd

People's Republic of China

-

75

Retail
Off White Operating Holding, Corp.

Delaware (USA)

75

75

Retail
Off White Operating London Limited

United Kingdom

75

75

Retail
Off White Operating Los Angeles, LLC

California (USA)

75

75

Retail
Off White Operating Miami, LLC

Florida (USA)

75

75

Retail
Off-White Operating Milano S.r.l.

Italy

75

75

Retail
Off-White Operating Paris S.a.r.l.

France

75

75

Retail
Off White Operating Soho, LLC

New York (USA)

75

75

Retail
Off White Operating Spain SL

Spain

-

75

Retail
Off-White Operating S.r.l.

Italy

75

75

Retail

F-84

Notes to the Consolidated financial statements (continued)

~~12.~~

~~Loss per share~~

Basic loss per share is computed using the weighted-average number of outstanding shares during the period. Diluted loss per share is computed using the weighted-average number of outstanding shares and excludes all potential shares outstanding during the period, as their inclusion would be anti-dilutive. The Group’s potential shares consist of incremental shares issuable upon the assumed exercise of share options and warrants, and the incremental shares issuable upon the assumed vesting of unvested share awards. The calculation of loss per share is as follows:

2016

2017

2018

In $ thousands, except share and per share data

Basic and diluted

Loss attributable to owners of the parent

(81,414
)

(112,275
)

(155,575
)
Shares used in calculation

Weighted-average shares outstanding

188,679,490

223,465,734

264,432,214

Basic and diluted loss per share attributable to owners of
the parent

(0.43
)

(0.50
)

(0.59
)

~~Potential dilutive securities that are not included in the diluted per share calculations because they would be anti-dilutive are as follows:~~

2016

2017

2018

Employee options

5,462

6,675

14,649

Warrants

3,142

3,303

125

Contingently issuable shares

-

994

-

~~13.~~

~~Inventories~~

Off-White Operating Switzerland GmbH	Switzerland	-		75	Retail
Off White Operating Vegas, LLC	Nevada (USA)		75	75	Retail
Palm Angels (Shanghai) Trading Co., Ltd	People's Republic of China	-		100	Retail
Palm Angels S.r.l.	Italy	-		60	Retail
SGNY1 LLC	New York (USA)		100	100	E-commerce services
Stadium Enterprises LLC	Delaware (USA)		100	100	E-commerce services
There Was One S.r.l.	Italy	-		100	E-commerce services
Unravel Project S.r.l.	Italy		61	61	Retail
Upteam Corporation Limited	Hong Kong	-		100	Holding company
Venice Holding Corp.	Delaware (USA)	-		100	Holding company
Venice Miami LLC	Florida (USA)	-		100	Retail
Venice Retail Italy S.r.l.	Italy	-		100	Retail
Venice S.r.l.	Italy		69	100	Retail
Venice Vegas LLC	Nevada (USA)	-		100	Retail

2017

2018

Finished goods

50,610

60,954

50,610

60,954

33.

The total cost of inventory recognized as an expense in the consolidated profit or loss was $87,416,000 (2017: $55,192,000). The total provision against inventory in order to write down the balance to the net recoverable value was $4,182,000 (2017: $1,162,000).

~~14.~~

~~Trade and other receivables~~

2017

2018

Current

Other receivables

5,294

48,285

Sales taxes

5,307

10,352

Prepayments and accrued income

7,394

34,342

Derivative financial assets (note 28)

185

691

18,180

93,670

Non-current

Other receivables

9,193

10,458

9,193

10,458

~~The carrying amount of other receivables approximates their fair value. The maximum credit risk at the balance sheet date is considered to be equivalent to the carrying value of other receivables.~~

~~F-25~~

~~Notes to the consolidated financial statements (continued)~~

~~15.~~

~~Intangible assets~~

Goodwill

Brand,
trademarks &
domain names

Customer
relationships

Development
costs

Total

Cost

At December 31, 2016

25,503

3,555

1,030

17,785

47,873

Additions

10,073

3,046

1,178

18,997

33,294

Transfers

-

139

-

(139
)

-

Foreign exchange movements

2,873

549

176

2,294

5,892

At December 31, 2017

38,449

7,289

2,384

38,937

87,059

Additions

-

-

-

50,978

50,978

Transfers

-

-

-

166

166

Foreign exchange movements

(2,406
)

(443
)

(145
)

(4,602
)

(7,596
)
At December 31, 2018

36,043

6,846

2,239

85,479

130,607

Accumulated amortization

At December 31, 2016

-

(689
)

(256
)

(3,985
)

(4,930
)
Amortization for year

-

(745
)

(272
)

(6,315
)

(7,332
)
Transfers

-

(67
)

-

67

-

Foreign exchange movements

-

(103
)

(37
)

(616
)

(756
)
At December 31, 2017

-

(1,604
)

(565
)

(10,849
)

(13,018
)
Amortization for year

-

(459
)

(1,057
)

(14,683
)

(16,199
)
Transfers

-

-

-

-

-

Foreign exchange movements

-

123

96

1,736

1,955

At December 31, 2018

-

(1,940
)

(1,526
)

(23,796
)

(27,262
)
Net book value

At December 31, 2017

38,449

5,685

1,819

28,088

74,041

At December 31, 2018

36,043

4,906

713

61,683

103,345

~~Included within development costs is $205,000 (2017: $666,000) of assets that are under the course of construction. Amortization of this will commence once they have been brought into use.~~

~~Development costs relate to capitalized development expenses relating to development of internal software and developments of the Farfetch websites.~~

~~Additions to goodwill, brands, trademarks & domain names and customer relationships in 2017 arose due to business combinations. See note 5.~~

~~Amortization for all intangible assets is all recorded in selling, general and administrative expenses.~~

Goodwill reflects the amount of consideration in excess of the fair value of net assets of business combinations. The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. Goodwill has been allocated to the following CGUs. For details regarding additions to goodwill refer to note 5.

2017

2018

CGU*

Marketplace

17,916

16,368

Browns – Platform

20,533

19,675

38,449

36,043

*	~~Only two of the Group’s CGUs have goodwill allocated.~~

~~F-26~~

~~Notes to the consolidated financial statements (continued)~~

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs and the group of units. The growth rates are based on industry growth forecasts.

~~The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next five years.~~

The key assumptions for the value in use calculations are the long term growth rate applied to year five onwards and the discount rates. The Group extrapolates the cash flows in the fifth year based on an estimated growth rate of 2% (2017: 2%). This rate does not exceed the average long-term growth rate for the relevant markets. The pre-tax rate used to discount the forecast cash flows ranges from 9.7% to 11.8% (2017: 10.9% to 12.3%). The pre-tax discount rate applied is derived from a market participant’s weighted average cost of capital. The assumptions used in the calculation of the Group’s weighted average cost of capital are benchmarked to externally available data.

~~Management has performed sensitivities on key assumptions and based upon these believe that there are no reasonably possible changes that could create an impairment.~~

~~16.~~

~~Property, plant and equipment~~

Leasehold
improvements

Fixtures and
fittings

Motor
vehicles

Computer
equipment

Totals

Cost

At December 31, 2016

14,612

2,211

162

4,319

21,304

Additions

7,717

3,230

-

2,000

12,947

Disposals

(249
)

(175
)

(39
)

(364
)

(827
)
Transfers

-

(177
)

-

177

-

Foreign exchange movements

1,373

427

19

431

2,250

At December 31, 2017

23,453

5,516

142

6,563

35,674

Additions

16,086

2,083

-

3,318

21,487

Disposals

(1,489
)

(211
)

(28
)

(61
)

(1,789
)
Transfers

(1,156
)

889

-

101

(166
)
Foreign exchange movements

(1,830
)

(501
)

(5
)

(525
)

(2,861
)
At December 31, 2018

35,064

7,776

109

9,396

52,345

Accumulated depreciation

At December 31, 2016

(2,260
)

(971
)

(115
)

(2,163
)

(5,509
)
Depreciation for year

(1,674
)

(972
)

(14
)

(988
)

(3,648
)
Disposals

249

171

28

337

785

Transfers

(98
)

61

-

37

-

Foreign exchange movements

(225
)

(151
)

(11
)

(219
)

(606
)
At December 31, 2017

(4,008
)

(1,862
)

(112
)

(2,996
)

(8,978
)
Depreciation for year

(4,091
)

(1,196
)

(14
)

(2,037
)

(7,338
)
Disposals

562

136

28

35

761

Transfers

-

11

-

(11
)

-

Foreign exchange movements

375

129

4

230

738

At December 31, 2018

(7,162
)

(2,782
)

(94
)

(4,779
)

(14,817
)
Net book value

At December 31, 2017

19,445

3,654

30

3,567

26,696

At December 31, 2018

27,902

4,994

15

4,617

37,528

~~F-27~~

~~Notes to the consolidated financial statements (continued)~~

Included within leasehold improvements and computer equipment is respectively $6,312,000 and $nil ($6,312,000 and $nil) of assets that are under the course of construction. Depreciation will commence once they have been brought into use.

~~Depreciation for all property, plant and equipment is all recorded in selling, general and administrative expenses.~~

~~17.~~

~~Investments~~

~~Equity investments~~

~~In 2018 the Group held minor equity~~Non-controlling interests ~~worth $566,000 (2017: $278,000). Equity investments are carried at fair value.~~

~~Investments in associates~~

The table below illustrates the summarized financial information of the Group’s investment in Farfetch Finance Limited (“the associate”). The Group holds 25% of issued capital of the associate. The principal activity of the associate is the provision of trade finance and it is incorporated in England & Wales. The associate is accounted for using the equity method.

	~~Share of~~ ~~associates~~ ~~net assets~~
~~At December 31, 2016~~		23
~~Share of profit after tax~~		35
~~At December 31, 2017~~		58
~~Share of profit after tax~~		28
~~At December 31, 2018~~		86

The effect of changes in the ownership interest of the Group on the equity attributable to owners of the Company is summarized as follows (in thousands):

~~18.~~

~~Share capital and share premium~~

~~Ordinary shares issued and fully paid as at December 31, 2018~~

Number of shares

Class

Par value
$

Share capital

Share premium

Merger reserve

Total

256,998,920

Class A ordinary shares

0.04

10,280

726,791

783,529

1,520,600

42,858,080

Class B ordinary shares

0.04

1,714

45,509

-

47,223

299,857,000

11,994

772,300

783,529

1,567,823

During 2018, 67,410,405 shares were issued. All were fully paid and newly issued Class A ordinary shares principally relating to the IPO and concurrent private placement in September 2018 where 41,608,088 Class A ordinary shares were issued. The nominal value of all shares issued is $0.04 each. Transaction costs related to the IPO and recognized directly in equity amount to $11,914,000. Additionally, 14,961,544 shares in respect of warrants and share options were exercised as prior to the IPO and 361,343 share options were exercised following the IPO. In January 2018, there was a series G funding round follow-on where 8,502,500 Class A ordinary shares were issued. Transaction costs recognized directly in equity amount to $36,000. The Browns earn-out was also settled through the issue of 1,976,930 shares in April 2018 which had previously been recognized as a financial liability as the number of shares was variable based on the earn-out mechanism, rather than being a cash-settled liability.

~~Prior to the IPO, the Group was restructured. The merger reserve resulted from the restructuring. Further detail can be found in note 1.~~

~~F-28~~

~~Notes to the consolidated financial statements (continued)~~

~~Ordinary shares issued and fully paid as at December 31, 2017~~

Number of shares

Class

Par value
$

Share capital

Share premium

Merger reserve

Total

189,588,515

Class A ordinary shares

0.04

7,584

632,165

-

639,749

42,858,080

Class B ordinary shares

0.04

1,714

45,509

-

47,223

232,446,595

9,298

677,674

-

686,972

In the year ended December 31, 2017, 36,346,645 shares were issued. All were fully paid. Of these shares, 34,222,510 were newly issued Class A ordinary share from the series G funding round and the remainder 2,124,135 were Class A ordinary shares. The nominal value of all shares issued is $0.04 each. Transaction costs recognized directly in equity amounted to $414,000.

Each ordinary share and preferred share shall rank equally for any dividends paid. On a liquidation event the holder of preferred shares will have the priority on the available assets. Each ordinary and class of preferred shares shall rank equally in relation to voting rights.

~~19.~~

~~Reserves~~

Other reserves

Foreign
exchange
reserve

Warrant
reserve

Changes
in
ownership

Share
based
payments

Cashflow hedge reserve

Merger
relief
reserve

Accumulated
losses

At December 31, 2015

(6,771
)

338

(8,666
)

12,437

-

-

(128,475
)
Loss for the year

-

-

-

-

-

-

(81,414
)
Movement in foreign exchange reserve

(27,322
)

-

-

-

-

-

-

Warrants issued

-

409

-

-

-

-

-

Transactions with non-controlling
interests

1,222

-

-

-

-

-

-

Share based payments - equity settled

-

-

-

15,339

-

-

(7,012
)
At December 31, 2016

(32,871
)

747

(8,666
)

27,776

-

-

(216,901
)
Loss for the year

-

-

-

-

-

-

(112,275
)
Movement in foreign exchange reserve

33,504

-

-

-

-

-

-

Transactions with non-controlling
interests

-

-

-

-

-

2,161

-

Share based payments - equity settled

-

-

-

16,457

-

-

(1
)
At December 31, 2017

633

747

(8,666
)

44,233

-

2,161

(329,177
)
Loss for the year

-

-

-

-

-

-

(155,575
)
Movement in foreign exchange reserve

(24,142
)

-

-

-

-

-

-

Movement in cash flow hedge reserve

-

-

-

-

436

-

-

Share based payments - equity settled

-

-

-

28,563

-

-

1,395

At December 31, 2018

(23,509
)

747

(8,666
)

72,796

436

2,161

(483,357
)

~~The foreign exchange reserve represents the cumulative exchange differences on the translation of the Group’s overseas subsidiaries into the Group’s presentational currency.~~

~~The warrant reserve represents the cumulative expense of the shares to be issued where the Group has issued warrants.~~

~~The changes in ownership reserve represents transactions with former non-controlling interests of the Group.~~

~~The share based payment reserve represents the Group’s cumulative equity settled share option expense. On exercise, the cumulative share option expense is reclassified to accumulated losses.~~

~~F-29~~

~~Notes to the consolidated financial statements (continued)~~

~~The cash flow hedge reserve is used to recognize the effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges.~~

~~The merger relief reserve represents the excess over nominal share capital where there has been share consideration as part of a business combination.~~

~~Accumulated losses represent the cumulative gains and losses recorded in the statement of operations.~~

~~20.~~

~~Group information~~

~~At December 31, 2018, the Company’s subsidiaries were as follows:~~

Direct Holdings

Company name

Country of
incorporation

% equity
interest

Principal activities

2017

2018

Farfetch.com Limited

Isle of Man

100

100

Holding company

~~F-30~~

~~Notes to the consolidated~~

CuriosityChina

Farfetch International Limited (IOM)

New Guards

Farfetch China Holdings Limited

Total

Balance at January 1, 2020

$
409

$
1,225

$
168,592

$
-

$
170,226

Total comprehensive income/(loss) attributable to non-controlling interests

110

(3,412
)

21,182

-

17,880

Acquisition of non-controlling interest

-

-

965

-

965

Dividends paid to non-controlling interests

-

-

(20,515
)

-

(20,515
)
Balance at December 31, 2020

519

(2,187
)

170,224

-

168,556

Total comprehensive (loss)/income attributable to non-controlling interests

(1,657
)

(548
)

16,220

(12,635
)

$
1,380

Step acquisition

-

-

2,434

-

2,434

Capital contribution from non-controlling interest

-

-

-

(13,875
)

(13,875
)
Non-controlling interest arising on purchase of asset

-

-

50,453

-

50,453

Acquisition of non-controlling interest

-

-

(6,901
)

-

(6,901
)
Dividends paid to non-controlling interests

-

-

(23,016
)

-

(23,016
)
Other

-

-

2,977

-

2,977

Balance at December 31, 2021

$
(1,138
)

$
(2,735
)

$
212,391

$
(26,510
)

$
182,008

% of non-controlling interests

19
%

20
%

23
%

22
%

The Step acquisition relates to New Guards’ acquisition of Alanui (refer to Note 5, Business combinations for further details).

F-85

Notes to the Consolidated financial statements (continued)

On August 1, 2021, Alibaba and Richemont each acquired a 12.5 percent shareholding in Farfetch China Holdings Ltd for total consideration of $500.0 million. The non-controlling interest recognized of $(13.9 million) as a result of this transaction was calculated using the proportionate share of net assets method in line with the requirements of IFRS 10 - Consolidated Financial Statements. Transaction costs of $25.0 million directly attributable to the investments made by Alibaba and Richemont were treated as a deduction from equity in Other reserves.

The non-controlling interest arising on purchase of asset of $50.5 million relates to the acquisition by New Guards on July 20, 2021 of 60 percent of the share capital of Palm Angels.

The acquisition of non-controlling interest of $6.9 million relates to the acquisition by New Guards of the remaining 31 percent of the share capital it did not own in Venice S.r.l.

The New Guards group comprises numerous legal entities with various non-controlling interests throughout the group structure, representing the co-founders of the individual fashion brands. During the year ended December 31, 2021, New Guards had paid dividends of $23.0 million to holders of minority interests. During the year ended December 31, 2020, New Guards paid dividends of $20.5 million to holders of non-controlling interest.

Indirect Holdings

Company name

Country of
incorporation

% equity
interest

Principal activities

2017

2018

Farfetch UK Limited

England & Wales

100

100

Marketing, providing editorial and merchant services
FFBR importacao e exportacao LTDA*

Brazil

100

100

Import & Export Agent for Farfetch
Farfetch.com Brasil Servicos LTDA**

Brazil

100

100

E-commerce, marketing and editorial services
Farfetch.com US LLC

USA

100

100

E-commerce and marketing
Farfetch-Portugal Unipessoal LDA

Portugal

100

100

Back office support
Farfetch HK Holdings Limited

Hong Kong

100

100

Holding Company
Browns (South Molton Street) Limited

England & Wales

100

100

Retail
Farfetch Japan Co Ltd

Japan

100

100

E-commerce and marketing
LASO.CO.LTD

Japan

100

100

E-commerce and marketing
Farfetch China (HK Holdings) Limited

Hong Kong

100

100

Holding company
Farfetch (Shanghai) E-Commerce Co. Ltd

China

100

100

E-commerce services
Farfetch HK Production Limited

Hong Kong

100

100

E-commerce and marketing
Farfetch Store of the Future Limited

England & Wales

100

100

Dormant
Fashion Concierge UK Limited

England & Wales

100

100

E-commerce services
F&C Fashion Concierge, LDA

Portugal

100

100

Dormant
Farfetch Black & White Limited

England & Wales

100

100

E-commerce services
Farfetch International Limited

Isle of Man

100

100

Holding company
Farfetch México, S.A de C.V***

Mexico

100

100

Back office support
Fashion Concierge Powered By Farfetch, LLC

USA

100

100

E-commerce services
Farfetch India Private Limited****

India

100

100

Back office support
Farfetch Middle East FZE

UAE

100

100

Back office support
Farfetch Italia S.R.L.

Italy

100

100

Back office support
Farfetch Australia Pty Ltd

Australia

100

100

Back office support
Farfetch US Holdings, INC

USA

100

100

Holding Company
Fashion Concierge HK Limited

Hong Kong

100

100

E-commerce services
Farfetch Finance Limited

England & Wales

25

25

Finance
Yankee Merger Sub, LLC

USA

100

100

Merger Company for acquisition

34.

*	Subsequent Events

On February 1, 2022, the Group completed the acquisition of Violet Grey Inc., a luxury beauty online retailer, for consideration of approximately $44.4 million, subject to customary completion accounts price adjustments, comprised of $43.5 million in cash and $0.9 million in Farfetch shares based on the Farfetch share price at the acquisition date. The share consideration includes service conditions in respect of certain members of the Violet Grey Inc. management team remaining with the Group after the acquisition.

On February 22, 2022, New Guards Group entered into a commercial agreement with Authentic Brands Group LLC for the distribution rights of Reebok footwear and apparel ranges within certain countries in the European region. As part of the arrangement, the Group is committed to minimum royalty payments of approximately $374 million (€329.9 million) over the 11 year life of the agreement.

F-86

~~Owned by Farfetch.com Limited (99.9%) and Farfetch UK Limited (0.1%)~~

**	~~Owned by Farfetch.com Limited (99.9995%) and Farfetch UK Limited (0.0005%)~~

~~***~~

~~Owned by Farfetch.com Limited (1%) and Farfetch UK Limited (99%)~~

~~****~~

~~Owned by Farfetch.com Limited (0.1%) and Farfetch UK Limited (99.9%)~~

~~21.~~

~~Non-controlling interests~~

~~On January 11, 2017, the Group acquired the remaining 0.1% of FFBR importação e exportação Ltda that it did not already own.~~

~~F-31~~

~~Notes to the consolidated financial statements (continued)~~

~~The effect of changes in the ownership interest of the Group on the equity attributable to owners of the company during the year and prior year is summarized as follows:~~

2017

2018

Balance brought forward

(1
)

-

Transactions with non-controlling interests

1

-

Loss attributable to non-controlling interests

-

-

-

-

~~22.~~

~~Trade and other payables~~

2017

2018

Trade payables

73,992

96,176

Other payables

713

350

Social security and other taxes

6,646

6,194

Income tax payable

666

1,514

Accruals and deferred revenue

54,727

89,924

136,744

194,158

~~23.~~

~~Warrants~~

~~During 2016, the Group issued warrants, which are linked to the $20m of Promissory notes issued in 2016, which were subsequently repaid in 2017.~~

Date of issue

Number of shares

Warrant price

Expiration date
October 3, 2016

122,935

$
6.15

12 years from issue date
August 1, 2016

33,530

$
6.15

12 years from issue date
December 23, 2016

33,530

$
6.15

12 years from issue date

~~As at December 31, 2018, all warrants above remain unexercised.~~

~~24.~~

~~Provisions~~

Dilapidations
provision

Share based
payments
employment
taxes provision

Total

2017

2018

2017

2018

2017

2018

At January 1

1,834

2,165

2,101

2,977

3,935

5,142

Additional provision in the year

406

1,263

1,012

6,614

1,418

7,877

Transfer from trade and other payables

-

-

-

2,182

-

2,182

Release of provision in the year

-

(815
)

-

-

-

(815
)
Foreign exchange

(75
)

(98
)

(136
)

(826
)

(211
)

(924
)
At December 31

2,165

2,515

2,977

10,947

5,142

13,462

The dilapidations provision reflects the best estimate of the cost to restore leasehold property in line with the Group’s contractual obligations. Based on a detailed analysis the Group has estimated a liability of $2,515,000 (2017: $2,165,000). In estimating the liability the Group has made assumptions which are based on past experience. Assuming the leases are not extended, the Group expects the economic outflows to match the contractual end date of Group leases. The Group leases have an average length of six years with an average of four years remaining.

~~F-32~~

~~Notes to the consolidated financial statements (continued)~~

The share based payments employment taxes provision reflects the best estimate of the cost to settle employment related taxes on the Group share based payments based on the most recent share price and the number of share options expected to vest where the Group has an obligation to settle employment related taxes. The Group has estimated a liability of $10,947,000 (2017: $2,977,000).When a share option is exercised, the liability for employment related taxes crystalizes. During 2018, $2,182,000 (2017: $nil) was transferred from provisions to trade and other payables. As at December 31, 2018 none of the amount in trade and other payables had been utilized (2017: $nil). We expect the provision to be fully utilized in 9.54 years (2017: 8.00 years) being the weighted average remaining contracted life of options outstanding at year end. It is likely that this provision will be utilized over a shorter period. However, this is dependent on when the option holder exercises which the Group is not in control of.

~~25.~~

~~Deferred tax~~

As a result of the purchase price allocation exercise arising from the acquisition of Style.com a deferred tax liability of $719,000 has been recognized in 2017 as a temporary difference. Refer to note 5.

Deferred tax liabilities

Note

2017

2018

At January 1

493

1,079

Deferred tax recognized on acquisition

5

719

-

Foreign exchange

91

(52
)
Released to profit or loss

(224
)

(282
)
At December 31

1,079

745

Deferred tax assets

2017

2018

At January 1

493

1,079

Deferred tax recognized

719

-

Foreign exchange

91

(52
)
Released to profit or loss

(224
)

(282
)
At December 31

1,079

745

Deferred tax, net

At December 31

-

-

~~A deferred tax asset has been recognized in 2017 following the acquisition of Style.com (note 5) equal to and to fully offset the deferred tax liability.~~

~~Deferred tax assets have been offset against deferred tax liabilities because they are in the same jurisdiction.~~

~~F-33~~

~~Notes to the consolidated financial statements (continued)~~

~~Unrecognized deferred tax assets~~

~~Unutilized trading tax losses~~

The Group has accumulated unutilized tax losses carried forward as at December 31, 2018 of $382m (2017: $232m). A net deferred tax asset is only recognized where it can be shown that it is probable that future taxable profits will be available against which the Group can utilize the asset. Subject to specific legislation regarding changes in ownership and the nature of trade, trading losses are available to be either carried forward indefinitely or for a significant time period.

Local
currency

2017

2017

2018

2018

Local ‘m

$’m

Local ‘m

$’m

UK trading losses

GBP

136

184

259

331

US Net Operating Losses (“NOL”)

USD

29

29

34

34

Brazil trading losses

BRL

42

13

49

13

Japan trading losses

JPY

463

4

274

2

Hong Kong trading losses

HKD

16

2

14

2

686

232

630

382

UK trading losses are available to be carried forward indefinitely. Legislation has been introduced with effect from April 1, 2017 whereby losses arising after April 1, 2017 can be set against total profits of the company. The amount of total profits that can be offset by brought forward losses is restricted to the first £5m of profits, and an additional 50% of profits that exceed £5.0m.

US Net Operating Losses as at December 31, 2017 ($29m) are available to be carried forward for a period of 20 years. The carry forward NOLs start to expire in different years, the first of which is December 31, 2030. NOLs generated after January 1,2018 ($5m) have an indefinite carry forward period but are subject to an 80% limitation per year.

Brazilian, Japanese and Hong Kong trading losses as at December 31, 2018 are available to be carried forward indefinitely but utilization of losses in respect of Brazil and Japan are restricted to 30% and 50% respectively against taxable income in future taxable periods.

~~Unutilized future tax deductions on employee share option gains~~

The Group has an unrecognized gross deferred tax asset of approximately $212m in respect of a future tax deduction on share options that are unexercised as at 31 December 2018 that when exercised will result in a gain and a potential deduction for corporation tax purposes. A net deferred tax asset is only recognized where it can be shown that it is probable that future taxable profits will be available against which the Group can utilize the asset.

~~26.~~

~~Commitments and guarantees~~

~~Consolidated~~

~~Future minimum lease payments under non-cancellable operating leases as at the year end were:~~

2017

2018

No later than one year

11,929

15,820

Later than one year not later than three years

20,297

26,599

Later than three year not later than five years

11,251

22,584

Later than five years

22,656

38,031

66,133

103,034

~~F-34~~

~~Notes to the consolidated financial statements (continued)~~

The Group’s operating leases relate to motor vehicles and property leases for the various office, production and retail stores that the Group has. There is no contingent rent (2017: none). Several leases have a right to renew at the end of the lease term.

~~There are no contingent liabilities (2017: none).~~

~~27.~~

~~Related party disclosures~~

Platforme International Limited is a related party of J M F Neves. The Group generated commission of $557,000 (2017: $248,000) from Platforme International Limited. The Group had a $13,000 receivable in 2018 (2017: $70,000 receivable).

Total compensation and benefits in kind (excluding share-based payments) to key management personnel amounted to $1,284,000 (2017: $1,200,000). In addition to this, there was share based payment compensation of $7,869,000 (2017: $1,900,000).

~~Conde Nast is a related party by virtue of its shareholding in the Group. The Group incurred marketing expenditure of $346,000 (2017: nil) and had a $19,000 payable in 2018 (2017: nil).~~

~~Until October 21, 2017, when Fashion Concierge UK Limited was acquired, see note 5, the Group made sales totaling, $110,000 to Fashion Concierge UK Limited. This was a related party of J M F Neves.~~

The acquisition of the business of Style.com (note 5) was a related party transaction because the former owners of Style.com Conde Nast, are also a shareholder of the Group. Jonathan Newhouse, the current chairman and chief executive of Conde Nast International is also a director of Farfetch.com Limited.

~~The Group’s ultimate controlling party is J M F Neves by virtue of holding the majority of voting rights in the Group.~~

~~28.~~

~~Financial instruments and financial risk management~~

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns. All debt has been settled in 2017. The capital structure of the Group throughout 2017 consisted of net cash (borrowings disclosed in note 23) and equity of the Group (comprising issued capital, reserves, accumulated losses and non-controlling interests as disclosed in notes 18, 19 and 21). At December 31, 2017 and 31 December 2018, the capital structure consisted solely of equity. The Group is not subject to any externally imposed capital requirements.

The Group is exposed to risks which arise from the probability of changes in the fair value of the future cash flows deriving from a financial instrument due to fluctuations in market prices. The Group has identified two principal risks being market risk (foreign exchange) and liquidity risk.

Where all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the hedged item. This will effectively result in recognizing inventory at the fixed foreign currency rate for the hedged purchases.

~~F-35~~

~~Notes to the consolidated financial statements (continued)~~

~~Categories of financial instruments~~

~~Financial assets~~

Amortized
cost

Amortized
cost

2017

2018

Current

Other receivables

5,294

48,285

Cash and cash equivalents

384,002

1,044,786

Non-current

Other receivables

9,193

10,458

Total

398,489

1,103,529

2017

2018

Foreign currency forwards - held at FVTPL

185

255

Foreign currency forwards - held as cash flow hedges

-

436

Derivative financial assets

185

691

~~Financial liabilities~~

Amortized
cost

Amortized
cost

2017

2018

Trade payables

73,992

96,176

Other payables

713

350

Total

74,705

96,526

Fair value
through
profit or loss

Fair value
through
profit or loss

2017

2018

Contingent consideration

19,146

-

19,146

-

~~Financial risk management objectives~~

The Group’s Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets and monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

~~F-36~~

~~Notes to the consolidated financial statements (continued)~~

~~Market risk~~

The Group’s activities expose it primarily to the financial risk of changes in foreign currency exchange rates (see table below). The Group enters into derivative financial instruments to manage its exposure to foreign currency risk.

~~Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.~~

The Group uses forward currency contracts to hedge its foreign currency risks. Where the criteria for hedge accounting are not met, derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value with movements recorded to the statement of operations. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Where all relevant criteria are met, hedge accounting is applied to minimize earnings volatility.

Financial assets/(liabilities)
at fair value through profit or loss

2017

2018

2017

2018

Derivative financial asset/(liability)

226

691

(41
)

-

~~Liquidity risk~~

The table below analyses the Group’s financial liabilities into relevant groupings based on the remaining period from the reporting date to the contractual maturity date. Amounts due within 12 months equal their carrying balances, as the impact of discounting is not significant.

~~All derivative financial instruments have a maturity of less than 12 months.~~

Less than
one year

Less than
one year

2017

2018

Trade and other payables

74,705

96,526

Contingent consideration

19,146

-

Total

93,851

96,526

More than
one year

More than
one year

2017

2018

Contingent consideration

-

-

Borrowings

-

-

-

-

~~Credit risk~~

Credit risk is the risk that financial loss arises from the failure of a customer to meet its obligations under a contract. Due to the nature of operations the Group does not have significant exposure to credit risk.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade and other receivables. The Group applies a loss allowance to trade and other receivables. As at December 31, 2018 all trade and other receivables were considered current being due within 30 days. The expected loss rate the Group applies for trade and other receivables is 0.5%.

~~F-37~~

~~Notes to the consolidated financial statements (continued)~~

The expected loss rates are based on the payment profiles of sales over a period of 36 month before 31 December 2018 or 1 January 2018 respectively and the corresponding historical credit losses experienced within this period which were not significant. The historical loss rates are adjusted to reflect current and forward looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified the GDP and the unemployment rate of the countries in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors.

The majority of the Group’s cash and cash equivalents balance is held in money market funds which are regulated by securities and market authorities. These consist of AAA rated mutual investment funds which are permitted to diversify portfolio investments through high quality debt securities meeting regulatory mandated requirements. As such, the Group is not exposed to any material credit risk in relation to the cash and cash equivalents balance.

~~Capital risk management~~

~~The Group is not subject to any externally imposed capital requirements. The capital structure is as follows:~~

2017

2018

Total borrowings

-

-

Less: cash and cash equivalents

(384,002
)

(1,044,786
)
Net cash

(384,002
)

(1,044,786
)
Total equity

396,903

1,128,431

Total capital

12,901

83,645

~~The main purpose of the Group’s financial instruments is to finance the Group’s operations.~~

The main risks from the Group’s financial instruments are currency riskand liquidity risk. The Board reviews and agrees policies, which have remained substantially unchanged for the year under review, for managing these risks.

~~Fair value hierarchy~~

~~Financial instruments carried at fair value are categorized into the below levels, reflecting the significance of the inputs used in estimating the fair values:~~

~~Level 1: Quoted prices (unadjusted) in active markets for identical instruments;~~

~~Level 2: Valuation techniques based on observable inputs, other than quoted prices included within level 1, that are observable either directly or indirectly from market data;~~

Level 3: Valuation techniques using significant unobservable inputs, this category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.

~~F-38~~

~~Notes to the consolidated financial statements (continued)~~

~~The Group recognizes the following financial instruments at fair value:~~

~~derivative financial instruments, measured using a level 2 valuation method; and~~

~~contingent consideration, measured using a level 2 valuation method.~~

The valuation of contingent consideration in 2017 was based upon the share price of the Group, which is deemed to be observable. As there was no quoted price the share price applied was from the most recent, pre-IPO, funding round, being Series G. The Group recognized net losses of $3,313,000 in 2017 when remeasuring the above to their fair values.

~~Financial instruments sensitivity analysis~~

~~Foreign exchange rate sensitivity analysis~~

~~The table below shows the Group’s sensitivity to United States dollars strengthening/weakening by 10%:~~

Increase/
(decrease)
in profit
or loss

Increase/
(decrease)
in profit
or loss

2017

2018

10% appreciation of United States dollars

7,576

29,169

10% depreciation of United States dollars

(9,260
)

(35,651
)

This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting year. The analysis assumes that all other variables, in particular interest rates, remain constant.

~~29.~~

~~Share options equity and cash settled~~

~~The Group has four equity settled share option plans (section a) and a cash settled share option plan (section b).~~

~~a. Equity settled~~

~~During the year ended December 31, 2018, the Group had four equity settled share based payment plans which are described below.~~

Type of arrangement

EMI approved share
option plan

Unapproved share
option plan

LTIP 2015 plan

LTIP 2018 plan

Date of first grant

November 1, 2011

July 1, 2011

September 9, 2015

September 20, 2018

Number granted

5,505,600

11,332,835

38,174,980

3,465,915

Contractual life

10 years

10 years

10 years

10 years

Vesting conditions

Varying tranches of options vesting upon defined years of service

Varying tranches of options vesting upon defined years of service

Varying tranches of options vesting upon defined years of service with certain awards having non-market conditions

Varying tranches of options and Restricted Stock Units (RSU) vesting upon defined years of service

~~F-39~~

~~Notes to the consolidated financial statements (continued)~~

~~Movements on the share options were as follows:~~

2016

2017

2018

Number of
options

Number of
options

Number of
options

Options at beginning of year

16,611,310

17,522,365

32,307,010

Options granted

6,128,555

15,666,155

18,209,410

Options exercised

(2,510,570
)

(198,525
)

(3,032,571
)
Options forfeited

(2,706,930
)

(682,985
)

(3,265,035
)

17,522,365

32,307,010

44,218,814

Options exercisable at end of year

10,214,900

12,551,425

16,830,409

~~Weighted average exercise prices were as follows:~~

2016

2017

2018

Options at beginning of year

$
0.76

$
2.01

$
4.43

Options granted

$
3.34

$
7.10

$
9.84

Options forfeited

$
0.57

$
6.71

$
7.31

Options exercised

$
0.08

$
0.08

$
2.38

Options at end of year

$
2.01

$
4.43

$
6.15

Options exercisable at year end

$
1.08

$
1.59

$
2.33

Weighted average remaining contracted life of options outstanding
at year end

7.67 years

8.00 years

9.54 years

2016

2017

2018

Number of
options

Number of
options

Number of
options

Exercise price of options outstanding at year end

$0.00 to $0.08

6,090,695

5,868,735

4,416,525

$0.09 to $0.56

5,581,825

5,581,825

2,126,540

$0.57 to $3.52

5,002,505

6,302,505

4,595,104

$3.53 to $5.73

847,340

8,589,445

6,257,690

$5.74 to $7.39

-

5,964,500

7,890,495

$7.40 to $20.00

-

-

18,932,460

17,522,365

32,307,010

44,218,814

Weighted average fair value of options granted in year

$
2.43

$
2.41

$
4.17

~~Weighted average share price at the date of exercise for options exercised during the year ended December 31, 2018 was $20.00 (2017: $9.42).~~

~~Inputs in the Black Scholes model for share options granted during the year and prior year were as follows:~~

2016

2017

2018

Black Scholes model

Weighted average share price

$
6.15

$
9.87

$
11.83

Weighted average exercise price

$
3.34

$
7.10

$
9.84

Average expected volatility

20%

20%

23%

Expected life

4 years

4 years

4 years

Risk free rate

1.40%

1.85%

2.75%

Expected dividends

$nil

$nil

$nil

~~Expected volatility was determined with reference to historical volatility of publicly traded peer companies.~~

~~F-40~~

~~Notes to the consolidated financial statements (continued)~~

~~The expected life in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioral considerations.~~

~~The Group recognized total expenses of $34,668,000, $16,667,000 and $17,256,000 related to equity-settled share based payment transactions in 2018, 2017 and 2016 respectively.~~

~~b. Cash settled~~

Since 2016 the Group issues to certain employees share appreciation rights (“SAR”s) that require the Group to pay the intrinsic value of the SAR to the employee at the date of exercise. The Group has recorded liabilities of $15,342,000 in 2018 ($5,123,000 in 2017) through the grant of 769,000 SARs (2017: 222,696 SARs).

The fair value of the SARs is determined by using the Black Scholes model using the same assumptions noted in the above table for the Group’s equity-settled share based payments. The fair value of the liability is then reassessed at each reporting date. Included in the 2018 expense of $10,355,000 (2017: $3,807,000, 2016: $1,178,000), is a revaluation gain of $6,079,000 (2017: gain of $2,071,000). The total intrinsic value at December 31, 2018 was $19,425,000 (2017: $7,362,000) of which $8,722,000 is fully vested (2017: $2,965,000).

~~30.~~

~~Events after the reporting year~~

On January 4, 2019, Farfetch Limited completed the acquisition of 100% of outstanding shares of Stadium Goods, the premier sneaker and streetwear marketplace with total consideration of $240,200,000. The Group expects to benefit from Stadium Goods’ brand, access to supply, and a team which will join the Group, bringing with them a strong passion for, and knowledge of, luxury streetwear. The consideration payable by the Group is in the form of cash and Farfetch Limited shares. The consideration payable was split as $150,200,000 of cash, and 4,641,554 Class A Ordinary Shares with a value of $90,000,000 based on the Farfetch share price at the acquisition date.

The transaction will be accounted for as a business combination under IFRS 3. Of the $90,000,000 share consideration, $58,100,000 includes a service condition for certain members of the Stadium Goods management team remaining with the Group over a four-year period. This does not satisfy the IFRS 3 definition of consideration and will be recognized as an expense in the statement of operations over the four-year service period as a share-based payment expense. Therefore, under IFRS 3, the consideration is $182,100,000 consisting of $150,200,000 cash consideration and $31,900,000 share consideration, none of which is contingent on future performance or service conditions.

Based on our preliminary purchase price allocation, which we expect to complete in Q1 2019 following finalization of the work, the total accounting consideration of $182,100,000, relates to the following: Net identified liabilities acquired of $8,900,000, comprising $2,400,000 of non-current assets, $(100,000) of net working capital, $800,000 of inventory, and $12,000,000 of provisions for withholding and sales taxes. $221,400,000 is allocated to goodwill and identifiable intangible assets acquired, comprising goodwill of $104,500,000 and the Stadium Goods Brand name of $116,900,000. Finally, there is a deferred tax liability of $30,400,000 in respect of the brand name.

In January 2019, the functional currency of Farfetch UK Limited, the Group’s primary trading entity, changed from pound sterling to U.S dollar. This was a result of a gradual change in the primary economic environment in which Farfetch UK Limited operates driven by the growth of consumers where the Group receives U.S. Dollars in settlement. This is combined with an increase in costs influenced by movements in the U.S dollar. The Group’s corporate treasury function continually monitors the Group’s exposure to foreign currencies movements, as described in note 28. Following the gradual change described above, the Group determined that, whilst Farfetch UK Limited is exposed to movements in several key currencies including U.S dollars, euros and

~~F-41~~

~~Notes to the consolidated financial statements (continued)~~

~~pound sterling, on reviewing Farfetch UK Limited’s expected receipts and expenses, U.S dollars had become the dominant currency from January 2019. This has hence triggered a change in functional currency.~~

On February 26, 2019, the Group entered into an Asset Purchase Agreement with Shanghai Yuanmai Trading Co., Ltd. to purchase “Level 1 Access” to the JD.com app, Toplife customer data, certain intellectual property and certain non-current assets for cash consideration of $50 million. The transaction will be accounted for as a business combination under IFRS 3 with the assets acquired constituting a business as defined by IFRS 3. Given the timing of the transaction, the Group is still finalizing the purchase price allocation and expects this to be completed by the end of the first quarter 2019. JD.com is a related party of the Group by virtue of the shareholding it has in the Group. Richard Liu, the founder, Chairman and Chief Executive Officer of JD.com, is a former director of the Board of Farfetch Limited. Dr. Jon Jainwen Liao, the Chief Strategy Officer of JD.com joined the board of Farfetch Limited in February 2019, following the departure of Richard Liu.

~~There have been no other events after the reporting year.~~

~~F-42~~

Title of each class	Trading Symbol(s)		Name of each exchange on which registered
Class A ordinary shares, par value $0.04 per share	FTCH		New York Stock Exchange


Large accelerated filer	☐☒	Accelerated filer	☐	Non-accelerated filer	☒☐	Emerging growth company	☒☐

		Page

PRESENTATION OF FINANCIAL AND OTHER INFORMATION		3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		58
RISK FACTOR SUMMARY		9

PART I

Item 1.	Identity of Directors, Senior Management and Advisers	611

Item 2.	Offer Statistics and Expected Timetable	611

Item 3.	Key Information	6
	~~A. Selected Financial Data~~	6
	~~B. Capitalization and Indebtedness~~	11
	~~C. Reasons for the Offer and Use of Proceeds~~A. Reserved	11
	B. Capitalization and Indebtedness	11
	C. Reasons for the Offer and Use of Proceeds	11
	D. Risk Factors	1211

Item 4.	Information on the Company	4260
	A. History and Development of the Company	4260
	B. Business Overview	4261
	C. Organizational Structure	5675
	D. Property, Plant and Equipment	5675

Item 4A.	Unresolved Staff Comments	5675

Item 5.	Operating and Financial Review and Prospects	5776
	A. Operating Results	6384
	B. Liquidity and Capital Resources	7195
	C. Research and Development, Patents and Licenses, etc.	7299
	D. Trend Information	7299
	E. ~~Off-Balance Sheet Arrangements~~Critical Accounting Estimates	72
	~~F. Tabular Disclosure of Contractual Obligations~~	72
	~~G. Safe Harbor~~	7299

Item 6.	Directors, Senior Management and Employees	73104
	A. Directors and Senior Management	73104
	B. Compensation	75107
	C. Board Practices	79109
	D. Employees	81112
	E. Share Ownership	82113

Item 7.	Major Shareholders and Related Party Transactions	82113
	A. Major Shareholders	82113
	B. Related Party Transactions	84115
	C. Interests of Experts and Counsel	87116

Item 8.	Financial Information	87117
	A. Consolidated Statements and Other Financial Information	87117
	B. Significant Changes	88118

Item 9.	The Offer and Listing	88118
	A. Offer and Listing Details	88118
	B. Plan of Distribution	88118
	C. Markets	88118
	D. Selling Shareholders	88118
	E. Dilution	118

	~~E. Dilution~~F. Expenses of the Issue	88
	~~F. Expense of the Issue~~	88118

Item 10.	Additional Information	89118
	A. Share Capital	89118
	B. Memorandum and Articles of Association	89118
	C. Material Contracts	89119
	D. Exchange Controls	89119
	E. Taxation	89119
	F. Dividends and Paying Agents	96126
	G. Statement by Experts	96126
	H. Documents on Display	96126
	I. Subsidiary Information	96126

Item 11.	Quantitative and Qualitative Disclosures About Market Risk	96126

Item 12.	Description of Securities Other Than Equity Securities	97127

PART II

Item 13.	Defaults, Dividend Arrearages and Delinquencies	98128

Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	98128

Item 15.	Controls and Procedures	98128

Item 16.	~~[Reserved]~~Reserved	99130

Item 16A.	Audit Committee Financial Expert	99130

Item 16B.	Code of Ethics	~~100~~130

Item 16C.	Principal Accountant Fees and Services	~~100~~130

Item 16D.	Exemptions from the Listing Standards for Audit Committees	~~101~~131

Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	~~101~~131

Item 16F.	Changes in Registrant’s Certifying Accountant	~~101~~131

Item 16G.	Corporate Governance	~~101~~131

Item 16H.	Mine Safety Disclosure	~~101~~132

Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	132

PART III

Item 17.	Financial ~~Statements~~statements	~~102~~133

Item 18.	Financial ~~Statements~~statements	~~102~~133

Item 19.	Exhibits	~~103~~134

SIGNATURES		~~105~~136

CONSOLIDATED FINANCIAL STATEMENTS		F-1

	Year ended December 31,
	2015			2016			2017			2018
	(in thousands, except share and per share data)
Consolidated Statement of Operations Data:
Revenue	$	142,305		$	242,116		$	385,966		$	602,384
Cost of revenue		(69,702	)		(125,238	)		(181,200	)		(303,934	)
Gross profit		72,603			116,878			204,766			298,450
Selling, general and administrative expenses		(130,073	)		(205,558	)		(299,260	)		(471,766	)
Share of profits of associates		-			18			31			33
Operating loss		(57,470	)		(88,662	)		(94,463	)		(173,283	)
Net finance (costs)/ income		(4,265	)		7,402			(17,642	)		19,866
Loss before tax		(61,735	)		(81,260	)		(112,105	)		(153,417	)
Income tax credit/(expense)		628			(199	)		(170	)		(2,158	)
Loss after tax	$	(61,107	)	$	(81,459	)	$	(112,275	)	$	(155,575	)
Loss per share attributable to owners of the parent:
Basic and diluted	$	(0.35	)	$	(0.43	)	$	(0.50	)	$	(0.59	)
Weighted average shares outstanding:
Basic and diluted		171,929,007			188,679,490			223,465,734			264,432,214
Consolidated Statement of Cash Flow Data:
Net cash outflow from operating activities	$	(37,258	)	$	(47,079	)	$	(59,320	)	$	(116,205	)
Net cash outflow from investing activities		(27,571	)		(16,961	)		(28,863	)		(63,538	)
Net cash inflow from financing activities	$	77,414		$	161,173		$	300,142		$	859,526

	As of December 31,
	2016		2017		2018
	(in thousands)
Consolidated Statement of Financial Position Data:
Non-current assets	$	64,128	$	110,266	$	151,983
Current assets		180,904		452,792		1,199,410
Total assets		245,032		563,058		1,351,393
Current liabilities		89,425		155,890		194,158
Non-current liabilities		36,691		10,265		28,804
Total liabilities		126,116		166,155		222,962
Share capital and premium		348,832		686,972		784,294
Total equity	$	118,916	$	396,903	$	1,128,431

		Year ended December 31,
		2019 ⁽²⁾			2020⁽²⁾			2021
	(in thousands, except per share data and AOV)
Selected Other Data:
Consolidated Group:
GMV⁽¹⁾		$	2,139,699		$	3,187,014		$	4,229,874
Revenue			1,021,037			1,673,922			2,256,608
Adjusted Revenue ⁽¹⁾			893,077			1,460,694			1,924,104
Gross Profit			459,846			770,928			1,016,511
Gross Profit Margin		45.0%			46.1%			45.0%
(Loss)/Profit After Tax ⁽²⁾		$	(393,500	)	$	(3,315,623	)	$	1,470,611
Adjusted EBITDA (1)			(121,376	)		(47,432	)		1,638
Adjusted EBITDA Margin ⁽¹⁾		(13.6%)			(3.2%)			0.1%
Basic (Loss)/Earnings Per Share (“EPS”) ⁽²⁾		$	(1.27	)	$	(9.69	)	$	4.02
Diluted EPS			(1.27	)		(9.69	)		(1.07	)
Adjusted EPS ^{(1) (2)}			(0.56	)		(0.60	)		(0.55	)
Digital Platform:
Digital Platform GMV ⁽¹⁾		$	1,947,868		$	2,759,476		$	3,677,988
Digital Platform Services Revenue			701,246			1,033,156			1,385,678
Digital Platform Gross Profit			371,913			560,206			730,253
Digital Platform Gross Profit Margin		53.0%			54.2%			52.7%
Digital Platform Order Contribution ⁽¹⁾		$	220,563		$	361,419		$	438,432
Digital Platform Order Contribution Margin ⁽¹⁾		31.5%			35.0%			31.6%
Active Consumers ⁽¹⁾			2,068			3,024			3,687
Average Order Value - Marketplace ⁽¹⁾		$	608		$	568		$	612
Average Order Value - Stadium Goods ⁽¹⁾			315			316			308
Brand Platform:
Brand Platform GMV ⁽¹⁾		$	164,210		$	390,014		$	467,505
Brand Platform Revenue			164,210			390,014			467,505
Brand Platform Gross Profit			75,007			190,804			241,516
Brand Platform Gross Profit Margin		45.7%			48.9%			51.7%

	Year ended December 31,									% of Adjusted Revenue						Year ended December 31,									2019 vs. 2020			2020 vs. 2021
	2017			2018			% Change			2017			2018			2019 ⁽¹⁾			2020			2021			% Change			% Change
	(in thousands)															(in thousands)
Demand generation expense	$	(69,202	)	$	(97,295	)		(40.6	%)		(22.2	%)		(19.3	%)	$	(151,350	)	$	(198,787	)	$	(291,821	)		(31.3	%)		(46.8	%)
Technology expense		(31,611	)		(68,224	)		(115.8	)		(10.1	)		(13.5	)		(84,207	)		(115,227	)		(131,408	)		(36.8	%)		(14.0	%)
Share-based payments ⁽¹⁾																	(178,234	)		(291,633	)		(196,167	)		(63.6	%)		32.7	%
Depreciation and amortization		(10,980	)		(23,537	)		(114.4	)		(3.5	)		(4.7	)		(113,591	)		(217,223	)		(251,198	)		(91.2	%)		(15.6	%)
Share based payments		(21,486	)		(53,819	)		(150.5	)		(6.9	)		(10.7	)
General and administrative		(165,981	)		(228,891	)		(37.9	)		(53.2	)		(45.4	)		(345,665	)		(504,346	)		(591,644	)		(45.9	%)		(17.3	%)
Total	$	(299,260	)	$	(471,766	)		(57.6	%)		(96.0	%)		(93.5	%)
Other items																	(16,374	)		(24,267	)		(18,730	)		(48.2	%)		22.8	%
Selling, general and administrative expenses																$	(889,421	)	$	(1,351,483	)	$	(1,480,968	)		(52.0	%)		(9.6	%)

	% of Adjusted Revenue
	2019 ⁽¹⁾			2020			2021

Demand generation expense		(16.9	%)		(13.6	%)		(15.2	%)
Technology expense		(9.4	%)		(7.9	%)		(6.8	%)
Share-based payments ⁽¹⁾		(20.0	%)		(20.0	%)		(10.2	%)
Depreciation and amortization		(12.7	%)		(14.9	%)		(13.1	%)
General and administrative		(38.7	%)		(34.5	%)		(30.7	%)
Other items		(1.8	%)		(1.7	%)		(1.0	%)
Selling, general and administrative expenses		(99.6	%)		(92.5	%)		(77.0	%)

	As of December 31,
	2019⁽¹⁾		2020⁽¹⁾			2021
	(in thousands)
Consolidated Statement of Financial Position Data:
Current assets	$	645,330	$	1,961,000		$	2,111,680
Non-current assets		1,582,549		1,629,871			1,714,834
Total assets		2,227,879		3,590,871			3,826,514
Current liabilities ⁽¹⁾		467,998		778,747			907,257
Non-current liabilities		422,049		4,470,766			2,648,641
Total liabilities		890,047		5,249,513			3,555,898
Share capital and premium		891,591		942,099			1,656,905
Total equity/(deficit) ⁽¹⁾	$	1,337,832	$	(1,658,642	)	$	270,616

	Payments due by period
Contractual Obligations		Less than one year		One to three years		Three to five years		More than five years
	(in thousands)
Long term debt		$	-	$	-	$	50,000	$	1,000,000
Put and call option liabilities			8,321		188,261		656,640		-
Finance leases			54,216		73,685		51,124		90,801
Purchase Obligations			168,019		-		-		-
Total		$	230,556	$	261,946	$	757,764	$	1,090,801

Name	Age	Position
Executive Officers
José Neves (4)	4447	Chief Executive Officer and ~~Co-Chair~~Chairman of the Board
Elliot Jordan	4346	Chief Financial Officer
~~Andrew Robb~~Stephanie Phair	4243	Chief ~~Operating~~Customer Officer
Board Members
~~Frederic Court(2)~~Dana Evan (1)(2)(4)	4962	Board Member
~~Dana Evan(1)(2)~~J. Michael Evans	5964	Board Member
~~Jon Kamaluddin(1)~~	45	~~Board Member~~
~~Dr. Jon Jainwen Liao, PhD(4)~~	51	~~Board Member~~
~~Natalie Massenet(3)~~	53	~~Co-Chair of the Board~~
~~Jonathan Newhouse~~	66	~~Board Member~~
~~Danny Rimer(2)(3)~~	48	~~Board Member~~
~~Michael A. Risman(1)~~Stephanie Horton (4)	50	Board Member
~~David Rosenblatt(2)~~Diane Irvine (1)(3)	5063	Board Member
Victor Luís (1)(3)	55	Board Member
David Rosenblatt (2)(3)	53	Board Member
Gillian Tans (1)(2)	51	Board Member

Geography	As of December 31,
	~~2018~~2021
Portugal		~~1,855~~3,068
United Kingdom		~~718~~1,246
United States of America		~~172~~565
~~Mainland~~ China		~~173~~519
Italy		510
Brazil		~~130~~177
Russian Federation		86
Japan		57
~~Russia~~		4984
Hong Kong		3679
United Arab Emirates		2875
India		724
~~Italy~~France		519
Mexico		13
Canada		2
Switzerland		4
Saudi Arabia		2
Australia		1
Total		~~3,232~~6,464

Department	As of December 31,		As of December 31,		As of December 31,		As of December 31,		As of December 31,		As of December 31,
	2016		2017		2018		2019		2020		2021
Technology and Product		494		802		1,241		1,465		1,629		1,912
Operations		487		759		1,017		1,801		2,197		2,554
Browns		-		133		177
Marketing		159		157		207		222		345		445
Commercial		93		114		146		213		285		306
People		50		100		125		184		197		245
Finance and Legal		62		95		130		233		288		356
Data Department								92		143		176
Other		47		127		189		322		357		470
Total		1,392		2,287		3,232		4,532		5,441		6,464

	Class A ordinary shares					Class B ordinary shares					Combined
Name of beneficial owner	Number		Percent			Number		Percent			voting power (1)
Holders of 5% or Greater
Kadi Group Holding Limited(2)		42,366,665		16.0	%	-		-				3.8	%
Index Ventures V (Jersey), L.P.(3)		28,359,930		10.7	%	-		-				2.5	%
Advent Private Equity Fund(4)		24,559,309		9.3	%	-		-				2.2	%
Farhold (Luxembourg)(5)		22,047,241		8.3	%	-		-				2.0	%
Advance Publications(6)		14,838,410		5.6	%	-		-				1.3	%

Executive Officers and Directors
José Neves(7)		1,696,377	*				42,858,080		100	%		76.6	%
Elliot Jordan(8)		733,435	*			-		-			*
Andrew Robb(9)		1,812,910	*			-		-			*
Frederic Court(10)		-	*			-		-			*
Dana Evan		634,570	*			-		-			*
Jon Kamaluddin(11)		445,390	*			-		-			*
Dr. Jon Jainwen Liao, Ph.D.(12)		-	*			-		-			*
Natalie Massenet(13)		775,635	*			-		-			*
Jonathan Newhouse(14)		-	*			-		-			*
Danny Rimer(15)		-	*			-		-			*
Mike Risman(16)		-	*			-		-			*
David Rosenblatt		122,750	*			-		-			*
Executive officers and directors as a group (12 persons)(17)		6,221,067		2.4	%		42,858,080		100	%		77.0	%

	Class A ordinary shares					Class B ordinary shares ⁽¹⁾
Name of beneficial owner	Number		Percent			Number		Percent			Combined voting power ⁽²⁾
Holders of 5% or Greater
T. Rowe Price Associates ⁽³⁾		35,110,450		10.4	%	-		-				2.9	%
Baillie Gifford ⁽⁴⁾		30,400,596		9.0	%	-		-				2.5	%
Morgan Stanley⁽⁵⁾		30,171,050		8.9	%	-		-				2.5	%
Lone Pine Capital LLC ⁽⁶⁾		24,439,933		7.2	%	-		-				2.0	%
Invesco Ltd ⁽⁷⁾		20,763,328		6.1	%	-		-				1.7	%

Executive Officers and Directors
José Neves ⁽⁸⁾		4,638,857		1.4	%		42,858,080		100	%		71.8	%
Elliot Jordan ⁽⁹⁾		930,183	*			-		-			*
Stephanie Phair ⁽¹⁰⁾		767,301	*			-		-			*
Dana Evan ⁽¹¹⁾		609,008	*			-		-			*
J. Michael Evans	-		*			-		-			*
Stephanie Horton		9,005	*			-		-			*
Diane Irvine		6,557	*			-		-			*
Victor Luís		6,557	*			-		-			*
Gillian Tans		6,557	*			-		-			*
David Rosenblatt ⁽¹²⁾		899,283	*			-		-			*
Officers and directors as a group (10 persons) (13)		7,873,308		2.3	%		42,858,080		100.0	%		71.9	%

Exhibit No.	Description	Form	File No.	Exhibit No.	Filing Date	Filed/Furnished

1.1	Amended and Restated Memorandum and Articles of Association of the Registrant as currently in effect.	6-K	001-38655	99.1	11/18/2021

2.1	Registration Rights Agreement, dated as of July 21, 2017, by and among Farfetch.com Limited and certain shareholders of Farfetch.com Limited.	F-1	333-226929	4.1	8/20/2018

2.2	Description of Securities.					*

2.3	Form of Class A Ordinary Share Certificate.	F-1	333-226929	4.3	8/20/2018

2.4	Indenture, dated as of February 5, 2020, by Farfetch Limited and Wilmington Trust, National Association.	20-F	001-38655	2.5	3/11/2020

2.5	Indenture, dated as of April 30, 2020, by Farfetch Limited and Wilmington Trust, National Association.	6-K	001-38655	4.1	4/30/2020

2.6	Indenture, dated as of November 17, 2020, by Farfetch Limited and Wilmington Trust, National Association.	20-F	001-38655	2.6	3/4/2021

4.1†	Form of Indemnification Agreement.	20-F	001-38655	4.1	3/4/2021

4.2†	Amended and Restated Rules of the Farfetch.com Limited Enterprise Management Incentive Scheme, adopted July 17, 2013.	F-1	333-226929	10.2	8/20/2018

4.3†	Rules of the Farfetch.com Limited Share Option Scheme, adopted July 18, 2013.	F-1	333-226929	10.3	8/20/2018

4.4†	Farfetch.com Limited 2015 Long-Term Incentive Plan, adopted February 13, 2015.	F-1	333-226929	10.4	8/20/2018

4.5†	2018 Farfetch Employee Equity Plan and subplans thereto.					*

4.6†	Form of Performance-Based Restricted Share Unit Agreement.	6-K	001-38655	99.1	5/28/2021

4.7	Acquisition Agreement, dated as of December 12, 2018, between Stadium Goods and Farfetch Limited.	20-F	001-38655	4.14	3/1/2019

4.8	Sale and Purchase Agreement relating to the Acquisition of New Guards Group Holding s.p.a, dated as of August 2, 2019, between multiple sellers, Farfetch Italia S.r.l. and Farfetch Limited.	20-F	001-38655	4.15	3/11/2020

8.1	List of Subsidiaries.					*

12.1	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					*

12.2	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					*

13.1	Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					**

13.2	Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					**

15.1	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.					*

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.					*

101.SCH	Inline XBRL Taxonomy Extension Schema Document.					*

~~Exhibit~~ ~~No.~~	Inline XBRL Taxonomy Extension Calculation Linkbase Document.		*

101.DEF	Inline XBRL Taxonomy Definition Linkbase Document.		*

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.		*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.		*
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).		*

*	Filed herewith.
**	Furnished herewith.	~~Description~~

~~4.10~~	Payment Processing Agreement, dated as of April 18, 2018, between Chinabank Payment Technology Co. Ltd. and Farfetch UK Limited (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form F-1 (File No. 333-226929) filed with the SEC on August 20, 2018).

~~4.11~~	Amended and Restated Forward Purchase Agreement, dated as of August 8, 2018, between Farfetch.com Limited and Kadi Group Holding Limited (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form F-1 (File No. 333-226929) filed with the SEC on August 20, 2018).

~~4.12~~	Consultancy Agreement, dated August 15, 2018, between Farfetch UK Limited and Natalie Massenet (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form F-1 (File No. 333-226929) filed with the SEC on August 20, 2018).†

~~4.13~~	Form of 2018 Farfetch Employee Equity Plan (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 (Filed No. 333-227536) filed with the SEC on September 26, 2018).†

~~4.14~~	~~Acquisition Agreement, dated as of December 12, 2018 between Stadium Goods and Farfetch Limited.~~

~~4.15~~	~~Amended and Restated Commitment Agreement, dated as of February 27, 2019 between Kadi Group Holding Limited and José Neves.~~

~~8.1~~	~~List of subsidiaries.~~

~~12.1~~	~~Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~12.2~~	~~Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~13.1~~	~~Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~13.2~~	~~Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~15.1~~	~~Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.~~

~~101.INS~~	~~XBRL Instance Document.~~

~~101.SCH~~	~~XBRL Taxonomy Extension Schema Document.~~

~~101.CAL~~	~~XBRL Taxonomy Extension Calculation Linkbase Document.~~

~~101.DEF~~	~~XBRL Taxonomy Definition Linkbase Document.~~

~~101.LAB~~	~~XBRL Taxonomy Extension Label Linkbase Document.~~

~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase Document~~

	Farfetch Limited

Date: March 4, 2022	By:	/s/ José Neves
		José Neves
		Chief Executive Officer

~~Report of Independent Registered Public Accounting Firm~~	~~F-1~~

~~Consolidated statements of operations for the years ended December 31, 2018, 2017 and 2016~~	F-2

~~Consolidated statements of comprehensive loss for the years ended December 31, 2018, 2017 and 2016~~	~~F-3~~

~~Consolidated statements of financial position as of December 31, 2018, 2017 and 2016~~	~~F-4~~

~~Consolidated statements of changes in equity for the years ended December 31, 2018, 2017 and 2016~~	~~F-5~~

~~Consolidated statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016~~	~~F-6~~

~~Notes to Consolidated Financial Statements~~	~~F-7~~

Report of Independent Registered Public Accounting Firm	F-2
	To
Consolidated statement of operations for the ~~Board~~years ended December 31, 2021, 2020 and 2019	F- 6

Consolidated statement of ~~Directors~~comprehensive (loss)/income for the years ended December 31, 2021, 2020 and ~~Shareholders of Farfetch Limited~~2019	F- 7
~~Opinion on the Financial Statements~~
~~We have audited the accompanying consolidated statements~~Consolidated statement of financial position ~~of Farfetch Limited and its subsidiaries (the “Company”)~~ as of December 31, ~~2018~~2021 and ~~2017, and the related consolidated statements~~2020	F- 8

Consolidated statement of ~~operations, comprehensive loss,~~ changes in ~~equity~~equity/(deficit) for the years ended December 31, 2021, 2020 and 2019	F-9

Consolidated statement of cash flows for ~~each of~~ the ~~three~~ years ~~in the period~~ ended December 31, ~~2018, including the related notes (collectively referred~~2021, 2020 and 2019	F- 10

Notes to ~~as the “consolidated~~Consolidated financial ~~statements”). In our opinion, the consolidated financial~~ statements ~~present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017,~~	F-11

	Note		December 31, 2020 ⁽¹⁾			December 31, 2021
Non-current assets
Other receivables		15	$	58,081		$	31,225
Deferred tax assets		26		13,556			13,334
Intangible assets		16		1,279,328			1,359,657
Property, plant and equipment		17		89,082			97,063
Right-of-use assets		18		179,227			195,549
Investments		19		8,278			17,937
Investments in associates		19		2,319			69
Total non-current assets				1,629,871			1,714,834
Current assets
Inventories		14		145,309			255,664
Trade and other receivables		15		209,946			374,706
Current tax assets				2,082			10,201
Short-term investments		21		-			99,971
Derivative financial assets		28		30,242			8,010
Cash and cash equivalents		20		1,573,421			1,363,128
Total current assets				1,961,000			2,111,680
Total assets				3,590,871			3,826,514
Liabilities and (Deficit)/equity
Non-current liabilities
Provisions		24		129,113			60,545
Deferred tax liabilities		26		182,463			156,025
Lease liabilities		18		165,275			180,915
Employee benefit obligations		29		26,116			12,948
Derivative financial liabilities	23,28			2,996,220			872,428
Borrowings ⁽¹⁾		23		617,789			515,804
Put and call option liabilities		28		348,937			836,609
Other financial liabilities				4,853			13,367
Total non-current liabilities				4,470,766			2,648,641
Current liabilities
Trade and other payables		22		666,144			806,406
Provisions		24		27,146			14,585
Current tax liability				3,098			5,189
Lease liabilities		18		26,128			33,594
Employee benefit obligations		29		38,286			8,296
Derivative financial liabilities	23,28			17,427			21,118
Put and call option liabilities		28		-			8,321
Other financial liabilities				518			9,748
Total current liabilities				778,747			907,257
Total liabilities				5,249,513			3,555,898
(Deficit)/equity
Share capital		30		14,168			15,231
Share premium		30		927,931			1,641,674
Merger reserve		30		783,529			783,529
Foreign exchange reserve				(7,271	)		(24,544	)
Other reserves ⁽¹⁾		31		467,565			59,520
Accumulated losses ⁽¹⁾				(4,013,120	)		(2,386,802	)
(Deficit)/equity attributable to owners of the parent				(1,827,198	)		88,608
Non-controlling interests		33		168,556			182,008
Total (deficit)/equity				(1,658,642	)		270,616
Total (deficit)/equity and liabilities			$	3,590,871		$	3,826,514

	Share capital		Share premium		Merger reserve		Foreign exchange reserve			Other reserves ⁽¹⁾			Accumulated losses ⁽¹⁾			Equity/(deficit) attributable to owners of the parent			Non-controlling interest			Total equity/ (deficit)
Balance at December 31, 2018	$	11,994	$	772,300	$	783,529	$	(23,509	)	$	67,474		$	(483,357	)	$	1,128,431		$	-		$	1,128,431
Changes in equity/(deficit)
(Loss)/profit after tax for the year ⁽¹⁾		-		-		-		-			-			(405,109	)		(405,109	)		11,609			(393,500	)
Other comprehensive loss		-		-		-		(7,333	)		(3,684	)		-			(11,017	)		-			(11,017	)
Total comprehensive (loss)/income for the year, net of tax		-		-		-		(7,333	)		(3,684	)		(405,109	)		(416,126	)		11,609			(404,517	)
Loss on cashflow hedge transferred to inventory		-		-		-		-			142			-			142			-			142
Issue of share capital, net of transaction costs		1,590		105,707		-		-			393,105			-			500,402			-			500,402
Share-based payment – equity-settled		-		-		-		-			76,383			46,841			123,224			-			123,224
Share-based payment- reverse vesting shares ⁽¹⁾		-		-		-		-			(62,834	)		-			(62,834	)		-			(62,834	)
Transaction with non-controlling interests		-		-		-		-			(101,311	)		-			(101,311	)		-			(101,311	)
Non-controlling interest arising from a business combination		-		-		-		-			-			-			-			158,617			158,617
Non-controlling interest call option		-		-		-		-			-			(4,322	)		(4,322	)		-			(4,322	)
Balance at December 31, 2019 ⁽¹⁾		13,584		878,007		783,529		(30,842	)		369,275			(845,947	)		1,167,606			170,226			1,337,832
Balance at December 31, 2019 (as previously reported)		13,584		878,007		783,529		(30,842	)		349,463			(826,135	)		1,167,606			170,226			1,337,832
Correction of misstatement ⁽¹⁾		-		-		-		-			19,812			(19,812	)		-			-			-
Revised balance at December 31, 2019		13,584		878,007		783,529		(30,842	)		369,275			(845,947	)		1,167,606			170,226			1,337,832
Changes in equity/(deficit)
(Loss)/profit after tax for the year ⁽¹⁾	-		-		-		-			-				(3,333,171	)		(3,333,171	)		17,548			(3,315,623	)
Other comprehensive income	-		-		-			23,571			15,913			-			39,484			332			39,816
Total comprehensive income/(loss) for the year, net of tax		-		-		-		23,571			15,913			(3,333,171	)		(3,293,687	)		17,880			(3,275,807	)
Gain on cashflow hedge transferred to inventory	-		-		-		-				(1,213	)	-				(1,213	)	-				(1,213	)
Issue of share capital, net of transaction costs		584		49,924	-		-				4,808			-			55,316			-			55,316
Share-based payment – equity-settled	-		-		-		-				52,690			165,998			218,688			-			218,688
Share-based payment- reverse vesting shares	-		-		-		-				26,092		-				26,092			-			26,092
Acquisition of non-controlling interest	-		-		-		-				-		-				-			965			965
Dividends paid to non-controlling interests	-		-		-		-				-		-				-			(20,515	)		(20,515	)
Balance at December 31, 2020 ⁽¹⁾		14,168		927,931		783,529		(7,271	)		467,565			(4,013,120	)		(1,827,198	)		168,556			(1,658,642	)
Balance at December 31, 2020 (as previously reported)		14,168		927,931		783,529		(7,271	)		447,753			(4,010,756	)		(1,844,646	)		168,556			(1,676,090	)
Correction of misstatements ⁽¹⁾		-		-		-		-			19,812			(2,364	)		17,448			-			17,448
Revised balance at December 31, 2020		14,168		927,931		783,529		(7,271	)		467,565			(4,013,120	)		(1,827,198	)		168,556			(1,658,642	)
Changes in equity/(deficit)
Profit after tax for the year		-		-		-		-			-			1,466,487			1,466,487			4,124			1,470,611
Other comprehensive loss		-		-		-		(17,273	)		(27,405	)		-			(44,678	)		(2,744	)		(47,422	)
Total comprehensive (loss)/income for the year, net of tax		-		-		-		(17,273	)		(27,405	)		1,466,487			1,421,809			1,380			1,423,189
Loss on cashflow hedge transferred to inventory	-		-		-		-				2,066		-				2,066			-			2,066
Issue of share capital, net of transaction costs		333	-		-		-			-			-				333			-			333
Early conversion of convertible loan notes		653		630,976		-		-			-			-			631,629			-			631,629
Share-based payment – equity-settled	-		-		-		-				61,282			159,831			221,113			-			221,113
Share-based payment- reverse vesting shares		51		54,626	-		-				(24,486	)	-				30,191			-			30,191
Acquisition of non-controlling interest	-		-		-		-				(11,613	)	-				(11,613	)		(6,901	)		(18,514	)
Dividends paid to non-controlling interests	-		-		-		-				-		-				-			(23,016	)		(23,016	)
Non-controlling interest arising on purchase of asset		20		23,767	-		-				-		-				23,787			50,453			74,240
Share issued on purchase of subsidiary		6		4,374		-		-			-			-			4,380			-			4,380
Step acquisition	-		-		-		-				-		-				-			2,434			2,434
Non-controlling interest put option	-		-		-		-				(150,070	)	-				(150,070	)		-			(150,070	)
Farfetch China Holdings Ltd put call option	-		-		-		-				(744,163	)	-				(744,163	)		-			(744,163	)
Capital contribution from non-controlling interests, net of transaction costs	-		-		-		-				488,863		-				488,863			(13,875	)		474,988
Other	-		-		-		-				(2,519	)		-			(2,519	)		2,977			458
Balance at December 31, 2021	$	15,231	$	1,641,674	$	783,529	$	(24,544	)	$	59,520		$	(2,386,802	)	$	88,608		$	182,008		$	270,616

	Year ended December 31, 2020 (as previously reported)			Share Based Payment expense Adjustment		Interest expense Adjustment		Year ended December 31, 2020 (revised)
Finance costs	$	(108,742	)	$	-	$	17,448	$	(91,294	)
Loss before tax		(3,347,505	)		-		17,448		(3,330,057	)
Income tax benefit		14,434			-		-		14,434
Loss after tax	$	(3,333,071	)	$	-	$	17,448	$	(3,315,623	)
(Loss)/profit after tax attributable to:
Equity holders of the parent		(3,350,619	)		-		17,448		(3,333,171	)
Non-controlling interests	$	17,548		$	-	$	-	$	17,548